Radio Address to the Nation on a House Budget Proposal

March 19, 1983

My fellow Americans:

Tomorrow at 11:30 p.m. is the first day of spring, and it coincides with an important change in our economy. A season of hope is giving way to a season of progress. We're seeing the proof that our great national struggle to make our economy well again is beginning to pay off. Yes, we have a long way to go, but factories are reopening, workers called back, production in housing, autos, and steel picking up, and new breakthroughs in high technology busting out all over.

America is moving forward. The economy is growing stronger -- and stronger than most people, including ourselves, predicted.

The question is no longer will we have recovery, but how long will recovery last? It's been nearly 20 years since the United States enjoyed a long-lasting economic expansion that didn't trigger ruinous inflation and high interest rates. We're trying to build that kind of recovery now. We can have it if we stick to common sense and don't go back to the big spending and taxing addiction that brought this economy to its knees in 1980.

Unfortunately, it's still true that the more things change, the more they stay the same. America is on the mend, but this recovery could be stopped dead in its tracks if big spenders in the Congress have their way. I was greatly encouraged when we had some bipartisan success on a couple of sticky problems. But unfortunately, those who place their faith in big government and heavy spending reverted to type.

Right now, House liberals are pushing a budget -- the so-called liberal Democratic budget -- that, if implemented, would reverse the progress we've made and wreck our program to rebuild the economy. They want to throw out the window much of the domestic budget savings we've achieved over the last 2 years. And they would go much further, seeking $181 billion in higher domestic spending over the next 5 years, excesses that would send the budget, prices, and interest rates soaring out of control and our economy into a tailspin.

To cite just one example, Medicare would be driven into bankruptcy by the failure of their budget to address its problems. Our proposed budget meets the needs of our people without bankrupting the system.

Now, how do they propose to pay for their reckless binge? Two ways: by compromising America's defense security and by slapping massive new tax increases on every working family. Ignoring the Soviets' tremendous advantage in military forces, the liberals would cripple our efforts to modernize America's defenses. To put it bluntly, their budget gambles with our security and safety. Their proposed $163 billion cut in defense spending over the next 5 years would put the United States right back in the position of military vulnerability we were in after a decade of neglect in the 1970's.

We were shocked to learn when we got here that we had so many ships that couldn't leave port, planes that couldn't take off, and helicopters that couldn't stay aloft -- all of this because of our lack of spare parts, sometimes of crew, inability to keep things repaired, or shortage of fuel.

We've begun to do something about that, and we've made real progress with our investment in peace through strength. But passage of the liberal budget would seriously undermine our rebuilding progress. Here are just some of the things that we might have to do if they have their way: deactivate one active and one reserve division; decommission one entire carrier battle group and some two dozen other ships; deactivate three Marine Corps fighter squadrons; deactivate two active and two reserve Air Force tactical fighter wings and six continental U.S. air defense squadrons; terminate major weapons programs from each service; sacrifice hard-won gains in readiness and sustainability by cutting our budgets for major repairs and ammunition by 25 percent and by cutting back on troop exercises and training.

Such cuts would send the worst possible signal to the Kremlin. They would remove Soviet incentives to negotiate arms reductions with us because we'd be telling them, ``Stand firm, the United States will disarm itself.''

Remember, they would do this on the pretext of reducing the deficit. They would really be doing it so they could increase spending on other things by $181 billion.

The other part of the liberal budget is a huge $315 billion tax increase on wage earners. And here, too, they would pretend to reduce the Federal deficit, but by putting you deeper in the hole. That never works, and nothing could be more unfair or less compassionate. Their unfair tax increases would put a choke hold on Main Street America. They would eliminate the third year of your tax cut, which provides maximum benefit to families earning between $10,000 and $50,000, the very same families they claim we're hurting. But they are the families who will benefit most by the July tax cut.

They also want to eliminate our historic reform of tax indexing. Indexing will protect you from being pushed into a higher tax bracket when you get a cost-of-living raise. Indexing prevents government from stealing a greater percentage of your earnings and leaving you with less purchasing power. And indexing helps low- and medium-income wage earners the most for one simple reason: The rich are immune to bracket creep. They're already in the top tax brackets. Indexing won't help them a bit.

Attempts to take away the third year of your tax cut and indexing are simply gimmicks so they can spend more of your money. A typical median-income family would have to pay $3,550 in higher taxes through 1988.

The people who want to do this are the same ones who left us with 12.4 percent inflation in 1980 and the highest interest rates in more than 100 years.

Well, let me make one thing plain: After all our national struggle to reduce inflation, to begin controlling a government which grew bloated at your expense, to bring down interest rates and make the dollar worth something again; after helping you to increase personal savings, worker productivity, and our industrial and military strength; after winning the fight to lower your taxes so we could restore hope and build new incentives into the economy -- after all these hard-won victories earned through the patience and courage of every citizen, I don't want America's recovery and security to be sacrificed on an altar of discredited hand-me-down theories. And if you'll help us, they won't be.

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

Note: The President spoke at 12:06 p.m. from Camp David, Md.