Remarks at a Senate Republican Policy Committee Luncheon

July 14, 1981

Thank you, John and Howard. I appreciate that, and I appreciate your very warm welcome. I want to thank you all for accommodating to my schedule. It's nice to be on the end of a welcome for a change instead of doing it the other way in the Oval Office, especially when it's a welcome from the leadership of the new majority party in the United States Senate.

So, Mr. Vice President, the gentlemen I've recognized already, and Ted, Strom -- I don't think I've had a chance to congratulate you yet, Strom, on being the President Pro Tem, and I do so now. I think all of you remember that just a few years ago we were not only an endangered species, there were some who said we had become extinct. And if that's true, an awful lot of you must be awfully stubborn elephants, because as far as I'm concerned, the most exciting story in politics today is the resurgence of the Grand Old Party, and we're the emerging majority party in America.

We all know why that's happening. We're convincing more and more Americans to come under our tent, not just because we're Republicans, but because we're offering better, more secure, and more exciting visions of the future. What we're saying, and what more and more citizens, I think, are saying, is that it's time to give this economy and this government back to the people. And let me tell you, after watching the phenomenal progress that you've made in just 5\1/2\ months, I'm more convinced than ever that we can, and we will, give it back to the people.

Howard Baker, Ted Stevens, Bob Dole, Pete Domenici, all the rest of you, thanks to your tremendous leadership and, let me add, thanks to the tremendous leadership by your counterparts on the House side, we've done more in a shorter period of time to put the economy of this country back on a sound footing than any government in the past 50 years. And I think you can be proud of that. But remember, we're still a long way from home. Three obstacles stand between us and the victory we want to give the people this summer -- a victory they deserve and they've been waiting for so long.

First, we need a successful conference on the budget bill. And if you can give us that and pave the way for a final passage of more than $140 billion in budget savings, you will have demonstrated that reconciliation really works, and you'll have proved to the public that you really meant business when you promised to begin making this government live within its means.

Second, we have to have a good tax bill -- I'm sure you knew I'd mention that -- [laughter] -- completed and ready to sign before Congress leaves for recess in August. Unless that happens, the new incentives the economy so badly needs to encourage more savings and investment will once again be in doubt.

Now, the so-called tax bill that is being peddled by the Democratic leadership in the House is actually something of a wolf in sheep's clothing, if I can coin a cliche. How can they look Americans in the eye and say that ``we're reducing you taxes'' when they know they're offering only a 15-percent tax cut against a 22-percent built-in tax increase with no tax cut at all for 1984? They say it's too dangerous to give individuals a commitment for 3 years ahead. And yet, when they talk about the business tax, they're planning to give them a cut that extends for 7 years ahead -- continuous cuts. And it's a funny thing, too, how you can compare their approach to tax cuts with tax increases, because in 1977 they were responsible for the biggest single tax cut in our nation's history, and it extends in stages 9 years ahead, all the way up to 1986 when the last tax increase goes into effect.

Of course, they're offering the poor man's tax bill, and we're out to favor the rich. That's why they've gone out of their way to offer 2,500 commodities speculators a tax break of some $400 million. [Laughter]

The bottom line is that our bill reduces taxes in word and in deed while theirs deals in make-believe. The irony is, so many in Congress who now criticize our proposed tax reductions as inadequate for the workers are the very people who approved the terrible tax increases on the working Americans a few years ago in the first place. And yet, those same people are unwilling to go far enough to get the huge future tax increases reduced.

They offer the mirage of tax reduction while working to lock in a tax increase so they'll have more and more money, I suppose, to spend on more and more government. But it won't work, because I don't think you're fooled. And the American people aren't fooled; and they want us to start protecting their family budgets by giving less to the Federal budget, and we agree.

Our present tax system exerts a heavy drag on the growth that it siphons out of the private economy -- too large a share of personal and business purchasing power -- and it reduces the financial incentives for personal effort, investment, and risktaking. The next time you're in a discussion with one of our friends across the aisle, you might quote that, because those are the words of John F. Kennedy when he gave us the last tax cut, real tax cut, that we've had in this government, almost 20 years ago.

Thank you all very much for inviting me to lunch.

Note: The President spoke at 12:19 p.m. in Room S - 207 at the Capitol.

Prior to the luncheon, the President met in the Senate majority leader's office with the Vice President, Senator Strom Thurmond, Senator John Tower, chairman of the Republican Policy Committee, and Senator Howard H. Baker, Jr., Senate majority leader. Following the luncheon, the President visited briefly with Senator Robert C. Byrd, Senate minority leader.