Good morning. For the first time in more than a decade, Washington is changing, and we've begun to break the logjam that has kept our economy from growing. We're moving away from trickle-down special interests, anti-middle-class policies, toward fairness and opportunity for all Americans.
Congress is moving our economic plan, which makes real record cuts in the deficit. After a decade of neglect and decline, it also makes carefully targeted investments to create high-skill, high-wage jobs again and to better educate and train our people to fill those jobs so that we can restore our economy now and leave a prosperous America for our children. Our plan challenges the status quo, and this is always hard to do in Washington, especially when there are tough choices involved.
For starters, we take on Government spending, beginning with a cut in the White House staff of 25 percent, a freeze in Federal pay, a reduction of 150,000 in the size of the Federal work force, and cuts in more than 200 specific spending programs, including huge entitlement programs affecting almost every special interest group. These are tough decisions, but they're the right thing to do because they move America forward.
The plan also raises taxes to bring the deficit down. Seventy-four percent of the new revenue comes from people with incomes over $100,000, just 6 percent of the American people, who got most of the tax cuts in the 1980's. The rest comes from the middle class in the form of an energy tax which will help to clean up our environment. What will it cost you? If your income is between $30,000 and $100,000, the energy tax will cost you $1 a month next year, $7 a month the year after, and between $14 and $17 a month, depending on how many kids you have, in the years after that. All the money, the cuts, and the taxes will go into a deficit reduction trust fund. There will be no taxes without the cuts.
Is it worth it? You be the judge. Millions of Americans have already refinanced their home mortgages and business loans. Lower interest rates on car loans and student loans are also coming, because the interest rates are down following our clear determination to reduce the deficit. If you're one of the Americans who has already refinanced a home loan or a business loan, if you're getting lower car loans or student loans, the chances are that this year you will save more than you will pay in 4 years under the economic program in the energy tax.
For example, if you have a $100,000 mortgage on your home at 10 percent, due to lower interest rates we're experiencing that mortgage can be refinanced at about 7.5 percent. What does that mean for you? It means $175 a month or $2,100 a year that you save in interest payments, $2,100 a year in interest savings on home loans alone, just because the interest rates have gone down since we've been working to bring the deficit down.
All told, experts estimate that if we can maintain these lower rates, we can pump another $100 billion into our economy. That means more jobs for Americans, $100 billion more spent on our families, spurring investment, raising incomes. It all creates jobs. That's a definition of a plan that will work.
When you put that with all the incentives we've given to lower taxes for families with incomes under $30,000, increases in small business expensing provisions, investment incentives for bigger businesses, real incentives for people who invest in new businesses, this means more jobs.
The plan is also fair because it asks contributions from everyone while asking the most from people who have the most and who have benefited the most from trickle-down policies. It cuts Medicare costs and some retirement benefits. It does include the energy tax. But it requires the wealthy to pay their fair share and the lion's share of the load.
When I presented the plan to Congress I said then that if the interest groups picked the plan apart the whole principle of shared contribution could be lost. Now, just days before the plan will be voted on by Congress, the opponents and the special interests are trying to get their way. Some of my opponents want to cut Social Security and tax credits to working families with incomes of under $30,000 just to get a tax cut for the rich. The big oil lobby is trying to wiggle out of its contribution to deficit reduction and force senior citizens barely above the poverty line to get lower Social Security benefits and senior citizens who are better off, who are already being asked to pay taxes on more of their income, to pay for a second time.
It's simply wrong for a powerful interest to try and opt out of this program by asking the elderly and the working poor to contribute more so they can contribute less. Making middle America pay more may be business as usual in Washington but to the rest of the Nation it must be unjust, unfair, and unacceptable.
I regret that otherwise good and responsible legislators would even consider this proposal, but I will fight it. The principles of fairness in reducing the deficit, the principle of resisting special interests and having uniform contributions from all, these must be protected to make this plan work.
And if we don't pass the package, what will happen? If we don't continue to cut the deficit, our new and carefully won credibility will crumble as a nation and interest rates will start to rise again, squeezing out the investments we need to make to grow new jobs. And if interest rates take off again, it will further increase the deficit, ultimately consuming not only ours but our children's standard of living.
We can't let this happen. We can't. We have to instead bring the deficit down, keep the interest rates down, make available some funds to invest in new technologies and in helping communities and companies and individuals hurt by defense cuts, doing those things to create jobs and make us competitive.
That's why I need you to raise your voices. Ask Congress to turn down the special interests and to preserve this program that asks fair contributions from everyone so that we can reduce the deficit and create more jobs and provide benefits to everyone.
Together we can all win. In just a few months, working together, we've tackled tough problems with new ideas. And we're stronger for it. Congress has passed laws from family leave to motor voter, long stalled by gridlock, proposals from welfare reform to national service to pay for college education to putting more police on our streets or on deck. But we have to get this economy moving.
The spirit of new hope I believe will prevail. Staying together we can make it work until there is a permanent rebirth of hope in every household across this great Nation. I need your help and so does America.
Thank you very much.