[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.