I'm told that you have an action-packed schedule in our city, so we're especially pleased that you could be with us this morning as a part of the Small Business Week celebration. You're here today because you've been selected from the millions of small business owners around America, representing the best of the entrepreneurial spirit in our nation. And you have each in your own way proven that the American dream of economic independence, of individual initiative, of personal excellence can still be achieved through small business.

When I was a very small boy in a small town in Illinois, we lived above the store where my father worked. I have something of the same arrangement here. [Laughter] But no elevator there. [Laughter] But as we stand here together, I am vividly reminded that those shopkeepers and the druggist and the feed store owner and all of those smalltown business men and women made our town work, building our community, and were also building our nation. In so many ways, you here today and your colleagues across the country represent America's pioneer spirit.

In just a few moments it will be my great pleasure to announce the 1983 Small Business Person of the Year -- the 20th annual award of this special honor. It'll be one of these contestants here: either Fred Luber, O.C. Branch, or Louis and Fred Ruiz. I, for one, am glad that I didn't have to make the choice, because each of them has so much to be proud of. But it's gratifying to see among your ranks a growing number of women and minority entrepreneurs. This demonstrates that our economic system is open and free to all who wish to pursue their dreams of success.

Small business has also played a vital role in helping our country weather the economic storm from which we're now emerging. You laid off fewer workers than big business and will be on the cutting edge of economic recovery. Somebody can go into business right now with a silencer of sirens. [The President was referring to the noise made by the 11 o'clock testing of the civil defense warning system for the Washington metropolitan area.] [Laughter]

From July 1981 through December 1982, finance, insurance, and real estate, a sector dominated by small firms, actually gained about 65,000 new jobs, while the service sector, also dominated by small firms, added some 535,000 new jobs. Much has been said and written about the high rate with these last few years of small business failures, but not so much has been said about the other side of the coin. In 1981 a record of 580,000 new businesses were formed, and in 1982, some 560,000. There's no question that we're all concerned about unemployment. And perhaps this is where small business plays its greatest role in the economy. In 1980 and '81, of the 2.7 million new jobs that were created, some 60 percent were in firms of less than 500 employees.

We know how important small business is, and we've done our best here in this administration to establish or reestablish an economic environment where the small entrepreneur can thrive.

We've cut inflation from double digits, as you know, to less than a third of its former rate. We've been able to bring skyrocketing interest rates down from a staggering 21\1/2\ percent to 10\1/2\, and I think they're going to come some lower. We've attacked the regulatory burden and are continuing to slice away needless redtape that government had imposed on you.

We've gotten the Prompt Payments Act on the books so the small firms doing business with the Government are paid promptly. We're increasing Federal procurement from minority enterprise. We've provided small business with more opportunity to participate in international trade through the Export Trading Company Act; signed into law the Small Business Innovation Development Act, assuring small high-tech firms a greater share of government research and development.

I believe that our greatest contribution to small business, however, is -- well, to all Americans for that matter -- is our package of tax reforms. We've broken through tax barriers to capital formation and investment and virtually eliminated investment -- or estate taxes, I should say, for a surviving spouse. Our tax indexing provision and individual tax rate cuts will make it easier for small business owners to fund and maintain their companies.

There's an old economic axiom that still holds true today. If people are not allowed to earn more by producing more, then no more will be produced. Well, that's why our tax incentives, I think, are critical to recovery. The third year of the tax cut and tax indexing will enormously benefit small business people and average working families. Repealing those rate cuts and indexing would be a cruel blow to the American people and to the recovery, and we're not going to let that happen.

Now, I know you have a full schedule. Earlier I said you reminded me of smalltown America and of the pioneer spirit, and you do. You also hold the promise of America's future. It's in your dreams, your aspirations that our future will be molded and shaped. You're the pioneers in America's continuing best and endless frontier -- the free enterprise system. I join the Small Business Administration and all Americans in saluting you, the small business proprietors, of 1983.

Now, I know you've all met the three finalists. Now, it gives me great pleasure to recognize as the Small Business Persons of the Year, a very special team, from Tulare, California, a father and son who've shown what can be accomplished -- [applause]. Well, you're ahead of me already. It's Louis and Fred Ruiz. Congratulations.

Mr. Ruiz. Thank you.

The President. I'd just like to tell you both that one of the things Californians miss the most when they come here to Washington is Mexican food. So, please -- [laughter] -- stay with it. We like it very much. Congratulations. We're pleased to have you here.

Mr. Ruiz. It's our pleasure, believe me.

The President. Well, as I say, we're counting on you. So, don't stay away from work too long. [Laughter]

Mr. Ruiz. We'll try a little harder.

The President. Okay. All right.

Mr. Ruiz. Thank you very much, sir.

The President. You bet. God bless you.

And thank you all.

Note: The President spoke at 10:58 a.m. in the Rose Garden at the White House. Prior to the President's remarks, the Vice President introduced the three finalist contestants for the award. The winners own and manage Ruiz Food Products, Inc., a manufacturer of Mexican frozen food products.