Together, we not only cut the increase in government spending nearly in half, we brought about the largest tax reductions and the most sweeping changes in our tax structure since the beginning of this century.  And because we indexed future taxes to the rate of inflation, we took away government’s built-in profit on inflation and its hidden incentive to grow larger at the expense of American workers.

Together, after 50 years of taking power away from the hands of the people in their States and local communities, we have started returning power and resources to them.

Together, we have cut the growth of new Federal regulations nearly in half.  In 1981 there were 23,000 fewer pages in the Federal Register, which lists new regulations, than there were in 1980.  By deregulating oil we’ve come closer to achieving energy independence and helped bring down the cost of gasoline and heating fuel.

Together, we have created an effective Federal strike force to combat waste and fraud in government.  In just 6 months it has saved the taxpayers more than $2 billion, and it’s only getting started.

Together we’ve begun to mobilize the private sector, not to duplicate wasteful and discredited government programs, but to bring thousands of Americans into a volunteer effort to help solve many of America’s social problems.

Together we’ve begun to restore that margin of military safety that ensures peace.  Our country’s uniform is being worn once again with pride.

Together we have made a New Beginning, but we have only begun.

No one pretends that the way ahead will be easy.  In my Inaugural Address last year, I warned that the “ills we suffer have come upon us over several decades.  They will not go away in days, weeks, or months, but they will go away . . . because we as Americans have the capacity now, as we’ve had it in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.”

The economy will face difficult moments in the months ahead.  But the program for economic recovery that is in place will pull the economy out of its slump and put us on the road to prosperity and stable growth by the latter half of this year.  And that is why I can report to you tonight that in the near future the state of the Union and the economy will be better—­much better—­if we summon the strength to continue on the course that we’ve charted.

And so, the question:  If the fundamentals are in place, what now?  Well, two things.  First, we must understand what’s happening at the moment to the economy.  Our current problems are not the product of the recovery program that’s only just now getting underway, as some would have you believe; they are the inheritance of decades of tax and tax and spend and spend.

Second, because our economic problems are deeply rooted and will not respond to quick political fixes, we must stick to our carefully integrated plan for recovery.  That plan is based on four commonsense fundamentals:  continued reduction of the growth in Federal spending; preserving the individual and business tax reductions that will stimulate saving and investment; removing unnecessary Federal regulations to spark productivity; and maintaining a healthy dollar and a stable monetary policy, the latter a responsibility of the Federal Reserve System.