Radio Address to the Nation on the Program for Economic Recovery
My fellow Americans:
This broadcast today is coming from the American Pavilion, the World's Fair that opens in Knoxville, Tennessee, today.
Two nights ago I went on national television asking you to help us get a bipartisan budget passed in this Congress—not just any budget, but a budget that will hold down your taxes and get spending under control so we can reduce deficits, interest rates, and put unemployed Americans back to work. Let me just say, your calls and telegrams really warmed my heart. You came through with the greatest outpouring of support our administration has ever received, and you let us know that while our program did not in its first 30 weeks solve all the problems that have piled up for more than 30 years, it is beginning to work.
Ernest Key wired us from Georgia: "Gas in Atlanta is 20 cents per gallon cheaper than this time last year. Inflation is almost cut in half. All of this began after October lst," he wrote. Well, October 1st was the start of our program.
Hazel Quinn from Texas said, "As a senior citizen living on social security, your program is working to our benefit. Groceries have remained stable."
John McMullen from Michigan told us that, "The other philosophy of tax and spend has a record of failure. Fight on," he said. Well, we will.
We're seeing signs that the economy is ready to turn up. The record high interest rates we inherited nearly wrecked the housing industry, but as we've begun to bring those rates down, housing starts have increased steadily over the last 5 months. Airline travel, an indicator of future business activity, is up. There'll be an increase in automobile production in the second quarter of 1982.
Another very important sign—Americans are starting to save again. In the 6 months since that first 5-percent phase of our tax cut took effect, the rate of personal savings has risen to 5.7 percent from 5.1 percent for the year before. This means billions more in the capital pool to finance new investments, jobs, and economic growth. It also indicates lower interest rates ahead.
We can do even better if you help us protect the first decent tax incentives for your families—the 10 percent cut in July and the one in 1983—the first since John F. Kennedy's tax cut nearly 20 years ago. Yes, our tax cut is big, and yet it barely offsets the enormous increase in taxes built into the system in 1977. That was the biggest single tax increase in our history, and there are more installments of that yet to come in the next couple of years.
We must be fair-to all our people. We're devoting one of the largest shares in the history of the Federal budget to assisting low-income Americans. But let's ask ourselves, where was the fairness in those bankrupt spending policies that gave us double-digit inflation, record interest rates, and a trillion-dollar debt? Where is the fairness now if we make even more painful the highest peacetime tax burden we've ever known? We're not going to do that. With your support, with responsible Republicans and Democrats working together, we can pass a good budget that will help taxpayers more than it hurts them.
Last year with your help we passed a budget bill that lowered the spending increase by more than $30 billion. How big would the projected deficits be if that hadn't been done? Those who fought and voted against those savings are fighting against the additional savings that we've proposed for 1983.
It's extremely difficult for the Congress to withstand the pressures for more spending. That's why I asked Congress to pass, as soon as possible, a constitutional amendment to require balanced Federal budgets, and that's why I'm appealing to all of you at the grass roots. Start putting pressure on the Congress now. Let's find out who's hiding behind the rhetoric of balanced budgets but is unwilling to make the cuts in spending needed to bring them about.
There are now two resolutions pending, one in the House and one in the Senate, that enjoy strong support and that would lead to such a constitutional amendment. They would require the Congress to adopt a balanced statement of taxes and spending each year. But the growth in revenues could not exceed the prior year's growth in national income. In other words, it would contain a limitation so that you couldn't just have a balanced budget by always sending the bill to the taxpayers for whatever the deficit might be. A balanced budget amendment would have. to be ratified by three-fourths of the States. The Congress could approve a deficit, but only by a 60-percent vote of the full membership of both the House and Senate.
I'm convinced that most of you do support the need for a constitutional amendment. After my speech night before last, the public response was more than 7 to i in favor of the idea.
Government must stay within the limit of its revenues. This is not a political issue between parties. It's an issue simply of sense versus nonsense, of endless red ink versus lasting recovery. With your voices and your support good sense will prevail.
Thank you, and God bless you.
Note: The President spoke at 12:05 p.m. from the U.S. Pavilion at the Knoxville International Energy Exposition (World's Fair) in Knoxville, Tenn.
Ronald Reagan, Radio Address to the Nation on the Program for Economic Recovery Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/245477