 And you did that. Thank you. Thank you very much. And thank you, Ed Donnelly. It's a pleasure to be here today. It's particularly a pleasure on this, the Chamber's 75th anniversary. Isn't there anything around here that's older than I am? The Chamber was formed in 1912 at the suggestion of another President, William Howard Taft. I like Taft. And not just because of his role in starting the Chamber, Taft was the only President to serve on the Supreme Court. He was Chief Justice. He said that the Court was the peak of his career. After he'd been on the bench a while, he wrote, I don't remember that I was ever President. You know, there's something there I can identify with. In the 75 years that Taft, since Taft addressed that first meeting, the Chamber has worked to build a growing America filled with opportunity for all. In the last few years, as our administration has worked for that goal, you have been among our most effective supporters. You've been at our side as we pulled the American economy out of a stagnant swamp and gunned its engine to climb to the mountaintops. Under the leadership of Dick Lesher, you've stood shoulder to shoulder with us as we fought the big spenders and special interests. Together we beat back tax rates and then beat them back again with tax reform. And we wrestled down excessive regulation as well. We've eliminated 30,000 pages of regulations. We won these battles, but the real winners are the American people. Inflation and interest rates fell from record highs, interest to the lowest rate in a decade, inflation to the lowest in almost three decades. In the past decade, America has created more jobs than Europe and Japan combined. The American spirit of enterprise has soared as new businesses have created new jobs by the millions. And this year, a larger percentage of Americans has been at work than ever before in our history. Six years ago, our opponents predicted that our policies would bring on disaster. You'd think the actual results would have left them speechless. And they did, sort of. As I've said so many times before, I knew our policies were working when they stopped calling them Reaganomics. But with the big spenders, speechlessness never lasts long. Now they have new charges and battle cries. They say the middle class is disappearing. And not just the middle class, American manufacturing as well. Well, we aren't as productive as the rest of the world, they say. We're slipping behind the rest of the world, America's deindustrializing. Well, you've got to give them credit for trying, but it just so happens they're as off the mark this time as they were before. Declining middle class, the truth is just the opposite. What in 60% of the 13 million new jobs created during our recovery are in the high paying, managerial, professional, and technical occupations. Deindustrialization, since 1982, manufacturing productivity has shot ahead at the fastest pace in 20 years. Manufacturing output has soared almost 30%. And in the last four years, we have added more manufacturing jobs than either Europe or Japan. You know, when I look at all the bets our opponents have placed against us in the American economy in the last six years, I think about a fellow that was going to the races for three nights before he went. He dreamed about the number five. So you know, when he got to the track, he got a hold of that program and he turned right to the fifth race, and he looked down to the fifth number five horse in that race and found out his name was five by five. So he bet the bundle on him. The horse came in fifth. As one commentator has said, talk about the decline of the middle class and related charges is an exercise in statistical myth making designed to advance a political agenda. An agenda summed up in just one word, protectionism. Our critics say that a cause of all of these supposed ills is the trade deficit. The cause of that, they say, is unfair trading practices. Their solution is to build great dams across the international flow of commerce. Well, I say damming the flow of international commerce is the surest way to make our own economy stagnant. As America prepares for the 21st century, nothing is sureer than that our future depends on growing world trade. For more than a century, growing trade has meant more American jobs. Shrinking trade has meant fewer jobs. Today, an estimated 10 million U.S. jobs are tied to imports, exports, or both. Yes, we have a trade deficit that's too big, and part of the reason is unfair trading practices. But no, the way to solve that is not to lash out at our trading partners, and last week I think we showed the right way. We had an agreement with the Japanese government that concerned semiconductors. The objectives of that agreement were not being met. I didn't want to impose punitive tariffs on Japanese goods. I don't believe in tariffs or trade barriers or restrictions of any kind. I hope that before long we can lift these, and that this episode will be recorded as a small incident in the building of our relationship. But we'll do what is necessary to see that other nations live up to their obligations and trading agreements with us. Trade must be free. It must also be fair. You will know a tree by its fruit, and the fruit from this tree will not be just in the semiconductor trade, but in the entire relationship between our two countries. At the end of World War II, Japan and America began a major construction project to build a bridge across the Pacific, uniting our nations. Well, that bridge is supported by the pillars of a common dedication to freedom and democracy, broad economic relations, and a sharing of defense burdens. Now that bridge is almost completed, the United States and Japan have become true partners in the security of the Western Pacific, which is one of the pillars of our national security. Japan spends more on defense than all but seven nations of the world, and more than all but two non-nuclear nations. This partnership is not only vital to our national security. It's also what gives the political impetus to resolving our economic problems. That's the spirit in which I will engage in these issues with Prime Minister Nakasoni this week. In economic relations, we are Japan's largest trading partner, and they are our second largest. And trade figures tell only part of the story. A number of American companies dominate the Japanese markets in their products, but they do it from plants in Japan. Well, now Japan is catching up with us, moving its plants to the United States, closer to its American markets. Soon Japan will be exporting its American-built cars to Taiwan, and there's even talk of exporting to Japan itself. Yes, our economies are becoming as closely tied as New York's is to California's and Michigan's to Florida's, and that has meant jobs and a better standard of living on both sides of the Pacific. But we haven't finished work on that bridge I mentioned. In areas like semiconductors, supercomputers, auto parts, telecommunications, construction projects, and agricultural products, these problems remain. Japan's financial markets aren't yet as open to ours as ours is to outsiders. And the biggest losers in all this are Japan's consumers who pay, for example, 10 times the world price for their daily rice. Our semiconductor decision sends one message. It's time to get down to finishing work on the trade bridge that unites our countries. And the final answer to the trade problems between America and Japan is not more hamming and hawing, not more trade sanctions, not more voluntary restraint agreements, though these may be needed as steps along the way, and certainly not more unfulfilled agreements. The answer is genuinely fair and open markets on both sides of the Pacific and the sooner, the better. Free, fair, and growing trade, this is also our message to the world. It's why we've responded with enthusiasm to Prime Minister Mulroney's call for a U.S.-Canadian free trade agreement. It's why we sought to now have a new round of international trade negotiations. It's also why we're the first administration ever to initiate unfair trade practice cases, not just waiting for industries to come forward with complaints, which was the past practice. We've used the full range of tools available under the law to work for more open markets. I've found they're good tools that fit many different situations, both those that require firmness and those that need finesse. That's why some trade legislation now before Congress is dangerous. Legislation before the House of Representatives would make us use a steam roller against unfair practices every time, no matter whether the steam roller would open the trade doors or flatten the entire House. A particularly bad proposal would require retaliation against trading partners who have large trade surpluses with the United States. But it's better policy to allow for presidents, me or my successors, to have options for dealing with trade problems. It's more effective and we won't risk sending our economic relationship with a friendly country crashing into the sea because Congress put our policy on automatic pilot. But this is a simple fact. Eliminating trade barriers won't put an end to our trade deficit. For example, if every unfair trading practice in Japan were ended tomorrow, we would cut our trade deficit by only about 10 percent. If our trade deficit is to come down, more must be done and it is being done. A change in the dollar's value is part of it. And since the middle of last year, the actual volume of our exports has been on the rise, the broad economic policies of our trading partners is another part. We believe our partners should cut taxes and regulations as we have so they can create jobs and buy more as we have. Recently, the major industrial countries agreed in meetings in Paris and Washington to measures to improve world economic growth and reduce trade imbalances. We also agreed to cooperate to foster stability of exchange rates. In my meeting last week with Prime Minister Nakasone's envoy, Mr. Abe, I was pleased to note that Japan was beginning to take steps to implement the undertakings made in Paris and Washington. But the biggest responsibility for bringing down the trade deficit is here at home. It's like the story that fell out in the golf course found that his drive had ended up right in front of an ant nest. But he got out an iron and he took a swing. He didn't hit the ball, he hit the ant hill. Thousands of ants were thrown into the air. He took two more swipes at it and each time missed the ball and hit the ant hill. And a couple of the remaining ants, one looked at the other one and said, if we want to survive, we'd better get on the ball. In the last few months, I've talked about the importance of education, training, and better commercial use of our science if we're to get on the ball, become more competitive, and prepare America for the 21st century. But the most important way to get on the ball is to finish the work that we were sent here to do six years ago. And first on the list of unfinished business is to get control of federal spending. 80% of America's businesses report taxes on the personal tax form, the businesses of most chamber members do too. And most new jobs and technology come from those kinds of entrepreneurial businesses. Now, some in Congress want to reverse the course of the last few years and raise taxes on that job and technology-creating spirit of enterprise. Well, Congress should cut the federal budget and leave the family budget alone. Ever since the middle of the 70s when Congress shoved the president out of the way and took over the budget process almost entirely, deficits have been soaring. I just can't help thinking that a lot of people up on the Hill are talking about the trade imbalance because they don't want to talk about the spending imbalance. I mean deficit spending. Even as they cried about the trade deficit in the last few weeks, Congress passed two outrageous spending bills over my veto. The chamber worked hard to help us stop those bills. One project in one bill alone will eat up 14% of all the nation's new transit money. When that project is completed, its construction cost may equal $6 for each passenger's trip. We could actually save money by putting them all in taxicabs. Congress has a budget process that's out of control. Miss deadlines, Graham Rudman Hollings' targets that get ignored. Now they want a budget summit with the White House. Well, we've sent them a budget. If Congress doesn't like it, they should first produce one of their own as a basis for talking. But even then, under today's rules, if we sit down to talk, no agreement they make would be binding on them. Then Congress needs to change the way it does business on the budget. They need ways of ensuring that they will stick to budget decisions once they're made. No backdoor spending, no missed targets, no swearing off the bottle of spending only to take a nip the next morning. Lock away the bottle and then we can talk. Maybe with the budget summit they hope I'll bail them out. But if they want me to save them, there's one easy way to do it. Give me what 43 governors have, a line item veto. So you see, understand, then I could cut wasteful projects. We'll have the deficit coming down in no time. If some president abuses the use of that veto, the Congress has the power to override his veto. The truth is, they don't want to have to vote on some of those pure pork items when they're outstanding alone in the open and not buried and hidden in a budget bill. I know because as a governor, I vetoed some 900 of those in eight years. And in California, it takes a two-thirds vote of the legislature to pass the budget in the first place and send it back to me. And then it only takes a two-thirds vote to override my line item vetoes. And not one of the more than 900 in eight years was ever overridden. The same that voted two-thirds to put it in the budget wouldn't vote two-thirds to eliminate it all by itself. In just over a month, I'll be going to my seventh economic summit, this one in Venice, an ancient city that at one time was the trading capital of the world. Four decades ago, the United States joined with other nations and dedicated itself to building a more open world economy. And that dedication has brought us and the other major industrial nations the greatest prosperity in human history and the longest period of worldwide peace in this century. Now it's time to look forward and ask, what will the next 40 years bring? Can we finish building the bridges of international commerce so that 40 years from now there would be no barriers dividing trade among our nations? Can we find a way to end once and for all the wild swings in exchange rates that have kept all who sail the oceans of international trade a little seasick over the last decade? Can we, the world's great industrial democracies, remain united against the enemies of freedom? I believe the answer is yes. We can do all of this. We can take the next step to building a world of opportunity and peace for all mankind. Let's join together in working to make that world a reality. Thank you. God bless you all.