no mention of Vietnam, but he couldn't resist the gratuitous John McCain reference.
My Economic Policy
A new CEO in Washington would be good for American business.
BY JOHN KERRY
September 15, 2004
As I travel across this country, I meet store owners, stock traders, factory foremen and optimistic entrepreneurs. Their experiences may be different, but they all agree that America can do better under an administration that is better for business. Business leaders like Warren Buffett, Lee Iacocca and Robert Rubin are joining my campaign because they believe that American businesses will do better if we change our CEO.
Since January 2001, the economy has lost 1.6 million private-sector jobs. The typical family has seen its income fall more than $1,500, while health costs are up more than $3,500.
Today, American companies are investing less and exporting less than they were in 2000--the first time investment and exports have been down during any presidential term in over 70 years. At the same time, our trade deficit has grown to more than 5% of the economy for the first time ever, a troublesome and unsustainable development.
The economy still has not turned the corner. Over the last year, real wages are still down and even the jobs created in the past 12 months represent the worst job performance for this period of a recovery in over 50 years. Indeed, the total of 1.7 million jobs created over the last year is weaker than even the worst year of job creation under President Clinton, and below what is needed just to find jobs for new applicants entering the work force.
Forty-three months into his presidency, George Bush's main explanation for this dismal economic record is an assortment of blame and excuses. Yet what President Bush cannot explain is how the last 11 presidents before him--Democrats and Republicans--faced wars, recessions and international crises, and yet only he has presided over lost jobs, declining real exports, and the swing from a $5.6 trillion surplus to trillions of dollars of deficits.
While the private sector will always be America's engine for innovation and job creation, President Bush has failed to take any responsibility for missing opportunities to strengthen the conditions for investment, economic confidence and job creation.
When the economy needed short-run stimulus without increasing the long-run deficit, President Bush got it backwards, passing an initial round of tax cuts that Economy.com found had no effect in lifting us out of recession. He then passed more deficit-increasing tax cuts that Goldman Sachs described as "especially ineffective as a stimulative measure." When small businesses and families needed relief from skyrocketing health-care and energy costs, he chose sweetheart deals for special interests over serious plans to reduce costs and help spur new job creation.
With the right choices on the economy, America can do better. American businesses and workers are the most resilient, productive and innovative in the world. And they deserve policies that are better for our economy. My economic plan will do the following: (1) Create good jobs, (2) cut middle-class taxes and health-care costs, (3) restore America's competitive edge, and (4) cut the deficit and restore economic confidence.
• Create good jobs. I strongly believe that America must engage in the global economy, and I voted for trade opening from Nafta to the WTO. But at the same time, I have always believed that we need to fight for a level playing field for America's workers.
I am not trying to stop all outsourcing, but as president, I will end every single incentive that encourages companies to outsource. Today, taxpayers spend $12 billion a year to subsidize the export of jobs. If a company is trying to choose between building a factory in Michigan or Malaysia, our tax code actually encourages it to locate in Asia.
My plan would take the entire $12 billion we save from closing these loopholes each year and use it to cut corporate tax rates by 5%. This will provide a tax cut for 99% of taxpaying corporations. This would be the most sweeping reform and simplification of international taxation in over 40 years. In addition, I have proposed a two-year new jobs tax credit to encourage manufacturers, other businesses affected by outsourcing, and small businesses that created jobs.
American businesses are the most competitive in the world, yet when it comes to enforcing trade agreements the Bush administration refuses to show our competitors that we mean business. They have brought only one WTO case for every three brought by the Clinton administration, while cutting trade enforcement budgets and failing to stand up to China's illegal currency manipulation. That not only costs jobs, it threatens to erode support for open markets and a growing global economy.
• Cut middle-class taxes and health costs. Families are being increasingly squeezed by falling incomes and rising costs for everything from health care to college. But spiraling health-care and energy costs squeeze businesses too, encouraging them to lay off workers and shift to part-time and temporary workers.
Under my plan, the tax cuts would be extended and made permanent for 98% of Americans. In addition, I support new tax cuts for college, child care and health care--in total, more than twice as large as the new tax cuts President Bush is proposing.
I have proposed a health plan that would increase coverage while cutting costs. It builds on and strengthens the current system, giving patients their choice of doctors, and providing new incentives instead of imposing new mandates.
My health plan will offer businesses immediate relief on their premiums. By providing employers some relief on catastrophic costs that are driving up premiums for everyone, we will save employers and workers about 10% of total health premiums.
Our hospitals and doctors have the best technology for saving lives, but often still rely on pencil and paper when it comes to tracking medical tests and billing. As a result, we spend over $350 billion a year on red tape, not to mention the cost of performing duplicative or redundant tests. My plan will modernize our information technology, create private electronic medical records, and create incentives for the adoption of the latest disease management.
And I won't be afraid to take on prescription drug or medical malpractice costs. We will make it easier for generic drugs to come to market and allow the safe importation of pharmaceuticals from countries like Canada. Finally, we will require medical malpractice plaintiffs to try nonbinding mediation, oppose unjustified punitive damage awards and penalize lawyers who file frivolous suits with a tough "three strikes and you're out" rule.
This plan will make our businesses more competitive by making our health care more affordable.
• Restore America's competitive edge. America has fallen to 10th in the world in broadband technology. Some of our best scientists are being encouraged to work overseas because of the restrictions on federal funding for stem-cell research. President Bush has proposed cutting 21 of the 24 research areas that are so critical to long-term growth. We need to invest in research because when we shortchange research we shortchange our future.
My plan would invest in basic research and end the ban on stem-cell research. It would invest more in energy research, including clean coal, hydrogen and other alternative fuels. It would boost funding at the National Science Foundation and continue increases at the National Institutes of Health and other government research labs. It will provide tax credits to help jumpstart broadband in rural areas and the new higher-speed broadband that has the potential to transform everything from e-government to tele-medicine. I would promote private-sector innovation policies, including the elimination of capital gains for long-term investments in small business start-ups.
To ensure we have the workers to compete in an innovation economy, we need more young people to not only enter but complete college, we need more young women and minorities to enter the fields of math and science, and we need to make it easier for working parents to get the lifelong learning opportunities they need to excel at both their current and their future jobs.
• Cut the deficit and restore economic confidence. When President Bush was in New York for the Republican convention, he did not even pay lip service to reducing the deficit. His record makes even Republicans wary. From missions to Mars to a pricey Medicare bill, President Bush has proposed or passed more than $6 trillion in initiatives without paying for any of them. The record is clear: A deficit reduction promise from George W. Bush is not exactly a gilt-edged bond.
Americans can trust my promise to cut the deficit because my record backs up my word. When I first joined the Senate, I broke with my own party to support the Gramm-Rudman-Hollings deficit reduction plan, which President Reagan signed into law. In 1993, I cast a deciding vote to bring the deficit under control. And in 1997, I supported the bipartisan balanced budget agreement.
I will restore fiscal discipline and cut the deficit in half in four years. First, by imposing caps, so that discretionary spending--outside of security and education--does not grow faster than inflation. If Congress cannot control spending, it will automatically be cut across the board. Second, I will reinstitute the "pay as you go" rule, which requires that no one propose or pass a new program without a way to pay for it. Third, I will ask for Congress to grant me a constitutionally acceptable version of line-item veto power and to establish a commission to eliminate corporate welfare like the one John McCain and I have fought for.
I am not waiting for next year to change the tone on fiscal discipline. Every day on the campaign trail, I explain how I pay for all my proposals. By rolling back the recent Bush tax cuts for families making over $200,000 per year, we can pay for health care and education. By cutting subsidies to banks that make student loans and restoring the principle that "polluters pay," we can afford to invest in national service and new energy technologies. My new rules won't just apply to programs I don't like; they will apply to my own priorities as well.
Cleaning up President Bush's fiscal mess will not be easy, but to ensure a strong and sustainable economic future we have to make the tough choices to move America's growing deficits back in the right direction.
On Nov. 2 we will have a national shareholders meeting. On the ballot will be the choice to continue with President Bush's policies or return to the fiscal sanity and pro-growth polices that proved so successful in the 1990s. You will choose.
Mr. Kerry is the Democratic Party's candidate for president.