1:42 P.M. EDT

THE PRESIDENT: Thank you all very much. Please be seated. Newth, thank you very much. And Ray, and Susan Blavett, (phonetic) -- thank you for being here, as well. I'm glad my SBA Director is here -- Hector Barreto is in charge of the Small Business Association. And, Hector, thank you for coming. I want to thank the employees of Dixie Printing, and my fellow Americans. (Applause.)

Some might ask why, in the midst of war, I would come to Dixie Printing. They say, here you are conducting a campaign against terrorists, and you take time to come to a small business. And the answer is, because we fight in the war on two fronts. We fight a war at home; and part of the war we fight is to make sure that our economy continues to grow.

When the terrorists struck our homeland, they thought we would fold. They thought our economy would crater. That's what they wanted. But they don't understand America. They don't understand the entrepreneurial spirit of our country. They don't understand the spirit of the working men and women of America. They don't understand that small business owners all across our country are saying, we're not going to allow you to terrorize us. We're going to make sure our -- (applause.)

I am here to report that we're doing well on both fronts. Overseas, our diplomatic efforts are strong. Nations all across the globe have bound with the United States to send a clear message that we'll fight terrorism wherever it may exist.

Recently I was in China. I had an interesting meeting, as you can imagine, with the President of Russia, the head of China, Mexico, Chile -- were all represented. And to a leader, from all kinds of nations -- some Muslim, some not -- the people said, we stand with America. We stand with America in our noble goal of finding the evildoers and bringing them to justice.

As you know, I have asked our military to take an active role in the campaign. I set out a doctrine to America that said the following: Not only will we hold terrorists accountable for their activities, we will also hold those accountable, those nations accountable that harbor them, that hide them, that try to feed them. And that's exactly what we're doing in Afghanistan.

I gave the Afghan government, the Taliban government, plenty of time to respond to the demands of the United States. I said, you must hand over the al Qaeda leadership which hides in your country. I said, you must free those who you illegally detain in your country. And I said, you must destroy the camps that have been used to train the terrorists. And they had time to respond, and they didn't respond positively, and, therefore, they're paying a price.

Our military is conducting a campaign to bring the terrorists to justice, not to harm the Afghan people. While we are holding the Taliban government accountable, we're also feeding Afghan people. You need to be proud of the United States military. It's doing its job. It is slowly, but surely, encircling the terrorists so that we'll bring them to justice. We're patient. We're firm. We have got a strategy that is going to work. And make no mistake about it, justice will be done. (Applause.)

But there is another front in this war, and the front is here at home. It's something that, obviously, we're not used to in America. We've had oceans which have protected us over our history. Except for Pearl Harbor, we've never really been hit before. And yet, on September 11th, this great land came under attack. And it's still under attack as we speak. Anybody who puts poison in mail is a terrorist. Anybody who tries to affect the lives of our good citizens is evil.

I'm oftentimes asked by our friends in the press, do I know if there's a direct connection between what took place on September the 11th and what's happening today. I have no direct evidence, but there are some links. Both series of actions are motivated by evil and hate. Both series of actions are meant to disrupt Americans' way of life. Both series of actions are an attack on our homeland. And both series of actions will not stand.

It's important for the American people to know our government is doing everything we can on both fronts of this war. On the home front, we've got an Office of Homeland Security, the job of which is to organize and coordinate our functions of government in such a way as to disrupt and find those who would harm our citizens. We've got thousands of FBI agents scouring the information, asking questions, following up leads, all aimed to raise the risk of someone who would harm our citizens.

And, as well, we've responded to every incident that has occurred. Our nation has responded with bravery and courage. I'm proud of our health officials who responded so quickly to the incidents that took place. And, unfortunately, we lost life, and our prayers are with anybody who lose life in America. But I firmly believe their quick actions saved many lives, as well.

We're learning about terror and evil, and our country is responding forcefully. The American people have got remarkable spirit and remarkable resolve. We are strong, we are united, and we are determined to prevail. (Applause.)

One of the effects of the attacks has been on our economy. Make no mistake about it: September 11th affected economic growth, and our government must respond in an effective way. And so I'm here to talk about an important part of the home front security, and that is our economy.

First of all, the bases for economic growth are very strong. The entrepreneurial spirit is really strong in America. We're the haven for small business opportunity in our country. I mean, more jobs are created through small business owners and the entrepreneurs of America than they are through large corporate America. And so, as we think through how to encourage economic growth, we've got to always keep in mind the small business and the medium-sized businesses of America.

Secondly, our tax structure has been improved. In other words, we're giving people more of their own money back. And that's an important part of economic growth. We just finished distributing about $40 billion in rebate checks. Maybe some of you have received a $600 or $300 check. (Applause.) That's part of encouraging growth. And, by the way, those tax cuts that have just begun will continue next year, and the year after that, as well. (Applause.)

And we've acted confidently and quickly to spend money necessary to help the country recover from the attacks. We spent money on helping rebuild New York City and the Pentagon. We have spent money to stabilize our airline industry, which was the industry most directly affected by the attacks of September the 11th. We've spent money to take care of workers who have lost jobs, and that's necessary and that's important.

And we've taken enough money -- spending money to make sure we defend our country and accomplish our mission overseas. That spending has amounted to about $60 billion, above and beyond our budget. That money will help with job creation and will help our economy grow. It's necessary to spend that kind of money in a time of emergency, and we're in times of emergency.

But I strongly believe it's time to balance this amount of spending with additional tax relief. My judgment, we've provided a lot of money in the short run, and in order to encourage and stimulate our economy, we ought to offset that money with additional tax relief -- and I want to describe some of what that means.

First, we need to accelerate the tax relief that is already going to happen. In other words, instead of waiting for next year's tax relief to happen, let's put it into this year, to bolster consumer spending. We want you to have more money to spend, particularly as we head into the Christmas season. We want our consumers feeling confident.

One way to feel confident is for the people to know there's a strong homeland security initiative and strategy, that our country is doing everything we can to succeed. And there's nothing like boosting confidence than a little extra money in the pocket, too. (Applause.)

I also believe we ought to have rebates for low- and moderate-income workers, people who might have filed an income tax return, but didn't get any rebate last time. Those good folks have been particularly hard-hit as a result of September the 11th. And that ought to be a part of our consumer confidence package.

And then there's the business side, and I want you to know that we've thought very carefully about how to stimulate economic vitality and growth. And it's a package that will help small business America. It's a package that will do two things: One, encourage more investment, immediate investment in plant and equipment, and, therefore, one that will help small businesses not only retain their work force, but, hopefully, expand their work forces.

And, therefore, we need to reform the corporate income tax to get rid of the alternative minimum tax, which so severely affects small businesses like Dixie. (Applause.) As well, we need to allow businesses to deduct more of the cost of new investments immediately. We need to say to the Dixie Printings of America, if you invest in equipment now, you're rewarded for that investment. To me, that makes common sense. It's a good way to make sure that we enhance the employment opportunities of America.

The terrorists wanted our economy to stop. It hasn't. They wanted to diminish the spirit of America. It didn't. They thought the government wouldn't be able to react. The government is going to react with an economic stimulus package that is good for workers. The House is getting ready to vote on that package. I urge them to pass it. And then I urge the Senate to act quickly to make sure that the American people understand that at this part of our homeland defense, our country and the Congress is united. (Applause.)

You know, I said early on that through my tears I see opportunity. And I believe my faith teaches that out of evil can come good. And there's been a lot of good that has come out of this terrible situation. By the way, there's a spirit of cooperation in Washington that is very positive. We've got Republicans and Democrats talking to each other. (Laughter.) That's good. It's very important during this time in our history that we in Washington, D.C. show that we can work together.

I don't know if you know this or not, but I'm now having a weekly breakfast with the leaders of the House and the Senate, both Republicans and Democrats. And I can report that there is no party that has got a lock on patriotism. The Democrats, just like Republicans, want to win this war. And we're talking about how to best solve the problems with which we're confronted.

But there's also a lot of other good, too. We've got moms and dads reassessing values, recognizing there are things that are so precious in life, like their children and their marriage and their family, and their church and their synagogue and their mosque. Values are strong in America. Those who struck our country didn't realize -- didn't realize because they're so evil and so dark and so negative, they couldn't realize that there's going to be such good that comes out of what took place in America.

We're resolved. We are strong. We're determined. We're patient. And this nation is going to do whatever it takes. You see, my attitude is, is that how the Dixie Printings behave, and how the workers behave here, and how the citizens of Maryland behave are incredibly important. How you respond to these attacks are incredibly important, not only to help win the war today, but to set the example for future generations of Americans.

It's important that we win today, place that flag of freedom squarely in the world. Because this is the first battle of the 21st century, and it's a battle we must win -- we have no choice -- for our children and our grandchildren. And it means that the country is going to have to do what it takes.

And I'm here to report, we are. We are going to do it. (Applause.)

So I want to thank you for giving me a chance to drop in to say hello. I am so honored to be the President of this great nation -- and I mean, great. What a fabulous land we have. And the reason why is because we've got such fabulous citizens.

Thank you for letting me come by. God bless. (Applause.)

END 2:04 P.M. EDT