Closing Remarks to the
White House Economy Conference
December 16, 2004
Thank you all. Please
be seated. (Applause.) Thank you all very much. Go ahead
and sit down. First, thank you all for participating in
this important series of seminars and speeches. I really
thank you for sharing your time during what is a busy season.
I particularly want to thank those who served on our panels
for speaking clearly and helping people understand some
of the issues that face our country. You know, it may be
just that the panel on tax and regulatory burden could
become the beloved holiday tradition here in Washington.
I really appreciate the different backgrounds
of the people who spoke. We had your entrepreneur, we had
your academic, we had your corporate leader, we just had
plain old citizens show up. And I really want to thank
-- the panels I participated in I thought were great.
It seems like to me there's some common themes that came
through the discussions. First, our economy has come through
a lot and it's growing. And people realize that, and that's
positive. And there's a reason why people say it's growing,
besides me, and that's because the facts say it's growing.
I mean, we're growing at a pretty healthy rate of 4 percent
over the last year. New jobs are being added. The manufacturing
sector appears to be stronger. After all, they added 86,000
new jobs since January. Housing ownership and housing starts
are still very robust and strong. Interest rates and mortgage
rates are low. And there's the ingredients for growth available.
And what I also heard was that the good news shouldn't
make us complacent. And I'm certainly not. The -- one,
I understand there's some areas of our country which are
still struggling. I saw that firsthand during this past
90 days of active travel. There are some challenges, as
well, that we heard about that we better get after and
address -- now, before it's too late. And I intend to work
with members of the Congress and members here in this audience
in the beginning of a new term to address the problems.
And here's how I see some of the problems. One, we need
to update our tax code. It needs to be easier to understand
and more simple. We need to make sure our health care system
meets the needs of tomorrow. It's got to be flexible in
its application. Consumers have got to have more say in
the market. We need to reform our legal systems so the
people, on the one hand, can get justice; on the other
hand, the justice system doesn't affect the flows of capital.
Members of both parties are going to have to get together
to work on this. This is not -- this not one of these series
of issues that require a -- one-half of the body to participate.
These issues are big enough for all of us -- need to work
together. These are compelling national issues that require
a national response.
I will work hard as the President to get rid
of zero-sum politics in Washington that says, old George
does fine if this passes, and my party doesn't. We got
to get rid of that. It's got to be that we all take risk
and share risk and share in the rewards, so that this notion
about one party benefits over the other if we happen to
do something positive for our nation no longer is the pervasive
psychology here in Washington, D.C. (Applause.)
And I will remind people here in Washington that now is
the time to confront problems. It's so much easier in politics
and in policy to pass big problems on to future generations.
That's an easy pass. I -- but I didn't come up here to
Washington -- I know a lot of people I my Cabinet didn't
agree to serve to pass problems on. I like to confront
problems. I like to -- I like to work with people so that
we can say we left behind a better America, after it's
all said and done. And I don't have that much time here
in Washington. So I'm going to -- (applause.) So I'm ready
to work. And I want to thank you all for helping us highlight
the issues that we have to work on.
I want to thank the members of my Cabinet. I'm so pleased
to be working on these problems with a fine Secretary of
Treasury, John Snow. (Applause.) You still have a PhD,
right? (Laughter.) In spite of that, I'm confident we can
get a lot done here in Washington. (Laughter.)
I want to thank my friend, Donny Evans, who served so
admirably here in four years. I'm going to miss him when
he goes back to Texas. (Applause.) I appreciate Elaine
Chao's service as the Secretary of Labor, and I'm pleased
she'll be with this administration to work on this issue.
(Applause.) Joshua Bolten, member of my Cabinet, head of
the OMB, thanks for being here, Josh. Thanks for your good
work. (Applause.) And finally, the Director of my National
Economic Council, Steve Friedman, has done a fabulous job.
He has decided to go back into the private sector, for
which I am a little hostile. (Laughter.) But I appreciate
your service, friend. (Applause.) Good job.
One of the tests of leadership at all levels of government
is to confront problems before they become a crisis. And
we've heard about some of the problems. Let me refresh
your memories about the problems we have discussed. First,
we've heard a lot about the growing burden of lawsuits.
We have a litigious society. And it is a problem that is
clear and a problem that we will confront.
According to a recent study, frivolous litigation has
helped drive the total cost of America's tort system to
more than $230 billion a year. That's a lot of lawsuits.
The figure is more than twice the amount Americans spent
on automobiles in 2002. A study published this summer showed
that tort liability costs for many small businesses run
at about $150,000 a year. That is a significant burden
for a small business to bear. We believe, and many of you
have -- believe that that money can be better spent; that
it's possible to have a justice system that is fair and
balanced; that if you have a claim, you should be able
to go to an uncluttered court to have your claim adjudicated.
Tort costs in America are far higher than any other major
industrialized nation. That is bad news for America. It
means that other nations are able to have a judicial system
that is fair and balanced, and we're not. It puts us at
a competitive disadvantage. And in a world that is more
closely knit, America and American workers can not afford
to be at a competitive disadvantage. (Applause.)
And lawsuits can just plain ruin somebody's life. Donnie
headed a seminar yesterday, and I happened to be there,
and we heard the story of Hilda Bankston -- I think Hilda
is probably still here. There you go. First of all, Hilda
was born in Nicaragua -- is that right?
MRS. BANKSTON: Guatemala.
THE PRESIDENT: Guatemala -- see, I wasn't paying very
close attention. (Laughter.) Maybe I'll get the rest of
the story right here. (Laughter.) It's okay to correct
the President -- just not in front of all the TV cameras.
(Laughter and applause.)
She and her husband, Mitchell, owned a drugstore in Fayette,
Mississippi. I've never been to Fayette; I suspect it's
one of those classic town squares in a southern city where
the pharmacist is an integral part of the community. People
come and go, people probably like to hang out get the latest
gossip and all that -- talk about the high school football
The store got swept up in massive litigation just because
it dispensed prescriptions -- certain prescriptions. Small
pharmacy, main square, Fayette, Mississippi, and a class-action
lawsuit sucks them into the -- into the legal system. She
sold the pharmacy five years ago. She has spent countless
hours being drug into the court system.
Here's what she said. She said, "My husband and I
lived the American Dream until we were caught up in what
has become an American legal nightmare." She went
on to say, "I'm not a lawyer, but, to me, something
is wrong with our legal system when innocent bystanders
are little more than pawns for lawyers seeking to strike
it rich." (Applause.)
All Hilda asked for is a fair system, and the system right
now isn't fair in this case. And we've got to do something
about it. We've got to do something about it to make sure
we're competitive; we've got to do something about it to
make sure that there's not excessive cost; and we've got
to do something about it to make sure people like Hilda
don't get hurt by a system that was designed to protect
people, not hurt people.
The people in Congress must know that excess litigation
is not only a drag on our economy, but is a constant source
of fear and uncertainty -- creates fear and uncertainty
for people in the business community. To keep the economy
growing strong in the future, we have got to lift the burden,
and reform our legal systems. The nation needs class-action
lawsuit reform. (Applause.) The nation needs to have asbestos
legal reform. And this nation needs medical liability reform.
(Applause.) I'm looking forward to working with Congress
to get legal reform done quickly in the upcoming legislative
We also heard about the rising cost of health care which
restricts access for our families and it makes it harder
for employers to cover their workers. This problem is clear,
and it will be confronted.
More than half of the uninsured Americans work for small
businesses. Small business owners know their employers
well, and the ones I've talked to understand they have
an obligation and a duty to help take care of them, but
there's -- sometimes they're just not able to do so, particularly
in the society in which we live today. After all, health
care premiums have risen by 83 percent per employee over
the last decade.
I just mentioned medical liability reform. There is no
doubt in my mind, by passing real, substantive medical
liability reform, it will help control the rising costs
of health care. (Applause.)
I believe small businesses should be allowed to join together
to pool risk so they can negotiate for health care contracts
just like big companies are able to do. (Applause.) And
I'm pleased to report that we're -- health savings accounts
are beginning to work their way through our markets. After
all, I just signed up for one two days ago. (Applause.)
When it makes it to my level, you know it's going to be
widespread these days. (Laughter.) HSAs are making a difference.
Chris Krupinski owns an art and design studio in Fairfax.
I talked to her last night. She's pretty enthusiastic about
HSAs. If you didn't hear her talk, you should have. First
of all, she is a -- she went to insurance agent after insurance
agent after insurance agent trying to find something she
could afford, and eventually, she was paying $900 a month
for insurance for she and her family. Then she heard about
health savings accounts, innovative ways for people to
cover catastrophic care for their family, at the same time
manage the cash flow needs -- their own cash flow needs
so they can provide primary care, as well. Now she pays
$340 a month for a high-deductible plan, and she puts $290
a month into her HSA -- puts her own money in, money that
will earn interest tax-free, money she can take out tax-free,
money that's her own money, and she's saving money for
her family at the same time. In other words, this innovative
plan enables her to control her own destiny when it comes
to health care, and at the same time, provides her comfort
in knowing that if there is a catastrophe, the health insurance
will cover it for she and her family. She's paying less
overall, she chooses her own doctor, she saves her own
money, and she makes the health care decisions.
Fast-rising medical costs are a drag on this economy,
and so there's some things we need to do together. One
is expand health savings accounts. Two, promote association
health care plans. Congress needs to allow small businesses
to pool risk. Three, pass medical liability reform. Four,
continue to expand information technology throughout the
health care system. Five, move generic drugs faster to
the market. In all we do, in all we do to reform health
care, we've got to make sure the decisions are made by
doctors and patients, not by bureaucrats in our nation's
A lot of talk in this conference about the tax code and
federal regulations, and the fact that regulations and
the tax code cost billions of dollars a year. In the campaign,
in the course of the campaign, I said to people, the tax
code is a complicated mess. Most people understood what
I was talking about. Americans spend about six billion
hours a year in filling out their tax returns -- or at
least trying to fill them out. (Laughter.) The short form
takes more than 11 hours to prepare. That's about the same
amount of time it took to fill out the long form 10 years
In the last four years, we passed major tax relief, and
some of it is getting ready to expire. Take, for example,
the death tax. It's getting ready to -- the relief is getting
ready to expire. In other words, the tax -- death tax is
-- in 2011 is going to come back into being. Frankly, it's
going to make estate planning awfully interesting in the
year 2010. (Laughter.) I want you to know that the death
tax takes up more than 300 pages of laws and regulations
in the current tax code. By getting rid of the death tax
forever, we have simplified the code by 300 pages. (Applause.)
And not only that, I think it's good public policy. And
so does Craig Lang. I met him before. He's a dairy farmer
from Brooklyn, Iowa. His family farm has been in the family
since 1860. That's when his great, great grandfather arrived
in Iowa. I wonder if he arrived from Brooklyn, New York.
That would have been interesting, wouldn't it? (Laughter.)
Kind of the, life goes full cycle thing. Anyway, Craig
wants his children, of course, to inherit the farm. When
we talk about the family farm, one way to make sure the
family farm remains a family farm is that family members
run the farm after the current generation moves on. He
now, in order to deal with the death tax -- which I hope
expires forever -- is now working with a lawyer, a CPA,
and an insurance agent, just so he can structure things
correctly to keep the farm in his own family.
Here's what he said. He said, "We pay property taxes,
we pay income taxes, and we pay sales taxes every year.
It's simply not fair to be taxed again for creating wealth." I
think Craig has got a lot of dairy farmer wisdom. (Laughter
and applause.) I believe, in order to keep this economy
growing, in order to send the right message to people who
are willing to risk capital, all the tax relief we passed
must be made permanent. (Applause.) And that includes the
repeal of the death tax.
But I also understand that in order to deal with budget
deficits, which we discussed the morning -- this morning,
we need to be tough when it comes to federal spending.
I look forward to working with Josh. Josh's job is to develop
a budget that meets priorities and shows fiscal restraint.
We believe it's possible to do so. As a matter of fact,
we not only believe it's possible, we believe it is necessary
to do so. It is important for our fellow citizens to know
we're willing to prioritize. It's important for the markets
to see that we've got enough discipline in Washington,
D.C. to make hard decisions with the people's money.
I look forward to finishing our budget deliberations inside
the White House. Upon completion, Josh will be sharing
the news with the members of Congress and the public. You
will see fiscal discipline exercised inside the Oval Office
this coming budget cycle. (Applause.)
We understand the effects of paperwork on our administration.
Again, Josh is in charge of making sure that this administration
culls out, as best as possible, unnecessary regulation.
I used to tease people when I was campaigning. We had
these small business forums -- I see one of our participants
over here -- and I would say that, I know you fill out
paperwork, but what I don't know is whether anybody ever
reads it in Washington. (Laughter.) So one thing for certain
is we've got to make sure that the paperwork which is never
read is eliminated to the best extent possible, so our
small businesses, in particular, and big businesses are
able to focus their energies and their time and their capital
on job creation.
I'm going to appoint a citizens' panel to study the tax
code and recommend simplification proposals. Secretary
Snow will be charged with that effort. The members of the
panel will, of course, include tax experts. It will also
have people who aren't experts -- well, they're experts;
they'll be experts in paying tax. (Laughter and applause.)
The idea is take a look at what's possible, what is necessary,
and work with Congress to get something done to simplify
the tax code. Now is the time to take on this important
In the conference, we heard much about the problems in
the education system, which is not fully preparing our
citizens for the jobs of the future. There is no doubt
in my mind that if we expect to remain competitive in the
world, we must educate every child. (Applause.)
Here is a startling statistic. Most new jobs in America
are filled by people with at least two years of college.
That's startling. What makes it even more startling is
the fact that only one in four of our students gets there.
That's a learning gap that must be closed. Twenty-five
of the 30 fastest growing jobs in America require an education
beyond high school. The median salary for someone with
college experience is 69 percent greater than for someone
who never attended college. That's a pretty good selling
point, to say to somebody, we want you to go to college.
Kay Haycock described the challenge -- Kati Haycock described
the challenge this way here at this forum. She said, "There
are a huge number of American kids who are doing all the
things they're supposed to do in high school and don't
come close to having the skills and knowledge they need
We started to change the system here in Washington with
the No Child Left Behind Act. I understand that it's created
some consternation. And it's created consternation because,
in return for increased federal spending, we finally started
asking the question, can you read and write and add and
subtract? It's never seemed to me -- (applause.) For some,
that's called an unfunded mandate. To me, that's called
a necessary mandate -- to make sure our children can learn.
All people understand the importance of accountability
are people who need to meet a bottom line, are people who
are held accountable for signing up more accounts. Accountability
is, in my judgment, crucial to making sure no child is
left behind. How can you determine whether or not the curriculum,
the reading curriculum you are using is working if you
don't measure? How do you know whether or not the teacher
training is working if you cannot measure to determine
whether or not the pupils of a particular teacher are able
to meet certain standards? How do you know how your school
is doing relative to the school next door to you? How do
you know how your state is doing relative to the state
next door to you? How do you know how your children are
doing relative to the world? You don't, unless you measure.
Secondly, measuring allows you to correct problems early.
And so what we have done here in Washington, D.C. is we
have said, in return for extra federal money, we are going
to insist that you measure. Notice I didn't say there would
be a federal test. That removes accountability away from
those who are responsible for educating. It says, you develop
a test. You develop accountability standards. We'll norm
it around the country in a reasonable way without undermining
local authority. But we want to know. We want to know.
And where there's success, we'll help you heap praise upon
those who deserve success. But where there's failure, we
will collectively blow the whistle so that we start getting
There is nothing worse than a school system, and I --
you know, I was a governor at one time, and I remember
excuse-laden school systems. And I remember people going,
oh, my goodness, all of a sudden we're graduating children
who can't read. And so we decided to do something about
it, and that is get it done early, before it's too late.
The No Child Left Behind Act is going to make a significant
difference, so long as Congress doesn't try to water it
And now we need to bring high standards and accountability
to our high schools. And we got to make sure our job training
programs are working, that the job training programs actually
train people for what job -- for the jobs that exist, which
means consolidation and flexibility.
I'm a big believer in the community college system in
America. I think community colleges can help us address
the needs and fill the achievement gap. I know community
colleges are market-oriented places of higher education.
They're affordable, they're accessible, and they're able
to adjust to the demands of the local economy.
Some of the most hopeful moments I've had as President
have gone into communities and have seen the curriculum
of a community college that has been adjusted to the demands
of the local employer base, so that if jobs were lost,
for example, in the North Carolina textile industry, there
was an active, viable, vibrant community college system
able to train workers to become nurses in the health care
industry that was creating enormous amounts of jobs. The
community college system and higher education, itself,
must become -- every young person must access our community
college system and be prepared to do so -- or higher education,
in order for our economy to remain competitive as we head
into the 21st century.
Social Security reform, entitlement reform is an important
topic we discussed today. You know, there's a -- we talk
about the deficit, and there is a short-term deficit here
in Washington, which we're going to close in half over
a five-year period of time. But there is a long-term deficit,
as well. And that long-term deficit really is the unfunded
liabilities of the entitlement programs which make up roughly
two-thirds of the United States budget.
One of the things that we heard today from experts is
that the Social Security system is safe today, but is in
serious danger as we head down the road of the 21st century.
And this problem has got to be confronted now. And we heard
from people that know what they're talking about on this
stage this morning, saying that it is a far easier problem
to manage today than it will be if we continue postponing
In 1950, there were 16 workers paying for every beneficiary.
Today, there are about three, and when the younger workers
retire, there will be only two workers per beneficiary.
That should be a warning signal for those of us who are
charged with having to confront problems and not pass them
on to future Congresses or future generations. The system
becomes untenable within a relatively quick period of time.
The Social Security system is in the black today, but in
the long-term, has $10.4 trillion in unfunded liability
-- that's trillion with a "T." That means that
a 20-year-old worker today is being promised retirement
benefits that are 30 percent higher than the system can
pay. By the year 2018, Social Security will pay out more
in benefits than the government collects in payroll taxes.
And once that line into red has been crossed, the shortfalls
will grow larger with each passing year. We have a problem.
Now, some will say, well, that's 2018, I'm not going to
be around. But I don't think that's what a good public
servant thinks -- should think. I think somebody who is
charged with responsibly representing the people must look
at the data that I just described and say, now is the time
to work together to confront the problem. I understand
how government works. Congressman Penny was talking about
the last time we dealt with the Social Security issue in
a real earnest way was when there was a crisis.
A lot of government, if the truth be known, is crisis-oriented
management. You know, we wait and wait and wait, and then
the crisis is upon us and everybody demands a solution.
The problem with that when it comes to a modernization
of Social Security is, is that the longer we wait, the
more expensive the solution becomes. And so one of my jobs,
one of my charges is to explain to Congress as clearly
as I can, the crisis is now. You may not feel it, your
constituents may not be overwhelming you with letters demanding
a fix now, but the crisis is now. And so why don't we work
together to do so. I will also assure members of Congress
that this is an issue on which I campaigned, and I'm still
standing. In other words, it's a -- (applause.)
If anybody is interested in the politics of Social Security,
here's my view. First of all, what has made Social Security
a difficult issue to discuss is that many times when you
discuss it, a flyer would follow your discussion telling
certain people in our society, generally those who have
been on Social Security, that they're not going to get
their check. I mean, that is fairly typical politics in
the past. It really has been. And so people were afraid
to address the issue, and I can understand why. If you
talk about reforming Social Security, modernizing Social
Security, you would get clobbered politically for it. But
that dynamic began to shift recently -- recently being,
I think the 2000 election. President Clinton, after the
'96 election, had a lot of very important panels on the
subject. He began to lay the groundwork for substantive
real change. He felt comfortable discussing it. I felt
comfortable campaigning on it in two elections. I'll tell
you why -- because once you assure the seniors
I did talk about some principles during the course of
the campaign. One was, nothing will change if you're retired
or near retirement. Two, I do not believe we should raise
payroll taxes to try to fix the system. Three, I do believe
younger workers ought to be allowed to take some of their
own money, some of their own payroll taxes, and on a voluntary
basis, set up a personal savings account, an account that
will earn -- (applause) -- an account that they manage;
an account that earns a better rate of return than the
current -- that their money earns inside the current Social
Security trust; an account that they can pass on from one
generation to the next, in other words, it's your asset;
and an account the government can't take away.
I am -- one of my strong beliefs is that all public policy,
to the extent possible, ought to encourage ownership in
America. I believe in owning things. (Applause.) I think
it will be healthy for our system to own and manage their
own retirement account. It will cause them to have a vital
stake in public policy. People will ask more questions
about fiscal responsibility than ever before. People will
want to watch carefully decisions made by government at
all levels if they have a vital stake in watching their
I will also say again, like we said this morning, that
people are not going to be allowed to take their own money
for their retirement account and take it to Vegas to shoot
dice. (Laughter.) This is going to be a managed account,
similar to the thrift savings plans that we federal employees
have available to us now.
These challenges I've just discussed are important challenges.
They are big agenda items. But they should be. I mean,
why think little when it comes to making sure America is
still the center of excellence in the world? (Applause.)
Great economies do not get weak all at once. They're kind
of eaten away, you know, year by year, by challenges that
people just refuse to meet. Slowly but surely, an economy,
a great economy can be eroded to the point of mediocrity.
This nation must never settle for mediocrity. This nation
must always, always strive for the best and leave behind
a better America for our children and our grandchildren.
And so we've got to confront the problems I just talked
about. And I want to thank you all for coming to highlight
the problems. I assure you that I understand that success
in dealing with these problems will require strong cooperation
in Washington, that I have a responsibility to reach out
to members of both political parties and I will meet that
responsibility. I look forward to working with you all
to help make clear that not only are the problems existing,
but there's reasonable solutions to solve them.
In all we do, we've got to make sure the American economy
is flexible. One of the reasons why we're a great place
in the world for people to do business and realize their
dreams is because we have a flexible economy. We've got
to make sure that we're always a competitive economy, we're
willing to accept competition and take competition on.
I happen to believe competition makes this a better world
rather than a worse world.
We've always got to stay on the leading edge of innovation.
There's always got to be a proper role between government
and the economy. The role of government is not to create
wealth; the role of government is to create an environment
in which the entrepreneurial spirit is strong and vibrant.
And as I said this morning, when we meet these challenges,
we can say to ourselves, and perhaps other generations
will eventually say about us, well done. You did the job
you're supposed to do.
Thank you for helping us do our job. God bless. Thank
you all. (Applause.)
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