President Welcomes and Thanks National Governors Association (Text Only)

THE PRESIDENT: Thank you. Please be seated. Didn't take you long to get back. (Laughter.) Hope you enjoyed that as much as I did last night. It was -- Marvin was great. (Applause.)

I'd like to have a few -- I'll make a few opening comments and then I'll be glad to field some questions. First, I want to thank Governor Warner and Governor Huckabee for leading the NGA; I appreciate the job you've done. I thought the messaging in our local newspapers here was very positive: Governors coming together to try to figure out how to solve common problems. It's a good message for all of us here in Washington to hear. This town can be fairly bitter at times, and I remember fondly my days of working with people in both parties to try to get positive things done for my state. I hope that the spirit in which you all have come to Washington spreads throughout the nation's capital.

THE PRESIDENT: It takes a while to get to know every member of the Cabinet. (Laughter.) And Mike Leavitt and Chertoff -- oh, there you are; good. I appreciate -- I hope you find these folks as candid and as bright as I have found them. I really appreciate all three members of my Cabinet willing to come and serve in Washington. As you know, your administration can be defined by who you surround yourself with, and I've surrounded myself with good, capable people and I hope you found that to be the case. Candid, open people that are interested in working with our governors.

And we've had some challenges that we have faced together. Our economy, as you know, got rocked by a recession and then an attack and corporate scandals. But I'm pleased to know that your budgets are improving, that revenues are on the rise. That's because the economy is growing and we're adding jobs. And the fundamental question is how do we keep the economic growth alive. I spend a lot of time thinking about that here in Washington. I brought some ideas forward to the Congress, such as making sure the tax relief that we passed is permanent, that people are able to predict their tax rates in a better way so that they can plan. Part of making sure the entrepreneurial spirit is strong is so there's a kind of certainty. And we're working with Congress to make sure there's certainty.

The tax code, itself, needs to be reformed. I think the tax code is one that inhibits the flow of capital and growth. And so I've called upon former Senators Mack and Breaux to bring forth some ideas about how to simplify the tax code to make it more entrepreneurial friendly. That report should come out this summer. It will be an interesting challenge, but it's one that is a necessary challenge for Congress to work to simplify the code.

We've started with legal reform here. I hope -- I encourage you all in your own states to do the same thing. It turns out, America is one of the most litigious countries in the world. And that makes it hard to compete in a global society. We are at a competitive disadvantage when we sue each other so much. And we've got a good class-action bill out of the House and the Senate. We're working on asbestos reform. And I'm working hard to create a consensus that the scales of justice ought to be balanced. And I think a lot of people will tell you they're not balanced now. So we want to work here in Washington on legal reform; we hope you do.

I'll continue to work to open up markets, and at the same time, enforce our rules to make sure the playing field is level. It's good for your farmers that they're selling products overseas. It's good for your entrepreneurs that they can open up markets. What's not good is when the rules are unfair. And so we'll continue to work to enforce laws on the books.

We need an energy plan. We've got an energy plan, we need an energy bill. And I want to thank you for your support of the Clear Skies legislation. That will help some of you who are having trouble meeting your clean air requirements to do so without affecting your economies. And I want to -- (applause) -- I asked you to clap a couple of times during dinner last night. (Laughter.) I appreciate you -- thank you, Joe; yes, it was a good singer.

Look, what I'm telling you is, we're going to deal directly with the twin deficits -- the trade deficit. And the best way to deal with that is to make America the best place in the world to do business. By working to sustain economic growth, you're also working to make sure this is a good place to do business. That's the best way to deal with one aspect of the twin deficits.

And the other part of the twin deficit, of course, is the budget deficit. And you've seen our view, our attitude about that. And so I presented a good, lean budget to the Congress -- it sets priorities, it meets priorities. It, in essence, does what you do -- it says, if a program isn't working, don't fund it; or if it duplicates efforts, streamline.

And as you know, we have -- we're working with our governors to figure out ways to deal with not only discretionary spending issues, but mandatory spending issues, such as Medicaid. We want Medicaid to work. We want poor children covered by S-CHIP. But we also recognize that the system needs to be reformed, and we want to work with you to do so. There's no better group of people to work with than the governors. The governors are on the front line of Medicaid, I know full well. We're worried about intergovernmental transfers, and so we put that on the table for discussion, so that the system works the way it's supposed to work.

We want to work with you, as well, on education matters. And I want to thank Governor Warner for leading the charge for high standards coming out of high schools. It was an appropriate and important message. Some in Congress may want to try to undermine No Child Left Behind. Forget it, we're not going to let them do it, because it's working. And I want to thank you all for implementing No Child Left Behind; using the powers of the -- that the federal -- the flexibility the federal government has given you to achieve what we all want, which is an educated America. And the hopeful thing is, is that the achievement gap is closing in America. How do we know? Because we measure. So I want to congratulate you for the initial stages of making sure the education system works fully. And I look forward to working with the governors on implementing ideas about how to make sure the high school systems work.

We want to work with you on the Workforce Investment Act reform. And we train about -- I think we spend about $4 billion a year and train 200,000 people. I think we can do a little better job than 200,000 people being trained with $4 billion a year. And so we want to work with our governors to figure out ways to enhance flexibility, to get the job done, which is to train people for the jobs of the 21st century, and to utilize the fantastic community college systems that you all have helped build all around the country.

And we want to work with you on health issues. One of the things that we have done is expand community health centers. I hope you felt the impact in, particularly, your poor counties and poor neighborhoods by the expansion of community health centers. We've expanded or modernized some 630 of them; we plan to do 700 more this year. It's a fantastic way to help take the pressure off your emergency rooms.

I'm a big believer in health savings accounts. And I hope that you all look at health savings accounts as a way for small business owners to be able to better afford insurance for their employees. It is a great way to enhance consumer participation in the medical marketplace, and at the same time, help small businesses address cost.

I believe in association health plans that will allow small businesses to aggregate together, to pool risk, and to be able to buy insurance -- to pool risk across jurisdictional boundaries. Now, I understand there are some issues. There are some people in your respective states, people who might have got a pretty good lock on selling insurance, that don't like this idea. But the objective is affordable insurance. And so I want to work with Congress to allow association health plans to expand.

We've got an issue when it comes to medical liability reform. I can remember talking to OB/GYNs from a lot of states. I'm trying to look around for governors, particularly in some states that are in particular need of medical liability reform. I've come to the conclusion that this is a national issue -- when I first got here, I said the states can handle it -- until you look at what the cost of defensive medicine -- what it costs to the federal budget. It costs us billions of taxpayers' money. And I've concluded this is a national issue, and I'm working with Congress to get out a reasonable bill on medical liability reform. It's necessary if you believe that medicine ought to be affordable and available, because we've got a problem. When you've got OB/GYNs being run out of business in America, you've got a problem in your states, and you know that. And so I look forward to taking on this issue again at the federal level. (Applause.)

A couple of other things I want to say, and then I'll answer some questions. Some of you are probably wondering why I took on the Social Security issue. After all, it had been called the third rail of American politics. I am because the demographics have changed dramatically, and you're beginning to see it in your states. You're seeing it through Medicaid, you know about it in Medicare, and of course you know about it in Social Security because most of us are baby boomers and we're fixing to retire, and there's a lot of us. And, yet, we've been promised bigger benefits than the previous generation, and we're living longer.

So you've got baby boomers fixing to retire, who are living longer, who've been made a bigger promise than the previous generation, and the government can't afford it. There's not enough workers contributing in the system. And we need to do something about it now. And I'm going to -- I'm coming to your states -- I'm coming to a lot of states between now and whenever Congress decides to take this issue on, head-on -- to remind people not only we have a problem, but we have an obligation to fix it. And I'm looking forward to this debate. I think this is a healthy use of our time in Washington, to see big problems and come together and fix them.

Now, the Medicare bill hasn't taken an effect yet. But it, too, suffers from the same demographic issue, because you've got a lot of baby boomers that are going to retire, and the fundamental question is, how do we deal with it. My attitude -- and I've told Congress -- let the reforms that we've just passed kick in; they hadn't kicked in yet -- 2006 is when you begin to have prescription drugs become available to seniors, and 2006 is when you're going to see drugs begin to replace -- over time, drugs begin to replace hospital stays. See, the old system would pay for a heart surgery, but not a dime for the prescription drugs that might prevent the heart surgery from being needed in the first place. It was very cost ineffective. Nor did it offer our seniors a modernized system. And so we look forward to working with you and Congress on Medicare reform after we solve the Social Security problem.

And, finally, I urge you to continue to take advantage of the faith-based initiative. I believe that the best way to cure many of society's ills is to surround them with love, and faith-based groups exist purely because they want to love somebody, or do love somebody. And we're working really hard to make sure that federal money is accessible on a competitive basis to our faith-based programs around the country.

I've traveled our country a lot, and I found these just fantastic institutions that are changing America one soul at a time, and I urge you, if you don't have an office, to set up a faith-based office and take advantage of the fantastic opportunity available that we're trying to make available to the faith community.

You know, not every problem is going to be solved by a faith-based group, but at least you ought to include faith-based groups in the mix. It makes sense to me to make sure that taxpayers' money is accessible on a competitive basis. And it's all aimed -- the program is all aimed at helping change this country for the better.

Let me talk about foreign policy right quick. I know a lot of you have got Guard troops in Iraq. I want to thank you for supporting those troops. Whether you agree with my decision or not, you've done your duty as Commanders-in-Chief to support the troops, and I appreciate it a lot. But, more importantly, they appreciate it, and their families appreciate it.

I thought the hug at the State of the Union helped talk about the mission better than any words could have. And I hope that helped you when you explain to the families in your state what's happening. The gratitude of the Iraqi woman toward the American mom whose son had died was profound, gratitude that the country was free and freedom is on the march. These are exciting times in our world.

But I want to thank you for doing your duty and supporting those kids, men and women, who are over in harm's way. We're making progress there. The mission is to get the Iraqis in a position where they can defend themselves. And we'll try to do that as soon as possible, get it done as quickly as we can, and then our troops are coming home with the honor they've earned, as I said in the State of the Union.

I'm looking forward to working with you all. I'm excited about the next four years. I've got the energy and the drive and the desire to do the best I possibly can to make America as hopeful and optimistic place as it possibly can be, and I know it can't be done without cooperation with the governors.

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