[Weekly Compilation of Presidential Documents Volume 42, Number 20 (Monday, May 22, 2006)]
[Pages 943-945]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Signing the Tax Increase Prevention and Reconciliation Act of 
2005

May 17, 2006

    Thank you all. Please be seated. Good afternoon, and welcome to the 
White House. It's nice to see so many Members of Congress at this end of 
Pennsylvania Avenue. [Laughter] And you've come for a really good 
reason. This is a good day for American workers and families and 
businesses. You have passed a bill that will keep our taxes low and keep 
our economy growing. And I'm really pleased to be able to sign this 
vital piece of legislation. Thank you for your leadership.
    I'm glad you're here, and so is the Vice President. I'm proud to be 
up here with Vice President Cheney. I couldn't have picked a better 
person to be the Vice President of the United States. I appreciate 
Secretary John Snow for his leadership on this issue. Mr. Secretary, you 
have made a difference. I'm proud of your leadership. Thank you.
    I want to thank the Speaker of the House, Denny Hastert. Mr. 
Speaker, welcome back to the White House. Thank you for your leadership. 
And I want to thank Senator Bill Frist, the Senate Majority Leader. Both 
these men have shown fine leadership capabilities on an important issue 
for the American people.
    I want to thank Mitch McConnell, Jon Kyl, Kay Bailey Hutchison from 
the United States Senate. I want to thank John Boehner, Deborah Pryce, 
Eric Cantor. I particularly want to pay my respects to the chairman of 
the Senate Finance Committee and the chairman of the House Ways and 
Means Committee; Chuck Grassley and Bill Thomas are incredibly able 
legislators. They've done a fantastic job on behalf of the American 
people, and our Nation owes them a debt of gratitude. I appreciate all 
the Members being here today.
    This economy of ours is hitting full stride. In the first quarter of 
this year, our economy grew at an annual rate of 4.8 percent. This 
follows a vigorous 2005, when the American

[[Page 944]]

economy grew at 3.5 percent. The past 2\1/2\ years, we've added more 
than 5.2 million new jobs. Productivity over the last 5 years has grown 
at the fastest rate in decades. Higher productivity leads to higher 
wages for the American workers. Hourly compensation grew at an annual 
rate of 5.7 percent in the first quarter of this year. American workers 
are taking home bigger paychecks, and their standard of living is on the 
rise. The American economy is powerful, productive, and prosperous, and 
we're going to keep it that way.
    Economic growth begins with the hard work of the American people and 
good policies in Washington, DC. Over the past few years, our economy 
has faced a lot of challenges. We've been through a recession, a stock 
market decline, corporate scandals, an attack on our country, high 
energy prices, and major natural disasters. But we acted. We believe 
that our economy prospers when the American people make their own 
decisions about how to save and spend and invest their own money. And 
starting in 2001, we delivered the largest tax relief since Ronald 
Reagan was in the White House.
    We reduced taxes for every American who pays income taxes. We 
doubled the child tax credit, reduced the marriage penalty, created new 
incentives for small businesses to invest. We put the death tax on the 
road to extinction. The American people have used their money better 
than the Government ever could have. They've used the tax relief to 
provide for their families and create jobs and help the American economy 
become the envy of the industrialized world.
    Our progrowth policies stand in stark contrast to those in 
Washington who believe you grow your economy by raising taxes and 
centralizing power. They are wrong. Our progrowth economic policies are 
working for all Americans.
    One of the most important decisions we made was to cut the taxes on 
dividends and capital gains. These cuts were designed to lower the cost 
of capital and to encourage businesses to expand and hire new workers. 
And these tax cuts are doing exactly what we expected. When these cuts 
were passed in 2003, business investment had been dropping for several 
years. Since then, business investment has been growing at more than 9 
percent a year. Spending on equipment and software has hit record 
levels. And businesses have hired millions of new workers to fill the 
jobs that this investment creates.
    The cuts on dividends and capital gains are reaching families and 
businesses alike. About half the households in America, 57 million in 
all, have some investment in the stock market. They either own shares in 
individual companies or through mutual funds. Sometimes they own these 
shares through their retirement plans. By cutting the taxes on dividends 
and capital gains, we helped add about $4 trillion in new wealth to the 
stock market.
    If you have a mutual fund for your family, these tax cuts made you 
better off. If you have an IRA or a 401(k), these tax cuts will help 
provide a better retirement. If you're a senior who depends on dividend 
income to make ends meet, these tax cuts have led to a better check each 
month. At all levels of income, the tax cuts on dividends and capital 
gains are letting Americans keep more of their own money and live a 
better life.
    The danger was that the tax cuts on the dividends and capital gains 
were set to expire in 2008. That's created great uncertainty, because 
businesses and investors couldn't plan for the future without worrying 
about a big tax increase around the corner. That uncertainty discourages 
investment and expansion. It reduces opportunities for workers and 
families. The bill you passed helps to address this problem by extending 
the tax cuts on dividends and capital gains. By reassuring businesses 
that their taxes will not be going up any time soon, the bill increases 
confidence for our job creators. It will help millions of American 
families who are saving for the future.
    Part of our strategy to cut our deficit in half is to continue to 
grow this economy. Tax relief has helped a growing economy, which means 
more tax revenue for the Federal treasury--2005 tax revenues grew by 
$274 billion, an increase of nearly 15 percent over the previous year. 
This year the economy is still growing, and tax revenues are growing 
with it. So far, tax revenues are 11 percent higher than they were at 
the same point last year, which is better than projected. More than a 
quarter of these tax revenues come

[[Page 945]]

from corporations who pay more because they're growing with the economy.
    By growing this economy, we're staying on track to meet our goal of 
cutting the deficit in half by 2009. But to meet that goal, we must be 
strong on controlling the Federal appetite for spending. Every year 
since I took office, we've slowed the growth of discretionary spending 
that's not related to the military or homeland security. My last two 
budgets have actually cut this kind of spending.
    Congress is now considering an emergency supplemental bill that can 
show the American people we're determined to be fiscally sound with 
their money. I've set a clear limit on spending that I'll accept for 
this legislation, and if this bill goes over the limit or includes 
nonemergency or wasteful spending, I'll veto it.
    For the past 50 years, Republicans and Democrats have had many 
differences, but they've often been able to agree that the American 
people should keep more of their own money. Presidents like John F. 
Kennedy and Ronald Reagan proposed and cut taxes with strong bipartisan 
support, and in each case, the economy prospered and grew.
    The tax cuts we passed in 2001 and 2003 have also helped the economy 
grow and prosper. Opponents of these tax cuts were wrong when they voted 
against them the first time. They've been wrong to oppose extension of 
tax relief in the face of overwhelming evidence that the tax cuts have 
helped grow the economy and create millions of new jobs.
    With this bill, we're sending the American people a clear message 
about our policy. We're going to continue to trust the American people 
with their own money. We'll continue to be wise with the people's money 
in Washington. We'll continue to work and to make sure the tax cuts are 
permanent. And the bill I sign today is a victory for the American 
taxpayers, and it's a strong lift for our economy. Congratulations on a 
job well done.
    It's now my honor to sign the Tax Increase Prevention and 
Reconciliation Act of 2005.

Note: The President spoke at 1:58 p.m. on the South Lawn at the White 
House. H.R. 4297, approved May 17, was assigned Public Law No. 109-222.