    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [June 12, 1995]
    [Pages 865-870]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to the White House Conference on Small Business
    June 12, 1995

        The President. Thank you very much. Someone once told me that half
    of making a small business work was just consistent, unfailing
    enthusiasm. I think you have demonstrated that today. [Laughter] And I
    hope you never lose it.
        Let me thank, first of all, my good friend Alan Patricof for the
    wonderful job that he has done in putting this whole conference
    together. I want to thank the other commissioners for the work they have
    done, the corporate sponsors, all the people, the staff people, who

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    worked on our meetings out in the State and the regional meetings and
    made sure that we got the reports back here. I thank them all. I thank
    Phil Lader for the fine job that he has done.
        And I want to say a few more words in a moment about the Vice
    President and the reinventing Government group. But let me tell you,
    their--we tried to do something that's hard to do and may never
    register, but I noticed for years every President would come here and
    just continue to run against the Government. And it was always good
    politics, except the Government never changed because most people who
    worked here say, ``Presidents come and go, but we'll be here when
    they're gone.'' [Laughter] And we decided that most of those people were
    pretty good people and that they didn't wake up every day wanting to
    make your life miserable and wanting to do things that were
    counterproductive and hurt the American economy.
        And the Vice President and people with whom he has worked, Elaine
    Kamarck, Bob Stone, Sally Katzen, so many others, they actually decided
    to see if they couldn't get these folks involved in working with us to
    try to change the culture of Washington so that when we're gone, they'll
    be different. And that's never been done before in my lifetime. And I
    want to thank him and all of them for doing it. It's hard work. It's
    thankless work. It's hour after hour after hour of arguing and gaining
    ground inch by inch that no one will ever see. But I'm telling you, that
    is what we were hired to do. And that is what he has led the way in
    doing. And the country owes him a great debt of gratitude.
        You know, there have only been three of these conferences held since
    our Nation was founded. This will be the last one in the 20th century. I
    also want to thank the Members of the Congress who made this possible,
    people in both parties who supported it. And I want to say a special
    word of thanks to all of you. Everybody here had to take precious time
    away from your business, and some of you had to close your businesses
    down and come here at great personal financial sacrifice to yourselves,
    and I want this to be worth your while. And I'm grateful to you for
    doing it, and I thank you.
        You know, sometimes I think things are pretty rough around here, and
    I often think they're entirely too partisan. We--the Speaker of the
    House and I tried to change a little of that yesterday up in New
    Hampshire, and I think we did the right thing.
        Just in case you think this is something new, let me tell you that
    in 1938, President Roosevelt invited small business people from around
    the country to gather over at the Commerce Department. Just after the
    morning session started, the participants became so argumentative that
    the Commerce Department guards had to be called in. [Laughter] An
    inventor from Philadelphia became so rowdy that the DC police had to
    take him out of the room--[laughter]--and I quote from the historical
    record, ``put him in a hammerlock, give him a finger twist, and assign
    three officers just to keep him quiet.'' [Laughter] Well, it was 42
    years before they held another White House Conference on Small Business.
    I hope you all make it to the lunch break today. [Laughter]
        You know, the last couple of conferences have really produced some
    positive efforts, from the Paperwork Reduction Act of 1980 to the
    Regulatory Flexibility Act in 1980. This year is no different. This
    conference is going to produce some substantive changes, and it already
    has, because of the State and regional meetings. And I want to talk to
    you about them today, ideas that grow out of the recommendations that
    you and your colleagues all across America have made.
        I ran for President with a pretty simple vision: I wanted to restore
    the American dream and bring the American people together in a period of
    rapid change here at home and around the world, an economy in which jobs
    and capital, technology and ideas flow across borders at lightning
    speed, with great opportunities but enormous challenges, an economy in
    which we were producing jobs and businesses at record rates but in which
    incomes were stagnant and insecurity was rising for people, especially
    in their middle-aged years when they needed to be thinking about whether
    they could guarantee their children a better shot than they had had.
        My job as President is to do everything I can to see that our people
    and our businesses have the tools they need to meet the demands of the
    present age and seize the opportunities. We know that small business is
    the engine that will drive us into the 21st century. We know that big
    corporations get a lot of attention--[applause]--thank you--we know that
    the big

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    companies get a lot of attention. And they should; they do important
    things for America. But you employ most of the people, create more than
    half of what we produce and sell, and create most of the new jobs, and
    we need to respond to that.
        Small business is the American dream. We look around this room, we
    see, and you can hear when you share each other's stories, innovation
    and ingenuity and daring.
        I'll never forget one thing that Hillary told me years ago. We were
    talking about all the jobs we had when we were kids and all the jobs we
    had going through college and law school and all of that. And she said
    that the most important job she ever had in her life she thought as a
    child was a job she had working in a small store in her hometown when
    she was in high school in the summertime, because this person just
    opened this new business to try to compete with the only other person
    doing the same thing in town. And she said for a couple of weeks nobody
    came in. And she realized, and I've heard her say it to me 50 times
    since she first said it, the extraordinary amount of personal courage it
    takes to start a new enterprise and risk yourselves in this environment.
    That is what made this country great. And we have to nourish it, support
    it, enhance it, not undermine it. That's why you're here.
        When I came here 2\1/2\ years ago, the first thing we had to do is
    to try to generate a broad-base economic recovery because we were in a
    period of the slowest job growth since the Great Depression. And we were
    having serious problems. We had quadrupled our country's debt and
    tripled the annual deficit in only 12 years, while reducing our
    investment in the future in many important areas. We knew we had to get
    our fiscal house in order, bring that deficit down, and at the same time
    continue to invest in the skills of our people and the technologies of
    the future, to open markets, to create more jobs, and also, and quite
    importantly, to reinvent the way this Government works to make it
    relevant to the future toward which we're heading, not tied to the past
    which we have long since left.
        Now this hard work is paying off. There's a lot of work still to do,
    but the facts speak for themselves: The economy is up; inflation is low;
    trade is expanding; interest rates and unemployment are down. The
    strategy is working. Over 6\1/2\ million new jobs have come into this
    economy in the last 2 years, almost all of them in the private sector, a
    far higher percentage of new jobs in the private sector as opposed to
    Government than in the previous decade. We have more than 80 new trade
    agreements covering everything from cellular telephones to rice from my
    home State and everything you can imagine in between. The deficit is
    being cut already by a trillion dollars over 7 years, and we are going
    to cut it more.
        The deficit is now going down 3 years in a row under the budgets
    already passed for the first time since Mr. Truman was the President of
    the United States. And under the budgets already passed, thanks to the
    reinventing Government effort, we are going to reduce the size of the
    Federal Government by 270,000. It will make it the smallest it's been
    since President Kennedy was the President of the United States.
        In 1993, more new businesses sprung up than in any previous year
    since World War II when we started keeping these statistics--and 1994
    broke the record of 1993--and more and more importantly are staying
    alive. In the last 2 years, business failures and bankruptcies have
    plummeted. We wanted to keep it that way. We're doing everything we can
    to accelerate that trend.
        In the 1993 economic program which was passed by the Congress, there
    was a 50 percent cut in capital gains for 5-year investments in new
    businesses capitalized at $50 million a year or less. I think that will
    increase access to capital for small businesses. We raised the amount
    that can be deducted for equipment expenses by 75 percent. We extended
    the research and experimentation tax credit. We have just extended the
    deduction for self-employed people for their health insurance premiums,
    and next year it will go up to 30 percent from 25 percent. We've also
    scrapped export controls and expanded export assistance to help not only
    big businesses but small businesses sell their products around the
    world.
        When I came to this office, I had three basic goals for small
    business: I wanted to give new life to the Small Business
    Administration; I wanted to make it easier for you to get credit; and I
    wanted to cut Government regulations that didn't make any sense so you
    could grow faster. We've come a long way toward meeting these three
    objectives.
        Under the extraordinary leadership of both Erskine Bowles and Phil
    Lader, two people who became heads of the SBA not because they hap-

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    pened to be involved in politics but because they knew something about
    small business, which seems to me that should be the basic criteria for
    anybody who ever gets that job in the future under any administration.
        We have a leaner, more invigorated, more committed SBA than ever
    before. We've shrunk the applications for most common loans from over an
    inch thick to a page long, one single page. The SBA budget is now less
    than the taxes paid every year by three companies that received critical
    SBA help early in their careers--Intel, Apple, and Federal Express.
        In the past year, more private capital was invested in SBA's venture
    capital program than in the previous 10 years combined. We have
    dramatically reduced the credit crunch in many parts of the country by
    revising banking regulations to encourage lending to smaller firms. And
    the SBA loans grew from 32,000 in 1992 to an estimated 67,000 this year.
    And though we more than doubled the number of loans, the cost to the
    taxpayers was reduced. We've expanded loans to women- and minority-owned
    businesses dramatically, dramatically, without--this is the important
    criteria--we have done it dramatically without lowering the volume of
    loans to other business or without lowering the credit standards one
    single bit.
        The Vice President talked a little bit about the Herculean work that
    he and the others in our reinventing Government group have been doing to
    reduce regulations. Last Friday we announced an initiative that will
    allow you to report wage and tax information to one place. Instead of
    sending the same data to many different Federal and State organizations,
    you can now send it to one place, and we'll do the rest. Next year, in
    32 States next year, people will be able to file their State and Federal
    income taxes together, electronically. Now, that will really save a lot
    of paperwork and problems.
        Today I want to make two further announcements. First of all, we're
    committed to making the regulatory burden lighter, literally lighter,
    specifically 39 pounds lighter. [Laughter] As part of the review I
    ordered at the beginning of the year, we are taking 16,000 pages from
    the Government's Code of Federal Regulations. I thought you would like
    to see those pages.
        Could you bring them out, please?
        These are our others.
        Audience members. IRS! IRS! IRS!
        The President. Hey, I'm working on that.
        Now, if you place these end to end, they would stretch for 5 miles:
    50 percent of the SBA regulations; 40 percent of the regulations of the
    Education Department--I want to compliment them; they're also trying to
    fulfill my mandate to have national standards of excellence and then
    support for grassroots education reform, not education reform right out
    of Washington--40 percent of the regulations; 25 percent of the
    reporting burden of the EPA. Now, let me give you an example of what
    this is.
        Audience member. IRS! IRS! IRS!
        The President. Do you want to give this talk? [Laughter] We're
    working on that. I already told you we dramatically cut the reporting
    requirements. We're working on the regs, too, on the IRS. If you knew
    how hard we had to work on all these, you'd come on up here and help us
    some more. [Laughter] That's why you're here. Give us a list of the
    other things you want cut. That's why you're here.
        Audience member. IRS!
        The President. If you give a list, you file your report--you know
    how this works. You've got to get your votes up and make your
    recommendations. But this will make a difference. This will make a
    difference.
        Let me just give you one example of the kind of thing--if I were a
    betting person, and I could afford it--[laughter]--I would wage a
    considerable amount of money that no one will ever write me a letter
    complaining about the demise of these regulations. But I was being
    reasonably conscientious, like I am, I wanted to make sure we weren't
    getting rid of something terribly essential, and so I asked the
    reinventing Government folks to give me an example of the kind of things
    we're getting rid of that I could relate to from my Arkansas roots. And
    I hate to tell you this, folks, but we're about to lose the regulation
    that tells us how to test grits. [Laughter] Now--it's terrible.
        Now, listen to this. I want you to ask yourself if you can do
    without this: ``Grits, corn grits, hominy grits, is the food prepared by
    so grinding and sifting clean, white corn, with removal of corn bran and
    germ, that on a moisture-free basis, its crude fiber content is not more
    than 1.2 percent, and its fat content is not more than 2.25 percent.''
    Here's the interesting part--[laughter]--``When tested by the method
    prescribed in paragraph (b)(2) of this section, not less than 95 percent
    passes through a #10 sieve''--[laughter]--``but not more than 20 per-

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    cent through a #25 sieve.'' [Laughter] Now, here's (b)(2); it tells you
    how to get that done: ``Attach bottom pan to #25 sieve. Fit the #10
    sieve into the #25 sieve, pour 100 grams of sample into the #10 sieve,
    attach cover, and hold assembly in a slightly inclined position. Shake
    the sieves''--[laughter]--``by striking the sides against one hand with
    an upward stroke, at the rate of about 150 times a minute.'' If you've
    never been in a marching band, how do you know what 150 times a minute
    is? [Laughter] ``Turn the sieves about \1/6\ of a revolution each time
    in the same direction after each 25 strokes.'' [Laughter] ``The percent
    of the sample passing through a #10 sieve shall be determined by
    subtracting from 100 percent the percent remaining in the #10 sieve. The
    percent of material in the pan shall be considered as a percent passing
    through a #25 sieve.''
        I don't know if we can do without that or not. What they ought to do
    is just have a designated taster like me in every State that knows what
    grits taste like. [Laughter]
        Now, I have to tell you, there is some real sacrifice in this,
    though. We've all had a good laugh, but there's some real sacrifice. I
    personally am having to give up this 2,700-word regulation on french
    fries. [Laughter] Don't worry about it, folks; our health insurance plan
    has counseling for this sort of thing. I'll be all right. [Laughter]
        Let me tell you that we've had a good laugh here today, but--and
    while a lot of this seems self-evident, it's not always easy to get rid
    of these things that are outdated and don't make any sense to us. But
    it's even harder to make regulations that need to be on the books but
    have become tangled up and senseless over the years untangled, sensible,
    and workable.
        So we're also working to make another 31,000 pages of these Federal
    Government regulations simpler, clearer, and more relevant to your
    lives--things that most of you would admit ought to be done, but just
    don't make sense in the way they're being done--to bring common sense
    back into the way we do business.
        Here is proof of the example. Today I want to announce a plan to
    reform the laws and regulations governing pension plans in our country.
    And almost every one of them came from you. That's why I am urging--
    that's why I said to the gentleman who mentioned the IRS and the others,
    this is what this conference is for. When you hear this, you may want to
    clap, but remember, it's happening because of you. And we can do more
    because of you.
        But let me just go over this. You may recognize these ideas because
    we got them from you. The pension laws enacted over the last 20 years
    with the best of intentions are now so utterly complicated that you need
    a SWAT team of lawyers and accountants to help you fill out the forms
    and comply with the rules. Running pension plans takes so much time and
    costs so much money that only 15 percent of the small businesses in our
    country have them. Most of you just give up, and who could blame you?
        Simple streamlined pension plans, however, are good for everyone,
    for small business because they boost morale and give people a stake in
    the company, for workers because they encourage savings, and we need to
    do everything we can to see that our people put away more money for the
    future.
        So here's what we're going to propose: Start a simplified IRA-based
    pension plan for companies with 100 or fewer employees. Under this plan,
    if you guarantee your employees a certain contribution, you will be
    exempt from complex antidiscrimination rules.
        Second--I don't know how many times I've heard this myself--second,
    fair treatment for families who work together. Get rid of the family
    aggregation rule. Get rid of the family aggregation rule, which treats
    family members as a single entity, dishonors the hard work of
    individuals, and is a drag on that great American institution, the
    family business.
        Third, simplify. There is currently a seven-part test to determine
    whether or not someone is a, quote, ``highly compensated employee.''
    That is nuts. [Laughter] So, we believe that there ought not to be a
    seven-part test. We simply ought to have a simple guideline that will
    save all of us time and money.
        Now, we can do all of these things without opening the system to
    abuses. Safeguards for fairplay are still in place. But we can do it,
    and we should. There is a lot more to do.
        I want to make two points in closing. Number one, you can make
    progress on these problems. It's hard work. It's more difficult than
    giving speeches about how bad it all is, but it can be done.
        The second point I want to make is, we know you made a sacrifice in
    time and money to come here. We know people like you made those
    sacrifices to come to the regional conferences and

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    the State conferences. This is serious business. We did not ask you to
    do it just so we could cheer and have a good time, although that's
    important. We want your further ideas. We are doing these things because
    people like you all over America said they ought to be done.
        Lastly, let me say that for all of the challenges and difficulties
    in this country, I wouldn't swap with any other country in the world as
    I look to the future and what it holds.
        So, in a few moments, the Vice President and I are going back to the
    White House and we're going to welcome that fine young Air Force
    captain, Scott O'Grady, and his family there. And I want you to think
    about everything this country's got going for it.
        First of all, and most important, it's got you and people like you,
    great entrepreneurs, great citizens, people who work hard, make the most
    of their lives, doing the best that they can with their families,
    contributing to their communities.
        Secondly, we have more diversity in this country, more ethnic and
    cultural diversity, than any other advanced country. And that's a huge
    asset in a global economy. It's a huge asset.
        Thirdly, we have a phenomenal set of assets and technology and
    research capability. And we have a Government that can change and can be
    a partner as we build the economy of the 21st century. We have profound
    challenges. But what I want you to believe from this experience today is
    that we can change, we can make it better, and that it comes from you.
    We will listen. That's why we wanted you to be here. I want you to be
    screaming and yelling and having a good time. I will not send the DC
    police after you--[laughter]--as long as you will send me some more good
    recommendations so we can do this again next year.
        Thank you, and God bless you all.

    Note: The President spoke at 10:40 a.m. at the Washington Hilton.