TO THE CONGRESS OF THE UNITED STATES:

Thank you very much. Tonight, I have a high privilege and
distinct honor of my own -- as the first President to begin the State of the Union
message with these words: Madam Speaker.

In his day, the late Congressman Thomas D'Alesandro, Jr., from Baltimore,
Maryland, saw Presidents Roosevelt and Truman at this rostrum. But nothing could
compare with the sight of his only daughter, Nancy, presiding tonight as Speaker
of the House of Representatives. Congratulations, Madam Speaker.

Two Members of the House and Senate are not with us tonight, and we pray for the
recovery and speedy return of Senator Tim Johnson and Congressman Charlie
Norwood.

Madam Speaker, Vice President Cheney, Members of Congress, distinguished guests,
and fellow citizens:

This rite of custom brings us together at a defining hour, when decisions are
hard and courage is tested. We enter the year 2007 with large endeavors under
way, and others that are ours to begin. In all of this, much is asked of us. We
must have the will to face difficult challenges and determined enemies, and the
wisdom to face them together.

Some in this Chamber are new to the House and Senate, and I congratulate the
Democratic majority. Congress has changed, but our responsibilities have not.
Each of us is guided by our own convictions, and to these we must stay faithful.
Yet we are all held to the same standards and called to serve the same good
purposes: to extend the Nation's prosperity, to spend the people's money wisely,
to solve problems, not leave them to future generations, to guard America
against all evil, and to keep faith with those we have sent forth to defend us.

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

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

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

First, we must balance the Federal budget. We can do so without raising taxes.
What we need to do is impose spending discipline in Washington, D.C. We set a
goal of cutting the deficit in half by 2009, and met that goal 3 years ahead of
schedule. Now let us take the next step. In the coming weeks, I will submit a
budget that eliminates the Federal deficit within the next 5 years. I ask you to
make the same commitment. Together, we can restrain the spending appetite of the
Federal Government and balance the Federal budget.

Next, there is the matter of earmarks. These special interest items are often
slipped into bills at the last hour, when not even C-SPAN is watching. In 2005
alone, the number of earmarks grew to over 13,000 and totaled nearly $18
billion. Even worse, over 90 percent of earmarks never make it to the floor of
the House and Senate. They are dropped into committee reports that are not even
part of the bill that arrives on my desk. You did not vote them into law. I did
not sign them into law. Yet they are treated as if they have the force of law.
The time has come to end this practice. So let us work together to reform the
budget process, expose every earmark to the light of day and to a vote in
Congress, and cut the number and cost of earmarks at least in half by the end of
this session.

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

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

Now the task is to build on this success, without watering down standards,
without taking control from local communities, and without back sliding and
calling it reform. We can lift student achievement even higher by giving local
leaders flexibility to turn around failing schools, and by giving families with
children stuck in failing schools the right to choose someplace better. We must
increase funds for students who struggle, and make sure these children get the
special help they need. And we can make sure our children are prepared for the
jobs of the future, and our country is more competitive, by strengthening math
and science skills. The No Child Left Behind Act has worked for America's
children, and I ask Congress to reauthorize this good law.

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

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

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

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

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

Extending hope and opportunity in our country requires an immigration system
worthy of America, with laws that are fair and borders that are secure. When
laws and borders are routinely violated, this harms the interests of our
country. To secure our border, we are doubling the size of the Border Patrol,
and funding new infrastructure and technology.

Yet even with all these steps, we cannot fully secure the border unless we take
pressure off the border, and that requires a temporary worker program. We should
establish a legal and orderly path for foreign workers to enter our country to
work on a temporary basis. As a result, they won't have to try to sneak in, and
that will leave border agents free to chase down drug smugglers and criminals
and terrorists. We will enforce our immigration laws at the work site, and give
employers the tools to verify the legal status of their workers, so there is no
excuse left for violating the law. We need to uphold the great tradition of the
melting pot that welcomes and assimilates new arrivals. We need to resolve the
status of illegal immigrants who are already in our country, without animosity
and without amnesty.

Convictions run deep in this Capitol when it comes to immigration. Let us have a
serious, civil, and conclusive debate, so that you can pass, and I can sign,
comprehensive immigration reform into law.

Extending hope and opportunity depends on a stable supply of energy that keeps
America's economy running and America's environment clean. For too long our
Nation has been dependent on foreign oil, and this dependence leaves us more
vulnerable to hostile regimes, and to terrorists, who could cause huge
disruptions of oil shipments, and raise the price of oil, and do great harm to
our economy.

It is in our vital interest to diversify America's energy supply, and the way
forward is through technology. We must continue changing the way America
generates electric power, by even greater use of clean coal technology, solar
and wind energy, and clean, safe nuclear power. We need to press on with battery
research for plug-in and hybrid vehicles and expand the use of clean diesel
vehicles and biodiesel fuel. We must continue investing in new methods of
producing ethanol, using everything from wood chips, to grasses, to agricultural
wastes.

We have made a lot of progress, thanks to good policies here in Washington and
the strong response of the market. And now even more dramatic advances are
within reach. Tonight, I ask Congress to join me in pursuing a great goal. Let
us build on the work we have done and reduce gasoline usage in the United States
by 20 percent in the next 10 years. When we do that, we will be cutting our
total imports by the equivalent of three-quarters of all the oil we now import
from the Middle East.

To reach this goal, we must increase the supply of alternative fuels, by setting
a mandatory fuels standard to require 35 billion gallons of renewable and
alternative fuels in 2017. And that is nearly five times the current target. At
the same time, we need to reform and modernize fuel economy standards for cars
the way we did for light trucks, and conserve up to 8\1/2\ billion more gallons
of gasoline by 2017.

Achieving these ambitious goals will dramatically reduce our dependence on
foreign oil, but it is not going to eliminate it. So as we continue to diversify
our fuel supply, we must also step up domestic oil production in environmentally
sensitive ways. And to further protect America against severe disruptions to our
oil supply, I ask Congress to double the current capacity of the Strategic
Petroleum Reserve.

America is on the verge of technological breakthroughs that will enable us to
live our lives less dependent on oil. These technologies will help us become
better stewards of the environment, and they will help us to confront the
serious challenge of global climate change.

A future of hope and opportunity requires a fair, impartial system of justice.
The lives of our citizens across our Nation are affected by the outcome of cases
pending in our Federal courts. We have a shared obligation to ensure that the
Federal courts have enough judges to hear those cases and deliver timely
rulings. As president, I have a duty to nominate qualified men and women to
vacancies on the Federal bench. And the United States Senate has a duty as well,
to give those nominees a fair hearing and a prompt up-or-down vote on the Senate
floor.

For all of us in this room, there is no higher responsibility than to protect
the people of this country from danger. Five years have come and gone since we
saw the scenes and felt the sorrow that the terrorists can cause. We have had
time to take stock of our situation. We have added many critical protections to
guard the homeland. We know with certainty that the horrors of that September
morning were just a glimpse of what the terrorists intend for us, unless we stop
them.

With the distance of time, we find ourselves debating the causes of conflict and
the course we have followed. Such debates are essential when a great democracy
faces great questions. Yet one question has surely been settled, that to win the
war on terror we must take the fight to the enemy.

From the start, America and our allies have protected our people by staying on
the offense. The enemy knows that the days of comfortable sanctuary, easy
movement, steady financing, and free-flowing communications are long over. For
the terrorists, life since 9/11 has never been the same.

Our success in this war is often measured by the things that did not happen. We
cannot know the full extent of the attacks that we and our allies have prevents,
but here is some of what we do know: we stopped an al Qaeda plot to fly a
hijacked airplane into the tallest building on the west coast. We broke up a
Southeast Asian terrorist cell grooming operatives for attacks inside the United
States. We uncovered an al Qaeda cell developing anthrax to be used in attacks
against America. And just last August, British authorities uncovered a plot to
blow up passenger planes bound for America over the Atlantic Ocean. For each
life saved, we owe a debt of gratitude to the brave public servants who devote
their lives to finding the terrorists and stopping them.

Every success against the terrorists is a reminder of the shoreless ambitions of
this enemy. The evil that inspired and rejoiced in 9/11 is still at work in the
world. And so long as that is the case, America is still a Nation at war.

In the minds of the terrorists, this war began well before September 11 and will
not end until their radical vision is fulfilled. And these past 5 years have
given us a much clearer view of the nature of this enemy. Al Qaeda and its
followers are Sunni extremists, possessed by hatred and commanded by a harsh and
narrow ideology. Take almost any principle of civilization, and their goal is
the opposite. They preach with threats, instruct with bullets and bombs, and
promise paradise for the murder of the innocent.

Our enemies are quite explicit about their intentions. They want to overthrow
moderate governments and establish safe havens from which to plan and carry out
new attacks on our country. By killing and terrorizing Americans, they want to
force our country to retreat from the world and abandon the cause of liberty.
They would then be free to impose their will and spread their totalitarian
ideology. Listen to this warning from the late terrorist Zarqawi: "We will
sacrifice our blood and bodies to put an end to your dreams, and what is coming
is even worse." And Osama bin Laden declared: "Death is better than living on
this Earth with the unbelievers among us."

These men are not given to idle words, and they are just one camp in the
Islamist radical movement. In recent times, it has also become clear that we
face an escalating danger from Shia extremists who are just as hostile to
America and are also determined to dominate the Middle East. Many are known to
take direction from the regime in Iran, which is funding and arming terrorists
like Hezbollah, a group second only to al Qaeda in the American lives it has
taken.

The Shia and Sunni extremists are different faces of the same totalitarian
threat. Whatever slogans they chant, when they slaughter the innocent, they have
the same wicked purposes. They want to kill Americans, kill democracy in the
Middle East, and gain the weapons to kill on an even more horrific scale.

In the sixth year since our Nation was attacked, I wish I could report to you
that the dangers had ended. They have not. And so it remains the policy of this
government to use every lawful and proper tool of intelligence, diplomacy, law
enforcement, and military action to do our duty, to find these enemies, and to
protect the American people.

This war is more than a clash of arms. It is a decisive ideological struggle,
and the security of our Nation is in the balance. To prevail, we must remove the
conditions that inspire blind hatred, and drove 19 men to get onto airplanes and
to come and kill us. What every terrorist fears most is human freedom, societies
where men and women make their own choices, answer to their own conscience, and
live by their hopes instead of their resentments. Free people are not drawn to
violent and malignant ideologies, and most will choose a better way when they
are given a chance. So we advance our own security interests by helping
moderates, reformers, and brave voices for democracy. The great question of our
day is whether America will help men and women in the Middle East to build free
societies and share in the rights of all humanity. And I say, for the sake of
our own security, we must.

In the last 2 years, we have seen the desire for liberty in the broader Middle
East, and we have been sobered by the enemy's fierce reaction. In 2005, the
world watched as the citizens of Lebanon raised the banner of the Cedar
Revolution. They drove out the Syrian occupiers, and chose new leaders in free
elections. In 2005, the people of Afghanistan defied the terrorists and elected
a democratic legislature. And in 2005, the Iraqi people held three national
elections, choosing a transitional government, adopting the most progressive,
democratic constitution in the Arab world, and then electing a government under
that constitution. Despite endless threats from the killers in their midst,
nearly 12 million Iraqi citizens came out to vote in a show of hope and
solidarity we should never forget.

A thinking enemy watched all of these scenes, adjusted their tactics, and in
2006 they struck back. In Lebanon, assassins took the life of Pierre Gemayel, a
prominent participant in the Cedar Revolution. Hezbollah terrorists, with
support from Syria and Iran, sowed conflict in the region and are seeking to
undermine Lebanon's legitimately elected government. In Afghanistan, Taliban and
al Qaeda fighters tried to regain power by regrouping and engaging Afghan and
NATO forces. In Iraq, al Qaeda and other Sunni extremists blew up one of the
most sacred places in Shia Islam, the Golden Mosque of Samarra. This atrocity,
directed at a Muslim house of prayer, was designed to provoke retaliation from
Iraqi Shia, and it succeeded. Radical Shia elements, some of whom receive
support from Iran, formed death squads. The result was a tragic escalation of
sectarian rage and reprisal that continues to this day.

This is not the fight we entered in Iraq, but it is the fight we are in. Every
one of us wishes that this war were over and won. Yet it would not be like us to
leave our promises unkept, our friends abandoned, and our own security at risk.
Ladies and gentlemen, on this day, at this hour, it is still within our power to
shape the outcome of this battle. Let us find our resolve and turn events toward
victory.

We are carrying out a new strategy in Iraq, a plan that demands more from Iraq's
elected government and gives our forces in Iraq the reinforcements they need to
complete their mission. Our goal is a democratic Iraq that upholds the rule of
law, respects the rights of its people, provides them security, and is an ally
in the war on terror.

In order to make progress toward this goal, the Iraqi Government must stop the
sectarian violence in its capital. But the Iraqis are not yet ready to do this
on their own. So we are deploying reinforcements of more than 20,000 additional
soldiers and marines to Iraq. The vast majority will go to Baghdad, where they
will help Iraqi forces to clear and secure neighborhoods, and serve as advisers
embedded in Iraqi Army units. With Iraqis in the lead, our forces will help
secure the city by chasing down the terrorists, insurgents, and the roaming
death squads. And in Anbar province, where al Qaeda terrorists have gathered and
local forces have begun showing a willingness to fight them, we are sending an
additional 4,000 United States marines, with orders to find the terrorists and
clear them out. We did not drive al Qaeda out of their safe haven in Afghanistan
only to let them set up a new safe haven in a free Iraq.

The people of Iraq want to live in peace, and now is the time for their
government to act. Iraq's leaders know that our commitment is not open ended.
They have promised to deploy more of their own troops to secure Baghdad, and
they must do so. They have pledged that they will confront violent radicals of
any faction or political party. And they need to follow through and lift
needless restrictions on Iraqi and Coalition forces so these troops can achieve
their mission of bringing security to all of the people of Baghdad. Iraq's
leaders have committed themselves to a series of benchmarks to achieve
reconciliation, to share oil revenues among all of Iraq's citizens, to put the
wealth of Iraq into the rebuilding of Iraq, to allow more Iraqis to reenter
their nation's civic life, to hold local elections, and to take responsibility
for security in every Iraqi province. But for all of this to happen, Baghdad
must be secured. And our plan will help the Iraqi Government take back its
capital and make good on its commitments.

My fellow citizens, our military commanders and I have carefully weighed the
options. We discussed every possible approach. In the end, I chose this course
of action because it provides the best chance for success. Many in this Chamber
understand that America must not fail in Iraq, because you understand that the
consequences of failure would be grievous and far reaching.

If American forces step back before Baghdad is secure, the Iraqi Government
would be overrun by extremists on all sides. We could expect an epic battle
between Shia extremists backed by Iran, and Sunni extremists aided by al Qaeda
and supporters of the old regime. A contagion of violence could spill out across
the country, and in time the entire region could be drawn into the conflict.

For America, this is a nightmare scenario. For the enemy, this is the objective.
Chaos is their greatest ally in this struggle. And out of chaos in Iraq would
emerge an emboldened enemy with new safe havens, new recruits, new resources,
and an even greater determination to harm America. To allow this to happen would
be to ignore the lessons of September 11 and invite tragedy. And ladies and
gentlemen, nothing is more important at this moment in our history than for
America to succeed in the Middle East, to succeed in Iraq, and to spare the
American people from this danger.

This is where matters stand tonight, in the here and now. I have spoken with
many of you in person. I respect you and the arguments you have made. We went
into this largely united, in our assumptions and in our convictions. And
whatever you voted for, you did not vote for failure. Our country is pursuing a
new strategy in Iraq, and I ask you to give it a chance to work. And I ask you
to support our troops in the field, and those on their way.

The war on terror we fight today is a generational struggle that will continue
long after you and I have turned our duties over to others. That is why it is
important to work together so our Nation can see this great effort through. Both
parties and both branches should work in close consultation. And this is why I
propose to establish a special advisory council on the war on terror, made up of
leaders in Congress from both political parties. We will share ideas for how to
position America to meet every challenge that confronts us. And we will show our
enemies abroad that we are united in the goal of victory.

One of the first steps we can take together is to add to the ranks of our
military, so that the American Armed Forces are ready for all the challenges
ahead. Tonight I ask the Congress to authorize an increase in the size of our
active Army and Marine Corps by 92,000 in the next 5 years. A second task we can
take on together is to design and establish a volunteer civilian reserve corps.
Such a corps would function much like our military reserve. It would ease the
burden on the Armed Forces by allowing us to hire civilians with critical skills
to serve on missions abroad when America needs them. And it would give people
across America who do not wear the uniform a chance to serve in the defining
struggle of our time.

Americans can have confidence in the outcome of this struggle, because we are
not in this struggle alone. We have a diplomatic strategy that is rallying the
world to join in the fight against extremism. In Iraq, multinational forces are
operating under a mandate from the United Nations, and we are working with
Jordan, Saudi Arabia, Egypt, and the gulf states to increase support for Iraq's
government. The United Nations has imposed sanctions on Iran and made it clear
that the world will not allow the regime in Tehran to acquire nuclear weapons.
With the other members of the Quartet, the U.N., the European Union and Russia,
we are pursuing diplomacy to help bring peace to the Holy Land, and pursuing the
establishment of a democratic Palestinian state living side by side with Israel
in peace and security. In Afghanistan, NATO has taken the lead in turning back
the Taliban and al Qaeda offensive, the first time the alliance has deployed
forces outside the North Atlantic area. Together with our partners in China,
Japan, Russia, and South Korea, we are pursuing intensive diplomacy to achieve a
Korean Peninsula free of nuclear weapons. And we will continue to speak out for
the cause of freedom in places like Cuba, Belarus, and Burma, and continue to
awaken the conscience of the world to save the people of Darfur.

American foreign policy is more than a matter of war and diplomacy. Our work in
the world is also based on a timeless truth: to whom much is given, much is
required. We hear the call to take on the challenges of hunger and poverty and
disease, and that is precisely what America is doing. We must continue to fight
HIV/AIDS, especially on the continent of Africa. Because you funded our
Emergency Plan for AIDS Relief, the number of people receiving life-saving drugs
has grown from 50,000 to more than 800,000 in 3 short years. I ask you to
continue funding our efforts to fight HIV/AIDS, and I ask you to provide $1.2
billion over 5 years so we can combat malaria in 15 African countries. I ask
that you fund the Millennium Challenge Account so that American aid reaches the
people who need it, in nations where democracy is on the rise and corruption is
in retreat. And let us continue to support the expanded trade and debt relief
that are the best hope for lifting lives and eliminating poverty.

When America serves others in this way, we show the strength and generosity of
our country. These deeds reflect the character of our people. The greatest
strength we have is the heroic kindness, courage, and self-sacrifice of the
American people. You see this spirit often if you know where to look, and
tonight we need only look above to the gallery.

Dikembe Mutombo grew up in Africa amid great poverty and disease. He came to
Georgetown University on a scholarship to study medicine, but Coach John
Thompson got a look at Dikembe and had a different idea. Dikembe became a star
in the NBA and a citizen of the United States. But he never forgot the land of
his birth, or the duty to share his blessings with others. He built a brand-new
hospital in his old hometown. A friend has said of this good hearted man:
"Mutombo believes that God has given him this opportunity to do great things."
And we are proud to call this son of the Congo a citizen of the United States of
America.


After her daughter was born, Julie Aigner-Clark searched for ways to share her
love of music and art with her child. So she borrowed some equipment and began
filming children's videos in her basement. The Baby Einstein Company was born,
and in just 5 years her business grew to more than $20 million in sales. In
November 2001, Julie sold Baby Einstein to Walt Disney Company; and with her
help, Baby Einstein has grown into a $200 million business. Julie represents the
great enterprising spirit of America. And she is using her success to help
others, producing child safety videos with John Walsh of the National Center for
Missing and Exploited Children. Julie says of her new project: "I believe it is
the most important thing that I have ever done. I believe that children have the
right to live in a world that is safe." And so tonight we are pleased to welcome
this talented business entrepreneur and generous social entrepreneur, Julie
Aigner-Clark.

Three weeks ago, Wesley Autry was waiting at a Harlem subway station with his
two little girls, when he saw a man fall into the path of a train. With seconds
to act, Wesley jumped onto the tracks, pulled the man into the space between the
rails, and held him as the train passed right above their heads. He insists he
is not a hero. He says: "We got guys and girls overseas dying for us to have our
freedoms. We have got to show each other some love." There is something
wonderful about a country that produces a brave and humble man like Wesley
Autry.

Tommy Rieman was a teenager pumping gas in Independence, Kentucky, when he
enlisted in the United States Army. In December 2003, he was on a reconnaissance
mission in Iraq when his team came under heavy enemy fire. From his Humvee,
Sergeant Rieman returned fire. He used his body as a shield to protect his
gunner. He was shot in the chest and arm, and received shrapnel wounds to his
legs, yet he refused medical attention and stayed in the fight. He helped to
repel a second attack, firing grenades at the enemy's position. For his
exceptional courage, Sergeant Rieman was awarded the Silver Star. And like so
many other Americans who have volunteered to defend us, he has earned the
respect and the gratitude of our whole country.

In such courage and compassion, ladies and gentlemen, we see the spirit and
character of America, and these qualities are not in short supply. This is a
decent and honorable country, and resilient, too. We have been through a lot
together. We have met challenges and faced dangers, and we know that more lie
ahead. Yet we can go forward with confidence, because the state of our Union is
strong, our cause in the world is right, and tonight that cause goes on. God
bless. Thank you for your prayers. Thank you.

[Applause, the Members rising.]