Duncan: Uncertainty Slowing Economic Recovery

U.S. Rep. Jeff Duncan said uncertainties are slowing the economic recovery and “keeping money on the sidelines.”

Duncan spoke on the various uncertainties plaguing the country during a legislative update he gave to Easley Chamber of Commerce members Friday.

He said government needs to put people back to work by advocating policies that “create certainty in the marketplace.”

“Employers right now are having to make decisions with a lot of uncertainty,” Duncan said. Let's say you have 49 employees, and you're going to hire that 50^th or 51^st or 55^th employee. You just rolled up a whole new category under the Obamacare Affordable Health Care Act. Now you're responsible for the health insurance of those employees – they're not responsible for it on their own. You're going to be responsible for it as an employer because you've exceeded that 50-person threshold.

“That's uncertainty,” he continued. “What are those costs going to be for me as an employer? What are my employees going to cost me, if I do that?”

He gave as an example a family-owned company with 250 employees, that spends about $1 million a year to provide health care to its employees.

“They say, 'Jeff, we have always provided health insurance to our employees,'” Duncan said. “'If I decide I'm not going to do that anymore, I'd be taxed at $2,000 per employee – that's what the Supreme Court said. If I don't provide health insurance benefits, they'll roll up under Obamacare and it'll be some kind of government-provided health insurance and I'll get penalized or taxed a the rate of $2,000 per employee.”

For that business, that would add up to a tax of about $500,000, Duncan said.

“So he's paying a million dollars providing the insurance he always has,” he said. “But if I take those same employees and I don't provide that anymore ...it's going to cost me $500,000 over here. So I've saved $500,000 by doing that. That's money I can take to the bottom line or put in my pocket. He's got uncertainty now because he's got to decide whether he wants to take more profitability or if he want to continue being a family-owned company that does the right thing for its employees.”

Duncan said the uncertainty won't go away, even if Republicans win White House and the Senate and take control of Congress.

“If they repeal Obamacare, what steps into the void?” he asked. “There's uncertainty created by that.”

Tax policy uncertainty is also holding back the recovery, Duncan said.

“What is tax policy going to be for this nation going forward?” he said. “Every time the president goes to a microphone, he seems to talk raising taxes on somebody or taxes seem to be an issue. Then we've got the expiring Bush-era tax rates – they're coming up at the end of the year, nobody knows what that's going to be. We've got estate taxes may go up to 6 percent vs. 3 percent, or may go down. There's uncertainty there. There's uncertainty in tax policy right because no one knows what the future tax policy will be post-January.”

Regulatory uncertainty is also a factor.

“Right here in Pickens County, we deal with EPA air quality standards that effect businesses and whether you put an off-ramp near Liberty to provide a commerce park and more business opportunities in Pickens County,” Duncan said.

He was referring to air quality standards that list the Highway 123 corridor as having more emissions that the I-85 corridor in Anderson – a finding that Pickens County officials have called ridiculous in the past. Officials say they fear the standards will prevent a new ramp being added on Highway 123.

“That's just one of many, many examples of air quality, water quality and other regulations that are crippling and dampening the (economic) return,” Duncan said.

Litigation uncertainty is also holding us back, Duncan said, using the National Labor Relations Board lawsuit against Boeing for moving a plant to South Carolina as an example.

“Luckily, we defeated that,” Duncan said.

All those uncertainties are keeping businesses from hiring, he said

“They have money on the balance sheet, they could invest, they could expand,” Duncan said. “They don't what the new employees are going to cost, they don't if they're going to get a NLRB notice in the mail, they don't know what the tax policy is going to be, they don't know what their utility rates are going to be because of the EPA, global warming, cap and trade schemes that are going to drive utility rates up in South Carolina. That uncertainty is keeping money on the sidelines.”