THE PRESIDENT: Thank you all, very much. (Applause.) Thanks a lot.
(Applause.) Thanks for the warm welcome. I appreciate you letting me
come by to say hello. (Laughter.) I'm honored to be in Canton, and I'm
honored to be here at the Timken Company.
Tim was telling me that you all have been in business since 1899 --
turns out that's when William McKinley, of Canton, slept in the same
room I'm sleeping in. (Laughter.) Tim told me that this is a company --
we are a "roll up your sleeves" company, a can -- it is a can-do
environment. Which is one of the reasons I've got so much optimism
about the future of our economy -- because of the "roll up your
sleeves" attitude by thousands of our fellow Americans, because of the
business sense of "we can do whatever it takes to overcome the
obstacles in our way". I know you're optimistic about the future of
this company. I'm optimistic about the future of our country. It's
important that Washington, however, respond to some of the problems we
face.
One of the problems we face is not enough of our fellow Americans
can find work. There's too much economic uncertainty today. And so
three months ago, I sent Congress a package that would promote job
growth and economic vitality. For the sake of our country, for the sake
of the workers of America, Congress needs to pass this jobs growth
package soon. (Applause.)
And that's why I thank you for letting me come and talk to you
about some of the problems that we face here in America. I appreciate
the Timken family for their leadership, their concern about their
fellow associates. They're working hard to make sure the future of
this company is bright, and therefore, the future of employment is
bright for the families that work here, that work to put food on the
table for their children.
I appreciate so very much Jim Griffith, the CEO of the company, for
setting up this wonderful setting for a speech. I want thank you all
for taking time out of your work to come and let me share some thoughts
with you. I want to thank you for loving your country.
I appreciate Hector Barreto, who is the Administrator of the Small
Business Association. He's traveling with me today. And I named a good
man to run what they call the General Services Administration, a fellow
named Steve Perry, who learned how to be -- (applause) -- he's making
sure that we spend your money wisely. And he cut his teeth right here
in the Timken Company. And he's really a good man. He's doing a fine
job.
I appreciate the Governor of the state of Ohio for joining us
today. Governor Taft, I'm honored you're here with us. (Applause.) And
we've got Senator Mike DeWine with us, as well. Mike, thank you for
coming. (Applause.) Congressman LaTourette, Steve LaTourette -- and
Ralph Regula, as well, from the Ohio delegation. (Applause.) We got
members of the state senate; we got members of the state house; we got
members of the city council; we got the mayor -- we got a lot of people
showing up today. (Laughter.) And I'm glad they're here. Thank you
all, for taking time out of our schedules to come. (Applause.)
I've just come from an interesting discussion with some of our
fellow citizens, who have joined me on the stage -- the Freelands, who
are retired citizens. They are anxious about their future. They want to
make sure they got enough money to live out their final years. We
talked about some of the tax relief package and what it means to their
lives -- extra money in their pocket means that they're likely to have
retirement security, which is something we're all concerned about.
I met with Brenda James, from Stockport, Ohio. She told me
Stockport had 500 people, counting all the cats. (Laughter.) And I
said, well, that's 200 less than Crawford. (Laughter.) Counting all the
cows. (Laughter.) But Brenda is a -- owns her own insurance company.
She is a small-business owner. She is a representative of thousands and
thousands of people who own their own business, part of the
small-business sector, which is an incredibly important part of our
economy.
As well, Mike Kovach is here. He's from Youngstown, Ohio. Mike
started his own business. It grew from two people to 70 employees. A
small-business owner is an integral part of the backbone of the U.S.
economy. If you're interested in jobs and job creation, you better be
worried about the small-business sector of America. And the plan I'm
about to talk about addresses the needs of the small-business owner.
We got Charles Parker and his wife here, Linda. Charles is a
farmer; that's a small-business owner. Linda works right here for the
Timken Company, as does Pat Williams. I'll talk about Pat a little bit
later and what this plan means for her and her family.
Finally, Bryan Rice, of Rice's Nursery, right here in Canton. If
you're interested in buying a plant, as the weather gets better and you
want to improve your garden, Byron said he's got some for sale.
(Laughter and applause.)
Today, I had the honor of meeting Anson Park. Anson, you need to
step out here so people can see you. Come over here. Anson is not hard
to miss. (Laughter.) I want to tell you why I want to introduce Anson.
You know a lot of focus on America these days is on our military, how
strong we are, how mighty we are, how powerful we are. And that's --
it's been helpful to be mighty and powerful. But in the midst of the
discussion of our military might, oftentimes, we overlook the true
strength of our country. And the true strength of America is the hearts
of our fellow citizens. That's the strength of America -- the
compassion of neighbor loving neighbor.
Anson Park, is an employee of Enterprise -- he's a volunteer in
what they call the Asset Program, with Akron Urban League, which is a
mentoring program, a program designed to make sure that every child has
a chance to succeed in America, a program that understands that if
you're a fortunate soul, if you're somebody with talents to give,
you're called upon to lend those talents to help somebody in need.
Whether you become involved in mentoring or in your church or
synagogue, in helping in need, the definition of patriotism is to help
somebody. And my call to our fellow Americans is our might is more than
our military; our might is our compassion for our fellow citizens. And
I want to thank you, Anson, and thank thousands across America, and the
hundreds in this room who are serving your country by teaching a child
to read; or making sure a shut-in gets loved; or helping a boy or a
girl at a Boys and Girls Clubs. The strength of America is the
compassion of America. And I'm honored you're here, Anson, thank you.
(Applause.)
In January of this year, I defined two great priorities for this
nation, priorities for my administration. First, we will confront and
defeat threats to America, wherever they gather. (Applause.) We have
made very clear that we would hunt down terrorists who hate us and who
want to harm us. And we made very clear that we would deal with the
growing danger of Saddam Hussein and his brutal regime. The world now
knows we keep our word. (Applause.)
Our men and women in uniform have made us all proud; the women in
uniform have made us all proud -- because they've showed incredible
skill and bravery and decency. They fought the enemy with fierce
courage; they treated the innocent with compassion and respect; and
they are working to make sure the Iraqi people are free. (Applause.)
You see, the values of America understand and say clearly that
freedom is not America's gift to the world; freedom is God's gift to
each and every person of the world -- no matter where they live.
(Applause.) And it was with that value that our soldiers are now acting
in Iraq. And we're working to make sure America is more secure, but
we're also making sure that the Iraqi people can be free, can run their
own country, can decide their own fate. I know that some of you here
today have a loved one serving in the Armed Forces. You tell them, the
United States of America is proud of your loved one's service.
(Applause.)
We learned a good lesson on September the 11th, 2001 -- I say a
good lesson, it better be a good lesson, it was a sad day -- but we
learned a lesson, and that is that oceans will no longer protect us
from the threats of a new era. We must have -- there's a new reality in
the world today. We learned that lesson, but the world has also learned
that this nation is resolute, that we're determined. And the terrorists
are learning that they are not safe -- anywhere on this Earth -- from
the justice of the United States of America. (Applause.) Our coalition
of 90 nations is still intact. We're still working hard. We're waging
the war on terror every single day -- and we're winning. (Applause.)
And here at home, we have another great priority. We will work for
a vigorous and healthy and growing economy so that every American who
wants to work can find a job. (Applause.)
This nation and this economy has been through a lot. We have come
through a recession. The first three quarters of the year 2001 were
recessionary. They were negative growth. We had to deal with some
major corporate scandals. Some of our citizens forgot to tell the
truth. They thought they could cook the books. It affected the
psychology that -- their behavior affected the psychology of this
country. They will be dealt with. Americans now know that if you try to
lie, cheat or steal from employees or shareholders, you will be dealt
with.
We've also seen a slowdown in the global economy. Other countries
around the world aren't growing. We've been attacked. We fought a war
in Afghanistan, and now we have finished a war -- in the process of
finishing a war in Iraq. And yet, in spite of those obstacles and
difficulties, this economy is growing. As a matter of fact, we are
growing faster than most of the industrialized world.
In other words, we've overcome some obstacles because there are
great strengths in this economy. Interest rates are low. And that helps
people, for example, who are trying to buy a home or refinance a home.
Inflation is low. Oil and gas prices are coming down, which helps the
consumer. It puts more money in your pocket. The entrepreneurial spirit
in America is healthy. It's a great strength of our country -- if you
feel like you've got what it takes to start a business, if you want to
go out on your own, you think you've got a good product, this country
says, we welcome you to do so. This is an entrepreneurial heaven here
in America. And that's positive for our country.
But the greatest strength of the American economy is found right
here, right in this room, found in the pride and skill of the American
work force. Last year, productivity growth in America was 4.8 percent
-- that is the best annual increase since 1980. Here at Timken, last
year, productivity rose 10 percent. Which means that America can
compete with any nation in the world because we got the finest workers
in the world. (Applause.)
The high productivity that comes from steady innovation and skilled
workers gives our economy a tremendous edge. In the mid 1980s, it took
Timken an average of 14 worker-hours to produce a ton of alloy steel.
Today it takes less than four hours. Over the long run, this kind of
productivity makes American products more competitive, and it raises
the standard of living for the American people. The true strength of
the country is the fact that we're a productive nation.
And as a result of the strengths, we're growing. But this economy
has got unmet potential. We know this economy can grow faster, and as
it grows faster, it will create more jobs. And we also know that the
right policies coming out of Washington can unleash the great strengths
of the economy and create the right conditions for growth and
prosperity. And that's what I want to talk to you today about -- what
Washington can do.
Sometimes when you hear, don't worry, we're from the federal
government, we're here to help, it makes people a little nervous.
(Laughter.) The role of government is to create an environment in which
capital moves freely, in which the entrepreneurial spirit is strong,
create the conditions so that people feel comfortable about investing,
and therefore, create the conditions for job growth.
We're making some progress in Washington. We've got a consensus on
an important principle: Members of both political parties now support
tax relief. Both sides agree. Both sides understand that if people have
more money in their pocket, they will likely spend it, or invest it,
which is good for job growth. They also understand that the money we're
talking about in Washington is not the government's money -- it's your
money. It's the people's money. (Applause.)
And when you have more of it, it drives up demand for goods and
services. And that's important, given the productivity increases of
today. You see, there's pressure on employment. The more productive the
work force becomes -- if productivity arises -- rises like it's doing
now, it means a worker can produce more. And unless there are folks
willing to buy more goods and services, a company is not likely to
hire. Productivity increases mean you can get by with less workers. And
so the only way to create the conditions necessary for additional job
expansion is to increase demand for goods and services. And the best
way to create demand for goods and services is to let people have more
of their own money. And that's why tax relief is important in the year
2003. (Applause.)
The debate over whether we ought to have tax relief is over. That's
positive. Now we're talking about how big the package ought to be and
what it ought to look like. And I've got some ideas about how big it
ought to be and what it ought to look like. The package ought to be
least $550 billion in size over a 10-year period in order to make sure
that the economy grows. The package needs to be robust, so that we can
create more than a million new jobs by the end of 2004. That's not my
projection. That's the projection of a lot of smart economists who've
analyzed the package. They believe that if the package is implemented
by the United States Congress, of at least $550 billion, more than a
million new jobs will be created by the end of '04. And that's good for
the American worker. And that's what the whole purpose of the package
is, to create the conditions for job growth, so people can find work.
Some in Congress say the plan is too big. Well, it seems like to me
they might have some explaining to do. If they agree that tax relief
creates jobs, then why are they for a little bitty tax relief package?
If they believe tax relief is important for job creation, they ought to
join us and join this administration and join many in Congress and have
a robust package that creates enough work for the American people.
(Applause.)
When I was campaigning and first got into office, the country's
economy was slowing down. And then, as I say, the minute I got sworn
in, we were in a recession. And that's why I went to Congress for a tax
package. I said, we got to get the people more money, so that we keep
demand alive.
And Congress responded, but the problem is they responded with a
phased-in program. They said tax relief was important, and tax relief
should be robust, but they phased it in over a period of years --three
years in some cases, five years in others, and seven years. Listen, all
I'm asking Congress to do is to take the tax relief package they've
already passed, accelerate it to this year so that we can get this
economy started and people can find work. (Applause.)
If the economy help -- needs help now, why wait? Instead of slowly
raising the child credit from $600 to $1,000 per child, let's do this
year and send the $400 for every child to the American family now.
(Applause.) Instead of gradually reducing the marriage penalty, we
ought to do it now. Congress ought to respond to the conditions of the
day. (Applause.) They shouldn't play politics with job creation.
That's why you hear a lot of talk in Washington about what this
means. I'll just tell you -- let me just give you the facts, and you
can decide whether this plan is fair. If you're a family of four,
making $40,000 a year, this tax plan will reduce your taxes from $1,178
to $45 -- a family of four, $40,000. (Applause.)
Pat Williams works right here for the Timken Company. She's a
single mom. She's got the toughest job in America, being a single mom.
(Laughter and applause.) She's got two children: Sheree is in college;
Danielle is in high school. Under the plan I've just described and
submitted to the United States Congress, her yearly tax bill would fall
by nearly $1,000 -- every year. (Applause.) It's not $1,000 just this
year. It's $1,000 every year. It's a thousand more dollars of her own
money in her pocket. She says this, this will give me a little more
breathing room so that I can assist my children as they go off and do
better and bigger things. It's a beautiful statement by a mom who is
working hard for her children.
There are Pats all over this country who will benefit from the tax
plan -- people who are struggling to make sure their kids can go to
college, people who want to save, people who -- that thousand dollars a
year will mean a lot. Tax relief is good for the average citizen.
An economic plan that makes sense also must focus on small
businesses. Small businesses create most of the new jobs in America.
If you're interested in economic vitality, like I am, and like you are,
there needs to a vibrant component of any tax plan that affects small
business. A majority of small firms pay business taxes at the
individual tax rate. Most small businesses pay individual tax rates. A
lot of people assume, well, they pay corporate rates. That's just not
true. Most small businesses are sole proprietorships, limited
partnerships, or subchapter S's. So when you year me talk about
reducing income tax rates, you're really hearing me talk about more
capital in the hands of small-business owners. Reducing income tax
rates is money injected into the small-business sector of the American
economy, that sector which creates most of the new jobs in America.
Under this plan, 23 million small businesses will see their
revenues increase because of tax relief, which means more money for
investment, more money for growth, and more money for jobs. That's what
that means. (Applause.)
And the tax code ought to encourage small-business investment.
Today, a small business can deduct a maximum of only $25,000 in the
year in which they buy equipment. The proposal I submitted to the
United States Congress says we need to triple that amount, to $75,000 a
year, and index that amount to inflation. When a small business buys
new machinery, not only does it help that small business become more
productive, and more competitive, and more likely to hire somebody, it
also means that the person who build the machine is more likely to hire
somebody. It will have a ripple effect. The purchase of a machine has a
ripple effect throughout our economy. It makes sense to encourage
investment, particularly in the small-business sector.
Mike Kovach knows that. He's from Youngstown, Ohio. He runs City
Machine Technologies. I told you he started his business in 1985 and he
had two employees; and now there's 70. That's a pretty good record. He
not only survived, he thrived. And as a result, 68 more people work,
got jobs. He pays taxes on his business as the individual-rate level.
And he wants to make new investments. The proposal I've just outlined
to you will save this good man's company $15,000 a year. And he says --
let me tell you what he says the tax relief will mean -- he says, that
extra money helps put an entry-level man on my -- on my shop floor. And
the horizons for this fellah are limitless is what he says. That's
Mike's words, not mine. That's what he thinks. And since he's a
decision-maker, I take him for his word. The $15,000 means that Mike is
more likely to hire one extra person. And if that happens all across
the country, we've taken a big step toward making sure that people
who're looking for work can find a job.
He also understands better than some of us in Washington do about
how this economy grows. Any time you can improve the bottom line of
Main Street business -- this is Mike's words -- it's good for the city;
it's good for the state; it's great for the nation. It all trickles up,
instead of trickling down.
Now, he may not have a PhD in economics, but he's got a PhD in
common-sense economics. And this tax plan helps people like Mike, and
it's needed. And Congress needs to move. (Applause.)
We can also promote economic growth and job creation by treating
investors fairly. Stock dividends are often the mark of a solid and
respectable firm -- and where you know the profits are real because you
see them in cash. If you pay a dividend, the check actually shows up in
somebody's mail box. It means you're not a pie-in-the-sky company.
You're not making hopeful projections and maybe they happen and maybe
they don't. If you pay a dividend and you tell people you're going to
pay a dividend, you got to deliver the dividend.
Timken is a dividend-paying company. I say it's a dividend-paying
company, after all, Timken has paid a dividend for the last 324
consecutive quarters. (Applause.) That's a solid record. It says to me
the people who run Timken care a lot about their shareholders and the
employees -- after all, there are 44,000 Timken shareholders:
employees, retirees, teacher retirement funds, college endowments, a
lot of ordinary investors here in Canton who take great pride in owning
stock in a local company.
Right now, dividends are taxed twice. When the company makes a
profit, the dividend -- the profits are taxed. And that's good. That's
the way it should be. However, when the shareholder receives his or her
part of the profits, it's taxed again. And that doesn't make sense to
me. Taxing something twice is not good public policy, particularly when
you're worried about investment and job creation, and when you're
worried about shareholders and their ability to save and invest -- and
worry about retirement citizens who rely upon dividend income. The
double-taxation is bad for the citizens of this country, and we need to
eliminate it. (Applause.)
Ending the double-taxation of dividends, according to many
economists, will help the stock market. It will create value in the
stock market. And that's positive. After all, we're becoming an
ownership society -- whether it be in your pension plan or directly,
you own stock. And when the market is strong, it creates a sense of
optimism. It gives you a sense of security. If getting rid of the
double-taxation of dividends increases the markets, it will be good for
millions of investors all across America. It will be good for our
economy. And it will reduce the cost of capital, which means companies
like Timken have got a better capacity to expand, which means jobs.
Ending the double-taxation of dividends would be good for our
seniors who receive half of all taxable dividend income. And that's
important. The Freelands here -- mentioned they're retired; they
receive dividend income. It would be helpful to the Freelands in their
-- in their retirement to not have their dividends taxed twice. Ending
the double-taxation of dividends will be good for Timken workers. And
that's important for you to understand. Last year, this company paid
out more than $30 million in dividends -- and a lot of that went to
Timken employees. So when you hear politicians say the tax cut is only
for the rich, they're talking about you. When you have more money to
save and invest, it's good for your future. It's good for this
economy.
Economists estimate that ending the double-taxation of dividend
will create more than 400,000 by the end of year 2004. And sooner the
Congress gets this done, the sooner we'll see new jobs for the American
people. (Applause.)
When we put the job and growth package together, I didn't set
arbitrary limits on tax relief. Instead, I asked what does the economy
need? How do we stimulate work? What do we need to do for small
businesses? What will create the most jobs? And I concluded that of all
the proposals that I laid out, lower taxes for families, lower taxes
for small businesses, ending the double-taxation of dividends to the
tune of at least $550 billion is the best way to make sure this economy
grows. (Applause.)
Now, you hear talk about deficits. And I'm concerned about
deficits. I'm sure you are, as well. But this nation has got a deficit
because we have been through a war. And I told the American people we
would spend what is necessary to win the war. We weren't going to hold
back so our soldiers were -- didn't have the right equipment and the
best training and the best possible pay. (Applause.)
And we had an emergency and a recession, which affected the revenue
growth of the U.S. Treasury. I mean, the stock market went down. Some
of the pie-in-the-sky projections didn't make, and the investors said,
oops. The numbers weren't real. The investors said, well, it looks like
the days of everything is going up may end. And so people started
selling, and the markets went down. That affected the revenues coming
into the U.S. Treasury. Recession -- negative growth means less
revenues. And so, of course, we've got a deficit. But I know we can
grow out of the deficit with wise policy.
And the best way to deal with the deficit is to address the two
things that affect the deficit. First, increase revenues to the
Treasury through economic growth and vitality. And that's what we
discussed here today. And second, make sure Congress does not overspend
your money. Make sure it focuses on the things that we need and doesn't
spend beyond the things that we need. The best way to solve the deficit
is to grow the revenues coming into the Treasury through economic
vitality and have fiscal sanity in Washington, D.C. (Applause.)
And with people looking for work here in America, we have a
responsibility to help those people find jobs. So I've asked the
Congress to help create what we call Personal Re-employment Accounts.
It's an innovative way to make sure that workers are helped, that they
can help themselves. Under this program Americans who face the greatest
difficulties in finding work will receive up to $3,000 to use in their
job search. And they would have flexibility in how to use that money. A
person with a re-employment account would be able to decide whether to
use the funds for job training, or child care, or transportation, or to
cover the costs of moving to another city. If the job is attained
quickly, within 13 weeks, the worker would be able to keep the cash
balance that exists in the re-employment account. To strengthen the
economy, you not only need good tax policy, but we need to help
American workers find work and the dignity that comes with holding a
job. (Applause.)
The last few months have been a time of challenge for this country
-- no question about it. The resolve of this nation has been tested,
yet we have great resources of national character and national strength
to overcome any challenge that we face. Our confidence and our optimism
have never wavered. We're defending the peace of this world. We love
peace. We use our might to make the world more peaceful. We're bringing
freedom to corners of the world that haven't seen freedom in
generations. We stand strong on the principle that freedom belongs to
everybody -- no matter the color of their skin, no matter what their
religion, no matter where they live. We're building prosperity for this
country. It's a unique moment in our history, and you're living through
it. And as importantly, the American people are rising to meet it. I
want to thank each of you for your strength. I want to thank you for
your love of your country. I want to thank for the work you do every
day. Thanks for letting me come. May God bless you and may God bless
America. (Applause.)