 the President of the United States. Thank you very much. Thank you. Please, you'll spoil me. Well, thank you all very much. I'm delighted to welcome President Ted Strickland and all the officers and leadership of the National Conference to the old Executive Office Building. You know, one of the things I like best about getting together with people from the states is the sense of diversity that it brings out the different regions, different accents, and well, would you be surprised if that reminded me of a story? A Bostonian visited San Antonio after native, what was that dilapidated looking ruin over there? And he said, that's the Alamo. Well, he said in that building, sir, 136 immortal Texans held off an army of 15,000 of Santa Ana's regulars for four days. Mmm, said the Bostonian. And who was that man on the horseback on that hill over there? And he said, well, that's a statue of Texas Ranger. He killed 46 Apaches in single-handed combat and broke up 27 riots in his lifetime. Where are you from, stranger? And he said, well, I'm from Boston. We have our heroes there, too. Paul Revere, for instance. Texans know it. He said, Paul Revere, you mean you tried for help? But it's an honor to have this opportunity to speak to you who work at levels of government so close to the people themselves. In a moment, I'd like to discuss the domestic agenda for this, the remaining year of our administration. But if you'll permit me first, I'd like to stress something that we've been working on from the very first, federalism. The topic, Secretary Burnley, is just touched on as well. After all, it was with the intention of keeping government close to the people, that the founding fathers entrusted the state governments with duties like the protection of property rights and the enforcement of criminal justice, duties that affected the people in their everyday lives. And when Alexis de Tocqueville toured America during the last century, he found that it was the state governments with which the people were the most involved. Men, he wrote, are affected by the sovereignty of the Union only in connection with a few great interests, but state sovereignty enfolds every citizen and in one way or another affects every detail of daily life. Well, when our administration came to office, we took it as one of our chief aims to reawaken the federalist impulse and approach the Constitution with a new fidelity, in short to restore power to the states. By now, you should know how since 1981 we've worked to widen the scope for independent state decision making. I'm proud to say that our federalism focus is continuing. This past October, I issued an executive order requiring all departments and agencies to do a federalism assessment of all their policies to make sure they aren't doing things better left to the states. But despite all we've been doing to promote federalism here in Washington, our efforts take second place to the remarkable new initiatives that you're overseeing in the states. State governments are attracting venture capital, you're fostering international trade, many states have cut taxes, and more than half the states have set up their own enterprise zones even without federal incentives. These zones have created new jobs spurred billions of dollars in capital investment. In the words of columnist James J. Kilpatrick it becomes increasingly evident that the state governments as a group are governing more responsibly than the national government. The most interesting political activity these days is often not in the national capital but in the state capitals. When I happen to think that's just what the founding fathers had in mind. So congratulations to you all. And as I now turn to our domestic agenda I believe you'll see that here too the states have their role to play. The first item I'd like to mention is one that seems to have made quite an impression during my State of the Union address this past Monday, the urgent need for budget reform. You may remember that I placed on a table for everyone in the nation to see all 43 pounds of the continuing resolution, the accompanying conference reports and the reconciliation bill as if anybody needed any more evidence that the budget process here is completely broken down. And when I say that producing that huge pile of docs documents made an impression I mean literally. You see when I bang down one of those stacks of paper if I remember correctly it was the one weighing 15 pounds when I banged that document down I got my finger stuck underneath. And here it is four days later and I'm still sore but not as sore as I am when I consider the budget process we've had to go through year after year here. This coming year I intend to use all my powers as president to enforce some simple discipline upon the federal budget in a word discipline. That's what is missing from the federal budget process. In 30 days I will return to Congress certain items that should be rescinded. Sure it will improve our deficit targets but also it will be a first sign of discipline in a process that's out of control. But we need other measures to reform the budget process permanently. And here I take a page from the states. The great majority of your state constitutions requires balanced budgets. I'd submit that it's about time we passed a balanced budget amendment for the federal government. As you can see in the House's no fewer than 43 governors have the line item veto. I had it back in Sacramento myself. The line item veto is a proper and prudent tool of government. An instrument that gives the executive the ability to reach into the massive appropriations bills and pare away the waste. It's time we gave that power to all future presidents. As we push for these measures this time. Next the subject that really belongs to the state's education. You know the story how from 1960 to 1980 overall spending on education more than doubled. While college board scores during the same period fell drastically. We've worked hard to put education at the top of the nation's agenda. And to make certain that we concern ourselves not only with what we spend it. This response has been dramatic. Many states form task forces on education. In some states promising new programs like merit pay for teachers are being put in place. Still other states have opened the teaching profession to a wider pool of qualified candidates. And in recent years we've seen college board scores actually go up for the first time in nearly 20 years. This year at the federal level we're doing still more to promote imaginative reforms. We're adding money to the budget for the magnet schools program. An idea that has already done much to foster greater achievement among our public schools. We're building greater accountability into our federal programming by tying funding to results. Secretary Bennett has proposed among other reforms a much stronger curriculum for our high schools. As Bill puts it his aim is to promote a national conversation on what works in education. I don't intend to stop here. Polls show that millions of Americans would like but do not have the ability of choosing the education program and institution that is best for their children. A voucher system at the state level would empower parents. I'll ask the Department of Education to develop model voucher legislation and make it available to the 50 states so that they can implement programs that promote choice in education. As we do all this here in Washington I encourage you in the states to do even more. Or as I said in my State of the Union address the most important thing we in Washington can do is reaffirm that control of our schools belongs to the states to local communities and most of all to parents and teachers. I'm going to turn now to an area of shared federal and state responsibility welfare. A sad truth is that our welfare programs state and federal alike too often have only made poverty harder to escape. In the fight against poverty we now know it's essential to have strong families. Families that teach children the skills and values they'll need to succeed in the wider world. Families that provide mothers and fathers with comfort, inspiration and a focus for their labors. Yet when we ask ourselves whether our welfare programs have encouraged family life and values we must answer far from it. Instead they've subjected poor families to a subtle but constant undermining force pulling them apart. Many of you already preside over important welfare innovations. Some of you shown us how child support enforcement can be improved. Others have launched innovative new programs which require welfare recipients to work or prepare for work. You in the states are attempting to meet what I believe must become the central criterion for all forms of public assistance. Not how much money we spend on welfare but how many Americans our programs make independent of welfare. This is what we should be doing at the end of each year not boasting about how many more people are on welfare that we're taking care of but how many people have we been able to remove from welfare and make independent and self sufficient. The 50 states present us with the opportunity to apply this criterion in endless ways, experimenting and testing in a manner from which all can profit. Our administration will give the states even more flexibility and encourage still greater reform. Our aim is simple. To replace today's poverty trap with a welfare system that fosters genuine economic opportunity. I'd like to turn now to a subject that's especially close to Nancy and me a drug free America. Nancy and so many others have worked tirelessly to change the nation's attitude toward drugs to replace what was too often an easy complacency with a hard and clear understanding of just how damaging drug abuse truly is. And one of my proudest moments in office came just a few weeks ago when I read that our most recent survey of the attitudes of high school students toward drug abuse. You see cocaine use is on the way down, while marijuana use is at the lowest point since the surveying began. We're making progress, real progress. The states of course have a critical role in amplifying the anti-drug measure. Efforts to reduce demand must occur at the state and local level. And they are. The recently enacted legislation in New Jersey and Missouri for example to provide swift and certain consequences for illegal drug use reinforced my deep belief that there is no need for a federal law to do what states can do better. So I ask you to join Nancy and me in carrying this one simple message to our young people say yes to life and when it comes to drugs just say no. Now it was my intention to focus today on our domestic agenda but one foreign policy issue has become so important in recent days and I want to share with you my thoughts. That issue of course is Central America. Our approach to the communist threat in Nicaragua has long been based on a simple principle. Diplomacy and pressure in support of freedom and democracy must go hand in hand. We've seen the success of this two-track approach elsewhere in the world. In Afghanistan for example freedom fighters have forced the Soviet Union to think seriously about a diplomatic solution to that brutal occupation. This same approach may be working today in Nicaragua although it's too early to tell if Daniel Ortega's promises will be matched by true efforts to permit genuine democracy. What is unmistakable is this. Democracy has a chance in Nicaragua because of one factor alone the pressure placed on the communist Sandinistas by the freedom fighters. I believe we owe it to ourselves and the people of Central America to explore fully diplomatic avenues towards solving the Nicaraguan conflict. We must ask ourselves however what will create the conditions for serious negotiations. If Congress cuts off aid to the freedom fighters next week there's little chance that the Sandinistas will bargain seriously. We cannot expect diplomacy to work abroad if here at home we lack the will to negotiate from a position of strength. So much depends upon this coming vote the progress of democracy in Latin America and our own security as a nation. I just have to believe that we owe it to the future to stand by the freedom fighters. Well having said that I thank you all once again for being here today and by the way I know that as fellow politicians your hearts start to quicken just a little bit the way mine does when we start to head into a campaign season. No two ways about it last year was not one of my favorites but that was when then and this is now an election year when the people will be heard from and to tell you the truth I'm starting to have some fun again. Well again I thank all of you for being here and for what you're doing and God bless you all.