Remarks to Congressional Supporters of the Balanced Budget and Emergency Deficit Control Act of 1985

December 18, 1985

Good morning, and welcome to the White House. There's good news for the American people in the paper this morning. Tax reform is alive and well and kicking. [Laughter] What's that I heard about lameduckery? [Laughter]

Congratulations are due to all of those in the House who worked so long and hard to bring us to this point. And we can now look forward to a lot more hard work, but today America can feel that a true tax reform is within its grasp. We must not disappoint the American people. We must move forward from here with all deliberate speed to pass a tax reform bill that will spur economic growth, create jobs, and give America's families the long overdue tax relief that they deserve. In this last week, we have begun to put into place a solid, progrowth framework of lowered marginal tax rates and spending restraints. And together, they promise to make our economy fit and trim and competitive for the future.

Now, Phil, Warren, and Fritz, you who have given your names to Gramm-Rudman-Hollings bill, also deserve our congratulations. From now on when the public hears the names Gramm, Rudman, or Hollings, they'll think deficit reduction. And Connie Mack and Dick Cheney, who followed quite quickly in the House, you deserve our thanks. All of you here today who have given so much time and hard work to this bill have earned your country's thanks. The Government Gargantua has been gorging on taxpayer dollars for too long. We plan to get it slimmed down into shape by the end of the decade.

For years we've been warning that the growing deficit reflects a dangerous increase in the size of government. Polls, too, demonstrate public concern. Now Gramm-Rudman-Hollings locks in a long-term commitment to lowering and eventually eliminating deficits. It's my hope that history will record last week as the time when the relentless expansion of the Federal Government was finally halted and put into reverse. But we can't afford to be complacent. It's going to take a lot more hard work and many more difficult decisions if we're to live up to the promise of this moment. The law now puts a time limit on governmental overspending. It mandates a balanced budget. But while Gramm-Rudman-Hollings gives us some guidelines and directions, it doesn't take us to our destination. It's essential as we embark on this journey toward a balanced budget that we keep a clear sense of our priorities and hold our first purposes firmly in mind.

We must not allow Gramm-Rudman-Hollings to become an excuse to avoid the tough decisions entailed in cutting back on runaway domestic spending. We will not only be held responsible for cutting the deficit; ultimately, we will be judged on how we reduce the deficit. Will we, for instance, continue to fund welfare for the rich? Will we continue to insist that low-income taxpayers subsidize programs for people who make 10 or 11 times as much money as they do? Will we fund wasteful pork barrel programs at the expense of essential defense requirements? Will we stifle economic growth and kill off our new-found prosperity with a tax increase? Gramm-Rudman-Hollings won't make our decisions any easier, but it will make our choices crystal clear for all to see. Last year, for instance, we said the United States Government had no business running a railroad -- and running it, by the way, hundreds of millions of dollars in the red. We proposed eliminating Federal subsidies to Amtrak, but intense lobbying pressure kept money flowing. Next time around, no program will get a free ride. We can abide by the letter of the Gramm-Rudman-Hollings law and still violate its spirit.

If we try to accomplish deficit reduction by tax increases or through just deep cuts in defense that endanger our national security, we will have failed in our paramount duty to the American people -- the duty of good and responsible government. Raising taxes in order to reduce the deficit is robbing Peter to pay Paul, and Peter went bankrupt a long time ago. Whether excess spending is financed through taxes or borrowing, it puts a heavy burden on the private economy and slows the engines of prosperity. In fact, by slowing economic growth, a tax increase might well make the deficit bigger, not smaller. And I want you all to know that when I sat at my desk in the Oval Office and signed Gramm-Rudman-Hollings, I kept my veto pen ready in the top drawer. It's sitting there right now waiting for any tax increase that might come my way.

We should also remember that when we passed Gramm-Rudman-Hollings, we didn't absolve ourselves of our first responsibility as the elected representatives of this country to provide for the national defense. The last thing we want to do is return our country to the weakened, vulnerable state in which we found it in 1980. It was a stronger and reinvigorated national defense that allowed the United States to move swiftly and confidently, liberating Grenada from communism and bringing the terrorist murderers of Leon Klinghoffer to justice. It was this renewed sense of purpose and commitment that gave confidence to friends and allies around the globe, and particularly to those struggling for freedom against Soviet-imposed regimes.

And it was our determination to proceed with the modernization of our nuclear deterrent that, through Geneva, has improved the prospects for real arms reduction. Maintaining a strong national defense is not only our obligation to America, it's our duty as the last, best hope of mankind to the cause of human freedom. I feel confident that if Congress abides by its already established agreement for real growth in defense, we can meet our national security requirements. We will meet the Gramm-Rudman-Hollings targets in the budgets that we submit to Congress, and we'll do it the right way -- by cutting or eliminating wasteful and unnecessary programs.

I hope that each of us will pledge to follow through in the spirit of Gramm-Rudman-Hollings to see that government does only that which it must do and no more. And I hope that we'll all work together to secure the deficit cutting gains that we make by adopting a balanced budget amendment to the Constitution. So, as I said, the real work of controlling Federal spending has only just begun. We've taken a dramatic step forward; let's keep the momentum going.

Thank you all for coming down here. God bless you all.

Note: The President spoke at 10:50 a.m. in the State Dining Room at the White House.