COLUMBIA — At 9th Congressional District campaign events Monday in Boone County, State Rep. Judy Baker, D-Columbia, unveiled a job creation plan, and Republican candidate Blaine Luetkemeyer pressed for domestic drilling to help reverse inflation.
Baker's "Made in America" plan would set up tax incentives for companies to bring jobs into the United States and eliminate certain benefits for those that don't. Baker said she hopes her plan can create 1 million manufacturing jobs at a living wage, which she defines as $14 to $18 per hour, somewhere between the local and national averages for manufacturing jobs.
Baker's plan would establish a $1,500 tax credit for each new employee at businesses creating jobs in manufacturing, a sector that has lost 13,000 jobs in Missouri this year, according to Federal Bureau of Labor statistics.
"It is a domino effect: When we lose large businesses, businesses like (Centralia's B&K Manufacturing) lose out as well," Baker said during a campaign stop in Centralia. "It's just really amazing that when the crisis hits Wall Street, all of a sudden it's a crisis, but, you know, it hit the 9th District years ago with rising unemployment, lower salaries and higher poverty."
The plan also would make permanent a research and development tax credit that has expired 13 times since it was first established in 1981. The tax credit would cost about $7 billion a year.
The current version of the tax credit was recently renewed through 2009 after passing 93-2 in the Senate.
Baker said research funding must be contingent on job creation.
"America will not be the laboratory of innovation for the rest of the world unless we receive some benefit as well," Baker said. "Companies that want our investment will have to agree to keep at least 50 percent of their manufacturing jobs here in America."
Luetkemeyer, though not responding directly to Baker's plan, said the focus should be on making American products more competitive.
"Right now the value of our dollar is such that it makes our products pretty cheap overseas," he said. "So from the standpoint of agricultural products, we need to find a better way to market our hogs and cattle to find some new and expand some existing markets over there.”
Luetkemeyer said promising to eliminate tax breaks for companies that outsource jobs is "very difficult to do."
"Depending on the product, you may need to do that in order to compete with that product on an international basis," he said. "I'm not for shipping jobs overseas, but how do you protect those jobs here? You have to protect those jobs here by providing incentives for those jobs to be retained here."
Baker also promised reforms to a tax code that she said pays for the outsourcing of factory jobs by allowing businesses to write off moving expenses.
"I'm talking against American taxpayers subsidizing the outsourcing," she said. "If a company needs to outsource for whatever reason, that's a market decision, but the fact that American taxpayers would actually subsidize that is beyond conscience."
Baker said the tax credit, which would cost $1.5 billion if it achieved its million-job benchmark, would be funded by a crackdown on transfer pricing schemes that the Internal Revenue Service estimates cost the U.S. between $10 billion and $55 billion per year.
Transfer pricing abuses occur when companies artificially inflate the price of goods sold within the organizations before importing them to the U.S. The companies then sell those goods at a loss and write them off on their U.S. taxes.
At a candidate forum in Hallsville, Luetkemeyer said supporting domestic drilling is the first step to righting the economy.
"The major problem we see right now with the inflationary trend in our economy is due to the high prices of oil, although they've come down recently," Luetkemeyer said.
"If we have the national will and national policy to drill, it takes the speculative part of this market out of play and gets it back down to where the actual supply-and-demand factors kick in."
He said he supports drilling offshore and in the Arctic National Wildlife Refuge in Alaska.
"We're the only country in the world that treats our natural resources as an environmental hazard," he said. "I think it's nonsense. We can do this environmentally friendly, and do it in a way that can develop these resources for ourselves."
At the same event, Baker said she supports an energy policy that includes drilling but that emphasized creating jobs in renewable energies.
Luetkemeyer also spoke at an event organized by Women United for Luetkemeyer, a group headed by State Rep. Danie Moore to highlight Luetkemeyer's support of women's issues.
"I understand their issues," he said. "I understand things like improving the economy, fighting breast cancer, working for real health-care reform and supporting women-owned businesses that are important to the continued improvement of not only our economy but the ladies' participation in our economy."