The Federal budget is both a symptom and a cause of our economic problems.  Unless we reduce the dangerous growth rate in government spending, we could face the prospect of sluggish economic growth into the indefinite future.  Failure to cope with this problem now could mean as much as a trillion dollars more in national debt in the next 4 years alone.  That would average $4,300 in additional debt for every man, woman, child, and baby in our nation.

To assure a sustained recovery, we must continue getting runaway spending under control to bring those deficits down.  If we don’t, the recovery will be too short, unemployment will remain too high, and we will leave an unconscionable burden of national debt for our children.  That we must not do.

Let’s be clear about where the deficit problem comes from.  Contrary to the drumbeat we’ve been hearing for the last few months, the deficits we face are not rooted in defense spending.  Taken as a percentage of the gross national product, our defense spending happens to be only about four-fifths of what it was in 1970.  Nor is the deficit, as some would have it, rooted in tax cuts.  Even with our tax cuts, taxes as a fraction of gross national product remain about the same as they were in 1970.  The fact is, our deficits come from the uncontrolled growth of the budget for domestic spending.

During the 1970’s, the share of our national income devoted to this domestic spending increased by more than 60 percent, from 10 cents out of every dollar produced by the American people to 16 cents.  In spite of all our economies and efficiencies, and without adding any new programs, basic, necessary domestic spending provided for in this year’s budget will grow to almost a trillion dollars over the next 5 years.

The deficit problem is a clear and present danger to the basic health of our Republic.  We need a plan to overcome this danger—­a plan based on these principles.  It must be bipartisan.  Conquering the deficits and putting the Government’s house in order will require the best effort of all of us.  It must be fair.  Just as all will share in the benefits that will come from recovery, all would share fairly in the burden of transition.  It must be prudent.  The strength of our national defense must be restored so that we can pursue prosperity and peace and freedom while maintaining our commitment to the truly needy.  And finally, it must be realistic.  We can’t rely on hope alone.

With these guiding principles in mind, let me outline a four-part plan to increase economic growth and reduce deficits.

First, in my budget message, I will recommend a Federal spending freeze.  I know this is strong medicine, but so far, we have only cut the rate of increase in Federal spending.  The Government has continued to spend more money each year, though not as much more as it did in the past.  Taken as a whole, the budget I’m proposing for the fiscal year will increase no more than the rate of inflation.  In other words, the Federal Government will hold the line on real spending.  Now, that’s far less than many American families have had to do in these difficult times.