For Immediate Release Office of the Press Secretary December 15, 2004
Fact Sheet: Securing Our Economic Future
Today’s Presidential Action
Beginning today in Washington, D.C., the President will host a White House Conference on the Economy to discuss the economic challenges we face in the future and the steps we must take to ensure our economy will continue to grow, create jobs, and meet the needs of American workers in a changing world. The two-day conference will bring together economic experts, entrepreneurs, and workers to discuss key economic issues, such as tax and regulatory burdens, the impact of lawsuit abuse, the high costs of health care, the fiscal challenges we face short and long-term, and the importance of preparing American workers for the jobs of the 21st Century.
Our Nation is on track for sustained economic growth because of the resilience and determination of the American people and the pro-growth policies of this Administration. However, the President will not be satisfied until every American who wants to work can find a job and all Americans have economic security. During the campaign, the President laid out a plan to keep our economy growing and extend prosperity to every corner of America.
The President believes a changing world can be a time of great opportunity for all Americans to earn a better living, have a rewarding career, and enjoy a fulfilling life. In these times of change, government must take the side of working families. Many of our most fundamental systems – the tax code, our health care system, worker training programs, and retirement plans – were created for the world of yesterday, not tomorrow. We must transform these systems so all Americans are equipped and prepared to realize the American Dream.
The State of Our Economy
The state of our economy is strong. The President’s policies are creating jobs and continuing to strengthen the economy. Yet there is still more work to do, and that is why he will continue to push for pro-growth policies.
America has the fastest-growing economy of any major industrialized nation in the world.
The economy has posted steady job gains for each of the last fifteen months – creating over 2.4 million jobs since August 2003.
The unemployment rate dropped from a peak of 6.3% last June to 5.4% today—below the average unemployment rate of the 1970s, 1980s, and 1990s.
After-tax income is up by over 10% since the end of 2000, and household wealth is at an all-time high.
Inflation, interest rates, and mortgage rates remain at low levels.
Homeownership rates are at record highs.
The stock market has grown rapidly since the beginning of 2003, with the Dow Jones Industrial Average up 25% and the NASDAQ up 56%.
Tax and Regulatory Burdens
America has a growing, dynamic, and changing economy – but the economy remains handicapped by unnecessary tax and regulatory burdens. The current tax code is a maze of special-interest loopholes that causes America’s taxpayers to spend more than six billion hours every year on paperwork and other headaches. President Bush believes that America’s taxpayers deserve, and our future economic prosperity demands, a simpler, fairer, pro-growth system. Taxes should be applied fairly, and reform should recognize the importance of homeownership and charity in our American society. The President will create a bipartisan panel to advise the Secretary of the Treasury on options to reform the tax code.
The President has made tax relief permanence a top priority. All the tax relief enacted over the past three years, including the tax relief benefiting America’s small businesses, is scheduled to expire over the next several years. This tax relief must be made permanent. Raising taxes on families and small businesses will hurt economic growth and job creation.
Excessive regulations can prevent the creation and growth of new small businesses and the jobs they create. The President wants to streamline regulations and reduce paperwork to alleviate the burdens that unduly handicap America’s entrepreneurs and job creators. Since the President took office, the Administration has slowed the growth of burdensome new rules by 75 percent, while still moving forward with crucial safeguards for homeland security, human health, and environmental protection.
The High Costs of Lawsuit Abuse
The costs of litigation per person in the United States are far higher than in any other major industrialized nation in the world. Lawsuit costs have risen substantially over the past several decades, and a significant part of the costs go to paying lawyers' fees and transaction costs – not to the injured parties. The litigation explosion is clogging America’s civil courts and threatening jobs across America. Litigation costs small businesses, on average, about $150,000 per year.
The President is pushing Congress to pass legislation that reduces the burden of frivolous lawsuits on our economy. The President supports enactment of medical liability reform, class action lawsuit reforms, and asbestos litigation reform to expedite resolutions and curb the costs of lawsuits for all Americans.
Frivolous lawsuits and excessive jury awards are driving many health care providers out of communities and forcing doctors to practice defensive medicine. This reduces access to medically necessary services and raises the costs of health care for all. The President has proposed proven reforms, such as common-sense limits on non-economic damages, to make the medical liability system more fair, predictable, and timely.
The President’s proposed class action reforms seek to limit the abuse of large, nationwide class action cases and return justice to the truly injured parties. Class actions are an important and intrinsic part of the U.S. legal system. However, class actions are heavily abused, which in turn harms affected parties and undermines the American judicial system. In particular, injured parties often receive awards of little or no value while lawyers receive large fees. The proposed class action reform legislation recognizes that large interstate class actions deserve Federal court access because they typically affect more citizens, involve more money, and implicate more interstate commerce issues than any other type of lawsuit. These reforms do not alter the right of a plaintiff to bring a legitimate claim, or change controlling substantive law, but provide additional protection and information to class members.
Asbestos is the longest-running mass tort litigation in U.S. history, and has led to the bankruptcies of at least 74 companies and to more than 50,000 lost jobs. Within the past few years, there have been sharp increases in the number of asbestos claims filed annually. The current system is costly to administer (future transaction costs are estimated at between $145 and $210 billion), will impose indirect costs on the economy, has driven exposed defendants into bankruptcy, and may leave little or no funds to pay future asbestos victims. The President has stressed the need for reform and commended Congress for aggressively working on this problem, but more work needs to be done to find a fair and permanent solution.
Making Healthcare More Affordable
President Bush believes all Americans should have access to affordable, high-quality health care. Rising health care costs impose a burden on families and small businesses and put coverage out of the reach of many Americans. Many businesses – particularly small firms – are struggling with these rising costs. According to the Census Bureau, 45 million people lack health insurance coverage, including 8.4 million children.
The President has proposed a comprehensive, consumer-driven plan to address the problems of rising health care costs and uninsurance. His plan includes Health Savings Accounts (HSAs), Association Health Plans (AHPs) for small businesses, civic groups and community organizations, tax credits for low-income families, medical liability reform, and electronic health records for all Americans within 10 years.
The President’s plan will help reduce the rising cost of health care while improving quality and safety. It will provide new and affordable health coverage options for all Americans – targeted to those who need it most: low-income children and families and employees of small businesses and the self-employed.
Financial Challenges for Today and Tomorrow
Our budget reflects the country’s most important priorities of fighting the war on terror and ensuring economic growth. The President will continue to provide whatever it takes to defend our country and protect our homeland. He will also continue to promote pro-growth economic policies and exercise responsible spending restraint to meet his goal of cutting the budget deficit in half in five years.
The President is exercising spending restraint while meeting our Nation’s priorities. Excluding defense and homeland security, domestic discretionary spending increased by a very modest 3.4 percent in Fiscal Year 2004. In FY 2005, consistent with the President’s budget, spending growth will go down to less than one percent – below the rate of inflation and down from 15 percent in the last year of the previous Administration.
As we make progress toward reducing the deficit in the near-term, we must also address the long-term fiscal dangers posed by our entitlement programs such as Social Security and Medicare. Social Security alone faces a $10 trillion unfunded obligation. Trustees of the Social Security program have projected by 2018 the program will owe more in annual benefits than the revenues it generates, and it will go bankrupt by 2042 – before a young worker of today retires. As currently structured, the program will be unable to provide promised retirement benefits to young Americans entering the workforce today. >The current Social Security system needs to be fixed. The President has called for reforms that would keep Social Security's promises for today's retirees and near-retirees, while giving younger workers a chance to save in personal accounts for their own retirement. President Bush believes that personal accounts provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass on to their spouse or their children. Personal accounts do not add to the program’s $10 trillion in unfunded obligations, but are a means of funding existing obligations. Leadership means recognizing that these costs already exist, and working to reform the system so we do not leave this problem to our children and grandchildren.
Like Social Security, Medicare faces long-term financing problems. In addition to the demographic changes that plague the Social Security system, Medicare faces problems of rising health care costs. According to the Medicare Trustees, the growth in per capita health care costs is expected to outpace per capita economic growth by more than 60 percent over the next 75 years, leading to a projected unfunded obligation of $27.7 trillion over that period.
Preparing for the Jobs of the 21st Century
America’s growing economy is a changing economy, and some workers will need new skills to succeed. Today’s economy is an innovation economy. Not enough workers are being trained quickly enough to take advantage of many of the new jobs that are being created. We need to close the skills gap in America.
We need to ensure that every student graduates from high school with the skills and knowledge to succeed in college and the workplace. According to a recent survey, 73 percent of employers rate high school graduates’ writing, grammar, and spelling skills as “fair” or “poor,” and 63 percent rate their basic math skills as “fair” or “poor.” And students internationally are outpacing American students in essential math and science skills.
President Bush has proposed to reform the Nation's education and job training systems to ensure they work better for America’s students and workers, so that we close the skills gap by filling every high-growth job with a well-trained American worker. The reforms include assistance for our Nation's high schools and community colleges to ensure they are graduating students with the skills they need to succeed in the workplace and reforms to Federal workforce training programs to ensure that workers receive training that will help them get jobs in growing