 And the president of the United States, thank you very much. Thank you. Oh, thank you very much. I can't. I can't top that. Thank you. Well, thank you all very much and welcome to Washington. Roy Connie, it's good to see you again and great to be meeting with Alex newly elected state legislators. All the more so because I started out the state government myself. In fact, on the way over here, I was thinking back to my first campaign in California. Jack Warner of Warner Brothers, I'd been under contract for a number of years, heard that I was running for governor. I understood that he said, no, no, Jimmy Stewart for governor, Ronald Reagan for best friend. More than, more than once during that campaign, I was reminded of a remark also that was made by his older brother, Harry Warner. And that was back when talking pictures first started to come in in the 20s. And Harry Warner said, who the heck wants to hear actors talk? Actually, I don't think he said heck, but presidents aren't allowed the same license as studio executives. Well, it really is great to have you here. Whenever I'm talking to Alec, I feel like I'm among family and can let my hair down a little. Let me take a moment here to thank you, Roy, and all of you here at Alec for the warm letter of support that you sent me. I can tell you truthfully, you really made my day. I can't possibly thank you enough for the support that you've given this administration or for the tremendous work you're doing in your home states. And I want to congratulate you on your outstanding program of drafting model legislation, covering everything from tort reform to juvenile justice and to balanced budgets and to drugs. On that last issue, I just want to take a moment to tell you the profound effect that your efforts and the efforts of many concerned citizens like you are having. It wasn't so long ago, I remember that Nancy was speaking to a school class in Oakland, California, and a student asked a question. Little girls said, what should we do when someone offers us drugs? And Nancy answered, just say no. Well, during the campaign this fall, wherever we'd go, there'd be hundreds and hundreds of young people packing the rallies. And I would always take a moment at the beginning of my speech to tell them that I had a message from my roommate and that she'd asked me to deliver it to them. And the message was when it comes to drugs for yourself, for your family, your community and your country, just say no. Well, it was heartwarming because those young people would come to their feet and say along with me a big loud no and then begin chanting, just say no, just say no. And I found out since Nancy spoke to that school class in Oakland, more than 12,000 just say no clubs have sprung up in schools all across the country. Believe me, for those of us who had to think twice before even stepping onto a campus back in the 60s, well, we've come a long way, baby. But another change that would have been inconceivable just six years ago and almost impossible without the help of all of you in this room is the revolutionary new tax reform that is the law of the land. America now has the most modern tax code in the industrialized world, one that is pro-growth, pro-opportunity and pro-fairness, and it's designed to keep America expanding and prospering through the end of the century. One of the most important aspects of tax reform, however, isn't economic, but it's psychological. It's the complete discrediting of high marginal rates and a new consensus is formed that when it comes to taxes, flatter is better. Poor Karl Marx. You know, in the Communist Manifesto, he called for a heavy progressive or graduated income tax, and I'm quoting him, in order to destroy the middle class. Well, I'm sorry to disappoint you, Karl, but with the first phase of tax reform less than a month away, the prognosis for the great American middle class couldn't be better. When I signed the tax bill, I pointed out that when our founding fathers designed this government of and by and for the people, they never imagined the income tax as we've come to know it. As a matter of fact, back then in 1913, when it was being debated right here in Washington, one senator was literally laughed out of politics because in the debate, he stood up and said that if they passed this thing that they were talking about, it was conceivable that someday the government could even be taking as much as 10% of what a citizen earned. And that sounded so ridiculous in those days that, as I say, he was just ridiculed out of office. Well, they understood that private property, those founding fathers of ours, is one of the most important of civil rights, the most fundamental protection of the individual and the family against the excessive and always growing demands of the state. They knew that without economic liberty, political freedom may be no more than a shadow. In the last 20 years, we've witnessed an expansion and strengthening of many of our civil liberties, but our economic liberties have all too often been neglected and abused. The tax cuts of 1981 and this year's tax reform are the first important steps back to economic liberty, but there is much more to be done. We shouldn't forget that deficit spending represents a form of indirect taxation and all Americans pay for it with slower growth and often higher future taxes. It's become clearer every year when budget time rolls around that the budget process in Washington is completely broken down. Well, it's time we fix it. And the solution is the line item veto and the balanced budget amendment. And you don't balance a budget by laying heavier and heavier tax burdens on the American people. That doesn't balance the budget, it just sinks it. And there's only one way to balance the budget and that's spending restraint. And just like with tax reform, you and the state legislatures are going to have to carry a lot of water on the balanced budget amendment. And this time you've got an added advantage. Most of you operate within the constraints of a balanced budget every day. You know how it works, and you've seen how effective it can be in checking the automatic impulse of many legislators to spend more and more of the taxpayers' hard-earned money. Increasingly, the real action in this country is going to be coming from the states. The Christian Science Monitor put it this way, decentralization of power could be one of the most long-lasting effects of the Reagan presidency. I'd be very proud if that was so. And a recent statement by Governors Dick Thornburg and John Sununu put it like this, Washington has changed under the president, but an even bigger change is going on right now in the states, in the cities, in America's communities, and in America's neighborhoods. Well, so it is that yet another fundamental long-lasting and dramatic change has taken place. Power has stopped flowing to Washington and begun to flow back where it belongs to the states. This country is great, and our freedom is sure as long as we continue to have a federation of sovereign states and to those who over the last half-century in Washington have worked and worked trying to make the states administrative districts of the federal government. No way. That's no way to preserve what the founding fathers gave us. Well, if there is a revolution that is taking place here in Washington, it is that we have continued to try and limit the scope of the federal government. So now it's time for resources, initiatives, and public initiative to shift back to the states still more definitely, still more dramatically. In other words, to alter the balance of power permanently in favor of levels of government that are closer to the people. As you may go, the working group of the family recently reported to me. We're still studying the report, and we'll have much more to say about it later. But for the moment, I want to read you a passage from its opening section. It's some food for thought, so to speak. They say it's time to reaffirm some home truths that the commitment of love, loyalty, and hard work that parents make to their children is the bedrock of our society. A pro-family policy is one that would support those who make this commitment and not undermine and be hostile to them or send a message that we're neutral. Just common sense, I guess, much like tax reform or balanced budgets. But how far do we have to travel before our government policy really reflects this home truth? Now finally, let me just add a few words about the controversy concerning Iran, or haven't you heard about it? As I said in my radio speech last Saturday, there's no doubt mistakes were made, and I'll not be satisfied until all the facts are before the American people. That's what we've pledged to do, and we can be proud that the constitutional process is working. But let me say this. We cannot, and we will not, let this stop us from getting on with the business of governing. And you're right. There's too much yet to do, and the facts on the agenda are not completed. When it comes to completing our conservative revolution, I'll just quote an earlier American and say, we have not yet begun to fight. You might want to use this sometime. It's a story about Winston Churchill near the close of the Second World War. He was visited by a delegation from the Temperance League and chastised by one woman who said, Mr. Prime Minister, I've heard that if all the whiskey you have drunk once the war began were poured into this room, it would come all the way up to your waist. Churchill looked dolefully at the floor, then at his waist, and then up to the ceiling, and he said, ah, yes, madam, so much accomplished and so much more left to do. Well, thank you all again. God bless you all. Wonderful holiday, and thank you for coming.