Texas Gov. Rick Perry answers questions about jobs, taxes, energy resources and other issues facing the business and manufacturing industry.
Candidates for the Republican nomination for president gathered at Vermeer Corporation headquarters in Pella, Iowa for a forum sponsored by the National Association of Manufacturers and broadcast by Iowa Public Television.
Candidates participating in the forum included Rep. Michele Bachmann (R-MN), former Rep. Newt Gingrich (R-GA), Rep. Ron Paul (R-TX), Texas Gov. Rick Perry (R-TX) and former Sen. Rick Santorum (R-PA). The forum was moderated by Iowa Gov. Terry Branstad and Nightly Business Report Co-Anchor and Managing Editor Tom Hudson.
Hudson: We're joined now by our first candidate, Texas Governor Rick Perry. Governor Perry, welcome back to Iowa.
Perry: Thank you, it's good to be back in Iowa again. It looks like the corn crop is just about out.
Hudson: And it's been a very good year certainly. But not a great year for American jobs. The average American worker who loses his or her job today can expect to not find a job for 40 weeks. The election is 52 weeks from this week. Whirlpool just announced it was closing a plant in Arkansas losing 5,000 jobs. If your tax plan was implemented with the flat tax, optional flat tax, what would that mean for those workers losing jobs today before election day?
Perry: Well, there are a number of parts of my, not only my jobs plan but my tax plan. I want to talk about the jobs plan first, about getting Americans back to work on the energy side of things without having to go to Congress, without asking anything, signing my name to executive orders and to executive actions you could open up these western lands for our energy side of things and putting some people back to work almost immediately. When you look and see what has happened in North Dakota, Terry, when you see what has happened in the Marcellus Shale up in Pennsylvania and places in Texas where they have opened up these new shale plays, get our coal industry back. This President of the United States, he's at war against the coal industry so getting Americans to work almost immediately is my goal and I've got a pretty good record of that. Terry and I compete against each other from the standpoint of state against state and we have created over a million net new jobs while I have been the Governor of Texas and this President has overseen 2.5 million jobs being killed and it has been more off of the regulatory side. When you think about Obamacare, when you think about the EPA I don't know what Vermeer has to add to the cost of one of these pieces of equipment right here just because of EPA but I guarantee you it is a substantial amount of money and I'd pull back every one of those regulations since 2008 and check then for cost versus benefit and nearly all of them are going to get pitched out because the benefit is going to be miniscule relative to the cost.
Hudson: Governor Perry, Whirlpool announced those 5,000 job cuts, they didn't cite regulations though, the company cited consumer demand. That was why they are cutting jobs here in the United States.
Perry: But you understand why there's consumer demand being lost out there. I mean, the people have lost confidence that they can go and risk their capital. I mean, that is what is going on in America. For three years we have had a President of the United States that has sent a clear message that they do not believe in the free market enterprise of which I grew up with. They believe that if we would stimulate the economy with more federal money, if we pitch more dollars out into the economy that it would create jobs. We know that doesn't work. In Texas or in Iowa or whatever state it is we know that the way that you create jobs is by not overtaxing, over regulating or over litigating and then the small businessmen and women or for that matter somebody like Whirlpool, a big business, they know that they have the confidence they can risk their capital, have a chance to have a return on investment and they hire people and at that particular point in time that is how you take an economy off. It has worked in the state of Texas for a decade. I think we're like the 15th largest economy in the world. If it will work in Texas it will work in this country.
Branstad: Governor, your state leads the country in terms of wind generation and we are a state that also generates a lot of electricity from wind, we're up to 20%.
Perry: You're quick on our tail.
Branstad: What we would like to know -- the wind energy tax credit is going to expire, it has expired three times previously. Senator Grassley has been a real champion of this. We would like to see it extended for four years. Would you support extending that? And also would you support retaining the renewable energy standard which has helped us reduce our dependency on foreign oil?
Perry: I happen to believe the federal government needs to be completely out of the energy business picking winners and losers and let me share with you why. In exchange to get rid of all of those regulations that are out there and whether you're in the oil and gas business and the tax credits that they get, whether you're in the ethanol business and the renewable fuel standard or whether you're in the wind side, from Washington, D.C. I do not think it is the federal government's business to be picking winners and losers and frankly on any of our energy sources. I mean, these two solar debacles that we've seen are pretty good examples of that. But if a state wants to, which is what we did, Terry, we put into place in the state of Texas an incentive for renewables and the wind energy came in and took great advantage of that, that's the reason we became the number one wind energy producing state in the country. I think if states want to compete against each other by putting those types of standards, those types of incentives in place that is a correct and a proper way for the state. But at the federal level I do not believe that the bureaucrats in Washington, D.C. ought to be picking winners and losers in the energy industry or for that matter in any other industry. They ought to get back to what they ought to have been doing which is standing a good military and securing our border and then let the states work out the rest of most of these things.
Hudson: Governor, I know we have a question from the audience on energy. Before we get to that, what role should the federal government play in supporting research and development within the energy industry?
Perry: R&D is the one place that I would allow the federal government to continue to be engaged and to give those credits because that is where the private sector is going to come up with the new ways to burn coal cleaner, we're going to come up with the new ways to use the DDGs in a new and exciting way for the feeding industry, they're going to be the ones that come up with the technology on the solar side or on the wind side or energy sources that we haven't even thought of yet. R&D absolutely correct but the idea of us giving $535 million to some solar company just because they've got a good lobbyist that could get them into the White House, that's nuts and we need to get away from that and allow the private sector, the private sector and the marketplace to decide who the winners and the losers are when it comes to energy.
Hudson: Governor, let's take that question in energy from Wayne Millage here in the audience ... Rex Millage, excuse me.
Millage: Good morning. My name is Rex Millage. I work at the parts distribution center here at Vermeer. I've heard a lot of talk about energy taxes and I have two concerns, the first being manufacturing uses a lot of energy and I'm concerned how that could affect my company and my job. Secondly, I commute 70 miles round trip a day to work and I'm wondering whether that will affect if energy taxes will translate into higher gas prices and home heating costs.
Perry: Let me just talk about the energy industry as a whole and you've already heard me kind of broadly talk about I'm an all of the above energy guy. I think this country ought to be allowing the use of -- we're sitting on 300 years worth of energy in this country. We're on a treasure trove. We're the Saudi Arabia of coal and we've got an administration that has basically said we're not going to allow you to use it and we know that we can burn these sources of carbon in a way that is safe for the environment. We have cleaned up our air in Texas over the last decade, 27% reduction of ozone levels, 58% reductions of nitrogen oxide, Terry. We know how to do this. It is our kids' air, it is their air they're breathing. I suggest to you, Terry and his environmental officers in Iowa would do a whole lot better job of making sure that your environment is clean in this state than some bureaucrat in Washington, D.C.. Allow these companies to explore and to develop all of these different energy sources. I will suggest to you that if you allow the R&D credits and you get the government out of the business of picking winners and losers not only will energy become substantially more prevalent and have a lot more different choices but the prices will go down as well.
Hudson: Governor, let's talk about trade policy because the United States obviously imports a lot of that energy that Rex is talking about here. How would your trade policy encourage domestic energy production and perhaps open up new markets for U.S. coal and U.S. natural gas?
Perry: Well, let me go back to talking about this huge amount of energy that we have in this country and our lack of commitment from the current administration and frankly previous administrations but in particular this administration to using domestic sources of energy. When you look at what we have in the western states, in the federal lands and waters, we have more energy locked up but recoverable, proven resources, proven reserves than Russia, than Saudi Arabia, than Venezuela, than Iraq all combined yet an administration that is not going to allow this country to use that energy. I happen to think that is irresponsible. We have the energy resources and when you take Alaska into account, when you look at the Canadian pipeline and that Keystone pipeline, that oil is going somewhere. It's either going to go west to China or it's going to go south to the United States. There is no doubt in my mind where that energy resource needs to go. So, making America domestically secure from the oil and gas and the other energy resources makes abundantly good sense to me. We send over $300 billion a year to countries that do not have our best interests, frankly in some cases hostile to who America is. What a great day it would be to just say, no thank you, Mr. Chavez, we don't need your oil.
Hudson: Governor, how do you develop those international markets for U.S. coal and natural gas, however, of which there is abundance here in America?
Perry: Say it again, the question of how you ...
Hudson: Develop international customers for U.S. domestic energy.
Perry: Oh, international customers. Listen, the issue, we're selling coal to some of those right now. I'm less interested in selling that outside of the United States than I am using it here first. That is my interest. If there is a ready supply of natural gas, which we obviously have, I think we have at least three terminals on the Texas coast that were for bringing LNG in and now they are being transformed into places where we can export, haven't got a problem in the world, love to be selling some of that North Dakota gas to anybody that wants to buy it. But we need to get America secure first before we start developing an export market. I mean, you can do both at the same time but I'm more focused on the job creation that comes in the energy industry when we allow for that type of production of our resources, domestic sources of energy, we can do it safely, we can do it cleanly and we can do it in a way that will put a lot of Americans to work quickly.
Hudson: And to that point, the energy industry tells us they are seeing a skills deficit when it comes to advanced engineering and advanced technology jobs. They are finding unfulfilled jobs when we have a national unemployment rate at 9%. How would the Perry economic and jobs plan address that job skill deficit?
Perry: Well, obviously one of the things we need to be doing is making sure that our universities, and you've got some great ones up here in Iowa, are really focused on how do we deliver these types of skills sets as cheaply and as quickly as we can. I've got some great concerns and I'm not going to speak about Iowa, I'm going to speak about Texas. I think it is costing way too much money for a young person to go through four years of college. We have allowed way too much cost to creep into the cost of tuition. I laid out an idea this last year that we ought to be able to deliver a degree that costs $10,000 total. Now, there are a whole lot of people whose jaws hit the ground and most of them are working on college campuses. But the fact is we ought to be really bringing it home that we're charging way too much money for the education that we're giving our kids and get focused in on these technology sides of the type of education they need but also using technology. The idea that we're having to force these kids to come to brick and mortar to be educated, that is the old way of thinking. W need to be looking at online ways to be able to educate these kids, to get the types of skills that we need and allow for the particularly in the technology side. That's where Texas growth has really occurred in the last decade. As a matter of fact, 2.3% I think of the workforce is in the oil and gas industry in the state of Texas. Our huge growth was in technology and particularly in biomedical with Houston, Texas, Texas Medical Center, with UT Southwestern. So, we have really transitioned our state from oil and gas/agriculture state to a highly diversified technology driven economy and it is one of the reasons that we have created so many jobs.
Branstad: One of the biggest impediments for jobs is the federal tax burden, the federal corporate income tax second highest in the world and we have a penalty for bringing profits back from overseas. There's a trillion dollars that could be invested in this country. Would you support reducing the federal corporate income tax and eliminating the penalty for bringing profits back from overseas?
Perry: That is what you ought to be paying your personal income tax on, 20% flat, about four different deductions, do the quick math, send it in, that is the personal side. He asked about corporate. Corporate ought to be 20% too, corporate flat 20% weight, get rid of all of the loopholes and all of the, you know, Washington corporate lobbyists are going to hate me as the President of the United States. I'm going to take a wrecking ball to that corporate tax code and frankly the personal tax code as well. We've got $1.7, $1.6 trillion offshore. I would put a five and a quarter percent rate on that money for one year to allow it to be brought back in, to be able to create jobs. The American Chamber of Commerce estimates $360 billion worth of economic activity. Let's quit penalizing Americans for making money, quit fighting this fight that we're fighting on divisions of between those that have money and those that don't. I want everybody to have more money and my tax plans do that and that is what the American president needs to be doing. Quit having these divisions of class warfare.
Hudson: Governor, we have to leave it there. We appreciate your comments. Thank you so much for your time today. Governor Rick Perry of Texas.
Perry: Thank you. (applause)