Statement About the Proposed Federal Spending Ceiling and the Economy

THE TAXPAYERS of the Nation won a significant victory this week when the House of Representatives approved my $250 billion spending ceiling. The financial fate of the taxpayers now rests with the United States Senate, which should approve the ceiling--without adding loopholes--as a guarantee against excessive Federal spending that could generate economic pressure for a tax hike.

It should be emphasized that my tax-proof ceiling on spending would not be a pinchpenny approach to government. A quarter of a trillion dollars is a lot of dollars, a sum that would permit continued generous Federal financing of all worthy programs--such as Atlanta's rapid transit system, for which the Federal Government recently committed additional design funds.

The $250 billion, huge as it is, would not be inflationary--that is the real significance of the figure. We know from our experience with the impact of Federal spending that $250 billion can be expended in fiscal year 1973 without putting inflationary pressure on prices and without developing a need for higher taxes to relieve such price pressure.

The spending ceiling thus would be a key requirement in my effort to protect and enhance the remarkable economic progress we have achieved since 1969-progress which has been fully shared by Atlanta and by the South in general.

When my Administration took office, inflation was running at an annual rate of more than 6 percent, primarily because of excessive Federal spending prior to 1969.

That meant that the average worker had to get a pay increase of 6 percent just to stay even in purchasing power--any less and his family's buying power actually fell behind on the inflation treadmill.

Now we have cut that rate of inflation by half--to the lowest rate of any major industrial country in the world.

And, in just the past year, the real purchasing power of the average production worker has advanced by more than 4 percent--the equivalent of two extra weekly paychecks.

Here in Atlanta, and in the South generally, that overall progress is fully reflected.

In Atlanta, the latest available Consumer Price Index put the annual rate of inflation here at just 2 percent, significantly lower than the national rate. The unemployment rate of 4.2 percent in Atlanta also is substantially better than the national average. And a recent report showed personal income in the State of Georgia has jumped more than 10 percent in the past year.

Clearly, Atlanta and the South are joining the rest of the Nation in a surging return to real prosperity.

What we must do to continue this dynamic economic tempo is to make certain that we ourselves do not place any barriers in our own way--such as permitting excessive Federal spending to start up the inflation treadmill again or to bring about the need for a Congressional tax increase.

This is why my spending ceiling is so important, and that is why the vote in the U.S. Senate is so vital to the pocketbook of every family here in Atlanta, in the South, and in the Nation.