Tim Pawlenty delivered a major speech on the economy in Chicago yesterday. He staked out a position that is squarely in the Reaganite mainstream of the Republican party, yet more aggressive than any of the other Republican contenders. It was, in my view, an excellent speech. Here are some excerpts:
How are you enjoying your recovery Summer? That’s what the President said we were having, and that was last year.
Now, gas is nearly $4 a gallon. Home prices are in the gutter. Our health care system — thanks to ObamaCare — is more expensive and less efficient. Unemployment is back over 9%. Our national debt has skyrocketed. Our budget deficit has grown worse and the jobs and manufacturing reports are grim. If that was a recovery, then our President needs to enter economic rehab. And the American people need to stop his policies, cold turkey.
The addiction to spending must be brought to a halt. And we must have a President who has a growth agenda. …
The President wrongly thought the stimulus, the bailouts and the takeovers were the solution. He says they worked. They did not.
The President is satisfied with a second-rate American economy, produced by his third-rate policies. I’m not.
Pawlenty set out an economic vision that, as Steve Hayes wrote, constitutes a “fundamentally different worldview” from that of President Obama.
I promised to level with the American people–to look them in the eye, and tell them the truth. I went to Iowa and said we need to phase out federal ethanol subsidies. I went to Florida and said we need to raise the retirement age for the next generation, and means-test cost-of-living adjustments for Social Security. I went to New York City and told Wall Street that the era of bailouts, carve-outs and handouts had to end. I’m willing to tell Americans the hard truth, and I believe Americans are ready to hear it.
But the truth about our economy isn’t hard at all. Markets work, Barack Obama’s central planning doesn’t. America’s economy is not even growing at 2% today. And that’s what all projections say we can expect for the next decade. That’s not acceptable. It’s not the American way. The recession may have changed our economy, but it didn’t change our character.
Pawlenty is trying to pull off a neat trick–to present himself as a teller of hard truths, while still retaining an optimistic vision of America’s future.
Let’s start with a big, positive goal. Let’s grow the economy by 5%, instead of the anemic 2% currently envisioned. Such a national economic growth target will set our sights on a positive future, and inspire the actions needed to reach it. By the way — 5% growth is not some pie-in-the-sky number. We’ve done it before. And with the right policies we can do it again.
Between 1983 and 1987, the Reagan recovery grew at 4.9%. Between 1996 and 1999 —- under President Bill Clinton and a Republican Congress — the economy grew at more than 4.7%. In each case millions of new jobs were created, incomes rose, and unemployment fell to historic lows. The same can happen again.
Growing at 5% a year rather than the current level of 1.8% would net us millions of new jobs. Trillions of dollars in new wealth. Put us on a path to saving our entitlement programs, and balance the federal budget.
How do we do it? In short, we create more economic growth by creating more economic freedom. We should start by overhauling the tax code.
I wrote here about the 4 Percent Project, which is being spearheaded by the George W. Bush Presidential Center. I attended the project’s inaugural conference in Dallas. Four percent growth, sustained consistently, is an aggressive goal; five percent, obviously, more so. Yet, as Pawlenty says, not unprecedented.
Pawlenty went on to propose sharp tax cuts, as well as elimination of some taxes: the estate tax, the capital gains tax and taxes on interest and dividends:
Government has no moral or economic basis to claim a second share of the same income. When you deposit a dollar in your bank account, every penny should be forevermore yours and your children’s, not the federal government’s.
Pawlenty’s economic plan contemplates that 40% of the budget deficit can be closed through economic growth. What about the remaining 60%? That requires spending restraint:
I’ve proposed capping and block-granting Medicaid to the states, raising the Social Security retirement age for the next generation, and slowing the rate of growth in defense spending. But we can’t trust Congress to do it. We cannot allow the situation to risk being unresolved and to take down America’s potential for growth and prosperity.
So I propose that Congress grant the President the temporary and emergency authority to freeze spending at current levels and impound up to 5% of Federal spending, until such time as the budget is balanced. If they won’t do it — I will. As an example, cutting just 1% of overall federal spending for 6 consecutive years would balance the federal budget by 2017.
Pawlenty talked about his success in restraining spending in Minnesota, which is the centerpiece of his campaign. He went on to blast the over-regulation of the Obama era. I liked this attack on Obama’s EPA:
And the Environmental Protection Agency is now regulating carbon emissions, a policy rejected by Congress — but one that puts millions of jobs at risk.
If these policies sound as though they were written by people who have spent no time outside government — well — you’re right. President Obama’s political appointees have been notorious for their lack of private sector experience.
This is unacceptable. It is fundamentally immoral to force working Americans to hold down two or three real jobs, just to afford the whims of “experts” who’ve never had even one.
Don’t let Pawlenty’s friendly demeanor fool you: his critique of the Obama administration is as hard-hitting as anyone’s.
America is facing grave challenges. And when times get tough, some politicians try to turn the American people against one another. Regrettably, President Obama is a champion practitioner of class warfare. Elected with a call for unity and hope, he’s spent three years dividing our nation and fanning the flames of class envy and resentment to deflect attention from his own failures, and the economic hardship they have visited on America.
But class warfare is not who we are.
I come from a working class background. I didn’t grow up with wealth, but I’ve never resented those who have it. The top ten percent of income earners already pay more than 70% of income taxes. We could jack that up to 80 or 90%, as President Obama would have us do. But that’s not the point. While it might make the class warfare crusaders feel better, it wouldn’t create a single job in America, and it would destroy many.
President Obama has had three years to turn things around, and all we have to show for it is 3.7 trillion dollars more debt. Nearly 2 million fewer jobs. A Congress that hasn’t passed a budget in more than 2 years. A health care takeover he pretends we can afford, and a fiscal crisis he pretends we can ignore.
We’ve tried President Obama’s way, and it has only made the economy worse. Other countries around the world have tried President Obama’s way and have met with ruinous results. We have a choice: just because we followed ancient Greece into democracy doesn’t mean we’re doomed to follow modern Greece into bankruptcy.
Pawlenty closed with an appeal to America’s destiny as an exceptional nation:
For 235 years we’ve taken the road less traveled–the road of liberty. Of self-government and free enterprise. And it has made all the difference. …
We are the United States of America. We settled the west and went to the moon. We liberated billions of good people from communism, fascism, and jihadism. We’ve lit the lamp of freedom for the entire world to see. The strength of our country is our people, not our government. Americans believe our country is exceptional, and they deserve a President who does too.
This was, I think, the most important speech delivered so far in the 2012 cycle. With Mitt Romney wobbling on ethanol and cap and trade, Pawlenty seems the candidate best positioned to pick up the banner of mainstream Republican views and values, and take the battle to the Democrats. That is the way it looks to me, anyway.