 Ladies and gentlemen, the President of the United States. Thank you very much. Thank you all. It's an honor to speak to the Republican Governors Association, all the more so because I used to be a member myself. One of the aspects of these meetings that I used to enjoy most was the sense of diversity. The distance between our states, the different outlooks in our people, even the regional accents. Come to think of it, this sort of diversity reminds me of a story. You will discover when you get to be my age that quite a few things remind you of a story. Seems that a farmer from John Sununu's state of New Hampshire was visiting a rancher in Bill Clements state of Texas. And he was driving down the highway and there was a Texan driving in the highway and there was an accident and they collided. And the, well they got to talking then a little bit and the Texan took the, no real damage to the cars and the Texan took the New Hampshire out of and said if he needed a lift he'd give him a lift. He said, well let me show you a place down here. So they got in the car and he started and he drove and passed some longhorn cattle and then he showed him how high the corn grew and finally he ended up bragging about the size of the ranch itself. He said just imagine, you know, he says I can start in the morning and drive all day one side of my ranch and I never get to the other side. The New Hampshire eyes are, yep I got an old pickup truck just like that. I don't mean to tell jokes at the expense of the state of Texas, it's just that what happened when I flew to Dallas in July still has me a little annoyed. Air Force One landed at the airport, I got off the plane and a Texas Ranger asked to see my passport. But ladies and gentlemen it was good to see so many of you in the Oval Office this afternoon and I want to thank you again for inviting me to spend a few minutes with you this evening and I want you to know that I consider myself deeply indebted to each of you both for the wonderful work you're doing out in your estates and for all the help you've given to those of us working here in Washington. So thanks to your chairman, John Sinuno of New Hampshire, to your vice chairman Tom Kane of New Jersey, and to your immediate past chairman Dick Thornburg of Pennsylvania. To all of them I could say congratulations on a job well done. And to Lamar Alexander of Tennessee, immediate past chairman of the National Governors Association, you have everyone's gratitude for your leadership, especially on the NGAs. We announced Education Initiative. But if I could, but if I could tonight I'd like to take a moment or two to consider the theme taken up by this year's RGA Idea Book, the second stage of the revolution. Of course first we need to be as clear as we can about just what it is that's taken place in the first stage of the revolution. There are the many changes we've been able to affect in policy themselves tremendously important, changes like the lower tax rates and the more limited role of the federal government that have led to some 46 months now of economic growth and of the creation of more than 11 and a half million new jobs, and changes like the rebuilding of our national defenses and the firm reassertion of America's world role on behalf of human freedom. But beyond the policy itself, it seems to me that something still deeper and more lasting has taken place, a shift in expectations, a change in the very way the American people think about government itself. As one columnist put it, the key fact about all that has happened since our administration first took office is that we have completely altered the terms of what has been called the contemporary political conversion, conversation. Now this becomes clear in even a brief look at the record. When we started, for example, the idea of any major tax reform was considered outlandish, maverick. But today we're not only seeing our 1981 tax cut take effect, we've seen the passage of the most sweeping and dramatic tax reform in decades. A recent headline in the Washington Post told the story, the impossible became the inevitable. We consider aid to anti-communist insurgencies. When we took office, fashionable opinion in Washington still centered on the notion of containment or merely attempting to slow the Soviet advance, well the idea that we should actually offer help to those attempting to reverse that advance seemed outlandish, a deviation from established and comfortable patterns of thought. But today we see our country firmly on the side of freedom fighters in Afghanistan, Africa and Cambodia. El Salvador is safely in the freedom family. We first got here, everyone was talking as if it was Vietnam, get out of El Salvador and now there's a healthy democracy there. Grenada has been finally saved and yes, aid will soon go to the freedom fighters in Nicaragua. Of course I could go on discussing national policy, our strategic defense initiative in particular represents another dramatic change, a quantum leap if you will in the very way we think about defending our country. But I want to focus instead for a moment on all that this first stage of our revolution is meant to you and your states. From the first, our administration took the concept of federalism seriously. You couldn't put a governor back here in this job that he wouldn't take it seriously. That's the greatest strength and source of freedom in our nation, that we are a federation of sovereign states. For example, we reduced a large number of complicated programs involving the states into a much smaller number of block grants and that whittled down an awful lot of expensive federal overhead. We shifted certain programs from federal to state management and we instituted a new openness toward the states. This openness is especially visible in the contributions that so many of you have made to the studies we're now finishing on federalism, the American family, and low income assistance. Still more recently, of course, many of you have taken a strong lead in your states in the national crusade against drug abuse. Now, it's true that in the early days, many of you faced difficulties as we cut back federal financing of state affairs, and believe me, I know what you were going through because I've been there. But overall, these three and more years of economic expansion have put our states and cities alike in good economic shape. And in the large cities that demand special attention from so many of you, a recent study with the Urban Institute concluded that budgets are by and large in good condition. Now I wish I could say the same thing about Washington. Indeed, the study found as early as the end of 1982, the nation's cities were financially better off than they had been at any time during the 1970s. And as we've limited government here in Washington, you and the state houses have been taking the lead on matters that are important to your own people. In Indiana, we've seen merit pay for state employees. In North Carolina, we've seen the Year of the Child, a sweeping initiative to protect children from kidnapping, neglect, and other abuses. We've seen the Teacher Career Ladder in Tennessee, and New Jersey's Alternate Root for Teacher Training, a program that allows certain highly motivated college graduates to teach even if they haven't had the traditional training. We've seen job programs in Oregon, New Hampshire, Illinois, and elsewhere. And we've seen tax incentives used to promote economic growth in programs like Pennsylvania's Economic Revitalization Tax Credit. The Christian Science Monitor put it this way, decentralization of power could be one of the most long lasting effects of my presidency. Well, you were always ready and willing to go that route. It was just Washington for a long time that thought its main goal should be to try and make the states into administrative districts of the federal government. Then they ran into a bunch of governors that didn't agree. And a recent statement by Dick Thornberg and John Sununu put it like this, Washington has changed, but an even bigger change is going on right now in the states, in the cities, in America's communities, and neighborhoods. 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. Even though this change is already underway, most of stage one of our revolution has taken place here in Washington as we've continued to limit the scope of the federal government. Now it's time for resources, initiatives, and public attention 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. This is stage two of our revolution. And yes, this means setting aside liberal democratic governors fixed by choice and habit alike in their dependency upon Washington. Setting them aside for Republican governors, governors of energy, and new ideas. You know just last month I campaigned in Detroit for Bill Lucas, one of the most impressive men I've ever met. And as you know, our candidate for governor of Michigan. Later that day I campaigned in Omaha for Kay Orr, one of the five Republican women running for governor this year. And I couldn't help think that those two stops demonstrated perhaps more clearly than anything else ever could. Today it's the GOP that's the party of ideas, the party of the future, the party of opportunity for all. Now this year we have an historic chance to win back a majority of state houses for the first time since 1968. To carry the revolution more decisively out of Washington and into the country. And although the media seems to have a near fixation on the U.S. Senate, there can be no doubt that what happens in the state houses is of equally if not greater importance. Just the other day, Dick Worthlin, our pollster, made a remark that I believe sums it up. Changes in the states can endure longer than almost anything that happens in Washington. And he said, I'm playing this one for my grandchildren. And as he is for many of you, Dick Worthlin, is for me a sort of like that Stockbrookery's firm you've heard about on television. When he talks, I listen. But that's just what this year's state races come down to. Contests for the future. Contests that will help shape our life in America for our children and our children's children. So I pledge my full commitment. If there's anything at all we can do to help, just let us know. We're in the end. These state house races are about freedom. About whether or not freedom in America will be expanded by bringing government closer to the people. About whether or not we give to the people the freedom to dream, to dare, and the freedom to which they as Americans are so richly entitled. So my friends, it's on to stage two. Now for the benefit of those candidates for governor who are here in the audience and have not yet been governors, I'd like to tell you a little bit about what it's all like when you first step in there. I remember in California, I inherited from a Democratic governor a state that was in almost as bad a shape as the federal government was. And every day it seemed someone was standing in front of my desk saying they'd found a new problem. And this went on till I was getting a little harried. And then one day on the way to the office I had the radio on in the car and it was a disc jockey on. And out of a clear blue sky, he said, and I fell for him. He said every man should take unto himself a wife. Because sooner or later something is bound to happen that you can't blame on the governor. Well, thank you and thank you and God bless you all. And believe me, I'm looking forward to that majority of Republican governors because I know that I'll be a lot more comfortable back here. See, I'm outnumbered right now and I'd like it the other way around. Thanks again. Thank you, Mr. President. Hopes and our prayers go with you to recuVec.