Radio Address to the Nation on the Economy and Deficit Reduction

My fellow Americans:

In a moment I'd like to tell you about our efforts this past week to cut the Federal deficit in order to keep the American economy growing and strong. First, though, I'd like to stress that very fact. Despite stock market fluctuations, despite all you may have heard to the contrary, the truth is: The American economy remains growing and strong.

As usual with economics, it's the figures that tell the story. During the third quarter of this year, our gross national product rose at a healthy annual rate of 3.8 percent. This was spurred in turn by new business investment, which is soaring at a truly remarkable rate of 24 percent. Inflation is down. Manufacturing productivity is up. Real exports, too, are up and rising at an annual rate of nearly 17 percent. One set of figures is especially important: the figures that concern the more than 14 million new jobs that have been created since this economic expansion began some 59 months ago. That's 2 1/2 times more new jobs than have been created in the other major industrialized countries since 1982, and you might think it's something for us Americans to take pride in.

But some have tried to pooh-pooh this tremendous achievement, distorting the record in the process. Last December, for example, a study was presented to the Joint Economic Committee of Congress, which claimed that, while millions of new jobs have indeed been created, most of these are basically bad jobs, with well over half paying only about $7,000 a year or less.

Well, since then at least two major investigations have shown that study to be wrong. The Department of Labor has put out evidence showing an exactly opposite trend toward higher paying jobs. And last month the prestigious American Enterprise Institute here in Washington called a press conference to present the results of its own exhaustive and scholarly study. The American Enterprise Institute study found that over the past 20 years—and I quote—"there has been no rise in the share of new jobs with low earnings, but instead a slight increase in the share at the upper end of the earnings distribution."

Well, you should know that when the misleading Joint Economic Committee study was first released, it made virtually every network news show, national magazine, and major newspaper. But when the American Enterprise Institute study was released, only one major newspaper, one major magazine, a handful of local journalists, and not a single television network sent reporters. So, as I said, our economy is in fundamentally good condition. And when you hear reports of doom and gloom to the contrary, well, please take them with a grain of salt.

And now to tell you about our success this week in reaching an agreement that will reduce the Federal deficit still further: When the stock market took its dramatic plunge last month, it became clear that the time had come for dramatic action. And for some 20 days, my representatives met with negotiators from the Congress, struggling to work out a credible and reliable deficit reduction plan. Just yesterday I was able to announce that a bipartisan agreement was indeed reached, an agreement that would cut the deficit not just for one year but for two.

As with all agreements that result from long and difficult negotiation, this agreement is probably not the very best deal that could have been struck. But we have to begin somewhere, and I believe this agreement represents just that: a good, solid beginning. It provides the necessary services for our people, maintains our national security, and does both at a level that will not overburden our taxpayers—in a word, fairness. And while efforts to cut the deficit still further must certainly continue, this agreement will send the right message at the right time, both to our own financial markets and to markets and governments around the world: Decisively, doggedly, and in a spirit of cooperation, the United States has chosen to act.

My thanks and congratulations to the congressional leadership and the budget negotiators for all their hard work. Now each of us, Republican and Democrat alike, must work to reach our vital goal: a sound and enforceable United States budget. We have built a solid economic foundation that has made our economy stronger, more competitive, and better prepared than ever to meet the challenge of tomorrow. If we pursue the right policies, our future will be even brighter.

Until next week, thanks for listening, and God bless you.