- Gov.
Chris
Christie « Speech on the Economy and Creating
Jobs
"A Five-Point Plan for Four Percent Growth"
Gov. Chris Christie (R-NJ)
University of New Hampshire at Manchester
Manchester, New Hampshire
May 12, 2015
[Remarks
as
Prepared
for
Delivery]
I have returned to New Hampshire today to talk to you about the most important issue facing the country today: fixing the economy and creating jobs.
The fundamental question vexing all of us is, why has the income of
middle-class Americans not grown for 15 years?
It is critical to understand that until we answer that question and fix
that problem, the anxiety and unhappiness that weigh on middle-class
America will not be resolved. We will continue to see mistrust
between
the people and their government. We will continue to see America
weakened in the world. We will continue to see middle-class
Americans
fearful of the future.
Americans have always lived looking forward to tomorrow because they
believed in their hearts that tomorrow would be better than
today.
That belief still lives in our hearts, but it has been diminished in
these last six years, in no small part because the national government
has failed in just about every way – bad, big-government policies that
have hurt job growth and middle-class incomes, horrific execution on
existing laws that many people perceive as unfair, and no ability or
desire to work together.
So I have come to Manchester today to present to you a different
path.
In my view, the key to boosting the income of the middle class, to
increasing economic mobility for every American, to making sure that
tomorrow is better than today, is to increase the rate of economic
growth. So today, I would like to describe a Five-Point Plan to
take
America to four percent growth.
First, some perspective.
2015 reminds me of 1979. Back then, I was 17 and an optimistic
teenager who was raised to believe that nothing was impossible for our
country. But I was watching gas lines, double-digit inflation and
interest rates, the soviets in Afghanistan, hostages in Iran, and a
president who ran on a single idea – “trust me” – and who was now
telling us that the problems we had were too tough to handle.
That my
optimism was misplaced, or, at least, naïve and unrealistic.
That our country was bound to be less powerful and influential, both at home and abroad. That we should accept less as a fact of our new life in America, and that he would be the best steward of our diminished status and the best allocator of our diminished resources.
Today, we have a stagnant economy after a brutal recession;
unimaginably high national debt that is still growing; an entitlement
state that is out of control and will compromise our future; the heavy
hand of government regulation in every corner of our lives, and, again,
a president who ran on a single idea “hope and change”, and who now
tells us that our lives are really better than they feel to us and
that, if they’re not, it’s not his fault, but the fault of a
Washington, DC culture that he has only made even worse.
We must put an end to this toxic mix of pessimism and arrogance – this
belief that government can exert greater control over our lives but
then refuse to accept responsibility for the failure that control has
wrought; this fantasy that the last six years have been a great success
when wages are flat, full-time employment for the middle class is
shrinking, and wealth is at all-time highs only for the
privileged.
The president is asking the American people, “Do you believe me or your
lyin’ eyes”?
Less than two weeks ago, the commerce department came out with its
report on GDP growth for the first quarter of this year:
0.2%. The
economy has once again virtually ground to a halt.
This Obama economy has plagued America for the last five years.
Growth
eeking along at barely above 2 percent – 2.4 last year, 2.2 in 2013,
2.3 in 2012, 1.6 percent in 2011.
The fact is that the economic recovery presided over by this
Administration is the weakest in post-war American history. And
who
pays the price? Not the White House. Not the
Congress. Not the
wealthy. But hard-working, middle-class Americans, and those
Americans
who would like to work hard but can’t find full-time work.
According to the joint economic committee of the U.S. Congress, if
growth had merely averaged the pace in other recoveries of the last
fifty years, we would have an additional 5.5 million private sector
jobs in the United States today.
But it hasn’t. In this weak recovery, America is not performing
up to
its potential. That is why we need a specific plan to bring us
back to
four percent growth.
This weak growth is no coincidence. It is the direct result
of the
policies of this president, the worst economic president since Jimmy
Carter.
The current administration in Washington has pursued anti-growth
policies: tax increases, over-regulation, hostility to business,
policies that discourage work.
From its inception, this Administration has been more focused on
redistribution of wealth than on creating more wealth for middle-class
citizens.
In fact, I think it fair to say that this president is the most
anti-growth president in post-war American history.
I am here today because the next president of the United States must
have a specific plan to restore growth to America’s middle class.
It is ironic that the president has labeled the latest version of his
high-tax, heavy-regulation, slow-growth policies as “middle class
economics”. Because it is precisely the middle class that
has been
hurt, more than any other group, by the president’s policies.
First, this weak recovery has pushed full-time workers into part-time
work. It is true that overall employment is higher today than it
was
at the pre-recession peak in 2007. But if you look under the
covers,
you see something more troubling. According to the Bureau of
Labor
Statistics, the number of full-time employees is still 3.2 million
below the peak in the third quarter of 2007. The number of
part-time
workers is higher than it was in that same quarter by over 4
million.
So we have had a huge shift under this president from full-time to
part-time work.
Too often, one part-time job is not enough to pay the bills. So
the
number of part-timers forced to juggle multiple part-time positions has
climbed by 11%, reaching a 20-year high.
Second, the labor participation rate has remained unacceptably low
throughout this administration. In fact, it is at 62.7% – the
lowest
since the Jimmy Carter 1970’s.
But it is not true, as some assert, that low labor participation is all
due to demographics. In fact, the biggest drop in labor force
participation in percentage terms has been among the youngest members
of the work force.
It is a sad state of affairs when the economy is so weak that young
people in America raise the white flag and give up on working in
America. And it is dangerous for their future and ours, because
getting a slow start working will hurt their careers, and earnings, for
years to come.
The fact is that many people in our society are discouraged about
looking for a job because of a lack of opportunities.
And a more telling number, measured by Gallup in its “Payroll to
Population” survey, is this: the percentage of the American
population
working full-time for an employer is 44.1%. That’s right,
less than
half of Americans today are working full-time. The Chairman and
CEO of
Gallup, in an unguarded moment, called that 44% rate “staggeringly
low”. This much is certain: it is not the sign of the
healthy
recovery the president is trying to sell to America.
Finally, of course, the weak economy combined with a set of monetary
policies in these last six years geared for the wealthy have
exacerbated the very problem the left loves to harp on – that of income
inequality.
The reality is that, in the stronger, higher growth economy we enjoyed
in the 1980s and 1990s, incomes grew for most Americans. When
real
growth was slower and inflation was higher, such as in the late 1970s,
income inequality grew more.
In the last six years, during this administration, we have had two
overwhelming, policy-driven factors, which have again made income
inequality worse – materially worse. The “easy money” policies of
the
Federal Reserve have helped the value of financial assets grow
substantially. So those who own such assets, including stocks,
are
doing fine.
With jobs hard to find, with wages stagnant, and with weak GDP growth,
those in the middle cannot enjoy higher incomes. For the first
time in
our history, median income has actually declined during a
post-recession recovery.
So, under this president, we have a roaring financial economy for the
wealthy and a weak real economy for the middle class. He has
worsened
income inequality through his policies.
Bottom line: the Fed’s easy money policies and the president’s
anti-growth policies have made the rich even richer and made our middle
class work longer and harder for less pay and less promise for the
future.
Equally troubling is this: the longer the United States kills
real
growth, the more our competitiveness in the world economy
declines. So
the administration is not only hurting jobseekers today, it is
compromising future generations as well.
It is time to send a signal – both to the American people and to the
world – that America is returning to its pro-growth roots and its
pro-growth policies.
It is time to tell investors that America is again open for business.
The American people can again build an economy that will be a growth
leader and not a growth laggard. Let’s discuss exactly how that can
happen.
Today, I want to propose a “Five-Point Plan for Four Percent Growth”.
We must target the tax code, because today it is targeting us –
discouraging individuals, hampering new businesses, and sending job
creators offshore.
Our tax code is bloated; over 70,000 pages and four million words of
rules and regulations, quirks and quacks that aren’t good for anybody –
with the possible exception of tax preparers – and an IRS that is out
of control, and apparently unaccountable.
By the IRS’s own estimates, Americans spend 3.24 billion hours of their
time complying with the code.
We have a system that discourages every American on April 15th and
discourages growth all year long.
Here in New Hampshire, even with zero state income taxes, Tax Freedom
Day does not come until April 19th. So for the first 109 days of
the
year, you are working for Uncle Sam.
That’s one key difference between the parties. Republicans would
like
Tax Freedom Day to come before spring training. The Democrats are
trying to time it with the World Series.
So I propose that we need comprehensive tax reform now. And here
are
my principles: it must lower income tax rates for all
Americans. It
must improve America’s competitiveness in the world. And, perhaps
most
of all, it must make doing your taxes easier!
We must create a flatter, fairer, simpler tax code.
The outlines have been proposed by multiple leaders in both
parties.
But what has been lacking is political leadership from the top to get
it done.
I believe that the new president should push for comprehensive tax
reform with Congress on day one. The tax reform I propose will
not be
a Trojan horse for a net tax increase on the American people – it will
be a net tax reduction, or in the worst case deficit neutral. It is
well overdue for the citizens to get reform that reduces, not
increases, taxes.
Here’s what I would propose for comprehensive tax reform:
First, on the personal income tax side:
The code should be no more than three individual income tax rates,
instead of the current six.
Reform should include lower tax rates for every American. The top
rate
should be no higher than the 28% set in the last major successful tax
reform effort in this country – the Bradley-Gephardt-Reagan law signed
in 1986. And the bottom rate should be single digit.
The code should reward and not create disincentives to work.
I would eliminate or modify enough deductions, credits, and targeted
provisions in the code – both on the personal and the corporate side –
to ensure that the plan combined with other measures I am proposing is
revenue neutral and does not materially increase the deficit. One
approach in this regard is to cap the total amount of deductions and
credits that an individual or married couple could take.
We should seek to keep in place the deduction for charitable
contributions and that for interest on home mortgages – at least for a
first home.
And we should make it so that for the majority of Americans, it should
take 15 minutes to do your taxes -- not days, weeks, or months.
That’s it: a simple outline for a tax code that is flatter,
fairer, simpler and more pro-growth.
A second major need from any tax reform proposal is to encourage
capital formation. If you look at that first quarter GDP report
that I
mentioned a moment ago, you will see that fixed investment is
weak. In
fact, that has been a signature feature of this recovery – weak
business investment.
Today, we have policies that chase financial capital away from our
shores and new capital equipment away from our factories.
And when businesses do not invest, productivity lags and wages go
nowhere. Just a few days ago the Obama labor department reported that
in the first quarter of this year productivity actually dropped at a
1.9% annual rate.
Companies are not making capital investments in the United States in
part because they are concerned about the anti-growth direction of
Washington.
To spur those capital investments that create opportunity and jobs, we
should permit the full expensing of corporate investments in capital
equipment. This would encourage this type of very important
investment
and spur the type of growth that will create middle class jobs.
It is
urgent that we send a clear, pro-growth signal to companies.
Additionally, if a great American company like Apple or General
Electric manufactures products overseas – and in this global economy
many, many companies do – our tax code discourages them from taking
their profits from abroad and re-investing them in America to create
jobs here.
If income generated abroad is brought back to America to create jobs,
we tax it at a rate of 35% – after it has already been taxed in the
country where it was earned. If the company keeps the money
abroad, it
escapes further tax from the United States.
The effect of this is obvious – companies are looking for ways to do
more things – conduct R&D, design innovative products – overseas,
instead of right here in America. Meanwhile, according to the
National
Science Board, the U.S. share of global research and development has
declined, from 37% in 2001 to 30% in 2011.
Meanwhile, over two trillion dollars of profits that have been
generated internationally are sitting offshore.
This is policy insanity. It’s time for those profits to come
home. It’s time for new jobs here.
So on the corporate side, a second feature of my tax reform proposal is
this: we should allow American companies a one-time opportunity
to
repatriate those profits earned overseas over the last two decades at a
much lower tax rate – I propose a rate of 8.75% for this one-time
holiday.
And we should combine this one-time rate on past earnings with
legislation to establish a territorial tax system going forward.
In a
territorial system, profits earned are taxed in the country in which
they are generated – once, not twice.
As it stands now, America is among a tiny handful of nations, including
North Korea, which have a system that taxes profits twice. Once
where
they are generated, and again when they come home. None of our
largest
trading partners do this – they all have a territorial system.
This small change would unleash a wave of investment capital that would
be invested in the United States of America to expand companies in the
U.S., build factories and warehouses, improve our infrastructure – in
short, to create jobs.
And according to the joint tax committee, this change, done in
conjunction with larger tax reform, would be a moneymaker for the
government, generating revenues from the smaller one-time tax on
earnings that would otherwise never be repatriated.
Also on the corporate side, the United States today has the highest tax
rate in the industrialized world. While other countries have been
reducing their rates to improve their competitive position, the United
States has been stuck at 35%.
The Republican Party under Ronald Reagan taught the world that high tax
rates hurt growth. But ironically, other countries have heeded
that
lesson while we have forgotten it.
So a third piece of my tax reform plan would be to cut the corporate
tax rate from 35% to 25%. Studies have shown that corporate taxes
are
the most harmful to growth, and the U.S. has the highest corporate tax
rate in the industrialized world.
It is simple: you can’t have the highest tax rate in the world
and
expect to be the most attractive place for investment in the world.
In fact, in 2014, Standard & Poors’ Capital IQ reported that
cutting the corporate tax rate by ten percentage points could create as
many as 10 million jobs over the next five years.
A small but important point on the corporate side of taxes: let’s
repeal one of Obamacare’s tax-related and job-killing provisions – the
2.3% tax on medical devices. This tax applies to everything from
the
most advanced, life-saving pace makers to the simplest dentures.
The medical device industry has been a source of growth for the U.S.
economy, a source of exports, and a source of innovation. Why
would we
want less of those things?
There is strong bi-partisan support to repeal this tax. Let’s do
so today.
Its bias for higher taxes is not the only way in which the current
administration has stunted growth and produced a weak recovery.
The government today also wields a very heavy hand when it comes to
regulation. So the second point of my “Five-Point Plan for
Growth” is
to reform and reduce overbearing government regulation.
At times it seems that the current administration is targeting one
private industry after another, undermining their prospects through
heavy-handed regulation. In 2014, they set an awful record:
81,000
pages of federal regulation, a new record.
Take electric power. Today, almost 40% of America’s electricity
is
generated by coal. And a very large amount is fired by natural
gas.
And as we move to cloud computing, we need more reliable electric
power. Data centers in 2011 were estimated to consume about 2% of
the
electricity generated in this country, up from virtually nothing just a
few short years ago. And that number has surely grown. If
you plug in
an electric car, you need electric power to power that battery.
If you
manufacture anything from a semiconductor to a lawn mower, you need
electric power – reliable electric power – to power that process.
So what has this administration done? Using a very novel
interpretation of section 111(d) of the Clean Air Act – an
interpretation which will of course be challenged in the courts – the
administration is not only trying to prevent new coal-fired electric
plants from being built, it is one-by-one trying to force the closure
of existing plants. Never mind, of course, that china is building
several dozen new coal-fired power plants every year.
This will hurt every American industry by making electric power less
available, less reliable, and more expensive.
Ironically, President Obama went to Africa and held forth at length on
the importance of electric power to generating economic growth.
He
even launched a “Power Africa” initiative. Sadly, he didn’t seem
to
remember that connection when he got home.
A second example: the Internet. I don’t know about you, but
in my
view the Internet has been a pretty useful asset to America and the
world.
Yet now, again using a completely novel and highly aggressive
interpretation of the authority of the Federal Communications
Commission, this administration wants to regulate Internet networks
like electric utilities. They want to set prices and rules.
They want
to force those who would build out networks to give their service away
without regard to what it cost to build those networks.
Does anyone here think that the government running the Internet is a
good idea? Do you think that forcing someone, by government fiat,
to
give away access to their network, will induce them to build more
networks? The fact is we need more broadband and wireless
networks,
not fewer. The fact is that the United States has already slipped
to
17th in terms of broadband access.
Does anyone really think that if the federal government had been
dictating the Internet for the past 20 years, individuals would have
the ability to surf among millions of websites, stream millions of
videos, or save billions of dollars on purchases, as they do
today?
If President Obama had his way, we’d all be waiting for the whiny
squeal of a dial-up. And he’d decide who would get a
connection. What
a monumentally bad idea.
I could go on. Partisans on the National Labor Relations Board
attacking companies who want to move to a more productive or
pro-business location. The Administration is undermining
innovative
education companies that don’t fit its vision of a union-dominated
education system.
Across the board, this administration’s heavy hand in regulation has
placed a brake on growth.
So the second point of my pro-growth plan is regulatory reform.
I have a history of taking aggressive action when replacing an
Administration that has used regulations to advance a liberal agenda
and strangle business. On my first day in office replacing former
Governor Jon Corzine, I signed Executive Order No. 1, which froze for
90 days the issuance of any new regulation. It was to send a
clear
message to the overzealous regulators and to the business owners who
they tormented: a new pro-growth approach to regulation was here
and
it was here on day one.
First, I believe that the next president should do exactly the same
thing to send the same message to the regulatory beast the federal
government has become under this president.
Second, regulation should be used to implement actions that are
explicitly authorized by statute. This era in which an
ideological
administration tries to accomplish through the regulatory state what it
didn’t have the votes to accomplish in the duly elected Congress must
end.
Third, regulation should be rational. Under administrations of
both
parties, we have had a requirement that the benefits of major
regulations are supposed to outweigh the costs. That seems like
common
sense. But in this administration such cost-benefit analysis has
been
largely ignored, or gamed. So second, we should insist on
cost-benefit
analysis, and we should heed the results, as required by law.
President Obama’s own Small Business Administration admitted that
federal regulation costs over $10,000 per employee. How do
companies
pay for unnecessary regulation? They cut the paychecks of their
employees, they cut back investment, or they raise prices for consumers.
That’s why, I would offer a fourth proposal on regulatory reform:
Congress should adopt a regulatory budget, such that the cost of
complying with all regulations adopted by the federal government in any
given year will not exceed a set amount.
Fifth, just as we have had a “pay as you go” system on the fiscal side,
we should create a “regulatory zero” rule, under which for each new
rule that is promulgated, one of equal cost must be sunsetted or
removed. This rule will keep the growth of the regulatory state
from
smothering the entire U.S. economy.
Lastly, with respect to regulation, after eight years of this
president, it will be time for some major cleanup. I believe that
any
new president should commit, during the transition, to review every
rule and executive order published under this administration, so that
on day one, the most egregious and unlawful ones can be revoked.
The long regulatory arm of government has extended its reach in these
last six years. It’s time to make sure that long arm does not
continue
to strangle any prospect for four percent growth.
The third point in my “Five-Point Plan for Economic Growth” is related
to number two. It is time we had a comprehensive and effective
national energy strategy.
In the last few years, we have been in the middle of an energy
renaissance in this country – in North America, really. New
technologies such as directional drilling and hydraulic fracturing have
dramatically expanded America’s production and recoverable reserves of
both oil and gas.
The results have already been staggering. Lower gas prices at the
pump. A dramatic reduction in our oil imports. Lower costs
for
manufacturers.
The shale gale has also been a major source of jobs in this
recovery.
And those new jobs are not simply in energy. For the first time
in
nearly 40 years, new steel plants were erected in Ohio to supply the
pipes needed for new exploration.
As I said when I visited Mexico and met with President Pena Nieto last
fall, this is truly a North American energy renaissance. The
surge in
U.S. production has been accompanied by a government led
denationalization of Mexico’s energy industry.
North America – the U.S. and its friendly neighbors and close trading
partners Canada and Mexico – have in front of us a major opportunity to
increase the competitiveness of our regional economy in the world, and
to improve our strategic and security position at the same time.
We can strengthen our manufacturing sector, reduce the reliance of our
European allies on an aggressive Russia, reduce our exposure to bad
actors in the world economy like Venezuela and Iran, and create jobs
here at home all at once.
But make no mistake: the energy boom has occurred despite the
efforts of this administration, not because of them.
And the energy boom has revealed both opportunities and needs in our
energy picture. To truly seize the potential of the North
American
energy renaissance, we need to do several things:
First, build the necessary infrastructure to get product to markets and
ensure the smooth functioning of our energy markets. That means
constructing pipeline infrastructure where needed – yes, including the
Keystone Pipeline. And it means the infrastructure which will
make
possible increased energy exports as well.
Second, we should lift the decades old ban on crude oil exports.
We
should allow markets to function and allow U.S. producers to take
advantage of much higher prices for various types of energy in both
Europe and Asia.
Third, as I mentioned above, we should rationalize our approach to
regulation to make sure it is fair. Our regulatory framework
should
allow all forms of energy to compete.
Fourth, research into new technologies – everything from capturing and
sequestering carbon to improving battery technology to storage for wind
and solar.
We can and should tap every form of energy in an environmentally sound
manner – not one that favors some fuels for political reasons and tries
to disfavor others.
At the end of the day, the critical measure of success for any growth
plan is people going to work at jobs worth doing.
Today, however, we have too many federal policies that discourage
work. Obamacare discourages employers from hiring. High
taxes are a
disincentive. And in the last six years, on multiple fronts, we
have
allowed a system to grow where more people are choosing not to work,
either because they are discouraged, can’t find work, or because the
incentives not to work are too great.
So the fourth point of my growth plan is to change systems which
disincentivize work and make sure our government policies actually
encourage going to work. We must reduce the marginal cost to the
employee of taking a job, and reduce the federally-imposed cost to an
employer of hiring someone.
The effects of policies that discourage full-time work can be seen all
around us.
According to the Pew Research Center, last year, over a third of
Americans between ages 18 and 31 were living in their parents’ homes –
the highest share in at least four decades.
This “failure to launch” problem hurts economic mobility in that it can
hold back the economic prospects of this generation for the long
term.
So let me start with a simple proposal under this heading: we
need to repeal the Obamacare 30-hour workweek.
This is the requirement that any employer employing someone more than
30 hours a week be required to provide health insurance. Is it
any
surprise that the effect of this provision has been a massive incentive
to shift employees to less than 30 hours a week? I mentioned
earlier
the massive shift from full-time to part-time employment under this
president. Well here is one clear contributor.
Let’s get the 40-hour workweek off the endangered species list and put
Americans back to work.
Second, two weeks ago, I proposed to eliminate the payroll tax for
those nearing the end of their working careers, above age 62. I
propose that we should consider a similar tax break for those newly
entering the work force, below age 21. Let’s encourage those
nearing
retirement to keep working should they want to; and let’s make it
easier for the young to enter the work force. Both will be good
for
America.
Third, as I outlined here in New Hampshire a few weeks ago, let’s
reform the Social Security disability system to encourage a return to
work and reward employers who re-hire those on disability. I
proposed
then that eligibility for disability be conditioned by entering a
rehabilitation program and having a rehabilitation plan.
These are just some initial steps. But my broader philosophy is
this:
I believe in the dignity and the value of work. So we should
promote
incentives to work and remove disincentives wherever we can.
Finally, the fifth point in my “Five-Point Growth Plan”: America
must
remain the home of innovation in the world. America has been
blessed
in the last several decades to be the home of innovation – we have
successful startup companies – and big companies that began as startups
– right here in New Hampshire, throughout greater Boston, and of course
in Silicon Valley and in many other places across the country.
But if you examine how we got there, you realize we need to take steps
today to preserve the building blocks that got us here.
First, we need to spend less on entitlements and more on research that
leads to innovation. A few weeks ago, I came here to New
Hampshire to
outline some specific ideas for curbing the growth of entitlement
spending by the federal government, ideas which together will save over
a trillion dollars in the coming decade.
“What does this have to do with innovation?” You may ask. Well
consider this: in the past few decades, as government spending on
entitlements and health care as a percent of our GDP has soared,
investment in R&D has been basically flat.
In last year’s budget, for example, spending on Medicaid went up 16.2%,
while the budget for the National Institutes of Health went up 0.1% and
the budget for the National Science Foundation declined by 4.3%.
This
was the president’s budget – before the Congress touched it, so don’t
blame it on them.
Yet it is this exact investment in basic R&D, in such areas as
biomedical research, materials science, and high performance computing
– delivered in large part through individual investigators at
universities – that has laid the vital groundwork for so much
innovation in America’s fastest growing industries, such as technology
and biotech. America will not remain the home of innovation
if we
allow our crown jewels – the great research universities that lead the
world – to wither on the vine.
To encourage private sector innovation, as part of the tax reform I
mentioned earlier, we should make the R&D tax credit
permanent. In
2009, over 12,000 companies, including over 5,000 manufacturers, used
the R&D tax credit.
Second, being the leader in innovation requires a focus on education –
both K-12 and higher ed. I will have more to say in future
speeches on
both topics. But the outlines of what we need to do are
clear. To fix
the schools: give students and parents choice, reward great teachers by
paying them more, support and expand charter schools, reform tenure,
and do everything we can to better prepare the work force of tomorrow
and create opportunity for every student.
On the higher ed side, in addition to investing in the universities
themselves through federally supported research, we must do a better
job matching the skills we produce in students with the needs of
employers in this fast-changing economy. This is standard
practice in
other countries, such as China.
The majority of jobs available today in America require post-secondary
education. The good news is, more Americans are getting
that
education than ever before. The bad news is that, over the last
three
decades, tuition costs have tripled. Student debt has
soared. And too
many of our graduates are under-employed.
In higher ed, it’s time that we focused on getting students the
credentials and degrees that employers actually value. We need greater
transparency on what we’re paying for and greater choice on whether we
want to pay for it; we need to leverage technology to make the delivery
of education higher quality and lower cost; and we need to work with
the private sector to make the pathway from high school, to
post-secondary education, to the entry-level job market more seamless
with a better match between skills and job opportunities. If we
are to
compete in the global economy, these are requirements.
A third key we need if we are to be the best home for innovation:
we
must make sure that young, growing companies, the source of so much job
creation in America, have access to capital.
America has for many years had the deepest, most liquid, most
transparent capital markets in the world. And we have been the
principal home to the venture capital industry, with over 70% of the
world’s venture capital managed here.
But once again, we have been destroying the goose that laid the golden
egg. America is losing its lead in the global IPO market, and the
number of stock listings here is dropping sharply, in part due to the
unintended consequences of regulation – everything from Eliot Spitzer’s
research settlement, which helped destroy the equity research and
trading business; to Sarbanes-Oxley, which made it more expensive for
young companies to come public; to Dodd-Frank, with new requirements
but no fix for young companies seeing the window to the capital markets
close on them.
Reform that makes it easier for young high growth companies to access
the capital markets is essential. The so-called Jobs Act enacted
in
2012 was a first step, but a small step – it is far from having solved
this key problem.
It is not just access to equity for small and medium-sized businesses
that is a problem. Dodd-Frank has hurt Main Street; credit is not
flowing to middle America.
The percentage of banks’ balance sheets devoted to making loans and
leases is at its lowest level since 1978 – again, back to the Jimmy
Carter era. And the number of banks in the United States has
actually
shrunk to its lowest level in over a century.
So even while Dodd-Frank had the effect of increasing the too big to
fail problem by concentrating the power of the big banks, it has
actually curtailed lending to small business by the smaller banks who
are economically vital.
So that is my “Five-Point Plan for Growth”: pro-growth tax
reform;
getting regulation under control; launching a national energy strategy;
creating incentives and removing disincentives to work; and ensuring
that America is the home of innovation.
Here in Manchester, you know the importance of economic growth.
From the time Samuel Blodget helped organize this city, Manchester’s goal has always been to be a leading place to do business. And you have succeeded: today, CNN ranks Manchester 13th in the top 100 cities in America in which to live and launch a business. Now, America needs to once again be an attractive home for company formation.
And we can do it. With the energy of the American people, the
pent up
demand to be freed from regulation, and the pent up capital ready to be
invested in a growth plan, there is no reason American cannot return to
a strong economic growth path. Our goal should be no less than
four
percent GDP growth and a restoration of the dream of upward economic
mobility that every generation of Americans has shared.
When you look over the pieces of this “Five-Point Plan for Growth”, an
interesting observation emerges. Many of these things have been
the
subjects of bipartisan agreement in the past.
Comprehensive tax reform – lowering rates while removing complexity in
the tax code -- that was enacted by President Reagan in 1986, working
with New Jersey’s senator Bill Bradley and others.
Welfare reform in the 1990s – trying to incentivize work -- was a
product of President Clinton and a Republican Congress.
Energy independence for America and its allies has been a discussed and
agreed upon policy by both parties since the 1970’s.
In the past, these have been the subjects of bipartisan agreement.
But what has happened to our politics? What has happened to
today’s Democratic Party?
Will today’s Democrats oppose tax reform that promotes growth and makes
it easier to do your taxes each year? Will they oppose provisions
to
incentivize work instead of dependency? Have today’s Democrats
turned
so far left, so reflexively left, that they oppose every growth
initiative, even ones the party has supported in the past?
Only they and their nominee can answer that question, but my answer is
this: it is time to come together and get things done for America.
It is time to put partisanship aside and focus on growth for
America.
Our future depends on it. Our ability to deliver a better
standard of
living for future generations --- our obligation to deliver them a
better life – hangs in the balance.
Together, this “Five-Point Plan for Growth” will send a strong signal
of a change in direction.
For those on the left who say we cannot afford a tax cut, I would point
out that the biggest loser in a low growth economy is the U.S. federal
government. Revenues sag and deficits swell.
So I say that what we really cannot afford is a prolonged period of
slow growth.
For those who say they are unwilling to trim the currently unrestrained
growth of entitlements, I say that without change we are sowing the
seeds of the demise of the very programs they claim to want to preserve.
For those who say not to worry, innovation will pull us out of our
slump regardless of cumbersome regulation and underinvestment in our
economy, I say look around you. Other countries are adopting
pro-growth policies and making forward-looking investments. In a
competitive world, with talent distributed across the globe, the right
to be the home of innovation has to be earned. It is not a given.
It is time to recognize that an economic policy driven overwhelmingly
by the belief that government should pick the winners and losers rather
than the efforts and ingenuity of the American people is a path to
misery – to a lower standard of living and a loss of opportunity and
freedom for too many Americans.
As a Republican, I don’t suffer from the disease that Democrats do – I
don’t feel the political need to vilify the wealthy and
accomplished. But by the same token, I do not feel we
need to
protect them either. The policies of this president have led to a
crippling decline of middle-class wages and opportunities, while our
wealthiest have gotten wealthier on a stock market fueled by borrowing
and easy money. I will not attack or vilify those who have been
successful, but America now needs leaders who will fight for our middle
class by growing our economy and unleashing the opportunities that will
come with growth.
The president has told us that there are villains who are to blame for
this loss of opportunity – he blames President Bush, Republicans in
Congress, corporate CEOs, lobbyists, you name it. He goes on and
on –
but he never takes responsibility for the failed policies that he has
initiated which have hurt our economy. He said in 2008 that he
would
cut taxes, but seven years later we have higher tax rates and the most
uncompetitive tax system in the world. He said in 2008 that our
economy would not just be for the wealthy but for all who are willing
to work, but seven years later middle-class wages are down and stock
market wealth is up. He said in 2008 he wanted America to be
energy
independent, yet he fights natural gas exploration, coal technology,
and refuses to build the Keystone Pipeline. In 2008, he promised
to
make college education affordable for
everyone, but seven years later our children will graduate, too often
onto their parents couches, with more student debt than any generation
in history. In 2008, he said it was time to protect Social
Security,
but seven years later he remains silent on the collision course we are
on with insolvency and complicit in $18 trillion in debt. And
finally,
he said if you like your health insurance plan and your doctor you can
keep them, but now, due to his policies, millions of Americans have
lost both.
All of these failures have led to this weak economy and to the
overwhelming anxiety that Americans feel today around their kitchen
tables.
I’d like to say to the president, “Doctor, heal thyself.” Stop
blaming everyone and everything else.
But I fear that it is too late, and now, only the American people can
cure what ails us. The only cure today is the same one they
availed
themselves of in 1980 – rejecting the weak, manipulative and arrogant
leadership of a failed democratic president who ran on a one-sentence
slogan, and then led our country into economic morass at home and
timidity around the world. Embrace strong, simple, direct
leadership
that says that trusting the people to grow our economy is what will fix
our lives, and that resolute truth-telling at home and around the globe
will restore American authority, strength, and optimism.
We must do this by telling the American people the truth – the hard
truths – about what is necessary to grow our economy and once again
provide the middle class with growing wages that result from growing
opportunity. This “Five-Point Plan for Four Percent Growth” is
the
type of honest, specific plan that will help America reach that goal.
Thank you, God Bless you, and God Bless America.
# # #
REACTION
Democratic National Commmittee
May 12, 2015
DNC Response to Christie Economic "Plan"
Chris Christie’s speech about his economic “plan” left us with more questions than answers today. What is clear, however, is that his plan cuts taxes for the wealthiest and corporations. We still don’t know what he would do for the middle class, which tax credits and deductions he would eliminate to make his proposal truly revenue neutral, or what level he’d set for his cap on deductions and tax credits. What does Christie’s plan mean for students who use loans to afford the high cost of college?
With so many questions, we can only refer to Chris Christie’s economic record in New Jersey for answers, and those answers are pretty terrible for the middle class. Under Chris Christie, New Jersey has consistently ranked near last in the nation in job creation with an unemployment rate higher than the national average. Net property taxes on seniors and the middle class have grown by more than 20 percent while the wealthy were protected from increases. And when Chris Christie watered down the earned income tax credit, low income families across the state lost money they needed to support their families.
Prioritizing the wealthy and corporations while failing to put the middle class first is typical of the failed Republican playbook, and typical of Chris Christie. It didn’t work for him in New Jersey and it won’t work this time either. –Kaylie Hanson, DNC spokespersonLeadership Matters for America
May 13, 2015
What They're Saying About…
“Chris Christie Offers Plan To Aid The Middle Class”
Honorary Chairman Gov. Chris “Christie Is Spot On With His Diagnosis” And “Staked Out A Moderate, Pro-Growth Economic Platform”
______________________________
Headlines …
“Christie Calls For Simpler Tax Code, Lower Corporate Taxes”
– WMUR
“Gov. Chris Christie Pushes for Reagan-Era Tax Rates”
– The Wall Street Journal
“Chris Christie Offers Plan to Aid the Middle Class”
– The New York Times
“Christie Calls Obama 'Most Anti-Growth' President In Post-War
History”
– New Hampshire Union Leader
“Christie: Just ’15 Minutes To Do Your Taxes’ Under My Plan”
– Daily Caller
______________________________
What They’re Saying …
The Wall Street Journal: “Christie Draws Contrast With Obama in Speech on Economy” (Heather Haddon, “Christie Draws Contrast With Obama in Speech on Economy,” Wall Street Journal - Washington Wire, 5/12/15)
- “Gov. Chris Christie Pushes for Reagan-Era Tax Rates” (John D. McKinnon & Bob Davis, “Gov. Chris Christie Pushes for Reagan-Era Tax Rates,” Wall Street Journal, 5/12/15)
- “New Jersey Gov. Chris Christie staked out a moderate, pro-growth economic platform in a speech Tuesday, calling for income tax cuts and a tax holiday for U.S. companies holding investments overseas, while attacking President Barack Obama‘s economic record.” (Heather Haddon, “Christie Draws Contrast With Obama in Speech on Economy,” Wall Street Journal - Washington Wire, 5/12/15)
Forbes: “Much To Like In Chris Christie's Economic Platform Preview” (Jeffrey Dorfman, “Much To Like In Chris Christie's Economic Platform Preview,” Forbes, 5/12/15)
- “Governor Christie is spot on with his diagnosis and mostly on target with his prescriptions.”
- “Even better, if he tweaks it correctly as he adds specifics, Governor Christie could end up with a great model for economic revival.”
- “Governor Christie correctly identifies our slow-growing economy as suffering from too much debt, too much entitlement spending, a labor participation rate that is too low, and too few full-time jobs.”
- “Governor Christie points out the importance of increasing R&D to foster faster economic growth, the best hope for digging the country out of debt and affording the social benefits spending on the rapidly aging Baby Boomer demographic bulge. “
The Washington Times: “Chris Christie: U.S. Needs Leaders ‘Who Will Fight’ For Middle Class” (David Sherfinski, “Chris Christie: U.S. Needs Leaders ‘Who Will Fight’ For Middle Class,” The Washington Times, 5/12/15)
- “Saying that America needs leaders who will fight for a middle class left behind in the current economy, New Jersey Gov. Chris Christie laid out an economic platform Tuesday that called for a simpler tax code, reduced regulations, a national energy strategy and policies he says would incentivize hiring and technological innovation.”
The Hoover Institution Lanhee J. Chen: “@ChrisChristie announces econ plan that will spur growth” (@lanheechen, Twitter, 5/12/15)
The Associated Press: “New Jersey Gov. Chris Christie proposed Tuesday cutting income and corporate tax rates as part of a plan to return the U.S. ‘to its pro-growth roots and its pro-growth policies’ and bolster the middle class.” (Jill Colvin, “NJ’s Christie Calls For Tax Cuts In Economic Policy Speech,” The Associated Press, 5/12/15)
- “Christie repeatedly chided the economic policies of President Barack Obama, blaming him for a weak economic recovery that has left the incomes of middle-class families stagnant.”
The New York Times: “Chris Christie Offers Plan to Aid the Middle Class” (Gerry Mulany, “Chris Christie Offers Plan to Aid the Middle Class,” New York Times - First Draft, 5/12/15)
- “Arguing that the Federal Reserve under President Obama had overseen easy-money policies that have helped fuel the rise in stock prices, he says the major beneficiaries have been those who own equities, while people who depend mainly on their salaries have been left behind.”
- “[Christie’s] cure? Simplifying the tax code from six brackets to three, reducing income tax rates, and eliminating the payroll tax for anyone over age 62 or those entering the workforce under age 21.”
New Hampshire Union Leader: “Christie Calls Obama 'Most Anti-Growth' President In Post-War History” (Dan Tuohy, “Christie Calls Obama 'Most Anti-Growth' President In Post-War History,” New Hampshire Union Leader, 5/12/15)
- “[Christie] said the goal is to have comprehensive tax reform, target excessive regulations, establish a national energy strategy with an ‘all of the above’ policy, and focus on incentives for people to work and help for companies to innovate.”
WMUR: “Christie Calls For Simpler Tax Code, Lower Corporate Taxes” (John DiStaso, “Christie Calls For Simpler Tax Code, Lower Corporate Taxes,” WMUR, 5/12/15)
The Daily Caller: “Christie: Just ’15 Minutes To Do Your Taxes’ Under My Plan” (Alex Pappas, “Christie: Just ’15 Minutes To Do Your Taxes’ Under My Plan,” Daily Caller, 5/12/15)
- “New Jersey Gov. Chris Christie unveiled a plan Tuesday that he says would ‘create a flatter, fairer, simpler tax code.’”
The Star-Ledger: “Declaring that middle-class America has been besieged for more than a decade by ‘anxiety and unhappiness’ over stalled economic growth, Gov. Chris Christie on Tuesday unveiled a five-point plan he said would breath life into the nation's economy and struggling working families.” (Matt Arco, “Christie slams Obama and proposes federal tax cuts as he eyes 2016,” Star-Ledger, 5/12/15)
The Record: “‘I thought that was an excellent speech,’ [Richard Maloon, of Merrimack] said. ‘I liked the points that he brought up. I like that he was very specific and it gives people something to chew on and now people can make their choice.’” (Melissa Hayes, “During New Hampshire speech, Christie calls for revamp of US economy,” The Record, 5/12/15)
- “Maloon particularly liked Christie’s proposal to eliminate the payroll tax for people over age 62 and for people under age 21 who are just entering the workforce.”
- “Don Clark, who is originally from Point Pleasant and now works in property management in Manchester, said he liked Christie’s call for simplifying the tax structure and efforts to encourage companies that are moving to other countries to reinvest here.”