Contact: White House, Office of the Press Secretary, 202-456-2580
11:12 A.M. EST
THE PRESIDENT: Thanks for coming. Please be seated. Thanks for being here. I'm pleased to be back in Federal Hall. You know, I drove in, and there stood George Washington. I like to call him George W. (Laughter.) It's nice to be back here.
Last week, I delivered my State of the
As we begin this New Year,
Mr. Mayor, thanks for being here. I appreciate you coming. You're doing what people want you to do, and that is to lead this city.
I appreciate Bill Rudin -- thanks for having me, Bill. Good to see you again. I want to thank members of the Congress who have joined us -- Pete King, Vito Fossella, Carolyn Maloney, and Tom Reynolds. Thanks for flying down with me today. Do you want a ride back? (Laughter.)
Mr. Mayor -- David Dinkins, thank you for being here. Proud you're here. And it's good to see my buddy, Mayor Ed Koch. Mr. Mayor, thank you for coming. Appreciate you being here. (Applause.)
I thank the members of the Association of a Better New York who have joined us. I appreciate all the state and local officials who are here.
Bill mentioned that I was here in October 2001. I recognized then our economy had been hit hard and there was great uncertainty about the future. It was a tough time for the country. Many people were out of work. By mid-December, nearly a million jobs had been lost. The collapse of the
I said that day that I was optimistic that our economy would recover from these attacks. But if I'd have told you that we would also make the recession one of the shortest on record, that we'd have confronted corporate scandals, absorb a tripling in the price of oil, fight a global war, and help a whole region of our country recover from a hurricane, you might have been a little skeptical.
When people across the world look at
On Wall Street, you know that
One important step we've taken in
We don't need to change the law. We need to change the way the law is implemented.
Our economic leadership also depends on sensible, pro-growth tax policies. To help bring our economy out of a recession and recover from September the 11th, we cut taxes on the American people. We cut taxes on everybody who pays income taxes. We doubled the child tax credit. We reduced the marriage penalty. We cut taxes on small businesses. And we cut taxes on dividends and capital gains.
There's a lot of political debate about these tax cuts. But here are some of the facts: Since we enacted major tax relief into law in 2003, our economy has created nearly 7.2 million new jobs. Our economy has expanded by more than 13 percent. That expansion is roughly the size of the entire Canadian economy. This economic growth has led to record tax revenues, which has helped us cut the deficit in half three years ahead of schedule. One fact should be clear when you look at the statistics: The fastest way to kill a recovery would be to raise taxes on the people who created it. Now is not the time for the federal government to be raising taxes on the American people. (Applause.)
We must ensure that the money you send to
That means we've got to be careful about how we spend money in other areas. One thing we can do to show the American people that we're going to be smart about how we spend their money is to do something about earmarks -- it's that system of appropriations where things end up being spent even though nobody has voted on them. And I'm going to work with Congress to reduce the amount of earmarks and the number of dollars spent by earmarks in a significant way to earn the trust of the taxpayers of this country, and at the same time, be wise about how we spend their money.
I believe I need a line-item veto to help Congress spend money wisely. And so I put forth a plan that says the legislative branch and the executive branch will work together to eliminate wasteful and unnecessary spending.
We're about to pass a farm bill that provides a strong safety net, while tightening spending and cutting subsidies. We can manage this short-term deficit -- and I look forward to working with Congress to do so. But it's important for Congress to understand there are unfunded liabilities inherent in Social Security and Medicare that we need to do something about now.
And I understand it's tough work that requires political will from both the President and the Congress to come together and solve this problem. I'm hopeful that we can set aside needless politics and address the issues with entitlements in a constructive way. That way people will say, they came to
Our growing economy is also a changing economy. The rise of new technologies, new competition, and new markets abroad is bringing changes -- and these changes are coming faster than ever. There was a time when most people expected they'd keep a job for life. Now the average American has 10 jobs before the age of 40. It used to be that a company's name would stay the same for decades. New companies are now -- now companies are merging and splitting, and creating new names and new stock symbols. Some of us can still remember when cell phones were the size of bricks and considered a luxury. Now they fit in your pocket, they take photos, they play music, and every teenager in
By and large, our dynamic and innovative economy has helped Americans live better and more comfortable lives. Yet the same dynamism that is driving economic growth is also -- can be unsettling for people. For many Americans, change means having to find a new job, or to deal with a new boss after a merger, or to go back to school to learn new skills for a new career. And the question for
I believe that the changes present us with historic opportunities --
First, we can make our economy more flexible and dynamic by expanding trade.
When I took office,
-- that's where they make big bulldozers. The folks there told me that Caterpillar now exports more than one-half of the products they make. They see immediate results when we have broken down barriers to trade. Within two years of implementing our free trade agreement with
Manufacturers, farmers, and service providers all across our country have similar stories. So we need to continue to level the playing field for our goods and services. I strongly believe this: When people around the world have a choice, they choose goods that say "Made in the
In this global economy, new competition means that American businesses must constantly approve [sic]*. Global competition can also lead to hardships for our workers and their families. Government has a responsibility to help displaced workers find new jobs, or even a new career. So my administration has reformed job training programs and expanded Trade Adjustment Assistance to help more displaced workers learn the new skills they need to succeed. I'm going to work with Congress to reauthorize and to improve the Trade Adjustment Assistance this year, so we can help Americans take advantage of this growing, dynamic economy.
At this moment, the most promising opportunity to expand free and fair trade is by concluding the Doha Round at the World Trade Organization. Global trade talks like
The Doha Round is a chance to level the playing field for our goods and services -- in other words, so we can be treated fairly in foreign markets -- but it also is a great opportunity to lift millions of people out of poverty around the world. And so we're going to work hard to complete it. We are dedicated to making sure we have a successful Doha Round.
The only way
Second, we can make our economy more flexible and dynamic by reforming our health care system. Across the country, business owners tell me that the cost of health care is their biggest problem, and it's becoming harder to provide coverage for their workers. American workers and their families also find that the health care system is rigid and confusing. They end up with medical bills that are impossible to understand, and spend hours filling out complicated insurance forms. They feel locked into jobs because they're worried about losing the health insurance if they leave their job. They have no way to measure the quality of their doctors and hospitals. They see good doctors being driven out of practice because of frivolous lawsuits. All this leads to higher medical costs, and higher insurance premiums for businesses and their families.
Listen, federal government has an important role to play when it comes to health care, and that is to help the poor and the disabled and the elderly. And we're keeping those obligations. But for all other Americans, I believe that private health insurance is the best way for them to meet their needs. Many Americans cannot afford private health insurance. So we're taking steps to make it more affordable and to give patients more choices and more control over their health care decisions.
We created health savings accounts, which put patients in charge of their medical decisions and helps reduce the cost of their coverage. And I ask Congress to strengthen health savings accounts. We need to pass Association Health Plans, so that small businesses can insure their workers by pooling risk at the same discount that big companies are able to get.
We're using information technology. Listen, we're a giant consumer of health care at the federal level. And we're insisting upon new technologies to make health care more efficient, and thereby reducing costs inherent in an inefficient system, and reducing medical errors. We believe that the health care industry needs to post price and quality, so as consumers have more choice, they're able to make better decisions about the health care they get. We understand that a non-transparent system where somebody else pays the bills is likely to cause costs to continue to rise. Congress needs to pass medical liability reform. If you're interested in available and affordable health care, we should not have a legal system that's running good doctors out of practice and running up the cost of your medicine. (Applause.)
And one of the most promising ways to make private health insurance more affordable is to reform the tax code. Under current law, workers who get health insurance from their companies get a tax benefit. If you buy insurance on your own, you do not get the tax benefit. The tax code is not fair. So in my State of the Union address I proposed to end this unfair bias in the tax code by creating a standard deduction for every American who has health insurance, no matter where you get it from.
This deduction would also apply to payroll taxes, so those who do not pay income taxes would still get a benefit. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills. Those who now purchase health insurance on their own would save money on their taxes. Millions of others who have now no health insurance at all would find basic private coverage within their reach.
As well, we need to do more to help the states and localities deal with the uninsured. I think the most innovative programs are developed at the state level. And I think it's in our interest to support states that make basic private health insurance available to all their citizens to have help from the federal government, to help them with the poor, to help them with the uninsured. So we're asking Congress to join us in setting up "affordable choices" grants to make sure that the poor and the sick have private health insurance available to them, as well.
All these steps will bring
Third, we can make our economy more flexible and dynamic by diversifying our energy supply. Energy is vital to businesses and farmers and families all across our nation. Yet, we have a fundamental problem: We're too dependent on oil. That creates vulnerabilities. When demand for oil goes up in
Dependency on oil means we're not being as good a steward of the environment as we should be. The way to overcome these challenges is through innovation and technology. I believe it is a good use of your money to spend at the federal level on new technologies to make us less dependent on oil -- and that's exactly what we've done. We're spending money on cellulosic ethanol -- that's a fancy word for saying some day we're going to be able to convert switch grass into energy that powers your cars. We're spending money on biodiesel fuels. We're spending money on advanced batteries, so some day you'll be able to plug in your automobile and drive the first 40 miles on electricity, and your car is not going to look like a golfcart. We're spending money on solar and wind energy, and clean coal and nuclear power.
Since 2001, my administration, working with Congress, has invested up to more than $10 billion to develop cleaner energy alternatives. And this federal funding has helped
So we're on the threshold of dramatic technological breakthroughs. And now the challenge is to move the technologies from research lab into the marketplace. In my State of the Union I set an ambitious goal of reducing gasoline usage in the
We'll leave it to the market to decide the mix of fuels that most effectively and efficiently meet this goal. But that goal can be achieved, and that's why I put it out there. It's a necessary goal for our national security and economic security. It's an important goal to deal with the issue of climate change. Imagine what these technologies will mean for somebody living in
This day is coming, but it's not going to happen overnight. If you want to be less dependent on foreign oil, we ought to be drilling for oil and gas in environmentally friendly ways here in the
So I hope Congress moves forward on these initiatives, and I'm looking forward to working with them. The idea is to diversify our energy supply, keep our air clean and help create new jobs through new industries that will meet the demand for alternative sources of energy.
Fourth, we can make our economy more flexible and dynamic by strengthening public education. A strong and vibrant education system is vital to maintaining
I know some of our citizens worry about the fact that our dynamic economy is leaving working people behind. We have an obligation to help ensure that every citizen shares in this country's future. The fact is that income inequality is real; it's been rising for more than 25 years. The reason is clear: We have an economy that increasingly rewards education, and skills because of that education. One recent study of male earnings showed that someone with a college degree earns about 72 percent more than someone with a high school diploma. The earnings gap is now twice as wide as it was in 1980 -- and it continues to grow. And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down. The key to rising in this economy is skills -- and the government's job is to make sure we have an education system that delivers them.
And that's why I think one of the most important economic initiatives of my presidency has been the No Child Left Behind Act. The philosophy behind No Child Left Behind says: We're going to spend federal money, but we expect you, at the local level to deliver results. In other words, we've insisted upon accountability. I understand some people don't like accountability, but how can you make sure if our kids are getting the foundation for the skills necessary to compete in the 21st century unless you measure? And when you measure and find failure, correct problems early before it's too late.
The No Child Left Behind Act is working. There's an achievement gap in
The agenda to strengthen education and make
I also believe it's a vital role for the federal government to spend money on basic scientific research. So I've called upon Congress to double the funding for basic scientific research at the National Institute of Standards and Technology labs, or the Department of Energy's Office of Science, or the National Science Foundation. In other words, there's things we can do in
I believe -- and I appreciate Congress's expanding Pell Grants. It's a strong initiative I support. Pell Grants are a good way to help our poor students go to college. And I'm a big believer in the community college system here in
Let me give you an example. I went to
Government should not decide the compensation for
One New Yorker who understands corporate responsibility is a fellow named John Duffy. John Duffy grew up in the
I want the people to listen to what John Duffy said: "If that day was our final day, it would have meant that the bad guys had won. Our way to fight back was to keep going." It says something about John Duffy that the terrorist attacks only made him more determined to succeed. It says something about
And this is the true strength of our economy. That's what makes us the economic leader of the world. And that's why I'm confident that we can remain that economic leader, because we're a nation of dreamers and doers and believers -- God-fearing, decent, honorable people. And I'm proud to be the President of such a nation. God bless. (Applause.)
END 11:50 A.M. EST