Verbatim transcript from tape:

TERENCE McAULIFFE: Thank you, Governor. Now I'd like to introduce someone else. I've known this man for 45 years, since he and I were college classmates together. I remember back then, even as a college student, he exhibited the qualities and values of a leader. He is a true New Democrat, taking a balanced commonsense approach to challenges like public safety, education, access to healthcare, runaway auto insurance rates. And speaking of the budget, this man inherited a $9 billion deficit in the State of New Jersey. And the former governor, where is she today? She's in the Bush Cabinet. I mean, George Bush and his economic team, as I say, is the worst we've ever seen since Herbert Hoover. But, now in the other Cabinet departments he's bringing people in.

But, Jim has stepped up to the plate. He's done a great job of managing the budget, and doing what he can to bring some fiscal stableness to the great State of New Jersey. He is someone who has never forgotten his roots, as the grandson of a New Jersey police officer, and the son of a Marine Corps drill instructor. He understands the values and concerns of New Jersey families, because he has lived them.

Ladies and gentlemen, please welcome New Jersey's 51st governor, and one of its best, Jim McGreevey.

GOVERNOR JIM McGREEVEY: Thank you. Thanks to my dear Terry McAuliffe for that kind introduction. Terry is well aware of my commitment to DLC principles, even when we were in college I thought of the importance of being a fiscal conservative, and making sure that McAuliffe picked up the tab. And particularly Tom, New Jersey has lead the way in terms of voter outreach and registration, as my dear friend Governor Burne always says, when he retires he wants to be buried in Hudson County, so he can stay active in Democratic politics.

I asked Governor Burne, what's the best part about being a former governor? He said, Jim, now when you wave at people, they wave back with all five fingers. This is Jersey. But, to my dear friend Al From, Will Marshall, and Bruce Reed, thank you for bringing the DLC to Manhattan, to our corner of America, and particularly to the gang for Jersey, for being here, for being supportive, thank you very much.

I remember when Al From came to New Jersey, about a decade ago. We opened out state chapter of the DLC, I was a young assemblyman filled with the hope and the prospect of the DLC. And leading the DLC was a young governor from Arkansas, the gentleman named Bill Clinton. Well, more than a decade later much has happened, but certain things are tragically the same. A federal administration with failed leadership, in the face of corporate irresponsibility, a slumping economy, and rising unemployment once again calls for the DLC and the Democratic Party to bring the needed change, the right change to America. And today I want to thank Senator Bayh, Congresswoman Tauscher, and particularly my dear friend Senator Lieberman, for understanding the importance of coming here today in New York City for this national conversation.

Although America's attention has been turning towards the rebuilding, and the fighting of the ongoing war against terrorism, the wounds still run deep in many communities and cities and towns all across New York and New Jersey, where so many of our loved ones suffered as victims in the World Trade Center attack. Yet, we're moving forward. I'll never forget marching in this year's St. Patrick's Day parade in Manhattan. And at one point the entire parade stopped, and in reverence turned towards Ground Zero for 90 seconds. And while 100,000 people were there, it was a hushed silence of reverence and respect. And then a giant roar swept up from the street, a giant defiant cheer. I knew at that moment New York, New Jersey, indeed this great nation was regaining its footing. I knew we were back, and I thank you for joining us all here in New York City, as we continue to rebuild out financial markets.

But, for me the DLC has been a cornerstone of my political career for two reasons. One, I like ideas. And there's no better place than the DLC under Al From's leadership, and the Progressive Policy Institute, for good, rational, pragmatic ideas. And second, our values, our assured values, values of opportunity, responsibility, community. These are the values of not only the DLC, but the values which my family shared with me, the values of the vast number of citizens of the State of New Jersey.

As Terry said, my grandparents were immigrants. One was a police officer, the other an operating engineer. My mother a nurse and educator. My dad, a Marine Corps drill instructor, who worked all day so that he could go to college at night on the GI Bill. My parents demanded the best of us, because it was the American way, because it was right to give something back to our town, our state, and our nation. My story isn't unique, it's a story of all New Jersey, hard working men and women coming in search of a better way of life, sending their kids to college, working hard at a job, hoping for a house with a yard, our own piece of the American dream.

Well, in New Jersey that journey hasn't ended. There continues to be a steady stream of immigrants searching and yearning for that same dream. Al asked me to talk about how we won the governorship, and I think the key was as simple as this. To paraphrase Bruce Springsteen, I'm just a Jersey guy, a Jersey guy talking about family values, to the citizens of this state. And, Terry, I think it says a lot that my wife chose to stay in Asbury Park this morning to listen to the Boss, as opposed to be here with us.

We stuck to the basics. And people want to identify with leadership that's going to address their needs, going to stand with them, and be responsible to their family, pragmatic concerns. We worked hard, very hard, we campaigned smart, and we had a tremendous team. But, make no mistake about it, the election wasn't about a candidate, it was about New Jersey, men and women who get up every morning, play by the rules, and work hard, people who want a government who respects their dollars, who understands the importance of providing a government which is both responsible, and yes, efficient. It's about ushering in a new era of civic responsibility, where we can create prosperity and opportunity for all New Jersians. And we won, because we refused to accept old, tired labels, and never conceding the territory of what real family values are all about. And I still won't and I never will.

(Applause.)

GOVERNOR JIM McGREEVEY: Demanding fiscal accountability, demanding fiscal accountability, expanding opportunity, particularly through education, these are the principles of our administration and the DLC. Now, the national debt clock in New York City is back on, as it heads towards $165 billion, as hard working middle class families see their nest eggs evaporate, their children's college savings go up in smoke, as jobs are being cut, and the economy is in a slump, the public is searching for economic opportunity, and a party which is willing to lead the way.

If I can offer any advice today it's that we as Democrats can never concede the ground of fiscal responsibility, and economic opportunity to the other party. We've worked too hard, and too long to win back the trust of the American public to allow our party to stray from these basic notions. We've provided so much opportunity to so many families all across this nation. So now, I'd like to briefly outline what New Jersey is doing to restore our responsibility to our state's government, and create opportunity for our state's residents.

As Terry noted, when I was elected my administration was told we'd be inheriting a billion dollar surplus. Well, that was terribly wrong. In Fiscal Year '02 we inherited a $3 billion deficit. And in Fiscal Year '03 a $6 billion deficit. Literally $9 billion, the single largest deficit in the history of the State of New Jersey, and arguably the largest deficit in the nation, as against our operational costs. And after eight years of Republican rule, state spending grew by 55 percent, more than twice the national average, more than twice Pennsylvania, New York. Our state workforce swelled to the largest in the history of our state. And in addition to a $9 billion deficit, in the past 10 years while our economy prospered under Clinton-Gore, New Jersey's debt more than tripled, from $4.8 billion last year to $18 billion of long term debt. Those statistics are staggering. But, the real tragedy lies behind the numbers, in the schools that weren't built, in the roads that weren't built, in the children that weren't educated, in the seniors who couldn't afford their prescription drugs.

Look what's happening in Washington today. I worry that the current administration will be putting the nation on the same fiscal path that we confronted this January in New Jersey. And the DLC and the Democratic Party must not let that happen. In the face of a significant budgetary crisis, closed the gap by putting together a state budget that cut government waste, across the board, state departments and agencies, by 5 percent. And most importantly, restored fairness to the New Jersey tax code. It's a strategy that the DLC has long embraced, it's called cut and invest.

We rooted out waste and mismanagement, consolidated programs, including our New Jersey Turnpike, and our parkway authority. And eliminated over 1,000 jobs from New Jersey state government. But, we refused to balance the state budget on the backs of hard working, middle class New Jersians. We didn't raise the income tax. We didn't raise the sales tax. We maintained rebate programs, and actually increased them for senior citizens. But, what we did is we tackled the corporate business tax. The reality was that if you look at 1982, in 1982 the corporate business tax accounted for 15 percent of the state's revenue base. In 2002 it was down to 4 percent. Last year, of the 50 largest employers in the State of New Jersey, 30 paid only $200 in corporate business taxes.

The sad reality was, by virtue of using loopholes and corporate shenanigans, companies were moving their corporate business activity to Delaware and escaping their legitimate responsibility. And I want to be very clear, there were many corporations who were abiding by both the spirit and the letter in the law. And ironically those corporations who abided by the purpose of the law were being punished by those who were willing to engage in abusive behavior. And that was unconscionable. And working together on a bipartisan basis, we restructured the corporate business tax, because if we're going to demand responsibility, and yes it is so proper for New Jerseys' working families, then we need to demand responsibility from the corporate community, and the entire community of the State of New Jersey. Literally, no one should be entitled to a free pass. We must demand responsibility equitably, and thoughtfully across the board.

And also, for education, education must be the driving compulsion and passion of our administration. We have literally hundreds of grammar schools all across New Jersey where 30 percent of the 3rd graders can't read at or above 3rd grade reading levels. We knew if we lose those children in third grade there's a high probability they will never, ever gain age appropriate literacy. That's why we are investing over the next 4 years $40 million in a major literacy initiative, to hold the promise of every child, to lift not only the floor, but the ceiling, and to improve the opportunity of our children. And we're also working cooperatively with the business community.

I publicly want to thank the Pfizer Corporation, PSE&G, for working to provide for career academies, where our children learn technical skills so that they're competitive in the new economy. And we're also moving forward with an $8.6 billion school construction program to ensure that every child has access to a 21st Century school. And we're building those schools with children and young men and women who live in those very communities. We're setting aside $30 million to train inner city youth and women, to provide them opportunities, whether as plumbers, or carpenters, or pipe fitters, to ensure that they have the skills necessary to compete in the new economy.

And as New Jersey, Benjamin Franklin called us that valley of humility between the mountains of conceit of New York and Philadelphia. Well, I call us the premier Mid Atlantic access point for the Eastern Seaboard. And we're investing $2 billion in our roadways, in our infrastructure, Port Newark and Elizabeth. And I particularly want to publicly recognize the efforts of Bill Weldon, Chairman and CEO of Johnson and Johnson, and President Shirley Tilton of Princeton University who are leading a reinvigorated prosperity New Jersey, as we bring the state, the university community, and the private sector together a forge a new prosperity for New Jersey, a new paradigm for excellence.

But, let me be blunt, closing the budget deficit, while providing incentives for economic growth and economic opportunity was hard work. It took our responsibility to modify my plans for governorship, requiring us to demand fiscal responsibility for the entirety of the State of New Jersey. But, I believe what people want is not false promises, but straight talk, honesty, directness. People want to be assured a governor and the government are utilizing their dollars responsibly, ethically, and intelligently. Americans yearn for a no nonsense approach to get the job done, set the goals, and to work cooperatively. I believe the DLC has always been at the forefront of this mission, and this message, and I am confident, in each of our states, and as a united nation, we must continue to confront the challenges head on. And I confirm that the best days of the States of New Jersey are in front of us.

But, today, again, I ask us to reaffirm our commitment to fiscal responsibility and economic opportunity. I am confident that in this room as it was ten years ago, there is the necessary leadership and ideas to provide for the right direction for the Democratic Party, such that end of the day it would have been the DLC, and this great party that put our nation back on the right track.

Thank you, and godspeed.