"A Better Deal”
Economic
Policy
Remarks
Governor
Tim
Pawlenty
June
7, 2011
Embargoed Until Delivery
How are you enjoying your recovery Summer? That’s what the President
said we were having. And that was last year.
Now --- gas is nearly $4 a gallon. Home prices are in the gutter.
Our healthcare system --- thanks to ObamaCare --- is more expensive.
And less efficient.
Unemployment’s back over 9%. Our national debt has skyrocketed. Our
budget deficit has grown worse. And the jobs and
manufacturing reports are grim.
If that was a recovery --- then our President needs to enter economic
rehab. And the American people need to stop his policies. Cold
turkey.
The addiction to spending must be brought to a halt. And we must have a
President who has a growth agenda. With pro-growth policies I
will.
The President wrongly thought the stimulus --- the bailouts --- and the
takeovers were the solution. He says they worked. They did not.
The President is satisfied with a second-rate American economy.
Produced by his third-rate policies. I’m not.
I promised to level with the American people. To look them in the
eye. And tell them the truth. I went to Iowa. And said we
need to phase out federal ethanol
subsidies. I went to Florida. And said we need to raise the
retirement age for the next generation. And means-test cost-of-living
adjustments for Social Security. I went to New York City. And
told Wall Street that the era of bailouts --- carve-outs --- and
handouts had to end. I’m willing to tell Americans the hard truth. And
I believe Americans
are ready to hear it.
But the truth about our economy isn’t hard at all. Markets work. Barack
Obama’s central planning doesn’t. America’s economy is not even
growing at 2% today. And
that’s what all projections say we can expect for the next decade.
That’s not acceptable. It’s not the American way. The recession
may have changed our economy. But it didn’t change our
character.
The United States is still home to the most dynamic and entrepreneurial
people in the world. They’re all around us. Ready to innovate ---
invest --- compete --- and create new businesses and jobs.
That will mean opportunities for everyone.
They’ve been discouraged and weighed down. By President Obama’s
big government. And heavy handed regulations. They deserve a better
deal. I’ll give them one. And here it is.
Let’s start with a big --- positive goal. Let’s grow the economy
by 5%, --- instead of the anemic 2% currently envisioned. Such a
national economic growth target will set our sights on a
positive future. And inspire the actions needed to
reach it. By the way --- 5% growth is not some pie-in-the-sky number.
We’ve done
it before. And with the right policies --- we can do it again.
Between 1983 and 1987 --- the Reagan recovery grew at 4.9%.
Between 1996 and 1999 ---- under President Bill Clinton and a
Republican Congress. The economy grew at more than 4.7%. In each case
millions of new jobs were created --- incomes rose --- and
unemployment fell to historic lows. The same can happen again.
Growing at 5% a year --- rather than the current level of 1.8% ---
would net us millions of new jobs. Trillions of dollars in new wealth.
Put us on a path to saving our entitlement programs. And balance the
federal budget.
How do we do it? In short --- we create more economic growth. By
creating more economic
freedom. We should start by overhauling the tax code. Its currently an
anti-growth --- nine thousand page monstrosity.
That’s chock full of special deals for special interests. It’s
main goal --- seems to be to generate campaign contributions. Not
jobs.
American businesses today pay the second highest tax rates in the
world. That’s a recipe for failure --- not adding jobs and economic
growth. We should cut the business tax rate by more than half. I
propose
reducing the current rate from 35% to 15%.
But our policies can’t just be about simply cutting rates.They must
also promote freedom and free markets. The tax code is littered with
special interest handouts --- carve-outs --- subsidies --- and
loopholes. That should be eliminated.
Such reform would not only help offset short-term revenue loss from the
rate cuts. But it would also reduce cronyism --- favoritism --- and
government manipulating markets for political purposes. Business
success should depend on winning over customers. Not winning
over Congressman. These changes will make American companies
immediately more
competitive. Investment from around the world will pour into our
suddenly inviting market. Creating desperately needed jobs --- and
opportunities.
But just changing business tax rates isn’t enough. That’s because we
know most job growth will come from small and medium size businesses.
Typically structured as S corps or LLCs.
And their owners are taxed under individual tax rates.
Not corporate tax rates.
So --- pro-job and pro-growth tax reform --- must include individual
tax reform as well. Small business owners and hard working
Americans need a better deal too. Small businesses should also have the
option of paying at the corporate rate.
On the individual rates we need a simpler --- fairer --- and flatter
tax system overall. I propose just two rates --- 10% --- and 25%. Under
my plan --- those who currently pay no income tax would stay at a
zero rate. After that --- the first
fifty-thousand dollars of income or one-hundred thousand for married
couples --- would be taxed at 10%.
Everything above that would be taxed at 25%. That’s
it.
A one-third cut in the bottom rate.To allow younger --- middle --- and
lower-income families to save and build wealth. And a 28%
cut in the top rate --- to spur investment and job creation.
In addition --- we should eliminate altogether the capital gains tax
--- interest income tax --- dividends tax --- and the death
tax.Government has no moral or economic basis to claim a second share
of the same income. When you deposit a dollar in your bank
account. Every
penny should be forevermore yours and your children’s.
Not the federal government’s.
Once we unleash the creative energy of America’s businesses ---
families --- and individuals --- as we did in the eighties and
nineties. A booming job market will reduce demand for
government assistance. And rising incomes will increase federal
revenues.
In the 1980s --- revenues increased by 99%. In the 1990s --- revenues
climbed high enough to balance the budget. 5% economic growth over 10
years would generate 3.8 trillion dollars in
new tax revenues. With that --- we would reduce
projected deficits by 40%. All before we made a
single budget cut.
The next part of my plan deals with that other 60%.
A balanced federal budget shouldn’t be a political sound bite. It
should be the law of the land.
As one of 49 governors operating with a balanced budget requirement.
I balanced 4 biennial budgets in my two terms as governor of
Minnesota.
And I know the only reason our legislature ever gave me a balanced
budget was because --- under our constitution --- they had to.
We have to face the truth --- Congress is addicted to spending.
And that’s true regardless of which party is in control.
The best way, and possibly the only way --- to ensure fiscal discipline
is to put the Congress in a spending straightjacket.
That’s why I support a constitutional amendment. That not only requires
a balanced federal budget. But also caps federal spending as a
percentage of our economy. Around the historical average of 18%
of GDP. Only a constitutional amendment has the power to bind
future Congresses
to keep their promises. Force decision-makers to finally make
decisions. And give statutory reforms a chance to succeed.
But passing a constitutional amendment will take awhile. And the crisis
that we face is here now. And requires immediate action.
I have and will continue to outline specific proposals to reduce
spending -- reform government --- and balance the budget.
As mentioned I’ve already begun that process.
With proposals regarding ethanol --- entitlements --- government
employees --- and Wall Street.
For example --- I’ve proposed capping and block-granting Medicaid to
the states. Raising the Social Security retirement age for the next
generation. And slowing the rate of growth in defense spending.
But we can’t trust Congress to do it. We cannot allow the
situation to risk being unresolved. And take down America’s
potential for growth and prosperity.
So --- I propose that Congress grant the President the temporary and
emergency authority. To freeze spending at current levels. And impound
up to 5% of Federal spending. Until such time as the budget is
balanced. If they won’t do it --- I will. As an
example --- cutting just 1% of overall federal spending for 6
consecutive years --- would balance the federal budget by 2017.
I know government can cut spending. Because I did it in Minnesota. I
cut state spending in real terms for the first time in our state’s
history. We did it with priority-based budgeting. We did it
by setting a record for vetoes. It took a government shutdown.
And a long government union
strike. But we got it done.
We didn’t close our schools. Or empty out our prisons. We cut spending
where it needed to be cut. We can do the same thing in Washington.
Impounding the money should only be a last resort. To force
policymakers to finally do their jobs. To cut what we don’t need. To
allow us to keep the things we need most.
There’s some obvious targets. We can start by applying what I call “The
Google Test.” If you can find a good or service on the Internet.
Then
the federal government probably doesn’t need to be doing it.
The post office --- the government printing office --- Amtrak ---
Fannie and Freddie were all built for a different time in our country.
When the private sector did not adequately provide
those services. That’s no longer the case.
What’s more --- the same competitive efficiency that revolutionized
America’s private sector over the last three decades --- should at long
last be applied to every corner of the federal bureaucracy as well.
It is no longer enough for government to go on a diet. Government needs
to hit the gym.
One efficiency program --- Lean Six Sigma --- already has a proven
track record. Using performance-based management practices to
streamline programs at the CIA and the Pentagon. And --- as I can
personally attest --- various agencies of the Minnesota state
government.
If we applied this approach throughout all federal agencies --- we
could save up to 20% in many programs.
Beyond all of this --- the real slog of the next administration will be
an unrelenting trench battle against the over-regulation. That’s
suffocating America’s entrepreneurial spirit.
Conservatives have long made the federal bureaucracy the butt of jokes.
And considering that some bureaucrat in Washington is actually in
charge of the strength of our showerheads --- the vigor of our toilet
flushes --- or the glow of our reading lamp --- it’s hard not to laugh.
But the fact is --- federal regulations will cost our economy 1.75
trillion dollars this year alone. It’s a hidden tax on
every American consumer. Built into the price of every good and service
in the economy.
And make no mistake. The current Administration is
hunting far bigger game than the incandescent light bulb.
Under ObamaCare’s individual and employer mandates --- America’s
private health care market is in intensive care. And the
prognosis is bad.
The Dodd-Frank financial regulation bill called for more than 200 new
rules. To be written by more than ten federal agencies. None of them
resolving the catastrophic scandal of Fannie Mae and Freddie Mac.
Months after the law went on the books ---- no one yet
knows exactly
what the law is.
And the Environmental Protection Agency --- is now regulating carbon
emissions. A policy rejected by Congress --- but putting millions
of jobs at risk.
If these policies sound as though they were written by people who have
spent no time outside government --- well --- you’re right. President
Obama’s political appointees have been notorious --- for their lack of
private sector experience.
This is unacceptable.
It"s fundamentally immoral --- to force working Americans to hold down
two or three real jobs. Just to afford the whims of “experts” ---
who’ve never had one.
We don’t need ObamaCare to create a one-size-fits-all ---
government-run health care program. We need Washington to
allow a personalized --- private health care market to flourish.
And meet the diverse needs of individual patients.
We don’t need Dodd-Frank to further intertwine Wall Street and
Pennsylvania Avenue. We need to privatize Fannie and Freddie. And
remove the threat --- that their political slush funds can never again
sink our economy.
And we don’t need the unelected officials at EPA --- to do what our
elected officials in Congress have rejected. We need less EPA
monitoring of our economy. And more monitoring of EPA’s affects on our
freedom.
I will require sunsetting of all federal regulations. Unless
specifically sustained by a vote of Congress. Under my
administration --- the NRLB will never tell an American company where
they can and cannot do business.
Just as the federal government must break down barriers within our
domestic markets. We must break down barriers in international
markets.
Congress should ratify completed free trade agreements with South Korea
--- and Colombia. And complete the agreement with Panama. We
should start new bilateral talks with our trading partners. To promote
our exports.
President Obama set a goal of doubling exports. Yet his policies have
prevented this. Mine will achieve it.
Finally --- even if we are successful in changing the way Washington
taxes --- spends --- and regulates. Many of the gains we’d realize
could be lost by the continued debasement of the dollar. As a result of
the loose-money policies of the Fed.
A strong dollar undergirds all that we do for economic growth.
Inflation cruelly undermines the life savings --- and life
prospects of every American.
If we want to give taxpayers --- retirees --- investors --- consumers
--- and entrepreneurs a better deal --- we have to maintain a strong
dollar.
No more quantitative easing. No more monetizing debt. No
more printing money with reckless abandon
The president and Congress have every incentive to maximize employment.
And a limited government --- streamlined tax system -- and
competitive marketplace will give the economy what it needs to do so.
We need monetary policy that is focused like a laser on curbing
inflation. And maintaining price stability. That should be
the role of the Fed. And nothing more.
America is facing grave challenges. And when times get tough --- some
politicians try to turn the American people against one-another.
Regrettably --- President Obama is a champion practitioner of class
warfare. Elected with a call for unity and hope. He’s spent
three years dividing
our nation. And fanning the flames of class envy and resentment. To
deflect attention from his own failures. And the economic hardship they
have visited on America.
But class warfare is not who we are.
I come from a working class background. I didn’t grow up with wealth.
But I’ve never resented those who have it.
The top ten percent of income earners already pay more than 70% of
income taxes. We could jack that up to 80 or 90% --- as President Obama
would have us do.
But that’s not the point.While it might make the class warfare
crusaders feel better. It wouldn’t create a single job in
America. And it would destroy many.
President Obama has had three years to turn things around.
And all we have to show for it is 3.7 trillion dollars more debt.
Nearly 2 million fewer jobs. A Congress that hasn’t passed a
budget in more than 2 years. A health care takeover he pretends we can
afford. And a fiscal crisis he pretends we can ignore.
We’ve tried President Obama’s way --- and it has only made the economy
worse. Other countries around the world have tried President Obama’s
way ---- and have met with ruinous results.
We have a choice. Just because we followed ancient Greece into
democracy. Doesn’t mean we’re doomed to follow modern Greece into
bankruptcy.
The United States has always chosen its own path --- culturally ---
politically --- and economically. For 235 years we’ve taken the
road less traveled. The road of
liberty. Of self-government. And free enterprise.
And it has made all the difference.
America is in trouble. There’s no question. But the frustration
and apprehension of the moment doesn’t define us. Where we are --- is
not who we are.
We are the United States of America. We settled the west and went to
the moon. We liberated billions
of good people from communism, fascism, and jihadism. We've lit the
lamp of freedom --- for the entire world to see.
The strength of our country is our people --- not our government.
Americans believe our country is exceptional. And they deserve a
President who does too.
We can fix our economy. Our people are ready to get back to work. We
just need to give them to tools to get there. And get the government
out of the way.
Thank you. And God bless America.
XXX
FOR IMMEDIATE RELEASE
June
7,
2011
CONTACT:
Alex
Conant
EXCERPTS
OF
PAWLENTY
ECONOMIC
ADDRESS
AT UNIVERSITY OF CHICAGO
As Prepared for Delivery
In
a speech at the University of Chicago on Tuesday, Governor Pawlenty
will share a "Better Deal” to get America’s economy growing and
creating jobs. By tackling Washington’s out-of-control spending and
replacing the tax code, Governor Pawlenty’s plan will unleash
private-sector growth, creating jobs, balancing the budget, encouraging
investment and rebuilding a flatter and fairer tax system for
individuals and businesses.
Governor
Pawlenty
on
setting
an
economic growth goal:
“The
United
States
is
still
home to the most dynamic and entrepreneurial
people in the world. They’re all around us, ready to
innovate, invest, compete, and create new businesses and
jobs. That will mean opportunities for everyone.
“They
have
been
discouraged
and
weighed down by President Obama’s big
government and heavy handed regulations. …
“Let’s
start
with
a
big,
positive goal. Let’s grow the
economy by five percent, instead of the anemic two percent envisioned
currently.
“Such
a
national
economic
growth
target will set our sights on a positive
future and inspire the actions needed to reach it. By
the way, five percent growth is not some pie-in-the-sky
number. We’ve done it before, and with the right policies,
we can do it again.”
Governor
Pawlenty
on business tax reform:
“American
businesses
today
pay
the
second highest tax rates in the
world. That’s a recipe for failure, not adding jobs and
economic growth.
“We
should
cut
the
business
tax rate by more than half. I
propose reducing the current rate from 35% to 15%. But our
policies can’t just be about simply cutting rates. They
must also promote freedom and free markets. The tax code is
littered with special interest handouts, carve-outs,subsidies, and
loopholes that should be eliminated.”
Governor
Pawlenty
on
individual
tax
reform:
“Just
changing
business
tax
rates
is not enough. That’s because we
know most job growth will come from small and medium size businesses --
typically structured as S corps or LLCs -- and their owners are taxed
under individual tax rates, not corporate tax rates.
“So,
pro-job
and
pro-growth
tax
reform must include individual tax
reform as well. Small business owners and hard working
Americans need a better deal too. Small businesses should also have the
option of paying at the corporate rate.
“On
the
individual
rates
we
need a simpler, fairer flatter tax system
overall. I propose just two rates: 10% and
25%. Under my plan, those who currently pay no income tax
would stay at a zero rate. After that, the first
$50,000 of income – or $100,000 for married couples – would be taxed at
10 percent.
“Everything
above
that
would
be
taxed at 25 percent. That’s
it. A one-third cut in the bottom rate to allow younger,
middle, and lower-income families to save andbuild
wealth. And a 28 percent cut in the top rate to spur
investment and job creation.
“In
addition,
we
should
eliminate
altogether the capital gains tax,
interest income tax, dividends tax, and the death tax. Government
has no moral or economic basis to claim a second share of the same
income. When you deposit a dollar in your bank account,
every penny should be forever more yours and your children’s, not the
federal government’s.”
Governor
Pawlenty
on Government Spending:
“I know government
can
cut
spending,
because
I did it in Minnesota. I cut state
spending in real terms for the first time in our state’s
history. We did it with priority-based budgeting. We did it
by setting a record for vetoes. It took a government shutdown and a
long government union strike, but we got it done. We didn’t
close our schools or empty out our prisons. We cut spending
where it needed to be cut. We can do the same thing in
Washington. …
“There
are
some
obvious
targets. We
can start by applying what I
call ‘The Google Test.’ If you can find a good or service on the
Internet, then the federal government probably doesn’t need to be doing
it. The post office, the government printing office, Amtrak,
Fannie and Freddie, were all built for a time in our country when the
private sector did not adequately provide those
products. That’s no longer the case.”
"So
I
propose
that
Congress
grant the President the temporary and emergency
authority to freeze spending at current levels, and impound up to 5% of
Federal spending until such time as the budget is balanced. If they
won’t do it…I will. As an example, cutting even 1% of overall
federal spending for six consecutive years would balance the federal
budget by 2017."
Governor
Pawlenty
on
Regulatory
Reform:
“Federal
regulations
will cost our economy $1.75 trillion this year alone, it’s
a hidden tax on every American consumer, built into the price of every
good and service in the economy. And make no mistake: the
current Administration is hunting far bigger game than the incandescent
light bulb.
“Under
ObamaCare’s
individual and employer mandates, America’s private health
care market is in intensive care, with a bad prognosis.
“The
Dodd-Frank
financial
regulation
bill
called for more than 200 new rules
to be written by more than ten federal agencies, none of them resolving
the catastrophic scandal of Fannie Mae and Freddie
Mac. Months after the law went on the books, no
one yet knows
exactly what the law is. …
“I
will
require
sunsetting
of
all federal regulations, unless specifically
sustained by a vote of Congress.”
Governor
Pawlenty
on
President
Obama's
Class Welfare:
“Regrettably, President Obama is a champion practitioner of class
warfare. Elected with a call for unity and hope, he has spent
three years dividing our nation, fanning the flames of class envy and
resentment to deflect attention from his own failures and the economic
hardship they have visited on America."
PRESS RELEASE from DNC
June 7, 2011
DNC
Chair Wasserman Schultz Reacts to Tim Pawlenty’s Plan to Slash Taxes
Paid by Wealthy and Corporations and Explode the Deficit and Debt
DNC Chair Says
Pawlenty’s Failed Fiscal Leadership as Governor of Minnesota Would be
Disastrous for Nation as a Whole
Washington,
DC – DNC Chair Debbie Wasserman Schultz released the following
statement in response to Tim Pawlenty’s plan to slash taxes for the
wealthiest Americans and corporate America and explode the national
debt and deficit:
“Tim
Pawlenty's plan to extend and expand the Bush tax cuts, deeply slashing
taxes paid by the wealthiest Americans and corporate America and
sending our deficit soaring even higher, is not an economic plan, it's
a prescription for economic disaster that would fall squarely on the
backs of seniors and working families. Mr. Pawlenty would take
the
Republican policies of the last decade, which exploded our deficit and
debt and nearly sank our economy into a second Great Depression, and
inject them with steroids.
“Of
course, perhaps no one should be surprised that Mr. Pawlenty, who left
the state of Minnesota with a massive budget deficit, is now proposing
to explode the deficit at the federal level. Tim Pawlenty left
the
people of Minnesota with a budget and economic nightmare. When
Tim
Pawlenty left the Governor’s office middle class families and small
business owners were paying higher property tax bills, college students
were paying more for tuition, and at the same time funding for special
education and services to seniors had been slashed. Even after
raising
taxes on hardworking Minnesotans and slashing vital services, Mr.
Pawlenty left the state saddled with an historic $6.2 billion projected
deficit.
“On
budget and fiscal matters Tim Pawlenty failed the people of Minnesota
and now he wants to impose such misguided and wrongheaded policies on
the rest of us. No thank you.”
###