The Next Generation of Growth

The last few weeks have brought some encouraging economic headlines. But things are still rough on the economic frontlines. Students know that well—because thousands are graduating with a diploma in one hand and an unemployment check in the other.

One big reason for that: George W. Bush has no strategy for steady, healthy, long-term growth and job-creation. And it shows—he’s presided over the loss of more than 2.5 million private sector jobs over the last three years. In the process, he has run up a big debt your generation will have to pay off, tightened the squeeze on middle class families and failed to open the doors of educational opportunity to more young people.

America’s economy needs a fresh start. And I have a plan to do just that—to help our businesses create 10 million new jobs in my first term, to balance the budget by the end of my second term and ease the growing financial burden on America’s middle class. To make an economy grow and create high-paying, high-quality jobs for this generation and the next, a president needs to understand how business works. I’m the son of a small-businessman who worked days and nights, balanced his books and taught his children to respect every dollar. So I’ve always appreciated the fact that jobs and wealth are created because of private labor, private investment, private productivity and private innovation.

But government has an important part to play. It must create the conditions for growth. When it does and the private sector responds, everyone wins. That’s exactly what happened during the Clinton administration: good government policies encouraged and unleashed the genius of American enterprise.

The economy grew in large part because, after years of mounting deficits that put a dark cloud over our economy, President Clinton and the Democratic Congress had the courage to change course. We got our government out of hock—easing a huge burden that was squarely on the backs of your generation. We cut taxes strategically to rev up the engines of growth. We made smart investments in education and other incubators of innovation. And we opened markets around the world. In short, we, like any successful business, had a growth strategy. We stuck to it. And it worked.

We should learn from and build on what worked in the 1990s. And one of the most important steps Bill Clinton took was to get rid of the massive deficits that were sapping our economic strength and get our budget back in balance. After three years of George W. Bush’s reckless fiscal mismanagement, which erased all the progress we made and run up $400 billion deficits for the next decade, we desperately need new leadership.

I have put forward a realistic and responsible plan to get our fiscal house in order: ask those at the top and big corporations to pay more of their fair share, cap discretionary spending at the rate of inflation, return to pay-as-you-go budgeting, eliminate wasteful duplication in our bureaucracy, crack down on corporate welfare and phase in new spending as we can afford it.

Another piece of the successful Clinton blueprint I will build on is opening new markets—because we need more markets if we want to sell more of our products. Recent history bears this out. Trade was one of the keys to the creation of those 22 million jobs in the 1990s. In fact, U.S. exports to Canada and Mexico grew by more than $110 billion between 1993, when NAFTA was enacted, and last year.

Second, I’m going to help spur investment and growth by cutting taxes strategically for innovators, manufacturers and small businesses. Giving a tax credit for factories that create new jobs here in America. Eliminating the capital gains tax for new investments in startups. And giving a credit for the purchase of information technology. We’ve lost manufacturing jobs every single month since George W. Bush has been in office; it’s time to stop the bleeding.

Third, no long-term growth strategy can forget education—because we need a high-skilled workforce to win in an increasingly competitive global economy. I’m going to keep the public school reform promise that George W. Bush, by under-funding the No Child Left Behind Act, has broken so badly. And I will make college more affordable—by dramatically increasing the Pell Grant and shifting toward direct government loans. Banks should not be squeezing every last penny of profit out of young people who are getting the skills they need to better themselves and lead our economy.

The final step is making taxes fair again, and easing the squeeze on the middle class. Many of you and your peers from middle-income families are getting hammered by rising tuition costs. The same is true for health care, child care and long-term costs. And just at the time when you need some relief, George W. Bush is dumping more and more of the tax burden on your backs. That’s not right.

America cannot be strong without a strong middle class. And that’s why I am the only candidate who has gone beyond the stale debate about repealing some or all of the Bush tax cuts, and proposed fundamental tax reform. My plan would give a tax cut to 98 percent of taxpayers, while asking the top 2 percent to pay more of their fair share. It’s not only fully paid for, it would save hundreds of billions of dollars to help reduce the deficit every year.

Compare that to Howard Dean, who would repeal all of the middle class tax cuts that we Democrats fought to pass over the last three years, and you’ll find that the average middle class family with two kids in New Hampshire would pay $2,700 more a year under Howard Dean. That’s enough money to pay a big chunk of the average state college tuition. Or to buy an iMac and an iPod.

That’s the difference between Howard Dean and me. He wants to take the country back—back to the days before Bill Clinton. I want to move the country and our economy forward—by doing what works to get America working again.

United States Senator Joseph I. Lieberman, a Democrat from Connecticut, is a candidate for U.S. president. He will be appearing at “Conversations with the Candidates” in Lowell House at 4:30 p.m. and on “Hardball” at the Institute of Politics at 6 p.m. this evening.