The SPEAKER pro tempore. Under the Speaker's announced policy of January 5, 2011, the gentleman from New Mexico (Mr. Pearce) is recognized for 30 minutes.
Mr. PEARCE. Mr. Speaker, I appreciate the opportunity to address the House on this historic day, this historic day when we have had the entire body read the Constitution of the United States. As that process went on, there was some wonderment in the audience about why we were doing it and what it would mean. But as I listened to the different bipartisan Members reading the Constitution, I felt a gravity come through the institution that we began to listen to and hear and read the words of our Founding Fathers as they set us on this great experiment called the American Republic, the Republic which was turned loose for the first time, a government of the people, by the people, and for the people.
And on this historic day, we have to contemplate what our tasks are as they lie ahead. For myself, I see the most important thing in front of us as being economic growth, jobs; and we have to wonder what we're going to do about that.
As I traveled around the district, after the election, we did--we have 18 counties, and we did 18 different town hall meetings, listening to the people of the district after the election. And the overriding concern is what are we going to do about jobs and what are we going to do about the economic future of the country.
I think people are alarmed at the policies that they have seen come out of Washington. They're alarmed at the spending. They're angry that Washington has not been listening, and they're just upset with the policies in general.
The last election sent two very clear messages: number one, you, in Washington are not listening to us; number two is that we don't like what you've been doing.
So, as we contemplate the future, we have to try to get our hands around the economic growth question, and we have to ask ourselves why do we not have job creation at this time in our history.
As a business owner, I can tell you that the most important thing that we face right now is uncertainty. Now, that uncertainty originates from inside the government, so our government is doing the things which freeze our job creation in its place.
The uncertainty arises on two basic fronts. First of all, taxation, and second, regulation.
And so our friends across the aisle were just asking, why are we talking about the health care bill when that's been debated and discussed? If we narrow it down to job creation, if we narrow it down to the economic uncertainty or certainty, I hear business owners every day saying, we're going to have to lay off one or two people, maybe up to 10 percent of our workforce. Maybe we're going to have to lay off more to get below that threshold because we cannot afford the mandates that are given to us in this health care bill.
So, number one, that's taxation and uncertainty all in one piece. The health care bill hires 16,000 IRS agents, but does not hire one doctor. You can always tell by the functionality, not by the name of a bill, what it does, but by the functionality. And when it hires 16,000 IRS agents and no doctors, you can guess that it's more about taxing the American public than it is about providing health care. And we're seeing that play out in the job market across the United States.
People are frozen into place, wondering what it's going to mean in additional cost for their companies. So rather than leaving those people on the payroll, they're actually shrinking the payroll at a time when we need employment; 9 1/2 to 10 percent unemployment for extended periods of time is not what makes people secure about the future. So that's one piece of the health care bill.
The second piece of the health care bill that is freezing job growth and job creation in its tracks is the regulatory environment. This is a time with baby boomers moving into retirement age, retirement age brings more expenses, more health care costs, and we should be seeing a growth in jobs in the health care industry nationwide. But instead that industry is frozen regulatorily. People don't know what the future is going to bring, and so that job growth that should be occurring to take care of our seniors is actually frozen in place by the regulations in this bill.
So, again, we began with the idea that we want to create jobs and grow the economy. We have to assess those things, those elements which are creating the impediments to growth, taxes and regulation. Then we can walk through our economy one section at a time to find the same thing is occurring, and we would begin to understand more clearly and more definitely that our government is the problem in job creation.
For instance, if we took a look offshore, we all saw the problems with BP. That was on the TV every day. And I think BP should be 100 percent accountable and responsible.
It was my business--my wife and I had a service company, we fixed and repaired down-the-hole problems in oil wells. So we're familiar with the things, the decisions that were being made by the company out there as that well progressed towards a catastrophic failure.
Now, I do not believe--even though I think BP should be accountable--I do not believe that we should have killed one job in relation to that. When an airliner crashes, we don't stop all airlines. We bring the Nation's best people together, we determine what happened, and we determine how to make it not happen again. That's what we should be doing offshore. We should be bringing the Nation's best together, letting them analyze the problem, and then making sure it does not occur again.
But instead, the Obama administration implemented a moratorium, and that moratorium shut down the drilling offshore. We have 33 deepwater platforms. Those deepwater platforms cost billions to make, sometimes 15 years to manufacture them, and we have now shut them down; no economic activity at all.
Now, any business will tell you that they've got to have revenue from their investment. And so now then those deepwater rigs are beginning to steam away at about two or three knots per hour to foreign countries. Some have already gone to Africa, South America; and those jobs will never occur offshore in the U.S. again. I think that that's an over-response from the Obama administration, and I believe that one of the things this Congress should do is pull the pendulum back to the middle.
Yes, we should protect our environment. Yes, we should hold the companies accountable; but, no, we should not have killed one job. So I think in the early days of this Congress, we should make that a clear differentiation between the parties or between philosophical views of how to return the country. I think that we should make those clear distinctions that this group of people should be back on the payroll; and, yes, we should keep our environment clean, and we will hold those who make problems accountable.
And I think the American people are looking for that balance, that pendulum to come back toward the middle to where we say we can protect, we can preserve and we can create jobs simultaneously. And that is one of my sincere hopes that we begin to do this in these early days.
There's an economic truism that says when you raise taxes, you kill jobs. When you lower taxes, you create jobs. People would say, well, how do we create more jobs? The answer is, if you really want to do it, you should lower taxes. And that's what this bill was saying right at the end in the lame duck session to extend the Bush tax cuts. It was saying that we should not raise taxes on any single American.
Now, you have the partisan debate that says we shouldn't be lowering taxes on billionaires. Well, frankly, there are very few of those. Many of the people who fall in that $250,000-a-year and above income are simply small business people.
For instance, just last week, we had a dairy owner saying, you know, we run $1 million a month through my small dairy. We only have 50 or 60 employees, but it costs us $1 million a month to milk cows, to pay the feed and, hopefully, we get enough revenue. And yet these are people that you're going to drive the taxes up on. As you drive taxes up on your job creators, what you do is you take away their ability to create more jobs.
Now, if any of you have any cash left in the bank, which is questionable at this point, you wouldn't know that cash in the bank has almost zero worth. You get 0.0025. You get one-quarter of 1 percent interest on your money in the bank. So any company today is looking to reinvest its money to create cash flow, rather than holding cash in the bank.
But the uncertainty, the tax uncertainty and the regulatory uncertainty causes us to be uncertain about the future, and it causes us not to create jobs. And so we, in this body, have a tremendous obligation and a tremendous responsibility and even the--we can create the right perception, the right certainty if we'll simply take the right steps to just cause the mental framework of America to say, yes, we now know where we're going in the future; we now can invest with a certain amount of predictability.
And I think that it is our God-given responsibility at this point in our history, to do everything we can to start rebuilding our economy. So there are those who would say, but we can't do that. We might take jobs back from some foreign country.
The entire world's economy takes its heartbeat from the U.S. economy. We're about 25 percent of the world's economy.
I was in Germany several years ago to visit the soldiers in Landstuhl who had been wounded. In the evening time we met with about 100 different German corporations and they said, please fix your economy. When you, the U.S., sneeze economically, we, the world catch flu economically.
So that gives you some understanding of our responsibility to fix our economy. So, systemically, I think that we should walk through each industry one at a time to see what this government has been doing to kill or freeze jobs. I think that once we look offshore and realize that we are killing those jobs, we are sending those jobs to, say, Venezuela--I'm not sure who among us would want to do that, but that's, in effect, what is happening--I think that we should do what it takes to bring those jobs back.
I think then, systemically, as we work our way through the country, we should ask ourselves about the 27,000 farmers in the San Joaquin Valley, 27,000 farmers that used to make their way, make their payments to the bank, make payroll, buy fertilizer, buy seeds, buy new tractors, invest in diesel, invest in repairs of the tractors. That's the whole growing economy. But a couple of years ago, because of the 2-inch silvery minnow, that entire economic region was simply shut down; that is, we are choosing all on behalf of a species preservation and none on behalf of the human species' job creation.
I think that the American people are expecting us to find the balance. I think they are expecting us to keep the species alive, maybe in holding ponds and release them by the millions into the rivers, but I think they are expecting us to find a solution to the job creation in the country. And I think that we can do it better than by simply saying, by some judge's order, that an entire economic subculture is simply going to disappear.
Now, the farmers haven't been working in a couple of years. Many are on assistance. They are not making their payments for the land. The banking system is less stable in the region. And, in the process, we are importing food which is far less safe to consume. We are importing from Central America, South America, maybe Mexico, and we have no control over what pesticides they use. So we have been seeing increasing inputs of food into our economic system here in the U.S. which are less safe. We saw the lead poisoning from China. We see these things every day. Why we would do that on behalf of some rigid philosophical viewpoint is simply exasperating Americans at this point.
Another issue in which we should look, if we are systemically looking at the way our economy is being frozen in its tracks, is our entire timber industry. We used to have a thriving timber industry here in this country. In New Mexico, we had a thriving timber industry that was almost as big as the oil and gas industry. We employed 20,000 people in the timber industry at one point. Today, New Mexico, like many of the other States, employs zero. We have nobody working in the timber industry.
Now, in full disclosure, during the last campaign I did have a guy come up and say, ``That's incorrect. We have eight.'' He said, ``I started a small lumber mill, and we are processing small diameter trees and we hired eight people.''
But imagine what would be going on in New Mexico if we had our communities with those timber jobs that used to be there. Our tax base would increase, the number of jobs would increase. We would have people paying Federal income tax, State income tax. But instead, those economic potentials have been shifted away to another country.
Now, I love the Canadians, but I think that we should have the jobs in New Mexico that we shipped to Canada. The idea, when we put the spotted owl regulations into effect, was that we were going to send these jobs to third-world countries. That's not what happened. They went to the economically closest neighbor, the one with the least transportation costs, and we gave the jobs to them.
I think that in this country people are tired of our government choking down the job base, the economic base for different regions, and we can work our way across the country and assess these.
I think the American people are expecting us in this new Congress, as we go through the Constitution as we read it on the floor, I think they are expecting us to redesign and reinvent government. I think they are expecting us to take a fresh look, do a forensic audit of the entire government to see what is working properly and what is working improperly. And when we do that, I think they expect us to cause efficiencies to occur in the government and cause efficiencies in the regulatory framework to where we can protect the species, protect the environment, protect the worker, and have the job creation on the other side of the pendulum, find that spot in the middle where we can do both.
I think Americans are alarmed, I think that they are afraid, and I think that they are angry over the way that Washington has been functioning. The last election said so. I do not think the last election was about Republican politics. I think it was a message that we
want things to straighten up in America.
If we are going to straighten things up in America, the most important thing to do is set about job creation and economic growth. If we will grow the economy about 3 percent to 3.5 percent--and that's what we have averaged for the last 70 years, so understand that that's not an unachievable goal. But if we will grow our economy in that range, then all the problems begin to dissipate. The shortages and budgets in the Federal Government begin to dissipate. The shortages in our State budgets begin to dissipate. That is the only answer. I have never seen a company save its way to prosperity.
So I agree with our leaders and I agree with the Republican Party that we should be looking at spending cuts throughout our government. We should be finding more efficient, more effective ways to find governance. But I do not think we can find our way to prosperity in simply the budget cuts, but instead we have to look at tax certainty and regulatory certainty to create the economic growth that is there.
Now, I said earlier that tax cuts create jobs, and you might want to know how that actually plays out. One guy in Artesia, in New Mexico, Mr. Swift, said it most clearly. He said: ``I drive bulldozers. For me to create one job takes $340,000. Now,'' he said, ``if the government is taxing away my profits, then it takes longer to accumulate the $340,000.'' He said, as I mentioned earlier, ``That money in the bank is absolutely no use right now. I would rather have it in the bulldozers. But the government takes it and taxes it away, and then it takes me longer to create a job.''
So you see this stagnant economy one job at a time because we are taxing too high, we are spending too frivolously as a government. And the American people are looking for solutions, and I think that we, as Republicans, have the right idea in tax certainty, regulatory certainty. And the job creation will begin then from the private companies.
Now, people have asked: What about the stimulus bill? Well, the stimulus bill was never going to create jobs, because what it does is it taxes away from that bulldozer operator who was going to create the job with his $340,000, and then it gives that tax money over here to someone else. And they create jobs, but just for a short time, because if they only created jobs with that input of stimulus money, then that's not a legitimate long-term job in the first place.
What we are looking for is sustained economic growth from jobs that come by private companies investing private capital. This is a capitalist society. Capital is the building block, and capital is generated by profits. As we tax away the capital, then we convert ourselves into a stagnant, nongrowing economy.
It's all fairly basic, but it just gets confusing when we here in Washington want to take the money from our job creators and spend it ourselves. There is something in politicians that seems to thrive on taking your money and putting it here to create our idea of right and wrong. Let the American people free. Let the American people have their tax money back and they will begin to invest it in growth opportunities.
How many of us are involved in the stock market? We do not want to invest our money in uncertain stocks or uncertain bonds. So the idea of certainty plays out all the way through the investment spectrum, from just your basic small guy buying into the stock market to your small business person who wants to invest in a piece of equipment, a pickup truck, a new room in his office, a new office for someone to provide some service at, a new computer so he can bring on a new IT person. Those are all examples of private investment, private capital creating jobs in the private market.
Now people always say, Well, what about those jobs? If we raise taxes, we can create more jobs over here in, say, teaching in our schools. Or maybe hire more government agents over here in the Department of Transportation or wherever.
Again the basis of any economy cannot begin at government spending. It has to begin in the private market. When we in the public sector, when we in government take more than generally somewhere in the range of 20 to 22 or 23 percent, what we do is we stifle growth of the economy.
You can look at the full state-run economies. The USSR was a good example. They were above 50, 60 percent. Their government took in that much of the gross domestic product. They eventually collapsed because there was no growth in jobs, no growth in revenue, and then we had a simple failure of the economic system.
Now as we convert from more a private market into a government market, we're going to see the increased pressures of stagnant economies because, again, we're taxing away that ability for private firms to invest private capital. We can never take money from private companies, put it into the government and have the government to run companies.
I give an example that if the government thinks it can run a company, let's let it fix the post office first. That's a business operation that it's in. Maybe you think the post office is running well, but many would disagree that it does.
Another example of why government shouldn't be in business is Medicare, Medicaid. We have been told here in this body that Medicare loses about 20 percent to fraud every year. That's about $90 billion. Another $60 billion a year on Medicaid fraud. That's just fraud. That's not waste. That's people cheating the system.
The example was given by 60 Minutes a couple of years ago by a guy in Florida who was making $400,000 a month selling things he didn't really own to clients of the Medicare system. Now they did exist and they had numbers. And so he had a store front because he said the government inspectors would drive by and they would drive by to see that I actually was there and had a store front but he said I never owned any inventory. So he never had any inventory, selling fictitious things to real Medicare patients, he makes $400,000 a month. He said on this TV interview, yeah, you caught me and I'm going to jail for 12 years. But there are 2,000 people just like me here in Miami. While I'm in jail, I'm going to lease my list, my mailing list of Medicare patients, to someone else who's going to do the same thing.
If a business were to do that, they would be out of business within the month. But government doesn't ever go out of business. All they do is increase your taxes and you as a private citizen are sitting there trying to figure out around the dining room table how are we going to make ends meet and the government is simply pouring more money into a system that is leaking it so badly through the fraud and through the abuses that we're never able to have the program function correctly.
The government at this point needs overhaul in a serious way. I think, then, in addition to growing the economy, in addition to creating certainty in regulations and in taxation, one of the great responsibilities this Congress has is in oversight. In that oversight capacity, I suspect that we need to deal with these leakages out of the system that are being taxed away from hardworking families struggling to make ends meet and maybe, maybe just going down a bit on their taxes where they're not trying to sink underwater themselves.
One of the regulatory things that we should do is take a look at the way our banking regulators are operating. What our local banks are being told by the regulators that come from here in Washington, D.C., is that if you make one bad loan, we're going to come take your bank away from you. What that has done is frozen our banks completely in their tracks. They're afraid to lend because that might just be the loan that goes bad on them and then they lose their entire bank. We've seen examples like that across the country. And so our regulators right now again are creating great uncertainty among banks who would be giving the loans that would keep small businesses going; but instead they're afraid, they're uncertain, they don't make loans, and small businesses have the capital that they need to keep operating choked off by a regulatory framework that is wrong.
These are the things that I think compel us in this Congress to do the right thing. Americans are not expecting magic. They're not expecting for us to do the unimaginable. Just start choking off the abuses, choke off the fraud, create a little certainty in the economy so that people can begin to hire, so that our economy will begin to grow, and as it grows, Medicare begins to work better again, Social Security begins to work better if we grow the economy, local and State budgets begin to
work better if we grow the economy, and our national budget begins to work better if we choose as a Congress, and there will be many choosing here to obstruct that because they feel that it is somehow wrong to give tax cuts. If they choose to obstruct it, I think we have deep economic troubles lying ahead.
So for me, it's an easy question. If we don't grow, you have great troubles lying ahead, then let's grow. Let's pull out the stops, let's find those balance points in regulation, let's find the taxes where we can lower them to create more certainty and more job growth, let's begin to pull those manufacturing jobs back from around the world that have disappeared. We've driven them out through our overregulation and overtaxation. And I think when we do that, we will begin to see that this economy will grow and the world economy will grow along with us. If we choose not to do it, I think that we have those troubled waters ahead with higher unemployment, higher taxes, greater dislocation in our budgets nationally. I think then that we're going to see more printing of money. As they print money, then we find that the money in your savings accounts begins to dissipate. We've seen almost $2.6 trillion printed in the last year and a half or two by Mr. Bernanke. I think that Americans are alarmed at the prospect of hyperinflation.
So, Mr. Speaker, as I conclude tonight, I would just like for this body to really contemplate the risks on the one side that we face but the potential for optimism on the others. I believe that prosperity is possible, but I believe prosperity is a choice. It's going to be a choice on the part of this body as we move forward through the next months.
So our friends on the other side of the aisle will complain about our consideration of health care, and yet all we are trying to do is create tax certainty and regulatory certainty. All we're trying to do is reverse a government takeover of part of the economy in order to create jobs. To me it makes sense. And I understand the arguments from the other side and appreciate that they come with a different point of view.
But I think Americans are looking for us to set aside the partisan differences that we have and to work as Americans. We run as Republican, Independent or Democrat. That's accepted in the American political spectrum. But what's not expected is that we come here and operate with those same partisan viewpoints.
So let's set aside the partisanship now at this point, let's begin to work as Americans to do the right thing, grow the economy, create jobs, give the younger generations a sense that they have a place in the future, that the things they are working for will actually materialize, that there is a ray of hope.
For myself, I have an absolute belief that our economy in the future is going to be better and that there are great days ahead. Winston Churchill's quote gave me that belief. He says, ``You Americans always do the right thing.''
``After you've tried everything else,'' he says. We've been in the process over the last 50 years of trying everything else. Now it's time for us to get serious and do the hard work of getting the government in control, shrinking the spending, lowering taxes, creating regulatory certainty, so that this free market can continue to grow and expand through the next generations.