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Remarks at University of Colorado Anschutz Medical Campus, Denver, Colorado

Friday, September 23, 2011

Acting Secretary of Commerce Rebecca Blank
Remarks at University of Colorado Anschutz Medical Campus, Denver, Colorado

Good morning everyone. Thank you for being here so early.

And thank you for that warm welcome, Governor Hickenlooper. Colorado needed someone at the helm focused on economic development and job creation, someone who approaches problems collaboratively and with creativity and enthusiasm. You are the right person at the right time.

The medical campus we’re on today plays a vital role – not just in the health of the people of the Denver area, but in the health of Colorado’s economy.

The 16,500 jobs here support an additional 20,000 jobs in the Denver area.

But your reach far exceeds the city limits. The tour of Dr. Shandas’ biomedical lab and the pediatric heart valve he developed tell that story.

The research done at Anschutz last year resulted in 789 new discoveries and 652 patents filed. Discoveries in your labs were licensed to 188 companies, and 34 start-ups were created, generating $626 million in follow-on capital.

When the President talks about this administration’s commitment to boosting research and development funding to the same share of the economy it enjoyed during the Kennedy Administration, the Anshcultz Medical Campus is a good example of why.

It also explains why Commerce’s National Advisory Council for Innovation and Entrepreneurship has been working with university leaders across the country on strategies to speed scientific discoveries to the marketplace. We want more results like the ones you’ve achieved here.

Doing more to foster innovation – doing more to help create the conditions for discovery – is a critical part of the President’s plan to rebuild America’s economic foundation.

How well we answer that challenge will determine whether America is home to the jobs of the 21st century. It’s a priority central to the country’s long-term economic health.

Unfortunately, as everyone here knows we have a short-term problem, too.

That’s why President Obama recently released The American Jobs Act . Outside experts say this plan will lead to the creation of 1.5 million new jobs. That’s 1.5 million of our friends, neighbors and family members put to work in American businesses large and small.

Since President Obama announced this plan, there have been a lot of different people making a lot of different claims about The American Jobs Act. In fact, some folks complained about it before they’d even seen it.

But here are a few actual facts worth remembering about the President’s plan.
One, every single element of this plan has been supported by members of both parties in the past … and it won’t add a nickel to the deficit. The President laid out a detailed deficit reduction plan earlier this week that will more than pay for it.

Two, this plan would have a tangible impact right now.

And three, we’re asking Congress to pass it right now.

Americans feel a sense of urgency about getting something done to help create jobs. We’re asking the House and the Senate to feel the same sense of urgency.   
In a moment, I’m going to detail a few of the proposals in the President’s plan, and explain why it’s so important for Congress to pass it as quickly as possible.

But I want to place it in a broader context, by talking about where the U.S. economy has been, where we are now and where we’re headed.

II. Where We Were
For many Americans, I imagine it seemed like we were doing OK in this century’s first decade. In some respects we were.  There were folks making a lot of money.

The problem was how few shared in the prosperity and that it came from bubbles in the financial and housing markets.

Job growth in the 2000s, in fact, was the lowest of any decade stretching back to the 1940s.  That's true even if you stopped measuring at the end of 2007, before the recession started. Meanwhile, wages for middle class Americans stalled, while health care and tuition costs just kept going up.

In short, the seeds of today’s economic problems were there. We just didn’t see them very clearly.

You can point to a lot of reasons why this happened, but fundamentally, the problem is that America lost sight of its true economic strengths.

In fact, one recent study found that no advanced industrialized economy did LESS over the last decade to improve its economic competitiveness than the United States.  

So, in 2007, when those bubbles started to burst, creating a financial crisis that spread around world, we weren’t in a position to recover quickly.

Americans, confronted with falling home prices and mountains of debt, did exactly what you’d expect. They stopped spending. They started saving and worked to rebalance their household finances.
Common sense might seem to dictate that the government should immediately do the same.

Well, not really. In an economic recession, when consumers and businesses stop buying, that’s when government has to intervene. In essence, by taking government action, we bet on the resiliency of the American people and our economy and helped create demand to give the economy a little breathing room while it recovered.

Failure to do that can turn a terrible recession into a Great Depression. That’s a fact.

So in the first days of this Administration, we took steps – some of them unpopular – to stabilize the financial system, to keep the American automobile industry from going bankrupt, to pass along a tax cut to middle class families, and to shore up the bottom line of America’s cities and states so that teachers and policemen could keep their jobs. We did precisely what we knew would stop the free fall. We did what worked in the past.  

Ultimately, the measures we took included passing 17 different tax cuts for small businesses, the largest temporary investment incentive for manufacturers in the history of the United States and a payroll tax cut that put more money in the pockets of Colorado workers.

Today, we are recovering. There is good news.  The economy has created more than 2.4 million jobs in the last year and a half. We’re seeing a comeback in manufacturing and new strength in the clean energy sector.  Household debt is back to where it was before the bubble of the 2000s, consumer spending is starting to rise, and corporations are making record profits.   

The disappointing news is that that growth hasn’t been as fast as any of us would have liked, and as a result, unemployment hasn’t fallen as fast as we’d hoped and the housing market hasn’t recovered as quickly.

And even as our economy has worked to recover, we’ve been hit by some headwinds that have slowed things down -- rising oil prices and financial troubles in Europe, for example.

We also created some of those headwinds ourselves in Washington D.C., with the needless debate over raising the debt ceiling. That prolonged and divisive fight produced a bigger dip in consumer confidence than the 9/11 attacks.   

The setbacks have left families and businesses uncertain about the future. And not surprisingly, that’s encouraged them to pull back and grow more cautious – not what our economy needs.

The American Jobs Act can help change that. It attacks every part of our jobs problem.

First, it would help firms that are reluctant to hire by cutting taxes on businesses, especially small businesses. The President’s plan would:

  • Slash the payroll tax in half for 98 percent of businesses, benefitting 130,000 Colorado companies;
  • Eliminate the payroll tax for firms that increase their payrolls by adding new employees or increase the wages of their current workers;
  • Extend the 100 percent expensing provision into 2012 for capital purchases; and,
  • Make reforms to improve access to capital for entrepreneurs and small businesses.

Second, the President’s plan would allow localities to avoid laying off teachers, firefighters and cops – 7,000 in Colorado alone – by providing local communities aid, while also helping put construction workers back on the job by funding much-needed roads, rail and airport projects that will make America more competitive. The American Jobs Act would:

  • Prevent up to 280,000 teacher layoffs;
  • Modernize at least 35,000 public schools, supporting renovations across the country and as many as 3,400 Colorado jobs; and among other things,
  • Put thousands of workers back on the job by creating a National Infrastructure Bank, which will leverage private sector dollars to fund vital improvements to the very transportation arteries that make commerce possible.

Third, the President’s plan would help put the long-term unemployed – a group that totals 98,000 in Colorado – back to work by making the most innovative reforms to unemployment insurance in 40 years. It would:

  • Extend unemployment insurance, preventing 5 million Americans, including 33,700 in Colorado, from losing their benefits;
  • Create a $4,000 tax credit for employers who hire the long-term unemployed; and
  • Builds on and improves an innovative state plan that allows the unemployed to take temporary or voluntary work or pursue on-the-job training without losing their unemployment insurance.

Finally, the American Jobs Act would give more businesses confidence that there will be customers for their products and services by putting more money in the pockets of American workers. The President’s plan would:

  • Cut payroll taxes in half for 160 million workers next year, giving the typical Colorado family a $1,740 tax cut; and
  • Allow more Americans to save money by working with regulators to eliminate barriers to folks refinancing their mortgages.   

Still, even if this plan exceeds our wildest dreams, it won’t solve everything.  

Ultimately, the American recovery will be powered by the American private sector. What the Jobs Act does is give the private sector a lift by putting a little wind under the sails of American businesses and consumers, thereby starting the virtuous cycle of economic growth by which more income leads to greater consumer demand, which leads to more jobs, which in turns leads to more income.

In the meantime, we’re going to continue to streamline regulations, without sacrificing the public’s health or safety. Federal agencies recently submitted plans that included hundreds of initiatives that will reduce costs, simplify the regulatory system and eliminate redundancy and inconsistency.

Significant burden-reducing rules have been finalized or publicly proposed by the Department of Labor, the Environmental Protection Agency and the Department of Transportation -- and they are expected to save more than $4 billion over the next five years.

Still, economists will tell you that it typically takes years to recover from the economic problems that follow a major financial crisis.

But that’s no excuse to sit idly by. We can’t just pray the market eventually sorts out everything or hope for a visit from the confidence fairy. Other countries have tried that. Inaction leads to years of stagnation and high joblessness.

We know many Denver families have already made major sacrifices. It’s important that Congress pass the bipartisan measures in the President’s plan so that they don’t have to make more.  

In the long run, we have to get our debt under control.  That’s an important policy objective, one the President has clearly addressed and supports.  But our federal spending problems will be best solved by strong economic growth, which means we need to take decisive action.

In addition to the American Jobs Act, Congress can also pass the pending trade deals with Korea, Colombia and Panama, and we applaud the House and Senate for passing the America Invents Act a week ago, which will help speed new ideas and products to the market, creating new jobs.  

The mom scraping to make a mortgage payment and the dad knocking on doors looking for work have the right to expect a little bit of help from the government they pay for. They should be able to expect Congress to put them first. They ought to be able to count on someone betting on them.

And that’s ultimately what everything I’ve described is – a bet on the drive and innovation of the American people.    

We know government can’t solve all the problems facing our country. What we can do is help lay a foundation for growth and create smart incentives for businesses in Denver and around America to build something special on top of that foundation.

It’s time for Democrats and Republicans in Congress to come together to support ideas supported in the past by Democrats and Republicans. It’s time for members of both parties to work together and put their country first.

The American Jobs Act would put 1.5 million people to work now. It would put more money in the pockets of workers now. It would repair infrastructure vital to American competiveness now.

Congress should pass it now.  

It’s how we help create more jobs.  

It’s how we help business grow.

It’s how we ensure that American workers and American communities compete and win in the global economy.

Good luck and keep up the great work here at Anschutz.