[Weekly Compilation of Presidential Documents Volume 29, Number 7 (Monday, February 22, 1993)]
[Pages 215-224]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Address Before a Joint Session of Congress on Administration Goals

 February 17, 1993

    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]

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    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.
    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 there can be no 
more something for nothing and admit frankly that we are all in this 
together.
    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.
    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. 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.
    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 
decisionmaking. 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. 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

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cuts, not gimmicks, in Government spending; and by fairness, for a 
change, in the way additional burdens are borne.
    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, 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.
    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. 
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.
    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 be 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. We 
propose a permanent investment tax credit for the smallest firms in this 
country, with revenues of under $5 million. 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.
    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. This plan invests in our roads, our 
bridges,

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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.
    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.
    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. This 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. We must provide special assistance to areas and 
to workers displaced by cuts in the defense budget and by other 
unavoidable economic dislocations.
    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.
    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 5 years from now but this year, bold steps to reform our 
health care system.
    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.
    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.
    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. 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. 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 spend- 

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ing patterns in public or private dollars for health care for less and 
less and less every year. We can do better. And I will work to do 
better.
    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 2-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.
    I recommend that the women, infants, and children's nutrition 
program be expanded so that every expectant mother who needs the help 
gets it. 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. 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.
    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. 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.
    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.
    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 Americans 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.
    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

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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.
    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. 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 2 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.
    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, 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.
    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. 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, to provide 
bootcamps for first-time nonviolent offenders for more space for the 
hardened criminals in jail, and I support an initiative to do what we 
can to keep guns out of the hands of criminals. Let me say this. I will 
make you this bargain: If you will pass the Brady bill, I'll sure sign 
it.
    Let me say now, we should move to the harder parts.
    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. I am asking the United States Congress to pass a 
real campaign finance reform bill this year. I ask you to increase the 
participation of the American people by passing the motor voter bill 
promptly. 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.
    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.''
    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 4 years, by approximately 
100,000 positions, for a combined savings of $9 billion. 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 noticed 
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.
    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. And 
thereafter, during this 4-year period, I recommend that salaries rise at 
one point lower than the cost of living allowance normally involved in 
Federal pay increases.
    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.

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    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.
    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.
    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.
    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 4 
weeks. 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 4 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. 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 4 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 6 
or 7 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.
    I did this so that we could argue about priorities with the same set 
of numbers. I

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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. In 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 shooting 
straight with them.
    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. 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.
    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.
    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. 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. We recommend a 10-percent 
surtax on incomes over $250,000 a year, and we recommend closing some 
loopholes that let some people get away without paying any tax at all.
    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. 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. 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.
    We will seek to ensure that, through effective tax enforcement, 
foreign corporations who do make money in America simply pay

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the same taxes that American companies make on the same income.
    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 any more, 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, only 1.2 percent at the top.
    Let me be clear: There will also be no new cuts in benefits for 
Medicare. As we move toward the 4th 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 stopgap 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. 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.
    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.
    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

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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, 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.
    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. 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.
    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. 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 country's 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.

Note: The President spoke at 9:10 p.m. in the House Chamber of the 
Capitol.