 Thank you. Thank you very much. Thank you. Thank you very much. Sit down or you'll never get dinner. Thank you. Well, Mr. Chairman, Reverend clergy, Governor Jim Thompson, I thank you very much, Jim, for your hospitality and for those kind words. Senator Percy and the members of Congress, the members of your legislature, the officials of our party, all who have been introduced here tonight, I don't know whether I'm the latest after lunch speaker or the earliest after dinner speaker that's ever been in an affair like this, but I am grateful that you've made it possible for me to speak early because we have made a 2,000 mile round trip for dinner. It's been very thrilling to come back here. I have met people on the way in from Tampico where I was born and those people with the white hats over there are from Dixon where I grew up. Your welcome is so warm that I'm sorry we have to return to the Capitol this evening. It's just a case of from one windy city to another. Only Washington doesn't have the excuse of a lake. That isn't all we have in common. Your mayor moved into public housing. He said to draw attention to the conditions there. Well, Nancy and I have done the same thing and for the same reason. You know, back a few years ago, and I'm not going to say how many, I used to broadcast Chicago Cubs games. Now, of course, of course, there's a baseball strike, but every dark cloud has a silver lining. You can look at it this way for almost a month now that Cubs haven't lost a single game. But I'd like to preface my remarks by saying that this has been a very happy day for me and I hope for our country. As I said during the campaign, I've long believed that the time has come for the highest court in our land to include not only distinguished men, but distinguished women as well. And thus, when Justice Potter Stewart reported his retirement to us earlier this year, we began a search for a highly qualified woman who would serve this nation well. And today, I announced my intention to nominate just such an individual, Judge Sandra O'Connor of Arizona. I had the pleasure of meeting with Mrs. O'Connor last week and I can report to you that she not only has a long and brilliant record as a legislator and jurist, but she also impressed me as a thoughtful, capable woman whose judicial temperament is highly appropriate for the court. After listening to her and examining her whole record in public life, I am fully satisfied that her appointment is consistent with the principles enunciated in our party platform this past year. Judge O'Connor in my view will bring new luster and new strength to the Supreme Court and I feel certain that her term upon the bench will be one of the proudest legacies of my president. But tonight, tonight we're here to honor a big man in Illinois. Now there's no doubt that Jim Thompson's tall, but Jim built his fame and a different kind of size as a courageous prosecutor fighting corruption in places people said could never be rid of it. He restored the people's faith in those who hold public office and he sought justice in government in the name of the governed. He brings to the office of governor that same integrity and competence, the qualities that build coalitions, the qualities that capture public support, the qualities of a great leader. And I can tell you that he's been one of our strongest supporters in the fight to cut federal spending. He knows that we have to balance the budget in Washington because he's balanced the budget in Illinois for the last four years. Now Jim Thompson knows that America has to compete in world markets and he's worked hard to make Illinois the largest dollar volume exporter of agricultural products in America. He knows people of different parties can work together because that's how you do things in Illinois. I rely on his advice and counsel and I'm grateful for his friendship. Now there's someone who couldn't be here tonight that I would like to thank, the colleague of those fine congressmen you've already met, Bob Michael. He's been the point man for our cause in the House of Representatives. Without his unfailing and able help, the victories we've won these past few weeks would never have been possible. Bob has our thanks and admiration. And of course there is another man missing who should be here, Jim Brady. But Jim's parents are here. Mr. and Mrs. Brady, I want you to know I spoke with Jim just before I left. He's getting better every day and his humor is as outrageously funny as ever. His job is waiting for him and we all hope and pray that he'll be back soon because we miss him very much. My fellow Republicans, one year ago, in a Midwestern city only a few hundred miles from here, those of us in the party of Lincoln met in convention. At that time and place we pledged an end to those economic policies that had sparked double digit inflation, soaring unemployment, and declining economic growth. We pledged to end the unnecessary intrusions of government into the everyday lives of American workers. We pledged to end disrespect for America abroad and to rebuild our national defense so as to make America respected again among the nations. And yes, we pledged to rescue America from four years of malaise caused not by the American people but by those who failed to give America leadership. We pledged in short to reopen all those roads to greatness that led America to unrivaled freedom and unparalleled strength in the world. Now, we acknowledged that we couldn't undo all the harmful effects of misguided policy and special interest politics in a few months or even a few years, but that early in our Republican administration, no matter how hard the decisions, we would stand by our commitment to get government under control and to put America back on the road to prosperity, and we're keeping that pledge. We have moved to cut federal spending, to eliminate excessive regulations, and to reduce the steadily growing tax burden on working men and women. You might have heard some talk of that lately. We've moved to reinvigorate our private institutions and to renew the confidence of the American people in the greatness of their nation and in their values of family, work, and neighborhood, values responsible for that greatness. This new national confidence isn't just reflected in opinion polls at home. Ten of our major steel producers and 11 other steel producers are spending $3.6 billion on modernization of plant and equipment, and then there is the newfound strength of the American dollar in the money markets, and certainly it's reflected in the new respect and deference shown American leadership by both friend and foe around the globe. Some in the press have been overly concerned because I haven't made a, quote, major foreign policy address, unquote. Their automatic assumption is that until I do, we don't have a foreign policy. Well, to begin with, I just don't happen to believe it necessary to spell out in detail and in advance a formula which will guide our every move in international relations. Basically, good foreign policy is the use of good common sense in dealing with friends and potential adversaries. Now, I assure you, we know where we're going, and we think it might be counterproductive to make a speech about it. Over and over again in last year's campaign, it was emphasized that renewal of America's economic might and a return to a stable and sound prosperity was the first step to a credible foreign policy. And during the last few months in a startling and heartwarming display of national unity, Republicans and discerning Democrats have worked together toward that end. We've laid the foundation for a long-range buildup of our armed forces, bringing us nearer the day when Americans can once again enjoy a margin of safety and peace will be made more secure. I received a letter... I received a letter the other day from an enlisted man in our Navy. He wrote that he was speaking for his almost 200 shipmates. I'm beginning to see a rebirth throughout the Navy of pride and professionalism, he wrote. It feels good to be an American again. We may not be the biggest Navy in the world, but we're certainly the best. We've begun to solidify after years of tension and softness, sometimes often discord, our ties with Japan and our European allies. Through the Habib mission, we have helped avert war in the Middle East, and the mission continues. He's on his way back there. We further developed our relationship with China while we've stood by and will continue to stand by our commitments to Taiwan. In Southwest Asia, we have reinvigorated our strategically important relationship with Pakistan. In Southern Africa, we have initiated work on a realistic Namibian solution, and in the Caribbean, we've launched an effort to attack the root causes of instability while we're making it clear the United States will not tolerate interference by Cuba with the lives and freedoms of other nations in this hemisphere. At home and abroad, in less than six months, we've worked quietly and effectively to set our agenda and give priority to our problems, addressing them head-on. And this has been accomplished in a manner consistent with the promises made last year to the American people. We're keeping our promise to all of those millions of Americans who heard the calls sounded last July and who responded last November with an overwhelming mandate. We're responding to that mandate not by politics of division or envy, but by claiming a share of the moral high ground, by summoning every American from every walk of life, from every ethnic and racial group to a future of national prosperity, of expanded opportunity, and greater personal freedom. Last year, we were deeply distressed about the direction our country had taken. Our country faced grave threats. How in these past few days we've all known the joy of a great bipartisan victory? Well, now maybe not all of us knew the joy. The moment members of the House affirmed the Graham-Latta budget resolution and the people at last began to regain control of their government, there were some immediate cries of pain. It was even said that I was trying to destroy America. You wonder where some of these people have been for the last few years? Well, the answer to that is right in Washington, D.C. in responsible leadership positions in government. Double-digit inflation rates, double-digit inflation rates, unemployment rates of more than 7%, interest rates of 20%, mortgage rates of over 15%, did not begin on the afternoon of January 20th, 1981. They began when this nation, started down the path of government intervention, of tax and tax, spend and spend, elect and elect. Let no one fault the motives of those who implemented such policies. They only intended to help, but they based their efforts on an impossible equation. If I can't pay for my needs and you can't pay for yours, we can't solve our problem by hiring the government to take money from both of us to give to each other. So-called entitlement programs, the redistribution of funds from one group of citizens to another, has risen by 453% in the last 13 years, going from $63 billion to $346 billion in the proposed budget for 1982. Now we call for reducing that 1982 budget amount by 5.2% $17.9 billion. I submit that a 5.2% reduction of funding for those programs can be made without penalizing the truly needy or any of the program, those people that the programs are intended to help. The reduction is based on knowledge of recipients who are unfairly receiving benefits through loopholes and loose management of entitlement funds. And so it is with the other proposed budget cuts. Truly needy people, including our senior citizens, are being cruelly and unnecessarily frightened by those who contributed to our economic mess in the first place. The planned march on Washington this autumn will be far more representative of those who administer the benefits than of those who are really dependent on government help. We Americans are a generous and a compassionate people. And no particular segment of our society has a monopoly on those traits. Jim Thompson, Bob Michael, and all these others who are here tonight who have been leading and helping secure the budget reductions in the gram-ladda bill have compassion for those who must be helped. They also have compassion for those long-suffering Americans who have been providing that help and whose voices have finally been heard in Washington, D.C. Within the last few weeks, the Congress of the United States has been an arena of ideas and courage where elected representatives summon strength born not of politics but of statesmanship. Led by Republicans and joined by, as I've called them discerning Democrats, the Congress voted a turn away from the established pattern of more and more spending and bigger and bigger government. Men and women of both parties are coming together with a spirit and drive that can only mean great things for all Americans. The American people are taking their lives and their livelihoods back into their own hands. They are regaining control of their political institutions and making them respond again to their will. Now, this means that for a change, the American people are winning. We've begun the job, but this is no time to rest for just ahead of us lies the largest and most difficult step of all, to reduce the escalating tax burden that is crushing the spirit of enterprise. Our punishing tax structure has the effect of discouraging people from earning more, taking away incentives to work harder and accept more responsibility. Our tax structure, coupled with inflation, is locking families and people rigidly in place as the cost of living, as the American dream passes out of reach. This always happens when policy makers lose faith. For too long, we've been burdened with people in Washington who wanted to spend more, but had no faith that our economy could produce more. So what did they do? They taxed more and more and more to the point that last year they approved the largest single tax increase in the history of this country. Such a government-dominated economy can only be a withering economy. We need only look around us for evidence of what is happening in Poland today is a classic example. There are probably few people as strong and as valiant as the people of Poland, and yet their economy is described as being in a vicious downward spiral. Now, this isn't the fault of the Polish people. It is the logical result of an illogical system, a system that has no trust, no belief or faith in people, and when government has no respect for its citizens, the citizens lose respect for government. The problems with the American economy are not the fault of the American people. They're responding as you might expect. Consumers and businessmen are making decisions based on how to avoid burdensome and unnecessary regulations and punitive taxes. In decisions on investment are made not for maximum return, but on tax strategy. There's a growing underground economy, which is a deeply disturbing trend, and this kind of deliberate dishonesty can never be condoned, but even honest taxpayers are feeling a growing resentment toward inflation and a tax system that profits by that inflation. Continuing as we are is the greatest danger we face. The American people must have tax relief, and they must have it now. Thursday morning in Washington, a congressman from Illinois will reconvene the committee on ways and means of the United States House of Representatives. All tax legislation must begin in that committee. That congressman from Illinois, Representative Dan Rostankowski, must provide the leadership necessary to report a tax bill to the House floor in time for the congress to debate it and for both houses to agree and time is running out. The congress must act by early August when both houses recess so that new tax tables can be made. If there's no tax bills sent to my desk for signature by early August, there won't be a tax cut this year. The Senate is ready and you and I can take pride in that. Last November, the people of this country elected a Republican majority in the Senate and the Senate Finance Committee already has agreed on a tax cut bill that lets be fair as well as proud of our Republican leadership. Democratic and Republican senators on that committee worked together. The vote was 19 to 1 for a bipartisan bill that comes very close to what we had proposed. Senator Bob Dole, chairman of the finance committee tells me the Senate will act on that bill next week. That puts the ball as the saying goes in the court of chairman Danny Rostankowski and the House Ways and Means Committee. In the meantime if all of you will join with your neighbors to send the same message to Washington we'll have that tax cut and we'll have it this year. Whatever your faith might be in the post office, take a chance and send a letter to Congress. And I'm convinced that once debate is allowed to begin on the House floor we'll have a tax cut bill like the bipartisan bill announced at the White House last month. We need a tax bill, but we need the right tax bill. Our proposal is not a rich man's windfall as some have falsely charged. It is fair, it is equitable and it is compassionate and three-quarters of the relief will go to those who are paying just about three-quarters of the tax. Our tax cut proposal reduces taxes in proportion to the taxes paid. Nothing less would be fair. Our tax cut proposal reduces tax rates across the board by the same percentage for everyone who pays taxes. Nothing less would be equitable. Our tax cut program will provide jobs in the private sector, jobs that will last. Our program will provide opportunities for all. Nothing less would be compassionate. The bipartisan tax cut bill that we support includes a 25% across the board marginal rate cut over a three-year period, a reduction in the marriage penalty, estate and gift taxes along with the elimination of any estate tax at all on a surviving spouse. We propose reducing the tax on investment income from 70 down to the top of 50%, such as an accelerated and also for business an accelerated recovery system. Some of these features I'm happy to say are included in the tax proposals that are being talked of in the House Ways and Means Committee. At the same time, however, let me point out a very crucial difference. A difference that makes all the difference in the proposal being bandied about by some of the Democratic leadership. For it is no tax cut at all, it is a tax increase. They only propose a 15% reduction in the personal income tax. There is presently an already built-in tax increase plus the bracket creep of inflation which amounts to a tax increase of nearly 22% in the course of the next three years. Our tax proposal counters this 22% building increase with a 25% decrease over those three years, in addition to the other additional features such as the tax deductions for personal retirement plans, correction of the marriage penalty, etc. In other words, the present choice is between our tax cut or no tax cut at all, indeed a tax increase. Now there are those who oppose the bipartisan tax cut because frankly they're afraid the government will lose revenue. Now somehow that doesn't strike me as a national disaster. He said we must have this tax not for government's needs, but for government's wants. Well we must cut the growth of spending this year, next year, and the year after that. We must also reduce the excessive percentage of the gross national product that the government is taking in taxes. Government has become a drag on the economy. Now it's true that I believe as President Kennedy did that our kind of tax cut will so stimulate our economy that we will actually increase government revenue. But the gross national product will be increased even more so that government's excessive percentage will be reduced. Plainly and simply a tax plan, while it will reduce the burden for each one of us is intended to stimulate the economy increase productivity and provide jobs. President Kennedy put it very well when he said that an economy hampered by restrictive tax rates will never produce enough revenue to balance our budget. You know, I'm tired of hearing our opponents justify their opposition by saying they're the party leading people. Well, as you well know, for a long time I believed they were. In fact, I think some of their past leaders not only believed they were, but dedicated themselves to that cause. But today, there's a disenchantment with the leadership of the Democratic Party on the part of millions of patriotic Democrats who see that leadership stubbornly clinging to the belief that only more and bigger government is the answer to our problems. It's significant that last year's Democratic National Convention and inordinate percentage of delegates were rank and not rank and file working people, but public employees who had a personal stake in continued big government. They were the majority. Just the other week a former Democratic congressman recently elected to a liberal leadership position said free enterprise could be too cruel. What we need, he said, is the gentle force of government. The gentle force of government? For the working men and women who can't get a job, can't buy a house or can't keep up with the cost of living, that force of government has all the gentleness of a runaway bulldozer. Which really is the party of the people? The party that embraces the failed policies that will continue high inflation or the party to stop it. The party whose only answer to unemployment is temporary make work or the party that is working to produce private sector jobs, jobs with a future. The party that sees government as the benevolent master of the people or the party that says the people are the master of government. I said before last year gave us the largest single tax increase in the history of this nation or the party that's fighting hard to reduce tax rates. Carl Sandberg wrote of the days when our party was formed, tense and restless days of growth in the 1850s. America was torn by the issue of slavery. Neighbors were turning against neighbors in Kansas and Missouri. Liberty and freedom for all men was at stake. Political elements in Illinois and in other states were holding conventions to establish state parties and create a national republican party. He told those present that if the safeguards of liberty are broken down for some they're broken down for all. He called on Americans to be true to themselves and to protect their freedom with their ballot. He was telling why the republican party was being organized. Later a delegate to the second national convention of the new party where Lincoln had been nominated for president reporting on the convention to the folks back home in Wisconsin said we kept in mind that the republican party had sprung from the indignation of the people and had gained its strength by the uprising of the popular heart for a great positive idea that it is a party of volunteers held together not by drill and command but by the moral power of a great common cause. Ours is that party still building and expanding a coalition drawn from the heart of this land. A coalition that will again change a course we've been on for far too many years. We are a coalition of Americans willing to be true to ourselves willing to invest ourselves in a great common cause the future of America. Our country needs our minds and our energies. There can be no wealth unless we create it. No new discoveries unless we find them and will not create or discover until we're willing to risk a little. We've inherited from our forefathers and possessed by our freedom the strength of will that enables us to thrive we believe tomorrow will be better we're willing to take a chance on ourselves if we're free to dare and we are if we're free to give and we are free to shape the future and have within our grasp all that we dream that future will be we've tried the gentle force of government for almost 40 years may I simply say it's time for a change thank you very much thank you very much we're at your ranch in California your choice to remind you first of the happy years that you both spent in Illinois and secondly of the genuine warmth and affection and gratitude of the people of this state first Mrs. Reagan and now if you'll all remain in your seats please until the president's party leaves let's say goodbye and a very big Chicago in Illinois thank you to the president of the United States and to the American