Remarks by House Minority Leader John Boehner, Ohio Republican, on Jobs & The Economy
As Prepared for Delivery
The City Club of Cleveland, Cleveland, Ohio
August 24, 2010
Thank you for being here. I know this is the beginning of another long day for you – trying to make heads or tails of this economy, trying to make decisions without knowing what the next week, or even the next day, will bring.
Working at my dad’s bar in Reading, mopping floors and waiting tables, I watched him and the folks in our neighborhood agonize over these decisions. Later, I had to make them myself running a small business in West Chester.
When I travel around our state, I talk to employers who are not only trying to create jobs, but also trying to keep the people they have. The powers-that-be in Washington don’t stop to think of how, for a small business, employees are like family members.
You watch them start a family, you lend an ear when they’re trying to find a house in a good school district, you run over to the hospital when someone’s sick.
These are bonds that can’t be measured in statistics and spreadsheets coming from this bureau or that bureaucracy. But intangible as these bonds are, they have been frayed by the struggling economy.
Right now, America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty. The prospect of higher taxes, stricter rules, and more regulations has employers sitting on their hands. And after the pummeling they’ve taken from Washington over the last 18 months, who can blame them?
While visiting our state last week, President Obama attended a political fundraiser in downtown Columbus. At that exact moment, just a few blocks away, hundreds of Ohioans were waiting in line at a job fair where they would learn yet again that companies aren’t hiring right now. They’re frozen.
Or, as the organizer of the job fair put it, employers are – and I’m quoting now – “scared to death.”
Scared to death.
When I met with the president last month at the White House, I conveyed my belief – shared by many economists – that this ongoing uncertainty is hurting small businesses and preventing the creation of private sector jobs.
Not long after we spoke, he signed a 26 billion dollar ‘stimulus’ spending bill that funnels money to state governments in order to protect government jobs. Even worse, the bill is funded by a new tax hike that makes it more expensive to create jobs in the United States and less expensive to create jobs overseas.
This cannot continue.
I have had enough – and the American people have had enough – of Washington politicians talking about wanting to create jobs as a ploy to get themselves re-elected while doing everything possible to prevent jobs from being created.
A PLAN TO BREAK THE ONGOING ECONOMIC UNCERTAINTY
Today I am proposing five actions President Obama should take immediately to break this economic uncertainty and help more Americans find an honest day’s work:
First, President Obama should announce he will not carry out his plan to impose job-killing tax hikes on families and small businesses.
Unless Congress acts, virtually every American will see their taxes go up on January 1, 2011.
President Obama has stated he wants to stop some tax hikes, and not others, once again putting the government in the position of picking winners and losers and pitting taxpayer against taxpayer. According to an analysis by the non-partisan Joint Tax Committee, Congress’s official tax scorekeeper, half of small business income in America – half – would face higher taxes under the president’s plan.
Of course, as if on cue, the same Washington politicians who have spent the last 18 months borrowing and spending our economy into the ground are now fretting over whether we can afford the ‘cost’ of stopping job-killing tax hikes.
Only in Washington would it be acceptable to think that taxpayers should have to pay for the privilege of keeping more of their own hard-earned money.
We will not solve our fiscal challenges until we cut spending and have real economic growth – and we won’t have real economic growth if we keep raising taxes on small businesses.
One of President Obama’s predecessors once said that “an economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs.”
That president was John F. Kennedy.
So let me be clear: raising taxes on families and small businesses during a recession is a recipe for disaster – both for our economy and for the deficit. Period. End of story.
That’s why President Obama should work with Republicans to stop ALL of these job-killing tax hikes.
Second, President Obama should announce that he will veto any job-killing bills sent to his desk by a lame-duck Congress – including ‘card check,’ a national energy tax, and any other tax increases on families and small businesses.
The House passed a ‘cap-and-trade’ national energy tax last year, but the Senate has yet to act. Remember, this is a plan under which the president said “electricity rates would necessarily skyrocket.”
The national energy tax has the capacity to wipe out many of the manufacturers and family farms here in the Rust Belt that are just barely hanging on.
Also pending is ‘card check.’ This bill is the top priority for the public-sector unions that provide the money and foot soldiers for Democratic campaigns.
It eliminates a worker’s right to a secret ballot in union elections, making it easier for unions to organize while putting employers at a firm disadvantage. Card check is essentially a ‘how-to’ guide for destroying small business jobs.
When I asked the president about his support for ‘card check’ during our meeting last month, he accused me of scare tactics, while the rest of the Democratic Leaders in the room acted like they didn’t know what I was talking about.
The very next week, the president told a union crowd he will ‘keep on fighting’ for ‘card check.’
Democratic Leaders refuse to rule out the possibility of forcing these job-killing bills through in a lame-duck session, after the election, after the voters have had their say.
Their failure to level with the American people only compounds the ongoing economic uncertainty.
President Obama should announce that he would veto these job-killing bills, and I pledge that Republicans will work with him to sustain those vetoes.
Third, President Obama should call on Democratic Leaders in Congress to stop obstructing Republicans’ attempts to repeal the new health care law’s job-killing ‘1099 mandate.’
The president’s government takeover of health care is already wreaking havoc on employers and entrepreneurs. This is a law that – upon its enactment – triggered the creation of more than 160 boards, bureaucracies, programs, and commissions. By the end of July, Washington had already racked up nearly 3,833 pages of regulations to direct the law’s implementation.
One of the new law’s most controversial mandates requires small businesses to report any total purchases that run more than $600.
If a landscaper wants to buy a new lawnmower, or a restaurant needs a new ice-maker, they have to report that to the feds. If you’re a Mom-and-Pop grocery store, and you buy $1000 worth of merchandise from 15 different vendors, that’s 15 different forms you have to file.
What is the point of making employers and entrepreneurs spend $17 billion to send all this paperwork to Washington, where it’s going to cost about $10 billion to log it in and file it away? Talk about overhead.
Last month, Republicans attempted to force a vote on the House floor to repeal this job-killing mandate. Democratic Leaders blocked that vote and instead attempted to use this as an opportunity to impose another job-killing tax hike on U.S. job creators.
President Obama should call on Congress to repeal this mandate without delay, and without strings attached.
Fourth, President Obama should submit to Congress for its immediate consideration an aggressive spending reduction package.
When Congress returns, we should force Washington to cut non-defense discretionary spending to 2008 levels – before the ‘stimulus’ was put into place. This would show Washington is ready to get serious about bringing down the deficits that threaten our economy.
For his part, President Obama says we should wait and talk about a deficit reduction plan next year. I say, let’s talk about it right now.
All this ‘stimulus’ spending has gotten us nowhere, but it comes from somewhere. We are now borrowing 41 cents of every dollar we spend from our kids and grandkids. Think about that – 41 cents of every dollar we spend.
This spring, when power changed hands in Britain – another country racked by red ink – one Treasury minister left a one-sentence note for his successor. The note read, ‘I’m afraid to tell you there’s no money left.’
Well, I’m not afraid to tell you there’s no money left. In fact, we’re broke. Our debt is now on track to the exceed size of our entire economy in the next two years.
And the government has no plan in place for paying this debt back. In fact, Congress did not even write a budget for the coming fiscal year – they just canceled it altogether.
Without a budget, Washington will try to get away with continuing to spend at current levels. We cannot allow that to happen.
Economists have warned that all this borrowing runs the risk of causing a damaging spike in interest rates, which would cripple job creation.
We also cannot allow politicians in Washington to continue trotting out the same tired scare tactics because they don’t have the courage to say no to whichever union or interest has their hand out.
That’s not governing, and that’s certainly not leadership. Those are just the last gasps of a failed government clinging to the discredited belief that more spending, more taxing, and more borrowing can solve all our problems.
Republicans are ready to work with President Obama to take this first step on the path to fiscal sanity.
Lastly, employers and small business owners are rightly frustrated by the fact that no one in the White House — not the president, not the vice president, not his economic team — is listening to them.
Part of the reason for that is that virtually no one in the White House has run a small business and created jobs in the private sector. That lack of real-world, hands-on experience shows in the policies coming out of this Administration.
The American people are asking ‘where are the jobs’ and all the president’s economic team has to offer are promises of ‘green shoots’ that never seem to grow. The worse things get, the more they circle the wagons and defend the indefensible.
We have been told that the president’s economic team is ‘exhausted’ — already, his budget director and his chief economist have moved on or are about to. Clearly, they see the writing on the wall, and the president should too.
President Obama should ask for – and accept – the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council.
Now, this is no substitute for a referendum on the president’s job-killing agenda. That question will be put before the American people in due time. But we do not have the luxury of waiting months for the president to pick scapegoats for his failing ‘stimulus’ policies.
We’ve tried 19 months of government-as-community organizer. It hasn’t worked. Our fresh start needs to begin now.
LISTENING TO THE AMERICAN PEOPLE
Today I’d like to talk to you about how we go about achieving the fresh start we need.
In May, Republicans launched the America Speaking Out project, led by Congressman Kevin McCarthy, to give taxpayers, families and small business owners a direct line to their elected representatives.
Online and at town hall meetings, Americans are sharing their solutions for building a more responsive government and a better country. All you have to do is log on to AmericaSpeakingOut.com, post an idea of your own, or comment and vote on someone else’s. As we speak, thousands of ideas are percolating on America Speaking Out.
This listening effort will culminate next month with the release of a clear and positive governing agenda focused on getting people working again. Because jobs is the issue — and ‘where are the jobs?’ is the question — I hear about everywhere I go.
This agenda will reject Washington-knows-best policies and offer a fresh start focused on unshackling small businesses, unleashing the entrepreneurship of our people and helping families across this great nation realize the American Dream.
Now, this won’t be just some document handed down by Washington know-it-alls pushing the same-old, same-old.
And it certainly won’t be based on the idea that sitting in Washington cutting backroom deals on 2,000-page bills represents hope.
We are building this agenda from the ground up by listening to the American people.
Never before has the need for a fresh start in Washington been more pressing. I’ve discussed what we’re up against in terms of addressing the immediate economic uncertainty.
Beyond the soundbites and headlines, Washington is gripped by a more entrenched uncertainty – a standstill bred from all the scar tissue built up between the two parties, all the kicking the can down the road, and all the interests that prod us to keep doing so.
I’ve said that if I were fortunate enough to be Speaker of the House, I would run the House differently.
And I don’t just mean differently than the way Democrats are running it now. I mean differently than it’s been run in the past under Democrats OR Republicans.
That means challenging the old ways in Washington, getting to the bottom of what drives people crazy, and then fixing it once and for all.
Look at spending. We don’t just need to stop spending so much, we need to stop spending so irrationally.
The common logic among Washington Democrats is that government spending creates jobs when that money is used to build a hiking trail or a playground.
Yet we have to remember that, even when spending is not at record-setting levels, each dollar the government collects is taken directly out of the private sector.
This is a lose-lose proposition, plain and simple. On the front-end, Washington’s investments in the economy aren’t nearly as efficient because government spending decisions often put a premium on political expedience rather than sound economic policy.
And, as we’re learning now, deficit spending always comes due.
Here’s an example of how out-of-hand things have become: we have recently seen Washington politicians take victory laps for spending billions of dollars to continue providing unemployment insurance These benefits are held up as a “jobs plan” and ‘stimulus’ for the economy.
Keeping workers on the unemployment rolls instead of fostering small business and private sector growth is not a responsible jobs plan. The American people would agree unemployment insurance is an important safety net, but it is not a responsible jobs plan.
The American people know what’s going on here. They know that when the bill comes due, it’s their pockets Washington will look to for a bailout. We’re seeing it right now with the president’s plan to raise taxes.
Listen, we need to have an honest conversation with the American people about the scope of our fiscal challenges – that means everything from short-term commitments to long-term commitments.
It is an act of bad faith – and bad judgment – to start this conversation by imposing job-killing tax hikes on families and small businesses.
Failing to rein in these debts is our own fault – both Democrats and Republicans. We should not punish unemployed workers and small business owners for our inability to make the tough choices we were elected to make.
We need to start looking at every government program and ask ourselves: is it right to force our kids and grandkids to pay for this? As Mitch Daniels, the governor of Indiana, recently said, “You’d really be amazed at how much government you’d never miss.”
Just as we re-evaluate how the federal government spends money, we should also rethink how it collects money.
Washington’s backwards accounting assumes tax relief expires, but that spending programs will continue – setting up a built-in bias for higher taxes and more spending.
That is, of course, unless Congress extends the tax relief. So instead of making tough choices, Congress ends up essentially rubberstamping a haphazard collection of “must do” tax policies from one year to the next.
The tax ‘extenders’ bill is a prime example of this. This year’s ‘extenders’ bill had 71 separate tax provisions in it, totaling 31.6 billion dollars. More provisions get added in each year, but few if any ever fall out of the package.
There’s everything in this bill: the research and development tax credit, special expensing rules for the film industry, an extension and modification of a tax credit for steel industry fuel, the mine rescue team training tax credit, and tax incentives for investment in the District of Columbia.
Are they worth it? Many are. But we just go ahead and extend all of them temporarily – and usually right at the last minute – so Washington can continue pandering to the loudest voices instead of implementing the best ideas.
For Washington, that’s just business as usual, but that’s no way to run a business – or a government.
We need to take a long and hard look at the undergrowth of deductions, credits, and special carveouts that our tax code has become.
And, yes, we need to acknowledge that what Washington sometimes calls ‘tax cuts’ are really just poorly disguised spending programs that expand the role of government in the lives of individuals and employers.
It was the late Jack Kemp who said, ‘not all tax cuts are created equal.’ We need to bring simplicity and certainty to our tax code so we can make it a vehicle for sustainable pro-growth policies, not transfer payments to the favored few.
GOVERNMENT RUN AMOK
By trying to build a recovery on government ‘stimulus’ spending – and failing – Washington has kept the private sector in bust while manufacturing a boom for the public sector.
Since February 2009, the private sector has lost millions of jobs while the federal government has grown by hundreds of thousands of workers.
We’ve seen not just more government jobs, but better-paying ones too. Federal employees now make on average more than double what private sector workers take in.
More appalling is the fact that this gap more than doubled in President Obama’s first year in office – during a time when millions of private sector workers either lost their jobs or agreed to take pay cuts just to keep the one they have.
It’s just nonsense to think that taxpayers are subsidizing the fattened salaries and pensions of federal bureaucrats who are out there right now making it harder to create private sector jobs.
As we speak, the Obama Administration has in the queue 191 rules and regulations that could each have an estimated annual cost to our economy of $100 million or more – many may cost $1 billion or more.
That’s 191 new layers of red tape waiting in the wings, 191 de facto taxes on employers and consumers that keep people out of work and hamper innovation and investment. Small businesses cannot plan for the future with ever-changing rules.
I wish I could tell you exactly what these new rules are, but there’s no transparency here. Last week, I sent a letter to the president asking him to provide a full accounting of these regulations to the American people.
We received a response, but still no details on what these new regulations are.
No matter who’s in charge, the federal government should not be able to issue job-threatening rules on a whim, without public warning or proper scrutiny.
Endless spending sprees, entangled tax structures, and bureaucracy run amok – these are all outgrowths of a tired, bloated, and broken Washington.
Now more than ever, we need a fresh start that puts power back where it belongs: in the hands of the people. As one citizen put it on the America Speaking Out website, “just get out of the way.”
Republicans on the House Budget Committee, led by Congressman Paul Ryan, have already identified $1.3 trillion in specific spending cuts that could be implemented immediately.
These are common-sense steps – like canceling unspent ‘stimulus’ and TARP bailout funds – that put the brakes on Washington’s out-of-control spending spree.
Republicans have also proposed establishing strict budget caps to limit federal spending on an annual basis.
If we reduce spending from current levels and impose a hard cap on future growth, we can save taxpayers more than $340 billion and we can make sure this is the last Washington spending spree of its kind.
To restore balance between the federal government and the public sector, Republicans have called for freezing both government pay and government hiring. Instead of growing big-government, let’s focus on growing small businesses.
Last month, as part of our America Speaking Out project, Republican lawmakers met with leaders of America’s employer community to hear their concerns and talk about ways to end this economic uncertainty.
One of the ideas they mentioned was a freeze on new job-killing federal regulations – just something Washington could do to give them breathing room.
Right now, Republicans are fighting for common-sense legislation authored by Congressman Geoff Davis of Kentucky that would require congressional approval of any new Executive Branch rule that imposes a cost of $100 million or more on our nation’s economy.
This initiative would serve as a much-needed restraining order against unelected busybodies and bureaucrats who overstep their boundaries and make it harder to create jobs.
President Reagan once said that there ought to be a law against saying “there ought to be a law.” I could not agree more.
It’s not enough, however, to break the current uncertainty, rein in big government, and hope the pendulum swings the other way. Once businesses get up off the sidelines, we need to keep them in the game.
One idea Ways and Means Committee Ranking Republican Dave Camp proposed as part of Republicans’ ‘stimulus’ alternative called for allowing small businesses with fewer than 500 employees to take a tax deduction equal to 20 percent of their income.
This would free up extra capital for investment and new hiring to jumpstart a robust recovery. It was a better solution then, and it is a better solution now.
We’ve also recently heard a lot of talk in Washington about the manufacturing sector, but no action. Congress has yet to act on pending free trade agreements with Colombia, Panama, and South Korea.
These agreements would level the playing field for American workers, farmers, and businesses and pave the way for creating hundreds of thousands of new jobs here at home.
Passing these free-trade agreements was a critical plank of the jobs plan that House Republican Whip Eric Cantor and I presented to President Obama last December.
Congress should approve these free trade agreements immediately.
The best case I can make for these solutions is that they work – and they are working right now.
Last year, House Republicans launched the State Solutions project to bring Republican governors and state legislators together to fight big-government policies and promote better solutions to Americans’ everyday challenges.
Let’s look at what two Republican governors who have been in office only a matter of months have been able to accomplish:
In Virginia, Governor Bob McDonnell entered office facing an unprecedented $4.2 billion deficit. His predecessor, the chairman of the Democratic party, proposed closing the shortfall by imposing the largest tax increase in the state’s history.
Governor McDonnell refused to balance his state’s budget by making it harder for Virginia families and business owners to balance their own.
In New Jersey, Governor Chris Christie entered office facing an $11 billion deficit. His predecessor, also a Democrat, left behind a bloated government that used election-year property tax gimmicks to survive one set of broken promises after another.
Both governors forged bipartisan cooperation, set priorities, cut spending, and closed their shortfalls – without raising taxes.
But unless Washington provides leadership and puts in place policies that promote lasting private sector job creation – our engine of economic growth – the states will continue to face difficult choices year after year after year.
For 20 years now, I’ve watched leaders in both parties take a look at the big issues, the tough issues – and then look away. But now we’re just out of time. We have run out of road to kick the can down.
It’s time to put grown-ups in charge. It’s time for people willing to accept responsibility. It’s time to do what we say we’re going to do.
These are the values I learned growing up with 11 brothers and sisters, and these are the values I have passed on to my daughters.
I’ve also told my girls how I was raised to never accept the next best thing for myself or my country.
This is the time. No more uncertainty. No more muddled messages.
America’s strength is her people – hard working, industrious, always pioneering, always innovating – so we will confront these hard truths together and we will tackle these challenges – together.
Thank you for being here. I look forward to taking your questions.