You know, we only have a military-industrial complex until a time of danger, and then it becomes the arsenal of democracy.  Spending for defense is investing in things that are priceless—­peace and freedom.

Third, we must reduce or eliminate costly government subsidies.  For example, deregulation of the airline industry has led to cheaper airfares, but on Amtrak taxpayers pay about $35 per passenger every time an Amtrak train leaves the station, It’s time we ended this huge Federal subsidy.

Our farm program costs have quadrupled in recent years.  Yet I know from visiting farmers, many in great financial distress, that we need an orderly transition to a market-oriented farm economy.  We can help farmers best not by expanding Federal payments but by making fundamental reforms, keeping interest rates heading down, and knocking down foreign trade barriers to American farm exports.

We’re moving ahead with Grace commission reforms to eliminate waste and improve government’s management practices.  In the long run, we must protect the taxpayers from government.  And I ask again that you pass, as 32 States have now called for, an amendment mandating the Federal Government spend no more than it takes in.  And I ask for the authority, used responsibly by 43 Governors, to veto individual items in appropriation bills.  Senator Mattingly has introduced a bill permitting a 2-year trial run of the line-item veto.  I hope you’ll pass and send that legislation to my desk.

Nearly 50 years of government living beyond its means has brought us to a time of reckoning.  Ours is but a moment in history.  But one moment of courage, idealism, and bipartisan unity can change American history forever.

Sound monetary policy is key to long-running economic strength and stability.  We will continue to cooperate with the Federal Reserve Board, seeking a steady policy that ensures price stability without keeping interest rates artificially high or needlessly holding down growth.

Reducing unneeded red tape and regulations, and deregulating the energy, transportation, and financial industries have unleashed new competition, giving consumers more choices, better services, and lower prices.  In just one set of grant programs we have reduced 905 pages of regulations to 31.  We seek to fully deregulate natural gas to bring on new supplies and bring us closer to energy independence.  Consistent with safety standards, we will continue removing restraints on the bus and railroad industries, we will soon end up legislation—­or send up legislation, I should say—­to return Conrail to the private sector where it belongs, and we will support further deregulation of the trucking industry.

Every dollar the Federal Government does not take from us, every decision it does not make for us will make our economy stronger, our lives more abundant, our future more free.

Our second American revolution will push on to new possibilities not only on Earth but in the next frontier of space.  Despite budget restraints, we will seek record funding for research and development.