Radio and Television Report to the American People on the Cost of Their Government.

[Delivered from the President's Office at 9:00 p.m. ]

My Fellow Citizens:

I should like to talk some facts with you tonight--about what happens to the tax dollars that you send to Washington.

I am speaking from the Presidential office here in the White House. In outward respects, this is quite an ordinary room. The furniture, the books, the telephones, even the paintings on the wall, are in no sense unusual.

But in one respect this room is unusual.

To this office--to the President, whoever he may be, there comes every day from all parts of the land and from all parts of the world a steady flow of dispatches, reports and visitors. They tell of the successes and the disappointments of our people in their efforts to help achieve peace with justice in the world. They tell, too, of the progress and difficulties in building a sturdy, prosperous and a just society here at home.

On the basis of this information, decisions, affecting all of us, have to be made every day. Because your President, aside from the Vice President, is the only governmental official chosen by a vote of all the people, he must make his decisions on the basis of what he thinks best for all the people. He cannot consider only a district, a state or a region in developing solutions to problems. He must always use the yardstick of the national interest.

It is from this overall viewpoint that I want to talk with you tonight about the cost of running your Government.

The budget now before Congress is huge; even though it represents a sharply smaller part of our national production than the first budget I submitted to the Congress four years ago. Since then we have sought unceasingly to make the taxpayer's dollar go further.

We have, for example, cut the government payroll by nearly 250,000 positions.

Taxes were cut in 1954 with savings so far of some 25 billion dollars to the American taxpayer.

The proposed budget is balanced--the third in a row.

The budget now under discussion represents carefully studied estimates of the cost of all the things the government is required by law to do or by what we believe to be necessary.

All of these things I have discussed with you many times. Indeed most of these national programs have been on the books for some years. There are no surprise proposals in this budget. It was made up under my personal direction by men and women who believe deeply in economy and efficiency in government. In the process some 13 billion dollars in departmental requests were eliminated.

Now when a budget is sent to Congress, it contains estimates of costs reaching 18 months into the future. So, as I have so frequently pointed out, these estimates cannot be exact to the very last dollar. That is why they are kept under constant examination in all Executive Departments--both before and after the Budget goes to the Congress. Many of these estimates are based upon formulas in laws passed by the Congress. They are as accurate as can be made based upon our experience in administering those laws. So, if the Congress should cut the estimates in this budget for things that are fixed by law, like veterans compensation and pensions, it should be clear that such cuts would not save money, because the actual costs, whatever they turn out to be must, by law, be paid.

I have often been asked how big our Federal budget ought to be. Now that question calls to mind a story about Abraham Lincoln. One day a man looking at him said, "Mr. Lincoln, how long should a man's legs be?" Well, he looked down at his rather long lanky legs and he said, "Well, they ought to be long enough to reach the ground."

Now that's not a very exact formula, but it has its point in this question. A budget, too, ought to reach the ground. The ground, in this case, is the essential national interest--and no more. That is the purpose of this budget.

No great reductions in it are possible unless Congress eliminates or curtails existing Federal programs, or unless all of us demand less service from the government, or unless we are willing to gamble with the safety of our country.

In this troubled world, our foremost national need is, of course, our own security. The overall cost is great, indeed--over 45 billion dollars in the budget now before the Congress. This is mainly what makes the budget so large--the costs of our present security and our quest for a just and lasting peace. There is no cut-rate price for security.

But before considering this heavy expenditure, let us look at the smaller, non-security costs we also have to pay. Including certain new activities important to America, this 26 billion dollar part of the budget meets the costs fixed by law, the routine jobs of government, and the domestic programs of service which our people have decided through the Congress to adopt.

In this 35% part of the budget, there are, first, the compulsory expenditures. We must pay the more than 7 billion dollars' interest on the national debt. Ours is not like the Soviet Government which recently told its people that it would no longer pay the interest on its government savings bonds.

Other programs are established by law, and the bulk of the expenditures under those laws is mandatory.

The largest among them provides 5 billion dollars for veterans' pensions, compensation, education, medical care, and other benefits.

Another large item of about 5 billion dollars is for agricultural programs: for price supports, the soil bank, land conservation, rural electrification, and other services of benefit to farmers.

The costs of these two great programs have tended to grow rather than to shrink over recent years.

In addition, about 3 ½ billion dollars is provided, as grants and loans to the states, to share the costs of such activities as administering unemployment compensation and the employment service. This sum assists the states in helping needy aged, the blind, the totally disabled and dependent children; promoting public health, sanitation, and the control of disease, as well as speeding slum clearance and urban renewal--an item which a committee of mayors recently urged me to support vigorously.

All these are programs long ago enacted by the Congress.

This part of the budget also provides funds for a new project which I have urged for two years to help overcome the acute shortage of schoolrooms in our country. The plan calls for a 4-year emergency program of schoolroom construction at a cost of 395 million dollars a year.

Now permit me a further word about this item. I deeply believe, as I am sure you do, that education is clearly a responsibility of state and local governments--and should remain so. But another truth is just as clear: during the depression, World War II, and the Korean conflict, our states and localities did not have the means and the opportunity to build enough classrooms to keep up with the increasing number of youngsters. This means that we need an emergency program to help states and localities build the schools our children must have. We must not continue to penalize our children and thereby the future of the nation.

We limit this aid to building; thus it will not result in Federal control of education. It is limited in scope to make sure that Federal help will go where it is needed most. Limited in time, it guarantees that Federal help will be temporary.

Now I have heard people say, and I am sure you have, that no Federal program can be temporary--that any activity begun in Washington will go on forever.

I reject that kind of talk.

I believe that Americans are responsible enough to do exactly what they want to do and then stop.

I support this program wholeheartedly because it is a get-in-and-get-out emergency plan solely to overcome a schoolroom deficit created by depression and by wars.

Now after meeting the costs of interest on the national debt, agriculture, veterans, and grants to the states, there remains in this non-security part of the budget about 5 billion dollars. This pays for everything else our Government expects to do next year.

It includes direct Federal expenditures related to labor and welfare--and for things like medical research. It includes the cost of conserving and developing our natural resources--improving the national parks, building dams and reservoirs, and protecting fish and wildlife.

It includes the weather bureau, disaster relief, the census, and subsidies for civil aviation and our merchant fleet.

It includes costs of the Congress and the courts, of law enforcement, and of tax collection.

Finally, it includes funds to cover the postal deficit, which will be more than half a billion dollars unless the Congress raises postal rates, as I have repeatedly urged. If the Congress acts, this cost will be borne by the users of the mails, thereby relieving the taxpayer of this burden.

In executing these programs we constantly stress economy and seek to avoid waste and duplication. In this endeavor we have had the benefit of the recommendation of two Hoover Commissions, the great portions of which have already been accepted and are in the process of being put into effect. Moreover, we postpone programs when we can. When we find it possible to revise cost estimates, we inform the Congress. In my letter of April 18th to the Speaker of the House of Representatives, I pointed out that we had been able to revise estimates of new spending authority downward by a possible 1.8 billion dollars, assuming Congressional cooperation.

While we shall insist on carrying out the Federal Government's proper role in meeting the needs of our growing economy and population, we shall not start any program that we do not believe necessary. We are determined to search out ways to save money and manpower so that government does not further add to the inflationary pressures on the economy.

If our people join us in this determination, we can look forward to sufficient excess of income over expenses to justify future tax reductions as we continue paying down on the public debt.

In all this we need the cooperation of the Congress and we need the help and understanding of every one of you. Almost every proposal for government aid or service has a number of citizens organized behind it. Usually each group wants the government to spend for its pet project, but to economize everywhere else. This is a good time to examine again the demands that each of us, our communities and our states, make upon the Federal Government. It is a time to limit those demands to what is necessary--and no more.

Turn with me now to the largest item in the budget--the defense of our country. There is where most of your tax dollars go.

As we survey the world in which we live, the first great concern of all of us is to make sure of the defense of our homes, our country and our way of life. The Communists have again and again announced their purpose of promoting revolution and of communizing the world by whatever means. It is important, and surely prudent, for us to understand the military strength the Communists maintain to help them achieve their purposes.

Now what is that strength today?

Without counting the Chinese Communists, the Soviets have the world's largest army. They have many times the number of submarines that Germany had when World War II began. They have atomic weapons and rockets and missiles. They have a large and growing air strength. They are competent in military technology and research. And all this is directed by a despotism which is fully capable of the supreme folly--that of unleashing these powerful forces if it should ever believe that it could--without destroying itself--succeed in destroying the free world.

One important purpose of our military arrangements is to convince others that if they start a general conflict they cannot escape their own destruction.

As I have said, the national defense item is by far the largest in our budget, but let us see just how large it is. The estimate just for our own military forces and our atomic development, together with a small amount for stockpiling critical and strategic materials, is almost 41 billion dollars. This does not, by any means, equal the full amount first recommended by our uniformed services. They wanted some 10 billion dollars more.

But I earnestly believe that this defense budget represents, in today's world, the proper dividing line between national danger on the one hand and excessive expenditure on the other. If it is materially cut, I believe the country would be taking a needless gamble. For myself, I have seen unwise military cuts before. I have more than once seen their terrible consequences. I am determined to do all I can to see that we do not follow that foolhardy road again.

Even after World War II had illustrated again the dangers of unpreparedness, our Armed Forces became so starved and depleted that by 1950 we had to withdraw our military strength from South Korea. That area was then declared to be outside our defense perimeter. The tragic results of that woeful weakness are too dose to us to need recounting now to the families of America. But I say to you that I shall never agree to any program of false economy that would permit us to incur again that kind of risk to our country and to the lives of our citizens. Good defense is not cheap defense.

The B-36 bomber, even though built after World War II, is already outmoded. Each one cost us about 3½ million dollars. Today's B-52 jet bomber costs 8 million dollars each.

Seven years ago, a fighter plane cost 300 thousand dollars. Today, one costs 1 ½ million dollars.

A submarine now costs twice as much as it did seven years ago.

Atomic energy costs four times as much as it did in 1950. Daily, munitions grow more complex, more powerful and more costly.

It is clear that unless we make some progress in our persistent efforts to secure an effective agreement to limit armaments, defense costs will tend to go up year by year, if we are to keep Communist forces from outstripping us.

Consequently, though our first responsibility is to maintain defenses adequate to keep the nation secure, we do not want, because of this cost, more military force than is necessary.

Judgments on the defense budget must reflect the stem fact that real military power can rest only on a sound economy. Only with a strong and thriving economy can we have the strength to protect our freedom. But since we maintain military forces as a matter of self-preservation, we must not recklessly reduce their power.

This dilemma presents hard decisions. But they are decisions that must be made by the President, as he presents his recommendations to the Congress. To this kind of problem I have devoted most of my life. I repeat my earnest belief that the estimate in the budget for our military forces, atomic energy and stockpiling--amounting to about 41 billion dollars--represents a defense program which is as nearly accurate, in present circumstances, as is humanly possible to make it.

To this defense total should properly be added--and will so be in the future--that part of our mutual security program which supplies arms and defense support to friendly countries in order to strengthen the military power of the free world. Expenditures for this purpose will amount next year to something over 3 billion dollars.

The costs in many of these friendly countries are low compared to ours, so this type of aid, even though moderate in amount, supplements their own efforts very effectively. This aid helps arm and maintain overseas:

some five times as many active ground forces as the United States possesses;

about twice as many naval combat ships;

and about an equal number of planes.

This aid is also a key factor in maintaining many of our vital military, naval and air bases abroad.

Without the military strength that this aid helps sustain overseas, we should have to add many more billions to our own defense spending, and have less security for our total effort.

Defense expenditures, for our own forces and our military assistance overseas, together with the domestic expenditures I have discussed, account for almost all--in fact, 98%--of the budget.

As we look at the whole range of the budget, there is only one hope of making the really great savings that we all want so much. That hope is to achieve an effective disarmament agreement with an easing of world tensions, so that the enormous sums we have to spend for our defense can be drastically reduced.

The savings we can hope to make in domestic programs are, at best, small by comparison. Of course, we could save material amounts if, by law, we abandoned or drastically cut back some of the larger programs. But in a world knowing real peace, we could save at least ten times as much in defense spending.

It is to hasten that day, as well as to enhance our security now, that the budget provides a moderate sum for waging peace.

This is a mission that military formations cannot, of themselves, accomplish. The entire free world military force merely puts a policeman on the corner to keep the robber out of our house and out of our neighborhood. It preserves from destruction what we already have.

But our Communist antagonists are resourceful and cunning. Their aggression is not limited to the use of force or the threat of its use. They are doing their best to take advantage of poverty and need in the developing nations, and so turn them against the free world. Success would enable them to win their long-sought goal of Communist encirclement of our country.

To meet the total threat, we, first of all--as I have pointed out--must sustain our defense preparations.

But we must do more.

We must wage peace aggressively through diplomatic efforts, through the economic and technical assistance part of the mutual security program, and through world-wide information activities to help bind the free world more firmly together. These efforts will cost about one billion dollars next year.

We wage peace on the diplomatic front through the efforts of the State Department to establish dose ties with every other nation that values its independence and that recognizes the dignity of man.

We wage peace through the efforts of the United States Information Service to counteract the false propaganda spread by the Communists. We tell the truth about freedom and the rights of man and seek to win adherents to these concepts.

We wage peace through the mutual security program in another way. We help some nations in developing their own economies, so their people can be stronger partners in the defense of the free world against Communism.

Economic development is, of course, not a product for export from the United States or anywhere else. It is a homespun product, the product of a people's own work. Our opportunity is simply this: to help the peoples of these developing lands to help themselves. This we can do through sound technical assistance and, where necessary and unavailable from other sources, through loans and, at times, other kinds of financial aid. Within prudent limits, this practice is in their and our best interests.

On this subject I hope to talk with you again next week, but I assure you now that this billion dollar item is one of the most important to all of us in the entire budget.

I know that in these efforts to wage peace, all does not always go well. Weaknesses there are bound to be--troubles and disappointments as well.

But I never ordered a cease-fire in a battle because some of the ammunition misfired or went bad, or some commander--including myself--may have made a mistake.

We must always do better, but we must never stop in our battle for peace. We must keep everlastingly at this job--today the most important job in this entire world.

Our defense expenditures are to assure us the opportunity to wage peace; our expenditures for diplomatic work, economic and technical assistance and information services give us the means to wage peace. Together they cost 45 billion dollars-all but about a billion dollars of this for defense.

The rising costs of defense items account for more than 80 percent of the increase in next year's budget. These facts simply reflect the kind of world in which we are living.

The plain truth is that the price of peace is high.

That explains why taxes are high and why their further reduction has been delayed. It explains also why really big cuts in government spending depend on success in our efforts to wage peace.

The sacrifices demanded of each of us are great; but they are sacrifices of dollars for a peaceful world, not the sacrifices of our sons, our families, our homes and our cities to our own shortsightedness.

I believe that you are more secure in your homes tonight because of the effort and money our nation has put into these defense and related security programs. It is almost four years since an American fighting man has been killed in battle anywhere. Crises, great and small, we have had and will continue to have. Despite them, there has been an overall improvement in the prospects for keeping an honorable peace.

But I must say this to you: I can see no immediate relaxation of international tensions to provide the basis now for substantial reductions in these programs for preserving and waging peace. In fact, the gains we have already made impel us to press forward with no let-up.

If we do press forward--if we courageously bear these burdens of waging peace--I have every hope that, in God's good time success will crown our efforts. Then we shall know an easier and a better peace whose fruits will include a lightening of the spiritual and the material burdens we now must bear in order to gain it.

Thank you. Good night.