Radio Address to the Nation on the Fiscal Year 1986 Budget
My fellow Americans:
On Monday morning we will submit to the Congress our budget for fiscal year 1986. It is a budget that carries an enormous investment of human time and effort; indeed, I believe, the most exhaustive effort ever made to rein in government's chronic overspending. Every proposal is based on a careful review of what government should and should not do, what's worked and what hasn't, what we can and can no longer afford. Collectively, the more than 50 proposals we are making can stop the excessive growth of Federal spending in its tracks and put budget deficits on a permanent downward path.
We'll be going into details on Monday and asking Congress to join us in a strong bipartisan effort. But today I want to lay a few facts on the table, so you understand why some so-called solutions you will hear aren't solutions at all and also what all of us must do to cure government's overspending once and for all.
First, as surely as night follows day, you'll hear that we can't make lasting progress bringing deficits down until we agree to a tax increase. Wrong. Our problem isn't that you're paying too little taxes; it's that government is spending too much money. In the past 10 years, your tax revenues have grown by more than $400 billion, but spending by government has grown by almost 600 billion—40 percent more than revenues. And government spending has grown more than one-third faster than the growth of our economy. In other words, Washington's policy is: "Heads, I win; tails, you lose."
When your families do well, government spends and borrows. When you don't do well, government spends and borrows. Our future economic success depends on the economy growing faster than government spending. That's why raising taxes would boomerang. Economic growth would slow, revenues would decline, and the budget deficit would swell.
The second so-called solution you will hear is that lasting progress won't be made without deep cuts in defense. Wrong again. Defense spending accounts for less than 30 percent of our budget today—far less than 20 years ago. We've cut our planned defense buildup 3 years in a row and cut it again this year—and all this while our adversaries have raced ahead with the greatest military buildup in the history of man.
It's time everyone faced up to why government, for nearly 50 years, has been heading down a one-way street of overspending and rising public debt. Part of the spending is understandable—improved Social Security benefits for a growing elderly population, for example. But much of it results from the combination of special interest groups and flawed budget procedures. Our system of budget making in the Congress practically guarantees spending growth, and this unsettles financial markets and helps keep interest rates from falling. When government makes redistributing income more important than producing it, people reallocate their energies from economic to political action. The growth in special interests, which many in Congress lament, parallels a pattern of government taking from some to give to others. It parallels the ability of special interests to lobby for benefits and override the national interest by concentrating great power on a small group of legislators. So, spending and taxes rise, and growth declines. That's why we have a rising national debt and a growing burden of paying interest on that debt.
Our challenge is to strive for the strongest possible level of economic growth while making sure spending by government remains well below that. To accomplish this, we're proposing three long-term reforms.
First, we want to reform the tax system, make it more fair and simple for all, so we can bring down tax rates for individuals and businesses, provide incentives for stronger growth, and thereby increase revenues to government.
Second, we want the Congress to pass a constitutional amendment mandating government spend no more than government takes in. I will urge the House of Representatives to follow the positive actions of the Senate and pass this long-overdue reform.
Third, we need passage of a line-item veto, so Presidents would have the power 43 Governors now have to veto individual items of wasteful overspending in appropriation bills.
We're doing a lot to bring down spending growth and keep our economy growing. We could do a lot more if we keep our eyes on the facts and work together.
Until next week, thanks for listening, and God bless you.
Note: The President spoke at 12:06 p.m. from Camp David, MD.
Ronald Reagan, Radio Address to the Nation on the Fiscal Year 1986 Budget Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/258667