If President-elect Barack Obama is looking for boosters to support his vision of a new New Deal, the U.S. Chamber of Commerce will not be the first in line.
The business group says the plan represents a look back, not the new vision the nation needs.
“The nation must avoid a big and permanent expansion of government payrolls and powers,” said U.S. Chamber CEO Tom Donohue said in remarks on the economy on Jan. 7. “We don’t need and can’t afford another New Deal. The 2008 election was all about change. It’s not change if you go backwards to the policies and approaches of the 1930s.”
But a key aspect of Obama’s nearly $1 trillion plan is federal spending on public works and transportation projects, aspect widely cheered by cash-strapped local governments. According to the Phoenix Business Journal local cities such as Mesa, Phoenix and Scottsdale have a list of so-called “shovel-ready” works they are hoping will gain funding by an Obama stimulus package.
Chamber officials do not oppose the public works aspect of the plan, but have called for it to be coupled with business-oriented tax relief, the Business Journal story said, including lowering the cost of Small Business Administration loans, keeping in place tax cuts passed in 2001 and 2003, and lowering business investment taxes.
Either way, the economic outlook only gets more dire by the day, it seems
“The chamber expects the fourth quarter of 2008 to show a GDP decline of at least 5 percent,” Donohue said. “GDP in the first quarter of 2009 will likely shrink by more than 3 percent. The economy should reach its low point around the middle of the year, but further problems in credit markets or other external shocks may prolong the recession into the second half of 2009.”
Despite its push for business aid, the chamber did not specifically back plans favored by U.S. Sen. John McCain, R-Ariz. and some business advocates to cut federal corporate income tax rates from 35 percent to 25 percent, the Business Journal article said.
This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to email@example.com.