LAURINBURG — Sounding familiar themes, U.S. Sen. Richard Burr told local businessmen and elected officials from Scotland County on Thursday that the nation’s economic growth will remain sluggish until Congress cuts corporate tax rates and limits yearly growth of the federal budget to 1 percent.
Burr spoke at the Economic Development Corporation after touring the new FCC North America plant next door. The plant, owned primarily by Japanese investors, is expected to start production by October on precision parts for automotive transmissions.
While most of his talk centered on the economy, he also said legislation to fully vest the Lumbee Tribe of North Carolina with the same full federal recognition and benefits other tribes receive appears stalled.
Senate Majority Leader Harry Reid “won’t allow it to come up,” he said, adding that the approach may differ when “control changes” in the Senate, where Democrats are in the majority.
“I don’t know why people are fighting this so hard,’’ he said, adding that it is partly due to lobbying efforts by other tribal organizations who could see reduced funding if the Lumbee tribe is granted the same financial benefits.
“The pot doesn’t get any bigger and that’s the predicament they’re caught in,’’ Burr said. The Lumbee Tribe, he said, has “the most legitimate case for federal recognition I’ve ever seen.”
On the economy, Burr reiterated the themes of corporate tax cuts and less regulatory red tape. Taking those steps, said the Republican from Winston Salem, would put the United States “close to being the 400-pound gorilla for the next 50 years’’ in the global economy.
“If you held a gun to my head and said give you a plan for balancing the federal budget, I’d tell you we have to do three things,’’ said Burr, the state’s senior senator in Congress. “Cut the corporate tax rate, grow the federal economy at 4-and-a-half percent-plus for 10 years and cut federal spending so there’s only a 1 percent annual increase.
“If Congress would do those three things, we’d be on a glide path to getting an annual balanced federal budget in 30 years. That’s as good as I can promise you.’’
The U.S. has the highest nominal top corporate tax rate in any of the world’s developed economies, up to 35 percent. But the average corporate tax dipped to 12.1 percent in 2011, its lowest level since before World War I, due in large part to the Great Recession and a bonus depreciation tax break.
Burr supports a 25 percent cap on the corporate income tax rate and less regulatory restrictions on private businesses.
The latter prompted Scotland Memorial Hospital CEO Greg Wood to speak up.
“Senator, thanks to a lot of the leaders in this room, we continue to operate a successful and progressive community-owned hospital,’’ he said.
But Wood spoke of “regulatory constraints” that increase the hospital’s operating costs.
“The burden put upon us … cost us $3 million last year,’’ he said. “Our bottom line was $600,000 and we spent $300,000 back to the government… . We need your continued support to reduce those regulatory burdens that are preventing us from doing what we need to do. … These regulations are really getting in our way.’’
Burr said the Affordable Care Act, or Obamacare, is underfunded by 40 percent, adding that it has imposed a 3.5 percent tax to every health insurance premium and a 1.5 percent tax on every medical device. He blamed Wood’s woes on Obamacare, adding that he feared cuts to reimbursements to doctors and healthcare facilities would lead to a “provider shortage.”
Despite dramatic stock market gains in recent months, Burr said the most recent economic projections he has seen predict little to flat growth in the coming quarters.
“There’s plenty of capital sitting on the sidelines and they’re out there looking for opportunity,” he said. “We need to cut the corporate tax rate and give them some incentive… .’’
J.L. Pate can be reached at 910-506-3171.