We're using information technology. Listen, we're a giant consumer of health care at the federal level. And we're insisting upon new technologies to make health care more efficient, and thereby reducing costs inherent in an inefficient system, and reducing medical errors. We believe that the health care industry needs to post price and quality, so as consumers have more choice, they're able to make better decisions about the health care they get. We understand that a non-transparent system where somebody else pays the bills is likely to cause costs to continue to rise. Congress needs to pass medical liability reform. If you're interested in available and affordable health care, we should not have a legal system that's running good doctors out of practice and running up the cost of your medicine. (Applause.)







And one of the most promising ways to make private health insurance more affordable is to reform the tax code. Under current law, workers who get health insurance from their companies get a tax benefit. If you buy insurance on your own, you do not get the tax benefit. The tax code is not fair. So in my State of the Union address I proposed to end this unfair bias in the tax code by creating a standard deduction for every American who has health insurance, no matter where you get it from.







This deduction would also apply to payroll taxes, so those who do not pay income taxes would still get a benefit. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills. Those who now purchase health insurance on their own would save money on their taxes. Millions of others who have now no health insurance at all would find basic private coverage within their reach.







As well, we need to do more to help the states and localities deal with the uninsured. I think the most innovative programs are developed at the state level. And I think it's in our interest to support states that make basic private health insurance available to all their citizens to have help from the federal government, to help them with the poor, to help them with the uninsured. So we're asking Congress to join us in setting up "affordable choices" grants to make sure that the poor and the sick have private health insurance available to them, as well.







All these steps will bring America closer to a health care system where patients are in charge of their medical decisions. In a reformed system, there will be a vibrant individual market, in which health insurance companies actually compete for your business. When you leave your job for a better opportunity elsewhere, you will be able to take your health care plan with you. If people change jobs 10 times before they're 40, we need a health care system that is flexible and consumer-oriented. Health care providers will have an incentive to improve their service. Your medical records would fit on a CD, so you would not have to fill out multiple forms every time you visit your doctor. In the end, you would have a more flexible health care system that responds to your needs, and at the same time helps us keep our economy flexible and dynamic.







Third, we can make our economy more flexible and dynamic by diversifying our energy supply. Energy is vital to businesses and farmers and families all across our nation. Yet, we have a fundamental problem: We're too dependent on oil. That creates vulnerabilities. When demand for oil goes up in China or India, it affects the price of gasoline here in America. If a terrorist were to attack oil infrastructure, it affects the supply of energy here in America.







Dependency on oil means we're not being as good a steward of the environment as we should be. The way to overcome these challenges is through innovation and technology. I believe it is a good use of your money to spend at the federal level on new technologies to make us less dependent on oil -- and that's exactly what we've done. We're spending money on cellulosic ethanol -- that's a fancy word for saying some day we're going to be able to convert switch grass into energy that powers your cars. We're spending money on biodiesel fuels. We're spending money on advanced batteries, so some day you'll be able to plug in your automobile and drive the first 40 miles on electricity, and your car is not going to look like a golfcart. We're spending money on solar and wind energy, and clean coal and nuclear power.







Since 2001, my administration, working with Congress, has invested up to more than $10 billion to develop cleaner energy alternatives. And this federal funding has helped America's scientists and engineers make tremendous progress toward a goal of becoming less dependent on oil. As well, the private sector is responding. You know it better than I do, but a lot of people are seeing interesting opportunities available in alternative energies. And private money is flowing into these new alternatives.







So we're on the threshold of dramatic technological breakthroughs. And now the challenge is to move the technologies from research lab into the marketplace. In my State of the Union I set an ambitious goal of reducing gasoline usage in the United States by 20 percent over the next 10 years. If you want to become less dependent on oil, the quickest way to do so is to use less gasoline. Meeting this goal will require significant changes in supply and demand. On the demand side, we have got to reform our economy -- fuel economy standards, that will reduce the amount of gasoline that cars and SUVs consume. And on the supply side, I have proposed a new mandatory fuel standard that is nearly a fivefold increase over the current target for renewable and alternative fuels.







We'll leave it to the market to decide the mix of fuels that most effectively and efficiently meet this goal. But that goal can be achieved, and that's why I put it out there. It's a necessary goal for our national security and economic security. It's an important goal to deal with the issue of climate change. Imagine what these technologies will mean for somebody living in New York -- the fuel in your car is going to come from a cornfield in Iowa, or perhaps switch grass out of Texas. Hybrid electric taxicabs will be running on new generation lithium ion batteries. The financial pages will be filled with new stock symbols for dynamic American companies in the growing field of alternative fuels.







This day is coming, but it's not going to happen overnight. If you want to be less dependent on foreign oil, we ought to be drilling for oil and gas in environmentally friendly ways here in the United States. And if you're concerned about a terrorist attack which could disrupt oil supplies, it makes sense for Congress to double the Strategic Petroleum Reserve.







So I hope Congress moves forward on these initiatives, and I'm looking forward to working with them. The idea is to diversify our energy supply, keep our air clean and help create new jobs through new industries that will meet the demand for alternative sources of energy.







Fourth, we can make our economy more flexible and dynamic by strengthening public education. A strong and vibrant education system is vital to maintaining America's competitive edge in the world. A strong and vibrant education system will ensure that every citizen can share in this nation's prosperity.







I know some of our citizens worry about the fact that our dynamic economy is leaving working people behind. We have an obligation to help ensure that every citizen shares in this country's future. The fact is that income inequality is real; it's been rising for more than 25 years. The reason is clear: We have an economy that increasingly rewards education, and skills because of that education. One recent study of male earnings showed that someone with a college degree earns about 72 percent more than someone with a high school diploma. The earnings gap is now twice as wide as it was in 1980 -- and it continues to grow. And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down. The key to rising in this economy is skills -- and the government's job is to make sure we have an education system that delivers them.







And that's why I think one of the most important economic initiatives of my presidency has been the No Child Left Behind Act. The philosophy behind No Child Left Behind says: We're going to spend federal money, but we expect you, at the local level to deliver results. In other words, we've insisted upon accountability. I understand some people don't like accountability, but how can you make sure if our kids are getting the foundation for the skills necessary to compete in the 21st century unless you measure? And when you measure and find failure, correct problems early before it's too late.







The No Child Left Behind Act is working. There's an achievement gap in America that's not fair and it's not right, and it's beginning to close. You know how I know? Because we're measuring. This good law is working, and the Congress needs to reauthorize it. (Applause.)







The agenda to strengthen education and make America more competitive extends beyond the primary grades. And that's why I proposed -- and I'm working with the Congress to pass -- the American Competitiveness Initiative. That means we're going to improve math and science education in the middle schools and high schools. You can't compete in the 21st century unless we're educating young engineers and physicists and chemists -- unless our kids have the skills necessary to fill the jobs of the 21st century.







I also believe it's a vital role for the federal government to spend money on basic scientific research. So I've called upon Congress to double the funding for basic scientific research at the National Institute of Standards and Technology labs, or the Department of Energy's Office of Science, or the National Science Foundation. In other words, there's things we can do in Washington to put good policies in place to make sure that we stay on the cutting edge of change, and at the same time, educate our kids so they can take advantage of the world we're in.







I believe -- and I appreciate Congress's expanding Pell Grants. It's a strong initiative I support. Pell Grants are a good way to help our poor students go to college. And I'm a big believer in the community college system here in America. Community colleges work. They're available and they're affordable, and they have the capacity to change curriculum to meet the needs of the local work force. And it makes sense for the federal government to support community colleges -- for this reason: It doesn't take much additional education to gain a new skill set so you can find jobs in this 21st century.







Let me give you an example. I went to Anne Arundel Community College in Maryland and I met Jeannetta Smith. She used to work in the textile industry. She left to study nursing. She recognized that in nursing she could make a better living for her family and herself. And so she went to a community college and she got some low-interest loans to help her, and she became a registered nurse. With a little bit of extra education and some help, she went to the community college and she's now making three times what she did in her old job. Education enables one to gain new skills necessary to fill the jobs that are coming in the 21st century. She said about her new career, "It's been very, very good. The opportunities are boundless." And that's what we want people saying in America: I have got the skill set to be able to say, the opportunities are boundless.







America's businesses have responsibilities here in America. I know you know that. A free and vibrant economy depends on public trust. Shareholders should know what executive compensation packages look like. I appreciate the fact that the SEC has issued new rules to ensure that there is transparency when it comes to executive pay packages. The print ought to be big and understandable. When people analyze their investment, they ought to see loud and clear -- they ought to be able to see with certainty the nature of the compensation packages for the people entrusted to run the companies in which they've got an investment.







Government should not decide the compensation for America's corporate executives, but the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders. America's corporate boardrooms must step up to their responsibilities. You need to pay attention to the executive compensation packages that you approve. You need to show the world that American businesses are a model of transparency and good corporate governance.







One New Yorker who understands corporate responsibility is a fellow named John Duffy. John Duffy grew up in the Bronx. He became CEO of a Manhattan investment and research firm called Keefe, Bruyette and Woods. On September the 11th, KBW had its offices in the South Tower of the World Trade Center. That day the firm lost 67 people, including John's 23-year-old son. Many thought KBW was finished. But not John Duffy. He moved his company to temporary offices. He paid out $40 million to the families of the employees the firm lost. He set up a charitable trust to help them with medical bills and college expenses. And he rebuilt his business. Last year, KBW went public, and now the firm has twice as many employees as it did on September the 11th.







I want the people to listen to what John Duffy said: "If that day was our final day, it would have meant that the bad guys had won. Our way to fight back was to keep going." It says something about John Duffy that the terrorist attacks only made him more determined to succeed. It says something about New York that there are countless stories like KBW's, of hardworking men and women who picked themselves up and rebuilt bigger and better than before. It says something about America that we continue to produce citizens who come back from adversity and create new opportunity for themselves and for others.







And this is the true strength of our economy. That's what makes us the economic leader of the world. And that's why I'm confident that we can remain that economic leader, because we're a nation of dreamers and doers and believers -- God-fearing, decent, honorable people. And I'm proud to be the President of such a nation. God bless. (Applause.)







END 11:50 A.M. EST

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