pd12my03 Remarks Following a Meeting With Secretary of Defense Donald H. Rumsfeld...

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productive nation. Productivity of the American workforce just last 
year, for example, rose by 4.8 percent, the highest since 1950. When you 
hear somebody say that it's a productive nation, that means we've got 
the best workforce in the world. That's what that says to me.
    We have one of the strongest economies in the industrialized world. 
Things aren't going as good as they can, but nevertheless, we're making 
progress. We've got some positives on which we can build. But one of the 
problems with being a productive economy is that a worker can--one 
worker puts out--there's better output per worker, let me put it to you 
that way. And therefore, in order for the job market to increase, you 
need to

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increase demand for goods and services. If one worker can produce more 
goods or more services than before, you need more goods and services to 
be able to hire the additional worker. In other words, we've got to have 
policy which stimulates demand. And the best way to stimulate demand is 
to let people keep more of their own money.
    Notice I said, ``keep more of their own money.'' The money we're 
talking about in Washington is not the Government's money. It's your 
money. The best way to get this economy growing is to let you have more 
of your own money so you can spend on a good or a service. And when you 
do, it's going to make it more likely somebody is going to find work.
    The good news is that the debate has shifted from ``no tax relief'' 
to ``how much tax relief.'' And I've got an idea: We need robust tax 
relief. We don't need a small tax-relief package. We need a tax relief 
package that meets the needs of our workers. We need a tax relief 
package that stimulates the entrepreneurial spirit. We need robust tax 
relief in order to make sure those who are looking for work can find a 
job.
    Now, let me tell you the ingredients of the package that I've 
outlined. And I'd like to--at the end of this, I'm going to ask your 
help to maybe contact your elected Representatives to let them know how 
you feel, if you like this. First of all, one of the cornerstones of the 
tax policy is to speed up the tax relief which has already been passed. 
In the year 2001, we cut the tax rates on everybody who pays taxes. 
Congress phased it in over a 5--3-, 5-, or 7-year period of time, phased 
that tax relief in. Well, we need the tax relief now. I mean, the 
economy needs the stimulation today, not 3, 5, or 7 years from now. 
Congress needs to accelerate the tax relief.
    We need an immediate reduction of the marriage penalty. And we need 
the child credit--we need to increase the child credit from $600 per 
child to $1,000 per child, retroactive to January 1st of this year. This 
plan would cut the taxes on 705,000 individuals and households in the 
State of Arkansas. That's how you stimulate demand. You let people keep 
more of their own money.
    But the other thing that's interesting about this plan that's 
important for the people of Arkansas and America to understand, when you 
cut individual income tax rates, you help small business grow. And here 
is why: Most small businesses pay tax at the individual income tax rate. 
Most small businesses are taxed at the individual income tax rates 
because they're either a sole proprietorship, a limited partnership, or 
an S corp. Those entities pay individual income tax rates. So when 
you're talking about cutting individual income tax, you're really 
talking about providing more capital for the small businesses of the 
State of Arkansas.
    I just had the honor of talking to Maura Lozano-Yancy. She is a 
small-business owner here in the State of Arkansas. She specializes in 
serving the Spanish-speaking community. She has owned her business for 4 
years. First of all, welcome to this ownership society, Maura. One of 
the things that we want, we want more people owning their own business 
or their own home. There's nothing better than having a society of 
owners helping to affect the public policy in a positive way, by the 
way.
    Maura has been at it for 4 years. She knows that it is--it's tough 
to make it as a small-business owner. But she's making it. How do I 
know? She's got four full-time employees and nine part-time employees. 
She's making it because not only is her business thriving, but she's 
employing people.
    And so we talked about this proposal which would save her more than 
$2,000 on her taxes. You see, she's a limited liability corporation, 
limited partnership, which pays tax rates at the individual income tax 
level. So when you're reducing the individual tax rates, you're 
providing this entrepreneur with more money so that she can either buy 
equipment or hire somebody new--more money to invest. And it's not just 
a one-time shot. We're talking $2,000 a year until we lower taxes again. 
I mean we're talking $2,000 a year out--in the out-years.
    Here's what Maura says--she says, ``Buying equipment is something we 
always wanted to do, but sometimes it gets put back.'' Two thousand 
dollars would make a difference in her calculations as to whether or not 
she makes an investment. And that's what we want to encourage. We want 
to encourage

[[Page 541]]

investment. That's why the plan I've submitted to the Congress will 
raise the small-business-expense deduction from $25,000 a year to 
$75,000 a year.
    We have the Petersons with us today. They're owners of a packaging 
company. They are a C corp. In other words, when you cut individual tax 
rates, they don't get a tax cut. However, when they buy equipment under 
this plan, they will get a tax relief--they'll get tax relief. Pete 
says, ``We don't mind spending money to make money, but you got to have 
money in the first place.'' That's pretty sound economics. [Laughter]
    But this plan, when they make investment, would save them money over 
time. It provides an incentive for them to invest. Just like Richard 
Derickson, who is an S corp. He not only gets to save money as a result 
of the income tax rate--he and his daddy started the business--his 
father started the business in '47. It's a manufacturing company which 
makes panels for household appliances. Richard says he wants to expand. 
He's thinking about expanding. He wants to buy a sheet washer that would 
improve the company productivity. This plan would help him buy that. 
See, the deal costs $250,000 to purchase one of these. But if you can 
expense up to $75,000, it makes it more likely somebody like Richard 
will make that investment.
    And I want you to know what happens when somebody buys a piece of 
equipment. First, somebody has got to make the equipment. When somebody 
provides--when there's an incentive to go out and buy an extra piece of 
equipment, somebody is more likely to find work on an assembly line 
which is making that equipment. And then he purchases the equipment; 
somebody has got to operate the equipment. So we got a new employee 
there. And then the company becomes more productive, which means it's 
more likely to have a better bottom line over time. And when you have a 
better bottom line over time, it means you're likely to stay in 
business, so that the people you've hired today are going to have work 
tomorrow.
    This proposal will save Richard $13,500 in taxes. Not only will he 
save 7,000 from the increased expensing, but he'll have $6,500 in his 
company treasury from cutting the taxes.
    My point to you is, is that the Richards of the world, the Mauras of 
the world are all making decisions about whether to expand or not. 
They're making decisions all across America. Tax policy needs to 
encourage positive decisionmaking in the small-business sector because 
small businesses are the lifeblood for new employment. If we're 
interested in a healthy economy, any good plan has got to focus on small 
business, and the plan I submitted to Congress does just that.
    Gordon Whitbeck was telling me he wants to buy an HBLC machine. I 
had to get him to explain it to me. [Laughter] He's got his own 
laboratories. This piece of equipment will make his laboratories more 
competitive. He said he's more likely to make that purchase when you 
increase expensing up to $75,000.
    The Congress needs to hear from the people of Arkansas. Congress 
needs to hear from the small-business owners all across America and 
understand. And when they do, they must listen to the importance of the 
small-business owner as well as to why this plan is good for small-
business growth and job creation.
    As well, I've talked about the need to treat our investors fairly. 
The Tax Code ought to be fair, and it's fair to tax corporate profits 
once. It is not fair to tax the owners of the corporate profits, the 
shareholders, again. That's not fair. The double taxation of dividends 
is not fair. And I ask Congress to get rid of the double taxation of 
dividends. And let me explain some reasons why it makes sense to do 
that.
    First of all, there are 62,000 seniors in the State of Arkansas who 
pay taxes on dividend income. A lot of seniors rely upon their dividend 
income in order to live the out-years, their remaining years. It's good 
public policy. It makes sense to let the seniors keep more of their own 
money by getting rid of the double taxation of dividends.
    A while ago in the stock markets, it used to be kind of the 
bestselling tool to say, ``Invest in my company. I've got a pretty good 
story to tell.'' I would call that the pie-in-the-sky period of American 
investment. ``We may not have any cashflow,'' the owner of the company 
would say, ``but I've got a great story. Go ahead and invest with me.'' 
And

[[Page 542]]

a lot of people did, and the market corrected, because good old-
fashioned economics eventually sets in. If your out-go is greater than 
your in-flow, no matter how good your story is, you're bust. [Laughter]
    A company which pays dividends says, ``Invest in me. I'm going to 
pay a dividend.'' In other words, there is no pie-in-the-sky; dividends 
come out of cash. ``In order to earn your confidence, I'll pay you a 
dividend on a regular basis.'' And when the dividend is met, it is 
pretty clear the company is achieving its objectives. If the company has 
to cut the dividend, it sends a warning signal up to the investors.
    The best--a good--let me just say, a good corporate reform will be 
conservative accounting practices. If you get rid of the double taxation 
of dividends, more companies are likely to pay dividends, as opposed to 
relying upon pie-in-the-sky statements.
    As well, we've got a lot of--I was talking about the ownership 
society--a lot of people own stocks in America. Now, some of them 
directly--own their stock directly, and some of them through their 
pension plans. But by getting rid of the double taxation of dividends, a 
lot of economists talk about what they call the ``wealth effect,'' that 
the markets will go up. This will help the American public at this point 
during our economic history. The more people feel they've got wealth in 
their portfolios, the more likely it is they're willing to spend.
    And so getting rid of the double taxation of dividends will create 
an environment in which capital moves more freely. As a matter of fact, 
getting rid of the double taxation of dividends will reduce the cost of 
capital. It's good economic policy to get rid of the double taxation of 
dividends.
    Jim Davis is a fellow from right here in Arkansas. He owns his own 
insurance company in Little Rock. He started 28 years ago. He's 65 years 
old, and he reminded me right off the bat that he's not retired. He 
said, ``An entrepreneur never retires. Once you've got the 
entrepreneurial spirit, you never shake it.''
    And he was reminding me that by getting rid of the double taxation 
of dividends, he would save $5,700, money which, by the way, that he 
would seriously consider putting back into his insurance company. He'd 
like to hire two additional employees. The double taxation--getting rid 
of the double taxation of dividends would make it more likely two people 
would find work in Jim's business.
    The package I outlined is fair. It addresses weaknesses in our 
economy. Congress needs to move. They need to move boldly. We don't 
need, as I mentioned the other day, a little bitty tax relief plan. We 
need one that is strong and robust for the American worker.
    You'll hear them talking about the deficit in Washington. I'm 
concerned about the deficit, but let me remind you about how we got into 
deficit. We got into deficit because the economy went into the 
recession, is how we got into deficit. When the economy slowed down, the 
revenues to the Treasury slowed down. When the market corrected, the 
revenues to the Treasury slowed down. That's how you get into a 
recession. You get less revenues coming in, unless you're willing to cut 
expenses.
    Secondly, we got a deficit because we committed--or I committed our 
troops into combat. And I told the Congress, ``I don't care how much we 
have to spend. When we put somebody in harm's way, they deserve the 
best.'' And so in order to deal with the deficit, you've got to deal 
with both sides of the equation, starting with the spending side. A 
Congress which overspends is one which is not that concerned about the 
deficit, evidently.
    I mean, we need to set our priorities, fund those priorities, always 
remember whose money we're spending in Washington, DC, and keep in mind 
the deficit. The surest way never to get out of deficit is to overspend 
in Washington, DC. The best way to deal with the deficit is to hold down 
discretionary spending to a reasonable level. The budget I submitted to 
the United States Congress says discretionary spending ought to be at 4 
percent. That's about as much as an average family's income is expected 
to grow this year. If it's good enough for the average family, if 4 
percent is good enough for the average family, it's darn sure good 
enough for the United States Congress.
    On the one hand, you control the spending. On the other hand, you 
stimulate revenue growth. In order to offset any deficit,

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you've got to have more revenues. The best way to have more revenues is 
to encourage economic growth. The more economic growth there is, the 
more people who are working, the more likely it is you're going to get 
more revenues into the Treasury of the United States. I'm concerned 
about the deficit, but I'm first and foremost concerned about that 
person looking for a job, and so should the United States Congress be 
worried about people looking for work.
    It's time for them to move. The debate has started in Washington, 
DC. The message I hope you send is, the more tax relief, the more work 
is going to be available for your fellow citizens. I would hope you'd 
call the members of your congressional delegation to let them know what 
you think, to let them know your opinion.
    Democracy can work, particularly when a lot of people get on the 
phone or by email and just let them know what's on your mind. You need 
to let them know you're concerned, just like the President's concerned 
about your fellow Arkansas citizen who's anxious to put food on the 
table but can't find a job. And remind them the best way to find a job--
the best way to help somebody find a job is to stimulate the private 
sector, is to stimulate small-business growth, to let people keep more 
of their own money. And you might just remind them that we know whose 
money it is we're talking about in Washington, DC. It's the people's 
money in the State of Arkansas.
    And I want to thank you all for giving me the chance to come by and 
say hello. It's been an unbelievable experience to be your President. 
It's an unimaginable honor to be the President of such a fabulous 
country. I say ``fabulous country'' because there is no doubt in my mind 
we can achieve anything we put our mind to. There's no doubt in my mind 
that we can have a strong economy. And there's no doubt in my mind that 
the world is going to be more peaceful and more free because of the 
United States of America.
    You see, we hold values dear to our heart. We believe in human 
dignity. We believe every individual has worth. We believe in respect. 
We believe in tolerance. But the thing we hold most dear to our heart is 
we believe in the power of freedom.
    Thank you all for coming. May God bless you all, and may God bless 
America.

Note: The President spoke at 12:06 p.m. in the Music Hall at the 
Robinson Center. In his remarks, he referred to Lt. Gov. Win Rockefeller 
of Arkansas; Mayor Jim Dailey of Little Rock; former President Saddam 
Hussein of Iraq; Maura Lozano-Yancy, owner, Cross Cultural Development 
Group; Mary and Pete Peterson, owners, Arkansas Packaging Products, 
Inc.; Richard Derickson, owner, Hiwasse Manufacturing Co.; Gordon 
Whitbeck, chief executive officer, Whitbeck Laboratories; and James 
Davis, owner, Davis Agency. The Office of the Press Secretary also 
released a Spanish language transcript of these remarks.


<DOC>
[Weekly Compilation of Presidential Documents]
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[Page 543]
 
Pages 531-575
 
Week Ending Friday, May 9, 2003
 
Statement on Senate Confirmation of Deborah L. Cook as a Judge on the 
United States Court of Appeals for the Sixth Circuit

May 5, 2003

    I commend the Senate for confirming Deborah Cook to be a Judge on 
the U.S. Court of Appeals for the Sixth Circuit. She has served with 
distinction as an Ohio Supreme Court justice and is known for her 
integrity and outstanding legal ability. She has led a distinguished 
legal career, and she will make a superb appellate court judge.
    Justice Cook was first nominated on May 9, 2001, and has waited 
nearly 2 years for a vote. Some in the Senate continue to engage in 

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