For Immediate Release
Office of the Press Secretary
March 27, 2001
Remarks by the President to Southwest Michigan First Coalition/ Kalamazoo Chamber of Commerce Joint Event on the Economy
Western Michigan University Kalamazoo, Michigan
1:42 P.M. EST
THE PRESIDENT: Thank you very much
for that warm welcome. I am honored to be back here in
Kalamazoo. The last time I came, I think I went to the
school right down the street, if I'm not mistaken. And it is
a thrill to be back. It's an honor to be with my friend, the
Governor of the great state of Michigan, a man who I really enjoy being
around. That guy's done a fabulous job as being your
governor, John Engler. (Applause.)
It's good to be with the Lieutenant Governor,
Dick Posthumus. Good to see you, Dick. Candace
Miller. (Applause.) It's great to be here with
Dr. Floyd. I got to know Dr. Floyd last summer. I
was impressed by him then; I'm doubly impressed by him
now. He does a fabulous job for this important
institution. Thanks for having us, Dr. Floyd. I'm
honored to be in your presence again. (Applause.)
I want to thank the leaders of the Kalamazoo
Chamber of Commerce, Kevin McCarthy. I'm honored that you
would have me here. I'm here to talk about a subject that's
dear to our collective hearts, our nation and its economy.
Before I do so, though, I want to thank all of
the members of the United States Congress who are here. I
see Upton, Fred Upton is here; and Peter Hoekstra, Vern Ehlers, Nick
Smith, Joe Knollenberg and Mike Rogers. I'm honored to be in your
presence. I would spend more time talking about you, except
we're flying back to Washington on Air Force One. It will
give me ample time to visit with you about where I think we need to be
heading. (Laughter and applause.)
But the good news is, with those that are
here, I have no doubt that they're going to do the right
thing. We've had a chance to see them in action
before. I submitted my bill a month ago to Congress to
reenergize our economy. And this Michigan delegation, at
least these folks here, stood strong for the working people of
Michigan, and voted for real, meaningful tax relief for the people of
this important state. And I want to thank you
all. (Applause.)
Important elements have passed the House and
are now before the Senate. We have made
progress. But there's a lot of work to be
done. And I'm here to ask for your help. If you
like what you hear, you're only an e-mail away from letting two
senators know what you think. (Applause.)
I find it's important to get out of town -- at
least out of the Nation's Capital -- to take my message directly to the
people who matter. You see, oftentimes, what I try to say in
Washington gets filtered. Sometimes, my words in Washington don't
exactly translate directly to the people, so I've found it's best to
travel the country. I'm coming in from Billings,
Montana. We had about 12,000 people show up last night to
hear my -- gave me a chance to talk about what tax relief means and
what common-sense budgeting will do for our nation.
You see, it's the President's job to look for
warnings of economic trouble ahead, and to heed them, and to
act. I got elected because the people want the President to
act, and that's exactly what I'm going to do. (Applause.)
My approach is based upon common sense, and
here it is: We must put more money in the hands of consumers
in the short-term, and restore confidence and optimism for the
long-term. We need an immediate stimulus for our economy and
a pro-growth environment for years to come.
Some in Congress want America to choose
between these goals, to think of the moment, and not the
future. But lasting prosperity requires long-term
thinking. And if we face facts and act boldly, I'm confident
we can build the long-term prosperity we seek.
The American economy is like a great athlete
at the end of the first leg of a long, long race -- somewhat winded,
but fundamentally strong. We pioneer new technologies in new
industries. The dollar is as respected in Kiev as it is in
Kalamazoo. The world's shrewdest investors put their money
in America. The world's best students come to study in
America. And the world's most ambitious people come to work
in America. This is an economy that has done amazing things,
and it's on the verge of even greater accomplishments and
achievements.
Individuals make it happen. That's
what we've got to understand. The future just doesn't
happen; individuals make it happen. And the right public
policy empowers individuals in America. My policies face
reality as we found it, and lay the foundation for future growth.
As many Americans know firsthand, U.S. stock
markets have been declining steadily for more than a
year. The Nasdaq peaked a year ago last
March. The Standard and Poorer's 500 did the
same. The Dow Jones Industrial average peaked 15 months ago,
in January of 2000. Since those peaks, the Dow has lost
nearly 20 percent of it's value; the S&P; more than a quarter of its
value; and the Nasdaq more than half of its value. These
declines have hurt almost all investors. And they've
surprised and worried many new investors.
In the final quarter of 2000, the American
economy grew at a sluggish, 1.1 percent pace. In that same
quarter, there was no growth at all in new business
investment. Industrial production began dropping last
October, and almost every week brings us reports of layoffs, especially
in manufacturing. Michigan has been hit especially
hard. According to the latest figures, unemployment has
risen more in Michigan over the past year than in any other state of
the Union. Some regions of America, and some industries are
doing better, but the trend is clear, and the need for action is
urgent. (Applause.)
In the short-term, the American consumer needs
a hand. About 25 million families are carrying more than
$10,000 in credit card debt. Many families have tried to
reduce their debt by tapping into their home equity, and partly as a
result, the average home owner's equity share in his or her house
declined in the 1990s. More than a few consumers counted on
their earnings in the stock market to help them carry their
obligations. They need tax relief fast. In fact,
they need it yesterday. So I strongly support the idea of
back-dating tax relief to get cash into the consumer's hands as swiftly
as possible. (Applause.)
And I applaud the members of Congress,
Republicans and Democrats, who have come forward to endorse quick
action on tax relief. Yet, our economy needs more than a
pick-me-up, more than a one-time boost. Our economic health
depends on people feeling comfort and confidence about long-term
decisions -- to start a new business, to invest in a new idea, to buy a
new home. And the people who make those decisions don't care
only about this year's tax rate; they care about next year's rate, and
the year after that.
Immediate tax relief is good
news. But tax relief that gets yanked away next year is not
such good news. Lower rates do not stimulate much economic
activity, unless people can rely on them for years down the road. We
must rebuild business confidence and market confidence and consumer
confidence through a permanently improved business environment.
Lower tax rates mean a new home will be more
affordable, not just the first year, but every year. Lower
rates mean that a new investment will have a better chance of success,
not just the first year, but every year. Lower rates mean that a
start-up company will keep more of its earnings, in not just the first
year, but in every year.
The long-term growth of our economy also
depends not only on real, meaningful tax reductions, but also on
increasing productivity. America has prospered more than any
other major economies in recent years because our productivity has
grown faster than that of other major economies -- and faster than we,
ourselves, once believed possible. Since 1995, in fact,
productivity has grown nearly twice as fast as it did between 1975 and
1995.
What makes productivity go
up? Well, you know as well as anybody, it's education and
investment. If our productivity is to continue to grow, our
people must know more tomorrow than they know today. They
must read better. They must calculate faster and more
accurately. They must understand science more
deeply. So our education policies must insist upon
results. We must be bold enough to measure our children's
progress. We must hold schools accountable. And
we must give parents and children better options if our schools fail to
teach and will not change. (Applause.)
And if our productivity is to continue to
grow, our tools and machinery and equipment must work better and
faster. Our present tax code discourages investment by small
business and entrepreneurs. The vast majority of American
businesses -- the vast majority of American businesses -- pay tax on
the personal schedule, not the corporate schedule.
It is important to -- it's important for
Congress to hear this. The number of unincorporated
businesses and sole proprietors are huge. But they're the
backbone of economic vitality in America. Back in 1990, they
faced a top rate of 28 percent. Today, the unincorporated
business can face a maximum federal rate of nearly 40
percent. Those taxes come right out of cash flow, making it
harder for small business owners to make investments that raise
productivity, boost incomes, provide benefits to their workers.
High taxes discourage potential entrepreneurs
from taking the risk of starting a new business in the first
place. Small business generates approximately 75 percent of
America's net new jobs. High tax rates are weighing those
businesses down. And so I've submitted a plan that not only
reduces the rate at the bottom end of the economic spectrum, but raises
the top rate, as well; to give small businesses the lift they need to
continue providing the job base that will keep America
strong. (Applause.)
Oh, I know you've heard the rhetoric about
only certain kinds of people are going to get relief if you reduce all
rates. But I want to talk about two things, two
principles. One, if we're going to have tax relief,
everybody who pays taxes ought to get
relief. (Applause.) And, secondly, it's important
to always remember the role of the federal government -- or any
government for that matter -- is not to try to create wealth; the role
is to create an environment in which the entrepreneur can flourish, in
which a small business owner can grow to be big
businesses. (Applause.)
So it's important to send a message to the
members of the United States Senate, to be fair and principled and
always remember the role that the small business owner provides in
America: Dropping that top rate makes good, strong economic
sense for the future of this country. (Applause.)
My plan also will encourage the saving that
makes investment possible. The marginal tax rate on savings can reach
68 percent when the impact of the death tax is combined with that of
personal income tax. The death tax is
unfair. (Applause.) It taxes a person's assets
twice. It discriminates against savings, against investment,
and against growth. And my plan repeals the death
tax. (Applause.)
And my plan reforms Social Security so that
every worker can be a saver and an owner. There is no human
dream stronger than the dream of having something you can call your
own. It is the promise of America. It's the promise of
independence and dignity. And we must reform the Social
Security system to give workers the option of directing some of their
payroll tax contributions into personal retirement accounts -- give
every -- every -- working American an opportunity to be an owner, not
just a wage-earner. (Applause.)
We will protect those who rely on Social
Security. We'll also strengthen our nation's greatest social
program by making it a powerful source of saving and
investment. More money in people's paychecks in the
short-term. Greater incentives for work and saving in the
long-term.
Tax relief is central to my plan to encourage
economic growth. And we can proceed with tax relief without
fear of budget deficits, even if the economy
softens. Projections for the surplus in my budget are
cautious and conservative. They already assume an economic
slowdown in the year 2001.
Even if the slowdown were to turn into a
recession similar to that of 1990 and '91, the Congressional Budget
Office projects that the 10-year surplus would shrink by only 2
percent, from a little more than $5.6 trillion to a little less than
$5.5 trillion. Of course, there's more to economic growth
than just taxes and budget. An industrial economy runs on
energy, and we must have a strategy to keep the wheels turning and the
lights burning. (Applause.)
I know you've seen the news. The
lights are dimming in California. Consumers and businesses in
California, the west and all over our nation are paying sharply higher
energy bills. And as we compare our future energy needs to
the currently projected domestic energy supply, we see an ominous
growing gap. Our people are paying a high price for years of
neglect. And the time to act is now. (Applause.)
I directed Vice President Cheney to lead a
task force that will produce the comprehensive energy strategy this
nation needs, and has lacked for many years. The energy
problem wasn't created overnight, and we won't solve the problem
overnight. But we will at last start down the right road, so
that the shortages we face today will not recur year after year.
We'll not solve the energy problem by running
the energy market from out of Washington, D.C. We will solve
the energy problem by freeing the creativity of the American people to
find new sources of energy and to develop the new technologies that use
energy better, more efficiently and more
cleanly. (Applause.)
The tests for any energy policy are
simple: Does it increase supply, and do its incentives
encourage conservation? A policy that fails to meet these
tests is bad public policy. And that is why this
administration does not, and will not, support energy price
controls. (Applause.) Price controls do not
increase supply, and they do not encourage conservation. Price
controls contributed to the gas lines of the 1970s. And the
United States will not repeat the mistake again.
And there's another mistake we won't repeat --
the mistake of putting artificial barriers in the way of world
trade. When economy slows down, protectionist pressures tend
to develop. We've seen this happen before, and it could
happen again. So I want to say this as clearly as I can:
Trade spurs innovation; trade creates jobs; trade will bring
prosperity.
If our trading partners trade unfairly,
they'll hear from us. This administration will always speak
for American interests. But free and open trade is in our
national interest. (Applause.) The world will
know this, that I strongly, and my administration strongly supports
free trade. Twenty years ago, hundreds of millions of human beings
were walled off from the global economy by the policies of their own
governments.
And those walls are coming
down. And people in Mexico and the Americas and Asia and
Africa and Eastern and Central Europe are being set free to join the
world, to understand the promise of market-oriented
systems. It's a big change, and change isn't always
easy. But trade lifts lives and trade furthers political
freedom around the world. And it will build the wealth of
our nation.
I believe this. I believe I must
speak straight with the American people. The American
economy began slowing last summer. But we know how to emerge
from trouble. I like to look at what my predecessors did in
the past. John F. Kennedy supported tax cuts to jump-start a
sluggish national economy in the early 1960s. Ronald Reagan
used tax cuts to break us out of stagflation in the early
1980s. And I strongly believe that meaningful, real tax
relief can ignite another generation of growth. (Applause.)
At tax plan that doesn't play
favorites. A tax plan that cuts taxes
permanently. A tax plan that not only gets money in people's
hands quickly, but a tax plan that stimulates investment and enterprise
and entrepreneurial growth. That's the tax plan I
submitted.
You know, some in the Congress are saying,
well, Mr. President, your plan is too little. And some are
saying, it's way too big. But after careful thought I can
look in the eye and say, I think it's just right. And I hope you'll
join me. (Applause.)
I remember campaigning here in the great state
of Michigan. I think John might remember
this. And people kept saying, well, it just doesn't seem
like your tax plan is getting much steam. Nobody seems
interested. And I said, well, I think you miscalculated our campaign;
it's not one that's based upon polls or focus groups. The
campaign I wage and the administration I'll run is one based upon doing
what I think is right. I'm worried about hard-working people
in America. I worry about the man or woman who goes to work
every single day and has high energy bills to pay and credit card debt
to worry about. I worry.
I also understand this basic premise of
America, though -- that we've got to trust the people of the country to
make decisions; that the whole fundamental concept of America is based
upon individual freedom and our government must trust
people. And it starts with understanding that the surplus --
it is not the government's money, it is the people's
money. And we ought to trust them with their own
money. (Applause.)
And that's the fundamental debate in
Washington, D.C. If you listen carefully, the people up
there will use every excuse in the book to increase the baselines of
government. At the end of last year, the discretionary
spending in Washington, D.C. increased by 8 percent. It's
vastly larger than the rate of inflation. So the new
administration came to town and said, why don't we focus and set some
priorities and slow the discretionary rate of spending down to 4
percent? And I must confess, it created some to squawk and
holler.
But we submitted a budget that sets
priorities. It doubles Medicare. It sets aside all the
payroll taxes for Social Security. It focuses in
education. It pays the people who wear the uniform of the
military more money -- (applause.) But I think it's
important -- we pay down $2 trillion of debt. There's $1
trillion set aside over the next 10 years for contingencies, and
there's still money left over. And I strongly urge the
United States Senate to remember where that money came
from. It's the people's money, and we need to send it back
to the people who pay the bills in this country. (Applause.)
No, this is an issue about trust, as far as
I'm concerned. It's who do you trust. And I want
you to know, I trust the people of this country. I not only trust them
to spend their own money more wisely than the federal government will
spend it, but I trust the people to provide a compassionate tomorrow
for our fellow citizens.
You see, I understand the great strength of
this country is not in the halls of government and faraway capitals,
it's in the neighborhoods of Kalamazoo, Michigan. It's in
the churches and synagogues and mosques that dot this
landscape. (Applause.)
We'll debate budgets and line-items and all
that, but one thing that can't be debated is the true strength of our
country lies in the hearts and souls of citizens who hear the universal
call to love a neighbor just like they would like to be loved
themselves. The true strength of the country takes place in
acts of kindness that no government official probably has ever heard
of, where somebody walks across the street and says, what can I do, to
somebody who needs a hand. Or that Boy Scout or Girl Scout
leader who dedicates time to teach a child values. Or the
after-school program run by a Girls' Club or Boys' Club, where somebody
says, gosh, I'd like to help somebody understand somebody loves
them. No, that's what America is all about.
And our federal government not only must trust
people with their own money, we must empower the great compassion of
America by trusting Americans all across the country. It
begins by working on changing the culture of the Nation's Capital, and
I think we're making good progress. There's a culture of
responsibility beginning to become a part of our Nation's Capital that
each of us understand if we're given the awesome tasks that we're
responsible for upholding the offices we hold. There's a
culture of respect beginning to take hold in the Nation's Capital,
where good people can disagree, but on respectful terms. The
American people are sick and tired of finger-pointing and name-calling
to try to tear somebody down to build themselves up. It's
time to have good public policy become the focal point of this Nation's
Capital. (Applause.)
And I'm convinced that by changing the tone of
Washington and by setting lofty goals and remembering where the great
strength of this country comes from, that this land of ours can achieve
anything we set our mind to; that not only will this economy come
roaring out of its doldrums, but we'll be a land where the fabric is
made up of groups and loving centers that really say to somebody, I
really want you -- I want you to succeed; that the American hope
belongs to everybody who lives in this great land.
I love being your President. I'm
honored you're here. Thank you for giving me a chance to
state my case. And God bless. (Applause.)
END
2:09 P.M. EST
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