[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]



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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.