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Economic
Recovery Program
Ronald
Reagan
April
28, 1981
You
wouldn't want to talk me into an encore, would you?
Mr. Speaker, Mr. President, distinguished Members of
the Congress, honored guests, and fellow citizens: I
have no words to express my appreciation for that
greeting. I have come to speak to you tonight about
our economic recovery program and why I believe it's
essential that the Congress approve this package,
which I believe will lift the crushing burden of
inflation off of our citizens and restore the
vitality to our economy and our industrial machine.
First, however, and due to events of the past few
weeks, will you permit me to digress for a moment
from the all-important subject of why we must bring
government spending under control and reduce tax
rates. I'd like to say a few words directly to all of
you and to those who are watching and listening
tonight, because this is the only way I know to
express to all of you on behalf of Nancy and myself
our appreciation for your messages and flowers and,
most of all, your prayers, not only for me but for
those others who fell beside me. The warmth of your
words, the expression of friendship and, yes, love,
meant more to us than you can ever know. You have
given us a memory that we'll treasure forever. And
you've provide an answer to those few voices that
were raised saying that what happened was evidence
that ours is a sick society.
The society we heard from is made up of millions of
compassionate Americans and their children, from
college-age to kindergarten. As a matter of fact, as
evidence of that I have a letter with me. The letter
came from Peter Sweeney. He's in the second grade in
the Riverside School in Rockville Centre, and he
said, "I hope you get well quick or you might
have to make a speech in your pajamas." And he
added a postscript. "P.S. If you have to make a
speech in your pajamas, I warned you."
Well, sick societies don't produce men like the two
who recently returned from outer space. Sick
societies don't produce young men like Secret Service
agent Tim McCarthy, who placed his body--he placed
his body between mine and the man with the gun simply
because he felt that's what his duty called for him
to do. Sick societies don't produce dedicated police
officers like Tom Delahanty or able and devoted
public servants like Jim Brady. Sick societies don't
make people like us so proud to be Americans and so
very proud of our fellow citizens.
Now, let's talk about getting spending and inflation
under control and cutting your tax rates. Mr. Speaker
and Senator Baker, I want to thank you for your
cooperation in helping to arrange this joint session
of the Congress. I won't be speaking to you very long
tonight, but I asked for this meeting because the
urgency of our joint mission has not changed. Thanks
to some very fine people, my health is much improved.
I'd like to be able to say that with regard to the
health of the economy.
It's been half a year since the election that charged
all of us in this government with the task of
restoring our economy. And where have we come in this
six months? Inflation, as measured by the Consumer
Price Index, has continued at a double-digit rate.
Mortgage interest rates have averaged almost 15
percent for these six months, preventing families
across America from buying homes. There are still
almost eight million unemployed. The average worker's
hourly earnings after adjusting for inflation are
lower today than they were six months ago, and there
have been over 6,000 business failures.
Six months is long enough. The American people now
want us to act and not in half-measures. They demand
and they've earned a full and comprehensive effort to
clean up our economic mess. Because of the extent of
our economy's sickness, we know that the cure will
not come quickly and that even with our package,
progress will come in inches and feet, not in miles.
But to fail to act will delay even longer and more
painfully the cure which must come. And that cure
begins with the federal budget. And the budgetary
actions taken by the Congress over the next few days
will determine how we respond to the message of last
November 4th. That message was very simple. Our
government is too big, and it spends too much.
For the last few months, you and I have enjoyed a
relationship based on extraordinary cooperation.
Because of this cooperation we've come a long
distance in less than three months. I want to thank
the leadership of the Congress for helping in setting
a fair timetable for consideration of our
recommendations. And committee chairmen on both sides
of the aisle have called prompt and thorough
hearings. We have also communicated in a spirit of
candor, openness, and mutual respect. Tonight, as our
decision day nears and as the House of
Representatives weighs its alternatives, I wish to
address you in that same spirit.
The Senate Budget Committee, under the leadership of
Pete Domenici, has just today voted out a budget
resolution supported by Democrats and Republicans
alike that is in all major respects consistent with
the program that we have proposed. Now we look
forward to favorable action on the Senate floor, but
an equally crucial test involves the House of
Representatives. The House will soon be choosing
between two different versions or measures to deal
with the economy. One is the measure offered by the
House Budget Committee. The other is a bipartisan
measure, a substitute introduced by Congressmen Phil
Gramm of Texas and Del Latta of Ohio.
On behalf of the administration, let me say that we
embrace and fully support that bipartisan substitute.
It will achieve all the essential aims of controlling
government spending, reducing the tax burden,
building a national defense second to none, and
stimulating economic growth and creating millions of
new jobs. At the same time, however, I must state our
opposition to the measure offered by the House Budget
Committee. It may appear that we have two
alternatives. In reality, however, there are no more
alternatives left.
The committee measure quite simply falls far too
short of the essential actions that we must take. For
example, in the next three years, the committee
measure projects spending $141 billion more than does
the bipartisan substitute. It regrettably cuts over
$14 billion in essential defense spending, funding
required to restore America's national security. It
adheres to the failed policy of trying to balance the
budget on the taxpayer's back. It would increase tax
payments over a third, adding up to a staggering
quarter of a trillion dollars. Federal taxes would
increase 12 percent each year. Taxpayers would be
paying a larger share of their income to the
government in 1984 than they do at present. In short,
that measure reflects an echo of the past rather than
a benchmark for the future. High taxes and excess
spending growth created our present economic mess;
more of the same will not cure the hardship, anxiety,
and discouragement it has imposed on the American
people.
Let us cut through the fog for a moment. The answer
to a government that's too big is to stop feeding its
growth. Government spending has been growing faster
than the economy itself. The massive national debt
which we accumulated is the result of the
government's high spending diet. Well, it's time to
change the diet and to change it in the right way.
I know the tax portion of our package is of concern
to some of you. Let me make a few points that I
think--feel have been overlooked. First of all, it
should be looked at as an integral part of the entire
package, not something separate and apart from the
budget reductions, the regulatory relief, and the
monetary restraints. Probably the most common
misconception is that we are proposing to reduce
government revenues to less than what the government
has been receiving. This is not true. Actually, the
discussion has to do with how much of a tax increase
should be imposed on the taxpayer in 1982.
Now, I know that over the recess in some informal
polling some of your constituents have been asked
which they'd rather have, a balanced budget or a tax
cut, and with the common sense that characterizes the
people of this country, the answer, of course, has
been a balanced budget. But may I suggest, with no
inference that there was wrong intent on the part of
those who asked the question, the question was
inappropriate to the situation. Our choice is not
between a balanced budget and a tax cut. Properly
asked, the question is, "Do you want a great big
raise in your taxes this coming year or, at the
worst, a very little increase with the prospect of
tax reduction and a balanced budget down the road a
ways?" With the common sense that the people
have already shown, I'm sure we all know what the
answer to that question would be.
A gigantic tax increase has been built into the
system. We propose nothing more than a reduction of
that increase. The people have a right to know that
even with our plan they will be paying more in taxes,
but not as much more as they will without it. The
option, I believe, offered by the House Budget
Committee, will leave spending too high and tax rates
too high. At the same time, I think it cuts the
defense budget too much, and by attempting to reduce
the deficit through higher taxes, it will not create
the kind of strong economic growth and the new jobs
that we must have.
Let us not overlook the fact that the small,
independent business man or woman creates more than
80 percent of all the new jobs and employs more than
half of our total work force. Our across-the-board
cut in tax rates for a three-year period will give
them much of the incentive and promise of stability
they need to go forward with expansion plans calling
for additional employees.
Tonight, I renew my call for us to work as a team, to
join in cooperation so that we find answers which
will begin to solve all our economic problems and not
just some of them. The economic recovery package that
I've outlined to you over the past weeks is, I deeply
believe, the only answer that we have left. Reducing
the growth of spending, cutting marginal tax rates,
providing relief from over regulation, and following
a non-inflationary and predictable monetary policy
are interwoven measures which will ensure that we
have addressed each of the severe dislocations which
threaten our economic future. These policies will
make our economy stronger, and the stronger economy
will balance the budget which we're committed to do
by 1984.
When I took the oath of office, I pledged loyalty to
only one special interest group--"We the People.
" Those people--neighbors and friends,
shopkeepers and laborers, farmers and craftsmen--do
not have infinite patience. As a matter of fact, some
80 years ago, Teddy Roosevelt wrote these instructive
words in his first message to the Congress: "The
American people are slow to wrath, but when their
wrath is once kindled, it burns like a consuming
flame. " Well, perhaps that kind of wrath will
be deserved if our answer to these serious problems
is to repeat the mistakes of the past.
The old and comfortable way is to shave a little here
and a little there. Well, that's not acceptable
anymore. I think this great and historic Congress
knows that way is no longer acceptable. Thank you
very much. Thank you. I think you've shown that you
know the one sure way to continue the inflationary
spiral is to fall back into the predictable patterns
of old economic practices. Isn't it time that we
tried something new? When you allowed me to speak to
you here in these chambers a little earlier, I told
you that I wanted this program for economic recovery
to be ours--yours and mine. I think the bipartisan
substitute bill has achieved that purpose. It moves
us toward economic vitality.
Just two weeks ago, you and I joined millions of our
fellow Americans in marveling at the magic historical
moment that John Young and Bob Crippen created in
their space shuttle Columbia. The last manned effort
was almost six years ago, and I remembered on this
more recent day, over how--over the years, how we'd
all come to expect technological precision of our men
and machines. And each amazing achievement became
commonplace, until the next new challenge was raised.
With the space shuttle we tested our ingenuity once
again, moving beyond the accomplishments of the past
into the promise and uncertainty of the future. Thus,
we not only planned to send up a 122-foot aircraft
170 miles into space, but we also intended to make it
maneuverable and return it to earth, landing 98 tons
of exotic metals delicately on a remote, dry lake
bed. The space shuttle did more than prove our
technological abilities. It raised our expectations
once more. It started us dreaming again.
The poet Carl Sandburg wrote, "The republic is a
dream. Nothing happens unless first a dream."
And that's what makes us, as Americans, different.
We've always reached for a new spirit and aimed at a
higher goal. We've been courageous and determined,
unafraid and bold. Who among us wants to be first to
say we no longer have those qualities, that we must
limp along, doing the same things that have brought
us our present misery? I believe that the people you
and I represent are ready to chart a new course. They
look to us to meet the great challenge, to reach
beyond the commonplace and not fall short for lack of
creativity or courage. Someone, you know, has said
that he who would have nothing to do with thorns must
never attempt to gather flowers. Well, we have much
greatness before us. We can restore our economic
strength and build opportunities like none we've ever
had before. As Carl Sandburg said, all we need to
begin with is a dream that we can do better than
before. All we need to have is faith, and that dream
will come true. All we need to do is act, and the
time for action is now.
Thank you. Good night.
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