 We last shared a breakfast like this a little over a year ago. I remember it very well. I remember the date, March 4th. It's easy to remember. That was my wedding anniversary. I spoke at that time of what I felt we shared as first termers here, and we came here with a desire to set government on a different course. Since then, I have to thank you. I've had the solid support of this class, and I'm truly grateful and proud for all that you have done with regard to changing the course of government. Now, I know that unemployment has continued to increase since then, and it was already too high then. They would have you kind of forget that in the last few months of the campaign, we were running against the high employment that had started to come on beginning in 1979 and the 1980 recession. I was interested, too, to hear Jim Wright the other day refer to this recession as the Reagan Recession. I don't recall him ever referring to the 1981 as the Carter Recession, but there are some things, interest rates, in spite of a 20% drop since we've been here, are still too high. There's no question about that, and I think they bear a great deal of the responsibility for the high unemployment today. I share the belief of a number of economists that we're in the trough of this recession and that there'll be an upturn beginning in the second half of this year. We have cut taxes, including the cruelest tax of all inflation. A year ago, when we met together, the polls declared that that was the number one problem overwhelmingly on people's minds. We had reached in the previous year in 1980 a high of 18% at some times on an annualized rate, but it averaged out for the year at 12.4%. You might be interested to know that in the last five months, it has averaged out at 5.5%, and in February, it was on an annualized rate of less than 3%. Still, I believe the problems that we face today and all of these things are due actually to the long sustained practice of overspending by government, and in spite of the projected deficit increase that is brought on by the recession, I'm still committed, and I know you are, to a balanced budget. It's going to take a little longer than we'd hoped back there in those campaign days, and I'm open to suggestions as to further spending cuts, and I'm willing to discuss revenues, but I do have to tell you that I believe that the business and individual cuts that were passed last year are a framework that is vital to lasting economic recovery. With regard to defense, the defense spending, and I know you've heard all the figures, and in fact, sometimes I punch on channel 10 on television and see some of you on the floor in the debating and get greatly encouraged. It wasn't too many days ago that one after the other members of this particular class were taking their turns at the microphone, and I was standing up there in front of the set cheering. The defense situation is you know that we're only spending a little more than half in the sense of percentage of the budget for defense, as was spent in previous years. The Kennedy budget was 49% for defense, and 27% for social programs, and Mars is 27% for defense and 46 something for the social programs. But here is our problem. I believe that any department and government can still be cut more and find savings, let's say, put it that way. Find savings, and that's true of defense as well as anything else, and I am willing to listen to any suggestions unless they are suggestions of stopping the buildup of some of the defense weapons that we need and thus setting us back and delaying our playing catch up, which we're doing with the Soviet Union. But in a very short time, I'm going back to something we did in California. We have some business leaders under the chairmanship of Peter Grace, the Grace Company, who are going to form task forces and go into every department of government as we did in California to see where modern business practices can be put to work to make government more economical, more efficient, and the first task force is going into the defense department. So we are interested if there can be some savings there. But again, as I say, not in the sense of suddenly saying, well, we'll drop X number of billions of dollars and simply not build this or build that that we so desperately need if we're going to try to catch up. I know oftentimes you get down to your own business here that that first re-election campaign is more difficult than getting elected the first time. And I'm committed to keeping a majority in the Senate and to working toward one in the House. And that begins by helping incumbents of both bodies, the Senate and the House. And I'll do all of that that I possibly can. See that we come back here to this room the next time as the sophomore class. So now I'd like to present a man who I think has been doing a terrific job for House Republicans and for this nation. I'm indebted to him and I think you all feel the same way. Our House Republican leader, Bob Michael. Thank you, Mr. President, Mr. Vice President and members of the cabinet and your counselors, Mr. President. Picking up on the last comment you made with respect to this class, I think if my arithmetic is correct, it makes up 27% of our membership with 52 members of the freshman class. We need exactly half that number, I guess, really to get right in that range of taking over. I guess I'd be remiss if I didn't mention that it has to be on these freshman's minds they're running for re-election for their first time. Unfortunately, when I was running for my first re-election, we had a recession in 58. Half my freshman class went down the tube. We lost 47 House members, 13 senators. It's been uppermost in my mind, never forgotten it. I know what the implications are. That's why we're very deeply grateful for the attention that you've given to our freshman class. By your having us all up here again today, we appreciate that in no small measure. And I might say that this class has really given when the chips were down, they've given us just as good a support as any members on our side. And I'm most appreciative of that. They're a bit frustrated, however, in the sense that, you know, in times of budget restraints and all the things we're going through, they're not any goodies to give away like some of us used to be able to do, plugging for this or that program because it just isn't in the total mix of things. And so this class has had a really extraordinary burden to bear as you all go into your first campaigns for re-election. And I'm happy that the president recognizes that as he did by his comments. And so I just want to say that it's been a joy for me to work with these people. They've been your real ardent supporters out there. And if we can just get half again as many this next time around, well, then we're going to take the whole ball of wax when it comes to 84. Thank you. And at this particular time, I just got to present to you the president of the class who really will tell you what it's all about, Tommy Hartnett from South Carolina. Thank you, and thank you, Mr. President, for having us. I'm the only one who hasn't been able to speak with the president at the table this morning. I've been trying, but he just doesn't seem to understand my accent. So I haven't gotten a word in edgewise. Mr. President, you know, there are those of us in this class who feel that we don't want to be remembered for how long we serve in Congress, but for only how well. And there are those of us who, at least I speak for myself and I know for others with whom I have spoken, would literally follow you off of a cliff. And I personally would rather go down in defeat trying to do the things that you are trying to do for this country, change things and make people do things for themselves and have less government involvement and less government regulation. I would rather lose trying to do those things for this nation than to just sit up here for another two, four, six, eight, or 10 years and going back to the policies that we've known for the last 40 years. I want to say to my fellow freshman Republicans that this administration, I think, has paid us more attention as a class and as individuals than anybody else in that Congress. Well, we all have our own complaints, Mr. President, and we could probably stand up and give you a litany of them from each individual. But overall, the help that you've given us and that the people that you have here at the White House working with you, Mr. Atwater, Mr. Dubosteem, Mr. Rollins, Mr. Dressendoffer, Nancy and others that have been so helpful to me and I know of to other members. And if they haven't been helpful to other members, it's because the other members haven't asked them for their help. So quite frankly, I find no complaints for this administration, nor with the help that you've given us. And I think that although we have to be concerned with our election, we were not elected to lifetime jobs. We were elected to Congress for a two-year term. The Constitution provides that for some good reason, whether it be our own inadequacies or the inadequacies of the administration with whom we are working at that time. Two years is the length of our term. And I think we should concentrate on doing something positive in those two years instead of worrying about the two years that may follow. And it's my opinion, Mr. President, if we would stick more closely with what you have proposed in defense as well as in other social cuts and others that may have to come about, we'll do well to be remembered how well we served if it only be for two years. I just want to express to you my appreciation and to Bob Michael and Trent Lott who I think have done an outstanding job in not only rendering service to the entire membership of the House, but in particular to those of us who are sucklings who are trying to grow and learn something about this business that we're in. And Trent, you and Bob have been invaluable to us. And I hope that the Lord will grant you many links of days leading this republic in what I hope will be a majority in the next two years. But Mr. President, we stand, I think, still committed to you and to your programs, although individual differences we might have, and express to you our appreciation for what you've done as a president, not only for us, but for this nation to try to restore some sanity both economically and otherwise to our great government. You know, it's be like me to have a chance to speak with the president of the United States as a captive audience, not be able to say anything intelligent. But anyway, I've tried to do that even though you might not have understood it. We are deeply grateful to you, sir. And I think that as a class overall, you're going to find us still one of the greatest groups you've got in that Congress, more committed to you than anybody else and willing to do whatever you think needs to be done to change the direction of our nation. Thank you for having us. Well, not another speech, no. His name has been mentioned already. My Tommy and I just want to present him now to you, that gentleman, the Republican whip, Trent Lott. Thank you, Mr. President, Mr. Vice President. Tommy, I understood every word you said. I don't know what you're talking about. Mr. President, I assure you that being the whip and doing whip checks with this group has been a very easy task because they have been a very solid group in support of the principles they were elected on and in support of the program that you've been trying to get through the Congress, so it's been very easy. These have been, as a matter of fact, your point men and women. They've been your storm troopers. Every time we've started to lead up to a major vote in the House last year or a major battle, they got in the well. They started the one-minute speeches. They stood on the steps of the Capitol. They were ready to get into the fight. And their only problem right now is they're frustrated. They're like green berets with no battle to get into. And if you watch them in the past few days, led by several of the members on a little task force, they've been going down in the well and saying, Mr. Speaker, where's your program? You know, you've just been castigating the President, dissecting his budget. What have you got to say for yourself? And it wasn't us senior members. It was the people in this room that have been leading the way once again. You know, I hate to think of myself at 40 as one of the old bulls, but you know, we need the enthusiasm and the youth and the commitment to the principles and the programs that you stand for that is exemplified in this group. And they're doing it again right now for you and for the country because they believe in what you're doing and what we're trying to do. I think the only comment I'd like to wind up with are two things. We won't let you down. We just ask that you remember us speaking as a class as we go into not only the battles of the budget this year, but the reelection battles in the fall. My favorite quote from government, some of you've heard me give it before, is one from Peter Marshall when he was chaplain of the United States Senate in one of his last prayers. He said, oh God, give us the strength to stand for something lest we fall for anything. We know you stand for something that's important in this country and we agree with you. Thank you, Mr. President. Thank you very much. And now, the gentleman that is of interest to all of you now in the, at least one of the events that's coming up in the balance of this year. And that is the chairman of our congressional campaign committee, Guy Vandijek. Thank you, Mr. President, Mr. Vice President, members of the freshman class and members of the White House team and guests. We thank you very much. We're glad to be here. And I'm delighted that you included some upper classmen in this freshman class breakfast. I have said all over the country many times that this freshman class is the youngest, the most talented, the most rambunctious and the finest freshman class to hit Capitol Hill in a long, long time. I didn't think anything would ever top this class but there's a class that's going to top them and that's the group of Republican challengers that are out there across this land now. They're younger. I think they're even more talented. And if possible, I think they're even more rambunctious. And that class is going to be even larger. And I hope a year from now you have a new freshman class in and I hope we have to have some additional tables. And that really can be done at, at this stage of the election game in 1934, Jim Farley, who was then the Democrat National Chairman wrote a letter to the president in a famous Dear Franklin letter. He said, Mr. President, I've got to inform you that things are in tough shape and we got a lot of decisions and we don't seem to have any unanimity. There's chaos around the country economically and there's more unemployment today, Mr. President, than there was a year ago and in view of that. That's my sad duty to inform you that we're going to lose a minimum of 40 seats in the House in the upcoming congressional elections. Well, they didn't lose 40, they gained nine and that's the only time in this century that the party that took the White House went on to gain in the next off year congressional elections. And what happened? There wasn't an economic upturn. Franklin Roosevelt summoned the Democratic House members and senators maybe to this very room, maybe under that portrait of Abraham Lincoln. And he said, we are in tough times and there are tough choices and whenever there are tough choices you get a little disagreement here and there. But there's one thing on which we do all agree and that is that Herbert Hoover and those Republican policies left such an economic mess on our doorstep that nobody can clean it up in two short years and from this moment on we're united in our opposition to the legacy that the Republicans left us and they went out united. I think if we aim our guns at the right target don't let Jimmy Carter slither off into political oblivion and the fact that he kind of personifies the culmination of 40 years of wrong policies that we can indeed a year from now have an even bigger freshman class and because of your commitment personally and that of the White House, a commitment that transcends anything I have ever known to returning Republican incumbents to the House. I think when the totals are added up we're all going to be very happy indeed and we thank you for that commitment. And now someone who has been really a stalwart in our administration who's worked as hard or harder so much so that I kind of get a guilty feeling when we get together, Vice President George Bush. Let me be, thank you Mr. President. And let me just make a couple of comments. One, we need your help on amending the Clean Air Act. I hate to inject a specific request but this is jobs, it is bipartisan. I know it's tough, the closer we get to the election because people, the environmentalists are out there dumping all over us on this but we need your help. The second thing is Lyndon Johnson. Trent gave you his favorite quotation, coming from Texas I'll give you mine and that is when things got a little bit rough, Lyndon said in his own inimitable way we can stand with the president or we can paint our tails white and run with the antelopes. I've cleaned that up for Lyndon but the great thing is Trent and Guy point out this particular class is not painting its tails white and running with the antelopes and that is essential. And the third point I want to make is that I want to give as much of my time as I can working with Ed Rollins, we are prioritizing to use one of our Higgs expressions, we're prioritizing the races. He's doing that so you'll get mad at him instead of me but I am gonna spend an awful lot of time in this fall campaigning for this class. I agree with Guy on the quality of the class and the quality of the challengers and I think that's what's gonna confuse the pundits out there who are going back by a lot of historical numbers and I do want to be of help. The president obviously with his schedule is not gonna be able to do as much as he'd like as a political traveler, he'll do a lot. But contact Ed if I can help you all in the fall, the summer, the spring or whatever and thank you for your tremendous support for this administration. Thank you George. Well now, I think it's time for a little dialogue and some of you may have some questions or anything in the room is just full of authoritative White House sources. So, fire away and we can have some, yes. Mr. President, will you be saying anything in the near term on the Constitutional Amendment to balance the budget? Yes, I'm sure I will, in fact I know I will. Frankly I have to tell you that in concept I believe that is the only answer to what has been happening to this country for the last 40 years. It must be tied however to a limitation on taxing power or you could just automatically balance the budget and I've never forgotten what Milton Friedman once said about that. He said, with all the talk about balancing the budget, he said we're ignoring the real problem which is the amount that the government is taking from the private sector. He said I would prefer a $200 billion unbalanced budget to a $400 billion balanced budget. So, yes, we will be and I think it is the only answer. Someone else? With the timber industry, so what, again, any interest rate forecast, not for complication or what are you going to do, short as all of us falling off the cliff with you to try and get those rates down? I think that's where we are. There's no question. That's the thing that's, well it's the thing that brought on the recession and the interest rates back in 1981 and the first part of that year did not follow the decline in inflation as they normally would and I think that had to do something with, at that time we were way below the money supply, the money growth too far below and then came a sudden spurt. They have been cut, they have to come down more and there is no, there's only one excuse for them being where they are now, lack of confidence in the money market. When you've got a 4.5% inflation rate, then you start with an interest rate that should add on top of 4.5% the return that you want on lending your money and that should have us down to nine, nine and a half percent interest rates right now. It is that lack of confidence after 30 or 40 years of what we've been going through, they just still don't believe that government will stay the course. They don't believe that we won't go back to the same old thing of pumping up the money supply for a quick fix and that'll bring up inflation again and we'll go through the same practice of roller coastering that's happened. Well, this is the eighth or ninth recession since World War II and always the fix has been the same and always the next recession is deeper, worse interest rates higher and so forth and inflation higher than the one before. This is the first inflation in all of those and that means that Congress has got to show unity with regard to cuts. It, you know, when it's made public that here we are, we've submitted a budget that's asking for what, $40 billion in further reductions and instead of even dealing with those, we find that four in the House, four subcommittee chairman are considering proposals in their committees that would increase government spending by from $33 to $36 billion. Well, this is what they're watching out there and they're thinking here we go again. Now, if we can come through with those cuts and I'm not averse to finding if we can that we'll not interfere with the incentive tax program that we've put in place. If we can find some areas of closing off tax breaks that were never intended in the original purpose of regulations and so forth for revenue, that too would help send the message and I'm open to that and that's why our fellows are up on the hill and listening, waiting for some other proposals. I make one last thing, all this accusation that I'm standing here inflexible and that I won't listen to anything. I'm listening, I haven't been hearing much. I, when the Democrats say to me, well, you know, we don't like this budget, come up with another one. I negotiated too long in a union to ever believe that. It's up to them to propose something which we then start coming together on a subject. The last time I think they were spoiled, 1980, you remember they said that to Mr. Carter and he ended up having presented five budgets to the Congress and we're not gonna do that. We presented what we worked on and thought was a good one but we're very willing to listen and if there's some more suggestions and more cuts, we'll go but that's the answer. We have to send a message and I do believe that before election time we're going to see some decline, whether enough or not, but we're going to see some further decline in the interest rates. Now all of those are before a task force that we have in the cabinet headed by Sam Pierce and he's looking at them so I can't give you an answer on any of those things. But the things we propose were mainly things in changes in regulations and the opening up of pension funds. There is $500 billion out there in pension funds that for the most part has not been invested in mortgages. We did free some of it recently but now we're going to try to make it available to union pension funds and of all kinds that they can invest in mortgages. We have an idea. Oh, well now that, down to you? About two weeks. Mr. President, I want to follow up a little bit on the interest question raised by our identity, Smith. And it's interesting that we talk about interest rates as we do, as if it's something that one group of people will decide to do. And I had a town hall meeting in Little County in West Virginia in Catton County last Saturday and we began to talk about interest rates. And I gave essentially the same comment that you just gave that the Wall Street bankers and the 16 or 17 trend setting banks have basically said they don't have any confidence in your program to, in the Congress, to follow through. A little farmer sitting back there in the back said, well, I think it's a shame when any group of people feel that they're stronger than the President of the United States. Mr. President, I agree with that and I would urge you today to gather your advisors around you and ask them what abuse of presidential power, if you want to call it this, that you can come up with. And I would remind you that one of your favorite men that you quote frequently, Franklin Roosevelt, had the Supreme Court Packing Bill at the time, the Wagner and Labor Relations Act was being considered by them. That a former president also went so far as to convene a grand jury to investigate steel prices before the steel companies rolled back their prices. I believe right now that it's time for you as the President, Mr. President, I say this in all humility, to gather those men together who don't have the confidence and explain a few things to them and ask them to get their interest rates down immediately, sir. Thank you very much. Believe me, we, it is something to talk about too. And I think that it's not a bad idea. Old folks are still very concerned what cannot tell them in our present. Well, if, you know, if you look at the plan, we have the task force that, of course, isn't going to come until after election. If we get discussing colas and so forth, that might be discussed. But I could assure you that there's not going to, we're not going to do anything that takes away from those people that are dependent on that program, other than there might be something in an adjustment there. But if there is, the only adjustment there would be the fact that the colas, as they have for many of the pension funds, have been way above what is the normal increase, even for the people who are working out there. But no one's going to suggest as an answer, removing people, social security, as a matter of fact, 1980, the budget called for social security about 122 billion. Our budget for 83 calls for 175 billion. So I think we can, we can stand on that. Let me just, if we've run out of time, let me just say a couple of things about, you know me, I'm addicted to anecdotes. I've been told. A couple of things that sometimes we may overlook. You're going to be going home, you're going to be talking to your people back home. And there is a drum beat constantly, as we know in the news, that we're throwing the people out into the snow to die, and that all of our cuts are aimed at destroying the things that help keep people alive. Some of the figures, I think, if they look at them realistically, they'll point to some program and the press, which is always looking for errors, commits a few of their own. For example, there are programs that we have shifted into block grants, for example. So they look and they don't see that program under that title, and they say, all these people, they're through, they're done. No, there's been a change of that kind. One of them, and I heard one of your compatriots, but on the other side of the aisle, in one of those one minute speeches while I was watching and not cheering, was going on about the college loan and grant program. And he was really bleeding for the young people of America that are going to be denied an education. Well, our program provides, there are the equivalent of 11 million full-time college students in the United States. That's it, 11 million. I say the equivalent, because actually in individuals, there may be as many as 14, but many of those, the extras are part-time students or students that are working and taking a class or two and that sort of thing. So to be the equivalent of 11 million students, there are seven million grants and loans in the budget for 1983. But one of the classic examples of this kind of drumbeat, one of the networks, and I won't name it and I won't name the young lady who did it, but she was on the air one night recently, and she said that our tax program was such that the relief for a person making $15,000 was only $10,000, it was only $120. She said the relief, tax relief for someone making $80,000 is $15,000. Now just stop and think of that for a minute. They're making $80,000 and they're gonna get $15,000 reduction in their income tax. Well, a little checking of the report upon which she based that story revealed that when the first place, the $15,000 was the average savings for everybody from $80,000 up, including all those people that are maybe making a million dollars a year, some of those baseball players that are signing those contracts and so forth. Now that was the first mistake, but then the second, actually the savings for the $80,000 person is $4,500 approximately, and they pay roughly today $23,000 something in tax. So that's a 15% cut. Now we've cut across the board at 25% of the marginal rates, but they're only getting a 15% reduction. But not this year, as a matter of fact, that's what they'll be getting that average after they've gotten the full three installments of the cut. None of that was explained, and as far as I know, they've never gone on the air to correct that and say what could be, what it should be. And the other thing is, if you have any questions any time about some of these and some of these terrible sob stories that come out that we're doing this or that, give us a chance, get back to us and give us a chance and we'll give you the information on them because our increase in social spending it is just that. We have not yet. There may be some individual programs that have been cut back or eliminated because of they weren't doing the job or we have found a better way to do it, but basically on social programs, we're still spending more than, or we'll be in 83, then we're spending in 82 and we're spending more in 82 than we spend in 81. So what we have done, our cuts are all in the area of the increase in spending. I want to tell you, and I'll bet you've got the same appetite, I'm just dying, wants to really give them something to squawk about and be able to stand before the people and say, we have reduced the budget below what it was last year. Okay, thanks very much. You do this. Thank you for including agriculture in your recent couple of references and the plight of the agricultural economy. Keep it up. There's farmers behind you. I need a little more attention. To make interest rates in the area, we probably will. It's an annual thing with that. I wrote a plan for you. Any back? I don't know who's present. Pleasure to be here. With you, all the way. I'd like to get one, too, if I can. Give him one more. You did. Hi, how are you, Rodin? Good real well. Take care. Say, do you know that today's the day I go to... Yes, I know. ...to Hilton and speak to the same group? This is the oldest suit I've known. Take care. Hey, good to see you. Play on that as much as you can. Okay? Okay. Thank you. This is a terrible imposition, but I promise myself. Would you just put the Jimmy here? Jimmy? Sure. Thank you so much. You bet. Okay. All right. Thank you, Mr. President. Hi. All right. Hello. Thank you. All right. Thank you. Could you show me that? Yeah. Do you want it on the back? Yes. Well, fine as well. Keep up the good work. Thanks. Thank you.