Radio Address on Federal Spending

Good afternoon:

I want to talk with you today about an issue that strikes directly at every pocketbook and every savings account in America, the clear and present danger that excessive spending by the Congress might cause a Congressional tax increase in 1973.

When the Congress votes to increase spending above the Federal budget, there are only two alternatives: either taxes will go up or a new surge of inflation will begin and prices will go up.

I am totally opposed to either of these bad choices. I oppose higher taxes, and I oppose higher prices. My budget will not require higher taxes. It will not cause higher prices.

I shall fight every attempt by the Congress to bust that budget, because a big spending spree by the Congress will have only one result: a hangover of higher taxes or higher prices for every working family in America.

No goal and no program has any higher priority with me than protecting our people's growing purchasing power, and when taxes or prices go up, purchasing power goes down.

In order to clamp a lid on Congressional spending, I have proposed a 1973 spending ceiling of $250 billion, a proposal that will be voted on by the Congress next week.

Let me lay it on the line in clear and unmistakable terms. A vote against the spending ceiling could prove to be a vote for higher taxes. A vote for the spending ceiling will clearly be a vote against higher taxes.

This spending ceiling should get the active support of every American concerned with avoiding higher taxes or higher prices. It should be approved.

But if the spending ceiling is not passed, I still have one weapon left, the Presidential veto. And I will not hesitate to use that weapon on behalf of the American taxpayer. I will veto even bills whose purposes I agree with, if I conclude that the price tags of those bills are so high that they will lead to tax increases.

I consider the battle against higher prices and higher taxes to be the major domestic issue of this Presidential campaign. The issue is clear. I am holding spending in a range not requiring a tax increase now or over the next 4 years. I will not make any promises in this campaign that would require a tax increase now or in the future.

Our opponents in their platform, in their campaign promises, are committed to huge new spending programs that would add $100 billion to the budget and would require the largest tax increase in America's history. The major burden of those increased taxes would fall on America's 82 million wage earners.

My goal is not only no tax increase in 1973 but no tax increase in the next 4 years.

To achieve this, we must put a tax-proof ceiling on spending now and we must be sure there are no holes in that ceiling. To buy now and pay later would be the sure road to higher taxes or higher prices, or both.

Another reason this spending ceiling is needed is to enable us to fulfill our firm commitment to provide relief from property taxes. When property tax relief comes, and it will come if the Congress cooperates with me now on harnessing runaway spending, the first to receive relief will be those who most need it.

Today there are more than one million retired Americans over 65. They live in their own homes with an income of less than $2,000 a year. They pay an average from $300 to $700 of that $2,000 in property taxes. To allow that to happen to Americans who have worked all their lives to build this great country and to earn their retirement is a national disgrace.

Relief for those Americans is going to be a first order of business in our next Federal budget. It has been charged by some prominent economists that a tax increase in 1973 is unavoidable.

I disagree. There is nothing desirable and nothing inevitable about a tax increase in 1973 or beyond. But while a President can promise there will be no tax increase, as I have, he can keep that promise only if the Congress cooperates with him in holding down spending.

I do not point the finger of blame at the Members of Congress as individuals. As one who once proudly served in both the House and Senate, I know how hard it is for the Congress to join with the President in achieving a goal which is so much in the interest of every American family.

But, let's face it, the Congress suffers from institutional faults when it comes to Federal spending. In our economy, the President is required by law to operate within the discipline of his budget, just as most American families must operate within the discipline of their budget.

Both the President and a family must consider total income and total outgo when they take a look at some new item which would involve spending additional money. They must take into account their total financial situation as they make each and every spending decision.

In the Congress, however, it is vastly different. Congress not only does not consider the total financial picture when it votes on a particular spending bill, it does not even contain a mechanism to do so if it wished.

This is why the spending ceiling vote next week will be so critical to every family in America. The spending ceiling will give the Congress what it needs to bring order to its spending decisions and for the Congress to become a partner, rather than an opponent, in the fight against higher taxes and against higher prices.

Congress works largely through committees and subcommittees. There are more than 300 of these committees and subcommittees. Each is an independent world of its own, specializing in one or more fields of activity. For example, one committee handles urban matters, another farm programs, still another public works programs. These 300 committees and subcommittees authorize spending for their favorite programs without direct regard for what the others are doing. Other committees appropriate the actual money for these programs, and still other committees have the responsibility of raising the taxes to pay for the programs.

Since most programs have some attractive features, it is easy for the committees and the Congress itself to approve them one at a time simply because the one program then up for decision would advance a worthy goal. But no one individual or committee in the Congress is officially charged with keeping track of the totals involved in all of this.

The Congress, thus, has no sure way of knowing whether or when its many separate decisions are contributing to inflation and higher prices, or possibly to higher taxes.

The Congress operates the way a family would if all of the individual family members went out on their own, spent what they wanted or signed up for long-term payments for things they desired, without regard to what other members of the family were spending and without regard to the total income of the family and the total of the bills all of the members of the family were running up on their own.

And that is why I am calling for a rigid spending ceiling for fiscal year 1973, so that we can make certain that Federal spending does not exceed $250 billion and thus does not contribute to higher prices or generate an urgent need for higher taxes.

People of good will can disagree over spending priorities, but if the Congress wishes to increase spending in one area, then it must be prepared either to reduce it in another area or to include higher taxes if we are to escape more inflation.

But the Congress is not meeting this responsibility. I do not make this statement in any partisan sense. Both of our major parties have their share of big spenders, and there are responsible Democrats as well as responsible Republicans serving on the Appropriations Committees of the Congress, the Ways and Means Committee of the House, the Finance Committee of the Senate, who are as deeply concerned as I am about the trend toward higher spending and higher taxes.

The problem is the inherent weakness in the present structure of the Congress as a whole to deal with this danger. This has been confirmed by the House Ways and Means Committee, which is composed of some of the most experienced men in the Congress and which has a majority of 15 Democrats to 10 Republicans.

In reporting the spending ceiling legislation to the House, 21 members of this committee, 11 Democrats and 10 Republicans, included a frank discussion of the problem the Congress has with spending control. Here is a direct quote from the committee's report:

"The need for an expenditure ceiling of this type arises from the difficulty Congress has experienced in establishing overall program priorities. Even when it is generally recognized that expenditures need to be limited, the total expenditures actually occurring seem to keep rising because, in a period of strong, competing concepts of program priorities, all are accepted rather than choices being made among them."

Now that is what the Congress said, the Ways and Means Committee, by this overwhelming majority.

As things now stand, most observers predict that Congress will vote billions of dollars more than my January budget asked. Almost without exception the programs being considered are for good purposes, but when you take them all together, they add up to an inflationary catastrophe or a higher tax nightmare, and I do not intend to let this happen.

An example is the debate in the Congress and in this campaign over welfare. Our opponents have proposed in Congress, in their platform, and in their campaign speeches, programs that would add millions to the welfare rolls and billions to the tax burden of working Americans.

I have refused to compromise my welfare reform program to meet the demands of those who favor higher welfare payments. I want this Nation to be as generous as possible in helping those who cannot help themselves, but I shall always be guided by this principle: I shall oppose any program which increases payments to those who do not work if it requires an increase in taxes for those who do work. If necessary, as I announced last July, I will continue to veto bills which call for significantly larger expenditures than my no-tax-increase budget. If those vetoes are sustained by the Congress, we can hold the line against higher taxes.

But the spending ceiling would be better. It would be foolproof. A spending ceiling would be absolute insurance that no new taxes will be required and that no Federal spending excesses will destroy our successful anti-inflation program in which in this year we have cut the rate of inflation in half in this country and which we now have in the United States the lowest rate of inflation of any major industrial country in the world.

Beyond this, the new budget I am preparing for next year will be a no-new-tax budget. Further, to enable me to keep that promise, I shall make no promises in this campaign which would require an increase in taxes. Federal spending can be held down, and, in my budgets this year and for the next 4 years, spending will be held down.

But a President, any President, must have a partner in controlling spending, and that partner must be the Congress.

My fellow Americans, this Government does not need any more of your income, and it should not be allowed to take any more of your salary and your wages in taxes.

America needs not a tax increase, but tax relief. The spending ceiling will get us started toward that goal. One quarter of a trillion dollars for 1973 is enough.

Thank you and good afternoon.