June 23, 1987
The President. Thank you very much, and let me say a special word of thanks to a long-time supporter of what we've been doing here in Washington, your president, John Sloan. It's a great pleasure to be here today. For 44 years the National Federation of Independent Business has spoken out for the most dynamic and creative force in our economy: America's independent businesses. For 6 years you've been a partner in the struggle to pull America back from the economic brink and get it back on the trail to the top.
You remember those days before we came into office. Inflation was the highest since World War II; interest rates were the highest since the Civil War; growth had ground to a stop; and the income of the typical American family was on a decade-long roller coaster ride to the cellar, while taxes shot for the sky. Those were particularly hard times for America's entrepreneurs, as venture capital for starting new businesses virtually evaporated and a flood of regulations began to sweep away the great American spirit of enterprise.
How had the greatest economy in the world been brought to its knees? Well, as one prominent historian of our times has written -- he said, "The most detailed analysis of this stagnation and decline suggested the causes were mainly political.'' They were, he said, "failure to control the money supply, excessive tax burdens, and government intervention and regulation'' -- in short, big government: its rules and its spending and the taxes and monetary policies it used to finance its spending.
Speaking of regulations, for some businesses, regulations became so excessive that it seemed there were always inspectors around and government paperwork to fill out. It reminds me of a story. At my age everything reminds you of a story. [Laughter] This one is about a man who started his own business. He did well, then bought a summer home in the country. And because he was good-natured, all of his relatives and his relatives' relatives took this as an invitation to visit all summer, every summer. One day the man was sitting with a young third niece-in-law, twice removed -- [laughter] -- who'd ignored hint after hint that she'd overstayed her welcome. Finally he sighed and said, ``There's no chance, is there, that you'll ever come on another visit here again?'' "Why,'' she said, ``Uncle, why shouldn't I come back?'' Well, he said, ``Well, how can you come back if you never go away?'' [Laughter]
Well, before we came into office, many entrepreneurs thought Federal regulators and paperwork would never go away. But we've ripped 40,000 pages from the Federal book of regulations. We've eliminated what seems to be about 600 million man-hours a year of filling out government paperwork. We came into office with a strategy: lower tax rates, less regulation, monetary stability, and controlling Federal spending through a constitutional amendment to balance the budget. Now, we put three of those four parts into practice, together with reducing the rate of growth in Federal spending, and you know the results: 4 of the best years in our history.
Today we're in the 55th month of uninterrupted growth. That's just 4 months shy of the longest peacetime expansion in American history. Now, in this expansion we've created more than 13 million new jobs -- that's more new jobs than Europe and Japan combined. Today if you drive down a street in the typical American neighborhood, you'll find more people at work than ever before in our history. We brought interest rates to the lowest level in a decade, inflation to the lowest in a quarter of a century. Real family income has risen strongly and steadily.
Now, I say "we,'' and I mean just that. You have been our partners every step of the way, and I don't mean just by supporting us in our battles with the big spenders, those tax-and-spend trolls under the Capitol dome. Our policies were designed to give you a chance to do what you do best. They were intended to release the American dream from its cell so that enterprising visionaries like you could tune up the accelerator, fill up the tank, and step on the gas of the greatest machine for beating poverty and building prosperity the world has ever known: the American free enterprise system. And sure enough, you came through. According to the foremost authority on job creation in America, between 1981 and 1985, businesses that were less than 5 years old and businesses that had fewer than 20 employees created more jobs than America as a whole. Without you and entrepreneurs like you, America would have lost millions of jobs in the last 6 years, instead of the large gains we in fact enjoyed.
Now, perhaps you're wondering why I'm repeating our story of success and economic growth once again. I've told it so many times before. Well, forgive me, but there are some fellows behind you and others all over Washington who seem to need reminding. I guess they have trouble remembering things. And when it comes to inventing horror stories, even [novelist] Stephen King might take a shining to their work. [Laughter] You may have heard our critics wringing their hands lately about the decline in the middle class; they say it's disappearing. Well, of course, the truth is just the opposite. More than 60 percent of the more than 13 million jobs we've created are in the high-paying managerial, professional, and technical occupations. And with families taking home more money each year, one authority on demographics has said, ``The middle class is still strong and should remain healthy.''
Our critics may not be able to remember -- but I can -- that several years ago they were saying that our economic recovery program would never work. Now those same people are saying the recovery won't last. [Laughter] Not long ago, one national newspaper ran a story headlined, ``What a Market Crash Might Look Like.'' That day the stock market had its second biggest gain in history. Yet when I listen to our critics with all their new versions of old charges, I remember hearing about a man who took a train ride, and he noted that the fellow across the aisle was making strange and elaborate gestures and grimaces and faces, and then laughing. Well, finally the man leaned over and asked if anything was wrong. ``No, no,'' the fellow said, ``it's just that when I travel, I pass the time telling stories to myself.'' Well, the man said, ``Then why do you make faces and gestures as if you're in pain?'' Well, the fellow answered, ``Every time I start a story, I have to tell myself I've heard it before.'' [Laughter]
Well, all the old repetitious doomsday talk about our strong economy has caused one noted British columnist on economics to shake his head at what he calls the ``morbid search of the U.S. economic tea leaves for bad news.'' But as Robert J. Samuelson, Newsweek's economics columnist, has warned: ``The danger in believing these myths and enacting policies based on them is that we will damage a job-creation process that has been a success.'' And that's just the point. Our critics know -- and we should, too -- that we've come to what I called in my television address the other night a breakpoint in time of choosing. Our critics have their own agenda, and they're pursuing it in every possible way.
Whether it's talk about lameducks or phony statistics, to make a strong economy look weak, our critics in Congress are trying to railroad tax-and-spend policies and all that goes with them back into the saddle here in Washington, and you know what that means. Congressional proposals like mandatory health plans and parental leave, a higher minimum wage, plant closing laws, double-breasted legislation which the House passed last week -- though not by enough to override a veto -- [applause] -- thank you -- and opposition to meaningful tort and product liability reform have led one commentator to say that ``Congress is at war with small business as almost never before.'' But since so many jobs come from your kind of entrepreneurial businesses, I'd put it another way: Congress has declared war on American jobs, and I'm not going to stand for it.
Nowhere is Congress' new agenda more apparent than on the budget. Last week the leadership in the House and the Senate agreed on a budget plan that would raise taxes and cut defense -- this at a time when our national defense is just starting to get the Soviets to talk seriously about arms reduction. The leadership of the House has come up with so many ways of increasing taxes that Capitol Hill has started to talk about the Tax-of-the-Month Club. They've even suggested breaking faith with the American people and putting off the last year of tax reform, even though the reduction in rates in the last year of the reform promises to set off a new wave of job creation like the one we got in 1983, when the last installment of the '81 tax cut kicked in. That was when it happened. Well, I'm going to repeat it again. The Tax-of-the-Month Club is one club the American people aren't joining, and neither am I. Congress' answer to the deficit problem is more taxes for more spending. It's time to say no to the free spenders. I will veto any legislation that raises the American people's taxes. [Applause] You'd better be careful. Remembering the business that I was in, I might decide I've said all I need to say. [Laughter]
Recently one of the leaders in Congress said that ``Congress is not going to move on domestic programs.'' No more cuts in spending. They talk as if domestic spending were down to the bone. But they showed their true colors at the beginning of the session when they passed two outrageous spending bills over my veto. To give you a sample, one of these porkers, the highway bill, included one project that will eat up 14 percent of all the Nation's new transit money. When that project is completed, its construction costs may equal $6 for every passenger trip. It would be cheaper to put them all in taxicabs. [Laughter]
On another project, Congress will spend more than $2 billion for a short stretch of road that even the Federal Highway Administration has termed of "limited benefit.'' A line-item veto sure would've come in handy on the highway bill. You know what a line-item veto could've done with that bill. There was much in that bill that was proper with regard to improving our highways and all, and the money coming out of the highway trust fund. I could have okayed and not vetoed that bill and signed it if I'd had the privilege of vetoing out some of those smelly pork items that were smuggled in. [Laughter]
The new line of the big spenders is that the mood of the public has shifted and that the American people want more spending. Well, it's summer, and maybe they've been out in the sun too long. [Laughter] If you hear such fevered talk, wet it down with a little common sense. The American people don't want more spending; they want better results. For example, the American people care about the family farmer, and so do I. But neither they nor I want a farm program that makes our farmers less competitive in the world market. And no one wants one that gives, as ours does, almost $14 million to one wealthy farmer and little or nothing to most family farmers, or one that puts Department of Agriculture extension service programs in counties where there are no farmers. [Laughter]
Now, anyone who tells you we can't cut the deficit without raising taxes and attacking defense is not telling you the truth. Last year we got the special interests out of the tax code. Now it's time to get them out of the budget, and that's just what I mean to do. Last week I spoke to the Nation about an economic bill of rights, including a line-item veto and a balanced budget amendment. Some said that I was singing golden oldies -- nothing new. Well, the line-item veto and the balanced budget amendment may be oldies, but they're also goodies. And those who don't think they stand a chance on the charts had better keep their dial tuned to this station. [Laughter] It's rock 'n' roll time again at the White House.
It's just this simple: Ever since the middle seventies, when Congress shoved the President out of the way and took over the budget process almost entirely, deficits have soared. Congress' own laws require it to pass all appropriations bills by the beginning of the fiscal year. It has been 11 years since they have done that. It's been 10 years since they've passed every appropriation bill by the end of the fiscal year. I've agreed to have members of my administration talk with Congress about the budget process, but let me say, the problem here goes deeper. Our founders intended the President to represent the broad national interest, including the interest in an overall limit on spending. They feared an imperial Congress, one that would become a den for special interests. That's why they gave the President the veto. But in recent years, Congress has found ways to weaken the Presidential veto power.
Last year, for example, they threw all government appropriations into one gigantic, catchall resolution. My choice: sign or shut down the Government. One scholar looked at this episode and wrote, in her words: ``Congress was playing the deadly game of chicken and indulging in a legislative practice that subverts the veto.'' And she finished saying: ``It's hard to escape the conclusion that Congress can't control itself. We may be heading for a constitutional crisis.''
Well, this is why I've said over and over again it's time to give the President what 43 Governors have, what I had when I was Governor of California: the ability to veto spending project by project, a line-item veto. We also need a constitutional provision that 44 States have written into their own constitutions. Polls show that 85 percent of the American people favor a balanced budget amendment and have for years. But we can't even get an up and down vote in Congress. The reason: The big spenders don't want to face a balanced budget -- pure and simple.
Well, maybe it's getting time for the American people to take matters into their own hands. An amendment enters the Constitution when three-fourths of the States approve it. But first someone has to draft the specific amendment for all of them to consider. Under the Constitution, Congress can do that, or the States themselves can call a special convention to frame the common language. It takes 34 States to call such a meeting. Thirty-two have already asked for one to draw up a balanced budget amendment. Now, I would prefer to have Congress do the drafting. It would be quicker, easier. But one way or another, we owe it to our children to see to it that before the decade is out the Constitution of the United States of America includes a balanced budget.
Line-item veto, balanced budget amendment -- these are parts of the economic bill of rights that I'll be discussing in the weeks ahead. And this is the choice we have: Go back to the days of tax and spend, stagnation and inflation, or finish the work we began 6 years ago and keep the prosperity we've known for the last 55 months, going not just for the next year or two but into the next decade and into the next century. Now, our choice is not right or left but forward or back, up or down. All over the world, nations are finding that less government spending, lower taxes, and freer markets means greater prosperity, less poverty, more opportunity for all people. In Peru, a developing country very different from our own, it's been found that the only real paths out of poverty and to opportunity are in those parts of the economy that are least taxed and least regulated. There's an old and simple principle here: Man soars highest when he is most free.
So, this is our choice: more freedom or less, more opportunity or less. Our critics talk in one breath about being number one in world trade and in the next about increasing taxes and regulations. They should look at Japan, which is trying to copy our tax cuts. And they should listen to the chairman of the Japanese company Sony, who said to Americans recently: ``Your industry needs more relief from government regulation in order to restore your worldwide competitiveness.''
The path of freedom, the path of opportunity -- this is the path Americans have always taken to greatness. This is the path of our future. Two hundred and twelve years ago a small company of minutemen stood their ground at Concord Bridge and changed history. We, too, today must stand our ground. We, too, can fire a shot heard round the world. I need your help in the months ahead. We've come this far together; let's keep marching on. And when I say I need your help -- right now with budget reform, with this thing that we're in and that I've said -- I'm going to be going around the country, doing what I'm doing here and talking about this. What we need is one of those things that happens when the American people, you out there, organize and take your organizations and come together in a movement that says to Washington: ``This is what we want.''
And the next time you hear one of those fellows on the Hill say that I'm doubletalking because I haven't submitted a single balanced budget since I've been here -- well, the answer to that is, of course not. With the budget deficits that we've had, there is no way that you could balance the budget in a single year without causing great damage and harm to people that you don't want to hurt, including those farmers I mentioned a moment ago. So, of course not. But the thing we have is what Congress passed and now won't obey: Gramm-Rudman-Hollings. The answer to a balanced budget is: Get on a path of declining deficits until you point to a specific date at which the balanced budget amendment will be in effect, because we will have brought our spending down to within our income.
So, let's be hearing from each other in the days ahead. And you know something, it might be a lot of fun. Thank you. God bless you all. [Applause]
Mr. Sloan. Ladies and gentleman, just a moment please. Mr. President, I think you know we love you from that response, and we thank you very much. You know, there's a great symbol in this country: the Concord Minuteman. And we at NFIB have used that as the symbol as the guardian of small business. It gives me the deepest honor and pleasure to present to you this special guardian of small business for your important role of leadership in protecting the small business owner. It reads: ``Presented to President Ronald Reagan, America's Guardian of Small Business, June 23d, 1987, with heartfelt thanks from the over half million members of the National Federation of Independent Business.''
The President. Thank you. I've been a fan of his and have quoted him many times. Isn't he the fellow that said, ``If they mean to have a war, let it start here.'' [Applause] Thank you.
Note: The President spoke at 2:32 p.m. in the International Ballroom at the Washington Hilton Hotel.