Thank all very much. I appreciate the warm welcome today in California and the opportunity to be back in you great city of Los Angeles. Let me also thank Eli Broad for his kind words, and the Los Angeles World Affairs Council for the invitation to join all of you today.

This is a distinguished group. I see some old friends in the audience, and I'm also pleased to spend some time with your board of directors and your officers.

This is not my first meeting with the Los Angeles World Affairs Council, but it has been a while. I was last here in April of 1990, when I was Secretary of Defense, back in the days when I had a position of real power and influence in Washington, D.C.

My former job now belongs, of course, to man some of you know quite well, Don Rumsfeld. Don and I have a fine working relationship these days, but things didn't start out all that smoothly. He and I first met in the 1960s, when he was a congressman and I was a graduate student looking for a fellowship on Capitol Hill. He agreed to see me for an interview, 15 minutes later I found myself back out in the hallway. Don thought I was a detached academic type, and I thought he was a brash young politician. We were both on to something. 

When I finished my term as Secretary of Defense, I had no thought of ever becoming Vice President. And even a few years ago, no one would have bet on my joining the ticket. The odds, I suppose, were roughly comparable to that of an action star becoming governor of California.  I had a chance today to meet again with your new governor, and my impression of him is proving correct. I think Arnold Schwarzenegger is a fine man, a very capable executive, and he's well suited to the job that you Californians have given him. 

It was three years ago next Tuesday, that President Bush and I took up our own responsibilities. And next Tuesday, the President will give his annual report on the State of the Union. Much has happened since he addressed Congress, and we begin the new Year as a stronger, more prosperous, and more secure nation. The economy is showing continued signs of recovery, and steady growth, higher productivity, and expanding exports. Strong growth has also begun to bring down the unemployment rate -- and that is a critical objective, as well, going forward.

Our administration and Congress have also addressed other urgent needs in domestic policy -- among them, historic Medicare reform legislation, giving seniors coverage for prescription drugs for the first time; and tax relief for every person who pays income taxes; further vital actions in homeland security, reforms in the forest management to help prevent the kind of catastrophic wildfires you have seen here in Southern California this past year.

On a whole range of issues, President Bush has worked with members of Congress, regardless of party, to make progress for the nation. He believes and has shown that the only way to seize new opportunities for reform is to get beyond some of the old debates and grievances in Washington, D.C.

As the President has said many times, he came to office to solve problems, not simply pass them on to future generations. And in that spirit, his speech next week will set forth our priorities for the new Year. You can expect a full domestic agenda, and a thorough report on the progress the nation is making in the war on terror.

The year 2003 ended with two very significant victories. The first was the capture of Saddam Hussein by our troops in Iraq, which provides final confirmation --  -- provides final confirmation to the people of Iraq that they will never again have to live in fear of Saddam Hussein. Then five days later, came the announcement by Libya's Colonel Muammar Ghadafi that his regime would voluntarily reveal and dismantle its nuclear and chemical weapons programs, as well as its longer range missiles and biological weapons-related efforts. Each of these events was dramatic in its own way. And each came about through the clear resolve of the United States of America and our allies.

The undoing of Saddam's regime, and the welcome commitments from Colonel Ghadafi, will bring greater security to the American people, and to our friends and allies. Yet especially in moments of success, we need to remember the long-term nature of the struggle we are in, and the serious dangers that still exist.

On September 11, 2001, our nation made a fundamental commitment that will take many years to see through. On that morning, we saw the grief and the destruction that 19 terrorists could inflict with box cutters and airline tickets. And we became aware of the far worse harm that these terrorists intend for us. Thousands received training in the terrorists camps in the years before the attack of 9/11. Scattered in more than 50 nations, the al Qaeda network and other terrorist groups constitute an enemy unlike any other that we have ever faced. They have attacked and killed innocent people many times since September 11th -- in Casablanca, Riyadh, Mombasa, Istanbul, Bali, Jerusalem, Jakarta, Najaf, and Baghdad. And as our intelligence shows, the terrorists continue plotting to kill on an ever larger scale, including here in the United States.

Terrorists were at war with our country long before 2001. And for many years, they were the ones on the offensive. They grew bolder in their belief that if they killed Americans, they could change American policy. In Beirut in 1983, terrorists killed 241 of our service members. Thereafter, U.S. forces withdrew from Beirut. In Mogadishu in 1993, terrorists killed 19 American soldiers. Thereafter, U.S. forces withdrew from Somalia. The decade of the '90s saw many more attacks: the bombing at the World Trade Center in 1993; the murders at the Saudi Arabian National Guard Training Center in Riyadh in 1995; the killings at the Khobar Towers in 1996; the simultaneous bombings of American embassies in Kenya and Tanzania in 1998; the attack on the USS Cole in 2000, which cost the lives of some 17 American sailors.

Over time, the terrorists came to believe that they could strike America with relative impunity. There was, among policy makers, a tendency to treat terror attacks as individual criminal acts, to be handled primarily through law enforcement. Consider the example of Ramzi Yousef, who participated in and perpetuated the first attack on the World Trade Center in 1993. The U.S. government tracked him down, arrested him, and got a conviction. After he was sent to serve a 240-year sentence in a federal prison, some might have thought, case closed. But we now know that behind that one man, Ramzi Yousef, was a growing network with operatives inside and outside the United States, waging war against our country. That 1993 attack was probably the first al Qaeda attack on the U.S. homeland.

Six people died in the '93 attack on the World Trade Center. Eight years later, the casualties ran into the thousands. We know to a certainty that terrorists will kill as many innocent people as they possibly can, limited only by the means at their disposal. We know, as well, from the training manuals we found in Afghanistan and from the interrogations of terrorists we have captured that they are doing everything they can to gain the ultimate weapons: chemical, biological, radiological, and even nuclear weapons. Should they ever acquire such weapons, they would use them without any constraint of reason or morality. Instead of losing thousands of lives, we might lose tens or even hundreds of thousands of lives as the result of a single attack, or a set coordinated of attacks.

Remembering what we saw on 9/11, and knowing the nature of these enemies, we have as clear a responsibility as could ever fall to government: We must do everything in our power to keep terrorists from gaining weapons of mass destruction.

This urgent responsibility has required, above all, a shift in America's national security strategy. There are certain moments in history when the gravest threats reveal themselves. And in those moments, the response of our government must be swift, and it must be right.

September 11th has been aptly compared to December 7, 1941 -- another day in our history that brought sudden attack, national emergency, and the beginning of a sustained conflict. Perhaps a closer analogy can be drawn, not to the days of Franklin Roosevelt and World War II, but to the decisions that faced Harry Truman at the outset of the Cold War.

Within a few years, after Germany and Japan surrendered, Truman and his advisers saw the rise of new dangers. Imperial communism presented a challenge of global reach, demanding a comprehensive, long-term response on many fronts.

President Truman made clear at the outset that the United States recognized the danger, and that -- for the sake of future generations, we would face it squarely. In a short time, our government created the architecture of national security we know today: the Department of Defense, the Central Intelligence Agency, the National Security Council. To defend ourselves and free Europe, the United States helped to found NATO. To build and strengthen new democracies, our government led in the reconstruction of Japan, and devoted the present-day equivalent of over $100 billion to European assistance through the Marshall Plan. And when aggression occurred on the Korean Peninsula, it was President Truman's decision and America's sacrifice that saved South Korea.

All those early commitments, made by one President and carried forward by eight of his successors, helped to bring victory in the Cold War, and unprecedented success for the cause of freedom. In this new century, facing new dangers, the commitments we make will also be decisive. President Bush has recognized this from the beginning. And by the strategy he has set for our government, we will overcome the threats of our own time, and, as the President has said, advance the cause of freedom and the peace that freedom brings.

To make the United States safer from terrorist attacks, we have created the Department of Homeland Security -- the largest reorganization of the federal government since the Truman years, bringing together 22 agencies and more than 170,000 federal employees in one department. In a free country, especially a vast continental democracy like ours, there is no such thing as perfect security. But this new department allows us to track and prevent acts of terror in a systematic way -- analyzing threats, guarding our borders and airports, protecting critical infrastructure, and coordinating the response of the nation in any future emergency.

To strengthen the international battle against terrorism, the United States is working with our allies in an enlarged NATO. The presence of new nations in NATO surely indicates the historic turn our time has taken. President Bush has also challenged the United Nations to live up to its promise, to become a body that not only passes resolutions, but enforces them. We are currently working with the U.N. Secretary General to return U.N. teams to Iraq, and to have them play an important role there in the months ahead. And in Afghanistan, NATO is taking a leading role in securing peace in that war-torn country.

Our national security strategy also recognizes that the doctrines of deterrence and containment, which served us so well during the Cold War, are not sufficient to meet the threat of terrorism. It's hard to deter an enemy that has no territory to defend, no standing army to counter, and no real assets to destroy in order to discourage them from attacking you. Containment is meaningless in the case of terrorists. And neither containment nor deterrence offers protection against rogue regimes that develop weapons of mass destruction and are willing to pass along those weapons secretly to a terrorist on a suicide mission.

Given these realities, there can be no waiting until the danger has fully materialized. By then it would be too late. And so we are waging this war in the only way it can be won -- by taking the fight directly to the enemy.

In these 28 months, we -- and our friends and allies in many countries -- have inflicted heavy losses on al Qaeda's leadership and foot soldiers, tracking and finding them hiding in places from Pakistan to Indonesia. Those not yet captured or killed live in fear, and their fears are well founded. We are also working with governments on every continent to take down the financial networks that support terror -- the hidden bank accounts, front groups, and phony charities that have helped them function. And our government is working closely with intelligence services all over the globe, and our own officers continue to be engaged in some of the most perilous and sensitive intelligence work ever carried out. This work has brought many successes -- including the discovery of terror plots that we were able to stop in their tracks. Americans can be grateful every day for the skillful and the daring service of our nation's intelligence professionals.

On the very night this nation was attacked, President Bush declared that the United States would make no distinction between terrorists and those who support them. This principle, it's come to be known as the Bush doctrine, is now understood by all: any person or government that supports, protects, or harbors terrorists is complicit in the murder of the innocent, and will be held to account.

The first to see its application were the Taliban, who ruled Afghanistan by violence, while turning that country into a training camp for terror. With fine allies at our side, we took down the regime and destroyed the al Qaeda camps. Our work there continues. We have 13,000 soldiers and Marines in Afghanistan, as part of an international security force that now includes 38 nations and a major role for NATO. This force is on the hunt for the remaining Taliban and al Qaeda members. We are helping to train a new Afghan army, and providing security as the new government takes shape.

On the political front, the loya jirga has now approved a constitution that reflects the values of tolerance and equal rights for women. Under President Karzai's leadership, and with the help of our coalition, the Afghan people are building a decent, a just, and a democratic society -- and a nation fully joined in the war against terror.

In Iraq, the United States and our allies rid the Iraqi people of a murderous dictator, and rid the world of a menace to our future peace and security. Saddam Hussein had a lengthy history of reckless and sudden aggression. His regime cultivated ties to terror, including the al Qaeda network, and had built, possessed, and used weapons of mass destruction. Year after year, the U.N. Security Council demanded that he account for those weapons and that he comply with all the terms of the 1991 Gulf War cease-fire. Year after year, he refused.

Against that background, the Congress of the United States voted overwhelmingly to authorize the use of force in Iraq. The U.N. Security Council unanimously found Iraq in material breach of its obligations, and vowed serious consequences in the event Saddam Hussein did not comply. When Saddam Hussein continued his defiance, our coalition acted to deliver those serious consequences.

In the liberation of Iraq, the American military acted with speed, with precision and with skill. And to this hour they continue their work -- striking hard against the forces of murder and chaos, conducting raids, countering attacks, seizing weapons and capturing killers. Members of our active duty Armed Forces, the National Guard, and Reserves have faced tough duty, long deployments, and the loss of comrades. We have, today, more than 125,000 Americans serving in Iraq. They are confronting terrorists every day in that country, so that we do not one day meet the same enemies on the streets of our own cities. At the same time, American and coalition forces are treating Iraqi citizens with compassion, and showing respect for Iraq's great culture. Our servicemen and women are demonstrating the best qualities of the United States, and we are proud of each and every one of them. 

The use of military force is, for the United States, always the last option in defending ourselves and our interests. But sometimes the last resort must be taken. And by acting in Iraq to enforce the just demands of the U.N. Security Council, America and our allies not only removed one danger, but made it more likely that other dangers can be dealt with through diplomatic means. In making our intentions clear, and in matching resolutions with actual resolve, we have seen and sent an unmistakable message: The pursuit of weapons of mass destruction only invites isolation and carries other costs. By the same token, leaders who abandon the pursuit of those weapons will find an open path to better relations with the United States of America and other free nations.

In the case of Libya, the announcement in December by Colonel Ghadafi is a very significant development. Already, with the cooperation of Libya's government, American, British, and international inspectors have examined a sizeable lethal weapons program. In the months to come, the inspectors will complete a full inventory, and assist Libya in dismantling its entire WMD programs and its longer range missiles. As Libya keeps its pledges and cooperates fully in the international fight against terrorism, that nation will have a chance to rejoin the community of nations. America, Britain, and other nations stand ready to help the Libyan people build a country that is more prosperous and more free.

As our administration carries forward our commitment to overcoming new dangers, we recognize that lasting security depends on more than military power. As President Bush has said, America seeks the "global expansion of democracy, and the hope and progress it brings, as the alternative to instability, hatred, and terror."

Here, too, we find an lesson from history. Twice in the last century, the United States sent armies to Europe in order to prevent the destruction of liberty on that continent. Yet in the decades after World War II, dangers in Europe fell away as the frontiers of democracy advanced -- in Germany and Italy, and then behind the Iron Curtain. The lesson is that the spread of democratic institutions is the surest way to bring peace among nations.

That's why America today is pursuing a forward strategy for freedom in the greater Middle East. Millions in that region have known decades of dictatorship and theocratic rule -- resulting in misery, bitterness, and ideologies of violence that directly threaten us. And as the world has witnessed in Iraq and Afghanistan, people liberated from dictatorship welcome the arrival of freedom, welcome the chance for a better life, welcome the responsibilities of governing their own country.

By its very nature, freedom must be chosen. And the path to democracy is not an easy one. It takes time and effort and patience for democracy to take hold, and the greater Middle East has a long way to go. But all who choose the path, by opposing terrorism and encouraging reforms, can know this: They will have the friendship and support of the United States of America.

In answering the great challenges that have come to us, our government will go forward with confidence, but without illusion. Defeating a resourceful and determined enemy, and advancing the cause of human freedom in a vital and troubled region will place great demands on us far into the future.

At the start of the Cold War, President Truman said: "Events have brought our American democracy to new influence and new responsibilities. They will test our courage, our devotion to duty, our concept of liberty." Fifty-five years later, America and our allies look back with pride on the perseverance and the moral clarity that saw us through those many tests. Americans of today, and our President, have those same qualities, as we have seen many times since the morning of September 11, 2001. We cannot know every turn that lies ahead. Yet we can be certain that by the strength and character of this country, and by the rightness of our cause, we will prevail.

Thank you very much.