All of you are here today because of your deep concern about a problem in government that's easy to talk about in terms of saving billions of dollars a year. The war against waste and inefficiency is worth waging on just these grounds alone, but I know your involvement goes even beyond this. The people who came before us in this nation put a heavy emphasis on what is today almost a forgotten virtue. I remember back in Dixon, Illinois, when I was growing up, it was called thriftiness. Thriftiness was a quality appreciated as a kind of signal about the maturity and judgment of a person or institution, an indication that deeper values were there. Some of you in business have noticed that when a company gets in trouble, there are more serious problems than simple inefficiency -- all sorts of projects and activities that are wasteful or marginal and a neglect of those products or services that made the firm successful in the first place.

Well, government is no different. And as the people here know better than most, the Federal Government was headed a few years ago in much the same direction. It was neglecting essential tasks like protecting our nation's security abroad and upholding the law at home while it built gigantic bureaucracies to handle all sorts of problems, problems it was neither competent nor intended to handle. I used to use an example in some of my mashed-potato circuit days about the town that decided that they would have better traffic safety if they raised the height of their traffic signs and various warning signs from 5 feet above the ground to 7 feet above the ground. And then, the Federal Government stepped in and said they had a department to come in and help them, and their plan was to lower the streets 2 feet. [Laughter]

Well, then these special interests became involved. Pretty soon the way to a prospering political career was to vote for higher appropriations and for grand, new spending schemes that appeal to this or that voting bloc. And if this pattern of putting politics over country sounds familiar, that's because it is. Historians have frequently seen in this ``bread and circuses'' climate the signs of government in decline and a nation in decay. Faith in our democratic system -- and without that faith democracy simply can't work -- was being undermined. As James Madison said, ``It's the gradual and silent encroachments of governments, not sudden revolutions, that prove to be the threat to freedom.'' So, it was the average citizen who harbored enormous feelings of resentment toward government and an enormous sense of frustration. They believed the only voices that were heard in this city were those of the organized lobbies or special interests, not the taxpayers.

Those of you associated with the Grace commission have forthrightly and without apologies helped change all of this. You've shown that citizens from every walk of life could come to the Capitol and not only make their voices heard but persuade and, yes, push and prod government to change its ways. The Grace commission stood back and took a look at government, concluded that the Federal Government had lost its moorings, came up with concrete proposals on how to recover those moorings. But, as I know Peter believes, the most important part of the job is upon us -- making sure that the Grace commission is not remembered as just another government commission and that its recommendations don't become just another pile of reports gathering dust in the Library of Congress; in short, implementing as many recommendations as possible.

And on this point, I've just come from a meeting with the Domestic Policy Council. I've received a final report that shows we are going forward with over 80 percent -- as a matter of fact, 83 percent of the commission's recommendations. Many have already been implemented; others included in the '86 budget; and a number will be proposed in the '87 budget. Even with the recommendations deferred at this time, we have every intention of trying to implement as many of them as possible in the future. I've asked Jim Miller to have OMB continue to monitor our progress and report to me periodically through the Domestic Policy Council. I also thanked Peter Grace at the close of the meeting, and let me do so now again publicly.

Peter, I can think of few Americans who have done more to make the people's voice heard in Washington. You shook this city up. You put the issue of waste and inefficiency front and center on the public agenda, and I am grateful to you and so is America. But now, we must work together to get your recommendations through the Congress, and that's what this people's lobby of yours is all about. It's why the Congressional Caucus leaders who are here today are so important. Imagine the courage of these Members of Congress who would dare to associate themselves with such a clear-cut effort to thwart the special interests. And I want to thank each one of them who are here today.

In carrying on this battle, you're going to need the help of the largest pressure group of all -- the taxpayers. And that's why the multimillion-dollar, nonpartisan campaign by the Advertising Council is so important in helping to inform and educate the taxpayers. And finally, that's why the work of the trade associations and Citizens Against Government Waste are also vital -- vital in the battle against budget deficits and vital to the strength and resiliency of the democratic system and public confidence in our government.

So, I want to congratulate you on all that you've done. You know, I've mentioned this to you before, but I can well remember a time when waste and inefficiency were thought of as issues without any political appeal, issues that stirred little interest in the media or among the seers and sayers of Washington. Well, all of that has changed. Government management -- mismanagement, I should say, is a hot story, and the Grace commission has played a key role in bringing the change about. In fact, I want you to know the vigor with which you've pursued this fight has inspired me on other closely related matters, and once again, the issue is your issue -- making government responsive to the people.

First, I must warn the Congress that their unwillingness to deal with the debt ceiling and to take responsible action on the deficit is creating a large and unnecessary problem. We're running up against the possibility that we may have to disinvest the Social Security Trust Fund, shortchanging that trust fund of accumulated interest, all because of the inexcusable dithering and delay in meeting the responsibilities about raising the debt ceiling. So, please help us convince them -- present company exempted; they're convinced -- that the time for political gamesmanship was over long ago.

All of us know the importance of an effective resolution this year to our deficit problem, and I happen to think the Gramm-Rudman-Hollings proposal is an excellent one. This proposal is linked closely to what you're doing, because if we can adopt the plan, we can maintain our commitment to a strong defense while providing a framework for the Grace reforms and a device for flushing out waste and inefficiency. Congress must not fail the people on this.

And second, I think some of you know that we have a tax reform plan on the agenda this fall. It's a plan I'm certain has the support of the American people. Right now, Congress is in deliberation on this matter, and that deliberative process is something I deeply respect. I will await its outcome attentively. But let it be said today, I believe that the essential items of tax reform, as I've outlined them, have the support of the American people. And I want action on this plan; I want action this year and so do the people. Believe me, if necessary, I'm prepared to spend a lot more time with Congress at Christmas this year than either of us originally anticipated. [Laughter]

Well, let me conclude by, again, thanking Peter Grace and all those thousands of patriotic Americans who gave unstintingly of their time, their efforts, and their talents to help the Government. And let me assure you that we, for our part, will not rest in the fight to have their recommendations implemented.

So, again, thank all of you. God bless you.

Note: The President spoke at 11:45 a.m. in the Rose Garden at the White House.