Text: State of the Union Address

Jan. 23, 2007 — -- Madam Speaker, Vice President Cheney, Members of Congress, distinguished guests, and fellow citizens:

This rite of custom brings us together at a defining hour -- when decisions are hard and courage is tested. We enter the year 2007 with large endeavors under way, and others that are ours to begin.

In all of this, much is asked of us. We must have the will to face difficult challenges and determined enemies -- and the wisdom to face them together.

Some in this Chamber are new to the House and Senate -- and I congratulate the Democratic majority. Congress has changed, but our responsibilities have not. Each of us is guided by our own convictions -- and to these we must stay faithful. Yet we are all held to the same standards, and called to serve the same good purposes:

To extend this Nation's prosperity … to spend the people's money wisely … to solve problems, not leave them to future generations … to guard America against all evil, and to keep faith with those we have sent forth to defend us.

We are not the first to come here with government divided and uncertainty in the air. Like many before us, we can work through our differences, and achieve big things for the American people. Our citizens don't much care which side of the aisle we sit on -- as long as we are willing to cross that aisle when there is work to be done. Our job is to make life better for our fellow Americans, and help them to build a future of hope and opportunity -- and this is the business before us tonight.

A future of hope and opportunity begins with a growing economy -- and that is what we have. We are now in the 41st month of uninterrupted job growth -- in a recovery that has created 7.2 million new jobs … so far. Unemployment is low, inflation is low, and wages are rising. This economy is on the move -- and our job is to keep it that way, not with more government but with more enterprise.

Next week, I will deliver a full report on the state of our economy. Tonight, I want to discuss three economic reforms that deserve to be priorities for this Congress.

First, we must balance the federal budget. We can do so without raising taxes. What we need to do is impose spending discipline in Washington, D.C. We set a goal of cutting the deficit in half by 2009 -- and met that goal three years ahead of schedule. Now let us take the next step. In the coming weeks, I will submit a budget that eliminates the federal deficit within the next five years. I ask you to make the same commitment. Together, we can restrain the spending appetite of the federal government, and balance the federal budget.

Next, there is the matter of earmarks. These special interest items are often slipped into bills at the last hour -- when not even C-SPAN is watching. In 2005 alone, the number of earmarks grew to over 13,000 and totaled nearly $18 billion. Even worse, over 90 percent of earmarks never make it to the floor of the House and Senate -- they are dropped into Committee reports that are not even part of the bill that arrives on my desk. You did not vote them into law. I did not sign them into law.

Yet they are treated as if they have the force of law. The time has come to end this practice. So let us work together to reform the budget process … expose every earmark to the light of day and to a vote in Congress … and cut the number and cost of earmarks at least in half by the end of this session.

Finally, to keep this economy strong we must take on the challenge of entitlements. Social Security and Medicare and Medicaid are commitments of conscience -- and so it is our duty to keep them permanently sound. Yet we are failing in that duty -- and this failure will one day leave our children with three bad options: huge tax increases, huge deficits, or huge and immediate cuts in benefits. Everyone in this Chamber knows this to be true -- yet somehow we have not found it in ourselves to act. So let us work together and do it now. With enough good sense and good will, you and I can fix Medicare and Medicaid -- and save Social Security.

Spreading opportunity and hope in America also requires public schools that give children the knowledge and character they need in life. Five years ago, we rose above partisan differences to pass the No Child Left Behind Act -- preserving local control, raising standards in public schools, and holding those schools accountable for results. And because we acted, students are performing better in reading and math, and minority students are closing the achievement gap.

Now the task is to build on this success, without watering down standards … without taking control from local communities … and without backsliding and calling it reform. We can lift student achievement even higher by giving local leaders flexibility to turn around failing schools … and by giving families with children stuck in failing schools the right to choose something better.

We must increase funds for students who struggle -- and make sure these children get the special help they need. And we can make sure our children are prepared for the jobs of the future, and our country is more competitive, by strengthening math and science skills. The No Child Left Behind Act has worked for America's children -- and I ask Congress to reauthorize this good law.

A future of hope and opportunity requires that all our citizens have affordable and available health care. When it comes to health care, government has an obligation to care for the elderly, the disabled, and poor children. We will meet those responsibilities. For all other Americans, private health insurance is the best way to meet their needs. But many Americans cannot afford a health insurance policy.

Tonight, I propose two new initiatives to help more Americans afford their own insurance. First, I propose a standard tax deduction for health insurance that will be like the standard tax deduction for dependents. Families with health insurance will pay no income or payroll taxes on $15,000 of their income. Single Americans with health insurance will pay no income or payroll taxes on $7,500 of their income. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills.

At the same time, this reform will level the playing field for those who do not get health insurance through their job. For Americans who now purchase health insurance on their own, my proposal would mean a substantial tax savings -- $4,500 for a family of four making $60,000 a year. And for the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach. Changing the tax code is a vital and necessary step to making health care affordable for more Americans.

My second proposal is to help the states that are coming up with innovative ways to cover the uninsured. States that make basic private health insurance available to all their citizens should receive federal funds to help them provide this coverage to the poor and the sick. I have asked the secretary of Health and Human Services to work with Congress to take existing federal funds and use them to create "affordable choices" grants. These grants would give our Nation's governors more money and more flexibility to get private health insurance to those most in need.

There are many other ways that Congress can help. We need to expand Health Savings Accounts … help small businesses through Association Health Plans … reduce costs and medical errors with better information technology … encourage price transparency … and protect good doctors from junk lawsuits by passing medical liability reform. And in all we do, we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors.