(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
JS-1783
I'm delighted to be here in my home state of Ohio today. I have some news about our economy that I want to share with my fellow buckeyes, and some thoughts about how to keep America on a path of economic expansion and opportunity.
Recent history dealt some severe economic blows to this country, and the people of Ohio felt them as hard as anyone. You lost a lot of jobs, especially in your manufacturing community. The road back to financial health, from an economy that was in deep decline before the President took office, has been tough going for everyone.
The attacks of September 11th hit us hard, economically, just when we were starting to recover from that recession. And I want to talk later today about how closely tied our physical security is to our economic security.
We also had corporate scandals come to light in 2001 that rocked trust in our markets and hurt thousands of innocent workers. It was the last thing we needed, when we were trying to get on sound economic footing again.
So we were hurt, damaged. Ohioans who lost a job know this best. And there is simply no comfort in that situation except when a new job is found. Making sure that new job is created has therefore been the top domestic priority of this administration.
Tax cuts that paid particular attention to small businesses – America's job-creators – and an unwavering commitment to free, open trade helped create an environment in which those new jobs could be produced.
Here in Ohio, more than 30,000 new jobs have been created so far this year. That's the best news possible for tens of thousands of Ohio families.
Your unemployment rate has come down – it's at 5.6 percent right now, which is the same as the national rate – but there is still work to be done. We need to make sure that Ohio stays on a good economic path.
In fact, we need to make sure that the whole country stays on the path of economic growth. Making the President's tax cuts permanent is critical to making that happen.
We're seeing the highest rates of growth in 20 years and very strong job creation with ten months of growth. America has created more than 1.5 million jobs since August of 2003, including nearly 1.3 million this year alone.
The manufacturing sector has made a comeback, reporting increased activity and new orders and, most importantly, up 64,000 jobs since its low point in January.
American's standard of living is on the rise, with after-tax incomes up 11 percent since December of 2000.
Consumer confidence is at its highest level in two years and homeownership is at an all-time high.
Allowing Americans to keep more of their hard-earned money worked. Letting you decide how your money is spent – rather than having government decide – is good for the economy, period.
Here in Ohio, more than 4.4 million taxpayers will have lower income tax bills in 2004 thanks to the President's tax cuts. Nearly 860,000 Ohio business taxpayers will be able to use their tax savings to invest in their employees' pay or benefits, the purchase of new equipment, or hiring of new staff.
Raising your taxes right now would be terrible news for our economy, and for every Ohioan who seeks work.
It's important to remember that tax cuts, especially those for small businesses, are critical for the rural communities of Ohio – not just cities like Cleveland.
Local economies depend heavily on small businesses and family-owned farms. Often times these are businesses that struggle with cash-flow, and they benefit in three important ways from the President's tax relief:
First, an ability to keep, and reinvest, more of the money their business earns. Most small-business owners file their business income as individual income on 1040 forms. That's why a reduction in individual tax rates was so very important for small business.
Second, the President made sure that small firms would be able to deduct a much greater amount from their taxes for the purchase of business equipment. That amount was increased from $25,000 to $100,000. Imagine if you are a farmer who is struggling to make payroll and you really need a new tractor, bailer or truck. Those day-today necessities are awfully expensive to purchase. The ability to deduct them from your taxes often makes the difference between being able to afford it or not.
Increasing the expensing allowable means that the new tractor is affordable and when the new tractor arrives, someone needs to be hired to operate it. And that's a new job for that rural community.
Third, small businesses and farmers are benefiting from the President's initiative to lower and ultimately eliminate the death tax. The death tax hits farmers and ranchers especially hard because their assets are tied up in their land, livestock and equipment. That punishing tax wreaks havoc with family farms, forcing the next generation to sell the farm to pay the tax. It's wrong, and it needs to be permanently erased from our tax code.
There is no doubt that tax cuts increase economic activity and create jobs, but in order to be truly successful in the effort to employ more Americans we've got to make sure that our job training efforts are in synch with job creation. That means matching training opportunities with the jobs that exist in a particular community.
Our nation's community colleges are really great at making that happen. They work with their local business leaders and keep their finger on the pulse of what industries are creating career opportunities. They then design a curriculum that prepares workers for those jobs.
When community colleges and job-creators work together, people find good work more quickly and businesses get the skilled employees they need. This is particularly important in more rural areas where the variety of job opportunities is more limited. A worker really needs to have the skills needed in his or her geographic area, and most Americans are within driving distance of a community college.
That's why the President is dedicated to promoting and helping our community colleges, and making them a more integral part of our nation's workforce investment system.
Another important element in creating new jobs is making sure that businesses have incentives to grow, and to hire new people. And if there are disincentives to hiring, we've got to do our best to eliminate them.
Something that I hear from business owners wherever I go is that the threat of abusive lawsuits is a burden to their business. It's a drag on their growth potential and their ability to hire new people.
Lawsuits are adding up to a tort tax on businesses and citizens that costs America well over $200 billion each year. That tax is paid in the form of lower wages, higher product prices, and reduced investments and it averages out to $809 for every individual and more than $3200 for a family of four. And this is a regressive tax, imposed indiscriminately across our economy
To make the situation even less fair, less than 50 cents of each dollar of those tort costs go to victims and, of that, only 22 cents goes to compensate them for actual economic losses they have suffered meanwhile the personal injury lawyers profit enormously.
At a time when our economy needs to be expanding, this is unacceptable.
Because an abusive lawsuit has never created a single job – except jobs for personal injury lawyers – but baseless and excessive suits have killed many.
It disturbs me that doctors in the prime of their careers are leaving medicine because the cost of protecting themselves from litigation is so high. This is an area where rural Americans are at a higher risk. A doctor closing down his practice leaves patients with fewer options. And when you are sick you want a doctor close by not one you have to drive hours to see.
It is wrong to hold businesses, professionals and individuals hostage with the threat of these suits. And it is a tragedy that this country, made great by its can do attitude, is becoming known for its can sue attitude as well.
We need federal and state level lawsuit abuse reform, and we need it yesterday. Of course, those injured because of negligence should be compensated for their losses and we must make sure the system does that. But the current system of frivolous lawsuits is a national disgrace and must be fixed.
Relief from abusive lawsuits would cut a significant weight from our economy – particularly in the small-business and medical communities. We're too great a country to let a handful of greedy trial lawyers slow down our economy, so we need our lawmakers to act on behalf of real reform.
Of course, there is no more serious threat to our economy than the threat of terrorist attacks on our soil.
We were reminded last week by Homeland Security SecretaryTomRidge that the threat from terrorists is still very real.
And the President has reminded us that our vigilance in the fight against terror is critical.
A nation cannot be prosperous unless it is secure, unless people feel safe and can plan for the future.
At the Treasury Department, we fight the terrorists where it hurts them most: their finances.
One of the lesser-known elements of terrorist networks is their financial magnitude, and I'd like to talk a little bit today about that aspect of their operations, and how we combat it.
The September 11th attacks are estimated to have cost around half a million dollars to carry out, not including the hijackers' training in Afghanistan. The men who killed our brothers and sisters on that terrible day had spent over a quarter of a million dollars here in the U.S., primarily on flight training, travel, housing and vehicles. The CIA estimates that al Qaeda was spending $30 million per year on expenses that included terrorist operations, salaries and maintaining terrorist training camps.
Hatred fuels the terrorist agenda; cash makes it possible. The work to track and shut down the financial network of terror is, therefore, one of the most critical jobs of our government today.
One of the many considerable achievements of the 2001 Patriot Act was an increased ability to do that job. The Patriot Act eliminated the barriers that had prevented enforcement officials and members of the financial services community from sharing information. It authorized the sharing of critical information about suspected terrorist or money-laundering activity – not only between the government and financial institutions, but also among financial institutions themselves – by allowing them to register with the Treasury Department.
The Act also directed banks and other financial institutions to bolster their defenses in areas that would likely be vulnerable. The financial community has responded with a patriotic vigilance. You may have noticed that there is an added security element when dealing with your bank. Proving your identity when engaging in financial activity, for example, has become a far more stringent process.
These changes have enabled the government, in partnership with the financial community, to tighten the tourniquet that cuts off terrorist blood money. Since September 11, the U.S. and our international partners have designated 383 individuals and organizations as terrorists and terrorist supporters and our freezing efforts have kept over $141 million out of the hands of terrorists that seek to harm us.
The Patriot Act dramatically increased our ability to choke off terrorist monies, without which they are rendered utterly ineffective. Renewal of the Act is one of the most important steps we can take to defeat the killers, to force them back into their tunnels and holes, starved of the resources it would take to build a bomb, pilot a plane or harness a virus.
A decrease in terrorist prosperity will lead to an increase in American prosperity. Because when we are confident in our safety and less prone to horrific attacks, we are freer to be creative, innovative, and productive. And the ability to do those things is what makes the American economy so special, so great.
There will be no better revenge against those who hate us than for our society and our standard of living to continue on an upward trajectory as we demonstrate the great strength and resilience of a free democratic society.
Government today has an awesome responsibility: to serve this country by creating a healthy environment for small business and economic growth, to protect the country from those who wish to harm us, and to ensure that the basic needs of every American are met: health care, education, jobs.
When we do our job right, the American people and the American economy respond with innovations, jobs, technical and medical breakthroughs, and more prosperity for more people.
That's America, and that's what we're protecting, in everything that we do.
It's an honor to work for the American people, and I hope you'll let me know when you see something we could be doing better.
Thank you for having me here today.