Rosenfeld Susan. Encyclopedia of American Historical Documents

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government in Panama will permit us to honor these

commitments. As soon as the new government recom-

mends a qualified candidate, Panamanian, to be Admin-

istrator of the Canal, as called for in the treaties, I will

submit this nominee to the Senate for expedited consid-

eration.

I am committed to strengthening our relationship

with the democratic nations in this hemisphere. I will

continue to seek solutions to the problems of this region

through dialog and multilateral diplomacy. I took this

action only after reaching the conclusion that every other

avenue was closed and the lives of American citizens

were in grave danger. I hope that the people of Panama

will put this dark chapter of dictatorship behind them

and move forward together as citizens of a democratic

Panama with this government that they themselves have

elected.

The United States is eager to work with the Panama-

nian people in partnership and friendship to rebuild their

economy. The Panamanian people want democracy,

peace, and the chance for a better life in dignity and free-

dom. The people of the United States seek only to sup-

port them in pursuit of these noble goals. Thank you very

much.

Source:

Public Papers of the Presidents of the United States: George H. W.

Bush, 1989. Washington, D.C.: Government Printing Of-

fice, 1992.

Persian Gulf War Resolution, 1991

Joint resolution passed by both houses of Congress on January

12, 1991, authorizing President George Bush to use U.S. mili-

tary power to force Iraq to withdraw from Kuwait. After lengthy

debate, the resolution passed the House of Representatives by

a vote of 250 to 183 and the Senate by a vote of 52 to 47. The

declaration stated that the United States was acting because of

Iraq’s invasion of Kuwait on August 2, 1990; its refusal to com-

ply with a United Nations Security Council resolution ordering

it to withdraw from Kuwait; and because of the threat posed by

Iraq’s military arsenal. The congressional resolution authorized

the president to use U.S. military troops in order to force Iraq

to comply with the UN resolution. This was the first time

Congress had authorized the use of offensive military action

since the controversial Gulf of Tonkin Resolution in 1964.

________________________

_______________________

Whereas the President of the United States, with the

authorization of Congress, has ordered military action

against Iraq in an effort to force Iraqi Armed Forces from

occupied Kuwait;

Whereas 415,000 men and women of the United

States Armed Forces are now involved in armed conflict;

Whereas 158,000 members of the Reserves and

National Guard have been called to active duty since

August 22 and may become involved in armed conflict;

and

Whereas Congress and the American people have the

greatest pride in the men and women of the United States

Armed Forces and support them in their efforts: Now,

therefore, be it

Resolved by the Senate (the House of Representatives

concurring), That (a) the Congress commends and sup-

ports the efforts and leadership of the President as Com-

mander in Chief in the Persian Gulf hostilities.

(b) The Congress unequivocally supports the men and

women of our Armed Forces who are carrying out their

missions with professional excellence, dedicated patrio-

tism and exemplary bravery.

Agreed to January 18, 1991.

Source:

Statutes at Large, Vol. 105, p. 2,409.

George H. W. Bush, Address on the

End of the Persian Gulf War, 1991

Speech given by President George Bush to a joint session of

Congress on March 6, 1991, announcing that after nine days

of military action (February 23–March 3) the U.S.-dominated

allied effort had achieved its goal of forcing Iraq to withdraw

from Kuwait. “The war is over,” Bush declared. He expressed

his thanks to the many nations and individuals who had con-

tributed to the success of Operation Desert Storm, as the mis-

sion was known. Expanding on the theme of peace, Bush

spoke about his desire to create “a new world order” in which

strong nations joined together to protect weaker ones, all

under United Nations auspices.

It soon became apparent that by not invading Baghdad,

crushing Saddam Hussein’s palace guard and ousting Saddam

as leader, the threat the Iraqi leader posed would continue.

Inspectors were allowed into Iraq under UN resolutions and

destroyed large caches of weapons. They also concluded that

Iraq had been within a year of producing a nuclear weapon and

that Iraq still contained many hidden sites for producing and

storing biological and chemical weapons. Most other UN mem-

bers agreed to Iraqi restrictions on inspectors (who were

removed completely in 1998). Saddam blamed the suffering of

his citizens (while he, his family, and cronies enjoyed enormous

wealth) on sanctions placed on Iraq by the United Nations.

In 2002 President George W. Bush (George H. W.’s son)

vowed to make sure that Iraq was disarmed and to end Sad-

1712 ERA 10: Contemporary United States

Foreign Policy Issues 1713

dam’s reign as the only way to ensure that Iraq would not use

biological, chemical, or nuclear weapons.

In his 1991 speech, the president also addressed a num-

ber of domestic issues, expressing his desire to “get this econ-

omy rolling again,” and urged the public to support his

domestic programs, including legislation on transportation,

energy, and crime.

________________________

_______________________

Speaker Foley. Mr. President, it is customary at joint ses-

sions for the Chair to present the President to the Mem-

bers of Congress directly and without further comment.

But I wish to depart from tradition tonight and express to

you on behalf of the Congress and the country, and

through you to the members of our Armed Forces, our

warmest congratulations on the brilliant victory of the

Desert Storm Operation.

Members of the Congress, I now have the high privi-

lege and distinct honor of presenting to you the President

of the United States.

The President. Mr. President. And Mr. Speaker, thank

you, sir, for those very generous words spoken from the

heart about the wonderful performance of our military.

Members of Congress, 5 short weeks ago I came to

this House to speak to you about the state of the Union.

We met then in time of war. Tonight, we meet in a world

blessed by the promise of peace.

From the moment Operation Desert Storm com-

menced on January 16th until the time the guns fell silent

at midnight 1 week ago, this nation has watched its sons

and daughters with pride—watched over them with

prayer. As Commander in Chief, I can report to you our

armed forces fought with honor and valor. And as Presi-

dent, I can report to the Nation aggression is defeated.

The war is over.

This is a victory for every country in the coalition, for

the United Nations. A victory for unprecedented interna-

tional cooperation and diplomacy, so well led by our Sec-

retary of State, James Baker. It is a victory for the rule of

law and for what is right.

Desert Storm’s success belongs to the team that so

ably leads our Armed Forces: our Secretary of Defense

and our Chairman of the Joint Chiefs, Dick Cheney and

Colin Powell. And while you’re standing—laughter!—this

military victory also belongs to the one the British call the

“Man of the Match”—the tower of calm at the eye of

Desert Storm—General Norman Schwarzkopf.

And recognizing this was a coalition effort, let us not

forget Saudi General Khalid, Britain’s General de la Bil-

liere, or General Roquejoffre of France—and all the oth-

ers whose leadership played such a vital role. And most

importantly, most importantly of all, all those who served

in the field.

I thank the Members of this Congress—support here

for our troops in battle was overwhelming. And above all,

I thank those whose unfailing love and support sustained

our courageous men and women—I thank the American

people.

Tonight, I come to this House to speak about the

world—the world after war. The recent challenge could

not have been clearer. Saddam Hussein was the villain;

Kuwait, the victim. To the aid of this small country came

nations from North America and Europe, from Asia and

South America, from Africa and the Arab world—all

united against aggression. Our uncommon coalition must

now work in common purpose: to forge a future that

should never again be held hostage to the darker side of

human nature.

Tonight in Iraq, Saddam walks amidst ruin. His war

machine is crushed. His ability to threaten mass destruc-

tion is itself destroyed. His people have been lied to—

denied the truth. And when his defeated legions come

home, all Iraqis will see and feel the havoc he has wrought.

And this I promise you: For all that Saddam has done to his

own people, to the Kuwaitis, and to the entire world, Sad-

dam and those around him are accountable.

All of us grieve for the victims of war, for the people of

Kuwait and the suffering that scars the soul of that proud

nation. We grieve for all our fallen soldiers and their fami-

lies, for all the innocents caught up in this conflict. And,

yes, we grieve for the people of Iraq—a people who have

never been our enemy. My hope is that one day we will

once again welcome them as friends into the community of

nations. Our commitment to peace in the Middle East

does not end with the liberation of Kuwait. So tonight, let

me outline four key challenges to be met.

First, we must work together to create shared security

arrangements in the region. Our friends and allies in the

Middle East recognize that they will bear the bulk of the

responsibility for regional security. But we want them to

know that just as we stood with them to repel aggression,

so now America stands ready to work with them to secure

the peace. This does not mean stationing U.S. ground

forces in the Arabian Peninsula, but it does mean Ameri-

can participation in joint exercises involving both air and

ground forces. It means maintaining a capable U.S. naval

presence in the region—just as we have for over 40 years.

Let it be clear: Our vital national interests depend on a sta-

ble and secure Gulf.

Second, we must act to control the proliferation of

weapons of mass destruction and the missiles used to

deliver them. It would be tragic if the nations of the Mid-

dle East and Persian Gulf were now, in the wake of war, to

embark on a new arms race. Iraq requires special vigi-

lance. Until Iraq convinces the world of its peaceful inten-

tions—that its leaders will not use new revenues to rearm

and rebuild its menacing war machine—Iraq must not

have access to the instruments of war.

And third, we must work to create new opportunities

for peace and stability in the Middle East. On the night I

announced Operation Desert Storm, I expressed my hope

that out of the horrors of war might come new momentum

for peace. “We’ve learned in the modern age geography

cannot guarantee security and security does not come

from military power alone.

All of us know the depth of bitterness that has made

the dispute between Israel and its neighbors so painful and

intractable. Yet, in the conflict just concluded, Israel and

many of the Arab States have for the first time found

themselves confronting the same aggressor. By now, it

should be plain to all parties that peacemaking in the Mid-

dle East requires compromise. At the same time, peace

brings real benefits to everyone. We must do all that we

can to close the gap between Israel and the Arab states—

and between Israelis and Palestinians. The tactics of terror

lead absolutely nowhere. There can be no substitute for

diplomacy.

A comprehensive peace must be grounded in United

Nations Security Council Resolutions 242 and 338 and the

principle of territory for peace. This principle must be

elaborated to provide for Israel’s security and recognition

and at the same time for legitimate Palestinian political

rights. Anything else would fail the twin test of fairness and

security. The time has come to put an end to Arab- Israeli

conflict.

The war with Iraq is over. The quest for solutions to

the problems in Lebanon, in the Arab-Israeli dispute, and

in the Gulf must go forward with new vigor and determi-

nation. And I guarantee you: No one will work harder for

a stable peace in the region than we will.

Fourth, we must foster economic development for the

sake of peace and progress. The Persian Gulf and Middle

East form a region rich in natural resources—with a

wealth of untapped human potential. Resources once

squandered on military might must be redirected to more

peaceful ends. We are already addressing the immediate

economic consequences of Iraq’s aggression. Now, the

challenge is to reach higher—to foster economic freedom

and prosperity for all the people of the region.

By meeting these four challenges we can build a

framework for peace. I’ve asked Secretary of State Baker

to go to the Middle East to begin the process. He will go

to listen, to probe, to offer suggestions—to advance the

search for peace and stability. I’ve also asked him to raise

the plight of the hostages held in Lebanon. We have not

forgotten them, and we will not forget them.

To all the challenges that confront this region of the

world there is no single solution—no solely American

answer. But we can make a difference. America will work

tirelessly as a catalyst for positive change.

But we cannot lead a new world abroad if, at home, it’s

politics as usual on American defense and diplomacy. It’s

time to turn away from the temptation to protect

unneeded weapons systems and obsolete bases. It’s time to

put an end to micromanagement of foreign and security

assistance programs—micromanagement that humiliates

our friends and allies and hamstrings our diplomacy. It’s

time to rise above the parochial and the pork barrel, to do

what is necessary, what’s right, and what will enable this

nation to play the leadership role required of us.

The consequences of the conflict in the Gulf reach far

beyond the confines of the Middle East. Twice before in

this century, an entire world was convulsed by war. Twice

this century, out of the horrors of war hope emerged for

enduring peace. Twice before, those hopes proved to be a

distant dream, beyond the grasp of man. Until now, the

world we’ve known has been a world divided—a world of

barbed wire and concrete block, conflict, and cold war.

Now, we can see a new world coming into view. A

world in which there is the very real prospect of a new

world order. In the words of Winston Churchill, a world

order in which “the principles of justice and fair play pro-

tect the weak against the strong. . .” A world where the

United Nations—freed from cold war stalemate—is

poised to fulfill the historic vision of its founders. A world

in which freedom and respect for human rights find a

home among all nations. The Gulf war put this new world

to its first test. And my fellow Americans, we passed that

test.

For the sake of our principles—for the sake of the

Kuwaiti people—we stood our ground. Because the world

would not look the other way, Ambassador al-Sabah,

tonight, Kuwait is free. And we’re very happy about that.

Tonight, as our troops begin to come home, let us rec-

ognize that the hard work of freedom still calls us forward.

We’ve learned the hard lessons of history. The victory over

Iraq was not waged as “a war to end all wars.” Even the

new world order cannot guarantee an era of perpetual

peace. But enduring peace must be our mission. Our suc-

cess in the Gulf will shape not only the world order we

seek, but our mission here at home.

In the war just ended, there were clear-cut objec-

tives—timetables—and, above all, an overriding impera-

tive to achieve results. We must bring that same sense of

self-discipline, that same sense of urgency, to the way we

meet challenges here at home. In my State of the Union

Address and in my budget, I defined a comprehensive

agenda to prepare for the next American century.

Our first priority is to get this economy rolling again.

The fear and uncertainty caused by the Gulf crisis were

1714 ERA 10: Contemporary United States

understandable. But now that the war is over, oil prices are

down, interest rates are down, and confidence is rightly

coming back. Americans can move forward to lend, spend,

and invest in this, the strongest economy on Earth.

We must also enact the legislation that is key to

building a better America. For example, in 1990, we

enacted an historic Clean Air Act. And now we’ve pro-

posed a national energy strategy. We passed a child care

bill that put power in the hands of parents. And today,

we’re ready to do the same thing with our schools and

expand choice in education. We passed a crime bill that

made a useful start in fighting crime and drugs. This year,

we’re sending to Congress our comprehensive crime

package to finish the job. We passed the landmark Amer-

icans with Disabilities Act. And now we’ve sent forward

our civil rights bill. We also passed the aviation bill. This

year, we’ve sent up our new highway bill. And these are

just a few of our pending proposals for reform and

renewal.

So, tonight I call on Congress to move forward aggres-

sively on our domestic front. Let’s begin with two initia-

tives we should be able to agree or quickly—transportation

and crime. And then, let’s build on success with those and

enact the rest of our agenda. If our forces could win the

ground war in 100 hours, then surely the Congress can

pass this legislation in 100 days. Let that be a promise we

make tonight to the American people.

When I spoke in this House about the state of our

Union, I asked all of you: If we can selflessly confront evil

for the sake of good in a land so far away, then surely we

can make this land all that it should be. In the time since

then, the brave men and women of Desert Storm accom-

plishment more than even they may realize. They set out

to confront an enemy abroad, and in the process, they

transformed a nation at home. Think of the way they went

about their mission—with confidence and quiet pride.

Think about their sense of duty, about all they taught us

about our values, about ourselves.

We hear so often about our young people in turmoil—

how our children fall short, how our schools fail us, how

American products and American workers are second-

class. Well, don’t you believe it. The America we saw in

Desert Storm was first-class talent. And they did it using

America’s state- of-the-art technology. We saw the excel-

lence embodied in the Patriot missile and the patriots who

made it work. And we saw soldiers who know about honor

and bravery and duty and country and the world- shaking

power of these simple words. There is something noble

and majestic about the pride, about the patriotism that we

feel tonight.

So, to everyone here—and everyone watching at

home—think about the men and women of Desert

Storm. Let us honor them with our gratitude. Let us com-

fort the families of the fallen and remember each pre-

cious life lost.

Let us learn from them as well. Let us honor those

who have served us by serving others. Let us honor them

as individuals—men and women of every race, all creeds

and colors—by setting the face of this nation against dis-

crimination, bigotry, and hate. Eliminate them.

I’m sure that many of you saw on the television the

unforgettable scene of four terrified Iraqi soldiers surren-

dering. They emerged from their bunker—broker, tears

streaming from their eyes, fearing the worst. And then

there was an American soldier. Remember what he said?

He said: It’s okay. You’re all right now. You’re all right

now.” That scene says a lot about America, a lot about who

we are. Americans are a caring people. We are a good peo-

ple, a generous people. Let us always be caring and good

and generous in all we do.

Soon, very soon, our troops will begin the march

we’ve all been waiting for—their march home. And I

have directed Secretary Cheney to begin the immediate

return of American combat units from the Gulf. Less

than 2 hours from now, the first planeload of American

soldiers will lift off from Saudi Arabia, headed for the

U.S.A. It will carry men and women of the 24th Mecha-

nized Infantry Division bound for Fort Stewart, Georgia.

This is just the beginning of a steady flow of American

troops coming home. Let their return remind us that all

those who have gone before are linked with us in the long

line of freedom’s march.

Americans have always tried to serve, to sacrifice

nobly for what we believe to be right. Tonight, I ask every

community in this country to make this coming Fourth of

July a day of special celebration for our returning troops.

They may have missed Thanksgiving and Christmas, but I

can tell you this: For them and for their families, we can

make this a holiday they’ll never forget.

In a very real sense, this victory belongs to them—to

the privates and the pilots, to the sergeants and the supply

officers, to the men and women in the machines, and the

men and women who made them work. It belongs to the

regulars, to the reserves, to the National Guard. This vic-

tory belongs to the finest fighting force this nation has ever

known in its history.

We went halfway around the world to do what is moral

and just and right. We fought hard and, with others, we

won the war. We lifted the yoke of aggression and tyranny

from a small country that many Americans had never even

heard of, and we shall ask nothing in return.

We’re coming home now—proud, confident, heads

high. There is much that we must do, at home and abroad.

And we will do it. We are Americans.

Foreign Policy Issues 1715

May God bless this great nation, the United States of

America. Thank you all very, very much.

Source:

Public Papers of the presidents of the United States: George H. W.

Bush, 1989. Washington, D.C.: Government Printing

Office, 1952–92.

Bill Clinton and George W. Bush,

The Mexico City Policy:

Repeal, 1993, and Restoration, 2001

In 1984, President Ronald Reagan initiated the Mexico City

Policy, named for the city in which he signed the memoran-

dum. The policy prevented the Agency for International

Development (AID) from offering any funding to nongovern-

mental organizations (NGOs) that provided abortions, abor-

tion counseling, or recommendations to abortion providers. As

a result, the Mexico City Policy is often known as the “Global

Gag Rule.”

In one of his first acts as president, Bill Clinton repealed the

Mexico City Policy. He wrote that the use of government funds

for abortion-related activities was already illegal, and that

the policy’s “excessively broad anti-abortion conditions . . .

have undermined efforts to promote safe and efficacious family

planning programs in foreign nations.”

George W. Bush reinstated the Mexico City Policy as his

first presidential act. In his memorandum, he wrote, “It is my

conviction that taxpayer funds should not be used to pay for

abortions or advocate or actively promote abortion, either

here or abroad.” The restoration was approved by Congress in

May of 2001. This act demonstrated how the Republican

majority Congress and President Bush rewarded the religious

right, which was responsible for both funds and turning out

Republican voters in the 2000 election. The withdrawal of

funds from reproductive clinics worldwide, even though the

money did not specifically pay for abortion or abortion-coun-

seling, was expected to hurt women and families in develop-

ing countries.

________________________

_______________________

January 22, 1993

MEMORANDUM FOR THE ACTING ADMINISTRA-

TOR OF THE AGENCY FOR INTERNATIONAL

DEVELOPMENT

SUBJECT: AID Family Planning Grants/Mexico City

Policy

The Foreign Assistance Act of 1961 prohibits non-

governmental organizations (“NGO’s”) that receive Fed-

eral funds from using those funds “to pay for the

performance of abortions as a method of family planning,

or to motivate or coerce any person to practice abor-

tions.” (22 U.S.C. 2151b(f)(1)). The August 1984 an-

nouncement by President Reagan of what has become

known as the “Mexico City Policy” directed the Agency

for International Development (“AID”) to expand this

limitation and withhold AID funds from NGO’s that

engage in a wide range of activities, including providing

advice, counseling, or information regarding abortion, or

lobbying a foreign government to legalize or make abor-

tion available. These conditions have been imposed even

where an NGO uses non-AID funds for abortion-related

activities.

These excessively broad anti-abortion conditions are

unwarranted. I am informed that the conditions are not

mandated by the Foreign Assistance Act or any other law.

Moreover, they have undermined efforts to promote safe

and efficacious family planning programs in foreign

nations. Accordingly, I hereby direct that AID remove the

conditions not explicitly mandated by the Foreign Assis-

tance Act or any other law from all current AID grants to

NGO’s and exclude them from future grants.

WILLIAM J. CLINTON

Source:

National Archives and Records Administration. Clinton Presi-

dential Materials Project. Available on-line. URL: http://

clinton6nara.gov/1993/01/1993-01-22-1id-family-planning-

grants-Mexico-city-policy.html. Accessed November 2003.

Memorandum January 22, 2001

MEMORANDUM FOR THE ADMINISTRATOR OF

THE UNITED STATES AGENCY FOR INTERNA-

TIONAL DEVELOPMENT

SUBJECT: Restoration of the Mexico City Policy

The Mexico City Policy announced by President Rea-

gan in 1984 required nongovernmental organizations to

agree as a condition of their receipt of Federal funds that

such organizations would neither perform nor actively pro-

mote abortion as a method of family planning in other

nations. This policy was in effect until it was rescinded on

January 22, 1993.

It is my conviction that taxpayer funds should not

be used to pay for abortions or advocate or actively

promote abortion, either here or abroad. It is therefore

my belief that the Mexico City Policy should be restored.

Accordingly, I hereby rescind the “Memorandum for the

Acting Administrator of the Agency for International

Development, Subject: AID Family Planning Grants/

Mexico City Policy,” dated January 22, 1993, and I direct

the Administrator of the United States Agency for Inter-

national Development to reinstate in full all of the

1716 ERA 10: Contemporary United States

requirements of the Mexico City Policy in effect on Jan-

uary 19, 1993.

George W. Bush

Source:

The White House Office of the Press Secretary. Available on-line.

URL: www.whitehouse.gov/news/releases/20010123-5html.

Accessed November 2003.

Economic and Technological Developments 1717

Economic and Technological Developments

Ronald Reagan,

Tax Reduction Address, 1981

Broadcast speech given by President Ronald Reagan on July

27, 1981, to generate support for his tax reduction plan (which

passed both houses of Congress two days later). Reagan urged

members of Congress to vote for his proposal rather than a

Democratic-sponsored alternative. His proposal rested on a

theory called supply side economics in which more money in

private hands would “trickle down” and generate income for

all segments of society. Comparing the two bills using charts

and graphs, Reagan claimed that the Democratic plan would

actually result in a tax increase for the average family over the

long term. (In a televised rebuttal, however, leading

Democrats took issue with Reagan’s interpretation.) He sought

to reassure voters that he would not cut Social Security bene-

fits. And he asked voters to contact their representatives to let

them “know your feelings” on the tax plan. Despite significant

cuts in federal programs, the tax reduction resulted in huge

federal deficits not overcome until the last years of the Clinton

administration.

________________________

_______________________

Good evening.

I’d intended to make some remarks about the prob-

lem of social security tonight, but the immediacy of con-

gressional action on the tax program, a key component of

our economic package, has to take priority. Let me just say,

however, I’ve been deeply disturbed by the way those of

you who are dependent on social security have been need-

lessly frightened by some of the inaccuracies which have

been given wide circulation. It’s true that the social secu-

rity system has financial problems. It’s also true that these

financial problems have been building for more than 20

years, and nothing has been done. I hope to address you on

this entire subject in the near future.

In the meantime, let me just say this: I stated during

the campaign and I repeat now, I will not stand by and see

those of you who are dependent on social security

deprived of the benefits you’ve worked so hard to earn. I

make that pledge to you as your President. You have no

reason to be frightened. You will continue to receive your

checks in the full amount due you. In any plan to restore

fiscal integrity of social security, I personally will see that

the plan will not be at the expense of you who are now

dependent on your monthly social security checks.

Now, let us turn to the business at hand. It’s been

nearly 6 months since I first reported to you on the state of

the nation’s economy. I’m afraid my message that night was

grim and disturbing. I remember telling you we were in

the worst economic mess since the Great Depression.

Prices were continuing to spiral upward, unemployment

was reaching intolerable levels, and all because govern-

ment was too big and spent too much of our money.

We’re still not out of the woods, but we’ve made a

start. And we’ve certainly surprised those longtime and

somewhat cynical observers of the Washington scene,

who looked, listened, and said, “It can never be done;

Washington will never change its spending habits.” Well,

something very exciting has been happening here in Wash-

ington, and you’re responsible.

Your voices have been heard—millions of you,

Democrats, Republicans, and Independents, from every

profession, trade and line of work, and from every part of

this land. You sent a message that you wanted a new begin-

ning. You wanted to change one little, two little word—two

letter word, I should say. It doesn’t sound like much, but it

sure can make a difference changing “by government,”

“control by government” to “control of government.”

In that earlier broadcast, you’ll recall I proposed a

program to drastically cut back government spending in

the 1982 budget, which begins October 1st, and to con-

tinue cutting in the ‘83 and ‘84 budgets. Along with this I

suggested an across-the-board tax cut, spread over those

same 3 years, and the elimination of unnecessary regula-

tions which were adding billions to the cost of things we

buy.

All the lobbying, the organized demonstrations, and

the cries of protest by those whose way of life depends on

maintaining government’s wasteful ways were no match for

your voices, which were heard loud and clear in these mar-

ble halls of government. And you made history with your

telegrams, your letters, your phone calls and, yes, personal

visits to talk to your elected representatives. You reaf-

firmed the mandate you delivered in the election last

November—a mandate that called for an end to govern-

ment policies that sent prices and mortgage rates skyrock-

eting while millions of Americans went jobless.

Because of what you did, Republicans and Democrats

in the Congress came together and passed the most sweep-

ing cutbacks in the history of the Federal budget. Right

now, Members of the House and Senate are meeting in a

conference committee to reconcile the differences

between the two budget-cutting bills passed by the House

and Senate. When they finish, all Americans will benefit

from savings of approximately $140 billion in reduced gov-

ernment costs over just the next 3 years. And that doesn’t

include the additional savings from the hundreds of bur-

densome regulations already canceled or facing cancella-

tion.

For 19 out of the last 20 years, the Federal Govern-

ment has spent more than it took in. There will be another

large deficit in this present year which ends September

30th, but with our program in place, it won’t be quite as

big as it might have been. And starting next year, the

deficits will get smaller until in just a few years the budget

can be balanced. And we hope we can begin whittling at

that almost $1 trillion debt that hangs over the future of

our children.

Now, so far, I’ve been talking about only one part of

our program for economic recovery—the budget-cutting

part. I don’t minimize its importance. Just the fact that

Democrats and Republicans could work together as they

have, proving the strength of our system, has created an

optimism in our land. The rate of inflation is no longer in

double-digit figures. The dollar has regained strength in

the international money markets, and businessmen and

investors are making decisions with regard to industrial

development, modernization and expansion—all of this

based on anticipation of our program being adopted and

put into operation.

A recent poll shows that where a year and a half ago

only 24 percent of our people believed things would get

better, today 46 percent believe they will. To justify their

faith, we must deliver the other part of our program. Our

economic package is a closely knit, carefully constructed

plan to restore America’s economic strength and put our

nation back on the road to prosperity.

Each part of this package is vital. It cannot be consid-

ered piecemeal. It was proposed as a package, and it has

been supported as such by the American people. Only if

the Congress passes all of its major components does it

have any real chance of success. This is absolutely essential

if we are to provide incentives and make capital available

for the increased productivity required to provide real,

permanent jobs for our people.

And let us not forget that the rest of the world is

watching America carefully to see how we’ll act at this crit-

ical moment.

I have recently returned from a summit meeting with

world leaders in Ottawa, Canada, and the message I

heard from them was quite clear. Our allies depend on a

strong and economically sound America. And they’re

watching events in this country, particularly those sur-

rounding our program for economic recovery, with close

attention and great hopes. In short, the best way to have

a strong foreign policy abroad is to have a strong econ-

omy at home.

The day after tomorrow, Wednesday, the House of

Representatives will begin debate on two tax bills. And

once again, they need to hear from you. I know that

doesn’t give you much time, but a great deal is at stake. A

few days ago I was visited here in the office by a Demo-

cratic Congressman from one of our southern States. He’d

been back in his district. And one day one of his con-

stituents asked him where he stood on our economic

recovery program—I outlined that program in an earlier

broadcast—particularly the tax cut. Well, the Congress-

man, who happens to be a strong leader in support of our

program, replied at some length with a discussion of the

technical points involved, but he also mentioned a few

reservations he had on certain points. The constituent, a

farmer, listened politely until he’d finished, and then he

said, “Don’t give me an essay. What I want to know is are

you for ‘im or agin ‘im?

Well, I appreciate the gentleman’s support and sug-

gest his question is a message your own representatives

should hear. Let me add, those representatives honestly

and sincerely want to know your feelings. They get plenty

of input from the special interest groups. They’d like to

hear from their home folks.

Now, let me explain what the situation is and what’s at

issue. With our budget cuts, we’ve presented a complete

program of reduction in tax rates. Again, our purpose was

to provide incentive for the individual, incentives for busi-

ness to encourage production and hiring of the unem-

ployed, and to free up money for investment. Our bill calls

for a 5-percent reduction in the income tax rates by Octo-

ber 1st, a 10-percent reduction beginning July 1st, 1982,

1718 ERA 10: Contemporary United States

and another 10-percent cut a year later, a 25-percent total

reduction over 3 years.

But then to ensure the tax cut is permanent, we call

for indexing the tax rates in 1985, which means adjusting

them for inflation. As it is now, if you get a cost-of-living

raise that’s intended to keep you even with inflation, you

find that the increase in the number of dollars you get may

very likely move you into a higher tax bracket, and you

wind up poorer than you would. This is called bracket

creep.

Bracket creep is an insidious tax. Let me give an exam-

ple. If you earned $10,000 a year in 1972, by 1980 you had

to earn $19,700 just to stay even with inflation. But that’s

before taxes. Come April 15th, you’ll find your tax rates

have increased 30 percent. Now, if you’ve been wondering

why you don’t seem as well-off as you were a few years

back, it’s because government makes a profit on inflation.

It gets an automatic tax increase without having to vote on

it. We intend to stop that.

Time won’t allow me to explain every detail. But our

bill includes just about everything to help the economy.

We reduce the marriage penalty, that unfair tax that has a

working husband and wife pay more tax than if they were

single. We increase the exemption on the inheritance or

estate tax to $600,000, so that farmers and family-owned

businesses don’t have to sell the farm or store in the event

of death just to pay the taxes. Most important, we wipe out

the tax entirely for a surviving spouse. No longer, for exam-

ple, will a widow have to sell the family source of income

to pay a tax on her husband’s death.

There are deductions to encourage investment and

savings. Business gets realistic depreciation on equipment

and machinery. And there are tax breaks for small and

independent businesses which create 80 percent of all our

new jobs.

This bill also provides major credits to the research

and development industry. These credits will help spark

the high technology breakthroughs that are so critical to

America’s economic leadership in the world. There are

also added incentives for small businesses, including a pro-

vision that will lift much of the burden of costly paperwork

that government has imposed on small business.

In addition, there’s short-term but substantial assis-

tance for the hard pressed thrift industry, as well as reduc-

tions in oil taxes that will benefit new or independent oil

producers and move our nation a step closer to energy self-

sufficiency. Our bill is, in short, the first real tax cut for

everyone in almost 20 years.

Now, when I first proposed this—incidentally, it has

now become a bipartisan measure co-authored by Repub-

lican Barber Conable and Democrat Kent Hance—the

Democratic leadership said a tax cut was out of the ques-

tion. It would be wildly inflationary. And that was before

my inauguration. And then your voices began to be heard

and suddenly, in February, the leadership discovered that,

well, a 1-year tax cut was feasible. Well, we kept on push-

ing our 3-year tax cut and by June, the opposition found

that a 2-year tax cut might work. Now it’s July, and they

find they could even go for a third year cut provided there

was a trigger arrangement that would only allow it to go

into effect if certain economic goals had been met by 1983.

But by holding the people’s tax reduction hostage to

future economic events, they will eliminate the people’s

ability to plan ahead. Shopkeepers, farmers, and individu-

als will be denied the certainty they must have to begin

saving or investing more of their money. And encouraging

more savings and investment is precisely what we need

now to rebuild our economy.

There’s also a little sleight of hand in that trigger

mechanism. You see, their bill, the committee bill, ensures

that the 1983 deficit will be $6 1/2 billion greater than their

own trigger requires. As it stands now, the design of their

own bill will not meet the trigger they’ve put in; therefore,

the third year tax cut will automatically never take place.

If I could paraphrase a well-known statement by Will

Rogers that he had never met a man he didn’t like, I’m

afraid we have some people around here who never met a

tax they didn’t hike. Their tax proposal, similar in a num-

ber of ways to ours but differing in some very vital parts,

was passed out of the House Ways and Means Committee,

and from now on I’ll refer to it as the committee bill and

ours as the bipartisan bill. They’ll be the bills taken up

Wednesday.

The majority leadership claims theirs gives a greater

break to the worker than ours, and it does—that is, if

you’re only planning to live 2 more years. The plain truth

is, our choice is not between two plans to reduce taxes; it’s

between a tax cut or a tax increase. There is now built into

our present system, including payroll social security taxes

and the bracket creep I’ve mentioned, a 22-percent tax

increase over the next 3 years. The committee bill offers a

15-percent cut over 2 years; our bipartisan bill gives a 25-

percent reduction over 3 years.

Now, as you can see by this chart, there is the 22-per-

cent tax increase. Their cut is below that line. But ours

wipes out that increase and with a little to spare. And there

it is, as you can see. The red column—that is the 15-per-

cent tax cut, and it still leaves you with an increase. The

green column is our bipartisan bill which wipes out the tax

increase and gives you an ongoing cut.

Incidentally, their claim that cutting taxes for individ-

uals for as much as 3 years ahead is risky, rings a little hol-

low when you realize that their bill calls for business tax

cuts each year for 7 years ahead. It rings even more hollow

when you consider the fact the majority leadership rou-

tinely endorses Federal spending bills that project years

Economic and Technological Developments 1719

into the future, but objects to a tax bill that will return your

money over a 3-year period.

Now, here is another chart which illustrates what I

said about their giving a better break if you only intend to

live for 2 more years. Their tax cut, so called, is the dotted

line. Ours is the solid line. As you can see, in an earning

bracket of $20,000, their tax cut is slightly more generous

than ours for the first 2 years. Then, as you can see, their

tax bill, the dotted line, starts going up and up and up. On

the other hand, in our bipartisan tax bill, the solid line, our

tax cut keeps on going down, and then stays down perma-

nently. This is true of all earning brackets—not just the

$20,000 level that I’ve used as an example—from the low-

est to the highest. This red space between the two lines is

the tax money that will remain in your pockets if our bill

passes; and it’s the amount that will leave your pockets if

their tax bill is passed.

Now, I take no pleasure in saying this, but those who

will seek to defeat our Conable-Hance bipartisan bill as

debate begins Wednesday are the ones who have given us

five “tax cuts” in the last 10 years. But, our taxes went up

$400 billion in those same 10 years. The lines on these

charts say a lot about who’s really fighting for whom. On

the one hand, you see a genuine and lasting commitment

to the future of working Americans; on the other, just

another empty promise.

Those of us in the bipartisan coalition want to give this

economy and the future of this Nation back to the people,

because putting people first has always been America’s

secret weapon. The House majority leadership seems less

concerned about protecting your family budget than with

spending more on the Federal budget.

Our bipartisan tax bill targets three-quarters of its tax

relief to middle-income wage earners who presently pay

almost three-quarters of the total income tax. It also then

indexes the tax brackets to ensure that you can keep that tax

reduction in the years ahead. There also is, as I said, estate

tax relief that will keep family farms and family-owned

businesses in the family, and there are provisions for per-

sonal retirement plans and individual savings accounts.

Because our bipartisan bill is so clearly drawn and

broadly based, it provides the kind of predictability and

certainty that the financial segments of our society need to

make investment decisions that stimulate productivity and

make our economy grow. Even more important, if the tax

cut goes to you, the American people, in the third year,

that money returned to you won’t be available to the

Congress to spend, and that, in my view, is what this whole

controversy comes down to. Are you entitled to the fruits

of your own labor or does government have some pre-

sumptive right to spend and spend and spend?

I’m also convinced our business tax cut is superior to

theirs because it’s more equitable, and it will do a much

better job promoting the surge in investment we so badly

need to rebuild our industrial base.

There’s something else I want to tell you. Our biparti-

san coalition worked out a tax bill we felt would provide

incentive and stimulate productivity, thus reducing infla-

tion and providing jobs for the unemployed. That was our

only goal. Our opponents in the beginning didn’t want a tax

bill at all. So what is the purpose behind their change of

heart? They’ve put a tax program together for one reason

only: to provide themselves with a political victory. Never

mind that it won’t solve the economic problems con-

fronting our country. Never mind that it won’t get the

wheels of industry turning again or eliminate the inflation

which is eating us alive.

This is not the time for political fun and games. This is

the time for a new beginning. I ask you now to put aside

any feelings of frustration or helplessness about our politi-

cal institutions and join me in this dramatic but responsi-

ble plan to reduce the enormous burden of Federal

taxation on you and your family.

During recent months many of you have asked what

can you do to help make America strong again. I urge you

again to contact your Senators and Congressmen. Tell

them of your support for this bipartisan proposal. Tell

them you believe this is an unequaled opportunity to help

return America to prosperity and make government again

the servant of the people.

In a few days the Congress will stand at the fork of

two roads. One road is all too familiar to us. It leads ulti-

mately to higher taxes. It merely brings us full circle back

to the source of our economic problems, where the gov-

ernment decides that it knows better than you what

should be done with your earnings and, in fact, how you

should conduct your life. The other road promises to

renew the American spirit. It’s a road of hope and oppor-

tunity. It places the direction of your life back in your

hands where it belongs.

I’ve not taken your time this evening merely to ask you

to trust me. Instead, I ask you to trust yourselves. That’s

what America is all about. Our struggle for nationhood, our

unrelenting fight for freedom, our very existence—these

have all rested on the assurance that you must be free to

shape your life as you are best able to, that no one can stop

you from reaching higher or take from you the creativity

that has made America the envy of mankind.

One road is timid and fearful; the other bold and

hopeful.

In these 6 months, we’ve done so much and have

come so far. It’s been the power of millions of people like

you who have determined that we will make America great

again. You have made the difference up to now. You will

make the difference again. Let us not stop now.

Thank you. God bless you, and good night.

1720 ERA 10: Contemporary United States

Source:

Public Papers of the Presidents of the United States: Ronald Rea-

gan, 1981. Washington, D.C.: Government Printing Office,

1982–91. pp. 664–668.

Gramm-Rudman-Hollings Act, 1985

Also known as the Balanced Budget and Emergency Deficit

Control Act, this legislation, sponsored by Senators Phil

Gramm (R.-Tex.), Warren Rudman (R.-N.H.), and Ernest

Hollings (D.-S.C.) was passed by both houses of Congress on

December 11, 1985. It required the president and Congress to

work together to eliminate the budget deficit by 1991. The

bill stipulated that the president’s administration and

Congress agree each year on budget cuts that would meet

successively lower targets, which were also specified by the

bill. If the cuts were made accordingly, the deficit was to

reach zero by 1991. The law also stipulated that, if agreement

was not reached, automatic reductions would be imple-

mented. The legislation also set the national debt ceiling at

more than $2 trillion.

The legislation worked. Not only was the Clinton admin-

istration able to balance the budget, but by the end of his years

in office, the government was running a surplus. However, this

condition was attributable to the unprecedented economic

growth (partly attributable to the balanced federal budget) that

occurred during the Clinton years. By the time Bush took

office, however, those conditions were already changing, due

in part to overproduction in the telecommunications and tech-

nology sectors. A combination of tax cuts and additional

expenditures necessitated by security concerns at home and

war abroad once again put the government in the red.

Please note that the “Federal Old-Age and Survivors

Insurance Trust Fund and the Federal Disability Insurance Trust

Fund” are what is commonly known as “Social Security.”

________________________

_______________________

(excerpt)

Title II—Deficit Reduction Procedures

Sec. 200. Short Title. . .

(a) Short Title.—This title may be cited as the Bal-

anced Budget and Emergency Deficit Control Act of 1985.

* * *

Part A—Congressional Budget Process

Subpart I-Sec. 201. Congressional Budget.

a) Definitions.—

* * *

(6) The term ‘deficit’ means, with respect to any fiscal

year, the amount by which total budget outlays for such fis-

cal year exceed total revenues for such fiscal year. In cal-

culating the deficit for purposes of comparison with the

maximum deficit amount under the Balanced Budget and

Emergency Deficit Control Act of 1985 and in calculating

the excess deficit . . . for any fiscal year, the receipts of the

for such fiscal year and the taxes payable under sections

140(a), 3101(a), and 3111(a) of the Internal Revenue Code

of 1954 during such fiscal year shall be included in total

revenues for such fiscal year, and the disbursements of

each such Trust Fund for such fiscal year shall be included

in total budget outlays for such fiscal year. . . . Amounts

paid by the Federal Financing Bank for the purchase of

loans made or guaranteed by a department, agency, or

instrumentality of the Government of the United States

shall be treated as outlays of such department, agency, or

instrumentality.

* * *

Sec. 301. (a) Content of Concurrent Resolution on the

Budget.—On or before April 15 of each year, the Congress

shall complete action on a concurrent resolution on the

budget for the fiscal year beginning on October 1 of such

year. The concurrent resolution shall set forth appropriate

levels for the fiscal year beginning on October 1 of such

year, and planning levels for each of the two ensuing fiscal

years, for the following—

(1) totals for new budget authority, budget outlays,

direct loan obligations, and primary loan guarantee com-

mitments;

(2) total Federal revenues and the amount, if any, by

which the aggregate level of Federal revenues should be

increased or decreased by bills and resolutions to be

reported by the appropriate committees;

(3) the surplus or deficit in the budget;

(4) new budget authority, budget outlays, direct

loan obligations, and primary loan guarantee commit-

ments for each major functional category, based on allo-

cations of the total levels set forth pursuant to paragraph

(1); and

(5) the public debt.

(b) Additional Matters in Concurrent Resolution

* * *

(3) require a procedure under which all or certain bills

or resolutions providing new budget authority or new enti-

tlement authority for such fiscal year shall not be enrolled

until the Congress has completed action on any reconcili-

ation bill or reconciliation resolution or both required by

such concurrent resolution to be reported in accordance

with section 310(b); and

(4) set forth such other matters, and require such

other procedures, relating to the budget, as may be appro-

priate to carry out the purposes of this Act.

Economic and Technological Developments 1721