Radio Address to the Nation on the Federal Budget

July 6, 1985

My fellow Americans:

I'd like to take a few minutes out of your Fourth of July weekend, if I might, to talk about business. It's summer in Washington, and as sure as the heat and humidity, we could have predicted another seasonal occurrence: Once again, the budget process has broken down. Even with dangerously large deficits looming over the horizon threatening to destroy the economic progress we've made, it's still business as usual when it comes to the budget. We can only hope that the House will cooperate with us in doing what is right for America.

Unfortunately, as it stands now, the budget proposed by the House is simply not a serious document. At best it could win a prize for creative bookkeeping. Huge so-called savings are simply assumed or invented, funds are juggled back and forth between accounts to show phony deficit reductions, and billions of dollars of expenses are just wished away. Let me give you one example. Right now the Government charges the oil companies for their offshore leases -- sort of a yearly rent for the use of Federal property. Well, the House decided that they would take the next 4 years of revenue from certain offshore leases and count it all in 1986. Now, sure, that reduced the 1986 deficit by $4 billion, but it increased our deficits in later years by exactly that same amount.

A full quarter of the so-called deficit reductions in the House budget are gimmicks like this. Most of the rest comes from raiding the national defense. There is nothing proportionate or fair in the House's budgetary assault on defense. They propose making over half their reductions in this one area, which accounts for less than a third of total spending. What the House Budget Committee calls a defense spending freeze is really a drastic cut requiring a reduction from current plans in research and development, construction, and procurement of 19 percent in 1986, 23 percent in 1987, and 28 percent in 1988. If the House budget were adopted, it would deliver a severe blow to our national security.

The Senate has proposed a budget that is responsible and fair, that holds real defense spending constant and makes the necessary structural changes in domestic spending that will enable us to substantially reduce these deficits. But when the Senate and House budget conferees met, it quickly became clear that the House refused to give up its gimmicks or consider real cuts in domestic spending. If the pattern of past years repeats itself, we can expect the obstructionists to keep the process stymied until the final night before the deadline when they'll go into a budgetary feeding frenzy, loading up huge spending measures with goodies for every special interest group in sight. Well, enough is enough. We refuse to make a choice between a budget that threatens our national security and a spending orgy that undermines our economy.

Of course, as they do every year, some in Congress are using this annual collapse of the budget process as an excuse to call for a tax increase. Well, I've promised before and I will repeat that promise today, I will veto any tax hike that comes across my desk, no matter how it's disguised. And I'm glad to say that I have more than enough votes pledged in the House to sustain that veto. I have some advice for those who talk about tax hikes: Save your breath. I'm going to hold their feet to the fire on this budget until they do the right thing and get government spending under control.

I'm happy to be able to report that the Senate Judiciary Committee will be voting on a bill next week that could put some discipline back in the budget process: the balanced budget amendment. Why shouldn't the U.S. Government be held to even the minimum standards of accountability that we demand of the smallest commercial bank? It's true that amending the Constitution is a lengthy and difficult procedure. Well, that's all the more reason to start right away. More immediate relief would come from a line-item veto that would enable me to veto individual budget items. And that is the way to cut the pork out of the massive appropriations bills that Congress sends me, without vetoing that part of the bill -- essentially human needs and our national security. If Congress can't or won't stand up to the special interests, give Presidents the line-item veto. This President would be glad to take them on.

By cutting taxes and stamping out inflation, we've put our economy back on the track of strong and solid growth. America's like a house that we build stronger and prouder every day. But right now, the American economy has termites. It's time to clean them out once and for all. Please tell your Representatives not to waste more time or money, but to come back here ready to put our fiscal house in order and make government live within its means. We must reduce the deficit and make a start on achieving a balanced budget.

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

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