Seattle, Washington Remarks at the Annual Conference of the U.S. Conference of Mayors.

President and Mayor Richard Carver, Mayor Charles Royer, other distinguished leaders of the cities of our great Nation:

It's a pleasure to be with you. This has been an exciting and a gratifying trip. I've been looking forward to meeting with you for a long time. This is not an easy time in the history of our Nation, and you occupy, perhaps along with the President, some of the most difficult positions in public life.

I tried to think of a story that would illustrate what you and I got into when we took office. I have a favorite story that I've told before about the old man who was arrested for being drunk and setting a bed on fire in a hotel. He came before the judge. The judge accused him, and the man said, "I'm not guilty, Your Honor." He said, "I was drunk, but the bed was on fire when I got in it." [Laughter] I think about that story every now and then when I walk over to the Oval Office early in the morning. And I know you feel the same way, being mayors of our troubled cities, but our dynamic and competent and improving cities.

This morning I want to make a straightforward talk to you and a frank, unvarnished talk, about two things: what we have done together, the fundamental changes that have taken place in our cities the last few years, and the problems which we confront here and now. As we meet, as all of you so well know, there are hard times still for millions of Americans. Although we've been able to add millions of new jobs in the last 3 1/2 years, the recent unemployment figures and the recent inflation figures cause us deep concern.

We know that the impending recession, which has been approaching for several years, almost inevitably has now arrived. Because of the damaging effect of inflation and unemployment, driven by skyrocketing oil prices, our unemployment rate has recently moved up quite rapidly.

I'm deeply and personally concerned about the hardship and the anxiety felt by families who are directly affected by these recessionary trends and the uncertainty for the hard-working and struggling families and about the new trials that this brings to the communities which you represent. But I want to remind you, and I want the Nation to know, that together we have put in place programs which are working to reduce the adverse impact of the recession, to sustain and improve these programs so important to you that care for the poor and the elderly and the afflicted and the unemployed and the troubled cities. You and I will—and I pledge to you—we will fight together to win, and we will not lose this battle.

We know that there are no quick solutions, there are no easy answers, and we must not mislead ourselves or those who listen to our voices. We have to deal with the root causes of inflation and unemployment.

I hope and I pray that the recession will be short and the worst of the unemployment soon behind us. If recession should deepen and unemployment continues to rise unabated, I will work closely with you and we will take other steps which may be necessary.

We will maintain fiscal discipline in Washington, and we will not take action which will refuel inflation. Now, however, we must protect and improve the programs that are being considered by Congress, which you and I have forged together.

Just last week, I reminded Congress that we must exercise constraint to control inflation and I wanted a budget which was balanced, but one which is fair to those who look to the government-to your local governments and to our Federal Government for the lifelines that only government can provide in these hard times for troubled families.

I sent to the Congress the first balanced budget in 12 years. It's a budget that provides for a strong national defense, but it's also one of compassion and rebuilding. You reviewed the budget with me. You helped me make some of the tough decisions. I'm not blaming you for all the decisions that I made in the budget, but I would like to explain very briefly that it does provide for a 4-percent real increase in military spending sustained for the next 5 years. This is essential to strengthen NATO and to strengthen our own country for collective defenses in order to stop and to deter Soviet aggression, which has been exemplified so vividly for all those on Earth in the Soviet invasion of Afghanistan.

Some of you expressed your personal concern to me about defense expenditures and increases, but in spite of your expressions of concern I decided to stand firm because of the overriding need for national security. Above everything else, the number one responsibility on the shoulders of a President is to provide for and to guarantee our Nation's security, and through it to preserve peace for ourselves and peace for people around the world.

We are strong. We are growing stronger. We have nothing to fear. Our Nation is at peace. We are working daily to bring peace to others. These considerations are paramount. But I also stood firm with the Congress for what might be called the domestic security of our Nation. Within the balanced budget, we provided for a strong America on housing; a nation that's strong on jobs, strong on economic development, strong on public transportation, strong on fiscal aid, strong on social security, strong on the caring for the afflicted and the old and the poor. We must have a military budget, with steady, predictable and sustained growth, for ourselves and to set an example for others, both in expenditures this year and next year, and also an authority to make commitments which will result in expenditures later, when our defense equipment is delivered.

There must be a proper commitment along with this for government efficiency; for the prompt and equitable collection of taxes; for foreign aid; and for adequate domestic programs. As mayors, you have equivalent, difficult budget decisions to make. We share a lot in this common responsibility—a little difference in perspective, but there is no way to separate your responsibilities from mine, nor to separate my responsibilities from you.

I'm also fighting to bring down inflation. Early in March I announced to the Nation, after consulting with you, an anti-inflation program to remove the cruel and the heavy burden on those who can least afford it. And this should not be forgotten by those who are concerned about the least among us. My program will bring down price increases and interest rates, and this will help everyone. But it's a program designed especially to help old people on fixed incomes, for the poor who must sometimes choose between a warm home and a warm meal, and for communities and neighborhoods that are struggling to restore their own vitality and to provide a better quality of life for those who live within them.

High inflation has robbed America for the last 12 years, and we simply must do everything we can to stop it. As partners we must not waver in our struggle. We must continue to provide jobs, permanent jobs. We must keep wages and prices reasonable. We must build a permanent energy base which will prevent unfriendly foreign oil producers from creating crises in our own economy and in our own lives and, indeed, threatening our Nation's security and helping to shape, against our will, our Nation's destiny.

I'm working with you today, not simply because of our immediate problems which challenge both our compassion and our realism but also because of the fundamental changes which will be made and which we can help to make for the 1980's. The decisions that I've described to you on defense, energy, self-discipline in Washington, will be carried out. You need to understand them. But this need not provide any obstacle between us in working for the alleviation of suffering, the caring for the poor, the rebuilding of our cities, or providing a better life for the same people that you represent, because all of your constituents are my constituents, and they look to us jointly for responsibility and for leadership in facing the future not with cowardice or fear or trepidation or division or selfishness or concern, but with a common commitment, based on the strength of our country, the idealism and the foresight, the natural resources, the human resources, the unity, and the courage of the American people.

Four years ago I came before you. I studied your agenda beforehand. I came as a candidate, and I later proposed an ambitious urban policy based on your agenda, and pledged to build a partnership with the mayors, with the private sector, and with the Federal Government. In order to reverse the decline that was so evident 4 years ago and the quality of American cities, you've helped me; and I have kept that pledge to you.

Since I took office we've had a net increase of more than 8 million jobs in this country, the greatest expansion of jobs in the history of any administration, of any President who's ever served. A million of those jobs went to black Americans. Another million of those jobs, net increase, went to Americans who speak Spanish. More minorities, more women, more young people are at work today than ever before.

I'm not here to brag because this is obviously not enough. But we can be proud of the solid job growth in the last 3 years.

Within a year of taking office, again working very closely with you, I proposed the Nation's first urban policy to make sense out of the confusion that had been existing among Federal agencies in their inadequate interrelationship with you and your predecessors in the cities for which you are so deeply concerned and directly responsible.

I proposed that we reinsert the lifeblood and the hope and confidence in cities, many of which were despairing and rapidly deteriorating. And I proposed, in addition to government, that we bring the private sector back into the cities.

When I took office, the Federal Government was spending $60 million a year to bring private investment to cities. This year, we will spend more than $1.8 billion—a 30-fold increase in just 3 years, to encourage private investment in the cities of our country. This is encouraging the investment by the private sector of $6 billion-not government money—and it creates over 400,000 new jobs and it also brings in to you more than $100 million in increased property taxes, because the property is worth more, and the people are making the profits to pay the taxes with.

We put in place the largest public jobs effort in our history, and we made sure that it concentrated on the hardcore unemployed. This has not previously been done.

CETA, this year and next year, is not only twice its total size of 3 years ago, it serves four times the number of disadvantaged people. At this moment, CETA jobs—95 percent of them—go to the disadvantaged.

We are launching a new, expanded nationwide effort against youth unemployment. I proposed $2 billion to the Congress above and beyond the $4 billion we presently spend to train, to hire, and to place young workers in permanent jobs, almost all of which will be in the private sector.

The Department of Labor and the Department of Education are working harmoniously, getting ready to implement this program. The money for it has been approved by the House and Senate in their budget deliberations. And the legislation is now making good progress through the House. Nearly three times the total amount spent on youth unemployment and training when I took office, will be spent when this program is effectuated this coming year.

Right now, there will be a million summer youth jobs, 425,000 year-round jobs for young people. And I want to tell you that these jobs will be allotted to meet the needs of the most needy in your communities. And I need for you as mayors to continue to make these programs effective and efficient in dealing with the hardships which we face together.

When cities faced massive budget crises, you came to me, and we doubled countercyclical aid, and we strongly supported local revenue sharing. For New York, as a special example, we replaced a punitive Federal policy with one that has helped to put the city back on its feet.

All of our problems have not been solved. All of New York City's problems have not been solved. All of your problems have not been solved. But we've placed in effect a good, intimate, permanent working relationship, adequately financed, accepted now by the American people, which I believe will be not only permanent but a base on which we can make much more exciting progress in the years to come.

Housing is a problem for you and for all of us. In the 2 years before I took office 15,000 subsidized housing units were started, 15,000. In the 2 years after that 265,000 were started, and hundreds of thousands more are on the way. This coming year, we have in our budget proposals 400,000 federally assisted housing units, a 25-fold increase within a 4-year period.

This has all been done with adequate consideration given to fiscal discipline in Washington and to reducing Federal deficits and in laying the groundwork for dealing with the threat of inflation and to accommodate the special challenge of energy which permeates my consciousness when I deal with any aspect of the American economy.

You asked for new programs on city parks and recreation and Community Development Block Grants. We put them into effect. We've expanded Federal aid to education by 75 percent, and we've targeted the neediest school districts, and there's hardly a college-age child now in this Nation who's qualified to do college work that cannot have a college education financed by some means. We've committed $50 billion in this current decade for urban mass transit, more than three times the amount that was spent in the 1970's.

Well, to summarize what I've said so far: In the last 3 years where there was a Federal hodge-podge, there's now a good, calm, solid, routine working relationship between the Federal Government and the local officials of our Nation. We have a coordinated, comprehensive policy. Where government formerly ignored private development, we now involve businesses closely. Where a city's problem in the past was the mayor's alone, it's now a problem that we share together. In short, we have stopped Federal neglect of our cities, and we can see the hard, tangible evidence of urban progress all around us. That's the achievement of a good partnership that we've formed, and we can all afford to be very proud of it. We have a lot left to do.

For the past 16 months we've seen the world price of oil go up an average of 10 percent a month. This has had a devastating impact on the economy of our own Nation and on the economy of many other nations. Some of them spend more on imported oil than their total national exports, and, of course, this drives up the price of everything. It's very difficult to accommodate it. This year we'll spend $90 billion in foreign countries to buy their oil. Because of the rapidly increasing price—it's much more than doubled—this is $30 billion more than we spent in 1979. It's nine times more than we spent on the total CETA program, which is about $10 billion. Just think of all the jobs that could be provided, all the investments that could be created, the improvement of American productivity, a stronger nation, a more confident country—if we can be successful in holding down oil imports.

Twice in the last 6 years we've seen the OPEC oil producers, with their price increases skyrocketing, drive inflation up at a precipitous rate, and then plunged us into recession. Unless we act as a nation, this same process could be repeated in the future, because of excessive dependence on foreign oil.

You all remember in April of 1977, my first few weeks in office, that I went to the country and to the Congress, talking about the moral equivalent of war. We expected then that the world demand would equal the world supply of oil in 1983 or '84 or '85. It happened in 1979, and that's one of the reasons that oil prices have skyrocketed, and the world has been afflicted because of it. Fortunately, now, after 3 years, too long a delay, we have nearly completed our Nation's first energy policy: to build a solid energy base for the years and the decades to come. There are only two ways to cut down on oil imports: one is to conserve what we have, to eliminate waste; and the other is to produce more energy in our own country. There are no other ways.

We have made good progress. After years of constantly increased oil imports every year, last year gasoline use went down 5 percent. So far this year, oil imports are down 12 percent below 1979. That's a saving every day in oil imports of 1 million barrels.

We are beginning to succeed in energy conservation and we now have approved by the Congress a windfall profits tax on the oil companies that can provide new and exciting opportunities for us in producing more energy, larger in scope, larger in size than the space program, the Marshall plan that rebuilt Europe, and the entire interstate highway system combined. Oil, natural gas, yes. Coal, yes. Shale, yes. Growing crops, energy from the Sun.

The complexity of this opportunity and the excitement of this opportunity is almost overwhelming and has not yet sunk into the consciousness of America, what it will mean to your city, to your colleges and schools, research, development, technology, jobs, better life, better homes, more security. It's been a difficult challenge the last 3 1/2 years, dealing with the Congress, overcoming an established oil lobbying effect that was rooted so deeply on Capitol Hill, and having the consumers and you and others come forward and say, "Let's be fair for a change." But this accomplishment is notable, and we are now waiting to derive the benefits from it.

We've had to make some unpopular decisions in dealing with these tremendous challenges, both you and I. But that's something that every responsible public executive must do, as you know so well.

So, we are turning the tide on energy, and we're beginning to turn the tide on inflation. The two are intimately related. Interest rates are down sharply. The last time I met with a large group of mayors, you could not sell municipal bonds for any price. Lately, we've seen interest rates dropping, prime rate dropping an average of 1 percent per week. And I predict to you that during this summer you will see an equivalent sharp reduction in the inflation rate. This will let those consumers and others who wanted to buy a home or buy an automobile or buy a refrigerator or stove or television set now do so as the benefits of these lower interest rates and lower inflation rates permeate the consciousness of our Nation, and as they buy a new refrigerator this will mean that workers who produce those goods will be back on the job. It's going to take a while, but the self-correcting effect of energy discipline and lower interest rates and a lower inflation rate are there to be tapped, to ease the impact of recession, and to forestall a lot of suffering that would have been felt otherwise.

That, combined with the programs that you and I have shaped together to care for the families that are adversely affected by temporary or extended unemployment, will help to reduce the suffering in our country. But that's not enough. We face an additional challenge in the 1980's of building greater productivity into our economy. This is one of the greatest challenges of this decade.

We have the largest economy of any nation in the world. We have the most productive work force, which may be a surprise to you. The American worker produces more than any other worker on Earth, both private and public workers; but we also have the lowest rate of savings on Earth; one of the oldest industrial bases among major economies.

Of the 20 most modern and productive steel plants in the world, not a single one is in the United States. And our productivity advantage over other industrialized nations is narrowing fast. Their rate of increase in productivity is greater than our own.

So, our economic lead, which is a matter of great pride to us, is being reduced. Our workers do need more and more efficient tools. We need a better transportation system. We need new technology to tap our tremendous human and natural resources. We need permanent and productive jobs for the millions of Americans who are still out of work. We need a healthy private sector to provide these jobs. I'm determined to restore economic leadership without turning our backs on the poor or the elderly or the afflicted or the deprived, or those who've suffered too long from the effects of racial or other discrimination.

I reject the easy promise that massive tax cuts and arbitrary roll-backs of government programs are the answer. Such facile, quick fixes should be recognized as political double-talk and ideological nonsense.

There is no way for us to build prosperity in this country without justice and compassion. We cannot build a strong nation without demonstrably caring for those less fortunate than are we. But, at the same time, we cannot ignore the reality of rebuilding our economy, because as we control inflation, as we control interest rates, as we rebuild our economy, we directly help the poor and those who suffer most from recession.

We're all in it together. None of us can claim that it's someone else's problem. You cannot say that a strong national defense is the President's problem—not mine. And I cannot say that a deteriorating block in the central part of your city is your problem, not mine.

Together we have made good, solid progress the last 3 1/2 years, and now we face an equally difficult and exciting and challenging continuing job of improving and strengthening the entire economy, sustain the partnership that we've forged, to continue to face our problems without flinching, to keep our commitments to the less fortunate, to deal with the energy question, to maintain a strong defense, and to revive the spirit of great enterprise which has always been a characteristic of bold and exciting Americans.

When future generations look back, I want them to see a people who built for the future, you and I; who turned the tides of adversity, you and I; and who left something good and lasting behind us. I want to make that future come true, and I ask you to join with me in this great undertaking that will transform the lives for the better, of those who live in the greatest nation on Earth.

Thank you very much.