Remarks at the Annual Meeting of the United States Chamber of Commerce

Thank you all very much, and good morning to you all.

Don Kendall, I have a hunch you knew exactly what you were doing. First the patriotic music and then your, I found, inspiring speech. And I understand that you have a great film and what do you know?—we've all caught that Pepsi spirit. [Laughter]

Incidentally, I think you feel as I do about this magnificent group behind me here. Sometime I'm going to come out on one of these occasions, stand up and make the audience happy by saying, "I'm canceling the speech, and they're going to do a concert." [Laughter]

Don Kendall is a powerful spokesman for free enterprise, and I think as a chairman, he's a "10."

Well, this is a happy day, and I'm honored to be with you. You've earned the great respect of individuals and organizations all across this country and, may I say, a warm spot in my heart.

The Chamber is celebrating an important milestone this week, your 70th anniversary. I remember the day you started. [Laughter] And like good wine, you've grown better, not older. The membership of the Chamber of Commerce of the United States is the only thing that's grown faster than the Federal Government—thank heaven! [Laughter]

Great organizations don't just happen; they're built by strong leaders with vision and determination to reach a greater good. Back in 1975, such a leader arrived at the National Chamber. He came with a sense of history, an understanding of the economy, a belief in America and her future and, with his new staff, worked out your statement of mission: "To advance human progress through an economic, political, and social system based on individual freedom, incentive, initiative, opportunity, and responsibility."

No one ever summed up better those values and goals we share than your president, Dick Lesher, 7 years ago. And no organization works harder to advance human progress and freedom than the U.S. Chamber under his leadership, together with your State and local chambers. Thank you all for all you're doing. Our administration deeply appreciates your decisive contributions to helping us as we try to get this country back on track.

Someone else deserves special recognition today. For 31 years he's been with you, a rock of stability and integrity for the Chamber. He's lived the meaning of Abe Lincoln's words, "Important principles may and must be inflexible."

Bill Van Meter, I know you'll be retiring soon as senior vice president, and I know you're out there somewhere. Would you and Dick please stand up so we can salute you both?

Now, some may wonder, what does an organization do for an encore after it increases its membership fivefold in 7 years, creates an army of grass roots support, sets up its own magazine, newspaper, and radio and television shows? Well, if I could make a suggestion, our administration has a few unfinished small problems—about $400 billion worth on Capitol Hill we'd love to have your help on. I think you will help us, just like you did before.

Accepting important challenges is the Chamber's stock-in-trade, and a new one begins today: How about the first business satellite television network system in the world—a system that can reach every community in this country to promote and strengthen our enterprise system? My staff said this would be the first speech carried over Biznet. Forgive me, I just had to ask them, "Do you really think the Chamber is ready for another Inaugural Address already?" [Laughter]

What you are doing here, the tremendous growth that you've recently enjoyed, all underscores a truth too often ignored in Washington: The most powerful force for progress in this world doesn't come from government elites, public programs, or even precious resources like oil or gold. True wealth comes from the heart, from the treasure of ideas and spirit, from the investments of millions of brave people with hope for the future, trust in their fellow men, and faith in God.

The American dream of human progress through freedom and equality of opportunity in competitive enterprise is still the most revolutionary idea in the world today. It's also the most successful.

Entrepreneurs are heroes of modern times. They rarely receive the credit they deserve. Treasury Secretary Don Regan recently reminded the student body of Bucknell University that it was under capitalism that mankind brought "light where before there was darkness, heat where once there was only cold, medicines where there was sickness and disease, food where there was scarcity, and wealth where humanity was living in squalor." And much of what he was talking about came into being in the lifetime of many of us here in this room. Now, I've already lived about 20 years longer than my life expectancy at the time I was born. That's a source of annoyance to a great many people. [Laughter]

But the societies which achieve the most spectacular progress in the shortest period of time are not the most tightly controlled, the biggest in size, or the wealthiest in material resources. They are societies that reward initiative and believe in the magic of the marketplace.

Trust the people—that's the secret weapon. Only when people are free to worship, create, and build, only when they can decide their destiny and benefit from their own risks—only then do societies become dynamic, prosperous, progressive, and free.

America has always done well when we had the courage to believe in ourselves, our values, and our capacity to perform great deeds. We got into trouble when we listened to those who insisted that making government bigger would make America bigger. Big government, they told us, was the wave of the future, and anyone who stood in their way was a reactionary.

Not long ago, Senator Ted Kennedy paid tribute to former Governor and Ambassador Averell Harriman, celebrating—I believe it was—his 90th birthday. And the Senator said of Ambassador Harriman's age that he was only half as old as Ronald Reagan's ideas. Well, do you know something?—he's absolutely right. The United States Constitution is almost 200 years old. And I've found that that Constitution's a good place to get ideas.

Thomas Jefferson was no reactionary, he was a true progressive when he warned, the only safe depository of the ultimate powers of society are with the people themselves. The 10th amendment tells us the Federal Government will do only those things called for in the Constitution, and all others shall remain with the States or with the people.

We've strayed much too far from that noble beginning. The whole purpose of our Revolution—personal freedom, equality of opportunity, and keeping government close to the people—is threatened by a Federal spending machine that takes too much money from the people, too much authority from State and local governments, and too much liberty with our Constitution.

We must preserve those first principles that made America strong and will keep her free. That doesn't mean turning back the clock, retreating from government's responsibility to help those who can't help themselves. We're meeting our commitment to the needy, even if that hasn't been the subject of a network documentary. [Laughter]

We devote one of the largest shares of the Federal budget in our history to assisting low-income Americans. The growth policies of low spending and taxes of the mid-sixties were much better friends to the poor than the big government madness that followed and which created so much misery.

Speaking of misery, that cruelest tax of all, inflation, with all the suffering that it brings to the poor and the elderly, is being controlled. Last month, as you know, the Consumer Price Index fell three-tenths of 1 percent, the first time in almost 17 years. For half a year, now, it's been averaging around 3.2 percent. If inflation had kept running at the double-digit rate it was in 1980 and January of 1981, a family of four on a fixed income of $15,000 would be over $1,000 poorer in purchasing power than they are today.

We're the most generous people on Earth. I don't think any of us lack compassion for the needy. But isn't it time that we also had compassion for those unsung heroes who work and pay their bills while they struggle to make ends meet? They're the heart and soul of the free enterprise system. They need some help, too.

Winston Churchill said that some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few see it as the sturdy horse pulling the wagon. Well, this administration believes the workers, savers, investors, and entrepreneurs of America have been milked and shot at long enough.

With your help, we're ending a long night of government blundering and making an historic new beginning. Yes, we are in a painful recession. The unemployed are living a tragedy. I want nothing more than to see them working again, and I'm convinced the course we've embarked on offers the best hope. I certainly won't accept the idea that a program which began after the recession was already underway is somehow responsible for that recession. '

I hope we can reach a fair and bipartisan budget compromise. And I'll go an extra mile to reach an understanding with Members of the Congress on both sides of the aisle, as long as there is a commitment to three essential priorities as maintained: continued rebuilding of our national defense; continued commitment to tax incentives; and a long-term effort to reduce the Federal Government's share of the gross national product. This means getting this budget under control once and for all.

Those who are participating in the budget discussions will be meeting again early this week. I hope they'll continue to put aside partisan advantage and strive for what is necessary and what is right. A fair and bipartisan budget package, agreed to by Speaker O'Neill, Majority Leader Baker and I, will help speed our economic recovery. And I think we should get on with it.

Now, if there are those who shun reasonable compromise, I must speak plainly: We Cannot go back to the glory days of big, never-mind-the-cost government. The best view of that kind of government is in a rearview mirror as we leave it behind. [Laughter]

And we can no longer listen to those who say "If it's commerce, regulate it; if it's income, tax it; if it's a budget, bust it." Given their way, they'd make everything that isn't prohibited, compulsory. [Laughter] A better rule is, "If it ain't broke, don't fix it." [Laughter]

Our task is to restrain spending, create incentives, provide hope, opportunities, and help our economy grow again. Our loyalty will always be to little taxpayers and never to big tax spenders.

Our administration promised a program of tax incentives so industry could retool and families could save again for their future. We've kept that promise with the first decent tax reduction in nearly 20 years.

To those who say our tax cut will significantly increase projected deficits, let me point out: Our tax cut first has to offset the tax increases already built into the system, including the social security tax increases, the largest single tax increase in our history. Americans now shoulder the highest tax burden in peacetime history, and there are a couple more increases in that social security payroll tax yet to be applied.

If higher taxes are the key to reducing deficits, why did a $300 billion tax increase between 1976 and 1981 leave us with $318 billion in deficits? I think you know why. We didn't pile up a trillion dollar debt because we're not taxed enough, we have that debt because government spends too much.

And what specifics can be given to support the repeated charge that our tax cut favors the wealthy? Seventy-four percent of the tax savings goes to the lower and middle-class who presently pay 72 percent of the tax. May I just say, in the quest for economic literacy, high tax rates don't soak the rich, they only create more tax shelters or an outright capital drain. Reducing high tax rates provides incentives to get more people paying taxes again. Just as important, we preserve one of the few systems left on Earth where people at the bottom of the ladder can still get rich. That's what America should be all about. From now on, more of what people earn belongs to them.

Now, it's true that our program, just 6 months old, has not solved all the economic problems we inherited. As Don Kendall pointed out, our administration did not have the luxury of starting out with about 6-percent interest rates, such as we had back in 1977. We were left with interest rates of 21 1/2 percent, the highest in more than a century. And inflation in '77 was only about half what it was running in January of '81.

It's a bit ironic to hear those who insisted the tax program be administered in drops now saying the medicine didn't work. Well, the medicine will work when the patient finally begins to get it. The first real dose begins with that 10-percent tax cut in July and the additional 10-percent cut in July of 1983.

Now, some in the media have been telling us here in the trenches that the business community questions the wisdom of our program. I'm sure you can understand how hard this is on our morale. [Laughter] Since the Chamber represents a great cross section of the business community, I wondered if I might ask you a few questions?

Number one, Federal spending tripled in the last decade alone and shot up by 17 percent in 1980. Would you agree that by trying to hold down runaway spending, by trying to control those so-called budget items we've been told are uncontrollable, that we are doing the right thing and should stick with it? [Applause] Thank you.

Now, taxes on the people doubled between '76 and '81 and would have increased another $300 billion between '81 and '84 without our program. By trying to help families keep their heads above water, refusing to tax them like millionaires, are we doing the right thing and should we stick with it? [Applause]

Now, our program began, as I said, after the recession was underway. Now with growth in spending cut nearly in half, regulation growth cut by a third, inflation down by almost two-thirds, the prime rate down 5 percentage points—still too high, but headed lower—and strong new incentives to save just beginning, are we on the right road to a lasting recovery and should we stick with it? [Applause]

Well, we get an A plus. [Laughter]

And I just have one more question. Will you mobilize your 240,000 members and tell the Congress what you just told me? [Applause] The Sun just came out. [Laughter]

Every time personal tax rates go higher, it becomes more difficult for firms to compete in world markets. It now costs $1.70 just to compensate a worker for each dollar increase in the cost of living. Instead of workers and management trying to solve this problem by opposing each other, why not join forces and help us get government off your backs so you can get on with the task of saving American jobs, rebuilding our economy, and raising the standard of living of all our people?

With your personal initiative, ingenuity, and industry and responsibility, we can make America work again. You know we can. But as we rebuild this blessed land, we'll need that extra dimension of faith, friendship, and brotherhood that makes us good neighbors, good people, and makes America a great country.

I believe standing up for America also means standing up for the God who has so blessed this land. We've strayed so far, it may be later than we think. There's a hunger in our land to see traditional values reflected in public policy again.

To those who cite the first amendment as reason for excluding God from more and more of our institutions and everyday life, may I just point out, the first amendment of the Constitution was not written to protect the people of this country from religious values—it was written to protect religious values from government tyranny.

One of America's greatest strengths is our tradition of neighbor caring for neighbor in times of trouble. We've launched a nationwide campaign to encourage citizens to join with us to determine where need exists and then organize community volunteer groups to meet those needs. A great challenge, and all the more reason to have as Chairman of our Task Force on Private Sector Initiatives, an individual we both know is an outstanding leader—Bill Verity, your own chairman a year ago.

Now, Bill and I aren't asking you to take over the social welfare system. We're just asking that you give generously of your time, your know-how, and your imagination to help Americans help themselves. Many of you already do. When we say Chamber of Commerce, what comes to mind?—community leadership in economic development, job creation, education, medical care and special assistance to the elderly, the disabled, and the blind. American business does care and is involved. Just keep doing what you do best, and ask more of those around you to pitch in and help.

A different kind of volunteer initiative is being taken by a group of banks in Ohio and by the First National Bank & Trust of Plainfield, Indiana. They recently lowered the interest rates on new car loans, which were between 16 and 18 percent, to between 12 3/4 and 13 percent, and committed between them millions of dollars to these programs. In the first few weeks, the sale of new cars increased to several times what had been the monthly average. The bankers involved said, "The financial sector has to pitch in and help," so we can get the economy moving again.

Your 70th annual meeting is living proof that democracy and freedom are alive and well in America. But as you know, America is more the exception than the rule around the globe. Now, some in this country say, "Well, freedom is fine for us, but we can't worry about it for everyone else." Well, freedom wasn't won here without the help of others. [Wherever freedom is lost,] ¹ it's diminished everywhere, and freedom is never more than one generation away from extinction.

¹ Editorial insert per the advance text of the President's remarks.

Francis Bacon wrote, "... In this theater of man's life it is reserved only for gods and angels to be lookers on." America cannot afford to drift through the 1980's as a spectator. We're deeply committed to seeking peaceful resolution of conflicts in the world. World peace and our own interests continue to be threatened by regional conflicts.

Two such conflicts are now dramatically in the news. Yesterday we witnessed the culmination of Israel's historic withdrawal from the Sinai Peninsula. In a region beset by doubt, the Israeli withdrawal is an expression of the faith in a more peaceful future and a triumph for peaceful diplomacy with few historic parallels.

The vision of Israel and Egypt sets an example for all nations to follow. My administration will continue to pursue peace within the Camp David framework, through renewed efforts to complete an agreement on autonomy for the Palestinians of the West Bank and Gaza. That vital next step offers the best hope for maintaining the momentum of the peace process, a process that can lead to a triumph of shared humanity over age-old hatred.

Over the weekend, our attention has been focused also on the serious situation in the South Atlantic. While the situation is increasingly difficult and time is surely running out, we remain determined to do all we can to help Britain and Argentina resolve their differences without further conflict.

Working for peace is both a moral duty and a practical necessity. We should have no illusions. This task is immensely difficult, and we can no more solve the world's problems than we can isolate ourselves from them. But the search for peace is the surest way to preserve all that we cherish and avoid the nightmares that we fear.

Another very important way the United States can contribute to world peace is by helping stimulate international trade. The assistance of the United States Chamber and your international division in developing new markets, more exports, and encouraging lower trade barriers will continue to be invaluable.

It would be wonderful if we could secure peace through trade alone, but you and I know we can't. We must restore the strength of our Armed Forces which have been neglected for too long. The Soviet Union has deployed a military arsenal unequalled in all history. The American people will no longer tolerate a mere facade of security. They expect our planes to fly, our ships to sail, and our helicopters to stay aloft. There will be no retreat in the commitment of this administration to make sure that they do.

But again, let me say, this we must do as a part of our effort to preserve the peace.

How much would we have spent to avoid World War II? Can we put a price on the lives lost on Guadalcanal, on Tarawa, Omaha Beach, Anzio, or Bastogne? Every penny we spend on defense is for one sacred purpose: to keep young Americans from having to shed their blood in a war that could have been prevented.

While we rebuild our deteriorated national defense, we're also working for essential reduction of the weapons of mass destruction. A freeze in the arsenals of these weapons is not good enough. We must have mutual and verifiable reductions, and this we shall strive for.

Now, having said this, let me point out we're striving just as hard in the defense program to find savings and eliminate unnecessary spending as we are in every other department of government. We believe such savings can be made without retreating from our effort to redress the imbalance that exists today.

I'm also willing to look at additional revenue sources, so long as they are not inconsistent with the tax incentive measures for individuals and business that were adopted last year. And if there are alternative budget reductions to those we proposed in the '83 budget, I'd like to hear them. The all-important thing is for all of us here in Washington to come to an agreement on how we're going to proceed toward a balanced budget, and then to stand together with no partisan difference dividing us and say, "Here is the bipartisan solution we offer to our economic problems."

Once this is done, we can proceed to a balanced budget and then begin the reduction of our national debt. Burning that mortgage is going to be the biggest fire since the burning of Rome. [Laughter]

This nation has no mission of mediocrity. We were never meant to be second-best. The spirit that built our country was bold, not timid. It was a spirit of pride, confidence, and courage that we could do anything. Well, we still can.

I don't believe for one minute that America's best days are behind her. I don't believe any of you doubt that with the right tools and incentives to do the job, American workers can and will be every bit as skilled, dedicated, and productive as are our German and Japanese counterparts. America's greatest moments have always come when we dared to be great, when we believed in ourselves and reached out to each other to do the impossible.

We have come so far, done so much, and all in so short a time, let's not turn back now.

In his poem, "Columbus," James Russell Lowell wrote of that momentous voyage across the Atlantic. The crew had been told again and again they would soon see land on the horizon. They saw only water. They were tired, hungry, lonely, desperate, and ready to mutiny. But as Lowell wrote," Endurance is the crowning quality, and patience all the passion of great hearts . . . one day, with life and heart, is more than enough to find a world."

With your courage, your help, we can endure, we can prevail. We can find that world and bequeath peace and prosperity to our children and their children. And I know we will.

Thank you for this wonderful morning, and God bless you all.