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.

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.

Literally from the moment I came in the door of MIT, it was very clear that a highly productive 40-year partnership between U.S. research universities and the federal government was badly eroding.

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.

We will work with industrial or Dept. Of Defence sponsorship as long as we keep our principals of openness firm we're proud to work with the military, and they respect that in turn.

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.

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.