President Participates in Swearing-In of CEA Chairman Edward Lazear (Text Only)

President Participates in Swearing-In of CEA Chairman Edward Lazear
Room 450
Eisenhower Executive Office Building

THE PRESIDENT: Welcome. I'm here to swear in Ed Lazear as the Chairman of the Council of Economic Advisers. Thank you all for coming. Eddie has brought a lot of his family here. For the family members who are here, welcome; thanks for supporting the old boy. (Laughter.) I particularly want to Vicki and Julie, as well as his mother, Rose, for being here. I'm really glad you all are here. Does he still listen to you, Rose? (Laughter.)

THE PRESIDENT: That's a good boy. Well, I hope my mother is saying the same thing about me. (Laughter.)

Eddie is an award-winning economist from Stanford University. He's been a part of the Hoover Institute. He's taught and lectured in Asia and the Middle East and Europe. He's advised governments in the former Soviet Union and Eastern Europe on economic reform. He's conducted path-breaking research in the field of labor economics. He's applied his theories to real-world problems like education, and immigration, and compensation, and productivity. He's well-rounded, and he's plenty smart.

He also understands how to get his message across. After all, he was voted teacher of the year at Stanford's Graduate School of Business. That's not an easy accomplishment. He's a founding editor of the Journal of Labor Economics. He's a good man, who has served with distinction before in government. He served on my advisory panel on federal tax reform. And he's going to be an outstanding Chairman of my Council of Economic Advisers.

He succeeds another outstanding economist who still bears the title of Chairman, and that's Ben Bernanke. He just wears his title over at another place here in Washington. Eddie and Ben are part of a long line of talented economists who have served my administration as CEA Chairman, including Harvey Rosen, Greg Mankiw, and Glenn Hubbard. I want to thank Eddie for agreeing to serve our country. I appreciate his understanding of the important role he will play in my administration.

I appreciate those who are here from my administration. I see Carlos Gutierrez, the Secretary of Commerce. Carlos, welcome. Josh Bolten, a member of the Cabinet, the Office of Management and Budget. Senator Bob Bennett. Thank you for coming, Senator. I really appreciate you taking time to be here. Congressman Jim Ryun, and Anne are with us, as well. Eddie told me he's a runner. Don't run with Ryun, Eddie.

Eddie leads my Council of Economic Advisers at an exciting time. It's a time of opportunity and a time of challenge. Today the American economy is the envy of the world. Last year our economy grew at a healthy 3.5 percent, faster than any other major industrialized nation. We've added more than 4.7 million new jobs during the last two-and-a-half years. That's more than Japan and the European Union combined. Our unemployment rate is down to 4.7 percent. That's the lowest level since July of 2001. That's lower than the average of the 1970s, the 1980s, and the 1990s. More Americans now own their homes than at any time in our history. More minority families own homes than any time in our nation's history. This administration believes in ownership. We love the fact that somebody opens the door to their own piece of property, says, welcome to my piece of my property, welcome to my home.

Real after-tax income is up more than 8 percent per person since the beginning of 2001. New orders for durable goods, like machinery, have risen sharply. We've had 33 straight months of growth in our manufacturing sector. Productivity has grown strongly over the last five years. Our small business sector is thriving. America is productive; America is innovative; America is entrepreneurial. And I'm counting on Eddie's good advice to keep it that way.

We understand it's important to continue to promote pro-growth economic policies and sound initiatives with one goal in mind -- to keep America the economic leader in the world so our people can find jobs and realize their dreams.

Our economy grows when Americans have more of their own money to spend, save and invest. In the last five years we passed tax relief that left $880 billion in the hands of American workers and small businesses and families. And the American people have used that money to help produce more than four years of uninterrupted economic growth.

The tax relief that we passed is set to expire in the next few years. If we do nothing, American families will face a massive tax increase they do not expect and will not welcome. Because America needs more than a temporary expansion, we need more than temporary tax relief. So in my State of the Union I called upon the United States Congress to make the tax relief we passed permanent.

I also outlined several other steps to keep this economy strong and growing. We need to address our dependence on foreign sources of oil. You might remember I stood up in front of the country and said, we have a real problem; we're addicted to oil. I meant what I said. I call upon Congress to join with this administration to pass the Advanced Energy Initiative that will fund research in cleaner, more reliable technologies like hydrogen and ethanol, so we become less dependent. For the sake of our national security and economic security, we must not be dependent on foreign sources of oil.

We need to ensure that Americans get the health care they need. And so we're working to make health coverage more affordable and available and portable through measures like health savings accounts and association health plans.

To maintain our edge in innovation and creativity, I proposed the American Competitiveness Initiative, to promote cutting-edge research and to ensure that American children get math and science skills they need for the jobs of the 21st century.

One of the most important steps we need to take to keep this economy strong is to restrain federal spending in Washington. That's hard to do. Everybody thinks their spending idea is a great idea. They all -- all these spending ideas sound wonderful on paper. Here's our view: It's important for the Congress to set priorities. We are a nation at war, and one of the top priorities of this government will continue to be to make sure our troops have the equipment they need to defend the United States, and our citizens have what it takes to defend the homeland.

That means we must be careful about how we spend the taxpayers' money in other areas. In other words, we can't be all things to all people when it comes to spending the taxpayers' money. And we're making some good progress. Last year of the previous administration, non-security discretionary spending rose by 15 percent. Every year of my presidency we've reduced the growth of this spending, and last year, at my request, Congress passed legislation that actually cut this spending. I thank them for their hard work.

Now I look forward to working on my -- having them work on my 2007 budget that Josh Bolten is taking up to the Congress. This budget will save the taxpayers money; will cut -- will continue to cut non-security discretionary spending, and keep us on track to cut the deficit in half by 2009.

In the long run, the biggest challenge to our nation's fiscal health is entitlement spending. I recently signed a bill to save nearly $40 billion over five years in entitlement spending. The 2000 [sic] budget we submitted proposes to save another $65 billion over five years. We don't need to cut this mandatory spending; we need to slow its growth. In other words, we don't need to put our cars into reverse; we just need to slow it to meet the speed limit.

As well, I'm deadly earnest in calling members of both parties together to work to pass -- to propose something we can pass out of Congress that will modernize Social Security and Medicare. It's time for Congress to set aside needless partisan politics and focus on the future of our country with real, substantive entitlement reform.

We also need to do more to reform the way Washington spends people's money. Under the current system Congress can slip spending provisions into large bills where they never get debated and never get discussed. Those are called earmarks. As a result, too many bills passed by Congress include unnecessary spending. These earmarks reflect special interests instead of the people's interest. I'm pleased that Congress is working on earmark reform, and I encourage members of Congress to pass meaningful and real earmark reform.

Here's another idea for them: They need to give the President the line item veto. Congress gave the President a line item veto in 1996, but because with problems the way the law was written, the Supreme Court struck it down. That should not be the end of the story. So in my State of the Union I called for new legislation creating a line item veto that will meet Supreme Court standards. Today, I'm sending Congress legislation that will meet standards and give me the authority to strip special spending and earmarks out of a bill, and then send them back to Congress for an up or down vote. By passing this version of the line item veto, the administration will work with the Congress to reduce wasteful spending, reduce the budget deficit, and ensure that taxpayer dollars are spend wisely.

Congress is on record, by the way, that the President should have the line item veto authority. It has been approved previously. Forty-three governors have this line item veto in their states. Now it's time to bring this important tool for fiscal discipline to Washington, D.C.

I'm really optimistic about the future of this country. I don't think there's any problem we can't tackle. It's really important as we put pro-growth policies in place, to understand that the engine of growth is the ingenuity of the American people. I like to remind people: Government doesn't create wealth; government creates an environment in which the entrepreneurial spirit can flourish, in which people can realize their dreams, in which small businesses can grow to be big businesses, in which the newly arrived can have a chance to realize the great promise of our country.

Eddie understands that, and that's why I'm proud to have him by my side. And again, Eddie, thank you for agreeing to serve our great nation. And now Andy Card will administer the oath of office.

CHAIRMAN LAZEAR: Thank you, Mr. President, for the privilege of serving you and the country as Chairman of the Council of Economic Advisers. I thank Senator Shelby for his efforts in moving my confirmation through the Senate process quickly and smoothly. I also thank the staff of the Council of Economic Advisers for providing me with the information necessary to do this job. Finally, I thank my family for being here today and for being supportive of my work at the Council.

One colleague recently told me that in Washington, when people want the correct answer on economics, they go to the Council of Economic Advisers. The best compliment that can be paid to the Council of Economic Advisers is that the Council tells it like it is so that you, Mr. President, have the best economic information available on which to base your decisions.

I'm fortunate to join the Council at a time when the American economy is strong. Healthy productivity growth over the past few years has been followed by impressive job creation and reductions in unemployment rates to levels that are low by historical standards. And we continue to improve. Much of the strength of the U.S. economy results from flexibility in labor and capital markets, and from keeping tax rates low. Low tax rates encourage investment in machines, technology, and worker skills. In turn, investment creates the productivity gains that raise the wages of the American worker.

In order to keep taxes low, it's necessary to maintain fiscal restraint. And I applaud your efforts, Mr. President, on that front.

There are challenges ahead, but we have a solid foundation on which to build. Mr. President, I look forward to assisting you in keeping the American economy strong. To that end, I will devote all of my energy to ensuring that the Council of Economic Advisers provides you with the best economic analysis possible.

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