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Our nation also demands that we implement a pragmatic strategy for legal reform to ensure that it is fair and just, that every person has his or her day in court, and that baseless litigation no longer hinders our economy's growth. My plan for medical liability reform will reduce the number of frivolous lawsuits that are clogging the courts, lower health care costs for businesses and employees, and help maintain strong doctor-patient relationships. My proposal would ensure that injured persons are fully compensated for their economic losses, while reasonably limiting noneconomic damages to $250,000. It would also reserve punitive damages for cases in which they are justified, ensure that old cases cannot be brought years after an event, and provide that defendants should pay judgments in proportion to their fault. We are also pursuing free and fair trade agreements that are encouraging foreign companies to invest in the U.S. economy and providing new markets for American exports. To ensure a level playing field for American businesses and workers, we are aggressively combating unfair trade practices and enforcing agreements on those nations that fail to comply. Many of these combined policy initiatives are already working to create a healthy and strong economic environment. My administration will continue to pursue an economic agenda that will sustain long-term job growth and further extend the arm of prosperity.

We have also worked to reduce the government-created obstacles to growth by decreasing the number of bureaucratic regulations and streamlining policies so that small businesses can focus their resources on job creation instead of on excessive paperwork. For example, I have asked the director of the Office of Management and Budget to work with the Small Business Administration's Office of Advocacy to strengthen the enforcement of the Regulatory Flexibility Act. This act requires agencies to prepare an analysis of the impact of new regulations on small businesses before they are put in place. The burden of health care costs also slow economic growth, and my administration has worked to address these costs with a comprehensive approach to making health care more affordable and accessible for families and small businesses. New Health Savings Accounts (HSAs) are giving Americans greater control over their health care by allowing them to pay for routine medical expenses and save for future medical expenses in a tax-free account that they own and can take with them when they change jobs. In a second term, I will propose to give small business owners a tax credit on HSAs for the first $500 per worker with family coverage and the first $200 per worker with individual coverage that they contribute to an HSA. Self-employed people will be able to claim this credit for contributions to their own accounts. I also have proposed tax credits for low-income families and individuals that are advanceable and immediately available to help families with their expenses. For eligible low-income families that choose to use their tax credit to purchase an HSA, I have proposed that these families receive up to $2000 for their premiums and $1000 cash for their HSA and individuals will be eligible for up to $700 for premiums and $300 for their HSAs. I have also asked Congress to enact Association Health Plans (AHPs) to give more American working families and small businesses affordable health care insurance plans. These plans will allow small businesses to band together and negotiate on behalf of their workers just like large corporations and unions do. I also want to expand the AHP concept so that charitable organizations, churches and other civic groups can negotiate coverage for their members.

We will close loopholes in international tax law that encourages outsourcing. Today's tax law provides big breaks for companies that send American jobs overseas. Current deferral policies allow American companies to avoid paying taxes on income earned by their foreign subsidiaries and encourage them to keep their profits parked overseas, not reinvested in America. As president, I will end deferral that encourages outsourcing and will shut down other loopholes to make the tax code work for the American worker, not provide tax breaks for companies that ship jobs overseas. We will offer a onetime tax holiday for companies to reinvest their foreign profits in America. At the end of 2002, American companies were keeping more than $639 billion in profits abroad. We have a plan to bring these profits back home. For one year, we will provide companies with a special low tax rate of 10% on any profits they reinvest in the United States for companies with a domestic reinvestment plan. We plan to establish a Manufacturing Business Investment (MANBIC) initiative, which is based on the Small Business Investment Company (SBIC), a program I have strongly supported in the past and will champion as president. SBIC provides venture capital and start-up financing to small businesses, many of which have grown into large corporations employing millions of Americans. MANBIC will create added incentives for venture-capital investment in medium-sized manufacturing firms, which are crucial in developing and sustaining new products, new production methods and new markets. We will be more competitive through the creation of a new Jobs Tax Credit. Research has demonstrated that new job tax credits increase employment. Our new Jobs Tax Credit will cover an employer's share of payroll taxes for net new jobs created in manufacturing, other businesses affected by outsourcing and small business. This credit will be available in 2005 and 2006. We will plan to lower corporate tax rates by 5%. Our plan to close tax loopholes and end deferral will not increase the deficit by one dime-in fact, it will save an average of $12 billion a year. These profits will be used to: lower the corporate tax rate; cut taxes for over 99% of taxpaying companies. Our international tax reform will increase hiring and investment in America by American companies. An analysis of IRS data shows that more than 99% of corporations paying corporate income taxes would see their taxes reduced under this proposal.