Remarks at a Kansas Republican Party Fundraising Luncheon in Topeka
September 9, 1982 Thank you very much, ladies and gentlemen. Thank you very much. Mr. Chairman, reverend clergy, Senator Bob Dole -- I thank you very much for those very kind words. I thank you, too, for that employee that works those long hours over there at the White House. And Governor Sam Hardage -- if these people worked as hard as I'm sure they're going to work -- and your runningmate Dan Thiesen, State chairman, Governor Bob Bennett, and Republican National Committee members Mary Nell Reese and Huck Boyd, and your candidate from this district for Congress, Morris Kay, who I am just waiting anxiously to greet in January in Washington, D.C., and my own chairman here when I was a candidate a little while ago, Pete McGill:
I was deeply saddened last Saturday, as I'm sure all of you were, when I learned that we had lost a fine and a great statesman, typical of the kind of men and women that Kansas contributes to our nation, a good friend, Keith Sebelius. I know that his wife and all of you here in Kansas must be very proud and must miss very much this fine man. We're united today around the principles that he fought for for six terms in Congress.
You know, the choices are very simple for us. Bob said it correctly: You can't go in and instantly clean out the stable and change things that have been piling up for as many years as they have. [Laughter] I suppose that I could have reworded that -- probably should have.
We have started, and I think in this less than 2 years -- it's been about 20 months now -- I think that this party, because it has been a team effort right from the grassroots, from all of you who've done the work, for all of you who have, when it was necessary, contacted Representatives as to what you wanted -- have made a start that I don't think any of us in our wildest dreams thought could have been made in just this short 20 months.
When we started, the Government was spending at a rate that increased every year 17 percent. The taxes had doubled in the last few years before we got there. The interest rates were 21\1/2\ percent. Inflation had been double digit for 2 years in a row, and was then at 12.4 percent. There were other things that were going on.
Unemployment -- bad as it is today, and it is bad, and it's worse than it was. The only thing that we can say is it had been steadily coming on, an increase in unemployment, since 1976, showing that there was something basically wrong in the pattern that was being followed. And it was almost 8 percent by the time our administration started. Yes, now it is at 9.8 percent, and it is tragically the last thing that recovers when you come out of a recession.
Well, now that increase in the rate of spending by government is down to less than half of what it was 20 months ago. The interest rate is 13\1/2\. And if you think I wasn't happy this morning on the way in, to see the Topeka Capital-Journal, where the Capital Federal lowers the new home mortgage rate to 12\3/4\ percent, well below the figure that it's been before. Henry Bubb is doing his bit there -- because one of the great sources of unemployment in our country is the slack in the housing industry that has been created by the high interest rates -- to once again bring back and help bring back that dream of everyone owning a home.
But the 21\1/2\-percent prime rate is now 13\1/2\. The 12.4-percent inflation rate is 5.4 so far this year and probably will end up some place in that vicinity for the 12 months -- when the 12 months are up. And as I say, we've reduced the size and the rate of increase. We won't really be happy until we've flattened that out and made that come down to meet the revenues that are coming in.
Now, you've got some fine candidates here both at your State level and your candidate here for Congress -- another one from another district, but we'll talk about the one, Morris Kay, who is here for this district, and why we need them so much. In addition to some of the things that I've just mentioned that have taken place in Washington -- a whole turn -- when you stop and realize that for almost 20 months -- after 20 years of government debating how much it was going to spend on what -- for 20 months, the argument and the debate in Washington is over how much we're going to cut. No, we didn't get all the cuts we asked for -- not in the give-and-take of the legislative process. But when you come up with about 80 percent of what you asked for, you figure you'll come back next year and pick up the rest, plus some more which we're going to do in 1983 and in 1984.
I know that your candidate for Governor, Sam Hardage -- I know that his opponent, the incumbent, suggests that the way out of the economic problems for Kansas State government is a tax or taxes. Sam Hardage says you can do it by reducing wasteful spending. Well, I'm heart and soul with him on that. I know that to improve the business climate, to encourage more business activity here in the State and more to come to this State, he's formed, already, a commission of citizens to find out ways to improve the business climate.
Sam, we had the same problem in California back in 1967 when I started as Governor. There wasn't a major industry in California that had not canceled whatever plans it had for expansion in the State of California because the business climate had become so bad. And the State was spending more money than it was taking in, and I understand that's been happening here. And I understand, like California, it's not suppose to happen under the State constitution. The way to turn that around is to shut off their allowance. [Laughter]
We turned to the private citizens of California at that time, and they came in droves -- volunteers. All they needed was to find out that someone needed them and wanted them to come in. And we had, for 117 days, more than 250 volunteers from the business community, the top experts in their fields, who went into 64 agencies and departments of State government and came back and told us how government could be made more economical and more efficient by adopting modern business practices which government had not done.
Well, let me tell you something about the Federal Government and why we need Morris Kay there at that end. We have just had a report in our Cabinet Room after all that we've done in the 20 months and the cutting back in big spending programs. But we have been surveying -- and with help from the private sector -- the machinery of Federal Government. And we have discovered where there are literally thousands of people doing by hand what in every business institution in America is now being done electronically. We have found that the business practices are from another age, and we're going to work on that and make the changes that will not only make government more effective, more efficient, but more economical.
There's been a great deal of talk, and I'm sure it must have disturbed many of you, that in our cutting that we have picked on the helpless, the needy, the poor, and that in some way we're seeking to deprive them of the things that they must have because they have no place else to turn. They must depend on the rest of us for help. Well, that is not true. What we have really been getting at is the excessive amount of bureaucracy that it takes to deliver a dollar to a needy person or a helpless person in this country. And it takes more than the needy person is getting. The war on poverty created a great new upper-middle class of bureaucrats that found they had a fine career as long as they could keep enough needy people there to justify their existence.
I remember as Governor that I vetoed one of the Federal programs. It was a project to take 17 people, able-bodied people from welfare, and put them to work on projects in working in some of the parks in an area in California. Now, you'd think that sounded pretty practical and what we'd all like to do. I thought it was, too, until I found out that half the total budget was going for 11 administrators to see that the 17 got to work on time. [Laughter]
It is not only the bureaucracy that we must cut back on, but we have found that in the effort to do good that a great many people who have no real moral justification for being beneficiaries of these programs are there. We have just recently found out, for example, in just one first check -- we haven't even gone nationwide -- that when 8,000 people are receiving social security checks, and they've been dead for an average of 7 years, there's a little sloppiness that needs to be corrected there. [Laughter]
Well, this is going on and, as I say, it's kind of fun. It causes a lot of surprise in Washington. Well, any time you apply common sense in government, it causes some surprise. [Laughter] So, we're going to keep on with that.
And as I told the audience in Manhattan this morning, yes, we came to a point and, thank God for Bob Dole, because we discovered after last year's victory in budget cutting and our great -- over a several year period -- tax cut that was to come in installments with the third cut due next year -- and, incidentally, I understand that Morris' opponent doesn't think that you should get that tax cut next year, and he would take it away from you. We'll die in the streets fighting before he does. [Laughter] We found this year that, again, in that legislative process, we could not get the continued reductions in spending unless we were willing to go for some new revenues.
Well, we didn't really point out, and I don't think Bob has pointed out, that when we submitted our tax cut program last year, it underwent some changes on the way through the legislative process. The tree had some additional ornaments hung on it. So, many of the things that are in the recent package that was just passed, of budget cuts and tax increases they were called, was getting rid of some of that baggage that we hadn't asked for. And a full third of that tax increase is not an increase at all. It is a plan we have for collecting taxes from people that owe them and are not now paying them.
So, we're going to cut the spending or reduce the deficits over the next 3 years by $380 billion -- is our projection. And thanks to the engineering of Bob Dole and his cohorts there on the Finance Committee, even with this last tax package which caused a great deal of controversy, even with that, your tax cuts over the next 3 years will amount to $335 billion, in addition to the reductions in spending.
The average American today has $400 more in his pocket because of the cuts in taxes so far. Next year that will be $788 for the average citizen. But they have even more than that. Because of the cut in inflation, a family of four with an income of $15,000 has a thousand dollars more purchasing power today, just from the reduction of inflation, than they would have had had inflation stayed at the 12.4 we found when we got there 20 months ago. So, I think that we've been doing a few things.
Now, I'm trying to be brief because I know I've gone over my time, and we're all supposed to be in an airplane now on our way to Utah. [Speaking to a member of his staff:] And don't get nervous, we're going to get there. [Laughter]
There has also been a great deal of discussion about the fact that the one place where we are spending and where we have been willing to increase spending is in the matter of national defense. Now, at the same time, we have a citizens' committee of businessmen, with the full cooperation of Secretary Cap Weinberger, who are in the Defense Department going through, doing what I told you we did in California, to see where there are areas in which legitimate savings can be done -- not the kind of savings advocated by our opponents and the kind of savings advocated by Morris' opponent, which would just simply cut out weapons systems and reduce our ability to defend ourselves.
When we took office 20 months ago, on any given day half the airplanes in our military could not fly for lack of spare parts. Almost the same percentage of naval vessels couldn't leave port, either for lack of spare parts and machinery or lack of full crew to send them out.
Yes, we stepped up the defense spending. At the same time, we now have teams in Geneva, Switzerland, who are negotiating with the Soviet Union for outright reductions in strategic nuclear weapons. Nuclear freeze, yes -- after we have reduced the number of weapons in the world and reduced the Soviet Union to no more than we, ourselves, have.
But again, to those who say that that is so extravagant, may I point something out: Our defense budget is 29 percent of the total budget, and 53 percent of our budget goes to those social needs, those human needs that help other people who must have help. Well, if we go back to the days of Camelot and to the late John F. Kennedy, his military budget was 46 percent of the total budget, and only 27 percent was being spent on the social needs. And ours is reversed -- 29 percent for military and, as I say, 53 percent for those other needs.
But the very fact we have shown the will and intention of building up is what has brought the Soviet Union to the bargaining table. It was all explained in a cartoon, one of my favorite cartoons, one day. It was a cartoon of Brezhnev speaking to a Russian general and he was saying to the Russian general, ``I liked the arms race better when we were the only ones in it.'' [Laughter]
The volunteer military is working. There has been an upgrading in the quality of the young men and women who are enlisting in the service. We have a full complement. We're not short as we've been in the past because, again, in a little spending and with that defense budget, we decided to try and pay the people who wore the uniform to defend their country something commensurate with the job we were expecting of them, instead of treating them as draftees, which they weren't. And the result is a morale that is a joy to behold.
I'll tell you a little story -- a favorite of mine, and I've told it before. The Ambassador from Luxembourg sent me a letter. And he said that he'd been up on the East German border looking at the Second Armored Cavalry Regiment. And he discussed what a fine outfit it was and what great shape they were in and everything, and then he said that when he went to his helicopter, a young 19-year-old trooper followed him over. And he asked the Ambassador, he said, ``Can you get a message to the President?'' And, being an Ambassador, he allowed he could. Well, he said, ``Will you tell the President for us that we're proud to be here and we ain't scared o' nothin'.'' [Laughter]
Now, I know there are people that when you say that they say, ``Oh, see, look, he's a warmonger.'' Well, like many of you, I've seen four wars in my lifetime for our country. I don't want to see another one. I look at those young men when they're in formation outside for a ceremony there at the White House, and I say, ``How could anyone think that anyone in this position would want to send those young men out into battle?'' No. But the very presence of those men is what brings peace nearer. They are the peacemakers, because I don't think the Soviet Union would have been at the bargaining table in Geneva if they had not seen our determination to go ahead building up our ability to defend ourselves.
Our goal is peace -- world peace. And we can only have it if we show them we have the determination. None of the four wars that I mentioned ever took place because America was too strong; they took place when other people thought that for one reason or another we were unwilling to defend ourselves.
So this is just a kind of a sum-up. And as I say, I've stayed longer than I should. But it's so much fun talking to you.
Now, the reason for being here, believe me, please send this man to the statehouse and his runningmate, Dan Thiesen, to help him. Send those others that he's going to need there to help him in that job that has to be done, because the other part of our program, the federalism, that is the program in which we're going to restore the tenth amendment of the Constitution. And that is the amendment that says the Federal Government shall do only those things specifically called for in the Constitution, and all others shall remain with the States and with the people. And it isn't going to work if it just starts out in Washington and you don't have people like this at this end that believe in it and want it and want to make it work. And he will.
And, of course, you know we not only intend to send those functions back that belong, we intend to send the sources of revenue to pay for them. We're not going to just dump them on the States and the local communities.
And you send Morris back there to Washington because you may have suspected that we need a little help in the House of Representatives. [Laughter] We've been doing pretty well over there in the Senate, and in fact, very well. We couldn't have accomplished what we have if we did not have for the first time in twoscore years one house of the Legislature, the Senate.
And now we need that help over there on the House side. We need it because bottled up in committee there in the House right now is the amendment for a balanced budget, which we must have. There's no reason why the Federal Government should be free to spend out of control, beyond its means, knowingly and willingly, and then foist off on our children and grandchildren a trillion-dollar-plus debt.
My dream is that before we leave that place, we will have -- if we could only even have made the first installment on starting to reduce that national debt and let our children know that we don't intend to leave it all to them.
And so we need them. We need their help. We need the other amendments of which I've spoken this morning, the right for prayer in school. I feel, even though it's controversial, that until someone can prove, as I said this morning, that the unborn child is not a living creature, then simple morality dictates that we assume the unborn child is a living creature, and that can be corrected in Washington, also.
Prayer in schools, balanced budget amendment -- all of those things remain to be done, plus the continued whittling down of that giant behemoth, the Federal Government, bringing it back to size and making it just halfway as efficient, if we can, as you are in your daily work and your daily businesses. And there's so much to do, and we just need their help.
So, if you feel like -- I'll get off of here if you'll promise to send them back. [Laughter] Thank you very much.
Note: The President spoke at 1:37 p.m. in the Regency Ballroom at the Ramada Inn. Later in the afternoon, the President left Topeka and traveled to Ogden, Utah.