House Majority Leader Eric Cantor told a group of Richmond-area Realtors that entrepreneurs and start-up businesses will be the engine of the country’s economic revival.
Cantor met with local realtors and industry experts on Thursday at the University of Richmond as part of a housing forum hosted by the Richmond Association of REALTORS.
“Growth is about entrepreneurs starting business that rent office spaces in office parks, that rent retail spaces in shopping centers and take warehouse space in industrial buildings,” Cantor said. “It’s about new business start-ups that provide the jobs for people that want to buy homes.”
Cantor, who was a real estate lawyer and developer, said that the real estate industry has been one of the industries most affected by the weak economy, and that new regulations from the Obama administration have slowed a recovery.
“Washington has created an era of regulatory assault that is killing off growth job creation and economic prosperity,” he said.
Cantor said that “gazelles,” three-to-five-year old small businesses that account for 10 percent of jobs despite making up only 1 percent of all companies, will be a major part of the economic revival.
“(Gazelles) create on average 88 jobs per year, compared to the two to three jobs on average of other companies,” he said. “But there simply aren’t enough start-ups yet to fuel a full rebound.”
Regulations are extreme sedatives to growth, rather than stimulants, he said.
“That is why we are taking up legislation in the House to lessen the regulatory burden on everything from the Internet to airlines to energy production to the real estate to farming,” Cantor said. “Smart regulations are fine, as long as they help steer businesses into the black rather than into a tangle of red tape.”
Cantor and his team in the house plan to lessen government regulations through a program called “Cut and Grow.” He said that government is currently borrowing 40 cents of every dollar it spends, which he called unsustainable.
“The fiscal situation is out of hand,” he said. “All of you are tightening your belts. Washington has got to start doing the same.”
Echoing a speech he gave at Stanford University on Monday, Cantor called for the lowering of the corporate tax rate from 35 percent to 25 percent. He also said that he wants U.S.-based multinational companies to be allowed to bring back at a reduced rate the estimated $1.2 trillion in overseas profits that companies placed there to avoid high U.S. taxes. If companies can bring that money home, he said, it could help fuel growth and job creation in the U.S. and in Virginia.
“Small businesses especially need access for capital to grow,” Cantor said. “We will work hard to bring to the house floor measures that provide incentives measures for regulators to return to some prudence in the way they approach entrepreneurial risk. Because if we can do that, then banks can start lending again.”
Sweet 16 side note:
Cantor opened his speech by saying it was “great to be in Spider country.” In his bracket, he picked the University Richmond to make the Sweet 16. He did not pick VCU to make it so far. He said he hoped for a match-up between the Rams and the Spiders in the next round.