There have been some changes, and I know there are several of you that sent regrets -- as I said, Millicent [Representative Millicent Fenwick of New Jersey was attending a luncheon hosted by Mrs. Reagan in the Red Room] is across the hall in the Red Room. But I am pleased, also, by the fact that one of the things we discussed the first time was the position of women in government, and I told you what we were going to try and do. Now, I don't know whether we've completely satisfied you yet, but we're not through yet. But I'm just wondering how close we're coming now to having as many ladies present who are members of the administration as there are who are Members of the Congress.

So, I haven't had an opportunity to -- I'll tell you what. [Laughter] I know you've all met each other at each table, but all of you who work in our end of the shop, in the executive branch, please just stand up and let the ladies see you. And there is one in particular who I'm going to ask to stand again so you'll be able to recognize her, because you may want to contact her, and that is Wendy Borcherdt [Associate Director of Presidential Personnel], who is here for the very purpose of seeing that your numbers increase.

So, maybe one day we'll do this again and we will outnumber you, and then you'll know we've really kept our word.

But it's been a very busy time. And someone told me the other day by actual count that I have met with, in these couple of months, more than 350 of the Members of Congress in an effort to have a liaison and -- you notice I said liaison. I was taken to task in the press the other day for calling it lay-ison. And they thought that I just didn't know, but I'll tell you, I'm guilty. The Army has some words of its own, and when I was a reserve cavalry officer, the Army called it lay-ison, just like they call oblique ob-like in the Army. [Laughter] But now I'm a civilian, so I'll call it liaison.

You know the importance that we place on the economic program, and you weren't invited to lunch now for us to try and con you into anything. But maybe you might want to engage in a discussion or talk about any of the things that might be on your mind, as we did before in Blair House, and if so, we can have a dialog instead of a monolog here. At Blair House I was able to call on George Bush, but he is in Miami, Paula [Senator Paula Hawkins of Florida] tells me. I knew as far as Atlanta, because we had him there on that very tragic situation there. And he's delighted that he and Barbara went down and have met with some of the families that have known the tragedy of what's happening there, but also to make it plain that we're going to do everything we can from this end for what we think is the most unusual, tragic situation in the country. And while law enforcement is supposed to take place at the local level, we think this is the time when the whole country would like to have Washington doing whatever it could also to help. So, we are doing that.

Q. Mr. President, I appreciate very, very much our being able to be here and ask questions. And I think as a working mother -- I have always felt very strongly that all mothers are working mothers -- one of the things that worries me a lot about the budget cuts is the fact that displaced homemakers and women who have done what we've really told them to do and tried to encourage them to do, stay home and take care of their family, may be running a tremendous risk. And it appears that the displaced homemaker program, allowing their getting back into the workplace if something should happen to their spouse or family that they need to and so forth, really is going to impact upon them. And I think when we tell them to do this, to say to them all you get for that is honor, it's hard to wear it or eat it -- [laughter] -- if you know what I'm saying.

And I'm just wondering, are you absolutely rigid on those specific programs? Is there going to be some flexibility where we can try to preserve those things that, I think, are so important?

The President. Well, and I will take some help if I can get it here, because with all the facets of all of these programs, I can't claim that I can keep everything in the front of my mind. But I think maybe we're talking about some programs that are not so much disappearing as are going to be part of block grant programs where, we believe, there could be more efficient administration of them and less administrative overhead.

You know, it's a very discouraging thing. If you would start at the very local level of government and compare the dollars it spends -- it takes for a city or town to deliver a service to a community, then move up to the county level and find out how much higher the percentage is, move up to the State level and it's higher, and move up to the Federal level and it is the highest of all, the overhead in performing a service. And we believe that by transferring many of these things and incorporating them into block grants, where we give the local community the ability to set its priorities and to operate without regulations that have been imposed from thousands of miles away, here by a group in Washington -- I'm speaking now of the permanent employees of government, of bureaucracy that tries to make rules that will fit everything from New York and Chicago down to South Succotash -- [laughing] -- out there in the country. And, so, I don't think those programs are going to disappear.

Q. Well, I guess my fear is that sometimes when they go to the local level, you'll find that if you don't have any constraints on how they spend the block grant, very often the money that they save money on is women and children. Very often when there's budget cuts, it's kind of women and children first. And it happens at all different levels. And I would hope that we'd see some real direction; that if that's going to be the focus of the thing, that we make sure when they take the block grant money that they don't cut out displaced homemakers or something because they don't have the political clout in the city hall to fight back. And I guess that's what I'm really saying. Let's make sure people don't get hurt or that certain things don't totally disappear if we're going to restructure how they're administered.

The President. Yes, well, I think that is something to look at and be very sure of.

Q. Mr. President, I want to thank you for having us. I represent Cleveland, Ohio, the scene of your debate victory. And I was very pleased in the debate when you talked about and mentioned the inequities of poor women in the social security system, and I think millions of American women were. My focus of concern, of course, is older women and, in particular, problems that the Northeast and the Midwest are experiencing. In the State of Ohio, Mr. President, we get only 71 cents out of the dollar back to our State. And I'm wondering, if we go to a block grant approach to the States, like my own State, can we be assured that we'll get our share of jobs in the defense area and in energy and so on that by and large would help our State of Ohio and other Midwestern and Northeastern States? And then we'd have the money on a State level to do the kinds of things that you're suggesting we ought to be doing on a local area. Is there any concentration on bringing more jobs to our States so that we get one dollar for every dollar in taxation we give to the Federal Government?

The President. Well, I have to say with regard to jobs of that kind and government jobs, that we think the whole program is geared at the kind of jobs that really count, and that is the revitalization of industry, the renewal of industry. And I know that Ohio is hurt worse than a great many States represented here today. Your unemployment rate is way above the national average. But that's true also of Michigan and several other of the industrial States. And the whole function of the program is geared to increasing productivity, making it possible for business and industry to invest the capital that is necessary to be able to compete once again with our foreign competitors. So, that part will have -- whether you can substitute with defense spending -- actually there, I think, the first rule is what is the best and most efficient and economical way to build up our defenses.

I think that too often in the past we have confused military spending with, let's say, trying to attain a social aim at the same time. Now, I can see if there are two States or three States, that any one of them is in a position to meet the military contract, then I think you've got to use some fairness and honesty in spreading it around. But it is true that there are some States that are just heavier in defense -- States along the coast with shipbuilding yards and so forth. And I can only say we try to be fair with the other. But the real thing that you need is the private industry put back on its feet to provide that kind of job for the people.

Q. Thank you, Mr. President. I want to assure you that we have all the skilled laborers in Ohio -- -- [inaudible].

The President. Oh, I know you do.

Q. [Inaudible].

The President. I know they are. I know.

Q. Mr. President, first, I'd like to thank you for again giving us this opportunity to meet with you over this hour, and then I want to bring you two messages from the 61 counties in Nebraska that I represent.

In the first place, my mail is very, very heavy in favor of your program. Our folks are in favor of the block grant program. We don't think that there's a monopoly on compassion nor on good judgment and efficiency here in Washington. We think that out in Nebraska, we can use those dollars better, and that the 75 or 80 percent of the money would do just as much for the programs that really are needed in Nebraska, and our folks will know better what is needed.

Our second message is our folks are saying, ``Save on that budget across the board.'' Don't -- let's try not to be distracted by -- [inaudible]. This economy has got to be shaped up, and if we came here and are fairhanded across the board, we'll all be better off, and we'll all be glad to go home. Thank you.

The President. Well, thank you very much.

Ms. Collins. [Representative Cardiss Collins of Illinois]

Q. Mr. President, I happen to represent a district in Illinois, and in Illinois, particularly in my district, we're not that pleased with your budget cuts. We find that many of our people feel that they're going to be hurt. My particular district has a lot of people who are very poor. We have a lot of people who are unemployed. We don't get a fair return on our tax dollars. So, I wish I could say the same as my colleague from Nebraska has said, but my remarks would be quite the contrary.

The President. Well, Ms. Collins, I appreciate that. But I think also that -- and I'm aware of the feeling of a great many people that this is going to happen. It isn't. What we've called the safety net are the seven programs that really deal with the truly needy. They're not going to be hurt, and we're not going to permit them to be hurt. What we are trying to do is -- well, let me just give you an example. I speak from a little personal history on this.

When we reformed welfare in California, there had not been a cost-of-living pay raise for the people on welfare in California for almost 20 years. And because we were spread so thin, what we reformed and reduced the rolls by, more than 350,000 people, not by throwing people off, they just disappeared.

We found out, in our reforms, that we were spread thin because there were people that are attracted to and take advantage of regulations, complicated regulations, to get on programs they don't deserve to be on. And so, we were spread thin by trying to take care of these undeserving people.

And I just told at our table, and I told Ms. Boggs [Representative Lindy Boggs of Louisiana] here, about the one newspaper in our State that didn't know whether my horror stories that I was telling were true about what was going on in the line of undeserving people getting in these programs. They sent a reporter out to get on welfare. He got on welfare four times under four different names in the same office on the same day.

Q. Mr. President, with all due respect, that does not surprise me. Of course, there is fraud in everything. But I think that the stories we read about in the newspapers are the exceptions rather than the things that happen most of the time. I agree with you that to the extent that welfare can be cut down because of frauds and cheats, it should be. But I'm very concerned about those people who are recipients of AFDC, who are children, who cannot speak out for themselves. And that's a -- [inaudible] -- that I hope will be in your sacred seven. Unfortunately, it was not -- [inaudible] -- this side of the -- [inaudible] -- as well as the other, and I appreciate being given the opportunity to tell you about it.

The President. Well, I think you're going to be happily surprised. I think our situation has been greatly distorted. I want to remind all of you of one thing. We're not reducing government's cost down to below what they've been getting in the previous year. We're reducing the rate of increase that has been built into them. And, no, it will stop short of the needy. I should have added to that story about California, some 350,000 people disappeared from the rolls. But we were able to increase the grants to the truly needy by 43 percent, and that was the first raise they'd had since 1958. And I think you're going to find that -- well, I have to say that I think that some of the purveyors of these programs, the dispensers of the programs are more worried about losing their position than they are about the people they represent. And they're trying to create an image that we are picking on the poor, because they don't want to lose their clientele and possibly their position.

Q. Mr. President, if you give me your promise you won't hurt the poor, I'll sit down right now. [Laughter]

The President. We won't hurt the poor.

Q. Mr. President, I would like to thank you as well for your graciousness today, and certainly for what is, I think, a new beginning in terms of the relationship with the women in Congress. We've been invited to the White House on many occasions, and I've served over four administrations. This is the first time that we've had this kind of an open exchange, and I salute you for it. As for a report from Massachusetts, I'll say that the attitude there is to give the President a chance. That's great news -- from Massachusetts. [Laughter]

The President [laughing]. Yes, yes it is.

Q. I feel very strongly. I feel that you have had a brilliant new beginning. I think that the morale of the free world has been increased, with reason, and that we have a very good and valid justification for holding our head high in terms of world leadership. And domestically, the confidence of the American people, now suddenly, is beginning to bud again. Certainly, we do not all agree on everything. But I think that we can find an accommodation that is a just one with our mutual goals.

I, personally, am very pleased that you saw fit to introduce us to the new women appointees of your administration. And I am very impressed with their caliber and their confidence and their concern. Because while we may differ on this or that, we certainly, I think, do desire and aspire to a fair and equal society. And the quality and the visibility and the involvement and the contribution of women in your administration is something that I very much applaud, and I think the American women will applaud as well, and many enlightened men. And I would hope that their ranks will continue to expand with the same degree of excellence that marks your initial selections. So, I believe that in all areas you have had a very good beginning. I wish you well, and I offer you my advice, counsel, support, and -- [inaudible] -- when the situation requires. [Laughter]

The President. Thank you.

Q. Mr. President, I'm Loret Ruppe, your Director-designate of the Peace Corps. We want to thank you very much for your most kind message of support that you sent to us on the occasion of our 20th anniversary. We are working hard on our budget. We realize that if the economy were in shreds, as it is in my home State of Michigan, there would be no money to send any volunteers overseas. And the Peace Corps and VISTA are doing the best job with what it has, and we're here at your service. Thank you.

The President. Thank you, very much.

Yes, Bobbi [Representative Bobbi Fiedler of California].

Q. Mr. President, I read recently that the Speaker of the House, Tip O'Neill, has decided to try to organize those who oppose your economic package. I'm concerned about it, because when I was back in Los Angeles over the weekend, I began to see evidence of hearings that were to be held, and I believe the intent is to undermine it. What are we going to do to try to counter that kind of an effort?

The President. Well -- --

Q. May I help?

The President. Yes.

Q. I'm the Senator from Florida, and I'd like to tell you that we have all of your problems en masse. We have the refugees. We have the largest number of senior citizens. We have the largest influx of veterans. Those States here that are losing citizens and losing voters and losing congressional seats -- Florida's gaining for it. So, we'd like to think they're the same people moving South.

I think that's a problem for the States to address. If you have taxed your people out of wanting to stay in those States, then it's a problem to address on your State -- [inaudible]. I trust the State people to make those decisions; they're coming forward. But I have the same apprehension that you have. I want to represent my people well. And with the largest number of senior citizens, the largest influx of veterans, I wanted to know, ``How do you feel in light of the rhetoric we see every evening on television and every morning in the paper that this is going to hurt the poor, and the safety net is really full of holes. How you feel?'' I ran an ad in six daily newspapers in the State of Florida. It cost $3,672. And I'd like you to know that in 2 days, we received 18,000 of them back in my office -- 90 percent supporting the President, 10 percent qualified, saying I support five, maybe not two. The largest two, of course, were supplying lunches for children -- the one commodity that you consume and can't hurt. Everything else has a black market value, all of these other commodities. That's the one that there was some concern. But they're saying, ``You support this President. You get behind him, and you do what you can.''

Now, I think 18,000 is a fantastic sample. We're going to run it in the weeklies this week, and we're going to run it in the shoppers next week, because we have a tremendous number of citizens in our State cannot even afford a daily paper, so they take the shopper. It's a throwaway, and it has a lot of space in there. So, I'm going to deliver to the Congressmen in their district -- we had six young people sorting them all weekend by congressional district. And when we run these ads, I'm going to deliver those to the Congress where I feel we're really going to have a problem.

And, indeed, the people in my State say, ``Support this President. Give him a chance.'' And that's what I think we all should do. And I commend you from the bottom of my heart for being the first President I can remember in my lifetime that wants to make a payment on the national debt and not saddle my grandchildren with it. Thank you. [Laughter]

The President. Thank you very much.

Well, Bobbi, let me also just say with that regard, there is a movement afoot right now in people raising money to help mobilize an effort and to do this same thing of getting the public feeling. Our mail, from what we've opened so far in the White House, and it's been coming in in floods, is running about 100 to 1 in support. And as I told here, and I tell the rest of you, some of the letters are just -- they're treasures. But one of them the other day that I opened -- this was a retired civil service employee. And in there, endorsed over to the Department of the Treasury, was his whole month's check for his pension that he was contributing. He wants the program, and he just wanted to give this back to the Government to be of whatever help he could.

Bob Michel showed me a letter from Peoria, and you know, if it plays well in Peoria -- [laughter]. But Bob's letter was from a man -- I went to school 20 miles away from Peoria, so I know about the Caterpillar Tractor Company. They have never before laid off employees. They now are having layoffs. He's laid off. His wife has lost her job. And yet, he wrote to tell Bob Michel that that was all right, and they'd do without their unemployment insurance if it would help get a program in that would put the country on the right track, so that we'd have the stability of knowing that the private jobs are out there.

There are things that need to be done. The other day in New York I counted up -- we know the high unemployment rate here in Washington; we know in New York and their problems, and yet, how do I explain that in the Sunday Times, New York Times, there were 45\1/2\ pages of help wanted ads, and in the Washington Post Dunday, there were 33\1/2\ pages of help wanted ads? And these were jobs calling for people of every range that you could make. How does a person in any one of those skills justify calling themselves unemployed when there's a fellow spending money advertising and saying, ``I've got a job; come fill my job''? And I've done this in other cities. Last time I did it in Los Angeles, there were 65\1/2\ pages in the Los Angeles Times of help wanted ads.

Now, someplace along the line, we're going to find that a lot of our problems maybe come from well-intentioned programs, but that have militated against solving the problems that we need to solve. If industry is out there with jobs to offer -- and I know they're not in Ohio in the steel industry, and I know that the automobile plants are closed down and you've got to solve those problems by restoring the whole economy, but maybe we've missed the boat someplace along the line, and maybe we're encouraging people to delay in taking jobs.

Q. Mr. President, I'm from New Jersey. And I think one of the most valuable aspects of this meeting here today, besides the lovely lunch, is the fact that we have the opportunity to speak directly to you. And if we're all doing our jobs correctly, we are speaking directly to our constituents. So, I want to give a little report, a person-to-person report, from my constituents in New Jersey. They are very much in support of this program. There is tremendous consensus for the cuts. They want them to be evenhanded and fair. They perceive them at this point in time to be, and they know that there are going to be modifications. They want tax reform. The size and the shape of that tax package is still an open question, but they are strongly supportive of the whole direction and the leadership that you're showing.

There is one area that -- and I just returned from New Jersey an hour or two ago -- one area that almost everyone in talking with me this weekend, and primarily the hardcore of my Republican support, that is being questioned. And that -- and I think you should know it -- and that is the area of the size of the defense request. It's not a question of whether we make up for our neglect in this area. I think there's broad consensus and agreement on that and, in fact, that was the heart of my campaign. But they're questioning whether we can absorb this size defense expenditure in a relatively short period of time.

And I think you should know that, and I think that you should know it because it is saying -- word from the homefront -- and also because you should have the opportunity, and your advisers and your secretaries of the departments involved should be planning extensive explanation of the need and the justification for the program.

The President. Thank you very much. And you make me wonder if -- I wonder if, the figure that is given for the overall defense increase, how many people realize that that's a 5-year figure? I'm wondering if a great many people are saying, ``Oh, that 30-odd billion dollars is going to be spent in 1 year.'' The net increase this year is going to be 4.8, I believe, but -- about 4\1/2\ -- it would be double that if the Defense Department had not made savings in less important items to turn that money to weapons and to refurbishing the volunteer military. And I think one of the -- part of the expense, of course, is we've got to do better by that volunteer military than we have done in the past. But I'm wondering if that might not be the cause. If they read this figure of 30-odd billion dollars and don't realize we're talking about the next 5 years for that -- --

Q. Well, that may very well be. I think there just needs to be a lot of work done in terms of understanding the program, the total numbers of dollars and how it will be phased in and how it will be targeted, in which areas. And certainly, they're all for the volunteer -- putting those expenditures in the volunteer program.

The President. Let me, if I can, just for a second here. Come here. Let me -- [laughter] -- let me just say one thing. And I think the very terms we use -- I was just saying here at the table -- the very terms we've used, I think have made many people misunderstand. We say ``budget cut.'' Automatically people think, ``Well that means next year they're going to spend less money than they spent this year. They're actually reducing the size and cost of government.'' And as we all know, we're not. We're reducing the increase in cost. On the tax cuts, they think, ``Well, how can the Government get along with less money than it's been getting so far?'' It isn't. The people of this country, even with our tax cuts, are going to face a tax increase. There's $100 billion tax increase built into 1982 that we have inherited, and all we're doing is reducing that increase. But the Government is going to have a budget next year that, even with the cuts, is going to be $45 or $50 billion higher than the present year. And I think you've touched on it, that all of these are things that we have not yet managed to make even the people who support us understand. And God bless them for supporting us in spite of that. [Laughter]

Q. Mr. President, I'm not nearly as effective as Mrs. Reagan in making you put your coat on. [Laughter] I really stood up to thank you for opening this dialog with us and making us feel that we can continue it. But we have to continue it at another time, because the President must leave. Thank you, Mr. President.

The President. All right. I won't argue. All right. Well, we shall do it again. And it has been wonderful to have you back here -- back here? -- here for the first time. The first time was at Blair House. I'm sorry we can't take any more, but good to talk to you, and thank you very much for coming.

Note: The President spoke at 1 p.m. in the Family Dining Room at the White House.

On the same day, Mrs. Anwar el-Sadat, wife of the President of Egypt, was a guest at a luncheon hosted by Mrs. Reagan in the Red Room. Prior to the question-and-answer session, Mrs. Reagan brought Mrs. Sadat to the Family Dining Room to meet the President and his guests.