Mr. President, Mr. Speaker, members of the 104th Congress, my fellow
Americans:

Again we are here in the sanctuary of democracy. And once again, our
democracy has spoken.

So let me begin by congratulating all of you here in the 104th Congress,
and congratulating you, Mr. Speaker.

If we agree on nothing else tonight, we must agree that the American people
certainly voted for change in 1992 and in 1994.

And as I look out at you, I know how some of you must have felt in 1992.

I must say that in both years we didn't hear America singing, we heard
America shouting. And now all of us, Republicans and Democrats alike, must
say: We hear you. We will work together to earn the jobs you have given us.
For we are the keepers of the sacred trust and we must be faithful to it in
this new and very demanding era.

Over 200 years ago, our founders changed the entire course of human history
by joining together to create a new country based on a single, powerful
idea. We hold these truths to be self-evident, that all men are created
equal, endowed by their creator with certain inalienable rights. Among
these are life, liberty and the pursuit of happiness.

It has fallen to every generation since then to preserve that idea--the
American idea--and to deepen and expand its meaning in new and different
times. To Lincoln and to his Congress, to preserve the Union and to end
slavery. To Theodore Roosevelt and Woodrow Wilson, to restrain the abuses
and excesses of the Industrial Revolution and to assert our leadership in
the world. To Franklin Roosevelt, to fight the failure and pain of the
Great Depression and to win our country's great struggle against fascism.

And to all our Presidents since, to fight the cold war. Especially, I
recall two who struggled to fight that cold war in partnership with
Congresses where the majority was of a different party. To Harry Truman,
who summoned us to unparalleled prosperity at home and who built the
architecture of the cold war. And to Ronald Reagan, whom we wish well
tonight, and who exhorted us to carry on until the twilight struggle
against Communism was won.

In another time of change and challenge, I had the honor to be the first
President to be elected in the post-cold-war era, an era marked by the
global economy, the information revolution, unparalleled change in
opportunity and in security for the American people.

I came to this hallowed chamber two years ago on a mission: To restore the
American dream for all our people and to make sure that we move into the
21st century still the strongest force for freedom and democracy in the
entire world.

I was determined then to tackle the tough problems too long ignored. In
this effort I am frank to say that I have made my mistakes. And I have
learned again the importance of humility in all human endeavor.

But I am also proud to say tonight that our country is stronger than it was
two years ago.

Accomplishments

Record numbers, record numbers of Americans are succeeding in the new
global economy. We are at peace, and we are a force for peace and freedom
throughout the world. We have almost six million new jobs since I became
President, and we have the lowest combined rate of unemployment and
inflation in 25 years.

Our businesses are more productive and here we have worked to bring the
deficit down, to expand trade, to put more police on our streets, to give
our citizens more of the tools they need to get an education and to rebuild
their own communities. But the rising tide is not lifting all the boats.

While our nation is enjoying peace and prosperity, too many of our people
are still working harder and harder for less and less. While our businesses
are restructuring and growing more productive and competitive, too many of
our people still can't be sure of having a job next year or even next
month. And far more than our material riches are threatened, things far
more precious to us: our children, our families, our values.

Our civil life is suffering in America today. Citizens are working together
less and shouting at each other more. The common bonds of community which
have been the great strength of our country from its very beginning are
badly frayed.

What are we to do about it?

More than 60 years ago at the dawn of another new era, President Roosevelt
told our nation new conditions impose new requirements on Government and
those who conduct Government. And from that simple proposition he shaped
the New Deal, which helped to restore our nation to prosperity and defined
the relationship between our people and their Government for half a
century.

That approach worked in its time but today we face a very different time
and very different conditions. We are moving from an industrial age built
on gears and sweat to an information age demanding skills and learning and
flexibility.

Our Government, once a champion of national purpose, is now seen by many as
simply a captive of narrow interests putting more burdens on our citizens
rather than equipping them to get ahead. The values that used to hold us
all together seem to be coming apart.

So tonight we must forge a new social compact to meet the challenges of
this time. As we enter a new era, we need a new set of understandings not
just with Government but, even more important, with one another as
Americans.

New Covenant

That's what I want to talk with you about tonight. I call it the New
Covenant but it's grounded in a very, very old idea that all Americans have
not just a right but a solemn responsibility to rise as far as their
God-given talents and determination can take them. And to give something
back to their communities and their country in return.

Opportunity and responsibility--they go hand in hand; we can't have one
without the other, and our national community can't hold together without
both.

Our New Covenant is a new set of understandings for how we can equip our
people to meet the challenges of the new economy, how we can change the way
our Government works to fit a different time and, above all, how we can
repair the damaged bonds in our society and come together behind our common
purpose. We must have dramatic change in our economy, our Government and
ourselves.

My fellow Americans, without regard to party, let us rise to the occasion.
Let us put aside partisanship and pettiness and pride. As we embark on this
course, let us put our country first, remembering that regardless of party
label we are all Americans. And let the final test of everything we do be a
simple one: Is it good for the American people?

Let me begin by saying that we cannot ask Americans to be better citizens
if we are not better servants. You made a good start by passing that law
which applies to Congress all the laws you put on the private sector--and
I was proud to sign it yesterday.

But we have a lot more to do before people really trust the way things work
around here. Three times as many lobbyists are in the streets and corridors
of Washington as were here 20 years ago. The American people look at their
capital and they see a city where the well-connected and the well-protected
can work the system, but the interests of ordinary citizens are often left
out.

As the new Congress opened its doors, lobbyists were still doing business
as usual--the gifts, the trips--all the things that people are concerned
about haven't stopped.

Twice this month you missed opportunities to stop these practices. I know
there were other considerations in those votes, but I want to use something
that I've heard my Republican friends say from time to time: There doesn't
have to be a law for everything.

So tonight I ask you to just stop taking the lobbyists' perks, just stop.

We don't have to wait for legislation to pass to send a strong signal to
the American people that things are really changing. But I also hope you
will send me the strongest possible lobby reform bill, and I'll sign that,
too. We should require lobbyists to tell the people for whom they work what
they're spending, what they want. We should also curb the role of big money
in elections by capping the cost of campaigns and limiting the influence of
PAC's.

And as I have said for three years, we should work to open the air waves so
that they can be an instrument of democracy not a weapon of destruction by
giving free TV time to candidates for public office.

When the last Congress killed political reform last year, it was reported
in the press that the lobbyists actually stood in the halls of this sacred
building and cheered. This year, let's give the folks at home something to
cheer about.

More important, I think we all agree that we have to change the way the
Government works. Let's make it smaller, less costly and smarter. Leaner
not meaner.

I just told the Speaker the equal time doctrine's alive and well.

The Role Of Government

The New Covenant approach to governing is as different from the old
bureaucratic way as the computer is from the manual typewriter. The old way
of governing around here protected organized interests; we should look out
for the interests of ordinary people. The old way divided us by interests,
constituency or class; the New Covenant way should unite us behind a common
vision of what's best for our country.

The old way dispensed services through large, top-down, inflexible
bureaucracies. The New Covenant way should shift these resources and
decision making from bureaucrats to citizens, injecting choice and
competition and individual responsibility into national policy.

The old way of governing around here actually seemed to reward failure. The
New Covenant way should have built-in incentives to reward success.

The old way was centralized here in Washington. The New Covenant way must
take hold in the communities all across America, and we should help them to
do that.

Our job here is to expand opportunity, not bureaucracy, to empower people
to make the most of their own lives and to enhance our security here at
home and abroad.

We must not ask Government to do what we should do for ourselves. We should
rely on Government as a partner to help us to do more for ourselves and for
each other.

I hope very much that as we debate these specific and exciting matters, we
can go beyond the sterile discussion between the illusion that there is
somehow a program for every problem, on the one hand, and the other
illusion that the Government is the source of every problem that we have.

Our job is to get rid of yesterday's Government so that our own people can
meet today's and tomorrow's needs.

And we ought to do it together.

You know, for years before I became President, I heard others say they
would cut Government and how bad it was. But not much happened.

We actually did it. We cut over a quarter of a trillion dollars in
spending, more than 300 domestic programs, more than 100,000 positions from
the Federal bureaucracy in the last two years alone.

Based on decisions already made, we will have cut a total of more than a
quarter of a million positions from the Federal Government, making it the
smallest it has been since John Kennedy was president, by the time I come
here again next year.

Under the leadership of Vice President Gore, our initiatives have already
saved taxpayers $ 63 billion. The age of the $ 500 hammer and the ashtray
you can break on David Letterman is gone. Deadwood programs like mohair
subsidies are gone. We've streamlined the Agriculture Department by
reducing it by more than 1,200 offices. We've slashed the small-business
loan form from an inch thick to a single page. We've thrown away the
Government's 10,000-page personnel manual.

And the Government is working better in important ways. FEMA, the Federal
Emergency Management Agency, has gone from being a disaster to helping
people in disaster.

You can ask the farmers in the Middle West who fought the flood there or
the people in California who've dealt with floods and earthquakes and fires
and they'll tell you that.

Government workers, working hand-in-hand with private business, rebuilt
Southern California's fractured freeways in record time and under budget.

And because the Federal Government moved fast, all but one of the 5,600
schools damaged in the earthquake are back in business.

Now, there are a lot of other things that I could talk about. I want to
just mention one because it'll be discussed here in the next few weeks.

University administrators all over the country have told me that they are
saving weeks and weeks of bureaucratic time now because of our direct
college loan program, which makes college loans cheaper and more affordable
with better repayment terms for students, costs the Government less and
cuts out paperwork and bureaucracy for the Government and for the
universities.

We shouldn't cap that program, we should give every college in America the
opportunity to be a part of it.

Previous Government programs gather dust; the reinventing Government report
is getting results. And we're not through--there's going to be a second
round of reinventing Government.

We propose to cut $ 130 billion in spending by shrinking departments,
extending our freeze on domestic spending, cutting 60 public housing
programs down to 3, getting rid of over a hundred programs we do not need
like the Interstate Commerce Commission and the Helium Reserve Program.

And we're working on getting rid of unnecessary regulations and making them
more sensible. The programs and regulations that have outlived their
usefulness should go. We have to cut yesterday's Government to help solve
tomorrow's problems.

And we need to get Government closer to the people it's meant to serve. We
need to help move programs down to the point where states and communities
and private citizens in the private sector can do a better job. If they can
do it, we ought to let them do it. We should get out of the way and let
them do what they can do better.

Community Empowerment

Taking power away from Federal bureaucracies and giving it back to
communities and individuals is something everyone should be able to be for.
It's time for Congress to stop passing onto the states the cost of
decisions we make here in Washington.

I know there are still serious differences over the details of the unfunded
mandates legislation but I want to work with you to make sure we pass a
reasonable bill which will protect the national interest and give justified
relief where we need to give it.

For years, Congress concealed in the budget scores of pet spending
projects. Last year was no different. There was a million dollars to study
stress in plants and $ 12 million for a tick removal program that didn't
work. It's hard to remove ticks; those of us who've had them know.

But I'll tell you something, if you'll give me the line-item veto, I'll
remove some of that unnecessary spending.

But, I think we should all remember, and almost all of us would agree, that
Government still has important responsibilities.

Our young people--we should think of this when we cut--our young people
hold our future in their hands. We still owe a debt to our veterans. And
our senior citizens have made us what we are.

Budget

Now, my budget cuts a lot. But it protects education, veterans, Social
Security and Medicare, and I hope you will do the same thing. You should,
and I hope you will.

And when we give more flexibility to the states, let us remember that there
are certain fundamental national needs that should be addressed in every
state, north and south, east and west.

Immunization against childhood disease, school lunches in all our schools,
Head Start, medical care and nutrition for pregnant women and infants--all
these things are in the national interest.

I applaud your desire to get rid of costly and unnecessary regulations, but
when we deregulate let's remember what national action in the national
interest has given us: safer food for our families, safer toys for our
children, safer nursing homes for our parents, safer cars and highways and
safer workplaces, cleaner air and cleaner water. Do we need common sense
and fairness in our regulations? You bet we do. But we can have common
sense and still provide for safe drinking water. We can have fairness and
still clean up toxic dumps and we ought to do it.

Should we cut the deficit more? Well of course we should. Of course we
should. But we can bring it down in a way that still protects our economic
recovery and does not unduly punish people who should not be punished, but
instead should be helped.

I know many of you in this chamber support the balanced-budget amendment. I
certainly want to balance the budget. Our Administration has done more to
bring the budget down and to save money than any in a very, very long
time.

If you believe passing this amendment is the right thing to do, then you
have to be straight with the American people. They have a right to know
what you're going to cut, what taxes you're going to raise, how it's going
to affect them.

And we should be doing things in the open around here. For example,
everybody ought to know if this proposal is going to endanger Social
Security. I would oppose that, and I think most Americans would.

Welfare

Nothing is done more to undermine our sense of common responsibility than
our failed welfare system. This is one of the problems we have to face here
in Washington in our New Covenant. It rewards welfare over work, it
undermines family values, it lets millions of parents get away without
paying their child support, it keeps a minority--but a significant
minority--of the people on welfare trapped on it for a very long time.

I worked on this problem for a long time--nearly 15 years now. As a
Governor I had the honor of working with the Reagan Administration to write
the last welfare reform bill back in 1988.

In the last two years we made a good start in continuing the work of
welfare reform. Our Administration gave two dozen states the right to slash
through Federal rules and regulations to reform their own welfare systems
and to try to promote work and responsibility over welfare and dependency.

Last year, I introduced the most sweeping welfare reform plan ever
presented by an Administration. We have to make welfare what it was meant
to be--a second chance, not a way of life.

We have to help those on welfare move to work as quickly as possible, to
provide child care and teach them skills, if that's what they need, for up
to two years. But after that, there ought to be a simple, hard rule. Anyone
who can work must go to work.

If a parent isn't paying child support, they should be forced to pay.

We should suspend driver's licenses, track them across state lines, make
them work off what they owe. That is what we should do. Governments do not
raise children, people do. And the parents must take responsibility for the
children they bring into this world.

I want to work with you, with all of you, to pass welfare reform. But our
goal must be to liberate people and lift them from dependence to
independence, from welfare to work, from mere childbearing to responsible
parenting. Our goal should not be to punish them because they happen to be
poor.

We should--we should require work and mutual responsibility. But we
shouldn't cut people off just because they're poor, they're young or even
because they're unmarried. We should promote responsibility by requiring
young mothers to live at home with their parents or in other supervised
settings, by requiring them to finish school. But we shouldn't put them and
their children out on the street.

And I know all the arguments pro and con and I have read and thought about
this for a long time: I still don't think we can, in good conscience,
punish poor children for the mistakes of their parents.

My fellow Americans, every single survey shows that all the American people
care about this, without regard to party or race or region. So let this be
the year we end welfare as we know it.

But also let this be the year that we are all able to stop using this issue
to divide America.

No one is more eager to end welfare.

I may be the only President who's actually had the opportunity to sit in
the welfare office, who's actually spent hours and hours talking to people
on welfare, and I am telling you the people who are trapped on it know it
doesn't work. They also want to get off.

So we can promote, together, education and work and good parenting. I have
no problem with punishing bad behavior or the refusal to be a worker or a
student or a responsible parent. I just don't want to punish poverty and
past mistakes. All of us have made our mistakes and none of us can change
our yesterdays, but every one of us can change our tomorrows.

And America's best example of that may be Lynn Woolsey, who worked her way
off welfare to become a Congresswoman from the state of California.

Crime

I know the members of this Congress are concerned about crime, as are all
the citizens of our country. But I remind you that last year we passed a
very tough crime bill--longer sentences, three strikes and you're out,
almost 60 new capital punishment offenses, more prisons, more prevention,
100,000 more police--and we paid for it all by reducing the size of the
Federal bureaucracy and giving the money back to local communities to lower
the crime rate.

There may be other things we can do to be tougher on crime, to be smarter
with crime, to help to lower that rate first. Well if there are, let's talk
about them and let's do them. But let's not go back on the things that we
did last year that we know work--that we know work because the local
law-enforcement officers tell us that we did the right thing. Because local
community leaders, who've worked for years and years to lower the crime
rate, tell us that they work.

Let's look at the experience of our cities and our rural areas where the
crime rate has gone down and ask the people who did it how they did it and
if what we did last year supports the decline in the crime rate, and I am
convinced that it does, let us not go back on it, let's stick with it,
implement it--we've got four more hard years of work to do to do that.

I don't want to destroy the good atmosphere in the room or in the country
tonight, but I have to mention one issue that divided this body greatly
last year. The last Congress also passed the Brady bill and in the crime
bill the ban on 19 assault weapons.

I don't think it's a secret to anybody in this room that several members of
the last Congress who voted for that aren't here tonight because they voted
for it. And I know, therefore, that some of you that are here because they
voted for it are under enormous pressure to repeal it. I just have to tell
you how I feel about it.

The members who voted for that bill and I would never do anything to
infringe on the right to keep and bear arms to hunt and to engage in other
appropriate sporting activities. I've done it since I was a boy, and I'm
going to keep right on doing it until I can't do it anymore.

But a lot of people laid down their seats in Congress so that police
officers and kids wouldn't have to lay down their lives under a hail of
assault-weapon attacks, and I will not let that be repealed. I will not let
it be repealed.

I'd like to talk about a couple of other issues we have to deal with. I
want us to cut more spending, but I hope we won't cut Government programs
that help to prepare us for the new economy, promote responsibility and are
organized from the grass roots up, not by Federal bureaucracy.

The very best example of this is the National Service Corps--AmeriCorps.
It passed with strong bipartisan support and now there are 20,000 Americans
--more than ever served in one year in the Peace Corps--working all over
this country, helping person to person in local grass-roots volunteer
groups, solving problems and in the process earning some money for their
education.

This is citizenship at its best. It's good for the AmeriCorps members, but
it's good for the rest of us, too. It's the essence of the New Covenant and
we shouldn't stop it.

Illegal Immigration

All Americans, not only in the states most heavily affected, but in every
place in this country are rightly disturbed by the large numbers of illegal
aliens entering our country.

The jobs they hold might otherwise be held by citizens or legal immigrants.
The public services they use impose burdens on our taxpayers. That's why
our Administration has moved aggressively to secure our borders more, by
hiring a record number of new border guards, by deporting twice as many
criminal aliens as ever before, by cracking down on illegal hiring, by
barring welfare benefits to illegal aliens.

In the budget I will present to you, we will try to do more to speed the
deportation of illegal aliens who are arrested for crimes, to better
identify illegal aliens in the workplace as recommended by the commission
headed by former Congresswoman Barbara Jordan.

We are a nation of immigrants, but we are also a nation of laws. It is
wrong and ultimately self-defeating for a nation of immigrants to permit
the kind of abuse of our immigration laws we have seen in recent years, and
we must do more to stop it.

The most important job of our Government in this new era is to empower the
American people to succeed in the global economy. America has always been a
land of opportunity, a land where, if you work hard, you can get ahead.
We've become a great middle-class country; middle-class values sustain us.
We must expand that middle class and shrink the underclass even as we do
everything we can to support the millions of Americans who are already
successful in the new economy.

America is once again the world's strongest economic power: almost six
million new jobs in the last two years, exports booming, inflation down,
high-wage jobs are coming back. A record number of American entrepreneurs
are living the American dream.

If we want it to stay that way, those who work and lift our nation must
have more of its benefits.

Today, too many of those people are being left out. They're working harder
for less. They have less security, less income, less certainty that they
can even afford a vacation, much less college for their kids or retirement
for themselves.

We cannot let this continue. If we don't act, our economy will probably
keep doing what it's been doing since about 1978, when the income growth
began to go to those at the very top of our economic scale. And the people
in the vast middle got very little growth and people who worked like crazy
but were on the bottom then, fell even further and further behind in the
years afterward, no matter how hard they worked.

We've got to have a Government that can be a real partner in making this
new economy work for all of our people, a Government that helps each and
every one of us to get an education and to have the opportunity to renew
our skills.

Education

That's why we worked so hard to increase educational opportunities in the
last two years from Head Start to public schools to apprenticeships for
young people who don't go to college, to making college loans more
available and more affordable.

That's the first thing we have to do: We've got to do something to empower
people to improve their skills.

Taxes

Second thing we ought to do is to help people raise their incomes
immediately by lowering their taxes.

We took the first step in 1993 with a working family tax cut for 15 million
families with incomes under $ 27,000, a tax cut that this year will average
about $ 1,000 a family.

And we also gave tax reductions to most small and new businesses. Before we
could do more than that, we first had to bring down the deficit we
inherited and we had to get economic growth up. Now we've done both, and
now we can cut taxes in a more comprehensive way.

But tax cuts should reinforce and promote our first obligation: to empower
our citizens through education and training to make the most of their own
lives. The spotlight should shine on those who make the right choices for
themselves, their families and their communities.

Middle Class Bill Of Rights

I have proposed a middle-class bill of rights, which should properly be
called the bill of rights and responsibilities, because its provisions only
benefit those who are working to educate and raise their children and to
educate themselves. It will, therefore, give needed tax relief and raise
incomes, in both the short run and the long run, in a way that benefits all
of us.

There are four provisions:

First, a tax deduction for all education and training after high school. If
you think about it, we permit businesses to deduct their investment, we
permit individuals to deduct interest on their home mortgages, but today an
education is even more important to the economic well-being of our whole
country than even those things are. We should do everything we can to
encourage it, and I hope you will support it.

Second, we ought to cut taxes $ 500 for families with children under 13.

Third, we ought to foster more savings and personal responsibility by
permitting people to establish an individual retirement account and
withdraw from it tax free for the cost of education, health care,
first-time home buying or the care of a parent.

And fourth, we should pass a G.I. bill for America's workers. We propose to
collapse nearly 70 Federal programs and not give the money to the states
but give the money directly to the American people, offer vouchers to them
so that they--if they're laid off or if they're working for a very low
wage--can get a voucher worth $ 2,600 a year for up to two years to go to
their local community colleges or wherever else they want to get the skills
they need to improve their lives. Let's empower people in this way. Move it
from the Government directly to the workers of America.

Cutting The Deficit Now

Any one of us can call for a tax cut, but I won't accept one that explodes
the deficit or puts our recovery at risk. We ought to pay for our tax cuts
fully and honestly. Just two years ago it was an open question whether we
would find the strength to cut the deficit.

Thanks to the courage of the people who were here then, many of whom didn't
return, we did cut the deficit. We began to do what others said would not
be done: We cut the deficit by over $ 600 billion, about $ 10,000 for every
family in this country. It's coming down three years in a row for the first
time since Mr. Truman was President and I don't think anybody in America
wants us to let it explode again.

In the budget I will send you, the middle-class bill of rights is fully
paid for by budget cuts in bureaucracy, cuts in programs, cuts in special
interest subsidies. And the spending cuts will more than double the tax
cuts. My budget pays for the middle-class bill of rights without any cuts
in Medicare, and I will oppose any attempts to pay for tax cuts with
Medicare cuts. That's not the right thing to do.

I know that a lot of you have your own ideas about tax relief. And some of
them, I find quite interesting. I really want to work with all of you.

My tests for our proposals will be: Will it create jobs and raise incomes?
Will it strengthen our families and support our children? Is it paid for?
Will it build the middle class and shrink the underclass?

If it does, I'll support it. But if it doesn't, I won't.

Minimum Wage

The goal of building the middle class and shrinking the underclass is also
why I believe that you should raise the minimum wage.

It rewards work--two and a half million Americans, often women with
children, are working out there today for four-and-a-quarter an hour. In
terms of real buying power, by next year, that minimum wage will be at a
40-year low. That's not my idea of how the new economy ought to work.

Now I studied the arguments and the evidence for and against a minimum-wage
increase. I believe the weight of the evidence is that a modest increase
does not cost jobs and may even lure people back into the job market. But
the most important thing is you can't make a living on $ 4.25 an hour. Now
--especially if you have children, even with the working families tax cut
we passed last year.

In the past, the minimum wage has been a bipartisan issue and I think it
should be again. So I want to challenge you to have honest hearings on
this, to get together to find a way to make the minimum wage a living
wage.

Members of Congress have been here less than a month but by the end of the
week--28 days into the new year--every member of Congress will have
earned as much in congressional salary as a minimum-wage worker makes all
year long.

Everybody else here, including the President, has something else that too
many Americans do without and that's health care.

Health Care

Now, last year we almost came to blows over health care, but we didn't do
anything. And the cold, hard fact is that since last year--since I was
here--another 1.1 million Americans in working families have lost their
health care. And the cold, hard fact is that many millions more--most of
them farmers and small business people and self-employed people--have
seen their premiums skyrocket, their co-pays and deductibles go up.

There's a whole bunch of people in this country that in the statistics have
health insurance but really what they've got is a piece of paper that says
they won't lose their home if they get sick.

Now I still believe our country has got to move toward providing health
security for every American family, but--but I know that last year, as the
evidence indicates, we bit off more than we could chew.

So I'm asking you that we work together. Let's do it step by step. Let's do
whatever we have to do to get something done. Let's at least pass
meaningful insurance reform so that no American risks losing coverage for
facing skyrocketing prices but that nobody loses their coverage because
they face high prices or unavailable insurance when they change jobs or
lose a job or a family member gets sick.

I want to work together with all of you who have an interest in this: with
the Democrats who worked on it last time, with the Republican leaders like
Senator Dole who has a longtime commitment to health care reform and made
some constructive proposals in this area last year. We ought to make sure
that self-employed people in small businesses can buy insurance at more
affordable rates through voluntary purchasing pools. We ought to help
families provide long-term care for a sick parent to a disabled child. We
can work to help workers who lose their jobs at least keep their health
insurance coverage for a year while they look for work, and we can find a
way--it may take some time, but we can find a way--to make sure that our
children have health care.

You know, I think everybody in this room, without regard to party, can be
proud of the fact that our country was rated as having the world's most
productive economy for the first time in nearly a decade, but we can't be
proud of the fact that we're the only wealthy country in the world that has
a smaller percentage of the work force and their children with health
insurance today than we did 10 years ago--the last time we were the most
productive economy in the world.

So let's work together on this. It is too important for politics as usual.

Much of what the American people are thinking about tonight is what we've
already talked about. A lot of people think that the security concerns of
America today are entirely internal to our borders, they relate to the
security of our jobs and our homes and our incomes and our children, our
streets, our health and protecting those borders.

Foreign Policy

Now that the Cold War has passed, it's tempting to believe that all the
security issues, with the possible exception of trade, reside here at home.
But it's not so. Our security still depends on our continued world
leadership for peace and freedom and democracy. We still can't be strong at
home unless we're strong abroad.

Mexico

The financial crisis in Mexico is a case in point. I know it's not popular
to say it tonight but we have to act, not for the Mexican people but for
the sake of the millions of Americans whose livelihoods are tied to
Mexico's well-being. If we want to secure American jobs, preserve American
exports, safeguard America's borders then we must pass the stabilization
program and help to put Mexico back on track.

Now let me repeat: it's not a loan, it's not foreign aid, it's not a
bail-out. We'll be given a guarantee like co-signing a note with good
collateral that will cover our risk.

This legislation is the right thing for America. That's why the bipartisan
leadership has supported it. And I hope you in Congress will pass it
quickly. It is in our interest and we can explain it to the American
people, because we're going to do it in the right way.

Russia

You know, tonight this is the first State of the Union address ever
delivered since the beginning of the cold war when not a single Russian
missile is pointed at the children of America.

And along with the Russians, we're on our way to destroying the missiles
and the bombers that carry 9,000 nuclear warheads. We've come so far so
fast in this post-cold-war world that it's easy to take the decline of the
nuclear threat for granted. But it's still there, and we aren't finished
yet.

This year, I'll ask the Senate to approve START II to eliminate weapons
that carry 5,000 more warheads. The United States will lead the charge to
extend indefinitely the Nuclear Nonproliferation Treaty, to enact a
comprehensive nuclear test ban, and to eliminate chemical weapons.

North Korea

To stop and roll back North Korea's potentially deadly nuclear program,
we'll continue to implement the agreement we have reached with that nation.
It's smart, it's tough, it's a deal based on continuing inspection with
safeguards for our allies and ourselves.

This year, I'll submit to Congress comprehensive legislation to strengthen
our hand in combating terrorists, whether they strike at home or abroad. As
the cowards who bombed the World Trade Center found out, this country will
hunt down terrorists and bring them to justice.

Middle East

Just this week, another horrendous terrorist act in Israel killed 19 and
injured scores more. On behalf of the American people and all of you, I
send our deepest sympathy to the families of the victims. I know that in
the face of such evil, it is hard for the people in the Middle East to go
forward. But the terrorists represent the past, not the future. We must and
we will pursue a comprehensive peace between Israel and all her neighbors
in the Middle East.

Accordingly, last night I signed an executive order that will block the
assets in the United States of terrorist organizations that threaten to
disrupt the peace process. It prohibits financial transactions with these
groups.

And tonight I call on all our allies in peace-loving nations throughout the
world to join us with renewed fervor in a global effort to combat
terrorism, we cannot permit the future to be marred by terror and fear and
paralysis.

Defense

From the day I took the oath of office, I pledged that our nation would
maintain the best-equipped, best-trained and best-prepared military on
earth. We have and they are. They have managed the dramatic downsizing of
our forces after the cold war with remarkable skill and spirit. But to make
sure our military is ready for action and to provide the pay and the
quality of life the military and their families deserve, I'm asking the
Congress to add $ 25 billion in defense spending over the next six years.

I have visited many bases at home and around the world since I became
President. Tonight I repeat that request with renewed conviction. We ask a
very great deal of our armed forces. Now that they are smaller in number,
we ask more of them. They go out more often to more different places and
stay longer. They are called to service in many, many ways, and we must
give them and their families what the times demand and what they have
earned.

Just think about what our troops have done in the last year, showing
America at its best, helping to save hundreds of thousands of people in
Rwanda, moving with lightning speed to head off another threat to Kuwait,
giving freedom and democracy back to the people of Haiti.

We have proudly supported peace and prosperity and freedom from South
Africa to Northern Ireland, from Central and Eastern Europe to Asia, from
Latin America to the Middle East. All these endeavors are good in those
places but they make our future more confident and more secure.

Well, my fellow Americans, that's my agenda for America's future: expanding
opportunity not bureaucracy, enhancing security at home and abroad,
empowering our people to make the most of their own lives.

It's ambitious and achievable. But it's not enough.

We even need more than new ideas for changing the world or equipping
Americans to compete in the new economy, more than a Government that's
smaller, smarter and wiser, more than all the changes we can make in
Government and in the private sector from the outside in.

Values And Voices

Our fortunes and our prosperity also depend upon our ability to answer some
questions from within--from the values and voices that speak to our hearts
as well as our heads, voices that tell us we have to do more to accept
responsibility for ourselves and our families, for our communities, and
yes, for our fellow citizens.

We see our families and our communities all over this country coming apart.
And we feel the common ground shifting from under us. The PTA, the town
hall meeting, the ball park--it's hard for a lot of overworked parents to
find the time and space for those things that strengthen the bonds of trust
and cooperation.

Too many of our children don't even have parents and grandparents who can
give them those experiences that they need to build their own character and
their sense of identity. We all know that while we here in this chamber can
make a difference on those things, that the real differences will be made
by our fellow citizens where they work and where they live.

And it'll be made almost without regard to party. When I used to go to the
softball park in Little Rock to watch my daughter's league and people would
come up to me--fathers and mothers--and talk to me, I can honestly say I
had no idea whether 90 percent of them were Republicans or Democrats.

When I visited the relief centers after the floods in California, Northern
California, last week, a woman came up to me and did something that very
few of you would do. She hugged me and said, "Mr. President, I'm a
Republican, but I'm glad you're here."

Now, why? We can't wait for disasters to act the way we used to act every
day. Because as we move into this next century, everybody matters. We don't
have a person to waste. And a lot of people are losing a lot of chances to
do better.

That means that we need a New Covenant for everybody--for our corporate
and business leaders, we're going to work here to keep bringing the deficit
down, to expand markets, to support their success in every possible way.
But they have an obligation: when they're doing well, to keep jobs in our
communities and give their workers a fair share of the prosperity they
generate.

For people in the entertainment industry in this country, we applaud your
creativity and your worldwide success and we support your freedom of
expression but you do have a responsibility to assess the impact of your
work and to understand the damage that comes from the incessant,
repetitive, mindless violence and irresponsible conduct that permeates our
media all the time.

We've got to ask our community leaders and all kinds of organizations to
help us stop our most serious social problem: the epidemic of teen
pregnancies and births where there is no marriage. I have sent to Congress
a plan to target schools all over this country with anti-pregnancy programs
that work. But government can only do so much. Tonight, I call on parents
and leaders all across this country to join together in a national campaign
against teen pregnancy to make a difference. We can do this and we must.

And I would like to say a special word to our religious leaders. You know,
I'm proud of the fact that the United States has more house of worship per
capita than any country in the world. These people, who lead our houses of
worship, can ignite their congregations to carry their faith into action,
can reach out to all of our children, to all of the people in distress, to
those who have been savaged by the breakdown of all we hold dear, because
so much of what must be done must come from the inside out. And our
religious leaders and their congregations can make all the difference. They
have a role in the New Covenant as well.

There must be more responsibility for all of our citizens. You know it
takes a lot of people to help all the kids in trouble stay off the streets
and in school. It takes a lot of people to build the Habitat for Humanity
houses that the Speaker celebrates on his lapel pin. It takes a lot of
people to provide the people power for all the civic organizations in this
country that made our communities mean so much to most of us when we were
kids. It takes every parent to teach the children the difference between
right and wrong and to encourage them to learn and grow and to say no to
the wrong things but also to believe that they can be whatever they want to
be.

I know it's hard when you're working harder for less, when you're under
great stress, to do these things. A lot of our people don't have the time
or the emotional stress they think to do the work of citizenship. Most of
us in politics haven't helped very much. For years, we've mostly treated
citizens like they were consumers or spectators, sort of political couch
potatoes who were supposed to watch the TV ads--either promise them
something for nothing or play on their fears and frustrations. And more and
more of our citizens now get most of their information in very negative and
aggressive ways that is hardly conducive to honest and open conversations.
But the truth is we have got to stop seeing each other as enemies just
because we have different views.

If you go back to the beginning of this country, the great strength of
America, as de Tocqueville pointed out when he came here a long time ago,
has always been our ability to associate with people who were different
from ourselves and to work together to find common ground. And in this day
everybody has a responsibility to do more of that. We simply cannot wait
for a tornado, a fire or a flood to behave like Americans ought to behave
in dealing with one another.

I want to finish up here by pointing out some folks that are up with the
First Lady that represent what I'm trying to talk about. Citizens. I have
no idea what their party affiliation is or who they voted for in the last
election, but they represent what we ought to be doing.

Cindy Perry teaches second-graders to read in AmeriCorps in rural Kentucky.
She gains when she gives. She's a mother of four.

She says that her service inspired her to get her high school equivalency
last year. She was married when she was a teen-ager. Stand up, Cindy. She
married when she was a teen-ager. She had four children, but she had time
to serve other people, to get her high school equivalency and she's going
to use her AmeriCorps money to go back to college.

Steven Bishop is the police chief of Kansas City. He's been a national
leader--stand up Steve. He's been a national leader in using more police
in community policing and he's worked with AmeriCorps to do it, and the
crime rate in Kansas City has gone down as a result of what he did.

Cpl. Gregory Depestre went to Haiti as part of his adopted country's force
to help secure democracy in his native land. And I might add we must be the
only country in the world that could have gone to Haiti and taken
Haitian-Americans there who could speak the language and talk to the
people, and he was one of them and we're proud of him.

The next two folks I've had the honor of meeting and getting to know a
little bit. The Rev. John and the Rev. Diana Cherry of the A.M.E. Zion
Church in Temple Hills, Md. I'd like to ask them to stand. I want to tell
you about them. In the early 80's they left Government service and formed a
church in a small living room in a small house in the early 80's. Today
that church has 17,000 members. It is one of the three or four biggest
churches in the entire United States. It grows by 200 a month.

They do it together. And the special focus of their ministry is keeping
families together. They are--Two things they did make a big impression on
me. I visited their church once and I learned they were building a new
sanctuary closer to the Washington, D.C., line, in a higher-crime,
higher-drug-rate area because they thought it was part of their ministry to
change the lives of the people who needed them. Second thing I want to say
is that once Reverend Cherry was at a meeting at the White House with some
other religious leaders and he left early to go back to his church to
minister to 150 couples that he had brought back to his church from all
over America to convince them to come back together to save their marriages
and to raise their kids. This is the kind of work that citizens are doing
in America. We need more of it and it ought to be lifted up and supported.

The last person I want to introduce is Jack Lucas from Hattiesburg,
Mississippi. Jack, would you stand up. Fifty years ago in the sands of Iwo
Jima, Jack Lucas taught and learned the lessons of citizenship. On February
the 20th, 1945, he and three of his buddies encountered the enemy and two
grenades at their feet. Jack Lucas threw himself on both of them. In that
moment he saved the lives of his companions and miraculously in the next
instant a medic saved his life. He gained a foothold for freedom and at the
age of 17, just a year older than his grandson, who's up there with him
today, and his son, who is a West Point graduate and a veteran, at 17, Jack
Lucas became the youngest marine in history and the youngest soldier in
this century to win the Congressional Medal of Honor. All these years
later, yesterday, here's what he said about that day: Didn't matter where
you were from or who you were. You relied on one another. You did it for
your country. We all gain when we give and we reap what we sow. That's at
the heart of this New Covenant. Responsibility, opportunity and
citizenship.

More than stale chapters in some remote civic book they're still the virtue
by which we can fulfill ourselves and reach our God-given potential and be
like them. And also to fulfill the eternal promise of this country, the
enduring dream from that first and most-sacred covenant. I believe every
person in this country still believes that we are created equal and given
by our creator the right to life, liberty and the pursuit of happiness.

This is a very, very great country and our best days are still to come.
Thank you and God bless you all.