January 26, 2010

(Source: Office of the Governor, State of Ohio)

Speaker Budish, President Harris and Chief Justice Moyer. President Harris and Chief Justice Moyer will both be retiring at the end of this year. This is their last State of the State as public officials and I want to thank them for their service to Ohio. Leader Batchelder and Leader Cafaro, Lt. Governor Fisher, statewide elected officials, members of the Cabinet, and a special word of thanks to Director Terry Collins who is retiring after 33 years of service to the Department of Rehabilitation and Correction, members of the General Assembly and the Supreme Court, distinguished guests, First Lady Frances Strickland, and my fellow Ohioans…
I believe in Ohio.

I believe in Ohio because you can’t write the history of the world without us – without flight, without light, without Rock and Roll, without professional football, without John Glenn in space and John Glenn on the Earth, without the tomato, without the underground railroad, without Roy Rogers, without tires and ignition switches, without the humble fly swatter, without the Richter Scale, without Jesse Owens running for gold and for all of us in Berlin, without street lights, without fire departments, without Superman.

I believe in Ohio because Ohio will power the future.

The first major glass company to open its doors in Toledo was Libbey Glass.  It was energy that brought Edward Libbey here. He brought his company from the East Coast to Ohio in the 1880s because our natural gas could fuel his operations at a lower cost.

From that fateful decision more than a century ago, Toledo became an international center for glass production. And while energy once brought us the glass industry, today that glass industry is bringing us new energy companies making solar panels.

That means jobs in solar research and design and production and distribution and installation. And that means a renewable source of power that will attract new companies in countless industries who flock to places where there is better access to better energy.  Just ask Libbey Glass – the largest glass maker in the country, still at home in Toledo, and once again in the midst of a great energy center.

I believe in Ohio because we have made a commitment to advanced energy and we are seeing results.

When I took office Ohio had the nation’s weakest advanced energy standard for electricity production. Today, Ohio has the nation’s seventh most aggressive standard.

In 2007, not one drop of ethanol was produced in Ohio. Today, four ethanol facilities in Ohio are producing 295 million gallons annually.

In renewable and advanced energy manufacturing projects, Ohio now ranks first among the 50 states.

The Council of State Governments scoured the nation to tally the total number of new green jobs created last year. And what did they find? Ohio ranks first.

We’ve made it this far, this fast on advanced energy because we pursued smart, responsible policies and we made smart, responsible investments.

Two years ago, Ohio was one of the first states to respond to the international economic crisis with a bipartisan jobs bill that made key investments in several high growth industries, including a 150 million dollar commitment to advanced energy. 

And now Quasar Energy Group is building an anaerobic digester in Franklin County. The facility will keep waste product from farms, food companies and elsewhere out of landfills and transform it into fuel and fertilizer.
In Shelby County, Wayne Trail Technologies is creating a better battery for hybrid vehicles.

Aided by our jobs bill, energy projects like these are in the works all across Ohio.

Our electricity reform bill prevented the kind of skyrocketing rate increases of 50, 60, 70 percent that crippled states that failed to act.  Instead, Ohioans pay 10 percent less for electricity than the national average.

And that reform bill established reliability standards that are essential to Ohio companies. 

DuPont officials testified two years ago that they would not expand their Circleville plant because their electrical service wasn’t dependable. But just last week, DuPont announced a 175 million dollar investment to retool a facility that once made components for VCR tapes into one that will make film for solar panels. The company credits our energy reforms with making Ohio a better place for them to do business.

We are rapidly deploying federal stimulus funds to advance 500 million dollars in projects supporting an array of energy jobs from cutting-edge research to home weatherization.

We have continued the vital work of the Third Frontier – which has made 150 million dollars in energy technology investments.

We’ve brought 15 state and private universities together in the University Clean Energy Alliance of Ohio to unite their efforts in pursuit of energy breakthroughs.

And, in our first budget we dramatically accelerated our school construction program and made it into one of the largest energy-efficient building initiatives ever created.

I believe in Ohio because we are not sitting back and letting other states pass us by. We are taking the vital next steps to advance our energy economy.

I am pleased to announce today that Ohio is creating the Energy Gateway Fund.  We will make a unique and lasting investment in fuel cells, solar, wind, energy storage and the like with 30 million dollars in federal job stimulus funds and 10 million dollars from our state job stimulus program.

This 40 million dollar commitment will offer access to capital for new and expanding advanced energy companies. And we will at least double the impact of our efforts by requiring those seeking state funds to, at a minimum, match our investment dollar for dollar with new private funds. Revenue generated from the fund’s investments will keep powering Ohio’s economy because it will be reinvested in additional energy companies.

With the federal tax credit currently in place for renewable energy, companies will be making commitments to new facilities in the coming months.  But the fact of the matter is that Ohio’s tax structure discourages wind and solar companies from coming to Ohio to generate renewable energy.

We should give those companies every reason to choose Ohio. That’s why I am asking the legislature to erase Ohio’s tangible personal property tax on generation for wind and solar facilities that break ground this year, create Ohio jobs, and begin producing energy by 2012.

And we will no longer be shy about our place at the forefront of the energy revolution.

That’s why we are proclaiming Ohio’s status as “America’s Energy Gateway.” We will transform turnpike service plazas in Williams and Mahoning counties into showcases of Ohio’s advanced energy capabilities. Visitors to Ohio will learn and Ohioans will be reminded that Ohio is producing a new kind of energy to power our future.

There will come a day when Ohio will be the undisputed home of advanced energy. A day when we will have cast off those two tired little words that have been used to put us down. Rust Belt. Because that’s not who we are.  A day when the iconic image of the Texas oil rig will be eclipsed by the Ohio-made wind turbine and solar panel.

Orville Wright once said that everything he accomplished in his life was the result of his upbringing here in Ohio. In Ohio he was taught to question, explore, and seek new answers. I believe in Ohio because that spirit is very much alive in our great state today.

I believe in Ohio because we have laid the foundation for growth and a thriving middle class.  I believe in Ohio – unconditionally.

But we must not lose sight of the fact that many of our people are hurting right now.

The wake of the Wall Street crisis has knocked over banks, and mortgage lenders and pension plans, and companies in every sector of the economy; leaving us in the midst of the worst economic collapse in generations.

People who have worked hard all their lives and who may have never bought a stock or a bond, and certainly never traded collateralized debt, were hit by a storm of greed they didn’t cause, they didn’t contribute to, and they would never have benefited from – but for which they must now repair the damage.

In Stark County last year, 835 people applied for one job opening as a janitor at a junior high school.

835 people. Scrambling for one job.

One man told the local newspaper that getting the job would be like “winning the lottery.”

I want to say something to the 834 people who applied for that job and didn’t get it. I want to say something to every person in Ohio who is unemployed or under-employed:  I am fighting for you. 

I can’t say it will be today. I can’t say it will be easy. But we are going to fix this thing.

And you have my word on this:  I will move heaven and earth to create jobs in Ohio, and I will not rest until it’s done.

Because the state of the state is unyielding.

Unyielding in the face of the global economic turmoil. Unyielding in the face of budget cuts and job loss. Unyielding in the knowledge that we are more than our challenges. And unyielding in the belief that Ohio will always be not just our home but our hope.

I believe in Ohio because we may have been dealt a tough hand, but we are going to do what Ohioans have always done – we’ll play it to win.

We’ve had to make tough decisions. We’ve had to make sacrifices. But we have worked to reduce the blow of this international economic meltdown, and the decisions we have made have positioned Ohio to not only recover but emerge rebuilt and renewed.

In our bipartisan jobs plan, we made major investments  in advanced energy and also in logistics and distribution, public works, and other areas.

We have made the largest commitment in our history to improving Ohio’s infrastructure while saving resources in every way possible. In fact, we will increase infrastructure spending this year by 30 percent while operating with a Department of Transportation that has its smallest workforce in 30 years.

We have revitalized our job training efforts to build the skills our people need for employment in high growth industries. All told, we have helped more than 140,000 Ohioans receive job training since January 2007.

We have made a commitment to building a tax structure that encourages job growth and is respectful of our citizens.

We expanded the Homestead Property Tax Exemption, saving  the average senior citizen homeowner 400 dollars each and every year.

Our business taxes are the lowest in the Midwest.

In fact, every year I have been in office we have cut taxes.

And even with the delay in implementing the final year of the personal income tax reduction, our efforts to carry out the tax reform bill of 2005 have already provided the largest tax cut in modern Ohio history.

We reformed our regulatory process to cut down on red tape and to make it easier for companies to do business in Ohio.  In fact, we tossed out 220 state rules and we revised well over one thousand more.

I believe in Ohio because job creators know Ohio is a great place to do business.

The Small Business and Entrepreneurship Council studies the business climate in the 50 states. They consider taxes and regulations and the like, and then rank the states on whether they are a good place to start and grow a business.

In 2006, Ohio ranked 38^th.

In their new report issued just a few weeks ago, Ohio now ranks 11^th.

And, we are among the very best in the Midwest; and best among the states that border us.

I believe in Ohio because we have always been a state that invents things, designs things, makes things, grows things. And the world knows this. In fact, we are the only state in the nation where exports have grown every year since 1998.

I believe in Ohio because I have never met an Ohioan who thinks we should put in a call to China and ask them if they want more American jobs. Because we know there is no product that wouldn’t benefit from having  “Made in Ohio” stamped on it.

But Ohio business leaders have told me time and again that lack of access to capital impedes them from competing and expanding. Our businesses are operating with one hand tied behind their backs because when Wall Street ran amok and damaged the American economy, it created a credit crunch for even the most fiscally sound companies.

In particular, we have small manufacturers in Ohio today who cannot afford to expand their companies and call back laid off workers, even as orders increase, because they lack capital.  If they miss this window to expand and innovate, it could cost Ohioans jobs for a generation.

Quite frankly, I am convinced that this is the single greatest factor inhibiting economic recovery. So we are going to do something about it.

Today, I’m pleased to announce that Lt. Governor Lee Fisher and Ohio Treasurer Kevin Boyce have been working with a group of Ohio lenders to establish the Small Business Growth Partnership.

The first initiative of the partnership will be the creation of a business lending clearinghouse that points small businesses in the direction of  possible sources for the working capital they need to grow their businesses and create jobs. 

We are also meeting with lenders to establish a working capital jobs fund.  This public-private partnership would become a new, dedicated source for business working capital.

Let me be clear. This is not a bailout or a hand out – these are loans for companies that could make more products, more profits, and most importantly, more jobs if they simply had the required capital. 

My friends, Ohioans have all the skills needed to do jobs that are being outsourced overseas. In fact, Ohioans have the skills to perform those jobs better.  That’s why today I am announcing Insource Ohio, a collaboration between the Ohio Department of Development, Job and Family Services, and the Board of Regents. Insource Ohio will work with any Ohio company currently outsourcing or considering outsourcing to demonstrate how Ohio’s workforce can meet their needs within a business model that remains competitive. 

I believe in Ohio because our workforce is second to none. But when jobs disappear we owe Ohioans every opportunity to prepare themselves for new employment.

That’s why today I am announcing the creation of a Manufacturing Certificate. Those who have worked in manufacturing will be able to obtain a credential they can take to future employers that documents their full range of job skills and experience. And, certificate holders will be able to earn credit toward  additional job training and education.

People are coming to our community colleges looking for opportunity.  In fact, enrollment is up 23 percent over the last three years. A lot of folks want to create their own opportunity – and that’s why we should help them channel their passions into a business.

Today I am announcing the creation of a new program called Build Your Own Business.  In partnership with our Small Business Development Centers, Ohio’s community colleges and adult career centers will offer unemployed Ohioans courses and training on starting a business. Participants will have access to business mentors and to small startup loans of up to five thousand dollars to help our new entrepreneurs take their first steps forward.

Build Your Own Business represents a statewide expansion of the highly successful program at Lorain County Community College where they offer education and support to budding small business people. And where 60 of the 62 businesses they have mentored are succeeding.

Build Your Own Business is just one of four significant job training programs I think should be the focus of new revenue Ohio will receive from casino licensing fees.  

I would ask the legislature to consider implementing our co-op internship program to give college students an opportunity to get invaluable experience in their field and encourage our young people to stay and thrive in Ohio.  And, we should support the highly successful Ohio Workforce Guarantee that averts layoffs and spurs business expansion by providing training resources to companies.  And, I look forward to working with the legislature to create an urban workforce initiative to provide incentives for Ohio companies to immediately put unemployed Ohioans back to work.

I believe in Ohio because we favor common sense solutions over ideological extremes.

Now with a new regulatory reform we are calling Fast TRAC, we will be able to accelerate funding and final approval for our most promising job-creating transportation projects. And we will dedicate an additional 100 million dollars in cost savings to these Fast TRAC projects, putting more Ohioans to work building roads, repairing bridges and making Ohio move.

We created the University System of Ohio to unify higher education in our state and to help us pursue the goal of being best in the nation at turning our university research into new jobs and economic development.

And today we are pursuing a groundbreaking agreement that will help our university system turn great ideas into new products and new jobs.

My administration and Attorney General Rich Cordray are overseeing talks toward reaching a standing agreement between the entire University System of Ohio and consumer product powerhouse P&G.

With the contract in place, we will speed up and strengthen research collaborations between our university faculty and the company. P&G will get the benefit of our innovative thinkers. Our universities will get the benefit of unprecedented opportunities to collaborate with P&G on new products. And Ohioans will get the benefit of new economic development.

And we can use this agreement as a model for other companies and industries that want to work with Ohio’s innovative institutions. Indeed, today I am calling on the Ohio Auto Industry Support Council to build on this historic agreement and create a network that will link Ohio’s manufacturers to great research going on in Ohio.

I believe in Ohio because we are not passively waiting for a better day. We’re pursuing pragmatic solutions and building public/private partnerships that let us focus the energies of government on the needs of the people and guide the energies of private entities toward work that advances Ohio.

With the Third Frontier, Ohio made a commitment to securing our place at the forefront of the research economy. And that commitment has paid tremendous dividends.

Certified independent analysis shows that the overall Third Frontier effort has created 48,000 jobs for Ohioans and leveraged more than 6.6 billion dollars in outside investments. And the Third Frontier is a major reason why venture capital investments in Ohio have been growing more than 20 percent a year, well more than twice the rate of growth nationwide.

This ten year investment in revitalizing Ohio – launched in 2002 under the leadership of former Governor Bob Taft and with the bipartisan support of elected officials and voters – is set to expire. I want to thank the legislature for working toward the renewal of this vital program and I am hopeful that we will meet next week’s deadline for placing the Third Frontier on the ballot for voters’ consideration in May.

Ohio’s promise, Ohio’s opportunity is not to be found by clinging ever tighter to a fading past. Indeed, the scriptures warn us, “Do not say ‘why were the former days better than these,’ for it is not from wisdom that you ask this.”

Because, my friends, our renewal lies before us, not behind us.

And even as we acknowledge the sincere shared sacrifice we have endured in recent years, we shouldn’t lose sight of the fact that we have accomplished some things that no other state has been able to do.

We have followed a plan and defied our circumstances to protect our investment in the future.

California recently announced a 32 percent tuition increase at its state universities.  Ohio has held tuition to the lowest increase in the nation over the last three years.

That’s one important reason we now have 65,591 more Ohioans enrolled in our public colleges and universities than we had in 2006.

Next door in Indiana they are in the process of slashing 300 million dollars in state funds from their primary and secondary schools. In Georgia, school funding was cut by 440 million dollars. And at least twenty other states are inflicting serious cuts on their school systems.

But in Ohio, in Ohio, we are not going backward on our schools.  Using a combination of state and federal resources, we increased school funding by 5.5  percent in the last budget.

I believe in Ohio because we recognize that a superior education starting from the earliest age is the only path to sustained prosperity.

So we passed a historic education reform plan last year that gives our students and our taxpayers a system that is constitutional, accountable, and incomparable.

Using an evidence-based approach, we have defined the resources our students need inside and outside the classroom. We have redefined our expectations and our practices with one core purpose in mind – to prepare our students to become critical and creative thinkers who will thrive in the workplace and in life.

This month Education Week issued its annual report card on the nation’s schools.  The study looks at more than 150 indicators of school quality.

And Ohio’s schools now rank 1^st in the Midwest and 5^th in the nation. The report notes that Ohio’s standards for mathematics and science have been cited as a model by other states and that our assessment and accountability practices are among the best in the nation.

Our Closing the Achievement Gap initiative has raised expectations and achievements of African American students. Over the first two years of this effort, participating school districts achieved a more than 18 percent increase in the overall ninth and tenth grade promotion rate.

The highly respected Education Commission of the States studies schools and school systems across the country.  And they present an award for innovation to the state that has best improved education and put in place what they call “bold, courageous and nonpartisan new policies.” Just today the commission announced that their award for the most innovative education system in the country goes to…Ohio in recognition of the comprehensive education reform we created last year.

Let me say to our school children: We don’t know what your dreams will be – but our schools will give you the tools to make them come true.

We now better serve those who have selflessly served our nation.

We created the Ohio Department of Veterans Services to unite all our state veterans programs into one cabinet department.

With the Ohio G.I. promise, Ohio became the first state in the nation to open the doors of our state universities and colleges with free tuition for  veterans from across the country.

We’ve made military pensions free of state income tax.

Let these policies send a clear message to everyone who has worn this nation’s uniform – heroes are welcome in Ohio.

In honor of all the servicemen and women from Ohio who are bravely serving this day, please join me now in a moment of silent reflection. Let us pray for their safe return and for the comfort and strength of those who have suffered loss or injury.

…Thank you.

I am proud to say that in assembling a cabinet and in appointing judges, no Ohio governor has ever chosen applicants who better reflect the great diversity of this state.

Women now hold half of the seats in my cabinet.

Among the 40 judicial vacancies I have filled, more than one-third of our new judges are African Americans and more than forty percent are women.

One of my recent appointees represents the first Hispanic American to serve as an appellate judge in Ohio.   I am also proud to have appointed the first two Ohio judges who identify themselves as members of the gay and lesbian community. 

My friends, public servants should look like the public they serve.

Together we have put a steady hand on the reins of government – investing in things that are essential to our future and essential to who we are. We are building a government that works better and works on what’s most important to Ohio. A government that looks like Ohio, and acts for Ohio.

Ronald Reagan once said that “no government ever reduces itself in size. A government program,” he said, “is the nearest thing to eternal life we’ll ever see on this Earth.” Well,  today Ohio has 5,021 fewer state employees than when I took office. That’s fewer state employees than at any time since Ronald Reagan was in the White House.

To keep our budget balanced, we have had to make cuts but we are also making better use of the resources we do have.

It costs less to make a copy at the Ohio Environmental Protection Agency now because they purchased copy machines instead of leasing them, saving 19,000 dollars. The phone bill went down at the Department of Health because they are placing more calls over the internet instead of over traditional phone lines, saving 232,000 dollars. And because there truly is no such thing as a free lunch, we have saved 1.6 million dollars limiting where and when state money can be used to purchase food.  

It’s a penny here, a dollar there. Or, in the case of our Medicaid efforts, it’s 796 million dollars saved by billing third parties who should have been responsible for payment.

Quite frankly, we have tracked down waste and inefficiency like a hungry bloodhound.  Because our taxpayers deserve no less.

Now, not for a moment would I want to understate the serious budget challenges we have faced in Ohio. But I also think we should understand that responsible leadership makes a difference.

In November, the Pew Center on the States issued its report on state finances and state economies.  They made an apples to apples comparison of per capita revenue and spending across the 50 states.

And what did they find? Ohio is doing better than most states  at maintaining state revenue and balancing the budget.

Forbes magazine did a story just a few years ago about the states people most wanted to live in. Florida was right there at the top of the list. Today, Florida is right there at the top of a different list: the Pew Center’s list of what they call “States in Fiscal Peril.”

Florida has a higher unemployment rate than Ohio.

Florida has a higher foreclosure rate than Ohio.

Florida has lost vastly more state revenue and has had vastly greater budget gaps to fill than Ohio.

Now it’s true, in Florida they don’t have to shovel a lot of snow. But I would remind you what Rutherford Hayes had to say on the subject of weather.

He said, “The climate of Ohio is perfect…because a climate which requires industry to secure comfort is the very climate which produces the highest civilization.”

And by that standard, our civilization reached new heights earlier this month.

I believe in Ohio because while every state has taken a hit in this economy, quite frankly, we are tougher than most.

I believe in Ohio because our cities shine brightly as centers of commerce and culture.

I want to acknowledge the valuable work of the Compact with Ohio Cities task force.  I appreciate Speaker Budish making this important subject a priority, and I would like to see us move forward on several taskforce recommendations including Transportation Innovation Authorities and Land banks.

The taskforce has also called for action to help prevent foreclosures. Now, both the House and Senate have bills that would reduce foreclosures in Ohio.  Today I am asking members from both chambers, from both sides of the aisle, to bring together your best ideas and put a bill on my desk that helps keep Ohioans in their homes.

Ohio’s cities have very different economic identities. It’s time we formally recognized that fact and helped build on those strengths by designating Ohio’s Hubs of Innovation and Opportunity.

Already in Dayton and the surrounding region we have created an aerospace hub that recognizes the wide array of research and production that goes on there.

Today we are opening the hub process across Ohio.  This year, all of Ohio’s eight largest cities will have the opportunity to hold hub status.

As a hub, we will provide planning money and development assistance to further build connections between industry strengths anchored in the urban core and the surrounding region.

In short, we are going to help our cities and regions do more of what they do best.

You know, Ohio consistently ranks among the top 3 states in  average revenue per minority firm. And we are proud to be the home of opportunity.

I am pleased to announce today a new partnership with the Cleveland-based non-profit group JumpStart. Our pilot project in 21 Northeast Ohio counties will assist high-potential minority owned firms in developing business plans for sustained growth and in accessing angel investors and venture capital.

I believe in Ohio because Ohio agriculture is so important not only to our economy but to our way of life.

But we should do a better job getting Ohio-grown and raised foods onto the dinner tables of Ohio families.  Because Ohioans spend about 43 billion dollars every year on food, but only 3 percent of that spending goes to products from Ohio farms.  Moreover, too many Ohioans live in neighborhoods where fresh produce is hard to find or impossible to afford.

Today I am announcing the Ohio Neighborhood Harvest – the largest effort of its kind ever undertaken to map access to healthy and locally grown food. Working in partnership with local governments, the private sector and non-profits, we will use our findings to design a statewide strategy to improve access to Ohio- grown products and ensure that people in every neighborhood in Ohio have access to affordable, healthy food.  Because there shouldn’t be any neighborhood in Ohio where the only vegetable for sale is the pickle on a fast food hamburger.

Ohio is a soybean state. We are a corn state. We are a logistics state, situated right in the heart of it all. And we are the polymer state.

All these things make us the ideal location for an advanced biorefinery that converts farm output into food, fuel and biopolymers.

Toothbrushes, cell phones, printer cartridges – there’s a list of products as long as my arm that are made today from petroleum-based plastic that could be made from biopolymers.

And I’ll tell you this, there is nothing more important we could do for the security and sustainability of our nation than base our economy on the output of Midwestern farmers instead of Middle Eastern oil barons.

So to the companies drawing up plans to build a biorefinery – bring those plans to us.  Because with our agricultural output, our knowhow, and our location, we are sitting on a treasure and we will do everything in our power to tap it.

The Energy Gateway Fund. Hubs of Innovation. The Ohio Neighborhood Harvest.

I believe in Ohio because we will invest in the things we do exceptionally well. And we will create jobs.

Renewal of the Third Frontier. An advanced biorefinery.

I believe in Ohio because we will relentlessly pursue the future. And we will create jobs.

The most innovative schools in the country. Teaching people the skills they need to start a business. Insourcing Ohio jobs. Helping manufacturing workers show what they can do.

I believe in Ohio because we will invest in our people. And we will create jobs.

Small Business Growth Partnership. A groundbreaking agreement with P&G.

I believe in Ohio because we will unshackle those who make things. And we will create jobs.

The smallest state workforce in a generation. Hundreds of millions in savings and unprecedented efficiency.

I believe in Ohio because we will save taxpayers’ resources so that we can invest more in the things that matter most. And we will create jobs.

We are rebuilding an economic foundation so our middle class can once again stand tall.

Yes, we have been knocked down. There’s no doubt about that. But as the legendary football coach Vince Lombardi used to say, “It’s not whether you get knocked down, it’s whether you get back up.”

And Ohio will rise again. Because there isn’t a single thing wrong with Ohio that can’t be fixed by what’s right with Ohio.

I believe in Ohio and I believe in Ohioans.

I believe in Ohio because everything we’ve done today will help us  thrive tomorrow.

I believe in Ohio, because, with God, all things are possible.

–30

Sen. Harry Reid

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• Dems launch offensive to save Reid – Politico
• GOP claim Lott-Reid Double Standard – Politico

Madame Speaker, Vice President Biden, Members of Congress, and the American people:

When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse.

As any American who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. A full and vibrant recovery is many months away. And I will not let up until those Americans who seek jobs can find them; until those businesses that seek capital and credit can thrive; until all responsible homeowners can stay in their homes. That is our ultimate goal. But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink.

I want to thank the members of this body for your efforts and your support in these last several months, and especially those who have taken the difficult votes that have put us on a path to recovery. I also want to thank the American people for their patience and resolve during this trying time for our nation.

But we did not come here just to clean up crises. We came to build a future. So tonight, I return to speak to all of you about an issue that is central to that future – and that is the issue of health care.

I am not the first President to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every President and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session.

Our collective failure to meet this challenge – year after year, decade after decade – has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can’t get insurance on the job. Others are self-employed, and can’t afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover.

We are the only advanced democracy on Earth – the only wealthy nation – that allows such hardships for millions of its people. There are now more than thirty million American citizens who cannot get coverage. In just a two year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone.

But the problem that plagues the health care system is not just a problem of the uninsured. Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you’ll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won’t pay the full cost of care. It happens every day.

One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn’t reported gallstones that he didn’t even know about. They delayed his treatment, and he died because of it. Another woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne. By the time she had her insurance reinstated, her breast cancer more than doubled in size. That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America.

Then there’s the problem of rising costs. We spend one-and-a-half times more per person on health care than any other country, but we aren’t any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages. It’s why so many employers – especially small businesses – are forcing their employees to pay more for insurance, or are dropping their coverage entirely. It’s why so many aspiring entrepreneurs cannot afford to open a business in the first place, and why American businesses that compete internationally – like our automakers – are at a huge disadvantage. And it’s why those of us with health insurance are also paying a hidden and growing tax for those without it – about $1000 per year that pays for somebody else’s emergency room and charitable care.

Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close.

These are the facts. Nobody disputes them. We know we must reform this system. The question is how.

There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s, where we would severely restrict the private insurance market and have the government provide coverage for everyone. On the right, there are those who argue that we should end the employer-based system and leave individuals to buy health insurance on their own.

I have to say that there are arguments to be made for both approaches. But either one would represent a radical shift that would disrupt the health care most people currently have. Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch. And that is precisely what those of you in Congress have tried to do over the past several months.

During that time, we have seen Washington at its best and its worst.

We have seen many in this chamber work tirelessly for the better part of this year to offer thoughtful ideas about how to achieve reform. Of the five committees asked to develop bills, four have completed their work, and the Senate Finance Committee announced today that it will move forward next week. That has never happened before. Our overall efforts have been supported by an unprecedented coalition of doctors and nurses; hospitals, seniors’ groups and even drug companies – many of whom opposed reform in the past. And there is agreement in this chamber on about eighty percent of what needs to be done, putting us closer to the goal of reform than we have ever been.

But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned.

Well the time for bickering is over. The time for games has passed. Now is the season for action. Now is when we must bring the best ideas of both parties together, and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care.

The plan I’m announcing tonight would meet three basic goals:

It will provide more security and stability to those who have health insurance. It will provide insurance to those who don’t. And it will slow the growth of health care costs for our families, our businesses, and our government. It’s a plan that asks everyone to take responsibility for meeting this challenge – not just government and insurance companies, but employers and individuals. And it’s a plan that incorporates ideas from Senators and Congressmen; from Democrats and Republicans – and yes, from some of my opponents in both the primary and general election.

Here are the details that every American needs to know about this plan:

First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.

What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

That’s what Americans who have health insurance can expect from this plan – more security and stability.

Now, if you’re one of the tens of millions of Americans who don’t currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance. And it’s time to give every American the same opportunity that we’ve given ourselves.

For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can’t get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it’s a good idea now, and we should embrace it.

Now, even if we provide these affordable options, there may be those – particularly the young and healthy – who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits. If some businesses don’t provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many of the insurance reforms we seek – especially requiring insurance companies to cover pre-existing conditions – just can’t be achieved.

That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.

While there remain some significant details to be ironed out, I believe a broad consensus exists for the aspects of the plan I just outlined: consumer protections for those with insurance, an exchange that allows individuals and small businesses to purchase affordable coverage, and a requirement that people who can afford insurance get insurance.

And I have no doubt that these reforms would greatly benefit Americans from all walks of life, as well as the economy as a whole. Still, given all the misinformation that’s been spread over the past few months, I realize that many Americans have grown nervous about reform. So tonight I’d like to address some of the key controversies that are still out there.

Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple.

There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally. And one more misunderstanding I want to clear up – under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place.

My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare.

So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company. Without competition, the price of insurance goes up and the quality goes down. And it makes it easier for insurance companies to treat their customers badly – by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.

Insurance executives don’t do this because they are bad people. They do it because it’s profitable. As one former insurance executive testified before Congress, insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting what this former executive called “Wall Street’s relentless profit expectations.”

Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.

Despite all this, the insurance companies and their allies don’t like this idea. They argue that these private companies can’t fairly compete with the government. And they’d be right if taxpayers were subsidizing this public insurance option. But they won’t be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

It’s worth noting that a strong majority of Americans still favor a public insurance option of the sort I’ve proposed tonight. But its impact shouldn’t be exaggerated – by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.

For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice. And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.

Finally, let me discuss an issue that is a great concern to me, to members of this chamber, and to the public – and that is how we pay for this plan.

Here’s what you need to know. First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.

Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.

In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.

More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan.

The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.

These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you. So don’t pay attention to those scary stories about how your benefits will be cut – especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past, and just this year supported a budget that would have essentially turned Medicare into a privatized voucher program. That will never happen on my watch. I will protect Medicare.

Now, because Medicare is such a big part of the health care system, making the program more efficient can help usher in changes in the way we deliver health care that can reduce costs for everybody. We have long known that some places, like the Intermountain Healthcare in Utah or the Geisinger Health System in rural Pennsylvania, offer high-quality care at costs below average. The commission can help encourage the adoption of these common-sense best practices by doctors and medical professionals throughout the system – everything from reducing hospital infection rates to encouraging better coordination between teams of doctors.

Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan. Much of the rest would be paid for with revenues from the very same drug and insurance companies that stand to benefit from tens of millions of new customers. This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money – an idea which has the support of Democratic and Republican experts. And according to these same experts, this modest change could help hold down the cost of health care for all of us in the long-run.

Finally, many in this chamber – particularly on the Republican side of the aisle – have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush Administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my Secretary of Health and Human Services to move forward on this initiative today.

Add it all up, and the plan I’m proposing will cost around $900 billion over ten years – less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration. Most of these costs will be paid for with money already being spent – but spent badly – in the existing health care system. The plan will not add to our deficit. The middle-class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.

This is the plan I’m proposing. It’s a plan that incorporates ideas from many of the people in this room tonight – Democrats and Republicans. And I will continue to seek common ground in the weeks ahead. If you come to me with a serious set of proposals, I will be there to listen. My door is always open.

But know this: I will not waste time with those who have made the calculation that it’s better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.

Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true.

That is why we cannot fail. Because there are too many Americans counting on us to succeed – the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.

I received one of those letters a few days ago. It was from our beloved friend and colleague, Ted Kennedy. He had written it back in May, shortly after he was told that his illness was terminal. He asked that it be delivered upon his death.

In it, he spoke about what a happy time his last months were, thanks to the love and support of family and friends, his wife, Vicki, and his children, who are here tonight . And he expressed confidence that this would be the year that health care reform – “that great unfinished business of our society,” he called it – would finally pass. He repeated the truth that health care is decisive for our future prosperity, but he also reminded me that “it concerns more than material things.” “What we face,” he wrote, “is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”

I’ve thought about that phrase quite a bit in recent days – the character of our country. One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government. And figuring out the appropriate size and role of government has always been a source of rigorous and sometimes angry debate.

For some of Ted Kennedy’s critics, his brand of liberalism represented an affront to American liberty. In their mind, his passion for universal health care was nothing more than a passion for big government.

But those of us who knew Teddy and worked with him here – people of both parties – know that what drove him was something more. His friend, Orrin Hatch, knows that. They worked together to provide children with health insurance. His friend John McCain knows that. They worked together on a Patient’s Bill of Rights. His friend Chuck Grassley knows that. They worked together to provide health care to children with disabilities.

On issues like these, Ted Kennedy’s passion was born not of some rigid ideology, but of his own experience. It was the experience of having two children stricken with cancer. He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick; and he was able to imagine what it must be like for those without insurance; what it would be like to have to say to a wife or a child or an aging parent – there is something that could make you better, but I just can’t afford it.

That large-heartedness – that concern and regard for the plight of others – is not a partisan feeling. It is not a Republican or a Democratic feeling. It, too, is part of the American character. Our ability to stand in other people’s shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand. A belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgement that sometimes government has to step in to help deliver on that promise.

This has always been the history of our progress. In 1933, when over half of our seniors could not support themselves and millions had seen their savings wiped away, there were those who argued that Social Security would lead to socialism. But the men and women of Congress stood fast, and we are all the better for it. In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress, Democrats and Republicans, did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind.

You see, our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited. And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter – that at that point we don’t merely lose our capacity to solve big challenges. We lose something essential about ourselves.

What was true then remains true today. I understand how difficult this health care debate has been. I know that many in this country are deeply skeptical that government is looking out for them. I understand that the politically safe move would be to kick the can further down the road – to defer reform one more year, or one more election, or one more term.

But that’s not what the moment calls for. That’s not what we came here to do. We did not come to fear the future. We came here to shape it. I still believe we can act even when it’s hard. I still believe we can replace acrimony with civility, and gridlock with progress. I still believe we can do great things, and that here and now we will meet history’s test.

Because that is who we are. That is our calling. That is our character. Thank you, God Bless You, and may God Bless the United States of America.

ABC’S “THIS WEEK WITH GEORGE STEPHANOPOULOS”

STEPHANOPOULOS: Major milestone this week here in Iraq with the American troops pulling out of the cities. And I wonder if you can put the broader American mission in context. Are we in the process of securing victory or cutting our losses to come home?

BIDEN: Securing victory. Look, the president and I laid out a plan in the campaign which was twofold. One, withdraw our troops from Iraq in a rational timetable consistent with what the Iraqis want. And the same time, leave behind a stable and secure country.

And one of the reasons I’m here, George, is to push the last end of that, which is the need for political settlement on some important issues between Arabs and Kurds and among the confessional groups. And I think we’re well on our way.

STEPHANOPOULOS: You know, your predecessor doesn’t seem convinced.

(LAUGHTER)

STEPHANOPOULOS: John Hannah, Vice President Cheney’s national security adviser, wrote this week that under Obama, Bush’s commitment to winning in Iraq has all been vanished. The vice president warned against a premature withdrawal.

He said: “I would not want to see the U.S. waste all of the tremendous sacrifice that has gotten us to this point.”

BIDEN: You know, it’s kind of ironic. It’s their timetable we are implementing. Cheney and Bush agreed with the Iraqis before we were elected that we’d have combat troops out of the cities by June 30th.

STEPHANOPOULOS: So he’s wrong to be worried?

BIDEN: Well, I mean, it’s — I mean, for this he can’t have it both ways. He negotiated that timetable. We have met the commitment the timetable the last administration negotiated with Iraqis. And we’re totally confident that is the right thing to do.

So I find it kind of ironic that he’s criticizing his own agreement that he negotiated.

STEPHANOPOULOS: You’re also facing a little bit of criticism from the Iraqis. You know yesterday you stood up there with Prime Minister Maliki and talked about your commitment to solve these political problems, yet his spokesman came out after the meeting and said: “This is purely an Iraqi issue, we don’t want the Americans to get involved.”

What do you say to that?

BIDEN: Well, that’s that not what — that’s not what the prime minister said. The prime minister said that we may need you to get involved.

What we offered the prime minister, as well as the speaker, as well as the two vice presidents, was that to the extent — let me give you an example. The United Nations has started a process to deal with what they called the “disputed internal borders.” And that is the debate between the Kurds and the Arabs as to where the line is.

Kirkuk is probably the biggest flashpoint. And we were asked that we would — would we be helpful to the United Nations in doing this? I was further asked that would I communicate to the Kurdish leadership, who I have a close relationship with, that their passing a constitution through their parliament in Kurdistan was not helpful to the process that was under way.

STEPHANOPOULOS: So what’s going on here? Maliki says one thing and his spokesman says another.

BIDEN: Well, look, I think that it’s very important that Prime Minister Maliki and all of the Iraqi leaders are able to in fact communicate, which is true, to the people of Iraq, that they’re now a sovereign nation.

They take directions from no one. That they are able to handle their own internal affairs. And the fact — my guess is, if the spokesman said that — which surprises me, if the spokesman said that, I’d imagine they’re worried about an upcoming election, making it look like the United States is going to continue to try to direct things here.

We are not. That is not why I’m here.

STEPHANOPOULOS: We’re not going to direct things, but what if the Iraqi people — they’ve been dealing with these political disputes for an awful long time, what if they can’t solve them, the violence flares up again?

BIDEN: Well, that’s going to be a tragic outcome for the Iraqi people. We made a commitment.

STEPHANOPOULOS: But are we going to put our lives on the line again?

BIDEN: No. We made a commitment to withdraw our troops from the cities by the 30th, to withdraw our combat brigades from Iraq by next summer — the end of next summer, and withdraw all troops according to the SOFA, that agreement we negotiated with them, by the end of 2011. That is our intention.

STEPHANOPOULOS: But no matter what, 2011, American troops all gone?

BIDEN: That is the intention. We believe the Iraqis will be fully capable of maintaining their own security. And we believe that with the time frame, with their upcoming election — you know they’re having an election in January, I know you know that, they’ll form a new government early — in late winter as a consequence of that election.

And it is our expectation that that election will come off peacefully and that their democracy is gradually maturing, so.

STEPHANOPOULOS: Let me turn to Iran. We’re three weeks out from their election.

BIDEN: Yes.

STEPHANOPOULOS: Do you have any doubt it was stolen?

BIDEN: Well, look, what I don’t want to do is play into the hands of the supreme leader and Ahmadinejad like they’re blaming the British now. You know, there — that the reason why there was unrest is outside influence.

STEPHANOPOULOS: They’re saying they have confessions from reformers saying that.

BIDEN: Well, you know, they say a lot of things. That’s simply not true. The — I think the dust hasn’t settled yet in terms of?

STEPHANOPOULOS: Still, three weeks ago.

BIDEN: Well, no, now here’s what I think. I mean, I think it’s clear that the consequences of the way the election was conducted and the way that the election was declared — who was declared the winner and how, is going to have a rippling effect.

What that effect will be, I don’t know. I think we have to wait to see how this settles out and — before we can make a judgment.

STEPHANOPOULOS: But there’s no doubt now that they responded violently to the election.

BIDEN: Oh, there is no doubt about that. There is none. The whole world saw it. And it is — we have to acknowledge as a free and sovereign nation that we abhor the violence that took place. We think it was inappropriate, the way in which they treated those protesters.

And so there is no question, we and the rest of the world looked at them and said, my lord, this is not the way to conduct?

STEPHANOPOULOS: But how do you respond to critics who say the United States should have come out forcefully right away, right away and said, this is wrong, stop it, and they say that would have made a difference?

BIDEN: Well, I don’t — I think the president was absolutely pitch-perfect. I think what the president did is exactly the right way. I think the president did not allow us to be used to as the scapegoat, us to be used as?

STEPHANOPOULOS: There were some reports that you were arguing for a more forceful response earlier.

BIDEN: Well, I think the president did it exactly right. I think he was correct.

STEPHANOPOULOS: And going forward, what next? What should the strategy be right now?

BIDEN: Well, look, the Iranian government has a choice. They either choose greater isolation, and from the whole world, or they decide to take a rightful place in the — in civilized, big, great nations. They can — that’s the path they have to choose.

STEPHANOPOULOS: Haven’t they already shown evidence in the last week of what their choice is?

BIDEN: Well, they have in terms of the way they conducted their election, but they haven’t in terms of whether — the real key issues to now, are they going to continue the nuclear program? Are they going to be braced by what happened? Is this going to alter their behavior internally or externally?

Look, responses that they saw on the street in any country have consequences. It’s hard to predict what those consequences will be.

STEPHANOPOULOS: But what are the consequences for the U.S. relationship? I mean, the president had said he wants to meet with the Iranians over the nuclear program through the P-5. But how does he engage with the Iranians now without breaking faith with those reformers?

BIDEN: Well, the way you do it is if they choose to meet with the P5, under the conditions the P5 was laid out, it means they begin to change course. And it means that the protesters probably had some impact on the behavior of an administration that they don’t like at all. And it believes and I believe that means there’s consequences to that.

Now, if they in fact decide to shut out the rest of the world, clamp down, further isolation, I think that takes them down a very different path.

STEPHANOPOULOS: How do you respond to those who say that it’s the United States now that should hit the pause button, there should be a cause correction, and we shouldn’t rush to sit down…

BIDEN: Well, we’re not. We’re not rushing to sit down.

As I said to you, we have to wait to see how this sort of settles out. And there’s already an offer laid out there by the permanent five plus one to say we’re prepared to sit down and negotiate with you relative to your nuclear program. And so the ball’s in their court.

STEPHANOPOULOS: When I saw President Ahmadinejad back in April, his response to that was that we need to see more from the United States first.

Is it fair to say now that there will be absolutely no more concessions to the Iranians in advance of those discussions?

BIDEN: It’s fair to say the position the president has laid out will not change.

STEPHANOPOULOS: But there will be engagement — if the Iranians want to…

(CROSSTALK)

BIDEN: If the Iranians seek to engage, we will engage.

STEPHANOPOULOS: And meanwhile, the clock is ticking…

BIDEN: If the Iranians respond to the offer of engagement, we will engage.

STEPHANOPOULOS: But the offer is on the table?

BIDEN: The offer’s on the table.

STEPHANOPOULOS: And meanwhile, Prime Minister Netanyahu has made it pretty clear that he agreed with President Obama to give until the end of the year for this whole process of engagement to work. After that, he’s prepared to make matters into his own hands.

Is that the right approach?

BIDEN: Look, Israel can determine for itself — it’s a sovereign nation — what’s in their interest and what they decide to do relative to Iran and anyone else.

STEPHANOPOULOS: Whether we agree or not?

BIDEN: Whether we agree or not. They’re entitled to do that. Any sovereign nation is entitled to do that. But there is no pressure from any nation that’s going to alter our behavior as to how to proceed.

What we believe is in the national interest of the United States, which we, coincidentally, believe is also in the interest of Israel and the whole world. And so there are separate issues.

If the Netanyahu government decides to take a course of action different than the one being pursued now, that is their sovereign right to do that. That is not our choice.

STEPHANOPOULOS: But just to be clear here, if the Israelis decide Iran is an existential threat, they have to take out the nuclear program, militarily the United States will not stand in the way?

BIDEN: Look, we cannot dictate to another sovereign nation what they can and cannot do when they make a determination, if they make a determination that they’re existentially threatened and their survival is threatened by another country.

STEPHANOPOULOS: You say we can’t dictate, but we can, if we choose to, deny over-flight rights here in Iraq. We can stand in the way of a military strike.

BIDEN: I’m not going to speculate, George, on those issues, other than to say Israel has a right to determine what’s in its interests, and we have a right and we will determine what’s in our interests.

STEPHANOPOULOS: Meanwhile, North Korea…

BIDEN: Yes.

STEPHANOPOULOS: … seven missile launches in the last 24 hours, 11 this week. Anything the United States can do about it?

BIDEN: The question is, is there anything that we should do about it?

Look, this has almost become predictable behavior. Some of it seems like almost attention-seeking behavior.

STEPHANOPOULOS: And you don’t want to give the attention?

BIDEN: And — no, I don’t want to give the attention, because, look, I think our policy has been absolutely correct so far. We have succeeded in uniting the most important and critical countries to North Korea on a common path of further isolating North Korea. They’re going to be faced with a pretty difficult choice, it seems to me.

STEPHANOPOULOS: But not a task that includes very forceful enforcement of the sanctions. The Russians and the Chinese blocked any boarding of the ships, didn’t they?

BIDEN: No, no. Well, what they did was, if you noticed, the ship had to turn around and come back. Why? Because no port would allow them into their port.

There was no place they could go with certitude that they would not be, in fact, at that point, boarded and searched. And so I would argue that it, in fact, worked.

STEPHANOPOULOS: Is our policy now though basically waiting for the Kim Jong-il regime to collapse?

BIDEN: Our policy is to continue to put united pressure from the very countries that North Korea was able to look to before with impunity. They could take almost any action and got no reaction, no negative reaction.

That’s changed. And it is — there is a significant turning of the pressure. And there are going to be some very difficult decisions that that regime’s going to have make.

There’s a real debate going on right now, George, about succession in North Korea.

STEPHANOPOULOS: Reports that he’s tapped his youngest son.

BIDEN: That is the report.

STEPHANOPOULOS: Do you believe it?

BIDEN: Well, if I had to bet, that would be my guess. But I don’t think anyone knows for certain.

STEPHANOPOULOS: The clock is also ticking on Afghanistan. Key members of Congress made it pretty clear during the war supplemental debate that they’re going to give until early next year to see progress in Afghanistan or they’re going to cut off the funding, move to cut off the funding.

Is that the right approach?

BIDEN: Look, I think the right approach is one we have chosen, the Obama/Biden administration.

We did a thorough review of what our objectives and policies were and should be in Afghanistan.

BIDEN: We set in motion a policy which is now only beginning to unfold. All the troops we agreed to increase are not even all in place at this point. And we also believe, as General Jones accurately said, that, ultimately, the success or failure in Iraq will not rest not on a military outcome, but on a both economic and political outcome internally, getting better governance in place and economic development in that country.

STEPHANOPOULOS: But do Americans have a right to expect that if we don’t see continued progress in the next six to nine months, six to 12 months, then we should think about cutting back and pulling out?

BIDEN: Look, I think the Americans have a right to expect success. And I think the success is measured by how we defined it.

STEPHANOPOULOS: At any cost?

BIDEN: No. Success. And if they conclude that, whatever the policy that’s being undertaken by any administration as not succeeding, they have a right to say, look, cease and desist. But I don’t think that’s where we’re going, George.

STEPHANOPOULOS: There were some reports this week that the president has already made the judgment sending General Jones over to Afghanistan with a clear message — no more troops. This is it, this is all you can get.

And Bob Woodward wrote about it. He talked about the general meeting with various military figures in Afghanistan, and this is what he said — this is what he reports that General Jones said: “If there were new requests for force now, the president would quite likely have a Whiskey Tango Foxtrot moment. Everyone in the room caught phonetic reference to WTF — which in the military now sort of means, what the (blank).”

Are you concerned that this is sending some kind of a chilling message?

BIDEN: No, not at all. Look, here’s…

STEPHANOPOULOS: You don’t want to hear the advice?

BIDEN: Look, no, no. We got the advice.

We spent five months with the entire national security team, the chairman of the Joint Chiefs of Staff, the secretary of state, the secretary of defense, the national security adviser down in that tank, down in that Situation Room, laboriously banging out the plans. The military came in with explicit requests. The president gave them what they asked for. It hasn’t even been implemented yet.

STEPHANOPOULOS: You were on the other side, it was reported, that you didn’t want an expansion of troops.

BIDEN: No, no. I did want an expansion of troops. There was a slight difference about how to layer them, how to proceed.

The president — we all ended up in — you know, this was an open discussion. And the thing I like about the president, he seeks everyone’s opinion.

Well, we reached a consensus opinion, and the consensus opinion of the national security team, of which I’m a part, was to do exactly what’s under way.

The point is — I suspect the point that Jim Jones is making is, hey, it hasn’t even been implemented yet. Troops are still on the way. Slow up, guys.

STEPHANOPOULOS: But to be clear, you’re saying if the military believes there should be more troops, they shouldn’t be afraid to give that advice. They should give that advice?

BIDEN: They should not be afraid to give whatever advice from the field or from the Pentagon to the president and the secretary of defense that they think they need.

STEPHANOPOULOS: While we’ve been here, some pretty grim job numbers back at home — 9.5 percent unemployment in June, the worst numbers in 26 years.

How do you explain that? Because when the president and you all were selling the stimulus package, you predicted at the beginning that, to get this package in place, unemployment will peak at about 8 percent. So, either you misread the economy, or the stimulus package is too slow and to small.

BIDEN: The truth is, we and everyone else misread the economy. The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there.

Everyone thought at that stage — everyone — the bulk of…

STEPHANOPOULOS: CBO would say a little bit higher.

BIDEN: A little bit, but they’re all in the same range. No one was talking about that we would be moving towards — we’re worried about 10.5 percent, it will be 9.5 percent at this point.

STEPHANOPOULOS: But we’re looking at 10 now, aren’t we?

BIDEN: No. Well, look, we’re much too high. We’re at 9 — what, 9.5 right now?

STEPHANOPOULOS: 9.5.

BIDEN: And so the truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn’t — I’m not — it’s now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we’re in? And we believe it is the right package given the circumstances we’re in.

We misread how bad the economy was, but we are now only about 120 days into the recovery package. The truth of the matter was, no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money.

STEPHANOPOULOS: No, but a lot of people were saying that you needed to do something bigger and bolder then, including the economist Paul Krugman. He’s saying — right now he’s saying the same thing again — don’t wait. You need a second stimulus, you need it now.

BIDEN: Look, what we have to do now is we have to properly, adequately, transparently and effectively spend out the $787 billion.

STEPHANOPOULOS: That’s your job. You’re in charge of that now.

BIDEN: That is my job, and I think we’re doing it well. If you noticed, George, I mean, there were other predictions. This was going to be wasteful and all these terrible projects were going to be out there, and we’re wasting money. Well, that dog hasn’t barked yet.

STEPHANOPOULOS: Well, Senator Coburn has identified some.

BIDEN: Yes — no, he hasn’t, but he did, he identified one hundred ? forty-eight of which we had already killed. And so — and the rest I dispute. So the bottom line though is, I think anybody would say this has been pretty well managed so far.

The question is, how do you now — do we — what we have to do, George, is we have to, as this rolls out, put more pace on the ball. The second hundred days you’re going to see a lot more jobs created.

And the reason you are is now all of these contracts for the over several thousand highway projects that have approved.

STEPHANOPOULOS: But you’re also seeing states across the country cutting back on their programs. Many of the people on unemployment?

BIDEN: Sure.

STEPHANOPOULOS: ? today are going to run out of unemployment in September. That means for a lot of those people, if there is not a second stimulus, they’re going to be out in the cold.

BIDEN: Well, look, we have increased the amount of money unemployed — those on unemployment rolls have gotten, 12 million are getting more money because of the stimulus package.

We’ve increased the number of people eligible by 2 million people. We’ve given a tax cut to 95 percent of the people who get a pay stub. They have somewhere — $60 bucks a month out there that’s going into the economy.

There is a lot going on, George. And I think it’s premature to make the judgment?

STEPHANOPOULOS: So no second stimulus?

BIDEN: No, I didn’t say that. I think it’s premature to make that judgment. This was set up to spend out over 18 months. There are going to be major programs that are going to take effect in September, $7.5 billion for broadband, new money for high-speed rail, the implementation of the grid — the new electric grid.

And so this is just starting, the pace of the ball is now going to increase.

STEPHANOPOULOS: So you’re in charge of the stimulus. You’re the president’s envoy here in Iraq. You’re supposed to settle this dispute between the director of national intelligence and the CIA over who is going to appoint the station chiefs. By the way, have you solved that one yet?

BIDEN: I think we’ve solved that one.

STEPHANOPOULOS: You have?

BIDEN: Well, let me put it this way. I think we’re well on the way to that being solved.

STEPHANOPOULOS: Who won?

BIDEN: They both won.

STEPHANOPOULOS: So they’re going to share the responsibility to appoint to station chiefs?

BIDEN: Not done yet. Let me comment on that next week to you.

STEPHANOPOULOS: OK. Well, let me get to the broader point then. You’ve fixed — you say you’ve fixed a problem that will?

BIDEN: Well they fixed the problem.

STEPHANOPOULOS: ? to find out that they fixed the problem — look to find out the details on all of that. But you’ve got all of these discrete projects now. And when you came in you talked a lot about how you didn’t want to get bogged down in individual projects because you wanted to be, you know, the president’s primary adviser.

Are you’re worried you’re going to far in the other direction?

BIDEN: No. Because all of these projects have end dates on them. You know, they all have sell-by dates, because — and that’s I think that — I hope I’ve brought some real expertise to this job, available to the president.

The things he has asked me to do. I hope I’m relatively good at. And — but all of them have specific objectives.

STEPHANOPOULOS: Finally, Sarah Palin.

BIDEN: Yes.

STEPHANOPOULOS: You were the last person to run against her.

(LAUGHTER)

STEPHANOPOULOS: Were you surprised by her decision to step down?

BIDEN: Well, look, you and I know — and I shouldn’t say that because that implicates you in my answer, so. But those who have been deeply involved in politics know at the end of the day it is really and truly a personal deal.

And personal family decisions have real impact on people’s decisions. I love reading these history books and biographies of people, the reason they made the choice to run or not run was because the state of the economy.

It maybe had a lot to do with what the state of their life was, and the state of their family, et cetera. So I’m not going to second guess her.

STEPHANOPOULOS: She cast herself as the victim of political blood sport in that press conference. Is that how you see it?

BIDEN: No. I respect her decision. I don’t — I don’t know what prompted her decision to not only not run again and also to step down as a consequence of the decision not to run in 2010. And I take her at her word that had a personal ingredient in it. And you have to respect that.

STEPHANOPOULOS: Mr. Vice President, thank you very much.

BIDEN: Thank you.

• Madoff Sentenced to 150 Years – CNBC
• “I don’t ask for any forgiveness” – Bloomberg
• Madoff victims scavenge for food, aluminum cans – Bloomberg
• Some victims applaud, others cry – CNN
• Madoff gets 150 years for huge Ponzi Scheme – New York Times
• Bernie Madoff to rot in jail – NY Post

The Lovernor said years ago he counseled his now mistress to save her own marriage because it was God’s Law (is he Jewish?) and for her kids.  Apparently when it came to to his toeing the line of God’s Law and honoring his own kids (and wife) the calculus was different.

This is another Family Values Hypocrite for the Hall of Shame.  No politician should ever lecture anyone on “values” and get religious on us when they have no idea what pox will come down upon their house.