My budget has funded a responsible increase in our ongoing operations. It has funded our nation’s important priorities. It has protected Social Security and Medicare. And our surpluses are big enough that there is still money left over.
Many of you have talked about the need to pay down our national debt. I listened, and I agree. (Applause.) We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. (Applause.) At the end of those 10 years, we will have paid down all the debt that is available to retire. (Applause.) That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history. (Applause.)
We should also prepare for the unexpected, for the uncertainties of the future. We should approach our nation’s budget as any prudent family would, with a contingency fund for emergencies or additional spending needs. For example, after a strategic review, we may need to increase defense spending. We may need to increase spending for our farmers or additional money to reform Medicare. And so, my budget sets aside almost a trillion dollars over 10 years for additional needs. That is one trillion additional reasons you can feel comfortable supporting this budget. (Applause.)
We have increased our budget at a responsible 4 percent. We have funded our priorities. We paid down all the available debt. We have prepared for contingencies. And we still have money left over.
Yogi Berra once said, “When you come to a fork in the road, take it.” (Laughter.) Now, we come to a fork in the road; we have two choices. Even though we have already met our needs, we could spend the money on more and bigger government. That’s the road our nation has traveled in recent years.
Last year, government spending shot up 8 percent. That’s far more than our economy grew, far more than personal income grew, and far more than the rate of inflation. If you continue on that road, you will spend the surplus and have to dip into Social Security to pay other bills. (Applause.) Unrestrained government spending is a dangerous road to deficits, so we must take a different path. (Applause.) The other choice is to let the American people spend their own money to meet their own needs. (Applause.)
I hope you will join me in standing firmly on the side of the people. You see, the growing surplus exists because taxes are too high and government is charging more than it needs. The people of America have been overcharged and, on their behalf, I am here asking for a refund. (Applause.)
Some say my tax plan is too big. (Applause.) Others say it’s too small. (Applause.) I respectfully disagree. (Laughter.) This plan is just right. (Applause.) I didn’t throw darts at the board to come up with a number for tax relief. I didn’t take a poll or develop an arbitrary formula that might sound good. I looked at problems in the Tax Code and calculated the cost to fix them.
A tax rate of 15 percent is too high for those who earn low wages, so we must lower the rate to 10 percent. (Applause.) No one should pay more than a third of the money they earn in federal income taxes, so we lowered the top rate to 33 percent. (Applause.)
This reform will be welcome relief for America’s small businesses, which often pay taxes at the highest rate. And help for small business means jobs for Americans. (Applause.) We simplified the Tax Code by reducing the number of tax rates from the current five rates to four lower ones, 10 percent, 15, 25 and 33 percent. In my plan, no one is targeted in or targeted out. Everyone who pays income taxes will get relief. (Applause.)