You know, if I could, let me just say a few words. You can't have held that job in Sacramento for this great State, so unique in all of the country and all of the world, without having a lifetime feeling of proprietorship for it. And I've looked in the years since and seen some of the things that have happened in Sacramento. The rhetoric was never matched by deeds on the part of the one who had taken that office -- and couldn't help but have a great feeling of concern. And now with this election, my heart is filled with the greatest hope, because I know this man -- served when he was in the legislature and then when he was attorney general.

He knows the problems of the State. He has proven his capacity for dealing with them. And now from the vantage point that I look from, it is doubly important with regard to California, because I went to Washington with a dream, and the dream -- and we're going to make it come true -- was one of restoring the 10th article of the Constitution, of the Bill of Rights, that article that says that the Federal Government shall do only those things specifically called for in the Constitution and that all others shall remain with the States or with the people.

And we have drifted a long way in the last few decades from that concept of a federation of sovereign States. That was our great strength and the basis of our freedom. And my dream is that through a program we've called federalism, we are going to make that happen, and we're going to return to the States and to the local communities and to the counties those powers that rightly belong there, along with the revenue sources to fund them. We're not just going to dump them on the local taxpayers. The Federal Government, in usurping the powers and authorities of those other levels of government, has distorted the very structure of this nation and has also usurped the tax sources that properly belonged at the State and local level.

Now, if we're going to do that -- and I think it must be in your mind -- it must be awfully important who is here at this end then to organize, to manage those programs that for so long have simply been functions now and then delegated in part by the Federal Government.

There has been a philosophy abroad in the land that the States should be reduced to administrative districts of the Federal Government. Well, don't you let that happen. This country will remain strong so long as it is a federation of sovereign States. It's unique in all the world in that respect. And this is the man that I believe has the capacity to handle those enlarged responsibilities. And therefore he's the man that should be in Sacramento as Governor of this State. And when he has to cross the State line -- the constitution still says that you're no longer Governor until you come back -- and then Carol Halett will be there with him, and she'll be able to hold the fort while he's across the State line.

But let me just give you an example if I can -- and then I'm going to do something else here -- an example of what this man has in his background and what he has done for the State of California. For about 7 of the 8 years I had a hostile legislature. The opposing party had a majority in both houses. Now, maybe many of you haven't thought about this, but in the structure of government the party that has the greatest number of members of the assembly and of the senate in each case has the majority of each committee and names the chairmen of those committees. Well, one year, due to some special elections, we wound up with a bare majority in both houses. And that year, now that we had the majority in the committees and the chairmen of the committees, out of one committee that was literally a burial ground for good legislation came 41 anticrime pieces of legislation. Almost all of them, if not all, were authored by this man.

They had been buried in that committee as long as the other fellows were in charge, and they came out of that committee to the floor, and then once out on the floor even the other side that had bottled them up in committee -- where they could be kind of anonymous in doing it -- didn't have the nerve to vote against them. And in that 1 year we passed 41 pieces of anticrime legislation.

And the polls that not too long ago said that inflation was the number-one problem -- they don't say that anymore, because inflation for the last 7 months has been running at 5.4 percent, not 12.4 percent. I just wanted to get in that lick because -- [laughter] -- because I also wanted to emphasize that now, near the top if not the top of many polls, the problem on people's minds is crime. And I think the moment has come when a man with the experience, George Deukmejian, should be the Governor of the State of California.

George and Gloria, could I do something, though? I don't have very much chance to visit with the home folks. And I just wondered if, rather than me going on here -- although, I could go on quite extensively about George Deukmejian -- all the way back to what he mentioned, back to 1966 and that campaign. And I remember sitting with him and getting sound and solid advice -- was it down in Long Beach -- --

Mr. Deukmejian. That's right.

The President. -- -- we first met -- and I continued to get sound advice and help from him in all the days that followed.

But maybe some of you have said to yourself, if he ever came back out here, and I had a chance, I would like to say to him, or I would like to ask him -- and couldn't we for just a few minutes at least have -- I know we haven't got much time. But could we have a little dialog? And, if there's someone that has thought that, sing out. And we'll try to have some dialog here.

Q. I'll do it. [Laughter]

The President. Good.

Q. Mr. President, I came from here as a refugee from -- [inaudible] -- and tonight my mother is the proudest woman in the world. And only in America could I shake your hand.

The President. Thank you very much. Thank you.

Q. [Inaudible] That you're, also, very handsome. [Laughter]

The President. Well -- [laughter] -- you don't need a question. Fine; thank you. [Laughter] Thank you very much.

You know, every once in a while, these people who have come here from someplace else -- we need to talk to them to get reinspired as we see through their eyes what it is we really have, and what we, too often, take for granted here.

Yes?

Women in the Administration

Q. I heard Elizabeth Dole [Assistant to the President for Public Liaison] speak the other day and was extremely impressed with her as a representative of yours. Do you plan to appoint a lot more women like that?

The President. Yes, the question, if you didn't hear it, was that she heard Elizabeth Dole, Bob Dole's wife, who is on our staff in the White House, speak, and she was greatly impressed. And I can understand why you were. And am I planning to appoint many other women like that?

It might interest you to know that at this point, only a year and a half into office, we've appointed more women in top positions in government than anyone at that stage of their tenure has ever done. And we're going to continue doing that. And she is doing a magnificent job there.

We've got a Supreme Court Justice that's doing pretty well, too.

Q. Mr. President?

The President. Yes. Oh -- Margaret, and then a gentlemen -- were you -- --

Q. I just want to thank you so much for being here -- [inaudible] -- because as great as you are on the nationwide television, you are just as great -- [inaudible]. Thank you very much.

The President. Well, Margaret, thank you very much. Thank you.

Relations With South and Central America

Q. Mr. President, the Falklands crisis caused some bad feeling toward the United States, of course, the way it turned out. And, later, the Argentine people, I think, found out that they were slightly misled by their own government. But what can we do now to, sort of, make our neighbors to the south a little bit happier with us and all, as you did start out before you were even into the White House, with Mexico?

The President. Well, this was something that was very much on my mind, and I have long thought that our country, well-intentioned many times, but never quite succeeded in approaching our neighbors to the south and bringing these two continents together. And I have -- that, too, has been a dream, that when you look at these two continents, more than 600 million people, the richest two continents in natural resources and thousands and thousands of square miles that have never even been developed yet, all of us came here with the same dream -- came from someplace else, our ancestors or ourselves, in search of freedom. And what I've dreamed of is an accord between the Americas, where we could be friends. And we started out.

And I think that we established with our nearest neighbor, Mexico -- and I met with the President of Mexico prior to taking office, after I'd been elected -- I think we have a better relationship and a better bond than we've had. And we're continuing with that.

You're right. There was a setback over this thing that took place in the Falklands. But we're going right back to what we were doing.

We have a piece of legislation -- having a little trouble getting through in Washington -- called the Caribbean Initiative. Now, this is aimed at some of the countries in Central America and then those island nations out in the Caribbean. And it is a program to help them develop their own economies, to help them become self-sufficient and so forth. And I know that our neighbors to the south are looking at that as a sign of our intentions and to see whether we can bring it off. So, our first goal is going to be to resolve that.

But I do intend and we intend to pursue this program of bringing the Americas together. Can you imagine what that would look like throughout the world: North and South America allied together in the cause of freedom and individual liberty and free enterprise? And that's what we're aiming at. And I think there are some signs that the temporary bitterness has receded.

Yes, Jim.

Enterprise Zones

Q. Mr. President, where is the enterprise zone bill? Has it been marked up, or where is it now? The enterprise zone bill, where is it now, as far as -- [inaudible] -- is concerned?

The President. The enterprise zone -- again, this is another thing that's in committee and that we're trying to get out -- the enterprise zone is a plan not only for the major cities but for rural areas as well. We want to start it on an experimental basis of about 75 to begin with, and that is using tax incentives from the Federal to the local level as a lure to -- in the run-down areas, the centers of poverty and so forth, we can persuade businesses and industries to start up because of tax breaks that will be given; hire the people in those areas who will also receive tax breaks -- because they're presently not paying taxes; the bulk of them are on the various help programs of government -- and develop those inner cities to provide jobs in those pockets of great unemployment.

And this plan would not be one that would have a great cost, because, first of all, the local community isn't getting property taxes from those run-down areas. They've taken over most of the land in those areas now in default of taxes. The businesses that would come in would be entitled to a break in that regard while they established a business, and the people who would then become employed are presently not paying taxes -- they are a cost to the government. And so all of these could be the incentives that would bring private enterprise in to refurbish these particular areas in our country.

Yes?

Views on the Presidency

Q. Mr. President, now that you've achieved the high honor, what do you deem to be the most difficult and surprising portion of your job?

The President. What is the most difficult -- --

Q. -- -- or surprising portion of the job, now that you have it?

The President. Most difficult and surprising portion of the job? [Laughter] You know, it's kind of hard to answer, because I have to tell you, I'm enjoying myself.

It's -- oh, the -- you know, you go to work in an elevator and you go home in an elevator, and sometimes you get a little claustrophobia. The quarters are beautiful, and it's very fine living and all that. But every once in a while you do look out the window and you see people walking by, and you say, ``You know something that they can do and I can't -- I can't just walk down to the corner drugstore and pick out a birthday card or a magazine or something.'' And so, then you go to Camp David and get it out of your system. [Laughter]

No, I really -- I think that we've been fairly successful, and I know I've got to wind this up now, because I'm keeping everybody here much too long.

Sometimes, I suppose one of the things -- yes, I can think of something. Sacramento is a capital, too, but even that didn't prepare me for the greatest custom in Washington, which is the leak. [Laughter] I've gotten, sometimes in the Cabinet Room, that I've addressed particular remarks to the chandelier. I'm sure that must be where they're listening. [Laughter] And the worst thing about some of the leaks, though, is that they're not based on factual information, just on a little information. And so often the frustrating thing is you can't respond and correct them, because they deal, for example, with, let's say, international relations. And to refute the error that has been widespread then through the news, you would have to reveal things that you cannot diplomatically reveal.

Yes?

Federal Spending

Q. Mr. President, do you think you could hold the budget-busting bill down so that the people of this country could feel confident that the Federal Government is actually under control now?

The President. You all heard that question, I think. I don't have to repeat it.

The Federal budget is out of control because of a number of programs and, again, passed with the best of intention, the programs to help people who require government help. But they were passed, and fixed in them was the trigger that automatically increased them in cost. And this is what's uncontrollable. And so, you come into office, and the budgets have been proposed for a few years ahead, just as we have to when we submit this last budget bill -- suggest where they're going. But automatically those programs increase.

So, we passed last year in our big economic recovery program -- we passed enough cuts to reduce spending by $130 billion over 3 years. The present program that we passed last week with the tax so-called increase but I call ``tax reform'' in it -- that over a 3-year period will reduce the spending by $280 billion over the next 3 years. And yet all of that is in the increase of spending. That isn't as if you could go in and say, ``Here, we're going to spend less than we spent before.'' Now we -- and by ``we,'' I mean myself and the legislature -- must deal with this problem of what are called the entitlement programs, to find and get a control on those programs to lessen that automatic increase in spending.

Now, with this last program that we passed -- and you know there was great controversy about it and some of us who were alined spiritually found ourselves on different sides. The plain truth was that when we set out to get the second year's installment of budget cuts, we found this time we could not do it unless we agreed to some revenue measures.

Now, we passed the greatest tax cut in history last year to be phased in over a period of more than 3 years. You got the first installment 10 months ago, the second installment a month ago, the 1st of July -- third installment will come next July. And then there will be the indexing that follows that where we will index the tax brackets so that you won't get pushed into higher brackets just by way of inflation. And it is still, in spite of what we did, the biggest single tax cut in history, because in spite of the tax bill that was passed last week, with the additional cuts, the tax cuts over the next 3 years for all of you will amount to $335 billion, in spite of the $99 billion that was in this tax bill.

But in talking to Congressmen about that -- and I have put it in writing -- when they or if -- and there will be attempts to bust the budget, to send down budget-busting bills -- and I sit with pen in hand waiting to veto and have pledged in writing I will veto budget-busting bills. And George knows I've had a little experience. As Governor in those 8 years, I vetoed 943 bills in the 8 years, and none of those 943 were overridden in the legislature. So, I've only had a chance to do this a couple of times in Washington.

But, yes, we must curb that runaway spending. And we're going to do that.

That has to be the last one out there, because -- --

Immigration Legislation

Q. Mr. President, I was wondering if you would care to comment on the -- [inaudible] -- bill on immigration, considering southern California -- [inaudible] -- --

The President. The immigration bill that is -- and well, how do I say this -- because this bill was passed. I don't know exactly what I should say, except that it was passed with the intention that we had lost control of our borders, all of them, and that we had to restore the ability to determine immigration to our country here.

We realized, also, that there were many people here who had come a long time ago, and who literally think of themselves as belonging in this country. And that's why the provisions are in there to grant them the right to stay -- permanent residency on the basis of the length of time that they've been here.

Whether we have plugged all the holes or not, I don't know. Whether we have met some of the needs of our neighbors, I don't know. But I know it's a problem that we had to move on to find a solution. And that was evidenced in the last great invasion of people that were not just political refugees but people that just wanted to live in the United States. And we do have an immigration system and quotas and so forth. And this is trying to regain control of our own borders.

But now to get back to the business at hand -- and then I must leave here -- once again, and I mean this seriously, I've known this man, worked with him as a legislator and all those things -- and the welfare reform and everything that we did in California -- know him and you know him and his record as an attorney general. And I don't mean this in any disparaging way about his opponent, but the government of the city of Los Angeles does not allow the mayor to be an executive in the sense that a Governor of the State is. We have a city council form of government. And I say the man with the experience, the knowledge, the integrity to do the job is the man that's here on the platform with us tonight, George Deukmejian. Elect him Governor.

Note: The President spoke at 7:10 p.m. in the Beverly Hills Room at the Beverly Wilshire Hotel.