[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.