Remarks by the Vice President at the National Automobile Dealers Association 2006 Legislative Conference

Capital Hilton

Washington, D.C.

9:16 A.M. EDT

THE VICE PRESIDENT: Morning. (Applause.) Thank you. Thank you all very much. It's great to be here today and to welcome all of you to the Nation's Capital. I thank Phil for his kind introduction. And those of you, of course, who know the layout in Washington realize this hotel is very close to the White House. In fact, it's an easy five-minute walk, but in honor of America's auto dealers, we drove this morning. (Laughter.)

And I want to thank Phil Brady. He does a great job for your association, an old colleague of mine. And I appreciate his invitation to join all of you today. I also want to recognize Dave Gribbin. Phil mentioned Dave. Dave and I grew up together in Casper, Wyoming, went to high school together, and served together in many capacities over the years. But it's great to see him here this morning, as well, too. And, of course, he got his early training at NADA, which is where I found him. So we're delighted to have him join us today.

Automobiles in our day, when we were going to high school, were nothing like the engineering wonders we see today. Dave might recall the first car I ever owned. It was a 1949 Chevrolet, which I drove with not much skill but plenty of enthusiasm. (Laughter.) It had a lot of power. As I recall, I could pretty much pass anything on the road except the filling station. (Laughter.) My first car was in steady service right up to the moment where the engine blew and I got $25 for the radio. (Laughter.) And that wasn't because it was a Chevrolet. It was because it had a couple hundred thousand miles on it when I got it.

That sort of thing, of course, doesn't happen much anymore. The vehicles that are sold and serviced by America's auto dealers are marvels of design, performance, and reliability, and all of you are rightly proud to work in this industry. You're part of the reason America remains among the strongest economies in the world. So it's a pleasure to be in the company of new-car and truck dealers from coast to coast -- and I bring good wishes to all of you and the members of your association from the President of the United States, George W. Bush.

In the hundred years since the first automobile franchises opened, the dealership industry has become one of the powerhouses of the American economy -- generating some 20 percent of all retail sales in the country. You stand out, as well, for the kind of hours you put in. If you sell cars and trucks, or if you work under the hood, or at a parts window, chances are you're there a lot of nights and weekends -- and Americans admire that work ethic.

Your industry also represents the highest values of the free enterprise system. America wouldn't be the same country if it were not for entrepreneurs like you, who invest in their home towns, offer career opportunities to fellow citizens, and give time, money, and effort to civic projects from the chamber of commerce to little league baseball. You've been generous in charitable contributions, especially toward victims of Hurricane Katrina and the survivors of 9/11. You're good citizens -- patriots, veterans, and civic leaders who proudly fly the flag and support the men and women of the United States military.

I know this is your annual legislative conference, and as a former member of the House, I can say it's always good for Congress to have occasional visitors from the real world. The purpose of public office is to meet responsibilities, and all of us in Washington need to remember that we're here to get things done, to solve problems, not simply pass them on to the next generation, and to stand accountable for the work that we all do.

We have a responsibility to keep this economy strong and to recognize the basic role of government in a free society. Nobody can sit in an office in Washington, D.C. and decide to create prosperity. What we can do, and must do, is to create an environment in which consumers have the confidence to spend, savers have the confidence to save, and entrepreneurs have the confidence to invest and expand their businesses and hire new employees. And one of the surest ways to create that climate is to leave as many resources as possible in the hands of the people themselves.

For that reason, at the start of this administration in 2001, President Bush asked Congress to pass significant, broad-based tax legislation. And the House and Senate, with bipartisan majorities, responded with historic pro-growth legislation. We reduced taxes for every American who pays income taxes. We doubled the child tax credit, reduced the marriage penalty, created new incentives for small businesses to invest. The Bush tax relief that we passed has left more than $1.1 trillion in the hands of workers, investors, small businesses, and families. And they have used those resources to fuel more than four years of uninterrupted economic growth.

Another crucial decision we made was to reduce taxes on dividends and capital gains. These cuts were designed to lower the cost of capital, to encourage businesses to expand and to hire new workers. They were passed in 2003. I should point out that when the matter came up in the Senate, the vote was 50 senators in favor, 50 senators opposed. Fortunately, the Constitution provides a remedy in such cases. I was there to break the tie. (Laughter and applause.) Now, I don't deserve any special credit for the vote that day. It's not like I had options. (Laughter.) The great thing I've noticed is, every time I vote, our side wins. (Laughter.)

The tax reductions on capital gains and dividends are doing exactly what we expected. Business investment has grown at a healthy rate during the last three years. And over $3 trillion dollars in new wealth has been added to the stock market. This spring, President Bush signed a bill extending the tax cuts for dividends and capital gains, so we can continue to expect a strong flow of capital investment -- the very kind of investment that generates even more jobs down the road.

As it is right now, the jobs picture is the best in American history; more Americans are working today than ever before. Since August of '03, the United States has added over 5.7 million new jobs -- more than Japan and the 25 nations of the European Union combined. The national unemployment rate is 4.7 percent -- lower than the average rate of the 1970s, the 1980s, or the 1990s. Productivity over the last five years has grown at the fastest rate in decades -- and higher productivity leads to higher wages. American workers are taking home bigger paychecks and their standard of living is on the rise. Household net worth is at an all-time, record high. Real after-tax income is up nearly 9 percent per person since the beginning of 2001.

In the first half of this year, our economy grew at an annual rate of over 4 percent. This follows a vigorous 2005, when the American economy grew at 3.2 percent -- faster than Japan, twice as fast as France, and more than three times as fast as Germany. President Bush's tax relief plan was right for America -- and it is working. (Applause.)

The economic expansion is also translating into higher than projected federal revenues, as we knew would happen. In the current fiscal year, so far, tax revenues are running about 12 percent higher than what they were at this point last year. As a result of the new revenue, we're well ahead of schedule to meet the President's goal of cutting the deficit in half by 2009. The key, in addition to revenue growth, is spending discipline -- and on that score we have more to do. Earmarks for special projects have simply gotten out of hand. They now occur by the thousands. The Defense bill this year has more than 1,700 separate earmarks in it.

The President and I support earmark reform as a good way to get unneeded spending out of the federal budget. More than that, the President is willing to make hard choices himself -- and so we call on the Senate to join the House and give the President of the United States a line-item veto to stop wasteful spending. (Applause.)

A low-tax policy remains at the center of our agenda to keep the economy growing. Under current law, there are tax cuts that are set to expire over the next few years. If we do nothing, American families will face a massive tax increase, and the economy would sustain a major hit. As the President said to Congress several months ago, this nation needs more than a temporary expansion, so we need more than temporary tax relief. As soon as possible, the Congress should act responsibly, and make the Bush tax cuts permanent. (Applause.)

I know that members of the NADA are also concerned about the death tax. The practical effect of the death tax is double taxation of many family assets, including auto dealerships, farms and ranches. The death tax penalizes savings and risk-taking and reduces capital formation in the economy. This summer, the House passed further relief from this unfair tax, so we're moving in the right direction, but the Senate needs to act. And President Bush looks forward to the day that he can sign into law the permanent repeal of the federal death tax. (Applause.)

We've had some other legislative victories during this Congress, including vital improvements in the bankruptcy law, long-overdue reforms to stop abusive class action lawsuits. We've improved access to health care with Health Savings Accounts, which allow a person to save money for medical expenses tax-free, and to keep that money even when they move on to a different job. We're asking Congress to enact Association Health Plans, so that small firms can join together to get health care for employees at the same discounts as big companies. And all Americans will be better off if we pass medical liability reform, so that good, honest doctors are not forced out of their practices by trial lawyers and frivolous lawsuits. (Applause.)

We also have a responsibility to confront the larger challenge of mandatory spending, or entitlements. Today, Social Security, Medicare and Medicaid account for 40 percent of the entire federal budget and they are rising rapidly every year. They are growing faster than the economy, putting more and more pressure on the entire federal budget. In 10 years, these programs will account for half of the budget. By the year 2030, spending for Social Security, Medicare, and Medicaid alone will be almost 60 percent of the entire federal budget. That will present future Congresses with impossible choices -- staggering tax increases, immense deficits, or deep cuts in every category of federal spending. The rising cost of entitlements is a problem that is not going to go away. And with every year Congress fails to act, the situation gets worse. We need to put aside partisan politics, work together, and get this problem solved.

Ladies and gentlemen, when I speak of the responsibilities we have in the federal government, and the principles of accountability for our decisions and actions, I think, above all, of the overriding obligation to protect and defend the American people in wartime. National security is the one area where the duties are greatest, the work is hardest, and the margin for error is the smallest.

Last week, we marked the anniversary of September 11, 2001. And the observances last Monday took the whole country back to the emotions of that terrible day. Thinking about 9/11 still moves all of us -- because the attack was directed at all of us. We were meant to take it personally, we still do take it personally.

The enemy, also, took note of the fifth anniversary of 9/11. For the terrorists, last Monday was a day for rejoicing -- for celebrating once again the suffering and the deaths of nearly 3,000 innocent men, women, and children. The terrorists did not know the people they killed. They didn't know their names or what they did for a living. They just knew these unsuspecting people were Americans, and that was enough to kill them all. This year bin Laden's Second-in-Command used the anniversary to issue more words of hatred for this country, and more threats of murder. And once again, all of us were reminded of the kind of enemies we face, the beliefs they hold, and the ambitions they want to achieve.

Our country has never before had to confront adversaries like these. They have no standing armies or navies. They wear no uniform and recognize neither the conventions of war, nor any rules of morality. Their method of fighting, which they have practiced and proclaimed, is to organize in secret, to slip among civilian populations, and to take as many innocent lives as possible. The terrorists are willing to die in that effort. Indeed, while civilized societies uphold justice, mercy, and the value of life, the terrorists hold to an ideology that feeds on the pain of others and glorifies murder and suicide.

Though they plot and plan and operate by stealth, the terrorists make no secret of the beliefs they hold. They seek to impose a dictatorship of fear, under which every man, woman, and child would live in total obedience to a narrow and hateful ideology. This ideology rejects tolerance, denies freedom of conscience, and demands that women be pushed to the margins of society. We saw the expression of those beliefs in the rule of the Taliban in Afghanistan. In that dictatorship, we also saw that beliefs of this kind can be imposed only through force and intimidation, so those who refuse to bow to the tyrants will be brutalized or killed, and no person or group is exempt.

The terrorists also have a set of objectives. They want to seize control of a country in the Middle East, so they have a base from which to launch attacks and wage war against anyone who doesn't meet their demands. They believe that by controlling one country, they will be able to target and overthrow other governments in the region, and eventually to establish a totalitarian empire that encompasses a region from Spain, across North Africa, through the Middle East to South Asia, all the way to Indonesia. They have declared, as well, their ultimate aims: to arm themselves with chemical, biological and even nuclear weapons, to destroy Israel, to intimidate all Western countries, and to cause mass death in the United States until this nation is no more.

None of what I've just said is in the way of speculation. The terrorists have laid out these ambitions themselves time and time again in their own words. As they carry out their strategy, they know they cannot hope to beat us in a stand-up fight. They never have. But they are absolutely convinced they can break the will of the American people. They base this view, in part, on the history of the 1980s and 1990s, when they concluded that if they killed enough Americans, they could change American policy. In Beirut in 1983, terrorists killed 241 Marines. Thereafter, U.S. forces withdrew from Beirut. In Mogadishu in 1993, terrorists killed 19 American soldiers. Thereafter, U.S. forces withdrew from Somalia. The attacks continued: the bombing at the World Trade Center in New York in 1993; the murders at the Saudi National Guard training facility in Riyadh in 1995; the attack on Khobar Towers in 1996; the simultaneous attack on two of our embassies in East Africa in 1998; or the attack on the USSCole 2000.

With each attack, the terrorists grew more confident in believing they could strike America without paying a price. So they kept at it, and eventually, of course, struck the homeland on 9/11. Bin Laden has predicted that the people of the United States simply do not have the stomach to stay in the fight against terror.

The terrorists regard the entire world as a battlefield. That's why al Qaeda has operatives in Iraq right now. They want to frighten and intimidate America into a policy of retreat, and bin Laden himself calls this conflict the "third world war." Americans are fighting there, and in Afghanistan, because our security demands it. Having liberated those countries from tyranny, we will not permit new dictatorships to seize power and give terrorists a base from which they can strike the United State s and other free nations.

There is still hard work ahead, and we harbor no illusions about the cruelty of our enemies. As the President has said, "The terrorists will continue to have the coward's power to plant roadside bombs and recruit suicide bombers. And you will continue to see the grim results on the evening news. This proves that the war is difficult -- it doesn't mean that we are losing."

The record is a good one. In Afghanistan, Hamid Karzai leads the first democratically-elected government in the 5,000-year history of the country. In Iraq, the people have ratified a constitution with the broadest democratic mandate in the Arab world, and despite assassins and car-bombers, Iraqis came out to vote at a rate of turnout higher than we have here in the United States. The Iraqi security forces, trained by Americans, are now nearly 300,000 strong and determined to defend their own country and to make it a source of stability in a troubled region. When it comes to our own troop levels, President Bush will make that call, and he'll do it based on what the commanders say is needed for victory. He'll make the decision that best serves the national interest, without regard to poll numbers, armchair generals, or artificial time lines set by set by politicians in Washington, D.C. (Applause.)

America is helping Iraq and Afghanistan on the journey of democracy because we are a nation that keeps its word. And we know from experience that the spread of democracy and hope are, in the long run, the best way to defeat the ideologies of violence, resentment, and terror. By standing with our friends, we are making a better day possible in the broader Middle East, and helping to build a safer, more peaceful world for our children and grandchildren. The United States of America is a good country, a generous country, a decent, idealistic, and compassionate country. We are doing honorable work in a messy and dangerous world. We are defended by heroes. And the brave Americans on duty in this war can be proud of their service for the rest of their lives. (Applause.)

If we have learned anything from modern experience, it is that we must stay on the offensive until the danger to civilization is removed. And this requires moving forward on many fronts at the same time -- from using financial tools, to diplomatic pressure, to a sustained, multilateral effort to fight weapons proliferation.

We also place the highest priority on intelligence, in order to figure out the intentions of the enemy that very likely has combatants hidden here inside the United States. We live in a free and open society, and the terrorists want to use those advantages against us. And so we have an urgent duty to learn who they are, and where they are, and what they are doing, and to stop them before they can act.

The best source of information, obviously, is the terrorists themselves. We've obtained extraordinarily valuable information through the detainee program, including from Khalid Sheikh Mohammed, the mastermind of 9/11.

We've also gained critical information from the terrorist surveillance program, which the President authorized in the days following 9/11. On occasion you hear this called a domestic surveillance or eavesdropping program. That is more than a misnomer; it is a flat-out falsehood. We are talking about international communications, one end of which we have reason to believe is related to al Qaeda or terrorist networks. And it's hard to think of any category of information that could be more important to the safety of the United States.

Like the detainee program and the financial tracking operation, the terrorist surveillance program was set up in a manner that is fully consistent with the constitutional responsibilities and legal authority of the President and with the civil liberties of the American people. The activities conducted under this authorization have helped to detect and prevent possible terrorist attacks against the American people. The recent ruling by a federal judge ordering an end to this program is just plain wrong. We are confident that it will be reversed on appeal.

If you'll recall, the 9/11 Commission focused criticism on the nation's inability to uncover links between terrorists at home and terrorists overseas. The term that's used is "connecting the dots" -- and the fact is that one small piece of data might very well make it possible to save thousands of lives. And the very important question today is whether, on five years of reflection, we have yet learned all the lessons of September 11th.

In the decade prior to those attacks, our country spent more than two trillion dollars on national security. Yet we lost nearly 3,000 Americans at the hands of 19 men armed with box cutters and airline tickets. These enemies have intelligence and counterintelligence operations of their own. They take their orders from overseas. They are using the most sophisticated communications technology they can get their hands on. Since 9/11 they have successfully carried out attacks in Casablanca, Jakarta, Mombassa, Bali, Riyadh, Baghdad, Istanbul, Madrid, London, Sharm al-Sheikh, Bombay, and elsewhere. Here in the U.S., we have not had another 9/11. No one can guarantee that we won't be hit again. But to have come this far without another attack is no accident. A lot of things can go wrong in a war. But I'm happy to relate that many things have gone right. We've been protected by sensible policy decisions by the President, by decisive action at home and abroad, and by round-the-clock efforts on the part of people in the armed forces, law enforcement, intelligence, and homeland security.

Ladies and gentlemen, I want you to know that we are not going to let down our guard. The President is serious about the threat, serious about his duty to protect the country. He will not relent in the effort to track the enemies of the United States with every legitimate tool at his command.

As many of you know, I had the honor of serving as Secretary of Defense at the time the Cold War ended. I worked for or with a number of Cold War Presidents, and I am a great admirer of the man who lived in the White House when that struggle began -- Harry Truman. I was interested to learn from Truman's biography that "The Cold War was an expression he never much cared for and seldom used. He called it 'the war of nerves.'" If you think about it, that's an apt description for the kind of challenge America is now facing. The war on terror is a test of our strength, a test of our capabilities, and above all, a test of our character. And I have never had more confidence in the nerve and the will of the American people. We love our country, only more when she is threatened. We know that the hopes of the civilized world ride on us. Our cause is right; it is just; and this nation will prevail.

Thank you. (Applause.)

END 9:41 A.M. EDT