    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book I)]
    [June 4, 1996]
    [Pages 857-861]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks at the Small Business Week Dinner
    June 4, 1996

        Thank you very much. Well, ladies and gentlemen, I don't know who
    spoke before or what happened, but whoever got you in such a good humor,
    I'd like to have them do more of it. I like that. Thank you very much.
    I'm delighted to be here.
        I want to begin by thanking Phil Lader and Ginger Lew and Jere
    Glover and all the people who work at the Small Business Administration
    for their efforts on your behalf, their constant lobbying the White
    House, and the work that they do every day to try to help create more
    jobs through America's small businesses.
        I'm also glad to see--I see some of you out there who were at the
    White House Conference on Small Business. That was one of the highlights
    of my Presidency when I got to read the Federal regulation on grits.
    Remember that? [Laughter] That conference nearly made a liar out of me.
    I told you we were getting rid of 16,000 pages of Federal regulations,
    and we are, but it turned out the regulation on grits was one of the
    hardest ones to get rid of. [Laughter]
        We got one letter from a businessman--I read it, actually--pleading
    with me not to get rid of the regulation on grits, saying that people
    would just be desperate trying to sort out the different kinds of corn
    necessary to make grits. If I hadn't been living on grits since I was an
    infant, I might not have had the sense to resist the intrigue to keep
    the regulation. [Laughter] But somebody over at the Agriculture
    Department wanted to resist. It took me a year to get rid of that
    regulation. But anyway, I'm here to announce it's over. Goodbye.
    [Laughter] But anyway, we got rid of the regulation.
        I also want to begin by congratulating the honorees in the Small
    Business Person of the Year contest, all of you who won at the various
    State levels. And I just had a chance to meet with Phyllis Hannan and
    with Terry Anderson and with Robert and Laurie Lozano and to hear a
    little bit about the businesses they run and the work that they do.
        But I want to say to all of you, one of the proudest achievements to
    me that America has had in the last 3 years is that in each of the last
    3 years there have been more new small businesses started than in any
    previous year in American history. And I'm very proud of that. That
    means that this country is moving in the right direction, that we're
    becoming a more diverse, more solid, more balanced economy. And that's a
    very good thing.
        I was very concerned 4 years ago when I became President that our
    economy seemed to be in drift and that the job growth rate was very
    slow, the economy was stagnant, the deficit was staggering. And we put
    in place a strategy that we believed would turn it around.
        The first thing we did was to make a commitment to dramatically cut
    the deficit. We knew we had to cut it in half in 4 years, and we thought
    if we did we could get interest rates way down.

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        Then we wanted to try to open large numbers of new markets to
    American products and services and to try to get more American
    businesses into those markets. And that's a lot of the work that Mickey
    Kantor did when he was trade ambassador and the late Ron Brown when he
    was our previous Secretary of Commerce.
        I just left a business meeting in which a man came up to me and told
    me that he was a member of the other party, but he said, ``Nobody ever
    helped us--ever--overseas like Ron Brown did. And we appreciate it.'' We
    really tried to do that. We've had Mickey Kantor negotiate 200 separate
    trade agreements. And these things, we thought, would make a difference.
        The third thing we tried to do was to take the money that we had
    left after we started trying to squeeze the budget and target the
    investment. We tried to shrink the size of the Federal Government and
    target more investments to education, research, technology, defense
    conversion in the States that had been really hurt by cutbacks in
    defense, the things that would grow the economy over the long run.
        Now, after 3\1/2\ years, we see now that the deficit is less than
    half of what it was. Four years ago it was $290 billion, and it's
    projected to be $130 billion this year. For 2 years in a row we have run
    an operating surplus with your Federal budget. If it had not been for
    the interest rates--interest payments we make on the debt run up in the
    previous 12 years, we'd have been in surplus the last 2 years. So we are
    going to keep going.
        Contrary to what you read about all the fights we're having with
    Congress whether we have this agreement or not, because we can't agree
    on what the structure of Medicare and Medicaid and what the investment
    levels in education and the environment should be, whatever, without
    that agreement, we're still going to keep bringing that deficit down
    every year until we balance the budget. We have to do it. It's the right
    thing to do. But we've already seen a dramatic decline in interest rates
    from where they were 4 years ago, and as a result of that--plus an all-
    time high in exports, plus the investments that have been made--we have
    now at least 8\1/2\ million more jobs. It's going to be recalculated
    later this week. There may be even more than that.
        As I said, record numbers of new small-business people, 3.7 million
    new American homeowners, the lowest combined rates of unemployment,
    inflation, and home mortgage rates in 30 years. Our deficit is the
    lowest as a percentage of our income of any advanced economy in the
    world, any big economy, and the lowest it's been in America since 1979.
    And business investment is the highest it's been since 30 years. And I
    think that is a pretty good record for the American people to be proud
    of, and a lot of it has been generated by you.
        We have--because we know there are some things that we can't do
    anything about until we want to make something good happen--we've tried
    to change the emphasis of American policy a little bit. I want to just
    mention one because it affects you. It is obvious that if you look at
    the numbers, I believe it's every year since 1980, the aggregate
    employment of the Fortune 500 in the United States has gone down, I
    believe going all the way back to 1980. And the aggregate employment of
    small- and medium-sized businesses has gone up.
        So if we want to grow jobs more rapidly, if we want to keep the
    unemployment rate at 5.4 percent or lower, and if we want to pierce the
    areas of high unemployment in America, the inner cities, the isolated
    rural areas, where no new jobs have come yet in this economic recovery,
    the only way to do it is to make those areas more attractive for small
    business, to make it easier for people to pierce those areas who are
    prepared to be there, to make a commitment, to try to relate to the
    people who live there.
        Now, we've tried to do five specific things for the SBA, and I just
    want to go over them very quickly because I think the Small Business
    Administration under Phil Lader and under his predecessor, Erskine
    Bowles, has really done a very, very good job at trying to reach out and
    support the small-business community.
        The first thing we want to do is improve access to capital. The SBA
    has doubled the loan volume over the last 3 years while cutting its
    budget by nearly a third. I know of no other Government agency that ever
    did anything like that, but that's exactly what they have done.
        There is--more private capital has entered the SBIC program in the
    last 18 months than in the last 15 years combined. The 7(a) guaranteed
    business loan program has some 7,000 lending partners working with the
    agency to provide almost $8 billion to small-business owners last year.
    That's a 52 percent increase over the

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    year before, including an 86 percent increase to women business owners
    and a 53 percent increase to minority-owned businesses. No quotas, no
    preferences, no nothing--everybody who is qualified had a chance to
    compete and get what they were entitled to. And I think you should all
    be proud of the record that American small businesses have made in that
    program.
        The second thing we've tried to do in SBA was to set a better
    example than I did with taking a whole year to get rid of the grits
    regulation. And so the SBA has cut the number of its regulations in
    half, simplified the rest. A lot of you are very familiar with the one-
    page LowDoc loan program and the quick turnaround for loans of up to
    $100,000. I'm very proud of that. But you should also know that we do
    have the SBA now working very hard with EPA, with OSHA, and with other
    agencies trying to get improvements in their regulatory pattern,
    especially with regard to small businesses.
        The Occupational Safety and Health Administration now is working on
    measuring their performance of their own inspectors based on the safety
    results of the plants and the businesses that are measured, not based on
    how many citations they write or how many people they write up but on
    the safety records of the people involved.
        We're working on cutting the total compliance time the EPA takes out
    of the private sector by 25 percent. And we're on track to make it by
    the end of this year. I hope we will, and I believe we will.
        The third thing we've tried to do is to reinvent the SBA. We've had
    to cut everything nearly in Federal Government to try to reach our
    budget totals. There are now 237,000 fewer people working for the United
    States of America than there were the day I became President. We've had
    a reduction of 237,000. The Federal Government is now the smallest it's
    been since 1965. By the end of this year, it will be the smallest--as
    small as it was when John Kennedy was President of the United States in
    1963. And by the way, as a percentage of the civilian work force, which
    is probably a better way to measure it, the Federal Government is now
    the same size it was in 1933 before the New Deal. And interestingly
    enough, one reason not very many people know that is that we only had to
    involuntarily separate 1,750 of those 237,000 people. We managed down
    the rest with early retirement, with people finding other jobs, with
    other things. We didn't have to--we only had to involuntarily separate
    because of budget cuts 1,750 out of those 237,000 people.
        But as a result of that, every agency had to take its cut. SBA
    employment has been reduced by more than a third. And yet they've still
    been able to double the loan volume. So we're working on doing that in a
    way that doesn't cut the services to the small-business community.
        We've also, fourthly, tried to improve small business education,
    counseling, and information through our development center program, our
    business information centers. I think that they are working better with
    the one-stop approach to business counseling.
        And finally, we've tried to let the SBA serve as my eyes and ears,
    to try to get better policy changes. That's one of the things that the
    White House Conference on Small Business was designed to do.
        Recently I signed one piece of legislation that was recommended by
    the conference. The Small Business Regulatory Enforcement Fairness Act
    of 1996, which allows small businesses to challenge Federal regulations
    in court and is one of the most significant regulatory actions taken for
    small businesses in the last decade, came right out of the White House
    conference. So if you were a part of that, you should be proud of it
    because even though we supported it and the Congress passed it, it was
    actually your doing.
        We also got some very important recommendations out of the White
    House conference on making retirement more accessible to small business.
    And one of the things that the Congress and the White House clearly
    agree on--and I hope we can get it passed, notwithstanding all the other
    budget fights--is a whole package of retirement simplification and
    access legislation, about five different bills that, as far as I know,
    has the unanimous support of the Republican leadership, the Democratic
    leadership, and the White House that would make pensions much easier for
    small businesses to access and make them much more portable for people
    who have to change jobs.
        Now, I don't know how many--I got a letter the other day from a guy
    I grew up with complaining that it took him 9 or 10 months to transfer
    his 401(k) plan when he moved from one small business to another and a
    lot of those kind of problems would just go away if this

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    legislation would pass. As I said, as far as I know, there is no
    opposition to this package of legislation, again, not because of me or
    because of the leaders of Congress, but because it came out of the White
    House Conference on Small Business, and we are all trying to listen. I
    hope we can do more of that.
        As far as I know, there is also very little opposition to an
    appropriate reduction in the estate tax burden, to expanding the
    expensing allowance--you know, we took it from 10 to 17.5 and I think
    it's going to go up to 25 under all the proposed new plans, budget
    plans--and to increasing the health insurance, the deductions for self-
    employed people, again, largely because of what you have been doing.
        Now, finally, we had a White House Conference on Corporate
    Citizenship the other day at which your Small Business Person of the
    Year was present--we were just talking about it--in which a lot of the
    bigger businesses were saying that one of the things that we needed to
    do in this budget was to re-enact the tax deduction that employers get
    for helping provide for the education of their employees which
    historically has been a deduction of up to $5,250.
        In addition to that, I am going to recommend again in our budget
    plans when we get down to this, that we provide a 10 percent tax credit
    for small businesses who are willing to undertake some of the expense of
    helping their employees improve their education and training because we
    know it's a bigger burden for small businesses. It's more difficult for
    them, and very often you don't know if you're going to have the
    employees for as long as some of the bigger companies can guarantee that
    they'll have theirs. But since we know that one of the biggest problems
    with stagnant wages in America and growing inequality is the lack of
    skills among our already adult work force, we want to provide whatever
    incentives we can to help you if you're so inclined to support the
    education and training of your employees. So I hope also that that will
    be successful.
        Now, finally, I'd just like to tell you about a proposal I made up
    at Princeton University today. I went up there and gave the commencement
    speech, and I learned that I was only the third commencement speaker in
    100 years. It sort of embarrassed me. I was afraid nobody would ever get
    asked back if I did a bad job. And then I learned that they only asked
    the President to speak every 50 years and then they didn't have
    commencement speakers the rest of the time. So I relaxed and said what I
    intended to. [Laughter]
        I recommended at Princeton that we change the Tax Code in a way that
    would make available to every single American 2 years of education after
    high school because I believe--if you go back and look at the whole 20th
    century, when we started this century with a new industrial era was the
    first time we ever had States requiring people to go to school at all,
    any kind of required public attendance at education. And then after a
    few decades we required people to go to school for 10 years. Then after
    a couple more, we said, well, everybody needs a high school diploma.
        Well, if you look at the 1990 census now, we know that on balance
    younger workers who have high school diplomas don't keep up with
    inflation in their earnings. But younger workers that have at least a
    community college degree of some kind do, and do quite well. We also
    know that nearly every American is within driving distance of a
    community college and that by and large they are more affordable than
    the 4-year schools.
        So I had previously in my budget plan that we give everybody--and
    this would be good for a lot of your children--but we give everybody a
    $10,000 deduction for the cost of education after high school, for
    tuition cost, up to $10,000 a year as a tax deduction. Today I
    recommended that on the bottom of that, if you will, anybody who wanted
    to would be instead able to take a credit of up to $1,500 which covers
    most of the community college tuitions in this country for a community
    college tuition for one year, no questions asked, and then, if they
    maintained a B average, to get it for a second year, which literally
    would make, instead of 12 years, 14 years of education accessible to
    every single American in the country. It could revolutionize
    opportunities for people, and I hope you will support that.
        Let me just make one final point. I know we're going into an
    election season, and we have that every 4 years--really, every 2 years.
    And on the whole that's a good thing. If it's done right, it gives us a
    chance to reassess where we are, to debate the differences between us,
    to have an honest discussion. And it's a very positive thing. But what
    I'd like to point out is that when we work together up here and do agree
    on what we have in common and leave

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    our differences to the side, we can do a lot of good things for this
    country.
        We adopted a budget, 6 months late, but we adopted a budget which
    continued to reduce the deficit and continued to meet what I think are
    our fundamental obligations to the people. We adopted a
    telecommunications bill which gave small-business people in the
    telecommunications area a chance to compete in this brave, new world we
    are going into and still will create hundreds of thousands of new jobs
    in the telecommunications area. We adopted a tough antiterrorism bill to
    deal with one of the biggest law enforcement problems not only the
    United States but people all over the world have. Just because we said,
    look, here's what we agree on. So we don't agree on everything. I gave
    up what I couldn't get. They gave up what they couldn't get. We passed
    the bill; we signed it. That's the way the American system is supposed
    to work.
        So I would say to you, I am still committed to getting a balanced
    budget act. I'm still committed to getting campaign finance reform. And
    I'm still committed to getting the kinds of targeted tax relief we
    talked about here tonight that I believe would help to create more small
    businesses and help more small businesses stay in business and help
    generate more jobs.
        I believe this country is in as good a shape to seize the future as
    any great country in the world. And I believe the best days of this
    country are still before us. What we have got to do is to recognize that
    with all of our diversity--you just look around here. Just imagine what
    the difference in the way this crowd looks today and the way it would
    look 30 or 40 years ago. Just look around this room. And there is no
    country in the world as well-positioned for the global economy as we
    are, managing its diversity as well, giving different people
    opportunities, and all we've got to do is to figure out that we've just
    got to keep working together, keep pulling together, and keep going
    forward. Our best days are still ahead of us, and you and small business
    are going to lead the way.
        Thank you, and God bless you.

    Note: The President spoke at 9:12 p.m. in the Presidential Ballroom at
    the Capital Hilton Hotel. In his remarks, he referred to Small Business
    Person of the Year Phyllis Hannan, first runner-up Terry Anderson, and
    second runners-up Robert and Laurie Lozano. The Small Business
    Regulatory Enforcement Fairness Act of 1996 was title II of the Contract
    with America Advancement Act of 1996, approved March 29 and assigned
    Public Law No. 104-121.