"Putting Responsibility First"

Sen. John Edwards
2002 DLC National Conversation
New York, NY
July 30, 2002
Remarks as prepared for delivery

Today I want to talk about one of the most important values in our public life. It's a value that represents what's best in the American character and what's too often missing from our politics. I'm talking about responsibility.

No city on earth stands as a greater symbol of responsibility than this one. The brave firefighters and police officers who lost their lives because they went back in the World Trade Center to save the lives of others. The mayor who took charge and lifted up this city and our nation. The thousands and thousands of citizens whose untold acts of heroism showed the world that this city would come back even stronger than before. So today, we salute New York City, not just the financial capital of America, but now, more than ever, a city at the very heart of America.

Responsibility of the kind we have seen in New York is at the heart of what the DLC has always stood for; it is written in the record and work of this organization. From national service to community policing to deficit reduction, the ideas you have advanced around the country have been about inspiring a new sense of responsibility in all walks of American life. Millions of Americans are able to lift themselves up, give something back, and hold their heads high because you have given them the chance.

In the past year, the American people have set an example to make us all proud. In Afghanistan, I met American soldiers whose courage and idealism took my breath away. Here in this country, Americans feel a sense of common purpose and responsibility like nothing we've ever known before. We need to harness that sense of responsibility, to build a nation as strong as our spirit.

Most Americans put responsibility first, but too many people in leadership positions still don't. For too long, our corporate culture has encouraged some at the top to worry more about their own fortunes than the fortunes of their companies or the future of the hardworking people who put them there. For too long, our political culture has focused too much on who's getting ahead in Washington instead of whether the people who sent us there are getting ahead in their own lives.

It shouldn't be that way, and it doesn't have to be that way. The values we stand for -- security, opportunity, and responsibility; faith, family, and country -- have changed this country before. We can change America again.

I grew up in a small town called Robbins. My father worked all his life in a cotton mill. My mother worked in a lot of jobs, the last for the Post Office. All they wanted was what Americans for generations have wanted: to realize the simple American promise that if they worked hard and played by the rules, they could give their children a better life.

That's not too much to ask. It is time to put our government and our economy back in line with our values. To me, the greatest tragedy of the recent stock collapse is not just the plunge in corporate valuations, but the plunge in corporate values that helped bring it on.

Our economy is fundamentally strong, and with the right policies over the long haul, it will recover strongly. But in the end, this isn't about money; it's about character. It isn't about how much we're worth; it's about what we're made of.

We can bounce back from losing market value, but not from losing sight of our most basic value -- that if we do the right thing, tomorrow will be better than today. We're still a great country even with the Dow at 8,500 instead of 10,000. But we will only be a great country if good people know their hard work means something, their hard-earned tax dollars go for something, and doing right by family, community, and country their whole lives makes a difference.

That means all of us in public life have an awesome responsibility to turn things around in this country. The American people don't want us to tear down America's corporations. They want us to lift corporate standards and punish those who break the law. If we send someone to jail for stealing a few thousand dollars then we should certainly apply the same standard to an executive who effectively steals millions from shareholders and pensioners.

I spent most of my adult life standing up for ordinary people who played by the rules and got hurt by people at the top who didn't. The overwhelming majority of people I met in the business world were good, decent, hard-working people just like the people I'd represent.

Today, most of the executives I talk to are as outraged by what happened at Enron, Arthur Andersen, and WorldCom, as the folks I talk to back home. Up and down the ladder, people all say, that's not the way we do things in America. We want an economy and a society that lives up to our values.

So what are we going to do about it? First, leaders in business and leaders in Washington need to take responsibility and set an example. After months of reluctance, the administration has agreed to go along with our bill to hold corporate leaders accountable for doing right by their employees and shareholders.

One of the essential measures in this bill is one I introduced. It says that we shouldn't just demand responsibility from accountants and executives. We also have to demand responsibility from lawyers. My amendment reminds lawyers that they work for the company and the company's shareholders -- not for a few senior executives. So it says to lawyers, if you learn of wrongdoing at your corporation, you have a duty to report it up the chain of command and to the board if necessary. The ABA doesn't like this amendment. But the truth is we're just saying that those who are sworn to uphold the law have no right to look away when the law is being broken.

If we're going to put responsibility first, we also need a new ethic of responsibility among CEOs and directors. The message from the top must be simple: American capitalism is about adding value, not cutting corners; it is about honest competition, not underhanded cronyism.

Boards across our nation should start by looking a lot harder at whether they can justify to their shareholders and their workers the extraordinary pay of their CEOs.

Of course, American business needs to recruit and retain the best leadership in the world. And we should honor financial success. Government should do nothing that undercuts the strength of our economy.

But we have to tell the truth here: Something is wrong when executives are getting rich while their shareholders are going broke. Something is wrong when, according to Business Week, CEO pay went from 42 times average worker pay in 1980 to over 400 times average worker pay last year.

It is time to strengthen the bond between pay and performance and restore faith in America's corporate leadership.

We should enact a simple right-to-know rule when it comes to CEO pay. Every board of directors should write a clear description of the full pay of their top corporate officers -- everything from options to wages to insurance -- and include an explanation of why that pay is justified when compared to the pay of the average CEO and the average worker. They should post that letter on the Web, and send it to every worker.

For those who would find this burdensome but who justify staggering compensation because their CEO is the Michael Jordan of their industry, let me assure you that the Chicago Bulls never had any trouble convincing their fans that Michael Jordan was worth every penny.

There are other serious questions about executive pay: Should executives have to hold stocks or stock options for a fixed period of time? Should the tax deductibility of excessive compensation be limited in all its forms? But if the boards and CEOs of our nation do not step up to the plate and take responsibility for excessive executive pay, they need to understand that Congress may have no choice but to act on these fronts as well.

What's good for corporate America can be very good for ordinary Americans. But we need sensible laws to make sure that's how it works -- so corporations play by the rules, keep their own houses in order, and earn their profits honestly and fairly.

Take health care. I believe HMOs deserve to succeed by offering affordable health care, not denying the benefits that people are paying for. That's what happens a lot of the time, that's why I've worked hard for a real Patients' Bill of Rights, and that's why we need to make it the law. In the same way, drug companies deserve to make a profit when they invent drugs that save lives. But they do not deserve to make millions by filing frivolous patents and frivolous lawsuits to keep less expensive generic drugs off the market. We have a bill to stop these lawsuits and save Americans $60 billion, and it's time to make it the law of the land.

Here's another example. Despite what the Administration tells you, it is possible for power plants to provide energy for America without polluting the air so people can't breathe. Government ought to make sure that's what they do, but we don't -- our laws manage to be too bureaucratic and too weak at the same time. We can cut the red tape and clean the air with a strong system of pollution credits that companies can trade. This administration is simply rushing rules that will put more money into the pockets of polluters and more smog and sulfur into our lungs. A couple weeks ago I asked somebody from the administration what this would do to Americans' health -- to asthma among kids, to heart problems among senior citizens. He said he basically had no idea. It is extraordinarily shortsighted, and I am going to fight it on the floor of the United States Senate.

Washington can't ask businesses to do more unless we live up to our responsibilities as well. We can't just complain about Enron's books. We have a duty to put our own books in order.

Not so long ago, thanks to the leadership of Bill Clinton, we had fiscal responsibility in Washington. Now we don't. When things turn south, a leader has a responsibility to do something about it. Unfortunately, the only plans this administration has will make things worse.

The one investment that lost more money over the past year than the stock market is our investment in the future -- the incredible shrinking budget surplus, which lost $5 trillion in the blink of an eye. We can't honor our long-term obligations to our parents if we turn our back on long-term fiscal discipline.

That's why I've called for putting off the tax cut that President Bush gave to the wealthiest one percent of Americans, the people who earn $200,000 or more. That's the only way to get us back on the path to fiscal discipline. The world has changed. We've had a recession. We've been attacked on our own soil, and we're fighting a war on terrorism. With our very security at risk and our economy in real trouble, we shouldn't be giving money we don't have to the very fortunate who don't need it.

We also have to be responsible in how we spend the people's money. Most of you come from states in the midst of real budget crises. When the revenues stopped coming in, states didn't get to say, let's cut taxes and increase spending. You rolled up your sleeves and made tough choices. Washington shouldn't be able to play let's pretend any more than your state or your family can.

Washington should set an example, and we should start by putting real spending restraints back in place, including renewal of hard caps on discretionary spending and a real pay-as-you-go requirement for entitlements.

A decade ago, the DLC said we should expand opportunity and demand responsibility. Now the president is borrowing our words and says he wants to usher in a responsibility era. You know, his own administration would be a good place to start. He should show us how he plans to bring back fiscal responsibility when he's proposing to extend forever all those tax cuts for the richest people in America. He should show us how he plans to inspire corporate responsibility when he wants to gut big oil's responsibility for clean air and cut insurance company responsibility to victims. He should show us how he plans to demand personal responsibility when he's cutting police on the street while crime is going up. And he should show us how he plans to live up to American responsibility in the world when we walk away from our responsibility to help Afghanistan's fragile democracy take hold or refuse to work with our allies to halt the dangerous pace of global warming and stop the spread of biological weapons.

I know President Bush likes to steal ideas from us -- but Mr. President, if you're not going to use that word "responsibility," we'd like to have it back.

In the end, it's not enough for us to stop others from tearing down the American Dream. We have to do our part to start building it back up. We should figure out how to overhaul our tax system to make it easier for people to afford a home and save for college and retirement. We should run background checks and establish report cards to hold nursing homes accountable for better care.

If we're serious about responsibility, we not only need to stop the corporate crime wave, we need to stop what has the potential to be a violent crime wave. Last year, the crime rate went up for the first time in a decade. Yet this administration decided to cut funds for state and local police at a time when state and local budgets were already reeling, and local law enforcement was working double time on homeland security as well. We need more police on the street, not less.

The FBI ought to team up with state and local police in the war on terrorism, not shut them out. The Washington debate about a Department of Homeland Security has it backwards: we ought to be figuring out what it takes to make our corners safe, not who gets the corner office.

And as we do more to strengthen our domestic defenses, we must tackle the ticking crime bomb in our midst: the 600,000 convicted criminals who are completing their sentences and returning to our streets every year. We have more than four million people on probation and parole who have broken the law before and are likely to do so again. We are putting criminals back on the streets and nobody's watching them. That is wrong and it has to be stopped. People on probation and parole who use drugs should be punished for it. We need more parole officers, out from behind their desks, and we need to hold people on probation and parole responsible for turning their lives around and becoming productive citizens again.

If we're serious about responsibility, we need to take responsibility for turning around our public schools, not walk away or leave them as they are. We need to ask more from teachers and pay them better in return. We need more choice and competition within the public schools, not vouchers that spend public money without public accountability. We need to do more to teach values at school, not less. The Ninth Circuit was wrong about the Pledge of Allegiance. This is one nation under God, and I want our schoolchildren to know it.

Finally, we should reward young people who take responsibility and give something back. We have a bill in Congress right now that means a lot to me. It hasn't gotten much attention, but it says to every state: if you're willing to ask every student in high school to give something back to their community, we're willing to help pay for it. We ought to make community service a rite of passage for every young American.

Responsibility is a big job, but we know what we need to do. Hold corporate leaders accountable. Bring fiscal discipline back to Washington, by making the tough decisions on taxes and spending. Bring drug costs down. Reform health care, parole, education. Encourage national service.

When those planes struck this city last September, there were many who said our country would never be the same. But the people of this city, and citizens across America, had another idea: that a great land could be greater still.

Last January, the President said something at the State of the Union that I absolutely think is true. He said the American spirit has never been stronger. I agree with that.

Our job will not be done until we can say the same thing about the American Dream.