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Ärende: Press Release (0607111) for Tue, 2006 Jul 11
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President Bush Discusses Mid-Session Review
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For Immediate Release
Office of the Press Secretary
July 11, 2006

President Bush Discusses Mid-Session Review
East Room

President's Remarks view

˙˙˙˙˙ Fact Sheet: Strong Economic Growth and Fiscal Discipline Help Reduce
Budget Deficit ˙˙˙˙˙ In Focus: Jobs _

9:45 A.M. EDT

THE PRESIDENT: Thank you. Thanks for coming. The White House is the
people's house, and I'm here to talk about the people's money. We're glad
you're here. As you know, every year my administration produces a budget
that lays out our priorities and our goals. And every summer the Office of
Management and Budget releases a report called the Mid-Session Review that
tells the American people how much progress we're making towards meeting
our fiscal goals.

Today OMB Director Rob Portman released the latest review. I'm pleased to
report that it's got some good news for the American taxpayer. This economy
is growing, federal taxes are rising [sic], and we're cutting the federal
deficit faster than we expected.

This good news is no accident. It's the result of the hard work of the
American people and sound policies in Washington, D.C. This morning I'm
going to discuss the way forward, I'll explain why our pro-growth policies
are vital to our efforts to reduce the federal deficit, what my
administration is doing to work with Congress to eliminate wasteful
spending, and why we need to confront the unsustainable growth in
entitlement spending.

I appreciate our new Secretary of the Treasury, Hank Paulson, joining us
today. Mr. Secretary, you've been on the job one day and you've got a
pretty strong record. (Laughter and applause.) I'm proud that Rob Portman
is here, and he brought his lad with him. (Laughter and applause.) I thank
the Senate President Pro-Temp, Senator Ted Stevens, for joining us.
Senator, thanks for coming. I'm proud you're here. Thank you for your
leadership. I also want to thank David Dreier, Conrad Burns -- Senator
Conrad Burns, excuse me --

SENATOR BURNS: That's okay. (Laughter.)

THE PRESIDENT: -- Congressman Joe Knollenberg, Ander Crenshaw, Marilyn
Musgrave, thank you all for coming. Pence is with us, thanks for coming.
I'm proud you're here, Mike. Thank you all for taking time to be here to
hear this good news. You're responsible, in many ways, for creating the
conditions for the good news we're about to talk about.

When I came to Washington, taxes were too high, and the economy was headed
into a recession. Some said the answer was to centralize power in
Washington, and let the politicians make the decisions about what to do
with the people's money. That was one point of view.

We had a different point of view. I believe that the economy prospers when
we trust the American people to make their own decisions about how to save,
spend and invest. So starting in 2001, my administration worked with the
United States Congress and we delivered the largest tax relief since Ronald
Reagan was in the White House. We cut rates for everyone who pays income
taxes. We reduced the marriage penalty, we doubled the child tax credit,
and we cut the death tax. We cut the tax paid by most small businesses
because we understand that most new jobs are created by small businesses.
And we encouraged economic expansion by cutting taxes on dividends and
capital gains.

Together, these tax cuts left nearly $1.1 trillion in the hands of American
workers and families and small business owners, and they used this money to
help fuel an economic resurgence that's now in its 18th straight quarter of
growth. The tax cuts we passed work. (Applause.)

Last year, our economy grew at 3.5 percent, and in the first quarter of
this year, it grew at an annual rate of 5.6 percent. Over the past three
years, our economy has grown by more than $1.3 trillion, an amount that is
larger than the size of the entire Canadian or South Korean economy.

Since August 2003, the U.S. economy has added more than 5.4 million new
jobs. Our unemployment rate is down to 4.6 percent. People are working.
Behind these numbers, there are American workers who start each day with
hope because they have a job to help them build a better life. Behind these
numbers there are more families with more money in the bank for college
tuition, or a down payment on their homes. Behind these numbers are small
business owners who are hiring more workers, expanding their businesses and
realizing the great promise of our country.

Our job in Washington is to keep this expansion growing -- going, and to
promote pro-growth policies that let Americans keep more of their
hard-earned paychecks and aid us in reducing our fiscal deficit.

In order to reduce the deficit, you got to set priorities. And in working
with Congress, we've set clear priorities. And the number one priority of
this administration and this Congress is to make sure men and women who are
defending the security of the United States and helping to spread peace
through the spread of liberty get all the help they need from our
government. We will always fund the troops in harm's way. (Applause.)

In an age when terrorists have attacked our country and want to hurt us
again, we will do everything in our power to protect the American homeland.
Those are the clear priorities of this administration, and the clear
priorities of the United States Congress.

Fighting a war on terror and defending the homeland imposes great costs,
and those costs have helped create budget deficits. Our responsibility is
to win this war on terror, and to keep the economy growing. And those are
the kind of policies we have in place. Some in Washington say we had to
choose between cutting taxes and cutting the deficit. You might remember
those debates. You endured that rhetoric hour after hour on the floor of
the Senate and the House. Today's numbers show that that was a false
choice. The economic growth fueled by tax relief has helped send our tax
revenues soaring. That's what's happened.

When the economy grows, businesses grow, people earn more money, profits
are higher, and they pay additional taxes on the new income. In 2005, tax
revenues grew by $274 billion, or 14.5 percent; it's the largest increase
in 24 years. (Applause.) Based on tax collections to date, the Treasury
projects that tax revenues for this year will grow by $246 billion, or an
11 percent increase. The increase in tax revenues is much better than we
had projected, and it's helping us cut the budget deficit.

One of the most important measures of our success in cutting the deficit is
the size of the deficit in relation to the size of our economy. Think of it
like a mortgage. When you take out a home loan, the most important measure
is not how much you borrow, it is how much you borrow compared to how much
you earn. If your income goes up, your mortgage takes up less of your
family's budget. Same is true of our national economy. When the economy
expands, our nation's income goes up and the burden of the deficit shrinks.

And that's what's happening today. Thanks to economic growth and the rise
in tax revenues, this year the deficit will shrink to 2.3 percent of GDP.
That's about the same as the average over the past 40 years.

Here are some hard numbers: Our originial projection for this year's budget
deficit was $423 billion. That was a projection. That's what we thought was
going to happen. That's what we sent up to the Congress, here's what we
think. Today's report from OMB tells us that this year's deficit will
actually come in at about $296 billion. (Applause.)

That's what happens when you implement pro-growth economic policies. We
faced difficult economic times. We cut the taxes on the American people
because we strongly believe that the American people should lead us out of
recession. Our small businesses flourished, people invested, tax revenue is
up, and we're way ahead of cutting the deficit -- federal deficit in half
by 2009.

As a matter of fact, we're a year ahead of fulfilling a pledge that I told
the Congress and the American people. I said to the American people, give
this plan a chance to work. We worked with Congress to implement this plan.
I said, we can cut the federal deficit in half by 2008 -- or 2009. We're
now a full year ahead of schedule. Our policies are working, and I thank
the members of Congress for standing with us.

See, we cannot depend on just a growing economy, though, to keep cutting
the deficit. That's just one part of the equation. We also got to cut out
wasteful spending. See, it's okay to create revenue growth; that's good.
But if we spend all that revenue growth on wasteful programs, it's not
going to help us meet our objectives. And so the second half of the
equation is for this administration to continue working with the Congress
to be wise about how we spend the people's money.

Every year, Congress votes to fund the day-to-day spending of the federal
government. That's called discretionary spending. In other words, the
Congress decides how much to spend on these types of programs on an annual
basis. Every year since I took office, we've reduced the growth of
discretionary spending that's not related to the military or homeland
security. I told you, our priorities are military and protecting the
homeland. But on other programs, we've reduced the growth of that
discretionary spending. The last two budgets have actually cut this kind of
spending.

The philosophy is clear: Every American family has to set priorities and
live within its budget, and so does the federal government. And I thank the
members of Congress for making the tough votes, setting priorities, and
doing the hard work on behalf of the taxpayers of this country.

We made good progress with the emergency spending bill that Congress
approved in June. You might remember the debate leading up to that
supplemental bill. And there was a good constructive debate. And I weighed
in. I said that we got to make sure that the emergency funding in the bill
supported our troops and provided help to citizens that were hit by last
year's hurricanes and to prepare for the dangers of an outbreak of pandemic
flu.

The onset -- I also set limits that I thought were acceptable. In other
words, we came up with our view of what would be a rational spending limit
for this important piece of legislation. And I made it clear to the
Congress, they sent me a bill that went over the limit, I'd veto it. We got
good relations with Congress. People took that threat seriously because I
meant it. Congress responded by removing nearly $15 billion in spending
that had been added to the bill. By meeting the limit I'd set, Congress
ensured funding for vital programs and provided a good example of fiscal
discipline.

The next test is whether or not we can get a line-item veto out of the
United States Senate. A line-item veto is an important tool for controlling
spending. See, it will allow the President to target unnecessary spending
that sometimes lawmakers put into large bills. Today when a lawmaker loads
up a good bill with wasteful spending, I don't have any choices. I either
sign the bill with the bad spending or veto the whole bill that's got good
spending in it. And I think it would be wise if we're seriously --
seriously concerned about wasteful spending to enable the executive branch
to interface effectively with the legislative branch to eliminate that kind
of wasteful spending.

And so we've proposed a line-item veto that the House of Representatives
passed. Under this proposal, the President can approve spending that's
necessary; redline spending that's not; and send back the wasteful,
unnecessary spending to the Congress for a prompt up or down vote. In other
words, it's a collaborative effort between the two branches of government,
all aimed at making sure we can earn the trust of the taxpayers.

Listen, the line-item veto works. Forty-three governors of both parties
have this authority, and they use it effectively to help restrain spending
in their state budgets. I've talked to some of these governors, used to be
a governor. I know what I'm talking about when it comes to line-item veto
being an effective tool. The line-item veto provides a lot of advantages,
and one of them is it acts as a deterrent. See, when legislators think they
can slip their individual items in a spending bill without notice, they do
it.

If they think that they're going to try to slip something in that gets
noticed, it means they're less likely to try to do so. We want to make sure
that the system we have here in Washington is transparent and above-board
and fair to the people's -- taxpayer's money.

And one way to do so is to make sure that the President can work with the
Congress through the line-item veto proposal I submitted. I strongly urge
the United States Senate to take this matter up and pass it into law.
(Applause.)

We're dealing with the short-term deficit. But there's another challenge
that we face. In the long-run, the biggest challenge to our nation's
economic health is the unsustainable growth in spending for entitlement
programs; mandatory programs such as Social Security, Medicare, and
Medicaid. Millions of our fellow Americans rely on these programs for
retirement health care needs. They're important programs. But the spending
for these programs is growing faster than inflation, faster than the
economy, and faster than our ability to pay for them.

To solve the problem, we need to cut entitlement spending. We need to do
something about it, is what we need to do. One reason Secretary Paulson
agreed to join this administration is because he wants to get something
done about these entitlement programs, and I want -- and I want to work
with him.

You know it's so much easy [sic] just to shove these problems down the
road. The easy fix is to say, let somebody else deal with it. This
administration is going to continue trying to work with Congress to deal
with these issues. That's why I ran for office in the first place, to
confront big problems and to solve them. That's why Henry Paulson made the
tough decision to leave the comfort of private life to come in and do
something good for this country. And the United States Congress needs to
feel that same sense of obligation. The time of playing politics with
Social Security and Medicare and Medicaid is over. We need to fix this for
younger generations of Americans to come. (Applause.)

I'm optimistic about the future of this country, because I'm optimistic
about the -- because I understand the nature of the people we got here. I
mean, we are an entrepreneurial people. We're a hard-working, decent group
of citizens. And the role of government is to foster the entrepreneurial
spirit. It's to encourage people. And one way you do that is to keep
people's taxes low, let them keep more of their own money.

We've got great faith in the people's ability to spend their money wiser
than the federal government can do. And our faith in the people has been
proven by the numbers we're talking about today.

We said we got an economic issue, and we're going to let you have more of
your own money to help us recover from recession, the stock market
correction and terrorist attacks and war and natural disasters, and the
people haven't let us down, have they? This economy is strong.

We also said, let's just be patient about solving this federal deficit;
we're not going to take money out of your pocket; let's grow our way out of
it; let's keep -- let's set priorities when it comes to spending, and keep
the people's taxes low, and these revenues will catch up into our Treasury,
and they have. And we're reducing that federal deficit, through the
people's hard work and the wise policies in Washington, D.C.

Today is a good day for the American taxpayer. Tax relief is working, the
economy is growing, revenues are up, the deficit is down, and all across
this great land, Americans are realizing their dreams and building better
futures for their families.

I want to thank you all for supporting our policies. Thank you for giving
me a chance to come to visit with you. I thank the members of Congress for
doing good work. God bless you all. (Applause.)

END 10:05 A.M. EDT

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