No doubt a massive increase in Federal spending could also create jobs and growth, but in today’s setting, private consumers, employers, and investors should be given a full opportunity first.

No doubt a temporary tax cut could provide a spur to our economy—­but a long-run problem compels a long-run solution.

No doubt a reduction in either individual or corporation taxes alone would be of great help—­but corporations need customers and job seekers need jobs.

No doubt tax reduction without reform would sound simpler and more attractive to many—­but our growth is also hampered by a host of tax inequities and special preferences which have distorted the flow of investment.

And finally, there are no doubt some who would prefer to put off a tax cut in the hope that ultimately an end to the cold war would make possible an equivalent cut in expenditures—­but that end is not in view and to wait for it would be costly and self-defeating.

In submitting a tax program which will, of course, temporarily increase the deficit but can ultimately end it—­and in recognition of the need to control expenditures—­I will shortly submit a fiscal 1964 administrative budget which, while allowing for needed rises in defense, space, and fixed interest charges, holds total expenditures for all other purposes below this year’s level.

This requires the reduction or postponement of many desirable programs, the absorption of a large part of last year’s Federal pay raise through personnel and other economies, the termination of certain installations and projects, and the substitution in several programs of private for public credit.  But I am convinced that the enactment this year of tax reduction and tax reform overshadows all other domestic problems in this Congress.  For we cannot for long lead the cause of peace and freedom, if we ever cease to set the pace here at home.

II.

Tax reduction alone, however, is not enough to strengthen our society, to provide opportunities for the four million Americans who are born every year, to improve the lives of 32 million Americans who live on the outskirts of poverty.

The quality of American life must keep pace with the quantity of American goods.

This country cannot afford to be materially rich and spiritually poor.

Therefore, by holding down the budgetary cost of existing programs to keep within the limitations I have set, it is both possible and imperative to adopt other new measures that we cannot afford to postpone.

These measures are based on a series of fundamental premises, grouped under four related headings: 

First, we need to strengthen our Nation by investing in our youth.

The future of any country which is dependent upon the will and wisdom of its citizens is damaged, and irreparably damaged, whenever any of its children is not educated to the full extent of his talent, from grade school through graduate school.  Today, an estimated 4 out of every 10 students in the 5th grade will not even finish high school—­and that is a waste we cannot afford.