Steve Forbes - president and CEO, Forbes Inc.; editor-in-chief, Forbes Magazine; chairman, Forbes Inc. American Heritage Division; honorary chairman, Americans for Hope, Growth and Opportunity; founding editor, Business Today; B.A., Princeton University.

 I am delighted to be here tonight to see so many friends. The reason, of course, is very simple. I think that all of us know this meeting comes at a time, at a critical juncture, not only of American history, but indeed, of world history. Decisions will be made in the next few months and the next few years that will have a profound impact not only on us but on future generations.

All of us recognize that never before in global history has a nation occupied the position the United States does today. Never before in history has a nation been so dominant and powerful as the United States is today. Not even the Roman Empire, at the height of its imperial grandeur, could match the power and global influence of America at this time. And whether peoples around the world admit it or not, they are looking to the United States for a model, for an example, of how free people can move ahead in changing times and circumstances.

What our Founding Fathers could only imagine in their wildest dreams can now take place, and that is a world where American values, democracy, freedom, rule of law, religion and individual opportunity can sink real roots in once barren and hostile soil. And so the question before us is very profound and simple: Can we realize the opportunities that are now before us or will we be damned by future generations as an era of missed opportunities?

After the 1994 elections, for a brief moment, it looked as if statism and big-government liberalism would go the way of the Soviet Union, would collapse like the Berlin Wall. But instead, the reactionary forces of big government liberalism are fighting back, whether it's stealing our language, using the courts, using the regulatory routes, or using nice-sounding phrases like "child care," continuously to advance their agenda. Not all at once, but slice by slice. The Republican response has been, to put it charitably, disheartening. It's been one of confusion, easy compromise if not downright defeat.

A sad example, as you well know, is something they still ballyhoo today: the tax and budget agreement of last summer. Now, here we have a moment where the tax burden on American families has never been heavier than it is today. That is, the percentage of income now going to the federal government from America's families is at the highest level it's been in American history. Not even in World War II did the federal government take as much from the American people as a percent of their income as they do today. And so what was the response of Washington?

Well, they came up with a tax cut. They call it a tax cut. But at the end of the day it equaled only one penny on the dollar. Less than a penny, as a matter of fact. And look what they did to give us one cent: 260 new sections of the tax code, 824 amendments to other sections of the tax code, 117,000 new words to the tax code, half a dozen different capital gains tax rates, and so many ins and outs, phase-ins, ceilings and floors for various new tax credits that hundreds of thousands of middle-income Americans are going to find themselves hit by something that was once thought to hit only the super rich in exotic tax shelters - the alternative minimum tax.

Millions of families won't get the promised relief because of the convolutions and distortions of the tax code.

Some real-life examples. We wrote about it in Forbes Magazine. A single mother, divorced in Ohio, with four children. Her income: a little over $50,000 a year. Will she be able to take advantage of these new child tax credits? No. Because the way the code is written she is seen as taking too many tax deductions. As a matter of fact, at the end of the day her tax bill could go up $1,200!

A couple in Louisiana, several children, both work. The wife had a chance to have a big raise, go on to a higher-paying sales job. But she was smart. She knew how Washington works. So she asked an accountant, "What would be the impact of our higher income?" And they discovered it would end up costing them money if she took that higher-paying job. This is what they gave us. And it gets worse.

In Medicare, as the nation is beginning to discover, as of January 1 it is now illegal in the United States of American for a senior citizen to be treated on a private basis. That is, if a doctor treats a person 65 or older outside of Medicare, that doctor must attest in writing to Washington, D.C., that he or she will not treat a Medicare patient for the next two years.

Now, how many doctors can give up Medicare patients and still stay in practice? Even Great Britain, which invented socialized medicine, gives you a choice between the national system and your own private arrangements. For millions of senior citizens in America, that is now an illegal act.

And we're unfortunately seeing it unfold in other ways. One example is the International Monetary Fund. The first principle of medicine is, "Don't harm the patient." But unfortunately, this agency, in cahoots with our Treasury Department, has been practicing economics the way doctors practiced medicine 200 years ago. When you got sick 200 years ago, doctors would bleed you. That, of course, got rid of the pain and suffering because it got rid of the patient.

And yet, with our connivance, the International Monetary Fund has been telling countries to do the equivalent of slicing their wrists. Devaluations are a disaster. They unleash terrible inflations, destroy people's savings, cut their wages by a third to a half - in fact, I read an article today saying for devaluation to work you must reduce the standard of living by 35 percent. And this is what they're advocating.

Inflation has other effects too. It undermines a moral sense of order, because people suddenly see they've played by the rules but suddenly their life has turned upside-down. It fans racial and ethnic tensions, and it increases political instability. But it gets worse. At the same time, the IMF advocates increasing taxes, which is sort of like in a crisis telling a patient with pneumonia to go out and sit in the snow without a coat.

This Congress would be within its proper bounds to say no to more IMF authorizations. If a doctor is guilty of malpractice, you don't renew his license, and you don't increase his pay. Which is exactly what the administration is doing.

You may see it in other areas. Child care. Who can be against child care? Bill Clinton says he's for it. He doesn't tell you that there are now 340 programs in Washington designed to help the children. Our party has got to find its voice and say, "Hey, child care? Doesn't that involve parents?"

You see it, too, in all of this parading about a balanced budget. By the way Washington keeps its books, yes, the budget is balanced. But if you kept your books the way Washington did in your businesses, you would not be here tonight. Or, if you were, there'd be a parole officer standing back there.

They are still raiding things like the Social Security Trust Fund to the tune of more than $100 billion a year and counting it as operating revenue, which is sort of the equivalent of raiding your employees' pension funds and counting it as operating revenue.

 Just look at the numbers. Last year, the official budget deficit was $22 billion. What they don't tell you is that the national debt went up over $180 billion. In short, Washington is cooking the books. And getting away with it.

And so, when you look at these and other sad examples, you quickly realize that the GOP must once again learn that the purpose of power is not to hold power for the sake of holding power. Power truly is supposed to be the means to great and moral ends. In short, we must once again marry power with purpose or we don't deserve to be a party anymore.

Our party should once again take the enthusiasm of a Teddy Roosevelt, who talked about the pursuit of mighty things. We must learn once again that Rose Garden photo ops are no substitute for policies based on great principles.

We must re-engage. We must once again seize the high moral ground. And we must learn to set the terms of debate.

The American people know that we can't get everything done at once. They know that at the end of the day you may have to have a compromise. But why not treat the American people as adults and share with them what our principles are, what our philosophy is, and what our policies are?

The only way you build support is to advocate real and substantive change so people can see that you're willing to advocate good things and willing to spend real political capital to achieve those good things. If you don't, then you're going to get the kind of drift and dithering and indecision we have today.

If you go to Washington and make this point, that if you don't pursue the mighty things you can't change the political landscape, they'll invariably say, with that tired Beltway air, "You've got to be realistic. We have to preserve the majority. We must have high approval ratings. The focus groups might disapprove."

That is simply another way of saying "Beltway defeatism." A defeatism that perpetuates a bankrupt and corrupt status quo.

Can you change the political landscape by putting real principle on the table, advocating real reforms in a forthright and simple manner? The answer is yes. We have examples. For example, in 1996, welfare reform. Congress passed a welfare reform bill. What did President Clinton do? Vetoed it. Did we slink off like whipped dogs? No. Passed another one. He vetoed it again. We passed a third one. He looked at the polls, saw an election was coming up, decided he ought to sign it.

Another example. Partial birth abortion debate. Now, hard as it may be to believe today, a little over a year ago the experts thought that the Congress elected in 1996 would be less supportive of a ban of that form of infanticide than the previous Congress. But as soon as Mr. Fitzsimmons made his confessions, advocates of the ban occupied the high moral ground and set the terms of debate. Now there's more support than ever before, including a vast majority of Democrats. President Clinton's not even in tune with his own party on this issue. You can change the political landscape when you're willing to base your policies on true and tried principles.

This leads to something very important to understand. And that is, what has put us at this unique juncture? What events have come together to make it possible for Americans to achieve what our founders could only dream about more than 220 years ago?

One, of course, is the end of the Cold War. We still face a dangerous world, as the Saddam Husseins remind us each and every day. But as we leave this century, and for the first time in this century, we don't face the kind of mortal perils to our very existence that scarred so much of this century with two world wars, a Great Depression, and a 40-year Cold War. Never has a single power been as secure as we are today. That won't last forever, but it is a unique event in history.

At the same time, we're entering an economic era ready-made for America's traditional strengths: individualism and teamwork. This new era, is symbolized by the micro-chip, which you might say is extending the reach of the human brain the way machines extended the reach of human muscle during the industrial era.

For example, if you learn to drive a forklift, you can do more heavy lifting in a day than any Olympic weightlifter. You don't even have to grunt and sweat while you're doing it. You learn to drive a tractor, and you can do more physical labor in a day than a hundred Herculean plowmen could have done in a month in days of old. So, too, in this new era, the micro-chip and all of its offshoots provide an opportunity to make us all brighter, smarter, give us more control, more choices in our lives. Truly obliterate the physical bounds of geography.

When you say "technology," a lot of people fear, "Gee, if I'm not a geek, if I don't know programming, somehow I might get left behind."

No. One of the virtues - and America's shown it time and time again - of a free society with a free people is that you succeed most when you provide a product and service that people find simple and easy to use.

For example, you don't need to be an engineer to buy and drive an automobile. You don't have to know anything about aerodynamics to buy an airplane ticket and travel on an airplane, as I'm going to do tonight at some ungodly hour. And so, too, in this new era you don't have to know anything about MIPs or BIPs or LIPs, MITEs, or BYTEs to be able to participate in it.

An early example, of course, is the calculator. Thirty years ago calculators cost over a thousand dollars. Today the packaging costs more than the gizmo itself. It's like perfume, almost. I'm surprised they haven't had "designer" calculators yet to get those margins up.

But think about it. Even if you had trouble with math or arithmetic, which of course none of you did - that's known as "pandering" in politics - with a calculator, even if numbers are not your strong suit, they're now so simple and easy to use that all of us can now do, in a matter of seconds or minutes, the kind of mathematical computations it would have taken math wizards hours or days to do just forty or fifty years ago. And we now think it's the most natural thing in the world.

But there's another event happening in America. You sense it when you travel around our country. We seem to be on the cusp of an era of spiritual renewal, a reawakening, a realization that something has gone dreadfully wrong with the quality of life in America in the last 35 or 40 years. As we survey what marginalizing religion and morality have cost us in violent crime, out-of-wedlock births, drug use among the young, shattered families and other social ills, we're rediscovering once again what Ronald Reagan always knew, and that is the need for a moral foundation in our national life.

We are recognizing, once again, that man shall not live by bread alone. We are realizing that truly we are on this earth and in this land for a higher purpose. We've had these periods before in our history. It looks like we're having one again.

Just to give you an example to prove that this is not something unusual in America, that it's part of our tradition, all you have to do is go back to the 1820s. Back then, illegitimacy was rampant, alcoholic consumption and alcoholism were rampant. Back in those days alcoholic consumption per person was five times what it is today. Everyone, it seemed, took a swig from the jug in those days. Adults did it, teachers did it, preachers did it, kids did it when they went to school, if they went to school. No milk and crackers, they seemed to be tippling as well. While we chuckle about it now, it had all the predictable social consequences.

And there arose a series of movements in America in the late 1820s and afterwards that, in effect, said, "We're going to have a self-governing nation. It must be inhabited by self-governing individuals." So the first public health movement in America did not come out of Washington, D.C. It was the Temperance movement. And it worked. Within a generation, alcoholic consumption fell by over half.

The era saw the rise of a series of religious movements called by historians "the Second Great Awakening," and saw the rise of the Abolition movement against slavery.

 We've had these periods before. We can sense that there's another one coming in America.

The examples abound. We saw one a few months ago, the Promise Keepers. Now, think about it for a moment. Hundreds of thousands of virile men going to a big city on a weekend and behaving themselves.

And going to Washington and not asking for anything. But simply promising that they will fulfill their responsibilities to their families and their communities. Absolutely a uniquely American event.

You see it, too, more and more in our inner cities. Hasn't gotten much national publicity, but ministers and others working in the inner cities, faith-based institutions, are starting to have remarkable success among some troubled young people.

You saw it in the tone of that welfare debate two years ago, which wasn't so much about money as about the fact that the old system was hurting and destroying the very people it was supposed to help and save.

You see it too in the partial birth abortion debate. As a matter of fact, this year, despite President Clinton, that ban will become the law of the land. As a matter of fact, even in my home state of New Jersey, it cleared the legislature and it overrode the governor's veto. Let me just say this. While good people may have had differences in that resolution before the RNC a couple of weeks ago, just think about it this way - if the Republican party had applied the energy used defeating that resolution to converting a handful of Democrats on this issue, that ban would be law today.

The whole partial birth abortion debate is beginning to remind us again of something we should know and certainly should teach our children. That is a fundamental principle of American law, that the law protects not only the strong but the weakest among us.

And the weak include the elderly, the infirm and the unborn.

Science is proving it more and more: Life begins at conception, and life should end only at natural death.

In fact, the partial birth abortion ban is the first step of putting abortion on the road to total extinction in the United States of America.

Look at America's potential and America's possibilities today. Then look at Washington, D.C. Has there ever been such a sharp contrast between our glittering opportunities and the tawdriness and grubbiness that we see in our capital today, particularly in the White House?

You know, the allegations against President Clinton are serious. After all, three federal judges and President Clinton's own Attorney General gave the green light for this independent investigation of these allegations. President Clinton is not known to be a silent or shy man, but his silence here speaks volumes about where this is going to go. We should be clear: If he can't find his voice here, then he should step aside.

What these scandals underscore is the need, as never before, for the Republican Party to find its voice again and set forth a positive agenda. Passivity should go; activity should replace it.

What should the party be doing? Well, there are a lot of things it should be doing. It should ban, right away, partial birth abortions. Don't postpone the vote to September. Do it now.

And if the President is successful in sustaining a veto, then bring it up again in September with the elections coming up. Why not?

And why not, at the same time, pass the Wolf-Specter Bill? Show the people around the world that at least one political party in this country hears their pleas for help.

And also we must hammer the biggest deadweight on family life and business life today, which is the Federal Income Tax Code. The Federal Income Tax Code is the biggest source of political pollution and corruption in Washington, D.C.

There are 68,000 lobbyists in Washington, D.C., alone, not counting neighboring offices in Maryland and Virginia. Their biggest activity is manipulating, coping with, changing the tax code. That's over 130 for each member of Congress, the equivalent of over 500 for each member of the Senate. Look at those numbers, and you can begin to understand what has gone wrong in Washington. Then look at what Congress and the White House did last summer. You see these IRS abuses which are simply a symptom of a corruptingly complex tax code, and you quickly realize you can't reform this thing. The only thing to do with this beast, this monster, is to kill it, drive a stake through its heart, bury it, and hope it never rises again to terrorize the American people.

I'd replace it with a simple flat tax with generous deductions for adults and for children. A family of four would pay no federal income tax on their first $36,000 of income. That's $2,000 of tax relief for struggling Americans, real relief for real Americans, not the phony kind that Washington is addicted to. And only 17 cents on the dollar above those generous exemptions. And no death taxes. You would be allowed to leave this world unmolested by the IRS.

There is a debate between the flat tax and, perhaps, a national sales tax. But let the debate begin. Do it by passing a bill such as proposed by Steve Largent of Oklahoma, which would take the current code except for Medicare and Social Security and simply throw it in a dumpster by a date certain. And even if we can't get the Largent bill passed, let's have a vote on it. See who is in favor of the status quo and who wants a true change to unleash the energies of the American people.

In short, while they rail about the IRS, let's really start to do something to turn those initials, "IRS," into "RIP" - rest in peace for the IRS.

There are other reforms, as well. Social Security. We shouldn't phase out the current system for those who are on it and those who are going to go on it. But why not, while we still have time, phase in a new system for younger people, where the bulk of their payroll tax is taken out of the hands of the Washington politicians and goes directly to their own Individual Retirement Account?

You know, the biggest asset for most Americans is their house, their home. With these new accounts there'll be a new source of family capital in America. You take a young couple, just beginning, making $35,000 a year, $25,000 a year. By the time they retire, in their 60s or 70s, they'll be virtually millionaires. And if they leave this world, the money doesn't go to Washington. They can pass it on. Their heirs, charity, favorite pet, whatever. It's back in the hands of we, the people.

And on Medicare, we should repeal that hideous new Section 4507, which stops the seniors from having private care. And why not take the caps off of Medical Savings Accounts and return it to the people, instead of trying to strangle it in its crib?

And you know what needs to be done with our schools. They must be made accountable again to the parents, rather than to the National Extortion Association.

Maybe we shouldn't call them "vouchers." Maybe we should call them "scholarships." That's what engagement does. If we don't get it right the first time in advocating something, we learn how to get the point across in a way that'll win the hearts and minds of the American people. But if we don't try, it's not going to happen. Not with the liberals reasserting themselves.

What about campaign finance reform? Let's have real campaign finance reform. It's something called "term limits."

And why not do away with discrimination? All discrimination. So that Americans are judged as individuals and not as members of groups.

How about a defense policy? A real one. That goes beyond a few well-delivered applause lines in a State of the Union address. We see with Iraq what happens when you drift and dither, when you have to take real action and suddenly discover you don't have the resources that the country had six or eight years ago. Why not a real missile defense system? Do we honestly believe that rogue states are not developing missiles that'll eventually reach our shores? Why should we remain defenseless? It's inexplicable, and the future generations will actually shake their heads in disbelief that something so simple and basic was ignored by the capital of the greatest democracy in the world.

All of these reforms and other reforms are not simply a laundry list. They truly have the common thread and theme of making opportunity a real word again in America, of removing the barriers that stand in the way of America moving forward. When those barriers are removed, we will astound ourselves and the world with what a free people can achieve. After all, our ultimate power comes not just from our military might but from the example that we set of what a people can do when they renew themselves.

This gets to one of the basic strengths of the American democracy. Yes, we have a troubled nation today. But one of the great strengths of a democracy is that when we do get in trouble - after all, we're human, we do make mistakes - but when we do stumble or fall, we not only pick ourselves up but, looking to God, we find the inner strength to reach new heights. We've done it before, and, working together, we can do it again.

I'm an optimist. I think you are too or you wouldn't have been so polite to sit here tonight. And I believe that when historians look back on this era they will conclude that once again the American people will have proven wrong the critics and the skeptics and the doubters. They'll have to conclude once more that the American nation will have resumed her place, her rightful place, as the leader and inspiration of the world. Thank you very much.

QUESTION: Mr. Forbes, two questions. The first question is, why did you go to New Jersey and support Christine Todd Whitman? Second, when will the Forbes Foundation decide it's in its best interests economically to stop supporting Planned Parenthood?

MR. FORBES: Concerning partial birth abortion, specifically in New Jersey, on that issue I profoundly disagreed with Christie Todd Whitman and said so publicly.

Not only did I say so publicly, but I and our organization, Americans for Hope, Growth and Opportunity, did press releases and ran radio ads urging the legislature to pass that ban.

When we went public with that, naturally the newspapers descended upon me and a lot of Republicans said, "Why are you trying to undermine her campaign? Why don't you show some party loyalty? Why are you showing this disagreement in public?" At the same time, a lot of friends put the heat on, as well. She's a neighbor, grew up together, families have known each other for decades.

And they said, "Why are you trying to embarrass her like this?" We stuck to it. With the help of others, the New Jersey legislature passed the ban. She vetoed it. We publicly urged the legislature to override her veto. The override passed easily in the State Assembly, but the real fight was in the State Senate.