Economic Recovery and Job Creation

Waco, Texas
August 13, 2002

Good morning, Mr. Secretary. I'm pleased to be here on behalf of our 3 million business members, 3,000 state and local chambers of commerce, and 850 associations.

The American economy faces a serious challenge. It is that we have followed last year's recession with three consecutive quarters of growth. Many of the fundamentals are strong. Interest rates and inflation are low. Productivity is growing and consumers are spending.

But let's face facts. Many economists see an economy that is not firing on all cylinders. Unemployment has stopped going up — but it is not going down. And that is unacceptable.

Companies are not spending. Capital formation is a serious problem. Even those who have capital are keeping it in their jeans.

CEOs want to know what's going to happen next. They must figure out how to comply with a flood of new accounting and corporate governance rules. Some of these can land you in jail if you don't get it right.

Recertifications of company performance are due beginning tomorrow. How will the markets react? Like all Americans, business executives wonder what's going to happen next in the war on terrorism.

All of these issues have pushed many companies and CEOs into a posture of "wait and see." And that's a real problem. Unless we're careful, we can push our economy right back into a recession.

The issue facing Congress and the administration is simple. Will government actions and rhetoric make things more certain or more uncertain? Will business reforms be given a chance to work, or will there be more beating up and piling on? Will government policies make business leaders so risk averse that we lose our creativity, innovation and competitiveness?

Yes our free enterprise system is built on trust, integrity and confidence. But it is powered by risk, experimentation and sometimes even failure.

So what should Congress and the administration do to reduce uncertainty, reward courage, get our economy moving again, and put Americans back to work?

First, make President Bush's tax cuts permanent and accelerate them.

Based on the government's revised data, the first three quarters of 2001 show negative growth. So we now know that the recession began before the President even took office. Those who said his policies caused the slowdown were flat wrong. But that's not all they were wrong about.

After those three down quarters something very interesting happened. In the fourth quarter of last year, consumption, investment and growth improved substantially.

What happened? What changed? The answer is clear and the evidence is indisputable. It was the President's tax cut package and the rebate checks that brought the American economy back to life.

Speeding up and making permanent the tax cuts will give consumers, investors and companies the certainty they need to make decisions on future investment and spending.

Second, Congress must pass terrorism insurance legislation the moment it returns from summer recess.

In the construction industry alone, potential projects worth more than $8 billion have been scrapped or delayed for lack of this coverage. Tens of thousands of potential jobs are being lost.

We need legislation that provides a federal backstop against claims for insurance companies, and reasonable liability limits that protect businesses from frivolous lawsuits after an attack.

Third, Congress must complete action on national energy legislation. It's just as critical to our economic security as it is to our national security and our energy independence.

This legislation contains incentives to invest in new projects and technologies that will create hundreds of thousands of new jobs. Yet companies will sit on their hands until there is certainty in the tax treatment of these investments.

Fourth, we need class action reform. The House has passed a fair bill that discourages abusive lawsuits while protecting the rights of the truly injured. A majority of Senators supports this legislation, but as we all know, 60 votes are needed.

No industry is safe from class action abuse. Let me suggest that the economically destructive acts of some class action trial lawyers should be the next subject of intense scrutiny by the national new media.

For example, 1,000 American corporations have been named as asbestos defendants.

Our health care system, the finest in the world, has also come under attack. I applaud the President for highlighting the growing crisis in medical malpractice that is literally closing down clinics and pushing doctors into early retirement.

Common sense legal reform will reduce uncertainty in our companies and markets. It will unleash the job-creating forces of American business while giving those with legitimate grievances their day in court.

Fifth, Congress and the administration must work together to maintain fiscal spending restraint. We are a nation at war. During times of similar challenge, we have tried to have both guns and butter. And the impact on our economy was devastating.

Today's weak economy has seriously undercut tax revenues. Budget writers and appropriators must recognize this reality.

Sixth, Congress has given the President Trade Promotion Authority. Our plea to the administration is: use it vigorously, use it aggressively, and use it quickly.

Let's sign, seal and deliver clean free trade pacts with Chile and Singapore that can serve as models for other agreements. Let's complete the Free Trade Agreement of the Americas. And with new bargaining powers in hand, the United States should retake the leadership in the Doha round of world trade talks.

Ladies and gentlemen, the focus of my remarks has been on what the government should do. Let me conclude with a word about what the CEOs of America should do.

Very simply, if you want to make the big bucks, you must have the courage to make the big decisions.

Yes there is uncertainty and there is risk. But that's no excuse for hiding in the shadows – like a scared kid who's running from the neighborhood bully. It's time to make plans, to move forward, and to take advantage of opportunities all around the world. If you don't, your competitors soon will.

So the message is clear. Government must take action to reduce uncertainty. And at the same time, business must step up to the plate and invest in the future of the American economy.

Thank you very much.