Governor Romney spoke with Elizabeth Holmes of the Wall Street Journal about his reaction to President Obama's speech on the day of his swearing in as the 44th president of the
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Romney Reacts to Obama's Inaugural Speech
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Romney Participates in Economic Recovery Press Conference
Following his testimony on Capitol Hill regarding economic stimulus yesterday, Governor Romney participated in a press conference with House Minority Whip Eric Cantor (R-VA), Representative Paul Ryan (R-WI), and former eBay CEO Meg Whitman.
View it here.
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Romney Urges Tax Cuts as Part of Economic Recovery
Governor Romney traveled to Capitol Hill at the invitation of House Republicans to offer input on economic stimulus. He delivered the following testimony:
Leader Boehner, Congressman Cantor and members of the working group, I want to thank you for the opportunity to appear before you today to discuss options for a stimulus package.
I also appreciate the President-elect’s willingness to solicit input from our party. We are committed to working together to strengthen the economy.
These are not ordinary times. Yes, we have had bubbles before. And we have experienced recessions. But this was no ordinary bubble and this is no ordinary recession. This bubble encompassed the largest investment sector of our economy—housing. And when it deflated, it evaporated not billions, but trillions of dollars.
The first impact was to our nation’s pool of investment capital—capital that sustains businesses, capital that finances new enterprises, capital that promotes education and discovery. This pool of investment capital was held by banks, by investment banks, by institutions and even by individual investors. And it has shrunk by trillions of dollars.
It didn’t take long for
Exports won’t make up the shortfall: most of the world is in a recession and the dollar has strengthened as fear has struck the currency markets. Investment won’t make it up either given the hit taken by the pool of investment capital. What’s left is the government sector.
There are two ways
Tax cuts should be the centerpiece of any stimulus plan. The President-elect has proposed refund checks for taxpayers. Experience shows, however, that a one-time check has very little positive impact. The 2008 stimulus led to checks being sent out in May, June and July of last year. Sure enough, disposable income rose in those months, but as Hoover Institution economist John Taylor has shown, consumption did not (Fig. 1).
And further, even if consumption were to bump up, it would not lead businesses to expand and to add jobs. Business people are smart enough to recognize a one-time, short-lived bump for what it is.
The best medicine for a sick economy is permanent tax relief. I’d recommend eliminating the tax on savings for middle income Americans—no tax on interest, dividends or capital gains. This accomplishes three things: it puts money into the consumer’s pocket, it helps replenish the pool of investment capital, and it encourages more Americans to become owners of American business.
The same principles apply to business tax relief. A rebate check would be a welcome sight to every businessperson. But a rebate check isn’t going to incentivize businesses to expand, to invest for greater productivity, or to hire more people. It’s lower future tax rates that do that. And there sure is room to cut corporate tax rates—we are at the top of the heap, along with
In my view, sending out one-time refund checks to consumers and to businesses is not the best course—it adds to a monstrous budget deficit without significantly boosting the economy. The right course is permanent tax relief, designed to spur growth, investment, and jobs. It should go without saying that raising taxes should be out of the question. It is a positive development that the President-elect has chosen not to seek an immediate repeal of the Bush tax cuts. We should go further to seek a permanent or even a temporary extension.
President-elect Obama has also proposed a short term business incentive tied to hiring new workers. That’s not a terrible idea, but it would be less effective than allowing businesses to expense capital equipment purchased this year and next. That would lead them and their suppliers to add employees, and it would boost productivity, raising wages and improving our competitiveness abroad.
The spending portion of the stimulus should be limited to those things which are urgently needed and which we had already planned to buy in the future. Infrastructure projects will be included, but because they invariably face delays for engineering, environmental reviews and contracting, they can take a long time to actually boost the economy. They should be part of the picture, but not the whole canvas.
I would like to see a significant portion of new spending to be devoted to the maintenance, repair, replacement and modernization of our military equipment and armament. Since the 1990’s dismantling of our military, we have tended to live off the assets that had been purchased in the past. These have been extensively employed in two Gulf wars and in
I would also add spending for energy research and energy infrastructure. Energy independence is an economic and strategic imperative.
With new spending on the agenda, Republicans should make sure that there is no parade of pork. All spending projects should be selected by the responsible federal agency according to explicit and public criteria. Republicans should commit to vote “no” on any stimulus bill with earmarks that have not been voted upon by the entire body.
I know that cities and states have various financial challenges of their own. Some have built rainy day funds for times like these. Others have not. As a governor who welcomed the help you provided to us in the last recession, I won’t prescribe zero help for the states. But I do believe that it is critical for cities and states to use this time to finally align spending with revenues.
Today, we are rightly focused on a stimulus to stop the economic decline and end the recession. But if we are not careful, it could add to the risk of something even worse than a recession. If we continue to leverage the public sector, to pile on more and more debt, and to ignore the looming entitlement liabilities, we could precipitate a worldwide collapse of confidence in
This stimulus package should include a commitment to reform entitlements—Social Security, Medicaid and Medicare. Senator Gregg is right to have proposed a bi-partisan commission to do just that. He is right, and now is the right time. A stimulus bill, combined with a projected deficit of $1.2 trillion, could send us down the road to ruin if we do not muster the courage to reform entitlements and to rein in future government spending.
Let me add a thought about regulation. Smart regulation is good; dumb regulation is bad. Housing finance is one of the most highly regulated sectors of our economy. And no one will claim that that regulation was very smart. Yes, we need to improve regulation, in housing and in financial services. But the right course is to make regulation that is effective. Smart regulation will make these sectors more productive and more competitive. Simply layering on burdensome regulatory schemes will depress these industries, kill more jobs, and slow economic recovery.
And there is one very bad idea that is being promoted by a special interest group. It is an idea that would have devastating impact on the economy—short term and long term. It would lead investors to send their funds elsewhere, businesses to expand elsewhere and jobs to relocate elsewhere. It is the plan to virtually impose unions on all small, medium and large businesses by removing the right of workers to vote by secret ballot. Card check is a very bad idea under any circumstances. In these circumstances, it would be calamitous.
In sum, we are presented with economic peril unlike anything we have faced during our lifetimes. I do indeed believe that careful, skillfully crafted stimulus can improve the prospects for recovery. But excessive and sloppy spending and one-time refund checks could have the exact opposite effect than that which the stimulus seeks. And in the final analysis, we must remember that it is the private sector—the home of entrepreneurs, workers, managers, and visionaries—the private sector, not government, that creates jobs, boosts wages, and provides for our future. What gives me my confidence is this: I believe in the American people. Thank you.
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A Republican Stimulus Plan
Today, at the National Review website, I write about the need for economic stimulus.
Government needs to take immediate action to boost the economy, without sacrificing our long term growth. This means lowering taxes for individuals and businesses, and investment in infrastructure, military modernization, and energy research.
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Romney on Auto Bailout
As Congress debates the auto bailout bill, Mitt Romney continues to make the case for a radical restructuring of the automotive industry, and says that just sending checks is not the solution. On Greta Van Susteren’s “On the Record” Fox News show, Romney argued for more power to be vested in the hands of the so-called “car czar,” who would be in charge of overseeing the government’s “investment” in the companies.
He also addressed the issue of ethics and accountability in the wake of Illinois Gov. Rod Blagojevich’s arrest on corruption charges. Romney said personal examples have to be set by individuals in high office, sometimes going beyond what the law requires, and he called on President-elect Barack Obama to ban the immediate family of his Cabinet and senior White House staff from lobbying.
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Stumping for Chambliss in Georgia
U.S. Senator Saxby Chambliss, running in a Dec. 2 runoff election in
Chambliss cautioned his supporters against overconfidence, and said the Democrats were more organized than in previous years. Romney told a crowd of 350 people at the
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Romney Calls for Auto Biz Restructuring
Back during the
Today, in a New York Times op-ed, Romney repeated that it would be a mistake to give a no-strings-attached check to the automakers, and elaborated on what it will take to turnaround the industry.
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Thank you
This is a quick note to thank you for your support for the Free and Strong America PAC – it made a real difference in the elections. First, it enabled me to travel across the country to campaign, build media and raise funds for Republicans in battleground contests. All totaled, I did events for 33 Republican candidates running for federal office. Your support also helped me in my effort for Senator McCain and Governor Palin – I participated in 37 surrogate events around the country for their election.
In addition, your support permitted the PAC to make financial contributions to over 150 contests at the federal and state level, again on behalf of people and groups who we believe will help keep our country strong and free. We were highly gratified that in these races where we provided financial support we were largely victorious, with a 60 percent win rate.
There is still unfinished business from the 2008 election. We are currently working to help Senator Norm Coleman in the
I want you to know how much I appreciate all you have done to help. It means a great deal to Ann and me, and we believe that it means a great deal to the country as well. Like you, we are very concerned about the direction the nation may take under an Obama administration and a liberal Congress. The work we have done, thanks to you, has kept the conservative flame burning.
The PAC will continue to work for a free and strong nation. During the coming year, I will travel, campaign, appear in media interviews, raise funds, write, blog and do everything I can imagine to stand up for what we believe. I consider it a privilege to have you on our team.
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Romney on the Issues
Governor Romney gave an interview to Fortune Magazine about the economy, trade, global competitiveness and management advice for President-elect Barack Obama. To read it, click here.
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Statement on the Presidential Election
John McCain is a decent and honorable man. He, too, will go down in history as a statesman and a patriot. I am proud to call him my friend. He carried the banner of the Republican Party in a politically challenging year. I look forward to working with Senator McCain, Governor Palin and many other Republican leaders in rebuilding the party nationally so that it can once again contribute to the great strength of our country. Together we can meet the challenges of a new century and leave our children and grandchildren with an
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