Dan Meuser's Testimony to the House Republican Policy Committee

I was fortunate enough to get a copy of Mr. Meuser's testimony and his permission to guest post it. Thank you, Dan.

Good afternoon. I do want to thank the House Republican Policy Committee and special thanks to Representative Karen Boback for inviting me to today’s forum.

My name is Dan Meuser. I am the former President of Pride USA. Pride Mobility Products is the worldwide leading designer and manufacturer of mobility products and rehab devices and employs over 1,000 in Northeast Pennsylvania and 1,400 worldwide. I am currently a Board member of Pride Mobility, a business person investing in the economic advancement of Northeast PA (NEPA), and actively involved in the local Chamber of Commerce and many community organizations. I am also a Board member of Misericordia University and I want to thank Misericordia as well for hosting this forum.

My testimony today is on the economic climate here in NEPA, as well as the impact President Obama’s stimulus plan has on NEPA businesses and our economy as a whole.

We are at a new dawn of NEPA’s economic future. NEPA has the essential resources available for maximizing business opportunity for the long term. These include geographical proximity to 70% of the nation’s marketplace, well educated employment pool, strong system of higher education, considerably lower operating costs than neighboring regions, favorable real estate opportunities, productive farmland and quality of life.

There are new businesses entering our region regularly, as well as many existing companies that are built to last and will weather the current economic challenges. Nevertheless, in spite of NEPA’s natural and manifested resources, our region’s young people, students, families, small businesses, farmers and communities are suffering the effects of the current recession.

President Obama’s plan, portrayed as a plan to stimulate the economy by creating jobs, providing relief to working families and getting the economy moving forward, loses focus of its objective as an “economic stimulus”. It is more of a mix of minor tax cuts with significant funding to state and federal agencies, earmarks and long term expansions of discretionary spending.

The positives and negatives of these programs we will leave to be debated in other forums. My testimony is focused on the plan’s effect on job creation and economic advancement for NEPA.

Of the $787 billion in spending, only $26 billion will be spent this year, with $110 billion to be spent next year. The minimal funding trickling down to NEPA will take a very long while to work its way into our economy. There is only 3% of the $787 billion to be invested in transportation, highways and roads. Less than 2% of the package is dedicated to energy programs, half to be invested this year. (These figures are provided by the Congressional Budget Office (CBO) and, regardless of any economist opinion, the CBO’s numbers are the only numbers that count.)

The CBO also asserts that the majority of the spending, about $400 billion, is being directed to 150 different federal agencies for their discretionary spending, including agency augmentation and the enhancing of existing social programs.

Such spending has little effect on long term job creation or economic stimulus in NEPA. The package does actually contain job creation and economic inhibitors for NEPA. These include the “Cap & Trade” provision (a tax increase on carbon fuels which will increase costs on all businesses and consumers) as well as a removal of the tax exemption for domestic investment in gas and oil exploration.

The Marcellus Shale has enormous job creation and economic stimulus opportunities for NEPA. Realistic estimates are that over 5,000 jobs can be created over the next 5 years as well as an infusion of over
$1 billion dollars in NEPA’s economy alone; with the potential of over 12,000 jobs and $7 billion of revenue created statewide.

The provisions of “Cap & Trade”, the rescinding of the domestic drilling investment tax credit, as well as our state Governor’s call for a 4.5% severance tax, will either mitigate, delay by years or destroy indefinitely the economic gains the Marcellus will create.

As mentioned, NEPA is the ideal distribution point for industry, having access to 70% of the nation’s buying power within an eight-hour drive. Nevertheless, there is little in the $787 billion dollar package that will improve NEPA’s distribution or transportation strength. Not one dime is allocated for investing in the expansion of I-81 or for the development of the Susquehanna Valley Thruway in Central PA. Such an investment would deliver huge returns and truly be a game changer for a multi-county region from Northumberland County and Snyder County through Union, Montour, Lycoming, Sullivan, Bradford and Tioga. Yes there are pavement and superficial /”shovel ready” projects to be funded, but nothing which will advance NEPA or Central PA and deliver an economic return on the infrastructure investment.

Small businesses in NEPA employ about 60% of our working population, yet President Obama and the Congress’ plan only extend approximately .05% of the $787 billion to small business stimulus. Meanwhile, businesses nationwide with less than 50 employees lost 175,000 workers last month and companies employing 500 or less lost 430,000 jobs in March alone.

What President Obama and Congress did dedicate to small businesses included a possible tax savings for those companies who qualify, some enhanced depreciation opportunities and marginally improved access to business loans. However, the tax benefit can only be realized by companies who have been in business 5 years and profitable in the right timeframes as defined by the plan, and the depreciation of capital investment will be just for those who made large capital investments in 2008 (over $137,000). The loan enhancement programs for small business amount to $615 million dollars. This is $615 million in loans, not a bailout, and that is million with an “M”, for the entire nation’s small businesses.

Small business owners know best what they need in these extremely difficult times. They need tax relief, in the form of a payroll tax holiday, capital gains reduction and immediate access to low interest loans. These would create an immediate catalyst for small business, would be less costly than other programs and would deliver a “Return on Investment” as well as put the responsibility for loan payback on the businesses receiving the loans, not the American taxpayer. A recent survey conducted by the National Federation of Independent Business of small businesses, showed that 1 in 4 small businesses say they do not expect to survive the current recession. Again, with 60% of employment existing in local small businesses, this is an obvious economic concern and sector where focus should be significant, not at a .05% level.

Other crucial issues for Northeast & Central PA include the plight of our dairy farmers who are dangerously challenged by the unpredictability of milk prices. And it must be emphasized that the cost of healthcare for families and businesses is putting serious strains on both families and businesses and requires immediate attention. Family healthcare costs are both a cause and symptom of current economic conditions. Healthcare can be made more affordable, and it must be a priority of government public policy.

In conclusion, government economic policy can only help or hinder economic advancement; it cannot and should not try to create it.

Economic policy should conceptually be from the “ground-up“ and focus on allowing for a competitive business environment, with all appropriate quality standards in place. Such advocacy would ameliorate job growth and help working families, small business and community development. Such policy would also create more jobs, more taxpayers and result in increased tax revenues.

Thank you, and with the continued hard work and leadership of Pennsylvania’s House and Senate Republicans, we will move Northeast Pennsylvania and our Commonwealth forward.