 President of the United States, Ronald Reagan. Thank you very much. Thank you. Thank you very much. Thank you. Thank you. Thank you, Bob Highland, Governor Bond, Senator Danforth, the representatives of our house who are here, the other distinguished guests, you ladies and gentlemen. I didn't know I was in the movie until the last scene came on, and then I couldn't clap. But believe me, I do applaud that picture until that moment. It was beautiful. And I would have enjoyed it even more if I wasn't the one who had to follow it with a speech. Those pictures, the words, and the music that touch our hearts, and I believe they capture a feeling that's very much with us today. The spirit of St. Louis is alive, and that's the spirit that will rebuild America. It's a great privilege. It's a great privilege to stand before your group. I've always believed that entrepreneurs are the forgotten heroes of America. In your dreams and in your courage to take great risks, rest America's best hopes for more jobs, stronger growth, and a higher standard of living. Two of every three new jobs are created in firms in America with fewer than 100 employees. If we're to remain true to America, we must preserve and enhance the possibility for every small businessman and woman to make it big. Just one week ago I addressed the Congress, and I told them that thanks to the courage, the patience, and the strength of people like you, America is on the mend. And one of the networks following that speech did a telephone survey to find out if the people felt that way. Well, 73 percent of your fellow citizens said yes it was. Well, we still have a mountain of challenges to surmount, but the evidence of recovery continues to build. Leading economic indicators are up. Eight of the nine last months. Housing starts and permits are up. Real wages are growing. Auto sales are strengthening. Construction contracting is rising. Unemployment claims are heading down. And there's one more venture capital, or one more figure I should say venture capital. Investments in the development of small businesses have actually reached in this time of recession record levels in our history. Sometimes statistics seem mighty impersonal. Well, today I saw a different kind of proof, the kind that warms your heart and gives pause even to the most hardened cynic. I've just come from that Chrysler plant at Fenton, and I can report to you the men and women are back in the job. They're moving cars off the line. They believe this great nation is on her way back to the top, and they're right. General Motors and Ford are calling back workers and creating jobs too. By some estimates, auto employment here could increase up to 71 percent here in the St. Louis area by next August. What a shot in the arm that would be from Missouri's economic growth. We're beginning to receive the payoff that we've all been waiting for. The reward for painful but essential steps to cure a disease that was crippling America and undermining our security. This is not a fashionable idea in some parts of Washington, but the record inflation, interest rates, and taxes of 1980 were caused by a government goliath growing too fat, spending too much of your money, and only the people were saying, this has got to stop. There seems to be a little confusion about a sentence I used in my State of the Union speech last week, that we in government must take the lead in restoring the economy. Some people seem to think that I was advocating a return to the old ways. I didn't mean anything of the kind. What I meant was, government was largely responsible for creating the economic mess of recent years. Now it must recognize that and start undoing the damage it has done. We have a plan for America's future. It isn't easy and it isn't quick, but it will work because it's designed to attack problems at their roots rather than pretending to legislate them away with still another quick fix. We had to take the lead in bringing down and we have brought them down from 21.5% to 11% and we're determined to do better. We must do better and get them down further. We had to take the lead in doing something about runaway regulations and smothering enterprise. So we're pursuing a long-term program to deregulate key areas of the economy. By next fall, Americans will spend 300 million fewer hours on government-required paperwork than they were doing just two years ago when we took office. The bureaucratic monster who would slay private enterprise is being taught a new command. It's called HEAL. You are still forced to spend too many hours on government forms, but we're continuing to work on that and we're going to get a few hundred million more of those hours done away with. We had to reverse the dangerous decline in savings and investment choked off by higher and higher taxes. Well, all personal tax rates are being reduced still 25 or another 10%. It'll be a total of 25%. The first real reduction in nearly 25 or 20 years, and this is especially important for small businesses which are mainly self-proprietorships and for encouraging venture capital. We're raising the estate tax exemption for family farmers and family businesses to $600,000. Of even greater help, there will no longer be any estate tax for a surviving spouse. And beginning in 1985, tax rates will be indexed to protect people from being pushed into higher tax brackets when they get cost of living pay raises. Let me say that I will fight any move against the third year of the tax cut or indexing. They must go into effect on schedule. Without that final tax cut, that final installment, Americans will shoulder a higher tax burden than ever before. And repealing indexing, well, indexing is just sleight of hand. Or I mean not indexing as sleight of hand inflation is. Rather than bringing spending down closer to revenues, governments simply raised revenues the sneaky way. It used inflation to push every working family in America toward higher and higher tax brackets. Ironically, they call this progressive, compassionate, and fair. It reminds me of Samuel Johnson's comment about a fellow who couldn't see the difference between virtue and vice. And Samuel Johnson's advice was, when he leaves, count the spoons. Must the people always do with less so government can spend more? Or should government hold the line so the people can save and America can grow again? We aren't reducing tax rates in 1981 and 82 and 83 just so we can turn around and raise the rates in 84 and 85 and every year after that and do it by way of indexing without anyone having to pass a tax bill. There will be an attack that we believe they should end. This is particularly true of the indexing, but I say that not indexing, government has made a profit on inflation and there is no way that we should permanently leave in place an incentive for government to again stimulate inflation in order to increase its own revenues without having the nerve to pass a tax bill. Lowering the tax burden is vital to our strategy for lasting growth through greater savings, investment and production, and that strategy is beginning to work. Those who would destroy the incentives to reduce projected deficits will instead sabotage recovery and make deficits much worse. So again, we in government must take the lead with a genuine recovery budget. First, we believe that federal spending in 1984 overall should increase no more than the rate of inflation. Our budget includes the six-month freeze and the cost of living adjustments recommended by the Bipartisan Soldier Security Commission. We are also requesting a spending freeze on many federal programs, including a one-year freeze on federal pay and pensions. I hate it a little bit to do that with regard to the military, because they for so long have been in a starvation diet and we finally were just getting their pay scale up somewhat commensurate with what our men and women in uniform should get. But the other day on television, I saw a sergeant over at Fort Myers. They caught him out there on the grounds and asked him how he felt about having his pay frozen. And he said, well, I'd like like anyone. I'd like to get a pay raise. Then he said, if the Commander-in-Chief says that that's necessary to make our country better, I'm for the pay freeze. Having access to a few phone numbers, I couldn't help but call him and tell him how grateful I was and how proud I was to have him in uniform. Well, many of the people who pay the government's bills have already endured tremendous hardships themselves. And that's why I feel that we can ask others, those in government, to sacrifice too. People who work in the world of risk have no guarantee of profits, income, cost of living pay raises, or indexed pensions, let alone a job. Yet they're the ones who must produce the abundance to fund the government programs which keep America strong and assist those in need. Second, you've all heard that much of federal spending is uncontrollable. These are the automatic spending programs, called entitlements. They have a built-in cost increase. Well, in our budget, we propose basic structural reforms in those programs. We will insist on fairness. Those in genuine need will be protected. But if we receive bipartisan support, what used to be out of control will be finally brought under control. Third, we're adjusting our program to restore America's defenses by proposing $55 billion in defense savings for five years. I share the desire for defense savings and I'll continue to seek them. But our armed forces were neglected for more than a decade while the Soviets forged ahead. With the most massive military buildup in history, we cannot negotiate strategic arms reductions, which we're trying to do with only trust and goodwill. Americans will no longer tolerate just a facade of security. They expect our planes to fly, our ships to sail, and our helicopters to stay loft. And only a few years ago, we couldn't guarantee that they would. Yes, defense is expensive, but how much would we have spent to avoid World War II? Who will put a price on the lives of our soldiers lost at Guadalcanal and Tarawa, Omaha Beach, Anzio, or Bastogne? It's my duty as president and the duty of all of us as citizens to make sure that America is strong enough to remain free and at peace. There have been four wars in my lifetime. We didn't get in any one of them because we were too strong. Finally, our budget does propose a standby tax that would not start until 1986, but would only start if the Congress had already passed our spending and budget control program, and only if the deficits still exceeded 2.5 percent of gross national product and only if recovery from the recession was fully underway. I personally believe that economic recovery will make this standby tax unnecessary. In the meantime, this is our way of protecting the tax cuts and indexing that we've won for the American people, and I think it will reassure many of those out in the money markets today that we do mean to control inflation and interest rates. Now, before I take your questions, let me just mention a few other initiatives where we're taking the lead to assist small business and encourage greater growth. I've had the privilege of signing three pieces of legislation, a special... Prompt payment legislation requires the government to pay its bills promptly or pay interest penalties. The Export Trading Company Act of 1982 will increase U.S. exports and jobs by encouraging the formation of export trading companies to serve as intermediaries for businesses in the international marketplace. It's time to start increasing American exports and to stop exporting American jobs. The Small Business Innovation Development Act provides mandatory set-asides from the existing federal research and development budget. This will allow small business to participate more fully in research efforts for our nature's future. For example, during the current fiscal year, this program will direct some 40 to 50 million dollars to small, high-technology firms for innovative research and development. By 1987, the program will provide nearly half a billion dollars to small business entrepreneurs for high technology, new products, new ideas, and new jobs. The private sector is providing strong leadership here in St. Louis. I understand that Monsanto is giving the single largest corporate grant to any university ever for high-tech research and development, about 25 million dollars to Washington University here in your city. To strengthen our firms to compete more effectively, to better mobilize the tools and resources of science and technology, we are creating a non-partisan commission on industrial competitiveness to make specific policy recommendations. So I'd like to ask you today please lend us your wisdom at all the time you can to spare, that you have to spare, and we'll make good use of that time and your ideas. We're a society that's in transition. Those who are hurting need help. We'll provide it. Yet we must keep our eyes on the future and step up our efforts to train today's workforce for tomorrow's world. We want America to remain in the forefront of the technological revolution. We have great hopes for the Landmark Job Training Partnership Act that was passed last year, and we very much admire your strong commitment to training and job creation through organizations like OIC, the Metropolitan Reemployment Task Force, and the Say Yes program. We're submitting to the Congress the Employment Act of 1983 designed to get at the special problems of the long-term unemployed. We'll propose extending unemployment benefits and special incentives to employers who hire the long-term unemployed and young people seeking summer jobs. One of my great regrets last year was our inability to get our Enterprise Zones proposal passed by the Congress, and we'll be pressing hard for it this year. But your fine governor, Kit Bond, he didn't wait. He helped Missouri become one of the 11 states to pass its own Enterprise Zone proposal. Since I used an old-fashioned word a few weeks ago that caught the press by surprise, I'll say he didn't wait for the government to get off its keister. Speaking of Kit Bond, he played a major leadership role in shaping the Small Business Revitalization program together with the Small Business Administration and HUD. Already 21 states led by Missouri have become active partners in this program. It's been estimated that this effort could result in billions of dollars for community development and the creation of thousands of new jobs as federal, state, and private resources are brought together. We're a country with great problems, but we can solve those problems because we're a good people. From coast to coast, on the job and in the classrooms and laboratories at new construction sites and in churches and community groups, neighbors are helping neighbors. They've already begun the building, the research, the work, and the giving that will make America great again. Thank you for being Americans like that. Thank you for the spirit of St. Louis. I have no ambition higher than to prove worthy of the standards that you have set. God bless you all, and I think I'm supposed to take some questions in the time that remains. Mr. President, we welcome you to the Town Hall Forum, which has become a part of the RCGA program. We have two microphones set up, one to your left, one to your right, and we'll ask people to come up and ask their specific questions of you. With your permission, sir, the first one, which may be a composite of a good many small businessmen here. With the budget deficit projections of a couple of hundred billion for this year, 188 billion for next year, and the subsequent competition for the funds for the federal government. What kind of help, if any, can you offer small business for access to what's going to be left in that available capital pool for their own expansion, their own inventory? Anything at all? Well, for one thing, let me say that already the increased rate of personal savings has increased the amount of capital, private capital, capital pool, which should to some extent offset government's increased borrowing. I wish I could give more of an answer than that for these next two years, but we do know that we're pretty much bound in by these two deficits. The recession is certainly responsible for probably half of those deficits, and a large part of them then is the thing that I mentioned of problems that built in unreducible things, but which we're starting to reduce. I can tell you that our projections call for as we get beyond 84 for a decline, and a rather steep decline in the deficits on out through 1988 that would take it considerably down and leave that capital pool available there. And I think with this next tax increase, what we're tax cut, what we have already seen in the increase in personal savings rate, which has amounted to billions of dollars, tens of billions of dollars, will further increase that so that government won't have a monopoly on that available capital. Thank you, Mr. President. Would you direct your attention here, sir? Your question, please? Mr. President, my name is Lane Jumper. I represent the Times Beach Businessman's Association and I think I come from the single most depressed area of small business in the United States of America. The question we have for you is three parts, basically. One, is there anything that you can do to help the small businessmen recover on a short-term basis from the double whammy of both the flood and the docks and the contamination situation in the Times Beach area? Two, would you be willing to allow delegation from Times Beach to speak with you on the long-term solution to the terrible problem we have in Times Beach? And three, would you be willing to appoint a citizen from Times Beach to your special task force that did to deal with the Times Beach situation? To the third one, yes. To the second one, I think that I've been kept pretty well aware and abreast of the problem that I know is there. Let me just say about that, that we are, as you know, and in response to your Governor's request, we have named out of all the bureaus and agencies that could be involved to get by some bureaucratic entanglements. We've named one man in charge of the federal effort and working with the people of the state and the local level there. We have finished taking the samples with regard to the possibility of dioxin, one of the most toxic matters that we know of. We've taken those samples. We have tripled now the number of laboratories that are now running the tests to make sure if there is a threat and the extent of the threat, both in homes and in the area and the open spaces and so forth, of that area. I know what it did to your business with regard to having to close that area and put up the barricades, but I don't think until we know the threat from that dioxin, I don't think we could have done anything other and been responsible interaction if we had not said that people must avoid that until we know what the effect can be. With regard to small business and others we declared that an emergency area as we did again at your governor's request we that makes a small business there available for small business administration loans at the considerably lower rate of interest and we'll do what we can. We have also we're housing about 80% of the people they were the only ones who requested it. Some others have either returned to their homes or are living with friends or relatives. We're doing everything we can and the community cooperative project that has been in the planning we are expecting that to be completed four days from now February 5th and we are expecting also to be hearing the results of the other problems I mentioned before the month is out we're working as fast as we can on that and incidentally as I saw a clipping on paper that I was supposed to have received a letter about this that was never answered I've had everybody combing through everything we never received the letter now whether the post office is to blame or not I don't know but we didn't get the letter I have Mr. President may I express our appreciation for your diligence and perseverance to final passage the five cent federal excise tax on motor fuel and may I tell you that here in Missouri we're already putting it to good use in expectation of these added funds last Friday bids were received for about 45 million in construction work on highways and bridges and like amounts will be received will be committed this month of February and next month in March and very shortly many of our citizens will be back at work on these important construction projects and shortly after that those of us who use the highways will be benefiting from the improvements which were much needed the attractive feature of this whole thing was that it was a user fee and funds are provided by users now a moment ago you referred to the concern about the federal deficit and many of us are terribly concerned about that we also want to be given to other user fees which will in part offset federal expenditures but there's right now any plan for anything of that kind the I know there was a great deal of talk and criticism that the five cent gas tax that I had gone on record is saying it would take a palace coup and I would approve such a tax I did say that but I said it and answered a question in the back at a time when they thought or they were talking about using it simply as to raise general revenues our secretary and now former secretary Drew Lewis of transportation had come to me more than a year ago with a review of what was we were up against with regard to the highways, the deterioration and the bridges now and make the children get out and walk across because they consider it too dangerous dangerous to carry them across and so forth I at that time had to say Drew can you come back next year bad as it is and he did and we approved it as you say as a user fee just a few weeks ago in Illinois a group of road builders met with me and gave me a hard hat which I expect to use in my dealings with congress this session he but they were saying the same thing you are about how many jobs already are in the works because of this program and I view it as again a user fee that when it is no longer needed for the purpose it was passed then it should be repealed so I thank you I I would have to look I don't know how far we can go in that without offsetting the incentive feature of the tax cuts because when you're in a recession there is no question that more money to the people in the private sector is a necessary incentive so I would have to review any further ones as against the need against what they might do to reducing those incentives may we have your question for the president please Mr. President given the scenario that we have a nation on the mend and that we also have very high national deficits do you feel as we move into 1984 that we will be able to maintain the same relatively low level of inflation and low interest rates that we have today yes I do I think the only thing that is keeping interest rates up today is fear those in the lending market know that they have to get back enough in interest to offset the depreciated value of the dollar which is inflation and they are watching us very closely to see if we are going to stay the course or if we are going to go back to that era of quick fixes that always resulted in more inflation and then interest rates following them up this is particularly true of long-term lending my goal is to eliminate inflation I have made speeches out on the mashed potato circuit for about 25 years and back when inflation was only running at about two or two and a half percent a year I used to warn then and how many of you will remember that the people that were deliberately putting that inflation in it didn't come down upon it's like a plague of locusts it was planned and they said it was part of the new economics that it was necessary to maintain prosperity well I said then and I say now that inflation is like radioactivity it's cumulative and sooner or later it gets out of control and my goal is zero inflation and then let interest rates be honest just one last factor also as to why I don't believe that it's necessary as we begin to get return prosperity for inflation to go up is when you've got a full third of the industrial capacity of the nation idle that much capacity it's difficult to see how suddenly a demand on the part of consumers for more goods and product could thus by supply and demand cause inflation cause prices to go up we've got a long way to go before we reach full capacity of industry may we have your question please sir Mr. President my name is Jim Walsh the Vice President of Jefferson Savings and Loan who indicated that you would resist any of the efforts of Congress to abolish the 10 percent withholding law that's going to come into effect can you choose to oppose the wishes of 90 million Americans or small business people and small savers now wait a minute I think I've I can only recall speaking are you speaking about the 10 percent tax cut that goes into effect July 1st 10 to 10 percent withholding of interest on dividends that will become effective July 4th in all financial institutions yes I know now I know that that was very unpopular with a lot of people and they think that it is a way of taxing people on their savings and so forth but what we have discovered is that one of the largest areas of avoidance of tax is in that field that the this has been the biggest loophole whereby people just simply do not pay a tax they legitimately owe and the it's virtually impossible even in a computerized age for the Treasury Department Bureau of Internal Revenue to be able to track this down so we pass this but I would like to call to your attention that there is a very definite level above which that withholding will take place and that for most of the people and certainly most of our retired people who are dependent on savings and the income from them there is no withholding we put it at quite a high level but it was done for that reason alone that there definitely is a large amount of tax that is owed to the government that is not now being paid Mr. President I have been signaled we have time for one more sir because of your schedule over here if you will my name is George Thorne to be here to speak to the President of the United States and the only thing I want to say to you is I don't live in Russia God bless you thank you Mr. President thank you very much that was one of the best questions I've ever had to not answer but since that wasn't a question and since we started on that side I think it's only fair that we make it even and we finish with one over here like a sergeant you're the commander in chief yes sir go ahead your question please Mr. President my name is George Matty I am Executive Vice President of Lindberg Cadillac company here in downtown St. Louis on Sunday evening right in this very auditorium the automobile dealers of Greater St. Louis completed a five day show where we set new attendance records for this convention center at 180,000 people who paid an average of two and a half dollars to see or 60 were sold right from the floor here however on another subject aside from merchandising Cadillac cars I am a worker in the pro-life anti-abortion movement I can assure you that many citizens voted for your pro-life position can we now count on you to use your tremendous powers of persuasion to unite our pro-life members of Congress behind legislation that will stop the killing of the unborn thank you Mr. President yesterday yesterday afternoon I spoke to an audience of this same size 4,000 people in Washington and pledged to them that I am going to continue to do everything I can I realize this is highly controversial I realize that there are people who sincerely and honestly believe that it is an unwarranted infusion in the privacy and the right of choice of women who may choose to go that way but I have to feel that until and unless someone can prove beyond shadow of a doubt that the unborn child is not a living human being then we have to opt in favor that it is alive and it is killing to do what is being done today and that we only condone in self defense thank you Mr. President thank you all very much I'm sorry that I talked as long as I did I'd rather do this for the whole period than try to make a speech first but again I just want to say to you I think I'm going home more rewarded than you because being out there in that plant meeting the workers today seeing what's going on, hearing things like those first few words there about what happened here with the increase in sales and all and seeing all of you I'm going back to Washington convinced more than ever that there isn't anything the people of this country can't do when the people get together and decide it needs to be done thank you again and God bless you thank you Mr. President Mr. Howard Mr. President, mere words can't really express our gratitude you coming here to St. Louis today we have a small token of our appreciation for your appearance here it's a symbol of our great country, a Stuban Eagle which we'd like to have you take back to the Oval Office Ladies and gentlemen would you all please stay in place as the presidential party leaves thank you very much, please stay in place