Remarks of Senator Hillary Rodham Clinton at The Economic Club of Chicago's 78th Annual Dinner Meeting

Remarks of Senator Hillary Rodham Clinton at The Economic Club of Chicago's 78th Annual Dinner Meeting

Senator Hillary Rodham Clinton delivered a major speech at the Economic Club of Chicago's 78th Annual Dinner Meeting yesterday. The senator's remarks follow:

It is great to be back in Chicago and to be here at this distinguished gathering. I don't know that I've ever sat at a longer head table. And it is a great pleasure to be introduced by Miles White.

It is truly impressive that Chicago has such a tremendous working relationship between the public and the private sector. I know that recently Abbott labs announced a $1 million gift to teach science in Chicago schools.

Another example of the kind of commitment that Chicago's business community has to education and in so many other areas of common endeavor. It would be hard for me to not stand here before you and thank your mayor for being such a tremendous leader of this city and for demonstrating what a mayor can accomplish in a great city like Chicago.

He has been creative and imaginative and is largely responsible for bringing so many to the table to be part of the Renaissance that Chicago has experienced.

I know there have been a number of very favorable articles recently about what Chicago is doing and what the future holds. And it really illustrates one of the principal points that I want to make tonight.

The public and private partnership exemplified by the mayor, by the chairman this evening but by so many of the rest of you is sorely needed on the national level, as well.

It's imperative that we begin to look for strategies that will bring to the table our civic leaders, our CEOs, our elected leadership because America faces some daunting challenges that cannot be addressed by the political process alone.

You have demonstrated how it can be done here in Chicago. And I only hope that we can take some lessons from your experience.

I also want to acknowledge and thank my friend Bill Daley, who did a tremendous job in helping to lead the Commerce Department into the 21st century when he served in the Clinton Administration.

Now, some of you may have recognized the coincidence of my husband speaking today at the BIO conference and my speaking here tonight before all of you. It is just that, a coincidence.

Now, I am sure that there are people as we speak scratching their heads trying to figure out how that happened. But I am delighted that he could share his time earlier today with many of you and many who come from literally around the world, once again, showcasing the strength of Chicago.

You know, my father was a small businessman in Chicago. His first office, Chris, was in the Merchandise Mart. And one of my favorite experiences when I was a little girl was to go with him to his office or go with my mother to meet him at his office and the office had a window that looked over the river.

And he would be worried because the window would be open in the warm weather. And he used to tell me not to get close to the window because there was a giant wolf that lived in the river. Now, I don't know why that worked, but it kept me away from the window every time I visited him.

You know, like so many men of his generation, joined by my mother as well, he had great hopes for his children. But he also had great expectations for his country. He returned from service in the Navy, actually up at Great Lakes, and he immediately got to work trying to build a business and create opportunities for his family.

Now, I know that he imagined many things for me, but I doubt that he ever imagined I would be standing here before the Chicago -- the Economic Club of Chicago.

But he certainly would not be surprised to know that Chicago has done so well because he loved this city and believed that it was one of the greatest cities in the world.

He would also not be surprised to see the Economist magazine reasonably trumpet the head line that Chicago is back, although he wondered where it had been since he believed, I'm sure like so many of you, that despite the tough times that many American cities went through in the last decades, Chicago had the resilience and the determination to reinvent itself.

I really relate to that because certainly what New York has gone through after 9/11 tested that city. But the people of New York showed the same kind of extraordinary resilience that we expect from great American cities.

But what's exciting about Chicago and what the Economist really got right in that article is that it didn't happen by accident. Decisions were made; leaders and citizens recognizing that you needed each other to have a healthy city to live in and to do business in. And you came together. You overcame all of the divides, you know, political and racial and ethnic and every one of the others that sometimes keep us from working together and finding common ground. And you began to really attract new businesses, to diffuse some of the tensions in the city, to begin those daring reforms in the schools. Even to plant over 200,000 trees. Everyone brought something to the table, and, because of that, people now look to Chicago as a model.

Well, America needs that same commitment. We are not working together. We are not finding common ground. We are not making the investments in the future that our country desperately needs.

We have to ask ourselves how we deal with the great challenges that confront us. How do we keep our economy strong in a competitive world that we see? How do we keep our communities safe in a dangerous world that we cannot escape? How do we protect our values in a rapidly changing world?

Well, tonight I want to focus on the economy, but that's connected with the other two questions. The truth is, we can't be secure without a strong economy. And we cannot sustain our deepest values without an economy that rewards hard work.

Too much of what you hear coming out of Washington these days is either defeatist or denial or happy talk. I'm sure you've heard the same claims. There's no way we can compete with China and India. We've already lost the battle for manufacturing. We can't sustain a strong American middle class anymore. Growing income inequality is inevitable. Deficits don't matter.

Well, as my late father used to say with probably less appropriate language, that's a lot of nonsense. We do face a set of economic challenges because of technology and demography and globalization, but every generation of Americans has faced their own challenges.

How did Chicago develop from being a city of 20,000 people without a mile of railroad track to the center of a national railway network? Nowadays we might call it a public-private partnership, but it was just old fashioned decision making. Local leaders got together, put up the money and made the case. And by the way, when did our national government decide to expand to a national rail system: in the middle of the Civil War. Illinois' own Abraham Lincoln made that decision. He was still thinking about the future while he was struggling to keep the union together.

And we've seen so many examples over the years. We all know about how Franklin Roosevelt understood the need to modernize a market economy literally to save it. He was successful beyond even what could have been imagined because he put in Depression-era reforms and then used the build up from World War II to jump-start economic growth that lasted for more than 50 years.

Like many of you, I lived this experience growing up here. And I relish the memories of the investments that were made in everything from schools to highways. America was building for the future. What are we building for now?

Now, quite a bit has obviously changed since I was born in Chicago all those years ago, but I don't think that the American spirit has changed. I don't think that the need to respond to the circumstances confronting us has disappeared.

Instead, I would argue that it is now our turn. That it is up to this generation of leadership in both the public and the private sector to do what others have done before us.

America's economy after that Second World War ended dominated the world. Our country was investing. The baby boomers were coming at a rapid rate and we were getting prepared to educate them and to make sure that they would have a chance to join the great American middle class.

We knew we didn't really have a choice to make some of the decisions then to rebuild our enemies, a shocking decision in retrospect when President Truman and General Marshall, then Secretary of State, said we're going to continue to tax Americans to rebuild Germany and Japan because we know that will be in our best interests; that will create not only a better chance for peace, but new markets that we can sell into and grow our own economy because of.

We had to make investments in confronting the spread of communism. And we did so. Well, people would say we had no choice in retrospect but to do that. I think there were choices. There were other choices that could have been made, but thankfully we made the right choices because we had leadership that stepped up to the plate.

Well, today we have no choice about whether or not to embrace globalization. It is happening. We can't pretend it's going away. We can't wish it away. It is occurring. But as in earlier times, we do have a choice about how we deal with globalization and the competitive threat that it poses. We can choose to unleash the power of innovation and enterprise in ways that promote our economic growth and our values so that all Americans share in the prosperity. We can choose to think hard about the long-term implications of the physical path we're on as a nation. And we can choose to chart a wiser course.

To do that we start from the principles that have inspired Americans from the beginning: sticking with fiscal discipline, rewarding hard work, investing in our people, growing a strong middle class by giving everyone a chance to succeed. If we lead with those values, we can once again compete and win in the global economy. I know we can do this.

Now, a speech about the economy could literally last all night, and I am not the member of my household who's famous for long speeches. So let me just focus on two basic principles.

I suggest that we agree on the need for an economic strategy that keeps our economy growing and creating good jobs in the face of new competition. And that we strength then the middle class, which is, after all, the engine of our growth and the backbone of our democracy.

Now, if we can agree on those goals, then we begin to decide how both the public and the private sectors can achieve them.

We can return to fiscal discipline. We can invest in infrastructure, research and education, jump start a smarter energy future, promote manufacturing, rein in healthcare costs. And we can do it in ways that renew the basic bargain with America's middle class.

Now, the shape of the American economy depends a lot on where you're sitting and where you're looking. The stock market is at historic highs. But so are the budget deficits and the national debt.

Productivity is growing. But spending on research is decreasing and wages have fallen over the last four years on average.

Profits are up, but so are the costs of healthcare and energy, adding more than $1,000 to the cost of every car built by the Big Three and driving up family health insurance premiums five times faster than incomes.

The school system that served us well for the industrial age is inadequate for the information age. Bill Gates, whose foundation has started a path breaking project to turn around high schools right here in Chicago says that America's high schools are obsolete, and I agree.

Our higher education system is still the envy of the world. But costs have risen between 30 and 50 percent just since 2001, making college much harder for middle class families to afford.

And unemployment is down. But if we had the same share of people in the workforce or looking for work as we did in 2000, we'd have 2 million more employed Americans. And people who do find new jobs after losing the ones they had are taking on average a 17 percent cut.

Our manufacturing economy has ceased to be a job creating engine that propelled workers into the middle class. And we don't know what's going to replace it.

Illinois and New York are two of the 23 states that have lost more than 1 in 5 manufacturing jobs in the last decade.

Now, we are not doing Americans or American business, for that matter, any favors by pretending that we don't have this dilemma where some things look like they're going well, but indicators on the other hand are not. I believe in reality-based decision making. And I think we have to look hard at the reality confronting the majority of Americans and their futures.

We need, therefore, a real national discussion about how to do again in this new century what America has always done best: promote innovation, create the new jobs of the future -- including manufacturing jobs, get back to our "can do" spirit that really is the fuel for the free enterprise economy and make strategic investments in both the public and the private sector that will help us not only grow the economy but secure the values that define who we are as Americans.

Now, many American businesses already are and there are countless examples. I'm very proud of Corning in Upstate New York. I'm privileged to represent an old company which stood on the brink of insolvency five years ago. But Corning has a long history of building new technology and thinking over the horizon. And I worked with them to support their efforts to develop a thriving export business in state of the art ceramic filters for diesel exhaust. Cummins Engine has a plant in upstate New York where, based on new federal standards, they also decided to invest in clean diesel technology.

Now, these are win-win strategies. They're good for the companies. They're good for the kinds of jobs particularly in manufacturing that we need more of. And they're good for the environment.

Now, outside New York there is a great story about Texas Instruments in Texas. Working with the energy guru Avery Lovins, they discovered it was cheaper to build a super energy efficient facility right here in the United States instead of going overseas as they had originally planned. They're now on track to cut their capital costs by 30 percent.

The technology is out there. Unfortunately, we don't yet have a critical mass of engineers, architects, contractors, owners, builders who really understand how to use this technology for energy efficiency, lower costs and again a win-win for companies, the economy and the environment.

Now, we may all be global citizens and global competitors now. But the bottom line of our economic health still begins in the places where we live and work, right here in America. And it is here that our government is missing opportunities to help provide the best environment for businesses to start and grow. Our global competitors, on the other hand, are making strategic choices for their own futures. We need to do the same.

We can start by asking how we're going to meet the coming challenges when skyrocketing deficits are closing off options. Tax cuts alone can't secure the middle class. They are not the cure all for everything that ails the American economy. It takes the right tax system and the right investments, including infrastructure. And right now we don't have either. We need investments, decisions and policies that only all of us acting together through our government can make to set the stage for future prosperity.

Now I would start, for example, by updating both our virtual and our physical infrastructure. I think that it's imperative that we look at how we've been living off the investments of decades ago, people who build the interstate highway system, the bridges, the tunnels, the rail systems and so much else.

When I think about previous generational leadership, I think about President Eisenhower creating that interstate highway system. And then when Sputnik went up creating an agency in the Defense Department known as DARPA that began the research that led to the creation of the Internet.

I think of President Kennedy setting our sights for the moon and investment there which had just immeasurable spin-off into the private sector. Not just dual use, but unimaginable uses for the technology that came out of the space program.

I think of President Johnson expanding the social safety net, but also expanding investments in healthcare research and putting more investments into basic science research that fueled a growth in university research that led to so many new developments.

In the 1990s, my husband expanded the Internet to schools, colleges and libraries, setting the stage for a wired generation.

Now, all of these initiatives and so many more were too big for any one business or any one individual or institution to do on its own. But together we set the pattern for future job creation. And we've all been the beneficiaries of that.

Nowadays, though, our investment in both old economy and new economy infrastructure are falling further behind. In less than ten years, aviation delays, something you know about in Chicago, Mayor, will cost our economy $30 billion a year.

We need more airports. We need to modernize and expand the airports we have. Other nations are making much greater investments. Twenty-seven percent of our bridges are obsolete right now. We have never made the investments -- except in a couple of our large urban areas like Chicago, like New York -- in rail and transit that we desperately need.

In this case, we've also fallen from first in the world in information technology competitiveness to sixth, behind tiny economies like Iceland and Denmark.

In broadband coverage, we've fallen in just six years from first to 15th. Our rural areas are being left behind, being depopulated because they don't have the right kind of infrastructure.

So this is not just about our big cities; this is about how we need to knit together our entire country. If we had a rural redevelopment plan that focused on skilled partnerships and tax incentives and broadband, we could literally have the country as wired as we once had it electrified.

We saw after Hurricane Katrina how high the cost is for neglected infrastructure, whether it's old fashioned levees and roads or high tech communication systems for first responders. And we will be paying those economic and human costs for years to come.

Now, the answer is not to throw money at bridges to nowhere and bureaucracy that doesn't perform. But we cannot go on letting our basic infrastructure decay and failing to invest in new technologies if we expect America to maintain its economic leadership.

The American Society of Civil Engineers says we would need $1.6 trillion in the next five years just to keep our existing infrastructure up and running. I'd like to see us pick up the innovative recommendation of a recent bipartisan report by Felix Rohatyn and Senator Warren Rudman to create a national investment authority to help finance accelerated commitment to rebuilding our national infrastructure.

The Mayor and I were talking at dinner about how other countries are now incentivizing the private sector to build and modernize airports and toll roads and so much else. If we had this kind of national investment authority, it would give the private sector a competent strategic partner for infrastructure development. It would help us do a better job looking at our future competitive and homeland security needs.

We need a national energy strategy that is more than one line in the State of the Union. Energy costs hurt everyone's bottom line. And over the past 30 years, the ups and downs of the global oil market have cost the U.S. economy $7 trillion -- enough to pay off almost all of our national debt. The U.S. chemical industry says national gas price hikes over the last two years alone have cost it $10 billion and $50 billion in sales lost to cheaper foreign competition. Meanwhile, the average family is spending 75 percent more on transportation costs than it did five years ago.

We need a drive for smart energy that starts right now. The way to reduce our oil addiction is through technology, and we need a much more aggressive strategy. We have a National Institutes of Health. Why don't we have a National Institute of Energy? I think we need a major energy research program similar to what President Eisenhower did after Sputnik went up because we are suffering through what might be called -- and some have -- silent Sputnik. And the energy issue is one of those.

If we had a major energy research program, it would create a portfolio of cutting edge energy research technologies that would reduce our oil dependence, increase our efficiency and reduce green house gas emissions. Innovation through energy policy as both Corning and Cummins have proven is one of the best ways to create the next generation of good paying jobs.

The United Kingdom is creating new jobs by investing in alternative smart energy. They signed onto Kyoto, and it has served as a great organizing principle. And they now have not only reached their earliest Kyoto targets to reduce green house gas emissions and, therefore, help us in this very real problem of global warming, but they are creating jobs. And these are good jobs. They have the same low unemployment rate we do. But they actually have wages increasing, something we don't yet have. And when they beat their Kyoto targets by 50 percent, which is what is predicted, they will do it by helping to create new technologies, put people to work in not only making energy more efficient but cleaning up the environment.

Now, government can't do this alone. We need this public and private sector partnership. And businesses can do much more. I think our oil companies have to be part of the solution, not part of the problem. And I propose that we ask that they invest more in alternative energy or contribute a percentage of these extraordinary profits, which are due in part to the subsidies they still get when the price of oil keeps going up. And they help us by investing in ways that will frankly make them energy companies, not just oil companies. If we did that, we would have a private sector investment in a strategic energy fund. And we would probably be able to realize about $20 billion a year to jump start what needs to be done in energy.

We spend $20 billion a month just paying off the interest on our national debt. We certainly ought to be able to invest $20 billion a year in trying to get us independent from foreign oil.

We could also use that strategic energy fund to increase consumer tax breaks for purchasing fuel efficient vehicles to extend incentives to produce electricity from renewable sources to make bio fuels more widely available.

If there is a single area where we must innovate and where we need far more incentives from the federal government than we currently have, it is in creating and then marketing new forms of energy and energy conservation. In New York, for example, we set a bipartisan commitment to get 25 percent of our energy from alternative sources by 2013. We have wind farms sprouting up all over the state. They're powering homes and businesses. And they're also providing payments to rural farmers. We're trying to get an unused brewery converted to an integrated facility that will produce both ethanol and biodiesel.

And if we begin to take this seriously now, we can see results in the very near future, because so much of the technology is right on the brink of being commercially feasible.

In order to do that, though, we've got to give the private sector more support for research and development. In the last 35 years, research and development investment as a fraction of our national income has declined by half. Last year, six of the top 10 corporate recipients of U.S. patents were foreign companies. This year total federal research and development will fall in real terms for the first time in a decade, including cuts to key programs from aeronautics to biomedicine. That makes absolutely no sense, because about half of our growth economically after World War II was due to public and private sector investments in research and development. We ought to be making the research and development tax credits and a production tax credit for green energy a priority so businesses can plan ahead and have some certainty.

We know that right now the only program we have in the federal government to incentivize manufacturing is a small program, which was dramatically increased during the Clinton Administration. It's called the Manufacturing Extension Partnership, and for an investment of $100 million in 2004, yielded $910 million in new investments and 50,000 new or retrained workers. It's one of the many programs targeted for elimination because we are now, as you know, in this very difficult deficit situation. But to me, investing in manufacturing makes sense.

Now, I know there are many who disagree with me. It sounds very, you know, sort of politically incorrect in some circles. And there are those who say, you know, we don't need any manufacturing capability in America anymore. We're moving rapidly, inevitably, toward a service sector economy. But when you stop and think about that, that really doesn't make any sense.

Manufacturing provides an immediate laboratory for innovation; a challenging feedback loop for engineers, designers and dreamers; invaluable training for a new generation of entrepreneurs and leaders.

Is it really acceptable that the hybrid engines we're now all clamoring for to be in more fuel efficient cars are still dependent on technology licensed from Japan?

Manufacturing provides jobs that we are finding out just can't be replaced. It also provides us with strategic security.

Do we really want the production of high-tech components of our satellites, our missiles, our planes to be completely out of our hands?

To give just one example, the critical technology for night vision devices is now largely manufactured offshore. Clyde Prestowitz says the American military used to own the night; now we only rent it.

Now, I don't pretend that we can have a manufacturing sector that looked like it did ten years or even 50 years ago. We can't. But it makes no sense to say that it doesn't matter whether or not we continue to be a manufacturing country.

We've got to help companies retool plants. Right now states and localities seek out companies from other states and even other countries and give them all kinds of economic incentives to build new plants. We need comparable support to retool old plants and to give companies that are already here trying to be competitive a chance to do so.

As far as I can tell, our only manufacturing strategy in Washington is one person in the Commerce Department.

Now, the most basic aspect of infrastructure is getting our economic fundamentals right so that businesses can have a level playing field on which to compete. Instead, we're running the largest budget deficits in our nature's history. We have become by far the largest debtor nation.

Again, there are those that argue that doesn't matter. I see them on the talk shows all the time. They act as though not just the economy has changed because of globalization, but so has arithmetic. And it no longer matters that we owe so much money to so many, particularly those in foreign governments.

Now, I think a return to fiscal discipline, living within our means, is essential for our long-term health. It is also critical to whether or not we control our own destiny as a nation.

Over the long-term and maybe the median term, red ink fiscal policies will undermine America's competitiveness. We have to ask ourselves whether our taxing and spending policies are in line with our economic goals. Do we have the right priorities and values in the federal budget?

Nineteen years ago, a Republican gave a speech about deficits which I think rings true today. He said close the deficit and lock economic expansion in place for the years ahead or return to the days of inflation and stagnation.

We must answer the call to action now if we are to preserve and protect our economic expansion. The answer is clear; get on and stay on the road of declining deficits.

The speaker, President Ronald Reagan.

You know, we can do this. But we've got to forge a new bipartisan consensus. In the 1990s we did have tremendous economic growth underpinned by economic policies geared toward deficit reduction. That's why I support a return to pay-as-you-go budget rules in the Congress.

Every institution needs rules. And when the pay-as-you-go rules expired, all bets were off in the Congress. One of the ways we were able to obtain a balanced budget and a surplus in the Congress in the 1990s was you could not cut taxes or raise spending unless you could pay for it. A very old fashioned idea, but one which I hope we can begin to return to.

You know, with growing deficits as far as the eye can see, I'm concerned that countries like China have so much control over our financial future.

Now, I never thought I'd be walking around and standing before you quoting one of President Bush's economic advisors, but Larry Lindsey puts this very well. China is not a free market economy. It is a managed economy. They manage their markets. And they manage their currency. So when we hand them our enormous budget deficits to finance by buying our debt like treasury bonds, we give them the opportunity to manage our economy, too, to favor the consumption of inexpensive products over the production of American products by American workers.

Now, that is an economic policy that we shouldn't be outsourcing, but we are. And the way to get our economic national power back is to, first of all, cut the deficit. And secondly, as Larry Lindsey also recommends, get serious about negotiating with China to bring up its exchange rate.

Then there's the question of trade. Now, this is one place where we face stagnant thinking across the political spectrum. You're either a die-hard free trader or an unreconstructed protectionist with very little regard, frankly, for how trade agreements are actually working.

I'm in favor of introducing some evidence into this evidence free zone. And so I will be introducing legislation that will require the International Trade Commission to report to Congress on the actual effects of every trade agreement we sign; the good, the bad and the ugly. And they should do it after two years, after five years and then every five years after it goes into effect. Then we can make hard choices based on facts, not on ideology or theory because there are many economists who are beginning to say we've got to think hard about what it means when you trade with a country that doesn't enforce intellectual property rules in a global economy where our point of the realm as Americans is intellectual property. Where you do have currency that is not being allowed to float and reflect true value? And where trade agreements, which I am a very staunch supporter of, trade has been very good for America have to be viewed in a broader context, along with all of our other economic policies.

Now, this is not an impossible task that I'm laying out here. It's not so long ago that we began the 1990s with what was then historic deficits. We ended with a balanced budget, with a surplus, with more than 20 million new jobs, higher wages for the middle class, lifting more people out of poverty than at any time before. And I believe we can do it again. Because it's not only important for our overall economic prosperity, it is critical to whether or not we sustain and strengthen the American middle class.

With all due respect to many of us in this room tonight, America did not build the greatest economy in the world because we had rich people. Nearly any society has some of those. We built the greatest economy in the world and most of us are beneficiaries of it because we built the American middle class. And when we did that, we offered tens of millions of people, people who had been here for generations and people who had just gotten off the boat and first seeing the Statue of Liberty in New York Harbor and people responded with an amazing work ethic that lifted a generation of American businesses and individuals into the most extraordinary economic expansion that the world has ever seen.

Our middle class is also an important part of our democracy. People say all the time, well, how can this pluralistic diverse country like America survive elections and not only some of the challenges that we have faced historically, some of the hard times, but the fact that people have really strong opinions in America and are not afraid of expressing them as I am often the recipient of them and know that very well. Well, in part because the economy grew so well, people felt that if they worked hard, they had a chance. The deck was not against them. There was no class of inherited wealth in America that basically hung onto it without having to work hard. Everybody had to work hard.

It was the closest to meritocracy we have ever seen in the history of the world. But what is happening now? Well, profits have increased, but wages have declined.

The costs of a middle class life, education, healthcare, transportation, retirement are all increasing. It's the first time since we've been keeping records that we've had four years of rising productivity and falling wages.

Our essential bargain with the middle class is breaking down. People who work hard and contribute should feel that they're not just running in place; that they and their children can get ahead.

We should not in a globalized world face a choice between profits and pensions.

Now, I understand that the world has changed and what used to work 50 years ago doesn't work today. But that's why we need to rethink our industrial age bargain and come up with a new one that really keeps faith with the American middle class. We have to look for solutions that as President Kennedy famously said did lift all boats, not just lift the big ones and ground the others.

Economic security for the middle class goes hand in hand with economic growth for the rest of us because the strains on the American middle class are also the strains on American business. Business is drowning in legacy costs in a lot of our older manufacturing companies. American families, as well as the rest of the US, need a vibrant growing business community. And we need to figure out how to deal with those costs that were assumed in an earlier time.

Individual Americans have to continue their commitment to education. But we have to make sure that the doors of college remain open; that we can give people a better head start so that they can go to school and make something of themselves. We can't accept any less.

You know, the challenge we're facing in education is particularly grim because we're not coming up with the engineers and the scientists that we need in order to keep the American economy growing. At the urging of the National Academy of Sciences, I've joined a bipartisan group of senators to sponsor legislation to improve math and science education from kindergarten to graduate schools.

We need to encourage higher standards, the kind of partnerships that Abbott is doing. We need to support teacher training to meet higher standards. And we need to offer more scholarships and additional pay to those who teach and those who study math and science.

Now, unfortunately we are fighting a rear guard action because we're cutting education in Washington. And that will trickle down, unfortunately, to local communities. But in Chicago when you have an announcement like was made recently about Abbott Labs, that shows what can happen when the private sector steps up. And I particularly want to commend Maggie Daley because I know that this was a real labor of love for her, Mayor.

It was an act of exemplary leadership. And I appreciate that. But we can't be smart about economic growth if we don't tackle education and healthcare. Along with energy, those are the three big challenges we have to get right.

Now, I still have the scars from having dealt with healthcare some years ago. But it's worth wading in again -- and we're going to have to -- but this time we need a public-private sector consensus about what we're going to do.

You know, many of you representing the business community here in Chicago pay the bills. You're the ones who are paying for the healthcare system. And I don't think you're getting enough value for your dollar.

You're not demanding enough. You're not working together to try to figure out how to make sure that when you put up your dollars and you ask your employees to do their part, we get the best healthcare that we possibly can get. We know we're not.

In study after study, not only do we have such a high number of uninsured people, we have a larger number of people who are basically underinsured. When they really need healthcare, there's reasons, excuses, obstacles to them getting the healthcare they need.

Here in the business community I think it's absolutely imperative that you assert your market control.

Now, I've worked on this as Miles said with Senator Bill Frist to help create a health information technology framework which will begin to give us the information we need to make smart decisions about better healthcare, to control the cost, to reduce the error rate.

But it's also true that I worked with Newt Gingrich. And it makes strange bedfellows, but we actually agree that the private sector could demand much more accountability from the insurance industry and get it by demanding a single form that everyone would use with a single vocabulary so you can actually compare costs across a number of companies, a number of providers. We need better information.

The health information technology fix that Senator Frist and I have proposed is long overdue. The healthcare industry is probably the least automated of any of our major sectors. And until we have an interoperable system so that if you are in Chicago but you're traveling in New York, your records can be electronically mailed, your doctor and prescription record can be readily at handled, and we can take that information properly kept confidential and secure and sort it to understand better what are the treatments that we should actually be demanding for the payment that we provide to increase the quality, to have a pay for performance system, which is absolutely in my view a first step to having the kind of healthcare system that we're going to need.

The bipartisan bill that Senator Frist and I have introduced we believe can save up to $100 billion. We also need to allow people between 50 and 65 to buy into Medicare. Many of them retire early or many of them lose their health insurance and they're left waiting until they can be eligible for Medicare.

We also need to do more on small business. And I'm working with Senator Durbin, who may be here this evening, on his bill to expand small business access to affordable health insurance.

And I'm working with Senator Obama on his "Grand Bargain" bill offering American auto companies voluntary support for retiree healthcare costs in exchange for their commitment to use the savings to build more fuel efficient cars.

Now, we have to do more to make our pension system secure in all of the issues you read about in the paper but never seem to get resolved because of the partisan differences, unfortunately, in Washington today. But the business community can do so much more.

Business leadership is essential in our system. And I would ask and even challenge you to not only come to see your elected representatives when it's a specific issue that affects your company or affects your industry, but take a step back working through organizations like this and others what can you help us do with a consensus to deal with some of these longer term problems.

There's much that I believe we can get done if we're willing to take on the challenge. And I hope that we will recognize the importance of making clear to the vast majority of people in this country that they are still essential not only for their own futures but for our nations.

People lose jobs because of trade. We need to do more to help them, not just walk away from them. Yes, trade has winners and losers. But we need to make sure we lower the number of losers. And it's not only because it's the right thing to do, but because we want a political climate that keeps America open to the world.

It's also important that while we're creating these new jobs we recognize that at the lowest rung of the income scale are people making the minimum wage. They have not had a raise in eleven years.

Do the math sometime about what you would be living on if you had not had a raise in eleven years. And then do the math about what a minimum wage brings in in income.

If we don't send a very clear signal that we're all in this together, the character of America will change. In the '90s we raised the Earned Income Tax Credit and the minimum wage so that a working parent of two could live above the poverty line. We have fallen behind again. I want to send the signal to every one of the people who served us tonight in this hotel, everybody that does the hard work that is so essential to keeping our economy going, that we want them to be successful, as well. And that anyone who works full time should not live in poverty.

This is not a simple agenda. It has a lot of political pitfalls which I'm well aware of. Some may disagree with it. Some may have other and certainly better ideas.

But let us never believe or even imagine that the American system is not up to the challenge. It's in our DNA. We just have not marshaled our resources and our leadership to address these new challenges.

Think about what happened in this city after the fire in 1871. A city that was built not just in a quick and, you know, get the job done way, but a city that was built with some of the greater architectures in the world.

The leaders and, again, the public and the private sector, dreamed big. They made a great city even greater out of the ashes.

Think about all of our previous leaders who we really looked to with admiration because they made tough decisions and we benefited from them.

What every one of us has in common is that in America we can reinvent ourselves. We can move from one dream to the next. But we can't do it on our own.

Some believe that, you know, talking about this is old fashioned. I believe it is just as important today as it ever was. We can't wall ourselves off from the wider world, but we can still choose how we respond to it.

That's what America is about. And that is certainly what this city has been for generations who have come here and realized the American dream.

You know in 1927, the president of the First National Bank of Chicago, Melvin Traylor addressed the very first meeting of the Economic Club of Chicago. No one then had any ideas of the challenges that lay ahead. It was before the great crash. It was before the Depression. It was before World War II and all that followed. But in his remarks, Mr. Traylor set out the utterly American idea that even when things look good for us, we need to look ahead. We need to think wisely about the common good. And here's what he said all those years ago because it's important to put into context that we are not the first to be troubled by the challenges we confront.

About the Club and the booming city it served, he said with its importance comes the corresponding responsibility for the further promotion of the welfare of this community and of the nation. Our importance will be a blessing or a curse. Our wealth and our power will work for evil or for good, just to the extent that the intelligent citizenship of the cities apply themselves to the proper and useful direction of that power.

Now, we may disagree about specific policies. But I hope we all agree that Mr. Traylor got it right. He not only got it right for Chicago, but he got it right for America, not just in the 1920s, but in the 21st century.

I hope we can agree that we must rise to the same challenge. And I'm sure if we do, there is nothing we can't resolve together in order to put our country on the track it deserves to be on going into a better and brighter future.

Thank you all very much.

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