1 McCarthy: I think that s the best introduction I ve ever had. It's an honor to be with you. I'm glad to have high school students here because when I was in high school, no teacher ever thought I could be here, so don t worry about it. It's true; I'm born and raised in Bakersfield. I'm proud of that. My district, I represent LA County as well. I have Lancaster in it, so I feel akin. And it's true I didn t start out to be in politics. I'm not poly sci, no disrespect, I'm not an attorney, but there are a lot of other bad traits in my life. And it's true I got into politics in a different manner that Beth told you about. My family my father was a firefighter. And he had a second job; he moved furniture on his days off. We didn t come from great wealth, but we didn t know it. We cashed the paychecks at the grocery store. And when I got out of high school, I didn t apply myself as well enough as I should, and so I went to junior college. And I always had a summer job. And L.A. has been a part of that. When I was working and going to junior college, I met a guy in town that owned a liquor store, but had a car dealer s license. You can figure out how an 18-year-old meets a person like that. But I talked him into taking me to the LA car auctions down here, where all the dealers bring their cars to trade in, but you have to be a dealer to get in. So I would come and I would buy cars, and I would flip them to pay my way through college. Now I did not know it's illegal, but I was being an entrepreneur. So that s what I was doing. And then like anybody else going to junior college, Friday night gonna go visit some people at San Diego State. So I go to the grocery store to cash a check. We didn t have ATMs back then; I think this was 84. But when I cashed a check, they had just started the lottery the day before. So I bought two tickets and I won the lottery. True story. $5,000 was the most money you could win. But if you put yourself back in 1984, you're 18 years old, you just won $5,000 and you're 10 minutes away from Tijuana, where would you end up? In Congress, no. Just joking. I took my family out to dinner. I could still tell you what they ordered because I paid for it. I gave my brother and sister each $100. I took the majority of the rest and I bought one stock. I'm a person who believes in taking a risk. It was the 80s and I did pretty well.
2 So at the end of the semester I decided I wasn t gonna go back to school. I took my money out of the market, refinanced my current car. I had about $15,000 to $20,000 then. And I went out to buy a franchise. But no one really sells a 19-year-old a franchise. So I didn t stop with that and I created my own deli. It was Subway before Subway. I even built the counter in my dad s garage. And I learned three valuable lessons that have never left me. When you're a small business owner, you're the first one to work, the last one to leave, and you're the last one to be paid. And I think everybody in the country should know those values because it's what spurs this economy. Well, I was pretty successful. At the end of two years, I had enough money that I could pay my way through college without working. So I sold my business. And the local Congressmen, he had an article: be a summer intern in Washington D.C. I didn t know him, but I thought he d be lucky to have me. So I applied and he did turn me down. But I now sit in the seat he wouldn t give me an internship for. So if you're ever interested in internships, I give more people internships than ever imagined. The only idea is you can't run against me; that s the only thing I ask. That s how I got involved. What I want to talk to you about today, it is true - I'm the first majority leader ever in the history of California. And I take great pride in that knowing what our state is. Now I never want to give you a false impression, I'm a conservative who believes you can solve problems. I'm not gonna be a conservative who just says no to a problem. I want to take my philosophy, because I believe my philosophy is stronger, that I can solve a problem and make it better. I also don t believe that I have to have 100 percent of what I want to get the answer done. So I take that philosophy and try to apply it inside Washington knowing how it's developed. Now looking what has just gone through in the short time I've been there, this country has made major shifts and pendulum swings. I went in 06, when Democrats had a very big sweep. In 08, they continued the sweep. And now I just watched a sweep back the other way. And you can't disregard what the country has said. And it's not just what's happened in the Senate becoming a
3 majority, or the House the House has the largest Republican majority since 1928. But you also have the state legislatures. Since our president s been in office, 913 seats have shifted to Republican. That s a philosophical base that has changed. Now what we have to do is take where we are today from both sides and try to move forward. Because the message I take from a lot of these elections are they're upset with the current status quo; they want to see something happen. They want to see something grow. My philosophy overall is I want to grow America s economy, not Washington. I'm not in a top down philosophy. I take what's made California great, I look at Silicon Valley, that s bottom up. The old philosophy of top down has failed. And that means more people have input, more people have skin in the game, and more ideas are able to foster to be able to grow. I think that s how America is actually developed. So in laying out the agenda, I put it in three categories: freedom, opportunity, and accountability. That reaches everybody in America, and it's not one sided or the other. Everybody strives for the idea of greater freedom. We all want more opportunity. And we all want our government to be held accountable. Everybody can stand for that and work together. When I looked at the makeup of Washington, the House, the Senate s Republican, and the president happens to be of another party. That s not a problem to me. I watched historically in America, we achieve some of our biggest accomplishments in divided government. Why? Because government was devised to find common ground, and when you're divided, you know you're not going to get 100 percent of what you want, you're gonna have to give a little one way or another. Today is Ronald Regan s 104 th birthday. A lot of us crave for him back. But the one thing that Reagan was able to do with Tip O Neil, social security, tax reform, and be able to make America much stronger. Bill Clinton, he had Newt Gingrich and Bob Dole, welfare reform and balanced the budget. So we have a unique opportunity at the same time. So where are the areas I want to talk today about, what we can agree upon. If there's an area I don t believe we are really gonna agree upon, we're all one side or the other. You know, philosophical where
4 someone s gonna be. And we can have another election to define where that it is. But the election is over, so where can we grow, and where can we find common ground? There are a lot of places that I think will actually affect California. Some of the first actions, I think, and the way I looked at, I took bills that had already passed the House. I don't know if you listened in the campaign, there were 382 bills that passed the House that the Senate never took up. Do you know 276 of those bills were so bipartisan that they're veto proof? So that s a perfect area to start with within the first 100 days. Because then you find common ground that you get something to the president s desk, you get it signed, you show you can work together and move forward. And the Senate has changed. In this small amount of time of this one month that we've been in office, they ve had more amendments on the floor, than they had in like the last three years in the Senate. That s a difference. So that means both sides are getting some messages out, are actually having a debate. The Keystone Pipeline - we will move that next week. It came out of the Senate at 63 percent, and the Senate supported it. Now it's gonna go to the president s desk. I know he s threatened to veto, but this is a perfect place to show common ground, to move forward. Human trafficking, it affects every single district in America. And every person in this room would stand up to stop human trafficking, and it continues to grow. And it fosters on the most vulnerable in our society. You know, we already passed 12 bills, and they weren t all Republicans. When I studied human trafficking, do you know where I came? I was in my own district, but I came to L.A. Do you know who I went with? Karen Bass and I did it together through the FBI. Through the organizations right down here in L.A. Because what happens, if it happens in L.A, it will foster in every other city. A perfect example of finding places we're together. Cyber security, how many days do you wake up and hear of another company being hacked? Anthem just was hacked. This doesn t have to be a partisan issue, but it's an issue that we should dwell with together and solve. Transportation, every day you talk about it, do you not? When you're in your cars?
5 I look at America to be able to have greater opportunity. We're competing with other countries that have newer infrastructure than America. We're living off yesterday, instead of building for tomorrow. I get frustrated with our country overall because I feel government has developed this philosophy to eliminate risk, so you have no growth. I want to show you an example. I'll take the FDA. Last September we approved a new 3D imaging to help detect breast cancer. And we all celebrated. But do you realize that 3D imaging had already been approved throughout Europe and other countries for years? So how many times did we waste because we wanted just to make sure nothing would happen to anyone? It's a warm sunny day, right? I was talking to Chairman Upton. He s in Kalamazoo and had three foot of snow. I said I might get a little suntan even while I'm out today, right? He said, watch out, you know, wear your sunscreen. That s true. We've got a lot of skin cancer, but when was the last time a new ingredient was added to sunscreen? Fifteen years. But do we all know that eight new ingredients had been waiting the FDA for the last 10 years? Why? And what happens in that situation? Well, money will flow somewhere else. You look at venture capital, 42 percent of their money now flows outside of the country when it comes to medical because it takes too long to have something achieved here. So we're losing opportunity, we're losing freedom in the process. So what will we do in this Congress? 21 st century cures, a revamping of the FDA. How much will that inspire to have greater opportunity, but grow as well? I watched the president talk a little bit about that in his State of the Union. I find that s a place we're gonna come together. By dealing with infrastructure, we have a system that is blogged two ways: one is financially. We all pay the tax when we fill up our car. But we use it for a lot of different other reasons. And then we put up all these road blocks, to ever until you build a road. I always like to say: you know, the Golden Gate Bridge was built in three years, and we've wasted the last three decades trying to add an onramp to it. That s wrong. So why can't we find another method to fund it, and at the same time find the capability to enhance our options to build? There is a great desire for that. But to me it gives us two opportunities, because the best way out in
6 Washington right now to find the extra resources when it's coming due in a few months, is repatriation. What is repatriation? Repatriation is a tax system that America has developed that punishes you when you make money around the world, if you bring it back, we want to tax you too high, so what do you do? You keep the money in another country, and you use that money to buy something and invest in another country, instead of giving you the incentive to bring it back home and invest in America. So if we lowered the rate, you would bring it back. If we brought it back, we use that tax incentive to make the investment into America. So the idea of having infrastructure driven, also gives us the opportunity to have tax reform. Paul Ryan just became the Chairman of Ways & Means. He makes it a little stronger to get tax reform. This is the desire of what he s done his whole life. But who in here can do their own taxes? So if we start with an idea we're gonna simplify it, I think there's support on both sides of the aisle. We're gonna be competitive because our current tax code finds that we're at a disadvantage worldwide, and we know we're in a global economy. A lot of people understand tax reform is hard; anything we do is hard in Washington. Everybody wants to be opposed to it. But you know what? You shouldn t run for the office if you think it's going to be easy. I think you will find we will use the driving with infrastructure, which the president wants to do as well - the idea that they want to go after repatriation to reform the overall tax code. Because what happens when you reform the tax code? We get more opportunity and more freedom. It will unshackle what holds us back. Now the president is where we ll differ. He only wants to do corporate tax rate. You cannot ignore the S Corps and the others. You need overall tax reform to compete. I'm a firm believer and I don't know if anybody owns any McDonald s but growing up during the Olympics I would always go to McDonald s and get the little scratch off. And then if the American won the 100 yard dash, you got free French fries. Did you ever do that? And that s what I love about the Olympics, it didn t matter who the person was, if they were American, we all competed. But the best part about the Olympics was everybody started on the same starting line, and everybody finished on the
7 same line, right? But you ever look at America today? You know, I was in high school in Napa. And I was talking about the competiveness of America in a world economy. And one of the kids raised his hands and he said, I don t understand how we have fallen so behind on the competition? You know, from it's easier to go somewhere, Europe to get an approval, or Singapore is coming after our biotech firms. Or, Carl s Junior can build one faster on Lenin Way in Moscow than they can build one in America. Why are we falling behind? This is what the student asked. So I asked the student, I said, Do you play any sports? He said, I'm a swimmer. I said, Well, let me try to give you an analogy based upon a swim meet. I said picture America going to the block, and we're competing with every other country in the world, and it's right after World War II. The gun goes off, we jump into the pool. Not only do we win, we get out of the pool and dry off before second and third arrives. So we say as Americans it's probably unfair. Everybody else got pretty decimated, we came out pretty strong. We should probably put a five pound weight on next year. So we add a little tax code to ourselves. So we jump in the water and we swim. We win again and we said, you know that s probably unfair. We should make the regulations for us a little tougher. Yeah, we know the other countries don t have to compete with the regulations, but we ll make our products cost more, so we add another 10 pounds. As the years progress we're adding 10, 20, and then we get a stimulus and we add another 50 pounds, to pretty soon we have a 300 pound weight on and sometimes we don t win. No one says take the weight belt off, they just say you don t swim like you used to. So the goal is remove the weight belt, let us compete on the same starting line and let s see what America can do competitively. That s the model of what I'm looking at. So I look at 100 days, I look at a year, those things that must happen. My philosophy is to have no more cliffs in Washington. Too many times you turn on TV and there's some clock ticking, right? Washington is about to blow up in the next 17 hours. Will it all shut down again? When you have those you can't focus on the big policy, so those must pass. We have different items, SGR or a highway bill.
8 Finish those early and move forward to policy; that will make us stronger. Then I lay out an agenda for two and four years. It doesn t mean you can achieve everything in two years, but we shouldn t measure everything in a congressional term. Just make sure you achieve it. But it doesn t mean you don t start with it, to be able to reform to move forward. Now there's another item that s out there, that doesn t come really in a bill itself, it comes in the world in which we live. And the world in which we live today is dangerous. And I have a very strong disagreement with the president on the foreign policy of America. If you asked me as a political commentator to talk about why did we have such a shift? How could you capture the Senate in that year? And what did it mean for that election? I'll tell you it wasn t about Republican or Democrat. It was about how people felt as an American. And when in time and place in my life, is there anything similar to last November? I would say would be similar to 1979. And this is why I say it. Think about going into the last November. And you watched your government, right? You watched what happened with the Veteran s Administration. You watched Ebola having some challenges. You watched an IRS system attack individuals. Then you watched people jumping over the White House and finding out, you didn t even lock the door? You almost felt government had become incompetent and not being able to achieve anything. To deal with Ebola, who did they bring in, the military, because we didn t trust anybody else. Then this is where I say it's very similar to 79. When was the last time as a country we watched Americans being held hostage and felt very vulnerable with it? You saw ISIS. When was the last time a US Ambassador was killed on foreign soil? 1979 in Afghanistan. And then you had Stevens in Libya. That s a direct philosophy, or relationship, to the respect other countries have for us around the world. And when was one of the last times we watched the Soviet Union invade another country? They invaded Afghanistan. And the response from Jimmy Carter at the time was not to go to the Olympics. Then you watched Russia invade the Ukraine, and look what's happening today. Then, when was the last time you heard the word malaise? You had the speech from Jimmy Carter, but even The New York Times had an editorial, The Malaise of our
9 Economy. Unemployment is at a low number, right? But there's two ways to lower unemployment: people go to work, or they give up. Do you know our participation rate in America is at 62.7 percent? That s the lowest it's been since 1978 because people have given up. Now if you give up, knowing a country that every generation has improved on the generation before it, you're saying that my future, I've given up on. I've given up on my hopes. I've given up on my dreams. That s the worst place we want to be. So you had all that play into it, and I think America as a whole said they didn t say: oh, I want to give all this power to Republicans. I just don t feel right as an American, I want to see a change. And the most important thing that Washington can do? It has the wisdom to listen, but the courage to lead. And that s what I believe I'm going to push to make happen. And it won't be pretty. You know, you get attacked in a lot of different ways. And you're going to have to make an element unsafe, but that s what we will do. So when I go back, I will go down to the White House I think it's next Tuesday with a group of individuals, and we will sit down with the president and the chief of staff. And we ll be talking about what is AUMF: Authorization for Military Force. The president has asked about what's going on in the world. The world is very unsafe. I was just in the Middle East two months ago: Abu Dhabi, Doha, Saudi Arabia, Baghdad, Erbil, and down to Jordan, and back home. I will tell you this, our friends do not trust us, and our enemies do not fear us. And for everything that s happening in the world from Yemen to Iraq, the most dangerous thing we have before us today are the P5+1 negotiations with Iran. If Iran is allowed to develop a nuclear weapon, the world will never be safe. And if we take our eye off that, it's your generation I fear the most for. Remember the president said Yemen is a great example of our foreign policy. I don't know if any of you read the headlines today? First they had the coup last week, now the Iranians back have taken it over. Don t know if you know geography well? Yemen is on the border of Saudi Arabia. You ve watched what has just taken place to the Jordanian. This is a battle that s much larger. And I thought Tom Cotton made a very good point. We got attacked because of our
10 way of life. They will continue to attack us. But there are a lot of people in the world that will stand up. And if we're silent, there's one reason why America should lead, because if we don t, who will? And when we don t lead, the world becomes unsafe. How we handle where we go forward, I think will also determine the growth of the world as well. So we have to get our economic house in order, that brings us greater opportunity, tax reform, infrastructure, cyber security. We have to get the world a safer place, and that means we have to lead. And we have to stand up for what we've promised. And then, from a Washington s point of view, both sides of the aisle have to understand they're not gonna get 100 percent of what they want, because if that s what they believe, nothing will get done. Look, I'm a total optimist. I grew up in Bakersfield, California and I'm the Majority Leader of the House, none of you thought that could happen either, right? Winston Churchill was an American to his mother. And he always said you could count on Americans to do what's right, after they exhausted every other option. I love Winston Churchill. But you know what quote I gave to our conference of Winston Churchill? During the challenge of the battle for World War II, the challenge of his elections, Winston Churchill said, I'm not concerned about what history will write, because it's my intention to write the history. That s the belief we should have of what the future holds for us. We should not be fearful of what history will write about our future. We should have the intent on writing it for ourselves. Thank you very much.