The Project Gutenberg E-text of State of the Union Addresses, by William J. Clinton

I am not sure what speech is in the TelePrompTer tonight, but I hope we can talk about the State of the Union.

I ask you to begin by recalling the memory of the giant who presided over this chamber with such force and grace. Tip O'Neill liked to call himself "A Man of the House" and he surely was that. But even more, he was a man of the people, a bricklayer's son who helped to build the great American middle class. Tip O'Neill never forgot who he was, where he came from, or who sent him here. Tonight he's smiling down on us for the first time from the Lord's gallery. But in his honor, may we too also remember who we are, where we come from, and who sent us here.

If we do that we will return over and over again to the principle that if we simply give ordinary people equal opportunity, quality education, and a fair shot at the American dream, they will do extraordinary things.

We gather tonight in a world of changes so profound and rapid that all nations are tested. Our American heritage has always been to master such change, to use it to expand opportunity at home, and our leadership abroad. But for too long and in too many ways, that heritage was abandoned, and our country drifted.

For 30 years family life in America has been breaking down. For 20 years the wages of working people have been stagnant or declining. For the 12 years of trickle down economics we built a false prosperity on a hollow base as our national debt quadrupled. From 1989 to 1992 we experienced the slowest growth in a half century. For too many families, even when both parents were working, the American dream has been slipping away.

In 1992 the American people demanded that we change. I year ago I asked all of you to join me in accepting responsibility for the future of our country.

Well, we did. We replaced drift and deadlock with renewal and reform. And I want to thank every one of you here who heard the American people, who broke gridlock, who gave them the most successful teamwork between a president and a Congress in 30 years.

This Congress produced a budget that cut the deficit by half a trillion dollars, cut spending and raised income taxes on only the wealthiest Americans. This Congress produced tax relief for millions of low-income workers to reward work over welfare. It produced NAFTA. It produced the Brady bill, now the Brady law.

And thank you, Jim Brady, for being here, and God bless you, Sarah. This Congress produced tax cuts to reduce the taxes of nine out of 10 small businesses who use the money to invest more and create more jobs. It produced more research and treatment for AIDS, more childhood immunizations, more support for women's health research, more affordable college loans for the middle class, a new national service program for those who want to give something back to their country and their communities for higher education, a dramatic increase in high-tech investments to move us from a defense to a domestic high-tech economy. This Congress produced a new law--the motor voter bill--to help millions of people register to vote. It produced family and medical leave--all passed, all signed into law, with not one single veto.

These accomplishments were all commitments I made when I sought this office, and in fairness, they all had to be passed by you in this Congress. But I am persuaded that the real credit belongs to the people who sent us here, who pay our salaries, who hold our feet to the fire. But what we do here is really beginning to change lives. Let me just give you one example.

I will never forget what the family and medical leave law meant to just one father I met early one Sunday morning in the White House. It was unusual to see a family there touring early Sunday morning, but he had his wife and his three children there, one of them in a wheelchair. And I came up, and after we had our picture taken and had a little visit, I was walking off, and that man grabbed me by the arm and he said, "Mr. President, let me tell you something. My little girl here is desperately ill. She's probably not going to make it. But because of the family leave law, I was able to take time off to spend with her, the most important I ever spent in my life, without losing my job and hurting the rest of my family. It means more to me than I will ever be able to say. Don't you people up here ever think what you do doesn't make a difference. It does."

Though we are making a difference, our work has just begun. Many Americans still haven't felt the impact of what we've done. The recovery still hasn't touched every community or created enough jobs. Incomes are still stagnant. There's still too much violence and not enough hope in too many places.

Abroad, the young democracies we are strongly supporting still face very difficult times and look to us for leadership.

And so tonight, let us resolve to continue the journey of renewal, to create more and better jobs, to guarantee health security for all, to reward welfare--work over welfare, to promote democracy abroad and to begin to reclaim our streets from violent crime and drugs and gangs to renew our own American community.

Last year, we began to put our house in order by tackling the budget deficit that was driving us toward bankruptcy. We cut $255 billion in spending, including entitlements, in over 340 separate budget items. We froze domestic spending and used honest budget numbers.

Led by the vice president, we've launched a campaign to reinvent government. We've cut staff, cut perks, even trimmed the fleet of federal limousines. After years of leaders whose rhetoric attacked bureaucracy but whose actions expanded it, we will actually reduce it by 252,000 people over the next five years. By the time we have finished, the federal bureaucracy will be at its lowest point in 30 years.

Because the deficit was so large and because they benefited from tax cuts in the 1980s, we did ask the wealthiest Americans to pay more to reduce the deficit. So on April the 15th, the American people will discover the truth about what we did last year on taxes. Only the top one--the top 1.2 percent of Americans, as I said all along, will face higher income tax rates--let me repeat, only the wealthiest 1.2 percent of Americans will face higher income tax rates and no one else will, and that is the truth. Of course, there were, as there always are in politics, naysayers who said this plan wouldn't work, but they were wrong. When I became president, the experts predicted that next year's deficit would be $300 billion, but because we acted, those same people now say the deficit's going to be under $180 billion, 40 percent lower than was previously predicted.

Our economic program has helped to produce the lowest core inflation rate and the lowest interest rates in 20 years, and because those interest rates are down, business investment and equipment is growing at seven times the rate of the previous four years. Auto sales are way up, home sales at a record high. Millions of Americans have refinanced their homes and our economy has produced 1.6 million private-sector jobs in 1993, more than were created in the previous four years combined.

The people who supported this economic plan should be proud of its early results--proud. But everyone in this chamber should know and acknowledge that there is more to do. Next month I will send you one of the toughest budgets ever presented to Congress. It will cut spending in more than 300 programs, eliminate 100 domestic programs, and reforms the way in which governments buy goods and services.

This year we must again make the hard choices to live within the hard spending ceilings we have set. We must do it. We have proved we can bring the deficit down without choking off recovery, without punishing seniors or the middle class, and without putting our national security at risk. If you will stick with this plan, we will post three consecutive years of declining deficits for the first time since Harry Truman lived in the White House. And once again, the buck stops here.

Our economic plan also bolsters our strength and our credibility around the world. Once we reduced the deficit and put the steel back into our competitive edge, the world echoed with the sound of falling trade barriers. In one year, with NAFTA, with GATT, with our efforts in Asia and the national export strategy, we did more to open world markets to American products than at any time in the last two generations. That means more jobs and rising living standards for the American people, low deficits, low inflation, low interest rates, low trade barriers and high investments. These are the building blocks of our recovery. But if we want to take full advantage of the opportunities before us in the global economy, you all know we must do more.

As we reduce defense spending, I ask Congress to invest more in the technologies of tomorrow. Defense conversion will keep us strong militarily and create jobs for our people here at home.

As we protect our environment, we must invest in the environmental technologies of the future which will create jobs. This year we will fight for a revitalized Clean Water Act and a Safe Drinking Water Act and a reformed Superfund program.

And the vice president is right; we must also work with the private sector to connect every classroom, every clinic, every library, every hospital in America into a national information superhighway by the year 2000. Think of it. Instant access to information will increase productivity. It will help to educate our children. It will provide better medical care. It will create jobs. And I call on the Congress to pass legislation to establish that information superhighway this year.

As we expand opportunity and create jobs, no one can be left out. We must continue to enforce fair lending and fair housing and all civil rights laws, because America will never be complete in its renewal until everyone shares in its bounty. But we all know, too, we can do all these things-- put our economic house in order, expand world trade, target the jobs of the future, guarantee equal opportunity.

But if we're honest, we'll all admit that this strategy still cannot work unless we also give our people the education, training and skills they need to seize the opportunities of tomorrow. We must set tough, world-class academic and occupational standards for all our children and give our teachers and students the tools they need to meet them.

Our Goals 2000 proposal will empower individual school districts to experiment with ideas like chartering their schools to be run by private corporations or having more public school choice, to do whatever they wish to do as long as we measure every school by one high standard: Are our children learning what they need to know to compete and win in the global economy?

Goals 2000 links world-class standards to grassroots reforms and I hope Congress will pass it without delay. Our school to work initiative will for the first time link school to the world of work, providing at least one year of apprenticeship beyond high school. After all, most of the people we're counting on to build our economic future won't graduate from college. It's time to stop ignoring them and start empowering them. We must literally transform our outdated unemployment system into a new reemployment system. The old unemployment system just sort of kept you going while you waited for your old job to come back. We've got to have a new system to move people into new and better jobs because most of those old jobs just don't come back. And we know that the only way to have real job security in the future, to get a good job with a growing income, is to have real skills and the ability to learn new ones. So we've got to streamline today's patchwork of training programs and make them a source of new skill for our people who lose their jobs. Reemployment, not unemployment, must become the centerpiece of our economic renewal. I urge you to pass it in this session of Congress.

And just as we must transform our unemployment system, so must we also revolutionize our welfare system. It doesn't work; it defies our values as a nation. If we value work, we can't justify a system that makes welfare more attractive than work if people are worried about losing their health care.

If we value responsibility, we can't ignore the $34 billion in child support absent parents out to be paying to millions of parents who are taking care of their children--. If we value strong families, we can't perpetuate a system that actually penalizes those who stay together. Can you believe that a child who has a child gets more money from the government for leaving home than for staying home with a parent or a grandparent? That's not just bad policy, it's wrong and we ought to change it.

I worked on this problem for years before I became president, with other governors and with members of Congress in both parties and with the previous administration of another party. I worked on it with people who were on welfare, lots of them. And I want to say something to everybody here who cares about this issue. The people who most want to change this system are the people who are dependent on it. They want to get off welfare; they want to go back to work; they want to do right by their kids.

I once had a hearing when I was a governor and I brought in people on welfare from all over America who had found their way to work and a woman from my state who testified was asked this question. What's the best thing about being off welfare and in a job. And without blinking an eye, she looked at 40 governors and she said, when my boy goes to school and they say "What does your mother do for a living?" he can give an answer. These people want a better system and we ought to give it to them.

Last year, we began this. We gave the states more power to innovate because we know that a lot of great ideas come from outside Washington and many states are already using it. Then this Congress took a dramatic step. Instead of taxing people with modest incomes into poverty, we helped them to work their way out of poverty by dramatically increasing the earned income tax credit. It will lift 15 million working families out of poverty, rewarding work over welfare, making it possible for people to be successful workers and successful parents. Now that's real welfare reform.

But there is more to be done. This spring I will send you a comprehensive welfare reform bill that builds on the Family Support Act of 1988 and restores the basic values of work and responsibility. We will say to teenagers if you have a child out of wedlock, we'll no longer give you a check to set up a separate household, we want families to stay together; say to absent parents who aren't paying their child support if you're not providing for your children we'll garnish your wages, suspend your license, track you across state lines, and if necessary make some of you work off what you owe.

People who bring children into this world cannot and must not walk away from them.

But to all those who depend on welfare, we should offer ultimately a simple compact. We will provide the support, the job training, the child care you need for up to two years, but after that anyone who can work, must, in the private sector wherever possible, in community service if necessary. That's the only way we'll ever make welfare what it ought to be, a second chance, not a way of life.

I know it will be difficult to tackle welfare reform in 1994 at the same time we tackle health care. But let me point out, I think it is inevitable and imperative. It is estimated that one million people are on welfare today because it's the only way they can get health care coverage for their children. Those who choose to leave welfare for jobs without health benefits, and many entry level jobs don't have health benefits, find themselves in the incredible position of paying taxes that help to pay for health care coverage for those who made the other choice, to stay on welfare. No wonder people leave work and go back to welfare, to get health care coverage. We've got to solve the health care problem to have real welfare reform.

So this year we will make history by reforming the health care system. And I would say to you, all of you my fellow public servants, this is another issue where the people are way ahead of the politicians.

You know, the first lady has received now almost a million letters from people all across America and from all walks of life. I'd like to share just one of them with you. Richard Anderson of Reno, Nevada, lost his job and, with it, his health insurance. Two weeks later, his wife, Judy, suffered a cerebral aneurysm. He rushed her to the hospital, where she stayed in intensive care for 21 days. The Anderson's bills were over $120,000. Although Judy recovered and Richard went back to work at $8 an hour, the bills were too much for them and they were literally forced into bankruptcy.

"Mrs. Clinton," he wrote to Hillary, "no one in the United States of America should have to lose everything they've worked for all their lives because they were unfortunate enough to become ill." It was to help the Richard and Judy Andersons of America that the first lady and so many others have worked so hard and so long on this health care reform issue. We owe them our thanks and our action.

I know there are people here who say there's no health care crisis. Tell it to Richard and Judy Anderson. Tell it to the 58 million Americans who have no coverage at all for some time each year. Tell it to the 81 million Americans with those preexisting conditions; those folks are paying more or they can't get insurance at all or they can't ever change their jobs because they or someone in their family has one of those preexisting conditions. Tell it to the small businesses burdened by skyrocketing costs of insurance. Most small businesses cover their employers, and they pay on average 35 percent more in premiums than big businesses or government. Or tell it to the 76 percent of insured Americans, three out of four whose policies have lifetime limits, and that means they can find themselves without any coverage at all just when they need it the most.

So, if any of you believe there's no crisis, you tell it to those people, because I can't.

There are some people who literally do not understand the impact of this problem on people's lives, but all you have to do is go out and listen to them. Just go talk to them anywhere, in any congressional district in this country. They're Republicans and Democrats and independents. It doesn't have a lick to do with party. They think we don't get it, and it's time we show that we do get it.

From the day we began, our health care initiative has been designed to strengthen what is good about our health care system--the world's best health care professionals, cutting edge research, and wonderful research institutions, Medicare for older Americans. None of this--none of it should be put at risk. But we're paying more and more money for less and less care. Every year, fewer and fewer Americans even get to choose their doctors. Every year, doctors and nurses spend more time on paperwork and less time with patients because of the absolute bureaucratic nightmare the present system has become.

This system is riddled with inefficiency, with abuse, with fraud, and everybody knows it. In today's health care system, insurance companies call the shots. They pick whom they cover and how they cover them. They can cut off your benefits when you need your coverage the most. They are in charge.

What does it mean? It means every night millions of well-insured Americans go to bed just an illness, an accident, or a pink slip away from having no coverage or financial ruin. It means every morning millions of Americans go to work without any health insurance at all--something the workers in no other advanced country in the world do. It means that every year more and more hard working people are told to pick a new doctor because their boss has had to pick a new plan. And countless others turndown better jobs because they know, if they take the better job, they'll lose their health insurance.

If we just let the health care system continue to drift, our country will have people with less care, fewer choices, and higher bill.

Now, our approach protects the quality of care and people's choices. It builds on what works today in the private sector, to expand employer based coverage, to guarantee private insurance for every American. And I might say, employer based private insurance for every American was proposed 20 years ago by President Richard Nixon to the United States Congress. It was a good idea then, and it's a better idea today.

Why do we want guaranteed private insurance? Because right now, nine out of ten people who have insurance get it through their employers--and that should continue. And if your employer is providing good benefits at reasonable prices, that should continue too. And that ought to make the Congress and the president feel better. Our goal is health insurance everybody can depend on--comprehensive benefits that cover preventive care and prescription drugs, health premiums that don't just explode when you get sick or you get older, the power--no matter how small your business is --to choose dependable insurance at the same competitive rates that governments and big business get today, one simple form for people who are sick, and most of all, the freedom to choose a plan and the right to choose your own doctor.

Our approach protects older Americans. Every plan before the Congress proposes to slow the growth of Medicare. The difference is this. We believe those savings should be used to improve health care for senior citizens. Medicare must be protected, and it should cover prescription drugs, and we should take the first steps in covering long-term care.

To those who would cut Medicare without protecting seniors, I say the solution to today's squeeze on middle class working people's health care is not to put the squeeze on middle class retired people's health care. We can do better than that. When it's all said and done, it's pretty simple to me. Insurance ought to mean what it used to mean. You pay a fair price for security, and when you get sick, health care is always there--no matter what.

Along with the guarantee of health security, we all have to admit, too, there must be more responsibility on the part of all of us in how we use this system. People have to take their kids to get immunized. We should all take advantage of preventive care. We must all work together to stop the violence that explodes our emergency rooms. We have to practice better health habits, and we can't abuse the system. And those who don't have insurance under our approach will get coverage, but they will have to pay something for it, too. The minority of businesses that provide no insurance at all, and in so doing, shift the cost of the care of their employees to others, should contribute something. People who smoke should pay more for a pack of cigarettes. Everybody can contribute something if we want to solve the health care crisis. There can't be anymore something for nothing. It will not be easy, but it can be done. Now in the coming months I hope very much to work with both Democrats and Republicans to reform a health care system by using the market to bring down costs and to achieve lasting health security. But if you look at history, we see that for 60 years this country has tried to reform health care. President Roosevelt tried, President Truman tried, President Nixon tried, President Carter tried. Every time the special interests were powerful enough to defeat them, but not this time.

I know that facing up to these interests will require courage. It will raise critical questions about the way we finance our campaigns and how lobbyists yield their influence. The work of change, frankly, will never get any easier until we limit the influence of well financed interests who profit from this current system. So I also must now call on you to finish the job both houses began last year, by passing tough and meaningful campaign finance reform and lobby reform legislation this year.

You know, my fellow Americans, this is really a test for all of us. The American people provide those of us in government service with terrific health care benefits at reasonable costs. We have health care that's always there. I think we need to give every hard working, taxpaying American the same health care security they have already given to us.

I want to make this very clear: I am open, as I have said repeatedly, to the best ideas of concerned members of both parties. I have no special brief for any specific approach, even in our own bill, except this: if you send me legislation that does not guarantee every American private health insurance that can never be taken away, you will force me to take this pen, veto the legislation, and we'll come right back here and start all over again.

But I don't think that's going to happen. I think we're ready to act now. I believe that you're ready to act now. And if you're ready to guarantee every American the same health care that you have, health care that can never be taken away--now, not next year or the year after, now is the time to stand with the people who sent us here. Now.

As we take these steps together to renew our strength at home, we cannot turn away from our obligations to renew our leadership abroad. This is a promising moment. Because of the agreements we have reached this year, last year, Russia's strategic nuclear missiles soon will no longer be pointed at the United States. Nor will we point ours at them.

Instead of building weapons in space, Russian scientists will help us to build the international space station.

And of course there are still dangers in the world: rampant arms proliferation, bitter regional conflicts, ethnic and nationalist tensions in many new democracies, severe environmental degradation the world over, and fanatics who seek to cripple the world's cities with terror. As the world's greatest power, we must therefore maintain our defenses and our responsibilities. This year we secured indictments against terrorists and sanctions against those harbor them. We worked to promote environmentally-sustainable economic growth. We achieved agreements with Ukraine, with Belarus, with Kazakhstan, to eliminate completely their nuclear arsenals. We are working to achieve a Korean Peninsula free of nuclear weapons. We will seek early ratification of the treaty to ban chemical weapons worldwide. And earlier today we joined with over 30 nations to begin negotiations on a comprehensive ban to stop all nuclear testing.

But nothing--nothing--is more important to our security than our nation's armed forces. We honor their contributions, including those who are carrying out the longest humanitarian airlift in history in Bosnia---- those who will complete their mission in Somalia this year and their brave comrades who gave their lives there. Our forces are the finest military our nation has ever had, and I have pledged that as long as I am president they will remain the best-equipped, the best-trained and the best-prepared fighting force on the face of the earth.

Last year, I proposed a defense plan that maintains our post-Cold War security at a lower cost. This year, many people urged me to cut our defense spending further to pay for other government programs. I said no. The budget I send to Congress draws the line against further defense cuts. It protects the readiness and quality of our forces. Ultimately, the best strategy is to do that. We must not cut defense further. I hope the Congress without regard to party will support that position.

Ultimately, the best strategy to ensure our security and to build a durable peace is to support the advance of democracy elsewhere. Democracies don't attack each other. They make better trading partners and partners in diplomacy. That is why we have supported, you and I, the democratic reformers in Russia and in the other states of the former Soviet bloc. I applaud the bipartisan support this Congress provided last year for our initiatives to help Russia, Ukraine and the other states through their epic transformations.

Our support of reform must combine patience for the enormity of the task and vigilance for our fundamental interest and values. We will continue to urge Russia and the other states to press ahead with economic reforms, and we will seek to cooperate with Russia to solve regional problems while insisting that, if Russian troops operate in neighboring states, they do so only when those states agree to their presence and in strict accord with international standards.

But we must also remember as these nations chart their own futures, and they must chart their own futures, how much more secure and more prosperous our own people will be if democratic and market reform succeed all across the former communist bloc. Our policy has been to support that move and that has been the policy of the Congress. We should continue it.

That is why I went to Europe earlier this month, to work with our European partners to help to integrate all the former communist countries into a Europe that has the possibility of becoming unified for the first time in its entire history, it's entire history, based on the simple commitments of all nations in Europe to democracy, to free markets, and to respect for existing borders.

With our allies, we have created a partnership for peace that invites states from the former Soviet bloc and other non-NATO members to work with NATO in military cooperation. When I met with Central Europe's leaders, including Lech Walesa and Vaclav Havel, men who put their lives on the line for freedom, I told them that the security of their region is important to our country's security.

This year, we must also do more to support democratic renewal and human rights and sustainable development all around the world. We will ask Congress to ratify the new GATT accord, we will continue standing by South Africa as it works its way through its bold and hopeful and difficult transition to democracy. We will convene a summit of the Western hemisphere's democratic leaders from Canada to the tip of South America. And we will continue to press for the restoration of true democracy in Haiti.

And as we build a more constructive relationship with China, we must continue to insist on clear signs of improvement in that nation's human rights record.

We will also work for new progress toward the Middle East peace. Last year the world watched Yitzhak Rabin and Yasir Arafat at the White House when they had their historic handshake of reconciliation. But there is a long, hard road ahead. And on that road I am determined that I and our administration will do all we can to achieve a comprehensive and lasting peace for all the peoples of the region.

Now, there are some in our country who argue that with the Cold War, America should turn its back on the rest of the world. Many around the world were afraid we would do just that. But I took this office on a pledge that had no partisan tinge to keep our nation secure by remaining engaged in the rest of the world. And this year, because of our work together, enacting NAFTA, keeping our military strong and prepared, supporting democracy abroad, we have reaffirmed America's leadership, America's engagement, and as a result, the American people are more secure than they were before.

But while Americans are more secure from threats abroad, I think we all now that in many ways we are less secure from threats here at home. Everyday the national peace is shattered by crime.

In Petaluma, California, an innocent slumber party gives way to agonizing tragedy for the family of Polly Klaas. An ordinary train ride on Long Island ends in a hail of nine millimeter rounds. A tourist in Florida is nearly burned alive by bigots simply because he is black. Right here in our nation's capital, a brave young man named Jason White, a policeman, the son and grandson of policemen, is ruthlessly gunned down.

Violent crime and the fear it provokes are crippling our society, limiting personal freedom, and fraying the ties that bind us.

The crime bill before Congress gives you a chance to do something about it, a chance to be tough and smart. What does that mean? Let me begin by saying I care a lot about this issue. Many years ago, when I started out in public life, I was the attorney general of my state. I served as a governor for a dozen years. I know what it's like to sign laws increasing penalties, to build more prison cells, to carry out the death penalty. I understand this issue and it is not a simple thing.

First, we must recognize that most violent crimes are committed by a small percentage of criminals who too often break the laws even when they are on parole. Now those who commit crimes should be punished, and those who commit repeated violent crimes should be told when you commit a third violent crime, you will be put away and put away for good, three strikes and you are out.

Second, we must take serious steps to reduce violence and prevent crime, beginning with more police officers and more community policing. We know right now that police who work the streets, know the folks, have the respect of the neighborhood kids, focus on high crime areas, we know that they are more likely to prevent crime as well as catch criminals. Look at the experience of Houston, where the crime rate dropped 17 percent in one year when that approach was taken. Here tonight is one of those community policemen, a brave, young detective, Kevin Jett, whose beat is eight square blocks in one of the toughest neighborhoods in New York. Every day he restores some sanity and safety, and a sense of values and connection to the people whose lives he protects. I'd like to ask him to stand up and be recognized tonight.

You will be given a chance to give the children of this country, the law abiding working people of this country, and don't forget, in the toughest neighborhoods in this country, in the highest crime neighborhoods in this country the vast majority of people get up every day and obey the law, pay their taxes, do their best to raise their kids. They deserve people like Kevin Jett, and you're going to be given the chance to give the American people another 100,000 of them, well trained, and I urge you to do it.

You have before you crime legislation which also establishes a police corps to encourage young people to get an education, and pay it off by serving as police officers, which encourages retiring military personnel to move into police forces--and enormous resources for our country, one which has a safe schools provisions which will give our young people the chance to walk to school in safety and to be in school in safety instead of dodging bullets. These are important things.

The third thing we have to do is to build on the Brady Bill--the Brady Law to take further steps----to take further steps to keep guns out of the hands of criminals.

Now, I want to say something about this issue. Hunters must always be free to hunt, law abiding adults should always be free to own guns and protect their homes. I respect that part of our culture. I grew up in it. But I want to ask the sportsmen and others who lawfully own guns to join us in this campaign to reduce gun violence. I say to you, I know you didn't create this problem, but we need your help to solve it. There is no sporting purpose on earth that should stop the United States Congress from banishing assault weapons that outgun police and cut down children.

Fourth, we must remember that drugs are a factor in an enormous percentage of crimes. Recent studies indicate, sadly, that drug use is on the rise again among our young people. The Crime Bill contains--all the crime bills contain--more money for drug treatment, for criminal addicts, and boot camps for youthful offenders that include incentives to get off drugs and to stay off drugs. Our administration's budget, with all its cuts, contains a large increase in funding for drug treatment and drug education. You must pass them both. We need then desperately.

My fellow Americans, the problem of violence is an un-American problem. It has no partisan or philosophical element. Therefore, I urge you find ways as quickly as possible to set aside partisan differences and pass a strong, smart, tough crime bill.

But further, I urge you to consider this: As you demand tougher penalties for those who choose violence, let us also remember how we came to this sad point. In our toughest neighborhoods, on our meanest streets, in our poorest rural areas, we have seen a stunning and simultaneous breakdown of community, family, and work, the heart and soul of civilized society. This has created a vast vacuum which has been filled by violence and drugs and gangs. So I ask you to remember that even as we say no to crime, we must give people, especially our young people something to say yes to. Many of our initiatives, from job training to welfare reform to health care to national service will help to rebuild distressed communities, to strengthen families, to provide work, but more needs to be done. That's what our community empowerment agenda is all about--challenging businesses to provide more investment through empowerment zones, ensuring banks will make loans in the same communities their deposits come from, passing legislation to unleash the power of capital through community development banks to create jobs, opportunity, and hope where they're needed most.

But I think you know that to really solve this problem, we'll all have to put our heads together, leave our ideological armor aside, and find some new ideas to do even more.

And let's be honest, we all know something else, too. Our problems go way beyond the reach of government. They're rooted in the loss of values and the disappearance of work and the breakdown of our families and our communities. My fellow Americans, we can cut the deficit, create jobs, promote democracy around the world, pass welfare reform and health care, pass the toughest crime bill in history and still leave too many of our people behind.

The American people have got to want to change from within if we're going to bring back work and family and community. We cannot renew our country when, within a decade, more than half of the children will be born into families where there has been no marriage. We cannot renew this country when 13-year-old boys get semi-automatic weapons to shoot 9 year olds for kicks. We can't renew our country when children are having children and the fathers walk away as if the kids don't amount to anything. We can't renew the country when our businesses eagerly look for new investments and new customers abroad but ignore those people right here at home who'd give anything to have their jobs and would gladly buy their products if they had the money to do it.

We can't renew our country unless more of us--I mean all of us--are willing to join the churches and the other good citizens, people like all the black ministers I've worked with over the years or the priests and the nuns I met at Our Lady of Help in East Los Angeles or my good friend Tony Campolo in Philadelphia, unless we're willing to work with people like that, people who are saving kids, adopting schools, making streets safer. All of us can do that.

We can't renew our country until we realize that governments don't raise children; parents do. Parents who know their children's teachers and turn off the television and help with the homework and teach their kids right from wrong--those kind of parents can make all the difference. I know. I had one. And I'm telling you we have got to stop pointing our fingers at these kids who have no future and reach our hands out to them. Our country needs it. We need it. And they deserve it.

And so I say to you tonight let's give our children a future. Let us take away their guns and give them books. Let us overcome their despair and replace it with hope. Let us, by our example, teach them to obey the law, respect our neighbors, and cherish our values. Let us weave these sturdy threads into a new American community that once more stand strong against the forces of despair and evil because everybody has a chance to walk into a better tomorrow.

Oh, there will be naysayers who fear that we won't be equal to the challenges of this time, but they misread our history, our heritage, even today's headlines. All those things tell us we can and we will overcome any challenge.

When the earth shook and fires raged in California; when I saw the Mississippi deluge the farmlands of the Midwest in a 500 year flood; when the century's bitterest cold swept from North Dakota to Newport News it seemed as though the world itself was coming apart at the seams. But the American people, they just came together. They rose to the occasion, neighbor helping neighbor, strangers risking life and limb to stay total strangers, showing the better angels of our nature.

Let us not reserve the better angels only for natural disasters, leaving our deepest and most profound problems to petty political fighting.

Let us instead by true to our spirit, facing facts, coming together, bringing hope and moving forward.

Tonight, my fellow Americans, we are summoned to answer a question as old as the republic itself, what is the state of our union?

It is growing stronger but it must be stronger still. With your help and God's help it will be.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Mr. Speaker, Mr. Vice President, members of the 104th Congress, distinguished guests, my fellow Americans all across our land:

Let me begin tonight by saying to our men and women in uniform around the world, and especially those helping peace take root in Bosnia and to their families, I thank you. America is very, very proud of you.

My duty tonight is to report on the state of the Union--not the state of our government, but of our American community; and to set forth our responsibilities, in the words of our Founders, to form a more perfect union.

The state of the Union is strong. Our economy is the healthiest it has been in three decades. We have the lowest combined rates of unemployment and inflation in 27 years. We have created nearly 8 million new jobs, over a million of them in basic industries, like construction and automobiles. America is selling more cars than Japan for the first time since the 1970s. And for three years in a row, we have had a record number of new businesses started in our country.

Our leadership in the world is also strong, bringing hope for new peace. And perhaps most important, we are gaining ground in restoring our fundamental values. The crime rate, the welfare and food stamp rolls, the poverty rate and the teen pregnancy rate are all down. And as they go down, prospects for America's future go up.

We live in an age of possibility. A hundred years ago we moved from farm to factory. Now we move to an age of technology, information, and global competition. These changes have opened vast new opportunities for our people, but they have also presented them with stiff challenges. While more Americans are living better, too many of our fellow citizens are working harder just to keep up, and they are rightly concerned about the security of their families.

We must answer here three fundamental questions: First, how do we make the American Dream of opportunity for all a reality for all Americans who are willing to work for it? Second, how do we preserve our old and enduring values as we move into the future? And, third, how do we meet these challenges together, as one America?

We know big government does not have all the answers. We know there's not a program for every problem. We have worked to give the American people a smaller, less bureaucratic government in Washington. And we have to give the American people one that lives within its means.

The era of big government is over. But we cannot go back to the time when our citizens were left to fend for themselves. Instead, we must go forward as one America, one nation working together to meet the challenges we face together. Self-reliance and teamwork are not opposing virtues; we must have both.

I believe our new, smaller government must work in an old-fashioned American way, together with all of our citizens through state and local governments, in the workplace, in religious, charitable and civic associations. Our goal must be to enable all our people to make the most of their own lives--with stronger families, more educational opportunity, economic security, safer streets, a cleaner environment in a safer world.

To improve the state of our Union, we must ask more of ourselves, we must expect more of each other, and we must face our challenges together.

Here, in this place, our responsibility begins with balancing the budget in a way that is fair to all Americans. There is now broad bipartisan agreement that permanent deficit spending must come to an end.

I compliment the Republican leadership and the membership for the energy and determination you have brought to this task of balancing the budget. And I thank the Democrats for passing the largest deficit reduction plan in history in 1993, which has already cut the deficit nearly in half in three years.

Since 1993, we have all begun to see the benefits of deficit reduction. Lower interest rates have made it easier for businesses to borrow and to invest and to create new jobs. Lower interest rates have brought down the cost of home mortgages, car payments and credit card rates to ordinary citizens. Now, it is time to finish the job and balance the budget.

Though differences remain among us which are significant, the combined total of the proposed savings that are common to both plans is more than enough, using the numbers from your Congressional Budget Office to balance the budget in seven years and to provide a modest tax cut.

These cuts are real. They will require sacrifice from everyone. But these cuts do not undermine our fundamental obligations to our parents, our children, and our future, by endangering Medicare, or Medicaid, or education, or the environment, or by raising taxes on working families.

I have said before, and let me say again, many good ideas have come out of our negotiations. I have learned a lot about the way both Republicans and Democrats view the debate before us. I have learned a lot about the good ideas that we could all embrace.

We ought to resolve our remaining differences. I am willing to work to resolve them. I am ready to meet tomorrow. But I ask you to consider that we should at least enact these savings that both plans have in common and give the American people their balanced budget, a tax cut, lower interest rates, and a brighter future. We should do that now, and make permanent deficits yesterday's legacy.

Now it is time for us to look also to the challenges of today and tomorrow, beyond the burdens of yesterday. The challenges are significant. But America was built on challenges, not promises. And when we work together to meet them, we never fail. That is the key to a more perfect Union. Our individual dreams must be realized by our common efforts.

Our first challenge is to cherish our children and strengthen America's families. Family is the foundation of American life. If we have stronger families, we will have a stronger America.

Before I go on, I would like to take just a moment to thank my own family, and to thank the person who has taught me more than anyone else over 25 years about the importance of families and children--a wonderful wife, a magnificent mother and a great First Lady. Thank you, Hillary.

All strong families begin with taking more responsibility for our children. I have heard Mrs. Gore say that it's hard to be a parent today, but it's even harder to be a child. So all of us, not just as parents, but all of us in our other roles--our media, our schools, our teachers, our communities, our churches and synagogues, our businesses, our governments--all of us have a responsibility to help our children to make it and to make the most of their lives and their God-given capacities.

To the media, I say you should create movies and CDs and television shows you'd want your own children and grandchildren to enjoy.

I call on Congress to pass the requirement for a V-chip in TV sets so that parents can screen out programs they believe are inappropriate for their children. When parents control what their young children see, that is not censorship; that is enabling parents to assume more personal responsibility for their children's upbringing. And I urge them to do it. The V-chip requirement is part of the important telecommunications bill now pending in this Congress. It has bipartisan support, and I urge you to pass it now.

To make the V-chip work, I challenge the broadcast industry to do what movies have done--to identify your programming in ways that help parents to protect their children. And I invite the leaders of major media corporations in the entertainment industry to come to the White House next month to work with us in a positive way on concrete ways to improve what our children see on television. I am ready to work with you.

I say to those who make and market cigarettes: every year a million children take up smoking, even though it is against the law. Three hundred thousand of them will have their lives shortened as a result. Our administration has taken steps to stop the massive marketing campaigns that appeal to our children. We are simply saying: Market your products to adults, if you wish, but draw the line on children.

I say to those who are on welfare, and especially to those who have been trapped on welfare for a long time: For too long our welfare system has undermined the values of family and work, instead of supporting them. The Congress and I are near agreement on sweeping welfare reform. We agree on time limits, tough work requirements, and the toughest possible child support enforcement. But I believe we must also provide child care so that mothers who are required to go to work can do so without worrying about what is happening to their children.

I challenge this Congress to send me a bipartisan welfare reform bill that will really move people from welfare to work and do the right thing by our children. I will sign it immediately.

Let us be candid about this difficult problem. Passing a law, even the best possible law, is only a first step. The next step is to make it work. I challenge people on welfare to make the most of this opportunity for independence. I challenge American businesses to give people on welfare the chance to move into the work force. I applaud the work of religious groups and others who care for the poor. More than anyone else in our society, they know the true difficulty of the task before us, and they are in a position to help. Every one of us should join them. That is the only way we can make real welfare reform a reality in the lives of the American people.

To strengthen the family we must do everything we can to keep the teen pregnancy rate going down. I am gratified, as I'm sure all Americans are, that it has dropped for two years in a row. But we all know it is still far too high.

Tonight I am pleased to announce that a group of prominent Americans is responding to that challenge by forming an organization that will support grass-roots community efforts all across our country in a national campaign against teen pregnancy. And I challenge all of us and every American to join their efforts.

I call on American men and women in families to give greater respect to one another. We must end the deadly scourge of domestic violence in our country. And I challenge America's families to work harder to stay together. For families who stay together not only do better economically, their children do better as well.

In particular, I challenge the fathers of this country to love and care for their children. If your family has separated, you must pay your child support. We're doing more than ever to make sure you do, and we're going to do more, but let's all admit something about that, too: A check will not substitute for a parent's love and guidance. And only you--only you can make the decision to help raise your children. No matter who you are, how low or high your station in life, it is the most basic human duty of every American to do that job to the best of his or her ability.

Our second challenge is to provide Americans with the educational opportunities we will all need for this new century. In our schools, every classroom in America must be connected to the information superhighway, with computers and good software, and well-trained teachers. We are working with the telecommunications industry, educators and parents to connect 20 percent of California's classrooms by this spring, and every classroom and every library in the entire United States by the year 2000. I ask Congress to support this education technology initiative so that we can make sure this national partnership succeeds.

Every diploma ought to mean something. I challenge every community, every school and every state to adopt national standards of excellence; to measure whether schools are meeting those standards; to cut bureaucratic red tape so that schools and teachers have more flexibility for grass-roots reform; and to hold them accountable for results. That's what our Goals 2000 initiative is all about.

I challenge every state to give all parents the right to choose which public school their children will attend; and to let teachers form new schools with a charter they can keep only if they do a good job.

I challenge all our schools to teach character education, to teach good values and good citizenship. And if it means that teenagers will stop killing each other over designer jackets, then our public schools should be able to require their students to wear school uniforms.

I challenge our parents to become their children's first teachers. Turn off the TV. See that the homework is done. And visit your children's classroom. No program, no teacher, no one else can do that for you.

My fellow Americans, higher education is more important today than ever before. We've created a new student loan program that's made it easier to borrow and repay those loans, and we have dramatically cut the student loan default rate. That's something we should all be proud of, because it was unconscionably high just a few years ago. Through AmeriCorps, our national service program, this year 25,000 young people will earn college money by serving their local communities to improve the lives of their friends and neighbors. These initiatives are right for America and we should keep them going.

And we should also work hard to open the doors of college even wider. I challenge Congress to expand work-study and help one million young Americans work their way through college by the year 2000; to provide a $1000 merit scholarship for the top five percent of graduates in every high school in the United States; to expand Pell Grant scholarships for deserving and needy students; and to make up to $10,000 a year of college tuition tax deductible. It's a good idea for America.

Our third challenge is to help every American who is willing to work for it, achieve economic security in this new age. People who work hard still need support to get ahead in the new economy. They need education and training for a lifetime. They need more support for families raising children. They need retirement security. They need access to health care. More and more Americans are finding that the education of their childhood simply doesn't last a lifetime.

So I challenge Congress to consolidate 70 overlapping, antiquated job-training programs into a simple voucher worth $2,600 for unemployed or underemployed workers to use as they please for community college tuition or other training. This is a G.I. Bill for America's workers we should all be able to agree on.

More and more Americans are working hard without a raise. Congress sets the minimum wage. Within a year, the minimum wage will fall to a 40-year low in purchasing power. Four dollars and 25 cents an hour is no longer a living wage, but millions of Americans and their children are trying to live on it. I challenge you to raise their minimum wage.

In 1993, Congress cut the taxes of 15 million hard-pressed working families to make sure that no parents who work full-time would have to raise their children in poverty, and to encourage people to move from welfare to work. This expanded earned income tax credit is now worth about $1,800 a year to a family of four living on $20,000. The budget bill I vetoed would have reversed this achievement and raised taxes on nearly 8 million of these people. We should not do that.

I also agree that the people who are helped under this initiative are not all those in our country who are working hard to do a good job raising their children and at work. I agree that we need a tax credit for working families with children. That's one of the things most of us in this Chamber, I hope, can agree on. I know it is strongly supported by the Republican majority. And it should be part of any final budget agreement.

I want to challenge every business that can possibly afford it to provide pensions for your employees. And I challenge Congress to pass a proposal recommended by the White House Conference on Small Business that would make it easier for small businesses and farmers to establish their own pension plans. That is something we should all agree on.

We should also protect existing pension plans. Two years ago, with bipartisan support that was almost unanimous on both sides of the aisle, we moved to protect the pensions of 8 million working people and to stabilize the pensions of 32 million more. Congress should not now let companies endanger those workers' pension funds. I know the proposal to liberalize the ability of employers to take money out of pension funds for other purposes would raise money for the treasury. But I believe it is false economy. I vetoed that proposal last year, and I would have to do so again.

Finally, if our working families are going to succeed in the new economy, they must be able to buy health insurance policies that they do not lose when they change jobs or when someone in their family gets sick. Over the past two years, over one million Americans in working families have lost their health insurance. We have to do more to make health care available to every American. And Congress should start by passing the bipartisan bill sponsored by Senator Kennedy and Senator Kassebaum that would require insurance companies to stop dropping people when they switch jobs, and stop denying coverage for preexisting conditions. Let's all do that.

And even as we enact savings in these programs, we must have a common commitment to preserve the basic protections of Medicare and Medicaid--not just to the poor, but to people in working families, including children, people with disabilities, people with AIDS, and senior citizens in nursing homes.

In the past three years, we've saved $15 billion just by fighting health care fraud and abuse. We have all agreed to save much more. We have all agreed to stabilize the Medicare Trust Fund. But we must not abandon our fundamental obligations to the people who need Medicare and Medicaid. America cannot become stronger if they become weaker.

The G.I. Bill for workers, tax relief for education and child rearing, pension availability and protection, access to health care, preservation of Medicare and Medicaid--these things, along with the Family and Medical Leave Act passed in 1993--these things will help responsible, hard-working American families to make the most of their own lives.

But employers and employees must do their part, as well, as they are doing in so many of our finest companies--working together, putting the long-term prosperity ahead of the short-term gain. As workers increase their hours and their productivity, employers should make sure they get the skills they need and share the benefits of the good years, as well as the burdens of the bad ones. When companies and workers work as a team they do better, and so does America.

Our fourth great challenge is to take our streets back from crime and gangs and drugs. At last we have begun to find a way to reduce crime, forming community partnerships with local police forces to catch criminals and prevent crime. This strategy, called community policing, is clearly working. Violent crime is coming down all across America. In New York City murders are down 25 percent; in St. Louis, 18 percent; in Seattle, 32 percent. But we still have a long way to go before our streets are safe and our people are free from fear.

The Crime Bill of 1994 is critical to the success of community policing. It provides funds for 100,000 new police in communities of all sizes. We're already a third of the way there. And I challenge the Congress to finish the job. Let us stick with a strategy that's working and keep the crime rate coming down.

Community policing also requires bonds of trust between citizens and police. I ask all Americans to respect and support our law enforcement officers. And to our police, I say, our children need you as role models and heroes. Don't let them down.

The Brady Bill has already stopped 44,000 people with criminal records from buying guns. The assault weapons ban is keeping 19 kinds of assault weapons out of the hands of violent gangs. I challenge the Congress to keep those laws on the books.

Our next step in the fight against crime is to take on gangs the way we once took on the mob. I'm directing the FBI and other investigative agencies to target gangs that involve juveniles in violent crime, and to seek authority to prosecute as adults teenagers who maim and kill like adults.

And I challenge local housing authorities and tenant associations: Criminal gang members and drug dealers are destroying the lives of decent tenants. From now on, the rule for residents who commit crime and peddle drugs should be one strike and you're out.

I challenge every state to match federal policy to assure that serious violent criminals serve at least 85 percent of their sentence.

More police and punishment are important, but they're not enough. We have got to keep more of our young people out of trouble, with prevention strategies not dictated by Washington, but developed in communities. I challenge all of our communities, all of our adults, to give our children futures to say yes to. And I challenge Congress not to abandon the Crime Bill's support of these grass-roots prevention efforts.

Finally, to reduce crime and violence we have to reduce the drug problem. The challenge begins in our homes, with parents talking to their children openly and firmly. It embraces our churches and synagogues, our youth groups and our schools.

I challenge Congress not to cut our support for drug-free schools. People like the D.A.R.E. officers are making a real impression on grade schoolchildren that will give them the strength to say no when the time comes.

Meanwhile, we continue our efforts to cut the flow of drugs into America. For the last two years, one man in particular has been on the front lines of that effort. Tonight I am nominating him--a hero of the Persian Gulf War and the Commander in Chief of the United States Military Southern Command--General Barry McCaffrey, as America's new Drug Czar.

General McCaffrey has earned three Purple Hearts and two Silver Stars fighting for this country. Tonight I ask that he lead our nation's battle against drugs at home and abroad. To succeed, he needs a force far larger than he has ever commanded before. He needs all of us. Every one of us has a role to play on this team.

Our fifth challenge: to leave our environment safe and clean for the next generation. Because of a generation of bipartisan effort we do have cleaner water and air, lead levels in children's blood has been cut by 70 percent, toxic emissions from factories cut in half. Lake Erie was dead, and now it's a thriving resource. But 10 million children under 12 still live within four miles of a toxic waste dump. A third of us breathe air that endangers our health. And in too many communities, the water is not safe to drink. We still have much to do.

Yet Congress has voted to cut environmental enforcement by 25 percent. That means more toxic chemicals in our water, more smog in our air, more pesticides in our food. Lobbyists for polluters have been allowed to write their own loopholes into bills to weaken laws that protect the health and safety of our children. Some say that the taxpayer should pick up the tab for toxic waste and let polluters who can afford to fix it off the hook. I challenge Congress to reexamine those policies and to reverse them.

This issue has not been a partisan issue. The most significant environmental gains in the last 30 years were made under a Democratic Congress and President Richard Nixon. We can work together. We have to believe some basic things. Do you believe we can expand the economy without hurting the environment? I do. Do you believe we can create more jobs over the long run by cleaning the environment up? I know we can. That should be our commitment.

We must challenge businesses and communities to take more initiative in protecting the environment, and we have to make it easier for them to do it. To businesses this administration is saying: If you can find a cheaper, more efficient way than government regulations require to meet tough pollution standards, do it--as long as you do it right. To communities we say: We must strengthen community right-to-know laws requiring polluters to disclose their emissions, but you have to use the information to work with business to cut pollution. People do have a right to know that their air and their water are safe.

Our sixth challenge is to maintain America's leadership in the fight for freedom and peace throughout the world. Because of American leadership, more people than ever before live free and at peace. And Americans have known 50 years of prosperity and security.

We owe thanks especially to our veterans of World War II. I would like to say to Senator Bob Dole and to all others in this Chamber who fought in World War II, and to all others on both sides of the aisle who have fought bravely in all our conflicts since: I salute your service, and so do the American people.

All over the world, even after the Cold War, people still look to us and trust us to help them seek the blessings of peace and freedom. But as the Cold War fades into memory, voices of isolation say America should retreat from its responsibilities. I say they are wrong.

The threats we face today as Americans respect no nation's borders. Think of them: terrorism, the spread of weapons of mass destruction, organized crime, drug trafficking, ethnic and religious hatred, aggression by rogue states, environmental degradation. If we fail to address these threats today, we will suffer the consequences in all our tomorrows.

Of course, we can't be everywhere. Of course, we can't do everything. But where our interests and our values are at stake, and where we can make a difference, America must lead. We must not be isolationist.

We must not be the world's policeman. But we can and should be the world's very best peacemaker. By keeping our military strong, by using diplomacy where we can and force where we must, by working with others to share the risk and the cost of our efforts, America is making a difference for people here and around the world. For the first time since the dawn of the nuclear age, there is not a single Russian missile pointed at America's children.

North Korea has now frozen its dangerous nuclear weapons program. In Haiti, the dictators are gone, democracy has a new day, the flow of desperate refugees to our shores has subsided. Through tougher trade deals for America--over 80 of them--we have opened markets abroad, and now exports are at an all-time high, growing faster than imports and creating good American jobs.

We stood with those taking risks for peace: In Northern Ireland, where Catholic and Protestant children now tell their parents, violence must never return. In the Middle East, where Arabs and Jews who once seemed destined to fight forever now share knowledge and resources, and even dreams.

And we stood up for peace in Bosnia. Remember the skeletal prisoners, the mass graves, the campaign to rape and torture, the endless lines of refugees, the threat of a spreading war. All these threats, all these horrors have now begun to give way to the promise of peace. Now, our troops and a strong NATO, together with our new partners from Central Europe and elsewhere, are helping that peace to take hold.

As all of you know, I was just there with a bipartisan congressional group, and I was so proud not only of what our troops were doing, but of the pride they evidenced in what they were doing. They knew what America's mission in this world is, and they were proud to be carrying it out.

Through these efforts, we have enhanced the security of the American people. But make no mistake about it: important challenges remain.

The START II Treaty with Russia will cut our nuclear stockpiles by another 25 percent. I urge the Senate to ratify it--now. We must end the race to create new nuclear weapons by signing a truly comprehensive nuclear test ban treaty--this year.

As we remember what happened in the Japanese subway, we can outlaw poison gas forever if the Senate ratifies the Chemical Weapons Convention--this year. We can intensify the fight against terrorists and organized criminals at home and abroad if Congress passes the anti-terrorism legislation I proposed after the Oklahoma City bombing--now. We can help more people move from hatred to hope all across the world in our own interest if Congress gives us the means to remain the world's leader for peace.

My fellow Americans, the six challenges I have just discussed are for all of us. Our seventh challenge is really America's challenge to those of us in this hallowed hall tonight: to reinvent our government and make our democracy work for them.

Last year this Congress applied to itself the laws it applies to everyone else. This Congress banned gifts and meals from lobbyists. This Congress forced lobbyists to disclose who pays them and what legislation they are trying to pass or kill. This Congress did that, and I applaud you for it.

Now I challenge Congress to go further--to curb special interest influence in politics by passing the first truly bipartisan campaign reform bill in a generation. You, Republicans and Democrats alike, can show the American people that we can limit spending and open the airwaves to all candidates.

I also appeal to Congress to pass the line-item veto you promised the American people.

Our administration is working hard to give the American people a government that works better and costs less. Thanks to the work of Vice President Gore, we are eliminating 16,000 pages of unnecessary rules and regulations, shifting more decision-making out of Washington, back to states and local communities.

As we move into the era of balanced budgets and smaller government, we must work in new ways to enable people to make the most of their own lives. We are helping America's communities, not with more bureaucracy, but with more opportunities. Through our successful Empowerment Zones and Community Development Banks, we are helping people to find jobs, to start businesses. And with tax incentives for companies that clean up abandoned industrial property, we can bring jobs back to places that desperately, desperately need them.

But there are some areas that the federal government should not leave and should address and address strongly. One of these areas is the problem of illegal immigration. After years of neglect, this administration has taken a strong stand to stiffen the protection of our borders. We are increasing border controls by 50 percent. We are increasing inspections to prevent the hiring of illegal immigrants. And tonight, I announce I will sign an executive order to deny federal contracts to businesses that hire illegal immigrants.

Let me be very clear about this: We are still a nation of immigrants; we should be proud of it. We should honor every legal immigrant here, working hard to become a new citizen. But we are also a nation of laws.

I want to say a special word now to those who work for our federal government. Today our federal government is 200,000 employees smaller than it was the day I took office as President.

Our federal government today is the smallest it has been in 30 years, and it's getting smaller every day. Most of our fellow Americans probably don't know that. And there is a good reason: The remaining federal work force is composed of Americans who are now working harder and working smarter than ever before, to make sure the quality of our services does not decline.

I'd like to give you one example. His name is Richard Dean. He is a 49 year-old Vietnam veteran who's worked for the Social Security Administration for 22 years now. Last year he was hard at work in the Federal Building in Oklahoma City when the blast killed 169 people and brought the rubble down all around him. He reentered that building four times. He saved the lives of three women. He's here with us this evening, and I want to recognize Richard and applaud both his public service and his extraordinary personal heroism.

But Richard Dean's story doesn't end there. This last November, he was forced out of his office when the government shut down. And the second time the government shut down he continued helping Social Security recipients, but he was working without pay.

On behalf of Richard Dean and his family, and all the other people who are out there working every day doing a good job for the American people, I challenge all of you in this Chamber: Never, ever shut the federal government down again.

On behalf of all Americans, especially those who need their Social Security payments at the beginning of March, I also challenge the Congress to preserve the full faith and credit of the United States--to honor the obligations of this great nation as we have for 220 years; to rise above partisanship and pass a straightforward extension of the debt limit and show people America keeps its word.

I know that this evening I have asked a lot of Congress, and even more from America. But I am confident: When Americans work together in their homes, their schools, their churches, their synagogues, their civic groups, their workplace, they can meet any challenge.

I say again, the era of big government is over. But we can't go back to the era of fending for yourself. We have to go forward to the era of working together as a community, as a team, as one America, with all of us reaching across these lines that divide us--the division, the discrimination, the rancor--we have to reach across it to find common ground. We have got to work together if we want America to work.

I want you to meet two more people tonight who do just that. Lucius Wright is a teacher in the Jackson, Mississippi, public school system. A Vietnam veteran, he has created groups to help inner-city children turn away from gangs and build futures they can believe in. Sergeant Jennifer Rodgers is a police officer in Oklahoma City. Like Richard Dean, she helped to pull her fellow citizens out of the rubble and deal with that awful tragedy. She reminds us that in their response to that atrocity the people of Oklahoma City lifted all of us with their basic sense of decency and community.

Lucius Wright and Jennifer Rodgers are special Americans. And I have the honor to announce tonight that they are the very first of several thousand Americans who will be chosen to carry the Olympic torch on its long journey from Los Angeles to the centennial of the modern Olympics in Atlanta this summer--not because they are star athletes, but because they are star citizens, community heroes meeting America's challenges. They are our real champions.

Now, each of us must hold high the torch of citizenship in our own lives. None of us can finish the race alone. We can only achieve our destiny together--one hand, one generation, one American connecting to another.

There have always been things we could do together--dreams we could make real--which we could never have done on our own. We Americans have forged our identity, our very union, from every point of view and every point on the planet, every different opinion. But we must be bound together by a faith more powerful than any doctrine that divides us--by our belief in progress, our love of liberty, and our relentless search for common ground.

America has always sought and always risen to every challenge. Who would say that, having come so far together, we will not go forward from here? Who would say that this age of possibility is not for all Americans?

Our country is and always has been a great and good nation. But the best is yet to come, if we all do our part.

Mr. Speaker, Mr. Vice President, members of the 105th Congress, distinguished guests, my fellow Americans:

I come before you tonight with a challenge as great as any in our peacetime history--and a plan of action to meet that challenge, to prepare our people for the bold new world of the 21st century.

We have much to be thankful for. With four years of growth, we have won back the basic strength of our economy. With crime and welfare rolls declining, we are winning back our optimism, the enduring faith that we can master any difficulty. With the Cold War receding and global commerce at record levels, we are helping to win an unrivaled peace and prosperity all across the world.

My fellow Americans, the state of our union is strong, but now we must rise to the decisive moment, to make a nation and a world better than any we have ever known.

The new promise of the global economy, the Information Age, unimagined new work, life-enhancing technology--all these are ours to seize. That is our honor and our challenge. We must be shapers of events, not observers, for if we do not act, the moment will pass and we will lose the best possibilities of our future.

We face no imminent threat, but we do have an enemy. The enemy of our time is inaction.

So tonight I issue a call to action--action by this Congress, action by our states, by our people to prepare America for the 21st century; action to keep our economy and our democracy strong and working for all our people; action to strengthen education and harness the forces of technology and science; action to build stronger families and stronger communities and a safer environment; action to keep America the world's strongest force for peace, freedom and prosperity; and above all, action to build a more perfect union here at home.

We must be committed to the pursuit of opportunity for all Americans, responsibility from all Americans in a community of all Americans. And we must be committed to a new kind of government: not to solve all our problems for us, but to give our people--all our people--the tools they need to make the most of their own lives. And we must work together.

The people of this nation elected us all. They want us to be partners, not partisans. They put us all right here in the same boat. They gave us all oars, and they told us to row. Now, here is the direction I believe we should take.

First, we must move quickly to complete the unfinished business of our country: to balance the budget, renew our democracy, and finish the job of welfare reform.

Over the last four years we have brought new economic growth by investing in our people, expanding our exports, cutting our deficits, creating over 11 million new jobs, a four-year record.

Now we must keep our economy the strongest in the world. We here tonight have an historic opportunity. Let this Congress be the Congress that finally balances the budget. Thank you.

In two days I will propose a detailed plan to balance the budget by 2002. This plan will balance the budget and invest in our people while protecting Medicare, Medicaid, education and the environment. It will balance the budget and build on the vice president's efforts to make our government work better--even as it costs less.

It will balance the budget and provide middle-class tax relief to pay for education and health care, to help to raise a child, to buy and sell a home.

Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. I believe, I believe it is both unnecessary, unwise to adopt a balanced budget amendment that could cripple our country in time of economic crisis and force unwanted results such as judges halting Social Security checks or increasing taxes.

Let us at least agree we should not pass any measure, no measure should be passed that threatens Social Security. We don't need, whatever your view on that, we all must concede we don't need a constitutional amendment, we need action. Whatever our differences, we should balance the budget now, and then, for the long-term health of our society, we must agree to a bipartisan process to preserve Social Security and reform Medicare for the long run, so that these fundamental programs will be as strong for our children as they are for our parents.

And let me say something that's not in my script tonight. I know this is not going to be easy. But I really believe one of the reasons the American people gave me a second term was to take the tough decisions in the next four years that will carry our country through the next 50 years. I know it is easier for me than for you to say or do. But another reason I was elected is to support all of you, without regard to party, to give you what is necessary to join in these decisions. We owe it to our country and to our future.

Our second piece of unfinished business requires us to commit ourselves tonight, before the eyes of America, to finally enacting bipartisan campaign finance reform.

Now, Senators McCain and Feingold, Representatives Shays and Meehan have reached across party lines here to craft tough and fair reform. Their proposal would curb spending, reduce the role of special interests, create a level playing field between challengers and incumbents, and ban contributions from non-citizens, all corporate sources, and the other large soft-money contributions that both parties receive.

You know and I know that this can be delayed, and you know and I know that delay will mean the death of reform.

So let's set our own deadline. Let's work together to write bipartisan campaign finance reform into law and pass McCain-Feingold by the day we celebrate the birth of our democracy, July the 4th.

There is a third piece of unfinished business. Over the last four years we moved a record two and a quarter million people off the welfare roles. Then last year Congress enacted landmark welfare reform legislation demanding that all able-bodied recipients assume the responsibility of moving from welfare to work. Now each and every one of us has to fulfill our responsibility, indeed our moral obligation, to make sure that people who now must work can work. And now we must act to meet a new goal: two million more people off the welfare rolls by the year 2000.

Here is my plan: Tax credits and other incentives for businesses that hire people off welfare; Incentives for job placement firms in states to create more jobs for welfare recipients; Training, transportation and child care to help people go to work. Now I challenge every state--turn those welfare checks into private sector paychecks. I challenge every religious congregation, every community nonprofit, every business to hire someone off welfare. And I'd like to say especially to every employer in our country who ever criticized the old welfare system, you can't blame that old system anymore; we have torn it down. Now, do your part. Give someone on welfare the chance to go to work.

Tonight I am pleased to announce that five major corporations--Sprint, Monsanto, UPS, Burger King and United Airlines--will be the first to join in a new national effort to marshal America's businesses large and small to create jobs so that people can move from welfare to work.

We passed welfare reform. All of you know I believe we were right to do it. But no one can walk out of this chamber with a clear conscience unless you are prepared to finish the job.

And we must join together to do something else, too, something both Republican and Democratic governors have asked us to do: to restore basic health and disability benefits when misfortune strikes immigrants who came to this country legally, who work hard, pay taxes, and obey the law. To do otherwise is simply unworthy of a great nation of immigrants.

Now, looking ahead, the greatest step of all, the high threshold to the future we must now cross, and my number one priority for the next four years, is to ensure that all Americans have the best education in the world. Thank you.

Let's work together to meet these three goals: every eight-year-old must be able to read, every 12-year-old must be able to log on to the Internet, every 18-year-old must be able to go to college, and every adult American must be able to keep on learning for a lifetime.

My balanced budget makes an unprecedented commitment to these goals--$51 billion next year--but far more than money is required. I have a plan, a call to action for American education based on these 10 principles:

First, a national crusade for education standards--not federal government standards, but national standards, representing what all our students must know to succeed in the knowledge economy of the 21st century. Every state and school must shape the curriculum to reflect these standards and train teachers to lift students up to them. To help schools meet the standards and measure their progress, we will lead an effort over the next two years to develop national tests of student achievement in reading and math.

Tonight I issue a challenge to the nation. Every state should adopt high national standards, and by 1999, every state should test every 4th grader in reading and every 8th grader in math to make sure these standards are met.

Raising standards will not be easy, and some of our children will not be able to meet them at first. The point is not to put our children down, but to lift them up. Good tests will show us who needs help, what changes in teaching to make, and which schools need to improve. They can help us end social promotion, for no child should move from grade school to junior high or junior high to high school until he or she is ready.

Last month our secretary of education, Dick Riley, and I visited northern Illinois, where 8th grade students from 20 school districts, in a project aptly called First in the World, took the third International Math and Science Study.

That's a test that reflects the world-class standards our children must meet for the new era. And those students in Illinois tied for first in the world in science and came in second in math. Two of them, Kristen Tanner and Chris Getsla, are here tonight along with their teacher, Sue Winski. They're up there with the first lady, and they prove that when we aim high and challenge our students, they will be the best in the world. Let's give them a hand. Stand up, please.

Second, to have the best schools, we must have the best teachers. Most of us in this chamber would not be here tonight without the help of those teachers. I know that I wouldn't be here.

For years many of our educators, led by North Carolina's governor, Jim Hunt, and the National Board for Professional Teaching Standards, have worked very hard to establish nationally accepted credentials for excellence in teaching.

Just 500 of these teachers have been certified since 1995. My budget will enable 100,000 more to seek national certification as master teachers. We should reward and recognize our best teachers. And as we reward them, we should quickly and fairly remove those few who don't measure up, and we should challenge more of our finest young people to consider teaching as a career.

Third, we must do more to help all our children read. Forty percent--40 percent--of our 8-year-olds cannot read on their own. That's why we have just launched the America Reads initiative, to build a citizen army of one million volunteer tutors to make sure every child can read independently by the end of the 3rd grade. We will use thousands of AmeriCorps volunteers to mobilize this citizen army. We want at least 100,000 college students to help.

And tonight I'm pleased that 60 college presidents have answered my call, pledging that thousands of their work-study students will serve for one year as reading tutors.

You must use these tutors to help your students read. And it is especially a challenge to our parents. You must read with your children every night.

This leads to the fourth principle: Learning begins in the first days of life. Scientists are now discovering how young children develop emotionally and intellectually from their very first days and how important it is for parents to begin immediately talking, singing, even reading to their infants. The first lady has spent years writing about this issue, studying it. And she and I are going to convene a White House conference on early learning and the brain this spring to explore how parents and educators can best use these startling new findings.

We already know we should start teaching children before they start school. That's why this balanced budget expands Head Start to one million children by 2002. And that is why the vice president and Mrs. Gore will host their annual family conference this June on what we can do to make sure that parents are an active part of their children's learning all the way through school.

They've done a great deal to highlight the importance of family in our life, and now they're turning their attention to getting more parents involved in their children's learning all the way through school. I thank you, Mr. Vice President, and I thank you especially, Tipper, for what you're doing.

Fifth, every state should give parents the power to choose the right public school for their children. Their right to choose will foster competition and innovation that can make public schools better. We should also make it possible for more parents and teachers to start charter schools, schools that set and meet the highest standards and exist only as long as they do.

Our plan will help America to create 3,000 of these charter schools by the next century, nearly seven times as there are in the country today, so that parents will have even more choices in sending their children to the best schools.

Sixth, character education must be taught in our schools. We must teach our children to be good citizens. And we must continue to promote order and discipline; supporting communities that introduce school uniforms, impose curfews, enforce truancy laws, remove disruptive students from the classroom, and have zero tolerance for guns and drugs in schools.

Seventh, we cannot expect our children to raise themselves up in schools that are literally falling down. With the student population at an all-time high, and record numbers of school buildings falling into disrepair, this has now become a serious national concern. Therefore, my budget includes a new initiative: $5 billion to help communities finance $20 billion in school construction over the next four years.

Eighth, we must make the 13th and 14th years of education--at least two years of college--just as universal in America by the 21st century as a high school education is today, and we must open the doors of college to all Americans.

To do that, I propose America's Hope Scholarship, based on Georgia's pioneering program--two years of a $1,500 tax credit for college tuition, enough to pay for the typical community college. I also propose a tax deduction of up to $10,000 a year for all tuition after high school, an expanded IRA you can withdraw from tax free for education, and the largest increase in Pell Grant scholarship in 20 years.

Now this plan will give most families the ability to pay no taxes on money they save for college tuition. I ask you to pass it and give every American who works hard the chance to go to college.

Ninth, in the 21st century we must expand the frontiers of learning across a lifetime. All our people, of whatever age, must have the chance to learn new skills.

Most Americans live near a community college. The roads that take them there can be paths to a better future. My GI bill for America's workers will transform the confusing tangle of federal training programs into a simple skill grant to go directly into eligible workers' hands.

For too long this bill has been sitting on that desk there, without action. I ask you to pass it now. Let's give more of our workers the ability to learn and to earn for a lifetime.

Last year I challenged America to connect every classroom and library to the Internet by the year 2000, so that for the first time in our history, children in the most isolated rural town, the most comfortable suburbs, the poorest inner-city schools will have the same access to the same universe of knowledge.

That is my plan--a call to action for American education. Some may say that it is unusual for a president to pay this kind of attention to education. Some may say it is simply because the president and his wonderful wife have been obsessed with this subject for more years than they can recall. That is not what is driving these proposals. We must understand the significance of this endeavor.

One of the greatest sources of our strength throughout the Cold War was a bipartisan foreign policy. Because our future was at stake, politics stopped at the water's edge. Now I ask you, and I ask all our nation's governors, I ask parents, teachers and citizens all across America, for a new nonpartisan commitment to education, because education is a critical national security issue for our future and politics must stop at the schoolhouse door.

To prepare America for the 21st century, we must harness the powerful forces of science and technology to benefit all Americans. This is the first State of the Union carried live in video over the Internet, but we've only begun to spread the benefits of a technology revolution that should become the modern birthright of every citizen.

Our effort to connect every classroom is just the beginning. Now we should connect every hospital to the Internet so that doctors can instantly share data about their patients with the best specialists in the field.

And I challenge the private sector tonight to start by connecting every children's hospital as soon as possible so that a child in bed can stay in touch with school, family and friends. A sick child need no longer be a child alone.

We must build the second generation of the Internet so that our leading universities and national laboratories can communicate in speeds a thousand times faster than today to develop new medical treatments, new sources of energy, new ways of working together. But we cannot stop there.

As the Internet becomes our new town square, a computer in every home: a teacher of all subjects, a connection to all cultures. This will no longer be a dream, but a necessity. And over the next decade, that must be our goal.

We must continue to explore the heavens, pressing on with the Mars probes and the International Space Station, both of which will have practical applications for our everyday living.

We must speed the remarkable advances in medical science. The human genome project is now decoding the genetic mysteries of life. American scientists have discovered genes linked to breast cancer and ovarian cancer and medication that stops a stroke in progress and begins to reverse its effects, and treatments that dramatically lengthen the lives of people with HIV and AIDS.

Since I took office, funding for AIDS research at the National Institutes of Health has increased dramatically to $1.5 billion. With new resources, NIH will now become the most powerful discovery engine for an AIDS vaccine, working with other scientists, to finally end the threat of AIDS. Thank you. Remember that every year, every year we move up the discovery of an AIDS vaccine we'll save millions of lives around the world. We must reinforce our commitment to medical science.

To prepare America for the 21st century we must build stronger families. Over the past four years the Family and Medical Leave Law has helped millions of Americans to take time off to be with their families.

With new pressures on people and the way they work and live, I believe we must expand family leave so that workers can take time off for teacher conferences and a child's medical checkup. We should pass flex time so workers can choose to be paid for overtime in income or trade it in for time off to be with their families.

We must continue--we must continue, step by step, to give more families access to affordable quality health care. Forty million Americans still lack health insurance. Ten million children still lack health insurance. Eighty percent of them have working parents who pay taxes. That is wrong.

My--my balanced budget will extend health coverage to up to 5 million of those children. Since nearly half of all children who lose their insurance do so because their parents lose or change a job, my budget will also ensure that people who temporarily lose their jobs can still afford to keep their health insurance. No child should be without a doctor just because a parent is without a job.

My Medicare plan modernizes Medicare, increases the life of the trust fund to 10 years, provides support for respite care for the many families with loved ones afflicted with Alzheimer's, and, for the first time, it would fully pay for annual mammograms.

Just as we ended drive-through deliveries of babies last year, we must now end the dangerous and demeaning practice of forcing women home from the hospital only hours after a mastectomy.

I ask your support for bipartisan legislation to guarantee that a woman can stay in the hospital for 48 hours after a mastectomy. With us tonight is Dr. Kristen Zarfos, a Connecticut surgeon whose outrage at this practice spurred a national movement and inspired this legislation. I'd like her to stand so we can thank her for her efforts. Dr. Zarfos, thank you.

In the last four years, we have increased child support collections by 50 percent. Now we should go further and do better by making it a felony for any parent to cross a state line in an attempt to flee from this, his or her most sacred obligation.

Finally, we must also protect our children by standing firm in our determination to ban the advertising and marketing of cigarettes that endanger their lives.

To prepare America for the 21st century, we must build stronger communities. We should start with safe streets. Serious crime has dropped five years in a row. The key has been community policing. We must finish the job of putting 100,000 community police on the streets of the United States.

We should pass the Victims' Rights Amendment to the Constitution, and I ask you to mount a full-scale assault on juvenile crime, with legislation that declares war on gangs with new prosecutors and tougher penalties, extends the Brady bill so violent teen criminals will not be able to buy handguns, requires child safety locks on handguns to prevent unauthorized use, and helps to keep our schools open after hours, on weekends and in the summer so our young people will have someplace to go and something to say yes to.

This balanced budget includes the largest anti-drug effort ever--to stop drugs at their source; punish those who push them; and teach our young people that drugs are wrong, drugs are illegal, and drugs will kill them. I hope you will support it.

Our growing economy has helped to revive poor urban and rural neighborhoods, but we must do more to empower them to create the conditions in which all families can flourish and to create jobs through investment by business and loans by banks.

We should double the number of empowerment zones. They've already brought so much hope to communities like Detroit, where the unemployment rate has been cut in half in four years. We should restore contaminated urban land and buildings to constructive use. We should expand the network of community development banks.

And together, we must pledge tonight that we will use this empowerment approach, including private sector tax incentives, to renew our capital city so that Washington is a great place to work and live--and once again the proud face America shows the world!

We must protect our environment in every community. In the last four years, we cleaned up 250 toxic waste sites, as many as in the previous 12. Now we should clean up 500 more so that our children grow up next to parks, not poison. I urge to pass my proposal to make big polluters live by a simple rule: If you pollute our environment, you should pay to clean it up.

In the last four years, we strengthened our nation's safe food and clean drinking water laws; we protected some of America's rarest, most beautiful land in Utah's Red Rocks region; created three new national parks in the California desert; and began to restore the Florida Everglades.

Now we must be as vigilant with our rivers as we are with our lands. Tonight I announce that this year I will designate 10 American Heritage Rivers to help communities alongside them revitalize their waterfronts and clean up pollution in the rivers, proving once again that we can grow the economy as we protect the environment.

We must also protect our global environment, working to ban the worst toxic chemicals and to reduce the greenhouse gases that challenge our health even as they change our climate.

Now, we all know that in all of our communities some of our children simply don't have what they need to grow and learn in their own homes or schools or neighborhoods. And that means the rest of us must do more, for they are our children, too. That's why President Bush, General Colin Powell, former Housing Secretary Henry Cisneros will join the vice president and me to lead the President's Summit of Service in Philadelphia in April.

Our national service program, AmeriCorps, has already helped 70,000 young people to work their way through college as they serve America. Now we intend to mobilize millions of Americans to serve in thousands of ways. Citizen service is an American responsibility which all Americans should embrace. And I ask your support for that endeavor.

I'd like to make just one last point about our national community. Our economy is measured in numbers and statistics. And it's very important. But the enduring worth of our nation lies in our shared values and our soaring spirit. So instead of cutting back on our modest efforts to support the arts and humanities I believe we should stand by them and challenge our artists, musicians, and writers, challenge our museums, libraries, and theaters.

We should challenge all Americans in the arts and humanities to join with their fellow citizens to make the year 2000 a national celebration of the American spirit in every community, a celebration of our common culture in the century that is past and in the new one to come in a new millennium so that we can remain the world's beacon not only of liberty but of creativity long after the fireworks have faded.

To prepare America for the 21st century we must master the forces of change in the world and keep American leadership strong and sure for an uncharted time.

Fifty years ago, a farsighted America led in creating the institutions that secured victory in the Cold War and built a growing world economy. As a result, today more people than ever embrace our ideals and share our interests. Already we have dismantled many of the blocks and barriers that divided our parents' world. For the first time, more people live under democracy than dictatorship including every nation in our own hemisphere but one, and its day, too, will come.

Now we stand at another moment of change and choice, and another time to be farsighted, to bring America 50 more years of security and prosperity.

In this endeavor, our first task is to help to build for the very first time an undivided, democratic Europe. When Europe is stable, prosperous, and at peace, America is more secure.

To that end, we must expand NATO by 1999, so that countries that were once our adversaries can become our allies. At the special NATO summit this summer, that is what we will begin to do. We must strengthen NATO's Partnership for Peace with non-member allies. And we must build a stable partnership between NATO and a democratic Russia.

An expanded NATO is good for America, and a Europe in which all democracies define their future not in terms of what they can do to each other, but in terms of what they can do together for the good of all--that kind of Europe is good for America.

Our prosperity requires it. More than 2 million American jobs depend upon trade with Asia. There, too, we are helping to shape an Asia Pacific community of cooperation, not conflict.

Let our--let our progress there not mask the peril that remains. Together with South Korea, we must advance peace talks with North Korea and bridge the Cold War's last divide. And I call on Congress to fund our share of the agreement under which North Korea must continue to freeze and then dismantle its nuclear weapons program.

We must pursue a deeper dialogue with China for the sake of our interests and our ideals. An isolated China is not good for America. A China playing its proper role in the world is. I will go to China, and I have invited China's president to come here, not because we agree on everything, but because engaging China is the best way to work on our common challenges, like ending nuclear testing, and to deal frankly with our fundamental differences, like human rights.

The American people must prosper in the global economy. We've worked hard to tear down trade barriers abroad so that we can create good jobs at home. I'm proud to say that today America is once again the most competitive nation and the No. 1 exporter in the world.

Now we must act to expand our exports, especially to Asia and Latin America, two of the fastest-growing regions on earth, or be left behind as these emerging economies forge new ties with other nations. That is why we need the authority now to conclude new trade agreements that open markets to our goods and services even as we preserve our values.

We need not shrink from the challenge of the global economy. After all, we have the best workers and the best products. In a truly open market, we can out-compete anyone, anywhere on earth.

But this is about more than economics. By expanding trade, we can advance the cause of freedom and democracy around the world. There is no better example of this truth than Latin America where democracy and open markets are on the march together. That is why I will visit there in the spring to reinforce our important ties.

We should all be proud that America led the effort to rescue our neighbor, Mexico, from its economic crisis. And we should all be proud that last month Mexico repaid the United States, three full years ahead of schedule, with half a billion dollar profit to us.

America must continue to be an unrelenting force for peace. From the Middle East to Haiti, from Northern Ireland to Africa, taking reasonable risks for peace keeps us from being drawn into far more costly conflicts later. With American leadership, the killing has stopped in Bosnia. Now the habits of peace must take hold.

The new NATO force will allow reconstruction and reconciliation to accelerate. Tonight I ask Congress to continue its strong support of our troops. They are doing a remarkable job there for America, and America must do right by them.

Fifth, we must move strongly against new threats to our security. In the past four years, we agreed to ban--we led the way to a worldwide agreement to ban nuclear testing.

With Russia, we dramatically cut nuclear arsenals and we stopped targeting each other's citizens. We are acting to prevent nuclear materials from falling into the wrong hands, and to rid the world of land mines.

We are working with other nations with renewed intensity to fight drug traffickers and to stop terrorists before they act and hold them fully accountable if they do.

Now we must rise to a new test of leadership--ratifying the Chemical Weapons Convention. Make no mistake about it, it will make our troops safer from chemical attack. It will help us to fight terrorism. We have no more important obligations, especially in the wake of what we now know about the Gulf War.

This treaty has been bipartisan from the beginning, supported by Republican and Democratic administrations, and Republican and Democratic members of Congress, and already approved by 68 nations. But if we do not act by April the 29th, when this convention goes into force--with or without us--we will lose the chance to have Americans leading and enforcing this effort. Together we must make the Chemical Weapons Convention law so that at last we can begin to outlaw poisoned gas from the earth.

Finally, we must have the tools to meet all these challenges. We must maintain a strong and ready military. We must increase funding for weapons modernization by the year 2000. And we must take good care of our men and women in uniform. They are the world's finest.

We must also renew our commitment to America's diplomacy and pay our debts and dues to international financial institutions like the World Bank--and to a reforming United Nations. Every dollar--every dollar we devote to preventing conflicts, to promoting democracy, to stopping the spread of disease and starvation brings a sure return in security and savings. Yet international affairs spending today is just 1 percent of the federal budget, a small fraction of what America invested in diplomacy to choose leadership over escapism at the start of the cold war.

If America is to continue to lead the world, we here who lead America simply must find the will to pay our way. A farsighted America moved the world to a better place over these last 50 years. And so it can be for another 50 years. But a shortsighted America will soon find its words falling on deaf ears all around the world.

Almost exactly 50 years ago in the first winter of the Cold War President Truman stood before a Republican Congress and called upon our country to meet its responsibilities of leadership. This was his warning. He said, "If we falter, we may endanger the peace of the world, and we shall surely endanger the welfare of this nation."

That Congress, led by Republicans like Senator Arthur Vandenburg, answered President Truman's call. Together, they made the commitments that strengthened our country for 50 years. Now let us do the same. Let us do what it takes to remain the indispensable nation, to keep America strong, secure and prosperous for another 50 years.

In the end, more than anything else, our world leadership grows out of the power of our example here at home, out of our ability to remain strong as one America.

All over the world people are being torn asunder by racial, ethnic and religious conflicts that fuel fanaticism and terror. We are the world's most diverse democracy, and the world looks to us to show that it is possible to live and advance together across those kinds of differences. America has always been a nation of immigrants.

From the start, a steady stream of people in search of freedom and opportunity have left their own lands to make this land their home. We started as an experiment in democracy fueled by Europeans. We have grown into an experiment in democratic diversity fueled by openness and promise.

My fellow Americans, we must never, ever believe that our diversity is a weakness; it is our greatest strength.

Americans speak every language, know every country. People on every continent can look to us and see the reflection of their own great potential, and they always will, as long as we strive to give all our citizens, whatever their background, an opportunity to achieve their own greatness.

We're not there yet. We still see evidence of a biting bigotry and intolerance in ugly words and awful violence, in burned churches and bombed buildings. We must fight against this in our country and in our hearts.

Just a few days before my second inauguration, one of our country's best-known pastors, Reverend Robert Schuller, suggested that I read Isaiah 58:12. Here's what it says: "Thou shalt raise up the foundations of many generations, and thou shalt be called the repairer of the breach, the restorer of paths to dwell in."

I placed my hand on that verse when I took the oath of office, on behalf of all Americans, for no matter what our differences in our faiths, our backgrounds, our politics, we must all be repairers of the breach.

I want to say a word about two other Americans who show us how. Congressman Frank Tejeda was buried yesterday, a proud American whose family came from Mexico. He was only 51 years old. He was awarded the Silver Star, the Bronze Star and the Purple Heart fighting for his country in Vietnam. And he went on to serve Texas and America fighting for our future here in this chamber.

We are grateful for his service and honored that his mother, Lillie Tejeda, and his sister, Mary Alice, have come from Texas to be with us here tonight. And we welcome you. Thank you.

Gary Locke, the newly-elected governor of Washington state, is the first Chinese-American governor in the history of our country. He's the proud son of two of the millions of Asian American immigrants who strengthened America with their hard work, family values and good citizenship.

He represents the future we can all achieve. Thank you, governor, for being here. Please stand up.

Reverend Schuller, Congressman Tejeda, Governor Locke, along with Kristen Tanner and Chris Getsla, Sue Winski and Dr. Kristen Zarfos--they're all Americans from different roots whose lives reflect the best of what we can become when we are one America.

We may not share a common past, but we surely do share a common future. Building one America is our most important mission, the foundation for many generations of every other strength we must build for this new century. Money cannot buy it, power cannot compel it, technology cannot create it. It can only come from the human spirit.

America is far more than a place; it is an idea--the most powerful idea in the history of nations, and all of us in this chamber, we are now the bearers of that idea, leading a great people into a new world.

A child born tonight will have almost no memory of the 20th century. Everything that child will know about America will be because of what we do now to build a new century. We don't have a moment to waste.

Tomorrow there will be just over 1,000 days until the year 2000. One thousand days to prepare our people. One thousand days to work together. One thousand days to build a bridge to a land of new promise.

My fellow Americans, we have work to do. Let us seize those days and the century.

Mr. Speaker, Mr. Vice President, members of the 105th Congress, distinguished guests, my fellow Americans:

Since the last time we met in this chamber, America has lost two patriots and fine public servants. Though they sat on opposite sides of the aisle, Representatives Walter Capps and Sonny Bono shared a deep love for this House and an unshakable commitment to improving the lives of all our people.

In the past few weeks, they have both been eulogized. Tonight, I think we should begin by sending a message to their families and their friends that we celebrate their lives, and give thanks for their service to our nation.

For 209 years, it has been the president's duty to report to you on the state of the union. Because of the hard work and high purpose of the American people, these are good times for America. We have more than 14 million new jobs, the lowest unemployment in 24 years, the lowest core inflation in 30 years, incomes are rising and we have the highest home ownership in history. Crime has dropped for a record five years in a row, and the welfare rolls are at their lowest levels in 27 years. Our leadership in the world is unrivaled. Ladies and gentlemen, the state of our union is strong.

But with barely 700 days left in the 20th century, this is not a time to rest. It is a time to build--to build the America within reach, an America where everybody has a chance to get ahead, with hard work; where every citizen can live in a safe community; where families are strong, schools are good, and all our young people can go on to college; an America where scientists find cures for diseases from diabetes to Alzheimer's to AIDS; an America where every child can stretch a hand across a keyboard and reach every book ever written, every painting ever painted, every symphony ever composed; where government provides opportunity and citizens honor the responsibility to give something back to their communities; an America which leads the world to new heights of peace and prosperity.

This is the America we have begun to build. This is the America we can leave to our children--if we join together to finish the work at hand. Let us strengthen our nation for the 21st century.

Rarely have Americans lived through so much change in so many ways in so short a time. Quietly, but with gathering force, the ground has shifted beneath our feet as we have moved into an information age, a global economy, a truly new world.

For five years now, we have met the challenge of these changes as Americans have at every turning point in our history, by renewing the very idea of America, widening the circle of opportunity, deepening the meaning of our freedom, forging a more perfect union. We shaped a new kind of government for the information age. I thank the vice president for his leadership, and the Congress for its support, in building a government that is leaner, more flexible, a catalyst for new ideas, and most of all, a government that gives the American people the tools they need to make the most of their own lives.

We have moved past the sterile debate between those who say government is the enemy and those who say government is the answer. My fellow Americans, we have found a third way. We have the smallest government in 35 years, but a more progressive one. We have a smaller government but a stronger nation.

We are moving steadily toward a an even stronger America in the 21st century--an economy that offers opportunity, a society rooted in responsibility, and a nation that lives as a community.

First, Americans in this chamber and across this nation have pursued a new strategy for prosperity: fiscal discipline to cut interest rates and spur growth; investments in education and skills, in science and technology and transportation, to prepare our people for the new economy; new markets for American products and American workers.

When I took office, the deficit for 1998 was projected to be $357 billion, and heading higher. This year, our deficit is projected to be $10 billion, and heading lower.

For three decades, six presidents have come before you to warn of the damage deficits pose to our nation. Tonight, I come before you to announce that the federal deficit, once so incomprehensively large that it had 11 zeros, will be simply zero.

And if we hold fast to fiscal discipline, we may balance the budget this year--four years ahead of schedule.

You can all be proud of that, because turning a sea of red ink into black is no miracle. It is the product of hard work by the American people, and of two visionary actions in Congress: The courageous vote in 1993 that led to a cut in the deficit of 90 percent and the truly historic bipartisan balanced budget agreement passed by this Congress.

Here's the really good news: If we maintain our resolve, we will produce balanced budgets as far as the eye can see.

We must not go back to unwise spending or untargeted tax cuts that risk reopening the deficit. Last year, together, we enacted targeted tax cuts so that the typical middle class family will now have the lowest tax rates in 20 years.

My plan to balance the budget next year includes both new investments and new tax cuts targeted to the needs of working families: for education, for child care, for the environment.

But whether the issue is tax cuts or spending, I ask all of you to meet this test: approve only those priorities that can actually be accomplished without adding a dime to the deficit.

Now, if we balance the budget for next year, it is projected that we'll then have a sizeable surplus in the years that immediately follow. What should we do with this projected surplus?

Tonight, I propose that we reserve 100 percent of the surplus--that's every penny of any surplus--until we have taken all the necessary measures to strengthen the Social Security system for the 21st century.

Let us say--let us say to all Americans watching tonight, whether you're 70 or 50, or whether you just started paying into the system, Social Security will be there when you need it. Let us make this commitment: Social Security first. Let's do that--together.

I also want to say that all the American people who are watching us tonight should be invited to join in this discussion, in facing these issues squarely and forming a true consensus on how we should proceed. We'll start by conducting nonpartisan forums in every region of the country, and I hope that lawmakers of both parties will participate. We'll hold a White House conference on Social Security in December. And one year from now, I will convene the leaders of Congress to craft historic bipartisan legislation to achieve a landmark for our generation, a Social Security system that is strong in the 21st century.

In an economy that honors opportunity, all Americans must be able to reap the rewards of prosperity. Because these times are good, we can afford to take one simple, sensible step to help millions of workers struggling to provide for their families. We should raise the minimum wage.

The information age is first and foremost an education age, in which education will start at birth and continue throughout a lifetime. Last year, from this podium, I said that education has to be our highest priority. I laid out a 10-point plan to move us forward, and urged all of us to let politics stop at the schoolhouse door.

Since then, this Congress--across party lines--and the American people have responded, in the most important year for education in a generation-- expanding public school choice, opening the way to 3,000 charter schools, working to connect every classroom in the country to the information superhighway, committing to expand Head Start to a million children, launching America Reads, sending literally thousands of college students into our elementary schools to make sure all our 8-year-olds can read.

Last year I proposed--and you passed--220,000 new Pell Grant scholarships for deserving students. Student loans, already less expensive and easier to repay--now you get to deduct the interest. Families all over America now can put their savings into new, tax-free education IRAs.

And this year, for the first two years of college, families will get a $1500 tax credit--a Hope Scholarship that will cover the cost of most community college tuition. And for junior and senior year, graduate school, and job training, there is a lifetime learning credit. You did that, and you should be very proud of it.

And because of these actions, I have something to say to every family listening to us tonight: your children can go on to college. If you know a child from a poor family, tell her not to give up, she can go on to college. If you know a young couple struggling with bills, worried they won't be able to send their children to college, tell them not to give up, their children can go on to college. If you know somebody who's caught in a dead-end job and afraid he can't afford the classes necessary to get better jobs for the rest of his life, tell him not to give up, he can go on to college.

Because of the things that have been done, we can make college as universal in the 21st century as high school is today. And, my friends, that will change the face and future of America.

We have opened wide the doors of the world's best system of higher education. Now we must make our public elementary and secondary schools the world's best as well--by raising standards, raising expectations and raising accountability.

Thanks to the actions of this Congress last year, we will soon have, for the very first time, a voluntary national test based on national standards in fourth grade reading and eighth grade math.

Parents have a right to know whether their children are mastering the basics. And every parent already knows the key; good teachers and small classes.

Tonight, I propose the first ever national effort to reduce class size in the early grades. My balanced budget will help to hire a hundred thousand new teachers who have passed the state competency tests. Now with these teachers--listen--with these teachers, we will actually be able to reduce class size in the first, second and third grades to an average of 18 students a class all across America.

Now, if I've got the math right, more teachers teaching smaller classes requires more classrooms. So I also propose a school construction tax cut to help communities modernize or build 5,000 schools.

We must also demand greater accountability. When we promote a child from grade to grade who hasn't mastered the work, we don't do that child any favors. It is time to end social promotion in America's schools.

Last year, in Chicago, they made that decision--not to hold our children back, but to lift them up. Chicago stopped social promotion and started mandatory summer school to help students who are behind to catch up.

I propose to help other communities follow Chicago's lead. Let's say to them stop promoting children who don't learn, and we will give you the tools to make sure they do.

I also ask this Congress to support our efforts to enlist colleges and universities to reach out to disadvantaged children starting in the sixth grade so that they can get the guidance and hope they need so they can know that they, too, will be able to go on to college.

As we enter the 21st century, the global economy requires us to seek opportunity not just at home, but in all the markets of the world. We must shape this global economy, not shrink from it.

In the last five years, we have led the way in opening new markets, with 240 trade agreements that remove foreign barriers to products bearing the proud stamp, "Made in the USA." Today, record high exports account for fully one-third of our economic growth. I want to keep them going, because that's the way to keep America growing and to advance a safer, more stable world.

Now, all of you know, whatever your views are, that I think this is a great opportunity for America. I know there is opposition to more comprehensive trade agreements. I have listened carefully, and I believe that the opposition is rooted in two fears: first, that our trading partners will have lower environmental and labor standards, which will give them an unfair advantage in our market and do their own people no favors, even if there's more business; and second, that if we have more trade, more of our workers will lose their jobs and have to start over.

I think we should seek to advance worker and environmental standards around the world. It should--I have made it abundantly clear that it should be a part of our trade agenda, but we cannot influence other countries' decisions if we send them a message that we're backing away from trade with them.

This year I will send legislation to Congress, and ask other nations to join us, to fight the most intolerable labor practice of all-abusive child labor.

We should also offer help and hope to those Americans temporarily left behind with the global marketplace or by the march of technology, which may have nothing to do with trade. That's why we have more than doubled funding for training dislocated workers since 1993. And if my new budget is adopted, we will triple funding. That's why we must do more, and more quickly, to help workers who lose their jobs for whatever reason.

You know, we help communities in a special way when their military base closes. We ought to help them in the same way if their factory closes. Again, I ask the Congress to continue its bipartisan work to consolidate the tangle of training programs we have today into one single GI Bill for Workers, a simple skills grant so people can, on their own, move quickly to new jobs, to higher incomes and brighter futures.

Now, we all know in every way in life change is not always easy, but we have to decide whether we're going to try to hold it back and hide from it, or reap its benefits. And remember the big picture here: while we've been entering into hundreds of new trade agreements, we've been creating millions of new jobs. So this year we will forge new partnerships with Latin America, Asia and Europe, and we should pass the new African Trade Act. It has bipartisan support.

I will also renew my request for the fast-track negotiating authority necessary to open more new markets, created more new jobs, which every president has had for two decades.

You know, whether we like it or not, in ways that are mostly positive, the world's economies are more and more interconnected and interdependent. Today, an economic crisis anywhere can affect economies everywhere. Recent months have brought serious financial problems to Thailand, Indonesia, South Korea and beyond.

First, these countries are our customers. If they sink into recession, they won't be able to buy the goods we'd like to sell them.

Second, they're also our competitors, so if their currencies lose their value and go down, then the price of their goods will drop, flooding our market and others with much cheaper goods, which makes it a lot tougher for our people to compete.

And finally, they are our strategic partners. Their stability bolsters our security.

The American economy remains sound and strong, and I want to keep it that way. But because the turmoil in Asia will have an impact on all the world's economies, including ours, making that negative impact as small as possible is the right thing to do for America, and the right thing to do for a safer world.

Our policy is clear: no nation can recover if it does not reform itself, but when nations are willing to undertake serious economic reform, we should help them do it. So I call on Congress to renew America's commitment to the International Monetary Fund.

And I think we should say to all the people we're trying to represent here, that preparing for a far off storm that may reach our shores is far wiser than ignoring the thunder 'til the clouds are just overhead.

A strong nation rests on the rock of responsibility. A society rooted in responsibility must first promote the value of work, not welfare. We could be proud that after decades of finger-pointing and failure, together we ended the old welfare system. And we're now replacing welfare checks with paychecks.

Last year, after a record four-year decline in welfare rolls I challenged our nation to move two million more Americans off welfare by the year 2000. I'm pleased to report we have also met that goal two full years ahead of schedule.

This is a grand achievement, the sum of many acts of individual courage, persistence and hope.

For 13 years, Elaine Kinslow of Indianapolis, Indiana was on and off welfare. Today she's a dispatcher with a van company. She's saved enough money to move her family into a good neighborhood. And she's helping other welfare recipients go to work.

Elaine Kinslow and all those like her are the real heroes of the welfare revolution. There are millions like her all across America, and I am happy she could join the first lady tonight. Elaine, we're very proud of you. Please stand up.

We still have a lot more to do, all of us, to make welfare reform a success; providing child care, helping families move closer to available jobs, challenging more companies to join our Welfare to Work Partnership, increasing child-support collections from deadbeat parents who have a duty to support their own children. I also want to thank Congress for restoring some of the benefits to immigrants who are here legally and working hard. And I hope you will finish that job this year.

We have to make it possible for all hard-working families to meet their most important responsibilities. Two years ago, we helped guarantee that Americans can keep their health insurance when they changed jobs. Last year, we extended health care to up to 5 million children. This year, I challenge Congress to take the next historic steps. A hundred and sixty million of our fellow citizens are in managed care plans. These plans save money, and they can improve care. But medical decisions ought to be made by medical doctors, not insurance company accountants.

I urge this Congress to reach across the aisle and write into law a consumer bill of rights that says this: You have the right to know all your medical options, not just the cheapest. You have the right to choose the doctor you want for the care you need. You have the right to emergency room care wherever and whenever you need it. You have the right to keep your medical records confidential.

Now, traditional care or managed care, every American deserves quality care. Millions of Americans between the ages of 55 and 65 have lost their health insurance. Some are retired. Some are laid off. Some lose their coverage when their spouses retire. After a lifetime of work, they're left with nowhere to turn.

So I ask the Congress, let these hard-working Americans buy into the Medicare system. It won't add a dime to the deficit, but the peace of mind it will provide will be priceless.

Next, we must help parents protect their children from the gravest health threat that they face: an epidemic of teen smoking spread by multimillion dollar marketing campaigns. I challenge Congress. Let's pass bipartisan, comprehensive legislation that will improve public health, protect our tobacco farmers, and change the way tobacco companies do business forever.

Let's do what it takes to bring teen smoking down. Let's raise the price of cigarettes by up to $1.50 a pack over the next 10 years, with penalties on the tobacco industry if it keeps marketing to our children.

Now tomorrow, like every day, 3,000 children will start smoking, and a thousand will die early as a result. Let this Congress be remembered as the Congress that saved their lives.

In the new economy, most parents work harder than ever. They face a constant struggle to balance their obligations to be good workers, and their even more important obligations to be good parents.

The Family and Medical Leave Act was the very first bill I was privileged to sign into law as president in 1993. Since then, about 15 million people have taken advantage of it, and I've met a lot of them all across this country. I ask you to extend the law to cover 10 million more workers, and to give parents time off when they have to go see their children's teachers or take them to the doctor.

Child care is the next frontier we must face to enable people to succeed at home and at work. Last year, I co-hosted the very first White House conference on child care with one of our foremost experts, America's first lady. From all corners of America, we heard the same message--without regard to region or income or political affiliation--we've got to raise the quality of child care, we've got to make it safer, we've got to make it more affordable.

So here's my plan: Help families to pay for child care for a million more children; scholarships and background checks for child-care workers, and a new emphasis on early learning; tax credits for businesses that provide child care for their employees; and a larger child-care tax credit for working families.

Now, if you pass my plan, what this means is that a family of four with an income of $35,000 and high child-care costs will no longer pay a single penny of federal income tax.

You know, I think this is such a big issue with me because of my own personal experience. I have often wondered how my mother, when she was a young widow, would have been able to go away to school and get an education and come back and support me, if my grandparents hadn't been able to take care of me. She and I were really very lucky.

How many other families have never had that same opportunity? The truth is, we don't know the answer to that question, but we do know what the answer should be. Not a single American family should ever have to choose between the job they need and the child they love.

A society rooted in responsibility must provide safe streets, safe schools, and safe neighborhoods. We pursued a strategy of more police, tougher punishment, smarter prevention with crime-fighting partnerships, with local law enforcement and citizen groups, where the rubber hits the road.

I can report to you tonight that it's working. Violent crime is down, robbery is down, assault is down, burglary is down for five years in a row all across America. Now, we need to finish the job of putting 100,000 more police on our streets.

Again, I ask Congress to pass a juvenile crime bill that provides more prosecutors and probation officers to crack down on gangs and guns and drugs and bar violent juveniles from buying guns for life. And I ask you to dramatically expand our support for after-school programs. I think every American should know that most juvenile crime is committed between the hours of 3:00 in the afternoon and 8:00 at night. We can keep so many of our children out of trouble in the first place if we give them some place to go other than the streets, and we ought to do it.

Drug use is on the decline. I thank General McCaffrey for his leadership, and I thank this Congress for passing the largest anti-drug budget in history. Now I ask you to join me in a ground-breaking effort to hire a thousand new Border Patrol agents and to deploy the most sophisticated available new technologies to help close the door on drugs at our borders.

Police, prosecutors, and prevention programs, good as they are, they can't work if our court system doesn't work. Today, there are large numbers of vacancies in our federal courts. Here is what the chief justice of the United States wrote: "Judicial vacancies cannot remain at such high levels indefinitely without eroding the quality of justice."

I simply ask the United States Senate to heed this plea and vote on the highly qualified nominees before you, up or down.

We must exercise responsibility not just at home but around the world. On the eve of a new century, we have the power and the duty to build a new era of peace and security. But make no mistake about it; today's possibilities are not tomorrow's guarantees. America must stand against the poisoned appeals of extreme nationalism. We must combat an unholy access of new threats from terrorists, international criminals and drug traffickers.

These 21st century predators feed on technology and the free flow of information and ideas and people, and they will be all the more lethal if weapons of mass destruction fall into their hands. To meet these challenges, we are helping to write international rules of the road for the 21st century, protecting those who join the family of nations and isolating those who do not.

Within days, I will ask the Senate for its advice and consent to make Hungary, Poland and the Czech Republic the newest members of NATO. For 50 years, NATO contained communism and kept America and Europe secure. Now these three formerly communist countries have said yes to democracy. I ask the Senate to say yes to them, our new allies.

By taking in new members and working closely with new partners, including Russia and Ukraine, NATO can help to assure that Europe is a stronghold for peace in the 21st century.

Next, I will ask Congress to continue its support for our troops and their mission in Bosnia. This Christmas, Hillary and I traveled to Sarajevo with Senator and Mrs. Dole and a bipartisan congressional delegation. We saw children playing in the streets where, two years ago, they were hiding from snipers and shells. The shops were filled with food. The cafes were alive with conversation. The progress there is unmistakable; but it is not yet irreversible.

To take firm root, Bosnia's fragile peace still needs the support of American and allied troops when the current NATO mission ends in June. I think Senator Dole actually said it best. He said: "This is like being ahead in the fourth quarter of a football game; now is not the time to walk off the field and forfeit the victory."

I wish all of you could have seen our troops in Tuzla. They're very proud of what they are doing in Bosnia, and we're all very proud of them. One of those--one of those brave soldiers is sitting with the first lady tonight: Army Sergeant Michael Tolbert. His father was a decorated Vietnam vet. After college in Colorado, he joined the Army. Last year he led an infantry unit that stopped a mob of extremists from taking over a radio station that is a voice of democracy and tolerance in Bosnia. Thank you very much, Sergeant, for what you represent.

In Bosnia and around the world, our men and women in uniform always do their mission well. Our mission must be to keep them well-trained and ready, to improve their quality of life, and to provide the 21st century weapons they need to defeat any enemy.

I ask Congress to join me in pursuing an ambitious agenda to reduce the serious threat of weapons of mass destruction. This year, four decades after it was first proposed by President Eisenhower, a Comprehensive Nuclear Test Ban is within reach. By ending nuclear testing, we can help to prevent the development of new and more dangerous weapons, and make it more difficult for non-nuclear states to build them.

I am pleased to announce that four former chairmen of the Joint Chiefs of Staff--Generals John Shalikashvili, Colin Powell and David Jones, and Admiral William Crowe--have endorsed this treaty, and I ask the Senate to approve it this year.

Together we must also confront the new hazards of chemical and biological weapons, and the outlaw states, terrorists and organized criminals seeking to acquire them.

Saddam Hussein has spent the better part of this decade, and much of his nation's wealth, not on providing for the Iraqi people, but on developing nuclear, chemical and biological weapons and the missiles to deliver them.

The United Nations weapons inspectors have done a truly remarkable job, finding and destroying more of Iraq's arsenal than was destroyed during the entire gulf war. Now, Saddam Hussein wants to stop them from completing their mission.

I know I speak for everyone in this chamber, Republicans and Democrats, when I say to Saddam Hussein, "You cannot defy the will of the world," and when I say to him, "You have used weapons of mass destruction before; we are determined to deny you the capacity to use them again."

Last year, the Senate ratified the Chemical Weapons Convention to protect our soldiers and citizens from poison gas. Now we must act to prevent the use of disease as a weapon of war and terror. The Biological Weapons Convention has been in effect for 23 years now. The rules are good, but the enforcement is weak. We must strengthen it with a new international inspection system to detect and deter cheating. In the months ahead, I will pursue our security strategy with old allies in Asia and Europe, and new partners from Africa to India and Pakistan, from South America to China. And from Belfast to Korea to the Middle East, America will continue to stand with those who stand for peace.

More and more we are working with other nations to achieve common goals. If we want America to lead, we've got to set a good example. As we see--as we see so clearly in Bosnia, allies who share our goals can also share our burdens. In this new era, our freedom and independence are actually enriched, not weakened, by our increasing interdependence with other nations. But we have to do our part.

Our founders set America on a permanent course toward a more perfect union. To all of you, I say, it is a journey we can only make together, living as one community.

First, we have to continue to reform our government, the instrument of our national community. Everyone knows elections have become too expensive, fueling a fund-raising arms race.

This year, by March the 6th, at long last the Senate will actually vote on bipartisan campaign finance reform proposed by senators McCain and Feingold. Let's be clear; a vote against McCain-Feingold is a vote for soft money and for the status quo. I ask you to strengthen our democracy and pass campaign finance reform this year.

But at least equally important, we have to address the real reason for the explosion in campaign costs: the high cost of media advertising. I will-- for the folks watching at home, those were the groans of pain in the audience--I will formally request that the Federal Communications Commission act to provide free or reduced-cost television time--for candidates who observe spending limits voluntarily. The airwaves are a public trust, and broadcasters also have to help us in this effort to strengthen our democracy.

Under the leadership of Vice President Gore, we have reduced the federal payroll by 300,000 workers, cut 16,000 pages of regulation, eliminated hundreds of programs and improved the operations of virtually every government agency. But we can do more.

Like every taxpayer, I'm outraged by the reports of abuses by the IRS. We need some changes there: new citizen advocacy panels, a stronger taxpayer advocate, phone lines open 24 hours a day, relief for innocent taxpayers.

Last year, by an overwhelming bipartisan margin, the House of Representatives passed sweeping IRS reforms. This bill must not now languish in the Senate. Tonight, I ask the Senate: Follow the House; pass the bipartisan package as your first order of business. I hope to goodness before I finish I can think of something to say 'Follow the Senate' on so I'll be out of trouble!

A nation that lives as a community must value all its communities. For the past five years, we have worked to bring the spark of private enterprise to inner city and poor rural areas with community development banks, more commercial loans into poor neighborhoods, cleanup of polluted sites for development.

Under the continued leadership of the vice president, we propose to triple the number of empowerment zones to give business incentives to invest in those areas. We should. We should also give poor families more help to move into homes of their own, and we should use tax cuts to spur the construction of more low-income housing.

Last year, this Congress took strong action to help the District of Columbia. Let us renew our resolve to make our capital city a great city for all who live and visit here.

Our cities are the vibrant hubs of great metropolitan areas. They are still the gateway for new immigrants from every continent who come here to work for their own American dreams. Let's keep our cities going strong into the 21st Century. They're a very important part of our future.

Our communities are only as healthy as the air our children breathe, the water they drink, the Earth they will inherit. Last year we put in place the toughest-ever controls on smog and soot. We moved to protect Yellowstone, the Everglades, Lake Tahoe. We expanded every community's right to know about toxics that threaten their children.

Just yesterday, our food safety plan took effect, using new science to protect consumers from dangers like e. coli and salmonella.

Tonight, I ask you to join me in launching a new Clean Water initiative, a far-reaching effort to clean our rivers, our lakes and our coastal waters for our children.

Our overriding environmental challenge tonight is the worldwide problem of climate change, global warming, the gathering crisis that requires worldwide action. The vast majority of scientists have concluded unequivocally that if we don't reduce the emission of greenhouse gases at some point in the next century, we'll disrupt our climate and put our children and grandchildren at risk.

This past December, America led the world to reach a historic agreement committing our nation to reduce greenhouse gas emissions through market forces, new technologies, energy efficiency.

We have it in our power to act right here, right now. I propose $6 billion in tax cuts, in research and development, to encourage innovation, renewable energy, fuel-efficient cars, energy-efficient homes. Every time we have acted to heal our environment, pessimists have told us it would hurt the economy. Well, today our economy is the strongest in a generation, and our environment is the cleanest in a generation. We have always found a way to clean the environment and grow the economy at the same time. And when it comes to global warming, we'll do it again.

Finally, community means living by the defining American value, the ideal heard 'round the world: that we're all created equal. Throughout our history, we haven't always honored that ideal, and we've never fully lived up to it. Often it's easier to believe that our differences matter more than what we have in common. It may be easier, but it's wrong.

What we have to do in our day and generation to make sure that America truly becomes one nation, what do we have to do? We're becoming more and more and more diverse. Do you believe we can become one nation? The answer cannot be to dwell on our differences, but to build on our shared values.

And we all cherish family and faith, freedom and responsibility. We all want our children to grow up in the world where their talents are matched by their opportunities.

I've launched this national initiative on race to help us recognize our common interests and to bridge the opportunity gaps that are keeping us from becoming one America. Let us begin by recognizing what we still must overcome.

Discrimination against any American is un-American. We must vigorously enforce the laws that make it illegal. I ask your help to end the backlog at the Equal Employment Opportunity Commission. Sixty thousand of our fellow citizens are waiting in line for justice, and we should act now to end their wait.

We should also recognize that the greatest progress we can make toward building one America lies in the progress we make for all Americans, without regard to race. When we open the doors of college to all Americans, when we rid all our streets of crime, when there are jobs available to people from all our neighborhoods, when we make sure all parents have the child care they need, we're helping to build one nation.

We in this chamber and in this government must do all we can to address the continuing American challenge to build one America. But we'll only move forward if all our fellow citizens, including every one of you at home watching tonight, is also committed to this cause.

We must work together, learn together, live together, serve together. On the forge of common enterprise, Americans of all backgrounds can hammer out a common identity.

We see it today in the United States military, in the Peace Corps, in AmeriCorps. Wherever people of all races and backgrounds come together in a shared endeavor and get a fair chance, we do just fine. With shared values and meaningful opportunities and honest communications and citizen service, we can unite a diverse people in freedom and mutual respect. We are many. We must be one.

In that spirit, let us lift our eyes to the new millennium. How will we mark that passage? It just happens once every thousand years. This year, Hillary and I launched the White House Millennium Program to promote America's creativity and innovation and to preserve our heritage and culture into the 21st century. Our culture lives in every community, and every community has places of historic value that tell our stories as Americans. We should protect them.

I am proposing a public-private partnership to advance our arts and humanities and to celebrate the millennium by saving America's treasures great and small. And while we honor the past, let us imagine the future.

Now, think about this. The entire store of human knowledge now doubles every five years. In the 1980s, scientists identified the gene causing cystic fibrosis; it took nine years. Last year, scientists located the gene that causes Parkinson's disease--in only nine days! Within a decade, gene chips will offer a road map for prevention of illnesses throughout a lifetime. Soon, we'll be able to carry all the phone calls on Mother's Day on a single strand of fiber the width of a human hair. A child born in 1998 may well live to see the 22nd century.

Tonight, as part of our gift to the millennium, I propose a 21st Century research fund for pathbreaking scientific inquiry, the largest funding increase in history for the National Institutes of Health, the National Science Foundation, and the National Cancer Institute. We have already discovered we have already discovered genes for breast cancer and diabetes. I ask you to support this initiative so ours will be the generation that finally wins the war against cancer and begins a revolution in our fight against all deadly diseases.

As important as all this scientific progress is, we must continue to see that science serves humanity, not the other way around. We must prevent the misuse of genetic tests to discriminate against any American, and we must ratify the ethical consensus of the scientific and religious communities, and ban the cloning of human beings.

We should enable all the world's people to explore the far reaches of cyberspace. Think of this: the first time I made a State of the Union speech to you, only a handful of physicists used the World Wide Web-- literally just a handful of people.

Now in schools and libraries, homes and businesses, millions and millions of Americans surf the Net every day.

We must give parents the tools they need to help protect their children from inappropriate material on the Net, but we also must make sure that we protect the exploding, global commercial potential of the Internet. We can do the kinds of things that we need to do and still protect our kids. For one thing, I ask Congress to step up support for building the next generation Internet. It's getting kind of clogged, you know. And the next generation Internet will operate at speeds up to a thousand times faster than today.

Even as we explore this inner space, in the new millennium we're going to open new frontiers in outer space.

Throughout all history, human kind has had only one place to call home: our planet Earth. Beginning this year, 1998, men and women from 16 countries will build a foothold in the heavens--the International Space Station. With its vast expanses, scientists and engineers will actually set sail on an uncharted sea of limitless mystery and unlimited potential.

And this October, a true American hero, a veteran pilot of 149 combat missions and one five-hour space flight that changed the world, will return to the heavens. Godspeed, John Glenn!

John, you will carry with you America's hopes, and on your uniform once again you will carry America's flag, marking the unbroken connection between the deeds of America's past and the daring of America's future.

Nearly 200 years ago, a tattered flag, its broad stripes and bright stars still gleaming through the smoke of a fierce battle, moved Francis Scott Key to scribble a few words on the back of an envelope, the words that became our National Anthem. Today, that Star-Spangled Banner, along with the Declaration of Independence, the Constitution and the Bill of Rights, are on display just a short walk from here. They are America's treasures. And we must also save them for the ages.

I ask all Americans to support our project to restore all our treasures so that the generations of the 21st century can see for themselves the images and the words that are the old and continuing glory of America, an America that has continued to rise through every age against every challenge, a people of great works and greater possibilities, who have always, always found the wisdom and strength to come together as one nation, to widen the circle of opportunity, to deepen the meaning of our freedom, to form that more perfect union.

Mr. Speaker, Mr. Vice President, members of Congress, honored guests, my fellow Americans:

Let me begin by saluting the new speaker of the House and thanking him especially tonight for extending an invitation to two guests sitting in the gallery with Mrs. Hastert. Lyn Gibson and Wei Ling Chestnut are the widows of the two brave Capitol Hill police officers who gave their lives to defend freedom's house.

Mr. Speaker, at your swearing in you asked us all to work together in a spirit of civility and bipartisanship. Mr. Speaker, let's do exactly that.

Tonight, I stand before you to report that America has created the longest peacetime economic expansion in our history. With nearly 18 million new jobs, wages rising at more than twice the rate of inflation, the highest homeownership in history, the smallest welfare roles in 30 years, and the lowest peacetime unemployment since 1957.

For the first time in three decades, the budget is balanced. From a deficit of $290 billion in 1992, we had a surplus of $70 billion last year. And now, we are on course for budget surpluses for the next 25 years.

Thanks to the pioneering leadership of all of you, we have the lowest violent crime rate in a quarter century and the cleanest environment in a quarter century.

America is a strong force for peace--from Northern Ireland to Bosnia to the Middle East.

Thanks to the leadership of Vice President Gore, we have a government for the Information Age, once again a government that is a progressive instrument of the common good, rooted in our oldest values of opportunity, responsibility and community, devoted to fiscal responsibility, determined to give our people the tools they need to make the most of their own lives in the 21st century, a 21st century government for 21st century America.

My fellow Americans, I stand before you tonight to report that the state of our union is strong. Now, America is working again. The promise of our future is limitless. But we cannot realize that promise if we allow the hum of our prosperity to lull us into complacency. How we fare as a nation far into the 21st century depends upon what we do as a nation today.

So, with our budget surplus growing, our economy expanding, our confidence rising, now is the moment for this generation to meet our historic responsibility to the 21st century.

Our fiscal discipline gives us an unsurpassed opportunity to address a remarkable new challenge, the aging of America. With the number of elderly Americans set to double by 2030, the baby boom will become a senior boom.

Early in this century, being old meant being poor. When President Roosevelt created Social Security, thousands wrote to thank him for eliminating what one woman called "the stark terror of penniless, helpless old age." Even today, without Social Security, half our nation's elderly would be forced into poverty.

Today, Social Security is strong, but by 2013, payroll taxes will no longer be sufficient to cover monthly payments. By 2032, the trust fund will be exhausted and Social Security will be unable to pay the full benefits older Americans have been promised.

The best way to keep Social Security a rock solid guarantee is not to make drastic cuts in benefits; not to raise payroll tax rates; not to drain resources from Social Security in the name of saving it. Instead, I propose that we make the historic decision to invest the surplus to save Social Security.

Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector just as any private or state government pension would do. This will earn a higher return and keep Social Security sound for 55 years.

But we must aim higher. We should put Social Security on a sound footing for the next 75 years. We should reduce poverty among elderly women, who are nearly twice as likely to be poor as are other seniors. And we should eliminate the limits on what seniors on Social Security can earn.

Now, these changes will require difficult, but fully achievable choices over and above the dedication of the surplus. They must be made on a bipartisan basis. They should be made this year. So let me say to you tonight, I reach out my hand to all of you in both houses in both parties and ask that we join together in saying to the American people, we will save Social Security now.

Now, last year, we wisely reserved all of the surplus until we knew what it would take to save Social Security. Again, I say, we shouldn't spend any of it, not any of it, until after Social Security is truly saved. First thing's first.

Second, once we have saved Social Security, we must fulfill our obligation to save and improve Medicare. Already we have extended the life of the Medicare trust fund by 10 years, but we should extend it for at least another decade. Tonight, I propose that we use one out of every six dollars in the surplus for the next 15 years to guarantee the soundness of Medicare until the year 2020.

But, again--but, again, we should aim higher. We must be willing to work in a bipartisan way and look at new ideas, including the upcoming report of the Bipartisan Medicare Commission. If we work together, we can secure Medicare for the next two decades and cover the greatest growing need of seniors--affordable prescription drugs.

Third, we must help all Americans from their first day on the job to save, to invest, to create wealth.

From its beginnings, Americans have supplemented Social Security with private pensions and savings. Yet today millions of people retire with little to live on other than Social Security. Americans living longer than ever simply must save more than ever.

Therefore, in addition to saving Social Security and Medicare, I propose a new pension initiative for retirement security in the 21st century. I propose that we use a little over 11 percent of the surplus to establish universal savings accounts--USA accounts--to give all Americans the means to save.

With these new accounts, Americans can invest as they choose and receive funds to match a portion of their savings with extra help for those least able to save. USA accounts will help all Americans to share in our nation's wealth and to enjoy a more secure retirement. I ask you to support them.

I propose a tax credit of $1,000 for the aged, ailing or disabled and the families who care for them. Long-term care will become a bigger and bigger challenge with the aging of America--and we must do more to help our families deal with it.

I was born in 1946, the first year of the baby boom. I can tell you that one of the greatest concerns of our generation is our absolute determination not to let our growing old place an intolerable burden on our children and their ability to raise our grandchildren.

Our economic success and our fiscal discipline now give us the opportunity to lift that burden from their shoulders, and we should take it.

Saving Social Security, Medicare, creating U.S. accounts, this is the right way to use the surplus. If we do so, if we do so, we will still have resources to meet critical needs and education and defense.

And I want to point out that this proposal is fiscally sound. Listen to this, if we set aside 60 percent of the surplus for Social Security and 16 percent for Medicare over the next 15 years, that savings will achieve the lowest level of publicly-held debt since right before World War I in 1917.

So with these four measures; saving Social Security, strengthening Medicare, establishing the USA accounts, supporting long-term care, we can begin to meet our generation's historic responsibility to establish true security for 21st century seniors.

Now, there are more children, from more diverse backgrounds, in our public schools that any time in our history. Their education must provide the knowledge and nurture the creativity that will allow our entire nation to thrive in the new economy.

Today we can say something we couldn't say six years ago. With tax credits and more affordable student loans, with more work-study grants and more Pell Grants, with education IRAs, the new HOPE Scholarship tax cut that more than five million Americans will receive this year, we have finally opened the doors of college to all Americans.

With our support, nearly every state has set higher academic standards for public schools and a voluntary national test is being developed to measure the progress of our students. With over $1 billion in discounts available this year, we are well on our way to our goal of connecting every classroom and library to the Internet.

Last fall, you passed our proposal to start hiring 100,000 new teachers to reduce class size in the early grades. Now I ask you to finish the job.

You know our children are doing better. SAT scores are up. Math scores have risen in nearly all grades. But there's a problem. While our fourth-graders out performed their peers in other countries in math and science, our eighth-graders are around average, and our 12th-graders rank near the bottom. We must do better.

Now each year the national government invests more than $15 billion in our public schools. I believe we must change the way we invest that money to support what works and to stop supporting what does not work.

First, later this year I will send to Congress a plan that for the first time holds states and school districts accountable for progress and rewards them for results. My Education Accountability Act will require every school district receiving federal help to take the following five steps:

Now, no child, no child should graduate from high school with a diploma he or she can't read. We do our children no favors when we allow them to pass from grade to grade without mastering the material. But we can't just hold students back because the system fails them.

So my balanced budget triples the funding for summer school and after-school programs to keep a million children learning. Now, if--if you doubt this will work, just look at Chicago, which ended social promotion and made summer school mandatory for those who don't master the basics. Math and reading scores are up three years running with some of the biggest gains in some of the poorest neighborhoods. It will work, and we should do it.

Second, all states and school districts must turn around their worst performing schools or shut them down. That's the policy established in North Carolina by Governor Jim Hunt. North Carolina made the biggest gains in test scores in the nation last year. Our budget includes $200 million to help states turn around their own failing schools.

Third, all states and school districts must be held responsible for the quality of their teachers. The great majority of our teachers do a fine job, but in too many schools teachers don't have college majors or even minors in the subjects they teach. New teachers should be required to pass performance exams, and all teachers should know the subject their teaching.

This year's balanced budget contains resources to help them reach higher standards. And to attract talented young teachers to the toughest assignments, I recommend a six-fold increase in our program for college scholarships for students who commit to teach in the inner-cities and isolated rural areas and in Indian communities. Let us bring excellence to every part of America.

Fourth, we must empower parents with more information and more choices. In too many communities it's easier to get information on the quality of the local restaurants than on the quality of the local schools.

Every school district should issue report cards on every school. And parents should be given more choices in selecting their public schools.

When I became president, there was just one independent public charter school in all America. With our support on a bipartisan basis, today there are 1,100. My budget assures that early in the next century, there will be 3,000.

Fifth, to assure that our classrooms are truly places of learning, and to respond to what teachers have been asking us to do for years, we should say that all states and school districts must both adopt and implement sensible discipline policies.

Now let's do one more thing for our children. Today, too many schools are so old they're falling apart, or so overcrowded students are learning in trailers. Last fall, Congress missed the opportunity to change that. This year, with 53 million children in our schools, Congress must not miss that opportunity again. I ask you to help our communities build or modernize 5,000 schools.

If we do these things--end social promotion, turn around failing schools, build modern ones, support qualified teachers, promote innovation, competition and discipline--then we will begin to meet our generation's historic responsibility to create to 21st century schools.

Now, we also have to do more to support the millions of parents who give their all every day at home and at work.

The most basic tool of all is a decent income. So let's raise the minimum wage by a dollar an hour over the next two years.

And let's make sure that women and men get equal pay for equal work by strengthening enforcement of the equal pay laws.

That was encouraging, you know? There was more balance on the seesaw. I like that. Let's give them a hand. That's great.

Working parents also need quality child care. So, again this year, I ask Congress to support our plan for tax credits and subsidies for working families, for improved safety and quality, for expanded after-school program. And our plan also includes a new tax credit for stay-at-home parents, too. They need support as well.

Parents should never have to worry about choosing between their children and their work. Now, the Family and Medical Leave Act, the very first bill I signed into law, has now, since 1993, helped millions and millions of Americans to care for a newborn baby or an ailing relative without risking their jobs. I think it's time, with all of the evidence that it has been so little burdensome to employers, to extend family leave to 10 million more Americans working for smaller companies, and I hope you will support it.

Finally, on the matter of work, parents should never have to face discrimination in the workplace. So I want to ask Congress to prohibit companies from refusing to hire or promote workers simply because they have children. That is not right.

America's families deserve the world's best medical care. Thanks to bipartisan federal support for medical research, we are not on the verge of new treatments to prevent or delay diseases from Parkinson's to Alzheimer's to arthritis to cancer. But as we continue our advances in medical science, we can't let our medical system lag behind.

Managed care has literally transformed medicine in America, driving down costs, but threatening to drive down quality as well.

I think we ought to say to every American, you should have the right to know all you medical options, not just the cheapest. If you need a specialist, you should have a right to see one. You have a right to the nearest emergency care if you're in an accident. These are things that we ought to say. And I think we ought to say you should have a right to keep your doctor during a period of treatment whether it's a pregnancy or a chemotherapy treatment or anything else. I believe this.

Now I've ordered these rights to be extended to the 85 million Americans served by Medicare, Medicaid and other federal health programs. But only Congress can pass a Patients' Bill of Rights for all Americans.

Last year, Congress missed that opportunity, and we must not miss that opportunity again. For the sake of our families, I ask us to join together across party lines and pass a strong enforceable Patients' Bill of Rights.

As more of our medical records are stored electronically, the threats to all of our privacy increase. Because Congress has given me the authority to act if it does not do so by August, one way or another, we can all say to the American people, we will protect the privacy of medical records this year.

Now, two years ago, we acted to extend health coverage to up to five million children. Now we should go beyond that. We should make it easier for small businesses to offer health insurance. We should give people between the ages of 55 and 65 who lose their health insurance the chance to buy into Medicare.

And we should continue to ensure access to family planning. No one should have to choose between keeping health care and taking a job. And therefore, I especially ask you tonight to join hands to pass the landmark bipartisan legislation proposed by Sens. Kennedy and Jeffords, Roth and Moynihan, to allow people with disabilities to keep their health insurance when they go to work.

We need to enable our public hospitals, our community, our university health centers to provide basic, affordable care for all the millions of working families who don't have any insurance. They do a lot of that today, but much more can be done. And my balanced budget makes a good down payment toward that goal. I hope you will think about them and support that provision.

Let me say we must step up our efforts to treat and prevent mental illness. No American should ever be able--afraid ever to address this disease. This year we will host a White House Conference on Mental Health. With sensitivity, commitment and passion, Tipper Gore is leading our efforts here, and I'd like to thank her for what she's done. Thank you. Thank you.

As everyone knows, our children are targets of a massive media campaign to hook them on cigarettes. Now, I ask this Congress to resist the tobacco lobby, to reaffirm the FDA's authority to protect our children from tobacco and to hold tobacco companies accountable, while protecting tobacco farmers.

Smoking has cost taxpayers hundreds of billions of dollars under Medicare and other programs. You know, the states have been right about this. Taxpayers shouldn't pay for the cost of lung cancer, emphysema, and other smoking-related illnesses, the tobacco companies should.

So tonight I announce that the Justice Department is preparing a litigation plan to take the tobacco companies to court and with the funds we recover to strengthen Medicare.

Now, if we act in these areas--minimum wage, family leave, child care, health care, the safety of our children--then we will begin to meet our generation's historic responsibilities to strengthen our families for the 21st century.

Today, America is the most dynamic, competitive, job-creating economy in history, but we can do even better in building a 21st century economy that embraces all Americans.

Today's income gap is largely a skills gap. Last year, the Congress passed a law enabling workers to get a skills grant to choose the training they need. And I applaud all of you here who were part of that.

This year, I recommend a five-year commitment to the new system, so that we can provide over the next five years appropriate training opportunities for all Americans who lose their jobs and expand rapid response teams to help all towns which have been really hurt when businesses close. I hope you will support this.

Also, I ask your support for a dramatic increase in federal support for adult literacy to mount a national campaign aimed at helping the millions and millions of working people who still read at less than a fifth-grade level. We need to do this.

Here's some good news. In the past six years, we have cut the welfare rolls nearly in half.

Two years ago, from this podium, I asked five companies to lead a national effort to hire people off welfare. Tonight our welfare-to-work partnership includes 10,000 companies who have hired hundreds of thousands of people, and our balanced budget will help another 200,000 people move to the dignity and pride of work. I hope you will support it.

We must bring the spark of private enterprise to every corner of America, to build a bridge from Wall Street to Appalachia to the Mississippi Delta, to our Native American communities, with more support for community development banks for empowerment zones, for 100,000 more vouchers for affordable housing.

And I ask Congress to support our bold new plan to help businesses raise up to $15 billion in private sector capital, to bring jobs and opportunities and inner cities, rural areas, with tax credits, loan guarantees, including the new American Private Investment Companies, modeled on the Overseas Private Investment Companies.

Now, for years and years we've had this OPIC, this Overseas Private Investment Corporation, because we knew we had untapped markets overseas. But our greatest untapped markets are not overseas--they are right here at home. And we should go after them.

As this Congress knows very well, dropping prices and the loss of foreign markets have devastated too many family farmers. Last year, the Congress provided substantial assistance to help stave off a disaster in American agriculture, and I am ready to work with lawmakers of both parties to create a farm safety net that will include crop insurance reform and farm income assistance.

I ask you to join with me and do this. This should not be a political issue. Everyone knows what an economic problem is going on out there in rural America today, and we need an appropriate means to address it.

We must strengthen our lead in technology. It was government investment that led to the creation of the Internet. I propose a 28-percent increase in long-term computing research.

We also must be ready for the 21st century from its very first moment by solving the so-called Y2K computer problem. We had one member of Congress stand up and applaud. And we may have about that ration out there applauding at home in front of their television sets. But remember, this is a big, big problem, and we've been working hard on it. Already we've made sure that the Social Security checks will come on time.

But I want all the folks at home listening to this to know that we need every state and local government, every business large and small to work with us to make sure that this Y2K computer bug will be remembered as the last headache of the 20th century, not the first crisis of the 21st.

For our own prosperity, we must support economic growth abroad. You know, until recently a third of our economic growth came from exports. But over the past year and a half, financial turmoil has put that growth at risk. Today, much of the world is in recession, with Asia hit especially hard. This is the most serious financial crisis in half a century.

To meet it, the U.S. and other nations have reduced interest rates and strengthened the International Monetary Fund and while the turmoil is not over, we have worked very hard with other nations to contain it.

At the same time, we will continue to work on the long-term project: building a global financial system for the 21st century that promotes prosperity and tames the cycle of boom and bust that has engulfed so much of Asia. This June, I will meet with other world leaders to advance this historic purpose and I ask all of you to support our endeavors. I also ask you to support creating a freer and fairer trading system for 21st century America.

You know, I'd like to say something really serious to everyone in this chamber in both parties. I think trade has divided us and divided Americans outside this chamber for too long. Somehow, we have to find a common ground on which business and workers and environmentalists and farmers and government can stand together. I believe these are the things we ought to all agree on. So, let me try.

First, we ought to tear down barriers, open markets and expand trade, but at the same time, we must ensure that ordinary citizens in all countries actually benefit from trade; a trade that promotes the dignity of work and the rights of workers and protects the environment.

We must insist that international trade organizations be open to public scrutiny instead of mysterious, secret things subject to wild criticism.

When you come right down to it, now that the world economy is becoming more and more integrated, we have to do in the world what we spent the better part of this century doing here at home. We have got to put a human face on the global economy.

Now, we must enforce our trade laws when imports unlawfully flood our nation. I have already informed the government of Japan if that nation's sudden surge of steel imports into our country is not reversed, America will respond.

We must help all manufacturers hit hard by the present crisis with loan guarantees, and other incentives to increase American exports by nearly $2 billion. I'd like to believe we can achieve a new consensus on trade based on these principles. And I ask the Congress to join me again in this common approach and to give the president the trade authority long used and now overdue and necessary to advance our prosperity in the 21st century.

Tonight, I issue a call to the nations of the world to join the United States in a new round of global trade negotiation to expand exports of services, manufactures and farm products.

Tonight, I say, we will work with the International Labor Organization on a new initiative to raise labor standards around the world. And this year, we will lead the international community to conclude a treaty to ban abusive child labor everywhere in the world.

If we do these things--invest in our people, our communities, our technology--and lead in the global economy, then we will begin to meet our historic responsibility to build a 21st century prosperity for America.

You know, no nation in history has had the opportunity and the responsibility we now have to shape a world that is more peaceful, more secure, more free.

All Americans can be proud that our leadership helped to bring peace in Northern Ireland.

All Americans can be proud that our leadership has put Bosnia on the path to peace. And with our NATO allies we are pressing the Serbian government to stop its brutal repression in Kosovo--to bring those responsible to justice and to give the people of Kosovo the self-government they deserve.

All Americans can be proud that our leadership renewed hope for lasting peace in the Middle East. Some of you were with me last December as we watched the Palestinian National Council completely renounce its call for the destruction of Israel.

Now, I ask Congress to provide resources so that all parties can implement the Wye Agreement, to protect Israel's security, to stimulate the Palestinian economy, to support our friends in Jordan. We must not, we dare not, let them down. I hope you will help me.

As we work for peace, we must also meet threats to our nation's security, including increased danger from outlaw nations and terrorism.

We will defend our security wherever we are threatened, as we did this summer when we struck at Osama bin Laden's network of terror. The bombing of our embassies in Kenya and Tanzania reminds us again of the risks faced every day by those who represent America to the world. So let's give them the support they need, the safest possible workplaces, and the resources they must have so America can continue to lead.

We must work to keep terrorists from disrupting computer networks. We must work to prepare local communities for biological and chemical emergencies, to support research into vaccines and treatments. We must increase our efforts to restrain the spread of nuclear weapons and missiles, from Korea to India and Pakistan. We must expand our work with Russia, Ukraine and other former Soviet nations to safeguard nuclear materials and technology so they never fall into the wrong hands. Our balanced budget will increase funding for these critical efforts by almost two-thirds over the next five years.

With Russia we must continue to reduce our nuclear arsenals. The START II Treaty and the framework we have already agreed to for START III could cut them by 80 percent from their Cold War height.

It's been two years since I signed the Comprehensive Test Ban Treaty. If we don't do the right thing, other nations won't either. I ask the Senate to take this vital step, approve the treaty now to make it harder for other nations to develop nuclear arms, and to make sure we can end nuclear testing for ever.

For nearly a decade, Iraq has defied its obligations to destroy its weapons of terror and the missiles to deliver them.

America will continue to contain [Iraqi President] Saddam [Hussein] and we will work for the day when Iraq has a government worthy of its people. Now, last month, in our action over Iraq, our troops were superb. Their mission was so flawlessly executed, that we risk taking for granted the bravery and skill it required. Captain Jeff Taliaferro, a 10-year Air Force veteran of the Air Force, flew a B-1B bomber over Iraq as we attacked Saddam's war machine. He is here with us tonight. I would like to ask you to honor him and all the 33,000 men and women of Operation Desert Fox.

Since April, together we have added nearly $6 billion to maintain our military readiness. My balanced budget calls for a sustained increase over the next six years for readiness, for modernization, and for pay and benefits for our troops and their families.

You know, we are the heirs of a legacy of bravery represented in every community in America by millions of our veterans. America's defenders today still stand ready at a moments notice to go where comforts are few and dangers are many, to do what needs to be done as no one else can. They always come through for America. We must come through for them.

The new century demands new partnerships for peace and security. The United Nations plays a crucial role, with allies sharing burdens America might otherwise bear alone. America needs a strong and effective U.N. I want to work with this new Congress to pay our dues and our debts.

We must continue to support security and stability in Europe and Asia-- expanding NATO and defining its new missions, maintaining our alliance with Japan, with Korea, with our other Asian allies, and engaging China.

In China last year, I said to the leaders and the people what I'd like to say again tonight: Stability can no longer be bought at the expense of liberty.

But I'd also like to say again to the American people, it's important not to isolate China. The more we bring China into the world, the more the world will bring change and freedom to China.

Last spring, with some of you, I traveled to Africa, where I saw democracy and reform rising, but still held back by violence and disease. We must fortify African democracy and peace by launching radio democracy for Africa, supporting the transition to democracy now beginning to take place in Nigeria, and passing the African Trade and Development Act.

We must continue to deepen our ties to the Americas and the Caribbean, our common work to educate children, fight drugs, strengthen democracy and increase trade. In this hemisphere, every government but one is freely chosen by its people. We are determined that Cuba, too, will know the blessings of liberty.

The American people have opened their arms and their hearts and their arms to our Central American and Caribbean neighbors who have been so devastated by the recent hurricanes. Working with Congress, I am committed to help them rebuild.

When the first lady and Tipper Gore visited the region, they saw thousands of our troops and thousands of American volunteers. In the Dominican Republic, Hillary helped to rededicate a hospital that had been rebuilt by Dominicans and Americans working side by side. With her was some one else who has been very important to the relief efforts. You know sports records are made and sooner or later, they're broken. But making other people's lives better and showing our children the true meaning of brotherhood, that lasts forever. So for far more than baseball, Sammy Sosa, you're a hero in two countries tonight. Thank you.

So I say to all of you, if we do these things, if we pursue peace, fight terrorism, increase our strength, renew our alliances, we will begin to meet our generation's historic responsibility to build a stronger 21st century America in a freer, more peaceful world.

As the world has changed, so have our own communities. We must make the safer, more livable, and more united. This year, we will reach our goal of 100,000 community police officers ahead of schedule and under budget.

The Brady Bill has stopped a quarter million felons, fugitives, and stalkers from buying handguns and now, the murder rate is the lowest in 30 years, and the crime rate has dropped for six straight years.

Tonight, I propose a 21st Century Crime Bill to deploy the latest technologies and tactics to make our communities even safer. Our balanced budget will help put up to 50,000 more police on the street in the areas hardest hit by crime, and then to equip them with new tools from crime-mapping computers to digital mug shots. We must break the deadly cycle of drugs and crime.

Our budget expands support for drug testing and treatment, saying to prisoners, "If you stay on drugs, you have to stay behind bars." And to those on parole, "If you want to keep your freedom, you must stay free of drugs."

I ask Congress to restore the five-day waiting period for buying a handgun and extend the Brady Bill to prevent juveniles who commit violent crimes from buying a gun.

We must do more to keep our schools the safest places in our communities. Last year, every American was horrified and heartbroken by the tragic killings in Jonesboro, Paducah, Pearl, Edinboro, Springfield. We were deeply moved by the courageous parents now working to keep guns out of the hands of children and to make other efforts so that other parents don't have to live through their loss.

After she lost her daughter, Suzann Wilson of Jonesboro, Arkansas, came here to the White House with a powerful plea. She said "Please, please for the sake of your children, lock up your guns. Don't let what happened in Jonesboro, happen in your town."

It's a message she is passionately advocating every day. Suzann is here with us tonight, with the first lady. I would like to thank her for her courage and her commitment.

In memory of all the children who lost their lives to school violence, I ask you to strengthen the Safe And Drug Free School Act, to pass legislation to require child trigger locks, to do everything possible to keep our children safe.

Today, we're--excuse me--a century ago, President Theodore Roosevelt defined our great central task as leaving this land even a better land for our descendants than it is for us. Today, we're restoring the Florida Everglades, saving Yellowstone, preserving the red rock canyons of Utah, protecting California's redwoods, and our precious coasts.

But our most fateful new challenge is the threat of global warming. Nineteen ninety-eight was the warmest year ever recorded. Last year's heat waves, floods and storm are but a hint of what future generations may endure if we do not act now.

Tonight, I propose a new clean air fund to help communities reduce greenhouse and other pollutions, and tax incentives and investment to spur clean energy technologies. And I want to work with members of Congress in both parties to reward companies that take early, voluntary action to reduce greenhouse gases.

Now, all our communities face a preservation challenge as they grow, and green space shrinks. Seven thousand acres of farmland and open space are lost every day. In response, I propose two major initiatives. First, a $1 billion livability agenda to help communities save open space, ease traffic congestion, and grow in ways that enhance every citizen's quality of life. And second, a $1 billion lands legacy initiative to preserve places of natural beauty all across America, from the most remote wilderness to the nearest city park.

These are truly landmark initiatives, which could not have been developed without the visionary leadership of the vice president and I want to thank him very much for his commitment here. Thank you.

Now, to get the most out of your community, you have to give something back. That's why we created AmeriCorps, our national service program that gives today's generation a chance to serve their communities and earn money for college.

So far, in just four years, 100,000 young Americans have built low-income homes with Habitat for Humanity, helped tutor children with churches, work with FEMA to ease the burden of natural disasters and performed countless other acts of service that has made America better. I ask Congress to give more young Americans the chance to follow their lead and serve America in AmeriCorps.

Now, we must work to renew our national community as well for the 21st century. Last year, the House passed the bipartisan campaign finance reform legislation sponsored by Representatives [Christopher] Shays (R-Conn.) and [Martin T.] Meehan (D-Mass.) and Sens. [John] McCain (R-Ariz.) and [Russell] Feingold (D-Wis.). But a partisan minority in the Senate blocked reform. So I would like to say to the House, pass it again--quickly.

And I'd like to say to the Senate, I hope you will say yes to a stronger American democracy in the year 2000.

Since 1997, our Initiative on Race has sought to bridge the divides between and among our people. In its report last fall, the Initiatives Advisory Board found that Americans really do want to bring our people together across racial lines.

We know it's been a long journey. For some it goes back to before the beginning of our republic. For others, back since the Civil War; for others, throughout the 21st century. But for most of us alive today, in a very real sense this journey began 43 years ago, when a woman named Rosa Parks sat down on a bus in Alabama and wouldn't get up.

She's sitting down with the first lady tonight, and she may get up or not as she chooses.

We know that our continuing racial problems are aggravated, as the presidential initiative said, by opportunity gaps.

The initiative I've outlined tonight will help to close them. But we know that the discrimination gap has not been fully closed either. Discrimination or violence because of race or religion, ancestry or gender, disability or sexual orientation, is wrong and it ought to be illegal. Therefore, I ask Congress to make the Employment Non-Discrimination Act and the Hate Crimes Prevention Act the law of the land.

You know, now since every person in America counts, every American ought to be counted. We need a census that uses modern scientific methods to do that.

Our new immigrants must be part of our one America. After all, they're revitalizing our cities, they're energizing our culture, they're building up our economy. We have a responsibility to make them welcome here, and they have a responsibility to enter the mainstream of American life.

That means learning English and learning about our democratic system of government. There are now long waiting lines of immigrants that are trying to do just that.

Therefore, our budget significantly expands our efforts to help them meet their responsibility. I hope you will support it.

Whether our ancestors came here on the Mayflower, on slave ships; whether they came to Ellis Island or LAX in Los Angeles; whether they came yesterday or walked this land 1,000 years ago, our great challenge for the 21st century is to find a way to be one America. We can meet all the other challenges if we can go forward as one America.

You know, barely more than 300 days from now we will cross that bridge into the new millennium. This is a moment, as the first lady has said, to honor the past and imagine the future.

I'd like to take just a minute to honor her, for leading our Millennium Project, for all she's done for our children. For all she has done in her historic role to serve our nation and our best ideals at home and abroad, I honor her.

Last year--last year I called on Congress and every citizen to mark the millennium by saving America's treasures. Hillary's traveled all across the country to inspire recognition and support for saving places like Thomas Edison's invention factory or Harriet Tubman's home.

Now we have to preserve our treasures in every community. And tonight, before I close, I want to invite every town, every city, every community to become a nationally recognized millennium community by launching projects that save our history, promote our arts and humanities, prepare our children for the 21st century.

Already the response has been remarkable. And I want to say a special word of thanks to our private sector partners and to members in Congress of both parties for their support. Just one example. Because of you, the Star Spangled Banner will be preserved for the ages.

In ways large and small, as we look to the millennium, we are keeping alive what George Washington called the "sacred fire of liberty."

Six years ago, I came to office in a time of doubt for America, with our economy troubled, our deficit high, our people divided. Some even wondered whether our best days were behind us. But across this nation, in a thousand neighborhoods, I have seen, even amidst the pain and uncertainty of recession, the real heart and character of America.

Tonight, as I deliver the last State of the Union Address for the 20th century, no one anywhere in the world can doubt the enduring resolve and boundless capacity of the American people to work toward that "more perfect union" of our founders' dreams.

We are now, at the end of a century, when generation after generation of Americans answered the call to greatness, overcoming Depression, lifting up the dispossessed, bringing down barriers to racial prejudice, building the largest middle class in history, winning two world wars and the "long twilight struggle" of the Cold War.

We must all be profoundly grateful for the magnificent achievements of our forbearers in this century.

Yet perhaps in the daily press of events, in the clash of controversy, we don't see our own time for what it truly is--a new dawn for America.

A hundred years from tonight, another American president will stand in this place and report on the State of the Union. He--or she--will look back on the 21st century shaped in so many ways by the decisions we make here and now.

So let it be said of us then that we were thinking not only of our time, but of their time; that we reached as high as our ideals; that we put aside our divisions and found a new hour of healing and hopefulness; that we joined together to serve and strengthen the land we love.

My fellow Americans, this is our moment. Let us lift our eyes as one nation, and from the mountaintop of this American century, look ahead to the next one--asking God's blessing on our endeavors and on our beloved country.

Mr. Speaker, Mr. Vice President, Members of Congress, honored guests, my fellow Americans:

We are fortunate to be alive at this moment in history. Never before has our nation enjoyed, at once, so much prosperity and social progress with so little internal crisis or so few external threats. Never before have we had such a blessed opportunity--and, therefore, such a profound obligation-- to build the more perfect union of our founders' dreams.

We begin the new century with over 20 million new jobs. The fastest economic growth in more than 30 years; the lowest unemployment rates in 30 years; the lowest poverty rates in 20 years; the lowest African-American and Hispanic unemployment rates on record; the first back-to-back budget surpluses in 42 years.

Next month, America will achieve the longest period of economic growth in our entire history.

Our economic revolution has been matched by a revival of the American spirit: Crime down by 20 percent, to its lowest level in 25 years. Teen births down seven years in a row and adoptions up by 30 percent. Welfare rolls cut in half to their lowest levels in 30 years.

My gratitude also goes to those of you in this chamber who have worked with us to put progress above partisanship.

Eight years ago, it was not so clear to most Americans there would be much to celebrate in the year 2000. Then our nation was gripped by economic distress, social decline, political gridlock. The title of a best-selling book asked: "America: What went wrong?"

In the best traditions of our nation, Americans determined to set things right. We restored the vital center, replacing outdated ideologies with a new vision anchored in basic, enduring values: opportunity for all, responsibility from all, and a community of all Americans.

We reinvented government, transforming it into a catalyst for new ideas that stress both opportunity and responsibility, and give our people the tools to solve their own problems.

With the smallest federal workforce in 40 years, we turned record deficits into record surpluses, and doubled our investment in education. We cut crime: with 100,000 community police and the Brady Law, which has kept guns out of the hands of half a million criminals.

We ended welfare as we knew it--requiring work while protecting health care and nutrition for children, and investing more in child care, transportation, and housing to help their parents go to work. We have helped parents to succeed at work and at home--with family leave, which 20 million Americans have used to care for a newborn child or a sick loved one. We have engaged 150,000 young Americans in citizen service through AmeriCorps--while also helping them earn their way through college.

In 1992, we had a roadmap. Today, we have results. More important, America again has the confidence to dream big dreams. But we must not let our renewed confidence grow into complacency. We will be judged by the dreams and deeds we pass on to our children. And on that score, we will be held to a high standard, indeed. Because our chance to do good is so great.

My fellow Americans, we have crossed the bridge we built to the 21st Century. Now, we must shape a 21st-Century American revolution--of opportunity, responsibility, and community. We must be, as we were in the beginning, a new nation.

At the dawn of the last century, Theodore Roosevelt said, "the one characteristic more essential than any other is foresight. . . It should be the growing nation with a future which takes the long look ahead."

Every child will begin school ready to learn and graduate ready to succeed. Every family will be able to succeed at home and at work--and no child will be raised in poverty. We will meet the challenge of the aging of America. We will assure quality, affordable healthcare for all Americans. We will make America the safest big country on earth. We will bring prosperity to every American community. We will reverse the course of climate change and leave a cleaner, safer planet. America will lead the world toward shared peace and prosperity, and the far frontiers of science and technology. And we will become at last what our founders pledged us to be so long ago--one nation, under God, indivisible, with liberty and justice for all.

These are great goals, worthy of a great nation. We will not reach them all this year. Not even in this decade. But we will reach them. Let us remember that the first American revolution was not won with a single shot. The continent was not settled in a single year. The lesson of our history--and the lesson of the last seven years--is that great goals are reached step by step: always building on our progress, always gaining ground.

Of course, you can't gain ground if you're standing still. For too long this Congress has been standing still on some of our most pressing national priorities. Let's begin with them.

I ask you again to pass a real patient's bill of rights. Pass common-sense gun-safety legislation. Pass campaign finance reform. Vote on long overdue judicial nominations and other important appointees. And, again, I ask you to raise the minimum wage.

Two years ago, as we reached our first balanced budget, I asked that we meet our responsibility to the next generation by maintaining our fiscal discipline. Because we refused to stray from that path, we are doing something that would have seemed unimaginable seven years ago: We are actually paying down the national debt. If we stay on this path, we can pay down the debt entirely in 13 years and make America debt-free for the first time since Andrew Jackson was president in 1835.

In 1993, we began to put our fiscal house in order with the Deficit Reduction Act, winning passage in both houses by just one vote. Your former colleague, my first Secretary of the Treasury, led that effort. He is here tonight. Lloyd Bentsen, you have served America well.

Beyond paying off the debt, we must ensure that the benefits of debt reduction go to preserving two of the most important guarantees we make to every American--Social Security and Medicare. I ask you tonight to work with me to make a bipartisan down payment on Social Security reform by crediting the interest savings from debt reduction to the Social Security Trust Fund to ensure that it is strong and sound for the next 50 years.

But this is just the start of our journey. Now we must take the right steps toward reaching our great goals.

First and foremost, we need a 21st Century revolution in education, guided by our faith that every child can learn. Because education is more than ever the key to our children's future, we must make sure all our children have that key. That means quality preschool and afterschool, the best trained teachers in every classroom, and college opportunities for all our children.

For seven years, we have worked hard to improve our schools, with opportunity and responsibility: Investing more, but demanding more in return.

Reading, math, and college entrance scores are up. And some of the most impressive gains are in schools in poor neighborhoods.

All successful schools have followed the same proven formula: higher standards, more accountability, so all children can reach those standards. I have sent Congress a reform plan based on that formula. It holds states and school districts accountable for progress, and rewards them for results. Each year, the national government invests more than $15 billion in our schools. It's time to support what works and stop supporting what doesn't.

As we demand more than ever from our schools, we should invest more than ever in our schools.

Let's double our investment to help states and districts turn around their worst-performing schools--or shut them down.

Let's double our investment in afterschool and summer school programs-- boosting achievement, and keeping children off the street and out of trouble. If we do, we can give every child in every failing school in America the chance to meet high standards.

Since 1993, we've nearly doubled our investment in Head Start and improved its quality. Tonight, I ask for another $1 billion to Head Start, the largest increase in the program's history.

We know that children learn best in smaller classes with good teachers. For two years in a row, Congress has supported my plan to hire 100,000 new, qualified teachers, to lower class sizes in the early grades. This year, I ask you to make it three in a row.

And to make sure all teachers know the subjects they teach, tonight I propose a new teacher quality initiative--to recruit more talented people into the classroom, reward good teachers for staying there, and give all teachers the training they need.

We know charter schools provide real public school choice. When I became President, there was just one independent public charter school in all America. Today there are 1,700. I ask you to help us meet our goal of 3,000 by next year.

We know we must connect all our classrooms to the Internet. We're getting there. In 1994, only three percent of our classrooms were connected. Today, with the help of the Vice President's E-rate program, more than half of them are; and 90 percent of our schools have at least one connection to the Internet.

But we can't finish the job when a third of all schools are in serious disrepair, many with walls and wires too old for the Internet. Tonight, I propose to help 5,000 schools a year make immediate, urgent repairs. And again, to help build or modernize 6,000 schools, to get students out of trailers and into high-tech classrooms.

We should double our bipartisan GEAR UP program to mentor 1.4 million disadvantaged young people for college. And let's offer these students a chance to take the same college test-prep courses wealthier students use to boost their test scores.

To make the American Dream achievable for all, we must make college affordable for all. For seven years, on a bipartisan basis, we have taken action toward that goal: larger Pell grants, more-affordable student loans, education IRAs, and our HOPE scholarships, which have already benefited 5 million young people. 67 percent of high school graduates now go on to college, up almost 10 percent since 1993. Yet millions of families still strain to pay college tuition. They need help.

I propose a landmark $30-billion college opportunity tax cut--a middle-class tax deduction for up to $10,000 in college tuition costs. We've already made two years of college affordable for all. Now let's make four years of college affordable for all.

If we take all these steps, we will move a long way toward making sure every child starts school ready to learn and graduates ready to succeed.

We need a 21st Century revolution to reward work and strengthen families-- by giving every parent the tools to succeed at work and at the most important work of all--raising their children. That means making sure that every family has health care and the support to care for aging parents, the tools to bring their children up right, and that no child grows up in poverty.

From my first days as President, we have worked to give families better access to better health care. In 1997, we passed the Children's Health Insurance Program--CHIP--so that workers who don't have health care coverage through their employers at least can get it for their children. So far, we've enrolled 2 million children, and we're well on our way to our goal of 5 million.

But there are still more than 40 million Americans without health insurance, more than there were in 1993. Tonight I propose that we follow Vice President Gore's suggestion to make low income parents eligible for the insurance that covers their kids. Together with our children's initiative, we can cover nearly one quarter of the uninsured in America.

Again, I ask you to let people between 55 and 65--the fastest growing group of uninsured--buy into Medicare. And let's give them a tax credit to make that choice an affordable one.

When the Baby Boomers retire, Medicare will be faced with caring for twice as many of our citizens--and yet it is far from ready to do so. My generation must not ask our children's generation to shoulder our burden. We must strengthen and modernize Medicare now.

My budget includes a comprehensive plan to reform Medicare, to make it more efficient and competitive. And it dedicates nearly $400 billion of our budget surplus to keep Medicare solvent past 2025; and, at long last, to give every senior a voluntary choice of affordable coverage for prescription drugs.

Lifesaving drugs are an indispensable part of modern medicine. No one creating a Medicare program today would even consider excluding coverage for prescription drugs. Yet more than three in five seniors now lack dependable drug coverage which can lengthen and enrich their lives. Millions of older Americans who need prescription drugs the most pay the highest prices for them.

In good conscience, we cannot let another year pass without extending to all seniors the lifeline of affordable prescription drugs.

Record numbers of Americans are providing for aging or ailing loved ones at home. Last year, I proposed a $1,000 tax credit for long-term care. Frankly, that wasn't enough. This year, let's triple it to $3,000--and this year, let's pass it.

And we must make needed investments to expand access to mental health care. I want to thank the person who has led our efforts to break down the barriers to the decent treatment of mental illness: Tipper Gore.

Taken together, these proposals would mark the largest investment in health care in the 35 years since the creation of Medicare--a big step toward assuring health care for all Americans, young and old.

We must also make investments that reward work and support families. Nothing does that better than the Earned Income Tax Credit, the EITC. The "E" in "EITC" is about earning; working; taking responsibility and being rewarded for it. In my first Address to you, I asked Congress to greatly expand this tax credit; and you did. As a result, in 1998 alone, the EITC helped more than 4.3 million Americans work their way out of poverty and toward the middle class--double the number in 1993.

Tonight, I propose another major expansion. We should reduce the marriage penalty for the EITC, making sure it rewards marriage just as it rewards work. And we should expand the tax credit for families with more than two children to provide up to $1,100 more in tax relief.

We can't reward work and family unless men and women get equal pay for equal work. The female unemployment rate is the lowest in 46 years. Yet women still earn only about 75 cents for every dollar men earn. We must do better by providing the resources to enforce present equal pay laws, training more women for high-paying, high-tech jobs, and passing the Paycheck Fairness Act.

Two-thirds of new jobs are in the suburbs, far away from many low-income families. In the past two years, I have proposed and Congress has approved 110,000 new housing vouchers--rent subsidies to help working families live closer to the workplace. This year, let us more than double that number. If we want people to go to work, they have to be able to get to work.

Many working parents spend up to a quarter of their income on child care. Last year, we helped parents provide child care for about two million children. My child care initiative, along with funds already secured in welfare reform, would make child care better, safer, and more affordable for another 400,000 children.

For hard-pressed middle-income families, we should also expand the child care tax credit. And we should take the next big step. We should make that tax credit refundable for low-income families. For those making under $30,000 a year, that could mean up to $2,400 for child-care costs. We all say we're pro-work and pro-family. Passing this proposal would prove it.

Tens of millions of Americans live from paycheck to paycheck. As hard as they work, they still don't have the opportunity to save. Too few can make use of IRAs and 401-K retirement plans. We should do more to help working families save and accumulate wealth. That's the idea behind so-called Individual Development Accounts. Let's take that idea to a new level, with Retirement Savings Accounts that enable every low- and moderate-income family in America to save for retirement, a first home, a medical emergency, or a college education. I propose to match their contributions, however small, dollar for dollar, every year they save. And to give a major new tax credit for any small business that provides a meaningful pension to its workers.

Nearly one in three American children grows up in a home without a father. These children are five times more likely to live in poverty than children with both parents at home. Clearly, demanding and supporting responsible fatherhood is critical to lifting all children out of poverty.

We have doubled child support collections since 1992, and I am proposing tough new measures to hold still more fathers responsible. But we should recognize that a lot of fathers want to do right by their children--and need help to do it. Carlos Rosas of St. Paul, Minnesota, got that help. Now he has a good job and he supports his son Ricardo. My budget will help 40,000 fathers make the choices Carlos did. And I thank him for being here.

If there is any issue on which we can reach across party lines it is in our common commitment to reward work and strengthen families. Thanks to overwhelming bipartisan support from this Congress, we have improved foster care, supported those who leave it when they turn eighteen, and dramatically increased the number of foster children going to adoptive homes. I thank you for that. Of course, I am especially grateful to the person who has led our efforts from the beginning, and who has worked tirelessly for children and families for thirty years now: my wife, Hillary.

If we take all these steps, we will move a long way toward empowering parents to succeed at home and at work and ensuring that no child is raised in poverty. We can make these vital investments in health care, education and support for working families--and still offer tax cuts to help pay for college, for retirement, to care for aging parents and reduce the marriage penalty--without forsaking the path of fiscal discipline that got us here. Indeed, we must make these investments and tax cuts in the context of a balanced budget that strengthens and extends the life of Social Security and Medicare and pays down the national debt.

Crime in America has dropped for the past seven years--the longest decline on record, thanks to a national consensus we helped to forge on community police, sensible gun safety laws, and effective prevention. But nobody believes America is safe enough. So let's set a higher goal: let's make America the safest big country in the world.

Last fall, Congress supported my plan to hire--in addition to the 100,000 community police we have already funded--50,000 more, concentrated in high-crime neighborhoods. I ask your continued support.

Soon after the Columbine tragedy, Congress considered common-sense gun safety legislation to require Brady background checks at gun shows, child safety locks for all new handguns, and a ban on the importation of large-capacity ammunition clips. With courage--and a tie-breaking vote by the Vice President--the Senate faced down the gun lobby, stood up for the American people, and passed this legislation. But the House failed to follow suit.

We've all seen what happens when guns fall into the wrong hands. Daniel Mauser was only 15 years old when he was gunned down at Columbine. He was an amazing kid, a straight-A student, a good skier. Like all parents who lose their children, his father Tom has borne unimaginable grief. Somehow Tom has found the strength to honor his son by transforming his grief into action. Earlier this month, he took a leave of absence from his job to fight for tougher gun safety laws. I pray that his courage and wisdom will move this Congress to make common-sense gun safety legislation the very next order of business. Tom, thank you for being here tonight.

We must strengthen gun laws and better enforce laws already on the books. Federal gun crime prosecutions are up 16 percent since I took office. But again, we must do more. I propose to hire more federal and local gun prosecutors, and more ATF agents to crack down on illegal gun traffickers and bad-apple dealers. And we must give law enforcement the tools to trace every gun--and every bullet--used in a crime in America.

Listen to this: the accidental gun death rate of children under 15 in the United States is nine times higher than in the other 25 industrialized nations--combined. Technologies now exist that could lead to guns that can only be fired by the adults who own them. I ask Congress to fund research in Smart Gun technology. I also call on responsible leaders in the gun industry to work with us on smart guns and other steps to keep guns out of the wrong hands and keep our children safe.

Every parent I know worries about the impact of violence in the media on their children. I thank the entertainment industry for accepting my challenge to put voluntary ratings on TV programs and video and Internet games. But the ratings are too numerous, diverse, and confusing to be really useful to parents. Therefore, I now ask the industry to accept the First Lady's challenge--to develop a single, voluntary rating system for all children's entertainment, one that is easier for parents to understand and enforce.

If we take all these steps, we will be well on our way to making America the safest big country in the world.

To keep our historic economic expansion going, we need a 21st Century revolution to open new markets, start new businesses, and hire new workers right here in America--in our inner cities, poor rural areas, and on Indian reservations.

Our nation's prosperity has not yet reached these places. Over the last six months, I have traveled to many of them--joined by many of you, and many far-sighted business people--to shine a spotlight on the enormous potential in communities from Appalachia to the Mississippi Delta, from Watts to the Pine Ridge Indian Reservation. Everywhere I've gone, I've met talented people eager for opportunity, and able to work. Let's put them to work.

For business, it's the smart thing to do. For America, it's the right thing to do. And if we don't do it now, when will we ever get around to it?

I ask Congress to give businesses the same incentives to invest in America's new markets that they now have to invest in foreign markets. Tonight, I propose a large New Markets Tax Credit and other incentives to spur $22 billion in private-sector capital--to create new businesses and new investments in inner cities and rural areas.

Empowerment Zones have been creating these opportunities for five years now. We should also increase incentives to invest in them and create more of them.

This is not a Democratic or a Republican issue. It is an American issue. Mr. Speaker, it was a powerful moment last November when you joined me and the Reverend Jesse Jackson in your home state of Illinois, and committed to working toward our common goal, by combining the best ideas from both sides of the aisle. Mr. Speaker, I look forward to working with you.

We must maintain our commitment to community development banks and keep the community reinvestment act strong so all Americans have access to the capital they need to buy homes and build businesses.

We need to make special efforts to address the areas with the highest rates of poverty. My budget includes a special $110 million initiative to promote economic development in the Mississippi Delta; and $1 billion to increase economic opportunity, health care, education and law enforcement for Native American communities. In this new century, we should honor our historic responsibility to empower the first Americans. I thank leaders and members from both parties who have already expressed an interest in working with us on these efforts.

There's another part of our American community in trouble today--our family farmers. When I signed the Farm Bill in 1996, I said there was a great danger it would work well in good times but not in bad. Well, droughts, floods, and historically low prices have made times very bad for our farmers. We must work together to strengthen the farm safety net, invest in land conservation, and create new markets by expanding our program for bio-based fuels and products.

Today, opportunity for all requires something new: having access to a computer and knowing how to use it. That means we must close the digital divide between those who have these tools and those who don't.

Connecting classrooms and libraries to the Internet is crucial, but it's just a start. My budget ensures that all new teachers are trained to teach 21st Century skills and creates technology centers in 1,000 communities to serve adults. This spring, I will invite high-tech leaders to join me on another New Markets tour--to close the digital divide and open opportunity for all our people. I thank the high-tech companies that are already doing so much in this area--and I hope the new tax incentives I have proposed will encourage others to join us.

If we take these steps, we will go a long way toward our goal of bringing opportunity to every community.

To realize the full possibilities of the new economy, we must reach beyond our own borders, to shape the revolution that is tearing down barriers and building new networks among nations and individuals, economies and cultures: globalization.

It is the central reality of our time. Change this profound is both liberating and threatening. But there is no turning back. And our open, creative society stands to benefit more than any other--if we understand, and act on, the new realities of interdependence. We must be at the center of every vital global network, as a good neighbor and partner. We cannot build our future without helping others to build theirs.

First, we must forge a new consensus on trade. Those of us who believe passionately in the power of open trade must ensure that it lifts both our living standards and our values, never tolerating abusive child labor or a race to the bottom on the environment and worker protection. Still, open markets and rules-based trade are the best engines we know for raising living standards, reducing global poverty and environmental destruction, and assuring the free flow of ideas. There is only one direction for America on trade: we must go forward.

And we must make developing economies our partners in prosperity--which is why I ask Congress to finalize our groundbreaking African and Caribbean Basin trade initiatives.

Globalization is about more than economics. Our purpose must be to bring the world together around democracy, freedom, and peace, and to oppose those who would tear it apart.

Here are the fundamental challenges I believe America must meet to shape the 21st Century world.

First, we must continue to encourage our former adversaries, Russia and China, to emerge as stable, prosperous, democratic nations. Both are being held back from reaching their full potential: Russia by the legacy of communism, economic turmoil, a cruel and self-defeating war in Chechnya; China by the illusion that it can buy stability at the expense of freedom. But think how much has changed in the past decade: thousands of former Soviet nuclear weapons eliminated; Russian soldiers serving with ours in the Balkans; Russian people electing their leaders for the first time in a thousand years. And in China, an economy more open to the world than ever before. No one can know for sure what direction these great countries will choose. But we must do everything in our power to increase the chance they will choose wisely, to be constructive members of the global community.

That is why we must support those Russians struggling for a democratic, prosperous future; continue to reduce both our nuclear arsenals; and help Russia safeguard weapons and materials that remain.

That is why Congress should support the agreement we negotiated to bring China into the WTO, by passing Permanent Normal Trade Relations as soon as possible this year. Our markets are already open to China. This agreement will open China's markets to us. And it will advance the cause of peace in Asia and promote the cause of change in China.

A second challenge is to protect our security from conflicts that pose the risk of wider war and threaten our common humanity. America cannot prevent every conflict or stop every outrage. But where our interests are at stake and we can make a difference, we must be peacemakers.

We should be proud of America's role in bringing the Middle East closer than ever to a comprehensive peace; building peace in Northern Ireland; working for peace in East Timor and Africa; promoting reconciliation between Greece and Turkey and in Cyprus; working to defuse crises between India and Pakistan; defending human rights and religious freedom.

And we should be proud of the men and women of our armed forces and those of our allies who stopped the ethnic cleansing in Kosovo--enabling a million innocent people to return to their homes.

When Slobodan Milosevic unleashed his terror on Kosovo, Captain John Cherrey was one of the brave airmen who turned the tide. And when another American plane went down over Serbia, he flew into the teeth of enemy air defenses to bring his fellow pilot home. Thanks to our armed forces' skill and bravery, we prevailed without losing a single American in combat. Captain Cherrey, we honor you, and promise to finish the job you began.

A third challenge is to keep the inexorable march of technology from giving terrorists and potentially hostile nations the means to undermine our defenses. The same advances that have shrunk cell phones to fit in the palms of our hands can also make weapons of terror easier to conceal and easier to use.

We must meet this threat: by making effective agreements to restrain nuclear and missile programs in North Korea, curbing the flow of lethal technology to Iran; preventing Iraq from threatening its neighbors; increasing our preparedness against chemical and biological attack; protecting our vital computer systems from hackers and criminals; and developing a system to defend against new missile threats--while working to preserve our Anti-Ballistic Missile Treaty with Russia.

I hope we can have a constructive bipartisan dialogue this year to build a consensus which will lead eventually to the ratification of the Comprehensive Nuclear Test Ban Treaty.

A fourth challenge is to ensure that the stability of our planet is not threatened by the huge gulf between rich and poor. We cannot accept a world in which part of humanity lives on the cutting edge of a new economy, while the rest live on the bare edge of survival. We must do our part, with expanded trade, expanded aid, and the expansion of freedom.

From Nigeria to Indonesia, more people won the right to choose their leaders in 1999 than in 1989, the year the Berlin Wall fell. We must stand by democracies--like Colombia, fighting narco-traffickers for its people's lives, and our children's lives. I have proposed a strong two-year package to help Colombia win this fight; and I ask for your support. And I will propose tough new legislation to go after what drug barons value most-- their money.

In a world where 1.2 billion people live on less than a dollar a day, we must do our part in the global endeavor to reduce the debts of the poorest countries so they can invest in education, health and economic growth--as the Pope and other religious leaders have urged. Last year, Congress made a down payment on America's share. And I ask for your continued support.

And America must help more nations break the bonds of disease. Last year in Africa, AIDS killed ten times as many people as war did. My budget invests $150 million more in the fight against this and other infectious killers. Today, I propose a tax credit to speed the development of vaccines for diseases like malaria, TB and AIDS. I ask the private sector and our partners around the world to join us in embracing this cause. Together, we can save millions of lives.

Our final challenge is the most important: to pass a national security budget that keeps our military the best trained and best equipped in the world, with heightened readiness and 21st Century weapons; raises salaries for our service men and women; protects our veterans; fully funds the diplomacy that keeps our soldiers out of war; and makes good on our commitment to pay our UN dues and arrears. I ask you to pass this budget and I thank you for the extraordinary support you have given--Republicans and Democrats alike--to our men and women in uniform. I especially want to thank Secretary Cohen for symbolizing our bipartisan commitment to our national security--and Janet Cohen, I thank you for tirelessly traveling the world to show our support for the troops.

If we meet all these challenges, America can lead the world toward peace and freedom in an era of globalization.

I am grateful for the opportunities the Vice President and I have had to work hard to protect the environment and finally to put to rest the notion that you can't expand the economy while protecting the environment. As our economy has grown, we have rid more than 500 neighborhoods of toxic waste and ensured cleaner air and water for millions of families. In the past three months alone, we have acted to preserve more than 40 million acres of roadless lands in our National Forests and created three new National Monuments.

But as our communities grow, our commitment to conservation must grow as well. Tonight, I propose creating a permanent conservation fund to restore wildlife, protect coastlines, and save natural treasures from California redwoods to the Everglades. This Lands Legacy endowment represents by far the most enduring investment in land preservation ever proposed.

Last year, the Vice President launched a new effort to help make communities more livable--so children will grow up next to parks, not parking lots, and parents can be home with their children instead of stuck in traffic. Tonight, we propose new funding for advanced transit systems-- for saving precious open spaces--for helping major cities around the Great Lakes protect their waterways and enhance their quality of life.

The greatest environmental challenge of the new century is global warming. Scientists tell us that the 1990s were the hottest decade of the entire millennium. If we fail to reduce emissions of greenhouse gases, deadly heat waves and droughts will become more frequent, coastal areas will be flooded, economies disrupted.

Many people in the United States and around the world still believe we can't cut greenhouse gas pollution without slowing economic growth. In the Industrial Age that may have been true. In the digital economy, it isn't. New technologies make it possible to cut harmful emissions and provide even more growth. For example, just last week, automakers unveiled cars that get 70 to 80 miles a gallon--the fruits of a unique research partnership between government and industry. Before you know it, efficient production of biofuels will give us the equivalent of hundreds of miles from a gallon of gas.

To speed innovations in environmental technologies, I propose giving major tax incentives to businesses for the production of clean energy--and to families for buying energy-saving homes and appliances and the next generation of super-efficient cars when they hit the showroom floor. I also call on the auto industry to use available technologies to make all new cars more fuel efficient right away. And on Congress to make more of our clean-energy technologies available to the developing world--creating cleaner growth abroad and new jobs at home.

In the new century, innovations in science and technology will be the key not only to the health of the environment but to miraculous improvements in the quality of our lives and advances in the economy.

Later this year, researchers will complete the first draft of the entire human genome--the very blueprint of life. It is important for all Americans to recognize that your tax dollars have fueled this research-- and that this and other wise investments in science are leading to a revolution in our ability to detect, treat, and prevent disease.

For example, researchers have identified genes that cause Parkinson's Disease, diabetes, and certain types of cancer--and they are designing precision therapies that will block the harmful effects of these faulty genes for good. Researchers are already using this new technique to target and destroy cells that cause breast cancer. Soon, we may be able to use it to prevent the onset of Alzheimer's Disease. Scientists are also working on an artificial retina to help many blind people to see and microchips that would directly stimulate damaged spinal cords and allow people who are now paralyzed to stand up and walk.

Science and engineering innovations are also propelling our remarkable prosperity. Information technology alone now accounts for a third of our economic growth, with jobs that pay almost 80 percent above the private sector average. Again, we should keep in mind: government-funded research brought supercomputers, the Internet, and communications satellites into being. Soon researchers will bring us devices that can translate foreign languages as fast as you can speak; materials 10 times stronger than steel at a fraction of the weight; and molecular computers the size of a teardrop with the power of today's fastest supercomputers.

To accelerate the march of discovery across all disciplines of science and technology, my budget includes an unprecedented $3 billion increase in the 21st Century Research Fund, the largest increase in civilian research in a generation.

These new breakthroughs must be used in ways that reflect our most cherished values. First and foremost, we must safeguard our citizens' privacy. Last year, we proposed rules to protect every citizen's medical records. This year, we will finalize those rules. We have also taken the first steps to protect the privacy of bank and credit card statements and other financial records. Soon I will send legislation to the Congress to finish that job. We must also act to prevent any genetic discrimination by employers or insurers.

These steps will allow America to lead toward the far frontiers of science and technology--enhancing our health, environment, and economy in ways we cannot even imagine today.

At a time when science, technology and the forces of globalization are bringing so many changes into our lives, it is more important than ever that we strengthen the bonds that root us in our local communities and in our national communities.

No tie binds different people together like citizen service. There is a new spirit of service in America--a movement we have supported with AmeriCorps, an expanded Peace Corps, and unprecedented new partnerships with businesses, foundations, and community groups. Partnerships to enlist 12,000 companies in moving 650,000 of our fellow citizens from welfare to work. To battle drug abuse and AIDS. To teach young people to read. To Save America's Treasures. To strengthen the arts. To fight teen pregnancy. To prevent youth violence. To promote racial healing.

We can do even more to help Americans help each other. We should help faith-based organizations do more to fight poverty and drug abuse and help young people get back on the right track with initiatives like Second Chance Homes to help unwed teen mothers. We should support Americans who tithe and contribute to charities, but don't earn enough to claim a tax deduction for it. Tonight, I propose new tax incentives to allow low- and middle-income citizens to get that deduction.

We should do more to help new immigrants fully participate in the American community--investing more to teach them civics and English. And since everyone in our community counts, we must make sure everyone is counted in this year's census.

Within ten years there will be no majority race in our largest state, California. In a little more than 50 years, there will be no majority race in America. In a more interconnected world, this diversity can be our greatest strength. Just look around this chamber. We have members from virtually every racial, ethnic, and religious background. And America is stronger for it. But as we have seen, these differences all too often spark hatred and division, even here at home.

We have seen a man dragged to death in Texas simply because he was black. A young man murdered in Wyoming simply because he was gay. In the last year alone, we've seen the shootings of African Americans, Asian Americans, and Jewish children simply because of who they were. This is not the American way. We must draw the line. Without delay, we must pass the Hate Crimes Prevention Act and the Employment Non-Discrimination Act. And we should reauthorize the Violence Against Women Act.

No American should be subjected to discrimination in finding a home, getting a job, going to school, or securing a loan. Tonight, I propose the largest ever investment to enforce America's civil rights laws. Protections in law must be protections in fact.

Last February, I created the White House Office of One America to promote racial reconciliation. That's what Hank Aaron, has done all his life. From his days as baseball's all-time homerun king to his recent acts of healing, he has always brought Americans together. We're pleased he's with us tonight.

This fall, at the White House, one of America's leading scientists said something we should all remember. He said all human beings, genetically, are 99.9 percent the same. So modern science affirms what ancient faith has always taught: the most important fact of life is our common humanity.

Therefore, we must do more than tolerate diversity--we must honor it and celebrate it.

My fellow Americans, each time I prepare for the State of the Union, I approach it with great hope and expectations for our nation. But tonight is special--because we stand on the mountaintop of a new millennium. Behind us we see the great expanse of American achievement; before us, even grander frontiers of possibility.

We should be filled with gratitude and humility for our prosperity and progress; with awe and joy at what lies ahead; and with absolute determination to make the most of it.

When the framers finished crafting our Constitution, Benjamin Franklin stood in Independence Hall and reflected on a painting of the sun, low on the horizon. He said, "I have often wondered whether that sun was rising or setting. Today," Franklin said, "I have the happiness to know it is a rising sun." Well, today, because each generation of Americans has kept the fire of freedom burning brightly, lighting those frontiers of possibility, we still bask in the warmth of Mr. Franklin's rising sun.

After 224 years, the American Revolution continues. We remain a new nation. As long as our dreams outweigh our memories, America will be forever young. That is our destiny. And this is our moment.

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