My generation has a strong tradition of leadership. As young men and women we fought in World War II, and after we had won, we selflessly helped rebuild Europe and Japan. For 40 years, we held steadfast against communism and oppression. By standing for democracy and strength, by our willingness to sacrifice, we won the cold war. And when Saddam invaded Kuwait, we knew what to do, We knew that we had to stand up to aggression, and we did.
I am proud of this record. So I must tell you how much it troubles me to read today that Americans are losing faith in their leaders. There are a lot of reasons for this, and I have no doubt that I bear some of the blame. But tonight I want to go beyond the usual finger-pointing. I want to offer you real leadership.
We all know the economy is in trouble. The numbers-unemployment, inflation, interest rates-aren’t as bad as they were in some earlier recessions, and certainly we face nothing like the Great Depression, But beneath the statistics, there is a bad feeling in the country. This is a country that was built on optimism about the future. Yet many people now fear that their children will not be as well off as they were. This is a profound loss of faith.
I want to restore that faith. But to do it, I must first restore your faith in leadership. It’s time to tell the truth, to level with you.
There are two ways we could go. The first is to try to quickly pump some money into the economy. There has been a lot of talk lately about a tax cut to jump-start the economy. But it’s a fraud. A tax cut may make people feel a little better for a year, but it is almost sure to do the economy more harm than good.
By the same token, it’s very tempting to throw up trade barriers to protect American jobs from foreign competition. Trade barriers would save some jobs. But virtually everyone who has ever studied this question knows that in the long run, protectionism can ruin the economy. Indeed, a half century ago, high tariffs helped drive us right into the Great Depression.
I reject these quick fixes. In the long run, they will only hurt the country.
There is another way. I think we all know, or at least sense, that the whole country, the government and taxpayers alike, went on a spree in the 1980s. We spent too much and we borrowed too much. The economy grew, many people became prosperous. But many were left behind. And now all of us look to an uncertain future. We have to face up to this. But if we do it together, if everyone chips in, then the sacrifice will not be so great. If we do nothing, on the other hand, our problems will merely worsen.
We have to start right here in Washington. We have got to get control of federal spending. In real dollars, in the last two decades, federal spending has grown 94 percent. At that same time, the federal debt has tripled, from $1.3 trillion to $3.6 trillion. We can’t go on like this forever. We have to act. Everyone who has ever balanced a checkbook understands this. The United States is hardly about to go bankrupt, of course. But debt is choking the recovery, and it jeopardizes our long-term growth.
There are a number of ways to save money.I could suggest a whole lot of nickel-and-dime cuts that would produce a lot of wrangling and not much accomplishment. Instead, I have decided to take the direct approach. Tonight I am proposing that for the fiscal year 1994, we freeze all civilian spending. Period. We give the economy another year to get out of the recession, but then we take our medicine. A freeze will save about $45 billion. If we do this, we will be telling the entire world that we have the courage to control our own destiny.
We will be doing this not by the old smoke-and-mirrors tricks, but honestly. It does mean some sacrifice. Entitlement programs will not be allowed to grow in 1994. That means no cost-of-living increase in your social-security check. I know this will be unpopular. But the fact is that entitlement programs, like social security and Medicare, account for about 75 percent of nonmilitary spending. You can’t honestly control the growth of government spending without doing something about entitlements. But politicians don’t like to admit it.
The biggest run-up in government costs has come in health care. The annual bill for health care has been growing at three times the rate of inflation. At the same time, 34 million Americans have no health insurance. This is intolerable. Under legislation I am submitting to Congress tonight, government can and will guarantee basic hospital and medical care to all Americans. It will be paid for by modestly cutting the fees paid to physicians and by curbing the growth of unnecessary services.
As for the military, we all know the cold war is over. The defense budget is already shrinking, but the threat of war is shrinking faster. I know that we can stay strong and still reduce the defense budget by an additional 20 percent over five years. This will save $50 billion a year.
Another way to cut the deficit is to raise revenues. I am philosophically opposed to new taxes. Too often it’s just an excuse to spend more money, But I realize that there are questions of fairness that can’t be ignored. Republicans are always being accused of protecting the rich. Well, tonight I am here to say that the wealthy will pay their share. It would be a mistake to alter the basic tax rates. But the members of congress all know that there are loopholes favoring the rich that, if closed, could save at least $10 billion.
I know that even before I finish speaking my plan will come under the most bitter attack. To propose cuts in entitlement programs has long been considered political suicide. And no lobby is stronger than the military-defense complex. There is only one way Congress can be persuaded to pass this program.
That is, if you stand with me. I am telling you the truth, but you, the American voters, must be honest with yourselves. The program I am proposing requires some sacrifice, but I think you all know, deep down, that it’s the best way-the only honest way-to get the country on track again. I especially want to reach out to those of you in my generation. This, for us, is a last chance to lead. It is an opportunity to make the future secure for our children and grandchildren.
