But it's a great pleasure to be here with all of you again. I thank you. And may I express my appreciation to the first Republican Majority Leader in 26 years, Howard Baker, who I think has been doing a magnificent job. And I've been most appreciative of the cooperation that we have had. And I for one am going to do all I can do to see that there is still a majority of you in the Senate next year.

I'd like to pay tribute also to your chairman, John Tower. I think of him as a statesman whose judgment I deeply respect. And I have been most pleased to call upon him for his vast knowledge and his good judgment with regard to our national security affairs.

In opening my remarks -- I told you there was a quote -- I would like to quote a few words by a very famous and celebrated orator, journalist, soldier, historian, and statesman. People have even said he might have made a great actor if he'd tried that. [Laughter] Winston Churchill. He said, ``The idea that a nation can tax itself into prosperity is one of the crudest delusions which has ever befuddled the human mind.'' Now, I don't know how that quote happened to catch my eye -- [laughter] -- I realize it has nothing to do with the meeting here today.

But seriously, we are still faced with problems, social and economic, which have been piling up for almost half a century. Last year, we put together a bipartisan coalition, and for the first time in that half century, we charted a new course for this country. We've only barely set foot on that new path that we chose for the country. But those who had much to do with the policies of the past were now shouting, ``Turn back!'' Members of the other party -- they haven't even waited to see where the path goes.

And it's true that we're in a recession. The people are feeling the effects, and they're not pleasant. And for those who are unemployed, in my view, they're completely tragic. But I believe the course we've embarked on offers the best hope for all of them.

There will always be room for improvement in any budget or economic policy, but we must have a budget. Where further savings are to be found or a better way of meeting agreed-upon goals can be worked out, I pledge my full cooperation to you, and I want to hear from you. But our first obligation must be to the American people.

We're coming out of a long night of government mismanagement and blundering. There's no quick fix. But I cannot accept the idea that a program which hasn't really started is responsible for the displeasures of today. Planned deficits and deliberate inflation as a supposed means of preserving prosperity was the policy of the Democrat-controlled Congresses for most of this last half century. Has there been any indication that they are not demanding a return to those past policies? If they are, they're doomed to failure.

These aren't easy times, as I said before. But together I believe we can hold down taxes. We can hold down spending and ensure a national defense that is able to preserve the peace. I'll be glad to consider any comprehensive congressional plan that meets this crucial standard. And I promise you that where we have honest differences, you can count on me to be willing to listen and a sincere partner.

But we must stand firm, I think, on the three basic commitments. Together, we must get on with the job of bringing the budget under control. We're already winning the battle against inflation. We can and we will bring interest rates down. And that is the absolute must in the problems confronting us. And we must continue to return the resources and responsibilities to the people that will mean more savings, more freedom, more economic opportunity, and more jobs.

I think that for the first time in this the eighth recession since World War II, it is the first time that there has been in place, before the recession started, a program that is designed to bring us out of that recession and bring us out, not with an artificial fix -- the kind of thing that we've seen seven times before and each time the next time we dive, it's deeper -- but will bring us out, back to a sound economy, and with our people who want jobs, having jobs, and with this government on the track that it should be on.

So, with that, I'm going to sit down, and we'll get on with the rest of the meeting.

Note: The President spoke at 12:45 p.m. in Room S - 207 at the Capitol. Prior to the luncheon, he met with Senate Republican leaders and committee chairmen in the office of Senate Majority Leader Howard H. Baker, Jr. Following the luncheon, he met with Senate Minority Leader Robert C. Byrd.