THE WHITE HOUSE
Office of the Press Secretary
REMARKS BY THE PRESIDENT AND SPEAKER HASTERT ON NEW MARKETS LEGISLATION AGREEMENT The Roosevelt Room
11:57 A.M. EDT
THE PRESIDENT: Thank you very much, everybody. And I think it's just "good afternoon." (Laughter.) Mr. Speaker, Secretary Summers, Secretary Shalala, Administrator Alvarez and Mr. Sperling from the White House. And I want to recognize here from the House of Representatives Congressman Rangel, Congressman Talent, Congressman Watts, Representatives Watt, Kanjorski, Jefferson, Velazquez, LoBiondo, Chambliss, Becerra, Bono, Davis, LaFalce, Price, Reyes, Waters, Hinojosa. I think that's everybody. (Laughter.)
I'd also like to acknowledge people who aren't here who have supported this effort -- to Chairman Archer and Representatives Clyburn, Roybal-Allard, Hayworth, Kildee, and the members of the Congressional Black, Hispanic and Indian Caucuses. And I want to acknowledge the presence in the audience of Mayor Webb of Denver, and Mayor Campbell of Atlanta.
This morning, Speaker Hastert and I have the honor of announcing a truly remarkable bipartisan achievement. We have completed an agreement to making historic investments in the untapped markets of America's inner cities, rural areas, and Native American reservations.
Today our economy is the strongest it has ever been. But there are places that have still not been touched by our prosperity. For over seven years our administration has worked hard to change that. Under the Vice President's leadership, we have created and administered empowerment zones and enterprise communities; we have strengthened the Community Reinvestment Act, and fostered community development banks and other community financial institutions. These initiatives, I believe, have made a significant difference in many places in America. But we know that we have more to do, and we know we must do more to get private sector firms to step up to their responsibility to create jobs and opportunity.
That's why I launched this New Markets Initiative last year. I've been to Appalachia, to the Mississippi Delta, to East Palo Alto, to Newark, to Phoenix, to many other inner cities; and I've been on the reservations of the Lakota Sioux and the Navajo.
Everyplace I've gone, I've seen talented people, eager for opportunity and certainly able to work. They are the untapped markets that are not only crying out for their own opportunity, but clearly presenting us an opportunity to keep our economic expansion going without inflation.
Early in this endeavor, I began to talk to the Speaker about this, and he told me he was interested in doing something; that it was something he was genuinely concerned about. Last November, on our second tour, the Speaker and I went together to Englewood, Illinois, along with Congressman Rush and Reverend Jackson. It's on the south side of Chicago. And, together, we made a pledge to try to pool all the ideas that both parties had for dealing with this challenge, and to try to come up with one unified, bipartisan effort. At the time, I said and he said, that giving people a chance to make a living or start a business was neither a Republican nor a Democratic issue, but an American imperative.
Today, we have members of both parties here in substantial numbers to say that we're honoring the commitment we made at Englewood. We have achieved an agreement that will allow us to give every family in every community a stake in the prosperity Americans have worked so hard to build.
I'd like to give some of the details of this agreement, and leave it to the Speaker to outline the rest. And then we'd like to invite four of our members, two from each caucus who have been particularly active in this endeavor, to speak.
First, under the agreement, people who invest in a high-unemployment, high-poverty area anywhere in our country will qualify for a New Markets tax credit equal to 30 percent of the amount they invest. The American people will share the risk of taking a chance on Americans. Of course, no one's going to put up the money if they think they're going to lose it. But at least this will give them a greater incentive to take that risk.
Second, the House of Representatives will authorize the other major pillars of the New Markets Initiative -- New Markets venture capital firms geared toward helping small and first-time entrepreneurs; America's Private Investment Companies, modeled on the Overseas Private Investment Corporation, which will help large-scale businesses expand and/or relocate to distressed inner-city communities. With these venture capital funds and APICs, we'll provide two dollars of government-guaranteed loans for every one dollar of equity capital investors put into new markets. That will lower their interest costs for borrowing, and again reduce the risk of taking a chance on America. We will now be able to spur, with these initiatives, more than $20 billion in private sector investment.
Third, the agreement will give a major boost to our empowerment zones, which the Vice President helped to launch in 1993, and which have proven that investment in inner cities and rural areas is a right and smart thing to do. The agreement will create a third round of zones, and bring the total number up to 40. It will make both wage credits and tax-exempt bonds available across all the empowerment zones, and extend the life of the zones to 2009.
As Speaker Hastert will explain in a moment, it will also create, in addition to 40 empowerment zones, 40 renewal communities. These communities were designed by Representatives J.C. Watts, James Talent, and Danny Davis, and they will operate much like the empowerment zones, although with different tax incentives, which the Speaker will explain.
When I first started this process, I said no one had all the answers; if we had all the answers, unemployment would be uniform across America. And that I thought we ought to try the best ideas from both parties. That is in the best American tradition, and that is exactly what this legislation will do.
Last year, the leaders you see here today could have said, we've got an idea; they've got an idea. Let's have a fight. (Laughter.) But instead, thank goodness, they took a different course, and it led us to common ground, and I would argue, higher ground. Once again, I want to thank the Speaker for being as good as his word on this. I want to thank the members of both parties for making a personal commitment to taking that, what we call Third Way.
Tomorrow the House will vote on the issue of opening new markets abroad, when it deals with the question of permanent normal trading status with China. I hope that we'll see the same bipartisan spirit tomorrow we see today; I believe it is very much in our interest. And again, as I said, I think it's very important to advance the rule of law in human rights in China, which is why we have seen support from the President -- the new President of Taiwan, the leader of the democracy movement in Hong Kong, and most recently, the Dalai Lama, for this approach.
I want to say one final thing. The consequences of this vote will be felt after I am no longer President. But our country fought three wars in Asia in the last half-century. We ought to give our children a chance to have a different 50 years ahead of us. No one knows what the future holds, but we do know which course is likely to give us a more peaceful future. It's the sort of thing I hope everyone will think about before they cast that vote tomorrow.
Again, let me say, this is a happy day. It would not have been possible if it hadn't been for the Speaker. I thank you, and I'd like to give you the podium now. Thank you, Mr. Speaker. (Applause.)
SPEAKER HASTERT: Thank you. Thank you very much. And you know, we can do a lot of good things together. I think over the last couple of weeks, we passed African trade and CBI. We're at the very brink of being able to do something so that we can help our markets overseas.
But over the last few years, I've had the chance to travel around this country and meet a lot of good people -- a lot of good people that want to make a stake in the communities that they've lived in for a long, long time. And I think we'd be remiss, now that we can accomplish a lot of things that help people abroad, that we can't do something extra to help our folks at home, especially folks that need it the most.
You know, as I traveled with Danny Davis in his district about a year ago, and gone through Newark, New Jersey, and down in Nashville, Tennessee, and some of those places and the communities that have the most need -- you see folks that have lived there, that haven't moved or flown away or gotten away because of the turmoil that was in their neighborhoods. They've stayed there. They've kept their stake. They've raised their families there.
And you know, what they would like to do is to be able to raise their grandchildren and their children there. They'd like to have good schools. They'd like to be able to walk down the streets and not have gangs terrorize them, and the drug addicts in the alleyways. They'd like to be able to have a job in that community, so they don't have to go someplace else to bring their livelihood back home. And you know, they'd also like to go down the street and do their grocery shopping, and buy a pair of shoes, or -- you know, buy the things that they need for the necessities of life.
And when you go to those communities, you see the absence of that. And what those folks also told me -- that they wanted to make their communities strong. But they needed some help. They didn't want more government handouts, and they didn't want more government welfare. They wanted good jobs. They want their families to have a chance. They wanted to send their kids to good schools. And they wanted a safe place to raise their families.
So I'm, Mr. President, very pleased that we could reach this agreement. And you know, many times there are good ideas out there, and it might be on one side of the aisle, it might be on the other side of the aisle. I know I've been working with Danny Davis and Jim Talent and J.C. Watts, and they've been working on this for five years. And we have a staffer here who's been working on that for a long time as well, on trying to put those pieces together.
And when the President started to talk to me about his New Markets, and I'm looking at our Community Renewals Act, you know, the spirit is the same thing. We're moving down that same track. So if we can put our ideas together, and the best ideas together, I think we can create a better America.
And I'm especially pleased that through our negotiation, we have agreed to zero capital gains in these communities, the 40 that we'll establish. And I think that's a good thing; it's working here in Washington, D.C. And why shouldn't we be able to expand that out and give those people the incentive to invest in those communities, and see real change happen and real dollars flow in?
And we also looked at a lot of areas, and your issue of drug abuse. I've been working on drug abuse longer than I want to admit. And those communities that have the best success, and those organizations that have had the best success -- and I talked to three former drug addicts yesterday, down in probably one of the areas of Peoria, Illinois -- it's not the best area -- but they talked about their success, in being able to kick the habit, and get a job, and create a life, and raise their children; and one was talking about seeing her son graduate this week from high school, and going on to college -- was that they had a faith-based component in that.
It's not the only part. But it's the ability for those organizations who care about people to be involved in helping solve those problems as well. And this bill does. And we've very, very carefully crafted that language so that we don't get into the constitutional programs and problems that we have. But I think it's a good thing.
And, it just goes to show, if we do those things, these proposals will have an immediate impact upon our ability to help people realize the American dream. So as we're talking about trade with China, and helping African nations, and bringing our folks in the Caribbean area together so they can have that same share of being able to market and do the things -- if we can do this for our people as well, that's probably the most noble thing that we can do as well. And when we can do it together, and when we have the Congress and the President accomplish good things for the American people, that has to be what the American people elected us to do in the first place. That can be probably the most and highest good that we can do.
Again, I want to thank J.C. Watts and Jim Talent, and Danny Davis, for helping us on our side get this agenda going. And Mr. President, thanks for having me here. (Applause.)
THE PRESIDENT: Thank you. Now, I'd like to ask Congressman Watts and Representative Nydia Velazquez, Congressman Talent and Congressman Rangel to say a few words.
THE PRESIDENT: Well, Mr. Talent, just on that point, I called Senator Lott this morning before we started this, and pointed out that Mississippi would do as well as any state in America under this legislation. (Laughter.) And I talked to Senator Daschle about it, who obviously has a lot of Native America's population that need the benefits of this bill. I think we've got a good chance to succeed if we can move this bill quickly.
In closing, I would -- there are so many of you here who have worked on this for so many years. And I don't want to get into -- I'll never finish calling you all. But I do want to thank, in his absence, Secretary Cuomo, and my longtime friend, Alvin Brown here, who have operated the empowerment zone program under the Vice President's leadership. They've done a great job. And I thank all of you.
I just want to make two points in closing. We actually believe -- we may be wrong, but we actually believe -- that we can bring the benefits of free enterprise to poor people. And I think there's a lot of evidence.
The other point I'd like to make is, I want to emphasize something the Speaker said, because I thought it was so important. We revel in our mobility, you know, and the average American probably moves five times in a lifetime. Nearly 20 percent of our people move every year. But the people that will really benefit from this are the people that cherish their roots -- people that don't want to leave the Delta, or Appalachia, or the city neighborhoods from Anacostia to Brooklyn to Englewood to wherever, where they grew up; the Native Americans who want to go to college and go back home, even if it's to Shiprock, New Mexico, a long way from any urban center.
And a lot of these people live in communities that still don't even have water or sewer or telephones. But if you believe intelligence and effort are equally distributed in this old world -- and I do -- we owe it to them.
And I agree with what Mr. Talent said. I think what we've done is a privilege for us. We're just doing what we ought to do. Now we've got to go out and finish the job.
Thank you very much. (Applause.)
END 12:28 P.M. EDT