Weekly Compilation of Presidential Documents Volume 42 Issue 3 (Monday, January 23, 2006)

[Weekly Compilation of Presidential Documents Volume 42, Number 3 (Monday, January 23, 2006)]
[Pages 80-95]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on the National Economy and a Question-and-Answer Session in
Sterling, Virginia

January 19, 2006

The President. Thanks for having me. Please be seated. Thanks for
coming to say hello. What I thought I'd do is share some thoughts with
you and then answer questions for a while. Before I do, I want to thank
Randy and the Loudoun County Chamber of Commerce for setting this up. I
appreciate you all coming.
I've got something to say, and I hope you do as well, as we have a
conversation about how to make sure this economy of ours continues to
stay robust and strong--so people can find work and realize their
dreams.
Before I talk about the economy, I do want to say Laura sends her
regrets. She came home last night about 12:45. She just came back from
Africa, where she and my daughter Barbara and Condi Rice went to witness
the swearing-in of the first elected woman President on the continent of
Africa. They had a great trip. She said it was an inspiring
inauguration. I just wish she'd have tiptoed in a little quieter.
[Laughter]
She's doing great. You know, one of the best things about the
Presidency is how close our family has remained and how wonderful a wife
and mother she is. And the American people are getting to see that.
Speaking about families, Chuck Kuhn's family is pretty remarkable--
turns out his mother works for him. [Laughter] That's the opposite in my
family. [Laughter] I need a

[[Page 81]]

little advice on how to--[laughter]--restructure the chain of command in
the Bush family. [Laughter] But I love being here in a place where a guy
who had a dream at age 17 years old--that's how old Chuck was when he
started to act on his entrepreneurial instincts--said, ``If I work hard
and if I'm smart and if I figure out what the market wants, I can build
something that I call my own.'' And 23 years later, we're standing,
obviously, in what has become a very successful business enterprise,
successful because he is thriving and expanding, successful because he
has provided people a good place to make a living. And so I want to
thank you, Chuck, for being a great entrepreneur.
I want to thank the folks who work here for setting this deal up.
I'm here to talk about how to make sure that America is the place where
the entrepreneur can succeed. That's what we're really here to discuss,
isn't it? And it's a wonderful place to have that discussion.
Before we get there, I want to thank the attorney general, Bob
McDonnell of the State of Virginia--the Commonwealth of Virginia, for
being here. Appreciate you. He's sitting next to an old Governor buddy
of mine, Bill Graves. He was the Governor of Kansas during the time I
was the Governor of Texas. And I used to remind him he made a really
smart move when he married a woman from Texas. [Laughter] Still married,
aren't you? Yes. [Laughter] Good move. [Laughter] The best deal that's
ever happened to you. It's great to see you. Bill is the president and
CEO of the American Trucking Association.
I want to thank all the other State and local officials who are
here, but most importantly, I want to thank the small-business owners
who are here.
I was interested to find out that Loudoun County is the home of
10,000 small businesses, 80 percent of which have got 10 employees or
less. It's pretty strong, isn't it? Amazing. Probably one of the reasons
why you're growing so fast is that people realize this is a good place
to take risk, and that's really the role of Government, when you think
about it.
I like to tell people the role of Government is not to try to create
wealth; that's not the role of Government. Oh, sure, the role of
Government is to help the poor and help the elderly with medicine, but
it's not to try to create overall wealth. The role of Government is to
create an environment in which people are willing to risk capital, to
take risk, an environment in which people are willing to work to realize
their dreams--just like here at this trucking company. That's the
fundamental policy--the principle on which I'm basing my decisions as I
ask Congress to think about how to make sure the economic growth that is
now prevalent in America continues.
We have got a robust economy, but it wasn't necessarily going to be
that way--when you think about what we've been through, it kind of helps
point to what good policy may be. We've been through a stock market
correction. We've been through corporate scandals, which affected the
confidence of people. We have been through a terrorist attack, which
hurt our economy. We have been through war. We've had significant
natural disasters. All of which could have sent us into a downward
spiral had we not put good policy in place.
We've overcome these issues, and I believe one of the main reasons
why is because we let people keep more of their own money. I asked
Congress for tax relief. I believe strongly that if the entrepreneurs of
America have more money in their pocket, they will use it to expand
their businesses. I believe more--very strongly that if a consumer has
more money in their pocket, they will demand extra goods and services.
And when somebody demands an extra good and service in a market economy,
somebody is going to produce it to meet that demand.
And so I went to Congress and said, ``Look, we've got problems;
let's be aggressive about how we address it; let's cut the taxes on
everybody.'' I remember the debate, they said only some people should
have tax cuts. So we lowered rates for everybody. If you all have tax
relief, everybody who pays taxes ought to get relief; you ought not to
try to play favorites with who gets it and who doesn't get it.
We mitigated the damage of the marriage penalty. I always thought it
was a little contradictory to have a Tax Code that discouraged marriage.
Seems like to me we ought

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to encourage marriage in this country, and the Tax Code ought to
encourage that.
We lowered taxes on dividends and capital gains because we want to
encourage investment. We put the death tax on the road to extinction.
The death tax is a punitive tax for small businesses and farmers and
ranchers. It's a tax you pay--you know, you're paying income tax when
you're making money; you're paying tax to the Government, that's fine.
And then you die, and then your heirs get to pay it all over again, and
that doesn't seem fair. It seems like to me that you want a tax system
that encourages families to be able to--a family member to pass their
assets on to whomever they choose without the Government making it
impossible to do so. And so the death tax was put on its way to
extinction. I said, put on its way to extinction; the problem is the way
the law was written. It's coming back to life in 2011, which is going to
make some interesting estate issues, particularly in 2010.
We increased the child credit. We want to help families who have got
children. One of the things that's really important for Congress to
recognize is that most new jobs in America are created by small
businesses. If you're interested in job growth, then you've got to be
thinking about, where's the engine for growth? And it's the small-
business owner. Seventy percent of new jobs in America are created by
small-business owners and entrepreneurs. Many small businesses pay tax
at the individual income tax level--sole proprietorships, subchapter S,
you know. These are structures in which people are able to grow their
businesses, but they're advantageous to the owners of business. And yet,
you pay individual income tax rates.
So when you hear me talking about, ``We cut taxes on individuals,''
you also have to recognize we cut taxes on small businesses. And if you
want there to be job creation to offset the trauma that our economy has
been through, our country has been through, then it makes sense to say
to the job creators, ``Here's a little more money for you in your
pocket.''
We also encouraged investment. You might remember we made it tax
advantageous to increase investment in plant equipment if you're a
small-business owner. All the policies that I'm describing to you were
aimed at saying to the small-business sector, ``We understand your
importance; here's how to help you grow.''
The other thing that you've got to understand in Washington is that
you hear a lot of debate about the deficit, and it's an important
debate, don't get me wrong. But in my judgment, the best way to solve
the deficit is to grow the economy, not run up your taxes. See, there is
a myth in Washington--they say, ``All we've got to do is just raise the
taxes a little bit, and we'll solve the deficit.'' No, that's not how it
works. They're going to run up your taxes, but they're going to find new
ways to spend the money and not solve the deficit. That's how Washington
works.
The best way, it seems like to me, to solve the deficit is to keep
progrowth tax policies in place and do something on the spending side.
And so I'm working with Congress--and I want to thank the Speaker and
the Leader for supporting and passing lean budgets. I say ``lean''
because we've got one aspect of our budget that is not going to be lean.
And that is any time we've got a kid in harm's way, he or she is going
to have the best equipment, best training, best possible pay. That's
what we owe the families of our military.
But on nonsecurity discretionary spending, we've slowed it down
every year I've been in office. And, actually, the nondiscretionary--
nonsecurity discretionary spending--I'm from Texas--[laughter]--is lower
in '06 than it was in '05. We've actually reduced nonsecurity
discretionary spending. The issue for the budget is mandatory spending.
See, that's when--that means you don't have discretion over it; it's
fixed by formula. The two biggest programs we face, of course, are--for
mandatory spending increases--are Medicare and Social Security. And
we're going to have to do something about it, and a lot of folks in
Washington don't want to do anything about it--it's too hard,
politically.
I want to share some thoughts with you about my view of ``too hard,
politically.'' I think we're supposed to do the hard things,
politically. I think the job of a President and

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jobs of leaders in Congress from both political parties should--confront
problems now and not pass them on to future generations. And we've got a
problem with Social Security and Medicare, and I'll tell you why. We've
got a bunch of baby boomers like me getting ready to retire. As a matter
of fact, I'm 62 years old in the year 2008--it's a perfect fit.
[Laughter] And there are a lot of us. I'm looking at some of them here.
And we've been promised greater benefits than previous generations.
The politicians that ran for office said, ``Vote for me; I'll make
sure your Social Security benefits go faster than the rate of
inflation.'' And as a result of a lot of us retiring and fewer people
paying the system, the deal is going broke. And it's hard for me to
travel our country and look at hard-working people paying payroll taxes
to a system that I know is going broke. And it should be hard for
Republicans and Democrats on Capitol Hill as well.
And so I just want to assure you that no matter how hard it may seem
for some, I'm going to keep talking about it. That's the job of a
President, is to remind people of the challenges.
There's a long-term deficit issue as a result of a system which is
out of balance and out of kilter; and we need to do something about it
now; we have that obligation. The Senate has the chance--or the House
now has the chance to pass a budget bill, or an appropriations bill,
reconciliation bill that actually starts to cut mandatory spending by
making reforms. The deal passed out of the House, passed out of the
Senate, now it has to go back to the House. And it would be a good-faith
gesture on people from both political parties to say, ``We see we've got
a problem on mandatory spending; why don't we start reforming the system
for the sake of future generations of Americans.''
Things are going well, by the way, in the economy. We added 4.6
million new jobs since April of 2003. What I'm telling you is, the tax
plan is working, and here's why I can say it to you without having to
throw some hot air your way. Since April of 2003, 4.6 million new jobs
have been created--not by government, but by entrepreneurs. We had a
national unemployment rate of 4.9 percent--I think it's 2 percent, 2-
point-something percent here in Loudoun County. But think about--
[applause]--the economy grew at 4.1 percent in the third quarter. And
that's in spite of high energy prices--or higher energy prices and two
storms. Think about that. Think of how robust our economy is when it's
growing at 4.1 percent in the third quarter of this year, in the face of
storm and high energy prices. It's got to affect your business, doesn't
it, all those high energy prices. And yet, you're growing.
In other words, we've got an economy which is robust. The
interesting statistic is the manufacturing activity has been up for 31
straight months. You hear a lot of talk about manufacturers and the
trouble with manufacturers, and of course, there are some trouble. But
we've had growth for 31 straight months. Productivity is up. That's a
really important statistic for our country because productivity--as a
worker becomes more productive, as the workforce is more productive,
higher wages follow; that's just a fact of life.
Do you realize that from 1973 to 1995, productivity in America grew
at 1.4 percent. At that rate, the standard of living doubles every 50
years. Today, our productivity is up, averaged 3.4 percent over the past
5 years. In other words, we're more productive as time goes on.
Technology enables our workers to be more productive. Education enables
our workers to be more productive. Smart business leaders are constantly
trying to figure out how to make their companies more productive. The
more productive a workforce is, the faster incomes go up.
So what I'm saying is, things are going fine. I mean, you know,
we've got more minorities ever before in our country owning their own
home. Homeownership is on the rise. And the fundamental question facing
us is, what do we do to keep it going? What do we do? Well, first thing
is, Congress needs to make the tax relief permanent. You know, this
relief is set to expire. The easy course is, of course, say, ``Well,
then just let it expire.'' That's a tax increase if the tax relief
expires. When you hear people say, ``Well, we're not going to make it
permanent,'' what they're telling you is they're going to run up your
taxes; that's what they're saying.

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Failure to make tax relief permanent is a tax raise on the working
people and the small businesses in this country. If you're a small-
business owner, there's got to be certainty in the Tax Code. Congress
needs to put themselves in the shoes of people who are trying to plan.
Good business owners, good small-business owners don't think, you know,
2 months in advance; they think years in advance; they're making capital
schedules; they're thinking about how to grow their company; they're
constantly strategizing. Uncertainty in the Tax Code makes it hard for
the small-business sector to stay confident and to make investments. And
when there is uncertainty, it makes it harder for this economy to show
steady growth.
So people need to make this tax cut permanent so we don't take money
out of your pocket. And we need to make the tax cuts permanent so there
will be certainty when it comes time for small businesses to plan.
I understand there's a problem in health care, and I suspect during
the question-and-answer, we'll get questions on health care. One of the
biggest problems our small businesses have is the increase in health
care. The role of Government, in my judgment, is to take care of the
poor through Medicaid and community health centers. The role of the
Government, in my judgment, is to take care of the elderly through a
Medicare program which is modern, and by the way, provides choices for
our seniors. But I also think the role of Government is to encourage a
direct relationship between the consumer/the patient, and the provider/
the doctor, without a lot of go-between.
I think that--I know that small businesses should be allowed the
same affordability of health care that big businesses get by being able
to pool across jurisdictional boundaries, pool your risk. If you're a
restaurant owner in here Loudoun County and a restaurant owner in
Crawford--I think there are a couple of restaurants here. [Laughter] If
not, there will be. No, there is a good one, The Coffee Shop--I mean,
Coffee Station, excuse me. But they should be allowed to pool their risk
across jurisdictional boundaries. In other words, the larger the risk
pool, the more employees you're able to get in a risk pool, the easier
it is to manage your costs when it comes to health insurance. You can't
do that now. And Congress should be allowed--encourage you to be able to
pool risk.
An interesting product available is called health savings accounts.
I strongly urge every small-business owner here to look at them. It's an
innovative product that enables the small-business owner and the
employee to combine, work together to come up with a plan where the
employee owns it. It provides for a high deductible catastrophic plan,
coupled with tax-free contributions in the plan, basically gives the
consumer control over his or her medical decisions. The plan can grow
tax-free, which is an encouragement for people to make wise decisions
about how they treat their body. If you have a catastrophic event, the
insurance kicks in and covers it. It's portable; if you change jobs, you
can take it with you. It's a good--it's an interesting idea.
It certainly stands in stark contrast with a system in which the
Federal Government gets to make the consumers decisions, or tells the
providers what they can charge. It's the opposite of Federal control; it
is patient control.
We need--do a lot on information technology. The health care
industry is inefficient in that you've still got people filing out forms
with handwritten notes. And doctors can't write anyway--[laughter]--and
it creates a lot of confusion, as you can imagine.
We need to have legal reform. I mean, you can't have a legal
system--I mean, a medical system that's available and affordable when
you've got your doctors being sued. Do you realize we've got a crisis
when it comes to ob-gyns in America? These good docs who have got the
great compassionate job of taking care of youngins, they're getting run
out of business because of frivolous and junk lawsuits. It makes no
sense.
When I first came to Washington, I said, you know, ``This is a State
issue.'' But the problem with all these junk lawsuits is that they cause
doctors to practice defensive medicine. In other words, they prescribe
more than they should because they're afraid of getting sued. And when
you practice defensive medicine, it makes the cost of medicine go up.
And when you couple that with increasing premiums, it costs us a lot of
money

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at the Federal level--I'm talking billions a year as the result of junk
lawsuits.
And good small-business owners have trouble affording health care;
part of the reason why is because of these junk lawsuits. And so I've
decided this is a national issue that requires a national response. We
need medical liability reform in Washington, DC, so that health care is
available and affordable.
Laura always says I get too long-winded when I come to one of these
deals--[laughter]--and so I'll try to rein it in here. I've got
something to say, though.
We've got do something about lawsuits, in general, not just medical
lawsuits. One of the things I hear a lot from small-business owners is
they're afraid of getting sued. I mean, we've got a society which is
litigious in nature. People are just suing right and left. That makes
it--that runs up the cost of staying in business. It makes it harder for
people to work. Of course, if you have a legitimate lawsuit, you ought
to get--you know, have your day in court. Everybody understands that.
It's just these frivolous lawsuits.
And we're trying to do some things about it in Washington. We've got
a class-action lawsuit reform passed. We're trying to get asbestos
reform passed. We got bankruptcy passed. We got manufacturers liability
passed when it comes to firearms. I mean, we're making some progress
when it comes to lawsuit reform. I urge the attorney general here to--
urge the Governor in the Commonwealth to pass good lawsuit reform as
well. It's a really important issue for the vibrancy of our economy.
Now, energy, real quick. Look, we're hooked on foreign sources of
oil, and we need to do something about it, pure and simple. I've got a
strong faith in technology being able to lead us away from a hydrocarbon
society. It's going to take awhile. But the Federal Government has a
role to invest in research and development. I envision a day when we're
using corn, corn husks, different kind of grasses to be able to convert
that into energy.
Down in Brazil, they've got enormous amounts of energy they get from
their sugarcane. Their automobiles are flex-fuel automobiles; they're
able to convert from gasoline to ethanol made by sugarcane on an easy
basis. I mean, it's coming. And the role of the Federal Government is to
encourage these new technologies, to be able to make us less dependent
on foreign sources of oil.
We need to be--we ought to have more nuclear power in the United
States of America. It's clean; it's renewable; it's safer than it ever
was in the past. And we need to be thinking about how we can use solar
batteries better. I mean, there's a lot of things we can be doing. I'm
confident that with the right policies and the right incentives,
technology will help us diversify away from a hydrocarbon world.
But we've got plenty of certain kinds of hydrocarbons we can use,
coal. I'm also convinced, with the right expenditure of money, that
we'll be able to have zero-emissions coal-fired plants that will make us
less dependent. Do you realize we've got about 250 years of coal here in
America? It seems like to me, a wise investment is to figure out how to
use that coal in a way that heats your homes and fuels your businesses,
and at the same time, protects the environment. So we have to think
about how to incorporate new technologies to diversify away from foreign
sources of energy, not only for economic security but for national
security purposes.
I want to talk real quick about trade. I believe it's important to
open up markets. I think it's a mistake for this country to go
isolationist when it comes to economic policy. Do you realize we're 5
percent of the world's population, which means 95 percent of the rest of
them could be customers, so long as we've got a level playing field. My
job is to make sure that if you're producing a product, that it has fair
access to markets. We ought to treat people--people ought to treat us
just like we treat them. And I'm a strong believer that if the playing
field is level, this country can compete with anybody, anytime,
anywhere. And if we can't, we ought to figure out why not. Competition
is good, so long as it's fair competition.
And finally, I want to talk about education. As you expand your
businesses, as they become--you know, as they change because of
technology, you're going to need a workforce that is capable of filling
the jobs. We've got to make sure we get education right in the United
States, otherwise the jobs of the 21st

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century are going to go somewhere else. This is a competitive world in
which we live; there's no way to deny that there's competition in the
world. We can play like it. We can put up, you know, foolish, short-term
economic policies that will hurt the small-business sector,
protectionist policies. But it's a competitive world, and people are
going to go to where the skill sets of the labor market are such that
they'll be able to produce the products of the 21st century. It's a
reality.
So what do you do about it? Well, the first thing you do about it is
you make sure your kids at the elementary school get an education; teach
them how to read, write, and add and subtract. The No Child Left Behind
Act is a great piece of legislation. I think as small-business owners,
you'll understand where I'm coming from. It says, you've got to measure
to determine whether or not you're succeeding.
I was concerned when I was the Governor of Texas that we had an
education system that didn't measure, and therefore, we didn't know. And
oftentimes when you don't know whether a child can read and write and
add and subtract, they just end up being shuffled through the system. I
believe that we ought to measure. As a matter of fact, we are now
measuring as a result of the No Child Left Behind Act that says, ``We
want to determine whether or not you can read at grade level by the
third grade and whether or not you're grade level at the fourth grade
and the fifth grade and so on. And if not, here's some money to help you
make sure the child is up at grade level.''
You cannot solve a problem until you diagnose a problem. And the No
Child Left Behind Act is a diagnostic tool for local school districts.
We're not telling you how to run your schools; that's up to you. We
didn't design a Federal test; we just said, ``You design an
accountability system.'' And it's working. We have an achievement gap in
America that is not right and needs to be closed. We have too many
African American kids not reading at grade level, and they should be.
And I say a lot of that is due to just moving kids through without
determining early whether or not they've got the skills necessary to
read, write, and add and subtract. And we're changing that. The
achievement gap is closing. It's a really positive development. I can
tell you how I know, because we measure, and we solve problems early,
before it's too late.
We've got to have these same high standards in high school, with an
emphasis on math and science. We've got to use our community college
systems to constantly upgrade the skills of people. As you know, the job
market changes. And the easiest thing for a society is to have
technological change; the hardest thing is to make sure that the
education systems are flexible enough to help the job market change with
technology.
Community college is a great asset in our country. They're
available; they're affordable. And if they're run right, they have a
curriculum that changes with the times. They're not one of these
institutions to just stay stuck. They're an institution that says,
``We're going to change our curriculum to be able to educate people for
the jobs which actually exist.'' That's what we need to do, what I'm
telling you.
So I'm going to go to Congress here pretty soon and call on them to
put economic policy, energy policy, health policy in place that
understands that this economy is strong, but we need to do the right
things to keep it going--with the centerpiece of our economic policy
being the small business in America.
Anyway, that's all I've got to tell you right now. I'll be glad to
answer a few questions. Yes, sir.

Transportation

Q. [Inaudible]
The President. Thank you.
Q. [Inaudible]
The President. You have got a transportation problem here.
Q. [Inaudible]--Northern Virginia. Down time in traffic is loss of
productive time for businesses, and it's time away from home and family
for individuals. We don't get to use helicopters. [Laughter]
The President. Right. I won't in 3 years, either. [Laughter]
Q. How can the Federal Government help States and localities address
transportation problems?
The President. We passed the highway bill, and it's set. Congress
argued about it,

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and I argued with them about it. And it's a $270 billion-plus bill that
is the law for a period of time, and now it's up to you to spend the
money allocated to you by formula in a wise way. I think it's an issue
where the Federal Government's responsibility is clear on the law. And
that is that we take the gasoline taxes and pass them back to you, but
you get to decide where the roads go. And that's probably the way it
should be.
I was noticing that the inauguration--or the campaign for Governor
here, part of the campaign was roads. And that's good; that's the way it
should be. People say, ``Vote for me; I'm going to do something about
your roads or I hear your problem with your roads.'' And so you want the
decisionmaking about the roads to be here at the local level. But the
Federal Government's role in highways is pretty well fixed for 5 or 6
years.
Yes, sir. Go ahead and yell it out.

Taxation

Q. Yes, good morning. I'm a CPA here in Loudoun County.
The President. Right.
Q. [Inaudible]--prepare a couple hundred tax returns a year, and the
IRS does not spend a lot of time auditing. The last administration
turned the IRS into a customer service department. And here, the last 3
years, it's been reorganized. There's quite a few people that do not
comply. I really think that the IRS needs to get out there and audit. I
hope none of my clients are here. [Laughter]
The President. That's a very unbelievably interesting statement from
a--[laughter]. No, but you've got a good point. Look, here's the point
the man is saying. He's right. There are too many honest people--first
of all, there are people who feel like they don't have to pay taxes, and
that's not fair to the millions of honest people who do. A tax system
is-- [applause].
Look, I don't know the inner workings of the IRS; I know there is
strong enforcement. And with the millions of filings, I would suspect
there's programs in place that highlight irregularities that then call
up the audits. I don't think you can ever audit everybody, nor would you
subscribe for everybody being audited who files a return. But if there's
flagrant anomalies in reporting, I suspect they take a good look at it.
You'll be pleased to hear that I'm audited every year--[laughter]--
one way or the other. More than happy to put out my income tax returns
for my friends in the press to scrutinize. [Laughter] I see them
nodding--yes, they love--[laughter]--as it should be, by the way, for
people in public office. Those of us in public office have the high
responsibility to uphold the integrity of the process. And people ought
to be held to high standards. In Washington, DC, there needs to be high
standards for conduct of public officials.
Yes, sir.

Homeownership/Market Adjustments

Q. [Inaudible]
The President. Homebuilder, good.
Q. [Inaudible]--substantially over the past housing boom. And I
guess my question is, as the consequence of this great housing boom has
increased the cost of housing so much not only in this area but
throughout the country, it's very difficult for me to envision my kids
being able to afford a home, or even the workforce that drives much of,
you know, our school systems and our police and fire forces--
[inaudible]. How do you see the Federal Government helping this
workforce out--[inaudible]--to be able to afford housing close to where
their jobs are?
The President. Markets adjust, and the role of the Government is to
make sure the market is able to adjust in a way that is not precipitous
and disruptive. When you have wage and price controls, for example, in
history, it's tended to not allow the market to adjust in a smooth
function, a smooth way. It doesn't function properly. And therefore, the
consequences of Government trying to either manage price or demand is
very severe.
So to answer your question, one role of the Government is to make
sure that markets are given the flexibility to adjust in a way that
doesn't cause major disruption. If houses get too expensive, people will
stop buying them, which will cause people to adjust their spending
habits.
Secondly, setting of interest rates affects your business. You'll be
happy to hear that

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the White House doesn't set interest rates; the Federal Reserve Board
sets interest rates. I get to name the Chairman; I named a good guy in
Ben Bernanke. But it's their job to be independent from the political
process and look at market forces--in all aspects of our economy--to
determine the interest rate to be set. Obviously, they look at
inflation, consumer demand, et cetera.
And so to answer your question, a simple answer is, let the market
function properly. Let the market function properly. I guarantee that
your kind of question has been asked throughout the history of
homebuilding--you know, prices for my homes are getting bid up so high
that I'm afraid I'm not going to have any consumers--or my kid--and yet,
things cycle. That's just the way it works. Economies should cycle. We
just don't want the cycles to be so severe that it gets disruptive so
that, you know, you get thrown out of business, for example, or somebody
gets thrown out of work.
Yes, ma'am.

Health Care Reform

Q. Thank you for coming to Loudoun County, Mr. President. I run a
nonprofit that provides health care to the uninsured----
The President. Good.
Q. ----something near and dear to your heart--45 million uninsured
people in the country, and of course, Loudoun County is no different. We
provide health care free by volunteer physicians who are involved in a
nonprofit, and it's a good private-public partnership. You talked about
creating health--[inaudible]--as part of the health care delivery
systems. We, too, are part of health care delivery systems. How do you
see your role and the Government's role in helping us do what we do,
when we've discovered recently that we're not going away anytime in the
near future?
The President. Yes. Well, first, I think there ought to be--well,
first, there are tax incentives to encourage people to contribute to
your nongovernmental organization, which is good. That's what we want.
We want people to have a Tax Code such that if you give to your group or
a church, synagogue, or mosque, or somebody whose job it is to help the
unfortunate, you get a deduction for it.
Secondly, the uninsured is--first of all, there's the working
uninsured; a lot of them work for small businesses because small
businesses can't afford insurance. A small-business owner would like to
pay for the insurance, but the cost of medicine is increasing.
And I just gave you two prescriptions for that. One is--well, a
bunch of prescriptions--to help control the cost and enable small
businesses to be able to manage the expense. If you stand alone as a
small-business owner--10,000 businesses, 80 percent of which have got 10
employers or less--and you try to buy insurance as an employer of 10
people, it's going to cost you a heck of a lot more than if you try to
buy insurance with your 10 people in a pool of 5,000 people. It's just
the way insurance works. It's called spreading the risk.
There are some in the uninsured world who simply choose not to buy
insurance. That would be your bulletproof 22-year-old person--you know,
just out of college--[laughter]--``I'm never going to be sick; nothing
ever bad is going to happen, I just don't think I'm going to want any.''
[Laughter]
Health savings account is an interesting opportunity for the young
22-year-old healthy person, who is able to put money aside, tax-free,
and watch that money grow, tax-free, and take the money out of the
health savings account, tax-free, coupled with a high deductible
catastrophic health plan. In other words, this is a product that will
say to those who choose, here's an opportunity for you. You start
putting aside $1,000 a year--in other words, you buy a high deductible
policy with a $1,000 deductible, and you put the $1,000 cash--you do or
your employer does, or however you negotiate it--that $1,000 grows. And
it can grow to be pretty substantial, particularly as you're a healthy
person, over a period of time, tax-free. And all of a sudden, you've got
quite a nest egg.
I'm going to call on Congress, by the way, to make these health
savings accounts more attractive, more portable, more individualized.
There are some who come to our country that don't have any health
insurance, but work. We've got immigrants coming that can't afford
health care. Their employers--

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the type of job they have is one that doesn't lend itself to health
care. One way the Government can help is to have community health
centers as primary care facilities, to deliver health care and take the
pressure off the emergency rooms. We're expanding these a lot. In my
judgment, it's a good use of taxpayers' money to provide health clinics
for the poor and the indigent. So that they don't go to where the health
care is more expensive, the emergency room, but go to where the health
care--primary health is more manageable.
And so there's a series of ways to address the issue. But the truth
of the matter is, Government policy has got to aim at the increasing
cost of health care.
Part of the issue in Medicare is the projections of health care
costs going up the way they are. The issues that small-business owners
face in the short term is increasing premiums. And so we need medical
liability reform to help address the costs. We need to encourage
information technologies, and I'm told that there would be a significant
reduction of medical costs as we modernize medicine and bring medicine
into the 21st century through the use of information technology.
Health savings accounts encourage consumers to pay attention to
price. There needs to be transparency in pricing. Do you realize the
medical field is one where you don't do any comparative shopping? When
you buy tile, I presume, for your house, you're out there shopping it.
You know, say, look, what am I bid? You know, when you're buying pipe or
things you put in the wall, insulation, you're out there bidding price.
There's no transparency in pricing in medicine. You don't know whether
the guy next door is going to offer a better deal when it comes to some
kind of medical procedure.
It seems like to me the more transparency in pricing, the more
likely it is consumers will have an input into the cost of health care.
And so these are ways to address the cost of health care. Obviously, as
health care costs--the rate of increase is manageable, there will be
less people coming in to see you.
One of the reasons why the uninsured is going up, because the cost
is going up. And so the Government needs to address the cost. There is a
debate in Washington. Some will say the way to address the cost is to
have the Federal Government be the decider, the decider for the consumer
and the decider for the provider, and that will be--in my judgment--
terrible for this country. And so this is--we're talking about a very
important and interesting debate. And I'm going to continue pushing
policies that address cost and empower the patient and the doctor into a
relationship that is not only good for the patient but also one in which
I think will affect the pricing mechanisms and the prices here in the
country.
Yes, ma'am.

U.S. Armed Forces

Q. [Inaudible]--and we're proud of you Mr. President, and your----
The President. Keep it up, will you? [Laughter] About time.
Q. [Inaudible]
The President. Thank you. [Laughter] It's always good to have a
plant in every audience, you know? [Laughter]
Q. Well, the timing of this opportunity is uncanny. I want to thank
you for your unwavering support of the Veterans Administration. My
father spent the last 2 years at the Martinsburg, West Virginia VA,
where he was loved and respected and so well cared for. And we buried
him 2 weeks ago in Arlington, and it struck me then how strong the
promise still is for our veterans and our wonderful men and women of the
service. And I thank you.
The President. Thanks. You know what I thought just when you said
that at first, our country is great because we've got a lot of people
who have been willing to serve. It's really important that we keep an
all-volunteer military. And one way to do that is to make sure that
people are paid well, or as good as you can pay them; that they're
trained well; that their loved ones have got adequate housing on the
bases--in other words, family life is good; that the education systems
work on our bases. But also after service, there is a health care system
that will provide modern health care for them.
So thanks for bringing that up. The Volunteer Army is really an
important part of our Nation, and it's a really important part of

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fighting this war on terror. We've got kids who know the stakes. They
saw the attack on September the 11th. They have made a conscious
decision to swear-in to serve the country. So thanks for brining that
up. I just wanted to share that with you, to tell you that our troops
are always on my mind; their families are always on my mind. And it's
important to leave a legacy behind of a strong military based upon
patriotic Americans saying, ``I want to serve. I'm stepping up. Nobody
is telling me to. I have made the decision to do so.''
Yes, sir.

President's Personal Values/Leadership

Q. Good morning, Mr. President, thank you for being here. My son is
one of those young men, at 18 years old almost--I hope I don't cry, but
I----
The President. I hope you don't, too, because I will, as well, and
then we--[laughter].
Q. Okay. He asked me to take him to the Army recruiter. He didn't
drive yet, but he wanted to go to the Army recruiter to join the Army.
He's in the National Guard in Christiansburg, Virginia. And he's also at
the Virginia Tech Corps of Cadets.
The President. Oh, good, thanks. I know you're proud of him.
Q. Yes, I am.
The President. Good.
Q. He sends his best wishes to you.
The President. To the old Commander in Chief, that's a smart move,
you know. [Laughter]
Q. He and I discussed a question, and I want to ask you. Most people
in this room today are leaders of some type. I'm a leader of an adult
education center for Marymount University. And my question to you is how
do you remain upbeat when you're surrounded by the burdens of
leadership?
The President. Thanks. My faith and my family and my friends, for
starters. I like going home to be with my family. I was teasing about
Laura waking me up this morning at 12:45 a.m., but I'm glad she did. I
take great pride in my little girls. I'm not going to talk about them
too much, otherwise these people will put it in the newspaper. And I'm
trying--[Laughter]. Right, Jackson [David Jackson, USA Today]? I'm
trying to spare them because I think that one of the hardest decisions
about going into public life is exposing people you love to the public
nature of public life.
I'm proud to tell you that my friends that I knew before I became in
public office are still my friends. One of the coolest things to do in
my Presidential work, one of the--[laughter]--seeing if you're paying
attention up there--[laughter]--things I like to do is to welcome my
buddies. And Laura feels the same way, people we grew up with--we both
grew up in Midland, Texas. I remember having some of my friends that I
went to first grade with, a guy I grew up across the street with,
Michael Proctor, they came up to have dinner at the White House. You
know, and they kind of walk in there. You can imagine what it's like.
It's a great honor, pretty awe-inspiring deal. They walk in there and,
kind of, ``What are you doing here, Bush?'' You know. [Laughter]
But I really like it. And they're my friends. They help me keep--
help me remind myself that what's important is what you believe. And
leaders have got to know the core principles on which you'll make
decisions, and you can't change. There's a lot of temptation to change
to try to make people want to like you. That's not the job of a leader.
The job of a leader is to know where he or she wants to lead and know
the principles on which you'll make decisions.
I take great comfort in having people around me who can walk in my
office and tell me what's on their mind. Part of my job is--they say,
``What's your job?'' My job is, decisionmaker. I make a lot of
decisions. Obviously, some of which you've seen, and a lot of them you
don't. And they're big ones and little ones, but you make a lot of
decisions. And if you don't--if you're uncertain about all the facts
surrounding a decision, you've got to rely upon people. And you've then
got to create an environment in which people are willing to come in and
say, ``Here's what's on my mind.''
It's important at the Presidential level. It's important in
business. You've got to have people comfortable about saying, ``Here's
what I think you ought to do, Mr. CEO.'' You've got to listen and have
a--I've always believed in a flat organizational chart. I think

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the worst thing that can happen for decisionmakers is to get a filtered
point of view.
And it's pretty hard as President, needless to say, but I've got a
group of people around me that are empowered to walk in. Condi Rice,
when she walks in, she comes in as a close friend, but as someone who
knows that our friendship will be sustained, whether she agrees with me
or not. Rumsfeld comes in--and he's a crusty old guy who--[laughter]--
and he's got an opinion, and he tells it. And that's important. And
that's the way it is throughout the White House.
I like to tell people, the first decision I made as President was
this--the guy called me--I was at the Blair House looking at my
Inaugural speech, trying to get comfortable with it, get ready to go--it
was a pretty big event coming up, and wanted to make sure that it worked
well. And he said, ``Mr. President-elect, what color rug do you want in
the Oval Office?'' I said, ``Man, this is going to be a decisionmaking
experience--[laughter]--what color rug do I want in the Oval Office?
``[Laughter] He said, ``No, I'm not kidding you.'' Turns out Presidents
design rugs. [Laughter] Or somebody designs them for them. And I said,
``I don't know anything about rug designing,'' so I delegated to Laura.
[Laughter]
Interestingly enough, the job of a leader is to think strategically.
It's important for your businesses; it's important for the country. And
so she said, ``Tell me about the rug.'' And I said, ``I want it to say,
`optimistic person comes here to work every day.' '' It was the
strategic thought for the rug. She figured out the colors. It looks like
a sun, with nice, open colors. You walk into that Oval Office, I think
you're going to say, it looks like, you know, this guy is optimistic.
I'm optimistic--by the way, you can't lead your company and say,
``Follow me, the world is not going to be good.'' You're not going to
have a lot of employees say, ``Great, I love working here,'' you know.
[Laughter] It's got to be, ``Follow me, the world is going to be better,
and I have a plan to do it.''
And one reason I'm optimistic is because I'm sustained by my faith,
family, and friends. I'm also sustained by the fact that I believe
strongly in the values of the United States of America: human rights,
human dignity, individuals count, freedom is the future of the world.
And I'm sustained by those beliefs.
And thanks for the question. It was an interesting question.
Yes.

Broadband Technology

Q. On behalf of the Loudoun County Board of Supervisors, we welcome
you.
The President. Thanks. Thanks for having me. You don't look old
enough to have run. [Laughter]
Q. I'm the youngest member of the board. [Laughter]
The President. Yes, is this your board, here?
Q. This is--[inaudible].
The President. Yes, you certainly are the youngest, I can--
[laughter]. He's a pretty young guy too.
Q. And you probably know we've got health savings accounts for our
county employees--[inaudible].
The President. Good move. Good move.
Q. But on transportation, one of the solutions that I've been
putting forward is telework and expansion of broadband.
The President. Yes.
Q. [Inaudible]--so that people don't get caught in traffic. But
Congress is contemplating revisions to the Telecommunication Act of '96
that would essentially shut down the options that States and localities
are exploring to give broadband to every business and every home. So
what is your thought on, as we are falling behind in the world on
delivering broadband to businesses and homes and residences--what will
you do to----
The President. Yes, I need to find out--it's interesting you said
that because I laid out the opposite vision, which was that broadband
ought to be available and accessible all throughout the country by a set
period of time. I need to make sure I understand what you mean--Congress
is trying to unwind that vision, because it sounds like you and I
share--I believe you. Thank you for the heads-up. I'll take a look.
You're very smart to--part of the role of Government is to create an
environment in which people are willing to risk capital. Broadband
expansion is part of creating an environment in which it will make it
easier

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for people to be competitive in this part of the world. It's a brilliant
idea. People are able to do so much more from their home, particularly
if you've got the technology capable of carrying information.
You're right--want to make sure--you mentioned that other nations
are ahead of us. True, we're catching up, and we'll do better, by the
way. But if part of making sure America is competitive, is to make sure
that we've got broadband available and accessible. One of the
interesting questions we're going to have is the last-mile issue, and a
lot of that, hopefully, will be changed, or at least options--more
options will be available with the development of a dish that is capable
of passing broadband over the air, as opposed to cable.
Good question. I need to check and see what you're talking about,
and will. Thanks for bringing it up.
Yes, ma'am.

First Lady Laura Bush

Q. [Inaudible]
The President. Yes, well----
Q. ----who happens to be one of the best First Ladies we've had.
The President. Thank you. I thought you might say ``top two,'' but
you know--[laughter].
Q. Well, the top two.
The President. If not, I won't tell her. [Laughter]
Q. I was just wondering, when we'll see our lovely First Lady run
for the Senate in the----
The President. Never. [Laughter]
Q. Come on. Ask her, will you?
The President. No, I'm not going to ask her. Never. [Laughter] You
know, I think--I'm pretty certain when I married her, she didn't like
politics or politicians. [Laughter] She's a great lady. She's
interested--she's not interested in running for office.
She is interested in literacy. We're going to meet with foundations
later on today to encourage them to step in where Government can't step
in, in New Orleans and the gulf coast. Laura is coming to the meeting.
And the reason why is she wants to help these schools get their
libraries up. She was a school librarian, and she believes strongly in
literacy.
I can remember her reading to the girls all the time. And I would
encourage moms all over the country--and dads--to sit down and read to
your young children over and over and over again. It's one of the
lessons she taught me--right after she taught me how to read. [Laughter]
She's great. Thank you for bringing her up. She's not going to run for
office.
Yes, sir.

Spread of Democracy/Progress in the Middle East

Q. Mr. President, my wife, Sandy, and I send our prayers and our
appreciation for all that you're doing and these difficult issues that
you're dealing with. I'm a grandfather, about your age, but I have----
The President. You got started earlier.
Q. I got started a little earlier. And I'm really proud of my
family. You touched on a lot of issues that really affect us. We have a
health care provider and an attorney, in the building industry, in the
defense industry, and a young grandson who is espousing to--
[inaudible]--the military academy. We are very happy with the
foundations that President Reagan and your father laid 23 years ago,
about the time that--[inaudible]--started. We're building off of that
today. We're living in that security, with a good defense system, and we
have a strong economy, some of which extends from those days. Do you
look forward--and what can I tell my grandchildren--do you look forward
20, 25 years from now and see a vision of America?
The President. Yes. I tell people this story a lot. When my dad was
18, he went to fight the Japanese. And some 60 years later, his son sits
at the table with the Prime Minister of Japan, to help keep the peace.
Someday, I firmly believe that leaders in the broader Middle East will
be duly elected and will be sitting down with future American Presidents
to keep the peace.
So part of the vision for your children and grandchildren is to
understand history and the power of democracy and freedom and liberty to
change enemies into allies. And I talk about a lot in my speeches,
laying the foundation of peace. And I firmly believe that

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what we're doing today is laying the foundation of peace.
I know--I know that some say democracy can't take hold in parts of
the world, ``You're wasting your time, Mr. President.'' I strongly
disagree with that. The natural rights of men and women--that's part of
our founding--says that inherent in every soul, I believe implanted by a
higher being, is the desire to live in freedom, no matter the color of
your skin or the religion you embrace. And so part of the vision is to
lay that foundation of peace by believing and acting on the principles
that caused our own existence to be and on principles and values that
have proven over time to yield the peace.
Think about Europe. It's hard for some of us to think about Europe
because Europe didn't really affect our lives, did it, much. But if you
look back over the recent history of the United States and the world,
two world wars started in Europe. And today, Europe is whole, free, and
at peace because of democracy, in my judgment. The Far East--[applause].
And the reason this is important is because we're in an ideological
struggle. The enemy which attacked us on September the 11th was not just
acting out of anger, although they were not acting out of hate, although
I believe their hearts are hateful, but they were acting based upon an
ideology.
The best way to make sure the American people understand what
happens when their ideology takes hold is to think about life in
Afghanistan under the Taliban. If you're a young girl in Afghanistan
under the Taliban, you have no chance for success. You have no chance
for education. If your mother speaks out in the public square, you get
whipped--she would get whipped. These people have a vision that is the
opposite of America. Their vision is, ``Here is my view of religion, and
if you don't agree with me, you're in trouble.''
Our belief is, is that what matters is your view of religion; you
can choose. The great freedom in America is the ability to choose your
religion, to be religious or not religious. We're equally American--Jew,
Muslim, Christian--we're all equally American in this country. That's
the opposite of what these people think. They have got a strategy;
they've got a goal, which is to spread this vision throughout the world,
starting in the broader Middle East. I say it's to go from Spain to
Indonesia, to establish their--a caliphate with their point of view.
These are ideologs.
And so you defeat an ideology with a better ideology. If there's no
competition, if there's a vacuum, if there's poverty, hunger, and
anxiety and a vacuum is created because of that, this ideology will move
in. However, there is a competing ideology available. If there's an
alternative for people to choose from, then all of a sudden their march
to their vision is impeded in the long run. And democracy is the
alternative: Liberty.
It's not American-style democracy. Japan didn't say, ``Let's just
look like America.'' Japan said, ``We'll have a democracy that suits our
needs.'' That's the way democracies develop. They develop with history
and culture of the people in mind.
And so what you're seeing in Iraq is two-fold: One, a commitment to
defeat an enemy overseas so they don't hit us again, coupled with
allowing these Iraqis to live a dream of being free. And it's tough
work; it's tough because some of the enemy are these ideologs that are
trying to stop the march of freedom. Some of them are people that are
irritated because Saddam is not in power. They liked it being the, you
know, the power elite. Some of them are wondering whether or not--the
Sunni rejectionists are wondering whether or not they'll even have a say
in the future government and therefore are nervous given the dynamics
and the demographics. But some of them are people there intent upon
destroying the advance of democracy because they understand--they know
that they can't compete with liberty.
And the amazing thing that happened last year that I hope--at least
gives me heart is that millions of Iraqis made a choice. They defied
terrorists. We see them. The terrorists have got a weapon: It's called
our TV screens. These people are coldblooded killers; I'm telling you.
As you know, I don't need to tell you that. And what they're trying to
do is they're trying to drive us out before democracy can take hold
because they understand--I haven't talked to one so I'm not exactly
sure--I'm putting words in somebody's

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mouth. I would suspect, though, deep in their soul, they understand they
can't compete. Their ideology cannot compete with liberty.
And so to answer your question--it's a long answer, but it's an
important question. The President has got to be thinking down the road.
We've got a short-term battle we're going to win, but there's a long-
term struggle as well. It's an ideological struggle.
At home, I think two things that I would like to be remembered for,
and one is promoting ownership. I want people to own something. I want
people owning their own small business. I want people owning their own
homes. I think people ought to be allowed to own their own health care
account and make decisions for what is best for them. And there ought to
be incentives. I know a vibrant Social Security system is one in which
people are able to take some of their own money if they so choose and
put in a personal savings account so they can get a better rate of
return on their own money than the Government can get through the Social
Security trust. But more importantly, I want people owning something.
I'll never forget going to a Mississippi automobile manufacturing
plant. And I was on--a lot of the floor workers there, you know. And I
said, ``How many of you own your own 401(k)?'' Just needless to say it
was a very diverse audience. I don't know, I'd say 95 percent of the
hands went up--men, women, black, white. I said, ``How's it feel to own
your own assets?''
See, one of the problems we've had that shows--what we found out in
New Orleans there's not--there wasn't a lot of--we take--some things we
take for granted like the generations passing assets from one generation
to the next just didn't happen in the African American community, and
should. We ought to encourage--we take that for granted, don't we? Some
of us do. You know, you pass the house on. A lot of these people didn't
own their own homes. A lot of them didn't have checking accounts. And
yet one of the things we ought to encourage is systems--is reforms that
enable somebody to own something so they can pass it on to their child.
It's part of creating stability and healthy families and strength. And
so I want to be known as an ownership guy.
I also want to be known as the person that kept the de Tocqueville
vision for America alive--de Tocqueville was a Frenchman. He came to
America in the 1830s, and he studied America, and he came away impressed
by our democracy, but really impressed by the fact that people came
together to serve a greater cause through voluntary organizations.
People said, well, how best to help--in a vibrant society, help a
neighbor? And that is they formed what you call voluntary organizations
to help a neighbor in need. The great strength of this country is the
fact that there are millions of loving souls in America who are willing
to reach out to somebody in need.
I always say, Government can't love; it's just not a loving
organization. There are people who work for Government who have love in
their heart, but Government, itself, is not loving. It ought to be law
and justice. In my judgment, Government ought to be constantly thinking
about ways to rally what I call the armies of compassion, so that light
can head into the dark corners of our country; so that people who have
heard the call to love a neighbor are empowered to do so and encouraged
to do so.
One of the most--I think one of the most important and interesting
domestic initiatives, which I agree has created an interesting
philosophical debate, is to allow faith-based programs and community-
based programs to access Federal money in order to achieve the results
we all want. I mean, for example, if you're trying to encourage people
to quit drinking, doesn't it make sense to give people somebody an
alternative--he can maybe go to a government counselor; or how about
somebody who calls upon a higher being to help you quit drinking? All I
care about is the results. And the government ought to be----
So to answer--and that's a long answer and, by the way, it's my last
answer, because you're paying me a lot of money, or probably--
[laughter]. I'm not going to argue about my salary. [Laughter] But I've
got to get back to work. I do want to thank you

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for your interest. I hope you can tell I understand the importance of
making sure America is entrepreneurial heaven.
You know, one of the things that I love when I travel the world is
you can get a sense for the country by asking questions. One of the
things about our country is it's a place where you can start with zero,
you start with a dream and a good idea--in this case, a good mom and
dad--and take risk and realize your dream. And it's really important we
keep it that way forever. America has got to be a place where dreamers
can realize their dreams, and I love being in the midst of dreamers.
Thanks for letting me come by. God bless you all.

Note: The President spoke at 10:06 a.m. at JK Moving & Storage. In his
remarks, he referred to Randy Minchew, chairman, Loudon County
Republican Committee; President Ellen Johnson Sirleaf of Liberia;
Charles Kuhn, president, chief executive officer, and founder, JK Moving
& Storage, Inc., and his mother, Shirley; Linda Graves, wife of former
Gov. Bill Graves of Kansas; Gov. Tim Kaine of Virginia; Prime Minister
Junichiro Koizumi of Japan; and former President Saddam Hussein of Iraq.