Good morning. I want to talk to you today about what's at stake for the American people in the great budget debate now taking place in Washington. But first, I've got some good news to report.
Our country is on the move. Our economy is the strongest in the world, and it's growing. Yesterday, the official report on the economy for the last 3 months showed continued strong economic growth with very low inflation. And this week we also learned that we've cut the budget deficit nearly in half since I became President. It has dropped for 3 years in a row for the first time since President Truman was in office. The American people should be proud of their accomplishment.
Now it's time to finish the job and balance the budget, so that we don't pass a mountain of debt on to our children and we free up more funds to be invested in our economy. But we need to do it in a way that reflects our core values: opportunity for all Americans to make the most of their own lives; responsibility—we all must do our part, no more something for nothing; and third, recognizing our community, our common obligations to preserve and strengthen our families, to do our duty to our parents, to fulfill our obligation to give our children the best future possible with good schools and good health care and safe streets and a clean environment; and finally, a determination to keep our Nation the strongest in the world.
I have proposed a balanced budget that secures Medicare into the future, that increases our investment in education and technology, that protects the environment, that keeps our country the strongest in the world. Because working people do deserve a tax break, it includes a tax cut targeted at education and childrearing. My balanced budget reflects our national values.
It's also in our national interest. We now have 3 years of evidence that our economic strategy works. Reduce the deficit, sell more American products around the world, invest in education and technology—it gives you more jobs, more new businesses, more homeowners, a stronger future for all Americans. But this week the Republican Congress voted to enact an extreme budget that violates our values and I believe is bad for our long-term interest.
All Americans believe in honoring our parents and keeping our pledge that they'll live out their last years in dignity. But the Republican budget cuts $450 billion out of the health care system, doubles premiums for senior citizens. And the House budget actually repeals the rule called spousal impoverishment. What this means is they would let a State say to an elderly couple that if the husband or the wife has to go into a nursing home, the other has to sell the house, the car, and clean out the bank account before there can be any help from the Government. They say, "We'll then help you, and how you get along afterward is your own problem."
The Republicans say they support Medicare. They say they just want to reform it. But just this week we learned that the Senate majority leader is bragging that he opposed Medicare from the beginning, and the Speaker of the House admitted that his goal is to have Medicare, quote, "wither on the vine." When they say those things, it's clear that the Republicans come not to praise Medicare but to bury it.
All Americans believe we have a fundamental duty to provide opportunity for our young people and to protect the world that God gave us. But the Republican budget singles out education and the environment for deep and devastating cuts.
And it's a basic American value to honor hard work. But the congressional Republicans impose billions of dollars in new taxes and fees directly on working people. On average, families who earn less than $30,000 a year get a tax hike, not a tax cut, under their plan. Let me put it another way. They want to increase taxes on working families with children living on $20,000 a year or less and give people in my income group a tax cut. That is wrong. A country where Medicare withers on the vine, where our children are denied educational opportunity, where pollution worsens, where working people get a tax increase, that's not the kind of America I want for the 21st century. I want a nation that promotes opportunity and demands responsibility; that preserves families, increases work; that recognizes the duty we owe to each other; and that still is the strongest country in the world.
The more the American people see of this budget the less they like it. That's why the Republicans in Congress have resorted to extraordinary blackmail tactics to try to ram their program through. They have said they won't pass a bill letting the Government pay its bills unless I accept their extreme and misguided budget priorities.
Well, for more than two centuries, through war and depression, the United States has always paid its bills, always honored its obligations. For all their loose talk, the congressional leaders know that a default would have a severe impact on our country. By making it more expensive for the Government to raise money, it would expand the deficit, unsettle financial markets, and increase interest rates. Higher interest rates mean higher mortgage rates for homeowners, especially the 10 million of them whose mortgages are tied to Federal interest rates. Higher interest rates means higher credit card rates for consumers and bigger borrowing costs for businesses.
Now, I'm not about to give in to that kind of blackmail. So Congress should simply stop playing political games with the full faith and credit of the United States of America. They should send me the debt limit bill to sign, as every Congress has done when necessary throughout American history.
Just yesterday the Secretary of the Treasury once again asked Congress to remove the debt limit from the budget bill or, at the very least, to extend it through mid-January. That way we can resolve this budget impasse without hurting our economy. Even this offer was brushed aside.
I will not let anyone hold health care, education, or the environment hostage. If they send me a budget bill that says simply, "Take our cuts or we'll let the country go into default," I will still veto it. And hear this: Before or after a veto, I am not prepared to discuss the destruction of Medicare and Medicaid, the gutting of our commitment to education, the ravaging of our environment, or raising taxes on working people.
So I say to the Republican leaders: Back off your cuts in these vital areas. Until you do, there's nothing for us to talk about. You say your principles are a balanced budget, a tax cut, extending the life of the Medicare Trust Fund. I want all those things. They're my principles, too. But there are other important principles, the ones that I have outlined. They are morally right for America, and they're good for our economy.
This is a time of genuine promise for our country. We're on the move. Our economy is the envy of the world. No nation on Earth is better positioned for the new century than America because of the diversity of our economy and our citizens, because of our commitment to excellence, because of our technological advantages. The 21st century will be ours if we make the right choices and do the right thing for the American people.
Thanks for listening.