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10/6/75 - Televised Speech on the Economy
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10/6/75 - Televised Speech on the Economy
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The original documents are located in Box 17, "10/6/75 - Televised Speech on the
Economy" of the President's Speeches and Statements: Reading Copies at the Gerald R.
Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 17 of President's Speeches and Statements: Reading Copies at the Gerald R. Ford Presidential Library
THE PRESIDENT HAS SEEN
GOOD EVENING:
I HAVE ASKED FOR THIS OPPORTUNITY TO TALK WITH
YOU TONIGHT BECAUSE IT IS IMPORTANT THAT ALL OF US BEGIN
FACING UP TO A FUNDAMENTAL DECISION ABOUT OUR NATION'S
FUTURE.
FOR SEVERAL YEARS, AMERICA HAS BEEN APPROACHING
A CROSSROADS IN OUR HISTORY. TODAY WE ARE THERE.
TO PUT IT SIMPLY, WE MUST DECIDE WHETHER WE SHALL
CONTINUE IN THE DIRECTION OF RECENT YEARS -- THE PATH TOWARD
-2-
BIGGER GOVERNMENT, HIGHER TAXES, AND HIGHER INFLATION --
OR WHETHER WE SHALL NOW TAKE A NEW DIRECTION -- BRINGING
A HALT TO THE MOMENTOUS GROWTH OF GOVERNMENT, RESTORING
OUR PROSPERITY, AND ALLOWING EACH OF-YOU A GREATER VOICE
IN YOUR OWN FUTURE.
TONIGHT I WILL SET FORTH TWO PROPOSALS THAT, TAKEN
TOGETHER -- AS THEY MUST BE -- REPRESENT THE ANSWER I BELIEVE
WE MUST CHOOSE:
-- FIRST, I PROPOSE THAT WE MAKE A SUBSTANTIAL AND
PERMANENT REDUCTION IN OUR FEDERAL TAXES; AND,
-3-
-- SECOND, I PROPOSE THAT WE MAKE A SUBSTANTIAL
REDUCTION IN THE GROWTH OF FEDERAL SPENDING.
LET ME EMPHASIZE AT THE OUTSET THAT THESE PROPOSALS
MUST BE TIED TOGETHER IN ONE PACKAGE. IT WOULD BE DANGEROUS
AND IRRESPONSIBLE TO ADOPT ONE WITHOUT THE OTHER. I WILL
NOT ACCEPT THAT AS AN ANSWER FOR OUR FUTURE. I WANT THESE
PROPOSALS ACTED UPON TOGETHER BY THE CONGRESS. TOGETHER,
THEY REPRESENT ONE CENTRAL AND FUNDAMENTAL DECISION: THAT
AMERICA BELONGS TO YOU, THE PEOPLE, AND NOT TO THE
GOVERNMENT.
-4-
EACH OF YOU KNOWS FROM EXPERIENCE ABOUT YOUR
ECONOMIC PROBLEMS OF RECENT MONTHS. YOU KNOW WHAT IT
MEANS TO PAY MORE AND MORE OF YOUR INCOME JUST TO FEED
AND CLOTHE YOUR FAMILY, TO GET TO WORK, AND TO MAINTAIN
A DECENT HOME. YOU KNOW THE FEAR THAT STRIKES THE HUMAN
HEART WHEN A FRIEND OR MEMBER OF YOUR FAMILY IS LAID
OFF WORK. AND YOU KNOW THE ANXIETY THAT COMES WHEN
THESE FORCES SEEM BEYOND YOUR CONTROL.
NONE OF US WANTS TO REPEAT THE EXPERIENCES OF
THE PAST YEAR. WE WANT STEADY PRICES. WE WANT STEADY
-5-
JOBS. AND ABOVE ALL, WE WANT A CHANCE TO GET AHEAD AGAIN,
TO KNOW THAT OUR DESTINY LIES IN OUR OWN HANDS AND NOT
IN WASHINGTON OR SOME OTHER FAR AWAY PLACE.
FORTUNATELY, THERE ARE ENCOURAGING SIGNS THAT
WE HAVE WEATHERED THE WORST OF THIS ECONOMIC STORM.
THE RECOVERY THAT BEGAN THI S SPRING IS NOW GATHERING
MOMENTUM. IF WE ACT WISELY, IT WILL CONTINUE ON AN
UPWARD PATH, WITH MORE JOBS AND MORE STABLE PRICES.
YET WE SHOULD NOT BE DECEIVED. ALL OF US MUST
RECOGNIZE THAT JUST BENEATH THE SURFACE THERE ARE STILL
-6-
DEEP-SEATED PROBLEMS IN OUR ECONOMY -- PROBLEMS THAT
HAVE BEEN BUILDING UP OVER THE YEARS AND WILL NOT QUICKLY
OR EASILY DISAPPEAR.
WE MUST ATTACK THE UNDERLYING CAUSES OF OUR
ECONOMIC PROBLEMS. WE MUST GET AT THE ROOTS OF OUR
DIFFICULTIES.
WE MUST FIND ANSWERS THAT SERVE US NOT ONLY THIS
YEAR BUT FOR YEARS TO COME.
THE PRESIDENT AND THE CONGRESS WORKING TOGETHER
HAVE THE POWER TO HELP. I KNOW THAT, BECAUSE IN WASHINGTON
-7-
MUCH OF AMERICA'S VITALITY AND PROSPERITY HAVE BEEN
DRAINED AWAY. IT IS HERE THAT ONE BIG SPENDING PROGRAM
AFTER ANOTHER HAS BEEN PILED ON THE FEDERAL PYRAMID,
TAKING A LARGER SHARE OF YOUR PERSONAL INCOME AND
CREATING RECORD BUDGET DEFICITS AND INFLATION. HERE A
MASSIVE, OFTEN OVERZEALOUS BUREAUCRACY HAS BEEN ERECTED
THAT HAS BECOME TOO INVOLVED IN TRYING TO RUN TOO MUCH
OF YOUR DAILY LIFE.
OVER THE YEARS, THESE EXCESSES HAVE PLAYED A
MAJOR ROLE IN DRIVING UP PRICES, DRIVING UP INTEREST
-8-
RATES, AND HOLDING DOWN JOBS. WE DO NOT HAVE TO LOOK
FAR FOR OUR UNDERLYING PROBLEMS. MUCH OF OUR INFLATION
SHOULD BEAR A LABEL: "MADE IN WASHINGTON, D.C."
AS WE EMERGE FROM THIS RECESSION, WE FACE THE
BASIC CHOICE: SHALL WE CONTINUE THESE PATTERNS IN
WASHINGTON OR SHALL WE SET OFF IN A NEW DIRECTION? WE
CANNOT DO BOTH; WE CANNOT GO DOWN BOTH ROADS AT THE
SAME TIME. WE MUST CHOOSE.
TONIGHT, I PROPOSE PERMANENT TAX REDUCTIONS
TOTALING $28 BILLION -- THE BIGGEST SINGLE TAX CUT IN OUR
-9-
HISTORY. EARLIER THIS YEAR THE CONGRESS PASSED, AND I
SIGNED, A TEMPORARY TAX CUT COVERING CALENDAR YEAR 1975.
THAT TEMPORARY LAW WILL EXPIRE AT THE END OF THIS YEAR, AND,
UNLESS WE ACT NOW, YOUR TAXES WILL GO UP AGAIN IN JANUARY.
I AM PROPOSING THAT WE SWEEP AWAY THAT TEMPORARY LAW
AND REPLACE IT, EFFECTIVE JANUARY 1, WITH A PERMANENT
FEDERAL INCOME TAX CUT THAT WILL BE BOTH LARGER AN D MORE
EQUITABLE.
THREE QUARTERS OF THIS PERMANENT REDUCTION WILL
BE FOR INDIVIDUAL TAXPAYERS. AND THE CHIEF BENEFITS WILL
-10-
BE CONCENTRATED WHERE THEY BELONG: AMONG WORKING PEOPLE.
THE INDUSTRIOUS WORKING MEN AND WOMEN OF THIS COUNTRY
ARE THE BACKBONE OF AMERICA. WE CANNOT CONTINUOUSLY ASK
THEM TO BEAR AN UNFAIR TAX BURDEN. I PROPOSE THAT WE
LIGHTEN THE TAX LOAD FOR THEM AND FOR ALL OTHER AMERICANS
IN THREE WAYS:
-- BY RAISING EVERYONE'S PERSONAL TAX EXEMPTION
FROM $750 TO $1000;
-- BY MAKING THE STANDARD DEDUCTION FOR SINGLE
TAXPAYERS A FLAT $1800 AND FOR EVERY MARRIED COUPLE -
$2500, AND
-11-
-- BY LOWERING OUR BASIC PERSONAL INCOME TAX
RATES.
TOGETHER, THESE MEASURES WILL NOT ONLY DECREASE
EVERYONE'S TAXES BUT THEY WILL ALSO HELP TO MAKE UP FOR
THE RAVAGES OF INFLATION. THEY WILL SIMPLIFY THE TAX
RETURNS FOR MILLIONS OF AMERICANS. THE TOTAL PACKAGE
REPRESENTS A SUBSTANTIAL REDUCTION BELOW THE RATES
THAT WILL OTHERWISE TAKE EFFECT THIS JANUARY. UNDER MY
PROPOSAL, A TYPICAL FAMILY OF FOUR EARNING A TOTAL OF
$14,000 A YEAR -- WOULD GET A PERMANENT TAX CUT OF $412
A YEAR, -- A 27 PERCENT REDUCTION.
-12-
THE OTHER QUARTER OF THE TAX REDUCTION WILL BE
DIRECTED AT BUSINESS IN A WAY THAT CREATES MORE JOBS.
IF COMPANIES AND PLANTS ARE TO REGAINTHEIR FOOTING AND
TO HIRE MORE EMPLOYEES IN THE FUTURE, THEY MUST HAVE
GREATER INCENTIVES FOR INVESTMENT. IN ORDER TO CREATE
JOBS -- GOOD JOBS -- THIS COUNTRY MUST BUILD NEW PLANTS
AND NEW EQUIPMENT AND WE MUST HAVE A GROWING ECONOMY.
THE TAX CUTS THAT I PROPOSE -- INCLUDING A PERMANENT
INCREASE IN THE INVESTMENT TAX CREDIT AND A TWO PERCENT
REDUCTION IN THE CORPORATE TAX RATE -- ARE SPECIFICALLY
DESIGNED TO INCREASE EMPLOYMENT.
-13-
WE MUST RECOGNIZE THAT CUTTING TAXES IS ONLY
HALF THE ANSWER. IF WE CUT ONLY TAXES, BUT DO NOT CUT
THE GROWTH OF GOVERNMENT SPENDING, BUDGET DEFICITS WILL
CONTINUE TO CLIMB, THE FEDERAL GOVERNMENT WILL CONTINUE TO
BORROW TOO MUCH MONEY FROM THE PRIVATE SECTOR, WE WILL
HAVE MORE INFLATION, AND ULTIMATELY WE WILL HAVE MORE
UNEMPLOYMENT. SUBSTANTIAL CUTS IN YOUR TAXES MUST BE
TIED TO SUBSTANTIAL CUTS IN THE GROWTH OF GOVERNMENT
SPENDING.
-14-
ANYONE WHO HAS FOLLOWED THE UPWARD LEAP IN
FEDERAL SPENDING CAN ONLY SHAKE HIS HEAD IN ASTONISHMENT.
BACK IN 1962, THE FEDERAL BUDGET FOR THE FIRST TIME IN OUR
HISTORY RAN OVER $100 BILLION. IN ONLY EIGHT YEARS, THE
BUDGET DOUBLED IN SIZE. IN THE COMING FISCAL YEAR, UNLESS
WE ACT, IT WILL DOUBLE AGAIN TO OVER $400 BILLION.
ONE OF THE REASONS FOR THIS HORRENDOUS SPENDING
GROWTH IS THAT MUCH OF THE INCREASE IN EACH YEAR'S BUDGET
IS REQUIRED BY PROGRAMS ALREADY ON THE STATUE BOOKS.
MANY OF THESE PROGRAMS WERE FIRST ENACTED YEARS AGO,
-15-
AND WHILE INDIVIDUALLY THEY MIGHT HAVE APPEARED
MANAGEABLE THEN, TODAY -- TAKEN TOGETHER -- THEY ARE
OUT OF CONTROL. THEY ARE LIKE A FREIGHT TRAIN WHOSE
LIGHTS WERE FIRST SEEN FAR OFF IN THE NIGHT. THAT TRAIN
HAS BEEN COMING CLOSER AND CLOSER, AND NOW IT IS ROARING
DOWN UPON US. IF WE DON'T SLOW IT DOWN, FEDERAL SPENDING
NEXT YEAR COULD EASILY JUMP TO MORE THAN $420 BILLION
-- WITHOUT A SINGLE NEW FEDERAL PROGRAM.
THEREFORE, I PROPOSE THAT WE HALT THIS ALARMING
GROWTH BY HOLDING SPENDING IN THE COMING YEAR TO $395
-16-
BILLION. THAT MEANS A CUT OF $28 BILLION BELOW WHAT WE
WILL SPEND IF WE JUST STAND STILL AND LET THE TRAIN RUN
OVER US. MORE IMPORTANTLY, IT MEANS ALMOST A DOLLAR-
FOR-DOLLAR CUT IN TAXES AND SPENDING:. FOR EVERY DOLLAR
THAT WE RETURN TO THE AMERICAN TAXPAYER, WE MUST ALSO
CUT OUR PROJECTED SPENDING BY THE SAME AMOUNT.
IT WE ALLOW "POLITICS AS USUAL" TO PREVAIL IN THE
CONGRESS, THERE WILL BE A TEMPTATION TO OVERWHELMINGLY
APPROVE THE TAX CUTS AND DO NOTHING ON THE SPENDING CUTS.
-17-
THAT MUST NOT HAPPEN. I WILL GO FORWARD WITH THE TAX CUTS
THAT I AM PROPOSING ONLY IF THERE IS A CLEAR, AFFIRMATIVE
DECISION BY YOUR REPRESENTATI VES IN THE HOUSE AND THE
SENATE THAT THEY WILL HOLD SPENDING NEXT YEAR TO $395 BILLION.
I WILL NOT HESITATE TO VETO ANY LEGISLATION PASSED BY THE
CONGRESS WHICH VIOLATES THE SPIRIT OF THAT UNDERSTANDING.
I WANT THESE ACTIONS TO BE A FIRST STEP -- AND THEY ARE A
CRUCIAL STEP -- TOWARD BALANCING THE FEDERAL BUDGET
WITHIN THREE YEARS.
IN JANAURY I WILL PROPOSE TO THE CONGRESS THAT
MANY OF OUR CURRENT SPENDING PROGRAMS BE REVISED,
-18-
CONSOLIDATED AND HELD BELOW THEIR PROJECTED LEVELS. WHEN
I DO, YOU WILL HEAR LOUD PROTESTS FROM ONE GROUP AFTER
ANOTHER CONTENDING THAT WASHINGTON SHOULD KEEP UP AN
ENDLESS FLOW OF SUBSIDIES. BUT WE HAVE TO FACE HARD
REALITIES: OUR FINANCIAL RESOURCES ARE LIMITED. WE MUST
LEARN TO LIVE WITHIN OUR MEANS.
SPENDING DISCIPLINE BY THE FEDERAL GOVERNMENT
MUST BE APPLIED ACROSS THE BOARD. IT CANNOT BE ISOLATED
TO ONE AREA, SUCH AS SOCIAL PROGRAMS, NOR CAN WE
COMPLETELY INSULATE ANY AREA SUCH AS DEFENSE. ALL MUST
-19-
BE RESTRAINED. I BELIEVE THAT YOUR CONGRESSMEN SHOULD
STOP TRYING so HARD TO FIND NEW PROGRAMS THAT SPEND
YOUR MONEY, AND GET TO WORK FIGURING OUT HOW TO MAKE
THE GOVERNMENT WORK BETTER FOR YOU. WE SHOULD GET RID
OF THE PROGRAMS THAT DON'T WORK IN ORDER TO MAKE ROOM
FOR THOSE THAT DO. AND IN THE PROCESS, WE CAN BEGIN
CUTTING BACK THE SWOLLEN FEDERAL BUREAUCRACY.
I WANT TO WORK WITH THE CONGRESS AND WITH YOU,
THE PEOPLE, TO INSURE THAT THOSE WHO DESERVE THE HELP OF
OUR NATION CONTINUE RECEIVING THAT HELP -- THE EL DERLY,
-20-
THE POOR AND THE MEN AND WOMEN WHO HAVE BORNE OUR
NATION'S ARMS. ALSO, I WILL NOT PERMIT REDUCTIONS IN
OUR MILITARY BUDGET THAT WOULD JEOPARDIZE OUR NATIONAL
SECURITY. WE MUST MAINTAIN A STRONG ECONOMY AND A
STRONG NATIONAL DEFENSE.
SOMETIMES WHEN FANCY NEW SPENDING PROGRAMS
REACH MY DESK, PROMISING SOMETHING FOR ALMOST NOTHING
AND CARRYING APPEALING LABELS, I WONDER WHO THE
SUPPORTERS THINK THEY'RE KIDDING. FROM MY VISITS WITH
THE AMERICAN PEOPLE, I FIND MANY OF THEM BELIEVE THAT WHAT
-21-
THE GOVERNMENT PUTS IN YOUR FRONT POCKET, IT SLIPS OUT
OF YOUR BACK POCKET THROUGH TAXES AND INFLATION. THEY
ARE FIGURING OUT THAT THEY ARE NOT GETTING THEIR MONEY'S
WORTH FROM THEIR TAXES. THEY BELIEVE THAT THE POLITICS
OF FEDERAL SPENDING HAS BECOME TOO MUCH OF A SHELL GAME.
AND I MUST SAY THAT I AGREE WITH THEM.
AMERICA'S GREATNESS WAS NOT BUILT BY TAXING
PEOPLE TO THEIR LIMITS BUT BY LETTING OUR PEOPLE EXERCISE
THEIR FREEDOM AND THEIR INGENUITY TO THEIR LIMITS. FREEDOM
AND PROSPERITY GO HAND IN HAND. THE PROOF IS THERE TO
-22-
SEE AROUND THE WORLD. ONLY BE RELEASING THE FULL ENERGIES
OF OUR PEOPLE -- ONLY BY GETTING THE GOVERNMENT OFF YOUR
BACK AND OUT OF YOUR POCKET -- WILL WE ACHIEVE OUR GOALS
OF STABLE PRICES AND MORE JOBS.
I DEEPLY BELIEVE THAT OUR NATION MUST NOT CONTINUE
DOWN THE ROAD WE HAVE BEEN TRAVELING.
DOWN THAT ROAD LIES THE WRECKAGE OF MANY GREAT
NATIONS OF THE PAST.
LET US CHOOSE INSTEAD THE OTHER ROAD -- THE ROAD
THAT WE KNOW TO BE TESTED, THE ROAD THAT WILL WORK.
-23-
AS YOUR PRESIDENT, I CANNOT TAKE THIS JOURNEY
ALONE. I NEED THE HELP OF YOU, THE AMERICAN PEOPLE, TO
PERSUADE YOUR CONGRESSMEN AND YOUR SENATORS THAT YOU
WANT THE GROWTH IN GOVERNMENT S PENDING CUT so THAT YOUR
TAXES CAN BE CUT NOW. I NEED THE HELP OF THE FARMER IN IOWA,
THE HOUSEWIFE IN CALIFORNIA, THE RETIRED COUPLE IN FLORIDA,
THE SMALL BUSINESSMAN IN NEW JERSEY, THE STUDENT IN
TEXAS -- ALL OF YOU. THIS MUST BE A NATIONAL EFFORT.
AMERICA SHOULD NOT BELONG TO THE GOVERNMENT, BUT TO
-24-
THE PEOPLE. YOU CAN SERVE THE NATION BY HELPING US MAKE
THE RIGHT CHOICE FOR THE FUTURE.
THANK YOU AND GOOD EVENING.
END OF TEXT
Typed: 3:15 p.m.
Oct. 6, 1975
Good Evening:
I have asked for this opportunity to talk with you tonight because
it is important that all of us begin facing up to a fundamental decision
about our nation's future.
For several years, America has been approaching a crossroads
in our history. Today we are there.
To put it simply, we must decide whether we shall continue in
the direction of recent years -- the path toward bigger Government,
higher taxes, and higher inflation -- or whether we shall now take a new
direction -- bringing a halt to the momentous growth of Government,
restoring our prosperity, and allowing each of you a greater voice in
your own future.
Tonight I will set forth two proposals that, taken together -- as
they must be -- represent the answer I believe we must choose
- 2 -
-- First, I propose that we make a substantial and permanent
reduction in our Federal taxes; and,
-- Second, I propose that we make a substantial reduction in
the growth of Federal spending.
Let me emphasize at the outset that these proposals must
be tied together in one package. It would be dangerous and irresponsible
to adopt one without the other. I will not accept that as an answer for our
future. I want these proposals acted upon together by the Congress.
Together, they represent one central and fundamental decision: that
America belongs to you, the people, and not to your government.
Each of you knows from experience about your economic problems
of recent months. You know what it means to pay more and more of your
income just to feed and clothe your family, to get to work, and to
maintain a decent home. You know the fear that strikes the human heart
- 3 -
when a friend or member of your family is laid off work. And you know
the anxiety that comes when these forces seem beyond your control.
None of us wants to repeat the experiences of the past year.
We want steady prices. We want steady jobs. And above all, we want a
chance to get ahead again, to know that our destiny lies in our own hands
and not in Washington or some other far away place.
Fortunately, there are encouraging signs that we have weathered the
worst of this economic storm. The recovery that began this spring is now
gathering momentum. If we act wisely, it will continue on an upward
path with more jobs and more stable prices.
Yet we should not be deceived. All of us must recognize
that just beneath the surface there are still deep-seated problems in our
economy -- problems that have been building up over the years and will
not quickly or easily disappear.
- 4 -
We must attack the underlying causes of our economic
problems. We must get at the roots of our difficulties.
We must find answers that serve us not only this year but for
years to come.
The President and the Congress working together have the power to
help. I know that because in Washington much of America's vitality and
prosperity have been drained away. It is here that one big spending program
after another has been piled on the Federal pyramid, taking a larger
share of your personal income and creating record budget deficits and
inflation. Here a massive, often overzealous bureaucracy has been erected
that has become too involved in trying to run too much of your daily life.
Over the years, these excesses have played a major role in driving
up prices, driving up interest rates, and holding down jobs. We do not
have to look far for our underlying problems. Much of our inflation should
bear a label: "Made in Washington, D.C."
- 5 -
As we emerge from this recession, we thus face the basic
choice: Shall we continue these patterns in Washington or shall we set
off in a new direction? We cannot do both; we cannot go down both
roads at the same time. We must choose.
Tonight, I propose permanent tax reductions totaling $28 billion - --
the biggest single tax cut in our history. Earlier this year the Congress
passed, and I signed, a temporary tax cut covering calendar year 1975.
That temporary law will expire at the end of this year, and unless we
act now, your taxes will go up again in January. I am proposing that
we sweep away that temporary law and replace it, effective January 1,
wi th a permanent Federal income tax cut that will be both larger and
more equitable.
Three quarters of this permanent reduction will be for individual
taxpayers. And the chief benefits will be concentrated where they belong:
- 6 -
among working people. The industrious working men and women of this
country are the backbone of America. We cannot continuously ask
them to bear an unfair tax burden. I propose that we lighten the tax load
for them and for all other Americans in three ways:
-- By raising everyone's personal tax exemption from $750 to
$1000;
-- By making the standard deduction for single taxpayers a flat $1800
and for every married couple - $2500, and
-- By lowering our basic personal income tax rates.
Together, these measures will not only decrease everyone's
taxes but they will also help to make up for the ravages of inflation. They
will simplify the tax returns for millions of Americans. The total
package represents a substantial reduction below the rates that will
otherwise take effect this January. Under my proposal, a typical family
- 7 -
of four earning a total of $14,000 a year -- would get to a permanent tax
reduction of $412 a year, -- a 27 percent reduction.
The other quarter of the tax reduction will be directed at business
in a way that creates more jobs. If companies and plants are to regain
their footing and to hire more employees in the future, they must have
greater incentives for investment. In order to create jobs -- good jobs --
this country must build new plants and new equipment and we must have
a growing economy. The tax cuts that I propose -- including a permanent
increase in the investment tax credit and a two percent reduction in the
corporate tax rate -- are specifically designed to increase employment.
We must recognize that cutting taxes is only half the answer. If
we cut only taxes, but do not cut the growth of government spending, budget
deficits will continue to climb, the Federal Government will continue to
borrow too much money from the private sector, we will have more
- 8 -
inflation, and ultimately we will have more unemployment. Substantial
cuts in your taxes must be tied to substantial cuts in the growth of government
spending.
Anyone who has followed the upward leap in Federal spending can
only shake his head in astonishment. Back in 1962, the Federal budget for
the first time in our history ran over $100 billion. In only eight years,
the budget doubled in size. In the coming fiscal year, unless we act, it
will double again to over $400 billion.
One of the reasons for this horrendous spending growth is that
much of the increase in each year's budget is required by programs already
on the statute books. Many of these programs were first enacted years
ago, and while individually they might have appeared manageable then,
today -- taken together -- they are out of control. They are like a freight
train whose lights were first seen far off in the night. That train has been
- 9 -
coming closer and closer, and now it is roaring down upon us. If we
don't slow it down, Federal spending next year could easily jump to $420 billion
or more -- without a single new Federal program.
Therefore, I propose that we halt this alarming growth by holding
spending in the coming year to $395 billion. That means a cut of $25 billion
below what we will spend if we just stand still and let the train run over us.
More importantly, it means almost a dollar-for-dollar cut in taxes and
spending: for every dollar that we return to the American taxpayer, we
must also cut our projected spending by the same amount.
If we allow "politics as usual" to prevail in the Congress, there will
be a temptation to overwhelmingly approve the tax cuts and do nothing
on the spending cuts. That must not happen. I will go forward with the
tax cuts that I am proposing only if there is a clear, affirmative decision
- 1 0 -
by your representatives in the House and the Senate that they will hold
spending next year to $395 billion. I will not hesitate to veto any legislation
passed by the Congress which violates the spirit of that understanding.
I want these actions to be a first step -- and they are a crucial step --
toward balancing the Federal budget within three years.
I will propose to the Congress that many of our current spending
programs be revised, consolidated and held below their projected levels.
When I do, you will hear loud protests from one group after another contending
that Washington should keep up an endless flow of subsidies. But we have to
face hard realities: our financial resources are limited. We must learn
to live within our means.
Spending discipline by the Federal Government must be applied
across the board. It cannot be isolated to one area such as social programs
nor can we completely insulate any area such as defense. All must be
- 11 -
restrained. I believe that your Congressmen should stop trying so hard to
find new programs that spend your money, and get to work figuring out how
to make the government work better for you. We should get rid of
the programs that don't work in order to make room for those that do.
And in the process, we can begin cutting back the swollen Federal
bureaucracy.
I want to work with the Congress and with you, the people, to
insure that those who deserve the help of our nation continue receiving that
help - the elderly, the poor and the men and women who have borne our
nation's arms. Also, I will not permit reductions in our military budget
that would jeopardize our national security. We must maintain a strong
economy and a strong national defense.
Sometimes when fancy new spending programs reach my desk,
promising something for almost nothing and carrying appealing labels,
- 12 -
I wonder who the supporters think they': re kidding. From my visits with
the American people, I find many of them believe that what the government
puts in your front pocket, it slips out of your back pocket through taxes
and inflation. They are figuring out that they are not getting their
money's worth from their taxes. They believe that the politics of Federal
spending has become too much of a shell game. And I must say that I
agree with them.
America's greatness was not built by taxing people to their limits
but by letting our people exercise their freedom and their ingenuity to
their limits. Freedom and prosperity go hand in hand. The proof is
there to see around the world. Only by releasing the full energies of our
people -- only by getting the government off your back and out of your
pocket -- will we achieve our goals of stable prices and more jobs.
- 13 -
I deeply believe that our nation must not continue down the
road we have been traveling.
Down that road lies the wreckage of many great nations of the
past.
Let us choose instead the other road -- the road that we know
to be tested, the road that will work.
As your President, I cannot take this journey alone. I need the
help of you, the American people, to persuade your Congressmen and
your Senators that you want the growth in government spending cut so that
your taxes can be cut now. I need the help of the farmer in Iowa, the
housewife in California, the retired couple in Florida, the small businessman
in New Jersey, the student in Texas -- all of you. This must be a national
effort. America should not belong to the government, but to the people.
You can serve the Nation by helping us make the right choice for the future.
Thank you and good evening.
####