March 10, 1982

I'm glad to have an occasion like this to say thank you all for coming. But believe me, I really mean it to this particular group that is here, thank you for coming.

The job that I'm asking you to do is to find ways that we can save money in the Federal budget. That probably comes as a surprise to you that we'd be concerned with that -- [laughter] -- but it's as important as any request that I've made since I've been President.

We have a problem that's been 40 years in the making, and we have to find ways to solve it. And I didn't want to ruin your appetites, so I waited till now to tell you this, but during the hour we're together here eating and talking, the Government has spent $83 million. And by the way, that includes the price of your lunch. [Laughter] Milton Friedman is right. There really is no such thing as a free lunch. The interest on our debt for the last hour was about $10 million of that.

In selecting your Committee, we didn't care whether you were Democrats or Republicans. Starting with Peter Grace, we just wanted to get the very best people we could find, and I think we were successful.

I'll repeat to you today what I said a week ago when I announced Peter's appointment: Be bold. We want your team to work like tireless bloodhounds. Don't leave any stone unturned in your search to root out inefficiency.

I'd like to make one other request. We hope that the corporations and organizations that you represent will be willing to assist your projects with personnel, when they're needed, and even funds.

When I was Governor of California, one of the first actions I took was to conduct a survey of this kind, and I made a similar request then. And about 250 private sector top people from every line of activity in our State volunteered to come in and give us recommendations. They also came through with some contributions and donations of hardware and equipment to support the activities of the survey. But that's the least important thing. That isn't really why you're here. What we're here for today is we want your blood. And we had veterans there of the -- in case you're curious about how this operates -- of the hotel industry, for example, the top men in California in the hotel business.

They went into our prisons and into our State institutions, and they looked at them as a kind of hotel and looked at that type of operation, not what the warden was doing. And it was amazing the things they found that from their standpoint and their expertise could be done to not only improve the conditions but improve them at a much lower price than the State had been accustomed to paying.

We had business executives that found fantastic savings just in such routine things as filing, storage files that weren't utilized but were stored in expensive, per-square-foot office space, when they could have been out in much lower-cost warehouse-type space.

We had teams of people who were experts in fleet buying of automobiles, and we discovered that the State had no such plan, had never had any system for buying. Any department, when it was ready, just went out and got rid of what they had and bought new ones on their own.

And that was changed as a result of these task forces and created such a stiff system, so efficient in the State, that we then were able to offer the service to counties and cities that had the same problem, and we'd do the job for them.

At the same time, when all this was going on, there were people who charged that while the State employees would resent this outside interference -- and I'm sure that they did kind of look down their nose for a little bit to see what this was and whether this was just some new thing that was going to wind up with some papers on a shelf -- but when they saw that it was for real, they came out of the woodwork. They were delighted to help. And many times we heard repeated this statement from them. They said, ``Well, no one before has ever tried to make things more efficient and more economical in this way.'' And they, from their own experience, came up volunteering suggestions.

All in all, they brought in about 2,000 cost-saving recommendations after about 117 days. We implemented more than 1,600 of those recommendations. And that is exactly what we have in mind. We need your help, that of the groups that you represent, to make this effort every bit as successful as the California project was, if not more so.

In reality, we have a task force that's looking for waste and fraud and that sort of thing, and very successfully. But what we need from you and your expertise and your associates is to literally come in to the various departments and agencies of government and look at them as if you were considering a merger or a takeover, and to see how modern business practices could be put to work to make government more efficient and more effective. And if you find those things, I assure you, we'll break down the doors in implementing them, bringing them about.

Now, you've talked about this for a long time at the 19th hole -- [laughter] -- and now you've got a chance to really get in and do something about it. And I just have to tell you; I can't resist. I have to tell you just one little experience.

One man in a task force one day was watching State employees in California. This happens to be a favorite story that my staff has heard 10,000 times. But he noticed them doubling these manila folders over and putting them in the files. Well obviously, if you have to double them to get them in, you have cut the file capacity in half. And he said, ``Why?'' ``Well,'' they said, ``the State forms are printed in this size, and it's bigger than the file case.'' He said, ``Why's that?'' They said, ``They've always been printed that way.'' So he just picked up the phone and called the State printer, read the number off the top of the paper, and said, ``From now on'' -- and he measured the filing cabinet -- he said, ``Print those forms on'' -- and he gave them the proper dimension. And that year, we bought 4,200 fewer file cabinets in California. [Laughter]

There are a million things that you think of and take for granted every day in your business that you'll find they don't take it for granted in Washington, and it isn't done that way, and that's what it's all about.

So, thank you for your commitment. We're counting on you. And now, I apologize for having to eat and run, but I know that Peter Grace and Bud Nance and Janet Colson have some more activities planned for you, and they'll be telling you about that. And if you don't mind, I'll go over to the Oval Office and do what that little girl told me the first week I was here when she wrote me a letter and ended her letter with the line, ``Now, get over to the office and go to work.'' [Laughter]

Note: The President spoke at 1:05 p.m. in the State Dining Room at the White House. J. Peter Grace, chairman and chief executive officer of W. R. Grace and Co. is the Chairman of the Survey. The Coordinating Office at the White House is directed by James W. Nance, and the Deputy Director is Janet Colson.