Mr. President, Mr. Speaker, members of the United States Congress.

I come to this house of the people to speak to you and all Americans,
certain we stand at a defining hour.

Halfway around the world, we are engaged in a great struggle in the skies
and on the seas and sands. We know why we're there. We are Americans--part
of something larger than ourselves.

For two centuries we've done the hard work of freedom. And tonight we lead
the world in facing down a threat to decency and humanity.

What is at stake is more than one small country, it is a big idea--a new
world order, where diverse nations are drawn together in common cause to
achieve the universal aspirations of mankind: peace and security, freedom,
and the rule of law. Such is a world worthy of our struggle, and worthy of
our children's future.

The community of nations has resolutely gathered to condemn and repel
lawless aggression. Saddam Hussein's unprovoked invasion--his ruthless,
systematic rape of a peaceful neighbor--violated everything the community
of nations holds dear. The world has said this aggression would not stand,
and it will not stand.

Together, we have resisted the trap of appeasement, cynicism and isolation
that gives temptation to tyrants. The world has answered Saddam's invasion
with 12 United Nations resolutions, starting with a demand for Iraq's
immediate and unconditional withdrawal, and backed up by forces from 28
countries of six continents. With few exceptions, the world now stands as
one.

The end of the cold war has been a victory for all humanity. A year and a
half ago, in Germany, I said our goal was a Europe whole and free. Tonight,
Germany is united. Europe has become whole and free, and America's
leadership was instrumental in making it possible.

The principle that has guided us is simple: our objective is to help the
Baltic peoples achieve their aspirations, not to punish the Soviet Union.
In our recent discussions with the Soviet leadership we have been given
representations, which, if fulfilled, would result in the withdrawal of
some Soviet forces, a re-opening of dialogue with the republics, and a move
away from violence.

We will watch carefully as the situation develops. And we will maintain our
contact with the Soviet leadership to encourage continued commitment to
democratization and reform.

If it is possible, I want to continue to build a lasting basis for
U.S.-Soviet cooperation, for a more peaceful future for all mankind.

The triumph of democratic ideas in Eastern Europe and Latin America, and
the continuing struggle for freedom elsewhere around the world all confirm
the wisdom of our nation's founders.

Tonight, we work to achieve another victory, a victory over tyranny and
savage aggression.

We in this Union enter the last decade of the 20th Century thankful for all
our blessings, steadfast in our purpose, aware of our difficulties and
responsive to our duties at home and around the world.

For two centuries, America has served the world as an inspiring example of
freedom and democracy. For generations, America has led the struggle to
preserve and extend the blessings of liberty. And today, in a rapidly
changing world, American leadership is indispensable. Americans know that
leadership brings burdens, and requires sacrifice.

But we also know why the hopes of humanity turn to us. We are Americans; we
have a unique responsibility to do the hard work of freedom. And when we
do, freedom works.

The conviction and courage we see in the Persian Gulf today is simply the
American character in action. The indomitable spirit that is contributing
to this victory for world peace and justice is the same spirit that gives
us the power and the potential to meet our challenges at home.

We are resolute and resourceful. If we can selflessly confront evil for the
sake of good in a land so far away, then surely we can make this land all
it should be.

If anyone tells you America's best days are behind her, they're looking the
wrong way.

Tonight, I come before this house, and the American people, with an appeal
for renewal. This is not merely a call for new government initiatives, it
is a call for new initiative in government, in our communities, and from
every American--to prepare for the next American century.

America has always led by example. So who among us will set this example?
Which of our citizens will lead us in this next American century? Everyone
who steps forward today, to get one addict off drugs; to convince one
troubled teen-ager not to give up on life; to comfort one AIDS patient; to
help one hungry child.

We have within our reach the promise of renewed America. We can find
meaning and reward by serving some purpose higher than ourselves--a
shining purpose, the illumination of a thousand points of light. It is
expressed by all who know the irresistible force of a child's hand, of a
friend who stands by you and stays there--a volunteer's generous gesture,
an idea that is simply right.

The problems before us may be different, but the key to solving them
remains the same: it is the individual--the individual who steps forward.
And the state of our Union is the union of each of us, one to the other:
the sum of our friendships, marriages, families and communities.

We all have something to give. So if you know how to read, find someone who
can't. If you've got a hammer, find a nail. If you're not hungry, not
lonely, not in trouble--seek out someone who is.

Join the community of conscience. Do the hard work of freedom. That will
define the state of our Union.

Since the birth of our nation, "we the people" has been the source of our
strength. What government can do alone is limited, but the potential of the
American people knows no limits.

We are a nation of rock-solid realism and clear-eyed idealism. We are
Americans. We are the nation that believes in the future. We are the nation
that can shape the future.

And we've begun to do just that, by strengthening the power and choice of
individuals and families.

Together, these last two years, we've put dollars for child care directly
in the hands of patients instead of bureaucracies, unshackled the potential
of Americans with disabilities, applied the creativity of the marketplace in
the service of the environment, for clean air, and made homeownership
possible for more Americans.

The strength of a democracy is not in bureaucracy, it is in the people and
their communities. In everything we do, let us unleash the potential of our
most precious resource--our citizens. We must return to families,
communities, counties, cities, states and institutions of every kind, the
power to chart their own destiny, and the freedom and opportunity provided
by strong economic growth. That's what America is all about.

I know, tonight, in some regions of our country, people are in genuine
economic distress. I hear them.

Earlier this month Kathy Blackwell of Massachusetts wrote me about what can
happen when the economy slows down, saying, "My heart is aching, and I
think that you should know--your people out here are hurting badly."

I understand. And I'm not unrealistic about the future. But there are
reasons to be optimistic about our economy.

First, we don't have to fight double-digit inflation. Second, most
industries won't have to make big cuts in production because they don't
have big inventories piled up. And third, our exports are running solid and
strong. In fact, American businesses are exporting at a record rate.

So let's put these times in perspective. Together, since 1981, we've
created almost 20 million jobs, cut inflation in half and cut interest
rates in half.

Yes, the largest peacetime economic expansion in history has been
temporarily interrupted. But our economy is still over twice as large as
our closest competitor.

We will get this recession behind us and return to growth soon. We will get
on our way to a new record of expansion, and achieve the competitive
strength that will carry us into the next American century.

We should focus our efforts today on encouraging economic growth, investing
in the future and giving power and opportunity to the individual.

We must begin with control of Federal spending. That's why I'm submitting a
budget that holds the growth in spending to less than the rate of
inflation. And that's why, amid all the sound and fury of last year's
budget debate, we put into law new, enforceable spending caps so that
future spending debates will mean a battle of ideas, not a bidding war.

Though controversial, the budget agreement finally put the Federal
Government on a pay-as-you-go basis, and cut the growth of debt by nearly
$500 billion. And that frees funds for saving and job-creating investment.

Now, let's do more. My budget again includes tax-free family savings
accounts; penalty-free withdrawals from I. R. A.'s for first-time
homebuyers; and, to increase jobs and growth, a reduced tax for long-term
capital gains.

I know their are differences among us about the impact and the effects of a
capital gains incentive. So tonight I am asking the Congressional leaders
and the Federal Reserve to cooperate with us in a study, led by Chairman
Alan Greenspan, to sort out our technical differences so that we can avoid
a return to unproductive partisan bickering.

But just as our efforts will bring economic growth now and in the future,
they must also be matched by long-term investments for the next American
century.

That requires a forward-looking plan of action, and that's exactly what we
will be sending to the Congress. We have prepared a detailed series of
proposals, that include: A budget that promotes investment in America's
future--in children, education, infrastructure, space and high technology.
Legislation to achieve excellence in education, building on the partnership
forged with the 50 governors at the education summit, enabling parents to
choose their children's schools and helping to make America No. 1 in math
and science. A blueprint for a new national highway system, a critical
investment in our transportation infrastructure. A research and development
agenda that includes record levels of Federal investment and a permanent
tax credit to strengthen private R and D and create jobs. A comprehensive
national energy strategy that calls for energy conservation and efficiency,
increased development and greater use of alternative fuels. A banking
reform plan to bring America's financial system into the 21st Century, so
that our banks remain safe and secure and can continue to make job-creating
loans for our factories, businesses, and homebuyers. I do think there has
been too much pessimism. Sound banks should be making more sound loans,
now. And interest rates should be lower, now. In addition to these
proposals, we must recognize that our economic strength depends upon being
competitive in world markets. We must continue to expand America's exports.
A successful Uruguay Round of world trade negotiations will create more
real jobs, and more real growth, for all nations. You and I know that if
the playing field is level, America's workers and farmers can outwork and
outproduce anyone, anytime, anywhere.

And with the Mexican free trade agreement and our Enterprise for the
Americas Initiative we can help our partners strengthen their economies and
move toward a free trade zone throughout this entire hemisphere.

The budget also includes a plan of action right here at home to put more
power and opportunity in the hands of the individual. That means new
incentives to create jobs in our inner cities by encouraging investment
through enterprise zones. It also means tenant control and ownership of
public housing. Freedom and the power to choose should not be the privilege
of wealth. They are the birthright of every American.

Civil rights are also crucial to protecting equal opportunity. Every one of
us has a responsibility to speak out against racism, bigotry, and hate. We
will continue our vigorous enforcement of existing statutes, and I will once
again press the Congress to strengthen the laws against employment
discrimination without resorting to the use of unfair preferences.

We're determined to protect another fundamental civil right: freedom from
crime and the fear that stalks our cities. The Attorney General will soon
convene a crime summit of the nation's law-enforcement officials. And to
help us support them we need a tough crime control legislation, and we need
it now.

As we fight crime, we will fully implement our nation strategy for
combatting drug abuse. Recent data show we are making progress, but much
remains to be done. We will not rest until the day of the dealer is over,
forever.

Good health care is every American's right and every American's
responsibility. So we are proposing an aggression program of new prevention
initiatives--for infants, for children, for adults, and for the elderly--
to promote a healthier America and to help keep costs from spiraling.

It's time to give people more choice in government by reviving the ideal of
the citizen politician who comes not to stay, but to serve. One of the
reasons there is so much support for term limitations is that the American
people are increasingly concerned about big-money influence in politics.
We must look beyond the next election, to the next generation. The time has
come to put the national interest ahead of the special interest--and
totally eliminate political action committees.

That would truly put more competition in elections and more power in the
hands of individuals. And where power cannot be put directly into the hands
of the individual, it should be moved closer to the people--away from
Washington.

The federal government too often treats government programs as if they are
of Washington, by Washington, and for Washington. Once established, federal
programs seem to become immortal.

It's time for a more dynamic program life cycle. Some programs should
increase. Some should decrease. Some should be terminated. And some should
be consolidated and turned over to the states.

My budget includes a list of programs for potential turnover totaling more
than $20 billion. Working with Congress and the governors, I propose we
select at least $15 billion in such programs and turn them over to the
states in a single consolidated grant, fully funded, for flexible
management by the states.

The value of this turnover approach is straightforward. It allows the
Federal Government to reduce overhead. It allows states to manage more
flexibly and more efficiently. It moves power and decision-making closer to
the people. And it re-enforces a theme of this Administration: appreciation
and encouragement of the innovative power of "states as laboratories."

This nation was founded by leaders who understood that power belongs in the
hands of the people. They planned for the future. And so must we--here and
around the world.

As Americans, we know there are times when we must step forward and accept
our responsibility to lead the world away from the dark chaos of dictators,
toward the bright promise of a better day.

Almost 50 years ago, we began a long struggle against aggressive
totalitarianism. Now we face another defining hour for America and the
world.

There is no one more devoted, more committed to the hard work of freedom,
than every soldier and sailor, every marine, airman and coastguardsman--
every man and every woman now serving in the Persian Gulf.

Each of them has volunteered to provide for this nation's defense. And now
they bravely struggle to earn for America and for the world and for future
generations, a just and lasting peace.

Our commitment to them must be equal of their commitment to our country.
They are truly America's finest.

The war in the gulf is not a war we wanted. We worked hard to avoid war.
For more than five months we, along with the Arab League, the European
Community and the United Nations, tried every diplomatic avenue. U.N.
Secretary General Perez de Cuellar; Presidents Gorbachev, Mitterand, Ozal,
Mubarak, and Bendjedid; Kings Fahd and Hassan; Prime Ministers Major and
Andreotti--just to name a few--all worked for a solution. But time and
again Saddam Hussein flatly rejected the path of diplomacy and peace.

The world well knows how this conflict began, and when: it began on August
2nd, when Saddam invaded and sacked a small, defenseless neighbor. And I am
certain of how it will end. So that peace can prevail, we will prevail.

Tonight I'm pleased to report that we are on course. Iraq's capacity to
sustain war is being destroyed. Our investment, our training, our planning
--all are paying off. Time will not be Saddam's salvation.

Our purpose in the Persian Gulf remains constant: to drive Iraq out from
Kuwait, to restore Kuwait's legitimate government, and to insure the
stability and security of this critical region.

Let me make clear what I mean by the region's stability and security. We do
not seek the destruction of Iraq, its culture or its people. Rather, we
seek an Iraq that uses its great resources not to destroy, not to serve the
ambitions of a tyrant, but to build a better life for itself and its
neighbors. We seek a Persian Gulf where conflict is no longer the rule,
where the strong are neither tempted nor able to intimidate the weak.

Most Americans know instinctively why we are in the Gulf. They know we had
to stop Saddam now, not later. They know this brutal dictator will do
anything, will use any weapon, will commit any outrage, no matter how many
innocents must suffer.

They know we must make sure that control of the world's oil resources does
not fall into his hands only to finance further aggression. They know that
we need to build a new, enduring peace--based not on arms races and
confrontation, but on shared principles and the rule of law.

And we all realize that our responsibility to be the catalyst for peace in
the region does not end with the successful conclusion of this war.

Democracy brings the undeniable value of thoughtful dissent, and we have
heard some dissenting voices here at home, some reckless, most responsible.
But the fact the all the voices have the right to speak out is one of the
reasons we've been united in principle and purpose for 200 years.

Our progress in this great struggle is the result of years of vigilance and
a steadfast commitment to a strong defense. Now, with remarkable
technological advances like the Patriot missile, we can defend the
ballistic missile attacks aimed at innocent civilians.

Looking forward, I have directed that the S.D.I. program be refocused on
providing protection from limited ballistic missile strikes, whatever their
source. Let us pursue an S.D.I. program that can deal with any future
threat to the United States, to our forces overseas and to our friends and
allies.

The quality of American technology, thanks to the American worker, has
enabled us to successfully deal with difficult military conditions, and
help minimize the loss of life. We have given our men and women the very
best. And they deserve it.

We all have a special place in our hearts for the families of men and women
serving in the Gulf. They are represented here tonight, by Mrs. Norman
Schwarzkopf, and to all those serving with him. And to the families, let me
say, our forces in the gulf will not stay there one day longer than is
necessary to complete their mission.

The courage and success of the R.A.F. pilots--of the Kuwaiti, Saudi,
French, Canadians, Italians, the pilots of Qatar and Bahrain--all are
proof that for the first time since World War II, the international
community is united. The leadership of the United Nations, once only a
hoped-for ideal, is now confirming its founders' vision.

I am heartened that we are not being asked to bear alone the financial
burden of this struggle. Last year, our friends and allies provided the
bulk of the economic costs of Desert Shield, and having now received
commitments of over $40 billion for the first three months of 1991, I am
confident they will do no less as we move through Desert Storm.

But the world has to wonder what the dictator of Iraq is thinking. If he
thinks that by targeting innocent civilians in Israel and Saudi Arabia,
that he will gain an advantage--he is dead wrong. If he thinks that he
will advance his cause through tragic and despicable environmental
terrorism--he is dead wrong. And if he thinks that by abusing coalition
P.O.W.s, he will benefit--he is dead wrong.

We will succeed in the Gulf. And when we do, the world community will have
sent an enduring warning to any dictator or despot, present or future, who
contemplates outlaw aggression.

The world can therefore seize this opportunity to fulfill the long-held
promise of a new world order--where brutality will go unrewarded, and
aggression will meet collective resistance.

Yes, the United States bears a major share of leadership in this effort.
Among the nations of the world, only the United States of America has had
both the moral standing, and the means to back it up. We are the only
nation on this earth that could assemble the forces of peace.

This is the burden of leadership--and the strength that has made America
the beacon of freedom in a searching world.

This nation has never found glory in war. Our people have never wanted to
abandon the blessings of home and work, for distant lands and deadly
conflict. If we fight in anger, it is only because we have to fight at all.
And all of us yearn for a world where we will never have to fight again.

Each of us will measure, within ourselves, the value of this great
struggle. Any cost in lives is beyond our power to measure. But the cost of
closing our eyes to aggression is beyond mankind's power to imagine.

This we do know: Our cause is just. Our cause is moral. Our cause is
right.

Let future generations understand the burden and the blessings of freedom.
Let them say, we stood where duty required us to stand.

Let them know that together, we affirmed America, and the world, as a
community of conscience.

The winds of change are with us now. The forces of freedom are united. We
move toward the next century, more confident than ever, that we have the
will at home and abroad, to do what must be done--the hard work of
freedom.

May God bless the United States of America.