August 11, 2005
JS-2683

The Honorable John W. Snow
Prepared Remarks
Mount Pleasant, Pennsylvania

Thank you; it's great to be here in Mount Pleasant. I'm really pleased to have the chance to visit the Sony Technology Center and see the terrific work you're doing here.

It's always a pleasure to be in Pennsylvania, and I am glad to see that your state has added so many jobs in the past year. Pennsylvania payrolls have increased by almost 62,000 since last spring and your unemployment rate is down half a percent to just 5 percent, the same as the national rate. That's great news for Pennsylvania workers.

This facility represents so many jobs and so many skilled employees. And this goes far beyond the 2,300 jobs that are actually here in the Center. The Sony Technology Center represents the jobs of all its suppliers, all their employees, and I think that's fantastic. Using local suppliers has been good for the region, and it's been good for your business.

You've been recognized for your positive impact on the Pittsburgh area because of the employment you've generated, and you've also been singled out by environmental agencies – state and federal – for your initiatives that protect the environment. From every perspective, you have a record to be proud of, and one that speaks to the outstanding quality of your employees. The thousands of workers that contribute to the success of this Center are highly trained; they are the best at what they do. The President believes that American workers, especially when given the right education and training opportunities, are the best in the world and can compete with anyone. The success of businesses like yours is proof-positive that he's right.

Companies like those represented here today, the suppliers for this larger company, are a tangible, visible example of the health of the American economy. I appreciate the work you do to grow this great economy and create jobs, and I know how much the President appreciates it, too.

Our economy was the subject of a meeting that President Bush held, two days ago, at his ranch in Crawford, Texas. I went down to Crawford with other key members of the President's economic team to have an in-depth discussion about what is going right with our economy, and what areas still need work. We talked a lot about the cost of energy and health care, and how those costs can make the difference, for a family, between feeling financially secure or financially stressed.

Reforming Social Security is also a critically important part of a healthy American economy for future generations, it's something we talked about in Crawford, and I want to talk more about that with all of you in a minute. This weekend is Social Security's 70^th anniversary, and I can't think of a better way to mark this milestone than by saving the program – one of the great successes of 20^th century American government – for our children and grandchildren.

Overall, I'm very pleased to tell you, the American economy is really thriving. We've seen amazing economic times in the last few years. Well-timed tax cuts, combined with sound monetary policy set by the Federal Reserve Board, got our economy moving when we needed it most. They gave individuals more control over their own money, and business like yours the room you needed to grow, and you took over from there.

The President was just saying, in Texas this week, that his economic agenda is based on the fundamental trust that the American people make good decisions for themselves, for their families, and for their businesses. That's why his policies allow people to keep more of what they earn and have more control over their daily lives from health care to education to retirement. As the President puts it, "It makes sense to trust people with their own money."

Policies that encourage open markets and trade have helped your businesses, and our economy, too. The President just signed CAFTA legislation, which was important because it opened up new markets, with 44 million new consumers for American products, which is terrific news for our farmers and small-business owners.

Good policies have led to visible results. It's worthwhile to take a look at the numbers. Today, GDP growth is very strong – a solid 3.4 percent in the second quarter of this year – and job creation is robust and steady, with 207,000 new jobs created last month and nearly four million jobs created since May of 2003.

The unemployment rate is five percent, which is below the average of the 1970s, 1980s and 1990s. Americans have more money in their pockets, and they're buying the things their families need. The most recent data – from June – show consumer spending up by a strong 0.8 percent, the biggest increase since October 2004, and retail sales grew at a higher-than-expected 1.7 percent. Sales of both new and existing homes are at all-time highs. 

The most important thing, economically, for anyone is to have a job, and we're seeing that happen. An improving economy also leads to higher real wages and income. More jobs leads to more people being covered by health insurance and retirement plans as well.

The rising cost of health care is a burden for individuals and families, and it has a huge impact on our economy. The President and I feel strongly that medical liability reform will help reduce those costs. Frivolous, baseless lawsuits are driving up costs for doctors and insurance companies… and it's consumers who pay higher bills as a result. 

Association Health Plans would be another big step toward tempering the cost of health care. They would allow small firms to pool risk and pay lower premiums, increasing their ability to cover their employees, which can be very tough for small businesses to afford.

The price of energy has also been frustrating to consumers and business owners; I know that the cost of gas impacts everything you do, acting almost like a tax on your business or your income. The energy bill that the President signed this week should help to reduce our dependence on foreign oil, as well as encourage energy innovation and conservation, and that will be good for our economy over the long term.

The President has made clear his commitment to strengthen our economy further, and the energy bill was part of that. This commitment to continued economic strength also includes making his tax cuts permanent and reducing the budget deficit – as well as reforming Social Security and the tax system and reducing the burden of lawsuits and heavy-handed regulations on business. It's also important that we make health care more affordable for all Americans.

This agenda is ongoing, and we see results every day. For example, tight controls on discretionary spending and increased Treasury receipts – which are a result of economic expansion – have kept the government on track to cut the budget deficit in half by 2009. In fact, a mid-year budget report recently showed that we are ahead of schedule on that goal.

All of the strong economic indicators, and our ability to pay down debt, point to the fact that reducing the tax burden proved to be a successful economic stimulus. And when the economy is growing and spending is controlled, we can also reduce our deficit.

But the job of keeping our economy unencumbered is a never-ending one, indeed. From tax cuts to regulations, we need to work on it every day, and we need to work on keeping it strong for the future, for the long-term.

Reforming our Social Security and tax systems will address some critical long-term economic issues, and I believe that the strength of our economy puts us in a terrific position to achieve these long-term goals that are so important.

I'm excited about the President's leadership on simplifying our tax code. Because life – especially when you run a business like all of you do – is complicated enough without a tax code that is more than a million words long.

The President's initiative to study and re-vamp the tax code offers great hope for increasing economic growth and decreasing taxpayer headaches. The President's Advisory Panel on Tax Reform is working right now to come up with some options that will encourage growth and save Americans much of the time and headache that they currently spend complying with the tax code.

A few raw facts illustrate well the problems of our current code: American taxpayers and businesses spend an estimated $130 billion dollars in lost time and money trying to comply with our increasingly unwieldy tax code. That's $130 billion in resources that could be used to create jobs, invest in new business, or spur consumer spending. The $130 billion burden our tax code places on the American people is a drag on economic growth and an unnecessary weight for Americans to bear.

The President has asked that the fine people on the advisory panel be guided by the goals of increased fairness, simplicity and ease of understanding, and economic growth and job creation. He has also asserted that any reform proposal should carry on the good traditions of recognizing the importance of homeownership and charity in our society.

I look forward to receiving a report from the Tax Reform Panel in September, and sharing their recommendations with the President after that.

I'm also looking forward to the movement of legislation, on Capitol Hill, to strengthen and save our Social Security system. For those Americans 55 and older, the system won't change – it doesn't need to. It is solvent for current and near-retirees. It is the younger generations that need our action when it comes to Social Security.

I hope to see reform of the system that stops the practice of the government writing itself IOUs while spending your money on unrelated programs. The total amount of Social Security surpluses that have been spent on other programs is at $1.7 trillion today. I think it's time to put a stop to that, don't you?

That's why the President wants to let younger workers put their Social Security dollars in personal accounts – the ultimate "lock box" for their hard-earned retirement dollars.

We also need to make the program solvent. Progressive benefit growth, which would bring the program about 70 percent of the way to solvency, is another important element of the President's proposed changes. It would mean that the lowest income seniors would have the fastest-growing benefits while benefits for those who are more well-off grow more slowly, with protection from inflation.

Right now, we have an historic opportunity and an obligation to do these things, to save and strengthen the nation's retirement security system. The President's leadership, combined with our economic health, gives us the opportunity. The expense of waiting to act reminds us why this opportunity must be seized, of why we are obligated to do so. Waiting to fix the problem is terribly expensive, and I believe irresponsible considering that younger generations will be left paying the bill. Every year we delay permanently reforming the system, $600 billion is added to the shortfall - which, according to the non-partisan Social Security actuaries is $11.1 trillion on a permanent basis.

This is fascinating time in government history. Enacting real retirement security reforms this year - which I believe we will - holds great promise for generations of American workers and retirees. And simplifying our tax code could bring an enormous relief to every American who pays taxes. If done right, it should stimulate and strengthen our economy as well.

I'm extremely proud to be helping the President as we seek to achieve a safe and promising financial future for all Americans.

Thanks again; I'd be happy to take your questions now.

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