    [Weekly Compilation of Presidential Documents Volume 29, Number 31 (Monday, August 9, 1993)]
    [Pages 1551-1555]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Address to the Nation on the Economic Program

     August 3, 1993

        Good evening. Tonight I want to report to you on the progress we've
    made and to ask for your help on our Nation's most urgent priority,
    reviving the American dream by restoring the American economy.
        It's been at least 30 years since a President has asked Americans to
    take personal responsibility for our country's future. It's been 25
    years since our Government had a balanced budget. For at least 20 years,
    middle class incomes have been nearly stagnant, with too many Americans
    working nights, weekends, and holidays just to make ends meet. For at
    least 10 years costs in our health care system have exploded while
    millions of Americans go to bed each night worrying that if they lose
    their jobs or their children get sick, their health insurance will be
    taken away. And for the last several years our economy has failed to
    generate jobs, good jobs that pay enough to own a home, buy a car, pay
    the bills, educate your children, and retire with dignity.
        For too long, our Government has failed to tackle these problems.
    We've been given

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    the politics of entitlement, Government handouts without asking anything
    in return. And we've been given the politics of abandonment, cutting
    taxes on the well-off and asking nothing of them in return either, while
    raising taxes on the middle class to pay more for the same Government,
    instead of investing in our jobs and our future. The results: fewer
    jobs, stagnant incomes, a massive debt for ourselves and our children,
    higher cost and greater insecurity in health care, and a host of
    problems simply neglected.
        Well, tonight we're on the verge of breaking out of that old false
    choice, between tax-and-spend and trickle-down; between abandonment and
    entitlement; on the verge of a new way of doing things grounded in our
    most enduring values, a philosophy that says America owes all of us an
    opportunity if we'll assume responsibility for ourselves, our
    communities, and our country. No more something for nothing. We're all
    in this together.
        This means we must make Government work for the people who pay the
    bills. All of us have been awed in the last few weeks by the vast power
    of the Mississippi River breaking its banks and the devastation that has
    followed. But we've also been awed by the courage of the flood victims
    and the compassion of other Americans who have joined them in fighting
    back the waters and trying to restore normal life. I'm especially proud
    that this time the Federal Government has been fighting alongside the
    people.
        That is what we must do on all fronts. We must do more, much more,
    to turn this country around. and now we have the chance to change. We're
    on the eve of historic action. This week, Congress will cast a crucial
    vote on my plan for economic recovery. In a comprehensive economic plan,
    there are always places for give and take, but from the first day to
    this day, I have stood firm on certain ideas and ideals that are at the
    heart of this plan.
        Tonight I can report to you that every one of those principles is
    contained in the final version of the plan: first, the largest deficit
    reduction in history, nearly $500 billion, with more spending cuts than
    tax increases. Rather than the games and gimmicks of the past, this plan
    has 200 specific spending cuts, and it reduces Government spending by
    more than $250 billion. We cut more than 100,000 positions from the
    Federal payroll by attrition. We freeze discretionary spending for 5
    years. We limit pay increases for Federal employees.
        Why must we take extraordinary action now? Well, this chart shows
    you why. America faces a choice. We can continue on the path of higher
    deficits and lower growth, or we can make a fundamental change to
    improve our Nation's economy by adopting my economic plan.
        Now, it won't be easy, and it won't be quick. But it is necessary.
    Without deficit reduction, we can't have sustained economic growth.
    Economists and business leaders alike warn us that growth will falter if
    we don't take dramatic steps to tame this deficit, and soon. With so
    much at stake it would be irresponsible not to take decisive action.
    With this plan in place, the economy will grow, and more than 8 million
    new jobs will be created in the next 4 years. Without it, we put the
    economy and our standard of living at further risk. if we take this
    important first step now, over the long run we will see deficits go down
    and jobs go up.
        The second principle of this plan is fairness. Those who have the
    most contribute the most. As this chart shows, we asked the well-off to
    pay their fair share, requiring that at least 80 percent of the new tax
    burden fall on those making more than $200,000 a year and very little on
    any other Americans, not to punish the successful but simply to ask
    something of the very people whose incomes went up most and whose taxes
    went down during the 1980's. For working families making less than
    $180,000 a year, there will be no income tax increase. I repeat: For
    working families making less than $180,000 a year, there will be no
    income tax increase.
        The third principle is that we must protect older Americans from
    punitive cuts in Social Security, Medicare, and veterans benefits that
    some have proposed. While all Americans must do their part, I will not
    balance the budget on the backs of older Americans while protecting the
    wealthy. Every alternative offered by the opponents of change begins
    with deep cuts in the health care of older Americans. I believe we must
    build a better future for our children without sac-

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    rificing the security of their grandparents. We can control health care
    costs, but only by reforming the health care system, not simply by
    hurting the elderly.
        The fourth principle is that we must keep faith with the hard
    working middle class families who are the heart and strength of our
    Nation. We've worked hard in this plan to ensure the lowest possible tax
    on the middle class. The plan asks an average working family to pay no
    more than $3 a month in new taxes, less than a dime a day, with a 4.3-
    cent-a-gallon increase in a gas tax. This is the only new tax working
    people will pay.
        Let me be plain about where the deficit reduction comes from. Look
    at this chart: out of every $10 in deficit reduction, $5 and actually a
    little more comes from spending cuts, $4 comes from taxes on incomes of
    those with more than $200,000 a year in income, and just $1 comes from
    everyone else. This plan is fair. It's balanced. And it will work.
        Finally, we must have an economy that creates jobs and lifts up the
    American people. In the past, deficit reduction efforts have failed
    because they neglected incentives for business growth and investments to
    make Americans smarter and stronger and safer. This plan is very
    different. It generates jobs. In fact, over 90 percent of the small
    businesses in this whole country are eligible for tax reductions, tax
    cuts, if they invest in their future and create new jobs.
        If you have the courage to invest in a new business and the vision
    to hold that investment for 5 years, this plan will cut your capital
    gains tax in half. If your business invests in research and development,
    this plan will reward you. If your small business creates new jobs and
    buys new equipment, this plan will provide incentives for growth by
    nearly doubling the expensing provision for new investments.
        While we make deep cuts in spending, we also make room for some
    needed investments. Our plan invests in people and makes special
    investments in our children and in our families through Head Start,
    nutrition for pregnant mothers, and immunizations for poor children.
    These things pay for themselves in healthy, growing, strong children.
        We will revolutionize the student loan program so that all Americans
    can better afford to finance a college education. And we make bold
    changes in worker training so that high school graduates can get high-
    skilled, high-wage jobs.
        Perhaps most important, this plan rewards work over welfare, by
    lifting out of poverty every parent with children at home who chooses
    full-time work over lifetime welfare. We do this through the earned-
    income tax credit, which reduces taxes for 20 million working families
    and households earning less than $27,000 a year. It does this without
    creating a new Government bureaucracy and simply using the Tax Code.
        This sends an enormously powerful message to the people who struggle
    against great odds to raise themselves and their families. It empowers
    them. It says we're on the side of people who work and care about their
    children. It's pro-work. It's pro-family. And it is a critical first
    step to one of my most important priorities, ending welfare as we know
    it.
        Every element of this plan is a departure from business as usual.
    And if there's anything our country needs, it's to put business as usual
    out of business. I know full well that Americans are very skeptical of
    any claim by the Government. You must wonder if these cuts are for real
    and whether the taxes will really be used to pay down the deficit. Well,
    our plan is fundamentally different from business as usual. Here's why:
        First, the plan is based on conservative estimates of future
    revenues. It presents line by line, year by year, specific cuts in
    Government spending. And it offers new incentives so we can expand the
    economy and generate jobs. It minimizes the burden on the middle class
    and asks the wealthy to pay their fair share. And finally, it puts into
    place two clear safeguards to keep a watchful eye on future Federal
    spending while protecting the savings produced by this plan.
        All the money we save will be locked away in a deficit reduction
    trust fund so the savings will not be spent on politicians' pet
    projects. Because some in the Senate have used technicalities to block
    Senator DeConcini's amendment to create the deficit reduction trust fund
    and frustrated the efforts of many other Senators and a clear majority
    of the House of Representatives who support it and who support controls
    on annual spending and

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    entitlement programs, I will sign Executive orders tomorrow putting both
    these safeguards in place so that you know the money must be spent on
    deficit reduction. And if we miss our deficit reduction targets over the
    next 5 years, I will be obliged to present a plan to correct the course
    to make sure we keep doing what we're telling you we're going to do.
    Now, this is a new direction.
        This plan has been carefully examined by the most conservative and
    skeptical critics of all, those who run our Nation's financial markets.
    They've studied the plan and determined that over the long term, paying
    down the deficit will be good for the country. And as we have made
    progress in enacting this plan, the markets have lowered interest rates.
    Lower interest rates, in turn, make it easier to own a home, finance a
    business, buy a car, pay off credit cards, and borrow for college. For
    example, if you are a middle class family with a $100,000 mortgage at 10
    percent interest, you should be able to refinance the mortgage today
    down to 7.5 percent and save $175 a month right away, as millions of
    Americans have already done.
        The chief executive officers of 80 of our country's most successful
    companies, Republicans and Democrats alike, have also supported this
    plan; so have many small business organizations from the National Small
    Business United and the National Association of the Self-Employed, to
    the National Venture Capital Association. The men and women whose
    business it is to create jobs and growth have been solid in their
    support of this historic endeavor.
        At this exceptional moment of promise, why are so many in Washington
    so reluctant to take action? Why is it so hard for so many in this city
    to break the bad habits of the past and take the steps we all know we
    have to take? For 5 months our critics had the chance to offer
    alternatives, and all the major plans came up with the same thing: less
    deficit reduction or more paying for older Americans or both;
    protections for the wealthy from paying their fair share of the taxes;
    and no new incentives for business to create jobs or investments in the
    American people. And every one of these alternatives was soundly
    rejected in the Congress. Now there are only two choices, our plan or no
    plan.
        Our opponents want to bring the plan down. The guardians of gridlock
    will do anything to preserve the status quo, to serve special interests,
    and to drag this thing out. They practice partisanship when we need
    progress. They call for delay when we've been waiting for 12 years and
    working on this project for months. They talk and talk about what to do,
    instead of doing what must be done.
        When I was the Governor of Arkansas, our State had one of the lowest
    tax burdens in the country. I inherited this big Federal deficit just
    like you did. And I don't like taxes any more than you do, but our
    Nation is in economic danger, and now we've got to take this problem we
    inherited, you and I, and do something about it. We have to take
    responsibility for change. Passing this plan will be a bold step and the
    first step on a longer journey toward giving our Nation a comprehensive
    national economic strategy.
        This economic strategy begins with putting our house in order, but
    it cannot end there. We must also have the courage to reform our health
    care system, so never again will a family be denied health care or a
    business be bankrupted by health care costs.
        Let me show you this first chart one more time. If you look at this
    deficit, under our plan we can bring the debt down solidly for 5 years.
    If you want the deficit to go down to zero, as I think almost all of you
    do, we have got to challenge the health care system. It is bankrupting
    the private sector, bankrupting the public sector, and millions of
    Americans live in insecurity and constant fear of losing their health
    care. So dealing with health care is good for the economy, good for
    bringing the deficit down further, and good for the American people.
        We also have to end welfare as we know it. We can move millions of
    idle Americans off the welfare rolls and on to the work rolls if we'll
    change the system. And we've got to revolutionize Government itself,
    cleaning out waste, corruption, bringing state-of-the-art management
    that will give more saving to the taxpayers, have Government work better
    and put it back in charge of the people who are paying the bill. And we
    must continue to work to open foreign markets to create American jobs.

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        All of these things come together to form an economic strategy that
    will give opportunity to every American, and ask responsibility from
    every American. But we can't take any of the steps if we don't take the
    first step.
        That's why the decision Congress must make this week is so terribly
    important. We cannot afford not to act. I need your help. I need for you
    to tell the people's representatives to get on with the people's
    business. Tell them to change the direction of the economy and do it
    now, so that we can start growing again, producing jobs again, and
    moving our country forward again.
        In the last 6 months, we've won some important battles here: a new
    family and medical leave law just taking effect that allows young
    parents to take time off to care for a new baby or a sick child or an
    ill parent without losing their jobs; a new national service corps that
    will help tens of thousands of our young people to pay for college
    through service to their country in their communities; a new Supreme
    Court Justice confirmed just today without partisanship or rancor; new
    policies to develop high-technology jobs into converted defense
    facilities and plants to productive civilian purposes, expanding jobs
    and opportunity. And, from a summit in Vancouver, Canada, to help save
    Russian democracy, to a summit in Tokyo to help revive the world
    economy, there are many new opportunities for Americans and a new
    respect for America's leadership.
        We Americans are a people both privileged and challenged. We were
    formed in turbulent times, and we stand now at the beginning of a new
    time, the dawn of a new era. Our deeds and decisions can lift America up
    so that in our third century we will continue to be the youngest and
    most optimistic of nations; a people on the march once again, strong and
    unafraid. If we are bold in our hopes, if we meet our great
    responsibilities, we will give the country we love the best years it has
    ever known.
        Good night, and may God bless you all on this journey.

    Note: The President spoke at 8 p.m. from the Oval Office at the White
    House. A tape was not available for verification of the content of this
    address.