Remarks at the Midyear Conference of the National Association of Realtors

April 23, 1985

The President. Thank you, David Roberts, Clark Wallace, distinguished guests, and all of you. I appreciate this opportunity to be with you today. Ever since my days as Governor of California, I've felt a special bond with realtors. When the fundamental issues were being decided and the political lines were drawn, I consistently found realtors as my strong and energetic allies.

And this morning, I enjoyed reading the Washington Post for the first time in a long time. [The President was referring to the National Association of Realtors' advertisement urging support of the budget plan proposed by the President and Senate Republican leaders.] [Laughter]

But as to your being allies, this has been no mere coincidence. There are few industries in this country that reflect the free market ideals, the respect for property ownership, and the vigorous devotion to individual freedom as yours. We share a philosophy of freedom that has served our country well.

But no one ever claimed that preserving freedom would be easy. I want you to know that I'm personally grateful for the time and effort that you commit to keeping government on track, and I mean Federal, State, and local government.

Your community activism is on top of working long, hard hours at your job. And I understand that making a living in real estate is no easy proposition. [Laughter] You know, I'd like to tell a story. If you've heard it before, if I've told it before, just remember that after age 40 you have a tendency to tell the same stories over and over again. [Laughter]

But this is the story of a realtor who was out driving on a back road on his way to look at some property and suddenly noticed down beside him was a chicken keeping pace with him, and he was doing 60 miles an hour. [Laughter] And suddenly, the chicken spurted out ahead of him, and it looked to him as if the chicken had three legs. And then it turned and went down a side road and into a barnyard. And the driver turned down that lane, drove into the barnyard.

There was a farmer there, and he asked him, ``Did you see a chicken go by here?'' And the farmer said, ``Yep.'' He says, ``Did it have three legs?'' And the farmer says, ``Yep. I raise them that way. I breed 'em.'' He says, ``You do? How come?'' ``Well,'' he said, ``I just love the drumstick, and Ma always liked the drumstick, and now Junior's come along, and he likes it, and we just got tired of fighting over it. So, I've been breeding three-legged chickens.'' [Laughter]

And the driver said, ``Well, how do they taste?'' He says, ``I don't know. I haven't been able to catch one yet.'' [Laughter]

Seriously though, in these last 4\1/2\ years together, we've accomplished much. And unlike that farmer with the three-legged chicken, the American people, I think, are enjoying the rewards of our efforts. The economy we inherited was anemic and faltering. The American people were being bled white by inflation and ever-increasing taxes. And today, thanks to you and the other involved citizens who made it possible, the American people continue to reap the benefits of a healthy economy, low inflation, and stable taxes.

There's especially good news about housing. Housing starts, after a slump in February, bounced back 16 percent in March to an annual rate of almost 2 million -- 1.895 million to be exact. They're now 11 percent above their level in March of 1984. Permits are also doing well. They're at their highest level since June of last year.

The Employee Relocation Council says that 48 percent of their member companies experienced a higher transfer volume in 1984 over the previous year, and they expect that trend to continue in 1985. For people who sell houses for a living, that's great news, as is the level of sales on existing family homes. They're off to their best start in 5 years.

Now, all of this reflects a fundamental change in the direction of the American economy. We've moved away from collectivist schemes that emphasized control, consumption, and redistribution. Instead, we set our sights on encouraging investment, production, and growth. We relaxed or eliminated controls and reduced the growth in Federal spending. And we increased incentives by lowering the people's tax rates.

In the first term, we turned a crisis situation around. In the second term, we have the opportunity to set our country on a course for a decade of unparalleled prosperity. I'll do my utmost, but I need to know that you're still with me. And let me ask you: Can I count on your help? [Applause] Well, that was kind of a silly question, then, wasn't it? [Laughter]

Well, thank you. There is much to do. And let's not kid ourselves, it isn't going to be easy. The first order of business is to come to grips with Federal spending. We hear a lot about the deficit, but what really is being talked about is deficit spending. And the way to reduce that is to reduce spending.

There are, of course, different approaches to this task. Some would have us freeze every item in the Federal budget across the board. But, now, while that may seem appealing, it doesn't get the job done. It's the wrong medicine at the wrong time. Instead, we should use this opportunity to trim programs that are wasteful, ineffective, and unnecessary -- many of which never should have been funded with Federal tax dollars in the first place. To keep pouring your tax dollars into these unworthy programs at the current levels while at the same time limiting worthwhile, efficient, and absolutely necessary programs would be a travesty. A freeze is a decision not to make a decision, a retreat in the face of special interest pressure.

Our proposal, which was worked out after long, hard negotiations with the Republican leadership of the Senate, calls for a leaner, healthier budget, trimmed of much of its deadwood but ready and able to do those essential tasks which the Federal Government must do. We would protect the poor, elderly, and disabled. Full inflation adjustments will be given to those receiving supplemental security income, and also there will be an increase in monthly benefits of $10 for an individual and $15 for a couple. The food stamp, AFDC, WIC, and other safety net programs will stay intact.

Keeping the safety net intact, an increasingly expensive proposition, is a moral imperative. As far as other projects, we can no longer afford to finance everything. As a people, we must set priorities. Those programs whose costs outweigh their benefits should be terminated.

The Job Corps is one good example. It costs taxpayers about $15,200 a year. For that kind of money, we could be sending them to Harvard for a year. The price tag is high, and only one-third of those trained get jobs. And let's remember, while the Government has been doing this, the private economy has produced 8 million new jobs in the last 2 years.

If we're concerned about young people, a youth employment opportunity wage would cost the Government nothing, yet would provide employment opportunities to so many kids who are not [now] frozen out of those summer, part-time, weekend, after-school jobs.

And then there's Amtrak. When Amtrak leaves the station, they're being fueled by $35 in subsidies for every passenger. They just keep shoveling in those tax dollars, but it's you, the people, who are getting railroaded. What theoretically started out to be only a 2-year trial period, which was supposed to have provided Amtrak time to become self-sufficient, ended up as a mobile Federal money-burning machine. We can't afford it anymore. Amtrak and other programs like it are taking us on a one-way trip to the poorhouse.

Another area where savings have been achieved is in defense. Once again we've agreed to lower defense spending, recently reducing our projected request by $119 billion over the next 3 years. This means that increases in defense will be limited to only 3 percent per year. I must tell you that this is the rockbottom level needed to sustain and follow through with the defense improvements we've initiated over the past 4 years. We can no longer afford to use defense spending as a whipping boy for the failure of Congress to make the necessary reductions in our domestic spending.

Incidentally, just add some of those $400 hammers and things that you've been reading about -- well, those are our figures. That's what's been going on, and that's what we've found out and are stopping.

Now, these and other budget cuts, as vital as they are to the economic health of the country, will not be easy to get through the political process. It's been said that any government that robs Peter to pay Paul is bound to have the support of Paul. [Laughter] I think it's time we noticed that we can't rob Peter anymore. He went bankrupt a long time ago. [Laughter] The interest groups are out in force. They and the elected representatives with whom they've formed a symbiotic relationship are pushing not to decrease Federal spending but instead to increase taxes.

Now, you come from all over this country. Let me ask you a couple of questions. Do you think the American people want their taxes increased?

Audience. No - o - o!

The President. Well, do you think Congress should stop making excuses and start showing some backbone and leadership?

Audience. Yes!

The President. You're makin' my day. [Laughter] If the last election proved anything, it is the American people overwhelmingly oppose upping the tax load. But laying the opposition of the people aside, let's look at the practical argument. Raising taxes will not lower the deficit; raising taxes will simply drain more money from the private sector, kick us back into recession, and in the end increase deficit spending. For this reason, let me pledge to you: I will not be a party to a tax increase.

We should do something about taxes, and it isn't increase them. What we need to do is to reform and simplify the system -- cut out the loopholes, bring the rates down for everybody. But let me pledge something else to you: I will not be a party to a so-called tax reform if it is a disguised tax increase or if it eliminates the deduction families need for their home mortgage.

Now, if you hear a sound in the distance, it might well be the groan of the big spenders and the big taxers. They know you're in town. [Laughter]

I just have one more question to ask you: Are you going to pay them a visit and give them the message you just gave me?

Audience. Yes!

The President. All right.

I've said so often, we don't have to make them see the light, just feel the heat. [Laughter] But what we are doing is more than just deciding economic policy; we're charting the future of this country. We have it within our power to build a new era of good feeling.

Last year it became clear that a change had occurred in America. The uncertainty and pessimism of the 1970's had been left behind. The new patriotism, a positive spirit which unites all of us of every race and religion, was front-cover material for major magazines. That's the kind of America -- proud, strong, and united -- that we are trying to build, and it is up to us. And I am happy that, as always, we are on the same team -- America's team.

Thank you. God bless you all.

Note: The President spoke at 9:50 a.m. in the International Ballroom at the Washington Hilton Hotel.