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ABC Conference 4/4/89 [OA 4425]
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ABC Conference 4/4/89 [OA 4425]
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Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Mary Kate Grant Subject Files
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Originally Processed With FOIA(s):
FOIA Number:
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Grant, Mary Kate, Files
Subseries:
Subject File, 1988-1991
OA/ID Number:
13877
Folder ID Number:
13877-001
Folder Title:
ABC Conference, 4/4/89
Stack:
Row:
Section:
Shelf:
Position:
G
19
2
7
2
ANTICIPATED QUESTIONS AND ANSWERS
AMERICAN BUSINESS CONFERENCE
MEETING WITH THE PRESIDENT
APRIL 4, 1989
1. As you know, there is considerable opposition in some
quarters to cutting the capital gains tax. Will you continue to
support it?
Yes I will, because I believe that cutting the capital gains
tax rate goes right to the heart of keeping America competitive.
You all know, as business leaders among the most dynamic, high-
growth companies, how important this proposal is. Most of our
major trading partners do not tax their capital gains. The
Pacific Rim countries -- the "Four Dragons" of Hong Kong,
Singapore, Taiwan, and South Korea -- do not tax capital gains.
Japan did not during its meteoric rise to economic power. So why
not level that playing field in the global marketplace? It's
only fair.
Capital formation and money for innovation is what keeps the
job creation machine in gear -- and what keeps American
productivity at record levels.
2. What do you see as the major long-term benefits of a
permanent R & E tax credit?
A permanent R & E tax credit gives managers the opportunity
to look beyond the next quarter's profits. It allows them to
make the kind of investments that really count toward
competitiveness -- and which pay off in the long run in terms of
job creation, productivity, new technologies and American
innovation. As I've said, this is an important step in leading
the nation to the next American Century.
3. What is your position with regard to mandated benefits such
as parental leave?
I oppose mandated benefits and have made that absolutely
clear on several occasions.
4. Do you believe that your training wage proposal will pass?
I certainly hope so. A minimum wage of $4.25/hour and a six
month training wage is my first and last offer. I will veto any
bill which proposes otherwise. What is most important to me is
saving -- and creating -- jobs and keeping economic opportunity
open for all young Americans.
5. What should managers be doing to prepare their workers and
their companies for the challenges of the near future, and the
shifting demographics of the workforce?
First of all, realize that most of the new talent you' 11 be
depending on will be predominantly women, minorities and
immigrants. Secondly, labor markets are getting tighter, as you
know, and jobs are more technically complex now.
It will be up to you to come up with responsive policies
that allow you and your operations to tap this new source of
talent. That means child care. Literacy programs. Retraining
for older workers as jobs change. Flexible workplace policies
that give your people the ability to balance competing pressures
of work and family.
In my speech, I've just laid out my education proposal,
which will be sent to the Hill tomorrow. In addition, our child
care package was sent to Congress in mid-March. But the
government can't do it alone. The government should not mandate
solutions, but should put choice in the hands of those concerned.
The ball is in your court.
6. What are your plans for the Council on Competitiveness?
I am looking forward to the Vice President's active
involvement as the Chairman of the Council. It will play a major
role in deciding the Administration's approach to competitiveness
issues across the board.
(Lange/Martin)
March 31, 1989
6:30 p.m.
PRESIDENTIAL REMARKS:
AMERICAN BUSINESS CONFERENCE
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years -- and every meeting, for me at least, has been
worthwhile and productive. I am glad to be back.
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
risks, to start a business, make it grow, and keep it
competitive. Here in Washington, he is putting his experience to
work. Bob is on the cutting edge of our national effort to Build
a Better America.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America.
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
economy. And this government knows better than to fix what's
already working.
2
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
You folks know the same lesson that I learned as a
businessman. You need capital to grow. What you don't need is
higher taxes on your earnings, or higher taxes on your workers,
or higher taxes on those who invest their money in your firm.
Right now the government is making too big a claim on
America's capital to cover our deficit. That's capital that
should be invested in America's businesses. The best way to
channel more capital into productive investment is not higher
taxes. It's spending restraint.
The working paper you released last month was another
reminder that the deficit must be brought under control. So
let
me reassure you this government will not become the fiscal
equivalent of Overeaters Anonymous. Accountability in government
demands that we put an end to this spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
millionaire boasting to a circle of people, "I was born into the
3
world without a single penny. And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars." "
Well, we don't have to let the deficit play a cruel joke on
future generations. Next year alone, fiscal year 1990 federal
revenues will rise by more than $80 billion -- with no tax
increase. And we're going to meet or beat the Gramm-Rudman-
Hollings targets.
Our budget consultations with Congress so far have been
going well. We're determined to work with this Congress -- we're
counting on their cooperation, to find answers we can all live
with.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were able to
just walk up to a bank, and get a loan to cover your start-up
costs? Few, if any. Most of you probably raised capital by
offering people a share of the business -- and a stake in the
outcome.
4
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
grow. It will bring in $4.8 billion more in tax revenues in
1990, according to the Treasury. And it will create more new
jobs.
That's no tax break for the rich. That's a fair shake for
every American.
We want to build on the energy and initiative of American
business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. We don't want to limit the
flexibility of managers and workers, who are trying to find their
own best solutions. And you know, many are already succeeding.
Chamber of Commerce estimates suggest that workers are
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
Nearly seventy percent of growth in benefits is due to
voluntary action by employers. Only thirty percent is due to
government requirements. We want to keep it that way.
Our friends in Europe have tried mandated benefits -- and
they haven't had much success. They're now looking for ways to
5
free up enterprise, American style -- and make it more
flexible, not less. For us to go toward mandated benefits would
be, as Yogi Berra put it, like "deja vu all over again."
America will be more competitive if we continue to resist
the temptation to heap burdensome mandates on the productive
private sector.
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
of investment. There can be no investment more urgent -- or more
compelling for the future of American business, and this country
as a whole, than education. In this, all of us have a stake in
the outcome.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the
surveys that show many foreign students outperforming our own.
Although our best students can compete with anyone in the
world, the challenge we face is to adapt our educational system
so that all of our students receive the skills they need to share
in that prosperity -- my Administration has made education a
national priority.
6
Our program is based on four principles: it rewards
excellence, helps those most in need, demands accountability, and
supports greater flexibility and choice.
Tomorrow, I will send to the Congress our education package.
We want to reward merit schools that make progress in terms of
raising student achievement, and reducing drug use and drop-out
rates. We're promoting parental choice and educational quality,
through magnet schools of excellence.
We want to provide alternative certification of teachers and
principals, to broaden the pool of talent available; President's
Awards to outstanding teachers; Urban Emergency Grants to
provide comprehensive help in fighting drugs for school districts
under siege; a National Science Scholars program for high school
seniors; and additional endowment matching grants for
historically black colleges and universities, which occupy a
unique and vital position in American higher education.
We are committed to a program of education reform that will
give our young people a solid foundation for the future. But to
make lasting improvements in education, we'll need to get all of
the players -- administrators, school boards, local business
leaders, parents, teachers' unions -- around the table, working
together.
7
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private ---
or on the board of a local college or university.
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
the kind of educational reform that lasts. It places you among
the "thousand points of light" that spread hope and opportunity.
You are part of what makes America special.
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country. You're breathing new life into an idea
that has always been a testament to the American spirit: that
doing well demands doing good.
8
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy. "
As leaders -- not only in business but in every sector of
our society -- you know that the national interest requires us to
invest in the future. Education is the best investment we can
make, if we want to Build a Better America.
Thank you. And God Bless you all.