Washington, D.C. – House Majority Leader Kevin McCarthy (CA-23) spoke on the House floor today on two Innovation Initiative bills from Representatives Will Hurd (TX-23) and Erik Paulsen (MN-03) that will modernize government IT systems and help workers own a stake in their companies.
Excerpts from the remarks are below, or watch online here.
“The House is considering two important pieces of the Innovation Initiative—the value, the value of creating jobs. The first is by Representative Will Hurd to improve government IT systems. The second is by Representative Erik Paulsen to help startups attract and retain the best employees they can. These bills go right to the heart of the Innovation Initiative’s two goals: to bring innovation into government, and enable innovation in the private sector.
“Now, I’m not breaking any new news here, but too many of our technology systems in government are increasingly outdated. So here are the facts. Last year alone the federal government spent 80%—now get this right—80% of $80 billion directed to IT just maintaining old legacy systems. Eighty percent of $80 billion.
“Representative Will Hurd’s bipartisan legislation will help bring the government’s technology system into the modern age, allowing the government to do its job more effectively, save taxpayer’s money, and keep public information secure.
“However, even as we use innovation to improve the way government functions, we can’t ignore the importance of innovation in the private sector.
“You see, the innovation economy is a fundamental part of the American success story. Today, we have these businesses, we call them gazelles. Gazelles are a small startup that grows 20% every year or doubles every two. Gazelles make up 4% of all new startups. But you know what? They make up 70% of all new jobs. And we have not reached America’s full potential. Not even close. We need to update our laws to enable further innovation so that those with good ideas can create even more opportunity for America.
“The idea of innovation producing growth is why we’re voting today on Representative Erik Paulsen’s Empowering Employees Through Stock Ownership Act. The truth is, when the startups are funded and founded, they can’t offer potential employees the same salaries and benefits as those companies that have already become household names. But they can offer partial ownership—the American Dream. Offering stock options not only allows startups to attract the workers they need, it also gives employees a greater stake in the success of the company.
“But unfortunately, the current tax code punishes many employees who own stock, taxing them before they even have the opportunity to sell the stock to pay the bill. Representative Paulsen’s bill allows workers to actually own a piece of the company that they work for. It defers the taxes they owe on their stocks for a time so they have the opportunity to work for a young company that may not have the most resources but does have a vision of the future that they can believe in. And by giving companies the chance to hire and retain the best employees, you know what happens, we’ll have more innovation, we’ll have more growth, and we’ll have more success for the American people.
“You know, as you grow in America and get older and you have children, you no longer worry about what you will do, you worry about what opportunities your children will have. Don’t you dream one day that maybe your children can even own a piece of their company But don’t you hate to wake up and have government punish you so you can’t be that owner? Why wouldn’t you want government to work for you? Why wouldn’t you want government to enhance? Why wouldn’t you want innovation?”