The measures I am recommending to the Congress concerning both our foreign and our domestic policies represent a carefully considered program to meet our national needs.  It is a program which necessarily requires large expenditures of funds.  More than 70 percent of the Government’s expenditures are required to meet the costs of past wars and to work for world peace.  This is the dominant factor in our fiscal policy.  At the same time, the Government must make substantial expenditures which are necessary to the growth and expansion of the domestic economy.

At present, largely because of the ill-considered tax reduction of the Both Congress, the Government is not receiving enough revenue to meet its necessary expenditures.

To meet this situation, I am proposing that Federal expenditures be held to the lowest levels consistent with our international requirements and the essential needs of economic growth, and the well-being of our people.  I think I had better read that over; you interrupted me in the middle.

To meet this situation, I am proposing that Federal expenditures be held to the lowest levels consistent with our international requirements and the essential needs of economic growth, and the well-being of our people.  Don’t forget that last phrase.  At the same time, we must guard against the folly of attempting budget slashes which would impair our prospects for peace or cripple the programs essential to our national strength.

The budget recommendations I shall shortly transmit to the Congress show that we can expect a substantial improvement in our fiscal position over the next few years, as the cost of some of our extraordinary postwar programs declines, and as the Government revenue rises as a result of growth in employment and national income.  To further improve our fiscal outlook, we should make some changes in our tax system which will reduce present inequities, stimulate business activity, and yield a moderate amount of additional revenue.  I expect to transmit specific recommendations to the Congress on this subject at a very early date.

The fiscal policy I am recommending is the quickest and safest way of achieving a balanced budget.

As we move forward into the second half of the 20th century, we must always bear in mind the central purpose of our national life.  We do not seek material prosperity for ourselves because we love luxury; we do not aid other nations because we wish to increase our power.  We have not devised programs for the security and well-being of our people because we are afraid or unwilling to take risks.  This is not the meaning of our past history or our present course.

We work for a better life for all, so that all men may put to good use the great gifts with which they have been endowed by their Creator.  We seek to establish those material conditions of life in which, without exception, men may live in dignity, perform useful work, serve their communities, and worship God as they see fit.