Americans are always thrilled to come to this city, and believe me, for a midwesterner from a small town in Illinois, the sidewalks of New York still evoke that sense of romance and excitement that is unique to this city and this State.

Now, whether it's that towering lady out there in the harbor, or the memory of your first Catholic Governor, Al Smith, New York City and New York State symbolize America -- its togetherness, its openness, its opportunity, its hope.

And like so many other Americans, I was thrilled a few weeks ago by the sights at Archbishop O'Connor's installation at St. Patrick's Cathedral -- the rabbis standing there in the front pews, the Greek Orthodox bishop approaching the altar, St. Thomas Episcopal Church holding hundreds who watched the proceedings on a video screen, and that homily of welcome and humor and love from Archbishop O'Connor.

I've been accused of liking a good story, but I really did love the one the Archbishop told about the second-grader who wrote him and asked if he held down a job before this one. [Laughter] The same young man also wanted to know if the Archbishop had any children. [Laughter] Well, he's spoken to that tonight. I think we're aware that he does -- the thousands and thousands of children who are in the schools that bring us to this gathering here tonight.

But who can forget the substance of your new Archbishop's sermon? How many fewer accounts of violence, heartbreak, and tragedy would there be, especially in places like the Mideast, if all the people of the world could take his words to heart? How valid, how meaningful those words are for this season of Lent, this time of reflection and renewal.

``Whether or not you are of my religious faith or my moral convictions,'' Archbishop O'Connor said, ``whether you accept the teaching of the Church or reject it on any issue, I see you as sacred persons to be loved, persons of priceless dignity and worth.''

Your Excellency, I know how excited you are about your new work here in the Archdiocese of New York, and with a beginning like that, I can't help but think your success here is assured. You have the prayerful best wishes of all of us here tonight and of all America. But, Your Excellency, just one word of advice about living here in New York. Be careful what you say around Mayor Koch -- [laughter] -- I know I am. [Laughter] I learned this morning he's working on another book. And if the mayor would permit me, I'd like to mention that in the city of Scranton, Pennsylvania, where Archibishop O'Connor previously served, Mayor James Barrett McNulty, who's no amateur himself, called the Archbishop the ``best politician I've ever seen.'' [Laughter] So, I intend to warn the mayor to be careful, too. [Laughter]

But I want, honestly, all of you to know I really was a little nervous about speaking to you here tonight, especially on issues like education. When I look around this room and see the distinguished members of the hierarchy and many prominent educators, not to mention you parents who've given so much time and effort to improving Catholic schools, I have to think of a story that kind of fits the position that I'm in tonight, and particularly having to follow the Archbishop up here at this podium.

There was a fellow who, for very many years, had been quite a celebrity in his end of the country up in Pennsylvania, because he was in great demand as a speaker -- he was the last living survivor of the Johnstown flood. And so in telling and retelling his adventures, as I say, he was in great demand. Finally, however, the day came when he passed on to a better life and wasn't in heaven very long before St. Peter told him that newcomers there were expected to sort of bring the others there up-to-date on what was going on. And he said, ``Oh, that's great,'' and he told them about what he'd been doing on Earth.

So he said, ``Yes, I'd be very happy to.'' Well, St. Peter put the group together, and he said, ``I'm sure they'll be interested in what you have to say.'' And then as he introduced him, and as the man stepped toward the lectern, St. Peter just quietly said to him, ``That fellow second from the aisle in the front row is named Noah.'' [Laughter]

But actually, the fact that so many of you are activists for education is not a reason for concern, but for pride. Not long ago, opinion polls showed the confidence of average Americans for our governmental institutions had declined to new lows. Many Americans simply believed that government belonged now to politicians and bureaucrats, not to the people. Well, there was a reason for this. After years of listening to the bromides and aphorisms of liberal government, the people felt they'd been had. Federal spending had skyrocketed -- it tripled in the seventies -- and taxation doubled between 1976 and 1981. Yet far from solving anything, all this government only made our problems worse. It fueled inflation, it drained energy and wealth from the private sector, it halted economic growth, and it eventually put millions out of work.

But at the root of this spend-and-spend, and tax-and-tax, and borrow-and-borrow philosophy was the belief that solving our social problems was simply a matter of allocating resources rather than exerting moral leadership. There were those who thought, and still do, that by changing man's material environment we could perfect human nature and usher in a brave new world. So they favored gigantic government programs and social engineering schemes run by a tiny elite of experts. And that's why they frequently saw traditional values like family, work, neighborhood, religion, as obstacles. In their view, the solutions to America's problems were no longer in her homes, her churches, her schools, or her work places, but in a bureaucrat's budget and a social worker's files.

Much of this was well intentioned. In fact, a book about what liberalism did to even this great city of New York was called just that: ``The Cost of Good Intentions.'' Well today, under the courageous leadership of Mayor Koch, New Yorkers have brought their city back from bankruptcy and disorder. I think you can be proud of that, and you can be proud of your mayor. I bet he wishes now he was here. [Laughter]

But on the national level, the fight goes on. One example is the question of tuition tax credits. As you know, we've submitted a bill to the Congress that would make such credits available to parents like yourselves. And the bill that we proposed does not violate the separation of church and state. And it's certainly no threat to public education. What it would do is give hard-working Catholic and other private school parents a break, while increasing diversity and excellence in both public and private schools. And I want to compliment you on your efforts in the past for this bill and pledge again my strongest efforts on its behalf.

I quoted from a Scottish ballad when we were defeated on that. The ballad goes, ``I am wounded, but I am not slain. I will rest a bit and fight again.'' Together, we can uphold and reinforce the basic right of all parents to educate their children in the way that best meets their children's needs.

But opposition to tuition tax credits isn't the only roadblock those in Washington have put in our way. They also managed during the past generation to construct a tax system that excessively burdens the family and actually discriminates against those traditional family values. For example, the dependency exemption on your income tax -- the money you can deduct for raising a child or caring for an elderly relative -- was $600 in the late forties. That has been increased to $1,000 now. But if that deduction had been indexed to keep pace with inflation, today you would be deducting more than $3,000 for every one of your children. So, you can see that in the very time that the cost of raising a family has gone up, the tax treatment of families has actually worsened. Is it any wonder that American parents feel so much financial pressure today and that such pressure sometimes contributes to family breakups?

I want you to know I've told the Treasury Department to come up with recommendations to make your taxes more simple, fair for families and for all Americans, and to increase incentives for economic growth by broadening the base and bringing your income tax rates down, not up.

On this issue of tax fairness for families, or other issues like the prayer amendment, stricter laws against the criminals that prey on our young people, greater discipline in our schools, and our pro-life amendment, there is more at stake here than just one administration's political agenda. Our goal is to make this nation's traditional values a reality in our daily life.

When I visited His Holiness Pope John Paul II in Rome -- and I'm pleased to say I will have the privilege of visiting with him soon again when our paths cross in Alaska -- he spoke about the importance of these values. He said it was his profound hope ``that the entire structure of American life will rest ever more securely on the strong foundation of moral and spiritual values. Without the fostering and defense of these values,'' he said, ``all human advancement is stunted and the dignity of the human person is endangered.''

Respect for the dignity of life, concern for our fellow man, extraordinary acts of charity and mercy -- this is our heritage as Americans. And how profoundly this heritage has been enriched by the Catholic experience here in New York.

There are so many examples that come to mind. In my State of the Union Message I mentioned a man known to many of you, the guardian of homeless youth in Times Square, Father Bruce Ritter, who has saved so many young, formerly lost lives at Covenant House. I know that Father Ritter and all who want to see stronger efforts to combat child abduction and child exploitation will be pleased to learn some good news: Within a week, the Justice Department will sign a $3.3 million grant to create the National Center for Missing and Exploited Children. This Center will help educate parents to prevent abductions and runaways, assist parents whose children are missing, and give technical assistance to local law enforcement agencies in their efforts to find missing children. Let's win these children back.

Or, I wonder how many of you remember the daughter of one of America's most famous novelists, a young woman who came from New England to New York before the turn of the century? Her beauty, her own literary skill, and that of her husband's, made the young couple the toast of society here. But with the death of an infant son and the unavoidable breakup of her marriage, tragedy struck. The young woman, a convert to Catholicism, sought again the meaning and purpose of life, and somehow she found herself on Cherry Street in lower Manhattan. And from that little dilapidated house in New York's slums grew a nursing order of Dominican nuns with hospitals throughout the United States. For cancer patients, shunned in those days like the lepers of another age, the odyssey of Nathaniel Hawthorne's beautiful daughter, Rose Hawthorne Lathrop, would become a blessing beyond all description. Hundreds, then thousands, would find treatment and solace and hope, and they were welcome whether they could afford it or not.

The work of Mother Alphonsa of the Hawthorne Dominicans goes on today in two hospitals here in this State and five other hospitals in other States. It's a perfect example of how ``sorrow built a bridge into the infinite,'' of how generous and giving have been the hearts of New York Catholics. It's been a tradition carried right up until our own time. Rarely has the world seen a more magnificent display of the cardinal virtues of faith, hope, and charity than in the manner in which your own beloved Terence Cardinal Cooke met death last year. It was a fitting and inspiring climax to a life of holiness and service to others.

And tonight, ladies and gentlemen, it is my privilege to present posthumously the Nation's highest civilian award, the Medal of Freedom, to Terence Cardinal Cooke. Accepting the medal for Cardinal Cooke will be Archbishop O'Connor.

Thank you for having me as your guest tonight. I know of no better way to close than by reading this inscription.

[At this point, the President read the citation which accompanied the medal. The text of the citation follows:]

A saintly man and a great spiritual leader, Terence Cardinal Cooke inspired his countrymen with his dedication to his Church, devotion to his flock, and service to his country. As the Military Vicar to our Nation's Armed Forces, Cardinal Cooke worked tirelessly on behalf of those who serve their country in uniform. As a patriot and national leader, he preached the love of country and championed the cause of human freedom. He will live in the memory of his countrymen as a man of compassion, courage, and personal holiness.

Note: The President spoke at 8:32 p.m. in the Grand Ballroom at the New York Hilton Hotel in New York City.

Following his remarks at the dinner, the President returned to Washington, DC.