GEORGE W. BUSH
State of the Union Address
27 February 2001
( Note that this speech is not officially listed as a State of the Union Address. Regardless, it was perceived as being a State of the Union Address by the press and the public at the time it was delivered and is commonly remembered as being a State of the Union Address.)
Mr. Speaker, Mr. Vice President, members of Congress:
It's a great
privilege to be here to outline a new budget and a new approach for governing
our great country. I thank you for your invitation to speak here
tonight. I know Congress had to formally invite me, and it could
have been a close vote. So, Mr. Vice President, I appreciate you
being here to break the tie.
I want to thank so many of you who have accepted my invitation to come
to the White House to discuss important issues. We're off to a good
start. I will continue to meet with you and ask for your input.
You have been kind and candid, and I thank you for making a new President
The last time I visited the Capitol, I came to take an oath on the steps
of this building. I pledged to honor our Constitution and laws.
And I asked you to join me in setting a tone of civility and respect in
I hope America is noticing the difference, because we're making progress.
Together, we are changing the tone in the Nation's Capital. And this
spirit of respect and cooperation is vital, because, in the end, we will
be judged not only by what we say or how we say it, we will be judged by
what we're able to accomplish.
America today is a nation with great challenges, but greater resources.
An artist using statistics as a brush could paint two very different pictures
of our country. One would have warning signs: increasing layoffs,
rising energy prices, too many failing schools, persistent poverty, the
stubborn vestiges of racism. Another picture would be full of blessings:
a balanced budget, big surpluses, a military that is second to none, a
country at peace with its neighbors, technology that is revolutionizing
the world, and our greatest strength -- concerned citizens who care for
our country and care for each other.
Neither picture is complete in and of itself. And tonight I challenge
and invite Congress to work with me to use the resources of one picture
to repaint the other; to direct the advantages of our time to solve the
problems of our people. Some of these resources will come from government.
Some, but not all.
Year after year in Washington, budget debates seem to come down to an
old, tired argument: on one side, those who want more government,
regardless of the cost; on the other, those who want less government, regardless
of the need. We should leave those arguments to the last century,
and chart a different course.
Government has a role, and an important role. Yet, too much government
crowds out initiative and hard work, private charity and the private economy.
Our new governing vision says government should be active, but limited;
engaged, but not overbearing. And my budget is based on that philosophy.
It is reasonable, and it is responsible. It meets our obligations,
and funds our growing needs. We increase spending next year for Social
Security and Medicare, and other entitlement programs, by $81 billion.
We've increased spending for discretionary programs by a very responsible
4 percent, above the rate of inflation. My plan pays down an unprecedented
amount of our national debt. And then, when money is still left over,
my plan returns it to the people who earned it in the first place.
A budget's impact is counted in dollars, but measured in lives. Excellent
schools, quality health care, a secure retirement, a cleaner environment,
a stronger defense -- these are all important needs, and we fund them.
The highest percentage increase in our budget should go to our children's
education. Education is not my top priority -- education is my top
priority and, by supporting this budget, you'll make it yours, as well.
Reading is the foundation of all learning. So during the next
five years, we triple spending, adding $5 billion to help every child in
America learn to read. Values are important, so we've tripled funding
for character education to teach our children not only reading and writing,
but right from wrong.
We've increased funding to train and recruit teachers, because we know
a good education starts with a good teacher. And I have a wonderful
partner in this effort. I like teachers so much, I married one.
Laura has begun a new effort to recruit Americans to the profession that
will shape our future -- teaching. She will travel across America
to promote sound teaching practices and early reading skills in our schools
and in programs such as Head Start.
When it comes to our schools, dollars alone do not always make the difference.
Funding is important, and so is reform. So we must tie funding to
higher standards and accountability for results.
I believe in local control of schools. We should not, and we will
not, run public schools from Washington, D.C. Yet when the federal
government spends tax dollars, we must insist on results. Children should
be tested on basic reading and math skills every year between grades three
and eight. Measuring is the only way to know whether all our children
are learning. And I want to know, because I refuse to leave any child
behind in America.
Critics of testing contend it distracts from learning. They talk
about teaching to the test. But let's put that logic to the test.
If you test a child on basic math and reading skills, and you're teaching
to the test, you're teaching math and reading. And that's the whole
idea. As standards rise, local schools will need more flexibility
to meet them. So we must streamline the dozens of federal education
programs into five, and let states spend money in those categories as they
Schools will be given a reasonable chance to improve and the support
to do so. Yet, if they don't, if they continue to fail, we must give
parents and students different options -- a better public school, a private
school, tutoring or a charter school. In the end, every child in
a bad situation must be given a better choice because, when it comes to
our children, failure is simply not an option.
Another priority in my budget is to keep the vital promises of Medicare
and Social Security, and together we will do so. To meet the health
care needs of all America's seniors, we double the Medicare budget over
the next 10 years. My budget dedicates $238 billion to Medicare next
year alone, enough to fund all current programs and to begin a new prescription
drug benefit for low-income seniors. No senior in America should
have to choose between buying food and buying prescriptions.
To make sure the retirement savings of America's seniors are not diverted
in any other program, my budget protects all $2.6 trillion of the Social
Security surplus for Social Security, and for Social Security alone.
My budget puts a priority on access to health care, without telling
Americans what doctor they have to see or what coverage they must choose.
Many working Americans do not have health care coverage, so we will help
them buy their own insurance with refundable tax credits. And
to provide quality care in low-income neighborhoods, over the next five
years we will double the number of people served at community health care
And we will address the concerns of those who have health coverage,
yet worry their insurance company doesn't care and won't pay. Together
this Congress and this President will find common ground to make sure doctors
make medical decisions, and patients get the health care they deserve with
a patients' bill of rights.
When it comes to their health, people want to get the medical care they
need, not be forced to go to court because they didn't get it. We will
ensure access to the courts for those with legitimate claims. But
first, let's put in place a strong, independent review so we
promote quality health care, not frivolous lawsuits.
My budget also increases funding for medical research, which gives hope
to many who struggle with serious disease. Our prayers tonight are
with one of your own who is engaged in his own fight against cancer --
a fine representative, and a good man, Congressman Joe Moakley.
I can think of no more appropriate tribute to Joe than to have the Congress
finish the job of doubling the budget for the National Institutes of Health.
My new Freedom Initiative for Americans with Disabilities funds new
technologies, expands opportunities to work, and makes our society more
welcoming. For the more than 50 million Americans with disabilities,
we need to break down barriers to equality.
The budget I propose to you also supports the people who keep our country
strong and free, the men and women who serve in the United States military.
I'm requesting $5.7 billion in increased military pay and benefits, and
health care and housing. Our men and women in uniform give America
their best and we owe them our support.
America's veterans honored their commitment to our country through their
military service. I will honor our commitment to them with a million-dollar
increase to ensure better access to quality care and faster decisions on
My budget will improve our environment by accelerating the cleanup of
toxic brownfields. And I propose we make a major investment in conservation
by fully funding the Land and Water Conservation Fund. Our
national parks have a special place in our country's life. Our parks are
places of great natural beauty and history. As good stewards, we
must leave them better than we found them. So I propose providing
$4.9 billion over five years for the upkeep of these national treasures.
And my budget adopts a hopeful new approach to help the poor and the
disadvantaged. We must encourage and support the work of charities
and faith-based and community groups that offer help and love one person
at a time. These groups are working in every neighborhood in America
to fight homelessness and addiction and domestic violence; to provide a
hot meal or a mentor or a safe haven for our children. Government should
welcome these groups to apply for funds, not discriminate against them.
Government cannot be replaced by charities or volunteers. Government
should not fund religious activities. But our nation should support
the good works of these good people who are helping their neighbors in
need. So I propose allowing all taxpayers, whether they itemize or
not, to deduct their charitable contributions. Estimates show this could
encourage as much as $14 billion a year in new charitable giving, money
that will save and change lives.
Our budget provides more than $700 million over the next 10 years for
a federal compassion capital fund, with a focused and noble mission, to
provide a mentor to the more than 100 million children with a parent in
prison, and to support other local efforts to fight illiteracy, teen pregnancy,
drug addiction and other difficult problems.
With us tonight is the Mayor of Philadelphia. Please help me welcome
Mayor John Street. Mayor Street has encouraged faith-based and community
organizations to make a significant difference in Philadelphia. He's
invited me to his city this summer to see compassionate action. I'm
personally aware of just how effective the Mayor is. Mayor Street's
a Democrat. Let the record show, I lost his city, big time.
But some things are bigger than politics. So I look forward to coming
to your city, to see your faith-based programs in action.
As government promotes compassion, it also must promote justice. Too
many of our citizens have cause to doubt our nation's justice, when the
law points a finger of suspicion at groups, instead of individuals.
All our citizens are created equal, and must be treated equally.
Earlier today, I asked John Ashcroft, the Attorney General, to develop
specific recommendations to end racial profiling. It's wrong and
we will end it in America. In so doing, we will not hinder the work
of our nation's brave police officers. They protect us every day
-- often at great risk. But by stopping the abuses of a few, we will
add to the public confidence our police officers earn and deserve.
My budget has funded a responsible increase in our ongoing operations.
It has funded our nation's important priorities. It has protected
Social Security and Medicare. And our surpluses are big enough that
there is still money left over.
Many of you have talked about the need to pay down our national debt.
I listened, and I agree. We owe it to our children and grandchildren
to act now, and I hope you will join me to pay down $2 trillion in debt
during the next 10 years. At the end of those 10 years, we will have
paid down all the debt that is available to retire. That is more
debt, repaid more quickly than has ever been repaid by any nation at any
time in history.
We should also prepare for the unexpected, for the uncertainties of
the future. We should approach our nation's budget as any prudent
family would, with a contingency fund for emergencies or additional spending
needs. For example, after a strategic review, we may need to increase
defense spending. We may need to increase spending for our farmers
or additional money to reform Medicare. And so, my budget sets aside
almost a trillion dollars over 10 years for additional needs. That
is one trillion additional reasons you can feel comfortable supporting
We have increased our budget at a responsible 4 percent. We have
funded our priorities. We paid down all the available debt.
We have prepared for contingencies. And we still have money left
Yogi Berra once said, "When you come to a fork in the road, take it."
Now, we come to a fork in the road; we have two choices. Even though we
have already met our needs, we could spend the money on more and bigger
government. That's the road our nation has traveled in recent years.
Last year, government spending shot up 8 percent. That's far more
than our economy grew, far more than personal income grew, and far more
than the rate of inflation. If you continue on that road, you will
spend the surplus and have to dip into Social Security to pay other bills.
Unrestrained government spending is a dangerous road to deficits, so we
must take a different path. The other choice is to let the American
people spend their own money to meet their own needs.
I hope you will join me in standing firmly on the side of the people.
You see, the growing surplus exists because taxes are too high and government
is charging more than it needs. The people of America have been overcharged
and, on their behalf, I am here asking for a refund.
Some say my tax plan is too big. Others say it's too small.
I respectfully disagree. This plan is just right.
I didn't throw darts at the board to come up with a number for tax relief.
I didn't take a poll or develop an arbitrary formula that might sound good.
I looked at problems in the Tax Code and calculated the cost to fix them.
A tax rate of 15 percent is too high for those who earn low wages, so
we must lower the rate to 10 percent. No one should pay more than
a third of the money they earn in federal income taxes, so we lowered the
top rate to 33 percent.
This reform will be welcome relief for America's small businesses, which
often pay taxes at the highest rate. And help for small business
means jobs for Americans. We simplified the Tax Code by reducing
the number of tax rates from the current five rates to four lower ones,
10 percent, 15, 25 and 33 percent. In my plan, no one is targeted
in or targeted out. Everyone who pays income taxes will get relief.
Our government should not tax, and thereby discourage marriage, so we
reduced the marriage penalty. I want to help families rear and support
their children, so we doubled the child credit to $1,000 per child.
It's not fair to tax the same earnings twice -- once when you earn them,
and again when you die -- so we must repeal the death tax.
These changes add up to significant help. A typical family with
two children will save $1,600 a year on their federal income taxes.
Now, $1,600 may not sound like a lot to some, but it means a lot to many
families: $1,600 buys gas for two cars for an entire year; it pays
tuition for a year at a community college; it pays the average family grocery
bill for three months. That's real money.
With us tonight representing many American families are Steven and Josefina
Ramos. They are from Pennsylvania. But they could be from any one
of your districts. Steven is the network administrator for a school
district. Josefina is a Spanish teacher at a charter school.
And they have a two-year-old daughter.
Steven and Josefina tell me they pay almost $8,000 a year in federal
income taxes. My plan will save them more than $2,000. Let
me tell you what Steven says: "Two thousand dollars a year means
a lot to my family. If we had this money, it would help us reach
our goal of paying off our personal debt in two years' time." After
that, Steven and Josefina want to start saving for Lianna's college education.
My attitude is, government should never stand in the way of families
achieving their dreams. And as we debate this issue, always remember,
the surplus is not the government's money, the surplus is the people's
For lower-income families, my tax plan restores basic fairness. Right
now, complicated tax rules punish hard work. A waitress supporting
two children on $25,000 a year can lose nearly half of every additional
dollar she earns above the $25,000. Her overtime, her hardest hours,
are taxed at nearly 20 percent. This sends a terrible message:
you'll never get ahead. But America's message must be different.
We must honor hard work, never punish it. With tax relief, overtime
will no longer be over-taxed time for the waitress. People with the smallest
incomes will get the highest percentage of reductions. And millions
of additional American families will be removed from the income tax rolls
Tax relief is right and tax relief is urgent. The long economic
expansion that began almost 10 years ago is faltering. Lower interest
rates will eventually help, but we cannot assume they will do the job all
Forty years ago, and then 20 years ago, two Presidents, one Democrat,
one Republican, John F. Kennedy and Ronald Reagan, advocated tax cuts to,
in President Kennedy's words, get this country moving again. They
knew then what we must do now. To create economic growth and opportunity,
we must put money back into the hands of the people who buy goods and create
We must act quickly. The Chairman of the Federal Reserve has testified
before Congress that tax cuts often come too late to stimulate economic
recovery. So I want to work with you to give our economy an important
jump-start by making tax relief retroactive.
We must act now because it is the right thing to do. We must also
act now because we have other things to do. We must show courage
to confront and resolve tough challenges, to restructure our nation's defenses,
to meet our growing need for energy, and to reform Medicare and Social
America has a window of opportunity to extend and secure our present
peace by promoting a distinctly American internationalism. We will
work with our allies and friends to be a force for good and a champion
of freedom. We will work for free markets, free trade and freedom
from oppression. Nations making progress toward freedom will find
America is their friend. We will promote our values. We will
promote the peace. And we need a strong military to keep the peace.
But our military was shaped to confront the challenges of the past.
So I've asked the Secretary of Defense to review America's Armed Forces
and prepare to transform them to meet emerging threats. My budget
makes a down payment on the research and development that will be required.
Yet, in our broader transformation effort, we must put strategy first,
then spending. Our defense vision will drive our defense budget,
not the other way around.
Our nation also needs a clear strategy to confront the threats of the
21st century -- threats that are more widespread and less certain. They
range from terrorists who threaten with bombs to tyrants in rogue nations
intent upon developing weapons of mass destruction. To protect our
own people, our allies and friends, we must develop and we must deploy
effective missile defenses.
And as we transform our military, we can discard Cold War relics, and
reduce our own nuclear forces to reflect today's needs. A strong
America is the world's best hope for peace and freedom.
Yet the cause of freedom rests on more than our ability to defend ourselves
and our allies. Freedom is exported every day, as we ship goods and
products that improve the lives of millions of people. Free trade
brings greater political and personal freedom. Each of the previous
five Presidents has had the ability to negotiate far reaching trade agreements.
Tonight I ask you to give me the strong hand of presidential trade promotion
authority, and to do so quickly.
As we meet tonight, many citizens are struggling with the high cost
of energy. We have a serious energy problem that demands a national
energy policy. The West is confronting a major energy shortage that
has resulted in high prices and uncertainty. I've asked federal agencies
to work with California officials to help speed construction of new energy
sources, and I have direct Vice President Cheney, Commerce Secretary Evans,
Energy Secretary Abraham and other senior members in my administration
to develop a national energy policy.
Our energy demand outstrips our supply. We can produce more energy
at home while protecting our environment, and we must. We can produce more
electricity to meet demand, and we must. We can promote alternative energy
sources and conservation, and we must. America must become
more energy-independent, and we will.
Perhaps the biggest test of our foresight and courage will be reforming
Medicare and Social Security. Medicare's finances are strained and
its coverage is outdated. Ninety-nine percent of employer-provided
health plans offer some form of prescription drug coverage; Medicare does
not. The framework for reform has been developed by Senators Frist
and Breaux and Congressman Thomas, and now is the time to act.
Medicare must be modernized, and we must make sure that every senior
on Medicare can choose a health care plan that offers prescription drugs.
Seven years from now, the baby boom generation will begin to claim Social
Security benefits. Every one in this chamber knows that Social Security
is not prepared to fully fund their retirement. And we only have
a couple of years to get prepared. Without reform, this country will
one day awaken to a stark choice: either a drastic rise in payroll
taxes or a radical cut in retirement benefits.
There is a better way. This spring I will form a presidential
commission to reform Social Security. The commission will make its
recommendations by next fall. Reform should be based on these principles:
It must preserve the benefits of all current retirees and those nearing
retirement. It must return Social Security to sound financial footing.
And it must offer personal savings accounts to younger workers who want
Social Security now offers workers a return of less than 2 percent on
the money they pay into the system. To save the system, we must increase
that by allowing younger workers to make safe, sound investments that yield
a higher rate of return. Ownership, access to wealth and independence
should not be the privilege of the few. They are the hope of every
American, and we must make them the foundation of Social Security.
By confronting the tough challenge of reform, by being responsible with
our budget, we can earn the trust of the American people. And we can add
to that trust by enacting fair and balanced election and campaign reforms.
The agenda I have set before you tonight is worthy of a great nation.
America is a nation at peace, but not a nation at rest. Much has
been given to us, and much is expected. Let us agree to bridge old
divides. But let us also agree that our goodwill must be dedicated
to great goals. Bipartisan is more than minding our matters.
It is doing our duty.
No one can speak in this Capitol and not be awed by its history. As
so many turning points, debates in these chambers have reflected the collected
or divided conscience of our country. And when we walk through Statuary
Hall and see those men and women of marble, we're reminded of their courage
Yet America's purpose is never found only in statues or history. America's
purpose always stands before us. Our generation must show courage
in a time of blessing, as our nation has always shown in times of crisis.
And our courage, issue by issue, can gather to greatness and serve our
country. This is the privilege and responsibility we share.
And if we work together, we can prove that public service is noble.
We all came here for a reason. We all have things we want to accomplish
and promises to keep. Juntos podemos -- together we can.
We can make Americans proud of their government. Together we can
share in the credit of making our country more prosperous and generous
and just, and earn from our conscience and from our fellow citizens the
highest possible praise: Well done, good and faithful servants.
Thank you all. Good night and God bless.