THE PRESIDENT: 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
issue. (Applause.)
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.
(Applause.)
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 punished. (Applause.)
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 other goods.
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. (Applause.)
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. (Applause.)
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.
(Applause.)
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
dollar.
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. (Applause.)
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 economy.
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 jobs.
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.)