July 28, 2006
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Remarks of Anna Escobedo Cabral
U.S. Treasurer
Before the Texas Association of Mexican-American
Chambers of Commerce
Good afternoon – buenos días a todos.
It is truly a great pleasure to join you today at TAMACC's 31st Annual Convention and Expo Women's Luncheon. It's a real thrill to be in the Lone Star State, particularly in El Paso, Texas. Thanks again for inviting me.
They say that everything in Texas is bigger, and from the looks of today's fantastic turnout at this event, I guess what they say is true. I really appreciate you being here and I appreciate your energy and enthusiasm.
Before we move on, I think we should all give a hand to today's event organizers, TAMACC and particularly the El Paso business community and chambers of commerce. Thanks again to all the staff, but also to the business-women and entrepreneurs present in this room today. Many thanks for your courage, determination and contributions. They are essential to improving our economy and improving our communities.
More importantly, I really want to express my profound appreciation to all of you for being such an inspiration to the Hispanic community and to the many professional Latinas who you inspire. You may be unaware of what a true role model each and every one of you is for perhaps a young professional hoping to start her own business one day. And on behalf of Secretary Paulson and President Bush, I want to express their gratitude for all of your hard work to keep our economy going.
Quite frankly, I'm really excited about this opportunity to share with you much about the work this Administration is focused on to ensure the continued vitality of our economy. But it is also important to make you aware of some of the President's current policy priorities, particularly in the area of immigration reform, which most of you here I'm sure are somewhat familiar with – perhaps from reading or listening to recent news reports.
I also think you'll find of significant value some information I'll share with you today about the day-to-day work we're engaged in at the Treasury Department to help promote the economic conditions which can truly help individuals grow and prosper – a prosperity which often translates to improved opportunities for individuals and improved lives for whole families and whole communities. For instance, the Department's work in the area of improving financial education is particularly noteworthy. I hope you'll consider tapping into many of the tools and resources we've made available for you, your employees and your customers.
But I'm sincerely not here to tell you, "I'm from the federal government and I'm here to help." On the contrary! I'm here as a representative of the federal government to ask for your help. As trusted leaders in your community, you really are the best conduit to help us get the word out about many useful tools and resources the government has developed to assist your customers, employees, and business partners make the best financial decisions. All kidding aside – we really do need your help and your leadership to disseminate crucial information throughout our communities – communities that are contributing significantly to our economy, and that unfortunately have been traditionally underserved.
That is still a real challenge today, but we're seeing some positive changes in people's level of awareness, and that includes a heightened awareness in the Washington and also in the financial services community.
A significant number of government leaders in Washington and corporate leaders are acutely aware that minority markets in the U.S. represent an important area of growth for the American economy. They also have a sincere interest in optimizing opportunities in these communities. More and more, the financial services community is looking to minority markets as areas for demonstrable growth – and that includes the Hispanic market. Just take into consideration projections from 2004 to 2009, which indicate a Hispanic buying power gain of 45 percent!
However, despite these significant contributions to the national economy, many minorities, particularly immigrants are less likely to participate in mainstream financial services. There are a variety of reasons for this. And while we've seen improvements in some areas, such as increased homeownership, there is still much room for improvement. Consider that while the rate for homeownership among minority households is higher than it has been, minority populations still are not purchasing homes at rates similar to other groups. In the past decade, the Caucasian homeownership rate has increased from 71 percent to 76 percent; while the Hispanic homeownership rate has increased from 42 percent to 50 percent between 1995 through the first quarter of 2005.
The President is aware of the challenges and opportunities that lie ahead and that is why he is truly committed to ensuring that we remain focused on promoting those policies that have placed the U.S. on the path to tremendous economic growth.
In the U.S. we've seen that our economy has surged over the past few years.
The U.S. economy continues getting stronger. Much of the economic momentum we've experienced in recent years can be explained by the President's firm commitment to promoting a pro-growth economic agenda. The resilience and strength of the U.S. economy is a fact – and this is true despite many of the recent and significant unforeseen challenges our country faced since the President first came into office – the effects of the tech stock market bubble burst, the monstrous 9/11 terrorist attacks on our soil and the devastating impact experienced of the Gulf Coast hurricanes in 2005.
The President's economic team nonetheless is focused on furthering policies which encourage enhanced opportunities for businesses to expand, as well as hire more workers to meet increased customer demands.
It is evident that these pro-growth policies are working and generating even better than expected results. Just consider the positive business investment and solid economic growth we've seen. We've had 36 straight months of capital investment growth averaging 9%, and more than 5.4 million jobs have been created since the President's tax relief took effect in mid-2003. We also now boast a 4.6% unemployment rate – a rate lower than the average rate in each of the last four decades. Thanks also in great part to businesses that understand their customers and continue to respond to the growing purchasing power of minorities, the economy has added an additional 121,000 additional jobs in just June of 2006 alone. Businesses, particularly small business like many of yours, are a significant driving force for our U.S. economy. They are really the backbone of the U.S. economy.
Additionally, although since mid-2003 people are keeping more of the money they make, pro-growth policies have nonetheless helped the federal government increase its tax revenue. In June, Treasury's monthly statement shows continued strong economic results. Receipts were up 13 percent so far this year over last year's 14.6% increase.
To put it into perspective, it may be useful to draw some comparisons. The U.S. economy is the fastest growing of any major industrialized nation in the world. Productivity is growing at the highest rate in years. In 2005, our economy grew faster than Japan and more than twice as fast as France. It also grew more than three-times as fast as Germany.
Again, we really must also credit small business owners for much of this growth. As I mentioned earlier, there is a significant amount of new business investment out there – and that is really fantastic news. It serves as an indication of the confidence we have in our economy and confidence that we will continue to do well for ourselves far into the future.
Much of this new business investment is lead by the Hispanic business community. I find it truly encouraging that the number of Hispanic-owned businesses is growing at three times the national rate. I also find very encouraging that the most recent economic indicators show that Hispanic unemployment is at the lowest rate in years – at only 5 percent.
One important explanation for this resilient and growing economy, again, is that we left more to businesses to invest by lowering their tax burden. It's about simple economics – when you allow people to keep more of their own money, they have more money to invest, and more of it to start or expand a business, or to pay for other important things like a college education or a purchase of a first home.
I can assure you that the President and his economic team will remain focused on furthering those proven and time-tested policies which encourage the innovator, the entrepreneur and the investor to dare believe in what's possible, in their own abilities and pursue dreams for a more fruitful future.
Nonetheless, increased opportunity necessitates increased preparation and education. As I mentioned earlier we can't expect the government to make money for us. We've got to do it for ourselves and we have to create our own opportunities. Doing so will require ensuring that individuals, particularly those in our respective communities, acquire the necessary skills necessary to manage their money wisely and invest it intelligently.
I mentioned earlier the importance of improving personal finance knowledge for all people across the country. Although our economy continues to grow, we still have much work ahead of us to improve financial education, particularly in minority communities, and including among Hispanics.
This challenge could be attributed to a complex and burgeoning economy like ours, which creates more choices and sophisticated vehicles for saving and making one's money grow. But often, it can also be attributed to lack of knowledge about available opportunities and resources.
When we talk about financial education in today's terms, what we're really talking about is improving people's quality of life. But achieving our common goals will require us to go beyond creating additional nicely manicured brochures.
Education requires more than just presenting information in a nice neat package. We find that we can have a greater impact when this information is delivered through trusted channels. The business community can play an instrumental role in this important task. And this sort of education in which we're all engaged is really about helping to create new opportunities for people – opportunities like paying for a child's college education, purchasing a home, starting a business or planning for a secure retirement.
Alternatively, we've also seen what can happen to those with little or no access to personal finance information and services. We realized the urgency of this task after witnessing first-hand the added difficulties many "unbanked" individuals faced as a result of last year's Gulf Coast Hurricanes. Many people without bank accounts in these hard-hit areas found it exceedingly difficult to access their government benefits. Many of those displaced from their homes were not easily tracked. Because they had no account relationship with a bank or credit union, and therefore no debit card many had to wait to receive a replacement check via traditional mail.
Because of this experience, Treasury has strengthened its commitment to helping people understand the value of establishing a relationship with a traditional financial institution; and we are engaged in several campaigns and multi-agency efforts to improve financial education in the country. I'll give you just a snap-shot of the efforts we're helping lead in the federal government, particularly at Treasury.
First and foremost, Treasury leads the efforts of a federal commission – the Financial Literacy and Education Commission – created in 2003 after President Bush signed the Fair and Accurate Credit Transactions Act, and the 20 agencies that form it were tasked with developing a plan to improve the money management skills of people in the U.S. Commonly referred to as the FLEC, it recently released a strategy for financial education during Financial Literacy Month in April of 2006 titled – Taking Ownership of the Future: The National Strategy for Financial Literacy.
The Commission was also tasked with developing a federal financial education web site and toll-free hotline, which were launched in English and Spanish in October of 2004 – MyMoney.gov and 1-888-MyMoney. I urge you to visit and spread the word about MyMoney.gov. It has been recently updated to include an interactive quiz called the "Money Twenty" and the strategy that I mentioned earlier is also available and can be downloaded at MyMoney.gov.
The Strategy looks at a variety of important topics, such as homeownership, credit management, retirement savings, and "banking the unbanked" – all topics of concern as we've seen for the Hispanic community.
It also describes the challenges and some possible solutions. The solutions may come from the Federal government, but often nonprofit organizations, businesses like yours and other private sector players provide important resources for those wishing to learn more about personal finance issues.
It also puts forward examples of financial education programs that community leaders, business people, and volunteers can all look to as they design programs of their own to enhance financial literacy.
And at the end of each chapter in the strategy, you will notice that Calls to Action are highlighted. It is our hope that these calls to action will provide a springboard for further open and inclusive discussion on a whole myriad of personal finance issues.
Another very important campaign my office has been involved in is the Go Direct campaign. About a year and half ago, the Treasury and Federal Reserve Banks launched a campaign called Go Direct – in Spanish it is known as Directo A Su Cuenta. The campaign's objective is to encourage seniors to receive their Social Security benefits by direct deposit.
It not only communicates the importance of direct deposit – but provides the means by which seniors can make the switch from a paper check to direct deposit. We have a dedicated call center staffed by bilingual personnel ready to assist all beneficiaries.
The call center is only one of many ways we are helping beneficiaries sign up for direct deposit. Our Web sites: www.GoDirect.org and www.DirectoASuCuenta.org, allow beneficiaries to access a step-by-step online tool to sign up – either on their own or through their bank or credit union.
Direct deposit is not only the most secure way for receiving Social Security benefits; it is also the most convenient way for all beneficiaries to have immediate access to their benefits. However, despite 95 percent of Americans having heard or read about identity theft, a survey sponsored by the U.S. Department of Treasury and the Federal Reserve Banks revealed that many are unaware of the security benefits of direct deposit over paper checks.
I urge you to help us spread the word about this fantastic resource too. Keep in mind that direct deposit can also provide seniors receiving SSA payments with a sense of control of their money. This is true even under the most difficult circumstances. Again, as you know Hurricane Katrina displaced tens of thousands of beneficiaries just days before their checks arrived in the mail. In uncertain times like these, enrolling in direct deposit can offer a much needed peace of mind to federal benefit recipients.
I have had a chance to share some very good economic news with you today. But the reality is that statistics cannot adequately capture the contributions of business leaders like you, individuals who have the potential of bringing about positive change and improving people's lives.
Unfortunately, it is also true that this data may not adequately capture the contributions of some immigrants, particularly for some who remain in the U.S. illegally – a significant amount of those individuals are Hispanic, coming from Mexico and other countries in Latin America.
They remain in the shadows and are often easy prey for those that would take advantage of the precarious situation in which they live. The President understands that while it is important to control our borders and protect our citizens, it is also imperative that we provide legal alternatives for those who which to gain entry into the U.S. in a safe and legal manner.
As the President says, it is rather telling when people from other countries make a conscious decision to leave their homes and families, risking everything to come to this country in search of a brighter and better future. We are a caring people, and we can not let their talent and desire to work go to waste. In fact, this country can surely benefit from it. That is why the President has outlined a comprehensive plan to reform our immigration laws.
The President believes the U.S. can be a lawful society and a welcoming society at the same time. He's said that he is committed to enforcing our immigration laws, but it will also be important to honor this country's proud immigrant heritage.
The President's comprehensive immigration reform approach aims to accomplish some very clear objectives. First, it is imperative that we protect our citizens and secure our borders. Second, it will be important to develop a temporary worker program – a program which will provide foreign workers a legal mechanism to come into the country, and in many instances do the jobs that Americans aren't doing. However, under the President's proposal, employers will also be held accountable for hiring undocumented workers.
But the reality is that there are millions of illegal immigrants who are already here in the country. While these individuals will obviously not be granted automatic citizenship, it is not a viable alternative to simply kick all these people out of the country. We'll have to deal with this challenge in a rational way – the President's plan also offers the possibility of doing so.
As Congress continues considering legislation on immigration reform, I hope that the business and nonprofit community will work together and help government provide these individuals with the tools to succeed – everything from learning English, pursuing an education and becoming financially literate- particularly as they move toward the path of legalization. This is particularly important in a society like ours filled with opportunity, but also replete with a variety of financial services options – options which many recent immigrants will not have likely yet been exposed to, particularly in their own native countries.
Ultimately, as the President has said, when it comes to devising a comprehensive approach to immigration reform, all elements of the problem must be addressed together, or none of them will be solved at all.
Thank you again for your time and attention – this has been a tremendous opportunity to make new friends and connections with the business community here in El Paso and I look forward to future opportunities to work together as we take positives steps toward many of our shared goals. It has been a real pleasure for me to share with you just a few of the efforts we're involved in here at Treasury and to highlight the President's priorities to keep our economy and businesses going strong. With your help and contributions, I know we will together continue to enhance opportunities for those who seek them.
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