Bush Speaks on Labor Dept. Report
BETTY NGUYEN, CNN ANCHOR: It is 11:00 a.m. on the east coast, 8:00 a.m. in the West. From the CNN Center in Atlanta, I'm Betty Nguyen in for Daryn Kagan today. And we're waiting for President Bush to speak in the East Room of the White House. He will be discussing the economy today on the heels of that new Labor Department report where some 112,000 jobs were created last month. And of course when that happens, we will bring it to you live right here on CNN. Up first on CNN, a rocket attack in Iraq. Insurgents used a rigged vehicle as a lunching pad in the attacks that targeted two Baghdad hotels. Both the Sheraton Hotel and the Baghdad Hotel are used by Westerners. Two people were wounded in those attacks. Also in Iraq today, militants freed two Turkish citizens who had been held hostage. They were released after their employer agreed to stop doing business with the U.S. military in Iraq. We've also just learned another Pakistani hostage has also been released today. Jordan's King Abdullah says he would be willing to send troops to Iraq. The king told the BBC that if the Iraqis asked for help it would be very difficult to say no. Yemen says it would also send troops under a U.N. mandate. More details on the latest developments in Iraq, in this report from CNN senior international correspondent Brent Sadler in Baghdad.</s>BRENT SADLER, CNN SENIOR INTERNATIONAL CORRESPONDENT: An attempt to launch a salvo of rockets at targets in central Baghdad partly succeeded, after the firing mechanism apparently failed. Insurgents rigged a minibus with nine launch tubes and drove it to Firdos Square, a famous landmark where a statue of Saddam Hussein was symbolically pulled down when Baghdad fell to the U.S.-led invasion last April. The firing platform burst into flames after two rockets discharged. The other seven missiles slammed harmlessly into concrete. But one projectile hit the 10th floor of the Sheraton Hotel causing damage, but no injuries. The Sheraton is home to many international news organizations and Western businesses. A second rocket veered off course and slammed into the parking lot of the Baghdad Hotel injuring two Iraqis and setting a vehicle on fire. The attacks came the day after deposed dictator Saddam Hussein was arraigned by an Iraqi judge. Iraqis are still getting to grips with the images they saw on television, images that were in sharp contrast to way the ex-ruler appeared after his capture last December, broken and bewildered. Instead of giving the appearance of defeat, they saw Saddam challenge the jurisdiction of the judge, refuse to sign court documents and hurl insults at the Kuwaitis. The spectacle triggered widespread debate here on the wisdom of a judicial process that allowed the deposed president so much freedom to speak his mind. Brent Sadler, CNN, Baghdad.</s>NGUYEN: A select group of reporters were allowed in the courtroom for the arraignment of Saddam Hussein and 11 others. "New York Times" reporter John Burns says Saddam was among the most defiant.</s>JOHN BURN, "NEW YORK TIMES": That of the 12 defendants who appeared yesterday, there is only one who hasn't understood that the game is up, and that's Saddam Hussein. Saddam Hussein feels that presenting himself as he did as the president of Iraq, that he can attack the coalition and its position here at its weakest the point. And there's no doubt that's quite effective. There were many Iraqis who liked that, including Iraqis who, by the way, I talked to yesterday, whose families, in some cases themselves, had been injured by Saddam. Difficult psychology to understand. But he knows he's got an audience to play to out there and he'll -- he'll make the most of it, you can be sure.</s>NGUYEN: Saddam Hussein's televised court appearance was a long awaited moment for those who survived his brutal regime. ITV correspondent Harry Smith reports now from London.</s>UNIDENTIFIED FEMALE: Look! Oh, Saddam, oh!</s>HARRY SMITH, ITV NEWS CORRESPONDENT (voice-over): He was tortured by Saddam Hussein's secret police. More than 70 members of his family were slaughtered. As he watched his tormentor face justice, Sahib alHakim couldn't hide the hatred.</s>SAHIB ALHAKIM, FRM. IRAQI PRISONER: Oh! Saddam, criminal. You should die. You should die. You don't deserve life.</s>SMITH: After the anger, the years of pain came flooding back.</s>ALHAKIM: I remember the people who have been buried in mass graves. I attend the excavation of mass graves. I've seen the bodies without heads. And I know that Uday, son of this dictator, have beheaded a lot of women, because they are not loyal to the regime. So it came to my mind, when I saw this, these bodies buried, were innocent, because they opened their mouth against the regime.</s>SMITH: Dr. alHakim fled Iraq 22 years ago. And as long as Saddam was in power, he lived constantly under the threat of his assassins. His family have paid a terrible price for opposing the dictator.</s>ALHAKIM: All these are members of my family, alHakim, have been arrested and killed by Saddam regime. This is my brother, Mr. Jabir Hakim, who has been killed by Saddam. They used thalium poisoning. This is my cousin,</s>SMITH: For Sahib alHakim, this has been a day of extraordinary mixed emotions. From the pain of the past, to the hope of seeing justice in the future. Harry Smith, ITV news.</s>NGUYEN: And you can log on to cnn.com anytime you want for an update on Iraq. You can also view a photo gallery of Saddam in court. We do have some new pictures of him in handcuffs that I imagine will be on there shortly. You can read a transcript of the proceeding and view profiles of key prisoners in Iraq as well on that Web site. President Bush is touting payroll gains for June while job growth is at its slowest pace since February and unemployment stays the same. We are of course waiting on the president to speak. He will be speaking from the East Room of the White House this morning. Discussing the economy and these latest job report numbers. The Labor Department today says that 112,000 jobs were created last month, which is far fewer than the 250,000 that Wall Street had anticipated. In fact, it's less than half of that 250,000 that were expected. But as mentioned, the unemployment rate was unchanged, at 5.6 percent. However, June still represented a 10th straight month of job growth and has added about 1.5 million workers to the payrolls. Will this bit of a slowdown be a tough row for the president as he heads into the election? We'll see what he has to say about that. Right now, he is meeting with small business leaders. And once that meeting concludes, he will be speaking here at this podium about the economy. And we understand that should be happening just over a minute from now, coming up very shortly. Just to give you some facts on the economy, the economy is at $11 trillion. We have a $521 billion deficit. As mentioned, the unemployment was 5.6 percent. And 1.5 million new jobs over the last 10 months. But we also understand, with all of these new numbers that are coming out that 8.2 million Americans are still unable to find work, at least they were last month. Here, as you see, the president stepping up to the podium. Let's listen.</s>GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Wellcome. Thanks for coming.</s>BUSH: We've got an economy which is changing. It's -- the nature of the job base is changing. And all of that means it's been a difficult period of time. Yet we're strong. We're getting stronger. We're witnessing steady growth -- steady growth, and that's important. We don't need a boom-or-bust-type growth. We want just steady, consistent growth so that our fellow citizens will be able to find a job and so that the small-business sector will feel confident about expanding. I was pleased to see that consumer confidence is at a two-year high. That's an indication that the economy is strong and getting better. When people are confident they tend to be a part of the decision-making process amongst millions of deciders that say the future's going to be better. I just met with small-business owners. I'm going to introduce them here in a second. They're confident. The first thing I listen for was did they have confidence in their voices? Were they saying to me, "Gosh, I'm confident enough to make investment"? That's what you listen for if you're somebody trying to be able to report to the country about the nature of our economy. To a person, to a business they were saying, "You bet. I'm confident about the future of the country. Therefore, I'm going to invest more," which I'm going to talk a little bit about here in a second. Real after-tax incomes are up 11 percent since December of 2000. To me that's a vital statistic. Real after-tax incomes. That means it's the amount of money in somebody's wallet is increasing. That's what we want to hear, isn't it, particularly if you're somebody who's got a wallet?</s>BUSH: That's what we want.</s>BUSH: That doesn't mean anything unless you're somebody who follows all the numbers that comes out of Washington. But what it does mean is it confirms the notion that manufacturing activity is as good as it's been in 20 years. And that's very positive. Today, we've got a new jobs report out. Jobs increased by 112,000 in June, which means we've had a total of 1.5 million new jobs since last August.</s>BUSH: And that's why the tax relief package we passed was so important, particularly in the face of a recession and in the face of an emergency. It came at the right time. And I want to thank the people here who worked with us to convince Congress to trust the people with their own money. That's really what the debate was about, wasn't it? Who do you want to spend your money? Obviously, the government needs to spend some of it to make sure we've got a military and make sure we fulfill certain functions. But at this point in our economic history it made sense to let you have your own money to spend so that the economy would grow. We based a lot of our decision-making on the knowledge that if you have more money in your pocket, if there's more after-tax pay in your pocket, you'll demand additional goods and services. And when you do so in a market economy, if it's functioning properly, somebody will produce the goods or services. And when that happen, it's going to stabilize the job base and then eventually allows for more people to go back to work. And that's what we're seeing. And that's what we're seeing. Much of the job growth, the stimulus package, was aimed at small businesses, because we knew that 70 percent of new jobs are created by small businesses. We were aware of that. And so therefore, when we went to Congress, we said, "As you reduce the tax burden on the American people, make sure you understand the effect that tax reductions can have on the decision-makers who hire most of the new people. That would be your small-business owner."</s>BUSH: A vital part of our package was to encourage investment in the small-business sector of our country. And it's paying off. See, when the small-business owners of America feel confident and feel comfortable in investing in plant and equipment or in new services, it stimulates a vibrant part of our economy. That's what happens. The cornerstone of our policy, if the truth be known, was to trust individuals with their own money and to encourage the small- business sector to grow so people could find work.</s>BUSH: We can't say to you, "Gosh, we'll help you align what you supply with demand." You've got to figure that out yourself.</s>BUSH: It says, "Ed, invest $300,000 and you'll save $50,000 from what you normally would have." It's called an incentive. And our American citizens have got to understand the connection between investment and jobs. When Ed invests $300,000 to build a warehouse and a painting facility, somebody's got to come and build the warehouse. Somebody's got to manufacture the material for the warehouse. Somebody's going to provide the new painting equipment for the painting facility. Investment equals jobs. When somebody invests like Ed, somebody has to provide the goods that he needs. And when somebody provides the goods he needs, somebody's working to provide the good he needs. That's how this economy works. He says, "With that money I don't send back to the IRS, I can expand right here." Those are his words.</s>BUSH: So they're good business people. They've added 20 workers in the last six months. They're expanding their business.</s>BUSH: And one way to make it function well is for the federal government to work with community colleges and local businesses to devise curriculum to train people for the jobs which actually exist. And I want to thank the Maxwells for being a part of this kind of practical move in education all across the country. Joan says, "There are a lot of opportunities where people can use these skills. We're literally building our workforce for the future here." That's the way we think in the administration. We're thinking about the future. We're thinking about how to make sure that the momentum that we have developed in the economy not only stays strong in the immediate years, but how is it going to look 10 years from now? So we got to start planning for the future. We got to understand the decisions we're making today are going to make it more likely that the small-business sector, the entrepreneurial spirit of America, will remain very strong tomorrow. And part of that is to make sure the education system not only teaches our youngsters how to read, write and add and subtract now, before it is too late, but it's also to make sure that our community colleges are able to put curriculum in place to train people for jobs which will exist. So I want to thank the Maxwells for being here. I appreciate your spirit, and thank you for hiring people. We've got...</s>BUSH: I can predict to him if we run up the taxes on subchapter S corporations by raising, for example, the top rate, his business isn't going to look quite as good as it would have when we keep taxes low. John is an S corp. In other words, you know, all the talk about running up the top rate affects his business. When you hear them in Washington saying, "We're going to run up the top rate," just remember this is a tax on small businesses. And you don't want to tax small businesses because small businesses are providing the economic momentum necessary for us to have created 1.5 million jobs since August. We want that job creation to continue to go on. Raising taxes will make it more likely somebody won't be able to find a job. You know why? Because it affects businesses like John's. That's why. When you start taking money out of John's coffers, it means he's less likely to expand. He is a full-service electrical and general contractor. That's his job. He hired eight people in the last two months. He wants to hire eight to 10 more this year. That's positive.</s>BUSH: He'll save $60,000 in taxes this year on $350,000 of investment in new trucks. When you hear the investment numbers in small businesses, it is heartening because I repeat, when people invest, they create jobs. That's how jobs are created. John says, "The cash we're able to keep in the business helps a lot. It helps us look forward to the future." That's what he said. That's what you want to hear. You want to hear your CEO of a small business saying, "It helps me look forward to the future." You don't want people saying, "Oh, gosh, life is going to be miserable because we've been able to come through tough times." You want them to say, "I'm looking forward." Good policy in Washington always looks forward, not backwards. I want to talk about some things we can do to make sure, as John and others look forward, the environment is encouraging and conducive to economic investment. I just told you one, and that is to make sure the education system functions well. If you're somebody trying to hire people and you see that the education system is working well, you'll be able to look forward with confidence because you know you'll be able to fulfill your workers' needs. You can't look forward if you are worried about finding somebody to meet a skill that you need. Joan Thompson is with us. She was talking about that level of worker -- the skill level of the worker she needs. She's an owner and -- thank you, Joan -- she's an owner and a...</s>THOMPSON: Nine children and (</s>OFF-MIKE) BUSH: Yes, 11 people.</s>BUSH: It's important that Congress understand what the death tax does to capital formation and the ability for the small-business sector to invest. And I say you tax it twice. When the Minnesota Wire and Cable Company makes a profit, it gets taxed. And I suspect you pay property taxes at the local level as well, and state taxes. And then when the, you know, mom and dad move on, in many cases that asset will be taxed again. And therefore, if the asset is illiquid, some people have to sell their business; you can't pass it on. I believe you ought to be able to pass your business on to whomever you choose without the federal government being in between you and those who you designate to own the company.</s>BUSH: They've added 14 workers this year; tax savings of $80,000 on $600,000 worth of investment. I said, "What are you going to invest in?" She said, "Robotics." It is pretty interesting to hear a small business say robotics. I don't know whether small businesses were saying they were investing in robotics 20 years ago or not, but I bet they are over the next 20 years, if the incentives are properly structured, if small businesses are encouraged to invest, if the tax structure is such that it'll make it easier for them to survive, by making sure government doesn't take too much of their money. She also invests in CNC machines. Everybody knows what they are.</s>BUSH: And if Congress doesn't make it permanent, that's called a tax increase. And they will be tagged with raising taxes on the American people. They should not raise taxes. We need good, consistent tax policy. If you are a small-business owner, you want there to be a constant in your life when it comes to planning. You've got too much to worry about: markets, your customer base. And you need to have certainty in the tax code. And the Congress needs to know that. And raising taxes creates uncertainty and will make it difficult for small-business owners to plan and invest. Secondly, health care costs are on the rise. That makes it difficult for employer and employee. We must not allow the federal government to run our health care system in America. What we must do is to put good policy and plan in place which will connect the patient-doctor relationship and give people choices and decision- making powers in the marketplace. That's why I'm such a strong backer of health savings accounts. These can be tailored for small businesses. I would urge every small business in America to look at a health savings account. It's a good way to help control costs, and it's a good way to provide benefits for your workers. We need association health plans which allow...</s>BUSH: It makes it very difficult for people to plan with confidence. And let us face it, our society is too litigious. There's too many lawsuits, a lot of them frivolous and junk lawsuits. And there's a role for the federal government in this. We need to have class action reform. We need to have asbestos reform. Congress needs to get these bills passed and to my desk. We need medical liability reform, as well, at the federal level. You see, junk and frivolous lawsuits cause docs to practice defensive medicine. And defensive medicine basically means I'm going to prescribe more procedure than needed so that when I get in a court of law, I'll be able to defend myself. And that runs up the cost of medicine, which hurts the patients and it hurts the federal government because the federal government pays a lot of money for health care in Medicare and Medicaid and our veterans' benefits. And our budgets are affected by frivolous and junk lawsuits here at the federal level. Therefore, I think it is a federal problem that does require a federal solution. And we've proposed such a solution. The House of Representatives passed it. It's got stuck in the Senate because the trial lawyers are powerful in the Senate. That's why. And for the sake of small-business growth and for the sake of having a good economy in the future, we need to convince the United States Senate to pass meaningful and real tort reform. It's an important part.</s>BUSH: We've done a lot of things. And we've proposed it to the United States Congress and, of course, it's stick. They're playing politics with the national energy policy. But if we're interested in making sure people can find work in America, if we want to be the best place to do business, if we want the entrepreneurial spirit to remain strong, we've got to develop an energy policy that makes us less dependent on foreign sources of energy.</s>BUSH: And now you've got an administration who is saying, "Since we did that for you, you open up your markets." I told Evans and Zoellick, "When we need to get tough with foreign nations that shut us out, get tough." Because all we're interested in is a level playing field; that's what we want. We want our people treated fairly.</s>NGUYEN: OK. We are having some more technical difficulties in getting the president's speech to you from the East Room of the White House. Today, he is speaking about the economy, in light of the Labor Department releasing its jobs report today; 112,000 jobs were created last month. But on top of that, it's still far fewer than what analysts had hoped. They had been hoping for about 250,000 jobs. The president was talking about a number of issues. He said that the economy is steady, and it is growing, consistent growth, in his words. He also called the economy strong and that it is getting stronger. He cited a number of statistics, as well, saying that the consumer confidence is at a two-year high. And he also said that home ownership rates are at an all-time high. So a lot of talk about the economy today from the president. And of course, we'll continue to follow that.