INAUGURAL ADDRESS-- January 20, 2001

This peaceful transfer of authority is rare in history, yet common in our country. With a simple oath, we affirm old traditions, and make new beginnings. As I begin, I thank President Clinton for his service to our nation. And I thank Vice President Gore for a contest conducted with spirit, and ended with grace.

I am honored and humbled to stand here, where so many of America's leaders have come before me, and so many will follow.

We have a place, all of us, in a long story; a story we continue, but whose end we will not see. It is the story of a new world that became a friend and liberator of the old. The story of a slave-holding society that became a servant of freedom. The story of a power that went into the world to protect but not possess, to defend but not to conquer. It is the American story; a story of flawed and fallible people, united across the generations by grand and enduring ideals.

The grandest of these ideals is an unfolding American promise: that everyone belongs, that everyone deserves a chance, that no insignificant person was ever born. Americans are called to enact this promise in our lives and in our laws. And though our nation has sometimes halted, and sometimes delayed, we must follow no other course.

Through much of the last century, America's faith in freedom and democracy was a rock in a raging sea. Now it is a seed upon the wind, taking root in many nations. Our democratic faith is more than the creed of our country, it is the inborn hope of our humanity; an ideal we carry but do not own, a trust we bear and pass along. And even after nearly 225 years, we have a long way yet to travel.

While many of our citizens prosper, others doubt the promise � even the justice � of our own country. The ambitions of some Americans are limited by failing schools, and hidden prejudice, and the circumstances of their birth. And sometimes our differences run so deep, it seems we share a continent, but not a country.

We do not accept this, and will not allow it. Our unity, our union, is the serious work of leaders and citizens in every generation. And this is my solemn pledge: I will work to build a single nation of justice and opportunity.

I know this is within our reach, because we are guided by a power larger than ourselves, Who creates us equal in His image.

And we are confident in principles that unite and lead us onward.

America has never been united by blood or birth or soil. We are bound by ideals that move us beyond our backgrounds, lift us above our interests, and teach us what it means to be citizens. Every child must be taught these principles. Every citizen must uphold them. And every immigrant, by embracing these ideals, makes our country more, not less, American.

Today we affirm a new commitment to live out our nation's promise through civility, courage, compassion and character.

America, at its best, matches a commitment to principle with a concern for civility. A civil society demands from each of us good will and respect, fair dealing and forgiveness.

Some seem to believe that our politics can afford to be petty because, in a time of peace, the stakes of our debates appear small. But the stakes, for America, are never small. If our country does not lead the cause of freedom, it will not be led. If we do not turn the hearts of children toward knowledge and character, we will lose their gifts and undermine their idealism. If we permit our economy to drift and decline, the vulnerable will suffer most.

We must live up to the calling we share. Civility is not a tactic or a sentiment. It is the determined choice of trust over cynicism, of community over chaos. And this commitment, if keep it, is a way to shared accomplishment.

America, at its best, is also courageous.

Our national courage has been clear in times of depression and war, when defending common dangers defined our common good. Now we must chose if the example of our fathers and mothers will inspire us or condemn us. We must show courage in a time of blessing, by confronting problems instead of passing them on to future generations.

Together, we will reclaim America's schools, before ignorance and apathy claim more young lives. We will reform Social Security and Medicare, sparing our children from struggles we have the power to prevent. We will reduce taxes, to recover the momentum of our economy and reward the effort and enterprise of working Americans. We will build our defenses beyond challenge, lest weakness invite challenge. We will confront weapons of mass destruction, so that a new century is spared new horrors.

The enemies of liberty and our country should make no mistake, American remains engaged in the world, by history and by choice, shaping a balance of power that favors freedom. We will defend our allies and our interests. We will show purpose without arrogance. We will meet aggression and bad faith with resolve and strength. And to all nations, we will speak for the values that gave our nation birth.

America, at its best, is compassionate.

In the quiet of American conscience, we know that deep, persistent poverty is unworthy of our nation's promise. And whatever our views of its cause, we can agree that children at risk are not at fault. Abandonment and abuse are not acts of God, the are failures of love. And the proliferation of prisons, however necessary, is no substitute for hope and order in our souls.

Where there is suffering, there is duty. Americans in need are not strangers, they are citizens; not problems, but priorities; and all of us are diminished when any are hopeless.

Government has great responsibilities, for public safety and public health, for civil rights and common schools. Yet compassion is the work of a nation, not just a government. And some needs and hurts are so deep they will only respond to a mentor's touch or a pastor's prayer. Church and charity, synagogue and mosque, lend our communities their humanity, and they will have an honored place in our plans and in our laws.

Many in our country do not know the pain of poverty. But we can listen to those who do. And I can pledge our nation to a goal: When we see that wounded traveler on the road to Jericho, we will not pass to the other side.

America, at its best, is a place where personal responsibility is valued and expected.

Encouraging responsibility is not a search for scapegoats, it is a call to conscience. And though it requires sacrifice, it brings a deeper fulfillment. We find the fullness of life, not only in options, but in commitments. And we find that children and community are the commitments that set us free.

Our public interest depends on private character; on civic duty and family bonds and basic fairness; on uncounted, unhonored acts of decency which give direction to our freedom.

Sometimes in life we are called to do great things. But as a saint of our times has said, every day we are called to do small things with great love. The most important tasks of a democracy are done by everyone.

I will live and lead by these principles: to advance my convictions with civility; to pursue the public interest with courage; to speak for greater justice and compassion; to call for responsibility, and try to live it as well. In all these ways, I will bring the values of our history to the care of our times.

What you do is as important as anything government does. I ask you to seek a common good beyond your comfort; to defend needed reforms against easy attacks; to serve your nation, beginning with your neighbor. I ask you to be citizens. Citizens, not spectators. Citizens, not subjects. Responsible citizens, building communities of service and a nation of character.

Americans are generous and strong and decent, not because we believe in ourselves, but because we hold beliefs beyond ourselves. When this spirit of citizenship is missing, no government program can replace it. When this spirit is present, no wrong can stand against it.

After the Declaration of Independence was signed, Virginia statesman John Page wrote to Thomas Jefferson: ``We know the race is not to the swift nor the Battle to the Strong. Do you not think an Angel rides in the Whirlwind and directs this Storm?''

Much time has passed since Jefferson arrived for his inauguration. The years and changes accumulate. But the themes of this day he would know: our nation's grand story of courage, and its simple dream of dignity.

We are not this story's author, who fills time and eternity with His purpose. Yet His purpose is achieved in our duty; and our duty is fulfilled in service to one another.

Never tiring, never yielding, never finishing, we renew that purpose today: to make our country more just and generous; to affirm the dignity of our lives and every life.

This work continues. This story goes on. And an angel still rides in the whirlwind and directs this storm.

God bless you all, and God bless America.

REMARKS BY THE PRESIDENT AT REPUBLICAN CONGRESSIONAL RETREAT--February 2, 2001

Kingsmill Resort Landing
Williamsburg, Virginia
12:55 P.M. EST

THE PRESIDENT:  Thank you all very much.  I like to give short speeches and I'm always on time.  (Laughter and applause.)  But, evidently, I didn't get the dress code.  (Laughter.)

I really appreciate you, Speaker, thanks for your friendship, thanks for your leadership.  These are two really good men.  (Applause.)  And I want to thank you, J.C. and Rick, as well, for your -- pretty darn eloquent guy for being from Oklahoma.  (Laughter.)  He can tell it.  I appreciate you, thank you very much.  I'm looking forward to welcoming the University of Oklahoma football team to the White House.  (Applause.)

I appreciate the Chairman of the Republican Party being here.  I chose a fellow governor -- or I asked a fellow governor to serve, and he's a good one.  He's a strong leader.  He's done a fabulous job for the Commonwealth of Virginia and I appreciate you being here, Jim, thank you very much. (Applause.)

I'm glad you get to see the Secretary of the Treasury, who's smart and capable.  He's surrounded by Senator Grassley and Congressman Thomas, good work.  (Laughter.)  It didn't take you long to transition from the private sector.  And Condi is here, Condi Rice; a capable Chief of Staff, Andy Card; Nick Calio, who's going to really head up our congressional affairs.

The reason I bring these people up is that they're here to serve America, they're here to work with you to make our jobs easier.  And I've assembled one of the finest staffs any President has ever done in the White House.  (Applause.)

I'm making my rounds to the various caucuses.  Senator Daschle invited me over this morning to the Library of Congress, and I was so honored he would, and it gave me a chance to come.  Many members of the Senate there had never seen me in person and had never had a chance to visit.  And we had a very good discussion, and I was grateful for his introduction. I'm going on to Pennsylvania Sunday afternoon, as well, thanks to the kind invitation of Congressman Gephardt.

And I want to go around and say a couple of things as clearly as I can.  First, here, I want to thank all the members who are here who I got to campaign with.  We had a lot of fun.  It was tiring at times, but I really, really appreciated the senators and House members for joining me and Laura on the campaign trail.  It really made it a lot easier to understand your districts, as well as to put up with all the long hours on the campaign trail.  So thanks from the bottom of my heart for your sacrifices.

It also gives me a chance to say how deadly earnest I am about using my position as your President to change the tone in the nation's capital. (Applause.)  To say to America that we'll have our disagreements, we'll fight over principle and we'll argue over detail -- but we'll do so in a way that respects one another.  I think it's so important for us as leaders, as people who have been given positions of responsibility, to understand that the way the process is conducted can set a good or bad tone for America.  I'm committed to setting a positive tone for the country, and I know you'll join me.

You're not going to agree with everything I say.  I probably won't agree with everything you say.  But I'll listen.  And I'll respect your opinion.  I'll try to understand why the position you've taken, I'll try and understand why you don't do everything I tell you to do.  (Laughter.)

But I'll do so in a way that tries to figure out where the other person comes from.  I think that's an important part of the Washington experience.  I'm absolutely convinced that we can change Washington for the better.  I believe we can have the dialogue so necessary that will inspire some youngster who's looking at Washington to say, I think I want to serve my country; I think I want to maybe go to the United States Senate or the United States House.

We have that responsibility to our citizens.  And I pledge to you that these first 14 days in office, or near 14 days in office -- the tone set in the first 14 days will be a consistent tone for however long I happen to be fortunate enough to be your President.  This is a message I want to say to all elected officials.  I love meeting with the members.  For those of you who have been to our office, thanks for coming.  For those of you that have not been to our office yet, you're coming.  Just don't take any silverware. (Laughter and applause.)

When you come, I look forward to hearing from you.  I look forward to having a frank discussion.  I look forward to hearing what's on your mind. I don't want you to -- I'm sure you won't be, but don't be looking around at the furnishings and say, gosh, oh, the meeting ended and I didn't say anything.  We expect to hear from you, and that's the best way to get things done, is to have a good, honest discussion.

I also want to remind members of both parties that I am able to stand before you as the President because of an agenda that I ran on.  I believe the fact that I took specific stands on important issues is the reason I was able to win.  The fact that I took on the Social Security issue in as clear language as I could be, with innovative thinking, I believe -- was part of the reasons why people came our way.

I'm going to take that same positions I took on Social Security and other issues, and try to get them on the floor of the House and the Senate and get something done.  (Applause.)  It's a positive agenda.  It's one that I believe, when we apply our principles to it, will make a huge difference for America.  The agenda is going to require a lot of patience and a lot of time and a lot of work.  But I want you to know, this is not a lot of items.  I believe I've got a limited amount of capital, and I'm going to spend it wisely and spend it in a focused way.      One item is Social Security, another is Medicare reform.  We have a fantastic opportunity to seize the initiatives to make sure that working with people like Chairman Thomas, to make sure that the Medicare system works.  Prescription drugs need to be an integral part of Medicare delivery system.  It will be a proud moment for all of us, Republicans and Democrats, to say we came together to modernize Medicare so that the seniors can retire in dignity.  (Applause.)

I see the respective chairmen of the committees dealing with our military.  I commit to you that our mission is going to be to make sure our military is strong and capable.  But it first requires the administration to act.  One, is to clarify the mission, to make it clear to those who wear our uniform that the mission is to be prepared and ready to fight and win war, and therefore prevent war from happening in the first place. (Applause.)

But we have an obligation to the members of Congress to present a strategic vision about what the military ought to look like.  We've got an unbelievable opportunity as we go into the 21st century to refashion how war is fought and won and, therefore, how the peace is kept.  It's a remarkable moment.  But it's incumbent upon those of us in the executive branch -- Secretary Rumsfeld and our policy team -- to present to you a blueprint about what the military ought to look like and where the priorities ought to be.

You may like it, you may not like it.  But before we -- good appropriations will really only occur if there is a strategic vision.  And we're the appropriate people to present the strategic vision.  So Secretary Rumsfeld is working on that.

We've had a lot of talk -- early talk about education.  I want to thank you all for your respective chairmen coming over and talking about education.  This is not a Republican issue or a Democrat issue; this is of national concern, to make sure our public schools function.  And we can apply some principles that I think we all agree with, which is high standards, expecting the best for every child, local control of schools, trusting local people to run the schools, and strong accountability systems.  (Applause.)

But as well, insist that there be results.  Guess what happens in systems when you don't measure?  Inner-city schools just get shuffled through the school systems.  Or in my case, in my state, sometimes children whose parents didn't speak English as a first language just got moved through.  Because you know why?  We didn't know.  And they come out at the end, and somebody says, oh, you can't read like you're supposed to.  That's because we didn't have the courage to insist upon measurement.  We didn't have the courage to insist upon results.  In order to make sure every child is educated, I mean every child, and no child is left behind, we've got to adopt a system that has high standards, local control of schools and the willingness to hold people accountable for results.  And an accountability system for which there is a consequence if there is success, and there is a consequence if there is failure. (Applause.)

Many members, Republican and Democrat alike, have said, are you going to give us a budget?  I said, of course -- just hope you don't kill it the minute it arrives.  It is our responsibility to do so, and working with the Speaker and the Leader to make sure it's there on a timely basis.  But we'll have a budget.  It's a budget that will set aside Social Security for one thing -- payroll taxes for Social Security and only Social Security. It's a budget that pays down national debt.  It's a budget that sets spending priorities.

But it's also a budget that recognizes we must provide tax relief to the people who pay the bills.  (Applause.)  I feel strongly about this issue.  And of course I hope you join me.  It is so important for us to understand some facts.  One, the economy is slowing down.  And it's important for us to combine good monetary policy with good fiscal policy. And good fiscal policy is a sound budget, coupled with giving people some of their own money back, to serve as a second wind to an economy.  I come from the school of thought that by cutting marginal rates for everybody who pays taxes is a good way to help ease the pain of what may be an economic slowdown.  I'm going to make that case over and over and over again until we get a bill through.  (Applause.)

It's important for us not to let the tax relief debate fall into a class warfare debate.  It seems like to me the fair way to do things is if people pay taxes, they ought to get tax relief.  (Applause.)

But I want to assure you that inherent in our plan is an understanding of how unfair the tax system is.  It's unfair to people at the bottom end of the economic ladder.  If you're a single -- one of these radio addresses for tomorrow -- and I talked about the single mom who is working hard to get ahead.  She's making $22,000 a year.  Many of you heard -- usually heard me use this example in the campaign.  I want to share it with you again, because it's an inherent part of our plan.

For every dollar she earns, because of the earned income tax phase-out and because she gets into the 15 percent bracket and because she pays payroll taxes, she pays a higher rate on the extra dollar earned than someone who is making $200,000 a year.  That's today's tax code.  And so part of our plan is not only to serve as an insurance policy against a severe economic downturn or a second wind for economic recovery, however you want to put it; but part of our vision addresses unfairness in the code by recognizing there are people struggling to get in the middle class.

This country must understand that by making the code more simple, by dropping the bottom rate from 15 to 10 percent, increasing the child credit we make that middle class, that dream of ownership so much more accessible, and that's what we ought to be representing in the great land called America.  (Applause.)

There is a lot of talk about debt, and we need to retire debt at the federal level.  Just remember -- lockboxing Social Security, a payroll tax is a pretty darn good step to relieving debt.  But there will be a glide path for debt repayment in our budget.  But during this debate, I want you all to remember that there is a huge consumer debt burdening many people working for a living in America, that there are 61 million Americans, I've been told, that have $10,000 or more of consumer debt.

Now think about that.  These are people working hard to get ahead. They've got a pretty high debt load.  And all of a sudden, energy prices start moving up on them.  And the combination of the two worries me, and I hope it worries members of Congress, regardless of their party.

So tax relief is important to help working people manage their own accounts, manage their own personal business.  And they say, well, that's not much money.  Well, if you're a family of four making $50,000 a year, under my plan, your taxes go from $4,000 to $2,000.  That's $2,000 extra dollars.  That's a lot for somebody struggling.  That's a lot for somebody who is on the margin.  And we must hear those voices on the margin.  So tax relief is not only good economic policy, it's good people policy. (Applause.)

We can talk about marginal rates.  We also need to talk about the death tax and the marriage penalty -- two important ingredients about making sure the code is more fair and more responsive to the needs of working Americans.  And that's my agenda.

I'm going to be asked to comment on a lot of issues; I'm confident about that.  And I'm sure I'll have an opinion.  (Laughter.)  But when it comes to spending capital, and staying focused, that's where this administration is going to be.  And I look forward to working with you.  I look forward to working with you to get things done for the people.  I can't think of a better cause then the people of America.  J.C. hit it right, this is a fabulous land, because the people are so great.

I think one of the most important initiatives that thus far we've discussed in the short time I've been here is the faith-based initiative. I want to make it clear to you, we understand the Constitution.  But I also want to make it clear that faith-based programs in many neighborhoods are really the solution to making sure we have a welcoming society. (Applause.)

My hope of hopes is that when it's all done, somebody will say, well, you know, President George W. Bush came -- number 43, by the way, as opposed to number 41 -- (laughter) -- but he came, along with his dad, and understood the office, helped change the tone, helped affect a cultural change that was a welcoming change and welcomed people into America; that didn't pit one group of people against another, but that helped people understand the greatness of America should apply to everybody; that the public policies that we passed together enforced that dream and vision; that this is the greatest country on the face of the Earth because of its people, because of our great people.

We have an obligation to the people of America to set a good tone, a good example, an example of the spirit of what's possible.  I'm confident it can happen.  And it's such a huge honor, huge honor, to play an important part.

God bless.  (Applause.)

END                 1:15 P.M. EST

RADIO ADDRESS BY THE PRESIDENT TO THE NATION -- February 3, 2001
Oval Office

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THE PRESIDENT: Good morning. This coming week I will send to Congress my tax relief plan. It is broad and responsible. It will help our economy, and it is the right thing to do.

Today many Americans are feeling squeezed. They work 40, 50, 60 hours a week, and still have trouble paying the electric bill and the grocery bill at the same time. At the end of a long week, they collect their paycheck, and what the federal government takes is often unfair.

Picture a diner in one of our cities. At the table is a lawyer with two children. She earns $250,000 a year. Carrying her coffee and toast is a waitress who has two children of her own. She earns $25,000 a year. If both the lawyer and the waitress get a raise, it is the waitress who winds up paying a higher marginal tax rate. She will give back almost half of every extra dollar she earns to the government.

Both of these women, the lawyer and the waitress, deserve a tax cut. Under my plan, both of these women, and all Americans who pay taxes will get one. For the waitress, our plan will wipe out her income tax bill entirely.

My plan does some important things for America. It reduces taxes for everyone who pays taxes. It lowers the lowest income tax rate from 15 percent to 10 percent. It cuts the highest rate to 33 percent, because I believe no one should pay more than a third of their income to the federal government. The average family of four will get about $1,600 of their own money returned back to them.

There's a lot of talk in Washington about paying down the national debt, and that's good, and that's important. And my budget will do that. But American families have debts to pay, as well. A tax cut now will stimulate our economy and create jobs.

The economic news these days is troubling -- rising energy prices, layoffs, falling consumer confidence. This is not a time for government to be taking more money than it needs away from the people who buy goods and create jobs.

My plan will keep all Social Security money in the Social Security system, where it belongs. We will eliminate the death tax, saving family farms and family-owned businesses. We'll reduce the maximum rate on small business income to 33 percent, so they can help create the jobs we need. Above all, my plan unlocks the door to the middle class for millions of hardworking Americans.

The country has prospered mightily over the past 20 years. But a lot of people feel as if they have been looking through the window at somebody else's party. It is time to fling those doors and windows open and invite everybody in. It is time to reward the work of people trying to enter the middle class and put some more money in their pockets at a time when they need it.

My tax reduction plan does all these things, and I hope you'll support it. Thank you for listening.

Remarks by the President at Meeting with Republican Members of the House and Senate Budget Committees -- February 15, 2001
The Cabinet Room

4:50 P.M. EST

THE PRESIDENT: It's my honor to welcome members of the United States Senate and members of the United States House up here in the Cabinet Room to discuss the budget.

I'll be submitting a budget to the Congress in short order, and I wanted to brief the members of the budget writing committees about our priorities, our intentions and, of course, get the feedback. I get to propose a budget and these folks get to write the budget. And we look forward to having a good discussion on it.

Inherent in the budget, of course, is our desire to make sure we protect Social Security, I think there is unanimity around the table for that; that we set clear priorities; that we fund the priorities. In our budget, we're going to prove to the American people that we can pay down debt, fund priorities, protect Social Security and there will be money left over -- which we strongly believe ought to be passed back to the taxpayers.

I look forward to the discussion with the Chairman, near-Chairman, and thank you all for coming.

I'll be glad to answer a few questions. Yes, Jim.

Q Mr. President, will you be telling the members of Congress that you hope to hold spending to below 4 percent, the increase in spending?

THE PRESIDENT: We're not going to give a specific number today, but we are going to argue, make the case that we can slow the rate of spending down; that our spending will be based upon priorities, the priorities I campaigned on; that we will meet the objectives that I talked about in the campaign, which is protecting Social Security, funding public education, strengthening the military, paying down debt -- and we'll be paying down debt; but that we believe the right number for the tax relief package is $1.6 trillion.

Q Mr. President, if the Senate were to vote today on your tax package, the vote would probably be 51-49 against you, given that there are two Republicans who have said they're not in favor of it as is.

What can you say to Democrats to try to bring more of them on board in the Senate?

THE PRESIDENT: I can say, wait until you see our budget. You'll see that it's well thought out, that we meet important priorities and I -- we've got a lot of work to do, I understand that. But this is a democracy, people have different opinions about the subjects.

The people I want to talk to, though -- first, before there is any vote -- is the American people. And I will, I'll take my case to the American people about why I think tax relief makes sense. I'll remind members of both the Senate and the House that there is a lot of debt at the federal level; but there is a lot of debt at the private level. We've got a lot of people struggling to pay off credit card consumer debt.

I'll tell people that if you're a family of four making $50,000, you get an additional $2,000 so you can decide what to do with your money. So I've got a lot of work to do, but I'm convinced that when the American people hear our plan they will support it. I think we've got a very good chance of getting the tax package through.

Q Mr. President, Congresswoman Cynthia McKinney, who serves on the Armed Services Committee in the House, feels that she was snubbed because she didn't go with you during your defense tour this week. What do you say to her, and some of the other members of the Congressional Black Caucus, especially after you met with them saying that you're into an inclusive era?

THE PRESIDENT: We had a very good meeting here, and discussed a wide range of issues. I'm glad their members came up, sat right here at this table and expressed their opinion. My administration certainly never attempts to leave anybody out. And to the extent that members -- any member -- feels left out, I'm sorry that that's the case. But we took the members on that trip and there will be other trips.

Q Mr. President, were you surprised to learn that there were civilians at the helm of the submarine that sank the Japanese fishing boat?

THE PRESIDENT: Well, I think what is going to be necessary is for Secretary Rumsfeld and the Defense Department to review all policy regarding civilian activity during military exercises. I look forward to the Defense Department review of the policies, their current policies, particularly in light of the recent tragedy that took place in Hawaii.

I want to reiterate what I said to the Prime Minister of Japan: I'm deeply sorry about the accident that took place; our nation is sorry that the accident happened and we will do everything we can to help recover the bodies.

END 4:55 P.M. EST

Remarks by the President at Tax Family Event -- February 20, 2001
Kirkwood Community Center
St. Louis, Missouri

Listen to the President's Remarks

5:50 P.M. CST

THE PRESIDENT: Thank you very much. Before I have a chance to say hello to you all and watch the Mighty Mights skate, I want to talk a little bit -- some public policy. Today I was in St. Louis talking about education. There is no more important subject as far as I'm concerned, to make sure every child is educated. I know the Yahngs feel the same way.

But I also want to talk about the budget, the budget of the United States government, and the budget of the people of the United States.

I'm going to submit a budget next week to the United States Congress. It is a budget that will set priorities, just like each family does in America -- set priorities. My priorities will make sure that we preserve and protect and strengthen Social Security, so that there's a Social Security system available for the Yahngs and their children, and for you, as well.

A priority in my budget will be to make sure that health care system in America is strong, for the elderly, for the uninsured, and for all of us concerned about health. A priority will be public education. Today I talked about a reading initiative which goal is to make sure the children can read by the 3rd grade. I can't think of a better priority. By the way, I also understand that local control of schools is the best way to achieve that priority.

Last week I spent time touring military bases. The defense of our nation is a priority, and in my budget I will submit, amongst other things, a pay raise for the men and women who wear the uniform. Restoring morale in the military not only means better pay, better housing, better health care, it also means having a commander in chief who will clarify the mission. The mission of the United States military to have a fighting forces trained and prepared to fight war, and therefore, prevent war from happening in the first place.

A priority of mine in my budget will be paying down national debt. And yet, after setting priorities, there's still money left over. And so while we're concerned about the federal budget, I'm also concerned about the budget of people such as the Yahngs, who are here standing next to me.

I think it makes sense to understand who pays the bills. I think it makes sense to understand who fills the coffers of the United States, and it's the working people. (Applause.) And so I'm going to ask Congress to pass a tax relief package, recognizing that we can meet priorities, but also help families meet their own priorities.

I'm deeply concerned about the high cost of energy. American families are paying more and more for energy these days. I'm concerned about consumer debt. There's a lot of discussion about national debt, and that's a concern. But I'm also concerned that a lot of working folks have got their own debt, and it seems wise to set priorities at the national level, and get people their own money so they can meet their own obligations, to meet their own debts.

I'm asking Congress to pass $1.6 trillion in tax relief, after we've met priorities. That's over a 10-year period of time. It's a fair plan. It's a plan that says, as opposed to pick and choose who the winners are, that everybody who pays taxes ought to get tax relief. It is a plan that significantly reduces taxes for people at the bottom end of the economic ladder. If you're a family of four making $35,000, you'll receive 100 percent tax cut. It's an average tax relief for families of $1,600. The Yahng family under the plan I submit will receive actually more than that. They now pay $2,000 in taxes to the federal government. If this plan is enacted by the United States Congress, they'll end up paying $150 of taxes. (Applause.) That's $1,850 more that they can decide what to do with.

It's your money. It will give you a chance to set your priorities for your family. It says that we in the federal government have a fundamental trust in the people of America, and that's where our faith should be -- in the people. The best government is that which trusts America, and there's no better way to make that trust explicit than to share your money with you.

I want to drop all rates and simplify the code. The reason this family will receive the tax relief they're going to get is because we've dropped the bottom rate from 15 percent to 10 percent, and doubled the child credit from $500 to $1,000 per child. (Applause.)

As well, I'm going to ask Congress to provide relief from the marriage tax. Our tax code ought to encourage family, ought to recognize marriage as a sacred institution. (Applause.) And I think we ought to listen to the voices of the farmers and small business people and eliminate the death tax, so that those who struggle -- (applause.)

This is a plan that's going to require the people to speak up. It's the beginning of trips around our great nation where I'm going to make my case, not to the folks in Congress or in Washington, D.C., but to the American people. I have an awesome responsibility to be the President of everyone. I assume that responsibility, and I'm going to be the President of everyone. And I believe this tax relief plan is fair for everyone who pays taxes in America. It is the right thing to do at this point in our history.

It also makes economic sense. I am concerned about our economy. I'm concerned about its -- that we've lost some wind in our sails. I believe good monetary policy, combined with good fiscal policy, will provide a needed second wind to economic growth. We must keep the pie growing, so that people who want to work can find a job, people who want to dream are able to realize their dreams in the entrepreneurial -- as a small business person or as an entrepreneur.

One of the great strengths of America is the entrepreneurial spirit of our country. Any President and the Congress must do everything in our power to create an environment where the entrepreneur can flourish, where people can realize their dreams. America is a land based upon dreams. It's a land where people should aim high, and the tax code ought to encourage capital formation and economic growth.

But most of all, America is made up of fine, decent, honorable citizens, citizens who work hard every day to provide for their families -- just like my friends here -- citizens who, once the nation meets our priorities, ought to keep their own money, so you can spend, and you can save, and you can dream. (Applause.)

I'm so thankful that you all came. I really appreciate you all standing up here today with me. I'm pinching myself every day. (Laughter.) It is an unimaginable honor to represent the great people of this country. It's the greatest country on the face of the Earth, and all my public policy will be designed to keep it great and to invigorate our people.

Thank you for coming and God bless.

END 6:00 P.M. CST

Remarks by the President to Teachers and Students -- February 21, 2001
Townsend Elementary School
Townsend, Tennessee

12:03 P.M. EST

THE PRESIDENT: Thank you all very much. Fred, thank you very much. I appreciate your invitation.

MR. GOINS: We appreciate your coming.

THE PRESIDENT: And I'm glad I accepted. It's a beautiful part of the world. I was touched by the number of your citizenry who came and lined the roads as we came in, to wave and say hello. And I thank them for that, as well. I wish I could thank them in person. I hope they realize my wave was a sincere wave of gratitude.

I want to thank Gary Pack, the Superintendent of Schools. Let me say a couple things about what I've learned -- I've learned this as a parent, I've learned it as a governor, I know it as the President, that a school is really only as good as its principal, and when you have a fine principal, you've got a fine school. And I appreciate your service. And the same with the superintendents.

But with -- the heart and soul of any education system, of course, are the teachers. And I want to thank those who are teaching. I'm sorry that my wife is not here with us today. If she were giving the speech -- and most of you, if you had heard both of us, would rather hear her -- (laughter) -- she would say that one of her missions will be to convince Americans who are coming up to be a teacher. There's nothing more noble than to teach. And so the teachers of this school and the teachers throughout all of Tennessee, we thank you from the bottom of our hearts.

I also want to thank my friend, the Governor of your state, Don Sundquist. He is a good man, and he married -- like me -- he married above himself. (Laughter.) But Laura and I love Don and Martha. They have been our friends for a long time, and I appreciate your hospitality.

I want to thank your Senator, Bill Frist. I'm particularly nice to Senator Frist these days, since much of what I'm proposing is going to need to be passed out of the United States Senate. But I've got a strong ally in Senator Frist, and a good friend.

I want to thank members of the Tennessee congressional delegation, Congressmen Duncan and Jenkins and Van Hilleary for being here, as well. I got to know these folks during the course of the campaign, and they were stalwarts.

I also want to thank my friend, the chairman of the Education Committee, from the state of Ohio, Congressman John Boehner. I am so thankful the chairman is here. I'm going to be discussing education policy today, the framework for good policy, and it's going to require the leadership of John and -- on the House side, and Frist and others on the Senate side to get this bill through.

So, Mr. Chairman, thank you very much for not only being here -- I'm surprised they didn't check you at the border coming in. (Laughter.) But I'll let you on the plane so we can fly back together and talk policy.

I'm also most appreciative of the Mayor of Knoxville, Tennessee for being here. I've know Mayor Ashe for years and years and years. And he has done a fabulous job of being a fine public servant in Knoxville. So, Victor, thank you for coming.

And finally, a former public servant, a distinguished Tennessee citizen, a man whose son is -- sees my daughter at the University of Texas, hopefully in the library -- (laughter) -- and that's Lamar Alexander.

I want to thank these distinguished officials. I want to thank the local officials. Senator, thank you, as well. Thank you for coming.

There's no more important subject than public education. We must get it right to make sure no child is left behind. My philosophy is this. First, all of us in positions of responsibility must set the highest of high standards for every child. I believe every child can learn. And that ought to be indelibly etched into our national conscience, that every single child in America has got the capacity to learn and we should accept nothing less. And we must set high expectations for every child. We must raise the bar.

I also strongly believe in local control of schools. I believe the best way to chart the path to excellence for every child in America is to insist that authority and responsibility be aligned at the local level. (Applause.)

So I look forward to working with the members of the House and the Senate to pass power out of Washington, to provide flexibility for the federal funds so that the governors, superintendents, principals can design programs that meet your specific needs. As the old adage, one size does not fit all in public education -- it is very true. It is very true. We had the same goal in Tennessee and Texas, and that is every child learn. But we've got different issues in Texas than you have in Tennessee, and that's why we need to have flexibility.

The cornerstone of reform, as far as I'm concerned, is not only high standards and maximum flexibility, but strong accountability systems. I think it's so important to measure. I think it's a legitimate thing -- I know it's a legitimate request from those of us in public life to say if you receive taxpayers' money, you measure, and you show us whether or not the children are learning.

And when I ask Congress to pass legislation that says, in return for federal help the state of Tennessee, local jurisdictions must develop accountability measures on an annual basis, 3 through 8, to determine whether or not our children are learning. It is essential we do so.

Now, I know there's some around who will say we can't measure, it's not the proper role of the government. Well, I believe the proper role of any government at any level is to insist upon results. There are some who will say, well, we can't have the test because all they'll do is teach the test. Well, I went to a writing class here in this school, and they were teaching the children to write, and therefore, they were able to pass the test.

You don't teach the test when it comes to literacy. We went to a Title 1 classroom -- or a classroom with Title 1 students in it, where the teacher was using some of the most advanced thought about teaching reading, a balanced approach including phonics. You teach a child to read and he or her will be able to pass a literacy test. I don't buy teaching the test as an excuse to have a system that doesn't hold people accountable for results.

Finally, there are some who will say you can't test because it is a matter of race to test. I think it is a matter of race not to test. I think it's racist not to test, because oftentimes in our school districts, those who are most easy to shuffle through are those who live in the inner cities or whose parents may not speak English as a first language. No, we must measure because we want to know. We want to know when there's success.

When a teacher told me in that classroom, she said, we're making great progress in our new reading program here; it's been in place for three years, we're making fine progress, we know because there's accountability. People should welcome accountability. It's a way to diagnose and to solve problems. It's a way to say that every single child matters in America, and not one child ought to be left behind. (Applause.)

I don't support, my friends in Congress don't support the design of a national test. All a national test will do is undermine local control of schools. But we look forward to working with states and local jurisdictions to develop accountability systems that meet your needs, so we achieve what we want. And that is an education system focused on each individual; an education system that diagnoses early and solves problems early.

Yesterday I also outlined some funding priorities of mine. I'm going to submit a budget next week to the United States Congress -- it's a budget that sets clear priorities. A priority is going to be to make sure that our Social Security system and the payroll taxes are saved for Social Security and the Social Security system is strong. A priority would be Medicare. A priority is going to be to make sure our troops are well-paid and well-housed and well-trained, so that we can keep the peace. A priority is going to be pay down debt. A priority is going to be tax relief, so hardworking Americans have got more money in their pocket to pay down their own debt and to cover the cost of high energy costs.

A priority is going to be public education, as well. As a matter of fact, in the budget I submit, the largest increase of any department will be for the Department of Education. (Applause.) Federal funding for the Elementary and Secondary School Act will go up by $1.6 billion, an 8 percent increase in funding.

I think it's so important for us to prioritize public education, at the same time, we prioritize -- make it a priority of making sure our money is spent well. A priority has got to be diligence when it comes to taxpayers' money. And that's why I'm confident the combination of an increase in spending coupled with education reform that holds people accountable is the right path for America to take.

And finally, yesterday I proposed additional spending for a national reading initiative that will set this goal: every child will be reading at the appropriate level by the 3rd grade. It's going to require schools, districts willing to challenge the status quo, if children are failing. It's going to mean we're going to have to think differently about Head Start. Head Start should remain, and will remain, a place where children are treated for disease and the Health and Human Service component to it. But I think Head Start ought to be moved to the Department of Education, to highlight the need to make sure that our youngsters get a head start on reading and math. (Applause.)

The billion-dollar a year additional money for the reading initiative will allow districts to access money for K through 2 diagnostic testing; for curriculum development; for teacher training, to make sure that the teacher I saw today, the skills that she has are given to all the teachers who are charged with teaching reading.

We've got an aggressive program for public ed. It's a program, though, that has deep faith in the ability of local folks to make sure the children are educated. It's a program, the philosophy of which says that the people that care most about the children in towns in Tennessee are the citizens of towns in Tennessee, are the parents in towns in Tennessee, are those concerned folks who every day try to figure out how to make your community a better place to live.

The great strength of America lies in the hearts and souls of our citizens. It lies in the classrooms. It lies in the after-school activities of Scout troops, run by local citizens. And our philosophy, the philosophy of the bill that I'm going to submit to the Congress incorporates that greatness of America in its core.

It's a thrill to be here in Townsend. It is a -- you're the heartbeat of America. And you're the future of America, by making sure every single child gets educated. God bless. (Applause.)

END 12:15 P.M. EST

Remarks by the President in Photo Opportunity at Cabinet Meeting -- February 26, 2001
The Cabinet Room

1:07 P.M. EST

THE PRESIDENT: I want to thank our Cabinet for coming in today. Amongst a variety of topics, one of which is going to be, we're going to talk about the budget and my speech tomorrow night to the Congress. And I want to thank all of the Cabinet officers for their hard work in helping us prepare a realistic budget that is going to enable our nation to meet its priorities, and at the same time not only set aside money for contingencies and pay down debt, but to leave enough money left over so that people can get a real, substantial tax relief package that they will feel.

I would be glad to answer some questions.

Q Mr. President, in your speech tomorrow night, what will be your message to the American people, and will you begin addressing reforms in the Social Security system?

THE PRESIDENT: Of course we'll be talking about Social Security. Secondly, I will be making the case as to why our budget makes sense for the country and for the people who pay the bills of our country. It is a common-sense approach to what our nation ought to do with the tax revenues that are coming into the Treasury.

Q Do you expect to propose Social Security reforms this year?

THE PRESIDENT: I will see.

Q Mr. President, what are your thoughts about the final Florida recount that put you over from the Vice President, and what do you say to those who now have to call you the legitimate president that didn't call you that? (Laughter.)

THE PRESIDENT: Good. (Laughter.) Hopefully, all the focus on the past is over with. It's time to move forward. And tomorrow night's speech is a part of moving forward. We've worked hard here in this administration to reach out to people that may not have supported me. I think we're making pretty good progress to say that the discussions that take place around this table, for example, are what's best for America; not what's best for a political party, but what's best for the country.

Q Sir, in your speech, will you have specific areas in the budget where spending will slow down, and will you specify those areas in your speech?

THE PRESIDENT: No. In my speech I will talk about the budget. And in the budget is where people will see all the particulars. If I tried to review every particular in the budget, I would set the all-time record for the amount of time in front of the Congress. And as you know, I'm the kind of person who likes to try to get to the point. I will spend enough time speaking so that people will understand where I'm coming from, but not too long so they go to sleep.

Q Mr. President, you've acknowledged that you're going to have to make cuts to the budget to some extent. What do you say to those who are saying that you're telling the American people essentially they can have their cake and eat it too?

THE PRESIDENT: What I'm going to say to the American people is that, had we kept spending at the rate we were spending last year, there would be no surplus, that the size of growth in the federal budget that -- and the budget we inherited was way too high, that we can meet our needs by slowing down the rate of growth in our budget. But it requires a president to set priorities. And I'm going to set clear priorities in the budget.

I readily concede some appropriators may not like the fact that we're asking for there to be fiscal sanity in the federal budget, but that's one of the reasons I became the President; because I said, give us a chance and we will have fiscal sanity in our budget. And I'll look forward to making the case.

The people are going to hear in plain spoken words why I believe, strongly believe, when we meet priorities, pay down debt, protect Social Security, and as importantly, make sure that people get some of their own money back, so to make sure that the economy is strong, help people pay for high energy bills, to help people manage their own personal debt, we need to have tax relief -- tax relief that the people can feel. And I will make the case tomorrow night that it's within our grasp to do so. And people will hear as plainly as I can say it what the facts are.

Q It sounds like your speech will be shorter than ones we're used to in the last eight years. (Laughter.)

THE PRESIDENT: I don't know. (Laughter.) It depends on how loud you clap.

END 1:12 P.M. EST

ADDRESS BEFORE A JOINT SESSION OF THE CONGRESS--February 27, 2001

	Audio Clip From Speech: Remarks in Windows Media Player format Remarks in RealAudio format
President Bush addressing Congress.

Mr. Speaker, Mr. Vice President, Members of Congress:

It is 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 want to thank so many of you who have accepted my invitation to come to the White House to discuss important issues. We are 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 feel welcome.

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 Washington. I hope America is noticing the difference. We are making progress. Together, we are changing the tone of our 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, but by what we are 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 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 one. 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.

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 have 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 my top priority and by supporting this budget, you will make it yours as well. Reading is the foundation of all learning, so during the next 5 years, we triple spending, adding another $5 billion to help every child in America learn to read. Values are important, so we have tripled funding for character education to teach our children not only reading and writing, but right from wrong.

We have 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. Please help me salute our gracious First Lady, Laura Bush.

Laura has begun a new effort to recruit Americans to the profession that will shape our future: teaching. Laura 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 our public schools from Washington. 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.

Critics of testing contend it distracts from learning. They talk about "teaching to the test." But let us put that logic to the test. If you test children on basic math and reading skills, and you are "teaching to the test," you are teaching ... math and reading. And that is 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 see fit.

Schools will be given a reasonable chance to improve, and the support to do so. Yet if they do not, 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 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 to 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. We will help them buy their own insurance with refundable tax credits. And to provide quality care in low-income neighborhoods, over the next 5 years we will double the number of people served at community health care centers.

And we will address the concerns of those who have health coverage yet worry their insurance company does not care and will not 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 did not get it. We will ensure access to the courts for those with legitimate claims, but first, let us 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. God bless you, Joe. And 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 must continue 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 am 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 billion dollar increase to ensure better access to quality care and faster decisions on benefit claims.

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 have found them, so I propose providing $4.9 billion in resources over 5 years for the upkeep of these national treasures.

And my budget adopts a hopeful new approach to help the poor and 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. And government should not fund religious activities. But our Nation should support the good works of these good people who are helping neighbors in need.

So I am proposing 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 1 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 difference in Philadelphia and he has invited me to his city this summer, to see compassion in action.

I am personally aware of just how effective the Mayor is. Mayor Street is a Democrat. Let the record show that I lost his city. 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 Attorney General Ashcroft to develop specific recommendations to end racial profiling. It is wrong and we must end it.

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 have listened, and I agree.

My budget proposal pays down an unprecedented amount of public debt. 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 additional money 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 this budget.

We have increased our budget at a responsible 4 percent, we have funded our priorities, we have paid down all the available debt, we have prepared for contingencies -- and we still have money left over.

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 is the road our Nation has traveled in recent years. Last year, government spending shot up 8 percent. That is 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, to fund their own priorities and pay down their own debts. I hope you will join me and stand firmly on the side of the people.

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 to ask for a refund.

Some say my tax plan is too big, others say it is too small. I respectfully disagree. This tax relief is just right.

I did not throw darts at a board to come up with a number for tax relief. I did not 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 lowered 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, 15, 25, and 33 percent. In my plan, no one is targeted in or targeted out ... everyone who pays income taxes will get tax 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 is 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. Sixteen hundred dollars may not sound like a lot to some, but it means a lot to many families. Sixteen hundred dollars 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 3 months. That is real money.

With us tonight, representing many American families, are Steven and Josefina Ramos. Please help me welcome them. The Ramoses are from Pennsylvania, but they could be from any one of your districts. Steven is a network administrator for a school district, Josefina is a Spanish teacher at a charter school, and they have a 2-year-old daughter, Lianna. 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." After that, Steven and Josefina want to start saving for Lianna's college education. Government should never stand in the way of families achieving their dreams. The surplus is not the government's money, the surplus is the people's money.

For lower-income families, my tax relief 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. Her overtime, her hardest hours, are taxed at nearly 50 percent. This sends a terrible message: You will 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 overtax time for the waitress. People with the smallest incomes will get the highest percentage reductions. And millions of additional American families will be removed from the income tax rolls entirely.

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 by themselves.

Forty years ago and then twenty years ago, two Presidents, one Democrat and 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 jobs.

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 Security.

America has a window of opportunity to extend and secure our present peace by promoting a distinctly American inter-nationalism. 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 and free trade and freedom from oppression. Nations making progress toward freedom will find America is their friend.

We will promote our values, and we will promote 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 have asked the Secretary of Defense to review America's armed forces and prepare to transform them to meet emerging threats. My budget makes a downpayment 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 and rogue nations intent on 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 costs 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 have asked Federal agencies to work with California officials to help speed construction of new energy sources. And I have directed Vice President Cheney, Commerce Secretary Evans, Energy Secretary Abraham, and other senior members of my Administration to recommend 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.

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, it is time to act. Medicare must be modernized. And we must make sure that every senior on Medicare can choose a health plan that offers prescription drugs.

Seven years from now, the baby boom generation will begin to claim Social Security benefits. Everyone 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 them.

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 at a higher rate of return.

Ownership, access to wealth, and independence should not be the privilege of a 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 finance reforms.

The agenda I have set before you tonight is worthy of a great country. 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 good will must be dedicated to great goals. Bipartisanship is more than minding our manners, it is doing our duty.

No one can speak in this Capitol and not be awed by its history. At 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 are reminded of their courage and achievement.

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. Good night. And God Bless America.

PRESIDENT'S BUDGET PLAN: "A BLUEPRINT FOR NEW BEGINNINGS"--February 28, 2001

I. PRESIDENT'S MESSAGE

To the Congress of the United States:

With a great sense of purpose, I present to the Congress my budget. It offers more than a plan for funding the Government for the next year; it offers a new vision for governing the Nation for a new generation.

For too long, politics in Washington has been divided between those who wanted big Government without regard to cost and those who wanted small Government without regard to need. Too often the result has been too few needs met at too high a cost. This budget offers a new approach�a different approach for an era that expects a Federal Government that is both active to promote opportunity and limited to preserve freedom.

Our new approach is compassionate:

It will revitalize our public schools by testing for achievement, rewarding schools that succeed, and giving more flexibility to parents of children in schools that persistently fail.

It will reinvigorate our civil society by putting Government on the side of faith-based and other local initiatives that work�that actually help Americans escape drugs, lives of crime, poverty, and despair.

It will meet our Nation's commitments to seniors. We will strengthen Social Security, modernize Medicare, and provide prescription drugs to low-income seniors.

This new approach is also responsible:

It will retire nearly $1 trillion in debt over the next four years. This will be the largest debt reduction ever achieved by any nation at any time. It achieves the maximum amount of debt reduction possible without payment of wasteful premiums. It will reduce the indebtedness of the United States, relative to our national income, to the lowest level since early in the 20th Century and to the lowest level of any of the largest industrial economies.

It will provide reasonable spending increases to meet needs while slowing the recent explosive growth that could threaten future prosperity. It moderates the growth of discretionary spending from the recent trend of more than six percent to four percent, while allowing Medicare and Social Security to grow to meet the Nation's commitments to its retirees.

It will deliver tax relief to everyone who pays income taxes, giving the most dramatic reductions to the least affluent taxpayers. It will also give our economy a timely second wind and reduce the tax burden�now at the highest level as a percentage of Gross Domestic Product since World War II.

Finally, this new approach begins to confront great challenges from which Government has too long flinched. Social Security as it now exists will provide future beneficiaries with the equivalent of a dismal two percent real rate of return on their investment, yet the system is headed for insolvency. Our new approach honors our commitment to Social Security by reserving every dollar of the Social Security payroll tax for Social Security, strengthening the system by making further necessary reform feasible.

Medicare as it exists does not adequately care for our seniors in many ways, including the lack of prescription drug coverage. Yet Medicare spending already exceeds Medicare taxes and premiums by $66 billion this year, and Medicare will spend $900 billion more than it takes in over the next 10 years. Reform is urgently needed. Our new approach will safeguard Medicare by ensuring that the resources for reform will be available.

New threats to our national security are proliferating. They demand a rethinking of our defense priorities, our force structure, and our military technology. This new approach begins the work of restoring our military, putting investments in our people first to recognize their importance to the military of the future.

It is not hard to see the difficulties that may lie ahead if we fail to act promptly. The economic outlook is uncertain. Unemployment is rising, and consumer confidence is falling. Excessive taxation is corroding our prosperity. Government spending has risen too quickly, while essential reforms, especially for our schools, have been neglected. And we have little time before the demographic challenge of Social Security and Medicare becomes a crisis.

We cannot afford to delay action to meet these challenges. And we will not. It will demand political courage to face these problems now, but I am convinced that we are prepared to work together to begin a new era of shared purposes and common principles. This budget begins the work of refining those purposes and those principles into policy�a compassionate, responsible, and courageous policy worthy of a compassionate, responsible, and courageous Nation.

George W. Bush
February 28, 2001

(EXCERPTS FROM BUDGET)

4. MODERNIZE AND REFORM SOCIAL SECURITY

For 65 years, Social Security has provided retirement security for tens of millions of Americans. Four generations of Americans have relied on the Government to keep the promises it made to them during their working years. As demographics change and costs increase, the challenge we face is ensuring that the Social Security system is strengthened for tomorrow's retirees.

The Need for Reform

Social Security's spending path is unsustainable in the long run, driven largely by demographic trends.

First, longer life spans mean more benefit payments. In 1940, during the early years of the program, life expectancy at age 65 was an additional 12 years for men and 13 years for women. By 2075, the remaining life expectancy at age 65 is projected to be 20 years for men and 23 years for women. As a result, people are spending a growing proportion of their lives in retirement. While longer life spans are clearly desirable, they also mean additional years of benefit payments, and a dramatic long-term increase in Government obligations.

In addition, a long-term decline in fertility rates means there will be fewer workers available to support each retiree once the baby boom generation starts to retire. As a result of declining birth rates and increasing life expectancy, the ratio of workers to Social Security beneficiaries is expected to shrink from 5.1 in 1960 to 3.4 today to 2.1 in 2030. These demographic trends will strain our ability to make benefit payments at current payroll tax rates.

The Social Security system faces a long-term unfunded liability of $8.7 trillion. In addition, the structure of Social Security leads to substantial generational inequities in average rate of return. (See Chart 4�1.)

graph of Social Security rates of return

Old Solutions and a New Approach

Without new thinking on Social Security reform, two old choices will soon present themselves. We can further reduce future retirees' returns from Social Security through benefit cuts or through tax increases. Or we can do nothing�inaction would simply mean leaving this problem for our children and grandchildren instead of addressing it for them now.

There is a better way to address both the long-term