Allowing companies to bring home overseas earnings could create jobs, the author writes. | REUTERS Bring home foreign earnings

We knew that recovering from the worst economic crisis since the Great Depression would take time. But the past few months illustrate that now is not the time to get comfortable with the pace of the recovery.

Main Street is still hurting. Gas and food prices are soaring. Unemployment, while improving, is still too high. Standard & Poor’s recently adjusted its long-term credit outlook for the federal government. Middle-class families are struggling.


The economy is in better shape today than two years ago, and President Barack Obama and the previous Congress should be applauded for taking some bold but unpopular steps to avert a disaster. The President’s Commission on Fiscal Responsibility and Reform, on which I served, called for our leaders to tackle another looming problem — a growing deficit — and consider important spending and tax reforms. This crucial debate is continuing.

America, however, needs increased investment now: investment in infrastructure, innovation and jobs.

Clearly, in this environment — for political and practical reasons — further government investment (or stimulus) is unlikely. But that only increases the urgency to find other ways to kick-start our economy and create jobs.

One private-sector opportunity that could offer the quickest — maybe the only — viable short-term proposal for investment and growth is to allow U.S. companies to bring back up to $1 trillion earned overseas that is now sitting in foreign banks and to pay U.S. taxes on the earnings at a reduced corporate rate.

Repatriating this unprecedented amount would allow companies to spend the money at home. Just as important, it would provide the federal government with immediate revenue.

Though there are many honest debates about how much of a shot in the arm bringing back overseas earnings would give our economy, no one can seriously dispute that this is a better option than leaving the $1 trillion overseas in other countries.

It is estimated that a repatriation measure would move nearly $1 trillion from foreign banks back into the U.S. Companies could then invest their after-tax dollars in expanding operations, building infrastructure and creating jobs.

The federal government, with its share of substantial new tax revenue — an estimated $40 billion or more, depending on the rate — could invest in a range of options, from needed infrastructure (which I prefer) to debt reduction, or as, one chief executive officer recently proposed, a combination of the two.

This is a just a different kind of stimulus — one without a price tag for individual taxpayers.

Some say the companies should pay the full tax rate of 35 percent on any earnings they repatriate. In fact, the current law requires they do that.

But if that were a viable solution to getting the money to the U.S., there would not be $1 trillion trapped overseas.

Right now, the real-world choice for companies is to either pay no U.S. taxes by keeping and using the money overseas or pay a 35 percent tax rate to bring it home.

For those concerned about jobs: Make no mistake, jobs would be created. How many is a fair question. But many of the companies most eager to bring money back home are among the biggest employers in the country.

It is appropriate to help ensure this by supporting a legislative proposal being drafted that would penalize companies that repatriate funds and then shed jobs.

That’s why I support bringing as much of the $1 trillion home as quickly as possible. Let the debate begin about the appropriate tax rate, what protections are needed to ensure companies don’t take the money and reduce jobs and what we should do with the government’s $40-plus billion.

That is a more productive discussion than the ideologically charged debate about repatriation that has been going on for far too long.

While Washington debates, Americans wait and worry about their economic future.

The administration and Congress should recognize and work together on a long-term overhaul of the corporate tax code in ways that boost U.S. competitiveness and growth.

But in the short run, let’s agree that the question is not whether $1 trillion is needed in the U.S. and start discussing the details on how best to get the money home.

Andy Stern, former president of the Service Employees International Union, is currently a senior fellow at Georgetown University’s Public Policy Institute.

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