Remarks at the Labor Unification Legislative Conference

Thank you. I would like to—first of all, thank you for the wonderful, warm welcome—to express my deep respect and support for the IAM president, Tom Buffenbarger, and all of the IAM officers; the UAW executive VP, Ruben Burks—I know Steve Yokich is in Germany now—and all the UAW members here; and the steel workers' president, George Becker, and all the steel workers here; and of course, everyone up here on the platform with me.

George Becker would give his voice, his heart, and his life for his members. And he nearly gave his voice tonight.

I came here to do a number of things, but I'd like to start with first things first. The first thing I want to do is to say a simple, profound thank-you. Thank you. Thank you for your support. Thank you for the fight you have waged. Thank you for the miles we have walked together these last 6 years.

I also came here to support the merger of these three great streams of American labor, joining into a new river of 2 million strong. Throughout the 20th century, all three of you have been at the forefront in the struggle for human progress in America. The workers at River Rouge and Republic Steel shed their blood for more than their own rights and their own families. Their sacrifice gave all of us collective bargaining and the minimum wage.

The founders and members of your three unions gave us things all working people now take for granted as essential elements in a humane society: vacations, health care, pensions, grievance procedures. You have continued to lead the fight for all Americans, the fight to create Medicare, to civil rights, to protecting our Nation against the Contract With America. The UAW, the steel workers, the machinists have provided the minds and muscles for a progressive society in our country.

Now, in this season of renewal and rebuilding for America, the house of labor is growing stronger. The creation of a mighty new industrial union, not just a merger but a new organization, will set the stage for even greater progress for your members and your families and for all the rest of America in the 21st century.

I believe you have an opportunity and, therefore, a duty every bit as real as that which was seized by the great generations that preceded you a half century ago. The labor pioneers had it hard. They wore their scars proudly. They were not always the easiest of personalities. But in spite of their contentiousness, I like to think that Walter Reuther, Philip Murray, and Thomas Talbot are up in heaven shaking hands at this new merger.

I thank you all for the strong support you have given not only to me and the First Lady and the Vice President and our administration but to our Democratic Party, especially in 1998. I'll never forget the sense of pride I shared on election night with John Sweeney, when he was at the White House, and we realized that for the first time since 1822, the President's party had won seats in the House of Representatives in the sixth year of an administration. You might be interested to know that the last time that happened, in 1822, the other party disappeared. [Laughter] We won't be that lucky. [Laughter] But it certainly is a good incentive to continue the fight.

I want to thank you for your commitment to make your voices heard, to advance the issues and the candidates that are pro-worker and profamily. For 6 years, as George said, we've been on a journey together to renew our Nation, to restore the American dream. For decades, our Nation was buffeted by the winds of economic change. Wages for working families stagnated; working people fell further behind. Beginning in 1993, together, we put in place a new economic strategy to put our people first. Because of what you have done, America is working again, with the longest peacetime expansion in history, the lowest peacetime unemployment since 1957, nearly 18 million new jobs, the lowest welfare rolls in three decades. And finally, after three decades of stagnation, in just the last 3 years wages are rising at twice the rate of inflation.

Things are not all as they ought to be, but clearly, at long last, we have begun to move aggressively in the right direction. Together, as has already been noted, we stood up against the congressional majority that was absolutely determined to strip away the victories and undermine the rights of working people.

I was proud to stand with you also to defeat the "Paycheck Protection Act" in California. I was proud to stop every piece of anti-labor legislation sent to me by the Congress. We knew the "TEAM Act" would undermine collective bargaining, so we said no. We knew the Republican comp-time bill would be unfair to working people, so we said no. We knew that safe pensions and a strong OSHA are vital to working people, so when Congress tried to undermine them, we said no.

After 12 years in which my predecessors exploded deficits and quadrupled our national debt, all the while talking about a balanced budget and accusing my party and our friends in organized labor of being the big, irresponsible spenders, we actually balanced the budget and did it in the right way, while nearly doubling our investments in the education and training of our people, and having big increases in things like medical research.

We're in the second year of surpluses, with years and years more projected in the future. America is working again. But as I said in my State of the Union Address, this is not a time for complacency. For one reason, as all of you here know, especially the steel workers, we are living in a very dynamic and somewhat troubling international economic environment where things can change overnight. For another, in a world that is changing this fast, we have to take advantage of this moment of prosperity to deal with the big challenges facing America in the 21st century. We cannot rest until America works for every American, until prosperity extends to every working family in every community. America must do more.

Among other things, we must remain a great industrial nation. So I'd like to talk to you tonight about three aspects of our challenge. First of all, before the baby boomers retire, and with life expectancy increasing at a dramatic rate, with people over 80 being the fastest growing part of our population in percentage terms, we must use this moment and this surplus to save and strengthen Social Security and Medicare for the 21st century.

Now, here in Washington there is now a great debate about what to do with the surplus and how it should be applied, and whether, to Social Security and Medicare. I won't take time tonight to talk about the competing visions of Social Security and how we should deal with that, but I will work with you on that. What I want to talk about is, what should be our first priority with the surplus? I believe it should be to save Social Security and Medicare, and in so doing, to pay down the national debt that was quadrupled in the 12 years before I took office.

Now, I am pleased that even though we will have our disagreements about what to do with Social Security, the Republican leadership in Congress has agreed that we should set aside 62 percent of the surplus to save Social Security. I think it's important that we do it in the right way: We should put 75 years of life on the Trust Fund; we should do something about elderly women whose poverty rate is twice the rate of seniors; and we ought to lift the earnings limit so that seniors who want to work can do that.

Now, unfortunately, we do not agree on whether to set aside another 15 percent of the surplus to save Medicare. Of course, we will have our disagreements about how Medicare should be reformed. I think it should be reformed and kept solvent for 20 years, and also, we should add a prescription drug benefit to the Medicare program. And I don't want to kid you. I think because of the numbers of people that are going to retire in the baby boom generation, and because we're all living longer, and because of medical advances which at least in their early years are more expensive, we will have to make some further reforms in Medicare, even if we do what I want.

But if we set aside 15 percent of the surplus for the next 15 years for Medicare, we can at least guarantee that it's all right till 2020. If we don't, we'll be faced with possible changes in Medicare that could undermine the universality of the program and its absolute reliability for seniors and for the children and grandchildren of seniors who don't have to pay those out-of-pocket medical expenses. So this is a huge issue.

Now, our friends in the other party say that we ought to just reform Medicare and maybe shift some of the costs to seniors—who may not be able to afford it—and maybe get away from Medicare as a defined benefit program. I am against that. I do not want to see Medicare turned from a defined benefit program into a defined contribution program.

But think of what we can do if we set aside part of this surplus, which will allow us to pay down even more of our debt and put 20 years on the Medicare Trust Fund's life, and then we can figure out how to make what other changes need to be made to strengthen the program and how to add the prescription drug program.

Now, that will cost more money in the short run, but over the long run, adding the prescription drug benefit will cut down on doctor visits; will cut down on hospital costs; will cut down on critical care costs, because with all these advances in medical research, people will be able to stay healthier. The best way to cut down on the cost of the Medicare program is to keep seniors healthier for longer periods of time, and the medicine will help us to do that.

I believe the American people should have some tax relief out of this surplus, but I think we should save Social Security and Medicare first. Then I think we should focus the tax relief on helping working people and the middle class begin to save from their first day on the job, so they will have a piece of this enormous wealth that America has enjoyed in the last 6 years. That's what our USA accounts, our Universal Savings Accounts, will do.

So the choice the American people will face is our plan, which invests the surplus for tomorrow and focuses the tax relief on working families and the need to save, and theirs, which spends a lot more of the surplus today. Ours favors savings; theirs favors consumption. Ours focuses tax relief on the middle class, and theirs—well, theirs is a Republican tax plan. [Laughter]

I think at least this administration and our leaders in Congress ought to be entitled to the benefit of the doubt, based on the performance of the economy in the last 6 years. Their economic theory gave us 12 years of rising deficits and declining incomes. Our economic strategy has given us growth and surpluses. When I took office, the national debt had risen to one-half our annual income. If we adopt my plan for the surplus, in 15 years, it will be just 7 percent of our annual income. That's the lowest it's been since right before we entered World War I in 1917.

What that means in practical terms to you is that when I took office, we were spending over 14 cents of every dollar you paid in taxes just to make our interest payments on the debt. In 15 years that will be down to 2 cents on the dollar. The rest can be spent on you and your children and your future. And within 18 years, the United States of America would be debt-free.

Think of it: If we just have the discipline to do the right thing—and I'll say more in a minute why it's good for the economy—we could save Social Security for 75 years, save Medicare for 20 years, and get the United States of America out of debt. I think that is the right thing to do.

But I don't want to pretend that their plan won't sound good, sound sweet, and sound simple. All I ask you is to look at the performance of our country in the last 6 years and give us the benefit of the doubt and support us. Let's save Social Security. Let's not let Medicare be dissolved. Let's not let it be changed fundamentally in its character. And let's pay down this debt to keep America's economy strong.

Now, the second thing we have to do is to keep the economy growing and to deal with crises as they occur. We have to have a strategy to keep the global economy working for Americans, as well as to increase the economic development here at home.

For the first 5 years of my Presidency, 30 percent of our economic growth came from increasing exports, and manufacturing employment in America increased. But last year, because of the global financial crisis, which has left Russia, most of Asia, in a deep recession, and has slowed growth dramatically in most of Latin America, the manufacturing sector in our country was hit very hard. We saw many, many jobs lost, and we know many more than those that were lost are still threatened. Industrial America is hurting now.

I have worked hard to limit this global financial crisis, to try to right the things that are out of whack, to help our trading partners return to economic growth in a healthy way so that they could buy our products instead of dump on our markets. We need a 21st century financial and trading system that limits the cycle of boom and bust, that strengthens social safety nets, that works for ordinary working people and their families in every country. In short, the United States must lead a crusade to put a more human face on the global economy.

While we are doing that—and I expect to spend an enormous amount of time this year working on that, so that we can reduce the likelihood that we'll have years in the future like the last year has been—we cannot let other economies' difficulties be a justification or an excuse for them to violate trade laws and engage in unfair trade practices.

Make no mistake about it. It was not economic difficulty and the declining value of currency which made foreign goods cheaper, which precipitated the present crisis in steel. This was not an ordinary economic event. We know it was the result of unfair trade practices. We have used tools that are unprecedented in this kind of dispute to respond.

The Secretary of Commerce speeded up consideration of the dumping cases. We just announced that both Japan and Brazil have been dumping steel into our markets. We've put them on notice that the surge in exports is unacceptable, and this means that anyone who imports steel from Japan or Brazil must pay large deposits or post substantial bonds to the U.S. Customs Service. Paying these duties will likely reduce further unfair steel imports from these countries.

We've also made it clear to Korea in no uncertain terms that they cannot fill the void with unfair trade practices, and so far they have been responsive, though we'll continue to watch it closely. As you know, we're in negotiations with Russia on a comprehensive agreement to reduce their steel exports to the United States.

The goal of all these actions is to get imports back to their pre-crisis level when our steel industry was competing just fine with everybody in the world. And again, if we have a fair policy and we don't have unfair penetration, that will happen. Now, I know that for a lot of hardpressed plants, workers, families, communities, these trade laws work too slowly. But we are accelerating the pace at which they will work to the maximum ability to do so. December numbers show a 32 percent decline in steel imports across the board, a 67 percent decline in hot-rolled steel.

Now, I would just like to make one observation about that. For all those people who said that all these imports were just the product of ordinary economic activity and, therefore, we shouldn't do anything, the fact that they could cut hot-rolled steel exports from their countries to us 67 percent in one month pretty well destroyed the argument that it was ordinary economic activity that led to them in the first place.

In the case of Japan, we have made it clear that if their exports don't return to pre-crisis levels, we're prepared to take appropriate action, including self-initiation of trade cases, something that is almost unprecedented. I will work very closely with you as we move forward. This has been a tough year for the steel workers and for many other manufacturing workers. We need to do more. And we will keep at it until we turn the crisis around.

The challenge we face, however, goes beyond steel. We have to make sure that the world economy works for everyone. As George said in his opening remarks, we've had some disagreements about this in the past. Trade has divided Americans for a long time. I want you to know, however, that I am determined to do whatever I can to find common ground on this issue that will enable labor and business, environmentalists and government in the United States to work together.

I support open markets because it has given us higher incomes and more jobs, and for the first time in anyone's memory, now the United States has the lowest unemployment rate in the industrialized world, even lower than Japan. No one can remember a time when that was the case. It's been a very, very long time.

Now, the right kind of trade is good for working families. And when a financial crisis hits our trading partners, we can see the devastating effect it has on them and on others here at home. But again I say we can't allow international economic competition or adversity elsewhere to become a race to the bottom here at home or in any other country.

My goal has got to be to level the world up, not level it down. That means we have to press for more open markets that have stronger safeguards for workers, not weaker ones, for health and safety, for children, for a clean environment. A trade that honors the rights of workers and the dignity of work, that respects core labor rights. We have to do that.

We should do more not only through the trade framework but with the international labor organizations to raise labor standards around the world and to lead the world community to conclude a treaty that bans child labor everywhere in the world.

Now, if we save Social Security and Medicare, if we can keep the economy going in the midst of all these troubles, the third thing that we have to do is to make sure that the economy works for all of our people and that adversity can be quickly overcome. If we can't do it now, when will we ever do it? That's why we ought to increase the minimum wage again. Ten million working families need it, and we ought to do it.

That's why we should expand the family and medical leave law to cover 10 million more workers and their families. It is not broad enough in its coverage. If we can't afford it now, when will we ever get around to doing it?

And that's why we have to recognize, also, that there are people in this country, in urban communities and rural areas, who have not felt any upturn in the last 6 years. That's what my new markets initiative is all about.

You know, we have all kinds of devices to help encourage Americans to invest in developing countries overseas, that aren't present here. One of the things that I have proposed is an "American Private Investment Company," modeled on our Overseas Private Investment Corporation, that would enable us to give both tax credits and loan guarantees to people who would invest in high unemployment areas in America, to put in new plants and new businesses, to create new markets and new jobs.

Let me just give you an example of how it would work, because I'm going to need your help to pass this. New York City—while America has a 4.4 percent unemployment rate, the unemployment rate in New York City is about 9 percent. Now, when you consider how low it is in some places in New York City, that means in a lot of big urban centers, it's well over 10 percent. If this whole plan passes, and a group of people got together, for example, under these laws that I have proposed, to spend $300 million and open a plant in a high unemployment area in Brooklyn or the Bronx, or they wanted to— to use Congressman Rangel's favorite example— they wanted to rehabilitate Yankee Stadium instead of moving it away and hire construction workers who live in the Bronx to do it—suppose they wanted to do that. Under our plan, if this law passes, they put up $300 million; the first $100 million, they get a 25 percent tax credit for. The second $200 million, they'd have a loan guarantee for, which means they'd only have $75 million at risk for the $300 million investment.

That's a good deal. The best untapped markets for American business are here in America, and it will lower everybody else's threshold of anxiety; it will create economic opportunity. It's good for the steel workers. It's good for the machinists. It's good for the auto workers, because if those people have jobs, they'll buy more of everything. And I want you to help me pass it.

I also ask you to help me strengthen our education system, to finish the job of cutting class sizes by putting 100,000 new teachers into our schools, to pass our proposal to build or modernize 6,000 schools.

And I ask you to do something that will be quite controversial. I hope you will support me in this. Every 5 years, we pass an authorization law which sets the terms under which we give our tax money back to public schools. And it's about $15 billion a year now that we give to schools to help them do their work. We now know—from teachers, from principals, from parents, from students themselves, from worlds of research—what works in the schools and what doesn't. We know that every problem in American education has been solved by somebody somewhere. But we know something else: Our kids, a representative sample of our kids—represented by race, income, and region—scores at the top of the world in the 4th grade math and science tests, drops to the middle of the world by the 8th grade, and is nearly at the bottom by the 12th.

Now, those children do not get dumber as they get older. That means we are not doing well enough by them, and we have to do better. We have to make sure all these kids can read well when they're in elementary school no matter what their family background or where their folks came from.

So I say, we need to change the terms in which we give out this money, not because the Federal Government makes it up in a room somewhere but because the schools have told us what works. We ought to end social promotion, but we ought to do it by saying we want to end social promotion, but we don't want to declare the kids failures because the system's failing them. So we ought to provide more funds for summer school programs, for after-school programs, for tutors—keep the kids out of trouble, off the streets, in the schools learning, but make sure they know something when they go from grade to grade.

The teachers organizations have asked us repeatedly to make one requirement that every school has not only a written, reasonable discipline policy but can prove it's being enforced. That's important.

They ought to identify schools that are failing and turn them down or shut them down. Every State that's done this has found that they hardly have to shut any schools down, because they get turned around once they know that they're going to be shut down unless they do turn around.

These are elemental things that have worked in community after community after community. I think parents ought to get a report card on every school, every year, that their children are in. I think if we do these things, you'll be amazed at the results we'll have 5 years from now, when we have to reauthorize this aid again.

But this will be real controversial. Some people will say it's too tough on the kids that come from poor backgrounds. I think that's selling them short. They can do just fine, if they have good schools. And I'll tell you something, if they get out of school without a good education, the world's going to be real tough on them. And so we need to help them.

And then some of our friends in the other party will say, "Well, here's the President trying to micromanage the schools. We just want to give them the money. We're not trying to tell the schools what to do." Well, that would be true if I had just sat in my office one day and come up with this and thought it sounded good. This is what the people at the grassroots level have said and done and proved works. And it is simply wrong for us to keep subsidizing failure when we can invest in success. So I ask you to help us.

Just two other things, very quickly: I want you to help me this year do what we didn't do last year and pass a strong, enforceable Patients' Bill of Rights. Now, a lot of you know— a lot of you know, or you're about to find out in very difficult ways, that after years of moderate inflation in health care costs those premiums are going up again, even for managed care. And if you're going to pay for health care, you ought to be able to get health care. If you need to see a specialist, you ought to be able to see one. If you have options for health care, you ought to know what your options are. If you're in another town and you get hit in an accident, you ought to be able to go to the nearest emergency room, not one that's halfway across town. If you're in the middle of treatment with a doctor, you ought to be able to continue the treatment even if you change health care providers. These are elemental things.

The last thing I want to say, if you want the economy to work for everybody—I want to come back to something I said before—I know this is an alien concept; if I had been running for President in 1992—and many of you did so much for me—and I said, look, you vote for me and 6 years from now I'll be coming back to you telling you what great things will happen if we pay down the national debt, you would have decided that I needed a trip to a doctor, not to be elected President. But we can talk about that now.

We want the economy to work for everyone. You don't know what's going to happen beyond our borders. I am doing my best to turn this situation around, to do everything I can to make sure we don't have another year like the year we just had in the global economy, with all the trade problems and other things that came down on us. But if, God forbid, we continue to have these kinds of problems, don't we want the strongest demand we have here at home?

Don't we want to be able to—and if we do more to protect our markets from unfair trade practices, then it still means that we're going to have to generate more economic activity here at home.

If you pay down the debt, what will happen? Interest rates will stay down, much lower than they otherwise would, no matter what happens around the world. That means lower home mortgage payments; it means lower car payments; it means lower business loans; it means lower student loans; it means lower credit card payments. It means greater investment in the American economy, more jobs, and lower prices and higher consumption. That's what it means.

Now, I do not know what is going to happen everywhere in the world in the next 2 years, much less after I'm gone. But I know this: If you'll go along with this and you'll help me do this, for the next 15 years, every single year the interest rates in America and the economy in America will be in better shape, no matter what happens, than they would have been if we don't do it and we give away this money right now. So I ask you to help me do this. This is a right thing to do for the United States of America.

Finally, let me just say there are a lot of changes going on in the world. No one can predict the future with any certainty. Tell you the truth, it's all worked out a little better, until this last rough patch in the road for us, than I thought it would when I was running. But I knew we were doing the right things.

One of the things we know is, if we put the American people first—if we think about how people can balance work and family, if we think about how we can preserve the dignity of work, if we think about how we can give every child the right to live up to his or her God-given capacity—if we do the right things, then in the tough times we'll do better than we otherwise would have, and in the good times we'll soar.

The American labor movement has helped this country to do the right things year-in and year-out, decade-in and decade-out. In joining together, I am convinced you have done the right thing for your members and their families for the 21st century. And I am convinced that you will do the right things for America.

Thank you, and God bless you.