Good morning. These past 2 weeks as I've traveled across our Nation and our world, I've been reminded that Americans can rise to any challenge. The Vice President and I have visited communities in the Midwest where floodwaters have destroyed farms and businesses and homes, reaching historic levels. We've seen much that is heartbreaking but also a lot that is heart-lifting.
The natural disaster is bringing out the best in our people. I saw that when I visited Des Moines on Wednesday. People there have been going without tap water, but they still remember what it means to be Americans. Volunteers from all over the State and around the country are there distributing food and water, filling sandbags, and helping older people, the sick, and neighbors whose livelihoods have been washed away.
Already I've declared disaster areas in Iowa, Illinois, Missouri, Wisconsin, and Minnesota. And Federal officials are now in South Dakota, North Dakota, Kansas, and Nebraska, reviewing the extensive flood damage in those States. I've directed all the appropriate Federal agencies to work together as a team to help the victims of these floods. And I've been especially pleased with the work of Secretary Espy and the Agriculture Department and the sterling efforts of the Federal Emergency Management Agency and its Director, James Lee Witt.
Now I'm asking Congress to approve emergency assistance to help the families, farmers, businesses, and communities who've been hurt. And today I'll be heading back to St. Louis to meet with Governors from the Midwest and several Members of the Congress to plan short-term disaster relief and long-term economic recovery. At a time like this, people who have worked hard all of their lives deserve a helping hand. With that helping hand, the people of the Midwest will get back on their feet. After all, they're Americans. They're facing this crisis with grit and courage and generosity.
That indomitable American spirit is recognized as far away as Tokyo and Korea. In Tokyo, I attended a summit of the world's seven leading industrial nations. In Korea, I visited our service men and women serving along the Demilitarized Zone and standing up to the nuclear threats that the North Koreans have presented to us in the last several weeks.
In Tokyo, at the economic summit, my hand was strengthened because of everything the American people have been doing, working to change our economic policies and pushing to cut our deficit and increase investment in American jobs. For the first time in more than a dozen years, an American President was able to go to one of these summits and look at the leaders of the other great economic powers and say, "We are putting our own house in order." Your commitment to change has helped me to come home with job-creating agreements to lower trade barriers worldwide and to reduce our trade deficit with Japan. These agreements will make life better for America's workers, America's businesses, and our families.
After years of deadlocked talks with the world's leading trading powers, we negotiated a plan that will dramatically reduce tariffs on manufactured products, from chemicals to electronics, from pharmaceuticals to farm equipment. When other countries lower their tariffs, more consumers all across the world will buy our products. That means more manufacturing jobs here in America, high-skill, high-wage jobs with a future, and jobs that create other jobs back home.
I could not have persuaded our trading partners to reach these agreements without having made the progress we've made at home on our economic plan. For years other nations have come to these meetings and said the same things to an American President: We can't have a healthy economy in the United States or the world until America cuts the deficit, invests in education and technology, and is able to compete and win again.
Well, from the bargaining table at Tokyo to our factory floors here at home, we are on the move again, stepping up to the plate, taking responsibility, making the tough choices, and building our economic strength, not borrowing from it. America is now the high-quality, low-cost producer of many products and services that can compete in any market in the world.
And our economic plan answers the call that other world leaders have made for years, and now that the American people are making, for historic change. It has the largest deficit reduction in history, $500 billion over 5 years. It has historic spending cuts, more than 200 specific cuts that save more than $250 billion from this budget. And it makes an historic shift from trickle-down economics, where taxes were lowered on the wealthy and raised on the middle class, because more than three-quarters of the new taxes in this plan will be paid by the wealthiest 6 percent of Americans. In fact, for every $10 that we cut the deficit, $5 comes from spending cuts, $4 comes from taxes on the wealthiest 6 percent, and only a dollar comes from the middle class. Working families with incomes under $30,000 are held harmless. The working poor, those who work 40 hours a week, have children in the home, and are still in poverty, will get tax relief so that no American who's working full time with children in the home will live in poverty.
A majority of our small businesses, where the jobs are mostly created in America these days, will actually get a tax cut because of the job-creating incentives in this plan. The plan is fair, it's balanced, and it will create new jobs, permanent, productive, private-sector jobs. With this plan in place, the American economy can produce 8 million jobs over the next 4 years, 8 million new jobs.
As the economic plan has progressed through Congress, the financial markets where long-term interest rates are set have responded. Long-term interest rates have declined to historic lows; mortgage rates are at 20-year lows. Now, if we can keep interest rates at this low level for the rest of the year, people refinancing their home loans or taking out new business loans will pump $100 billion of new capital back into the economy, because they'll have lower interest payments and then they'll have money to consume or to invest.
On top of that, the new business incentives, especially those for small businesses, will create new jobs. There will be new incentives for people to move from welfare rolls to payrolls. That means more jobs and new opportunities for young people to serve their communities while they finance their college education and become more employable in a tough global economy.
The House and the Senate have both passed versions of this plan, and now they're meeting to write a final proposal. With your help we can make sure that Congress says no to gridlock and yes to growth, yes to change, and yes to what is best in the American spirit.
Throughout the natural disaster in the Midwest I've been profoundly impressed by how our people have pulled together as a family. From the Congress to the Governors, to the community leaders in our cities and towns, to the volunteers, and to the people who have been dispossessed, Americans have risen above their divisions and their personal concerns to help people in trouble. In times of crisis we're not Democrats or Republicans, we are Americans.
Today I ask all of you to show that same spirit in responding to our economic problems. To those who would do nothing or slide back into the status quo of the last several years, I say we must go forward with a plan that grows the economy, reduces the deficit, creates jobs, and restores fairness.
I say to my friends in the other party in Congress, just as you have worked with me and the people of the Midwest together to help the people dig themselves out of a natural disaster, so should you join us in digging America out of the legacy of two decades of declining growth, declining productivity, growing deficits, and economic crisis. We are Americans; we can pull together. And together we can make the historic decisions to build a new generation of prosperity for ourselves, our children, and our children's children.
Thank you for listening.