An Economic Agenda for the GOP
The Republican Party must be positive, proactive and focused on restoring American economic vitality. Our agenda must be optimistic and pragmatic. We must welcome into the GOP anyone who believes that innovation, entrepreneurship and American ingenuity are the lifeblood of this country; that the role of government is to unlock and unleash the potential of all Americans; that business, most especially small business – not government – is the job-creation engine of growth; that our diverse citizenry is a great strength in an increasingly competitive, global economy; and that whenever possible Americans should keep their hard-earned money and make their own choices about how to spend, invest or save it.
We must now focus our efforts to ensure that the U.S. remains the leading economy in the world. Specifically:
Small businesses cant afford lobbyists to protect their interests. We must become the party of the “little guy”.
We must champion small business. Small businesses create two-thirds of all American jobs. Forming a small business represents the first step toward economic independence for many Americans. African-American, Hispanic-American, Asian-American and women-owned small businesses represent among the fastest growing segments of our economy. Raising taxes on small-business owners and entrepreneurs hurts every worker. We must make it easier for small businesses to form, hire and prosper. We should make permanent existing tax cuts for small businesses. Modifying depreciation schedules to permit small-business owners to expense capital equipment or technology purchases within one year can have a substantial impact on growth and job-creation. Any government-mandated program that increases the tax burden, or complicates the regulatory and compliance framework for small business, will be a drag on our economy and dampen job creation.
As the economic crisis deepens, most of the current discussion on stimulus measures or rescue plans has been centered on big business and big labor. The Republican Party should champion small businesses by working to quickly loosen credit to small businesses and stimulating small-business creation. Small businesses and start-ups are being starved of capital in this tough credit environment. Small businesses can’t afford lobbyists to protect their interests. We must become the party of the “little guy”.
We must champion tax reform. A reformed tax policy is critical to creating, attracting, and retaining capital, and this is vital to develop the next generation of entrepreneurs. Raising tax rates on capital gains and dividends will yield exactly the opposite result. The U.S. levies the second-highest business tax rate in the world. If taxes are increased on American companies that have operations overseas or we tax “excess profits”, as some Democrats have suggested, more capital and job-creation will move beyond our borders.
We must champion regulatory reform. The financial crisis underscores the urgent need to revamp the regulatory framework in this country. Our party should step forward and propose positive modifications to the existing regulatory architecture of inefficient and outdated agencies with unclear charters, limited visibility and inadequate clout. As important as specific policy prescriptions or interventions may be, agreement on guiding principles going forward is becoming equally vital. The unpredictability of government action to date has roiled markets and created uncertainty rather than relief. Effective markets require complete transparency, real accountability and even-handed consistency. The role of government should not be to pick winners and losers in industries, but rather to articulate those conditions which may precipitate government intervention as well as the rules that will guide such intervention.
We must champion transparency and accountability. Capital market participants of all types must be prepared to accept a requirement for transparency in all markets and for all financial instruments. Conflicts of interest, such as those that may have existed for credit-rating agencies, must be exposed. There should be real conditions attached to a tax-payer funded bail-out. For example, any company that receives taxpayer money should be prepared to ask its CEO and Board to resign. Financial institutions that have already received taxpayer assistance should be required to participate in the bail-out programs for critical industries by providing bridge loans.
The role of government should not be to pick winners and losers in industries, but rather to articulate those condition which may precipitate government intervention as well as the rules that will guide such intervention.
We must champion education reform. In a nation committed to opportunity, every student must have equal access to excellent schools. We must place parents and children at the center of the education process, empowering parents by greatly expanding their ability to choose among schools for their children. Consumers are better served when there is choice and competition, and parents and children will be served better if there is choice and competition in public education.
We must champion worker retraining. We must not leave the current generation of workers behind. For example, we should champion the reform of the unemployment insurance system so that we prepare workers for the next job in addition to paying them for their lost jobs. Unemployment benefits should also include an opportunity to learn new skills. We should strengthen our commitment to technical training and build tight linkages between employers and community colleges.
We must champion free trade. We cannot grow our economy or create jobs without fully participating in global trade. The U.S. gains far more jobs than it loses due to free trade: one in five American jobs depends on trade, and they are generally higher-skilled and higher-wage jobs. Constructing protectionist barriers will not save jobs, but will hurt economic growth.
We must champion innovation. Prospering in the global economy requires us to lead in the critical, 21st century industries including energy, healthcare, space and info-tech. We must unleash the power of American ingenuity and invest more in both privately-financed and publicly-funded R&D. We should expand R&D tax credits to encourage private sector investment and establish a permanent tax credit equal to 10 percent of wages spent on R&D. The Federal government should increase its own expenditures on R&D. Our federal government spends far more on agricultural subsidies than on R&D. Our priorities must shift to reflect the realities of this century.
We must champion immigration reform. Our economy has always been strengthened by immigration. We must continue to attract entrepreneurs, risk-takers and hard-working people from all over the world. We can be both a nation of laws and a nation that seeks brainpower.
America has always prospered because we have relied on the hard-work, ingenuity and creativity of generations of Americans. The Republican Party must step forward to lead this nation with twenty-first century programs.
–###–
Carly Fiorina is Chairman and CEO of Carly Fiorina Enterprises and former CEO of Hewlett-Packard from 1999-2005.