    [Public Papers of the Presidents of the United States: George W. Bush (2006, Book I)]
    [May 17, 2006]
    [Pages 942-944]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Signing the Tax Increase Prevention and Reconciliation Act of
    2005
    May 17, 2006

        Thank you all. Please be seated. Good afternoon, and welcome to the
    White House. It's nice to see so many Members of Congress at this end of
    Pennsylvania Avenue. [Laughter] And you've come for a really good
    reason. This is a good day for American workers and families and
    businesses. You have passed a bill that will keep our taxes low and keep
    our economy growing. And I'm really pleased to be able to sign this
    vital piece of legislation. Thank you for your leadership.
        I'm glad you're here, and so is the Vice President. I'm proud to be up here with Vice President Cheney. I
    couldn't have picked a better person to be the Vice President of the
    United States. I appreciate Secretary John Snow
    for his leadership on this issue. Mr. Secretary, you have made a
    difference. I'm proud of your leadership. Thank you.
        I want to thank the Speaker of the House, Denny Hastert. Mr. Speaker, welcome back to the White House. Thank
    you for your leadership. And I want to thank Senator Bill Frist, the Senate majority leader. Both these men have shown
    fine leadership capabilities on an important issue for the American
    people.
        I want to thank Mitch McConnell, Jon Kyl, Kay Bailey
    Hutchison from the
    United States Senate. I want to thank John Boehner, Deborah Pryce, Eric
    Cantor. I particularly want to pay my respects
    to the chairman of the Senate Finance Committee and the chairman of the House Ways and Means
    Committee; Chuck Grassley and Bill Thomas
    are incredibly able legislators. They've done a fantastic job on behalf
    of the American people, and our Nation owes them a debt of gratitude. I
    appreciate all the Members being here today.
        This economy of ours is hitting full stride. In the first quarter of
    this year, our economy grew at an annual rate of 4.8 percent. This
    follows a vigorous 2005, when the American economy grew at 3.5 percent.
    The past 2\1/2\ years, we've added more than 5.2 million new jobs.
    Productivity over the last 5 years has grown at the fastest rate in
    decades. Higher productivity leads to higher wages for the American
    workers. Hourly compensation grew at an annual rate of 5.7 percent in
    the first quarter of this year. American workers are taking home bigger
    paychecks, and their standard of living is on the rise. The American
    economy is powerful, productive, and prosperous, and we're going to keep
    it that way.
        Economic growth begins with the hard work of the American people and
    good policies in Washington, DC. Over the past few years, our economy
    has faced a lot of challenges. We've been through a recession, a stock
    market decline, corporate scandals, an attack on our country, high
    energy prices, and major natural disasters.

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    But we acted. We believe that our economy prospers when the American
    people make their own decisions about how to save and spend and invest
    their own money. And starting in 2001, we delivered the largest tax
    relief since Ronald Reagan was in the White House.
        We reduced taxes for every American who pays income taxes. We
    doubled the child tax credit, reduced the marriage penalty, created new
    incentives for small businesses to invest. We put the death tax on the
    road to extinction. The American people have used their money better
    than the Government ever could have. They've used the tax relief to
    provide for their families and create jobs and help the American economy
    become the envy of the industrialized world.
        Our progrowth policies stand in stark contrast to those in
    Washington who believe you grow your economy by raising taxes and
    centralizing power. They are wrong. Our progrowth economic policies are
    working for all Americans.
        One of the most important decisions we made was to cut the taxes on
    dividends and capital gains. These cuts were designed to lower the cost
    of capital and to encourage businesses to expand and hire new workers.
    And these tax cuts are doing exactly what we expected. When these cuts
    were passed in 2003, business investment had been dropping for several
    years. Since then, business investment has been growing at more than 9
    percent a year. Spending on equipment and software has hit record
    levels. And businesses have hired millions of new workers to fill the
    jobs that this investment creates.
        The cuts on dividends and capital gains are reaching families and
    businesses alike. About half the households in America, 57 million in
    all, have some investment in the stock market. They either own shares in
    individual companies or through mutual funds. Sometimes they own these
    shares through their retirement plans. By cutting the taxes on dividends
    and capital gains, we helped add about $4 trillion in new wealth to the
    stock market.
        If you have a mutual fund for your family, these tax cuts made you
    better off. If you have an IRA or a 401(k), these tax cuts will help
    provide a better retirement. If you're a senior who depends on dividend
    income to make ends meet, these tax cuts have led to a better check each
    month. At all levels of income, the tax cuts on dividends and capital
    gains are letting Americans keep more of their own money and live a
    better life.
        The danger was that the tax cuts on the dividends and capital gains
    were set to expire in 2008. That's created great uncertainty, because
    businesses and investors couldn't plan for the future without worrying
    about a big tax increase around the corner. That uncertainty discourages
    investment and expansion. It reduces opportunities for workers and
    families. The bill you passed helps to address this problem by extending
    the tax cuts on dividends and capital gains. By reassuring businesses
    that their taxes will not be going up any time soon, the bill increases
    confidence for our job creators. It will help millions of American
    families who are saving for the future.
        Part of our strategy to cut our deficit in half is to continue to
    grow this economy. Tax relief has helped a growing economy, which means
    more tax revenue for the Federal treasury--2005 tax revenues grew by
    $274 billion, an increase of nearly 15 percent over the previous year.
    This year, the economy is still growing, and tax revenues are growing
    with it. So far, tax revenues are 11 percent higher than they were at
    the same point last year, which is better than projected. More than a
    quarter of these tax revenues come from corporations who pay more
    because they're growing with the economy.
        By growing this economy, we're staying on track to meet our goal of
    cutting the deficit in half by 2009. But to meet that goal, we must be
    strong on controlling the Federal appetite for spending. Every year

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    since I took office, we've slowed the growth of discretionary spending
    that's not related to the military or homeland security. My last two
    budgets have actually cut this kind of spending.
        Congress is now considering an emergency supplemental bill that can
    show the American people we're determined to be fiscally sound with
    their money. I've set a clear limit on spending that I'll accept for
    this legislation, and if this bill goes over the limit or includes
    nonemergency or wasteful spending, I'll veto it.
        For the past 50 years, Republicans and Democrats have had many
    differences, but they've often been able to agree that the American
    people should keep more of their own money. Presidents like John F.
    Kennedy and Ronald Reagan proposed and cut taxes with strong bipartisan
    support, and in each case, the economy prospered and grew.
        The tax cuts we passed in 2001 and 2003 have also helped the economy
    grow and prosper. Opponents of these tax cuts were wrong when they voted
    against them the first time. They've been wrong to oppose extension of
    tax relief in the face of overwhelming evidence that the tax cuts have
    helped grow the economy and create millions of new jobs.
        With this bill, we're sending the American people a clear message
    about our policy. We're going to continue to trust the American people
    with their own money. We'll continue to be wise with the people's money
    in Washington. We'll continue to work and to make sure the tax cuts are
    permanent. And the bill I sign today is a victory for the American
    taxpayers, and it's a strong lift for our economy. Congratulations on a
    job well done.
        It's now my honor to sign the Tax Increase Prevention and
    Reconciliation Act of 2005.

    Note: The President spoke at 1:58 p.m. on the South Lawn at the White
    House. H.R. 4297, approved May 17, was assigned Public Law No. 109-222.