CONGRESSIONAL OVERRIDE PROVISION FOR LETHAL AID UNDER NICARAGUAN RESISTANCE AID REQUEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90G01353R001200070009-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 54
• Document Creation Date: December 27, 2016
• Document Release Date: August 16, 2012
• Sequence Number: 9
• Publication Date: January 26, 1988
• Content Type: MEMO

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THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
January , 1988
The President today submitted a request to the Congress pursuant
to Section 111 of the fiscal year 1988 continuing resolution
(P.L. 100-202) for $36.25 million of additional aid for the
Nicaraguan Democratic Resistance (NDR) to sustain the Resistance.
The request ensures that the Resistance can continue the pressure
on the Sandinista regime to comply with its obligations under the
Guatemala Accord of August 7, 1987 to bring democracy to
Nicaragua.
All funds under the request are derived by transfer from
existing defense appropriations. Ninety percent of the funds
requested provide non-lethal aid such as food, clothing,
medicines and the means to deliver it. Ten percent provide
ammunition and air defense against the Sandinistas' Soviet-made
Hind helicopter gunships.
The request prohibits the purchase of aircraft to transport aid
to the Resistance, but permits leasing aircraft. To ensure the
availability of leased aircraft, the request authorizes the
President to transfer not more than $20 million from defense
appropriations to indemnify the owners of leased aircraft in the
event of loss but which will otherwise not be spent. The request
also provides for electronic equipment, radar, and other passive
air defense equipment to protect the safety of transportation.
The request supports the Central American peace process by
providing a clear opportunity for the Sandinista regime to comply
with its obligation to establish democracy and to negotiate a
cease-fire directly with the Resistance. The request prohibits
delivery of all lethal aid after February 29, 1988, which is the
date on which current authority to deliver lethal aid expires.
Thereafter, delivery of lethal aid may begin only if, after March
31, 1988, the President certifies to the Congress that Nicaragua
has not met its obligations to implement democracy and negotiate
a cease-fire directly with the NDR.
The Congress will consider a joint resolution to approve the
President's request under expedited procedures that provide for
a vote in the House of Representatives on February 3 and a vote
in the Senate on February 4.
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THE WHITE HOUSE
WASH! NGTON
January 27, 1988
Dear Mr. Speaker:
I herewith transmit a request in accordance with Section 111 of
the joint resolution making further continuing appropriations fcr
the fiscal year 1988 (P.L. 100-202) for budget and other
authority to provide additional assistance for the Nicaraguan
Democratic Resistance. Such assistance is essential to advance
the prospects for democracy in Nicaragua and security for all of
Central America.
Despite the combined diplomatic efforts of the four Central
American democracies and the United States to persuade the
Sandinista regime in Nicaragua to move toward democracy and to
cease its actions that threaten the security of the region,
progress towards these goals is far from complete. Although
recently the Sandinistas have made some encouraging gestures, it
is too early to tell if they are merely designed for cosmetic
purposes.
The Sandinistas have repeatedly promised democracy to the people
of Nicaragua, first before the Organization of American States in
1979 and, most recently, two weeks ago in the Final Communique of
the Central American Presidents at the close of the San Jose
Summit. In contrast to these assurances, the Sandinistas' years
in power have brought repression and poverty to the Nicaraguan
people, not democracy.
It has become clear beyond doubt that, without the steady
pressure created by an effective Nicaraguan Democratic Resistance
supported by a determined United States, the Sandinistas' will
neither move tcward democracy nor desist from aggression against
their neighbors. The United States, in consultation with the
governments of the four Central American democracies, is prepared
to redouble its diplomatic efforts in support of peace and
democracy on the Central American isthmus. However, the success
of such efforts depends on the continuation of the pressure that
the democratic resistance provides.
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I urge approval of the additional aid I am requesting for the
Nicaraguan Democratic Resistance. The decision of the Congress
on this request is a matter affecting the future of Central
America and the security interests of the United States.
Sincerely,
The Honorable Jim Wright
Speaker of the House of Representatives
Washington, D.C. 20515
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THE WHITE HOUSE
WASHINGTON
January 26, 1988
MEMORANDUM FOR JACQUELINE TILLMAN
FROM: DAVID S. ADDINGTON
SUBJECT: Staff Final Draft of the Nicaraguan Resistance Aid Request
Attached for inclusion in your package to Colin Powell is the
staff final draft of the Nicaraguan resistance aid request. John
Negroponte's improvement on section 101(b) relating to the
specific policy objective has been incorporated.
To help distinguish this final version from previous versions, I
have separated the title into two lines.
I will distribute information copies of this staff final draft to
the departments and agencies, OMB, and White House Counsel's
Office. Please make the necessary NSC staff distribution.
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THE WHITE HOUSE
THE PRESIDENT'S 1988 LEGISLATIVE AND ADMINISTRATIVE
MESSAGE TO CONGRESS
FACT SHEET
Tonight the President reported to Congress on the State of the
Union. He also forwarded a Legislative and Administrative
Message outlining an ambitious agenda for 1988.
The President's Legislative and Administrative Message this year
is organized around the six purposes listed in the preamble to
the U.S. Constitution:
"We the people of the United States, in Order
to form a more perfect Union, establish Justice,
insure domestic Tranquility, provide for the
common defence, promote the general Welfare
and secure the Blessings of Liberty to ourselves
and our Posterity do ordain and establish this
Constitution for the United States of America."
A summary of the President's 1988 Legislative and Administrative
Message follows.
I. TO FORM A MORE PERFECT UNION, the President proposes:
A. A Balanced Budget Amendment.
B. Budget process reform, including: a joint budget
resolution; individual transmittal of appropriations
bills; strict observance of congressionally approved
function allocations; enhanced rescission authority;
biennial budgeting; and a "Truth in Federal Spending"
proposal requiring in part that any future legislation
creating new federal programs be deficit-neutral and
accompanied by financial impact statements.
C. A line-item veto.
D. A constitutional amendment requiring a super-majority
vote in Congress in order to increase the tax burden on
our citizens.
In addition, the President called upon Congress to renew its
dedication to the principle of federalism. In October 1987,
President Reagan signed Executive Order 12612, which
requires executive branch officials to review all proposed
policies and legislation for compliance with federalism
principles. In the 1988 Legislative and Administrative
Message, the President suggested Congress review its
legislative process to determine whether similar reforms are
warranted.
II. TO ESTABLISH JUSTICE, the President asks Congress to:
A. Act expeditiously to confirm Judge Anthony M. Kennedy
for the U.S. Supreme Court, and 27 additional judicial
nominees.
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B. Pass the Administration's Civil Rights Act of 1987
(H.R. 1881), which provides institution-wide coverage
under the appropriate civil rights statutes of
educational institutions receiving federal aid, while
avoiding an unwarranted expansion of federal
jurisdiction. The bill also ensures adequate
protection of religious tenets under Title IX and makes
clear that no institution must provide insurance
coverage for abortions or perform abortions in order to
receive federal aid.
The Administration will submit proposed legislation to
strengthen the Fair Housing Act of 1986 by increasing
the penalties for those convicted of housing discrimination
and extending the protections of the Act to handicapped
persons.
C. Enact the Child Protection and Obscenity Enforcement
Act of 1987, which would criminalize buying and selling
children for use in pornography; prohibit cable
obscenity and dial-a-porn; and strengthen federal laws
against organized crime traffic in obscenity.
D. Ensure Legal Service Corporation (LSC) grants are
awarded on a competitive basis and disallow LSC funding
of political think tanks or "support centers" that
focus on political involvement and have not provided
any day-to-day legal service to the poor.
III. TO ENSURE DOMESTIC TRANQUILITY, the President supports:
A. Restoration of the federal death penalty, according to
procedures established by the U.S. Sentencing Commission.
B. Passage of the Criminal Justice Reform Act, which, in
addition to providing a statutory basis for restoration
of the federal death penalty, includes important
reforms to curb the abuse of habeus corpus by convicted
criminals and allow evidence obtained by the police
through reasonable searches and seizures to be used at
trial.
B. Additional consideration of measures to address the
needs of crime victims.
C. Legislative proposals, currently under review in the
Department of Justice, to strengthen our hand against
terrorists. These include proposals for the
expeditious removal of aliens from the United States
who are engaged in terrorist activity and proposals
providing for criminal and civil forfeiture of
terrorists' assets.
D. Additional initiatives in the war against organized
crime, by vigorously using both criminal and civil
statutes; purging organized crime elements from labor
organizations; and targeting newer, "emerging"
organized crime groups.
E. Expansion of federal prison capacity.
G. A broad range of simultaneous activities aimed at
achieving a drug-free America, attacking the drug
problem on all fronts, including:
1. International cooperation to reduce both the
supply of and demand for illicit drugs;
2. Vigorous interdiction efforts to reduce the flow
of drugs coming Into the United States;
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3. Intelligence-gathering to support domestic law
enforcement efforts;
4. Stepped-up investigations to eliminate drug
trafficking organizations;
5. Targeted prosecutions of top drug organizations;
6. Prevention education activities to help young
people remain drug-free;
7. Reduction of illegal drug use by high-risk youths;
8. Improved community-based treatment for addicts; and
9. Mobilization of mainstream adults to maintain
"zero tolerance" toward illegal drugs at home, at
work and in the community.
The President looks forward to the final report of the
White House Conference for a Drug.Free America this
spring in order to work with the Congress to implement
its recommendations.
IV. TO PROVIDE FOR THE COMMON DEFENSE, the President calls for:
A. Senate advice and consent to ratification of the INF Treaty.
The President hopes to build upon the recently signed
INF Treaty and achieve an agreement for 50 percent
reductions in strategic arms.
The President will veto legislative efforts that
undermine national security and undercut American
negotiating positions.
B. Continued funding of the Strategic Modernization
Program as a guarantee of world freedom, while we
continue to seek clear-cut and effectively verifiable
strategic arms reductions.
We must continue the modernization of nuclear,
conventional, and chemical deterrence forces supporting
U.S. commitments to our allies. Additionally, we must
ensure that the conventional force disparities between
NATO and the Warsaw Pact are redressed.
The President will ask Congress to increase funding for
essential Strategic Defense Initiative (SDI) research
and development.
The President also asks Congress to support necessary
deployment of U.S. military forces throughout the Free
World; efforts to develop and exercise our ability to
respond to low-intensity conflict; revitalization of
special operations capability; and preservation of a
vital and effective intelligence capability.
Finally, the President urges Congress to shift fully to
a two-year defense authorization and appropriation cycle.
C. Support for democracy and freedom around the world,
including sustained U.S. support for the Nicaraguan
freedom fighters and the Afghan Resistance until true
democracy is attained in each nation.
The U.S. will continue its policy in the Persian Gulf
to promote stability in the region, maintain freedom of
navigation, and promote peace between Iran and Iraq.
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The President pledges to work with parties in the
Middle East to forge a settlement that both assures
Israeli security and recognizes the legitimate rights
of the Palestinians.
The Administration will seek security and economic
assistance funds adequate to support democracy abroad
and help friendly countries prosper.
The Administration is committed to obtaining the
fullest possible accounting of our men missing in
action in Southeast Asia.
D. Recq9nition of the economic dimension of freedom,
through expansion of the Caribbean Basin Initiative and
other initiatives.
V. TO PROMOTE THE GENERAL WELFARE, the President proposes:
A. Empowering individuals to control their own resources.
1. Tax increases should be opposed on the basis of
their burden on economic growth. These include,
but are not limited to, returning to higher
marginal rates for individuals or corporations;
repealing indexing; creating a value-added tax or
increasing excise taxes; increasing taxes on
capital or energy sources; and levying new taxes
on securities transfers or corporate takeovers.
The President supports:
2. Reduction of the capital gains tax rate as part of
any future tax reform;
3. Reliance upon user fees to raise revenues;
4. Restraint in federal spending; and
5. Government management improvements.
The President announced that before the year is over
the Social Security Administration will begin providing
upon request reports similar to those frequently
provided to employees who receive private sector
benefits. The social security report will contain a
clear and detailed statement that outlines a
participant's credited earnings and social security
taxes each year; indicates his current eligibility
status; and sets forth an estimate in current dollars
of the current and future benefits available to him.
B. Freeing the individual from government dependency.
Specifically, the 1988 Legislative and Administrative
Message calls for:
1. Reform of the welfare system. Last August, the
President endorsed legislation (H.R. 3200/S. 1655)
that represents a constructive and fiscally
responsible approach to reducing welfare
dependency. This legislation would:
- -
AIM =ND
- -
Help more people become self-sufficient
through mandatory participation requirements
and a flexible work training program;
Strengthen our ability to require absent
parents to support their children; and
Grant states the broad waiver authority they
need to implement their own ideas and make
the welfare system more responsible to the
needs of each particular state.
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2. Removal of barriers to home ownership and other
proposals to make housing even more affordable.
3. Furtherance of policies that recognize the
importance of a stable family life.
3. Enterprise Zones with federal incentives.
4. Excellence in education. At the elementary and
secondary school level, the President calls for
"back to basics" reforms, stressing the need for
improved core curriculum and stronger graduation
requirements. The Administration will continue
to encourage efforts to advance parental choice
through expansion of the magnet schools program,
as well as in the compensatory education programs
financed through Chapter 1 of the Education
Consolidation and Improvement Act. The President
will ask the Department of Education to develop
model voucher legislation and make it available to
the states. He is also establishing a working
group in the Domestic Policy Council that will
examine the parental role in education and make
recommendations for strengthening parents' rights.
The President urges our Nation's universities to
reduce the cost of higher education. To expand
access to higher education, he proposes an increase
in the maximum Pell Grant to $2300 .and creation of
College Saving Bonds for lower- and middle-income
families. To ensure that tomorrow's students do
not lose out because federal guarantees are abused,
the Department of Education will propose a rule
holding schools and colleges accountable for
excessive rates of default on Guaranteed Student
Loans.
5. Steps to protect the health of citizens, including
the President's proposal for federal coverage of
catastrophic health care costs incurred by
Medicare beneficiaries.
The President calls for preventive measures
against AIDS while at the same time treating AIDS
victims with compassion and care. He is proposing
$1.5 billion in FY 1989 for AIDS research, treat-
ment, testing, counseling and education, up
ten-fold since 1985. The President has directed
the Public Health Service to undertake a compre-
hensive program to determine the extent of HIV
infection and AIDS. He is also directing the Food
and Drug Administration to accelerate its review
of new therapeutics, vaccines, blood-screening
tests, and other products to fight this disease.
C. Freeing individuals to pursue productive endeavors
through deregulation of key industries and other
reforms.
The Administration will continue to work with Congress
to develop responsible trade legislation, but the
President will veto a protectionist bill.
To enhance U.S. competitiveness, the President
supports: enactment of a permanent tax credit for firms
engaging in research and experimentation, to replace
the tax credit that expires at the end of 1988;
construction of a super-conducting super collider;
improved protection of intellectual property rights;
and other reforms.
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D. Opening up new areas for human endeavors, specifically
through:
1. Privatization of additional government activities;
and
New opportunities in space, including a
permanently manned space station and a major
Commercial Space Initiative to nurture
entrepreneurs in space.
E. Encouraging political participation and responsibility
through a range of reforms.
VI. TO SECURE THE BLESSINGS OF LIBERTY, the President proposes:
A. Protection of the unborn. The President urges Congress
to pass expeditiously the Human Life Bill and Human
Life Amendment. In addition, the President plans to
encourage adoption -- building upon recent steps the
Administration has taken to foster adoption.
B. Protection of reliegious liberIy. The President
supports a voluntary school prayer amendment. He
decries the exclusion of religiously-affiliated
organizations from federally funded programs.
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THE WHITE HOUSE
FEDERAL BUDGET REFORM
FACT SHEET
"What ails us can be simply put:- The federal
government is too big and it spends too much money."
,MM, MN MO
President Reagan
State of the Union Address
January 25, 1988
In his seventh State of the Union Address, President Reagan
praised the recent budget compromise designed to reduce the
budget deficit by $76 billion over the next two years. He
promised "swift and certain use" of his veto power to control
spending in the year ahead. In addition, the President called
for changes in the federal budget process. He proposed:
- -
Strict adherence to the October 1 deadline for
enacting 13 separate appropriations bills;
A Balanced Budget Amendment;
A line-item veto; and
A joint resolution on the budget as the first step in
the budget process.
Other budget process reforms are described in the 1988 Legislative
and Administrative Message.
Budget Process Needs Urgent Attention
The budget process, the President said, "has broken down" and
"needs a drastic overhaul."
One purpose of the 1974 Budget Act was to eliminate the need for
continuing resolutions. Congress even delayed the start of the
fiscal year to facilitate that objective. But the performance of
Congress has steadily worsened since 1974 -- from enacting all 13
separate, regular appropriations bills in the first few years,
albeit late, to enacting no separate appropriations bills for
fiscal years 1987 and 1988.
Fiscal
Year
Enacted by
start of
fiscal year
Enacted
after
start
Total
1974
0
13
13
1975
0
13
13
1976
0
13
13
1977
13
0
13
1978
9
3
12
1979
5
7
12
1980
3
7
10
1981
1
7
8
1982
0
9
9
1983
1
5
6
1984
4
6
10
1985
4
1
5
1986
0
6
6
1987
0
0
0
1988
0
0
0
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Instead of enacting separate appropriations bills for the past
two fiscal years, Congress sent to the President catch-all
spending bills totaling $576 billion in FY 1987 and $606 billion
in FY 1988.
Separate appropriations bills are preferable to mammoth continuing
resolutions. Congress cannot exercise sound judgment on government
priorities when considering catch-all spending bills. The final
FY 1988 continuing resolution was 1,057 pages long; the accompanying
reconciliation bill was 1,186 pages long; and Congress had only
three hours to consider each bill.
Moreover, the President is forced to sign a continuing
resolution or shut down the federal government -- a dilemma the
Founding Fathers could not possibly have foreseen.
In recent years, continuing resolutions have been viewed in
Congress as an opportunity to fund wasteful spending projects
that would not have survived the congressional budget process if
considered individually on their merits.
The President will send to Congress in 30 days, as rescissions, a
list of items in the FY 1988 continuing resolution he would have
vetoed, were line-item veto powers available to him.
Line-Item Veto
President Reagan asked Congress for the line-item veto, so that
he and his successors could "reach into massive appropriation
bills, pare away the waste and enforce budget discipline."
Forty-three governors have line-item veto power. As Governor of
the State of California (1967-1974), Ronald Reagan used the
line-item veto 943 times. The Democrat-controlled State
legislature upheld each Reagan veto.
Balanced Budget Amendment
The President called for a constitutional amendment that
"mandates a balanced budget and forces the federal government to
live within its means."
A constitutional amendment to balance the federal budget --
including a provision requiring a supermajority vote in Congress
to increase taxes -- would provide needed discipline to the
congressional budget process.
Ninety-nine percent of Americans live in states that require a
balanced state budget.
A total of 32 states have passed resolutions calling for a
constitutional convention for the purpose of proposing a Balanced
Budget Amendment:
Alabama
Idaho
Nebraska
Rhode Island
Alaska
Iowa
New Hampshire
South Carolina
Arizona
Indiana
New Mexico
South Dakota
Arkansas
Kansas
Nevada
Tennessee
Colorado
Louisiana
North Carolina
Texas
Delaware
Maryland
North Dakota
Utah
Florida
Mississippi
Oklahoma
Virginia
Georgia
Missouri
Pennsylvania
Wyoming
Under Article V, two-thirds of the states may
call a convention
for proposing amendments to the Constitution.
Proponents of a
Balanced Budget Amendment are two states away from a
constitutional convention.
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Joint Resolution on the Budget
Under the current system, the congressional budget resolution is
not a law and does not require the President's approval.
The President believes the budget process should begin with a
joint resolution, subject to the President's signature. By
requiring the President to approve the budget, debates on
priorities will be settled up front, once and for all, prior to
the formulation of appropriations.
RECENT PROGRESS
In his State of the Union Address, the President praised the
bipartisan budget compromise reached last November and called
upon Congress to adhere to it and avoid "slipping into the errors
of the past -- more broken promises -- and more unchecked
spending."
Budget Deficit, Federal Spending Decline
o The federal deficit declined $73 billion from FY 1986 to
FY 1987:
FY 1986
FY 1987
Federal Budget Deficit
$220.7 billion
148.0 billion
o For the first time in 14 years, the federal government spent
less, in real terms, last year (FY 1987) than the year
before.
Bipartisan Budget Compromise
o On-November 20, 1987, President Reagan accepted a bipartisan
two-year deficit reduction plan. The agreement between the
President and the joint leadership of Congress represents
$76 billion in firm deficit reductions over the next two years.
In FY 1988, the current fiscal year, the agreement
reduces the projected deficit by more than $30 billion.
In FY 1989, the agreement reduces the projected deficit
by $46 billion.
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Li nri.L.Lu Laywo
Office of the Press Secretary
EMBARGOED FOR WIRE TRANSMISSION
UNTIL 7:00 P.M. EST
FOR RELEASE AT 9:00 P.M. EST
MONDAY, JANUARY 25, 1988
TO THE CONGRESS OF THE UNITED STATES:
1988 LEGISLATIVE AND ADMINISTRATIVE MESSAGE
A UNION OF INDIVIDUALS
INTRODUCTION
In one sentence of 52 words, the Framers of our
Constitution announced the proper ends of government in a
free society:
"We the People of the United States, in Order to form a
more perfect Union, establish Justice, insure domestic
Tranquility, provide for the common defence, promote the
general Welfare, and secure the Blessings of Liberty to
ourselves and our Posterity, do ordain and establish this
Constitution for the United States of America."
The six purposes listed in the Preamble for establishing
the Constitution serve as a lasting measure of the legitimate
role of government. An American President has no more sacred
duty than to ensure that the government stays within the
constitutional limits that protect individual liberty. In
assessing this Administration's policies and proposals now and
for the future, the fundamental blueprint remains the Preamble
of the Constitution.
In the past 7 years, our Administration has worked
to restore a vision of government that was the Founders'
own -- a vision of a free and self-reliant people, taking
responsibility for its own welfare and progress through such
time-tested means as individual initiative, neighborhood and
community cooperation, and local and State self-government.
The return of responsibility and authority to the individual
American is now leading to a virtual renaissance in America
of liberty, productivity, prosperity, and self-esteem.
Our foreign and defense policies are geared to protect
American freedom against external threats, to guarantee that
our liberties are secure from the aggressions of those whose
values are not founded in human freedom. Protection of
liberty today means not just a strong America, but also a
common defense with our allies of the free world. It gives me
pride to report that our mutual efforts are being rewarded
with a new growth of democracy and a renewed respect around
the world for this country and what it stands for. At home
our challenge remains to achieve full participation in the
longest peacetime economic expansion on record -- in the
almost unlimited prosperity which flows from genuine human
freedom.
This statement of Administration policy is organized
according to the six basic tenets for which the American
people first ordained and established the Constitution:
more
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I.
To Form a more Perfect Union
Page
2
I/.
To Establish Justice
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5
III.
To Ensure Domestic Tranquillity
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8
IV.
To Provide for the Common Defense
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12
V.
To Promote the General Welfare
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17
VI.
To Secure the Blessings of Liberty
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37
I. TO FORM. A MORE PERFECT UNION
In setting aside the Articles of Confederation for a new
Constitution, the Framers acknowledged that the governmental
deficiencies of the new Nation were of their own making. They
understood that if the American republic were to endure and
prosper, its organizing principles would have to be revised.
The constitutional system the Framers produced has been the
wonder of the free world, but after 200 years some aspects of
that system are in need of repair and reform. Accordingly, I
propose the following measures to "form a more perfect Union."
A. Balanced Budget Amendment
Before the Great Depression, the idea that the Federal
government should balance its budget on a yearly basis was
treated as though it were part of the Constitution. The
economic crisis, and later World War II, forced the abandon-
ment of this policy. But what may have been necessary in
those national emergencies is now a permanent feature of the
Federal government.
There is no question that continued Federal budget
deficits, fueled by higher spending, are bad for the economy.
Unfortunately, our political system makes it extremely
difficult to reduce the deficit. The public interest in
spending restraint is a generalized one, diffused among the
entire citizenry. The special interests favoring spending on
any particular program are smaller, but they fight much harder
to maintain or increase spending.
Certainly, there are constructive proposals that would
help control spending. Since 1981, our budgets have sought
billions of dollars in reductions of outdated and outmoded
programs. Members of the Congress and private think tanks
have also identified wasteful spending. But the political
process's inability to overcome inertia, along with the
persistence of special interests, has led many Americans to
despair of achieving budgetary balance without constitutional
reform. That is why 32 States have applied to the Congress to
call a constitutional convention for the purpose of proposing
a constitutional amendment to require a balanced budget --
only two States short of the number required by Article V of
the Constitution.
In previous years, the Senate has approved such a
balanced budget amendment that would obviate such a
convention, but the House has failed to support it. This is
clearly the option I prefer to achieve the constitutionally
mandated balanced budget desired by the overwhelming majority
of the American people.
It is imperative that the Congress consider such an
amendment as a major priority for 1988, and I will be a
willing partner in that enterprise.
B. Budget Process Reform
It is widely acknowledged, by the Congress, the press,
and the American people, that the current budget process is
not working. The Budget Act of 1974 was purported to
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streamline and rationalize the budget considerations by the
Congress. The new process was to "force" the various
committees to consider their recommendations in the context of
the entire budget and ensure that proper attention was paid to
the bottom line -- the deficit.
In both substance and form, the process has failed.
Deadlines are routinely missed or ignored. Enforcement
mechanisms are rarely employed. Debates over the same issue
occur three and four times a year. And from the size of the
deficit, the process has obviously failed to provide fiscal
discipline.
Over the last 7 years, total revenues paid to the Federal
government have increased by over $250 billion. But total
expenditures have increased by some $325 billion. Part of the
increased spending, $125 billion, or half of the increase in
revenues, was devoted to rebuilding our national defenses.
But last year, the government spent $140 billion more on
domestic programs than in 1981 and $70 billion more on
interest payments due to the deficit. And for every dollar
the Congress has cut from my defense request, they have added
$2 to domestic spending.
Nowhere is the failure of the budget process more evident
than in the annual process of developing the appropriations
bills that establish discretionary spending levels making up
just under one-half the total budget. The regular process
requires that 13 separate appropriations bills be sent to the
President well in advance of the October 1 beginning of a new
fiscal year. But the norm has been anything but normal --
during the last 7 years, the Congress sent only 10 of the 91
required bills on time. In the last 2 years, not one bill has
been on time and all 13 have been collapsed into one massive
piece of legislation.
These increasingly large spending bills, passed at the
last moment before existing funding expires, deny the Congress
and the Executive the ability to adequately examine their
contents. The Congress cannot truly vote on their merits and
the President has little ability to employ a veto.
While Gramm-Rudman-Hollings has helped restore some
fiscal discipline, it simply adds another layer to an already
broken process. The threat of across-the-board cuts is only
partially effective as major portions of the budget are
exempt. And G-R-H does not produce what a truly effective
budget process should; namely, a thorough consideration of
spending priorities within the constraints of available
revenues. To assist the next administration in attaining the
deficit targets contained in the Gramm-Rudman-Hollings law and
achieve a balanced budget within the next few years, the
following changes in the budget process are proposed:
o Joint Budget Resolution. The budget process has so
degenerated in recent years that the Presidential budget is
routinely discarded and the congressional one regularly goes
unenforced. The product of this breakdown is a concurrent
resolution, requiring neither consultation with the
Administration nor the signature of the President. As a
remedy, I propose that henceforth the Congress and the
Executive collaborate on a joint resolution that sets out
spending priorities within the revenues available. The
requirement of a Presidential signature would force both
branches of government to resolve most policy issues before
formulating appropriations measures. The budget process could
be further improved by including in the budget law allocations
by committee as well as by budget function.
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o Individual Transmittal of Appropriations Bills. The
current practice of transmitting full-year omnibus continuing
resolutions oversteps appropriation committee/subcommittee
jurisdictions. More important, it does not permit the
Legislative and Executive branches to exercise proper scrutiny
of Federal spending. Therefore, I propose a requirement that
appropriations bills be transmitted individually to the
President.
o Strict Observance of Allocations. During the 1980s, an
unacceptable budget practice evolved of disregarding congres-
sionally approved function allocations. Funds regularly were
shifted from defense or international affairs to domestic
spending. I strongly urge that each fiscal year separate
defense and non-defense allocations be made and enforced
through a point-of-order provision in the budget act.
o Enhanced Rescission Authority. Under current law, the
President may propose rescissions of budget authority, but
both houses of Congress must act "favorably" for the
rescission to take effect. The Supreme Court in the Chadha
decision (1983) effectively moots even this limited authority.
I propose a change of law that would cure the legislative veto
defect and require the Congress to vote "up or down" on any
Presidentially proposed rescission, thereby preventing the
Congress from simply ignoring the rescission or avoiding a
recorded vote.
o Adopt Biennial Budgeting. The current budget process
consumes too much time and energy. A 2-year budget cycle
offers several advantages -- among them, a reduction in
repetitive annual budget tasks, more time for congressional
oversight and consideration of key spending decisions in
reconciliation, and fewer gimmicks, such as shifting spending
from one year to the next. I am calling on the Congress to
adopt biennial budgeting, beginning with a trial 2-year
Defense budget.
o Truth in Federal Spending Legislation. As part of my
Economic Bill of Rights proposal, I outlined legislation
that provides for "Truth in Federal Spending." Soon I will
transmit legislation that will require any future legislation
creating new Federal programs to be deficit-neutral; this will
be done by requiring the concurrent enactment of equal amounts
of program reductions or revenue increases. Additionally, my
proposed legislation would require that all future legislation
and implementing regulations be accompanied by financial
impact statements detailing the measure's likely economic
impact, including the effect on State and local governments.
Enactment of this proposal would be an important step toward
reassuring the American people that the Congress is serious
about controlling government spending.
C. Line Item Veto
A President should have the same tools to control
spending that 43 governors have. I will forward my proposal
for a line item veto. It would allow future Presidents to
remove from spending bills those items that are extraneous
without threatening the continuation of vital government
programs. The Congress could override each veto by a
two-thirds vote in each House. The budget crisis, however,
also demands immediate action. For example, last month the
Congress presented me with a catchall spending bill with many
extraneous and costly provisions, some of which had been
considered for the first time in conference. I am asking the
Congress immediately to accept the responsibility for making
its own processes work, rather than giving up and resorting to
a continuing resolution.
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D. Super-majority Tax Amendment
Our Founding Fathers knew that without economic
freedom there can be no political freedom. Even before our
Nation was full-born, nine colonies assembled in a "Stamp Act
Congress" and worked their will to oppose taxation without
representation. Today, we must once again resolve to put an
end to irresponsible taxation and spending. We have fallen
into a costly and dangerous habit, which could threaten our
future prosperity, burden future generations, and reduce the
incentive of individuals and businesses to create more goods
and services.
It is clear that we need a mechanism to control
expenditures of Americans' hard-earned money. To this end,
I will send to the Congress a proposed constitutional
amendment to require a super-majority vote in the Congress in
order to increase the tax burden on our citizens. I urge the
Congress to act expeditiously in approving this amendment and
to send it to the States for ratification.
E. Federalism Returning Power to the People
At the time of my first State of the Union address, it
was apparent that the limited national government envisioned
by the Framers had been replaced by a national government
whose involvement in domestic affairs was limited only by its
own will. The Founders understood that unchecked central
authority threatens individual liberties. Accordingly, they
constituted a Federal system of government, with all powers
not specifically granted by the Constitution to the national
government reserved to the States and to the people.
We have sought to revitalize the principle of
federalism by reforming the institutional processes of the
national government. This past October, I signed Executive
Order 12612, which requires Executive officials to ensure that
all proposed policies and legislation comply with federalism
principles and to conduct a formal federalism assessment as
appropriate, and which restricts Federal preemption of State
laws. The Congress should review its legislative procedures
to determine whether reforms similar to those in Executive
Order 12612 are warranted.
The National Governors Association and the Advisory
Commission on Intergovernmental Relations, as well as
State and local officials, have been examining possible
amendments to the Constitution that would restore the
structural balance of power between the national government
and the States. If we in Washington are unsuccessful in
reviving the constitutionally crucial principle of federalism,
it may become necessary to consider such proposals.
II. TO ESTABLISH JUSTICE
For 200 years our Republic has enjoyed a constitutional
system that is the envy of the world. By its own terms and by
the will of the American people, the Constitution is the
supreme law of the land. Yet in recent years, some have
advocated and at times have succeeded in promoting a laxity in
the observance of the terms of its text. Fortunately, I can
count as one of the most satisfying legacies of my presidency
the work my Administration has done to restore the foundations
of American government through an insistence on the faithful
interpretation and observance of the Constitution.
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A. Judicial Appointments
In the elections of 1980 and 1984, I promised the
American people that I would nominate judges and justices to
the Supreme Court who would be faithful to the Constitution.
I have kept that promise.
Our written Constitution, adopted and ratified by the
people 200 years ago and amended several times since, is our
fundamental law. Every government official takes an oath to
abide by its provisions. For members of the Congress, this
should mean enacting laws only in pursuance of the powers set
forth in the Constitution. As President, this means taking
care that the laws are faithfully executed. To the courts
falls the task of adjudicating cases or controversies
according to the Constitution and the laws made under it. In
so doing, judges must faithfully interpret the text of the
Constitution, as well as laws passed by the Congress, as
written, in accordance with their original meaning. To do
otherwise would constitute a usurpation of legislative power
never intended by the American people. With this in mind, I
have been careful to nominate only judges faithful to this
principle. I urge the Senate to be guided by the same
standards in exercising its constitutional duty in the
confirmation process.
Part of faithfully interpreting the law is seeing to it
that those convicted of crimes are dealt with fairly but
firmly. In this respect, I am particularly proud of my
judicial appointments. Federal court records indicate that
between 1981, when I first took office, and 1984, the average
sentence handed down by a Federal court per conviction
increased dramatically -- by over 100 percent for rape, over
100 percent for burglary, and over 60 percent for murder. I
will continue to nominate judges who are tough on crime. When
the Senate adjourned last year, 27 judicial nominations were
left pending -- an unprecedented number -- and other vacancies
are yet to be filled as well. The Chief Justice of the
United States has stated that the high number of vacancies is
contributing to an enormous backlog for the Federal courts.
The Senate must act expeditiously to confirm these judges.
B. Civil Rights
Among the greatest imperatives in establishing justice is
the elimination of discrimination based on race, sex, and
other immutable characteristics. Discrimination based on
religion is equally invidious. This Administration has held
high the banner of equal opportunity for all Americans, and we
will not retreat from the fight against discrimination
wherever it exists.
Our achievements have been significant. We have
successfully prosecuted racial hate groups and have achieved
more convictions for criminal civil rights violations than any
previous administration. We have moved aggressively to
enforce our Nation's voting rights laws, thereby securing for
thousands of citizens the most fundamental of all rights --
the right to help shape their future with a ballot.
In desegregating our Nation's public schools, we have
placed the emphasis where it should be -- on enhancing
educational quality for all children.
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? I am particularly proud of our successes in moving
America closer to the constitutional ideal of a color-blind
society open to all without regard to race. In the workplace,
we have rejected the use of quotas and have insisted on
fair treatment in hiring and promotion decisions. And after
3 years of effort by this Administration, the Fair Housing
Initiatives Program has finally been authorized. The
Federal government will now be able to provide direct
assistance to State and local governments, as well as public
and private organizations, investigating complaints of housing
discrimination. The 20th anniversary of the Fair Housing Act
of 1968 is an appropriate time to strengthen the statute by
increasing the penalties for those convicted of housing
discrimination and by extending the protections of the Act to
handicapped persons. This Administration will submit appro-
priate legislation to achieve this purpose. Every American is
entitled to freedom from discrimination -- to be judged on the
basis of qualification and performance, not on stereotypes and
unfair assumptions.
Currently pending in the Senate, however, is a bill whose
vague and sweeping language threatens to subject nearly every
facet of American life -- from the corner grocery to the local
church or synagogue to local and State government -- to
intrusive regulation by Federal agencies and courts.
Ironically it does so in the name of civil rights. This
Administration opposes this overreaching legislation known as
the Civil Rights Restoration Act of 1987 (S. 557). In its
stead, I have proposed a bill that provides institution-wide
coverage under the appropriate civil rights statutes of
educational institutions receiving Federal aid while avoiding
an unwarranted expansion of Federal jurisdiction. My
proposal, the Civil Rights Act Amendments of 1987 (H.R. 1881),
also ensures adequate protection of religious tenets under
Title IX and makes clear that no institution must provide
insurance coverage for abortions or perform abortions as a
condition of the receipt of Federal aid.
C. Protection of Victims of Obscenity and Child
Pornography
In establishing justice we must be ever mindful that our
cherished constitutional freedoms cannot be distorted to
protect activities that exploit the innocent and defenseless.
The production and distribution of obscene materials, as well
as child pornography, are such activities. Our Administration
has made the elimination of these materials a top domestic
priority.
The Attorney General's Commission on Pornography report
has resulted in several new law enforcement efforts, foremost
among these being the establishment of a special enforcement
unit within the Department of Justice. In a single operation
in 1987 more purveyors of child pornography were federally
indicted than at any time in history, and the first Federal
obscenity racketeering convictions were recently returned in
Virginia. However, much more can be done to protect our
children and families if the Congress enacts my proposed
Child Protection and Obscenity Enforcement Act of 1987. It
would criminalize buying and selling children for use in
pornography, and it would also prohibit dial-a-porn and cable
obscenity. It would strengthen our laws against organized
crime traffic in hard-core obscenity.
D. Legal Services for the Needy
Provision of needed legal services for those who
cannot afford them is an important goal of our society.
Unfortunately, the current system administered by the Legal
Services Corporation (LSC) is not working. Each year the
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Congress has mandated that a large portion of these funds be
allotted to a group of "National and State Support Centers."
Since 1975 these law reform think tanks have been criticized
for political involvement and have not provided any day-to-day
service to the poor -- the original intent of the LSC.
Instead, they have concentrated on social "law reform,"
without regard to a particular client's needs. I call on the
Congress to disallow LSC funds for political think tanks or
"support centers" and through strong and specific legal
language to limit any political lobbying by LSC grantees. All
LSC funds should be used to assist directly the poor in need
of legal help.
There is another way in which the needy are being badly
served by LSC. A congressionally mandated policy of "Annual
Presumptive Funding" precludes the possibility of awarding LSC
grants on a competitive basis. LSC must be able to demand
results from grantees or give other prospective grantees
opportunity better to serve the poor. While stability is
desirable, we must be able to weed out inefficient or
incapable grantees.
III. TO ENSURE DOMESTIC TRANQUILLITY
The leading threat to domestic tranquillity comes in the
form of criminal offenses of citizen against citizen. When I
took office crime rates were soaring. The public, with good
reason, felt unsafe in our streets and often even in homes and
places of work. Determined to give America back to its
law-abiding citizens, our country is in the midst of the most
vigorous crime-fighting effort in its history. Passage of the
Comprehensive Crime Control Act of 1984, appointment to the
bench of Federal judges who are tough on crime, and an
unprecedented attack on organized crime are efforts that have
paid off. In spite of our successes, however, much remains to
be done.
A. Restoration of the Federal Death Penalty
Federal statutes currently provide for capital punishment
for the offenses of espionage, treason, murder, and certain
other felonies such as air piracy. Except in the case of the
air piracy statute, enacted in 1973, these death penalty
provisions are not accompanied by appropriate procedures
required since the Supreme Court's 1972 decision in Furman v.
Georgia to prevent disparate application. In this respect,
the Congress has lagged well behind the State legislatures,
more than 40 of which have acted to adopt appropriate death
penalty procedures since the Furman decision.
Fortunately a solution is at hand. The Comprehensive
Crime Control Act of 1984 created the United States Sentencing
Commission to promulgate sentencing guidelines to insure
consistent, tough, and equitable sentencing. The Commission
should go forward now to set in place procedures to permit the
constitutional imposition of capital sentences for the most
serious Federal offenses.
B. Criminal Justice Reform Act
To protect further society from criminals, the Congress
should act promptly on the Criminal Justice Reform Act, which
I transmitted last year. By statute it would establish
uniform procedures that would allow death penalty provisions
in current Federal statutes to be enforced according to recent
Supreme Court decisions. It also contains important reforms
to curb the abuse of habeas corpus by convicted criminals and
to promote truth in the courtroom by ensuring that evidence
obtained by the police through reasonable searches and
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seizures can be used at trial. These important protections
for the public will complete the anti-crime effort we began
with the Comprehensive Crime Control Act of 1984. They were
approved by the Senate in 1984 and in part by the House of
Representatives in 1986. The time has come -- this year -- to
enact them into law.
C. Victims of Crime
In 1982 my Task Force on Victims of Crime pointed out
that all too often crime victims suffer doubly -- they are
first victimized by criminals and then by an inadequate
justice system. My Administration has put into effect a
number of the Task Force recommendations. The most important
of these has been the development of model legislation
mandating the protection and fair treatment of crime victims,
which by 1986 had become the basis for legislative action in
nearly two-thirds of the States. I am directing the Attorney
General to press forward on the remaining Task Force
recommendations.
D. The Fight Against Terrorism
Innocent Americans and freedom-loving people across the
world have become the victims of terrorists. But this Nation
will not be held captive to the will and whim of terrorists.
This Administration is considering a series of
legislative proposals designed to strengthen our hand against
terrorists. These include proposals for the expeditious
removal of aliens from the United States who are engaged in
terrorist activity and proposals providing for criminal and
civil forfeiture of terrorists' assets.
State-sponsored terrorism, fomented by governments
whose conduct and support for such acts put them outside
the community of nations, remains a scourge on the inter-
national scene and a particular threat to our citizens and
interests. We must further develop the rule of law against
these criminals by denying terrorists the legitimacy of
international instruments condoning their activities. The
Senate should give its advice and consent to ratification,
with certain reservations, of Additional Protocol II to the
1949 Geneva Conventions, which would serve to promote basic
human rights. The Administration has rejected Additional
Protocol I, which would give combatant status to terrorist
organizations, and I welcome congressional support of this
decision.
E. Organized Crime
For over a half-century this Nation has been plagued
by organized crime. Due to vigorous efforts by Federal
investigators and prosecutors, some of the most infamous
leaders of organized crime are now facing long jail terms.
This progress has come through a new strategy aimed at
penetrating crime syndicates and targeting their leadership
for prosecution. Strike forces have focused on several major
cities such as Cleveland, Kansas City, and Boston. One of
our most recent successes was in March of 1987 when a jury in
New York returned 18 guilty verdicts in the "Pizza Connection"
case involving $50 million in laundered proceeds from heroin
sales by an organized crime group. In addition, our
Administration's Comprehensive Crime Control Act of 1984 has
enabled police to detain pending trial certain organized
crime figures who previously could have made bail and has
dramatically expanded our ability to seize and forfeit the
assets of mob members.
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Yet, mob-run crime is still a grave problem.
Obscenity, extortion, drug importation and sales, loan
sharking, illegal gambling, and murder are all crimes that
we intend to hit hard during the remainder of this
Administration. Our goal is to put "the mob" out of business
through vigorous use of both criminal and civil statutes, by
purging organized crime elements from labor organizations, and
by targeting the newer, "emerging" organized crime groups to
ensure that they never wield the mob's power and influence.
F. Prison Capacity Expansion
One result of our increased efforts to fight crime is
that the number of criminals serving time in Federal prisons
has increased dramatically -- nearly 80 percent since 1981.
We anticipate that the Federal inmate population will continue
to increase in the future, particularly in light of the
enhanced criminal penalties contained in the Anti-Drug Abuse
Act of 1986 and the new sentencing guidelines. One of my top
priorities for the next year will be to increase substantially
the construction of new prison space to accommodate the
increased number of criminals being removed from our streets.
G. Drug Free America
In the past 7 years, the Nation has made tremendous gains
towards a drug free America. Today, public attitudes are
clearly against the use of illegal drugs, and drug awareness
is increasing. The national prevention effort has taken off
with its own strong momentum. Individuals and communities,
businesses and schools are taking a firm stand against the use
of illegal drugs. Most important, the number of drug users is
down; and our children are showing us that they are willing
and able to say "no" to drugs.
We are on our way to a drug free future. Still, illegal
drugs continue to destroy the lives and the hopes of hundreds
of thousands of Americans each year, especially young people
whose future lies before them. Since the beginning of my
Administration, I have committed the Federal government to
provide national leadership and support to the national
crusade, encouraging and assisting private sector efforts and
aggressively pursuing Federal responsibilities to stop the
supply and use of illegal drugs. The National Drug Policy
Board, which I established by Executive order on March ?26,
1987, has ensured that our Federal agencies work together
effectively and efficiently. The Board has named lead
agencies for all facets of the anti-drug program to improve
coordination throughout the government and enable us to
achieve maximum impact with our resources. To this end, the
Board has developed a series of nine interrelated strategies.
Five strategies are aimed at reducing the supply of
illegal drugs: enhanced international cooperation; stepped-up
interdiction of drugs coming into the country; improved
intelligence on drug activities; stepped-up investigations to
eliminate drug trafficking organizations; and targeting
prosecution of top drug organizations. Simply put, we are
working with our allies throughout the world to reduce the
amount of illegal drugs produced or processed; making sure
that as little as possible of those illicit drugs enter this
Nation; and Federal, State, and local officials are working
together to investigate and prosecute to the fullest these
merchants of destruction.
And we are working to reduce the demand for drugs.
Nancy and I join the millions of parents across the country
who know too well that real progress toward the goal of a drug
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free America will best be measured by preventing individuals
who do not use drugs from beginning to use them and by
convincing those who do use to stop.
Our four strategies to reduce demand are: prevention
education to keep young people from becoming drug users;
reduction of drug use by high-risk youths; improved
community-based treatment for addicts whose drug habits have
removed them from the American mainstream; and fostering
attitudes of intolerance toward drug use on the part of
mainstream adults.
Every American should be able to enjoy a drug free
workplace. Schoolchildren should have drug free schools.
Every citizen should be able to rely on a Federal work force
free from drugs. And every American should be able to enjoy
a drug free transportation system. This Administration is
working in partnership with private employers and State and
local governments to ensure all four.
We are proceeding with a cooperative national effort to
reduce and eventually eliminate drugs from government housing
projects. The Department of Education issued Schools Without
Drugs and has mobilized school, parent, and community efforts
to take drugs away from young people and give them back their
lives.
These efforts have already begun to produce results.
In 1987, for the first time since the National Institute on
Drug Abuse began its annual survey of high school seniors in
the early 1970s, a significant drop -- one-third -- in current
cocaine use was revealed. Ninety-seven percent of the seniors
polled disapproved of regular cocaine use, and 87 percent
disapproved of even trying it -- strong evidence that cocaine
use is no longer "in" among young Americans.
Finally, as the Nation's largest employer, the
Federal government is committed to establishing a model for a
drug free workplace that deals constructively with illegal
drug use. We are establishing a broad drug education training
program for all employees. The program includes testing of
employees holding safety-sensitive positions. For example,
the Department of Transportation has already implemented
drug-testing programs for employees in such positions,
including air-traffic controllers and airline safety
inspectors. Indeed, fair and accurate drug testing is one of
the few effective ways to ensure that illegal drug users begin
the process of rehabilitation. Agency programs that include
random testing to identify these drug users will be ready for
implementation in 1988. We are putting our money where our
heart is. In the past 7 years, there has been a three-fold
increase in Federal spending to fight drugs, bringing the
total close to $3.5 billion this year.
I worked closely with the Congress to enact the
Anti-Drug Abuse Act of 1986, which embodies a national
commitment to fight drug abuse through: increased criminal
penalties, improved criminal investigation and prosecution,
demand reduction, better international cooperation, and more
effective interdiction. The Act also established the
White House Conference for a Drug Free America. Already it
has hosted six regional forums to facilitate information
gathering and interchange on various aspects of the drug
issue. The Conference will hold .a national assembly in
Washington next month that will expand upon the findings of
the regional conferences, showcase the best of the Nation's
efforts, and highlight new proposals for combatting drug use
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in this country. I look forward to the group's final report
this spring in order to work with the Congress to implement
its recommendations and promote our vision of a drug free
America.
IV. TO PROVIDE FOR THE COMMON DEFENSE
Our government has no higher duty than defense of
the freedom of the American people. On this point, Alexander
Hamilton and James Madison, two of the most eminent Framers of
our Constitution, were in complete agreement. Wrote Alexander
Hamilton in The Federalist, "The circumstances which endanger
the safety of nations are infinite, and for this reason no
constitutional shackles can wisely be imposed on the power to
which the care of it is committed." James Madison concurred,
"The means of security can only be regulated by the means and
the danger of attack."
In our constitutional framework, the President and the
Congress share the vital responsibility for ensuring our
national security. Within this same constitutional framework,
however, the President has important independent powers. Both
of these constitutional principles apply to the agenda of
national security issues we will face in 1988 and beyond.
Our two branches of government clearly share powers in
such areas as planning and budgeting for the maintenance of
our defense capability; the ratification of treaties, as in
the case of the INF Treaty; and foreign economic and security
assistance, that vital instrument of our foreign policy. At
the same time, the Congress must respect the constitutional
wisdom that only the President can act as the effective
Executive agent in the conduct of foreign relations. This
truth is long established in our constitutional law and
practice. And the President, in order to act effectively in
the Nation's behalf, needs the flexibility to respond, within
the framework of law, to often unpredictable and fast-moving
challenges.
In 1980, I promised as my first priority to rebuild our
national defenses to meet the Soviet military challenge and
to restore America's standing as leader of the Free World.
Immediately this Administration went to work to rebuild our
military, to restore morale in the services and national pride
among our people, and to make America once again the leader of
free nations. As a result, we are now able to deal from
strength with our adversaries and to promote and sustain the
efforts of valiant men and women around the globe who are
struggling to win or preserve their freedom. Peace is our
goal, but we must guard the power and responsibility to meet
every challenge.
A. East-West Relations
On the basis of our renewed strength, and a policy of
realism in the pursuit of peace, we have in the past 7 years
taken great strides toward a world in which freedom can
flourish. In the coming year, we face new challenges and new
opportunities, and I hope that the Congress will be my partner
in addressing both.
Today I have submitted to the Senate for its advice and
consent to ratification the Treaty Between the United States
of America and the Union of Soviet Socialist Republics on the
Elimination of Their Intermediate-Range and Shorter-Range
Missiles. This INF Treaty is the first agreement ever to
reduce and not simply limit the buildup of nuclear weaponry,
and it provides for the elimination of an entire class of U.S.
and Soviet nuclear missiles. It contains the most stringent
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verification regime in the history of arms control. This
treaty represents the culmination of 6 years of hard nego-
tiation. After the West showed strength and solidarity, the
Soviets joined us in an agreement to ban such weapons on both
sides.
On the basis of similar strength and fortitude, and
support from the American people and the Congress, we are
engaged in serious negotiations with the Soviet Union on an
agreement that could reduce strategic nuclear offensive forces
by 50 percent. The United States and Soviet Union are
negotiating for effective verification measures that would
make it possible to ratify the U.S.-U.S.S.R. Threshold Test
Ban Treaty of 1974 and Peaceful Nuclear Explosions Treaty of
1976.
These accomplishments depend on maintaining our strength.
It should now be unmistakably clear that our determined
program to rebuild our military strength and my Strategic
Defense Initiative have spurred major advances in arms
reduction, as well as strengthening our own and allied
security. These efforts must not be undercut.
In addition, I must reiterate what I said last year --
that legislating Soviet arms control positions into American
law is not the way to get good agreements. I will veto
legislation that undermines national security and undercuts
our negotiating position.
The issue between East and West, of course, is not simply
arms control. Efforts by the Soviet Union and its surrogates
to suppress freedom are major sources of international
tensions. Experience shows these efforts to be significant
obstacles to improvements in U.S.-Soviet relations.
Human rights and regional conflicts are key issues on my
agenda with the Soviet Union. Unfortunately, I can report to
you only very limited improvement in both of these areas. For
instance, while a few Soviet political prisoners have been
released, and there has been some increase this past year in
the emigration of Soviet Jews, many more prisoners remain, and
many thousands of Soviet Jews are still denied the basic
right to emigrate. Furthermore there has been no significant
change in Soviet involvement in or provocation of regional
conflicts, despite the repeated Soviet lip service to the need
for peaceful solutions.
B. Defense Budget
Our defense budget proposals represent an essential
program for maintaining our defensive strength. The defense
budget has already been reduced to levels that will require us
to delay the achievement of important defense objectives.
Anything less will jeopardize not only our national security
and that of our allies but also the prospects for fair
agreements negotiated with our adversaries.
With this in mind we must continue with the Strategic
Modernization Program as an essential guarantor of Free World
security at the same time as we seek clear-cut and effectively
verifiable strategic arms reductions. We must also continue
the modernization of nuclear, conventional, and chemical
deterrence forces supporting our commitments to our allies.
Additionally, we must ensure that the conventional force
disparities between NATO and the Warsaw Pact are redressed
through a combination of negotiated reductions and the
strengthening of NATO capabilities.
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My Strategic Defense Initiative (SDI) is not simply a
program of research and development of new technology. It
offers hope of a reorientation of strategy -- hope for a
world in which strategic defenses, which threaten no one
and can block a ballistic-missile attack, play a greater
role in maintaining deterrence. This is a vital program.
It is an investment in a safer world for our children, and
it is insurance against violations of arms reduction
agreements. It reinforces our negotiating efforts. I will
ask the Congress to provide increases in funding necessary for
essential SDI research, development, and testing. It is a
cornerstone of our security strategy for the 1990s and beyond.
And when it is ready, we will deploy it.
Despite reductions in defense funding, we must attempt
to maintain the strength of our technology base, pursuing new
developments in conventional weapons technology. We must also
continue our Armaments Cooperation initiatives with our allies
to realize improvement in acquisition management and the
advantages of shared technological advances among our allies.
We will maintain, where necessary, the deployment of U.S.
military forces throughout the Free World as a deterrent to
those who might act to threaten peace and freedom and as
evidence of solidarity with our allies and other friendly
nations.
We must continue to develop and to exercise our
capabilities to respond to low-intensity conflict. These
simmering confrontations below the threshold of large-scale
conventional war undermine the political, economic, and
security interests of the United States and its allies and
friends.
We must complete the revitalization of our special
operations capability begun early in this Administration
and preserve that capability in the ensuing years.
Similarly, we need a vital and effective intelligence
capability. We must ensure that this capability is
effectively managed and that the President has the ability
to employ it flexibly. I will not accept legislation gov-
erning the conduct of intelligence activities that does not
preserve the flexibility that is required if our intelligence
community is to do its job. To improve the military
intelligence support to U.S. military commanders, especially
in the vital area of human intelligence collection, I am
seeking legislation to authorize the Secretary of Defense to
establish commercial entities to provide cover for certain
Department of Defense foreign intelligence collection
activities.
As we address the resource requirements for our defense
efforts, we must also streamline the process of resource
allocation. For this reason, I urge the Congress to shift
fully to a 2-year defense authorization and appropriation
cycle. This Administration continues to press initiatives
that streamline and strengthen the Federal procurement process
to dramatically increase competition in the award of Federal
contracts. We are placing particular emphasis on the findings
of the Blue Ribbon Commission on Defense Management (The
Packard Commission) and especially those recommendations
having government-wide effect.
C. Democracy and Freedom
America's goal is both peace and freedom. Americans
have always believed that liberty was not the birthright of a
fortunate few but of all mankind. And we are inspired in this
period by the stirring sight of democracy flourishing anew in
many regions of the world -- from Latin America to the
Philippines to the Republic of Korea.
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Most remarkable is the struggle of those directly
resisting aggression sponsored by the Soviet Union and its
surrogates -- in Afghanistan, in Cambodia, in Nicaragua, and
in Angola.
I strongly support the cause of the brave Freedom
Fighters of Nicaragua. On this issue there have been
differences between the Executive branch and the Congress, but
there are also shared principles: that there must not be a
Cuban or a Soviet-bloc military base in Nicaragua, because
such a base would threaten the United States and the other
nations in the Hemisphere; that Nicaragua must not pose a
military threat to its neighbors or provide a staging ground
for subversion or destabilization; and that Nicaragua must
respect the basic freedoms and human rights of its own people,
including the original pledges the Sandinista regime made to
the Organization of American States in 1979.
It is now widely accepted that democracy within Nicaragua
is the core issue in the conflict in Central America. It is
the attempt of the Communist Sandinista regime to consolidate
its monopoly of power that has led to armed rebellion. The
Guatemala Peace Accord, reached last August, recognizes the
importance of democracy within Nicaragua -- of total amnesty
for political prisoners, of negotiations with the armed
resistance for a cease-fire. The outcome of the January 15
San Jose meeting to evaluate compliance with the Guatemala
Peace Accord presents important opportunities to further peace
and democracy in the troubled Central American region.
At the San Jose Summit there was a clear consensus among
the four Central American democratic presidents that the
Sandinistas had not complied with the Peace Accord. By making
his last-minute promises President Ortega acknowledged the
accuracy of that judgment.
The key issue is whether the Sandinistas are now
committed to genuine and enduring democracy or do they just
seek the elimination of the Nicaraguan Democratic Resistance.
The Nicaraguan Democratic Resistance is the best
insurance policy for keeping the peace process on track and
producing .a democratic outcome in Nicaragua. This is not the
time to falter in our support for the Freedom Fighters. The
United States must not abandon those fighting for democracy in
Nicaragua until true democracy is attained.
In Afghanistan, we maintain our firm and unwavering
support for the heroic struggle of the Afghan Resistance
against the Soviet occupation. We will never agree to any
steps that put the Afghan Resistance, or Afghan hopes for
self-determination, at risk.
We support a peaceful solution, but such a solution can
be achieved only if the Soviet Union withdraws its forces
promptly and completely and allows Afghans themselves to
determine their political future. As I reminded Secretary
General Gorbachev during the December Summit, a prompt and
permanent Soviet withdrawal would open the way to further
improvements in U.S.-Soviet relations. Let 1988 be the year
that sees an end to the Soviet occupation of Afghanistan.
We shall continue our policy in the Persian Gulf to
promote stability in the region, maintain freedom of
navigation, and promote peace between Iran and Iraq. This
bloody conflict has been prolonged because of Iran's
intransigence and its attempts to intimidate and threaten the
countries of the area and disrupt freedom of navigation. As a
result of our policy, we have broadened and strengthened our
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relationship with the countries of the Gulf Cooperation
Council, and our vital interest in the free flow of oil in and
out of the Gulf has been protected. We are actively pursuing
an arms embargo .resolution against Iran, which has refused to
comply with the cease-fire demand of the United Nations
Security Council.
At the same time, we will work actively to promote peace
between Israel and its Arab neighbors. The violence in the
West Bank and Gaza is a vivid reminder of the dangers of the
status quo. We, along with those in the area, must work
together to give the Palestinians a reason for hope, not
despair. Stability in the Middle East requires a just and
lasting settlement of the Arab-Israeli conflict -- a
settlement that both assures Israeli security and recognizes
the legitimate rights of the Palestinians. We are committed
to achieving such a settlement.
The cause of democracy and freedom worldwide is promoted
by our program of economic and security assistance to our
allies and friends. Central to our security and to the
preservation of peace are our ties with allies and friends,
including NATO and our East Asian allies -- Japan, Korea,
the Philippines, and Thailand. Enormous progress has been
made in this decade in restoring America's influence in the
world and in expanding the horizons of democracy. To further
reduce our foreign assistance programs would be a tragic
mistake. Economic assistance, especially when coupled with
wise internal policies, helps friendly countries prosper;
security assistance helps them carry the burden of their
self-defense, often in regions of strategic importance for the
Free World. In many cases, our aid programs help countries on
whose territory there are facilities that support the mutual
defense or whose democratic aspirations we wish strongly to
support -- such as the Philippines. Our assistance programs
have also been vehicles for encouraging structural economic
policy reforms that promote prosperity, in part through
greater reliance on free markets. This crucial support for
basic American goals must be restored.
Since the enactment of comprehensive reform of our
Nation's immigration laws in the fall of 1986, the flow
of illegal aliens across our southern border has been
reduced significantly. Our Nation continues to provide open
avenues of legal immigration that each year allow 600,000
people to join our ranks as permanent residents. As in the
past, a significant portion of these new arrivals are
individuals seeking refuge from oppression in their home
countries. I am pleased to report the Department of Justice
has taken two important steps toward fairer, more expeditious
consideration of the asylum applications of persons suffering
persecution because of their religious and political beliefs.
An Asylum Policy and Review Unit, charged with reviewing
asylum cases, has been created directly within the Department.
In addition, a change has been proposed in the Immigration and
Naturalization Service that would give specially trained
Asylum Officers jurisdiction to interview applicants and
render decisions, while preserving for each applicant an
opportunity for a new hearing before an independent
immigration judge. Our Administration is also studying a
further restructuring of the asylum process to ensure that
asylum and refugee cases are considered from a humanitarian
perspective.
As General Vessey's visit last summer to Vietnam
indicated, we remain committed to obtaining the fullest
possible accounting of our men missing in action in
Southeast Asia.
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D. The Economic Dimension of Freedom
We remain active in promoting free economic institutions
in the developing world. In this connection, the Adminis-
tration strongly supports the intent of the Caribbean Basin
Economic Recovery Expansion Act, which would extend the
Caribbean Basin Initiative (CBI) for an additional 12-year
period and enhance the program's duty preferences. While not
supporting every specific provision in the bill, such as the
one concerning sugar, the Administration shares the goal of
strengthening the CBI and is proposing modifications and
alternatives to reach that goal. In addition, the Senate
should give its advice and consent to the ratification of the
Bermuda Tax Treaty, and the Congress should enact the comple-
mentary tax law changes. These actions would help regularize
our economic ties with this strategically important island.
The United States has been in the forefront of Western
nations helping Africa to alleviate food shortages due to
drought, war, and destructive economic policies as in
Ethiopia. For example, in June 1987 I set a common goal
for all U.S. economic policies and programs for Sub-Saharan
Africa -- to end hunger there through economic growth and
private sector development, and I am now implementing that
decision. At the same time, we have had some success in
promoting economic policy reform in Africa, which is now
bringing the benefits of investment incentives and free
markets to a number of countries that began their independence
burdened by stultifying centralized structures. Senegal,
Ghana, Cameroon, Botswana, and Malawi are some of the
countries adopting market-oriented reforms.
To meet future oil supply disruptions that might develop,
it is important that additional oil reserves be placed in the
Strategic Petroleum Reserve to meet our 750-million-barrel
target. In the section "Strengthening America's Energy
Security," which follows, I outline several steps that will
strengthen America's overall energy security.
I am proud that our Administration has instituted an
effective and prudent system of safeguarding our strategic
interests in East-West trade. We cannot let our adversaries
acquire through trade vital technology that would strengthen
their military capability against us. At the same time we are
determined to harmonize trade control practices with friends
and allies both to enhance their effectiveness and to avoid
undermining the competitive position of U.S. exports.
V. TO PROMOTE THE GENERAL WELFARE
As James Madison observed in The Federalist, No. 41, the
meaning of the "general welfare" is restricted to that public
happiness which the government may promote by its clearly
enumerated powers. Permitting general and unlimited powers to
government, even though these might be used with the best
motives, would render the Constitution useless as a safeguard
for individual freedom.
This Administration is deeply committed to decreasing the
power of the Federal government to its intended scope and to
increasing the power of individuals. These policies establish
conditions most conducive to individual initiative and enter-
prise and, consequently, to the creation of wealth and public
well-being. The preservation of freedom, the highest value in
our Republic, requires placing the rights of individuals above
the power of government. The great challenge of our national
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its
government is to use only its carefully enumerated powers in
promoting the general welfare by empowering individuals to
help themselves.
A. Empowering Individuals to Control Their Own
Resources
If individuals are to possess genuine autonomy then they
must be free to control their own resources, to enjoy the
fruits of their labor, and to keep what they earn, free from
excessive government taxation and spending. To further this
ideal, I propose the following six specifics:
1. Tax Policy. Experience has shown that higher
taxes ultimately fuel higher spending and do not improve the
deficit. During the past 7 years, tax revenues generally have
increased, but spending has still increased 27 percent more
than tax revenues. This is the true source of the deficit.
Those who favor higher taxes ignore the impact of such
taxes on the economy. By reducing and reforming taxes we
have seen unprecedented economic growth, high rates of job
creation, and increasing productivity for over 60 months.
During this period of time, the Administration has lowered
income tax rates and removed the automatic tax increases
caused by inflation. Future tax policy must preserve these
and other gains made on behalf of the American taxpayer.
Tax increases should also be opposed on the basis of their
burden on economic growth. These include, but are not limited
to, returning to higher marginal rates for individuals or
corporations; repealing indexing; creating a value-added tax
or increasing excise taxes; increasing taxes on capital or
energy sources; and levying new taxes on securities transfers
or corporate takeovers.
2. Reduction of Capital Gains Tax Rate. The tax
reforms accomplished in 1986 did much to remove provisions
that inhibit economic prosperity. The most important piece of
unfinished business is to reduce the capital gains tax rate to
the level that will generate the savings and investment necessary
for future economic growth.
Past experience demonstrates that lowering the capital
gains tax rate will mean increased realizations of capital
gains upon which taxes are paid. When capital gains tax rates
increase, investors tend to hold rather than sell their
assets. If investors hold their assets until death, they can
pass their untaxed gains on to their children, resulting in no
income taxes paid on those gains. When the capital gains tax
rate was increased in 1969, for example, it led to an
immediate reduction in the amount of capital gains realized.
By contrast, a reduction in the capital gains tax rate in 1978
and again in 1981 led to significant increases in capital
gains realizations.
Reducing the capital gains tax rate to an agreed-upon
optimum should be a cornerstone of tax reform for the 1990s.
I will consult with the Congress about achieving this rate
reduction as soon as possible.
3. Raise Revenues with User Fees. The burden
of reducing the deficit must not be allowed to hamper the
productive element of society -- the private sector. Raising
new revenues must be confined to areas where they will not
burden productivity. I believe that user fees for services
are a sensible alternative to a policy where revenues are
unrelated to expenditures, where some citizens are singled out
for gain while others are excluded. Additionally, user fees
promote efficiency by encouraging individuals to use the
proper level of government services.
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4. Spending Restraint. We all recognize that
reducing the size of the Federal deficit is a top priority.
The 2-year budget agreement that the Congress and I worked out
last fall is a first step. But we must go further and reduce
the size and the cost of the Federal government. I will apply
the following principles in considering new appropriations and
authorization legislation, which I urge the Congress also to
follow: eliminate pork-barrel spending that uses national
funds to benefit local interests; work toward subsidy-free
business and agriculture marketing; avoid creation of new
entitlement programs and additional cost-of-living increase
provisions; direct public assistance to the needy; and provide
for necessary discretion to promote efficient administration
of Federal programs. Moreover, the Congress should avoid
attaching appendages to spending bills that authorize
unnecessary programs and go beyond the enumerated powers
of the national government.
5. Government Management Improvements --
Government of the Future. When I became President, one of
my earliest priorities was to try to reestablish the proper
relationship between the Federal government (which had grown
much too large and too powerful) and the State and local
governments; and between government and the private sector.
In 1981, through our federalism and deregulation initiatives,
we placed greater responsibility at the State and local level
and in the private sector. We are continuing those efforts.
But as we look forward to the beginning of the 21st
century, we need to update our perspective on the proper role
of the Federal government and examine what needs to be done to
prepare for the changes that will take place. For example, we
expect the population to grow to over 268 million people.
Changes in technology and communication will link the world's
economies, trade, capital flows, and travel as never before.
I have asked the Office of Domestic Affairs to work with the
President's Council on Management Improvement to conduct an
in-depth review and recommend to me by August what further
adjustments have to be made in the Federal role to prepare
for these anticipated changes. This summer I look forward to
receiving their report, "Government of the Future," which will
also incorporate plans of my "Reform '88" program.
Meanwhile, those responsibilities that legitimately fall
within the enumerated powers of the Executive branch should be
managed to deliver quality service to all of our citizens.
Our government has a major effect upon the daily lives of all
of us through the direct delivery of services, the payment of
financial assistance through various entitlement programs,
the collection of taxes and fees, and through regulating
commercial enterprises. My 1988 management priorities will
be to complete the "Reform '88" management improvement program
I started 6 years ago; to overhaul the administrative,
financial, and credit systems in our Federal government; to
implement productivity and quality plans in each agency; and
to direct the Office of Personnel Management to examine the
needs of the Federal work force of the future.
My goal, therefore, is to ensure that my Administration
leaves a "legacy" of good management of today's problems --
with plans in place to handle tomorrow's challenges.
6. Social Security Reports to Participants.
Virtually all workers are required to participate in the
social security system. But the average worker does not know
the level of benefits that would be paid his family should he
die, become disabled, or retire. As a result he cannot make
plans for any supplemental benefits and insurance he may need.
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I am pleased to announce that before the year is over
the Social Security Administration will begin providing upon
request reports similar to those frequently provided to
employees who receive private sector benefits. The social
security report will contain a clear and detailed statement
that outlines a participant's credited earnings and social
security taxes for each year; indicates his current
eligibility status; and sets forth an estimate in current
dollars of the current and future benefits available to him.
B. Freeing the Individual From Government Dependency
It is a fact of American life that many Federal programs,
while attempting to help the poor, have made them more
dependent on the government. Much is within our reach to help
dependent citizens lift themselves to self-sufficiency:
1. Reducing Welfare Dependency Through
Opportunity. The current welfare system has trapped too many
Americans in a dependency on welfare that is hard to break
and easy to pass on to succeeding generations. In recent
years, a consensus has emerged that it is through work and
the acceptance of responsibility that people develop the
self-esteem to pull themselves up from dependency.
Last year I launched a major effort to encourage
the States, working with established community self-help
groups, to undertake a wide range of "workfare" and other
responsibility-building reform experiments. Experience has
clearly shown that it is in the States that real welfare
reform will occur. This was true back in the 1970s in
California when we started this movement; it is increasingly
the case today. The States' and my objective is to make work
and self-sufficiency more attractive than welfare. However,
because the current welfare system is so complex and
restrictive in its endless rules and restrictions, we need
legislation to give the States added flexibility and encour-
agement to undertake truly innovative and individualized
reform experiments.
Last August I endorsed H.R. 3200/S. 1655, legislation
that represents a constructive and fiscally responsible
approach to reducing welfare dependency. This legislation
would help more people become self-sufficient through
mandatory participation requirements and a flexible work and
training program. It would strengthen our ability to require
absent parents to support their children. It also contains
the broad waiver authority States need to implement their own
ideas and make the welfare system more responsive to the needs
of each particular State. I call on the Congress to enact
this legislation and not use the present consensus on the need
to reform our welfare system as an opportunity simply to
expand the benefit levels, which would lead to increased
dependency.
Even under the limited authority of current law, many
States have undertaken or are planning such experiments. To
assist them I have established the Interagency Low Income
Opportunity Advisory Board to facilitate 'one-stop shopping"
for the States as they deal with the Federal government and to
advise my Cabinet on the impact of the State proposals on the
Federal welfare system.
Recently this Board facilitated multi-program waivers of
Federal programs to the States of Wisconsin and New Jersey,
enabling them to launch broad-based welfare reform initia-
tives. Wisconsin's program restructures benefits to make
participation in work and training programs more attractive
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than simply collecting welfare. New Jersey's Reaching
Economic Achievement ("REACH") program employs widespread
mandatory work requirements, together with the services
intended to make long-term employment a reality, and promises
savings through reduced case loads. We need more such
experiments, emphasizing the close tie we know exists between
achievement through work and the feelings of self-worth
essential to personal economic independence.
2. Removing Barriers to Home Ownership.
Historically our freedom has been symbolized by the
opportunity for every American family to own and occupy
housing. The success of our economic recovery program has
caused inflation and mortgage interest rates to decline,
making it easier for more Americans to buy homes. To make
housing even more affordable, this Administration is working
with home builders and local officials to overcome government
delays and cost-adding regulations. I am also pleased that
the recently passed housing bill granted permanent authority
for the FHA mortgage insurance program that increases the
availability of credit to American home buyers. The bill also
accepts my recommendations for extending the availability of
rental housing vouchers to rural as well as urban areas.
These vouchers will give meaningful choice to the individuals
intended to be beneficiaries of housing programs. Moreover,
the bill endorses the concept of tenant ownership of public
housing. In order fully to empower occupants of public
housing to own their own homes, I will be acting on the
recommendations of the President's Commission on Privatization
to develop a proposal to sell at a discount existing public
housing to the current occupants, thus mirroring the success
this approach has enjoyed in Britain.
3; Strengthening the Family. It is one of our
country's most basic principles -- where there are strong
families, the freedom of the individual expands. The strength
and stability of the American family provide essential armor
for individuals in the fight against poverty. Only a few
years ago, the American household of persons related by blood,
marriage, or adoption -- the traditional definition of the
family -- seemed in peril.
I have sought to further policies that recognize the
importance of a stable family life. For example, the tax
reforms of 1986 contributed to family stability by increasing
personal exemptions. Last fall I issued an Executive order on
the Family requiring that every department and agency review
its proposed activities in light of seven standards designed
to promote and not harm the family. The Offices of Management
and Budget and Policy Development are charged with the
responsibility of reviewing future Executive branch activity
to ensure that it meets these standards. In addition, the
Congress should require a statement that determines the impact
legislation will have on the American family.
In March, I will receive a report from the Office of
Policy Development on the impact of existing policies and
regulations on the family. At that time I will take
administrative action and propose legislation necessary to
correct policies that do not conform to the family criteria.
4. Strengthening Communities Through Enterprise
Zones. Despite the economic prosperity enjoyed by most of the
Nation, some regions remain economically depressed. The key
to revitalizing these areas is not new or expanded government
programs, but free enterprise. In 1981, I proposed the
creation of enterprise zones in which economically depressed
areas could receive tax and regulatory relief in order to
expand private economic activity and opportunity within the
zones and create jobs in the process.
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More than half the States have set up their own
enterprise zones, even without Federal incentives. These
zones have created new jobs and spurred billions of dollars in
capital investment. Their success is testimony to the power
of this concept and is just a small indication of how much
could be accomplished if Federal incentives were added to
those of States and localities. Adding Federal incentives
would make existing zones far more economically attractive and
successful and would also encourage more State and local
zones. Accordingly, I am renewing my call to the Congress to
take up effective Federal enterprise zone legislation that
will complement the State programs.
5. Independence Through Excellence in Education.
Individuals well instructed in basic skills, important
knowledge, sound values, and independent reasoning are better
equipped to participate in America's continued freedom and
prosperity. In 1981, however, our educational system was
suffering from a 20-year decline in academic achievement. Yet
spending per pupil had nearly doubled since 1970, and Federal
spending for education had increased over 3,000 percent since
1960. It has now risen to more than $20 billion. But while
funding is very important, money without genuine commitment
does not lead to educational excellence.
In 1983, the National Commission on Excellence in
Education launched a national renaissance in education by
identifying problem areas and suggesting solutions for
State and local programs. In its ground-breaking report,
A Nation At Risk, the Commission recommended that the States
and localities return to the basics in curriculum and
strengthen high school graduation requirements. Additionally,
my Administration urged the States and localities to consider
merit pay and competency testing to improve the abilities of
educators. As a result of the Commission's and our efforts,
some school systems began to turn away from a smorgasbord
curriculum and toward a more structured, traditional program
designed to educate good citizens and to enable all students
to participate in the opportunities our society offers in
abundance. But despite this progress, we still have a long
way to go. For example, only 5 percent of American
17-year-olds have advanced reading skills; an average high
school student takes only 1.4 years of history. In April the
Department of Education will complete its review of progress
made since the issuance of A Nation at Risk.
Last month the Secretary of Education unveiled a model
curriculum in a report entitled James Madison High School.
This report outlined a year-by-year slate of courses in
English, social studies, math, science, foreign language, fine
arts, physical education, and health, and proposed that they
be made graduation requirements for all students. Four years
of English would include American, British, and world
literature. Three years of social studies would include
western civilization, American history, and Principles of
American Democracy, with a hefty dose of geography throughout.
This is the kind of curriculum that will help America's young
people meet the challenges of the next century. Although a
public high school curriculum must be set at the State or
local level, I hope school officials will examine the model
curriculum proposed in James Madison High School.
In addition to "back to basics" reforms, American
education would benefit from greater parental involvement.
In July 1987, as part of my Economic Bill of Rights, I stated
that we must recognize the right of parents to have their
children educated, publicly or privately, without unreasonable
regulation or interference from State or Federal governments.
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To that end, I am establishing a working group in the Domestic
Policy Council that will examine the parental role in
education and make recommendations for strengthening parents'
rights.
Improving choice in education continues to be an
important goal of this Administration. Study after study
has found that when parents have a say and are involved in
their children's education, the children do better in school.
For example, the Congress should authorize a program of giving
parents a choice of schools when providing Federal funds to
benefit students.
I will continue to encourage efforts to advance parental
choice through expansion of the magnet schools program, as
well as in the compensatory education programs financed
through Chapter 1 of the Education Consolidation and
Improvement Act. Compensatory education programs provide
additional services to children most in need of extra help
in mastering basic skills. Enhancing parental choice is
particularly critical in the education of disadvantaged
children, who are the focus of the Chapter 1 program.
But I do not intend to stop there. Polls show that
millions of Americans would like, but do not have, the ability
of choosing the education program and institution that is best
for their children. A voucher system at the State level would
empower parents. I will ask the Department of Education to
develop model voucher legislation and make it available to the
50 States, so that they can implement programs that promote
choice in education.
A college education is part of training for tomorrow's
challenges. However, since 1980 the cost of a college
education has risen more than twice as fast as the Consumer
Price Index, and many Americans are wondering whether their
children will ever be able to go to college. Colleges set
tuition, not the Federal government. It is my hope that our
Nation's universities will act to reduce the cost of higher
education without sacrificing quality in core fields. To help
college students from families of limited means, I propose an
increase in the maximum Pell Grant to $2300.
I will also ask the Congress to approve creation of
College Savings Bonds. These bonds will offer an incentive
for lower- and middle-income families to save now for the
future education of their children. Interest on bonds used
for this purpose will be free from taxation.
While we do our part to help finance college education,
students must do their part and act responsibly. Most do,
many do not. The taxpayers will spend over $1.6 billion this
year to pay off student defaults. To ensure that tomorrow's
students do not lose out because Federal guarantees are
abused, the Department of Education will propose a rule
holding schools and colleges accountable for excessive rates
of default on Guaranteed Student Loans. Schools in which
there is a disproportionately high number of student defaults
will face the loss of eligibility for student aid.
Other policies addressing this problem include:
providing better information to students on their duties when
they borrow and when their debts are due; use of the IRS to
take money owed out of tax refunds; use of collection agencies
and litigation to go after the worst offenders; and increasing
the incentives for lenders and guarantee agencies to do a
better job of collecting loans.
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6. Protecting the Health of Citizens. Government
promotion of public health has enabled many individuals to
participate fully in society. The Federal government now has
the opportunity to assist elderly persons who fall victim to
catastrophic illnesses and to lead the fight against diseases
such as AIDS.
I am asking the Congress to enact my proposal for Federal
coverage of catastrophic health care costs incurred by
Medicare beneficiaries. This legislation, which I negotiated
with the Senate, would provide affordable catastrophic
coverage.
Additionally, the Office of Personnel Management has a
new proposal before the Congress to help Federal workers deal
with long-term health care needs -- both nursing home and home
health care. This proposal will serve as an example for
privately funded long-term health care. No new government
funds will be needed to provide this additional insurance. It
will be made available through the already-existing life
insurance program for Federal employees, with a small
additional premium from employees enrolled in the program.
We must continue to take preventive measures against AIDS
while at the same time treating AIDS victims with compassion
and care. Although increased Federal funding is not the only
solution, I am proposing $1.5 billion in fiscal 1989 for
research, treatment, testing, counseling, and education, up
ten-fold since 1985. Administration scientists were centrally
involved in the discovery of the Human Immuno-deficiency Virus
(HIV), developing the HIV blood antibody test and the
anti-AIDS drug AZT. And testing has been initiated in human
volunteers for two experimental AIDS vaccines.
However, the primary responsibility for avoiding AIDS
lies with the individual. As the Surgeon General, the
Secretary of Health and Human Services, and the Secretary of
Education have been reminding us all, the best way to prevent
AIDS is to abstain from sex until marriage and then to
maintain a faithful relationship, as well as to avoid illicit
drugs altogether. If the American people follow this wise and
timeless counsel, if our schools and families and media
communicate it effectively, the spread of AIDS can be greatly
diminished.
For our young people, education is crucial for AIDS
prevention, and parents have the primary responsibility for
this. The Department of Education released AIDS and the
Education of Our Children last October to assist parents and
educators in this effort. This publication reflects my
conviction that educational efforts in the schools should be
determined locally and with deference to parental values.
In 1987 I announced a policy of expanded routine testing,
which is essential for early diagnosis and treatment of
infected individuals, for protection of the public, and for
assisting Federal, State, and local policymakers in dealing
with this epidemic. I also established the Presidential
Commission on the HIV Epidemic and will receive their final
recommendations this summer.
I have directed the Public Health Service to undertake a
comprehensive program to determine the extent of HIV infection
and full-blown AIDS. We need to know more about the dynamics
of this disease, its prevalence, and its rate of spread.
Beginning in March 1988, the Centers for Disease Control will
produce quarterly reports on the progress in implementing this
program.
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I am directing the Food and Drug Administration to
accelerate its review of new therapeutics, vaccines, blood-
screening tests, and other products to fight this disease.
C. Freeing Individuals to Pursue Productive Endeavors
I believe all individuals should have the right to pursue
their livelihood in their own way, free from excessive
government regulation and government-subsidized competition.
Greater personal autonomy, not a paternalistic "industrial
policy," is the path to greater American competitiveness. As
the 1987 Nobel Laureate in Economics, James Buchanan, recently
pointed out:
"We now have in place the scientific and technical
tools that enable us to make meaningful comparisons
between the workings of an industry in an unregulated,
privatized setting and the workings of the same
industry in a regulated or controlled setting."
Our experience with deregulation over the past 7 years
has demonstrated the superiority of industry inspired by
private initiative rather than controlled by Federal
regulations. Accordingly, I am instructing my Administration
to take all possible measures to provide individual Americans
with the greatest possible range of economic opportunities,
and I invite the Congress to join me in further deregulating
our economy and in promoting free trade among free nations.
Here are nine areas on which the Administration will focus:
1. Deregulation of Key Industries. Back in 1980,
I promised to get the government off the backs of all
individual Americans -- working men and women, consumers, and
businessmen and women. More than 7000 new regulations were
issued in my predecessor's last year in office. This had to
stop. At my direction, various departments have acted to
reduce the scope and cost of Federal regulation. We have
accomplished a great deal. For example, we have expedited
Federal approval of experimental drugs, making them available
to treat serious or life-threatening diseases when other
treatments do not work.
Individual Americans have access to more goods and are
able to travel more easily and at less cost because of
deregulation. Today, for the first time in 30 years, the
railroad industry is financially stable because of economic
deregulation. Shippers and consumers across the Nation
benefit from real cost reductions brought on by more
competition. And, despite some problems inevitable in a
large, dynamic industry, airline consumers now enjoy about
$11 billion per year in lower fares, a great number of flight
options, and a safe, efficient air transportation system
unequaled by any nation. Our free market policies have
worked. Although we must continue our vigilance to assure
safety, we must not, in any form, re-regulate these
industries.
The current relaxation of Federal regulation of the
trucking industry has demonstrated the tremendous potential of
individual Americans. Now is the time to complete the
deregulation process. I ask that the Congress pass the
Administration's Trucking Productivity Improvement Act of 1987
to remove the last vestige of Federal regulation of the
interstate trucking industry and ensure that the States do not
re-regulate the interstate and intrastate operations of
interstate trucking firms. Already the progress of rail and
trucking deregulation has made the Interstate Commerce
Commission an anachronism. It should be abolished as proposed
in legislation sent to the Congress last year.
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This Administration has sought to promote the free flow
of information among individuals by freeing the telecommunica-
tions industry from intrusive government control. In this
"Age of Information" America risks losing its position as
the world's leader in information and telecommunications
technology -- not because we lack the talent, the resources,
or the will, but because we have needlessly regulated our
telecommunications industry.
Another area in which deregulation has promoted
individual freedom is the broadcasting and cable industries.
I have strongly supported the elimination of the so-called
"Fairness Doctrine" as an unconstitutional infringement
upon the freedom of the press, and I will continue to
resist any legislation that attempts to reverse this Federal
Communications Commission (FCC) action. This Administration
has also insisted in the courts that the cable industry
receive the same First Amendment protection as the print
media. This is particularly imperative in light of recent
technological changes in the industry. One area where First
Amendment rights have been dealt a severe blow is the recent
codification of the "cross-ownership" rule. This last minute
appendage to the Continuing Resolution prevents owners of
newspapers and broadcast stations from even seeking a waiver
of the rule and thus violates their First Amendment rights.
This change could force the closing of newspapers. I strongly
support measures to repeal legislative cross-ownership
restrictions that inhibit rather than enhance the free market
of ideas.
Where the government does regulate economic activity,
this Administration has sought to use market-oriented
approaches. For example, in the case of airline landing
rights, it is important that individuals be able to freely
transfer rights to operate within the regulatory regime.
Despite the progress we have made on deregulation, more needs
to be done. The Office of Management and Budget therefore
will continue to assure that agencies, as they develop pro-
posed regulations, evaluate and make public their findings
concerning the effect of proposed Federal regulations on
private sector employment and commerce.
2. Reducing Government Reporting Burdens. Since
1982, my Executive Office has actively sought to reduce the
burden of Federal reporting requirements on every individual
and business. Each year we have made sizable reductions in
paperwork burdens, totalling 560 million man-hours from
Fiscal Year 1981 through Fiscal Year 1986. To improve our
efforts, the Office of Management and Budget will issue
regulations that will provide a more timely and complete
description of proposed reporting burdens. Citizens will be
encouraged to report back to OMB when, in their experience,
the reporting requirement is unduly onerous. The Office of
Management and Budget is systematically simplifying Federal
procurement regulations and reducing the paperwork burden
imposed upon those who want to compete for contracts with the
Federal government.
Similarly, the Census Bureau has substantially improved
the questionnaires to be used in the 1990 decennial census.
These improvements will reduce the paperwork burden on all
American households by using a significantly abbreviated
"short form and by making sure that no more households than
absolutely necessary are asked to complete the "long" form.
These changes will also improve the quality of the information
collected.
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3. Strengthening America's Energy Security. The
economic well-being and future security of thisNation depend
upon maintaining and building long-term energy security and
strengthening the domestic energy industry. We have made
considerable progress. While our economy has greatly
expanded, we are using no more energy and less oil than we did
10 years ago, and our strategic oil stocks are five times
higher. But more needs to be done.
In May 1987, I offered several proposals to enhance our
Nation's energy security. The windfall profit tax has raised
little or no revenue since the collapse of oil prices in 1985,
yet it discourages long-term investment in new domestic oil
production. Moreover, it causes oil producers to engage in
purposeless record-keeping. It should be repealed.
Last May I signed legislation eliminating restrictions on
natural gas use. The Congress should now act to decontrol the
wellhead price of natural gas and provide for open access
pipeline transportation. Both measures would lead to less
demand for imported oil. I also urge action on the
Administration's proposal to deregulate many oil pipelines.
This year the Congress will consider our recommendation
concerning oil and gas activities on the coastal plain of the
Arctic National Wildlife Refuge -- the most outstanding
onshore oil and gas frontier in this Nation. The Department
of the Interior would manage exploration, development, and
production of these potentially vast resources while assuring
that environmental safeguards are carefully maintained. The
Congress should move expeditiously to enact legislation
implementing our recommendation.
Development of our offshore energy resources continues to
be vital to our economic and energy security. Last year we
developed and implemented a 5-year Outer Continental Shelf
(OCS) leasing program. Unparalleled in its responsiveness to
State and local concerns, this program meets America's need
for domestic energy supplies while it continues to provide
protection for our important coastal resources.
Lastly, to ensure the future viability of nuclear power
in the United States, the nuclear licensing process should be
reformed and the Price-Anderson Act should be reauthorized.
I urge responsible congressional action in these areas.
4. Protecting the Environment Without Unnecessary
Government Intrusion. I have always believed that this Nation
does not have to choose between a clean, safe environment and
a productive economy. Of course, sometimes trade-offs exist
and choices have to be made.
America's program for environmental protection is the
most comprehensive in the world. And our environmental
accomplishments are impressive. We have dramatically reduced
air pollution in our cities and restored thousands of miles of
waterways without hampering economic growth. We have cut
levels of lead in urban air by nearly 90 percent and cleaned
up more than 1000 hazardous dumps and spill sites. And we
have made impressive strides in the Superfund hazardous
waste cleanup program. Work has been completed at almost
200 sites this year, including many that posed immediate
threats to human health and the environment. This brings the
total since this program began to over 1000. In addition,
work is underway at more than 700 National Priority List
sites.
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We have recognized the global nature of some
environmental challenges and played a leadership role in the
world community to meet them. In December, I submitted to
the Senate for advice and consent to ratification an inter-
national protocol to reduce chemical emissions that may be
depleting the stratospheric ozone layer, and I urge early
congressional action on this initiative. This protocol is the
first time nations of the world have agreed to specific action
in order to address a global environmental problem.
Consistent with the report of the National Acid
Precipitation Assessment Program, I will again request
congressional approval of a 5-year, $2.5 billion program for
development of innovative clean coal technologies to reduce
further acidic deposition (acid rain) emissions. The
Secretary of Energy has begun implementation of the first
2 years' funding provided in the continuing resolution and,
at my direction, has formed a panel to advise on innovative
technology projects for funding. Additionally, I have
reviewed and accepted significant new recommendations from my
Task Force on Regulatory Relief that will introduce such new
technologies into the marketplace more quickly and
efficiently:
o The Department of Energy will permit preferential
treatment for innovative clean coal technology projects,
recognizing the risk inherent in such demonstrations.
o The Federal Energy Regulatory Commission will support
a 5-year demonstration program on rate incentives for
innovative technologies.
o The Environmental Protection Agency will support
and encourage a variety of means to include "bubbles" and
interpollutant trading, to achieve emissions reductions.
5. Strengthening Financial Markets. With a view
to empowering people to engage in productive activity for
mutual gain, I am taking steps to reduce arbitrary second-
guessing of markets by government regulators who can scarcely
hope to dminister financial services more efficiently or
fairly.
I reassert my support for the pro-competitive Financial
Modernization Act of 1987, which would repeal Sections 20 and
32 of the Glass-Steagall Act prohibiting affiliations between
commercial banks and securities firms. It would permit bank
holding companies, with Federal Reserve Board approval, to own
affiliates that underwrite or deal in securities. I welcome
the bipartisan initiatives of the Senate and House Banking
Committees in this area, and I encourage the Congress to
consider additional reforms that keep financial services open
and competitive and allow the development of innovative
services to benefit individuals, businesses, and government.
In today's global economy, America's financial institutions
must be released from this outdated legal framework so that
they will be able to remain on the leading edge in the world
marketplace.
The market for corporate control is a vital component of
our free enterprise economy. This Administration opposes
legislation that would have the effect of making takeover
activity more costly and difficult. Such efforts prevent the
free flow of capital and make American firms less responsive
to competitive forces, often at the expense of shareholders.
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6. Protecting Individual's Property Rights. It
was an axiom of our Founding Fathers and free Englishmen
before them that the right to own and control property was the
foundation of all other individual liberties. To protect
these rights, the Administration has urged the courts to
restore the constitutional right of a citizen to receive just
compensation when government at any level takes private
property through regulation or other means. Last spring,
the Supreme Court adopted this view in Nollan v. California
Coastal Commission. In a second case, the Court held that the
Fifth Amendment requires government to compensate citizens for
temporary losses that occur while they are challenging such a
government regulatory 'taking" in court.
In the wake of these decisions, this Administration is
now implementing new procedures to ensure that Federal
regulations do not violate the Fifth Amendment prohibition on
taking private property; or if they do take a citizen's
property for public use, to ensure that he receives
constitutionally required just compensation.
7. Trade and Competitiveness. To enable
individuals to enjoy the benefits of trade with other
countries and to engage in productive activity without the
burdens of retaliatory trade barriers, I will continue to
encourage a free and fair trade policy. U.S. trade policy
must reflect the fact that we live and work in a global
economy and that our future prosperity lies in establishing
stable, open relationships with our trading partners abroad
and competitive, unrestrained markets at home. An effective
trade policy, therefore, must pursue two interrelated goals:
to extend, by example and by negotiation, the benefits of free
trade to the world economy and to enhance, through
deregulation and privatization, the free operation of the
domestic economy. Only in such a competitive environment will
American business reach its productive potential and American
workers enjoy the just rewards for their labors.
Last February, I submitted to the Congress a program for
making the United States more competitive, much of which was
contained in the Trade, Employment, and Productivity Act of
1987. There were six elements to that program, each critical
to ensuring America's future economic preeminence: increasing
investment in human capital; promoting the development of
science and technology; better protecting intellectual
property rights; enacting essential legal and regulatory
reforms; shaping the international economic environment; and
continuing to eliminate the Federal budget deficit by reducing
domestic spending. Taken as a whole, this program recognized
that government must not interfere with the marketplace but
should ensure that the underpinnings of American economic
success, such as a well-educated work force and a
technological edge, remain strong.
Unfortunately, the Congress has failed to recognize the
broad nature of the competitiveness problem and instead has
placed too much emphasis on protectionist measures that may
defer short-lived adjustment pains but harm the future health
of the economy. Protectionism serves as a hidden tax on the
American economy, crippling once prosperous industries,
throwing Americans out of work, and raising costs for
consumers. American business comes to rely more heavily on
government and less on the marketplace, while Americans watch
their standard of living slip away. Despite the soothing
words of its advocates, protectionism represents the triumph
of special interest over the general interest. This
Administration remains committed to working with the Congress
to draft responsible trade legislation, but if that
legislation is not free of harmful protectionist measures, I
will veto it.
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The Department of Commerce is taking two important
steps to boost U.S. exports. First, it will launch
Export Now, an intensive new effort, supported by the private
sector, to inform small, medium, and large businesses of the
current opportunities to expand exports. This effort will
encourage American business to take advantage of favorable
exchange rates, of the market-opening actions of this
Administration, and of the support our government agencies can
give them in entering new overseas markets. Second, the
Department will begin the Malcolm Baldrige Quality Awards
program to help restore "Made in the U.S.A." as the symbol of
the very best products throughout the world.
No sector, of our economy would benefit more from
international trade reforms than agriculture. One of my
proposals to the General Agreement on Tariffs and Trade (GATT)
for negotiations under the Uruguay Round is to eliminate
worldwide all subsidies that distort agricultural trade and
all agricultural import barriers. I propose that these
subsidies and restrictions be phased out over 10 years. We
are striving for an agreement on agriculture by the end of
this.year, in order to hasten access of U.S. farmers to export
markets now closed to them. I also propose an international
harmonization of health and sanitary measures affecting
agricultural trade with the aim of eliminating foreign
countries' use of them as disguised trade barriers.
The Nation benefits from the excellence of our
scientists, engineers, and researchers. Because it is
important that business have adequate incentives to fund
research here in the United States, we are seeking enactment
of a permanent tax credit for firms engaging in research and
experimentation to replace the tax credit that expires at the
end of this year. In addition, we are seeking legislation
that would permit the allocation of at least 67 percent of
a U.S. company's research expenses to its domestic incaime
for purposes of the foreign tax credit.
During this Administration, we have also shifted the
focus of Federal investment in R&D to basic research, allowing
the private sector to transform this fundamental knowledge
into technologies and processes necessary to develop products
and services that meet the demands of the marketplace.
Federal investment in basic research has grown in real terms
by 40 percent since 1981. Last year, I issued an Executive
order to facilitate citizens' access to such federally funded
basic research. In addition, I am asking the Congress to fund
incentives to spur American innovation. I am requesting that
we now provide monetary awards to accompany our National
Medals of Science and Technology. In addition, I am proposing
a new Thomas A. Edison Prize that will challenge Americans
from all walks of life to use technology to improve the
quality of life in the United States and the world.
This Administration has also proposed construction of a
Superconducting Super Collider, which is essential to
continued U.S. leadership in high-energy physics and America's
scientific and technological competitiveness. Presently, the
Department of Energy is studying locations in seven States,
and late this summer the Secretary of Energy will select the
preferred site for the project. We hope that our allies will
share the cost of construction and operation of this facility,
as well as the benefits it will afford for new discoveries in
basic physics.
The freedom to compete in the marketplace is essential to
our concept of liberty. Our antitrust statutes were intended
to protect this freedom. Sadly they have been transformed
into weapons that competitors use against each other and tools
for inappropriate government interference in the marketplace.
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Additionally, American firms find themselves at a competitive
disadvantage with foreign competitors because of the burden
and uncertainty fostered by some outdated aspects of our
Nation's antitrust statutes. Therefore, I again urge the
Congress to adopt my proposed antitrust reforms, particularly
those that remove disincentives to pro-competitive mergers.
In addition, I am asking the Congress to amend the National
Cooperative Research Act to permit some types of joint
production ventures. While retaining the protection of the
antitrust statutes, this change will help U.S. manufacturing
firms develop innovative ways to produce goods and services at
competitive prices both here and overseas.
For example, the domestic automobile manufacturing
industry has made major strides in improving its competitive
position, producing higher quality and more fuel-efficient
vehicles. Despite these gains in fuel efficiency, the
industry remains restricted by current law, which requires
automobile manufacturers to "balance" their line of
automobiles to include cars and light trucks that meet
corporate average miles-per-gallon fuel economy (CAFE)
standards. These standards make it more difficult for U.S.
firms to produce automobiles that consumers want to buy. This
Administration has proposed the Motor Vehicle Information and
Cost Savings Act of 1987 to eliminate this requirement for
future model years. This legislation would remove a
competitive disadvantage for American firms at a time when the
purpose of the CAFE standard has been largely realized and
would remove the incentive for domestic auto manufacturers to
export U.S. jobs.
Another factor affecting U.S. competitiveness is our
civil justice system. During the past 2 years, 47 of the
50 States have enacted tort reform legislation. We strongly
supported many of these State initiatives, and we will work
closely with the States to achieve further reforms wherever
possible. In addition, the Administration is encouraged by
the progress of the legislation to reduce the costly product
liability insurance spiral and will work with the Congress
towards the enactment of effective and meaningful reform of
product liability law.
Key to promoting investment in ideas, innovation, and
research is ensuring that those investments will be protected.
Accordingly, I have proposed as part of my superconductivity
legislation to raise legal protection for products resulting
from patented processes and to prohibit foreign nations from
using the Freedom of Information Act to acquire intellectual
property developed by the U.S. Government. Additional
measures planned include joining the Berne Convention, which
provides international protection for intellectual property,
demanding adequate protection of intellectual property rights
when negotiating treaties, and pushing hard in the GATT Round
for high standards for intellectual property protection
worldwide.
8. Free Trade with Canada. On January 2 Prime
Minister Mulroney and I signed a Free Trade Agreement that,
when enacted, will mark the beginning of a remarkable new era.
It eliminates all tariffs between the United States and-Canada
over the next 10 years, promotes free trade in energy, and
greatly reduces restrictions on investments. The agreement
goes beyond most trade agreements and covers services and
investment. It is a "win-win" agreement for both the
United States and Canada. Moreover, it sends a signal to the
rest of the world: protectionism is not inevitable. Rather,
with the political will and commitment, all nations can
promote freer trade to the benefit of each and every citizen.
I will soon transmit a bill to implement this agreement and I
urge prompt enactment to ensure that the agreement takes
effect on January 1, 1989.
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In November, the United States Trade Representative, on
my behalf, signed a framework agreement with Mexico for
discussions on trade and investment. This framework agreement
is an important step forward in our bilateral trade
relationship that will enable us to work together to address
problems, reduce barriers and, thus, increase trade and
investment between our two countries.
9. Freeing the Individual to Work. Few laws that
a government may impose are more injurious to liberty than
restrictions on the right to work, as outlined in my Economic
Bill of Rights. Today, we are in the 6th year of an economic
recovery that has created 14.5 million jobs. In order to
continue and to build on that record of growth, we need
policies that recognize the changing nature and changing needs
of the work force.
These policies include enhanced training for dislocated
workers, so that they are able to adjust to a world requiring
new and different skills. Our proposed Worker Adjustment
Program will address this need in a comprehensive way while
increasing the role of States and localities in determining
how these funds are best spent. In addition, we are preparing
to give States and localities the flexibility to provide
remedial training to disadvantaged youth. For thousands of
low-skilled young people, this initiative holds the potential
to provide a way out of poverty and into a job.
Indeed, the changes in our work force present other
challenges as well. More people are working than ever before
in our history. There is fuller work force participation
across all sectors, and more women are working than ever
before. While this has helped power our tremendous growth, it
has also created tension between demands of work and demands
of child-rearing. We need to work with State and local
governments and the private sector to identify and develop
effective solutions, consistent with our efforts to strengthen
the family, to foster practical, voluntary ways to ease this
tension.
Several threats to our continued job growth can be found
in a range of initiatives pending in the Congress, such as
employer-provided health care and health insurance; parental
leave; advance notification of plant closings; risk
notification; an increase in the minimum wage; labor
protective provisions; and a ban on employers using polygraphs
to prevent theft. Many of these initiatives have been called
"mandated benefits," but a more accurate description would be
"mandated costs" or "mandated unemployment." Such mandated
costs are particularly harmful to our Nation's small
businesses, which are leading the way in job creation in our
economic recovery. While many of the objectives sought by
such legislation are laudable, they are not the proper subject
for Federal mandates.
While well intentioned, the added employment costs would
reduce job opportunities, lower wages generally, weaken
economic growth, and hinder our competitiveness in world
markets. In short, they are efforts to make individuals and
companies pay for new government programs, mandated by the
government but implemented by the private sector. Rather than
forcing employers to provide such coverage, with possible
serious adverse side effects for some workers, these decisions
should be left to voluntary negotiation between employers and
employees.
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The adoption of "comparable worth" pay standards, another
intrusive form of government intervention into the labor
market, has also been proposed. The objective is not to
provide equal pay for equal work, a concept I fully support
and which I enforce as the law of the land. Rather,
"comparable worth" proposals seek to determine the worth of
completely different jobs and then empower government panels
to assign "fair" and "comparable" wages. Proposals that would
establish panels of "experts" to determine how much workers
can earn would create the kind of planned economy that has
stifled economic growth in other parts of the world. Such
wage fixing completely ignores the fact that in a free
enterprise economy market forces should determine wages.
We should seek to eliminate existing barriers to
employment. For example, when I took office I inherited a
rule that, for over 40 years, prohibited individuals from
working in their homes to produce knitted garments such as
sweaters, caps, and scarves. In 1984, we dropped that rule
and permitted employers to hire home workers after obtaining a
certificate from the Department of Labor authorizing such
employment, thus ensuring that the home workers receive the
protection of the Fair Labor Standards Act. The restrictions
still apply to six other categories of products, and the
Department of Labor will be working to extend the
certification procedures for five of the six remaining home
work industries.
Another proposal in the Congress would raise the minimum
wage, thereby creating additional barriers to employment.
Today most people who work at the minimum wage are teenagers
and others with limited experience who need these jobs to
begin their climb up the economic ladder. Few are heads of
households. Higher minimum wages will surely force young and
inexperienced workers into unemployment. We should permit a
special minimum wage differential for teenagers that would
increase employment, on-the-job-training, and future wage
growth for the least-skilled workers. Reform of other Federal
wage statutes, such as Davis-Bacon, is also needed.
We should avoid so-called anti-"double breasting" laws
that would bar firms with union labor from having independent
affiliates without union contracts. Anti-double breasting
laws reduce job opportunities by raising labor costs and
should be left to negotiation between employer and employee.
D. Empowering Individuals by Opening Up New Areas for
Human Endeavor
One enduring legacy of American frontier society has been
a love of bold challenges and wide open vistas. Some 30 years
ago we crossed a "new frontier" with a shot into space. Today
we continue to face new opportunities and new challenges in
opening a limitless universe beyond our tiny globe to
exploration and commercial enterprise. But here on Earth as
well, whole new sectors of discovery and productivity lie
waiting for development through individual creativity and
initiative.
1. Privatization of Government Activities. Over
time, government has accumulated numerous commercial opera-
tions, many of which could be performed more efficiently by
the private sector. Where such opportunities exist to provide
better services at lower cost, we will seek to transfer such
services and operations to the most efficient enterprises.
This does not imply the abrogation of government responsi-
bility for these services. Rather, it merely recognizes that
what matters the most is the cost and quality of the service
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provided, not who provides it. In addition, there is an
important moral consideration -- individual liberty would be
enhanced and the debilitating effect of public sector growth
on human freedom would be reduced.
Even now, government relies extensively on the private
sector to provide basic government services in many key
programs: the G.I. Bill, Medicare, Medicaid, student loans,
food stamps, and many other programs. Further, the government
benefits from private sector assistance in disbursing funds
electronically, assessing credit worthiness of loan
applicants, servicing and collecting payments due the
government, and relying on finance accounting systems from the
private sector to bring about an extensive upgrading of
Executive branch financial management throughout the
government. Thus privatization can make government operations
more efficient and at the same time provide more convenient
service to our citizens.
The Administration sold over $5 billion in government
loans to private investors last year, with plans to sell an
additional $4 billion in government loans this year.
Additionally, we sold the government-owned freight railroad,
CONRAIL, to private investors at a price tag of almost
$2 billion.
As part of my Economic Bill of Rights, I established the
President's Commission on Privatization to accelerate our
program of placing greater reliance on the private sector. In
its interim report covering government housing programs the
Commission recommended expanded use of housing vouchers,
tenant management of public housing projects, and sales of
public housing units to tenants. The Congress has already
enacted a major housing bill that endorses housing vouchers
and facilitates the Administration's efforts to encourage
tenant management and public housing ownership. Similarly,
the Commission has endorsed the sale of government loan
assets. The Commission's final report is expected in March
and will cover many more opportunities, including prison
construction, military commissaries, AMTRAK, Naval Petroleum
Reserves, and urban mass transportation. After a careful
review of these proposals, legislation will be developed to
implement the most promising proposals.
To pursue administrative measures within the Executive
branch and implement the findings of the Commission on
Privatization, I have created an Office of Privatization
within the Executive Office of the President. I have given it
the responsibility to investigate and propose privatization
opportunities that can be included in my recommendations for
the Fiscal Year 1989 Budget.
I will recommend that a comprehensive study be conducted
to measure the likely benefits that would occur if we permit
the private sector to perform some functions now performed by
the United States Postal Service and other government
entities.
I will also recommend a series of pilot projects to
determine if privatization is the best way to go in other
government programs, including operation of minimum security
Federal prisons, Federal prison industries, regulatory audits
by the U.S. Customs Service, management of Federal
multiple-use lands by public and private groups, and waste
water treatment facilities funded by Federal grants.
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I am further recommending the direct privatization of all
or some of several existing government programs where the
benefits of privatization are believed to be significant or
where studies have already been completed. Included in this
category are the Naval Petroleum Reserves, AMTRAK, Federal
Crop Insurance, arbitration of tax disputes, government
employee housing, the Railroad Retirement Board, the National
Finance Center, the National Technical Information Service,
the Alaska Power Administration, and the collection of overdue
loans to the Federal government. I will also ask for
substantially expanded authority to allow individuals to use
their private sector credit cards to pay money owed to the
government.
In addition, I have recently promulgated an Executive
order to foster greater contracting out of services currently
provided by the government to private providers, many in
America's vital small business community. Study after study,
many conducted by the General Accounting Office, demonstrate
that savings of between 30 to 40 percent can be achieved by
contracting out government work to private business. If all
agencies took advantage of contracting-out opportunities, the
total savings would amount to $7 billion per year.
2. New Opportunities in Space. Nearly 2 decades
ago, with courage and bold technological innovation, America
pushed back the frontier of space by landing a man on the moon
and safely bringing him back. This breakthrough created
untold opportunities for scientific discovery and commerce and
advanced mankind's age-old dream of exploring space beyond its
planetary home.
If America is to continue its leadership in space, we
must now forge ahead, exploring space's vast frontier and
expanding our free enterprise system to Earth's orbits and
beyond. And we must build our long-term space future on a
sound foundation that will ensure reliable and economical
access to and use of outer space.
I recently adopted an enhanced comprehensive national
space policy. This policy reaffirms America's commitment to
space leadership as a fundamental national objective and
recognizes the importance of both private sector and
governmental space activities in achieving critical national
goals. And while acknowledging the importance of returning
the Space Shuttle to safe, reliable operations, it also
stresses that access to space, so vital to America's security
and prosperity, must never be limited to any single system.
As a matter of special note, my policy also specifically
recognizes the importance of extending the reach of American
private commerce to space and establishes goals to guide both
civil and national security space efforts in achieving
cost-effective, resilient, and reliable means of access to
space.
And I am no less deeply committed to the long-range goal
of expanding human presence and activity beyond earth orbit
and into the solar system, and I invite the Congress to join
with me in endorsing and supporting this new long-term goal.
As the first step, I have directed the National
Aeronautics and Space Administration to begin a systematic
development of space technologies called Project Pathfinder,
which will aid us in deciding where this new adventure should
take us, and when. The funding proposed for Fiscal Year 1989
is $100 million.
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Second, I am asking the Congress to maintain our strong
national commitment to a permanently manned space station.
The Fiscal Year 1989 Budget request includes $1.0 billion to
achieve this goal, along with a request for a 3-year
appropriations commitment from the Congress totalling
$6.1 billion.
Third, I will soon announce a major Commercial Space
Initiative that includes administrative and legislative action
to nurture entrepreneurship in space. By taking advantage of
the private sector's innovative excellence, we can maintain
and extend America's leadership in space.
My initiative will have three goals: (1) promoting a
strong commercial presence in space -- we need the private
sector to begin to lay the infrastructure necessary for
research and manufacturing in space; (2) assuring a highway to
space by building on my previous efforts to promote a strong
private expendable launch vehicle industry; and (3) building
a solid technology and talent base. The engineers and
scientists who will be working in space are in school now. We
must give them the tools and the enthusiasm to do the job
well.
E. Empowering the People to Participate in the
Political Process
Political enfranchisement in America has evolved in the
direction of a more participatory republic. Today any
legislation in this area should open up more participation in
the political process.
1. Removing Government Interference with the
Political Process. The right to free speech and the right to
participate in the democratic process are two of our most
fundamental freedoms. In Buckley v. Valeo, the Supreme Court
held that limits on how individuals spend their own resources
in the political process can violate the First Amendment.
This is a sound principle. We should make sure "campaign
reform" will not have the effect of reducing popular
participation in the political process or impairing
constitutional rights. Today, there are proposals to restrict
certain parts of our electoral process. A more beneficial
reform would be the requirement of full disclosure of all
campaign contributions, including in-kind contributions, and
expenditures on behalf of any electoral activities, including
those in the context of membership communication.
2. Protecting Civil Servants from Political
Pressure. The Hatch Act was passed in 1939 in response to
scandals involving the administration of funds in New Deal
programs. It prohibits Federal civil servants from taking
part in certain partisan political activities, such as
campaigning for public office, participating in party
management, or raising political funds. The Clay Amendments
in the Congress would severely erode these prohibitions.
Although advanced in lofty terms -- "the right of government
workers to participate more fully in the political process" --
their effect would be to politicize the civil service and
reduce public faith in government. Federal workers already
enjoy their democratic right to vote and to express their
political views in a wide variety of other ways.
We do not want to risk a situation in which Federal
employees come to believe that their advancement depends on
espousing particular views, perhaps the political views of
their superiors. Neither should electoral campaigning be
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allowed to mar cooperation between the political appointees of
the President and the civil service establishment, a
cooperation crucial to good government. As I have said in the
past, the Hatch Act should not be changed or repealed.
3. Improving the Civil Service. The past 7 years
have witnessed an increasing commitment by the Nation's
Federal civil service to quality in their work and pride in
their performance. The abilities of this work force, from the
most recently hired clerical worker to the most senior member
of the managerial corps, are ready not only to continue the
effort to serve the American people, but to take that service
to new levels of excellence.
At present, however, the Federal civil service is over-
regulated by a system that discourages employee initiative and
hamstrings government managers with thousands of pages of
restrictive rules and regulations. With the major reforms
encompassed in my proposed Civil Service Simplification Act,
we can provide substantial incentives for top performance,
introducing into our Federal government the classic productive
values of the American workplace: entrepreneurial freedom and
reward for hard work.
VI. TO SECURE THE BLESSINGS OF LIBERTY
It was the need to secure inalienable, God-given rights
from oppression that moved our forefathers to institute a new
government in America. Among these individual rights,
Jefferson wrote, were "Life, Liberty and the pursuit of
Happiness." But, as the Founders of our Republic made clear
in drafting a new Constitution 11 years later, their intention
was not only to secure 1MDerty but the blessings of liberty as
well. To attain these blessings would mean cultivating the
values that sustain a free people. George Washington advised
our Nation in his Farewell Address,
"Of all the dispositions and habits which lead to
political prosperity, religion and morality are
indispensable supports. In vain would that man
claim the tribute of patriotism who should labor
to subvert these great pillars of human happiness,
these firmest props of the duties of men and
citizens. The mere politician, equally with the
pious man, ought to respect and to cherish them.
A volume could not trace all their connections
with private and public felicity."
Following our first President's good counsel, I am leading my
Administration in efforts to shore up the moral foundations of
our individual freedom:
A. Protection of the Unborn
None are more powerless than the unborn. Since the
legalization of abortion-on-demand in 1973, there have been an
estimated 21 million abortions in this country. I am
committed to reducing the number of abortions in this country
and reaffirming life's sacred position in our Nation.
The Congress should pass expeditiously my Human Life
Bill. The first section of the bill contains a finding that
abortion takes the life of a human being and that Roe v. Wade
was wrong not to recognize the humanity of the unborn child.
The second section would enact, on a permanent and
government-wide basis, the Hyde Amendment restriction
prohibiting Federal dollars from going for abortion unless a
mother's life is endangered. In addition, the Congress should
pass the Human Life Amendment.
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At my direction, the Department of Health and Human
Services is about to issue regulations prohibiting the use of
Title X funds (approximately $140 million) for any program
that performs abortion, counsels for abortion, or promotes
abortion through lawsuits, lobbying, or other such activities.
The regulations also require that Title X programs separate
themselves from programs that engage in abortion activities.
It is clear from the legislative record surrounding the
passage of Title X that its purpose, far from promoting
abortion, was one of offering an alternative to abortion and
indeed reducing the number of abortions. For some time the
program as enforced was standing its essential purpose on its
head, effectively promoting abortion instead of reducing the
incidence of abortion as intended by the Congress.
Another loophole often used to circumvent prohibitions on
using Federal funds for abortions is the use of psychiatric
recommendations. Currently the law allows for Federal funding
only when an abortion is necessary to save the life of the
mother. This law reflects the consensus that abortion may be
considered when there is a physical threat to the mother. I
am directing the Secretary of Health and Human Services to
issue regulations that reflect this consensus and make it
clear that only when there is physical danger to the life of
the mother can Federal funds be used for abortion.
In August 1987 I formed an Interagency Task Force on
Adoption that delivered its final report to me on November 13.
I will act to implement the Task Force recommendations and
propose legislation where necessary. Each year over
140,000 children are adopted, yet thousands of childless
families still wait for children to adopt. There are
36,000 children awaiting adoption, of which about 60 percent
are "special needs" children. Many have physical or emotional
handicaps, belong to sibling groups, or are older children;
they are generally more difficult to place.
This Administration will also work with the States to
encourage model legislation that promotes adoption.
California's Pregnancy Freedom of Choice Act, for instance,
allows the State to reimburse licensed nonprofit maternity
homes for the costs of maternity care and other pregnancy
services. Michigan contracts out special needs adoption to
private agencies, reimbursing them for the full cost of
adoption services up to $10,000. These are exemplary efforts
to provide families for children in need of parental love and
care.
B. Religious Liberties
The First Amendment protects the right of Americans to
freely exercise their religious beliefs in an atmosphere of
toleration and accommodation. As I have noted in the past,
certain court decisions have in my view interpreted the First
Amendment so as to restrict, rather than protect, individual
rights of conscience. I have repeatedly affirmed my belief
that school prayer on a voluntary basis is permissible, indeed
desirable, in the public school. In my State of the Union
addresses in 1986 and 1987, I expressed my support for a
constitutional amendment that would make it clear that the
Constitution does not prohibit voluntary prayer in public
schools.
One disturbing development in this area of the law has
been the exclusion of religiously affiliated organizations
from federally funded programs. A recent lower court decision
held unconstitutional my Adolescent Family Life Program
because the program included religious organizations among
those carrying out its implementation. That decision, if
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upheld, would effectively require the government to
discriminate against religious charitable organizations, even
when their participation in a program only serves to further
its legitimate secular purpose. The Department of Justice is
appealing this ruling that I believe to be inconsistent with
the First Amendment. Our forefathers came to this land in
large part to secure the rights to freedom of religion and
individual conscience that they would later establish as
bedrock provisions of our Constitution. We must avoid such
perversion of the First Amendment. Rather, as we prepare for
the 21st century, we must continue to foster the free exercise
of religion that our forefathers understood would provide the
moral foundations for American society..
CONCLUSION
These then are the legislative and administrative
policies that the Administration will pursue in furtherance of
the six purposes for which the American people first ordained
and established our Constitution. They have been carefully
chosen. For obviously not every policy that a President or a
Congress may put forward is compatible with our Constitution,
even though that policy might be popular. In order to secure
the liberty of individuals and political minorities, the
Constitution places a number of carefully considered
restrictions on the Federal government. The Congress does
not, for example, possess a general legislative power, nor the
President the power of decree. The Framers proscribed both as
inconsistent with limited, constitutional government. Thanks
in large measure to their wisdom, America has enjoyed the
blessings of liberty for 2 centuries. It is my belief that
the policies presented in this message will contribute to the
continuing restoration of the Federal government to a sound
constitutional footing and thus preserve these same blessings
for our posterity in the 21st century.
THE WHITE HOUSE,
January 25, 1988.
# # #
RONALD REAGAN
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