cent over the next 4 years, over and above the cuts in the White House, and we'll reduce employment, not by firing people but by attrition, by 100,000 over the next 4 years. That will save $9 billion. And yesterday the leaders of the House and the Senate announced that the Congress would follow our lead and cut their budgets by that much, which I think is good. There are 150 other specific cuts in this budget, including some that were very tough for me to recommend, some in programs that don't make any sense anymore. For example, do you remember when we had the Bicentennial celebration in 1976? There is still a Bicentennial Commission. [Laughter] Our Government's great at starting things and not very good at stopping things. So we eliminated a lot of things that ought to be stopped. The second thing we did was to reduce our investment in programs that have done a lot of good, but where the amount you're spending can't be justified anymore, including one that was really close to my heart. We recommended a reduction in the Federal subsidy to the Rural Electric Administration, something that serves a lot of people in my State and yours. But America is 100 percent electrified now, and we ought not to have the full subsidy continued from all of the rest of the people who get their electricity from someplace else. We recommended some unwarranted subsidies be eliminated because the need for the work is much less or nonexistent anymore. For example, we recommended a big cutback in a lot of programs related to the nuclear industry and the elimination of a nuclear research program that is inconsistent with our new energy future. We recommended some big changes in the environmental Superfund program: one, to make the polluters pay more and the taxpayers pay less and the second, to get the money freed up so that we can use the money to clean up pollution. It's all going to lawyer fees now, because people don't want any thing to happen. We're going to try to make it work. Finally, I recommended-and this was difficult for me, because I can't do anything as your President in the end without the support of the fine people in the Federal work force-but we recommended a freeze on Federal pay raises for a year, and modest pay raises for the next 3, because that saves billions of dollars that we don't have to take out of the rest of the people in taxes to reduce the deficit. So there are 150 tough cuts. Now, let me say I've already heard some people on the other side of the aisle say, "Well, he should have cut more." And my answer is: Show me where, but be specific. No hot air. Show me where, and be specific. And since I am here in Missouri, I think I will repeat that. Show me. And I say that not in the spirit of partisanship but in the spirit of genuine challenge. I know there is more that we can eliminate. I am honestly looking. I've just been there 4 weeks and a day, and I'm nowhere near through. And I want you to help me, and I want them to help me. Let me say also, the burdens in terms of taxes I think are imposed in a fair way. The rates of 98.9 percent of Americans will not be raised. Late in the last election, the New York Times carried a front-page story showing that 70 percent of the gains of the 1980's had been reaped by the top one percent of the people. This plan asked the top 1.2 percent of the people to have an income tax increase. This plan asked companies with incomes of over $10 million to match that income tax increase. This plan raises over 70 percent of the funds from people with incomes above $100,000. This plan raises no money from people with incomes below $30,000. And indeed, because we increased the refundable income tax credit, this plan, if it passes, will enable us to do something I would think every American would be proud of. For the first time ever, if this plan passes, we can say to the people of this country, "Look, we are rewarding work and family." If you work full-time and you've got a kid in your house, you won't live in poverty because of the changes we're going to have in the tax system. People making $40,000, $50,000, in that range, will pay about $17 a month under this plan. But let me tell you, a lot of those people, many of whom are in this station today, may wind up not being out any more money for this reason: Just since the election, since I said we're going to have a tough plan to reduce this debt, long-term interest rates have gone down. If you take only the reduction in interest rates which have occurred from the election day until this day, for everybody who gets the benefit of those lower interest rates in a home mortgage, a car payment, consumer credit, you will make more in lower interest rates than you'll pay in the energy tax if we can show that we're serious about cutting spending and cutting this deficit. We've got to do it. One final thing-which you'll also hear about from people who oppose this plan, I do propose to spend some more money but not in the old way. Look at what we spend it for. We have reduced Government consumption. We have reduced inessential programs. But we increase spending on jobs, a jobs program to create a half a million jobs starting right now, in building roads, repairing streets, fixing airports, cleaning up the environment with water systems and sewer systems; a million summer jobs for young people, if I could get the private sector to contribute to the 700,000 we're going to create in the Government. This program invests in opening the doors of college education to all people and giving them a chance to pay the loan back on favorable terms or to pay it back with service to our country. This plan will put 100,000 police officers on the streets of America over the next 4 years. This plan will give us a chance to invest in the new technologies that will create jobs for the people who have lost their jobs in the defense industries and in other big industries that have been downscaling. We have got to create some new jobs in this country, for goodness sakes. You can have all the other programs in the world, and unless we do it, we're going to be in trouble. And this plan will reduce the deficit by hundreds of billions of dollars over the next 5 years. And I ask you, I ask you to support it not just for you but for us, not just for narrow interest but for the national interest. I believe it will be good for virtually every American. Today, as we speak, a lot of big corporate executives are endorsing this plan, even though their income tax bills will go up, their companies' bills will go up, because they want a healthy, strong, well-educated, vibrant America with an investment climate that's good, with stable interest rates, with a declining deficit, with a health care issue addressed, and with a country that can grow into the 21st century. So a lot of the people who are paying this bill are going to support it because they trust us. And let me say this: We need you to hold our feet to the fire. No raising taxes unless we cut spending. We've got to do this in a package, and we've got to do it together. I need your help. I'm delighted to see you here today. With your help we can make the spirit of St. Louis the spirit of America. Thank you, and God bless you all. Remarks and a Question-and-Answer The President. Thank you very much. Let me say, first of all, what a wonderful time I have had in your community since I arrived last night. I have seen a lot of your fellow citizens who did not win the lottery. [Laughter] They were out by the Comfort Inn where we stayed last night, and they were around the city park where the Mayor and I went jogging this morning around the city park. It was 3 degrees, which I suppose means I don't have enough sense to be President. [Laughter] But we had a wonderful time. We ran around the park three times and saw a lot of-saw some students from the school and we saw some city employees and others. I flew in here with Congressman Strickland last night, and we had a great visit on the way in. I'm glad to see him over here. And so between the two of them I know a lot about this congressional district and a good deal about this community. I know it has a lot of beautiful old buildings—I saw them this morning-and was the first capital of Ohio. I also know it has a nice new McDonald's-[laughter]—because I went there this morning. Good to see you. How embarrassing. Let me say, too, I want to thank your school officials: Superintendent Cline and your principal, Rod Jenkins, and Melissa Hagen did a good job, don't you think? I thought she did a really good job. Maybe she'll be coming back here someday to hold a town meeting like this; you can't tell. I also want to say—I just have a couple of notes. Normally, I don't use them, and I want to put them down, but I asked for some notes about some people in the crowd because they illustrate what to me this effort that I have undertaken as your President is all about. Is John Cochran here? Is he here anywhere? John, are you here? Stand up there. Now, my notes say that he has 16 childrenand you're one of them-[laughter]—that he has the largest family-owned farm in town. And important to me, he owns the bowling alley. [Laughter] And I want to thank him. He was unable to come to the inauguration. I want to say--is 8-year-old Tiffany Sexton here? Stand up here, Tiffany. Now, these are her parents, Sgt. Anthony and Jerry Sexton; is that right? All of you stand up. I want you to see them. Now, she invited me to dinner and promised to cook. So I had to take a raincheck, and I asked them to come today. Is Cindy Baker here? Stand up. Cindy Baker has three children, one of whom is a student in this school. She wrote me a half a dozen times in the election, pleading with me to come to Chillicothe. So I thought since she was the first person who invited me, she should be here at this meeting. I also want you to know, you know, we had those famous bus tours, you remember Hillary and I and Al and Tipper Gore. What you may not know is the people who owned the bus company that we used all during the bus tours all across America are from Ŏhio. They're from Columbus, and they are here: Barbara and Tom Sabatino and Kerwin and Regina Elmers. Would they stand? They're here somewhere I think. Yes, in the back. There's Tom, my bus driver. Give him a hand. [Applause] Thanks. If it hadn't been for them, we might not have won the election. [Laughter] Now, let me just make a couple of introductory remarks, and then we'll get right to the questions, because I want to just restate very briefly how I came to the plan that I announced to the Congress a couple of nights ago. First, let me say that I was Governor for 12 years of a State with a lot of towns like this one, a lot of counties like Ross County, a lot of manufacturing facilities like the Mead Paper facility here that worked our people and a lot of people who worked on the farm. And we had a pretty tough time in the eighties. We lost a lot of manufacturing jobs, a lot of farm jobs. A lot of our small towns got in trouble. And I was forced to spend a lot of time trying to figure out how we could change things to make a better future for the hard-working good people of my State. So a lot of what I believe about all this goes directly to the experience that I've had for many years working with people like you. If I might, let me just mention one or two things. A lot of our problems stem from all the pressures we're having now in a global economy and stem from the fact that we've got some problems here at home which make it difficult for us to compete in that economy. We have a higher percentage of poor children. We have much more diversity than many of the countries with which we compete. And historically, we have never had the kind of partnership between Government and business and working people that some other countries have. So, for example, if you read yesterday Boeing is laying off a lot of employees in the airline manufacturing business-not affecting Ohio, but it's a big thing for America-in part because of defense cuts but in part because Europe put $26 billion into the airbus project, a direct taxpayer investment, to make sure they could make airplanes that would compete with Boeing, something that we haven't historically done. So we have a new global economy in which there are great opportunities but new challenges. We have some problems here at home that make it hard for us to compete. We have to educate a higher percentage of our people at a higher level. We have to provide basic health care to everybody but control health care costs. All of our major manufacturers are spending 30 percent more for health care than all their competitors around the world, and that puts them in a real bind. And we have many other challenges of this kind that we have to face. Now, for the last 12 years we have followed a certain approach there. We have said as a nation our policy is to keep taxes low on the wealthiest Americans in the hope that they will invest in our economy and make it grow. And that worked. In the last 12 years, the tax burden basically went up on the middle class, went down on the wealthiest Americans, and according to a study released last year, about 70 percent of the economic gains of the last decade went to the top 1 or 2 percent of the people in the country. That was a deliberate decision that was made to try to free up that money in the hope that it would be invested to create new jobs for everybody else. Also, our theory was that the Government should not be too active. So we didn't deal with a lot of the issues that other Govern lems for many, many American families. And we are not educating a high enough percentage of our people at very high levels to compete in this global economy. And because we lowered taxes a lot on the wealthy but could not control the health care costs the Government was spending, we starting running bigger deficits; so that, even though we reduced our investment in things like aid for small cities to create jobs, the cost of health care and the cost of interest on our debt exploded. So we've got a huge Government deficit. Our national debt is now 4 times as big as it was in 1980. So when I got elected President I did it with a conviction that we needed to do the following things. We needed to emphasize investment for jobs and for incomes. That means investments in new technologies, investments in things like highways and bridges and airports and water systems and sewer systems, investments in the areas that will create jobs for the future, and investments in education of our children all the way from Head Start, to college loans, to investments for adults to become retrained if they lose affordable health care for all Americans and their jobs. Second, that we needed to provide bring the cost in line with inflation before bankrupts the country with nothing to show for it. Third, that we had to bring down the for it. Third, that we had to bring down the national debt. And fourth, that we needed a national economic strategy where the American people could work in partnership again to try to grow this economy. ments around the world were dealing with, Well, there have been some not-too-bad years in the last 12. But overall, we've still got a lot of problems. Unemployment's too high. Most people are working harder for lower wages. Health care costs are exploding, but fewer people have health care coverage in this country than any other major country in the world. And the insecurity of losing health insurance is one of the major prob Now, we have a lot of tough decisions to make to try to pursue all these objectives at once. The plan I announced to the Congress relies on the following things. Number one, we cut spending-150 different, specific spending cuts-putting a lid on Federal pay increases, cutting the White House staff by 25 percent, cutting the administrative costs of the Federal Government by 14 percent over 4 years, saving billions and billions of dollars. Number two, we raise funds in taxes in a way that I think is fair, with 70 percent of the money coming from people whose incomes are above $100,000, and with a broadbased energy tax that would affect a little bit on oil, a little bit on natural gas, a little bit on coal, so we wouldn't hit any region of the country too much. Thirdly, we increase dramatically something that a lot of you may not know about is one of the best things in the Tax Code it's called the refundable earned income tax credit-so that no one with an income of $30,000 a year or less would pay any new money under this plan, and so that people who work 40 hours a week and have children in their home would be lifted above poverty for the first time for working, not for welfare, but for working. The other thing that you will hear from some of my critics and so I want to tell you it's true, is that we did actually increase some funds: in the short run, with a plan to jumpstart the economy by creating a half million new jobs; and over the long run, with increases in education programs from Head Start, to worker retraining, to apprenticeship programs for high school grads who don't go on to college, to increased access to college loans, to retraining for workers who lose their jobs when there are defense cuts or other cuts in our industry. We have to do that because that's what determines what people's incomes are and whether you can keep people working. We also did increase funds in direct aid to things that create jobs: new technologies and investments to put people to work. So it's a balanced program: deep spending cuts, tax increases fairly applied, and new investments in the areas that create jobs. That's what I'm trying to do. The Congress will decide to vote for it in part based on whether people in towns like Chillicothe all over America think it's a good deal. I can tell you this: The price of doing the same thing is higher than the price of my program. And I'll just give you one example and open the floor to questions. Just since the election, since we made it absolutely clear that we were determined to bring down the deficit, interest rates, long term, have begun to drop. If you look at the difference in long-term interest rates on election day and where they were after I made my speech to Congress, a lot of the people who might have spent $10 or $12 or $15 more per month in energy costs, directly and indirectly, will save much more than that if they're paying a home mortgage, a note on a car, they've got consumer credit, or they otherwise have to borrow money. That's because if you bring the deficit down, you not only free up tax dollars to spend on education and other things, you free up money in the private sector to borrow at lower interest rates. So an awful lot of people are going to save a lot of money on this program immediately. It will create jobs immediately. And the price of it, I am confident, is lower than the price of doing the same old thing. So I thank you for being here. I want to say a special word of thanks to all these Ohio elected officials who are here. I presume they've all been introduced, but I saw Senator Glenn and Senator Metzenbaum, and Speaker Riffe, a lot of others here. I thank them for being here. And we're here for you. So thank you very much, and I'll take ques tions. Social Security Q. I get Social Security disability, a little over $6,000 a year. And if that is willing to help bring the economy up to shape, I am willing to let some of my Social Security go for that economy. And I was wondering if that will affect my Social Security disability any. The President. The short answer to that is it depends on whether you pay any tax now on your income. Let me explain what that The only people on Social Security who will pay any more tax are those who pay some tax on it now. That is, in America today, if you drew a Social Security check, and in addition to the Social Security check, you have an income of $25,000 a year or more, or if you're a married couple, $32,000 a year or more, one-half of that income is subject to income tax at whatever rate your total income is. We propose to go from half of that to 85 percent, because that is about the amount that the average Social Security recipient should pay taxes on if they get the rest of it for a lifetime. The rest of it, that is, that 15 percent, will equal about what they paid in plus interest. So they get back what they paid in plus interest without taxation on aver |