For Immediate Release
Office of the Press Secretary
March 2, 2001
Remarks by the President to National Conference of State Legislatures
Presidential Hall Dwight Eisenhower Office Building
10:20 A.M. EST
THE
PRESIDENT: Mr. Secretary, thank you for the three
introductions. (Laughter.) When I was looking for
people to serve in the Cabinet, one of the places I looked was for
fellow governors. Because I strongly believe that there
needs to be appropriate balance between the federal government and the
state governments. And I found a good one in Tommy
Thompson. He's going to do a great job, and I'm so honored
that you're here. (Applause.) I appreciate you
all having me. I see some familiar faces -- Mr.
Speaker. I'm glad you all are here. I want to
thank Senator Costa and Senator Saland for inviting me. I've
got something to say about the budget, and this is a pretty darn good
forum to do so.
Before I
begin, though, I want to thank the folks from Quebec who are
here. And, where are you? There you are,
sir. Thank you for being here. I'm looking
forward to coming to Quebec City in April. I had a good
visit with the Prime Minister of Canada the other day, and I'm
confident our nations will continue our long friendship together --
work together for the good of our two countries and our
hemisphere. I understand we've got some folks from South
Africa as well.
Well, thank
you all for coming. Welcome. I'm sure glad you're
here. Any Texans here, speaking about foreign
countries? (Laughter.) Darn
it. (Laughter.) One of the things that I talked
about with the governors, all of whom were here the other day, was a
new federalism initiative. And my administration that's
going to listen to people at the state and local level to make sure we
clearly define the role of federal government and state
governments. And then, have a -- by executive order, put a
group together to make sure it actually happens.
A lot of
times in Washington, as you know, we tend to talk; and sometimes, the
talk isn't backed up by action. And so we're going to work
hard to make sure that the new federalism becomes reality.
And it's
important. Take a matter like education. One of
my priorities as the Governor of Texas was education; one of my
priorities as the President is to make sure every child gets
educated. But I can assure you, this administration
understands the importance of local control of schools. And
we don't believe in the federalization of the public school system,
that one size does not fit all when it comes to education. (Applause.)
And, of
course, ours is an administration that doesn't care whether you're
governor or you're speaker or you're leader of the Senate. As a
Republican or a Democrat, if you believe in local control of schools,
you do so in a nonpartisan way. So we look forward to
working with the Congress to pass power out of Washington, to make
those federal programs that are prescriptive in nature become
supportive of local efforts to meet -- so that each local state and
district can chart their own path to excellence for children.
One of the
reforms that I think that is going to be crucial is to work with states
and local jurisdictions to develop strong accountability systems, that
in return for federal money that you must show us whether or not
children are learning to read and write and add and subtract.
We will not
have a national test. A test devised at the national level
will undermine local control of schools. But I think it's a
perfectly appropriate question to say, for example, with disadvantaged
students, those with Title I money, that -- measure, measure on an
annual basis. You develop the standards, you develop the
test, but show not only the President, but show everybody else whether
or not the schools are meeting the objectives.
And if they
are, we'll praise teachers like we should, all across the
country. But if not, instead of just accepting the status
quo, if it's okay to shuffle kids through the system who can't read, it
will serve as a catalyst to change.
And this is
a substantial reform. On one side, you'll have people say,
well this is not the proper role of the federal government, to insist
that local jurisdictions show us whether or not children are
learning. I reject that argument. We're a
results-oriented nation. And there's no better -- no
important place to find positive results than in our public schools,
and no important place to find negative results, and correct them early
than in our public schools.
And they're
going to hear people say, well, it's racist to test. Listen, I went
through this argument in the state of Texas. It is racist
not to test. It is important to test, because we believe all
children can learn, and therefore, when we find certain children not
learning, let's correct it. See, the attitude is, if certain
kids can't learn, let's just not hold people accountable; let's just
quit and move them through the system.
That's
unacceptable to me. I know it's unacceptable to
you. I believe it's going to be unacceptable to both
Republicans and Democrats in the Congress. The cornerstone
of reform is flexibility at the local level, coupled with strong
accountability measures. (Applause.)
Many of you
all know the debates, oftentimes, on important matters like education,
revolve around who spends the most money. And the truth of
the matter is, the federal government's got a limited role when it
comes to the expenditure of taxpayer's money in public
schools. I mean, we fund about 7 percent of the total
budgets across the nation.
But there
is an important role for the federal government, particularly for
disadvantaged children. And so we've increased our education
budget by more than any other department in the federal
government. The debate here of course will be, well, it's
not enough. But for those who argue that, sometimes they're
not -- they don't have to do what the Executive Branch does, which is
to present an overall budget, to make it work. And that's
what I want to explain to you all, how our overall budget works.
First,
there was a contest at the end of the last session to figure out who
could spend the most money. It didn't matter what your party
was, it looked like. The budget grew by 8
percent. That's a substantial growth in federal
expenditures. My budget slows discretionary spending down to
4 percent. That's more than the rate of
inflation. It's a pretty high increase in the expenditures,
but it's nothing close to what was happening over the last three years,
on average, at the end of last year.
That's
caused some consternation because in Washington, the definition of a
cut is that you haven't increased the budget as much as
anticipated. You may be actually increasing spending, but
that's called a cut up here. We've had to learn new
accounting. (Laughter.) But we grow the
discretionary spending by 4 percent.
We protect
entitlements. All of the payroll taxes will be set aside for
Social Security and only Social Security. We double the
Medicare budget over a 10-year period of time. We increase
Medicare in the first year, to meet all needs, and including having a
prescription drug program for poor seniors to be administered by the
states.
It is a
budget that meets needs. And, by the way, we pay our
soldiers more money; we've got an increase in pay for the men and women
who wear the uniform. As an aside, I think it's very
important for my administration to send this message to Congress and to
the country -- that we'll first develop a strategic vision of military
spending, a strategic vision of the military, and then we'll figure out
how to spend the money; as opposed to let's spend the money first and
then maybe develop a strategic vision afterwards. It's
called planning. And one of the things that Executive Branch
folks must do is to help plan the proper expenditure of money, and
that's what we're going to do.
But we do
increase the military budget, starting with the personnel, to make sure
folks are better housed, better paid and better trained.
And as an
aside -- a second aside -- the Commander-In-Chief must set a clear
mission for all departments, particularly the Department of
Defense. And the mission is to be prepared to fight and win
war, and therefore prevent war from happening in the first
place. It's a clear mission and a clear statement of
purpose. (Applause.)
There is a
lot of discussion about paying down debt. And it's a healthy
discussion. We pay down $2 trillion debt over a 10-year
period of time in our budget. That's the largest amount of
debt ever paid by a country in history. I think that's an
accurate statement.
There is also debt at the local level. It's called consumer
debt. And so, while a lot of us up here talk about federal
debt, one of my jobs is to make sure the nation stays focused on the
debt that burdens the working folks in America. People have
got a lot of credit card debt. And when you couple that with
high energy prices, some of the people that you know are in a
pinch. And we'd better do something about it.
It's
important for our economy to do something about that. It's
important for the lives of people who struggle to get ahead to do
something about it. And that's part of the basis for the tax
relief package. But before I talk about the tax relief, I
also want to tell you, we've set aside $1 trillion over 10 years for
contingencies.
That can
mean a lot of things. Contingencies can mean -- well, maybe
the numbers weren't as good, or -- I think they're going to be better
than they anticipate, by the way. It could be that we need
money for emergencies, which we probably will. Maybe need a
little more money for some of the agricultural sector around the
country. There are contingencies set aside.
And
finally, that leaves money left over. And the big debate
here -- and you go through the debate every single budget session -- is
what to do with it. And I am going to make the case, not
only here in Washington, but traveling around the country, that we need
to remember who paid the bills in the first
place. (Applause.)
I'm trying
to be as -- to bring as much common sense to Washington as I
can. And the speech I gave the other night was an attempt to
say, here's the priorities; there's money left over. Here's
the debt repayment; there's money left over. There's a
common-sensical way to budget by setting aside contingencies, and
there's still money left over. And, by the way, these numbers are
based upon conservative assumptions.
The first
year, the budget is based upon a 2.4 percent growth. It averages a
little more than a 3 percent growth over the next 10 years. We can do
better than that in America. America can grow our economy --
we're too strong a nation; we're an entrepreneurial
nation. We've just got some unbelievable productivity gains
to be achieved in our economy.
People take
a pessimistic view about how to project revenues, and that's
fine. But I just want you to know I'm much more optimistic
than the point of view here in Washington. People say, well,
what happens if -- you know, gosh, what happens -- maybe we need a
trigger mechanism, that's kind of the discussion. So,
therefore, if the surpluses don't materialize, well, there's two
reasons why surpluses won't materialize. One is that the
revenues aren't quite as expected because the economy has slowed down,
in which case we need to accelerate tax cuts.
You see,
tax relief will put money in people's pockets, which will help give the
economy a second wind. Or, a reason the surplus may not
materialize is because Congress has overspent. So it seems
like to me we need to be careful about any trigger mechanism that ought
to be on spending to make sure that we don't overspend
surpluses. (Applause.)
The tax
relief package is well thought out and well designed. Of
course, I would say that. (Laughter.) But we've
spent a lot of time on it; as opposed to trying to figure out what
number sounded like it made sense, we actually calculated the cost of
fixing parts of the tax code that are unfair. For example,
the death tax is unfair. Many of you come from agricultural
states; you know exactly what I'm talking about.
The
marriage penalty is unfair. The tax code itself is unfair,
because it's like we erect, as I said in the campaign, a toll booth
right in the middle of the road to the middle class. One on
one side, people struggling to get to the toll booth pay a higher
marginal rate on additional dollars earned than people who are
successful.
If you're a
single mom, like I said in my speech, and you're trying to get ahead,
and you're making in the low $20,000 salary range, as you lose earned
income tax credit, as you start paying the 15 percent bracket, as you
pay payroll taxes, your marginal rate is nearly 50 percent on
additional dollars earned; and that is not right. And that's
not the America that we all want our country to be. It sends
the wrong message.
And,
therefore, we dropped the bottom rate from 15 percent to 10 percent and
doubled the child credit, which will make the marginal rates on people
starting to get ahead less, and that's important. Access to
the middle class is a fundamental part of the American experience.
We also
drop all rates. The temptation, of course, as you know, in
tax policy is for people to say, well, I'll get to decide who gets the
tax breaks; let me make those decisions. It's called
targeting. I don't think we ought to try to figure out who
is targeted in and targeted out. I think if you pay taxes,
you ought to get relief. (Applause.)
Finally,
there will be a lot of discussion about whether or not we ought to drop
the top rate. Well, first of all, if everybody who pays
taxes ought to get relief, then you ought to -- need to drop all
rates. But secondly, I want to remind you all that when you
drop the top rate from 39.6 percent to 33 percent, it enables small
businesses and entrepreneurs to more likely be able to expand their
businesses. Because if you inquire, you'll find a lot of the
small businesses in your districts and in your states are
unincorporated small businesses and/or sub-Chapter
S businesses. And the top rate reduction I view
as a way to create an environment in which the entrepreneurial spirit
can continue to move in America.
One of the
most hopeful statistics I heard was in the great state of California,
where there are over 700,000 Latino-owned small businesses in that
state. That's a fantastic statistic about the American dream
and the American experience and the whole concept of owning something.
One of the
things that distinguishes our great land is people can own their own
business, or own their own home. And the idea of encouraging
the entrepreneurial experience to flourish, particularly in the small
business sector, is what I think good public policy is all about.
So tax
relief is not only to -- as a way to kick-start the economy that is in
fact slowing down, but tax relief is also an opportunity to achieve
certain objectives, to make the code more fair, and to make the small
business person more likely to employ additional folks. And
that's my case. I think we're going to get it
done. (Applause.)
And I'd
like your help. I'm going to travel the country a lot, which
I'm finding to be is important, not only to make the case; but it's
important to remember where I came from. And I came from
many of the neighborhoods that you all represent, just good, honorable,
hard-working people. I cannot tell you what an honor it is
to be the President, and to drive in those cars with the American flag
flying, and to see people lining the roads, waving to the
office. It reminds me of the greatness of the country.
And it's
the people of America. You know that just as well as I
do. The people of this great country is what makes this
place so special, this land so special. And all public
policy must recognize that, and work to empower people, so they can
help themselves. My budget does so. That's what
the budget is all about. And I want to thank you for giving
me a chance to come by and make my case.
God bless.
END 10:36
A.M. EST
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