Excerpts of Remarks in Saginaw, Michigan

How do we pay for our plan? How is it possible to cut tax rates by 15 percent, have a $500 per child tax credit for children, and cut capital gains taxes in half — and still balance the budget by 2002?

Let me tell you exactly how we'll do it. The key to cutting taxes and balancing the budget at the same time is simple — we just have to slow the rate of increase in federal spending. Let me repeat that: all we really need to do is slow the rate of increase. We need only $576 billion in spending control. Two-thirds of it, or $393 billion, is in the budget resolution passed by congress, in a bipartisan vote, this year.

All right but where do we find the rest? Medicare and social security are off the table. In fact, over the next six years, medicare spending will increase 39 percent and social security will increase 34 percent. Also off the table are interest on the debt, and any further reductions in national defense.

That leaves the remainder of the federal budget, which amounts to about 600 billion dollars this year and grows to $670 billion by the you 2002. If we reduce the total of that spending by less than five cents on the dollar, we will save another $183 billion over six years. All together, that amounts to $576 billion, more than enough to pay for the $548 billion tax cut.

Now we're almost there. We've paid for the tax cuts. To get to a balanced budget by 2002, we need an additional $181 billion. Higher economic growth will give us $147 billion in extra revenues over the next six years. We're also going to start selling government assets. That will give us much more than the $34 billion needed. Add it up, and we'll have more than enough to drive the federal deficit down to zero, and balance the budget by the year 2002.

Our plan calls for saving only five cents on the dollar. President Clinton and the democrats say we can't do that. They don't understand what's happening in this country every day. Millions of families are pinching pennies, taking five cents or even more out of their spending dollar, because they don't have any other choice. Only President Clinton would say that families should pinch pennies, but his liberal administration will not.