Radio Address to the Nation on the Economy

August 28, 1982

My fellow Americans:

Hello again. It's great to be back speaking to you over weekly radio. I hope this is the first of many broadcasts to come. I've missed these weekly visits.

Just 12 days ago, I went on television to ask your support for a bipartisan tax reform and spending reduction bill. As you'll recall, I told you I had to swallow hard to support that bill myself. I didn't like the idea of revenue increases and still don't. But to get the spending cuts which I think most of us want and which we must have to reduce deficits, keep interest rates going down, and get the unemployed back to work, we had to accept the increased revenues. But I argued then and I repeat now: Most of the revenue part of that bill was not really a tax increase at all, but a reform of existing tax laws.

The tax cut passed last year remains the biggest tax cut in history. Even with the $99 billion increase, the tax cut over the next 3 years will amount to $335 billion. The savings to the average American family this year is $400; next year it will be $788. Even more important, however, we'll reduce the deficits over these next 3 years by $378.5 billion. If we stay on course and work together, we can look to a day when we can start reducing that trillion-dollar debt. And I think you like that ``working together'' idea.

I received a letter just the other day from a lady in Florida. I hope she won't mind if I share it with you. Patricia Morgan writes that she sees unity among us again, the kind of unity we had during World War II -- we Americans, all pulling together. That's what America is. That is our power. Patricia Morgan, I couldn't agree more. American power is reasserting itself.

The day before yesterday, the Federal Reserve lowered the discount rate to 10 percent -- the lowest it has been in 2 years. Double-digit inflation, once 12.4 percent, has been for the last 7 months only 5.4 percent. The prime interest rate, 21.5 percent a year and a half ago, is now 13.5 percent and very probably going lower.

The other day, the Security Savings and Loan of Milwaukee, Wisconsin, made $100 million available for home mortgages at 11.9 percent interest. And we've just seen a week-long breaking of virtually every record on Wall Street for trade in stocks and bonds.

No, we're not out of the woods yet. But we can maintain this momentum, reopen factory gates, rebuild America, and make this country number one again -- not overnight, of course, but slowly, surely, we can do it. It all hinges on one question: Do we as a nation have the unshakable determination to get Federal spending under control once and for all? With 20 unbalanced budgets in the last 21 years, the burden of proof is on us.

We need a constitutional check against red-ink spending. Four of five of you support this idea. The Senate recently passed a bill that takes us one step closer to such a constitutional amendment. It is now up to the House leadership to make sure the full House votes on this issue as soon as possible in this session of the Congress. If not, you, the voters, will have an opportunity in November to make your feelings heard about that.

On the subject of spending, though, I can't wait until November. A few days ago a supplemental appropriations bill to fund several programs and agencies for the rest of this fiscal year was sent to me for signature or veto. The legislation contained funding to meet payrolls of the Department of Defense and other Federal agencies. It also included a vital new program we've sought that is essential to our hemispheric solidarity and security -- the Caribbean Basin Initiative. But it also contained funding for several things I've vetoed already as being unnecessary and was almost a billion dollars over budget for domestic programs.

We've gone on record as committed to reduce projected deficits by $380 billion over the next 3 years. I believe that commitment begins with holding the line on a budget that has little more than a month to run. So even though it means delay in getting legislation I believe is vital to our nation's welfare, I have therefore vetoed that supplemental appropriations bill.

Until next week, thanks for listening, and God bless you.

Note: The President spoke at 9:06 a.m. from Rancho del Cielo, his ranch near Santa Barbara, Calif. As printed above, his address follows the text of the White House press release.