Before I became president I realized and was warned that dealing with the federal bureaucracy would be one of the worst problems I would have to face. It has been even worse than I had anticipated. Of all the steps that we can take to make government more efficient and effective, reforming the civil service system is the most important of all.

The civil service reform proposal which I submited last month will return the civil service to some system of reward and incentive for the tens of thousands of superb public servants who want to do a good job for the American people.

This will also give managers a chance to manage. It will reward excellence, good service, dedication, and will protect employes' vital and legitimate rights.

It will also expand the protection against political abuse that employes need in order to do their jobs well, and will make our civil service one of the most dependable and one of the most effective and honest in the whole world.

Nearly everyone in our country will benefit from the civil service reform proposals. For those in private business, it will mean faster government action, less intrusion in the private sector of our economy. For taxpayers, it will mean that we get more for the money that we pay. For those who depend on government for help, it will mean better services to them, quicker, more effective.

And most of all, for the civil service employes, for the government employes, it will mean that they can do their jobs better and more effectively. They only have one life to live, and sometimes in a sacrifical way they want to dedicate their lives to public service, and this will let them do a better job . . . NEUTRON BOMB

The Soviets know and President Brezhnev knows that the neutron weapon is designed to be used against massive and perhaps overwhelming tank forces in the Western and Eastern European areas.

The Soviets, over a period of years, have greatly built up their tank forces and others stronger than have the NATO allies.

The neutron weapons are designed to equalize that inequality, along with many other steps that our country is now taking. The Soviets have no use for neutron weapons, so the offer by Brezhnev to refrain from building the neutron weapons has no significance in the European theater. And he knows this.

We are strengthening NATO in other ways. Ourselves, our NATO allies, will meet here in Washington the last of May with a recommitment, which is already well in progress, for a long-range strengthening of NATO and all its aspects.

But this statement by Brezhnev concerning the neutron weapon has no significance at all . . . MIDEAST PLANE SALES

Secretary Vance and I have been in close communication, both with one another and with leaders in the Congress, for a number of weeks concerning the arms sales package that will be presented to the Congress. It is the only legal way to it.

The Congress will act on those major sales proposals individually to Israel, to Egypt and to Saudi Arabia. Each one is important. Each one completes a commitment that has been made by either me or, even in the case of the Saudis and Israel, our predecessors for these sales.

I look upon them as a package. And if the Congress should accept a portion and reject another, then my intent is to withdraw the sales proposal altogether. But the Congress will not receive nor act on these proposals as a package. They have to act, according to the law, on individual items.

These proposals are in the national interest. I think it is important to our country to meet our commitments. The one that is perhaps the most controversial is the sale of F15s to the Saudi Arabians. This was a promise that was made to the Saudi Arabians in September of 1975 to let them have a choice of F16s or F15s. They want these weapons for defensive purposes.

I recommitted this nation to provide these planes both last year and again this year. And my deep belief is that since in the Middle East our preeminent consideration is the long-range and permanent security and peacefulness for the people of Israel, that to treat the moderate Arabs with fairness and friendship and strengthen their commitment to us in return is in the best interests of our own country and of Israel.

We are negotiating or dicussing these matters with the Congress. But there will be no delay of the sales proposal beyond the point where it can be completed by the time the Congress goes into recess - maybe two or three days, no longer than that. TAX CUT

A $25 billion reduction in taxes on the American people would not be inflationary. It is in my judgement and the best judgement of the economic advisers who work with me, about the right figure. We only have about an 82 percent utilization of our production capacity now. We do not have excessive demand as a cause for inflationary increases in prices of our products.

We have a cycle of wage increases, price increases, that kind of grow on one another, and I don't believe it would be advisable, and I do not intend to change my recommendation that the net between the tax reforms and the tax reductions would be approximately equal to $25 billion . . .

If the Congress should not act in accordance with my request and lower income taxes, then there would be a net increase in taxes, paid by the middle-income groups.

Another factor that has not been adequately publicized is those very people who pay high income taxes, those 20, 25, 30 thousand dollar citizens, having that much income per year, also get better benefits when they retire. So in a way it is kind of an investment for them.

We have a lot of abuses in the system that ought to be eliminated. Last year, for instance, one medical doctor, a surgeon, owns a yacht and he took a $14,000 tax credit, tax exemption, for entertaining other doctors on his yacht. This is legal under the present law. Most American citizens don't have a yacht and when they go for a small pleasure ride, if they do have a small boat, they can't deduct it as an income tax deduction. And when that doctor didn't pay his $14,000 in taxes, other average working American families had to pay his taxes for him.

We have another instance that I recall from the statistics I have read, that one businessman charged off 338 lunches, more than many American families make in all, and the average working American had to pay that guy's taxes for him.

I think that is a gross abuse of the average American family. That is where tax reform comes in.

So tax reduction is important to make sure we don't put an extra tax burden on our people, even counting Social Security. Tax reform is necessary to let our tax code be simple and fair for a change. Both those changes, both those recommendations, are urgently needed.