January 9, 1989
You know, actually, I could tell this was a very supportive group when I walked into the room. Someone in the back of the room began to chant, ``Two more weeks! Two more weeks!'' [Laughter] But it's not over yet, and there's still work to be done. And I figure if I'm going to do some, it's now or never. [Laughter]
Today I submit to Congress my final budget. And I want to thank all of you for your support, both on this budget, as members and friends of Coalition for Fiscal Restraint, and so many of you for your help over the years. By taking the pledge against any tax hike and fighting to control spending, you put the national interest first, and you put the ``iron triangle'' in its place. The country needs more people like you in Washington.
Now, I also want to commend the many members of the administration who've worked on this final budget. We've prepared an excellent document that fulfills the original objectives that I set forth for the fiscal year 1990 budget; not only does this budget meet the Gramm-Rudman-Hollings deficit target of $100 billion, we even do better than that. And we do this without touching Social Security, weakening our national defense, or reducing benefits to the needy. And, my friends, we prove it can be done without raising taxes.
As I've said before, the reason no new taxes are needed is because our strong and growing economy will in the next fiscal year produce an additional $84 billion in tax revenues without any increase in tax rates. Thanks to our record expansion, the money is literally rolling in. Those who want to tax away even more hard-earned dollars from working people ought to be ashamed of themselves. By 1994 the total revenue gain, without any new taxes, will be $370 billion. Now, that's plenty of additional revenue to do the business of government and still bring down the deficit. All that's necessary is to make the choices that governing is all about.
But here in the Nation's Capital, the usual crowd is calling for higher taxes. Never mind that Federal revenues are higher than ever before. Never mind that they're growing at a healthy clip. Never mind that raising taxes would be the surest way to kill the economic goose that lays the golden eggs. Never mind the sorry record of new revenues being used not for deficit reduction but for even higher spending. Never mind the facts: The big government crowd wants more taxes.
And they also want more spending and more Federal regulation. Basically what they really want is to repeal the last 8 years and repudiate last November's Presidential election. They want to deny the economic triumph the American people have achieved, ignore the will of the people clearly expressed at the polls, and tax away even more of the people's money. And their plan for doing this is to give the American people a fiscal sob story: that revenue is scarce here in Washington and there isn't enough money to go around. Well, if people buy that story, it will be the greatest flimflam job I've seen since the movie ``The Sting.'' [Laughter]
The tax-and-spend crowd will not like our budget. Without even reading it, they've already gone on the air to say that. They'll complain loudly about one thing or another, but their biggest objection really will be that our budget proves that no new taxes are necessary, that the additional $84 billion that the American people will be sending to Washington is enough new revenue to both reduce the deficit and increase spending in priority areas.
As I'm sure you've already heard, not only do we reduce the deficit by nearly $70 billion, we also provide nearly $50 billion in increased spending. This is made possible by combining new revenues with previously scheduled reductions and savings in other areas. And let me stress that these savings do not involve reducing benefits to those who need them. In our budget there are more funds for improving air safety, fighting crime, and providing housing for the poor. There is another $600 million for the war on drugs. Funding for AIDS research and prevention is increased by 24 percent. And money to clean up toxic waste goes up by a fifth. We also increase funds for the science and space programs and for basic biomedical research. And student-aid funds are increased again, bringing them to a level 83 percent higher than where they stood in 1980.
Spending on Medicare and Medicaid will increase by $10 billion in the next fiscal year. But if the past is any guide, the headlines will claim that we've actually cut funding. Well, 'tain't so. But I think most of you have been in Washington long enough to know that when spending goes up, but by less than had been projected, they call that a cut, even though more of your tax dollars are being spent than before. I've learned that experts have a name for that kind of upside-down accounting. They call it hogwash.
The fact is that the increase in Medicare spending is being limited to 9 percent not by any cut in benefits to recipients but simply by controlling the increase in payments to health-care providers. Similarly, the increase in Medicaid spending will be limited to 5 percent by renewing the cost containment incentives that were so effective in the early 1980's. But again, benefits will not be reduced.
You know, some have questioned the accuracy of my description last month of an ``iron triangle'' composed of some members of Congress, the media, and special interest groups, which work against our efforts for fiscal responsibility in order to increase the size of government. I think that the reaction to our budget will be very telling. It will be interesting to see whether the media coverage makes it clear, for example, that Medicare and Medicaid are, in fact, increasing or that without any tax increase Congress will be getting an additional $84 billion in new revenues to appropriate. And as for the revenue projection, I wonder if they'll treat it as a rosy scenario or whether they'll report that the Congressional Budget Office, using a less favorable economic forecast, actually predicts revenues even higher than we do.
Well, the bottom line is that our budget protects the working families of America, provides adequate support for those who depend on government, maintains our national defense, reduces the deficit by nearly $70 billion, and does not raise taxes. Moreover, it places America on track to a balanced budget and even a modest surplus by fiscal year 1993. With America now in its 74th month of economic growth, I am proud to say this budget will help assure our nation's prosperity in the years to come.
It's been a long and hard fight, but it sure has been a rewarding one -- until you read what others say about it. [Laughter]
Well, I do thank you all for your support, and God bless you all.
Note: The President spoke at 1:50 p.m. in Room 450 of the Old Executive Office Building.