Radio Address to the Nation on Economic Growth and Budget Reform

 

December 13, 1986

 

My fellow Americans:

 

With the New Year just a few weeks away, Washington is starting to get ready for the 100th Congress, which will be sworn in this January. The most important challenge facing that Congress will be joining with us in keeping a growing America on the road to a brighter future, the road that you and I and all Americans started on just 6 years ago. That was when we said that the way to make America grow was not by feeding government more of your tax dollars but by the way that America has always grown: through the ingenuity, energy, and determination of the American people. Together we set out to cut your taxes and cut the growth of government spending so that you could get on with the important work of building a better future for yourself, your family, and all America.

 

We first cut tax rates with our 1981 tax cut. Since the lower tax rates in that bill took effect, America has created over 12 million new jobs. We've had 48 straight months of economic growth and one of the longest periods of uninterrupted growth in the last 50 years. And after a decade-long decline, the American family's real income has been rising again and rising faster. Yes, thanks to our first tax cut, there are more and better jobs, more new businesses, and more new opportunities in America today than ever before in our history. But that's just the beginning; because earlier this year, with your help, Congress pushed aside the special interests and the tax-and-spend crowd, rolled up its sleeves, and shaped the tools that will help you and all Americans build on that record. That's when Congress passed the new tax reform bill, which will cut the top tax rate from 50 percent to 28 percent and for 8 out of 10 Americans will mean a top rate of no more than 15 percent. For the 4 years since our first tax cut found its footing, the American economy has been climbing to the mountaintop. With tax reform, America is going to shoot for the stars.

 

That's why I was disappointed this week to hear some talk from the new Congress that we should stop the climb, turn around, and start back in the direction we've come from. Even before they take their oath of office, some in the new Congress are talking about breaking faith with the American people and taking back part of tax reform before it has taken effect. Yes, they say that to reduce the deficit they want to keep some people's tax rates high. Well, we know where that road leads. First, they take one step towards raising taxes and then another and then another, and pretty soon every family in America is paying more to the Government again and we're back to the days of high taxes and no economic growth. Well, you can be sure I'm not going to let that happen. I hope that instead of trying to return to the tax-and-spend policies of the past, the new Congress will work with us in getting the growth of Federal spending under control. We've begun to make progress here, too. The figures are coming in now for the spending the Government is actually doing this year, and the news is good. When this year is ended, the deficit will be down by $50 billion. Yes, this year, for the first time in two decades, the Federal Government will spend less, after taking out inflation, than it did last year. That's an historic step on the road to a balanced budget, and it couldn't have happened without the Gramm-Rudman legislation.

 

Now it's time to take a second step. On January 5th we will send next year's budget up to Capitol Hill. It'll be the Federal Government's first trillion-dollar budget request. It will be lean enough to meet the Gramm-Rudman deficit targets, but it will also meet the Government's commitments. We will be spending more than ever before in such areas as support for America's elderly, law and drug enforcement to protect America's young people, and health care for America's finest -- for our veterans. And yet in the coming budget, after taking out inflation, the Federal Government will spend less in the coming year than it will this year. That will be 2 years of real falling spending. We in the administration have worked hard to meet the new, earlier deadline for sending this budget to Congress. I hope Congress will work just as hard to meet its required deadlines and not let them slip by, as has happened too many times in the past. And I hope the new Congress will take a constructive approach to this firm but fair budget. We're bound to disagree here and there, but let's work together for the good of the country to iron out our differences.

 

The leadership of the outgoing 99th Congress gave America lower tax rates and began the process of putting the lid on spending. As we look to the new year, this is the challenge for the leadership of the incoming 100th Congress: to build on that record and help lead America into the future. I hope they'll accept that challenge.

 

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.