Leader Cantor Unveils Pro-Growth Economic Plan at Stanford University

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STANFORD, CA – Today, House Majority Leader Eric Cantor (R-VA) will unveil a pro-growth economic plan during remarks at Stanford University’s Hoover Institution. The text of his speech, as prepared for delivery, appears below:

Thank you for having me. I am honored to be here.

Thank you Secretary Rice and Hoover Institution Director John Raisian for hosting me today.

And I want to recognize all the students and fellows in attendance and thank them for being here.

All of us should also recognize that the people of Japan can count on our prayers and support during this tragic time.

In preparation for this speech, I read Herbert Hoover's 1959 statement to the Board of Trustees of Stanford University on the mission of the Hoover Institution and I was struck by this passage:

"This Institution supports the Constitution of the United States, its Bill of Rights and its method of representative government. Both our social and economic systems are based on private enterprise from which springs initiative and ingenuity....”

That is the essence of what I want to talk about today.

Now, more than ever, our nation needs private enterprise, innovation and American ingenuity to get us back on track.

Americans have a rich history of standing tall in tough times and going the extra mile to propel us forward. Whether it was the American Revolution, the Industrial Revolution or the Internet Revolution, we are unique in our ability to apply creativity, intellect and leadership to solve any problem.

Now we face new obstacles as this country finds itself at a crossroads. Before us, is a choice about who we want to be as a country, and believe me, there is a choice.

Here are the choices: Weak or strong, lagging or leading, shrinking or growing, and do we want to be a country where the people work for the government or the government works for the people?

To be strong, to lead, to grow, and to empower people – here’s what we need to do. We’ve got to shift from having a government that smothers new jobs and business growth to one that nurtures an environment for getting people back to work and back to what Americans do best: innovate, compete and lead.

The fix is out there.

Last year the Kaufmann Foundation released a study showing that so-called ‘gazelle’ companies – those three to five years old – create roughly 10 percent of all new jobs despite being only 1 percent of all companies. That top performing 1 percent contributes an astounding 88 jobs per year compared to an average company that adds just two or three.

Gazelles mean more jobs. More start-ups mean more jobs. The question to ask: Why is Washington turning America into a wounded lion instead of a speedy gazelle?

Why is Washington smothering new job and business growth instead of nurturing an environment where more people are working and America is more productive?

Here’s how we can stop limping and start running.

We start by making America competitive again in the area of business taxation.

It’s wrong that American companies are paying taxes at rates that are 50% higher than even those in Europe.

We must make America competitive again by lowering the corporate tax rate to at least 25% - equal to our competitors. And we will do it as part of fundamental tax reform, which will minimize the impact on government revenues.

Forging consensus on this type of fundamental tax reform will take time, so in the meantime I propose that we allow U.S. multinational companies to bring back almost $1.2 trillion in overseas profits at a lower tax so they can invest in our economy here at home.

Free trade is another area where we can become much more competitive right now.

So, why is President Obama sidelining America by holding up trade agreements when our foreign competitors are making them?

High taxes and trade barriers aren’t the only things holding American businesses back. The Small Business Administration admits that government regulations are estimated to cost our economy over $1.75 trillion a year.

To make matters worse, in 2009 the Administration had – under various stages of consideration – another 184 regulations that are estimated to cost the economy in excess of $100 million each.

That is why we are taking up legislation in the House to lessen the regulatory burden on everything from the Internet and airlines to energy production and farming.

Smart regulations are fine, as long as they help steer businesses into the black rather than into a tangle of red tape. The problem with laws such as Obamacare and Dodd-Frank is that they are sedatives rather than stimulants to new job growth.

That is why we are bringing to the House floor a bill that requires Congressional approval for any regulation with significant economic impact.

I believe all of us in Congress should start every day by asking ourselves: How is each one of us going to help a ‘gazelle’ today?

Change in that direction began this November when Republicans assumed the majority in the House.

The Taxed Enough Already – or TEA – Party helped light a fire under our agenda. They’ve helped to focus attention on the surge in government spending and intrusion into the private sector. We need a surge protector.

We need protection against the abuse of government power. Government should not corrode personal initiative, drive and responsibility.

It was telling to see young people in France and Greece last summer, protesting against their governments’ decision to rein in benefits – even though those young people are years away from receiving them.

Translation: very early in their lives, these vital young people are conditioned to rely and depend on the government for their livelihood and their future.

Meanwhile, last year in America, people from a wide array of political backgrounds took to town halls to demand an end to the explosive growth of government. Their desire: for our government to do less, not more.

Last year, I received a letter written by a student at Stanford Business School who was working in England at the time.

He was amazed how differently entrepreneurs were regarded in Europe.

His British friends said they couldn’t even imagine an entrepreneurial hotbed like Silicon Valley existing in Europe.

He wrote: “Starting a business, even if you fail in the process, is a badge of honor in the U.S. … but in Europe, entrepreneurship is frowned upon, and consequently, the best and the brightest are afraid to take a risk.”

Even though they are “very smart and educated, when I ask them about their career path, no one ever mentions starting a business.”

“They don’t think any big new products or businesses will come from the U.K. in the next 50 years.”

This kind of thinking is anathema to us in American. Not only do we want our kids to invent things and build businesses around them, we expect them to.

There’s a lot of talk today about how the Chinese might overtake us, but let me tell you a story about how they want to emulate us.

Recently, I had the opportunity to meet with Chinese President Hu Jintao and a delegation of Chinese leaders visiting the United States.

What struck me was their leaders’ interest in the things that make us uniquely American.

It was clear to me that these Chinese leaders didn’t come here to ask our advice about our government agencies, or bureaucracies or administrative offices.

No. They asked about Silicon Valley and our other centers of technology and our research universities. They want to know: How do we do it?

They wanted to know why companies like Google, Amgen, Apple, Genentech and Facebook – were all born in American basements, backyards, and garages.

What is our secret?

The answer starts at world-renowned institutions like Stanford that give their students and faculty the freedom and encouragement to harness their creative energy, test ideas, think critically and solve problems.

In America, our research universities and institutions are renowned for their pursuit of critical analysis and problem solving.

We know how to take ideas and bring them to market better than anyone else.

We pursue these ideas, even though they might fail.

The Result: We are the crucible of innovation. Time and again we invent things that change the world.

I am worried that Washington has forgotten this.

I am worried that this gut sense of entrepreneurialism is missing from the policy-making debate in Washington, both in the Congress and in the White House.

Not enough people are coming to work every day looking at their jobs through the prism of helping small businesspeople and entrepreneurs flourish in America.

Our team in the new Republican Majority is resolved to do something about this. We have adopted a two-track approach: “Cut and Grow.”

The first part – “Cut” is obvious. We know that we have to stop spending money we don’t have and manage the money we do spend more wisely.

The American people are tightening their belts and Washington should too.

The “Grow” part brings us back to those gazelles – growing businesses that add new employees every month. Keeping regulators from running amuck.

And that brings me back to that letter from the Stanford Business School student.

America has always been about entrepreneurs. One of the few and defined powers the founders established for Congress is the power to establish a system for the awarding of patents. But today our system is broken and we have a backlog of 700,000 patents.

So, we are taking up legislation to reduce the backlog and encourage invention once again because innovation is the lifeblood of new job creation, entrepreneurism and business growth.

One of the other powers of Congress is the power to regulate entry into this country. And as a country we have always invited the best and brightest from around the world – many of whom are educated in our universities – to contribute to our economic growth.

Yet our visa system has failed to keep pace with the demands of our economy. If bringing in high-skilled workers from abroad helps us keep thousands of jobs here in America, our antiquated laws should not be a barrier.

To lead in the 21st Century, it’s all about making the right choices. We’ve got to change course before it’s too late.

There is a deep-seated cynicism about government in this country that must be addressed. For too long, people have scorned Washington and have felt left out.

It became worse after the near collapse of our financial markets in fall of 2008. The subsequent passage of the Troubled Asset Relief Program (TARP) and other bailout programs left people asking: “What happened to the idea that if you worked hard, and played by rules, you got ahead?”

In America, it’s always been: No matter who you are, no matter where you come from, everyone’s got a fair shot, not guaranteed success but the opportunity to work hard and get ahead.

This very American notion seems to be in doubt. A lot of Americans blame the bad actors perpetrating mortgage fraud for the devaluation of their homes. They blame the bad actors on Wall Street for emptying out their 401-k’s. And they blame the government for not preventing it.

And now, across America, people are awakening to the fact that government workers enjoy wages and benefits, far outpacing those in the private sector. Being close to those in power all of a sudden seems more important than ever before in getting ahead.

This has left most Americans wondering, “What happened to their fair shot in life?”

When I think about the America I want my kids to inherit, I’m reminded of why my family came to this country in the first place.

Like so many others in America, I am the grandson of immigrants. My grandmother and her family fled religious persecution to come here at the turn of the last century. Like so many of her generation in Eastern Europe, my grandmother faced a future where no matter how hard she worked, no matter how much she studied or learned, no matter how smart she was, there were limits.

Just because of who she was, who her parents were and where she was born, there was only so far she could go, only so much she could do.

But America wasn’t like that. My grandmother eventually made her home in a working class section of Richmond, Virginia.

Widowed at a very young age, she raised my father and my uncle in tight quarters above a tiny grocery store that she ran.

She worked day and night and sacrificed tremendously to secure a better future for her children.

And sure enough, this young woman – who had the courage to journey to a distant land with hope as her only possession – lifted herself into the ranks of the middle class.

Through hard work, thrift and faith, she was even able to send her two children to college.

All she wanted was a chance – a fair shot. And if she were still alive today, she would be blown away by the fact that her grandson was not only a Member of the U.S. Congress, but the Majority Leader of the U.S. House of Representatives.

In America, you may be talking to the union worker in Philadelphia, the retired state employee in Sacramento or the working Mom in a small town in Kansas. All of them come from different places and different backgrounds. But each of them rely upon a simple and implicit guarantee – that the deck won’t be stacked against them in America. That they’ll have a fair shot and the opportunity to succeed.

The true grit of Americans passes from one generation to the next, as long as government remains limited and opportunity remains unlimited, through free markets and a fair playing field.

Americans will out-work, out-hustle and, yes, out-innovate the rest of the world.

Individual initiative in the private sector has been and always will be the wellspring of America’s prosperity provided we don’t stifle it.

Winning the future will only be hard if we lose out to the bureaucrats, technocrats and would-be autocrats punishing our progress.

Fifty years from now, people will look at 2011 as the year we began our comeback or the year that we continued our fallback. Let us resolve to work together to make sure that the future belongs to us.

Thank you.

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