Rubio Promotes Agenda for a New American Economy
From the Rubio Campaign:
Today, at a speech to the Detroit Economic Club in Michigan, Marco Rubio will share his agenda for a New American Economy. Marco will specifically detail how his tax plan would help a small business owner and a single, working mom in Detroit.
Below are Marco's remarks, embargoed until 12:45pm ET, as prepared for delivery:
Thank you. It’s great to be at the Detroit Economic Club today. I can think of no better place to discuss the challenges and opportunities before our nation than Detroit.
No city understands the vision and toil it took to build the American Century better than Detroit. No city understands the heights attainable through the American Dream better than Detroit. And no city understands the pain of losing that Dream – and the importance of restoring it – better than Detroit.
And that is why this city, the heart of the old economy, is the perfect place to discuss how we can embrace A New American Economy – one even grander and richer in opportunity than ever before.
I want to begin by looking back to 1896, when in a small rented workshop on Mack Avenue, less than 10 miles from here, a man constructed what was referred to by some as a “pile of scrap iron.” Just seven years later, that man – Henry Ford – founded the Ford Motor Company, and his pile of scrap iron became the first affordable automobile, which would put the world on wheels and alter the nature of work and life forever.
What ended up making this story remarkable was not one outstanding genius or one transformative company. It was how the entire American economy took an invention and turned it into an engine for prosperity. The affordable automobile did not create a business; it created thousands of businesses. It brought new opportunities within reach of our people.
For most of history, entire generations would pass without seeing a new innovation as transformative as the automobile. But the pace of human progress changed during the industrial revolution and has accelerated ever since. Unbelievably, the Ford Motor Company was not even the clear winner for the most transformative development of the year 1903. Two brothers from Kitty Hawk, North Carolina also had a breakthrough that year that did nothing less than alter the course of history.
Here we stand more than a century later, and economic change is still accelerating. When my first child was born just after the turn of this new century, there was no such thing as Facebook or YouTube or an iPhone – in fact, only about 40 percent of the country had Internet access. Just 15 years later, my children can access the world’s knowledge from the supercomputers in their pockets.
They live in an economy in which the most valuable retailer in America, Amazon, owns not a single store; the largest transportation company, Uber, owns not a single vehicle; and the largest accommodation provider, AirBNB, owns not a single hotel.
This is The New American Economy – built not on a single change, but on change itself – on the fact that numerous transformative innovations have come in the last five years, and even more will come in the next five. These constant advances in technology are replacing old jobs with new ones, and have turned our economy from national to international.
Detroit needs no lesson in this. Globalization and technology have upended the auto industry. Cars are now, in many ways, computers with wheels, and this city must compete with many others around the world to design the best products at the best prices. This transition hasn’t been easy. For many years, the policies impacting Detroit made it harder. Taxes were exorbitant, regulations were crippling, and crony capitalism was rampant. The results were inefficiency and lagging innovation. Opportunity for the people of Detroit plummeted.
Today, Washington is leading our entire nation in the direction of pre-crisis Detroit.
While America’s economy is built on change, it is increasingly controlled by a federal government that is resistant to change. Other nations are adapting to the new economy while Washington is clinging to the ways of the old economy. As a result, America is no longer the obvious best place for the Henry Fords of today to create the businesses of tomorrow. And while innovations keep transforming our world, our economy is struggling to translate them into opportunity for our people.
This election is a choice about what we do next.
Hillary Clinton believes the way to win the race for the future is to drive in reverse – to revert back to more regulations, higher taxes, and bigger government. I believe the way forward is to embrace the future and modernize our government. I believe if we once again make America the best place in the world to create jobs, and empower every American to fill those jobs, then our generation will embrace The New American Economy and lay the foundation for A New American Century.
Today, Detroit is an example of what can happen under pro-growth, pro-business leadership. Under Governor Rick Snyder, corporate taxes have dropped significantly, the city’s financial climate has finally been reset through bankruptcy, and thanks to numerous pro-growth reforms, Michigan now has one of the best entrepreneurial environments in the country.
As a result, innovation is surging, jobs are returning, lights are back on in buildings once vacant. While it’s true this city received some help from taxpayers, its rebirth has been the product of its people’s hard work in a reformed economy, not a bailout. In fact, as many of the business leaders in this room can attest, one of the biggest obstacles between Detroit and its future continues to be Washington, D.C.
Until Washington learns what this city already has, our entire nation will be held back from the promise of the new economy. And that is why my agenda as president will be dedicated to overhauling our outdated policies and institutions. My reforms will be based on addressing the modern challenges our people face in their lives.
Today, I’d like to describe how my agenda would play out in the lives of two hypothetical people from Detroit: a small business owner operating an auto servicing shop, and a young single mother who works at the shop’s front desk. As we’ll see, many of the challenges they face are the direct result of Washington’s failures.
We’ll call our small business owner David from Detroit. David owns and operates a franchise of a national automotive repair company. He has ten employees. In the past, David never considered himself a political person. He never thought his life was impacted much by what happened in Washington. But lately, his costs have been soaring, and when he looks at his books, it’s clear to him why.
First come the costs of equipment. David needs new supplies often, but outdated trade restrictions are preventing his franchisor’s purchasing co-op from finding products at competitive prices. And Washington continues to tax what he invests in modernizing his equipment despite the fact that our economy needs businesses like David’s to integrate new technologies.
Next come his labor costs. It’s getting harder for David to meet payroll for a number of reasons. One is the higher cost of health insurance under ObamaCare. Compliance with that disastrous law costs the average small business $15,000 a year. In addition, President Obama has now mandated the expansion of overtime pay to millions of salaried workers, including several of David’s employees.
On top of this, David is having trouble finding mechanics who understand the way cars are changing. He needs them to have up-to-date certifications and an ability to work with new technologies, but these higher-skilled workers require higher salaries.
And then there’s his receptionist, we’ll call her Danielle. David has been her boss for five years – he knows her kids, he cares about her, and he’s proud to pay her $9.50 an hour, which is more than minimum wage.
He knows that’s not enough for Danielle to provide financial security for her two children, but it bothers him to hear Hillary Clinton and others go on about how cruel business leaders can be with their low wages, because he knows if the minimum wage were to jump to $15 an hour, he would have to cut Danielle’s job entirely.
He’s already feeling pressure to automate her role, which many of his competitors are doing through mobile apps and online scheduling. He’s thought about shifting her to a part-time position, which would save him a significant amount under ObamaCare. But he’s held back so far, because he knows his customers prefer the personalized service Danielle brings.
The next expense David has to consider is the cost of complying with new regulations. There are strict rules on everything from how he disposes of used rags to how he applies touch-up paint to cars. Some he understands, but so many others seem unnecessary. He’s had to hire a lawyer just to ensure he doesn’t violate any.
Washington agencies are threatening him in other ways, too. The National Labor Relations Board is on the verge of declaring that David doesn’t even own his business, that he is a “joint employer” with his franchisor. The likely impact is that fewer franchises will open, and costs and litigation will increase for existing ones.
Yet all of these costs pale in comparison to what comes next. If there is one thing threatening to force David out of business, it’s his taxes. Washington already takes one out of every three dollars he earns, and by the time he factors in state and local taxes he pays around 40 percent. This makes it unlikely he’ll be able to grow his business, but if he did the government would reward him by taking almost half of what he earns.
By the time he accounts for all these costs, David is lucky if he has anything left to spend on advertising or facility improvements. It seems inevitable that he’ll have to hike prices or lay off workers. With all of this, is it any wonder so many Americans are giving up on the dream of owning a business? Or that, for the first time in 35 years, there are more businesses dying in America than being born?
A pro-growth agenda will help not just David, but also his employees, including his receptionist, Danielle.
Danielle, like so many young women, was abandoned by the father of her children. Left to raise her two kids alone, she moved to a small apartment in Detroit. Working around 40 hours a week at $9.50 an hour, she makes about $1500 a month.
After rent, her biggest expense is childcare, which costs about $350 a month. That’s on the low end for Detroit. Next come her gas and electric bills, which are usually about $100 combined. Then transportation costs. Detroit has the most sprawling job market in the country, meaning Danielle has to drive 25 minutes to get to work. Gas is $100 a month. Her car payment is $200 and insurance is another $80.
It’s easy to see where this is going. By the time she factors in food, clothing, and all the other costs of raising children, Danielle’s wage at the auto repair shop isn’t enough to keep her out of debt or off government assistance. She finds herself on the edge of poverty and slipping over.
During her long hours staffing the front desk at work, she sometimes dreams of advancing to a better paying position. She’s asked David what it would take to get hired as a mechanic, which would more than double her pay. But for that to happen, she would have to go to school on nights and weekends. It would cost her thousands of dollars and time away from work and home that she simply can’t afford.
Like all parents, Danielle dreams that her children’s lives will be better. She tells them they can be anything they want to be, but she understands what they’re up against. She knows she’ll have no choice but to send them to struggling public schools. She knows she won’t be able to save for their college educations.
All of this leaves Danielle feeling hopeless to change her circumstances. She feels as if the American Dream – the idea that a person can go as far as their talent and work will take them, and that their kids can go even further – either doesn’t exist anymore or doesn’t apply to people like her.
The challenges facing David and Danielle are common all across this country. While their names may be fiction, their stories are all too real. People like David and Danielle have no lobbyists in Washington. Both parties have let them down in the past. But history will judge us by what we do next.
If we continue to cling to an outdated tax code, a failing higher education system, and numerous policies that make it harder for businesses to grow and opportunities to flourish, then we will be the first generation in history to pass a weaker America on to our children. But if we embrace The New American Economy, we will put David and Danielle back in control of their own destinies, and within reach of their American Dreams.
As president, I will begin by fundamentally overhauling our tax code to make it pro-growth and pro-family, because currently it’s neither. America will never be the global leader in business in this century if we continue to have the highest corporate tax rate in the developed world. Michigan alone will lose $11.7 billion in GDP over the long term if nothing changes.
My tax plan will begin by cutting the corporate rate to be competitive with the average of 25 percent for developed nations. It will cut the top tax rate for small businesses like David’s to the same level. This would instantly save him around 15 percent. He can use that to increase Danielle’s wage or modernize his equipment.
Next, my tax plan will help David adapt his business to the new economy. It will allow 100 percent expensing of every dollar he invests in his company, including what he spends on new equipment. This will lower his tax burden and encourage all business owners to invest in new 21st century technologies, which will keep our economy on the cutting edge of this century.
The non-partisan Tax Foundation found my plan would grow the economy by 15 percent, grow wages by 12.5 percent, and create almost 2.7 million full-time jobs. This helps everyone. A 12.5 percent increase in Danielle’s wage would amount to almost $2,500 a year.
The pro-family side of my plan would help Danielle even more. Right now, she gets a $1,000 tax credit for each of her two kids. This doesn’t come close to meeting the costs she faces as a parent, and it fails to recognize the investment she is making in America’s future as a mom. My tax plan would raise the per-child credit to as much as $2,500, allowing Danielle to keep significantly more of what she earns.
I would also change the way she receives assistance. Instead of getting the Earned Income Tax Credit at the end of the year, Danielle would receive a wage enhancement credit to boost her paycheck. This will reward and encourage her hard work, and amount to about $500 more per year.
Danielle may also choose one day to get married, but the current tax code would punish her for making that decision by taxing her and her husband more as joint filers than as individuals. My plan removes this penalty. Nothing has the ability to improve her children’s futures more than being raised in a loving two-parent home.
To help David grow his business and pay Danielle more, we also need to limit regulations. Complying with federal regulations has cost our economy $772 billion since 2008.
And Washington adds more rules every week. Last week, for example, regulators published $205 million in new regulatory costs, led by – get this – a new efficiency standard for ceiling fan light kits. This is outrageous, it’s unnecessary, and I would stop it by instituting a National Regulatory Budget that limits the costs each agency’s rules can impose.
I will also stop unelected bureaucrats from reorganizing the economy with the stroke of a pen, like the National Labor Relations Board has threatened with the joint employer rule, which is a risk to every single one of the 260,000 Michigan jobs provided by franchisees.
We will also lower costs for businesses by embracing the global economy. Trade is vital for the automotive industry and, increasingly, every industry in our economy. In Michigan alone, trade accounts for 1.2 million jobs – but it could account for even more. As president, I will aggressively look for new opportunities to expand free trade. It is more important than ever that we finalize the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnerships.
A growing economy and a pro-family tax code will ease Danielle’s financial burdens. But to truly transform her life, she has to be able to get a higher-paying job. Higher education is no longer a mere option in America; it is now a crucial pathway to the American Dream for most of our people.
For Danielle to become a mechanic, she will need anywhere from two to five years of formal training. To bring this within her reach, I will overhaul our outdated higher education system – I will change how she receives her training, how much that training costs, how those costs are paid, and even how her payments are determined. Hillary Clinton’s plan is to simply throw $350 billion at the current broken education system without doing anything to fix its underlying problems. This is lazy leadership.
I will do the hard work to modernize our system. I will expose higher education to the market forces of choice and competition, which will prompt a revolution driven by the needs of students like Danielle. I’ll do so by establishing a new accreditation process that welcomes low-cost, innovative providers.
I will also help Danielle find more affordable routes to becoming a certified mechanic. For example, we’ll expand apprenticeship programs so she can learn from David and her co-workers, and we’ll make it easier for her to get credit for the knowledge she’s already gained in her five years on staff.
Empowering Danielle with modern skills will change her life. But we also need to empower her to empower her kids. If Danielle had more money, she’d be able to send her kids to any school she wanted. She should have that right regardless of her income, and when I am president, she will. I have proposed a tax credit that encourages private contributions to scholarship granting organizations, which in turn distribute private school scholarships to children in need.
These reforms would lay the foundation for the New American Century, but they would only be the beginning.
I will also lead Congress to save Social Security and Medicare for future seniors without changing them for current seniors like my mom. I will secure our borders and modernize our immigration system to make it skill- and merit-based rather than family-based. And I will protect the global economy through a foreign policy that re-establishes American Strength around the world.
None of these changes will be easy. But meaningful change never is. Detroit knows that better than most.
This city was not built by managers. It was not built by bureaucrats. This city was built by visionaries – by people who refused to accept the old ways of doing things, refused to be bound by the constraints of the past.
Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.”
“Faster horses” is exactly the mindset in Washington today. Our government is led by people who would rather tweak the current status quo than revolutionize how we do things.
They pump more money into the education system of the 1950s thinking it will prepare our people for success. They rely on retirement programs from the 1930s without saving them for future generations. They expand the safety net programs of the 1960s hoping they will help the struggling escape their circumstances. Or they raise taxes like they did in the 1990s thinking it will increase opportunity.
The results of this approach are all around us: the insecurity in our people’s lives, the challenges facing Americans like David and Danielle, the concerns about the future we’re leaving for our kids.
A decade from now, all four of my children will be adults. I don’t want to have to explain to them why the America our parents left us was the greatest nation on earth, but the one we are leaving for them is not.
America doesn’t owe me anything, but I have a debt to America I will never repay. For this is not just the nation I was born in, this is the nation that changed the history of my family.
When my father was nine, his mother died. He had to leave school and go to work. He would never return to school and he would work for the next seventy years of his life.
When he was young, like all young people, he had big dreams. But they became impossible. And so here in America, his children’s futures became the very purpose of his life. For years he worked as a banquet bartender – on nights, on weekends, on holidays, on days I am sure he didn’t want to, he worked.
Because he wanted all the things that were impossible for him to be possible for us.
He stood behind a portable bar in the back of the room for all those years, so one day I could stand in the front of a room like this. That journey, from behind that bar to where I stand right now, that is the essence of the American Dream.
This is not just my story, this is our story. For we are all but a generation or two removed from someone who made our future the purpose of their lives.
Now it is our turn.
To leave our children what our parents left us – the greatest nation in human history, the nation that drives the progress of mankind and drives it for the better – we have to rise to the task our time. If we adapt to the future, we can expand the American Dream to reach more people than ever before, and we can write the greatest chapter in the amazing story of America.
We live in the most exciting era in human history, but if we look to yesterday, we will lose tomorrow.
If we elect a leader from yesterday, the best we can hope for are faster horses.
But if we embrace The New American Economy, the accomplishments of our people will astonish the world, and our children and theirs will live in A New American Century.