Remarks by the Vice President at the State of Commerce Luncheon During the National Minority Enterprise Development Week Conference

The Omni Shoreham Hotel
Washington, D.C.

Thank you. Thank you all very much. And I want to wish you all good afternoon. And, Don, thank you very much for the introduction. One of the great pleasures of public service -- and I've done a good deal of it over the years now, but are the relationships and the friendships you build with the people that you serve with. And one of the highlights of my time in the Bush administration is being able to work very closely with this man. He does a superb for all of us and for all of you. And we owe him a great debt of gratitude for giving up his private life and making the sacrifices that go with public service. So, Don, thank you very much. (Applause.)

Now, I know from looking at the schedule, the sooner I finish the speech, the sooner you'll have lunch. (Laughter.) So I'll try to keep things moving.

But I'm pleased, on behalf of the President, to welcome all of you to this important conference in Washington. Every year, the nation observes Minority Enterprise Development Week, a tradition that, as Don pointed out, President Reagan began some 20 years ago.

From the smallest towns to the neighborhoods of our great cities, minority entrepreneurs are providing goods and services, jobs for workers, a daily example of the effort and the resourcefulness that make our economy go. Starting and building a business is one of the most challenging and rewarding things you can do. All of you know what it means to set a goal, take a risk, assemble a team and accept responsibility. You know the satisfaction that comes with hard-earned success.

Our administration is committed to an agenda of free enterprise and equal opportunity so that every person in America has a chance to work and to rise in the world. Our priority is to make it easier for an American to start a small business, easier for a small business to grow into a large one. When entrepreneurs prosper, our nation is stronger and our people are more likely to find work.

Most minority enterprises are small businesses, the very sector that creates most of the new jobs in America, and supplies the innovation that drives our prosperity. America must always be an ownership society, where hard work is rewarded and where the spirit of entrepreneurship is strong.

Events of the last few years have revealed the amazing resilience of our nation's economy. Throughout our history, recessions have typically resulted from single, unexpected shocks such as spikes in energy prices, or sudden shifts in markets. Since 2000, our economy has been dealt not just one shock, but a whole set of challenges with few parallels in American history.

First, the stock market began a steady decline, starting in the summer of 2000, as investors began to realize that the economy was not healthy. Businesses cut their budget for new investment in technology and equipment. And by early 2001, the economy was in recession. Then our nation was attacked by terrorists on September 11th of that year. And these terrorists brought terrible grief to our people and the attacks were clearly a shock to the economy.

Under the President's leadership, America has responded. We've set out to hunt down the terrorists and to bring them to justice. The President and I know that the security of the American people is our primary responsibility. We take that job seriously. We've reorganized the government to protect the homeland; and with a broad coalition, we are taking action against terrorists around the world. We're on the offensive. We will stay on offense, and we will prevail over the terrorists. (Applause.)

In order to counter the recession and the economic impact of the terrorist attacks, we delivered tax relief -- because when families and small businesses are hurting, the best way to help them is to let them keep more of what they earn. After all, the money we spend in Washington is not the government's money -- it's the people's money. (Applause.)

When the American people have more to spend, more to save, more to invest, our economy moves forward. And those who need work are more likely to find a job. We expanded the child tax credit from $600 to $1,000. We reduced the marriage penalty. We cut the top rate of taxes on dividends and capital gains, helping seniors and others who rely on investments in their retirements. Because of our actions in 2001 and 2003, a married couple with two children and a household income of $40,000 will see their federal income tax bill this year fall from $1,978 to only $45. (Applause.) Tax relief is critical to our small businesses. And for the sake of America's entrepreneurs, farmers and ranchers, we are also bringing the death tax to an end. (Applause.)

Many of you file as subchapter S corporations, or sole proprietorships, and pay taxes at the individual level. And many pay taxes at the top rate. By lowering your income tax rates, we can help you grow. And that means somebody is more likely to find work. Tax relief for small businesses means more new jobs in America.

There are some in this city who suggest that we should repeal the tax relief and raise taxes. They need to get the message that small businesses deserve tax relief, because the more money our small businesses can keep, the more jobs the nation will have. (Applause.)

Under the tax relief package that the President signed this past May, we raised the annual expense deduction for capital investments from $25,000 to $100,000 -- a sure way to promote investment in new equipment and software.

We believe all of these policies have set the stage for sustained growth in our economy. A recent survey of small businesses shows rising optimism among owners, evidence of improving sales, and more plans to invest and hire new workers.

There are other good signs, as well. Inflation is low. After-tax incomes are rising. Home ownership is near record highs, and productivity is high and rising. Factory orders, particularly for high tech equipment, have begun climbing.

As the economy continues to improve, though, we must not be complacent. The President and I are concerned about our fellow citizens who are looking for work, and we won't be satisfied until every person who wants to work can find a job. So we are at work on a six-point plan to strengthen small businesses, as Don mentioned, to build employer confidence and to help create new jobs.

First, people are more likely to find work if we can control health care cost. We can help in Washington by allowing small businesses to work together by shopping for health insurance. By banding together and pooling their risk, small businesses would have the same bargaining power as big companies. Business owners know how important health care is to families, and we want to make it easier for you to provide those benefits to your employees.

To keep health coverage affordable, Congress should pass medical liability reform this year. Frivolous lawsuits are forcing doctors to stop practicing medicine, especially doctors who specialize in taking care of new mothers and delivering their babies. Too many doctors across the country are struggling with the cost of liability insurance premiums. Too often, physicians are closing their practices and moving to states where insurance premiums are lower. Those that remain often have to order unnecessary tests and procedures just to avoid the possibility of a lawsuit. This defensive medicine drives up health care cost, and all Americans pay those bills.

This is a national problem -- it needs a national solution. The time has come for Congress to set reasonable limits on the litigation culture. We need a cap of $250,000 on non-economic damages, and we need reasonable limits on punitive damages. The House has already passed a good bill reforming medical liability. Now the Senate needs to act. No one was ever healed by a frivolous lawsuit.

Second, junk lawsuits are harming not only our health care system, they're hurting our entire economy. Frivolous litigation increases the cost of doing business all across America. Industry estimates say it is a $200 billion burden on our economy. We need effective legal reform. Class actions and mass tort cases that reach across state lines should be tried in federal court so that lawyers cannot shop around the country looking for a state court with a favorable judge. (Applause.)

The system should not reward lawyers who go fishing for settlements. When there's a verdict or a settlement, the money should go to the people who are harmed, not to the lawyers. (Applause.) The House of Representatives has acted with a strong bipartisan majority to support these reforms. The Senate should do the same.

Third, we need a sound, national energy policy. Growing businesses depend on steady, affordable, and reliable supplies of energy. We learned an important lesson during the blackout that hit the Northeast this summer: this nation needs an energy policy that will make sure our electrical grid is up to date, and that reliability standards for those who deliver electricity are mandatory, not voluntary. (Applause.) We need a policy that encourages the development of new sources of energy in an environmentally friendly way.

Our administration submitted an energy plan to the Congress over two years ago. Now it's time for Congress to complete its work and to send the President an energy bill that he can sign into law. For the sake of national security and our economic security, America needs to be less dependent on foreign sources of energy.

Fourth, we must continue to reduce the burden of needless regulation on employers. Small business owners work hard. You don't have time to fill out unnecessary forms and fight through the bureaucracy. (Applause.) The SBA has calculated the hidden costs of regulation amount to $7,000 per worker, and that slows job creation in America. Our administration is committed to reducing the burden of overregulation and making the rules simpler to understand. Small businesses should be focused on growing our economy and creating new jobs, not on fulfilling ineffective mandates from Washington, D.C. (Applause.)

This policy is already yielding results. For example, by simplifying tax forms for small business owners, we've saved America's entrepreneurs an estimated 61 million hours of nonproductive work. And that's a good start.

Fifth, we're pursuing free trade with willing partners around the globe. When the rules are fair and enforced, the playing field is level, our workers, farmers, and ranchers can compete with anybody in the world.

Sixth, we need to make sure that tax relief is permanent. Businesses and families need to have the confidence that all of the benefits of tax relief that we've passed will not disappear in coming years. Because of a quirk in the legislation, tax cuts will go away and taxes will go back up unless we act. Small business owners are happy to see the death tax disappears in 2010. But you may not be happy to know that the death tax is scheduled to rise from the dead in 2011. (Laughter.) The incentives for small business investment are set to vanish in 2006. The child credit falls back to $700 from $1,000 in 2005. If we do not make tax relief permanent, the taxes on a family of four with $40,000 in income will go up $922 a year in the year 2005.

When we passed tax relief, Americans did not expect to see higher taxes sneak in through the back door. If Congress is really interested in job creation, they will make every one of these tax cuts permanent. (Applause.)

Here in Washington, we have to stay focused on the needs of the country. We are fighting a war against terror around the world. And we must give our armed forces every resource they need to succeed. (Applause.) We are defending the homeland, and we cannot afford to cut corners in protecting the American people. The cost of war and the impact of recession have created a budget deficit. We must respond in two ways: We must keep pursuing a pro-growth agenda, because faster growth will create new jobs and generate more revenue for the government, and we must maintain spending discipline on non-priority items in Washington, D.C.

When we came into office, discretionary spending rose 8.7 percent that year. The President's budget for this year calls for discretionary spending to rise only 4 percent. If Congress stays on the path of spending restraint the President has proposed, we can meet the nation's priorities and still cut the deficit in half over the next five years.

That's a full agenda, and one we're moving forward on every day. This is a time of testing for the American people -- both at home and abroad. And we have shown the world the kind of people we are. Our confidence and optimism have never wavered. We are defending the peace of the world. We are bringing freedom to corners of the world that have not known freedom for decades, if ever. And we are building the prosperity of our country, by turning loose the great energy and enterprise of the American people. As entrepreneurs, you have shown great drive and determination. Your spirit, your hard work, and your faith in the future are making this nation stronger every day. You have the President's respect and my own. Thank you very much. (Applause.)

END 12:40 P.M. EDT