Remarks at the Midwest Airlines Center in Milwaukee, Wisconsin

Thanks for coming. Thanks for the warm welcome. It's nice to be back in Milwaukee. Today I'm going to talk about some of the challenges which face our country and why I believe our country can overcome any challenge we face.

One of the reasons I'm optimistic about the future of our economy is because of the entrepreneurial spirit of America, the entrepreneurial spirit that is strong in Milwaukee and in the great State of Wisconsin, the fact that there are people who are risktakers and job creators and people who, like me, see a better future for those who are looking for work. I'm here to herald the small businesses which are the strength of the economy of the United States of America.

I want to thank Tim for inviting a few of his friends here today. [Laughter] Thanks for coming out. Thanks for your leadership, Tim. I appreciate your willingness to give me a chance to talk about our country.

I traveled today with a man who you trained well, a person who serves in my Cabinet in one of the most difficult jobs of all, Secretary of Health and Human Services. He represents our country with class and distinction, and that is Tommy Thompson. Where's Tommy? There you go. [Applause] Let us not get carried away. [Laughter] You know him well. He's a good guy.

Today I also had the privilege of flying from Washington to Milwaukee with three members of the congressional delegation from the great State of Wisconsin, Jim Sensenbrenner, Tom Petri, and Paul Ryan. These are fine—[applause]. We had a great visit on the plane. There is no air raids on Air Force One, by the way. [Laughter] And it's a chance for us to talk about issues of concern. And one thing is clear: The three love the State of Wisconsin, and they represent you well. And I'm proud to call them friends, and I enjoy working with them. I enjoy working with them to try to change the tone in Washington, to elevate the discourse, to get rid of needless politics and partisan bickering and focus on the people's business. They understand what I'm talking about, and they're good, strong leaders.

I want to thank the members of the statehouse who have come today: Jack Voight, who is the State treasurer; Mary Panzer, who is the State senate majority leader; Steve Foti is the State assembly majority leader. I want to thank you all for coming as well. A lot of local officials here, starting with Scott Walker of—the county executive. The sheriff is here, David Clarke. I want to thank everybody else for coming too.

Today when I landed, I met a fellow named Roy Bubeck. You don't know Bubeck at all, and I didn't either—maybe some of you do. The reason I herald him is because he is a soldier in the army of compassion. He's one of these kind citizens who has decided to make a difference in other people's lives. A lot of times we talk about the strength of America, and people automatically think about maybe the size of our wallet or the strength of our military. No, the strength of our country is the fact that we've got fantastic citizens who hurt when somebody hurts, who worry when somebody needs help.

Roy runs Badger Mutual Insurance Company. He understands that he employs a lot of really decent folks who care about the community in which they live. And he's assumed his responsibility as a CEO in this way: He offers paid leave to employees to go out and help in a neighborhood. He's encouraged people in his company to mentor a child. He's encouraged people to go tutor, so that if a child is having trouble learning to read, he or she can succeed in life. What I'm telling you is, he is encouraging people of compassion by providing leave for those folks from their business.

No, the strength of this country is the fact that when communities all across America, when we find somebody who hurts, there is some good soul willing to stand up and say, "I love you." America's greatness is the heart and soul of the American people.

And I want to thank Roy for his leadership and encourage others who are CEOs in corporate America to encourage those who've heard the call to love a neighbor like you'd like to be loved yourself to do so by good corporate policy.

I said we had faced some challenges. I want to review some of the challenges we faced. If we can summarize the obstacles we overcome, you'll see why I'm such an optimistic person, because we have overcome a lot as a nation.

First of all, the market—stock market began a decline in March of 2000. That affected a lot of citizens, because we are slowly but surely becoming an ownership society in America. More and more people are owning equities or bonds as a result of 401(k)s or pension plans. A stock market decline affects people. They affect their pocketbooks. They affect their—obviously, their wealth, and the market began a decline. In early 2001, we had a recession, three quarters of negative growth. In other words, our economy was not doing very well.

We acted, and Congress—with the Congress, we acted by passing tax relief. And by far, the vast majority of economic historians would say that as a result of the tax relief, the recession was shallow, because we started coming out after three quarters.

Some have said, "Well, maybe the recession should have run its course. Maybe it should have been deep, and you shouldn't have had the tax relief." My concern is about the people who are looking for work. You see, I'm not worried about the numbers. What I am worried about is the lives affected by recession. Shallow recession was good because fewer people were laid off, fewer people hurt, fewer people were worried about their future.

Things started getting going okay, though. And then we were attacked on September the 11th, 2001, and that hurt us. It hurt the economy, but it hurt our psyche as well. See, for—we grew up in a time when we thought oceans could protect us, that there may have been threats overseas, but we could pick or choose which threats to deal with because we were invulnerable here in America. And that changed on that fateful day. All of a sudden, it became apparent to all of us that an enemy could hurt us at home, an enemy that hates what we stand for.

Our security became threatened. We had a new responsibility in Washington, DC, and at the State level and at the local level to do everything we can to secure the homeland. We have a new charge to keep. September the 11th not only affected us in the pocketbook; it changed the strategic vision of our country, that we just couldn't see threats gathering overseas and ignore them, that we had to deal with them before they came to hit us.

The realities of September the 11th changed the way America must view threats. I vowed on September the 11th— after September the 11th, that I would do everything in my power, with a great country, to hunt down those who killed Americans, plotted against Americans, and bring them to justice. And that's exactly what we are doing.

Thanks to a lot of brave Americans and coalition friends, we're dismantling Al Qaida, person by person. Doesn't matter how long it takes, we will complete the job for the security of our country. I also put a doctrine out after September the 11th, 2001, that said, "If you harbor a terrorist, if you house a terrorist, if you feed a terrorist, you are just as guilty as the terrorists," and we upheld that doctrine.

We upheld that doctrine in Afghanistan. The Taliban was a regime which allowed for the Al Qaida to train. It gave them safe haven. At the same time, by the way, they were one of the most barbaric regimes in the history of mankind. The United States led a coalition to not only uphold that doctrine but to free the people of Afghanistan. We believe strongly in this country that freedom is not America's gift to the world. We believe strongly that freedom is God's gift to every individual in the world.

Thanks to the United States and our coalition, the Afghan people are free from the Taliban, America is more secure, and young girls—many young girls for the first time now go to school. We not only acted to make our country more secure, to do our duty to deal with threats or the potential threats, but at the same time we freed people.

We took action in Iraq as well. I made it clear that we wanted to work with the international community; we want to enforce the United Nations resolutions that time and time again had called for Mr. Saddam Hussein to disclose and destroy weapons of mass destruction. He ignored the world. He chose defiance. He is no more, and the world is a better place because of it.

Yesterday, Dr. David Kay and his team reported to the Congress about 3 months of investigations into the regime of Saddam Hussein and his weapons programs. It's an interim report. By the way, it was completed under incredibly difficult circumstances.

Let me tell you what the report said. It states that Saddam Hussein's regime had a clandestine network of biological laboratories; they had a live strain of deadly agent called botulinum; that he had sophisticated concealment efforts—in other words, he's hiding his programs—that he had advanced design work done on prohibited long-range missiles.

The report summarized the regime's efforts this way, and I quote Dr. Kay, his report: "Iraq's WMD programs spanned more than two decades, involved thousands of people, billions of dollars, and it was elaborately shielded by security and deception operations that continued even beyond the end of Operation Iraqi Freedom." That's what this man stated in his report. That's what the report said.

Specifically, Dr. Kay's team discovered what the report calls, and I quote, "dozens of WMD related program activities and significant amounts of equipment that Iraq concealed from the United Nations during the inspections that began in late 2002." In addition to these extensive concealment efforts, Dr. Kay found systematic destruction of evidence of the illegal activities.

This interim progress report is not final. Extensive work remains to be done on his biological, chemical, and nuclear programs. But these findings already make clear that Saddam Hussein actively deceived the international community, was in clear violation of United Nations Security Council Resolution 1441, and was a danger to the world. The world is a better place when we got rid of Saddam Hussein.

We have more work to do in Iraq. A free Iraq, a peaceful Iraq will help change an area of the world that needs peace and freedom. A peaceful Iraq and a free Iraq is part of our campaign to rid the world of terror. And that's why the thugs in Iraq still resist us, because they can't stand the thought of free societies. They understand what freedom means. See, free nations are peaceful nations. Free nations don't attack each other. Free nations don't develop weapons of mass destruction. There will be a free and peaceful Iraq. What's taking place in Iraq is the evolution of a society to be democratic in nation—nature, a society in which the people are better off.

I met with Bernie Kerik this morning in the Oval Office. He was a former police commissioner in New York City. He was charged with going to Baghdad to help the Iraqis develop a police force. When he got there, there was no police force. The place was in shambles. And in a very quick period of time—remember, we've been there for about 4 months-plus—he helped develop a police force. Over 37,000 Iraqis now are patrolling the streets of Baghdad to make it a safer place.

The reason I bring this up is, we'll work hard to bring the thugs and terrorists to justice in Baghdad. We would rather fight them there than our own streets. But eventually, Iraq will be safe and secure because the Iraqi people have made the decision to live a peaceful and free life. And it's happening. It's happening every day. We will stay the course. We will not be intimidated by thugs who are trying to create fear and the conditions for us to remove. A free Iraq is essential to making sure that America and the future generations of America are able to live in peace and freedom.

No, the attacks of September the 11th and the march to war leading up to the Iraqi excursion affected the psychology of the country. We had a recession, and we had the attacks, the national emergency, plus the march to war. But we're a strong country. We're a resilient country because the entrepreneurial spirit is strong, and things seem to be okay.

We also had another hurdle to cross, and that is we had some corporate CEOs that forgot their responsibility to our society. They didn't tell the truth. They didn't tell the truth to their employees and their shareholders. They failed to uphold the high standards expected in America. And therefore, they're going to pay the price. We expect people in positions of responsibility to behave responsibly and to tell the truth.

We passed tough laws. I want to thank the Congress for working on those laws. And we're holding people to account. By far, the vast majority of people in corporate America are honest, decent folks. But we need to send a signal that we expect honesty throughout our country.

And then the country wasn't—Government wasn't—the economy wasn't growing like we wanted, and so I called Congress back into action one more time on tax relief, historic tax relief. We passed tax relief. It's based upon this theory: When somebody has more money in their pocket, they're more likely to demand a good or a service. And in our society, when you demand a good or a service, somebody is going to produce the good or a service. And when somebody meets that demand with production, it means somebody is more likely to be able to find a job. The tax relief we passed, letting people keep more of their own money, is an essential ingredient to making sure people can find work in America.

So we expanded the child credit from $600 to $1,000 per child and worked with Congress to get that extra $400 per child paid out to families this summer. The check was in the mail, and it actually got to you, I hope.

We reduced the effects of the marriage penalty. What kind of Tax Code is it that discourages marriage? It's a Tax Code that needed to be changed. We cut the taxes on dividends and capital gains to help encourage investment and savings. This action particularly helped many seniors, because a lot of seniors rely upon investment income to live on. And as a positive effect, it also helped with capital formation.

We reduced the taxes on everybody who pays taxes. We didn't pick or choose. Everybody who pays taxes will get a reduction.

This is an important part of the tax relief plan, what I just described, the reduction of taxes on everybody who pays, because it has a incredibly positive effect on small businesses. Cutting the individual tax rates has got an effect on small businesses, because most small businesses are Subchapter S corporations or sole proprietorships, which means they pay tax at the individual tax rate.

It's very important for our countrymen to understand that part of the tax relief plan. Two-thirds of those who pay the top rate in our Tax Code, individual Tax Code, are small-business owners. Seventy percent of new jobs in America are created by small businesses. It seems to make sense, if you're trying to create new jobs, to allow small businesses to keep more of their own money. If 70 percent of the new jobs in America are created by small business, and by reducing all tax rates puts money into small-business' pockets, it seems to make sense that people ought to be supporting the tax cuts all across America.

The tax relief plan meant more capital in the pockets of the small-business owners, which means somebody is more likely to find a job, and that's what we're here talking about. We care about our fellow citizens. We want to make sure somebody who is hurting has a chance to succeed in life by working. We also encouraged investment to small businesses by increasing the annual expense deduction of investments from $25,000 to $100,000. See, that encourages people to buy a piece of equipment, for example.

Today I met with three businessowners here from the Milwaukee area. I met with Al Hentzen. Al has got a—what he calls a general industrial business. It provides paints and coatings for industry. He's been in business 80 years. He explained to me that the tax relief plan that we passed encouraged him and helped him add 12 new employees this year. Now, you see, there's a lot of Als all across America. If the plan helped Al, there's no telling how many other people made the same decision Al did. You add 12 here; you add 12 there; you add 50 here; and all of a sudden, people are finding work. Small businesses create 70 percent of the new jobs. The tax plan we passed encouraged Al, Al Hentzen, to add 12 new employees this year, and he's optimistic about adding more next year.

Al Hentzen says, "We're not putting tax relief back into our pockets." This is what the leader of this small business or me-dium-size business says: "It goes right back into the company, whether in new people or in machinery." And you see, when Al and his company decides to buy a machine, somebody has got to make the machine. And that means somebody in the machine-making company is more likely to find a job as well. When Al makes a decision, he increases demand for a product. That demand for that product will be met in our marketplace. The more demand there is for a product, the more likely one of our citizens is going to find work.

I talked to John Stollenwerk today. He runs Allen-Edmonds. I happen to have one of his products on my feet. [Laughter] You probably think this is a gross pander— [laughter]—but I wear John Stollenwerk's products nearly every day, except when I'm running. [Laughter] He makes a great product, one of the world's finest shoes.

He bought the company 20 years ago. He made the conscious decision to fix it up to make the right decisions so he could keep people working here in Wisconsin. He says, "Not only am I successful because of the products we make, but I'm successful because of the people that work with him." I appreciate that attitude. See, there's a company CEO that focuses on his employees and understands that without good employees, he's not going anywhere.

He bought a million dollars' worth of equipment because of the incentives we put into the tax package. That's a million dollars of purchases in the marketplace. Somebody is meeting the demand for that million dollars' worth of equipment. He says, "I will take the money and invest it." This is the money that he has saved from the tax relief plan. He's a Subchapter S corporation. They pay taxes at the individual rates. When we cut the individual rates, he ends up with more cashflow, plus the incentives on the investment side. He says, "I will take that money and invest it and spend it, and I will do it more efficiently than the Federal Government could."

Big John Weise is with us today. I say "Big John" because he's a big guy. [Laughter] His business is called F. Barkow, Inc. He helps get glass windows safely to factories and construction sites. This company has been doing this for 125 years. They have gone from horse-drawn carriages to now make products for trucks to move glass.

He told me that as a result of the tax plan passed by the Congress, now in effect, that he is going to purchase a turret press to replace the one that his company has had in place since 1971. Somebody is going to make that turret press for him. There's somebody who's getting a job because John has decided to make an additional purchase because of the tax relief plan.

As well the new turret press—a 1971 press may be a good press, but it's not going to be as good as one manufactured 34 years later or 33 years later. See, technology is changing. When he gets the new press, it's going to make him more productive. And as a more productive company, it means he can compete better. So not only is the decision he made good for the turret manufacturer, it's good to making sure his company can stay competitive, so he can compete. We have a competitive marketplace.

New investment helps our owners and our companies compete. That's what we want. We want open competition. It's good for consumers. It's good for America that we compete. This tax relief helped him a lot, and it helped him make a lot of good decisions. He wants a new forklift, two new welding machines, a metal cutter. In other words, the tax relief increased demand. It's helping him make his company more productive. But the people who are making the products for John's company are also likely to find work.

No, the tax relief we passed was necessary for economic vitality. If you're interested in job creation, you need to support this tax relief that we passed. You wonder why I say, "Support it," because I'm going to tell you a little later on, it's fixing to go away unless we do something about it. But in the meantime, I do want to share with you the fact that there is some positive signs that we're growing. Inflation is low. After-tax incomes are rising. Homeowner-ship is near record highs.

That's great, by the way. We want people owning things in our society. You know, America is better off when we're an ownership society. If you own something, you have a stake in the future of our country. We want people from all walks of life owning a home. We have a minority home-ownership gap in America, and we've got to do something about it. And I've submitted a good, solid plan to the United States Congress, and I hope they act on it. We want more people owning things in America. Productivity is high. In other words, our workers are incredibly efficient. We've got the best workers in the world, and our productivity is high.

Today there was a report on unemployment which shows that we added 57,000 new jobs in America. It's the first time that's happened in 7 months. Things are getting better. But there's still work to do. A lot of Wisconsin manufacturers hurt. It's tough sledding, tough times, and I understand that. We've got manufacturers in a lot of parts of our country that are lagging the rest of economic vitality. It's a slow sector. And what I'm about to describe to you is what more we can do to not only help our small businesses but help our manufacturing sectors to create the conditions so the manufacturing sector can compete and survive and succeed.

First, Washington must put good forth— good policies forth that will help small businesses deal with health care costs. Health care costs are on the rise. It affects a lot of small businesses. It makes it tougher to cashflow and to be positive and optimistic. One of the things I think we need to do, and I think it would make a big difference, is to allow small businesses to band together and to pool their risks, called associated health care plans, so that they can have the same purchasing power as big companies have. One way to help small businesses control costs is for Congress to pass the associated health care plans. I strongly support them. I think they're necessary.

And as well in order to help control costs, we need medical liability reform. I have analyzed, or had analyzed for me, what all these lawsuits—[laughter]—I delegate. [Laughter] Let me start over. [Laughter] People on my staff—[laughter]—looked at the cost of preventative medicine. [Laughter] You see, there's a lot of lawsuits flying around which caused some docs to quit practicing medicine, which makes medicine less available, and some docs to practice preventative medicine so that if and when they get sued, they can say they did everything possible in order to protect themselves from lawsuit. That drives up the cost of medicine. It costs our Federal Government billions of dollars. The practice of practicing preventative medicine costs the Government billions, which drives up the cost of Medicaid and Medicare and veterans health costs.

Therefore, I've concluded that medical liability is a national problem that requires a national solution. I've submitted a good plan to the Congress. I want to thank the three Members here who supported medical liability reform in the House. It is stuck in the Senate. These Senators must under-stand—that are holding up this bill—that medical liability reform is necessary. It's good for our small-business sector, which will be good for job creation. It is good for American consumers. No one's ever been healed by a frivolous lawsuit.

We need to do something about class-action lawsuits as well. We've got a system today where people are able to shop a class-action lawsuit for a sympathetic jury in the State courts, even though this is Federal in nature. In other words, they cross jurisdictional boundaries. They're shopping it, who can find the best jury. And then the lawyers get all the money, and the people damaged don't. It's a system that needs reform. There's a good bill that has passed the House of Representatives. It is stuck in the Senate. It's action that would allow class action and mass tort actions to be tried in the Federal courts. And the other reform is to let the people who have been harmed to get the money and not the lawyers. We need class-action reform, for the sake of job creation. We need tort reform at the State level, for the sake of job creation as well.

We need a national energy policy. The manufacturing sector needs a reliable supply of energy. The uncertainty that comes with an antiquated electricity grid is difficult on the manufacturing sector. The manufacturing sector consumes a lot of energy, and therefore this Nation needs a national energy plan. We need to use our technologies to conserve better. We need to use our technologies to help develop new sources of energy. I mean, I'd like to be growing our way out of an energy crisis. We need ethanol. We need biofuels. But we also need to make sure we emphasize clean coal technology. We've got a lot of coal. We've got technological know-how. We've got to make sure that the Congress passes a national energy strategy that utilizes the resources at hand. What I'm telling you is, for the sake of economic security and for the sake of national security, we need a national energy strategy so we become less dependent on foreign sources of energy.

Fourthly, we need less regulation on small businesses. And regulation ties up all kinds of time that could be used for productive uses for meeting demand. We're working on it at the Federal level. I've streamlined tax reporting requirements recently for America's small businesses. The way we calculate it is, is this year, 2.6 million small-business owners will save 61 million hours as a result of tax simplification. That's 61 million more hours that will go to help the company compete. Some regulations are necessary; over-regulating is not necessary. And it puts enormous strain, particularly on the small-business sector in America.

Fifth, we've got to have free trade policy that includes fair trade. See, I believe if you're good at something, you ought to promote it. I want Wisconsin's farmers selling their product overseas. Allen-Edmonds sells 25 percent of their goods overseas. We need to be knocking down trade barriers so we can sell our products to other people. We also have got to make sure other people treat us fairly. Our manufacturing sector needs to be fair—treated fairly.

So we've been talking to countries about currency policy to make sure that the currency policies of a government don't disadvantage America. Fair trade means currency policies is fair. The manufacturing sector is concerned about the playing field being level. This administration will work to level that playing field. We can compete with anybody. We just expect the rules to treat us fairly.

Finally, this tax relief plan I described to you needs to be permanent. You say, "Why isn't it permanent?" Well, that's Washington. [Laughter] You see, in order to get it out of one of the bodies there, they had to make the tax relief temporary. We got rid of the death tax, it looked like, which is important for small-business owners and Wisconsin's farmers and because we—see, we don't believe it's fair to tax a person's assets twice. If you're working all your life to build up your small business and you want to leave it to whoever you want to leave it to, they shouldn't—that asset shouldn't be taxed twice, shouldn't tax your income when you're making money, and shouldn't tax it when you pass it on to your son, daughter, whoever you want to pass it on to. It doesn't make—we're working with the Congress to get rid of it. It's nearly got rid of, but because of a quirk in the rules in the Senate, it will come back in 2011. It's kind of hard to plan, isn't it? [Laughter] You kind of phase it out, and it pops back up.

The child credit, which has gone from $600 to $1,000, falls back to $700 in 2005. The Government giveth—[laughter]—and Government taketh away. Marriage penalty begins to scale back up. A family of four making $40,000 income will go up $922 in the year 2005.

My point to the Congress is that people who invest capital in the small-business sector need certainty in the Tax Code. People who are planning for the future need to know what the rules are going to be in the future. And the idea of passing tax relief which is here one day and gone tomorrow is not good for economic recovery. For the sake of job creation, we need to put certainty in the Tax Code. All the tax relief we passed must be permanent.

You will hear all kinds of reasons to raise taxes. One of them will be the deficit. Yes, we have a deficit. Half the deficit is caused by the fact that our country went into recession. When you go into recession, there's less revenues coming into the Treasury.

About a quarter of our deficit was caused by the fact that we're at war. And when we put our troops into harm's way, when we ask a lot of our young men and women to sacrifice for our freedom and our security, they must have the best pay, the best equipment, and the best possible training. We will spend what it takes to support our troops, and we will spend what it takes to defend the homeland.

About a quarter of the deficit came because we passed back taxes to the people, actually passed back your own money. And that was necessary to get the economy going. If half the deficit was caused because we lost revenues, it seems to make sense that we want to crank up the economy so we get those revenues back, the revenues come back in the Treasury. No, one quarter of the deficit was caused by the tax relief necessary to stimulate economic growth, the tax relief that also was necessary to make sure the recession was not so deep, that it didn't hurt people.

So we have a deficit. The best way to solve the deficit—and I have submitted a budget to the Congress which will cut the deficit in half for 5 years—is to keep in place the economic vitality package and to hold the line on unnecessary spending in Washington, DC, is to bring much needed fiscal discipline to our Nation's Capital.

Now, we've been tested. This country has been tested. Two-and-a-half years, a lot of circumstances has tested our resolve and our character, and we met that test. This is a strong nation.

We're not going to be intimidated by thugs and killers. They don't understand our Nation. Those who attacked us thought we'd fold tent and kind of file a lawsuit. [Laughter] They just don't understand the resolve. They don't understand the courage of our military. They don't understand our will to do our duty, which is to protect the American people.

We're a strong nation. The entrepreneurial spirit in this country is really strong. We've got people who put that sign out there, say, "The American Dream is meant for you, that if you want to own your own business, get after it." Government's role is not to create wealth but the conditions in which the entrepreneurial spirit can flourish.

You're welcome to the American Dream, no matter who you are or where you're from. The entrepreneurial spirit is strong, and that's what's going to lead this recovery. The people are going to be able to find work because the small-business owners of America are risktakers, bold thinkers, and love their country, and are willing to expand the job base.

No, the spirit of America is strong. There are thousands of our citizens who, when they see somebody who hurts, are loving them, like I said earlier. There are people, when they see the hunger—hungry, provide the food, when they know somebody is homeless, provide the shelter. There are people who are helping little children understand what is necessary to learn to read. There are drug addicts who suffer. Yet there are great faith-based programs in America who are helping to heal hearts first and then change habits. The faith of this country—[applause]. We're a strong country because of our values. We believe in justice, we believe in human dignity, and we believe in freedom. And it is such an honor to represent this great land.

May God bless you all, and may God bless America. Thank you all.