2011 State of the Union Highlights

We are poised for progress.  Two years after the worst recession most of us have ever known, the stock market has come roaring back.  Corporate profits are up.  The economy is growing again.

But we have never measured progress by these yardsticks alone.  We measure progress by the success of our people.  By the jobs they can find and the quality of life those jobs offer.  By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise.  By the opportunities for a better life that we pass on to our children.

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What’s more, we are the first nation to be founded for the sake of an idea -– the idea that each of us deserves the chance to shape our own destiny.  That’s why centuries of pioneers and immigrants have risked everything to come here. It’s why our students don’t just memorize equations, but answer questions like “What do you think of that idea?  What would you change about the world?  What do you want to be when you grow up?”

The future is ours to win.  But to get there, we can’t just stand still.  As Robert Kennedy told us, “The future is not a gift.  It is an achievement.”  Sustaining the American Dream has never been about standing pat.  It has required each generation to sacrifice, and struggle, and meet the demands of a new age.

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The first step in winning the future is encouraging American innovation. None of us can predict with certainty what the next big industry will be or where the new jobs will come from.  Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution.  What we can do — what America does better than anyone else — is spark the creativity and imagination of our people.  We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook.  In America, innovation doesn’t just change our lives.  It is how we make our living. (Applause.)

Our free enterprise system is what drives innovation.  But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need.  That’s what planted the seeds for the Internet.  That’s what helped make possible things like computer chips and GPS.  Just think of all the good jobs — from manufacturing to retail — that have come from these breakthroughs.

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Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race.  And in a few weeks, I will be sending a budget to Congress that helps us meet that goal.  We’ll invest in biomedical research, information technology, and especially clean energy technology -– (applause) — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

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At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars.  At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities.  With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015. (Applause.)

We need to get behind this innovation.  And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. (Applause.)  I don’t know if — I don’t know if you’ve noticed, but they’re doing just fine on their own. (Laughter.)  So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling.  So tonight, I challenge you to join me in setting a new goal:  By 2035, 80 percent of America’s electricity will come from clean energy sources. (Applause.)

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Maintaining our leadership in research and technology is crucial to America’s success.  But if we want to win the future -– if we want innovation to produce jobs in America and not overseas -– then we also have to win the race to educate our kids.

Think about it.  Over the next 10 years, nearly half of all new jobs will require education that goes beyond a high school education.  And yet, as many as a quarter of our students aren’t even finishing high school.  The quality of our math and science education lags behind many other nations.  America has fallen to ninth in the proportion of young people with a college degree. And so the question is whether all of us –- as citizens, and as parents –- are willing to do what’s necessary to give every child a chance to succeed.

That responsibility begins not in our classrooms, but in our homes and communities.  It’s family that first instills the love of learning in a child.  Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair.  (Applause.)  We need to teach them that success is not a function of fame or PR, but of hard work and discipline.

Our schools share this responsibility.  When a child walks into a classroom, it should be a place of high expectations and high performance. But too many schools don’t meet this test. That’s why instead of just pouring money into a system that’s not working, we launched a competition called Race to the Top.  To all 50 states, we said, “If you show us the most innovative plans to improve teacher quality and student achievement, we’ll show you the money.”

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Let’s also remember that after parents, the biggest impact on a child’s success comes from the man or woman at the front of the classroom.  In South Korea, teachers are known as “nation builders.”  Here in America, it’s time we treated the people who educate our children with the same level of respect. (Applause.)  We want to reward good teachers and stop making excuses for bad ones.  (Applause.)  And over the next 10 years, with so many baby boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science and technology and engineering and math.  (Applause.)

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Of course, the education race doesn’t end with a high school diploma.  To compete, higher education must be within the reach of every American. (Applause.)  That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. (Applause.)  And this year, I ask Congress to go further, and make permanent our tuition tax credit –- worth $10,000 for four years of college.  It’s the right thing to do. (Applause.)

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.”

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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.

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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. (Applause.)

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 two 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.  (Applause.)

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Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail.  (Applause.)  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 and applause.)  As we speak, routes in California and the Midwest are already underway.

Within the next five 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 — (applause) — 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. (Applause.)

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.  (Applause.)

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.  (Applause.)

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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. (Applause.)  But I will not hesitate to create or enforce common-sense safeguards to protect the American people. (Applause.)  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. (Applause.)  And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients. (Applause.)

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. (Applause.)

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. (Applause.)

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So I say to this chamber tonight, instead of re-fighting the battles of the last two years, let’s fix what needs fixing and let’s move forward. (Applause.)

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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 five years. (Applause.)  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 hardworking federal employees for the next two 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. (Applause.)

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. (Applause.)  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.

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. (Applause.)

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. (Applause.)

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. (Applause.)

To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations.  (Applause.)  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. (Applause.)

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. (Applause.)  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. (Applause.)

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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.  (Applause.)

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 website 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. (Applause.)

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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.

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. (Applause.)

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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. (Applause.)

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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.

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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.  (Applause.)

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.

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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 three- or four-hour — three or four days at a time without any sleep.  Thirty-seven days later, Plan B succeeded, and the miners were rescued.  (Applause.)  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. (Applause.)

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.

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