Remarks and a Question-and-Answer Session on the Program for Economic Recovery With Newspaper Editors and Radio and Television Directors
The President. Well, ladies and gentlemen, this is just a typical day in Washington. We're already behind schedule. But first may I welcome all of you here to the White House.
I'm delighted to have this opportunity to talk to you, and I know that you have been briefed extensively by our people, which gives me the terrible feeling that almost anything I might say would be replowing already plowed ground. I don't want to do that. I would just like to say a few words-continue a discussion we've been having here at the table about our economic recovery program, which I know has been the subject of a great deal of briefing. And there is much speculation as to whether that continues or what we do with it or whether it should be altered in some way.
Well, I happen to feel that the program has not really had an opportunity. It didn't go into effect until October 1st. It's only been in effect a few months. But the real stimulus to the economy, the parts in the tax program that we believe are going to lead to increased productivity and an economic recovery, will come along—well, the first one not until July and then the next one in the following year.
I am determined that this program offers us the best opportunity for coming out of this recession, for eventually balancing the budget—not as quickly as we'd hoped it would be balanced, but then the recession came along and as you know with every one percentage point of added unemployment, you add $25 to $27 billion to the deficit.
So, the program that we have, as you've probably already been told but—then, so I'll repeat it. The program is based on the idea that government has been spending and taking too much of a percentage of the gross national product for itself. Government has been a restraint on the economy. Savings on the part of private individuals in America has been at the lowest of any of the industrial States. The result is we haven't had the capital pool necessary to fund the deficit spending by government and make capital available for home mortgages, for business investment, and so forth. Well, just since October and our program has gone into effect, there has been a decided increase in private savings.
So, may I point out that even with the deficits now larger than we'd expected and hanging over us, the fact is that our plan calls for reducing the deficits as time goes on until we get to the place that government is within its spending revenues. But there is hope on the scene of capital, because not only is part of our tax plan aimed at providing through tax incentives some of the capital business and industry needs for expansion and modernization, but the savings, the increase in private savings, one percentage point of that increase adds $20 billion to the available capital for investment in this country. Two percent is $40 billion. And therefore, we believe that our continued request for cutting in spending is justified.
We are not cutting below what we've been. Maybe the trouble has been our own as much as anyone else referring to this as "budget cuts." These are cuts in the increase in the budget. Next year the 1983 budget will have reduced the cutting—or the increase, I should say, in social spending, welfare spending, the human problems outside of defense; it will still be an increase of 4.5 percent in that budget. But it has been increasing over the years at a rate of 15 percent a year, and there's no way we could afford that.
Now, some programs, if you go individually by programs, say, "Well, what about this?" For example, it must look very startling in this time of unemployment to see that we're eliminating a CETA employment training program that was funded at $3.2 billion. And we are going to reduce that to a training program we won't call CETA that only calls for $1.8 billion. But out of the $3.2 billion, only $592 million was actually devoted to job training. Out of our $1.8 billion, $1.35 billion will be directly spent on job training. And we could come up with more cases of that kind, in which we're trying to get these programs back to their original intent. We don't believe that it is proper to provide free lunches for people who are above an earnings level in which they can well afford to provide the lunch for themselves. So, we're not cutting the needy. We're spending twice as much on the elderly as we were spending as recently as 1978.
I will say one word, if I may, about the defense spending, which is the other target. Either raise taxes—and if we do that, we destroy the incentive that will restore our economy—but we'll cut it out of defense spending.
I'm sure you all must know something that I thought I understood before I came here, but now it's been confirmed that there are things that, in this job—there is information that you have that probably you're the only person, plus a few immediately around you who have that information. I have to tell you that I am as firm in my conviction that the very safety of this nation requires that we go forward with the defense spending program as we've laid it out. The difference in potential and what the Soviet Union has built up to in the rate at which it is increasing, building is going to leave us still a number of years before we even begin to close the window of vulnerability that has been opened between us and the Soviet Union. So, if it will encourage any, though, you might be interested in knowing that the bulk of the defense spending is for manpower, for maintenance, and for readiness. And if we eliminated all the major weapon programs that are scheduled, it would only reduce next year's deficit by $6.5 billion, and it would at the same time send a message to the world that we were unilaterally disarming. So, we don't think we're going to do that.
Now, incidentally, George Washington once, when he held this job, was faced with the Continental Congress trying to pass a bill that would limit the standing army of the United States to 5,000. And Washington said, "Well, wouldn't it make more sense if we passed a law that said any invader would have to limit his force to 3,000?" [Laughter] I think either one was as practical as the other, but I'm not going to go on talking here. I'm sure there must be things that maybe you—yes.
Q. Mr. President, some of us just got back from El Salvador, where we were told by Argentinian citizens that members of their army are over with—under CIA aegis and funding—in Honduras training anti-Nicaraguan individuals to harass the government there and the supply lines from Cuba to the rebels in El Salvador. I realize that, you know, this is pretty touchy stuff, but many questions and many reports from the Washington Post had mentioned these reports. I wonder if you couldn't give us a little more elucidation on what you're doing there. And isn't it involving a much wider war when you bring in not only Nicaragua and El Salvador but now Honduras?
The President. You're right, it's a very touchy subject. I'm going to plead what I did in the press conference yesterday. I'm going to be making a speech on the whole Latin American affair to the Organization of American States next week, and therefore I'm going to reserve any comments that I might make with regard to our neighbors to the south until that address.
Q. Mr. President, I'm from Harrisburg, Pennsylvania. We in central Pennsylvania are still feeling the aftereffects of our nuclear accident on Three Mile Island. On May 18th the voters of central Pennsylvania will have a nonbinding referendum on whether to restart the undamaged reactor, even while the damaged one has not yet been cleaned up. My question, sir, is, do you have any feelings for or against these referendums? Would a decisive vote in either direction help shape your administration's future policy on nuclear power? And do you feel that a damaged reactor should be cleaned up before a nondamaged one is started again?
The President. I would only have to say, first of all, I do believe in nuclear power, and I think the antinuclear forces in this country are basing their views on a lack of information. I'm not going to say they're ignorant; it's just that they know so many things that aren't true. But I believe in it, and I believe that it is going to be essential to this country and to the world to develop it.
But I must say there, I'm not qualified to answer that question. I'd have to look for the answer to that to others with regard to the damaged reactor and whether there is any complication in starting the others, because I do believe this: We have a profound responsibility that, as we go forward with nuclear power, we must do it on the basis of every precaution for safety that can possibly be taken.
Q. Mr. President, if I may follow, sir, you do not, then, worry about the local referendum for that?
The President. Again, I don't think it's possible in such a referendum. I believe in democracy, and I believe in the people's right to vote and have defended it very much. But I don't believe that an issue of this kind, that they can have the information that is necessary to make that decision.
Q. Mr. President, I'm from Buffalo, New York, sir, and I'd like to ask you what do you say to—on the economic program now—what do you say to the autoworker or the steelworker in our area who, 10, 15 years, and, in some case 18 years seniority, who have been told that not only are they laid off but they may never have a job waiting for them again in the auto plant or the steel mills?
The President. Well, again, I think that the plan has to be to go forward to try and restore this economy. At the same time, we have been doing everything we can to help two industries that have really triggered the recession—housing and the automobile industry. And both of those, I think, have been mainly affected by the interest rates, because both are installment-buying—you might say—industries.
The interest rates have come down. They fluctuate a little bit as we're beginning to bottom out in this recession. I think they're going to come down further in the next several months. This has to be the target and we're going to work very closely.
We approve of the level of increasing the money supply the Fed is aiming at now. We think, in the past, what we've had is not a level that was either too high or too low, it was a roller coaster. It was either up here or down there in past years. In the last 6 months of 1980, we had the greatest increase in the money supply in those last 6 months that we've had in the history of the Fed—13 percent. And with that came 21.5-percent interest rates and double-digit inflation for the third year, around 14 percent. Now we have inflation down to single digit, and the interest rates, as I say, have shown that they're beginning—they're going to be a little volatile here and there, but I think they're coming down.
At the same time, we have been doing everything we can with regard to what we think is some unfairness in the foreign competition that has also affected the automobile industry.
But I think the main point is to get this economy back on its feet. Unfortunately, unemployment is the last thing that recovers when you're coming out of a recession. That's the longest term thing.
We have extended money now for help to those who are unemployed. But, again, as I say, it's concentrated in about 10 States where they really have—and those are the States—it's very curious when you look at a map. The two States up there in the Northwest, the lumber States—they are with the exceptionally high unemployment. And then you go over here to where the automobiles and the steel industry and so forth, and they are the high. But we're going to do everything we can to ease that situation.
Screen Actors Guild
Q. Mr. President, you have spoken often and with some great deal of pride about your years as president of the Screen Actors Guild. It must have had some effect on you when the current president of that organization sided with the rebels in El Salvador and, in fact, handed over a very large check to help buy them bandages, as they think that money will be used for. It must have had some effect on you.
The President. It sure did. I was very proud of the Screen Actors Guild for many years. I was in charge of negotiations for about two decades there with management on a basic Guild contract, and I was president six times.
At that time, the Screen Actors Guild—I know people don't think actors can have that much sense, but they did—the Screen Actors Guild was probably the best force for constructive good in the motion picture industry of anyone in that industry, and that didn't come from me. Those were words that were spoken by management of the Guild. But the Guild had a solid rule that it did not engage in politics, that our members crossed the spectrum in their own personal views, and therefore, the Guild would not dare to speak politically. So, the Guild would not participate in politics, nor would we allow politics in the Guild. That has been changed under the present administration.
And being a lifetime member—I guess I'm free to speak as a member—I'm very disturbed. I thought that we were better off under the previous rule.
Rapid Deployment Force
Q. Mr. President, what kind of priority do you give the RDF, and do you think it presently is a viable force—the Rapid Deployment Force?
The President. The Rapid Deployment Force? I think it is. I think it still has a way to go, as does all of the military and what we're building up. But I think that it, yes, is one. And I think—maybe this wasn't part of your question, but maybe you had this in mind also. We have been greatly encouraged in the last several months with the increase in enlistment, but also with the increased level, caliber of the person who is enlisting and the great increase in reenlistment, particularly of noncommissioned officers, which had been a great drain on the military previously. There is an esprit de corps now in our military that is very heartwarming to see.
I got a letter from a kid on a submarine who told me, he said, "We may not be the biggest navy in the world anymore, but we're the best." And there's a lot of that feeling out there among the Services. And I think we have to do some things to augment—I know Karen 1 says I've gone beyond what I should, but well, there was a hand back there that I missed way back, and then I know I have to go.
1 Karna Small Stringer, Deputy Assistant to the President and Director of Media Relations and Planning.
Q. Thank you, sir. In our briefing this morning, we were told that some of us in the press had misinterpreted or misconstrued what you said yesterday in your press conference with regard to your optimism in terms of the economy. You said we're going to bottom out of the recession—
The President. Yes.
Q. —in the long run. Could you clarify that for us now? When do you think we're going to find this bottom here and start to climb back out .
The President. Well, I've been trying to avoid a date, because I found out—we did talk in terms of spring or early summer and then found out that as the stories went on, this was just becoming, kind of by common usage, as if we were making a statement of fact. And we think the danger of building that up and then, suddenly, if you pass the first day of that particular month and something has not happened as yet, it'll be viewed as a calamity. So, we think that it's just better to tell you that we believe that things are going to improve in the second quarter, and we believe we will be on an upturn in the latter half of—the last two quarters of the year.
Q. Do you have a contingency plan if things don't turn around as you expect them to?
The President. A contingency plan? Well, to continue, as I say, I think we have the program in place. I will say this to you, honestly, that the program, of course, depends on the Congress passing the second installment, which is the budget that we have up on the Hill as of now. They can delay this recovery very much if they do not give us the further cuts that we're asking for, and remember, they are cuts in the increase in spending. The whole Government as a whole was increasing at a rate of around 17 percent when we took office. We have that down now to half of that. And we want to get it further and make it more practical.
I have to be a little cautious, because I am the original fellow who thinks there's a pony in here somewhere and I'm-
Q. Mr. President-The President. Karen says I have to stop.
Q. one last question. I'm from New Jersey and we're kind of concerned about toxic chemical dumps. Is there any room in the budgets to come for some more Superfund legislation or some funding from the Government to help clean up these dumps in New Jersey and other States?
The President. I wish Dave or Don Regan or someone had been here to answer that. I can't recall right now what the situation is. We're as concerned as anyone about it and certainly recognize the threat in that and want to do whatever is required, and will do that. But I—they tell me. I know, now I'm later than I was for the next appointment.
Q. Thank you.
The President. Thank you very much for being here.
Note: The President spoke at 1:05 p.m. at a luncheon which was held for the editors and directors in the East Room at the White House.
Ronald Reagan, Remarks and a Question-and-Answer Session on the Program for Economic Recovery With Newspaper Editors and Radio and Television Directors Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/245191