Remarks by the Vice President at the U.S. Chamber of Commerce

U.S. Chamber of Commerce

Washington, D.C.

10:20 A.M. EST

THE VICE PRESIDENT: Good morning. Thank you all very much. Thank you for that kind introduction and for the warm welcome, and I want to thank the Chamber of Commerce for hosting us this morning.

It's still early in the year, but the presidential campaign of '04 is now well underway - and I can report to you that so far the signs are good. For starters, President Bush has once again asked me to head up his vice-presidential search committee. (Laughter.) I've already narrowed down the list. (Laughter.) And with the primaries winding down, we know the name of our opponent - though we're still waiting for the names of those foreign leaders who support his candidacy. (Laughter.) And Senator Kerry, of course, is preparing to begin the search for his own running mate, someone that I will face in the fall election. The question is, will he go for somebody who is sober, serious, well versed in policy - or will he follow President Bush's lead and just settle for pure charm and charisma? (Laughter.)

It's been almost four years now since I got the call from the Governor of Texas asking me to join him on the ticket. Since that historic campaign and the inauguration of 2001, our country has experienced both great adversity and great achievements. And throughout that time, I've been a witness to the leadership and character of our 43rd President. I have seen calm when calm was needed, and decisive action when action was required. I am honored to serve at his side, and I can say with great pride that this nation is stronger, and more secure, because George W. Bush is President of the United States. (Applause.)

Here at the Chamber of Commerce, I hardly need to remind you that three years ago, we inherited an economy sliding toward serious trouble. Business investment was dropping, the stock market was falling, and the manufacturing sector had already begun to lose jobs. The economy contracted in the third quarter of 2000, and by early 2001 we were in recession.

President Bush took prompt and decisive action to put the recession behind us. Working with Congress, he delivered major tax relief, and provided the stimulus and confidence that the slowing economy needed. Then, as our economy was ready to recover, our nation was attacked by terrorists on September 11th, 2001. That day brought terrible grief to our country, and its effects were felt throughout our economy. The New York Stock Exchange shut down for nearly a week. U.S. airspace was entirely closed for the first time in history, and U.S. air travel was disrupted for many weeks. In the three months after September 11th, the economy lost nearly 1 million jobs.

Our economy encountered further obstacles after 9/11. There was the natural uncertainty that comes in wartime - the reluctance on the part of many to invest or to make new hires. We also learned of serious wrongdoing in some large corporations - which further discouraged investors and slowed the recovery. And again, President Bush responded, leading Congress to pass the strongest corporate reforms since Franklin Roosevelt lived in the White House.

The President and I know that the best way to grow the economy and to create jobs is to leave more money in the hands of the people who earn it. So we proposed and delivered another round of substantial tax relief in May of 2003. Taken together with the tax relief passed in 2001, we fulfilled a major economic goal - we cut taxes for every single American who pays income taxes. The average savings from the President's across-the-board tax cuts topped $1,500. Some say that's not much. But for the average working person, it sure seems like a lot when you have to send it to Washington.

Because of the Bush tax cuts, nearly 5 million Americans no longer pay any federal income taxes at all. Families bear a lighter burden, because we doubled the child credit and [decreased] the marriage penalty. Senior citizens and investors keep more of their money because we cut taxes on dividends and capital gains. We gave small businesses incentives to expand by increasing the expensing deduction, increasing the bonus depreciation and reducing marginal tax rates. And we helped farmers, ranchers, and family entrepreneurs by phasing out the federal death tax.

The Bush tax cuts had strong advocates here in the Chamber of Commerce, and we're very grateful for the support you provided for the effort. We're seeing the results now throughout the economy. Real disposable income is growing strongly, meaning that American workers have more money to spend, to save, and to invest. Manufacturing activity is increasing. Business investment is growing. Inflation remains low. Mortgage rates and interest rates are near historic lows. Home ownership is at its highest rate ever. And the labor market is gaining strength. Thanks to our productive workers and entrepreneurs, the United States of America is the fastest-growing major industrialized economy in the world. The tax relief that we passed is working. (Applause.)

For all this progress, we still have more to do. Our economy has added jobs each of the last six months, yet many of our fellow citizens are still looking for work. And our Administration is pursuing a clear, comprehensive, pro-growth agenda.

Our economic policies make the United States the best pro-growth, pro-jobs environment in the industrialized world. While Europe's economy stagnated at a 1.4 percent growth rate in the second half of last year, the American economy grew at a rate of nearly 6.2 percent. Our 5.6 percent unemployment rate is headed in the right direction and is significantly below Europe's unemployment rate of 8.8 percent.

Under President Bush's leadership, our government will continue working to break down trade barriers so that high-quality American products can find markets on every continent. America has five percent of the world's population. That means 95 percent of our potential customers are overseas. And we cannot expect to sell our goods and services, and create jobs, if America and our trading partners start erecting tariffs and other trade barriers and closing off markets. Millions of American jobs are supported by exports. One in five factory jobs in this country directly depends on trade. And 97 percent of the firms exporting are small or medium-sized companies - the kind of businesses that create most of the new jobs in our economy. The surest way to threaten those jobs would be a policy of economic isolation.

The economic isolationists show little faith in America's ability to compete - and they are proved wrong every day. Exports to Canada and Mexico have nearly doubled since NAFTA was signed a decade ago. For the good of America's workers, we must reject isolationism. And I can assure you: Under President Bush, the United States will continue to be a successful, confident trading nation.

We must also prepare more workers for successful careers in our changing economy. Across America, jobs in many fields are multiplying. Many of these emerging industries require new skills from our work force. We're going to help those who want jobs to learn new skills, and to seize those opportunities, and to start new careers.

All skills begin with education, so the President has worked hard to pass and aggressively fund the No Child Left Behind Act. This law is raising expectations for every child, and bringing higher standards to every public school in America.

We can do more to prepare Americans for jobs and for life. We have a plan to help students who have fallen behind in reading and math. We have a program to help workers who have been displaced by the effects of trade - by giving them assistance in job training, health care, and relocation. And because we know many workers return to school to learn for a new career, we are proposing an additional $250 million to encourage partnerships between local high-growth industries and America's community colleges.

To create more jobs, we will work hard to make America an even better place to do business. We need fewer mandates, and fewer unnecessary regulations out of Washington. Entrepreneurs should spend their time building businesses and creating jobs, not filling out a lot of useless government paperwork. (Applause.)

Our economy needs litigation reform. Junk lawsuits are cluttering the courts, weakening our economy, and hurting employers and workers. It would be a lot easier for America's entrepreneurs to hire new workers if they didn't have to keep hiring lawyers. (Applause.)

We should help business owners confront the rising costs of health care. Small firms should be able to pool their risk and give their employees a better deal on health care - that's why Congress needs to pass association health plans. We also need to make sure that frivolous lawsuits don't run good doctors out of business and drive up health care cost. No one has ever been healed by a frivolous lawsuit. Congress needs to pass medical liability reform, and do it now. (Applause.)

A healthy, growing economy also depends on affordable, reliable supplies of energy. We need to pass sound energy legislation that promotes new technology, conservation, and new production, and makes our country less dependent on foreign sources of energy.

Finally, to generate more jobs and to maintain economic growth, we need to create certainty in the tax code. Families planning their budgets or making investments for the future shouldn't have to worry about tax rates suddenly increasing. Small business owners should be able to rely on a consistent tax rate, so they can plan for the future with confidence and hire more workers. But unless Congress acts, the tax relief we worked hard to pass is going to expire. The marriage penalty will go back up, the child credit will go down, the death tax will eventually rise from the dead, small businesses will face higher taxes, and Americans will face a tax increase. For the sake of American families, for the sake of jobs, the Congress needs to make tax relief permanent. (Applause.)

Through times of great change in our economy and our world, President Bush has stood firmly by his conviction that lower taxes are a critical part of a strategy for economic growth. That conviction is supported by history and by common sense. Lower taxes stimulate investment, productivity, innovation and enterprise - just what we need to create more jobs. We've seen the good effects of tax relief in the successful policies of Presidents John F. Kennedy and Ronald Reagan. And we are seeing them again in the policies of George W. Bush, who I believe has earned four more years as President of the United States. (Applause.)

In Congress these past three years, there have been disagreements about economic policy - particularly on the vital issue of tax relief. Some members of Congress supported the tax cuts. Some had their questions, but were eventually persuaded that the American economy, and American families, would be better off if workers could keep more of their own money. And then there were those who seemed to oppose tax relief as a matter of principle, and who voted against virtually every tax cut at every turn in the debate. Take for example - at random - the Junior Senator from Massachusetts. (Laughter.)

Senator Kerry voted against creating the lower 10 percent tax rate for working families. He voted against reducing the tax rate on dividend income which so many seniors depend on. He voted against the higher expense deduction that has been so helpful to small businesses. He voted against repealing the death tax, and still supports reinstating it.

All those "no" votes now form the basis of Senator Kerry's economic plan. He has pledged that if elected President, he will repeal many of the Bush tax cuts in his first hundred days in office. He says that he will keep some of those tax cuts - never mind that he opposed each one of them at the time. He has given the usual assurances that in those first hundred days he's planning, only the wealthiest Americans can expect higher taxes. But voters are entitled to measure that campaign promise against Senator Kerry's long record in support of higher taxes for virtually every income group.

To get a clearer picture of what the first hundred days of a Kerry administration would look like, we can start by reviewing his last 7,000 days in Washington. A career highlight was his vote in favor of the largest tax increase in American history. He even voted to increase taxes on Social Security and Medicare.

You wouldn't know any of this from Senator Kerry's statements during this campaign. After voting three times to increase the gas tax - and once proposing to increase it by 50 cents a gallon, he now says he doesn't support it. We see the same pattern elsewhere. During the primaries, he attacked Dick Gephardt and Howard Dean for being against a higher child credit. Yet in his career Senator Kerry has voted at least 18 times against expanding the child tax credit. In this campaign he has claimed that he, quote, "fought hard to get rid of the marriage penalty." In truth, he has voted at least 20 times against cutting the marriage penalty.

All in all, this is the record of a senator who will speak out against higher taxes when it suits the political moment - but is one of the most reliable pro-tax votes in the United States Senate. Add it all up, and it turns out John Kerry has voted in the Senate at least 350 times for higher taxes. That averages to one vote for higher taxes every three weeks, for almost two decades. At least the folks in Massachusetts knew he was on the job. (Laughter.)

Now, just in time for the campaign, Senator Kerry is proposing what some are calling a tax reduction for businesses. Senator Kerry's proposal is inconsistent with even his own campaign positions. After attacking what he described as, quote, "Benedict Arnold" companies on the campaign trail, Senator Kerry is now proposing to give them a tax holiday. Putting aside this strange reversal, as usual, you have to look at the fine print. In fact, it involves a massive tax increase for American companies that do business abroad. There's an obvious problem with the proposal: Senator Kerry's proposal would simply give foreign competitors a leg up over American companies, and result in the destruction of jobs here in the United States. You do not create jobs at home by punishing companies that trade overseas - by running away from international competition. The way to add jobs in this economy is to win the competition for world markets, and to sell more goods that say "Made in America." (Applause.)

Over the same 20 years in which Senator Kerry was voting for higher taxes, he was voting just as consistently in favor of new federal spending. This pattern, also, has continued right into his campaign for the presidency. At last count, Candidate Kerry had offered 73 new spending proposals. So far he's provided details for just 28 of those 73 - and they alone would add $1.7 trillion in new spending by the federal government over 10 years. But here we run up against a basic math problem. Using a generous estimate, the Senator's plan for higher taxes would raise $700 billion. So with 1.7 trillion dollars in extra spending, that leaves a gap of $1 trillion. And it takes little imagination to figure out just how he would fill that tax gap - a major new tax increase on the workers, entrepreneurs, and inventors of this country. And with the recession behind us, and the economy gaining strength, a tax increase is exactly the wrong policy for America today.

American workers and businesses welcomed the tax relief of the last several years, and they have put that money to better use than the government would have. The Bush tax cuts have helped firms to expand, to buy new equipment, and to hire new people. Senator Kerry has tried to convince us that his own economic plans would generate new jobs - yet he never gets around to explaining how hundreds of billions of dollars in new taxes would add jobs to the economy. At the same time, he opposes virtually every other job-creating measure - from a sound national energy plan, to class-action reform, to medical liability reform, and to free trade.

As in other matters, Senator Kerry's long record in Washington helps to clarify the stark choice before the American people in 2004. On economic policy, that choice is between a senator who would raise taxes, and a President who has cut them. It is the difference between a senator who makes endless promises of new federal spending, and a President who insists on spending discipline in Washington, D.C.

Two weeks ago, in a visit to the Ronald Reagan Presidential Library, I said the American voters face a clear choice this year. In the months ahead, we will continue a live debate on tax policy, the American economy, the security of the nation, and America's role in the world. The President and I welcome that debate. We have a record of achievement to show for our first term. And I'm confident that seven months from now, with sharp alternatives before them, the American people will choose the confident, steady, principled leadership of George W. Bush. (Applause.)

Thank you.

END 10:40 A.M. EST