Part 7

We'll also establish a financial crimes unit of highly trained investigators to crack down on large-scale fraud and protect people's investments. Some financial firms violate major antifraud laws because there's no real penalty for being a repeat offender. That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.

And tonight I'm asking my Attorney General to create a special unit of Federal prosecutors and leading State attorney general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

Now, a return to the American values of fair play and shared responsibility will help protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.

Right now our most immediate priority is stopping a tax hike on a hundred and sixty million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let's agree right here, right now. No side issues. No drama. Pass the payroll tax cut without delay. Let's get it done.

When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now because of loopholes and shelters in the Tax Code, a quarter of all millionaires pay lower tax rates than millions of middle class households. Right now Warren Buffett pays a lower tax rate than his secretary.

Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else, like education and medical research, a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both.

The American people know what the right choice is. So do I. As I told the Speaker this summer, I'm prepared to make more reforms that rein in the long-term costs of Medicare and Medicaid and strengthen Social Security, so long as those programs remain a guarantee of security for seniors. But in return, we need to change our Tax Code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes.

Tax reform should follow the Buffett rule. If you make more than a million dollars a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief.

Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

We don't begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich. It's because they understand that when I get a tax break I don't need and the country can't afford, it either adds to the deficit or somebody else has to make up the difference, like a senior on a fixed income or a student trying to get through school or a family trying to make ends meet. That's not right. Americans know that's not right. They know that this generation's success is only possible because past generations felt a responsibility to each other and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility. That's how we'll reduce our deficit. That's an America built to last.

Now, I recognize that people watching tonight have differing views about taxes and debt, energy and health care. But no matter what party they belong to, I bet most Americans are thinking the same thing right about now: Nothing will get done in Washington this year or next year or maybe even the year after that, because Washington is broken.

Can you blame them for feeling a little cynical?

The greatest blow to our confidence in our economy last year didn't come from events beyond our control. It came from a debate in Washington over whether the United States would pay its bills or not. Who benefited from that fiasco?

I've talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad, and it seems to get worse every year.

Now, some of this has to do with the corrosive influence of money in politics. So together, let's take some steps to fix that. Send me a bill that bans insider trading by Members of Congress. I will sign it tomorrow. Let's limit any elected official from owning stocks in industries they impact. Let's make sure people who bundle campaign contributions for Congress can't lobby Congress and vice versa, an idea that has bipartisan support, at least outside of Washington.

Some of what's broken has to do with the way Congress does its business these days. A simple majority is no longer enough to get anything--even routine business--passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a simple rule that all judicial and public service nominations receive a simple up-or-down vote within 90 days.

The executive branch also needs to change. Too often, it's inefficient, outdated, and remote. That's why I've asked this Congress to grant me the authority to consolidate the Federal bureaucracy so that our Government is leaner, quicker, and more responsive to the needs of the American people.

Finally, none of this can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction, that politics is about clinging to rigid ideologies instead of building consensus around commonsense ideas.

I'm a Democrat, but I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves and no more. That's why my education reform offers more competition and more control for schools and States. That's why we're getting rid of regulations that don't work. That's why our health care law relies on a reformed private market, not a Government program.

On the other hand, even my Republican friends who complain the most about Government spending have supported federally financed roads and clean energy projects and Federal offices for the folks back home.

The point is, we should all want a smarter, more effective Government. And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress. With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help. Because when we act together, there's nothing the United States of America can't achieve.

That's the lesson we've learned from our actions abroad over the last few years. Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the Al Qaida operatives who remain are scrambling, knowing that they can't escape the reach of the United States of America.

From this position of strength, we've begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan so that it is never again a source of attacks against America.

As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo, from Sana'a to Tripoli. A year ago, Qadhafi was one of the world's longest serving dictators, a murderer with American blood on his hands. Today, he is gone. And in Syria, I have no doubt that the Asad regime will soon discover that the forces of change cannot be reversed and that human dignity cannot be denied.

How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome. And while it's ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings: men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.

And we will safeguard America's own security against those who threaten our citizens, our friends, and our interests. Look at Iran. Through the power of our diplomacy, a world that was once divided about how to deal with Iran's nuclear program now stands as one. The regime is more isolated than ever before. Its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent.

Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better. And if Iran changes course and meets its obligations, it can rejoin the community of nations.

The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our ironclad commitment--and I mean ironclad--to Israel's security has meant the closest military cooperation between our two countries in history.

We've made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we've built to secure nuclear materials, to the missions we've led against hunger and disease, from the blows we've dealt to our enemies, to the enduring power of our moral example, America is back.

Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about. That's not the message we get from leaders around the world who are eager to work with us. That's not how people feel from Tokyo to Berlin, from Cape Town to Rio, where opinions of America are higher than they've been in years. Yes, the world is changing. No, we can't control every event. But America remains the one indispensable nation in world affairs, and as long as I'm President, I intend to keep it that way.

That's why, working with our military leaders, I've proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. To stay one step ahead of our adversaries, I've already sent this Congress legislation that will secure our country from the growing dangers of cyber threats.

Above all, our freedom endures because of the men and women in uniform who defend it. As they come home, we must serve them as well as they've served us. That includes giving them the care and the benefits they have earned, which is why we've increased annual VA spending every year I've been President. And it means enlisting our veterans in the work of rebuilding our Nation.

With the bipartisan support of this Congress, we're providing new tax credits to companies that hire vets. Michelle and Jill Biden have worked with American businesses to secure a pledge of 135,000 jobs for veterans and their families. And tonight I'm proposing a veterans jobs corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.

Which brings me back to where I began. Those of us who've been sent here to serve can learn a thing or two from the service of our troops. When you put on that uniform, it doesn't matter if you're Black or White, Asian, Latino, Native American; conservative, liberal; rich, poor; gay, straight. When you're marching into battle, you look out for the person next to you or the mission fails. When you're in the thick of the fight, you rise or fall as one unit, serving one nation, leaving no one behind.

You know, one of my proudest possessions is the flag that the SEAL team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats, some may be Republicans, but that doesn't matter. Just like it didn't matter that day in the Situation Room, when I sat next to Bob Gates, a man who was George Bush's Defense Secretary, and Hillary Clinton, a woman who ran against me for President.

All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn't deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job: the pilot who landed the helicopter that spun out of control, the translator who kept others from entering the compound, the troops who separated the women and children from the fight, the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other, because you can't charge up those stairs into darkness and danger unless you know that there's somebody behind you, watching your back.

So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those 50 stars and those 13 stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other's backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great, no mission too hard. As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.

Thank you, God bless you, and God bless the United States of America.

***

Address Before a Joint Session of Congress on the State of the Union Barack Obama February 12, 2013

Please, everybody, have a seat. Mr. Speaker, Mr. Vice President, Members of Congress, fellow Americans: Fifty-one years ago, John F. Kennedy declared to this Chamber that "the Constitution makes us not rivals for power, but partners for progress." "It is my task," he said, "to report the state of the Union; to improve it is the task of us all."

Tonight, thanks to the grit and determination of the American people, there is much progress to report. After a decade of grinding war, our brave men and women in uniform are coming home. After years of grueling recession, our businesses have created over 6 million new jobs. We buy more American cars than we have in 5 years and less foreign oil than we have in 20. Our housing market is healing, our stock market is rebounding, and consumers, patients, and homeowners enjoy stronger protections than ever before.

So together, we have cleared away the rubble of crisis, and we can say with renewed confidence that the state of our Union is stronger.

But we gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded. Our economy is adding jobs, but too many people still can't find full-time employment. Corporate profits have skyrocketed to alltime highs, but for more than a decade, wages and incomes have barely budged.

It is our generation's task, then, to reignite the true engine of America's economic growth: a rising, thriving middle class.

It is our unfinished task to restore the basic bargain that built this country: the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like or who you love.

It is our unfinished task to make sure that this Government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great Nation.

The American people don't expect government to solve every problem. They don't expect those of us in this Chamber to agree on every issue. But they do expect us to put the Nation's interests before party. They do expect us to forge reasonable compromise where we can. For they know that America moves forward only when we do so together and that the responsibility of improving this Union remains the task of us all.

Now, our work must begin by making some basic decisions about our budget, decisions that will have a huge impact on the strength of our recovery.

Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion, mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans. As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.

Now we need to finish the job. And the question is, how?

In 2011, Congress passed a law saying that if both parties couldn't agree on a plan to reach our deficit goal, about a trillion dollars' worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They'd devastate priorities like education and energy and medical research. They would certainly slow our recovery and cost us hundreds of thousands of jobs. And that's why Democrats, Republicans, business leaders, and economists have already said that these cuts-- known here in Washington as the sequester--are a really bad idea.

Now, some in Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training, Medicare, and Social Security benefits. That idea is even worse.

Yes, the biggest driver of our long-term debt is the rising cost of health care for an aging population. And those of us who care deeply about programs like Medicare must embrace the need for modest reforms; otherwise, our retirement programs will crowd out the investments we need for our children and jeopardize the promise of a secure retirement for future generations.

But we can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and the most powerful. We won't grow the middle class simply by shifting the cost of health care or college onto families that are already struggling or by forcing communities to lay off more teachers and more cops and more firefighters. Most Americans--Democrats, Republicans, and Independents--understand that we can't just cut our way to prosperity. They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue and with everybody doing their fair share. And that's the approach I offer tonight.

On Medicare, I'm prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles Commission.

Already, the Affordable Care Act is helping to slow the growth of health care costs. And the reforms I'm proposing go even further. We'll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We'll bring down costs by changing the way our Government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our Government shouldn't make promises we cannot keep, but we must keep the promises we've already made.

To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and the well-connected. After all, why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks? How is that fair? Why is it that deficit reduction is a big emergency justifying making cuts in Social Security benefits, but not closing some loopholes? How does that promote growth?

Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit. We can get this done. The American people deserve a Tax Code that helps small businesses spend less time filling out complicated forms and more time expanding and hiring; a Tax Code that ensures billionaires with high- powered accountants can't work the system and pay a lower rate than their hard-working secretaries; a Tax Code that lowers incentives to move jobs overseas and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America. That's what tax reform can deliver. That's what we can do together.

I realize that tax reform and entitlement reform will not be easy. The politics will be hard for both sides. None of us will get a hundred percent of what we want. But the alternative will cost us jobs, hurt our economy, visit hardship on millions of hard-working Americans. So let's set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future. And let's do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next. We can't do it.

Let's agree right here, right now to keep the people's Government open and pay our bills on time and always uphold the full faith and credit of the United States of America. The American people have worked too hard, for too long, rebuilding from one crisis to see their elected officials cause another.

Now, most of us agree that a plan to reduce the deficit must be part of our agenda. But let's be clear: Deficit reduction alone is not an economic plan. A growing economy that creates good, middle class jobs, that must be the north star that guides our efforts. Every day, we should ask ourselves three questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills they need to get those jobs? And how do we make sure that hard work leads to a decent living?