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Document No. 349020ss
WHITE HOUSE STAFFING MEMORANDUM
DATE:
9/9/92
ACTION/CONCURRENCE/COMMENT DUE BY: TODAY, 9/9 2:00p.m.
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SUBJECT:
THURSDAY, SEPT. 10
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCBRIDE
BAKER
x MOORE
SCOWCROFT
X MULLINS
DARMAN
PETERSMEYER
BATES
PORTER
BRADY
x PROVOST
BROMLEY
ROSS
CALIO
SMITH
DEMAREST
TUTWILER
FITZWATER
X
ZOELLICK
GRAY
BOSKIN taller ful phone
HOLIDAY
KAUFMAN
HOR
CALIO (JIM)
REMARKS:
Please fo
N/C
122, x2930,
no later
) this office.
Thank you
RESPONSE:
DEtroit Economic Club
-
throdurft.
calle
ILLIP D. BRADY
ant to the President
4:50pm
1 Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
September 8, 1992
2 SEP & Pil:27
MEMORANDUM FOR THE PRESIDENT
THROUGH:
STEVE PROVOST SP
FROM:
ANDY FERGUSON az
SUBJECT:
DETROIT ECONOMIC CLUB
On Thursday morning, September 10th you will deliver remarks
(38 mins., teleprompted) to 2,000 members of the Detroit Economic
Club. Your speech unveils your Agenda for American Renewal.
Your remarks are drawn exclusively from the Agenda.
Note: Given the significance of this speech, we wanted to be sure
you had an opportunity to review it during the day. We will be
refining it on Wednesday, but hoped to get general reaction from
you as we are doing so.
September 8, 1992
11:00 p.m.
AGENDA
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SEPTEMBER 10, 1992
DETROIT, MICHIGAN
Good morning, everyone. (Acknowledgments)
This morning I am releasing an Agenda for American Renewal.
And I've come here today to introduce it to you and the nation.
My agenda diagnoses the economic problems our nation faces,
lays out the principles that should guide us in the years ahead,
and explains the integrated approach I am pursuing to meet the
challenge.
Over the past weeks I have been discussing elements of my
economic agenda, and in the weeks ahead I will be expanding on
those and other ideas. The document I am releasing today shows
how the pieces fit together.
But let's begin this morning by stepping back, taking stock
of where we are as a great nation in the broader sweep of
history.
The American people have just completed the greatest mission
in the lifetime of our country -- the triumph of democratic
capitalism over imperial communism.
Today, this year, for the first time since December 1941,
the United States is not engaged in a war, hot or cold.
Throughout history, at the close of prolonged and costly
wars, victors have confronted the problem of securing a new basis
for peace and prosperity. The American people recognize that we
stand at such a watershed.
2
They sense the epic changes at work in the world and the
economy, the uneasiness that stirs the democracies who served as
our partners in the long struggle.
They feel the uneasiness in their own homes and communities;
and they see the difficulties of those who have felt change most
directly.
And they know that while we face an era of great
opportunity, we face great risks as well -- if we fail to make
the right choices, if we fail to engage this new world wisely.
But America has always possessed unique powers, and foremost
among them is the power of regeneration -- to transform anxiety
into opportunity. Only in America do we have the people, the
talents -- the principles and ideals -- to fully embrace the
world that opens before us.
For America to be safe and strong, we must meet the defining
challenge of the 1990s: to win the economic competition -- to win
the peace.
We must be a military superpower, an economic superpower,
and an export superpower.
My Agenda for Renewal asks that we look forward -- to open
new markets, prepare our people to work, strengthen our families,
-- to save and invest -- so that we can win.
Our renewal depends on economic growth -- but growth not for
the few at the expense of the many, not for the present at the
expense of the future.
3
In our country we have always prized an entrepreneurial
capitalism that grows from the bottom up, not the top down, a
prosperity that begins on Main Street and extends to Wall Street
-- not the other way around.
We have never been seduced by the view my opponent offers -
- of a government that accumulates capital by taxing it and
borrowing it from the people, and spending it according to an
industrial policy fashioned from the latest academic theories.
My agenda is for an inclusive, not an exclusive America --
and surely not for a reclusive one. My international economic
and trade strategy will guarantee our position as an export
superpower, extending our global economic reach in tandem with
our security presence -- to stretch beyond our borders so that we
can create more jobs within them.
At the same time, we need to foster at home the capabilities
Fundamet
that will keep us in the lead: radical changes in our education
unprovenents
system to prepare our children for a constantly changing
workplace; incentives for entrepreneurs and new technologies to
sharpen our competitive edge; job training and health care reform
to promote the economic security of our working men and women;
and new approaches for reaching out to those who have been left
behind, since in the century ahead we will need the aspirations
and energy of every American.
And finally, because our greatest strengths flow not from
government but from the personal initiative and energy of free
4
men and women, my agenda aims to check the growth of government,
and, in some important ways, to reverse it.
Fitted together, each overarching and underpinning the
other, the components of this agenda should renew America
according to her most cherished principles.
And this renewed America will be empowered toward a grand
goal: to nearly double the size of our economy, to $10 trillion,
by the early years of
the this next century. decate. cen tury.
To place my agenda in a larger context, let me turn briefly
to five profound changes now at work in our economy. When
Americans gather around the kitchen table at night, and talk
about how they' meet a mortgage, or pay the doctor's bill,
they're feeling these changes in their lives. And before the
changes have run their course, they will have forever altered the
way Americans buy and sell, work and create.
The first great change in our economy is ironically caused
by our very success in ending the Cold War. In the short run,
reductions in defense spending have meant painful lay-offs in
many industries, and we are taking steps to ease this transition.
But in the medium and long run, reductions in defense spending
will free up priceless skills and technologies for peacetime
growth.
Second, most of our industries are transforming themselves
from the old-style hierarchical organizations to so-called
flattened pyramids, emphasizing a skills-based workforce, "lean
production," and shorter product cycles. From castings to
5
computers, this is a revolution as dramatic as the one made
earlier this century, when Henry Ford led the country from craft-
based production to mass manufacturing.
While these changes are essential to maintaining our
competitive edge, they've come with a cost -- lay-offs and
cutbacks among both white- and blue-collar workers, who also must
worry about their health care and pensions. These hard-working
people need reassurance -- not only about their economic
security, but about preserving the sense of self-worth that only
work can provide.
The third change: while the 1980s brought us the greatest
peacetime expansion in our history, the boom also led too many
gov t?
companies and too many households to take on too much debt.
We have been paying down that debt -- and lower interest
rates have helped us do it. The process is largely over, but
consumers and companies remain cautious.
The fourth change involves our financial system. We entered
the '80s with a banking system designed 50 years earlier, a relic
in an era when billions of investment dollars can cross borders
(at the speed of light).
The late '70s threatened this anachronism with record
interest and inflation rates -- as well as newer, more
competitive financial services. The less efficient institutions
could not survive, obligating the federal government to protect
the savings of millions of Americans.
6
This process, too, is nearing its end. The result will be a
more flexible and efficient financial system. But for now,
lenders are cautious and, despite low rates, small businesses
still find access to credit difficult.
The most far-reaching of these five changes is the emergence
of a global economy. No nation is an island today. One out of
every six manufacturing jobs is directly tied to exports. The
crops sown from one out of every three acres of farmland is sold
abroad.
Consider three implications of the global economy: One, when
growth slows abroad, as it has recently, our own growth slows as
well. Two, America will only grow in the next century if it can
compete globally -- in every part of the world. And three, we
must seize every opportunity to open new markets, particularly
those with the greatest potential for expansion.
Now, in drafting an agenda for America's future, we had to
assess our strengths as well as our weaknesses. Conveniently,
the other side has discovered many weaknesses, very few
strengths. of course, they might find temporary political gain
in portraying an America past her prime and over the hill. But
they have no more right to argue, for partisan purposes, that our
economy is weaker than it is, than I have to underestimate our
problems.
Our strengths are real. The Misery Index -- the sum of
inflation and unemployment -- is 10.8 percent today, down from
19.6 percent in 1980.
7
Inflation stands at about three percent.
Interest rates are at a twenty year low.
The purchasing power of Americans gives us the highest
standard of living in the world.
We enjoy the highest home ownership rate of all major
industrialized countries.
We send 68 percent of our children on to higher education -
- more than any other country -- and well above Germany's 32
percent and Japan's 30 percent.
And with 5 percent of the world's population, we produce 25
percent of the world's total output.
I could go on, but I do not mean to suggest that all is well
-- that we do not need to lead and manage the changes
transforming our economy. But you can't chart the stars if you
think the sky is falling. Over the past 12 years we have almost
doubled the size of our economy. It's as if we created two extra
economies the size of Germany's from scratch.
How will we meet our goals? Before outlining the specifics
of my agenda, allow me to set out four principles. I believe
these principles are deeply embedded in the American creed -- for
the principles that must guide change are the principles that
must never change.
First, I believe America is a nation of special individuals,
not special interests. And individuals, in turn, draw strength
and protection from families and communities, not the Government.
8
Second, because the individual, not the government, is the
basis of a free society, an agenda for economic growth must
adhere to certain fundamentals: lower tax rates, limits on
Government spending, sound money, greater competition, less
economic regulation, and more open trade.
Third, government can build on these fundamentals by
offering opportunity and hope for individuals, families, and
communities. There is a conservative agenda for helping people,
for responding to their needs, by giving them the means, the
capabilities, and the confidence to make the decisions that
matter in life.
Finally, all our policies must be brought together
effectively if we are to prosper as a people and succeed as a
nation. Just as barriers between countries and companies fall in
the global economy, so too the traditional distinctions between
foreign and domestic, economic and security policies look
increasingly artificial. Our aim must be to execute our policies
as a unified program to make America secure and strong.
Therefore my Agenda for American Renewal calls for action on
six interconnected fronts. We face complex problems; no single
solution will suffice. The whole of our agenda will be greater
than the sum of its parts.
First, Challenging the World. During the Cold War, we built
a global security structure underpinned by military alliances
across the Atlantic and Pacific. In the same way, the post-Cold
War era requires a strategic economic and trade policy -- global
9
in scope, and underpinned by our status as an economic and export
superpower.
We are uniquely positioned to achieve this goal. As the
largest fully integrated market in the world, we wield leverage
with other countries that want access to our market.
As both a Pacific and a European power, we are tied to the
largest and most rapidly growing economies across both oceans.
And as the strongest nation in our hemisphere, we are looked
to for leadership by free economies emerging from Chile to
Mexico.
The same holds true for the newly born economies of Eastern
Europe and the former Soviet Union, where our values, our
products, even our language, carry a unique appeal. In Moscow
these days, the lines at McDonalds are longer than the lines at
Lenin's Tomb.
The key to America's growth, expansion, and innovation has
always been our openness to trade, investment, ideas, and people.
As this openness is at last being reciprocated around the world,
we find ourselves again at a special advantage.
The next steps in my strategic trade policy are to secure
Congressional approval of the North American Free Trade Agreement
and to complete the global trade negotiations, creating American
jobs and expanding the pool of customers for American products.
Let me emphasize: these agreements are steps, not ends in
themselves.
10
Our goal is to develop a strategic network of free trade
agreements across the Atlantic and the Pacific and in our own
hemisphere -- with Latin America; with Poland, Hungary and
Czechoslovakia; and countries across the Pacific.
As these external barriers fall, I believe we can reduce
internal barriers to competition as well -- in North America,
Western Europe, Japan, and elsewhere. Greater competition will
encourage entrepreneurial capitalism at the expense of government
power and entrenched interests, spurring still greater economic
growth.
Traveling around the country I have seen it happen already -
- particularly in our small businesses, as they reorient
themselves toward exports and international competition. A
couple of weeks ago, in St. Louis, I visited Public Safety
Equipment, Inc., a manufacturer of sirens, light-bars and other
safety devices. The president of Public Safety told me that a
few years ago, they recognized the time was long past when they
could sell their products in the fifty states and leave it at
that. So they took on the world. Now 35 percent of what they
make is sold in 66 countries.
Public Safety, and the hundreds of thousands of companies
like it, offer a glimpse into the future I envision for all
American business.
But a business is only as efficient, as resilient and smart,
as the people who keep its books and build its products and make
its strategy. Materials, machines, and methods will come and go,
11
but the American worker will remain the key to our economic
security. That brings me to the second component of my agenda:
Preparing Our Children.
The workplace of the 21st Century will be constantly
changing. We must prepare the American people for a lifetime of
learning, to keep a step ahead of that process of change.
Developed nations need developing minds.
The burden will fall on our educational system. As in the
past, education should be the ladder that children of modest
means can climb to better themselves.
Our current school system is not meeting these needs.
Designed for the 19th Century, it will collapse under the
pressures of the 21st. And it must be said: our educational
establishment is caught in the same time warp, where standing
still means falling behind.
Money alone is not the answer -- the United States already
spends more per pupil than any other country but Switzerland.
The answer is a radical overhaul of the system itself. If we
want to change our country, we've got to change our schools.
And the catalyst for change -- the one change that drives
all others -- is school choice, giving all parents the means and
freedom to choose which schools will best serve their children.
Competition is the principle that must underlie education reform.
And competition will not work unless parents are allowed to
choose their children's schools -- whether it's the public school
across town or the parochial school across the street.
12
Wealthy families already have this choice for their
children. Many people you saw at the Democratic National
Convention have choice for their children. Why shouldn't you
have choice for your children?
Consider one statistic: In Chicago, 47 percent of public
school teachers send their children to private schools. Clearly
they know something about monopoly education my opponent doesn't.
Our different approaches to education reform reveal the
great divide between my opponent and me. You will see the same
contrast in child care, health care, and a host of other issues.
The opposition prefers uniformity to variety and choice, relying
on government bureaucracies to offer "one-size-fits-all service."
I don't want to pull everyone down to make them equal. I want to
give everyone the tools to climb as high as they can dream.
Having prepared our children for the world of work, the
question remains what kind of work they will do. The third
component of my agenda for renewal is therefore: Sharpening
Businesses' Competitive Edge. Our ultimate success as an
economic superpower is dependent on the performance of our
private businesses -- on our success in encouraging
entrepreneurial capitalism.
The free market does not operate according to academic
theory or abstract industrial policies. It operates on common
sense. I learned my economics the way most of you did -- a lot
late nights sweating over a balance sheet, trying to meet a
payroll.
13
I saw that if people are allowed to keep more of what they
produce, they will produce more than they can use. The remainder
is called capital.
When capital is taxed lightly, it becomes abundant. When it
is taxed heavily, it becomes scarce -- available only to those at
the top, who need it least of all. That's not what I want.
the demand for
Bookin:
If capital were more abundant, however, labor would use become
scared
Wages would rise, unemployment lines would shrink.
That is what I want.
That's why I want enterprise zones in our inner cities and
rural areas. That's why I want to make the R & D tax credit
permanent. And that's why I want to cut the capital gains tax
and index it for inflation.
Those are the fundamentals. I also see three other ways to
sharpen the competitive edge of American business:
-- first, strengthening small business, by cutting taxes,
ensuring that credit is available, and by lifting the dead weight
of government regulation;
-- second, supporting civilian R&D, by bringing the
development, production and marketing of technology closer
to the consumer;
-- and third, reforming our costly legal system, which mires
even conscientious businesses and individuals in a swamp of
frivolous lawsuits. My product liability reform and Access to
Justice Act will drain the swamp.
14
Frankly, passage of these bills won't be easy. Trial
lawyers are a powerful vested interest -- well-represented in
Congress and high on the list of political contributors, as my
opponent well knows. But America will never lead the world in
the 21st Century until we learn to sue each other less and care
for each other more.
The most competitive companies in the coming decades will be
those that most involve their workers in the business at hand.
Working men and women will want to know that they can enjoy both
economic opportunity and security. That is the fourth component
of my agenda: Promoting Economic Security.
Again, common sense shows the way: True security will come
only by developing individual capability, not dependency. And
that independence, in turn, comes through the private sector, not
the government.
Government's role will be to ease the individual's
adjustment to a fast-changing marketplace.
This means, in practice, a wider and more flexible range of
job training and placement services -- for both the young and
old, the blue and white-collar worker, and particularly during
the present period, workers from our defense industries.
The pace of the new economy makes new job training
approaches necessary: most workers will have more than one
employer, often more than one career, over the course of their
working lives. This fact raises concerns as well about workers'
ability to preserve their pensions as they make those changes.
15
This summer I signed a law to increase pension portability, but
there is still much to do.
Economic security requires as well a major reform of our
health care system. The present system's uncontrollable costs
and inaccessible coverage is the cause of great unease, even
fear, throughout our economy.
My reforms, which I have outlined in detail elsewhere,
addresses the roots of these problems while preserving and
building on our system's strengths -- our state-of-the-art care,
over
openness to innovation, and diversity of consumer choice. Taken
how mandes?
together, my reforms would cut health care costs by $394 billion.
In health care, as in so many issues this year, we stand at
a crossroads. The path my opponents have chosen would place a
full 13 percent of our economy under the control of the federal
government -- meaning more bureaucracy, rationed care,
inefficient delivery of services, and, in the end, higher costs.
Let common sense be our guide: We must enhance competition
and market forces, not restrict them; we must preserve individual
choice, not hand decision-making over to centralized
bureaucracies; we must reduce the burden on employers and
employees, not bury them in a tide of new taxes and government
regulations. red tape - or unnesssary
Job training, retirement security, affordable health care:
When combined with a new system of education and entrepreneurial,
competitive business, we can offer genuine economic security to
our working men and women.
16
The programs I've outlined are based on the principles that
will empower all Americans to make their own choices and better
their lives. But I believe we need to do more for some of our
citizens who have been left behind. That is the sixth component
of my agenda: Leaving No One Behind.
The American Dream is nothing more or less than the belief
that all Americans can make a better life for their children.
The dream has made us the most dynamic society in the world; and
in the new century that dynamism will be essential to outpace the
economic competition. We can only turn it to our full advantage
if every American has a shot at making good on the dream.
I reject the shopworn logic that sees poverty as a simple
lack of income -- a kind of economic shortfall that can be
replaced with a government check. A conservative philosophy of
empowerment must have at its foundation the creation of
character, through the ownership of property and the dignity of
work. That means sweeping away the nightmare of crime from our
cities, building a core of property owners, creating business
incentives, and making individual discipline and self-reliance
the goal of all our programs. The human capital unleashed in
this way will do much to drive us forward into the 21st Century.
I call the final component of my Agenda -- "Rightsizing
Government. "
You'll recognize that I take the term from the business
world -- which has a lot to teach those of us in government. At
a time when companies across the country have been restructuring,
17
cutting fat, increasing efficiency -- all to prepare for the
economic competition of tomorrow -- the federal government faces
an obligation to do the same.
Today the federal government spends nearly twenty-four cents
of every dollar of the nation's income. That figure provides
vivid proof of what I have often said: Government is too big and
it spends too much.
A bloated federal government, serving itself seconds rather
than serving the people first, will weigh us down in the economic
race of a new era.
The Agenda I publish today contains specific proposals to
cut the fat: caps on the growth in mandatory spending and a
freeze on domestic spending; a balanced budget amendment and a
line-item veto; and a new mechanism -- a check-off box on tax
returns -- to give taxpayers the power to cut the deficit
themselves.
The size and structure of government are relics of a
different age -- artifacts more suited to the dilemmas of fifty
years ago than the problems of today. An American renewal will
require a streamlined government -- consolidating agencies,
tightening budgets, and cutting the salaries of highly paid
federal employees.
Unlike my opponent, I do not believe the American people are
undertaxed. Quite the opposite: I am committed to cutting taxes
across the board. Let me offer an illustration of what we could
do: If Congress had acted on the $130 billion in specific
18
spending cuts I have already proposed, we could cut income tax
rates by one percent age pount the board; reduce the small business
tax rate from 15 percent to 10 percent, and reduce the tax on
capital gains.
That is the direction I propose we go: to tax less and spend
less; and to redirect our current spending to serve the interests
of all Americans.
I honestly believe that this is the way -- the only way --
to control the size of the federal government. The facts are
painful but plain: For Congressmen, spending is power. And they
will exercise that power until they have spent every last dime
they can squeeze from the working men and women of America. It's
as simple as this: Raising taxes won't cut the deficit.
Here, then, is my Agenda for American Renewal. It comes at
a time unique in our history, a turning point, a moment when one
era is passing away and another is being born.
I intend to fight for this Agenda, to fight as hard as I can
to get as much as I can, and then I'm going to come back for
more. If Congress balks, I'll move forward anyway -- just as I
have done with education and welfare reform. I'll work with the
governors, with state and local governments, with the private
sector -- with anyone who shares the urge to renew our country.
With the close of the Cold War we can target peace,
prosperity and promise at home. The American people want that.
The American people deserve it.
19
At the same time, Americans recognize that the great events
of recent years have shaken the world. If we are to succeed, as
a nation and a people, if we are to hold true to all that has
made America the last, best hope of man on earth, then our
renewal at home must enable us to make the 21st Century yet
another American Century.
My Agenda draws together our people and our government to
meet this challenge. We will create a $10 trillion economy. We
will renew America. We will win the peace.
I want America to seize this moment. I want to stimulate
entrepreneurial capitalism, not punish it; I want to empower
people to make their own choices, not yoke them to new
bureaucracies. I want a government that spends less and taxes
less. And I will fight without hesitation for a free flow of
trade and capital and ideas around the world --- because Americans
compete, never retreat.
I know times have been difficult for many Americans. The
world we knew as children -- no matter your age -- will never be
the same. America will change -- that is our destiny; how it
will change will soon be decided.
I ask, when you step into that voting booth, to please
consider carefully whose agenda for change best fits America's
principles, our national experience, and our hopes for lasting
peace and prosperity.
XXX
DETROIT ECONOMIC CLUB
SEPTEMBER 10, 1992
DETROIT, MICHIGAN
GOOD MORNING, EVERYONE. (ACKNOWLEDGMENTS)
THIS MORNING I AM RELEASING AN AGENDA FOR AMERICAN
RENEWAL. AND I'VE COME HERE TODAY TO INTRODUCE IT TO
YOU AND THE NATION.
MY AGENDA DIAGNOSES THE ECONOMIC PROBLEMS OUR
NATION FACES, LAYS OUT THE PRINCIPLES THAT SHOULD GUIDE
US IN THE YEARS AHEAD, AND EXPLAINS THE INTEGRATED
APPROACH I AM PURSUING TO MEET THE CHALLENGE.
OVER THE PAST WEEKS I HAVE BEEN DISCUSSING ELEMENTS
OF MY ECONOMIC AGENDA, AND IN THE WEEKS AHEAD I WILL BE
EXPANDING ON THOSE AND OTHER IDEAS. THE DOCUMENT I AM
RELEASING TODAY SHOWS HOW THE PIECES FIT TOGETHER.
BUT LET'S BEGIN THIS MORNING BY STEPPING BACK,
TAKING STOCK OF WHERE WE ARE AS A GREAT NATION IN THE
BROADER SWEEP OF HISTORY.
- 2 -
THE AMERICAN PEOPLE HAVE JUST COMPLETED THE
GREATEST MISSION IN THE LIFETIME OF OUR COUNTRY -- THE
TRIUMPH OF DEMOCRATIC CAPITALISM OVER IMPERIAL
COMMUNISM.
TODAY, THIS YEAR, FOR THE FIRST TIME SINCE DECEMBER
1941, THE UNITED STATES IS NOT ENGAGED IN A WAR, HOT OR
COLD. THROUGHOUT HISTORY, AT THE CLOSE OF PROLONGED
AND COSTLY WARS, VICTORS HAVE CONFRONTED THE PROBLEM OF
SECURING A NEW BASIS FOR PEACE AND PROSPERITY. THE
AMERICAN PEOPLE RECOGNIZE THAT WE STAND AT SUCH A
WATERSHED.
WE SENSE THE EPIC CHANGES AT WORK IN THE WORLD AND
THE ECONOMY, THE UNEASINESS THAT STIRS THE DEMOCRACIES
WHO SERVED AS OUR PARTNERS IN THE LONG STRUGGLE.
WE FEEL THE UNEASINESS IN OUR OWN HOMES AND
COMMUNITIES; AND WE SEE THE DIFFICULTIES OF THEIR
NEIGHBORS AND FRIENDS WHO HAVE FELT CHANGE MOST
DIRECTLY.
- 3 -
AND WE KNOW THAT WHILE WE FACE AN ERA OF GREAT
OPPORTUNITY, WE FACE GREAT RISKS AS WELL -- IF WE FAIL
TO MAKE THE RIGHT CHOICES, IF WE FAIL TO ENGAGE THIS
NEW WORLD WISELY.
BUT AMERICA HAS ALWAYS POSSESSED UNIQUE POWERS, AND
FOREMOST AMONG THEM IS THE POWER OF REGENERATION -- TO
TRANSFORM UNCERTAINTY INTO OPPORTUNITY. ONLY IN
AMERICA DO WE HAVE THE PEOPLE, THE TALENTS -- THE
PRINCIPLES AND IDEALS -- TO FULLY EMBRACE THE WORLD
THAT OPENS BEFORE US.
FOR AMERICA TO BE SAFE AND STRONG, WE MUST MEET THE
DEFINING CHALLENGE OF THE 1990'S: TO WIN THE ECONOMIC
COMPETITION -- TO WIN THE PEACE.
WE MUST BE A MILITARY SUPERPOWER, AN ECONOMIC
SUPERPOWER, AND AN EXPORT SUPERPOWER.
- 4 -
MY AGENDA FOR RENEWAL ASKS THAT WE LOOK FORWARD --
TO OPEN NEW MARKETS, PREPARE OUR PEOPLE TO WORK,
STRENGTHEN OUR FAMILIES, -- SAVE AND INVEST -- so THAT
WE CAN WIN.
OUR RENEWAL DEPENDS ON ECONOMIC GROWTH -- BUT
GROWTH NOT FOR THE FEW AT THE EXPENSE OF THE MANY, NOT
FOR THE PRESENT AT THE EXPENSE OF THE FUTURE.
IN OUR COUNTRY WE HAVE ALWAYS PRIZED AN
ENTREPRENEURIAL CAPITALISM THAT GROWS FROM THE BOTTOM
UP, NOT THE TOP DOWN; A PROSPERITY THAT BEGINS ON MAIN
STREET AND EXTENDS TO WALL STREET -- NOT THE OTHER WAY
AROUND.
THAT'S THE LESSON I LEARNED AS A YOUNG MAN WHO
PACKED UP A STUDEBAKER AND MOVED TO TEXAS AFTER ANOTHER
WAR, AT THE START OF ANOTHER ERA. I SAW JOBS,
PROSPERITY -- AN ENTIRE FUTURE -- BUILT WITH THE HANDS
OF ORDINARY MEN AND WOMEN WITH EXTRAORDINARY DREAMS.
- 5 -
OUR NATION HAS NEVER BEEN SEDUCED BY THE MIRAGE MY
OPPONENT OFFERS -- OF A GOVERNMENT THAT ACCUMULATES
CAPITAL BY TAXING IT AND BORROWING IT FROM THE PEOPLE -
- AND THEN REDISTRIBUTING IT ACCORDING TO SOME
INDUSTRIAL POLICY. WE KNOW THAT THE CLUMSY HAND OF
GOVERNMENT IS NO MATCH FOR THE UPLIFTING HAND OF THE
MARKETPLACE.
MY INTERNATIONAL ECONOMIC AND TRADE STRATEGY WILL
GUARANTEE OUR POSITION AS AN EXPORT SUPERPOWER,
EXTENDING OUR GLOBAL ECONOMIC REACH IN TANDEM WITH OUR
SECURITY PRESENCE -- TO STRETCH BEYOND OUR BORDERS so
THAT WE CAN CREATE MORE JOBS WITHIN THEM.
- 6 -
AT THE SAME TIME, WE NEED TO FOSTER AT HOME THE
CAPABILITIES THAT WILL KEEP US IN THE LEAD: RADICAL
CHANGES IN OUR EDUCATION SYSTEM TO PREPARE OUR CHILDREN
FOR A CONSTANTLY CHANGING WORKPLACE; INCENTIVES FOR
ENTREPRENEURS AND NEW TECHNOLOGIES TO SHARPEN OUR
COMPETITIVE EDGE; JOB TRAINING AND HEALTH CARE REFORM
TO PROMOTE THE ECONOMIC SECURITY OF OUR WORKING MEN AND
WOMEN; AND NEW APPROACHES FOR REACHING OUT TO THOSE WHO
HAVE BEEN LEFT BEHIND, SINCE IN THE CENTURY AHEAD WE
WILL NEED THE ASPIRATIONS AND ENERGY OF EVERY AMERICAN.
AND FINALLY, BECAUSE OUR GREATEST STRENGTHS FLOW
NOT FROM GOVERNMENT BUT FROM THE PERSONAL INITIATIVE
AND ENERGY OF FREE MEN AND WOMEN, MY AGENDA AIMS TO
CHECK THE GROWTH OF GOVERNMENT, AND, IN SOME IMPORTANT
WAYS, TO REVERSE IT.
TOGETHER, THE COMPONENTS OF THIS AGENDA SHOULD
RENEW AMERICA ACCORDING TO HER MOST CHERISHED
PRINCIPLES.
- 7 -
AND THIS RENEWED AMERICA WILL BE EMPOWERED TOWARD A
GRAND GOAL: TO NEARLY DOUBLE THE SIZE OF OUR ECONOMY,
TO $10 TRILLION, BY THE EARLY YEARS OF THE NEXT
CENTURY.
TO PLACE MY AGENDA IN A LARGER CONTEXT, LET ME TURN
BRIEFLY TO FIVE PROFOUND CHANGES NOW AT WORK IN OUR
ECONOMY. WHEN AMERICANS GATHER AROUND THE KITCHEN
TABLE AT NIGHT, AND TALK ABOUT HOW THEY'LL MEET A
MORTGAGE, OR PAY THE DOCTOR'S BILL, THEY'RE FEELING
THESE CHANGES IN THEIR LIVES. AND BEFORE THE CHANGES
HAVE RUN THEIR COURSE, THEY WILL HAVE FOREVER ALTERED
THE WAY AMERICANS BUY AND SELL, WORK AND CREATE.
. 8 -
THE FIRST GREAT CHANGE IN OUR ECONOMY IS IRONICALLY
CAUSED BY OUR VERY SUCCESS IN ENDING THE COLD WAR. IN
THE SHORT RUN, REDUCTIONS IN DEFENSE SPENDING HAVE
MEANT PAINFUL LAY-OFFS IN MANY INDUSTRIES, AND WE ARE
TAKING STEPS TO EASE THIS TRANSITION. BUT IN THE
MEDIUM AND LONG RUN, REDUCTIONS IN DEFENSE SPENDING
WILL FREE UP PRICELESS SKILLS AND TECHNOLOGIES FOR
PEACETIME GROWTH.
SECOND, MOST OF OUR INDUSTRIES ARE TRANSFORMING
THEMSELVES FROM OLD-STYLE HIERARCHIES INTO FLATTER
ORGANIZATIONS, WITH FEWER LAYERS BETWEEN CUSTOMER AND
EXECUTIVE. THE NEW ORGANIZATIONS EMPHASIZE A SKILLS-
BASED WORKFORCE, "LEAN PRODUCTION," AND SHORTER PRODUCT
CYCLES. FROM CASTINGS TO COMPUTERS, THIS IS A
REVOLUTION AS DRAMATIC AS THE ONE MADE EARLIER THIS
CENTURY, WHEN HENRY FORD LED THE COUNTRY FROM CRAFT-
BASED PRODUCTION TO MASS MANUFACTURING.
- 9 -
WHILE THESE CHANGES ARE ESSENTIAL TO MAINTAINING
OUR COMPETITIVE EDGE, THEY'VE COME WITH A COST -- LAY-
OFFS AND CUTBACKS AMONG BOTH WHITE- AND BLUE-COLLAR
WORKERS. THESE HARD-WORKING PEOPLE NEED REASSURANCE -
- NOT ONLY ABOUT THEIR ECONOMIC SECURITY, BUT ABOUT
PRESERVING THE SENSE OF SELF-WORTH THAT ONLY WORK CAN
PROVIDE.
THE THIRD CHANGE: WHILE THE 1980'S BROUGHT US THE
GREATEST PEACETIME EXPANSION IN OUR HISTORY, THE BOOM
ALSO LED TOO MANY OF US TO TAKE ON TOO MUCH DEBT.
WE HAVE BEEN PAYING DOWN THAT DEBT -- AND LOWER
INTEREST RATES HAVE HELPED US DO IT. THE PROCESS IS
LARGELY OVER, BUT CONSUMERS AND COMPANIES REMAIN
CAUTIOUS.
- 10 -
THE FOURTH CHANGE INVOLVES OUR FINANCIAL SYSTEM.
WE ENTERED THE '80'S WITH A 50-YEAR-OLD BANKING SYSTEM,
DESIGNED FOR THE DAYS WHEN TELLERS WORE GREEN EYE-
SHADES, NOT FOR AN ERA WHEN BILLIONS OF INVESTMENT
DOLLARS CAN CROSS BORDERS AT THE SPEED OF LIGHT.
IN THE LATE '70'S, RECORD INTEREST AND INFLATION
RATES ROCKED THIS ANACHRONISTIC SYSTEM. THE LESS
EFFICIENT INSTITUTIONS COULD NOT SURVIVE, OBLIGATING
THE FEDERAL GOVERNMENT TO PROTECT THE SAVINGS OF
MILLIONS OF AMERICANS.
THIS PROCESS, Too, IS NEARING ITS END. OUR
FINANCIAL SYSTEM WILL BECOME MORE FLEXIBLE AND
EFFICIENT. BUT FOR NOW, LENDERS ARE CAUTIOUS AND,
DESPITE LOW INTEREST RATES, SMALL BUSINESSES STILL FIND
CREDIT HARD TO COME BY.
- 11 -
THE MOST FAR-REACHING OF THESE FIVE CHANGES IS THE
EMERGENCE OF A GLOBAL ECONOMY. NO NATION IS AN ISLAND
TODAY. ONE OUT OF EVERY SIX MANUFACTURING JOBS IS
DIRECTLY TIED TO EXPORTS. THE CROPS SOWN FROM ONE OUT
OF EVERY THREE ACRES OF FARMLAND ARE SOLD ABROAD.
CONSIDER SOME IMPLICATIONS OF THE GLOBAL ECONOMY:
WHEN GROWTH SLOWS ABROAD, AS IT HAS RECENTLY, OUR OWN
GROWTH SLOWS AS WELL. AND AMERICA WILL ONLY GROW IN
THE NEXT CENTURY IF WE CAN COMPETE GLOBALLY -- IN EVERY
PART OF THE WORLD. FINALLY, WE MUST SEIZE EVERY
OPPORTUNITY TO OPEN NEW MARKETS, PARTICULARLY THOSE
WITH THE GREATEST POTENTIAL FOR EXPANSION.
- 12 -
NOW, IN DRAFTING AN AGENDA FOR AMERICA'S FUTURE, WE
HAD TO ASSESS OUR STRENGTHS AS WELL AS OUR WEAKNESSES.
CONVENIENTLY, THE OTHER SIDE HAS DISCOVERED MANY
WEAKNESSES, VERY FEW STRENGTHS. OF COURSE, THEY MIGHT
FIND TEMPORARY POLITICAL GAIN IN PORTRAYING AN AMERICA
PAST HER PRIME AND OVER THE HILL. BUT THEY HAVE NO
MORE RIGHT TO ARGUE, FOR PARTISAN PURPOSES, THAT OUR
ECONOMY IS WEAKER THAN IT IS, THAN I HAVE TO UNDERSTATE
OUR PROBLEMS.
OUR STRENGTHS ARE REAL. THE MISERY INDEX -- THE
SUM OF INFLATION AND UNEMPLOYMENT -- IS 10.8 PERCENT
TODAY, DOWN FROM 19.6 PERCENT IN 1980.
INFLATION STANDS AT ABOUT THREE PERCENT.
INTEREST RATES ARE AT A TWENTY YEAR LOW.
THE PURCHASING POWER OF AMERICANS GIVES US THE
HIGHEST STANDARD OF LIVING IN THE WORLD.
- 13 -
WE ENJOY THE HIGHEST HOME OWNERSHIP RATE OF ALL
MAJOR INDUSTRIALIZED COUNTRIES.
WE SEND 68 PERCENT OF OUR CHILDREN ON TO HIGHER
EDUCATION
-- MORE THAN ANY OTHER COUNTRY -- AND WELL ABOVE
GERMANY'S 32 PERCENT AND JAPAN'S 30 PERCENT.
AND WITH 5 PERCENT OF THE WORLD'S POPULATION, WE
PRODUCE 25 PERCENT OF THE WORLD'S TOTAL OUTPUT -- AND
37 PERCENT OF ITS HIGH-TECH PRODUCTS.
I DO NOT MEAN TO SUGGEST THAT ALL IS WELL -- THAT
WE DO NOT NEED TO LEAD AND MANAGE THE CHANGES
TRANSFORMING OUR ECONOMY. BUT YOU CAN'T CHART THE
STARS IF YOU THINK THE SKY IS FALLING. OVER THE PAST
12 YEARS WE HAVE ALMOST DOUBLED THE SIZE OF OUR
ECONOMY. IT'S AS IF WE CREATED TWO EXTRA ECONOMIES THE
SIZE OF GERMANY'S FROM SCRATCH.
- 14 -
HOW WILL WE MEET OUR GOALS? BEFORE YOU HEAR THE
SPECIFICS OF MY AGENDA, LET ME TELL YOU A LITTLE BIT
ABOUT WHAT I BELIEVE -- BECAUSE CHANGE, IF IT IS TO BE
A FORCE FOR GOOD, MUST BE GUIDED BY PRINCIPLES. AND
THE PRINCIPLES THAT MUST GUIDE CHANGE ARE THE
PRINCIPLES THAT NEVER CHANGE.
I BELIEVE WE ARE A NATION OF SPECIAL INDIVIDUALS,
NOT SPECIAL INTERESTS.
INDIVIDUALS DRAW THEIR ENDURING STRENGTH FROM THEIR
FAMILIES, FROM THEIR NEIGHBORS AND COMMUNITIES, NOT
FROM THE GOVERNMENT. so I BELIEVE WE MUST NEVER ASK
GOVERNMENT TO DO WHAT FAMILIES AND NEIGHBORS AND
INDIVIDUALS CAN BETTER DO FOR THEMSELVES -- AND FOR ONE
ANOTHER.
- 15 -
I BELIEVE -- BECAUSE I'VE SEEN IT -- ECONOMIC
GROWTH COMES FROM THE SMALL BUSINESSWOMAN WHO TAKES A
RISK ON A NEW PRODUCT, FROM THE COMPUTER HACKER WORKING
IN A CLUTTERED GARAGE, FROM THE MERIT SCHOLAR IN SOUTH
CENTRAL L.A. WITH A FUTURE AS BIG AS HIS DREAMS.
AND I BELIEVE GOVERNMENT OWES IT TO THEM, AND TO
YOU, TO KEEP TAX RATES LOW AND MAKE THEM LOWER; TO KEEP
MONEY SOUND; TO LIMIT ITS OWN SPENDING AND REGULATIONS;
AND TO OPEN THE WAY FOR GREATER COMPETITION, AND FREER
TRADE.
BUT I DO NOT BELIEVE, AS SOME MIGHT, THAT
GOVERNMENT'S OBLIGATION ENDS THERE. AS A CONSERVATIVE
I BELIEVE THAT GOVERNMENT CAN HELP PEOPLE -- OFFER THEM
HOPE AND OPPORTUNITY -- BY GIVING THEM THE MEANS AND
THE CONFIDENCE TO MAKE THE DECISIONS THAT MATTER IN
LIFE.
- 16 -
MY BACKGROUND HAS ALSO PREPARED ME FOR THE TASK OF
BRINGING OUR FOREIGN POLICIES AND OUR DOMESTIC POLICIES
TOGETHER; TO TURN OUR STRENGTH AS A WORLD POWER TO OUR
ADVANTAGE AS AN ECONOMIC POWER; TO MATCH THE SECURITY
WE FEEL MILITARILY WITH THE ECONOMIC SECURITY WE MUST
BUILD AT HOME.
MY AGENDA FOR AMERICAN RENEWAL CALLS FOR ACTION ON
SIX INTERCONNECTED FRONTS. THERE IS NO SINGLE CAUSE OF
OUR PRESENT SITUATION. THERE CAN BE NO SINGLE CURE.
THE WHOLE OF OUR AGENDA WILL BE GREATER THAN THE SUM OF
ITS PARTS.
FIRST, CHALLENGING THE WORLD. DURING THE COLD WAR,
WE BUILT A GLOBAL SECURITY STRUCTURE WITH MILITARY
ALLIANCES ACROSS THE ATLANTIC AND PACIFIC. IN THE SAME
WAY, THE POST-COLD WAR ERA REQUIRES A STRATEGIC
ECONOMIC AND TRADE POLICY -- GLOBAL IN SCOPE, AND BUILT
ON OUR FOUNDATION AS AN ECONOMIC AND EXPORT SUPERPOWER.
- 17 -
WE ARE UNIQUELY POSITIONED TO ACHIEVE THIS GOAL.
AS THE LARGEST FULLY INTEGRATED MARKET IN THE WORLD,
WE WIELD LEVERAGE WITH OTHER COUNTRIES THAT WANT ACCESS
TO OUR MARKET.
AS BOTH A PACIFIC AND A EUROPEAN POWER, WE ARE TIED
TO THE LARGEST AND MOST RAPIDLY GROWING ECONOMIES
ACROSS BOTH OCEANS.
AND AS THE STRONGEST NATION IN OUR HEMISPHERE, WE
ARE LOOKED TO FOR LEADERSHIP BY FREE ECONOMIES EMERGING
FROM CHILE TO MEXICO.
THE SAME HOLDS TRUE FOR THE NEWLY BORN ECONOMIES OF
EASTERN EUROPE AND THE FORMER SOVIET UNION, WHERE OUR
VALUES, OUR PRODUCTS, EVEN OUR LANGUAGE, CARRY A UNIQUE
APPEAL. IN MOSCOW THESE DAYS, THE LINES AT MCDONALDS
ARE LONGER THAN THE LINES AT LENIN'S TOMB.
- 18 -
THE KEY TO AMERICA'S GROWTH, EXPANSION, AND
INNOVATION HAS ALWAYS BEEN OUR OPENNESS TO TRADE,
INVESTMENT, IDEAS, AND PEOPLE. AS THIS OPENNESS IS AT
LAST BEING RECIPROCATED AROUND THE WORLD, WE FIND
OURSELVES AGAIN AT A SPECIAL ADVANTAGE.
THE NEXT STEPS IN MY STRATEGIC TRADE POLICY ARE TO
SECURE CONGRESSIONAL APPROVAL OF THE NORTH AMERICAN
FREE TRADE AGREEMENT AND TO COMPLETE THE GLOBAL TRADE
NEGOTIATIONS, CREATING HIGH-WAGE AMERICAN JOBS AND
EXPANDING THE POOL OF CUSTOMERS HUNGRY FOR THE FRUITS
OF AMERICAN LABOR.
LET ME EMPHASIZE: THESE AGREEMENTS ARE STEPS, NOT
ENDS IN THEMSELVES.
so I WANT TO ANNOUNCE TODAY THAT IT'S MY GOAL TO
DEVELOP A STRATEGIC NETWORK OF FREE TRADE AGREEMENTS -
- WITH LATIN AMERICA; WITH POLAND, HUNGARY AND
CZECHOSLOVAKIA; AND WITH COUNTRIES ACROSS THE PACIFIC.
- 19 -
AND THEN, AS THESE EXTERNAL BARRIERS FALL, I
BELIEVE WE CAN HELP REDUCE INTERNAL BARRIERS TO
COMPETITION AS WELL -- IN NORTH AMERICA, WESTERN
EUROPE, JAPAN, AND ELSEWHERE. GREATER COMPETITION WILL
ENCOURAGE ENTREPRENEURIAL CAPITALISM AT THE EXPENSE OF
GOVERNMENT POWER AND ENTRENCHED INTERESTS, SPURRING
UNPRECEDENTED ECONOMIC GROWTH.
TRAVELING AROUND THE COUNTRY I HAVE SEEN IT HAPPEN
ALREADY -- PARTICULARLY IN SMALL BUSINESSES, AS THEY
STRENGTHEN THEMSELVES FOR INTERNATIONAL COMPETITION. A
COUPLE OF WEEKS AGO, IN ST. LOUIS, I VISITED PUBLIC
SAFETY EQUIPMENT, A MANUFACTURER OF THE LIGHT-BARS
YOU'VE SEEN ON POLICE CARS. THE PRESIDENT OF PUBLIC
SAFETY TOLD ME THAT A FEW YEARS AGO, THEY RECOGNIZED
THEY COULD NO LONGER JUST SELL THEIR PRODUCTS IN FIFTY
STATES AND LEAVE IT AT THAT. so THEY TOOK ON THE
WORLD. NOW 35 PERCENT OF WHAT THEY MAKE IS SOLD IN 48
COUNTRIES, CREATING GOOD JOBS RIGHT HERE.
- 20 -
PUBLIC SAFETY, AND THE HUNDREDS OF THOUSANDS OF
COMPANIES LIKE IT, OFFER A GLIMPSE INTO THE FUTURE I
SEE FOR ALL AMERICAN BUSINESS.
BUT A BUSINESS IS ONLY AS EFFICIENT, AS RESILIENT
AND INNOVATIVE, AS THE PEOPLE WHO KEEP ITS BOOKS AND
BUILD ITS PRODUCTS AND DEVISE ITS STRATEGY. MATERIALS,
MACHINES, AND METHODS WILL COME AND GO, BUT THE
AMERICAN WORKER WILL REMAIN THE KEY TO OUR ECONOMIC
SECURITY. THAT BRINGS ME TO THE SECOND PART OF MY
AGENDA: PREPARING OUR CHILDREN.
THE WORKPLACE OF THE 21ST CENTURY WILL BE
CONSTANTLY CHANGING. WE MUST PREPARE THE AMERICAN
PEOPLE FOR A LIFETIME OF LEARNING, TO KEEP A STEP AHEAD
OF THAT PROCESS OF CHANGE. DEVELOPED NATIONS NEED
DEVELOPING MINDS.
- 21 -
THE BURDEN WILL FALL ON OUR EDUCATIONAL SYSTEM. AS
IN THE PAST, EDUCATION SHOULD BE THE LADDER THAT
CHILDREN OF MODEST MEANS CAN CLIMB TO BETTER
THEMSELVES.
OUR CURRENT SCHOOL SYSTEM IS NOT UP TO THE TASK.
DESIGNED FOR THE 19TH CENTURY, IT WILL COLLAPSE UNDER
THE WEIGHT OF THE 21ST. AND OUR EDUCATIONAL
ESTABLISHMENT IS CAUGHT IN THE SAME TIME WARP, WHERE
STANDING STILL MEANS FALLING BEHIND.
MONEY ALONE IS NOT THE ANSWER -- THE UNITED STATES
ALREADY SPENDS MORE PER PUPIL THAN ANY OTHER COUNTRY
BUT SWITZERLAND. THE ANSWER IS A RADICAL OVERHAUL OF
THE SYSTEM ITSELF. IF WE WANT TO CHANGE OUR COUNTRY,
WE'VE GOT TO CHANGE OUR SCHOOLS.
- 22 -
AND THE CATALYST FOR CHANGE -- THE ONE REFORM THAT
DRIVES ALL OTHERS -- IS SCHOOL CHOICE, GIVING CHILDREN
SCHOLARSHIPS so THAT ALL PARENTS HAVE THE FREEDOM TO
CHOOSE WHICH SCHOOLS WILL BEST SERVE THEIR CHILDREN.
COMPETITION IS THE PRINCIPLE THAT MUST UNDERLIE
EDUCATION REFORM, TO BREAK THE ESTABLISHMENT'S MONOPOLY
ON THE SYSTEM. AND COMPETITION WILL NOT WORK UNLESS
PARENTS ARE ALLOWED TO CHOOSE THEIR CHILDREN'S SCHOOLS
-- WHETHER IT'S THE PUBLIC SCHOOL ACROSS TOWN OR THE
PAROCHIAL SCHOOL ACROSS THE STREET.
CONSIDER ONE STATISTIC: IN CHICAGO, 46 PERCENT OF
PUBLIC SCHOOL TEACHERS SEND THEIR CHILDREN TO PRIVATE
SCHOOLS. CLEARLY THEY KNOW SOMETHING ABOUT MONOPOLY
EDUCATION MY OPPONENT DOESN'T.
- 23 -
OUR DIFFERENT APPROACHES TO EDUCATION REFORM REVEAL
THE GRAND CANYON THAT DIVIDES ME AND MY OPPONENT. YOU
SEE THE SAME CONTRAST IN CHILD CARE, HEALTH CARE, AND A
HOST OF OTHER ISSUES. MY OPPONENT PREFERS UNIFORMITY
TO VARIETY AND CHOICE, RELYING ON GOVERNMENT
BUREAUCRACIES TO OFFER "ONE-SIZE-FITS-ALL SERVICE." I
DON'T WANT TO PULL EVERYONE DOWN TO MAKE THEM EQUAL. I
WANT TO GIVE EVERYONE THE TOOLS TO CLIMB AS HIGH AS
THEY CAN DREAM.
EVEN AS WE FIX OUR SCHOOLS, THE QUESTION REMAINS:
WILL THERE BE GOOD JOBS FOR OUR KIDS? THAT'S THE THIRD
PART OF MY AGENDA: SHARPENING BUSINESSES' COMPETITIVE
EDGE.
I LEARNED MY ECONOMICS THE WAY MOST OF YOU DID -- A
LOT OF LATE NIGHTS SWEATING OVER A BALANCE SHEET,
TRYING TO MEET A PAYROLL.
- 24 -
I SAW THAT IF PEOPLE ARE ALLOWED TO KEEP MORE OF
WHAT THEY PRODUCE, THEY WILL PRODUCE MORE. IT'S COMMON
SENSE.
WHEN CAPITAL IS TAXED LIGHTLY, THERE'S MORE OF IT.
WHEN IT IS TAXED HEAVILY, IT BECOMES SCARCE --
AVAILABLE ONLY TO THOSE WHO ARE ALREADY WEALTHY, WHO
NEED IT LEAST OF ALL. THAT'S NOT THE KIND OF ECONOMY I
WANT.
IF CAPITAL WERE MORE ABUNDANT, LABOR WOULD BE MORE
IN DEMAND, WAGES WOULD RISE, UNEMPLOYMENT LINES WOULD
SHRINK. THAT IS THE KIND OF ECONOMY I WANT.
THAT'S WHY I WANT ENTERPRISE ZONES IN OUR INNER
CITIES AND RURAL AREAS. THAT'S WHY I WANT TO MAKE THE
R & D TAX CREDIT PERMANENT. AND THAT'S WHY I WANT TO
CUT THE CAPITAL GAINS TAX AND INDEX IT FOR INFLATION.
- 25 -
THOSE ARE THE FUNDAMENTALS. I ALSO SEE THREE OTHER
WAYS TO SHARPEN THE COMPETITIVE EDGE OF AMERICAN
BUSINESS:
-- FIRST, STRENGTHENING SMALL BUSINESS, BY CUTTING
TAXES, ENSURING THAT CREDIT IS AVAILABLE, AND BY
LIFTING THE DEADWEIGHT OF GOVERNMENT REGULATION;
-- SECOND, SUPPORTING CIVILIAN R&D, BY BRINGING
THE DEVELOPMENT, PRODUCTION AND MARKETING OF
TECHNOLOGY CLOSER TO THE CONSUMER;
-- AND THIRD, REFORMING OUR LEGAL SYSTEM. EVERY
YEAR AMERICAN BUSINESS AND CONSUMERS SPEND UP TO $200
BILLION JUST IN DIRECT COSTS TO LAWYERS -- FAR MORE
THAN OUR COMPETITORS IN JAPAN AND EUROPE. MY PRODUCT
LIABILITY REFORM AND ACCESS TO JUSTICE ACT WILL RESTORE
RATIONALITY TO THE SYSTEM AND STOP UNDERMINING THE
AMERICAN WORKER.
- 26 -
AMERICA WILL NEVER LEAD THE WORLD IN THE 21ST
CENTURY UNTIL WE LEARN TO SUE EACH OTHER LESS AND CARE
FOR EACH OTHER MORE.
THE FOURTH PART OF MY AGENDA: PROMOTING ECONOMIC
SECURITY -- FOR WORKING MEN AND WOMEN.
AGAIN, COMMON SENSE SHOWS THE WAY: TRUE SECURITY
WILL COME ONLY BY DEVELOPING INDIVIDUAL CAPABILITY, NOT
DEPENDENCY. AND THAT INDEPENDENCE, IN TURN, COMES
THROUGH THE PRIVATE SECTOR, NOT THE GOVERNMENT.
GOVERNMENT'S ROLE WILL BE TO EASE THE INDIVIDUAL'S
ADJUSTMENT TO A FAST-CHANGING MARKETPLACE. THE AVERAGE
WORKER TODAY WILL CHANGE JOBS 10 TIMES OVER THE COURSE
OF HIS OR HER WORKING LIFE.
SO WE NEED A WIDER AND MORE FLEXIBLE RANGE OF JOB
TRAINING AND PLACEMENT SERVICES -- FOR BOTH THE YOUNG
AND OLD, THE BLUE AND WHITE-COLLAR WORKER, AND NOW
ESPECIALLY FOR WORKERS FROM OUR DEFENSE INDUSTRIES.
- 27 -
PENSIONS MUST BE PORTABLE -- AND HEALTH CARE MUST
BE AFFORDABLE. OUR HEALTH CARE SYSTEM TODAY PROVIDES
THE BEST CARE, BUT AT AN UNACCEPTABLE PRICE. MORE THAN
THIRTY MILLION AMERICANS HAVE NO HEALTH INSURANCE.
HEALTH CARE COSTS ARE THE FASTEST-RISING PART OF THE
BUDGET FOR GOVERNMENT, BUSINESSES, AND FAMILIES.
MY REFORMS GET TO THE ROOT OF THESE PROBLEMS WHILE
PRESERVING AND BUILDING ON OUR SYSTEM'S STRENGTHS --
OUR STATE-OF-THE-ART CARE, OPENNESS TO INNOVATION, AND
CONSUMER CHOICE. TAKEN TOGETHER, THEY WOULD CUT HEALTH
CARE COSTS BY $394 BILLION OVER FIVE YEARS.
MY OPPONENTS' PLAN WOULD EVENTUALLY PLACE A FULL 13
PERCENT OF OUR ECONOMY UNDER THE CONTROL OF THE FEDERAL
GOVERNMENT -- MEANING MORE BUREAUCRACY, RATIONED CARE,
INEFFICIENT SERVICE, AND, IN THE END, HIGHER COSTS.
- 28 -
LET COMMON SENSE BE OUR GUIDE: WE MUST ENHANCE
COMPETITION AND MARKET FORCES, NOT RESTRICT THEM; WE
MUST PRESERVE INDIVIDUAL CHOICE, NOT HAND DECISION-
MAKING OVER TO CENTRALIZED BUREAUCRACIES; WE MUST
REDUCE THE BURDEN ON EMPLOYERS AND EMPLOYEES, NOT BURY
THEM IN A TIDE OF NEW TAXES AND GOVERNMENT REGULATIONS.
JOB TRAINING, RETIREMENT SECURITY, AFFORDABLE
HEALTH CARE: COMBINING THESE WITH A NEW SYSTEM OF
EDUCATION AND CUTTING-EDGE, ENTREPRENEURIAL BUSINESS,
WE CAN OFFER GENUINE ECONOMIC SECURITY TO OUR WORKING
MEN AND WOMEN.
THE PROGRAMS I'VE OUTLINED ARE BASED ON THE
PRINCIPLES THAT WILL EMPOWER ALL AMERICANS TO MAKE
THEIR OWN CHOICES AND BETTER THEIR LIVES. BUT I
BELIEVE WE NEED TO DO MORE FOR SOME OF OUR CITIZENS WHO
HAVE BEEN LEFT BEHIND. THAT IS THE FIFTH COMPONENT OF
MY AGENDA: LEAVING NO ONE BEHIND.
- 29 -
THE AMERICAN DREAM IS NOTHING MORE OR LESS THAN THE
BELIEF THAT ALL AMERICANS CAN MAKE A BETTER LIFE FOR
THEIR CHILDREN. THE DREAM HAS MADE US THE MOST DYNAMIC
SOCIETY IN THE WORLD; IT'S YET ANOTHER STRENGTH WE CAN
DRAW UPON FOR THE CHALLENGE AHEAD. so WE MUST GIVE
EVERY AMERICAN A SHOT AT MAKING GOOD ON THE DREAM.
I REJECT THE SHOPWORN LOGIC THAT SEES POVERTY AS A
SIMPLE LACK OF INCOME -- A KIND OF ECONOMIC SHORTFALL
THAT CAN BE REPLACED WITH A GOVERNMENT CHECK. A
CONSERVATIVE PHILOSOPHY OF EMPOWERMENT MUST HAVE AT ITS
FOUNDATION THE CREATION OF CHARACTER, THROUGH THE
OWNERSHIP OF PROPERTY AND THE DIGNITY OF WORK. THAT
MEANS SWEEPING AWAY THE NIGHTMARE OF CRIME FROM OUR
CITIES, BUILDING A CORE OF PROPERTY OWNERS, CREATING
BUSINESS INCENTIVES, AND MAKING INDIVIDUAL DISCIPLINE
AND SELF-RELIANCE THE GOAL OF ALL OUR PROGRAMS. THE
HUMAN CAPITAL UNLEASHED IN THIS WAY WILL DRIVE US
FORWARD INTO THE 21ST CENTURY.
- 30 -
I CALL THE FINAL COMPONENT OF MY AGENDA --
"RIGHTSIZING GOVERNMENT."
YOU'LL RECOGNIZE THAT I TAKE THE TERM FROM THE
BUSINESS WORLD -- WHICH HAS A LOT TO TEACH THOSE OF US
IN GOVERNMENT. AT A TIME WHEN COMPANIES ACROSS THE
COUNTRY HAVE BEEN RESTRUCTURING, CUTTING FAT,
INCREASING EFFICIENCY -- ALL TO PREPARE FOR THE
ECONOMIC COMPETITION OF TOMORROW -- THE FEDERAL
GOVERNMENT FACES AN OBLIGATION TO DO THE SAME.
TODAY THE FEDERAL GOVERNMENT SPENDS NEARLY TWENTY-
FOUR CENTS OF EVERY DOLLAR OF THE NATION'S INCOME.
THAT'S THE FACT: GOVERNMENT IS TOO BIG AND IT SPENDS
TOO MUCH.
- 31 -
THE SIZE AND STRUCTURE OF GOVERNMENT ARE RELICS OF
A DIFFERENT AGE -- ARTIFACTS MORE SUITED TO THE
DILEMMAS OF FIFTY YEARS AGO THAN THE PROBLEMS OF TODAY.
EVERY INSTITUTION IN OUR SOCIETY HAS LEARNED THAT BY
PUSHING POWER DOWN THROUGH ORGANIZATIONS, BY USING
TECHNOLOGY TO SPEED THE FLOW OF INFORMATION, YOU DON'T
JUST SAVE MONEY, YOU IMPROVE PRODUCTIVITY. IT'S TIME
FOR GOVERNMENT TO DO THE SAME.
I WILL STREAMLINE GOVERNMENT -- CONSOLIDATING
AGENCIES, TIGHTENING BUDGETS, AND CUTTING THE SALARIES
OF HIGHLY PAID FEDERAL EMPLOYEES. AND I'LL START BY
CUTTING THE WHITE HOUSE BUDGET 33 PERCENT IF CONGRESS
CUTS ITS OWN BUDGET BY THE SAME AMOUNT. AND I'LL CUT
THE SALARIES OF ALL FEDERAL EMPLOYEES EARNING MORE THAN
$75,000 BY 5 PERCENT. TAXPAYERS HAVE TIGHTENED THEIR
BELTS. THE BETTER-PAID FEDERAL WORKERS SHOULD DO THE
SAME.
- 32 -
THE AGENDA I PUBLISH TODAY CONTAINS SPECIFIC
PROPOSALS TO CUT THE FAT: A CAP ON THE GROWTH IN
MANDATORY SPENDING -- WITHOUT TOUCHING SOCIAL SECURITY
-- AND A FREEZE ON DOMESTIC SPENDING; A BALANCED BUDGET
AMENDMENT AND A LINE-ITEM VETO; AND A NEW MECHANISM --
A CHECK-OFF BOX ON TAX RETURNS -- TO GIVE TAXPAYERS
THE POWER TO CUT THE DEFICIT THEMSELVES. I WILL FIGHT
TO REDUCE SPENDING AND INCREASE GROWTH SO WE CAN
BALANCE THE BUDGET.
UNLIKE MY OPPONENT, I DO NOT BELIEVE THE AMERICAN
PEOPLE ARE UNDERTAXED. QUITE THE OPPOSITE: I AM
COMMITTED TO CUTTING TAXES ACROSS THE BOARD. LET ME
OFFER AN ILLUSTRATION OF WHAT WE COULD DO: MY CAP ON
THE GROWTH OF MANDATORY SPENDING ALLOWS FOR POPULATION
GROWTH AND INFLATION, AND EXEMPTS SOCIAL SECURITY. BUT
THAT CAP ALONE WOULD SAVE ABOUT $300 BILLION OVER FIVE
YEARS. IF WE USED JUST THE $130 BILLION IN SPECIFIC
SPENDING CUTS I HAVE ALREADY PROPOSED, WE COULD CUT
INCOME TAX RATES ONE PERCENTAGE POINT ACROSS THE BOARD;
REDUCE THE SMALL BUSINESS TAX RATE FROM 15 PERCENT TO
10 PERCENT, AND REDUCE THE TAX ON CAPITAL GAINS.
- 33 -
THAT IS THE DIRECTION I WANT TO GO: TO TAX LESS,
SPEND LESS, CUT THE DEFICIT, AND REDIRECT OUR CURRENT
SPENDING TO SERVE THE INTERESTS OF ALL AMERICANS.
I HONESTLY BELIEVE THAT THIS IS THE WAY -- THE ONLY
WAY -- TO CONTROL THE SIZE OF THE FEDERAL GOVERNMENT.
THE FACTS ARE PAINFUL BUT PLAIN: FOR CONGRESSMEN,
SPENDING IS POWER. AND THEY WILL EXERCISE THAT POWER
UNTIL THEY HAVE SPENT EVERY LAST DIME THEY CAN SQUEEZE
FROM THE WORKING MEN AND WOMEN OF AMERICA. IT'S AS
SIMPLE AS THIS: RAISING TAXES WON'T CUT THE DEFICIT.
HERE, THEN, IS MY AGENDA FOR AMERICAN RENEWAL. IT
COMES AT A TIME UNIQUE IN OUR HISTORY, A TURNING POINT,
A MOMENT WHEN ONE ERA IS PASSING AWAY AND ANOTHER IS
BEING BORN.
- 34 -
IN THE AGENDA PUBLISHED TODAY, YOU'LL FIND 13
PROPOSALS THAT I INTEND TO ACHIEVE IN THE FIRST YEAR OF
MY SECOND TERM. I PRESENT THEM AS A SINGLE PROGRAM, A
UNIFIED STRATEGY TO MAKE CHANGE WORK FOR AMERICA.
OVER THE LAST THREE YEARS I'VE SHOWN HOW AMERICA
CAN CHANGE THE WORLD; AND WE'VE MADE A RESPECTABLE
START MANAGING THE CHANGE AT HOME. OUR PRIMARY TASK
NOW IS TO TARGET AMERICA.
I INTEND TO FIGHT FOR THIS AGENDA, TO FIGHT AS HARD
AS I CAN TO GET AS MUCH AS I CAN, AND THEN I'M GOING TO
COME BACK FOR MORE. IF CONGRESS BALKS, I'LL MOVE
FORWARD ANYWAY -- JUST AS I HAVE DONE WITH EDUCATION,
REGULATORY AND WELFARE REFORM. I'LL WORK WITH THE
GOVERNORS, WITH STATE AND LOCAL GOVERNMENTS, WITH THE
PRIVATE SECTOR -- WITH ANYONE WHO SHARES THE URGE TO
RENEW OUR COUNTRY.
- 35 -
THE AMERICAN PEOPLE KNOW THAT THE EVENTS OF RECENT
YEARS HAVE SHAKEN THE WORLD. WITH THE CLOSE OF THE
COLD WAR WE CAN ACHIEVE PEACE, PROSPERITY AND PROMISE
AT HOME. THE AMERICAN PEOPLE WANT THAT. THE AMERICAN
PEOPLE DESERVE THAT.
MY AGENDA DRAWS TOGETHER OUR PEOPLE AND OUR
GOVERNMENT TO MEET THIS CHALLENGE. WE WILL CREATE A
$10 TRILLION ECONOMY. WE WILL RENEW AMERICA. WE WILL
WIN THE PEACE.
I WANT AMERICA TO SEIZE THIS MOMENT. I WANT TO
STIMULATE ENTREPRENEURIAL CAPITALISM, NOT PUNISH IT; I
WANT TO EMPOWER PEOPLE TO MAKE THEIR OWN CHOICES, NOT
YOKE THEM TO NEW BUREAUCRACIES. I WANT A GOVERNMENT
THAT SPENDS LESS, REGULATES LESS, AND TAXES LESS. AND
I WILL FIGHT WITHOUT HESITATION FOR A FREE FLOW OF
TRADE AND CAPITAL AND IDEAS AROUND THE WORLD -- BECAUSE
AMERICANS NEVER RETREAT -- WE ALWAYS COMPETE.
- 36 - -
I KNOW TIMES HAVE BEEN DIFFICULT FOR MANY
AMERICANS. THE WORLD WE KNEW AS CHILDREN - -- NO MATTER
YOUR AGE -- -- WILL NEVER BE THE SAME. AMERICA WILL
CHANGE - -- THAT IS OUR DESTINY; HOW IT WILL CHANGE WILL
SOON BE DECIDED.
I ASK, AS YOU CONSIDER THE CHOICE YOU FACE, TO
CONSIDER CAREFULLY WHOSE AGENDA FOR CHANGE BEST FITS
AMERICA'S PRINCIPLES, OUR NATIONAL EXPERIENCE, AND OUR
HOPES FOR LASTING PEACE AND PROSPERITY.
# # #
349020
Document No.
WHITE HOUSE STAFFING MEMORANDUM
09/09/92
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB - 09/10
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCBRIDE
BAKER
MOORE
SCOWCROFT
MULLINS
DARMAN
PETERSMEYER
BATES
PORTER
BRADY
PROVOST
BROMLEY
ROSS
CALIO
SMITH
DEMAREST
TUTWILER
FITZWATER
ZOELLICK
GRAY
KAUFMAN
HOLIDAY
MCGROARTY
BOSKIN
HORNER
GROOMES
REMARKS:
The attached has been forwarded to the President.
RESPONSE:
PHILLIP D. BRADY
Assistant to the President
and Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
SEPTEMBER 9, 1992
S2 SEP 9 PIO : 22
MEMORANDUM FOR THE PRESIDENT
THROUGH:
STEVE PROVOST
FROM:
ANDY FERGUSON it
SUBJECT:
DETROIT ECONOMIC CLUB
Attached is the final version of your prepared remarks (40
minutes, teleprompter) to be delivered Thursday, September 10, to
the Detroit Economic Club.
September 9, 1992
10:30 p.m.
AGENDA
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SEPTEMBER 10, 1992
DETROIT, MICHIGAN
Good morning, everyone. (Acknowledgments)
This morning I am releasing an Agenda for American Renewal.
And I've come here today to introduce it to you and the nation.
My agenda diagnoses the economic problems our nation faces,
lays out the principles that should guide us in the years ahead,
and explains the integrated approach I am pursuing to meet the
challenge.
Over the past weeks I have been discussing elements of my
economic agenda, and in the weeks ahead I will be expanding on
those and other ideas. The document I am releasing today shows
how the pieces fit together.
But let's begin this morning by stepping back, taking stock
of where we are as a great nation in the broader sweep of
history.
The American people have just completed the greatest mission
in the lifetime of our country -- the triumph of democratic
capitalism over imperial communism.
Today, this year, for the first time since December 1941,
the United States is not engaged in a war, hot or cold.
Throughout history, at the close of prolonged and costly
wars, victors have confronted the problem of securing a new basis
2
for peace and prosperity. The American people recognize that we
stand at such a watershed.
We sense the epic changes at work in the world and the
economy, the uneasiness that stirs the democracies who served as
our partners in the long struggle.
We feel the uneasiness in our own homes and communities; and
we see the difficulties of their neighbors and friends who have
felt change most directly.
And we know that while we face an era of great opportunity,
we face great risks as well -- if we fail to make the right
choices, if we fail to engage this new world wisely.
But America has always possessed unique powers, and foremost
among them is the power of regeneration -- to transform
uncertainty into opportunity. Only in America do we have the
people, the talents -- the principles and ideals -- to fully
embrace the world that opens before us.
For America to be safe and strong, we must meet the defining
challenge of the 1990s: to win the economic competition -- to win
the peace.
We must be a military superpower, an economic superpower,
and an export superpower.
My Agenda for Renewal asks that we look forward -- to open
new markets, prepare our people to work, strengthen our families,
-- save and invest -- so that we can win.
3
Our renewal depends on economic growth -- but growth not for
the few at the expense of the many, not for the present at the
expense of the future.
In our country we have always prized an entrepreneurial
capitalism that grows from the bottom up, not the top down; a
hino
prosperity that begins on Main Street and extends to Wall Street
-- not the other way around.
That's the lesson I learned as a young man who packed up a
Studebaker and moved to Texas after another war, at the start of
another era. I saw jobs, prosperity -- an entire future -- built
with the hands of ordinary men and women with extraordinary
dreams.
Our nation has never been seduced by the mirage my opponent
offers -- of a government that accumulates capital by taxing it
and borrowing it from the people -- and then redistributing it
according to some industrial policy. We know that the clumsy
hand of government is no match for the uplifting hand of the
marketplace.
My international economic and trade strategy will guarantee
our position as an export superpower, extending our global
economic reach in tandem with our security presence -- to stretch
beyond our borders so that we can create more jobs within them.
At the same time, we need to foster at home the capabilities
that will keep us in the lead: radical changes in our education
system to prepare our children for a constantly changing
workplace; incentives for entrepreneurs and new technologies to
4
sharpen our competitive edge; job training and health care reform
to promote the economic security of our working men and women;
and new approaches for reaching out to those who have been left
behind, since in the century ahead we will need the aspirations
and energy of every American.
And finally, because our greatest strengths flow not from
government but from the personal initiative and energy of free
men and women, my agenda aims to check the growth of government,
and, in some important ways, to reverse it.
Together, the components of this agenda should renew America
according to her most cherished principles.
And this renewed America will be empowered toward a grand
goal: to nearly double the size of our economy, to $10 trillion,
by the early years of the next century.
To place my agenda in a larger context, let me turn briefly
to five profound changes now at work in our economy. When
Americans gather around the kitchen table at night, and talk
about how they'll meet a mortgage, or pay the doctor's bill,
they're feeling these changes in their lives. And before the
changes have run their course, they will have forever altered the
way Americans buy and sell, work and create.
The first great change in our economy is ironically caused
by our very success in ending the Cold War. In the short run,
reductions in defense spending have meant painful lay-offs in
many industries, and we are taking steps to ease this transition.
But in the medium and long run, reductions in defense spending
5
will free up priceless skills and technologies for peacetime
growth.
Second, most of our industries are transforming themselves
from old-style hierarchies into flatter organizations, with fewer
layers between customer and executive. The new organizations
emphasize a skills-based workforce, "lean production," and
shorter product cycles. From castings to computers, this is a
revolution as dramatic as the one made earlier this century, when
Henry Ford led the country from craft-based production to mass
manufacturing.
While these changes are essential to maintaining our
competitive edge, they've come with a cost -- lay-offs and
cutbacks among both white- and blue-collar workers. These hard-
working people need reassurance -- not only about their economic
security, but about preserving the sense of self-worth that only
work can provide.
The third change: while the 1980s brought us the greatest
peacetime expansion in our history, the boom also led too many of
us to take on too much debt.
We have been paying down that debt -- and lower interest
rates have helped us do it. The process is largely over, but
consumers and companies remain cautious.
The fourth change involves our financial system. We entered
the '80s with a 50-year-old banking system, designed for the days
when tellers wore green eye-shades, not for an era when billions
of investment dollars can cross borders at the speed of light.
6
In the late '70s, record interest and inflation rates rocked
this anachronistic system. The less efficient institutions could
not survive, obligating the federal government to protect the
savings of millions of Americans.
This process, too, is nearing its end. Our financial system
will become more flexible and efficient. But for now, lenders
are cautious and, despite low interest rates, small businesses
still find credit hard to come by.
The most far-reaching of these five changes is the emergence
of a global economy. No nation is an island today. One out of
every six manufacturing jobs is directly tied to exports. The
crops sown from one out of every three acres of farmland are sold
abroad.
Consider some implications of the global economy: When
growth slows abroad, as it has recently, our own growth slows as
well. And America will only grow in the next century if we can
compete globally -- in every part of the world. Finally, we must
seize every opportunity to open new markets, particularly those
with the greatest potential for expansion.
Now, in drafting an agenda for America's future, we had to
assess our strengths as well as our weaknesses. Conveniently,
the other side has discovered many weaknesses, very few
strengths. of course, they might find temporary political gain
in portraying an America past her prime and over the hill. But
they have no more right to argue, for partisan purposes, that our
7
economy is weaker than it is, than I have to understate our
problems.
Our strengths are real. The Misery Index -- the sum of
inflation and unemployment -- is 10.8 percent today, down from
19.6 percent in 1980.
Inflation stands at about three percent.
Interest rates are at a twenty year low.
The purchasing power of Americans gives us the highest
standard of living in the world.
We enjoy the highest home ownership rate of all major
industrialized countries.
We send 68 percent of our children on to higher education
-- more than any other country -- and well above Germany's 32
percent and Japan's 30 percent.
And with 5 percent of the world's population, we produce 25
percent of the world's total output -- and 37 percent of its
high-tech products.
I do not mean to suggest that all is well -- that we do not
need to lead and manage the changes transforming our economy.
prompter
But you can't chart the stars if you think the sky is falling.
Over the past 12 years we have almost doubled the size of our
economy. It's as if we created two extra economies the size of
Germany's from scratch.
How will we meet our goals? Before you hear the specifics
of my agenda, let me tell you a little bit about what I believe
8
-- because change, if it is to be a force for good, must be
guided by principles. And the principles that must guide change
are the principles that never change.
program
I believe we are a nation of special individuals, not
special interests.
Individuals draw their enduring strength from their
families, from their neighbors and communities, not from the
government. So I believe we must never ask government to do what
families and neighbors and individuals can better do for
themselves -- and for one another.
I believe -- because I've seen it -- economic growth comes
from the small businesswoman who takes a risk on a new product,
from the computer hacker working in a cluttered garage, from the
merit scholar in South Central L.A. with a future as big as his
dreams.
And I believe government owes it to them, and to you, to
keep tax rates low and make them lower; to keep money sound; to
limit its own spending and regulations; and to open the way for
greater competition, and freer trade.
But I do not believe, as some might, that government's
obligation ends there. As a conservative I believe that
government can help people -- offer them hope and opportunity --
by giving them the means and the confidence to make the decisions
that matter in life.
My background has also prepared me for the task of bringing
9
our foreign policies and our domestic policies together; to turn
our strength as a world power to our advantage as an economic
power; to match the security we feel militarily with the economic
security we must build at home.
My Agenda for American Renewal calls for action on six
interconnected fronts. There is no single cause of our present
situation. There can be no single cure. The whole of our agenda
will be greater than the sum of its parts.
First, Challenging the World. During the Cold War, we built
a global security structure with military alliances across the
Atlantic and Pacific. In the same way, the post-Cold War era
requires a strategic economic and trade policy -- global in
scope, and built on our foundation as an economic and export
superpower.
We are uniquely positioned to achieve this goal. As the
largest fully integrated market in the world, we wield leverage
with other countries that want access to our market.
As both a Pacific and a European power, we are tied to the
largest and most rapidly growing economies across both oceans.
And as the strongest nation in our hemisphere, we are looked
to for leadership by free economies emerging from Chile to
Mexico.
The same holds true for the newly born economies of Eastern
Europe and the former Soviet Union, where our values, our
products, even our language, carry a unique appeal. In Moscow
10
these days, the lines at McDonalds are longer than the lines at
Lenin's Tomb.
The key to America's growth, expansion, and innovation has
always been our openness to trade, investment, ideas, and people.
As this openness is at last being reciprocated around the world,
we find ourselves again at a special advantage.
The next steps in my strategic trade policy are to secure
Congressional approval of the North American Free Trade Agreement
and to complete the global trade negotiations, creating high-
wage American jobs and expanding the pool of customers hungry for
the fruits of American labor.
Let me emphasize: these agreements are steps, not ends in
themselves.
So I want to announce today that it's my goal to develop a
strategic network of free trade agreements -- with Latin America;
with Poland, Hungary and Czechoslovakia; and with countries
across the Pacific.
And then, as these external barriers fall, I believe we can
help reduce internal barriers to competition as well -- in North
America, Western Europe, Japan, and elsewhere. Greater
competition will encourage entrepreneurial capitalism at the
expense of government power and entrenched interests, spurring
unprecedented economic growth.
Traveling around the country I have seen it happen already -
- particularly in small businesses, as they strengthen themselves
for international competition. A. couple of weeks ago, in St.
11
Louis, I visited Public Safety Equipment, a manufacturer of the
light-bars you've seen on police cars. The president of Public
Safety told me that a few years ago, they recognized they could
no longer just sell their products in fifty states and leave it
at that. So they took on the world. Now 35 percent of what they
make is sold in 48 countries, creating good jobs right here.
Public Safety, and the hundreds of thousands of companies
like it, offer a glimpse into the future I see for all American
business.
But a business is only as efficient, as resilient and
innovative, as the people who keep its books and build its
products and devise its strategy. Materials, machines, and
methods will come and go, but the American worker will remain the
key to our economic security. That brings me to the second part
of my agenda: Preparing Our Children.
The workplace of the 21st Century will be constantly
changing. We must prepare the American people for a lifetime of
learning, to keep a step ahead of that process of change.
Developed nations need developing minds.
The burden will fall on our educational system. As in the
past, education should be the ladder that children of modest
means can climb to better themselves.
Our current school system is not up to the task. Designed
for the 19th Century, it will collapse under the weight of the
21st. And our educational establishment is caught in the same
time warp, where standing still means falling behind.
12
Money alone is not the answer -- the United States already
spends more per pupil than any other country but Switzerland.
The answer is a radical overhaul of the system itself. If we
want to change our country, we've got to change our schools.
And the catalyst for change -- the one reform that drives
all others -- is school choice, giving children scholarships SO
that all parents have the freedom to choose which schools will
best serve their children. Competition is the principle that
must underlie education reform, to break the establishment's
monopoly on the system. And competition will not work unless
parents are allowed to choose their children's schools -- whether
it's the public school across town or the parochial school across
the street.
Consider one statistic: In Chicago, 46 percent of public
school teachers send their children to private schools. Clearly
they know something about monopoly education my opponent doesn't.
Our different approaches to education reform reveal the
Grand Canyon that divides me and my opponent. You see the same
contrast in child care, health care, and a host of other issues.
My opponent prefers uniformity to variety and choice, relying on
government bureaucracies to offer "one-size-fits-all service. "
I
don't want to pull everyone down to make them equal. I want to
give everyone the tools to climb as high as they can dream.
Even as we fix our schools, the question remains: Will there
be good jobs for our kids? That's the third part of my agenda:
Sharpening Businesses' Competitive Edge.
13
I learned my economics the way most of you did -- a lot of
late nights sweating over a balance sheet, trying to meet a
payroll.
I saw that if people are allowed to keep more of what they
produce, they will produce more. It's common sense.
When capital is taxed lightly, there's more of it. When it
is taxed heavily, it becomes scarce -- available only to those
who are already wealthy, who need it least of all. That's not
the kind of economy I want.
If capital were more abundant, labor would be more in
demand, wages would rise, unemployment lines would shrink. That
is the kind of economy I want.
That's why I want enterprise zones in our inner cities and
rural areas. That's why I want to make the R & D tax credit
permanent. And that's why I want to cut the capital gains tax
and index it for inflation.
Those are the fundamentals. I also see three other ways to
sharpen the competitive edge of American business:
-- first, strengthening small business, by cutting taxes,
ensuring that credit is available, and by lifting the deadweight
of government regulation;
-- second, supporting civilian R&D, by bringing the
development, production and marketing of technology closer
to the consumer;
-- and third, reforming our legal system. Every year
American business and consumers spend up to $200 billion just in
14
direct costs to lawyers -- far more than our competitors in Japan
and Europe. My product liability reform and Access to Justice
Act will restore rationality to the system and stop undermining
the American worker.
America will never lead the world in the 21st Century until
we learn to sue each other less and care for each other more.
The fourth part of my agenda: Promoting Economic Security -
- for working men and women.
Again, common sense shows the way: True security will come
only by developing individual capability, not dependency. And
that independence, in turn, comes through the private sector, not
the government.
Government's role will be to ease the individual's
adjustment to a fast-changing marketplace. The average worker
today will change jobs 10 times over the course of his or her
working life.
So we need a wider and more flexible range of job training
and placement services -- for both the young and old, the blue
and white-collar worker, and now especially for workers from our
defense industries.
Pensions must be portable -- and health care must be
affordable. Our health care system today provides the best care,
but at an unacceptable price. More than thirty million Americans
have no health insurance. Health care costs are the fastest-
rising part of the budget for government, businesses, and
families.
15
My reforms get to the root of these problems while
preserving and building on our system's strengths -- our state-
of-the-art care, openness to innovation, and consumer choice.
Taken together, they would cut health care costs by $394 billion
over five years.
My opponents' plan would eventually place a full 13 percent
of our economy under the control of the federal government --
meaning more bureaucracy, rationed care, inefficient service,
and, in the end, higher costs.
Let common sense be our guide: We must enhance competition
and market forces, not restrict them; we must preserve individual
choice, not hand decision-making over to centralized
bureaucracies; we must reduce the burden on employers and
employees, not bury them in a tide of new taxes and government
regulations.
Job training, retirement security, affordable health care:
Combining these with a new system of education and cutting-edge,
entrepreneurial business, we can offer genuine economic security
to our working men and women.
The programs I've outlined are based on the principles that
will empower all Americans to make their own choices and better
their lives. But I believe we need to do more for some of our
citizens who have been left behind. That is the fifth component
of my agenda: Leaving No One Behind.
The American Dream is nothing more or less than the belief
that all Americans can make a better life for their children.
16
The dream has made us the most dynamic society in the world; it's
yet another strength we can draw upon for the challenge ahead.
So we must give every American a shot at making good on the
dream.
I reject the shopworn logic that sees poverty as a simple
lack of income -- a kind of economic shortfall that can be
replaced with a government check. A conservative philosophy of
empowerment must have at its foundation the creation of
character, through the ownership of property and the dignity of
work. That means sweeping away the nightmare of crime from our
cities, building a core of property owners, creating business
incentives, and making individual discipline and self-reliance
the goal of all our programs. The human capital unleashed in
this way will drive us forward into the 21st Century.
I call the final component of my Agenda -- "Rightsizing
Government."
You'll recognize that I take the term from the business
world -- which has a lot to teach those of us in government. At
a time when companies across the country have been restructuring,
cutting fat, increasing efficiency -- all to prepare for the
economic competition of tomorrow -- the federal government faces
an obligation to do the same.
Today the federal government spends nearly twenty-four cents
of every dollar of the nation's income. That's the fact:
Government is too big and it spends too much.
17
The size and structure of government are relics of a
different age -- artifacts more suited to the dilemmas of fifty
years ago than the problems of today. Every institution in our
society has learned that by pushing power down through
organizations, by using technology to speed the flow of
information, you don't just save money, you improve productivity.
It's time for government to do the same.
I will streamline government -- consolidating agencies,
tightening budgets, and cutting the salaries of highly paid
federal employees. And I'll start by cutting the White House
budget 33 percent if Congress cuts its own budget by the same
amount. with And fever I'll Congressional cut the staff salaries badgering us, of I all Know federal we can employees cut costs by that amount.
earning more than $75,000 by 5 percent. Taxpayers have tightened
their belts. The better-paid federal workers should do the same.
The Agenda I publish today contains specific proposals to
cut the fat: a cap on the growth in mandatory spending -- without
touching Social Security -- and a freeze on domestic spending; a
balanced budget amendment and a line-item veto; and a new
mechanism -- a check-off box on tax returns -- to give taxpayers
the power to cut the deficit themselves. I will fight to reduce
spending and increase growth so we can balance the budget.
Unlike my opponent, I do not believe the American people are
undertaxed. Quite the opposite: I am committed to cutting taxes
across the board. Let me offer an illustration of what we could
do: My cap on the growth of mandatory spending allows for
population growth and inflation, and exempts Social Security.
specifically
18
But that cap alone would save about $300 billion over five years.
If we used just the $130 billion in specific spending cuts I have
already proposed, we could cut income tax rates one percentage
point across the board; reduce the small business tax rate from
15 percent to 10 percent, and reduce the tax on capital gains.
That is the direction I want to go: to tax less, spend less,
cut the deficit, and redirect our current spending to serve the
interests of all Americans.
I honestly believe that this is the way -- the only way --
to control the size of the federal government. The facts are
painful but plain: For Congressmen, spending is power. And they
will exercise that power until they have spent every last dime
they can squeeze from the working men and women of America. It's
as simple as this: Raising taxes won't cut the deficit.
Here, then, is my Agenda for American Renewal. It comes at
a time unique in our history, a turning point, a moment when one
era is passing away and another is being born.
In the Agenda published today, you'll find 13 proposals that
I intend to achieve in the first year of my second term. I
present them as a single program, a unified strategy to make
change work for America.
Over the last three years I've shown how America can change
the world; and we've made a respectable start managing the change
at home. Our primary task now is to target America.
I intend to fight for this Agenda, to fight as hard as I can
to get as much as I can, and then I'm going to come back for
With a new Congress that can have as many as 150 new menbers ,Im optimistic
-- 19
more. If Congress balks, I'll move forward anyway -- just as I
have done with education, regulatory and welfare reform. I'll
work with the governors, with state and local governments, with
the private sector -- with anyone who shares the urge to renew
our country.
The American people know that the events of recent years
have shaken the world. With the close of the Cold War we can
achieve peace, prosperity and promise at home. The American
people want that. The American people deserve that.
My Agenda draws together our people and our government to
meet this challenge. We will create a $10 trillion economy. We
will renew America. We will win the peace.
I want America to seize this moment. I want to stimulate
entrepreneurial capitalism, not punish it; I want to empower
people to make their own choices, not yoke them to new
bureaucracies. I want a government that spends less, regulates
less, and taxes less. And I will fight without hesitation for a
free flow of trade and capital and ideas around the world --
because Americans never retreat-- we always compete.
I know times have been difficult for many Americans. The
world we knew as children -- no matter your age -- will never be
the same. America will change -- that is our destiny; how it
will change will soon be decided.
I ask, as you consider the choice you face, to consider
carefully whose agenda for change best fits America's
20
principles, our national experience, and our hopes for lasting
peace and prosperity.
XXX
Document No. 349020ss
TODD
WHITE HOUSE STAFFING MEMORANDUM
92 SEP 10 Ag: 50
DATE:
9/9/92
ACTION/CONCURRENCE/COMMENT DUE BY: TODAY, 9/9 2:00p.m.
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SUBJECT:
THURSDAY, SEPT. 10
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCBRIDE
BAKER
MOORE
SCOWCROFT
MULLINS
DARMAN
PETERSMEYER
BATES
PORT
BRADY
PROVOST
BROMLEY
ROSS
CALIO
SMITH
DEMAREST
TUTWILER
FITZWATER
ZOELLICK
GRAY
BOSKIN
HOLIDAY
KAUFMAN
HORNER
MCGROARTY
REMARKS:
Please forward your comments directly to Dan McGroarty, RM. 122, x2930,
no later than 2:00 p.m., TODAY, SEPTEMBER 9, with a copy to this office.
Thank you.
RESPONSE:
7080
336
PHILLIP D. BRADY
Assistant to the President
and Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
2
is
September 8, 1992
Pil:27
MEMORANDUM FOR THE PRESIDENT
THROUGH:
STEVE PROVOST
SP
FROM:
ANDY FERGUSON az
SUBJECT:
DETROIT ECONOMIC CLUB
On Thursday morning, September 10th you will deliver remarks
(38 mins., teleprompted) to 2,000 members of the Detroit Economic
Club. Your speech unveils your Agenda for American Renewal.
Your remarks are drawn exclusively from the Agenda.
Note: Given the significance of this speech, we wanted to be sure
you had an opportunity to review it during the day. We- will be
refining it on Wednesday, but hoped to get general reaction from
you as we are doing so.
September 8, 1992
11:00 p.m.
AGENDA
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB.
SEPTEMBER 10, 1992
DETROIT, MICHIGAN
Good morning, everyone. (Acknowledgments)
This morning I am releasing an Agenda for American Renewal.
And I've come here today to introduce it to you and the nation.
My agenda diagnoses the economic problems our nation faces,
lays out the principles that should guide us in the years ahead,
COMPREHENSIVE STRATELY
and explains the integrated approach I am pursuing to meet the
challenge.
Over the past weeks I have been discussing elements of my
economic agenda, and in the weeks ahead I will be expanding on
those and other ideas. The document I am releasing today shows
how the pieces fit together.
But let's begin this morning by stepping back, taking stock
of where we are as a great nation in the broader sweep of
history.
The American people have just completed the greatest mission
in the lifetime of our country -- the triumph of democratic
capitalism over imperial communism.
Today, this year, for the first time since December 1941,
the United States is not engaged in a war, hot or cold.
Throughout history, at the close of prolonged and costly
wars, victors have confronted the problem of securing a new basis
for peace and prosperity. The American people recognize that we
stand at such a watershed.
2
They sense the epic changes at work in the world and the
economy, the uneasiness that stirs the democracies who served as
our partners in the long struggle.
They feel the uneasiness in their own homes and communities;
and they see the difficulties of those who have felt change most
directly.
And they know that while we face an era of great
opportunity, we face great risks as well -- if we fail to make
the right choices, if we fail to engage this new world wisely.
But America has always possessed unique powers, and foremost
among them is the power of regeneration --- to transform anxiety
into opportunity. Only in America do we have the people, the
talents -- the principles and ideals -- to fully embrace the
world that opens before us.
For America to be safe and strong, we must meet the defining
challenge of the 1990s: to win the economic competition -- to win
the peace.
We must be a military superpower, an economic superpower,
and an export superpower.
My Agenda for Renewal asks that we look forward -- to open
new markets, prepare our people to work, strengthen our families,
IN INTHE NEXT CENTURY AS WE
-- to save and invest -- so that we can winy
Our renewal depends on economic growth -- but growth not for
the few at the expense of the many, not for the present at the
expense of the future.
HAVE IN THIS ONEO
3
In our country we have always prized an entrepreneurial
capitalism that grows from the bottom up, not the top down, a
prosperity that begins on Main Street and extends to Wall Street, in
not the other way around
We have never been seduced by the view my opponent offers -
- of a government that accumulates capital by taxing it and
borrowing it from the people, and spending it according to an
industrial policy fashioned from the latest academic theories.
My agenda is for an inclusive, not an exclusive America --
and surely not for a reclusive one. My international economic
and trade strategy will guarantee our position as an export
superpower, extending our global economic reach in tandem with
our security presence -- to stretch beyond our borders so that we
can create more jobs within them.
At the same time, we need to foster at home the capabilities
that will keep us in the lead: radical changes in our education
system to prepare our children for a constantly changing
workplace; incentives for entrepreneurs and new technologies to
sharpen our competitive edge; job training and health care reform
to promote the economic security of our working men and women;
and new approaches for reaching out to those who have been left
behind, since in the century ahead we will need the aspirations
and energy of every American.
And finally, because our greatest strengths flow not from
government but from the personal initiative and energy of free
4
men and women, my agenda aims to check the growth of government,
and, in some important ways, to reverse it.
Fitted together, each overarching and underpinning the
other, the components of this agenda should renew America
according to her most cherished principles.
And this renewed America will be empowered toward a grand
goal: to nearly double the size of our economy, to $10 trillion,
THE NEXT
by the early years of this century.
To place my agenda in a larger context, let me turn briefly
to five profound changes now at work in our economy. When
Americans gather around the kitchen table at night, and talk
FOR A HOSPITAL STAY
about how they'll meet a mortgage, or pay the decter's bill,
they're feeling these changes in their lives. And before the
changes have run their course, they will have forever altered the
way Americans buy and sell, work and create.
The first great change in our economy is ironically caused
by our very success in ending the Cold War. In the short run,
reductions in defense spending have meant painful lay-offs in
many industries, and we are taking steps to ease this transition.
But in the medium and long run, reductions in defense spending
will free up priceless skills and technologies for peacetime
growth.
Second, most of our industries are transforming themselves
from the old-style hierarchical BUREAUCRATIC organizations to so -called
LEAN AND REXIBLE ONES THAT EMPLOY HANDS-ON MANAGERS AND
flattened pyramids, emphasizing a skills based workforce, "lean "lean
HIGHLY SKILLED WORKERSO
production, and shorter product cycles. From castings to
5
computers, this is a revolution as dramatic as the one made
earlier this century, when Henry Ford led the country from craft-
based production to mass manufacturing.
While these changes are essential to maintaining our
SHORT TERM
competitive edge, they've come with aYcost -- lay-offs and
cutbacks among both white- and blue-collar workers, who must
worry about their health care and pensions. These hard-working
people need reassurance -- not only about their economic
security, but about preserving the sense of self-worth that only
work can provide.
The third change: while the 1980s brought us the greatest
peacetime expansion in our history, the boom also led too many
companies and too many households to take on too much debt.
We have been paying down that debt -- and lower interest
rates have helped us do it. The process is largely over, but
consumers and companies remain cautious.
The fourth change involves our financial system. We entered
the '80s with a banking system designed 50 years earlier, a relic
in an era when billions of investment dollars can cross borders
at the speed of light.
The late '70s threatened this anachronism with record
interest and inflation rates -- as well as newer, more
competitive financial services. The less efficient institutions
could not survive, obligating the federal government to protect
the savings of millions of Americans.
6
This process, too, is nearing its end. The result will be a
more flexible and efficient financial system. But for now,
lenders are cautious and, despite low rates, small businesses
still find access to credit difficult.
The most far-reaching of these five changes is the emergence
of a global economy. No nation is an island today. One out of
every six manufacturing jobs is directly tied to exports. The
crops sown from one out of every three acres of farmland is sold
abroad.
Consider three implications of the global economy: One, when
growth slows abroad, as it has recently, our own growth slows as
well. Two, America will only grow in the next century if it can
compete globally -- in every part of the world. And three, we
must seize every opportunity to open new markets, particularly
those with the greatest potential for expansion.
Now, in drafting an agenda for America's future, we had to
assess our strengths as well as our weaknesses. Conveniently,
the other side has discovered many weaknesses, very few
strengths. of course, they might find temporary political gain
in portraying an America past her prime and over the hill. But
they have no more right to argue, for partisan purposes, that our
economy is weaker than it is, than I have to underestimate our
problems.
Our strengths are real. The Misery Index -- the sum of
inflation and unemployment -- is 10.8 percent today, down from
19.6 percent in 1980.
7
) THE SECOND COWEST RATE
IN 24 YEARSO
Inflation stands at about three percent.
Interest rates are at a twenty year low.
The purchasing power of Americans gives us the highest
standard of living in the world.
We enjoy the highest home ownership rate of all major
industrialized countries.
We send 68 percent of our children on to higher education -
- more than any other country -- and well above Germany's 32
percent and Japan's 30 percent.
And with 5 percent of the world's population, we produce 25
percent of the world's total output.
I could go on, but I do not mean to suggest that all is well
-- that we do not need to lead and manage the changes
transforming our economy. But you can't chart the stars if you
think the sky is falling. Over the past 12 years we have almost
doubled the size of our economy. It's as if we created two extra
economies the size of Germany's from scratch.
How will we meet our goals? Before outlining the specifics
of my agenda, allow me to set out four principles. I believe
these principles are deeply embedded in the American creed -- for
the principles that must guide change are the principles that
must never change.
First, I believe America is a nation of special individuals,
not special interests. And individuals, in turn, draw strength
and protection from families and communities, not the Government.
8
Second, because the individual, not the government, is the
basis of a free society, an agenda for economic growth must
adhere to certain fundamentals: lower tax rates, limits on
Government spending, sound money, greater competition, less
economic regulation, and more open trade.
Third, government can build on these fundamentals by
offering opportunity and hope for individuals, families, and
communities. There is a conservative agenda for helping people,
for responding to their needs, by giving them the means, the
capabilities, and the confidence to make the decisions that
matter in life.
Finally, all our policies must be brought together
effectively if we are to prosper as a people and succeed as a
nation. Just as barriers between countries and companies fall in
the global economy, so too the traditional distinctions between
foreign and domestic, economic and security policies look
increasingly artificial. Our aim must be to execute our policies
as a unified program to make America secure and strong.
Therefore my Agenda for American Renewal calls for action on
six interconnected fronts. We face complex problems; no single
solution will suffice. The whole of our agenda will be greater
than the sum of its parts.
First, Challenging the World. During the Cold War, we built
a global security structure underpinned by military alliances
across the Atlantic and Pacific. In the same way, the post-Cold
War era requires a strategic economic and trade policy -- global
9
in scope, and underpinned by our status as an economic and export
superpower.
We are uniquely positioned to achieve this goal. As the
largest fully integrated market in the world, we wield leverage
with other countries that want access to our market.
As both a Pacific and a European power, we are tied to the
largest and most rapidly growing economies across both oceans.
And as the strongest nation in our hemisphere, we are looked
to for leadership by free economies emerging from Chile to
Mexico.
The same holds true for the newly born economies of Eastern
Europe and the former Soviet Union, where our values, our
products, even our language, carry a unique appeal. In Moscow
these days, the lines at McDonalds are longer than the lines at
Lenin's Tomb.
The key to America's growth, expansion, and innovation has
always been our openness to trade, investment, ideas, and people.
As this openness is at last being reciprocated around the world,
we find ourselves again at a special advantage.
The next steps in my strategic trade policy are to secure
Congressional approval of the North American Free Trade Agreement
and to complete the global trade negotiations, creating American
jobs and expanding the pool of customers for American products.
Let me emphasize: these agreements are steps, not ends in
themselves.
10
Our goal is to develop a strategic network of free trade
agreements across the Atlantic and the Pacific and in our own
hemisphere -- with Latin America; with Poland, Hungary and
Czechoslovakia; and countries across the Pacific.
As these external barriers fall, I believe we can reduce
internal barriers to competition as well -- in North America,
Western Furope, Japan, and elsewhere. Greater competition will
encourage entrepreneurial capitalism at the expense of government
power and entrenched interests, spurring still greater economic
growth.
Traveling around the country I have seen it happen already -
- particularly in our small businesses, as they reorient
themselves toward exports and international competition. A
couple of weeks ago, in St. Louis, I visited Public Safety
Equipment, Inc., a manufacturer of sirens, light-bars and other
safety devices. The president of Public Safety told me that a
few years ago, they recognized the time was long past when they
could sell their products in the fifty states and leave it at
that. So they took on the world. Now 35 percent of what they
make is sold in 66 countries.
Public Safety, and the hundreds of thousands of companies
like it, offer a glimpse into the future I envision for all
American business.
But a business is only as efficient, as resilient and smart,
as the people who keep its books and build its products and make
its strategy. Materials, machines, and methods will come and go,
11
but the American worker will remain the key to our economic
security. That brings me to the second component of my agenda:
Preparing Our Children.
The workplace of the 21st Century will be constantly
changing. We must prepare the American people for a lifetime of
learning, to keep a step ahead of that process of change.
Developed nations need developing minds.
The burden will fall on our educational system. As in the
past, education should be the ladder that children of modest
means can climb to better themselves.
Our current school system is not meeting these needs.
Designed for the 19th Century, it will collapse under the
pressures of the 21st. And it must be said: our educational
establishment is caught in the same time warp, where standing
still means falling behind.
Money alone is not the answer -- the United States already
spends more per pupil than any other country but Switzerland.
The answer is a radical overhaul of the system itself. If we
want to change our country, we've got to change our schools.
And the catalyst for change -- the one change that drives
all others -- is school choice, giving all parents the means and
freedom to choose which schools will best serve their children.
Competition is the principle that must underlie education reform.
And competition will not work unless parents are allowed to
choose their children's schools -- whether it's the public school
across town or the parochial school across the street.
12
Wealthy families already have this choice for their
children. Many people you saw at the Democratic National
Convention have choice for their children. Why shouldn't you
have choice for your children?
Consider one statistic: In Chicago, 47 percent of public
school teachers send their children to private schools. Clearly
they know something about monopoly education my opponent doesn't.
Our different approaches to education reform reveal the
great divide between my opponent and me. You will see the same
contrast in child care, health care, and a host of other issues.
The opposition prefers uniformity to variety and choice, relying
on government bureaucracies to offer "one-size-fits-all service."
I don't want to pull everyone down to make them equal. I want to
give everyone the tools to climb as high as they can dream.
Having prepared our children for the world of work, the
question remains what kind of work they will do. The third
component of my agenda for renewal is therefore: Sharpening
Businesses' Competitive Edge. Our ultimate success as an
economic superpower is dependent on the performance of our
private businesses -- on our success in encouraging
entrepreneurial capitalism.
The free market does not operate according to academic
theory or abstract industrial policies. It operates on common
sense. I learned my economics the way most of you did -- a lot
late nights sweating over a balance sheet, trying to meet a
payroll.
13
I saw that if people are allowed to keep more of what they
produce, they will produce more than they can use. The remainder
is called capital.
When capital is taxed lightly, it becomes abundant. When it
is taxed heavily, it becomes scarce -- available only to those at
the top, who need it least of all. That's not what I want.
If capital were more abundant, however, labor would become
DELETE
L
more scarce. Wages would rise, unemployment lines would shrink.
That is what I want
T.T
FOR JOBS AND INVESTMENT
That's why I want enterprise zones in our inner cities and
rural areas. That's why I want to make the R & D tax credit
permanent. And that's why I want to cut the capital gains tax
and index it for inflation.
Those are the fundamentals. I also see three other ways to
sharpen the competitive edge of American business:
-- first, strengthening small business, by cutting taxes,
ensuring that credit is available, and by lifting the dead weight
of government regulation;
-- second, supporting civilian R&D, by bringing the
development, production and marketing of technology closer
to the consumer;
-- and third, reforming our costly legal system, which mires
even conscientious businesses and individuals in a swamp of
frivolous lawsuits. My product liability reform and Access to
Justice Act will drain the swamp.
14
Frankly, passage of these bills won't be easy. Trial
lawyers are a powerful vested interest -- well-represented in
Congress and high on the list of political contributors, as my
opponent well knows. But America will never lead the world in
the 21st Century until we learn to sue each other less and care
for each other more.
The most competitive companies in the coming decades will be
those that most involve their workers in the business at hand.
Working men and women will want to know that they can enjoy both
economic opportunity and security. That is the fourth component
0
of my agenda: Promoting Economic Security.
Again, common sense shows the way: True security will come
only by developing individual capability, not dependency. And
that independence, in turn, comes through the private sector, not
the government.
HELP
Government's role will be to ease-the individual
S
adjustment to a fast-changing marketplace.
This means, in practice, a wider and more flexible range of
job training and placement services -- for both the young and
old, the blue and white-collar worker, and particularly during
the present period, workers from our defense industries.
The pace of the new economy makes new job training
approaches necessary: most workers will have more than one
employer, often more than one career, over the course of their
working lives. This fact raises concerns as well about workers'
RETIREMENT PLANS AND
JOB OR CAREER
ability to preserve theirypensions as they make those changes.
15
This summer I signed a law to increase pension portability, but
there is still much to do.
Economic security requires as well a major reform of our
health care system. The present system's uncontrollable costs
and inaccessible coverage is the cause of great unease, even
fear, throughout our economy.
My reforms, which I have outlined in detail elsewhere,
addresses the roots of these problems while preserving and
building on our system's strengths -- our state-of-the-art care,
openness to innovation, and diversity of consumer choice. Taken
NEARY $400 BILLION
together, my reforms would cut health care costs by $394 billion.
OVER
In health care, as in so many issues this year, we stand at
a crossroads. The path my opponents have chosen would place a
full 13 percent of our economy under the control of the federal
government -- meaning more bureaucracy, rationed care,
inefficient delivery of services, and, in the end, higher costs.
Let common sense be our guide: We must enhance competition
and market forces, not restrict them; we must preserve individual
choice, not hand decision-making over to centralized
bureaucracies; we must reduce the burden on employers and
employees, not bury them in a tide of new taxes and government
regulations.
Job training, retirement security, affordable health care:
THE NEXT FIVE YEARS. (FALSE PRECISION TO CLAIM $3946.)
When combined with a new system of education and entrepreneurial,
competitive business, we can offer genuine economic security to
our working men and women.
16
The programs I've outlined are based on the principles that
will empower all Americans to make their own choices and better
their lives. But I believe we need to do more for some of our
citizens who have been left behind. That is the sixth component
of my agenda: Leaving No One Behind.
The American Dream is nothing more or less than the belief
that all Americans can make a better life for their children.
The dream has made us the most dynamic society in the world; and
in the new century that dynamism will be essential to outpace the
economic competition. We can only turn it to our full advantage
if every American has a shot at making good on the dream.
I reject the shopworn logic that sees poverty as a simple
lack of income -- a kind of economic shortfall that can be
replaced with a government check. A conservative philosophy of
empowerment must have at its foundation the creation of
character, through the ownership of property and the dignity of
work. That means sweeping away the nightmare of crime from our
cities, building a core of property owners, creating business
PERSONAL
incentives, and making individual I discipline and self-reliance
WELFARE AND SOCIAL SERVICE
the goal of all our yprograms. The human capital unleashed in
this way will do much to drive us forward into the 21st Century.
I call the final component of my Agenda -- "Rightsizing
Government.
"
MY FIRST CAREER -
You'll recognize that I take the term from/the business
HOLDS TREMENBOUS LE3SONS FOR
SERVING
world -- which has a lot to teach those of usYin government. At
a time when companies across the country have been restructuring,
17
cutting fat, increasing efficiency -- all to prepare for the
economic competition of tomorrow -- the federal government faces
an obligation to do the same.
Today the federal government spends nearly twenty-four cents
of every dollar of the nation's income. That figure provides
vivid proof of what I have often said: Government is too big and
it spends too much.
A bloated federal government, serving itself seconds rather
than serving the people first, will weigh us down in the economic
race of a new era.
The Agenda I publish today contains specific proposals to
cut the fat: caps on the growth in mandatory spending and a
freeze on domestic spending; a balanced budget amendment and a
line-item veto; and a new mechanism -- a check-off box on tax
returns -- to give taxpayers the power to cut the deficit
themselves.
The size and structure of government are relics of a
different age -- artifacts more suited to the dilemmas of fifty
years ago than the problems of today. An American renewal will
require a streamlined government -- consolidating agencies,
tightening budgets, and cutting the salaries of highly paid
federal employees.
Unlike my opponent, I do not believe the American people are
undertaxed. Quite the opposite: I am committed to cutting taxes
across the board. Let me offer an illustration of what we could
do: If Congress had acted on the $130 billion in specific
18
spending cuts I have already proposed, we could cut income tax
rates by one percent across the board; reduce the small business
tax rate from 15 percent to 10 percent, and reduce the tax on
capital gains.
That is the direction I propose we go: to tax less and spend
less; and to redirect our current spending to serve the interests
of all Americans.
I honestly believe that this is the way -- the only way --
to control the size of the federal government. The facts are
painful but plain: For Congressnes, spending is power. And they
will exercise that power until they have spent every last dime
they can squeeze from the working men and women of America. It's
as simple as this: Raising taxes won't cut the deficit.
Here, then, is my Agenda for American Renewal. It comes at
a time unique in our history, a turning point, a moment when one
era is passing away and another is being born.
I intend to fight for this Agenda, to fight as hard as I can
to get as much as I can, and then I'm going to come back for
more. If Congress balks, I'll move forward anyway -- just as I
have done with education and welfare reform. I'll work with the
governors, with state and local governments, with the private
sector -- with anyone who shares the urge to renew our country.
With the close of the Cold War we can target peace,
prosperity and promise at home. The American people want that.
The American people deserve it.
19
At the same time, Americans recognize that the great events
of recent years have shaken the world. If we are to succeed, as
a nation and a people, if we are to hold true to all that has
made America the last, best hope of man on earth, then our
renewal at home must enable us to make the 21st Century yet
another American Century.
My Agenda draws together our people and our government to
meet this challenge. We will create a $10 trillion economy. We
will renew America. We will win the peace.
I want America to seize this moment. I want to stimulate
entrepreneurial capitalism, not punish it; I want to empower
people to make their own choices, not yoke them to new
bureaucracies. I want a government that spends less and taxes
less. And I will fight without hesitation for a free flow of
trade and capital and ideas around the world -- because Americans
compete, never retreat.
I know times have been difficult for many Americans. The
world we knew as children -- no matter your age -- will never be
the same. America will change -- that is our destiny; how it
will change will soon be decided.
I ask, when you step into that voting booth, to please
consider carefully whose agenda for change best fits America's
principles, our national experience, and our hopes for lasting
peace and prosperity.
XXX
THE WHITE HOUSE
WASHINGTON
September 9, 1992
Bootleg
MEMORANDUM FOR ROGER B. PORTER
FROM:
WARREN MARUYAMA
SUBJECT:
Detroit Economic Club Speech
The speech addresses the need for an affirmative long-
term economic vision that President can take to the American
people.
I have three comments:
Page 5: It might be better to drop the reference to the
banking system, which many people associate with the
S & L crisis. Instead, one of the key structural
changes running through American society is the rapid pace
of technological innovation. Technological advances are
sharply increasing productivity (and costing jobs) and are
forcing many industries to change or die. For example,
during the 1980s, technology shifted from electric
typewriters to word processors/minicomputers to the
personal computer, leaving Wang and Smith Corona on the
trash heap. Most of the job losses in labor-intensive
U.S. industries, e.g. textiles, autos, and steel, during
the 1980s resulted from advances in productivity. While
increased global competition played a role, it was clearly
secondary. Nevertheless, technology (unlike banking) also
has a positive element -- the rise of major new
industries, like software or biotechnology, in the last
decade and new jobs through the process of change and
renewal.
Page 7: The proposed insert at Tab A contains additional
material rebutting the myth of American decline.
Page 10: The reference to future free trade areas with
Latin America, Eastern Europe and Asia should be revised
as follows: "Our goals are to complete the Uruguay Round
of multilateral trade negotiations by the end of this year
and to continue to develop a strategic network of market-
opening agreements across the Atlantic and Pacific and in
our own hemisphere with Latin America; with Poland,
Hungary and Czechoslovakia: and across the Pacific."
The change is designed to avoid appearing to propose FTAs
with Latin America, Japan, and Eastern Europe, which is
extremely risky for three reasons:
-2-
First, until Congress has approved NAFTA, we should
avoid complicating our trade agenda with
controversial new initiatives. The reference to
additional FTAs is premature at best and could allow
opponents to raise the spectre that NAFTA is a
precedent for additional job losses. In addition,
while the Administration is committed to beginning
FTA negotiations with Chile, the California
agricultural lobby is strongly opposed.
Consequently, this idea should not be highlighted at
this time.
Second, if the Administration appears to be plotting
a large number of new FTAs without consulting
Congress, we will jeopardize our chances of getting
an extension of our bilateral fast track negotiating
authority in a NAFTA implementing bill. The
Administration needs a bilateral fast track extension
to complete Enterprise for the Americas (EAI), but
faces an uphill battle in the Congress. (We have
even less chance of securing an extension of our
multilateral authority, because of the long-running
stalemate in the Uruguay Round.) Without additional
negotiating authority, the President cannot launch
much, if anything, in the way of meaningful new trade
initiatives in a second term.
Third, while Congressman Solarz and ex-Ambassador
Mansfield have proposed an FTA with Japan, there is
no Congressional support for this idea. Eliminating
Japanese tariffs, which is the principal objective of
an FTA, would accomplish little, since tariffs are
not the main barrier to U.S. goods. FTAs with
Eastern Europe would be premature, since these
countries have just begun to implement free market
reforms and offer limited prospects for sharp
increases in American exports in the near-term.
Proposing FTAs at this point would be perceived as a
disguised form of foreign aid, jeopardizing any
possibility of a fast track extension.
The proposed language is broad enough to allow the
Administration to take credit for the trade and investment
framework agreements we've negotiated with Eastern Europe and
Latin America, but vague enough to avoid triggering controversy
about future FTAs. The time to begin talking about Latin
America and Chile is next year.
Attachment
INSERT
Our system of university and post-graduate education is
the best in the world and continues to serve as a powerful
magnet for outstanding scientists and researchers worldwide,
providing us with new ideas and technologies.
American companies and workers are the most productive in
the world and are beating up the international competition.
Last year, the United States exported nearly $600 billion of
goods and services -- well ahead of Germany and Japan.
The manufacturing sector's share of U.S. GNP rose from
21.1 percent in 1980 to 23.3 percent at the end of the decade
-- more than in the 1950s and 1960s.
With five percent of the world's population, the U.S.
produces 25 percent of its output and 37 percent of its high
technology products.
Our spending on research and development exceeds that of
Germany, Japan, the U.K., and France combined.
Document No. 349020ss
WHITE HOUSE STAFFING MEMORANDUM
92 SEP 9 P12: 28
DATE:
9/9/92
ACTION/CONCURRENCE/COMMENT DUE BY: TODAY, 9/9 2:00p.m.
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SUBJECT:
THURSDAY, SEPT. 10
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCBRIDE
BAKER
MOORE
SCOWCROFT
MULLINS
DARMAN
PETERSMEYER
BATES
PORTER
BRADY
PROVOST
BROMLEY
ROSS
CALIO
SMITH
DEMAREST
TUTWILER
FITZWATER
ZOELLICK
GRAY
BOSKIN
HOLIDAY
KAUFMAN
HORNER
MCGROARTY
REMARKS:
Please forward your comments directly to Dan McGroarty, RM. 122, x2930,
no later than 2:00 p.m., TODAY, SEPTEMBER 9, with a copy to this office.
Thank you.
RESPONSE:
- mimor changes p.2
PHILLIP D. BRADY
-well written
Assistant to the President
and Staff Secretary
Ext. 2702
THE WHITE HOUSE
WASHINGTON
September 8, 1992
is Pil 27
MEMORANDUM FOR THE PRESIDENT
THROUGH:
STEVE PROVOST SP
FROM:
ANDY FERGUSON az
SUBJECT:
DETROIT ECONOMIC CLUB
On Thursday morning, September 10th you will deliver remarks
(38 mins., teleprompted) to 2,000 members of the Detroit Economic
Club. Your speech unveils your Agenda for American Renewal.
Your remarks are drawn exclusively from the Agenda.
Note: Given the significance of this speech, we wanted to be sure
you had an opportunity to review it during the day. We will be
refining it on Wednesday, but hoped to get general reaction from
you as we are doing SO.
September 8, 1992
11:00 p.m.
AGENDA
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
SEPTEMBER 10, 1992
DETROIT, MICHIGAN
Good morning, everyone. (Acknowledgments)
This morning I am releasing an Agenda for American Renewal.
And I've come here today to introduce it to you and the nation.
My agenda diagnoses the economic problems our nation faces,
lays out the principles that should guide us in the years ahead,
and explains the integrated approach I am pursuing to meet the
challenge.
Over the past weeks I have been discussing elements of my
economic agenda, and in the weeks ahead I will be expanding on
those and otherwideas. The document I am releasing today shows
how the pieces fit together.
But let's begin this morning by stepping back, taking stock
of where we are as a great nation in the broader sweep of
history.
The American people have just completed the greatest mission
in the lifetime of our country -- the triumph of democratic
capitalism over imperial communism.
Today, this year, for the first time since December 1941,
the United States is not engaged in a war, hot or cold.
Throughout history, at the close of prolonged and costly
wars, victors have confronted the problem of securing a new basis
for peace and prosperity. The American people recognize that we
stand at such a watershed.
Americans
2
They sense the epic changes at work in the world and the
economy, the uneasiness that stirs the democracies who served as
our partners in the long struggle.
W They feel the uneasiness this in their own homes and communities;
and they see the difficulties of those who have felt change most
directly.
we
And they know that while we face an era of great
opportunity, we face great risks as well -- if we fail to make
the right choices, if we fail to engage this new world wisely.
But America has always possessed unique powers, and foremost
among them is the power of regeneration -- to transform anxiety
into opportunity. Only in America do we have the people, the
talents -- the principles and ideals -- to fully embrace the
world that opens before us.
For America to be safe and strong, we must meet the defining
challenge of the 1990s: to win the economic competition -- to win
the peace.
We must be a military superpower, an economic superpower,
and an export superpower.
My Agenda for Renewal asks that we look forward -- to open
new markets, prepare our people to work, strengthen our families,
-- to save and invest -- so that we can win.
Our renewal depends on economic growth -- but growth not for
the few at the expense of the many, not for the present at the
expense of the future.
3
In our country we have always prized an entrepreneurial
capitalism that grows from the bottom up, not the top down, a
prosperity that begins on Main Street and extends to Wall Street
-- not the other way around.
We have never been seduced by the view my opponent offers -
- of a government that accumulates capital by taxing it and
borrowing it from the people, and spending it according to an
industrial policy fashioned from the latest academic theories.
My agenda is for an inclusive, not an exclusive America --
and surely not for a reclusive one. My international economic
and trade strategy will guarantee our position as an export
superpower, extending our global economic reach in tandem with
our security presence -- to stretch beyond our borders so that we
can create more jobs within them.
At the same time, we need to foster at home the capabilities
that will keep us in the lead: radical changes in our education
system to prepare our children for a constantly changing
workplace; incentives for entrepreneurs and new technologies to
sharpen our competitive edge; job training and health care reform
to promote the economic security of our working men and women;
and new approaches for reaching out to those who have been left
behind, since in the century ahead we will need the aspirations
and energy of every American.
And finally, because our greatest strengths flow not from
government but from the personal initiative and energy of free
4
men and women, my agenda aims to check the growth of government,
and, in some important ways, to reverse it.
Fitted together, each overarching and underpinning the
other, the components of this agenda should renew America
according to her most cherished principles.
And this renewed America will be empowered toward a grand
goal: to nearly double the size of our economy, to $10 trillion,
by the early years of this century.
To place my agenda in a larger context, let me turn briefly
to five profound changes now at work in our economy. When
Americans gather around the kitchen table at night, and talk
about how they'll meet a mortgage, or pay the doctor's bill,
they're feeling these changes in their lives. And before the
changes have run their course, they will have forever altered the
way Americans buy and sell, work and create.
The first great change in our economy is ironically caused
by our very success in ending the Cold War. In the short run,
reductions in defense spending have meant painful lay-offs in
many industries, and we are taking steps to ease this transition.
But in the medium and long run, reductions in defense spending
will free up priceless skills and technologies for peacetime
growth.
Second, most of our industries are transforming themselves
from the old-style hierarchical organizations to so-called
flattened pyramids, emphasizing a skills-based workforce, "lean
production," and shorter product cycles. From castings to
5
computers, this is a revolution as dramatic as the one made
earlier this century, when Henry Ford led the country from craft-
based production to mass manufacturing.
While these changes are essential to maintaining our
competitive edge, they've come with a cost -- lay-offs and
cutbacks among both white- and blue-collar workers, who must
worry about their health care and pensions. These hard-working
people need reassurance -- not only about their economic
security, but about preserving the sense of self-worth that only
work can provide.
The third change: while the 1980s brought us the greatest
peacetime expansion in our history, the boom also led too many
companies and too many households to take on too much debt.
We have been paying down that debt -- and lower interest
rates have helped us do it. The process is largely over, but
consumers and companies remain cautious.
The fourth change involves our financial system. We entered
the '80s with a banking system designed 50 years earlier, a relic
in an era when billions of investment dollars can cross borders
at the speed of light.
The late '70s threatened this anachronism with record
interest and inflation rates -- as well as newer, more
competitive financial services. The less efficient institutions
could not survive, obligating the federal government to protect
the savings of millions of Americans.
6
This process, too, is nearing its end. The result will be a
more flexible and efficient financial system. But for now,
lenders are cautious and, despite low rates, small businesses
still find access to credit difficult.
The most far-reaching of these five changes is the emergence
of a global economy. No nation is an island today. One out of
every six manufacturing jobs is directly tied to exports. The
crops sown from one out of every three acres of farmland is sold
abroad.
Consider three implications of the global economy: One, when
growth slows abroad, as it has recently, our own growth slows as
well. Two, America will only grow in the next century if it can
compete globally -- in every part of the world. And three, we
must seize every opportunity to open new markets, particularly
those with the greatest potential for expansion.
Now, in drafting an agenda for America's future, we had to
assess our strengths as well as our weaknesses. Conveniently,
the other side has discovered many weaknesses, very few
strengths. of course, they might find temporary political gain
in portraying an America past her prime and over the hill. But
they have no more right to argue, for partisan purposes, that our
economy is weaker than it is, than I have to underestimate our
problems.
Our strengths are real. The Misery Index -- the sum of
inflation and unemployment -- is 10.8 percent today, down from
19.6 percent in 1980.
7
Inflation stands at about three percent.
Interest rates are at a twenty year low.
The purchasing power of Americans gives us the highest
standard of living in the world.
We enjoy the highest home ownership rate of all major
industrialized countries.
We send 68 percent of our children on to higher education -
- more than any other country -- and well above Germany's 32
percent and Japan's 30 percent.
And with 5 percent of the world's population, we produce 25
percent of the world's total output.
I could go on, but I do not mean to suggest that all is well
-- that we do not need to lead and manage the changes
transforming our economy. But you can't chart the stars if you
think the sky is falling. Over the past 12 years we have almost
doubled the size of our economy. It's as if we created two extra
economies the size of Germany's from scratch.
How will we meet our goals? Before outlining the specifics
of my agenda, allow me to set out four principles. I believe
these principles are deeply embedded in the American creed -- for
the principles that must guide change are the principles that
must never change.
First, I believe America is a nation of special individuals,
not special interests. And individuals, in turn, draw strength
and protection from families and communities, not the Government.
8
Second, because the individual, not the government, is the
basis of a free society, an agenda for economic growth must
adhere to certain fundamentals: lower tax rates, limits on
Government spending, sound money, greater competition, less
economic regulation, and more open trade.
Third, government can build on these fundamentals by
offering opportunity and hope for individuals, families, and
communities. There is a conservative agenda for helping people,
for responding to their needs, by giving them the means, the
capabilities, and the confidence to make the decisions that
matter in life.
Finally, all our policies must be brought together
effectively if we are to prosper as a people and succeed as a
nation. Just as barriers between countries and companies fall in
the global economy, so too the traditional distinctions between
foreign and domestic, economic and security policies look
increasingly artificial. Our aim must be to execute our policies
as a unified program to make America secure and strong.
Therefore my Agenda for American Renewal calls for action on
six interconnected fronts. We face complex problems; no single
solution will suffice. The whole of our agenda will be greater
than the sum of its parts.
First, Challenging the World. During the Cold War, we built
a global security structure underpinned by military alliances
across the Atlantic and Pacific. In the same way, the post-Cold
War era requires a strategic economic and trade policy -- global
9
in scope, and underpinned by our status as an economic and export
superpower.
We are uniquely positioned to achieve this goal. As the
largest fully integrated market in the world, we wield leverage
with other countries that want access to our market.
As both a Pacific and a European power, we are tied to the
largest and most rapidly growing economies across both oceans.
And as the strongest nation in our hemisphere, we are looked
to for leadership by free economies emerging from Chile to
Mexico.
The same holds true for the newly born economies of Eastern
Europe and the former Soviet Union, where our values, our
products, even our language, carry a unique appeal. In Moscow
these days, the lines at McDonalds are longer than the lines at
Lenin's Tomb.
The key to America's growth, expansion, and innovation has
always been our openness to trade, investment, ideas, and people.
As this openness is at last being reciprocated around the world,
we find ourselves again at a special advantage.
The next steps in my strategic trade policy are to secure
Congressional approval of the North American Free Trade Agreement
and to complete the global trade negotiations, creating American
jobs and expanding the pool of customers for American products.
Let me emphasize: these agreements are steps, not ends in
themselves.
10
Our goal is to develop a strategic network of free trade
agreements across the Atlantic and the Pacific and in our own
hemisphere -- with Latin America; with Poland, Hungary and
Czechoslovakia; and countries across the Pacific.
As these external barriers fall, I believe we can reduce
internal barriers to competition as well -- in North America,
Western Europe, Japan, and elsewhere. Greater competition will
encourage entrepreneurial capitalism at the expense of government
power and entrenched interests, spurring still greater economic
growth.
Traveling around the country I have seen it happen already -
- particularly in our small businesses, as they reorient
themselves toward exports and international competition. A
couple of weeks ago, in St. Louis, I visited Public Safety
Equipment, Inc., a manufacturer of sirens, light-bars and other
safety devices. The president of Public Safety told me that a
few years ago, they recognized the time was long past when they
could sell their products in the fifty states and leave it at
that. So they took on the world. Now 35 percent of what they
make is sold in 66 countries.
Public Safety, and the hundreds of thousands of companies
like it, offer a glimpse into the future I envision for all
American business.
But a business is only as efficient, as resilient and smart,
as the people who keep its books and build its products and make
its strategy. Materials, machines, and methods will come and go,
11
but the American worker will remain the key to our economic
security. That brings me to the second component of my agenda:
Preparing Our Children.
The workplace of the 21st Century will be constantly
changing. We must prepare the American people for a lifetime of
learning, to keep a step ahead of that process of change.
Developed nations need developing minds.
The burden will fall on our educational system. As in the
past, education should be the ladder that children of modest
means can climb to better themselves.
Our current school system is not meeting these needs.
Designed for the 19th Century, it will collapse under the
pressures of the 21st. And it must be said: our educational
establishment is caught in the same time warp, where standing
still means falling behind.
Money alone is not the answer -- the United States already
spends more per pupil than any other country but Switzerland.
The answer is a radical overhaul of the system itself. If we
want to change our country, we've got to change our schools.
And the catalyst for change -- the one change that drives
all others -- is school choice, giving all parents the means and
freedom to choose which schools will best serve their children.
Competition is the principle that must underlie education reform.
And competition will not work unless parents are allowed to
choose their children's schools -- whether it's the public school
across town or the parochial school across the street.
12
Wealthy families already have this choice for their
children. Many people you saw at the Democratic National
Convention have choice for their children. Why shouldn't you
have choice for your children?
Consider one statistic: In Chicago, 47 percent of public
school teachers send their children to private schools. Clearly
they know something about monopoly education my opponent doesn't.
Our different approaches to education reform reveal the
great divide between my opponent and me. You will see the same
contrast in child care, health care, and a host of other issues.
The opposition prefers uniformity to variety and choice, relying
on government bureaucracies to offer "one-size-fits-all service."
I don't want to pull everyone down to make them equal. I want to
give everyone the tools to climb as high as they can dream.
Having prepared our children for the world of work, the
question remains what kind of work they will do. The third
component of my agenda for renewal is therefore: Sharpening
Businesses' Competitive Edge. Our ultimate success as an
economic superpower is dependent on the performance of our
private businesses -- on our success in encouraging
entrepreneurial capitalism.
The free market does not operate according to academic
theory or abstract industrial policies. It operates on common
sense. I learned my economics the way most of you did -- a lot
late nights sweating over a balance sheet, trying to meet a
payroll.
13
I saw that if people are allowed to keep more of what they
produce, they will produce more than they can use. The remainder
is called capital.
When capital is taxed lightly, it becomes abundant. When it
is taxed heavily, it becomes scarce -- available only to those at
the top, who need it least of all. That's not what I want.
If capital were more abundant, however, labor would become
more scarce. Wages would rise, unemployment lines would shrink.
That is what I want.
That's why I want enterprise zones in our inner cities and
rural areas. That's why I want to make the R & D tax credit
permanent. And that's why I want to cut the capital gains tax
and index it for inflation.
Those are the fundamentals. I also see three other ways to
sharpen the competitive edge of American business:
-- first, strengthening small business, by cutting taxes,
ensuring that credit is available, and by lifting the dead weight
of government regulation;
-- second, supporting civilian R&D, by bringing the
development, production and marketing of technology closer
to the consumer;
-- and third, reforming our costly legal system, which mires
even conscientious businesses and individuals in a swamp of
frivolous lawsuits. My product liability reform and Access to
Justice Act will drain the swamp.
14
Frankly, passage of these bills won't be easy. Trial
lawyers are a powerful vested interest -- well-represented in
Congress and high on the list of political contributors, as my
opponent well knows. But America will never lead the world in
the 21st Century until we learn to sue each other less and care
for each other more.
The most competitive companies in the coming decades will be
those that most involve their workers in the business at hand.
Working men and women will want to know that they can enjoy both
economic opportunity and security. That is the fourth component
of my agenda: Promoting Economic Security.
Again, common sense shows the way: True security will come
only by developing individual capability, not dependency. And
that independence, in turn, comes through the private sector, not
the government.
Government's role will be to ease the individual's
adjustment to a fast-changing marketplace.
This means, in practice, a wider and more flexible range of
job training and placement services -- for both the young and
old, the blue and white-collar worker, and particularly during
the present period, workers from our defense industries.
The pace of the new economy makes new job training
approaches necessary: most workers will have more than one
employer, often more than one career, over the course of their
working lives. This fact raises concerns as well about workers'
ability to preserve their pensions as they make those changes.
15
This summer I signed a law to increase pension portability, but
there is still much to do.
Economic security requires as well a major reform of our
health care system. The present system's uncontrollable costs
and inaccessible coverage is the cause of great unease, even
fear, throughout our economy.
My reforms, which I have outlined in detail elsewhere,
addresses the roots of these problems while preserving and
building on our system's strengths -- our state-of-the-art care,
openness to innovation, and diversity of consumer choice. Taken
together, my reforms would cut health care costs by $394 billion.
In health care, as in so many issues this year, we stand at
a crossroads. The path my opponents have chosen would place a
full 13 percent of our economy under the control of the federal
government -- meaning more bureaucracy, rationed care,
inefficient delivery of services, and, in the end, higher costs.
Let common sense be our guide: We must enhance competition
and market forces, not restrict them; we must preserve individual
choice, not hand decision-making over to centralized
bureaucracies; we must reduce the burden on employers and
employees, not bury them in a tide of new taxes and government
regulations.
Job training, retirement security, affordable health care:
When combined with a new system of education and entrepreneurial,
competitive business, we can offer genuine economic security to
our working men and women.
16
The programs I've outlined are based on the principles that
will empower all Americans to make their own choices and better
their lives. But I believe we need to do more for some of our
citizens who have been left behind. That is the sixth component
of my agenda: Leaving No One Behind.
The American Dream is nothing more or less than the belief
that all Americans can make a better life for their children.
The dream has made us the most dynamic society in the world; and
in the new century that dynamism will be essential to outpace the
economic competition. We can only turn it to our full advantage
if every American has a shot at making good on the dream.
I reject the shopworn logic that sees poverty as a simple
lack of income -- a kind of economic shortfall that can be
replaced with a government check. A conservative philosophy of
empowerment must have at its foundation the creation of
character, through the ownership of property and the dignity of
work. That means sweeping away the nightmare of crime from our
cities, building a core of property owners, creating business
incentives, and making individual discipline and self-reliance
the goal of all our programs. The human capital unleashed in
this way will do much to drive us forward into the 21st Century.
I call the final component of my Agenda -- "Rightsizing
Government."
You'll recognize that I take the term from the business
world -- which has a lot to teach those of us in government. At
a time when companies across the country have been restructuring,
17
cutting fat, increasing efficiency -- all to prepare for the
economic competition of tomorrow -- the federal government faces
an obligation to do the same.
Today the federal government spends nearly twenty-four cents
of every dollar of the nation's income. That figure provides
vivid proof of what I have often said: Government is too big and
it spends too much.
A bloated federal government, serving itself seconds rather
than serving the people first, will weigh us down in the economic
race of a new era.
The Agenda I publish today contains specific proposals to
cut the fat: caps on the growth in mandatory spending and a
freeze on domestic spending; a balanced budget amendment and a
line-item veto; and a new mechanism -- a check-off box on tax
returns -- to give taxpayers the power to cut the deficit
themselves.
The size and structure of government are relics of a
different age -- artifacts more suited to the dilemmas of fifty
years ago than the problems of today. An American renewal will
require a streamlined government -- consolidating agencies,
tightening budgets, and cutting the salaries of highly paid
federal employees.
Unlike my opponent, I do not believe the American people are
undertaxed. Quite the opposite: I am committed to cutting taxes
across the board. Let me offer an illustration of what we could
do: If Congress had acted on the $130 billion in specific
18
spending cuts I have already proposed, we could cut income tax
rates by one percent across the board; reduce the small business
tax rate from 15 percent to 10 percent, and reduce the tax on
capital gains.
That is the direction I propose we go: to tax less and spend
less; and to redirect our current spending to serve the interests
of all Americans.
I honestly believe that this is the way -- the only way --
to control the size of the federal government. The facts are
painful but plain: For Congressmen, spending is power. And they
will exercise that power until they have spent every last dime
they can squeeze from the working men and women of America. It's
as simple as this: Raising taxes won't cut the deficit.
Here, then, is my Agenda for American Renewal. It comes at
a time unique in our history, a turning point, a moment when one
era is passing away and another is being born.
I intend to fight for this Agenda, to fight as hard as I can
to get as much as I can, and then I'm going to come back for
more. If Congress balks, I'll move forward anyway -- just as I
have done with education and welfare reform. I'll work with the
governors, with state and local governments, with the private
sector -- with anyone who shares the urge to renew our country.
With the close of the Cold War we can target peace,
prosperity and promise at home. The American people want that.
The American people deserve it.
19
At the same time, Americans recognize that the great events
of recent years have shaken the world. If we are to succeed, as
a nation and a people, if we are to hold true to all that has
made America the last, best hope of man on earth, then our
renewal at home must enable us to make the 21st Century yet
another American Century.
My Agenda draws together our people and our government to
meet this challenge. We will create a $10 trillion economy. We
will renew America. We will win the peace.
I want America to seize this moment. I want to stimulate
entrepreneurial capitalism, not punish it; I want to empower
people to make their own choices, not yoke them to new
bureaucracies. I want a government that spends less and taxes
less. And I will fight without hesitation for a free flow of
trade and capital and ideas around the world -- because Americans
compete, never retreat.
I know times have been difficult for many Americans. The
world we knew as children -- no matter your age -- will never be
the same. America will change -- that is our destiny; how it
will change will soon be decided.
I ask, when you step into that voting booth, to please
consider carefully whose agenda for change best fits America's
principles, our national experience, and our hopes for lasting
peace and prosperity.
XXX