President Bush Speaks Out on the Economy in Kentucky
Remarks by the President in a Conversation on the Economy
ISCO Industries
Louisville, Kentucky
10:52 A.M. EST
THE PRESIDENT: Listen, thanks for having me. I want to thank you
all for coming. What we're going to do here is have a -- talk about
how our economy works, and how good public policy out of Washington can
affect people's lives in a positive way, can encourage job growth, so
people have got a hopeful future. That's what we're here to talk
about. And the best way to talk about it is to have people who are
actually living lives that -- which have been affected by policy.
But first, I want to say some things, if you don't mind.
MR. KIRCHDORFER: Go right ahead. (Laughter.)
THE PRESIDENT: Okay, good. (Laughter.) I love the
entrepreneurial spirit of America. It's one of the things that, I
think, makes the country unique and strong. I love family-owned
businesses. Nothing wrong with a son trying to follow in a father's
footsteps. (Laughter and applause.)
I appreciate the Kirchdorfer family and employees for welcoming us
here. Jim was bragging backstage about the success of this company is
really based upon the fact you've got great workers -- highly
productive, well-motivated workers, which speaks volumes about your
management style and your ability to make good decisions, like marrying
your wife, Carolyn. (Laughter and applause.)
I appreciate a member of my Cabinet being here today -- Elaine Chao
is with us. (Applause.) The Senator married really well.
(Laughter.) So did she. Elaine, I appreciate your hard work. I want
to thank very much my friend, Anne Northup, who flew down with me
today. We had a fascinating discussion about Kentucky. (Applause.)
She's doing a great job. She's straightforward. She cares about
people. (Applause.) It's good to see the Governor and Long-term.
Governor here. I want to thank you for coming, Governor and Governor.
I appreciate you all coming. Ernie, thanks for being here.
(Applause.) And Steve Pence, thanks, Steve. (Applause.)
Mr. Mayor -- where's the Mayor? Oh, Mr. Mayor, thanks for coming.
(Applause.) Jerry Abramson, honored you're here. I really appreciate
you taking time to be here. I want to thank you all for taking time
out of your day to come and listen to this dialogue.
There's a person I met at the airport I want to herald. Her name
is Marina Partee. She is -- thank you, Marina. (Applause.) She helps
victims of domestic violence. See, she is a volunteer to make
Louisville, Kentucky a better place for all. She's one of those
thousands of loving souls who are willing to provide comfort to those
who hurt.
The reason I bring up Marina is that we talk about the strength of
America a lot; we say that we're strong because we've got a great
military -- and we'll keep it that way, by the way. (Applause.) We're
strong because we're a wealthy nation. The true strength of this
country lies in the hearts and souls of our citizens. That's where we
find the real strength of America. We find strength in the fact that
there are souls who are willing to take time out of their busy lives to
love a neighbor, just like they would like to be loved themselves.
One of my jobs is to rally the armies of compassion, people who
have heard the universal call to love. And Marina is a soldier in the
army of compassion. I want to thank you for setting a fine example. I
urge people in this fine city to help somebody who hurts. There are
all kinds of ways that you can serve your community. You could mentor
a child, you can help somebody who is homeless, you can help a
shut-in. But be a part of the army of compassion. You represent the
true strength of the country when you do so.
So, Marina, thank you for coming. Thanks for the example. I'm
proud you're here. (Applause.)
I'm optimistic about the future of this country because I know what
we've been through. See, I saw firsthand what the nation has
overcome. We have overcome a recession. We overcame an attack. On
September the 11th, the enemy attacked us, and it hurt our economy. It
also affected our psychology, made us realize oceans were no longer --
could no longer protect us from an enemy which hates what we stand
for. And then, all of a sudden, we started to recover, things got
better because of the resiliency of our economy and the fact that
Americans refused to give in to terror. Then we had some corporate
scandals, scandals which affected our confidence. The capital system
requires honesty and openness. But we dealt with it straightforward.
We said, if you're going to lie or cheat or steal, if you don't tell
the truth to your shareholders and your employees, there will be
serious consequences.
And then, as the economy kind of started to recover from those
three, I made a tough decision, and that is to deal with threats before
they fully materialize, threats abroad before they become imminent.
And that obviously was not only in Afghanistan, but in Iraq. I looked
at intelligence and saw a threat. Congress looked at intelligence and
saw a threat. The United Nations Security Council looked at the
intelligence and it saw a threat. Saddam Hussein said, I'm not going
to expose my weapons, I'm not going to get rid of my -- I'm not going
to allow inspectors in, he said. But this is the same man who had used
them.
So I had to make a decision -- do I trust the word of madman, or do
I remember the lessons of September the 11th? I vowed on September the
11th to do my duty to protect America, to deal with threats before they
fully materialize. So I called upon our country and many other nations
to respond. Some did, some didn't. But the world is better off
without Saddam Hussein. The people of Iraq are better off without
Saddam Hussein. (Applause.)
A march to war affects the confidence of the people. Laura
reminded me, in July of 2002, on the television screens came to the
notation, "America is Marching to War." It's hard to invest capital
when you're marching to war. It's hard to be optimistic, isn't it?
War is not an optimistic thought. Now we're marching to peace, we're
marching to peace. But all those affected not only the psychology of
the country, but affected our economy. But we overcame the obstacles.
And that's why I'm optimistic. I say we overcame them -- the
economy is growing. We added over 100,000 jobs since January, new
jobs. Inflation is low, interest rates low, manufacturing activity is
up. We're growing. The economy is getting better. There's more to
do, but look at what we've overcome. And we overcame it because of
good fiscal policy out of Washington, D.C. in some part. We overcame
it because the role of government is not to manage the economy, the
role of government is to create an environment in which entrepreneurs
are willing to create risk and create new jobs.
And so we cut the taxes on the people. We let people keep more of
their own money. We understand that when somebody has got more of
their own money to spend, they're likely to demand a good or a
service. And in this economy, when somebody demands a good or a
service, somebody will supply that good or a service. And when
somebody supplies that good or a service. And when somebody supplies
that good or service, it means somebody is working. That's what that
means.
We cut all taxes. I believe if you're going to cut taxes, you
shouldn't try to pick winners and losers in the tax code. Everybody
ought to get tax relief. And so we reduced taxes on everybody who paid
taxes. And it particularly helps small businesses when you cut income
taxes, because, you see, most small businesses, like some up here, are
what they call sub-chapter S corporations, which means they pay tax at
the individual income tax level. A lot of small businesses are sole
proprietorships, which means you pay tax at the individual income tax
level. So when you hear people talking about cutting income taxes on
individuals, not only does it help families, those tax cuts help small
businesses. And if you're worried about job creation, like I am, and
you understand that most new jobs are created by small businesses, it
made eminent sense to have policies that affected small businesses in a
positive way.
We also helped families. We increased the child credit to $1,000
per child. That helps moms and dads do their solemn duty to raise
their children. It reduced the marriage penalty. The tax relief
reduced the marriage penalty. I think it makes sense to encourage
marriage in our society through the tax code, not discourage marriage.
(Applause.)
We helped our senior citizens by reducing the tax on capital gains
and dividends. We encouraged small business investment by raising the
limits of deductibility. And we'll hear some talk about that in a
minute. And we put the death tax on its way to extinction.
Now, let me talk about the death tax, right quick. See, I think
it's really unfair to tax a person's assets twice, while they're living
and after they die. (Applause.) I think people ought to be able to
leave their business to whomever they choose, without the federal
government making it difficult to do so. I think a person ought to be
able to live their farm -- leave their farm to whomever they choose,
without the federal government making it difficult to do so. The death
tax is bad for small businesses. It's bad for farmers and ranchers.
It makes -- it's, in my judgment, bad policy, and it's on its way to
being put to extinction. I say, on its way -- you'll hear me talk in a
minute that these -- some of these taxes don't really go away. It's
like they go away for a period of time, but they come back.
Now, as I mentioned, we're doing well. But there are more things
we need to do. We need an energy policy. It's hard to be a
manufacturing company, for example, in America if you have uncertainty
when it comes to energy supply and energy price. We need tort reform.
It is really hard to be a small business owner and try to create new
jobs if you're constantly worried about frivolous and junk lawsuits.
We need to worry about the cost of medical care. You see, it's the
cost of medical care that makes it awfully hard for this country to
remain competitive. As the costs go up, it's harder for small
businesses to provide employment, and it's very difficult for American
families, as well. We need what's called association health care plans
that allows small businesses to pool risk so as to better control the
cost of health care. We need to expand and market health savings
accounts, which will make it easier for small business to provide
affordable health care to their employees. We need medical liability
reform, national medical liability reform. The cost of frivolous and
junk lawsuits is high on our society. It makes it harder for people to
be able to employ people because it increases the cost of medicine.
We need good trade policies. It's easy to trade into America; it
makes sense for us to be able to trade in other countries easily, as
well. Listen, we're good. We're good at growing things. We're good
at manufacturing things. We ought to be selling those into -- not only
here at home, but into other markets, as well.
There needs to be less regulation out of Washington. And frankly,
Governor, there needs to be less regulation out of the state level, as
well, so small businesses can spend time becoming more productive and
employing people, as opposed to spending time filling out paperwork
that, in some cases, probably isn't even read. Going to change unless
Congress acts.
The child credit will go down unless Congress acts. The marriage
penalty will go back up unless Congress acts. The 10 percent bracket
will be affected unless Congress acts. In other words, all the tax
relief that we passed is set to expire. And unless Congress acts, they
will be raising taxes on the American people, at a time when we
shouldn't be raising taxes on the American people.
In 2005, the child credit goes down, which is the tax on the
families. In 2005, the marriage penalty goes up, which is a tax on
people who are married. In 2005, the 10 percent bracket is altered,
which is a tax on people. We don't need to be raising taxes right now
as the economy is beginning to recover. We've got plenty of money in
Washington, D.C., by the way. We've got to be wise about how we spend
it. And by the way, in 2006, many of the small business deductions go
away, which would be a tax on small businesses.
And so I'm calling on Congress to make the tax cuts that are set to
expire permanent. I would like Congress to make all tax cuts
permanent. But the very minimum -- the very minimum, they need to
listen to the stories up here on the stage and make those set to expire
in 2005 permanent. For the sake of our economy, for the sake of
American families, for the sake of small business owners, and for the
sake of job creation, the tax cuts need to be permanent. (Applause.)
Finally, one other thing I do want to say, and that is that we are
in a changing economy. These are exciting times, but change creates
the need for government at all levels to act in a way that takes
advantage of the changing times. We need to make sure our job-training
programs work. We need to make sure that the community college system
is capable of training people for the new jobs of the 21st century --
higher paying jobs, better jobs.
I saw the Mayor nodding his head -- he understands that a good,
viable community college system, which is flexible, which matches up
employer demands with curriculum to make sure there are employees
available for those jobs, is really good at making sure Louisville,
Kentucky is a viable place for people to live and to work. It's a good
way to attract industry, if you've got a viable and real job-training
program system.
I appreciate Elain's hard work on this. This is a major initiative
of our administration, is to provide the opportunity for people to
retrain so that their skills -- they've got the skills necessary for
the new jobs being created in this economy. And I emphasize, better
paying jobs being created in this new economy.
So these are the things we're working on in Washington. But you'll
be happy to hear I about to turn the program over to people who are
actually on the front lines of creating jobs and providing employment,
and with treating people with dignity in the workplace.
Jim is an entrepreneur. He is a risk-taker, he takes risks in
order to make sure his company can compete. He takes risks in order to
make sure the people behind us can work. And so I appreciate being
invited into a successful family-owned business that does so much good
for the people that you employ, and really, so much good for the
economy, because there's thousands of companies all across America who
base their hopes and aspirations on dreams and success and on being a
responsible citizen by providing good work for people.
So, Jim, thanks for having me. Tell us your story.
* * * * *
THE PRESIDENT: Let me just ask you a question. When you made
investments, what did you do? What did you buy? Investment means
somebody -- you went out and purchased something. So when you hear --
when people hear the word, made an investment, it means you went out
and purchased. What did you buy?
MR. KIRCHDORFER: Well, to put our pipe together, it takes
expensive equipment. And we do have Macro* Manufacturing here, which
is where we purchased about $3 million last year of equipment. They're
in Tulsa, Oklahoma, a USA company. And this equipment -- when we open
a new location, we need equipment to put the pipe together at those
locations, so we buy more equipment. We need people to operate the
equipment, so we employ more people. So the expansion has created
growth in investment and jobs.
THE PRESIDENT: See, the tax bill we passed encouraged this company
to invest. It made it easier to make the decision to spend $3 million,
called bonus depreciation. That's fancy words for, we're trying to
encourage Jim to make the decision to expand his business by buying new
equipment. And when he buys new equipment, somebody has got to
manufacture the equipment. And when somebody manufactures the
equipment, it means they're working, right? And so the tax relief we
passed had the effect of encouraging investment at the small business
level. And that's important because most new jobs -- 70 percent of new
jobs, more or less, are created by small businesses like Jim's.
The second thing I want to point out is he started his business
behind his dad's store. Is that right?
MR. KIRCHDORFER: Hardware store.
THE PRESIDENT: Hardware store. You know, it's like, I started my
business in my garage. You know how many times this happens in
America? It is -- think about a country that has got an environment
that encourages people to start their business behind their dad's
store. It's a really exciting part of our country, isn't it? And
government must not thwart this entrepreneurial spirit by bad tax
policy, by bad medical policy, by bad regulatory policy. We need to
encourage the entrepreneurial spirit. It's so hopeful to have a
country where people can start their own business with a good idea.
Now, we can't guarantee success. But we can have an environment so
if somebody decides to take the risk, that they can succeed and,
therefore, end up employing people. I love the -- are you going to
employ anybody next year, you think?
MR. KIRCHDORFER: Oh, sure. We're going to add probably 30 or 40
jobs again next year -- or this year.
THE PRESIDENT: Which is good. Thirty jobs here, 30 jobs there;
all around the country, small businesses are expanding because there's
a sense of optimism about the future of this country. And that's how
people are able to find work. And that's how we're able to provide
stability in the work place.
Speaking about that, we've got Rich Gimball with us. He's the
President -- there's nothing wrong with being, Mr. President --
(laughter) -- of Atlas Machine and Supply. Rich, thanks for coming.
* * * * *
MR. GIMMEL: When my father took over the company in the late '50s,
we had about 35 employees. When my brother Rob and I began to run the
company together -- Rob is in the front row here, he's our CEO.
THE PRESIDENT: He's the pretty one.
MR. GIMMEL: That's right. He's the little brother with the gray
hair, but he's been there longer than I have.
THE PRESIDENT: I see. (Laughter.)
MR. GIMMEL: But we had about 75 employees at that time. Now we
have almost 170 employees at Atlas Machine. We are a very
capital-intensive company. We provide --
THE PRESIDENT: Explain what that means, capital intensive.
MR. GIMMEL: Well, we have to reinvest. We have to reinvest a lot
in our company every year to keep it productive. We have to buy
machine tools, we have to expand plant, we have to expand our
facilities. We have to expand our workforce. And all of this is
extremely demanding of capital.
We provide plant maintenance services in the Ohio Valley, and also,
we're the compressed air and pump provider for industry in the Ohio
Valley. Compressed air is vital to an industry. It's like another
utility. It's as important as their electricity. If they lose their
air, they're out of business, so we're the air people. We're kind of
an industrial --
THE PRESIDENT: It kinds of sounds like Washington.
MR. GIMMEL: That's right. We're the air people. (Laughter and
applause.)
THE PRESIDENT: Is it hot air? (Laughter.)
MR. GIMMEL: Yes, it can be.
THE PRESIDENT: You need to tap into the nation's capital.
(Laughter and applause.)
MR. GIMMEL: Maybe you guys could be supplying us, how about that?
THE PRESIDENT: That's what I -- that was my point. (Laughter.)
* * * * *
THE PRESIDENT: Good. If somebody listening out there, here's a
shot to find work. (Laughter.) If you're willing to work hard.
Thanks for coming.
Jeannie Unruh is with us. One of the exiting things about our
country is that there's a lot of companies run by very skilled women.
Women-owned business is, I think, a very hopeful part of the future of
this country. And I want to thank Jeannie for coming. By the way,
she's a Subchapter S corporation. So when you hear the people rail on
taxes and this, that, and the other -- when you reduce all taxes, it
affects her business. She pays taxes. Don't tax the rich -- well, the
so-called rich happen to be, in many cases, small businesses that are
out providing opportunities for people.
Anyway, Jeannie is the head of Mac Construction and Excavating,
Inc. Thanks for coming.
* * * * *
THE PRESIDENT: The country grows because people who run small
businesses are confident about the future. And what I've come away
with here is that these three business owners are confident, and that's
important. It bodes well for people who are working for these
companies, and for those who they're going to hire.
The other thing about the tax relief plan, obviously it affected
people's lives. And I want to talk to two people whose lives were
affected. I do want to remind you, however, that this year if the
Congress doesn't act on making the tax cuts that expire in '05
permanent, they're raising taxes on people. You'll hear, let's get rid
of Bush's tax plan. That's code word for, I'm going to raise your
taxes. That's what that is. (Applause.)
Just to give you a sense of what that means, a married couple with
two children with an income of $40,000 would face a $915 tax increase
in 2005 if the Congress does not act. Remember the child credit -- the
benefits of the child credit go away, which is like a tax increase.
The marriage penalty goes back up, which is like a tax increase. And
the 10 percent bracket is affected, which is a tax increase.
With us is Libby McKinney. She's got a husband and two children.
She works here as a collections specialist. Libby, thank you for
coming. Tell us what's on your mind.
* * * * *
THE PRESIDENT: Well, that's great. Congratulations. Doing her
duty, by the way. (Applause.) Some people spend the money; some
people save the money. But it all has a positive effect on the
economy. And, by the way, you can't have investment unless there's
savings. And so I appreciate your story. The family saved about
$1,700 because of the tax relief. We throw a lot of numbers around in
Washington; that may not sound like a lot in Washington-speak, it's a
lot for the family, $1,700 tax relief this year.
And by the way, I just, again, want to remind the people listening
that if Congress does not act, this family will have a $725 tax
increase, if Congress doesn't make the tax relief permanent. You see,
they've got two children and they're married, and the 10 percent
bracket affects them. There will be a tax increase on Libby and her
family. I don't think that makes sense to be raising taxes on
hardworking people who are trying to get ahead and do their duty as a
mom and a dad to raise their children.
So, Libby, thanks for coming.
Big Rob is with us, accounting specialist -- Rob Hansen. Thanks
for coming, Rob.
* * * * *
THE PRESIDENT: Good. See, he made a decision with the extra money
to go out and purchase a good. And that just helps the economy. There
are millions of these decisions being made on a daily basis, which is
how the economy works.
I often have to argue that the tax relief was better spent than
government could have spent the money. It's a -- it affected --
(applause.) I appreciate the checks finally arriving. I was a little
nervous when we said we were going to put checks in the mail.
(Laughter.) You've heard it before. (Laughter.) It actually made it.
(Laughter.) But if the Congress doesn't act, this family will pay
$1,000 in taxes increase. It's a tax increase. They don't make -- if
they don't make the child credit permanent or the marriage penalty
permanent or the 10 percent bracket permanent, they pay $1,000 next
year. We're running up taxes on this family. And it affects their
ability to make decisions. It affects their future. It's just -- it
doesn't make any sense for Congress not to make the tax relief
permanent. And the best way that I can possibly tell the story --
they're used to me -- is all they've got to do is listen to what tax
relief meant for people in their lives and what tax increases would
do.
And so I call upon Congress to listen to the voices of the people
out here struggling to get ahead in America, people who are making good
decisions, people who are doing their duty as responsible citizens to
love their children with all their heart, people who are putting food
on the table.
I want to repeat to you what I said before. This country has
overcome a lot, and we're moving forward with optimism and confidence.
You know why? Because we've got great people. And I'm proud to be the
leader of such a strong nation.