A GOP Congress Could Solve 2 of the Biggest Challenges Facing American Business
Many pundits believe that if Republicans win both the Senate and House in the midterm elections, the country will face two years of partisan bickering, deadlock and finger-pointing. It’s probably true. But there would be a silver lining. The 118th US Congress, which will be sworn in in January, could solve the two most important challenges facing businesses today: inflation and labor shortages.
Most agree that the higher prices today are the result of two factors: pandemic-related inventory shortages caused by supply chain bottlenecks and government overspending, which has caused a explosion of over $5 trillion in our money supply and flooded the financial markets. with too many dollars chasing too little demand. The good news is that both of these issues are already being resolved.
A global recession has helped reduce pressure on factories – especially overseas – and most are catching up with demand. Already, the ports of Long Beach are reporting a decreased activity, whereas just over a year ago the backlog was huge. Recessions aren’t great, but this one allows many suppliers to catch up.
On the fiscal side, the Federal Reserve is taking aggressive action, through interest rate increases and bond buybacks, to bring the current excess money supply in the economy under control. A Republican-controlled Congress is guaranteed to support the Fed in pursuing this strategy for the foreseeable future.
Over the past two years, the Build Back Better and Inflation Reduction Act spending bills have compounded our money supply problems. With a Republican Congress, new spending bills are very unlikely to get approval, other than the normal pork and higher defense allocations that will be proposed in the next budget cycle.
It will take longer, but all of these factors would ultimately serve to lower inflation and reduce price volatility for businesses. It’s good news. But what about work? How would a Republican-led Congress solve this thorny problem when there is historically low unemployment and over 10 million unfilled jobs? The solution to this problem is immigration reform. And my bet is that a Republican Congress will deliver that with enough Democratic support to win a presidential signature.
Do not laugh. Immigration is high on the legislative agendas of both parties. There are important differences between the two camps. Generally, Republicans’ priority is to aggressively crack down on the border to stop illegal immigration, and Democrats prefer to find a way to give those who entered the United States illegally some form of legal status. But both parties know that this is an urgent economic and social problem that must be tackled. And there’s a lot of common ground here.
The White House is is already preparing ready for an immigration surge shortly after midterms and, while I don’t see that happening until the new Congress takes control, many Democrats, like the Senate Majority Whip Dick Durbin (D-Ill.), also want to shake things up.
“The right thing to do is what we did nine years ago – a bipartisan approach to fixing the immigration system,” Durbin said. said on the floor of the Senate last month. “Instead of exploiting it for political purposes, let’s fix it. We did it. We have passed laws on a bipartisan basis, even in this equally divided Senate… I am ready to do that, and the Senate Judiciary Committee would begin as soon as we have Republicans of goodwill willing to sit with Democrats and work together . But continuing to exploit these people and the children of these families is simply unacceptable. »
Many experts, including Laura Reiff, president of the Coalition for Essential Worker Immigration, are not so optimistic. She says Politico that she “doesn’t think we’ll see comprehensive reform again” if something doesn’t happen during the lame session after the midterms.
I do not agree. Of course, there will have to be compromises. But what it really takes to pass a major immigration reform bill that will contribute to our country’s labor shortage is a realization that, frankly, no solution will be fair.
Any immigration bill that grants legal status to illegal immigrants would be grossly unfair to the people who followed the rules and worked so hard to obtain legal residency in the United States. But was it fair to forgive college loans when so many people have paid theirs in full? Or is it fair that oil and gas industries are penalized while competing industries are given favorable treatment? Is it fair that some states allow abortion and others don’t? Or that suburban public schools receive more funding than urban schools? Life is unfair.
Giving legal status to illegal immigrants will create problems, and especially additional costs for our government and other social systems. But it will also provide millions of capable (and desperately needed) workers for our economy who will not only pay taxes, but also help companies better control their costs and produce their products and services more efficiently and quickly.
Republicans have an opportunity to fix both inflation and immigration, which would solve the two biggest problems facing businesses today. Will they step up?
Gene Marks is the founder of The Marks Group, a small business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.