LETTER TO DAVID GRIES FROM WILLIAM L. BALL, III
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP90M00004R000300140040-6
Release Decision:
RIFPUB
Original Classification:
K
Document Page Count:
41
Document Creation Date:
December 22, 2016
Document Release Date:
September 1, 2011
Sequence Number:
40
Case Number:
Publication Date:
March 23, 1987
Content Type:
LETTER
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CIA-RDP90M00004R000300140040-6.pdf | 1.84 MB |
Body:
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Oli~lC~s~~~~"~'"t A~FPa a
4Y ~ !1
t ~L
March 23 , ].9 87 ~~~ ~~~ ...~
Thank you very much for participating in our briefing
recently in the Old Executive Office Building. It was
productive for us to meet and discuss the legislative
agenda and the overall priorities of the Administration.
I am enclosing the list of House Members to which I
referred in my comments, and I hope you will be mindful
of the important vote they cast for the President's
policy in Central America. In addition, I have enclosed
the President's Legislative Message to the Congress. It
is essential that we all remain familiar with the major
points in this message. I hope you will share it with
the rest of your legislative team.
Thank you again for being with us, and we look forward
to working with you in the months ahead.
Best regards.
Sincerely,
Wil`~iam L. Ball, III
Mr. David Gries
Director of Congressional Affairs
Central Intelligence Agency
Washington, D.C. 20505
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DEMOCRATS VOTING AGAINST MORATORIUM OF CONTRA AID (40)
H.J. Res. 175
March 11, 1987
Barnard
Bennett
Bevill
Biaggi
Byron
Chappell
Daniel
Darden
Dowdy
Dyson
Erdreich
Fascell
Flippo
Gibbons
Hall (TX)
Harris
Hatcher
Huckaby
Hutto
Jenkins
Leath (?'X)
Montgomery
Murtha
Nelson
Nichols
Ortiz
Pepper
Ray
Robinson
Roemer
Rowland (GA)
Sisisky
Skelton
Smith (FL)
Stenholm
Stratton
Tallon
"'auzir.
Thoma s ( GP. )
Wilson
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REPUBLICANS AGAINST
MORATORIUM (156)
Gingrich
Nielson
H. J. Res. 175
Gradison
Oxley
Archer
Grandy
Gregg
Packard
Parris
Armey
Gunderson
Pashayan
Badham
Hammerschmidt
Petri
Baker
Hansen
Quillen
Ballenger
Hastert
Raver,el
Bartlett
Hefley
Regula
Barton
Herger
Rhodes
Bateman
Hiler
Rinaldo
Bentley
Holloway
Ritter
Bereuter
Hopkins
Roberts
Bilirakis
Houghton
Rogers
Bliley
Hunter
Roth
Boulter
Hyde
Roukema
Broomfield
Inhofe
Rowland (CT)
Brown (CO)
Ireland
Saiki
Buechner
Johnson (CT)
Saxton
Bunning
K~sich
Schaefer
Burton
Kemp
Schuette
Callahan
Kolbe
Schulze
Chandler
Konnyu
Senserbrenner
Cheney
Kyl
Shaw
Clinger
Lagomarsin~
Shumway
Coats
Latta
Shuster
Coble
Lent
Skeen
Coleman (MO)
Lewis (CA)
Slaughter
Combest
Lewis (FL)
Smith (rTE)
Coughlin
r~ivingston
Smith (NJ)
Courter
T,att
Smith (TX)
Craig
Lowery (CA)
Smith
R. (NH)
Crane
Lujan
,
Snowe
Dannemeyer
I,ukPns, D.
Solomon
Daub
Lungren
S
Davis (IL)
N?ack
pence
Stangeland
Davis (MI)
Madigan
Stump
Delay
Marlenee
~undauist
DeWine
Martin (IL)
Sweeney
Dickinson
Martin (NY)
Swindall
DioGuardi
McCar_dless
Ta
l
Dornar
(CA)
McCollum
y
or
Thomas
Dreier
P:cDade
Upton
Duncan
McEwen
Vander Jagt
Edwards
(OK)
McMillan {NC)
Vucanovich
Emerson
Meyers
rg
lk
Fawell
Michel
a
er
Weber
Fields
hiller (OH)
~deldon
Fish
Miller {WA)
Whittaker
Gallegly
Mclinari
Wolf
Gallo
Moorhead
.
Wortley
Gekas
t4orrison (WA)
Wylie
Gilman
Myers
Ycurg (FL)
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TO THE CONGRESS OF
THE UNITED STATES
A QUEST :FOR
EXCELLE]vCE
198?
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TO THE CONGRESS OF
THE UNITED STATES
A QUEST FOR EXCELLENCE
I. INTRODUCTION
Tonight, I have come personally before the Congress to
report on the State of our Union and outlined how we can meet
the goal of renewing the American spirit - a spirit of excell-
ence. To achieve this, I have asked al]. Americans to commence
a new Quest for Excellence that will produce the third great
American century. I said about America: her best days have
just begun.
This message - A Quest for Excellence -spells out in
greater detail how we as a nation can successfully meet the
challenge of that century.
II. PREPARING FOR THE CHALLENGES AND
OPPORTUNITIES OFTHE 7.'WENTY-FIRST
CENTURY
Meeting the Competitive Challenge
America's competitiveness in world markets is critical to
maintaining and expanding our standard of living and the
national security. I have established a national goal of assur-
ingAmerican competitive preeminence into the 21st century.
Achieving that goal is the responsibility of all Americans.
Businesses must work more efficiently, setting high
standards of quality, streamlining operations, discarding out-
moded systems and management styles, adapting to change,
and building on their tradition as entrepreneurs who saw a
better way, had a better idea, worked a little harder. Workers
must be enabled to reach their potential by taking advantage
of new technologies and investing in education, training, self-
improvement, and a pride in their work.
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Families, in concert with State and local governments, have
the greatest responsibility of all - creating an educational
environment that can make our children productive citizens,
able to achieve the best, both spiritually and materially. We
must strive for excellence in education.
To fulfill the Federal Government's responsibilities, I
am launching asix-part program aimed at:
1. Increasing investment inhuman and intellectual
capital;
2. Promoting the development of science and
technology;
3. Better protecting intellectual property;
4. Enacting essential legal and regulatory reforms;
5. Shaping the international economic environment;
and
6. Eliminating the Federal budget deficit.
Increasing Investment in Human Capital
The National Commission on Excellence in Education
concluded in its report "A Nation at Risk," that "our once
unchallenged preeminence in commerce, industry, science,
and technological innovation is being overtaken by competi-
tors throughout the world.... If an unfriendly foreign power
had attempted to impose on America the mediocre education-
al performance that exists today, we might well have viewed
it as an act of war."
Much progress has been made since the Commission's
report, but much remains to be done:
-Forty percent of thirteen year olds are reading below
the skill level for their age;
-Only 75 percent of high school students graduate on
time;
-SAT scores are considerably below where they were
in the 1960's.
In order to correct this situation, our society must conti-
nue the reforms sparked by the National Commission's report
and focus education, particularly in the elementary and
secondary schools, on acquiring the basic skills that will be
necessary for jobs and careers in the 21st century. We must
teach our children to read, write, and compute in the early
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grades. By the time of graduation from high school, at a
minimum the student should have:
four years of English;
three years of mathematics;
~ three years of science;
three years of social science; and
proficiency in the use of computers.
I am charging the Secretary of Education with continuing
to work with our Nation's governors to identify what works in
American education and to seek out places of educational excel-
lence that will serve as national modefls.
In addition, our colleges and universities should adopt
more rigorous standards and higher expectations for academic
and student conduct. Our teacher preparation curricula should
shift from heavy emphasis on technique to subject matter
mastery, and schools overall should do more to help parents
form the character of their children. State and local govern-
ments also should consider extending the school year, as well
as making better use of the time spent in school.
In addition so that no one is left behind, we must renew
our efforts and refocus our resources to help disadvantaged
youth to enter the mainstream of our society. The Department
of Education will be developing and publishing a What Works
on the education of the disadvantaged. Furthermore, my
Administration is proposing reauthorization ofChapters 1 and
2 of the Education Consolidation and Improvment Act (ECIA),
and targeting resources on the neediest schools and youngsters;
fostering greater innovation, experimentation, and parental
choice; building accountability into the program; and providing
incentives and rewards for success.
To assure that every American -- no matter what age -
learns to speak, read, and write English so as to be able to fully
participate in our society and take advantage of the opportuni-
ties itaffords, I am announcing a goal of raising literacy levels
~ dramatically by the year 2000. In addition, we will be submit-
tingproposals to reform bilingual education, allowing greater
flexibility and innovation in Federally funded bilingual
` education programs.
Promoting flexible job skills and greater workforce mobi-
lity is also an important part of competitiveness. We will be
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proposing a new program to help all workers who are displaced
by adverse economic factors, such as rural economic problems,
technological changes at the workplace, or increased imports.
This $1 billion program, combining the best elements of the
current Trade Adjustment Assistance (TAA) and Job Training
Partnership Act (JTPA) programs, will help an estimated
700,000 additional workers each year to adjust to change, learn
new skills, or update old ones through retraining and counsel-
ingprograms developed under the guidance of local private
industry councils (PIC's). It will also provide incentives for
early return to the work force to lessen the burden on our
unemployment insurance program.
In addition, we will be proposing necessary legislative
changes in the administration of our Employment Service (ES)
and Unemployment Insurance (UI) programs. These changes
will give States greater flexibility in developing comprehensive
approaches to target human capital problems. Specifically, we
will ask that we amend our UI laws to devolve the financing,
operation, and administration of these programs to the States,
and that we amend the Wagner-Peyser Act to enhance State
capability in designing and administering community labor
exchange services.
Equally as important as helping dislocated workers to
adjust to new demands of an increasingly global market is
assuring that economically disadvantaged youth are not for-
gotten. We must assure that they are given the help and
opportunities to acquire skills to make them productive
citizens in an America that will critically need their talents.
My Administration is proposing an $800 million youth
initiative targeted towards improving the, skills of children in
welfare families. This program would permit States and locali-
ties to use Federal funds to provide summer jobs, develop year-
round remedial education and job training services, or a mix-
ture of both. In addition, we will propose a new employment
and training effort under the AFDC program: Greater Opport-
unities through Work (GROW). This program will encourage
teenage parents and other young recipients of AFDC assistance
who do not have a high school education to either stay in or
return to school. Services under these programs could include
remedial education and skills training that would help these
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young people break out of the welfare cycle and move towards
real opportunities for rewarding careers and jobs.
Finally, I have asked the Secretary of Labor to initiate a
study of the private pension system to see how it could be
improved to reduce barriers to greater mobility in the U.S.
work force. In addition, to enhance the effectiveness of the
private pension system in providing retirement income
security to American workers, my Administration will propose
statutory changes to the Employee Retirement Income
Security Act (ERISA) to make it more flexible in dealing with
overfunded pension plans while requiring employers to take
needed steps to strengthen underfunded pension plans.
Promoting the Development of Science and Technology
Science and technology are fundamental to U.S. competi-
tiveness. America's preeminence in research and innovation
has long been the envy of the world and a critical source of our
national strength. Breakthroughs by Americans in such areas
as medicine and transportation have consistently set the pace
for an improved standard of living around the world, and
American developments in communications, space, and even
entertainment have captured the imagination of successive
generations, setting benchmarks for American excellence in
the years to come.
But, we must recognize that our trading partners, in their
desire to improve their standards of living and market share,
are catching up. We must ensure that adequate incentives are
in place that will not only maintain our preeminence in
initiating ideas and know-how, but also our lead in setting the
pace at which these are translated into new products and
processes.
Our policies must serve three broad objectives:
1. Generating new knowledge in the sciences and
advanced technologies;
2. Swiftly transferring technologies to the marketplace;
and
3. Expanding the Nation's talent base in science and
technology fields.
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We will initiate a number of measures to achieve these
objectives. I am proposing that we double over five years the
budget of the National Science Foundation. My Administra-
tion will establish a number of new government-private
"science and technology centers" based at U.S. universities.
These centers will focus on fundamental science that has the
potential to contribute to our Nation's economic competitive-
ness, including areas such as robotics for automated manufac-
turingand micro-electronics, new materials processing, and
biotechnology.
I am directing the Departments of Agriculture,
Commerce, Energy, and Health and Human Services and the
National Aeronautics and Space Administration to initiate a
"Technology Share" program involving multi-year, joint basic
and applied research with consortia of U.S. firms and
universities.
We also will initiate a "People-to-People" exchange pro-
gram in which scientists and engineers from Federal labora-
tories and the private sector will be encouraged to make their
expertise available to each other through temporary assign-
mentexchanges.
In addition to improved access to the know-how of our
Federal scientists, the U.S. private sector must be encouraged
to take advantage of our Federal science and technology
enterprise. Since 1982, we have taken several actions to help
commercialize the results of Federally funded research by
transferring management of Federal technology to those
closest to its invention and encouraging cooperation on basic
research between government and industry and among
businesses. To enhance these efforts, I will issue an Executive
order containing a number of measures:
- To encourage scientists working in Federal laborator-
ies to patent, license, and commercialize their research so that
the private sector, including consumers, can benefit, Federal
agencies must implement royalty sharing programs with
Federal inventors;
- To fully exploit foreign science and technology, the
Department of State will develop a vigorous recruitment policy
that encourages scientists and engineers from other Federal
agencies, academia, and industry to apply for assignments in
U.S. embassies abroad; and
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- To promote technology transfers and commercial spin-
offs from Federal research and development efforts, Federal
agencies and Federally operated laboratories will seek out
"science entrepreneurs" to act as conduits between the
laboratories and business, venture capitalists, and
universities;
- To ensure that industry and academia benefit from
research and technology abroad, the Departments of State and
Commerce and the National Science Foundation will develop a
mechanism to ensure that this information is made available
in a prompt and efficient manner.
My Administration will implement a policy permitting all
Federal contractors to own software, engineering drawings,
and other technical data generated by Federal contracts in
exchange for royalty-free use by the government. This will
help commercialize non-patentable results of Federally funded
research.
Because it is important that business have adequate
incentives to fund research here in the United States, we are
seeking legal and regulatory stability for research and
development in the R&D tax credit, a.s well as Section 861 tax
rulings on the allocation of R&D expE;nditures overseas.
Speaking of incentives, we must not forget the scientists
and engineers of tomorrow -our children. Not only should we
help our young people become more familiar and interested in
science and engineering careers, but we must also broaden our
notions of "basic skills." I am directing that the National
Science Foundation and other Federal science agencies work
with the Department of Education and State and local govern-
ments to assure that our children have the scientific literacy
needed for the 21st century. To promote interest in careers in
science and engineering, these agencies will:
-establish internships for promising students at
Federally supported research labs;
-advise in the development offirst-rate scientific and
technical curricula -textbooks, software, and lab materials -
usingthe expertise of top U.S. scientists and engineers;
-provide matching contributions to schools and univer-
sitiesfor instructional scient~c equipment and computers; and
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-undertake promotional efforts regarding science and
technology careers for minorities and women.
My Administration is also expanding our strong budget-
arysupport for basic research, which has grown in real terms
by 42 percent since 1981. Key new or expanded initiatives
proposed in my 1988 Budget include design and construction by
the United States, in conjunction with our friends and allies, of
a permanently manned space station; development of a
National Aerospace Plane; development of advanced civil space
technology; global geospace science and planetary sciences
programs; improved manufacturing technologies; hyper-speed
integrated circuits; and mapping human DNA.
The Department of Defense in fulfilling its mission of
ensuring our national security, also plays an important role in
contributing to U.S. economic competitiveness. I am directing
the Department of Defense, whose investment in R&D, testing,
and evaluation will increase about 17 percent this year, and
has more than doubled since 1982, to accelerate its ongoing
efforts to "spin off" technologies to the private sector. Previous
commercial applications of defense technology have included
such things as night vision capability for use in police and
rescue work and computer-based reading training programs to
develop basic and job skills. Technologies targeted for future
potential spin offs include: ceramic composite materials for
more efficient engines; ultra-reliable radar for air traffic cont-
rol systems and commercial aircraft; and enzymes for improved
toxic waste disposal and decontamination. In addition to its
primary function of strengthening deterrence, our Strategic
Defense Initiative (SDI) should yield important spin-offs. As
with the Apollo and space shuttle programs before it, SDI will
advance scient~c progress across a broad range. The
Department of Defense will also work to assist industry in
renewing its manufacturing competitiveness in the critical
technologies.
Better Protecting Intellectual Property
Critically related to improving development of science
and technology is ensuring protection, both domestically and
internationally, of the property rights of inventors of new pro-
ducts and services and creators of new ideas and works of art.
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We will seek statutory changes to: encourage patent
owners to engage in newer and more novel ways to license
their patents by limiting the "patent misuse doctrine;" raise
protection for products resulting from patented processes to the
same level as that accorded such products by our major trading
partners; and amend the Clayton Antitrust Act to provide a
more flexible standard of review for intellectual property
licensing arrangements. Furthermore,. we will restore the
bargaining power of parties contracting to license technology
by codifying and clarifying the Supreme Court holding in Lear
u. Adkins; eliminating the current injury requirement from
Section 337 ITC proceedings to exclude imports; and restoring
the term of patents covering agricultural chemical products
and animal drugs up to a maximum of five years to account for
the period lost due to mandatory Federal premarketing regula-
tory review and testing. My Administration will propose
statutory changes to reduce the cost of defending patent rights
by: (1) mandating an award of attorneys' fees in frivolous suits
on cases of willful infringement; and (2) requiring challenges
to patent validity to first go through an administrative
proceeding before going to court.
We will also seek a "technological" solution to the
potential problem of unauthorized copying of copyrighted
material on digital audio tape recorders.
We will also be proposing the necessary statutory changes
to our copyright law to permit the United States to join the
Berne Convention for the Protection of Literacy and Artistic
Works. Seventy-six countries have signed this treaty; by
joining, our country will gain copyright- relations with approxi-
mately 20 countries with which we currently have none, or
relations are unclear.
I am directing all Federal agencies to take into account
the treatment of U.S. intellectual property when they are
negotiating international agreements or providing bilateral
economic assistance.
I will issue an Executive order to better protect business
confidentiality under the Freedom of Information Act (FOIA)
by giving businesses the opportunity to object to the release of
commercial information submitted to the government.
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My Administration will also propose statutory changes to
FOIA expanding the definition of the "trade secrets" and
"confidential commercial information" exemption to permit
the government to withhold information that would cause
harm to the Federal Government or commercial sector if
released.
In addition, the Patent and Trademark Office will be
making its technology file of U. S. patents and English langu-
age abstracts of Japanese and European patents available as a
research tool to business and universities through private
contractors or regional search centers.
Enacting Essential Legal and Regulatory Reform
Outmoded rules, regulations, excessive paperwork, and
self-imposed disincentives can place us at a major disadvan-
tage in an increasingly competitive world marketplace. We
will propose a number of legal and regulatory reforms to
eliminate these obstacles to competitiveness.
We must stop draining off resources from our economy
through product liability judgments that have gotten out of
hand. We will propose legislative measures to reduce the
costly product liability insurance spiral affecting the produc-
tion costs of U.S. goods while still providing the necessary
protections for consumer health and safety.
Businesses in the 21st century will have to compete on a
global scale; to do so, they cannot be bound by rules designed to
fit the far different markets of the early 20th century. Thus we
will be proposing antitrust refinements to allow firms to
develop new ways of organizing and operating that take
account of the increasingly global nature of markets.
I am directing the Cabinet to undertake a review of the
export controls program and report to me by early March,
198?. While preserving U.S. security interests, the Cabinet is
to provide recommendations to achieve the following: decon-
trolling technologies that offer no serious threat to U.S.
security; eliminating unilateral controls in those areas where
there is widespread foreign availability; and reducing the time
necessaryto acquire a license by at least one-third and
implementing a fair, equitable, and timely dispute resolution
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process. These actions must be coordinated with efforts by our
allies to make procedures more uniform and enforcement more
rigorous.
We will reinforce our efforts to improve the competitive-
ness of American industry through deregulation and paper-
work reduction. I have asked Vice President Bush to direct the
Task Force on Regulatory Relief to take a fresh look at the
Federal regulatory structure from the competitiveness stand-
point and to improve or eliminate unnecessary regulatory and
paperwork burdens. ?We will press for legislation to complete
the deregulation of the trucking industry and will oppose
efforts to re-regulate air and rail transportation. We will
continue to pursue legislation to seek full deregulation of the
pricing and transportation of natural gas, including repeal of
demand restraints in the Fuel Use Act, and to repeal the
windfall profits tax. We will also propose legislation to
implement oil pipeline deregulation.
Shaping the International Economic Enuironment
The litmus test of whether we will be truly competitive in
the 21st century will be our ability to meet the competition
head-on -and win - in the international marketplace. The
Federal Government can play a key role here by helping to
shape an international environment in which American
knowledge, talent, and entrepreneurship can flourish.
In an increasingly interdependent world, currency flows,
foreign government policies with respect to spending, saving
and taxes, and trends in foreign investment all have a major
impact on the competitiveness ofAmerican firms. We must:
shape these factors in ways that enhance, not inhibit, our
competitiveness. This will require improved economic and
monetary cooperation on a global scale. We will build on
progress over the past year, including'the new institutional
arrangements we have developed both multilaterally and
bilaterally, to guarantee a more stable and realistic value for
the dollar, improved growth abroad, and an accompanying
growth in markets for American firms.
The developing countries, particularly those in Latin
America, represent new growth markets of the next century.
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We will work to ensure that these markets meet their full
potential by pressing our initiative on the debt problem, with a
view towards increasing private investment and encouraging
the necessary policy reforms within the developing world.
My Administration has aggressively used the funding
provided in last year's "war chest" legislation to combat
aggressively foreign predatory financing practices. We will
focus our efforts on achieving an international agreement
limiting these practices. But at the same time, our trading
partners and competitors should be on notice that we will use
our full authorities to counter foreign subsidized credit offers.
To this end, we will be seeking the additional $200 million in
"war chest" monies promised last year.
We will not tolerate closed markets, trade barriers, and
unfair foreign subsidies that disadvantage American firms in
the world marketplace. We will aggressively seek to open
foreign markets through multilateral and bilateral
negotiations and eliminate foreign unfair trade practices
whenever and wherever they occur through the active use of
our trade laws.
We must ensure that the laws of the trading system
recognize the commercial realitie's of the 21st century. We
made major progress this past year in securing the launch of a
new round of multilateral trade negotiations in GATT. We
will push hard for quick results from the Uruguay Round in
areas critical to our competitive future, including agriculture,
services, intellectual property, and investment.
We will also seek to achieve a major market opening close
to home. More trade passes between the United States and
Canada than between any other two countries in the world.
We are now engaged in historic negotiations with Prime
Minister Mulroney's government on a free trade agreement
that will improve commercial opportunities on both sides of the
border and serve as a model for trade liberalization on a global
scale. We will work with the Canadians and the Congress to ~
conclude an agreement in our mutual interests.
We will continue to assure that bribery to gain markets is
deterred with criminal sanctions. However, uncertainty and
ambiguity arising from portions of the Foreign Corrupt
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Practices Act serve as a needless disincentive to American
business. My Administration will again propose amendments
that eliminate these uncertainties by clarifying the Act's
"reason to know" and other provisions and reduce its costly and
duplicative accounting requirements.
Our trade laws have proven to be effective instruments
for opening foreign markets and defending American indus-
triesagainst unfair practices on the part of our competitors. I
will propose improvements to these laws that will enhance our
ability to meet the challenges from abr. oad without erecting
protectionist barriers at home. Our proposals will emphasize
opening markets through multilateral and bilateral negotia-
tion, not closing them; encouraging adjustment while
providing improved relief to industries injured by import
competition; and tightening our laws to make them more
effective in dealing with unfair foreign competition.
Reforming Federal Spending
Controlling Federal spending remains an essential ele-
ment of our efforts to strengthen the economy and place it on a
firm footing for the future. My Administration is continuing
efforts to reduce the deficit. We have proposed a budget that
meets the Gramm-Rudman-Hollings deficit target, and does so
by reducing spending, not by raising taxes. I urge its passage
by the Congress.
Working together, we need to begin to explore ways in
which the budget process itself can be reformed and improved.
Many Members of Congress feel that the system through which
budget decisions are made is not working the way it should,
and I share that view. Its deficiencies, unfortunately, are
reflected in the results. Deadlines for congressional action too
often are missed or ignored; the threat of a government-wide
shutdown has become an almost regular feature of the begin-
ning offiscal years; and the end product of this process remains
a Federal budget that provides for excessive spending and a
large deficit. I am committed to working with the Congress to
establish procedures to encourage cooperation rather than
confrontation between the Executive and Legislative branches
on the crucial issues of Federal spending and to adopt
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measures that will help make the budget process more respons-
ibleand more accountable.
Finally, I will again propose that the Congress adopt a
Balanced Budget Amendment to the Constitution and the
establishment of aline-item veto. Adoption of a Balanced
Budget Amendment would represent our acceptance of a
simple yet fundamental principle -the Federal Government
must live within its means. Aline-item veto would further
enhance our capacity to reduce and eliminate wasteful and
redundant expenditures. I strongly recommend that these two
reforms be adopted.
Agriculture
From the beginning of this Republic, agriculture has been
the backbone of America and is the Nation's largest single
industry. We can be proud that each American farmer now
feeds 88 of our citizens plus 30 people abroad. Yet in spite of
this bounty, all is not well in rural America. Farmers have
suffered from events that in many cases have been beyond
their control, such as unfavorable currency exchange rates,
unfair competition, and government interference. Still, most
farmers retain their faith in America and their dedication to
our free enterprise system. We must stand by them through
these troubled times.
Major farm legislation was put into effect last year to
address those concerns. The Food Security Act of 1985 was a
significant improvement over previous legislation but has not
addressed several continuing problems. Commodity programs
still provide too much incentive for overproduction. Our
farmers are required to produce to qualify for payments and
loans. Program costs are at an historic high, and some farmers
receive very large individual payments. In addition, our sugar
program is unfair to our consumers, our trading partners, and
many developing countries.
We will ask the Congress to make improvements in farm
legislation. Our proposal will be designed to break the link
between eligibility for payments and production decisions, to
further lower target prices and loan rates and to impose tighter
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limits on farm program payments. We will also ask for an
overhaul of our sugar program. These changes will help U.S.
agriculture focus more on market forces and lesson
Washington; net outlays for agriculture will come down
gradually and will still be very generous for the next several
years. The resulting reduced governrnent influence and
greater reliance on the marketplace will be essential to the
long-term competitiveness and viability of U.S. agriculture.
At the same time, we will continue to press aggressively for
comprehensive agricultural negotiations during the Uruguay
Round. Our farmers deserve a level playing field in order to
compete fairly in international trade and we are committed to
make that objective a reality.
Competitive Financial Services
The financial services industry must be permitted to
keep pace with changing technology, global competition, and
consumer demand for expanded services. I am proposing that
the Congress implement the recommendations ofVice-
President Bush's Task Force on the Regulation of Financial
Services. We must rationalize our Federal regulatory
structure.
A little over one year ago, the Congress asked us to
devise a plan to rescue the Federal Savings and Loan Insur-
ance Corporation (FSLIC). We responded early in 1986 with
a plan based on two fundamental principles. First, we have
devised a truly self-help plan; the taxpayers will not be
required to bailout a profitable industry that, with some
measure of sacrifice over time, can help itself. Second, our
recapitalization plan has sufficient resources (about $25-30
billion over five years), available when necessary, to meet the
very real problems that exist today. By giving FSLIC the
resources to handle the hundreds of insolvent Savings &
Loans still in operation, we will protect almost $900 billion of
depositors' savings insured by FSLIC.
Both Houses of Congress passed our FSLIC recapitaliza-
tionplan in the closing days of the 99th Congress, but it was
not enacted into law because of disagreements about unrelat-
ed amendments. We cannot afford additional delay. I urge
the 100th Congress to enact our FSLIC plan quickly and
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cleanly so that it can get the resources it needs to safeguard
America's small savers.
I also urge the Congress to work with us and the rapidly
growing coalition offorward-looking financial firms to develop
a comprehensive modernized legal structure for the financial
services industry. The "protectionist" approach of repairing
the crumbling walls of 50-year-old financial oligopolies will not
work: consumer tastes, technology, the marketplace, and our
international competition will move beyond.
Working men and women want to receive the best
services at the lowest prices. They also seek safety and
convenience. Our businesses and local governments want
competitive and innovative financial offerings. Many banks
and other firms are pressing for an opportunity to supply these
products and services. Our laws should not stop them.
We need to promote a freer, more competitive financial
services marketplace, complete with proper supervision and
meaningful disclosure. In doing so, we can help this vital
American industry to reposition itself on the leading edge of
the financial services world.
Management, Civil Service, and Procurement Reform
We will submit proposals to improve the management of
the Federal Government. These management reform measures
are designed to achieve long-term gains in Federal efficiency
and productivity and include proposals to improve existing
financial procedures, combat fraud, waste and abuse, and
generally make more effective tools available to Federal
managers. The Congress should establish productivity impro-
vement as anational goal. There can be no more important
task than that of delivering government services to all our
citizens in a more efficient, effective, and timely manner.
As part of this effort, we will submit a number of
proposals for civil service reform -proposals that will help our
government give the American people what they pay for by
deregulating the bureaucracy and by rewarding individual
merit and achievement. By straightening out the way our
Federal bureaucracy does its work, we can deliver on our
promises to the American people quickly and efficiently. The
proposed Civil Service Simplescation Act will streamline an
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overly complex system. It will free our public servants from
thousands of pages of unnecessary rules and regulations that
have made it hard for them to do their jobs. As with
deregulation of private business, this proposal will deregulate
the public business; it will provide for a Federal pay system
truly based on merit and individual performance; it will, in
other words, introduce into our Federal Government the
traditional productive values of the American workplace:
entrepreneurial freedom, responsiveness to the people, and
reward for hard work.
To aid in achieving the goal of a three percent annual
productivity increase, we will also propose reform of seniority
pay for Federal employees. This will introduce pay-for-
performance throughout the government by shifting from the
current system -which gives seniority-based salary raises to
virtually all Federal employees regardless of personal
achievement - to one based solidly on merit and individual
performance. With stronger incentives to deliver, Federal
employees will participate more in the program and apply their
insights and skills to the development of productivity
initiatives.
My Administration will propose that the Congress enact
the Health Insurance and Payment Verification Act. This
legislation would establish a process to ensure that existing
employment based health insurance would pay health care
costs before payment was sought from. taxpayer funded health
programs.
An expiring provision of the Deficit Reduction Act of 1984
allows the Federal Government to recover delinquent debts
owed Federal agencies through the offset of income tax refunds
otherwise due the taxpayer. This program is very successful
and through legislation we will seek to extend this authority
for another two years.
Last year, significant changes were made in defense
procurement processes. My Administration will work with the
Congress this year to make numerous needed reforms in the
Federal Government's non-defense procurement area. These
will include a comprehensive recodification of all existing
procurement statutes into one simplified, consistent statute, as
well as authority for Federal civilian agencies to enter into
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multiyear contracts. The Federal Government should depend
more on the private sector to provide support services for
Federal activities. We will pursue this objective through a
variety of initiatives aimed at reducing any adverse effects on
government employees from contracting out. For example, we
will explore measures to encourage employees to form their
own business and take over their government jobs as private
contractors.
Government procurement should be competitive in all
aspects, including keeping pace with costs and salaries for
comparable services procured by the private sector. We will
propose legislation to increase the Davis-Bacon and Service
Contract Act threshold levels to $1 million for defense
contracts and $100,000 for non-defense Federal contracts. This
increase is important in light of increases in salaries and other
costs over the past several decades.
Credit Reform and Privatization
In order to operate more efficiently to the benefit of
taxpayers, the government must take better account of the true
budget costs of Federal credit programs. We are proposing
legislation to reform government assistance programs by
requiring that the present value of Federally provided
subsidies from any agency making or guaranteeing loans be
appropriated in advance, into a new central revolving fund
within the Department of the Treasury. Newly made direct
loans will be sold and new guarantees reinsured in order to
establish the market value of Federally assisted credit and
measure the subsidy. This will improve both the allocation and
management of Federal credit.
The private sector should have the opportunity wherever
possible to produce goods and services currently provided by
the Federal Government in order to reduce government
expenditures as well as provide the benefits of market
competition to consumers. In light of our successful efforts to
authorize the sale of Conrail, we are now proposing the sale to
the private sector of the Naval Petroleum Reserves, the Alaska
Power Administration, the helium program, and excess real
estate, as well as the disposition of certain Amtrak assets. We
are proposing legislation to authorize a study of a possible
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potential divestiture of the Southeastern Power Administra-
tion. In addition, my Administration will expand our pilot
program of selling existing loan assets without recourse.
Small Business and Entrepreneurship
Small business is at the cutting edge of America's com-
petitiveness. The 1986 National White House Conference on
Small Business has provided us with recommendations on
many issues addressed by my legislative agenda. These
recommendations are directed towards creating a better
environment for our Nation's small business owners who,
through their vitality and creativity, contribute sign~cantly
towards our prosperity. The recommendations range from tort
law and product liability reform to reducing the deficit and
improving our international trade position. These views have
been incorporated in framing our positions on these issues. In
addition, we soon will have a permanent Administrator for the
Small Business Administration (SBA), and I can assure you
that small business will continue to have an important voice in
the councils of government.
III. VALUES: THE SOURCE OF OUR EXCELLENCE
As we work to expand economic opportunity for all
Americans, we must also take steps to sustain the traditional
cultural and moral values that are the bedrock of American
democracy. We must renew our belief in the dignity of self-
supporting individuals and families, in safe and self-governing
neighborhoods and communities, and in a government that is
both limited and close to average citizens. By promoting
policies that sustain and enrich these values, we can help to
create an environment in which all Americans utilize their
individual talents to achieve excellence and contribute to
family, community, and nation.
Education
I have already said how important quality education is to
our future economic success. But we must also promote policies
that recognize the importance of education as the main trans-
mitter ofour shared history and values and as the primary
means of escape from poverty for America's poor. Following
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the pattern of What Works and Schools Without Drugs, the
practical handbooks issued in 1986, my Administration will
prepare a clear and reliable handbook this year to explain what
works in the education of the disadvantaged.
Low Income Opportunity
A year ago, I asked the White House Domestic Policy
Council to evaluate our Federal public assistance programs
and to propose a new national strategy for helping poor
Americans "escape the spider's web of dependency." This year,
I will address the main findings of that evaluation, which was
contained in our report, "Up From Dependency," released in
December.
Our report shows, clearly and persuasively, that our vast
and expensive welfare system is a tender trap: while it rescues
many Americans from short-term distress, it also sustains far
too many in long-term dependency. Our current welfare
system is a complex labyrinth of 59 major programs that cost
more than $132 billion in Fiscal Year 1985. Forty other
Federal programs for the poor brought total low income
spending to $150 billion, yet our poor and our taxpayers receive
little in return for this enormous annual investment. The
current welfare system is so complex and its incentives so
perverse that it demoralizes the poor, undermines the willing-
ness to work, and weakens families and communities.
I will propose a major new national strategy to reform this
flawed welfare system. Our goal is to create a system that
gives poor Americans the opportunity and aid to escape the
tender trap of welfare and become more productive and self-
reliant contributors to American society. Our proposal will ask
that Federal welfare requirements be waived to allow States to
establish a series of demonstrations in welfare policy. We are
not proposing to cut Federal welfare benefits for the truly
needy. The idea is to begin a process that will tap the hundreds
of good self-help and anti-poverty ideas currently blossoming
around the country. For too many years our Federal welfare
policies have assumed that all of the answers could come from
experts in Washington, D.C. Those policies have had 20 years
to work and have failed. Our demonstration strategy seeks to
find solutions to poverty and welfare dependency in the
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practical genius of the States, communities, and individuals
who must cope with those problems every day.
The Family
The problem of welfare dependE;ncy cannot be separated
from the well-being and solidity of America's families. Both
common sense and social science tell us that intact, two-parent
families will be far better offfinancially and socially than will
families led by a single father or mother. Family breakup
remains the primary reason that family income falls below the
poverty line.
My Administration is committed to supporting public
policies that strengthen the role and bond of families in
American life. Last year at this time, I charged my Domestic
Policy Council's Working Group on the Family to study and
issue a report on the state of the American family. This year I
am endorsing the report, released to the public in November, as
a landmark in understanding the ways in which government
policies have affected, often adversely, family life in our
Nation. My Administration will also work to implement the
recommendations contained in the report.
Since 1973, after a divided Supreme Court ruled in Roe v.
Wade, nearly 20 million unborn children have perished in our
land due to abortion. This toll continues to climb -despite
increasing evidence of the humanity of the unborn child and
the growing desire of millions of young couples to adopt. My
Administration will submit legislation this year to further my
commitment to protect the rights of unborn children. Our pro-
posalswould prohibit Federal government funds from being
used to; (1) perform abortions, except when the life of the
mother is endangered if the unborn baby were carried to term;
and (2) support, through Title X family planning grants or
contracts, any organization (except a grant or contract directly
administered by a State or local government) that provides
abortion procedures or referral for abortion, unless the life of
the mother would be endangered.
Health
Our Nation's health care system is the finest in the world,
yet it is also a very expensive system with costs that are
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continuing to rise faster than the rate of inflation. My Admini-
stration has worked since 1981 to create incentives that would
keep health costs down and improve quality by encouraging
more competition in health care delivery. In 1987, we will
again ask the Congress to pass legislation to expand the use of
private health plan options - paying a fixed, predetermined
price for health services - to the government medical pro-
grams of Medicare and Medicaid. My Administration will also
propose that Medicare payments to doctors who practice in
hospitals be reflected in a set price for each medical diagnosis;
this will provide further incentives for doctors to provide
quality care at lower costs.
To encourage private health care competition, my
Administration will propose an optional Medicaid health plan,
offering States fiscal incentives to place Medicaid beneficiaries
in private health insurance plans that provide comprehensive,
managed care for a predetermined price. We will also ask
Congress to pass a Medicare Expanded Choice Act, which will
allow the elderly to choose the private health plan that best
suits their needs. Each plan would have to offer coverage at
least equivalent to that of basic Medicare.
My Administration will also continue to invest in re-
search to cure heart disease, cancer, and other life-threatening
diseases. In particular, we will continue our work to find a
cure for acquired immune deficiency syndrome, or AIDS. We
are also increasing basic research to better understand the
causes of AIDS and to find a cure for AIDS or a vaccine to
prevent it. Last year the Surgeon General issued a report that
was a landmark in public education about AIDS. We will
expand that education effort this year, stressing that education
about AIDS to schoolchildren must be grounded in the moral
and cultural values of parents and communities.
Catastrophic Illness Coverage
All Americans, and especially our elderly, face a small
but significant risk of a devastating illness or accident that
will bring with it crushing medical bills. Most of us have ade-
quate financial protection through private or public insurance,
but because the risk is small, not all of us pay attention to the
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implications of a truly disastrous illness. We need to remind
ourselves to make sure we are adequately protected, and both
private industry and government should continue to work
together to be sure that such protection is available to all of us
at affordable prices.
With this in mind, I_will shortly submit to the Congress a
proposal to improve catastrophic illness coverage to the elderly
to avoid the fear of an acute care illness so expensive that it can
result in having to make an intolerable choice between
bankruptcy and death.
The Crusade Against Drugs
Nothing erodes our Nation's basic social fabric more than
drug abuse. Last year our Administration made the fight
against drug abuse a top priority, working with Congress to
pass sweeping legislation to attack this problem both among
users and suppliers.
This fight is a top priority again this year. We will
continue to implement our six-point program to achieve a
drug-free America, through achieving drug-free workplaces
and schools, expanding drug treatment and research, greater
international cooperation, enhanced law enforcement, and
increased awareness and prevention of illegal drug use. We
are devoting large and appropriate amounts of money to this
fight. From 1981 to 1986, Federal drug enforcement funding
increased by 130 percent, and the mtmber of FBI and Drug
Enforcement Agency agents assigned to drug investigations
nearly doubled. Our task this year is to implement the new
legislation and to use our money wisely, even as we continue
our public and educational campaign to change, once and for
all, any lingering perception that drug abuse is a victimless
crime. We will work through the National Drug Enforcement
Policy Board, and with our friends and allies in the world
community, to implement the enforcement provisions of the
anti-drug law aimed at reducing the supply of drugs into our
country. Just as important, our Departments of Education and
Health and Human Services will expand their efforts to reduce
the demand for drugs, especially among our children. The
resources in the fight against drug abuse consist of much more
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than Federal money, however. They include the efforts of all
Americans and institutions -parents, schools, churches, civic
groups, and State and local governments. We must continue,
as an Administration and as a nation, to encourage every
American to "Just Say No" to illegal drugs.
Housing and Community Development
Part of the American dream has always included safe and
affordable housing, and this Nation's housing quality and rate
of home ownership are among the best in the world. Our last
four years of economic progress have reduced interest rates and
raised take-home pay, putting home ownership within the
reach of ever more Americans. Industry studies show that
more Americans are now able to afford housing than at any
time in the last eight years.
Our challenge now is to bring quality housing within the
reach of even poor Americans. To do this, we will continue to
expand the use of rental housing vouchers, which increase
mobility and housing choices for the poor. Since 1984 more
than 141,000 vouchers have been appropriated for poor
families. We will also continue our public housing home
ownership initiative. On January 8 of last year, a McKeesport,
Pennsylvania, family became the first in the country to buy its
own home under this initiative, which seeks to give poor
Americans the sense of personal pride and responsibility that
comes with home ownership. We will also continue our efforts
to reduce housing construction costs through the Joint Venture
for Affordable Housing, to improve the management and
upkeep of existing public housing units, to fight housing
discrimination by strengthening government law enforcement,
and to better target our public housing aid by asking the
Congress to approve a Tenant Income Verbcation proposal
that would make it easier to determine who is truly in need.
Pride in ownership also depends on pride in neighbor-
hood, and once again this year we intend to ask the Congress to
revitalize our Nation's poor neighborhoods by passing
legislation to create enterprise zones. More than half of the
States have already demonstrated how much these zones can
contribute to economic growth by removing tax and regulatory
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obstacles to development in depressed urban and rural areas.
My Administration will also work to help distressed communi-
ties by asking Congress to extend the National Flood Insurance
Program to 1992, and by seeking legislation to make disaster
assistance more timely, cost-effective, and better managed. As
part of my Administration's emphasis on strengthening
Federalism, we will continue to eliminate excessive Federal
directives for State and local community development
activities under our Community Development Block Grant
program.
Federalism
In this 200th year of our Constitution, we as a Nation
need to reaffirm the basic federal principle that the best form of
government is often the one closest to our citizens. In April of
last year I signed a "Statement of Federalism Principles" to
begin this reaffirmation, and last November I reviewed a
report on the "Status of Federalism in America" prepared by
our Administration's Federalism Working Group. The
revitalization of Federalism as our system of constitutional
government is a return to the vision of an indivisible union of
States - a system in which the national government exercises
sovereign authority in accord with the limits of its constitu-
tionallyenumerated powers, and the States exercise sovereign
authority in all other areas.
This year we intend to implement reforms outlined in our
report. We will review proposed legislation and executive
actions to identify their constitutional authority and justifi-
cationand their impact on our Federal system's balance of
powers. We will also continue to oppose the use of grants as a
means to indirectly regulate States in areas, such as the 55
mile per hour speed limit, in which they have traditionally
exercised authority. We will oppose efforts to preempt State
laws, except when the Constitution plainly indicates a
legitimate Federal concern.
Justice and Personal Freedom
Our Constitution is dedicated t-o the belief that our system
of justice must strike a balance between enforcing the rules of a
civilized society and sustaining human liberty. In areas where
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our laws or court decisions have tilted too far in either
direction, we must do what we can to restore the proper
balance.
My Administration will work first of all to regain this
balance in our criminal justice process. In 1987, I will again
support legislation to impose the death penalty in appropriate
Federal criminal cases and to modify habeas corpus procedures
to reduce delay in State courts and make it clear to criminals
and society that justice is swift and sure.I will also submit
legislation to modify the exclusionary rule so that evidence
seized by police in a good-faith belief that the seizure was
lawful maybe introduced as evidence at a trial. Based on last
year's report of the Commission on Pornography, I have also
approved aseven-point program designed to curb the growth of
child pornography and obscenity. I call upon the Congress to
pass swiftly the legislation we will propose to protect our
children from this menace.
On behalf of human and religious liberty, I will again ask
the Congress to pass a constitutional amendment to restore the
right of students to voluntary, vocal prayer in the public
schools.
In appointing members of the judiciary, I have tried to
select women and men committed to justice under law. Chief
Justice Rehnquist and Justice Scalia, confirmed last year to
their positions on the Supreme Court, understand well John
Marshall's insight that our-Constitution provides "a rule for
the government of courts, as well as of the legislature" and the
executive. I will ask the Senate to continue working with me to
appoint judges who understand the dangers of unrestrained
judicial power, and who are committed to legal interpretation
based on our Constitution rather than on individual policy
preferences.
I will also propose initiatives to reduce the increasing
burden of litigation in our society. I have already mentioned
that we will again propose tort reform legislation. We will also
investigate potential reforms to help with the problems of
increasingly high attorneys' fees and damage awards.
My Administration remains committed to enforcing our
civil rights laws. We must not be diverted from our pursuit of
justice because of government policies that treat individuals
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differently based on their race or ethnic background, even
when those policies are well-intentioned. My Administration
will oppose legislation that provides government preferences
based on race or other special categories, and not to all
Americans. The American ideal is to allow equal opportunity
for all, not to enforce equality of results or outcomes.
Energy and Environment
My Administration has worked throughout its time in
office to protect our environment, even as we have worked to
develop our enormous natural resource wealth ~n and off
shore. Last year I signed bills committing Federal money to
clean up toxic waste and to protect the Nation's supplies of
drinking water.
This year we will continue to study the issue of strato-
spheric ozone depletion. We will also continue to work with
private industry, the scientific community, and our neighbors
in Canada to monitor and find solutions to the presence of acid
rain in forests and waterways. We are also developing
proposals that make use of market incentives to control air
pollution caused by sulfur dioxide and nitrogen oxide emissions
and the causes of acid rain. We hope to work with the Congress
to ensure that air quality is improved without reducing
economic growth or damaging the competitiveness ofour
Nation's industry.
We recognize the importance of maintaining America's
energy security. In 1987 we will consider one of the decade's
most important resource management decisions -the future
use of the coastal plain of the Arctic National Wildlife Refuge
in Alaska. This area is blessed both with abpndant wildlife
and potentially enormous oil reserves that are vital to
America's energy security. My Administration will recom-
mend to the Congress a management solution that best
balances our environmental heritage with the Nation's
economic and national security needs. I have received the
report of my Commission on Americans Outdoors, and it will be
studied by the Domestic Policy Council. We will also continue
to fill the Strategic Petroleum Reserve, to reach an eventual
goal of 750 million barrels. And once again, we will seek
legislation to standardize designs and simplify licensing for
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nuclear power plants. Our goal is a stable, predictable process
that encourages nuclear plant construction that is reliable,
cost-effective, and environmentally sound. Our democratic
allies in the developed world have proven that well managed
nuclear power can be a major source of safe and cheap home-
grown energy; thus, America needs to revitalize its own
nuclear power industry. I have also ordered ahigh-level
interagency review of U.S. energy security to determine what
other actions we can take to avoid overdependence on foreign
oil and to strengthen our domestic oil industry.
Transportation
America's transportation network is the envy of the
world, yet the demands of our expanding economy require that
we continue making expansions and improvements. For 1987
I will propose legislation to extend and amend the Airport and
Airway Improvement Act. This legislation will allow my
Administration to continue to modernize the Nation's air-
traffic control system, increase the number ofair-traffic con-
trollersand aviation inspectors, and improve the Airport Grant
program. Last year was one of the busiest but safest ever in
America's air transport history, and these new proposals will
ensure the continued safety, reliability, and capacity of our
national aviation system.
My Administration will also seek continued authorization
of Highway and Mass Transit programs through FY 1990, and
we will propose legislation to increase both State and local
discretion in using Federal highway funds. In accordance with
our federalism principles, we believe that State and local
governments are usually better able than the Federal govern-
ment to determine local transportation improvement needs.
Private Sector Initiatives
In the past six years, my Administration has worked to
inspire private individuals and companies to play a more active
role in their communities. We will continue this successful
effort, which is now being copied around the world. If indivi-
dualsand community groups take more responsibility for
public affairs, we are less likely as a Nation to cede our freedom
and opportunity to the Federal, government.
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IV. INTERNATIONAL PEACE AND FREEDOM
In the past six years my Administration has pursued a
foreign policy based on realism -about the world we live in,
about the nature of our adversaries, about the need for
American leadership. To close gaps that had opened in the
past, we were obliged to undertake a significant rebuilding of
our defense capabilities. As a result, our allies have greater
co~dence in America, and the Soviet Union is more willing to
work seriously for arms reduction.
Peace and progress, of course, depend on much more than
a sound military balance. That is wh3~, in the same spirit of
realism, we encourage democracy, freedom, and respect for
human rights by all nations. In this decade democracy has
been on the march. Country after country has joined those
nations where the people rule. We have supported those
freedom fighters who bravely make sacrifices so their nations
will enjoy freedom and independence.
The successful conduct of foreign policy rests upon a
strong bipartisan spirit in the Congress, and close cooperation
between the Legislative and Executive branches. I am pledged
to continue this long-held tradition, and hope the Congress will
see the importance of doing the same. Toward that end, in the
near future, I will send the Congress a full and comprehensive
report on American foreign policy.
East-West Relations
Last October, my Iceland meeting with General Secretary
Gorbachev brought great progress in the area of arms reduc-
tion. There is much work to do, and we continue to work in this
area. It is, however, only one of several items on our agenda
with the Soviets. No fundamental and lasting progress is
possible in one area of our relations without improvement
elsewhere.
My Administration is engaged in a broad range of bilater-
al and multilateral arms control negotiations. Our objectives
include: deep, equitable, and verifiable reductions of nuclear
arsenals; a cooperative transition by the United States and the
USSR to a strategic regime based increasingly upon defenses;
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ver~able limits on nuclear testing; a global ban on chemical
weapons; and conventional force reductions to redress imbal-
ances in Europe. In each of these negotiations, we are guided
by principles of equity, increased stability, effective verifica-
tion and strict compliance with both past and future agree-
ments. Ilook forward to meeting again with Mr. Gorbachev
to advance this important work.
Responsible Soviet conduct abroad is essential to a
peaceful international environment. I have urged Mr.
Gorbachev to withdraw all Soviet forces from Afghanistan
and to allow genuine Afghan self-determination, to cease
support for Cuban expeditionary forces in Africa, and to
promote a withdrawal of Vietnamese forces from Cambodia.
In the absence of such actions, the Soviet Union can hardly
expect to be treated as a respectable member of the
international community.
In the Soviet Union today there is much talk of change.
We must hope for a true break with the past, but we see both
hopeful and discouraging signs, especially in the critical area
of human rights. Certain better-known dissidents have been
released while others continue to receive very harsh treat-
ment; tragically, emigration remains at an historic low, and
religious persecution continues unabated. My Administra-
tion will welcome, and respond to, positive steps toward
greater respect for human rights, while expressing our views
on the enduring nature of the Soviet system.
Since I met General Secretary Gorbachev in Geneva,
exchanges between our two societies have gained momentum.
I hope for further expansion ofpeople-to-people contacts in
1987.
One of the most important obstacles to improved East-
Westrelations, which touches on all elements of our agenda,
is the continuing unnatural division of the European conti-
nent. Toward the states of Eastern Europe, our policy of
differentiation remains intact; in particular our trade rela-
tionswith them will continue to reflect the extent of internal
freedom and foreign-policy independence from Moscow.
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America in the World
The extraordinary surge of democracy that we have seen
in the past six years, particularly in the developing world,
benefits us politically, economically, and strategically.
Democratic transitions are nonetheless fragile; they require
constant nurturing and careful support. This Administration
will continue to work with and support those nations that share
our interests and values. By diplomatic and other means we
can help create the peaceful environment in which free
institutions flourish.
To help create such an environment, the Congress should
support adequate funding levels for economic and security
assistance. The year 1987 is the 40th anniversary of the
Marshall Plan, a reminder that American commitment and
generosity serve our own interests while changing the course of
history for the better. Our goal is to foster peace and stability
by helping friendly nations to defend themselves and by
encouraging market-oriented economic growth abroad. We
continue to work toward the elimination of hunger and
extreme poverty for both humanitarian and security reasons.
Thus, American interests are harmed if our programs in this
area are cut by the Congress below adequate levels, as they
have been.
The advance of democracy and the strengthening of peace
are closely related. Nowhere is this clearer than in our own
hemisphere. We must continue to provide support and
assistance to freedom fighters in Central America. To that end,
I will ask the Congress for renewed assistance for the
Nicaraguan democratic resistance, which faces a Leninist
dictatorship that has received over a billion dollars of Soviet-
bloc arms. I also strongly support a supplemental appropria-
tionfor the economic development of the Central American
democracies.
State-sponsored terrorism has increased dramatically in
the last few years. When such incidents go unpenalized,
further terrorist efforts are encouraged. We will continue to
build our capability to deter and, when necessary, to combat
swiftly and effectively state-sponsored terrorism worldwide. In
this regard, I am requesting necessary funding to continue
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the multi-year program to improve the protection and security
of our personnel and facilities overseas.
The people of the Philippines, whose history is closely
linked with ours, acted last year to reconfirm their democratic
traditions. We encouraged them, and applauded their success.
This year, my Administration will seek additional support to
assist the Aquino Government, as it confronts serious economic
and security problems. The rebuilding of political institutions
and restoration of investor confidence are Filipino goals that
America must support.
My Administration will continue to enforce the Compre-
hensive Anti-Apartheid Act of 1986. We seek an end to
Apartheid and will use our influence to foster a peaceful
transition to a truly free, democratic, and multi-racial society.
We will offer a special economic assistance program for
southern Africa. We will also seek to restructure economic
assistance to Africa so as to reinforce positive policy reforms in
a growing number of African nations. This approach, whose
goal is to promote investment and economic growth in Sub-
Saharan Africa, is reflected in the Administration's FY 1988
budget request.
The United States must be able to communicate informa-
tionand ideas on a worldwide basis. Ongoing expansion of
America's international broadcasting capability -the Voice of
America, Radio Free Europe/Radio Liberty, and Radio Marti -
must therefore continue. Increased resources for the United
States Information Agency are also needed to reach this goal.
In addition, the National Endowment for Democracy and its
subsidiary elements -including free labor, free enterprise,
and the political parties -permit the United States to help
strengthen the infrastructure of democracy, particularly in the
less developed countries. Funding for this program is very
small; the potential return on our investment, very high.
In the past, the ideals of the UN Charter have often been
trampled under foot. The United States remains committed to
restoring ef3iciency and impartiality to the United Nations and
effectiveness to its peacekeeping activities. We will use our
influence to restore respect in the UN for the principles on
which it was founded.
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My Administration will continue efforts to achieve the
fullest possible accounting of our servicemen missing from the
Vietnam War. Recent progress can continue with the strong
bipartisan support in the Congress for this humanitarian issue.
Also, my Administration is committed to aiding refugees and
those countries providing first asylux~i to them. International
organization support, multilateral and bilateral programs, and
resettlement opportunities in the international community are
all required to ensure humanitarian treatment of these
homeless and shattered peoples.
The Administration is proud of a~ path-breaking agree-
mentreached this past year with the Pacific island states over
the long-contentious tuna fishing issue, one that our adversa-
rieshave tried to exploit. Modest but indispensable funds are
needed to meet our obligations under the agreement.
Maintaining a StrongDefense
The increased resources we have devoted to national
defense in the past 6 years have brought many benefits -
above all, a lasting peace. Our forces have been modernized,
the quality and spirit of those in uniform have risen to the
highest levels, and we have begun work on new technologies
that can protect America in the future and free us from the
nuclear balance of terror.
All these efforts must continue. We need realistic and
sustained growth in defense funding to consolidate the real
gains we have made. The budget I have proposed meets this
goal. The alternative is unacceptable: spending less will
unavoidably mean less security. We cannot keep America
strong without committing the resources that this effort
requires.
In keeping with the recommendation of the Packard
Commission, and as required by the 1986 Defense Authori-
zation Act, I have submitted atwo-year national defense
Act, I have submitted atwo-year national defense budget for
1988-1989. The Packard Commission stressed no point more
than the need for greater stability in defense funding. Roller-
coaster, surge-and- starve budgeting leads to higher costs and
dangerous risks to national security.
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Furthermore, I want us to get our money's worth from every
defense dollar spent. Under the leadership of the Secretary of
Defense, with the expert help of the new Under Secretary of
Defense for Acquisition, this Administration will continue to
take important strides toward improving the acquisition
system. Other major changes in DOD organization and the
procurement system have been underway, some since the
beginning of this Administration. So, I hope the Congress will
withhold further efforts to legislate defense procurement
reform until the effect of these changes can be fully evaluated.
Our Strategic Modernization Program is essential to
assuring our national safety in the years ahead. The strength
it provides is also the indispensable foundation for negotiating
the deep cuts we seek in nuclear arsenals. The Soviets are
willing to bargain and make concessions only if they
understand that - in the absence of agreements -America
will provide for her own security.
Strategic Defense Initiative research explores the way to
move toward a world in which effective defenses, rather than
threats of retaliation, keep the peace. This vital program
reinforces our policy for arms reductions - as an incentive for
the Soviets to agree to real arms reductions and as an
insurance against cheating on arms reductions agreements.
The pace of research to date has been impressive, and I will ask
the Congress to increase funding so that we can continue
moving forward.
My Administration will continue to maintain an effective
nuclear deterrent, but at the same time it is essential that we
and our allies modernize and strengthen conventional land,
air, and naval forces so they can carry out their missions in the
face of a steadily increasing Soviet threat. That will cost more
money than the Congress has been willing to vote the last two
years, but it is essential.
America will continue to deploy military forces through-
out the free world as proof of solidarity with our Allies and
other friendly nations, and as a deterrent to those who might
threaten our peace and freedom. Forward deployments not
only underscore our national policies, but also provide valuable
exercises and training for Active, Guard, and Reserve
Component Forces.
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The Soviet Union has the world's only operational ASAT
system. The U.S. miniature homing vehicle ASAT system that
can deter the Soviets from using their system in times of crisis
is in development. Its test program, however, has been blocked
by a congressional unilateral ban that prohibits tests against
targets in space. The Soviets are under no such prohibition. I
will continue to urge the Congress to lift this moratorium as
soon as possible. I will strongly oppose its extension beyond
October 1,1987. Such unilateral restrictions on the U.S. leave
the Soviets with capabilities that endanger America's security.
Keeping America strong means rnore than acquiring
ships, tanks, and planes. Those who wear the uniforms of our
armed forces must receive appropriate recognition for the
sacr~ces and hardships that they are called upon to endure on
our behalf. My Administration will take the necessary steps to
continue to improve the quality of life for those in uniform. In
this way we can retain the high-quality trained people serving
now, all as volunteers, and provide sufficient incentives to
recruit the qual~ed people that we need in the future.
As we revitalize our naval forces, we face the need to build
home port facilities that can accommodate our growing fleet
and to protect our vital merchant ports in the least vulnerable
but affordable way. We must continue to implement and
expand our strategic home-porting program.
Last fall I sent to the Congress a classified report on the
threat to our security from the activities of hostile intelligence
services. The report set out a blueprint of legislative and
administrative measures to enhance our ability to meet this
threat. I hope the Congress will act on our recommendations.
We must maintain the viability of our technology base
and pursue new developments in conventional weapons
technology. The armaments cooperation initiative with our
Allies helps us to improve acquisition management, share
technological advances within the Alliance, and enhance
collective defense. The Soviet Union should regard the indus-
trial unity of the West as an unbeatable force. We must not
squander our gains through careless or felonious transfers of
technology to potential adversaries. M[y Administration will
continue our successful effort to curb the theft of strategic
technology by the Soviet bloc.
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V. CONCLUSION
This year of the 200th anniversary of our Constitution
affords us the opportunity to make momentous strides in our
quest for national excellence. It will require the efforts of all of
us -not just the government, but all the people. To achieve
this greatness really comes down to just being our best. No
government plan or program is capable of enacting such
sweeping change and reform. All the Federal spending in the
land cannot buy excellence. It must occur as part of the natural
instinct of free people to compete for the highest standard. The
proposals and actions outlined in this message will form the
foundation to meet the challenge of the third American
century.
I look forward to working with the Congress in a biparti-
san fashion in order to achieve this worthy goal. For when it
comes to the future of America, there must be no Republicans
or Democrats -only Americans.
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The White House
Washington
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