Editing 75-04-A5 (section)

=== Transcript ===
Why is the federal budget running out of control? I'll be right back with some answers.

Yesterday, I discussed the raw figures of recent federal budgets. The picture is of a government spending far beyond its means with the pace accelerating. Reversing this trend is essential to our survival as a free and stable nation, but before we can take the necessary steps we must be clear where the problem lies. Senator John McClellan, the Arkansas Democrat who's the Chairman of the Senate Appropriations Committee provided some sound answers in a recent article in the New York Times. "The first thing we must understand," says Senator McClellan, "is the defense spending is not the problem. Since fiscal year 1966 the cost of the federal government has risen more than 150 percent from 134.7 billion to 349.4 billion, the estimated figure for fiscal year 1976. Of this total increase, only 17 percent is accounted for by defense. In fact, outlays for national defense have shrunk in this 10-year period from 41.5 percent to just 26.9 percent of total federal spending." The senator is on firm ground when he says, quote, "Very little blame can possibly be lodged against the Defense Department for the exorbitant increase in federal expenditures." Unquote.

In the last decade non-defense spending has clearly been the culprit. It has accounted for 82 percent of the increase in spending. As a proportion of the budget it's risen from just 58.5 percent to 73.1 percent, while national defense was rising by 68 percent, not much more than the rate of inflation. Other government spending was rising by a whopping 224 percent, while defense spending has fallen to less than 6 percent of the gross national product. Non-defense spending at the federal level alone is now taking well over one-fifth of your annual income.

The truth is that defense spending has been rising far less rapidly than any other major item in the budget. Here are some examples: federal aid to education, manpower, and social services has jumped 257 percent. Social Security and other retirement and disability programs are up 247 percent. Health services led by Medicare and Medicaid have jumped 963 percent. It's bad enough that these programs are eating heavily into your taxpayers dollar, how much worse when we consider how dismal the results of many of them have been. Take the Social Security program. As fewer young people begin to enter the job market, the time may come within a few years when the system cannot support retirees, even if taxes are increased much further. Medicare and Medicaid, by taking a huge proportion of patient-doctor transactions away from the marketplace have contributed the lion's share of overall inflation of medical costs. In the last 10 years, as spending for education has increased student test scores have declined, discipline has deteriorated and local control of our school systems is threatened. In field after field generous federal spending has caused more problems than it solved.

What an irony, if by refusing to cut spending we contribute to the deterioration of the nation's social fabric. At the same time we're bankrupting the treasury. It's almost as if we refuse to read the evidence of our senses.

Bigger government is not more efficient government. Big government is weak government. Its only strength is the power to bring its weakness, uncertainty and inefficiency to every corner of American life.

This is Ronald Reagan.

Thanks for listening.

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