Delivers his first address to a joint session of congress on tuesday, february 28. Up next on cspan, you look at the first speeches to congress by the last five president s. Ronald reagan, george h. W. Bush, bill clinton, george w. Bush and barack obama. The speeches, which are not considered state of the Union Addresses focus on policy priorities of the new administration. We begin with Ronald Reagan speaking before the congress on february 18, 1981. [cheers and applause] members of the congress, i had the high privilege and the distinct honor of presenting to you the president of the United States. [cheers and applause] thank you. [applause] thank you very much. [applause] [cheers and applause] thank you very much. Thank you. Thank you all very much. Mr. Speaker, mr. President , distinguished members of congress, honored guests and fellow citizens, only a month ago i was your guest in this Historic Building and i pledge to you my cooperation and doing what is right for this nation that we all love so much. Im here tonight to reaffirm that pledge and to ask that we share and restoring the promise that is offered to every citizen i did the last best you will of on earth. All of us are aware of the punishing inflation which has for the first time in 60 years held a doubledigit figure for two years in a row. These are people who want to be productive. But as the months go by, this despair dominates their lives. The threats of layoffs and unemployment hangover millions. And all who work are frustrated by their inability to keep up with inflation. One work from a midwest city said this, i am bringing home more dollars than i ever believed i could possibly earn. But i seem to be getting worse off. And he is. Not only an Hourly Earnings of the American Worker after adjusting for inflation declined 5 percent over the last five years, but in these five years federal personal taxes for the average family had increased 67 percent. We can no longer procrastinate and hope that things will get better. They will not. Unless we act forcefully and now, the economy will get. Ken wie, who manned the ship of state deny, getting somewhat out of control . Our National Debt is approaching 1 trillion. A few weeks ago i called such a figure 1 trillion, and comprehensible. Ive been trying to think of a way to illustrate how big 1 trillion really is. The best i could come up with is, if you had a stucco 1000 bills in your hand only four inches high, you would be a millionaire. 1 trillion with a stack of 1000 bills 67 miles high. The interest on the public debt this year we know will be over 90 billion. Unless we change the spending for the fiscal year we will edit another 80 billion to the debt. Adding to the troubles is a massive amount of regulations on major industries. It is estimated to add 100 billion to the price of the things we buy and it reduces our ability to produce. The rate of increase in american productivity, once one of the highest in the world, is among the lowest of all Major Industrial nations. Indeed it has actually declined in the last three years. I painted a pretty grim picture. But i think i painted it accurately. It is in within our power to change his picture and we can act with hope. There is nothing wrong with our internal strengths. There has been no breakdown of the human, technological and National Resources on which the economy is built. Based on this confidence and i am proposing a comprehensive fourpoint program. Now let me outline and detailed of the principal parts of this program. You will each be provided with a completely detailed copy of the entire program. This plan is aimed at reducing the growth in Government Spending and taxing. If and acted in full, this program can help america create 13 million new jobs. Nearly 3 million more than we would have without these measures. It will also help us to gain control of inflation. It is important to note that we are only reducing the rate of increase and taxing and spending. When attempting to cut either spending or taxing levels below that which we presently have. This will get our economy moving again. Productivity growth, it will create the jobs that our people must have. Im asking that you join me in reducing direct federal spending by 41. 4 billion in fiscal year 1982. [applause] this goes along with another 7. 7 billion in user fees and a total of 49. 1 billion and this will still allow an increase of 30. 8 billion over 1981 spending. Now i know that exaggerated and inaccurate stories about these cuts have disturbed many people. Particularly those dependent on grant and benefit programs were their basic needs. Some of you have heard from constituents and im afraid that Social Security checks for example, were being afraid that they will be taken away. I regret the fear that these unfounded stories have caused and i welcome this opportunity to set things straight. We will continue to fulfill the obligations that spring from our national conscience. Those who through no fault of their own, must depend on the residence. All of those with true needs can rest assured that the social safety net of programs they depend on are exempt from any cracks. The full Retirement Benefits of the more than 31 million Social Security recipients will be continued along with an annual costofliving increase. Medicare will not be cut. Normal supplemental income for blind, aged and disabled. School breakfast and lunch for the children of low income families will continue. As will nutrition and other special services. There will be no cut and project headstart or summer youth jobs. All in all, nearly 216 billion worth of programs providing help for tens of millions of americans will be fully funded. But government cannot continue to subsidize individuals or particular business interests where real need not be demonstrated. Im sure there is one department you been waiting for me to mention. The department of defense. Is the only department in our entire program that will actually be increase of the present budgeted figure. [applause] but even here, there was no exception. The department of defense came up with a number of cuts which reduce the budget increase needed to restore the military balance. These measures will save 2. 9 billion. In 1980 two outlays and by 1986 a total of 28. 2 billion will have been saved. Or perhaps i should say would have been made available for the necessary things that we must do. The aim will be to provide the most effective defense for the lowest possible cost. I believe that my duty as president requires that i recommend increases in defense spending over the coming years. [applause] i know that you are all aware but i think it bears saying again, his 1970 the soviet union has invested 300 billion more in its military forces than we have. As a result of the military buildup, the soviets had many significant numerical advantage in Strategic Nuclear delivery systems. Tactical aircraft, submarines, artillery and antiaircraft defense. Allow this balance to continue as a threat to our national security. Notwithstanding our economic strength making the financial changes beginning now is far less costly than waiting and having to attempt a Crash Program several years from now. We remain committed and a goal of arms limitation in negotiation. I hope we can persuade our adversaries to come to a realistic balance and verifiable agreements. [applause] but as we negotiate, our security must be fully protected by a balanced and realistic defense program. Let me say a word here about the general problem of waste and fraud in the federal government. One government estimated that the board alone said that this could be up to 25 billion of federal expenditures for social programs. If the text of the letter wasted or mismanaged or added to this broad total, the staggering dimensions of this problem begin to emerge. The office of management and budget is now putting together an Interagency Task force for waste and fraud. Also planning as a point inspectors general highly trained professionals who will spend no effort to do this job. Note and submit let me say this. Waste and fraud in the federal government is exactly what i have quoted before. An unrelenting national scandal. A scandal we are bound to determine to do something about. [applause] marching with the whole program of reductions in spending is the equally Important Program of reduced tax rates. Both are essential if we are to have economic recovery. It is time to create new jobs to build and rebuild industry to give people room to do what they do best. And i can only be done a test program that provides incentive to increase productivity for both workers and industry. Our proposal is a 10 percent cut across the board for three years. Every year. For all income tax payers making a total cut in taxes of 30 percent. This reduction will also apply to the tax on our unearned income leading to an eventual elimination of the differential between the tax on earned and unearned income. Now i would hope that we could be retroactive with this but as it stands, the effective starting liberties 10 percent personal income tax rate reductions will call for as of july 1 of this year. Again, let me remind you that while this 30 percent reduction will leave the taxpayers with 500 billion more in their pockets over the next five years, it is actually only a reduction in the tax increase already built into the system. Unlike some past quote atax reforms, this is not merely a shift of wealth from different taxpayers. This proposal were an equal reduction in everyones tax rates will expand our National Prosperity and Large National incomes and increase opportunities for all americans. Some will argue i know that reducing tax rates now will be inflationary. A solid body of Economic Experts does not agree. And tax cuts adopted over the past three fourths of a century indicate these Economic Experts are right. They will not be inflationary. I had advice that in 1985 our real production goods and services will grow by 20 percent and be 300 billion higher than it is today. The average workers wage will rise in real purchasing power, eight percent. This is after tax dollars. This is predicated on a complete program of tax cuts and spending reductions being implemented. The other part of the tax package is aimed at directly providing business and industry with the capital needed to modernize and engage in more research and development. This will involve an increase in depreciation allowances. In this part of our tax proposal will be retroactive to january 1. The present appreciation system is obsolete, needlessly complex and in economically counterproductive. Very simply, the depreciation allowances with no recognition of how inflation has increased the replacement cost. We are proposing much shorter write off time than is presently allowed. A five year write off for machinery, careers or vehicles, trucks and a 10 year write off for plants. In fiscal year 1982 under this plan, business would acquire 10 million for investment. By 1985, the figure will be nearly 45 billion. These changes are essential to providing new investment which is needed to create millions of new jobs between now and 1985. And to make america competitive once again in the world market. [applause]. These will not be makework jobs. Their productive jobs, jobs with a future. I am well aware that there are many other desirable and needed tax changes. Such as indexing the income tax brackets to protect taxpayers against inflation. The unjust desquamation against married couples if both are working and earning. Tuition tax credits, unfairness of the inheritance tax especially a family on farm or business and a number of others. But our program for economic recovery is so urgently needed to begin to bring down inflation that i am asking you to act on this first and with great urgency. Then i pledge, i will join you in seeking these additional tax changes at the earliest date possible. [applause] American Society experience a virtual explosion in government regulation during the past decade. Between 1970 and 1979, expenditures for the major regulatory agencies quadrupled. The number of pages published annually in the federal register nearly tripled. Number any federal regulations increase by two thirds. The result has been higher prices, higher unemployment and lower productivity growth. Overregulation causes small and independent businessmen and women, as are well as Large Businesses to defer plans for expansion. Since they are responsible for most of the new jobs, those new jobs are just not created. We have no intention of dismantling the regulatory agencies. Especially those necessary to protect the environment and ensure Public Health and safety. However, we must come to grips with inefficient and burdensome regulations, eliminate because we can and reform the others. I have asked Vice President bush to had a cabinet Level Task Force for regulatory relief. I asked members of the cabinet to post Effective Date of the hundreds of new regulations which have not yet been implemented. Third, in coordination with the task force, many of the agency heads have already taken prompt action to review and resend existing burdensome regulations. And finally yesterday i signed an executive order for the first time that provides for effective and coordinated management of the regulatory process. Much has been accomplished. But it is only a beginning. We will eliminate those regulations that are unproductive and unnecessary by executive order where possible and cooperate fully with you on those that require legislation. The final aspect of our plan requires a National Monetary policy which does not allow money growth to increase consistently faster than the growth of goods and services. In order to curb inflation we need to slow the growth in our money supply. We fully recognize the independence of the Federal Reserve system will do nothing to interfere with or undermine that independence. We will consult regularly with Federal Reserve board on all aspects of our Economic Program and will vigorously pursue budget policies that will make their job easier and reducing monetary growth. A Successful Program to achieve a stable and moderate growth patterns in the money supply will keep both inflation and Interest Rates down and restore bigger to our Financial Institutions and markets. This then is our proposal. Americas new beginning, a program for economic recovery. I dont want it to be simply the plan of my administration. I am here tonight to ask you to join me in making it our plan. Together, we can embark on this. [applause] thank you very much. [applause] i should have arranged to quit right there. [laughter] [applause] together we can embark on this road, not to make things easy but to make things better. Our social, political and cultural as well as their economic institutions can no longer absorb the repeated shots that have been dealt them over the past decades. Can we do the job . The answer is yes. But we must begin now. We are in control here. There is nothing wrong with america. Together we cant fix. Im sure there will be some familiar old cry, dont touch my program, click somewhere else. I hope ive made it plain that our approach is evenhanded. That the only programs, only the programs of the truly needy deserve untouched. The question is will we simply go down the same path we have gone down before carving out one special program here and another special program they are . I dont think thats what the American People expect of us. More important, i dont think thats what they want. They are ready to return to the source of our strength. The substance and prosperity of our nation is built by the wages brought home from the factories, mills, farms and shops. The interest on the thrift and the returning, returns to the risktaking. The production of america is the position of those who build, serve create and produce. To him that we remove from our people the decisions on how to dispose of what they created. We strayed from first principles. We must alter our course. The taxing power of government must be used to provide revenues for legitimate government purposes. It must not be used to regulate the economy or bring about social change. [applause] we have tried that and surely, we must be able to see it does not work. Spending by the government must be limited to those functions which are the proper province of government. We can no longer afford things simply because we think of them. Next year, we can reduce the budget 41. 4 billion without harm to governments legitimate purposes or to our responsibility to all who need our benevolence. This plus the reduction in tax rates will help bring an end to inflation. In the health and social Services Area alone, the plan we are proposing will substantially reduce the need for 465 pages of law. 1400 pages of regulations. 5000 federal employees who presently administer 7600 separate grants in about 25,000 separate locations. [applause] over 7 million men and women hours of work by state and local officials are required to fill out government forms. I would direct the question to those who have indicated already and unwillingness to accept such a plan. Have they in alternative which offers a greater chance of balancing the budget, reducing and eliminating inflation, stimulating the creation of jobs and reducing the tax burden . And if they havent are they suggesting we can continue on the present course without coming to a day of reckoning . If we dont do this [applause]. If we dont do this, inflation in the growing tax burden will put an end to everything we believe in and out dreams for the future. We dont have an option of living with inflation. It is a tragedy millions of productive people