Radio Address to the Nation on Waste, Fraud, Abuse, and Mismanagement in the Federal Government

May 5, 1984

My fellow Americans:

When I spoke to you a week ago we were in China working to strengthen cooperation between our two countries, increase opportunities for jobs and a better life for our people, and improve the prospects for a more peaceful world. As I told the citizens of Alaska when we arrived back in the States, I feel we made significant progress.

Today I'd like to speak about our efforts toward another goal, one that might not get the headlines of a trip to China, but that nonetheless has an important impact on our lives. I'm talking about reducing waste, fraud, abuse, and mismanagement in government -- problems that for too long were permitted to grow and spread like an unchecked cancer, plundering your pocketbooks and hindering government's ability to provide essential public services in an efficient and timely manner.

Our administration is determined to reverse the years of neglect and get this monster under control so we can have a government of, by, and for the people again, not the other way around. That's why we're pushing comprehensive measures like Reform '88, which involves over 1,000 different projects to upgrade the management of the Federal Government; and why we're moving to implement recommendations of the Grace commission, which I established and which has identified billions of dollars in wasteful government spending.

Let me give you some specific ways in which we've begun to make progress in improving government's management practices -- doing what others said couldn't be done.

First, debt collection: For too long Washington seemed only to care about handing money out, not collecting debts owed. In fact, collection practices were so bad the Federal Government didn't even know how much was owed and how much was overdue. We inherited a delinquency rate that was growing at the shocking rate of almost 30 percent a year. In the $8 billion guaranteed student loan program, 1 student out of 10 defaults on his or her loan. These defaults each year equal enough money to give loans to about 700,000 eligible students.

Well, with support from the Congress, we're taking a tough new stance on collections. We're not singling out any individuals or groups, but we can, we must, and we will go after the cheaters who profit from the system at the expense of honest citizens like yourselves who live by the rules.

For instance, one military surgeon in Hawaii refused to pay his student debt, even though he made over $50,000 a year and owned seven pieces of real estate. After being threatened with litigation, he paid in one lump sum the $11,500 that he owed.

Tens of thousands of Federal employees have been reneging on their student loans. They will get one last chance to pay up before finding their July paychecks smaller. Call it enforced repayment through cuts in take-home pay.

Justice Department officials are now aggressively pursuing those who default on loans by putting new emphasis on collection of debts and fines. Our U.S. attorneys collected $201 million last year, a return of $24 for every dollar invested.

The second area -- waste, fraud, and abuse -- is the byproduct of mismanagement. Our management improvements, together with the tremendous accomplishments of our Inspectors General, are a one-two punch taking steam out of the waste and fraud that was eroding faith in our government.

Not only have billions in waste and fraud been rooted out, but preventive actions are nipping problems in the bud before they occur. We're making a very determined effort to crack down on white-collar crime, those who abuse positions of power for their own benefit. Both the Department of Transportation and the Environmental Protection Agency are pushing nationwide investigations of bid rigging in the awarding of contracts for Federal highway and waste-water treatment facility construction. The Justice Department has already initiated 270 criminal prosecutions in highway bid rigging involving 255 corporations and 256 individuals in 20 States.

You've all heard of the problems at the Pentagon with spare parts suppliers charging outrageous prices. Well, what you haven't heard is that this waste was actually uncovered by Department of Defense auditors working for the Inspector General I appointed. We are the first administration which has faced up to these abuses and taken action to correct them.

The progress we've made is a good start, but it's little more than a ripple in the river of waste, fraud, and abuse that's been rising for years. That's why it's clear the way to reduce the deficit is by strong economic growth and by reducing wasteful bloated government, not by raising taxes on you, the people.

Until next week, thanks for listening, and God bless you.

Note: The President spoke at 12:06 p.m. from Camp David, MD.