State of the Union Address - Feb 1993
by William Jefferson Clinton
ADDRESS BY THE PRESIDENT TO THE JOINT SESSION OF CONGRESS
The Capitol
9:10 P.M. EST
THE PRESIDENT: Mr. President, Mr. Speaker, members of
the House and the Senate, distinguished Americans here as visitors in
this Chamber, as am I. It is nice to have a fresh excuse for giving
a long speech. (Laughter.)
When Presidents speak to Congress and the nation from
this podium, typically, they comment on the full range and challenges
and opportunities that face the United States. But this is not an
ordinary time, and for all the many tasks that require our attention,
I believe tonight one calls on us to focus, to unite, and to act.
And that is our economy. For more than anything else, our task
tonight as Americans is to make our economy thrive again.
Let me begin by saying that it has been too long, at
least three decades, since a President has come and challenged
Americans to join him on a great national journey, not merely to
consume the bounty of today, but to invest for a much greater one
tomorrow. (Applause.)
Like individuals, nations must ultimately decide how
they wish to conduct themselves, how they wish to be thought of by
those with whom they live, and later, how they wish to be judged by
history. Like every individual, man and woman, nations must decide
whether they are prepared to rise to the occasions history presents
them.
We have always been a people of youthful energy and
daring spirit. And at this historic moment, as communism has fallen,
as freedom is spreading around the world, as a global economy is
taking shape before our eyes, Americans have called for change. And
now it is up to those of us in this room to deliver for them.
Our nation needs a new direction. Tonight I present to
you a comprehensive plan to set our nation on that new course. I
believe we will find our new direction in the basic old values that
brought us here over the last two centuries -- a commitment to
opportunity, to individual responsibility, to community, to work, to
family and to faith. We must now break the habits of both political
parties and say their can be no more something for nothing and admit
frankly that we are all in this together. (Applause.)
The conditions which brought us as a nation to this
point are well-known: Two decades of low productivity, growth, and
stagnant wages; persistent unemployment and underemployment; years of
huge government deficits and declining investment in our future;
exploding health care costs and lack of coverage for millions of
Americans; legions of poor children; education and job training
opportunities inadequate to the demands of this tough, global
economy. For too long we have drifted without a strong sense of
purpose or responsibility or community.
And our political system so often has seemed paralyzed
by special interest groups, by partisan bickering and by the sheer
complexity of our problems. I believe we can do better because we
remain the greatest nation on Earth, the world's strongest economy,
the world's only military superpower. If we have the vision, the
will and the heart to make the changes we must, we can still enter
the 21st century with possibilities our parents could not even have
imagined, and enter it having secured the American Dream for
ourselves and for future generations. (Applause.)
I well remember 12 years ago President Reagan stood at
this very podium and told you and the American people that if our
national debt were stacked in thousand-dollar bills the stack would
reach 67 miles into space. Well, today that stack would reach 267
miles. I tell you this not to assign blame for this problem. There
is plenty of blame to go around in both branches of the government
and both parties. The time has come for the blame to end.
(Applause.) I did not seek this office to place blame. I come here
tonight to accept responsibility and I want you to accept
responsibility with me. And if we do right by this country, I do not
care who gets the credit for it. (Applause.)
The plan I offer you has four fundamental components.
First, it shifts our emphasis in public and private spending from
consumption to investment -- initially by jump-starting the economy
in the short-term, and investing in our people, their jobs, and their
incomes over the long run. Second, it changes the rhetoric of the
past into the actions of the present by honoring work and families in
every part of our public decision-making. Third, it substantially
reduces the federal deficit honestly and credibly by using in the
beginning the most conservative estimates of government revenues,
not, as the Executive Branch has done so often in the past, using the
most optimistic ones. (Applause.)
And finally, it seeks to earn the trust of the American
people by paying for these plans first with cuts in government waste
and efficiency; second, with cuts, not gimmicks, in government
spending; and by fairness for a change in the way additional burdens
are borne. (Applause.)
Tonight I want to talk with you about what government
can do because I believe government must do more. But let me say
first that the real engine of economic growth in this country is the
private sector. (Applause.) And second, that each of us must be an
engine of growth and change. The truth is that as government creates
more opportunity in this new and different time, we must also demand
more responsibility in turn.
Our immediate priority must be to create jobs, create
jobs now. Some people say, well, we're in a recovery and we don't
have to do that. Well, we all hope we're in a recovery, but we're
sure not creating new jobs. And there's no recovery worth its salt
that doesn't put the American people back to work. (Applause.)
To create jobs and guarantee a strong recovery, I call
on Congress to enact an immediate package of jobs investments of over
$30 billion to put people to work now, to create a half a million
jobs. Jobs to rebuild our highways and airports, to renovate
housing, to bring new life to rural communities and spread hope and
opportunity among our nation's youth. Especially, I want to
emphasize after the events of last year in Los Angeles and the
countless stories of despair in our cities and in our poor rural
communities, this proposal will create almost 700,000 new summer jobs
for displaced, unemployed young people alone this summer.
(Applause.)
And tonight, I invite America's business leaders to join
us in this effort so that together we can provide over one million
summer jobs in cities and poor rural areas for our young people.
(Applause.)
Second, our plan looks beyond today's business cycle
because our aspirations extend into the next century. The heart of
this plan deals with the long-term. It is an investment program
designed to increase public and private investment in areas critical
to our economic future. And it has a deficit reduction program that
will increase the savings available for the private sector to invest,
will lower interest rates, will decrease the percentage of the
federal budget claimed by interest payments, and decrease the risk of
financial market disruptions that could adversely affect our economy.
Over the long run, all this will bring us a higher rate
of economic growth, improved productivity, more high-quality jobs,
and an improved economic competitive position in the world. In order
to accomplish both increased investment and deficit reduction,
something no American government has ever been called upon to do at
the same time before, spending must be cut and taxes must raised.
The spending cuts I recommend were carefully thought
through in a way to minimize any adverse economic impact, to capture
the peace dividend for investment purposes, and to switch the balance
in the budget from consumption to more investment. The tax increases
and the spending cuts were both designed to assure that the cost of
this historic program to face and deal with our problems will be
borne by those who could readily afford it the most. Our plan is
designed, furthermore, and perhaps in some ways most importantly, to
improve the health of American business through lower interest rates,
more incentives to invest, and better trained workers.
Because small business has created such a high
percentage of all the new jobs in our nation over the last 10 or 15
years, our plan includes the boldest targeted incentives for small
business in history. (Applause.) We propose a permanent investment
tax credit for the smallest firms in this country, with revenues of
under $5 million. (Applause.) That's about 90 percent of the firms
in America employing about 40 percent of the work force, but creating
a big majority of the net new jobs for more than a decade.
And we propose new rewards for entrepreneurs who take
new risks. We propose to give small business access to all the new
technologies of our time. And we propose to attack this credit
crunch which has denied small business the credit they need to
flourish and prosper. (Applause.)
With a new network of community development banks and $1
billion to make the dream of enterprise zones real, we propose to
bring new hope and new jobs to storefronts and factories from South
Boston to South Texas to South Central Los Angeles. (Applause.)
This plan invests in our roads, our bridges, our transit systems, in
high-speed railways and high-tech information systems. And it
provides the most ambitious environmental cleanup in partnership with
state and local government of our time, to put people to work and to
preserve the environment for our future. (Applause.)
Standing as we are on the edge of a new century, we know
that economic growth depends as never before on opening up new
markets overseas and expanding the volume of world trade. And so, we
will insist on fair trade rules in international markets as a part of
a national economic strategy to expand trade, including the
successful completion of the latest round of world trade talks and
the successful completion of a North American Free Trade Agreement,
with appropriate safeguards for our workers and for the environment.
(Applause.)
At the same time -- and I say this to you in both
parties and across America tonight, all the people who are listening
-- it is not enough to pass a budget or even to have a trade
agreement. The world is changing so fast that we must have
aggressive, targeted attempts to create the high-wage jobs of the
future. That's what all our competitors are doing. We must give
special attention to those critical industries that are going to
explode in the 21st century, but that are in trouble in America today
like aerospace. (Applause.) We must provide special assistance to
areas and to workers displaced by cuts in the defense budget and by
other unavoidable economic dislocations. (Applause.)
And, again, I will say we must do this together. I
pledge to you that I will do my best to see that business and labor
and government work together for a change. (Applause.)
But all of our efforts to strengthen the economy will
fail -- let me say this again; I feel so strongly about this -- all
of our efforts to strengthen the economy will fail unless we also
take this year -- not next year, not five years from now, but this
year -- bold steps to reform our health care system. (Applause.)
In 1992, we spent 14 percent of our income on health
care, more than 30 percent more than any other country in the world;
and yet we were the only advanced nation that did not provide a basic
package of health care benefits to all of its citizens. Unless we
change the present pattern, 50 percent of the growth in the deficit
between now and the year 2000 will be in health care costs. By the
year 2000 almost 20 percent of our income will be in health care.
Our families will never be secure, our businesses will never be
strong and our government will never again be fully solvent until we
tackle the health care crisis. We must do it this year. (Applause.)
The combination of the rising cost of care and the lack
of care and the fear of losing care are endangering the security and
the very lives of millions of our people. And they are weakening our
economy every day. Reducing health care costs can liberate literally
hundreds of billions of dollars for new investment in growth and
jobs. Bringing health costs in line with inflation would do more for
the private sector in this country than any tax cut we could give and
any spending program we could promote. Reforming health care over
the long run is critically essential to reducing not only our deficit
but to expanding investment in America. (Applause.)
Later this spring, after the First Lady and the many
good people who are helping her all across the country complete their
work, I will deliver to Congress a comprehensive plan for health care
reform that finally will bring costs under control and provide
security to all of our families, so that no one will be denied the
coverage they need, but so that our economic future will not be
compromised either. (Applause.) We'll have to root out fraud and
overcharges, and make sure that paperwork no longer chokes your
doctor. We'll have to maintain the highest American standards and
the right to choose in a system that is the world's finest for all
those who can access it. (Applause.)
But first we must make choices. We must choose to give
the American people the quality they demand and deserve with a system
that will not bankrupt the country or further drive more Americans
into agony.
Let me further say that I want to work with all of you
on this. I realize this is a complicated issue. But we must address
it. And I believe if there is any chance that Republicans and
Democrats who disagree on taxes and spending or anything else could
agree on one thing, surely we can all look at these numbers and go
home and tell our people the truth. We cannot continue these
spending patterns in public or private dollars for health care for
less and less and less every year. We can do better. And I --
(applause).
Perhaps the most fundamental change the new direction I
propose offers is its focus on the future and its investment, which I
seek in our children. Each day we delay really making a commitment
to our children carries a dear cost. Half of the two-year-olds in
this country today don't receive the immunizations they need against
deadly diseases. Our plan will provide them for every eligible
child. And we know now that we will save $10 later for every $1 we
spend by eliminating preventable childhood diseases. That's a good
investment no matter how you measure it. (Applause.)
I recommend that the Women, Infants and Children's
nutrition program be expanded so that every expectant mother who
needs the help gets it. (Applause.) We all know that Head Start,
a program that prepares children for school is a success story. We
all know that it saves money, but today it just reaches barely over
one-third of all the eligible children. Under this plan, every
eligible child will be able to get a head start. (Applause.)
This is not just the right thing to do, it is the smart
thing to do. For every dollar we invest today we'll save $3
tomorrow. We have to start thinking about tomorrow. I've heard that
somewhere before. (Laughter.)
We have to ask more in our schools of our students, our
teachers, our principals, our parents. Yes, we must give them the
resources they need to meet high standards, but we must also use the
authority and the influence and the funding of the education
department to promote strategies that really work in learning. Money
alone is not enough. We have to do what really works to increase
learning in our schools. (Applause.)
We have to recognize that all of our high school
graduates need some further education in order to be competitive in
this global economy. So we have to establish a partnership between
businesses and education and the government for apprenticeship
programs in every state in this country to give our people the skills
they need. (Applause.) Lifelong learning must benefit not just
young high school graduates, but workers, too, throughout their
career.
The average 18-year-old today will change jobs seven
times in a lifetime. We have done a lot in this country on worker
training in the last few years, but the system is too fractured. We
must develop a unified, simplified, sensible, streamlined worker
training program so that workers receive the training they need
regardless of why they lost their jobs or whether they simply need to
learn something new to keep them. We have got to do better on this.
(Applause.)
And, finally, I propose a program that got a great
response from the American people all across this country last year:
A program of national service to make college loans available to all
Americans and to challenge them at the same time to give something
back to their country as teachers or police officers or community
service workers -- to give them the option to pay the loans back, but
at tax time, so they can't beat the bill, but to encourage them
instead to pay it back by making their country stronger and making
their country better and giving us the benefit of their knowledge.
(Applause.)
A generation ago when President Kennedy proposed and the
United States Congress embraced the Peace Corps, it defined the
character of a whole generation of American committed to serving
people around the world. In this national service program, we will
provide more than twice as many slots for people before they go to
college to be in national service than ever served in the Peace
Corps. This program could do for this generation of members of
Congress what the Land Grant College Act did and what the GI Bill did
for former congressmen. In the future, historians who got their
education through the national service loan will look back on you and
thank you for giving America a new lease on life if you meet this
challenge. (Applause.)
If we believe in jobs and we believe in learning, we
must believe in rewarding work. If we believe in restoring the
values that make America special, we must believe that there is
dignity in all work, and there must be dignity for all workers.
To those who care for our sick, who tend our children,
who do our most difficult and tiring jobs, the new direction I
propose will make this solemn, simple commitment: By expanding the
refundable earned income tax credit, we will make history. We will
reward the work of millions of working poor Americans by realizing
the principle that if you work 40 hours a week and you've got a child
in the house, you will no longer be in poverty. (Applause.)
Later this year, we will offer a plan to end welfare as
we know it. I have worked on this issue for the better part of a
decade. And I know from personal conversations with many people that
no one -- no one wants to change the welfare system as badly as those
who are trapped in it. (Applause.)
I want to offer the people on welfare the education, the
training, the child care, the health care they need to get back on
their feet, but say, after two years, they must get back to work,
too, in private business if possible, in public service if necessary.
We have to end welfare as a way of life and make it a path to
independence and dignity. (Applause.)
Our next great goal should be to strengthen our
families. I compliment the Congress for passing the Family and
Medical Leave Act as a good first step. (Applause.) But it is time
to do more. This plan will give this country the toughest child
support enforcement system it has ever had. It is time to demand
that people take responsibility for the children they bring in this
world. (Applause.)
And I ask you to help to protect our families against
the violent crime which terrorizes our people and which tears our
communities apart. We must pass a tough crime bill. (Applause.) I
support not only the bill which didn't quite make it to the
President's desk last year, but also an initiative to put 100,000
more police officers on the street -- (applause) -- to provide
bootcamps for first-time nonviolent offenders for more space for the
hardened criminals in jail -- (applause) -- and I support an
initiative to do what we can to keep guns out of the hands of
criminals. (Applause.)
Let me say this. I will make you this bargain: If you
will pass the Brady bill, I'll sure sign it. (Applause.)
Let me say now, we should move to the harder parts.
(Applause.)
I think it is clear to every American, including every
member of Congress of both parties, that the confidence of the people
who pay our bills in our institutions in Washington is not high. We
must restore it. We must begin again to make government work for
ordinary taxpayers, not simply for organized interest groups. And
that beginning must start with real political reform. (Applause.)
I am asking the United States Congress to pass a real
campaign finance reform bill this year. (Applause.) I ask you to
increase the participation of the American people by passing the
motor voter bill promptly. (Applause.) I ask you to deal with the
undue influence of special interest by passing a bill to end the tax
deduction for lobbying and to act quickly to require all the people
who lobby you to register as lobbyists by passing the lobbying
registration bill. (Applause.)
Believe me, they were cheering that last section at
home. I believe lobby reform and campaign finance reform are a sure
path to increased popularity for Republicans and Democrats alike
because it says to the voters back home, "This is your House. This
is your Senate. We're your hired hands. And every penny we draw is
your money." (Applause.)
Next, to revolutionize government we have to ensure that
we live within our means, and that should start at the top and with
the White House. In the last few days I have announced a cut in the
White House staff of 25 percent, saving approximately $10 million. I
have ordered administrative cuts in budgets of agencies and
departments. I have cut the federal bureaucracy -- or will over the
next four years -- by approximately 100,000 positions, for a combined
savings of $9 billion. (Applause.) It is time for government to
demonstrate in the condition we're in that we can be as frugal as any
household in America.
And that's why I also want to congratulate the Congress.
I notice the announcement of the leadership today that Congress is
taking similar steps to cut its costs. I think that is important. I
think it will send a very clear signal to the American people.
(Applause.)
But if we really want to cut spending we're going to
have to do more, and some of it will be difficult. Tonight I call
for an across-the-board freeze in federal government salaries for one
year. (Applause.) And thereafter, during this four-year period, I
recommend that salaries rise at one point lower than the cost of
living allowance normally involved in federal pay increases.
(Applause.)
Next, I recommend that we make 150 specific budget cuts,
as you know, and that all those who say we should cut more be as
specific as I have been. (Applause.)
Finally, let me say to my friends on both sides of the
aisle, it is not enough simply to cut government, we have to rethink
the whole way it works. When I became President I was amazed at just
the way the White House worked in ways that added lots of money to
what taxpayers had to pay -- outmoded ways that didn't take maximum
advantage of technology and didn't do things that any business would
have done years ago to save taxpayers' money.
So I want to bring a new spirit of innovation into every
government department. I want to push education reform, as I said,
not just to spend more money, but to really improve learning. Some
things work and some things don't. We ought to be subsidizing the
things that work and discouraging the things that don't. I'd like to
use that superfund to clean up pollution for a change and not just
pay lawyers. (Applause.)
In the aftermath of all the difficulties with the
savings and loans, we must use federal bank regulators to protect the
security and safety of our financial institutions, but they should
not be used to continue the credit crunch and to stop people from
making sensible loans. (Applause.)
I'd like for us to not only have welfare reform but to
reexamine the whole focus of all of our programs that help people to
shift them from entitlement programs to empowerment programs. In the
end we want people not to need us anymore. I think that's important.
(Applause.)
But in the end we have to get back to the deficit. For
years there's been a lot of talk about it, but very few credible
efforts to deal with it. And now I understand why, having dealt with
the real numbers for four weeks. (Laughter.) But I believe this
plan does -- it tackles the budget deficit seriously and over the
long-term. It puts in place one of the biggest deficit reductions
and one of the biggest changes in federal priorities from consumption
to investment in the history of this country at the same time over
the next four years.
Let me say to all the people watching us tonight, who
will ask me these questions beginning tomorrow as I go around the
country and who've asked it in the past, we're not cutting the
deficit just because experts say it's the thing to do or because it
has some intrinsic merit. We have to cut the deficit because the
more we spend paying off the debt, the less tax dollars we have to
invest in jobs and education and the future of this country. And the
more money we take out of the pool of available savings, the harder
it is for people in the private sector to borrow money at affordable
interest rates for a college loan for their children, for a home
mortgage, or to start a new business.
That's why we've got to reduce the debt -- because it is
crowding out other activities that we ought to be engaged in and that
the American people ought to be engaged in. (Applause.) We cut the
deficit so that our children will be able to buy a home, so that our
companies can invest in the future and in retraining their workers,
so that our government can make the kinds of investments we need to
be a stronger and smarter and safer nation.
If we don't act now, you and I might not even recognize
this government 10 years from now. If we just stay with the same
trends of the last four years, by the end of the decade the deficit
will be $635 billion a year, almost 80 percent of our gross domestic
product. And paying interest on that debt will be the costliest
government program of all. We'll still be the world's largest
debtor. And when members of Congress come here, they'll be devoting
over 20 cents on the dollar to interest payments, more than half of
the budget to health care and to other entitlements. And you'll come
here and deliberate and argue over six or seven cents on the dollar,
no matter what America's problems are.
We will not be able to have the independence we need to
chart the future that we must. And we'll be terribly dependent on
foreign funds for a large portion of our investment.
This budget plan by contrast will, by 1997, cut $140
billion in that year alone from the deficit. A real spending cut, a
real revenue increase, a real deficit reduction, using the
independent numbers of the Congressional Budget Office. (Laughter.)
Well, you can laugh, my fellow Republicans, but I'll point out that
the Congressional Budget Office was normally more conservative in
what was going to happen and closer to right than previous Presidents
have been. (Applause.)
I did this so that we could argue about priorities with
the same set of numbers. I did this so that no one could say I was
estimating my way out of this difficulty. I did this because if we
can agree together on the most prudent revenues we're likely to get,
if the recovery stays and we do right things economically, then it
will turn out better for the American people than we say than the
last 12 years. Because there were differences over the revenue
estimates, you and I know that both parties were given greater elbow
room for irresponsibility. This is tightening the rein on the
Democrats as well as the Republicans. Let's at least argue about the
same set of numbers so the American people will think we're keeping
straight with them. (Applause.)
As I said earlier, my recommendation makes more than
150 difficult reductions to cut the federal spending by a total of
$246 billion. We are eliminating programs that are no longer needed,
such as nuclear power research and development. (Applause.) We're
slashing subsidies and canceling wasteful projects. But many of
these programs were justified in their time, and a lot of them are
difficult for me to recommend reductions in. Some really tough ones
for me personally.
I recommend that we reduce interest subsidies to the
Rural Electric Administration. That's a difficult thing for me to
recommend. But I think that I cannot exempt the things that exist in
my state, or in my experience, if I ask you to deal with things that
are difficult for you to deal with. We're going to have to have no
sacred cows except the fundamental abiding interest of the American
people. (Applause.)
I have to say that we all know our government has been
just great at building programs. The time has come to show the
American people that we can limit them, too; that we can not only
start things, that we can actually stop things. (Applause.)
About the defense budget, I raise a hope and a caution.
As we restructure our military forces to meet the new threats of the
post-Cold War world, it is true that we can responsibly reduce our
defense budget. And we may all doubt what that range of reductions
is. But let me say that as long as I am President, I will do
everything I can to make sure that the men and women who serve under
the American Flag, will remain the best-trained, the best-prepared,
the best-equipped fighting force in the world. And every one of you
should make that solemn pledge. We still have responsibilities
around the world. We are the world's only superpower. This is still
a dangerous and uncertain time. And we owe it to the people in
uniform to make sure that we adequately provide for the national
defense and for their interests and needs. (Applause.)
Backed by an effective national defense and a stronger
economy, our nation will be prepared to lead a world challenged -- as
it is everywhere -- by ethnic conflict, by the proliferation of
weapons of mass destruction, by the global democratic revolution and
by challenges to the health of our global environment.
I know this economic plan is ambitious, but I honestly
believe it is necessary for the continued greatness of the United
States. And I think it is paid for fairly, first by cutting
government, then by asking the most of those who benefited the most
in the past, and by asking more Americans to contribute today so that
all of us can prosper tomorrow.
For the wealthiest -- those earning more than $180,000
per year -- I ask you all who are listening tonight to support a
raise in the top rate for federal income taxes from 31 to 36 percent.
(Applause.) We recommend a 10 percent surtax on incomes over
$250,000 a year -- (applause) -- and we recommend closing
some loopholes that let some people get away without paying any tax
at all. (Applause.)
For businesses with taxable incomes in excess of $10
million we recommend a raise in the corporate tax rate also to 36
percent, as well as a cut in the deduction for business entertainment
expenses. (Applause.) Our plan seeks to attack tax subsidies that
actually reward companies more for shutting their operations down
here and moving them overseas than for staying here and reinvesting
in America. (Applause.)
I say that as someone who believes that American
companies should be free to invest around the world and, as a former
governor who actively sought investment of foreign companies in my
state, but the tax code should not express a preference to American
companies for moving somewhere else. And it does in particular cases
today. (Applause.)
We will seek to ensure that through effective tax
enforcement foreign corporations who do make money in America simply
pay the same taxes that American companies make on the same income.
(Applause.)
To middle class Americans who have paid a great deal for
the last 12 years and from whom I ask a contribution tonight, I will
say again as I did on Monday night, you're not going alone anymore,
you're certainly not going first and you're not going to pay more for
less as you have too often in the past.
I want to emphasize the facts about this plan: 98.8
percent of America's families will have no increase in their income
tax rates -- (applause) -- only 1.2 percent at the top. Let me be
clear: There will also be no new cuts in benefits for Medicare.
(Applause.) As we move toward the fourth year, with the explosion in
health care costs, as I said, projected to account for 50 percent of
the growth of the deficit between now and the year 2000, there must
be planned cuts in payments to providers -- to doctors, to hospitals,
to labs -- as a way of controlling health care costs. But I see
these only as a stop-gap until we can reform the entire health care
system. If you'll help me do that, we can be fair to the providers
and to the consumers of health care. (Applause.)
Let me repeat this, because I know it matters to a lot
of you on both sides of the aisle. This plan does not make a
recommendation for new cuts in Medicare benefits for any beneficiary.
Secondly, the only change we are making in Social Security is one
that has already been publicized. The plan does ask older Americans
with higher incomes who do not rely solely on Social Security to get
by to contribute more. This plan will not affect the 80 percent of
Social Security recipients who do not pay taxes on Social Security
now. Those who do not pay tax on Social Security now will not be
affected by this plan.
Our plan does include a broad-based tax on energy. And
I want to tell you why I selected this and why I think it's a good
idea. I recommend that we adopt a BTU tax on the heat content of
energy as the best way to provide us with revenue to lower the
deficit because it also combats pollution, promotes energy
efficiency, promotes the independence economically of this country,
as well as helping to reduce the debt, and because it does not
discriminate against any area -- unlike a carbon tax that's not too
hard on the coal states; unlike a gas tax that's not too tough on
people who drive a long way to work; unlike an ad valorem tax it
doesn't increase just when the price of an energy source goes up.
And it is environmentally responsible. It will help us in the future
as well as in the present with the deficit. (Applause.)
Taken together these measures will cost an American
family with an income of about $40,000 a year less than $17 a month.
It will cost American families with incomes under $30,000 nothing,
because of other programs we propose -- principally those raising the
earned income tax credit.
Because of our publicly-stated determination to reduce
the deficit, if we do these things, we will see the continuation of
what's happened just since the election. Just since the election,
since the Secretary of the Treasury, the Director of the Office of
Management and Budget and others who have begun to speak out publicly
in favor of a tough deficit reduction plan, interest rates have
continued to fall long-term. That means that for the middle class,
who will pay something more each month, if they had any credit needs
or demands their increased energy costs will be more than offset by
lower interest costs for mortgages, consumer loans, credit cards.
This can be a wise investment for them and their country now.
(Applause.)
I would also point out what the American people already
know, and that is, because we're a big, vast country where we drive
long distances, we have maintained far lower burdens on energy than
any other advanced country. We will still have far lower burdens on
energy than any other advanced country. And these will be spread
fairly, with real attempts to make sure that no cost is imposed on
families with incomes under $30,000 and that the costs are very
modest until you get into the higher income groups where the income
taxes trigger in.
Now, I ask all of you to consider this: Whatever you
think of the tax program, whatever you think of the spending cuts,
consider the cost of not changing. Remember the numbers that you all
know. If we just keep on doing what we're doing, by the end of the
decade we'll have a $650-billion-a-year deficit. If we just keep on
doing what we're doing, by the end of the decade, 20 percent of our
national income will go to health care every year -- twice as much as
any other country on the face of the globe. If we just keep on doing
what we're doing, over 20 cents on the dollar will have to go to
service the debt.
Unless we have the courage now to start building our
future and stop borrowing from it, we're condemning ourselves to
years of stagnation interrupted by occasional recessions, to slow-
growth in jobs, to no more growth in income, to more debt, to more
disappointment. Worse less -- unless we change, unless we increase
investment and reduce the debt, to raise productivity so that we can
generate both jobs and incomes, we will be condemning our children
and our children's children to a lesser life than we enjoyed.
Once Americans looked forward to doubling their living
standards every 25 years. At present productivity rates, it will
take 100 years to double living standards, until our grandchildren's
grandchildren are born. I say that is too long to wait. (Applause.)
Tonight the American people know we have to change. But
they're also likely to ask me tomorrow and all of you for the weeks
and months ahead whether we have the fortitude to make the changes
happen in the right way. They know that as soon as I leave this
Chamber and you go home, various interest groups will be out in force
lobbying against this or that piece of this plan. And that the
forces of conventional wisdom will offer a thousand reasons why we
well ought to do this but we just can't do it.
Our people will be watching and wondering, not to see
whether you disagree with me on a particular issue, but just to see
whether this is going to be business as usual or a real new day.
Whether we're all going to conduct ourselves as if we know we're
working for them. We must scale the walls of the people's
skepticisms, not with our words but with our deeds. (Applause.)
After so many years of gridlock and indecision, after so
many hopeful beginnings and so few promising results, the American
people are going to be harsh in their judgments of all of us if we
fail to seize this moment.
This economic plan can't please everybody. If the
package is picked apart, there will be something that will anger each
of us, won't please anybody. But if it is taken as a whole, it will
help all of us.
So I ask you all to begin by resisting the temptation to
focus only on a particular spending cut you don't like or some
particular investment that wasn't made. And nobody likes the tax
increases, but let's just face facts. For 20 years, through
administrations of both parties, incomes have stalled and debt has
exploded, and productivity has not grown as it should. We cannot
deny the reality of our condition. We have got to play the hand we
were dealt and play it as best we can. (Applause.)
My fellow Americans, the test of this plan cannot be
what is in it for me, it has got to be what is in it for us.
(Applause.)
If we work hard and if we work together, if we
rededicate ourselves to creating jobs, to rewarding work, to
strengthening our families, to reinventing our government, we can
lift our countries fortunes again.
Tonight, I ask everyone in this Chamber and every
American to look simply into your heart, to spark your own hopes,
to fire your own imagination. There is so much good, so much
possibility, so much excitement in this country now, that if we act
boldly and honestly, as leaders should, our legacy will be one of
prosperity and progress. This must be America's new direction. Let
us summon the courage to seize it.
Thank you. God bless America.
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