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 talk 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. some of this has to do with the corrosive influence of money and politics. together let's take some steps to fix that. send me a bill that bands insider trading by members of congress, and i will sign it tomorrow. ( applause ) 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. (scattered applause) neither party has been blameless in these tactics. now both parties should put an end to it. ( applause ) for starters, i ask the senate to pass a simple rule, that all judicial and public nominations receive a simple

up or down vote within 90 days. ( applause ) 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 too often it's inefficient, outdated and remote.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, that our government is leaner, quicker, and more responsive to the needs of the american people. ( applause ) 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 common-sense ideas. i'm a democrat. but i believe what republican abraham lincoln believed: the government should do for people only what they cannot do better by themselves and no more. ( applause ) (cheering) 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. 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. ( applause ) 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 qaeda operatives who remain are scrambling, knowing that they can't escape the reach of the united states of america. ( applause ) from this position of strength, we've 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 to afghan will continue and we will build an enduring partnership with afghanistan so that it is never again a source of attacks against america. ( applause ) as the tide of war recedes, a wave of change has washed across the middle east and north africa, from tunis to

cairo, from tripoli. a year ago, qaddafi 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 assad regime will soon discover that the forces of change cannot be reversed and that human dignity cannot be denied. ( applause ) how this incredible transformation will end remains uncertain. but we have a huge stake in the outside. 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. 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. ( applause ) 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. ( applause )

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 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. ( applause ) 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've been in years. yes, the world is changing. no, we can't control every event. but mercury mains the one indispensable nation in world affairs. as long as i'm president, i intend to keep it that way. ( applause ) that's why working with our military leaders, i 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 to congress legislation that will secure our country from the growing

dangers of cyber threats. ( applause ) above all, our freedom endures because the men and women in uniform who defend it. ( applause ) 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 v.a. spending

every year i've been president. ( applause ) 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 joe biden have worked with american businesses to secure a pledge of 135,000 jobs for veterans and their families. tonight i'm proposing a veterans jobs corps that will help our communities hire veterans as cops and firefighters so that america is strong as those who defend her. ( applause ) 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 to the american 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 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 your union will always be strong. thank you. god bless you and god bless the united states of america. ( cheers and applause ) >> ifill: and that is president obama's third state of the union speech.

he spoke for one hour, four minutes and 45 seconds, longer than his 60-minute speech last year. i believe it's safe to call it a laundry list of ideas, of big ideas, of overarching and a fair amount of congressional scolding in that. some of it greeted with enthusiastic applause, some of it not so much. with me now are david brooks and ruth marcus. david, give me your first reaction to this. >> brooks: over an hour. republicans don't go. it was his best state of the union speech. look at what he tried to achieve. 38% approval among independents. is he going to wage a campaign that really goes to their issues, that gives them a whole series of policies? i'm not a liberal but i'm sort of for that. if you look at the policies that were in the speech, i didn't think they were the biggest things in the world. i don't personally think they're sufficient. they're pretty reasonable. they're pretty moderate i think on balance.

on the whole i think it was a successful speech. >> ifill: the president always goes for the small things. i remember when bill clinton talked about school uniforms. he was derided for that. he was talking about vests for police that could stop a bullet. >> marcus: i'm not sure they're completely comparable. i think i was struck by three things. first of all, in a year like this, in an election year always unmistakable undertone of campaign rhetoric that you hear. when he talked about the importance of passing the dream act, there are certain candidates out there who want to be president who don't agree with that. when he talked about the... how it's not envy to want a fair tax code, there are certain candidates out there whom he was speaking to. mitt romney. there is an inevitable acknowledgment of the new reality. he basically said we can't get comprehensive immigration reform passed. we can't get climate change

legislation passed. so let's go for the smaller works. then finally i thought as david did that he did a very good job laying out his vision of government and the fundamentally different vision of government than his republican opponents, all of them, where he sees the sort of vigorous role for government and he ticked them off broadly: in manufacturing, in education, and in energy policy. then he pivoted to talk about what i think is really the defining difference between him and the republicans which has to do with the tax code and the fairness of the tax code and the divide between the top and mitt romney's rate and the rate paid by others. >> ifill: i was struck by the president's kind of a forceful pushback against the notion that america is in decline which is another theme we hear a lot on the campaign trail. >> brooks: right. the argument for the republicans is where... we're slipping, losing vitality, turning more into europe.

therefore you need a total rebooting. that is their view. his view is we need smaller programs. if you look at the things he actually proposed today, the multinational minimum tax, the general electric tax, trade enforcement on china, more off shore oil and gas drilling, a navy program for energy, a 90- day filibuster. these are all pretty small stuff. most of them are quite reasonable. i think most of the republicans in the quiet room would say, yeah, that's pretty reasonable. >> ifill: he also was talking about the things he considers good news. nobody else is talking about. killing of osama bin laden, the rescue of the auto industry, the clean-up of the gulf. but he didn't talk that much about his signature legislative achievement, health care. >> marcus: there were two or three sentences about health care. one about how he wasn't going to let some pieces of it be dismantled. but this was not trumpeting what they had certainly hoped

would have been the signature achievement of his presidency. something that was thought by democratic presidents in harry truman. >> ifill: as we watch the president walk out of the hall tonight it's really interesting. you wouldn't know that just a few minutes ago he was accusing this congress of carrying out a perpetual campaign of mutual destruction. that was pretty tough language coming from a president to a joint session of congress. >> brooks: he does believe in institutions quite a lot. i thought the institutional reform part was one of the better parts of the speech when he opposed the filibustering and talked about getting the nominees. he sort of had passion. i think that is genuine to him. it was not particularly well received. it's in the perpetual executive branch grab for power. it will be a campaign theme. they're the do-nothing congress. i'm trying to do something. i'm running against a republican congress. >> marcus: one does have to point out in his call for

filibusters that we saw sitting there the chief justice of the united states whom he chose to filibuster. it depends on how you feel about that may depend on where you sit. >> ifill: we also see richard cordray sitting in the first lady's box, the new consumer watchdog who was on the hill today being grilled by his recess appointment because he would be filibustered if he tried to get him appointed. you know, we're told there were 190 members of congress involved in date night, sitting across party lines. there wasn't the jack in the box quality of people standing up to applaud but it was hard to gauge what more of what he said was welcome. >> brooks: it's hard to gauge. i guess i saw it more as an attack on congress. i mean there was some liberal versus conservative but i thought there was relatively little of that picking a big ideological fight. the republicans want a clear

ideological fight saying we have an economy that is winding down. we have to do very big things if we're going to cut the job losses and cut the slow growth of small employment. he didn't want to pick that kind of fight. i politically think he's wise not to want to pick that kind of fight. it actually could have been a lot hotter than what we saw. >> ifill: is it possible he doesn't pick the fights right now, ruth, because he doesn't have the.... >> i think there's an interest on the other side and not necessarily picking fights in that venue. so we had the very interesting image of eric cantor, the house majority leader, clapping as the president called for an extension of the payroll tax. reduction. now that's easy to clap. it's hard to do. but that was quite interesting. >> ifill: actually where there seemed to be the most agreement across the party lines was when they were talking about tax. the president spent a lot of time talking about making the tax code more-- i think the word fair or fairness he used eight times.

>> brooks: that polls pretty well. some of the taxes he talks about little tax cuts here and there, cutting taxes on the payroll for the bottom 98%. cutting taxes on businesses. he mentioned cutting taxes quite a lot. in many ways this was his most clintonian speech ever. >> ifill: what do you mean? >> a lot of small bore stuff. that was clintonian. a lot of stuff that seems kind of moderate, seems kind of triangulating, cutting taxes on businesses. it's not entirely an accident. there are a lot of clintonians in the white house in senior positions. nonetheless for a guy who campaigned not only really against bush, he campaigned against clinton, against some of the childish things that were going on in washington i'd say he's become a lot more like clinton as time has gone by. >> ifill: maybe that's what happens when it takes a while. we're waiting by the way for a few moments until we get the republican response to the state of the union that is going to be delivered by mitch daniels the governor of indiana who a lot of republicans are hoping he

would run for president. he chose not to. i wonder in this election year with all of this fractiousness that is happening on the campaign trail whether the president was clearly deciding tonight that he was going to give a more uplifting, optimistic, less kind of engaged kind of assault? >> i think there will be time enough for that. he was more engaged a few months ago when he gave the speech about economic inequality in kansas. and i think we saw the outlines of the ways in which he'll engage in the future but he did the appropriate thing here. i do want to point out one thing i thought was very interesting which was we heard about the buffet rule before but for the first time he really put a number on it. he said that the wealthiest, the millionaires should not pay less than 30% of their income in taxes. that's significantly more than where their tax burden or tends to be now. >> ifill: mitt romney today released his tax returns.

15% or 14% is what he said he's paying. >> brooks: does he want to propose raising the capital gains tax to 30%? i personally think the capital gains tax is the tax that's most sensitive to incentives and when you raise the rates at the top. i think that would be a pretty bold move. if he really raises the capital gains rate i would not want to be trading stocks tomorrow. that might not be. >> ifill: a bold move because of his base would applaud it but republicans would.... >> brooks: it would be extremely polarizing especially in the business community. >> ifill: what are his other options? in reality a president shows up and says i want to fix things. we should reach across the aisle and work together but here are the things i'm going to do without you. >> and you saw some examples of that. i'm going to sign an executive order that opens this for exploration or that tells the navy department to go for alternative energy and renewable energy sources,

things like that. this is what... we've seen this before. we saw it with president clinton. in a second term, in a situation where you've lost control of congress, that's what you do. you get your executive order book out and you start to fill it out. >> brooks: there was toughness towards china. clearly the administration hasate gotten much tougher on china in the last year or so than before. >> marcus: there's potentially a romney response because there's a lot of cage rattling there. i would argue a more responsible version of the cage rattling. >> brooks: there was also the mortgage refinance proposal. i'm not sure that's something they can do on our own. very intriguing policy. i'm not quite sure what it is. >> ifill: rp dropped out there without a lot of.... >> brooks: $3,000 a year mortgage deduction helping them refinance assuming they can actually get a refinance in this market. >> ifill: we've got about a minute until we hear from mitch dan yells the governor of indiana with the republican response. roou, if you are the... did

you hear anything you like? >> i think you heard that 30%, you heard that vision of government. you probably are not energized but i think david made a point in the sense that is not his complete target audience tonight because you have those independents who are less than thrilled. >> ifill: david? the other side. >> brooks: the republicans won't like it but the independents are looking at the republican race and they're going, this guy seems sort of reasonable. >> ifill: for the republican response to the president's address, we turn to indiana governor mitch daniels speaking to us from the indiana war memorial in the state capital. >> greetings from the home of super bowl 46. the status of loyal opposition imposes on those out of power some serious responsibilities. to show respect for the presidency and its occupant, to express agreement where it exists. republicans tonight salute our president for instance for his

aggressive pursuit of the murderers of 9/11 and for bravely backing long overdue changes in public education. i personally would add to that list admiration for the strong family commitment that he and the first lady have displayed to a nation sorely needing such examples. on these evenings, presidents naturally seek to find the sunny side of our national condition. but when president obama claims that the state of our union is anything but grave, he must know in his heart that this is not true. the president did not cause the economic and fiscal crises that continue in america tonight, but he was elected on a promise to fix them and he cannot claim that the last three years have made things anything but worse. the percentage of americans with a job is at the lowest in decades. one in five men of prime working age and nearly half of all persons under 30 did not go to work today. in three short years, an unprecedented explosion of spending with borrowed money