Radio Address to the Nation on the Fiscal Year 1986 Budget

March 2, 1985

My fellow Americans:

Perhaps you've noticed, as I have, an interesting change in the country in recent weeks. All last year, right through the election and into January, we witnessed a nonstop barrage in speeches, commentaries, and editorials about the dangers of deficits and what must be done to reduce them. I was actually becoming hopeful that new courage was taking root, hopeful that a new consensus to cut Federal spending growth was even emerging among those who've labored a lifetime to expand government size and power.

That was a hasty judgment. For just 1 month ago, the mood of the born-again budget balancers abruptly changed. Now they're suffering from a crisis of faith.

What caused this sudden change of heart? We submitted our budget to Congress, a budget designed to do just what we pledged during the election: tackle the deficits by cutting spending where it's wasteful, where it is not urgent, and where it subsidizes some people at everyone else's expense.

Many of its proposals follow the spirit of recommendations by the Grace commission, some 2,000 citizens who compiled a report on how to cut spending growth without harming the needy or impairing any essential purpose of government. For example, the Small Business Administration has made subsidized loans to only a fraction of the small business community, while the remainder relied on commercial rate financing. Yet, at a time when small business is thriving, many of these subsidized loans are in or near default. We propose ending such subsidies for the benefit of taxpayers at large.

Subsidizing Amtrak costs taxpayers $35 per passenger every time a train leaves a station. But that's not the only unwise transportation subsidy. Why, for instance, should the Federal Government be forcing taxpayers in, say, Colorado to subsidize subway fares in New York? Why should any taxpayer subsidize the operating costs of the Washington, DC, transit system, an area with the second highest per capita income in America?

Yet these and other proposed budget savings have been greeted by a chorus of boos from guess who? -- the very people who told us again and again that tough action on deficits couldn't wait. Today they say now is not the time.

Consider the political spectacle of recent days. The House Budget Committee, with its members insisting the deficit must be reduced, travels the country inviting special interest groups to resist every proposal for budget savings. The president of the U.S. Conference of Mayors accuses us of abandoning the Federal Government's commitment to urban America, when the growing noninflationary economy has been creating almost 300,000 jobs a month and record revenues for State and local governments.

Leaders of four higher education associations shiver outside the Department of Education to symbolize, as they put it, that higher education is being frozen out of the budget. Their word ``frozen'' is meant to describe a proposal that would spend more than $7 billion more than in 1982 and '83 and nearly three times what it was just 10 years ago.

Members of the business community oppose the end of subsidies from the Export-Import Bank. Farm State Senators push multibillion-dollar bailouts for banks and farmers, and one Member even rebukes proposed cutbacks in spending on opera and music in our budget for the National Endowment for the Arts.

This past week the Nation's Governors were in Washington. To their credit, they urged Congress to pass the line-item veto and the balanced budget amendment. But they adopted a resolution that would disallow cost-of-living increases for Social Security recipients and rule out any real increases in defense, yet, as California's Governor Deukmejian pointed out, still leave a higher deficit while paving the way for tax increases.

I won't deny all the groups I mentioned represent valid interests, which may seem compelling. But there is a larger interest to represent, more compelling and urgent than all the rest -- the freedom and security of American taxpayers who must not only work, save, and invest to pull our economy forward but also pay all the bills for everything this government does.

Well, as long as I'm President, we're not going back to the days when America was fast becoming an impotent democracy, too weak to meet defense commitments or to resist Communist takeovers and, yes, too weak to stop a Federal spending machine from impoverishing families and destroying our economy with runaway taxes and inflation.

We're asking Congress to have the political courage to cut $50 billion by Easter. If there isn't enough courage to approve these cuts, then at least give me the authority to veto line-items in the Federal budget. I'll take the political responsibility. I'll make the cuts, and I'll take the heat.

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

Note: The President spoke at 12:06 p.m. from the Oval Office at the White House.