 Ladies and gentlemen, the President of the United States. Welcome, Mr. President and Mr. Vice President. My colleagues, it's my honor to introduce the next speaker of the House of Representatives, Bob Michael, our leader. Well, thank you very much, Jack, Mr. President, Mr. Vice President, members of the conference. In keeping with the President's policy that has been his ever since I've known and would be President, in thinking of Pennsylvania Avenue as a two-way street, that he and we up here on the Hill have a shared role and responsibility in governing this country. So he comes today with an important message for us here in the conference, not only for us in the conference, but for the American people. And therefore, it's always with the highest honor and privilege that I present to you, the President of the United States. Thank you very much. Thank you very much. Well, Jack and Bob, I want to thank you very much for this opportunity and making it possible. I've come down here to talk to you about our $150 billion down payment. And try and, if I can't express the importance that we place on it, how essential I think it is that we all stand together in this particular time. And I would like to come in at the same time. Bob Michael and Trent Lott and Silvio Conti and Barbara Conable and Del Lata and their colleagues in the Senate for our coming together as we have on this $150 billion down payment, working together. And we did have consensus on this. I think we have to remember with all that's going on, where we were three years ago, the inflation rates, the interest rates, the economy that had faltered so badly. Everyone seemed to think that when the bottom kind of fell out a little further in July of 1981, that that was the recession. They're forgetting a little bit that some of us campaigned in 1980 in areas where unemployment, unemployment was over 20%. I remember being castigated by some because I referred to the situation then as a depression, not a recession. And when they took me on and said that technically it wasn't a nice, if you will remember, I said that a recession is when your neighbor's out of work and a depression is when you're out of work. And there were a lot of the people I was talking to who were out of work. But I promise you that in this, we're not going to play politics with the economy. And we're not going to take risks with our national security in what we do with regard to the defense budget. But today, the change that has come about in these three years, I've had some letters recently from well-known, nationally known economists who have criticized me for continuing to refer to what we have today as an economic recovery. They said, we are past recovery. This is economic expansion. Well, the latest figures for this quarter are 7.2% growth in the gross national product. There has never been a recovery in the seven preceding recessions since World War II of that level. But at the same time, I don't think it's overheated. And I think it's a solid one because it's been based on solid practices. It hasn't been a quick fix with flooding the money market and artificial stimulants of spending programs and which we know seven times previously resulted in another and worse recession just two or three years after the one that we had come out of. Our package calls for $43 billion in domestic savings. It calls for $57 billion in defense savings. This is in authority. I'm not talking now the outlays, I'm talking the budget authority. And it calls for $48 billion in increased revenues. Now, let me hasten to say this does not represent a tax rate increase. This is finding provisions in the tax laws and some loopholes which we would be justified in closing even if there were no deficit to be handled. But this is a down payment, $150 billion over three years. At the same time that the Treasury Department is going forward with a study on how we might be able to simplify and broaden the tax base and even be possible to reduce the rates at the same time. A tax program that possibly could catch that $100 billion in revenue that is now being denied us and that is legitimate revenue because it is people who actually owe the tax and are not paying it at all. I will tell you now that if anyone sends to me the tax package of this 150 and has not given us at the same time the spending cuts I will veto the tax package. Now we believe that all these things are possible but we also believe that then with the Grace Commission reports that we have and incidentally some of those Grace Commission recommendations are responsible for some of the cuts that are in here including in defense. As a matter of fact, Kepp Weinberger and his team cut $16 billion out of their proposed budget. Some of it was Grace Commission findings that they found could be utilized before he delivered the first budget to us in which our group now, the Republican group of representative senators and we have the administration. He had cut that much and then we further reduced that but with his he was a part of the negotiations and he agreed that we could do it. Now we have to say it does slow somewhat what we think is necessary for national security but not to the point of an unavoidable or to a risk that we can't take. It is not that much of a risk and with the necessity of getting control of the deficit. Now let me if I can just touch on something else with this deficit since it seems to be becoming a campaign issue already and I'm a little astounded at how far out in the limb some of our opponents have gotten with this campaign use of the deficit because are we to forget that for more than 40 years they have dominated both houses of the Congress and for more than 40 years deficit spending has been a deliberate part of their policy. How many of you when you tried to protest heard in the past that we didn't have to worry about the national debt we owed it to ourselves and the deficit spending was necessary and a little inflation was good for us also would maintain prosperity and those of us who kept saying it will one day catch us and the bottom will fall out. Well it has happened. Now about half the deficit the estimated big deficits were the result of that further dip plus what had gone before in the economy because half of the deficit is cyclical. Now that is the part that is shrinking right now. The other half is structural and you and I know it. It was built into government policy. You didn't have to each year increase spending or anything. It was automatic and it'll be automatic and keep on going unless we do something about it. So once this down payment gets in place that doesn't mean we're finished. No, we're going to go to work and I hope it'll be a bipartisan study of what can be done to make the structural changes that must be made to let us control deficit and deficit spending. How can they claim that they we are the ones that seemingly want deficit spending when for two years we've been asking for a constitutional amendment to prohibit deficit spending by the federal government require a balanced budget and they are the ones who are opposed to it. Now I still believe that we should have that amendment to the constitution. Granted we would have to point to a year of implementation that we could foresee with what we could legitimately do without causing chaos and disruption in bringing government spending down to the level of government revenues. And that we will proceed with and with the 2,500 recommendations of the Grace Commission they will be a part of our study what we're going to try to do. But let me just point out some things. Recently the figures were thrown at us that poverty has increased and the period they chose to say that it increased was from 1979 to 1982. Well, we weren't here until 1981 and 1981 we were still using their budget and their spending policies because you come in in the midst of the fiscal year. The truth of the matter is we started an increase in the number of people living in poverty back in the late 60s and early 70s when the great society the war on poverty actually was implemented and got underway. And rather than decreasing poverty it increased the number of people that were declared in poverty. 1974 and many of you participated in it there was a budget process that was passed for us to get control of the budget. And from 1974 when that was passed until 1981 the deficits totaled $560 billion on top of the almost well that made the almost of a trillion dollars that was here when we came. Now, I'm saying all of this to you and I know that you agree because. President Mike has gone off. What? Somebody touched the mic out there. Judy. What? I think somebody touched the microphone. You mean this went off? Yeah. The speaker is in charge of this room. Well. Is it back on his? I was just gonna say that. Well, I'll just talk louder in cake. There it is, all right. Well, again, I think if we all stick together and if we recognize that we're not being unfair that we're feeding more people today who are hungry than have ever been fed. We're providing more food stamps. We are sending more young people to college. 40% of the people going to college today are going there with the aid of federal grants, loans and so forth and say ran the gain up. In other words, all of this talk about fairness and unfairness, they who want to cancel as an aid to curing the deficit want to cancel the tax indexing. And they say that would be fair. Well, maybe you'd be interested in knowing that we figured out what would happen. The tax penalty in canceling the index would only amount to 2% additional tax for people at $100,000 a year. It would amount to a 9% tax increase for people at $10,000 a year. If you're already in the upper brackets, indexing doesn't do anything for you. We're trying to help the people that are down there. The cuts that we've made in many of the social programs have been cuts in administrative overhead. I came here with the knowledge as previously having been a governor that there were a number of the social reforms here in which it cost the federal government $2 to deliver $1 to a needy person. And these are the things that where we have been trying to cut and trying to bring some sense into government. And it's what we're continuing to try to do. More people are getting food stamps today than have ever gotten them. But there are 860,000 people who were getting them that are not getting them because we found they morally had no right to them. Their income was above 150% of poverty. So we've got a story to tell and I hope that we'll get out there and tell it to all of the people in this campaign. And it's a story in which 12.4% interest or inflation rates are not fair to people at the bottom of the economic ladder. But I think that not completely out of it, but 3% and right now only around 4% rates are a little more fair than 12.4. And this is what we've been achieving here. We have a solid recovery on its way. Let me just give you a couple more figures and I know I've gone over my time here and I have to let you go. But let me just tell you that the automobile industry, the industry as a whole now has 83,000 more people working than we're working in that industry when we came here in 1981. Their unemployment rate, believe it or not, in that industry is now only 5.9%. It's contrasted to the general average of 7.1. We could go on with the figures of that kind, of the housing starts with the fact that on the cyclical part of the deficit, the further help that we're going to be that in the last 15 months we've put 4,900,000 more people into jobs in this country. Now that hasn't had time to have really the impact only the first ones for the first year, but from here on to have almost 5 million more people, many of them no longer wards of the government not getting unemployment insurance and food stamps and things of that kind, but working and paying taxes. We can see that the cyclical part of the deficit is being taken care of. When we last August told you that it looked like the deficit was going to be a little over $200 billion and now it comes down to about 185. Do you know how that happened? We couldn't even project back then what the recovery was going to be and then we found out that we got $15 billion more in tax revenues from the reduced rates than we had anticipated just a short of time ago as August to January. So if we will stick together on that other part, the structural reforms that are needed, I think we'll find it's not only good government, it's good politics. Thank you very much.