FROM THE OFFICE OF PUBLIC AFFAIRS

September 28, 2004
js-1966

Remarks of Treasury Deputy Secretary Samuel Bodman
before Wheeling Rotary Club
Wheeling, West Virginia

I know that this community has suffered through a difficult period over the last few weeks with the terrible storms and flooding brought by Hurricane Ivan.  I understand that the damage has affected homes and businesses in Wheeling and throughout this area.  And I want you to know, speaking on behalf of the Bush Administration, that our thoughts, prayers and support are with you as you assess the damage and rebuild. 

And so, I particularly appreciate the effort you have all made to be here today.  Having spent most of my life in the private sector – before I went to Washington to become a professional meeting attender – it's always a pleasure to be among colleagues from the business community.  I just had the chance to visit a local business here, in fact – Valley Cheese, owned by Janet Richardson, just down the road.  Valley Cheese, like so many businesses here in Wheeling and across this state, represents a critically important part of our economy: the small business sector. 

It's hard to overstate the importance of small businesses to our economy – and to our job base in this country.   Small businesses create two-thirds of new private sector jobs in America, they employ more than half of all workers in this country and account for more than half of the output of our economy. 

Even more than that, small businesses are agents for change, forcing the country to new productivity levels and radically transforming whole industries.  Collectively small business is an engine of innovation, converting new ideas and technologies into real products and services, sold to real customers in real markets, and creating real jobs.  Starting a business and growing that business and creating a better, more prosperous life for your family and for your employees is not just the dream of a few.  It is the American dream.  And we see evidence of it here in Wheeling, across the state, and around the country.

No one understands this better than President Bush.  He believes that we should make it easier for small business owners to succeed.  And that is why entrepreneurs and small-business owners are at the heart of his economic policies.

Over the past several years, President Bush, working closely with Congress, has provided tax relief that directly benefits small business owners and their employees.  In 2004, 25 million small business owners will receive tax relief totaling about $75 billion.  The President's tax packages reduced marginal income tax rates across the board, benefiting the more than 90% of small businesses that pay taxes at the individual income tax rates, not the corporate rates. 

And importantly, the President's tax relief raised the amount that small businesses can expense for new capital investments – to $100,000, from the previous $25,000 – reducing the cost of purchasing new machinery, computers, trucks, and other qualified investments.  About 110,000 business taxpayers here in West Virginia are benefiting from the President's tax relief – using the tax savings to invest, hire additional workers, and increase pay. 

Because of President Bush's leadership on pro-growth policies, we are seeing very real and positive results for American families and American businesses.  We are on the right track. Our economy is growing, continuing at a solid pace in the second quarter after an exceptionally strong performance in the previous four quarters, when the economy grew 5%, the largest gain in nearly twenty years.  

More Americans than ever before own their own homes.  And across the nation, people are finding new jobs. The economy has posted job gains for each of the last twelve months – creating nearly 1.7 million jobs since August of 2003.  The national unemployment rate is at its lowest rate since October of 2001 and it is below the average of the 1970s, 1980s, and 1990s. 

But, while there is a lot of good news to report, we all know that there is more work to be done to make sure that our economy stays on a sustained path of growth and job creation.  When President Bush took office, he inherited an economy in steep decline. We were then shocked by horrific terror attacks. Our economy took another blow as a result of corporate scandals that shook investors and employees.  I know that this state – and the manufacturing sector in particular – felt the pain of that downturn.  But – to no one's surprise – West Virginians, like all Americans, are coming back strong.  In West Virginia, you have seen increased job gains over the past year – with the unemployment rate down from 6.4% last summer, to 5.5% this summer.  While that's good news, we are not satisfied.  The President remains concerned about people who have lost jobs, and getting them back to work is a top priority for him, for me, and for the entire Administration.

What's the best way to do that?  Well, everyone in this room knows that the government doesn't create jobs and wealth in this country, people do. The private sector does – all of you who are here representing the business community.  The President believes, and I certainly share this view, that in order for you to do what you do best – grow your companies and create good jobs, we must make sure that you are not unduly burdened by unfair levels of taxation and regulation.  In other words, we need to stay out of your way.

We have got to keep tax rates low for small business owners and families.  The President knows that raising taxes will hurt economic growth and job creation and that is why he has made tax relief permanence a top priority. The President is very pleased that Congress acted just last week to extend marriage penalty relief, the $1,000 child tax credit, and the broader 10 percent individual tax rate -- which would otherwise expire this year and raise taxes on nearly 94 million Americans.  These extensions will give families and small businesses added certainty to plan for the future and will keep us on the path to greater prosperity.  And the impact will be felt right here in West Virginia.  For example, the expanded child tax credit benefits more than 150,000 families in West Virginia.

Another key priority is affordable high-quality healthcare.  Providing adequate, affordable healthcare for employees is a challenge for many small businesses – here in West Virginia and across the nation.  And so the President has worked to make health care more affordable. 

The President has called for Association Health Plans, which would allow small businesses to band together and negotiate on behalf of their employees and families.  These plans would help small businesses and employees obtain health insurance at an affordable price, much like large employers and unions.  

And, the President has also signed into law health savings accounts (HSAs), which combine low-cost, high-deductible health insurance with tax-free savings accounts that allow families to pay for health care expenses and save for future medical needs. 

Another way to control health care costs is to control frivolous law suits – lawsuits that are not only driving up costs for American businesses, but are driving good doctors out of medicine.  The President is pushing Congress to enact fair and reasonable medical liability reform.  Congress also must adopt a National Energy Policy to ensure that America has a reliable and affordable source of energy and to reduce our dependence on foreign sources.  And we must continue to streamline regulations and reduce paperwork to ensure that federal regulations do not unduly handicap America's entrepreneurs. 

The bottom line is pretty simple: We must continue to create the right environment for American businesses to flourish and prosper. 

Before I wrap up, let me say on a personal note that it is a great privilege to be here representing the Bush Administration.  I've had the privilege to serve as the Deputy Secretary of two Departments – the Commerce and Treasury Departments – over the past 3 ½ years.  And that has given me the great opportunity to work with many fine civil servants and also to see President Bush in action – working day in and day out to make our nation safer and strengthen our economy.  Time and again, he has proposed concrete policy actions to confront the difficult issues that this country faces that are at once broad in their reach and deep in their impact.  As he so appropriately said in the first months of his presidency: "We are here to make progress, we are not here to mark time." 

Whether it is waging the war on terrorism – a global war to destroy terror networks wherever they operate and to cut off their sources of support and funding; or reforming the government to protect us at home with the creation of the Department of Homeland Security – the most extensive reorganization of the federal government since President Truman; or making sure that every child in this country is educated in a school system that sets high standards and is accountable for achieving results; or modernizing Medicare for our nation's seniors – this Administration has been defined by a willingness to propose – and, even more importantly, by a determination to bring about – bold actions to improve our security, our economy, and the quality of our lives.  Even in the face of challenges, the President's resolve is firm and will not waver.

Again, it's a pleasure to be here today. Thank you for having me.