[Weekly Compilation of Presidential Documents Volume 31, Number 24 (Monday, June 19, 1995)]
[Pages 1037-1042]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the White House Conference on Small Business

June 12, 1995

    The President. Thank you very much. Someone once told me that half 
of making a small business work was just consistent, un- 

[[Page 1038]]

failing enthusiasm. I think you have demonstrated that today. [Laughter] 
And I hope you never lose it.
    Let me thank, first of all, my good friend Alan Patricof for the 
wonderful job that he has done in putting this whole conference 
together. I want to thank the other commissioners for the work they have 
done, the corporate sponsors, all the people, the staff people, who 
worked on our meetings out in the State and the regional meetings and 
made sure that we got the reports back here. I thank them all. I thank 
Phil Lader for the fine job that he has done.
    And I want to say a few more words in a moment about the Vice 
President and the reinventing Government group. But let me tell you, 
their--we tried to do something that's hard to do, and may never 
register, but I noticed for years every President would come here and 
just continue to run against the Government. And it was always good 
politics, except the Government never changed because most people who 
worked here say Presidents come and go, but we'll be here when they're 
gone. [Laughter] And we decided that most of those people were pretty 
good people and that they didn't wake up every day wanting to make your 
life miserable and wanting to do things that were counterproductive and 
hurt the American economy.
    And the Vice President and people with whom he has worked, Elaine 
Kamarck, Bob Stone, Sally Katzen, so many others, they actually decided 
to see if they couldn't get these folks involved in working with us to 
try to change the culture of Washington so that when we're gone, they'll 
be different. And that's never been done before in my lifetime. And I 
want to thank him and all of them for doing it. It's hard work. It's 
thankless work. It's hour after hour after hour of arguing and gaining 
ground inch by inch that no one will ever see. But I'm telling you, that 
is what we were hired to do. And that is what he has led the way in 
doing. And the country owes him a great debt of gratitude.
    You know, there have only been three of these conferences held since 
our Nation was founded. This will be the last one in the 20th century. I 
also want to thank the Members of the Congress who made this possible, 
people in both parties who supported it. And I want to say a special 
word of thanks to all of you. Everybody here had to take precious time 
away from your business, and some of you had to close your businesses 
down and come here at great personal financial sacrifice to yourselves, 
and I want this to be worth your while. And I'm grateful to you for 
doing it, and I thank you.
    You know, sometimes I think things are pretty rough around here, and 
I often think they're entirely too partisan. We--the Speaker of the 
House and I tried to change a little of that yesterday up in New 
Hampshire, and I think we did the right thing.
    Just in case you think this is something new, let me tell you that 
in 1938, President Roosevelt invited small-business people from around 
the country to gather over at the Commerce Department. Just after the 
morning session started, the participants became so argumentative that 
the Commerce Department guards had to be called in. [Laughter] An 
inventor from Philadelphia became so rowdy that the DC police had to 
take him out of the room--[laughter]--and I quote from the historical 
record, ``put him in a hammerlock, give him a finger twist, and assign 
three officers just to keep him quiet.'' [Laughter] Well, it was 42 
years before they held another White House Conference on Small Business. 
[Laughter] I hope you all make it to the lunch break today. [Laughter]
    You know, the last couple of conferences have really produced some 
positive efforts, from the Paperwork Reduction Act of 1980 to the 
Regulatory Flexibility Act in 1980. This year is no different. This 
conference is going to produce some substantive changes, and it already 
has, because of the State and regional meetings. And I want to talk to 
you about them today, ideas that grow out of the recommendations that 
you and your colleagues all across America have made.
    I ran for President with a pretty simple vision: I wanted to restore 
the American dream and bring the American people together in a period of 
rapid change here at home and around the world, an economy in which jobs 
and capital, technology and ideas flow across borders at lightning 
speed, with great opportunities, but enormous challenges, an economy in 
which we were pro- 

[[Page 1039]]

ducing jobs and businesses at record rates but in which incomes were 
stagnant and insecurity was rising for people, especially in their 
middle-aged years when they needed to be thinking about whether they 
could guarantee their children a better shot than they had had.
    My job as President is to do everything I can to see that our people 
and our businesses have the tools they need to meet the demands of the 
present age and seize the opportunities. We know that small business is 
the engine that will drive us into the 21st century. We know that big 
corporations get a lot of attention--[applause]--thank you--we know that 
the big companies get a lot of attention. And they should; they do 
important things for America. But you employ most of the people, create 
more than half of what we produce and sell, and create most of the new 
jobs, and we need to respond to that.
    Small business is the American dream. We look around this room, we 
see, and you can hear when you share each other's stories, innovation 
and ingenuity and daring.
    I'll never forget one thing that Hillary told me years ago. We were 
talking about all the jobs we had when we were kids, and all the jobs we 
had going through college and law school and all of that. And she said 
that the most important job she ever had in her life she thought as a 
child was a job she had working in a small store in her hometown when 
she was in high school in the summertime, because this person just 
opened this new business to try to compete with the only other person 
doing the same thing in town. And she said for a couple of weeks nobody 
came in. And she realized, and I've heard her say it to me 50 times 
since she first said it, the extraordinary amount of personal courage it 
takes to start a new enterprise and risk yourselves in this environment. 
That is what made this country great. And we have to nourish it, support 
it, enhance it, not undermine it. That's why you're here.
    When I came here 2\1/2\ years ago, the first thing we had to do is 
to try to generate a broad-base economic recovery because we were in a 
period of the slowest job growth since the Great Depression. And we were 
having serious problems. We had quadrupled our country's debt and 
tripled the annual deficit in only 12 years, while reducing our 
investment in the future in many important areas. We knew we had to get 
our fiscal house in order, bring that deficit down, and at the same time 
continue to invest in the skills of our people and the technologies of 
the future, to open markets, to create more jobs, and also, and quite 
importantly, to reinvent the way this Government works to make it 
relevant to the future toward which we're heading, not tied to the past 
which we have long since left.
    Now this hard work is paying off. There's a lot of work still to do, 
but the facts speak for themselves: The economy is up; inflation is low; 
trade is expanding; interest rates and unemployment are down. The 
strategy is working. Over 6\1/2\ million new jobs have come into this 
economy in the last 2 years, almost all of them in the private sector, a 
far higher percentage of new jobs in the private sector as opposed to 
Government than in the previous decade. We have more than 80 new trade 
agreements covering everything from cellular telephones to rice from my 
home State and everything you can imagine in between. The deficit is 
being cut already by a trillion dollars over 7 years, and we are going 
to cut it more.
    We are reducing--the deficit is now going down 3 years in a row 
under the budgets already passed for the first time since Mr. Truman was 
the President of the United States. And under the budgets already 
passed, thanks to the reinventing Government effort, we are going to 
reduce the size of the Federal Government by 270,000. It will make it 
the smallest its been since President Kennedy was the President of the 
United States.
    In 1993, more new businesses sprung up than in any previous year 
since World War II when we started keeping these statistics. And 1994 
broke the record of 1993. And more and more, importantly, are staying 
alive. In the last 2 years, business failures and bankruptcies have 
plummeted. We wanted to keep it that way. We're doing everything we can 
to accelerate that trend.
    In the 1993 economic program which was passed by the Congress, there 
was a 50-percent cut in capital gains for 5-year investments in new 
businesses capitalized at $50

[[Page 1040]]

million a year or less. I think that will increase access to capital for 
small businesses. We raised the amount that can be deducted for 
equipment expenses by 75 percent. We extended the research and 
experimentation tax credit. We have just extended the deduction for 
self-employed people for their health insurance premiums, and next year 
it will go up to 30 percent from 25 percent. We've also scrapped export 
controls and expanded export assistance to help not only big businesses 
but small businesses sell their products around the world.
    When I came to this office, I had three basic goals for small 
business: I wanted to give new life to the Small Business 
Administration; I wanted to make it easier for you to get credit; and I 
wanted to cut Government, regulations that didn't make any sense so you 
could grow faster. We've come a long way toward meeting these three 
objectives.
    Under the extraordinary leadership of both Erskine Bowles and Phil 
Lader, two people who became heads of the SBA not because they happened 
to be involved in politics but because they knew something about small 
business, which seems to me that should be the basic criteria for 
anybody who ever gets that job in the future under any administration.
    We have a leaner, more invigorated, more committed SBA than ever 
before. We've shrunk the applications for most common loans from over an 
inch thick to a page long, one single page. The SBA budget is now less 
than the taxes paid every year by three companies that received critical 
SBA help early in their careers--Intel, Apple, and Federal Express.
    In the past year more private capital was invested in SBA's venture 
capital program than in the previous 10 years combined. We have 
dramatically reduced the credit crunch in many parts of the country by 
revising banking regulations to encourage lending to smaller firms. And 
the SBA loans grew from 32,000 in 1992 to an estimated 67,000 this year. 
And though we more than doubled the number of loans, the cost to the 
taxpayers was reduced. We've expanded loans to women- and minority-owned 
businesses dramatically--dramatically--without--this is the important 
criteria--we have done it dramatically without lowering the volume of 
loans to other business or without lowering the credit standards one 
single bit.
    The Vice President talked a little bit about the Herculean work that 
he and the others in our reinventing Government group have been doing to 
reduce regulations. Last Friday we announced an initiative that will 
allow you to report wage and tax information to one place. Instead of 
sending the same data to many different Federal and State organizations, 
you can now send it to one place, and we'll do the rest. Next year, in 
32 States next year, people will be able to file their State and Federal 
income taxes together, electronically. Now, that will really save a lot 
of paperwork and problems.
    Today I want to make two further announcements. First of all, we're 
committed to making the regulatory burden lighter, literally lighter, 
specifically 39 pounds lighter. [Laughter] As part of the review I 
ordered at the beginning of the year, we are taking 16,000 pages from 
the Government's Code of Federal Regulations. I thought you would like 
to see those pages.
    Could you bring them out, please?
    These are our others.
    Audience members. IRS, IRS----
    The President. Hey, I'm working on that.
    Now, if you place these end to end, they would stretch for 5 miles: 
50 percent of the SBA regulations; 40 percent of the regulations of the 
Education Department--I want to compliment them; they're also trying to 
fulfill my mandate to have national standards of excellence and then 
support for grassroots education reform, not education reform right out 
of Washington--40 percent of the regulations; 25 percent of the 
reporting burden of the EPA. Now, let me give you an example of what 
this is.
    Audience member. IRS, IRS----
    The President. Do you want to give this talk? [Laughter] We're 
working on that. I already told you we dramatically cut the reporting 
requirements. We're working on the regs, too, on the IRS. If you knew 
how hard we had to work on all these, you'd come on up here and help us 
some more. [Laughter] That's why you're here. Give us a list of the 
other things you want cut. That's why you're here.

[[Page 1041]]

    Audience member. IRS.
    The President. If you give a list, you file your report--you know 
how this works. You've got to get your votes up and make your 
recommendations. But this will make a difference. This will make a 
difference.
    Let me just give you one example of the kind of thing--if I were a 
betting person, and I could afford it--[laughter]--I would wage a 
considerable amount of money that no one will ever write me a letter 
complaining about the demise of these regulations. But I was being 
reasonably conscientious, like I am, I wanted to make sure we weren't 
getting rid of something terribly essential, and so I asked the 
reinventing Government folks to give me an example of the kind of things 
we're getting rid of that I could relate to from my Arkansas roots. And 
I hate to tell you this, folks, but we're about to lose the regulation 
that tells us how to test grits. [Laughter] Now--it's terrible.
    Now, listen to this. I want you to ask yourself if you can do 
without this: ``Grits, corn grits, hominy grits, is the food prepared by 
so grinding and sifting clean, white corn, with removal of corn bran and 
germ that on a moisture-free basis, its crude fiber content is not more 
than 1.2 percent, and its fat content is not more than 2.25 percent.'' 
Here's the interesting part--[laughter]--``When tested by the method 
prescribed in Paragraph B-2 of this section, not less than 95 percent 
passes through a #10 sieve--[laughter]--but not more than 20 percent 
through a #25 sieve.'' [Laughter] Now, here's B-2; it tells you how to 
get that done: ``Attach bottom pan to #25 sieve.'' [Laughter] ``Fit the 
#10 sieve into the #25 sieve, pour 100 grams of sample into the #10 
sieve, attach cover and hold assembly in a slightly inclined position. 
Shake the sieves''--[laughter]--``by striking the sides against one hand 
with an upward stroke, at the rate of about 150 times a minute.'' If 
you've never been in a marching band, how do you know what 150 times a 
minute is? [Laughter] ``Turn the sieves about \1/6\ of a revolution each 
time in the same direction after each 25 strokes.'' [Laughter] ``The 
percent of the sample passing through a #10 sieve shall be determined by 
subtracting from 100 percent the percent remaining in the #10 sieve.'' 
[Laughter] ``The percent of material in the pan shall be considered as a 
percent passing through a #25 sieve.''
    I don't know if we can do without that or not. What they ought to do 
is just have a designated taster like me in every State that knows what 
grits taste like. [Laughter]
    Now, I have to tell you, there is some real sacrifice in this, 
though. We've all had a good laugh, but there's some real sacrifice. I 
personally am having to give up this 2,700-word regulation on french 
fries. [Laughter] Don't worry about it, folks. Our health insurance plan 
has counseling for this sort of thing. I'll be all right. [Laughter]
    Let me tell you that we've had a good laugh here today, but--and 
while a lot of this seems self-evident, it's not always easy to get rid 
of these things that are outdated and don't make any sense to us. But 
it's even harder to make regulations that need to be on the books but 
have become tangled up and senseless over the years, untangled, 
sensible, and workable.
    So we're also working to make another 31,000 pages of these Federal 
Government regulations simpler, clearer, and more relevant to your 
lives--things that most of you would admit ought to be done, but just 
don't make sense in the way they're being done--to bring common sense 
back into the way we do business.
    Here is proof of the example. Today I want to announce a plan to 
reform the laws and regulations governing pension plans in our country. 
And almost every one of them came from you. That's why I am urging--
that's why I said to the gentleman who mentioned the IRS and the others, 
this is what this conference is for. When you hear this, you may want to 
clap, but remember, it's happening because of you. And we can do more 
because of you.
    But let me just go over this. You may recognize these ideas because 
we got them from you. The pension laws enacted over the last 20 years 
with the best of intentions are now so utterly complicated that you need 
a SWAT team of lawyers and accountants to help you fill out the forms 
and comply with the rules. Running pension plans takes so much time and 
costs so much money that only 15 percent of the small businesses in our 
country

[[Page 1042]]

have them. Most of you just give up, and who could blame you?
    Simple streamlined pension plans, however, are good for everyone, 
for small business because they boost morale and give people a stake in 
the company, for workers because they encourage savings, and we need to 
do everything we can to see that our people put away more money for the 
future.
    So here's what we're going to propose: Start a simplified IRA-based 
pension plan for companies with 100 or fewer employees. Under this plan, 
if you guarantee your employees a certain contribution, you will be 
exempt from complex anti-discrimination rules.
    Second--I don't know how many times I've heard this myself--second, 
fair treatment for families who work together. Get rid of the family 
aggregation rule. Get rid of the family aggregation rule, which treats 
family members as a single entity, dishonors the hard work of 
individuals, and is a drag on that great American institution, the 
family business.
    Third, simplify. There is currently a seven-part test to determine 
whether or not someone is a, quote, ``highly compensated employee.'' 
That is nuts. [Laughter] So, we believe that there ought not to be a 
seven-part test. We simply ought to have a simple guideline that will 
save all of us time and money.
    Now, we can do all of these things without opening the system to 
abuses. Safeguards for fair play are still in place. But we can do it, 
and we should. There is a lot more to do.
    I want to make two points in closing. Number one, you can make 
progress on these problems. It's hard work. It's more difficult than 
giving speeches about how bad it all is, but it can be done.
    The second point I want to make is, we know you made a sacrifice in 
time and money to come here. We know people like you made those 
sacrifices to come to the regional conferences and the State 
conferences. This is serious business. We did not ask you to do it just 
so we could cheer and have a good time, although that's important. We 
want your further ideas. We are doing these things because people like 
you all over America said they ought to be done.
    Lastly, let me say that for all of the challenges and difficulties 
in this country, I wouldn't swap with any other country in the world as 
I look to the future and what it holds.
    So, in a few moments, the Vice President and I are going back to the 
White House and we're going to welcome that fine young Air Force Captain 
Scott O'Grady and his family there. And I want you to think about 
everything this country's got going for it.
    First of all, and most important, it's got you and people like you, 
great entrepreneurs, great citizens, people who work hard, make the most 
of their lives, doing the best that they can with their families, 
contributing to their communities.
    Secondly, we have more diversity in this country, more ethnic and 
cultural diversity, than any other advanced country. And that's a huge 
asset in a global economy. It's a huge asset.
    Thirdly, we have a phenomenal set of assets and technology and 
research capability. And we have a Government that can change and can be 
a partner as we build the economy of the 21st century. We have profound 
challenges. But what I want you to believe from this experience today is 
that we can change, we can make it better, and that it comes from you. 
We will listen. That's why we wanted you to be here. I want you to be 
screaming and yelling and having a good time. I will not send the DC 
police after you--[laughter]--as long as you will send me some more good 
recommendations so we can do this again next year.
    Thank you. And God bless you all.

Note: The President spoke at 10:40 a.m. at the Washington Hilton.