 Ladies and gentlemen, the President of the United States. I have an opening statement, as you've been told, and then a comment that I'd like to make. In my State of the Union address, I said the time had come to control the uncontrollable and runaway government spending. And I also indicated that I would be announcing further measures to achieve this goal. Today, I'm making such an announcement. The need for the step I'm taking is clear. Our government is spending money at a rate that is intolerable, if not incomprehensible. Almost $2 billion a day. $1,400,000 a minute and about $23,000 a second. And if I could estimate correctly how long it took me to get in here and I'd tell you how much that was spent during that time, but then you'd find me wrong. So the interest on our national debt alone is greater than the entire budget of many countries and simply not right for us to squander money that our grandchildren will be held accountable for. We must reverse the process. As an important step in this direction, I am announcing the establishment of the private sector survey on cost control in the federal government. This presidential initiative will be conducted by outstanding experts from the private sector. They will report directly to me, and I've made it clear that in examining government efficiency, I expect them to roll up their sleeves and search out waste and inefficiency wherever it's to be found in the federal establishment. This is not going to be just another blue ribbon ornamental panel. We mean business and we intend to get results. Members of the survey will be responsible for an in-depth review of the entire executive branch of government. Working with the inspectors general and the council on integrity and efficiency, which have provided an inside look at how we can improve management of the executive branch, the private sector survey will give us an objective outsider's view on improving management and reducing federal costs. Special emphasis will be placed on eliminating overlap, red tape and duplication, identifying non-essential administrative activities, and increasing management effectiveness. In a few days, I will announce the names of the distinguished Americans who will serve as the chairman and members of the executive committee of the survey. All of them will be proven leaders in their fields. All of them will bring know-how and a known nonsense results-oriented approach to this crucial undertaking. And all of them will offer their services as unsalred volunteers. Our evaluation will begin with the departments of defense, health, and human services in housing and urban development. In turn, other departments and major agencies will be given a detailed evaluation. This will be the largest effort of its kind ever mounted to save tax dollars and improve the working of government. The American people deserve no less. It's their money the government's spending in such oversized amounts too often unwisely and wastefully. I will ask the Congress to cooperate in putting the recommendations of the survey into practice. Government's grown too fast. The economic stakes for the American people are too high for politics as usual on this vital issue. We all face an economic problem that has been building over many years. And we must all work together to correct it. And now if you don't mind, I'm going to make a comment on the economy. A year ago, I went before the American people to say that we'd inherited the worst economic mess in half a century. Inflation and interest rates were both at towering levels. Unemployment was far too high and the economy seemed almost stagnant. Since then, we have made progress on many fronts. Inflation, our number one enemy, came down by nearly 30% last year and is still falling. With the help of the Congress, we also began laying a foundation for sustained economic growth. With the help of the Congress, we're going to keep that up. We're not far too large yet. There'll still be some difficult days ahead. But at least we're heading toward a clearing. One of my major concerns today is high interest rates. They hurt everyone. People who must borrow. Families who want to buy a new home. Businesses struggling to get ahead. High interest rates present the greatest single threat today to a healthy, lasting recovery. The high level of current interest rates reflects two concerns in the financial community. Some fear that the Federal Reserve Board will revert to the inflationary monetary policies of the past. Others worry that this administration will tolerate ever-widening budget deficits. I want to make it clear today that neither this administration nor the Federal Reserve will allow a return to the fiscal and monetary policies of the past that have created the current conditions. I've met with Chairman Volcker several times during the past year. We met again earlier this week. I have confidence in the announced policies, the Federal Reserve Board. The administration and the Federal Reserve can help bring inflation and interest rates down faster by working together than by working at cross purposes. This administration will always support the political independence of the Federal Reserve Board. We also support the Federal Reserve's 1982 money growth targets which are fully consistent with the administration's economic projections for the coming year. At the same time, I'm sensitive to the need for a responsible fiscal policy to complement a firm anti-inflationary monetary policy. I will devote the resources of my presidency to keeping deficits down over the next several years. I'm confident that by pursuing a prudent course of sound fiscal and monetary policies, inflation will continue to decline, interest rates will fall, and we will once again enjoy sustained growth. Now, Jim, I can't think of anything else to say, so you can ask the first question. The Secretary of State has said that the United States will do whatever is necessary to head off a guerrilla victory in El Salvador, and that the mood of the American people should not necessarily determine our course there. Do you agree with that statement? And under what conditions would you send combat troops to El Salvador? Well, once again, Jim, we get into an area of options, economic, political, security, and so forth, that can be used in situations of this kind. And as I've said so often, I just don't believe that you discuss those options or what you may or may not do in advance of doing any of those things, except that I will say, lest there be some misunderstanding, there are no plans to send American combat troops into action anyplace in the world. Can you just envision under which we would be sending U.S. combat troops to El Salvador? Well, maybe if they dropped a bomb on the White House, I might get mad. Your 1983 budget, with its $90 billion deficit, has received little support from Congress so far. Even your allies are urging you to cut taxes, to raise taxes, postpone the tax cut, or to cut defense spending. Will you agree to any of those options? And if you will not, how can you expect to pass the package this year in Congress? Well, I'm hoping that some of them might soften their attitudes after they've been home for the Lincoln Day dinners and things and heard from the folks back home because I think there's widespread support for continued cutting of government spending. I think there's also pretty widespread support in the part of the people for restoring our ability to preserve our national security, which had been allowed to deteriorate so badly over the past few years. And I also believe that to abandon our tax policy now would be to give up the very fundamental thing that is required to expand our economy, to create the jobs that we must have for the increased number of unemployed, and thus by expanding the economy to actually add to government's revenues, not by larger assessments on individuals, but by having a broader base and more people paying taxes. So I just I think that either one of those two, defense or the tax policy, we ourselves have agreed that there are areas in the tax structure, and I'd spoken to this before, where if unintended by those who created the tax regulations and policies, there were those who were escaping a legitimate tax burden they should pay, we're going to try to close some things of that kind, but we should have done that and would do that, even without the need for more tax revenues simply because it's right. Well no, we're supporting the, oh wait a minute, wait a minute, I'm sorry, I was thinking El Salvador because of the previous, when you said that, Nicaragua. Here again, this is something upon which the national security interests, I will not comment, but let me say something about all of Central America right now, questions on that subject. Next week, I will be addressing the organization of American states on that entire subject, and therefore I'll save any answers to any questions on that subject. We generally state what the policy is, as far as having American covert operations to destabilize any existing government without specific reference to Nicaragua. Again, I'm going to say this is like discussing the options, and no comment on this. Yes George. Mr. President, although you have no plans to send combat troops to El Salvador, plans can be developed quickly. I'd like to hear some expression of the commitment that there is to using American combat forces in El Salvador, and again just how far will your administration go to keep the government from falling? George, and your question again gets to that thing that I have always said I think has been wrong in the past when our government has done it, and I will not do it. And that is to put down specific do's or don'ts with regard to some situation that deals with not only security matters, but even such things as trying to influence a situation such as the one in Poland. I think that to do so is just giving away things that reduce your leverage. Judy. Mr. President, this is on another subject. How certain are you that the economy is going to turn around by the end of the spring, the beginning of the summer, or do you believe as your budget director David Stockman said in testimony yesterday that it may be late summer or early fall? Well, I'm not going to pick any particular month or anything and then find myself having to be held to that. Many figures are very volatile when you are coming out of a recession or bottoming out in a recession. First of all, volatile enough that I think all of us were caught by surprise by the recession. I do believe that we have a program in place that there are indices already that give reason to believe that things are going to get better. For example, in December and January the increase in permits for building houses have gone up. There was a 6 tenths of a percent rise in a group of the economic indicators and that was the first rise after quite a long period of decline. The inflation rate, which is well below what we thought it was going to be, I'm just going to tell you that I believe in these months ahead in the coming year, I think we're going to see the recession bottomed out and we're going to see interest rates fall and beginning of a return to normal. See the beginning signs of recovery. What happened by the end of this spring? I'm just not going to be pinned down on a date. You know, I remember the last time I didn't seem to look this way very much. Mr. President, you just spoke about cooperation between your administration and the Fed to get interest rates down. In fact, yesterday there was an increase and what concrete actions are you going to take or do you plan to take and when to accomplish the lowering of interest rates and will we ever see single digit interest rates again? Yes, I'm positive we will. But inflation is one of the causes of inflation or of interest rates going up and anyone who's lending money has to compensate in the interest charges for the depreciated value of the time of that money based on the inflation rate. So as we continue to reduce inflation we will be working toward bringing down interest rates and the other things are just the general improvement in the economy is going to contribute to that. Mr. President. You recently named a man from Philadelphia fundamentalist preacher to the Civil Rights Commission and he says that he's against certain civil rights legislation for women. I wonder if you knew this when you named him because your people who named people in the apartment section did not notify the Pennsylvania senator Heinz that he was from Pennsylvania nor did they notify him of his views so now you're blocked in the Senate committee from getting this confirmation. Don't you think you should take a look you've had a hard time with apartments don't you think you ought to take another look at your apartment section? I think they've done a good job and he is not against equal rights he specifically stated that he has four equal rights for women he just happens to be opposed to the ERA as a method of getting them well I happen to have that same position you said that you were far equal rights for women you were just not for the amendment well that's what he said well I didn't understand that and I also know that he's against certain civil rights legislation no he has expressed that busing is not a proper method of bringing about desegregation of schools and of course I think there he has according to all the polls quite a majority of both the minority communities and the white community in support of that but he has also at the same time expressed his belief that through more attention to housing more attention to breaking down school district boundaries that tend to segregate schools that we could desegregate more by mixing the society better as a whole I am quite confident in his quality and his ability for that job and sorry that the senator didn't hear about it until you'd all broadcast the information yeah Gary President we'll go back to your dealings with Congress on the budget coming out of the White House after the meeting with you recently Congressman Michael, Senator Baker Senator Laxall gave the indication that you were in some kind of position going to deal or compromise with Congress on some things yesterday budget director Stockman seemed to suggest the same kind of thing that you might not go for 30 billion cut in defense but you might go for 10 and some dealings with the tax cuts especially the business the business portion of the tax cuts are you willing to compromise it all or the budget seems to be a compromise are you going to compromise or are you willing to well I told them with regard to the place where we're suggesting cuts I'd like to hear some so far and I think this was what Dave Stockman was addressing himself to Gary Dave said that so far all we've heard from the opponents of what we submitted and diatribe and opposition and criticism and he said come up with some specific suggestions suggest something and we'll take a look at it but we did work long months very hard on that budget we think that we have thought pretty much of all the things that had to be considered and this was what he was trying to say and if someone can present something that looks reasonable and that we'll meet the fundamental objectives which is to continue reducing the cost of government but we cannot back away on national defense without sending a message to the world of our allies as well as our potential adversaries that would be very unwise and as I've said before on the the tax program that was adopted by the congress the last year out I think it would be very foolish of us now to turn around and express a lack of confidence in that and say well let's go in another direction I think that tax policy is going to be the strongest thing we have toward restoring productivity and improving the economy and Leslie you were I'm sorry but I'd like to go back to Latin American and El Salvador for a minute in the 1960s the CIA came up with a secret plan to get us involved in Vietnam in a surreptitious covert manner and is it possible that you can tell us that there is no secret plan now devised by the CIA or any other agency in government to surreptitiously involve Americans in similar activities in Latin America and can you also assure the American people that we will not go in there secretly without you and this government giving us some pre-warning well Leslie you know there's a law by which things of this kind have to be cleared with congressional committees before anything is done if I may point to something I'm not in total agreement with the premise about Vietnam if I recall correctly when France gave up Indochina as a colony the leading nations of the world met in Geneva in regard to helping those colonies become independent nations and since north and south Vietnam had been previous to colonization two separate countries provisions were made that these two countries could by a vote of all their people together decide whether they wanted to be one country or not and there wasn't anything surreptitious about it that when Ho Chi Minh refused to participate in such an election and there was provision that the people of both countries could cross the border and live in the other country if they wanted to and when they began leaving by the thousands and thousands from north Vietnam to live in south Vietnam Ho Chi Minh closed the border and again violated that part of the agreement and openly our country sent military advisors there to help a country which had been a colony have such things as a national security force an army if you might say or a military to defend itself and they were doing this if I recall correctly also in civilian clothes no weapons until they began being blown up where they lived and walking down the street by people riding bicycles and throwing pipe bombs at them and then they were permitted to carry sidearms or wear uniforms but it was totally a program until John F. Kennedy when these attacks and forays became so great that John F. Kennedy authorized the sending in of a division of Marines and that was the first move toward combat troops in Vietnam so I don't think there's any parallel there between covert activities or anything there will not be a secret plan that you will not tell the American people about I can't answer your question for the same reason that I couldn't answer George's I just can't answer on that there's a lady in the very back row Mr. President we hear of applying of the housing and the automotive industry daily but we don't hear much about the problems in the agricultural sector which has been in the worst straits has been in since the depression 50 years ago 42 congressmen have asked for a meeting with you to discuss the farm problems and they've just been notified that you don't have time on your schedule to see them also would you do you support the market oriented agricultural policy that your secretary of agriculture supports and would you consider a grain embargo of the situation in Poland or elsewhere I have repeatedly said that the only way I would consider a grain embargo would be as a part of an across the board embargo that we will not again make what I thought was a mistake earlier and penalize one sector of our industry the farmers by just using that as an embargo item so we will not do that I don't know what the schedule problems are and I can't believe that they permanently turned those gentlemen down maybe they couldn't okay the meeting at the time they wanted it but I am very sympathetic to the farm the agricultural industry because I don't know of any industry by the cost price squeeze than the American farmer and we are doing everything we can to stimulate foreign markets for them we have just recently had some good news from one of our trading partners Japan which has had a different set of rules in regard to import and has not abided by our own certification of agricultural products and they have agreed now to accept our own department of agriculture certification so we are making some progress and trying to help but you are right about this they are in a bad way and have been for some time alright I know you say that you are not going to be pinned down to a date as to when economic recovery will begin but the fact is that you and your economic spokesman have been saying for some time that the recovery would occur by late spring and that it would be brisk that it would be a substantial recovery now do you want us to leave this room with just your statement saying that I believe in the months ahead and in the coming year we will see the recession bottom out doesn't that indicate that you and your economic advisors have less confidence now than you did just a month ago in the prospects for an early and brisk recovery there has been no change in our position about the economy we are simply trying to be in a coin a phrase here I have never used before cautiously optimistic we think this is far better with the sometimes the overblown or exaggerations that come with remarks that come out that we would rather err on the side of caution than err on the side of too much optimism but we do believe that the indicators are there that the program is in place and remember when I say the program is in place this is of course depending on congress to give us what we are asking for now in continued reduction in government spending or they can themselves set back the recovery policy and you cannot assure me that the people who support you are not going to be accused of supporting your town economy I think you will find next week in that address I make to the organization of American states that there will be some answers to your questions with regard to not only export but the economy particularly where it involves our American Hispanics not only those in our own country but in our neighboring countries here Mr. President I am sorry to say that you are going to Europe you will attend a NATO meeting and that some major initiatives will be taken by you could you please tell me would you be considering re-inviting France to join NATO especially in view that Spain is joining NATO this spring that would increase the strength of NATO to unify western Europe with regard to the agenda for the meeting France has continued to work with the alliance in every way except with regard to its own security and military situation be happy to discuss that with president Mitterrand at any time that he want to do but I don't have any plans for urging them to change what so far has been their present policy yes Mr. President Mr. President that crooked finger again as the United States have solid evidence of increased movement in arms from Russia through Cuba to Nicaragua and other places in Central America if so what will you do about it we are we're convinced by the evidence that the arms that are flowing into Nicaragua are coming by way of Cuba their connection with the Soviet government they have shipped in a greater ton of arms this last year than they have at any time since the Cuban Missile Crisis and we know that the Nicaraguan Army is of tremendous size beyond anything that they might need for possible defense but again we I won't go beyond that because again and Bill I didn't call you by name because I thought you both might have the same name and then I'd be in trouble the understanding that was reached in 1962 between President Kennedy and Kustchev that ended the Cuba Missile Crisis provided that the Russians would not in the future introduce offensive weapons into Cuba some of the weapons recently introduced like MiGs may classify as offensive weapons do you believe that the Soviets and Cuba are abiding by the understanding not to bring in offensive weapons again you were talking on a subject that is under review and discussion right now in our administration and I would rather not answer that that question now but wait let me get back over to you 17 year olds in the Navy and Marine Corps as their commander in chief how will you implement the Schweiker contraceptive policy that was your policy this is the policy that says that all those under 18 who obtained contraceptives from a federally financed clinic will be reported to their parents within 10 days will ships captains have this responsibility or the medics I'm happy to say that I would be delighted to turn that over to Cap Weinberger and the secretary of health and human services his spokesman was left aghast at the question he doesn't know well suppose we leave the two of them to get together on that problem but I will answer seriously your question on the other and I vetoed a bill that was contrary to what I believe while I was governor of California and that is for those who believe there is fear in the private lives of the young people by making such a requirement those young people couldn't get their appendix taken out without their parents permission a number of other things in which the parents have it I think the government has no business injecting itself between parent and child in a family relationship and where it is very definitely a problem of concern to parents who are responsible for the children thank you sir I've got Middle East here do you plan to offer for sale the Hawk missiles and the F-16 fighter planes to Jordan and if so what additional offers will you make to Israel to counter this sale contrary to what was portrayed and widely heralded in these last few weeks Secretary Weinberger came back without any request having been voiced for any of those weapons now we so there's no definite plan if there's a request comes we'll treat with it but again I have reassured reassured Prime Minister Bagan because of the overblown way in which the whole two tours of the Secretary and Secretary of State they coordinated their activities they were in communication with each other on those trips there is no difference in policy between them and I reassured Prime Minister Bagan that there is no change in our approach toward Israel and our dedication to the welfare of Israel isn't there any effective way that you have to counter this continuing buildup of arms in the Middle East yes and that is to continue the policy we're following which is to try and carry on where Camp David left off and bring about a peace in the Middle East and then the only basis for armaments and all of them would be against the external threat that could be posed by someone such as the Soviet Union so this is what we're trying to do in our Middle East policy is to try to persuade particularly the more moderate Arab states to join in the peacemaking process with Israel and to accept Israel's right to be a nation yes Sam sir sir there is another due date coming for the interest payments on Poland's loans to the west last month your government bailed Poland out by paying interest payments to western banks are you going to do it again I don't know what the situation will be or what our move will be but we didn't bail Poland out in doing that we retained our leverage because default would mean great financial hardship for a great many people and a great many institutions here in the west default literally is like bankruptcy and they're absolved of their debts and we felt that in this way we could hold that back where if that becomes a useful alternative we can make use of it but the default as it stands right now we believe would simply throw Poland more dependent on the Soviet Union and we would rather not have that happen you probably pay it again sir you will probably pay it again I said we haven't made a decision on that there's a gentleman back there said he had a follow up on those other questions do you think that Secretary Weinberger accurately represented American interest when he was in Jordan it's one question the other question is what would you answer to a Saudi senior official who said that the United States is nothing but an arms supplier it's only a purchase relationship between the United States and Saudi Arabia but not a strategic relationship well I don't know who the Saudi person was and we aren't just an arms supplier and I have no way of knowing what was in his mind when he said that if he said it yes I believe that the Secretary Weinberger was representing the United States in his visit to Jordan but I don't believe that this was correctly portrayed in some of the stories about that trip this is what I meant by exaggeration and being overblown President many young people are facing the prospect that when they plan for college next year they will have a harder time with finances because of some of the spending cuts that include the student loan and student aid program and the universities now are also beginning to say that they're having more of a financial squeeze what apprehension do you have about that condition for many young people who are not either very rich or very poor who will find their opportunities limited and the long range impact on American education because of this the amount of money that is in the budget for 83 for all human and social affairs is 382 billion dollars that is a four and a half percent increase over the 1982 budget previously that part of the budget has been increasing at a rate of about 16 percent a year we have reduced that amount of increase but we have not reduced the budget back now there are some specific programs that may be of a different size than others but the overall spending is the same one of the things having to do with college loans was the knowledge that in the administering of that program it had become so loose that we had people borrowing money simply because for a college loan because they could then reinvest that money at the current high interest rates and make a profit on the money that was sending their son or daughter to college we don't think that was what was intended in the program I don't believe that there is going to be any cut that is going to affect students with true need who really must have that kind of help in order to go to college yes Bruce when you met the other week with Tip O'Neill you defended your budget cuts in part by citing abuses such as the case of the New York neighborhood where children of parents making $75,000 a year were getting free school lunches I wonder whether you think examples such as those fairly represent the majority of people who are getting their benefits cut in programs such as this and secondly I was wondering whether you could tell us where you got that example from somebody who lived in that particular school district and said that and I simply recounted it as having been told to me by someone you don't really Jim has said thank you but you don't really want to get into all those mistakes you said that I made the last time do you because I'd like you to know that documentation proves the score was 5 to 1 in my favor I was right on 5 of them and I have the documentation with me in Pima County, Arizona they did save all that money on the food program in fact we confirmed it by phone and had them tell us that word for word I was accurate and then they did say that someone from your side of the auditorium someone had contacted them also and spent an hour but was resisting any answer that would not prove I was wrong Mr. President could you tell us whether these examples which you often use in talking about the budget cuts whether you feel they represent they fairly represent the cases of a majority of people who are getting cut from these programs and since you mentioned the scores of it could you tell us what school district it was I know that it was up in New York someplace I couldn't remember that by now but no I don't claim from those of the majority I claim and from our own experience in California in redressing welfare and in having task forces of the kind that I just announced today that contributed billions of dollars in savings to the state government with their findings that we found that many of these programs do drift into a pattern I will give you an example from the present budget we have reduced or eliminated the CETA job training program which was 3.2 billion dollars in 1982 and replaced it with a training program that only cost 1.8 billion now that sounds like a terrible thing in this time of great unemployment but in the previous program we found only 592 million of the 3.2 billion was going for actual training in the 1.8 billion of our new program 1.35 billion will actually go for training these are the type of things that we are trying to correct we do know that in any one of these it's what Milton Friedman once said that if you start paying people to be poor you are going to have a lot of poor people and we want to help people that are poor but help them get to the place that they can take care of themselves I have said all along that our government programs for welfare of all kinds were created with the noblest of intentions but there's something wrong when after decades and decades we keep increasing the number of people dependent on them if those programs were truly successful they would be improving people from government dependency and making themselves sustaining and that's what we are trying to do with the programs that we are reforming and now I can't take any more because Jim told me thanks alright