Speech Transcript:

 Thank you very much. Mr. Speaker, Mr. President, distinguished
members of Congress, honored guests and fellow citizens.

May I congratulate all of you who are members of this historic 100th
Congress of the United States of America. In this 200th anniversary
year of our Constitution, you and I stand on the shoulders of giants
-- men whose words and deeds put wind in the sails of freedom.

However, we must always remember that our Constitution is to be
celebrated not for being old, but for being young -- young with the
same energy, spirit, and promise that filled each eventful day in
Philadelphia's State House. We will be guided tonight by their acts;
and we will be guided forever by their words.

Now, forgive me, but I can't resist sharing a story from those
historic days. Philadelphia was bursting with civic pride in the
spring of 1787, and its newspapers began embellishing the arrival of
the Convention delegates with elaborate social classifications.

Governors of states were called "Excellency." Justices and
Chancellors had reserved for them "Honorable" with a capital "H." For
Congressmen, it was "honorable" with a small "h." And all others were
referred to as "the following respectable characters." (Laughter.)

Well, for this 100th Congress, I invoke special Executive powers to
declare that each of you must never be titled less than Honorable
with a capital "H." (Applause.) Incidentally, I'm delighted you're
celebrating the 100th birthday of the Congress. It's always a
pleasure to congratulate someone with more birthdays than I've had.
(Laughter.)

Now, there's a new face at this place of honor tonight. And please
join me in warm congratulations to the Speaker of the House, Jim
Wright. (Applause.) Mr. Speaker, you might recall a similar situation
in your very first session of Congress, 32 years ago. Then, as now,
the Speakership had changed hands and another great son of Texas, Sam
Rayburn -- "Mr. Sam" -- sat in your chair. I cannot find better words
than those used by President Eisenhower that evening. He said, "We
shall have much to do together; I am sure that we will get it done
and that we shall do it in harmony and goodwill." (Applause.)

Tonight, I renew that pledge. To you, Mr. Speaker, and to Senate
Majority Leader Robert Byrd, who brings 34 years of distinguished
service to the Congress, may I say: though there are changes in the
Congress, America's interests remain the same. And I am confident
that, along with Republican leaders Bob Michel and Bob Dole, this
Congress can make history. (Applause.)

Six years ago, I was here to ask the Congress to join me in America's
New Beginning. Well, the results are something of which we can all be
proud. Our inflation rate is now the lowest in a in a quarter of a
century.

The prime interest rate has fallen from the 21 and a half percent the
month before we took office to seven and a half percent today, and
those rates have triggered the most housing starts in eight years.

The unemployment rate -- still too high -- is the lowest in nearly
seven years, and our people have created nearly 13 million new jobs.
Over 61 percent of everyone over the age of 16, male and female, is
employed the highest percentagc on record.

Let's roll up our sleeves and go to work, and put America's economic
engine at full throttle. (Applause.)

We can also be heartened by our progress across the world. Most
important, America is at peace tonight, and freedom is on the march.
And we've done much these past years to restore our defenses, our
alliances, and our leadership in the world. (Applause.) Our sons and
daughters in the services once again wear their uniforms with pride.

But though we've made much progress, I have one major regret. I took
a risk with regard to our action in Iran. It did not work, and for
that I assume full responsibility.

The goals were worthy. I do not believe it was wrong to try to
establish contacts with a country of strategic importance or to try
to save lives. And certainly it was not wrong to try to secure
freedom for our citizens held in barbaric captivity. (Applause.) But
we did not achieve what we wished, and serious mistakes were made in
trying to do so. We will get to the bottom of this, and I will take
whatever action is called for.

But in debating the past (applause) -- in debating the past, we must
not deny ourselves the successes of the future. Let it never be said
of this generation of Americans that we became so obsessed with
failure that we refused to take risks that could further the cause of
peace and freedom in the world. (Applause.)

Much is at stake here, and the nation and the world are watching --
to see if we go forward together in the national interest, or if we
let partisanship weaken us.

And let there be no mistake about American policy: we will not sit
idly by if our interests or our friends in the Middle East are
threatened, nor will we yield to terrorist blackmail.

And now, ladies and gentlemen of the Congress, why don't we get to
work? (Applause.)

I am pleased to report that, because of our efforts to rebuild the
strength of America, the world is a safer place. Earlier this month,
I submitted a budget to defend America and maintain our momentum to
make up for neglect in the last decade. Well, I ask you to vote out a
defense and foreign affairs budget that says "yes" to protecting our
country. While the world is safer, it is not safe.

Since 1970, the Soviets have invested $500 billion more on their
military forces than we have. Even today, though nearly one in three
Soviet families is without running hot water, and the average family
spends two hours a day shopping for the basic necessities of life,
their government still found the resources to transfer $75 billion in
weapons to client states in the past five years -- clients like Syria,
Vietnam, Cuba, Libya, Angola, Ethiopia, Afghanistan, and Nicaragua.

With 120,000 Soviet combat and military personnel and 15,000 military
advisers in Asia, Africa, and Latin America, can anyone still doubt
their single-minded determination to expand their power? Despite
this, the Congress cut my request for critical U.S. security
assistance to free nations by 21 percent this year, and cut defense
requests by $85 billion in the last three years. (Applause.)

These assistance programs serve our national interests as well as
mutual interests, and when the programs are devastated, American
interests are harmed. My friends, it's my duty as President to say to
you again tonight that there is no surer way to lose freedom than to
lose our resolve. (Applause.)

Today, the brave people of Afghanistan are showing that resolve. The
Soviet Union says it wants a peaceful settlement in Afghanistan, yet
it continues a brutal war and props up a regime whose days are
clearly numbered. We are ready to support a political solution that
guarantees the rapid withdrawal of all Soviet troops and genuine
self-determination for the Afghan people.

In Central America, too, the cause of freedom is being tested. And
our resolve is being tested there as well. Here, especially, the
world is watching to see how this Nation responds.

Today, over 90 percent of the people of Latin America live in
democracy. Democracy is on the march in Central and South America.
Communist Nicaragua is the odd man out -- suppressing the Church, the
press, and democratic dissent and promoting subversion in the region.
We support diplomatic efforts, but these efforts can never succeed if
the Sandinistas win their war against the Nicaraguan people.

Our commitment to a Western Hemisphere safe from aggression did not
occur by spontaneous generation on the day that we took office. It
began with the Monroe Doctrine in 1823 and continues our historic
bipartisan American policy. Franklin Roosevelt said we "are
determined to do everything possible to maintain peace on this
hemisphere." President Truman was very blunt: "International
communism seeks to crush and undermine and destroy the independence
of the Americans. We cannot let that happen here." And John F.
Kennedy made clear that "Communist domination in this hemisphere can
never be neqotiated." (Applause.)

Some in this Congress may choose to depart from this historic
commitment, but I will not. (Applause.)

This year we celebrate the second century of our Constitution. The
Sandinistas just signed theirs two weeks ago -and then suspended it.
We won't know how my words tonight will be reported there, for one
simple reason: there is no free press in Nicaragua.

Nicaraguan freedom fighters have never asked us to wage their battle,
but I will fight and effort to shut off their lifeblood and consign
them to death, defeat, or a life without freedom. There must be no
Soviet beachhead in Central America. (Applause.)

You know, we Americans have always preferred dialogue to conflict,
and so we always remain open to more constructive relations with the
Soviet Union. But more responsible Soviet conduct around the world is
a key element of the U.S.-Soviet agenda. Progress is also required on
the other items of our agenda as well real respect for human rights,
and more open contacts between our societies, and, of course, arms
reduction.

In Iceland last October, we had one moment of opportunity that the
Soviets dashed because they sought to cripple our Strategic Defense
Initiative -- SDI. I wouldn't let them do it then. I won't let them
do it now or in the future. (Applause.) This is the most positive and
promising defense program we have undertaken. It's the path for both
sides -- to a safer future; a system that defends human life instead
of threatening it. SDI will go forward.

The United States has made serious, fair, and far-reaching proposals
to the Soviet Union, and this is a moment of rare opportunity for
arms reduction. But I will need, and American negotiators in Geneva
will need Congress' support. Enacting the Soviet negotiating position
into American law would not be the way to win a good agreement.
(Applause.) So I must tell you in this Congress I will veto any
effort that undercuts our national security and our negotiating
leverage. (Applause.)

Now, today, we also find ourselves engaged in expanding peaceful
commerce across the world. We will work to expand our opportunities
in international markets through the Uruquay round of trade
negotiations and to complete an historic free trade arrangement
between the world's two largest trading partners -- Canada and the
United States.

Our basic trade policy remains the same: we remain opposed as ever to
protectionism because America's growth and future depend on trade. But
we would insist on trade that is fair and free. We are always willing
to be trade partners but never trade patsies. (Applause.)

Now from foreign borders, let us return to our own because America in
the world is only as strong as America at home.

This lOOth Congress has high responsibilities. I begin with a gentle
reminder that many of these are simply the incomplete obligations of
the past. The American people deserve to be impatient because we do
not yet have the public house in order.

We've had great success in restoring our economic integrity, and
we've rescued our nation from the worst economic mess since the
Depression.

But there's more to do. For starters, the federal deficit is
outrageous. (Applause.)

For years I've asked that we stop pushing onto our children the
excesses of our government. (Applause.) And what the Congress finally
needs to do is pass a constitutional amendment that mandates a
balanced budget -- (applause) and forces government to live within
its means. States, cities, and the families of America balance their
budgets. Why can't we? (Applause.)

Next -- the budget process is a sorry spectacle. (Applause.) The
missing of deadlines and the nightmare of monstrous continuing
resolutions packing hundreds of billions of dollars of spending into
one bill must be stopped. (Applause.)

We ask the Congress, once again: Give us the same tool that 43
Governors have -- a line-item veto so we can carve out the
boondoggles and pork -- (applause) -- those items that would never
survive on their own. I will send the Congress broad recommendations
on the budget, but first I'd like to see yours. Let's go to work and
get this done together. (Applause.)

But now, let's talk about this year's budget. Even though I have
submitted it within the Gramm-Rudman-Hollings deficit reduction
target, I have seen suggestions that we might postpone that
timetable. Well, I think the American people are tired of hearing the
same old excuses. (Applause.) Together, we made a commitment to
balance the budget: now, let's keep it. (Applause.)

As for those suggestions that the answer is higher taxes, the
American people have repeatedly rejected that shopworn advice. They
know that we don't have deficits because people are are taxed too
little; we have deficits because big government spends too much.
(Applause.)

Now, next month, next month, I'll place two additional reforms before
the Congress.

We've created a welfare monster that is a shocking indictment of our
sense of priorities. Our national welfare system consists of some 59
major programs and over 6,000 pages of federal laws and regulations
on which more than $132 billion was spent in 1985.

I will propose a new national welfare strategy -- a program of
welfare reform through state-sponsored, community-based demonstration
projects. This is the time to reform this outmoded social dinosaur and
finally break the poverty trap. Now, we will never abandon those who,
through no fault of their own, must have our help. But let us work to
see how many can be freed from the dependency of welfare and made
self-supporting, which the great majority of welfare recipients want
more than anything else. (Applause.)

Next, let us remove a financial specter facing our older Americans --
the fear of an illness so expensive that it can result in having to
make an intolerable choice between bankruptcy and death. I will
submit legislation shortly to help free the elderly from the fear of
catastrophic illness. (Applause.)

Now, let's turn to the future.

It's widely said that America is losing her competitive edge. Well,
that won't happen if we act now. How well prepared are we to enter
the 21st century? In my lifetime, America set the standard for the
world. It is now time to determine that we should enter the next
century having chieved a level of excellence unsurpassed in history.

We will achieve this first, by guaranteeing that government does
everything possible to promote America's ability to compete. Second,
we must act as individuals in a quest for excellence that will not be
measured by new proposals or billions in new funding. Rather, it
involves an expenditure of American spirit and just plain American
grit.

The Congress will soon receive my comprehensive proposals to enhance
our competitiveness -- includinq new science and technology centers
and strong new funding for basic research. (Applause.)

The bill will include legal and regulatory reforms and weapons to
fight unfair trade practices. Competitiveness also means giving our
farmers a shot at participating fairly and fully in a changing world
market.

Preparing for the future must begin, as always, with our children.

We need to set for them new and more rigorous goals. We must demand
more of ourselves and our children by raising literacy levels
dramatically by the year 2000. Our children should master the basic
concepts of math and science, and let's insist that students not
leave high school until they have studied and understood the basic
documents of our national heritage. (Applause.)

There's one more thing we can't let up on. Let's redouble our
personal efforts to provide for every child a safe and drug_free
learning environment. (Applause.) If our crusade against drugs
succeeds with our children, we will defeat that scourge all over the
country.

Finally, let's stop suppressing the spiritual core of our national
being. Our nation could not have been conceived without divine help.
Why is it that we can build a nation with our prayers but we can't
use a schoolroom for voluntary prayer? (Applause.) The lOOth Congress
of the United States should be remembered as the one that ended the
expulsion of God from America's classrooms. (Applause.)

The quest for excellence into the 21st century begins in the
schoolroom but must go next to the workplace. More than 20 million
new jobs will be created before the new century unfolds, and, by
then, our economy should be able to provide a job for everyone who
wants to work.

We must also enable our workers to adapt to the rapidly changing
nature of the workplace, and I will propose substantial new federal
commitments keyed to re-training and Job mobility.

Over the next few weeks, I will be sending the Congress a complete
series of these special messages -- on budget reform, welfare reform,
competitiveness, including education, trade, worker training and
assistance, agriculture, and other subjects.

The Congress can give us these tools, but to make these tools work,
it really comes down to just beinq our best, and that is the core of
American greatness.

The responsibility of freedom presses us towards higher knowledge
and, I believe, moral and spiritual greatness. Through lower taxes
and smaller government, government has its ways of freeing people's
spirits. But only we, each of us, can let the spirit soar against our
own individual standards. Excellence is what makes frcedom ring. And
isn't that what we do best?

We're entering our third century now, but it's wrong to judge our
nation by its Years. The calendar can't measure America because we
were meant to be an endless experiment in freedom with no limit to
our reaches, no boundaries to what we can do, no end point to our
hopes.

The United States Constitution is the impassioned and inspired
vehicle by which we travel through history. It grew out of the most
fundamental inspiration of our existence: that we are here to serve
Him by living free -- that living free releases in us the noblest of
impulses and the best of our abilities. That we would use these gifts
for good and generous purposes and would secure them not just for
ourselves, and for our children, but for all mankind. (Applause.)

Over the years -- I won't count if you don't nothing has been so
heartwarming to me as speaking to America's young. And the little
ones especially so fresh-faced and so eager to know -well, from time
to time I've been with them, they will ask about our Constitution,
and I hope you Members of Congress will not deem this a breach of
protocol if you'll permit me to share these thoughts again with the
young people who might be listening or watching this evening.

I have read the constitutions of a number of countries including the
Soviet Union's. Now some people are surprised to hear that they have
a constitution, and it even supposedly grants a number of freedoms to
its people. Many countries have written into their constitution
provisions for freedom of speech and freedom of assembly. Well, if
this is true, why is the Constitution of the United States so
exceptional?

Well, the difference is so small that it almost escapes you - but
it's so great it tells you the whole story in just three words: We
the people. In those other constitutions, the government tells the
people of those countries what they are allowed to do. In our
Constitution, we the people tell the government what it can do and
that it can do only those things listed in that document and no
others.

Virtually every other revolution in history has just exchanged one
set of rulers for another set of rulers. Our revolution is the first
to say the people are the masters, and government is their servant.
(Applause.)

And you young people out there, don't ever forget that. Some day, you
could be in this room -- but wherever you are, America is depending on
you to reach your highest and be your best because here, in America,
we the people are in charge.

Just three words. We the people. Those are the kids on Christmas Day
looking out from a frozen sentry post on the 38th Parallel in Korea,
or aboard an aircraft carrier in the Mediterranean. A million miles
from home. But doing their duty.

We the people. Those are the warm-hearted whose numbers we can't
begin to count who'll begin the day with a little prayer for hostages
they will never know and MIA families they will never meet. Why?
Because that's the way we are, this unique breed we call Americans.

We the people. They're farmers on tough times, but who never stop
feeding a hungry world. They're the volunteers at the hospital
choking back their tears for the hundredth time, caring for a baby
strugling for life because of a mother who used drugs. And you'll
forgive me a special memory -- it's a million mothers like Nelle
Reagan who never knew a stranger or turned a hungry person away from
her kitchen door.

We the people. They refute last week's television commentary
downgrading our optimism and our idealism. They are the
entrepreneurs, the builders, the pioneers, and a lot of regular folks
the true heroes of our land who make up the most uncommon nation of
doers in history. You know they're Americans because their spirit is
as big as the universe and their hearts are bigger than their
spirits.

We the people. Starting the third century of a dream and standing up
to some cynic who's trying to tell us we're not going to get any
better.

Are we at the end? Well, I can't tell it any better than the real
thing -- a story recorded by James Madison from the final moments of
the Constitutional Convention -- September 17th, 1787. As the last
few members signed the document, Benjamin Franklin-- the oldest
delegate at 81 years, and in frail health -- looked over toward the
chair where George Washington daily presided. At the back of the
chair was painted the picture of a sun on the horizon. And turning to
those sitting next to him, Franklin observed that artists found it
difficult in their painting to distinguish between a rising and a
setting sun.

Well, I know if we were there, we could see those delegates sitting
around Franklin -- leaning in to listen more closely to him. And then
Dr. Franklin began to share his deepest hopes and fears about the
outcome of their efforts, and this is what he said: "I have often
looked at that picture behind the President without being able to
tell whether it was a rising or setting Sun: But now at length I have
the happiness to know that it is a rising and not a setting Sun."

Well, you can bet it's rising, because, my fellow citizens, America
isn't finished her best days have just begun.

Thank you, God bless you and God bless America. (Applause.)