Speech Transcript:

 Tonight, I come not to speak about the "State of the Government", not
to detail every new initiative we plan for the coming year, nor
describe every line in the budget. I'm here to speak to you and to
the American people about the State of the Union about our world, the
changes we've seen, the challenges we face. And what that means for
America.

There are singular moments in history, dates that divide all that
goes before from all that comes after. And many of us in this chamber
have lived much of our lives in a world whose fundamental features
were defined in 1945. And the events of that year decreed the shape
of nations, the pace of progress, freedom or oppression for millions
of people around the world.

Nineteen Forty-Five provided the common frame of reference the
compass points of the postwar era we've relied upon to understand
ourselves. And that was our world until now. The events of the year
just ended, the Revolution of '89, have been a chain reaction,
changes so striking that it marks the beginning of a new era in the
world's affairs.

Think back think back just twelve short months ago to the world we
knew as 1989 began.

One year, one year ago the people of Panama lived in fear under the
thumb of a dictator. Today democracy is restored. Panama is free.

"Operation Just Cause" has achieved its objective. And the number of
military personell in Panama is now very close to what it was before
the operation began. And tonight I am announcing that before the end
of February the additional numbers of American troops, the brave men
and women of our armed forces who made this mission a success, will
be back home.

A year ago in Poland, Lech Walesa declared he was ready to open a
dialogue with the Communist rulers of that country. And today, with
the future of a free Poland in their own hands, members of Solidarity
lead the Polish government.

And a year ago, freedom's playwright, Vaclav Havel, languished as a
prisoner in Prague. And today it's Vaclav Havel, President of
Czechoslovakia.

And one year ago Erich Honecker of East Germany claimed history as
his guide. He predicted the Berlin Wall would last another hundred
years. And today, less than one year later, it's the wall that's
history.

Remarkable events, remarkable events, events that fulfill the
long-held hopes of the American people. Events that validate the
longstanding goals of American policy, a policy based upon a single
shining principle: the cause of freedom.

America, not just the nation, but an idea alive in the minds of the
people, everywhere. As this new world takes shape, America stands at
the center of a widening circle of freedom, today, tomorrow and into
the next century.

Our nation is the enduring dream of every immigrant who ever set foot
on these shores, and the millions still struggling to be free. This
nation, this idea callled America was and always will be a new world,
our new world.

At a workers' rally in a place called Branik on the outskirts of
Prague the idea called America is alive. A worker, dressed in grimy
overalls, rises to speak at the factory gates. And he begins his
speech to his fellow citizens with these words, words of a distant
revolution:

    "We hold these truths to be self-evident. That all men are
created equal, that they are endowed by their creator with certain
unalienable rights, and that among these are life, liberty and the
pursuit of happiness." 

It's no secret here at home freedom's door opened long ago. The
cornerstones of this free society have already been set in place:
democracy, competition, opportunity, private investment, stewardship,
and of course, leadership.

And our challenge today is to take this democratic system of ours, a
system second to none, and make it better:

A better America where there's a job for whoever wants one;

    * Where women working outside the home can be confident their
childeren are in safe and loving care, and where Government works to
expand child alternatives for parents.
    * Where we reconcile the needs of a clean environment and a
strong economy.
    * Where "Made in the USA" is recognized around the world as the
symbol of quality and progress,
    * And where every one of us enjoys the same opportunities to
live, to work and to contribute to society. And where, for the first
time, the American mainstream includes all of our disabled citizens.
    * Where everyone has a roof over his head, and where the homeless
get the help they need to live in dignity.
    * Where our schools challenge and support our kids and our
teachers, and every one of them makes the grade,
    * Where every street, every city, every school and every child is
drug-free.
    * And finally, and finally, where no American is forgotten. Our
hearts go out to our hostages, our hostages who are ceaselessly in
our minds and in our efforts.

That's part of the future we want to see, the future we can make for
ourselves. But dreams alone won't get us there. We need to extend our
horizon, to commit to the long view. And our mission for the future
starts today.

In the tough competitive markets around the world, America faces the
great challenges and great opportunities. And we know that we can
succeed in the global economic arena of the 90's. But to meet that
challenge we must make some fundamental changes, some crucial
investments in ourselves.

Yes, we are going to invest in America. This Administration is
determined to encourage the creation of capital, capital of all
kinds. Physical capital: everything from our farms and factories to
our workshops and production lines, all that is needed to produce and
deliver quality goods and quality services. Intellectual, intellectual
capital: the source of ideas that spark tomorrow's products. And of
course human capital: the talented work force that we'll need to
compete in the global market.

And let me tell you, if we ignore human capital, if we lose the
spirit of American ingenuity, the sprit that is the hallmark of the
AMERICAN worker, that would be bad. The American worker is the most
productive worker in the world.

We need to save more. We need to expand the pool of capital for new
investments that mean more jobs and more growth. And that's the idea
behind the new initiative I call the Family Savings Plan, which I
will send to Congress tomorrow.

We need to cut the tax on capital gains, encourage, encourage
risk-takers, especially those in small businesses, to take those
steps that translate into economic reward, jobs, and a better life
for all of us.

We'll do what it takes to invest in America's future. The budget
commitment is there. The money is there. It's there for research and
development, R and D, a record high. It's there for our housing
initiative, hope, H-O-P-E, to help everyone from first-time
homebuyers to the homeless. The money's there to keep our kids
drug-free, 70 percent more than when I took office in 1989. It's
there for space exploration, and its there for education, another
record high.

And one more, and one more thing. Last fall at the education summit,
the governors and I agreed to look for ways to help make sure that
our kids are ready to learn the very first day they walk into the
classroom. And I've made good on that commitment by proposing a
record increase in funds, an extra half billion dollars, for
something near and dear to all of us: Head Start.

Education is the one investment that means more for our future,
because it means the most for our children. Real improvement in our
schools is not simply a matter of spending more. It's a matter of
asking more, expecting more, of our schools, our teachers, of our
kids, of our parents and of ourselves. And that's why tonight, and
that's why tonight, I am announcing America's education goals, goals
developed with enormous cooperation from the nation's governors. And
if I might I'd like to say I'm very pleased that Governor Gardner and
Governor Clinton, Governor Branstad, Governor Campbell, all of whom
were very key in these discussion, these deliberations, are with us
here tonight.

By the, by the year 2000, every child must start school ready to
learn. The United States must increase the high school graduation
rate to no less than 90 percent. And we are going to make sure our
schools' diplomas mean something. In critical subjects, at the
fourth, eighth, and 12th grades, we must assess our students'
performance.

By the, by the year 2000 U.S. students must be the first in the world
in math and science achievement. Every American adult must be a
skilled, literate worker and citizen. Every school must offer the
kind of disciplined envorionment that makes it possible for our kids
to learn. And every school in America must be drug-free.

Ambitious aims? Of course. Easy to do? Far from it. But the future's
at stake. The nation will not accept anything less than excellence in
education.

These investments will help keep America competitive. And I know this
about the American people: we welcome competition. We'll match our
ingenuity, our energy, our experience, and technology our spirit and
enterprise against anyone. But let the competition be free, but let
it also be fair. America is ready.

Since we really mean it, and since we're serious about being ready to
meet our challenge, we're getting our own house in order. We have made
real progress. Seven years ago, the Federal deficit was 6 percent of
our gross national product, 6 percent. In the new budget I sent up
two days ago the deficit is down to 1 percent of GNP.

That budget brings Federal spending under control. It meets the
Gramm-Rudman target. It brings the deficit down further. And balances
the budget by 1993, with no new taxes.

And let me tell you, there's still more than enough Federal spending.
For most of us, $1.2 trillion is still a lot of money.

And once the budget is balanced, we can operate the way every family
must when it has bills to pay. We won't leave it to our children and
grandchildren. Once it's balanced, we will start paying off the
national debt.

And there's something more, and there's something more we owe the
generations of the future: stewardship, the safekeeping of America's
precious environmental inheritance.

As just one sign of how serious we are, we will elevate the
Environmental Protection Agency to Cabinet rank. Not, not more
bureaucracy, not more red tape, but the certainty that here at home,
and especially in our dealings with other nations, environmental
issues have the status they deserve.

This year's budget provides over $2 billion in new spending to
protect our environment, with over $1 billion for global change
research, and a new intiative I call America the Beautiful to expand
our national parks and wildlife preserves and improve recreational
facilities on public lands.

And something else, something that will help keep this country clean,
from our forest land to the inner cities, and keep America beautiful
for generations to come, the money to plant a billion trees a year.

And tonight, and tonight let me say again to all the members of the
Congress, the American people did not send us here to bicker. There
is work to do, and they sent us here to get it done. And once again,
in the spirit of cooperation I offer my hand to all of you. And let's
work together to do the will of the people---clean air, child care,
the educational excellence act, crime and drugs. It's time to act.
The farm bill, transportation policy, product liability reform,
enterprise zones. It's time to act together.

And there's one thing I hope we can agree on. It's about our
commitments. And I'm talking about Social Security.

To every American out there on Social Security, to every, every
American supporting that system today, and to everyone counting on it
when they retire, we made a promise to you, and we are going to keep
it.

We, we rescued the system in 1983 and it's sound again, bipartisan
arrangement. Our budget fully funds today's benefits and it asssures
that future benefits will be funded as well. And the last thing we
need to do is mess around with Social Security.

There's one more problem we need to address. We must give careful
consideration to the recommendations of the health care studies under
way now. And that's why tonight, I am asking Dr. Sullivan, Lou
Sullivan, Secretary of Health and Human Services, to lead a Domestic
Policy Council review of recommendations on the quality,
accessibility and cost of our nation's health care system. I am
committed to bring the staggering costs of health care under
control.

The State of the Government does indeed depend on many of us in this
very chamber. But the State of the Union depends on all Americans. We
must maintain the democratic decency that makes a nation out of
millions of individuals. And I've been appalled at the recent mail
bombings across this country. Every one of us must confront and
condemn racism, anti-Semitism, bigotry and hate. Not next week, not
tomorrow, but right now. Every single one of us.

The State of the Union depends on whether we help our neighbor, claim
the problems of our community as our own. We've got to step forward
when there's trouble, lend a hand, be what I call a point of light to
a stranger in need. We've got to take the time after a busy day to sit
down and read with our kids, help them with their homework, pass along
the values we had as children. And that's how we sustain the State of
the Union.

Every effort is important. It all adds up. It's doing the things that
give democracy meaning. It all adds up to who we are and who we will
be.

And let me say, that so long as we remember the American idea, so
long as we live up to the American ideal, the State of the Union will
remain sound and strong.

And to those who worry that we've lost our way, well, I want you to
listen to parts of a letter written by James Markwell, Pvt. 1st Class
James Markwell, a 20-year-old Army medic to the First Battalion, 75th
Rangers. It's dated Dec. 18, the day before our armed forces went
into action in Panama. It's a letter servicemen write--and hope will
never, ever be sent. And sadly, Private Markwell's mother did receive
this letter. She passed it on to me out there in Cincinnati.
And here is some of what he wrote:

    "I've never been afraid of death, but I know he is waiting at the
corner...I've been trained to kill and to save, and so has everyone
else. I am frightened of what lays beyond the fog, and yet... do not
mourn for me. Revel in the life that I have died to give you... But
most of all, don't forget that the Army was my choice. Something that
I wanted to do. Remember I joined the Army to serve my country and
inure that you are free to do what you want and to live your lives
freely." 


Let me add that Private Markwell was among the first to see battle in
Panama, and among the first to fall. But he knew what he believed in.
He carried the idea we call America in his heart.

I began tonight speaking about the changes we've seen this past year.
There is a new world of challenges and opportunities before us. And
there is a need for leadership that only America can provide.

Nearly 40 years ago, in his last address to the Congress, President
Harry Truman predicted such a time would come. He said,

    "As our world grows stronger, more united, more attractive to men
on both sides of the Iron Curtain, then inevitably there will come a
time of change within the Communist world." 

Today, that change is taking place.

For more than 40 years, America and its allies held Communism in
check and insured that democracy would continue to exist. And today,
with Communism crumbling, our aim must be to insure democracy's
advance, to take the lead in forging peace and freedom's best hope, a
great and growing commonwealth of free nations.

And to the Congres and to all Americans, I say it is time to acclaim
a new consensus at home and abroad, a common vision of the peaceful
world we want to see.

Here in our own hemisphere it is time for all the people of the
Americas, North and South, to live in freedom.

In the Far East and Africa, it's time for the full flowering of free
governments and free markets that have served the engine of
progress.

It is time to offer our hand to the emerging democracies of Eastern
Europe so that continent, for too long a continent divided, can see a
future whole and free.

It's time to build on our new relationship with the Soviet Union, to
endorse and encourage a peaceful process of internal change toward
democracy and economic opportunity.

We are in a period of great transition, great hope, and yet great
uncertainty. We recognize that the Soviet military threat in Europe
is diminishing, but we see little change in Soviet strategic
modernization. And, therefore, we must sustain our own strategic
offense modernization and the Strategic Defense Initiative.

But the time is right to move forward on a conventional arms control
agreement to move us to more appropriate levels of military forces in
Europe, a coherent defense program that insures the U.S. will continue
to be a catalyst for peaceful change in Europe. And I've consulted
with leaders of NATO. In fact I spoke by phone with President
Gorbachev just today.

And I agree with our European allies that an American military
presence in Europe is essential and that it should not be solely tied
to the Soviet military presence in Eastern Europe.

But our troop levels can still be lower. And so tonight I am
announcing a major new step for a further reduction in U.S. and
Soviet manpower in Central and Eastern Europe to 195,000 on each
side.

This number, this number, this level, reflects the advice of our
senior military advisers. It's designed to protect American and
European interests and sustain NATO's defense strategy. A swift
conclusion to our arms control talks--conventional, chemical and
strategic--- must now be our goal. And that time has come.

Still, we must recognize an unfortunate fact: in many regions of the
world tonight the reality is conflict, not peace. Enduring
animosities and opposing interests remain. And thus the cause of
peace must be served by an America strong enough and sure enough to
defend our interests and our ideals. It's this American idea that for
the past four decades helped inspire the Revolution of '89.

And here at home, and in the world, there is history in the making,
and history to be made. Six months ago, early in this season of
change, I stood at the gates of the Gdansk shipyard in Poland at the
monument to the fallen workers of Solidarity. It's a monument of
simple majesty. Three tall crosses rise up from the stones, and atop
each cross, an anchor, an ancient symbol of hope.

The anchor in our world today is freedom. Holding us steady in times
of change, a symbol of hope to all the world. And freedom is at the
very heart of the idea that is America. Giving life to the idea
depends on every one of us. Our anchor has always been faith and
family.

In the last few days of this past monumentous year, our family was
blessed once more, celebrating the joy of life when a little boy
became our 12th grandchild. When I held the little guy fo the first
time, the troubles at home and abroad seemed manageable, and totally
in perspective.

And now I know, I know you're probably thinking, Well, that's just a
grandfather talking.

Well, maybe you're right. But I've met a lot of children this past
year across this country, as all of you have. Everywhere from the Far
East to Eastern Europe. All kids are unique. Yet, all kids are alike.
The budding young environmentalist I met this month, who joined me in
exploring the Florida Everglades. The Little Leaguers I played catch
with in Poland, ready to go from Warsaw to the World Series. And even
the kids who are ill or alone-- and God bless those boarder babies,
born addicted to drugs and AIDS -- coping with problems no child
should have to face. But, you know, when it comes to hope and the
future, every kid is the same: full of dreams, ready to take on the
world, all special because they are the very future of freedom. And
to them belongs this new world I've been speaking about.

And so tonight, I'm going to ask something of every one of you. Now
let me start with my generation, with the grandparents out there. You
are our living link with the past. Tell your grandchildren the story
of struggles waged at home and abroad, of sacrifices freely made for
freedom's sake. And tell them your own story as well, because every
American has a story to tell.

And parents, your children look to you for direction and guidance.
Tell them of faith and family. Tell them we are one nation under God.
Teach them that of all the many gifts they can receive, liberty is
their most precious legacy. And of all the gifts they can give, the
greatest, the greatest is helping others.

And to the children and young people out there tonight, with you
rests our hope, all that America will mean in the years and decades
ahead. Fix your vision on a new century, your century, on dreams we
cannot see, on the destiny that is yours and yours alone.

And finally, let all Americans, all of us here in this chamber, the
symbolic center of democracy, affirm our allegience to this idea we
call America. And let us remember that the State of the Union depends
upon each and every one of us.

God bless all of you. And may God bless this great nation, the United
States of America.