 and the Vice President of the United States. Thank you very much. Thank you. Thank you all very much. The Vice President and I have been in a meeting and we raced over here, but I think that based on my previous experience, situations like this, I'm going to have to give lessons in padding your part. But I'm sending the Congress today our second annual report on the state of small business. The report was prepared by the U.S. Small Business Administration, which under the leadership of Jim Sanders and Frank Swain is doing more than ever to assist and counsel America's small businessmen and women. I really think that that line should be the men and women of America's small business. But I'd also like to introduce Faith Whittlesey, my new assistant for public liaison. You stand up and say, Faith will be the small business contact here at the White House. She's replacing Elizabeth Dole, and I know she'll continue the good work that was done by Elizabeth and Wayne Valles. Before I describe the report and our administration's efforts on behalf of small business, I'd like to thank SCORE, the Service Corps of Retired Executives for their fine example of volunteer spirit. And I'm glad that the SCORE Association Board of Directors could be with us here today. The 12,000 retired executives, they represent volunteer hundreds of thousands of hours each year to help small business people. Last year alone, they assisted nearly 130,000 businesses nationwide and in Guam and Puerto Rico and the Virgin Islands. And they deserve our thanks, all of them. The report that I signed today proves once again that the millions of small businesses and the people who run them are vital to our economy and economic growth. They carry on a tradition dating to the foundation of our country, a tradition of national strength, deriving from the ingenuity, the independence and individual liberty of our people. Our small business owners demonstrate through free enterprise that our national well-being is dependent on individual freedom to pursue our hopes, our dreams and our creative ambitions. As the report shows, small businesses contribute significantly to our daily lives. Almost half of all private employment is in small firms and small businesses create more than half of all the new jobs and are an important source of new products and technologies. As business and civic leaders in their home states and towns, small business men and women improve the quality of life for all Americans. Our economic recovery program was designed to strengthen the contributions of small business by reducing the heavy economic burdens, weighing it down. Runaway inflation, high interest rates, high taxation and excessive regulation. We already have accomplished much and I'm confident we'll see more progress in the months and years ahead. But if our economy and our people are to continue to climb out of recession, we must not tolerate any backsliding in the Congress. We must assure an economic climate in which America's small businesses can grow and prosper. If the Congress will work with us to do what is right and necessary, we can keep America on the upswing, ushering in a bright new age of lasting prosperity to outshine any other in our history and that is the goal. Already the inflation, which had driven up small business costs and eroded profits has dropped to a third of its former rate. For the last six months, inflation has risen at an annual rate of only 1.4 percent, the lowest six-month rate in 18 years. The towering interest rates that once forced so many small businesses to close also have dropped dramatically. The prime rate as high as 21.5 percent two years ago is 10.5 percent and we'll get it lower. Far fewer regulations are being imposed on small businesses as we've cut regulatory growth by a third and that's under a task force headed by the Vice President. We've broken through tax barriers to capital formation and investment and virtually eliminated estate taxes for a surviving spouse and our tax indexing provision and individual tax rate cuts will make it easier for small business owners to fund and maintain their companies. These tax reforms are designed to spur saving, investment, and productivity. There's an old economic axiom still true today that says if people are not allowed to earn more by producing more, then more will not be produced. Well, that's why our tax incentives are critical to recovery and we will not abide any tampering with them. The third year of the tax cut, scheduled to take effect in July and tax indexing will benefit small business people and average working families the most. Their repeal would be a cruel blow, an unfair attempt to steal the just rewards of those Americans who have carried us through recession and into recovery. The export trading come and incidentally, I mean it when I say we won't tolerate it, I will veto any attempt to get rid of those two tax cuts. The Export Trading Company Act I signed last fall will also help small firms compete in foreign markets. And the Small Business Innovation Development Act, which I signed last July, will direct more federal research and development funds to small high-tech firms, the enterprises that always have been leaders in innovation. One of the reforms I'm proudest of is the requirement that Uncle Sam pay his bills on time or pay an interest penalty. This obvious and overdue improvement in the way government does business will help the many small firms with federal contracts. And speaking of doing business with the federal government, we've expanded the amount of federal procurement going to small business, especially firms owned by minorities and women. Last year, almost $45 billion in federal procurement went to small companies, and that's an all-time record. As you can see, this administration is dedicated to restoring and preserving a free market environment in which small businesses can grow, create jobs, and earn the healthy profits that benefit us all. We can do this only in an economy free of inflation scourge with monetary and fiscal soundness and a rational regulatory policy. But already, liberals in the House have proposed a budget that would undermine the improving economy with a frontal assault on the policies that have got America on the mend. Unable to break their spending addiction, these members have proposed reversing the hard-won domestic spending cuts achieved during the last two years. Money for these excesses, they claim, can be found by slashing our defense program to dangerous levels and engorging the tax share of our gross national product to the highest levels in history. Such a plan not only would gamble with the security of the United States, it would plunge us once again into the no man's land of spend and spend and tax and tax. We must not permit them to drag us back into that swamp. America has taken its first cautious steps toward recovery. There is no doubt about that. Our progress will grow more bold and dramatic in the weeks and months ahead, but only if we hold fast to the economic policies that have gotten us this far. And as this report indicates, small businesses have an important role to play. Recent surveys show strong optimism in the small business community. Owners are again planning new purchases, inventory development, which will fuel the recovery. Many millions of our people dream of working for themselves and running their own businesses. It's risky to be sure, as you well know, but those dreams reflect the imagination, the daring and the creativity that has brought so much progress and made this nation so great. Theodore Roosevelt was right when he said, it is our duty to see that the wager worker, the small producer, the ordinary consumer, get their fair share of the benefit of business prosperity, but it either is or ought to be evident to everyone that business has to prosper before anybody can get any benefit from it. Well, generation after generation of hardworking Americans have understood that truth and used it to build the most prosperous nation on earth. As I sign this report today, let us remember that success for small business and for America is one and the same. I call on the Congress to work with us to hold down spending and protect the people's tax cuts. Let us remember that prosperity, like profits, must be earned. It will never come as a gift from government or anyone else. If we return incentives to risk takers and entrepreneurs, we will free our people to create good times ahead, restoring hope and opportunity for everyone. And now I'm going to quit talking and start writing and send this to Congress, this State of Small Business report.