CHICAGO--(Business Wire)--Union League Club of Chicago
1:18 P.M. CST
THE PRESIDENT: Thank you, all. Thank you all very much. Thanks for
coming. I'm glad to be here with the members of the Illinois Chamber.
Mr. Mayor, thank you very much. You've given me a lot to do today.
(Laughter.)
First thing is, the Mayor runs the school system, and I went by
Horace Greeley Elementary -- and the reason I did is because Horace
Greeley is a Blue Ribbon School. I remember a while back, everybody
was a blue ribbon school. But that's not the way it is these days
because we're judicious in who gets awarded a Blue Ribbon School. A
Blue Ribbon School is one which sets high standards, and measures, and
achieves results.
Mr. Mayor, you're a reformer when it comes to education because
you understand when we find mediocrity, when we find schools that
aren't teaching, we're going to have to do something about it if the
United States wants to remain competitive in the 21st century.
Then the Mayor had me briefed by the 2016 Olympic Committee bid
team, and you got a good bid. I'm absolutely convinced that Chicago
will represent the entire country the right way if the Olympics are
here in 2016. Mr. Mayor, you've put together an outstanding team, and
I just want to -- (applause) -- I just want the judges to understand
that the United States of America stands squarely behind Chicago's
bid.
I am really pleased to be here at the Union League Club. I did a
little research into the history, and it turns out Winston Churchill
came here in 1932 -- right before I was born. When people think of
Churchill, of course they marvel at what he managed to do with the
English language. When people think of me -- (laughter). Never mind,
Congressman Emanuel. (Laughter.) I appreciate the Congressman for
joining us. He'd been with me all day long.
You know, there's a lot of partisanship in our nation's capital. I
bet both of us would say, too much. But I appreciate the fact that
when the President of the United States came to his district, he
showed up. It shows a lot about the man. I'm honored you're here.
Thanks for coming. (Applause.)
I do want to talk about keeping our economy growing and creating
jobs for our citizens. I had a New Year's resolution, and it was to
make sure that Congress keeps the taxes low and to make sure that when
we spend your money, we do it wisely or not at all. And it's a
resolution I intend to keep. (Applause.)
Before I talk a little bit about the economy, I do want to thank
Joe Dively, who's the chairman of the Illinois Chamber, who's hosting
this event. I want to thank the Chamber members who are here. I'm
honored that you'd take time out of your day to give me a chance to
come and visit. I'm sure you know what I know: that many Americans are
anxious about our economy. And this, frankly, is not unprecedented.
Over the last seven years, over the span of my presidency, we've
had other challenges. There have been other times when people have
been anxious about the economy. After all, we've been through a
recession, terrorist attacks, corporate scandals, wars in Afghanistan
and Iraq, as well as devastating natural disasters. It's seven years
we've had experience in dealing with anxiety. Every time our economy
absorbed those shocks, we dealt with them, and managed to grow and
prosper.
In other words, this is a resilient economy, because we rely on
the free enterprise system. Our economy is flexible, it motivates
people to take risk. We are the most prosperous nation in the world.
There's a sense where we can be optimistic. We have seen anxiety --
dealt with anxiety before; this isn't the first time.
We have a strong foundation in our economy, but we cannot take
economic growth for granted. That's what I want to share with you. I
understand that while there is a foundation that would be the envy of
a lot of other nations, we cannot take growth for granted. We confront
economic challenges, from the downturn of the housing sector to high
energy prices to painful adjustments in some of the financial markets.
Recent economic indicators have become increasingly mixed. Last
Friday we learned that our economy has now had 52 months of
uninterrupted job growth. That's a record. That's the longest period
of job creation on record. (Applause.) Our entrepreneurs are taking
risks. Our small businesses are expanding. Yet we also learned that
our jobs are growing at a slower pace and that the unemployment rate
ticked up to 5 percent. So in other words, on the one hand, we're
continuing to set a record; on the other hand, there's mixed news.
Same when it comes to pricing. Core inflation is low -- except when
you're going to the gas pump it doesn't seem that low; or when you're
buying food it doesn't seem that low. Core inflation is low, but
energy and food prices are on the rise -- have risen.
Consumer spending is strong, yet housing values are declining. The
mixed report only reinforces the need for sound policies in
Washington, D.C. -- policies which do not create more regulation and
create more lawsuits. Policies include opening new markets for U.S.
goods and services. One of the interesting adjustments that has
happened in our economic horizon has been that trade has been a
significant part of growth. In other words, when you open up markets,
where our goods and services are treated fairly, we can compete with
anybody anytime.
It's in our interests that we open up markets. It's in our
interests that we demand people treat us the way we treat them in the
marketplace. And we got some trade votes that will be coming up this
year: Colombia, Panama, and South Korea. It's in the interest of
economic vitality and growth that we provide opportunities for
businesses, large and small, to be able to sell goods and services.
Secondly, energy prices. There is no quick fix. As a matter of
fact, I signed good legislation, passed by Republicans and Democrats,
that enable us to begin to diversity away from oil and gas, and that's
good. But the diversification isn't going to happen overnight. We
ought to be exploring for more oil and gas in the United States of
America, and I'm convinced we can do so in environmentally friendly
ways. (Applause.) And the truth of the matter is, if we're deeply
concerned about the environment and want to make sure we're wealthy
enough to deal with environmental challenges, we ought to be using
nuclear power. Nuclear power -- (applause.) We're working on policies
to reform our mortgage markets.
But most importantly the smartest thing we can do is to keep taxes
low. In a time of economic uncertainty, we don't need to be taking
money out of your pocket. In a time of economic uncertainty, we ought
to be sending a clear signal that taxes will remain low. Now, I've
worked with Congress to cut taxes, and pro-growth economic policies
work. When you cut taxes, it means that people have more money to
save, spend or invest; more money in your pocket; more money where you
can do -- you can support your family; or if you're a small business
owner, you can reinvest to create more job opportunity in the
community in which you live.
It turns out tax cuts have helped our economy overcome
uncertainties. Economic growth yielded more revenues for our federal
treasury. When you combine that with spending discipline, then that
deficit is beginning to shrink, particularly as a percentage of GDP.
Our deficit percent of GDP is low, relative to historic averages. It's
possible to keep taxes low, grow your economy, and deal with your
deficit, is what I'm trying to explain to you.
In times of uncertainty it's very important to make sure that the
people on the front lines of job growth -- that would be the
entrepreneur -- knows taxes are going to remain low. And so one of the
first basic principles that I'll be talking to Congress about is this
administration will use its authorities to keep taxes low.
I don't think there are many folks who believe that Washington
really needs more of your money -- I certainly don't. Unfortunately,
Americans could be facing higher taxes unless Congress takes action to
stop it. You see, in less than three years, the tax cuts that we
passed are set to expire. That creates uncertainty. If you're an
entrepreneur thinking about investing, and all of a sudden you're
looking at a horizon where you taxes may be going up, it creates
uncertainty. We don't need more uncertainty in an uncertain market. If
Congress allows this to happen we'll see an end to the measures that
have helped our economy grow, including the 10 percent individual
income tax bracket, the reductions in the marriage tax penalty, and
reduced rates on regular income, capital gains, and dividends.
And one of the interesting things that happens if taxes go up --
people say, well, we're just going to tax the rich. The problem is,
many small businesses pay taxes at the individual income tax rate
because they're Subchapter-Ss, or limited partnerships. We don't need
to be running up taxes on small business owners. After all, 70 percent
of new jobs are created by small businesses in America. Increasing the
tax burden on small businesses will make it less likely people will be
willing to create new jobs.
And so I will strongly urge that the Congress keep taxes low. One
way to do it is to make sure that all the tax cuts we passed are made
permanent. If you're interested in taking uncertainty -- (applause.)
One of the other taxes that's going to return will be the death tax,
which is being phased out, and in 2011 it kicks back in, which means
it's going to be hard on estate planning, let me put it to you that
way. I hope a lot of people don't decide to move on just because of
the tax cut. (Laughter.) I'm absolutely convinced we can do a better
job of having the estate tax put on the road to extinction and then
let it pop back up. It makes no sense.
Listen, the estate tax is a lousy deal, particularly for farmers
and small business owners. I mean, you get taxed twice: You get taxed
when you build your business, and then they tax you when you die. I'm
absolutely convinced that there is a deal to be done, and get rid of
the estate tax once and for all, for the sake of economic vitality and
growth and fairness.
I want to tell you what it means if these taxes go up. If you're a
single mom with two children and $30,000 in earnings, her taxes will
go up by 67 percent -- or about $1,600. If the taxes aren't made
permanent, this is going to affect a lot of Americans in very negative
ways. If you're an elderly couple with $40,000 in income, they would
see their taxes go up by about 155 percent -- or another $100.
Now, that may not sound like a lot to some of us in Washington,
where they throw around numbers in billions -- it means a lot to an
elderly couple making $40,000 a year. Twenty six million small
business owners would see their taxes go up by nearly 17 percent, or
$4,000 on average. For somebody struggling with health care costs and
$4,000 more goes over to the federal government, it's going to make it
harder for you to stay in business. It just doesn't make any sense in
times of uncertainty to be sending uncertain messages about the tax
code. So I'm looking forward to working with the Congress to get these
tax codes -- cuts made permanent.
Secondly, the federal government can play a positive role. We can
play a negative role if we get too aggressive. If we over-regulate,
it's a negative role. If we pass law that -- and opens up businesses
and farms and small businesses to lawsuits, that's a negative role. We
have too many law suits in America to begin with, in my judgment. But
there are some things we can do to help.
For example, the housing market. What's interesting about the
housing market is that, you know, in the old days you'd sit down with
your lender and work out a deal; and then if you came on a hard time
and you're still credit-worthy, then he would help you refinance the
loan. Well, those mortgages that have been made in recent times have
been bundled up into financial instruments and sold. So it's hard to
get the borrower and the lender face-to-face to help the borrower stay
in the home. That's the challenge.
Hank Paulson and Alphonso Jackson -- that would be the Secretary
of the Treasury and the Secretary of Housing and Urban Development --
have come together with an innovative plan called HOPE NOW. It doesn't
cost one dime of your money, but it's the use of federal influence to
bring investors and counselors and lenders and services of loans
together, to help find those who have credit-worthy to help them stay
in their homes. In times of uncertainty in the housing market, it
makes sense to help people refinance loans. And Congress can help as
well.
By the way, they passed good law -- you know, I don't know if you
know this or not, but if you refinance your home, it's a tax liability
for you. The value of the -- the computed value of the difference
between what was viewed as your value of your home and the new one
after refinancing -- new value after refinancing was a tax liability.
It made no sense; somebody is trying to stay in their home, and they
get refinanced, and then there's an additional tax liability; it makes
it harder to stay in the home. And we passed good law to make that
easier.
But there's some other things we can do together. In other words,
there's a constructive role for the federal government that I believe
will help us during these times of uncertainty, and one of them is to
expand the reach of the Federal Housing Administration. In other
words, this is a program all aimed at helping credit-worthy people
refinance their home so they can stay in it during these times of
uncertainty.
Now look, there are some people that probably shouldn't have
bought a home in the first place. There are speculators that don't
deserve help, in my judgment. But there are good, solid, hardworking
Americans that we can help stay in their home by providing a -- by
helping them on refinancing.
Another place where Congress and the administration can work
together is dealing with tax-exempt bonds. Tax-exempt bonds, some of
them for the housing purposes, can be used to help people buy a new
house. I believe, in this time of uncertainty, we ought to have the
authority for tax-exempt bonds to be used to help somebody stay in
their current house. In other words, these are constructive ways to
deal with the problem we face. Congress needs to pass a reform bill to
strengthen the regulation of Fannie Mae and Freddie Mac so they can
stay focused on their core mission, which is housing. And I'm looking
forward to working with the Congress to help us through this period of
correction in the housing market.
Now, secondly, we can help people deal with health care. There's a
fundamental debate taking place in Washington. I'm on the side of,
let's strengthen private medicine rather than weaken private medicine.
I'm on the side that says the more consumerism, the more choices
people have in health care, the better off the health care system will
be. I'm on the side of saying to small businesses health savings
accounts are a smart way for you to be able to insure your people. I'm
on the side of small businesses by saying I believe businesses ought
to pool -- be allowed to pool risk across jurisdictional boundaries.
That's fancy words for, if you're a restaurant in Chicago, you ought
to be able to put your employees in the same risk pool as a restaurant
in Texas, so you can get discounts on your insurance, just like big
companies can get discounts on their insurance.
And I'm for changing the tax code. The current tax code penalizes
people who go shopping for health care in the individual market. If
you're a small business owner, you know what I'm talking about. It's
hard to go find insurance in the individual market because the tax
code, frankly, discriminates against the individual relative to the
person who gets tax -- health insurance through corporate America. And
I think all families ought to get a $15,000 deduction for health care,
or individuals a $7,500 deduction for health care, regardless of where
they work. (Applause.)
And all of a sudden the playing field gets level, and it's more
likely an individual market begins to grow. And when you couple that
with transparency of pricing and information technology, you can begin
to see the emergence of a health care system that's patient-reliant,
that focuses more on the doctor-patient relationship and less on
instruction from Washington, D.C. And there's a fundamental debate,
and I strongly believe the government, by passing good policies, can
help us deal -- help small businesses deal with health care -- is a
key issue.
And so those are some of the things I'm looking forward to working
with Congress about, to deal with these times. As I say, we've been
through this before. People said, are you optimistic? I said,
absolutely, absolutely optimistic. Do I recognize the reality of the
situation? You bet I do. During my seven years as President have I
seen the great American economy bounce back? I have. People say, why
do you think? I say, because our people are optimistic, hardworking,
decent people. That's why. This economy rest in the hands of the
American people, not in the halls of our government.
Winston Churchill, when we came here, by the way -- I dug out a
quote that I'd like to read to you. He said, "Some ... regard private
enterprise as a predatory tiger to be shot. Others look on it as a cow
that they can milk. Only a handful see it for what it really is -- the
strong and willing horse that pulls the whole cart along." I don't
know if he said it right here in this very hall, but that's what he
said. Government policy ought to recognize who's pulling this economy,
and that would be the entrepreneurs and workers of America.
(Applause.)
So I want to thank you for giving me a chance to share some
thoughts with you. Thank you for taking risk. Thank you for helping
Chicago and the area around Chicago. You're one of the really great
locations in the United States of America. Mr. Mayor, I'm honored to
be with you again. I appreciate your time. God bless you. May God
bless America. (Applause.)
END 1:40 P.M. CST
White House Press Office
1-202-456-2580
Copyright Business Wire 2008
