James Sensenbrenner, February 17, 2006

The past few years have seen the confluence of a number of events that could have combined to tank our economy, including terrorism, hurricanes, rising energy prices, and skyrocketing health care costs. These stories have dominated the news cycles, causing many to be pessimistic about the state of our country. Yet, when we get past the headlines and look at the facts, another picture emerges. Despite all of these factors, our economy has gone boom, not bust.

The evidence is abundant. January’s economic data show startlingly good news for our economy. In 2005, construction spending reached an all-time high of $1.12 trillion, an increase of nearly 9% over the previous record set a year earlier. More Americans now own their homes than at any time in the nation’s history, and minority ownership is at a record high. Most important, the initial numbers suggest 317,000 more people were employed in January than in December, following gains of 2 million jobs both in 2004 and 2005. In Wisconsin, the most recent figures available show that our unemployment rate of 4.7% is even lower than the national average, which continues to fall.

Since Ronald Reagan was president, the common refrain of those attempting to downplay the importance of job growth has been to exclaim that there may be more jobs, but they are all of the burger-flipping variety. The evidence is clear, however, that wages are rising at the same time unemployment is dropping. In fact, according to the Bureau of Labor Statistics, average weekly earnings are up 3.6 percent.

Undoubtedly, there are a number of factors that have contributed to this growth. America’s hardworking and entrepreneurial people, increased defense spending, and increased productivity all played a large role. Just as certain is the vital contribution that the tax relief President Bush ushered in at the beginning of his presidency has had on the sustained growth of the past three years.

Economists are trumpeting the capital gains, dividends, and income tax relief that the President fought for, and that have proven to be driving forces in our economy. I was proud to support this tax relief when it passed Congress, and strongly support efforts to make them permanent.

Risking our economic growth, many tax hikers in Washington want to allow this tax relief to expire. Among the relief at risk are capital gains and dividend tax cuts that will expire in 2008, and marriage penalty, child tax credit, and income tax rate relief provisions scheduled to expire in 2010 if Congress does not act.

To protect our economic progress and stability, these provisions need to be made permanent as soon as possible, because a strong economy is the best way to be prepared for tragedies like those we have faced in recent years.

Congressman James Sensenbrenner, a Republican, represents the Fifth Congressional District of Wisconsin. He serves as chairman of the House Committee on the Judiciary. The Fifth District of Wisconsin forms an arc surrounding Milwaukee to the North and West, and includes parts of Jefferson, Milwaukee and Waukesha counties, and all of Ozaukee and Washington counties.