Remarks to Reporters on a House Budget Proposal

The President. Good morning. I have a statement here.

I was pleased to welcome some leading Republican Congressmen this morning. Our meeting began on a very positive note, because we had more excellent news on the economy. The inflation figures announced today show that producer price inflation over the past year has been cut by 80 percent from 2 years earlier. That's extremely good news, because it raises the purchasing power of every American.

In coming months, of course, the inflation figures may bounce around a little, but it's clear that we're finally breaking the back of inflation in the United States. And now that it's down, we have to keep it down.

That was one of the main reasons I asked these Congressmen in this morning, because the Budget Committee in the House, controlled by the liberal wing of the Democratic Party, has just come up with a truly dangerous budget proposal. The so-called Jones proposal is a declaration of war against the commonsense principles that are now rebuilding America. This isn't a step forward, but a giant step backward into an economic quagmire.

I'm not going to sit still for a proposal that makes a huge increase in taxes, guts our defense program, repeals many of the overdue welfare reforms that we have enacted, and adds an incredible $181 billion in domestic spending to what we've proposed. Clearly, this partisan Democratic budget is a dagger aimed straight at the heart of America's rebuilding program.

We've worked very hard over the last 2 years to reduce the growth of domestic social spending. The Democratic proposal would throw our budget savings out the window and turn the clock back to pre-1981 when domestic spending was soaring out of control and we had double-digit inflation and 20-percent interest rates.

We worked very hard to give the American people their first real tax reduction—a rate reduction in nearly 20 years. We wanted to permit citizens to keep more of the money they earn and to encourage them to save, invest, and help us increase worker productivity. All that's now happening. We're witnessing a renaissance in the values of thrift and enterprise. But the Democratic budget would crush the working people of America with $316 billion in new tax increases over the next 5 years.

Repeal of the third-year tax cut and indexing would have little impact on the wealthy. But it would cost a typical median-income family of four $3,550 in higher taxes through 1988. Nor would this tremendous tax increase reduce the deficit. To reduce the deficit, we don't want or need higher taxes. We need economic growth, a kind of growth that has already begun.

Finally, we've worked hard to begin the long, tough job of rebuilding America's defense security. And we're making progress. But the Democratic budget would cripple those efforts, too, slashing our defense budget authority request by more than $200 billion through 1988. Nothing could bring greater joy to the Kremlin than seeing the United States abandon its defense rebuilding program after barely 1 year.

Let me read you a statement that Harry Truman made in 1945 after he'd studied the reports on Pearl Harbor. He said, "... I came to the conclusion that the whole thing is the result of the policy which the country itself pursued. The country was not ready for preparedness. Every time the President made an effort to get a preparedness program through the Congress, it was stifled. Whenever the President made a statement about the necessity of preparedness, he was vilified for doing it." And being able to remember those times, I know he's exactly right in what he said.

I'd only add to what Truman said, that if we can't learn from the mistakes of history, as you know, we're bound to repeat them.

I'm asking the members of our party, responsible Democrats, and every concerned American to work with us in opposing the liberal Democratic budget. We've come too far and worked too hard to see the recovery now underway destroyed by a reckless return to the failed policies of the past.

Now, that's the end of the statement, but let me just say I am looking forward to—I think that—to face you here in the Press Room in which you can have a fling at questions. Next week—we haven't selected the day, but I'll be doing that. My schedule is such, however, that I am taking no questions, but Dave Stockman is here for all the details that you may have. And as you can see, he's got some of them here—color charts before you. So, Dave, if you.—

Q. It sounds like you're getting ready to compromise on defense, Mr. President. [Laughter] You might have to say something to that.

The President. No, no. [Laughter]

Q. Forget about bipartisan cooperation, though, now with this

The President. What?

Q. with this rhetoric you've given, we can—

The President. I just asked for the knowledgeable and responsible Democrats to join us.