Chapter CXC: Conclusion (6)

But Communism died this year. Even as President, with the most fascinating possible vantage point, there were times when I was so busy helping to manage progress and lead change that I didn’t always show the joy that was in my heart But the biggest thing that has happened in the world in my life, in our lives, is this: By the grace of God, America won the Cold War. And there’s another to be singled out, though it may seem inelegant. I mean a mass of people called the American taxpayer. No ever thinks to thank the people who pay country’s bill or an alliance’s bill. But for a half Century now, the American people have shouldered the burden and paid taxes that were higher than they would have been to support a defense that was bigger than it would have been if imperial communism had never existed. But it did. But it doesn’t anymore. And here is a fact I wouldn’t mind the world acknowledging: The American taxpayer bore the brunt of the burden, and deserves a hunk of the glory.

And so, now, for the first time in 35 years, our strategic bombers stand down. No longer are they on round-the-clock alert. Tomorrow our children will go to school and study history and how plants grow. And they won’t have, as my children did, air-raid drills in which they crawl under their desks and cover their heads in case of nuclear war. My grandchildren don’t have to do that, and won’t have the bad dreams children once had in decades past. There are still threats. But the long drawn-out dread is over.

A year ago tonight I spoke to you at a moment of high peril. American forces had just unleashed Operation Desert Storm. And after 40 days in the desert skies and 4 days on the ground, the men and women of America’s armed forces and our allies accomplished the goals that I declared, and that you endorsed: we liberated Kuwait.

Soon after, the Arab world and Israel sat down to talk seriously, and comprehensively, about peace, an historic first. And soon after that, at Christmas, the last American hostages came home. Our policies were vindicated.

Much good can come from the prudent use of power. And much good can come from this: A world once divided into two armed camps now recognizes one sole and pre-eminent power, the United States of America. And this they regard with no dread. For the world trusts us with power, and the world is right. They trust us to be fair, and restrained. They trust us to be on the side of decency. They trust us to do what’s right.

I use those words advisedly. A few days after the war began, I received a telegram from Joanne Speicher, the wife of the first pilot killed in the gulf, Lieutenant Commander Scott Speicher. Even in her grief, she wanted me to know that some day, when her children were old enough, she would tell them “that their father went away to war because it was the right thing to do”. She said it all. It was the right thing to do.

And we did it together. There were honest differences here, in this chamber. But when the war began, you put your partisanship aside and supported our troops. This is still a time for pride, but this is no time to boast. For problems face us, and we must stand together once again and solve them--and not let our country down.

Two years ago, I began planning cuts in military spending that reflected the changes of the new era. But now, this year, with Imperial Communism gone, that process can be accelerated. Tonight I can tell you of dramatic changes in our strategic nuclear force. These are actions we are taking on our own, because they are the right thing to do.

After completing 20 planes for which we have begun procurement, we will shut down production of the B-2 bomber. We will cancel the ICBM program. We will cease production of new warheads for our sea-based missiles. We will stop all production of the peacekeeper missile. And we will not purchase any more advanced cruise missiles.

This weekend I will meet at Camp David with Boris Yeltsin of the Russian Federation. I have informed President Yeltsin that if the commonwealth, the former Soviet Union, will eliminate all land-based multiple-warhead ballistic missiles, I will do the following: We will eliminate all Peacekeeper missiles. We will reduce the number of warheads on Minuteman missiles to one and reduce the number of warheads on our sea-based missiles by about one-third. And we will convert a substantial portion of our strategic to primarily conventional use.

President Yeltsin’s early response has been very positive, and I expect our talks at Camp David to be fruitful. I want you to know that for half a century, American presidents have longed to make such decisions and say such words. But even in the midst of celebration, we must keep caution as a friend. For the world is still a dangerous place. Only the dead have seen the end of conflict. And though yesterday’s challenges are behind us, tomorrow’s are being born.

The Secretary of defense recommended these cuts after consultation with the joint chiefs of staff. And I make them with confidence. But do not misunderstand me: The reductions I have approved will save us an additional $50 billion over the next five years. By 1997 we will have cut defense by 30 percent since I took office. These cuts are deep, and you must know my resolve: this deep, and no deeper. To do less would be insensible to progress, but to do more would be ignorant of history. We must not go back to the days of “the hollow army”. We cannot repeat the mistakes made twice in this century when armistice was followed by recklessness and defense was purged as if the world was permanently safe.

I remind you this evening that I have asked for your support in funding a program to protect our country from limited nuclear missile attack. We must have this protection because too many people in too many countries have access to nuclear arms. There are those who say that now we can turn away from the world, that we have no special role, no special place. But we are the United States of America, the leader of the West that has become the leader of the world.

As long as I am President we will continue to lead in support of freedom everywhere, not out of arrogance and not out of altruism, but for the safety and security of our children. This is a fact: Strength in the pursuit of peace is no vice; isolationism in the pursuit of security is no virtue.

Now to our troubles at home. They are not all economic, but the primary problem is our economy. There are some good signs. Inflation, that thief, is down, and interest rates are down. But unemployment is too high, some industries are in trouble and growth is not what it should be. Let me tell you right from the start and right from the heart: I know we’re in hard times, but I know something else: This will not stand.

My friends in this chamber, we can bring the same courage and sense of common purpose to the economy that we brought to Desert Storm. And we can defeat hard times together. I believe you will help. One reason is that you’re patriots, and you want the best for your country. And I believe that in your hearts you want to put partisanship aside and get the job done, because it’s the right thing to do.

The power of America rests in a stirring but simple idea: that people will do great things if only you set them free. Well, we’re going to have to set the economy free, for if this age of miracles and wonders has taught us anything, it’s that if we can change the world, we can change America.

We must encourage investment. We must make it easier for people to invest money and make new products, new industries, and new jobs. We must clear away obstacles to new growth: high taxes, high regulation, red tape, and yes, wasteful government spending. None of this will happen with a snap of the fingers, but it will happen. And the test of a plan isn’t whether it’s called new or dazzling. The American people aren’t impressed by gimmicks. They’re smarter on this score than all of us in this room. The only test of a plan is, It is sound and will it work? We must have a short-term plan to address our immediate needs and heat up the economy. And then we need a long-term plan to keep the combustion going and to guarantee our place in the world economy.

There are certain things that a president can do without Congress, and I am going to do them. I have this evening asked major cabinet departments and federal agencies to institute a 90-day moratorium on any new federal regulations that could hinder growth. In those 90 days, major departments and agencies will carry out a top-to-bottom review of all regulations, old and new, to stop the ones that will hurt growth and speed up those that will help growth.

Further, for the untold number of hard-working, responsible American workers and businessmen and women who’ve been forced to go without needed bank loans, the banking credit crunch must end. I won’t neglect my responsibility for sound regulations that serve the public good, but regulatory overkill must be stopped. And I have instructed our government regulators to stop it.

I have directed Cabinet departments and federal agencies to speed up pro-growth expenditures as quickly as possible. This should put an extra $10 billion into the economy in the next six months. And our new transportation bill provides more than $150 billion for construction and maintenance projects that are vital to our growth and well-being. That means jobs building roads, jobs building bridges and jobs building railways. And I have this evening directed the secretary of the Treasury to change the federal tax withholding tables. With this change, millions of Americans from whom the government withholds more than necessary can now choose to have the government withhold less from their paychecks. Something tells me a number of taxpayers may take us up on this one. This initiative could return about $25 billion back into the economy over the next 12 months, money people can use to help pay for clothing, college or a new car. And finally, working with the Federal Reserve, we will continue to support monetary policy that keeps both interest rates and inflation down.

Now these are the things that I can do. And now, members of Congress, let me tell you what you can do for your country. You must, you must pass the other elements of my plan to meet our economic needs. Everyone knows investment speeds recovery. And I am proposing this evening a change in the alternative minimum tax, and the creation of a new 15% investment tax allowance. This will encourage businesses to accelerate investment and bring people back to work. Real estate has led our economy out of almost all the tough times we’ve ever had. Once building starts, carpenters and plumbers work, people buy homes and take out mortgages.

My plan would modify the passive-loss rule for active real-estate developers. And it would make it easier for pension plans to purchase real estate. For those Americans who dream of buying a first home but who can’t quite afford it, my plan would allow first-time home buyers to withdraw savings from IRAs without penalty and provide a $5000 tax credit for the first purchase of that home.

And finally, my immediate plan calls on Congress to give crucial help to people who own a home, to every one who has a business, a farm or a single investment.

This time, at this hour, I cannot take “No” for an answer. You must cut the capital gains tax on the people of this country. Never has an issue been so demagogued by its opponents. But the demagogues are wrong. They are wrong, and they know it. Sixty percent of people who benefit from lower capital gains have incomes under $50,000. A cut in the capital gains tax increases jobs and helps just about everyone in our country. And so I’m asking you to cut the capital gains tax to a maximum of 15.4%. And I’ll tell you, I’ll tell you, those of you who say, “Oh no, someone who’s comfortable may benefit from this” you kind of remind me of the old definition of the Puritan, who couldn’t sleep at night worrying that somehow someone somewhere was out having a good time.

The opponents of this measure and those who’ve authored various so-called soak-the-rich bills that are floating around this chamber should be reminded of something: When they aim at the big guy, they usually hit the little guy. And maybe it’s time that stopped.

This then is my short-term plan. Your part, members of Congress, requires enactment of these common-sense proposals that will have a strong effect on the economy, without breaking the budget agreement and without raising tax rates. And while my plan is being passed and kicking in, we’ve got to care for those in trouble today. I have provided for up to $4.4 billion in my budget to extend federal unemployment benefits, and I ask for Congressional action right away. And I thank the committee--well, at last. And let’s be frank. Let’s be frank; let me level with you.

I know, and you know, that my plan is unveiled in a political season. I know, and you know, that everything I propose will be viewed by some in merely partisan terms. But I ask you to know what is in my heart. And my aim is to increase our nation’s good. And I’m doing what I think is right; I’m proposing what I know will help. I pride myself that I’m a prudent man, and I believe that patience is a virtue, but I understand politics is, for some, a game and that sometimes the game is to stop all progress and then decry the lack of improvement. But let me tell you, let me tell you, far more important than my political future--and far more important than yours--is the well-being of our country. And members of this chamber, members of this chamber, are practical people, and I know you won’t resent some practical advice: When people put their party’s fortunes, whatever the party, whatever the side of this aisle, before the public good, they court defeat not only for their country, but for themselves. And they will certainly deserve it.

And I submit my plan tomorrow. And I am asking you to pass it by March 20. From the day after that--if it must be--the battle is joined. And you know, when principle is at stake, I relish a good fair fight.

I said my plan has two parts, and it does. And it’s the second part that is the heart of the matter. For it’s not enough to get an immediate burst. We need long-term improvement in our economic position. We all know that the key to our economic future is to insure that America continues as the economic leader of the world. We have that in our power. Here, then, is my long-term plan to guarantee our future.

First, trade: We will work to break down the walls that stop world trade. We will work to open markets everywhere. And in our major trade negotiations, I will continue pushing to eliminate tariffs and subsidies that damage America’s farmers and workers. And we’ll get more good American jobs within our own hemisphere through the North American Free Trade Agreement, and through the Enterprise for the Americas Initiative. But changes are here, and more are coming. The work place of the future will demand more highly skilled workers than ever, people who are computer literate, highly educated.

And we must be the world’s leader in education. And we must revolutionize America’s schools. My America 2000 strategy will help us reach that goal. My plan will give parents more choice, give teachers more flexibility and help communities create new American schools. Thirty states across the nation have established America 2000 programs. Hundreds of cities and towns have joined. Now Congress must join this great movement. Pass my proposals for new American schools.

That was my second long-term proposal. And here’s my third: We must make common-sense investments that will help us compete, long-term, in the marketplace. We must encourage research and development. My plan is to make the R and D tax credit permanent, and to provide record levels of support, over $76 billion this year alone for people who explore the promise of emerging technologies.

And fourth, we must do something about crime and drugs. And it is time for a major renewed investment in fighting violent street crime. Its saps our strength and hurts our faith in our society, and in our future together. Surely a tired woman on her way to work at six in the morning on a subway deserves the right to get there safely. And surely, it’s true that everyone who changes his or her way of life because of crime--from those afraid to go our at night to those afraid to walk in the parks they pay for--surely those people have been denied a basic civil right. It is time to restore it. Congress, pass my comprehensive crime bill. It is tough on criminals and supportive of police, and it has been languishing in these hallowed halls for years now. Pass it. Help your country.

And fifth, I ask you tonight to fund our HOPE housing proposal and to pass my enterprise-zone legislation, which will get businesses into the inner city. We must empower the poor with the pride that comes from owning a home, getting a job, becoming part of things. My plan would encourage real estate construction by extending tax incentives for mortgage-revenue bonds and low-income housing. And I ask tonight for record expenditures for the program that helps children born into want move into excellence: Head Start.

Step six: We must reform our health care system for this too, bears on whether or not we can compete in the world. American health costs have been exploding. This year America will spend over $800 billion on health, and that is expected to grow to $1.6 trillion by the end of the decade. We simply cannot afford this. The cost of health care shows up not only in your family budget, but in the price of everything we buy and everything we sell. When health coverage for a fellow on the assembly line costs thousands of dollars, the cost goes into the product he makes. And you pay the bill. Now we must make a choice.

Now some pretend we can have it both ways: they call it play or pay. But that expensive approach is unstable. It will mean higher taxes, fewer jobs, and eventually, a system under complete government control. Really, there are only two options. And we can move toward a nationalized system, a system which will restrict patient choice in picking a doctor and force the government to ration services arbitrarily. And what we’ll get is patients in long lines, indifferent service and a huge new tax burden. Or we can reform our own private health-care system, which still gives us, for all its flaws, the best quality health care in the world. Well, let’s build on our strengths.

My plan provides insurance security for all Americans while preserving and increasing the idea of choice. We make basic health insurance affordable for all low-income people not now covered. We do it by providing a health-insurance tax credit of up to $3750 for each low-income family. The middle class gets help, too. And by reforming the health insurance market, my plan assures that Americans will have access to basic health insurance even if they change jobs or develop serious health problem We must bring costs under control, preserve quality, preserve choice and reduce people’s nagging daily worry about health insurance. My plan, the details of which I will announce shortly, does just that.

And seventh, we must get the federal deficit under control. We now have in law, enforcable spending caps, and a requirement that we pay for the programs we create. There are those in Congress who would ease that discipline now. But I cannot let them do it. And I won’t. My plan would freeze all domestic discretionary budget authority which means “No more next year than this year”. I will not tamper with Social Security but I would put real caps on the growth of uncontrolled spending. And I would also freeze federal domestic government employment. And with the help of Congress, my plan will get rid of 246 programs that don’t deserve federal funding. Some of them have noble titles, but none of them is indispensible. We can get rid of each and every one of them.

You know, it’s time we rediscovered a home truth the American people have never forgotten: the government is too big and spends too much. And I call on Congress to adopt a measure that will help put an end to the annual ritual of filling the budget with pork-barrel appropriations. Every year, the press has a field day making fun of outrageous examples, a Lawrence Welk Museum, a research grant for Belgian Endive. We all know how these things get into the budget, and maybe you need someone to help you say no. I know how to say it. And you know what I need to make it stick. Give me the same thing 43 governors have--the line-item veto--and let me help you control spending.

We must put an end to unfinanced government mandates. These are the requirements Congress puts on our cities, counties and states without supplying the money. And if Congress passes a mandate, it should be forced to pay for it and balance the cost with savings elsewhere. After all, a mandate just increases someone else’s tax burden, and that means higher taxes at the state and local level.

Step Eight: Congress should enact the bold reform proposals that are still awaiting congressional action: bank reform, civil justice reform, tort reform, and my national energy strategy.

And finally, we must strengthen the family, because it is the family that has the greatest bearing on our future. When Barbara holds an AIDS baby in her arms and reads to children, she’s saying to every person in this country, “Family Matters”.

And I am announcing tonight a new commission on America’s urban families. I’ve asked Missouri’s governor, John Ashcroft, to be chairman, former Dallas Mayor Annetter Strauss to be co-chair. You know, I had Mayors, the leading mayors from the League of Cities, in the other day at the White House, and they told me something striking. They said that every one of them, Republican and Democrat, agreed on one thing: That the major cause of the problems of the cities is the dissolution of the family. And they asked for this commission, and they were right to ask, because it’s time to determine what we can do to keep families together, strong and sound.

There’s one thing we can do right away: Ease the burden of rearing a child. I ask you tonight to raise the personal exemption by $500 per child for every family. For a family with four kids, that’s an increase of $2000. This is a good start in the right direction, and it’s what we can afford. It’s time to allow families to deduct the interest they pay on student loans. And I’m asking you to do just that. And I’m asking you to allow people to use money from their IRAs to pay medical and educational expenses, all without penalties. And I’m asking for more. Ask American parents what they dislike about how things are going in our country, and chances are good that pretty soon they’ll get to welfare.

Americans are the most generous people on Earth. But we have to go back to the insight of Franklin Roosevelt who, when he spoke of what became the welfare program, want that it must not become a narcotic and a subtle destroyer of the spirit. Welfare was never meant to be a life style. It was never meant to be a habit. It was never supposed to be passed on from generation to generation like a legacy. It’s time to replace the assumptions of the welfare state and help reform the welfare system.

States throughout the country are beginning to operate with new assumptions: that when able-bodied people receive government assistance they have responsibilities to the taxpayer. A responsibility to seek work, education, or job training. A responsibility to get their lives in order. A responsibility to hold their families together and refrain from having children out of wedlock. And a responsibility to obey the law. We are going to help this movement. Often, state reform requires waiving certain federal regulations. I will act to make that process easier and quicker for every state that asks our help. And I want to add, as we make these changes, we work together to improve this system, that our intention is not scapegoating and finger-pointing. If you read the papers or watch TV you know there’s been a rise these days in a certain kind of ugliness: racist comments, anti-Semitism, an increased sense of division. Really, this is not us. This is not who we are. And this is not acceptable.

And so you have my plan for America. And I am asking for big things, but I believe in my heart you will do what’s right.

And you know, it’s kind of an American tradition to show a certain skepticism toward our democratic institutions. I myself have sometimes thought the aging process could be delayed if it had to make its way through Congress. But you will deliberate, and you will discuss, and that is fine. But my friends the people cannot wait. They need help now. And there’s a mood among us. People are worried. There has been talk of decline. Someone even said our workers are lazy and uninspired. And I thought, “Really? Go tell Neil Armstrong standing on the moon. Tell the American farmer who feeds his country and the world. Tell the men and women of Desert Storm.” Moods come and go, but greatness endures. Our does.

And maybe for a moment it’s good to remember what, in the dailyness of our lives, we forget. We are still and ever the freest nation on Earth, the kindest nation on Earth, the strongest nation on Earth. And we have always risen to the occasion. And we are going to lift this nation out of hard times inch by inch and day by day, and those who would stop us better step aside. Because I look at hard times and I make this vow: This will not stand. And so we move on, together, a rising nation, the once and future miracle that is still, this night, the hope of the world.

***

State of the Union Address by Bill Clinton February 17, 1993

The speech was not officially deemed a “State of the Union address”; like the freshman addresses of President George H. W. Bush, President Clinton treated this speech as simply an “Address to a Joint Session of Congress.”

Mr. President, Mr. Speaker, Members of the House and the Senate, distinguished Americans here as visitors in this Chamber, as am I. It is nice to have a fresh excuse for giving a long speech. [Laughter]

When Presidents speak to Congress and the Nation from this podium, typically they comment on the full range in challenges and opportunities that face the United States. But this is not an ordinary time, and for all the many tasks that require our attention, I believe tonight one calls on us to focus, to unite, and to act. And that is our economy. For more than anything else, our task tonight as Americans is to make our economy thrive again.

Let me begin by saying that it has been too long, at least three decades, since a President has come and challenged Americans to join him on a great national journey, not merely to consume the bounty of today but to invest for a much greater one tomorrow.

Like individuals, nations must ultimately decide how they wish to conduct themselves, how they wish to be thought of by those with whom they live, and later, how they wish to be judged by history. Like every individual man and woman, nations must decide whether they are prepared to rise to the occasions history presents them.

We have always been a people of youthful energy and daring spirit. And at this historic moment, as communism has fallen, as freedom is spreading around the world, as a global economy is taking shape before our eyes, Americans have called for change. And now it is up to those of us in this room to deliver for them.

Our Nation needs a new direction. Tonight I present to you a comprehensive plan to set our Nation on that new course. I believe we will find our new direction in the basic old values that brought us here over the last two centuries: a commitment to opportunity, to individual responsibility, to community, to work, to family, and to faith. We must now break the habits of both political parties and say there can be no more something for nothing and admit frankly that we are all in this together.

The conditions which brought us as a nation to this point are well-known: two decades of low productivity, growth, and stagnant wages; persistent unemployment and underemployment; years of huge Government deficits and declining investment in our future; exploding health care costs and lack of coverage for millions of Americans; legions of poor children; education and job training opportunities inadequate to the demands of this tough, global economy. For too long we have drifted without a strong sense of purpose or responsibility or community.

And our political system so often has seemed paralyzed by special interest groups, by partisan bickering, and by the sheer complexity of our problems. I believe we can do better because we remain the greatest nation on Earth, the world’s strongest economy, the world’s only military superpower. If we have the vision, the will, and the heart to make the changes we must, we can still enter the 21st century with possibilities our parents could not even have imagined and enter it having secured the American dream for ourselves and for future generations.

I well remember 12 years ago President Reagan stood at this very podium and told you and the American people that if our national debt were stacked in thousand-dollar bills, the stack would reach 67 miles into space. Well, today that stack would reach 267 miles. I tell you this not to assign blame for this problem. There is plenty of blame to go around in both branches of the Government and both parties. The time has come for the blame to end. I did not seek this office to place blame. I come here tonight to accept responsibility, and I want you to accept responsibility with me. And if we do right by this country, I do not care who gets the credit for it.

The plan I offer you has four fundamental components. First, it shifts our emphasis in public and private spending from consumption to investment, initially by jumpstarting the economy in the short term and investing in our people, their jobs, and their incomes over the long run. Second, it changes the rhetoric of the past into the actions of the present by honoring work and families in every part of our public decision-making. Third, it substantially reduces the Federal deficit honestly and credibly by using in the beginning the most conservative estimates of Government revenues, not, as the executive branch has done so often in the past, using the most optimistic ones. And finally, it seeks to earn the trust of the American people by paying for these plans first with cuts in Government waste and efficiency; second, with cuts, not gimmicks, in Government spending; and by fairness, for a change, in the way additional burdens are borne.

Tonight I want to talk with you about what Government can do because I believe Government must do more. But let me say first that the real engine of economic growth in this country is the private sector, and second, that each of us must be an engine of growth and change. The truth is that as Government creates more opportunity in this new and different time, we must also demand more responsibility in turn.

Our immediate priority must be to create jobs, create jobs now. Some people say, “Well, we’re in a recovery, and we don’t have to do that.” Well, we all hope we’re in a recovery, but we’re sure not creating new jobs. And there’s no recovery worth its salt that doesn’t put the American people back to work.

To create jobs and guarantee a strong recovery, I call on Congress to enact an immediate package of jobs investments of over $30 billion to put people to work now, to create a half a million jobs: jobs to rebuild our highways and airports, to renovate housing, to bring new life to rural communities, and spread hope and opportunity among our Nation’s youth. Especially I want to emphasize, after the events of last year in Los Angeles and the countless stories of despair in our cities and in our poor rural communities, this proposal will create almost 700,000 new summer jobs for displaced, unemployed young people alone this summer. And tonight I invite America’s business leaders to join us in this effort so that together we can provide over one million summer jobs in cities and poor rural areas for our young people.

Second, our plan looks beyond today’s business cycle because our aspirations extend into the next century. The heart of this plan deals with the long term. It is an investment program designed to increase public and private investment in areas critical to our economic future. And it has a deficit reduction program that will increase the savings available for the private sector to invest, will lower interest rates, will decrease the percentage of the Federal budget claimed by interest payments, and decrease the risk of financial market disruptions that could adversely affect our economy.

Over the long run, all this will bring us a higher rate of economic growth, improved productivity, more high-quality jobs, and an improved economic competitive position in the world. In order to accomplish both increased investment and deficit reduction, something no American Government has ever been called upon to do at the same time before, spending must be cut and taxes must be raised.

The spending cuts I recommend were carefully thought through in a way to minimize any adverse economic impact, to capture the peace dividend for investment purposes, and to switch the balance in the budget from consumption to more investment. The tax increases and the spending cuts were both designed to assure that the cost of this historic program to face and deal with our problems will be borne by those who could readily afford it the most. Our plan is designed, furthermore, and perhaps in some ways most importantly, to improve the health of American business through lower interest rates, more incentives to invest, and better trained workers.

Because small business has created such a high percentage of all the new jobs in our Nation over the last 10 or 15 years, our plan includes the boldest targeted incentives for small business in history. We propose a permanent investment tax credit for the smallest firms in this country, with revenues of under $5 million. That’s about 90 percent of the firms in America, employing about 40 percent of the work force but creating a big majority of the net new jobs for more than a decade. And we propose new rewards for entrepreneurs who take new risks. We propose to give small business access to all the new technologies of our time. And we propose to attack this credit crunch which has denied small business the credit they need to flourish and prosper.

With a new network of community development banks and $1 billion to make the dream of enterprise zones real, we propose to bring new hope and new jobs to storefronts and factories from south Boston to south Texas to south central Los Angeles. This plan invests in our roads, our bridges, our transit systems, in high-speed railways and high-tech information systems. And it provides the most ambitious environmental cleanup in partnership with State and local government of our time, to put people to work and to preserve the environment for our future.

Standing as we are on the edge of a new century, we know that economic growth depends as never before on opening up new markets overseas and expanding the volume of world trade. And so, we will insist on fair trade rules in international markets as a part of a national economic strategy to expand trade, including the successful completion of the latest round of world trade talks and the successful completion of a North American Free Trade Agreement with appropriate safeguards for our workers and for the environment.

At the same time--and I say this to you in both parties and across America tonight, all the people who are listening--it is not enough to pass a budget or even to have a trade agreement. This world is changing so fast that we must have aggressive, targeted attempts to create the high-wage jobs of the future. That’s what all our competitors are doing. We must give special attention to those critical industries that are going to explode in the 21st century but that are in trouble in America today, like aerospace. We must provide special assistance to areas and to workers displaced by cuts in the defense budget and by other unavoidable economic dislocations.

And again I will say we must do this together. I pledge to you that I will do my best to see that business and labor and Government work together for a change.

But all of our efforts to strengthen the economy will fail--let me say this again; I feel so strongly about this--all of our efforts to strengthen the economy will fail unless we also take this year, not next year, not 5 years from now but this year, bold steps to reform our health care system.

In 1992, we spent 14 percent of our income on health care, more than 30 percent more than any other country in the world, and yet we were the only advanced nation that did not provide a basic package of health care benefits to all of its citizens. Unless we change the present pattern, 50 percent of the growth in the deficit between now and the year 2000 will be in health care costs. By the year 2000 almost 20 percent of our income will be in health care. Our families will never be secure, our businesses will never be strong, and our Government will never again be fully solvent until we tackle the health care crisis. We must do it this year.

The combination of the rising cost of care and the lack of care and the fear of losing care are endangering the security and the very lives of millions of our people. And they are weakening our economy every day. Reducing health care costs can liberate literally hundreds of billions of dollars for new investment in growth and jobs. Bringing health costs in line with inflation would do more for the private sector in this country than any tax cut we could give and any spending program we could promote. Reforming health care over the long run is critically essential to reducing not only our deficit but to expanding investment in America.

Later this spring, after the First Lady and the many good people who are helping her all across the country complete their work, I will deliver to Congress a comprehensive plan for health care reform that finally will bring costs under control and provide security to all of our families, so that no one will be denied the coverage they need but so that our economic future will not be compromised either. We’ll have to root out fraud and overcharges and make sure that paperwork no longer chokes your doctor. We’ll have to maintain the highest American standards and the right to choose in a system that is the world’s finest for all those who can access it. But first we must make choices. We must choose to give the American people the quality they demand and deserve with a system that will not bankrupt the country or further drive more Americans into agony.

Let me further say that I want to work with all of you on this. I realize this is a complicated issue. But we must address it. And I believe if there is any chance that Republicans and Democrats who disagree on taxes and spending or anything else could agree on one thing, surely we can all look at these numbers and go home and tell our people the truth. We cannot continue these spending patterns in public or private dollars for health care for less and less and less every year. We can do better. And I will work to do better.

Perhaps the most fundamental change the new direction I propose offers is its focus on the future and its investment which I seek in our children. Each day we delay really making a commitment to our children carries a dear cost. Half of the 2-year-olds in this country today don’t receive the immunizations they need against deadly diseases. Our plan will provide them for every eligible child. And we know now that we will save $10 later for every $1 we spend by eliminating preventable childhood diseases. That’s a good investment no matter how you measure it.

I recommend that the women, infants, and children’s nutrition program be expanded so that every expectant mother who needs the help gets it. We all know that Head Start, a program that prepares children for school, is a success story. We all know that it saves money. But today it just reaches barely over one-third of all the eligible children. Under this plan, every eligible child will be able to get a head start. This is not just the right thing to do; it is the smart thing to do. For every dollar we invest today, we’ll save $3 tomorrow. We have to start thinking about tomorrow. (I’ve heard that somewhere before.) [Laughter]

We have to ask more in our schools of our students, our teachers, our principals, our parents. Yes, we must give them the resources they need to meet high standards, but we must also use the authority and the influence and the funding of the Education Department to promote strategies that really work in learning. Money alone is not enough. We have to do what really works to increase learning in our schools.

We have to recognize that all of our high school graduates need some further education in order to be competitive in this global economy. So we have to establish a partnership between businesses and education and the Government for apprenticeship programs in every State in this country to give our people the skills they need. Lifelong learning must benefit not just young high school graduates but workers, too, throughout their career. The average 18-year-old today will change jobs seven times in a lifetime. We have done a lot in this country on worker training in the last few years, but the system is too fractured. We must develop a unified, simplified, sensible, streamlined worker-training program so that workers receive the training they need regardless of why they lost their jobs or whether they simply need to learn something new to keep them. We have got to do better on this.

And finally, I propose a program that got a great response from the American people all across this country last year: a program of national service to make college loans available to all Americans and to challenge them at the same time to give something back to their country as teachers or police officers or community service workers; to give them the option to pay the loans back, but at tax time so they can’t beat the bill, but to encourage them instead to pay it back by making their country stronger and making their country better and giving us the benefit of their knowledge.

A generation ago when President Kennedy proposed and the United States Congress embraced the Peace Corps, it defined the character of a whole generation of Americans committed to serving people around the world. In this national service program, we will provide more than twice as many slots for people before they go to college to be in national service than ever served in the Peace Corps. This program could do for this generation of Members of Congress what the land grant college act did and what the GI bill did for former Congressmen. In the future, historians who got their education through the national service loan will look back on you and thank you for giving America a new lease on life, if you meet this challenge.

If we believe in jobs and we believe in learning, we must believe in rewarding work. If we believe in restoring the values that make America special, we must believe that there is dignity in all work, and there must be dignity for all workers. To those who care for our sick, who tend our children, who do our most difficult and tiring jobs, the new direction I propose will make this solemn, simple commitment: By expanding the refundable earned-income tax credit, we will make history. We will reward the work of millions of working poor Americans by realizing the principle that if you work 40 hours a week and you’ve got a child in the house, you will no longer be in poverty.

Later this year, we will offer a plan to end welfare as we know it. I have worked on this issue for the better part of a decade. And I know from personal conversations with many people that no one, no one wants to change the welfare system as badly as those who are trapped in it. I want to offer the people on welfare the education, the training, the child care, the health care they need to get back on their feet, but say after 2 years they must get back to work, too, in private business if possible, in public service if necessary. We have to end welfare as a way of life and make it a path to independence and dignity.

Our next great goal should be to strengthen our families. I compliment the Congress for passing the Family and Medical Leave Act as a good first step, but it is time to do more. This plan will give this country the toughest child support enforcement system it has ever had. It is time to demand that people take responsibility for the children they bring in this world.

And I ask you to help to protect our families against the violent crime which terrorizes our people and which tears our communities apart. We must pass a tough crime bill. I support not only the bill which didn’t quite make it to the President’s desk last year but also an initiative to put 100,000 more police officers on the street, to provide boot camps for first-time nonviolent offenders for more space for the hardened criminals in jail. And I support an initiative to do what we can to keep guns out of the hands of criminals. Let me say this. I will make you this bargain: If you will pass the Brady bill, I’ll sure sign it.

Let me say now, we should move to the harder parts.

I think it is clear to every American, including every Member of Congress of both parties, that the confidence of the people who pay our bills in our institutions in Washington is not high. We must restore it. We must begin again to make Government work for ordinary taxpayers, not simply for organized interest groups. And that beginning must start with real political reform. I am asking the United States Congress to pass a real campaign finance reform bill this year. I ask you to increase the participation of the American people by passing the motor voter bill promptly. I ask you to deal with the undue influence of special interests by passing a bill to end the tax deduction for lobbying and to act quickly to require all the people who lobby you to register as lobbyists by passing the lobbying registration bill.

Believe me, they were cheering that last section at home. I believe lobby reform and campaign finance reform are a sure path to increased popularity for Republicans and Democrats alike because it says to the voters back home, “This is your House. This is your Senate. We’re your hired hands, and every penny we draw is your money.”

Next, to revolutionize Government we have to ensure that we live within our means, and that should start at the top and with the White House. In the last few days I have announced a cut in the White House staff of 25 percent, saving approximately $10 million. I have ordered administrative cuts in budgets of agencies and departments. I have cut the Federal bureaucracy, or will over the next 4 years, by approximately 100,000 positions, for a combined savings of $9 billion. It is time for Government to demonstrate, in the condition we’re in, that we can be as frugal as any household in America.

And that’s why I also want to congratulate the Congress. I noticed the announcement of the leadership today that Congress is taking similar steps to cut its costs. I think that is important. I think it will send a very clear signal to the American people.

But if we really want to cut spending, we’re going to have to do more, and some of it will be difficult. Tonight I call for an across-the-board freeze in Federal Government salaries for one year. And thereafter, during this 4-year period, I recommend that salaries rise at one point lower than the cost of living allowance normally involved in Federal pay increases.

Next, I recommend that we make 150 specific budget cuts, as you know, and that all those who say we should cut more be as specific as I have been.

Finally, let me say to my friends on both sides of the aisle, it is not enough simply to cut Government; we have to rethink the whole way it works. When I became President I was amazed at just the way the White House worked, in ways that added lots of money to what taxpayers had to pay, outmoded ways that didn’t take maximum advantage of technology and didn’t do things that any business would have done years ago to save taxpayers’ money.

So I want to bring a new spirit of innovation into every Government Department. I want to push education reform, as I said, not just to spend more money but to really improve learning. Some things work, and some things don’t. We ought to be subsidizing the things that work and discouraging the things that don’t. I’d like to use that Superfund to clean up pollution for a change and not just pay lawyers.

In the aftermath of all the difficulties with the savings and loans, we must use Federal bank regulators to protect the security and safety of our financial institutions, but they should not be used to continue the credit crunch and to stop people from making sensible loans.

I’d like for us to not only have welfare reform but to reexamine the whole focus of all of our programs that help people, to shift them from entitlement programs to empowerment programs. In the end we want people not to need us anymore. I think that’s important.

But in the end we have to get back to the deficit. For years there’s been a lot of talk about it but very few credible efforts to deal with it. And now I understand why, having dealt with the real numbers for 4 weeks. But I believe this plan does; it tackles the budget deficit seriously and over the long term. It puts in place one of the biggest deficit reductions and one of the biggest changes in Federal priorities, from consumption to investment, in the history of this country at the same time over the next 4 years.