FROM THE OFFICE OF PUBLIC AFFAIRS

October 21, 2004
JS-2049

The Honorable John W. Snow
Prepared Remarks: Florida Bankers Association's Leadership Dinner
Orlando, Florida

It's wonderful to be here this evening; thank you so much for having me.

It's always a pleasure to visit this wonderful state, and I'm delighted to see the resiliency and the perseverance of the people of Florida after one of the worst hurricane seasons on record.

On that topic, I want to begin today by thanking all of you who made funds available early for September's Social Security direct-deposit payments. Hurricane Frances was approaching, and honoring those direct deposits early was the definition of being a good neighbor. You came to the aid of your customers in their time of need, and it was a display of instinctive compassion that showcased the very human side of the banking industry.

Floridians understand how to prepare for, deal with and recover from adversity. You also understand the special sense of community that comes from pulling through something together.

I deeply appreciate the work you do, both for our economy and for our country's safety.

As bankers, your role in our economic strength is critical. From simple checking accounts to small business lending, you are a critical partner in the financial health of your customers… and their financial health determines that of the nation.

These have been busy years for you. The sound fiscal policies of low interest rates and tax cuts combined to give citizens more financial options, and more incentives to invest in their futures.

As bankers you've also faced new challenges associated with fighting the financial war on terror, and I want to talk more about that later.

Thanks to the your efforts, the work of your customers, the sound fiscal policies that came from the Federal Reserve Board and the President's tax cuts, our nation's economy is doing quite well. But there is still much to be done, and much that you will be doing to help.

Small business lending, for example, is awfully important. Small business is at the foundation of this great economy.

Small business is where the jobs come from. We estimate that seven out of ten new jobs are coming from that sector.

In addition to providing your small-business customers with the capital they need to start and grow, there is a new product that I would also encourage you to market to them, and that's Health Savings Accounts (HSAs).

The recently enacted Medicare prescription drug bill created HSAs, an innovative new program to empower consumers to make better health care choices. HSAs are really super-charged IRAs that put patients back in charge of their health care. You own it, you control it, you can leave it to your heirs.

It's a new option for health coverage that is good news for individuals and employers who are struggling with their health-care costs.

I have good news for banks when it comes to offering this new product: first, any bank is automatically allowed to offer HSAs to your customers as either a trust or a custodial account.

Second, the reporting on these accounts is minimal. You only need to report on them once a year – to the customer and the IRS – one form to report contributions to the account and another form to report the amount that has been taken out of the account.

Best of all: you won't need any new forms. Treasury has model forms that you can use, or you can adapt the forms you use for IRAs for HSAs.

In terms of the market for this product, I believe the future is bright. As small-business customers research the services you offer, adding HSAs to your portfolio are bound to make you more attractive as the small-business financial service provider of choice.

I believe the business opportunity for you is great.

HSAs are a critical step toward increasing the availability and affordability of health insurance for all Americans. They are also helping to put individuals in charge of their own health care… and that's something that is good news both for the American family and for the American economy as a whole.

Rising health-care costs are one of many factors that can act as a drag on our economic health. And while our economy is the strongest and most resilient in the world, it is important that we keep the burdens on free enterprise as light as possible.

We want fairness and freedom for America's small-business owners. It's not fair to add additional burdens to their already-heavy load. Lightening those burdens gives them the freedom they need to open a business, expand it.

Lower costs for health insurance reduces one of the top burdens on America's smallest employers – the employers who are also creating most of the new jobs.

Lowering their tax burden is critical for their health as well, and that's why the President's tax cuts paid particular attention to small business. In 2004, 25 million small business owners will receive tax relief totaling about $75 billion.

Nearly 1.4 million business taxpayers here in Florida will have lower tax bills this year.

Similarly, the tax cuts have allowed individuals to keep more of their income. More than 6.1 million Florida taxpayers will have lower income tax bills in 2004 thanks to the tax relief.

Those tax cuts helped to offset the serious blows to the U.S. including, in rapid succession, the bursting of the stock market bubble back in March of 2000, the economy in steep decline which President Bush inherited, the terrible behavior by high ranking corporate executives who forgot their duties to shareholders, workers and pensioners, and of course September 11^th which took such a toll. President Bush saw the urgent need to act, to put oxygen into the economy and because of his leadership the American economy is now getting back onto a good course.

I am often asked: what is the most important thing I can do, as Treasury Secretary, to strengthen the American economy? And I think that people appreciate the economic significance of tax cuts... that is the obvious answer. But it strikes me that this question is even better answered by Education Secretary Rodney Paige. For nothing will have a bigger, more lasting impact on the American economy than educating and preparing America's workforce for the jobs of today and tomorrow. Primary, secondary and continuing education - for generations to come - are by far the most important efforts toward achieving continued economic prosperity.

While recent economic recovery and growth has been impressive – with 1.9 million new jobs created in the past13 months, strong GDP growth, and homeownership at an all-time high – we are not satisfied, and we must always seek ways to increase growth and job creation.

While no one can really predict what the next high-growth industry will be, in a country where innovation is so wonderfully strong we know there will be plenty of jobs for our families. The state of Florida overall has had some outstanding news on jobs, with 16,600 created in August and 99,200 created so far this year.

I want to commend you for your contributions to this terrific economic growth, and I also want to thank you for the work you've done that has helped to keep your country safe as well as prosperous.

Six weeks ago, we marked the third anniversary of September 11^th, and I was once again reminded of the tremendous resolve in the financial community that came out of that day… resolve to cut off the terrorists' lifeblood: their money.

Institutions large and small committed themselves to the task.

America's financial institutions have done everything that the Treasury Department has asked of you during this fight, and I want to personally thank you for your efforts.

Your compliance with Section 314 of the Patriot Act – which requires everyone to share information – has been exemplary.

We've asked that you cross-check a list of terrorists and their partners, sent to you by Treasury's Financial Crimes Enforcement Network (FinCEN), every two weeks, against your customer databases.

It's a big job to keep up with these lists, and it's one that is never finished. You're doing it, and our country is safer because of it.

The list that comes to you from FinCEN is an important tool… but it would be useless without your partnership. We're in this together.

We've also asked you to comply with Section 326 of the Patriot Act, which has to do with record keeping. And I want you to know that you do have flexibility under those regulations… we've worked hard to make sure that your customers are able to use as many forms of identification as possible under those rules. We hope the flexibility makes it easier for you to be vigilant.

And we're always looking for ways to provide you with more and better information about our regulations. So let's keep up the dialog… let us know when we're confusing you, or when we can do better – because the better our regulations are understood by you, the more successful our critical enforcement efforts will be.

I know that complying with the regulations is burdensome, but it's for an important cause. We want to work with you to ease the regulatory burden while tightening our grasp around terrorist financiers.

Working together, we have accomplished a lot on this front of the war on terror in the last three years. The United States has designated 393 entities as terrorists or supporters of terrorists and frozen over $142 million in terrorist-related assets. 

Our efforts are making a difference. So please know that we appreciate our working relationship on the war on terror, and that we view you as a partner in other critical ways, as well.

You're also a partner in the effort to increase financial literacy and protect our citizens from identity theft. Both programs are critically important to the citizens of America.

You do so much for your customers, and for your country… I'm thrilled to be here with you today, and thrilled to have you as a partner in so many efforts.

I look forward to continued work with you on all fronts, and am pleased to share with you an optimism and enthusiasm for the future of the American economy. We have a shared belief that our best days are ahead of us. I am pleased to be working toward that future together.

Thank you for having me here today.

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