WASHINGTON—In a speech to The Economic Club of Washington, D.C., House Speaker Paul Ryan (R-WI) spoke about how the policies of House Republicans have put the country back on a brighter path to prosperity and how Americans are Better Off Now.
Following are Speaker Ryan’s remarks, as prepared for delivery:
Thank you, David, and thank you all for being here this morning. I am grateful for the chance to share a few thoughts about the state of our economy.
What guides me, what guides us, in this work is growth. Economic growth does not solve all of our problems, but it certainly makes our problems easier to solve.
Growth is the beating heart of a free economy. The stronger it is, the more opportunity there is, the more mobility there is. Growth is what gives us momentum, gives us room to run.
In our lives, it is the difference between being stuck and moving ahead on the path of life. For our country, it is the difference between leading in the world, and lagging behind.
Yet, not too long ago, we were on a very different, and dangerous, path. People were working harder to get ahead only to fall further behind. Economic anxiety and uncertainty blanketed our country.
We were drifting toward a low-wage, low-growth future. As growth slowed, an economist at Northwestern wrote a paper titled, “Is Economic Growth Over?”
That path—which many so-called experts were saying was the best we could hope to achieve—was leading us straight to stagnation. It was leading us to a class-based society where we view life and society as a zero-sum game.
Our tax code had become the embodiment of this drift, a delivery device for managed decline.
It held back families living paycheck-to-paycheck, while stockpiling loopholes and carve outs for the well-connected. It enabled foreign competitors to overtake us, and brazenly take our jobs and our capital.
Around the world, countries began to take advantage of our drift, making their own systems more attractive for investment and lowering their tax rates. In the UK, they went down to 19 percent. Ireland, 12 and a half. In 2017 alone, 8 OECD countries reduced their corporate rate.
In Wisconsin, as in so many places, companies with loyal workers and long lineages, like Johnson Controls—where they make thermostat parts—moved their headquarters overseas.
It just didn’t make sense to be based in America anymore.
We had lost our edge, and lost our way.
This prospect of imminent decline—it is what spurred us to take a positive agenda to the country in 2016. We called it ‘A Better Way,’ and its economic centerpiece was a plan for pro-growth tax reform.
In 2017, we began to implement this agenda, as promised.
We started with regulatory reform, to help lift the tangle of red tape that was suffocating small businesses.
To revitalize Main Street, we provided relief to community banks and credit unions.
We jumpstarted long-overdue improvements to our infrastructure—our roads, bridges, and railways.
And, for the first time in 31 years, we overhauled our tax code. To help workers, we lowered rates and nearly doubled the standard deduction, so you can keep more money in the first place. To help families, we doubled the child tax credit.
To help our businesses, we allowed full expensing to promote expansion. We brought the corporate tax rate in line with our competitors, leap-frogging many of them. And to help attract investment and level the playing field, we transitioned to a territorial tax system like the rest of the world.
As we gather here, it has been a little more than 200 days since the enactment of tax reform. Here is what we know.
After years of stagnation, our economy is finally on the rise. By just about any economic measure, the American people are better off now.
About 9 out of 10 workers are keeping more of what they make. More than 5.5 million workers have already received bonuses, raises, or better benefits, as a direct result of tax reform.
More money is coming back to our shores—more than $300 billion was repatriated in the first quarter, the most on record.
Unemployment rolls are at historically low levels. Job openings have reached record highs. Wages are up, income is up.
Confidence has come roaring back. Consumer confidence. Small business confidence. Manufacturer confidence. All at or near record highs.
We all love a good comeback story. Well, this may be the biggest one around.
Tax reform is working. It is improving people’s lives.
To be clear, it is not the singular reason for this boom. But it was vital to ensuring American preeminence in the 21st century.
Indeed, tax reform has helped dramatically improve our country’s path. Our businesses and manufacturers are competing again, expanding again. Families are spending more again. Retail sales are up. Home sales are up.
And for our workers, there has been a real sea change. Now employers are having to actually compete for workers. More people are quitting their jobs to go for better opportunities—at rates we haven’t seen in years. More than 600,000 people came off the sidelines and joined the labor force last month.
Our economy is on a roll, and the American people are better off now.
We are getting back to risk-taking, back to growth. We are getting back our edge.
But, of course, this is not the end of the story.
Yes, our economy is finally hitting its stride, but too many families are still struggling.
We need to get more people on the path of life. We need to keep our economy on the path of growth.
To do that, we have to get some important things right. We have to get at those problems which growth makes it easier to solve.
Here are just a few challenges I would like for you to think about.
The first one is workforce development. This is really the final piece of our economic agenda.
We need to recognize that the competitiveness of our economy is inextricably linked to the competitiveness of our workforce.
Go to just about any factory in the Midwest right now, and the CEO is likely to tell you something along the lines of: ‘The good news is, we have the jobs. The problem is, we’re having trouble finding workers with the right skills.’
Our education system is still not properly equipped to help people adjust to a changing economy. This is one of those areas where we can’t expect to fix 21st-century problems with 20th-century tools.
We have a growing shortage—really, an alarming shortage—of skilled workers.
Right now, there are actually more job openings in America than there are job seekers. This may be a good problem to have, but it is a problem we need to solve.
We need to close this skills gap.
This Congress has boosted resources for apprenticeships. We have boosted resources for workforce development programs in high-growth fields.
And the House has passed a great bipartisan bill to expand career and technical education.
Basically, the way I see this is: We need to make two-year school cool again. You shouldn’t have to pile up mountains of debt for college just to get the skills you need for a career.
We can and should make it much easier for students to achieve proficiency in their chosen vocation. This will smooth their entry into the workforce.
Here’s one good idea that is catching on: More companies are partnering with local schools on programs to better match students with the skills they need for in-demand jobs.
Take Gateway Tech in Southeastern Wisconsin. They are working with Foxconn to develop a special curriculum for what the company’s needs will be.
In fact, they are building a campus right at the Foxconn location, to train and equip the incoming workforce.
We should be encouraging more of these partnerships. That’s what this legislation is about.
In this economy, with all of the opportunities available, there could not be a better time to help more people move from welfare to work.
As part of this year’s Farm Bill, the House advanced initiatives to better connect food stamp recipients with meaningful jobs. If you are work-capable, and you don’t have young children, you are guaranteed help finding a job or getting the right training for a job.
It is a balance of work requirements and work supports, with a case management-based approach, going person to person. This is all about empowering the individual.
If we can get these things right—helping more students get into good jobs and careers, and helping more people get out of poverty into the workforce—those are big changes. Those are things that will help restore intergenerational mobility for families and communities.
That brings me to my second point.
If we want to make this resurgence real and lasting, we need to do a better job of reconnecting distressed communities to the greater economy.
The country as a whole went through a weak recovery, but there are areas which have still seen next to no recovery at all.
The most recent study done by the Economic Innovation Group found that more than 52 million Americans still live in economically distressed communities. That is far too many people being left behind, and feeling forgotten.
We owe it to those communities to go bold, and get right at the underlying disparities. So we are putting to work some ideas to really open up access to opportunity and jumpstart economic development.
Through tax reform, all 50 states have now designated opportunity zones in their lowest-income census tracts. States worked with local leaders to identify the areas with the biggest need. This, in and of itself, is promising, because we have taken the decision-making out of Washington.
All told, there are more than 8,000 of these zones across the country. You may remember an earlier iteration of these as enterprise zones, something I worked on for Jack Kemp at the start of my career.
With these opportunity zones, we are essentially offering private investors a set of incentives.
The longer you maintain your investment in these areas, the more tax benefits you receive. If you invest for at least a decade, you won’t pay capital gains taxes on that investment.
We want to encourage investors to sustain their commitment, and form a long-term relationship with the community.
Think about it this way. Right now, we have $6 trillion of unrealized capital that can be deployed to help alleviate poverty in distressed communities and improve people’s lives.
The potential here is just incredible.
Another idea this Congress has put into effect is social impact-bonds. This is another way to leverage private capital for the public good under a performance-based framework.
Through these bonds, state and local governments place a value on a specific outcome—it could be anything from helping the homeless to reducing recidivism.
Investors fund and evaluate these programs, and they are repaid only if the program works, only if it gets results. Both the risk and the reward is shifted to the private sector.
This will help unlock new and innovative solutions to fix some of the persistent problems plaguing low-income communities.
The third and final issue I want to talk about gets back to our overall competitiveness and growth.
Just as our standing was threatened as countries around the world made their tax codes more competitive, we similarly risk being left behind in global trade if we don’t lead here, as well.
The final Trans-Pacific Partnership agreement was flawed, to be sure, but its broader intent was correct: opening up American-made goods and services to new markets, while providing a counter to China, in a critical region, with the United States writing the rules of the road.
Now, the president has made clear that he prefers bilateral trade agreements over multinational ones like TPP. That view is reasonable, so long as reaching those direct pacts remains a priority.
Since America dropped out of the Trans-Pacific Partnership, the other TPP nations have moved forward with that agreement.
Any day now, the European Union will sign a new trade agreement with Japan. The EU also recently initiated negotiations with Australia and New Zealand.
The world is moving ahead. So we must continue to pursue new agreements while we strengthen our existing ones.
Otherwise, we risk having American products locked out of new markets, jobs moved overseas, and a decline in American influence.
This matters. As our generals will tell you, these agreements are just as important for our national security as they are for our economy.
This administration has been vocal about trade abuses taking place. It is right to be. There are unquestionably bad actors, most notably China. But I’ve made my view clear: New tariffs are not the solution.
For me, all of this is secondary to a bigger, more fundamental question about the future of the economy and our standing in it.
Today, emerging economies and old allies alike are making a choice.
As we settle into the 21st century, will they follow what I would call the Chinese model, with centralized power, state-owned enterprises, cronyism, even outright theft?
Or will they choose a system based on markets, the rule of law, transparency, and the kind of potential only human capital can produce?
I believe most of these counties want the latter, but they need to know that the United States will be there to partner with them.
The rule book for the global economy in the 21st century is being written now.
The question is whether the United States will be holding the pen, or will we cede that authority to illiberal, undemocratic regimes.
We must be there, to set the tone and set the pace.
More so, we must continue to demonstrate that our way of doing things still has juice. That we can still do the most good for the most people.
This is another reason why tax reform was so important.
It is why, on the day I became Speaker, I said that I did not believe all that talk about America being done, about our best days being behind us.
Remember how, not too long ago, we were being told to just get used to stagnation, get used to the new normal.
Well, that narrative’s sell-by date has now come and gone.
We have shown what we can achieve when we reapply our founding principles, when we renew our aspirational spirit.
We have retold the story of the American Idea.
Let us continue with this work.
Let us continue on the path of growth and opportunity.
Thank you all for having me.