FROM THE OFFICE OF PUBLIC AFFAIRS

Good morning.  Thank you, Senator Smith, for that kind introduction.  It is a pleasure to join the Portland Business Alliance today.  After too much time in Washington talking about the economy, there's nothing more refreshing for me than meeting with the people who do more than talk, and actually make our economy happen - people who get out there, make decisions, and work every day.

I had a chance to do that with the President in Texas yesterday, and today it's Oregon.  We're traveling the country to get perspective on the economic recovery from outside Washington, to tell you about what we've been doing to support your efforts on the front lines, and ask what we can do better.

The past eighteen months have seen some tough times for the American economy.  We've suffered through a bursting stock market bubble, terrorist attacks on our financial and political capitals, and revelations of corporate fraud.  People have lost jobs, and some retirement accounts are in the dumps.  It's no wonder Americans are concerned about economic security.

President Bush had economic security at the forefront his agenda, before any of these shocks hit.  From the beginning of his Administration, he has embraced economic freedom and individual accountability as the foundation for continuing prosperity.  His economic plan creates jobs, improves education and expands opportunities to save and invest.

Our job in Washington is to protect and expand Americans' ability to create a better life for ourselves, our children, and our nation.  And we will not be satisfied until every American who wants a job has a job.

That's what we've been working on, and we have four significant accomplishments to show for it.  First, the President's historic tax relief program last summer reduced taxes for the average family of four by $1,040 a year. 

Then in March, he signed the Job Creation Act to stimulate investment in our economy - a second major accomplishment.  By the end of 2002, these two tax relief programs will have allowed the private sector to create an additional one million jobs with resources that would otherwise have gone to Washington.  Our estimates now show that without that tax relief, the recession would have been deeper, and the recovery slower.

Our third victory for the economy has been new standards for corporate accountability. These ensure that people saving for their future can get accurate information for sound investment decisions.  We are holding corporations accountable for telling the truth to investors and employees, so Americans can save for college tuitions and comfortable retirements with greater confidence.

And the most recent major accomplishment for our nation's prosperity is winning Trade Promotion Authority, which the President will use to open international markets to US exports, creating jobs here at home.  One in eleven working Americans - 12 million people - already work at jobs that depend on exports.  A stable, blossoming world economy, founded on freer trade, will expand exports further and will enhance our long-term prosperity. 

World competition also spurs American companies to higher levels of productivity and innovation, even as it reduces product costs and raises quality for American consumers.  Lower trade barriers work the same way as any other tax cut - by one estimate, reducing trade barriers by one-third would save $2,500 a year for every family of four in America.

Today, key economic fundamentals such as inflation, real wages, productivity, interest rates, business profits, and the housing sector are all strong because of the resilience and determination of the American people.   To a lot of folks out there watching, it doesn't feel like a recovery yet.  But the economists who study the numbers all say the recovery is underway. 

There's more to be done.  Since the attacks of September 11, the President has been asking Congress to enact terrorism risk insurance.  There are construction projects stalling out there because they can't get insurance protection against the risk of another attack.  We need to enact the President's energy plan to secure our economy against possible energy price shocks. 

And we need President Bush's Homeland Security plan, because the physical security of our nation is essential to prosperity.  The brief economic freeze immediately following September 11 demonstrated that reality all too well.  We are working with congress to complete the new Department of Homeland Security, which would better organize and deploy our resources toward preventing further attacks.

We'll also work with Congress to restrain wasteful government spending, because overspending in Washington burdens our economy with higher debts and taxes.  And the President has called on Congress to protect individuals' control over their 401(k) holdings without undue constraints from employers.  Your retirement nest egg is yours alone - you earned it, and you should have full legal rights to control it.   

As we emerge from the turbulence of last year's recession, we're gaining new perspective on the recent past, and we're applying that perspective to the decade still beginning.  In short, we are facing our problems, dealing with them as a nation, and moving forward.

The question for our new era is not whether we can or should continue the economic success we enjoyed in the 1990s.  The question is how leaders of business and government should incorporate the best aspects of the 90s - growth, productivity, and innovation - into the emerging decade, while actively working to make this new era a time of both personal responsibility and public integrity.  How can we reaffirm the link between value and values, and restore public confidence in American enterprise?

In my view, the answer is simple: honest, accountable leadership.  With leadership, everything is possible; without it, nothing is possible.  That is as true for American corporations, and the American government, as it is for developing nations in Africa.  In my experience, the example from the top becomes the model for everyone below.

In the economic domain, I believe the connection between creating value and affirming values in American business has always been strong.  Far away from the headlines, most business leaders, from mom and pop shop-owners to corporate chiefs, have always treated their shareholders and employees with honesty and fairness.  Today, however, doing your job with competence is not enough.  Leaders must stand up and set an example not just for their employees, but for the general public as well.  Honesty in business is the new patriotism.  There is nothing better business leaders can do for this country right now than restore faith in the system that has made it great.

Let me give you an example from when I served as Chairman and CEO of Alcoa. 

Over the course of my career in business and with the government, I have come to believe that people everywhere need three things to be happy in their jobs.  Each person needs to be treated with dignity and respect at all times; Each needs the tools to make a meaningful contribution to his or her organization; and each person needs to be recognized for the contributions that he or she makes.  With that in mind, my first priority at Alcoa was to improve safety for all our 55,000 employees.  Not just improve it - I wanted to make it perfect.  I didn't have a profit calculation in mind - I just knew it was the right thing to do.  Workplace safety is a key element of treating people with dignity and respect. 

By 2000, when I retired, our injury rate was one-tenth of what it was in 1987.  And as we improved safety, we nearly tripled in size, creating thousands of new jobs and increasing shareholder value from $4 billion to $32 billion. 

We didn't do that by managing quarterly earnings, abusing tax rules or playing accounting tricks.  Anyone who tried to sell me on those games twice was out of a job.  We did it by focusing on our people, making sure they had the tools and incentives to get their jobs done right, and done safely.  And when people have those tools and incentives, they can do anything.  We focused on the fundamentals: creating value and producing results.  The rest followed.  That's the truth in every company, and that's the truth in our economy.

President Bush's economic policies parallel the rules I applied at Alcoa.  We are focusing on the fundamentals, because, given the right tools, the American people produce results.  They always have.  And as President Bush has said, we trust the American people, which means strengthening and expanding economic freedom, and treating them with the respect and dignity they deserve. 

The President's policies for further reducing and simplifying taxes, strengthening security, expanding trade, and restraining the growth of government will ensure that Americans have the greatest possible opportunity to live the lives we dream of: pursuing our chosen professions, owning a home, raising our children to be happy and successful, engaging in our communities, and attaining financial independence.  Working together, we can make that a reality.

Thank you.