Public Papers - 1991
Remarks to the American Enterprise Institute
Thank you all very, very much. And, Chris, thank you for that warm introduction. And let me also single out my tennis opponent the other day, Paul Orrefice, your chairman, and thank him for his service to this outstanding institution, which I was privileged to serve in a brief period of time back in the seventies. And I want to say how pleased I am that Nick Brady, our Secretary of the Treasury, is with us today.
And then finally, to salute Irving Kristol, honored by AEI with this year's Francis Boyer Award. He's out here somewhere, and it hasn't been actually handed to him. But I'm told I'm not blowing the cover by -- here he is over here. Irving, congratulations, sir. And our gratitude for the abundance of insight that you bring to the study of American politics, the American system, and indeed, American society. Irving has devoted so much of his effort the past three decades to making the world safe for democratic capitalism. That message now opens new worlds from Moscow to Warsaw. And I just wish we could say the same thing of Washington, DC. [Laughter]
Irving also runs one of America's most formidable one-man talent agencies. Not only his own son, Bill, who so ably serves this administration, but legions of proteges in every corner of the political and intellectual worlds open doors by saying, ``Irving sent me.'' [Laughter]
And I am pleased to, very pleased, when Chris invited me over here to have this chance to speak to all of you today. For me, AEI epitomizes something quintessentially American, the engaged intellectual. And Chris referred to this, but many of you have served in government and lived to tell about it. [Laughter]
AEI encourages the ideal of the citizen-scholar, a kind of modern-day Cincinnatus: ready to answer your country's call, and when your work is done, content to return to your word processors.
For the past 3 years you have been, and again, Chris alluded to this, very gracious in offering me advice on all manners of issues. And I thank you for your support and, yes, for what I'll call your constructive criticism.
In the short space of those 3 years, we've seen our world literally transformed: The collapse of communism, the cold war's end, the triumph of the democratic idea. Each epoch-making event swept away the challenges, the conflicts, that defined the world we knew. Each opened up a new era, a new world of possibilities.
And as I've said before, the cold war was, in its decisive aspect, a war of ideas, a clash between two systems speaking to the deepest dreams and desires of man. And that battle was won by Western ideals. And the fact that in the nations of the old Warsaw Pact and even within the Soviet Union, free governments and free markets are now taking root, stands as a tribute to the ideas and ideals that guide this institution, guide AEI.
Our new era brings with it a need for new guideposts for solutions and approaches that keep pace with the times. The fact that at long last we celebrate a world transformed inevitably means change here at home.
Right now, the focus here in Washington and across our country is on the economy. Yesterday I was in Bradenton, Florida, and then we flew over to Meridian, Mississippi, meeting with working Americans, listening to what's on their minds, the same way I've tried to listen to people across America, 48 States, as a matter of fact. I've been to 48 States to be exact over the 3 years. And these are tough times we're in. And many Americans are worried. And they're looking for a sign from Washington that someone cares, understands what's happening. And I hope I've made clear that I do.
These people won't feel comforted by a weighty discourse on the difficulties of divided Government. They know that whatever the leading economic indicators might say, for a person who's lost the job, the unemployment rate is 100 percent. And they are impatient, tired of excuses. They want action, and they can't understand the political gridlock that too often paralyzes Washington, DC.
But Government and governing requires more than action for action's sake. You see, too many in Congress make the easy assumption that when polls tell us about dissatisfaction with Washington, it means they want Government to do more, take more power to itself. But that notion simply does not square with my sense of what people want. Yes, the American people want Government to act, but not to build new centralized bureaucracies or create more red tape. Across America, we see a demand for greater freedom of action. A public weary of mandates, regulations, and taxes, that public wants to reverse the flow of Government power, to restore authority to the people.
In the political and social sphere, this new demand for freedom of action means policies that enhance the power of the individual and strengthen the family. You can see those ideas translated into action in this administration's stand against quotas and for real equality of opportunity; in our child-care bill, a victory against the forces that saw this issue as a chance to build a brave new child-care bureaucracy. You can see it in our HOPE program's emphasis on turning tenants into homeowners -- and, indeed, in education where choice is an essential part of our America 2000 strategy.
Take a look at that strategy. What worries our critics, the defenders of the status quo in the education establishment, isn't that our plan won't work. They worry that it will work. They know that choice, competition, and community involvement are revolutionary concepts capable of literally reinventing the American school. But that's what we want to do. That's what we're trying to do. That's what we must do.
In the economic sphere, the demand for freedom of action means policies that promote market-based solutions: The kind we fought for in the amendments to the Clean Air Act and built into our energy strategy.
Let me focus in more detail about what this means given our current economic situation. No one should be complacent about the sluggish economy or stubborn unemployment rates. But we must not discount the fundamentals, the underlying factors that propel our economy toward growth.
From the first, we've built out long-term growth strategy on several key elements: unleashing capital and reducing tax burdens; keeping inflation in check and interests rates down.
Second, we recognize the need to keep American business competitive: to slash red tape and regulations wherever possible, draw the line against Government mandates that handcuff the American entrepreneur.
Chris DeMuth and Irving's son Bill, Bill Kristol, with his involvement in the Competitiveness Council and Chris' past experience in doing a superb job on deregulation, they both can tell you stories that will make your hair curl. True competitiveness includes also real tort reform, capping these crippling sky's-the-limit liability awards which exert such a strong chilling effect on entrepreneurs ready to bring new products to market.
Third, as a Nation, we've got to make good on our commitment to quality education and job training, to ensure a work force ready for the challenges a new century will bring.
Fourth, we've got to control the deficit. The American people need to understand that right now we spend 6 billion a year, that's three-quarters of a billion dollars a day, just to pay interest on the national debt. We've got to try to hold spending down and avoid driving interest rates up again.
And finally, we've got to make certain American businesses compete on an equal footing, and that means a Government committed to the principles of free and fair trade. We've fought to advance those principles from the EC to East Asia, in the Uruguay round, and with our promising Enterprise for the Americas Initiatives.
We feel the benefits of foreign trade right here at home. Each additional billion dollars in manufactured goods and trade means another 20,000 American jobs. And yet in spite of the fact that, last year alone, total gross exports accounted for virtually all of this Nation's economic growth, a new breed of isolationists seem to think domestic policy ends at the water's edge.
Well, thank God they weren't around back in 1492. Imagine the hard time they'd have given Columbus. Voices on the right and left are working right now to breathe life into those old flat-Earth theories of protectionism, of isolationism. But there is no going back. Our new world is far smaller, communications far more instant. Our horizons stretch much farther with each generation. This is 1991, not 1791; a horse-and-buggy attitude won't carry us into the next century.
On certain issues, many in the foreign policy sphere, the President possesses all the authority he needs to advance an ambitious agenda. But there are things no President can do unilaterally, times when the need for action finds the President and Congress pulling in different directions. I don't approach the problem of divided Government as a political scientist. The ideal solution, in my view, to divided Government remains a government united in pursuit of the public good. In other words, to be candid, my preferred solution to divided Government is a Republican Congress. In the meanwhile, I'm going to keep pushing Congress -- and I mean this; it is important because of what I told you I feel about this economy -- reaching out when I can, giving a kinder and gentler poke, now and again when necessary, to get up with Congress to work with me to get the job done.
I called on Congress to join me in responsible action -- I think history will show this to be an accurate statement -- long before our economy began to struggle. I said back in 1989, during the longest peacetime recovery on record, that America could not rest easy, that we needed to look to the long-term, put in place policies that would sustain growth and would create jobs. And I offered then the first of three economic growth packages. Three sessions of Congress have come and gone, and everyone knows the result: precious little action.
Every one of the economic proposals that I've sent up to Capitol Hill serves the single standard of generating growth, and that includes, yes, the capital gains tax cut that my opponents have labeled as controversial. My opponents like to treat capital gains as a code word for class warfare, even at the very same time they're learning to pay lip service to a concept called competitiveness. And I wonder seriously whether they realize the United States is saddled with capital gains tax rates far higher than our key international competitors? Germany, take a look at Germany: zero percent. No capital gains tax at all on assets held longer than 6 months. Or Japan: An entrepreneur who sells the company he's built from scratch pays a tax of one percent. And it's time we see and understand that higher costs for capital cripple competitiveness and cost American jobs.
When I deliver the next State of the Union Message, when I deliver my State of the Union Message in January, I will go to Congress with a new action program, and I'll call on Congress to set aside politics -- I know we're in an election year then -- and focus on the public interest. And I'll challenge them to enact a commonsense set of economic reforms. And if we do our work promptly -- and we can; Congress can act fast when they want to -- we'll still have plenty of time left in 1992 for partisan politics.
In the meantime, there is a great deal we can do in the executive branch to foster economic growth without waiting for Congress to act. And we're going to continue doing all we can to drive down barriers to trade, open foreign markets to American goods. We will seek ways to lift the burden of Federal regulation without compromising public health or safety. And as I said Monday, we will move quickly to implement the job-intensive transportation bill that has just been passed. And I have ordered Federal agencies to review the effectiveness of a full range of programs, from small business loans to job placement, job training to the process for getting unemployment checks out to the workers and families waiting for them. None of these actions can substitute for effective congressional action, but each can help move the economy along.
So let me repeat. We have had a comprehensive economic growth strategy from the beginning, encompassing every aspect of policy: Deficit reduction to lower interest rates; tax incentives to spur saving and entrepreneurship; regulatory reform; increased and more efficient investment in our public infrastructure; education reform to enhance America's human capital; tort reform to ease the costly litigation that saps the very productivity of this country; and banking reform to make our financial system safer and more internationally competitive; and a trade policy aimed at opening the new markets that mean more American jobs.
I'm confident that we can act to advance America's interests, and I'm absolutely certain we must because our world demands it. I'm confident because I remain convinced America's fundamentals are sound, not just the economic indicators that I mentioned a few moments ago, but the broad fundamentals that sustain American society: Faith and family; the feeling of fellowship that leads millions of Americans to help neighbors in need, without looking to Washington for guidance; and of course, the cornerstone of our American idea, the bedrock belief in freedom that led us from Valley Forge to Desert Storm to the new world now unfolding around us.
Look out on the horizon to the America the entire world now looks to for leadership. It is our country. To the America that exalts enterprise and sweat, the hands that work and the unlimited power of the human mind; to the America whose very name means freedom for millions around the world. That America possesses a power that does not owe its strength to Government. Its power begins and ends in the living example of its people.
Once again, I thank all of you for this opportunity to speak before your most prestigious board, your wonderful organization, and may God bless the United States of America. Thank you very much.
Note: The President spoke at 12:53 p.m. the institute's annual policy conference meeting in the Willard Hotel. In his remarks, the President referred to Christopher C. DeMuth, president of the American Enterprise Institute, and Irving Kristol, a John M. Olin Distinguished Fellow at the institute.