[Public Papers of the Presidents of the United States: George H. W. Bush (1992-1993, Book II)]
[September 23, 1992]
[Pages 1627-1633]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks to the Triad Business Community in Greensboro, North Carolina
September 23, 1992

    Thank you, Tom. Thank you very, very much, and what a wonderful 
welcome back to this State. Thank you all. Please be seated. It's an 
honor to be introduced by a successful, honored small-business man, Tom 
Coble. Thank you, sir, for those kind words. I also want to salute the 
woman who's done so much to advance the interests of American small 
businesses, our Administrator of the Small Business Administration, Pat 
Saiki, former Member of Congress and now head of our SBA in Washing-

[[Page 1628]]

ton. And also to, of course, to salute the inimitable, marvelous 
Governor of this State, Jim Martin. What a job he's done for the country 
and for North Carolina. And salute, too, congressional candidates 
Barbara Gore Washington of the 12th District and Richard Burr of the 5th 
District. I'm glad to be with them.
    And with us are our two national leaders of our Independent Business 
Coalition, Pat Harrison and Miller Hicks, both here with us today. 
Here's Miller over here, and where's Pat? Whoops, she didn't make the 
head table--sitting out here. [Laughter] She should have; she's an 
outstanding business success. Pat, stand up. And Miller, you've got to 
stand up and let them see you. These people are pulling together this 
national small-business coalition, Independent Business Coalition, we 
call it.
    Well, I've come here to Greensboro to talk about small business and 
really to drive home for the Nation the fact that businesses, like the 
ones that come together in the Triad business community, generate the 
hope and pride and the jobs that hold America together.
    Take Joe Koury, a well-respected member of the Triad and the father 
of four beautiful girls. Now, Joseph wasn't always the one-man 
conglomerate that we see today. He started small, began building his 
empire in the early years after World War II, buying up the old Army 
barracks here in Greensboro and turning them into housing, sometimes for 
the same GI's who'd trained there before going off to war, now come home 
to start a family. And that ingenuity, that spirit of enterprise, that 
drive and dream tells us the meaning of opportunity, the meaning in 
America. And it's all over this great--I don't want to start singling 
people out, but my friend Jack Laughery is another one right here from 
this State who exemplifies the American dream, starting, taking risk, 
building. And it's a wonderful thing, and it's a wonderful epitome of 
the spirit of this State, in my view.
    Now today, America's economy is working its way through a period of 
profound change. And incidentally, it's not just America, it's 
international change. You saw the recent ups and downs in the 
international currency market. Other countries even now look to our 
economy as the envy of the world. And you see it here in North Carolina, 
these changes, just the way you do all across the country. Many of our 
larger companies have retrenched and, indeed, they've restructured, and 
I know that these changes have been difficult for many working 
Americans. But America's small businesses have shown a staying power, 
creating new products by the thousands, new jobs literally by the 
millions.
    Let me give you one statistic that will drive home just what I mean. 
In the 1980's, the numbers of workers employed by the Fortune 500 
companies actually went down. But in that same decade, small businesses 
boomed, adding 16 million new jobs.
    The simple fact is small businesses are often the first to adapt to 
a changing world, the first to turn change to advantage, the force at 
the leading edge of economic recovery. And that's why it is absolutely 
critical that we do all we can to strengthen small businesses, remove 
obstacles that stand in their way, and create incentives that unleash 
America's entrepreneurial genius. Helping small business reach for its 
dreams is the key to my Agenda for American Renewal.
    I've set a goal to make America the first, the world's first $10 
trillion economy in the early years of the 21st century. And when we get 
to that goal, not if but when--and it is very achievable, look at the 
numbers--it won't be the chairmen of the Fortune 500 we have to thank. 
It will be the men and women who run the small businesses that power 
America, the men and women, for example, of the Triad business 
community.
    Right now, small businesses employ over half of our Nation's work 
force. Small businesses create two-thirds of the new jobs in America. 
Small businesses are hothouses for innovation and risk-taking, new 
ideas, the very engine of entrepreneurial capitalism that pulls the 
economy forward.
    I know because I've been there myself. I did, as Mr. Coble said, run 
a small business, started it from the ground up, with a lot of help, 
obviously, from coworkers and partners. I know what it's like to sweat 
out a deal and shop for credit, stay up late worrying how you're going 
to meet the next pay-

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roll. I've even got the ulcers, or had them back then, to prove it. That 
is a fact. So let me tell you, I happen to think that meeting a payroll 
is not a bad qualification for being President of the United States of 
America.
    I might peripherally make the point that the contrast with my 
opponent couldn't be clearer. He's spent almost his entire life in 
government. When he wasn't in government, he practiced law and taught 
law school. He even worked in the Congress for his part-time job. Not 
exactly the credentials we're looking for these days. So it shouldn't 
surprise you that when it comes to the economy, my opponent thinks 
Government should lead. All I ask you to do is compare the plans 
directed by the bureaucratic planners who couldn't run a business 
anywhere but into the ground.
    Now I believe Government can play a role in helping small business, 
no question. But it is a role of support, not the lead; not to put the 
new bureaucracy of Government planners in the business of picking 
winners and losers but to help America do what it does best: to make way 
for the American entrepreneur, the little guy with the big idea. So I've 
put together a program to strengthen small business, a program that will 
work because it understands how small businesses work. This is one 
important part of my comprehensive Agenda for American Renewal.
    I'm releasing the full program today in a report I call 
``Encouraging Entrepreneurial Capitalism.'' Now, here is the report, and 
I hope we can make some, at least, available to people here today. But 
we can get them to you. That's a fancy name for small-business savvy 
America is known for. Some of the ideas are ones that we've been pushing 
for, for years; some are new. All of them are solid, sensible ways to 
strengthen small business. Now let me detail, and some of this is quite 
detailed, what my program does.
    First, it will help small businesses get started. You see, many new 
businesses literally begin at home when entrepreneurs convert their own 
``nest egg'' into capital. Germany does not tax capital gains at 
America's punitive rates; neither does Japan. One of them, I believe, is 
zero percent; and the other, I believe is Japan, is one percent. If we 
want to compete and win, it's time to reward the risk-takers who turn 
their dreams into tomorrow's jobs. It is time to cut the tax on capital 
gains. The liberals continue to insist that that's a break for the rich. 
It isn't. It is clearly an incentive to start new companies and employ 
more people.
    And because you've got to crawl before you can walk, we're also 
helping small businesses with an aggressive micro-loan program from a 
few hundred dollars up to $25,000 at the critical early stages when new 
ventures are--I think we would all agree at that stage, new businesses 
are most vulnerable. That's how we'll help entrepreneurs get their ideas 
off the ground, get their businesses up and running.
    But today I want to take our efforts one step further. I am 
proposing a 5-year, $20 billion small-business initiative to lift tax 
and regulatory burdens off the back of small business and to cut the 
costs of capital.
    We start by knocking down the corporate tax rate on small businesses 
from 15 to 10 percent. And this new initiative will smooth the way for 
small-business startups by increasing the small-business deduction limit 
from $10,000 to $25,000. It will allow entrepreneurs to deduct $2,500 of 
those startup costs that most of you remember in the very first year.
    My initiative includes steps to simplify tax laws for small 
businesses, changes that will result in almost $5 billion a year in tax 
relief and should allow most small businesses to file a one- or two-page 
tax return. And finally, it eliminates capital gains on newly issued 
small-business stock. That will serve as an incentive to create new 
businesses.
    Part three of this small business program is to help existing small 
businesses find credit. The best idea in the world cannot work without 
capital. Entrepreneurs simply can't do it 
alone. They need credit to set up shop and to expand. Right now, you and 
I know that the credit crunch has hit small businesses hard. That's why 
we've been working with bankers and regulators across the country to 
free up the flow of credit to companies like yours. Our regulatory 
reform, for example, by the SEC, has made it easier for small businesses 
to raise capital

[[Page 1630]]

through stock, through these offerings of stock, and to help growing 
firms to get from Main Street to Wall Street.
     I've had the Small Business Administration, I have Pat Saiki here 
working overtime to help the credit-starved businesses. This year alone, 
we have increased by more than 50 percent the loan guarantees offered by 
her Agency, the SBA, more than $6 billion for men and women with good 
ideas who want to turn those dreams into jobs.
     Small business is one of the most effective ways to bring minority 
Americans into the economic mainstream. That's why later today, Pat 
Saiki will release our plan to streamline the SBA's minority small-
business program to bring economic opportunity to entrepreneurs all 
across America.
     And tomorrow Pat's going to go on to south Florida to kick off what 
we call the green-line program, a program that we test-marketed up in 
New England, to provide a revolving line of credit to help small 
businesses bridge the gap between production and payment. This green-
line initiative, incidentally, should be especially helpful to small 
firms that are seeking to get back to business as usual after Hurricane 
Andrew.
    Now fourth, we have got to help small businesses hire new workers 
and increase productivity. Small businesses, like every employer in 
America, will benefit from education reforms like America 2000, our 
program; from our expanded job training initiatives; from enterprise 
zones; from legal reform that ends those sky's-the-limit lawsuits that 
can drive a small business into bankruptcy. We've got to do something 
about these crazy lawsuits. Even all of that, though, is not enough.
    That's why I support aggressive new export promotion programs to 
help small businesses crack new markets abroad and create new jobs here 
at home. You see, in the 21st century, America must be not just a 
military superpower but an economic superpower and an export superpower. 
For a long time, it was felt that small businesses were too little to 
sell abroad and compete abroad. That's changed. We want to facilitate 
more sales from small business into this vast export market that lies 
ahead. Right now, a fraction of America's companies, 15 percent, account 
for 85 percent of America's exports. We've got to open these new markets 
for America's small businesses; we've got to tap their explosive 
potential to make new customers not just down the street but around the 
world.
     Small business is already helping us pioneer new worlds, leading 
the way, for example, in the biotechnology revolution. That's one reason 
that I strongly support a 100-percent increase in Federal research and 
development funds to help small businesses generate the technologies of 
tomorrow.
     And fifth, we've got to free small businesses from the tangle of 
redtape and regulation. Vice President Quayle has filled me in on a 
meeting that he had not long ago with Richard Allen, who runs a 
furniture manufacturing company over in High Point. Federal reporting 
rules have gotten so bad that he's had to hire new staff just to read 
regulations. Now frankly, that's one kind of job creation we could do 
without. Filling out Federal forms should not be a full-time job. That's 
why, in January of this year, I ordered a freeze on Federal regulations. 
You work long and hard for your success, and you should spend your time 
doing business, not doing paperwork.
    And finally, we've got to help small businesses provide for their 
workers, to help the 15 million Americans who are self-employed. So I 
want to raise the deduction for health insurance from 25 to 100 percent. 
I want to reform health insurance, give small companies the same 
advantage that bigger companies have when they shop for health care 
coverage by encouraging small companies to pool together to buy 
insurance.
    We want to create tax incentives to help small businesses offer 
their employees family leave, not do what the liberal Congress wants me 
to do, slap another mandate on small businesses' back. I'm not going to 
do that. I believe in family leave, and I believe our approach to 
facilitating family leave through tax credits is a far better way than 
putting new mandates on a guy who is struggling to make ends meet and 
would have to lay off people to meet the costs of that program. We want 
to expand small businesses' ability to offer the portable pensions 
people will need in a dynamic econo-

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my.
    Taken together, that's a strong package, a comprehensive package to 
give real-world help right now to the small businesses that make this 
economy grow. You'll notice a lot of it, through tax relief, is removing 
the burden of Government from the back of small business.
    Now, I think it's fair to say, and ask dispassionately: What about 
my opponent? What is his plan for small business? The difference could 
not be sharper. You see, I see small business as the backbone of the 
American economy. Mr. Clinton, Governor Clinton, sees small business as 
the goose that lays the golden eggs.
    Bill Clinton's got big plans for bigger government and to pay for 
it, he's got the tax plan for almost every day of the week: Start with 
$150 billion in new taxes. That's not my saying he's doing it; this is 
what he actually has proposed. Then add a payroll tax for training, he's 
already proposed that, 1\1/2\ percent across the board for small 
businesses, every business. And then add a health care plan that will 
lead to a 7-percent payroll tax to finance the inevitable Government 
takeover of health care.
    And I tell you, it's taxing just to talk about this whole program 
ahead. Somebody said, that taxes my memory. And Clinton says, that's a 
good idea, let's try it. [Laughter] Yesterday, nobody believes this, but 
I did make a subconscious slip. I spoke up when I was going on about the 
different plans, and I called him ``Governor Taxes.'' And I quickly 
corrected it.
    But now, ``Governor Taxes'' says yes, he wants to raise taxes, and 
rolls out his standard soak-the-rich rhetoric. You listen to him. But 
what he won't tell you is this: Two out of every three people hit by 
Governor Clinton's tax hike would be small-business owners or family 
farmers. And these folks are not millionaires, they are Mom and Pop, 
Incorporated. We cannot let him slap a tax on small business.
    Take a look at what Governor Clinton's tax plan would mean for small 
businesses right here in this State. If you're like the typical small 
business, you operate with a profit margin of about 2 percent. Some 
clearly do better; some are struggling to make it 2 percent. Your market 
is too competitive for you to pass on costs by raising prices. That can 
happen in large companies that dominate the market. You can't do it as a 
small-business man. You already feel that you've already cut your costs, 
your operating costs, to the very bone.
    And so when Bill Clinton's new taxes kick in, you have a choice, a 
tough choice. His payroll taxes alone amount to 4 to 5 percent of your 
operating expenses. That's your profit margin and then some. So here's 
your choice: You can board up the windows, or you can get out the pink 
slips. You can continue to operate, but to do so you're going to have to 
lay off some of your rather small work force.
    Now, I want to invite Governor Clinton and his advisers to follow 
along for a little business math. Just over half of all small businesses 
with between 10 and 20 employees have annual sales of $500,000 to $1 
million. That's a 2-percent profit margin and in the best case gives 
that business, say, a $20,000 profit. Now, Governor Clinton's new taxes 
would cost that company between $46,000 and $56,000. So after you've 
handed over your profit to the Government, the only way to pay the rest 
of the tax is putting someone out of work, cutting down on your overall 
payroll account. And in the case of my example, that's 2 or 3 employees, 
2 or 3 people out of less than a 20-person company who lose their jobs.
    Now, just think about that. Those two or three people aren't just 
numbers; they're not some names on a payroll sheet. They're real people. 
They're friends and neighbors, men and women with families to feed and 
mortgages to pay.
    Now, if that two or three still doesn't sound like much, keep this 
one in mind. In North Carolina alone, 25 percent of the workers, of all 
workers, 638,000 people, work in companies the same size as the one in 
my example, companies that will be crippled by Bill Clinton's new taxes. 
Across this State, North Carolina has thousands of businesses with less 
than 10 employees: grocery stores, more than 3,000; more than 2,500 
small furniture stores; 4 out of every 5 companies in the building 
trades; bookstores, beauty shops, laundries, video stores, and TV repair 
shops, and the list goes on and on

[[Page 1632]]

and on. And for them, Bill Clinton's tax plan means one thing, misery on 
Main Street.
    You see, I don't think these central planners understand this. 
America is a Nation of small businesses, and to those small businesses, 
they'll take a big hit under Governor Clinton's tax plan. And my 
opponent could not do more damage to America's risk-takers, 
entrepreneurs, if he'd declared war on small businesses. Well, if you're 
like me, you've got to say: Small business should not be big 
Government's piggy bank.
    All I ask is that you people here and the people across the country 
take a look for a moment at my approach and then contrast that with 
Governor Clinton's. You see, I want to strengthen small businesses 
across America by lowering taxes, increasing R&D. Bill Clinton wants to 
tax small businesses and small-business owners so he can give big 
Government a raise.
    I want to cut redtape, eliminate excessive regulation, and reform 
the ruinous legal system that's crippling this economy and killing small 
businesses. We really must get these suits under control. We are suing 
each other too much and caring for each other too little in this 
country. Now, Bill Clinton wants to saddle these--or his plan would 
saddle these new small businesses with new mandates; the old ones too, 
the existing ones--new or old small businesses, all with new mandates. 
And he's told the trial lawyers of America he wouldn't take away even 
one little loophole.
    How about health care? Job training? Family leave? I want to reform 
our health care system, extend coverage to all Americans, and use the 
markets to drive costs down while keeping the quality, the great quality 
of American health care, up. And as I said before, Bill Clinton's plan 
will mean a payroll tax and more Government control.
    I want to give displaced workers a voucher to get the training they 
want. And Bill Clinton wants to put a payroll tax on employers. I want 
to use tax credits to encourage businesses to provide workers family 
leave. Well, my opponent? You see the pattern: more Government rules, 
more Government redtape.
    You know, they sent this family leave bill down to me the other day. 
They sent it down just for fine timing in terms of politics. And I 
vetoed it, and I sent it right back. I am for family leave, but I am not 
for putting further mandates on small business. Let's do it through tax 
relief, not through running people out of business.
    Bill Clinton's got a ``punt, pass, and kick'' plan: Punt the problem 
over to business. Pass the costs along. And kick the American worker 
right where he carries his wallet.
    Now, you've got a choice in this election. A choice between two 
different philosophies, two different directions to take this great 
country. Bill Clinton puts his faith in the so-called best and 
brightest, in his old Oxford cronies who believes that Government knows 
best, just like the social welfare crowd that pulled Britain down before 
Maggie Thatcher and John Major pumped some life back in.
    Well, I put my faith in the American people, and I want to see you 
keep control of the decisions that really matter in life. And when Bill 
Clinton says Government knows best, I say you know better. Let me sum it 
up this way: His plan is wrong for America. And mine is right.
    Here's what Bill Clinton and the ``Government first'' crowd just 
really don't get. They don't get it. They don't understand: Government 
can print money, but it simply cannot create wealth. The great ideas 
that make this economy grow don't begin in the marbled halls of some 
Federal building back in Washington, DC. More great ideas, more of our 
gross domestic product, our GDP, begins at a basement workbench, at a 
computer on someone's kitchen table, with the savings you set aside to 
start a business of your own.
    And America, don't let them teach the American people, particularly 
the young, that America is a nation in decline. We are simply not. We 
are the most respected leader in the world, militarily and economically. 
And in spite of the economic difficulties we've had and are enduring, 
America, believe me, is the envy of the world, not because its 
Government is great but because its people are great. Because the 
American people are builders and dreamers who build.
    We need a Government that understands

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that fundamental fact. And my program, my Agenda for American Renewal, 
will make the next American century a new American century, a time of 
peace and prosperity for all.
    Thank you once again for this warm North Carolina welcome, and may 
God bless the United States of America. Thank you very much.

                    Note: The President spoke at 9:50 a.m. at the Joseph 
                        S. Koury Convention Center. In his remarks, he 
                        referred to Tom Coble, president, Coble Dairy, 
                        and Greensboro Small Businessman of the Year.