Thank you, Congressman Geoff Davis for that kind introduction and for inviting me to join you today. And on behalf of President Bush, thank you for your leadership in Washington.
Geoff is the kind of leader you want on your team. He brings to the table a keen sense of what we need to keep our country and our economy strong.
On the national security front: pursuing the war on terrorism and protecting the homeland.
On the economic front: cutting taxes and federal spending, investing in technology and innovation, improving our schools and creating jobs.
By supporting the President's tax cut bill that was signed into law a few weeks ago, Geoff is helping continue what we began delivering in 2001: the largest tax relief since Ronald Reagan--some $880 billion put into the hands of American workers, farmers and businesses.
President Bush believes that our economy prospers when the American people make their own decisions about how to save and spend and invest their own money.
We believe that government doesn't create wealth and prosperity for citizens. That's what those of you in the private sector do. And our job is to remove barriers to economic growth and to create a business environment that keeps us competitive.
The Context for American Competitiveness Today the economy is hitting full stride. Our first quarter results were excellent. Growth was running at a 5.3 percent annual rate. This follows a strong 3.5 percent growth in 2005.
And we had more good news this morning. The Labor Department reported that in May, 75,000 new jobs were added to payrolls around the country. And the unemployment rate stood at 4.6%.
Some 5.3 million jobs have been created since August 2003--nearly 61,000 of them in Kentucky. And in Ohio, nearly 69,000.
Also, workers are more productive. Productivity over the last five years has improved faster than it has in nearly four decades, and was 3.7 percent in the first quarter.
Ours is the strongest industrial economy in the world. And President Bush's agenda is focused on keeping on the global forefront.
This is increasingly important as we face the challenges of globalization. This is a powerful trend that's not going away. And it's forcing all of us--local, state and national leaders--to reassess our economic policies and priorities.
In short, we have to reinvent ourselves to stay competitive, to grow, to create the jobs that our workers need, and to raise living standards.
To spark the discussion, let me share a few thoughts and specifics on the approach President Bush is taking.
Immigration reform is a hot issue in Washington these days. There are very strong feelings on this issue. As my boss, Secretary Gutierrez, sees it: "This is probably the social issue of our time. And unless we tackle it--solve it in a comprehensive way--we are going to let the problem get bigger and more complex." Make no mistake: we can't afford to do nothing. Without the President's immigration plan, the situation will get worse. We must focus on strengthening border enforcement--install a Temporary Worker Program--and develop a plan to deal with the 11 million-plus illegal immigrants that are already here in a way that is realistic and consistent with our character as a nation.
Now that the Senate has passed a bill, we have an opportunity to work with the House on getting a comprehensive bill to the President's desk.
Innovation and competitiveness have driven the U.S. economy throughout our history. We've relied on the ingenuity and optimism of our entrepreneurs and workers.
A recent study shows that as much as 75 percent of the value of publicly-traded U.S. companies is derived from "intangible" assets, namely, ideas and innovation. That's up from just 40 percent in the 1980s.
American Competitiveness Initiative President Bush has a very ambitious agenda to keep the nation competitive by encouraging innovation.
The core principles of his American Competitiveness Agenda are: lower taxes and a more predictable tax structure, less regulation of our businesses, and a more open, rules-based world trading system.
A key part of this agenda is increased federal R&D spending from the current $132 billion per year to $137 billion. That would be a huge increase, especially compared to the $91 billion we were spending in FY2001.
The President also proposes doubling funding for innovation research for physical science and engineering over the next ten years.
At the Department of Commerce, for example, we want a 24 percent increase in funding for our world-renowned research lab, the National Institute of Standards and Technology (NIST). This will allow scientists at NIST--who have won three Nobel Prizes in recent years--to advance research in promising fields, such as nanotechnology, hydrogen fuels, and quantum information.
I will see another example of innovation this afternoon when I visit the Toyota manufacturing facility in Georgetown, Kentucky. Later this year, that plant will begin production of a hybrid Camry. The President is very big on hybrids. They save gas (which reduces our dependence on foreign oil) and they reduce harmful emissions. And American consumers love them, too. They bought over 200,000 hybrids last year, a record number.
We're also calling on Congress to renew the R&D tax credit, which encourages companies like yours to invest in cutting-edge research. Private innovation is absolutely critical.
Another critical area is education. We've been graduating fewer engineers and scientists in recent years. And our middle and high school students continue to fare poorly on international science tests.
To reverse the trend, we need to enhance math and science skills in Kindergarten through the 12th grade. The President's plan proposes funding for 70,000 newly trained teachers with advanced math and science skills. And it would create a corps of 30,000 math and science professionals to assist regular teachers.
This will help give us the highly-skilled people we need to keep creating and developing the newest and the best technologies.
A final area I want to highlight is protecting intellectual property. Our leading industries depend on their technologies, trademarks, software and brands. It's their lifeblood.
And pirates know what a gold mine this is. Intellectual property theft is costing U.S. companies some $250 billion a year in lost sales and hundreds of thousands of lost jobs. That's why we are so aggressive about enforcing patent and copyright laws.
Our competitive advantage is only as good as our ability to protect our ideas. We have an active dialogue underway with the Europeans on protecting IP. And we recently won agreement with China for tougher enforcement of its laws against IP theft, which has been a major problem.
I can think of no better way of summing up the American experience as the pursuit of finding a better way of doing things.
We are a nation of optimists and risk-takers. We are a nation of immigrants. We believe in individual freedom and democracy for all.
Innovation responds to need. And if properly nurtured, research and technology will respond to the biomedical, energy, and environmental imperatives we face in the 21st century. Not only will this innovation solve problems and improve quality of life, but it will also bring economic opportunities we can barely imagine today. The goal of ACI is to create the right enabling conditions, the nurturing environment in which a new golden age of innovation can flourish in the United States.
And we believe in our innate abilities to innovate, whether it's inventing the Internet or achieving energy independence. As an economic policy, innovation that leads to higher productivity and rising living standards is the best, if not only, sustainable competitive advantage for our nation in the 21st century.
Thank you very much. And now I am happy to take any questions you have.
Source: U.S. Department of Commerce
