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For Immediate Release
Office of the Vice President
October 6, 2004

VP and Mrs. Cheney's Remarks and Q&A at a Coffee with Community Leaders in Gainesville, Florida
Gainesville Harley-Davidson & Buell
Gainesville, Florida

3:55 P.M. EDT

MRS. CHENEY: Now, Dick said that I got to start today, and that's just because I wanted to share some things with you. It was so much fun, that debate last night. I just -- it was just thrilling to watch. (Applause.)

And we had a great rally afterwards, and that was just so energizing, too. And what I've had fun doing today is reading some of the comments from pundits. And I thought I'd read -- some of those -- not all. But there are some really good ones here.

This is NBC's Tim Russert. He writes -- or he said last night: "I think Dick Cheney could audition for the lead role in the Apprentice if Donald Trump ever gets tired. (Laughter.) I'm sorry, Senator, you're fired. You just don't measure up." (Laughter.)

And here's another one I liked. This is Tom Brokaw: "Dick Cheney reminded me of George Foreman, kind of a slow gait, but a powerful right hand when he unleashed it." (Laughter.)

Here's Chris Matthews. He called the debate between Vice President Cheney and Senator Edwards a debate between "the howitzer and the water pistol." (Laughter and applause.)

Here's Don Imus -- those of you who listen or watch Don Imus know that he's gone to the dark side this year, but he says:

"I'm supporting Senator Edwards and Senator Kerry. That's who I intend to vote for. Edwards got killed." (Laughter.)

And this is my favorite and the last one. This is the Boston Herald's Mike Barnicle. "I am only surprised that at the end of the debate, at the end of 90 minutes, Dick Cheney did not turn to John Edwards and say, by the way, give me the car keys, too." (Laughter.)

So with that, ladies and gentlemen, the Vice President. (Applause.)

THE VICE PRESIDENT: Well, we want to thank all of you for being here today, and thank Gail for hosting this, and allowing us to use this beautiful Harley-Davidson dealership. It's really a remarkable success story. And we're delighted to have the opportunity to spend some time with all of you today.

What we usually do at these events is I make a few remarks, and then we open it up to questions so you have an opportunity to offer comments or advice, or ask questions about subjects you want to talk about, as well, too.

We might just quickly go around the table and you could identify what you do. I know we've got a lot of small business folks here and so forth, and then I'll be happy to offer a few comments. I'll try to keep mine fairly brief so we get a chance to ask some questions.

(Conversation inaudible.)

THE VICE PRESIDENT: Well, we're, I say, delighted to have the opportunity to spend some time with all of you today.

A couple of subjects that we might talk about today. If we think about the whole area of small business, obviously, I think at the heart of the distinction, if you will, between what the President wants to do, and I think what Senator Kerry believes in is that it's a philosophical difference in the sense that we believe very strongly that small businesses are in many respects the key to our economy, that seven out of 10 new jobs are created by small businesses, that the success of our recovery to date from the recession and the aftermath of 9/11 in no small part has been due to the great efforts of the entrepreneurial sector, if you will, and their workers.

There is a great temptation in Washington for people to sit there and think that nothing happens unless Washington ordains that it happen. And the President believes very deeply, as I do, that the greatness of America lies out here around the country, whether it's Gainesville, or my hometown of Casper, Wyoming, or Denver, Colorado, or Pittsburgh, Pennsylvania -- wherever it might be, and that it's the entrepreneurial spirit and really the genius of the American economy.

And we need to think about that in all that we do with respect to trying to promote economic growth. It's really a matter not so much of the government creating jobs, as the government creating circumstances in which it's possible for others to invest and take a certain amount of risk to create opportunities, and to create great businesses like this and the ones many of you represent here today.

To do that, we've got to get it right in terms of federal policy in a number of different areas. There's no one magic silver bullet that solves all problems, but there are several obviously that help. One is in the whole area of taxation. We think that it's important to remember that part of what has occurred with respect to the tax changes the President made and the tax cuts has been targeted specifically on making it possible for small businesses to invest and create additional opportunities -- whether we talk about quadrupling the amount that could be expensed, or cutting the top rate -- income tax rate, and remembering that some 900,000 small businesses around the country, in effect, pay that top individual rate. And the proposal that Senator Kerry has got to raise taxes on the upper brackets specifically would do serious damage to small businesses and again, start to strangle, if you will, the sector that's most important in terms of economic growth.

We also think that it's very important for us to deal with litigation reform. I had the experience the other day -- we visited an airplane manufacturer in northern Minnesota. Twenty years ago they didn't exist, a start-up company. Today, they're the second largest producer, manufacturer of single-engine, piston-driven aircraft in the country -- 900 employees. But because of the liability situation they're faced with, he thinks he could -- with the funds that would -- that he otherwise has to spend on liability insurance, he could hire an additional 200 people. And it's not that we're by any means opposed to our legal system because in many respects it functions very well, and there needs to be the opportunity for people who are aggrieved to find a place where they can go and get things set aright.

But we do have a situation where we've got a very significant litigation cost built into virtually all aspects of our economy -- if you look at our situation relative to many other countries, and we need to keep that in mind -- especially when we to keep that in mind, especially when we think about the future. And tort reform and ending frivolous lawsuits, moving in the direction of creating a just but nonetheless, less burdensome, if you will, legal system would go a long way towards helping and assisting.

Other areas we worry about -- the cost of health care. When you think about the uninsured in America, 60 percent of the uninsured either work for or own small businesses. And finding ways to assist our small business owners in terms of being able to provide or contribute to things like health benefits for their employees is an important issue that needs to be addressed, as well, too.

The proposal that the President has there would deal with the health savings accounts. Right now, of course, as part of the Medicare reform package, we got health savings accounts approved. People are able to set aside tax-free funds to pay out-of-pocket medical expenses. The next step is to allow them, as well, to deduct the premiums on a catastrophic insurance policy to make that deductible at the same time so it would be possible, for example, for small business owners to contribute a portion to help their employees through their health savings accounts meet some of their basic needs and requirements by way of purchasing a catastrophic policy to handle those kinds of illnesses and medical emergencies that can wipe out or destroy a family.

We want to move also with association health plans that allow small businesses to come together, pool their demands if you will, and achieve the same kind of savings that a large corporation can. We think that would go a long way toward reducing the costs overall of providing health benefits. So a series of issues like that we'll continue to address that we think are very important.

Our view of the way the Kerry-Edwards team approaches it is basically they are talking about raising taxes, and claim it's only going to be on the very upper crust. But if you look at their overall package, there isn't any way they can do what they say they want to do, for example, add about $2.5 trillion in new spending is the estimate, and simultaneously cut the deficit in half, unless you talk about significant, across-the-board tax increases. We think that's the wrong to go. We think that's exactly the wrong medicine at this stage in our economic recovery and would serve to place an added burden on the economy. And as I say, unfortunately when they're talking about upper income levels, you don't strike just the rich, you also do serious damage to the part of that engine that drives the American economy -- especially successful small businesses.

That will be part of the debate and part of what the American people wrestle with and will have to decide on November 2nd. We obviously are going to find, as well, too the debate of national security policy.

I won't dwell on that today. I'm happy to answer questions on it. We talked about it a lot last night. The President talked about it a lot last Thursday I guess it was. I bottom-line think that we're in one of those turning points in American history where we're setting the strategy and putting in place institutions that are going to, in effect, be the keys to our national security for perhaps 30 or 40 years to come. Just as at the end of World War II, we were faced with the Cold War and we had to create new institutions such as the Department of Defense, the Central Intelligence Agency. And we had to form new alliances -- the North Atlantic Treaty Organization and reorient our thinking in order to deal with the Soviet threat. And we did it successfully, supported it under Republican and Democratic administrations alike. And of course, 40 years later, the Soviet Union collapsed. The Cold War ended on terms favorable to the United States.

Now, with the global war on terror, faced with a different kind of threat, we need a different kind of strategy. And that's the one President Bush has put in place, and the idea both of working to harden our defenses here at home, but also recognizing we have to go on offense. It's not enough simply to stand up strong defenses here at home because you can't be 100 percent successful in that kind of effort.

With the threat being the possibility of terrorists ending up in the middle of one of our own cities with a deadly weapon -- perhaps a biological agent, or even a nuclear weapon -- and being able to threaten the lives of hundreds of thousands of Americans, it's very important that we also go on offense. We have to go after the terrorists wherever we find them, and we have to go after those who support terror, the state sponsors of terror who provide them with safe harbor or sanctuary, or weapons, or financial support. And that's what we've done both in Afghanistan and Iraq.

And having succeeded there in terms of capturing and killing large numbers of al Qaeda and taking down the regime of Saddam Hussein and the Taliban, we then have to complete the mission by taking the final step, which is to establish democratically elected governments in those two nations. And it's democracy that's going to be the ultimate safeguard to guarantee those nations don't revert back to being breeding grounds for terror, or for the development of those deadly technologies that terrorists might try to use against us.

And that's at the heart of the debate, is whether or not the country is going to embrace and endorse that strategy that the President has, I think, successfully pursued up until now, or whether we'll opt for the Kerry approach which, frankly, most people have trouble figuring out what it would be. He's been all over the lot in terms of what his views are with respect to the war on terror and operations, in particular, in Iraq.

They, as I said last night in the debate in Cleveland, there's a tendency on the part of -- at least John Edwards and I think John Kerry, as well, too, for a lot of tough talk about how they'll quote "crush the terrorists" but tough talk in a 90-minute debate doesn't obscure, or can't be allowed to obscure a 20-year record in the United States Senate where Senator Kerry has come down virtually on the wrong side of every major defense issue during his entire career in the United States Senate -- in terms of weapons systems, in terms of basic, fundamental approach to national security strategy.

The American people will make a choice on November 2nd. It's now a little over three weeks away -- but who's counting. (Laughter.) We're -- I think we're headed on the right course, both domestically and internationally. I think the President has got exactly the kinds of qualities we want to see in our Commander-in-Chief. And so we're obviously hopeful that the American people will ratify that approach and that he'll have the opportunity to continue to do what he's done so ably for the next four years.

With that, let me stop and I'll be happy to respond to questions on those or other subjects.

Q (Inaudible.)


Q The President spoke about our IRS system for the taxes -- do you think in the next four years, we'll see some type of a change?

THE VICE PRESIDENT: He feels very strongly about the need to try to put together a bipartisan effort to reform and simplify the tax code. One estimate I saw the other day that we spend something -- over 6 billion man-hours of effort, yes, man-hours of effort just trying to comply with the federal tax code. It's gotten so complicated and so complex, and that there are significant economic savings to the extent we can find a way to come up with a simpler, fairer code and generate the necessary revenue for the country. We don't have a specific answer in mind at this point -- a number of ideas floating around out there, but this is something that we think offers significant potential to all of us. I'm in the same boat as a great many other Americans. I probably couldn't fill out my own tax return. I don't have the time. And so you go get somebody else to do it for you, and it's a great industry -- for my accountant, and everybody else's accountant. But when you think about the way in which we do it, it does, in fact, represent a cost added on, layered on, if you will to our economy just as our tort system does. And there ought to be ways to do it more efficiently and more effectively and still do what has to be done by way of collecting sufficient revenues to finance essential government services.

Q (Inaudible.)

THE VICE PRESIDENT: We think it'll help for a couple of reasons. One, the -- if you look at several things we've done, one of the most important things is Medicare reform in this last Congress. For years we talked about it, and finally the President got it done, so that we now will cover a portion of prescription drug costs for seniors, 40 million seniors around the country. Why is that important? Well, I'm walking, living proof, you know, that there are ways to deal with coronary artery disease these days and go on to live a perfectly normal life.

The way we've dealt with it for years and the way Medicare has financed it is bypass surgery. But you cannot get through Medicare access to the prescription drugs -- the statins, for example -- that might help you avoid ever having to have major heart surgery. There is a case of a classic trade-off, where we've said that we can take advantage of modern technology, that ought to help make the provision of health care overall more efficient and also make some procedures unnecessary because there are other, better ways to do it.

We think health savings accounts help because they, in effect, put the patient directly in relationship where he's got a health savings account, he's contributed funds to it, maybe his employer has contributed to it, as well, to pay out of pocket expenses, rather than through a third-party payer. And we think people will be more effective consumers when they understand what it is they're purchasing. So the marketplace will begin to work. And we think that will be a place.

Getting medical liability reform is a major area, as well, too. One of the problems we've run into in my home state of Wyoming -- I think Florida is in the same state, at the last stop in Tallahassee, we received the endorsement of the Florida Medical Association. And the problem there is the way -- some states, and this is to some extent a state, as well as a federal issue -- the way the medical malpractice system now works, we've driven up malpractice rates so high that the cost is well, for one thing, driving a lot of docs out of business. I sat down the other day with a group of OB/GYN practitioners. They were to the point where one of them said now they were finding it necessary -- she was finding it necessary to screen patients and not take high-risk patients. So she was fearful that she would be sued if somebody got into trouble and that that would, in turn, put her in a position where her malpractice rates would go up and she'd be out of business.

What that means for the community is that a certain class of patients -- those who are high-risk -- aren't going to get the kind of care that they might otherwise. We also, of course, end up and we have doctors practicing defensive medicine, oftentimes ordering tests not so much because it's necessarily indicated that it needs to be done, as to avoid a situation in which they'd be vulnerable to lawsuit down the road if something goes wrong.

In my home state of Wyoming, we're to the point now we're a crisis state, as I mentioned same as Florida, we're holding -- had a special session of the legislature, we'll have an amendment on the ballot this fall because of the major malpractice insurance providers pull out, the cost of malpractice insurance for a general practitioner in my home town has gone from $40,000 a year to $100,000 a year in about a three-year period of time. We can't get new doctors to come in. It adds ultimately to the overall cost of providing health care.

There are ways to deal with it that's fair to everybody involved. Again, I want to emphasize you want to have a system that allows people who have legitimate grievances to pursue the redress of those grievances in court -- that's their right and they ought to have that opportunity. But we also need a system in which we get settlements that are fair and don't drive up the cost so much that you adversely affect the care that's available to others who aren't even directly involved in that transaction. California has done it fairly effectively. They've put a cap on non-economic damages and also a limit, a sliding scale limit on attorneys' fees. As the award goes up, the percentage that the attorneys take goes down. And there the effect has been very positive.

So there are ways to address these issues. We support medical liability reform that's gotten through the House of Representatives, it's been blocked in the Senate. Senator Kerry has voted no on it 10 times. John Edwards also is opposed to medical malpractice reform or medical liability reform in any way that we think would be effect. So those are some of the things that would help.

Q (Inaudible.)

THE VICE PRESIDENT: I'm not prepared today to advocate any one particular approach. The fact is the way we're organized today we've got a system that is very progressive, from the standpoint of placing most of the burden on folks of the upper level -- it doesn't get talked about very much. That's what we've done over the years; it's been generally supported.

The tax package that we got through last year, basically under the Bush administration, takes 5 million people at the lower end of the income level totally off the income tax rolls altogether, so they don't have any federal income tax liability.

If you look at the way the situation is set up, people in the bottom 80 percent have actually had their rate -- the total tax that they contribute go down as a result of the changes -- the tax changes we made. And people at the upper 20 percent have seen theirs go up as a result of the changes. It's partly because a lot of what we did was we reduced the marriage penalty, we doubled the child tax credit, we established a new 10 percent bracket for lower income individuals. All of those have been targeted at middle-income or lower income families. So it has not been a change just in the upper levels.

But I think that what we need to do, and what the President wants to do is say, sit down -- you'll have to do it on a bipartisan basis. It's the kind of thing that you can never do unilaterally, just one party. It needs to be done on a bipartisan basis and there are a lot of ideas out there that need to be considered. You've got to pull together a group of folks and begin the process. It's been a long time -- I guess 1986 was the last time we had a serious effort at tax reform, during Reagan's --

Q (Inaudible.)

THE VICE PRESIDENT: I haven't -- I haven't come across that. I'm unaware of any proposal; there may be one kicking around in the Ways and Means Committee -- they've had just about every idea imaginable you could find up there in Ways and Means. It is an interesting problem.

Q (Inaudible.)

THE VICE PRESIDENT: On the death tax, we think it's fundamentally unfair. People work throughout their lives to build a business or to build a farm or ranch, they pay taxes on that as they go along. And then when they pass on they get taxed again, the estate gets taxed again. And we just think that's fundamentally wrong, that's double taxation that we don't think is right.

We got it repealed in the tax bill we passed in '01. It phases down over time and goes away, as I recall, in about 2011.

Q (Inaudible.)

THE VICE PRESIDENT: Right. And the reason for that phase out is because under the Senate rules, the way we passed it, we had to use -- we didn't have 60 votes, we had to use, it's called reconciliation under the budget rules. And under reconciliation, everything after 10 years automatically reverts back to what it was when you started, unless you extend it. And so we need to get it extended. That's part of making the Bush tax cut permanent. But we're heading in the right direction. And as I say, we're going to be on the downward path at least now and for the next seven years.

On energy, we agree it's absolutely crucial, a building block for our society, our economy. You can't heat and cool your homes, or have a transportation system or run a business, any of the things that need to be done, without adequate supplies of affordable energy. And we're in a situation today where the world demand, especially for oil, has pretty rapidly outstripped supply. We've gotten to a point where we consume over 80 million barrels a day now worldwide, about 20 million barrels of that here in the U.S. And the producers are running pretty much flat out. So you get a blip in the production -- hurricanes come through the Gulf, you have to shut down the offshore platforms, the workers have to come ashore -- but we're now running below normal levels with respect to Gulf production. And that, in turn, obviously affects that overall balance. You get unrest in Nigeria, and the Delta region over there, and that adversely affects the supply.

And so it's an area where we need to do everything we can to reduce our dependence on foreign sources, but it's a long-term prospect. We put up an energy plan. It had 106 specific recommendations; a lot of those we implemented administratively. But we need legislative approval for a chunk of it, that would emphasize, among other things, conservation, new technology, investment in things like hydrogen fuel cells and technology, and so forth -- but there are longer-term solutions. Natural gas is a big problem. Prices have gone up there pretty dramatically. We got a lot of natural gas on the north slope of Alaska that's produced in conjunction with the gas -- or the oil production up there on the north slope. And we re-inject it right back into the ground, because we don't have anything we can do with it. We need a pipeline, a gas pipeline, that runs from Alaska down to the lower 48, and incentives to build such a pipeline are in that energy bill.

There are a number of things in there that are valuable. Again, we got it through the House. It's plugged up in the Senate. It's been filibustered in the Senate, and that's one of those that came up two votes short, and Senators Kerry and Edwards weren't there when it came to a vote. They're opposed to it anyway, I think. But we'll keep pushing on that so we can get a decent energy bill through.

We will continue to have to deal with the fact that we're dependent on foreign sources, and that means we're going to be subjected to the vicissitudes of the international marketplace in terms of the price of oil, in particular. And we need to do everything we can to be more efficient and, at the same time, produce more and find alternatives.

On trade, we have moved aggressively on trade because we think it's important that the United States have access to all those international markets -- agriculture, in particular. I think every third acre in production in America is for the export market. So it's important for us to have access to the foreign markets, and that means we've got to have trading arrangements. I think China is now the leading export market, I think, for soybeans and something else. I can't remember exactly what it is now. We've had a 140 percent increase in one year in our agricultural exports to China. So trade is crucial to our economy.

We've got some 12 million Americans whose jobs are directly dependent on the export market. So negotiating these trade agreements is crucial. But, of course, you've got to make certain that you do it on a fair and equitable basis. You can't trade off one sector of the economy for another. And agriculture has been especially troublesome for years because it is so complex. It is so crucial, and a central sector of every economy in the world. The Europeans have got their approach. It has made them very reluctant to enter into any kind of a trading agreement that affects their European agricultural policy, as well, over there.

What we've done -- we've negotiated, I believe, a total of 12 bilateral free-trade agreements over the course of the last three years. We've got 10 more in the works. That will give us access to a market -- a combined market of about $2.5 trillion, would make it the third largest export market in the United States, that combination of 22 countries.

The most recent one -- the one you're probably talking about is CAFTA, the trade agreement that's up now. It has been negotiated. It's pending before the Congress. We think it's a good package. It gives us pretty much wide open access to those markets in Central America. The big issue has been sugar, in terms of our producers here at home. But we believe that if you look at the Agriculture Act, the domestic program doesn't kick in until we get to about 1.4 million tons imports, and we're at about 1.1 million now -- have been consistently in the past. And there's about a 300,000-ton cushion there that we think will more than cover what we'll get from Central America. So we think we can manage that. The Agriculture Department is watching it very carefully. They're confident, I say, that we've already got built into the system slack so that the domestic sugar program won't kick in with respect to the agreement that we've negotiated with the Central American countries. But, obviously, it bears watching.

One immigrant workers, the guest worker program has worked in the past. There have been guest worker programs off and on over the years. I know out West, California and so forth, we used to have a fairly successful program there. The President originally started talking with President Fox of Mexico about trying to improve that situation. He's obviously eager to have people come to work in the United States. From our perspective, you're right it was complicated by 9/11 because all of a sudden the priority has been placed on making certain that we don't have terrorists coming into the United States, and so the major emphasis is then on tightening up on the flow of people back and forth across the border. That's taken priority over the question of having a guest worker program.

But the President has also talked about that, about the possibility of setting up a system in which we would have people who have an identifiable job, a job that an American won't take, regularize the flow, in effect, come in under some sort of an arrangement where they would work for a period of time and then go back home. We'd know where they were when they were here. We'd know what they were doing. We'd know when they left. They'd fill an important need in terms of providing important labor and they'd take jobs that Americans don't want. But the concept at this stage hasn't gone anywhere legislatively yet.

MODERATOR: Ladies and gentlemen, the Vice President and Mrs. Cheney are running on a very tight schedule. And we would like to take this opportunity again to thank you for being here this afternoon. And if you wish to make any closing comments. But on the flip side, we want to also say, thank you very much for the rapid response of FEMA, and what the President and you have been involved in, in coming down and helping us getting back up and running -- businesses like this so that we can continue on producing dollars into the economy. And again, I say you may have to leave, and again, thank you very much.

THE VICE PRESIDENT: Thank you, Larry. And I also want to say that the rest of the country has watched with great interest the way everybody here in Florida has responded to what has to have been an unbelievable series of events. I know just from my own schedule, we kept trying to get into Florida -- schedule events in connection with the campaign this year, and every time, we'd get ready to come, another hurricane would come through. So it has been an unbelievable series of crises that Floridians have had to deal with, but you've dealt with it with great courage and determination. The entire nation watched, of course. Every time I'd turn on the tube, there would be Governor Bush in the middle of another hurricane. And so we're glad that you've stood as well as you have. The President is committed to doing everything he can to make certain that we get everybody back up on their feet quickly. We've now asked Congress for a total of $13 billion in supplemental appropriations. A lot of that has come to Florida. He's put in an additional request just yesterday, and hopefully we'll get that -- get it out shortly. But we think, in fact, you folks have done a great job down here. And we want to note that, and say

that we wish you very well, and know you'll be back on your feet very quickly.

Thank you very much. (Applause.)

END 3:36 P.M. EDT

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