Lyndon B. Johnson photo

Statement by the President Announcing a Cutback in Federal Spending for the Current Fiscal Year.

November 29, 1966

A MONTH ago, while I was in Asia, Congress passed the final appropriations bill for the current fiscal year.

Since that time, my advisers and I have analyzed the 1,250 appropriations which cover the more than 2,500 programs of the Federal Government. Our goal has been simple: to trim less essential spending wherever possible.

We have now made our first review of the programs that have previously been planned.

On the basis of that review, I have ordered a fiscal 1967 budgetary cutback of $5.3 billion in Federal programs.

With this reduction, we plan to achieve a $3 billion cut in Federal spending for the current fiscal year.

On at least 25 separate occasions, since the first of the year, I have stressed the need for reducing less essential Federal spending.

On many occasions--both in public statements and in private meetings--I have urged the Congress to keep its appropriations within the limits of the administration's budget.

Despite these urgings, Congress has added $3.2 billion in new obligational authority and $2.5 billion to our expenditures. These increases have been a major factor in the decision I am announcing today.

We have taken this action only after careful deliberation and discussions with the wisest and most experienced advisers available to a President.

My economic advisers--the Secretary of the Treasury, the Chairman of the President's Council of Economic Advisers, and the Director of the Budget--recommend that these reductions be made. And these reductions were fully endorsed by the Cabinet and agency heads involved.

We have discussed this action with 34 key Members of the House and Senate, including the leaders of both parties and members of the Appropriations Committees. They believe that reductions are prudent and necessary for our national well-being.

The largest proportion of the Federal budget involves national defense and expenditures over which we have no control, such as interest on the public debt, veterans' assistance payments, agricultural price supports, and payments on prior contracts. These reductions, therefore, must come from the $29 billion of the 1967 Federal budget over which we have some control and from the highway construction program.

Our economy is strong. In the last 5 1/2 years, our economic growth has brought us abundance far beyond any record or any expectation.

But there are pressures in the economy which burden our continued growth. Inflation is the cruelest and most capricious burden of all. It strikes hardest at the poor and the old--and middle-class families. It erodes the hard-earned savings of every citizen. It saps the competitive strength of American industry.

Last January 19, I recommended a special program to take several billion dollars out of our economy through a series of revenue measures. On March 15, the Congress responded by enacting these proposals.

On September 8, 1966, I outlined a further program to help fight inflation. Within 6 weeks, the Congress responded by suspending the 7 percent investment tax credit and the use of accelerated depreciations on buildings. Our proposals were approved by the overwhelming votes of both parties.

Today with the $5.3 billion reduction in Federal programs, we have taken another step to preserve our prosperity. By that action, we will stretch out, postpone, withhold, and defer the less essential items of our programs. Nor will we stop there.

We are going to continue to review and study all our programs and make further reductions where possible. I welcome suggestions for additional reductions from the Cabinet, the Congress, and the country.

I have asked the Cabinet officers to continue to comb through their budgets and eliminate any unnecessary items they can detect in the days ahead.

I have asked Secretary McNamara to review again every aspect of the Defense budget to see where expenditures might be reduced.

But let me be clear about one point. We have not forgotten that behind all the dollar signs and all the contracts and all the project grants there are people.

It would be indeed shortsighted to shortchange the young, or the needy, or the ill, or the old--and we have not done that.

We would rather postpone the construction of an office building or stretch out the completion of a six-lane superhighway than to stop the momentum of our great programs for the people that hold out a promise of hope and opportunity to so many.

Our economy at its root is people. When our people are at work and purposeful, our economy is healthy and stable. When our dollar is sound, our Nation is strong.

We have strengthened our Nation today and we appeal to every good American to do what he can to help.

Note: The President's statement was also recorded for the broadcasting networks. The text was released at Austin, Texas.

Lyndon B. Johnson, Statement by the President Announcing a Cutback in Federal Spending for the Current Fiscal Year. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/238289

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