Remarks at the Annual Meeting of the American Council of Life Insurance
Thank you all very much, and thank you, John Creedon. As many of you know, John is giving the Nation outstanding service on the AIDS Commission. Thank you also, Carey Hanlin, and a special thank you to someone I miss seeing at the Cabinet table, a man of courage and principle, one of the best Secretaries of Health and Human Services our nation has ever had: Dick Schweiker.
I've come here today in what I'm sure we would all agree is a time of unusual worry and unusual promise. Today we Americans have it within our power to lead the entire world into a new age of prosperity and peace or to return it to the stagnation, drift, and uncertainties of the late seventies. History records few moments when an entire people arrive at a place of turning and either choose the right or the wrong path. We Americans have come to such a place, but as we've seen in the markets these last few weeks, many wonder if we'll pick the right course.
believe we will if we recognize our opportunities. The problem of recognizing
opportunities -- it reminds me of a story about Moses. He had led the children
Now, I know you've heard a lot of whys and wherefores about the volatility in the market these last few weeks -- some of it not all that helpful. After 4 years of amnesia, our critics -- God bless them -- have all of a sudden remembered the word Reaganomics. When I hear them talk about stock prices, I can't help thinking of the judge who was questioning a prospective juror. And the judge asked the juror if he had any opinion about the guilt or innocence of the defendant. And the juror said, ``No, your honor.'' The judge asked, ``Do you have any reservations in your conscience about the death penalty.'' The juror said, ``No, sir, not in this case.'' [Laughter]
in the life insurance industry make a profession of keeping a cool head when
others panic and of fixing your eye on the promises as well as the dangers of
the future. Well, that's how you make the right decisions. In the last 7 years,
I've found that's how to make the right decisions on national economic policy,
too. Look at opportunities. Look at dangers, too. Look at reality. Yes,
financial market gyrations are a reality, but this is reality, too: Our underlying
economy is strong and getting stronger. Two weeks ago it became official:
2 weeks of the stock market plunge, we learned that gross national product was
rising at a healthy 3.8-percent annual rate. Much of this growth was because of
new business investment, which is soaring at an almost unbelievable annual pace
of 24 percent. And after a brief spurt earlier this year, inflation has fallen
back to less than 3 percent. We also learned that manufacturing productivity
was rising at a nearly 5-percent annual rate. Manufacturing exports are an
important reason why our total real exports have been growing at a nearly
17-percent annual rate. Why, just the other day, I learned that Americans are
even about to export chopsticks to
in the last 2 years, our manufacturing output has been rising sharply. Take
just one industry, steel, which had been said to be dying. Now the talk is
about its rebirth. As a recent Business Week headline said: ``Cancel the
Funeral -- Steel is on the Mend.'' In our expansion, the biggest stories have
been new businesses, rising family income, and jobs. They're stories that each
of you knows about. After all, the life insurance industry's venture capital
investments have helped finance
also seen your markets expand, as
Just the other week, figures came out showing that we continue to create jobs at a record pace -- more than half-a-million new jobs in October. They came from both manufacturing and service. And as one private economist said: ``The strength was across the board.'' Another summed up: ``The economy was gathering momentum.''
potential employment pool in
Well, trade is one area where we're in danger of doing the wrong thing. Forgive me for saying, but some in Congress have been playing with economic dynamite this year. More than 10 million American jobs are tied to imports, exports, or both. From the day George Washington took office to the present, when international trade has grown, the number of jobs has grown. When trade has dwindled, so have the number of jobs. Yet a bill with some of the most protectionist provisions we've seen since Smoot-Hawley is working its way through Congress. Now, that's just what we don't need right now -- to declare a trade war, to become a casualty ourselves.
spoke at the beginning of places of turning, and here's one: Congress can
either turn towards a protectionist trade bill or it can enact responsible
legislation and ratify the free trade agreement we recently concluded with
the last 7 years, we have used our trade laws as never before to open world
markets to American exports. For the first time, an administration has started
unfair trade practice cases on its own, not waited for industry.
long ago, I ran across a startling example of what ending trade restrictions
can mean. In
week I emphasized that it was not our policy to drive down the dollar. Exchange
rates that whip around with every shift in the wind make business reluctant to
sail the seas of international commerce. That hurts all trading nations. But
enduring calmness on the currency markets must come from better coordination of
economic policies among the major industrial countries. And that's why I was
pleased by the recent action taken by
I'm confident we'll get there one way or another. But let me repeat something here I've been saying for some time now: Deficit spending is in large part an institutional problem, and a comparatively recent one to boot. In the mid-seventies, Congress, in effect, shoved the President to the side in the budget process. It legislated a major shift in the checks and balances of budgetmaking power, and the results came immediately. Before that, Federal debt with inflation taken out had been steady or falling for a quarter of a century. Since then it's been in a steep climb.
In my years in the White House, I've seen one Member of Congress after another call for lower deficits and less spending and then go out and vote for more spending. Some, of course, just want more spending, period, but many are sincere. They're prisoners of a dilemma. If nearby districts or States get so many Federal dollars, they must bring at least as much home or look bad. So they swap increases for increases, and deficit spending goes up.
A perfect example is the housing bill being considered in the Senate. Now is not the time to add to the deficit, and this bill could add as much as $7 billion more in spending than I requested for this year. What's more, it costs at least $3 billion more than they say it costs, because they mandate things they don't pay for. That's budget gimmickry, pure and simple. Federal housing programs should be designed to help those who cannot help themselves. But under this bill, even though it's a budget-buster, aid to poor and needy Americans could actually be cut. You see, the bill diverts enormous amounts of money to subsidies for those who don't need subsidies at all. That is morally wrong. If this bill arrives at my desk, I will veto it.
What we do need right now is an extension of FHA authorities. That issue has been hanging fire for too long. I call on Congress, by the end of the month, to provide a permanent extension of those authorities, but not with so much else attached. We can't have it both ways. We can't make speeches calling for cuts in the budget deficit and then vote for bills like this that bust the budget. If Congress is serious about joining with me to cut the budget, they should show it by starting with this housing bill.
sad fact is there's only one way, once and for all, to stop them before they
spend again, to free these prisoners from their dilemma. And that's to restore
the role in the budget process of the only elected official who speaks not for
local interests but for the interest of the entire Nation: the President. And
that's why I've said over and over that it's time for the President to have
what 43 Governors have, what I had as Governor of California: a line-item veto.
Saving Congress from itself and
I've spoken to you today about our economic future and the world's. But that's
not the only area in which
details remain to be worked out. The most important is verification. I cherish
no illusions about the Soviets. It's said: For them, past arms control treaties
were like diets: The second day was always the best, because that's when they
broke them. [Laughter] Any treaty I agree to must provide for effective
verification, including onsite inspection of facilities before and during
reductions and short-notice inspections afterward. The verification regime that
we've put forward in
also pressing now for an agreement on reducing our two nations' strategic
arsenals by one-half. Our
For us, SDI is a vital insurance policy, a necessary part of any national security strategy that includes deep reductions in strategic weapons. It will help protect our allies, too. In decades to come, it will underwrite all of us against Soviet cheating on both strategic and intermediate-range missile agreements. It goes hand in hand with arms reductions. We cannot -- we will not -- bargain it away to get strategic arms reductions.
SDI will also protect us against accidental missile launches and ballistic missile threats -- whether with nuclear, conventional, or chemical warheads -- from outlaw regimes. In the decades ahead, missile technology will proliferate, just as nuclear weapons technology already has. We can't be sure just who will get it, how competent they will be, or how rational. We must have an insurance policy against that day, as well. So, no, SDI is not a bargaining chip. It is a cornerstone of our security strategy for the 1990's and beyond. We will research it. We will develop it. And when it's ready, we'll deploy it. Remember this: If both sides have defenses, it can be a safer world. But if we leave the Soviets with a monopoly in this vital area, our security will be gravely jeopardized. We must not let that happen.
talks with General Secretary Gorbachev will cover the full range of U.S.-Soviet
relations, including human rights, exchanges between our peoples, and Soviet
involvement in regional conflicts such as in
we live in a time of promise and a time of worry, of hazard. In the next few
months, we can take steps that will lead
You know, I have developed a hobby recently, and I'm annoying audiences with it, I'm sure. I can't close without telling you what that hobby is. I have begun collecting jokes that I can prove are told by the Soviet citizens among themselves, which show their great sense of humor, but also a certain cynicism about their system. And I couldn't resist in the last meeting with the General Secretary to tell him one of those jokes. [Laughter]
It had to do with an American and a Russian arguing about their two countries. And the American in the story said, ``I can walk into the Oval Office, I can pound the President's desk, and I can say, `Mr. President, I don't like the way you're running our country!''' And the Soviet citizen said, ``I can do that.'' The American said, ``You can?'' He says, ``Yes. I can go into the Kremlin to the General Secretary's office, I can pound his desk and say, `Mr. General Secretary, I don't like the way President Reagan's running his country.''' [Laughter] Thank you all. God bless you.
Note: The President spoke at in the Sheraton Ballroom at the Washington-Sheraton Hotel.
He was introduced by John J. Creedon. In his opening
remarks, the President referred to H. Carey Hanlin,
chairman and chief executive officer of Provident Life of