For the United States to truly recover from the Great Recession, the federal government and its state counterparts need to be creative with tax reform and budget proposals to jumpstart the economy.
That was the view of U.S. Senator Dianne Feinstein, D-Calif., who spoke at a luncheon hosted by the Santa Barbara Region Chamber of Commerce on May 30. “The important thing is that in times of toil and trouble, the government needs to come up with constructive solutions,” Feinstein said at the luncheon, which was held at the Canary Hotel in downtown Santa Barbara. “And you have great problem solvers right here in your region, with Congresswoman Lois Capps, the Board of Supervisors and the City Council.”
Janet Garufis, president of Montecito Bank & Trust and the chamber’s chairwoman, agreed with Feinstein’s assessment. She said it’s time for businesses in the region, especially startups, to showcase their innovation and creativity. “I think we’re all starting to see the light at the end of the tunnel here,” she said at the luncheon.
Feinstein, who delivered a so-called Washington report on the economy, national debt, nuclear waste and immigration, said one major way the federal government can help businesses is by providing tax incentives for them to manufacture inside the U.S. The senator is taking the lead on a bill, known as the Patent Box, that would reduce the tax rate from 35 percent to 15 percent for businesses that manufacture their patented products inside the country rather than going offshore.
The bill would benefit the Tri-Counties, Feinstein said, because the region is a hotbed for the kinds of high-tech and manufacturing companies the bill is targeting.
She also said that in order for the economy to dig out of its $11 trillion in national debt and move toward a recovery, politicians need to move away from partisan gridlock and figure how to fund programs that support businesses.
“The Republicans don’t want to raise taxes and the Democrats don’t want any cuts to entitlements [including Medicare and Social Security]. But we have to do both. We need solutions,” Feinstein said.
She offered up the Troubled Asset Relief Program, the federal government’s 2008 bailout program for banks, as one creative and successful initiative. During the last quarter of the Bush administration, Feinstein said she was on a conference call with 40 other senators and Fed Chairman Ben Bernanke, who told the group the U.S. was in danger of facing an economic collapse bigger than the Great Depression. “Then we passed TARP,” Feinstein said. “People hated it, but it’s all being paid back and I believe the government will make money on it.”
Feinstein said she’s focused on facilitating job growth in California, especially in the agricultural and manufacturing arenas. In Santa Barbara, which has more nonprofits per capita than any other region in the state, plus a university with a record number of Nobel Prize laureates, Feinstein said the chances for recovery are good.