By Eric Cantor
U.S. News and World Report
July 26, 2012

Small businesses are caught in a riptide of red tape. The overwhelming onslaught of rules and regulations coming from Washington is making it nearly impossible to start or stay in business, let alone grow, succeed, and create jobs.

Since the president took office, his administration has had under review more than 400 regulations that cost the economy $100 million or more. According to the Small Business Administration, small businesses are facing annual regulatory costs of up to $10,000 per employee.

Keeping up with cumbersome paperwork and compliance requirements cost entrepreneurs time and money, and that means less capital for hiring new employees. This is making it harder for our nation’s small businessmen and women, who we are counting on to sustain our local economies and create jobs.

Every extra rule, regulation, or requirement where the government imposes a cost on the economy disrupts and distracts small business owners from growing their business. The last thing the economy needs right now are more roadblocks. We need to cut through the red tape to create an environment of certainty to promote innovation and unleash economic growth.

The president of Virginia’s Valley Bank in Roanoke tells me that new rules and regulations are flooding community banks almost daily. “Community banks find themselves so internally-focused on compliance related activities that they cannot attend to the job of extending credit,” he says, adding that it is hurting hopes for a sustained economic recovery. We need community banks focused on growing our local economies not wading in an unnecessary pool of red tape.

The owner of a trucking company in Ashland, Virginia, in my district, says that constant regulatory changes by the Environmental Protection Agency have caused the prices for his operation to go up. These rising costs have made it more difficult to operate today and even harder to plan for future.

Excessive regulations aren’t only impacting small businessmen and women. Major manufacturers like Richmond, Va.-based MeadWestvaco are facing a barrage of regulations from the EPA. The company’s senior expert on environmental regulations testified before a congressional panel that, “The current wave of regulations is unsustainable. Living with such an uncertain regulatory environment not only costs current jobs, but also prevents new jobs from being created.”

Since day one, House Republicans have been focused on creating a better environment for job growth. The House voted this week on the Red Tape Reduction and Small Business Job Creation Act to begin to roll back unnecessary red tape, giving businesses of all sizes more certainty and opportunity to grow and create jobs.

To end the ongoing overreach, our legislation would freeze costly new regulations until national unemployment drops to 6 percent or lower. To ensure smarter regulations are implemented moving forward, we would require all agencies to perform thorough cost-benefit analyses of proposed regulations. The bill would also increase transparency for federal agencies that have been operating outside the purview of regulatory review, such as the National Labor Relations Board. Further, our bill would streamline the federal permitting process since energy and construction projects across the country are being delayed or stopped entirely due, in large part, to a broken permitting process.

If we are to grow our economy and get more people back to work, Washington must get out of the way. Federal regulation must become smarter and less harmful to our economy. We know small businesses are built because of the men and women who take risks, work hard, and invest capital in new ideas. At a time when millions of Americans are struggling to find jobs, we must make it easier for these small business owners to grow and expand. Reducing red tape will empower our small businesses to start hiring again, create more jobs, and ensure a thriving economy for the future.

Our Constitution has endured the passage of time with remarkably few changes, being amended just 27 times in 223 years. Unfortunately, America’s debt limit has not been nearly so stable. Since World War II, Congress has increased the limit on the national debt 69 times. The reasons behind this disparity tell an important story.

Let’s begin with the debt limit. President Reagan once observed that “a government bureau is the nearest thing to eternal life we’ll ever see on this earth.” Once created, government programs build constituencies of special interests determined to keep the money flowing, whether or not the program is effective. In our time in Congress, we have placed many such programs on the chopping block, only to see pressure from the spending lobby win the day.

While the federal government has consistently collected revenue of about 18% of U.S. economic output, federal spending has consistently been even higher. The debt resulting from these budget deficits builds up until the debt limit is reached. And rather than fight the spending lobby, politicians have taken the easy route of raising the limit without cutting spending.

Rein in the debt

The relative scarcity of constitutional changes stems from the high hurdles for success. Constitutional amendments require the support of two-thirds of the House and the Senate and then three-fourths of the states. Because of these same requirements, successful amendments tend to stay in place. Only one, Prohibition, has ever been repealed. The moral of this story is clear. Anyone who hopes to rein in the debt and make Washington live within its means should support amending the Constitution to require a balanced budget.

Always a concern, the national debt has grown into a malignant cancer on our economy. Attacking this cancer at its root means cutting spending. If we do not, the U.S. will face a job-killing debt crisis within just a few years.

Promises, promises

Near-term spending cuts are necessary to alter the course, but they will not be enough without long-term changes. Likewise, promises of cuts 10 years from now mean little without a way to enforce them. The only way to truly guarantee delivery from future politicians is if the Constitution demands it. That’s why the House will vote next Wednesday on a balanced budget amendment that would require supermajorities in both chambers to run a deficit, raise the debt ceiling, raise taxes and spend more than 18% of GDP.

With the balanced budget movement gaining momentum, members of the spending lobby want to argue that Congress and the president already have the ability to control spending. Ability and discipline are not the same. If Washington actually had the discipline to live within its means over the long term, every American citizen would not owe $46,000 toward the national debt.

Today, this massive borrowing is taking a toll on our economy. As businesses defend against the higher taxes, inflation and borrowing costs likely to follow from the coming debt crisis, they take fewer risks and create fewer jobs. By cutting spending and balancing the budget, we can alleviate such fears and put the private sector back on offense.

The importance of the upcoming votes cannot be overstated. House and Senate passage of the Balanced Budget Amendment will make reckless borrowing a thing of the past and will ensure that our children enjoy futures full of opportunity. Let Democrats and Republicans join together to do the right thing and make a real difference for the future.

At a time when most Americans personally know someone who has lost their job, Eric understands government needs to get out of the way of small businesses and entrepreneurs and allow them to innovate so the economy can grow and create jobs.

As POLITICO reported yesterday, the Plan includes the following:

• Require congressional review and approval of any government regulations that have a significant impact on the economy or burden small businesses.
• Audit existing and pending regulations to identify and address those that hinder economic growth.
• Increase American competitiveness to spur investment and create more American jobs by streamlining the tax code and lowering the tax rate for businesses and individuals including small business owners to no more than 25%.
• Reform the tax code to allow American businesses to bring back their overseas profits without having to pay a tax penalty so they can invest in our economy and create American jobs.
• Pass the three pending free trade agreements with Colombia, Panama, and South Korea to create up to 250,000 jobs.
• Continue to open new markets to American made products.
• Modernize our patent system to protect our nation’s innovators, discourage frivolous lawsuits, and expedite patent reviews.
• Re-Authorize and improve federal programs and approval processes to streamline development of new products.
• Remove barriers to building a first class workforce so that the United States can compete in the global marketplace and lead the way in technological development and growth.
• Maximize domestic energy production to ensure an energy policy for the 21st century.
• Promote lower energy prices through increased domestic production.
• Encourage all forms of energy production.
• Build upon the House Republicans’ Budget by enacting significant spending cuts.

To view a video of the Plan’s release and read the full text, please click here.

Your government is a fiscal train wreck. It is over $14 trillion in debt and borrows nearly 40 cents of every dollar that it spends. Before us lie two divergent paths: one defined by crushing debt, slow growth and diminished opportunity; and one defined by achievement, innovation and American leadership. We stand at a crossroads. If we are to leave our children a nation that offers everyone a fair shot at earning their success, we must take the later path. That path of achievement requires political courage and honestly confronting our challenges.

House Republicans have taken an honest, responsible approach to confront the debt crisis facing our nation. We have finally started cutting spending. We have worked to make our government more efficient by doing more with less. And we continue to focus on private sector job growth so that Americans can get back to work. Unfortunately, we have had to drag the president kicking and screaming to get serious and work with us.

Take the Republican budget, for example, which passed the House last week. It is a fact-based proposal that pays down our debt over time and grows our way back to prosperity. It stops the government from spending money it doesn’t have, saving nearly $6 trillion over the next ten years. Despite the political risk, we lead where the president failed by addressing our insolvent entitlement programs.

Leading Democrats have said they will use this budget as a political weapon to attack Republicans, despite the fact that our plan guarantees benefits for today’s seniors and those nearing retirement. The truth is, these programs are the biggest drivers of our debt, and without significant reforms, they will go broke. Anyone who tells you otherwise – including the president – is simply not being honest. That is why we strengthen and restructure these important programs, for those of us 54 and younger, to ensure that these safety nets will still be available for our children should they need it.

We know cutting spending alone is not enough. Families and business people continue to struggle, which is why our budget includes fundamental tax reform. A more competitive tax system will get our economy churning, create jobs and spur investment in the private sector. We call to end the crony capitalism that allows privileged industries to take advantage of complexities in the tax code, replacing it with a simpler system that lowers rates for all, but makes sure everyone pays their fair share.

Today, President Obama will come to Virginia to deliver the latest in a series of speeches high on partisan attacks, low on solutions. The one specific proposal that he will again champion is a tax increase on working families and small businessmen and women. He will not offer specifics about how to pay down our debt. He will not outline a plan to save entitlement programs for the next generation. He will not offer a single proposal to increase jobs. Instead, he’ll attack those offering serious solutions to overcome these challenges. That isn’t leadership.

I believe we can and will overcome these challenges, but it is going to require honesty and working together on solutions that put America on the path to prosperity. Mr. President, during your historic bid for the White House, you promised to change the way Washington works. But there’s no greater manifestation of the business-as-usual mentality than punting tough decisions and attacking those offering serious solutions. If you will work with us, we can solve these problems for the next generation, rather than simply using them for gain in the next election.

House Republicans took an unprecedented stand in March, imposing an immediate moratorium on earmarks for the remainder of the Congress. Yet, because the governing rules of one Congress cannot bind the next, this moratorium will expire on Jan. 3, 2011. I do not believe that should be allowed to happen.

A lot has happened over the last eight months. Unfortunately none of it has done anything to rein in spending, eliminate waste or send the message to frustrated people across this country that Washington gets it.

That is why the next Republican Conference should immediately move to eliminate earmarks. Should Republicans be elected as the majority party, I believe that we should extend the moratorium to the entire House – to Democrats and Republicans alike. And I encourage President Barack Obama and the White House to take a similar step.

There is no question that earmarks – rightly or wrongly – have become the poster child for Washington’s wasteful spending binges. They have been linked to corruption and scandal, and serve as a fuel line for the culture of spending that has dominated Washington far too long. These reasons alone would justify completely eliminating earmarks, but the basis for my position doesn’t end there.

The old adage that he who can’t be trusted to reform the “small” problems can’t be trusted to reform the “large” ones applies as much to government as to individuals. Both Republicans and Democrats have an enormous task before us if we are going to get America’s fiscal house in order.

We will have to propose and execute real reductions to existing programs. If we hope to preserve Social Security and Medicare for seniors, younger workers and our children, we must begin the conversation about common-sense ways to reform both programs.

These are big things – and there is little question that turning trillion-dollar deficits into surpluses, while starting to pay down our national debt, is an enormous mountain to climb. Yet the long climb to fiscal responsibility must begin with a few smaller, but necessary, steps.

If Republicans put forward real federal spending reductions while simultaneously returning to the old way of earmarking billions of dollars, we will rightfully forfeit the people’s trust. After all, how can anyone defend reducing spending for housing programs, for example, while still earmarking for their favorite local museum?

Additionally, over the last decade, Congress has spent too much time in the process of earmarking. Not only did the number of earmarks explode, but the amount of time spent by members and their staff soliciting, vetting, submitting and attempting to secure earmarks soared as well.

Congress must change its ways from the inside out. That means time once spent securing earmarks would be far better spent overseeing federal agencies, reforming federal programs, cutting spending or eliminating barriers to job creation and economic recovery.

The challenges confronting our country — and our Congress — are far too great for so much time and money to be spent on earmarks.

I have little doubt that this position is going to be controversial in Washington. I have heard the arguments from those who believe we need to return to earmarking. I believe it’s important to answer a few of them:

• Some assert that members should represent their constituents’ needs. Of course they should! Yet we, as conservatives, must not lose sight of the fact that Congress is the national legislature. It is our duty to consider those things that cannot be accomplished by state or local governments or, even better – private associations. When Congress spends a single dollar, that dollar is taken from the paycheck of a family in Culpeper, or a young worker in Richmond, or, as is now the case, borrowed and placed on their already maxed out credit card. We have an obligation to uphold the national interest, and that means ensuring that decisions about funding local streetscape improvements are returned to local officials.
• Some make the case that if Congress doesn’t earmark, unelected bureaucrats will decide how to spend the same money. In the next Congress, however, our mission must be to ensure that time is spent reducing spending — period. If bureaucrats are misspending funds or wasting them on low priority projects, our responsibility should be to conduct the proper oversight to hold them to account and fix the problem. Taxpayers deserve that we hold the administration accountable. In recent years, earmarking has taken the place of setting guidelines and conducting strong oversight. We will change that.

Earmarks are a symptom of a disease — and that disease is Washington’s runaway spending. There is no silver bullet. For us to successfully eliminate the sickness, several prescriptions are needed. One is to apply the current House Republican earmark moratorium to all House members.

Rep. Eric Cantor (R-Va.) is the House Republican whip.

Many months ago, as indications of a Republican sweep in 2010 first materialized, Rep. Eric Cantor (R-7th) suggested that opposition to the administration’s statist agenda would translate into significant GOP gains. In a conversation with the Editorial Board, he added that if his party was to govern effectively it would need to offer a coherent program to the American people. The publication of Young Guns: A New Generation of Conservative Leaders does much of that. In the book, Cantor (whose wife Diana serves on the board of Media General, the newspaper’s corporate parent) joins fellow GOP Reps. Paul Ryan of Wisconsin and Kevin McCarthy of California in outlining a Republican vision.

Cantor opens with a critique of the Obama presidency and congressional Democrats — and of his own party’s performance during its years of legislative ascendancy. He knew his side had lost its way, he explains, when Parade magazine reported the news about “the bridge to nowhere.” He laments a trend that saw the idealism of 1994′s Contract with America perverted by politics as usual. Disenchantment with Republicans generally and, we note, with the war in Iraq specifically, contributed to Democratic landslides in 2006 and 2008.

Young Guns offers a “better way.” Rather than trying to stimulate the economy with massive and haphazard federal interventions, Cantor and his colleagues would rely on the essential strengths of free markets, and on the entrepreneurial spirit and expertise of the citizenry. Government cannot disappear but it can smoothe the way. Its policies should promote the creation of wealth, not the confiscation of it. Although most of Young Guns’ content asserts attainable goals, Ryan’s ideas regarding Social Security will not help the cause, alas.

And despite the challenge posed by a recession that originated with a Republican in the White House, national security remains the federal government’s principal obligation. Cantor and Co. do not omit this. Indeed, Young Guns implicitly adapts Ronald Reagan’s combination of realism and vision to global circumstances that have changed since the end of the Cold War.

Young Guns is more oriented toward policy than was the 1994 contract. Yet although its recommendations reflect a philosophical perspective, the book does not resemble Barry Goldwater’s The Conscience of a Conservative, which more vigorously engaged the intellect. Young Guns offers immediacy and serves as a practical guide not only to campaigning but to governing. It tells voters what they need to know. Mainstream Republicans and much of the Tea Party will like its direction. True independents will find the overall prospectus congenial. The left will sneer.

The cover depicts three appealing fellows, whose backgrounds reveal differences in religion, regional culture, ethnicity, and other influences. The success of their endeavor will be apparent if future editions portray not only three white guys in suits but the rainbow this country has wonderfully become.

America is at a tipping point, and Republicans have begun to take action.

Last week, the House passed unprecedented legislation reducing discretionary spending this fiscal year by more than $100 billion. In addition, we made clear that our long-term budget, to be unveiled in the spring, will address the entitlement crisis that threatens to bankrupt our country – a long overdue move that politicians for too long have kicked down the road. This show of fiscal restraint represents not merely a clean break with Congress’ free-spending past, but a rededication to economic growth and a laser-like focus on job creation.

It’s important to recognize the link between cutting spending and growing the economy. Like the gardener pruning the tree, we do not cut for the sake of cutting, but out of necessity. It’s the only way to restore economic health and free up the private capital necessary for new growth. Put simply, less government spending equals more private sector jobs.

Economic growth is generated when businesses weigh their risks against their potential reward (returns after taxes) and make a decision that an investment is worthwhile. That investment can take the form of a capital investment or an investment in additional labor (jobs). Especially in this increasingly interconnected world, businesses will logically move their investments to wherever they can achieve the greatest returns without assuming too much additional risk.

For many years, America offered unparalleled opportunity for businesses to grow and succeed. Investors could find in the United States comparatively low taxes, a consistent regulatory environment and a stable currency. Tens of millions of jobs were created as America served as the global driver of growth and prosperity.

Yet today many doubt whether America can still power the world economy forward. Uncertainty over our deteriorating fiscal situation and increasingly burdensome regulatory structure has made job creators and investors think twice about deploying their capital in the United States.

As the federal government continues to borrow nearly 40 cents for every dollar it spends, America’s $14 trillion debt hangs over the economy like a dark cloud waiting to unleash a violent storm of higher taxes, inflation and higher borrowing costs. The very businesses and investors we need to grow our economy are waiting to see if this cloud will pass.

The more local and national business owners I meet with, the more obvious it becomes that our businesses are innovative and poised to grow; government just has to stop making it harder for them to compete.

As part of our larger effort, Republicans are reviewing and cutting job-impeding regulations that stifle job growth. Next week, we will repeal the onerous 1099 reporting requirement to provide small businesses with much-needed relief. Additionally, we are focused on other ways to grow the economy, including tax reform and implementing job-creating trade agreements.

Will the administration and the Senate join us in getting our fiscal house in order? Or will they continue to add entitlements and borrow and spend at unsustainable levels? If only they would unite with us, confidence can be restored in America and capital investment can return.

But if they don’t walk us back from the precipice, businesses will see only weaker prospects for profit and growth on our shores – and turn instead to other countries they deem safer. What does this mean for America? It means we would be a lot more like Europe. Our graduates and work force would have less opportunity to find work. Our prospective entrepreneurs would have less incentive to pursue their ideas. Unemployment would be permanently higher and growth would be permanently weaker.

During his recent speech to the Chamber of Commerce, President Barack Obama insisted that in response to his policies, businesses have a “responsibility” to hire more workers and support the U.S. economy. But that’s not how it works in market-based economies. There is no magic hiring wand.

If the president genuinely wants to create jobs, he should take a cue from Virginia. Gov. Bob McDonnell has turned a $1.8 billion deficit into a $403 million surplus, cut $4.2 billion out of the 2011 and 2012 budgets – and he has done so without raising taxes.

America needs to show the world that we are serious about slashing our debt. By cutting $100 billion off the president’s proposed budget and taking the lead in reforming entitlements, House Republicans have demonstrated that we are more than ready to help make the tough choices necessary to move us in the right direction. Moving forward, we will use every tool at our disposal to remove barriers to economic growth so that people can get back to work and we can start to get our fiscal house in order.