17 February 1993 - Please note this is not an offical State of the Union address
Mr. President, Mr. Speaker:
When Presidents speak to the Congress and the nation from this podium,
they typically comment on the full range of challenges and opportunities
that face us. But these are not ordinary times. For all the many tasks
that require our attention, one calls on us to focus, unite, and act. Together,
we must make our economy thrive once again.
It has been too long – at least three decades – since a President has
challenged Americans to join him on our great national journey, not merely
to consume the bounty of today but to invest for a much greater one tomorrow.
Nations, like individuals, must ultimately decide how they wish to conduct
themselves – how they wish to be thought of by those with whom they live,
and, later, how they wish to be judged by history. Like every man and woman,
they must decide whether they are prepared to rise to the occasions history
presents them.
We have always been a people of youthful energy and daring spirit. And
at this historic moment, as communism has fallen, as freedom is spreading
around the world, as a global economy is taking shape before our eyes,
Americans have called for change – and now it is up to those of us in this
room to deliver.
Our nation needs a new direction. Tonight, I present to you our comprehensive
plan to set our nation on that new course.
I believe we will find our new direction in the basic values that brought
us here: opportunity, individual responsibility, community, work, family,
and faith. We need to break the old habits of both political parties in
Washington. We must say that there can be no more something for nothing,
and we are all in this together.
The conditions which brought us to this point are well known. Two decades
of low productivity and stagnant wages; persistent unemployment and underemployment;
years of huge government deficits and declining investment in our future;
exploding health care costs, and lack of coverage; legions of poor children;
educational and job training opportunities inadequate to the demands of
a high wage, high growth economy. For too long we drifted without a strong
sense of purpose, responsibility or community, and our political system
too often was paralyzed by special interest groups, partisan bickering
and the sheer complexity of our problems.
I know we can do better, because ours remains the greatest nation on
earth, the world's strongest economy, and the world's only military superpower.
If we have the vision, the will and the heart to make the changes we must,
we will enter the 21st century with possibilities our parents could not
even have imagined, having secured the American dream for ourselves and
future generations.
I well remember, twelve years ago Ronald Reagan stood at this podium
and told the American people that if our debt were stacked in dollar bills,
the stack would reach sixty-seven miles into space. Today, that stack would
reach two hundred and sixty-seven miles.
I tell you this not to assign blame for this problem. There is plenty
of blame to go around – in both branches of the government and both parties.
The time for blame has come to an end. I came here to accept responsibility;
I want you to accept responsibility for the future of this country, and
if we do it right, I don't care who gets the credit for it.
Economic Plan
Our plan has four fundamental components: First, it reverses our economic
decline, by jump-starting the economy in the short term and investing in
our people, their jobs and their incomes in the long term.
Second, it changes the rhetoric of the past into the actions of the
present, by honoring work and families in every part of our lives.
Third, it substantially reduces the federal deficit, honestly and credibly.
Finally, it earns the trust of the American people by paying for these
plans first with cuts in government waste and inefficiency -- cuts, not
gimmicks, in government spending – and by fairness, for a change, in the
way the burden is borne.
Tonight, I want to talk about what government can do, because I believe
our government must do more for the hard-working people who pay its way.
But let me say first: government cannot do this alone. The private sector
is the engine of economic growth in America. And every one of us can be
an engine of change in our own lives. We've got to give people more opportunity,
but we must also demand more responsibility in return.
Creating Jobs
Our immediate priority is to create jobs, now. Some say we're in a recovery.
Well, we all hope so. But we're simply not creating jobs. And there is
no recovery worth its salt that does not begin with new jobs.
To create jobs and guarantee a strong recovery, I call on Congress to
enact an immediate jobs package of over 30 billion dollars. We will put
people to work right now and create half a million jobs: jobs that will
rebuild our highways and airports, renovate housing, bring new life to
our rural towns, and spread hope and opportunity among our nation's youth
with almost 700,000 jobs for them this summer alone. And I invite America's
business leaders to join us in this effort, so that together we can create
a million summer jobs in cities and poor rural areas for our young people.
Second, our plan looks beyond today's business cycle, because our aspirations
extend into the next century. The heart of our plan deals with the long
term. It has an investment program designed to increase public and private
investment in areas critical to our economic future. And it has a deficit
reduction program that will increase savings available for private sector
investment, lower interest rates, decrease the percentage of the federal
budget claimed by interest payments, and decrease the risk of financial
market disruptions that could adversely affect the economy.
Over the long run, all this should result in a higher rate of economic
growth, improved productivity, higher wages, more high- quality jobs and
an improved economic competitive position in the global economy.
In order to accomplish public investment and deficit reduction, government
spending is being cut and taxes are being increased. Our spending cuts
were carefully thought through to try to minimize any economic impact,
to capture the peace dividend for investment purposes, and to switch the
balance in the budget from consumption to investment. The tax increases
and spending cuts were both designed to assure that the cost of this historic
program to face and deal with our problems is borne by those who could
most readily afford that cost.
Our plan is designed to improve the health of American business through
lower interest rates, improved infrastructure, better trained workers,
and a stronger middle class. Because small businesses generate most of
our nation's jobs, our plan includes the boldest targeted incentives for
small business in history. We propose a permanent investment tax credit
for small business, and new rewards for entrepreneurs who take risks. We
will give small business access to the brilliant technologies of our time
and to the credit they need to prosper and flourish.
With a new network of community development banks, and one billion dollars
to make the dream of enterprise zones real, we will begin to bring new
hope and new jobs to storefronts and factories from South Boston to South
Texas to south-central Los Angeles.
Our plan invests in our roads, bridges, transit facilities; in high-
speed railways and high-tech information systems; and in the most ambitious
environmental clean-up of our time.
On the edge of the new century, economic growth depends as never before
on opening up new markets overseas. And so we will insist on fair trade
rules in international markets.
NAFTA
A part of our national economic strategy must be to expand trade on
fair terms, including successful completion of the latest round of world
trade talks. A North American Free Trade Agreement with appropriate safeguards
for workers and the environment. At the same time, we need an aggressive
attempt to create the hi-tech jobs of the future; special attention to
troubled industries like aerospace and airlines, and special assistance
to displaced workers like those in our defense industry.
I pledge that business, government and labor will work together in a
partnership to strengthen America for a change.
Health Care Reform
But all of our efforts to strengthen the economy will fail unless we
take bold steps to reform our health care system. America's businesses
will never be strong; America's families will never be secure; and America's
government will never be solvent until we tackle our health care crisis.
The rising costs and the lack of care are endangering both our economy
and our lives. Reducing health care costs will liberate hundreds of billions
of dollars for investment and growth and new jobs. Over the long run, reforming
health care is essential to reducing our deficit and expanding investment.
Later this spring, I will deliver to Congress a comprehensive plan for
health care reform that will finally get costs under control. We will provide
security to all our families, so that no one will be denied the coverage
they need. We will root out fraud and outrageous charges, and make sure
that paperwork no longer chokes you or your doctor. And we will maintain
American standards – the highest quality medical care in the world and
the choices we demand and deserve. The American people expect us to deal
with health care. And we must deal with it now.
Perhaps the most fundamental change our new direction offers is its
focus on the future and the investments we seek in our children.
Each day we delay carries a dear cost. Half our two-year-olds don't
receive immunizations against deadly diseases. Our plan will provide them
for every eligible child. And we'll save ten dollars for every one we'll
spend by eliminating preventable childhood diseases.
The Women, Infants, and Children nutrition program will be expanded
so that every expectant mother who needs our help receives it.
Education
Head Start – a program that prepares children for school – is a success
story. It saves money, but today it reaches only one-third of all eligible
children. Under our plan, we will cover every eligible child. Investing
in Head Start and WIC is not only the right thing, it's the smart thing.
For every dollar we invest today, we save three tomorrow.
America must ask more of our students, our teachers, and our schools.
And we must give them the resources they need to meet high standards.
We will bring together business and schools to establish new apprenticeships,
and give young people the skills they need today to find productive jobs
tomorrow.
Lifelong learning will benefit workers throughout their careers. We
must create a new unified worker training system, so that workers receive
training regardless of why they lost their jobs.
Our national service program will make college loans available to all
Americans, and challenge them to give something back to their country –
as teachers, police officers, community service workers. This will be an
historic change on a scale with the creation of the Land Grant Colleges
and the G.I. Bill. A hundred years from now, historians who owe their education
to our plan for national service will salute your vision.
We believe in jobs, we believe in learning, and we believe in rewarding
work. We believe in restoring the values that make America special.
There is dignity in all work, and there must be dignity for all workers.
To those who heal our sick, care for our children, and do our most tiring
and difficult jobs, our new direction makes this solemn commitment:
By expanding the Earned Income Tax Credit, we will make history: We
will help reward work for millions of working poor Americans. Our new direction
aims to realize a principle as powerful as it is simple: If you work full
time, you should not be poor.
Welfare
Later this year, we will offer a plan to end welfare as we know it.
No one wants to change the welfare system as much as those who are trapped
by the welfare system.
We will offer people on welfare the education, training, child care
and health care they need to get back on their feet. Then, after two years,
they must get back to work – in private business if possible; in public
service, if necessary. It's time to end welfare as a way of life.
Strengthening Families
Our next great goal is to strengthen American families.
We'll ask fathers and mothers to take more responsibility for their
children. And we'll crack down on deadbeat parents who won't pay their
child support.
Crime
We want to protect our families against violent crime which terrorizes
our people and tears apart our communities. We must pass a tough crime
bill. We need to put 100,000 more police on the street, provide boot camps
for first-time non-violent offenders, and put hardened criminals behind
bars. We have a duty to keep guns out of the hands of criminals. If you
pass the Brady Bill, I'll sign it.
Reform
To make government work for middle-class taxpayers and not the special
interests, we must reform our political system.
I'm asking Congress to enact real campaign finance reform. Let's reduce
the power of special interests and increase the participation of the people.
We should end the tax deduction for special interest lobbying and use the
money to help clean up the political system. And we should quickly enact
legislation to force lobbyists to disclose their activities.
But to revolutionize government we have to insure that it lives within
its means. And that starts at the top – with the White House. In the last
few weeks, I have cut the White House staff by twenty-five percent, saving
ten million dollars. I ordered administrative cuts in the budgets of agencies
and departments, I cut the federal bureaucracy by 100,000 positions, for
combined savings of nine billion dollars. It's time for government to be
as frugal as any household in America. That's why I congratulate the Congress
for taking similar steps to cut its costs today. Together, we can show
the American people that we have heard their call for change.
But we can go further. Tonight, I call for an across-the-board freeze
in federal government salaries for one year. Thereafter, federal salaries
will rise at a rate lower than the rate of inflation.
We must reinvent government to make it work again. We'll push innovative
education reform to improve learning, not just spend more money. We'll
use the Superfund to clean up pollution, not just increase lawyers' incomes.
We'll use federal banking regulators, not just to protect the security
and safety of our financial institutions, but to break the credit crunch.
And we'll change the whole focus of our poverty programs from entitlement
to empowerment.
Deficit Reduction
For years, there has been a lot of talk about the deficit, but very
few credible efforts to deal with it. This plan does. Our plan tackles
the budget deficit – seriously and over the long term. We will put in place
one of the biggest deficit reductions and the biggest change of federal
priorities in our history at the same time.
We are not cutting the deficit because the experts tell us to do so.
We are cutting the deficit so that your family can afford a college education
for your children. We are cutting the deficit so that your children will
someday be able to buy a home of their own. We are cutting the deficit
so that your company can invest in retraining its workers and retooling
its factories. We are cutting the deficit so that government can make the
investments that help us become stronger and smarter and safer.
If we do not act now, we will not recognize this country ten years from
now. Ten years from now, the deficit will have grown to 635 billion dollars
a year; the national debt will be almost 80 percent of our gross domestic
product. Paying the interest on that debt will be the costliest government
program of all, and we will continue to be the world's largest debtor,
depending on foreign funds for a large part of our nation's investments.
Budget
Our budget will, by 1997, cut 140 billion dollars from the deficit –
one of the greatest real spending cuts by an American president. We are
making more than 150 difficult, painful reductions which will cut federal
spending by 246 billion dollars. We are eliminating programs that are no
longer needed, such as nuclear power research and development. We are slashing
subsidies and canceling wasteful projects. Many of these programs were
justified in their time. But if we're going to start new plans, we must
eliminate old ones. Government has been good at building programs, now
we must show that we can limit them.
Defense
As we restructure American military forces to meet the new threats of
the post-Cold War world, we can responsibly reduce our defense budget.
But let no one be in any doubt: The men and women who serve under the American
flag will be the best trained, best equipped, best prepared fighting force
in the world, so long as I am President.
Backed by a leaner and more effective national defense and a stronger
economy, our nation will be prepared to lead a world challenged by ethnic
conflict, the proliferation of weapons of mass destruction, the global
democratic revolution, and the health of our environment.
Taxes
Our economic plan is ambitious, but it is necessary for the continued
greatness of our country. And it will be paid for fairly -- by cutting
government, by asking the most of those who benefited most in the past
– by asking more Americans to contribute today so that all Americans can
do better tomorrow.
For the wealthiest – those earning more than 180,000 dollars per year,
I ask you to raise the top rate for federal income taxes from 31 percent
to 36 percent. Our plan recommends a ten percent surtax on incomes over
250,000 dollars a year. And we will close the loopholes that let some get
away without paying any tax at all.
For businesses with taxable incomes over ten million dollars, we will
raise the corporate tax rate to 36 percent. And we will cut the deduction
for business entertainment.
Our plan attacks tax subsidies that reward companies that ship jobs
overseas. And we will ensure that, through effective tax enforcement, foreign
corporations who make money in America pay the taxes they owe to America.
Middle-class Americans should know: You're not going alone any more;
you're not going first; and you're no longer going to pay more and get
less. Ninety-eight point eight percent of America's families will have
no increase in their income tax rates. Only the wealthiest one point two
percent will see their rates rise.
Medicare
Let me be clear: There will be no new cuts in benefits from Medicare
for beneficiaries. There will be cuts in payments to providers: doctors,
hospitals, and labs, as a way of controlling health care costs. These cuts
are only a stop-gap until we reform the whole health care system. Let me
repeat that, because it matters to me, as I know it matters to you: This
plan will not make new cuts in Medicare benefits for any beneficiary.
Social Security
The only change we are making in Social Security is to ask those older
Americans with higher incomes, who do not rely solely on Social Security
to get by, to contribute more. This change will not affect eighty percent
of Social Security recipients. If you do not pay taxes on Social Security
now, you will not pay taxes on Social Security under this plan.
Our plan includes a tax on energy as the best way to provide us with
new revenue to lower the deficit and invest in our people. Moreover, unlike
other taxes, this one reduces pollution, increases energy efficiency, and
eases our dependence on oil from unstable regions of the world.
Taken together, these measures will cost an American family earning
40 thousand dollars a year less than 17 dollars a month. And because of
other programs we will propose, families earning less than 30,000 dollars
a year will pay virtually no additional tax at all. Because of our publicly
stated determination to reduce the deficit, interest rates have fallen
since the election. That means that, for the middle class, the increases
in energy costs will be more than offset by lower interest costs for mortgages,
consumer loans and credit cards. This is a wise investment for you and
for your country.
I ask all Americans to consider the cost of not changing, of not choosing
a new direction. Unless we have the courage to start building our future
and stop borrowing from it, we are condemning ourselves to years of stagnation,
interrupted only by recession; to slow growth in jobs, no growth in incomes,
and more debt and disappointment.
Worse yet – unless we change, unless we reduce the deficit, increase
investment, and raise productivity so we can generate jobs – we will condemn
our children and our children's children to a lesser life and a diminished
destiny.
Tonight, the American people know we must change. But they are also
likely to ask whether we have the fortitude to make those changes happen.
They know that, as soon as we leave this Chamber, the special interests
will be out in force, trying to stop the changes we seek. The forces of
conventional wisdom will offer a thousand reasons why it can't be done.
And our people will be watching and wondering to see if it's going to be
business as usual again.
So we must scale the walls of their skepticism, not with our words,
but by our deeds. After so many years of gridlock and indecision, after
so many hopeful beginnings and so few promising results, Americans will
be harsh in their judgments of us if we fail to seize this moment.
This economic plan cannot please everybody. If this package is picked
apart, there will be something that will anger each of us. But, if it is
taken as a whole, it will help all of us.
Resist the temptation to focus only on a spending cut you don't like
or some investment not made. And nobody likes tax increases. But let's
face facts: For 20 years incomes have stalled. For years, debt has exploded.
We can no longer afford to deny reality. We must play the hand we were
dealt.
The test of our program cannot simply be: What's in it for me? The question
must be: What's in it for us?
If we work hard – and work together – if we rededicate ourselves to
strengthening families, creating jobs, rewarding work, and reinventing
government, we can lift America's fortunes once again.
Tonight I ask everyone in this Chamber – and every American – to look
into their hearts, spark their hopes, and fire their imaginations. There
is so much good, so much possibility, so much excitement in our nation.
If we act boldly, as leaders should, our legacy will be one of progress
and prosperity. This, then, is America's new direction. Let us summon the
courage to seize the day.
Thank you very much. Good night. And may God bless America.
