(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
JS-991Good evening. It is my pleasure to join you for dinner tonight to speak to you about two very important, and closely related subjects: energy and the economy. Ill take the second part first, if you dont mind, because I see energy as a key component of an overall economic development strategy.
Before I begin, I bring greetings from Spencer Abraham, our Energy Secretary, and my close friend on the cabinet. He is an exceptional spokesman for the President on energy policy. He has shown real leadership on energy issues, and he is at the forefront of our efforts to work with Congress on the energy legislation presently before Congress.
First, lets talk about the state of the economy. Its doing better. When you consider what this country has gone through in the past three years, the body blows of a recession, terrorist attacks, a bursting bubble, and a rash of corporate scandals, its quite amazing that the economy is growing at its current pace. Thats a real testament to the strength of President Bushs economic leadership, to the flexibility of the American economic system, and the perseverance and industry of the American people.
Let me point out a couple specific indications of growth: last week the Department of Labor reported that our economy added 126,000 new jobs in October. And over the past three months, there were 286,000 new jobs. The unemployment rate fell to 6 percent. The four-week average for jobless claims has declined in six of the past seven weeks. And manufacturers reported that orders and shipments are both rising. This news comes one week after we heard that economic output rose at a 7.2 percent annual rate in the third quarter, the fastest pace of growth in nearly 20 years. ISM's manufacturing index advanced to 57.0 in October, its highest level since January 2000. The non-manufacturing index rose to 64.7, the second highest level on record. Factory shipments were up 1.4 percent in September and new orders by 0.5 percent. Construction expenditures rose 1.3 percent in September for a fourth increase in a row.
America's economy is getting stronger every day. American companies are investing. Americans are buying homes at a record pace, and homeownership is near record levels. Stock market values have risen, adding about $2 trillion in wealth for investors since the beginning of the year.
We can all be encouraged, but we cannot be satisfied. These are early signs of progress. Now we must turn this progress into broad and lasting gains for all Americans. The most important thing we can do to help those looking for work is to make sure our current economic growth results in more new jobs. President Bush has proposed a six-point economic plan to encourage companies to expand and hire workers.
I will get to that plan in a moment. First, however, I think its important to point out that this economic growth we are beginning to see didnt just happen by accident.
The Presidents Jobs and Growth Act passed in May, and it clearly provided the boost the economy needed to get back on track. In July, withholding tables were revised to show reduced marginal tax rates on income, and child tax credit checks went out in the mail. That lifted consumer spending.
The Presidents plan also increased bonus depreciation and quadrupled the expensing limit for small businesses, encouraging business investment. Dividend tax relief had a positive effect on the markets. In fact, equity prices have climbed about 30 percent since mid-March, improving financing conditions for businesses, and adding to household net worth.
Still, the labor markets arent picking up as fast as wed like to see. I can tell you that President Bush is not going to be satisfied with this recovery until every American who wants a job has got one. Were not sitting back watching the number roll in were out there making this economy better making condition better for growth, investment, and job creation.
President Bush unveiled the aforementioned six-point plan to further strengthen this economy, and set us on a long-term path toward growth.
First, we are working to make health care more affordable and its costs more predictable, so employers can add new workers without also adding a large and uncertain burden of health care costs. We need to create an environment where health care spending is focused on providing high quality, high value care.
Second, we are working to prevent frivolous lawsuits from diverting money from job creation into legal battles. We also intend to ensure that when necessary lawsuits proceed, the settlements are paid to the victims, not the trial lawyers.
Third, we are working to build a more affordable, reliable energy system that can support the expansion of our economy. Im going to dig into this one in a minute.
Fourth, we are streamlining regulations and needless paperwork requirements that reduce business productivity and deter growth.
Fifth, we are opening new markets to high value American products and bringing down prices for American consumers through trade agreements.
And sixth, we are working to make tax relief permanent, so businesses and families alike can plan for the future with confidence.
Now, let me dig into point three back there, on energy, because I know youre interested in that. Obviously, energy is a key sector in our economy. All the more important because our economy is getting back on track, and thats going to mean more demand for energy than ever before. Everything else we do relies on energy nobody works when the lights are out and the car wont start.
The Presidents energy bill has been bouncing around in Congress for two years, and in the meantime weve seen all kinds of signs that we need to get that thing passed. We had the blackouts all through the Northeast this summer. Weve had fluctuating gas and oil prices, trading on political situations in the Middle East. The energy bill is in conference now, final negotiations between the House and Senate, and were urging them to get it to the President, with his proposals intact.
As the President succinctly put it a few weeks ago, we need to encourage production, and we need to encourage conservation. We need to use energy resources weve got in an environmentally friendly way. And we need to advance new kinds of energy.
Heres an overview of the Presidents energy vision.
To keep our economy moving far into the future, we must have a sound national energy policy. Every person who owns a home, or works on an assembly line, or drives a truck, or runs a small business depends on affordable, reliable supplies of energy. Our economic security and our national security require secure sources of energy. Congress must pass a sound energy plan - and that plan must have a few key elements:
First, America needs more energy production close to home - in our own country, in our own hemisphere - so that we are less dependent on energy from unstable parts of the world. Our nation and our hemisphere are rich in clean-burning natural gas - but developing this resource has been hampered by restrictions on exploration. The Congress should allow responsible exploration, bring more gas to market, and lower costs for everyone. The Congress should promote research into next-generation nuclear plants and encourage investment in existing nuclear plants - to expand a clean and unlimited source of energy. And the Congress should encourage clean coal technology, so we can use our nation's most plentiful energy resource in an environmentally responsible way.
Let me touch on coal for a moment. Coal is our most abundant domestic energy resource and that we must ensure it has a strong future in our energy policy. This is why the Administration supports $2 billion over 10 years for clean coal technology to ensure a future for coal; new source review rulemakings which provided regulatory certainty that coal plants could engage in routine maintenance without triggering the application of unnecessary new source emissions controls; Clear Skies legislation that would reduce emissions of Nox, SO2 and Mercury while providing regulatory certainty; and a commitment to support a $1 billion public-private partnership to design, build and operate a virtually emissions-free, coal-fired, electricity and hydrogen plant.
Second, America has an immediate need for better infrastructure - pipelines, gas terminals, and power lines - so that the flow of energy is reliable. The current grid is old and inefficient - but Federal laws actually discourage new investment in infrastructure, by keeping many investors from entering the electric or natural gas business. The Congress needs to encourage new investment in a modern electric grid by ending those rules, which are nearly seven decades old. We need mandatory - not voluntary -- reliability standards for our power companies. Right now,
the placement of new power lines often gets bogged down because local authorities can block transmission wires which would go through their states. The Congress should give Federal energy officials the authority to site new power lines when necessary - so we can create a reliable, national transmission grid.
Third, America must develop and deploy the latest technology to provide a new generation of cleaner and more efficient energy sources. A lot of companies are doing this ground-breaking research and we need more of it. The Congress should expand tax credits for renewable energy sources like wind and solar power. The Congress should fund new research into hydrogen fuel technology - engines that run on hydrogen, and produce water, not exhaust fumes. We should encourage fuels made from renewable sources, such as corn. We would much rather replace oil from the Middle East with farm products that come from the heartland of America. In all these ways, we can grow our economy and clean our environment at the same time.
Both the House and Senate have passed energy bills that include these proposals. Now they need to iron out their differences and send the President a bill. Our economy and our country have waited long enough. The President sent the Congress a comprehensive energy plan more than two years ago. And two years later, our energy challenges are only more difficult. The Congress should not wait for further blackouts and price spikes before they act. For the sake of our economic security, for the sake of American jobs and workers, the Congress should finalize a comprehensive energy bill and take action this year to make America less dependent on foreign sources of energy.
Thanks again for inviting me to Scottsdale. Its been a pleasure to see all of you. Its an exciting time for the U.S. economy, and its my privilege to share the Presidents vision with you.
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