W HAT IS HOLDING OUR ECONOMY BACK ? H OW CAN WE GET BACK ON TRACK ? 1

T HE S TATE OF THE U.S. E CONOMY Jobs Crisis – Wisconsin unemployment rate: 7.8% – National unemployment rate: 9.1% – U6 unemployment rate: 16.5% Over 6 million Americans have been out of work for over 6 months Stagnant economic growth & rising poverty – GDP growth sluggish: 1.3% (Q2 2011, annual rate) – Poverty rate up to 15.1% in

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W ASHINGTON M AKING M ATTERS W ORSE 5

W ASHINGTON ’ S S PENDING S PREE February 2009: $862 billion ‘stimulus’ Since January 2009: – 23% increase in government bureaucracy budgets – 84% increase when you add stimulus President’s budget calls for $46 trillion of government spending over the next decade 6

D ISAPPOINTING R ESULTS OF S TIMULUS S PENDING P ERCENT P REDICTION W ITH S TIMULUS P REDICTION W ITHOUT S TIMULUS A CTUAL

T AX U NCERTAINTY In 2013, across-the-board hikes on the horizon 44.8% top federal effective tax rate for small businesses – With proposed surtax: over 50% – With state & local taxes: nearly 60% 8

W ISCONSIN IS A S MALL B USINESS S TATE H OW W ISCONSIN E MPLOYERS P AY T HEIR T AXES 9 S OURCE : E RNST & Y OUNG LLP

R EGULATORY U NCERTAINTY Total cost of federal regulations: $1.75 trillion 3,573 new regulations in 2010 – 4,257 new regulations in the works – 219 planned regulations estimated to adversely impact the economy by over $100 million 10

U NCERTAINTY FROM H EALTH C ARE L AW 159 new boards, bureaucracies & programs 1,472 waivers from law’s requirements $2.4 trillion of new spending 11

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A B ETTER P ATH F ORWARD : T HE P ATH TO P ROSPERITY 13

T HE P ATH TO P ROSPERITY H OUSE -P ASSED B UDGET & P RO -G ROWTH R EFORMS Spending Restraints and Reforms Pro-Growth Tax Reform: Fair, Simple, Competitive Predictable, Reasonable Regulatory Environment Patient-Centered Health Care Reform An American Energy Policy Strengthened Social Safety Net budget.house.gov 14

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A DDITIONAL S LIDES 16

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% T OP I NCOME T AX B RACKET T OTAL T AX R EVENUE AS P ERCENT OF GDP I NCOME T AX R EVENUE AS P ERCENT OF GDP T AX R EVENUES D O N OT C ORRELATE W ELL WITH T AX R ATES F ISCAL Y EAR S OURCE : H ERITAGE F OUNDATION

T AX R EVENUES ARE H IGHLY C ORRELATED W ITH GDP R EAL 2006 GDP ($B ILLIONS ) R EAL 2006 T AX R EVENUES ($B ILLIONS ) $3,500 $7,000 $10,500 $14,000 $500 $1,000 $1,500 $2,000 $2,500 R EAL T AX R EVENUE R EAL GDP S OURCE : H ERITAGE F OUNDATION

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W E A RE I N A S PENDING -D RIVEN D EBT C RISIS H ISTORIC /P ROJECTED S PENDING & R EVENUE A S A P ERCENTAGE O F T HE E CONOMY S OURCE : O FFICE OF M ANAGEMENT AND B UDGET H ISTORIC T ABLES, C ONGRESSIONAL B UDGET O FFICE ; PROJECTIONS BASED ON THE CBO’ S A LTERNATIVE F ISCAL S CENARIO.

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W HAT D RIVES O UR D EBT (G OVERNMENT S PENDING AS S HARE OF E CONOMY ) 27 S OCIAL S ECURITY M EDICAID & O THER H EALTH M EDICARE

W HO O WNS O UR D EBT (D EBT H ELD BY P UBLIC, )

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