For Immediate Release
Office of the Press Secretary
January 9, 2003
Remarks by the President on the Growth and Jobs Package
National Capital Flag Company
10:05 A.M. EST
THE PRESIDENT: Thanks for having me, Al. First, we just had a
really good discussion about how to insure America is as promising as
possible, how do we grow our economy, what's the role of government,
who do we trust when it comes to the people's money. And I want to
thank Al for assembling the group and providing this opportunity for me
to come and speak to you all and to the country about America.
First, the great thing about America it's represented by guys like
Al. He owns his own business. It's his -- he's realizing his
dream. The true strength of America is the entrepreneurial spirit of
America, is the fact that Al, who had gone from firefighter to CEO, it
can happen. And not only CEO, but CEO of a thriving business. And I
know Al's wife and daughter are really proud of him for taking a risk.
But by taking risk, he is not only realizing a dream, he's also
helping other people find work. The backbone of the U.S. economy is
the small business. And to be able to talk about economic vitality and
growth in a small business is a joy for me.
So thanks for having me. Thanks for what you do. Thanks for
making all those flags that fly on the limousines. (Laughter.) I'm
proud to be traveling behind your flag. (Laughter.)
I want to thank Hector Barreto, who is the Administrator of the
Small Business Administration for being with us. I'm proud that our
Senator from the state of Virginia is with us, George Allen. I'm
honored George is here. He's a good fellow. If you've got any
complaints about things, just take them to George. (Laughter.) But
I'm proud to call him friend.
I want to thank the Vice-Mayor of Alexandria who's here. Where are
you? Thank you, sir. Mr. Mayor, thanks for coming. I'm honored
you're here. My little brother is a resident of Alexandria, so go
light on his property taxes. (Laughter.) I'm going to try to go light
on his income taxes. (Laughter.)
I appreciate so very much the folks that joined us to talk about
their own individual circumstances and the policies that I've
articulated. I am oftentimes asked, how is the economy doing, and it's
doing pretty darn well, given the fact that we've been through a
recession, which is three quarters of negative growth. We've been
through an attack on America, which many folks in this neighborhood,
obviously, witnessed the consequences of firsthand. That caused our
economy to slow down. It caused people not to get on airplanes and go
to hotels. It was a shock to our economy. And then we had some of our
citizens not tell the truth, that they thought that they could fudge
the numbers to get ahead. And that created a lack of confidence. And
we've dealt with all three of these things and our economy is growing.
In spite of the fact that we had three major effects, the economy
is showing positive growth. Matter of fact, we're the strongest, most
resilient economy in the entire world, which should say something. So
we're pretty darn good, but we're not good enough. And that's what I'm
I say we're not good enough because there are some in the corporate
world that don't have the confidence to expand like they should be
expanding. And too many of our citizens are looking for work. Too
many people who want to work can't find a job. And that concerns. And
so one of my jobs is to deal with problems. If you see a problem,
instead of just hoping it goes away, just be forthright and lay out a
plan to deal with it. And that's what I'm doing. That's what I did in
Chicago, and that's what I 'm going to do again today, to talk about
why I've -- why I said what I think is important.
First, in order to deal with the recession, in June of 2001, I
signed a law that allowed people to keep more of their own money. In
other words, it was tax relief for all citizens. We've reduced the tax
rates for everybody who pays taxes. And it was phased in over a period
of years for the sake of economic vitality. I mean, it was good enough
in January of '01, the theory that if you let people have more of their
own money, it would help the economy. That same theory still holds.
See, if Congress thought it was good enough in '01 to let people
keep more money, they ought to think about it's good enough in '03 to
let people keep more of their own money. And the phase-in is in '04
and '06. And all we're asking Congress to do is take the law they've
already passed and accelerate the tax relief to today. As a matter of
fact, when they pass that, I'll then get the Treasury to make it
retroactive. And if we make it retroactive, the Treasury will then
account for that retroactivity, so that you get immediate money into
the economy. You'll notice the effects of the tax relief quickly.
All people who pay taxes should get tax relief. The tax relief is
already in place. If tax relief is good enough three years from now
for the American people, given the circumstances today, it's good
enough today. And Congress needs to hear that. The plan is fair. And
the other thing we're going to do is accelerate aspects, not only the
tax rate reductions, but the marriage penalty ought to be accelerated
-- the benefits of the marriage -- of reducing the marriage penalty
ought to be accelerated. It's a little odd that we have a marriage
penalty to begin with. (Laughter.)
It seems like we ought to not penalize marriage; we ought to
encourage marriage. We ought to speed up the increase in the child
credit. If you're a mom or a dad, you ought to get an increase in your
child credit. And we ought to accelerate the reduction of the lowest
tax rate from 15 percent to 10 percent. And these are all items that
allow me to tell you that 92 million Americans benefit from this.
You hear a lot of talk in Washington, of course, that this benefits
so-and-so or this benefits this, the kind of the class warfare of
politics. Let me just give you the facts that, under this plan, a
family of four with an income of $40,000 will receive a 96 percent
reduction in federal income taxes.
Now, that may not mean a lot of money to some of the big shots. It
means a lot of money for the family of four making $40,000. The income
taxes would drop from $1,178 a year to $45 a year. That's real
significant money for this family. It's money that family would have
to save, invest, to help with the credit card squeeze. It's money that
the family would have to make decisions on their behalf.
Somebody asked me earlier, why can't Congress see the wisdom of
this? And one of the answers is, is that some in Congress would rather
spend the money themselves as opposed to trusting you to spend your own
money, at least that's how I view the debate.
This tax relief is real and it's significant. I was with Wayne and
Candi -- I was with Wayne. They're going to save $2,500 a year. The
folks at the so-called roundtable -- it happened to be square, by the
way. (Laughter.) Wayne was with us, we were talking about his
family. Joe and Kristen, two hardworking Americans that have got two
children. They'll have a yearly savings of $900, an 18 percent
reduction in what they pay to the federal government.
This is a fair plan. It is an important plan. And it's a plan
that will help people find work, because it will help keep this economy
Secondly, one of the things in the plan is how do we affect the
small business owner. If 70 percent of the new jobs in America are
created by small business, then we ought to be figuring out how to
create incentives for small business to grow. That makes sense.
The first thing is that most small businesses pay -- file their
small business income on their personal income tax returns. Most are
small businesses or limited partnerships -- most small businesses are
limited partnerships or sole proprietorships. Al is not, he's a
C-corp, so he's pays at the corporate level, but many small businesses
So when you reduce the rates on everybody who pays taxes, you're
reducing the taxes on small business owners, which gives that small
business owner more money to invest in the growth of the business,
which means it's more likely he or she will be able to hire somebody
additionally. When you reduce the income tax rates on Americans,
you're affecting small business, and that's important for people to
know. It's a fact, and it's a real fact.
As well, I've asked the Congress to raise the deduction from
$25,000 to $75,000 -- in other words, the amount that a business can
deduct from the investment of equipment. And this makes sense for a
company like the National Flag Company. See, it is a capital-intensive
business. It requires sophisticated machinery to run this business, as
the folks who work here know. It's pretty darn sophisticated, isn't
If this plan were to go through, the company, Al tells me, since he
is the company, or part of the company, or the decision-maker in the
company, says that he would buy two more machines, which would create
more job opportunities for people. In other words, this is a plan that
says that if you are willing to take risk and invest more, that there's
a benefit for doing so. It's an incentive for small business to
It's aimed at small business, it makes sense for small business.
And if Al makes the decision to buy more equipment and to hire more
people, imagine all the different Als around the country that are
making the same decision. It's the cumulative effect of his decision
as well as millions of others that will enable me to predict that more
jobs will be created, more opportunities for growth. The people making
the machines will have more opportunity. And it will have a positive
effect throughout our entire economy.
The third aspect of this plan is on dividends. A dividend is money
that a company gives back to investors out of their profits. Right now
this country taxes dividends twice, or income twice, in the sense. In
other words, you tax the profit at the corporate level, and that's
good. Profits should be taxed. And when the profit is distributed to
an investor, it gets taxed. I don't think it's fair to tax that dollar
twice. And I think the Congress ought to abolish the double taxation
on dividends. That's a fair principle.
And it will have other effects, as well. Fifty percent, or half of
all the dividend income -- 50 percent of all the dividend income in
America goes to our seniors. There's a way that seniors have been --
many seniors have invested and use the dividend income as part of their
retirement. If you get rid of the double taxation of dividends, you
help seniors in their retirement. And that makes sense, that's good
public policy, it seems like to me.
The average tax savings for taxpayers 65 and older who receive
dividends, will be $936 per year, per tax return. That's -- that
will help. That will help people. Abolishing double taxation will
increase the return on responsible investing, which will draw more
money in the markets, which will make it easier for people to have
capital to build plant and equipment, which means more people will find
I mean, this is a plan to encourage growth, focusing on jobs. And
the Council of Economic Advisors has predicted that these proposals
will create 2.1 million new jobs over the next three years. That's
good for the American people. It's good for our economy.
See, I want people who need to put bread -- food on the table to
be able to do so, more people working. They're looking for work and
can't find work, that's -- that's sad.
I signed a bill yesterday, by the way, to extend unemployment
benefits. I want to thank both Republicans and Democrats, Senator
Allen and others, for getting that done. See, they showed -- they
showed yesterday that when they get their mind to something and forget
politics and focus on the good of the American people, we can get some
things done. And I signed the bill yesterday. They hadn't been in
town but two days and got the bill to my desk, and that's good. They
need to be thinking the same way about this jobs package. They need to
understand that the proposal I made will put $59 billion out the door
in 2003 alone, which is short-term stimulus. They need to understand
that we've got to be thinking long term for the United States of
America, that the role of government is not to create wealth but to
create an environment in which the small business can grow to be a big
business, in which people are comfortable about investing, in which
people have the ultimate confidence in our system.
We got a lot of big problems ahead of us here in America. We're
fighting a war. And the war goes on. I knew that the farther we got
away from September the 11th, the more likely it would be that I would
continue to have to convince people that we live in a dangerous world,
and we do.
And this year, the year '03, we're going to do like we did last
year, we're just going to keep hunting them down, one at a time. It
doesn't matter where they try to hide, we'll find them and bring them
to justice. We'll be dealing with weapons of mass destruction in order
to make the world more peaceful.
And here at home, we've got some obstacles to overcome as well.
And one of those obstacles is to make sure people can find work, make
sure this economy is strong and vibrant and hopeful, that the future is
optimistic for every single citizen.
But there's no doubt in my mind we'll overcome these obstacles.
There's no doubt in my mind that the world is going to be a more
peaceful place, because of the United States of America. There's no
doubt in my mind that we'll prevail in the war on terror, no matter how
long it takes. And there's no doubt in my mind, when Congress does the
right thing, that more of our Americans will have a more hopeful
future, because they'll be able to find work.
Thank you, Al, for giving me a chance to come by. May God bless
you and your families and may God continue to bless the greatest nation
on the face of the earth, the United States of America. (Applause.)
END 10:21 A.M. EST