U.S. Sen. John Thune (R-S.D.) today discussed the challenges the economy is facing as a result of stagnant economic growth during the Obama administration. Thune also addressed the Republican-controlled Senate’s ideas to get America’s economy back on track, starting with reforming the tax code and eliminating burdensome regulations.
Thune’s remarks (as prepared for delivery):
“Mr. President, it’s no surprise that the economy continues to be one of the top issues on the minds of Americans.
“The eight years of the Obama administration were characterized by weak economic growth, a dearth of jobs and opportunities, and almost nonexistent wage growth.
“The Obama administration ushered in long-term economic stagnation.
“Mr. President, the Congressional Budget Office predicts that the economy will grow at a rate of just 1.9 percent over the next 30 years – a full percentage point lower than the average growth rate over the past 50 years.
“We can’t resign ourselves to that.
“Resigning ourselves to long-term growth of 1.9 percent would mean resigning ourselves to decades of fewer jobs and opportunities, low wage growth, and a reduced standard of living.
“Fortunately, there are a lot of things we can do to get our economy thriving again and spur economic growth.
“A recent report from the Economic Innovation Group identified one important problem with our economy today – a lack of what the EIG calls ‘economic dynamism.’
“Economic dynamism, as the Economic Innovation Group defines it, refers to the rate at which new businesses are born and die.
“In a dynamic economy, the rate of new business creation is high and significantly outstrips the rate of business death.
“But that hasn’t been the case in the United States lately.
“New business creation has significantly dropped over the past several years.
“Between 2009 and 2011, business death outstripped business birth.
“And while the numbers have since improved slightly, the recovery has been poor and far from historical norms.
“The Economic Innovation Group notes that 2012 – the economy’s best year for business creation since the recession – ‘fell far short of its worst year prior to 2008.’
“This is deeply concerning because new businesses have historically been responsible for a substantial part of the job creation in this country – not to mention a key source of innovation.
“When new businesses aren’t being created at a strong rate, workers face a whole host of problems.
“‘A less dynamic economy,’ the Economic Innovation Group notes, and I quote, ‘is one likely to feature fewer jobs, lower labor force participation, slack wage growth, and rising inequality – exactly what we see today.’
“Restoring economic dynamism would go a long way toward boosting economic growth and providing new jobs and opportunities for American workers.
“One big thing we can do to achieve this is relieve the burden of excessive government regulations.
“Obviously, some government regulations are important and necessary.
“But too many others are unnecessary, and do nothing but load businesses with compliance costs and paperwork hours.
“The more resources businesses spend complying with regulations, the less they have available for growth and innovation.
“Excessive regulations also prevent many new businesses from ever getting off the ground.
“Small startups simply don’t have the resources to hire individuals – let alone consultants and lawyers – to do the costly work of complying with scores of government regulations.
“Unfortunately, over the past eight years the Obama administration spent a lot of time imposing burdensome and unnecessary regulations on American businesses.
“According to the American Action Forum, the Obama administration was responsible for implementing more than 675 major regulations that cost the economy more than $800 billion.
“Given those numbers, it’s no surprise that the Obama economy left businesses with few resources to dedicate to growing and creating jobs.
“Or that new business creation seriously dropped off during the Obama administration.
“Since the new Congress began in January, Republicans in Congress and the president have been focused on repealing burdensome Obama-era regulations.
“So far, we’ve saved individuals and businesses approximately $67 billion and freed them from 56 million hours of paperwork.
“Eliminating burdensome regulations will continue to be a priority for both Republicans in Congress and for the White House.
“In addition to removing burdensome regulations, we need to focus on reforming our tax code.
“Our current tax code is strangling businesses large and small.
“Some corporations escape with paying very little in taxes, but others end up paying the highest corporate tax rate in the developed world.
“Meanwhile, small businesses and family farms face high tax rates, at times exceeding those paid by large corporations.
“Tax reform needs to address these obstacles to growth.
“We need to trim our excessive corporate tax rate to make U.S. businesses competitive in the global economy.
“And we need to reduce taxes for small businesses so that we don’t choke off these sources of growth and innovation.
“Measures like allowing new businesses to deduct their startup costs and expense more of their investments in machinery and equipment would spur new business creation and help small businesses thrive.
“Our goal is to take up tax reform this year, and I am looking forward to that debate.
“Reforming our tax code will go a long way toward restoring dynamism to our economy and encouraging growth, job creation, and better wages.
“There are other growth-boosting measures we can take as well, like removing unnecessary barriers that restrict access to capital.
“Both new and existing businesses rely on capital to help them innovate and expand.
“Mr. President, the last eight years were discouraging years for American workers.
“But the stagnation of the Obama years doesn’t have to be the new normal.
“American workers and job creators are as dynamic and creative as ever.
“We just need to clear the obstacles from their path.
“I look forward to working with my colleagues this year as we make putting our economy on the path to long-term health and vitality a top priority.”