FULL TEXT: Five Points for Resetting America’s Economic Foundation

John Boehner

Five Points for Resetting America’s Economic Foundation

Remarks by House Speaker John Boehner (R-OH)
As Prepared For Delivery
American Enterprise Institute, Washington, DC

September 18, 2014


I’m honored to be back at AEI. 

I last spoke here shortly before being elected Speaker of the House – a job I love but, looking back on it…I never expected to be doing this.

I always figured I’d be in the House for about ten years, then go back to Ohio and run my business or do something else.  But I’m still here and still on this journey for the same reason many of you are. 

Each of us was fortunate in that we had a chance to succeed, to realize our potential.  And our work isn’t finished until we pass that same chance on to our children.

I have some ideas for how we can do that, and today I’d like to share them with you. 

Let me start by picking up where I left off during my last visit.

That day, I talked about how we would run the House differently than it had been in the past under Democrats and Republicans.

And today I can report that the people’s House is more open and more transparent:

·         For the first time, legislative data is posted online in XML and in bulk. 

·         House proceedings and committee hearings are streamed online.  You can even bring your iPad to the floor (if you must.)

·         Earmarks – which once crashed into our coffers 10,000 at a time – are gone.

·         The cost of House operations has been reduced by 13.8 percent.  

·         And we’ve considered 33 bills under an open process.  There were zero open rules in the last Congress under the previous majority.

So we’re on the right track, and much of the credit goes to the people in the institution who do the heavy lifting.

All of this is about delivering what my friend Newt Gingrich calls a “21st century citizen-directed government,” one that is smaller, less costly, and more accountable to the people we serve.

And it’s why, despite being the minority party in Washington, Republicans have gotten some important things done.

·         We cut total federal spending for two years in a row.  That hadn’t happened since the Korean War. 

·         Completed major free trade agreements with Colombia, Panama, and South Korea. 

·         Made it easier to pay for college by tying student loan rates to the markets instead of politics.

·         Improved our job training system so more people can gain high-quality skills. 

·         And we protected 98 percent of Americans from permanent tax increases. 

There’s a lot more we can do, and our focus continues to be on what we call ‘American Solutions’ to help get people back to work, lower costs at home, and restore opportunity for all.

To that end, we’ve passed more than 350 bills that are pending in the United States Senate, including dozens to help create good-paying jobs and plant the seeds of economic growth. 

As we speak, the House is considering a big energy bill, and with good reason. 

We’ve got an energy boom going on in this country.

Oil and gas production is soaring everywhere from Colorado and North Dakota, to Texas and Louisiana, to the Youngstown corridor of Ohio, Pennsylvania, and West Virginia.

This boom is driving real growth.  In Youngstown, for example, unemployment is nearly half of what it was four years ago. 

This is a big deal. 

Except Americans don’t hear much about this boom, and that’s because it’s happening entirely on state and private lands, where the federal government has no say whatsoever. 

We take this approach to the national level – by doing things like approving the Keystone XL pipeline and opening more areas for exploration – and that’ll really get our economy humming.

But let’s not stop there.  I want us to think bigger than just moving the numbers. 

In my view, America’s energy boom presents a once-in-a-generation opportunity to reset our economy from the bottom up. 

Here’s what I mean.    

North America is on track to be energy independent in the next five years or so.   This is going to mean more growth, yes, but it’s also going to mean lower prices. 

We’re already paying anywhere from 30 to 50 percent less for electricity than many European countries. 

This disparity is going to grow, and as it grows, more manufacturers are going to look at moving their factories here.  They’ll have to.  You can’t produce anything without energy, especially electricity. 

Now, that’s what they’ll look at doing, but will they follow through?

That’s our job, to make sure that happens. 

The problem is, Washington’s approach is so top-down, and the bureaucracy so lumbering, that the government is keeping us from where we need to be.

Look at the state of things: flat wages, higher prices, a six-year slog to regain the jobs lost during the recession, and millions still asking, ‘where are the jobs?’

So we can do this the Washington way, move around some dirt, see what happens.

Or we can lay a solid foundation for growth and mobility.  Not pick one thing over the other, but do all we can to reap the benefits of this boom.  Bring these good-paying jobs home, get our workers off the sidelines.  Build a culture of hard work and responsibility around them.  Make America the best place to work, save and invest.

It can be done.  And there are five things that I think we need to do to make it happen. 

First thing is, fix our tax code.

You’ve heard a lot lately about corporate inversions.  Well, inversions are really just visible symptoms of a much deeper problem: our tax code is terrible.  No one understands it, certainly not the IRS.

People pay an accountant hundreds of dollars in the hopes of paying less to the feds.  They have to, because over the years thousands of changes have been made to the tax code, largely for the benefit of the well-connected, who happily take their share while the middle class remains overtaxed. 

So all this talk about inversions is just making the problem smaller.  It’s fussing over a divot when the road is loaded with potholes.

Let’s fix the whole tax code.  Make it pro-growth and pro-family.  Bring down the rates for every American, clear out all the loopholes, allow people to do their taxes on two – yes, two – sheets of paper.

(See, I can already feel the blood pressure in the room dropping.)

We do this, we get rid of one of the biggest reasons jobs go overseas, and make it easier for families to do everything from build a house to save for college.

Second, we have to solve our spending problem.

For 53 of the last 60 years, we’ve spent more money than we’ve brought in. 

This is where people get on me for comparing apples to oranges, but hear me out. 

Would you do this in your home? No.

Could you do this in your business and live to tell? No way.

And we can’t do it as a country either.  Not just because it’s bad for our economy.  It is stealing from our kids and grandkids, robbing them of benefits they’ll never see and leaving them with burdens that are nearly impossible to repay.

The question isn’t what’s driving this debt – it’s who.  It’s Baby Boomers like me retiring at the rate of 10,000 a day, 70,000 a week, more than 3.5 million every year.

And this is only year four of this 20-year demographic bubble in which Baby Boomers are retiring.

Our entitlement programs weren’t designed to deal with all of us retiring at once, and they certainly weren’t designed for us to live to well past 80.

But we don’t need to throw these programs away.  We need to put them on a more sustainable path, which we can do without making radical changes. 

Third, we have to reform our legal system.

We’ve gotten to a point in America where litigation has become a first resort instead of a last. 

The costs are staggering: Americans are spending more per person on litigation than just about any other country, and it’s not even close.  Our liability costs are more than 2.5 times the average level of Eurozone economies.  Not something to be proud of.

These costs don’t just show up in higher premiums.  Doctors have to charge more.  Businesses have to charge more.  It’s a stealth tax driving up the cost of all our goods and services. 

Our system isn’t just costly; it’s inefficient.  According to one study, victims are generally receiving less than half of every dollar paid out by defendants. 

There has to be a better way.  I’m all for taking care of people who have been injured, but we ought to establish reasonable limits on lawsuits and compensation.

Fourth, we have to rein in our regulatory system. 

The way the federal government hands down regulations is coercive, combative, and very expensive. 

Take the Dodd-Frank law, with its 849 pages and $21.8 billion in compliance costs.

The whole point of all this, we were told, was to end the bailouts, end ‘too big to fail.’   Well, not only has it failed to do that, but those compliance costs are indiscriminately hitting small community banks and credit unions.

For those smaller banks, their bread-and-butter is lending to entrepreneurs and small businesses.  But now, you’ve got more uncertainty and more money going into compliance.  And what happens? The cost of borrowing goes up, and access to credit goes down.  It’s the last thing Main Street needs right now.

Other countries have a more pragmatic process, where you focus on what’s truly necessary and feasible.  The result is, you have fewer regulations, and the ones you have are more important and more easily implemented.

Now, even if we were to do all four of these things, we still wouldn’t be maximizing our potential.

So, the fifth thing is, we have to improve our education system. 

Aside from Arthur Brooks, you won’t meet a more glass-half-full guy than me.  But these are, what I consider, some depressing figures:

·         Last year, about one out of every five students didn’t graduate high school.  One in five.

·         And among those who do graduate, one in five need remedial courses in college. 

·         And that’s because, according to the Nation’s Report Card, only 38 percent of 12th-graders performed at or above proficient in reading, and only 26 percent performed at or above proficient in math.  

We are not educating enough of our kids – it’s that simple.

Now, one thing No Child Left Behind did was require every state to adopt standards and assessments of progress.  That means we can track whether children are learning.

That’s the good news.  The bad news is that we know too many children still aren’t learning.  And many aren’t learning because they’re sentenced to attend a struggling school.

That’s why we created the first federally-funded private school choice initiative in America, the D.C. Opportunity Scholarship Program. 

And I’ll tell you what: it is succeeding beyond even our highest expectations. 97 percent graduating from high school.  A 92 percent approval rating among parents. 

Why wouldn’t we go ahead and start expanding this initiative to the rest of the country?

Let’s give more poor children and their parents a chance to find the better schools they need and deserve.

So those are the five things. 

We do these five things in a meaningful way, we can reset the foundation of our economy for the next two or three generations.  Provide a reliable stream of good-paying jobs.  More stability and security, straight on through retirement.  And more opportunities for every American to get ahead, not just get by.

Ladies and gentlemen, there’s one more reason to do this – just as, if not more important than the rest.

When fall comes around, I’m reminded of how, after the First and Second World Wars, many cities and universities built memorial stadiums in honor of the fallen. 

One of the classics is the Navy-Marine Corps Memorial Stadium in Annapolis.  If you’ve never been, on the façade that surrounds the football field, the great battles are listed: Guadalcanal, Midway, Sicily, Iwo Jima.

The story goes that a William Mary player once looked at all the names and said, “Man, these guys have a tough schedule!”

Well, America has a tough schedule in front of us.  We cannot avoid that.  Nor should we try.

America is not merely obligated to lead.  We are again called to lead.  And we are driven to serve in the same spirit in which our parents and grandparents built those living memorials – with humility and a desire to leave something that outlasts us.

For what lies ahead the world needs a strong America, and that means we need a strong economy.  One in which all our people can strive to fulfill their God-given potential…and show there is no greater enterprise than free enterprise, and that we will never settle for the safe route. 

We will lead for freedom in every sense of that word.

Today I have tried to lay out a path to do this that speaks to both parties and to all Americans.  Because I trust in them.  I know they can do anything.  And I know their labors will justify our faith.

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