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    The President. Well, it's interesting you asked that question. A lot 
of people get dividends, see. And that's one of the reasons why we're 
analyzing this issue of taxing things twice, particularly dividends. 
Most seniors--over 50 percent of the seniors receive dividends.
    First of all, it's unfair to tax money twice. There's a principle 
involved. The Government ought to be content with taxing revenue streams 
or profits one time, not twice. And in dividends, we tax the corporate 
profit, and then we tax the money being sent to the shareholder. And 
that doesn't make any sense. That's unfair. That's bad public policy. 
Many of the shareholders that pay the taxes are senior citizens. These 
are senior citizens who have retired and senior citizens who can use 
that money.
    Thirdly, the reduction in taxes on dividends will encourage capital 
flows into the marketplace. It will encourage investment, and that's 
what we want. We want to encourage investment activity. Investment means 
jobs.
    And so I'm not going to specifically tell you what's in the speech 
tomorrow, though it looks like some others might have already done that. 
I do encourage you to listen to it. But I encourage you to look at the 
entire package. It's a package that's shaped for economic vitality and 
growth.
    Listen, we're doing fine. Tomorrow you'll hear me say this economy 
is one of the strongest in the world. But what we believe is that we can 
be stronger. And we also know that when somebody is looking for work who 
wants to work means we've got to continue to try to stimulate job 
growth.
    Now, we don't believe it's the role of Government to manage the 
economy. We've got great faith in the private sector. And so we're going 
to create the environment for the private sector to be stronger. That's 
the policy of this administration.
    Sandra, good luck to you. Thanks.
    Q. Thank you, sir.

North Korea

    Q. Mr. President, on North Korea, sir?
    The President. I'll answer one on North Korea, yes, real quick.
    Q. Yes, sir. What would it take for the U.S. or any other nation to 
have direct talks with North Korea? And they claim to believe that the 
U.S. is a threat to them.
    The President. Yes.
    Q. What can you say?
    The President. Well, first of all, I went to Korea and clearly said 
that the United States has no intention of invading North Korea. I said 
that right there in South Korea. And in Kim Chong-il's neighborhood, I 
spoke as clearly, as I said, and said, ``We won't invade you.'' And I'll 
repeat that: We have no intention of invading North Korea.
    We expect North Korea to adhere to her obligations. She's in an 
agreement with the United States and said that she would not develop 
nuclear weapons, and we expect people to keep their word. We will have 
dialog; we've had dialog with North Korea. The Secretary of State 
visited with the Deputy Foreign Minister----
    Secretary of State Colin L. Powell. The Foreign Minister.
    The President. ----the Foreign Minister, excuse me. And talking is 
one thing, but we expect people to honor obligations. And for Kim Chong-
il to be a credible member of the world community, he's got to 
understand that he's got to do what he says he's going to do.

[[Page 33]]

    I believe this will be resolved peacefully, and I believe it can be 
resolved diplomatically.
    Thank you.
    Q. Thank you, sir.
    Q. What were you laughing at before we came in, sir? [Laughter]
    The President. I'm not telling. [Laughter] I won't tell, but 
somebody will leak it. [Laughter]

Note: The President spoke at 4:11 p.m. in the Cabinet Room at the White 
House. In his remarks, he referred to Treasury Secretary-designate John 
Snow; William Donaldson, Chairman-designate, Securities and Exchange 
Commission; President Saddam Hussein of Iraq; and Chairman Kim Chong-il 
and Foreign Minister Paek Nam-sun of North Korea. The Office of the 
Press Secretary also released a Spanish language transcript of these 
remarks. A portion of these remarks could not be verified because the 
tape was incomplete.


<DOC>
[Weekly Compilation of Presidential Documents]
 [frwais.access.gpo.gov]
                         

[Page 33-38]
 
Pages 27-58
 
Week Ending Friday, January 10, 2003
 
Remarks to the Economic Club of Chicago in Chicago, Illinois

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. 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. 
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.
    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.
    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.
    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.
    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.

[[Page 34]]

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.
    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.
    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 2 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. We 
know that the tax cuts worked, and Americans deserve to know their tax 
cuts will not be taken away.
    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 commitment: Corporate misdeeds will be investigated; they will 
be prosecuted; and they will be punished.
    We have met the tests before us because the American people have 
worked hard through difficult times. And now our country

[[Page 35]]

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. 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.
    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, DC, but to remove obstacles standing in the way for faster 
economic growth. That's our role.
    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.
    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 tax 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. The tax cuts should be 
retroactive to January 1st. Upon passage,

[[Page 36]]

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. 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 3 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 

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