[Public Papers of the Presidents of the United States: George W. Bush (2003, Book II)]
[September 4, 2003]
[Pages 1084-1091]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks in Kansas City, Missouri
September 4, 2003

    Thank you very much. Please be seated. I appreciate the warm 
welcome. It's nice to be back here in Kansas City. I feel comfortable 
here. After all, it's a place of good baseball, pretty good football, 
and really good barbecue.
    I have come to this important city, right here in the heart of 
America, to speak about the future of our Nation's economy. I want to 
talk about jobs and job creation. Kansas City in many ways symbolizes 
the incredible energy and ingenuity and flexibility of our economy. It 
wasn't all that long ago that Kansas City was known for rail lines and 
stockyards. Now, the economy is a more modern economy because of the 
spirit of enterprise that exists here and because of the willingness for 
the people to work hard, because of the optimism of the people in this 
part of the world. And I share your optimism about the future of this 
Nation.
    America's economy today is showing signs of promise. We're emerging 
from a period of national challenge and economic uncertainty. The hard 
work of our people and the good policies of our Government are paying 
off. Our economy is starting to grow again. Americans are feeling more 
confident. I am determined to work with the United States Congress to 
turn these hopeful signs into lasting growth and greater prosperity and 
more jobs.
    I want to thank Terry Dunn for his kind 
introduction. I like a good, short introduction. [Laughter] I appreciate 
Pete Levi, the president of the Greater Chamber.
    I flew from Washington here today with two fine Americans: Senator 
Jim Talent, who's doing a great job for the 
people of Missouri, and Congressman Sam Graves.
    On the plane ride down, Sam told 
me that his mother was going to be here today. And I said, ``I hope 
you're still listening to your mother.'' [Laughter] I'm still listening 
to mine--[laughter]--most of the time. 
[Laughter]
    I want to thank Paul Rodriguez and CiCi 
Rojas from the Hispanic Chamber of Commerce for--
[applause]. I also want to thank the board of directors and the members 
of the chamber for allowing me to come to discuss with you the future of 
this country.
    Before I do so, though, I had the honor of meeting Tom 
Holcom. He's a Missouri native who was 
out there at Air Force One when--at the airport when we landed, to greet 
me at Air Force One. He started Angel Flight Central. He is a--it's a 
nonprofit organization that provides free air transportation to those in 
need due to a crisis.
    The reason I bring this up is that I know the great strength of 
America is the heart and soul of the American people. And everywhere I 
go, I like to herald those quiet heroes who are making a difference in 
people's lives by volunteering time. I like to tell people that it's 
important for this Nation to usher in a period of personal 
responsibility. And part of a responsibility society is to love a 
neighbor just like you'd like to be loved yourself.
    I want to thank Tom for using his 
time and talent to help somebody in need. I want to thank you all, if 
you're a member of the army of compassion in this United

[[Page 1085]]

States of America, for serving your community by helping somebody who 
hurts, by reaching out a hand to a neighbor in need. No, Government can 
help. We can pass out money. But Government cannot put hope in people's 
hearts or a sense of purpose in people's lives. That is done when a kind 
soul puts their arm around a brother and sister in need and says, ``I 
love you. What can I do to help?''
    Events of the last few years have revealed the amazing resilience of 
our Nation's economy. In our country's history, recessions have 
typically resulted from single, unexpected shocks such as spikes in 
energy prices or sudden shifts in markets. Since 2000, our economy has 
been dealt not just one shock, but three--a set of challenges with few 
parallels in American history.
    First, the stock market began a steady decline in March 2000, as 
investors realized that the economy was not healthy. Businesses faced 
overcapacity during that period of time and cut their budgets for new 
investment in technology or equipment. And by early 2001, this economy 
was in recession.
    And secondly, we were attacked on a fateful day, September the 11th, 
2001. An enemy which hates America attacked us and killed a lot of our 
citizens. It brought our Nation great grief and shock, and it disrupted 
our economy. The stock market shut down for days. Commercial airlines 
were devastated. Travel and tourism industry has struggled since, and 
the costs of higher security are still being paid. The economic impact 
of those attacks is estimated at $80 billion in economic damage and lost 
output, which is nearly equivalent to wiping out the entire economy of 
Kansas for one year.
    The economic impact of September the 11th continued because of the 
uncertainty from the war on terror--from operations in Afghanistan or 
war on terror in Iraq or relentless hunt for the killers. In times of 
conflict, decisionmakers are hesitant to make major purchases, 
businesses are hesitant to hire new people. The march to war is not 
conducive for hopeful investment. Our military campaigns in the war on 
terror have cost our Treasury and our economy. Yet, they have prevented 
greater costs.
    We will protect this Nation from further attack and, therefore, 
protecting our economy from major disruption. The safety of our people, 
the security of the American people is of paramount concern to me. With 
a broad coalition, we are taking and will continue to take action around 
the globe. We will remain on the offensive against terrorist killers. We 
will stay on the offensive, and this Nation will prevail. [Applause] 
Thank you.
    As we fought this war, our Nation's economy was dealt a third major 
blow. We discovered corporate malfeasance in boardrooms across America. 
The scandals--corporate scandals--erased savings of Americans--of some 
Americans. It forced the layoffs of thousands, and it undermined the 
confidence of investors. But we took action. I signed tough new laws. In 
an era of personal responsibility, if you're a CEO in corporate America, 
we expect you to tell the truth to your shareholders and employees 
alike. And if you don't, there's going to be serious consequence.
    In each case, this administration did not stand by and hope that the 
problem would solve itself. We acted with a strong belief in the spirit 
of the American people and in free markets. We acted to keep the 
entrepreneurial spirit of America alive and well. I based decisions on a 
fundamental principle: When our economy is struggling, the best thing 
that Government can do to stimulate growth is to let people keep more of 
their own money.
    So I asked for and the Congress passed major reductions in Federal 
taxes. We lowered taxes of every American who pays taxes. We raised the 
child credit to $1,000 per child. We reduced the marriage penalty. Seems 
like to me the Tax Code ought to encourage marriage, not discourage 
marriage.

[[Page 1086]]

    These actions have brought substantial savings to the taxpayers and 
have been critical in fighting the effects of recession. Under the tax 
relief we passed in 2001 and 2003, a married couple with two children 
and a household income of $40,000 have seen their Federal income tax 
bill fall this year from $1,978 to $45.
    Thanks in part to the reductions we passed, real disposable personal 
income--that which is left in paychecks and other income after taxes are 
taken out--has increased at 3.4-percent rate in the first 2\1/2\ years 
of my administration. That's a faster increase than the pace set in the 
1990s. People are keeping more of their own money.
    That tax relief is taking pressure off of families and is adding 
momentum to economic growth. Tax relief came at the exact right time. I 
say that because during the first year of a typical recession, consumer 
spending rises only at 0.3 percent. That's a typical recession. In the 
most recent recession, thanks in part to the tax cuts, consumer spending 
rose by nearly 10 times that rate. When people have more money in their 
pocket, consumer spending will stay strong, and that spending has 
continued.
    Throughout this recession, consumers have shown a belief in 
America's future by buying homes. In the typical recession, housing 
investment falls by 10 percent and doesn't recover for nearly 2 years. 
Thanks to tax relief and low interest rates, housing investment dropped 
by only one percent in this recession and then began to rise above 
prerecession levels within only one year.
    This July, housing starts reached their highest level since 1986. 
Homeownership in America is now at 68 percent, one of the highest levels 
ever recorded. And many Americans have refinanced their homes, saving 
themselves billions of dollars. And that helps our economy grow as well.
    As Americans grow more confident and make more purchases, small and 
large businesses around the country are seeing the benefits. Purchasing 
managers have reported rising new orders for both goods and services in 
each month since May. Orders for high-tech equipment have been 
declining--had been declining since 2000. They have risen steadily since 
April.
    Investors are showing greater confidence in the stock market. Thanks 
to our efforts to reduce taxes on stock dividends, dozens of major 
companies have announced plans to either increase their existing 
dividend payout or pay dividends for the first time, which will put 
billions of dollars in cash into the pockets of American shareholders. 
And that is good for our economy.
    For small businesses--and I know we've got some small-business 
owners here today--the outlook is improving. I found it interesting that 
Americans are starting sole proprietorships at a faster rate than they 
did in the 1990s. The tax relief we passed helps small businesses. Most 
small businesses are either sole proprietorships or Subchapter S 
corporations, which means they pay tax at the individual income tax 
level. And therefore, when you reduce individual income taxes, you're 
providing much needed capital for small businesses all across America.
    Since small businesses create most of the new jobs in America, we 
recognized we needed to do more. And so, we gave further encouragement 
to small businesses by raising the annual expense deduction from $25,000 
to $100,000. By helping small businesses, by creating the environment 
for capital accumulation and capital investment at the small-business 
level, not only are we sustaining the entrepreneurial spirit in America, 
but we're helping Americans find work.
    The recession was hard on a lot of Americans. Over the past 2\1/2\ 
years, I've met with dozens of our fellow citizens, families who have 
struggled to meet emergency bills, seniors who saw their savings hurt by 
stock market declines, small-business owners who had to put in a lot of 
work

[[Page 1087]]

just to keep their dream alive. These Americans were helped by tax 
relief. Had we not taken action, this economy would have been in a 
deeper recession. It would have been longer, and as many as 1.5 million 
Americans who went to work this morning would have been out of a job.
    Instead, because we did act, the recession was one of the shallowest 
in modern economic history. Some critics, who opposed tax relief to 
start with, are still opposing it. They argue we should return to the 
way things were in 2001. What they're really saying is they want to 
raise taxes. Higher taxes will not create one job in America. Raising 
taxes would hurt economic growth. Tax relief is putting this Nation on 
the path to prosperity, and I intend to keep it on the path to 
prosperity.
    I was told of a story of the Nebraska Furniture Mart. It's an 
interesting American story. It's a story of a family that started this 
company in Omaha, Nebraska, and they wanted to build a store right here 
in Kansas City, Kansas. It wasn't the best time to open up a store, but 
the people running the company thought it was a good risk, a good 
market. They planned on bringing--or hiring 550 new workers for their 
new store, because the tax relief we passed put more money in people's 
pockets, and the demand for the goods they sold in that store was 
greater than they expected. So Furniture Mart hired 1,000 people instead 
of 550.
    Robert Batt and his family--they run the 
company--he said this; he said, ``We just believe in America, and we do 
what we excel at, selling furniture. The customers are out there. We've 
never had a layoff in 67 years.'' Not only have they not had a layoff in 
67 years, they had enough confidence and the policies of the 
administration were working such that they were able to provide work for 
1,000 of our fellow citizens.
    Even as this economy is looking up, it's hard to feel confidence if 
you're somebody looking for a job. People who have been hit hard in the 
manufacturing sector know what I'm talking about. Parts of this country 
are not doing as well as they should, regions like the Pacific Northwest 
and parts of the Midwest. Part of the current problem is that job 
creation lags behind improvements in the overall economy. Of course, it 
takes a while for job creation to catch up. Usually, when the economy 
comes out of a recession, jobs are the last thing to arrive. Employers 
tend to rely on overtime until they're sure it makes sense to hire 
another worker.
    Yet, there's another basic reason for lagging employment, and that 
is increases in worker productivity. Over the long term, higher 
productivity lifts workers' wages and standards of living, and it helps 
the economy. We've got the most productive workers in the world right 
here in America. And that's good for the long-term economic prospects. 
You see, higher levels of productivity means that we'll see better 
paying jobs for the American worker. But there is a downside in the 
short term. When a business can produce more per employee--in other 
words, productivity has gone up per person--it does not hire new people 
right away to meet rising demand.
    So therefore, the agenda that I've got and I'm going to describe to 
you, to build on what we have done already, has one thing in mind, and 
that is, our economy must grow faster than productivity increases to 
make sure that people can find a job. I'm interested in Americans going 
to work. That's what I'm interested in.
    And we will continue to help individuals get through the tough times 
and to prepare for better times. My administration supported the 
extensions of the unemployment benefits so that people that have been 
laid off get the help they need. Our economy demands new and different 
skills. We are a changing economy. And therefore, we must constantly 
educate workers to be able to fill the jobs of the 21st century.
    And so therefore, I went to Congress and asked for increased funding 
for Pell

[[Page 1088]]

grants for higher education scholarships. Now, more than 1.9 million 
community college students receive those grants. Community colleges are 
great places for people to learn new skills so they can fill the new 
jobs of the 21st century. And that's why the Department of Labor has 
begun a high-tech job training initiative to create partnerships between 
employers--those people who know what kind of jobs are needed--community 
colleges, and career centers so that those looking for work can match 
education and the skills they learn with the jobs that actually exist.
    And for those who are having the hardest time finding work, I 
proposed to the Congress a new idea called Reemployment Accounts. These 
accounts will provide a jobseeker with up to $3,000 to pay for training, 
daycare, transportation, relocation expenses, whatever it takes to find 
a new job. And if they find a job quicker than the allotted time for the 
$3,000, they get to keep the difference between what they've spent and 
the $3,000 as a reemployment bonus. These accounts, if Congress will 
act, will help more than 1 million of our fellow citizens receive the 
training necessary to become employable, to meet the--to be able to fill 
the new jobs of the 21st century.
    What's interesting is, right now, is that as the economy is getting 
a little better, employers are now beginning to decide whether to hire 
more workers. Hiring is a big decision, especially big for a small 
company. After all, when you take on a new employee, you not only show 
confidence in the person; you've got to have confidence in your 
company's future. And there are six specific actions we can take to help 
build that confidence, so that people can find a job.
    First, people are more likely to find work if health care costs are 
reasonable and predictable. Adding an employee often requires more than 
paying a wage. You know that. It means providing benefits such as health 
insurance. But company costs for health benefits have been rising nearly 
10 percent a year since 2000. These increases cut the capacity to create 
jobs, and we've got to deal with them. We've got to take this issue 
straight on.
    We can help small businesses by allowing them to join together to 
shop for health insurance, allowing them to pool their risks in what's 
called associated health care plans. It makes sense to give small 
businesses the same bargaining power that big companies enjoy, so they 
can reduce their health care costs. The House of Representatives has 
passed a good bill. It is time for the Senate to act. I thank Senator 
Talent for his support and leadership.
    In order to address another cost of rising health care, we must fix 
the problem of frivolous lawsuits against our doctors and hospitals. 
Litigation or the fear of litigation is causing doctors to quit the 
practice of medicine. Medicine is becoming less accessible because of 
the frivolous lawsuits. And the doctors that continue to practice who 
fear a lawsuit will try to protect themselves from the lawsuit by 
overprescribing, by covering themselves, by practicing defensive 
medicine, which drives up the cost of health care for everybody. And it 
drives up the cost of health care to the Federal budget. Frivolous 
lawsuits increase the cost to the Federal budget because of increases in 
Medicaid costs and Medicare costs and veterans' costs. Therefore, 
medical liability reform is a national issue that requires a national 
solution.
    I proposed to the United States Congress a reasonable reform for 
medical liability. Any patient that has been harmed should recover all 
economic damages. We should have a cap of $250,000 on noneconomic 
damages. If harm is caused by serious misconduct, we ought to have 
reasonable punitive damages. The House passed the bill; it is stuck in 
the Senate. It is time for the United States Senate to pass medical 
liability reform, for the sake of job creation in America.

[[Page 1089]]

    Secondly, we ought to take action on a lawsuit culture that affects 
the workers in every business, not just the docs. Industry estimates 
show that litigation is a $200-billion-a-year burden on the U.S. 
economy. Obviously, when big money goes to trial lawyers, it doesn't go 
to workers. So I proposed--and the House has approved, and it's stuck in 
the Senate--an idea to help relieve the cost of lawsuits. And that is 
class action reform. We ought to make it easier to move class action and 
mass tort lawsuits into the Federal courts so that trial lawyers won't 
be able to shop around our country to find a favorable court.
    And as we are reforming class action, it also makes sense to make 
sure that when a verdict is handed down, that the money actually goes to 
the people who have been harmed.
    Thirdly, a growing economy depends on steady, affordable, reliable 
supplies of energy. And yet, as we've seen recently, businesses have had 
to cope with constant uncertainty, uncertainty because of shortages and 
energy price spikes or blackouts. It is hard to be able to plan for the 
future when you're worried about energy supply. And this is especially 
true for manufacturing companies, which use about a third of the 
Nation's energy.
    And so we needed a comprehensive national energy plan, one that 
seeks to upgrade the electricity grid, that makes reliability standards 
by those who deliver electricity mandatory, not voluntary. We need to 
promote new technologies and alternative sources of energy. Someday we 
may just be growing our energy right here in the State of Missouri. But 
in the meantime, we've got to find more sources of energy here at home 
in an environmentally friendly way. I've been calling for Congress to 
pass a comprehensive energy plan for 2 years. For the sake of national 
security, for the sake of economic security, we need to be less reliant 
on foreign sources of energy.
    People are more likely to find work if the resources of businesses 
are not spent complying with endless and unreasonable Government 
regulation from Washington, DC. We will meet our duty to enforce laws, 
whether it be environmental protection laws or worker safety laws. But 
we want to simplify regulations in this administration. And we're 
working hard to do so.
    I'll just give you one example. We streamlined tax reporting 
requirements for small businesses, helping 2.6 million small businesses 
save what is estimated to be 61 million hours of unproductive work. By 
streamlining regulations, by making regulations more simple, the small 
businesses that were affected by this change have now got more money to 
invest in their businesses, which means it's more likely they will hire 
somebody. Easing the burden of excessive regulation on all businesses is 
important for job creation all across our country.
    Fifth, people are more likely to find work if we continue to expand 
trading opportunities for our goods and services. My administration is 
opening up new markets around the world for products that carry the 
international mark of quality, a label that says, made or produced in 
America.
    Yesterday I signed legislation creating free trade agreements with 
Singapore and Chile. These agreements will lower tariffs on American-
made goods and make our goods more competitive abroad.
    Let me give you an example of what I'm talking about. American-made 
heavy machinery, such as motor grader, costs $11,200 more when sold in 
Chile because of extra tariffs. If that machinery were made in Canada or 
the European Union, it would carry no tariff. Therefore, an American 
product, because of the tariffs that existed, were priced out of the 
reach of the buyer in Chile. Because of what the bill I signed--because 
of my desire to make sure the playing field is level around the world, 
manufacturers will be able to compete on a level playing field. And 
there's no doubt in my mind that when the playing field is level, 
American workers can compete with anybody in the world.

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    Finally, people are more likely to find work if businesses and their 
workers can be certain that the lower tax rates of the last years will 
stay in place. Today, you don't have that confidence they'll stay in 
place, and there's a good reason--because under the laws that were 
passed, tax relief is set to expire.
    The death tax, which is being phased out and will disappear in 2010 
but comes back to life because of a quirk in Senate rules, will be 
revived in 2011. That doesn't make any sense to say to the small-
business owner or the farmer or the rancher, ``We're going to phase out 
the death tax, which is a bad tax to begin with, and then let it pop 
back to life.'' But that's reality.
    Or how about this: The capital gains tax reductions, a vital part of 
encouraging capital formation, will rise by a third in 2008. The 
incentives for small businesses will vanish in 2006. At midnight on 
December 31, 2004, the $1,000 child credit is set to fall back to $700 
per child. The marriage penalty will take a bigger bite. That's the way 
the Congress did it.
    What Congress needs to do is to get this message: When we threw out 
the old taxes, Americans didn't expect to see them sneaking in through 
the back door. For the sake of growth--for the sake of economic growth, 
for the sake of job creation, the United States Congress must make these 
tax cuts permanent.
    I know there's talk about the deficit. The deficit is caused when 
less revenues come into the Treasury relative to expenditures. And when 
you have a recession, less revenues come into the Treasury. But also 
remember, that time we're at war. My attitude is, any time we put one of 
our soldiers in harm's way, we're going to spend what is ever necessary 
to make sure they have the best training, the best support, and the best 
possible equipment.
    And the tax relief, which is stimulating economic growth, is a part 
of the deficit. It's about a quarter of the deficit. But this economy, 
as it grows, will yield more money to the Treasury. And I've laid out a 
5-year plan to reduce the deficit in half. That assumes I have a willing 
partner in the Congress. Congress must hold the line on unnecessary 
spending.
    I have proposed a 4-percent increase in discretionary spending for 
this year's budget. It's about equal to the increase of the average 
family budget. If it's good enough for American families, it ought to be 
good enough for the appetite of some of the Congressmen. They need to 
stick with that agreement. They need to understand that in order to cut 
the deficits in half, we must have spending discipline in Washington, 
DC. And I will insist upon spending discipline in Washington, DC.
    There's a lot we can do now that the Congress is back in town. And I 
look forward to working with both Republicans and Democrats to set the 
framework for continued economic prosperity and growth.
    I mentioned earlier, I'm optimistic about our future in this 
country. If you've seen what I've seen, you'd be optimistic too. I've 
seen the great spirit of the country. I know the attitude of the 
American people. I know the determination and will, the willingness to 
work hard, the willingness to place family above self, the willingness 
to serve something greater than yourself--that's the American spirit. 
And it is strong, and it is alive, and it is great.
    I have confidence in the future of America. I have confidence in our 
economy, because I have great confidence in the creativity and the 
enterprise of the American people.
    Thank you for coming. May God bless you, and may continue to bless 
America.

Note: The President spoke at 11:31 a.m. at the Kansas City Convention 
Center. In his remarks, he referred to Terrence P. Dunn, chairman of the 
board, and Peter S. Levi, president, Greater Kansas City Chamber of 
Commerce; Paul Rodriguez, chair-elect, and CiCi Rojas, president, 
Hispanic Chamber of Commerce of Greater Kansas City; and

[[Page 1091]]

Thomas H. Holcom, Jr., member, board of directors, Angel Flight Central, 
Inc.