The Economy
Floor Speech
Mr. GRASSLEY. Mr. President, it seems the President of the United States has finally acknowledged that the economy is in a terrible state and there is nothing he can do about it. So, rather than offer new ideas to grow the economy, the President has now shifted into blame mode. I recognize that the slow economic growth and high levels of unemployment are having a significant impact on the middle class. But rather than listen to political rhetoric and witness finger pointing by President Obama, the unemployed would likely prefer ideas, ideas on how to turn this economy around.
I presume President Obama aspired to lead the country because he believed he had the vision and the ability to lead to a more prosperous nation. But beyond the vision, a President also needs a plan and the leadership to put that vision into place. Where is that leadership? During the past 3 years, we witnessed President Obama's theory on economic stimulus. We saw a massive expansion of government and deficit spending. More than $800 billion was spent on a failed economic stimulus bill that was supposed to keep unemployment below 8 percent. But it did not. Government spending in the process has reached an unprecedented level. Today, the size of government, if you combine local, State, and Federal, is 40 percent of our gross national product. One hundred years ago when Teddy Roosevelt delivered his speech in Kansas, it was 8 percent. I refer to Teddy Roosevelt and the speech in Kansas because the President of the United States now tried to duplicate that speech 100 years later.
Today, government consumes 40 percent of the entire economy. According to economic policies of President Obama, government needs to grow even bigger to help our economy, and in the process there is a goal to use government to redistribute wealth. If government gets a little bit bigger, the argument goes, and if it gets a little more involved, and particularly if it gets involved in every facet of our economy and our lives, that will surely increase economic prosperity of all Americans. Right?
Of course not. All of this has led to taxes and deficit spending that crowd out private investment that could grow the economy and, in the process, create jobs. Government doesn't create self-sustaining jobs; government only creates government jobs. The private sector creates jobs. It is the responsibility of the government to create an environment that leads to job growth. It does this by instituting the rule of law, property rights, the patent system, among others--and there are a lot of others I ought to add to it. Government sets the tone.
Remember, government consumes well, it does not create well. Through economic freedom, entrepreneurs are free to innovate and prosper. This economic success leads to higher standards of living and a better quality of
life. Importantly, these gains do not come then at the expense of others. Contrary to what some would have you believe, business growth does not have to come at the cost of others. In other words, it is not a zero sum game.
In fact, business success and economic growth lifts all boats through employment gains, higher wages, and value to consumers, among a lot of other things that could be mentioned.
There are some who believe that individual success cannot be achieved without government involvement or intervention. What is more, they believe an individual's success must mean that someone else has been deprived or they believe if someone else is successful, the success was achieved collectively only with the help of government or others in society. This line of thinking concludes that government and society is, therefore, entitled to some of those achievements.
President Obama's recent speech in Kansas provides great insight into his economic theory. He clearly believes government should be involved at every level of individual and business activity. The President says that hard-working Americans should be rewarded for their achievements. However, his economic vision demonstrates his belief that individual success is due to society, not because of hard work or individual effort. This line of thinking is in stark contradiction to our country's founding principles that government exists to allow for the individual to achieve success and the pursuit of happiness.
The idea of government intervention runs contrary to our founding principles of individual and economic freedom. Government exists to serve the needs of people rather than people serving the needs of their government. There are some who believe government is the only creator of economic prosperity, but if others have achieved success, they must be, by default, the cause of other people's hardships. This type of class warfare demagoguery is harmful to our country and our country's future and our people's future, and it has the end result of dividing America. It creates envy, hatred, and resentment toward those who have worked hard, played by the rules, and achieved success. This divisive rhetoric seeks to put blame on the successful for the hardships of those who have been hurt during this recession.
Most Americans don't support President Obama's divisive vision and rhetoric. The American people still believe if you work hard and play by the rules, you can be successful and you can flourish. I doubt the majority of Americans believe it is the goal of government to intervene in this process. In fact, most Americans would be happy to have the government get out of the way. Most Americans believe in individual responsibility and liberty, including freedom to succeed and freedom to fail.
It appears President Obama's commitment to these fundamental freedoms is less sure. Based on his recent speech in Kansas, it seems the Federal Government is the answer to all of America's problems. According to the President, if we tax the wealthy, ensure they pay their fair share, we can get our economy back on the right track. President Obama wants the American people to believe higher taxes on job creators will lead to economic prosperity and create jobs. This is contrary to what Republicans know to be true. It is also contrary to the vision President John F. Kennedy knew to be true when in the 1963 tax bill he reduced the marginal tax rates very dramatically. President John F. Kennedy recognized the economic benefits of lowering taxes, so in his State of the Union Address on January 14, 1963, President Kennedy spoke of the need to increase economic growth and job creation. He stated:
To achieve these greater gains, one step, above all, is essential--the enactment this year of a substantial reduction and revision in the Federal income taxes ..... A net reduction in tax liabilities ..... will increase the purchasing power of American families and business enterprise in every tax bracket.
He further stated:
It will, in addition, encourage the addition and risk-taking on which our free enterprise system depends--induce more investment, production, and capacity use ..... and reinforce the American principle of additional reward for additional effort.
It is worth repeating. President Kennedy pushed for lowering Federal income taxes to encourage initiative and risk-taking to induce investment, production, and economic growth. President Kennedy recognized and believed in the American principle of additional reward for additional effort.
It seems to me, from the speeches that have been made recently, that our President--meaning President Obama--disagrees. It seems to me that he argues innovators and job creators should be subjected to punitive tax increases for being successful. He seems to believe economic growth will come by confiscating the wealth of job creators and sending that money to Washington, and I could not disagree more.
For Americans to prosper, we must first reduce the size of government. This year the Federal Government will spend about 24 percent of our gross domestic product. This type of spending has led to annual deficits above $1 trillion for the past 3 years. The total debt stands at over $15 trillion. This is 100 percent of our gross domestic product. The size of government, the size of deficits, the size of debt, and the size of interest payments are unsustainable over the long haul. We must reverse course.
Second, we must work to reform the Tax Code to provide certainty and predictability. Nearly every day our President is on the campaign trail talking about tax increases. It is no wonder our job creators, particularly small businesses, are reluctant to make business decisions or investments in this climate, which decisions we would hope if they would make them would obviously lead to a great deal of job creation in the private sector. This country doesn't need more taxes, we need more taxpayers, and the way to get more taxpayers is to have more people working.
The President's threat of higher taxes is directly inhibiting job growth and economic expansion. It is time for President Obama to recognize that with 13 million Americans unemployed and anemic economic growth, tax increases will harm, not help, economic recovery.
Finally, we had a recent Gallup poll finding that compliance with government regulations is the single biggest issue facing small business owners today. You might think we would emphasize the Fortune 500 big corporations when it comes to creating jobs, but we know that 70 percent of the new jobs in America are created by small business, so we ought to be concentrating on what small business people are telling us about the economy not turning around.
Small business owners, when it comes from the standpoint of regulations, need to spend less time and money making sure they comply with burdensome and needless Washington regulations. Those valuable resources should be spent
growing their business, hiring more workers, and as a result growing our economy. We must halt the Federal Government regulations binge. For many of these new regulations, the cost of compliance outweighs the public benefit. They are acting like a wet blanket on our economy. There should be a moratorium on new regulations.
I want to give you a perfect example that is now an issue before the Congress, the Keystone XL Pipeline. At a time of high unemployment and energy costs, the Federal Government should not be standing in the way of private investment that will create jobs and increase our energy supply. It is unconscionable that the largest private shovel-ready construction project is being delayed by President Obama's decision to override two different studies by the State Department and that there was no negative environmental impact. It seems the only jobs President Obama is interested in creating are government jobs or government-subsidized jobs. The unfounded delay should be ended and the pipeline project should move ahead.
This situation typifies the Obama philosophy that the free market and intelligent Americans are incapable of making informed decisions. The argument we hear is that Americans are not smart enough to know we need solar energy rather than fossil fuels. So our big government caretaker uses 1/2 billion in taxpayer dollars to support a solar company while simultaneously blocking an entirely private enterprise from developing an oil pipeline that will make us much more energy independent. We have seen how the decision by the government elite to support Solyndra has worked out. It was a complete failure.
It is time we got out of the way of the Keystone Pipeline. I hope the American people will dismiss the economic theories and visions of our President as he seeks to divide our country. I believe we can achieve a prosperous future by empowering individuals rather than our Federal Government. Americans are smart enough to put their trust in themselves and their neighbors, not in bigger government. It is time to end the political blame game and divisive rhetoric and, instead, work on genuine and real policies that will create economic jobs and, more importantly, economic growth that is going to help all Americans; in other words, expanding the economy because this does not have to be a zero sum gain. We can have more for more people, and if we don't have more for more people, we are going to have less for more people and everybody is going to lose out.
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