For Immediate Release
Office of the Press Secretary
December 16, 2004
Remarks by the President at Closing of White House Economic Summit
Ronald Reagan Building and International Trade Center
1:27 P.M. EST
THE PRESIDENT: 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.
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 team.
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."
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 session.
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 capital. (Applause.)
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 ago.
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
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 task.
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.
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 to succeed."
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
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 it right.
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 down.
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
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
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 that nothing will
change, you're really speaking to people that don't believe they're
going to get a check at all, and that is the younger generation coming
up. And therefore, the dynamic has shifted. And therefore, there's
millions of people wondering whether or not the government has the
courage to do something to make sure a younger generation will have a
viable retirement system available when they retire. And that's how I
see the issue.
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 portfolio grow.
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. (Applause.)
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.
END 2:06 P.M. EST