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

Thank you for allowing me to delay my address until this evening. We paused
together to mourn and honor the valor of our seven Challenger heroes. And I
hope that we are now ready to do what they would want us to do: Go forward,
America, and reach for the stars. We will never forget those brave seven,
but we shall go forward.

Mr. Speaker, before I begin my prepared remarks, may I point out that
tonight marks the 10th and last State of the Union Message that you've
presided over. And on behalf of the American people, I want to salute you
for your service to Congress and country. Here's to you!

I have come to review with you the progress of our nation, to speak of
unfinished work, and to set our sights on the future. I am pleased to
report the state of our Union is stronger than a year ago and growing
stronger each day. Tonight we look out on a rising America, firm of heart,
united in spirit, powerful in pride and patriotism. America is on the move!
But it wasn't long ago that we looked out on a different land: locked
factory gates, long gasoline lines, intolerable prices, and interest rates
turning the greatest country on Earth into a land of broken dreams.
Government growing beyond our consent had become a lumbering giant,
slamming shut the gates of opportunity, threatening to crush the very roots
of our freedom. What brought America back? The American people brought us
back with quiet courage and common sense, with undying faith that in this
nation under God the future will be ours; for the future belongs to the
free.

Tonight the American people deserve our thanks for 37 straight months of
economic growth, for sunrise firms and modernized industries creating 9
million new jobs in 3 years, interest rates cut in half, inflation falling
over from 12 percent in 1980 to under 4 today, and a mighty river of good
works--a record $74 billion in voluntary giving just last year alone. And
despite the pressures of our modern world, family and community remain the
moral core of our society, guardians of our values and hopes for the
future. Family and community are the costars of this great American
comeback. They are why we say tonight: Private values must be at the heart
of public policies.

What is true for families in America is true for America in the family of
free nations. History is no captive of some inevitable force. History is
made by men and women of vision and courage. Tonight freedom is on the
march. The United States is the economic miracle, the model to which the
world once again turns. We stand for an idea whose time is now: Only by
lifting the weights from the shoulders of all can people truly prosper and
can peace among all nations be secure. Teddy Roosevelt said that a nation
that does great work lives forever. We have done well, but we cannot stop
at the foothills when Everest beckons. It's time for America to be all that
we can be.

We speak tonight of an agenda for the future, an agenda for a safer, more
secure world. And we speak about the necessity for actions to steel us for
the challenges of growth, trade, and security in the next decade and the
year 2000. And we will do it--not by breaking faith with bedrock principles
but by breaking free from failed policies. Let us begin where storm clouds
loom darkest--right here in Washington, DC. This week I will send you our
detailed proposals; tonight let us speak of our responsibility to redefine
government's role: not to control, not to demand or command, not to contain
us, but to help in times of need and, above all, to create a ladder of
opportunity to full employment so that all Americans can climb toward
economic power and justice on their own.

But we cannot win the race to the future shackled to a system that can't
even pass a Federal budget. We cannot win that race held back by
horse-and-buggy programs that waste tax dollars and squander human
potential. We cannot win that race if we're swamped in a sea of red ink.
Now, Mr. Speaker, you know, I know, and the American people know the
Federal budget system is broken. It doesn't work. Before we leave this
city, let's you and I work together to fix it, and then we can finally give
the American people a balanced budget.

Members of Congress, passage of Gramm-Rudman-Hollings gives us an historic
opportunity to achieve what has eluded our national leadership for decades:
forcing the Federal Government to live within its means. Your schedule now
requires that the budget resolution be passed by April 15th, the very day
America's families have to foot the bill for the budgets that you produce.
How often we read of a husband and wife both working, struggling from
paycheck to paycheck to raise a family, meet a mortgage, pay their taxes
and bills. And yet some in Congress say taxes must be raised. Well, I'm
sorry; they're asking the wrong people to tighten their belts. It's time we
reduce the Federal budget and left the family budget alone. We do not face
large deficits because American families are undertaxed; we face those
deficits because the Federal Government overspends.

The detailed budget that we will submit will meet the Gramm-Rudman-Hollings
target for deficit reductions, meet our commitment to ensure a strong
national defense, meet our commitment to protect Social Security and the
truly less fortunate, and, yes, meet our commitment to not raise taxes. How
should we accomplish this? Well, not by taking from those in need. As
families take care of their own, government must provide shelter and
nourishment for those who cannot provide for themselves. But we must revise
or replace programs enacted in the name of compassion that degrade the
moral worth of work, encourage family breakups, and drive entire
communities into a bleak and heartless dependency. Gramm-Rudman-Hollings
can mark a dramatic improvement. But experience shows that simply setting
deficit targets does not assure they'll be met. We must proceed with Grace
commission reforms against waste.

And tonight I ask you to give me what 43 Governors have: Give me a
line-item veto this year. Give me the authority to veto waste, and I'll
take the responsibility, I'll make the cuts, I'll take the heat. This
authority would not give me any monopoly power, but simply prevent spending
measures from sneaking through that could not pass on their own merit. And
you can sustain or override my veto; that's the way the system should work.
Once we've made the hard choices, we should lock in our gains with a
balanced budget amendment to the Constitution.

I mentioned that we will meet our commitment to national defense. We must
meet it. Defense is not just another budget expense. Keeping America
strong, free, and at peace is solely the responsibility of the Federal
Government; it is government's prime responsibility. We have devoted 5
years trying to narrow a dangerous gap born of illusion and neglect, and
we've made important gains. Yet the threat from Soviet forces, conventional
and strategic, from the Soviet drive for domination, from the increase in
espionage and state terror remains great. This is reality. Closing our eyes
will not make reality disappear. We pledged together to hold real growth in
defense spending to the bare minimum. My budget honors that pledge, and I'm
now asking you, the Congress, to keep its end of the bargain. The Soviets
must know that if America reduces her defenses, it will be because of a
reduced threat, not a reduced resolve.

Keeping America strong is as vital to the national security as controlling
Federal spending is to our economic security. But, as I have said before,
the most powerful force we can enlist against the Federal deficit is an
ever-expanding American economy, unfettered and free. The magic of
opportunity--unreserved, unfailing, unrestrained--isn't this the calling
that unites us? I believe our tax rate cuts for the people have done more
to spur a spirit of risk-taking and help America's economy break free than
any program since John Kennedy's tax cut almost a quarter century ago.

Now history calls us to press on, to complete efforts for an historic tax
reform providing new opportunity for all and ensuring that all pay their
fair share, but no more. We've come this far. Will you join me now, and
we'll walk this last mile together? You know my views on this. We cannot
and we will not accept tax reform that is a tax increase in disguise. True
reform must be an engine of productivity and growth, and that means a top
personal rate no higher than 35 percent. True reform must be truly fair,
and that means raising personal exemptions to $2,000. True reform means a
tax system that at long last is profamily, projobs, profuture, and
pro-America.

As we knock down the barriers to growth, we must redouble our efforts for
freer and fairer trade. We have already taken actions to counter unfair
trading practices and to pry open closed foreign markets. We will continue
to do so. We will also oppose legislation touted as providing protection
that in reality pits one American worker against another, one industry
against another, one community against another, and that raises prices for
us all. If the United States can trade with other nations on a level
playing field, we can outproduce, outcompete, and outsell anybody, anywhere
in the world.

The constant expansion of our economy and exports requires a sound and
stable dollar at home and reliable exchange rates around the world. We must
never again permit wild currency swings to cripple our farmers and other
exporters. Farmers, in particular, have suffered from past unwise
government policies. They must not be abandoned with problems they did not
create and cannot control. We've begun coordinating economic and monetary
policy among our major trading partners. But there's more to do, and
tonight I am directing Treasury Secretary Jim Baker to determine if the
nations of the world should convene to discuss the role and relationship of
our currencies.

Confident in our future and secure in our values, Americans are striving
forward to embrace the future. We see it not only in our recovery but in 3
straight years of falling crime rates, as families and communities band
together to fight pornography, drugs, and lawlessness and to give back to
their children the safe and, yes, innocent childhood they deserve. We see
it in the renaissance in education, the rising SAT scores for 3 years--last
year's increase, the greatest since 1963. It wasn't government and
Washington lobbies that turned education around; it was the American people
who, in reaching for excellence, knew to reach back to basics. We must
continue the advance by supporting discipline in our schools, vouchers that
give parents freedom of choice; and we must give back to our children their
lost right to acknowledge God in their classrooms.

We are a nation of idealists, yet today there is a wound in our national
conscience. America will never be whole as long as the right to life
granted by our Creator is denied to the unborn. For the rest of my time, I
shall do what I can to see that this wound is one day healed.

As we work to make the American dream real for all, we must also look to
the condition of America's families. Struggling parents today worry how
they will provide their children the advantages that their parents gave
them. In the welfare culture, the breakdown of the family, the most basic
support system, has reached crisis proportions--in female and child
poverty, child abandonment, horrible crimes, and deteriorating schools.
After hundreds of billions of dollars in poverty programs, the plight of
the poor grows more painful. But the waste in dollars and cents pales
before the most tragic loss: the sinful waste of human spirit and
potential. We can ignore this terrible truth no longer. As Franklin
Roosevelt warned 51 years ago, standing before this Chamber, he said,
"Welfare is a narcotic, a subtle destroyer of the human spirit." And we
must now escape the spider's web of dependency.

Tonight I am charging the White House Domestic Council to present me by
December 1, 1986, an evaluation of programs and a strategy for immediate
action to meet the financial, educational, social, and safety concerns of
poor families. I'm talking about real and lasting emancipation, because the
success of welfare should be judged by how many of its recipients become
independent of welfare. Further, after seeing how devastating illness can
destroy the financial security of the family, I am directing the Secretary
of Health and Human Services, Dr. Otis Bowen, to report to me by year end
with recommendations on how the private sector and government can work
together to address the problems of affordable insurance for those whose
life savings would otherwise be threatened when catastrophic illness
strikes.

And tonight I want to speak directly to America's younger generation,
because you hold the destiny of our nation in your hands. With all the
temptations young people face, it sometimes seems the allure of the
permissive society requires superhuman feats of self-control. But the call
of the future is too strong, the challenge too great to get lost in the
blind alleyways of dissolution, drugs, and despair. Never has there been a
more exciting time to be alive, a time of rousing wonder and heroic
achievement. As they said in the film "Back to the Future," "Where we're
going, we don't need roads."

Well, today physicists peering into the infinitely small realms of
subatomic particles find reaffirmations of religious faith. Astronomers
build a space telescope that can see to the edge of the universe and
possibly back to the moment of creation. So, yes, this nation remains fully
committed to America's space program. We're going forward with our shuttle
flights. We're going forward to build our space station. And we are going
forward with research on a new Orient Express that could, by the end of the
next decade, take off from Dulles Airport, accelerate up to 25 times the
speed of sound, attaining low Earth orbit or flying to Tokyo within 2
hours. And the same technology transforming our lives can solve the
greatest problem of the 20th century. A security shield can one day render
nuclear weapons obsolete and free mankind from the prison of nuclear
terror. America met one historic challenge and went to the Moon. Now
America must meet another: to make our strategic defense real for all the
citizens of planet Earth.

Let us speak of our deepest longing for the future: to leave our children a
land that is free and just and a world at peace. It is my hope that our
fireside summit in Geneva and Mr. Gorbachev's upcoming visit to America can
lead to a more stable relationship. Surely no people on Earth hate war or
love peace more than we Americans. But we cannot stroll into the future
with childlike faith. Our differences with a system that openly proclaims
and practices an alleged right to command people's lives and to export its
ideology by force are deep and abiding. Logic and history compel us to
accept that our relationship be guided by realism--rock-hard, cleareyed,
steady, and sure. Our negotiators in Geneva have proposed a radical cut in
offensive forces by each side with no cheating. They have made clear that
Soviet compliance with the letter and spirit of agreements is essential. If
the Soviet Government wants an agreement that truly reduces nuclear arms,
there will be such an agreement.

But arms control is no substitute for peace. We know that peace follows in
freedom's path and conflicts erupt when the will of the people is denied.
So, we must prepare for peace not only by reducing weapons but by
bolstering prosperity, liberty, and democracy however and wherever we can.
We advance the promise of opportunity every time we speak out on behalf of
lower tax rates, freer markets, sound currencies around the world. We
strengthen the family of freedom every time we work with allies and come to
the aid of friends under siege. And we can enlarge the family of free
nations if we will defend the unalienable rights of all God's children to
follow their dreams.

To those imprisoned in regimes held captive, to those beaten for daring to
fight for freedom and democracy--for their right to worship, to speak, to
live, and to prosper in the family of free nations--we say to you tonight:
You are not alone, freedom fighters. America will support with moral and
material assistance your right not just to fight and die for freedom but to
fight and win freedom--to win freedom in Afghanistan, in Angola, in
Cambodia, and in Nicaragua. This is a great moral challenge for the entire
free world.

Surely no issue is more important for peace in our own hemisphere, for the
security of our frontiers, for the protection of our vital interests, than
to achieve democracy in Nicaragua and to protect Nicaragua's democratic
neighbors. This year I will be asking Congress for the means to do what
must be done for that great and good cause. As (former Senator Henry
M.)Scoop Jackson, the inspiration for our Bipartisan Commission on Central
America, once said, "In matters of national security, the best politics is
no politics."

What we accomplish this year, in each challenge we face, will set our
course for the balance of the decade, indeed, for the remainder of the
century. After all we've done so far, let no one say that this nation
cannot reach the destiny of our dreams. America believes, America is ready,
America can win the race to the future--and we shall. The American dream is
a song of hope that rings through night winter air; vivid, tender music
that warms our hearts when the least among us aspire to the greatest
things: to venture a daring enterprise; to unearth new beauty in music,
literature, and art; to discover a new universe inside a tiny silicon chip
or a single human cell.

We see the dream coming true in the spirit of discovery of Richard Cavoli.
All his life he's been enthralled by the mysteries of medicine. And,
Richard, we know that the experiment that you began in high school was
launched and lost last week, yet your dream lives. And as long as it's
real, work of noble note will yet be done, work that could reduce the
harmful effects of x rays on patients and enable astronomers to view the
golden gateways of the farthest stars.

We see the dream glow in the towering talent of a 12-year-old, Tyrone Ford.
A child prodigy of gospel music, he has surmounted personal adversity to
become an accomplished pianist and singer. He also directs the choirs of
three churches and has performed at the Kennedy Center. With God as your
composer, Tyrone, your music will be the music of angels.

We see the dream being saved by the courage of the 13-year-old Shelby
Butler, honor student and member of her school's safety patrol. Seeing
another girl freeze in terror before an out-of-control school bus, she
risked her life and pulled her to safety. With bravery like yours, Shelby,
America need never fear for our future.

And we see the dream born again in the joyful compassion of a 13 year old,
Trevor Ferrell. Two years ago, age 11, watching men and women bedding down
in abandoned doorways--on television he was watching--Trevor left his
suburban Philadelphia home to bring blankets and food to the helpless and
homeless. And now 250 people help him fulfill his nightly vigil. Trevor,
yours is the living spirit of brotherly love.

Would you four stand up for a moment? Thank you, thank you. You are heroes
of our hearts. We look at you and know it's true: In this land of dreams
fulfilled, where greater dreams may be imagined, nothing is impossible, no
victory is beyond our reach, no glory will ever be too great.

So, now it's up to us, all of us, to prepare America for that day when our
work will pale before the greatness of America's champions in the 21st
century. The world's hopes rest with America's future; America's hopes rest
with us. So, let us go forward to create our world of tomorrow in faith, in
unity, and in love.

God bless you, and God bless America.

NOTE: The President spoke at 8:04 p.m. in the House Chamber of the Capitol.
He was introduced by Thomas P. O'Neill, Jr., Speaker of the House of
Representatives. The address was broadcast live on nationwide radio
and television.