[Weekly Compilation of Presidential Documents Volume 40, Number 9 (Monday, March 1, 2004)]
[Pages 286-292]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in a Discussion on the National Economy in Louisville, Kentucky

February 26, 2004

    The President. Listen, thanks for having me. I want to thank you all 
for coming. What we're going to do here is have a--talk about how our 
economy works and how good public policy out of Washington can affect 
people's lives in a positive way, can encourage job growth, so people 
have got a hopeful future. That's what we're here to talk about. And the 
best way to talk about it is to have people who are actually living 
lives that--which have been affected by policy.
    But first, I want to say some things, if you don't mind.
    James Kirchdorfer, Sr. Go right ahead. [Laughter]
    The President. Okay, good. [Laughter] I love the entrepreneurial 
spirit of America. It's one of the things that, I think, makes the 
country unique and strong. I love family-owned businesses. Nothing wrong 
with a son trying to follow in a father's footsteps. [Laughter]
    I appreciate the Kirchdorfer family and employees for welcoming us 
here. Jim was bragging backstage about the success of this company is 
really based upon the fact you've got great workers, highly productive, 
well-motivated workers, which speaks volumes about your management style 
and your ability to make good decisions, like marrying your wife, 
Carolyn. [Laughter]
    I appreciate a member of my Cabinet being here today. Elaine Chao is 
with us. The Senator married really well. [Laughter] So did she. Elaine, 
I appreciate your hard work. I want to thank very much my friend Anne 
Northup, who flew down with me today. We had a fascinating discussion 
about Kentucky. She's doing a great job. She's straightforward. She 
cares about people.
    It's good to see the Governor and the Lieutenant Governor here. I 
want to thank you for coming, Governor and Governor. I appreciate you 
all coming. Ernie, thanks for being here. And Steve Pence, thanks, 
Steve.
    Mr. Mayor--where's the mayor? Oh, Mr. Mayor, thanks for coming. 
Jerry Abramson, honored you're here. I really appreciate you taking time 
to be here. I want to thank you all for taking time out of your day to 
come and listen to this dialog.
    There's a person I met at the airport I want to herald. Her name is 
Marina Partee. She is--thank you, Marina. She helps victims of domestic 
violence. See, she is a volunteer to make Louisville, Kentucky, a better 
place for all. She's one of those thousands of loving

[[Page 287]]

souls who are willing to provide comfort to those who hurt.
    The reason I bring up Marina is that we talk about the strength of 
America a lot. We say that we're strong because we've got a great 
military--and we'll keep it that way, by the way--we're strong because 
we're a wealthy nation. The true strength of this country lies in the 
hearts and souls of our citizens. That's where we find the real strength 
of America. We find strength in the fact that there are souls who are 
willing to take time out of their busy lives to love a neighbor just 
like they would like to be loved themselves.
    One of my jobs is to rally the armies of compassion, people who have 
heard the universal call to love. And Marina is a soldier in the army of 
compassion. I want to thank you for setting a fine example. I urge 
people in this fine city to help somebody who hurts. There are all kinds 
of ways that you can serve your community. You could mentor a child. You 
can help somebody who is homeless. You can help a shut-in. But be a part 
of the army of compassion. You represent the true strength of the 
country when you do so. So, Marina, thank you for coming. Thanks for the 
example. I'm proud you're here.
    I'm optimistic about the future of this country because I know what 
we've been through. Yes, I saw firsthand what the Nation has overcome. 
We have overcome a recession. We overcame an attack. On September the 
11th, the enemy attacked us, and it hurt our economy. It also affected 
our psychology, made us realize oceans were no longer--could no longer 
protect us from an enemy which hates what we stand for. And then, all of 
a sudden, we started to recover. Things got better because of the 
resiliency of our economy and the fact that Americans refused to give in 
to terror. Then we had some corporate scandals, scandals which affected 
our confidence. The capitalist system requires honesty and openness. But 
we dealt with it straightforward. We said, ``If you're going to lie or 
cheat or steal, if you don't tell the truth to your shareholders and 
your employees, there will be serious consequences.''
    And then, as the economy kind of started to recover from those 
three, I made a tough decision, and that is to deal with threats before 
they fully materialize, threats abroad before they become imminent. And 
that, obviously, was not only in Afghanistan but in Iraq. I looked at 
intelligence and saw a threat. Congress looked at intelligence and saw a 
threat. The United Nations Security Council looked at the intelligence, 
and it saw a threat. Saddam Hussein said, ``I'm not going to expose my 
weapons. I'm not going to get rid of my--I'm not going to allow 
inspectors in,'' he said. But this is the same man who had used them.
    So I had to make a decision: Do I trust the word of madman, or do I 
remember the lessons of September the 11th? I vowed on September the 
11th to do my duty to protect America, to deal with threats before they 
fully materialize. So I called upon our country and many other nations 
to respond. Some did; some didn't. But the world is better off without 
Saddam Hussein. The people of Iraq are better off without Saddam 
Hussein.
    A march to war affects the confidence of the people. Laura reminded 
me, in July of 2002, on the television screens came the notation 
``America Is Marching to War.'' It's hard to invest capital when you're 
marching to war. It's hard to be optimistic, isn't it? War is not an 
optimistic thought. Now we're marching to peace. We're marching to 
peace.
    But all those affected not only the psychology of the country but 
affected our economy. But we overcame the obstacles, and that's why I'm 
optimistic. I say we overcame them--the economy is growing. We added 
over 100,000 jobs since January, new jobs. Inflation is low; interest 
rates, low. Manufacturing activity is up. We're growing. The economy is 
getting better. There's more to do, but look at what we've overcome. And 
we overcame it because of good fiscal policy out of Washington, DC, in 
some part. We overcame it because the role of Government is not to 
manage the economy; the role of Government is to create an environment 
in which entrepreneurs are willing to take risk and create new jobs.
    And so we cut the taxes on the people. We let people keep more of 
their own money. We understand that when somebody has got more of their 
own money to spend, they're likely to demand a good or a service.

[[Page 288]]

And in this economy, when somebody demands a good or a service, somebody 
will supply that good or a service. And when somebody supplies that good 
or a service, it means somebody is working. That's what that means.
    We cut all taxes. I believe if you're going to cut taxes, you 
shouldn't try to pick and choose winners and losers in the Tax Code. 
Everybody ought to get tax relief. And so we reduced taxes on everybody 
who paid taxes. And it particularly helps small businesses when you cut 
income taxes, because, you see, most small businesses, like some up 
here, are what they call Subchapter S corporations, which means they pay 
tax at the individual income tax level. A lot of small businesses are 
sole proprietorships, which means you pay tax at the individual income 
tax level. So when you hear people talking about cutting income taxes on 
individuals, not only does it help families, those tax cuts help small 
businesses. And if you're worried about job creation, like I am, and you 
understand that most new jobs are created by small businesses, it made 
eminent sense to have policies that affected small businesses in a 
positive way.
    We also helped families. We increased the child credit to $1,000 per 
child. That helps moms and dads do their solemn duty to raise their 
children. It reduced the marriage penalty--the tax relief reduced the 
marriage penalty. I think it makes sense to encourage marriage in our 
society through the Tax Code, not discourage marriage. We helped our 
senior citizens by reducing the tax on capital gains and dividends. We 
encouraged small-business investment by raising the limits of 
deductibility, and we'll hear some talk about that in a minute. And we 
put the death tax on its way to extinction.
    Now, let me talk about the death tax, right quick. See, I think it's 
really unfair to tax a person's assets twice, while they're living and 
after they die. I think people ought to be able to leave their business 
to whomever they choose without the Federal Government making it 
difficult to do so. I think a person ought to be able to live their 
farm--leave their farm to whomever they choose without the Federal 
Government making it difficult to do so. The death tax is bad for small 
businesses. It's bad for farmers and ranchers. It makes--it's, in my 
judgment, bad policy, and it's on its way to being put to extinction. I 
say ``on its way''--you'll hear me talk in a minute that these--some of 
these taxes don't really go away. It's like they go away for a period of 
time, but they come back.
    Now, as I mentioned, we're doing well. But there are more things we 
need to do. We need an energy policy. It's hard to be a manufacturing 
company, for example, in America if you have uncertainty when it comes 
to energy supply and energy price.
    We need tort reform. It is really hard to be a small-business owner 
and try to create new jobs if you're constantly worried about frivolous 
and junk lawsuits. We need to worry about the cost of medical care. You 
see, it's the cost of medical care that makes it awfully hard for this 
country to remain competitive. As the costs go up, it's harder for small 
businesses to provide employment, and it's very difficult for American 
families as well. We need what's called association health care plans 
that allow small businesses to pool risk so as to better control the 
cost of health care. We need to expand and market health savings 
accounts, which will make it easier for small business to provide 
affordable health care to their employees. We need medical liability 
reform, national medical liability reform. The cost of frivolous and 
junk lawsuits is high on our society. It makes it harder for people to 
be able to employ people because it increases the cost of medicine.
    We need good trade policies. It's easy to trade into America; it 
makes sense for us to be able to trade in other countries easily as 
well. Listen, we're good. We're good at growing things. We're good at 
manufacturing things. We ought to be selling those into--not only here 
at home but into other markets as well.
    There needs to be less regulation out of Washington. And frankly, 
Governor, there needs to be less regulation out of the State level as 
well, so small businesses can spend time becoming more productive and 
employing people as opposed to spending time filling out paperwork that, 
in some cases, probably isn't even read.
    We need to do a series of things to make sure the economy grows. And 
one thing for

[[Page 289]]

certain we need to do is make sure there is stable, reliable tax policy. 
See, as I mentioned to you, the tax relief exists today, but it is going 
to change unless Congress acts. The child credit will go down unless 
Congress acts. The marriage penalty will go back up unless Congress 
acts. The 10 percent bracket will be affected unless Congress acts. In 
other words, all the tax relief that we passed is set to expire. And 
unless Congress acts, they will be raising taxes on the American people 
at a time when we shouldn't be raising taxes on the American people.
    In 2005, the child credit goes down, which is a tax on the families. 
In 2005, the marriage penalty goes up, which is a tax on people who are 
married. In 2005, the 10 percent bracket is altered, which is a tax on 
people. We don't need to be raising taxes right now as the economy is 
beginning to recover. We've got plenty of money in Washington, DC, by 
the way. We've got to be wise about how we spend it. And by the way, in 
2006, many of the small-business deductions go away, which would be a 
tax on small businesses.
    And so I'm calling on Congress to make the tax cuts that are set to 
expire permanent. I would like Congress to make all tax cuts permanent. 
But the very minimum--at the very minimum, they need to listen to the 
stories up here on the stage and make those set to expire in 2005 
permanent. For the sake of our economy, for the sake of American 
families, for the sake of small-business owners, and for the sake of job 
creation, the tax cuts need to be permanent.
    Finally, one other thing I do want to say, and that is that we are 
in a changing economy. And these are exciting times, but change creates 
the need for government at all levels to act in a way that takes 
advantage of the changing times. We need to make sure our job training 
programs work. We need to make sure that the community college system is 
capable of training people for the new jobs of the 21st century, higher 
paying jobs, better jobs.
    I saw the mayor nodding his head. He understands that a good, viable 
community college system, which is flexible, which matches up employer 
demands with curriculum to make sure there are employees available for 
those jobs, is really good at making sure Louisville, Kentucky, remains 
a viable place for people to live and to work. It's a good way to 
attract industry, if you've got a viable and real job training program 
system.
    I appreciate Elaine's hard work on this. This is a major initiative 
of our administration, is to provide the opportunity for people to 
retrain so that their skills--they've got the skills necessary for the 
new jobs being created in this economy, and I emphasize, better paying 
jobs being created in this new economy.
    So these are the things we're working on in Washington. But you'll 
be happy to hear I'm about to turn the program over to people who are 
actually on the frontlines of creating jobs and providing employment, 
and they're treating people with dignity in the workplace.
    Jim is an entrepreneur. He is a risktaker. He takes risks in order 
to make sure his company can compete. He takes risks in order to make 
sure the people behind us can work. And so I appreciate being invited 
into a successful family-owned business that does so much good for the 
people that you employ and, really, so much good for the economy, 
because there are thousands of companies all across America who base 
their hopes and aspirations on dreams and success and on being a 
responsible citizen by providing good work for people. So, Jim, thanks 
for having me. Tell us your story.

[At this point, James Kirchdorfer, Sr., chairman, ISCO Industries, made 
brief remarks.]

    The President. Let me just ask you a question. When you made 
investments, what did you do? What did you buy? Investment means 
somebody--you went out and purchased something. So when you hear--when 
people hear the word ``made an investment,'' it means you went out and 
purchased. What did you buy?
    Mr. Kirchdorfer. Well, to put our pipe together, it takes expensive 
equipment. And we do have McElroy Manufacturing here, which is where we 
purchased about $3 million last year of equipment. They're in Tulsa, 
Oklahoma, a USA company. And this equipment--when we open a new 
location, we need equipment to put the pipe together at those locations, 
so we buy more equipment.

[[Page 290]]

We need people to operate the equipment, so we employ more people. So 
the expansion has created growth in investment and jobs.
    The President. See, the tax bill we passed encouraged this company 
to invest. It made it easier to make the decision to spend $3 million, 
called bonus depreciation. That's fancy words for, we're trying to 
encourage Jim to make the decision to expand his business by buying new 
equipment. And when he buys new equipment, somebody has got to 
manufacture the equipment. And when somebody manufactures the equipment, 
it means they're working, right? And so the tax relief we passed had the 
effect of encouraging investment at the small-business level. And that's 
important because most new jobs--70 percent of new jobs, more or less, 
are created by small businesses like Jim's.
    The second thing I want to point out is he started his business 
behind his dad's store. Is that right?
    Mr. Kirchdorfer. Hardware store.
    The President. Hardware store. You know, it's like, I started my 
business in my garage. You know how many times this happens in America? 
It is--think about a country that has got an environment that encourages 
people to start their business behind their dad's store. It's a really 
exciting part of our country, isn't it? And Government must not thwart 
this entrepreneurial spirit by bad tax policy, by bad medical policy, by 
bad regulatory policy. We need to encourage the entrepreneurial spirit. 
It's so hopeful to have a country where people can start their own 
business with a good idea.
    Now, we can't guarantee success. But we can have an environment so 
if somebody decides to take the risk, that they can succeed and, 
therefore, end up employing people. I love the--are you going to employ 
anybody next year, you think?
    Mr. Kirchdorfer. Oh, sure. We're going to add probably 30 or 40 jobs 
again next year--or this year.
    The President. Which is good. Thirty jobs here, thirty jobs there; 
all around the country, small businesses are expanding because there's a 
sense of optimism about the future of this country. And that's how 
people are able to find work. And that's how we're able to provide 
stability in the workplace.
    Speaking about that, we've got Rich Gimmel with us. He's the 
president--there's nothing wrong with being Mr. President--[laughter]--
of Atlas Machine and Supply. Rich, thanks for coming.

[Rich Gimmel made brief remarks, concluding as follows.]

    Mr. Gimmel. When my father took over the company in the late '50s, 
we had about 35 employees. When my brother Rob and I began to run the 
company together--Rob is in the front row here. He's our CEO.
    The President. He's the pretty one.
    Mr. Gimmel. That's right. He's the little brother with the gray 
hair, but he's been there longer than I have.
    The President. I see. [Laughter]
    Mr. Gimmel. But we had about 75 employees at that time. Now we have 
almost 170 employees at Atlas Machine. We are a very capital-intensive 
company. We provide----
    The President. Explain what that means, ``capital-intensive.''
    Mr. Gimmel. Well, we have to reinvest. We have to reinvest a lot in 
our company every year to keep it productive. We have to buy machine 
tools. We have to expand plant. We have to expand our facilities. We 
have to expand our workforce. And all of this is extremely demanding of 
capital.
    We provide plant maintenance services in the Ohio Valley, and also, 
we're the compressed air and pump provider for industry in the Ohio 
Valley. Compressed air is vital to an industry. It's like another 
utility. It's as important as their electricity. If they lose their air, 
they're out of business, so we're the air people. We're kind of an 
industrial----
    The President. It kind of sounds like Washington.
    Mr. Gimmel. That's right. We're the air people. [Laughter]
    The President. Is it hot air? [Laughter]
    Mr. Gimmel. Yes, it can be.
    The President. You need to tap into the Nation's Capital. [Laughter]
    Mr. Gimmel. Maybe you guys could be supplying us. How about that?
    The President. That's what I--that was my point. [Laughter]

[Mr. Gimmel made additional remarks.]

[[Page 291]]

    The President. Good. If somebody's listening out there, here's a 
shot to find work. [Laughter] If you're willing to work hard. Thanks for 
coming.
    Jeannie Unruh is with us. One of the exciting things about our 
country is that there's a lot of companies run by very skilled women. 
Women-owned business is, I think, a very hopeful part of the future of 
this country. And I want to thank Jeannie for coming. By the way, she's 
a Subchapter S corporation. So when you hear the people rail on taxes 
and this, that, and the other--when you reduce all taxes, it affects her 
business. She pays taxes. Don't tax the rich--well, the so-called rich 
happen to be, in many cases, small businesses that are out providing 
opportunities for people.
    Anyway, Jeannie is the head of MAC Construction & Excavating, Inc. 
Thanks for coming.

[Jeannie Unruh, chief executive officer, MAC Construction & Excavating, 
Inc., made brief remarks.]

    The President. The country grows because people who run small 
businesses are confident about the future. And what I've come away with 
here is that these three businessowners are confident, and that's 
important. It bodes well for the people who are working for these 
companies and for those who they're going to hire.
    The other thing about the tax relief plan, obviously, it affected 
people's lives. And I want to talk to two people whose lives were 
affected. I do want to remind you, however, that this year if the 
Congress doesn't act on making the tax cuts that expire in '05 
permanent, they're raising taxes on people. You'll hear, ``Let's get rid 
of Bush's tax plan.'' That's code word for, ``I'm going to raise your 
taxes.'' That's what that is.
    Just to give you a sense of what that means, a married couple with 
two children with an income of $40,000 would face a $915 tax increase in 
2005 if the Congress does not act. Remember the child credit--the 
benefits of the child credit go away, which is like a tax increase. The 
marriage penalty goes back up, which is like a tax increase. And the 10 
percent bracket is affected, which is a tax increase.
    With us is Libby McKinney. She's got a husband and two children. She 
works here as a collections specialist. Libby, thank you for coming. 
Tell us what's on your mind.

[Elizabeth McKinney, credit and collections specialist, ISCO Industries, 
made brief remarks.]

    The President. Well, that's great. Congratulations. Doing her duty, 
by the way. Some people spend the money; some people save the money. But 
it all has a positive effect on the economy. And, by the way, you can't 
have investment unless there's savings. And so I appreciate your story. 
The family saved about $1,700 because of the tax relief. We throw a lot 
of numbers around in Washington. That may not sound like a lot in 
Washington-speak; it's a lot for the family, $1,700 tax relief this 
year.
    And by the way, I just, again, want to remind the people listening 
that if Congress does not act, this family will have a $725 tax 
increase, if Congress doesn't make the tax relief permanent. You see, 
they've got two children, and they're married, and the 10 percent 
bracket affects them. There will be a tax increase on Libby and her 
family. I don't think that makes sense to be raising taxes on hard-
working people who are trying to get ahead and do their duty as a mom 
and a dad to raise their children. So, Libby, thanks for coming.
    Big Rob is with us, accounting specialist Rob Hansen. Thanks for 
coming, Rob.

[Robert Hansen, accounting specialist, ISCO Industries, made brief 
remarks.]

    The President. Good. See, he made a decision with the extra money to 
go out and purchase a good, and that just helps the economy. There are 
millions of these decisions being made on a daily basis, which is how 
the economy works.
    I often have to argue that the tax relief was better spent than 
Government could have spent the money. It's a--it affected--[applause]. 
I appreciate the checks finally arriving. I was a little nervous when we 
said we were going to put checks in the mail. [Laughter] You've heard it 
before. [Laughter] It actually made it. [Laughter]

[[Page 292]]

    But if the Congress doesn't act, this family will pay $1,000 in 
taxes--increase. It's a tax increase. They don't make--if they don't 
make the child credit permanent or the marriage penalty permanent or the 
10 percent bracket permanent, they pay $1,000 next year. We're running 
up taxes on this family, and it affects their ability to make decisions. 
It affects their future. It's just--it doesn't make any sense for 
Congress not to make the tax relief permanent. And the best way that I 
can possibly tell the story--they're used to me--is all they've got to 
do is listen to what tax relief meant for people in their lives and what 
tax increases would do. And so I call upon Congress to listen to the 
voices of the people out here struggling to get ahead in America, people 
who are making good decisions, people who are doing their duty as 
responsible citizens to love their children with all their heart, people 
who are putting food on the table.
    I want to repeat to you what I said before. This country has 
overcome a lot, and we're moving forward with optimism and confidence. 
You know why? Because we've got great people. And I'm proud to be the 
leader of such a strong nation.
    Thank you all for coming. God bless.

Note: The President spoke at 10:52 a.m. at ISCO Industries. In his 
remarks, he referred to Senator Mitch McConnell of Kentucky, husband of 
Secretary of Labor Elaine L. Chao; Gov. Ernie Fletcher and Lt. Gov. 
Steve Pence of Kentucky; and Mayor Jerry E. Abramson of Louisville, KY.