Remarks to the National Association of Manufacturers

Thank you, Dick, and thank all of you. Thank you very much for that warm welcome. Thank you for that warm welcome back. And Dick, thank you, sir, for introducing me and for what you're doing leading the NAM. I want to pay my respects to your president, former secretary, Sandy Trowbridge, who continues to do an outstanding job. Harry Truman used to say: "If you want a friend in Washington, buy a dog." [Laughter] And I'm here to disagree with him, because I feel in Dick, your chairman, and in Sandy, your president, and in the membership of this illustrious organization, that our administration has a friend not only in Washington but all across the country.

And I am very grateful for that, and I normally would not dare to speak for our new illustrious Secretary of Commerce, Bob Mosbacher, but in this regard I expect I'm saying exactly what he feels. And I might say to you, the members of the NAM, it is a wonderful thing to have him at my side, a successful businessman who knows what it means to take risks, knows what it means to try to keep the costs down, and knows what it means to add to the productivity of this country. And Bob Mosbacher is already doing a superb job.

After one tough football game, somebody asked Knute Rockne why Notre Dame had lost. And he answered, "I won't know until my barber tells me on Monday." [Laughter] Well, nobody is second-guessing American manufacturing anymore. And clearly, you all are playing a winning game.

And I'm here today to tell you that deindustrialization that we read about is a myth. And manufacturing, as a share of our national output, is as strong today as it has ever been. And I think many people in this room deserve great credit for that. Thanks to the hard work of you people, who are the brains and the muscle of our basic industries, we're producing more products with a smaller percentage of our population than ever before. And that, my friends, is productivity. And that is why since 1982 our manufacturing output has gone up twice as fast as Western Europe and has kept pace with Japan. You're the producers -- is somebody's heart beating very fast over there or what the heck's going on? [Laughter]

[The President referred to a thumping noise coming from the back of the room.]

In the technological age in which we're living, I'm sure we can -- [laughter]. No, but you are the producers who are building a better America. And I think that your presence demonstrates that you are fighting to win the international struggle for continued growth. You've demonstrated that you can make America more competitive and that you can keep America more competitive.

So, I'm not saying you're going to have to do it alone. There's a role for government; sometimes political leadership is needed, for example, to keep international trade free and fair. But I will tell you that this government will not confuse involvement with interference.

And there's a lot of talk about competitiveness going around these days, and in a way that's a very good thing. But competitiveness is more than just the latest trade figures or the latest quarterly earnings or the latest poll -- or the latest election, for that matter. Surely our success can be measured by better methods than these. This is a good time for us to look towards a larger horizon. And we stand at a special moment in our history. We're prosperous. We are at peace. And at such a point, we've got to set our sights higher. And we must look farther ahead. It's hard for us to believe, but the 21st century is only 11 years from now.

And you've called this conference the New Leadership Summit. Leadership is certainly found in those like you who keep the great engines of American industry turning. In creating jobs and building businesses and meeting needs, our nation's manufacturers have shown the qualities that will carry us into the future. And make no mistake, the challenges we face will test your vision and your capacity to define an agenda for action. So, today I'd like to address that very point by outlining my agenda for the next American century.

To build a better America, one of the most important priorities for this government will be to encourage savings and long-term investment, to get our fiscal house in order -- and that means, priority, bringing down the Federal budget deficit.

And last month, one of the very first things we did was to submit a budget to Congress with a clear agenda to cut the Federal deficit and enhance business' ability to plan, expand, and build. And next year, under current law -- there are no changes in the revenue laws -- the economic growth we are currently enjoying will increase Federal revenues by more than $80 billion without increasing the tax rates. And our plan will hold the line on spending, using some of those new revenues to slash the deficit by more than 40 percent and meeting those Gramm-Rudman-Hollings targets.

To encourage long-range investment in businesses of all sizes, it's time that we restored the capital gains differential by reducing the capital gains rate to 15 percent on long-held assets. And this really is a case where less means more: more revenue to the Federal Government. The Treasury now estimates that my proposal would bring in $4.8 billion of new revenues in 1990. That's the Treasury estimate. And the critics all say, and have climbed on us in saying, "This is a tax cut for the rich." I say, cut the capital gains rate, and you'll have more jobs for the poor and others, and more growth and opportunity for the whole country. Competitiveness, opportunity, saving and investing for the long term -- this is why we need a capital gains tax rate cut. And it's why we need one now. And I am going to keep on fighting to see that the Congress gives the people that which they deserve: more opportunity and more jobs.

To spur investment in basic research, we've proposed a permanent research and experimentation tax credit. We've also proposed a 13-percent increase for science and technology programs and intend to double the National Science Foundation's budget by 1993 to guarantee that America's technology is number one.

A strong economy needs a safe and secure banking system. And that's why we proposed a comprehensive plan to solve the difficulties of our savings and loan industry; and I'm delighted that our very able Secretary of the Treasury, Nick Brady, was over here this morning talking to you about the broad principles of that plan. Frankly, the plan has been pretty darn well received on both sides of the aisle on Capitol Hill. And in my speech to the Congress I challenged the Congress to act within 45 days. This is a matter of considerable national urgency.

We want to ease the pressures now building on the most important organization in America -- the family -- by promoting choice on issues like child care. So, last week I sent legislation to Congress that puts money and options in the hands of parents rather than in the hands of the bureaucracies. And we are going to keep on pushing for that concept. I do not want to have my administration identified with one single initiative that diminishes parental choice or in any way weakens the family. The Government must do what it can to strengthen family.

I'd say, though, that the most powerful key to long-term competitiveness is education. A strengthened education system is the essential ingredient for America's prosperity into the next decade, into the next century. But no one suggests that education is a minor matter on the national agenda. It is vital to everything we are and can become. Make no mistake about it, I understand the historic role of the communities and of the States, and I understand the limited role that is properly assigned the Federal Government. So, I don't want you to feel that I'm moving towards centralizing control over our schools in Washington, DC.

There are no quick fixes in education. Like most of the long-term issues on the national agenda, American education won't be fixed with a bolt of lightning or a puff of smoke. It's going to take collective effort at all levels, public and private, to get it right. And those businesses that are involved with local schools -- developing the work force at its source -- are making fail-safe investments. And they stand to reap the greatest rewards.

I wish Barbara were here to talk to you a little bit about her interest in literacy and to salute as she does the business community for its involvement. I talk about a Thousand Points of Light. And if there's ever an example of that, it is the wide array of business people and business interests that are out there helping in the field of education. I didn't much like it when I talked about a Thousand Points of Light and some cynic around here made some reference, "What he really is talking about is a thousand pints of Lite." [Laughter]

But I do salute you for your outreach. For those workers that are already on the line, we must build new skills and flexibility, as jobs change, through training and retraining. The NAM policy position that you adopted last year said that "investment in human resources is at least as important as investment in equipment and technology." And you're absolutely right on that one. Machinery and technology alone don't improve productivity; people do.

Another issue where we plan to play for keeps -- we're determined, and we are going to keep working at this one -- to get the drugs out of the workplace. Drug and alcohol abuse in the workplace costs $60 billion every year, putting productivity and lives at risk.

Drug abuse in America really must stop, and we're off to a fast start. Last month I talked to the Congress about four decisive issues: education, treatment, interdiction, and enforcement. And I asked for an increase of $1 billion in budget outlays -- to nearly $6 billion in 1990 -- to escalate this effort. But we'll also be looking to you to set effective, well-reasoned drug policies in your businesses.

Employers can teach their people to recognize the signs of substance abuse in their coworkers and understand how drug abuse hurts the nonusers on the line. I've called for a drug-free workplace. And Tuesday's Supreme Court decision, one that just came down the day before yesterday, affirms drug testing. And that's going to give this concept of a drug-free workplace a much better chance of success.

Any long-term agenda must also ask how we can leave the Earth we've inherited a little better than when we found it. And I was delighted to see Russ Train here, Bill Ruckelshaus here, and I understand they did a first-class job in addressing themselves, with their background of experience, to this question.

We've got to devise answers to the problems of ozone depletion and global warming and acid rain. We've already joined with other nations to call for the elimination of CFC's [chlorofluorocarbons] and the development of environmentally safe substitutes, as well as adopting a tough new policy on the export of hazardous waste. We can do these things without stifling the economic growth that is necessary, indeed, essential for our nation's economic health. The time has come to set aside partisan approaches to these and these other enormous environmental questions. We've got to ensure that our grandchildren can fish on the same lakes we've enjoyed.

And in this agenda for the new American century, I've asked you to consider a broad vision, a vision that relies on the dynamic spirit that is America: the spirit that says buildings should not stand empty while people lack shelter; jobs should not go unfilled while young men and women stand idle on the street corners; no one should go hungry in the richest Nation on the face of the Earth. And we must promote local efforts to assure that every American can seize a share of this prosperity and help to create more of it, whether through the constellation of local community groups already at work or through new ideas, like our program to encourage our nation's youth to become involved in community service. I'm absolutely convinced that, with the proper leadership from the White House and across the business community and elsewhere, we can encourage those young people who are more fortunate than some of their peers to pitch in and help those that are less fortunate.

We're going to rely less on the collective wallet -- we have to, to do what I told you I want to do on the budget -- less on the collective wallet and more on the collective will. But this does not mean lowering our sights or our expectations. It's just exactly the opposite of that. In the era of tight budgets, we're not going to simply "make do with less." We're going to learn how to do more with less -- and do it better. In the factory, you call it productivity. Across our country, I call it the national spirit.

And, yes, we're a prosperous country, and we are at peace. But such quiet moments often become pivotal in the Nation's history. The choices we make now are going to determine whether the door to the next American century is closing or opening wide, for all who dare to dream.

Thank you for your leadership. Thank you for the support of our administration. And aren't we lucky to be living in 1989 in the United States of America, the best, the freest, the greatest country on the face of the Earth? Thank you all, and God bless you.