 which are not normally considered defensive weapons, all of these things are indications that they have not only carried out and are carrying out, with an enormous amount of momentum behind them, the largest military buildup in the world's history. And then you have to contrast that with what we have done. And that is why the President has wisely assigned such a high priority to the rearming of America, because we have sputtered along and started and stopped, and every time you do that, it makes not only the process infinitely more expensive, but it makes the process infinitely slower, and it usually means that you cannot catch up or get the degree of military strength that can deter aggression. You know, a lot of people have assumed that, or at least they have written that we either have no plan or no strategy, or that we are simply buying everything and have no selectivity about it or no priorities, and somewhat perversely, the same people say that what we're doing isn't increasing our strength or adding anything to what the Carter administration did. I think all of these are demonstrably wrong, but again, they're an indication of the fact that we are not going to have an easy time maintaining the present national constituency for increasing defensive strength, that the President has fashioned as one of the finest examples of his leadership. It wasn't really until the campaign last year that the American public began to swing around to the idea that we did have to end these years of neglect, that if we continued with them, it would be very dangerous for ourselves and for our allies and for the sake of freedom, and that it was vital that we start moving forward and that we keep on moving forward, because it's the momentum that is so vital. The Soviets are now taking delivery of all manner of things that they ordered and procured in the mid-70s when we were not, and they are going to continue that because they are continuing to order them. In this catch-up process, the margin for error is very small, and the stakes are nothing more or less than the survival of freedom in the world. So that it is vital that we not only start as we have, and we've made, I think, a very good start, and the President's leadership has been firm and unremitting in this, and we have as a result a major change of perception around the world as to the goals and as to the strength and resolution and will of the American people, and that is a very vital part of it, because we were beginning to be perceived not only by the enemy as comparatively weak and irresolute, but by our friends and our allies as a nation that was not a very reliable ally and not one that could be depended upon to maintain a steady constant course that is so essential in this field, and that's part of the problem we have today. In a lot of the international meetings that Al Hague and I have to attend on these different kinds of subjects that you run in constantly to the idea that we tried to rely on you before and found we couldn't, and why should we now, and things of that kind that make the whole business of re-arming America so very much more difficult. But what has been accomplished in this year? Well, we have for one thing for the first time since the strategic forces were formed, a program that will not only modernize them, but will strengthen them enormously and add greatly to the deterrent power and force of America. The president has secured congressional approval of a very comprehensive, interlocked, mutually supporting five-point program in which we will recover the strength and modernization of all three parts of the triad, our bomber force, our ground missile force, and our submarine launched missiles. He's also for the first time recognized a critical deficiency that has run through all of the programs that we've had in the past few years, and that is this technical problem of command and control. It's a technical problem only in the sense that it seems a little difficult to understand, but it's an actual problem when you realize that if you don't modernize it and don't make it survivable and strengthen it, you can't operate any of the systems at all. So it's a technical problem only in a technical sense. It is an enormously important part of it, and it's a part that has not thus far really been sufficiently recognized as the most vital part really of the modernization and reorganization of our whole strategic forces. And he also has included a substantial amount in this for strategic defense. Now in all of this we hear a great deal about the enormous cost of this program, and it is a very costly program because not only did we have to modernize and strengthen and bring up to date all parts of the strategic forces at once, but we also had to improve and strengthen and make ready our conventional forces, make ready what we had and modernize and strengthen and increase them because not for any desire simply to have the biggest or the best in the world, but again, if we want to maintain the peace, the only way we're ever going to be able to do it is to have the degree of strength that will deter aggression, and this includes both conventional forces as well as strategic forces. And so the president embarked on that. Consistent with his promise to avoid the draft and maintain the all volunteer system, the first thing was quite apparent to all of us that looked at it was that we had to do something about morale. Morale was justifiably extremely low, and the reason it was extremely low was not only had the mood of the nation been allowed to slip into a feeling of not only neglect, but almost contempt for people in the armed forces, in the uniformed services, or people who served the department in civilian capacities, and this was reflected in the really disgracefully low pay and wage scales. You know that during the four years of the Carter administration, the net change in real terms in pay and allowances was minus 0.1 percent. During all that period when inflation was rampant, that was what we were doing to the people who served us in the uniformed services. During the first year of President Reagan's term, that has gone to a plus 5 percent, and that is in real terms after inflation. Now, some people say, well, that was a huge pay increase. Well, it was a pay increase, and it was a much-needed and deserved pay increase, and it isn't the only factor, however, that has improved the morale to the point where we are now recruiting and enlisting all of the people that we can possibly take under all of the funding that we've had from Congress, and why we're getting not only all those people as an enlistment in the first time, but we're attaining many more in the service. The percentages have jumped dramatically in this year, 1981, and also the educational achievement tests by every measure show that the people we're getting now are very qualified, very competent, and all by a volunteer system. So the pay had something to do with it. Mostly it was the President's leadership in changing the mood of the country, so that now, again, military service is a respected, admired, and honored, and needed profession, and so treated, and the people in it have that kind of improved morale that comes with knowing that you're doing something important that is wanted, and needed, and appreciated. What else has been accomplished? Well, a very substantial additional thing has been accomplished, and it is vital that we do it, because if we don't, we are not going to be able to maintain this national consensus that now exists in the Congress and in the country for improved and strengthened defense, and that is to do it as economically and efficiently as possible. With all of this enormous increase that we've had, and with the largest military pay, not only military pay, but military appropriations that passed the Congress by enormous margins this year, we have identified some 31 billion dollars in savings over the next six years. We've done it through a whole series of management improvements, which Deputy Secretary Carlucci and all of us in the department have been working on, and Frank has done a magnificent job in identifying and producing a great many of these savings and these efficient operations. We have established some 4.4 billion in savings identified that we can see in the next few years just through the more efficient management of the programs. We've made almost 10 billion dollars in straight program reductions in one year that will echo out, so to speak, in the out years and build up to many more. And some 17 billion in various other restraints on retirements, civil service, and other special features that cut across the whole government. We've established the hotline within the department that produces a very large number of calls out of which we identify nearly 30, 35% of some very excellent suggestions that get us into a lot smaller amounts, but nevertheless have eliminated a lot of the things that people frequently pointed to as waste or fraud or abuse. And perhaps most important of all in all of these savings that we're trying to make and it's a difficult thing to demonstrate to the American people because you have a situation in which you're never going to be able to show a net minus for the department. There was too much neglect and it takes too long to rebuild and it's too costly to rebuild to ever have anything except large increases from year to year until we have regained this degree of strength. We have to do it as economically and as efficiently as possible. And it is hard to get across the message that if we weren't doing this, the bill for all of this would be enormously higher. But what's it all for? What's the purpose of it? It isn't just to acquire an enormous military machine or military superiority or any of those things. It's to help the president carry out the goal that perhaps he is not yet fully as identified with as he should be and as he will be. It's the goal which he has which I think he attaches the very highest priority to, far above any of the things that we'll have an opportunity to talk about within the Defense Department or in the budget or any of those other vitally important matters. It's really nothing more or less than the goal of securing peace. And he knows that we are not going to be able to secure peace if we go into the world with a reputation for unreliability, for weakness, for irresolution. He knows that we will not be able to secure the peace if we don't go into the world with a degree of strength that will make it clear to any foe that if they should launch an attack on the United States or our allies that they would do so by an acceptably high cost of retaliation. A cost of retaliation which to them would be so high it would deter the attack. You're never going to achieve that result of peace if you try to do it by unilateral disarmament, hoping somebody else will go along with you. You're never going to achieve it if you don't have a very real buildup in your own strength to the point where you will be able to deter aggression. So we continue to be devoted to regaining that strength, to defend ourselves, but even more important we continue to be devoted to the President's goal of securing the peace with strength and shores. We're arming to parlay, as Churchill said, and we're parlaying for peace. And the negotiations which the President's initiative has launched at Geneva, which are underway for one category of weapons, is a clear indication of the attachment that he has for peace and the realization that we could only be in those negotiations and we can only hope to succeed with them if it is clear to the world that we are regaining the strength necessary to deter aggression. We have no other object than to do that and that will secure we are convinced for ourselves and our descendants the peace with freedom which we have always cherished. Thank you. I'm sure most of you who occasionally get home at night in time to watch television have seen the Merrill Lynch commercials with a bull come charging through the room. The President went to Merrill Lynch to find a man who would take the bull out of economic affairs, our Secretary of the Treasury, Don Regan. Thank you very much, Ed. Ladies and gentlemen, I'll say this, the outset since Ed started with a commercial, a little over a year ago, I could say with a feeling that I was bullish on America and to mean it in a pecuniary sense. Well, knowing what I get as a cabinet officer, you'll realize that I can now say it from a different sense. But I am bullish on America and I'll tell you why. Considered just a year ago, we were burning the midnight oil at Treasury trying to come up with an economic recovery package. And today, after almost, I would say, interminable, but at least innumerable meetings at breakfast with Dave Stockman and Murray Wiedenbaum and Marty Anderson, I do believe we have an enviable record to show in the economic sphere. And while our excitement is tempered with experience, and of course our skins are a lot thicker, I believe that we have the same dedicated and determined attitude that we had one year ago. So I come to you today with a clear picture of where we are and where we're going. It's one of those before and after pictures that show a sleeker and a trimmed down version of what was an obese and a rumpled government. After heady successes this summer, it's rather hard to bear the doubts, the criticism, and the signs of impatience over the current state of the economy and the economic program that seem to be arising from all quarters. Let me assure you that the economic program is on track and that the economy will be moving along very soon. Our program is long-term, it's comprehensive, and it's barely begun. The first in the smallest rounds of tax cuts has been in effect less than 90 days. Other cuts were phased in just 20 days ago, and truly significant cuts will not begin until next summer. In the last few months, inflation has come down, interest rates are down, and there's already an improvement in the rate of personal savings. And just wait until that marketplace really catches up with the tax incentives and starts to run before passing judgment on which way the game is going. The economic mess that we inherited could hardly have been worse, and it's going to take some time to turn it around. Not only were all the major economic trends getting worse, but the previous administration had no plan for coping. We came in with a clear picture of the causes of the trouble and a clear program designed to set things straight. The economy of 1980 was staggering under a long series of ineffective stop-and-go policies which had produced four years of rising inflation, rising interest rates, rising tax rates, and rising federal spending as a share of gross national product. Only the good things were falling, things like real take-home pay and productivity. After two years of double-digit inflation and interest rates, and sharply higher tax rates that were higher than anything since 1978, the economy was on the brink. Autos and home-building were collapsing. Credit controls were the last straw, triggering the sharp collapse, which began the recession of 1980. After controls ended, the economy struggled to recover, growing through the first quarter of 1981. But the causes of the recession were not corrected, and there was a renewed slump. The causes were the same, continued high inflation and interest rates, and rising tax rates. By the spring of 1981, autos had been totaled, and construction was at a standstill. Industrial production was practically flat from March to July. In July, it was falling. Now, let me repeat that. By spring, it was flat. By July, it was falling. That is before the tax bill was passed. The fashion world has proclaimed our next speaker the best-dressed man in government. The capitals of the world have acclaimed him for his mastery of foreign policy. I give you our Secretary of State, Al Hague. Thank you very much, Ed, and I have a compliment for you. This is a wonderful occasion. It's the longest period in my memory in a year that this behemoth cabinet has sat in quiet docility in my presence. Now, this is a time for reflection, and I'd just like to make a confession about my own personal accomplishments over the past year. It's been a year of unprecedented triumph for me. You know, in addition to the award that Ed just mentioned, I had three others this past month alone. First, I received the Double Speak Award from a group of Boston College English professors. I received the Swordjaw Award from a group of London linguists. I wasn't quite sure whether these two awards represented a compliment until I learned that last year's recipient was none other than the former governor of California and our own president, Ronald Reagan. I received Saturday night a Gridiron Club Award, and I explained to the president that what he didn't know that it was my college football experience that taught me the teamwork that has carried me so well in this administration. I also remarked to the president that I started out as a left guard in college, but that the experience turned out to be very unsatisfactory in my junior year and the last game of the season, the third quarter, the first team quarterback broke his arm. Sure enough, two minutes later, the second team quarterback separated his shoulder. I rushed over to the bench and I said in accordance with the Football Hall of Fame rule of succession, I will call the signals. But you know, it is a time for careful reflection and assessment of the accomplishments and perhaps the vicissitudes of the past year. You know, one of the great ironies of history is that history never speaks to what would have happened had you made decisions contrary to the ones that you made. And secondly, there's a great tendency in contemporary America to think the world started January a year ago, but certainly it did not. And this administration had inherited the consequence of years of malaise. Malaise that started with the experiences and the tragic outcome of our involvement in Vietnam, a Watergate, and a natural national reaction to those events which seemed to dominate the previous four years of American foreign policy. Now, I think it was clear to the president that it was his objective to establish a set of goals for American foreign policy, which were consistent with fundamental American values. First and foremost, the freedom and dignity of the individual. And in this decade of the 80s, and especially with the inheritance of the legacy of the 70s, to recognize that we as a nation must focus on the growing imperative for peaceful change, a recognition that desirable and inevitable historic change must occur in the context of the mores of Western civilization and rule of international law, and not by resort to bloodshed, terrorism, and so-called wars of liberation. It was another great irony of the decade of the 70s that Marxist Leninism has perverted the timeless quest of mankind for social justice by adopting that slogan in revolutionary terms to affect the installation of Marxist Leninist totalitarianism. Now, in the conduct of this foreign policy, the president sought to recognize that an American foreign policy that abandoned ideals with an exclusive preoccupation with selfish national interest would offend America's sense of right. But he also recognized that overlooking the instruments of power in a compulsive search for ephemeral pieties would offend America's sense of reality. And so he had structured his foreign policy on four fundamental pillars. And I'd just like to review for you very quickly the progress made in each. First, it was the clear recognition that American influence abroad could not be effective if we presided over an economic shambles here at home. Believe me, I've witnessed five years of it from a perch in NATO Europe and the runaway double digit inflation, the declining economic growth weights of American productivity, the declining value of the American dollar all contributed fundamentally to a declining level of American influence on events abroad. And so it was clear that the interrelationship of our domestic accomplishments were fundamental to our hope for success in the conduct of international affairs. All while dealing with the immense contradiction of allocating unprecedented resources to rebuild America's defenses. And how clear that picture has been, as we've heard the other cabinet members responsible for those achievements, we cite them for you this morning. Now, the second pillar that the American foreign policy under President Reagan sought to achieve was the reestablishment of credibility, leadership, through consistency and reliability, not only with traditional allies, but with other nations around the world who shared our values. Now, the success here has been slow in coming, but it's been steady. You'll recall the president first remarked that it would be difficult to have our influence be felt abroad if we couldn't even get along with our neighbors. And so he set for himself the task of improving our relationships with Canada to the north and Mexico to the south. With respect to Canada, last night I met with a Canadian foreign minister. And he said to me that the relationship established by President Reagan with Prime Minister Trudeau is unprecedented in a long line of unsuccessful relationships with American presidents. That not only involved the vision and the substantive character of the man, but the chemistry as well. Three weeks ago, I was in Mexico City where I spoke to Lopez Portilla. And while our differences are wide or in a number of areas, he said to me that in his living memory, never has he witnessed a more successful year of collaboration and the development of mutual respect between the United States and the people of Mexico. Now, when we turn to Europe, there have been a lot of carpings and complaints. Perhaps our European friends are not carrying their share of the burden. Let me tell you, our European friends are going through the maturing consequences of years of mixed signals from Washington. On top of that is the burden of unprecedented economic decline, which causes all of us to turn inward and contemplate our navels. Thirdly, they are faced with the consequences of what Cap Weinberger just talked about here, the maturing results of the Soviet buildup in military power. And whereas since the Second War, they could sit complacently behind unchallengeable American nuclear superiority, they are now grappling with the consequences that those balances have changed. And what a profound impact that has on their psyche. And I can assure you, it is in our interest not to throw up our hands and disgust, but to work carefully and systematically in recognition that interdependence is the imperative of the decade of the 80s, that America alone will not be able to meet the challenges with which we are faced, and therefore it is fundamentally essential that we work in tandem with patience and cooperation with our allies, with a combination of firm leadership of the kind of president just evidenced on Poland and self-confident patience that we are on the right course, because we are. With respect to Latin America, I just left the OAS conference in St. Lucia, where we were grappling with not only the consequences of the tragedy in El Salvador today, but the even more worrisome evolution of Nicaragua and the Sandinista era into a totalitarian Marxist-Leninist outcome with the gravest of consequences to the security of the entire hemisphere. A year ago, when I contemplated the audacity of bringing this to the attention of the American people that was carping throughout the hemisphere, this past OAS meeting, 22 nations of 27 voting favored support for the electoral process of the Duarte government in El Salvador and fundamentally rejected external intervention in the internal affairs of that struggling nascent democracy. Now, one can reflect with some sense of accomplishment, because the same picture prevails in ASEAN in the Pacific. And despite increasing difficulties in our relationships with Peking, I remain optimistic that sensible, sensitive, consistent American policies will prevail. And one in this audience need not worry that our president has forgotten that you do not make good friends, new friends, by forsaking old friends. Now, the second pillar of the president has grappled with is the recognition that in this decade of the 80s, where today our trade and commerce with the developing world is more in some than the combined trade of the United States with all of Europe and Japan. And that historic evolution of reality is going to continue through the turn of the century. Increasingly, Americans become dependent on relationships with the developing world. And we must not conduct ourselves in such a way that our policies have the practical consequence of driving that third world back into the arms and influence of Marxist-Leninist Eastern Europe and the Soviet Union. You know, it's clear whether one look at black Africa today or our own hemisphere or the developing states of Asia that each of them have begun to recognize that affiliation with the Soviet Union brings nothing but armaments, a pervasive Soviet presence, and a client state that would suggest that what we are witnessing is an internal affair. Do not accept that. Every vestue of hard intelligence that we've been able to accumulate confirms that the suppression in Poland today was instigated and directed by the Soviet Union. There is no question about it. And how happy I am that following his visit here to Washington, Helmut Schmidt, who had been a skeptic in this area, joined our president in such an assessment. And how happy I am that the meeting last week in Brussels with NATO reaffirmed a convergence of European viewpoints with our own. First, to clearly analyze the nature of the problem in Poland today. Second, to point clearly to the responsibility of the Soviet Union for these events. Thirdly, to emphasize along with their American partners that if this situation continues, it will have a profound effect on the evolution of East-West relations in the period ahead. And finally, they not only agreed not to undercut those policies that we have taken in the sanction area, but to join us in seeking similar actions by the European powers. Now they'll be meeting on Saturday to put some flesh on those bones. And I am optimistic and hopeful that that will occur. But you know as you sit back in America today and compare our situation in this great country with the problems and dilemmas facing the leadership in the Kremlin, how glad we must be to be where we are. They are faced with demographic changes. They are faced with increasing centrifugal pressures of the historic kind we are witnessing in Poland today. They are bogged down in Afghanistan. They are facing the decades of failure in the production of food to meet the needs of their people and declining economic growth rates, just as we in the West have been experiencing. But mind-boggling challenges they face. And how important it is for we Americans to understand what we have in the way of assets to deal with this problem and to deal with a sense of purpose and confidence. You know, as an old pragmatist, I've had some 20 years experience at a fairly high level in government. I've served five presidents. And never in my memory have I witnessed such a clear consensus among the American people, the American legislature, and the executive branch that get our act together to roll up our sleeves and to carry out what history has placed on the shoulders of the American people. That is the need to lead with credibility, with consistency, and with reliability. All of us here, the cabinet and you out there, are the guardians of that precious unprecedented legacy and consensus. And how important it is we mind ourselves each day of what a precious consensus it is and how to rededicate ourselves to carry it through successfully in the months ahead. Thank you. Ladies and gentlemen, the vice president of the United States. Ladies and gentlemen, hey, Bill. Thank you. Thank you very, very much to say yes, sir. Thank you, ladies and gentlemen. I was sitting in the holding room out there. Did I hear Al Haig say something about who's in charge here? Oh, I'm just delighted to be here. I will pay my respects to all these distinguished people on the dais. I would like to mention just briefly a couple that have spoken here, or one that's spoken here, Dave Stockman, singling out his New Year's Resolution, which came as a relief to me. He's resolved not to declare anything a vegetable this year. And that is important for those of us in the regulatory business. And as for Secretary Watt, he has resolved not to chop down any more trees, not personally anyway, can leave the chainsaw in the forest and hope that the trees do the right and honorable thing. Now, whoops, I single them out because they have two of the most difficult assignments in Washington, DC. And it gives me an opportunity to say that they are both doing a superb job in every single way. It's delighted to be with all of you. I know how much hard work went into the first year of the administration. If it's any consolation, this year will probably be even harder. And even if it sounds like a truism to say it, I'm proud of the work that you've done. Please accept that anyway. Truism, though it may be, because certainly I feel strongly about that. It was former Senator Keating who coined the term the Washington reflex. You discover a problem, throw money at it, and hope somehow that it will go away. A lot of that money was thrown into regulation. And this administration never argued that regulation in itself was a social evil. Sometimes it's accused of having that attitude. But those who make that charge are wrong. And what's more, most of them know that it's wrong. But it's politically expedient. This administration set out to reverse certain trends, excessive government spending, excessive taxation that Don's talked to you about this morning, and excessive regulation. How much is too much? Anybody here remember Rudd, Iowa? Little Town came into a certain national prominence back in 1977. The town library was informed by what was then HEW that it wouldn't be receiving any of its federal funds. Why? Because the public library of Rudd, Iowa didn't have a wheelchair ramp. And then it transpired that in all of Rudd, Iowa, population 429, not one single person was wheelchair bound. And eventually, the secretary had to call up the librarian and apologize. And it was a big, fat, unfortunate flap. But there it was, big brother government. Another case, a recent case, in fact, involving the Department of Education, whereby school boards were prohibited from regulations. Now get this, the wearing of, from regulating, the wearing of see-through blouses by girls, unless at the same time, it also regulated the wearing of athletics supported by boys. This was a legitimate argument by regulators. Idiotic, I grant you. Matter of human understanding, misunderstanding. And whenever I speak of regulatory relief, I'm careful to reiterate the following. We're for clean air. And many of you right here in this room are working towards those goals. We are for worker safety. And the same holds true. We are for consumer protection. And many of you are doing a fine job in that. And we are against discrimination. And many here working hard for those ends. The success, the success of the regulatory relief effort can be quantified in two ways. But first, I want to congratulate on the record some of those who are responsible for that success, people like Kristen Muth, with whom I work on the task force, Boyd and Gray, Murray Whedon Baum, well, Murray made it up here. Murray Whedon Baum, Jim Miller, many others. Rich Williamson, Bob Monks, many others. People in this room, unsung heroes. And you know, almost 2,500 regulations have been submitted to OMB for review under the president's order. 96% of those have been cleared or returned to the agencies with a turnaround time of 10 days. And speaking of efficiency, I don't know if you saw the report in the press, but I was amused to see it. Don Regan was quoted horrified to learn that the previous administration spent $250,000 on a 1,100-page report required by the Congress on, get this, the state of government finances, $250,000 for 1,000-odd pages. That's about what Norman Mailer gets. But at least his 1,000-page manuscripts are better reading. And so Don vowed to cut that cost, and the result was that he sent a letter to Congress instead at the breakthrough cost of something like $1. As far as paperwork is concerned, there is the Federal Register. And it's in the Register of Federal Bible of Laws if you wouldn't go and work. And we want to correct abuses. When I was in China on a diplomatic stand, I heard a saying centuries old, Chinese philosopher Lao Tse. The saying goes, govern a great nation as you would cook a small fish. Don't overdo it. And ours is a great nation. And our president is attempting not to overdo it. And during the past decade, it's been overdone. Not even so much as you're all aware by elected officials, but by a bureaucracy that's become a trenched, autonomous, unresponsive, and in some instances even pernicious. At the core, really, philosophically of the regulatory movement, we can call it a movement because November 80 elections demonstrated that it was voters listening to the president. At the core is liberty, the principle of liberty upon which the nation was founded, the kind of liberty that John Stuart Mill was speaking about when he wrote, a station which dwarfs its men in order that they may be more docile instruments in its hands, even for beneficial purposes. We'll find that with small men, no great thing can really be accomplished. Well, we're not a nation, small men, small minds. In our work, the president's work is a recognition of that. We're a nation of great dreams, a nation of great achievements, a nation, in a sense, impatient of success. That impatience is rooted deep in our past in the very beginning of the American experience. And I found, not long ago in my reading, a few lines that seemed very apropos of the regulatory question. Let me read you the quote, because I wonder if you might recognize it. It goes like this. He has erected a multitude of new offices and sent swarms of officers to harass our people and eat out their substance. You recognize it? Not a campaign rhetoric from 1980. It's not from an article in the EPA or the National Review or Conservative Digest. It's from a bill of particulars against George III in the Declaration of Independence. So maybe the problem goes back even further than we thought. But this administration is trying and accomplishing things. And we are extraordinarily grateful to each and every one of you who are making this work possible. Thank you very, very much. Ladies and gentlemen, the president of the United States. We're running late. For heaven's sakes, you're on your own time now. Well, I thank you very much, except I feel a little bit like the last living survivor of the Johnstown flood who finally came to the end of his days. And St. Peter greeted him as a newcomer and told him that there were some old timers there that like to gather and hear the latest word from Earth. And did he have anything interesting to contribute? And he told them that he'd been quite a feature on the luncheon circuit, the mashed potato circuit with his tails of the Johnstown flood. Oh, he said, I know they'll like that. Brought him in, introduced him, said he has something very interesting to say. And then just as he turned to leave, he whispered in the fellow's ear that man's second from the left in the front row's name is Noah. I think everything must have been said here. It should have been said. But I have been looking forward to this meeting with all you bureaucrats. We're going to make that word respectable. We in this room share a special bond. We came to Washington not to get a job, but to do a job, to get this great nation of ours back on track after too many years of misdirection and mismanagement. We came here under the banner of a new beginning. And we've made a new beginning for our country and the people we serve. But as the poet-long fellow pointed out, great as the art of beginning is, the art of ending is even greater. We still have a long way to go. A lot to do before we can achieve all that we hope for, the America of today and the America will pass on to our children. And one year ago, on a clear, crisp January day, just about like this one, except for the snow, I took the oath of office and delivered my first address as president of the American people. And in it, I said that the ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we as Americans have the capacity now, as we've had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom. Well, I'm glad to see that this quote was chosen as the motto for today's program, because I believe it sums up not only the resolve of each of us in this room, but also the basic faith and commitment of the American people. And after all, what are we but their trustees, the pledged guardians of their values, their beliefs, and their aspirations. No one has succeeded in putting it better than Henry Clay, who said that government is a trust, and the officers of the government are trustees, and both the trust and the trustees are created for the benefit of the people. Unfortunately, in growing too big and greedy for power, the federal government and the recent past lost sight of this vital point. It's up to us to redress the balance. It's up to us to begin the long, hard process of making government once more the servant, rather than the master of a proud and independent people. We've made an, I think we can proudly say we've made an impressive start. In this first year of our trusteeship, we've built a competent, dedicated, executive team. We've laid the foundation for economic recovery and national renewal. We have begun to cut back the runaway growth in big government spending and regulation. And you've just heard about the changes in regulation, thanks to the task force that Vice President heads up. Inflation and interest rates are down. A program that'll mean more jobs and more opportunity for all Americans is now in place. And we've begun to restore confidence in America at home and respect for America abroad. We had promised to do all these things, and thanks to the outstanding efforts of the team represented here today, and by all of you, we have kept these promises. Thanks to the job that all of you've done in your agencies and departments, only one year into this administration, as you've already been told, we have kept in this first year two-thirds of the promises that were made. I think Jim Baker told you it was 104. And we're on our way to keeping the rest of them. This booklet, I know you were frightened. You thought maybe I was going to read it. This booklet, many of you will see copies of this. It refers to those promises that we made. It's a sort of catalog of our track record, and it's called Promises, a Progress Report on the President's First Year. It's not as thick as the Federal Register, even though we've reduced that, thanks to George, by 23,000 pages in just one year. But it is an impressive list of achievements, and this administration couldn't have made them without the faith, commitment, and hard work of every man and woman who is here today. We also couldn't have made them without the sustained support of the American people, the people we serve as trustees. I'm sure that all of you were heartened, as I was, by the latest New York Times CBS poll. It showed an overwhelming 60% majority of the people believe that our program for economic recovery will benefit the nation. We'll build a stronger, more prosperous America. The American people haven't been led astray by the peddlers of pessimism and despair. They understand that the damage of decades of waste, mismanagement, inflation, and economic decay will not vanish overnight. And I suspect they've also noticed that quite a few of the people shedding crocodile tears over our current economic plight and taking pot shots at our recovery program are the very people who led us into this swamp in the first place. Speaking of swamps, I want to urge you all not to get bogged down in Potomac fever. Don't let the Washington whirl or the Washington morass let you lose sight of why we came here and what it is that we're all trying to do. I know it isn't always easy, as the whole saying goes, when you're up to your armpits and alligators, it's sometimes hard to remember that your original intention was to drain the swamp. And that's not why you're here and I'm here. We're here to cut back on waste and mismanagement, to eliminate unnecessary restrictive regulations that make it harder for the American economy to compete and harder for American workers to find jobs, to drain the swamp of over taxation, over regulation and runaway inflation that has dangerously eroded our free way of life. And I mentioned that term jobs. Last night on the news I was distressed to hear that I had misstated in yesterday's press conference the fact of unemployment in 1980 as it was in 1981 and figures were read that on December of 1980 there were more people employed than there were in December of 1981. But that isn't the way you use the figures. The truth is that in the year of 1980 there were 97,270,000 people employed in the United States. In the year of 1981, there were 98,318,000 which is 148,000 more in 1981 were working than worked in 1980. You don't know how much I enjoyed saying it. Some days are much more fun in this job than others. But I believe that our first year of trusteeship has demonstrated our good faith to the people we serve. It was their faith in turn, their support and confidence that got the recovery program through the Congress. It's their support and confidence that will see the program through to success. In the meantime, it's up to each of us through our conduct and commitment to continue to justify their confidence in us as their trustees. I believe we can, I believe we will. The evidence keeps cropping up in the most surprising places. Sometimes the most convincing endorsements come from the competition. Just last week on a visit to the Department of Transportation, Drew Lewis told me that he'd been deeply impressed by something said to him by a ranking majority member of the House of Representatives. A man who's not exactly a leading member of a fan club for me. I won't mention any names, it might get him into hot water with Tip O'Neill. But this veteran congressman said to Drew Lewis, it was nice to finally have leadership in the White House that actually did in office what it said it was going to do when running for office. I take that as the supreme compliment coming from the other side of the aisle, but I don't take it as a personal compliment. It's a compliment to an administration team government-wide that has put principle first. A team that came to Washington to serve America rather than serve itself. I take it as justification for the pride I feel in your talent and commitment as individuals and as dedicated team players. But any coach worth his salt knows that it's not the season that just ended that counts. It's the season that's just beginning. As a team, we're about to launch our second season and it's going to be a tough one. To keep our recovery program working, to get an ailing America back on its feet and running again will take a massive team effort. Each of you in your departments and agencies will have to work even harder to root out waste, fraud, and mismanagement. You'll have to work harder to see that every tax dollar that is spent is spent wisely and well. And each of you must use every fiber of your experience and imagination to come up with better, more efficient ways of getting the necessary work of government done. There may have been a time when America could afford to let things slide. A time when second best would do. But if there ever was such a time, it's long since passed. Today and throughout the year ahead, only our best will be good enough. Great results have never been achieved without great effort. What we've undertaken is nothing less than the rebirth of a nation. The revival of the independence, vitality, and resourcefulness that tamed a savage wilderness and converted 13 small struggling colonies into what Abraham Lincoln called the last best hope of earth. Lincoln also reminded us that we cannot escape history. In a second annual message to the Congress 120 years ago, he issued a warning that still holds true. We of this Congress and this administration will be remembered in spite of ourselves, he said. The trial through which we pass will light us down in honor or dishonor to the last generation. In this second year of our administration, America and American leadership again face many tastes. At stake in Lincoln's day was the survival of the American nation. At stake today is its revival. Assuring that the nation and ideas Lincoln saved and each subsequent generation of Americans has worked to preserve will take on fresh life and hope for those who come after us. This is an exciting time to be alive. An exciting time to be in Washington. A time of both challenge and reaffirmation. Each of us has been put here for a purpose. We must redress past errors, errors that have already cost the people we serve far too much in economic stagnation, joblessness, crippling taxes and inflation. It isn't going to be easy. Nothing really worth achieving ever is. But this is an optimistic nation and I am optimistic. If I wasn't, I'd never left the ranch to come here in the first place. Now you know there's a simple definition for an optimist and a pessimist. A pessimist asks, or an optimist asks will you please pass the cream? An optimist says is there any milk in that pitcher? But there's a story that maybe some of you know and I just can't resist at this point telling it because it has to do with the definition of optimism. A man who had two sons and he was very disturbed about them. One was a pessimist beyond recall. The other one was an optimist beyond reason. He talked to a child psychiatrist who made a suggestion. He said I think we can fix that. He said we'll get a room and we'll fill it with the most wonderful toys any boy ever had. And he said we'll put the pessimist in and when he finds out there for him he'll get over being a pessimist. And his father said what'll you do about the optimist? Well he said I have a friend who's got a racing stable and they clean out the stalls every morning and he said I can get quite an amount of that substance. And he said we'll put that in another room and when the optimist who's seen his brother get all those toys is then shown into that room and that's there he'll get over being an optimist. Well they did and they waited about five minutes and then they opened the door and the pessimist was sitting there crying as if his heart would break. He said I know somebody's gonna come in and take these away from me. And they went down to the other room and they opened the door and there was the kid happy as a clam throw and that stuff over his shoulders as fast as he could and they said what are you doing? He says there's gotta be a pony in here somewhere. But I'm confident that if we all do our best today and the months ahead, we can turn things around. There is a pony in here. We can take today's, we can make today's government and today's America a model for generations to come. That is our trust, that's why we're here. And that's why I want to thank each one of you today and from the bottom of my heart for all that you've done and all that you're doing to make America great again. I'm counting on you and what's more important so are the American people. God bless you all. Thank you. Thank you very much. Ladies and gentlemen, good luck in the year ahead.