Remarks and a Question-and-Answer Session With Reporters at the Fiscal Year 1983 Budget Signing Ceremony

February 8, 1982

The President. Good morning. I am here to sign copies of the budget. I'm sure you're all aware that these aren't exactly the entire budget; it weighs a lot more than this. This is the part that we sign. And this budget that we're submitting is the second step, really, in our program to try and bring government spending back in line with government's revenues.

We are staying with our tax program because we believe it is absolutely essential to stimulate the economy and make us able to provide more jobs. And in the last decade, we have had instances of tax increases -- double the taxes in the 5 years between '76 and '81 -- and in those 5 years, we had the biggest deficits the country has ever had. We believe that the reduction in rates does not mean a reduction in revenues, that as the economy takes hold -- from all the evidence we've had in this century of such tax cuts -- the government will get more money instead of less.

As for the budget, we've continued -- and everyone has and we're as guilty as all -- in referring to these as budget cuts. There has been no budget cut. There have been cuts in the rate of increase in spending. This budget that I'm signing is bigger than the 1982 budget. The '82 was bigger than the '81, and the '81 was bigger than the '80. What we are doing is reducing a rate of increase that, when I became President, was running at 17.4 percent, far ahead of what any increase or any tax revenues could bring in, which meant continuing to go deeper and deeper into the trillion dollar debt.

The '81 budget -- we reduced this to about 14 [percent]. While it was not our budget -- it was in place when we came here -- we did reduce it by managing to get some savings that we secured during this past year. The '82 budget would have been only about half of that higher rate had it not been for the recession. But, even so, it will be reduced to an increase of about 10.4. And this budget will bring the rate of increase down to 4\1/2\ percent, the lowest that it has been since 1969.

It is not true that it is balanced on the backs of the needy. We are still continuing to increase sizably our spending on social programs.

So now -- I know you have a question or two -- I'm going to sign this. That will be weekend reading for Tip O'Neill. [Laughter] I'll send the pen with it because he may want to make some further cuts in it. [Laughter] And this one for Howard Baker.

Q. Mr. President, you say it's not balanced on the backs of the poor and the needy, but that's what the Democrats are saying already, and they're coming up with lots of stories about people who are suffering because of the budget cuts that are already in place. What do you say?

The President. Yes, and they'll probably try to find horror stories and, incidentally, this is something I think all of you ought to be on guard against. In times such as this -- and I had previous experience as a Governor with this happening -- there are those out there in government employ who will, if possible, sabotage and deliberately penalize some individual who actually is not supposed to be penalized in order to get a story indicating that the programs are not working.

Our programs are intended to direct the help toward the truly needy, to tighten up administrative procedures wherein people who do not have real need have enjoyed the benefits of these programs.

As a matter of fact, our outlays for the elderly, $210 billion in this budget, and that's more than double the amount that was spent as recently as 1978. Income assistance, not counting social security, is $61 billion in this budget, and in the 1980 budget it was only $47 billion.

Q. Mr. President, what about this $92 billion deficit? Even some Republicans are going to have trouble with that, aren't they?

The President. Listen, we all have trouble, and we all regret it. And that budget -- how big would that budget be if we didn't have last year's $40 billion worth of budget savings that we had already passed? This has come upon us because of the recession.

The recession, I believe, was -- well, actually, the recession started in 1979, and then in the last 6 months of 1980, which by coincidence was an election year, the money supply was increased at the fastest rate ever in our history, 13 percent. But as that increase in money supply went up, so did inflation to almost 14 percent, the interest rate 21\1/2\ percent, and unemployment was around 8 million. We didn't start the decline this year, in the recession, to the present 9 million unemployed from a full employment; it was an increase over 8 million already unemployed.

Now, adding that million unemployed added the additional amount over and above our projected deficit, because it costs about $25 to $27 billion -- billion -- for each 1 percent of increase in the unemployment rate.

Now, what our plan is aimed at doing -- the combination of the regulations, the tax program, and the reduction of the increase in spending -- is to get this economy moving again to where we can produce jobs for our people. And as we do so, that same $25, $27 billion figure could be reversed.

Our goal is still a balanced budget. We cannot achieve it as early as we thought because of this recession which, I think, caught all of us by surprise.

Q. Mr. President, Tip O'Neill renewed his charge that you've forgotten your roots, and this is a budget for the rich. That's what he told us.

The President. I would like to have them give a specific on where this is a budget for the rich. The bulk of the personal income tax cut goes right across from the lower income to middle America. The average people who pay about 72 percent of the tax are getting 74 percent of the savings. The tax breaks we've given business, which they themselves supported, were breaks to enable business to finally catch up with our competitors worldwide. We're the lowest of the seven industrial nations in investment in plant and equipment and research.

Q. He says you cut Medicaid, Medicare, food stamps, the programs that the truly needy, as you say, need the most.

The President. There are still 21 million people going to get food stamps. And it is not cutting the needy and those who need it the most, it is actually, as I've said, aimed at better administration based on some of the experiences we had when we reformed welfare in California and found out that there were people who were technically, under the Federal regulations, eligible for government help, but should not have been getting it on the basis of their lack of need.

Do we honestly believe that someone whose parents earn in six figures is entitled to have food stamps because they're going to college? That's what's been going on. Any number of cases of that kind where there is abuse. And these are the things that we believe can be corrected by the tighter administration.

I've heard that argument from up on the Hill. I've never heard them substantiate it in any way. As a matter of fact, I know that Tip says that I associate with the country club crowd. Well, I've only played golf once since I've been President, and he's an inveterate golfer, and I'm sure he must have to go to a country club to play golf.

Q. Do you think we're teetering on the brink of bankruptcy?

The President. If this country were a business and had to cash out its assets and meet all its obligations, not only including the budget debt but the unfunded -- by billions of dollars -- liability for further future pension payments and so forth, this country would be declared bankrupt because the assets couldn't sell for what the liabilities are. But this country is not going to go bankrupt. I have faith in the people, and I have faith, as I've said, we're not to the point that we're actually reducing the budget to a lower figure than it has been the year before. Now that did happen in recent years, and I envy the man who did it. President Eisenhower was able one year to actually bring in a budget that was smaller than the budget he had the year before.

And incidentally, his fifth budget in office, as I understand it, was lower than the budget he inherited from the preceding Democratic administration. But I shouldn't use the word, because we want bipartisan support for our program.

Q. Thank you very much, Mr. President.

Q. How about those Argentinian troops in El Salvador? [Laughter]

The President. Wait a minute. Where's their pay item in the budget? [Laughter]

Note: The President spoke at 11:08 a.m. in the Oval Office at the White House.