Jobs for America: Summit 2010 - Remarks by Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce

As Prepared for Delivery

Washington, D.C.

Wednesday, July 14, 2010

Introduction—Is the Recovery Still on Track?

Eighteen months ago, in the midst of the greatest economic crisis since the Great Depression, the business community worked with Congress and the president to rescue the economy and put Americans back to work.

We supported programs to stabilize our financial institutions, bolster key industries, and help the unemployed.

Working together, we succeeded in preventing another depression.

But as we just heard Marty explain, although our economy may be growing again, it is not growing nearly fast enough to create the jobs Americans want and need.

In fact, if we continue on our current course, we may lose even more jobs and we could end up in a double-dip recession.

Uncertainty—the Enemy of Growth and Jobs

What happened to slow our progress? And more importantly, what can we do about it?

In survey after survey…in town hall after town hall…in millions of letters, phone calls, and emails, Americans have been telling their elected representatives that their top priority, bar none, is jobs. 

This has been the Chamber’s top priority as well. It is the driving mission of our Campaign for Free Enterprise—the need to create more than 20 million jobs for America over the next ten years. It’s why we are here today.

Very simply, the Congressional majority and the administration took their eyes off the ball.

Instead of continuing their partnership with the business community and embracing proven ideas for job creation, they attacked and demonized key industries.

They embarked on a course of rapid government expansion, major tax increases, and suffocating regulations—going well beyond what had to be done to keep the economy out of a depression.

They have allowed the unions to call the shots on the nation’s trade agenda, and as a result, we are lagging far behind our global competitors.

And while it is true that they inherited a big deficit, their spending policies have made the problem far worse—and completely unsustainable.

All of this has injected tremendous uncertainty into our economy—and uncertainty is the enemy of investment, growth, and jobs.

Banks, investors, companies, small businesses, and consumers are worried. They don’t know what is going to hit them next.

This is reflected in a new survey we commissioned and have just released. It was conducted by an independent polling firm, and it shows that solid majorities of both small business owners and voters believe that current policies will lead to a weaker economy and fewer jobs.

Small businesses, which are so vital to the creation of new jobs, can’t get the capital they need to grow—or they don’t want to spend the money they have. Many are struggling just to survive.

Larger corporations overall have plenty of cash but they are sitting on it. They cannot, in good faith to their shareholders, incur the heavy obligations of expanding and adding to payroll at this time.

They don’t know what their health care costs are going to be under the new law. They’re not sure where they will find future capital under the financial reform bill.

They don’t know what the new workplace and EPA rules might be. They are facing the prospect of major tax increases and perhaps a price on carbon to boot. They see weak consumer demand at home and abroad.

Under these circumstances, if you were an investor, or a corporate decision-maker, or a small business owner, would you make a big decision today to expand and create more jobs here in the United States?

Unfortunately, the answer for most is no.

Our Eroding Competitive Position

And so today, over 16 percent of the American workforce is either unemployed, underemployed, or has given up looking for a job altogether.

A study completed in recent days by the Wall Street Journal confirms that the United States is lagging far behind other major economies in restoring jobs that were lost in the global recession.

This report is one more reflection of our eroding competitive position.

In fact, other nations are taking steps to cut taxes, reduce regulations, and help their companies be more competitive.

They are busy striking ambitious deals with each other on trade, investment, and natural resources. Some are making serious efforts to invest in innovation and they are upgrading the skills of their students and workers.

Clearly, the United States faces global competition we have not seen before. What are we doing to prepare for it?

As the president has repeatedly said, job growth must come primarily from the private sector. 

Government’s role is to establish the right conditions so that the private sector can invest, compete, create new products and services, and put Americans back to work. But that’s not happening.

No matter how well-intentioned or politically popular a suggested law or regulation might be, the question should always be asked—what will be the impact on American jobs?

We fear that this question is often ignored in the halls of our government today.

So we are here this afternoon to discuss some ideas, to seek some answers, and most importantly, to make an urgent plea for action.

For it is not too late to improve the economic environment, stop another downturn, strengthen our competitive position, and revive the job-creating capacity of our nation.

We are calling upon our policymakers to stop the blame game and work constructively with America’s job creators to reduce uncertainty and restart the recovery.

The Chamber’s Jobs Strategy

To set the stage for our discussions, let me share a few of the Chamber’s ideas.

Create a Growth and Jobs Tax Policy

First, we need a rational tax policy that reflects the twin realities of a weak economy and a competitive world.

Some $700 billion in tax increases have already been passed to pay for health care and other programs.

Proposals in the capital markets, energy, and climate change arenas would raise hundreds of billions more.

And beginning January 1, Americans will be hit with the largest tax increase in history.

Individual tax rates, dividends and capital gains taxes, the death tax, and the alternative minimum tax will all go up. These are precisely the tax hikes that could have the greatest negative impact on consumption, investment, growth, and jobs.

We understand that the political battle lines have long been drawn over which of the 2001 and 2003 tax provisions should be extended.

Yet the “facts on the ground” must take precedence. Our weak economy simply cannot sustain such massive tax hikes at this time.

We therefore urge Congress and the administration to immediately support at least a temporary extension of all the tax relief passed in the prior decade.

In one bold move, this would substantially boost investor, business, and consumer confidence and infuse our economy with fresh momentum.

Congress should also reduce the U.S. corporate tax rate, which is among the highest in the world. And it should address the fact that ours is the only major economy that imposes double taxation on overseas earnings.

Restore Fiscal Health

Even as taxes are going up, spending and deficits are going through the roof.

The government debt will go from nearly 41% of GDP in fiscal year 2008, to 63% this year, to 90% in 2020.

These deficit and debt levels are clearly unsustainable.

No one we know has a full or easy answer to this long-festering problem.

The Chamber looks forward to the report later this year by the National Commission on Fiscal Responsibility and Reform. We are fortunate to be hearing from its leaders this afternoon.

Yet we already know that instead of expanding entitlements, as the administration and Congress have been doing, we need to control and modernize these programs without further delay.

We also know that without sustained economic growth, we will never restore our nation to fiscal health. A growing economy produces more government revenues, which can substantially reduce the deficit—if they are accompanied by serious spending restraint.

Even so, our fiscal hole is so deep that we will also need to generate additional revenues. Our policy challenge is to do so in ways that do not undermine economic growth or competitiveness.

Here’s one idea: There are numerous oil, gas, and shale leases on our lands and off our shores that are currently inactive. Some estimates say they could generate as much as $1.7 trillion worth of royalties over 10 years.

Furthermore, over 80% of national forest lands are currently closed to timber harvesting. Opening some of them would create direct payments to the government.

Both actions, done in an environmentally-responsible way, would also generate tremendous economic activity and create a lot of jobs.

Expand Trade and Export-Driven Jobs

So would expanding trade. President Obama has said that millions of American jobs can be created by doubling U.S. exports in five years, and we agree.

If Congress really cares about jobs it will pass pending free trade agreements with Colombia, Panama, and South Korea now. If lawmakers fail to act, Americans will actually lose 380,000 jobs to our competitors in the EU and Canada, which will soon implement free trade arrangements in these markets.

We should not stop there. According to the WTO, there are 262 free trade agreements in force around the globe today, but the United States has just 11 FTAs covering 17 countries.

America is party to only one of more than 100 negotiations of bilateral and regional trade agreements.

The president should be given fast-track trade promotion authority and he should use it vigorously to get the United States back in the game.

In addition, our intellectual property must be better protected at home and abroad and export control rules should be immediately revised.

American leadership is also needed to revive the Doha Development Round, which would stimulate the economy worldwide and open new markets to our exports.

Rebuild and Expand America’s Infrastructure

Millions of jobs, as well as our competitiveness and quality of life, depend on modernizing all forms of the American infrastructure.

Much of this important work can be done with private investment. But in order to unleash this capital, governments at all levels must first remove the regulatory, legal, and financial roadblocks.

For example, if transportation and water infrastructure were fully open to the private sector, an estimated $180 billion in private capital would be available—and that could create 1.5 million jobs over 10 years.

Incentives and legal protection for clean coal technologies, carbon capture systems—as well as a massive expansion of nuclear power—would also create hundreds of thousands of jobs while improving the environment.

Greater private investments in broadband would also foster economic development and create jobs.

To ensure that all Americans fully benefit from this technology, federal policies should foster private sector investment in broadband infrastructure and minimize regulatory uncertainty.

Congress must also quickly pass a multi-year, federal surface transportation bill.

According to the U.S. Department of Transportation, each $1 billion in federal highway investment, accompanied by the 20% state match, supports nearly 35,000 jobs. Plus, we desperately need the roads.

Ease the Burden of Regulatory Uncertainty

To save and create jobs, the administration and Congress must also recognize that the regulatory burden and uncertainty they have imposed on job creators has reached a tipping point.

In recent months, the House has passed a climate change bill that would create some 1,500 new regulations and mandates and carry a price-tag of well over a trillion dollars. The Senate is considering similar legislation.

The Environmental Protection Agency is moving forward with 29 major economic rules and 173 major policy rules, an unprecedented level of regulatory action.

The Labor Department is considering dozens of restrictive workplace policies, while the newly-appointed National Labor Relations Board is expected to make sweeping changes in every facet of union-management relations.

They’re even talking about bringing back the ergonomics rule, which could force the redesign of every workplace in America—from the largest company to the smallest Mom-and-Pop business.

The financial regulatory reform bill creates 533 regulatory rulemakings, 60 studies, and 93 reports—dwarfing anything in Sarbanes-Oxley.

The massive health care law includes a new employer mandate and hundreds of billions of dollars in business taxes. It will require thousands of pages of new regulations.

Now, taken individually, people can argue the merits of a specific regulation in a particular area.

Taken collectively, the regulatory activity now underway is so overwhelming and beyond anything we have ever seen, that we risk moving this country away from a government of the people to a government of regulators.

This is a clear impediment to America’s job creators—except perhaps for those eager to create jobs in the federal government to police our economy and the American people.

It is vitally important that the administration, the Congress, the regulators, and the private sector examine what has been created. We must address the cumulative job-killing impact of over-regulation. 

Conclusion

Ladies and gentlemen, it is imperative that during these difficult times, business and government leaders work with each other, not against each other.

I know my message today has been strong and frank. But with so many Americans out of work and with little relief in sight, isn’t it time for some plain talk?

Our current economic direction is not working. It’s not helping those who need help the most—the workers and the job creators who are struggling to keep them employed.

The business community wants to help our economy and the country succeed. We don’t want to wait until after the election. We’re ready to work with anyone who believes, like we do, that creating economic growth and jobs is the nation’s highest priority. And we don’t care who gets the credit.

We are offering a workable roadmap to greater prosperity and more jobs. It is a plan that is rooted in the principles of American free enterprise—not a perfect system by any means, but the very best system ever devised to create jobs, hope, and opportunity.

So thank you again for coming. Thank you for your kind attention. Let’s enjoy and learn from the rest of the program. And then let’s go to work and create Jobs for America.