Remarks on the Program for Economic Recovery at a White House Breakfast for Democratic Members of the House of Representatives

I'm going to say a few words here first, and them we're going to have breakfast. And then we'll have a dialog instead of a monolog by me, and I'll try to make the monolog very brief.

Over the last several weeks, I think we'll all agree the American people have begun to believe in the President and the Congress and believe that we can really solve the problems that face this Nation. And your vote on the Gramm-Latta measure, I think, was the principal reason for them feeling that way, and I want to thank you for that. I think I understand the courage it took for all of you to support that resolution, and I think you have the gratitude of your fellow citizens today. But the people may be disappointed. Reconciliation, which has a lot of meanings but the particular one where we're concerned right now, may turn out to be the difference between what you voted for in Gramm-Latta and what the people are actually going to get if the budget committee package goes through.

The new Gramm-Latta bipartisan reconciliation bill is true to the principles of the original resolution. It is a compromise accepting the majority of the committee recommendations-and I must say, I think that in the majority that most of the committees did do a fine job, and there was no problem at all in accepting what they brought forth. But there were a few that brought down things that would make us fall more than $20 billion short of what we need over the next 3 years. And what we're talking about, of course, in the son of Gramm-Latta, is how to correct these so that those with the majority reports that came out of the committees could be put before the House.

I think it deserves to be put before the House for an up-or-down vote. And I called the Speaker and asked him if he would permit either a substitute or an amendment containing that package to be added to those, the majority that we would accept. I've had no answer. And apparently I know what the answer is.

Another bipartisan effort—and I think probably we should mention this morning-is the effort representing, again, a compromise between congressional proposals and the administration's original proposal, and that's the Conable-Hance tax reduction bill.

I have retreated from 10-10-10 retroactive to last January 1st to 5-10-10 to be effective as of this coming October 1st, but accepted—and very willingly—a number of changes, particularly around the business tax and others that were recommended even by some of you, but in the negotiations that have been going on. And I believe that proposal will restore the economy, stimulate savings, investment, and increase productivity.

I've just received a report the last few days from 15 of the major steel companies in the United States. These 15 companies, between them, are planning a number of modernization and rehabilitation and expansion projects that total $3.2 billion. Now, I know that some are concerned that maybe the business tax is going to inspire plants to leave where they are and move to other areas and so forth. So, I've broken down the projects to just see if there might be anything to that.

These 15 companies, with their $3.2 billion proposed spending, 12 of them will be in the Northeast in the already existing plants, 15 will be in the Midwest, and I'm including Ohio and Arkansas in the Midwest. I'm sometimes not sure whether they're in border areas, whether the East considers one East and the South considers the other South, but if you consider them Midwest, there are 15 there. Six will be in the South, three in the West, and only one project unspecified as yet. And all of this was planned and decided upon, in their report they say, with the expectation that the economic package is going to be passed. Now, what are we going to do with that package for the economy if just simply the promise of it has brought that about after all the years of the deterioration and the aging in that very basic industry?

The Conable-Hance tax program targets 70 percent of the income tax relief to the people in the $5,000 to $50,000 earning bracket, who presently pay 67 percent of the tax. I simply throw that in as an answer to those who are still attacking the bill as somehow being slanted to the more affluent. And of course we know the income tax cut isn't really very much of a cut, because there is built into the system an increase that will amount to 22 percent over the next 3 years. And our tax calls for 25-percent reduction, so we're basically just eliminating this enormous tax increase.

So, with that as an appetizer— [laughter] —we'll have breakfast, and then we'll have some conversation.