You know, not too long ago, I was asked to explain the difference between a small businessman and a big businessman. And my answer was that a big businessman is what a small businessman would be if only the government would get out of the way and leave him alone. [Laughter] But that's what we're trying hard to do -- help the small business men and women of America make it big.

Before the founding of our great Republic, entrepreneurs led the rebellion against excessive taxation and regulation. And with your help, we're doing it again. We're trying to put this economy back in the hands of the people and to give you the incentives to save, invest, and take risks so that you can go as far as your God-given talents will take you and more wealth can be created at every level of our society.

I just have to interject and tell you that on this recent trip, there in the Communist Government of the People's Republic of China, they have recognized the value of incentive. And it was amazing to see what just allowing a certain amount of private entrepreneurism to their people, what it has accomplished and how far they've gone. And it was most encouraging, and I had to believe that things are going to get better as they -- to stand there in the house of a young man with his wife and small son, his parents living with them, and have him tell me how he saved and was able to build his own home there in a Communist country. And we, of course, know an awful lot about that in America.

But one of the great cornerstones of our way of life is our right to openly and critically discuss the policies of government. And there's a story about a Russian and an American who were talking about the freedoms in their countries; and the American said, ``Listen, in America,'' he said, ``I can stand on any street corner or out in the park or anyplace I want and openly criticize the President of the United States.'' And the Russian said, ``We have that same privilege in the Soviet Union.'' And the American was pretty surprised. He says, ``I can stand on any street corner in any park in Russia, and I can openly criticize the President of the United States.'' [Laughter]

But in some quarters, we still hear a lot of criticism about our economic policies. And I just can't help wondering what the critics -- why they haven't heard about our recovery. In fact, some pretty renowned economists have been lecturing me recently and sending me letters complaining that I'm talking about economic recovery. And they say that we've passed that stage; we're now in economic expansion. And I'm glad to be corrected. [Laughter]

But from the mess that we inherited just 3 years ago, a strong and a more vibrant America is taking shape. Inflation, once out of control, has plummeted by nearly two-thirds. We're going to keep it down for good. Productivity, after falling for 2 years before we took office, rose 3\1/2\ percent last year, and it's still rising. Economic growth in 1983 was a robust 6 percent, and for the first quarter of 1984, it grew at an amazing 8.3 percent. Venture capital, which lays the foundation for a better tomorrow, rose less than a billion dollars in 1980. It shot up $4 billion last year. That's the money that's there and available for people who want to do what you're doing, to start up -- go into business and have to borrow to do so.

And lo and behold, the deficit, which all the pessimists predicted would keep going up, is now coming down, and it's coming down because of economic growth. And the deficit will keep coming down if the Congress would start devoting more energy to government spending than to raising your taxes, to reducing government spending.

The best news is that we've had the steepest drop in unemployment in over 30 years. Some 5.4 million more Americans have jobs today than just 17 months ago; 106 million Americans are employed, and that's the highest number ever in the history of our country.

Last year alone, almost 600,000 new businesses were incorporated, and that's an alltime high in our history. Now, most of those were small business ventures, spearheaded by individuals like yourselves, proud and independent, taking risks and putting in long, hard hours to earn a living and be your own boss. Each one is just a tiny piece of the economy. But together, America's small business owners represent a dynamo of energy and creativity that can take our country toward unprecedented levels of opportunity and freedom. And perhaps most importantly during this expansion, small businesses, like the ones you own, provided the most new jobs, gave the most employees the freedom to work part-time, and hired the most young people, senior citizens, and women. And that's why we must go forward toward new goals, so this economic expansion can last.

Small business and large industries aren't moving forward again because some big-spending bureaucrats handed out more subsidies. This expansion was created by bringing down inflation and tax rates. We don't need less of a good thing. We need more of a good thing. And that's why I favor -- I'll put in a plug right here -- a line-item veto, the balanced budget amendment, and a sweeping comprehensive reform of the entire tax code.

In California, as Governor, I had line-item veto. And in 8 years I vetoed 943 spending items that had been attached to otherwise necessary legislation. And they never overrode one of those 943 vetoes. Presidents should have that, too.

Well, you can bet that I'm going to continue to press for these reforms, and they'll do wonders for small business.

I'm pleased to tell you that just yesterday I signed legislation authorizing a second White House Conference on Small Business. We'll soon begin the conference process, and I call on all small business owners to participate in State and regional conferences leading to the final session at the White House that will take place in 1986.

Small business employs about half of our private work force, contributes 42 percent of sales, and generates about 38 percent of our gross national product. So, America is small business. Small firms are on the cutting edge of innovation, providing products, ideas, and opportunities for the future. Small business is dreaming impossible dreams and making those dreams come true.

This week, National Small Business Week, provides an excellent opportunity to salute some of our most successful small firms and the men and women who are the real heroes behind America's success. The entrepreneurs here today, you, are from every State and the District of Columbia and Puerto Rico. You represent industries as diverse as printing, nursing home care, furniture, electronics, lumber, seafood, and professional baseball. And they're all pioneers in America's continuing frontier of opportunity -- the free market system.

And now for the most pleasant job that I've had all week, and I'm sure that it wasn't up to me to pick the winners because, believe me, every one of you is a winner, and we're very proud of what you're doing.

The three top award winners are: Robert Battles of Gulfport, Mississippi, who started a small company in 1980, and last year his sales totaled almost $4 million; Frederic Starrett, Jr., of Belfast, Maine -- in the past 3 years, his frozen food company has tripled sales, and employment has risen from 70 to 270 workers; and finally, William Fuldner of Monett, Missouri; 32 years ago, he started to make aluminum windows in the basement of a laundry. Today Mr. Fuldner's EFCO Corporation employs 410 workers and is the second largest producer of nonresidential aluminum windows in the United States.

And the 1984 Small Business Person of the Year is Mr. William Fuldner.

Well, thank you all again, and God bless you all. And now, they told me I have to do what the little girl told me in a letter when I first got here. She wrote me a letter, told me everything that I should do, and then said, ``Now, get over to the Oval Office and get to work.'' [Laughter]

Note: The President spoke at 10:47 a.m. in the East Room at the White House.