Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Los Angeles Chamber of Commerce
Washington, D.C.

Despite the technological advances of the 21st Century, there's nothing quite like a face-to-face meeting to get business done. I commend you for taking the time to meet one-on-one with people throughout the government to let them know why Southern California is such a national asset.

Today, I'd like to give you the perspective from the Commerce Department and talk about three issues which are important for you and your businesses: keeping our economy strong, expanding foreign trade and reforming our immigration system.

Let me start by giving you some facts about the strength of our economy:

• 97,000 new jobs were created in February.
• That's more than 7.5 million since August 2003.
• National unemployment is at a low 4.5 percent.
• California 's unemployment rate was 4.8 in January, still well below the average of the last three decades.
• We've had 21 straight quarters of economic growth.
• Growth in 2006 (3.3 percent) was above the previous 15-year average.
• California's GDP totaled $1.6 trillion in 2005, 13.1 percent of the total U.S. GDP.

Our economy is strong because U.S. business is strong. Corporate profits were at a 40-year high as percent of GDP in the 3rd quarter.

California's payroll employment was 15 million in January. Small and medium-sized businesses continue to contribute to the economy as well. They employ half of all private sector employees and pay more than 45 percent of U.S. payroll.

To keep our position of strength in the world, we cannot be complacent. We must recognize three key realities:

• We must keep this the best country in the world to do business.
• We must open foreign markets, engage competitively in trade and spread free enterprise to the rest of the world.
• Finally, we must face the reality that without a strong workforce we won't be able to achieve our full potential

Keeping the U.S. the best place in the world to do business will require maintaining a pro-business tax and regulatory environment, addressing regulations and taking action to solve our energy needs.

Our job in Washington is to develop sensible policies that encourage growth and create jobs. High on this list is tax relief. Tax cuts led us out of recession. It's time for Congress to make tax relief permanent.

Another important factor in keeping our economic strength is reducing America 's dependence on oil. The President's "20 in 10" plan will cut our gas consumption 20 percent in the next 10 years. This goal requires progress on two fronts:

• Reforming fuel economy standards to make cars more energy efficient.
• Increasing the supply of alternative fuels.

We are seeing our free-enterprise system get behind the President's goal: companies, entrepreneurs and venture capital firms are investing in alternative fuel technologies.

Finding ways to use energy more efficiently and diversifying domestic sources, will create a safer America , a more stable energy market and provide new opportunities for American businesses.

One of the big reasons our economy is doing well is because we're competing and winning in the global economy.

• In 2006, U.S. exports reached an all time high of over $1.4 trillion dollars. Exports grew by 13 percent.
• In 2006, merchandise exports from California were $127.7 billion in or 12.3 percent of total U.S. goods exports.
• Two-way trade in the L.A. Customs District is $293.9 billion; the largest in the nation. (Source: L.A. Chamber)
• 43 percent of all U.S. imports come through the ports of Los Angeles and Long Beach. (Source: L.A. Chamber)
• And, for the first time in nearly a decade, exports out-grew our imports. (Imports grew by 11 percent.) So clearly we are creating an export culture.

Since 2001, we've implemented trade agreements with 11 countries--more than ever before. President Bush must continue to have Trade Promotion Authority to ensure we can continue opening foreign markets to U.S. goods.

Agreements with Peru, Panama and Colombia are next on the list, and we hope that Congress will work with us to pass them quickly . We also hope to conclude FTA negotiations with Korea in the coming days, California's fifth-largest export market.

To drive U.S. business we must have the best workforce in the world. First and foremost, we must educate our own citizens.

The "No Child Left Behind" Act has addressed challenges within our public school system. And we've recently seen the gap among minorities closing while student achievement is rising across the U.S. because of it.

Congress needs to reauthorize the Act by building on the law's success without watering down standards or rolling back accountability.

Through the American Competitiveness Initiative, we are also working to spark student interest early on in fields of science, math and technology. We need these young people in the pipeline to run your businesses in the coming years!

But the workforce of the future isn't limited to a discussion about education. Immigration is essential to the discussion.

Immigration reform has been on President Bush's agenda since the day he took office. Border states like Texas, and of course, California have been dealing with it for a long time.

The mood in Congress and across the country has shifted. People want action at the national level. And they want it sooner, not later. Secretary Chertoff and I are working closely with Congress to pass immigration reform this year. And like the President, we are optimistic about the chances for reform this year.

In the past few weeks we've had almost daily meetings with Members of Congress. I can tell you that we are starting to get past the emotion and down to logic.

There is a sense of pragmatism among the lawmakers I have met with. The debate is in a different place than it was a year ago. We are truly gaining momentum.

First, we must focus on national security. We must secure our borders and implement a system to tell us who enters our country, and who is already here.

The good news is that Congress and the American people see that our enforcement efforts are serious, and that they are working. In recent months we have:

• Ended the policy of "catch and release" of illegal immigrants at the border.
• Stepped up worksite enforcement. Arrests are up seven-fold since 2002.
• And we're doubling the number of border patrol agents to 18,300 by 2009.

Our next step will be a tamper-proof biometric identity card. This is a reality. It will happen. It will give employers the confidence to know who you are hiring. It will be a disincentive for people to come across that can't get one, or don't have one. We don't want people risking their lives to come to this country.

Secondly, immigration is crucial for our economy to grow in the years ahead. Today, immigrants make up 15 percent of our labor force, and accounts for nearly half the growth in the labor force (since 1996).

There are thousands of jobs that aren't getting filled because we don't have enough workers. Without immigrants, we won't have enough workers and the problem is getting worse. Demographic trends are against us:

• The number of people in the prime working years (ages 25-54) is expected to increase by a mere 0.3 percent in the next seven years.
• By 2010, 77 million baby boomers will begin to retire. Some are retiring already.

Many advanced economies face declining populations and struggle to assimilate immigrants. Immigration can be our competitive advantage. We're a nation of immigrants. We have a history of making immigration work.

We need an immigration system that can adjust to the changing demands of our economy, and take into account the tightening labor market, the need for seasonal workers and the ebbs and flows of a large free-market economy.

Immigration is one of our greatest opportunities if we approach it with judgment, wisdom and in the national interest.

The third goal of immigration reform is American unity. This means it must have bi-partisan support in the Congress.

We are a society governed by the rule of law. We shouldn't reward unlawful behavior. But the mass deportation of 12 million people is not a solution. Neither is amnesty. I am convinced we can strike this balance.

It's time to get beyond one-liners. It's time for Democrats and Republicans to roll up our sleeves to get this done. Everyone will have to compromise to get to a solution.

The American people will not tolerate a one-sided bill. They want us to find common ground. They want us to do what's good, and what's right, for our nation.

In closing, let me just say that these issues are vital to the future of our country. What we do in the coming months will have an impact for generations to come. So, thank you for coming to Washington to participate in the conversation.