For Immediate Release
Office of the Press Secretary
March 16, 2001
Remarks by the President During Meeting with Small Business Owners
The East Room
2:35 P.M. EST
THE PRESIDENT: Thank you all for
coming. Be seated. (Laughter.) Madame Secretary,
thank you very much for the kind introduction. I want to
welcome you all to the White House, the people's house. I
can't tell you what an honor it is to live here. It's been a
fantastic experience for me and Laura and our family. We
take our responsibilities seriously.
I want to welcome you. I want to
welcome the entrepreneurs of America. First, I want to
recognize Hector Baretto, who is the nominee for the Small Business
Administration. Hector. (Applause.) And
President of the Utah State Senate, Al Mansell, is here, as
well. Al, thank you for coming. (Applause.)
Before I introduce the folks behind me, I'd
like to say something about common-sense budgeting, something you get
to do every day; something our federal government ought to do with your
money. And that is take a common-sense approach about what
we do with the people's money. And it means setting
priorities, understanding whose money it is we're spending. And the
best way to do this is to say, what are our priorities?
Education is a priority, and we need to focus
on education. But I also remember where I came
from. It's one thing to spend money at the federal level,
it's another thing to make sure we understand how to achieve
educational excellence for every child. And that means
trusting local folks to chart the path to excellence. The
people who care more about the children in a respective community are
the people who live in the community.
And so while we'll focus some federal
resources, we need to trust the local people by passing power out of
Washington, D.C., to run their public schools in
America. And at the same time, we've got to insist upon
results. You do that every single day with your
businesses. The federal government ought to start doing
that, as well. And so we're going to say, there's more money
for you -- but show us whether or not children are learning to read and
write and add and subtract. You measure, you show us so that
not one single child gets left behind.
Another priority is the defense of the
country. It's a solemn, solemn task of the President to keep
the peace, which means we've got to prioritize spending in the
military. And it starts with making sure we pay our troops
more money. And so my budget says, there's more money for
those who wear the uniform, and better housing for those who wear the
uniform; and taking care of the veterans, for those who used to wear
the uniform.
Another priority is health
care. We've got a plan to take care of the working uninsured
by refundable tax credits. We double the Medicare budget
over a 10 year period of time. Another priority is to make
sure that the Social Security system is safe and secure. And
it starts with spending the Social Security money on only one thing,
Social Security. (Applause.)
So this is a budget that I submitted that sets
priorities. It increases what's called discretionary
spending by 4 percent. That's enough to fund our priorities
and keep our commitments, without overburdening working folks and small
business owners. Now, part of the consternation here in
Washington is that I don't want to spend as much money as they used to
spend up here. By setting priorities and focusing and
remembering whose money it is we're spending, I think we can slow the
rate of growth down.
You see, at the end of last time, the last
session, discretionary spending increased 8 percent. That's
a lot, particularly when you're talking in terms of
trillions. And so we've said, let's be responsible with the
people's money. Let's focus, let's meet needs -- but let's
always remember whose money it is in the first place.
There is a lot of discussion about debt
reduction, and that's a worthy discussion. The budget I
submitted pays down $2 trillion in debt. That's all the debt
that's coming due over the next 10 year; that's $2 trillion over 10
years. People say, why don't you pay down
more? And for those of you who have debt, long-term debt,
know there is a cost to pre-paying debt. And it doesn't make any sense
to pay a premium to pre-pay debt with the people's
money. That's not good fiscal policy. It doesn't
bring any common sense to the budget.
But when we discuss debt, I also want members
of Congress to understand there is more than just government
debt. There is credit card debt that burdens working
people. There is debt in the private sector. And it seems
to make common sense to me that when we're planning what to do with the
people's money that we not only pay debt at the national level, but we
give people some of their own money back, or don't take it in the first
place, so they can manage their own debt; so that small businesses can
manage their debt.
I set aside money in our budget over a 10 year
period, the 10-year budget, for contingencies. So there is
$1 trillion over 10 that's not spent, just in case something comes
up. What I'm trying to do is to lay out exactly what we've
got planned for the country. We increase discretionary
spending by 4 percent. That's greater than the rate of
inflation. That's greater than most people's paychecks have
risen by.
We pay down debt by $2 trillion. We
set aside a trillion debt of contingencies -- I mean, $1 trillion of
contingency money. And the debate is what to do with the
rest. Because, you see, incredibly enough, as a result of
your hard work and the tax burden on the American people, there is
still money left over. And so what do we do?
And by the way, before I tell you what I think
we ought to do, I want you to know the assumptions in the plan are
conservative assumptions. For example, over the 10 year
period it is assumed our economy will grow at 3.2
percent. We can do better than that in
America. We don't have to have such a pessimistic view of
the productivity of the American people and the ingenuity of the
entrepreneurs, and the hard work of small business people. We'll do
better than that.
So I want to assure my fellow Americans that
the assumptions in the budget are very conservative
assumptions. After all, in the first four months of this
year the cash flow coming into our treasury is $40 billion more than
anticipated. And it seems like to me that if you're
collecting $40 billion more than you thought, somebody is being
overcharged. (Applause.)
And so we've submitted a plan to Congress to
provide meaningful tax relief. Let me give you some of the
principles of the plan. First, I don't believe in targeting
tax cuts. I don't think the U.S. Congress ought to be able
to pick and choose the winners in society. You get the tax
relief and you don't get the tax relief. It makes sense that
everybody who pays taxes, if we're going to have tax relief, ought to
get tax relief. That's the fair way to do
things. (Applause.)
We need to begin the process of making the
code more simple. And a good place to start is to reduce the
number of rates there are. So we shrink the rates from five
to four, and drop all rates. The tax code is very unfair to
people at the bottom end of the economic ladder. If you're
struggling to get ahead in America, say for example you're a single
mom, raising children, and you're at the $22,000 a year range, for
every additional dollar you earn, the way this code is structured
today, you pay a higher marginal rate on that dollar than someone who's
making over $200,000.
As the lady who's struggling to get ahead,
trying to put food on the table for her family, makes additional
dollars over time -- if you're a waitress, for example, working late at
night -- that additional dollar is taxed at a higher rate than someone
making $200,000. That's incredibly unfair, and it's
certainly not what America's about, as far as I'm concerned.
America ought to be about rewarding hard work,
not punishing hard work. And so we drop the bottom rate from
15 percent to 10 percent and increase the child credit from $500 to
$1,000 per child. (Applause.) The code is not
only unfair at penalizing people who live on the outskirts of poverty,
the code also sends the wrong signal when it comes to marriage. And we
have a marriage penalty in the tax code that we need to
fix. And so my plan that I'm submitting to Congress does
just that.
But I want to talk about two other aspects of
the tax relief package that are very important, and sometimes
misunderstood. I strongly believe we need to drop the top
rate from 39.6 to 33 percent. (Applause.) I've
heard all the rhetoric about what that means, and so have
you. But overlooked in the political hyperbole that tends to
take place in our process is the fact that dropping the top rate from
39.6 to 33 percent serves as a stimulus to small business growth in
America. (Applause.)
The Treasury Department released a report
earlier today on small business owners who pay personal income taxes,
and small businesses which pay at the highest rate of
39.6. According to the Treasury Department, nationwide there
are more than 17.4 million small business owners and entrepreneurs who
stand to benefit from dropping the top rate from 39.6 to 33 percent.
The role of government is not to create
wealth. The role of government is to create an environment
in which the entrepreneurial person in America who works hard and
dreams big can realize his or her dreams. That's the role of
government. (Applause.)
I've got three folks standing up here that
will serve as vivid examples of small business folks from respective
states. And I want to explain the impact of what dropping
the top rate means in terms of the number of people, number of small
businesses who will be affected. Again, I repeat for America
to hear: most small businesses don't pay corporate
taxes. Most small businesses are sole proprietors or
Subchapter S's. And their businesses are subject to personal
income tax rates.
Patty Nathe of the state of Florida represents
a state where there is 1 million small businesses and entrepreneurs who
will benefit when we drop the top rate. Dennis Fugo from
Ohio -- Denise Fugo, who happens to be head of the National Restaurant
Association, represents a state that has more than 630,000 small
business owners and entrepreneurs who will benefit. And Brad
Drake, from the state of South Dakota, and entrepreneur and small
business owner, represents a state with 55,000 small business owners
and entrepreneurs in a state who will benefit from dropping the top
rate from 39.6 to 33 percent.
It is very important for Congress to hear from
you. It is also important for Congress to understand the
impact small businesses have on our economy, and to always keep that in
mind. If we want to have a strong economy and a strong
America, it is important to understand that small businesses generate
51 percent of the private sector GDP and that small businesses provide
75 percent of the net new jobs in America.
The small business owner is incredibly
important to the future of this country. And this tax relief
plan is aimed at encouraging capital formation and capital growth in
the small business sector of America. And the Congress must
understand that, and must hear from you all. (Applause.)
The tax relief plan will increase cash flow of
small businesses, giving folks more resources to buy more equipment
and, as importantly, higher more workers. This tax relief
plan gives people a chance from both political parties to send a clear
signal that we are allies here in Washington of the small business
owner -- not adversaries -- that we encourage small business growth,
that we understand the importance of the entrepreneur in the American
economic sector.
And I hope as you all become involved in this
process, that you help fight through the noise, the background chatter,
the kind of political clutter that tends to fog the real
issue. And the real issue is how do we get money in the
pockets of our entrepreneurs, after we meet basic obligations of
government, after we increase discretionary spending by 4 percent and
pay down taxes.
The fundamental debate is what to
do. And the apologists, those who don't stand on the side of
the entrepreneur, want to say -- use every excuse in the business to
keep your money in Washington. They want to grow the size of
government. I don't. I want to grow the size of
the private sector, by giving you your money
back. (Applause.)
And there's another debate that's taking place
that affects you directly. And it's about the death
tax. (Applause.) I don't think it's fair to tax a
person's assets twice. I don't think it's fair for the small
business owner or the farmer or the rancher to work their life, so they
can pass their asset or their business on to a relative or a family
member, and have it taxed twice -- once when you make the income, and
secondly after you die.
I hope -- I hope -- that you stand with us,
not only to make sure that the tax relief plan is fair, staying with us
to make sure that dropping that top rate -- people hear what it does
for the incredibly vital sector of America, the American economy, which
is the small business sector. But also stand with us in
sending that message loud and clear, that we need to get rid of the
death tax in the tax code. (Applause.)
I urge you to let your senator know, or
senators know, what your opinion is. I believe you can have
a big impact on how folks think up here. I certainly feel
like we're making progress by reminding people of the practicalities of
budgeting and the common sense approach to what to do with your money.
But you need to let people know what they
ought to be doing with your money, too. And a choice is --
the choice is growing our economy or growing the
government. I just want to assure you that we've got ample
money to meet our needs. And if we don't pass money back, I
just know what's going to happen to it. It's going to be
spent. (Laughter.)
It's like the grandmother in Council Bluffs,
Iowa, said during a speech. She said she has baked a lot of
cookies in her day. And she's seen children and
grandchildren come through her house. And every time she's
left the cookies on the plate, they have been
eaten. (Laughter.) And that's how I view the budget
process. (Laughter.)
Finally, I want to urge you to be involved in
your communities. I know you are in hiring
people. But as entrepreneurs and concerned citizens, it's
also important to be involved in your schools, to help fund and staff
the programs that literally change America, one face at a time.
You see, the great strength of America are the
people of our country, the dreamers and doers and people who can
accomplish things. People who not only figure out how to
make a living by using their brain, but also figure out how to make
their neighborhoods better by following their hearts.
I hope you sponsor mentoring programs, so that
all children feel like somebody cares about them in our
society. I hope you get involved with after school programs,
that may be sponsored by the Boys and Girls Clubs of
America. The greatness of the country really, really exists
because Americans care about our future.
There is a role for government, but I
understand how limited it is. I oftentimes tell people I
wish I could sign the law that says we'll love each other like we'd
like to loved ourself. That's not the role of
government. But it is the role of the President to lift the
spirit of the country, and to call upon the best. And the
best are sitting right here. And I urge you to go back to your
community and make a difference in somebody's life.
God bless you all and God bless
America. (Applause.)
END
2:55 P.M. EST
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