The tide has turned in the economy. Jobs are coming back and Americans are returning to work. The latest figures make it clear that the nation is on the road to recovery, with a substantial decline in unemployment. In keeping with the trend under President Trump of surpassing expectations, the jobs report blew previous predictions out of the water. Instead of 8 million additional lost jobs, as some predicted, gross employment rose by more than 2 million jobs, and unemployment fell to 13 percent. What could be next?
Let us see if Congress takes this good news to heart and uses it as an opportunity to reassess its response to the coronavirus. The latest figures tell us that further spending is unnecessary. Workers and businesses across the country are powering this economy, not the corporate bailouts and relief packages. As the economy restarts, the need for more stimulus funds evaporates.
We are not out of the woods yet, and more spending seems inevitable. But Congress must keep spending down and adopt a more focused approach that targets funding where it is needed most, such as for hospitals and long term care facilities. At the same time, businesses will continue to open responsibly. Americans get far less credit than they deserve for taking this pandemic seriously without the public lockdown restrictions. I am confident that employers will take steps to keep workers safe while also protecting our most vulnerable members of society.
To help speed our recovery, Congress has other fiscal options on the table besides massive spending bills. A payroll tax holiday and capital gains tax relief would give workers the help they need and businesses the freedom to operate. The coronavirus is a gift to bankruptcy attorneys. We need substantial liability shields for businesses, or else trial lawyers will have a field day sending even more businesses into bankruptcy. By providing businesses with a liability shield, we would be granting much needed regulatory certainty to an America that is plagued by uncertainty.
Another fantastic option for policymakers seeking to spur our economic recovery would be the introduction of a capital gains tax holiday. Though the stock market has begun to rebound, investment has been stifled by COVID-19. As our Vice President of Legislative Affairs, Jason Pye, explained “A capital gains tax holiday for stocks purchased during the crisis and in its immediate aftermath will incentivize more investment and, in turn, help retirement accounts recover from the recent losses and supply many businesses with the necessary capital to expand.”
We need to allow the private sector to take the lead on rebuilding the economy, not central planners in Washington. If left unchecked, elected officials will continue to spend. Politicians like to spend taxpayer dollars. It’s the easy way out. COVID-19 already provided Washington the pretext to take more control over our lives. Massive spending bills continue to give Congress and unelected bureaucrats more of the same.
The May jobs report indicates that America has begun to rebound. As we predicted, reopening America worked. Yet, with many states lagging behind, much remains to be done to get our economy back on track. Policymakers should take these signs as evidence that future stimulus is unnecessary. However, if spending is inevitable, it must be done carefully.
Adam Brandon is president of the nonprofit organization FreedomWorks.