    [Public Papers of the Presidents of the United States: George W. Bush (2003, Book I)]
    [May 2, 2003]
    [Pages 413-419]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks to Employees of United Defense Industries in Santa Clara,
    California
    May 2, 2003

        Thank you all very much. Thanks for the warm welcome. It's been a
    heck of a trip out here to California. [Laughter] I'm honored to be here
    with the good folks at United Defense. I'm here to thank you for your
    contribution to making the world a more peaceful and free place.
        Yesterday I had the honor of speaking to the American people from
    the deck of the U.S.S. Abraham Lincoln. I made this declaration, that
    major combat operations in Iraq have ended, the United States and our
    allies have prevailed.
        I spent the night--one night. [Laughter] Most of the crew had been
    on there for 9\1/2\ months. I was so proud to be with those men and
    women who wear our Nation's uniform. Their morale is high. They have
    served our Nation well, and this country is proud of them.
        We are proud of everybody who wears the Nation's uniform, and we are
    proud of those who have contributed to the defense of the country, just
    like the people right here at United Defense have done. The technologies
    and products developed here at United Defense have made our military
    second to none. So I'm here to thank the folks who work for this fine
    company, on behalf of the American people, for your contribution to the
    security of your Nation and for the peace of the world.
        I'm also here for another reason. I'm here to talk about the state
    of our economy. Today we saw some new statistics on employment. The
    unemployment number is now at 6 percent, which should serve as a clear
    signal to the United States Congress we need a bold economic recovery
    package so people can find work. That 6-percent number should say loud
    and clear to members of both political parties in the United States
    Congress, we need robust tax relief so our fellow citizens can find a
    job.
        I want to thank Tom for his kind
    introduction, and I want to thank Elmer for
    the tour. [Laughter] You all are doing some amazing stuff here. I'm
    really proud--proud of the workers, proud of the engineers, proud of the
    people who are keeping this country on the cutting edge. I want to thank
    the mayor of Santa Clara for coming. Madam
    Mayor, I appreciate you coming. I want to thank all the local officials.
    I particularly want to thank Richard Pombo,
    the Congressman from the great State of California, for being here as
    well.
        I had the honor of meeting a fellow named Steve Houck today. Where are you, Steve? Somewhere around here.
    Where?

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    There he is. Hi, Steve. [Laughter] They gave Steve a great seat--
    [laughter]--at least a great view. [Laughter] Here's why I want to
    mention Steve. You see, Steve works for salesforce.com, a company which
    encourages voluntarism amongst its employees. Not only does the company
    encourage voluntarism amongst employees, Steve leads the effort--one of
    the leaders of the effort. He takes the time that the company allows him
    and volunteers to help make somebody's life better.
        We've spent a lot of time in this country over the recent weeks
    talking about the great military might of America. The truth of the
    matter is, the greatest strength of our country is the compassion of our
    fellow citizens to one another. The great strength of America can be
    found in the hearts of our fellow citizens.
        My call to you is to love a neighbor just like you'd like to be
    loved yourself. If you're worried and interested about the future of
    this country, find somebody who hurts. Find somebody who needs love. Put
    your arm around them and say, ``The great American experience belongs to
    you just as much as it belongs to me.'' Steve, thank you for your
    leadership.
        On September the 11th, 2001, America learned that vast oceans no
    longer protect us from the threats of a new era. On that day, 19 months
    ago, we also began a relentless worldwide campaign against terrorists,
    those who hate freedom, in order to secure our homeland and to make the
    world a more peaceful place.
        And we're making great progress. In the battle of Afghanistan, we
    destroyed one of the most barbaric regimes in the history of mankind--a
    regime so barbaric, they would not allow young girls to go to school; a
    regime so barbaric, they were willing to house Al Qaida. That regime no
    longer exists. Many Al Qaida leaders no longer exist, and the training
    camps no longer exist.
        In the war on terror, we're making good progress. As I said last
    night, nearly one-half of all Al Qaida's senior operatives are no longer
    a threat to the United States of America. And we're still on the hunt.
    We will flush them out of their caves. We'll get them on the run, and we
    will bring them to justice.
        As a result of the bravery and skill of our Armed Forces and
    coalition forces, the war on terror is much longer down the road because
    of what happened in Iraq. You see, the Al Qaida no longer have a ally in
    the regime in Iraq. Terrorists no longer have a funding source in the
    regime of Iraq. One thing is for certain: Terrorists will no longer have
    a source of weapons of mass destruction in the regime that used to be in
    Iraq, because the regime that used to be in Iraq is no longer.
        We have an obligation to future generations of Americans to make
    sure this country is secure, and we will keep that obligation. We have
    made progress, but there is more to do. In all these efforts, our men
    and women in uniform have performed brilliantly. By their courage, our
    Nation is more secure. By their skill and sacrifice, Iraq and
    Afghanistan are now free.
        The people who serve our country deserve our gratitude, and they
    deserve the finest equipment we can provide. The new technologies of war
    help to protect our soldiers and, as importantly, help protect innocent
    life. You see, new technologies allow us to redefine war on our terms,
    which makes it more likely the world will be more free and more
    peaceful.
        You do a lot to keep the American Armed Forces on the leading edge
    of technological change here at United Defense, and I want to thank you
    for that. You not only help save lives, but you're an agent for peace.
    And that's important for you to know that. The better we can redefine
    how war is--wars are fought and won, the more likely it is that peace
    will prevail because this is a peaceful nation. This is a nation that
    wants nothing more than the world to be more free and more peaceful. I
    want to thank you for what you've done, what you're going to do, and I
    want to thank

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    you for the product you put out in the field.
        In the Iraqi theater, the M4 Command and Control vehicles that you
    help produce gave our commanders unprecedented control over the
    battlefields. The Bradley Fighting Vehicles were responsible for a lot
    of tank kills. Some of the first Army units sent to take control of the
    Baghdad Airport were traveling in Bradleys. The world witnessed one of
    the swiftest advances of heavy arms in the history of warfare, a 350-
    mile charge from south to north in Iraq, through hostile enemy
    territory. We were able to do so not only because of the good strategy,
    great courage, and skill, but because of the Bradleys and Abrams with
    which our soldiers were equipped. You're making a good product here.
        One of the things that people learned about your company as well is
    how useful the HERCULES tank recovery system can be. The guy with the
    sledgehammer on the statue needed a little help. [Laughter] Thankfully,
    there was a HERCULES close by--[laughter]--a HERCULES which pulled that
    statue of Saddam Hussein to the ground.
        That meant more to the Iraqi people than you can possibly imagine.
    It was a symbol of their future, a future based upon something that we
    hold dear to our hearts, a future based upon something that is not
    America's gift to the world but the Almighty God's gift to each and
    every individual, a future based upon freedom.
        I also appreciate so very much that 35 of your fellow workers are in
    theater. Some were in Kuwait. Many are in Iraq, working on the products
    that you helped develop, working through those sandstorms and those long
    hauls across hostile territory. They're still in the region. They and
    their families need to know America is grateful for their service and
    their sacrifices, just as we are grateful for the service and sacrifice
    of many of the families whose loved ones have been and still are in
    theater.
        Perhaps some of you have got a relative over there, kind of like Ron
    Pinkney, who is an engineer here at United
    Defense. His son, Jason, is serving in the
    101st Airborne Division. Ron, I appreciate your sacrifice for your
    country by being a loving dad. But you tell Jason, and you tell Jason to
    tell his buddies, the Commander in Chief and the people of Santa Clara,
    California, are really proud of his service.
        Major combat operations are over. Yet we have got commitments to
    keep in Iraq. Parts of that country are still dangerous, and we will
    provide security. We will establish order in the parts of Iraq that are
    dangerous. We will chase down the leaders of the old regime, and they
    will be held to account for the atrocious crimes they committed on the
    Iraqi people.
        We've got hundreds of sites to exploit, looking for the chemical and
    biological weapons that we know Saddam Hussein had prior to our entrance into Iraq. Listen, this guy
    has spent years and years and years of hiding weapons from weapons
    inspectors. It's going to take time, but the world will see the truth.
        We'll restore the hospitals, rebuild the schools, provide needed
    infrastructure in a country that didn't have as many hospitals as it
    needed or schools as it needed or needed infrastructure as was required,
    because Saddam Hussein was willing to spend
    money on luxurious palaces, not on the people of Iraq. We will stand
    with the new leaders of Iraq as they build a Government of, by, and for
    the Iraqi people.
        This is going to take time. The efforts to restore security and
    infrastructure is going to take time, and it's not going to be easy
    work. But we will stay the course. We will stay as long as necessary to
    get the job done, and then we will leave. And when we leave, we will
    leave behind a free Iraq.
        We believe in the peace, in keeping the peace. And the best way to
    make the world more peaceful and the best way to fight hatred, the
    hateful ideologies oftentimes

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    found in corners of the world, is to promote freedom. Free people are
    less likely to hate. Free people are more likely to focus on a hopeful
    future. We love freedom in America. It's ingrained in our soul. We also
    understand the habits of freedom are more likely to make the world a
    more peaceful and hopeful place. We will stay in Iraq until it is free,
    and we will stay to make sure the foundations for freedom are real and
    solid.
        Now, here at home, we've got other--we've got challenges to face. I
    talked about a statistic, but behind every statistic is somebody's life,
    when it comes to employment statistics. Listen, the goal of this country
    is to have an economy vibrant enough, strong enough so that somebody
    who's looking for work can find a job. We're making progress. You've
    just got to know that. We're a growing economy. Matter of fact, we're
    the--of all the industrialized economies, we're one of the strongest.
    That's not good enough for me, and I know it's not good enough for you.
        We've come through some hard times. Remember, we've overcome a
    recession. We've overcome an attack on our soil. We have been in two
    major battles in the war against terror, one in Afghanistan, one in
    Iraq. We had some of our fellow citizens forget what it means to be a
    responsible citizen, some CEOs of corporations in America who felt it
    would be okay to fudge the numbers, to not tell the truth. Their
    irresponsible behavior affected the psychology of the country. We'll
    take care of them.
        It would be helpful if many CEOs in corporate America took care of
    business before we had to take care of them. I call upon the CEOs of
    this company to treat their employees and shareholders with the utmost
    of respect.
        Despite these obstacles, we're growing, but there is untapped
    potential in this economy. You know it better than anybody, right here
    in this part of the world. The foundations for growth are good. We got
    low inflation, which is positive, low interest rates, which are really
    good for people who either own a home or want to buy a home or
    refinancing a home in order to remodel a home. The greatest strength--
    well, let me--gas prices are coming down, which, by the way, is positive
    for the American consumer, American people.
        The greatest strength we have is the productivity of the American
    worker. That's our greatest strength. Last year, productivity growth in
    America was 4.8 percent. It's the best annual increase since 1950.
        Let me tell you what that means here at United Defense--incredibly
    productive workforce that you have here. It took 4 years for United
    Defense's engineers to develop a working prototype of the Bradley. It
    took only 8 months to do the same for the Future Combat System vehicle.
    Productivity increases like that means that we are more competitive,
    that people are likely to find better jobs, that consumers will benefit.
    Now, productivity increase is an incredibly important part of the future
    of this country. And I want to thank the workers here and the engineers
    here for being on the leading edge of the productivity increases in our
    country.
        But the economy is not growing fast enough, and you know it as well
    as anybody here. So I've been working with the Congress on a jobs
    package, a pro-growth jobs package. See, in order to help people looking
    for work, we need to figure out how best to encourage economic growth.
    That ought to be the cornerstone of any good jobs package. You see, if
    the economy grows, somebody is more likely to find work. Therefore, we
    ought to be asking the question: How do we create economic growth?
        In my judgment and the judgment of a lot of economists--and the
    truth of the matter is, it's now become kind of the common wisdom in
    Washington, DC--the best way to create growth is to let people keep more
    of their own money. The more money you have in your pocket, the more
    likely

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    it is you're going to demand a good or a service. The more goods and
    services demanded, the more likely it is somebody is going to find work
    in America.
        And therefore, I proposed a robust tax package to the United States
    Congress of at least $550 billion. The reason I did so is because
    economists have taken a look at that package and say that when it
    passes, one million new jobs will be created by the year 2004. If you're
    interested in job creation, if you want to make sure that your neighbor
    can find work, support a job package that is robust and strong and is
    hopeful for the American worker.
        We're making good progress. I mean, it makes sense that we should
    make progress. After all, most of the tax relief package I proposed has
    already been passed by the Congress. See, I said we ought to reduce all
    rates. They've already agreed to that. We ought to reduce the effect of
    the marriage penalty. They agreed to that. We ought to raise the child
    credit from $600 to $1,000 per child. They agreed to that.
        The problem is that they weren't going to let you keep your own
    money for 3, 5, or 7 years from now. Well, listen, our economy needs a
    shot in the arm now, not 3, 5, or 7 years from now. If you're somebody
    that's looking for work, you're not interested in what's going to take
    place 3, 5, or 7 years from now. If you're somebody looking for work,
    you want your Government to act now. For the sake of job creation, the
    United States Congress must enact all the tax reforms they passed in
    2001.
        When I get back to Washington, DC, I want to see a bill on my desk
    that recognizes--well, that may be a little fast. How about in a couple
    of weeks after I get back to Washington? [Laughter] For the sake of job
    growth, let's put those tax cuts we've already got in place, in place
    today so people can find work.
        Oh, you hear all kinds of talk in Washington about, ``This plan is
    not fair.'' You know, ``This plan is going to reward only certain
    people.'' Let me tell you the effects of this plan on a family of four
    making $40,000 a year. Their tax bite will go from $1,178 a year to $45
    a year. Now, perhaps for some in Washington, DC, that $1,000 a year for
    every year doesn't sound like a lot. But for a family of four making
    $40,000 a year, it means a lot. It means a lot not only to the family
    for their capacity to save or invest in their children; it means a lot
    for our economy to have people with an additional $1,000 in their
    pocket. Congress needs to get this passed and get it passed soon.
        Any good economic jobs package has got to understand the role of
    small business in our society. Most new jobs are created by small
    businesses. When small businesses are strong, when small business
    flourishes, people are more likely to find work.
        Cutting the tax rates and accelerating the tax rates cuts is
    important for small business growth for this reason: Most small
    businesses pay tax at the individual income-tax rates. Most small
    businesses are either a sole proprietorship or a limited partnership or
    a Subchapter S and, therefore, pay tax like an individual does.
        So that when you hear us talk about cutting individual tax rates and
    accelerating the tax rate cuts, you've got to understand the impact it
    is going to have on the American entrepreneur. It will mean more capital
    in the coffers of the small business company. More capital in the
    coffers of the small business company means more investment. More
    investment means more work for the American people. Twenty-three small-
    business owners will see their taxes cut--23 million--small-business
    owners will be more likely candidates to hire somebody.
        As well, there is a limit on what a small business can deduct on
    capital purchases, at $25,000. Congress ought to raise that limit to
    $75,000 per year for small businesses, to allow small business to exempt
    capital purchases of that amount. It ought to index it to inflation.

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        Listen, when somebody goes out and buys a new computer or a new
    program, it not only benefits the small business because the small
    business becomes more productive; it benefits the computer programmer
    who has designed the program or the computer manufacturer who made the
    computer. The best way to encourage economic growth is to encourage
    investment, is to stimulate supply and demand. The Congress needs to be
    bold, and the Congress needs to act, and the Congress needs to recognize
    the importance of small business in our society.
        I also believe we ought to end the double taxation on dividends. It
    makes sense to tax a company's profits. What doesn't make sense is to
    tax the company's profits and then tax the owners of the company after
    they pay tax. It's not fair to tax something twice in our society. Who
    are the owners of the companies? The owners of the companies are the
    shareholders. Millions of Americans own stock either directly or through
    pension plans, 401(k)s.
        Listen, if you're an owner of a company, small or large, you ought
    to be worried about your company--your investment being taxed twice by
    the Federal Government. The double taxation of dividends is not fair. It
    is not fair to seniors, who oftentimes rely upon dividend income. It's
    not fair to the workers whose pension plans rely upon dividend income.
    It is not fair for the Federal Government to tax something twice, and we
    need to get rid of the double taxation of dividends in America.
        Getting rid of the double taxation of dividends will make it easier
    for businesses to raise capital. It will reduce the cost of capital. The
    more capital there is in circulation, the more jobs there will be for
    American workers. Getting rid of the double taxation of dividends will
    encourage companies to pay dividends.
        We have just gone through a period in American economic history
    where people invested based upon what I would call, maybe, pie-in-the-
    sky projections--that, ``Don't worry. We don't have any cashflow, but
    nevertheless, we've got a nice story.'' [Laughter] The problem is, that
    story kind of ran out of steam because there wasn't any cashflow. To me,
    it's a great reform to encourage people to pay dividends on stocks,
    because you can't put out a pie-in-the-sky projection if you're a
    dividend-paying company. If you say you're going to pay a dividend, you
    better pay the dividend, and the only way you can pay a dividend is to
    have actual cashflow available for the investors.
        Getting rid of the double taxation of dividends will be good for job
    creation. It will be good for capital formation. It will be good for the
    pension holders of America, and it will be good corporate reform in a
    system that needed reform.
        I know there's people hurting here in Silicon Valley. I know there
    are people who are worried about their future. I know this incredibly
    vibrant part of the American economy over the past year is not meeting
    its full potential. The plan I just outlined is one that will boost the
    economy in the Silicon Valley. It's a plan that is bold because we need
    a bold plan. It's a plan that is thoughtful because we need a thoughtful
    plan. Most importantly, it's a plan that will invigorate the
    entrepreneurial spirit, which has been so strong here, and make it more
    likely somebody who's looking for a job will be able to find one.
        I urge the United States Congress to look at the unemployment
    numbers that came out today and pass a tax relief plan that will matter,
    a tax relief plan robust enough so that the people of this country who
    are looking for work can find a job.
        I know you'll hear talk about the deficit, and we've got a deficit
    because we went through a recession. A recession means the economy has
    slowed down to the extent where we're losing revenues to the Federal
    Treasury. We got a recession because we went to war, and I said to our
    troops, ``If we're going to commit you into harm's way,

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    you deserve the best equipment, the best training, the best possible
    pay. It doesn't matter what it costs; we're going to pay what it costs
    in order to win the war.'' We had an emergency. These all cost our
    Government money. So with the combination of the loss of revenue as a
    result of the recession, which was official in January of 2001, and the
    expenditures in order to win a war and deal with an emergency and deal
    with the new issues of homeland security, we've got a deficit.
        And there's two ways to deal with that. One is you control the
    expense side of the ledger. You make sure the Federal Government spends
    your money on that which is absolutely necessary. You focus them on
    doing certain things and doing them well. You must have fiscal
    discipline in Washington, DC, in order to deal with the deficit.
        And the other way to deal with the deficit is to put policies in
    place that increase the revenues coming into the Treasury. And the best
    way to encourage revenues coming into the Treasury is to promote policy
    which encourages economic growth and vitality. A growing economy is
    going to produce more revenues for the Federal Treasury. The way to deal
    with the deficit is not to be timid on the growth package. The way to
    deal with the deficit is to have a robust enough growth package so we
    get more revenues coming into the Federal Treasury and then follow my
    lead and make sure we don't overspend the people's money in Washington,
    DC.
        I'm incredibly proud of this country, and I know you are as well. We
    have been through a lot as a nation. Our resolve has been tested. But we
    have shown the world our greatest resources and our greatest strength,
    which is our national character--that we hold certain values to be true,
    that we've got tremendous compassion as a nation, that we're an
    optimistic people and we're a resolved people, we are resolved to defend
    the peace of the world, that we are resolved to bring freedom to corners
    of the world that haven't seen freedom in generations, that we're
    determined to build the prosperity of our own country. This is a unique
    moment in our country's history--it truly is--and the American people
    are rising to meet it.
        I want to thank each of you for what you've done to make this
    country more secure and the world more peaceful and the world more free.
    I want to thank you for coming out today. It's such an honor to be here.
    May God bless you and your families, and may God continue to bless
    America.

    Note: The President spoke at 10:10 a.m. in the prototype bay. In his
    remarks, he referred to Thomas W. Rabaut, president and chief executive
    officer, and Elmer L. Doty, vice president, United Defense, L.P.; and
    Mayor Patricia M. Mahan of Santa Clara.