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Oct 22 2014

Hatch Unveils Innovation Agenda for the 114th Congress

Chairman of Senate Republican High-Tech Task Force Calls for Pro-Technology, Pro-Innovation Policies

Sen. Orrin Hatch, R-Utah, unveiled an innovation agenda for the 114th Congress today in a speech at Overstock.com’s corporate headquarters. Sen. Hatch, who serves as Chairman of the Senate Republican High-Tech Task Force, laid out a plan to ensure that the United States continues to foster an environment that encourages research and innovation by addressing abusive patent litigation, protecting trade secrets, modernizing the Electronic Communications Privacy Act, strengthening cybersecurity, reforming immigration policy for high-skilled workers, reducing regulatory and tax burdens for innovators, and removing barriers to digital trade.

As Republicans seek to end Senate gridlock and advance policies that promote economic growth and make America more prosperous, Sen. Hatch’s innovation agenda is a critical priority for the next Congress.

Key excerpts:

Our constitutional values teach that the federal government has an important role to play in fostering entrepreneurship and economic growth. But it should not be one of heavy-handed regulator.  Rather, government’s proper role is to act as a facilitator, creating an environment that encourages research and development to drive our prosperity and quality of life in the decades to come. As chairman of the Senate Republican High-Tech Task Force, I have been working with colleagues and stakeholders to develop an innovation agenda for the coming Congress. 

On Addressing Patent Trolls:

In particular, we must enact legislation to combat abusive patent litigation.  ...Through common-sense reforms to our patent laws – including fee shifting, heightened pleading and discovery standards, and a mechanism to enable recovery of fees against shell companies – we can ensure that American resources are used to innovate and create jobs, not wasted to settle or litigate frivolous claims.

On Protecting Trade Secrets:

Another way to protect America’s innovation is to create a harmonized, uniform federal standard for protecting trade secrets.

Trade secrets, such as customer lists, formulas, and manufacturing processes, are an essential form of intellectual property... It’s time to enact trade secret legislation that enables U.S. companies to protect their trade secrets in federal court.

On Balancing Privacy and Responsible Data Storage: 

We are long overdue to update the Electronic Communications Privacy Act – or ECPA – to require a warrant for all e-mail content within the United States and to safeguard data stored abroad from improper government access. ... Congress must ensure that law enforcement has the tools to execute search warrants where necessary, so long as officials comply with the laws of the foreign country where the electronic data is stored. ... Overregulation, however, is not the answer. Any new data policies must balance consumer privacy and the benefits of big data in people’s lives.

On Enhancing America’s Competitive Workforce:

Central to innovation is enhancing America’s competitive workforce. We can do this by streamlining the hiring process for high-skilled individuals entering the United States … [and] investing in STEM education and training.

Heading into the 114th Congress, Democrats must drop their insistence on immediate comprehensive reform, particularly when individual elements—like high-skilled immigration—can win broad support and help pave the way for additional and more far-reaching reforms in the future.

The full remarks are pasted below.

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Senator Orrin G. Hatch

An Innovation Agenda for the 114th Congress

Remarks as prepared for delivery

Overstock.com Corporate Office – Salt Lake City, Utah

Tuesday, October 21, 2014

It’s great to be with you this afternoon. Thank you for taking time from your busy schedules to be here.  

As I travel around the state and throughout the country, I am often asked why Congress doesn’t do more to enact pro-technology, pro-innovation policies. After all, in most of our communities, high-tech job growth is consistently faster than other areas of the private sector. 

Here in Utah, we have nearly 100,000 people working in the tech industry—a sector that is growing at five times the rate of the national economy.  Throughout the nation, demand for high-tech jobs is expected to surpass demand for jobs in other sectors until at least 2020.  So every state in the country has a vested interest in keeping our technology industry at the forefront of the global economy. 

America has made extraordinary strides in innovation.  For decades, we have been the world’s leader in developing new technologies and advancing the Internet age.  But we are not the only nation in the hunt.  Across the globe, and particularly in China and other parts of Asia, our international competitors are working furiously to catch up.  If the United States is to enjoy continued success in the technology arena, policymakers must ensure a legal and regulatory landscape that will enable our innovators to thrive.

As we seek to encourage innovation, however, we must also recognize limits on what government can and should do.  Our constitutional values teach that the federal government has an important role to play in fostering entrepreneurship and economic growth.  But it should not be one of heavy-handed regulator.  Rather, government’s proper role is to act as a facilitator, creating an environment that encourages research and development to drive our prosperity and quality of life in the decades to come.

As chairman of the Senate Republican High-Tech Task Force, I have been working with colleagues and stakeholders to develop an innovation agenda for the coming Congress.  Recently, I gave a high-level overview of this agenda during a policy speech at the Reagan Ranch in California.  Today I would like to speak in greater detail about some of the initiatives that I believe are critical to ensuring the continued success of our high-tech economy. 

I.  Protect America’s Innovation and Inventiveness 

First, Congress must act to protect America’s innovation and inventiveness.  An essential part of fostering innovation is protecting legitimate intellectual property rights.

Patent Litigation Reform

In particular, we must enact legislation to combat abusive patent litigation.  As you well know, patent trolls are having a crippling effect on innovation and growth across all sectors of our economy—ranging from main street businesses to America’s largest technology companies. A recent study found that abusive patent litigation costs our economy $60 billion each year. 

Through abusive and meritless litigation, patent trolls—which are often shell companies that do not make or sell anything—seek to extort settlements from innovators throughout the country.  These settlements divert capital that could otherwise be used for innovative research or technological development. 

Many patent trolls target small businesses that do not have the resources to defend themselves in court.  Even though these small businesses have done nothing wrong, they often agree to unwarranted settlements to avoid costly litigation. And those who do fight back are forced to spend millions in litigation costs, often with no chance of enforcing a court-ordered award against a judgment-proof plaintiff.

Through common-sense reforms to our patent laws—including fee shifting, heightened pleading and discovery standards, and a mechanism to enable recovery of fees against shell companies—we can ensure that American resources are used to innovate and create jobs, not wasted to settle or litigate frivolous claims.

I intend to do everything in my power next Congress to pass such legislation.

Protecting Trade Secrets

Another way to protect America’s innovation is to create a harmonized, uniform federal standard for protecting trade secrets. 

Trade secrets, such as customer lists, formulas, and manufacturing processes, are an essential form of intellectual property. Yet, trade secrets are the only form of U.S. intellectual property where misuse does not provide its owner with a federal private right of action. Currently, trade secret owners must rely on state courts or federal prosecutors to protect their rights. 

The multistate procedural and jurisdictional issues that arise in such cases are costly and complicated, and the Department of Justice lacks the resources to prosecute many such cases. These systemic issues put companies at a great disadvantage, since the victims of trade secret theft need to recover information quickly before it crosses state lines or leaves the country.

Unfortunately, in today’s global information age, there are endless examples of how easy—and rewarding—it can be to steal trade secrets. In June 2013, the Wall Street Journal reported that authorities arrested a former engineer for a medical-device maker after he attempted to relocate to India with trade secrets he stole from his former employer.  As a staff engineer, the employee had substantial access to the company’s trade secrets, including a self-administered disposable pen injector still in development. Weeks before quitting, the employee downloaded an estimated 8,000 files, including many related to the pen in development, onto external hard drives and thumb drives. The sheer amount of stolen intellectual property was enormous.  

While the maximum penalty for trade secrets theft is 10 years in prison and a $250,000 fine, few of these thefts actually result in federal prosecutions. And while $250,000 may sound like a steep penalty, most stolen trade secrets amount to tens or even hundreds of millions of dollars in lost profits and sales. Even when thefts are prosecuted, victim companies rarely recover the full extent of their loss. 

According to the FBI, when Greg Chung stole Boeing trade secrets related to the U.S. Space Shuttle and gave them to China, he gave away an estimated $2 billion in trade secrets.  Even though Mr. Chung was sentenced to more than 15 years in prison, Boeing received no compensation for its staggering loss of technology. 

It is past time to enact trade secret legislation that enables U.S. companies to protect their trade secrets in federal court. 

Combating Online Piracy

A final priority for protecting America’s innovation and inventiveness is developing policies to foster a voluntary and self-regulatory framework to combat online piracy. For too long we have seen digital thieves steal vast amounts of content on the Internet. A 2014 Business Software Alliance survey confirmed that globally a full 43 percent of PC software was installed without proper licensing. The survey found that the commercial value of these unlicensed installations was $62.7 billion, with emerging economies continuing to account for the majority. 

Now is the time for Congress and industry stakeholders to come together with a renewed focus to combat online piracy.

II.  Ensure Responsible Data Stewardship 

The second element of an innovation agenda must involve ensuring responsible data stewardship.  With new forms of electronic communication and data storage, policymakers must act so that our nation’s privacy laws correspond to present realities and keep up with technological advances.

Most immediately, we are long overdue to update the Electronic Communications Privacy Act—or ECPA—to require a warrant for all e-mail content within the United States and to safeguard data stored abroad from improper government access. 

Enacted in 1986, ECPA prohibits communications service providers from intercepting or disclosing e-mail, telephone conservations, or data stored electronically, unless such disclosure is authorized. Virtually everyone agrees that Americans should enjoy the same privacy protections in their online communications that they do in their offline communications. But Congress has not adequately updated the law since its enactment and technological developments have resulted in disparate treatment.

As currently written, ECPA requires law enforcement to obtain a warrant for e-mails that are less than six months old, but only a subpoena to access older electronic communications.  Think about your own e-mail account. You might have hundreds of e-mails that you’ve received over many years. 

Additionally, ECPA has allowed law enforcement to access e-mail that has been opened with just a subpoena, even though a search warrant would be required for a printout of the same communication sitting on your desk. These conflicting standards should cause great concern to everyone who values personal privacy. 

To make matters more complicated, ECPA is silent on the privacy standard for accessing data stored abroad. For that reason alone, Congress should amend the law. Storing digital information around the world – a practice that did not exist when ECPA became law – is now routine.  Moreover, the federal government has taken advantage of this statutory silence to apply its own standard, requiring access to data abroad if the company storing it has a presence in the United States. 

This presents unique challenges for a number of industries, which increasingly face a conflict between American law and the law of the countries where the electronic data is stored. Additionally, if the U.S. expects to extend its warrants extraterritorially, we should not be surprised if other countries—including China and Russia—seek to do the same for e-mails of Americans and others stored in this country. Congress must ensure that law enforcement has the tools to execute search warrants where necessary, so long as officials comply with the laws of the foreign country where the electronic data is stored.

In addition to updating ECPA, we must support policies that protect consumer privacy while promoting the benefits of data-driven technologies. 

New technologies to create, analyze, and disseminate vast quantities of data fuel an increasingly important set of social and economic activities in nearly every sector of our economy. These data-driven technologies offer great potential for improving health care, education, financial services, consumer products, and even sports. 

The possibilities of data-driven technologies are endless, and have already provided consumers with more choices. But at the same time our big-data economy presents privacy and transparency challenges that merit everyone’s attention. Some have advocated for new, burdensome regulations. Overregulation, however, is not the answer. Any new data policies must balance consumer privacy and the benefits of big data in people’s lives. 

III.  Protect America’s Critical Infrastructure 

A third element of our innovation agenda must be protecting America’s critical infrastructure.  Computers control nearly everything we use in our daily lives. They control our cars, phones, water supplies, power grids, financial services, retail networks, food production, and in many respects, our military capabilities. Fortunately, our adversaries have not succeeded in physically damaging our nation’s interdependent critical infrastructure. But we remain vulnerable to persistent threats from cyber criminals. 

Let me outline a few guiding principles that should be included in any cybersecurity legislation. 

First, Congress must provide proper incentives, like liability protection, to encourage the private sector to share cyber-threat information with the government. Currently, businesses are reluctant to share information because they fear legal repercussions. But the government and the private sector must work together to fend off cyber-attacks. 

Cybersecurity legislation must also strike the right balance between protecting our nation’s computing infrastructure and protecting individual privacy rights. Thus, information sharing between businesses and the government must be tailored to the recipients’ actual security responsibilities. 

A voluntary, non-regulatory approach is most likely to yield consensus legislation. DHS and other government agencies can provide advice and resources to improve our nation’s cybersecurity posture, but—as in other areas—additional, burdensome regulations are not the answer. 

Finally, and perhaps most importantly, we must build a strong cybersecurity workforce. Enacting cybersecurity legislation will mean little if there are no trained professionals prepared to tackle our nation’s cyber challenges.  We must encourage our young people and attract high-skilled workers from around the world to take up cyber-related disciplines.

IV.  Spur High-Tech Investment Through Tax Reform

A fourth part of any innovation agenda is spurring high-tech investment through tax reform.  

For example, we should incentivize businesses to invest in research and development by making the R&D tax credit permanent.  This tax credit has existed as a temporary provision in the tax code since its inception 33 years ago. In that time, the R&D tax credit has sunset 16 times.  In fact, the credit technically does not exist at this moment because it expired at the end of 2013.  The temporary nature of the R&D tax credit, along with these frequent sunsets, make it a less reliable – and hence less effective – incentive.  Congress should make it permanent.  I’m glad the House passed a bill to do just that.  I’ve introduced legislation in the Senate that would do the same.     

We also need to lower the corporate tax rate.  At 35 percent, our corporate tax rate is the highest in the developed world and is a chokehold on the economy.  That is unacceptable.  I hope we can get the corporate tax rate down to 25 percent, if not lower.

In addition, we need to transition to a territorial tax system.  Right now, American companies are taxed on their worldwide income.  But the trend in the developed world is to tax corporations in their home country only on the profits they make at home. Japan and the UK were just the latest major countries to transition from a worldwide tax system to a territorial system.  If the U.S. transitioned to a territorial tax system, our businesses would be able to compete much more effectively in the global marketplace.

I’m sure all of you have read the news about U.S. corporate inversions, where a U.S. company changes its corporate structure to move its tax domicile offshore and become a foreign company. Such inversions are happening in large measure because of our high corporate tax rate, and our worldwide tax system.  And they demonstrate just how dysfunctional the U.S. tax code has become.

By reforming our tax code, we can boost prosperity and encourage the entrepreneurial spirit that has made this nation great.  

V.  Enhance America’s Competitive Workforce 

A fifth element central to innovation is enhancing America’s competitive workforce. We can do this by streamlining the hiring process for high-skilled individuals entering the United States to work in STEM-related fields. Equally important is investing in STEM education and training. 

Our high-skilled worker shortage has become a crisis.  In April, for the second year in a row, the government reached its current H-1B quota just five days after it began accepting applications.  Employers submitted 172,500 petitions for just 85,000 available visas. American companies were thus unable to hire nearly 90,000 high-skilled workers they need to help grow their domestic businesses, develop innovative technologies, and compete with international competitors.

Despite this growing crisis, Senate Democrats and President Obama have insisted on an all-or-nothing approach to immigration reform.  They demand comprehensive reform that addresses all of our immigration problems in a single bill, or nothing at all.  I am not opposed to a comprehensive approach. In fact, I joined many colleagues on both sides of the aisle last year to support such a bill in the Senate. 

But heading into the 114th Congress, Democrats must drop their insistence on immediate comprehensive reform, particularly when individual elements—like high-skilled immigration—can win broad support and help pave the way for additional and more far-reaching reforms in the future.

VI.  Foster a Modern, Competitive, and Open Internet 

A sixth element of our innovation agenda is fostering a modern, competitive, and open Internet. This requires promoting private-sector innovation and deployment of broadband networks while simultaneously limiting unnecessary and burdensome Internet regulations. Net neutrality is a terrible idea.  The last thing we need is government telling ISPs how to carve up bandwidth.  Keep the Internet free and it will continue to drive our economy forward.

In addition to promoting broadband investment, Congress should support policies that encourage increased deployment and adoption of mobile online services and content, including increased access to licensed and unlicensed spectrum. 

VII.  Eliminate Corrosive Barriers to Trade

To spur innovation we must also seek to eliminate corrosive barriers to trade.  U.S. companies doing business overseas face significant tariff barriers and a proliferation of behind-the-border barriers to trade in goods and services. These obstacles include discriminatory technical regulations and standards that deviate from international norms. 

A more balanced trade environment will require U.S. trading partners to allow cross-border data flows and eliminate data localization mandates and other impediments to digital trade. We must also work with our partners to raise the standard of intellectual property protections across the globe to the level currently found in U.S. law. 

VIII.  Improve Antitrust Review and Standards-setting Processes

A final ingredient in our innovation agenda is improving antitrust review and standards-setting processes. This can be accomplished by promoting responsible enforcement of our nation’s antitrust laws and supporting cost-effective measures to streamline the antitrust review process. We must also ensure that the standards-setting process is functioning effectively and establish policies that enable companies to compete on reasonable and non-discriminatory terms.

Conclusion

These priorities form an ambitious and comprehensive innovation agenda.  Fostering technological development in the ways I have suggested will strengthen our economy while keeping government in its proper constitutional role—as a helpful partner, not an all-present planner.  I welcome your input on how best to implement this strategy going forward.  

U.S. Senator Orrin Hatch (R-Utah), a current member and former Chairman of the Senate Judiciary Committee and Chairman of the Senate Republican High-Tech Task Force, issued the following statement after President Obama nominated Michelle Lee as Under Secretary for Intellectual Property and Director of the U.S. Patent and Trademark Office.

Oct 16 2014

Hatch Views F-35 Joint Strike Fighter Assembly in Texas

Utah Senator Visits Lockheed Martin Facility in Fort Worth to View Progress

U.S. Senator Orrin Hatch (R-Utah) traveled to Fort Worth, Texas, today to view firsthand the construction of the F-35 Joint Strike Fighter jet.

SANTA BARBARA, CALIFORNIA – U.S. Senator Orrin Hatch (R-Utah), the most senior Republican in the Senate, today spoke at the Reagan Ranch Center in Santa Barbara, California, to promote meaningful policy reforms rooted in enduring constitutional principles.  Hatch outlined five key priorities where Republicans must offer solutions: health care, tax reform, regulatory relief, innovation and tech policy, and a social mobility agenda. 

In his remarks, Hatch said “Now is the time for Republicans to tell America how we will right the ship, how we will solve the problems [President] Obama has wrought.  We have an opportunity to present a positive, conservative, reform-oriented agenda that will show the American people that we are the party of solutions, the party that can bring our nation out of its current malaise and restore it to growth and prestige and prosperity.”

“Government’s role is not to provide universal social and economic support, but rather to create opportunities and remove obstacles.  A vigorous, dynamic constitutional conservatism will return government to its proper role—that of supporter, not director,” Hatch added.  “By keeping the Constitution as our guide and working to conserve our founding principles, we can offer a hopeful, reform-oriented agenda that will unite the conservative movement and win the hearts and minds of a broad majority of Americans looking for change.”

A PDF of Hatch’s full remarks can be found here, and they are also pasted below:

Introduction and Overview

I’m honored to be here today.  Ronald Reagan was a great hero of mine.  His influence looms large over both our nation and my own personal political life.  In 1976 I was locked in a tight primary race in my first Senate campaign.  The polls were close, and it was anyone’s race.  A few days before the primary, Governor Reagan endorsed me.  I’m told it was his only pre-primary endorsement ever.  I’ve always been grateful for his support in that race.  In my Senate office, we have a Reagan conference room, which displays the telegram formalizing his endorsement, as well as memorabilia from several of my bills that he signed into law as President.

President Reagan made tremendous contributions to American conservatism.  He implemented a conservative agenda that led to a renewal of American greatness, helped create millions of new jobs, and defeated an evil empire.  He showed that conservatism is a winning philosophy.

President Reagan also recognized the signal importance of the U.S. Constitution.  Time and again he returned to the Constitution as the basis of our government and the source of our guiding principles.  He referred to the Constitution constantly in advancing his conservative agenda—an average of 16 times in each State of the Union speech.  In his First Inaugural address he made the Constitution’s opening words a key focus, emphasizing that government’s role is to serve “We the People,” and not the other way around.  He returned to this theme in his farewell address, in words worth quoting here: “Almost all the world’s constitutions are documents in which governments tell the people what their privileges are.  Our Constitution is a document in which ‘We the People’ tell the government what it is allowed to do.  ‘We the People’ are free.”

My goal today is to explain how a conservatism rooted in the Constitution’s enduring principles—what some call constitutional conservatism—provides a framework for practical solutions to many of our most pressing challenges.  I believe such an approach can serve as a foundation for successful Republican governance in the next Congress and beyond, just as it did under President Reagan.

We’re at a critical point right now.  The flaws in President Obama’s agenda are increasingly clear.  The economy remains sluggish nearly six years into his presidency.  Millions of Americans are still unemployed or underemployed; millions more have given up looking for work altogether.  The President’s signature achievement, Obamacare, has caused premiums to spike and kicked millions of Americans off their health plans.  Our national debt continues to grow.  At home and abroad, our nation appears adrift.  Equally important, it feels adrift.

Now is the time for Republicans to tell America how we will right the ship, how we will solve the problems Obama has wrought.  We have an opportunity to present a positive, conservative, reform-oriented agenda that will show the American people that we are the party of solutions, the party that can bring our nation out of its current malaise and restore it to growth and prestige and prosperity. 

The Current Challenge

Even in the face of such opportunity, this is a time of significant challenge for conservatives.  Many commentators, across the political spectrum, have identified what they describe as a Republican identity crisis.  Republican voters and elected officials, the narrative goes, are angered at the President’s overreach and opposed to his agenda, but have offered few constructive policy proposals of their own.  According to these commentators, today’s Republican party knows what it is against—the Obama agenda—but is unable to articulate what it is for.

A related narrative suggests that there is an ongoing GOP civil war, a political fight, not only between the Tea Party and the Republican establishment, but between competing ideologies.  Between libertarians and social conservatives, populists and elites, hawks and isolationists.  Even among those on the right who are seeking to identify an affirmative policy agenda, there is a sense that today’s GOP lacks a unified governing philosophy.

Our challenge as conservatives, then, is to develop a positive, reform-minded agenda that will both unify our party and present a compelling vision to voters searching for a way out of our current problems.

This is not a new challenge.  Because conservatism includes a diverse set of ideological commitments, the GOP’s successes over the last 50 years have all included a similar effort. 

Beginning in the 1960s, Frank Meyer, who for many years was an editor of National Review, undertook to unite the two often disparate wings of conservatism—traditionalist and libertarian—by showing how each needs the other.

Ronald Reagan was among the most ardent advocates of this view, known as fusionism.  In a 1981 address to the Conservative Political Action Conference, President Reagan lauded Meyer’s effort to “fashion[] a vigorous new synthesis of traditional and libertarian thought—a synthesis that is today recognized by many as modern conservatism.”

The effort to reconcile liberty and tradition was manifest in many of President Reagan’s programs and much of his rhetoric.  He taught that it is not the state, but rather families, churches, neighborhoods, and communities that foster the virtues liberty needs to survive.  For President Reagan, liberty and tradition were not competitors, but complements.  Each needed the other to thrive.  This remains true today.

Our current challenge, however, is not merely to unify.  We must also present a compelling vision.  It is not enough simply to offer a set of policy proposals.  We must root our agenda in principles, and explain to the American people why those principles—and the policies that flow from them—offer the best way forward.

Constitutional Conservatism

The fundamental insight of conservatism lies in the root of the word: conserve.  To be a conservative means to appreciate that our established institutions and inherited traditions reflect the accumulated wisdom of those who have come before. 

American conservatism thus contains an important protective element.  It involves a commitment to conserve the principles and institutions that have made our nation so great and so free.  As conservatives, we recognize that the Constitution gave us a precious gift—a system of government that is both active and restrained.  That has the necessary authority to meet challenges, but contains within its interior structure checks on that same authority.  That gives families and communities space to thrive, but is attuned to the imperfections of human nature.

Our commitment to the Constitution leads us to resist programs or ideologies that would cast aside our constitutional principles in favor of novel theories or untested designs.  In the 1950s, conservative heroes like Russell Kirk and Whitaker Chambers urged Americans to stand strong against Communism and other collectivist impulses, and to conserve our liberties by restoring traditional faith and morality.  More libertarian-minded thinkers such as Friedrich Hayek and Milton Friedman argued passionately against the New Deal as a misguided reordering of the state and federal spheres, as well as an unconstitutional expansion of federal power.  They urged a return to more limited government, and argued that reducing federal intrusion into the economy would free up space for individual liberty and innovation to flourish.

Subsequent decades brought new challenges.  In the 1970s we faced out-of-control inflation, punitive tax rates, and a Soviet menace.  It took a committed conservative like Ronald Reagan to show America that we could return to greatness by returning to our founding principles of limited government, individual freedom, and strong defense.

Today we face different threats, and fresh attempts to depart from our constitutional principles.  An enormous expansion of the administrative state is now invading core individual liberties.  Already the federal government has assumed authority to force Americans to purchase products they do not want; now it presumes to tell them they must violate deeply held religious beliefs.  It continues to issue regulations that stifle our economy, impede innovation, and diminish individual freedom. 

As conservatives, we must continue to fight all of these attempts to expand government at the expense of our constitutional ideals.  But we must not be defined only by what we are against.  We must offer an alternative, affirmative agenda that can capture the public’s attention and demonstrate that we are the party, not of shutdowns, but solutions.

As we develop this agenda, we must take care always to keep the Constitution as our guide.  By so doing, we remain true to the title conservative: we conserve our founding principles, and apply those principles to today’s challenges.

Restoring Political Constitutionalism

Looking to the Constitution as our guide must be an active process, and one that each of us has an independent obligation to undertake.  In particular, we cannot simply rely on courts to do the job for us.  There is an unfortunate tendency these days to think of the Constitution as the judiciary’s domain, to leave it entirely up to judges to decide whether a law is constitutional. 

This tendency to leave things to the courts diminishes the other branches’ role in the constitutional system and misses the many lessons the Constitution has to teach.  The judiciary’s role in assessing constitutionality is a narrow one.  Judges ask primarily whether a law satisfies some legal rule announced in a previous case.  Is the regulated activity commerce?  Is the punishment for noncompliance a tax or a penalty?

But fidelity to the Constitution is about much more than narrow legal reasoning.  Honoring the Constitution involves looking to the principles that undergird it—values like individual liberty, respect for civil society, and democratic accountability—in determining whether a given course of action is wise. 

Obamacare provides a ready example.  I have said many times that Obamacare is unconstitutional.  Notwithstanding the Supreme Court’s contortions, the individual mandate exceeds Congress’s powers under the Constitution.  It is not a regulation of interstate commerce, and it is not a tax.

But those are not the only reasons the law is unconstitutional.  In addition to flunking formal legal tests, it violates many of the enduring principles made manifest in the Constitution.  It invades liberty by compelling individuals to purchase insurance against their will.  It undermines federalism by coercing state governments to expand Medicaid.  It dilutes the separation of powers by transferring vast legislative authority to the Executive.  And so on. 

Whether or not a law meets whatever legal tests the Supreme Court has set forth does not end the inquiry for those of us who seek the Constitution as our guide.  Instead, we must practice what James Ceaser and others call political constitutionalism: the notion that it “falls mostly to political actors making political decisions to protect and promote constitutional goals.”[1]

Constitutional Conservatism in Practice

The Constitution has many lessons to teach about good lawmaking.  First, through its various checks and balances, it teaches that unrestrained government is a threat to liberty, and that in order to protect citizens from government’s constant tendency to expand its sphere, government must be restrained from both without and within.

Second, by providing that all powers not delegated to the federal government are reserved to the states, the Constitution teaches that states and local communities should be equal partners with the federal government, and that most decisions affecting Americans’ lives should be made at the local level, not by some distant, national bureaucracy. 

Third, the Constitution teaches that good governance consists in deliberation and considered judgment.  By dividing and separating powers among many locus points, the Constitution helps avert sudden lurches in policymaking, even as it enables more modest improvements supported by broad coalitions.  It forces rival officeholders to work together, and is designed to prevent any one person or interest from unilaterally making, changing, or eliminating laws. 

Perhaps most fundamentally, the Constitution teaches the virtue of prudence.  Prudence is a habit of mind that should come naturally to conservatives.  It restrains us from seeking immediate and complete vindication of a single, abstract principle.  Rather, prudence counsels us to work within our existing circumstances to vindicate the enduring principles upon which liberty depends.  Prudent lawmakers make experience, not theory, their guide, and recognize that success requires harmonizing competing values.

The Constitution is an exercise in prudence.  It contains within its structure a clash of many competing principles: the democratic, majoritarian House; the deliberative Senate; the unified and energetic Executive; the independent judiciary.  There is tension between individual rights and majority will, energy and stability, limited powers and flexibility to act.  The Constitution mediates many rival goods.  It is founded on compromise.  And it institutionalizes prudence as a signal virtue of our Republic.

As constitutional conservatives, we must remain true to our ideological principles.  But we must also recognize that we operate in an imperfect world where we do not control all the levers of power.  We cannot simply charge forward hell-bent, blind to present realities.  To do so is the very antithesis of conservatism.  It would also jeopardize our hopes for success, because in the messy world of politics, adopting an all-or-nothing strategy usually produces only the latter result: nothing.

Those who demand immediate, wholesale change miss this important lesson.  Our task as conservatives is to conserve, to retain what works, what is true to our constitutional structure, as we work to correct the excesses of recent decades.

Constitutional Conservatism and the Senate GOP Agenda

So, what is it we seek to conserve?  We seek to preserve cherished liberties that make us a free people and provide each individual with the autonomy to live a life of meaning and dignity.  We seek to safeguard free markets and entrepreneurial opportunities that produce economic growth and enable all to share in greater material prosperity.  And we seek to revitalize a civil society in which strong families, churches, and charities thrive; where neighbors look out for each other; where those with means help those in need; where individuals can reach their highest potential and communities flourish.

            But in order to conserve this vision of American society, we must advance affirmative reforms.  Edmund Burke famously taught that a state without the means of some change is without the means of its conservation.  Conservatives must offer a principled, forward-looking agenda that addresses today’s challenges in a manner that is consistent with enduring constitutional principles and that heeds the Constitution’s many lessons. 

For some programs, such as Obamacare, this means repealing the program root and branch and replacing it with one that is both more effective and more in line with limited government and a free society.  For other programs that have become more embedded in the fabric of American society, advancing reforms consistent with the cause of constitutionalism will involve more incremental improvements. 

Advancing our conservative vision involves limiting and restraining federal overreach that crowds out voluntary institutions and individual initiatives.  But it also requires an energetic government directed at promoting policies that enable individual opportunity and encourage civic engagement.

To work towards a government of this sort, conservatives must set forth a detailed reform agenda.  Some have already begun to do so.  In the coming weeks and months, I hope to contribute to this effort.  For now, I would like to outline five policy areas that I believe should be central to the efforts of a Republican Senate majority.

            Health Care Reform

First is health care reform—real health care reform.  Obamacare offends core constitutional principles on multiple levels.  It restricts liberty by forcing Americans to purchase products they do not want.  It offends federalism by invading a field Congress has no authority to enter.  It undermines limited government by transferring massive power to federal policymakers.  And it undermines democratic accountability by empowering unelected bureaucrats to micromanage virtually every aspect of health care.

As a consequence, we are already seeing Obamacare displace private initiative.  As Jim Capretta notes, “Instead of taking the lead to solve problems and improve care, the major players in the health system—employers, states, providers, and insurers—are now waiting for the latest pronouncements from HHS about what is and is not acceptable under Obamacare.”[2]  This is the very type of situation our Constitution was designed to avoid.  Instead of promoting innovation and community-based solutions, the federal government is crowding out private actors.  It is sapping vitality from our medical profession and quashing opportunities for growth.  It’s also massively increasing our debt, threatening to limit the prosperity and freedom of future generations.

Rather than simply returning to the conditions that predated Obamacare, we need health reform that facilitates access to care and protects the most vulnerable among us, but that also eschews bureaucratic mandates and profligate spending.  We need a market-based solution that government monitors, but does not direct.

Earlier this year, Senators Richard Burr, Tom Coburn, and I offered such a solution.  Our plan, the Patient CARE Act, employs market-oriented solutions to cut costs and includes patient-centered reforms to expand coverage.  It empowers states to provide coverage and reduce costs; enhances purchasing power through targeted tax credits; strengthens consumers’ ability to choose their own health plans; increases transparency regarding plan costs, quality, and outcomes; and eliminates health-care-related distortions in the tax code.

Our plan achieves many of the same goals as Obamacare—such as expanding coverage and protecting access to care for individuals with preexisting conditions—while ensuring that the federal role in health care remains limited, effective, and respectful of individual consumers.  It allows providers to experiment with new types of coverage rather than mandating a one-size-fits-all formula.  It keeps costs down by expanding the health care marketplace and empowering consumers to shop around.  It incentivizes rather than forces healthy individuals to purchase insurance.  And it gives states greater flexibility in how they use Medicaid funds, in keeping with the federal nature of our constitutional system.

Obamacare represents a direct assault on many of our most cherished values: individual liberty, prosperity, limited government, federalism.  Our alternative avoids all of these problems and represents a real solution to critical health care challenges.

Tax Reform

            A second area that demands our attention is tax reform.  Our tax code is far too long and complicated for most Americans to comprehend.  Its administration alone saps hundreds of billions of dollars each year that could instead be saved or invested.  Our current tax system undermines prosperity, discourages entrepreneurship, and gives vast authority to a largely unaccountable IRS.

We must stop treating the tax code as an instrument for social engineering.  Such a strategy is flatly contrary to our constitutional values of liberty and limited government.  Instead, we should make every effort to minimize the disruptive impact of our tax burden on growth and opportunity.

Several basic principles should guide our efforts.  First, reforms should encourage job creation and economic growth by making the tax code more internationally competitive, reducing distortions, eliminating overt obstacles to growth, and lowering both individual and corporate rates.

Reforms should also promote simplicity and fairness.  The income tax base has become excessively riddled with exemptions, exclusions, deductions, and credits.  The amount a person pays in taxes should not depend on the creativity of his or her accountant.

True reform must provide permanence and certainty. Temporary, expiring provisions have, over time, significantly inhibited efforts by individuals and businesses to plan responsibly for their future, and any serious solution should remedy this situation.

Finally, tax reform should boost saving and investment.  Many aspects of the current code discourage these wealth-building activities.  This in turn hinders long-term growth and economic stability.  A tax environment that encourages saving and investment will help ensure an improved standard of living for future generations.

All of these commonsense principles can attract broad support.  By streamlining and rationalizing our tax code, we can boost prosperity and encourage the entrepreneurial spirit that has made this nation great.  Such reforms would also reign in recent IRS excesses and limit the power of unelected bureaucrats to interfere in our lives and pursuits.  By pursuing these reforms, we can make our tax code the province of the people rather than the powerful, while checking government’s continued expansion.

            Regulatory Reform

A third priority is regulatory reform.  The federal bureaucracy continues to grow, further inserting itself into nearly every aspect of American life.  The annual cost of regulatory compliance now approaches $2 trillion, to say nothing of the billions lost through foregone business opportunities.  Under President Obama, the growth of the regulatory state has accelerated at an unprecedented rate.  Approximately 80,000 pages of federal regulations are published each year.  And there are now more than a million individual restrictions in the Code of Federal Regulations.

Congressman Paul Ryan has spoken eloquently and persuasively about overregulation’s pernicious effects, particularly on the poor.  Many federal rules disproportionately burden low-income households, which must “contribute a larger share of their income to pay for cost increases resulting from these regulations.”[3]  Similar economies of scale disproportionately burden small businesses as they struggle to keep up with the reams of red tape rolling out of Washington.

The scope and power of the modern regulatory state is plainly inconsistent with constitutional limits and the type of society those limits were designed to support.  Regulation is now the primary means by which the federal government burdens our economy, encroaches on our liberties, and crowds out civil society—all without meaningful accountability to the people or their elected representatives.  Government is not supposed to be a barrier to prosperity and growth, but an enabler.  It is supposed to help lift up, not hold back.

The current administrative state demands reform.  But our efforts must be prudent—carefully calibrated to deliver relief without sacrificing essential health and safety protections.

            To begin with, we must ensure that all federal agencies follow existing statutes and executive orders, including the requirement to perform meaningful cost-benefit analysis to ensure that new rules do more good than harm. 

Similarly, we must not allow outdated, outmoded regulations simply to pile up.  This principle—endorsed by every President since Jimmy Carter—has seen much lip service over the years but little action.  What we need now is an effective review mechanism to identify outdated regulations still on the books and provide for their revision or repeal.

            We must also ensure that courts are not used to manipulate the regulatory process.  We can do this by limiting standing in citizen suits to those parties actually affected by the challenged regulation.  This will help prevent special-interest groups from using litigation to accomplish what they cannot do through the ballot box. 

Finally, we should consider ways to increase judicial oversight of agency action in order to provide a more robust independent check on new regulation.  Two ways to do this would be to require agencies to satisfy a heightened standard under the Administrative Procedure Act, and to rein in the enormous deference courts currently give agency interpretations of law.

            These reforms offer meaningful ways to reduce unjustified, burdensome, outdated, and duplicative regulations.  They will protect our economy, our liberty, and our right to democratically accountable government, while simultaneously ensuring legitimate standards for health and safety.  They are precisely the sort of prudent, incremental reforms that the Constitution counsels us to seek.

            Innovation Agenda

A fourth area of focus should be implementing an innovation agenda.  Innovation increasingly drives employment and economic growth across the nation and around the globe.  In most communities, high-tech job growth is consistently faster than in other sectors.  In fact, demand for high-tech jobs is expected to surpass demand for jobs generally through at least 2020.

Our constitutional values teach that the federal government has an important role to play in helping to foster entrepreneurship and economic growth.  But that role is not one of heavy-handed regulator.  Rather, government’s proper role is to act as a facilitator, fostering an environment that encourages the research and development that will drive our prosperity and quality of life in the decades to come.

Now is the time to combat abusive patent litigation and to create a harmonized, uniform system for protecting trade secrets.  Bipartisan legislation in these areas is already written and should be a top priority in the next Congress. 

We should also consider ways to create a voluntary framework for combating online piracy and for protecting critical infrastructure through public-private information sharing.   

Equally important is equipping our workforce for the new economy.  We can do this by investing in STEM training, and by revamping our immigration laws to ease the entry process for high-skilled workers.  Many countries, such as Canada, structure their immigration laws to favor such workers, and it is far past time we followed suit.

Keeping the internet open and competitive must also be a priority.  We should encourage continued deployment of broadband networks and mobile services and ease the process of expanding wireless spectrum. 

As a general matter, we must resist the urge to regulate what is working well according to market forces.  Net neutrality is a terrible idea whose time has not, and never should, come.  The last thing we need is government telling ISPs how to carve up bandwidth.  Keep the internet free and it will continue to drive our economy forward.

            Fostering innovation in these ways will strengthen our economy while keeping government in its proper constitutional role—as a helpful partner, not an all-present planner.

            Mobility Agenda

A fifth priority should be developing and refining a mobility agenda.  For 50 years we’ve been fighting a war on poverty.  For 50 years we’ve spent trillions of dollars on massive federal welfare programs that have largely failed.  The poverty rate has remained essentially unchanged since 1967, and increasing numbers of Americans worry—with some cause—that their children won’t have the same opportunities to get ahead that they did.

This is a grave problem.  Our constitutional system is predicated on the idea of a free and prosperous citizenry.  When people remain mired in poverty generation after generation, they may lose faith in the value of hard work, and turn instead to government as the answer to all their problems.  This in turn sets up a conflict between the desire for security and the ideal of limited government.  Citizens who feel abandoned or left behind may—understandably—be more willing to sacrifice some of their rights and liberties if they believe doing so will save them from economic extremity. 

One of government’s legitimate obligations is to create conditions for broadly shared prosperity.  For our constitutional system to thrive, we need citizens who believe both in the government and in themselves.  Simply throwing more money at failed programs does not do this.  Nor does it foster social cooperation.  Quite the opposite. 

I believe government does have an obligation to help struggling citizens, to remove obstacles and create ladders of opportunity to success.  What we need today is a concerted effort at serious reform.  Bright young leaders in our party from Congressman Ryan to Senator Marco Rubio have developed innovative proposals to expand opportunity and reinvent the safety net. 

These proposals highlight the need for adaptability and accountability in our income mobility efforts.  In my home state of Utah, such an approach to HUD monies has helped more low-income families find stable housing while reducing federal handouts. 

Let me offer two additional thoughts on reforms that can help keep the American Dream alive throughout society.

            First, we must reform our antiquated labor laws to make hiring easier and to enable employees to change jobs more easily in the new economy.  We need standards that incorporate part-time work, flextime arrangements for working parents, and alternative methods of compensation.  Individuals should have the freedom to negotiate the terms of their work, and federal rules ought not punish law-abiding employers seeking to create win-win situations for families and productivity.  And it is past time that we reformed our labor laws to ensure that the rights of workers—not labor unions—come first. 

Second, education—the gateway to opportunity in our society.  The seeds of reform—from school choice to teacher accountability—are beginning to take hold in states and localities. We must make the Department of Education a facilitator of such reform, rather than an overlord.  The federal role should be to assist state efforts through cooperative programs and increased flexibility, not top-down directives.  The Department should serve primarily as a clearinghouse for education research and as a means to disseminate best practices to states.  Experience shows that education decisions tailored to local needs are better for children than one-size-fits-all nationwide decrees.

And rather than simply continuing to subsidize the ever-growing cost of higher education, we must incentivize institutions to reduce costs, which they can do by eliminating unnecessary administrative activities or implementing competency-based programs for students who already possess skills and experience in their chosen field.

Summary

All of these proposals aim to improve our nation’s well-being while taking account of the Constitution’s lessons.  They offer incremental reform rather than wholesale revision.  They seek to preserve the proper role of the states rather than impose top-down, conform-or-else mandates.  They recognize the threat of overbroad government power.  And they take account of current political realities.

Proposals and principles like these also offer opportunities to unite the various strands of conservatism by focusing on improving economic well-being and restraining government to its proper role.  Every conservative can support efforts to get government out of health care and reduce related infringements on religious liberty.  We can all get behind efforts to reduce taxes and streamline regulations to promote real growth and opportunity.  And conservatives of all stripes can champion efforts to foster innovation and move people from poverty to opportunity in ways that do not swell our already bloated federal bureaucracy.

Constitutional Conservatism and the GOP Vision for America

            I am confident that such policies can win broad support.  In the coming weeks and months, I will say more about each of these principles and proposals.  But as we appeal to the American people, we must not confine ourselves to reciting a set of policy bullet points.  We must also sketch out our vision for America and show how constitutional conservatism can lead us to a richer, more robust society. 

Today, as we see the federal leviathan reaching its jaws around many of our most cherished institutions, we need an invigorated conservatism that will return the federal government to its proper role in our constitutional structure. 

A federal government that stops trying to eliminate all the vicissitudes of life will allow more room for family, neighbors, and churches to care for each other.  A federal government with narrower, politically accountable regulatory authority is far less likely to order individuals to violate their deeply held beliefs.  It also has less capacity to issue mandates that inhibit innovation and economic growth.  Such a government will not insinuate itself into all aspects of our lives in ways that enervate our civic institutions and undermine our ability as individuals to choose freely how to live.

Constitutional conservatism is about much more than lowering taxes or eliminating waste, though reducing the size of government does both those things.  It’s about returning government to its rightful role in our society. 

You may recall the Life of Julia ad from President Obama’s reelection campaign, which tells the story of a young woman who graduates college, has a child, and works until retirement, all with nary a mention of a mother, father, brother, sister, husband, or other family member.  Instead, Julia owes all her successes and opportunities in life to the federal government, which is there to support her every step along the way.  The ad is a perfect distillation of the ultimate end of the progressive state—government as replacement for family and community, God and priest, mentor and friend.  That is not the government our nation’s founders envisioned, nor the one they created.

Government’s role is not to provide universal social and economic support, but rather to create opportunities and remove obstacles.  A vigorous, dynamic constitutional conservatism will return government to its proper role—that of supporter, not director.  As Ronald Reagan said in his First Inaugural, we must make government “work—work with us, not over us; . . . stand by our side, not ride on our back.  Government can and must provide opportunity, not smother it; foster productivity, not stifle it.”

That is the vision I believe Republicans must offer.  By keeping the Constitution as our guide and working to conserve our founding principles, we can offer a hopeful, reform-oriented agenda that will unite the conservative movement and win the hearts and minds of a broad majority of Americans looking for change.

Thank you.

Oct 06 2014

Hatch Gives Keynote Speech on Religious Freedom at BYU Law School’s International Law and Religion Symposium

Utah Senator and a Lead Author of the Religious Freedom Restoration Act Gives Keynote Address at 21st Annual Symposium, Receives Award for His Decades of Service

U.S. Senator Orrin Hatch (R-Utah), a current member and former Chairman of the Senate Judiciary Committee and a lead author of the Religious Freedom Restoration Act (RFRA), gave the keynote address at the 21st annual International Law and Religion Symposium at Brigham Young University law school Sunday night.