[Public Papers of the Presidents of the United States: George W. Bush (2006, Book II)]
[July 27, 2006]
[Pages 1454-1462]
[From the U.S. Government Publishing Office www.gpo.gov]
Remarks to the National Association of Manufacturers
July 27, 2006
The President. John, thanks. Thanks
for the good, short introduction. [Laughter] Thanks for having me here.
I want to thank you all for doing what you do for the country. I
appreciate your leadership. I appreciate the entrepreneurial spirit
which is represented in this room. Our manufactur-
ers make products that enrich our life, that drive and sustain our
economy, that create jobs and opportunity. When America's manufacturing
sector is healthy, this country is healthy. And that's what I want to
come to talk about, how to make sure that this Nation has a healthy
economy and how
[[Page 1455]]
to make sure the manufacturing sector remains one of the most important
parts of our economic vitality.
I want to thank John Luke for his
chairmanship of the National Association of Manufacturers. I appreciate
you hiring my buddy, the former Governor of Michigan, John Engler--[laughter]--who is doing a fine job, I might add.
I'm proud to be joined today by a member of my Cabinet, Ambassador Susan
Schwab, who is the U.S. Trade
Representative. Thanks for coming. I'm going to talk a little bit
about--[applause]--and I appreciate the members of the National
Association of Manufacturers. Thanks for coming to Washington; thanks
for giving me a chance to visit with you.
I understand the importance of manufacturing to our Nation's
economic leadership and prosperity. Our economic growth is powered by
manufacturing. Catch this fact: By itself, U.S. manufacturing output is
greater in size than the eighth largest economy in the world. Our
manufacturers pioneer the innovations, technology, and methods that
maintain this Nation's economic leadership. And it's important that we
remain the economic leader in the world, for the good of our people.
Manufacturers are responsible for nearly three-fifths of all private
sector research and development. In other words, if you want to be the
economic leader, you must have research and development to constantly
stay ahead of the competition. And the manufacturing sector of the
United States spends a lot of money making sure this country is
innovative.
Our Nation's standard of living depends on our manufacturers.
America's manufacturers provide our people with rewarding careers and
high-paying jobs. Manufacturing jobs pay over 20 percent more than the
national average. If you're working for a manufacturing company, you're
likely to be getting paid more than your neighbor. Your standard of
living is higher.
For decades, our manufacturers have faced the pressures of increased
competition and globalization, but you've handled that competition well.
Not only have you handled it well, you've excelled.
Manufacturing today represents roughly the same share of the real
economy as it did 20 years ago. Every day, American manufacturers
confront the competitive challenges of the global marketplace. I know
that. You especially know that. But every day you stay innovative and
creative and work on productivity, you continue to lead this Nation. And
so I'm here to thank you, to thank you and your workers.
You know, we've overcome a lot together. Sometimes it's easy to
forget short-term history. I'm sure you still remember the days of
recession; stock market adjustment; corporate scandals; the terrorist
attack of September the 11th, 2001, that still drives my foreign policy;
the response of our Government to defend ourselves; natural disaster;
high energy prices. We've faced a lot. But as John mentioned, I'm the kind of fellow that sees a problem and
likes to address it head on.
And working with the Congress, we cut the taxes on you to get this
economy back. I believe that when you have more of your own money in
your pocket to save, spend, or invest, this economy is going to grow. I
would rather have the American people spending their own money to drive
this economy forward than Government trying to drive the economy
forward. And so we cut the taxes. We didn't cut the taxes on a few; we
cut the taxes on everybody who pays taxes. We doubled the child tax
credit. We reduced the marriage penalty. We created new incentives for
small businesses to invest.
We cut the taxes on dividends and capital gains, and we did so
because we thought it was important to lower the cost of capital. If
you're counting on the private sector to help recover from the tough
situations we've been through, what you want to do is make capital less
expensive so you can borrow easier or raise money faster, to invest.
Investment means jobs and expansion.
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We put the death tax to the road--on the road to extinction. I
believe it's unfair to say to somebody who's built up some assets--a
farmer or businessowner--that the Government is going to tax you twice,
once when you make your money and then once when you move on and try to
pass it on to your relatives. That's called ``taxation without
respiration.'' [Laughter]
This Congress passed--repealed the death tax, and the Senate is
working on it. I strongly urge the United States Senate to come together
with the House and put an end to the death tax for the sake of economic
expansion.
Our policies have worked. Let me rephrase that: Our policies to
enable you to work better have worked. After all, the economy grew at an
annual rate of 5.6 percent in the first quarter of 2006. In 2005, the
American economy turned in a performance that's the envy of the
industrialized world. Our economy grew at 3.5 percent. That's faster
than any other major industrialized nation.
Since August 2003, this economy of ours has created 5.4 million new
jobs. That's more than Japan and the 25 nations of the European Union
combined. For 34 straight months, the American economy has added jobs.
Our unemployment rate is 4.6 percent. That's below the average of each
of the past four decades. Manufacturing employment has increased by
18,000 over the past year--it's the largest 12-month gain since the
period ending September of 1998.
Across the United States, real after-tax income is up more than 7
percent per American. Since January 2001, productivity is on the rise.
Our productivity has been growing at 3.5 percent for the past 5 years.
That's the fastest rate in nearly four decades. American workers are
more than 18 percent more productive than they were in early 2001.
Let me talk about productivity for a minute; it's kind of a concept
that some may not relate to. From 1973 until 1995, productivity grew at
1.4 percent per year. At that rate, it would take 50 years to double the
standard of living for Americans. Our economists now project that
productivity will grow by 2.7 percent over the long term, and at that
rate, we can double the standard of living of Americans nearly twice as
fast. In other words, the more productive a society it is, the better
lifestyle our citizens will have.
Manufacturing activity is growing. For 37 straight months, the
Institute of Supply Management's manufacturing index has indicated that
the manufacturing sector is expanding. Over the past 12 months,
industrial production has increased 4.5 percent. And this morning the
Commerce Department reported that new orders for durable manufacturing
goods were up 3.1 percent in the month of June. What I'm telling you is,
the economic policies we have pursued are working.
And the fundamental question facing this country is, what do we need
to do to ensure the economy remains strong? What is it that Congress and
the administration can do to help the manufacturing sector continue to
grow? What is it we must do to make sure the entrepreneurial spirit
remains strong? What actions must we take to make sure America is the
economic leader in the world?
Well, here are some ideas. One is, we've got to be wise about how we
spend your money. We've got to be wise when we appropriate money here in
Washington. Deficits can hurt economic vitality. And I understand that.
So the first thing you've got to do here in Washington is set priorities
when it comes to spending the people's money.
And I'll tell you my priority. My priority is this: So long as we
have a man or woman wearing our uniform who is in harm's way they will
get all they need to secure the victory. And we'll spend resources to
protect this homeland. September the 11th reminded us that we're no
longer an island, that we can't assume problems overseas won't come home
to hurt us. Our most
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solemn duty in Washington, DC, is to protect the American people, and we
take that duty seriously.
And that priority is reflected in the budgets. And so we've got to
show spending restraint elsewhere in the budget if we're going to be
wise about how we spend your money. We've reduced the rate of growth of
nonsecurity discretionary spending since 2001, and my last two budgets
have cut this kind of spending. We said to Congress, ``Here's our
priorities; you need to make tough choices.'' And they've come along
with us. And I hope the appropriations bills coming out this fall match
this same fiscal responsibility that we've shown in the past.
I also addressed mandatory spending earlier this year when I signed
the Deficit Reduction Act, which saves taxpayers nearly $40 billion over
the next 5 years. In other words, we're working with Congress to be wise
about spending your money.
I set a goal for this country that we cut the deficit in half by
2009--just had an interesting statistic come out in the Mid-Session
Review recently. That's the time we take a look and see how things are
going. When Rob Portman, who is the
Director of OMB, analyzed revenues and spending, he projected that tax
revenues will grow by $246 billion during this year. In other words,
when you cut the taxes and you grow your economy, more revenues come
into the Treasury. And it looks like we're on track to balance our
budget by 2008 [cut the deficit in half by 2008].* The current deficit
is now--projected to be 2.3 percent of GDP. We're fulfilling our
responsibilities. We're meeting the goal of reducing this deficit. The
best way to reduce the deficit is to keep progrowth economic policies in
place by keeping this Tax Code--making these tax cuts permanent and
being wise about how we spend your money.
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*White House correction.
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If Congress really does want to work with the administration to make
sure that there's fiscal sanity in Washington, they need to give me the
line-item veto. And I appreciate your hard work on this issue. Thank you
for supporting our attempt to work with Congress to make it easier for
both parts of Government, both branches of Government, to be smart about
how we spend the people's money.
Forty-three Governors have got the line-item veto. It's a useful
tool. It works. It's time to bring the important tool to Washington. The
line-item veto will allow a President to target unnecessary spending.
See, sometimes they get these big spending bills and put a little
something in there for their district. [Laughter] Sometimes they're able
to do it without a hearing. Just kind of ends up in there, in the bill,
without much scrutiny. They're able to put earmarks on large bills.
What the line-item veto would enable a President to do is take a
look at the big bills and kind of call out some of the programs that
might not fit into the national priorities, and then send it back up to
the Hill for an up-or-down vote. That's one way to make sure there's
fiscal sanity in the budget. But the line-item veto would do something
else. It would make lawmakers hesitant to try to tack something into the
bills in the first place if they knew that their programs would see the
light of day. In other words, sometimes sunshine is the best way to heal
a problem.
I want to thank you for helping get the bill out of the House of
Representatives. A bipartisan majority supported this concept of a line-
item veto, a concept where the executive branch and the legislative
branch would work closely together. And the United States Senate needs
to take up this important legislation.
I was pleased the other day when my opponent in the 2004 campaign,
John Kerry, came down to visit with me in the
Cabinet Room to endorse the line-item veto. He's one of the bill
sponsors of the line-item veto. The Senate needs to get the bill passed
and to my desk.
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I understand what you understand, that one of the biggest drags on
our economic growth is going to be Social Security and Medicare, unless
we do something about it. See, we've got a lot of guys like me who are
fixing to retire. [Laughter] I'll be 62 in 2008--which is a convenient
time to turn 62. [Laughter] And there's a lot of baby boomers that are
living longer and that are getting ready for the benefits that we have
been promised--by the way, benefits that are larger than the previous
generation's benefits.
And there are fewer people paying into the system to make sure that
the promises that have been made to my generation are kept, which means
these big programs are becoming insolvent very quickly. There's an
overhang. There's unfunded liabilities that we've got to address. One of
the reasons why Hank Paulson came to
Washington is because he wants to address big problems--he's the new
Secretary of the Treasury. He's a can-do kind of person, John; he can get things done. And I'm looking forward
to working with Hank and working with the United States Congress to once
and for all put Social Security and Medicare on the road to solvency. We
owe it to a new generation of Americans coming up, and we owe it to our
entrepreneurs and risk takers to solve this problem now.
It's so easy in Washington to say, ``Well, it's not necessarily a
crisis; let's just shove it down the road.'' That's not why I ran for
office. I believe a President and a Congress must confront problems now
and not pass them on to future generations, which is what I intend to
do.
Here's some other ideas to make sure we're an economic leader. We've
got to remain competitive. We've got to make the R&D tax credit
permanent. I talked about--if you're somebody trying to figure out how
much to spend on R&D and you're not sure whether or not the tax credit
will be around in the out years, you're less likely to take risk, less
likely to spend the money, less likely to invest in the future, so the
R&D tax credit--the permanency of the R&D tax credit makes sense if you
want to remain a competitive nation.
And here at the Federal level, I have proposed doubling the Federal
commitment to the most basic critical--the most critical basic research
in physical sciences over the next 10 years. I'll tell you why I have. I
think that the Federal Government can help leverage ideas. I know it's
in our national interest to spend taxpayers' money on research. The
research that we conduct today will enable future generations to remain
competitive tomorrow. I don't know if you know this or not, but the iPod
came about because of a lot of Federal research--or probably the most
known one is the Internet. In other words, it makes sense to invest
taxpayers' money because there's a greater good to be gained when it
comes to investing in basic research.
You know what I know, that we better have an educated workforce if
we're going to be able to compete in the 21st century. We've made great
strides in early grade education. I don't know if you followed the
debate on No Child Left Behind, but it's a really important piece of
legislation. I'll tell you why it's important, is because for too long
we had a system that just shuffled kids through the schools. You know, I
spoke to the NAACP the other day, and I recounted a story of when I was
a Governor. I remember going to a high school in a pretty tough
neighborhood in Texas. I'll never forget the ninth grade teacher looking
me in the eye and saying, ``I'm having trouble teaching.'' And I said,
``Why is that?'' He said, ``Because my kids can't read.'' In other
words, they'd just been moved through.
We can't compete in the 21st century if we have a system that does
not hold people accountable. And so we said, ``In return for additional
Federal money from Washington, DC, we expect you, the State, to
measure.'' Why do you measure? Because you want to know early in a
child's
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career whether they can read or write and add and subtract. And if a
child is falling behind, there's extra money in No Child Left Behind.
The whole purpose is to have an accountability system that is able to
detect problems early, before it's too late. And guess what? Because we
measure, we can now see that an achievement gap is closing.
But there's more to be done, particularly in math and science. We
need to apply the same rigor of No Child Left Behind that we use in
reading--in No Child Left Behind--in math in the middle grade. We're
doing fine early in math. The problem is, is that the measurement shows
us that we're falling behind in math in the middle grades. We need to
measure and solve problems earlier for our children than high school
when it comes to math and science.
I'm a big believer in Advanced Placement. These are programs that
believe in high standards and high accountability. And so we're going to
train 70,000 high school teachers over the next 5 years to head AP
courses in math and science.
I'll never forget going into Dallas recently to see an AP class
there. And presumably, this little school graduates more AP students
than any school in the country, at least that's what the Texas teacher
told me. But you know how we Texans are, we tend to--yes, we--
[laughter]. Let's just say this: They graduate a lot. [Laughter] And
there were Latinos and African Americans. These bright young kids will
become--will be the scientists and engineers. But they need that rigor;
they need to be challenged; they need to have high standards; and they
need a teacher group that is capable of teaching Advanced Placement.
We need to have an adjunct teacher corps to bring 30,000 math and
science professionals into the classroom. Sometimes science isn't viewed
as cool. But we need to make sure that students understand that it is
good to take science and engineering and math. As a matter of fact, we
need to be able to connect the fact that the jobs of the 21st century,
the high-paying, high-quality jobs will depend on a person's ability to
be able to be an engineer or a mathematician or a scientist.
And I want to thank John and your
crowd for helping us with this American Competitiveness Initiative. It's
vital for our country that we take action now to make sure that we
remain the leader in the world when it comes to the economy.
We've got to do something about health care to make sure we're
competitive. One thing we will do is we'll take care of the poor and the
elderly. This Medicare bill I signed is a really good piece of
legislation that now says to poor seniors, you no longer have to choose
between your medicine and food and electricity. They've been talking
about modernizing Medicare for a long period of time, and my
administration, working with the United States Congress, finally got it
done.
I'm a big believer in health savings accounts, because it puts
customers in charge of the health decisions. I would hope that as you
analyze your health care plans, look at health savings accounts as ways
to save money, but equally importantly, ways to empower your employees
to make rational choices about their health care.
In order to make sure customers have got more choice in their health
care, you've got to have transparency. You know, health care is one of
the few industries where you really don't know pricing. How many of you
ever actually asked a doctor, ``What are you going to charge me, doc?''
Generally, you don't ask that because a third party pays the bill. If
you're worried about rising health care costs, it seems like it makes
sense to have transparency in pricing and quality and to give consumers
more choices to make in the marketplace, to empower people to ask the
questions necessary to make sure there is some rational pricing in
health care.
And along those lines, we're strongly supporting health IT. Many of
you are very
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productive because you've been able to employ information technology. In
the health care field, you can find places of medicine where people are
walking around with handwritten files, and sometimes it's hard to read a
doctor's handwriting. And sometimes the files get misplaced, and a lot
of times there are medical errors as a result of that and cost
inefficiencies in the system. And so health information technology will
help modernize our health care system.
And if you're truly interested in making sure that you have health
care that's available and affordable for your employees, you need to
join us in making sure we end these frivolous and junk lawsuits that are
running good doctors out of practice.
A couple more ideas to make sure that we're strong economically. And
I repeat: A strong economy is good for our people. That's why I want
the--America to be the leader, economic leader in the world. It's
because I want the American people to benefit. I want people's
lifestyles to go up. I want people to be able to realize their dreams.
We got to make sure that our energy policy is diverse and balanced
and sound if we expect to be competitive. This is an interesting moment
where we're able to advance new technologies that will make us less
dependent on foreign sources of oil and enable us to be good stewards of
the environment. And we're investing a lot of money to be able to
achieve energy--economic independence, national security independence,
and being good environmental stewards when it comes to energy.
Here's some ideas. One, we must--we must expand our nuclear power
industry if we want to be competitive in the 21st century. We have got
to be wise--[applause]. We have got to push hard to build new plants.
And the energy bill I signed last year is--it's a good step forward.
This Government is going to spend a lot of money on fast breeder reactor
technology. We're going to join with other countries to work on fast
breeder reactor technology so that we can burn reprocessed fuel which
will reduce the waste on civilian nuclear energy. In other words,
there's technological gains to be made that will enable us to even
advance nuclear power even faster.
And by the way, it's not only in our interest to develop nuclear
power, it's in the interest of our country that India and China develop
nuclear power. In the global energy market, when demand for hydrocarbons
goes up in energy in China, it affects your gasoline prices. And
therefore, the more we can help these countries develop technology, the
more we can help them develop a civilian nuclear industry that is safe,
the better off it is for American consumers.
And yesterday--I want to applaud the House of Representatives for
passing an important piece of legislation when it comes to America's
relationship with India. We're spending a lot of money to make sure that
we can have coal-fired electricity plants that reduce the amount of
pollution they put out. We're spending money to make sure that liquefied
natural gas terminals are more quickly permitted. We need to get more
gas into the United States. The House of Representatives has passed a
bill to open up more areas for offshore exploration in the Gulf of
Mexico. I strongly pass that--support that piece of legislation. I urge
the Senate to do so as well.
We're also working hard to promote alternative forms of energy. I
mean, we want--look, I like the idea of people using ethanol to power
their automobiles. So do our farmers. [Laughter] It makes sense, doesn't
it, if you can grow a product that you can power your cars with, to do
so. Every bushel of corn grown in the Midwest makes us less dependent on
oil from overseas.
We're working on battery technologies. They say we're pretty close
to a breakthrough in a battery--where you can drive the first 40 miles
on a battery, and your car doesn't look like a golf cart. [Laughter]
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One of these days our children will be driving cars powered by hydrogen.
In other words, in order to make sure this country is competitive, we've
got to be spending money on technology now, on research and development
now, to change our habits and to make sure we're good stewards of our
environment.
I'm excited about the energy future for this country, I really am. I
think there's going to be some fantastic opportunities for people. And
I'm going to look back on this period, and I know you will, that we made
the right decisions for a new generation of Americans.
I'm also a big believer in trade. That's why Susan's here; so is she. But I'm--what I'm for is trade that opens
up people's markets just like we open up ours; that's what I'm for. I
believe good trade policy--[applause]. Here's my definition of good
trade policy: It's fair. That's all we ask. See, we open up our markets;
you open up yours. You treat us the way we treat you.
There's a lot of talk about the WTO and the Doha development round.
We're very much in favor of it moving forward. We think it makes a lot
of sense. We think it makes a lot of sense for American workers that we
open up markets. We think it makes sense for people who are locked in
impoverished nations that we open up markets. We think trade helps lift
people out of poverty, that's what we believe. So we're strongly
supportive of the WTO round.
I told Susan that she needed to be
flexible; she needed to go in the meetings with flexibility,
particularly when it comes to our agricultural subsidies. Look, I said
to the world last September, we'll reduce them, just so long as our
folks have got access to markets; that's all we ask. Just give us a
chance to compete fairly.
And so we'll continue to work on this agreement. Susan is committed to getting a deal done, if we can. Secretary
of Agriculture Mike Johanns, as well, will
continue to reach out to other nations to achieve our objectives. I want
to thank you for your support on this. My attitude is, we want to be
treated fairly, and the American people and the American manufacturer
and the American farmer can compete with anybody, anytime, anywhere, so
long as the rules are fair.
So there are some ideas for Congress to consider and the
administrative branch to promote, ways to make sure this country is
competitive. One of my big fears is that we lose our nerve, is that we
kind of say, ``Well, there's some new emerging economies, and therefore,
we can't compete; let's just retreat. Why don't we become protective.
Why don't we throw up walls and barriers around the United States of
America. Why don't we just try to isolate ourselves from competition.''
That's not the America I know. The America I know is a country that
is confident, confident in our capacity to compete, entrepreneurial by
nature. There are some smart things we can do, and will do, to make sure
we remain competitive. But one thing we must never do is to not be
willing to do the right policies so we can remain the economic leader of
the world. We owe it to our people to put good policies in place. We owe
it to future generations of Americans to keep the entrepreneurial spirit
strong, and here are some ideas as part of a strategy to do just that.
I want to appreciate what you're doing for the country. I thank you
for the risks you take. I thank you for the folks you employ. Government
is not going to stand in your way. We want to stand side by side with
you to make sure the entrepreneurial spirit remains strong here in the
country.
God bless.
Note: The President spoke at 1:47 p.m. at the Grand Hyatt Washington. In
his remarks, he referred to John Engler, president and chief executive
officer, National Association of Manufacturers.
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