I'd like to address your theme of bipartisanship with a view toward America's foreign policy -- the challenges for the eighties.

All Americans share two great goals for foreign policy: a safer world, and a world in which individual rights can be respected and precious values may flourish. These goals are at the heart of America's traditional idealism and our aspirations for world peace. Yet, while cherished by us, they do not belong exclusively to us. They're not made in America. They're shared by people everywhere.

Tragically, the world in which these fundamental goals are so widely shared is a very troubled world. While we and our allies may enjoy peace and prosperity, many citizens of the industrial world continue to live in fear of conflict and the threat of nuclear war. And all around the globe terrorists threaten innocent people and civilized values. And in developing countries, the dreams of human progress have too often been lost to violent revolution and dictatorship.

Quite obviously the widespread desire for a safer and more humane world is, by itself, not enough to create such a world. In pursuing our worthy goals, we must go beyond honorable intentions and good will to practical means.

We must be guided by these key principles:

Realism -- the world is not as we wish it would be. Reality is often harsh. We will not make it less so, if we do not first see it for what it is.

Strength -- we know that strength alone is not enough, but without it there can be no effective diplomacy and negotiations, no secure democracy and peace. Conversely, weakness or hopeful passivity are only self-defeating. They invite the very aggression and instability that they would seek to avoid.

Now, economic growth -- this is the underlying base that ensures our strength and permits human potential to flourish. Neither strength nor creativity can be achieved or sustained without economic growth, both at home and abroad.

Intelligence -- our policies cannot be effective unless the information on which they're based is accurate, timely, and complete.

Shared responsibility with allies -- our friends and allies share the heavy responsibility for the protection of freedom. We seek and need their partnership, sharing burdens in pursuit of our common goals.

Nonaggression -- we have no territorial ambitions. We occupy no foreign lands. We build our strength only to assure deterrence and to secure our interests if deterrence fails.

Dialog with adversaries -- though we must be honest in recognizing fundamental differences with our adversaries, we must always be willing to resolve these differences by peaceful means.

Bipartisanship at home -- in our two-party democracy, an effective foreign policy must begin with bipartisanship, and the sharing of responsibility for a safer and more humane world must begin at home.

During the past 3 years, we've been steadily rebuilding America's capacity to advance our foreign policy goals through renewed attention to these vital principles. Many threats remain, and peace may still seem precarious. But America is safer and more secure today because the people of this great nation have restored the foundation of its strength.

We began with renewed realism, a clear-eyed understanding of the world we live in and of our inescapable global responsibilities. Our industries depend on the importation of energy and minerals from distant lands. Our prosperity requires a sound international financial system and free and open trading markets. And our security is inseparable from the security of our friends and neighbors.

I believe Americans today see the world with realism and maturity. The great majority of our people do not believe the stark differences between democracy and totalitarianism can be wished away. They understand that keeping America secure begins with keeping America strong and free.

When we took office in 1981, the Soviet Union had been engaged for 20 years in the most massive military buildup in history. Clearly, their goal was not to catch us, but to surpass us. Yet the United States remained a virtual spectator in the 1970's, a decade of neglect that took a severe toll on our defense capabilities.

With bipartisan support, we embarked immediately on a major defense rebuilding program. We've made good progress in restoring the morale of our men and women in uniform, restocking spare parts and ammunition, replacing obsolescent equipment and facilities, improving basic training and readiness, and pushing forward with long overdue weapons programs.

The simple fact is that in the last half of the 1970's, we were not deterring, as events from Angola to Afghanistan made clear. Today we are. And that fact has fundamentally altered the future for millions of human beings. Gone are the days when the United States was perceived as a rudderless superpower, a helpless hostage to world events. American leadership is back. Peace through strength is not a slogan. It's a fact of life. And we will not return to the days of handwringing, defeatism, decline, and despair.

We have also upgraded significantly our intelligence capabilities, restoring morale in the intelligence agencies and increasing our capability to detect, analyze, and counter hostile intelligence threats.

Economic strength, the underlying base of support for our defense buildup, has received a dramatic new boost. We've transformed a no-growth economy, crippled by disincentives, double-digit inflation, 21\1/2\-percent interest rates, plunging productivity, and a weak dollar, into a dynamic growth economy bolstered by new incentives, stable prices, lower interest rates, a rebirth of productivity, and restored our confidence in our currency.

Renewed strength at home has been accompanied by closer partnerships with America's friends and allies. Far from buckling under Soviet intimidation, the unity of the NATO alliance has held firm, and we're moving forward to modernize our strategic deterrent. The leader of America's oldest ally, French President Francois Mitterrand, recently reminded us that peace, like liberty, is never given. The pursuit of both is a continual one. In the turbulent times we live in, solidarity among friends is essential.

Our principles don't involve just rebuilding our strength; they also tell us how to use it. We remain true to the principle of nonaggression. On an occasion when the United States, at the request of its neighbors, did use force in Grenada, we acted decisively, but only after it was clear a bloodthirsty regime had put American and Grenadian lives in danger, and the security of neighboring islands in danger. As soon as stability and freedom were restored in the island, we left. The Soviet Union had no such legitimate justification for its massive invasion of Afghanistan 4 years ago. And today, over a hundred thousand occupation troops remain there. The United States, by stark contrast, occupies no foreign nation, nor do we seek to.

Though we and the Soviet Union differ markedly, living in this nuclear age makes it imperative that we talk with each other. If the new Soviet leadership truly is devoted to building a safer and more humane world, rather than expanding armed conquests, it will find a sympathetic partner in the West.

In pursuing these practical principles, we have throughout sought to revive the spirit that was once the hallmark of our postwar foreign policy: bipartisan cooperation between the executive and legislative branches of our government.

Much has been accomplished, but much remains to be done. If Republicans and Democrats will join together to confront four great challenges to American foreign policy in the eighties, then we can and will make great strides toward a safer and more humane world.

Challenge number one is to reduce the risk of nuclear war and to reduce the levels of nuclear armaments in a way that also reduces the risk they will ever be used. We have no higher challenge, for a nuclear war cannot be won and must never be fought. But merely to be against nuclear war is not enough to prevent it.

For 35 years the defense policy of the United States and her NATO allies has been based on one simple premise: We do not start wars; we maintain our conventional and strategic strength to deter aggression by convincing any potential aggressor that war could bring no benefit, only disaster. Deterrence has been and will remain the cornerstone of our national security policy to defend freedom and preserve peace.

But as I mentioned, the 1970's were marked by neglect of our defenses, and nuclear safety was no exception. Too many forgot John Kennedy's warning that only when our arms are certain beyond doubt can we be certain beyond doubt they will never be used. By the beginning of this decade, we face three growing problems: the Soviet SS - 20 monopoly in Europe and Asia; the vulnerability of our land-based ICBM, the entire force; and the failure of arms control agreements to slow the overall growth in strategic weapons. The Carter administration acknowledged these problems. In fact, almost everyone did.

There is a widespread, but mistaken, impression that arms agreements automatically produce arms control. In 1969, when SALT I negotiations began, the Soviet Union had about 1,500 strategic nuclear weapons. Today the Soviet nuclear arsenal can grow to over 15,000 nuclear weapons and still stay within all past arms control agreements, including the SALT I and SALT II guidelines.

The practical means for reducing the risks of nuclear war must, therefore, follow two parallel paths -- credible deterrence and real arms reductions with effective verification. It is on this basis that we've responded to the problems I just described. This is why we've moved forward to implement NATO's dual-track decision of 1979. While actually reducing the number of nuclear weapons in Europe, it is also why we have sought bipartisan support for the recommendations of the Scowcroft commission and the builddown concept and why we've proposed deep reductions in strategic forces at the strategic arms reduction talks.

Without exception, every arms control proposal that we have offered would reverse the arms buildup and help bring a more stable balance at lower force levels. At the START talks, we seek to reduce substantially the number of ballistic missile warheads, reduce the destructive capacity of nuclear missiles, and establish limits on bombers and cruise missiles, below the levels of SALT II. At the talks on intermediate-range nuclear forces, our negotiators have tabled four initiatives to address Soviet concerns and improve prospects for a fair and equitable agreement that would reduce or eliminate an entire class of such nuclear weapons. Our flexibility in the START and INF negotiations has been demonstrated by numerous modifications to our positions. But they have been met only by the silence of Soviet walkouts.

At the mutual and balanced force reduction talks in Vienna, we and our NATO partners presented a treaty that would reduce conventional forces to parity at lower levels. To reduce the risks of war in time of crisis, we have proposed to the Soviet Union important measures to improve direct communications and increase mutual confidence. And just recently, I directed Vice President Bush to go to the Conference [Committee] on Disarmament in Geneva to present a new American initiative, a worldwide ban on the production, possession, and use of chemical weapons.

Our strategic policy represents a careful response to a nuclear agenda upon which even our critics agreed. Many who would break the bonds of partisanship, claiming they know how to bring greater security, seem to ignore the likely consequences of their own proposals.

Those who wanted a last-minute moratorium on INF deployment would have betrayed our allies and reduced the chances for a safer Europe. Those who would try to implement a unilateral freeze would find it unverifiable and destabilizing, because it would prevent restoration of a stable balance that keeps the peace. And those who would advocate unilateral cancellation of the Peacekeeper missile would ignore a central recommendation of the bipartisan Scowcroft report and leave the Soviets with little incentive to negotiate meaningful reductions. Indeed, the Soviets would be rewarded for leaving the bargaining table.

These simplistic solutions and others put forward by our critics would take meaningful agreements and increased security much further from our grasp. Our critics can best help us move closer to the goals that we share by accepting practical means to achieve them. Granted, it's easy to support a strong defense. It's much harder to support a strong defense budget. And granted, it's easy to call for arms agreements. It's more difficult to support patient, firm, fair negotiations with those who want to see how much we will compromise with ourselves first. Bipartisanship can only work if both forces, both sides, face up to real world problems and meet them with real world solutions.

Our safety and security depend on more than credible deterrence and nuclear arms reductions. Constructive regional development is also essential. Therefore, one -- or our second great challenge is strengthening the basis for stability in troubled and strategically sensitive regions.

Regional tensions often begin in longstanding social, political, and economic inequities and in ethnic and religious disputes. But throughout the 1970's, increased Soviet support for terrorism, insurgency, and aggression coupled with the perception of weakening U.S. power and resolve greatly exacerbated these tensions.

The results were not surprising: the massacres of Kampuchea followed by the Vietnamese invasion, the Soviet invasion of Afghanistan, the rise of Iranian extremism and the holding of Americans hostage, Libyan coercion in Africa, Soviet and Cuban military involvement in Angola and Ethiopia, their subversion in Central America, and the rise of state-supported terrorism.

Taken together, these events defined a pattern of mounting instability and violence that the U.S. could not ignore. And we have not. As with defense, by the beginning of the eighties, there was an emerging consensus in this country that we had to go do better in dealing with problems that affect our vital interests.

Obviously, no single abstract policy could deal successfully with all problems or all regions. But as a general matter, effective, regional stabilization requires a balanced approach -- a mix of economic aid, security assistance, and diplomatic mediation -- tailored to the needs of each region.

It's also obvious that we alone cannot save embattled governments or control terrorism. But doing nothing only ensures far greater problems down the road. So, we strive to expand cooperation with states who support our common interests, to help friendly nations in danger, and to seize major opportunities for peacekeeping.

Perhaps the best example of this comprehensive approach is the report and recommendations of the National Bipartisan Commission on Central America. It is from this report that we drew our proposals for bringing peaceful development to Central America. They are now before the Congress and will be debated at length.

I welcome a debate, but if it's to be productive, we must put aside mythology and uninformed rhetoric. Some, for example, insist that the root of regional violence is poverty, but not communism. Well, three-fourths of our requests and of our current program is economic and humanitarian assistance. America is a good and generous nation, but economic aid alone cannot stop Cuban- and Soviet-inspired guerrillas determined to terrorize, burn, bomb, and destroy everything from bridges and industries to electric power and transportation. And neither individual rights nor economic health can be advanced if stability is not secured.

Other critics say that we shouldn't see the problems of this or any other region as an East-West struggle. Our policies in Central America and elsewhere are in fact designed precisely to keep East-West tensions from spreading, from intruding into the lives of nations that are struggling with great problems of their own.

Events in southern Africa are showing what persistent mediation and ability to talk to all sides can accomplish. The states of this region have been poised for war for decades, but there is new hope for peace. South Africa, Angola, and Mozambique are implementing agreements to break the cycle of violence. Our administration has been active in this process, and we'll stay involved, trying to bring an independent Namibia into being, end foreign military interference, and keep the region free from East-West conflict. I have hope that peace and democratic reform can be enjoyed by all the peoples of southern Africa.

In Central America we've also seen progress. El Salvador's Presidential election expresses that nation's desire to govern itself in peace. Yet the future of the region remains open. We have a choice. Either we help America's friends defend themselves and give democracy a chance, or we abandon our responsibilities and let the Soviet Union and Cuba shape the destiny of our hemisphere. If this happens, the East-West conflict will only become broader and much more dangerous.

In dealing with regional instability, we have to understand how it is related to other problems. Insecurity and regional violence are among the driving forces of nuclear proliferation. Peacekeeping in troubled regions and strengthening barriers to nuclear proliferation are two sides of the same coin. Stability and safeguards go together.

Now, no one says this approach is cheap, quick, or easy. But the cost of this commitment is bargain-basement compared to the tremendous sacrifices that we will have to make if we do nothing, or do too little. The Kissinger commission warned that an outbreak of Cuban-type regimes in Central America will bring subversion closer to our own borders, and the specter of millions of uprooted refugees fleeing in desperation to the north.

In the Middle East, which has so rarely known peace, we seek a similar mix of economic aid, diplomatic mediation, and military assistance and cooperation. These will, we believe, make the use of U.S. forces unnecessary and make the risk of East-West conflict less. But, given the importance of the region, we must also be ready to act when the presence of American power and that of our friends can help stop the spread of violence. I have said, for example, that we'll keep open the Straits of Hormuz, the vital lifeline through which so much oil flows to the United States and other industrial democracies. Making this clear beforehand and making it credible makes a crisis much less likely.

We must work with quiet persistence and without illusions. We may suffer setbacks, but we mustn't jump to the conclusion that we can defend our interests without ever committing ourselves. Nor should other nations believe that mere setbacks will turn America inward again. We know our responsibilities, and we must live up to them.

Because effective regional problemsolving requires a balanced and sustained approach, it is essential that the Congress give full, not piecemeal, support. Indeed, where we have foundered in regional stabilization, it has been because the Congress has failed to provide such support. Halfway measures, refusing to take responsibility for means, produce the worst possible results. I'll return to this point when I discuss the fourth challenge in just a few minutes.

Expanding opportunities for economic development and personal freedom is our third great challenge. The American concept of peace is more than absence of war. We favor the flowering of economic growth and individual liberty in a world of peace. And this, too, is a goal to which most Americans subscribe. Our political leaders must be judged by whether the means they offer will help us to reach it.

Our belief in individual freedom and opportunity is rooted in practical experience. Free people build free markets that ignite dynamic development for everyone. And in America, incentives, risktaking, and entrepreneurship are reawakening the spirit of capitalism and strengthening economic expansion and human progress throughout the world. Our goal has always been to restore and sustain noninflationary worldwide growth, thereby ending for good the stagflation of the 1970's, which saw a drastic weakening of the fabric of the world economy.

We take our leadership responsibilities seriously, but we alone cannot put the world's economic house in order. At Williamsburg, the industrial countries consolidated their views on economic policy. The proof is not in the communique; it's in the results. France is reducing inflation and seeking greater flexibility in its economy. Japan is slowly, to be sure, but steadily, we will insist, liberalizing its trade and capital markets. Germany and the United Kingdom are moving forward on a steady course of low inflation and moderate, sustained growth.

Just as we believe that incentives are key to greater growth in America and throughout the world, so, too, must we resist the sugar-coated poison of protectionism everywhere it exists. Here at home we're opposing inflationary, self-defeating bills like domestic content. At the London economic summit in June, I hope that we can lay the groundwork for a new round of negotiations that will open markets for our exports of goods and services and stimulate greater growth, efficiency, and jobs for all.

And we're advancing other key initiatives to promote more powerful worldwide growth by expanding trade and investment relationships. The dynamic growth of Pacific Basin nations has made them the fastest growing markets for our goods, services, and capital. Last year I visited Japan and Korea -- two of America's most important allies -- to forge closer partnerships. And this month I will visit the People's Republic of China, another of the increasingly significant relationships that we hold in the Pacific. I see America and our Pacific neighbors as nations of the future going forward together in a mighty enterprise to build dynamic growth economies and a safer world.

We're helping developing countries grow by presenting a fresh view of development -- the magic of the marketplace -- to spark greater growth and participation in the international economy. Developing nations earn twice as much from exports to the United States as they received in aid from all the other nations combined.

And practical proposals like the Caribbean Basin Initiative will strengthen the private sectors of some 20 sectors -- or I should say, 20 Caribbean neighbors, while guaranteeing fairer treatment for U.S. companies and nationals and increasing demand for American exports.

We've recently sent to the Congress a new economic policy initiative for Africa. And it, too, is designed to support the growth of private enterprise in African countries by encouraging structural economic change in international trade. We've also asked the Congress to increase humanitarian assistance to Africa to combat the devastating effects of extreme drought.

In building a strong global recovery, of course, nothing is more important than to keep the wheels of world commerce turning and create jobs without renewing the spiral of inflation. The International Monetary Fund is a linchpin in our efforts to restore a sound world economy, resolve the debt problems of many developing countries. With bipartisan support, we implemented a major increase in IMF resources. In cooperation with the IMF, we're working to prevent the problems of individual debtor nations from disrupting the stability and strength of the entire international financial system. It was this goal that brought nations of north and south together to help resolve the debt difficulties of the new democratic Government of Argentina.

Because we know that democratic governments are the best guarantors of human rights, and that economic growth will always flourish when men and women are free, we seek to promote not just material products but the values of faith and human dignity for which America and all democratic nations stand -- values which embody the culmination of 5,000 years of Western civilization.

When I addressed the British Parliament in June of 1982, I called for a bold and lasting effort to assist people struggling for human rights. We've established the National Endowment for Democracy, a partnership of people from all walks of life dedicated to spreading the positive message of democracy. To succeed we must oppose the double speak of totalitarian propaganda. And so, we're modernizing the Voice of America and our other broadcasting facilities, and we're working to start up Radio Marti, a voice of truth to the imprisoned people of Cuba.

Americans have always wanted to see the spread of democratic institutions, and that goal is coming closer. In our own hemisphere, 26 countries of Latin America and the Caribbean are either democracies or formally embarked on a democratic transition. This represents 90 percent of the region's population, up from under 50 percent a decade ago.

Trust the people -- this is the crucial lesson of history and America's message to the world. We must be staunch in our conviction that freedom is not the sole possession of a chosen few, but the universal right of men and women everywhere.

President Truman said, ``If we should pay merely lip service to inspiring ideals, and later do violence to simple justice, we would draw down upon us the bitter wrath of generations yet unborn.'' Well, let us go forward together, faithful friends of democracy and democratic values, confident in our conviction that the tide of the future is a freedom tide. But let us go forward with practical means.

This brings me to our fourth great challenge. We must restore bipartisan consensus in support of U.S. foreign policy. We must restore America's honorable tradition of partisan politics stopping at the water's edge, Republicans and Democrats standing united in patriotism and speaking with one voice as responsible trustees for peace, democracy, individual liberty, and the rule of law.

In the 1970's we saw a rash of congressional initiatives to limit the President's authority in the areas of trade, human rights, arms sales, foreign assistance, intelligence operations, and the dispatch of troops in time of crisis. Over a hundred separate prohibitions and restrictions on executive branch authority to formulate and implement foreign policy were enacted.

The most far-reaching consequence of the past decade's congressional activism is this: Bipartisan consensus-building has become a central responsibility of congressional leadership as well as of executive leadership. If we're to have a sustainable foreign policy, the Congress must support the practical details of policy, not just the general goals.

We have demonstrated the capacity for such jointly responsible leadership in certain areas, but we've seen setbacks for bipartisanship, too. I believe that once we established bipartisan agreement on our course in Lebanon, the subsequent second-guessing about whether we ought to keep our men there severely undermined our policy. It hindered the ability of our diplomats to negotiate, encouraged more intransigence from the Syrians, and prolonged the violence. Similarly, congressional wavering on support for the Jackson plan, which reflects the recommendations of the National Bipartisan Commission on Central America, can only encourage the enemies of democracy who are determined to wear us down.

To understand and solve this problem -- this problem of joint responsibility -- we have to go beyond the familiar questions as to who should be stronger, the President or the Congress. The more basic problem is, in this post-Vietnam era, Congress has not yet developed capacities for coherent, responsible action needed to carry out the new foreign policy powers it has taken for itself. To meet the challenges of this decade, we need a strong President and a strong Congress.

Unfortunately, many in the Congress seem to believe they're still in the troubled Vietnam era, with their only task to be vocal critics and not responsible partners in developing positive, practical programs to solve real problems.

Much was learned from Vietnam -- lessons ranging from increased appreciation of the need for careful discrimination in the use of U.S. force or military assistance, to increased appreciation of the need for domestic support for any such military element or policy. Military force, either direct or indirect, must remain an available part of America's foreign policy. But clearly the Congress is less than wholly comfortable with both the need for a military element in foreign policy and its own responsibility to deal with that element.

Presidents must recognize Congress as a more significant partner in foreign policymaking and, as we've tried to do, seek new means to reach bipartisan executive-legislative consensus. But legislators must realize that they, too, are partners. They have a responsibility to go beyond mere criticism to consensus-building that will produce positive, practical, and effective action.

Bipartisan consensus is not an end in itself. Sound and experienced U.S. foreign policy leadership must always reflect a deep understanding of fundamental American interests, values, and principles. Consensus on the broad goals of a safer and more humane world is easy to achieve. The harder part is making progress in developing concrete, realistic means to reach these goals. We've made some progress, but there is still a congressional reluctance to assume responsibility for positive bipartisan action to go with their newly claimed powers.

We've set excellent examples with the bipartisan Scowcroft commission, bipartisan support for IMF funding, and the bipartisan work of the Kissinger commission. But it's time to lift our efforts to a higher level of cooperation, time to meet together with realism and idealism, America's great challenges for the eighties.

Distinguished ladies and gentlemen, we have the right to dream great dreams, the opportunity to strive for a world at peace enriched by human dignity, and the responsibility to work as partners so that we might leave these blessed gifts to our children and to our children's children.

We might remember the example of a legislator who lived in a particularly turbulent era, Henry Clay. Abraham Lincoln called him ``my beau ideal of a statesman.'' He knew Clay's loftiness of spirit and vision, never lost sight of his country's interest, and, election year or not, Clay would set love of country above all political considerations.

The stakes for America, for peace, and for freedom demand every bit as much from us in 1984 and beyond. This is our challenge.

I can't leave without a little lighter note that maybe points to some of the intricacies of diplomacy and how seemingly small they can be. I just, in leaving, want to give you a little experience that occurred and could have been a diplomatic crisis at the recent state dinner for President Mitterrand.

Nancy and the President started toward their table in the dining room with everyone standing around their tables waiting for us. Mrs. Mitterrand and I started through the tables, the butler leading us through the people. And suddenly Mrs. Mitterrand stopped and she calmly turned her head and said something to me in French, which, unfortunately, I did not understand. [Laughter] And the butler was motioning for us to come on, and I motioned to her that we should go forward, that we were to go to the other side of the room. And, again, very calmly she made her statement to me. And then the interpreter caught up with us. She was telling me that I was standing on her gown. [Laughter]

Thank you all, and God bless you.

Note: The President spoke at 9:57 a.m. at the International Club.