June 30, 1983

The President. Thank you very much. Thank you. Ed, thank you very much. And I thank you all for that wonderful California welcome. I, too, miss those who couldn't be here tonight. But, Bill, you mean they're still doing it on the night before the first of July?

Response. Hasn't changed in 16 years.

The President. I can remember 8 years of waiting up there until 3 and 4 in the morning. You see, they stop the clock at midnight, so that it won't be the first of July, while they go on doing what they're doing.

Well, seeing old friends like you here tonight is the best part of the trip. And now, of course, we have a special reason to cheer. How sweet it is to say ``Governor George Deukmejian.''

You know, George and I go back many years, more than I think either he or I want to count. But by coincidence, our first meeting took place -- and it had to do with Republican politics -- in Long Beach, California. We have much in common, it's true. For one thing, as has just been pointed out tonight, we both have the habit of getting sent to Sacramento to clean up after the Browns. [Laughter]

But I must say, you all look great. Maybe it's our ``spruced'' up surroundings -- [laughter] -- I'm ashamed of myself. Or could you be smiling because things are looking up for the Grand Old Party in California and across the country? [Applause] I'm told that here tonight, thanks to your support, we'll raise a million dollars for California Republicans, and what a shot in the arm that will be. [Applause]

I can remember when there weren't so many Republicans in California, when, not too long ago, Republicans seemed as plentiful as spring water in Death Valley. And I speak with authority, because I spent a good chunk of my life on that piece of real estate. [Laughter]

You know, I was in Mississippi a week or so ago, speaking of Republicans in places -- believe it or not, at a fundraiser -- and speaking to Republicans in Mississippi. And there was a Congressman who had been, I guess, one of the first, if not the first Congressman, now retired, that spent long years in Washington as a Republican Congressman from Mississippi. And, while I was there I learned of a story about him in his first campaign.

And he dropped in on a farm there in his district, told the farmer that he was the Republican candidate for Congress in the district. And the farmer's eyes popped open, and his jaw dropped, and he said, ``Wait right here. Just a minute.'' And he want running across the barnyard yelling, ``Ma, Ma.'' And she came out, and back the two came, hand in hand. They stood in front of them and they said, ``We've never seen a Republican before.'' [Laughter] Then they said, ``Would you make a speech?'' Well, he looked around for something that could be a dais, and the only thing he could see there was a pile of that stuff that the late Bess Truman took 35 years in getting Harry to call fertilizer -- [laughter] -- and he climbed up on it, and he made his speech, and they stuck with him. And when he stepped down, they said that was the first time they'd ever heard a Republican speech. And he said, ``Well, that's all right. That's the first time I've ever given a Republican speech from a Democratic platform.'' [Laughter]

But our party is strong, and it's growing, and I'm proud to say we've got a leader in this State doing a tremendous job. And you know I'm talking about our former Lieutenant Governor and your State chairman, Ed Reinecke. We did all right last year at the top of the ticket; we'll do better in 1984. And our losses were due less to Jerry Brown than to gerrymandering. Under the Democratic reapportionment plan, the Democrats took back, by fancy map drawing, the six congressional seats that we'd won in the last two elections. Hopefully, with the qualification of the Sebastiani reapportionment plan, and its passage, Republicans can gain back the seats that we lost so unfairly in 1982.

One reapportionment victim was John Rousselot. John ran a terrific race. His wife even campaigned for him in Spanish, and he almost pulled off a great upset. But let me assure you, your loss is our gain. John Rousselot is now one of my Special Assistants, and I'm mighty pleased to have his help.

And I am pleased, also, to have another local success story working closely with us in Washington -- our Senator, the good Senator from California, Pete Wilson. And let me take this opportunity to thank the loyal members of our House Republican delegation who are here with us tonight. They're wonderful, and if I could rate the Republican delegation from California, it would be a 10.

Now, as I mentioned, we know what a tough job George Deukmejian has. But if anyone in California has the talent, the experience, and the determination to turn this State around, George will do it.

He's been taking the no-nonsense stands that we need on the budget, on education, and crime. He's proving the truth of Andrew Jackson's words that, ``One man with courage makes a majority.'' George wants to make it safe for Californians to walk their streets again without having to be afraid. He said no to Prop. 15 because you won't get gun control by disarming law abiding citizens. There's only one way to get real gun control: Disarm the thugs and the criminals, lock them up, and if you don't actually throw away the key, at least lose it for a long time.

George always wants to help working people keep their earnings safe from all those who would bleed them dry with higher and higher taxes. I note that there have been some complaints about and against Prop. 13 -- anything to get more tax dollars. Maybe you could help George by sending a message: Tell them the people approved Prop. 13, the people still want Prop. 13, and the people will defend Prop. 13.

I think I can sympathize with what George is up against. When I was here a year ago, I said that we were in an epic contest with the proponents of ``No,'' the people who offer the politics of no growth, no take-home pay, no incentives to work or save.

We arrived in Washington to find an economic calamity dumped in our laps -- spending increasing at an annual rate of 17 percent, double-digit inflation, record interest rates, and a tax system pushing working families into higher brackets faster than they could earn and save.

It took us nearly the entire first year to get our program approved and, even then, the tax cut had to be watered down. We had proposed a 30-percent cut; they gave us 25 percent, and they delayed the start of that for several months.

The morning after the tax cut passed, the liberals there in the Congress started announcing that the program had failed. I borrowed their favorite word, ``fairness,'' and said that fairness required that they give us a little more time, like 24 months instead of 24 hours. And they made predictions then, more predictions than the TV weatherman. [Laughter] They said our program would guarantee double-digit inflation. They had left us an inflation rate of 12.4 percent. That has been knocked down to 3.5 percent for the last year, the lowest in 10 years. And for the last 6 months, it's been less than 2 percent. They said the program would push interest rates to a new record. Well, the prime rate was 21.5 percent when they left town. Today, it's 10.5 percent.

And then they got mean. They tried to cap the last installment of your tax cut. But yesterday morning, 55 to 45, the Republican Senate voted to give you the full 10-percent cut, beginning tomorrow morning. And it will be followed by indexing in 1985. If they had their way, they'd tax motherhood and apple pie.

A recovery is gaining momentum, and the economy is beginning to sparkle. Tax rates have been cut. Real wages are improving. Retail sales are up. Productivity has reversed its decline. The stock market has surged into new high ground. Venture capital investments have reached record levels. Production is increasing in one industry after another. More and more workers are being called back. And the words of Al Jolson are true today, ``You ain't seen nothing yet.'' How come they don't call it Reaganomics anymore? [Laughter]

You know, I never called it that. That wasn't my choice. I've always thought that what we put in operation there was the people's program, your program. And anyway, Reaganomics, that was better than taxonomics, and the last thing we need is more taxes for more spending. And if they can't get that straight, then I am prepared to veto their budget-busting appropriation bills, again and again and again.

Tax rates affect prices for working, saving, and investment. And when you raise the price of those productive activities, you get less of them and more activity in the underground economy and the tax shelters. And if you're in business, you know you can't force the public to buy products that aren't selling by raising the price. Too many in Washington and across the country still believe that we can raise more revenues from the economy by making it more expensive to work, save, and invest in the economy.

Do you know that since the capital gains tax rate was cut in 1978, Federal revenues from that tax have gone up in spite of the lower rate? And since the top rate of personal income tax was lowered from 70 to 50 percent in 1981, we're collecting more revenues from this consolidated 50-percent tax bracket than we were when it was 70 percent. And that's the secret of good taxes. As I've said before, we didn't run up a trillion dollar debt because you're not taxed enough; we ran up that debt because government spends too much.

Now, we're not asking the Congress to do what's easy. We're asking them, Democrats and Republicans alike, to work with us to do what's right.

Doing what's right includes standing up for a strong national defense, making America second to none. We believe that what occurred during the last decade -- when the Soviets raced ahead militarily and we stood still -- was wrong. We believe it's immoral to ask the sons and daughters of America to protect this land with second-rate equipment and weapons that won't work.

We're not belligerent people. We've always sought peace. We occupy no country, we build no walls to keep our people in, we have no armies of secret police to keep them quiet. But we must understand, and our foes will do everything they can to divide us and to undermine our will. To keep our families safe, to keep our country at peace, the enemies of democracy must know that America has the courage to stay strong.

The security of the country, of course, depends on more than weapons. We must have the will to meet the challenges to our vital interests. What's going on now in Central America, only a few hundred miles from our shores, directly affects the United States' national security.

Forty percent of all of our foreign trade and two-thirds of our petroleum imports pass through the Panama Canal and the sealanes of the Caribbean, where we see construction in Cuba of a naval base from which Soviet nuclear submarines can now operate, a Soviet capacity for air reconnaissance over our eastern coast from Cuban bases, the building of an enormous war machine in Nicaragua aided by thousands of Cuban military personnel, sophisticated weapons, including Soviet-made tanks and arms from Cuba, the Soviet Union, the Eastern bloc, Libya, and the PLO to name a few.

And the Soviet-Cuban-Nicaraguan war machine is not being built to make Central America safe for democracy. It's not being built to pursue peace there or economic and social reform. It's being built to subvert the peace and impose communism by force, and not just in El Salvador or Nicaragua, but by their own boast, their open declaration, in all of Central America.

We've had a team of Congressmen come back just recently. They'd gone down there, both countries, to see what was going on for themselves. And many of them came to me personally when they got back to tell me they'd gone down with an idea that, maybe, we were wrong. They came back completely converted. They talked to young men, barely boys, in El Salvador, enlisting in the military. And when they said, ``Well, why are you doing this,'' they said, ``To defend our country. We love our country.'' And they talked to leaders on the other side and heard them boast that this was not a revolution in one country; this was a revolution for all of Central America. And they made open threats of where they were going and how they were going to get there.

I appreciate the sincere motives of those who point out the faults of our friends and insist on reforms. But El Salvador is trying to build democracy. El Salvador did hold elections and, under threat of death, a much greater percentage of their people voted than vote in our country where we make it so easy to vote. They stood for hours in line waiting for the opportunity to vote after being told by the guerrillas -- their slogan was: ``Vote today, and die tonight.''

I agree with those who insist on economic as well as military assistance to Central America. We're giving more than three times as much economic aid as we are military aid. The main point is United States security, the safety of American citizens. And that's why Central America matters so much. Either we pay a modest price now so we can prevent a crisis, or we listen to the do-nothings and risk an explosion of violence that will bring real danger to our own borders.

We must not turn our backs on our friends. We must not permit dictators to ram communism down the throats of innocent people in one country after another. If we're to be successful in helping the forces for democracy, then we must have the full financial package that we requested. And if we don't get what we asked for, we can't do the job, and we leave the door open to more subversion.

You know, the Soviet paper Pravda recently said something that I actually support. It said that peace in Central America is possible only on the basis of respect for the right of each people to choose itself its way of life. I would only add this: The two perfect places to begin are Cuba and Nicaragua, where free and democratic elections are not permitted.

To those dictators, we say, ``Prove to the world that your system is legitimate. Prove you're not afraid of your own people. Let them vote. And while you're at it, put down your guns. Permit a free press. Stop harrassing your priests. And then we'll see if they truly enjoy your repression and regimentation, or if they'd rather have a new life with dignity and opportunity and freedom.''

You know, I've taken up the practice of learning jokes that are being told by the Russian people among themselves which reveal their cynicism about their own system. One of the more recent ones is -- this is the one that they're telling -- that if their government would permit another political party, they'd still be a one party country, because everybody would join the opposition. [Laughter]

And the latest one I have to tell you is that a commissar went out to one of the collective farms, stopped one of the workers there. And he said to this worker, he said, ``Well, how are things out there? Everything all right?'' ``Oh,'' he said, ``oh, certainly, sir.'' He says, ``I never hear a complaint.'' Well he said, ``How about the crops?'' ``Oh,'' he said, ``the crops have never been better.'' ``How about potatoes?'' ``Potatoes,'' he said, ``if we piled them all up in one pile, they'd reach the foot of God.'' And the commissar says, ``Just a minute, this is the Soviet Union. There is no God.'' He said, ``That's all right. There are no potatoes.'' [Laughter]

But what we have in this country is the most precious gift that God has given to mankind. Our country, more than any other, has been blessed with liberty and abundance. And only a few years ago, some people were counting America out, claiming that our best days were behind us, that our country was in decline. Well, that pessimism is something else that we've turned around. We have an agenda for growth and security, and we can be proud of what we're doing.

Let us tell the people who we are and what we stand for. We're the party that fights for lower taxes, more opportunity, stable prices, a sound dollar, and peace through strength. We believe that standing up for America means also standing up for the God who has so blessed our land.

Lincoln charted our course when he said, ``I am not bound to win, but I am bound to be true. Let us have faith that right makes might and in that faith let us to the end dare to do our duty as we understand it.''

We're rebuilding America. We've already reduced government paperwork that was required of our people, of all of you, by 300 million hours. We have set a goal of reducing the size of nondefense -- the nondefense part of government in 3 years by 75,000 workers. We're a little ahead of schedule. We're up to 65,000 already. And we've eliminated 2,200 government publications. And I hope you ladies didn't really need that book of instructions to tell you that there'd be a stink in your kitchen if you didn't keep the sink clean. We think you could figure that out by yourself without government help. [Laughter]

We're instituting modern business practices that are commonplace in the private sector but revolutionary in government. They will begin to pay off by the billions of dollars in savings over the next few years.

With faith in God and in each other, we can make this wonderful land all that we ever dreamed that she could be. And I just have to conclude by telling you this: that in these trips that I've made to some schools, and seeing these wonderful young people of ours, a young teacher told me how he resolved a problem. He was having trouble way down in the elementary grade in the patriotic ceremonies and saluting the flag, about explaining exactly where they put their right hand. And then modern style came to his rescue. He just told them put it on the alligator. [Laughter]

So, thank you all for what you're doing. Thank you for being here, and God bless you.

Note: The President spoke at 7:16 p.m. at the dinner, which was held in the ``Spruce Goose'' Dome, a specially constructed clear-span aluminum dome, which berths the ``Spruce Goose'' seaplane, the largest plane ever built. The ``Spruce Goose'' Dome and Exhibit are located on Pier J in Long Beach Harbor.

Following the dinner, the President went to Rancho del Cielo, his ranch near Santa Barbara, Calif., for the Fourth of July holiday weekend.

As printed above, this item follows the transcript of the President's remarks as released by the Office of the Press Secretary.