THE
PRESIDENT: Mr. Speaker, Mr. Vice President, members of Congress: It's
a great privilege to be here to outline a new budget and a new approach
for governing our great country. I thank you for your invitation to
speak here tonight. I know Congress had to formally invite me, and it
could have been a close vote. (Laughter.) So, Mr. Vice President, I
appreciate you being here to break the tie. (Laughter.)
I want to thank so many of you who have accepted my
invitation to come to the White House to discuss important
issues. We're off to a good start. I will continue to meet with you
and ask for your input. You have been kind and candid, and I thank you
for making a new President feel welcome. (Applause.)
The last time I visited the Capitol, I came to take an oath
on the steps of this building. I pledged to honor our Constitution and
laws. (Applause.) And I asked you to join me in setting a tone of
civility and respect in Washington. (Applause.)
I hope America is noticing the difference, because we're
making progress. Together, we are changing the tone in the Nation's
Capital. And this spirit of respect and cooperation is vital, because,
in the end, we will be judged not only by what we say or how we say it,
we will be judged by what we're able to accomplish.
America today is a nation with great challenges, but
greater resources. An artist using statistics as a brush could paint
two very different pictures of our country. One would have warning
signs: increasing layoffs, rising energy prices, too many failing
schools, persistent poverty, the stubborn vestiges of racism. Another
picture would be full of blessings: a balanced budget, big surpluses, a
military that is second to none, a country at peace with its neighbors,
technology that is revolutionizing the world, and our greatest strength
-- concerned citizens who care for our country and care for each other.
Neither picture is complete in and of itself. And tonight
I challenge and invite Congress to work with me to use the resources of
one picture to repaint the other; to direct the advantages of our time
to solve the problems of our people. Some of these resources will come
from government. Some, but not all.
Year after year in Washington, budget debates seem to come
down to an old, tired argument: on one side, those who want more
government, regardless of the cost; on the other, those who want less
government, regardless of the need. We should leave those arguments to
the last century, and chart a different course. (Applause.)
Government has a role, and an important role. Yet, too
much government crowds out initiative and hard work, private charity and
the private economy. Our new governing vision says government should be
active, but limited; engaged, but not overbearing. And my budget is
based on that philosophy.
It is reasonable, and it is responsible. It meets our
obligations, and funds our growing needs. We increase spending next
year for Social Security and Medicare, and other entitlement programs,
by $81 billion. We've increased spending for discretionary programs by
a very responsible 4 percent, above the rate of inflation. My plan pays
down an unprecedented amount of our national debt. And then, when money
is still left over, my plan returns it to the people who earned it in
the first place. (Applause.)
A budget's impact is counted in dollars, but measured in
lives. Excellent schools, quality health care, a secure retirement, a
cleaner environment, a stronger defense -- these are all important
needs, and we fund them. The highest percentage increase in our budget
should go to our children's education. (Applause.) Education is not my
top priority -- education is my top priority and, by supporting this
budget, you'll make it yours, as well.
Reading is the foundation of all learning. So during the
next five years, we triple spending, adding $5 billion to help every
child in America learn to read. Values are important, so we've tripled
funding for character education to teach our children not only reading
and writing, but right from wrong. (Applause.)
We've increased funding to train and recruit teachers,
because we know a good education starts with a good teacher. And I have
a wonderful partner in this effort. I like teachers so much, I married
one. (Applause.) Laura has begun a new effort to recruit Americans to
the profession that will shape our future -- teaching. She will travel
across America to promote sound teaching practices and early reading
skills in our schools and in programs such as Head Start.
When it comes to our schools, dollars alone do not always
make the difference. Funding is important, and so is reform. So we
must tie funding to higher standards and accountability for
results. (Applause.)
I believe in local control of schools. We should not, and
we will not, run public schools from Washington, D.C. (Applause.) Yet
when the federal government spends tax dollars, we must insist on
results. Children should be tested on basic reading and math skills
every year between grades three and eight. Measuring is the only way to
know whether all our children are learning. And I want to know, because
I refuse to leave any child behind in America. (Applause.)
Critics of testing contend it distracts from
learning. They talk about teaching to the test. But let's put that
logic to the test. If you test a child on basic math and reading
skills, and you're teaching to the test, you're teaching math and
reading. And that's the whole idea. (Applause.) As standards rise,
local schools will need more flexibility to meet them. So we must
streamline the dozens of federal education programs into five, and let
states spend money in those categories as they see fit. (Applause.)
Schools will be given a reasonable chance to improve and
the support to do so. Yet, if they don't, if they continue to fail, we
must give parents and students different options -- a better public
school, a private school, tutoring or a charter school. (Applause.) In
the end, every child in a bad situation must be given a better choice
because, when it comes to our children, failure is simply not an
option. (Applause.)
Another priority in my budget is to keep the vital promises
of Medicare and Social Security, and together we will do so. To meet
the health care needs of all America's seniors, we double the Medicare
budget over the next 10 years. My budget dedicates $238 billion to
Medicare next year alone, enough to fund all current programs and to
begin a new prescription drug benefit for low-income
seniors. (Applause.) No senior in America should have to choose
between buying food and buying prescriptions. (Applause.)
To make sure the retirement savings of America's seniors
are not diverted in any other program, my budget protects all $2.6
trillion of the Social Security surplus for Social Security, and for
Social Security alone. (Applause.)
My budget puts a priority on access to health care, without
telling Americans what doctor they have to see or what coverage they
must choose. Many working Americans do not have health care coverage,
so we will help them buy their own insurance with refundable tax
credits. (Applause.) And to provide quality care in low-income
neighborhoods, over the next five years we will double the number of
people served at community health care centers. (Applause.)
And we will address the concerns of those who have health
coverage, yet worry their insurance company doesn't care and won't pay.
Together this Congress and this President will find common ground to
make sure doctors make medical decisions, and patients get the health
care they deserve with a patients' bill of rights. (Applause.)
When it comes to their health, people want to get the
medical care they need, not be forced to go to court because they didn't
get it. We will ensure access to the courts for those with legitimate
claims. But first, let's put in place a strong, independent review so
we promote quality health care, not frivolous lawsuits. (Applause.)
My budget also increases funding for medical research,
which gives hope to many who struggle with serious disease. Our prayers
tonight are with one of your own who is engaged in his own fight against
cancer -- a fine representative, and a good man, Congressman Joe
Moakley. (Applause.) I can think of no more appropriate tribute to Joe
than to have the Congress finish the job of doubling the budget for the
National Institutes of Health. (Applause.)
My new Freedom Initiative for Americans with Disabilities
funds new technologies, expands opportunities to work, and makes our
society more welcoming. For the more than 50 million Americans with
disabilities, we need to break down barriers to equality. (Applause.)
The budget I propose to you also supports the people who
keep our country strong and free, the men and women who serve in the
United States military. (Applause.) I'm requesting $5.7 billion in
increased military pay and benefits, and health care and housing. Our
men and women in uniform give America their best and we owe them our
support. (Applause.)
America's veterans honored their commitment to our country
through their military service. I will honor our commitment to them
with a million-dollar increase to ensure better access to quality care
and faster decisions on benefit claims. (Applause.)
My budget will improve our environment by accelerating the
cleanup of toxic brownfields. And I propose we make a major investment
in conservation by fully funding the Land and Water Conservation Fund.
(Applause.) Our national parks have a special place in our country's
life. Our parks are places of great natural beauty and history. As good
stewards, we must leave them better than we found them. So I propose
providing $4.9 billion over five years for the upkeep of these national
treasures. (Applause.)
And my budget adopts a hopeful new approach to help the
poor and the disadvantaged. We must encourage and support the work of
charities and faith-based and community groups that offer help and love
one person at a time. (Applause.) These groups are working in every
neighborhood in America to fight homelessness and addiction and domestic
violence; to provide a hot meal or a mentor or a safe haven for our
children. Government should welcome these groups to apply for funds, not
discriminate against them. (Applause.)
Government cannot be replaced by charities or volunteers.
Government should not fund religious activities. (Applause.) But our
nation should support the good works of these good people who are
helping their neighbors in need. (Applause.) So I propose allowing all
taxpayers, whether they itemize or not, to deduct their charitable
contributions. Estimates show this could encourage as much as $14
billion a year in new charitable giving, money that will save and change
lives. (Applause.)
Our budget provides more than $700 million over the next 10
years for a federal compassion capital fund, with a focused and noble
mission, to provide a mentor to the more than 100 million children with
a parent in prison, and to support other local efforts to fight
illiteracy, teen pregnancy, drug addiction and other difficult
problems. (Applause.)
With us tonight is the Mayor of Philadelphia. Please help
me welcome Mayor John Street. (Applause.) Mayor Street has encouraged
faith-based and community organizations to make a significant difference
in Philadelphia. He's invited me to his city this summer to see
compassionate action. I'm personally aware of just how effective the
Mayor is. Mayor Street's a Democrat. (Applause.) Let the record show,
I lost his city, big time. (Applause.) But some things are bigger than
politics. So I look forward to coming to your city, to see your
faith-based programs in action. (Applause.)
As government promotes compassion, it also must promote
justice. Too many of our citizens have cause to doubt our nation's
justice, when the law points a finger of suspicion at groups, instead of
individuals. All our citizens are created equal, and must be treated
equally. (Applause.)
Earlier today, I asked John Ashcroft, the Attorney General,
to develop specific recommendations to end racial profiling. It's wrong
and we will end it in America. (Applause.) In so doing, we will not
hinder the work of our nation's brave police officers. They protect us
every day -- often at great risk. (Applause.) But by stopping the
abuses of a few, we will add to the public confidence our police
officers earn and deserve. (Applause.)
My budget has funded a responsible increase in our ongoing
operations. It has funded our nation's important priorities. It has
protected Social Security and Medicare. And our surpluses are big
enough that there is still money left over.
Many of you have talked about the need to pay down our
national debt. I listened, and I agree. (Applause.) We owe it to our
children and grandchildren to act now, and I hope you will join me to
pay down $2 trillion in debt during the next 10 years. (Applause.) At
the end of those 10 years, we will have paid down all the debt that is
available to retire. (Applause.) That is more debt, repaid more
quickly than has ever been repaid by any nation at any time in
history. (Applause.)
We should also prepare for the unexpected, for the
uncertainties of the future. We should approach our nation's budget as
any prudent family would, with a contingency fund for emergencies or
additional spending needs. For example, after a strategic review, we
may need to increase defense spending. We may need to increase spending
for our farmers or additional money to reform Medicare. And so, my
budget sets aside almost a trillion dollars over 10 years for additional
needs. That is one trillion additional reasons you can feel comfortable
supporting this budget. (Applause.)
We have increased our budget at a responsible 4
percent. We have funded our priorities. We paid down all the available
debt. We have prepared for contingencies. And we still have money left
over.
Yogi Berra once said, "When you come to a fork in the road,
take it." (Laughter.) Now, we come to a fork in the road; we have two
choices. Even though we have already met our needs, we could spend the
money on more and bigger government. That's the road our nation has
traveled in recent years.
Last year, government spending shot up 8 percent. That's far
more than our economy grew, far more than personal income grew, and far
more than the rate of inflation. If you continue on that road, you will
spend the surplus and have to dip into Social Security to pay other
bills. (Applause.) Unrestrained government spending is a dangerous road
to deficits, so we must take a different path. (Applause.) The other
choice is to let the American people spend their own money to meet their
own needs. (Applause.)
I hope you will join me in standing firmly on the side of
the people. You see, the growing surplus exists because taxes are too
high and government is charging more than it needs. The people of
America have been overcharged and, on their behalf, I am here asking for
a refund. (Applause.)
Some say my tax plan is too big. (Applause.) Others say
it's too small. (Applause.) I respectfully
disagree. (Laughter.) This plan is just right. (Applause.) I didn't
throw darts at the board to come up with a number for tax relief. I
didn't take a poll or develop an arbitrary formula that might sound
good. I looked at problems in the Tax Code and calculated the cost to
fix them.
A tax rate of 15 percent is too high for those who earn low
wages, so we must lower the rate to 10 percent. (Applause.) No one
should pay more than a third of the money they earn in federal income
taxes, so we lowered the top rate to 33 percent. (Applause.)
This reform will be welcome relief for America's small
businesses, which often pay taxes at the highest rate. And help for
small business means jobs for Americans. (Applause.) We simplified the
Tax Code by reducing the number of tax rates from the current five rates
to four lower ones, 10 percent, 15, 25 and 33 percent. In my plan, no
one is targeted in or targeted out. Everyone who pays income taxes will
get relief. (Applause.)
Our government should not tax, and thereby discourage
marriage, so we reduced the marriage penalty. (Applause.) I want to
help families rear and support their children, so we doubled the child
credit to $1,000 per child. (Applause.) It's not fair to tax the same
earnings twice -- once when you earn them, and again when you die -- so
we must repeal the death tax. (Applause.)
These changes add up to significant help. A typical family
with two children will save $1,600 a year on their federal income
taxes. Now, $1,600 may not sound like a lot to some, but it means a lot
to many families: $1,600 buys gas for two cars for an entire year; it
pays tuition for a year at a community college; it pays the average
family grocery bill for three months. That's real money.
With us tonight representing many American families are
Steven and Josefina Ramos. (Applause.) They are from
Pennsylvania. (Applause.) But they could be from any one of your
districts. Steven is the network administrator for a school
district. Josefina is a Spanish teacher at a charter school. And they
have a two-year-old daughter.
Steven and Josefina tell me they pay almost $8,000 a year
in federal income taxes. My plan will save them more than $2,000. Let
me tell you what Steven says: "Two thousand dollars a year means a lot
to my family. If we had this money, it would help us reach our goal of
paying off our personal debt in two years' time." After that, Steven
and Josefina want to start saving for Lianna's college education.
My attitude is, government should never stand in the way of
families achieving their dreams. (Applause.) And as we debate this
issue, always remember, the surplus is not the government's money, the
surplus is the people's money. (Applause.)
For lower-income families, my tax plan restores basic
fairness. Right now, complicated tax rules punish hard work. A waitress
supporting two children on $25,000 a year can lose nearly half of every
additional dollar she earns above the $25,000. Her overtime, her
hardest hours, are taxed at nearly 20 percent. This sends a terrible
message: you'll never get ahead. But America's message must
be different. We must honor hard work, never punish
it. (Applause.) With tax relief, overtime will no longer be over-taxed
time for the waitress. (Applause.) People with the smallest
incomes will get the highest percentage of reductions. And millions of
additional American families will be removed from the income tax rolls
entirely. (Applause.)
Tax relief is right and tax relief is urgent. The long
economic expansion that began almost 10 years ago is faltering. Lower
interest rates will eventually help, but we cannot assume they will do
the job all by themselves.
Forty years ago, and then 20 years ago, two Presidents, one
Democrat, one Republican, John F. Kennedy and Ronald Reagan, advocated
tax cuts to, in President Kennedy's words, get this country moving
again. They knew then what we must do now. To create economic growth
and opportunity, we must put money back into the hands of the people who
buy goods and create jobs. (Applause.)
We must act quickly. The Chairman of the Federal Reserve
has testified before Congress that tax cuts often come too late to
stimulate economic recovery. So I want to work with you to give our
economy an important jump-start by making tax relief
retroactive. (Applause.)
We must act now because it is the right thing to do. We
must also act now because we have other things to do. We must show
courage to confront and resolve tough challenges, to restructure our
nation's defenses, to meet our growing need for energy, and to reform
Medicare and Social Security.
America has a window of opportunity to extend and secure
our present peace by promoting a distinctly American
internationalism. We will work with our allies and friends to be a
force for good and a champion of freedom. We will work for free
markets, free trade and freedom from oppression. Nations making
progress toward freedom will find America is their friend. We will
promote our values. We will promote the peace. And we need a strong
military to keep the peace.
But our military was shaped to confront the challenges of
the past. So I've asked the Secretary of Defense to review America's
Armed Forces and prepare to transform them to meet emerging threats. My
budget makes a down payment on the research and development that will be
required. Yet, in our broader transformation effort, we must put
strategy first, then spending. Our defense vision will drive our
defense budget, not the other way around. (Applause.)
Our nation also needs a clear strategy to confront the
threats of the 21st century -- threats that are more widespread and less
certain. They range from terrorists who threaten with bombs to tyrants
in rogue nations intent upon developing weapons of mass destruction. To
protect our own people, our allies and friends, we must develop and we
must deploy effective missile defenses. (Applause.)
And as we transform our military, we can discard Cold War
relics, and reduce our own nuclear forces to reflect today's
needs. (Applause.) A strong America is the world's best hope for peace
and freedom.
Yet the cause of freedom rests on more than our ability to
defend ourselves and our allies. Freedom is exported every day, as we
ship goods and products that improve the lives of millions of
people. Free trade brings greater political and personal freedom. Each
of the previous five Presidents has had the ability to negotiate far
reaching trade agreements. Tonight I ask you to give me the strong hand
of presidential trade promotion authority, and to do so
quickly. (Applause.)
As we meet tonight, many citizens are struggling with the
high cost of energy. We have a serious energy problem that demands a
national energy policy. (Applause.) The West is confronting a major
energy shortage that has resulted in high prices and uncertainty. I've
asked federal agencies to work with California officials to help speed
construction of new energy sources, and I have direct Vice President
Cheney, Commerce Secretary Evans, Energy Secretary Abraham and other
senior members in my administration to develop a national energy policy.
(Applause.)
Our energy demand outstrips our supply. We can produce
more energy at home while protecting our environment, and we
must. (Applause.) We can produce more electricity to meet demand, and
we must. (Applause.) We can promote alternative energy sources and
conservation, and we must. (Applause.) America must become more
energy-independent, and we will. (Applause.)
Perhaps the biggest test of our foresight and courage will
be reforming Medicare and Social Security. Medicare's finances are
strained and its coverage is outdated. Ninety-nine percent of
employer-provided health plans offer some form of prescription drug
coverage; Medicare does not. The framework for reform has been
developed by Senators Frist and Breaux and Congressman Thomas, and now
is the time to act. (Applause.)
Medicare must be modernized, and we must make sure that
every senior on Medicare can choose a health care plan that offers
prescription drugs. (Applause.)
Seven years from now, the baby boom generation will begin
to claim Social Security benefits. Every one in this chamber knows that
Social Security is not prepared to fully fund their retirement. And we
only have a couple of years to get prepared. Without reform, this
country will one day awaken to a stark choice: either a drastic rise in
payroll taxes or a radical cut in retirement benefits.
There is a better way. This spring I will form a
presidential commission to reform Social Security. The commission will
make its recommendations by next fall. Reform should be based on these
principles: It must preserve the benefits of all current retirees and
those nearing retirement. It must return Social Security to sound
financial footing. And it must offer personal savings accounts to
younger workers who want them. (Applause.)
Social Security now offers workers a return of less than 2
percent on the money they pay into the system. To save the system, we
must increase that by allowing younger workers to make safe, sound
investments that yield a higher rate of return. Ownership, access to
wealth and independence should not be the privilege of the few. They
are the hope of every American, and we must make them the foundation of
Social Security. (Applause.)
By confronting the tough challenge of reform, by being
responsible with our budget, we can earn the trust of the American
people. And we can add to that trust by enacting fair and balanced
election and campaign reforms. (Applause.)
The agenda I have set before you tonight is worthy of a
great nation. America is a nation at peace, but not a nation at
rest. Much has been given to us, and much is expected. Let us agree to
bridge old divides. But let us also agree that our goodwill must be
dedicated to great goals. Bipartisan is more than minding our
matters. It is doing our duty. (Applause.)
No one can speak in this Capitol and not be awed by its
history. As so many turning points, debates in these chambers have
reflected the collected or divided conscience of our country. And when
we walk through Statuary Hall and see those men and women of marble,
we're reminded of their courage and achievement.
Yet America's purpose is never found only in statues or
history. America's purpose always stands before us. Our generation must
show courage in a time of blessing, as our nation has always shown in
times of crisis. And our courage, issue by issue, can gather to
greatness and serve our country. This is the privilege and
responsibility we share. And if we work together, we can prove that
public service is noble.
We all came here for a reason. We all have things we want
to accomplish and promises to keep. Juntos podemos -- together we can.
(Applause.)
We can make Americans proud of their government. Together
we can share in the credit of making our country more prosperous and
generous and just, and earn from our conscience and from our fellow
citizens the highest possible praise: Well done, good and faithful
servants.
Thank you all. Good night and God bless. (Applause.)