American Enterprise Institute
11:04 A.M. EDT
THE VICE PRESIDENT: Thank you so very much. Thank you for this wonderful opportunity, and I want to thank Arthur Brooks for that mercifully short introduction. (Laughter.) You said 20 seconds; I think it was actually shorter.
But I appreciate him so much, his friendship. So to Arthur, to the board of trustees, to the esteemed scholars that are gathered here today, to all the distinguished guests, it is an honor to be here at the new headquarters of the American Enterprise Institute. (Applause.)
I don’t know where he slipped off to. I know he just headed up — there he is right there. I have to tell you there is an old proverb says, there is a friend that sticks closer than a brother. And during my days in the Congress when we first became acquainted, during my years as governor of Indiana with periodic phone calls, I just want to say I hold Arthur Brooks in the highest professional and more importantly personal regard. He is a friend. He is a mentor. And he is a great, great friend of freedom. Arthur, thank you so much. Appreciate it. (Applause.)
And I want to thank all the patrons of American Enterprise Institute for your support. You are a distinguished group of men and women, and we’re grateful for the generosity that has made the extraordinary work now three-quarters of a century happen in the halls of this place.
I hold you all in high regard, but I would confess today maybe none more so than someone who I’ve also had the privilege to know for many years, who has been a patron of American Enterprise Institute. He has been a champion for educational choice. He has been a champion for our most cherished ally, Israel, and the contributions that Roger Hertog has made to the life of this nation and to freedom will benefit this country for generations to come. Roger Hertog — would you all join me in thanking Roger Hertog for his many contributions to the life of this nation? (Applause.)
Thank you for that. Thank you for such a warm welcome.
And I bring greetings from a friend of mine, who is a leader who is fighting every day to unleash the boundless potential of this free society, the 45th President of the United States of America. President Donald Trump wanted me to say hello to everyone at the American Enterprise Institute. (Applause.)
The President sent me here today to say thank you — say thank you for your strong support of our agenda of less regulation, lower taxes, more prosperity and more freedom.
But before I get started, let me also just take a moment to thank the American Enterprise Institute for the unique role that this institution plays in American civic and public life.
It’s amazing to think that when AEI came to Washington 75 years ago, this robust marketplace of ideas that exists today, a thriving network of think tanks simply did not exist. Instead, policy thinking in our nation’s capital was too often dominated by a stale intellectual consensus, a governing elite in Washington, D.C. that was too often too resistant to fresh ideas and too friendly to centralized government and bureaucratic management.
The American Enterprise Institute from its inception here in Washington, D.C. challenged the status quo. And to this day you stand without apology for those great American ideals of human dignity, the expansion of human freedom, the pursuit of peace through American strength.
Through this work, AEI has inspired and informed generations of conservatives to join the fight for free enterprise and constitutional democracy in America. I’ve seen firsthand the scholarship and the generosity of the men and women gathered here today. I’ve seen how it’s impacted — the work of AEI has literally impacted not only our nation’s capital, but capitals of states all across the country. I would submit to you that the work you do here at AEI is crucial to America’s future. So give yourselves a round of applause for all the great, great work that you’ve done for so many years. (Applause.)
And I’m here today to assure you that President Trump and I share your commitment — we share your commitment to those high American ideals, and we share your commitment to a boundless American future.
As you all know well, we had our work cut out for us when we took office on January the 20th. For far too long, the American people were enduring an ever-growing federal government that seemed intent on directing virtually every facet of American life, while too often failing to fulfill its most essential obligations to the American people.
Suffocated by excessive regulation and a punitive tax system, American companies and industries too often moved offshore, taking jobs and opportunities and futures with them. Wages stagnated now more than a decade and a half. Our economy stalled. The most powerful economy on the face of the Earth grew by less than 2 percent over the eight years that proceeded our new administration.
In the midst of all of that disappointment, the American people struggled — they struggled to understand why America seemed unable to get its footing after the Great Recession in 2008 and before.
In far too many communities across the country, from rural America to inner cities, economic mobility, the dignity of work came to be seen as the privilege of a few, rather than the birthright of every American, which AEI knows it to be.
But in the first nine months of our administration, President Trump, I’m pleased to report, has taken decisive action to restore freedom, opportunity, and prosperity for every American, and it’s already making a difference.
To defend the principles of limited government, the President has been busy appointing strict constructionists to our federal courts at every level, including the newest justice of the Supreme Court of the United States, Justice Neil Gorsuch. (Applause.)
And to revive America’s economy, our administration has been rolling back regulations that stifle American businesses and have eroded opportunities for working families for far too long.
Before this administration, only one President had ever signed one piece of legislation passed under the Congressional Review Act. I was actually there for it. I was a freshman member of Congress in 2001. Some of you may remember the ergonomics regulations that emerged out of the Clinton administration in its waning days. It looked to cost American businesses hundreds of millions of dollars. And with one fell swoop, the Congress where I’d just come to work took the effort to reverse that through the Congressional Review Act. It had never been used again until President Trump took office. And working with the Republican majorities in the House and Senate, I’m pleased to report, President Trump has already signed 14 different bills under the Congressional Review Act, rolling back more than $18 billion in regulatory costs on American businesses and American free enterprise. (Applause.)
In fact, this year alone, federal agencies have gone on to cancel or delay 860 planned regulations. President Trump also, as we announced recently, has charged every Cabinet agency with achieving a net reduction in federal regulatory costs and burdens by the end of 2018. It will be the first time in American history that the Code of Federal Regulations got smaller.
At the same time, our administration has been busy unleashing American energy. In one of our first acts in office, President Trump approved the Keystone and Dakota pipelines. Earlier this month, we announced we’re going to repeal the so-called Clean Power Plan. And President Trump put America First when he announced that the United States would withdraw from the disastrous, job-killing Paris climate accord.
The record is clear: This President will never punish the enterprise and prosperity of our people. He will only promote it. And already, the American economy is responding to our actions and our agenda.
Optimism is sweeping all across this country. Patrons of American Enterprise Institute who’ve come here to this first-ever Washington conference can speak firsthand of that optimism and enthusiasm. It’s remarkable to think that for consumers and job creators alike, manufacturers actually haven’t been this confident according to surveys in more than two decades.
Businesses large and small from the outset of this year have created more than 1 million net new jobs since, and unemployment is at a 17-year low all across America. (Applause.)
The stock market is setting records — reaching 23,000 and creating nearly $5 trillion in new wealth in less than one year. And after more than eight years of less than 2 percent average growth, in the second quarter of this year, the American economy grew by more than 3 percent, and we’re just getting started.
The critics said it actually couldn’t be done. I remember those days on the campaign trail, Arthur, where President Trump would talk about getting the economy growing again at 3 percent or even 4 percent, and I remember reading the critics who would say that to get the American economy back to even 3 percent would take years. It took about three months because that’s the strength of our ideas, and more importantly it’s the strength and ingenuity of American free enterprise writ large.
But as AEI has understood throughout your history, as we focus on prosperity and a boundless American future, we do recognize that security is the foundation of our prosperity. And I’m here to report that this President has also taken decisive action to ensure the safety and security of the American people in the early days of this administration.
President Trump has already signed the largest increase in defense spending in nearly 10 years. And as we speak, we are working with the Congress to pass the largest investment in our national defense since the days of Ronald Reagan. (Applause.)
And I’ll promise you: Under President Donald Trump, working with this Congress, we’re going to rebuild our military, we’ll restore the arsenal of democracy, and we will once again give our soldiers, sailors, airmen, Marines, and Coast Guard the resources and the training they need to accomplish their mission and come home safe.
Now while critics engage in empty rhetoric and launch baseless attacks, this President is achieving real results on the international stage through renewed American strength.
Our President has put historic pressure on the regime in Pyongyang, and today, North Korea is isolated as never before. With China doing more than they have ever done to bring pressure to bear — economic and diplomatic pressure to bear on the regime in North Korea.
President Trump has put Iran on notice. And this month, he announced that our administration will no longer certify the disastrous Iran nuclear deal or tolerate Tehran’s support for global terrorism.
In Afghanistan, our President has committed our armed forces to remain engaged in the fight against the Taliban and all the terrorist groups in the region until we eliminate that threat to our homeland and our people once and for all. And as was evidenced in the hostage rescue and the return of a young American family just a few short days ago, Pakistan is responding to American leadership with renewed cooperation in the war on terror.
As a candidate, our President also pledged to “crush and destroy ISIS,” in his words. And today, thanks to the courage of our armed forces, and our allies, ISIS is on the run.
It’s remarkable to think that, three years ago, those barbarians celebrated in the streets of their self-declared capital of Raqqa. They proclaimed the start of a so-called, thousand-year caliphate as they raised their black flags across the region. But today — as I said at the Marine Corps Barracks at 8th and I, as we remembered the 34th anniversary of the Marine Barracks Bombing in Beirut — today those blacks flags fly in Raqqa, no more. (Applause.)
Just last week, American and allied forces liberated Raqqa, and across Syria and Iraq, the caliphate is crumbling. And you can be assured, we will not rest, we will not relent, until our forces hunt down and destroy ISIS at its source, so it can no longer threaten our people, our allies, or our way of life.
The facts speak for themselves. President Trump has restored American strength at home and abroad.
But I came here today to talk about what we believe is the single-most important thing we can do to strengthen the American economy. Before this year is out, with your support, we’re going to cut taxes across the board for working families, small businesses, and family farms, and get America growing again. (Applause.)
President Trump and I are working closely with members of Congress to pass a historic tax cut and tax reform bill this year. As the President said, “our country and our economy cannot take off like they should unless we transform America’s outdated, complex, and extremely burdensome tax code.” And the people here at AEI know of what I speak.
I’ve traveled across America this year. Every place I visit, working families and job creators have told me one thing: They told me that the biggest obstacle to their success is our country’s broken tax code. One after another — I’ve sat at tables in California and in cities large and small with small-business owners and families — one after another have spoken to me about the burden that our tax system places on them and the barrier that it puts in-between them and reaching and achieving their dreams.
The complexity of the tax code is something I do hear a lot about when I’m traveling around the country. Today, taxpayers spend a total of 6 billion hours every year dealing with their taxes. Think about that. About 94 percent of Americans, more than 90 percent of small businesses have to pay somebody to figure out what they owe the government.
All told, just complying with the tax code costs our economy $262 billion every year. That’s more than $800 for every man, woman, and child in America. It’s not just the complexity of our tax code that hurts working families, they bear the burden of high taxes that are imposed on businesses, too.
30 years ago — it’s amazing to think — America had one of the lowest corporate tax rates in the developed world. It spurred an era, in part, of soaring incomes and jobs and growth. But today, we’ve fallen behind our competitors. Our corporate tax rate now is the highest in the developed world. Think about that.
Making matters even worse, our outdated system of worldwide taxation actually penalizes businesses for being headquartered in America by taxing every dollar that they earn overseas.
Our punitive tax system has hollowed out America’s industrial heartland, as well. I’ve seen it firsthand. Being governor of the state of Indiana, serving a rural district in the state of Indiana, I watched over the generations of the way cities that were once filled with American industry and manufacturing and enterprise, were literally hallowed out. And the tax code has been one of the culprits that’s driven that — more than anything else. It’s pushed our businesses to move resources and talent overseas. In fact, it’s discouraged foreign companies from creating jobs here in America, as well.
But those who suffer most in this anti-competitive environment are not the nameless, faceless, businesses of America, they’re really everyday working people who haven’t been able to find an opportunity because of the of the pressures that have been placed on our economy over the last generation. Hardworking Americans who don’t have the luxury of offshoring or moving their tax liability to another country end up paying the price and bearing the burden of bad policies here at home.
them, when American companies and industries move overseas, they’re left without jobs. They’re left with lower incomes, with dwindling hope for the next generation. It’s amazing to think here in this optimistic nation, how many American now will tell people in surveys that they’re not sure their children are going to have an opportunity to prosper more than they did.
But I’m going to tell you what, right now. Under President Trump’s leadership, those days are over. We are going to bring real change to the tax code and we’re going to unleash the boundless potential of the American economy for every American. (Applause.)
To put more money in working Americans’ pockets, to put our job creators back on the path to success, President Trump is committed to sign the largest tax cut in American history. And we’re going to do it this year.
I know you’ve already heard from Senate Majority Leader Mitch McConnell at this world forum. And I’m told Speaker Paul Ryan will be here a little bit later today. Let me tell you how grateful the President and I are to both of these congressional leaders for the critical role that they’ve played in the progress that we have made in so many areas so far this year and for the vital role that they’re playing in moving this historic tax-cut plan before the Congress.
As the President has said, we’re calling our plan “the American model.” Which I thought would play pretty well at the American Enterprise Institute. (Laughter.) It’s pro-growth, pro-jobs, pro-worker, and pro-family, as the President likes to say. And basically, it’s four core principles that I’ll describe to you before I head on my way.
Number one: We’re going to give working families a historic tax cut. Under our plan, we’ll double the standard deduction so that working families pay no federal taxes on their first $24,000 in income. For the typical family of four, that means a tax cut of $1,000 — just to get started.
President Trump also knows that a strong economy depends on strong families. So to provide additional relief to America’s working families our tax-cut plan will substantially increase the child tax credit. It will end the alternative minimum tax, and we will eliminate death taxes once and for all. Death should no longer be a taxable event. (Applause.)
Number two: We’re going to restore simplicity and fairness to our tax code. We’ll cut seven brackets down to three. We’ll make sure that more than 90 percent of Americans can actually file their taxes by themselves on a single sheet of paper. It’s something we’ve talked about for a long time. I remember when I first ran for Congress, Arthur, in 1988, I had dark hair and was thinner, now that I think about it. The truth is we were talking about the postcard tax return, but it’s literally within our grasp now as we develop this consensus plan among leaders in the House and Senate, to simplify our tax code for every American.
As the President has pledged, we’re going to end the special deals for special interests. We’ll eliminate the hand-outs, the carve-outs, the loopholes that just benefit the wealthy and well-connected at the expense of working families.
Number three: This businessman turned President is going to cut taxes on American businesses so that American businesses can compete with businesses anywhere in the world once again. (Applause.)
President Trump really sees it as a competitiveness issue, and it truly is. We’re going to make American businesses competitive again by making the United States the best place in the world to invest, to innovate, to create jobs.
plan will cut one of the highest business tax rates on the planet from 35 percent to 20 percent; it will end the outdated policy of worldwide taxation and enact a territorial system in its place.
And most importantly — you know, I grew up in a gas station business. My dad was involved in a small business in a small town. I was actually a gas station attendant. The first job that I had had my first name stitched into my shirt. Now, for those of you who don’t know what a gas station attendant was — (laughter) — those of you under 30, we’ll stop after the program and describe it to you then. But everything I learned about public service, I learned out on the drive at Ray’s Marathon in Columbus, Indiana. And I was part of a family business, and I know that the majority of jobs that are created in times of economic expansion throughout our modern history have been created in small business.
So under our plan, I’m so pleased to report that not only are we going to lower the corporate tax rate on large corporations from 35 to 20 percent, but we’re going to lower the tax rate on pass-through corporations to 25 percent to make sure that small businesses will have the lowest effective tax rate since 1931. (Applause.)
To give entrepreneurs and businesses even more incentive to invest in America, our plan will also allow businesses to fully and immediately write off the cost of equipment and other capital investments because our businesses need to grow, and grow fast. So this is a pro-business, pro-jobs tax-cut plan.
And lastly, we’re going to cut taxes on, literally, trillions of dollars on American companies that have been locked overseas, so they can invest those dollars in American workers, American jobs, and America’s future.
You know, when I was governor of the state of Indiana, I’m humbled to tell you with the help of somebody who now is here at American Enterprise Institute, Ryan Streeter, we actually cut taxes every single year that I was governor of Indiana. We worked hard to create an environment in that state that — I always used to say about the state of Indiana, we did two things really well: We make things and we grow things. Because manufacturing and agriculture were at the very heart of Indiana’s economy. And while we cut taxes and we achieved record employment before I left office for my current job, the truth is that one of the things that Indiana wrestled with that every other Midwestern state — frankly, most states in the country — wrestled with was that stubborn indicator of personal income. We literally have seen across the country — for more than a decade and a half, we’ve seen wage growth at historically low levels.
And I must tell you that one of the most encouraging things — as we talk about cutting taxes on businesses, and as American Enterprise Institute continues to tell the story of the opportunities this tax cut presents, I hope that you will redouble your efforts and all of the patrons of this great organization will redouble your efforts as you return to your homes around the country to point out what our own Kevin Hassett, and AEI’s Kevin Hassett has found and that is that the best way to give working Americans a raise and the raise that they need and deserve is to lower the tax burden on businesses and job creators in America. It’s truly extraordinary.
Kevin Hassett I think was here for a very long time, and we appreciate you making him available. He’s now the Chairman of the White House Council of Economic Advisers. Recently this month, Dr. Hassett published a study that I commend to your attention that lays out the overwhelming evidence showing that working Americans stand to benefit the most from corporate tax cuts. It’s a story that we have to tell. Because I have to tell you, when I was governor of the state of Indiana, as I’ve traveled around the country, the frustration that Americans feel of seeming to work harder every day but not getting any farther along, I think has contributed to the angst that so many Americans feel in this economy.
And so while we talk about lowering taxes, the President is deeply committed to simplifying and lowering taxes for working families. I would ask each one of you here at American Enterprise Institute: Make the case that when we lower corporate taxes, we’re going to make it possible for working Americans to see their wages rise as well.
In fact, the Wall Street Journal pointed out this morning, many other economists, like Lawrence Kotlikoff, agree with Dr. Hassett that tax cuts for businesses raise wages for workers.
All told, we believe our tax cut for American businesses will boost wages for American workers, and the typical American household can expect an extra $4,000 in their pockets every year.
simple economics, as the scholars in this room can attest: When you cut taxes, when you increase the incentive to work, invest, save, and innovate, and when more Americans are working, when more businesses are growing, hiring, and building in America, productivity rises, wages rise, and the middle class thrives. That’s what President Trump calls a middle-class miracle, and we’re grateful for your support. (Applause.)
you know, it’s not just an academic theory. One of the things I like about AEI is it’s all about taking timeless principles and describing how you can put them into practice. And the truth is, these have been put into practice before. Everything I just described to you about lowering taxes on individuals and businesses and the impact that that has on creating a growing American economy has already been proven before. The Old Book says there’s nothing new under the sun; what will be has been before. Well, this specifically was before.
John F. Kennedy proved these ideas worked. Ronald Reagan proved these ideas worked. And with your support, President Donald Trump is going to prove they work again. In fact, we believe our tax-cut plan has the potential to generate sustained economic growth of more than 3 percent, and spark that “middle class miracle.”
Think about what that might mean. With just 3 percent growth over the next 10 years, we’ll create more than 12 million new jobs and nearly $10 trillion in economic activity. More importantly, the average income for American families will rise by nearly $7,000 over that period of time.
As the President said last week, this is once-in-a-generation opportunity to revitalize our economy, revive our industry, and renew the American Dream. And truly it is.
we need all your help to get it done. And I want to thank all of you, first and foremost, the scholars and the staff at AEI, for what you’ve done to educate the American people about the need for tax cuts already. The truth is many of the best ideas at the heart of the President’s tax-cut plan can be traced back to this very institution. And the research advanced by your scholars has been extraordinary. You could give these scholars a big round of applause, because they sure do deserve it. (Applause.) And the American people are going to benefit from their work.
And I’m here today, on behalf of the President and our entire administration, to say: Whatever you’ve done before, do more. We need you to keep spreading the word. We need you to keep releasing groundbreaking research, continue to make the case that tax cuts are the key to a more prosperous future for every American — a boundless American future.
AEI is renowned and respected for your commitment to follow the facts wherever they lead. That’s exactly why I’m asking for your support of this tax-cut plan — your renewed energies. We do expect the House of Representatives this week to vote on the budget that was passed by Senate just last week. And that will clear the way for the kind of procedural votes that will allow us to move immediately into the topic of tax cuts and tax reform.
And the time between now and the end of the year will close quickly, and so I just encourage you — I encourage you, what you do, do quickly. Go tell that story. Go back upstairs in this fancy new building — (laughter) — you scholars and get back to work. (Laughter.) Start writing those editorials. And speak in the way that AEI does and that your wonderful leader, Arthur Brooks, does. Speak in the plain language of people like me. Speak in the plain language we’re — the President is always very quick — I see Steve Moore back there — the President is always quick to say, he doesn’t like talking about tax reform; he likes talking about tax cuts because he wants the American people to know we are cutting taxes for every American. And when we cut taxes on businesses, it’s going to benefit working Americans. So I encourage you to go make that case.
And also, as I close, let me just encourage all of you just to understand the key role that you can play in laying a foundation in the public debate for making this moment possible.
I truly believe that, with your help, before the end of this year, we’ll have on the President’s desk the kind of tax cuts and tax relief and tax reform that will benefit every American and will open the door to a boundless American future.
As I close, I would just tell you again, it’s a great honor to be with all of you today. I’ve been to the world forum before, but I don’t ever remember being invited to keynote. (Laughter.) And I’m humbled by that. I really am.
In my new role, I’ve been traveling around the country a lot, and my wife and I are continually amazed and grateful for the opportunity to serve in this capacity. And we recognize this is a challenging time in the life of our nation, isn’t it? And it seems you turn on the television and it seems like the American people are more divided than ever before in my lifetime. But I have to tell you, I have my doubts.
You know, over the last month and half the President and I have travelled around the country to areas of this country that have been beset by hurricanes and wildfires and acts of unspeakable violence.
The President, the First Lady, and Karen and I travelled down to Texas and visited this — hurricane-ravaged communities. We travelled to Florida and Puerto Rico and the Virgin Islands.
The President and First Lady went to Las Vegas and then asked us to go to a prayer service a few days later to pray for healing of a community literally torn asunder by unimaginable evil.
And then to see the worst-ever wildfires unfurl in California.
That’s what you saw in the news. But what you get to see when you’re in a position like mine, so what sometimes doesn’t come across in the news, when Karen and I arrived in Texas there was a big-top tent on a church parking lot in a community that was literally leveled by the hurricane. And we had walked through neighborhoods and we ended the afternoon where a church ministry from Missouri had driven down with a couple tractor-trailers full of food and water to support the official efforts that were underway.
So we were walking through the big-top tent, and I could see there was a small number of people in blue shirts and a large number of people in red shirts. So I just asked somebody what the difference was with the shirts, and they said, well, the blue shirts are the people that are from Missouri or from out of town.
And I said, where are the red shirts from?
And they said, here.
Now I mean to tell you there wasn’t a home in that community that wasn’t flooded. And many of the homes were either completely or partially destroyed by this hurricane. And yet, there they were, standing behind tables packing lunches for neighbors and friends.
And every one of them I asked, I’d say, how’s your house?
Oh, boy, it’s hit pretty hard, it’s going to be a while putting it back together.
And I’d say to them, what are you doing here?
And they’d say, well there’s other people that got it worse than us.
Same thing I saw in Florida. Same thing the President and I saw in Puerto Rico. The people whose lives were decimated were still there for each other. When we visited Las Vegas, there were no Republicans, there were no Democrats, there were just Americans hugging each other, holding each other, praying with each other.
I just — I would tell all of you: We have important work to do in the days ahead — important work to open up opportunities of prosperity for the American people; important work to have America standing, once again, as the leader of the free world and leading on behalf of freedom, the defense of our freedom and our allies. But I just want you to go forward with confidence and faith because I can tell you there will always be more that unites us in these United States of American than will ever divide us.
And so, let’s get to work. And let’s have confidence in faith. Faith in the boundless capacity of the American people to revive this economy and create opportunities for their families; for their communities; for their state and their nation. Faith in the leaders who represent our country — on Capitol Hill and the President who leads us from the Oval Office. Faith in the entrepreneurial genius of this country.
And let’s also have that other kind of faith. If you’re of a mine from time to time to bow the head and bend the knee, it would be a good time to do it to pray for America, to pray for a strong, unified America, to pray for an America with boundless opportunities for every America, regardless of race or creed or color or division.
And I know that if we’ll all do that, if each one of us will leave here and do our part: We will make America prosperous again. We will make America safe again. And to borrow a phrase, we will Make America Great Again. (Laughter and applause.)
Thank you all very much and God bless you and God bless the American Enterprise Institute and the United States of America.
11:42 A.M. EDT