Remarks at a Meeting With Republican Members of the House of Representatives on a House Budget Proposal

March 22, 1983

Well, to get the meeting under way -- and I don't want it to remain a monolog. It's going to be a dialog when we get going. But the subject of the meeting is the budget that was passed on a straight party-line basis of the Democrats out of their committee, their version of a budget which they have declared is a restatement of Democratic tradition. And I'm afraid it is.

But I don't see any way that we can, with our own proposal of a budget, that there could be any effort to compromise or find a meeting ground. This budget that has been proposed by them must be defeated.

First of all, this proposal calls for an increase in taxes over the next 5 years by about $315 billion. It calls for canceling most of the gains and the savings that we've made in entitlement programs and so forth over the last 2 years. It increases over that same period of time domestic spending by -- I believe, Dave, [David A. Stockman, Director of the Office of Management and Budget] I'm right -- about $181 billion.

Increasing that spending that much, increasing the taxes that much, it also will reduce the defense budget down to a point that is some $31 billion below the defense budget that had been planned by President Carter, and which we're trying to rectify and get our defenses to recover from.

But when all that is done, they will have wound up with an $8 billion addition to the deficit for the years '83, '84. In other words, all of this will be done to simply achieve tens of billions of dollars of new spending. As a matter of fact, they have introduced some 10 new social domestic programs, in addition to reducing all the -- or eliminating the savings that we've made.

Now, the taxes that they're going to increase call for canceling the third year of the income tax cut and canceling indexing. The truth of the matter is that in both of these taxes, the bulk of them, 72 percent of one -- the third-year cut -- and 78 percent of the indexing, the savings there goes to people below the $50,000 mark. Middle-income and lower middle-income earners are the ones that will pay the bulk of that tax. Obviously, indexing is strictly for the working man and woman in this country, because they're the ones that, when they get a cost-of-living pay raise, are moved up into a higher tax bracket. Well, it can't be a benefit to the rich, because they're already in the top bracket. There's no place to push them.

And I just feel that this thing is such a throwback that we have to make it plain to the people what this would result in. This is going back to the type of government program that caused the problems that we're facing today.

Well, the main thing is we're in a recovery. There's no question about it and that the word that came out yesterday with regard to the growth in the gross national product. And to do things of this kind, the taxes would be almost $30 billion in the first year of the tax increase. That's no way to keep a recovery going. That is going to cut off recovery.

And I make one last point, and then we will turn it over just for conversation here and for more detail on this. But when we went for the tax increase that we did a year or so ago -- and many of us, as we said then, had to swallow hard to do it -- we did that on a kind of bipartisan agreement that we were going to get $3 in spending cuts for every $1 of increase in taxes. And this is a complete repudiation of that agreement to now turn around and offer this kind of a proposal.

So, again, as I say, our job -- I know we're outnumbered in the House -- but our job is to find those Democrats that I'm sure are there who are responsible and who will go along with repudiating a proposal of this kind.

End of statement.

Note: The President spoke at 2:08 p.m. in the Cabinet Room at the White House.