U.S. Chamber of Commerce - America at the Crossroads

Outlook 2008 - The State of American Business Conference
National Chamber Foundation, Washington, D.C.
Tuesday, January 8, 2008

I'd like to thank the National Chamber Foundation and Congressional Quarterly for teaming up to sponsor this annual event.

And thanks to all of you. Not only for being here today, but for everything you do all year round, with the Chamber and on your own, to represent the innovative industries that make up the true engine of growth and opportunity in our society.

Today, I'd like to talk about how we Americans can take charge of our future - our shared destiny. I want to talk about how, working together, we can build a globally competitive economy that creates promising opportunities tomorrow and greater financial security today for every American.

Our nation is at a crossroads. These are times of great consequence - and opportunity. The American people know it - and their political leaders here in Washington need to capitalize on it.

We appreciate our economy's enduring resilience. But we're not satisfied - nor should we be. Prosperity always begins where the status quo ends. We must always look to the future for innovative ways to do different and better things.

In a time of economic weakness and uncertainty, many Americans are worried about their jobs and long term financial security. They are worried about the rising costs of gasoline, access to affordable health care, college tuition, and taxes. They are worried about what lies ahead for their children and grandchildren. And if they are worried, we should be worried.

As we meet here today, the country's future is clouded by Washington's failure to seriously address the core competitive challenges that will drive growth, opportunity, and prosperity in the 21st century. The world has changed - and so too must our policies and practices.

The Chamber - along with many of you - has been actively speaking out on these challenges for years. Progress has been made on some issues - but overall, a culture of complacency and neglect has defined our national response. And that is not the America we know. The America we know has a proud tradition of greeting hard challenges with hard work. The America we know overcomes obstacles with common sense and decisive action.

We have a public education system with a dismal drop-out rate of 30 percent. In the African-American and Hispanic communities, it's more than 50 percent. That is unacceptable.

We have 77 million baby boomers on the verge of retirement, severe shortages of scientists, engineers and technology workers, and crops rotting in the fields - because there's no one available to harvest them. Yet Congress has failed to pass comprehensive immigration reform. That is unacceptable.

We have a physical infrastructure that is rapidly running out of capacity to efficiently move people, freight, fuel, power, and information. The costs of this negligence can be measured not only in pollution, lost productivity and jobs -- but in the loss of innocent lives. That is unacceptable.

We have an approach to energy that is a cross between stupidity and hypocrisy. Stupidity - because we are dangerously dependent on foreign sources - and restrictive policies have driven prices through the roof for families and businesses. Hypocrisy - because our leaders condemn these prices and then continue to impose restrictions that discourage the production of clean, diverse domestic energy. And that is unacceptable.

We have a legal system that can be described in one word - broken. We spend over a quarter of a trillion dollars a year on endless frivolous lawsuits. Honest businesses are being targeted in what amounts to nothing less than legalized extortion. That is unacceptable.

We have crucial capital markets that drive growth and underpin the life savings of millions of Americans. Yet they are being crippled by excessive taxation, regulation and litigation. As a result, we are watching needed capital fly away across the oceans. That is unacceptable.

Nearly one-third of our jobs and economic activity are tied to global trade. Ninety-five percent of our customers live outside the United States. Yet today we are being told that there should be no more trade agreements to open markets for American workers and businesses. It doesn't make any sense - and it's unacceptable.

We have a piracy epidemic that allows $250 billion dollars of our products to be stolen at home and abroad. The result? 750,000 American jobs lost. That's unacceptable.

And while some of our European competitors are learning from the mistakes of their past, we seem intent on repeating our own mistakes - and even some of theirs! They are replacing rigid workplace rules with more freedom and flexibility. They are reducing tax rates to be more competitive and innovative.

Yet in our country, many in Congress are going right along with a union agenda that would impose EU-style handicaps on our workers and businesses.

We have seen tax hikes proposed that add up to trillions of dollars. If you are looking for a perfect recipe for that recession everyone is talking about, that's it -right there!

There's also a huge bill coming due in unmet health, pension, and entitlement costs. Yet our political leaders continue to dither and delay - and it's unacceptable.

Ladies and gentlemen, this is no time to sit idly by and hope for the best, or to look for an invisible hand to intervene. This is a time for bold action, real reform, and meaningful change.

New global competitors are nipping at our heels. Old competitors are reinventing themselves for the future. We must not allow our nation's economic leadership to slip away, and with it, the promise of the American Dream. When it comes to the global economy, the only position the United States of America should accept is number one.

So let me turn now to the opportunity that lies before us as we sit at this American crossroads.

Leading by established principles, the Chamber will seek to focus the nation's attention on the need for change and decisive action to reignite sustained economic growth. But not just any change, and not just any action.

Standing at the crossroads, our nation can travel down two paths. One path would take us back to where we've been before - back to the old, discredited idea that government can solve every problem and soothe every anxiety by raising a tax, imposing a regulation, or creating a new bureaucracy. On this path, we would put our faith in Washington and its unaccountable bureaucrats to eliminate all risk and uncertainty in life.

On this path, we look at the problems facing us square in the eye -- and we use American know-how, common sense, technology, and free market principles to solve them. On this path, we recognize that we live in a competitive global economy. Yet we are not afraid or timid. We keep our doors open for business, we stay engaged, we play in the game, we compete, and we win.

We need to start at the beginning - with our children. Every child deserves a quality education. No more excuses. No more delays. No more tiptoeing around entrenched bureaucracies and unions.

Teachers, principals, and administrators should be empowered to reform their schools. They should be paid for performance. And they should be held accountable for results. And, of course, the No Child Left Behind Act should be strengthened and reauthorized. And it should extend to the high school grades.

We must understand that in the 21st century, the race for human talent will define the global winners and losers more than any other factor.

America's first priority must be to fully educate, train, and retrain our own people throughout their careers.

But we must still welcome law-abiding, hard-working immigrants to our shores. We need their drive and their dedication. We need the workers! It's time for comprehensive immigration reform that protects our borders and secures the talent we must have to run a growing economy.

America faces an energy crisis today. We can see it in the threats to our national security. We can see it in $100 per barrel oil. And we feel it every time we fill up the tank or pay the electric bill.

Energy demand in our country will grow by one-third between now and 2030 - even with gains in efficiency. It's growing at least twice as fast across the globe.

Our nation should be a leader in energy innovation - investing in renewable energy and alternative fuels. We need to look at ways to continue to increase efficiency. Wasting energy is wrong at any price.

But make no mistake - we will still rely on traditional sources such as coal, oil, and gas for years to come. We must tap more of America's tremendous domestic reserves of these essential resources. And because these fuels emit greenhouse gases, we must also develop technologies that enable their use while also limiting carbon emissions. Furthermore, the expansion of nuclear energy has to be part of any strategy to address both our energy needs and climate change.

One-third of our major roads are in poor or mediocre condition, and a quarter of our bridges are structurally deficient or functionally obsolete.

The U.S. aviation system is incapable of efficiently handling the current passenger load, much less the 1 billion passengers expected in just 7 years. Our ports, inland waterways, and railroads also need serious attention and new capital. Something must be done-now.

This is a story that has yet to be fully or effectively told to the American people -- and the Chamber intends to tell it.

Americans need to know that there are hundreds of billions of dollars in private investment ready to be spent on transportation, energy, and broadband infrastructure. All we have to do is get the bureaucrats, regulators, and lawyers out of the way.

Think of all the jobs we could create while improving productivity, cleaning the air, and saving lives!

We've got to spend public infrastructure money more wisely, stop excessive Congressional earmarks, and end the outrageous practice of diverting dedicated funds to other programs. Yet even with these reforms, Congress must soon consider an increase in the federal gasoline user fee, which has not been raised in 15 years. Or it can consider a carbon fee, with the proceeds dedicated primarily to infrastructure.

We also need to stop the frivolous lawsuits that are crippling our legal system and sucking the vitality out of American entrepreneurs.

The Chamber's Institute for Legal Reform has helped make major improvements in the legal environment across the nation. But there is much left to do.

We've got to fight trial lawyer attacks on federal preemption and arbitration, and stop their abusive shakedown tactics. We must continue to expose mass tort medical screenings - where lawyers team up with doctors and file suits on behalf of many patients who were never examined and aren't even sick.

State by state, citizens must take back their courts and legal systems from a small group of trial lawyers who have hijacked justice for their own gain.

Hardworking American families depend on thriving markets to grow their life savings and prepare for the future. Every company, whether big or small, public or private, needs capital to run its business. This is why the competitiveness of our capital markets is important not just on Wall Street, but on Main Street.

Let's be clear. There is no excuse for corruption in business, any more than we should excuse it in government. We must condemn it, root it out, and punish the wrong-doers.

But we can do this without treating honest companies and investors like criminals, and without sacrificing the responsible risk-taking that drives the American spirit.

We need a regulatory culture that aggressively pursues all wrong-doers while providing fair and consistent oversight of all others. That's why we must stop labor unions and trial lawyers who are abusing the rules for their own gain. And, the prosecutorial abuse of attorney-client privilege and other due process rights must come to an end - and never happen again.

With practical solutions, we can also provide access to quality, affordable health care and a secure retirement for every American.

Some believe the answer to these challenges is Washington-run health care. That is not the answer.

We need to strengthen employer-sponsored health insurance, and make it more available and affordable for every worker. We need to expand opportunities for individuals, families, and small businesses to purchase good coverage in the private marketplace.

And if all Americans were to focus on the principles of wellness and prevention, we could avert 40 million cases of chronic diseases and reduce health care costs by more than $1 trillion. That's real money!

The government should also stop imposing new mandates and handicaps on pension plans. New savings and investment incentives should be created to encourage greater participation. And Social Security must be modernized with more realistic cost-of-living benefit increases and the inclusion of a personal investment component.

To create a safer, stronger, and more prosperous America, we must also demand a system of free and fair trade.

America's markets are essentially open and they must remain open. We need trade agreements to open foreign markets to our businesses and workers. We must guarantee that our workers are free to compete under fair rules on a level global playing field.

Expanding trade under fair rules has the potential to create hundreds of thousands of new American jobs. Expanding trade will reduce prices for consumers, and create tremendous opportunities for small businesses and younger generations of entrepreneurs. It's already happening.

To fully realize this promise we must also protect intellectual property. At home and abroad, we must pass tougher laws, crack down on criminal networks, and insist on government recognition of the sanctity of patents.

A budget plan recently adopted by the congressional majority assumes the expiration of current tax rates, which would result in a tax increase of more than $1 trillion. An additional tax package suggested by the House Ways and Means Committee Chairman would allow another $1 trillion in tax hikes.

Many small businesspeople put in 70, 80, 90 hours a week and pay their taxes according to individual rates. Under these proposals, they could see their effective rate rise to more than 44 percent.

We must fight these outrageous tax hikes. America has succeeded because, in our nation, we reward success and risk taking. We should never, ever punish achievement.

And while we support the right of workers to choose whether they want to join or quit a union, the rules must be fair and impartial.

A secret ballot is a fundamental right. We must never allow any worker to be denied the right to cast his or her vote in private.

We must not allow union leaders to turn back the clock and shackle our economy with rules and mandates designed for a 1950's economy.

Ladies and gentlemen - now, more than ever, when it comes to American jobs and American products, we must be strong and aggressive. Now, more than ever, our leaders have to fight harder and do better. Now, more than ever, we need to enact common sense policies that will enable American businesses to compete and win on a global scale.

We are all in this together, and we all need to work together. The Chamber stands ready. We are implementing an unprecedented Five-Year Plan that will significantly expand our global reach, grassroots depth, and issues expertise.

You can read about this plan, including our vigorous election-year program, in the State of American Business 2008 report.

The bottom line is this - we must stop the practices and policies that undermine economic expansion and start doing more to promote the principles of a successful 21st century economy.

This is the message…this is the program…this is the commitment that the Chamber will carry forward to the American people.

So let us move forward together -- rally business owners and their employees across the nation in this critical election year - and take a stand for a better, more confident, prosperous, and secure America.