Tuesday's Economic Speech
The Cabinet Room
The White House
January 6, 2003
4:11 P.M. EST
THE PRESIDENT: I have an opening statement here and I'll answer a couple of
I want to thank my Cabinet for coming. This is the 15th Cabinet meeting we've
had since we were sworn in, and I appreciate each of you working so hard on
behalf of the American people.
Today we talked about the issues facing our country. The war on terror continues.
We will hunt down the terrorists wherever they hide. We'll do everything we
can to secure the homeland.
We heard a briefing today from Tom Ridge about how the reorganization of the
Homeland Security Department is going. It's very important for Congress and
the Senate to confirm Tom as quickly as possible, and to confirm his team, so
they can get doing the work of the American people.
Here at home, I hope the Congress will extend the unemployment benefits for
-- for the American workers who don't have a job -- soon, as quickly as possible.
As well, it's important for Congress to pass the '03 appropriations bills. We're
living under continuing resolutions. The agency heads here are -- want to have
their budgets finalized so that they can have certainty in the appropriations
with which they have to work. Congress has got work to do.
Tomorrow I'm going to talk about how to continue the economic growth that we
have, to ensure our economy is as robust as possible. I look forward to the
speech in Chicago, but it is a plan that speaks directly to the American citizen
that -- to do everything we can to revitalize the small business sector, to
make sure it remains strong so people can find work. We've put together a fine
economic team. I hope the Congress, the Senate acts quickly to confirm John
Snow and Bill Donaldson. They need to move quickly.
I look forward to working with the leadership in the House and the Senate. Doesn't
matter who's in charge, I will work with them. Obviously, we're pleased that
Senator Frist will be leading the Senate. We'll work with him; we'll continue
to work with Senator Daschle. And we'll work with Speaker Hastert, Leader DeLay
and Congressman Pelosi, as well.
We've got a job to do for the American people, and we'll do that job -- to make
sure the country is secure, to win the war on terror, and make sure people can
Let me answer some questions. Sandra, this is your last day, I understand, and
therefore, you get to ask the only question -- I mean, you get to ask -- (laughter.)
QUESTION: The first question to the last? You said that your economic plan will speak
directly to the American citizen. The Democrats say that it speaks most directly
to the richest American taxpayers. How do you answer that criticism and the
charge that you're just going to lead to deeper deficits?
THE PRESIDENT: Well, the critics hadn't seen the plan. This is a plan that provides
tax relief to the working citizens. It's a plan that is a very fair plan. It's
a plan that recognizes when somebody has more of their own money, they're likely
to spend it, which creates more jobs.
Our administration is concerned about deficits, and the way they deal with deficits
is you want to control spending. And I hope Congress lives up to their words.
When they talk about deficits, they can join us in making sure we don't overspend.
They can join us and make sure that the appropriations process is focused on
those issues that -- those items that are absolutely necessary to the American
I'm pleased that members of the Congress are talking about deficits. It means
they understand their obligations not to overspend the people's money. And the
second way to deal with deficits is to encourage revenue growth. And the way
to encourage revenue growth is to encourage the private sector to grow. And
tomorrow I'll be talking about ways to encourage the growth of the private sector.
QUESTION: Sir, with three weeks to go until the U.N. inspectors report back, are you
seeing any signs of compliance by Iraq? Saddam says it's carrying out intelligence
THE PRESIDENT: Well, I thought that was an interesting statement on his part.
When you combine that with the fact that his declaration was clearly deficient,
it is discouraging news for those of us who want to resolve this issue peacefully.
He has the obligation to disarm. For the sake of peace, he must disarm. The
United Nations has clearly said that. It is in our nation's interest that he
disarm. He is a threat to the American people. He's a threat to our friends
and neighbors in the Middle East. He is a person who has used weapons of mass
destruction. And so, therefore, the world has said to Saddam, you won't have
any weapons of mass destruction, get rid of them. And thus far, it looks like
he hasn't complied.
But he's got time. And we continue to call upon Saddam Hussein to listen to
what the world is saying. Not just the United States, but the entire world expects
Saddam Hussein to disarm.
Dick -- Stretch.
QUESTION: Mr. President, changing the taxation on stock dividends, a lot of analysts
say that, in and of itself, would not have a particularly stimulative effect
for the economy. Do you disagree that? And if in the end you get a benefit yourself,
is it money that you would then direct to be reinvested, or is it money that
you might spend?
THE PRESIDENT: If it -- I didn't hear the second part of your question. If it
-- the hypothetical part of the question, which I'm probably not going to answer.
QUESTION: If Congress does your bidding and you get benefits from dividends that aren't
being taxed, would you use that money to reinvest or would you spend it on consumer
goods or consumer items?
THE PRESIDENT: Me, personally?
QUESTION: You, personally.
THE PRESIDENT: My money is in a blind trust, Stretch, so I don't know if I've
got any dividends.
QUESTION: If you did.
THE PRESIDENT: Oh, if I did. (Laughter.)
QUESTION: Not many of us have dividends these days, but --
THE PRESIDENT: Well, it's interesting you asked that question. A lot of people
get dividends, see. And that's one of the reasons why we're analyzing this issue
of taxing things twice, particularly dividends. Most seniors -- over 50 percent
of the seniors receive dividends.
First of all, it's unfair to tax money twice. There's a principle involved.
The government ought to be content with taxing revenue streams or profits one
time, not twice. And in dividends, we tax the corporate profit, and then we
tax the money being sent to the shareholder. And that doesn't make any sense;
that's unfair. That's bad public policy. Many of the shareholders that pay the
taxes are senior citizens. These are citizens who have retired and senior citizens
who can use that money.
Thirdly, the reduction in taxes on dividends will encourage capital flows, capital
flows into the marketplace. It will -- it will encourage investment, and that's
what we want. We want to encourage investment activity. Investment means jobs.
And so I'm not going to specifically tell you what's in the speech tomorrow,
though it looks like some others might have already done that. I do encourage
you to listen to it. But I encourage you to look at the entire package. It's
a package that's shaped for economic vitality and growth.
Listen, we're doing fine. Tomorrow, you'll hear me say this economy is one of
the strongest in the world. But what we believe is we can be stronger. And we
also know that when somebody is looking for work who wants to work means we've
got to continue to try to stimulate job growth.
Now, we don't believe it's the role of government to manage the economy. We've
got great faith in the private sector. And so we're going to create the environment
for the private sector to be stronger. That's the policy of this administration.
Sandra, good luck to you. Thanks.
QUESTION: Thank you, sir.
QUESTION: Mr. President, on North Korea, sir?
THE PRESIDENT: I'll answer one on North Korea, yes, real quick.
QUESTION: Yes, sir. What would it take for the U.S. or any other nation to have direct
talks with North Korea? And they claim to believe that the U.S. is a threat
THE PRESIDENT: Yes.
QUESTION: What can you say?
THE PRESIDENT: Well, first of all, I went to Korea and clearly said that the
United States has no intention of invading North Korea. I said that right there
in South Korea. And in Kim Jong Il's neighborhood, I spoke as clearly as I said,
and said we won't invade you. And I'll repeat that: We have no intention of
invading North Korea.
We expect North Korea to adhere to her obligations. She's in an agreement with
the United States; she said that she would not develop nuclear weapons. And
we expect people to keep their word. We will have dialogue; we've had dialogue
with North Korea. The Secretary of State visited with the Deputy Foreign Minister
SECRETARY POWELL: The Foreign Minister.
THE PRESIDENT: -- the Foreign Minister -- excuse me -- and talking is one thing.
But we expect people to honor obligations. And for Kim Jong Il to be a credible
member of the world community, he's got to understand that he's got to do what
he says he's going to do.
I believe this will be resolved peacefully, and I believe it can be resolved
QUESTION: Thank you, sir.
QUESTION: What were you laughing at before we came in, sir? (Laughter.)
THE PRESIDENT: I'm not telling. (Laughter.) I won't tell, but somebody will
leak it. (Laughter.)