[Weekly Compilation of Presidential Documents Volume 32, Number 23 (Monday, June 10, 1996)]
[Pages 993-997]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks at the Small Business Week Dinner

June 4, 1996

    Thank you very much. Well, ladies and gentlemen, I don't know who 
spoke before or what happened, but whoever got you in such a good humor, 
I'd like to have them do more of it. I like that.
    Thank you very much. I'm delighted to be here. I want to begin by 
thanking Phil Lader and Ginger Lew and Jere Glover and all the people 
who work at the Small Business Administration for their efforts on your 
behalf, their constant lobbying the White House, and the work that they 
do every day to try to help create more jobs through America's small 
businesses.
    I'm also glad to see--I see some of you out there who were at the 
White House Conference on Small Business. That was one of the highlights 
of my Presidency when I got to read the Federal regulation on grits. 
Remember that? [Laughter]
    That conference nearly made a liar out of me. I told you we were 
getting rid of 16,000 pages of Federal regulations, and we are, but it 
turned out the regulation on grits was one of the hardest ones to get 
rid of. [Laughter] We got one letter from a businessman--I read it, 
actually--pleading with me not to get rid of the regulation on grits, 
saying that people would just be desperate trying to sort out the 
different kinds of corn necessary to make grits. If I hadn't been living 
on grits since I was an infant, I might not have had the sense to resist 
the intrigue to keep the regulation. [Laughter]
    But somebody over at the Agriculture Department wanted to resist. It 
took me a year to get rid of that regulation. But anyway, I'm here to 
announce it's over. Goodbye. [Laughter] But anyway, we got rid of the 
regulation.
    I also want to begin by congratulating the honorees in the Small 
Business Person of the Year contest, all of you who won at the various 
State levels. And I just had a chance to meet with Phyllis Hannan and 
with Terry Anderson and with Robert and Laurie Lozano and to hear a 
little bit about the businesses they run and the work that they do.
    But I want to say to all of you, one of the proudest achievements to 
me that America has had in the last 3 years is that each of the last 3 
years there have been more new small businesses started than in any 
previous year in American history. And I'm very proud of that. That 
means that this country is moving in the right direction, that we're 
becoming a more diverse, more solid, more balanced economy. And that's a 
very good thing.
    I was very concerned 4 years ago when I became President that our 
economy seemed to be in drift and that the job growth rate was very 
slow, the economy was stagnant, the deficit was staggering. And we put 
in place a strategy that we believed would turn it around.
    The first thing we did was to make a commitment to dramatically cut 
the deficit. We knew we had to cut it in half in 4 years, and we thought 
if we did we could get interest rates way down. Then we wanted to try to

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open large numbers of new markets to American products and services and 
to try to get more American businesses into those markets. And that's a 
lot of the work that Mickey Kantor did when he was Trade Ambassador and 
the late Ron Brown when he was our previous Secretary of Commerce.
    I just left a business meeting in which a man came up to me and told 
me that he was a member of the other party, but he said, ``Nobody ever 
helped us--ever--overseas like Ron Brown did. And we appreciate it.'' We 
really tried to do that. We've had Mickey Kantor negotiate 200 separate 
trade agreements. And these things, we thought, would make a difference.
    The third thing we tried to do was to take the money that we had 
left after we started trying to squeeze the budget and target the 
investment. We tried to shrink the size of the Federal Government and 
target more investments to education, research, technology, defense 
conversion in the States that had been really hurt by cutbacks in 
defense, the things that would grow the economy over the long run.
    Now, after 3\1/2\ years, we see now that the deficit is less than 
half of what it was. Four years ago it was $290 billion, and it's 
projected to be $130 billion this year. For 2 years in a row we have run 
an operating surplus with your Federal budget. If it had not been for 
the interest rates--interest payments we make on the debt run up in the 
previous 12 years, we'd have been in surplus the last 2 years. So, we 
are going to keep going.
    Contrary to what you read about, all the fights we're having with 
Congress, whether we have this agreement or not, because we can't agree 
on what the structure of Medicare and Medicaid and what the investment 
levels in education and the environment should be, whatever, without 
that agreement, we're still going to keep bringing that deficit down 
every year until we balance the budget. We have to do it. It's the right 
thing to do. But we've already seen a dramatic decline in interest rates 
from where they were 4 years ago, and as a result of that--plus an all-
time high in exports, plus the investments that have been made--we have 
now at least 8\1/2\ million more jobs. It's going to be recalculated 
later this week. There may be even more than that.
    As I said, record numbers of new small business people, 3.7 million 
new American homeowners, the lowest combined rates of unemployment, 
inflation, and home mortgage rates in 30 years. Our deficit is the 
lowest as a percentage of our income of any advanced economy in the 
world, any big economy, and the lowest it's been in America since 1979. 
And business investment is the highest it's been since 30 years. And I 
think that is a pretty good record for the American people to be proud 
of. And a lot of it has been generated by you.
    We have--because we know there are some things that we can't do 
anything about until we want to make something good happen--we've tried 
to change the emphasis of American policy a little bit. I want to just 
mention one because it affects you. It is obvious that if you look at 
the numbers, I believe it's every year since 1980, the aggregate 
employment of the Fortune 500 in the United States has gone down, I 
believe going all the way back to 1980. And the aggregate employment of 
small- and medium-sized businesses has gone up.
    So if we want to grow jobs more rapidly, if we want to keep the 
unemployment rate at 5.4 percent or lower, and if we want to pierce the 
areas of high unemployment in America, the inner cities, the isolated 
rural areas, where no new jobs have come yet in this economic recovery, 
the only way to do it is to make those areas more attractive for small 
business, to make it easier for people to pierce those areas who are 
prepared to be there, to make a commitment, to try to relate to the 
people who live there.
    Now, we've tried to do five specific things for the SBA, and I just 
want to go over them very quickly because I think the Small Business 
Administration under Phil Lader and under his predecessor, Erskine 
Bowles, has really done a very, very good job at trying to reach out and 
support the small business community.
    The first thing we want to do is improve access to capital. The SBA 
has doubled the loan volume over the last 3 years while cutting its 
budget by nearly a third. I know of no other Government agency that ever 
did

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anything like that, but that's exactly what they have done.
    There is--more private capital has entered the SBIC program in the 
last 18 months than in the last 15 years combined. The 7(a) Guaranteed 
Business Loan program has some 7,000 lending partners working with the 
agency to provide almost $8 billion to small business owners last year. 
That's a 52-percent increase over the year before, including an 86-
percent increase to women business owners and a 53-percent increase to 
minority-owned businesses. No quotas, no preferences, no nothing. 
Everybody who is qualified had a chance to compete and get what they 
were entitled to. And I think you should all be proud of the record that 
American small businesses have made in that program.
    The second thing we've tried to do in SBA was to set a better 
example than I did with taking a whole year to get rid of the grits 
regulation. And so the SBA has cut the number of its regulations in 
half, simplified the rest. A lot of you are very familiar with the one-
page LowDoc loan program and the quick turnaround for loans of up to 
$100,000. I'm very proud of that. But you should also know that we do 
have the SBA now working very hard with EPA, with OSHA, and with other 
agencies trying to get improvements in their regulatory pattern, 
especially with regard to small businesses.
    The Occupational Safety and Health Administration now is working on 
measuring their performance of their own inspectors based on the safety 
results of the plants and the businesses that are measured, not based on 
how many citations they write or how many people they write up but on 
the safety records of the people involved.
    We're working on cutting the total compliance time the EPA takes out 
of the private sector by 25 percent. And we're on track to make it by 
the end of this year. I hope we will, and I believe we will.
    The third thing we've tried to do is to reinvent the SBA. We've had 
to cut everything nearly in Federal Government to try to reach our 
budget totals. There are now 237,000 fewer people working for the United 
States of America than there were the day I became President. We've had 
a reduction of 237,000. The Federal Government is now the smallest it's 
been since 1965. By the end of this year, it will be the smallest--as 
small as it was when John Kennedy was President of the United States in 
1963.
    And by the way, as a percentage of the civilian work force, which is 
probably a better way to measure it, the Federal Government is now the 
same size it was in 1933 before the New Deal. And interestingly enough, 
one reason not very many people know that is that we only had to 
involuntarily separate 1,750 of those 237,000 people. We managed down 
the rest with early retirement, with people finding other jobs, with 
other things. We didn't have to--we only had to involuntarily separate 
because of budget cuts 1,750 out of those 237,000 people.
    But as a result of that, every agency had to take its cut. SBA 
employment has been reduced by more than a third. And yet, they've still 
been able to double the loan volume. So we're working on doing that in a 
way that doesn't cut the services to the small business community.
    We've also, fourthly, tried to improve small business education 
counseling and information through our development center program, our 
business information centers. I think that they are working better with 
the one-stop approach to business counseling.
    And finally, we've tried to let the SBA serve as my eyes and ears, 
to try to get better policy changes. That's one of the things that the 
White House Conference on Small Business was designed to do.
    Recently I signed one piece of legislation that was recommended by 
the conference. The Small Business Regulatory Enforcement Fairness Act 
of 1996, which allows small businesses to challenge Federal regulations 
in court and is one of the most significant regulatory actions taken for 
small businesses in the last decade, came right out of the White House 
conference. So if you were a part of that, you should be proud of it 
because even though we supported it and the Congress passed it, it was 
actually your doing.
    We also got some very important recommendations out of the White 
House conference on making retirement more accessible to small business. 
And one of the things that the Congress and the White House clearly 
agree on--and I hope we can get it

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passed, notwithstanding all the other budget fights--is a whole package 
of retirement simplification and access legislation, about five 
different bills that, as far as I know, has the unanimous support of the 
Republican leadership, the Democratic leadership, and the White House 
that would make pensions much easier for small businesses to access and 
make them much more portable for people who have to change jobs.
    Now I don't know how many--I got a letter the other day from a guy I 
grew up with complaining that it took him 9 or 10 months to transfer his 
401(k) plan when he moved from one small business to another and a lot 
of those kind of problems would just go away if this legislation would 
pass. As I said, as far as I know, there is no opposition to this 
package of legislation, again, not because of me or because of the 
leaders of Congress, but because it came out of the White House 
Conference on Small Business, and we are all trying to listen. I hope we 
can do more of that.
    As far as I know, there is also very little opposition to an 
appropriate reduction in the estate tax burden, to expanding the 
expensing allowance--you know, we took it from 10 to 17.5 and I think 
it's going to go up to 25 under all the proposed new plans, budget 
plans--and to increasing the health insurance, the deductions for self-
employed people, again, largely because of what you have been doing.
    Now, finally, we had a White House Conference on Corporate 
Citizenship the other day at which your Small Business Person of the 
Year was present--we were just talking about it--in which a lot of the 
bigger businesses were saying that one of the things that we needed to 
do in this budget was to re-enact the tax deduction that employers get 
for helping provide for the education of their employees which 
historically has been a deduction of up to $5,250.
    In addition to that, I am going to recommend again in our budget 
plans when we get down to this, that we provide a 10 percent tax credit 
for small businesses who are willing to undertake some of the expense of 
helping their employees improve their education and training because we 
know it's a bigger burden for small businesses. It's more difficult for 
them and very often you don't know if you're going to have the employees 
for as long as some of the bigger companies can guarantee that they'll 
have theirs.
    But since we know that one of the biggest problems with stagnant 
wages in America and growing inequality is the lack of skills among our 
already adult work force, we want to provide whatever incentives we can 
to help you if you're so inclined to support the education and training 
of your employees. So I hope also that that will be successful.
    Now, finally, I'd just like to tell you about a proposal I made up 
at Princeton University today. I went up there and gave the commencement 
speech, and I learned that I was only the third commencement speaker in 
100 years. It sort of embarrassed me. I was afraid nobody would ever get 
asked back if I did a bad job. And then I learned that they only asked 
the President to speak every 50 years and then they didn't have 
commencement speakers the rest of the time. So I relaxed and said what I 
intended to. [Laughter]
    I recommended at Princeton that we change the Tax Code in a way that 
would make available to every single American 2 years of education after 
high school because I believe--if you go back and look at the whole 20th 
century, when we started this century with a new industrial era was the 
first time we ever had States requiring people to go to school at all, 
any kind of required public attendance at education. And then after a 
few decades we required people to go to school for 10 years. Then after 
a couple more, we said, ``Well, everybody needs a high school diploma.''
    Well, if you look at the 1990 census now, we know that on balance 
younger workers who have high school diplomas don't keep up with 
inflation in their earnings. But younger workers that have at least a 
community college degree of some kind do and do quite well. We also know 
that nearly every American is within driving distance of a community 
college and that by and large they are more affordable than the 4-year 
schools.
    So I had previously in my budget plan that we give everybody--and 
this would be good for a lot of your children--but we give everybody a 
$10,000 deduction for the cost of education after high school, for 
tuition cost, up

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to $10,000 a year as a tax deduction. Today I recommended that on the 
bottom of that, if you will, anybody who wanted to would be instead able 
to take a credit of up to $1,500 which covers most of the community 
college tuitions in this country for a community college tuition for one 
year, no questions asked, and then if they maintained a B average to get 
it for a second year, which literally would make, instead of 12 years, 
14 years of education accessible to every single American in the 
country. It could revolutionize opportunities for people, and I hope you 
will support that.
    Let me just make one final point. I know we're going into an 
election season, and we have that every 4 years--really, every 2 years. 
And on the whole that's a good thing. If it's done right, it gives us a 
chance to reassess where we are, to debate the differences between us, 
to have an honest discussion. And it's a very positive thing. But what 
I'd like to point out is that when we work together up here and do agree 
on what we have in common and leave our differences to the side, we can 
do a lot of good things for this country. We adopted a budget, 6 months 
late, but we adopted a budget which continued to reduce the deficit and 
continued to meet what I think are our fundamental obligations to the 
people.
    We adopted a telecommunications bill which gave small-business 
people in the telecommunications area a chance to compete in this brave, 
new world we are going into and still will create hundreds of thousands 
of new jobs in the telecommunications area. We adopted a tough 
antiterrorism bill to deal with one of the biggest law enforcement 
problems, not only the United States but people all over the world have. 
Just because we said, look, here's what we agree on. So we don't agree 
on everything. I gave up what I couldn't get. They gave up what they 
couldn't get. We passed the bill; we signed it. That's the way the 
American system is supposed to work.
    So I would say to you, I am still committed to getting a balanced 
budget act. I'm still committed to getting campaign finance reform. And 
I'm still committed to getting the kinds of targeted tax relief we 
talked about here tonight that I believe would help to create more small 
businesses and help more small businesses stay in business and help 
generate more jobs.
    I believe this country is in as good a shape to seize the future as 
any great country in the world. And I believe the best days of this 
country are still before us. What we have got to do is to recognize that 
with all of our diversity--you just look around here. Just imagine what 
the difference in the way this crowd looks today and the way it would 30 
or 40 years ago. Just look around this room.
    And there is no country in the world as well-positioned for the 
global economy as we are, managing its diversity as well, giving 
different people opportunities, and all we've got to do is to figure out 
that we've just got to keep working together, keep pulling together, and 
keep going forward. Our best days are still ahead of us, and you and 
small business are going to lead the way.
    Thank you, and God bless you.

Note: The President spoke at 9:12 p.m. in the Presidential Ballroom at 
the Capital Hilton Hotel. In his remarks, he referred to Small Business 
Person of the Year Phyllis Hannan, first runner-up Terry Anderson, and 
second runners-up Robert and Laurie Lozano.