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Time to Work Overtime on the Economy, Not Mandates

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It’s getting difficult to know what to think when President Obama says he wants to create jobs and then repeatedly throws up barriers to job creation.

The Affordable Care Act — Obamacare — is going to make employee benefit costs skyrocket when its requirement for mandatory health coverage for most full-time workers takes effect next year. The Congressional Budget Office says his proposed increase in the federal minimum wage would put half a million people out of work. And now he wants to give overtime to many white collar managers and professionals as if they were blue collar employees who work by the hour. Where does it stop?

The White House hasn’t given us enough details to know exactly what the overtime proposal would do. But we do know overtime rules underwent a comprehensive overhaul only 10 years ago, and that the reevaluation of workforces and job classifications by employers in every sector of the economy was a massive undertaking that consumed considerable resources.

At the time, there was a need for an overtime update. Wage levels that allow exemption from overtime had not been updated in 30 years and job descriptions for managers and professionals dated from the 1950s. Trial lawyers had seized on the lack of clarity, and overtime lawsuits had tripled.

At this point, however, overtime is a matter of settled law. Millions of workers are happy because they are receiving overtime and businesses are happy because they are avoiding lawsuits. To force businesses to go through another overhaul this soon would create administrative burdens that would distract from efforts to create jobs during our nation’s still-struggling economic recovery.

The President has a very laudable goal in trying to close the gap between America’s wealthiest individuals and its poorest. And despite the contradiction between his words and policies, we believe he is serious about trying to create jobs. But instead of initiatives that artificially drive up payroll costs and make it harder to hire, we need policies that promote true economic growth. If the economy grows, jobs will grow with it.

One example of pro-growth policy is the comprehensive tax reform legislation proposed by House Ways and Means Committee Chairman Dave Camp. Under his plan, many tax breaks that benefit only a few industries would be eliminated in return for lower tax rates for all businesses — and for individuals as well. According to the Congressional Joint Committee on Taxation, the Camp bill would boost GDP by $3.4 trillion over 10 years, create 1.8 million jobs and raise take-home pay for a family of four by $1,300 a year. Which makes the most sense in today’s economy? Policies that result in job losses, or those that result in job gains?

Washington needs to stop working overtime on mandates — and start working overtime on putting people back to work.