Madame Speaker, Vice President Biden, members of Congress, distinguished guests, and fellow Americans:
Our Constitution declares that from time to time, the president shall give to Congress information about the state of our union. For 220 years, our leaders have fulfilled this duty. They have done so during periods of prosperity and tranquility. And they have done so in the midst of war and depression; at moments of great strife and great struggle.
It's tempting to look back on these moments and assume that our progress was inevitable, that America was always destined to succeed. But when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach, victory was very much in doubt. When the market crashed on Black Tuesday and civil rights marchers were beaten on Bloody Sunday, the future was anything but certain. These were times that tested the courage of our convictions and the strength of our union. And despite all our divisions and disagreements, our hesitations and our fears, America prevailed because we chose to move forward as one nation and one people.
Again, we are tested. And again, we must answer history's call.
One year ago, I took office amid two wars, an economy rocked by severe recession, a financial system on the verge of collapse and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted immediately and aggressively. And one year later, the worst of the storm has passed.
But the devastation remains. One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. For those who had already known poverty, life has become that much harder.
This recession has also compounded the burdens that America's families have been dealing with for decades — the burden of working harder and longer for less, of being unable to save enough to retire or help kids with college.
So I know the anxieties that are out there right now. They're not new. These struggles are the reason I ran for president. These struggles are what I've witnessed for years in places like Elkhart, Ind., and Galesburg, Ill. I hear about them in the letters that I read each night. The toughest to read are those written by children asking why they have to move from their home, or when their mom or dad will be able to go back to work.
For these Americans and so many others, change has not come fast enough. Some are frustrated; some are angry. They don't understand why it seems like bad behavior on Wall Street is rewarded but hard work on Main Street isn't, or why Washington has been unable or unwilling to solve any of our problems. They are tired of the partisanship and the shouting and the pettiness. They know we can't afford it. Not now.
So we face big and difficult challenges. And what the American people hope what they deserve is for all of us, Democrats and Republicans, to work through our differences, to overcome the numbing weight of our politics. For while the people who sent us here have different backgrounds, different stories and different beliefs, the anxieties they face are the same. The aspirations they hold are shared: a job that pays the bills, a chance to get ahead. Most of all, the ability to give their children a better life.
You know what else they share? They share a stubborn resilience in the face of adversity. After one of the most difficult years in our history, they remain busy building cars and teaching kids, starting businesses and going back to school. They're coaching Little League and helping their neighbors. As one woman wrote me, "We are strained but hopeful, struggling but encouraged."
It is because of this spirit, this great decency and great strength that I have never been more hopeful about America's future than I am tonight. Despite our hardships, our union is strong. We do not give up. We do not quit. We do not allow fear or division to break our spirit. In this new decade, it's time the American people get a government that matches their decency, that embodies their strength.
And tonight, I'd like to talk about how together, we can deliver on that promise.
It begins with our economy.
Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there's one thing that has unified Democrats and Republicans, it's that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal.
But when I ran for president, I promised I wouldn't just do what was popular — I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.
So I supported the last administration's efforts to create the financial rescue program. And when we took the program over, we made it more transparent and accountable. As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks.
To recover the rest, I have proposed a fee on the biggest banks. I know Wall Street isn't keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.
As we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible and help Americans who had become unemployed.
That's why we extended or increased unemployment benefits for more than 18 million Americans, made health insurance 65 percent cheaper for families who get their coverage through COBRA and passed 25 different tax cuts.
Let me repeat: we cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food and other necessities, all of which helped businesses keep more workers. And we haven't raised income taxes by a single dime on a single person. Not a single dime.
Because of the steps we took, there are about 2 million Americans working right now who would otherwise be unemployed — 200,000 work in construction and clean energy, 300,000 are teachers and other education workers, tens of thousands are cops, firefighters, correctional officers and first responders. And we are on track to add another one-and-a-half-million jobs to this total by the end of the year.
The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That's right — the Recovery Act, also known as the stimulus bill. Economists on the left and the right say that this bill has helped saved jobs and avert disaster. But you don't have to take their word for it.
Talk to the small business in Phoenix that will triple its work force because of the Recovery Act.
Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created.
Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn't be laid off after all.
There are stories like this all across America. And after two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again.
But I realize that for every success story, there are other stories, of men and women who wake up with the anguish of not knowing where their next paycheck will come from — who send out resumes week after week and hear nothing in response. That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight.
Now, the true engine of job creation in this country will always be America's businesses. But government can create the conditions necessary for businesses to expand and hire more workers.
We should start where most new jobs do — in small businesses, companies that begin when an entrepreneur takes a chance on a dream or a worker decides it's time she became her own boss.
Through sheer grit and determination, these companies have weathered the recession and are ready to grow. But when you talk to small business owners in places like Allentown, Pa., or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they are mostly lending to bigger companies. But financing remains difficult for small business owners across the country.
So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I am also proposing a new small business tax credit — one that will go to over 1 million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.
Next, we can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the interstate highway system, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains or the new factories that manufacture clean energy products.
Tomorrow, I'll visit Tampa, Fla., where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. There are projects like that all across this country that will create jobs and help our nation move goods, services and information. We should put more Americans to work building clean energy facilities and give rebates to Americans who make their homes more energy efficient, which supports clean energy jobs. And to encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America.
The House has passed a jobs bill that includes some of these steps. As the first order of business this year, I urge the Senate to do the same. People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay.
But the truth is, these steps still won't make up for the 7 million jobs we've lost over the last two years. The only way to move to full employment is to lay a new foundation for long-term economic growth and finally address the problems that America's families have confronted for years.
We cannot afford another so-called economic expansion like the one from last decade — what some call the lost decade — where jobs grew more slowly than during any prior expansion, where the income of the average American household declined while the cost of health care and tuition reached record highs, where prosperity was built on a housing bubble and financial speculation.
From the day I took office, I have been told that addressing our larger challenges is too ambitious — that such efforts would be too contentious, that our political system is too gridlocked and that we should just put things on hold for awhile.
For those who make these claims, I have one simple question:
How long should we wait? How long should America put its future on hold?
You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China's not waiting to revamp its economy; Germany's not waiting; India's not waiting. These nations aren't standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs.
Well I do not accept second place for the United States of America. As hard as it may be, as uncomfortable and contentious as the debates may be, it's time to get serious about fixing the problems that are hampering our growth.
One place to start is serious financial reform. Look, I am not interested in punishing banks, I'm interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.
We need to make sure consumers and middle class families have the information they need to make financial decisions. We can't allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.
The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.
>> Obama's proposals
>> Republican response
>> Poll: What did you like best?
>> Obama's five challenges
>> Michelle Obama's look on Wednesday night
>> Complete coverage: Obama's 2010 State of the Union address