He energized conservatives when we were a lonely minority and went to the roots of conservatism to recover the principles that led us to victory beginning in 1980.  

He is my old boss, my mentor and one of CPAC'S greatest friends:  Jack Kemp.  

Jack is facing his own health challenge, and I'm sure you join me in offering him our prayers and best wishes for his recovery.

We meet at a time when many people are debating the Republican Party's future - and openly questioning the role conservatives should - or, more to the point, should not - play in its revival.  

Vigorous debate is healthy and necessary for our Party and our movement - and I certainly plan to participate.  We can't chart a winning strategy for the future unless we admit that our last strategy led to defeat.

But let me be clear:  The Republican Party's path out of the wilderness leads through CPAC.  It will be led by the conservative movement - or it won't be led at all.  

I don't believe millions of Americans simply embraced liberalism over the last four years.  

Voters saw an economy in decline ... foreclosures rising ... retirement savings falling ... growing unemployment ... huge deficits ... earmarked giveaways ... and massive government intervention to prop up a mismanaged financial sector.  Nevermind that these problems are largely the creation of misguided government policies.  Voters examined this grim picture and rejected the status quo - punishing the party in power.  That party was us:  Republicans.  

We know what Americans voted against ... but what were they asking for?      

A strong economy ... job creation ... stable investments ... lower taxes ... sound money... balanced budgets ... limited government.  In other words, Americans were asking for conservative policies.  

The most urgent task today is to take bold action to revive our sinking economy and relieve the suffering of Americans who have lost jobs and homes in this recession.  

But the liberal majority that controls Congress gave us a $787 billion monstrosity.  This budget buster did not have a single Republican vote in the House.  Know why?

$600 million to buy "green" cars for bureaucrats ... $200 million to re-sod the National Mall ... $650 million for digital TV coupons ... $50 million to subsidize more obscene art through the NEA ...$400 million to study sexually transmitted diseases ...$83 billion in welfare payments masquerading as tax cuts.  

This is the type of spending that's supposed to demonstrate the "new era of responsibility" President Obama promised?  My 7-year-old daughter showed more restraint when she put together her Christmas list for Santa Claus.  

Democrats even tried to slip in $550 million for contraceptives.  Speaker Pelosi said this would stimulate the economy because "contraception will reduce costs to the states and to the federal government."  She explained that "we have to deal with the consequences of the downturn in our economy."  

The pretense that babies are a drain on our financial and physical resources has always been one of the uglier aspects of liberalism.  People are not the cause of this downturn ... people are the answer to turning our economy around.  The creativity of more free minds is the only real resource we have to make our economy grow.

The Democrats claim this parade of pork will create 3.5 million jobs.  Do the math:  That's about $225,000 per job.  

The average worker in the private sector earns about $40,000.  So to pay for one government-created job, Democrats tax or borrow an amount equal to 5 or 6 private sector jobs.    

In other words, 3.5 million public jobs will cost the combined earnings of around 20 million private jobs.  This isn't an economic stimulus, it's a job killer! 

This phony stimulus hastens the steady march toward an irreversible "tipping point" in our democracy that threatens to radically alter the relationship between America's citizens and our government.  

This "tipping point" has long loomed on our horizon in the form of $56 trillion in promised entitlement spending that we haven't funded.  That $56 trillion IOU will require our kids to pay double the taxes we face - a level of government confiscation that endangers their future prosperity.  

But the actions taken to address the financial crisis and recession have dramatically accelerated the timetable.  

First, Washington took Fannie Mae and Freddie Mac into receivership, making the federal government dominant over the secondary mortgage market.  

Next came the $700 billion rescue for the financial sector - a step that may have saved the economy from short-term collapse, but opened the door to unprecedented long-term government intrusion into the private sector.  

Already we've seen the federal arm extended over the auto industry, when Washington provided billions to stave off bankruptcy. 

Now we have the $787 billion stimulus that will only stimulate more government debt and tax increases.  

There's open talk about - even by Republicans! - about nationalizing banks.   

Then a "cap and trade" scheme to give government control over the energy industry. 

Soon to come will be the push by Democrats for government-run health care.

Just last week, President Obama unveiled his new mortgage plan.  If people borrowed more than they could afford, no problem:  The government will reduce your mortgage payment and even hand out an extra $1,000 every year if you pay it this time.  But if you acted responsibly, saved your money and kept paying your mortgage, you're out of luck:  You're not getting a lower house payment and the government will force you to sacrifice even more through higher taxes to bailout reckless lenders and irresponsible borrowers.  

What we have here is an update of Marx's famous slogan:  "From each according to his ability, to each according to his needs."  Now we have:  "From the suckers who followed the rules to those who borrowed beyond their means."   

Follow this path and we'll transform our entrepreneurial capitalist economy into European-style socialism:  Where the majority of people pay little or no taxes but become dependent on government benefits.  Where tax cuts are impossible because more people have a stake in the welfare state than in free enterprise.  Where the spirit of risk-taking is smothered by an all-providing government. 

In plain language, citizens who had governed themselves will become mere subjects of the state - more concerned about security than liberty.  Once we reach this "tipping point," the friends of freedom will be reduced to near-silence.  Whatever you may call that kind of government, it will not be democracy.

There is a different future open to us - but it will require bold leadership and a Republican Party re-awakened to conservative principles.  

The Republican victories that began in 1980 were inspired here at CPAC.  But as a conservative, I admit my party took success for granted.  The Republican Party disregarded its roots - losing direction, sacrificing principles and failing to offer a vision relevant to most Americans.

Our greatest leaders - from Lincoln to Reagan - succeeded because they anchored conservative thinking and policies in the founding principles of our nation.  They did so not because of mere "history" or "tradition" - but because they understood the need to revitalize the unchanging truths that inspired the birth of America.

Let those truths inspire us again!  Let them re-ignite the sparks of hope for a new generation of Americans who love freedom! 

Without enduring principles we get "change" but no direction.  

Guided by the founding principles we can direct "change" toward the ends that have made America the envy of the world:  Individual freedom ... growing prosperity ... and equal rights secured by constitutional self-government.

America's Founders did not discover ideas no one ever heard of.  Their great achievement was to build a constitution of equality and liberty upon a foundation of self-evident truths as old as the beginning of mankind and as new as tomorrow. 

What are those truths?

First is that the "laws of Nature and of Nature's God" are the only sure touchstone of right and wrong ... for individuals as well as societies.

A second is that all human beings are created with equal natural rights - the rights to live ... to be free ... to acquire property - and other means to fulfill our God-given potential for happiness.

Third, and most important for conservatives:  The great purpose of government is to secure these natural rights:  protecting every person's life, liberty, and freedom to pursue happiness is the great and only mission of a government true to our founding.  

When government goes beyond that high mission - even if the motivation is noble - it weakens freedom, reduces prosperity, undermines its authority, and becomes arrogant and intrusive.  

These founding principles are the most inclusive ideas ever embodied in a government.  If all people have equal natural rights, that is final.  "All means all."

A government that expands past this mission is not "progressive."  It goes backward - finding excuses to privilege some classes at the expense of others.   

It suffocates individual initiative and transforms self-reliance into a vice and government dependency into a virtue.  

It creates an aversion to risk, sapping the entrepreneurial spirit necessary for growth, innovation and prosperity.  

It replaces the "laws of Nature and of Nature's God" with a regulatory state that believes government is answerable to no higher authority.  

It abandons constitutional limits and expands its powers into every aspect of society, centralizing control in federal bureaucracies that are not accountable to the people.  
This is the point we are rapidly approaching.

My friends, we did not reach this "tipping point" by accident.  We got here step by step, under Democrats and Republicans.  

Now we are faced with a crucial decision.  

We may decide to surrender our 233 year experiment in self-government as a noble idea that collapsed in the age of technology.  We may turn over our government to health bureaucrats, industrial policy bureaucrats, education bureaucrats, housing bureaucrats, energy bureaucrats, and family control bureaucrats - a road Hayek perfectly described as "the road to serfdom."  

Or, we may choose the road our Founders took - the road of limited government, equal God-given rights, and expanding opportunity for all.  This road is politically risky, but the potential rewards are boundless.  I believe, as a conservative, it is the only road that will lead to a future worthy of the greatness of America.

Some of you are wondering:  Exactly what role can conservatives play in today's liberal-dominated political environment?  

Let me tell you exactly what our role must be:  We must tell the American people the truth.  And we must offer the American people a choice.  

Guided by the enduring principles of our founding, conservatives must break away from conventional approaches ... take political risks for our beliefs ... and engage in real policy entrepreneurship to develop ideas that will inspire America.  

In that spirit, I'd like to offer a few thoughts on how those truths can be applied to some challenges we face today.  

This is not an all-encompassing list, nor are these ideas handed down on stone tablets.  Challenge them ... add to them ... develop a superior synthesis.  My goal is to spark debate among conservatives to energize our movement with ideas - just as Kemp and Reagan did during the liberal Carter era.  

First, it is time to restore the Constitution's guarantee of sound and stable money.  

For the last decade, the Federal Reserve has manipulated interest rates and vastly over-expanded the money supply.  The wild fluctuations in the value of the dollar drove oil prices up ten-fold and generated the housing bubble that led to so many disastrous consequences.  

For almost 40 years, our monetary experts have clung to the belief they can endlessly tweak the money supply to serve finely calibrated political purposes - loosening to help homeowners here, tightening to bring down gas prices there, trading off inflation for unemployment.  

Believe it or not, the Founders wrestled with this same problem.  In the Federalist Papers, James Madison called "the rage for paper money" - meaning government inflation of the money supply - a "wicked project" equal to government cancellation of debts and confiscation of property.  That's why the Constitution tied the dollar to a standard of stable value. 

For nearly two centuries, until 1971, the American government guaranteed the dollar's value against a commodity standard.  To address the world's growing economic and financial problems ... end uncertainty ... keep interest rates down ... increase the confidence entrepreneurs and investors need to take risks for future growth:  It's time to honor the Constitution's promise of a dollar that holds its value for years to come. 

Second, conservatives need to embrace tax reform that replaces today's gargantuan, incentive-killing IRS code with a simpler system to reward saving and investment, create jobs and spur economic growth. 

A generation ago, the conservative revolution was launched with a call to cut income taxes across the board.  The Reagan-Kemp tax cuts kicked off one of the longest periods of economic growth in history.  They inspired every tax cut that followed - from the capital gains reductions under Bill Clinton to the marginal rate cuts under George W. Bush.   

These dramatic tax cuts made federal revenues explode.  Liberals scratched their heads, but supply-siders knew the fundamental economic truth:  Incentives matter.  

President Obama and the liberal Democratic majority are promising to let tax rates rise automatically on small business owners, investors, and other engines of growth.  During the campaign, Mr. Obama said he'd support a higher capital gains tax - even though he knew it would generate less money for the Treasury.  That's not economics.  That's ideology.  

I doubt Americans believe there's anything fair or just about using the tax code to confiscate wealth.   The American Revolution began with an outcry against "taxation without representation" - because spreading the wealth through confiscatory taxes violates everyone's natural rights.  

It's time for conservatives to move beyond simply arguing for lower tax rates or targeted tax cuts.  Today's tax code is so complex that even the House chairman who writes the tax laws and the Treasury Secretary who oversees the IRS cannot figure out how to pay their own taxes.  

No wonder so many Democrats are against tax cuts - they're not paying their taxes.    

It's time to junk the entire 67,000 pages of our tax code and start from scratch.  

Conservatives should lead a debate over every innovative tax proposal we can think of:  A flat tax ... a fair tax on consumption instead of income ... any idea that would scrap today's unfair and incomprehensible system should be on the table.  

To get this debate started, I have proposed to flatten and simplify the tax code dramatically.  It's part of my plan called "A Roadmap for America's Future."  

Every taxpayer can choose:  Either pay income taxes under the current tax code.  Or move to a new two-rate schedule of 10 and 25 percent with most deductions and credits eliminated.  

If we adopt this plan, I'm sure that by next April 15 the American people will consign our byzantine tax code to the ash heap of history.  That's "change" conservatives can believe in.  

While we're at it, we should boost the capacity of American companies to compete in the 21st Century global market.  I've proposed letting businesses immediately write off their expenses ...eliminating today's corporate income tax and replacing it with a simply-audited Business Consumption Tax of 8.5% paid on the difference between sales and costs ... and leveling the playing field by ensuring that foreign imports are taxed the same way as American products sold in America.  

Instead of letting Ireland and the Caymans be the havens for world capital, let's make it America.  

The third challenge conservatives need to tackle is health care.  

There's a clear dividing line between two approaches.  Liberal Democrats believe Big Government should make the decisions.  Conservative Republicans believe Americans should be in control of their own health care.

Liberals have been trying to lock Americans into socialist health care since at least Harry Truman.  But Americans never liked bureaucrats dictating choices.  

We don't wait for songs to be played on the radio ... we pull them up on our iPods.  We don't hope a movie shows up tomorrow at Blockbuster ...we download them straight to our screen.  We don't call travel agents to tell us when we can fly ... we book the trip ourselves on Expedia or Orbitz. 

These innovations came from entrepreneurs who put the customer in control - and that should be our goal in health care.  

Americans yearn for a health care system that puts them in charge:  A system where you can access your medical records as quickly as your bank records ... where you can pick your health care provider from hundreds of competitors based on quality, convenience and price - not because they're in the right network. 

Our Constitution gives the federal government no power to run health care programs.  And bureaucracies cannot deliver services effectively because they have no market signals to understand what consumers want.  Yet a federal health care monopoly remains the Left's fondest dream.  

Conservatives must stop this dream from becoming America's nightmare.   

But we can't just erect roadblocks ... we must offer roadmaps.  The answer is a market-based health care plan that will make health care more affordable, more transparent, more portable and universally accessible.  .  

Start by giving individuals the same tax benefits for buying health care we gave companies back in World War II.  Provide a refundable tax credit so buyers can purchase coverage in any state and keep it no matter where they move.  Unleash the power of information technology on health care - by disposing of antiquated pen-and-paper files that result in medical errors and duplicative tests.  Allow providers to put transparent health care prices and data about quality at our fingertips.   

Through a combination of tax credits, high risk pools, insurance choice, regulatory reform and information technology we can create a vibrant health care marketplace.  My roadmap contains a plan that does just that.    

While we're talking health care, let me say something that touches on the deepest principles Americans hold dear: the controversial matter of abortion. 

The Left is pushing for radical new laws to require every provider of OB/GYN, childbirth and related services to perform abortions.  These laws would also force every taxpayer to pay for abortions, no matter how abhorrent that is for millions of us.  They call it FOCA, the Freedom of Choice Act - but there is nothing free about it, nor is there any choice.

Our Founders believed that religious conscience has the highest value for a democracy.  Good citizens should not be made to choose between their conscience and the law.  For the United States government to force Americans to make these choices would betray the soul of this nation.  America must never ... ever ...pass such a law.   

The fourth area in dire need of conservative reform is the federal budget.  

No responsible person can defend the unsustainable growth of federal spending.  The truth is, Republicans at both ends of Pennsylvania Avenue share the blame.  The party of limited government succumbed to the siren songs of government expansion and earmarked giveaways. 

In the process, we squandered the opportunity to restore the proper balance between federal and state governments ... between government and the individual - and we very likely squandered our majority in Congress as well.  

Federal spending has exploded because Washington is trying to do what should be done in our states and communities - and not doing it effectively.  

In order to function, our federal government has historically taken about 20 cents on every dollar earned in America.  Now we are pushing above that - and without reform, we'll need to extract 40 cents of every dollar just to keep government afloat.  We're on the path to double taxes and the size of government. 

Conservatives, we should advocate a binding cap on federal spending.  By limiting the overall budget, we can both rein in the cost of individual programs and return powers to the states, where they belong under our federal system.   

We should hold total federal revenue to around 18 or 19 percent of GDP for the foreseeable future.

The final area I'd like to discuss is regulatory reform.  

Ever since the sharp declines in global stock and financial markets last October, liberals have led the cry for more regulation.  
There's plenty of blame to go around for today's financial crisis.  But one prime culprit has gotten almost no attention: government itself.  
It was the Clinton Administration that reinterpreted the Community Reinvestment Act to force lenders to write high-risk mortgages for homebuyers with poor credit and inadequate income.

It was Congress that enacted a 1992 law they called ... get this ... the Federal Housing Enterprises Financial Safety and Soundness Act.  In effect, Congress forced Fannie Mae and Freddie Mac to buy $4.6 trillion of these high-risk mortgages in just the last eight years, making up half their business.  
It was Congress that put an implied government guarantee behind these mortgages - a guarantee that spurred sales of securitized Fannie and Freddie loans and spread this toxic waste throughout the world financial system.  

It was the Federal Reserve that kept money too loose for too long, driving down mortgage rates that encouraged real estate speculation and enticed people to buy homes they couldn't afford.  These laws made the federal government itself the ultimate promoter of predatory lending!
The liberal majority in Congress tells us that private sector greed and corruption drove this crisis - and yes, these vices did play their part.  But instead of looking in the mirror, liberals are pointing their fingers.  
Their object isn't just to deflect blame.  The new White House Chief of Staff is on record instructing Democrats to "never let a serious crisis go to waste" because "it's an opportunity to do things you couldn't do before."  
Translation:  Democrats want to use this crisis to move America toward the sort of Europeanized economy that runs counter to the freedom and entrepreneurial spirit of our people:  To usher in an era of greater government control and micro-management of our economy.  
It's an audacious scheme:  Set off a series of regulatory blunders and congressional meddling, blame the free market for the financial crisis that follows - then use this excuse to impose a more intrusive state.  Sounds like something right out of an Ayn Rand novel.  
I'd like to invite you to envision a far different world...  
... a world where instead of manipulating interest rates, the Fed maintains a secure and stable dollar, preventing the rush to cheap mortgage money.  
Where lenders make loans without discrimination to credit-worthy borrowers - but also without Congressional fiats that force them to meet mortgage quotas for people without the credit or income to afford them.  We should seek to equalize opportunity, not results.
But there is more to this vision - because a properly-functioning market does require effective regulation.  According to Madison himself, writing proper regulations for a nation of many diverse interests is "the principal task of modern legislation."  

Conservatives can't be against all regulation ... conservatives are against bad regulation.  We should support regulations that protect private property and contracts ... promote trade ... stimulate job and business creation ... secure freedom.  There is nothing "free market" about opposing rules that punish fraud ... establish standard measures ... or provide transparency.  
Make no mistake:  A new regulatory regime to govern our financial markets is coming.  Conservatives must engage in this debate - not with knee-jerk opposition to every regulation, but with a firm understanding of the ground rules required to support a thriving free enterprise, capitalist economy.  

I have only touched on a few of the vast reforms needed for a new conservative vision for America.  It's a huge task.  If you want to learn more about my ideas, go to AmericanRoadmap.org.  With CPAC's leadership, I know we will revitalize our movement.  
Life in the wilderness is nothing new to CPAC.  During the early days of this yearly event, Jack Kemp used to joke that - back then - all the free market believers in Washington could meet in a phone booth.  
We've come a long way.  Phone booths are gone - but I realize many of you have not experienced political life out of power.  Many of you are wondering:  Is this the right time to be a conservative in Washington?  
With England threatened during the Second World War, Winston Churchill told the young men at his old school:  "these are not dark days, these are great days."  He said they should thank God for the chance to make these the greatest days in England's history.  
After the wreckage of last year's elections, we have the opportunity to make these great days in conservative history.  Let us seize the chance to revive the Republican Party and secure our country's freedom!  
Achieving this great goal will not be easy.  It will involve taking political risks.  But we have the eternal truths of a free people - handed down to us by our founders - to guide us to victory:  The principles of limited government whose sole, unchanging mission is to guarantee the natural rights of all to life, liberty and the pursuit of happiness - giving citizens the means to fulfill those God-given rights through freedom and enterprise and individual initiative, without state interference.  
This idea has been America's animating spirit, even before the Founders gave voice to those magnificent truths in the Declaration of Independence.  
That spirit was present when John Winthrop identified the new world as a shining city on a hill ...when Lincoln spoke 256 words at Gettysburg, summoning America to a new birth of freedom ... when Lady Liberty first framed the Golden Door that opened this new world to our ancestors ... when Dr. King brought the "promissory note" to the Lincoln Memorial, calling America to fulfill its pledge of equal rights for all ... when Ronald Reagan revived Winthrop's city on a hill to empower conservative ideas and lift up America out of liberal malaise.   

I have given you a sober message about where we are today, but I am optimistic about the future.  I have boundless faith in the good sense of the American people.  Give them the unvarnished facts.  Give them the truths.  They have never failed in the past.  

With our country nearing the tipping point, our task as conservative leaders is to restore the American ideal.  Conservatives, it is time to begin the job of taking back our government, which was made for men and women with the passion and the courage to stand up for freedom.

Thank you.