Mick Mulvaney, director of the White House Office of Management and Budget, delivered the keynote address at the Competitive Enterprise Institute’s Annual Dinner and Reception on June 28th, 2018. Watch his full speech in the video below or read the selected highlights.
The Biggest Lie in Politics
I thought I’d start by talking about my friend, Barney Frank. … Barney and I, we had a good working relationship and we had become friends over the course of—we only overlapped for about 2 years. And right before he left, we went out to dinner… And what he said was, “You have to—just be aware of what the greatest lie is in politics.” And Barney said the greatest lie in politics is, “I hate to say ‘I told you so.’” He said, “that’s a lie. Everybody loves saying ‘I told you so.’” … And this is when I get to say “I told you so.”
The Growth Skeptics
So, Ben [Bernanke] got asked in a magazine one time, “Can you really get growth over 3 percent in this country?” And he was very short, he said, “probably not, I would take the under on that.” … Larry Summers was a little more pompous… He said, “I do not see how any examination of U.S. history could possibly support the Trump forecast as a reasonable expectation.” … Lastly, Jared Bernstein: “Still you’ve got Trump advisers and Cabinet designees going on about how their agenda will double the growth rate from 2 percent to 4 percent. I don’t see how they get there, especially if they’re banking on trickle down growth effects from their big regressive tax cuts.” So, it’s always fun when I have a bad day at the office, I like to pull this out the drawer and just read this.
Numbers Tell the Real Story
So, how did we get where we are? …You’ve got unemployment at 3.8 percent. The last time it was lower than that, I was one years old—1968. Business fixed investment… is up 10.4 percent on an annual basis so far this year. There’s been more than 3 million jobs created since the election. The April revenues that we took in at the Treasury were over half a trillion dollars in one month; it was the largest take ever. And I think everyone sort of paid attention to the Atlanta Fed that is still saying here, as we’re getting to the close of the quarter, that we could be as high as 4.5 percent growth this quarter. Those are great numbers—absolutely, great numbers. How did we get here?
Tax Incentives Matter
Everybody focuses on the low [tax] rates, and it’s great. I know it’s important, but beyond the rates, how is this different than what the Bush administration did? We have fundamentally changed the structure of the way that we tax wealth in this country. People focus on those low individual rates, and those are great. I choose to look at things like this way—the deduction for capital expenses. That is a huge, huge change.
Changing the Way Government Regulates
But we come up with this idea of not taxing people who left money in their business. We only tax you when you take it out. And we didn’t get all the way there with the corporate tax reform bill that we passed this year, but we got close. And so for the next 5 years, if you want to put all of your money back in your business, reinvest in yourself, reinvest in your workers, reinvest in your ideas and your dreams, we are going to give you a tax incentive to do that. That is a tremendous incentive to grow… But I actually think things could actually get better because I actually don’t think you’ve seen the full impact of the tax bill into the overall economy.
What else are we doing? Well, outside of taxes, well, energy. Of course, the one thing that everyone sort of ignores on the tax bill was the fact that we got ANWR open again. It took us 40 years to do that. We finally got the [Keystone] XL pipeline permitted—the DOE just approved a new permit for a new LNG plant down in Texas. We’ve ended the prohibition of coal leasing on federal lands. … I think we’re the largest oil producer in the world, largest gas producer in the world. That’s the first time we’ve been a net exporter in natural gas in 60 years. So, there again, within energy, everything’s sort of moving in the right direction, moving towards a healthy American economy again.
Reorg. You may have seen this week—I talked a little bit about this at the Cabinet meeting. …When you don’t reform a business, when you don’t reform an organization, when you don’t reform a government for 100 years, you end up with the stuff I talked about at the Cabinet meeting, which is this: We regulate cheese pizza at the FDA. If you put a single piece of pepperoni on it, it is now regulated by the USDA. It makes no sense at all. If you have an open-faced roast beef sandwich, it’s regulated by the USDA. I think, sometimes I get these backwards—if you add a piece of bread on top, it’s regulated by the FDA. If you are a salmon swimming in the ocean, you are regulated. I’m not sure you know if you are, but you actually are—by the Department of Commerce, but if you swim upstream, you are regulated by the Department of the Interior. But you have to climb a fish ladder owned by the Army Corps of Engineers to get there. This is just stupid, it makes no sense at all. This is what we’re trying to fix and reorganize. …Think about the combined burden that those types of things add to our economy and the type of opportunity we have to make things better. But that’s not what I came to talk about tonight.
I want to talk a little about deregulation. Because it is one of my favorite things to talk about. It’s been great having Neomi on the team, having an entire administration sort of focused on this idea of deregulation. By the way, some of the challenges we faced early on in hindsight make perfect sense, but going into it are completely bizarre, which is that we had forgotten how to do it.
So we get there and the first day we’re like, “Look, we’d like you to please start deregulating.” And they, you know, a lot of the agencies look around and they go, “Well, how do we do that?” A lot of them had not been there since the last time the government tried to deregulate. I mean, the last big real deregulation was during Reagan, so if you’ve only worked at the Department of Commerce for 20 years, you’ve probably not been asked to do it. …So, we had to figure out a way to use muscles that we had forgotten to use for a long period of time. …And I think last year, the president gave us a goal of get rid of 2 regs for every 1 new one that came in. We’ve ultimately finished at 22 to 1, which is not too bad.
Creating a New Opportunity Economy
What does all this mean? …If you’re in this room and you’re under 30 years old, this is the first time you’ve had a chance to work in a healthy American economy. You’ve been told since you got out of college or out of high school that 1.9 percent growth, that stagnant sort of growth, that slow growth, is the new normal. And for that reason, it’s been hard to find jobs, hard to find a good job, hard to find opportunities, hard to match up your degree with your job. And it’s different now.
You have a chance to be in a growing American economy, and that is a special and magical and truly unique thing. If you get fired, you will be able to find another job. We have more job openings right now than we have people looking for jobs; it’s the first time it’s ever happened in this country. If you don’t like your boss, and that’s—that describes most of the people at that table who work for me—you can quit and start your own business and know you’ve got a fighting chance to do it. You couldn’t do it in 2008 or 2009 or 2010. Those things are different … and if that, if that doesn’t speak to the new attitude in the country about hope and about confidence and about optimism, I don’t know what does.
Also, watch the annual “dinner movie” featuring the CEI staff in a light-hearted take on what a circus the world of Washington, D.C. politics can be.