September 18, 1981

Mrs. Reagan. I've been asked to introduce my husband. I don't think I've ever been asked to do that before. I was trying to remember on the plane coming out here. I think this is a first. He looks pretty confident that I'm going to give him a good introduction, doesn't he? [Laughter]

I'll tell you a little secret. He didn't look so confident when I was going to introduce him to my father. [Laughter]

But instead of introducing the dynamic leader that we all admire, I'd like to present a kind, loving husband, a pushover of a father, and the President of the United States.

The President. Ladies, thank you very much. I want to tell a little secret, too. Madam Chairman, Nancy, and I want you ladies to know that she isn't really that much taller than me; they've taken the box away that she was standing on. [Laughter]

And all of you here, Jim Watt from our Cabinet, the ladies here, and all of you, I just want to thank you for your most generous applause. Denver is known as the Mile-High City, and you certainly have made Nancy and me feel a mile high today with your greeting. Last month in California, when people applauded, I didn't know if they were clapping or swatting Medflies. [Laughter]

I think I may have told some of you this before, but I've just come from Michigan, where I met with our friend from below the border, President Lopez Portillo, and it reminded me of this. I'm going to tell it again, just in case. And that was how I once addressed a very large audience, distinguished audience in Mexico City and then sat down to rather scattered and unenthusiastic applause. And I was somewhat embarrassed, even more so when the next man who spoke, a representative of the Mexican Government speaking in Spanish, which I don't understand, was being interrupted virtually every other line with the most enthusiastic kind of applause. To hide my embarrassment, I started clapping before anyone else and clapped longer than anyone else until our Ambassador leaned over and said to me, ``I wouldn't do that if I were you; he's interpreting your speech.'' [Laughter]

But today you're the ones who deserve the applause for the support that you gave us in passing the recent budget and the tax bills. When I signed that legislation, I used 24 pens. And the reason it took 24 pens was not because they were government issued -- [laughter] -- they were for some of the people who had helped get the bills through the Congress. But, you know, if I had pens for everyone who assisted us, there would be thousands and thousands of Americans who would have received them -- who phoned and contacted their Congressmen. They worked in our behalf, and ultimately they won a great victory for our country.

The National Federation of Republican Women was a vital part of that effort. I know of your two hotlines and what they accomplished. So, each of you here today deserves a pen, an engraved pen that reads: ``In deep appreciation for your generous service to your party and your Nation.''

When you think about it, that should really be a surprise -- or no surprise, I should say, because long ago the great philosopher and commentator, De Tocqueville, came here to America from France, and after a long look at our country he wrote: . . . if anyone asks me what I think the chief cause of the extraordinary prosperity and growing power of this Nation is due to, I should answer, it is due to the superiority of their women. I would add, especially our Republican women.

We've tapped many fine Republican women to serve in the administration. And in spite of the mistaken notions we are somehow lagging in women appointments, the truth is just the opposite. After 8 months in office, we have selected as many women to serve in top policymaking posts as the previous administration had at the end of the first entire year, and more appointments will follow. What this means is that for a comparable period of time, we've appointed more women to substantive jobs than any other administration in history. And let me assure you this is only the beginning.

Of course, one accomplishment that I'm especially proud of as President is the appointment to the Supreme Court of Sandra O'Connor. [Applause] Thank you. Thank you very much. She is an outstanding example of the qualified women living all across this country whose talents and energies are so helpful in Washington. And let me say that one of her good qualities is the fact that she was a member of this organization before she joined the bench.

I can tell you I firmly believe that she is imbued with the philosophy that we put into our platform at the convention in Detroit. And I'm convinced she'll make a fine Justice, not just because she's the first woman on the Court but she also brings, as I say, a philosophy with her that I believe is especially appropriate for the Court. As she said in her testimony before the Senate, ``. . . the proper role of the judiciary is one of interpreting and applying the law, not making it.'' I believe that Mrs. O'Connor's commitment to judicial restraint will help to redefine the Court's role in our daily life. Sandra O'Connor is a new Justice for a new American era.

Today I want to discuss an issue, though, that affects you as Republicans, as women, and as Americans. During last year's campaign, I made a pledge to the American people, a pledge to return this Nation to economic health and vitality. I have never taken a commitment more seriously, with the possible exception of the one I made nearly 30 years ago to you know who. [Laughter] This afternoon let me review the progress that we've made in meeting that economic commitment to the people and what we must still accomplish.

Eight months ago we were bogged down with Federal regulations, heavier and heavier taxation, and the lowest level of investment and savings in the industrialized world. Few of us could keep our heads above the rising inflation rate. Our economy was sinking and taking most Americans with it.

With bipartisan support, we passed the largest spending and tax reductions in the history of this Nation. We also launched one of the largest regulatory relief rescues ever attempted. The economic recovery package is a dramatic contrast to years of bland, halfhearted, and ineffective efforts.

This summer I received a letter from a young black man in Los Angeles who had just become the proud father of a little girl. I well know that feeling. And he said that even though he grew up in a Democratic family, he was now wholeheartedly supporting our recovery program for the sake of his daughter's future. And he said, ``Our livelihoods depend on the total economic viability of America.'' Well, we're determined to make the economy viable for all Americans, and we're determined that his little girl's economic opportunities are going to be abundant.

As I've said before and I'll say again, America now has an economic plan for her future. We know where we're going: We're going onward, we're going upward, and we're not leaving anyone behind.

Our economic plan is to begin with the 1982 fiscal year on October 1st. I'm as convinced today as I was when we introduced the package that this economic plan is as good as money in the bank, and if I were a betting man, I would wager the rent money on it.

Now, I've listened to those Chicken Littles who proclaim the sky is falling and those others who recklessly play on high interest rates for their own narrow political purpose. But this concern about a plan not even in effect yet is nothing more than false labor. [Laughter]

Yes, the persistence with which high interest rates go on has made our task more difficult, and yes, additional budget cuts must be made in the years ahead, but we've known that and spoken of it for months, ever since we submitted the program. We referred to those unspecified cuts that we were later to specify, which we're going to do. Let me say that we did not sweat and bleed to get the economic package passed only to abandon it when the going gets a little tough.

We will not practice dilettante economics. We're committed to the economic plan, and we're committed to achieving it by holding to a firm, steady course for the long run. I told the American people we were going to turn this economy around, and we're going to do it.

Some of those Chicken Littles I mentioned got that way because over the past decades they've heard government talk of economy and saving, but at the end of each fiscal year, spending had exceeded revenues, and we went deeper and deeper into debt. Well, this is what we're going to change.

Let me give you some economic facts of life -- what we intend to do about them and where they will lead us.

We're rapidly approaching a trillion dollar debt, a debt so large that it can only be compared to the universe because it, too, is incomprehensible in its dimensions. Think of it: The government owes a thousand billion dollars and must pay interest every day on that gargantuan amount. The interest on the debt was $74.8 billion last year alone. That's better than a billion dollars a week.

This enormous debt has been built up year by year by Congresses that consistently promised that they were -- well, they promised more money than they had to give. The Federal budget has been something like a runaway truck coming down a steep mountain road. Obviously, we can't stop it all at once without doing a great deal of damage, but what we have done is get ready to apply the brakes on October 1st, when the new fiscal year begins. There will be more pressure added on January 1st, and in fiscal 1983 we'll shift to a lower gear, and in the following years we intend to bring it completely under control.

Now, as some of you know, I've traveled the mashed potato circuit for years speaking of the need for fiscal responsibility and a balanced budget, and I'm not about to stop this long crusade after only 8 months in Washington. This administration is committed to a balanced budget, and we will fight to the last blow to achieve it by 1984.

Now, in attempting to slow the budget, we estimated that the 1982 deficit would be $42 1/2 billion. But since that deficit, some things have changed. The interest rates have risen, increasing the cost of borrowing to fund the deficit and the debt that we've inherited. The Congress didn't give us quite all the deductions that we asked for, although we were very happy to get what they did pass after a long struggle. So, that leaves our $42 1/2 bigger than that if nothing is done.

But something will be done. We will not sit on our hands and watch helplessly as the deficit swells and swells. We'll make further reductions in the 1982 budget and millions of dollars of additional spending cuts in the '83 and '84 budgets.

The cutbacks in spending will be shared by all departments of government, including the Department of Defense. But let me assure you, the defense budget will still increase significantly. There is no alternative to a stronger defense. Study after study and expert after expert have testified to our nation's need for a more muscular military.

The Soviet Union is the most massive and menacing -- they had that buildup -- in history. It is spilling over with military hardware. The Soviets have not built a society; they've built an arsenal. And we in the West can no longer turn our head or avert our eyes. For too many years the Pentagon was treated as the Federal Government's poor relation while domestic programs thrived and grew fat. We simply must rectify that imbalance. We will not cut defense spending to the point that it interferes or slows our plan for our national security.

All of us -- the administration, the Congress, and the American people -- are going to be bone-tired from the budget battles over the next few years. But these battles, no matter how exhausting, must be fought and must be won for the sake of our future. We cannot falter in our resolve and see the progress already made turn to dust. We must have the determination and patience.

And let me say to our friends in the financial markets, I hope the people on Wall Street will pay attention to the folks on Main Street. If they do, they'll see there's a rising tide of confidence in the future of America. It took us years of fiscal mismanagement to get where we are today, and our economic recovery program is not designed to provide instant gratification.

I've actually read statements that our plan isn't working. And yesterday on one of the morning television shows, former Vice President Mondale said, ``Well, it was an interesting idea, but it just didn't work.'' Well, of course it didn't work. It doesn't go into effect until October 1st.

As I said before, I can understand the pessimism of those who remember past promises that were never kept. May I just interject here, the debt, the deficit that we will know of on the last day of this month when the fiscal year ends could, with the off-budget items, be as much as $80 billion -- the '81 budget. That was the budget that the previous administration told us was going to be balanced. So, until people out there in the financial market know the annual debits are reduced and eventually eliminated, I guess the interest rates will remain high; so will inflation. And it isn't easy to reduce Federal spending, but we're going to do it. And when the financial markets see the evidence of this, their tune will change.

I remember the fears and the cries of disapproval by those who opposed our decision last January to decontrol oil prices, and they said that inflated energy prices would be the result. But what has been the result? Americans have curbed their driving, their demand for oil. This in turn has helped the nation's balance of trade, which in turn has strengthened the value of the dollar overseas. And these benefits have occurred with very little effect on the consumer. The price of gas in July was the same as it was last February, and in some places it was even lower. And today's paper, the business section said, ``We've reduced again our imports of oil.'' And we can do that because there has been a great increase in exploration and discovery of more oil here in our own land without going abroad.

The economic recovery program will prove as successful as the oil decontrol decision. I firmly believe that our tax incentives will act as a new battery for the American economy, recharging and energizing the nation with economic opportunity. The across-the-board tax cuts will result in across-the-board improvement in our economic health. Without that tax rate reduction, the taxes would have gone up $91\1/2\ billion in 1982 and nearly $300 billion over the next 3 years. The Federal Government was turning the taxpayer into an economic sharecropper, with the rewards earned by the sweat of the taxpayer's brow going to government. It simply had to stop.

We also passed various incentives for saving and investment, like reduced capital gains tax, the all-savers certificates, and various stimuli for business. These measures are going to spark jobs, an estimated 3 million more jobs by 1986, in addition to the 10 million that are already expected by way of natural growth. And productive jobs not only provide take-home pay; they provide self-respect.

I'm really optimistic about the individual retirement accounts. These are savings accounts that will be opened to those also covered by an employer pension plan, where the individual wants to contribute something above that pension plan to his own retirement nest egg. This will be deductible earnings that he can put aside. It will provide people with the feeling of security that, according to the polls, social security is not providing.

Now, I noticed that the theme for this convention is ``We're changing -- changing the future.'' Well, that's exactly what our economic program aims to do as well -- change the future, change it so that our people and industry will have the incentive to be productive again.

Now, you've assisted us already with the initial spending and tax efforts, but I'm going to ask for your help again. I know what the members of this federation can do when you put your minds to it. The National Federation of Republican Women is known for raising the banner of the Republican Party, by raising campaign funds as well as candidates. You're also known for raising your voice to speak out on the issues vital to America.

In the weeks and months ahead, the Congress will need to hear your voice. There are great pressures building to stop our economic program while it's still taxing down the runway. Yet once we clear the fenceposts at the end of the field, this economy is going to soar. We'll have restored a healthy balance between government and free enterprise.

Now, I know I've talked a lot this afternoon about the dry, dusty figures of budgets and deficits, economic matters. It's essential to do so, of course. But I would like to take a moment and talk about somethng else. I'd like to speak of the heart of America.

I don't know whether I can explain or Nancy can explain what we feel living there in that great historic house. In Washington, surrounded and imbued with that history, there are moments when you feel that you're very close to the great heart of America. You can hear the sound of its beat. You're aware of its great depth and steady strength.

A young sailor on duty in a submarine writes to me, and he says that he's writing on behalf of his shipmates to express his pride in what he's doing. He said in his letter, ``We're not the biggest navy, no; but we're the best.''

A very elderly man writes very sincerely and volunteers to give up a portion of his limited pension if that would help the country.

And then there was another gentleman that wrote to me just the other day -- I spoke of regulations. He attached a form to his regulation that he had received. He's one of those citizens that is picked for a four-times-a-year personal interview by the Census Bureau to get statistics on people and how things are going. And he says, ``They've been to see me four times this last year.'' And he said, ``Here's the form they sent me.'' Well, this form says they're going to come and see him again four times this year. The questions on that form that they're going to ask: Has he changed his mind about retirement? Is he thinking about maybe going back to work? And then he told me, he said, ``I'm 84 years old. I've been living for years in a retirement home.'' [Laughter]

Well, there is another letter that just a few days ago reached my desk. It's from a small town in Iowa -- speaking of that heart of America. I just thought I'd like to read it to you and share it with you.

``Dear Mr. President:

``Tonight I am alone in my son's bedroom. He no longer lives here. These are supposed to be the years to which I've been looking forward, but I don't seem to handle empty bedrooms very well. This is my third. A week ago, my son was still enrolled in the college of his choice. Tonight he's in a strange motel somewhere. Tomorrow he steps onto an airplane which will take him far away. He has selected and enlisted in a branch of the United States Armed Forces.

``During these past weeks, I've sensed and seen him about the process of pulling away, cutting the cord, getting ready to leave the nest. I saw him bequeath some valuable possessions like his penny collection and his baseball cards. They went to a couple of small boys in his Pied Piper following on the block. Lately I've noted that comments and remarks directed to family members have taken on a gentle tone of voice. I saw him wax his car again, and he told me I'm a great cook.

``And so, I now take my place among the thousands of other mothers who, through the years, have watched a son leave home to serve his country. Surely, their feelings were not so different from mine tonight.

``Actually, it's all quite appropriate. This is a guy who grew up in a room wallpapered with flags and muskets and drums. He regularly ran Old Glory up the flagpole in the backyard before breakfast in those days. He and his big brother had G.I. Joe uniforms, sizes four and six. And I remember seeing them sneaking up the little hill in the neighbor lady's backyard on their stomachs. I wonder how many times I've picked little plastic army men up from under the furniture. All those toys and memories have been packed away for years, but I feel like the need to bring them out and handle them tonight.

``He has examined the options, as I suggested, and the choices he's made are taking him far away from me. He believes there are opportunities for him in education, travel, and experience. No doubt there are. There's a stack of thirsty terry towels I bought for a college basketball player. He left them here. He left the shampoo and soap and cords and sweaters, too. He won't need those things. His country will now provide for all his needs. He thinks he's getting a good deal. No doubt he is. Personally, I'm inclined to believe the country is getting the good deal. In exchange for all their provisions, they are getting one tall, tanned fellow with summer bleached hair, a sharp young mind, more potential and possibility than I have the space here to describe.

``And so tonight, here in the shadows, here in the quiet, a dumb orange stuffed tiger and I sit together absorbing the intensity of this special day. I stepped over a tread-worn pair of size 13 Nikes, and there were trophies, photos of pretty girls, a dusty Bible, and a tape deck with the volume finally turned down.

``I've already marked the 9 weeks on the point on the calendar and have a picture in my mind of him coming home, with presents, in a uniform, at Christmas. I'm feeling especially thankful for the Hardy Boys mysteries I did get read, the chocolate marble cakes I did get baked, and the long quiet talks that did happen. There were other memories I'll try and forget.

``Thank you for taking the time while running a nation to listen to the passions of a mother's heart. I feel better now having shared my feelings tonight. And please, will you be especially careful with the country just now?''

I will be very careful with the country just now.

Thank you very much.

Note: The President spoke at 2:40 p.m. in Currigan Hall A at the Denver Convention Complex. Following his remarks, he went to Camp David, Md., for a weekend stay.