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Public Papers - 1989 - February

Remarks to the South Carolina State Legislature in Columbia

1989-02-15

Thank you, members of the legislature, for that really friendly South Carolina welcome. And thank you, particularly, Governor Campbell, my friend; Lieutenant Governor; Mr. Speaker; Members of the Congress that are with us here today, Senator Thurmond, Floyd Spence -- and maybe I'm missing some. If so, I apologize. And ladies and gentlemen, thank all of you. It's a great honor to be addressing this joint session of the general assembly, and I really mean that. This is a chamber rich in history and tradition, and I'm grateful for the privilege of joining you in the hall today.

There's something wonderful about how the United States comes together. And driving in on that great big, long car and having the school kids and others out there really demonstrating their respect for the institution of the Presidency is something that was special to me. And I think of it as something that South Carolinians understand very, very well, indeed. I was just saying this to the Lieutenant Governor.

One very concrete way that I plan to express my appreciation is by not going on too long. [Laughter] If I exceed my limit and we start to press up against lunchtime, I expect that the spirit of the late Speaker Blatt will rise up, and in this chamber will echo with the words: ``It's cornbread and buttermilk time.''

Now, I speak to you today with great respect and in accordance with the plan of our Founding Fathers designed two centuries ago: as a President of the United States addressing the freely elected government of a sovereign State. And I speak to you in the spirit of bipartisanship. I've got to; you've got us outnumbered. [Laughter] And I realize that some of you people favor the Tigers and others favor the Gamecocks and, of course, some favor one or another set of Bulldogs; but as President, I must remain neutral. I stand with the people. [Laughter] And this morning, in that same spirit of neutrality, Lee Atwater [chairman of the Republican National Committee], as far as I'm concerned, will be thought of simply as one native son of South Carolina who happens to be a rhythm and blues guitarist. God save the Republic! But I don't have to be neutral now in recognizing and thanking for appearing and congratulating the Division I - AA national football champions, the Furman Paladines. I just met them downstairs; and we are all, nationwide, very proud of that team and what it's accomplished.

A President can't stand here without noting that the great State of South Carolina has one of the oldest histories in our Republic, spanning nearly five centuries. But with all of South Carolina's great sense of tradition, this has also in recent years been the site of dynamic economic growth that has so greatly improved the lives of the people of this State. And I believe that South Carolina is proof that an abiding respect for traditional American values is not a hindrance to success in a modern economy but, in fact, it is essential to it. And I want to keep the economy expanding so that it reaches every person in South Carolina and in the Nation.

And there are a number of very sound provisions South Carolina uses in this whole budget process which I think our nation as a whole would benefit from now. I think it is long overdue for the Federal Government to catch up with South Carolina by giving the Chief Executive a line-item veto and by adding a balanced budget amendment to the Constitution of the United States. These are essential elements, disciplining the executive branch as well as the legislative branch for controlling government spending. You have them; you use them; they work. And they help protect the pocketbooks of the working people, men and women, of South Carolina. I believe that the rest of the American people deserve the same at the Federal level, and they deserve a budget process that they can point to with pride. And I will work for the budget reforms that we need.

Your Governor, Carroll Campbell, has been an innovative leader who has set an example that is being acknowledged around the country. He and you, working together, have made South Carolina a model of what can be accomplished with sound policies and wise leadership. I particularly want to recognize and applaud your Governor's plan for promoting even greater economic growth by modernizing your tax code and by cutting the State capital gains tax.

Our experience at the national level is clear: Reducing the capital gains rate has resulted in more revenue to the Federal Government, not less. And it spurs investment; and investment means more jobs. And jobs mean more opportunity. And opportunity is the foundation of American progress. And a lower capital gains rate helps our international competitiveness -- all of our biggest trading partners, including Japan and West Germany, tax capital gains modestly if at all. Even as you're taking up this issue in South Carolina, my proposal at the Federal level is to cut the capital gains rate down to 15 percent for investments held for 3 years or more.

Now, as you know, last week I proposed a budget plan for the Federal Government. You may have heard about it. It's getting some attention. And I'm pleased to say no one has said that it's DOA. If anyone does, I'll interpret that as: ``Defining Opportunity for Americans.'' [Laughter]

But when it comes to the Washington budget process, so much of the rhetoric is, as you know, a bit extravagant. Once in the heat of budget politics, a former member of this chamber, Goat Leamond, stepped back from the fray to utter the now-immortal words: ``When in doubt, run in circles, scream and shout.'' Washington all over again. [Laughter]

But in Washington, with all the shouting that sometimes occurs, the words don't mean the same things that most people think that they mean. When they talk about budget cuts in Washington, that usually doesn't mean that spending is going down. And this is the key point. It seems to be the obvious meaning, but it's not. It usually means that spending is going up, but at a slower pace. Senator Rudman of New Hampshire said this week: ``Washington is the only town where a man making ,000 can go in and ask his boss for a raise of ,000, and then when the boss gives him instead a ,000 raise, the story comes out: `Man's Salary Cut by ,000.''' [Laughter]

On the revenue side, I've taken a pledge to the American people, and I'm going to keep it: No new taxes! You see, I believe that is what the people of this State and the people of America voted for as a whole. And the bottom line in the Federal budget is that it's not my money, it's not the Congress' money, it's the American peoples' money.

And one group in Washington, Citizens for a Sound Economy, commissioned the Roper organization to conduct a poll on taxes, spending, and the budget deficit. And three out of four Americans surveyed said that the way they want us to reduce the deficit is by holding down spending, controlling the growth of spending. Only 5 percent in this national survey wanted to do it by raising taxes.

My budget is based on a flexible freeze with no tax increases. This budget recognizes that there are three ways government must serve the people: first, by not taking any more of their hard-earned money than is absolutely necessary; secondly, by creating the environment that permits economic growth, new jobs, and greater opportunity; and finally, by doing the very best to help people with the money that is spent by government, caring for those in need, protecting what we hold in common, and serving the people with efficiency and, yes, compassion.

Even in times when reducing the deficit means tough choices, we must still set priorities. And my budget is a realistic plan that does more for education, more for the environment, and more for the space program. And it makes a larger investment in scientific research to help keep America competitive into the next century. It spends more on the Head Start program to help make America strong into the next generation. And there is another billion in outlays to fight drugs, because we cannot let this menace rob our children of their future. And we propose a new child care initiative, targeted at low-income families and designed to give real choice to families. The family unit is vital to the economic fabric of our society. And government must not discourage parental choice and family involvement. And in this budget, we also restore and double the tax deduction for adopting special-needs children. And we commit a billion dollars to deal with the problems of the homeless. And we don't touch Social Security -- that's off-limits.

And we keep our defenses strong. Defending America is one task which is an absolute responsibility for the Federal Government. And this budget enables our national defense to keep up with inflation. It's gone down, net terms, for 4 out of the last 4 years. When our young men and women make a commitment to join our Armed Services, they have the right to know that we will give them the tools to defend themselves and to defend America.

This budget helps assure a sound economy not by raising taxes but by cutting the Federal deficit by more than billion. That will not only meet the Gramm-Rudman-Hollings targets but it does even better than that. This budget will bring the deficit as a percentage of gross national product to its lowest level since the 1970's.

Now, already some people have asked me how is it possible to do all this without raising taxes. The answer is straightforward, and it needs to be emphasized again and again: Because of economic growth -- and you've seen this here in South Carolina -- because of economic growth, tax revenues are going up with no new taxes. Our projections show that without raising taxes, the Federal Government will get an additional billion to spend. The Congressional Budget Office, using their own set of economic assumptions, predicts -- not my estimate, but theirs -- that Federal tax revenues will increase next year by even more, by billion. I think our number is closer, but whether you use the Congress' number or the OMB number, that's enough money to reduce the deficit down to the levels required by Gramm-Rudman-Hollings and to spend more money on priority programs.

But to do this does require that choices be made, which is what this budget does. And I'm prepared to work with the Congress to make those hard choices. We weren't sent to Washington -- any of us up there -- to sit on our hands, either to pass the cost of indecision on to working Americans by raising their taxes or to fail to reduce the deficit, which will cause the cuts to be done automatically under the law. And that's why we must make choices that keep the economy growing, preserve our national defense, and allow government adequately and compassionately to perform the services which it should do. And if we do, we can get the job done -- but not with business as usual.

One of the great United States Senators, John C. Calhoun, once said: ``The very essence of a free government consists in considering offices as public trusts, bestowed for the good of the country, and not for the benefit of an individual or a party.'' And it's in that spirit that I will seek to work with the United States Congress, not as members of competing political parties but as cooperating public servants.

And the members of this legislature, all of you, have a vital role to play. You're closer to the people -- you really are -- than those of us in Washington. You not only serve your constituents, you're their neighbors. And you speak with the authority of people who know that government firsthand. And as we form the Federal budget and reduce this deficit, I want your voices to be heard. We need your leadership. And working together, we can make a great difference for all America.

You know, I've visited South Carolina enough times to learn that the State flower is the yellow jasmine. And I've been told that it was selected not just for its fragrance but for its resilience. And the budget debate is important, but even more important is the knowledge that America is strong and she is great and, yes, she is resilient. And we're thriving as a nation, thriving in the world -- we're the envy of the world. And we're providing for our people -- got to do better. As Americans, we don't seek a world without challenges, but rather a chance to overcome the challenges that are before us and to leave this nation that we love a little better for our having passed this way. I'm glad that you and I are passing this way together.

Thank you, members of this assembly, and God bless each and every one of you. And God bless the United States of America. Thank you.

Note: The President spoke at 11:25 a.m. in the house chamber of the State capitol. He was introduced by Gov. Carroll A. Campbell. In his opening remarks, the President referred to Lt. Gov. Nick Theodore, Speaker of the House of Representatives Robert J. Sheenen, and Representative Floyd Spence. Prior to the remarks, he met with the Furman University football team and was given a team jacket and football by coach Jimmy Satterfield. Following his remarks, the President attended a luncheon at the Governor's Mansion and then returned to Washington, DC.

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