Remarks at a White House Meeting With Members of the National Governors' Association

February 25, 1985

Thank you all for coming today. I want you to know I can sympathize with what you're thinking. I was once a Governor visiting the White House. And I can remember sitting where you're sitting and looking around and thinking I could be happy here. [Laughter] But it isn't always roses. [Laughter]

Washington can get pretty cold, and sometimes I really do miss California -- California's sandy beaches and the California sunshine and the California surplus. [Laughter]

If I might be serious for a moment, I do want you to know that we've asked you here because I do welcome your advice on the three major questions that currently confront me: what must be done to keep our economy strong, what is needed to keep our nation secure, and what went wrong in Minnesota. [Laughter]

Really now, I do want to be serious. I noted last week in my press conference that we're enjoying the strongest economic expansion since the Korean war and that our first duty now is to prolong and protect this expansion. We intend to do this by carrying out the mandate delivered November 6th by the American people, the terms of which I think were quite clear. We seek the full cooperation of the Congress in moving forward now on this agenda and keeping our promises.

First, our administration proposes to freeze overall Federal program spending at last year's level, to cut $51 billion out of programs in need of restraint, to reduce spending by half a trillion dollars over the next 5 years.

And these proposals are rooted both in economic necessity and common sense. There's simply no justification, for example, for the Federal Government, which is running a deficit, to be borrowing money to be spent by State and local governments, some of which are now running surpluses -- surpluses resulting from your leadership and a recovery that was brought on by this administration -- its recovery plan, I should say.

I ask here particularly for your help and understanding, not as a Republican or a Democrat, but in a spirit of partnership, as one chief executive to another.

I know the States still have their problems. Those of you from the farm States know what I mean. I was Governor of a State with a huge agricultural industry, not to mention the fact that I was born in farm country and got my first job in a farm State. I know what you're going through; things are very tough for you and your farmers. And together, we have to do something about that.

But it's also true that many of your States are in better fiscal shape today because of the courage that you showed and the hard decisions you made during the recent recession. I hope you can understand that these tough calls have to be made now at the Federal level.

And it's up to us to show the same kind of fortitude many of you have shown in the past. And this I intend to do. And I need your help in making the Congress and the public understand that the time has come for budgetary restraint and deficit reduction.

Second, we want to solidify the gains we've already made by institutionalizing reforms against government excess, reforms that will prevent the burden of government from falling so heavily on future generations. We want to take a lesson in federalism and give the Presidency that same powerful tool that 43 of you Governors use to fight pork-barrel items in catchall appropriations -- the line-item veto.

We also want to do what 49 States have done in some form. We want to adopt the wisdom understood in every American household: that government shouldn't live beyond its means, that it shouldn't spend more than it takes in. We need that balanced budget amendment. And I'm pleased to see that your executive committee yesterday included language calling for both a balanced budget amendment and a line-item veto authority.

It's especially pleasing for me to see Republicans and Democrats working together. In that same spirit, we can achieve our mutual goals of continued economic growth and declining deficits.

Third is tax simplification. We want it this year; so do the American people. The present tax code burdens some of our citizens too heavily while permitting others to avoid paying their fair share. It makes honest people feel like cheats, and it makes cheats pose as honest citizens. It allows the underground economy to thrive and wastes millions of man-hours on needless paperwork and regulations. It drives money needed for growth, investment, and jobs into unproductive tax shelters. It acts as the single biggest obstacle to enterprise and economic expansion.

To put it simply, our tax system is unfair, inequitable, counterproductive, and all but incomprehensible. I've mentioned before, and this is absolutely a fact, that even Albert Einstein had to write to the IRS for help with his Form 1040. We want to end the trauma and tangle of April 15th, and let's do it this year.

Something else to keep in mind: In 1981, during the debate over our tax bill, we pointed out that the most important effects of reducing tax rates were sometimes not easily quantified or immediately apparent; that its very passage could send out a subtle message and create long-term changes in a political or economic culture that are infinitely more important. So, we have before us a tremendous opportunity to further the spirit of enterprise and growth, to accomplish the greatest deregulatory task of them all, and to haul ourselves out of the morass that is the Federal tax code. Let's get started.

Lots of people told you a few years ago that passing our budget cuts, or tax cut bills, would mean less revenue for you in the States, and some were even saying the States would go bankrupt. Well, all of you know how much truth there was to that. Growth begets growth; hope begets hope. If we can get on with phase two -- those budget cuts, so we can steadily shrink the deficit; the line-item veto and constitutional amendment on balancing the budget; and that tax simplification plan -- we will be sending out a message of hope and growth, whose potential for good is incalculable.

And let me conclude with an aside about another subject that's very dear to my heart -- that of private sector initiatives. We've seen a real surge in them during the last few years. Businessmen are adopting schools, corporations are supporting nonprofit organizations, and record numbers of volunteers are providing for community needs. This growing public-private partnership strengthens our State-Federal partnership.

In closing, I would like to compliment you, the Governors, and especially Governors Carlin and Alexander, for providing the leadership for this enhanced bipartisan partnership.

Thank you.

Note: The President spoke at 11:32 a.m. in the East Room at the White House. In his remarks, the President referred to Governors John Carlin of Kansas and Lamar Alexander of Tennessee, chairman and vice chairman, respectively, of the association.