Speech Transcript:

 Mr. Speaker, Mr. President, distinguished members of Congress,
honored guests and fellow citizens:

I mean to speak tonight of big things, of big changes and the
promises they hold and of some big problems and how together we can
solve them and move our country forward as the undisputed leader of
the age.

We gather tonight at a dramatic and deeply promising time in our
history, and in the history of man on earth. For in the past 12
months, the world has known changes of almost biblical proportions.
And even now, months after the failed coup that doomed a failed
system, I am not sure we have absorbed the full impact, the full
import of what happened.

But Communism died this year. Even as President, with the most
fascinating possible vantage point, there were times when I was so
busy helping to manage progress and lead change that I didn't always
show the joy that was in my heart But the biggest thing that has
happened in the world in my life, in our lives, is this: By the grace
of God, America won the Cold War.

I mean to speak this evening of the changes that can take place in
our country now that we can stop making the sacrifices we had to make
when we had an avowed enemy that was a superpower. Now we can look
homeward even more, and move to set right what needs to be set right.
I will speak of those things. But let me tell you something I've been
thinking these past few months. It's kind of a roll-call of honor.
For the cold war didn't end-- it was won. And I think of those that
won it, in places like Korea and Vietnam. And some of them didn't
come back. Back then, they were heroes, but this year they became
hwat the didn't know they were: victors. The long roll call, all the
G.I. Joes and Janes, all th ones who fought faithfully for freedom,
who hit the ground and sucked the dust and knew their share of
Horror. This may seem frivolous. I don't mean it so. But it's moving
to me how the world saw them.

The world saw not only their special valor but their special style,
their rambuctious, optimistic bravery, their do-or-die unity
unhampered by class or race or region. What a group we've put forth,
for generations now, from the ones who wrote "Kilroy was here" on the
walls of German stalags to those who left signs in the Iraqi desert
that said "I saw Elvis". What a group of kids we've sent into the
world.

And there's another to be singled out, though it may seem inelegant.
I mean a mass of people called the American taxpayer. No ever thinks
to thank the people who pay country's bill or an alliance's bill. But
for a half Century now, the American people have shouldered the burden
and paid taxes that were higher than they would have been to support a
defense that was bigger than it would have been if imperial communism
had never existed. But it did. But it doesn't anymore. And here is a
fact I wouldn't mind the world acknowledging: The American taxpayer
bore the brunt of the burden, and deserves a hunk of the glory.

And so, now, for the first time in 35 years, our strategic bombers
stand down. No longer are they on round-the-clock alert. Tomorrow our
children will go to school and study history and how plants grow. And
they won't have, as my children did, air-raid drills in which they
crawl under their desks and cover their heads in case of nuclear war.
My grandchildren don't have to do that, and won't have the bad dreams
children once had in decades past. There are still threats. But the
long drawn-out dread is over.

A year ago tonight I spoke to you at a moment of high peril. American
forces had just unleashed Operation Desert Storm. And after 40 days in
the desert skies and 4 days on the ground, the men and women of
America's armed forces and our allies accomplished the goals that I
declared, and that you endorsed: we liberated Kuwait.

Soon after, the Arab world and Israel sat down to talk seriously, and
comprehensively, about peace, an historic first. And soon after that,
at Christmas, the last American hostages came home. Our policies were
vindicated.

Much good can come from the prudent use of power. And much good can
come from this: A world once divided into two armed camps now
recognizes one sole and pre-eminent power, the United States of
America. And this they regard with no dread. For the world trusts us
with power, and the world is right. They trust us to be fair, and
restrained. They trust us to be on the side of decency. They trust us
to do what's right.

I use those words advisedly. A few days after the war began, I
received a telegram from Joanne Speicher, the wife of the first pilot
killed in the gulf, Lieutenant Commander Scott Speicher. Even in her
grief, she wanted me to know that some day, when her children were
old enough, she would tell them "that their father went away to war
because it was the right thing to do". She said it all. It was the
right thing to do.

And we did it together. There were honest differences here, in this
chamber. But when the war began, you put your partisanship aside and
supported our troops. This is still a time for pride, but this is no
time to boast. For problems face us, and we must stand together once
again and solve them--- and not let our country down.

Two years ago, I began planning cuts in military spending that
reflected the changes of the new era. But now, this year, with
Imperial Communism gone, that process can be accelerated. Tonight I
can tell you of dramatic changes in our strategic nuclear force.
These are actions we are taking on our own, because they are the
right thing to do.

After completing 20 planes for which we have begun procurement, we
will shut down production of the B-2 bomber. We will cancel the ICBM
program. We will cease production of new warheads for our sea-based
missiles. We will stop all production of the peacekeeper missile. And
we will not purchase any more advanced cruise missiles.

This weekend I will meet at Camp David with Boris Yeltsin of the
Russian Federation. I have informed President Yeltsin that if the
commonwealth, the former Soviet Union, will eliminate all land-based
multiple-warhead ballistic missiles, I will do the following: We will
eliminate all Peacekeeper missiles. We will reduce the number of
warheads on Minuteman missiles to one and reduce the number of
warheads on our sea-based missiles by about one-third. And we will
concvert a substantial portion of our strategic to primarily
conventional use.

President Yeltsin's early response has been very positive, and I
expect our talks at Camp David to be fruitful. I want you to know
that for half a century, American presidents have longed to make such
decisions and say such words. But even in the midst of celebration, we
must keep caution as a friend. For the world is still a dangerous
place. Only the dead have seen the end of conflict. And though
yesterday's challenges are behind us, tomorrow's are being born.

The Secretary of defense recommended these cuts after consultation
with the joint chiefs of staff. And I make them with confidence. But
do not misunderstand me: The reductions I have approved will save us
an additional $50 billion over the next five years. By 1997 we will
have cut defense by 30 percent since I took office. These cuts are
deep, and you must know my resolve: this deep, and no deeper. To do
less would be insensible to progress, but to do more would be
ignorant of history. We must not go back to the days of "the hollow
army". We cannot repeat the mistakes made twice in this century when
armistice was followed by recklessness and defense was purged as if
the world was permanently safe.

I remind you this evening that I have asked for your support in
funding a program to protect our country from limited nuclear missile
attack. We must have this protection because too many people in too
many countries have access to nuclear arms. There are those who say
that now we can turn away from the world, that we have no special
role, no special place. But we are the United States of America, the
leader of the West that has become the leader of the world.

As long as I am President we will continue to lead in support of
freedom everywhere, not out of arrogance and not out of altruism, but
for the safety and security of our children. This is a fact: Strength
in the pursuit of peace is no vice; isolationism in the pursuit of
security is no virtue.

Now to our troubles at home. They are not all economic, but the
primary problem is our economy. There are some good signs. Inflation,
that thief, is down, and interest rates are down. But unemployment is
too high, some industries are in trouble and growth is not what it
should be. Let me tell you right from the start and right from the
heart: I know we're in hard times, but I know something else: This
will not stand.

My friends in this chamber, we can bring the same courage and sense
of common purpose to the economy that we brought to Desert Storm. And
we can defeat hard times together. I believe you will help. One reason
is that you're patriots, and you want the best for your country. And I
believe that in your hearts you want to put partisanship aside and get
the job done, because it's the right thing to do.

The power of America rests in a stirring but simple idea: that people
will do great things if only you set them free. Well, we're going to
have to set the economy free, for if this age of miracles and wonders
has taught us anything, it's that if we can change the world, we can
change America.

We must encourage investment. We must make it easier for people to
invest money and make new products, new industries, and new jobs. We
must clear away obstacles to new growth: high taxes, high regulation,
red tape, and yes, wasteful government spending. None of this will
happen with a snap of the fingers, but it will happen. And the test
of a plan isn't whether it's called new or dazzling. The American
people aren't impressed by gimmicks. They're smarter on this score
than all of us in this room. The only test of a plan is, It is sound
and will it work? We must have a short-term plan to address our
immediate needs and heat up the economy. And then we need a long-term
plan to keep the combustion going and to guarantee our place in the
world economy.

There are certain things that a president can do without Congress,
and I am going to do them. I have this evening asked major cabinet
departments and federal agencies to institute a 90-day moratorium on
any new federal regulations that could hinder growth. In those 90
days, major departments and agencies will carry out a top-to-bottom
review of all regulations, old and new, to stop the ones that will
hurt growth and speed up those that will help growth.

Further, for the untold number of hard-working, responsible American
workers and businessmen and women who've been forced to go without
needed bank loans, the banking credit crunch must end. I won't
neglect my responsibility for sound regulations that serve the public
good, but regulatory overkill must be stopped. And I have instructed
our government regulators to stop it.

I have directed Cabinet departments and federal agencies to speed up
pro-growth expenditures as quickly as possible. This should put an
extra $10 billion into the economy in the next six months. And our
new transportation bill provides more than $150 billion for
construction and maintenance projects that are vital to our growth
and well-being. That means jobs building roads, jobs building bridges
and jobs building railways. And I have this evening directed the
secretary of the Treasury to change the federal tax withholding
tables. With this change, millions of Americans from whom the
government withholds more than necessary can now choose to have the
government withhold less from their paychecks. Something tells me a
number of taxpayers may take us up on this one. This initiative could
return about $25 billion back into the economy over the next 12
months, money people can use to help pay for clothing, college or a
new car. And finally, working with the Federal Reserve, we will
continue to support monetary policy that keeps both interest rates
and inflation down.

Now these are the things that I can do. And now, members of Congress,
let me tell you what you can do for your country. You must, you must
pass the other elements of my plan to meet our economic needs.
Everyone knows investment speeds recovery. And I am proposing this
evening a change in the alternative minimum tax, and the creation of
a new 15% investment tax allowance. This will encourage businesses to
accelerate investment and bring people back to work. Real estate has
led our economy out of almost all the tough times we've ever had.
Once building starts, carpenters and plumbers work, people buy homes
and take out mortgages.

My plan would modify the passive-loss rule for active real-estate
developers. And it would make it easier for pension plans to purchase
real estate. For those Americans who dream of buying a first home but
who can't quite afford it, my plan would allow first-time home buyers
to withdraw savings from IRAs without penalty and provide a $5000 tax
credit for the first purchase of that home.

And finally, my immediate plan calls on Congress to give crucial help
to people who own a home, to every one who has a business, a farm or a
single investment.

This time, at this hour, I cannot take "No" for an answer. You must
cut the capital gains tax on the people of this country. Never has an
issue been so demagogued by its opponents. But the demagogues are
wrong. They are wrong, and they know it. Sixty percent of people who
benefit from lower capital gains have incomes under $50,000. A cut in
the capital gains tax increases jobs and helps just about everyone in
our country. And so I'm asking you to cut the capital gains tax to a
maximum of 15.4%. And I'll tell you, I'll tell you, those of you who
say, "Oh no, someone who's comfortable may benefit from this" you
kind of remind me of the old definition of the Puritan, who couldn't
sleep at night worrying that somehow someone somewhere was out having
a good time.

The opponents of this measure and those who've authored various
so-called soak-the-rich bills that are floating around this chamber
should be reminded of something: When they aim at the big guy, they
usually hit the little guy. And maybe it's time that stopped.

This then is my short-term plan. Your part, members of Congress,
requires enactment of these common-sense proposals that will have a
strong effect on the economy, without breaking the budget agreement
and without raising tax rates. And while my plan is being passed and
kicking in, we've got to care for those in trouble today. I have
provided for up to $4.4 billion in my budget to extend federal
unemployment benefits, and I ask for Congressional action right away.
And I thank the committee--well, at last. And let's be frank. Let's be
frank; let me level with you.

I know, and you know, that my plan is unveiled in a political season.
I know, and you know, that everything I propose will be viewed by some
in merely partisan terms. But I ask you to know what is in my heart.
And my aim is to increase our nation's good. And I'm doing what I
think is right; I'm proposing what I know will help. I pride myself
that I'm a prudent man, and I believe that patience is a virtue, but
I understand politics is, for some, a game and that sometimes the
game is to stop all progress and then decry the lack of improvement.
But let me tell you, let me tell you, far more important than my
political future---and far more important than yours--is the
well-being of our country. And members of this chamber, members of
this chamber, are practical people, and I know you won't resent some
practical advice: When people put their party's fortunes, whatever
the party, whatever the side of this aisle, before the public good,
they court defeat not only for their country, but for themselves. And
they will certainly deserve it.

And I submit my plan tomorrow. And I am asking you to pass it by
March 20. From the day after that-- if it must be-- the battle is
joined. And you know, when principle is at stake, I relish a good
fair fight.

I said my plan has two parts, and it does. And it's the second part
that is the heart of the matter. For it's not enough to get an
immediate burst. We need long-term improvement in our economic
position. We all know that the key to our eocnomic future is to
insure that America continues as the economic leader of the world. We
have that in our power. Here, then, is my long-term plan to guarantee
our future.

First, trade: We will work to break down the walls that stop world
trade. We will work to open markets everywhere. And in our major
trade negotiations, I will continue pushing to eliminate tariffs and
subsidies that damage America's farmers and workers. And we'll get
more good American jobs within our own hemisphere through the North
American Free Trade Agreement, and through the Enterprise for the
Americas Initiative. But changes are here, and more are coming. The
work place of the future will demand more highly skilled workers than
ever, people who are computer literate, highly educated.

And we must be the world's leader in education. And we must
revolutionize America's schools. My America 2000 strategy will help
us reach that goal. My plan will give parents more choice, give
teachers more flexibility and help communities create new American
schools. Thirty states across the nation have established America
2000 programs. Hundreds of cities and towns have joined. Now Congress
must join this great movement. Pass my proposals for new American
schools.

That was my second long-term proposal. And here's my third: We must
make common-sense investments that will help us compete, long-term,
in the marketplace. We must encourage research and development. My
plan is to make the R and D tax credit permanent, and to provide
record levels of support, over $76 billion this year alone for people
who explore the promise of emerging technologies.

And fourth, we must do something about crime and drugs. And it is
time for a major renewed investment in fighting violent street crime.
Its saps our strength and hurts our faith in our society, and in our
future together. Surely a tired woman on her way to work at six in
the morning on a subway deserves the right to get there safely. And
surely, it's true that everyone who changes his or her way of life
because of crime-- forom those afraid to go our at night to those
afraid to walk in the parks they pay for-- surely those people have
been denied a basic civil right. It is time to restore it. Congress,
pass my comprehensive crime bill. It is tough on criminals and
supportive of police, and it has been languishing in these hallowed
halls for years now. Pass it. Help your country.

And fifth, I ask you tonight to fund our HOPE housing proposal and to
pass my enterprise-zone legislation, which will get businesses into
the inner city. We must empower the poor with the pride that comes
from owning a home, getting a job, becoming part of things. My plan
would encourage real estate construction by extending tax incentives
for mortgage-revenue bonds and low-income housing. And I ask tonight
for record expenditures for the program that helps children born into
want move into excellence: Head Start.

Step six: We must reform our health care system for this too, bears
on whether or not we can compete in the world. American health costs
have been exploding. This year America will spend over $800 billion
on health, and that is expected to grow to $1.6 trillion by the end
of the decade. We simply cannot afford this. The cost of health care
shows up not only in your family budget, but in the price of
everything we buy and everything we sell. When health coverage for a
fellow on the assembly line costs thousands of dollars, the cost goes
into the product he makes. And you pay the bill. Now we must make a
choice.

Now some pretend we can have it both ways: they call it play or pay.
But that expensive approach is unstable. It will mean higher taxes,
fewer jobs, and eventually, a system under complete government
control. Really, there are only two options. And we can move toward a
nationalized system, a system which will restrict patient choice in
picking a doctor and force the government to ration services
arbitrarily. And what we'll get is patients in long lines,
indifferent service and a huge new tax burden. Or we can reform our
own private health-care system, which still gives us, for all its
flaws, the best quality health care in the world. Well, let's build
on our strengths.

My plan provides insurance security for all Americans while
preserving and increasing the idea of choice. We make basic health
insurance affordable for all low-income people not now covered. We do
it by providing a health-insurance tax credit of up to $3750 for each
low-income family. The middle class gets help, too. And by reforming
the health insurance market, my plan assures that Americans will have
access to basic health insurance even if they change jobs or develop
serious health problem We must bring costs under control, preserve
quality, preserve choice and reduce people's nagging daily worry
about health insurance. My plan, the details of which I will announce
shortly, does just that.

And seventh, we must get the federal deficit under control. We now
have in law, enforcable spending caps, and a requirement that we pay
fo rthe programs we create. There are those in Congress who would
ease that discipline now. But I cannot let them do it. And I won't.
My plan would freeze all domestic discretionary budget authority
which means "No more next year than this year". I will not tamper
with Social Security but I would put real caps on the growth of
uncontrolled spending. And I would also freeze federal domestic
government employment. And with the help of Congress, my plan will
get rid of 246 programs that don't deserve federal funding. Some of
them have noble titles, but none of them is indispensible. We can get
rid of each and every one of them.

You know, it's time we rediscovered a home truth the American people
have never forgotten: the government is too big and spends too much.
And I call on Congress to adopt a measure that will help put an end
to the annual ritual of filling the budget with pork-barrel
appropriations. Every year, the press has a field day making fun of
outrageous examples, a Lawrence Welk Museum, a research grant for
Belgian Endive. We all know how these things get into the budget, and
maybe you need someone to help you say no. I know how to say it. And
you know what I need to make it stick. Give me the same thing 43
governors have--- the line-item veto-- and let me help you control
spending.

We must put an end to unfinanced government mandates. These are the
requirements Congress puts on our cities, counties and states without
supplying the money. And if Congress passes a mandate, it should be
forced to pay for it and balance the cost with savings elsewhere.
After all, a mandate just increases someone else's tax burden, and
that means higher taxes at the state and local level.

Step Eight: Congress should enact the bold reform proposals that are
still awaiting congressional action: bank reform, civil justice
reform, tort reform, and my national energy strategy.

And finally, we must strengthen the family, because it is the family
that has the greatest bearing on our future. When Barbara holds an
AIDS baby in her arms and reads to children, she's saying to every
person in this country, "Family Matters".

And I am announcing tonight a new commission on America's urban
families. I've asked Missouri's governor, John Ashcroft, to be
chairman, former Dallas Mayor Annetter Strauss to be co-chair. You
know, I had Mayors, the leading mayors from the League of Cities, in
the other day at the White House, and they told me something
striking. They said that every one of them, Republican and Democrat,
agreed on one thing: That the major cause of the problems of the
cities is the dissolution of the family. And they asked for this
commission, and they were right to ask, because it's time to
determine what we can do to keep families together, strong and
sound.

There's one thing we can do right away: Ease the burden of rearing a
child. I ask you tonight to raise the personal exemption by $500 per
child for every family. For a family with four kids, that's an
increase of $2000. This is a good start in the right direction, and
it's what we can afford. It's time to allow families to deduct the
interest they pay on student loans. And I'm asking you to do just
that. And I'm asking you to allow people to use money from their IRAs
to pay medical and educational expenses, all without penalties. And
I'm asking for more. Ask American parents what they dislike about how
things are going in our country, and chances are good that pretty soon
they'll get to welfare.

Americans are the most generous people on Earth. But we have to go
back to the insight of Franklin Roosevelt who, when he spoke of what
became the welfare program, want that it must not become a narcotic
and a subtle destroyer of the spirit. Welfare was never meant to be a
life style. It was never meant to be a habit. It was never supposed to
be passed on from generation to generation like a legacy. It's time to
replace the assumptions of the welfare state and help reform the
welfare system.

States throughout the country are beginning to operate with new
assumptions: that when able-bodied people receive government
assistance they have responsibilities to the taxpayer. A
responsibility to seek work, education, or job training. A
responsibility to get their lives in order. A responsibility to hold
their families together and refrain from having children out of
wedlock. And a responsibility to obey the law. We are going to help
this movement. Often, state reform requires waiving certain federal
regulations. I will act to make that process easier and quicker for
every state that asks our help. And I want to add, as we make these
changes, we work together to improve this system, that our intention
is not scapegoating and finger-pointing. If you read the papers or
watch TV you know there's been a rise these days in a certain kind of
ugliness: racist comments, anti-Semitism, an increased sense of
division. Really, this is not us. This is not who we are. And this is
not acceptable.

And so you have my plan for America. And I am asking for big things,
but I believe in my heart you will do what's right.

And you know, it's kind of an American tradition to show a certain
skepticism toward our democratic institutions. I myself have
sometimes thought the aging process could be delayed if it had to
make its way through Congress. But you will deliberate, and you will
discuss, and that is fine. But my friends the people cannot wait.
They need help now. And there's a mood among us. People are worried.
There has been talk of decline. Someone even said our workers are
lazy and uninspired. And I thought, "Really? Go tell Neil Armstrong
standing on the moon. Tell the American farmer who feeds his country
and the world. Tell the men and women of Desert Storm." Moods come
and go, but greatness endures. Our does.

And maybe for a moment it's good to remember what, in the dailyness
of our lives, we forget. We are still and ever the freest nation on
Earth, the kindest nation on Earth, the strongest nation on Earth.
And we have always risen to the occasion. And we are going to lift
this nation out of hard times inch by inch and day by day, and those
who would stop us better step aside. Because I look at hard times and
I make this vow: This will not stand. And so we move on, together, a
rising nation, the once and future miracle that is still, this night,
the hope of the world.