A year ago I reported that the state of the Union was better—­in many ways a lot better—­but still not good enough.  Common sense told me to stick to the steady course we were on, to continue to restrain the inflationary growth of government, to reduce taxes as well as spending, to return local decisions to local officials, to provide for long-range sufficiency in energy and national security needs.  I resisted the immense pressures of an election year to open the floodgates of Federal money and the temptation to promise more than I could deliver.  I told it as it was to the American people and demonstrated to the world that in our spirited political competition, as in this chamber, Americans can disagree without being disagreeable.

Now, after 30 months as your President, I can say that while we still have a way to go, I am proud of the long way we have come together.

I am proud of the part I have had in rebuilding confidence in the Presidency, confidence in our free system, and confidence in our future.  Once again, Americans believe in themselves, in their leaders, and in the promise that tomorrow holds for their children.

I am proud that today America is at peace.  None of our sons are fighting and dying in battle anywhere in the world.  And the chance for peace among all nations is improved by our determination to honor our vital commitments in defense of peace and freedom.

I am proud that the United States has strong defenses, strong alliances, and a sound and courageous foreign policy.

Our alliances with major partners, the great industrial democracies of Western Europe, Japan, and Canada, have never been more solid.  Consultations on mutual security, defense, and East-West relations have grown closer.  Collaboration has branched out into new fields such as energy, economic policy, and relations with the Third World.  We have used many avenues for cooperation, including summit meetings held among major allied countries.  The friendship of the democracies is deeper, warmer, and more effective than at any time in 30 years.

We are maintaining stability in the strategic nuclear balance and pushing back the specter of nuclear war.  A decisive step forward was taken in the Vladivostok Accord which I negotiated with General Secretary Brezhnev—­joint recognition that an equal ceiling should be placed on the number of strategic weapons on each side.  With resolve and wisdom on the part of both nations, a good agreement is well within reach this year.

The framework for peace in the Middle East has been built.  Hopes for future progress in the Middle East were stirred by the historic agreements we reached and the trust and confidence that we formed.  Thanks to American leadership, the prospects for peace in the Middle East are brighter than they have been in three decades.  The Arab states and Israel continue to look to us to lead them from confrontation and war to a new era of accommodation and peace.  We have no alternative but to persevere, and I am sure we will.  The opportunities for a final settlement are great, and the price of failure is a return to the bloodshed and hatred that for too long have brought tragedy to all of the peoples of this area and repeatedly edged the world to the brink of war.