    [Public Papers of the Presidents of the United States: George W. Bush (2003, Book I)]
    [February 24, 2003]
    [Pages 203-206]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 203]]

    Remarks to the National Governors Association Conference
    February 24, 2003

        Thank you very much. Thanks for coming back. I hope you enjoyed our
    dinner last night as much as I did. It was really a lot of fun.
    [Applause] Thank you.
        Obviously, we take your business seriously. I've asked my Cabinet to
    show up to visit with you about ways that we can work together. What I
    thought I'd do is share some things that are on my mind right now and
    then answer any questions you have.
        What's on my mind is to make sure this country is strong and safe.
    One way to make it strong is to do everything we can to encourage job
    growth. My attitude is--I'm sure you share the same attitude--is that if
    somebody is looking for work and can't find a job, it means we've got a
    problem. And therefore, to the extent that government influences job
    creation, we've got to do everything we can to create an environment for
    the entrepreneur to flourish.
        I believe strongly in the notion that if a person has more money in
    their pocket, I know they're likely to demand a good or a service, and
    when they do so, in a market-oriented economy, somebody is likely to
    produce that good or a service, which means somebody is more likely to
    find work.
        That's the whole principle behind that which I laid out for the
    country in '01. It's a principle which the Congress listened to and
    passed meaningful tax relief, because we were in a recession at the
    time. I worked--we worked with Congress in '01, and they phased in this
    tax reduction plan over a period of years.
        My attitude is, since the economy is not as good as we like it to
    be, we ought to accelerate the tax relief which they've already planned.
    That will put about $70 billion immediately into our economy, since I
    intend to ask for this plan to be made retroactive to January 1st of
    this year.
        It's got a lot of positive effects in it. First of all, you know,
    I'm always startled to talk about the marriage penalty in the Tax Code.
    I don't know why we penalize marriage in the Tax Code. It doesn't make
    sense. It seems like we ought to encourage marriages. We ought to
    accelerate that aspect of the tax relief. We've increased the child
    credit to $1,000. It ought to be done this year and not in the out-
    years.
        And as importantly, when you reduce the tax rates at the individual
    level, you also provide capital for small-business growth. See, most
    companies are--most small businesses are sole proprietorships or limited
    partnerships or Subchapter S's. And therefore, that entity pays tax at
    the individual tax rate. And so the reduction of all rates, not just a
    selected few but the reduction of all rates, provides needed capital in
    the small-business sector of our economy.
        Secondly, I'm asking Congress to allow for the deduction of up to
    $75,000 worth of capital expenditure for small businesses, which will
    have a stimulative effect on our economy.
        And thirdly, I believe we ought to get rid of the double taxation of
    dividends. It's bad for--when you tax something twice, it's unfair tax
    policy. It's fair to tax corporate profits. It's unfair to tax the
    senior who receives the dividend from the corporation you've already
    taxed.
        I think getting rid of the double taxation of dividends will not
    only help our seniors--I know it will help our seniors--it will be
    stimulative in the sense that it gets 20 billion into our economy this
    year. But more importantly, it helps capital formation, in a society
    which--if jobs equal capital, we ought to be working on policy to
    encourage more capital formation.
        It's a positive--it'll also have the positive effect of corporate
    reform. After all, we went through a period of time when people

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    said, ``Invest in my company because the sky is the limit, see. We may
    not have any cashflow, but our story is a good one. You know, we may not
    be able to show tangible assets, but we've got a wonderful story, so buy
    on us.'' When you have a dividend-oriented policy, the only thing you
    can distribute is cash, not false promises. And so the elimination of
    the double taxation of dividends will, in itself, serve as a corporate
    reform measure, which is important.
        So this is the plan that I'm asking Congress to pass, and I believe
    we're going to get a lot of it passed. And I believe it's going to
    encourage growth. As a matter of fact, you know, these economists
    predicted in the blue-chip forecast that the economy would grow at 3.3
    percent if Congress responded to a stimulative package--if it responded.
    And so you just need to know that jobs are on my mind, and I'm going to
    work hard to get Congress to pass the package. And I'm optimistic about
    it.
        In this town, you hear a lot of early noise which sometimes fades
    when a Chief Executive starts taking the message to the people. And
    that's what I intend to do. And I know you do the same things, when you
    sell your packages at home. It's got a good effect, and I'm just
    beginning to make the case.
        Secondly, I understand we've got an issue with our own budget, and
    you've got issues with your budgets. We can talk about that. Our budget
    is in a deficit. It's because we went through a recession, and we're at
    war. So I'm going to do everything I can to mitigate the deficit by
    encouraging, on the one hand, more revenues coming into our Treasury
    through economic growth but also limiting the spending to reasonable
    amounts. And I thought a 4-percent discretionary spending increase was
    the right amount.
        And I look forward to working with Congress. As you know,
    appropriators are appropriators. They live up to their name, whether
    they be Republicans or Democrats. They like to appropriate, and our jobs
    as chief executives is to make sure they appropriate within reasonable
    levels. And I intend to work hard to encourage them to spend within
    reasonable levels and set priorities.
        One of the interesting things about the '04 budget I've submitted is
    that there's $400 billion worth of grants to States. That's a 9-percent
    increase. As a matter of fact, the grants to States have been growing by
    9 percent since I've been the President of the United States. We can
    discuss whether that, in your mind, is enough or not. I suspect I may
    know the answer. But nevertheless, it put things in perspective. Of the
    4-percent increase in discretionary spending, $400 billion, or a 9-
    percent increase, goes directly to the States. That's a bigger increase
    than 4 percent, I guess is the point I'm trying to make to you.
        I look forward to working with you on health care matters, on
    Medicare. Look, Medicare is an issue that is a vital issue for our
    country. It is a--Medicare is an old system. It's hidebound with rules,
    and it really doesn't address the needs of many seniors because of its
    age. I like to put it this way: Medicine's changed; Medicare hasn't. And
    we've got to deal with it. And we will deal with it. And Medicaid is
    also an issue that we will discuss with you, and work with you.
        Tommy--I don't know if you've had the Tommy briefing yet or not. Well, he's got a good vision, a good
    idea. We'll work with Congress. We got the bill out of the House
    already. The welfare reform bill is out of the House, and we hope we can
    get it out of the Senate this time.
        This is a matter of making sure that there are proper incentives,
    particularly for people to find work. We believe, in this
    administration, work and dignity go hand in hand. We want to encourage
    work and training for work.
        And at the same time, I want you to know that I'm--feel just as
    strongly about

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    the Faith-Based Initiative today as when I first came into office
    because I understand a modern welfare system must understand the power
    of our faith-based institutions and their ability to change lives and
    help people who need. I don't talk about a particular faith. I talk
    about all faiths.
        Some of you have done some great things. I know that Virginia and, I
    think, Jersey--I've gone there--Florida, I hope--anyway, have done good
    things with the faith-based offices. I encourage you to take advantage
    of this initiative. I encourage you to go into your inner cities and
    find some of these neighborhood helpers and healers and empower them.
    Tell them that if they decide to help a neighbor in need, government is
    not going to make them take the cross off the wall or the Star of David
    off their wall. Encourage their faith-based initiative to go forward. It
    is an integral part of saving lives in America.
        I had a little--Congress, they balked a little bit on the Faith-
    Based Initiative. So I put out an Executive order that said there will
    be a level playing field for any faith-based program with Federal
    agencies. If you've got a housing initiative based upon a faith-based
    initiative, HUD will treat you fairly. They're not going to fund you if
    it's a lousy deal, but you'll be treated fairly coming in. And I just
    urge you to do this. I'm absolutely confident--well, I know one of the
    great strengths of the country is the heart and soul of the American
    people. And there are thousands of our fellow citizens who will answer a
    call to love a neighbor in need.
        I want to work with you on education. It's a subject I spent a lot
    of time on as the Governor of Texas. It is the most important thing a
    State does, as far as I'm concerned. Today I look forward, if you've got
    any questions on the No Child Left Behind bill, I'll be glad to answer
    your questions.
        But you're going to hear a guy who is not going to relent when it
    comes to making sure we measure whether every child can read and write
    and add and subtract, because you can't cure unless you measure. And
    there are too many of our children who cannot read and write and add and
    subtract, and we better figure out how to not only figure out who can't
    read and write but how to cure it now, before it's too late.
        Margaret tells me we've talked about
    the Head Start initiative to help you better coordinate the early
    childhood development programs. I firmly believe that those children can
    be taught the basics for reading now and should be, and people ought to
    be held to account as to whether or not they are being taught the basics
    of reading now.
        I look forward to working with you on our homeland security
    initiatives. I was disappointed that the Congress did not respond to the
    3.5 billion we asked for. They not only reduced the budget that we asked
    for; they earmarked a lot of the money. That's a disappointment, a
    disappointment when the executive branch gets micromanaged by the
    legislative branch. You may have had that experience yourself.
    [Laughter]
        But we'll do everything we can to not only get that money out
    quickly but figure out ways to get as much of the money to you in ways
    that will help you respond to the threats this country faces.
        I want to thank you very much for working on these Joint Terrorism
    Task Forces. They're effective tools to help prevent attack. The culture
    of the FBI has changed from one that said, ``We're going to find
    criminals and arrest them,'' to one, ``We're going to do everything we
    can to''--let me start over. That's still an important function of the
    FBI. But it's now--its primary function is now to prevent attack.
        I say that because America is still a battlefield. You know, after
    September the 11th, our perspective had to change about the world. I
    remind your constituents when I travel around the country that prior to
    September the 11th, oceans would protect

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    us. That's what we thought, at least--that we were safe. September the
    11th, we learned that we're vulnerable to attack. It's just the nature
    of the world we live in. As leaders, our job is to remind the American
    people that--of the reality of the dangers we face and do everything we
    can to prevent attack.
        So we're doing everything here at home. I hope you feel the level of
    coordination is good. If it's not, we need to hear about it, so we can
    continue to button up the homeland to the best of our ability. The best
    way to protect America is find the killers before they kill us. And
    that's what we're going to do. That's why this war--the budget I asked
    for Congress had a lot of defense spending in it, because we're on the
    hunt, and we're going to stay on the hunt until we bring terrorist
    networks to justice. That's what we owe the American people.
        As we speak today, we are not only providing help to the people of
    Afghanistan; we're hunting down the remnants of Al Qaida. And they're on
    the run. And it doesn't matter how long it takes, they will be brought
    to justice.
        The war on terror is more than just chasing down shadowy terrorist
    networks. The war on terror is recognizing that weapons of mass
    destruction in the hands of brutal dictators also threatens the American
    people. I've come to the conclusion that the risk of doing nothing far
    exceeds the risk of working with the world to disarm Saddam Hussein. I came to that conclusion because of the new
    realities we all face as American citizens who love freedom and who
    aren't going to change.
        Today we're going to submit a resolution to the U.N. Security
    Council that spells out what the world has witnessed the last months.
    The Iraqi regime is not disarming. The Iraqi regime is not disarming as
    required by last fall's unanimous vote of the Security Council. Saddam
    Hussein's refusal to comply with the demands
    of the civilized world is a threat to peace, and it's a threat to
    stability. It's a threat to the security of our country. It's a threat
    to the security of peace-loving people everywhere.
        We're going to work with the members of the Security Council in the
    days ahead to make it clear to Saddam that
    the demands of the world and the United Nations will be enforced. It's
    an interesting moment for the Security Council and the United Nations.
    It's a moment to determine for this body, that we hope succeeds, to
    determine whether or not it is going to be relevant as the world
    confronts the threats to the 21st century. Is it going to be a body that
    means what it says? We certainly hope it does.
        But one way or the other, Saddam Hussein,
    for the sake of peace and for the security of the American people, will
    be disarmed.
        We face common challenges. I look forward to working with you all to
    meet those challenges. The country expects leaders to lead. And that's
    exactly what we all are going to do for the good of mankind, for the
    good of the American people.
        Thank you very much.

    Note: The President spoke at 11 a.m. in the State Dining Room at the
    White House. In his remarks, he referred to Health and Human Services
    Secretary Tommy G. Thompson; Assistant to the President for Domestic
    Policy Margaret Spellings; and President Saddam Hussein of Iraq. The
    Office of the Press Secretary also released a Spanish language
    transcript of these remarks.