Following are excepts from the prepared text of President Reagan's economic address to Congress:

Only a month ago, I was your guest in this historic building, and I pledged to you my cooperation in doing what is right for this nation we all love so much.

I am here tonight to reaffirm that pledge and to ask that we share in restoring the promise that is offered to every citizen by this, the last, best hope of man on earth.

All of us are aware of the punishing inflation which has, for the first time in some 60 years, held to double-digit figures for two years in a row. Interest rates have reached absurd levels of more than 20 percent and over 15 percent for those who would borrow to buy a home. All across this land, one can see newly-built homes standing vacant, unsold because of mortgage interest rates.

Almost 8 million Americans are out of work. These are people who want to be productive. But as the months go by, despair dominates their lives. The threats of layoff and unemployment hang over other millions, and all who work are frustrated by their inability to keep up with inflation. 'A Trillion Dollars'

One worker in a Mideast city put it to me this way:

"I'm bringing home more dollars than I thought I could ever earn, but I seem to be getting worse off."

And he is.Not only have hourly earnings of the American worker, after adjusting for inflation, declined 5 percent over the past five years, but in these five years, federal personal taxes for the average family have increased 67 percent.

We can no longer procrastinate and hope things will get better. They will not. If we do not act forcefully, and now, the economy will get worse.

Can we who man the ship of state deny it is somewhat out of control? Our national debt is approaching $1 trillion. A few weeks ago, i called such a figure . . . incomprehensible. And I've been trying ever since to think of a way to illustrate how big a trillion really is.

The best I could come up with is that if you had a stack of $1,000 bills in your hand only four inches high you'd be a millionaire. A trillion dollars would be a stack of $1,000 bills 67 miles high. . . .

Adding to our troubles is a mass of regulations imposed on the shop-keeper, the farmer, the craftsman, professionals and major industry that is estimated to add $100 billion to the price of things we buy and reduces our ability to produce. . . .

I have painted a grim picture, but I think I planned it accurately. It is within our power to change this picture, and we can act with hope. There is nothing wrong with our internal strengths. There has been no breakdown in the human, technological and natural resources upon which the economy is built.

Based on this confidence in a system which has never failed us -- but which we have failed through a lack of confidence and sometimes through a belief we could fine-tune the economy and get it turned to our liking -- I am proposing a comprehensive four-part program. . . .

This plan is aimed at reducing the growth in government spending and taxing reforming and elminating regulations which are unnecessary and unproductive or counterproductive and encouraging a consistent monetary policy aimed at maintaining the value of the currency. . . .

It is important to note that we are only reducing the rate of increase in taxing and spending. We are not attempting to cut either spending or taxing to a level below that which we presently have. This plan will get our economy moving again, increase productivity growth and thus create the jobs our people must have.

I am asking that you join me in reducing direct federal spending by $41.4 billion in fiscal year 1982, along with $7.7 billion in user fees and off-budget savings for a total savings of $49.1 billion. This will still allow an increase of $40.8 billion over 1981 spending. . . .

We will continue to fulfill the obligations that spring from our national conscience. Those who through no fault of their own must depend on the rest of us, the poverty stricken, the disabled, the elderly, all those with true need, can rest assured that the social safety net of programs they depend on are exempt from any cut. . . . Program Conversions

But government will not continue to subsidize individuals or particular business interest where real need cannot be demonstrated. And while we will reduce some subsides to regional and local governments, we will at the same time convert a number of categorical grant programs into block grants to reduce wasteful administrative overhead and to give local government entities and states more flexibility and control. We call for an end to duplication in federal program and reform of those which are not cost effective. . . .

There are a number of subsidies to business and industry that I believe are unnecessary. Not because the activities being subsidized aren't of value but because the marketplace contains incentives enough to warrant continuing these activities without a government subsidy.

One such subsidy is the Department of Energy's synthetic fuels program. We will continue support of research leading to development of new technologies and more independence from foreign oil, but we can save at least $3.2 billion by leaving to private industry the building of plants to make liquid or gas fuels from coal.

We are asking that another major business subsidy, the Export-Import Bank loan authority, be reduced by one-third in 1982. We are doing this because the primary beneficiaries of taxpayer funds in this case are the exporting companies themselves -- most of them profitable corporations.

This brings me to a number of other lending programs in which government makes low-interest loans, some of them for an interest rate as low as 2 percent.

What has not been very well understood is that the Treasury Department has no money of its own. It has to go into the private capital market and borrow the money to provide those loans. So, in this time of excessive interest rates, the government finds itself borrowing at an interest rate several times as high as the interest it gets back from those it lends money to. And this difference, of course, is paid by your constituents -- the taxpayers.

By terminating the Economic Development Administration, we can save hundreds of millions of dollars in 1982 and billions more over the next few years. There is a lack of consistent and convincing evidence that EDA and its regional commissions have been effective in creating new jobs. . . .

The food stamp program will be restored to its original purpose, to assist those without resources to purchase sufficient nutritional food. We will, however, save $1.8 billion in fiscal year 1982 by removing from eligibility those who are not in real need or who are abusing the program. Despite this reduction, the program will be budgeted for more than $10 billion.

We will tighten welfare and give more attention to outside sources of income when determining the amount of welfare an individual is allowed. This, plus strong and effective work requirements, will save $520 million next year. . . . Increases for Defense

The Department of Defense . . . is the only department in our entire program that will actually be increased over the present budgeted figure. But even here, there was no exemption. The Department of Defense came up with a number of cuts which reduced the budget increase needed to restore our military balance.

These measures will save $2.9 billion in 1982 outlays, and by 1986 a total of $28.2 billion will have been saved -- or perhaps I should say would have been made available for the necessary things we must do. The aim will be to provide the most effective defense for the lowest possible cost.

I believe my duty as president requires that I recommend increases in defense spending over the coming years. . . .

Marching in lock step with the whole program of reductions in spending is the equally important program of reduced tax rates. Both are essential if we are to have economic recovery. . . .

Our proposal is for a 10 percent across-the-board cut every year for three years in the tax rates for all individual income taxpayers, making a total tax cut of 30 percent. This three-year reduction will also apply to the tax on unearned income leading toward . . . elimination of the present differential between the tax on earned and unearned income. No Shift of Wealth

The effective starting date for these 10 percent personal income tax rate reductions will be July. . . .

Unlike some past tax "reforms," this is not merely a shift of wealth between different sets of taxpayers. This proposal for an equal reduction in everyone's tax rates will expand our national prosperity, enlarge national incomes and increase opportunities for all Americans. . . .

The other part of the tax package is aimed directly at providing business and industry with the capital needed to modernize and engage in more research and development. This will involve an increase in depreciation allowances, and this part of our tax proposal will be retroactive to Jan. 1. . . .

I'm well aware that there are many other desirable tax changes, such as indexing the income tax brackets to protect taxpayers against inflation. There is the unjust discrimination against married couples if both are working and earning; tuition tax credits; the unfairness of the inheritance tax, especially to the family-owned farm and family-owned business and a number of others.

But our program for economic recovery is so urgently needed to begin to bring down inflation that I am asking you to act on this plan first and with great urgency. Then I pledge I will join with you in seeking these additional tax changes at the earliest date possible.

American society experienced a virtual explosion in government regulation during the past decade. Between 1970 and 1979, expenditures for the major regulatory agencies quadrupled, the number of pages published annually in the Federal Register nearly tripled and the number of pages in the Code of Federal Regulations increased by nearly two-thirds. . . .

We have no intention of dismantling the regulatory agencies -- especially those necessary to protect the environment and to assure public health and safety. However, we must come to grips with inefficient and burdensome regulations. . . . We will eliminate those regulations that are unproductive and unnecessary by executive order where possible and cooperate fully with you on those that require legislation.

The final aspect of our plan requires a national monetary policy which does not allow money growth to increase consistently faster than the growth of goods and services. To curb inflation, we need to slow the growth in our money supply. . . .

This, then, is our proposal.

I do not want it to be simply the plan of my administration -- I am here tonight to ask you to join me in making it our plan. Together, we can embark on this road not to make things easy but . . . better.

Our social, political and cultural, as well as our economic institutions can no longer absorb the repeated shocks that have been dealt them over the past decades. Can we do the job? The answer is yes. But we must begin now.

We are in control here. There is nothing wrong with America that together we can't fix. I'm sure there will be some who will raise the familiar old cry, "Don't touch my program -- cut somewhere else."

I hope I've made it plain that our approach has been evenhanded, that only the programs for the truly deserving needy remain untouched.

The question is, are we simply going to go down the same path we've gone down before -- carving out one special program here and another special program there? I don't think that is what the American people expect of us. More important, I don't think that is what they want. They are ready to return to the source of our strength. . . . Day of Reckoning?

I would direct a question to those who have already an unwillingness to accept such a plan. Have they an alternative which offers a greater chance of balancing the budget, reducing and eliminating inflation, stimulating the creation of jobs and reducing the tax burden? And, if they haven't, are they suggesting we can continue on the present course without coming to a day of reckoning?

If we don't do this, inflation and a growing tax burden will put an end to everything we believe in and our dreams for the future. . . .

True, it will take time for the favorable effects of our proposal to be felt. So we must begin now.

The people are watching and waiting. They don't demand miracles. They do expect us to act. Let us act together.