Madam Speaker, Vice President Cheney, Members of Congress, distinguished guests, and fellow citizens:
Seven years have passed since I first stood before you at this rostrum. In that time, our country has been tested in ways none of us could have imagined. We faced hard decisions about peace and war, rising competition in the world economy, and the health and welfare of our citizens.
These issues call for vigorous debate, and I think it's fair to say we've answered the call.
In that time I have honestly tried to put the interests of my country before all else. I have taken the words of the oath of office that I have twice made with the utmost seriousness. I know that in this, an election year, there will be new leaders emerging, Republicans and Democrats that will contemplate the oath I have taken and I know that all will consider the interests of our country and show that they can compete for votes and cooperate for results at the same time.
In the past seven years, we've all seen the images that have sobered us. In the face of a horrific act of violence on a clear September day, unprecedented in American history, we have made what I believed to be the right decisions at the time. Further attacks, in Jordan, in Madrid, in London, in Turkey have all demonstrated the ruthlessness of the criminals who identify with Al Qaeda. We were right to tackle the menace of the criminal regime of the Taliban and to eliminate them from power in Afghanistan. However, in the coming year we need renewed fortitude to complete the task that we have set and capture the perpetrators of the attacks on America and elsewhere and truly remove the forces that nurtured these monsters and oppressed the Afghan people . The advance of liberty is opposed by terrorists and extremists -- evil men who despise freedom, and whose enmity we are proud to oppose.
Yet, As the final year of my Presidency begins, I know that our country is by no means as united as it could be, and that it needs to be. I must shoulder my burden and admit to you and to the American people that I have made mistakes. Though I can not regret the fall of Saddam Hussein, I must now concede that my administration did not allow sufficient preparation for the post war situation in Iraq. I must plead in mitigation that I and my administration genuinely believed that Saddam had dangerous weapons and was prepared to release them to Al Qaeda for use against America and its allies. I took the decision to move faster in our preparations for war, since a failure to act, in my view, could have led to incalculable consequences.
It was a decision that has proven to be the hinge of my stewardship of this office. On reflection I gave insufficient attention to the counsels of our allies and this produced unnecessary friction at the outset of the campaign. More critically, my team was not prepared for the problems of a long term military engagement in Iraq. In particular, I should have been more proactive in maintaining sufficient strength to avoid the inter-communal violence that followed our success.
Thus it was that one year ago, our enemies were succeeding in their efforts to plunge Iraq into chaos. Yet now we have reviewed our strategy and changed course. We launched a surge of American forces into Iraq. We gave our troops a new mission: Work with the Iraqi forces to protect the Iraqi people, pursue the enemy in his strongholds, and deny the terrorists sanctuary anywhere in the country.
Despite my early missteps, over the past year, we've made good progress in achieving this.
Our military and civilians in Iraq are performing with courage and distinction, and they have the gratitude of our whole nation.
In Afghanistan, America, our 25 NATO allies and 15 partner nations are helping the Afghan people defend their freedom and rebuild their country.
Thanks to the courage of these military and civilian personnel, a nation that was once a safe haven for Al Qaeda is now a young democracy where boys and girls are going to school. New roads and hospitals are being built. And people are looking to the future with new hope.
These successes must continue. So we're adding 3,200 Marines to our forces in Afghanistan, where they will fight the terrorists and train the Afghan army and police.
Defeating the Taliban and Al Qaeda is critical to our security, and I thank the Congress for supporting America's vital mission in Afghanistan.
And I ask Congress to meet its responsibilities to these brave men and women by fully funding our troops. Our enemies in Iraq have been hit hard. They are not yet defeated and we can still expect tough fighting ahead. Our objective in the coming year is to sustain and build on the gains we made in 2007, while transitioning to the next phase of our strategy. American troops are shifting from leading operations to partnering with Iraqi forces and eventually to a protective over-watch mission.
As part of this transition, one Army Brigade Combat team and one Marine Expeditionary Unit have already come home and will not be replaced. In the coming months, four additional brigades and two Marine battalions will follow suit. Taken together, this means more than 20,000 of our troops are coming home.
Yet we have unfinished business before us, and the American people expect us to get it done.
The mission in Iraq has been difficult and trying for our nation, but it is in the vital interest of the United States that we succeed.
A free Iraq will deny Al Qaeda a safe haven. A free Iraq will show millions across the Middle East that a future of liberty is possible. A free Iraq will be a friend of America, a partner in fighting terror and a source of stability in a dangerous part of the world.
By contrast, a failed Iraq would embolden the extremists, strengthen Iran and give terrorists a base from which to launch new attacks on our friends, our allies and our homeland.
The criminals have made their intentions clear. At a time when the momentum seemed to favor them, Al Qaeda's top commander in Iraq declared that they will not rest until they have attacked us here in Washington.
My fellow Americans, we will not rest either. We will not rest until this enemy has been defeated. (APPLAUSE)
In the work ahead, we must be guided by the philosophy that made our nation great. As Americans, we believe in the power of individuals to determine their destiny and shape the course of history. We believe that the most reliable guide for our country is the collective wisdom of ordinary citizens. And so, in all we do, we must trust in the ability of free peoples to make wise decisions and empower them to improve their lives for their futures
I must also acknowledge to the American people that I have waited too long to try to tackle the causes of much extremism in the Middle East: the continued impasse in the Holy Land. To some great degree, the road to peace in Iraq or Afghanistan is one that starts in Jerusalem. Palestinians have elected a president who recognizes that confronting terror is essential to achieving a state where his people can live in dignity and at peace with Israel.
Israelis have leaders who recognize that a peaceful, democratic Palestinian state will be a source of lasting security.
This month in Ramallah and Jerusalem, I assured leaders from both sides that America will do and I will do everything we can to help them achieve a peace agreement that defines a Palestinian state by the end of this year.
The time has come for a Holy Land where a democratic Israel and a democratic Palestine live side by side in peace. My goal is to foster a new framework where practical solutions can be found to create the conditions for a complete settlement of the outstanding issues and the full implementation of the road map for peace.
As Americans, we believe in the power of individuals to determine their destiny and shape the course of history. We believe that the most reliable guide for our country is the collective wisdom of ordinary citizens.
And so, in all we do, we must trust in the ability of free peoples to make wise decisions and empower them to improve their lives for their futures.
To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty. America's added jobs for a record 52 straight months.
But jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas. Exports are rising, but the housing market has declined.
At kitchen tables across our country, there is a concern about our economic future. In the long run, Americans can be confident about our economic growth, but in the short run, we can all see that that growth is slowing.
So, last week, my administration reached agreement with Speaker Pelosi and Republican Leader Boehner on a robust growth package that includes tax relief for individuals and families and incentives for business investment.
The temptation will be to load up the bill. That would delay it or derail it, and neither option is acceptable.
This is a good agreement that will keep our economy growing and our people working. And this Congress must pass it as soon as possible.
We have other work to do on taxes. Unless Congress acts, most of the tax relief we've delivered over the past seven years will be taken away.
Some in Washington argue that letting tax relief expire is not a tax increase.
Try explaining that to 116 million American taxpayers who will see their taxes rise by an average of $1,800. Others have said they would personally be happy to pay higher taxes. I welcome their enthusiasm. I am pleased to report that the IRS accepts both checks and money orders.
Most Americans think their taxes are high enough. With all the other pressures on their finances, American families should not have to worry about the federal government taking a bigger bite out of their paychecks. There is only one way to eliminate this uncertainty: Make the tax relief permanent.
Members of the Congress should know, if any bill -- raises taxes reach -- reaches my desk, I will veto it.
Just as we trust Americans with their own money, we need to earn their trust by spending their tax dollars wisely.
Next week, I'll send you a budget that terminates or substantially reduces 151 wasteful or bloated programs, totaling more than $18 billion. The budget that I'll submit will keep America on track for a surplus in 2012.
American families have to balance their budgets; so should their government.
The people's trust in their government is undermined by congressional earmarks, special interest projects that are often snuck in at the last minute, without discussion or debate. committee reports that never even come to a vote.
Unfortunately, neither goal was met.
So, this time, if you send me an appropriations bill that does not cut the number and cost of earmarks in half, I'll send it back to you with my veto.
And tomorrow I will issue an executive order that directs federal agencies to ignore any future earmark that is not voted on by Congress.
If these items are truly worth funding, Congress should debate them in the open and hold a public vote.
Our shared responsibilities extend beyond matters of taxes and spending. On housing, we must trust Americans with the responsibility of home ownership and empower them to weather turbulent times in the housing market.
My administration brought together the Hope Now alliance, which is helping many struggling homeowners avoid foreclosure.
And Congress can help even more.
Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages.
It's been a difficult time for many American families and, by taking these steps, we can help more of them keep their homes.
To build a future of quality health care, we must trust patients and doctors to make medical decisions and empower them with better information and better options.
We share a common goal: making health care more affordable and accessible for all Americans.
The best way to achieve that goal is by expanding consumer choice, not government control.
BUSH: So I propose ending the bias in the tax code against those who do not get their health insurance through their employer. This one reform would put private coverage within reach for millions, and I call on the Congress to pass it this year.
Congress must also expand health savings accounts, create association health plans for small businesses, promote health information technology and confront the epidemic of junk medical lawsuits.
With all these steps, we will ensure that decisions about your medical care are made in the privacy of your doctor's office, not in the halls of Congress.
On education, we must trust students to learn, if given the chance, and empower parents to demand results from our schools.
In neighborhoods across our country, there are boys and girls with dreams. And a decent education is their only hope of achieving them.
Six years ago, we came together to pass the No Child Left Behind Act, and today no one can deny its results.
Last year, 4th and 8th graders achieved the highest math scores on record. Reading scores are on the rise. African-American and Hispanic students posted all-time highs. Now we must...
Now we must work together to increase accountability, add flexibilities for states and districts, reduce the number of high school dropouts, provide extra help for struggling schools.
Members of Congress, the No Child Left Behind Act is a bipartisan achievement. It is succeeding. And we owe it to America's children, their parents and their teachers to strengthen this good law.
We must also do more to help children when their schools do not measure up. Thanks to the D.C. Opportunity Scholarships you approved, more than 2,600 of the poorest children in our nation's capital have found new hope at a faith-based or other nonpublic schools.
Sadly, these schools are disappearing at an alarming rate in many of America's inner cities. So I will convene a White House summit aimed at strengthening these lifelines of learning.
And to open the doors of these schools to more children, I ask you to support a new $300 million program called Pell Grants for Kids. We have seen how Pell Grants help low-income college students realize their full potential.
Together, we've expanded the size and reach of these grants. Now let us apply the same spirit to help liberate poor children trapped in failing public schools.
On trade, we must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas.
Today, our economic growth increasingly depends on our ability to sell American goods and crops and services all over the world.
So we're working to break down barriers to trade and investment, wherever we can.
We're working for a successful Doha round of trade talks. And we must complete a good agreement this year.
At the same time, we're pursuing opportunities to open up new markets by passing free trade agreements.
I thank the Congress for approving a good agreement with Peru. And now I ask you to approve agreements with Colombia and Panama and South Korea.
Many products from these nations now enter America duty-free.
Yet many of our products face steep tariffs in their markets. These agreements will level the playing field. They will give us better access to nearly 100 million customers.
They will support good jobs for the finest workers in the world, those whose products say, "Made in the USA."
These agreements also promote America's strategic interests. The first agreement that will come before you is with Colombia, a friend of America that is confronting violence and terror and fighting drug traffickers. If we fail to pass this agreement, we will embolden the purveyors of false populism in our hemisphere.
So we must come together, pass this agreement, and show our neighbors in the region that democracy leads to a better life.
Trade brings better jobs and better choices and better prices. Yet, for some Americans, trade can mean losing a job. And the federal government has a responsibility to help.
I ask Congress to reauthorize and reform Trade Adjustment Assistance, so we can help these displaced workers learn new skills and find new jobs.
BUSH: And I ask Congress to reauthorize the Reform Trade Adjustment Assistance so we can help these displaced workers learn new skills and find new jobs.
To build a future of energy security, we must trust in the creative genius of American researchers and entrepreneurs and empower them to pioneer a new generation of clean energy technology.
Our security, our prosperity and our environment all require reducing our dependence on oil. consumption over the next decade, and you responded. Together, we should take the next steps. Let us fund new technologies that can generate coal power while capturing carbon emissions.
Let us increase the use of renewable power and emissions- free nuclear power.
Let us continue investing in advanced battery technology and renewable fuels to power the cars and trucks of the future.
Let us create a new international clean technology fund which will help developing nations like India and China make greater use of clean energy sources.
And let us complete an international agreement that has the potential to slow, stop, and eventually reverse the growth of greenhouse gases.
This agreement will be effective only if it includes commitments by every major economy and gives none a free ride.
The United States is committed to strengthening our energy security and confronting global climate change, and the best way to meet these goals is for America to continue leading the way toward the development of cleaner and more energy-efficient technology.
To keep America competitive into the future, we must trust in the skill of our scientists and engineers and empower them to pursue the breakthroughs of tomorrow.
Last year, Congress passed legislation supporting the American Competitiveness Initiative, but never followed through with the funding. This funding is essential to keeping our scientific edge.
So I ask Congress to double federal support for critical basic research in the physical sciences and ensure America remains the most dynamic nation on earth.
On matters of life and science, we must trust in the innovative spirit of medical researchers and empower them to discover new treatments while respecting moral boundaries.
In November, we witnessed a landmark achievement when scientists discovered a way to reprogram adult skin cells to act like embryonic stem cells.
This breakthrough has the potential to move us beyond the divisive debates of the past by extending the frontiers of medicine without the destruction of human life.
So we're expanding funding for this type of ethical medical research. And, as we explore promising avenues of research, we must also ensure that all life treated with the dignity it deserves.
And so I call on Congress to pass legislation that bans unethical practices such as the buying, selling, patenting or cloning of human life.
On matters of justice, we must trust in the wisdom of our founders and empower judges who understand that the Constitution means what it says.
I've submitted judicial nominees who will rule by the letter of the law, not the whim of the gavel. Many of these nominees are being unfairly delayed. They are worthy of confirmation, and the Senate should give each of them a prompt up-or-down vote.
In communities across our land, we must trust in the good heart of the American people and empower them to serve their neighbors in need.
Over the past seven years, more of our fellow citizens have discovered that the pursuit of happiness leads to the path of service. Americans have volunteered in record numbers. Charitable donations are higher than ever. Faith-based groups are bringing hope to pockets of despair with newfound support from the federal government.
And, to help guarantee equal treatment of faith-based organizations when they compete for federal funds, I ask you to permanently extend Charitable Choice.
Tonight, the armies of compassion continue the march to a new day in the Gulf Coast. America honors the strength and resilience of the people of this region. We reaffirm our pledge to help them build stronger and better than before.
And tonight I'm pleased to announce that, in April, we will host this year's North American Summit of Canada, Mexico, and the United States in the great city of New Orleans.
There are two other pressing challenges that I've raised repeatedly before this body, and that this body has failed to address: entitlement spending and immigration.
Every member in this chamber knows that spending on entitlement programs -- like Social Security, Medicare and Medicaid -- is growing faster than we can afford.
We all know the painful choices ahead if American stays on this path: massive tax increases, sudden and drastic cuts in benefits, and crippling deficits.
I've laid out proposals to reform these programs. Now I ask members of Congress to offer your proposals and come up with a bipartisan solution to save these vital programs for our children and our grandchildren.
The other pressing challenge is immigration. America needs to secure our borders. And, with your help, my administration is taking steps to do so. We're increasing work site enforcement, deploying fences and advanced technologies to stop illegal crossings.
We've effectively ended the policy of "catch and release" at the border. And by the end of this year, we will have doubled the number of border patrol agents.
Yet we also need to acknowledge that we will never fully secure our border until we create a lawful way for foreign workers to come here and support our economy.
This will take pressure off the border and allow law enforcement to concentrate on those who mean us harm.
We must also find a sensible and humane way to deal with people here illegally. Illegal immigration is complicated, but it can be resolved, and it must be resolved in a way that upholds both our laws and our highest ideals.
This is the business of our nation here at home. Yet building a prosperous future for our citizens also depends on confronting enemies abroad and advancing liberty in troubled regions of the world.
Our foreign policy is based on a clear premise: We trust that people, when given the chance, will choose a future of freedom and peace.
In the last seven years, we have witnessed stirring moments in the history of liberty. We've seen citizens in Georgia and Ukraine stand up for their right to free and fair elections. We've seen people in Lebanon take to the streets to demand their independence. We've seen Afghans emerge from the tyranny of the Taliban and choose a new president and a new parliament.
We've seen jubilant Iraqis holding up ink-stained fingers and celebrating their freedom.
These images of liberty have inspired us.
On the homefront, we will continue to take every lawful and effective measure to protect our country. This is our most solemn duty.
We are grateful that there has not been another attack on our soil since 9/11. But this is not for the lack of desire or effort on the part of the enemy.
In the past six years, we've stopped numerous attacks, including a plot to fly a plane into the tallest building in Los Angeles, and another to blow up passenger jets bound for America over the Atlantic.
Dedicated men and women in our government toil day and night to stop the terrorists from carrying out their plans. These good citizens are saving American lives, and everyone in this chamber owes them our thanks.
Protecting our nation from the dangers of a new century requires more than good intelligence and a strong military. It also requires changing the conditions that breed resentment and allow extremists to prey on despair. So America is using its influence to build a freer, more hopeful and more compassionate world.
This is a reflection of our national interests. It is the calling of our conscience. America opposes genocide in Sudan.
We support freedom in countries from Cuba and Zimbabwe to Belarus and Burma.
America's leading the fight against global poverty with strong education initiatives and humanitarian assistance. We've also changed the way we deliver aid by launching the Millennium Challenge Account.
This program strengthens democracy, transparency and the rule of law in developing nations, and I ask you to fully fund this important initiative.
America is leading the fight against global hunger. Today, more than half the world's food aid comes from the United States.
And tonight, I ask Congress to support an innovative proposal to provide food assistance by purchasing crops directly from farmers in the developing world, so we can build up local agriculture and help break the cycle of famine.
As I consider the future ahead of us I remain full of hope for the promise of America. Though I acknowledge my failings in office, yet I draw solace in the strength of this great country. The secret of our strength, the miracle of America, is that our greatness lies not in our government, but in the spirit and determination of our people. When the federal convention met in Philadelphia in 1787, our nation was bound by the Articles of Confederation which began with the words, "We the undersigned delegates." Constitution, he offered an important revision, and opened with words that changed the course of our nation and the history of the world: "We the people."
By trusting the people, our founders wagered that a great and noble nation could be built on the liberty that resides in the hearts of all men and women. By trusting the people, succeeding generations transformed our fragile young democracy into the most powerful nation on earth and a beacon of hope for millions.
And so long as we continue to trust the people, our nation will prosper, our liberty will be secure and the state of our union will remain strong.
So tonight, with confidence in freedom's power and trust in the people, let us set forth to do their business.
God bless America.