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Speech File Draft Files
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13485
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U.S. Chamber of Commerce, 5/1/89 [3]
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26
15
7
1
Revised 4/26 7:00 Pm
April 26, 1989
MEMORANDUM FOR CHRISS WINSTON
FROM;
DENISE SCHWARZ
OFFICE OF CABINET AFFAIRS
SUBJECT;
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
LOG #030268SS
We have reviewed the attached and have incorporated our
comments.
Attachment
CC: Jim Cicconi
THE WHITE HOUSE
WASHINGTON
CABINET AFFAIRS STAFFING MEMORANDUM
Date:
Number:
Due By:
5:00 P.M.
Subject:
Action
FYI
Action
FYI
ALL CABINET MEMBERS
CEA
Vice President
CEQ
State
OSTP
enclosed
-
Treasury
X
Defense
Justice
Interior
Comments-
Agriculture
Commerce
X
ok- Labor
X
Scowcroft
HHS
Porter
HUD
Breeden
Transportation
Cicconi (For WH Staffing)
Energy
Education
Veterans
OMB
Commento-USTR
X
Chief of Staff
UN
Executive Secretary for:
CIA
DPC
National Drug Policy
EPC
EPA
GSA
NASA
OPM
SBA
REMARKS:
Lehmann
RETURN TO:
David Q. Bates
Associate Director
Cabinet Secretary
Office of Cabinet Affairs
456-2174
456-2800
(1st Floor, West Wing)
(Room 235, OEOB)
030268SS
Document No.
WHITE HOUSE STAFFING MEMORANDUM
4/25/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
4/26/89 c.o.b.
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
ROGERS
BREEDEN
WINSTON
CARD
CICCONI
PINKERTON
DEMAREST
BOSKIN
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments directly to Chriss Winston,
Rm. 122, x2930, no later than c.o.b. Wednesday, April
26, 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
McGroarty/Simon
April 25, 1989
23
6:45 pm
Draft 3
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
WASHINGTON, D.C.
MAY 1, 1989
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanagka, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
economic system -- it's the death of economics. Nations the
world over are coming to recognize that free enterprise is the
wave of the future. That's a promising forecast for prosperity -
- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: today begins
78
the 77th month of uninterrupted economic growth in the American
economy.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
During the expansion
nearly
those 77 months, we've added over twenty million new jobs -- and
more Americans have moved up on the pay scale. Since 1982, the
number of jobs paying less than $5 dollars an hour is down 30%,
while jobs paying $10 or more dollars an hour have increased by
80%. Unemployment is at its lowest point in the past 15 years.
Since the expansion began
40 %
In those 77 months, America's industrial output is up 33% --
a GNP 29%
overall growth, up 26%. For those with an eye on the
international competition, that's a more rapid rate of growth
than Japan reports for that same period, and it's double that of
Europe.
And the expansion has been just as good to the average
19%
American family. Per capita personal income is up 178 -- and
that's take home "after tax" pay, adjusted for inflation. In
1987, median family income reached a new high -- and it's
continued to climb since then.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
76th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government so
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep federal
spending below the Gramm-Rudman target. And we haven't
sacrificed our social or national security responsibilities in
the process. The budget level we've agreed on will allow us to
discharge the critical duties of government. We'll be able to
provide for our national security, meet the needs of the
disadvantaged, and accelerate the funding of several high-
priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
terms, but as a percentage of our 6.3% annual GNP. We've cut the
FY 83
deficit in half, from a high of 5.7% of GNP in 1986, to a
3.2%
89
projected 2.98 in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
04/26/89
16:14
EXEC SEC
P.01
so let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions for
continued growth.
That's why I've called on Congress to restore the capital-gains
differential -- reducing the maximum tax rate to 15 percent. In 1990
alone, this step would bring in an extra 4.8 billion dollars, according
to Treasury estimates. That's the lion's share of the 5.3 billion
dollars we need in the way of "new revenues" under our budget
agreement -- and that 4.8 billion dollars is on the conservative
side since it leaves out the additional revenues due to the increased
economic activity spurred by the cut.
NOTE: Changes submitted for page 5, paragraph 2.
Commerce Dept.
5
In a growing economy, tax revenues will take care of
themselves. In 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in $80 billion dollars in
increased revenues, not through higher taxes, but under the
existing tax structure.
That's why I've called on Congress to cut the capital gains
tax. In 1990 alone, increased economic activity spurred by the a cut
S
This step
accordang h
in capital gains would bring an extra $4.8 billion dollars into
Tras.
J
the federal treasury. That's the lion's share of the $5.3
Est,,
billion dollars we need in the way of "new revenues" under our
that 4.8 billion dollar
budget agreement -- and my estimate is on the conservative side.
since it leaves out the additional revenues due to the increased cco.
ac
spurred
So let's not hunt for ways to wring another dollar in taxes
by the
out of our economy -- let's concentrate on creating conditions
cuts
for continued growth.
how
tax long-term cap. gain.
Let's take a look at what our competitors are doing. Canada Ja
2/3rds 2/3
taxe capital gains at about half the rate that we do. So do
Sweden and France. Japan's rate? A scant 5%. West Germany
exempts all long-term capital gains from any tax whatever -- and
four
among the newly industrialized economies of the Pacific rim, five
out of six have no capital gains tax at all.
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
Sweeden + France tax long-term cap. gains a approx 1/2 the
rate that we do.
6
but there are several other economic issues I want to discuss
here today.
which is
First, a pressing problem with important to our long term
fiscal health: the S&L situation. This Administration
recognized the immediate need to take action to stabilize the S&L
system. Less than three weeks after taking office, we sent to
Congress a comprehensive S&L reform plan -- one designed to stop
the dollar drain and deal with insolvent thrifts, and restore
confidence in the S&L system.
an S&L
The Senate passed my package with a resounding majority: 91
to 8. I urge the House to move quickly to give us the tools we
reform
need to repair the S&L system by passing my bill quickly -- with
its central provisions intact.
And I have a second message for Congress, as it debates an
increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
current
at the old $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
the studies that show a 10% increase in the minimum wage will
result in a loss of one hundred to two hundred thousand jobs.
What happens when minimum-wage workers open that pay
envelope expecting a fatter paycheck -- and find a pink slip
7
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
The global economy is a fundamental fact of économic life.
It is no longer possible to draw a sharp line between domestic
and international markets.
This Administration is committed to securing a truly free
Lee
attached
world trading system -- and we can't have free trade without fair
trade.
This is no time to wall off the American economy, in hopes
from
of securing U.S. companies against foreign competition. It is
USTR
high time to work with our trade partners to lower the barriers
to free and fair trade, for the benefit of all alike.
You have my word that the United States government will seek
with added energy to open up foreign markets now closed to U.S.
exports. Protectionism runs dead against a global trend towards
more open and extensive commerce between nations -- and I'm dead
set against protectionism. [pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
8
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.
APR 26 89 14:38 FROM USTR
PAGE 003
REDEAFT
The global economy is a fact of life. It is no longer
INSERT
possible to draw a sharp line between domestic and international
markets.
This Administration is committed to securing an open and
No
fair world trading system -- because fair trade provides
opportunity for America's competitiveness to come to the fore.
We have the ingenuity to be preeminent and the drive to
succeed. Entrepreneurs like you are our ace in the hole.
Our challenge is to make the most of this competitive edge.
That's why we will work vigorously to break down barriers abroad
while keeping markets open here at home.
If any country, including the United States, is fooled into
thinking that a closed market is a prosperous one, they are
wrong. Closed markets mean closed doors to opportunity. And
that means less prosperity.
April 26, 1989
MEMORANDUM TO CHRISS WINSTON
FROM:
ROGER PORTER
BILL ROPER
JIM PINKERTON
SUBJECT:
U.S. Chamber of Commerce Draft Speech
We think this is a very strong statement of the President's
economic principles. There are some good lines such as "castor
oil club. "
1,3,3
We suggest adding one of the President's trademark
lines to this sentence: "Nations the world over are coming to
recognize that free enterprise is the wave of the future -- part
of what I call the New Breeze that is sweeping the world.
[emphasis added]
2,2,1
The first quarter GNP figures which came out today
might be worth mentioning here.
April 26, 1989
MEMORANDUM FOR CHRISS WINSTON
FROM;
DENISE SCHWARZ
OFFICE OF CABINET AFFAIRS
SUBJECT;
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
LOG #030268SS
We have reviewed the attached and have incorporated our
comments.
Attachment
CC: Jim Cicconi
THE WHITE HOUSE
WASHINGTON
CABINET AFFAIRS STAFFING MEMORANDUM
Date:
Number:
Due By:
5:00 P.M.
Subject:
Action
FYI
Action
FYI
ALL CABINET MEMBERS
CEA
Vice President
CEQ
State
OSTP
Treasury
X
Defense
Justice
Interior
Comments-
Agriculture
Commerce
X
ok- Labor
X
Scowcroft
HHS
Porter
HUD
Breeden
Transportation
Cicconi (For WH Staffing)
Energy
Education
Veterans
OMB
Commento-USTR
X
Chief of Staff
UN
Executive Secretary for:
CIA
DPC
National Drug Policy
EPC
EPA
GSA
NASA
OPM
SBA
REMARKS:
Lehmann
RETURN TO:
David Q. Bates
Associate Director
Cabinet Secretary
Office of Cabinet Affairs
456-2174
456-2800
(1st Floor, West Wing)
(Room 235, OEOB)
030268SS
Document No.
WHITE HOUSE STAFFING MEMORANDUM
4/25/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
4/26/89 c.o.b.
SUBJECT:
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
WINSTON
CARD
CICCONI
PINKERTON
DEMAREST
BOSKIN
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments directly to Chriss Winston,
Rm. 122, x2930, no later than c.o.b. Wednesday, April
26, 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
McGroarty/Simon
April 25, 1989
6:45 pm
Draft 3
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
WASHINGTON, D.C.
MAY 1, 1989
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanagka, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
economic system -- it's the death of economics. Nations the
world over are coming to recognize that free enterprise is the
wave of the future. That's a promising forecast for prosperity -
- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: today begins
the 77th month of uninterrupted economic growth in the American
economy.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
those 77 months, we've added over twenty million new jobs -- and
more Americans have moved up on the pay scale. Since 1982, the
number of jobs paying less than $5 dollars an hour is down 30%,
while jobs paying $10 or more dollars an hour have increased by
80%. Unemployment is at its lowest point in the past 15 years.
In those 77 months, America's industrial output is up 33% --
overall growth, up 26%. For those with an eye on the
international competition, that's a more rapid rate of growth
than Japan reports for that same period, and it's double that of
Europe.
And the expansion has been just as good to the average
American family. Per capita personal income is up 17% -- and
that's take home "after tax" pay, adjusted for inflation. In
1987, median family income reached a new high -- and it's
continued to climb since then.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
76th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government so
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep federal
spending below the Gramm-Rudman target. And we haven't
sacrificed our social or national security responsibilities in
the process. The budget level we've agreed on will allow us to
discharge the critical duties of government. We'll be able to
provide for our national security, meet the needs of the
disadvantaged, and accelerate the funding of several high-
priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
terms, but as a percentage of our annual GNP. We've cut the
deficit in half, from a high of 5.7% of GNP in 1986, to a
projected 2.9% in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
5
In a growing economy, tax revenues will take care of
themselves. In 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in $80 billion dollars in
increased revenues, not through higher taxes, but under the
existing tax structure.
That's why I've called on Congress to cut the capital gains
tax. In 1990 alone, increased economic activity spurred by a cut
in capital gains would bring an extra $4.8 billion dollars into
the federal treasury. That's the lion's share of the $5.3
billion dollars we need in the way of "new revenues" under our
budget agreement -- and my estimate is on the conservative side.
So let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions
for continued growth.
Let's take a look at what our competitors are doing. Canada
taxes capital gains at about half the rate that we do. So do
Sweden and France. Japan's rate?
A scant 5%. West Germany
exempts all long-term capital gains from any tax whatever -- and
among the newly industrialized economies of the Pacific rim, five
out of six have no capital gains tax at all.
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
6
but there are several other economic issues I want to discuss
here today.
First, a pressing problem with important to our long term
fiscal health: the S&L situation. This Administration
recognized the immediate need to take action to stabilize the S&L
system. Less than three weeks after taking office, we sent to
Congress a comprehensive S&L reform plan -- one designed to stop
the dollar drain and deal with insolvent thrifts, and restore
confidence in the S&L system.
The Senate passed my package with a resounding majority: 91
to 8. I urge the House to move quickly to give us the tools we
need to repair the S&L system by passing my bill quickly -- with
its central provisions intact.
And I have a second message for Congress, as it debates an
increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
current
at the old $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
the studies that show a 10% increase in the minimum wage will
result in a loss of one hundred to two hundred thousand jobs.
What happens when minimum-wage workers open that pay
envelope expecting a fatter paycheck -- and find a pink slip
7
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
The global economy is a fundamental fact of économic life.
It is no longer possible to draw a sharp line between domestic
and international markets.
This Administration is committed to securing a truly free
See
world trading system -- and we can't have free trade without fair
attached
trade.
This is no time to wall off the American economy, in hopes
of securing U.S. companies against foreign competition. It is
high time to work with our trade partners to lower the barriers
to free and fair trade, for the benefit of all alike.
You have my word that the United States government will seek
with added energy to open up foreign markets now closed to U.S.
exports. Protectionism runs dead against a global trend towards
more open and extensive commerce between nations -- and I'm dead
set against protectionism. [pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
8
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.
APR 26 '89 14:38
FROM USTR
PAGE. 003
REDEAFT
The global economy is a fact of life. It is no longer
INSERT
possible to draw a sharp line between domestic and international
markets.
This Administration is committed to securing an open and
ON
fair world trading system -- because fair trade provides
n.
opportunity for America's competitiveness to come to the fore.
We have the ingenuity to be preeminent and the drive to
succeed. Entrepreneurs like you are our ace in the hole.
Our challenge is to make the most of this competitive edge.
That's why we will work vigorously to break down barriers abroad
while keeping markets open here at home.
If any country, including the United States, is fooled into
thinking that a closed market is a prosperous one, they are
wrong. Closed markets mean closed doors to opportunity. And
that means less prosperity.
Gary Edson 6850
030268SS
Document No.
WHITE HOUSE STAFFING MEMORANDUM
4/25/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
4/26/89 c.o.b.
SUBJECT:
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
M
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
WINSTON
CARD
CICCONI
PINKERTON
DEMAREST
BOSKIN
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments directly to Chriss Winston,
Rm. 122, x2930, no later than c.o.b. Wednesday, April
26, 1989, with an info copy to my office. Thank you.
RESPONSE:
Put speech
5n maybe be you put should mre lines app in the
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
McGroarty/Simon
April 25, 1989
25
6:45 pm
Draft 3
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
WASHINGTON, D.C.
MAY 1, 1989
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanagka, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
There is a new breeze
economic system -- it's the death of economics. A Nations the bloung
world over are coming to recognize that free enterprise is the
wave may of the future. That's a promising forecast for prosperity -
Stat
- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: today begins
the 77th month of uninterrupted economic growth in the American
economy.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
those 77 months, we've added over twenty million new jobs -- and
more Americans have moved up on the pay scale. Since 1982, the
number of jobs paying less than $5 dollars an hour is down 30%,
while jobs paying $10 or more dollars an hour have increased by
80%. Unemployment is at its lowest point in the past 15 years.
In those 77 months, America's industrial output is up 33% --
overall growth, up 26%. For those with an eye on the
international competition, that's a more rapid rate of growth
than Japan reports for that same period, and it's double that of
Europe.
And the expansion has been just as good to the average
American family. Per capita personal income is up 17% -- and
that's take home "after tax" pay, adjusted for inflation. In
1987, median family income reached a new high -- and it's
continued to climb since then.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
76th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government so
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep federal
spending below the Gramm-Rudman target. And we haven't
sacrificed our social or national security responsibilities in
the process. The budget level we've agreed on will allow us to
discharge the critical duties of government. We'll be able to
provide for our national security, meet the needs of the
disadvantaged, and accelerate the funding of several high-
priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
terms, but as a percentage of our annual GNP. We've cut the
deficit in half, from a high of 5.7% of GNP in 1986, to a
projected 2.9% in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
5
In a growing economy, tax revenues will take care of
themselves. In 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in $80 billion dollars in
increased revenues, not through higher taxes, but under the
existing tax structure.
That's why I've called on Congress to cut the capital gains
tax. In 1990 alone, increased economic activity spurred by a cut
in capital gains would bring an extra $4.8 billion dollars into
the federal treasury. That's the lion's share of the $5.3
billion dollars we need in the way of "new revenues" under our
budget agreement -- and my estimate is on the conservative side.
So let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions
for continued growth.
Let's take a look at what our competitors are doing. Canada
taxes capital gains at about half the rate that we do. So do
Sweden and France. Japan's rate?
A scant 5%. West Germany
exempts all long-term capital gains from any tax whatever -- and
among the newly industrialized economies of the Pacific rim, five
out of six have no capital gains tax at all.
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
6
but there are several other economic issues I want to discuss
here today.
First, a pressing problem with important to our long term
fiscal health: the S&L situation. This Administration
recognized the immediate need to take action to stabilize the S&L
system. Less than three weeks after taking office, we sent to
Congress a comprehensive S&L reform plan -- one designed to stop
the dollar drain and deal with insolvent thrifts, and restore
confidence in the S&L system.
The Senate passed my package with a resounding majority: 91
to 8. I urge the House to move quickly to give us the tools we
need to repair the S&L system by passing my bill quickly -- with
its central provisions intact.
And I have a second message for Congress, as it debates an
increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
at the old $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
the studies that show a 10% increase in the minimum wage will
result in a loss of one hundred to two hundred thousand jobs.
What happens when minimum-wage workers open that pay
envelope expecting a fatter paycheck -- and find a pink slip
7
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
The global economy is a fundamental fact of economic life.
It is no longer possible to draw a sharp line between domestic
and international markets.
This Administration is committed to securing a truly free
world trading system -- and we can't have free trade without fair
trade.
This is no time to wall off the American economy, in hopes
of securing U.S. companies against foreign competition. It is
high time to work with our trade partners to lower the barriers
to free and fair trade, for the benefit of all alike.
You have my word that the United States government will seek
with added energy to open up foreign markets now closed to U.S.
exports. Protectionism runs dead against a global trend towards
more open and extensive commerce between nations --
and I'm dead
set against protectionism.
[pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
8
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.
THE WHITE HOUSE
WASHINGTON
April 26, 1989
MEMORANDUM FOR CHRISS WINSTON
DEPUTY ASSISTANT TO THE PRESIDENT
FOR COMMUNICATIONS
FROM:
NELSON LUND NY
ASSOCIATE COUNSEL TO THE PRESIDENT
SUBJECT:
Presidential Remarks: U.S. Chamber of
Commerce
At the request of James W. Cicconi, Counsel's Office has reviewed
the captioned draft remarks. We have no legal objections.
We appreciate having had the opportunity to review these draft
remarks.
CC: James W. Cicconi
Simon edits
McGroarty/Simon
Rg
April 25, 1989
6:45 pm
Draft 3
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
WASHINGTON, D.C CONSTITUTION HALL
MONDHY, MAY 1, 1989
10:15 am
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanagka, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
economic system -- it's the death of economics. Nations the
world over are coming to recognize that free enterprise is the
wave of the future. That's a promising forecast for prosperity -
- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: today begins
the 77th month of uninterrupted economic growth in the American
economy.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
almost
those 77 months, we've added over twenty million new jobs -- and
more Americans have moved up on the pay scale. Since 1982, the
number of jobs paying less than $5 dollars an hour is down 30%,
while jobs paying $10 or more dollars an hour have increased by
80%. Unemployment is at its lowest point in the past 15 years.
In those 77 months, America's industrial output is up 33% --
overall growth, up 26%. For those with an eye on the
international competition, that's a more rapid rate of growth
than Japan reports for that same period, and it's double that of
Europe.
And the expansion has been just as good to the average
American family. Per capita personal income is up 17% -- and
that's take home "after tax" pay, adjusted for inflation. In
1987, median family income reached a new high -- and it's
continued to climb since then.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
76th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government so
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep federal
spending below the Gramm-Rudman target. And we haven't
sacrificed our social or national security responsibilities in
the process. The budget level we've agreed on will allow us to
discharge the critical duties of government. We'll be able to
provide for our national security, meet the needs of the
disadvantaged, and accelerate the funding of several high-
priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
are ting
terms, but as a percentage of our annual GNP. We ve cut the
deficit in half, from a high of 5.7% of GNP in 1986, to a
projected 2.9% in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
5
In a growing economy, tax revenues will take care of
themselves. In 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in $80 billion dollars in
increased revenues, not through higher taxes, but under the
existing tax structure.
That's why I've called on Congress to cut the capital gains
tax. In 1990 alone, increased economic activity spurred by a cut
in capital gains would bring an extra $4.8 billion dollars into
the federal treasury. That's the lion's share of the $5.3
billion dollars we need in the way of "new revenues" under our
budget agreement -- and my estimate is on the conservative side.
So let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions
for continued growth.
Let's take a look at what our competitors are doing. Canada S
maximum
taxratei tax rate is
the U.S. rate
the same is
taxes capital gains at about half the rate that we do. So do
true for Sweden and France. Japan's rate?
A scant 5%. West Germany
exempts all long-term capital gains from any tax whatever -- and
4
Hong Kong,
among the ^ newly industrialized economies of the Pacific rim, five
Korea + Taiwan
Singapore,
out of six have no capital gains tax at all.
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
6
but there are several other economic issues I want to discuss
here today.
First, a pressing problem with important to our long term
fiscal health: the S&L situation. This Administration
recognized the immediate need to take action to stabilize the S&L
proposed
system. Less than three weeks after taking office, we sent to
Congress a comprehensive S&L reform plan -- one designed to stop
the dollar drain and deal with insolvent thrifts, and restore
confidence in the S&L system.
The Senate passed my package with a resounding majority: 91
to 8. I urge the House to move quickly to give us the tools we
need to repair the S&L system by passing my bill quickly -- with
its central provisions intact.
And I have a second message for Congress, as it debates an
increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
at the old $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
that for each
the studies that show 10% increase in the minimum wage will
result in a loss of one hundred to two hundred thousand jobs will be
What happens when minimum-wage workers open that pay
destroyed,
envelope expecting a fatter paycheck -- and find a pink slip
7
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
The global economy is a fundamental fact of economic life.
It is no longer possible to draw a sharp line between domestic
and international markets.
This Administration is committed to securing a truly free
world trading system -- and we can't have free trade without fair
trade.
This is no time to wall off the American economy, in hopes
of securing U.S. companies against foreign competition. It is
high time to work with our trade partners to lower the barriers
to free and fair trade, for the benefit of all alike.
You have my word that the United States government will seek
with added energy to open up foreign markets now closed to U.S.
exports. Protectionism runs dead against a global trend towards
more open and extensive commerce between nations -- and I'm dead
set against protectionism. [pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
8
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.
Document No.
030268SS
WHITE HOUSE STAFFING MEMORANDUM
4/25/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
4/26/89 c.o.b.
SUBJECT:
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
CARD
WINSTON
CICCONI
PINKERTON
DEMAREST
BOSKIN
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments directly to Chriss Winston,
Rm. 122, x2930, no later than c.o.b. Wednesday, April
26, 1989, with an info copy to my office. Thank you.
RESPONSE: ok
GBW
4/26
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
THE WHITE HOUSE
WASHINGTON
OFFICE OF COMMUNICATIONS
FAX MESSAGE
DATE: 4/25/89
TIME: 705
am
pm
TO:
David Demarest
FROM:
Chriss Winston
9 of pages including this cover sheet
Machine messed
up again! Sending !
Transmission problems? Call the sender at 202-456-2930 202-456-
or cale 202-456-2930
McGroarty/Simon
April 25, 1989
6:45 pm
Draft 3
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
WASHINGTON, D.C.
MAY 1, 1989
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanagka, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
economic system -- it's the death of economics. Nations the
world over are coming to recognize that free enterprise is the
wave of the future. That's a promising forecast for prosperity -
- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: today begins
the 77th month of uninterrupted economic growth in the American
economy.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep federal
spending below the Gramm-Rudman target. And we haven't
sacrificed our social or national security responsibilities in
the process. The budget level we've agreed on will allow us to
discharge the critical duties of government. We'll be able to
provide for our national security, meet the needs of the
disadvantaged, and accelerate the funding of several high-
priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
terms, but as a percentage of our annual GNP. We've cut the
deficit in half, from a high of 5.7% of GNP in 1986, to a
projected 2.9% in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
5
In a growing economy, tax revenues will take care of
themselves. In 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in $80 billion dollars in
increased revenues, not through higher taxes, but under the
existing tax structure.
That's why I've called on Congress to cut the capital gains
tax. In 1990 alone, increased economic activity spurred by a cut
in capital gains would bring an extra $4.8 billion dollars into
the federal treasury. That's the lion's share of the $5.3
billion dollars we need in the way of "new revenues" under our
budget agreement -- and my estimate is on the conservative side.
So let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions
for continued growth.
Let's take a look at what our competitors are doing. Canada
taxes capital gains at about half the rate that we do. So do
Sweden and France. Japan's rate?
A scant 5%. West Germany
exempts all long-term capital gains from any tax whatever -- and
among the newly industrialized economies of the Pacific rim, five
out of six have no capital gains tax at all.
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
6
but there are several other economic issues I want to discuss
here today.
First, a pressing problem with important to our long term
fiscal health: the S&L situation. This Administration
recognized the immediate need to take action to stabilize the S&L
system. Less than three weeks after taking office, we sent to
Congress a comprehensive S&L reform plan -- one designed to stop
the dollar drain and deal with insolvent thrifts, and restore
confidence in the S&L system.
The Senate passed my package with a resounding majority: 91
to 8. I urge the House to move quickly to give us the tools we
need to repair the S&L system by passing my bill quickly -- with
its central provisions intact.
And I have a second message for Congress, as it debates an
increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
at the old $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
the studies that show a 10% increase in the minimum wage will
result in a loss of one hundred to two hundred thousand jobs.
What happens when minimum-wage workers open that pay
envelope expecting a fatter paycheck -- and find a pink slip
7
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
The global economy is a fundamental fact of economic life.
It is no longer possible to draw a sharp line between domestic
and international markets.
This Administration is committed to securing a truly free
world trading system -- and we can't have free trade without fair
trade.
This is no time to wall off the American economy, in hopes
of securing U.S. companies against foreign competition. It is
high time to work with our trade partners to lower the barriers
to free and fair trade, for the benefit of all alike.
You have my word that the United States government will seek
with added energy to open up foreign markets now closed to U.S.
exports. Protectionism runs dead against a global trend towards
more open and extensive commerce between nations --- and I'm dead
set against protectionism. [pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
those 77 months, we've added over twenty million new jobs -- and
more Americans have moved up on the pay scale. Since 1982, the
number of jobs paying less than $5 dollars an hour is down 30%,
while jobs paying $10 or more dollars an hour have increased by
80%. Unemployment is at its lowest point in the past 15 years.
In those 77 months, America's industrial output is up 33% --
overall growth, up 26%. For those with an eye on the
international competition, that's a more rapid rate of growth
than Japan reports for that same period, and it's double that of
Europe.
And the expansion has been just as good to the average
American family. Per capita personal income is up 17% -- and
that's take home "after tax" pay, adjusted for inflation. In
1987, median family income reached a new high -- and it's
continued to climb since then.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
76th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government SO
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
8
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.
BA
THE WHITE HOUSE
WASHINGTON
April 26, 1989
INFORMATION
MEMORANDUM FOR THE PRESIDENT
FROM: DANIEL McGROARTY Much
THROUGH: CHRISS WINSTON
W
SUBJECT: CHAMBER OF COMMERCE SPEECH
I. SUMMARY
The attached draft has been prepared for your address to the
U.S. Chamber of Commerce annual convention, 10:15 a.m., May
1, 1989, in Constitution Hall. The audience will be
approximately 2000 business owners and executives.
II. DISCUSSION
The Chamber of Commerce provides the perfect platform for a
discussion of urgent economic concerns, and our plans for
sustaining growth. The speech highlights the budget
agreement, states the case for a cut in the capital gains
tax, and lays out your positions on the minimum wage, S&L
reform, and international trade.
McGroarty/Simon
April 26, 1989
7:45 pm
PRESIDENTIAL REMARKS: U.S. CHAMBER OF COMMERCE
CONSTITUTION HALL
MAY 1, 1989
10:15 a.m.
[Introductory remarks
Acknowledgements of outgoing
Chmn. Bill Kanaga, incoming Chmn. John Clendenin, Pres. Dick
Lesher ]
I want to thank the Chamber of Commerce for providing me a
chance to deliver a May Day message, American-style. On May Day,
I always think about that celebration in the Soviet Union. All
those red banners
The big military parade
Even the
Economic Planning Ministry had a unit in the parade -- two
hundred economists marching along yelling, "Mayday! Mayday!"
Today, that is beginning to change. Even the socialist
world is beginning to see that socialism isn't just another
economic system -- it's the death of economics. There's a new
breeze blowing -- nations the world over are coming to recognize
that free enterprise is the wave of the future. That's a
promising forecast for prosperity -- and for world peace.
In the United States, the single most significant economic
indicator of this decade is up one, as of today: we have enjoyed
77 full months of the longest peacetime economic expansion in
American history.
Without a doubt, this long-running economic expansion has
been good for American business, and for the American worker. In
the past 77 months, we've added nearly twenty million new jobs --
and more Americans have moved up on the pay scale. Since 1982,
the number of jobs paying less than $5 dollars an hour is down
25%, while jobs paying $10 or more dollars an hour have increased
by 95%. Unemployment is at its lowest point in the past 15
years.
During this economic expansion, America's industrial output
is up 40% -- overall growth, up 29%. For those with an eye on
the international competition, that's more than double Europe's
industrial output, and slightly higher than Japan's.
And the expansion has been just as good to the average
American family. Per capita personal income is up 19% -- and
that's take home "after tax" pay, adjusted for inflation. Real
median family income has reached a new high.
That's quite an economic success story. Our challenge now
is to keep it going. We can -- and we will.
We've all heard the naysayers. I think there are a few out
there whose predictions of economic disaster are now in their
78th straight month
The naysayers are wrong -- but why? What they've
underestimated is the resilience, the remarkable responsiveness
of the free enterprise system. You can focus on government so
long, that you forget that it's the private sector that's home to
the innovation and economic creativity that powers this
expansion.
3
I've been a small businessman myself, starting out with an
idea, and building it into a business. I know the risks -- and
the rewards: the payoff in pride when you succeed
Actually, not that much has changed: I've still got
something in common with a lot of small businessmen in America.
I also work out of my house
Entrepreneurs know this simple truth: nothing wagered,
nothing won. That's why I want a government that prompts
entrepreneurs to take risks -- not a government that forces them
to take refuge.
That doesn't mean government's only job is simply to stand
back and step out of the way. There's plenty for the government
to do, to make sure commerce is free and fair, and to maintain a
climate where free enterprise can take place and prosper.
And today, the federal government's number one economic
priority is dealing with the deficit.
We've made a good start. The budget agreement Congress and
my Administration concluded two weeks ago will keep the federal
deficit below the Gramm-Rudman target. And we haven't sacrificed
our social or national security responsibilities in the process.
The budget level we've agreed on will allow us to discharge the
critical duties of government. We'll be able to provide for our
national security, meet the needs of the disadvantaged, and
accelerate the funding of several high-priority programs.
4
Our agreement sends a signal -- to the American people, and
to our trading partners: we're serious about getting that
deficit down.
And the deficit is coming down, not only in straight dollar
terms, but as a percentage of our annual GNP. We're cutting the
deficit by two-thirds, from a high of 6.3% of GNP in 1983, to a
projected 1.7% in 1990.
One word more about the budget agreement for 1990. We've
agreed to $5.3 billion dollars in "new revenues" as part of the
deal. You're going to hear a lot about those "new revenues" in
the months ahead -- so let me say my piece now.
First of all, let me assure you: "new revenues" isn't a
code word for new taxes. I've given my word many times, and I'll
give it again today: no new taxes means just that.
And I'll make it so clear that even the duck hunters among
us will understand: we won't raise taxes with word games. We
all know a tax when we see one -- and you won't see any in the
agreement I've signed onto.
I have news for the castor-oil club -- the gang that's
trying hard to get us to swallow new taxes. That's bad medicine
for the economy. The deficit exists because we over-spend -- not
because we're under-taxed.
I could be wrong, but I don't think there's a person in this
room ready to stand up and say they're undertaxed.
5
Let me tell you what my favorite source of new revenue is.
We don't have to raise tax rates -- we have to release the
energies of free enterprise.
In a growing economy, tax revenues will take care of
themselves. In fiscal 1990 alone -- thanks to expanding economic
activity -- the Treasury will take in more than $80 billion
dollars in increased revenues, not through higher taxes, but
under the existing tax structure.
So let's not hunt for ways to wring another dollar in taxes
out of our economy -- let's concentrate on creating conditions
for continued growth.
That's why I've called on Congress to restore the capital
gains differential. In 1990 alone, this step would bring an
extra $4.8 billion dollars into the federal treasury -- and that
doesn't count increased economic activity spurred by a lower tax
rate. That $4.8 billion is the lion's share of the $5.3 billion
we need in the way of "new revenues" under our budget agreement -
- and my estimate is on the conservative side.
Let's take a look at what our competitors are doing.
Canada's maximum capital gains tax rate is about half the U.S.
rate. The same is true for Sweden and France. Japan's rate?
A scant 5%. West Germany exempts all long-term capital gains
from any tax whatever -- and among the newly industrialized
economies of the Pacific rim, Singapore, Hong Kong and South
Korea have no capital gains tax at all.
6
Among our competitors, those low rates contribute to low
capital costs. Cutting our own capital gains rates would
encourage productive investment -- in addition to generating the
"new revenues" we need to meet our deficit reduction agreement.
I think the case for a capital gains cut is a strong one,
but there are several other economic issues I want to discuss
here today.
First, a pressing problem with important consequences for
our long term fiscal health: the S&L situation. This
Administration recognized the immediate need to take action to
stabilize the S&L system. Less than three weeks after taking
office, we sent to Congress a comprehensive S&L reform plan --
one designed to stop the dollar drain and deal with insolvent
thrifts, and restore confidence in the S&L system.
The Senate passed an S&L package with a resounding majority:
91 to 8. I urge the House to move quickly to give us the tools
we need to reform the S&L system by passing my bill quickly --
with its central provisions intact.
And I have a second message for the Congress, as it debates
an increase in the minimum wage. I've indicated my support for
increasing the minimum wage over three years to $4.25 an hour. I
also want to establish a six-month training wage for new workers
at the current $3.35 rate, and expand the exemption from minimum
wage requirements for all small businesses with annual sales
under half a million dollars.
7
It's time for those who want a higher wage to move beyond
the rhetoric, and take a look at the consequences. We all know
the studies that show a 10% increase in the minimum wage will
cost America between one hundred and two hundred thousand jobs
for those who need them most.
What happens when minimum-wage workers open that pay
envelope expecting a fatter paycheck -- and find a pink slip
instead? An irresponsible increase in the minimum wage will cost
jobs, as employers cut back to compensate for increased costs.
$4.25 is as far as I can go -- it's my first and final offer.
We must guard against conferring benefits by government
mandate, and leaving employers to cope with the costs. I share
your concern about legislative efforts to mandate medical and
parental leave. I also believe that choice in child care is best
made by parents -- not government -- and I know the Chamber of
Commerce supports the concept of choice.
There are some child care initiatives up on Capitol Hill --
well-intended initiatives -- that would increase government
intervention and crowd out parental choice. The child care tax
credit initiatives I've proposed preserve choice -- letting
parents decide whether to place their child in the care of a
relative, in a church-run center, or in a public day care
facility. Let's let parents decide what's right for themselves.
Finally, I'll close with a brief comment on an issue I know
is vital to those of you here today -- vital, in fact, to all
Americans in our evolving economy: International trade.
8
The global economy is à fact of life. It is no longer
possible to draw a sharp line between domestic and international
markets.
This Administration is committed to securing an open and
fair world trading system -- because fair trade provides
opportunities for America's competitiveness to come to the fore.
We have the ingenuity to be preeminent and the drive to
succeed. Entrepreneurs like you are our ace in the hole.
Our challenge is to make the most of this competitive edge.
That's why we will work vigorously to break down barriers abroad,
while keeping markets open here at home.
If any country -- including the United States -- is fooled
into thinking that a closed market can be a prosperous one,
they're wrong. Closed markets mean closed doors to opportunity -
- and that means less prosperity. [pause]
The Chamber of Commerce has always stood for economic
freedom -- and I know you share my view that there is no surer
route to prosperity and progress than the system of free
enterprise.
The message of the past 77 months is clear: We can keep the
economy strong, sustain the longest expansion in American
history, and ensure America a productive and prosperous future --
provided that government policies preserve the greatest possible
freedom for American enterprise to innovate, create and compete.
Thank you.