Henry, I came here with some lessons that I brought with me that I'd learned in a previous life out on the west coast: Don't get involved in scenes with kids or dogs. [Laughter] And tonight I've learned another one. Don't get on the program following Henry Kissinger. [Laughter]

But we're here to recognize those Senators who stood with us for 3 years and who are now running for reelection. And we are here also to salute their leader and ours in the United States Senate, a man who means much to all of us, both professionally and personally.

One of the first things I learned when I got my current job was just about how serious Howard Baker really is about photography. [Laughter] He's one of the few Members of Congress who would rather take your picture than twist your arm. [Laughter] Well, there's a story, and I understand it's true. It's about a newspaper photographer out in Los Angeles, kind of reminds me of Howard.

He was called in by his editor and told of a fire that was raging in Palos Verdes. That's a hilly area in the southern part of Los Angeles County. And the photographer's assignment was to rush down to a small local airport, board a waiting plane, go out and get some pictures of the fire, and be back in time for the afternoon edition. Well, he raced down the freeway, broke all the traffic laws, got to the airport, drove his car to the end of the runway, and sure enough there was a plane revving up its engines, ready to go. He jumped in the plane shouting ``Let's go!'' and they were off. At about 5,000 feet he began getting his camera out of the bag, told the fellow flying the plane to get him over the fire so he could get his pictures and get back to the paper. And from the other side of the cockpit there was a deafening silence, and then he heard those words he will always remember: ``Aren't you the instructor?'' [Laughter]

Well, since 1966, Howard has been making the picture as well as taking the picture. Howard, I'll say you'll be missed, but if you make yourself scarce, we're going to come looking for you, and you can count on that.

It is more than fitting that a dinner like this, which is beefing up the Republican Majority Fund, would salute Senator Baker. Under his leadership, the Republicans in the United States Senate served faithfully as the loyal opposition. And for the last 3 years and for the first time in half a century, Republicans have maintained a majority in the upper House for two consecutive sessions -- the first and only time in 50 years.

Howard may not remember this, but he did me a tremendous service several years back. It was just before the 1976 election, and I ran into Howard and Joy. He had a new camera, and I was inspecting it. And I asked him if that was really the camera he wanted, and I'll always remember his answer. He said, ``We bought it; we paid for it; and we intend to keep it.'' [Laughter]

Seriously, though, with Howard's guidance, we've proven to the American people that there is a difference in the two political parties and that, if given the chance, we can make a sometimes frustrating democratic process work for the betterment of our people.

During the election of 1980, we Republicans stated our case and outlined our program, and we did not, as some now suggest, just run against my predecessor. The opposition, with few exceptions, had control of both Houses of the Congress almost continually for 50 years. In those 50 years, we have held both Houses of the Congress for 4 of the 50 and one House, the Senate, for these last almost 3 years. And for long stretches, our opponents held not only the Congress of the United States but the White House as well, and all the departments and agencies. And now as much as they would like to blame the near crisis we inherited on my immediate predecessor, we know that's not true. It was not one individual who caused all those enormous problems America faced in 1980. It was decades of their liberal policies, their policies with good intentions, but unworkable solutions.

In January of '81, we set out to do what we proposed to do. Together we have fundamentally changed the direction of American Government. We can be proud of what we've accomplished. And when I say ``we,'' I mean a Republican ``we''. To those who criticize, I say to them, let them clearly state the alternative. Then let them explain how this blueprint would differ from the many years when their party dominated the Federal Government and left us with near disaster.

What has been achieved in the last 3 years has been the result of a team effort. We can be particularly proud of the 1981 tax and spending cut packages, the most significant economic legislation in memory. Without Republican control of the Senate, and without the kind of leadership Howard has been providing, that recovery package would still be bottled up in committee.

It takes time for any program to take hold. The opposition was declaring that our program was a failure the morning after it passed, and did everything to pull the rug out from under our reforms before they had a chance to work. Well, ladies and gentlemen, we've weathered the storm. It is clear now even to our critics that after years of stagnation and inflation, our economy, thanks to the basic changes we've made, is beginning to move again. We're witnessing the first phase of lasting economic growth.

We must work together to keep what Howard has called ``that inflation beast locked in its cage.'' And the most important question we must ask in next year's election is: Do we continue the responsible policies that are giving our economy new vitality and giving our people hope, or do we go back to the failed ideas of tax, spend, and inflate that brought us stagnation and despair?

Each and every Senate race will be crucial. And the Republican Majority Fund we contribute to this evening will give us a fighting chance to protect the gains we've made. But the special interests, groups that profited from big government, from high taxes and high inflation, will be out in force. As for me, I'm confident. When we got here, inflation had been running at double digits for 2 years. The prime interest rate had soared to its highest level, 21\1/2\ percent, in more than a hundred years. Taxes had doubled in just the 5 years between 1976 and 1981, siphoning off resources needed for savings, job-creating business investment growth, and economic development.

Our system is based on faith in the people, and I have faith that they will not vote to return to the failed policies of the past. Our biggest job is to remind them what things were like, how we turned that desperate situation around, and just as important, the crucial difference between our efforts and vision for the future and theirs. We offer solid progress and real hope, not fear, envy, and failure. We will not be on the defensive as we move into the 1980 elections -- or '84 elections. On the contrary, Republicans will be on the offensive. We're the party that lowered tax rates, reduced inflation, and put the American economy back on the path to real growth.

And something else we're not going to let the people forget: Three years ago our allies and adversaries alike were counting America out. It was being said that our best days were behind us. Morale in our Armed Forces was at a low ebb, and the weapons and equipment they had to use were wearing out. We had planes that couldn't fly and ships that couldn't sail. Well, we've turned that situation around, too. We're ending the Vietnam syndrome that had broken the will of the American people. And today we've established ourselves as a reliable ally, and we're rebuilding our defensive capabilities.

The number of combat-ready units has gone up by a third since 1980, and that means they have improved their chances of never having to be in combat. Our Navy's fleets have risen from 480 ships to 510, that we have today, and it's on the way to 600. And military officers tell me that morale in our services has never been higher.

We strengthened America's capabilities, and we've strengthened America's resolve to meet our responsibilities in the world. The likelihood of peace is not enhanced by weakness or gestures of good will to tyrants. Peace and the preservation of our freedom is not more likely if we put our head in the sand and run away from our responsibilities. The peace of the world and the freedom of the United States instead depend on hard work, courage, and strength.

Now, this is not just my philosophy. This is Republican philosophy. And it's a philosophy that the voters of the United States will back up when they're given the chance.

Howard has told us that one of the reasons he's taking a sabbatical from government is that he needs time to get reacquainted with the people of the United States. Well, I think he's going to find out they're the same people they always were, the kind of people who took a vast wilderness and turned it into this blessed land of liberty and abundance. They had courage, faith in God, and a willingness to roll up their sleeves and get on with the job at hand.

John Foster Dulles once said, ``If only we're faithful to our past, we shall not have to fear for our future.'' Well, that's our challenge, and I'm certain that like those before us, we'll do the job that has to be done.

What we need to look forward to and dream on is after 50 years, with only a brief interlude, with us there, able to really make the policy that fits our Republican philosophy, what it can be and what can happen for the world and this nation if we can one day in the very near future have not just one House but have the Congress and the executive branch and the bureaus and agencies and departments carrying out the philosophy that you and I have believed in for so long.

Note: The President spoke at 8:54 p.m. in the Regency Ballroom at the Hyatt Regency Hotel.