 Ladies and gentlemen, let's give a huge New Jersey welcome to the architect of 59 months of economic expansion, the President of the United States, Ronald Reagan. Thank you. Thank you very much. Oh, please. Thank you. Thank you very much. Governor Cain and Chairman Bob Van Fossen, President Fred Westfall, and Tom, I know I wasn't a little big horn, but I was in the horse cavalry. Well, it's good to be in New Jersey in the summer set, and this is especially an appropriate time to come here. Two hundred years ago, this past summer, when the framers of our Constitution met in Philadelphia, it was William Patterson and his colleagues from New Jersey who fought for the principle of equal representation for each state in the new national legislature. Their New Jersey plan set the stage for the great compromise that is at the heart of our constitutional system. Without them, the United States Senate would be entirely different than it is today. So you're the ones responsible. In the months before the Constitutional Convention, James Madison described New Jersey as like a cask tapped at both ends because of tariffs in both New York and Pennsylvania. Things sure have changed. Today, New Jersey is a powerhouse of technological innovation and entrepreneurial energy, as you've been told already here today. Yes, you are a generator of the economic dynamism that has swept America in these last six and a half years. You've been in the forefront of the economic expansion that has led leaders of the other major industrial powers to shake their heads in wonder when they've spoken to me about what they call the American miracle. I'm going to say a few words about the national expansion, but I know everyone here would agree that New Jersey has had a special place in that expansion. And let me say here, that's thanks to the leadership of people of courage, of vision, of determination, people like Speaker Chuck Hardwick and Governor Tom Cain. This is shaping up to be a year of celebrations, the bicentennial of the Constitution, maybe even the end of the football strike. And in fewer than 30 days, America will have another celebration. Our economic expansion will go on the record books as America's all-time peace time champion. 59 months of peace and economic growth. This land of opportunity has never recorded a run like that before. And talk about world-class performances. To tell from the leading indicators, the champ's not even breathing hard. And I've always been partial to underdogs myself, and this expansion sure started out as one. Remember what so many of the experts who were allied with our critics said about our policies? Our tax cuts would set off inflation, interest rates would soar, oil prices would again shoot through the roof. In the crash that was certain to come, the poor would be hurt most and the middle class would vanish. All of those were things that were spoken over and over again. Well, these days when those same critics talk about the last six and a half years, they remind me of a joke among dissidents in the Soviet Union. This one begins with a question, what is a Soviet historian? And the answer, someone who can accurately predict the past. Today, I've seen firsthand what the expansion has meant here in New Jersey. This morning I was a guest at Somerset Technologies. I heard the story of businesses that were taking a beating when we entered office, futures of inflation, stagnation, rising tax and interest rates, and the drying up of investment capital as your governor has told you. It had all left the units that now make up this company that I visited on the ropes and out of wind, and then came the steadily dropping inflation and interest rates and the cut in tax rates. Today, the company is stronger than ever. It's expanding production, developing new products, and finding new markets, not just in the United States, but all around the world. Over these five years, the Somerset story has been repeated in hundreds of thousands of companies and communities all over America, and you know the results. After years of riding a plunging roller coaster, the American family has seen its income go on the rise again. Middle-income Americans whose real income stagnated in the 70s can once again look to the future with hope and confidence. These are dreaming great dreams again. And entrepreneurs, young and old, male and female, black and white, have been popping up like daisies all over the landscape to chase those dreams. And with them have come new companies, new technologies, and new opportunities for everyone. Yes, a new spirit of adventure, a new excitement, is in the American air. And with that in mind, I thought I'd have a little adventure of my own here and make a prediction. In December 1982, just as our tax cuts were about to take full effect, our country saw the biggest jump in new business incorporations on file. When our second round of tax cuts took full effect next year, I predict that we'll see the start of a new surge of economic growth. Now, you may have heard talk about our expansion being uneven, leaving out some sectors, particularly manufacturing and some groups. For example, poor blacks, the facts are just the opposite. American manufacturing has remained just under a quarter of gross national product throughout the expansion. For a year now, our manufacturing output has been rising steadily, and this growth is export-led. As the dollar has dropped on the world markets, America's total manufacturing output has come roaring back more efficient than ever, and reflecting a new passion for quality. With just one area, remember how American companies couldn't compete in steel anymore? Well, just two weeks ago, Business Week reported that the steel industry is coming back strong, and that U.S. steel makers are now among the world's most productive. The headline said it all, cancel the funeral it read. Steel is on the mend. Well, change in currency values have obscured our new vitality. But look beyond those changes to what's really happening, and you'll see that once again, many of the world's most competitive products wear with pride the label that reads, Made in the USA. Now let me touch on that other charge, that the recovery has passed blacks and the poor by. This one kind of touches my temperature control because it's so off the wall. In the last five years, black employment has shot forward twice as fast as white employment. Since 1982, the real income of black families, the real income, has grown almost 40 percent faster than white income, and the share of black families in the highest brackets is up by over 70 percent. This August, the percentage of blacks employed was the highest on record, as was the percentage of whites. One authority on economic terms is written of this record. On every front, jobs, income, even household wealth. This 1981 through 1986 has been the best five years in black history. Granted, they've had further to go, but now they're making up for it, and blacks are by no means the only group. Hispanics, for example, have found two million jobs. Overall, we've reversed the rise in the poverty rate that began under my predecessor. As opportunity has risen, poverty has fallen. We still have a distance to go, but we're on the right track. This, there can be no doubt. The way to lick poverty in America is with a hand up, not a hand out. While I'm talking about poverty, let me say how pleased I am with the cooperation between our folks in Washington and yours in Trenton to implement the governor's welfare reform initiatives. On October 1st, we granted the waivers, and now you are going forward. The New Jersey reforms could prove among the most far-reaching and significant ever in helping those on welfare get off and become productive citizens, and that's what your governor has done. I've proposed legislation to allow states even more room to experiment, and I hope Congress will pass it. In the meantime, let me say to Governor King, we stand behind the imaginative and innovative reach program. As I was saying, our record expansion has been for all Americans. Since it began, we've created more than 13 and a half million new jobs, a half a million as he told you right here in New Jersey. This is more jobs than Europe and Japan together have created in the last 10 years. In September, unemployment fell to the lowest level in this decade, and a greater proportion of Americans have been at work this year than ever before in the history of the United States. I think great many people don't understand how some of these figures are what they're based on. The potential employment pool in America is everyone, male and female, from age 16 up. It includes all the retired people, includes, as I say, kids in school and so forth, but that is supposed to be the potential pool against which we match our employment record. Well, more than 62% of that age group is presently employed. That has never before happened in our country. But this isn't the time to sit back. I remember as a young man the good years of the 20s and then the crash of 29 and the depression. It could happen again. If Congress passes protectionist legislation, if Congress doesn't put a break, a real break on its runaway spending and raise taxes, this extraordinary expansion could be brought to a tragic collapse. With more than 10 million American jobs, many of them here in New Jersey tied to imports, exports, or both, protectionism is economic suicide. It's just this simple. Since George Washington was first sworn into the present in periods when our international trade has grown, the number of jobs have grown. When international trade has dropped, the number of jobs has dropped. This region has seen firsthand the costs of protection. In January, a certain state across the Hudson put an end to some domestic trade barriers. They let in milk from New Jersey. And the average price of a gallon of milk on the lower east side of New York City dropped by 40 cents. That was just one product traded, not between two nations, but two states. Put that on a world scale and you see how much protectionism costs America's families. It's just this simple. America needs more trade, not less. The framework for a free trade agreement concluded just recently with Canada points the way to the future and the world's future. By the year 2000, the barriers to trade between the globe's two largest trading partners will, for the most part, vanish. If passed as prologue, we know what the results will be. Almost 200 years ago, trade barriers vanished in the United States part of this continent after the new constitution took effect. Almost immediately, a stagnant national economy began to boom. The U.S.-Canada Free Trade Agreement is a new economic constitution for North America. It will, I believe, inaugurate a similar continent-wide economic expansion. This is our policy not only to Canada, but to the world. We're ready to go as far as our trading partners are on one condition. We want trade that is free and trade that is fair. But all the trade in the world won't help us if we don't first get our own house in order. Congress is trying to force me to pick between more taxes or less defense. Well, it ain't going to work. I have a duty to the Constitution to protect our nation from foreign adversaries. I have a duty to America's families to protect this expansion. Our opponents say they're against deficits, but they want to end the deficit by raising your taxes. I want to end it by cutting their spending. That's not going to be easy. Few Americans realize it, but a little more than a decade ago, our government had a major shift in the checks and balances of budget-making power. The president's relative role was diminished and the Congress enhanced. Before that, federal debt with inflation taken out had been steady or declining for a quarter of a century. Since then, it's been in a climb. And this is why I've said it's time for the president to have the same tool that Tom Cain has had to help bring taxes down and growth up, a line item veto. And it's why I've said we need for the United States the same requirement to balance the budget that the people of New Jersey have put on their state government. Now an amendment enters the Constitution when three-fourths of the states approve it, but first someone has to draft common language to consider. Under the Constitution, Congress can do that, or the states themselves can convene a meeting. It takes 34 states to do that. 32 have already asked for one to draw up a balanced budget amendment. Now, of course, I'd prefer Congress to do the drafting. It would be quicker. It would be easier. But one way or another, we owe it to our children to see that before the decade is out, the Constitution of the United States of America includes a balanced budget amendment. The first man to ask for that was Thomas Jefferson, who at the time of ratification of the Constitution said it has one glaring omission. It does not have a clause prohibiting the federal government from borrowing. Well, over the last several years, we've traveled a long way together. There hasn't always been an easy journey. There have been some trouble spots, but together we've moved ahead. The economic gains that have been made are a sign of our determination to stay with a consistent plan of progress. But as I said in July, as we unveil the Economic Bill of Rights, America is at a crossroads. The choices are between those who would return for the days of government knows best or continue on our path of sustained economic growth and opportunity. These decisions will be made over the next few weeks and months. The results will chart the course this nation will follow into the 21st century. There's another crossroads in this country and that is the debate underway in the United States Senate on the confirmation of judges to our nation's highest courts. Washington Post columnist David Broder recently wrote of all this. Now quote, I have seen enough politics in my time to have lost my squeamishness, but watching these tactics applied to judges is scary. He concludes it would send shivers down the spine of anyone who understands the role of the judiciary in this society. Well, I agree, and so does Judge Bork. When I nominated Judge Robert Bork to the United States Supreme Court last July, I thought the confirmation process would go forward in a statesmanlike manner with a calm and sensible exchange of views. That hasn't been the case. These hearings have been marred by distortions and innuendos. Judge Bork and I agree that there are no illusions about the outcome of the vote in the Senate, but we also agree a crucial principle is at stake. The principle is the process that is used to determine the fitness of those men and women selected to serve on our courts, and the ultimate decision will impact on each of us and each of our children if we don't undo what has already been done and see that that kind of performance is never repeated. Well, I've come to the end of my time here. Last people I spoke to here in your state, a little while ago I couldn't help but concluding with revealing that I have a new hobby, and it is collecting stories that I can prove and establish are told by the citizens of the Soviet Union among themselves, which reveal their great sense of humor, but also their cynicism about some elements of that system. I told one there and I'll tell another one here. Thing is, the question is asked in school, how do you tell a communist? Well, it's someone who reads Marx and Lenin. And how do you tell an anti-communist? It's someone who understands Marx and Lenin. Thank you all. God bless you all. Mr. President, on behalf of the New Jersey State Chamber of Commerce, I'd like to thank you for joining us here today. We think that after 59 months of economic recovery, New Jersey can indeed look forward to a very bright future. And to show you just how bright we think it's going to be around this garden state, we've brought along one of New Jersey's most famous native inventions for you. New Jersey in America have a bright future ahead. Again, thank you, Mr. President, for being with us. Thank you. Just what I needed, a night light.