The Elections, America’s Challenges, and The Road to Recovery, Remarks by Thomas J. Donohue President and CEO, U.S. Chamber of Commerce
Bolton Landing, New York
As Prepared for Delivery
Introduction
Thank you very much and good evening ladies and gentlemen.
Paul, thank you for that kind introduction.
Our organizations rise or fall on volunteer leaders like Paul Speranza. Without their passion, energy, and involvement we couldn’t be successful.
The U.S. Chamber has benefitted from Paul’s leadership as a former chairman and as an active board member. And I know he’s making a difference for your group as well.
I also want to thank Heather [Bicetti] for being such a gracious host.
In case you hadn’t noticed, Heather is a rising star in this state and in the national business community.
She knows policy, process, and—most importantly—the right people. She’s doing a great job.
Our organizations have long been good partners—and Heather is helping to take that partnership to the next level. She’s deeply involved in our political program, serves on our Committee of 100, and is a leading proponent for developing New York’s energy resources. More on that in a minute.
Tonight I’ve been asked to say a few words about the challenges facing the country, the elections, and how we get out of this mess.
All in 15 minutes! I want to save some time to hear from you.
The Challenges
Let me start by trying to take stock of where we are right now.
Our economy is stuck in first gear. We’ve had 43 months of unemployment above 8%. 20 million Americans are either unemployed, underemployed, or given up looking for work.
The recovery from the financial crisis is proving to be almost as bad as the crisis itself. In fact, median family income has declined during the recovery.
Today our government borrows 40 cents of every dollar we spend. We’ve added $5 trillion in debt in just four years.
Our Federal Reserve is gobbling up U.S. debt, mortgages, and other assets at a dizzying pace. It’s balance sheet has ballooned by trillions of dollars. A lot of that money is being held as reserves by banks, but what happens if it’s unleashed?
Our economy is overregulated, our workforce is undereducated, and our opportunities to sell American goods and services is truncated as the world economy slows.
And on top of all of that, we’re teetering on the precipice of a fiscal cliff. If Congress and the president don’t act by the end of the year, we face the largest tax hike in American history and more than $1 trillion in indiscriminate cuts under so-called “sequestration.”
Can anyone say “double dip recession”?
Too many regulations, too few jobs, high taxes, and low growth … that should sound familiar to New Yorkers because that also describes your state economy to a “T.”
The Opportunities
So we’ve got some serious challenges. Even some daunting ones.
But I didn’t run through this litany of statistics because I think it’s time for us to collect our marbles and go home and cry in our soup.
No, now is the time to buck up. Now is the time to stop kicking the can down the road because we’re almost out of road. Now is the time for leadership.
Many Americans seem to be giving up on the American Dream … the belief that each generation will be better off than the next.
Many are beginning to accept low growth and high joblessness as the “new normal.”
And sadly, many think America’s best days are behind her.
Well that’s a bunch of bunk! I don’t buy it. Not for a minute.
The only ones who can defeat America are Americans themselves. We control our own destiny.
So how do we get back on track, rev up our economic engine, and get people working again?
I hate to say it, but it ain’t rocket science.
Let’s get back to basics. Let’s get back to common sense.
Getting Our Fiscal House in Order
Commons sense tells us that when you find yourself in a hole, stop digging.
For America, that hole is a massive debt, out-of-control-spending, a broken tax system, and unsustainable entitlement programs.
Put simply, we need to get our fiscal house in order. We need to stop digging ourselves a deeper hole through reckless and unsustainable spending. That involves both short- and long-term challenges.
Our immediate crisis is the fiscal cliff. That involves expiration of the Bush tax cuts and a number of other important tax provisions. Add them all up and you get the largest tax increase in history. Exactly the wrong medicine for our shaky economy. That would make the hole deeper.
It also involves $1.2 trillion in automatic cuts that will cut deeply into defense spending. Hundreds of thousands of jobs are at stake.
What happens if we go over the cliff? The Congressional Budget Office says the economy will plunge back into recession and unemployment will climb back above 9%.
So we’re telling Congress and the president to extend the 2001 and 2003 tax cuts right now. Don’t wait for a lame duck Congress after the election. Don’t wait until next year. Do it now.
That would be a tremendous boost of confidence to businesses across the country.
And while we recognize the importance of reducing spending, let’s find a smarter way to do it than through the meat-ax cuts of sequestration—which we’re designed to be so onerous and draconian that no one in their right mind would implement them.
The longer-term challenge is to cut a Big Deal on spending and entitlement and tax reform. And we need to lay the groundwork for such a deal right now.
Our entitlement programs are unsustainable. If we don’t make sensible adjustments, the programs will go bankrupt—and so will the nation. No one can dispute that.
The sooner we make commonsense reforms the less painful the changes will be. And, we’ll be able to preserve these programs for future generations.
Our tax code is a joke. It’s like a millstone around the neck of the economy. It’s complex, anti-growth, and anti-savings.
We need to broaden the base, lower rates, close loopholes, and simplify compliance. That would be an enormous boon to our economy and dramatically improve our global competitiveness.
Everyone will find something to be unhappy about in a Big Deal, including the Chamber and including most of you.
But if we can address these big challenges we can help revitalize our economy and strengthen our country’s future.
In fact, we are one Big Deal away from ensuring America’s economic preeminence.
Regulations
Another piece of common sense … don’t choke the goose that lays the golden egg.
That goose is America’s private sector and the golden egg is economic growth and jobs.
Today employers are paralyzed by uncertainty. They are being crushed under a mountain of counterproductive and burdensome regulations.
In fact, they are sitting on $2 trillion in cash. Why?
Because they don’t know what their health care costs are going to be under Obamacare. They don’t know the unintended consequences of government control over one-sixth of our economy.
They don’t know the cost of capital. The Dodd-Frank law is like a Rube Goldberg device—no one knows exactly how it’s going to work.
We do know it will add layers and layers of new regulations on top of old ones, while failing to address the underlying problems of our capital markets and their competitiveness.
And I won’t even get started on the tsunami of regulations coming from EPA, OSHA, and the whole alphabet soup of government agencies.
We need to bring some certainty to businesses so they can feel confident to invest and hire … so they can put some of that $2 trillion to work.
So let’s fix the worst excesses of the health care law and Dodd-Frank.
Let’s implement regulatory reform to ensure rules are based on sound science, quality data, and provide more benefit than cost.
And there’s another major factor causing uncertainty that we don’t talk about enough—the demonization of business and successful people by some of our elected leaders.
When you take away credit for someone’s success ... when you mock personal ambition and hard work … when you punish success while lionizing government you’re going to get a lot less of something this country badly needs—free enterprise.
Free enterprise has been the cornerstone of America’s incredible economic might. The day we begin undermining it will be the day we truly begin to decline as a nation.
So let’s boost certainty … Let’s weed out all the regulatory red tape. Let’s reward the risk takers, the entrepreneurs, and the business people who create ideas, products, and services.
If we do that, I think we’ll see a dramatic increase in business confidence, more business investment, and more jobs.
Energy
Common sense also tells us to seize the opportunities right in front of our faces.
None is more obvious than energy.
Developing energy off our coasts would have huge economic and national security benefits for the United States—and so would developing our onshore resources and strengthening our energy infrastructure. And we can do so in an environmentally friendly manner.
Increasing domestic production would fuel growth at home, create jobs, fill government coffers, and reduce our reliance on foreign sources.
Now is the time to seize this opportunity. We’d be dumb not to.
The United States is sitting on huge supplies of energy on its land and off its coasts. We can access it through methods like hydraulic fracturing and ultra-deep drilling more cheaply, safely, and efficiently than ever before.
That’s especially true right here in New York with the Marcellus Shale in the southern tier of the state.
The development of the Marcellus Shale has already created hundreds of thousands of jobs and billions of dollars in government revenue in other states.
In neighboring Pennsylvania, for example, shale has created 240,000 jobs and generated $1.1 billion in tax revenue.
In Ohio, 65,000 jobs have been created and $3 billion in tax revenue.
New York threatens to be left behind.
With 9% unemployment and a $2 billion deficit, the choice for New York should be obvious—it should allow shale energy development in the southern portion of the state.
No one objects to a thorough analysis of potential safety concerns. That’s prudent. But I would suggest the state has had more than enough time.
Any objective analysis would have to conclude that the production of shale will put people back to work; provide money for schools, public safety, and infrastructure; and make New York and America more energy secure.
And, that it can be done safely.
I hope New York can put politics aside and reach the right conclusion ... and very soon!
Conclusion—Fighting for What We Believe In
Those are a few of the commonsense steps we can take to revitalize our economy, restore business confidence, put people back to work, and ensure America’s long-term success.
There are many others—such as pursuing new free trade agreements, rebuilding our infrastructure, and reforming our K-12 education system, to name a few. I hope I get some questions on those topics.
But I want to conclude by trying to answer the toughest question of all—how do we get it done?
The short answer is we have to fight for it. We have to make the best arguments, defend our values, and get into the game.
That means supporting organizations like this and the U.S. Chamber. It means establishing relationships with your elected officials and letting them know your views.
It means taking a public stand, which can be uncomfortable for many companies. We understand that.
And it means getting involved in the elections. One of the most important things we can do to advance our agenda of American renewal is to elect more people who share our views.
I applaud the Business Council for its courageous involvement in the elections and for your strong support of the Chamber’s political program.
We’ve launched our biggest effort to date with the goal of expanding our numbers in the House and improving our position in the Senate.
We don’t do presidential politics, but we’re not going to be shy about weighing in on the candidates’ proposals and policies and how they will impact the business community and the economy.
Look, the bottom line is that if you believe in the commonsense steps I’ve outlined tonight … if you believe free enterprise is essential to America’s success … if you believe the private sector has an indispensable role in jobs and economic growth … then I hope you’ll make the decision to get involved and stay involved.
Because the fact is if we don’t fight for what we believe, no one else will. And there’s just too much at stake today to sit on the sidelines.
Thank you for the opportunity to be here tonight and I look forward to your thoughts and questions.
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