It's good to be back home in Michigan. I was born in Harper Hospital, and I grew up here. I can remember my first day at the Hampton School. There were about thirty kids in our kindergarten class. And I imagine that as they dropped us off at the Hampton School each morning, our parents were confident that our future would be brighter and even better than their own. Our parents believed in America's promise. They believed that if you built a good home and taught your kids the right values, if you made sure your kids got an education and were willing to work hard, that your child's future would be prosperous and secure.
In those days, we all believed that the future was full of possibility and prosperity. We felt the joyful optimism that comes from being raised in a land of opportunity, a place where -- with risk and hard work -- anyone can make a better life.
That deep confidence in a better tomorrow is the basic promise of America. Today, that promise is being threatened by a faltering economy and a lack of presidential leadership.
For 36 months, the unemployment rate has been over 8 percent. 24 million of our fellow Americans are struggling to find work. There are 3 million "missing workers" who have given up on finding a job altogether. Home values gone down, foreclosures are at a record high. Our debt is too great, and our opportunities too few.
Everywhere I go in this campaign, I meet Americans who are really suffering in the Obama Economy. You can see it on their faces and hear it in their voices -- they are anxious and scared about the future. I've met moms and dads who are struggling to get by. One works the day shift while the other works at night just so they can make ends meet. I've met kids who are about to graduate college; they're facing student loans and a bad economy, and they are worried that they won't be able to get a job. Everywhere I go, I hear stories that serve as sad reminders of this failed presidency.
President Obama promised he would fix three things.
First, he said he would hold unemployment under 8%; it hasn't been under 8% for 36 months.
Then, he said he was going to cut the deficit in half; he's doubled it.
Third, he said he'd make Medicare and Social Security solvent for future generations. Three years later, he still hasn't offered a serious proposal for either one.
We have not seen a failure to communicate. We have seen a failure to lead.
That's why I'm running for President. I want to restore America's promise. That means more jobs, less debt, smaller government.
In the coming campaign, I am offering more than just a change in policy. I am offering a dramatic change in perspective and philosophy.
Earlier this week, I put forward pro-growth tax reforms that will get our economy moving again. Today, this administration is focused on extending unemployment benefits. But what workers in Michigan and around the country really want is a good job and rising wages. Reforming the tax code is one of the surest and quickest ways to achieve that goal.
First, I will make an across-the-board, 20% reduction in marginal individual income tax rates. By reducing the tax on the next dollar of income earned by all taxpayers, we will encourage hard work, risk-taking, and productivity by allowing Americans to keep more of what they earn.
The businesses that pay taxes through the individual income tax system account for more than half of all private sector jobs in the United States. So this tax cut will encourage businesses to hire, raise wages, and grow the economy.
Second, I will make our business taxation globally competitive. I will reduce the corporate tax rate to 25%. Currently, it's among the highest in the developed world; I will bring it in line with other nations.
I will make the R&D tax credit permanent so we can encourage the kind of innovation that drives economic growth. And I will end the job-killing repatriation tax, so American companies who do business overseas will bring their profits here and invest at home.
Third, I will promote savings and investment by maintaining the 15% rate on capital gains and dividends. I will eliminate the tax entirely for those with annual income below $200,000. These low tax rates will encourage Americans to save and invest -- and they will encourage business investment and economic growth.
Finally, I will repeal the Alternative Minimum Tax, and I will abolish the death tax.
These changes will not add to the deficit. Stronger economic growth, spending cuts, and base broadening will offset the reductions. Middle-income Americans will continue to enjoy tax benefits that favor important priorities, including home ownership, charitable giving, health care, and savings. But there will be some changes in the current deductions and exemptions for higher-income Americans. Those who receive the greatest benefit from rate cuts will see the most significant limits.
These reforms will grow our economy, increase wages, and create jobs.
If we're going to get our fiscal house in order, however, we must also fix our nation's balance sheet. Today, we face $62 trillion in unfunded promises in our entitlement programs. We talk a lot about our $15 trillion of debt. And we've got to tackle that debt. But it's that $62 trillion in unfunded promises that keeps most of us up at night.
A few commonsense reforms will ensure we make good on our promises to today's seniors while saving Social Security and Medicare for future generations. Tax hikes are off the table, and there will be no change for those at or near retirement. But younger generations will enter a system strengthened for the 21st century.
When it comes to Social Security, we will slowly raise the retirement age. We will slow the growth in benefits for higher-income retirees.
When it comes to Medicare, tomorrow's seniors will have a choice among insurance providers, including traditional Medicare. As with Medicare Part D today, the private sector will compete to offer insurance coverage at the lowest possible price. Seniors will then receive government support to ensure they can afford that coverage. And with Medicare, like with Social Security, lower-income seniors will receive the most generous benefits.
Starting in 2022, new retirees will participate in this new system. We will gradually increase the Medicare eligibility age by one month each year. In the long run, the eligibility ages for both programs will be indexed to longevity so that they increase only as fast as life expectancy.
With these commonsense changes, we will have fixed our balance sheet. Instead of $62 trillion in unfunded commitments hanging over America's future, we'll have a balance sheet that is actually in balance.
My administration will also make the hundreds of billions of dollars in cuts necessary to reduce spending to 20% of GDP by the end of my first term. I will cap it there. And then, without sacrificing our military superiority, I will balance the budget.
There are three ways I'll get this done. First, I'll cut programs. I will look at every government program and ask this question: Is this so critical that it's worth borrowing money from China to pay for it?
Of course, we'll start with the easiest cut of all: Obamacare, a trillion-dollar entitlement we don't want and can't afford. It's bad medicine, bad policy, and when I'm President, the bad news of Obamacare will be over.
We'll also cut things like subsidies to Amtrak and funding for Planned Parenthood. We'll repeal the union giveaway called the Davis-Bacon Act to save taxpayers over $10 billion per year.
Second, we will return federal programs to the states. I will send Medicaid back to the states and cap that program's rate of growth. And I will do the same for other programs, like food stamps, housing subsidies, and job training.
States are better equipped to perform all these functions. Once the economy is really growing again, I believe that we should return spending on these programs to pre-recession levels, cap their rate of growth, and give the states flexibility and control. Taxpayers would save money, and those in need would benefit from programs that are more effective, efficient, and responsive.
Welfare reform showed us how well a state-led approach can work. Let's extend that conservative, small-government philosophy across the entire social safety net.
Finally, government itself must be made more efficient. I will shrink the size of the federal workforce by 10% and link the pay and benefits of federal employees to those of their peers in the private sector. Public servants should not make more than the Americans who pay their salaries.
This is a plan to get America back on track. And to get Michigan on track we also need to see a strong and vibrant auto industry.
Let's learn from the lessons of the past. In my view, the industry got in trouble because the UAW asked for too much, management gave too much, and the government CAFE standards hurt domestic automakers. The result was a cost-penalty per vehicle of about $2,000. Even the best designers and engineers could not overcome that kind of cost disadvantage.
As we look forward, the UAW must not imperil the future of the industry. CAFE standards must not be overly burdensome. The companies must invest in new technology and new markets. We should get government out of General Motors so that its future is determined by the demands of the marketplace, not the preferences of bureaucrats.
And Detroit should not just be the Motor City of America. It must be the Motor City of the world.
My economic plans will strengthen America -- and strengthen Michigan.
By making bold cuts in spending and commonsense entitlement reforms, we will make our government simpler, smaller, and smarter. Through pro-growth policies, we will get our economy back on track -- and get our citizens back to work. Taken together, the plan I'm offering represents the biggest fundamental change to the federal government in modern history.
These are conservative, pro-growth policies that will not only jumpstart our economy, but will stop the dangerous slide toward a society that values entitlement over opportunity. We will restore the promise of America. More jobs, less debt, smaller government.
Now, I know that President Obama will criticize my proposal. So be it. I believe the American people are ready for real leadership. I believe they deserve a bold, conservative plan for reform and economic growth. Unlike President Obama, I actually have one -- and I'm not afraid to put it on the table.
My plan for America requires real leadership -- and it calls for sacrifice. It does not require a leader to promise bigger and bigger benefits and something for nothing. It requires a leader to call for sacrifice. And if I'm elected President, I promise you this: Together, we will restore America's promise. Here in Michigan, the future will once again be full of promise and prosperity. Parents won't have to wonder if their children will have a better life. They'll know they will.
Together, we will get our debt under control. We will pursue spending cuts that rein in the deficit, entitlement reforms that tackle our long-term debt, and a pro-growth tax policy that will create jobs, encourage private investment, and foster risk-taking and innovation.
If we pursue the policies I've just described, you're going to see a Michigan with rising home values. Your kids will come out of college and find jobs that are consistent with their skills. Businesses will come here because of your unparalleled workforce. And Michigan will once again be known as an engine of innovation.
I'm not promising that every day will be easy. But I am promising that every day things will get better. Together, we will make America strong again. But to do that, I need your help. Next Tuesday, I need your vote.
If you want to make this election about restoring America's greatness, then I hope you will join me.
If you believe the disappointments of the last few years are a detour, not our destiny, then I am asking for your vote.
Together, let's put America on the path toward more jobs, less debt, and smaller government.
Let's restore America's promise and create a new age of prosperity for the country that we love.
Thank you. God Bless America.