The President. Thank you all very much. Thank you, President Tommy Todd, Doris Gosnell, Governor Orr, Mayor Hudnut of Indianapolis, Lieutenant Governor Mutz, Congressman John Myers, and all of you members of this great and growing organization.

Listening to that warm introduction, feeling your enthusiasm shake this hall, I could only think, I've found it; I'm in Hoosier Heaven. You know, I grew up not too far from here hearing the song about Indiana's Wabash Cannonball, but I'd say I've just heard the sound of an all-American cannonball.

Well, I'm happy to be with you here today, for my heart is with you every day of the year. I remember addressing a group just about 4 years ago at this time, down in San Antonio, Texas, and I asked for their help to put the pieces of a broken economy back together. They were and are a very special group of people. They're heroes who live in the frontiers of American life. They're people who behold in the dawn each day a dream far away, to strive for and win. They're men and women who laugh at folly and fear and who see setbacks not as excuses to quit but as spurs to struggle and sweat even harder to carry on. They are the Jaycees. They stand for opportunity, and they're leading the economic comeback of the United States of America.

But before I go on with my remarks for today, let me speak to a concern that I know is on all your minds -- our American prisoners in Beirut. We're continuing to do everything that we can to bring all credible influence to bear, to get our people freed and returned home safe and sound. But let me say we must not yield to the terrorist demands that invite more terrorism. We cannot reward their grisly deeds. We will not cave in.

Audience. [Chanting] U.S.A.! U.S.A.! U.S.A.!

The President. Thank you very much.

Well, now, to get on with our visit here today, in 6,500 chapters, 270,000 members strong, you are leaders in your communities, movers and shakers in get-out-the-vote drives, in raising funds for muscular dystrophy -- as you've just been told -- in helping to locate missing children, and problem solving of every sort. An organization for men only, you opened your doors to more than 30,000 women members, and today we salute all of your new Jaycee members.

Four years ago, I came before you to say, If you think you're better off with the high taxes and runaway monster government of the past, then go ahead and oppose our new program, but if you're ready to try something new, if you're ready to tell Washington, DC, ``No more business as usual, because we're going to make America great again,'' then lend us your help and commit your lives, and you did that.

You joined us and gave your all because we believe in America, not the America of special interests, bureaucrats, or the elite, powerful, and well connected, but the America of hard-working families who sustain their communities, who abide by the law, who not only pay their own bills but every cent spent by government as well. Jefferson's vision of unalienable rights of life, liberty, and the pursuit of happiness, of government's responsibility to grow, not for its own sake but to provide the ultimate in individual freedom -- that is the commitment of this administration.

So, we set out together to give the words ``freedom,'' ``incentives,'' and ``growth'' new life. And what have we accomplished? Well, not all that we want, by no means. But while the sourpusses predicted failure, inflation went from 12.4 percent to 4 percent; the prime rate from over 20 percent to 9\1/2\ percent as of yesterday -- [applause] -- that's the lowest level in 6\1/2\ years for that. Government stopped engorging itself with the people's earnings. Nearly 8 million new jobs were created, more jobs per month than Europe created in the last 10 years; 635,000 new business incorporations last year; zero growth turned into 30 straight months of economic expansion and sent consumer confidence to its highest levels since 1966.

My friends, thanks to you, a no-hit, no-run, no-win team is working its way back to championship form. And you know something? Winning is just the beginning, because momentum creates more momentum. We're not turning back to that failed, unhappy past. This is the moment to push forward together, to get the job done right, to change our lives for the better and change America forever.

So, like in 1981, I've come to ask a simple but crucial question for our future: Are you with us, can we count on your support again? [Applause] Well, thank you very much.

I hope you agree that a Congress serious about cutting deficits will pass the budget savings that we've asked for and will give this President the same authority that 43 Governors already have -- authority to line-item veto budget-busting items in appropriation bills.

And if we're ever going to handcuff the big-spenders, we can't stop with a line-item veto; we must go all the way and pass a constitutional amendment mandating government may spend no more than government takes in.

Now, I've come today to speak to you on another subject; I've come to speak about our tax system. I pray that this won't send shudders through the hall. But then I wouldn't be surprised. A system with 14 different tax brackets that stifle hard work and success; a system that has singled out families for cruel and unusual punishment; a system that caters to the powerful few with loopholes galore, but lets working people take it on the chin -- that system is unfair at its core. It has become public enemy number one. It's earned a revolt, and it's time we tore it down.

Trying to tackle the great challenges of our future with today's outdated tax system -- that's a little like trying to win the Indianapolis 500 on a bicycle. [Laughter] We're proposing a plan that will say, if I may paraphrase the start of that race: America, start your engines! We're proposing a plan that will tell 238 million Americans -- go for it!

We would get rid of the current 14-bracket system and replace it with a simple 3-bracket system of 15, 25, and 35 percent. Those brackets would apply to your taxable income, not to your gross income. And these lower rates would mean you could keep more of each additional dollar that you earn or save. We call it America's tax plan because it will mean fairness and tax relief for the majority of families, individuals, and businesses in every region of the country.

Families are the bedrock of our society, and they're going to receive long-overdue relief. It's a national scandal that Washington sat back for over three decades and let the value of the personal exemption collapse. Well, we're putting an end to benign neglect. Of immense importance to working and middle class families, we will nearly double -- to $2,000 -- the personal exemption for every taxpayer and dependent. The exemption will be indexed to inflation to prevent any erosion.

We would raise the standard reduction [deduction] for joint returns to $4,000. And to end unjust discrimination against homemakers, we would nearly double -- to $4,000 -- the amount every couple can put into individual retirement accounts and deduct from their taxable income. We're not promoting one kind of family over another; we just want all families treated the same.

I think you know who gets the lion's share of the credit for creating nearly 8 million new jobs in the last 2\1/2\ years. When it comes to producing jobs, American small business is king, and small businesses will remain king because America's tax plan is the biggest jobs creation bill in history.

Reducing personal tax rates will give a shot in the arm to small businesses which aren't incorporated; so will reducing the maximum corporate tax rate -- now 46 percent -- to 33 percent, with most small corporations paying lower corporate tax rates which will be progressive from 15 percent to 33 percent. And reducing the top tax rate on capital gains will fuel the high-risk ventures that can pay off with great leaps in productivity and new jobs and technologies.

We want every man and woman to have their chance to stand among the new heroes of our age -- the American entrepreneurs. Entrepreneur -- you know, that's such a nice word. That's a French word -- it means Jaycees.

As we open the windows of opportunity for all, we're going to start shutting the doors on special privileges that enable some to avoid paying their fair share. I don't think we need to keep subsidizing $100 lunches to stay competitive in world markets. I don't think the great majority of taxpayers should have to subsidize the State and local deduction for the wealthy few in a handful of high-tax States. And I don't think the loopholes like jojoba bean shelters, windmills, racehorse writeoffs, and Cayman Island trusts are the foundation for a lean and mean America in the eighties and nineties and 21st century.

These shelters aren't justified. They cheat the great majority of unsheltered taxpayers who must make up the difference with higher tax rates. And it's about time that we pulled our investment money out of unfair subsidies, out of shelters, out of foreign tax havens, and invested that money in America's future. It's time that we all pulled on the same oar so we could all go forward together, and nobody gets left behind.

I know the special interests and their lobbyists are regrouping. They're already swarming like ants into every nook and cranny in Congress. But the American people have their lobbyist, too -- you're looking at him.

Our plan will not increase the deficit. It is not a tax increase nor will I ever permit it to become a tax increase. I will veto any tax increase the Congress sends me, and I don't usually threaten vetoes. I say I'll wait until I see what comes before me on my desk. As for a tax increase -- I know what that is, I'll veto it already.

But America's tax plan will mean that every income group's tax burden will fall. Every group in every region will be better off. And I predict that after all is said and done, the Congress will pass this historic plan because it is profairness, profamily, progrowth, and most important, it is profuture.

Too many pundits haven't calculated what America's tax plan will mean for our future. In a word, lower tax rates mean new opportunity, a whole world of opportunity for people. If you earn more, if you're promoted to a better job, if you're able to save some money and invest it, then fewer of those dollars will go to line Uncle Sam's pockets and more will end up in your wallets where they belong. That's the key difference from the tax system we have now. And when you see that bright green light telling you, go ahead, take a risk, shoot for your dreams and do more with your lives, it'll be America that gains the most, America that becomes more competitive, and yes, America that lights up the sky with economic fireworks that spell ``U.S.A. Number One.'' I've often said and believe it must always remain our goal: We cannot be satisfied until the United States can outproduce, outcompete, and outsell anybody, anywhere in the world.

Well, America's tax plan will enable us to do just that. Tax rates are like prices for producing, saving, and investment. And history shows that in the case of two countries, A and B, and the tax rates are cut in B, then capital will flow from A to B. By bringing down our prices, by making them cheaper, well, than virtually anywhere in the world, we're going to create powerful incentives for people to invest, produce, and save in America. We're going to create powerful incentives for people all over the world to do their shopping and create jobs in America's stores ahead of any other store.

We're going to contribute to another surge of venture capital and entrepreneurial activity. We're going to make it possible for tomorrow's industrial giants to be born in America, born in a small business that may begin in the dream of one Jaycee.

This is the future that we can invent and create together. And we shouldn't settle for less; our dreams can be real. I'm convinced that getting this program passed will be the best thing we can ever do for ourselves. Help us get it passed by Thanksgiving, and then we'll give America the best Christmas present we've ever had.

Now, some people, and I don't question their intentions, are already fixing to pick our plan apart. For example, some say that to make it even fairer, we must raise the top tax rate higher than 35 percent so the rich pay more. But that argument misses the central point of what we're doing. We're not lowering the top tax rate to 35 percent so the rich will do better; we're lowering the top rate to 35 percent so that every working American will have a better chance to get rich.

There's something else they forget. Nearly 15 million small businesses pay their taxes by the personal rates, so raising the top tax rate is a tax-increase-in-waiting for every one of them. I think the Congress should hear what you think about this, but you're going to have to speak up because they're 600 miles away.

A potential tax increase on millions of American small businesses -- now, is that your idea of fairness?

Audience. No-o-o!

The President. I'm sorry, your answer didn't quite reach DC. You said what? Is it -- --

Audience. No-o-o!

The President. Is a tax increase on small business your idea of strengthening growth and our future?

Audience. No-o-o!

The President. Well, then maybe you'd like to tell Congress you support our plan -- you want it passed. America should unite and America should go for it!

There's no limit to the good we can do, for there's no limit to the goodness in America's heart and spirit. You know this; you're the ones who show us every day in places like Anderson, South Carolina, where Jaycees built a Vietnam war memorial to the 28 young men who gave their last full measure of devotion in that war; in Stevens Point, Wisconsin, where they've bought a computer that is helping cerebral palsy victim Don Zivney to speak after 22 years of silence.

You remind us what I recently told a talented group of students in Atlanta, Georgia. As important as the creation of wealth is to generate jobs and a brighter future, we don't want our children to grow up believing wealth and material comforts should be their main goals in life. It isn't looking out for number one that counts most; it's loving our neighbor, and we have that on pretty good authority.

This is America's tradition from our first days when the pioneers would get together and build each other's houses. They called it houseraising. Well, that was long ago, but it's still going on.

Every time someone helps a friend down and out, helps a lonely stranger hungry and cold, that's a houseraising. Every time someone gives time or money to support their local police, help the handicapped, or improve their library or school, that's a houseraising, too. And every time a group of people get together and vow, don't tell us how big the problem is, the Jaycees can solve it, that's a houseraising.

I thank you for this wonderful time that we spent together. I wish you an America rich in success, rich in our kindness and love for each other. And if I must say goodbye, and I do -- because saying goodbye to the Jaycees is pretty hard to do -- then I'll do it by leaving you some words I almost feel were written for you -- they're from a very noted poet in our background. He said:

Believe in your mission, Greet life with a cheer;

There's big work to do, and that's why you're here;

Let the world be better for you, and at last, when you die;

Let this be your cry, Come on my soul, carry on.

Thank you for the miracles you do every day. God bless you all, and God bless America.

Note: The President spoke at 1:53 p.m. at the Indiana Convention Center. In his opening remarks, the President referred to Tommy Todd, president of the U.S. Jaycees, and Doris Gosnell, president of the U.S. Jaycees Women.