July 30, 1981
Mr. President and President-elect, from a President that hopes he can stick around for a while, I want to thank you and thank all of you for a most warm welcome and for this opportunity.
You know, as a former Governor standing before so many State legislators, I feel as though I should either ask for an appropriation or veto something. [Laughter] Some of my fondest memories are of my years in Sacramento, so I'm very pleased to be surrounded once again by those who believe in State government as devoutly as I do.
I also want to thank you for your support of our administration's economic program. I don't know who's happier about yesterday's events, me or Prince Charles. [Charles Philip Arthur George, Prince of Wales and heir apparent to the throne of the United Kingdom of Great Britain and Northern Ireland, married Lady Diana Frances Spencer on July 29.] [Laughter]
All of you in State government know full well what is at stake as we struggle to put in place our program for economic recovery. That program has four pillars: budget cuts, deregulation, monetary control, and tax reduction.
On the spending reductions, the Congress is finishing up the largest budget cuts that body has ever considered in the history of this country. The conference committee has completed its work and now, as you know better than anyone else, their work will go back to the House and the Senate for approval.
On regulatory relief, the entire Government is working to ease the burden. And someday, maybe the blizzard of paperwork will be just a light snowstorm for the private sector, for education, and for State and local governments.
We're working closely with the Federal Reserve Board to maintain slow and steady monetary growth. But let me hasten to point out: The Fed is completely autonomous, and the present interest rates are not part of our economic recovery program. [Laughter]
And last night, the most crucial and the most exciting item on our agenda for prosperity passed in the House and now will go with the Senate version to a conference committee. I've been thinking over and over what this tremendous vote on taxes will mean to our nation and to our future. America is better off today than she was yesterday. America is more confident today. And the economic possibilities for all Americans are greater than they were 24 hours ago.
America now has an economic plan for her future. We know where we're going. We're going forward; we're going onward, and we're going upward. And as I said before, we're leaving no one behind. The outpouring of support from the people has been one of the most inspiring events I can remember. Since Tuesday morning, Washington has been filled with the voices of the people, the voices of democracy. They've been ringing throughout the Capitol. The Congress and the White House have been flooded with calls and telegrams from thousands and thousands of Americans in support of our economic program that crossed party lines and is truly bipartisan.
I believe our campaign to give the government back to the people hit a nerve deeper and quicker than anyone first realized. The government in Washington has finally heard what the people have been saying for years: ``We need relief from oppression of big government. We don't want to wait any longer. We want tax relief and we want it now.''
The people of this country are saying that we've been on a road that they don't want to stay on. Now we're on a road that leads to growth and opportunity, to increasing productivity and an increasing standard of living for anyone. It was a road once that led to the driveway of a home that could be afforded by all kinds of Americans, not just the affluent.
The tax vote yesterday means that the independent businessman, the farmer, the shopkeeper will be able to look ahead for 3 years and see what the tax situation is going to be and thus be able to plan. The families who are struggling to keep up will not fall further and further behind while being pushed into higher and higher income tax brackets because of inflation. And as a result of this vote, the government will not be able to tax away more of the people's money without voting on the record to do so.
When the details have been cleared away, let everyone remember this: The concepts at the heart of our first tax proposal remain intact. Yes, there were changes made, but not changes in principle. Actually, as I said Monday night, it just proved that more cooks were better than one, because we found legitimate proposals that could benefit the package even though we stayed within the total amount that we had thought was necessary to be reduced.
[Our bill cuts] the rates across the board for 3 years, and we cut them by the same percentage for everyone who pays them. This bipartisan bill has business provisions such as the accelerated cost recovery system, and last week we added incentives to further encourage investment in research and development. The bill will almost eliminate estate taxes, ensuring that family farms and family-owned businesses will stay in the family and won't have to be sold to pay the tax. And, incidentally, the thing that I'm happiest about of all is we end completely the estate or inheritance tax on a surviving spouse. There won't be any tax leveled when the inheritor is a husband or wife. And, of course, once those cuts are in effect, we've indexed them so that people won't be earning more and more but keeping less and less.
Yet, this isn't just an economic victory. It's a victory for our political system. It proves that our government and our institutions are capable of change when the people speak forcefully enough.
The American people have achieved a great victory for themselves with this vote. You know, there was much in the news about lobbying and arm-twisting and every kind of pressure, but what really sold this bill was the lobbying of the American people. They contacted their elected representatives in Washington, and it was plain they were ready to chart a new course to get this country moving again. My gratitude to the American people is as deep as my respect for what they can do when they put their minds to it.
With the help of these same Americans and with the help of the States, one of our next goals is to renew the concept of federalism. The changes here will be as exciting and even more profound in the long run than the changes produced in the economic package.
This Nation has never fully debated the fact that over the past 40 years, federalism -- one of the underlying principles of our Constitution -- has nearly disappeared as a guiding force in American politics and government. My administration intends to initiate such a debate, and no more appropriate forum can be found than before the National Conference of State Legislatures.
My administration is committed heart and soul to the broad principles of American federalism which are outlined in the Federalist Papers of Hamilton, Madison, and Jay and, as your President told you, they're in that tenth article of the Bill of Rights.
The designers of our Constitution realized that in federalism there's diversity. The Founding Fathers saw the federal system as constructed something like a masonry wall: The States are the bricks, the National Government is the mortar. For the structure to stand plumb with the Constitution, there must be a proper mix of that brick and mortar. Unfortunately, over the years, many people have come increasingly to believe that Washington is the whole wall -- a wall that, incidentally, leans, sags, and bulges under its own weight.
The traumatic experience of the Great Depression provided the impetus and the rationale for a government that was more centralized than America had previously known. You had to have lived then, during those depression years, to understand the drabness of that period.
FDR brought the colors of hope and confidence to the era and I, like millions of others, became an enthusiastic New Dealer. We followed FDR because he offered a mix of ideas and movement. A former Governor himself, I believe that FDR would today be amazed and appalled at the growth of the Federal Government's power. Too many in government in recent years have invoked his name to justify what they were doing, forgetting that it was FDR who said, ``In the conduct of public utilities, of banks, of insurance, of agriculture, of education, of social welfare -- Washington must be discouraged from interfering.''
Well, today the Federal Government takes too much taxes from the people, too much authority from the States, and too much liberty with the Constitution.
Americans have at last begun to realize that the steady flow of power and tax dollars to Washington has something to do with the fact that things don't seem to work anymore. The Federal Government is overloaded, musclebound, if you will, having assumed more responsibilities than it can properly manage. There's been a loss of accountability as the distinction between the duties of the Federal and State governments have blurred, and the Federal Government is so far removed from the people that Members of Congress spend less time legislating than cutting through bureaucratic redtape for their constituents.
Our economic package, which consists of tax cuts, spending cuts, block grants, and regulatory relief, is a first phase in our effort to revitalize federalism. For too long, the Federal Government has preempted the States' tax base, regulatory authority, and spending flexibility. It has tried to reduce the States to mere administrative districts of a government centralized in Washington. And with our economic proposals, we're staging a quiet federalist revolution. It's a revolution that promises to be one of the most exciting and noteworthy in our generation.
The bipartisan tax plan which passed the House yesterday is not only a critical element of our economic recovery, it's an essential element of our federalist plan, because the rate of taxation is closely linked to the power of the Federal Government. We're strengthening federalism by cutting back on the activities of the Federal Government itself.
Our budget proposal is a dramatic shift in the growth of government. Without a structural shift of this kind, there's little hope for a long-term resistance to the burgeoning of Federal powers. Yet, our budget is more than a slowing of the growth rate of government; it reorders national priorities, seeking to return discretion, flexibility and decisionmaking to the State and local level.
As State legislators, I know that you're tired of the Federal Government telling you what to do, when to do and how to do it, and with no thought of the whys or wherefores of it at all.
Well, a major aspect of our federalism plan is the eventual consolidation of categorical grants into block grants. Today there are too many programs with too many strings offering too little a return. In 1960 there were approximately 132 intergovernmental grants. The programs were in existence, costing slightly more than $7 billion. By 1980, 20 years later, the number had grown to 500 programs costing $91.5 billion.
Take just one area. In 1978, there were 35 programs for pollution alone. Now, the real costs of all this are just beginning to sink in. The State of Wyoming turned down a juvenile justice grant because it would have cost the State $500,000 in compliance to get a $200,000 grant. You remember the old gag we used to pull, ``Have you got two tens for a five?'' [Laughter] The city of San Diego built a 16-mile trolley without Federal assistance, which is probably why it was accomplished within the budget and on time. [Laughter] I wish I could interest San Diego in taking over Amtrak. [Laughter]
You know, there's a joke that's almost too true to get a laugh, and that was the city that decided that it was going to elevate, raise its traffic signs. They were 5-feet high, and they were going to raise them to 7. And the Federal Government stepped in and volunteered with a program that they'd do it, and they did. They came in and lowered the streets 2 feet. [Laughter]
Block grants are designed to eliminate burdensome reporting requirements and regulations, unnecessary administrative costs, and program duplication. Block grants are not a mere strategy in our budget as some have suggested; they stand on their own as a federalist tool for transferring power back to the State and to the local level.
In normal times, what we've managed to get through the Congress concerning block grants would be a victory. Yet, we did not provide the States with the degree of freedom in dealing with the budget cuts that we had ardently hoped we could get. We got some categorical grants into block grants, but many of our block grant proposals are still up on the Hill, and that doesn't mean the end of the dream. Together, you and I will be going back and back and back until we obtain the flexibility that you need and deserve.
The ultimate objective, as I have told some of you in meetings in Washington, is to use block grants, however, as only a bridge, leading to the day when you'll have not only the responsibility for the programs that properly belong at the State level, but you will have the tax sources now usurped by Washington returned to you, ending that roundtrip of the peoples' money to Washington, where a carrying charge is deducted, and then back to you.
Now, we also are reviving the cause of federalism by cutting back on unnecessary regulations. The Federal Register is the road atlas of new Federal regulations, and for the past 10 years, all roads have led to Washington. As of December 1980, there were 1,259 Federal regulations imposed on State and local governments. Of these, 223 were direct orders and the remaining 1,036 were conditions of aid; 59 of the requirements were so-called cross-cutting rules that applied to virtually all Federal grants. Accepting a government grant with its accompanying rules is like marrying a girl and finding out her entire family is moving in with you before the honeymoon. [Laughter]
Our regulatory task force, chaired by Vice President Bush, has already taken some 104 regulatory relief measures in the first 100 days of the administration. And of these measures, 34 provided significant relief to State and local governments on a range of regulations ranging from Medicaid to pesticides.
Secretary of Education Bell withdrew proposed rules that would have required a particular form of bilingual education -- at a cost to school boards of over a billion dollars over the first 5 years. But while there's a need for bilingual education, it's absolutely wrong-headed to encourage and preserve native languages instead of teaching the language of our land to the non-English speaking, so they can have the keys to opportunity.
Just recently, on another front, Secretary of Transportation Drew Lewis modified transit accessibility rules that would have cost an estimated $7 billion. Rather than imposing specific, rigid regulations, Secretary Lewis has allowed local communities themselves to decide how best to meet the transportation needs of the handicapped people in their areas. And that, my fellow citizens, is how federalism should work.
The job of relieving the Federal Government of the powers that it has so jealously built up over the years is a difficult one. Consequently, I asked Senator Paul Laxalt, who's been a Governor, to chair both an administrative task force and a Presidential advisory committee on federalism. These groups have been asked to examine ways to reduce the Federal Government's overshadowing power in our society and to do so as soon as possible.
Now, one of their goals will be recommending allowing States to fulfill the creative role they once played as laboratories of economic and social development. North Dakota enacted one of the country's first child labor laws. Wyoming gave the vote to women decades before it was adopted nationally. And California, during the term of a Governor Reagan -- I wonder whatever became of him -- [laughter] -- we enacted a clear air act that was tougher than the Federal measure that followed years later.
And, incidentally, while it's true that I do not believe in the equal rights amendment as the best way to end discrimination against women, I believe such discrimination must be eliminated. And in California, we found 14 State statutes that did so discriminate. We wiped those statutes off the books. Now, if you won't think me presumptuous, may I suggest that when you go back to your statehouses you might take a look at the statutes and regulations in your respective States.
The constitutional concept of federalism recognizes and protects diversity. Today, federalism is one check that is out of balance as the diversity of the States has given way to the uniformity of Washington. And our task is to restore the constitutional symmetry between the central Government and the States and to reestablish the freedom and variety of federalism. In the process, we'll return the citizen to his rightful place in the scheme of our democracy, and that place is close to his government. We must never forget it. It is not the Federal Government or the States who retain the power -- the people retain the power. And I hope that you'll join me in strengthening the fabric of federalism. If the Federal Government is more responsive to the States, the States will be more responsive to the people, and that's the reason that you, as State legislators, and I, as President, are in office -- not to retain power but to serve the people.
That great commentator on America that so many of us have quoted in speeches, de Tocqueville, once wrote: ``There is an amazing strength in the expression of the will of the people, and when it declares itself, even the imagination of those who wish to contest it is overawed.''
Well, de Tocqueville would still be awed by the will of the American people. As we've recently seen, even in our society of 225 million people scattered across an entire continent and complex in makeup, the people made their will known, and their elected representatives listened.
This final investment in the power of the people -- this is the great drama, the great daring of the American experiment. It sparked our Revolution, it formed our Constitution.
Thomas Jefferson wrote, ``I know of no safe depository of the ultimate powers of society but the people themselves.'' And it was Jefferson who reminded us that against the invasion of the people's liberty, the only ``true barriers . . . are the state governments.''
So today, fresh from our victories together, I ask you to join me in another great cause, another great revolution, and a great experiment.
Our intention, again, is to renew the meaning of the Constitution. Our aim is to rescue from arbitrary authority the rights of the people. Together then, let us restore constitutional government. Let us renew and enrich the power and purpose of States and local communities and let us return to the people those rights and duties that are justly theirs.
Now, after all this, let me say there are legitimate and very important functions of the Federal Government, of course -- the maintaining of national security, for one; and for another, the protection of the constitutional rights of even the least individual among us, if that person's rights are being unjustly denied. In such a case, it is the responsibility of the Federal Government to restore those rights. And that is a responsibility that I will gladly accept, even as I do all I can to restore your autonomy under that same Constitution.
Thank you very much. God bless you.
Note: The President spoke at 2:04 p.m. in the Grand Ballroom at the Atlanta Hilton Hotel.