Full Text October 25, 2011: President Barack Obama & Federal Housing Finance Agency Introduce Home Affordable Refinance Program for “Underwater” Homeowners & Mortgages

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

We Can’t Wait

Since we can’t wait for Congress to act, President Obama speaks with homeowners in Las Vegas to highlight steps he’s taking to create jobs and improve the economy.

President Obama delivers a statement on housing
President Obama delivers a statement on housing in Las Vegas, Nevada, White House Photo, Chuck Kennedy, 10/24/11

We Can’t Wait: President Obama in Nevada

Source: WH, 10-24-11

Last week, Republicans in the Senate blocked a jobs bill that would have meant jobs for around 400,000 teachers and first responders. Twice.

This week, President Obama is back on the road with a new message, which today, he shared with a crowd in Nevada:

So I’m here to say to all of you — and to say to the people of Nevada and the people of Las Vegas — we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.

Instead of waiting for Congress to fix No Child Left Behind, the President directed his administration to move forward with a plan to give states the flexibility they need to help students meet higher standards. The Administration acted to cut dramatically the time it takes for small businesses who contract with the federal government to get paid. And last week, the President eliminated outdated regulations that will save hospitals and patients billions of dollars in the years ahead.

Now, President Obama is taking on housing.

President Obama participates in a kitchen table discussion regarding the American Jobs Act

President Barack Obama participates in a kitchen table discussion regarding the American Jobs Act, with Jose and Lissette Bonilla at their home in Las Vegas, Nevada, Oct. 24, 2011. (Official White House Photo by Pete Souza)

In addition to a new set of rules announced this morning that has the potential to allow millions of homeowners to refinance their mortgages, President Obama discussed Project Rebuild:

A lot of homeowners in neighborhoods like this one have watched the values of their home decline not just because the housing bubble burst, but also because of the foreclosure sign next door, or the vacant home across the street. Right now, there are hundreds of thousands of vacant homes like these and more than a million unemployed construction workers. That doesn’t make any sense when there’s work to be done and there are workers ready to do it.

So Project Rebuild connects the two by helping the private sector put construction workers to work rehabilitating vacant or abandoned homes and businesses all across the country. That will help stabilize home prices in communities like this one.

Project Rebuild is a step that Congress can take right away. The time for inaction has passed.

POLITICAL QUOTES & SPEECHES

Remarks by the President on the Economy and Housing

Private Residence, Las Vegas, Nevada

2:15 P.M. PDT

THE PRESIDENT:  Good afternoon, everybody.

AUDIENCE:  Good afternoon!

THE PRESIDENT:  Thank you for letting me block your driveways.  (Laughter.)

AUDIENCE MEMBER:  You’re welcome.

THE PRESIDENT:  Well, it is wonderful to be with all of you.  And I want to thank Jose and Lissette and their wonderful children for letting us set up right in front of their house, and we just had a wonderful visit.

Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs.  I know it; the people of Nevada know it; and I think most Americans also understand that the problems we face didn’t happen overnight and so we’re not going to solve them all overnight either.  What people don’t understand, though, is why some elected officials in Washington don’t seem to share the same sense of urgency that people all around the country are.

Last week, for the second time this month, Republicans in the Senate blocked a jobs bill from moving forward — a bill that would have meant nearly 400,000 teachers, firefighters, and first responders being back on the job.  It was the kind of proposal that in the past, at least, Republicans and Democrats have supported.  It was paid for, and it was supported by an overwhelming majority of the American people.  But they still said no.

Your senator, Majority Leader Harry Reid, he’s been fighting nonstop to help get the economy going.  But he’s not getting some help from some of the members of the Nevada delegation.  So we need them to get their act together.  Because the truth is, the only way that we can truly attack our economic challenges, the only way we can put hundreds of thousands of people back to work right now is with bold action from Congress.

That’s why I’m going to keep forcing these senators to vote on common-sense, paid-for jobs proposals.  But last month, when I addressed a joint session of Congress about our jobs crisis, I also said that I intend to do everything in my power to act on behalf of the American people — with or without Congress.

So I’m here to say to all of you — and to say to the people of Nevada and the people of Las Vegas — we can’t wait for an increasingly dysfunctional Congress to do its job.  Where they won’t act, I will.

In recent weeks, we decided to stop waiting for Congress to fix No Child Left Behind, and decided to give states the flexibility they need to help our children meet higher standards. We took steps on our own to reduce the time it takes for small businesses to get paid when they have a contract with the federal government.  And without any help from Congress, we eliminated outdated regulations that will save hospitals and patients billions of dollars.

Now, these steps aren’t substitutes for the bold action that we need to create jobs and grow the economy, but they will make a difference.  So we’re not going to wait for Congress.

I’ve told my administration to keep looking every single day for actions we can take without Congress — steps that can save consumers money, make government more efficient and responsive, and help heal the economy.  And we’re going to be announcing these executive actions on a regular basis.

Now, today what I want to focus on is housing, which is something obviously on the minds of a lot of folks here in Nevada.  Probably the single greatest cause of the financial crisis and this brutal recession has been the housing bubble that burst four years ago.  Since then, average home prices have fallen by nearly 17 percent.  Nationwide, more than 10 million homeowners are underwater.  That means that they owe more on their homes than those houses are worth.  And here in Las Vegas, the city that’s been hit hardest of all, almost the entire housing market is under severe stress.

Now, this is a painful burden for middle-class families.  And it’s also a drag on our economy.  When a home loses its value, a family loses a big chunk of their wealth.  Paying off mortgage debt means that consumers are spending less and businesses are making less and jobs are harder to come by.  And as long as this goes on, our recovery can’t take off as quickly as it would after a normal recession.

So the question is not whether or not we do something about it — we have to do something about it.  The question is, what do we do and how fast do we move?  One idea that I’ve proposed is contained in the jobs act that is before Congress right now, and it’s called Project Rebuild.

A lot of homeowners in neighborhoods like this one have watched the values of their home decline not just because the housing bubble burst, but also because of the foreclosure sign next door, or the vacant home across the street.  Right now, there are hundreds of thousands of vacant homes like these and more than a million unemployed construction workers.  That doesn’t make any sense when there’s work to be done and there are workers ready to do it.

So Project Rebuild connects the two by helping the private sector put construction workers to work rehabilitating vacant or abandoned homes and businesses all across the country.  That will help stabilize home prices in communities like this one.  And it will help families like the Bonillas to buy a new home and build a nest egg.

This is something that Congress can pass right now, because it’s in the jobs bill.  We will put construction workers back to work and we will rebuild homes all across Nevada and all across the country.

If Congress passes this jobs bill, we can get Project Rebuild moving right away.  If Congress acts, then people in Nevada and all across the country can get significant relief.  But remember what I said.  We can’t just wait for Congress.  Until they act, until they do what they need to do, we’re going to act on our own, because we can’t wait for Congress to help our families and our economy.

Over the past two years, we’ve already taken some steps to help families refinance their mortgages.  Nearly one million Americans with little equity in their homes have gotten assistance so far.  And we’ve also made it easier for unemployed homeowners to keep their homes while they’re looking for a job.  And we’re working to turn vacant properties into rental housing, which will help reduce the supply of unsold homes and stabilize housing prices here in Las Vegas and all across the country.

But we can do more.  There are still millions of Americans who have worked hard and acted responsibly, paying their mortgage payments on time.  But now that their homes are worth less than they owe on their mortgage, they’re having trouble getting refinancing even though mortgage rates are at record lows.

So that’s going to soon change.  Last month, I directed my economic team to work with the Federal Housing Finance Agency — or FHFA — and their partners in the housing industry to identify barriers to refinancing, knock those barriers down, and explore every option available to help many American homeowners to refinance.

And today, I am pleased to announce that the agency that is in charge is going to be taking a series of steps to help responsible homeowners refinance and take advantage of low mortgage rates.  So let me just name those steps.

Number one, the barrier will be lifted that prohibits responsible homeowners from refinancing if their home values have fallen so low that what they owe on their mortgage is 25 percent higher than the current value of their home.  And this is critically important for a place like Las Vegas, where home values have fallen by more than 50 percent over the past five years.

So let me just give you an example.  If you’ve got a $250,000 mortgage at 6 percent interest rates, but the value of your home has fallen below $200,000, right now you can’t refinance.  You’re ineligible.  But that’s going to change.  If you meet certain requirements, you will have the chance to refinance at lower rates, which could save you hundreds of dollars a month, and thousands of dollars a year on mortgage payments.

Second, there are going to be lower closing costs, and certain refinancing fees will be eliminated — fees that can sometimes cancel out the benefits of refinancing altogether, so people don’t bother to refinance because they’ve got all these fees that they have to pay.  Well, we’re going to try to knock away some of those fees.

Third, there’s going to be more competition so that consumers can shop around for the best rates.  Right now, some underwater homeowners have no choice but to refinance with their original lender — and some lenders, frankly, just refuse to refinance.  So these changes are going to encourage other lenders to compete for that business by offering better terms and rates, and eligible homeowners are going to be able to shop around for the best rates and the best terms.

So you take these things together, this is going to help a lot more homeowners refinance at lower rates, which means consumers save money, those families save money, it gets those families spending again.  And it also makes it easier for them to make their mortgage payments, so that they don’t lose their home and bring down home values in the neighborhood.

And I’m going to keep on doing everything in my power to help to stabilize the housing market, grow the economy, accelerate job growth, and restore some of the security that middle-class families have felt slipping away for more than a decade.

Now, let me just say this in closing.  These steps that I’ve highlighted today, they’re not going to solve all the problems in the housing market here in Nevada or across the country.  Given the magnitude of the housing bubble and the huge inventory of unsold homes in places like Nevada, it’s going to take time to solve these challenges.  We still need Congress to pass the jobs bill.  We still need them to move forward on Project Rebuild so we can have more homes like this, and wonderful families having an opportunity to live out the American Dream.

But even if we do all those things, the housing market is not going to be fully healed until the unemployment rate comes down and the inventory of homes on the market also comes down. But that’s no excuse for inaction.  That’s no excuse for just saying “no” to Americans who need help right now.  It’s no excuse for all the games and the gridlock that we’ve been seeing in Washington.

People out here don’t have a lot of time or a lot of patience for some of that nonsense that’s been going on in Washington.  If any member of Congress thinks there are no unemployed workers or no down-on-their-luck neighborhoods in their district that would benefit from the proposals in the jobs bill, then they better think again.  They should come and talk to the families out here in Nevada.  These members of Congress who aren’t doing the right thing right now, they still have a chance to take meaningful action to put people back to work, and to help middle-class families and homeowners like the Bonillas.

But we can’t wait for that action.  I’m not going to wait for it.  So I’m going to keep on taking this message across the country.  Where we don’t have to wait for Congress, we’re just going to go ahead and act on our own.  And we’re going to keep on putting pressure on Congress to do the right thing for families all across the country.  And I am confident that the American people want to see action.  We know what to do.  The question is whether we’re going to have the political will to do it.

All right?  So thank you so much, everybody.  God bless you. God bless the United States of America.  Thanks for welcoming me to your neighborhood.  (Applause.)

END 2:28 P.M. PDT

Campaign Buzz October 25, 2011: Republican Presidential Candidate Gov. Rick Perry Unveils his “Cut, Balance and Grow” Flat Tax plan

CAMPAIGN 2012

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University. Ms. Goodman has also contributed the overviews, and chronologies in History of American Presidential Elections, 1789-2008, 4th edition, edited by Gil Troy, Fred L. Israel, and Arthur Meier Schlesinger to be published by Facts on File, Inc. in late 2011.

CAMPAIGN BUZZ 2012

 

Gov. Rick Perry of Texas outlined his proposal for a 20 percent flat tax and deficit reduction plan at the ISO Poly Films factory in Gray Court, S.C. Tuesday.

Richard Ellis/Getty ImagesGov. Rick Perry of Texas outlined his proposal for a 20-percent flat tax and deficit reduction plan on Tuesday at the ISO Poly Films factory in Gray Court, S.C.

IN FOCUS: GOV. RICK PERRY UNVEILS HIS FLAT TAX PLAN

Republican presidential candidate Rick Perry officially announces flat tax plan: In Greenville, South Carolina, Texas governor and Republican presidential candidate Rick Perry formally unveiled his economic plan Tuesday. The proposal includes long-held conservative goals, including personal accounts for Social Security, an optional flat tax, major spending cuts and a series of tax cuts.
The plan would dramatically reduce taxes, particularly on wealthy Americans and corporations. It would reduce the corporate tax rate from 35 to 20 percent, eliminate taxes on dividends and many capital gains and essentially cap individual tax rates at 20 percent.

Full Text Campaign Buzz October 25, 2011: Republican Presidential Candidate Gov. Rick Perry Unveils in a Speech his “Cut, Balance and Grow” Flat Tax plan in South Carolina — Transcript

Campaign Buzz October 25, 2011: Republican Presidential Candidate Gov. Rick Perry Previews “Cut, Balance and Grow” Flat Tax plan — Wall Street Journal Op-ed

  • Perry calls for sweeping tax cuts, benefit changes: Republican presidential candidate Rick Perry proposed dramatic tax and spending changes Tuesday, saying he would let Americans choose between a 20 percent flat tax and the current system, allow private Social Security accounts and slash government spending and regulation.
    Perry, seeking to regain the momentum he enjoyed in late August, said his plan would significantly spur economic growth. But analysts from the left and right said he would need draconian federal budget cuts to avoid massive deficits.
    In a pitch to conservatives, the Texas governor said his “Cut, Balance and Grow” plan was bolder than what his Republican rivals or President Barack Obama would do. His proposal calls for gradually increasing eligibility ages for Social Security and Medicare and for amending the Constitution to require balanced budgets…. – AP, 10-25-11
  • Perry Plan Would Grant Big Tax Break to Wealthiest: The plan, which includes a new flat tax, would eliminate capital gains taxes, and lower the rate richest Americans pay…. – NYT, 10-25-11
  • Perry Offers Plan to ‘Save Social Security’: Rick Perry offered his most detailed response yet to criticism that he views Social Security as a Ponzi scheme and spelled out changes to the federal retirement program…. – NYT, 10-25-11
  • Rick Perry unveils tax plan in bid to jump-start campaign: Returning to South Carolina, a state key to reviving his presidential candidacy, Gov. Rick Perry unveiled what he said was a “bold” tax plan to revive the nation’s economy.
    The Texas governor, speaking at the warehouse of a specialty plastics company south of Greenville, proposed a flat tax plan that critics said would worsen the federal deficit.
    Perry’s plan includes an optional 20% flat tax for individuals and corporations. But he would allow anyone to remain with the current tax system, insuring that no one’s taxes would go up and threatening to cut federal revenue by hundreds of billions of dollars a year…. – LAT, 10-25-11
  • Perry Wants Flat Tax With Some Popular Deductions: Republican presidential candidate Rick Perry proposed a sweeping economic plan Tuesday that includes a flat tax proposal, private retirement accounts for Social Security, a lower corporate tax rate and reforms aimed at keeping Medicare…. – ABC News, 10-25-11
  • Rick Perry joins flat tax parade – a hot idea fresh from the 1860s: Rick Perry follows Herman Cain in proposing a flat tax. Ron Paul has endorsed the idea before, too. But the hot new idea among GOP presidential candidates is as old as the Civil War…. – CS Monitor, 10-25-11
  • Perry rolls out flat tax plan: Rick Perry, whose presidential campaign to date has largely focused on his accomplishments as Texas governor, expanded his scope Tuesday in South Carolina, where he formally unveiled a flat tax proposal designed to stimulate the economy and cut taxes…. – Politico, 10-25-11
  • Perry unveils flat-tax plan: Gov. Rick Perry this morning proposed a sweeping tax overhaul whose centerpiece is an optional, 20 percent flat tax on all income, plus a number of changes to Social Security and other entitlements…. – Austin American-Statesman, 10-25-11
  • Struggling Perry Proposes Flat Tax and Spending Plan: Gov. Rick Perry, struggling in the polls as he pursues the 2012 Republican presidential nomination, released a tax and spending reform plan today aimed at luring away business-minded voters from Mitt Romney and Tea Party…. – Texas Tribune, 10-25-11
  • Rick Perry lays out tax reform proposal calling for a 20% flat tax rate: Under Texas Gov. Rick Perry’s plan, taxpayers could pay the new 20% flat rate, or keep their current tax rate. Do you think Rick Perry’s flat tax proposal is a good solution for Americans? Republican hopeful Rick Perry laid out a tax plan…. – New York Daily News, 10-25-11
  • Perry Tax Cut Plan Offers Simplicity Layered Atop Complexity: Texas Governor Rick Perry’s flat-tax fiscal plan would provide broad tax cuts to households that embrace it while retaining the existing system’s complexity as a choice for others. The plan, announced today in a speech in South Carolina…. – San Francisco Chronicle, Bloomberg, 10-25-11
  • Rick Perry readies assault on Mitt Romney: The Rick Perry relaunch has finally arrived. After weeks battling questions about how he plans to salvage his listing presidential bid, the Texas governor has finally started spelling out an answer. It involves opening his $15 million campaign war chest, hitting Mitt Romney harder and moving to reclaim the role of the populist conservative outsider in the race.
    Perry will deliver a policy address Tuesday in South Carolina outlining his support for a national flat tax — a proposal that for the first time extends beyond his record in Texas. His campaign has reserved statewide television airtime in Iowa to start as early as this week…. – Politico, 10-25-11
  • Perry’s tax plan faces quick attack from Democrats: South Carolina Democrats today attacked GOP presidential candidate Rick Perry’s tax reform plan before his unveiling…. – Greenville News, 10-25-11

Full Text Campaign Buzz October 25, 2011: Republican Presidential Candidate Gov. Rick Perry Unveils in a Speech his “Cut, Balance and Grow” Flat Tax plan in South Carolina — Transcript

CAMPAIGN 2012

CAMPAIGN BUZZ 2012

Gov. Rick Perry of Texas outlined his proposal for a 20 percent flat tax and deficit reduction plan at the ISO Poly Films factory in Gray Court, S.C. Tuesday.

Richard Ellis/Getty ImagesGov. Rick Perry of Texas outlined his proposal for a 20-percent flat tax and deficit reduction plan on Tuesday at the ISO Poly Films factory in Gray Court, S.C.

Gov. Rick Perry Unveils Plan to Cut Taxes and Spending, Balance the Budget and Grow the Economy

“Cut, Balance and Grow” plan offers optional 20% flat tax; cuts federal spending, repeals job-killing regulations, sets path to balanced budget

GREENVILLE, S.C. – Texas Gov. Rick Perry today unveiled his Cut, Balance and Grow plan, which provides taxpayers with the choice of a simple, 20 percent flat tax rate, cuts federal spending, ends earmarks and includes a federal Balanced Budget Amendment.  He announced his plan at ISO Poly Films near Greenville.

The governor’s plan addresses five primary areas of reform, which include replacing the current tax code with an optional 20 percent flat tax for individuals and corporations, simplifying our regulatory system by freezing new and auditing pending regulations, fixing Social Security, Medicare and Medicaid entitlement programs, balancing the federal budget by 2020, and repealing job-killing federal laws like Obamacare, Dodd-Frank and parts of Sarbanes-Oxley…. READ MORE

To view Gov. Perry’s entire Cut, Balance and Grow plan, please visit http://www.rickperry.org/cut-balance-and-grow-html/, and to view an outline of the plan, please visit http://www.rickperry.org/content/uploads/2011/10/Cut-Balance-and-Grow-Summary.pdf. To view a sample tax return, please visit http://www.rickperry.org/content/uploads/2011/10/sample-tax-return.pdf.

To view the governor’s remarks, please visit http://www.rickperry.org/news/text-of-gov-rick-perry-cut-balance-grow-speech/

POLITICAL QUOTES & SPEECHES

Text of Gov. Rick Perry’s Cut, Balance, Grow Speech

ISO Poly Films, Greenville, S.C., 10/25/11

*Gov. Perry sometimes deviates from prepared remarks

Thank you. It is great to be in the stomping grounds of a great conservative senator, Jim DeMint. I want to thank ISO Poly Films CEO John McClure for opening his business as we discuss my plan to get America working again.

Today I lay before the American People my cut, balance and grow plan. It cuts taxes and spending. It balances the budget by 2020. And it grows jobs and the economy.

It neither reshuffles the status quo, nor does it expand the ways Washington can reach into our pocketbooks.

It reorders the way they do business in Washington by reinventing the tax code and restoring our nation to fiscal health through balanced budgets and entitlement reform.

Central to my plan is giving every American the option of throwing out the three million words of the current tax code, and the costs of complying with that code, in order to pay a 20 percent flat tax on their income.

The size of the current code, which is more than 72,000 pages, is represented by this pallet and its many reams of paper.

The best representation of my plan is this post card, which taxpayers will be able to fill out to file their taxes.

Each individual taxpayer will have a choice: you can continue to pay taxes, as well as accountants and lawyers under the current system, or, you can file your taxes on a postcard, with deductions only for interest on a mortgage, charitable giving, and state and local tax payments.

Under my plan, you will no longer have to worry about paying taxes on social security when you retire, or your family members paying the death tax when you die. And you can wave goodbye to the capital gains tax, as well as the tax on dividends.

We will increase the standard exemption for individuals and dependents to $12,500, meaning families in the middle on the lower end of the economic scale will have the opportunity to get ahead. Taxes will be cut across all income groups in America. The net benefit will be more money in Americans’ pockets, with greater investment in the private economy instead of the federal government.

On the corporate tax side, I am offering equally bold reform. My plan closes corporate loopholes, ends the special breaks for special interests, and stops the gravy train of lobbyists and tax lawyers at the Washington trough.

In exchange for a corporate tax free of carve-outs and exclusions, I offer a much lower rate of 20 percent that represents the average corporate rate among the developed nations, and that will make our corporations more competitive on a global scale.

We will shut down the cottage industry of corporate tax evasion by creating a tax that is broad, fair and low.

And my plan offers incentives for corporations to invest in America again, with two major reforms. First, we will transition to a territorial tax system on corporate income earned overseas. This means companies pay the appropriate corporate tax in the country where income was earned, but aren’t taxed a second time when that income is moved back into the United States.

Second, for all corporate profits currently languishing overseas, I will offer a one-time reduced tax rate of five and a quarter percent for a limited period of time on repatriated earnings.

The U.S. Chamber estimates this one-time tax reduction would bring more than $1 trillion in capital back to the U.S, create up to 2.9 million jobs, and increase economic output by $360 billion.

In other words, it’s the kind of economic stimulus President Obama could have achieved if he wasn’t hell-bent on passing big government schemes that have failed American workers.

Today, America’s combined corporate tax rate of 39.2 percent is the second highest in the developed world. It is time to overhaul our tax code so companies like ISO Poly Films can invest more in their people and their products.

Tax rates have consequences. The liberals myopically ignore the realities of human nature. They think in raising rates they will raise revenue. But they don’t understand large employers have choices, as do wealthy individuals, and that includes moving money off-shore. When they try to take too much, they end up hurting the very people they seek to help: the working class.

We need tax policy that embraces the world as it is, and not what liberal ideologues wish it to be.

The goal of my cut, balance and grow plan is to unleash job creation to address the current economic crisis, while generating a stable source of revenue to address our record deficit and put our fiscal house in order.

My plan should not be viewed in a vacuum, but in comparison to the continuation of the status quo. It provides employers and investors certainty, which is critical to getting capital back into the economy. The president’s plan provides temporary tax relief, which does nothing to encourage long-term investment because it doesn’t provide the private sector certainty.

The way to stimulate the economy is not through temporary tax relief or government spending; it is to stimulate private spending through permanent tax relief.

The flat tax will unleash growth. But growth is not enough. We must put a stop to the entitlement culture that risks the financial solvency of this country for future generations.

The red flags are alarming. Our children are born into $46,000 of federal debt. Our credit was downgraded for the first time this past August, in part because of a lack of seriousness about deficit reduction. According to the White House Office of Management and Budget, by year’s end our debt will exceed the size of America’s economy for the first time in 65 years. We are on the road to ruin paved by state serfdom.

Freeing our children from financial disaster requires the courage to reform entitlements. My plan establishes firm principles to preserve Medicare and Social Security for today’s beneficiaries, while saving it for tomorrow’s.

I am putting forward five principles to save Social Security for the long-term. First, we will protect existing benefits for current retirees, and work with Congress on the exact age where those nearing retirement are grandfathered out of changes to the program.

Second, we will end the current pillaging of the Social Security Trust Fund by Washington politicians. Here is the hard truth: the trust fund is full of IOU’s, without a single dime of money left over from what workers have paid in. The politicians have borrowed against it for years. And in order to redeem the IOU’s in the fund, they will have to either raise taxes or cut spending on other programs to replenish it.

Here is the other hard truth: if we don’t act, in 25 years benefits will be slashed 23 percent overnight. Protecting Social Security benefits begins with protecting the solvency of the fund, and stopping all current borrowing from the fund, just as we have done with the highway trust fund.

The third principle of reform is to allow young workers to invest a portion of their payroll taxes into private accounts if they so choose.

I am not naïve. I know this idea will be attacked. But a couple of facts are worth stating: one, the return on investment in Social Security is so small it is like an interest bearing savings account. Over the long-term, the markets generate a much higher yield.

Second, opposition to this simple measure is based on a simple supposition: that the people are not smart enough to look out for themselves. The liberals think the American people cannot be trusted to safeguard even a portion of their own retirement dollars. It is time to end the nanny state and empower our people to exercise greater control over their money.

The fourth principle is to return to pre-1983 law and allow state and local governments to newly opt out of Social Security and instead allow their employees to pay solely into state or locally run retirement programs. This has been done around the country, with better results. We ought to allow it again.

Lastly, we ought to work to raise the retirement age for younger workers – on a gradual basis – to reflect the longer life-span of today’s Americans. I will work with Congress to determine the right formula, beginning at the right age. But this is common sense, and it can help save Social Security for future generations.

We will also reform Medicare to save it for future generations of Americans.  We will do this by working with Congress on several options, including giving patients greater flexibility in choosing the plan that best fits their unique needs through bundled premium support payments to the individual, or as a credit against purchase of health insurance.

Second, we should look at gradually raising the age of Medicare eligibility. Third, we should consider adjusting Medicare benefits to be paid on a sliding scale based on the income of the recipient. And lastly, we must tackle the $100 billion in annual waste and fraud to save this valuable program as Americans live longer.

My plan also restructures Medicaid, returning control over the program and the dollars needed to administer it to states. One-size-fits-all health care doesn’t work for people on private plans in the form of Obamacare, and it doesn’t work with public plans, such as Medicaid. Washington has broken it, and shown no will to fix it. We must give state leaders the flexibility to fix Medicaid and control its costs.

These reforms are essential to balancing the budget. My plan balances the budget as fast as any serious plan offered, in the year 2020, with reforms to entitlements, with greater economic growth, and with cuts to discretionary spending.

I do not take the tack of the current President, with arbitrary cuts to defense spending. The question we must ask is not what we can afford to spend on our national defense, but what does it cost to keep America secure.

At the same time, we will reform the way we spend money in Washington so we can balance the budget in eight years. But to truly protect taxpayers, we need the extra protection of a Balanced Budget Amendment to the United States Constitution.

I will reduce spending in the Department of Education, the Department of Energy, the EPA, and a whole host of other agencies, returning greater control to the states.

My plan reduces non-defense discretionary spending by $100 billion in year one, and builds on those savings in the years to come.

I will also institute several principle reforms to the budgetary process, which are contained in my Cut, Balance and Grow Plan on my website.

It is not the length of a “War and Peace” novel, and is easy to understand, yet bold in its approach.

Included in my budget reforms are elimination of baseline budgeting that assumes previous expenditures are sacrosanct, an end to non-emergency spending in emergency bills, and a permanent stop to “bridge to nowhere” projects through the elimination of earmarks. I will couple these budgetary reforms with an overhaul of the regulatory process.

When federal agencies like the NLRB are dictating to companies where they can create jobs and where they cannot, they have over-stepped their bounds and undermined our free market system. On my first day in office, I will freeze all pending federal regulations and immediately begin a review of all new regulations since January of 2008.

Today the Federal Register contains 165,000 pages. The index alone is eleven hundred pages long. And somehow, despite not having any of these new regulations for our first 219 years, America not only survived, we thrived.

The federal nanny state’s heavy-handed regulations are keeping our economy in the ditch. It is time to review and scrap regulations that harm jobs and growth.

Lastly, one of the greatest impediments to investment in America are the Dodd-Frank banking regulations, and I will lead the charge to eliminate them.

Dodd-Frank is killing small banks, and freezing access to credit just when small businesses need it most. It enshrines bailouts and the notion of “too big to fail” in federal law, benefitting Wall Street while killing Main Street. It’s wrong. It’s unfair. It must go.

My plan does not trim around the edges. And it does not bow down to the established interests. But it is the kind of bold reform needed to jolt this economy out of its doldrums, and renew American prosperity. Those who oppose it will wrap themselves in the cloak of the status quo.

America is under a crushing burden of debt, and the president simply offers larger deficits and the politics of class division. Others simply offer microwaved plans with warmed-over reforms based on current ingredients.

Americans, however, aren’t searching for a reshuffling of the status quo, which simply empowers the entrenched interests. This is a change election, and I offer a plan that changes the way Washington does business.

The great issue facing this nation is whether we have the courage to confront spending and the vision to get our economy growing again. We need a tax code that unleashes growth instead of preventing it; that promotes fairness, not class warfare; that sparks investment in America instead of overseas interests.

It is time to create incentives for American companies to invest in American workers. It is time to end the corporate loopholes, end the special tax breaks for special interests, end the gravy train for lobbyists and tax lawyers.

It is time to pass a tax that is flat and fair, that frees our employers and our people to invest, grow and prosper.

We will set our employers and our people free by slashing the cost of government, cutting taxes for middle class families, balancing our budget and growing our economy.

The future of America is too important to be left to the Washington politicians. To get America working again, we must cut taxes and spending, balance the federal budget, and grow our economy and jobs.

My plan unleashes American ingenuity for a new American Century.  Restores the hopes and dreams of our people. Renews our great promise. And entrusts the fate of this nation into the hands of our People, setting them free.

Thank you, God bless you, and God bless America.

Campaign Buzz October 25, 2011: Republican Presidential Candidate Gov. Rick Perry Previews “Cut, Balance and Grow” Flat Tax plan in Wall Street Journal Op-ed

CAMPAIGN 2012

CAMPAIGN BUZZ 2012

POLITICAL QUOTES & SPEECHES

Rick Perry: My Tax and Spending Reform Plan

Individuals will have the option of paying a 20% flat-rate income tax and I’ll cap spending at 18% of GDP.

Source: WSJ, 10-25-11

The folks in Washington might not like to hear it, but the plain truth is the U.S. government spends too much. Taxes are too high, too complex, and too riddled with special interest loopholes. And our expensive entitlement system is unsustainable in the long run.

Without significant change quickly, our nation will go the way of some in Europe: mired in debt and unable to pay our bills. President Obama and many in Washington seem unable or unwilling to tackle these issues, either out of fear of alienating the left or because they want Americans to be dependent on big government.

On Tuesday I will announce my “Cut, Balance and Grow” plan to scrap the current tax code, lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity.

The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.

This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs. By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy. My plan also abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.

My plan restores American competitiveness in the global marketplace and provides strong incentives for U.S.-based employers to build new factories and create thousands of jobs here at home.

First, we will lower the corporate tax rate to 20%—dropping it from the second highest in the developed world to a rate on par with our global competitors. Second, we will encourage the swift repatriation of some of the $1.4 trillion estimated to be parked overseas by temporarily lowering the rate to 5.25%. And third, we will transition to a “territorial tax system”—as seen in Hong Kong and France, for example—that only taxes in-country income.

The mind-boggling complexity of the current tax code helps large corporations with lawyers and accountants devise the best tax-avoidance strategies money can buy. That is why Cut, Balance and Grow also phases out corporate loopholes and special-interest tax breaks to provide a level playing field for employers of all sizes.

To help older Americans, we will eliminate the tax on Social Security benefits, boosting the incomes of 17 million current beneficiaries who see their benefits taxed if they continue to work and earn income in addition to Social Security earnings.

We will eliminate the tax on qualified dividends and long-term capital gains to free up the billions of dollars Americans are sitting on to avoid taxes on the gain.

All of these tax cuts will be meaningless if we do not control federal spending. Last year the government spent $1.3 trillion more than it collected, and total federal debt now approaches $15 trillion. By the end of 2011, the Office of Management and Budget expects the gross amount of federal debt to exceed the size of America’s entire economy for the first time in over 65 years.

Under my plan, we will establish a clear goal of balancing the budget by 2020. It will be an extremely difficult task exacerbated by the current economic crisis and our need for significant tax cuts to spur growth. But that growth is what will get us to balance, if we are willing to make the hard decisions of cutting.

We should start moving toward fiscal responsibility by capping federal spending at 18% of our gross domestic product, banning earmarks and future bailouts, and passing a Balanced Budget Amendment to the Constitution. My plan freezes federal civilian hiring and salaries until the budget is balanced. And to fix the regulatory excess of the Obama administration and its predecessors, my plan puts an immediate moratorium on pending federal regulations and provides a full audit of all regulations passed since 2008 to determine their need, impact and effect on job creation.

ObamaCare, Dodd-Frank and Section 404 of Sarbanes-Oxley must be quickly repealed and, if necessary, replaced by market-oriented, common-sense measures.

America must also once and for all face up to entitlement reform. To preserve benefits for current and near-term Social Security beneficiaries, my plan permanently stops politicians from raiding the program’s trust fund. Congressional IOUs are no substitute for workers’ Social Security payments. We should use the federal Highway Trust Fund as a model for protecting the integrity of a pay-as-you-go system.

Cut, Balance and Grow also gives younger workers the option to own their Social Security contributions through personal retirement accounts that Washington politicians can never raid. Because young workers will own their contributions, they will be free to seek a market rate of return if they choose, and to leave their retirement savings to their dependents when they die.

Fixing America’s tax, spending and entitlement cultures will not be easy. But the status quo of byzantine taxes, loose spending and the perpetual delay of entitlement reform is a recipe for disaster.

Cut, Balance and Grow strikes a major blow against the Washington-knows-best mindset. It takes money from spendthrift bureaucrats and returns it to families. It puts fewer job-killing regulations on employers and more restrictions on politicians. It gives more freedom to Americans to control their own destiny. And just as importantly, the Cut, Balance and Grow plan paves the way for the job creation, balanced budgets and fiscal responsibility we need to get America working again.

Mr. Perry, a Republican, is the governor of Texas and a candidate for president.

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