Remarks by the President in Roundtable Interview with Business Reporters

THE WHITE HOUSE

Office of the Press Secretary

August 8, 2007

Department of Treasury

Washington, D.C.

1:31 P.M. EDT

THE PRESIDENT: Thank you for your time. The fundamental question for a President and his administration is to understand the proper role of government and enterprise. And I campaigned on the notion that government is to create an environment that enhances entrepreneurship. One of the key signs -- for me, probably the most important sign of whether or not our economy is flourishing is whether or not the small business sector is doing well.

The reason I say that is that obviously most new jobs are created by small businesses, but there's a spirit, there's a -- when you say entrepreneurial spirit, there actually is a feeling and it really means, have we created an environment in which people are willing to take risk? And so that's what I look at. When I talk to Hank or Eddie, my basic question is, are we making the right decisions that encourage investment and growth?

The fundamental question facing Washington is taxes. It's the core of all fiscal debate. It's going to be the core of the political debate. And as I told some guy just a second ago, we've got a record that proves taxes can be cut, economies grow, deficits reduced, and wars fought.

There is a significant appetite for federal spending here in Washington. Appropriators are appropriators, they will -- they take their titles very seriously. And the only way that one could pay for their additional appropriations if you're willing to -- unless you're willing to run up significant deficit, is to raise taxes. So when I say in that -- opening remarks there, which I understand you all had to suffer through, that I'll veto bills that would cause taxes to go up, I mean it. And the reason I do is because it -- nothing more discouraging from the small business owner's perspective than to have the government get inside their treasurer.

Most people don't understand that small businesses are sole proprietorships or limited partnerships or sub-chapter S corporations, and therefore, when you cut the individual tax rate, you're cutting taxes on small business owners. And yet, when Congress looks at raising revenues, they're not going to say, okay, let's exclude small businesses and focus on only individuals. It just doesn't work that way. A tax increase to pay for additional spending will slow down this economy. And to me, that's a big issue.

Another issue, an interesting issue, is trade. I don't know if you remember my State of the Union a couple years ago I argued very strongly against the policies that would cause us to be isolationist or protectionist. Those who follow the White House know full well that I am concerned about isolationism and protectionism. I sense that there's protectionist moods across the country. I know there was in '04 when I campaigned hard and vigorously defended our policies of opening markets for the good of workers and for the good of the entrepreneurial spirit.