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Skriven 2006-10-11 23:32:36 av Whitehouse Press (1:3634/12.0)
Ärende: Press Release (0610117) for Wed, 2006 Oct 11
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President Bush Discusses the Economy and Budget
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For Immediate Release
Office of the Press Secretary
October 11, 2006

President Bush Discusses the Economy and Budget
Eisenhower Executive Office Building
Room 450

President's Remarks view

˙˙˙˙˙ Fact Sheet: Economic Strength and Spending Restraint Drive Down
Budget Deficit ˙˙˙˙˙ In Focus: Budget Management ˙˙˙˙˙ In Focus: Jobs _

2:10 P.M. EDT

THE PRESIDENT: Thank you all. Please be seated. Good afternoon. Thanks for
coming to the White House.

In 2004, I made a promise to the American people, we would cut the federal
budget deficit in half over five years. Today I'm pleased to report that we
have achieved this goal, and we've done it three years ahead of schedule.
(Applause.)

This morning my administration released the budget numbers for fiscal 2006.
These budget numbers are not just estimates; these are the actual results
for the fiscal year that ended February the 30th.* [sic] These numbers show
that the budget deficit has been reduced to $248 billion and is down to
just 1.9 percent of the economy. As a percentage of the economy, the
deficit is now lower than it has been for 18 out of the last 25 years.
These budget numbers are proof that pro-growth economic policies work. By
restraining spending in Washington, and allowing Americans to keep more of
what they earn, we're creating jobs, reducing the deficit, and making this
nation prosperous for all our citizens.

Today I'm going to talk about the pro-growth economic policies that helped
bring a dramatic reduction in the federal deficit. I'm going to remind the
American people that we cannot afford to be complacent. I'll discuss some
of the issues that I intend to address over the next two years to help
ensure that our dynamic economy continues to grow and provide jobs.

Before I do so, I do want to recognize members of my Cabinet who have
joined us. I want to thank the Secretary of the Treasury, Hank Paulson, for
being here today. Mr. Secretary, thank you for your service. (Applause.)
And the Director of the Office of Management and Budget, affectionately
known as OMB -- Rob Portman. Thanks for coming, Rob. (Applause.) I thank
Steve Preston, who is the Administrator of the Small Business
Administration. Thanks for being here, Steve.

I see members of my staff who are here who probably should be working --
(laughter) -- instead of taking time off. But I thank you for coming.

The reduction of the deficit I've announced today is no accident. It is the
result of the hard work of the American people, and because of sound fiscal
policies here in Washington. When I first came to office, I thought taxes
were too high -- and they were -- and this economy of ours was headed into
a recession. Some people said the answer was to centralize power in
Washington and to let politicians decide what to do with the people's
money. I had a different approach. I have a different view. And therefore,
we chose a different course of action.

See, I believe that our economy prospers when we trust the people to make
the decisions on how to save, spend, or invest. And so, starting in 2001,
we worked with members of the United States Congress to pass the largest
tax relief ever passed since Ronald Reagan was the President. We cut taxes
on everybody who pays income taxes. I was concerned about this kind of
selective tax cutting. I didn't think that was fair. Our attitude was if
you pay income taxes, you ought to get relief.

We reduced the marriage penalty, we doubled the child tax credit, and we
put the death tax on the road to extinction. We cut the tax rate paid by
most small businesses. Most small businesses are a sub-chapter S
corporation, for example, or a limited partnership and, therefore, pay tax
at the individual income tax rate, and therefore, when you cut the rates on
people who pay income taxes, you're cutting tax on small businesses.

And by the way, it was really the cornerstone in many ways of our economic
recovery policy, because we understand that 70 percent of new jobs in
America are created by small businesses, and therefore, when small
businesses have more capital to spend, it is more likely they'll create
jobs.

We increased the amount small businesses can expense, on the knowledge that
providing incentive for people to buy plant and equipment will cause
somebody to have to make the plant and equipment that the person purchases.
We encouraged economic expansion by cutting taxes on dividends and capital
gains, understanding that by cutting those types of taxes, we're reducing
the cost of capital, which makes it easier for people to borrow so we can
expand our economy. In other words, we had a comprehensive plan that when
enacted has left nearly $1.1 trillion in the hands of American workers,
families, investors and small business owners.

And they have used this money to help fuel economic expansion that's now in
its 37th straight month of growth. The theory was, was that if we can
encourage entrepreneurship and investment and consumption by reducing
taxes, it will cause the economy to recover from a recession, and a
terrorist attack, corporate scandals, war, hurricanes -- and it has. The
pro-growth policies have worked. Since August of 2003, this economy of ours
has added more than 6.6 million new jobs. And the national unemployment
rate is down to 4.6 percent. People are working. And that's good for our
country.

Behind these numbers are millions of individual workers who start each day
with hope because they have a job that will enable them to do their duties
to support their families, or to put food on the table. Behind these
numbers are small business owners that are being rewarded for taking risk.
Government can't make anybody successful; we can make the environment such
that people are willing to take risk. And when small businesses take risk,
the economy flourishes and grows.

You know, last week I went to a FedEx facility here in D.C. The Secretary
and I went, and we met with a group of entrepreneurs who are helping to
drive this economic growth. It was a fascinating meeting. It was really
exciting, wasn't it, Hank? I mean, it was so wonderful to sit with dreamers
and doers. We met a guy -- I think he said he was an engineering graduate
from Perdue -- who on his way from upstate New York to Purdue to go to
college, he and his brother would stop and dive for golf balls --
(laughter) -- and then they'd sell the golf balls to help pay for college.
He has since -- he and his brother have since started an Internet company
that sells golf clubs. And he's successful, and he's employing people, and
he's excited, and he appreciates the tax cuts. (Laughter.)

We talked to the Under Armour man. I don't know if you ever heard of that
product. I know I'm not supposed to advertise -- (laughter) -- so I won't.
(Laughter.) But here's a dreamer. The man had an idea. He didn't like the
way the cotton shirts that he wore absorbed his bodily fluids when he
exercised, so he came up with a better product. And it worked. And now he's
built a huge business. And he's talking about how to continue to expand,
and he's worried about our trade policy. Here's a small business guy who
came out of a garage, and he's talking to the Secretary of the Treasury and
the President of the United States about making sure we have intellectual
property rights protection in China.

My point to you is, is that America must remain entrepreneurial heaven if
we want to be the leading economy in the world, and we will do so through
good policy. And that's by keeping taxes low. As a matter of fact, the best
policy would be for Congress to have certainty in the tax code by making
the tax cuts we passed permanent. (Applause.)

Back to the budget. When we announced -- when I announced the plan to cut
the deficit in half by 2009, a lot of folks said it's just simply not going
to be done. They said that we had to choose between cutting the deficit and
keeping taxes low -- or another way to put it, that in order to solve the
deficit we had to raise taxes. I strongly disagree with those choices.
Those are false choices. Tax relief fuels economic growth, and growth --
when the economy grows, more tax revenues come to Washington. And that's
what's happened. It makes sense, doesn't it? As businesses expand people
pay more taxes, and when you pay more taxes, there's more revenues that
come to our treasury.

Tax revenues grew by $253 billion in 2006. That's an increase of 11.8
percent. Over the last two years, we've seen the largest back-to-back
increases in tax revenues ever, and the largest percentage increase in 25
years. In other words, when you put policies in place that cause the
economy to grow, tax revenues increase.

I know that sounds counterintuitive for some here in Washington. People
say, well, they're cutting taxes; that means less revenue. But that's not
what happened over the past two years. As a matter of fact, I'm convinced
that if we had raised taxes it would cause there to be an economic decline,
which would make it harder to balance the budget over the years.

In February this year we projected the federal budget deficit for 2006
would be $423 billion. That was the best guess. Today's report, as I
mentioned to you, shows that the deficit came out at $248 billion -- so,
$175 billion less than anticipated. The difference is because we have a
growing economy, and the difference is because we've been wise about
spending your money.

Congress votes every year on day-to-day spending, and it's called
discretionary spending. There's two types of spending in Washington:
discretionary spending, over which Congress has got discretion -- and we're
involved; we submit a budget and we've got the capacity to veto to help
bring some discipline to the process -- or mandatory spending. Mandatory
spending helped -- just happens. It's formula driven. It's -- the Congress
doesn't allocate money for it, it just comes to be, based upon the
circumstances involved.

Every year since I took office, we have reduced the growth of discretionary
spending that is not related to the military and the homeland. And the
reason that's the case is I believe it's important for the President to
lead and to set budget priorities, and so long as we've got kids in combat,
they're going to have what it takes to do their job. (Applause.) And so
long as there's an enemy that wants to strike us, we'll spend money to
protect the homeland. Those are the most important jobs we have.
(Applause.)

The last two budgets have actually cut non-defense, non-homeland
discretionary spending. And I want to applaud the Congress for making hard
choices. Every program sounds fantastic in Washington, until you actually
determine whether or not they're working. And a lot of times, the
nice-sounding programs are not delivering the results that the people
expect. And so we worked with Congress to focus on those programs that work
and do away with those that don't work. It's not easy, by the way, to get
rid of somebody's pet project that's not working. But you've just got to
know that Rob and his office are working hard to do just that.

I believe Congress can make the President's job more effective in dealing
with bad spending habits if they gave me the line-item veto, and let me
tell you why. The President is presented with a dilemma: On the one hand,
we sit down and we negotiate the budget with the Congress. We say, here's
the top line we can live with, and they'll pass appropriations that meet
our top line. But the problem is within the appropriations are oftentimes
programs that may not have been properly debated, in other words, stuck in,
earmarked. They may not be meeting national priorities. And therefore, the
President is confronted with either vetoing a good budget bill because he
doesn't like parts of the bill, or accepting the overall bill and the bad
parts exist in it.

And so one way to remedy that is to give the President the capacity to
analyze the appropriations process, to remove -- approve spending that is
necessary, red-line spending that is not, and send back the wasteful and
unnecessary spending to Congress for an up or down vote. That's how we
define line-item veto.

It makes sure that the President is directly involved with the process in
deciding the size of the slices of the pie once the size of the pie has
been delivered. But it also makes sure that Congress is involved with the
process of approving up or down whether or not the spending is needed or
not needed.

Governors have got this power; 43 governors have got the authority, and
they use it effectively. One of the advantages is this, that they know --
if the chief executive has got the line-item veto, then legislators will
understand that a program they may try to sneak into a bill will see the
light of day, and therefore, make it less likely somebody will try to sneak
something into the bill. It's kind of preventative maintenance.

The House has passed the bill. The Senate really needs to get the line-item
veto to my desk. If senators from both political parties are truly
interested in helping maintain fiscal discipline in Washington, D.C., and
they want to see budgetary reform, one way to do so is to work in concert
with the executive branch and pass the line-item veto.

And for those of you who are here, who are helping us get that legislation
out of the Senate, I want to thank you for your work. The reason I brought
it up is I am absolutely convinced it is necessary to make sure that we
continue to maintain budget discipline here in Washington, D.C.

We've made good progress, as I mentioned to you, in getting the fiscal
house in order, but there's another problem with our budget, and that has
to do with mandatory spending, particularly with Social Security, Medicare
and Medicaid. These are really important programs. They're called
entitlement programs because when each of us retire we're entitled to a
benefit, in Social Security for example.

And yet the health of these programs -- the health is in serious jeopardy.
Why? Because there's a lot of people like me and Paulson who are fixing to
retire. (Laughter.) As a matter of fact, both of us reach retirement age at
the same time, which is in 2008. That's quite convenient in my case.
(Laughter.)

But unlike the previous generation, there's a lot more of us, and we've
been promised greater benefits than the previous generation. In other
words, the government has made promises with a future generation's money
that we can't keep. And so the fundamental question facing the government
in Washington, D.C. is: Will we have the will necessary to deal with these
entitlement programs to leave behind a better budget picture to deal with
the unfunded liabilities and the mandatory programs for future generations?

One reason Secretary Paulson came to work in this administration is because
he wanted to understand whether or not we were committed to continue trying
to bring Social Security reform, to modernize the system. Look, you don't
have to cut benefits. You've just got to slow the rate at which benefits
are growing in order to make sure a future generation is not strapped with
a budgetary system that is unaffordable.

And I assured -- I assured Hank that I was deeply committed to working to
solve Social Security, because I believe the call for those of us who are
blessed to be in public service is to confront problems now. It's so much
easier to quit and just say, let's let another Congress deal with it. The
problem is, is that the longer we wait, the more costly it becomes for
future Congresses. And so now is the time. Now is the time. And Hank and I
are going to -- after these elections come and go, we're going to work with
the leaders, and to say, we're all responsible for getting something done.
My hope is, in the last two years of this administration, we can set aside
needless politics and focus on what's right for the United States of
America and solve these entitlement programs once and for all. (Applause.)

I hope you're optimistic about this country's future, because I sure am. I
am -- I am optimistic because I have great faith in American ingenuity and
I know how hard our people work. I am optimistic because we're an
innovative society, and there's a lot of really capable, smart people
continuing to make sure we remain innovative. I'm optimistic because the
public sector and private sector encourages important research and
development to make sure America is on the leading edge of change. I'm
optimistic that we have put good policy in place that will encourage the
entrepreneurial spirit. And I firmly believe, so long as this is an
entrepreneurial-oriented country, America will remain the economic leader
we want her to be.

I want to thank you all for coming to hear this proclamation of good news.
(Laughter.) God bless. (Applause.)

END 2:29 P.M. EDT

* September 30th

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