January 3, 1987
My fellow Americans:
Now that the new year is here and the holidays are just about over, Nancy and I, like you, are getting ready to return to work; and for me that means that in just a few days I'll be sending Congress my proposal for next year's Federal budget. You know, when you look at a budget, all you see are long rows of numbers. They go on for pages, and they're not very exciting. But those numbers always add up to something, and it's not just a surplus or a deficit. No, it's also a plan, a hope, a vision of what America is and of where America is going.
Six years ago we began our country on the path to greater growth and opportunity. We said it was time to put the days of tax and spend in the past and trust less in government and more in America's families, communities, and values. Some called the values we talked about radical and even revolutionary. Well, you know, I had to smile when they called it the Reagan revolution, because, yes, those values may have been revolutionary, but they were from a revolution much older than me -- the revolution that started with the Declaration of Independence and the Constitution, the revolution continued by every American who ever plowed the land or worked in a factory, an office, or a store, or built a business or stayed home and built a family.
Those have been the values that shaped this budget as well. What are they? Well, one is that government shouldn't tax away a man or woman's incentives to work, save, and invest, and that taxes should begin only after a family has earned enough to live on. That's why this is a "no-tax-increase'' budget. Last year America pushed aside the special interests and passed a tax reform bill that was prosavings, proinvestment, profamily. By next year, as a result of tax reform, the top tax rate will be 28 percent; the standard deduction and personal exemptions for your family will have gone up by 60 percent; and most families will pay a rate of no more than 15 percent. But now some in Congress are saying they'd like to take part of this away, even before it goes into effect. They'd rather raise your taxes than cut their spending. Well, not if I have anything to say about it.
This budget cuts spending and leaves your family's paycheck alone, and that's another important value. Like your family, the Federal Government should live within its means. This year we're taking an historic step toward that goal, because the Federal Government is doing less real spending than last year, something that hasn't happened since 1973. That's right -- not in almost 14 years. And with the coming year's budget, we plan to make it 2 years in a row. By the way, Congress wouldn't have achieved these spending cuts without the discipline of the Gramm-Rudman law. That's why those who say do away with Gramm-Rudman are just plain wrong. Gramm-Rudman has begun to put the monster of big spending into a cage, and we won't let that monster out.
The budget I'm proposing will meet the Gramm-Rudman target. It will bring the Federal deficit within the range of our normal peacetime experience, and it will do this without shortchanging important commitments. We will spend more than ever for America's elderly, for law and drug enforcement, for AIDS research, for health care, and for air traffic safety. And in one vital area, defense, we'll be stopping a dangerous slide. For the last 2 years defense spending, after inflation, has dropped, even while our adversaries spent more. To let this decline continue would endanger every family in America and world peace as well. With this budget, we'll give defense a modest but important boost, the minimum I believe is necessary to ensure America's peace and security. But while we'll be spending more in many areas, we'll also be looking at the invoices more carefully than ever. In defense, in health care, and many areas, we've asked: Are we getting what we think we're paying for? And where the answer is no, we plan to make changes, and those changes are reflected in this budget.
All of this will require the help of Congress. That's why I was disappointed to hear that the new Democratic leadership had declared that their first priority is to pass the budget-busting clean water bill that I vetoed last year. Well, now, I'm in favor of clean water, but the only thing clean in this bill is its name. It spends billions more than is needed. If the Democratic leadership decides to push this bill, they'll be sending a clear signal that they've sided with those who want to raise your taxes and take the lid off spending. I am willing to work with congressional leaders for a reasonable bill. But I have a special message to the new Congress: You can't have it both ways. You cannot decry deficits and then pass budget-busting legislation. The American people expect us to work together to eliminate the deficit. I remain ready to do so.
Until next week, thanks for listening, and God bless you.
Note: The President spoke at 12:06 p.m. from the Oval Office at the White House.