My fellow Americans:

Last Wednesday I addressed the Nation on the state of our national defense. I spoke of our commitment to an historic rebuilding program that has lifted America up out of weakness and given us the strength and confidence to reassume our role as leader of the free world. In a world too often prey to the forces of violence and tyranny, America is once again a bulwark for peace and freedom. We've come far, I said, in building the solid foundations of a strong and secure national defense, but we have not finished the job. We must not let all that we've accomplished in the last 5 years be undermined by careless slashing at the defense budget. America must never again slide back into helpless insecurity. America must never become, as it looked like it was becoming in the late seventies, a paper tiger.

My foremost responsibility is our national security, just as it is the prime duty of Congress to appropriate the necessary resources to keep our defenses strong. This is our duty, not only to America but to the cause of human freedom. It's also our job to make sure that every tax dollar we spend, we spend well. Defending freedom over the long haul requires that we get, as it is sometimes put, "the most bang for every buck."

Defense Secretary Weinberger has already made great strides. Before we came into office, defense costs had been out of control, escalating at an annual rate of 14 percent. We got them under control. For the last 2 years, cost increases have fallen to less than i percent, significantly lower than the rate of inflation. We have saved billions, and in the process we've built the most effective fighting force in the world. But there's still more we can do. As we continue rebuilding our defenses, we must constantly look for new savings. We must, if necessary, restructure the less efficient parts of our defense program so that waste is designed out and cost-effectiveness is designed in.

Last summer I appointed a bipartisan commission to study ways that we can redesign defense appropriations and management to make every defense dollar go as far as it possibly can. To head the Commission, I chose Dave Packard, an entrepreneur and self-made man who started Hewlett-Packard in a garage in the 1930's and built it into one of our country's leading high-tech computer and electronics companies. Dave is world famous for his management skill, and his company is renowned for its efficiency and modern management techniques. The initial recommendations came in this week. They are a tremendous example of American know-how applied to an extremely complex and difficult problem. Their application, I'm convinced, would make every defense dollar more effective and make America stronger. I won't go into all the details here—just give you some of the highlights.

First is reform of the budgeting process, to give us firm, 5-year projections and 2-year budget cycles. We're the only major country in the world that rewrites its defense budget every year—sometimes making detailed revisions two or three times a year, and the waste that results is immense. No company in the private sector would survive if it couldn't plan for the future but had to hastily and repeatedly alter its plans to accommodate shifting budgets. The effect of funding programs this way is less defense and more cost. Furthermore, much of the waste in defense is directly attributable to the appropriations process. The vote delays on the MX missile and the suspension of the B-1 bomber cost this country billions of dollars, dollars that were lost forever as those systems that were set back had to be reprogrammed at higher cost.

The report also calls for less micromanagement. Instead of scrutinizing every paper clip, bolt, and bullet, Congress should give more thought to our overall defense needs and strategy. Further changes include involving the Joint Chiefs of Staff in drawing up the budget—efficiencies for more multiyear contracting, increased use of commercial products, streamlined management, and focusing accountability within the procurement process. Also the Commission suggests changes in the organization of our military that will improve their role in national security decisionmaking. We will be announcing our implementation plans in the near future. Wherever the report points the way to greater executive effectiveness, I will implement its recommendations even if they run counter to the will of the entrenched bureaucracies and special interests. I will also urge Congress to remove those obstacles to good management that Congress itself has created over the years. This is an historic opportunity for the Congress and the executive branch to work together to give the American people what they deserve—the best, most efficient, proudest Armed Forces of the world.

Until next week, thanks for listening, and God bless you.