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Bush Says Economy Has Shifted into 'High Gear'
WASHINGTON -- Following is a White House transcript of remarks made Thursday by President Bush to the National Federation of Independent Businesses:THE PRESIDENT: Thank you all. Go ahead and be seated. Thanks for coming. Please be seated. I'm honored you're here. Thanks for coming. Welcome to the Nation's Capital. I'm honored to follow Denny Hastert. He is a fabulous Speaker of the House of Representatives. I enjoy -- he is a good friend and a really good leader. And I've enjoyed working with him. And I've enjoyed working with the members of the NFIB, as well. I love to be in the presence of entrepreneurs. Wait, who's minding the store? I think if you look back in your record, you'll find I was an NFIB member in Midland, Texas, way back when. You're 600,000 strong, you have a good voice here in Washington. I want you to know that. And you need to make sure you continue to speak it clearly, because the policymakers need to hear from you about the need for less regulations, good taxation and less litigation in order for you to be able to do your job.I know you know this: You've got friends on Capitol Hill -- you have a friend in the White House, too. There is a practical reason why I'm your friend. One of the practical reasons is, most new jobs -- by far, the vast majority of new jobs -- are started by small businesses in America. See, I'm interested in our people working. I want the American people to be at work, so they fulfill their responsibilities as mothers and dads. And during a time of slowdowns, which we have been through, it's really important to make sure the small business sector of the American economy is strong. And so I'm about to talk about some policies we put in place to help you do your job better. The way I look at it is: what is good for small business is good for America. We're here at a time of great promise and great opportunity. The economy has shifted into high gear, and that's good news. It's good news if you're trying to make a living. It's good news if you're trying to make a living, and it's good news if you're trying to meet a payroll. Factories are busier, families are earning more, home ownership rates -- the home ownership rate is the highest ever in America. See, that is good news if you're interested in promoting an ownership society in our country. We want people owning their own business, we want people owning their own homes. You and I know this, that if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country. We've got economic challenges, we've got economic momentum, and that's good. Because of the good policies, but more importantly, because of your hard work, because of working to realize your dreams, because of the spirit of the small business owner in the country, the economy is strong, and it is getting stronger.I want to thank Jack Faris for inviting me here. I'm honored to come right around the corner. I appreciate Tom Musser, the chairman of the board. I want to thank Dan Danner. He does all the work. But most of all, I thank you all. I've seen many of you as I've traveled the country. Part of my job has been to sell a pro-growth, pro-entrepreneur economic stimulus plan. And I was able to do so in your presence in different parts of America. And I want to thank you for showing up then and showing up now. It's good to see you again. I think every one of you knows full well what this economy has been through. And it's important for our country to remember what we have been through, because we have been through a lot. That's why I'm so optimistic about the future, because I've seen where we have come from. AUDIENCE MEMBER: Four more years!THE PRESIDENT: I might as well quit on that note. Let me just remind you where we have been through -- what we have been through. When I was the President-elect, sitting in Austin, Texas, I had a group of business leaders come down and see me, including Jack Faris. The universal message from those leaders was this: the economy was in trouble. In early January, when we showed up here to go to work, the economy was heading into a recession. The stock market had been declining. Factories were laying off workers. And these were tough times. And you know it, as well it as I. It's hard to be a small business owner during a recession. It's hard to make your payroll. It's hard to fulfill your obligations to your workers when the economy is not growing, I understand that. We began to recover somewhat, and then the enemy hit us on September the 11th. The attack not only affected our psychology, the attack affected the economy. And the two go hand-in-hand, as you know. Parts of our economy came to a standstill right after September the 11th, 2001. Remember, airports were shut down. The stock market closed. We lost nearly a million jobs in three months. And then we began to recover, because of policy and the spirit of America, and then we discovered some of our corporate citizens forgot what it meant to be a responsible American. They didn't tell the truth to their shareholders and their employees. We came together here in Washington, passed tough laws, and made it clear we're not going to tolerate dishonesty in the boardrooms of America. We will hold people to account.There is no question that we -- the economy was affected by recession and attacks and emergencies, the "March to War," corporate scandal, but we acted. We acted. I want to thank you for your help. We acted together. We went to Congress and said, let's lower the taxes on the American people. In order to get this economy moving, let's make sure people have got more of their own money in their pocket.See, I believe -- I think you may agree with me -- that the people can use their money far better than the federal government can. And so we cut rates across the board. We said to Congress, if we're going to have tax relief, let's make sure it's fair. If you have to have tax relief, let's make sure everybody who pays taxes gets relief. And they listened, fortunately. The good news about reducing the individual tax rates across the board was that it helped small businesses. You know what I know -- most small businesses pay tax at the individual income tax rate, because if you're being a subchapter S corporation, or other types of structures that, on the one hand, limit your liability and, on the other hand, cause you to pay tax at the individual rate level. About 90 percent of the small businesses across America pay tax at the individual income tax rate level. And that's important. In other words, if you're interested in trying to get out of recession and recover from an attack, it's important to stimulate the small business sector. And the definition of stimulate for people out there who are trying to understand, when I say, stimulate, the definition of stimulate means more money in your pocket. That's how you stimulate growth. That's how you encourage confidence. We also helped families by doubling the child credit. We reduced the marriage penalty. I've never understood a society which penalizes marriage. It seems like you want to encourage marriage. But we released the marriage penalty.And very important for the small business owner in America, we put the death tax on the road to extinction. We had an interesting debate here in Washington about whether we needed a death tax or not. My position is, you shouldn't tax a person's assets twice, once while they're living, once when they move on. I mean, it's your property, you built your business, and you ought to be able to leave your business to whomever you chose. And secondly, the people here in Washington must understand that many times, when a small business owner passes on, the estate must be liquidated, the company must be liquidated in order to pay the burden of the taxes. Many times the asset is illiquid. There's good capital worth, but they're illiquid. And the taxes are such that people have to sell their business, sell something they've loved, sell something they've tried to build up for the future. Many moms and dads have got dreams about a -- of leaving their businesses to generation after generation after generation. It's become one of the great parts of the American heritage, isn't it, whether it be a small business or a farm. People like that asset base in their own family. And yet the death tax makes it, in some cases, virtually impossible to do so. And getting rid of the death tax is a very important part of making sure the entrepreneurial spirit is strong in America. We also created new incentives for the small businesses by quadrupling the annual expense deduction for equipment, up to $100,000. And that's important. See, that's important. It's an important part of stimulating the economy. We say, look, we're going to encourage you to invest. And our fellow citizens must understand that when small businesses invest, it means really what you're doing is you're purchasing something that somebody has to manufacture for you. And when they manufacture it for you, somebody is more likely to find work. It has a ripple effect throughout our economy. The tax plan, that stimulation -- the economic stimulation plan we passed was based upon a certain principle. It was based upon my optimism about people making the right decisions throughout our economy. See, I'm optimistic about our future because I've got great faith in the small business entrepreneurs of America and the workers of America. And the economic plan we put forth to Congress, which they passed, is based upon that great trust and optimism and knowledge about how the small business sector works and affects the future of the country. Some looked at the problems. We had a debate here in Washington, of course, and that's good, and that's healthy for democracy. You like debates. You also like to win the debates. Some looked at the problems and offered familiar solutions. They said, look, what we really shouldn't have done, is we shouldn't have cut the taxes on the American people. We shouldn't let people have more of their own money. It's kind of the old age -- it's the age-old argument, do you want more government, or more money in people's pockets? I came down on the side of more money in the people's pockets; others would have had it that they want to increase the size of the federal government. I just don't think that increasing the size of the federal government will help you recover from a recession or emergency or corporate scandals. They said it was probably best to isolate America from the world. It was kind of a knee-jerk reaction to tough economic times, and say, why don't we become isolationists, economic isolationists. I've rejected that point of view, because that's too pessimistic, as far as I'm concerned. And I'll discuss that in a minute. In other words, they were quick about pointing out the problems, but frankly, they didn't come up with many good solutions. And in my judgment, there wasn't a better solution than letting people have their money, stimulating the small business sector. And it's paying off. The policies we have put in place have made sense. Of course, recoveries don't happen overnight. Tax relief takes a while to have an impact. And people got impatient. The critics got impatient. You know, there was a lot of gloomy predictions around our country. Let me take a look at a few of them with you, and see what's actually happened, thanks to tax relief. Let me take a look at a few of them with you and see what actually has happened thanks to tax relief. We used to hear it said that America was in a jobless recovery. That term seems to have fallen out of use lately. Since August our policies have helped American businesses create 1.4 million new jobs. We've seen four straight months of manufacturing job gains. It's a clear sign of a broad and strong recovery. Even after the recovery began, some doubted whether it would really take hold. They predicted what they called a "double-dip" recession -- there would be a recession, recovery, and then another recession. Yet in the past year, the economy has grown at the fastest pace in almost two decades. Since last summer, we now have the fastest growing major industrialized economy in the world. And the recession was one of the shallowest in modern American history, thanks to you, thanks to your hard work, thanks to the entrepreneurial spirit being revived. The critics made a few other predictions. They said businesses and households would not spend their tax savings. Turns out business investment is up more than 9 percent in the last year. Businesses are investing. They're spending capital. An NFIB survey shows nearly two-thirds of all small firms had capital spending projects in the last six months. Households have used their tax relief to help drive our economy forward as well. Consumption remained strong through the rough times and has accelerated since the tax relief was passed.Some of the pessimists looked at this economic progress and claimed that the American families are still falling behind. Well, they didn't offer much evidence, because, in fact, as our economy has come back, American families are doing a lot better. Higher growth and higher productivity are leading to better-paying jobs across America. Families are keeping more of their own money. Since the beginning of 2001, real after-tax incomes, which are what people earn after inflation and taxes, have increased by 11 percent. That figure matters a lot. Let me see if I can put it in west Texas terms. That means you've got more money in your pocket. And it's your money to spend. You get to decide what to do with it, not the federal government.Turns out when people have more money in their pocket, they make decisions that suit their own needs, and at the same time has the cumulative effect of stimulating our economy. It's the millions of decisions by consumers and small business owners and investors which drives our economy forward. It's not the decisions by bureaucrats in Washington, D.C. that creates economic growth. At every stage of our recovery, people were always looking for a cloud to stand under, or some were looking for a cloud to stand under here. One of my -- I read something interesting that I'd like to share with you about an attitude that sometimes can take hold. On the morning after D-Day in 1944, The Wall Street Journal ran a headline that read: "Invasion's Impact: Marks Beginning of End of War Economy; New Problems For Industry." That's kind of an interesting way to look at the liberation of Europe. The economic -- there are modern-day economic pessimists"