The Page by Mark Halperin | TRANSCRIPT: Bloomberg Outlines Super Committee Proposals.
“Thank you, Elaine and Neera, and good morning. This happens to be Election Day, although there aren’t too many big contests today – unless you count Dancing with the Stars. I want to thank both the Center for American Progress and the American Action Forum for hosting us – who said there’s no bi-partisanship in Washington? But it’s always nice to come to DC – for a few hours anyway.
“I’ve come here as a concerned citizen, like all of you, and as an entrepreneur who dedicated 20 years to building a company and as the Mayor of 8.4 million people, many of whom are deeply worried about their futures.
“Nearly 40 percent of my constituents are immigrants. They came to America – and to New York – for the opportunity to work and to build better lives for themselves and their families. That’s the promise of America: a nation of dreamers and strivers; we keep our eyes on the stars and our nose to the grindstone. We understand that success requires hard work – there’s no free lunch.
“That’s true in New York City, and it’s true in towns across America, except one: Washington.
“For too long, Washington has operated on the ‘something for nothing’ principle. Both parties have promised their constituents the world – and given them debt and a sluggish economy and anemic job growth. They’ve adopted ambitious programs – without any serious way of paying for them. They’ve promised to produce and protect jobs – and for the most part, the elected officials have their jobs, but right now, there are 14 million everyday Americans who can’t find work, and more who have stopped looking.
“Both parties preach fiscal responsibility, and yet the national debt stands at $10.3 trillion. That’s about $34,000 for every man, woman, and child in the country and it’s growing by $4 billion – every day. If our current tax and spending policies hold, in 10 years the national debt will be $21.5 trillion, or about $72,000 per person.
“Thanks to the ‘prudence’ of the two parties, the Federal government is running annual budget deficits of $1.3 trillion, which means it’s borrowing one of every three dollars it spends.
“To put that in perspective: if you made $40,000 a year – would you spend $60,000? Not for long you wouldn’t – because no bank would continue lending to you.
“But Washington doesn’t have that problem. It effectively prints money, while the rest of us have to earn it. And so even during the good times, when responsible management of the budget would’ve meant saving money, Washington was gorging itself on debt.
“In 2000, the federal government took in $2 trillion in revenue and spent $1.9 trillion. In 2010, the federal government took in $2.3 trillion in revenue and spent $3.6 trillion. That means, over 10 years, our revenues increased by 15 percent while our expenses increased by 80 percent.
“Spending money we don’t have seems to be about the only thing the two parties can agree on, but it is threatening the very future of our country. Why? That’s what I’d like to discuss today: Why the era of ‘Something for nothing’ has to end – and end now – and what it will take to do it.
“For the past few years, government has attempted to stimulate the economy largely by deficit spending and tax cuts – and I think it’s fair to say the results have been, at best, mixed. Even though we’re in better shape than Europe, far too many Americans are still out of work. Far too many families are still having trouble keeping up with their bills. Far too many small businesses are still struggling to keep their doors open – and they are responsible for about half of all jobs in America.
“By now, it should be clear that more government spending and tax cuts cannot stimulate the job growth we need to regain economic stability. We’ve already crossed that bridge – and borrowed too much.
“Likewise, consumer spending cannot stimulate the growth we need to regain economic stability – because consumer debt remains high. Both government and consumers have balance sheets that are heavily in the red. Neither has the money to lead an economic recovery – but luckily, one group does: business.
“Unlike in the run-up to the 2008 crash, where businesses took too much risk, today they are not willing to take risks we need them to – and the result is that a lot of capital is sitting on the sidelines. Why this is happening is not something that government leaders seem to fully grasp – and as someone who has been in both business and government, I’ve seen how the two sides often talk past each other.
“Last week, at Senator Michael Bennet’s request, I convened a dinner with a bipartisan group of Senators and New York business leaders. We had a very frank discussion about the economy and how Washington is handling it. Some of the business leaders expressed the concern that they are not being heard in Washington – and they are half-right.
“They are being heard – but they are not being understood. Hopefully, this morning I can do a little translating.
“Generally speaking, major American companies are not short on cash. But one of the big reasons they are not investing is that they are short on confidence in the Federal government’s ability to manage macro-economic policy.
“Companies do not make major investments when the future of tax and regulatory policies are so up in the air. Every CEO and business leader that I speak with says virtually the same thing: They are not going to make major investment decisions until they know how Washington intends to grapple with our huge deficits. And right now, they have no idea how or if that’s going to be accomplished.
“That uncertainty is a major drag on job creation – because the price of uncertainty for business is paralysis. Decision-makers abhor a lack of clarity. You can price tax increases and labor costs into your business plan and still invest and grow.
“But if you don’t know what’s on the other side of the ledge – you don’t jump off it. You sit and wait – and that’s what companies are doing. Companies are expressing a vote of no confidence in Washington because of the lack of certainty they face, and we see the effects in the lack of job growth and investment.
“When business leaders talk about uncertainty, they are often talking about how healthcare reform or financial regulatory reform will end up being implemented – and those questions are real impediments to growth.
“But as important, and the subject for today, is the broader uncertainty that exists about the country’s long-term fiscal stability. There is widespread recognition in the business community that we have to make big changes – now – or risk having big changes thrust upon us in the form of further credit downgrades, high inflation, or unacceptably severe austerity that would harm the most vulnerable Americans. So – what does the business community hope to see out of Washington?
“Nearly every CEO I talk with says the same thing: If the Federal government passed a real deficit reduction plan – and we’ll talk about what ‘real’ means in a minute – business leaders would respond just as they did in the 1990s, when President Clinton and Congress adopted a long-term deficit reduction plan that gave businesses more certainty about the market. That sense of greater certainty – that confidence in the future of the country and the stability of markets – was then and is now, worth its weight in gold.
“But so long as the Federal government continues running huge deficits, and engaging in kabuki dances every few months about how to fix them, business leaders will be less likely to make major long-term investments that would produce jobs.
“One of the reasons this message is not penetrating the Beltway is that too many elected officials have not spent enough time in the private sector to know that investment decisions are about more than dollars and cents. They are about expectations – expectations of where the market is moving, and in which ways the government will push it.
“That’s why today, I believe the best economic stimulus is fiscally responsible, long-term deficit reduction that sends a clear signal to the private sector about Washington’s commitment to economic stability.
“Real deficit reduction means more jobs today and tomorrow. But real deficit reduction requires real political courage – and that, unfortunately, is the biggest deficit we face.
“As we all know, the Super Committee on deficit reduction has until November 23rd to come up with recommendations for achieving $1.2 trillion in savings over the next ten years. To put that in perspective: that would shrink our deficit by about 13 percent. That’s it. A drop in the bucket. And the Federal debt will continue to grow.
