Thank you all. 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.

  Yet history will record that amid our differences, we acted with purpose, and together we showed the world the power and resilience of American self-government. All of us were sent to Washington to carry out the people's business.

  That is the purpose of this body. It is the meaning of our oath. It remains our charge to keep. The actions of the 110th Congress will affect the security and prosperity of our Nation long after this session has ended. In this election year, let us show our fellow Americans that we recognize our responsibilities and are determined to meet them.

  Let us show them that Republicans and Democrats can compete for votes and cooperate for results at the same time. From expanding opportunity to protecting our country, we've made good progress. Yet we have unfinished business before us, and the American people expect us to get it done. 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.

  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 has 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 7 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 would 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'm 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 their Federal Government taking a bigger bite out of their paychecks. There's only one way to eliminate this uncertainty: Make the tax relief permanent. And Members of Congress should know, if any bill raises taxes 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 will 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. Last year, I asked you to voluntarily cut the number and cost of earmarks in half. I also asked you to stop slipping earmarks into 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 homeownership 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.

  These are difficult times 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. So I have proposed 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, fourth and eighth graders achieved the highest math scores on record. Reading scores are on the rise. African American and Hispanic students posted alltime highs. 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 DC 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 school.

  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 U.S.A." 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. 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. Last year, I asked you to pass legislation to reduce 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 a 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 is 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 7 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 America stays on this path: massive tax increases, sudden and drastic cuts in benefits, or 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 worksite 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 7 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.

  In the past 7 years, we've also seen the images that have sobered us. We've watched throngs of mourners in Lebanon and Pakistan carrying the caskets of beloved leaders taken by the assassin's hand. We've seen wedding guests in blood-soaked finery staggering from a hotel in Jordan, Afghans and Iraqis blown up in mosques and markets, and trains in London and Madrid ripped apart by bombs.