 New York State's First Lady, the Franklin and Eleanor Roosevelt Institute. Our community values its presidential tradition, and we are grateful to be touched once again by this presidency. And now, Hyde Park and the Hudson Valley is proud to welcome, if you would, Senator... ...doctors have finally put it to life down here as a president. And my great pleasure is to introduce you, James Roosevelt, who makes the grandson of Mrs. Roosevelt, Robin Bowell Kill, a part of the year, son of Representative James Roosevelt, and a close personal friend, he and his wife, President James Roosevelt, come home. We're looking at the same kind of leadership again, Roosevelt, also from New York State, put it very well when he talked about the presidency as a bully pulpit. And this morning, the Boston Globe says that not since FDR, have Americans had a president so able and willing to use that pulpit to persuade people to the right course. And who knows and cares a great deal about a subject that we must all come to grips with this year, the crisis in health care, to Senator Pat Moynihan, one of the most productive people in public life in the 20th century. We wish Governor Cuomo good health. He might have thought to himself on deciding whether to do the responsible thing and take his sickbed today that he's probably heard this speak before and he's probably given it before. I can't tell you how grateful I am to your governor for his support and his wise counsel. We had a delightful time in the White House. Hillary and I and Governor and Mrs. Cuomo not very long ago. It's something I've treasured for a long time. I'm glad to see you and Lieutenant Governor Lundee and Attorney General Abrams and members of the Congress and members of both parties from the New York Assembly and the State Senate. The people here who are here to cause you are Americans, Republicans, Democrats, independents. I'm glad to see you all here in this monument to America's possibility. I wanted to come here for a thousand reasons, some of which are obvious. During the New York primary, which was a successful conclusion but rather rough and its fragile availability, I was absolutely enthralled by a book about President Roosevelt called The First Class Temperament by a man named Jeffrey. The thing that moved me most was the way President Roosevelt came to grips with the fact of his podium and learned to live with it and learned to triumph over it and learned to use it to make himself stronger inside and not to be defeated by it. And ever since I have been transformed from someone who had a mild interest in coming here to someone who had a burning passion to see this place, and I am honored to be here today. I want to say one more word if I might about Senator Moynihan because we've worked together over the years on a lot of things. I helped him to rewrite the welfare laws of our nation in the late 80s and what he said was the most significant social welfare reform in 30 years, if only we could implement it and one of the reasons I ran for president is to try to change the welfare system as we know it. I have watched him over more than two decades personally warn us about the decline of America's families, the development of the new and possibly permanent underclass in America, the importance of restoring the value of work to our social problems. But that came to go wanting about the breakup of what was then the Soviet Union and most people thought that he was speaking a foreign language. And I can tell you that with leadership like this, we can solve the problems this country faces today. I think of that because it's away from here when we landed in the airplane and all along the way, there were people, school children, hundreds of them flying away with their signs and young people at Marist College having a 40-50 anyway. The first fifth, one sign said, I want to give something to my country, another said. One, I might have to give a trip to the doctor and say I want her to pay more taxes, I couldn't believe that. One sign said, shake them up. One sign said, give Bill the chance. One said, turn my country around. Another said, I've got it ready to change. Another said, just do something. Country's all about to. I couldn't believe the number of people who were there. And I say that because as much as anything else, I think our country now is infused with a new sense of possibility. One of the things it really used to depress me as I crossed America last year was the look I saw in so many people's eyes of skepticism that almost a painful unwillingness to believe that we can make things better, that we can change, that we can come to grips with the challenges of our time and overcome them and move forward. And one of the things that I think perhaps the most important thing that was achieved in the last election year was we had a huge increase in turnout, an even bigger increase among younger people. And now every day, the White House switchboard and the mailroom are fuller than they have been in decades and decades because people believe that this country has been kept going through two centuries now because of the peculiar mix of the energy of its people at the grassroots level and the vision of its leaders. But if you have one without the other, the country can't go forward. There have been times in the past when leaders have foreseen the future and know what needed to be done, but there was no connection with the people and so nothing could happen. There have been many times, I'm convinced, when the people have been ahead of their leaders, but if they have no visionary leaders, nobody could put all that energy together with the levers of public authority, nothing happened. We all hope, I think, from whatever perspective we come, that we now have a moment in our history where we have the energy of the people in a direction we can take. I ran for president because I believe this was a critical moment in our country's history. And there have been many over the last two centuries. I think of the founding fathers who actually welded a nation out of 13 independent colonies when many people, maybe if you'd even taken a poll a majority of the people would have said, who wants one army? Who wants one currency? Who wants to really give up all this independence we have in New York or South Carolina? What do we have in common with those people down there? I think of Thomas Jefferson. Some people thought he was crazy when he pointed up $15 million to buy something then called the Louisiana Purchase, which most Americans could not even imagine than hardly anyone had ever seen and if he hadn't done it since I live on the edge of my head, you'd be listening to somebody from somewhere else give this piece of that. I think of Abraham Lincoln. We now take it for granted that the Union would be preserved and that the slaves would be freed and all this would happen. The truth is that a great many people thought there was no way to hold this nation together. And a great deal of what did it was his vision and his sheer will. I think of President Roosevelt in the depths of the Depression having gone through his personal journey to cope with his personal problems summoning interior strength and reserve to live the nation's vision to make people believe again that by taking one step at a time by coming and building a beautiful school like this with the WPA that if you did enough things like this and you just kept trying long enough sooner or later we wouldn't go forward. We would work our way out of it by what he called then bold, persistent experimentation. Today, I think we need that kind of experimentation based on the plain evidence that we are in a rut. What we have been doing is not working to deal with the problems we face. For about two decades through administrations of both presidents we have been steadily, both parties presidents we've been steadily moving into a global economy which is much more competitive where other countries have been growing more rapidly than we and moving toward our standard of living where we have to compete in all forms of economic life in ways that can force us to endure real pain as you folks in this part of the country have seen recently with the difficulties that a magnificent company, IBM has been forced to come to grips with. This is not an isolated event this is part of the passage of time in the economic realities in which we live. That global economy abroad has presented us with a lot of challenges and a lot of opportunities here but our ability to deal with it has been limited by a lot of the educational and training and social problems we have here at home. Our racial and ethnic and income diversity the high rates of violence and the whole pockets of poverty we have in this country and lack of investment. We've seen that a lot of things that are just not quite fitting very well and now we've had two decades in which the wages of most Americans have been stagnant compared to inflation and we look at the rising cost of education, healthcare working hard for that income that is less because of these sweeping trends. For 12 years we have tried a clear approach to our country's problems. When President Reagan was elected in 1980 he ran with a clear sense of what he wished to do. He said the government is the problem here it causes inflation it causes middle class people to have trouble what we need is a very restricted role for a government and we will also lower taxes on everybody but most of all on the wealthiest Americans because if we give them their money back they will invest it in America, create jobs drive up incomes, increase jobs and we will be the most prosperous country in the world. Well, I believe that free enterprise is the engine of growth in America. We are fundamentally a conservative, private, capitalist free enterprise country. Every other nation with which we compete decided to take a slightly different course. I said to themselves in Germany and Japan well we're in a global economy in which the government and the people in the private sector have to work together we've got to work together to train and educate our people as well as possible we've got to work together to have policies that encourage investment over consumption so we can always be competitive we've got to have good trade policy and we've got to do things that make it possible to create high wage, high growth jobs so that all the students who go to school here will have a future and so that America will be strong what we have done is to try for 12 years to cramp the role of government now look what's happened in practice in practice we have lower taxes on the wealthiest Americans taxes on the middle class have actually gone up in the last 12 years we have run a horrendous government deficit the deficit is now four times as big as it was in 1980 we have seen spending go up in areas that the government would have to move to control mostly health care and then interest on the debt because when the deficit gets bigger and bigger you spend more money on the debt so we have reduced investment, increased the debt moved money upward so that there's been much more inequality of income distribution but we have not seen the kind of investment that creates high wage, high growth jobs in the emerging technologies that guarantee a future for all the young people that live here and throughout our land so I ran for president because I really believe we ought to try a different course not to blame past presidents if you look at what's happened in Washington none of it could have happened if there hadn't been bipartisan support for the course and support in Congress as well as in the White House this is not about blaming I want to simply take responsibility as I told Congress the other night if we turn this country around I don't care who gets the credit for it either I just think the time has come to make a change we have tried one thing 12 years it obviously has problems it is time to change change for change, what does it mean? it means to me that we should do the following things first of all the government should pursue a policy of increasing investment in those things which contribute to a growing economy what are those things? we should invest more than we are now and more toward what our competitors do in the infrastructure of the country and transportation and communications and environmental cleanup in those things which increase productivity and put people to work it means we should do whatever it takes to educate people for a lifetime at very high levels because the skill level of the workforce is the single most important determinant of income and the capacity to grow new jobs rapidly as new areas of opportunity open up it means that we should invest in partnerships with the private sector which will determine the future of the country and it means we should not give up on those areas where we have a lead let me just give you two examples one is in computer technology and information technology that's why what's happening some of our big companies try to revitalize this whole sector of our economy I'll give you another example which doesn't affect New York much but it affects our country desperately because aerospace, Boeing just announced 23,000 layoffs when we know that aerospace jobs are growing worldwide high wage jobs and we sat here for 10 years and let Europe put 26 billion dollars into an Airbus program direct government subsidies to throw Boeing workers, McDonald's workers and other aerospace workers in America out of work because we said we don't practice those kind of partnerships so we have got to face the fact that the debt gets bigger and bigger and bigger two bad things happen bad thing number one is that Congress spends more of your tax money every year paying interest on the debt than investing in your future it's now up to 15 cents on the dollar if we do not change present spending patterns when you hear people oppose the program I outlined ask them what the cost of the status quo is four years like we have for the last deficit will be 650 billion dollars a year we'll be spending about 22 cents of every one of your tax dollars just paying interest on the debt we'll be spending by then because of the growth of healthcare costs about 65 cents of your tax dollars on entitlements and being in Congress will be a matter of how you spend 5 or 6 cents on every dollar the rest of it will just be rubber stamped you can just have a computer instead of Congress I know what you're thinking good job forgive me Senator but you get it it's squeezing the life out of the money you're giving up in taxes second reason even more important is the more money the government borrows every year the less money there is for people to borrow in the private sector and the higher the cost the money is just since the election since we made it clear that there was going to be a determined effort to lower the deficit interest rates long term have dropped considerably I'll come back to this in a moment but if you think about it this year if we pass this budget we'll borrow us long term to finance a business to finance a car, to finance a home to finance credit card purchases everybody that has access to variable interest rates will have those interest rates go down and in my judgment virtually everybody who has credit will pay in higher taxes and that's the area is to cut inessential government spending I've been president for weeks I've been president for weeks and I've found things that I wouldn't believe the White House when I became president was running on Jimmy Carter's telephone system and Lyndon Johnson's switchboard and this high high-wage, this high technology era with a procurement system that would have broken Einstein's brain Einstein's brain needs to be changed in the federal government there still are but in four weeks we have cut the White House staff by 25% starting the beginning of the next fiscal year and reorganized the White House so it will work more efficiently not just cut but serve better we have in this budget administrative cuts in every government department totally 14% over the next four years their savings is $9 billion and there have been 150 specific cuts in government programs including programs that help a lot of good people but I don't think we can afford at the present level anymore programs like the two uranium enrichment facilities we have when we now know we only need one and I was in one congressional district what are those two facilities are this morning these are you can say these cuts are not difficult but when you look into the eyes of people who may be personally affected by them they are including reductions in the interest subsidies to the rural electrification authority something that brought electricity to my relevance in my state which is still a very major force things that have some good in them but we simply can't afford them we cut things out that have no good purpose anymore a whole slew of commissions you remember when we had the tall ships coming to New York Harbor from the Bicentennial remember that's a long time ago remember that there's still a Bicentennial commission one example it's the funniest but not the most costly there are a lot of others involves subsidizing activities more than we should the super fund for example has in my judgment too much contribution from the taxpayer too little from those who are responsible for the problem and none of the money is being spent right so far as I want people it's a subsidy to sheep growers in July by a senator one and a half by a New York still race sheep we had sheep on the farm when I was a boy so I'm more sensitive to this in some way but when I got to studying this we started a subsidy to sheep growers in World War I because we needed plenty of wool for uniforms but the program is still on the close exactly as it was exactly not designed to help the small farmers stay in business necessarily but across the board subsidy of that kind so I recommended not to get back all these things have constituencies and prove that we can cut things that when Roosevelt talked about bold and persistent experimentation you know what an experiment is in science it is trying out a new thesis if it works you incorporate it you build on it you go on to the next experiment if it doesn't work you quit government has a one way experiment we're very good at starting things and absolutely terrible at stopping them so what we're going to try to do is start some new things I want a fully fun head start I want to be a new national service teachers we have to stop doing some things we used to do to free up for some money for things we should do and we have to cut more in the past then we're going to spend in the future because we have to use some of that money to reduce the deficit too so I asked you to support that now in four weeks we found 150 specific cuts as I said in the congress the other night in all good conscience to both the republicans and the democrats I've just been there for a week some of them have been there a lot longer than I have and if anybody's got any other ideas I'd like to have them I just got started I want more and more I also think that we have to raise some more money I now believe what I said might be true in the campaign but I didn't think it was that we have to raise it from a broader base than just people that make over $100,000 and I want to deal with that in the election in December the government increased its estimates of our deficit by about $15 billion a year over the next four years now if I had stayed with exactly the same plan that I recommended in the campaign the first thing my critics are now typing for raising taxes would say is always going to increase the deficit always being too optimistic and I decided that when they revised the deficit figures up one more time $50 billion a year that somebody had to take this thing and shake it up and say we are definitely going to have a plan of spending cuts, new investments and relative increases in this debt then and I plead guilty to doing that and I think almost any of you if you had been in my circumstance would have done the same thing if you were thinking about what was in the long term best interest of the country and you can see it by how much interest rates have come down just since the election people who control these things desperately want to believe that our government can exercise some discipline again that we can have some focus that we can show some restraint and activity now the taxes that I propose to raise let me just basically go through them essentially three there are more minor ones but the big ticket items are as follows number one an increase in the income tax on the top 1.2% of income perverse an increase in the corporate income tax on corporations that have income in excess of $10 million a year number two an increase in the income subject to taxation of people who draw social security but also have other income in excess of $32,000 a year if there are couples or individuals in excess of $25,000 a year there otherwise anyone who's not paying tax on social security now will not pay tax under my plan that's 80% of social security recipients the upper 20% will be asked to pay taxes on a higher percentage of their income but we will still leave that income free so that almost all of them will get back into the social security system plus interest without taxing the rest will be subject to the income tax I think that is