Contract With America

Creating a Safe and Prosperous Future for Our Generation and Our Children We are proposing the most significant change in American government since 1933. This change involves $11.7 trillion in federal spending, the fundamental direction of American Society, and the lives of 260 million Americans. The significance of this opportunity requires an investment of time in order to understand what we're trying to do. _________________________________________________________________ The Coming Debate is not about just the budget: * It is about America's Future * It is about the Doing the Right Thing * It is about an opportunity to create the potential for prosperity, safety and a better life for virtually every American It will take hard systematic work and real change, but it can be done and it will improve our lives and our children's lives. Doing the Right Thing Means: * Being truly compassionate by replacing the Welfare State with an Opportunity Society * Restoring freedom by ending centralized bureaucratic micromanagement * Promoting prosperity, economic growth, and take-home pay by reducing taxes, litigation and regulation * Creating opportunity for every American by leading the transformation to a Third Wave, Information Age society * Creating a safe future for our children and our retirement years by balancing the budget and solving the financial crises in funding Medicare and Society Security The Majority Party in American politics is responsible for leading the civic discussion about the American Idea. It is our moral responsibility. As the majority party, we must lead a new dialogue to achieve the needed changes. That new dialogue must lead to a new partnership with the American people. Through our new dialogue we can change today's public opinion into tomorrow's public judgment. Given enough facts people will decide we must create new opportunities by reshaping American Government and balancing the budget. The American people will join a partnership to create a safe retirement for the Baby-Boomers and a safe future for their children. In 1995 we are at a crossroads. American has been in similar situations and always risen to the challenge. _________________________________________________________________ We have nothing to fear by fear itself Franklin Delano Roosevelt, 1933 Facing 25% unemployment in the Great Depression _________________________________________________________________ Our Generation has a Rendezvous with Destiny Franklin Delano Roosevelt, 1936 Facing Nazi Germany, Fascist Italy and Imperial Japan _________________________________________________________________ We have every right to dream heroic dreams ... the crisis we are facing today ... requires our best effort and our willingness to believe in ourselves and to believe in our capacity to perform great deeds, to believe that together with God's help we can and will resolve the problems which now confront us. After all, why shouldn't we believe that? We are Americans. Ronald Reagan, 1/81 Facing 13% inflation, 22% interest rates, the Iranian hostage crisis and the Soviet Empire's invasion of Afghanistan _________________________________________________________________ OUR OPPORTUNITY We have the potential to improve every American's life through 5 strategic improvements. 1. Being truly compassionate by replacing the Welfare State with an Opportunity Society Restoring freedom by ending centralized bureaucratic micromanagement 2. Promoting prosperity, economic growth, and take home pay by reducing taxes, litigation and regulation 3. Creating opportunity for every American by leading the transformation to a Third Wave, Information Age Society 4. Creating a safe future for our children and our retirement years by balancing the budget and solving the financial crises in funding Medicare and Social Security To embrace change on this historic scale, we must use an appropriate planning model: * Vision * Strategies * Projects (definable, delegatable achievements) * Tactics We must ask ourselves: * What is our vision of America's future? * What are our strategies to achieve that vision? * What projects are the building blocks to implement our strategies? * What tactically do we need to do today to model and fulfill our vision? If we fulfill our destiny, we'll achieve: * Our vision of a successful 21st-century America - 1 + Every American safe from violence and drugs + Every willing person will be integrated into the world of work, property, and achievement + A health environment will be managed through sound science and a commonsense, effective and economical approach + New technologies and new approaches will extend opportunities in learning, health and jobs to the poorest rural and inner-city neighborhoods + Government will be lean, customer-responsive and effective * Our vision of a successful 21st-century America - 2 + A renewed American civilization, with a renewed understanding of "Our Creator," our traditions and our institutions, will have created a renaissance in civic responsibility and in voluntary and non-profit charities and activities + The best system of health in the world + Effective lifetime learning + New technologies and approaches to create the fullest possible participation of every American with disabilities * Our vision of a successful 21st-century America - 3 + A pro-entrepreneur, pro-science, and technology, pro-savings and investment America that is inventing the best products with the highest values in the world + Job opportunities for every American with the greatest value added, highest productivity, largest incomes, and best job security in the world as the best exporting country that creates American jobs through world sales. + Low taxes so incomes translate into take-home pay and the family budget has precedence over the government budget + A regularly balanced budget with declining national debt so money will maintain honest value without inflation, taxes to pay interest will be declining and interest rates will be low. We have living proof America can succeed in the 21st Century. All around us scientists and entrepreneurs are inventing a better future. All around us corporations are re-thinking and re-engineering to produce more, better and faster, with fewer resources. All around us the private sector and private citizens are changing, adapting and improving. The Federal government is the least changed major institution in America. We know we can have a leaner, better, more effective government that does more and serves people better with fewer resources. When we have our plan thought out, we must lead by listening to others about their plans, their hopes and their fears. Listen, Learn, Help, Lead These are the four key steps to getting people to implement large-scale change. FIVE STRATEGIC IMPROVEMENTS WILL HELP US CREATE A BETTER GOVERNMENT AND A BETTER AMERICA: 1. Replacing the welfare state with an opportunity society 2. Decentralizing and privatizing American government 3. Creating economic growth and re-establishing America's competitiveness in the world market by reducing taxes, litigation, and regulation 4. Leading the transformation to a Third Wave, Information-Age society 5. Balancing the budget and solving financial crises in Medicare and Social Security _________________________________________________________________ THE FIRST STRATEGIC IMPROVEMENT Being Truly Compassionate requires replacing the Welfare State with an Opportunity Society The Welfare State has failed: * It is a failed model of delivering goods and services to help people. It actually hurts the poor. * Its failure is reflected by the violence, brutality, child abuse and drug addiction in every local TV news broadcast. * The culture of violence increasingly permeates our entertainment and denigrates our civilization. * The non-working, non-productive part of our society is a factor in the deficit and declining American competitiveness in the world market. The Human Cost of the Welfare State Poor Americans are: * Trapped in unsafe housing * Maintained in unsafe neighborhoods * Saddled with rules that are anti-work, anti-family, and anti-property * Forced to have their children attend public monopolies that cost a lot but accomplish little In the name of compassion we have funded a system that is cruel and destroys families A Failed Welfare State * Welfare spending now exceeds $ 305 billion per year, for a total of $5 trillion since 1965 - more than the cost of winning WWII. * This $305 billion is roughly 3 times the amount needed to raise all poor Americans above the poverty line. * Since 1970, the number of children in poverty has increased 40%. * Since 1965, the juvenile arrest rate for violent crimes has tripled. * Since 1960, the number of unmarried pregnant teens has nearly doubled and teen suicide has more than tripled. AS WELFARE SPENDING HAS GROWN, SO HAS ILLEGITIMACY: [Chart Illustrating Welfare Spending and Illegitimacy] AS EDUCATION SPENDING HAS RISEN, SAT SCORES HAVE FALLEN [Chart Illustrating Education Spending and SAT Scores] The failure of the welfare state strikes at the heart of the American belief that every citizen is endowed by our Creator with certain inalienable rights, among which are life, liberty and the pursuit of happiness. No civilization can survive with: * 12-year-olds having babies, 15-year-olds killing each other, 17-year-olds dying of AIDS, and 18-year-olds receiving diplomas they can't read * Furthermore, no civilization can survive with parents and grandparents cheating their children by refusing to balance the budget and live within their means The Welfare State cheats the poor; the unbalanced budget cheats every child. THE LEGACY WE'RE LEAVING TO OUR CHILDREN: MORAL AND FISCAL BANKRUPTCY Our program for a better American future begins with replacing the welfare state with an opportunity society. A cheaper welfare state is an inadequate response. TRANSFORMING THE WELFARE STATE INTO AN OPPORTUNITY SOCIETY FOR THE POOR REQUIRES: * Shift from caretaking to caring - Morris Shechtman, Working Without a Net * Welfare Reform that emphasizes work, family and opportunity - Charles Murray, Rethinking the Social Welfare System, Losing Ground * Volunteerism and Spiritual Renewal - Marvin Olasky, The Tragedy of American Compassion * Renewing the Basic Values of American Civilization * Tax Incentives for work, investment, and entrepreneurship - Jack Kemp, An American Renaissance, Desoto, The Other Path: Introduction * Re-establishing property ownership and full citizenship for the poor - Manhattan Institute, City Journal, Spring 1993 * Learning as the focus of Education - Polly Williams, Wisconsin State Legislature * Government protection for the poor against violence and drugs - James Q. Wilson, Crime; William Bennett, Heritage Foundation, Policy Review _________________________________________________________________ THE SECOND STRATEGIC IMPROVEMENT Restoring Freedom by Ending Centralized Bureaucratic Micromanagement by the Government in Washington The Centralized, Washington-based system of bureaucratic micro-management has failed in a diverse, continent-wide country Reforms should emphasize decentralization from Washington and return authority to state and local government. A general rule for decision-making: For local problems, local government is generally better than national government, and the private sector is generally better than local government. The private sector includes non-profits as well as for-profit activities. The Jeffersonian Model of Limited Government Four zones of a free society: 1. Culture and society setting the rules we live by 2. Civic Responsibility; Non-Profit; Private Association; Tocqueville's Association 3. Private Property; Free Markets; Entrepreneurship; Wealth Creation 4. Limited effective government Any effort to increase government comes at the expensive of the other 3 elements of society Elected Leaders have Four Roles in this New Opportunity Society: * Visionary Definer and Value Articulator * Symbol of Community Power and Standing * Recruiter of Talent and Energy for Private Sector Solutions * Administrator and Manager of the Government When Re-thinking the Federal Government, we must ask: 1. Does the community leadership have an interest in making this happen even without Federal intervention? 2. Is it something which is morally and spiritually more appropriate in a non-profit, voluntary system? 3. Does the project symbolize and communicate the values we want the society and culture to be reinforcing? 4. Can a private, for-profit business achieve the same goal as well or better than the government? 5. Is there a Third Wave Information Age technology that improves service or lowers cost or does both? 6. If government is the best place to do it, can it be done at the state or local level? 7. If the Federal government is the best place to do it, where is it on the priority list? Can we afford to do it? 8. Have we thought through the least expensive, most citizen oriented, most entrepreneurial way to do it with maximum satisfaction and minimum resources? THE REAL ISSUE: WHAT WORKS AND WHAT DOESN'T? _________________________________________________________________ THE THIRD STRATEGIC IMPROVEMENT Promoting Economic Growth, Jobs and Prosperity by Reducing Taxes, Litigation and Regulation The American Economy needs to grow within an increasingly competitive world market * To provide more jobs and increased take-home pay * To provide resources for charities, local and state governments * To increase revenues so the Federal Government budget can be balanced without raising taxes * To pay for Social Security and Medicare in the 21st century As Washington Grows, the Economy Slows [Chart Illustrating Spending as % of GDP vs. Annual Change in GDP] The Middle Class Squeeze: Today most families are working harder - they're just not getting ahead. Real Total Government Taxes Per Household, 1900 - 1994 [Chart Illustrating Real Total Government Taxes Per Household, 1900-1994] Federal Taxes as a Share of Median Household Income [Chart Illustrating Federal Taxes as Share of Median Household Income] Middle Class Anxiety is Justified [Chart Illustrating Real Median Income vs. Taxes as Share of National Income] Creating more effective government that needs fewer resources will allow us to lower taxes and increase take home pay for working middle class families. Re-engineering government to cut out waste, lower costs, increase productivity and increase quality will also allow us to lower taxes on entrepreneurs and inventors so we can create more economic growth. Economic growth: The consistently underestimated contributor to our economic well-being. At 1% LESS GROWTH than the current projection: * Social Security goes into deficit 13 years sooner (in 2016) * The Federal deficit is $913 billion bigger over the next 7 years * Federal tax revenues are $716 billion smaller * Individuals will have $9,329 less personal income over 7 years At 1% MORE GROWTH than the current projection: * Social Security maintains its surplus well into the future * The Federal deficit shrinks by $913 billion over the next 7 years * Federal tax revenues are $716 billion greater * Individuals will have $9,678 more personal income over 7 years In 7 years, the difference between the high and low economic growth projections means: * $1,826 billion swing in the size of the Federal budget deficit * $1,432 billion swing in Federal revenues * $19,007 swing in what individuals could make over 7 years HIGH GROWTH RATES CAN BE ACHIEVED AND SUSTAINED AND ARE A RESPONSE TO FOLLOWING THE RIGHT POLICIES - JUST AS GOOD HEALTH COMES FROM GOOD NUTRITION AND EXERCISE Example: Japan 1975 - 1993 18 years without a recession 4.3% annual growth rate 3.7% annual personal income increase Compared with America's performance 1975 - 1993 Three recessions during that period 2.6 annual growth rate 1% annual personal income increase Imagine if America had matched the Japanese in economic growth over a similar period: * Real GDP would have been $ 1.7 trillion greater * Per capita income would have been $ 8,519 greater * Federal revenues would have been $ 365 billion greater * The Federal budget deficit would have had a $ 179.6 billion surplus rather than a $ 185.7 billion deficit in 1984 GREATER AMERICAN COMPETITIVENESS AND INCREASED ECONOMIC GROWTH REQUIRES: * A tax code that favors work, savings and investment * Less litigation * Less regulation and red tape * Lean and effective bureaucracies * Lifetime learning * Entrepreneurial culture * Sensible government investments in infrastructure * Government research and development leading to corporate product development and marketing * More aggressive U.S. government support of exports and more effective enforcement of trade agreements _________________________________________________________________ THE FOURTH STRATEGIC IMPROVEMENT Creating Opportunity by Leading the Transformation to a Third Wave, Information Age Society America needs to lead the world into the emerging Third Wave Information Revolution and its new technologies The Information Revolution with lead to changes on an historic scale: The First Wave: Hunting/Gathering to Agriculture The Second Wave: Agriculture to Industry The Third Wave: Industry to Information The Information Age will create opportunities in a wide range of areas: * Computers * Worldwide Electronics * Molecular Medicine * Breakthroughs in Material Technology * Exploring and Manufacturing in Space * Microminiaturization * Virtual Reality In the Third Wave Information Age, we can do far more with less. The advance from the vacuum tube to the transistor to the computer chip has resulted in a one-million-fold improvement in productivity over 40 years. The power of computer chips will multiply one-million-fold over a ten-year period. This means a one-trillion-fold increase in productivity after the year 2000. If the federal government had undergone this rate of improvement, today's federal government would be providing the same level of service and programs with only four federal employees and at a total budget of $100,000. All over America, companies are finding ways of doing more with less: * Over the last 15 years, one of our major automotive companies has transformed itself through new technology and a new culture of quality and productivity. They produce the same number of cars at 2 1/2 times the quality, but 1/2 the workforce. * A major American company that makes generating equipment has found a way to save $100 million a year just by re-designing the way its people do work. * By using computers more effectively, an American heavy equipment manufacturer can make twice the number of truck engines with the same number of people. Consider what a government that matched that standard would look like. Consider how much we could improve services, reduce spending, reduce taxes, and balance the budget with this approach. Re-inventing the old government isn't good enough. New breakthroughs do not fit into the traditional model of government. New breakthroughs require bold thinking based on the principles of Peter Drucker, Edward Deming, and others. We must apply these new breakthroughs as part of replacing the welfare state with an opportunity society. In a successful 21st century government, we can replace the wasteful bureaucracies of today with programs that serve citizens and save tax dollars. Among the proposals some House Republicans have already offered: * Merge the Departments of Education and Labor, saving $4 billion every year * Eliminate HUD, saving up to $15 billion over 5 years * Eliminate the Department of Energy, saving up to $20 billion over 5 years _________________________________________________________________ THE FIFTH STRATEGIC IMPROVEMENT Creating a Safe Future for Our Children and Ourselves by Balancing the Budget and Solving the Financial Crises in Medicare and Social Security The budget deficit combined with the baby-boomers' coming retirements will cause a crisis of historic proportions unless the problem is honestly faced and managed well in advance. If we face up to these challenges now, we can establish the foundations of a safe financial future for ourselves and our children. The Debt Consumes America [Chart Illustrating Growth of National Debt] The Clinton Administration knows a crisis is coming... Social Security will face a cash deficit in 2013 ... the unified deficit will increase unless taxes are raised or benefits reduced ... and (it) could come even earlier (1999). - Clinton OMB Director - Alice Rivlin, 10/94 ... but fails to provide a solution. The Clinton debt numbers actually understate the problem because they fail to account for 4 additional powerful factors: 1. The taxpayers' burden in paying interest on the debt 2. The cost of higher interest rates caused by federal government's borrowing 3. The imminent financial crisis in Medicare 4. The soon to be retiring baby-boomers and their effect on the Social Security Trust Fund Fact: Every Citizen will have to pay a lot in taxes for interest on the debt The Current Budget Deficit is Projected by to continue growing into the future without solution: Debt in 1995 $ 4,800,000,000,000 Interest for Debt $ 235,000,000,000 Debt in 2005 $ 7,533,000,000,000 Interest on Debt $ 412,000,000,000 in 2005 Cumulative Interest on $ 5,212,000,000,000 Debt 1995-2009 Over the next 15 years, we'll pay as much in taxes just to pay interest on the debt as today's entire debt: Debt in 1995 - $ 4.8 trillion Interest on the Debt - $ 5.2 trillion 1995 - 2009 The following Americans will pay a lot just on interest on the debt that builds up over their entire lives: Year of Birth Interest payments over a lifetime of 75 years Robert 1959 $ 75,851 Mary 1974 $115,724 Sally 1995 $187,150 Our spending today saddles our children with debt tomorrow. Sally will have to pay $187,150 in taxes for interest on the debt to finance her parents' and grandparents' Medicare and Social Security before she begins paying taxes for any government services that benefit her. According to Clinton Administration budget projections: In 1997 we will pay more for interest on the debt than we will pay for national defense: National Defense in 1997: $257 billion Interest on Debt in 1997: $270 billion In just 17 years, spending on entitlements and interest on the debt will consume all tax revenues. The only item in the budget that we'll be able to afford is interest on the debt and entitlements -- discretionary spending will be beyond our means. [Chart Illustrating Outlays as % of GDP] A family should know it is over-extended when [the interest on] its debts exceed 15% of its take-home pay. -- Leonard Sloan, New York Times Personal Finance Handbook Interest on the Federal debt alone already exceeds 17% of Federal tax revenues, and it is going up. {revenues $1.4 Trillion x 17% = $238 Billion {$238 Billion / $4.8 Trillion = 5% hmmmmm Fact: Budget deficits raise interest rates and cost everyone additional money. WHAT A BALANCED BUDGET WILL MEAN FOR MOST AMERICANS: I think their real incomes and purchasing power of their real incomes would significantly improve ... they would look forward to their children doing better than they. -- Fed Chairman Alan Greenspan One recent estimate is that a balanced budget could produce up to a 2% lower interest rate for everyone: * 2% lower on your car * 2% lower on your mortgage * 2% lower on your credit card * 2% lower on building a new factory * 2% lower on keeping a family farm in business This is a balanced budget dividend. While 2% may not seem like much, it adds up to a lot of money over a lifetime. WHAT 2% MEANS FOR A 30 YEAR MORTGAGE: For a $75,000 home (30-year mortgage) at 8.75% annual interest rate: Annual Mortgage + Your National Deficit Tax = Amount You Pay Payment (2% added to interest rate) Every Year $5,832 $1,248 $7,080 Extra mortgage you pay over 30 years due to national deficit: $37,440 WHAT 2% MEANS FOR YOUR CAR PAYMENT: For a $15,000, 4-year auto loan at 9.75% annual interest rate: Annual Car + Your National Deficit Tax = Amount You Pay Payment (2% added to interest rate) Every Year $3,624 $180 $3,804 Extra interest you pay over 4 years on your auto loan due to the national deficit: $720 WHAT 2% MEANS FOR A FAMILY FARM: For a 6-month, $350,000 farm operating loan at 10% annual interest rate: 6-month Interest + Your National Deficit Tax = Amount a Family Payment (2% added to interest rate) Farm Pays $13,936 $3,484 $17,420 WHAT 2% MEANS FOR DEVELOPING A NEW DRUG: Over 7 years, it could save $20 million of the cost of developing just one new drug. 2% lower interest rates will make America a much more competitive economy in the world market. With a balanced budget lowering interest rates (the Balanced Budget Dividend), experts believe the American economy will: * Create 4.3 million more jobs in 10 years * Increase per capita incomes 16.1% * Generate $235 billion more revenue for the Federal government without a tax increase * Generate $232 billion more revenue for state and local governments without a tax increase Fact: The imminent crisis in Medicare funding is real and unavoidable. It must be corrected within the next few years. MEDICARE SPENDING WILL SOON OUTRUN REVENUES, AND ITS DEFICIT WILL CLIMB: [Chart Illustrating Medicare Deficit, 1996-2005] _________________________________________________________________ MEDICARE GOES BANKRUPT IN 6 YEARS [Chart Illustrating Medicare Outlays vs. Medicare Payroll & Benefits Tax, 1994-2030] By 2002, the Medicare Trust Fund runs out of money. If we wait until then, everyone will pay for our failure to solve the problem. The Medicare portion of FICA taxes for everyone will have to be raised 125% from their current level AND senior citizens will have to pay 300% more in yearly premiums. The cost of Medicare to everyone will go up again and again until Medicare is transformed. Because a centralized government monopoly is inherently inefficient, wasteful, and too slow to adapt to new ideas and new solutions: MEDICARE MUST BE TRANSFORMED into a system in which every senior citizen has more choices in health care and more control over their own lives. A transformed Medicare system will provide better health at lower cost with great choice. Failure to transform Medicare will lead to cuts in services and financial crisis. The immediate Medicare challenge will ultimately be dwarfed by an even bigger Social Security challenge. FACT: When baby-boomers begin to retire, they will put enormous pressure on the Federal budget. * Baby-boomers begin to retire in 2008. * In 2013, Social Security spending will exceed the taxes workers are paying into the system. * In 2030 the Social Security Trust Fund will be entirely depleted. THE BABY-BOOMERS' RETIREMENT THREATENS THE SOCIAL SECURITY TRUST FUND [Chart Illustrating Income vs. Outlay, Social Security Trust Fund] THE BABY-BOOMERS' RETIREMENT DRAINS THE SOCIAL SECURITY TRUST FUND, AND ADDS TO THE ALREADY MASSIVE DEFICIT [Chart Comparing Social Security Trust Fund, Deficit Excluding Social Security, Combined Deficit] Faced with combined deficits on this gigantic scale, the politicians of 2013 will only have four choices: * Ruthless spending cuts of unprecedented depth - OR * Massive tax increases - OR * Tremendous cuts in Social Security benefits - OR * Fiscal crisis leading to massive inflation For the politician who fails to provide leadership, it's better to enjoy the present and postpone worries abut the future, no matter what the ultimate cost. If you plan to be alive in 2013, NOW is the time to ensure that the baby-boomers will be able to retire without: massive inflation, massive tax increases, or massive cuts in Social Security. NOW is the time to prepare for a safe and prosperous future. Recap: The four fiscal facts that make change in the Federal government unavoidable are: Rising cost to taxpayers of interest on the debt Cost to everyone of higher interest rates caused by the deficit Imminent crisis in Medicare funding Shift in Social Security from surplus to deficit as the baby-boomers start retiring _________________________________________________________________ 5 STRATEGIC IMPROVEMENTS DEFINE "DOING THE RIGHT THING" * Being truly compassionate by replacing the welfare state with an Opportunity Society * Restoring freedom by ending centralized bureaucratic micromanagement * Promoting prosperity, economic growth, and take-home pay by reducing taxes, litigation and regulation * Creating opportunity for every American by leading the transformation to a Third Wave, Information Age Society * Creating a safe future for our children and our retirement years by balancing the budget and solving the financial crises in funding Medicare and Social Security What will our childrens' lives be like if the leadership for a safe and prosperous future prevails? What if the status-quo leadership prevails? Take the story of 2 children: Danny and Theresa. DANNY Danny is a successful suburban child who's family is well-off and who's future is bright. Theresa is a poor inner-city child who's life is bleak and future is uncertain. Danny is a successful suburban 18-year-old whose family is well-off and his otherwise bright future is threatened and he doesn't even know it. More children Danny's age believe the UFOs might exist than believe that Social Security will be there for them when they retire. Danny faces a bill of $125,000 from the Federal government that he will have to pay over his lifetime in interest on the Federal debt. Our current policies offer Danny and his generation an ugly choice: By the time he's 43, he could be paying 28% of his income just to fund Social Security and Medicare. Or, he could wait until he's 53, do nothing, and be faced with a bankrupt Social Security system. If Danny can't provide for his own future, how can he provide for America's? THERESA A poor inner-city 15 year-old whose life is bleak and future uncertain, Theresa has been raised by her mother alone, as is the case with over 1/2 of the children like her in America's inner cities. She was born when her mother was only a teenager herself. Theresa's family is on welfare - which is not unusual. 77% of all unmarried teen mothers go on welfare within 5 years of giving birth. More than 40% remain on welfare for more than 10 years. Theresa's 10 year old brother is twice as likely as any of the types of boys his age to be the victim of a serious crime, and nearly three times as likely to be murdered by the time he reaches 18 years old. Theresa is at great risk of becoming pregnant, as children of teen mothers are 2 1/2 times more likely to become mothers themselves. If she becomes a teen mother, she is 3 times as likely to remain in poverty. If Theresa is unable to break the cycle of poverty, violence and drug addiction to improve her future, how will she be able to contribute to America's? All of the world's children rely on American leadership for a safe, free and prosperous future. There is no alternative leader. The alternative to a strong America is a dark and bloody planet: Bosnia, Somalia, Rwanda, Haiti, Chechnya. For our children's sake, our country's sake and the world's sake, we must wrest control from those who refuse to take responsibility and insist on a plan to create a safe and prosperous future for our children and for ur own retirement years. Challenge is to have a Federal government that spends $ 11.7 trillion over 7 years and does it well enough to provide goods and services effectively. If we implement the 5 strategic improvements, we can actually have better government services with less money and a lot less Washington bureaucracy and red tape. _________________________________________________________________ THE STEPS TO A DO-ABLE, PRACTICAL, COMMON SENSE BALANCED BUDGET PLAN 1995 Revenues - $1.419 Trillion 2002 Revenues - $1,788 Trillion 2002 Spending = 2002 Revenues $1.788 trillion = $1.788 trillion Budget Balanced Total Spending for Last 7 Years 1989 - 1995: $ 9.5 Trillion Total Spending for the Next 7 Years (Under a Balanced Budget) 1996 - 2002: $ 11.7 Trillion Social Security is off the table. No Social Security spending will be cut to get a Balanced Budget. Social Security Spending: 1989 - 1995 = $ 1.997 trillion 1996 - 2002 = $ 2.892 trillion Non-Social-Security spending will still go up every year Non Social Security Spending 1989 - 1995 = $ 7.5 trillion 1996 - 2002 = $ 8.8 trillion [Chart Illustrating Growth in Non Social Security Spending] The key to getting to a balanced budget is to be sufficiently innovative, creative and transformational to meet America's key needs while spending $ 11.7 trillion over the next 7 years. Getting to a balanced budget will save: $ 125 billion through lower deficits $ 298 billion through 1% lower interest rates (the Balanced Budget Dividend) Or, $ 423 billion savings on taxes just through interest savings over 7 years If reformed litigation, taxation and regulation combine with lower deficits and lower interest rates, the economy will grow and Federal revenue will be higher [Chart Illustrating Growth In Federal Revenues] If we fulfill our destiny, we'll achieve: Our Vision of a Successful 21st Century America - 1 * Every American safe from violence and drugs * Every willing person will be integrated into the world of work, property, and achievement * A healthy environment will be managed through sound science and a common sense, effective and economical approach * New technologies and new approaches will extend opportunities in learning, health and jobs to the poorest rural and inner-city neighborhoods * Government will be lean, customer responsive and effective Our Vision of a Successful 21st Century America - 2 * A renewed American civilization with a renewed understanding of "Our Creator", our traditions and our institutions will have created a renaissance in civic responsibility and in voluntary and non-profit charities and activities * The best system of health in the world * Effective lifetime learning * New technologies and approaches to create the fullest possible participation of every American with disabilities Our Vision of a Successful 21st Century America - 3 * A pro-entrepreneur, pro-science and technology, pro-savings and investment America that is inventing the best products with the highest values in the world * Job opportunities for every American with the greatest value-added, highest productivity, largest incomes and best job security in the world ass the best exporting country that creates american jobs through world sales * Low taxes so incomes translate into take home pay and the family budget has precedence over the government budget * A Regularly balanced budget with declining national debt so money will maintain honest value without inflation, taxes to pay interest will be declining and interest rates will be low The Time for Cheating Our Children has Ended. The Time to Balance the Budget has Arrived. America's Future Requires a New Dialogue and a New Partnership with the American People. That is what the House Republicans are dedicated to achieve in April and May of 1995.