introduced led by the secretary of state, hillary clinton and secretary of treasury, timothy geithner and leon panetta. they're all woalking in, member of the cabinet and be alauding almost every word the president says. >> a lot of them have had input into what the president will be saying tonight. every line of this is gone over by their staff. >> every single line and cabinet walking in. some pretty popular members of the cabinet led by the secretary of state. her approval numbers very very high. timothy geithner, secretary of the treasury. our coverage continues right now. >> you're looking at live pictures there. there's the secretary of state, hillary clinton, now on the floor of the united states house of representatives. the joint session of the senate and the house. the president of the united states, getting ready to delivery his third state "statee union" address. we want to welcome our viewers

in the united states and around the world. i'm wolf blitzer on capitol hill. gloria borger as well. john king. as we see the attorney general, members of the cabinet coming in, set the scene for us. how important, politically, especially politically, in this re-election year, for the president, is this speech? >> very important for the president to try to persuade the american people, yes, you feel times are tough. yes, you're in a state with high foreclosure, a state with very high unemployment. the president is trying to make the case things are getting better and his approach deserves a chance. he will make a case if things aren't getting better, perhaps because of dysfunction in washington. the president will make a case a do nothing congress is to blame, not just him if you have frustration with washington. he's trying to set the tone for what we know will be a very competitive election year for president almost no matter who the republicans nominate, whether democrat, republican or independent. in this economy, political

environment, any president would face a tough environment. this president's chance is to set the table, urge congress to do big things, jobs bill, payroll tax cut extension, other things ahead. all of us know, well aware the white house, republicans and democrats in the leadership on capitol hill will tell you, they don't expect big grand things to get done in this election year. payroll tax perhaps, a few other things. what the president is mostly doing tonight is framing his side of the debate for a very continuetious election year. >> we're looking at gabrielle giffords, the congresswoman shot a year ago, just announced she will be retiring from the senate and hillary clinton, secretary of state giving her a little kiss. one of the most emotional moments so far and will be the most emotional moment of the evening when she was introduced to a rousing standing ovation and members of the house and senate literally shouting gabby, gabby, a very very exciting moment for all of us.

we're all so thankful she is here on the floor of the u.s. congress and u.s. house of representatives. more members of the congress walking in. jessica yellin is there. what is the most important thing the president of the united states needs to accomplish tonight? >> reporter: he needs to convince the american people he has a vision for improving the economy that can work and already started to work. he will not only lay out that vision but tout his accomplishments. he'll start ticking off data to convince people he's gotten the economy going even though it's not where it needs to be yet. the person at that speech, very important to making this case is debbie bosanek, if that's how you pronounce it, warren buffet's secretary getting a tax rate higher than her boss, warren buffet, the billionaire and going to make the case she is an example of an unfair society she has to get a

different tax rate. it's the same day mitt romney released his tax returns, wolf. this is an important contrast, sort of subtle. he's make this case over and over throughout the speech, he stands for a fairer society where people like her will get a fairer shake if you stick with him as president into the future versus the republican party, who might not back the middle class in the same way, wolf. every time he mentioned the inequality of the tax system in the united states, he won't mention mitt romney but that will be the subliminal message and wants people to remember mitt romney and his tax returns just released was paying annual 14% for income, mostly dividends, capital gains interest, still, 14%, not 25 or 30%. dana bash is there inside the chamber. that was an electric moment when congresswoman gabrielle giffords was introduced. >> i have sat in this chamber many times for many speeches,

democratic, republican presidents, you see and hear applause and sometimes it's genuine. wolf, i've never felt anything like that. you could actually feel it. it was absolutely genuine, republicans and democrats alike, standing up applauding and looking at her. the emotion was absolutely overwhelming. you could feel it. palpable throughout this entire room. >> it was. we saw her husband, mark kelly, sitting with the first lady in the gallery, a very emotional moment. we wish her obviously a very speedy recovery. amazing, gloria borger, as we saw her tonight, looked great. she was obviously focusing. this is paul irving, the house sergeant of arms. >> mr. speaker, the president of the united states. [ applause ].

[ applause ].

>> we will listen in to hear what the president's saying but i think he will go over and personally welcome congresswoman gabrielle giffords. let's listen in to hear what the president says.

[ applause ]

>> there, you saw the president of the united states and congresswoman gabrielle giffords. we knew he would embrace her and give her a hug and congresswoman wasserman-schultz, her best friend. you did hear the president say, you did a good job. and we will see what leon panetta did, why he deserved a shout-out. maybe he will make some sort of announcement in his speech tonight about what the secretary of defense and presumably the defense department did. we are checking our sources right now. there's mark kelly, the husband of congresswoman gabrielle giffords. let's listen in.

>> members of congress, i have the high privilege and distinct honor of presenting to you, the president of the united states. [ applause ]. >> thank you. thank you so much. please be seated. mr. speaker, mr. vice president, members of congress,

distinguished guests and fellow america americans, last month, i went to andrews air force base and welcomed home some of our last troops to serve in iraq. together, we offered a final proud salute to the colors under which more than a million of our foll fellow citizens fought, and several thousands gave their lives. we gather tonight knowing that this generation of heroes has made the united states safer and more respected around the world. [ applause ]

for the first time in nine years, there are no americans fighting in iraq. for the first time in two decades, osama bin laden is not a threat to this country. most of al qaeda's top lieutenants have been defeated. the taliban's momentum has been broken. and some troops in afghanistan have begun to come home. these achievements are a testament to the courage, selflessness and team work of america's armed forces, at a

time when too many of our institutions have let us down, they exceed all expectations. they're not consumed with personal ambition. they don't obsess over their differences. they focus on the mission at hand. they work together. imagine what we could accomplish if we followed their example. [ applause ] think about the america within our reach. a country that leads the world in educating its people. an america that attracts a new generation of high-tech manufacturing and high paying jobs. a future where we're in control of our own energy and our security and prosperity aren't so tied to unstable parts of the world.

an economy built to last, where hard work pays off and responsibility is rewarded. we can do this. i know we can because we've done it before. at the end of world war ii, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. [ applause ] >> my grandfather, a veteran of patton's army, got the chance to go to college on the g.i. bill. my grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on earth. the two of them shared the optimism of a nation that had triumphed over depression and fascism. they understood they were part of something larger.

they were contributing to a story of success that every american had a chance to share. the basic american promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college and put a little away for retirement. the defining issue of our time is how to keep that promise alive. no challenge is more urgent. no debate is more important. we can either settle for a country where a shrinking number of people do well while a growing number of americans barely get by or we can restore an economy where everyone gets a fair shot and everyone does their fair share and everyone plays by the same set of rules. [ applause ].

what's at stake aren't democratic values or republican values. but american values. we have to reclaim them. let's remember how we got here. long before the recession, jobs and manufacturing began leaving our shores. technology made businesses more efficient but also made some jobs obsolete. folks at the top saw their incomes rise like never before. but most hard working americans struggled with costs that were growing, paychecks that weren't and personal debt that kept piling up. in 2008, the house of cards collapsed. we learned that mortgages had been sold to people who couldn't

afford or understand them. banks had made huge bets and bonuses with other people's money. regulators had looked the other way or didn't have the authority to stop the bad behavior. it was wrong. it was irresponsible. and it plunged our economy into a crisis that put millions out of work and saddled us in debt and left millions of hard working americans holding the bag. in the six months before i took office, we lost nearly 4 million jobs. we lost another 4 million before our policies were in full effect. those are the facts. but so are these. in the last 22 months, businesses have created more than 3 million jobs. [ applause ].

last year, they created the most jobs since 2005. american manufacturers are hiring again, creating jobs for the first time since the late 1990s. together, we've agreed to cut the deficit by more than $2 trilli trillion. we put in new rules to hold wall street accountable so a crisis like this never happens again. [ applause ]. >> the state of our union is getting stronger. we've come too far to turn back now. as long as i'm president, i will work with any in this chamber to build on this momentum. but i intend to fight

obstruction with action. i will oppose any effort to return to the very same policies that brought on this economic crisis in the first place. [ applause ]. >> no, we will not go back to an economy weakened by out-sourcing, bad debt and phony financial profits. tonight, i want to speak about how we move forward and lay out a blueprint for an economy that's built to last, an economy built on american manufacturing, american energy, skills for american workers and a renewal of american values. this blueprint begins with american manufacturing.

on the day i took office, our auto industry was on the verge of collapse. some even said we should let it die. with a million jobs at stake, i refused to let that happen. to retool and restructure. today, general motors is back on top as the world's number one auto-maker. [ applause ] chrysler has grown faster in the u.s. than any major car company. ford is investing billions in u.s. plants and factories. together, the entire industry added nearly 160,000 jobs.

we bet on american workers. we bet on american ingenuity. tonight, the american auto industry is back. [ applause ]. what's happening in detroit can happen in other industries. it can happen in cleveland and pittsburgh and raleigh. we can't bring every job back that's left our shore, but right now, it's getting more expensive to do business in places like china. meanwhile, america is more productive. a few weeks ago, the ceo of master lock told me that it now makes business sense for him to bring jobs back home. [ applause ].

today, for the first time in 15 years, master lock's unionized plant in milwaukee is running at full capacity. so we have a huge opportunity, at this moment, to bring manufacturing back. but we have to seize it. tonight, my message to business leaders is simple. ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed. we should start with our tax code. right now, companies get tax breaks for moving jobs and profits overseas. meanwhile, companies that choose to stay in america get hit with one of the highest tax rates in

the world. it makes no sense. everyone knows it. so let's change it. first, if you're a business that wants to out-source jobs, you shouldn't get a tax deduction for doing it. [ applause ] that money should be used to cover movingeing companies like master lock, that decide to bring jobs home. second, no american company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. from now on, every multinational company should have to pay a basic minimum tax and every penny should go towards lowering taxes for companies that choose to stay here and hire here in

america. [ applause ]. third, if you're an american manufacturer, you should get a bigger tax cut. if you're a high-tech manufacturer, we should double the tax deduction you get for making your products here. if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment or training for new workers. so my message is simple. it is time to stop rewarding businesses that ship jobs overseas and start rewarding companies that create jobs right here in america. send me these tax reforms and i will sign them right away.

we're also making it's easier for american businesses to sell products all over the world. two years ago, i set a goal of doubling u.s. exports over five years. with the bipartisan trade agreements we signed under law we're on track to meet that goal ahead of schedule. soon, there will be millions of new customers for american goods in panama, columbia, and south korea. soon, there will be new cars on the streets of seoul, imported from detroit and toledo and chicago. i will go anywhere in the world to open new markets for american products. and i will not stand by when our competitors don't play by the

rules. we've brought trade cases against china at nearly twice the rate as the last administration and it's made a difference. over a thousand americans are working today because we stopped a surge in chinese tires. but we need to do more. it's not right when another country lets our movies, music and software be pirated. not fair when foreign manufacturers have a leg up on ours, only because they're heavily subsidized. tonight, i'm announcing the creation of a trade enforcement unit that will be charged with investigating unfair trading practices in countries like china. there will be more inspection inspections -- there will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. this congress should make sure no foreign company has an advantage over american

manufacturing when it comes to accessing financing or new workers like russia. our workers are the most productive on earth and if the playing field is level, i promise you, america will always win. [ applause ] i always hear from many business leaders who want to hire in the united states but can't find workers with the right skills. growing industries in science and technology have twice as many openings as we have workers who can do the job. think about that. openings at a time when millions of americans are looking for work. it's inexcusable. we know how to fix it. jackie bray is a single mom from north carolina laid off from her

job as a mechanic. ben siemens opened a gas turbine factory in charlotte and formed a partnership with central piedmont community college. the company helped the college design courses in lasers and robotics training and paid jackie's tuition and hired her to help operate their plant. i want every american looking for work to have the same opportunity as jackie did. join me in a national commitment to train 2 million americans with skills that will lead directly to a job. [ applause ] my administration has already lined up more companies that want to help. model partnerships between businesses like seimens and community colleges and places like charlotte and orlando and

louisville are up and running. now, you need to give more community colleges the resources they need to become community career centers, places that teach people skills that businesses are looking for right now, from data manage document high-tech manufacturing. i want to cut through the maze of confusing training programs so that from now on, people like jackie have one program, one website, and one place to go for all the information and help that they need. it is time to turn our unemployment system into a reemployment system that puts people to work. [ applause ] these reforms will help people get jobs that are open today. but to prepare for the jobs of

tomorrow, our commitment to skills and education has to start earlier. for less than 1% of what our nation spends on education each year, we've convinced nearly every in a state the country to raise their standards for teaching and learning, the first time that's happened in a generation. challenges remain. we know how to solve them. at a time when other countries are doubling down on education, tight budget have forced states to lay off thousands of teachers. we know a good teacher can increase the lifetime income of a classroom by over $250,000. a great teacher can offer and escape from poverty to a child who dreams beyond his circumstance. every person in this chamber can point to a teacher who changed the trajectory of their lives. most teacher work tirelessly

with modest pay, sometimes d digging into their own pocket for school supplies just to make a difference. teachers matter. so instead of bashing them or defending the status quo, let's offer schools a deal. give them the resources to keep good teachers on the job and reward the best ones. in return, grant schools flexibility to teach with creativity and passion, to stop teaching to the test and to replace teachers who just aren't helping kids learn. that's a barrigain worth making. [ applause ]. we also know when students don't walk away from their education, more of them walk the stage to get their diploma.

when students are not allowed to drop out, they do better. so tonight, i am proposing that every state, every state requires that all students stay in high school until they graduate or turn 18. [ applause ]. when kids do graduate, the most daunting challenge can be the cost of college. at a time when americans owe more intuition debt than credit card debt, this congress needs to stop the interest rates on student loans from doubling in july. [ applause ].

extend the tuition tax credit we started that saves millions of middle class families thousands of dollars. and give more young people the chance to earn their way through college by doubling the number of work study jobs in the next five years. of course, it's not enough for us to increase student aid. we can't just keep subsidizing skyrocketing tuition. we'll run out of money. states also need to do their part, by making higher education a higher priority in their budgets. and colleges and universities have to do their part, by working to keep costs down. recently, i spoke with a group of college presidents who have done just that. some schools redesigned courses to help students finish more quickly, some used better

technology. the point is, it's possible. let me put colleges and universities on notice. if you can't stop tuition from going up, the funding you get from taxpayers will go down. higher education can't be a luxury, it is an economic imperative that every family in america should be able to afford. let's also remember that hundreds of thousands of talent ed hard working students in this country face another challenge. the fact that they aren't yet american citizens. many were brought here as small childr children, are american through and through, yet they live every day with the threat of deportation. others came more recently, to study business and science and engineering. but as soon as they get their degree, we send them home, to invent new products and create new jobs somewhere else. that doesn't make sense.

i believe as strongly as ever that we should take on illegal immigration. that's why my administration has put more boots on the border than ever before. that's why there are fewer illegal crossings than when i took office. the opponents of action are out of excuses. we should be working on comprehensive immigration reform right now. [ applause ]. but if election year politics keeps congress from acting on a comprehensive plan, let's at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, defend this country, send me a law that gives them the chance to earn their citizenship. i will sign it right away.

[ applause ]. you see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. that means women should earn equal pay for equal work. [ applause ]. it means we should support every one who's willing to work and every risk taker and entrepreneur who aspires to become the next steve jobs. after all, innovation is what america has always been about. most new jobs are created in

start-ups and small businesses. let's pass an agenda that helps them succeed. tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. expand tax relief to small businesses that are raising wages and creating good jobs. both parties agree on these ideas, so put them in a bill and get it on my desk this year. innovation also demands basic research. today, the discoveries taking place in our federally financed labs and units could lead to new treatments that kill cans ser cells but leave healthy ones untouched. new vests that can stop any bullet. don't gut these investments in our budget. don't let other countries win

the race for the future. support the same kind of research and innovation that led to the computer chip and the internet, to new american jobs and new american industries. and nowhere is the promise of innovation greater than in american made energy. over the last three years, we've opened millions of new acres for oil and gas exploration. tonight, i'm directing my administration to open more than 75% of our potential offshore oil and gas resources. right now, right now, american oil production is the highest that it's been in eight years. that's right. eight years. not only that, last year, we relied less on foreign oil than in any of the past 16 years.

but with only 2% of the world's oil reserves, oil isn't enough. this country needs an all out all of the above strategy that develops every available source of american energy. [ applause ]. a strategy that's cleaner, cheaper and full of new jobs. we have a supply of natural gas that can last america nearly 100 years. and my administration will take every possible action to safely develop this energy. experts believe this will support more than 600,000 jobs

by the end of the decade. i'm requiring all companies that drill for gas on public lands to disclose the chemicals they use, because america will develop this resource without putting the health and safety of our citizens at risk. the development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving we don't have to choose between our environment and our economy. by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock, reminding us government support is healthy in helping businesses get ideas off the ground. what's true for natural gas is just as true for clean energy.

in three years, our partnership with the private sector has already positioned america to be the world's leading manufacturer of high-tech batteries, because of federal investments, renewable energy use has nearly doubled. thousands of americans have jobs because of it. when brian ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance. but he found work at energetics, the wind turbine manufacturer in michigan. before the recession, the factory only made luxurya yacht. today, it's hiring workers like br bryan that said i'm proud to be working in the energy of the future. our experience with shale and natural gas show us the payoffs on these investments don't

always come off right away, some technologies don't pan out. some companies fail. i will not walk away from the promise of clean energy. i will not walk away from workers like bryan. [ applause ]. i will not seed the wind or solar or battery industry to china or germany because we refuse to make the same commitment here. we've subsidized oil companies for a century. that's long enough. it's time to end the taxpayer give aways to an industry that rarely has been more profitable and double down on a clean energy industry that never has been more promising. pass clean energy tax credits. create these jobs.

we can also spur energy innovation with new incentives. the differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. there's no reason why congress shouldn't at least set a clean energy standard that creates a market for innovation. so far, you haven't acted. well, tonight, i will. i'm directing my administration to allow the development of clean energy on enough public land to power 3 million homes. i'm proud to announce that the department of defense, working with us, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history with the navy purchasing enough capacity to power a quarter of a million homes a year.

[ applause ]. of course, the easiest way to save money is to waste less energy. so here's a proposal. help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their builds. their energy bills will be $100 billion lower over the next thd america will have less pollution, more manufacturing, more jobs for construction workers who need it. send me a bill that creates these jobs. building this new energy future should be just one part of a broader agenda to repair america's infrastructure. so much of america needs to be rebuilt. we've got crumbling roads and

bridges. a power grid that wastes too much energy. an incomplete high-speed broadband network that prevents a small business owner in rural america from selling her products all over the world. during the great depression, america built the hoover dam and the golden gate bridge. after world war ii we connected our states with a system of highways. democratic and republican administrations invested in great projects that benefitted everybody, from the workers who built them to the businesses that still use them today. in the next few weeks, i will sign an executive order clearing away the red tape that slows down too many construction projects, but you need to fund these projects. take the money we're no longer spending at war, use half of it to pay down the debt, and use the rest to build nation

building right here at home. [ applause ] there's never been a better time to build. especially since the construction industry was one of the hardest hit when the housing bubble burst. of course, construction workers weren't the only ones who were hurt. so were millions of innocent americans who have seen their home values decline. and while government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief. and that's why i'm sending this congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at

historically low rates. no more red tape, no more run-around from the bank. a small fee on the largest financial institutions will insure it won't add to the deficit, and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust. [ applause ] let's never forget, millions of americans who work hard and play by the rules every day deserve a government and a financial system that do the same. it's time to apply the same rules from top to bottom. no bail-outs, no hand-outs, and though cop-outs. an america built to last insists on a responsibility from everybody. we have all paid the price for lenders who sold mortgages to

people who couldn't afford them and buyers who knew they couldn't afford them. that's why we need smart regulations to prevent irresponsible behavior. rules to prevent financial fraud or toxic dumping or faulty medical devices. these don't destroy the free market. they make the free market work better. there's no question that some regulations are outdated, unnecessa unnecessary, or too costly. in fact, i have approved fewer regulations in the first three years of my presidency than my republican predecessor did in his. i have ordered every federal agent to eliminate rules that don't make sense. we have already announced over 500 reforms. and just a fraction of them will

save business and citizens more than $10 billion over the next five years. we got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving they could contain a spill because milk was somehow classified as an oil. with a rule like that, i guess it was worth spicrying over spid milk. i'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. i will not back down from making sure that an oil company can

contain the kind of oil spill we saw in the gulf two years ago. i will not back down from protecting our kids from mercury poisoning or making sure our food is safe and our water is clean. i will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny your coverage, or charge women differently than men. and i will not go back to the days when wall street was allowed to play by its own set of rules. the new rules we pass restore what should be any financial system's corporates.

getting funding to entrepreneurs with the best ideas and getting loans to responsible families who want to buy a home or start a business or send their kids to college. so if you're a bank or financial institution, you're no longer allowed to make risky bets with your customers' deposits. you're required to write out a living will that shows how you'll pay if you fail because the rest of us are not bailing you out ever again. and if you're a mortgage lender or a payday lender or a credit card company, the days of signing people up for things they can't afford with confusing forms and deceptive practices, those days are over. americans have a watch dog with richard cordray with one job, to

lock out for them. 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 anti-fraud laws because there's no real penalty for being a repeat offender. that's bad for consumers and bad for the vast majority of bankers and 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 generals to expand our investigations into the abuse and lending of risky housing mortgages that led to the housing crisis. this will hold accountable those

who broke the law, and help turn the page on an era of recklessness that hurt so many americans. a return to the american values of fair play and shared responsibility will help protect our people and our economy. it should also guide us as we look to pay down our dent and invest in our future. right now, our most immediate priority is stopping a tax hike on 160 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. that means making choices. right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary taction break for the wealthiest 2% of americans. right now because of loopholes and shelters in the tax code, a quarter of all millionaires pay less tax 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 denbt, 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 cost of medicare and medicaid and strengthing social security as long as they remain a guarantee for seniors. but in return, we need to change our tax codes so people like me and an awful lot of members of congress pay our fair share of taxes.

tax reforms should follow the buffett rule. if you make more than $1 million a year, you should not pay less than 30% in taxes. and my republican friend tom coburn is right. why should you stop subsidizing millionaires? if you earn more than $1 million, you shouldn't get special tax cuts or reductions. on the other hand, if you make less than $250,000 a year like 98% of american families, your taxes shouldn't go up. you're the ones struggling with rising costs and staggering 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 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. [ applause ] now, i recognize the 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 benefitted from that fiasco? i talked tonight about the deficit of trust between main street and wall street, but the divide between this street and the rest of the country is just as bad. and it seems to get worse every year. 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'll sign it tomorrow.

let's limit any elected official from owning stock in the pact. let's miake sure people that bundle campaign contributions for congress can't lobby congress and vice versy. an idea that has bipartisan sport, 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 blamed. now both parties should put an end to it. for starters, i ask them to pass

a simple rule that all judicial and public nominations receive a simple umor down vote within 90 days. the executive branch also needs to change. too often, it's inefficient, outdated, and remote. that's why i have asked this congress to grant me the authority to consolidate the federal bureaucracy so 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 ridged ideologists instead of building consensus around common sense ideas. i'm a democrat, but i believe what republican abraham lincoln believed. the government should do for people only what they can't do better by themselves and no more. [ applause ] that's why my education reform offered 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 complained most about government spending have supported federally finances roads and clean energy projects and federal offsuits for 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. i can do a whole lot more with your help. because when we act toort, there's nothing the united states of america can't achieve.

that's the lesson we have 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 qaeda operatives who remain are scrambling, knowing they can't escape the reach of the united states. from this position of strength, we have begun to wind down the war in afghanistan. 10,000 of our troops have come home. 23,000 more will leave by the end of this summer. this transition will continue, and we will build an enduring partnership with afghanistan so it is never again a source of attacks against america.

the tide of war recedes, a wave of change has washed over the northeast, from asia to trip olli. a year ago, gadhafi was one of the largest serving dockitaries, a murderer with blood on his hands. today, he's gone. i have no dowd that the asad regime will soon discover that the forces of change can not be reversed and 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'll advocate for those values that have served our own country so well. we will stand against violence and intimidation. we'll stand for the rights and dignity of all human beings, man and women, christians, muslims, and jews. we will support policies that lead to strong and stable democracies and open market because tyranny is no match for liberty. and we will safe guard america's own security against those who threaten our citizens, our friends, and our interests. look at iran. through the powerf our democracy, a world that was one 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 alliancing in europe and asia are stronger than ever. our ties to the americans are de deeper. our iron clad commitment, and i

meanire clad to israel security has meant the closest military operation between the two countries in history. we've made it clear that america is a pacific power, with a new beginning in burma with new hope. from the coalitions we have built to secure nuclear materials to the missions we led against hunger and disease, and the blows we have dealt 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 capetown to rio, where opinions of america are higher than they have 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 proposed a new defense strategy that insures 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 have sent the congress legislation that will protect our country from the growing threat of cyberthreats. above all, our freedom endures because the men and women in uniform who depend it. [ applause ]

>> when they come home, we must serve them as well as they have served us. that includes giving them the care and benefits they have earned, which is why we have increased annual v.a. spending every year i have been president. and it means in li s enlisting veterans in the work of rebuilding our nation. with the bipartisan support of the congress, we're providing new tax credits to companies who hire vets. michelle and joe biden have worked with businesses to secure a pledge of 130,000 jobs for vets and their families, and tonight i'm proposing a veterans jobss kor who will hire them as cops and firefighters so america

is as strong as those who defend it. which brings me back to where i began. those of us who have 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.

one of my proudest possessions is the flag that the field 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 he didn't deserve credit for the mission.

it only succeeded, he said, because every single member of the 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 separating the women and children from the fight. the fields who charged up the stairs. more than that, the mission only succeeded because every member of the unit trusted each other, because you can't charge up the stairs in the 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 open, and the state of our union will always be strong. thank you, god bless you, and god bless the united states of america. [ applause ] >> the president of the united states speaking to a joint session of congress, over an

hour on a wide range of issues. mostly domestic issues, mostly issues involving jobs, jobs, and jobs. there's gabby giffords, the congresswoman from arizona injured a year ago, in a gun attack. the president going down and receiver some members of his cabinet, members from the joint chiefs of staffs. and he'll be walking out of the chamber. i want to go around and get thoughts from our correspondents. gloria, what did you think? >> what the president gave us is a laundry list of things he wand to do that he believes government can actually help with in terms of energy, education, manufacturing, and most important, what he did was he laid down a marker about tax reform. and he said that if you make more than a million dollars a year, wolf, you should not pay less than 30% in taxes.

that stands in stark contrast to the news we heard about mitt romney and his great wealth and his 14% tax rate. >> he didn't mention mitt romney by name, but that was a point there. john king, what did you think? >> no question that the american people are going to have a very, very clear contrast this november on so many issues. the president defending his plan on raising taxes on the rich, he defe defended more government intervention, spending, health care law and the new flgz regulation, the dodd-frank bill passed after 2007-2008, said he will not go back repeatedly and won't go back on policy, and he said on foreign policy, america is back, and those who say otherwise don't know what they're talking about. look at any of the republican candidates running for president, and you'll hear the

opposite. the american public got an idea of the clear contrast they'll have to decide in november. >> he was referring to the republican candidates when he said the interest has waned, they have no idea what they're talking wrubt. a pretty defiant president of the united states. >> and you heard him try to inoculate himself against some of the attacks republicans will lodge against him in the course of his campaign about the collapse of the housing market, about over the keystone xl pipeline he didn't support, and over some sof the job loss said. he proposed a new housing program. he talked about the natural gas industry he plans to expand, and he emphasized that the actual oil industry has expanded under him, which is something you'll hear about when he's hitting the campaign trail, and he emphasized the auto industry and how he's helped bolster that a big, big, big message you'll

hear him push in michigan. then the theme about congress and exercising the ethics theme. something he seemed to lecture congress about there, but it was a subtle way to distance himself from congress without taking them to task while he's standing in front of them tonight. >> dana bash is inside the ch chamber as we see the president getting ready to lever. >> doing some gripping and grinning before he heads out. this morning, john boehner told a few of us that he and most republicans and the president and most democrats are from different planets. and you definitely saw that tonight. just even in the dynamic of this room, of this house chamber. the president making clear that his solutions for the most part is to invest public money, and every time he said that, you saw republicans basically sitting on their hands, stone cold, no applause at all. one thing i definitely want to point out there, was a very

interesting dynamic talking about bipartisanship. that had to do with gabby gifford. she was sitting next to a republican congressman from her home state of arizona. every time she wanted to get up to demonstrate applause or to stand up with her fellow democrats, he helped her up, so many, many times he was probably the only republican standing in the room because he was helping his fellow democrat stand up. ironically, if she had not been shot, he might have been running for senate against jeff blake. that was a moment to watch over and over again. >> very emotional moment for all of us watching. david gergen, you served for four presidents, what would you give the president for the sdraesz? >> it was a politically shrewd speech. it will mobilize democrats, win over some independents, he

refrained the conversation. after the republican debates, he had a different take, a different agenda. far more government intervention to solve problems. far more spending. he moved away from talking about deficits that occupied our time so much. republicans are going to have, as john kaing said, a huge contrast. on many occasions, if the speech had been 30% shorter, it would have been 30% more powerful. but bill clinton gave long state of the union addresses, they were very powerful. we'll have to see, i may be wrong. >> we're awaiting the republican response from mitch daniels, the governor from indiana. paul begala, you helped write several of the state of the union addresses. did this president need an editor to cut it down? >> i'm weird this way, i love it, and particularly this conclusion. that was worth staying for. that was really powerful.

the whole tone was much more populous than this president has been, suggesting he relishes the idea of stepping up and being campaigner in chief. the thing that struck me, the beginning and the ending, is how authenticly and comfortably and confidently he inhabits the role of commander in chief. when they salute him, they don't know what to do. no longer, he is very comfortable being the commander in chief, and he spoke about it. politically, a great speech, but i love seeing my commander in chief being that powerful. >> he's walking out of the chamber right now. ari fleischer, you worked for george w. bush, what did you think of that speech? >> there was hardly anything in the speech i liked. let me start with the thing i like and like a lot. that was, i salute the president, the courageous decision to authorize the

decision to get bin laden. he deserves the credit for that and he got it tonight. the rest of it, the whole emphasize, the whole reason for being in government is to spend other people's money. is to take from those who have money and redwint it to others he thinks should have money instead. this is everything he seeks to do in the presidency. the body language, the emotion, little to nothing there on reducing the debt. very little to nothing on social security or medicare. or as we're about to hear from mitch daniels, the red menace of death. really passing mentions, wasn't the emphasize of the speech tonight. you get the sense what he really wants to talk about, how to spend more people's money on this program, that program, that program because the federal government creates a lot of entitlement, and the spending programs know how to do it better than anyone else. >> let me get roland martin to

weigh in. they appealed to the liberal base. we saw them standing up. >> but it also appealed to american people. we can talk ability the people in the room, but the president basically said, congress, get your butt to work. paul is right. the close there was absolutely strong. any preacher would love to have that kind of close. it's a mission that matters. i'll tell you, ari, if you're out there, republican or democrat, and you're trying to keep your home, you like what the president had to say. if you're a republican or democrat and you want your kids in college and you want that tax credit, you have no problem with what the president had to say. i think, this is not a question of let's focus on the dent or whatever. this was a president saying i'm speaking to the american people, and congress, it's time to stop playing games and be about one nation, one accord. let's move together. >> candy crowley -- hang on, ari. >> candy, a lot of themes the

president is going to be delivering in the course of the next many months leading up to november we heard today. >> we did. this was the blueprint. you will hear bits and pieces of it as he moves forward. as a matter of fact, as he starts tomorrow, and he's got a c couple three days of campaigning or talking to the american public, and you'll hear these things again, energy and education, moving forward for fairness. i thought that the speech itself, there certainly wurb some things intended, and jessica spoke to it, intended to draw the sting from republicans. i thought one of the more interesting lines in it was about, it's time to apply the same rules from top to bottom. no bail-outs, no hand-outs, and no cop-out said. sort of addressing the fairness issue that republicans keep bringing up and saying is really about envy.

and i agree with paul and roland that it was interesting that he wrapped the entire economic speech at both ends, beginning with the iraq war is over and ending with, and by the way, osama bin laden is dead. the truth is this president gets higher marks for his handling of foreign policy now than he does for his handling of the economy. it was an astute political move of him. >> ari fleischer, you wanted to make another point. >> roland's point about how the public will receive the speech, in 2008, the public loved barack obama's speeching. in 2009, they really liked them. in 2010, they liked them. in 2011, they didn't like them. now, in 2012, the people have heard so much of this before, if the economy is bad, dent is sky high, spending is out of control, and unemployment is out of control. it hasn't worked, in fact, it's

agruvigravated what we have. >> i wasn't speaking about the speech, i was speaking about policy. i grew up in houston, an oil and gas city and state. if you're a parent watching right now, you heard the president talking about a policy when it comes to keeping your kids in school, when it comes to keeping your house from being foreclosed. that's not a speech, it's policy. >> we're about to get the republican response. mitch daniels is the governor of indiana. he'll deliver the republican response. it's much more difficult to deliver an effective response because it's usually not before an audience. there won't be any applause. let's listen. >> greetings from the home of super bowl xlvi. the status of loyal opposition imposes on those out of power some serious responsibilities.

to show respect for the presidency and its occupants, to express agreement where it exists. republicans tonight salute our president for instance for his aggressive pursuit of the murders of 9/11 and for bravely backing long overdue changing in public education. i would add to that list adm admiration to the strong family commitment he and the first lady have displayed to a nation lacking. the president seemed to find a sunny side in the economic condition, but when he claimed the state of the union is anything but gray, he must know in his heart it's anything but true. he didn't cause the economic and fiscal crisis that exists tonight, but he elected on a promise to fix them, and he can't claim to have done anything but make them worse. 1 in 5en