Looking ahead, I believe that the underlying importance of higher education, of science, of technology, of research and scholarship to our quality of life, to the strength of our economy, to our security in many dimensions will continue to be the most important message.

I believe that our office has clearly been the leader in building coalitions, in getting other universities across the contrary to interact more effectively with the government and particularly the Congress.

We are trying to make up these other elements by gaining cost efficiencies through our reengineering process and through overt fund-raising activities to better support graduate education.

For much of this decade, both Congressional and administration budget projections showed a decline in science and technology accounts of between 20 and 30 percent in real dollars. The real impact to date has been far less severe.

The thing that we at MIT must understand is the amount of real damage that is being done to us in the fine structure of how research funds are expended.

Nonetheless, the research budgets of the Department of Defense are under enormous stress-and they are extremely important because they support more than 40 percent of all federal funding for engineering schools across the country. So the threat was and is real.

Of course, tax revenues have ended up being substantially higher than they were at the time these dire projections were made, and we are very close now to having a balanced budget. All that has been very helpful.