I thank all of you very much for your most warm welcome. I'm also glad to see Congressman Hyde and Dan Rostenkowski here with me today. I know that Congressman Hyde and I have shared a relationship in our interest in social causes that are of interest very much to the Catholic community. And I have to say that Dan Rostenkowski has been such a stalwart in our attempts to resolve our budget problems in Washington in a bipartisan manner. And I'm grateful to him for that.

Before I begin talking about some of the things that I think are of immediate concern to you in this kind of a meeting, could I just say to those who obviously and very sincerely are motivated by a deep desire for peace in the world that I share that desire. And whatever we're doing in Washington today in this regard is aimed at one purpose and one only: to make war impossible and never again have to bleed a generation of young Americans into the battle -- -- [applause]. Thank you very much. [Applause] Thank you.

Now, I'm sure you realize that it's something of a risk for any government official to appear in public on income tax day. [Laughter] I'm delighted to have this opportunity to be among leaders and educators in the Catholic community, a community of Americans who have done so much to bring sustenance and fulfillment to people around the world. I'm grateful for your help in shaping American policy to reflect God's will; for your efforts to allow Americans to provide direct aid to the people of Poland. And I look forward to further guidance from His Holiness Pope John Paul II during an audience I will have with him in June.

But I have come to speak with you today about other subjects of mutual concern -- about the strength and the future of American families, about the education of their children, and about the increasing strains placed on both by current levels of taxation. I believe that working Americans are overtaxed and under appreciated, and I have come to Chicago to offer relief. I have come to propose further restoration of the incentives and the choices that were our inheritance and that encouraged our people to build the greatest nation on Earth.

We've already taken historic strides. Last year, with the help of a bipartisan coalition in the Congress, we enacted the largest tax cut in history for the working men and women of America. But to give you an idea of what we're up against, that tax cut will barely offset the increases that had already been built into the system. Despite all the moaning you've been hearing in Washington about huge tax cuts running up the deficit, our tax reduction program has not meant that government revenues are going down. The United States Treasury is still taking in more money every year than the year before. In 1981 personal taxes actually went up by about $41 billion.

Raising taxes is no way to balance the budget. History proves it doesn't work. Taxes went up by more than 200 percent in the last decade, and we still had the largest string of deficits in our history, because, you see, while taxes were going up 200 percent, spending was increasing over the same period by over 300 percent. If people are serious about balancing the budget they must cut spending. Suggestions to repeal the third year of our tax cut would stifle our recovery and hike the tax bill for working families.

I believe the working families you see every day are already weary and overburdened, so I've come to Chicago to propose another tax bill that would allow them to keep a little more of their own money. I have come to propose a tuition tax credit for parents -- [applause] -- thank you very much. Thank you. Thank you. Maybe I should have saved that for last. [Laughter] But this tax credit will be for parents who bear the double burden of public and private school costs.

Now I know you've heard promises before. Politicians in the past promised tax credits and broke those promises. But this administration is different. We're a bunch of radicals. We really intend to keep our promises, and we intend to act on the will of the people.

In 1980, while campaigning, I promised to base this administration's policies on the primacy of parental rights and responsibility. I pledged to expand education opportunities by supporting a tuition tax credit plan that would permit parents to take a credit on their income tax for each child they have in private school. And today, as your President, I keep that pledge.

I'm pleased to announce that after consulting with congressional leaders, we will send to the Congress, later this spring, draft legislation to be known as the Educational and Opportunity Equity Act. Our bill will be aimed at the middle- and lower income working families who now bear the double burden of taxes and tuition, while still paying local taxes to support the public schools. Working families would be able to recover up to half the cost of each child's tuition. Our proposal is fair, equitable, and designed to secure the parental right to choose.

Key elements of our draft proposal include a limited coverage provision that would restrict credit to parents of children in private, nonprofit elementary and secondary schools -- I wish we could include college as well, but you know the budgetary constraints that face us today that we're working under, so I look forward to a day when we can expand this bill -- a phase-in of the credits beginning in 1983 to be completed in 1985, a maximum credit of $500 per child, an income cap proposal to ensure the benefits go to working families, and a policy of nondiscrimination to ensure that credits are not available to parents sending their children to schools which discriminate on the basis of race.

Now, it's important to understand that we do not propose aid to schools. This bill will provide direct benefit to individuals. It's proposed as a matter of tax equity for working, taxpaying citizens. We don't seek to aid the rich, but those lower and middle-income taxpayers who are most strapped by inflation, oppressive taxation, and the recession that grips us all.

I'd like to think that we're offering help to the inner-city child who faces a world of drugs and crime, the child with special needs, and the families who still believe the Lord's Prayer will do them less harm in the schoolroom than good.

In 1979 a majority of all parents who had children in private elementary and secondary schools had incomes of $25,000 or less. Secondary school parents pay average tuition costs of $900, while also supporting their community public schools through local taxes. Our proposal is intended to relieve, as I've said before, that dual financial burden threatening to usurp the traditional right of parents to direct the education of their children.

Today, more than 5 million American youngsters attend thousands of religious and independent schools because of emphasis on values or the type of teaching available. Their parents have made that choice at great cost and sacrifice. They've made it because the education of their children is their greatest concern.

Senator Patrick Moynihan, Democrat of New York, said a few years ago -- [applause] -- I'll tell him you responded to that -- [laughter] -- ``It's time that we acknowledged the ordinary family's insistence on providing its children with the best obtainable education results in costs that the Federal Government should help it to bear -- not by giving it a handout or a gift, but simply by allowing it to keep a bit more of the money it earns for itself.'' Well, I wholeheartedly agree, and I think most of you do as well.

At the same time, we must recognize that America today faces real fiscal difficulties, difficulties which cannot be ignored in scaling and shaping the tuition tax credit proposal that we're making. Our responsibility as parents and citizens requires no less of us.

It's no accident that we who are the freest people on Earth have an educational system unrivaled in the history of civilization. We know that knowledge and freedom are inseparable, and we also acknowledge the right of every individual to both. They cannot be arbitrarily apportioned according to race, station, or class.

The Pledge of Allegiance, now missing from too many of our classrooms, concludes with the affirmation that we are ``one nation under God . . . with liberty and justice for all.'' America embraces these principles by design and would abandon them at her peril.

Private education is no divisive threat to our system of education; it is an important part of it. Our public schools offer quality education to our children and are the heart of our communities. We must ensure that their classrooms continue to provide the finest education possible. But alternatives to public education tend to strengthen public education. Taken together, public and private institutions sustain the diversity that has made our culture rich.

Excellence demands competition among students and among schools. And why not? We must always meet our obligation to those who would fall behind without our assistance. But let's remember, without a race there can be no champion, no records broken, no excellence -- in education or any other walk of life.

This freedom to choose what type of education is best for each child has contributed much to America's reputation for excellence in education. Unfortunately, the high plane of literacy and the diversity of education we have achieved is threatened by policymakers who seem to prefer uniform mediocrity to the rich variety that has been our heritage.

As competition has lessened, so has quality. As taxes and inflation have ballooned, choices have evaporated. Together we must restore the pluralism that has always been the strength of our society.

Our leaders must remember that education doesn't begin with some isolated bureaucrat in Washington. It doesn't even begin with State or local officials. Education begins in the home, where it's a parental right and responsibility. Both our public and our private schools exist to aid our families in the instruction of our children, and it's time some people back in Washington stopped acting as if family wishes were only getting in the way.

``Train up the child in the way he should go,'' Solomon wrote, ``and when he's old he will not depart from it.'' That is the God-given responsibility of each parent, the compact with each teacher, and the trust of every child.

This city of Chicago is a good example of the strength that pluralism and freedom of choice have provided our people. Chicago has long been a magnet for immigrants who have come to this country to make a better life. For them, education was not simply another part of American society -- it was the key that opened the golden door. It was the best path to progress for their families. And it's been an indispensable part of the growth of our nation and the prosperity of all our people.

Many of your Catholic schools were first opened to serve these new Americans. Today, generations later, they serve other Americans who find themselves at a disadvantage. The Nation's largest black Catholic school stands in the middle of one of Chicago's poorest neighborhoods. It imposes strict academic and religious requirements, and yet it still receives 1,000 more applicants a year than it can accept.

Such statistics explain why Americans at every economic level believe education is still something to sacrifice for. It still offers the promise of a better life. It's still the hope of our people.

Who will really benefit from tuition tax credits? Well, according to the Most Reverend James P. Lyke of Cleveland, ``the people who will benefit most'' are ``minorities and the poor.''

Reverend Lyke said that inner-city parents desperately need to be told by this government: ``You may educate your children in the schools of your choice as guaranteed by the Constitution, and you'll be able to do so even though you may be poor, whether or not you live in the cities or the suburbs or the rural areas of this country.''

Well, those Americans have not forgotten what education and freedom can do. They know that freedom is the only truly essential possession we have, and education is freedom's guide. These are not easy times for a great many Americans, but the future looks dark only for those who've lost faith in our people and in the promise of individuals who are educated and free. The rest of us should welcome the future, knowing that with God's help it is ours to shape.

Together with your colleagues in other independent and public schools, you are molding each rising generation. You're working with parents to fill young minds with the knowledge and young hearts with the morality, the understanding and compassion that they will need to live in happiness and fulfillment. In the meantime, we in Washington must make sure that freedom, the other half of education, is still secure when your students graduate.

We must make sure that the incentives to use their education are not destroyed by an oppressive taxation. We must be sure the Federal Government doesn't soak up the lion's share of our gross national product, that regulations don't choke off technology, and that interest rates don't ruin the dream of self-employment.

As your boys and girls become adults and they marry, we must have an economy which will permit them to own their own homes. The values of work and family and neighborhood must not become things of the past. A job must be there for every American who wants one, and inflation must be controlled so that wages have real meaning.

And after your students have spent their lives turning your theories into reality, earning a living and providing for their families, we must have a society that will reward them with security. In short, we must end the excessive taxes and spending that has wrecked our economy and mocks the ambition of our poor and middle classes. We must open the way for more productivity and more employment. We must generate new jobs and new opportunities for all our citizens. At the same time, we must realize there are some among us who cannot help themselves. Our hungry must be fed, our elderly must be cared for, and those who are cold must be clothed and given shelter. No one must be left behind in our drive for progress.

Such a commitment from this administration may come as somewhat of a surprise to you. If I didn't know better and believed all the wailing going on in Washington, I'd be confused as well. But let me set the record straight: Our massive budget cuts have only reduced the size of the increase in Federal spending to less than it was the previous year. Or, I should say, forgive me, we have never proposed reducing Federal spending to less than it was the previous year.

Let me give you a few examples of the level of human services that we've proposed in the 1983 budget.

-- The Federal Government will subsidize approximately 95 million meals per day, or 14 percent of all the meals served in the United States.

-- About 3.4 million American households will receive subsidized housing assistance at the beginning of 1983. And by the end of 1985, under our proposals, 400,000 more households will be added to the list.

-- In all, Federal programs will provide over $12 billion to education aid to students. And this amount will provide for 7 million grants and loans, giving assistance to almost half of all the students in the country who will enroll in college during the next school year.

-- Through Medicaid and Medicare, the Federal Government will pay for the medical care of 99 percent of those Americans over the age of 65 and a total of 20 percent of our population -- approximately 47 million aged, disabled, and needy people.

-- Twenty-eight percent of all Federal spending will go the elderly, an average of $7,850 per senior citizen in payments and services.

-- About $2.8 billion will be spent on training and employment programs for almost 1 million low-income people, nearly 90 percent of whom will be below the age of 25 or recipients of Aid to Families with Dependent Children.

Now, these are just some examples of what is in the 1983 budget that some are charging is an inhumane denial of help to America's needy. Perhaps our greatest program for the poor, the needy, and those on fixed incomes, however, has not been a subsidy, it has not been more welfare, and it didn't arrive in the form of a government check. We have increased the purchasing power of our people.

After an unprecedented 2 years of back-to-back double-digit inflation, we achieved in the first year of this administration an inflation rate of -- single digit -- 8.9 percent. But during the last 6 months, inflation has averaged only 4\1/2\ percent.

Now, what does that mean in purchasing power? Well, if inflation had kept running at the rate it was before the 1980 election, a family of four on a fixed income of $15,000 would be $1,000 poorer in purchasing power than they are today.

Now, I don't think Americans value a handout nearly so much as a hand up. Past policies have locked millions of our people in place on the bottom rung of our economic ladder. We must be sure that our government never again stands in between our families and prosperity. We must aid those who need us, but we must not hinder those who need only a chance.

Years ago, the Secretary of the Massachusetts Board of Education, Horace Mann, said education ``beyond all other devices of human origin is a great equalizer of the conditions of men -- the balance wheel of the social machinery.''

The immigrants who came to Chicago, the poor in our inner cities, the middle classes stuggling to make ends meet -- these Americans still believe the American dream. They still yearn for prosperity and still sacrifice so that their children will enjoy it. They mark progress by the level of education reached by members of their families. Parents who never finished high school send their children to college. Each generation stands upon the shoulders of the one before as our nation and our people reach for the stars.

We must keep those dreams alive. We must provide the learning, shape the understanding, and encourage the spirit each generation will need to discover, to create, and to improve the lot of man. But we must also preserve the freedom they will need both to pursue that education and to use it.

Together, with God's help, we must ensure that in Abraham Lincoln's words, our children and our children's children to a thousand generations will continue to enjoy the benefits that have been conferred upon us. It is a sacred trust.

Thank you, and God bless you.

Note: The President spoke at 10:37 a.m. at McCormick Place. He was introduced by the Most Rev. John Cummins, chairman of the NCEA board of directors and Bishop of Oakland, Calif.