October 15, 1985

Thank you, Bob, and ladies and gentlemen here on the dais with me and all of you, thank you very much. You know, in the business that I used to be in, I don't think I can top what's already happened here. I should maybe take a bow and leave.

But it's great to be back here in the great city of Milwaukee. I noticed on the way that there were some protesters outside. Bob, I always think of protesters as a good luck sign. We had them all through last fall's campaign, and as I remember that election turned out fair to middling. [Laughter] Now, that means, then, that 1986 is going to be a victory year for Bob Kasten, too. I just know that a State whose motto is ``Forward'' and whose official song is ``On Wisconsin'' is going to want a fighter, a man with bold vision for the future and the imagination, willpower, and just plain guts to take us there. And that man is Bob Kasten. He's just one of the best Senators your State has ever had. Incidentally, I want you to know that I have a few little pangs, too, when I said, ``On Wisconsin.'' I played football south and a little west of here, Dixon, Illinois, in our high school. And like so many high schools, our song was ``Onward Dixon,'' and it sounded an awful lot like ``On Wisconsin'' -- [laughter] -- in both lyrics and music.

Well, in the battle to control Federal spending and make our tax system fairer, as Bob was telling you, Bob is leading the charge. He's effective because he works hard, knows the issues inside and out, and really cares about the people of Wisconsin. And when it comes to delivering for Wisconsin and America, you can count on Bob Kasten. He'll always come through for you. Wisconsin needs Bob Kasten, but you know that already. I'm here to tell you America needs him, too. Bob has been a leader in America's economic renaissance, keeping our nation on an upward path of economic growth and prosperity. You know, I've heard that there is a new version of Trivial Pursuit, that game; it's called the economist's edition. In this one there are 100 questions, 3,000 answers. [Laughter] But Bob has learned one lesson well from history: The one great nonanswer in economics is tax increases.

Tax rates in this country long ago passed the point where they became counterproductive, stunting economic growth and actually bringing in less revenue than the tax rate cuts that spur growth and draw investment out of wasteful loopholes and back into productive economy. Look at the effect of our first across-the-board 25-percent tax cut. Now, I've heard some voices of the cynics in Washington suggesting that that contributed to the deficits. Not on your life! First of all, that was the principal cause of the economic recovery that we've been having. But second of all, would it interest you to know that the revenues for government have increased as the rates were reduced. Everything -- you know, it was a 3-year installment plan -- our program, economic program -- and finally, it was all in place. And so, 1984 was really the first year when all the elements were there so you would see what had been happening -- and the tax revenues were increasing at a rapid pace. In the first 11 months of fiscal '85, this year, Federal revenues grew a remarkable 10 percent, and that's quite unusual.

Let me suggest that over the long haul, the Federal Government simply can't raise revenue any faster than by cutting tax rates and then cutting tax rates again. It stimulates everybody to do better and more people go to work. You know, as the great Yogi Berra once said, ``You can observe a lot just by watching.'' [Laughter] He's full of those. [Laughter]

Well, Bob Kasten knows these issues inside out, and that's why he's in the forefront of the fight for our tax overhaul. He's going to make sure that we get a tax system that's profamily, profairness, and progrowth. And incidentally, in the House just a short time ago, the Democratic-dominated committee having to do with youth and family and all said that, in their study of all the tax proposals before the Congress, this one is the most profamily. And that's one good reason I'm confident that come November 1986, the people of Wisconsin are going to say, ``Six more years for Bob Kasten in the United States Senate.'' Bob knows that the economy is more than numbers; the economy is people, their hopes and dreams, their hard work, and their faith. He knows that high taxes are more than just an economic mistake; they're a human mistake. They destroy our dreams; they dash our hopes; they make our hard work futile; and they undermine our faith. And he knows that America's economic renaissance didn't come about through government programs; it is the spirit of America unleashed, a spirit that knows no bounds, that can scale any heights.

If I had to give just one brief phrase as to what was at the bottom of and the best description of what our economic program was beginning in 1981 is: We just tried to get government out of your way. I mentioned a moment ago about what tax cuts, I thought, had done in regard to the recovery. Well, we have had one of the strongest economic expansions in our nation's history. We have helped put nearly 8\1/2\ million more people to work -- new jobs -- in this country in the last 34 months alone. And after trailing behind so much in the years just immediately following World War II, when our Marshall plan had set up the economies of so many other countries, now a Japanese study shows that United States plant and equipment is, today, newer than Japan's, and that's for the first time since World War II. And that came about because more businesses and industries and more people had more money to invest. And that's what does it.

Just a few years ago, there was only $39 million available in venture capital in the United States. And last year there was $4 billion of venture capital available for investment in business and industry in the United States. America is the world's leader in job creation, growth, and technological innovation. And I can tell you it was a big thrill for me just recently -- well, last year's economic summit with the other six countries that are in that summit with us -- and when I got there -- and instead of them jumping on me for this or that or the value of the dollar, they said, ``What explains the American miracle?'' And so, I had the pleasure of sitting there and telling them how they, too, could have a miracle -- cut spending in their governments and do away with some of the rigidities that were harassing their economic programs and their private industry. And they all listened. Now, we'll see if they'll do it. [Laughter]

Let's continue to build the American dream by passing a fair, progrowth American tax plan this year, in 1985. And just as a free society needs laws, so, too, a free economy needs the assurance of a stable dollar, a dollar that will be worth as much tomorrow as it is today, so that savings can't be stolen away by inflation and Americans can invest in the future with confidence. This stealing away of the people's money -- and government contributed to that also. In 1977 the average income in the United States was -- the weekly wage -- was $189; this year that average is $299. But wait a minute. Let me tell you what's been done to all of you -- this was throughout those years, that great spiral of inflation -- well, that $299 in '77 dollars has only $171 as compared to the 189 in 1977. And yet by going up to $299, how many tax brackets did you go up through? That's why we've indexed the tax brackets for the future, so government can never again make a profit on your cost-of-living pay raises.

Now, we've got another thing in Washington that's cooking right now. Let's put the force of law behind the deficit reduction with the Gramm-Rudman-Hollings bill. Last week the Republican Senate, with the support of a majority of Democrat Senators, adopted the Gramm-Rudman-Hollings deficit reduction plan. This farsighted legislation puts in place a fair, enforceable method of reducing the budget deficit by equal amounts each year, mandating a balanced budget by the end of 1980 -- or 1990; I'm sorry. 1980 is kind of Freudian with me; something happened then, too. [Laughter]

Well, Friday the House of Representatives took a step in the right direction, but we still have a large hurdle to get over. I know that there are some critics now that are saying this is some kind of gimmick. Well, ever since 1981 we have been trying to whittle at the deficits by attacking government spending. And then, those who wanted to defend particular pet spending programs -- Senator Russell Long once said, you know, ``The game in Washington is don't cut you and don't cut me, cut that fellow behind the tree.'' [Laughter] Well, then, every year we've had the same battle, trying to whittle down spending to reduce the deficits.

What this bill does is make this a 5-year program, a program in which we start a deficit decline that by 1990 will bring us to the even stage. And, then, I pray that we'll have the sense to have a constitutional amendment that says from 1990 on the Federal Government will not spend more than it takes in. You see what this does now? This makes it so that somebody that tries to bust the budget now in the future will be going against a plan that has been put into effect by law. And we won't have to every year fight that same futile and frustrating fight with the big spenders. In a few days, the House-Senate conferees will meet to iron out their differences. The American people I don't think will tolerate any attempt to scuttle this last, best hope to come to grips with the budget deficit. The days of the big spender are over. The House-Senate conference committee should realize the American people are watching.

America's future never held more promise, but we need Bob Kasten in the Senate to make that promise real. Our agenda is full: fair taxes, balanced budgets, and, beyond the economy, excellence in education and the end to government-sanctioned discrimination and, important above all, using our technology, in which we're the world's leader, to make peace more secure for generations to come.

I know you've heard all about it. First of all, a hostile voice was raised and called our defense plan that we're working on Star Wars. Well, it isn't anything of the kind. Then, we've been going by SDI, which is the Strategic Defense Initiative. Well, I tell you what I prefer to call it. It is the strategic space shield, a nonlethal weapon that is not going to kill people, but that is going to kill antiballistic missiles before they can reach their target. Today our deterrent, our war deterrent, is based on: They have missiles, we have missiles; and if they fire their missiles and kill millions of our people, we will fire ours and kill millions of theirs. That's no way to go. How long can the American people stand still for a strategy that threatens so many innocent lives? But our goal is that once we can prove and establish -- we can with this research -- that the kind of weapon we're talking about, a defensive weapon aimed at missiles, is effective, then, we really can do away with nuclear weapons in the world once and for all, because they'll be useless from then on.

We're searching for the most cost-effective means of providing for our defense based on rapid advances in technology, and that's the American way. We are high tech and the highest tech in the world today. Computers that, not so long ago, used to fill whole rooms and cost millions of dollars are today outperformed by little silicon chips smaller than your thumbnail and costing only a fraction of a penny. Technology is getting more productive and cheaper every day. Doesn't a cost-effective defense, allied with high technology, make sense in this day and age? The semiconductor industry is discovering a world of seemingly unlimited possibility in the infinitely small recesses of a grain of sand. Our technological achievements of the past few years are one of the greatest stories ever told, and if we can bring this great resource of knowledge and wisdom to bear in creating a more secure and peaceful world, it may be one of the greatest blessings that mankind has ever received.

Well, it's been a real pleasure coming -- oh, I'm going to interrupt for a second and just tell you something. We have a new head at the United Nations, you know, former General Walters. And General Walters recently -- he's Ambassador Walters now -- was on a mission for us to China. And there they were speaking critically to him of this strategic shield that I have mentioned, and they didn't seem very optimistic about it. And then one of the government officials there said to him, ``We have a problem here in China that we often speak of.'' He said, ``If a man has invented a spear that can penetrate any shield, and another man has invented an impenetrable shield and they meet, what happens?'' And Ambassador Walters said, ``I don't know the answer to that. But,'' he said, ``I do know what happens if a man with a spear that can penetrate anything meets a man who doesn't have a shield at all -- I know what happens then. They sort of changed their mind about our defense program.''

Well, it's been a real pleasure coming out to this beautiful State once again. Pretty soon I am going to have to be getting back to Washington, and I'm just hoping that the people of Wisconsin will send Bob Kasten back there to keep me company. Bob is the Senator Wisconsin needs to represent it into the 1990's, and he's the kind of leader America needs to carry us proudly into the 21st century. So, you elect Bob Kasten in 1986 and that would really make my day. And it would make America's day, too.

And I just want to thank you all. God bless you, and we'll both be there to thank you in Washington.

Note: The President spoke at 6:32 p.m. in Bruce Hall at the Milwaukee Convention Center. He was introduced by Senator Kasten. Prior to his remarks, the President attended a reception at the center for major donors to Senator Kasten's reelection campaign. Following his remarks, the President returned to Washington, DC.