WASHINGTON – I want to thank the Commerce Department for hosting the first SelectUSA summit.
I am here today with a very simple message. We do not take investment in the United States for granted. We know it is important for jobs. It is important for our businesses. And it is important for our prosperity.
In our increasingly global economy, the United States cannot settle for the status quo. That is why President Obama has made fueling America’s competitiveness the cornerstone of his economic policies. Our economy is the largest in the world, and looking to the future we need to make it even stronger by improving worker training and education, upgrading our infrastructure, driving innovation and research, and growing our manufacturing base. The truth is, there are additional things we can and want to do to make America an even stronger magnet for investment.
Before talking more about what makes our economy such an attractive place to invest and what we plan to do to make it even more attractive, let me start by saying a few words about the state of the world economy.
There is broad evidence of recovery across the global landscape. Economic conditions, particularly in advanced economies, have improved. But there is also no doubt that global demand is not where it needs to be. In too many countries, unemployment levels are unacceptably high, especially among young people. As I have said before, leaders around the world should make strengthening demand and creating jobs a priority so we can unlock growth that is robust, sustainable, and balanced.
Looking at Europe, it seems the long recession is slowly fading even as critical steps have been taken to restore financial stability. This is good news since Europe is so integral to the global economy. Nevertheless, growth in Europe remains weak, with domestic demand particularly anemic. It is critical that surplus countries contribute more to demand as deficit countries undergo adjustment. Europe must also press forward on other measures to address high unemployment and the formation of a strong banking union.
After years of economic weakness and deflation, Japan appears to be turning an economic corner. Economic growth has improved, and policymakers have demonstrated a commitment to economic transition. This will require a careful balancing of fiscal policy and advancing reforms that increase domestic demand.
Economic growth across many emerging market economies remains positive, but it has slowed somewhat. This slowdown is primarily because post-crisis stimulus has waned, the demand for exports has fallen, and credit conditions have tightened. While these headwinds will put pressure on some emerging economies going forward, most emerging markets have strengthened their institutions and frameworks over the past decade. This will help increase their ability to adjust to shifts in capital flows.
In China—the world’s second largest economy—policymakers have also made substantial commitments to reforms. Growth there continues to remain relatively robust, but there is the question of how to sustain robust rates of growth over the medium term as the Chinese economy rebalances toward domestic consumption and away from domestic investment and exports. At the same time, China needs to increase the flexibility of its exchange-rate regime and permit more market-determined access to capital and more open access to markets. The success of this transition matters to the U.S., to Asian countries, and the global economy.
China is currently conducting a series of high level meetings designed to inform their reform agenda, and we look forward to seeing how that plan evolves in the coming weeks.
As we meet this morning, there really has never been another time when the world economy has been so interconnected. And it is clear that what happens across the global economic landscape matters to us here at home. Our prosperity grows when other countries succeed. Economic challenges abroad reduce economic activity here in the U.S. And so we have a stake in each other’s future.
We need the world to sustain greater growth, and the world continues to need the United States to be the backbone of a stable global economy.
Now, when you look at the United States, while we still have work to do to speed up growth and create more jobs, we have been making significant progress. And one of the reasons we have been making progress is because the core of our economy is resilient.
To fully appreciate that resilience, it is important to remember how much things have changed since the dark days of 2008.
Five years ago, our economy was hit by a devastating financial crisis that helped trigger the worst recession since the Great Depression.
Our banks were on the brink. Our housing market was in deep trouble. And our auto industry was sliding toward the abyss.
In fact, in the months before President Obama was sworn into office, we were shedding roughly 800,000 jobs a month, and our economy was shrinking at an 8.3 percent annual rate.
There was real concern that the U.S. economy would not bounce back.
But it did—thanks to the tenacity of the American people, the determination of the private sector, and the bold, decisive actions taken across government.
Right away, the President moved to pull our economy out of the recession. He worked to put out the financial fires, stabilize the automakers, and jumpstart growth.
In addition, he pursued policies to fuel our economy into the future. That meant investing in education and infrastructure. Fixing a health care system that was broken. Creating new rules so our financial system works better for consumers and investors. Locking in lower taxes for 98 percent of all Americans. And lowering barriers so that entrepreneurs and businesses can innovate, grow, and hire.
Because of these measures, we are moving in the right direction. The positive signs are real. Since 2009, our economy has been expanding. Over the past 43 months, private employers have added 7.6 million jobs. In fact, businesses have added more than 2 million jobs over the last year alone. And the end of this year and beginning of next show signs of further progress.
The auto industry is growing again. Manufacturing has increased. The housing market has improved. American companies like Ford and Apple are starting to move operations back to the United States. We sell more products made in America to the rest of the world than ever before. The cost of health care is growing at its slowest rate in years. And our deficits are half of what they were when the President took office.
So we have seen the United States economy make a turnaround. Our economy has actually recovered faster than any other advanced economy. And just as it is becoming more expensive and more difficult to do business in other parts of the world, our economy is becoming more competitive and more attractive. Business leaders from around the world tell me all the time that there is no other place where they would rather do business.
On my very first trip as Treasury Secretary, I visited a plant in Alpharetta, Georgia, and saw firsthand American workers producing electronic equipment that would be added to construction machinery for export to China. The plant is owned and operated by Siemens, the German-based engineering company, and it is one of 130 manufacturing facilities that Siemens runs throughout our country. Siemens has invested more than $25 billion in the United States over the past decade, and it invests about $1 billion in research and development here annually.
When explaining why the company is so committed to the United States, Helmuth Ludwig, the CEO of Siemens Industry Sector, North America, puts it this way: “America produces better than anyone.”
The heart of our ability to produce better than anyone is the American people. Our workers are talented and highly productive. Our entrepreneurs are the most determined and innovative.
At the same time, we are the largest single market in the world. We have a deep infrastructure that connects this vast and vibrant market through pipelines, ports, roads, and bridges. And our universities attract and challenge the best and brightest minds from around the globe.
On top of that, we are experiencing an energy revolution in America. Today, the United States is less dependent on foreign oil than at any time in more than two decades. We produce more oil at home than we have in nearly 25 years, and more natural gas than any time in history. This transformation is driving down energy costs for consumers and businesses.
And our increase in energy production is not limited to oil and gas. Energy from renewable sources like wind and solar doubled in the President’s first term, and we will continue to make investments in these cutting-edge technologies.
So our economy has made progress, and that progress has made the United States an even better place to invest.
But I want to underscore for everyone here that we are not satisfied with the current pace of job creation and economic growth. We know there are things we can do to invest in American skills, American innovation, and American infrastructure so that the United States remains the most attractive place around the globe to do business. Taking actions in these areas is good for growth and job creation.
While the process created unnecessary anxiety, Congress proved that it can still do what is needed when it came together on a bipartisan basis just two weeks ago to reopen our government and raise the statutory debt limit. It is now time for Congress to make a pro-growth, pro-jobs agenda the focal point. This will strengthen our economy at home and further cement the United States as the best place to invest, hire and grow businesses.
Let me point to the key areas where we can make a difference going forward.
First, as Democrats and Republicans meet to produce a budget, they have an opportunity to forge an agreement focused on restoring our long-term fiscal health while making targeted investments to grow our economy. They should use this occasion to replace the corrosive across-the-board cuts known as sequestration with fair and balanced deficit reduction policies. It is crucial that we close wasteful tax loopholes, eliminate costs where it makes sense, and use some of the resources we free up to invest in a few key areas like manufacturing, infrastructure, and education.
Second, Congress should finish comprehensive immigration reform and send a bill to the President for his signature. The Senate has already passed bipartisan legislation, and it is awaiting passage in the House of Representatives.
This immigration legislation would strengthen our borders, chart a path to earned citizenship, and increase economic growth by more than a trillion dollars. It drives growth by attracting highly skilled scientists, engineers, and entrepreneurs to our country. It will bring greater investment in the United States from beyond our shores, create new job opportunities, ignite new consumer demand, and spark business activity. It would do all this while increasing payroll tax revenue that will reduce our deficit and put Social Security and Medicare on a more stable footing.
Another bipartisan bill that can strengthen our economy is the farm bill. Bipartisan legislation that has already passed the Senate is designed to protect America’s farmers and ranchers and provide a safety net for America’s most vulnerable children.
The farm bill conferees have an opportunity to work together to develop a bipartisan package that promotes economic growth and job creation while ensuring that a generation of needy children are well nourished.
Over the years, Democrats and Republicans have come together to foster economic growth, job creation, and investment. We can again see that kind of bipartisan progress as we work together to reform how we tax businesses while upgrading our infrastructure to meet the economic needs of the future.
Let me be clear: the President is committed to business tax reform. This will help create and retain good jobs in the United States. The fact is, the United States now has one of the highest statutory corporate tax rates in the world. But as high as that rate is, it only raises about an average amount of revenue as a share of GDP when compared to other advanced economies. Our tax code is also full of special interest tax breaks and loopholes, allowing some companies to pay little or nothing in taxes while hurting others that are investing in the United States. We can do better. And we can do this by broadening the tax base and lowering tax rates in a way that does not add a dime to the federal budget deficit. The President has put forward the details of his approach to business tax reform, and he has made clear his commitment to budget-neutral business tax reform paired with an infrastructure package, paid for with one-time revenue.
We have a real opportunity ahead to seize the mantle of tax reform and establish a simpler, fairer, and more competitive business tax system in the United States. The plans currently being considered in Congress right now share much in common with the approach the President has put forward, and there is no reason why we cannot start with the substantial policy areas that we agree on and come together to find common ground.
In addition to reforming our tax system, we must finish the hard work of creating new trade agreements that are free and fair. These agreements must open up markets for America’s businesses. And they must add to the millions of American jobs that are currently supported by trade. As Congress comes together in support of trade deals, we will help expand the biggest, most dynamic marketplace in the global economy and reinforce America’s position as the preeminent platform to invest and export.
To that end, we are working to complete a Trans-Pacific Partnership. When completed, this comprehensive, high-standard agreement will boost exports and level the playing field in the Asia Pacific.
I want to point out that the United States welcomes investment from around the world from every type of enterprise and in all sectors. We are committed to maintaining the most open and transparent investment environment. Our process for reviewing the national security implications of foreign investment in the U.S. focuses solely on national security considerations, and reviews are completed within a period of one to three months.
So as we press forward, we know where we need to focus our efforts. The priorities I just outlined are clear and doable. They amount to real solutions that will make a real difference for our economy now and in the future.
Let me close by thanking the Commerce Department for hosting this summit as well as everyone for coming today. America has always been known as the land of opportunity—a place where you can make it if you try. And have no doubt, opportunity in the United States is very much alive and well. It is alive for our workers. It is alive for our businesses. And it is alive for all of you who want to invest here.
Thank you.
