January 7, 2003
Thank you all very much.
It's a windy day out there, which is -- (laughter) -- a
good day for a windy speaker. (Laughter.) I'm honored to
be your guest here at the Economic Club of Chicago. I want
to thank Michael for the invitation. I like a short introduction;
he didn't let me down. (Laughter.)
For 75 years, the business leaders and the entrepreneurs
in the club have helped make Chicago a prosperous and energetic
city. You understand the concerns facing American workers
and employers -- and you believe, as I do, that we must
address those concerns honestly and aggressively.
Today in Washington, a new Congress convenes -- and I
will ask members of both parties to work with me to secure
our economic future. We cannot be satisfied until every
part of our economy is healthy and vigorous. We will not
rest until every business has a chance to grow, and every
person who wants to find work can find a job. So today,
I'm announcing a growth and jobs plan to strengthen America's
economy -- specific proposals to increase the momentum
of our economic recovery.
And this is a good city to give it in. This is one of
America's great cities. And one of the reasons why is because
you have a great Mayor in Richard Daley. (Applause.) We're
from different political parties, but we have some things
in common: We both married above ourselves. (Laughter.)
It is good to see the First Lady of Chicago here. Thank
you for coming. (Applause.) We both have famous and influential
brothers. (Laughter.) Our dads spent a little time in politics.
(Laughter.) And we love our country more than we love our
political parties. (Applause.)
The thing I like most about the Mayor is he gets the job
done for the people of Chicago. And, Mr. Mayor, I'm proud
to call you friend. (Applause.)
And I want to thank another proud son of Chicago, Rod
Blagojevich, for being with us today, as well. He's soon
to have the second best job in America, being a governor.
I congratulate him on his election. I look forward to working
with him for the good of Illinois and for the good of our
country. Thank you for coming, Governor-elect. I appreciate
you being here. (Applause.)
I flew in today with the Senator from Illinois, Peter
Fitzgerald. I appreciate his leadership; I appreciate his
friendship. And as we speak, the Senate is debating the
Fitzgerald bill which will extend unemployment benefits
to those who are looking for work in America. And, Peter,
I want to thank you for your leadership on this important
And on that very same airplane was traveling with me Steve
Friedman, who is the new Director of the National Economic
Council. I'm honored that such a respected economic leader
has agreed to join my administration. I appreciate the
fact that he's willing to take time away from a comfortable
private life to serve our country. He is a strong addition
to a great economic team, and I want to thank him for his
willingness to serve America. Thank you for coming, Steve.
I've also named two other good people to join this team.
John Snow is my nominee to serve as the Secretary of Treasury.
Bill Donaldson is my nominee to be the chairman of the
Securities and Exchange Commission. They will fill essential
positions in my administration, and I urge the Congress
to confirm them quickly.
As the new Congress meets today, our duties to this nation
are clear. We have a responsibility to meet great dangers
to our country, wherever they gather. We will continue
to hunt down the terrorists all across the world. Cell
by cell, we are disrupting their plans. One by one, we're
showing these merciless killers the meaning of justice.
We're also confronting the outlaw regime in Iraq that
lives by violence and deception, and is arming to threaten
the civilized world. The world's demands are clear: For
the sake of peace, Saddam Hussein must disarm himself of
all weapons of mass destruction, and prove that he has
done so. Should he choose the other course, in the name
of peace, the United States will lead a coalition of the
willing to disarm the Iraqi regime of weapons of mass destruction
and free the Iraqi people. (Applause.)
And we're dealing with North Korea, as well. It's a regime
that has expelled international inspectors and is attempting
to defy the world through its nuclear weapons program.
The United States and other nations will confront this
threat, as well. In this case, I believe that by working
with countries in the region, diplomacy will work. We have
no aggressive intent, no argument with the North Korean
people. We're interested in peace on the Korean Peninsula.
As we deal with the dangers of our time, different circumstances
require different strategies. Yet our resolve in each case
will be clear: We will not permit any regime to threaten
the freedom and security of the American people, or our
allies and friends around the world. (Applause.)
Even as we confront these dangers, you need to know I
know we have needs here at home, especially the need for
a vigorous and growing economy. Too many Americans today
are wondering about our economy. They're asking, how is
the economy really doing? Well, the American economy is
the strongest and most resilient economy in the world.
In spite of the terrible shocks that our nation has received,
our economy is growing -- and the entrepreneurial spirit
in America is strong.
We've made great progress these past two years. Remember,
in the summer of 2000, during the presidential campaign,
the market had started on a steady decline. Job growth
started to dwindle. The economy had begun to slow. When
I took office, the signs of recession were real.
So I worked with the United States Congress to reduce
income taxes for everyone who pays them -- more than 100
million individuals, families, and sole proprietorships
received tax relief. This tax relief was the largest in
a generation, and it gave the economy a boost just at the
right time, ensuring that the recession was one of the
shortest and shallowest in modern American history.
Americans should be able to count on those tax cuts as
they plan their financial futures. So I will continue to
press the Congress to make these tax cuts, including the
end of the death tax, permanent. (Applause.) We know that
tax cuts worked, and Americans deserve to know their tax
cuts will not be taken away. (Applause.)
We faced a second test with the attacks of September the
11th, 2001. These attacks caused terrible suffering, and
a massive disruption of the economy. Flights were canceled.
Many hotels and stores were empty. Stock trading was halted
for nearly a week. So we acted -- we reopened the markets;
we helped the people of New York City recover; we assisted
the airlines; we provided tax incentives for business investment;
and we passed terrorism insurance, so building and real
estate projects could go forward.
And then our economy was tested a third time, when Americans
discovered serious abuses of trust by some corporate leaders.
So we passed historic reforms to assure corporate integrity,
to punish wrongdoers, and defend the interests of workers
and investors. Corporate greed and malfeasance cause innocent
people to lose their jobs, their savings, and often their
confidence in the American system. For the sake of justice,
and for the sake of every honest business in America, I
have made this my commitment: Corporate misdeeds will be
investigated; they will be prosecuted; and they will be
We have met the tests before us because the American people
have worked hard through difficult times. And now our country
has entered its second year of economic growth. Our trade
with other nations is expanding, bringing lower prices
that come from imports, and better jobs that come from
exports. More Americans are buying and building houses
-- a central part of the American Dream. The homeownership
rate is now 68 percent, close to the highest ever. Low
interest rates have allowed Americans to tap the rising
value of their homes. In 2002, refinancings added more
than $100 billion to American pocketbooks, money that helped
renovate homes, or pay off debt, or cover tuition, or purchase
The most important indicator of our economic strength
is the growing skill and efficiency of the American worker.
The productivity of American workers went up by 5.6 percent
over the last four quarters for which we have data, the
best increase since 1973. As productivity rises, so do
wages, and our standard of living. Nationwide, incomes
are rising faster than inflation.
We have the most productive, creative and promising economic
system the world has ever seen. (Applause.) America sets
the standard for scientific research, engineering skill
and medical innovation. Our companies and universities
attract talent from every single continent. Investors from
around the world know America is the safest place to put
their money. People around the world who search for a better
life still dream of working and living in the United States
of America. (Applause.)
All these conditions create a platform for long-term growth
and prosperity. Yet, in spite of successes, we have more
work to do, because too many of our citizens who want to
work cannot find a job. And many employers lack the confidence
to invest and create new jobs.
We can help assure greater success tomorrow with the policies
we choose today. Now, these policies must recognize that
our $10-trillion economy is sustained by the labor and
enterprise of the American people. Government spends a
lot of money, but it doesn't build factories, it doesn't
invest in companies, or do the work that makes the economy
go. The role of government is not to manage or control
the economy from Washington, D.C., but to remove obstacles
standing in the way for faster economic growth. That's
our role. (Applause.)
And those obstacles are clear. Many jobs are lost in America
because government imposes unreasonable regulations, and
many jobs are lost because the lawsuit culture of this
country imposes unreasonable costs. (Applause.)
I will continue to press for legal and regulatory reform.
But today -- today I want to talk about these concerns:
Americans carry a heavy burden of taxes and debt that could
slow consumer spending. I'm troubled by that. I'm also
troubled by the fact that our tax system unfairly penalizes
some productive investments. And I worry about people who
are out of work; they need our help, both in short-term
benefits and long-term opportunity. By directly confronting
each of these challenges, we can preserve the hard-won
gains our economy has made and advance toward greater prosperity.
Our first challenge is to allow Americans to keep more
of their money so they can spend and save and invest --
the millions of individual decisions that support the market,
that support business, and help create jobs.
Consumer spending accounts for about 70 percent of our
economy. It has been the driving force of our recovery.
Yet there are warning signs I won't ignore, and I hope
the Congress doesn't ignore either. Many Americans live
in constant and increasing personal debt, with credit card
bills so heavy they often cannot pay much more than the
monthly minimum. Millions of citizens spend their entire
adult lives living paycheck-to-paycheck, never getting
a chance to save for their children's education or their
own retirement. Americans today are paying about a third
of their income in taxes. All of this puts pressure on
family budget, and therefore clouds our economic future.
Americans facing these struggles are due to receive additional
tax relief in 2004, and again in 2006. Republicans and
Democrats in Congress already approved these rate reductions.
And the time to deliver the tax rate reductions is now,
when they can do the most good for the American businesses.
For the sake of economic vitality, I'm asking Congress
to make all the tax rate reductions effective this year.
(Applause.) The tax cuts should be retroactive to January
1st. (Applause.) Upon passage I'll order the Treasury Department
to immediately adjust the amount of money withheld for
income taxes, so that Americans will keep more of their
paychecks right away. (Applause.) By speeding up the income
tax cuts, we will speed economic recovery and the pace
of job creation. If tax relief is good enough for Americans
three years from now, it is good enough for Americans today.
An additional beneficiary of this tax cut will be small
businesses. About 30 million Americans include small business
income when they file their individual tax returns with
the IRS. Faster tax relief will help these businesses to
expand sooner, to hire new people faster, and to build
a stronger foundation for the recovery.
We also know that middle-income families need additional
relief. So today I'm asking Congress to speed up three
other tax reductions promised in 2001 -- tax reductions
that will help our middle-income families. Instead of slowly
reducing the marriage penalty until 2009, we should do
it now, to help 35 million married couples. Instead of
waiting until 2008 to move more taxpayers from the 15 percent
bracket to the lowest bracket of 10 percent, we should
make that change now and help 2 million working Americans.
And instead of gradually raising the child tax credit from
$600 to $1,000 per child by the year of 2010, for the benefit
of 26 million families, we should raise it now. (Applause.)
These tax reductions will bring real and immediate benefits
to middle-income Americans. Ninety-two million Americans
will keep an average of $1,083 more of their own money.
A family of four with two earners and $39,000 in income
will receive more than $1,100 in tax relief -- real money
to help pay the bills and push the economy forward. And
the sooner Congress acts, the sooner the help will come.
Taken together, these income tax cuts will put an additional
$70 billion to work in the private economy over the next
18 months. And there's no better way to help our economy
grow than to leave more money in the hands of the men and
women who earned it.
Our second challenge is to encourage greater investment
by individuals and small business -- the kind of investing
that builds personal wealth and helps company expand and
creates new jobs.
We are increasingly a nation of owners, who invest for
retirement and the other financial challenges of life.
One-half of American households own stock, either directly
or through pension funds. And we have an obligation to
make sure -- now more than ever -- that American investors
are treated fairly.
We can begin by treating investors fairly and equally
in our tax laws. As it is now, many investments are taxed
not once, but twice. First, the IRS taxes a company on
its profit. Then it taxes the investors who receive the
profits as dividends. The result of this double taxation
is that for all the profit a company earns, shareholders
who receive dividends keep as little as 40 cents on the
Double taxation is bad for our economy. Double taxation
is wrong. Double taxation falls especially hard on retired
people. About half of all dividend income goes to America's
seniors, and they often rely on those checks for a steady
source of income in their retirement.
It's fair to tax a company's profits. It's not fair to
double-tax by taxing the shareholder on the same profits.
So today, for the good of our senior citizens, and to support
capital formation across the land, I'm asking the United
States Congress to abolish the double taxation of dividends.
The benefits of this tax relief will be felt throughout
the economy. Abolishing double taxation of dividends will
leave nearly 35 million Americans with more of their own
money to spend and invest, which will promote savings and
return as much as $20 billion this year to the private
By ending this investment penalty we will strengthen investor
confidence. See, by ending double taxation of dividends,
we will increase the return on investing, which will draw
more money into the markets to provide capital to build
factories, to buy equipment, hire more people.
We must also encourage the investments that help turn
small businesses into larger ones. Small businesses create
the majority of new jobs in America, and they account for
half the output of the economy. Currently, tax law permits
small firms to write off as expenses up to $25,000 worth
of equipment -- like computers or machinery that they need.
I'm asking the Congress to raise that limit to $75,000,
and index that number for inflation. This change, together
with the faster rate reductions, will benefit more than
23 million small business owners. My view is this economy
can thrive only if our small businesses thrive. And we
will provide them every incentive to grow and create more
A third challenge facing our country is the need to help
unemployed workers and prepare them for the new jobs of
a growing economy. The unemployment rate today is 6 percent.
That's low for an economy coming out of recession; it's
higher than it should be -- and the unemployment rate is
projected to rise even further in the short run.
This hardship is concentrated in certain regions and in
certain industries. Manufacturing jobs have declined for
28 months in a row. You know what I'm talking about here
in the Midwest. You're showing signs of recovery here,
yet many people here and across this country are still
looking for work.
A woman in Arkansas tells a typical story. She talked
about the fact that her husband was laid off from his job
at a local steel mill. And both she and the husband have
been looking for a job for quite a while. Here's what she
said: "There's just nothing for me to find. We're
trying to save up what little money we have and move to
another community and look for jobs there." Got to
be worried about those kind of stories here in America.
As we encourage long-term growth, we will not forget the
men and women who are struggling today.
Close to 70,000 workers each week exhaust their unemployment
benefits -- and we have an obligation to help our fellow
citizens. So I'm asking this new Congress to extend unemployment
benefits that expired on December the 28th. And the benefits
Congress approves should be retroactive, like the Fitzgerald
bill, so that people who lost their benefits last month
can receive their benefits in full. Helping America's unemployed
workers should be a first order of business in the new
Congress -- and it looks like it's going to be.
We must be more creative when we help those who have the
hardest time finding work. To encourage innovation and
more choices, and to help those who are out of work find
the dignity of a new job, today, I'm unveiling a new approach
to helping unemployed Americans through Personal Re-employment
Accounts. Under this new program, Americans who face the
greatest difficulties in finding work will receive up to
$3,000 to use in their job search. They will have great
flexibility in how they use that money. A person with a
Re-Employment Account will be able to decide whether to
use the funds for job training, or child care, or transportation,
or even to cover the costs of relocating to another city
for a new job. If the job is obtained quickly -- within
13 weeks -- the worker will be able to keep the cash balance
as a "Re-employment bonus."
As we see new economic growth, we will need well-trained
workers to fill new jobs. So I'm going to ask the Congress
to provide $3.6 billion to the states to pay for the Re-Employment
accounts -- enough money to help more than a million unemployed
men and women across America. In order to strengthen this
economy in the future, we must help these Americans today.
The jobs and growth proposals I've outlined today are
a focused plan to encourage consumer spending, to promote
small business growth, to boost confidence in our markets,
and to give critical help to unemployed citizens. Overall,
this growth package will reduce the tax burden of Americans
by $98 billion this year and $670 billion over the next
decade. I proposed a bold plan because the need for this
plan is urgent, and I urge the Congress to act swiftly
and pass this bill. (Applause.)
Our nation has seen two years of serious and steady challenges.
The recession and the decline in the stock market slowed
earnings and cut into tax revenues and created a budget
deficit. And in this time of war, I can assure you this
government is spending what is necessary to win the war.
(Applause.) But the Congress must also understand this:
The American people deserve and expect spending discipline
in Washington, D.C. (Applause.) With spending discipline
and with pro-growth policies, we will expand the economy
and help bring down this deficit.
This growth and jobs package is essential in the short
run; it's an immediate boost to the economy. And these
proposals will help stimulate investment and put more people
back to work, is what we want to have happen. They are
essential for the long run, as well -- to lay the groundwork
for future growth and future prosperity. That growth will
bring the added benefit of higher revenues for the government
-- revenues that will keep tax rates low, while fulfilling
key obligations and protecting programs such as Medicare
and Social Security.
We're meeting the challenges to America. We're strengthening
our economy, and we're taking a battle to our enemies.
And we're not going to leave our work half-finished. In
the months ahead, we'll confront every threat to the safety
and security of the American people. We'll press on to
turn our recovery into lasting growth and opportunity that
reaches every corner of America. By the courage and by
the enterprise of the American people, this great nation
will prosper. And there's no doubt in my mind this great
nation we'll prevail.
May God bless you all, and may God bless America. (Applause.)
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