[Weekly Compilation of Presidential Documents Volume 33, Number 23 (Monday, June 9, 1997)]
[Pages 817-819]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's Radio Address

May 31, 1997

    Good morning. I've just returned from Europe where I commemorated 
the 50th anniversary of the Marshall plan, which joined America's 
investment to Europe's commitment to rebuild and, in so doing, helped to 
spark 50 years of prosperity, not only for Europe but for America as 
well.
    I also had the opportunity to discuss with leaders of Europe the 
present success of our economy and what we can do together to promote 
prosperity in the new democracies of Central and Eastern Europe in ways 
that will ensure their prosperity and ours for the next 50 years.
    This morning I want to talk with you about the new economic policy 
we brought to America for the last 4\1/2\ years and how our balanced 
budget and tax cut plans can help in creating jobs, raising incomes, 
strengthening business, and moving America forward in the years to come.
    Recall for a moment what America's economy looked like 4 years ago: 
high unemployment, few new jobs, stagnant wages, exploding budget 
deficits. I took office determined to replace trickle-down economics 
with invest-and-grow economics. There were three principal elements to 
our strategy: reduce the budget deficit and invest in the education, 
training, and security of working men and women and our children, and 
open new markets for American-made goods and services through tough 
trade agreements.
    I believe all three were necessary to create the conditions for 
private sector prosperity and to ensure that all our people have the 
opportunity to reap the rewards of growth. We made tough, often 
controversial, decisions in 1993 and afterward to implement our new 
invest-and-grow economic policy. Some fine Members of Congress lost 
their seats because they had the courage to change course and vote for 
the future.
    But just look at the results. Today our confidence has returned and 
our economy leads the world. In 1992, the deficit was $290 billion. 
Today, we expect it to drop to $67 billion, a 77 percent reduction. In 
1992, unemployment averaged 7.5 percent. Today, it's 4.9 percent, the 
lowest in 24 years.
    In 1992 there were few new jobs. Since then, the economy has 
produced 12.1 million of them, including the most ever in a single 
Presidential term. And while the years before our plan took effect saw 
sluggish growth, yesterday we learned that in the first quarter of this 
year, the economy grew at a 5.8 percent rate, the highest in a decade. 
Inflation is at a 30-year low; business investment, a 30-year high. Each 
year we've had a record number of new businesses started. Wages are 
rising. In the last 2 years, over half the new jobs have paid higher 
than average wages and inequality among working people has seen the 
biggest drop since the 1960's. Our economy is the healthiest in a 
generation.
    All this didn't just happen. We've had better managed, more 
competitive businesses, more productive working people; the 
entrepreneurial spirit of small business; a Federal Reserve committed 
both to low inflation and to economic growth; and continued advances in 
technology. Americans' hard work and high energy, smart decisions and 
tough choices, and our invest-and-grow strategy, all these have worked 
together to produce this success.
    Now, in the coming months, America will have to decide whether to 
stick with this strategy. Will we continue to engage the world economy 
by continuing to give normal trading status to China? Will Congress give 
the President the tools necessary to open new markets abroad for 
American products through tough new trade agreements? And above all, 
will we finish the job of balancing the budget while protecting our 
values?
    Earlier this month, I reached agreement with the leaders of Congress 
on a bipartisan

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balanced budget plan that will continue our economic strategy into the 
next century. This is a balanced budget plan that also is in balance 
with our values. It will eliminate the budget deficit by 2002, honor our 
parents by securing the Medicare Trust Fund for a decade, preserve our 
environment through strong enforcement in the cleanup of 500 toxic waste 
sites, and protect the next generation by extending health insurance 
coverage to as many as 5 million uninsured children. And most important 
of all, it will invest in the skills of our people through the most 
significant increase in higher education since the GI bill half a 
century ago, the expansion of Head Start, and an investment in higher 
national academic standards for our children.
    Both Houses of Congress moved forward on this budget before they 
left town for the Memorial Day recess. I was pleased that a strong 
majority of both parties supported this bipartisan plan. When Congress 
gets back to work, it's time to finish the job of enacting the broad 
outlines of the budget plan. Then in the weeks to come, Congress will 
fill in the details and begin writing this budget and its tax cut into 
law. I want a tax cut that helps families raise their children and send 
them to college and keeps the economy growing. That's my goal.
    I look forward to continuing to work together with the Republican 
and Democratic Members of the tax writing committees in Congress to meet 
this goal as we write the details of the tax cut into law. As that 
process begins, I want to tell you three of the things this final tax 
cut plan should include.
    First, with education our most important goal, our tax cut must help 
open the doors of college to every American. Our bipartisan budget plan 
includes $35 billion in tax relief, targeted to help families pay for 
higher education. Our HOPE scholarship is a $1,500 per year tax cut to 
help pay for the first 2 years of college and open them to all 
Americans. I will also recommend that students who already receive Pell 
grant scholarships can still receive the HOPE scholarship for education 
costs beyond those covered by their Pell grant. With this step, we'll 
make sure that our tax cut reaches all those who want to take 
responsibility for their own lives and go on to college. Beyond that, I 
favor a tax deduction for the cost of any education after high school 
for people of any age.
    Second, as many families as possible should have a chance to receive 
the dividend created by economic growth. Our plan will give families a 
$500 child tax credit. This is the kind of tax relief we need, targeted 
to helping families raise their children and meeting the competing 
demands of work and family. As we craft this tax cut, I believe it's 
especially important that we make sure that the child tax credit is fair 
to working families, especially those with lower incomes.
    Third, the tax cuts must be consistent with a balanced budget and 
must not be written in such a way that they reopen the deficit and bust 
the budget in years to come. This was absolutely key when we reached a 
budget agreement, and I will continue to insist on it as we write the 
agreement into law. Fiscal responsibility helped to produce a strong 
economy. Fiscal irresponsibility will surely undo it. We cannot put our 
prosperity at risk through time-bomb tax cuts that explode the deficit 
in 5 or 10 or 20 years. We must continue with discipline. We tried it 
the other way before, and it failed.
    We are now nearly 5 years into our economic strategy of invest and 
grow, and it is working, well beyond our most optimistic expectations. 
We have now an historic chance to continue this growth and give the 
American people the dividends of expansion through a tax cut. We can 
protect our values as we expand our economy. The American people deserve 
a tax cut, and they need a balanced budget. We can give them both. If we 
make sure that this tax cut helps all working families, that it opens 
wide the doors of college, and that it never, never throws the budget 
out of balance, we can propel our country into the 21st century even 
stronger than it is today.
    Thanks for listening.

Note: The address was recorded at 7:30 p.m. on May 30 in the Map Room at 
the White House for broadcast at 10:06 a.m. on May 31.

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