Text: 2006 State Of The Union

President Bush's State Of The Union Address

(CBS) 

Here at home, America also has a great opportunity: We will build the prosperity of our country by strengthening our economic leadership in the world.

Our economy is healthy, and vigorous, and growing faster than other major industrialized nations. In the last two-and-a-half years, America has created 4.6 million new jobs – more than Japan and the European Union combined. Even in the face of higher energy prices and natural disasters, the American people have turned in an economic performance that is the envy of the world.

The American economy is pre-eminent – but we cannot afford to be complacent. In a dynamic world economy, we are seeing new competitors like China and India. This creates uncertainty, which makes it easier to feed people’s fears. And so we are seeing some old temptations return. Protectionists want to escape competition, pretending that we can keep our high standard of living while walling off our economy. Others say that the government needs to take a larger role in directing the economy, centralizing more power in Washington and increasing taxes. We hear claims that immigrants are somehow bad for the economy – even though this economy could not function without them. All these are forms of economic retreat, and they lead in the same direction – toward a stagnant and second-rate economy.

Tonight I will set out a better path – an agenda for a Nation that competes with confidence – an agenda that will raise standards of living and generate new jobs. Americans should not fear our economic future, because we intend to shape it.

Keeping America competitive begins with keeping our economy growing. And our economy grows when Americans have more of their own money to spend, save, and invest. In the last five years, the tax relief you passed has left 880 billion dollars in the hands of American workers, investors, small businesses, and families – and they have used it to help produce more than four years of uninterrupted economic growth. Yet the tax relief is set to expire in the next few years. If we do nothing, American families will face a massive tax increase they do not expect and will not welcome.

Because America needs more than a temporary expansion, we need more than temporary tax relief. I urge the Congress to act responsibly, and make the tax cuts permanent.

Keeping America competitive requires us to be good stewards of tax dollars. Every year of my presidency, we have reduced the growth of non-security discretionary spending – and last year you passed bills that cut this spending. This year my budget will cut it again, and reduce or eliminate more than 140 programs that are performing poorly or not fulfilling essential priorities. By passing these reforms, we will save the American taxpayer another 14 billion dollars next year – and stay on track to cut the deficit in half by 2009. I am pleased that Members of Congress are working on earmark reform – because the Federal budget has too many special interest projects. And we can tackle this problem together, if you pass the line-item veto.

We must also confront the larger challenge of mandatory spending, or entitlements. This year, the first of about 78 million Baby Boomers turn 60, including two of my Dad’s favorite people – me, and President Bill Clinton. This milestone is more than a personal crisis – it is a national challenge. The retirement of the Baby Boom generation will put unprecedented strains on the Federal government. By 2030, spending for Social Security, Medicare, and Medicaid alone will be almost 60 percent of the entire Federal budget. And that will present future Congresses with impossible choices – staggering tax increases, immense deficits, or deep cuts in every category of spending.