 I've just returned from Venice, Italy, where I've met with the leaders of the other six industrialized democracies for our yearly economic summit. You've been hearing and reading reports that nothing was really accomplished at the summit, and the United States in particular came home empty-headed. Well, this was my seventh summit, and the seventh time I've heard that same chorus. You know, it might be appropriate, a noted bullfighter wrote a poem, a few lines of which do seem appropriate. The bullfight critics ranked in rows fill the enormous plaza full, but only one is there who really knows, and he's the one who fights the bull. The truth is, we came home from this summit with everything we'd hoped to accomplish. And tonight I want to report to you on decisions made there that directly affect you and your children's economic future. I also have a special message, one that's about our own economy, about actions that could jeopardize the kind of progress we made toward economic health last week in Venice, as well as the prosperity that during the last six years, all of us here in America have worked so hard to achieve. But before beginning, I must make a personal note about something we saw on the last day of our journey, when we stopped in Berlin to help celebrate the 750th anniversary of that noble city. I know that over the years, many of you have seen the pictures and news clips of the wall that divides Berlin, but believe me, no American who sees firsthand the concrete and mortar, the guard posts, and machine gun towers, the dog runs, and the barbed wire can ever again take for granted his or her freedom or the precious gift that is America. That gift of freedom is actually the birthright of all humanity, and that's why, as I stood there, I urged the Soviet leader, Mr. Gorbachev, to send a new signal of openness to the world by tearing down that wall. Now I can tell you tonight that this year's economic summit in Venice was not only successful on a number of specific issues, but that the spirit of consensus shown by world leaders there was particularly strong. I'm sure you remember that back in 1981, the year I attended my first summit, our own economy as well as the global economy was then in grave danger. We had inflation running at 10 percent or more in industrialized countries, not to mention high interest rates, excessive tax burdens, and too much government regulation and interference. Worse than all of this, there was virtually no agreement among world leaders on how to deal with this looming crisis. Well, in the intervening years, we've made progress. With the American economy leading the way, we started an international movement toward more economic growth and greater individual opportunity by lowering taxes and cutting government regulation. We brought down interest rates, cut inflation, reduced unemployment, and confounded the experts by showing that economic growth could be sustained not just for one or two years, but steadily for more than four years. And last week in Venice, I saw overwhelming evidence that this consensus for less government and more personal freedom continues to grow throughout the world. Indeed, part of our official discussions were about how to encourage economic development in the less affluent nations of the world and help the millions of people in developing nations achieve higher standards of living and more productive economies. And let's remember that this international movement toward economic freedom has made a very real difference in the daily lives of each of us here in America. All of us can remember only a few years ago when government taxation was consuming more and more of the take-home pay of American workers at the very moment that double-digit inflation was eating up savings and becoming a special burden on the poor and the elderly. Today in contrast, we are now in our 54th month of economic growth. Real family income is growing while poverty has been declining, and we've been creating an astonishing 250,000 new jobs a month in this nation. It adds up to over 13 million jobs in a little over four years. Obviously, keeping this kind of progress going on at home was very much on my mind in Venice, and that's why I was pleased with many of the decisions we made there. In addition to reaffirming the broad consensus for economic growth, we agreed to continue working against trade barriers like high tariffs that over the long run shrink world markets, stop growth, and reduce the number of new jobs. In the area of agricultural subsidies as well, we made significant progress. You know, I've been saying for some while now it's time to get speculators who merely want to take advantage of government subsidies out of the agricultural business and give farming back to the farmers. I think it's notable that so many American farmers today would like to see agriculture in the United States and abroad return to the free market basis. They know government subsidies in other countries are causing a worldwide glut of farm products and a shrinking market for American goods. Our aim should be to eliminate farm subsidies by the year 2000, and I will continue to press for this commitment. But it was a real step forward to get this issue on the summit agenda, and I think the fact our urgings were heeded indicates the kind of responsiveness our summit partner showed towards American concerns. They know how much we rely on each other, and they're aware of how much their own future depends on what we do here in the United States. How important keeping America economically sound and strong is to them. They know too that the economic progress we've made together has enabled the democracies to rebuild their defenses, keep peace in the world, and strengthen our alliances. I was particularly gratified, for example, for the support our allies gave to our Persian Gulf policy. It was extended without hesitation. Our allies know the strategic value of this area and are hard at work there for the same purposes as our own. In fact, Great Britain has committed a higher proportion of its fleet to the Gulf than we have, and since January has provided protection to over 100 U.K. flag vessels. France too has committed naval strength to the Gulf. Germany and Japan, while they can't constitutionally deploy military forces, are also working actively to seek other ways to be helpful. Our own role in the Gulf is vital. It is to protect our interests and to help our friends in the region protect theirs. Our immediate task in the Gulf is clear and should not be exaggerated. It is to escort U.S. flag vessels, a traditional role for the Navy and one which it has carried out in the Gulf as well as in other areas. Most recently there's been some controversy about 11 new U.S. flag vessels that have been added to our merchant fleet. Let there be no misunderstanding. We will accept our responsibility for these vessels in the face of threats by Iran or anyone else. If we fail to do so simply because these ships previously flew the flag of another country Kuwait, we would abdicate our role as a naval power and we would open opportunities for the Soviets to move into this choke point of the free world's oil flow. In a word, if we don't do the job, the Soviets will and that will jeopardize our own national security as well as our allies. Our current dealings with the Soviet Union were also discussed in Venice and I think every American can be gratified by the sense of unity and support our allies expressed. As most of you know, we are currently engaged in highly sensitive negotiations with the Soviets that could lead to an historic arms reduction treaty on intermediate-range missiles or, as we say, INF. This matter was also discussed last week with the NATO foreign ministers in Iceland. I have received Secretary Schulz's report on his NATO meeting and I'm pleased to tell you that we and our allies have reached full consensus on our negotiating position. Years ago, the United States proposed a step called the zero option, the complete elimination of U.S. and Soviet land-based longer-range INF missiles. At the time, many labeled it ridiculous and suggested the Soviets would never accept it. Well, we remain determined and this year the Soviets adopted a similar position. So tonight I can tell you that with the support of our allies the United States will also formally propose to the Soviet Union the global elimination of all U.S. and Soviet land-based shorter-range INF missiles along with the deep reductions in and we hope the ultimate elimination of longer-range INF missiles. I am now directing our INF negotiator to present this new proposal to the Soviet Union as an integral element of the INF Treaty, which the United States has already put forward in Geneva. And as we and our allies pursue this historic opportunity, let's keep in mind the favorite word of a great lawmaker and great member of the Democratic Party, the late Senator Scoop Jackson. That word is bipartisanship. For it's only with the support of Congress as well as the help of our allies that we will be able to accomplish those historic arms reductions. There was also strong agreement in Venice on the importance of pressing the Soviet Union for progress on other important arms negotiations, such as our effort to cut 50 percent in strategic forces. So too we were agreed on the need for Soviet progress in the human rights area as well as regional conflicts, especially Afghanistan. And while we welcome the new expressions of openness from the Soviets, we said it's time to see if their actions are as forthcoming. But while I can report to you tonight that our work on these issues in Venice was productive, honesty compels me to tell you about one disturbing topic in our discussions there. And that was the continuing threat of deficit spending. Frankly, I have to tell you too that I felt among the other six summit leaders a sense of unease about America's commitment to a consistent, enforceable plan to reduce our deficits. In no sense was the concern voiced by these leaders intrusive or offensive. It's just that they realize how interdependent all of our economies are. And they know a weakened American economy is a threat to their continued growth. I share their concern. Don't mistake me. All of us who take pride in our economic achievements know the efforts we've made on deficit spending. In 1983 deficit spending was a full 6.3 percent of our gross national product. Today that figure stands at 3.9 percent, nearly a 40 percent decline in just four years. This year too our deficit is programmed to be cut by nearly $48 billion, a more than 20 percent reduction. This reduction itself is a result of much hard work. Hard work that took place when a few years ago under the prodding of many of us who were fighting for fiscal restraint, that Congress got together and adopted a plan called Graham Rudman Hollings that established a program for gradually reducing our deficits and eventually balancing the budget. So all of this is good news or at least it has been. You see in the critical matchup between those who want to keep spending your money and raising your taxes and those of us who resist a return to the old policies of tax and tax spend and spend, we have now reached break point. That's why I've made a personal decision to do something no president should ever hesitate to do when he must. And that's go to you, the American people, and put the facts before you. The congressional budget process supposedly overhauled in 1974 and again in 1985 isn't working. Months ago I sent the Congress a responsible budget that met this year's deficit targets while it provided for our national security needs, added funds for critical domestic concerns such as aides and air safety, and kept the appetite for federal spending under control. But instead of acting on it, Congress ignored that budget and is considering a plan that in terms of our gross national product sharply reduces defense spending over the next few years back to the dangerous levels of the late 1970s, a plan that also cripples our security assistance and economic cooperation efforts overseas. And what's happened to that restraint on wasteful domestic spending solemnly promised under Graham Rudman Hollings? It vanished, and to pay for this lapse of faith, you, the taxpayers, are going to be saddled with an approximately $100 billion bill over the next four years. If this trend isn't stopped and stopped now, we stand to lose all the progress on the economic front that we've made. If our budget reduction efforts are not consistent and credible, we will be sending signals all over the world that the American economy is in trouble again. So that's what the choice comes down to, more government, more taxation, more regulations, and a backsliding toward the old days of economic inflation and stagnation. Or on the other hand, additional growth, greater opportunity, adequate national security, and more for the family budget, not the federal budget. The choice is now up on each of us. As I've said, we've reached breakpoint, decision time. So here's what we need to do. First, together with the Congress, we must reform the budget process to stop all the delays and missed deadlines and broken commitments. We can start by getting the Congress to vote yes or no, up or down, on an amendment to the Constitution that will bring an end to deficit spending once and for all, an amendment that will mandate under the law a balanced budget. Second, I need your immediate help in pressing your representatives in the Congress to agree to a responsible deficit reduction package and to stay with it. I pledge to you I'll use my veto power to stop big spending bills which exceed the Graham-Rudman Hollings targets. But we need to go beyond that. You can be assured there are plenty in the Congress we can work with. And if you let them know how you feel, we can develop a budget consensus to hold spending down this year. Some are even talking about a budget summit. Well, we're ready to talk and consult at any time. But not if the objective is additional spending, more taxes, and less defense. What we want is less spending, period. And I think you do too. And third, there's something else I hope you'll ask for, the line item veto. The president should have what the governors of 43 states use to stop this sort of fiscal nonsense, what I had in California when I was governor there. The ability to reach into those huge expenditure bills and cut out the waste. It's time for action. And I urge the Congress to move ahead and come up with a package of reforms that will correct some of the glaring deficiencies of the current budget process. In the meantime, I'm going to be stepping up my own public commitment to this cause. I'm going to take the case to you, you American people, because believe me, if some in Congress won't see the light, I know you can make them feel the heat. In all of this, the stakes are high. Nothing less than our economic future is at stake. So tonight I ask your support. I ask your support because I think Americans are increasingly aware that our constitutionally guaranteed right to vote, to assemble, to engage in free speech, and all the other forms of political freedom have their equally important economic counterparts. The right not to be too heavily burdened by big government, by excessive taxes, by skyrocketing inflation, and high interest rates. The right to a future where you and your children can go just as far and reach just as high as your individual talents and energies will take you. A future rich in freedom, in opportunity, in growth. An economic bill of rights. I will be outlining the specifics in the next few weeks. So let's keep moving forward. All those important developments abroad that I mentioned earlier, the new strength of the democratic allies in the world, strength that will make your future and mine and that of our children a safe and a free one, will be jeopardized unless together we can act responsibly here at home. For that I need your help. Over the weeks and months ahead, let us work to keep America economically strong so she can remain as ever a champion of peace and world freedom. Good night and God bless you.