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THE WHITE HOUSE
WASHINGTON
February 27, 1989
MEMORANDUM FOR CHRISS WINSTON
DEPUTY ASSISTANT TO THE PRESIDENT
FOR COMMUNICATIONS
FROM:
NELSON LUND 4g
ASSOCIATE COUNSEL TO THE PRESIDENT
SUBJECT:
Presidential Remarks: Small Business
Legislative Council
At the request of James W. Cicconi, Counsel's Office has reviewed
the captioned remarks. We have no objections.
We appreciate the opportunity to review these remarks.
Attachment
CC: James W. Cicconi
THE WHITE HOUSE
WASHINGTON
February 27, 1989
MEMORANDUM FOR CHRISS WINSTON
FROM:
WILLIAM L. ROPER urr
SUBJECT:
Small Business Legislative Council Speech
The draft remarks for the Small Business Legislative
Council cover the President's key themes: flexibility in the
marketplace and the need for investment.
I would recommend bringing these themes together more
vividly in the conclusion.
I have suggested language to be more specific on the
issue of "a level playing field" with our trading partners, on
pages 2 and 6.
I have added several further editorial comments on the
text itself.
If you have any questions, please let me know.
CC: James W. Cicconi
Document No. 010588
WHITE HOUSE STAFFING MEMORANDUM
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
CARD
WINSTON
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
(Lange)
February 23, 1989
(000 FE3 24 11:11:23
4:30 p.m.
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language.
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor. "
Maybe I should have asked them to read my lips.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
to help assume.
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field.' "
You know, there are some who say that the sun is rising in
the Far East. Some even suggest that it's setting here at home.
Well, for them, I have news. The 21st century can be the next
American century -- if we understand the challenges before us,
and move to meet them together.
More than ever, the world is interconnected; interdependent;
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
advantages we have -- and to create new ones.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
We've created 19 million new jobs in this country since the
recovery began. That's five times the number of jobs created in
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
3
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions, on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity,
and help to create more of it.
Americans are a diverse people. They don't want generic
solutions, when a problem is best solved at its source.
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved. What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a system of refundable tax credits,
4
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
Flexibility promotes creativity. It's always been the basis
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're
aware that we have new and important work to do. Ninety percent
of them said that American business is still too short-term
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
You need government that enables you to do what you know how to
do.
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential in the capital gains
tax -- cutting it to 15 percent on investments held for a year or
more.
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise.
For us to be completitive in international trade, we
needa + call on anyone who talks about "level ing the playing
field" with our trading partners, to consider this: One area in
which we most assumedly do not have such a level )
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
playing field
6
is the taxation
of capital gains
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wages. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
We have proposed a 13 percent increase for science and
technology programs in 1990. And we intend to double the
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
We are recommending a permanent extension of the R&E tax
for research and experimentation
credit to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
American public education needs more of our support -- and
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved.
We should look to the vitality of our system -- and work to
build strength through diversity.
Successful schools happen everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
9
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it. is.
10
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
America" simply mean "the best there is." "
Thank you. And God bless you.
11
Document No. 010588
action: Carole Kith
cc' Steve
WHITE HOUSE STAFFING MEMORANDUM
TGM.
MB
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FY
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
WINSTON
CARD
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
See notes on P.3 dp 6 - some are
corrections of fact.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
(Lange)
February 23, 1989
1989 FE3 24 /// 11: 20
4:30 p.m.
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language.
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor. "
Maybe I should have asked them to read my lips.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field."
You know, there are some who say that the sun is rising in
the Far East. Some even suggest that it's setting here at home.
Well, for them, I have news. The 21st century can be the next
American century -- if we understand the challenges before us,
and move to meet them together.
More than ever, the world is interconnected; interdependent;
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
data NB: FUMOED
1970
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
advantages we have -- and to create new ones.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
We've created 19 million new jobs in this country since the
recovery began. That's five times the number of jobs created in
two-thirds
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
NB-
Note : very
hencer dans we
65%
accordingto
Dren Japan stoned ulation has have mre and much to more the use than thruth; of the twice frie, if
SBA
3
Relative that Japan
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions, on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity,
and help to create more of it.
Americans are a diverse people. They don't want generic
solutions, when a problem is best solved at its source.
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved. What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a system of refundable tax credits,
4
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
Flexibility promotes creativity. It's always been the basis
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're
aware that we have new and important work to do. Ninety percent
of them said that American business is still too short-term
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
You need government that enables you to do what you know how to
do.
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential in the capital gains
tax -- cutting it to 15 percent on investments held for a year or
X
Note- the holding period is
more.
gradually phased up to 31 yr. to
promote long tern iNvestment
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise.
I call on anyone who talks about "leveling the playing
field" with our trading partners, to consider this:
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
6
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wages. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
We have proposed a 13 percent increase for science and
technology programs in 1990. And we intend to double the
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
We are recommending a permanent extension of the R&E tax
credit, to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
American public education needs more of our support -- and
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved.
We should look to the vitality of our system -- and work to
build strength through diversity.
Successful schools happen everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
9
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it is.
10
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
America" simply mean "the best there is."
Thank you. And God bless you.
11
V
February 27, 1989
MEMORANDUM FOR JIM CICCONI
FROM;
DENISE SCHWARZ
OFFICE OF CABINET AFFAIRS
SUBJECT;
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE
COUNCIL #010588
We have reviewed the remarks and have marked the changes on
the attached copy of the speech. I have transmitted the changes
directly to Chriss Winston.
Attachment
CC
Chriss Winston
Document No. 010588
WHITE HOUSE STAFFING MEMORANDUM
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
CARD
WINSTON
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
(Lange)
February 23, 1989
1000 FE3 24 (11:20
4:30 p.m.
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language.
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor. "
Maybe I should have asked them to read my lips.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field."
You know, there are some who say that the sun is rising in
the Far East. Some even suggest that it's setting here at home.
Well, for them, I have news. The 21st century can be the next
American century -- if we understand the challenges before us,
and move to meet them together.
More than ever, the world is interconnected; interdependent;
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
advantages we have -- and to create new ones.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
We've created 19 million new jobs in this country since the
recovery began. That's five times the number of jobs created in
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
3
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions, on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity,
and help to create more of it.
Americans are a diverse people. They don't want generic
solutions, when a problem is best solved at its source.
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved. What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a system of refundable tax credits,
4
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
Flexibility promotes creativity. It's always been the basis
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're
aware that we have new and important work to do. Ninety percent
of them said that American business is still too short-term
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
You need government that enables you to do what you know how to
do.
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential in the capital gains
tax -- cutting it to 15 percent on investments held for a year or
more.
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise.
I call on anyone who talks about "leveling the playing
field" with our trading partners, to consider this:
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
6
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wages. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
We have proposed a 13 percent increase for science and
technology programs in 1990. And we intend to double the
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
We are recommending a permanent extension of the R&E tax
credit, to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You. know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
American public education needs more of our support -- and
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved. It does no good to sit around
and complain only to allow for mediocricy to continue.
We should look to the vitality of our system -- and work to
build strength through diversity.
Successful schools happen everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
9
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it is.
10
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
America" simply mean "the best there is."
Thank you. And God bless you.
11
Revised
2/27/89
5:50 P.M-
February 27, 1989
MEMORANDUM FOR JIM CICCONI
FROM;
DENISE SCHWARZ
OFFICE OF CABINET AFFAIRS
SUBJECT;
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE
COUNCIL #010588
We have reviewed the remarks and have marked the changes on
the attached copy of the speech. I have transmitted the changes
directly to Chriss Winston.
Attachment
CC:
Chriss Winston
010588
Document No.
WHITE HOUSE STAFFING MEMORANDUM
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
WINSTON
CARD
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
(Lange)
February 23, 1989
4:30 p.m.
THIRES
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language.
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor. "
Maybe I should have asked them to read my lips.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field."
You know, there are some who say that the sun is rising in
the Far East. Some even suggest that it's setting here at home.
Well, for them, I have news. The 21st century can be the next
American century -- if we understand the challenges before us,
and move to meet them together.
More than ever, the world is interconnected; interdependent;
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
increased about 35%.
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
advantages we have -- and to create new ones.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
We've created 19 million new jobs in this country since the
recovery began. That's five times the number of jobs created in
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
3
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions, on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity,
and help to create more of it.
Americans are a diverse people. They don't want generic
solutions, when a problem is best solved at its source.
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved. What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a system of refundable tax credits,
4
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
Flexibility promotes creativity. It's always been the basis
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're
aware that we have new and important work to do. Ninety percent
of them said that American business is still too short-term
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
You need government that enables you to do what you know how to
do.
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential in the capital gains
Long term investments.
tax -- cutting it to 15 percent on investments held for a year or
more.
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise.
I call on anyone who talks about "leveling the playing
field" with our trading partners, to consider this:
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
6
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wages. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
We have proposed a 13 percent increase for science and
technology programs in 1990. And we intend to double the
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
We are recommending a permanent extension of the R&E tax
credit, to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
American public education needs more of our support -- and
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved. It does no good to sit around
and complain only to allow for mediocricy to continue.
We should look to the vitality of our system -- and work to
build strength through diversity.
Successful schools happen everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
9
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it is.
10
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
the U.S.A."
America" simply mean "the best there is."
Thank you. And God bless you.
11
Document No. 010588
WHITE HOUSE STAFFING MEMORANDUM
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
WINSTON
CARD
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
RESPONSE:
Jim- I made some comments. you have a black copy In you in box.
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
(Lange)
February 23, 1989
1200 FEB 24 11:23
4:30 p.m.
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
know
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language!
A
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor."
inqually inappropriate if taken it & signal Sapanese financial ?
Maybe I should have asked them to read my lips.)
markets.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
factors can Edwould tone this down]
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
The Prindent has used this phrase!
Please Delete!!
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field. "
No! hands like
bea of Japanese
You know, there are some who say that the sun is rising in dominance
the Far East Aria Some even suggest that it's setting here at home. in fact many
countries in
Well, for them, I have news. The 21st century can be the next aria are
American century -- if we understand the challenges before us, masperous.
e would
and move to meet them together.
Vewrite to: "ana
the economic center of the
More than ever, the world is interconnectedx interdependent,
other
world."
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
the nation of
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
eliminate the
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
work to establish
advantages we have -- and to create new ones, in new industries.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
here have been
We've created 19 million new jobs in this country since the
recovery began. 1982 That's five times the number of jobs created in
1982
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
Business
Figures we used in the
campaign was, &
3
think, 6/10.
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity.
and help to create more of it.
d would remite-
the paint Es that we
need diverse
Americans are a diverse people. [They don't want generic
adutions.
solutions, when a problem is best solved at its source
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a new system of refundable tax credits,
establish
a new Chichers and make care fox Inc exising credit credit for aswell low mcome
4
[A Phere is already 4 tax ''ld
make that rependable. we want to
establish another, new credit.
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
^
+
here.
Flexibility promotes creativity. It's always been the basis
no
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're also
aware that we have new and important work to do. Ninety percent
much oriented tarants the
of them said that American business is still too short-term,
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
good for business
You need government that enables you to do what you know how to
andgood for (fothey really know it if 90% say that business is on the wrong track?]
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential most in the capital gains
tax -- cutting it to 15 percent on investments held for a year or
more.
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise economic paner.
comment.
I call on anyone who talks about "leveling the playing
field" with our trading partners, to consider this:
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
6
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
Do have
paraphase Pukabir
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wagęs. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
Why restate the promise & from the campaign?
lithe andyet speech all 1l paid was
We have proposed a 13 percent increase for science and heap uson track
technology programs in 1990. And we intend to double the towards doubling NS
stayonts
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
Most prople know this as
explanation
We are recommending a permanent extension of the R&E tax
credit, to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
NO! in the campaign, we raid that everyone in education needato be more accountable
which implies more - piendly - criticism
all of
American public education needs more of our support.
and
h
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved.
We should look to the vitality of our system -- and work to
build strength through diversity.
are
Successful schools happen- everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative needed improvements.
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
This is still a qualitative shift 9 from the campaign rhetric.
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
Vigood
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it is.
Am d like this, although others
10
may not.
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
America" simply mean "the best there is."
Thank you. And God bless you.
11
THE WHITE HOUSE
2/27/89
WASHINGTON
MEMORANDUM to Chriss Winston
FROM:
Jim Pinkertor
P
RE:
Comments on SBLC Speech
My comments include input from Andy Card, who called me
after he failed to reach Mark Lange.
First, in general, we are concerned that the speech covers
too much ground. We suggest a tighter focus on the "lessons from
Asia" theme, especially the need for a capital gains tax rate
reduction to encourage entrepreneurship and strengthen American
competitiveness.
Here are some specific thoughts:
Page 2, paragraph 1: I think you will lose the audience
once you say "civil servants." I'd start instead with "They are
experienced men and women who know how to work with the private
sector "
Page 2, paragraph 2, line 3: I'd delete "in subtle ways. "
Page 2, paragraphs 3 and 4: I understand that John Gardner
has already recommended that you delete the whole "level playing
field" argument. I agree with John in view of the fact that the
President has also made the argument for "a level playing field.'
Also, I agree with John about the need to delete the "rising sun"
reference.
Page 4, paragraph 4: I think this is a fuzzy graf that does
not really advance the President's argument. I'd either clarify
or delete.
Page 5, last paragraph: As it reads, it tends to put the
blame solely on business. I'd add something like this at the
add
tail end: "Government, too, must plan for the long term. We
need to set policies that will promote business confidence:
later
holding the line on tax increases, reducing the deficit down to
zero, and stopping high inflation and interest rates."
Page 6, paragraph 2: As Andy said, we should beef up our
capital gains message, I'd add this at the end of the graf:
"For a long time now I have been saying that we must have a
competitive capital gains tax rate. If we are to retain the
American Edge, we must give entrepreneurs and small
businesspeople the incentive to keep dreaming and risking and
thus keeping the Great American Job Machine running."
Page 6, paragraph 3: West Germany is not "the most dynamic"
country in Europe. But you could say it has "the strongest
economy."
Page 7, paragraph 3: This graf seems to be hinting at
government investment in the economy. I'd rewrite as follows:
"I am committed to government policies that will allow business
to invest with an eye toward the long term to assume our
competitive future. "
Page 8, paragraph 2: I think this denunciation of "current
services budgeting" is good, but too cursory -- and it doesn't
even mention the phrase itself! I'd insert a sentence like "In
addition, we have proposed a major budget reform to put our
fiscal policy on a sound footing once and for all. We need to do
away with the wonderland concept of 'current services budgeting.'
Federal policy should not start out with the presumption that
government spending should go up and up. "
Page 10-11: I think the close is excellent.
Document No. 010588
WHITE HOUSE STAFFING MEMORANDUM
2/23/89
3:00 PM 2/27/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: SMALL BUSINESS LEGISLATIVE COUNCIL
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
CARD
WINSTON
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments/recommendations to Chriss Winston,
Rm. 122, x2930, by 3:00 PM, Monday, February 27, 1989, with an
info copy to my office. Thank you.
RESPONSE:
oh
you
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
(Lange)
February 23, 1989
4:30 p.m.
11:11:20
PRESIDENTIAL REMARKS:
SMALL BUSINESS LEGISLATIVE COUNCIL
WASHINGTON, D.C.
WEDNESDAY, MARCH 1, 1989
Thank you, [Bob]. It is good to be with you this afternoon.
As you may have heard, I just finished a tour through several
countries in the Pacific Rim.
They say that travel teaches tolerance. And it is true --
my hosts abroad were certainly tolerant of my experiments with
their language.
I think one of my toasts might as well have been translated
by the interpreter as: "Laugh politely at the peculiar American
humor. "
Maybe I should have asked them to read my lips.
This afternoon you've heard from Gregg Petersmeyer, Richard
Breeden, and [Elizabeth Dole / Robert Mosbacher] -- three key
members of the team here in Washington.
And now that you have a feeling for their ideas and
priorities, let me encourage you to work with them. Tell them
1
what you're thinking. They are civil servants in the truest
sense -- and they are looking for ways to make this a responsive
government, a government by the people.
While I was in Asia, I had a chance to think seriously about
what sets our trading partners apart from us. I realized that,
in subtle ways, we may have erected a barrier to our own success
-- and deprived ourselves of vital long-term investment that our
competitors have always enjoyed.
In a few minutes, I'm going to have a suggestion for those
who say that we have to "level the playing field."
You know, there are some who say that the sun is rising in
the Far East. Some even suggest that it's setting here at home.
Well, for them, I have news. The 21st century can be the next
American century -- if we understand the challenges before us,
and move to meet them together.
More than ever, the world is interconnected; interdependent;
and changing rapidly. More than at any point in human history,
our societies and economies rely one upon the other.
So competitiveness -- which seems to be on everybody's mind
these days -- takes on a challenging new angle. It means more
2
than just market share and earned income. And it's more than
a zero-sum, winner-take-all game.
Since 1980, world trade volume has nearly doubled. Almost
a fifth of our industrial production is now in exports. Goods
and services circle the globe overnight. Capital changes hands
in seconds.
In a world like that, all nations stand to benefit from the
growth of their trading partners -- as long as markets are free
and open.
This means that the goal of competitiveness is not simply
to disadvantage the competition. It is to better deploy the
advantages we have -- and to create new ones.
And that is why the work you do is so important. American
small business has always been our most creative source of
innovation and economic growth.
We've created 19 million new jobs in this country since the
recovery began. That's five times the number of jobs created in
Japan -- and small businesses are responsible for eight out of
ten of them. Operations like yours make America work.
3
By creating jobs, you create opportunity. And while I'm
President, government won't interfere with that. We will assure
that you have the freedom you need, to do what you do best.
Competitiveness demands two things: flexibility in the
marketplace, and the right kind of investment at home.
So we want to give employers and employees the flexibility
to work out their own solutions, on issues like parental leave
and health insurance. And we intend to promote the kind of
investment that will allow every American to share in prosperity,
and help to create more of it.
Americans are a diverse people. They don't want generic
solutions, when a problem is best solved at its source.
Government's creed should be to do no harm -- and to act only
when there is clear evidence that its interference will make
things better for people.
Decisions made -- and actions taken -- at the local level
very often better serve the interests of those involved. What
I'm talking about, here, is a fundamental American freedom:
the freedom to choose.
That's the driving principle behind our proposal on child
care. We want to create a system of refundable tax credits,
4
focused particularly on low-income parents. We mean to avoid
burdensome federal standards and regulation that would limit
family, church, and community-based care. We will examine the
liability insurance barriers for businesses interested in
providing child care options.
We would like to put solutions -- and dollars -- in the
hands of parents. We intend to promote choice in childcare.
Flexibility promotes creativity. It's always been the basis
for real achievements in business. So we need to find new ways
to encourage men and women to take risks. We need entrepreneurs
who will invest their time, talents, and resources to build
businesses. Unlock new markets. Unleash new technologies. And
create new jobs. People who bring to the marketplace competitive
products and quality services that are second to none in the
world.
You know what the challenges are.
Last year a large survey of CEOs suggested that while
American business leaders are inherently optimistic, they're
aware that we have new and important work to do. Ninety percent
of them said that American business is still too short-term
oriented.
5
I've built a business. Let me tell you, I know how tough
it is. I understand the pressures you face. You don't need a
lecture on the importance of savings and long-term investment.
You need government that enables you to do what you know how to
do.
Competitiveness demands the right kind of investment, yes.
That's one reason I support a differential in the capital gains
tax -- cutting it to 15 percent on investments held for a year or
more.
I see this as an important way to free up American
businesses, without distorting world markets. The economies of
the Pacific Rim -- the "four dragons" of Hong Kong, Singapore,
Taiwan, and South Korea -- along with West Germany, the most
dynamic country in Europe -- all exempt capital gains entirely
from tax. Japan also had no tax on capital gains during its
meteoric rise.
I call on anyone who talks about "leveling the playing
field" with our trading partners, to consider this:
By taxing capital gains, we impede our own progress --
and we turn the playing field into an uphill climb.
6
Restoring the capital gains differential would be a powerful
incentive for businesses to invest, to innovate, to grow, and to
create jobs.
For managers, it would ease some of the relentless pressure
of quarterly reporting -- and allow them to focus on longer-term
goals and operations, get a leg up in new markets, and apply new
techniques and technologies. For workers, it means more jobs, at
better wages. For all Americans, it means a real, competitive
difference in the world marketplace.
I am committed to a program of careful, systematic
investment to assure our competitive future. And our budget is
an important first step in that investment.
We have proposed a 13 percent increase for science and
technology programs in 1990. And we intend to double the
National Science Foundation's budget by 1993, to develop
engineering and scientific computing research centers -- and to
build the right links between university, government, and
industry labs.
We are recommending a permanent extension of the R&E tax
credit, to keep us at the forefront of technological innovation
-- especially in basic research.
7
And we want to encourage more domestic research by
multinationals, by stabilizing the R&E expense allocation rules.
The uncertainty brought on by expiring temporary rules has gone
on for two decades. Businesses should be able to make long-term
research plans in a stable climate. Creating that climate is
something government can -- should -- and will do.
We are determined to bring the deficit down -- with no new
taxes -- by following Gramm-Rudman-Hollings targets and using
actual spending as a frame of reference. You don't run your
operations in a wonderland of perpetually expanding baselines --
and neither should government.
But the most important investment we can make, to assure
a competitive future, is in training and education.
Jobs are becoming more demanding. The competition is
getting tougher. Labor markets are getting tighter. So we'll
need to do more to develop a highly-skilled, motivated, educated
workforce.
You know, when I was building an oil business, we invested
heavily in what was then a new technology -- off-shore drilling.
Early on, we lost a drilling rig to a storm off the coast of
Texas. I knew that whenever you consider an investment, you
8
rightly tend to focus on the risks involved.
But where training and education are concerned, the biggest
risk is to not get involved.
American public education needs more of our support -- and
less of our criticism. It's time to stop blaming the students --
stop blaming the schools -- stop blaming other institutions --
and start getting involved.
We should look to the vitality of our system -- and work to
build strength through diversity.
Successful schools happen everywhere -- from rural
communities to inner city neighborhoods. They are shaped by
people with high expectations, from both the public and private
sector, who work within the schools to bring about creative
change.
This way of looking at it means that we are all accountable
for the quality of our schools. We need to strengthen incentives
to do better -- and we have a program to do just that.
We will expand Head Start, reward superior schools, and
recognize outstanding teachers. We will establish a National
9
Science Scholars Program. We will work to free our schools from
the pestilence of drugs.
And we will be looking to you for help and guidance --
because good schools are good for business. Many of you are
already involved with local schools, doing important work for
the future of your communities, and your country. More can be
done. And I know you'll be there when we need you.
To compete successfully abroad, many of you will find
yourselves competing for workers at home. I know managers who
are seriously starting to worry about shortages of talented
people.
There is a larger, untapped source of talent in this
country. Such people are to be found and fostered among the
young and underskilled, who need training. The older and more
experienced, who need re-training. The disadvantaged, whose
lives can be turned to advantage. Disabled workers, who ask only
for a chance to prove their ability. Dual career families, who
need options.
Opportunity doesn't necessarily knock on the door. It may
be leaning against the wall or standing on the streetcorner,
needing only to be seen for what it is.
10
&
In this, we need your leadership. The very heart of our
ability to compete may depend on how well we enlist those who
have, until now, been on the outskirts of economic growth. They
will be needed.
Together we can build businesses that outwit, outmaneuver,
outproduce, and outperform the competition.
We can achieve the kind of competitive advantage that comes
from collective will. And we can make sure the words "Made in
America" simply mean "the best there is."
Thank you. And God bless you.
11