Front matter (continued 2)

Because people need to be able to train for new jobs and careers in today's fast-changing economy, we're also revitalizing America's community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old. And she told me she's earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams too. As Kathy said, "I hope it tells them to never give up."

If we take these steps, if we raise expectations for every child and give them the best possible chance at an education, from the day they are born until the last job they take, we will reach the goal that I set 2 years ago: By the end of the decade, America will once again have the highest proportion of college graduates in the world.

One last point about education: Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet they live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.

Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. And I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws, and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult. I know it will take time. But tonight, let's agree to make that effort. And let's stop expelling talented, responsible young people who could be staffing our research labs or starting a new business, who could be further enriching this Nation.

The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information, from high-speed rail to high- speed Internet.

Our infrastructure used to be the best, but our lead has slipped. South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our Nation's infrastructure, they gave us a D.

We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, constructed the Interstate Highway System. The jobs created by these projects didn't just come from laying down track or pavement. They came from businesses that opened near a town's new train station or the new off-ramp.

So over the last 2 years, we've begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. And tonight I'm proposing that we redouble those efforts.

We'll put more Americans to work repairing crumbling roads and bridges. We'll make sure this is fully paid for, attract private investment, and pick projects based [on]* what's best for the economy, not politicians.

Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail. This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying, without the pat-down. [Laughter] As we speak, routes in California and the Midwest are already underway.

Within the next 5 years, we'll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans. This isn't just about--this isn't about faster Internet or fewer dropped calls. It's about connecting every part of America to the digital age. It's about a rural community in Iowa or Alabama where farmers and small-business owners will be able to sell their products all over the world. It's about a firefighter who can download the design of a burning building onto a handheld device, a student who can take classes with a digital textbook, or a patient who can have face-to-face video chats with her doctor.

All these investments--in innovation, education, and infrastructure-- will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.

For example, over the years, a parade of lobbyists has rigged the Tax Code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.

So tonight I'm asking Democrats and Republicans to simplify the system, get rid of the loopholes, level the playing field, and use the savings to lower the corporate tax rate for the first time in 25 years without adding to our deficit. It can be done.

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014. Because the more we export, the more jobs we create here at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor, Democrats and Republicans, and I ask this Congress to pass it as soon as possible.

Now, before I took office, I made it clear that we would enforce our trade agreements and that I would only sign deals that keep faith with American workers and promote American jobs. That's what we did with Korea, and that's what I intend to do as we pursue agreements with Panama and Colombia and continue our Asia-Pacific and global trade talks.

To reduce barriers to growth and investment, I've ordered a review of Government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That's what we've done in this country for more than a century. It's why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It's why we have speed limits and child labor laws. It's why last year, we put in place consumer protections against hidden fees and penalties by credit card companies and new rules to prevent another financial crisis. And it's why we passed reform that finally prevents the health insurance industry from exploiting patients.

Now, I have heard rumors that a few of you still have concerns about our new health care law. [Laughter] So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.

What I'm not willing to do--what I'm not willing to do--is go back to the days when insurance companies could deny someone coverage because of a preexisting condition.

I'm not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I'm not willing to tell Jim Houser, a small-businessman from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their patients'--parents' coverage.

So I say to this Chamber tonight: Instead of refighting the battles of the last 2 years, let's fix what needs fixing, and let's move forward.

Now, the final critical step in winning the future is to make sure we aren't buried under a mountain of debt.

We are living with a legacy of deficit spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people's pockets.

But now that the worst of the recession is over, we have to confront the fact that our Government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a Government that does the same.

So tonight I am proposing that starting this year, we freeze annual domestic spending for the next 5 years. Now, this would reduce the deficit by more than $400 billion over the next decade and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was President.

This freeze will require painful cuts. Already, we've frozen the salaries of hard-working Federal employees for the next 2 years. I've proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.

Now, I recognize that some in this Chamber have already proposed deeper cuts, and I'm willing to eliminate whatever we can honestly afford to do without. But let's make sure that we're not doing it on the backs of our most vulnerable citizens. And let's make sure that what we're cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you're flying high at first, but it won't take long before you feel the impact. [Laughter]

Now, most of the cuts and savings I've proposed only address annual domestic spending, which represents a little more than 12 percent of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won't.

The bipartisan fiscal commission I created last year made this crystal clear. I don't agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it, in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.

This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. The health insurance law we passed last year will slow these rising costs, which is part of the reason that nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.

To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities, without slashing benefits for future generations, and without subjecting Americans' guaranteed retirement income to the whims of the stock market.

And if we truly care about our deficit, we simply can't afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans. Before we take money away from our schools or scholarships away from our students, we should ask millionaires to give up their tax break. It's not a matter of punishing their success, it's about promoting America's success.

In fact, the best thing we could do on taxes for all Americans is to simplify the individual Tax Code. This will be a tough job, but members of both parties have expressed an interest in doing this, and I am prepared to join them.

So now is the time to act. Now is the time for both sides and both Houses of Congress, Democrats and Republicans, to forge a principled compromise that gets the job done. If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future.

Let me take this one step further. We shouldn't just give our people a Government that's more affordable, we should give them a Government that's more competent and more efficient. We can't win the future with a Government of the past.

We live and do business in the Information Age, but the last major reorganization of the Government happened in the age of black-and-white TV. There are 12 different agencies that deal with exports. There are at least five different agencies that deal with housing policy. Then there's my favorite example: The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater. [Laughter] I hear it gets even more complicated once they're smoked. [Laughter]

Now, we've made great strides over the last 2 years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We're selling acres of Federal office space that hasn't been used in years, and we'll cut through redtape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the Federal Government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote, and we will push to get it passed.

In the coming year, we'll also work to rebuild people's faith in the institution of Government. Because you deserve to know exactly how and where your tax dollars are being spent, you'll be able to go to a web site and get that information for the very first time in history. Because you deserve to know when your elected officials are meeting with lobbyists, I ask Congress to do what the White House has already done: put that information online. And because the American people deserve to know that special interests aren't larding up legislation with pet projects, both parties in Congress should know this: If a bill comes to my desk with earmarks inside, I will veto it. I will veto it.

The 21st-century Government that's open and competent, a government that lives within its means, an economy that's driven by new skills and new ideas--our success in this new and changing world will require reform, responsibility, and innovation. It will also require us to approach that world with a new level of engagement in our foreign affairs.

Just as jobs and businesses can now race across borders, so can new threats and new challenges. No single wall separates East and West. No one rival superpower is aligned against us.

And so we must defeat determined enemies, wherever they are, and build coalitions that cut across lines of region and race and religion. And America's moral example must always shine for all who yearn for freedom and justice and dignity. And because we've begun this work, tonight we can say that American leadership has been renewed and America's standing has been restored.

Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high. American combat patrols have ended, violence is down, and a new Government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America's commitment has been kept. The Iraq war is coming to an end.

Of course, as we speak, Al Qaida and their affiliates continue to plan attacks against us. Thanks to our intelligence and law enforcement professionals, we're disrupting plots and securing our cities and skies. And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.

We've also taken the fight to Al Qaida and their allies abroad. In Afghanistan, our troops have taken Taliban strongholds and trained Afghan security forces. Our purpose is clear: By preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny Al Qaida the safe haven that served as a launching pad for 9/11.

Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency. There will be tough fighting ahead, and the Afghan Government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them. This year, we will work with nearly 50 countries to begin a transition to an Afghan lead, and this July, we will begin to bring our troops home.

In Pakistan, Al Qaida's leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe havens are shrinking. And we've sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: We will not relent, we will not waver, and we will defeat you.

American leadership can also be seen in the effort to secure the worst weapons of war. Because Republicans and Democrats approved the new START Treaty, far fewer nuclear weapons and launchers will be deployed. Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.

Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian Government now faces tougher sanctions, tighter sanctions than ever before. And on the Korean Peninsula, we stand with our ally South Korea and insist that North Korea keeps its commitment to abandon nuclear weapons.

This is just a part of how we're shaping a world that favors peace and prosperity. With our European allies, we revitalized NATO and increased our cooperation on everything from counterterrorism to missile defense. We've reset our relationship with Russia, strengthened Asian alliances, built new partnerships with nations like India.

This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances across the Americas. Around the globe, we're standing with those who take responsibility, helping farmers grow more food, supporting doctors who care for the sick, and combating the corruption that can rot a society and rob people of opportunity.

Recent events have shown us that what sets us apart must not just be our power; it must also be the purpose behind it. In south Sudan--with our assistance--the people were finally able to vote for independence after years of war. Thousands lined up before dawn. People danced in the streets. One man who lost four of his brothers at war summed up the scene around him. "This was a battlefield for most of my life," he said. "Now we want to be free."

And we saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight let us be clear: The United States of America stands with the people of Tunisia and supports the democratic aspirations of all people.

We must never forget that the things we've struggled for and fought for live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.

Tonight let us speak with one voice in reaffirming that our Nation is united in support of our troops and their families. Let us serve them as well as they've served us, by giving them the equipment they need, by providing them with the care and benefits that they have earned, and by enlisting our veterans in the great task of building our own Nation.

Our troops come from every corner of this country. They're Black, White, Latino, Asian, Native American. They are Christian and Hindu, Jewish and Muslim. And yes, we know that some of them are gay. Starting this year, no American will be forbidden from serving the country they love because of who they love. And with that change, I call on all our college campuses to open their doors to our military recruiters and ROTC. It is time to leave behind the divisive battles of the past. It is time to move forward as one Nation.

We should have no illusions about the work ahead of us. Reforming our schools, changing the way we use energy, reducing our deficit, none of this will be easy. All of it will take time. And it will be harder because we will argue about everything: the costs, the details, the letter of every law.

Of course, some countries don't have this problem. If the central government wants a railroad, they build a railroad, no matter how many homes get bulldozed. If they don't want a bad story in the newspaper, it doesn't get written.

And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth.

We may have differences in policy, but we all believe in the rights enshrined in our Constitution. We may have different opinions, but we believe in the same promise that says this is a place where you can make it if you try. We may have different backgrounds, but we believe in the same dream that says this is a country where anything is possible, no matter who you are, no matter where you come from.

That dream is why I can stand here before you tonight. That dream is why a working class kid from Scranton can sit behind me. [Laughter] That dream is why someone who began by sweeping the floors of his father's Cincinnati bar can preside as Speaker of the House in the greatest nation on Earth.

That dream--that American Dream--is what drove the Allen Brothers to reinvent their roofing company for a new era. It's what drove those students at Forsyth Tech to learn a new skill and work towards the future. And that dream is the story of a small-business owner named Brandon Fisher.

Brandon started a company in Berlin, Pennsylvania, that specializes in a new kind of drilling technology. And one day last summer, he saw the news that halfway across the world, 33 men were trapped in a Chilean mine, and no one knew how to save them.

But Brandon thought his company could help. And so he designed a rescue that would come to be known as Plan B. His employees worked around the clock to manufacture the necessary drilling equipment, and Brandon left for Chile.

Along with others, he began drilling a 2,000-foot hole into the ground, working 3 or 4 hour--3 or 4 days at a time without any sleep. Thirty- seven days later, Plan B succeeded and the miners were rescued. But because he didn't want all of the attention, Brandon wasn't there when the miners emerged. He'd already gone back home, back to work on his next project.

And later, one of his employees said of the rescue, "We proved that Center Rock is a little company, but we do big things."

We do big things.

From the earliest days of our founding, America has been the story of ordinary people who dare to dream. That's how we win the future.

We're a nation that says, "I might not have a lot of money, but I have this great idea for a new company." "I might not come from a family of college graduates, but I will be the first to get my degree." "I might not know those people in trouble, but I think I can help them, and I need to try." "I'm not sure how we'll reach that better place beyond the horizon, but I know we'll get there. I know we will."

We do big things.

The idea of America endures. Our destiny remains our choice. And tonight, more than two centuries later, it's because of our people that our future is hopeful, our journey goes forward, and the state of our Union is strong.

Thank you. God bless you, and may God bless the United States of America.

***

Address Before a Joint Session of Congress on the State of the Union Barack Obama January 24, 2012

Mr. Speaker, Mr. Vice President, Members of Congress, distinguished guests, and fellow Americans: Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought and several thousand gave their lives.

We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in 9 years, there are no Americans fighting in Iraq. For the first time in two decades, Usama bin Laden is not a threat to this country. Most of Al Qaida's top lieutenants have been defeated. The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home.

These achievements are a testament to the courage, selflessness, and teamwork of America's Armed Forces. At a time when too many of our institutions have let us down, they exceed all expectations. They're not consumed with personal ambition. They don't obsess over their differences. They focus on the mission at hand. They work together.

Imagine what we could accomplish if we followed their example. Think about the America within our reach: a country that leads the world in educating its people; an America that attracts a new generation of high-tech manufacturing and high-paying jobs; a future where we're in control of our own energy and our security and prosperity aren't so tied to unstable parts of the world; an economy built to last, where hard work pays off and responsibility is rewarded.

We can do this. I know we can, because we've done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. My grandfather, a veteran of Patton's army, got the chance to go to college on the GI bill. My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.

The two of them shared the optimism of a nation that had triumphed over a depression and fascism. They understood they were part of something larger, that they were contributing to a story of success that every American had a chance to share, the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.

The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot and everyone does their fair share and everyone plays by the same set of rules. What's at stake aren't Democratic values or Republican values, but American values. And we have to reclaim them.

Let's remember how we got here. Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hard-working Americans struggled with costs that were growing, paychecks that weren't, and personal debt that kept piling up.

In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn't afford or understand them. Banks had made huge bets and bonuses with other people's money. Regulators had looked the other way or didn't have the authority to stop the bad behavior.

It was wrong, it was irresponsible, and it plunged our economy into a crisis that put millions out of work, saddled us with more debt, and left innocent, hard-working Americans holding the bag. In the 6 months before I took office, we lost nearly 4 million jobs. And we lost another 4 million before our policies were in full effect.

Those are the facts. But so are these: In the last 22 months, businesses have created more than 3 million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s. Together, we've agreed to cut the deficit by more than $2 trillion. And we've put in place new rules to hold Wall Street accountable so a crisis like this never happens again.

The state of our Union is getting stronger. And we've come too far to turn back now. As long as I'm President, I will work with anyone in this Chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.

No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight I want to speak about how we move forward and lay out a blueprint for an economy that's built to last, an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

Now, this blueprint begins with American manufacturing.

On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world's number-one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly a hundred and sixty thousand jobs.

We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.

What's happening in Detroit can happen in other industries. It can happen in Cleveland and Pittsburgh and Raleigh. We can't bring every job back that's left our shore. But right now it's getting more expensive to do business in places like China. Meanwhile, America is more productive. A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in 15 years, Master Lock's unionized plant in Milwaukee is running at full capacity.

So we have a huge opportunity at this moment to bring manufacturing back. But we have to seize it. Tonight my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.

We should start with our Tax Code. Right now companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it. So let's change it.

First, if you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here in America.

Third, if you're an American manufacturer, you should get a bigger tax cut. If you're a high-tech manufacturer, we should double the tax deduction you get for making your products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.

So my message is simple: It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I will sign them right away.

We're also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over 5 years. With the bipartisan trade agreements we signed into law, we're on track to meet that goal ahead of schedule. And soon there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon there will be new cars on the streets of Seoul imported from Detroit and Toledo and Chicago.

I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don't play by the rules. We've brought trade cases against China at nearly twice the rate as the last administration, and it's made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It's not right when another country lets our movies, music, and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized.

Tonight I'm announcing the creation of a trade enforcement unit that will be charged with investigating unfair trading practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing financing or new markets like Russia. Our workers are the most productive on Earth, and if the playing field is level, I promise you, America will always win.

I also hear from many business leaders who want to hire in the United States, but can't find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that: openings at a time when millions of Americans are looking for work. It's inexcusable, and we know how to fix it.

Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie's tuition, then hired her to help operate their plant.

I want every American looking for work to have the same opportunity as Jackie did. Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job. My administration has already lined up more companies that want to help. Model partnerships between businesses like Siemens and community colleges in places like Charlotte and Orlando and Louisville are up and running. Now you need to give more community colleges the resources they need to become community career centers, places that teach people skills that businesses are looking for right now, from data management to high-tech manufacturing.

And I want to cut through the maze of confusing training programs so that from now on, people like Jackie have one program, one web site, and one place to go for all the information and help that they need. It is time to turn our unemployment system into a reemployment system that puts people to work.

These reforms will help people get jobs that are open today. But to prepare for the jobs of tomorrow, our commitment to skills and education has to start earlier.

For less than 1 percent of what our Nation spends on education each year, we've convinced nearly every State in the country to raise their standards for teaching and learning, the first time that's happened in a generation. But challenges remain, and we know how to solve them.

At a time when other countries are doubling down on education, tight budgets have forced States to lay off thousands of teachers. We know a good teacher can increase the lifetime income of a classroom by over $250,000. A great teacher can offer an escape from poverty to the child who dreams beyond his circumstance. Every person in this Chamber can point to a teacher who changed the trajectory of their lives. Most teachers work tirelessly, with modest pay, sometimes digging into their own pocket for school supplies, just to make a difference.

Teachers matter. So instead of bashing them or defending the status quo, let's offer schools a deal. Give them the resources to keep good teachers on the job and reward the best ones. And in return, grant schools flexibility to teach with creativity and passion, to stop teaching to the test, and to replace teachers who just aren't helping kids learn. That's a bargain worth making.

We also know that when students don't walk away from their education, more of them walk the stage to get their diploma. When students are not allowed to drop out, they do better. So tonight I am proposing that every State--every State--requires that all students stay in high school until they graduate or turn 18.

When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July.

Extend the tuition tax credit we started that saves millions of middle class families thousands of dollars and give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next 5 years.

Of course, it's not enough for us to increase student aid. We can't just keep subsidizing skyrocketing tuition; we'll run out of money. States also need to do their part by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down.

Recently, I spoke with a group of college presidents who have done just that. Some schools redesign courses to help students finish more quickly. Some use better technology. The point is, it's possible. So let me put colleges and universities on notice: If you can't stop tuition from going up, the funding you get from taxpayers will go down. Higher education can't be a luxury. It is an economic imperative that every family in America should be able to afford.

Let's also remember that hundreds of thousands of talented, hard- working students in this country face another challenge: the fact that they aren't yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else. That doesn't make sense.

I believe as strongly as ever that we should take on illegal immigration. That's why my administration has put more boots on the border than ever before. That's why there are fewer illegal crossings than when I took office. The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now.

But if election-year politics keeps Congress from acting on a comprehensive plan, let's at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.

You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. That means women should earn equal pay for equal work. It means we should support everyone who's willing to work and every risk taker and entrepreneur who aspires to become the next Steve Jobs.

After all, innovation is what America has always been about. Most new jobs are created in startups and small businesses. So let's pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. Both parties agree on these ideas. So put them in a bill and get it on my desk this year.

Innovation also demands basic research. Today, the discoveries taking place in our federally financed labs and universities could lead to new treatments that kill cancer cells, but leave healthy ones untouched, new lightweight vests for cops and soldiers that can stop any bullet. Don't gut these investments in our budget. Don't let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet, to new American jobs and new American industries.

And nowhere is the promise of innovation greater than in American-made energy. Over the last 3 years, we've opened millions of new acres for oil and gas exploration, and tonight I'm directing my administration to open more than 75 percent of our potential offshore oil and gas resources. Right now--right now--American oil production is the highest that it's been in 8 years. That's right, 8 years. Not only that, last year, we relied less on foreign oil than in any of the past 16 years.

But with only 2 percent of the world's oil reserves, oil isn't enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy, a strategy that's cleaner, cheaper, and full of new jobs.

We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. Because America will develop this resource without putting the health and safety of our citizens at risk.

The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy. And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock, reminding us that Government support is critical in helping businesses get new energy ideas off the ground.

Now, what's true for natural gas is just as true for clean energy. In 3 years, our partnership with the private sector has already positioned America to be the world's leading manufacturer of high-tech batteries. Because of Federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.

When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55 no one would give him a second chance. But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts. Today, it's hiring workers like Bryan, who said, "I'm proud to be working in the industry of the future."

Our experience with shale gas, our experience with natural gas, shows us that the payoffs on these public investments don't always come right away. Some technologies don't pan out, some companies fail. But I will not walk away from the promise of clean energy. I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.

We've subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable and double down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs.

We can also spur energy innovation with new incentives. The differences in this Chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation. So far, you haven't acted. Well, tonight I will. I'm directing my administration to allow the development of clean energy on enough public land to power 3 million homes. And I'm proud to announce that the Department of Defense, working with us, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history, with the Navy purchasing enough capacity to power a quarter of a million homes a year.

Of course, the easiest way to save money is to waste less energy. So here's a proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be a hundred billion dollars lower over the next decade, and America will have less pollution, more manufacturing, more jobs for construction workers who need them. Send me a bill that creates these jobs.

Building this new energy future should be just one part of a broader agenda to repair America's infrastructure. So much of America needs to be rebuilt. We've got crumbling roads and bridges, a power grid that wastes too much energy, an incomplete high-speed broadband network that prevents a small-business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an Executive order clearing away the redtape that slows down too many construction projects. But you need to fund these projects. Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

There's never been a better time to build, especially since the construction industry was one of the hardest hit when the housing bubble burst. Of course, construction workers weren't the only ones who were hurt. So were millions of innocent Americans who've seen their home values decline. And while Government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief.

And that's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates. No more redtape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust.

Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It's time to apply the same rules from top to bottom. No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.

We've all paid the price for lenders who sold mortgages to people who couldn't afford them and buyers who knew they couldn't afford them. That's why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud or toxic dumping or faulty medical devices, these don't destroy the free market. They make the free market work better.

There's no question that some regulations are outdated, unnecessary, or too costly. In fact, I've approved fewer regulations in the first 3 years of my Presidency than my Republican predecessor did in his. I've ordered every Federal agency to eliminate rules that don't make sense. We've already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next 5 years. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill, because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk. [Laughter]

Now, I'm confident a farmer can contain a milk spill without a Federal agency looking over his shoulder. Absolutely. But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf 2 years ago. I will not back down from protecting our kids from mercury poisoning or making sure that our food is safe and our water is clean. I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny your coverage, or charge women differently than men.

And I will not go back to the days when Wall Street was allowed to play by its own set of rules. The new rules we passed restore what should be any financial system's core purpose: getting funding to entrepreneurs with the best ideas and getting loans to responsible families who want to buy a home or start a business or send their kids to college.

So if you are a big bank or financial institution, you're no longer allowed to make risky bets with your customers' deposits. You're required to write out a "living will" that details exactly how you'll pay the bills if you fail, because the rest of us are not bailing you out ever again. And if you're a mortgage lender or a payday lender or a credit card company, the days of signing people up for products they can't afford with confusing forms and deceptive practices, those days are over. Today, American consumers finally have a watchdog in Richard Cordray, with one job: to look out for them.

We'll also establish a financial crimes unit of highly trained investigators to crack down on large-scale fraud and protect people's investments. Some financial firms violate major antifraud laws because there's no real penalty for being a repeat offender. That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.

And tonight I'm asking my Attorney General to create a special unit of Federal prosecutors and leading State attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

Now, a return to the American values of fair play and shared responsibility will help protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.

Right now our most immediate priority is stopping a tax hike on a hundred and sixty million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let's agree right here, right now. No side issues. No drama. Pass the payroll tax cut without delay. Let's get it done.

When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now because of loopholes and shelters in the Tax Code, a quarter of all millionaires pay lower tax rates than millions of middle class households. Right now Warren Buffett pays a lower tax rate than his secretary.

Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else, like education and medical research, a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both.

The American people know what the right choice is. So do I. As I told the Speaker this summer, I'm prepared to make more reforms that rein in the long-term costs of Medicare and Medicaid and strengthen Social Security, so long as those programs remain a guarantee of security for seniors. But in return, we need to change our Tax Code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes.

Tax reform should follow the Buffett rule. If you make more than a million dollars a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief.

Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

We don't begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich. It's because they understand that when I get a tax break I don't need and the country can't afford, it either adds to the deficit or somebody else has to make up the difference, like a senior on a fixed income or a student trying to get through school or a family trying to make ends meet. That's not right. Americans know that's not right. They know that this generation's success is only possible because past generations felt a responsibility to each other and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility. That's how we'll reduce our deficit. That's an America built to last.

Now, I recognize that people watching tonight have differing views about taxes and debt, energy and health care. But no matter what party they belong to, I bet most Americans are thinking the same thing right about now: Nothing will get done in Washington this year or next year or maybe even the year after that, because Washington is broken.

Can you blame them for feeling a little cynical?

The greatest blow to our confidence in our economy last year didn't come from events beyond our control. It came from a debate in Washington over whether the United States would pay its bills or not. Who benefited from that fiasco?

I've talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad, and it seems to get worse every year.

Now, some of this has to do with the corrosive influence of money in politics. So together, let's take some steps to fix that. Send me a bill that bans insider trading by Members of Congress. I will sign it tomorrow. Let's limit any elected official from owning stocks in industries they impact. Let's make sure people who bundle campaign contributions for Congress can't lobby Congress and vice versa, an idea that has bipartisan support, at least outside of Washington.

Some of what's broken has to do with the way Congress does its business these days. A simple majority is no longer enough to get anything--even routine business--passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a simple rule that all judicial and public service nominations receive a simple up-or-down vote within 90 days.

The executive branch also needs to change. Too often, it's inefficient, outdated, and remote. That's why I've asked this Congress to grant me the authority to consolidate the Federal bureaucracy so that our Government is leaner, quicker, and more responsive to the needs of the American people.

Finally, none of this can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction, that politics is about clinging to rigid ideologies instead of building consensus around commonsense ideas.

I'm a Democrat, but I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves and no more. That's why my education reform offers more competition and more control for schools and States. That's why we're getting rid of regulations that don't work. That's why our health care law relies on a reformed private market, not a Government program.

On the other hand, even my Republican friends who complain the most about Government spending have supported federally financed roads and clean energy projects and Federal offices for the folks back home.

The point is, we should all want a smarter, more effective Government. And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress. With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help. Because when we act together, there's nothing the United States of America can't achieve.

That's the lesson we've learned from our actions abroad over the last few years. Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the Al Qaida operatives who remain are scrambling, knowing that they can't escape the reach of the United States of America.

From this position of strength, we've begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan so that it is never again a source of attacks against America.

As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo, from Sana'a to Tripoli. A year ago, Qadhafi was one of the world's longest serving dictators, a murderer with American blood on his hands. Today, he is gone. And in Syria, I have no doubt that the Asad regime will soon discover that the forces of change cannot be reversed and that human dignity cannot be denied.

How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome. And while it's ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings: men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.

And we will safeguard America's own security against those who threaten our citizens, our friends, and our interests. Look at Iran. Through the power of our diplomacy, a world that was once divided about how to deal with Iran's nuclear program now stands as one. The regime is more isolated than ever before. Its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent.

Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better. And if Iran changes course and meets its obligations, it can rejoin the community of nations.

The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our ironclad commitment--and I mean ironclad--to Israel's security has meant the closest military cooperation between our two countries in history.

We've made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we've built to secure nuclear materials, to the missions we've led against hunger and disease, from the blows we've dealt to our enemies, to the enduring power of our moral example, America is back.

Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about. That's not the message we get from leaders around the world who are eager to work with us. That's not how people feel from Tokyo to Berlin, from Cape Town to Rio, where opinions of America are higher than they've been in years. Yes, the world is changing. No, we can't control every event. But America remains the one indispensable nation in world affairs, and as long as I'm President, I intend to keep it that way.

That's why, working with our military leaders, I've proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. To stay one step ahead of our adversaries, I've already sent this Congress legislation that will secure our country from the growing dangers of cyber threats.

Above all, our freedom endures because of the men and women in uniform who defend it. As they come home, we must serve them as well as they've served us. That includes giving them the care and the benefits they have earned, which is why we've increased annual VA spending every year I've been President. And it means enlisting our veterans in the work of rebuilding our Nation.

With the bipartisan support of this Congress, we're providing new tax credits to companies that hire vets. Michelle and Jill Biden have worked with American businesses to secure a pledge of 135,000 jobs for veterans and their families. And tonight I'm proposing a veterans jobs corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.

Which brings me back to where I began. Those of us who've been sent here to serve can learn a thing or two from the service of our troops. When you put on that uniform, it doesn't matter if you're Black or White, Asian, Latino, Native American; conservative, liberal; rich, poor; gay, straight. When you're marching into battle, you look out for the person next to you or the mission fails. When you're in the thick of the fight, you rise or fall as one unit, serving one nation, leaving no one behind.

You know, one of my proudest possessions is the flag that the SEAL team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats, some may be Republicans, but that doesn't matter. Just like it didn't matter that day in the Situation Room, when I sat next to Bob Gates, a man who was George Bush's Defense Secretary, and Hillary Clinton, a woman who ran against me for President.

All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn't deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job: the pilot who landed the helicopter that spun out of control, the translator who kept others from entering the compound, the troops who separated the women and children from the fight, the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other, because you can't charge up those stairs into darkness and danger unless you know that there's somebody behind you, watching your back.

So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those 50 stars and those 13 stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other's backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great, no mission too hard. As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.

Thank you, God bless you, and God bless the United States of America.

***

Address Before a Joint Session of Congress on the State of the Union Barack Obama February 12, 2013

Please, everybody, have a seat. Mr. Speaker, Mr. Vice President, Members of Congress, fellow Americans: Fifty-one years ago, John F. Kennedy declared to this Chamber that "the Constitution makes us not rivals for power, but partners for progress." "It is my task," he said, "to report the state of the Union; to improve it is the task of us all."

Tonight, thanks to the grit and determination of the American people, there is much progress to report. After a decade of grinding war, our brave men and women in uniform are coming home. After years of grueling recession, our businesses have created over 6 million new jobs. We buy more American cars than we have in 5 years and less foreign oil than we have in 20. Our housing market is healing, our stock market is rebounding, and consumers, patients, and homeowners enjoy stronger protections than ever before.

So together, we have cleared away the rubble of crisis, and we can say with renewed confidence that the state of our Union is stronger.

But we gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded. Our economy is adding jobs, but too many people still can't find full-time employment. Corporate profits have skyrocketed to alltime highs, but for more than a decade, wages and incomes have barely budged.

It is our generation's task, then, to reignite the true engine of America's economic growth: a rising, thriving middle class.

It is our unfinished task to restore the basic bargain that built this country: the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like or who you love.

It is our unfinished task to make sure that this Government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great Nation.

The American people don't expect government to solve every problem. They don't expect those of us in this Chamber to agree on every issue. But they do expect us to put the Nation's interests before party. They do expect us to forge reasonable compromise where we can. For they know that America moves forward only when we do so together and that the responsibility of improving this Union remains the task of us all.

Now, our work must begin by making some basic decisions about our budget, decisions that will have a huge impact on the strength of our recovery.

Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion, mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans. As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.

Now we need to finish the job. And the question is, how?

In 2011, Congress passed a law saying that if both parties couldn't agree on a plan to reach our deficit goal, about a trillion dollars' worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They'd devastate priorities like education and energy and medical research. They would certainly slow our recovery and cost us hundreds of thousands of jobs. And that's why Democrats, Republicans, business leaders, and economists have already said that these cuts-- known here in Washington as the sequester--are a really bad idea.

Now, some in Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training, Medicare, and Social Security benefits. That idea is even worse.

Yes, the biggest driver of our long-term debt is the rising cost of health care for an aging population. And those of us who care deeply about programs like Medicare must embrace the need for modest reforms; otherwise, our retirement programs will crowd out the investments we need for our children and jeopardize the promise of a secure retirement for future generations.

But we can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and the most powerful. We won't grow the middle class simply by shifting the cost of health care or college onto families that are already struggling or by forcing communities to lay off more teachers and more cops and more firefighters. Most Americans--Democrats, Republicans, and Independents--understand that we can't just cut our way to prosperity. They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue and with everybody doing their fair share. And that's the approach I offer tonight.

On Medicare, I'm prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles Commission.

Already, the Affordable Care Act is helping to slow the growth of health care costs. And the reforms I'm proposing go even further. We'll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We'll bring down costs by changing the way our Government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our Government shouldn't make promises we cannot keep, but we must keep the promises we've already made.

To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and the well-connected. After all, why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks? How is that fair? Why is it that deficit reduction is a big emergency justifying making cuts in Social Security benefits, but not closing some loopholes? How does that promote growth?

Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit. We can get this done. The American people deserve a Tax Code that helps small businesses spend less time filling out complicated forms and more time expanding and hiring; a Tax Code that ensures billionaires with high- powered accountants can't work the system and pay a lower rate than their hard-working secretaries; a Tax Code that lowers incentives to move jobs overseas and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America. That's what tax reform can deliver. That's what we can do together.

I realize that tax reform and entitlement reform will not be easy. The politics will be hard for both sides. None of us will get a hundred percent of what we want. But the alternative will cost us jobs, hurt our economy, visit hardship on millions of hard-working Americans. So let's set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future. And let's do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next. We can't do it.

Let's agree right here, right now to keep the people's Government open and pay our bills on time and always uphold the full faith and credit of the United States of America. The American people have worked too hard, for too long, rebuilding from one crisis to see their elected officials cause another.

Now, most of us agree that a plan to reduce the deficit must be part of our agenda. But let's be clear: Deficit reduction alone is not an economic plan. A growing economy that creates good, middle class jobs, that must be the north star that guides our efforts. Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills they need to get those jobs? And how do we make sure that hard work leads to a decent living?

Now, a year and a half ago, I put forward an American Jobs Act that independent economists said would create more than 1 million new jobs. And I thank the last Congress for passing some of that agenda. I urge this Congress to pass the rest. But tonight I'll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago. Let me repeat: Nothing I'm proposing tonight should increase our deficit by a single dime. It is not a bigger Government we need, but a smarter Government that sets priorities and invests in broad-based growth. That's what we should be looking for.

Our first priority is making America a magnet for new jobs and manufacturing. After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past 3. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. And this year, Apple will start making Macs in America again.

There are things we can do right now to accelerate this trend. Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the-art lab where new workers are mastering the 3-D printing that has the potential to revolutionize the way we make almost everything. There's no reason this can't happen in other towns.

So tonight I'm announcing the launch of three more of these manufacturing hubs, where businesses will partner with the Department of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs. And I ask this Congress to help create a network of 15 of these hubs and guarantee that the next revolution in manufacturing is made right here in America. We can get that done.

Now, if we want to make the best products, we also have to invest in the best ideas. Every dollar we invested to map the human genome returned $140 to our economy--every dollar. Today, our scientists are mapping the human brain to unlock the answers to Alzheimer's. They're developing drugs to regenerate damaged organs, devising new materials to make batteries 10 times more powerful. Now is not the time to gut these job-creating investments in science and innovation, now is the time to reach a level of research and development not seen since the height of the space race. We need to make those investments.

Today, no area holds more promise than our investments in American energy. After years of talking about it, we're finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas and the amount of renewable energy we generate from sources like wind and solar, with tens of thousands of good American jobs to show for it. We produce more natural gas than ever before, and nearly everyone's energy bill is lower because of it. And over the last 4 years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

But for the sake of our children and our future, we must do more to combat climate change. Now, it's true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods--all are now more frequent and more intense. We can choose to believe that Superstorm Sandy and the most severe drought in decades and the worst wildfires some States have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science and act before it's too late.

Now, the good news is we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won't act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

And 4 years ago, other countries dominated the clean energy market and the jobs that came with it. And we've begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let's generate even more. Solar energy gets cheaper by the year; let's drive down costs even further. As long as countries like China keep going all in on clean energy, so must we.

Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence. We need to encourage that. And that's why my administration will keep cutting redtape and speeding up new oil and gas permits. That's got to be part of an all-of-the-above plan. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and our water.

In fact, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight I propose we use some of our oil and gas revenues to fund an energy security trust that will drive new research and technology to shift our cars and trucks off oil for good. If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let's take their advice and free our families and businesses from the painful spikes in gas prices we've put up with for far too long.

I'm also issuing a new goal for America: Let's cut in half the energy wasted by our homes and businesses over the next 20 years. We'll work with the States to do it. Those States with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive Federal support to help make that happen.

America's energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they'd rather locate and hire, a country with deteriorating roads and bridges or one with high- speed rail and Internet, high-tech schools, self-healing power grids. The CEO of Siemens America--a company that brought hundreds of new jobs to North Carolina--said that if we upgrade our infrastructure, they'll bring even more jobs. And that's the attitude of a lot of companies all around the world. And I know you want these job-creating projects in your district. I've seen all those ribbon-cuttings. [Laughter]

So tonight I propose a Fix-It-First program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don't shoulder the whole burden, I'm also proposing a partnership to rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods, modern pipelines to withstand a storm, modern schools worthy of our children. Let's prove there's no better place to do business than here in the United States of America, and let's start right away. We can get this done.

And part of our rebuilding effort must also involve our housing sector. The good news is, our housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in 6 years. Home purchases are up nearly 50 percent, and construction is expanding again.

But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who never missed a payment and want to refinance are being told no. That's holding our entire economy back. We need to fix it.

Right now there's a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today's rates. Democrats and Republicans have supported it before, so what are we waiting for? Take a vote and send me that bill. Why are--why would we be against that? Why would that be a partisan issue, helping folks refinance? Right now overlapping regulations keep responsible young families from buying their first home. What's holding us back? Let's streamline the process and help our economy grow.

These initiatives in manufacturing, energy, infrastructure, housing, all these things will help entrepreneurs and small-business owners expand and create new jobs. But none of it will matter unless we also equip our citizens with the skills and training to fill those jobs.

And that has to start at the earliest possible age. Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 4-year-olds are enrolled in a high-quality preschool program. Most middle class parents can't afford a few hundred bucks a week for a private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives. So tonight I propose working with States to make high-quality preschool available to every single child in America. That's something we should be able to do.

Every dollar we invest in high-quality early childhood education can save more than 7 dollars later on: by boosting graduation rates, reducing teen pregnancy, even reducing violent crime. In States that make it a priority to educate our youngest children, like Georgia or Oklahoma, studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, form more stable families of their own. We know this works. So let's do what works and make sure none of our children start the race of life already behind. Let's give our kids that chance.

Let's also make sure that a high school diploma puts our kids on a path to a good job. Right now countries like Germany focus on graduating their high school students with the equivalent of a technical degree from one of our community colleges. So those German kids, they're ready for a job when they graduate high school. They've been trained for the jobs that are there. Now at schools like P-TECH in Brooklyn, a collaboration between New York Public Schools and City University of New York and IBM, students will graduate with a high school diploma and an associate's degree in computers or engineering. We need to give every American student opportunities like this.

And 4 years ago, we started Race to the Top, a competition that convinced almost every State to develop smarter curricula and higher standards, all for about 1 percent of what we spend on education each year. Tonight I'm announcing a new challenge to redesign America's high schools so they better equip graduates for the demands of a high-tech economy. And we'll reward schools that develop new partnerships with colleges and employers and create classes that focus on science, technology, engineering, and math: the skills today's employers are looking for to fill the jobs that are there right now and will be there in the future.

Now, even with better high schools, most young people will need some higher education. It's a simple fact: The more education you've got, the more likely you are to have a good job and work your way into the middle class. But today, skyrocketing costs price too many young people out of a higher education or saddle them with unsustainable debt.

Through tax credits, grants, and better loans, we've made college more affordable for millions of students and families over the last few years. But taxpayers can't keep on subsidizing higher and higher and higher costs for higher education. Colleges must do their part to keep costs down, and it's our job to make sure that they do.

So tonight I ask Congress to change the Higher Education Act so that affordability and value are included in determining which colleges receive certain types of Federal aid. And tomorrow my administration will release a new college scorecard that parents and students can use to compare schools based on a simple criterion: where you can get the most bang for your educational buck.

Now, to grow our middle class, our citizens have to have access to the education and training that today's jobs require. But we also have to make sure that America remains a place where everyone who's willing to work--everybody who's willing to work hard--has the chance to get ahead.

Our economy is stronger when we harness the talents and ingenuity of striving, hopeful immigrants. And right now leaders from the business, labor, law enforcement, faith communities, they all agree that the time has come to pass comprehensive immigration reform. Now is the time to do it. Now is the time to get it done. [Applause] Now is the time to get it done.

Real reform means stronger border security, and we can build on the progress my administration has already made: putting more boots on the southern border than at any time in our history and reducing illegal crossings to their lowest levels in 40 years.

Real reform means establishing a responsible pathway to earned citizenship, a path that includes passing a background check, paying taxes and a meaningful penalty, learning English, and going to the back of the line behind the folks trying to come here legally.

And real reform means fixing the legal immigration system to cut waiting periods and attract the highly skilled entrepreneurs and engineers that will help create jobs and grow our economy.

In other words, we know what needs to be done. And as we speak, bipartisan groups in both Chambers are working diligently to draft a bill, and I applaud their efforts. So let's get this done. Send me a comprehensive immigration reform bill in the next few months, and I will sign it right away. And America will be better for it. Let's get it done. [Applause] Let's get it done.

But we can't stop there. We know our economy is stronger when our wives, our mothers, our daughters can live their lives free from discrimination in the workplace and free from the fear of domestic violence. Today the Senate passed the "Violence Against Women's Act" that Joe Biden originally wrote almost 20 years ago. And I now urge the House to do the same. Good job, Joe. And I ask this Congress to declare that women should earn a living equal to their efforts, and finally pass the "Paycheck Fairness Act" this year.

We know our economy is stronger when we reward an honest day's work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That's wrong. That's why, since the last time this Congress raised the minimum wage, 19 States have chosen to bump theirs even higher.

Tonight let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty and raise the Federal minimum wage to $9 an hour. We should be able to get that done.

This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank, rent or eviction, scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. And a whole lot of folks out there would probably need less help from government. In fact, working folks shouldn't have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here's an idea that Governor Romney and I actually agreed on last year: Let's tie the minimum wage to the cost of living so that it finally becomes a wage you can live on.

Tonight let's also recognize that there are communities in this country where no matter how hard you work, it is virtually impossible to get ahead: factory towns decimated from years of plants packing up; inescapable pockets of poverty, urban and rural, where young adults are still fighting for their first job. America is not a place where the chance of birth or circumstance should decide our destiny. And that's why we need to build new ladders of opportunity into the middle class for all who are willing to climb them.

Let's offer incentives to companies that hire Americans who've got what it takes to fill that job opening, but have been out of work so long that no one will give them a chance anymore. Let's put people back to work rebuilding vacant homes in rundown neighborhoods. And this year, my administration will begin to partner with 20 of the hardest hit towns in America to get these communities back on their feet. Now, we'll work with local leaders to target resources at public safety and education and housing.

We'll give new tax credits to businesses that hire and invest. And we'll work to strengthen families by removing the financial deterrents to marriage for low-income couples and do more to encourage fatherhood, because what makes you a man isn't the ability to conceive a child, it's having the courage to raise one. And we want to encourage that. We want to help that.

Stronger families. Stronger communities. A stronger America. It is this kind of prosperity--broad, shared, built on a thriving middle class--that has always been the source of our progress at home. It's also the foundation of our power and influence throughout the world.

Tonight we stand united in saluting the troops and civilians who sacrifice every day to protect us. Because of them, we can say with confidence that America will complete its mission in Afghanistan and achieve our objective of defeating the core of Al Qaida.

Already, we have brought home 33,000 of our brave service men and women. This spring, our forces will move into a support role, while Afghan security forces take the lead. Tonight I can announce that over the next year, another 34,000 American troops will come home from Afghanistan. This drawdown will continue, and by the end of next year, our war in Afghanistan will be over.

Beyond 2014, America's commitment to a unified and sovereign Afghanistan will endure, but the nature of our commitment will change. We're negotiating an agreement with the Afghan Government that focuses on two missions: training and equipping Afghan forces so that the country does not again slip into chaos and counterterrorism efforts that allow us to pursue the remnants of Al Qaida and their affiliates.

Today, the organization that attacked us on 9/11 is a shadow of its former self. It's true, different Al Qaida affiliates and extremist groups have emerged, from the Arabian Peninsula to Africa. The threat these groups pose is evolving. But to meet this threat, we don't need to send tens of thousands of our sons and daughters abroad or occupy other nations. Instead, we'll need to help countries like Yemen and Libya and Somalia provide for their own security and help allies who take the fight to terrorists, as we have in Mali. And where necessary, through a range of capabilities, we will continue to take direct action against those terrorists who pose the gravest threat to Americans.