Monday, January 31, 2011

Egypt Protests Show American Foreign-Policy Folly

Daily Beast
by Stephen Kinzer
January 27, 2011

While demonstrations continue across the Middle East, America remains largely on the sidelines. Stephen Kinzer on why the U.S. should abandon its self-defeating foreign policy in the region. Plus, full coverage of the Egypt uprising.

One afternoon a couple of weeks ago, I walked into the British Foreign Office for a meeting with Middle East policy planners. “Tunisia is melting down and the Lebanese government has just fallen,” my host said as he welcomed me. “Interesting times.”

During our meeting, one veteran British diplomat observed that since American policy toward the Middle East is frozen into immobility, change there comes only when there is a crisis. I asked where he thought the next crisis might erupt. “Egypt,” he replied.

Events have moved quickly since then. President Zine al-Abedine Ben Ali of Tunisia has been overthrown, Hezbollah has chosen the new prime minister of Lebanon, and thousands have taken to the streets in Egypt to demand an end to Hosni Mubarak’s 30-year dictatorship. The Middle East is erupting —and the U.S. is watching from the sidelines. Unable to guide the course of events, it can do little more than cheer for its sclerotic allies and hope that popular anger does not sweep them aside.

Washington sees the various local and national conflicts in the Middle East as part of a battle for regional hegemony between the U.S. and Iran. If this is true, the U.S. is losing. That is because it has stubbornly held onto Middle East policies that were shaped for the Cold War. The security environment in the region has changed dramatically since then. Iran has shown itself agile enough to align itself with rising new forces that enjoy the support of millions. The U.S., meanwhile, remains allied with countries and forces that looked strong 30 or 40 years ago but no longer are.

Iran is betting on Hezbollah, Hamas, and Shiite parties in Iraq. These are popular forces that win elections. Hezbollah emerged as the heroic champion of resistance to Israel’s 2006 invasion of Lebanon, winning the admiration of Arabs, not only for itself but also for its Iranian backers. Many Arabs also admire Hamas for its refusal to bow to Israeli power in Gaza.

Pro-Iran forces have also scored major gains in Iraq. They effectively control the Iraqi government, and their most incendiary leader, Muqtada al-Sadr, recently returned to a hero’s welcome after an extended stay in Iran. By invading Iraq in 2003, and removing Saddam Hussein from power, the U.S. handed Iraq to Iran on a platter. Now Iran is completing the consolidation of its position in Baghdad.

Who does America bet on to counter these rising forces? The same friends it has been betting on for decades: Mubarak’s pharaonic regime in Egypt; Mahmoud Abbas and his Palestinian Authority; the Saudi monarchy; and increasingly radical politicians in Israel. It is no wonder that Iran’s power is rising as the American-imposed order begins to crumble.

The U.S. keeps Mubarak in power—it gave his regime $1.5 billion in aid last year—mainly because he supports America’s pro-Israel policies, especially by helping Israel maintain its stranglehold on Gaza. It supports Abbas for the same reason: he is seen as willing to compromise with Israel, and therefore a desirable negotiating partner. This was confirmed, to Abbas’ great embarrassment, by WikiLeaks cables that show how eager he has been to meet Israeli demands, even collaborating with Israeli security forces to arrest Palestinians he dislikes. American support for Mubarak and Abbas continues, although neither man is in power with any figment of legality; Mubarak brazenly stage-manages elections, and Abbas has ruled by decree since his term of office expired in 2009.

Intimacy with the Saudi royal family is another old habit the U.S. cannot seem to kick—even though American leaders know full well, as one of the WikiLeaks cables confirms, that “Saudi donors remain the chief financiers of Sunni militant groups like al Qaeda.” The fact that the Tunisian leader fled to Saudi Arabia after being overthrown shows how fully the Saudis support the old, eroding Middle East order.

As for Israel itself, it will lose much if new Arab leaders emerge who refuse to be their silent partners. Yet Israel clings to the belief that it will be able to guarantee its long-term security with weapons alone. The U.S. encourages it in this view, sending Israelis the message that no matter how militant their rejectionist policies become, they can count on Washington’s endless support.

The U.S. has long sought to block democracy in the Arab world, fearing that it would lead to the emergence of Islamist regimes. Remarkably, however, the Tunisian revolution does not seem to be heading that way, nor have Islamist leaders tried to guide protests in Egypt. Perhaps watching the intensifying repression imposed by mullahs in Iran has led many Muslims to rethink the value of propelling clerics to power.

Even if democratic regimes in the Middle East are not fundamentalist, however, they will firmly oppose U.S. policy toward Israel. The intimate U.S.-Israel relationship guarantees that many Muslims around the world will continue to see the U.S. as an enabler of evil. Despite America’s sins in the Middle East, however, many Muslims still admire the U.S. They see its leaders as profoundly mistaken in their unconditional support of Israel, but envy what the U.S. has accomplished and want some version of American freedom and prosperity for themselves. This suggests that it is not too late for the U.S. to reset its policy toward the region in ways that would take new realities into account.

Accepting that Arabs have the right to elect their own leaders means accepting the rise of governments that do not share America’s pro-Israel militancy. This is the dilemma Washington now faces. Never has it been clearer that the U.S. needs to reassess its long-term Middle East strategy. It needs new approaches and new partners. Listening more closely to Turkey, the closest U.S. ally in the Muslim Middle East, would be a good start. A wise second step would be a reversal of policy toward Iran, from confrontation to a genuine search for compromise. Yet pathologies in American politics, fed by emotions that prevent cool assessment of national interest, continue to paralyze the U.S. diplomatic imagination. Even this month’s eruptions may not be enough to rouse Washington from its self-defeating slumber.

Stephen Kinzer is an award-winning foreign correspondent. His new book is Reset: Iran, Turkey and America's Future.

Saturday, January 29, 2011

U.S., EU eye anti-satellite weapons pact

The Obama administration is negotiating with the European Union on an agreement limiting the use of anti-satellite weapons, a move that some critics say could curb U.S. development of space weapons in general.

Three congressional staffers told The Washington Times that Pentagon and intelligence analysts said in a briefing Monday that the administration is looking to sign on to the European Union's Code of Conduct for Outer Space Activities.
The briefing followed the completion of an interagency review that recommends the United States sign on to the document with only a few minor changes to its language, according to two administration officials familiar with the review.
That recommendation is awaiting final approval from the National Security Council.
"The United States is continuing to consult with the European Union on its initiative to develop a comprehensive set of multilateral TCBMs, also known as the Code of Conduct for Outer Space Activities," Rose Gottemoeller, assistant secretary of state for arms control, verification and compliance, said Thursday at the U.N. Conference on Disarmament. TCBM stands for "transparency and confidence-building measures."
"We plan to make a decision in the coming weeks as to whether the United States can sign on to this code, including what, if any, modifications would be necessary," Ms. Gottemoeller added.
A draft of the code of conduct dated Sept. 27 says countries that sign on to the document vow to "refrain from any action which intends to bring about, directly or indirectly, damage or destruction of outer space objects unless such action is conducted to reduce the creation of outer space debris and/or is justified by the inherent right of individual or collective self-defense in accordance with the United Nations Charter or imperative safety considerations."
The United States has worried about the safety of commercial, intelligence and military satellites for years, but that concern has heightened since 2007. That year, the Chinese military successfully tested a ground-based missile that destroyed one of its own satellites.
In 2009, a communications satellite owned by satellite-phone maker Iridium crashed into a Russian satellite over northern Siberia.
Both incidents created debris that could collide with other satellites.
"Space debris, to me, I equate it with global warming in orbit," said Matthew Hoey, a military space consultant who has worked for the U.S. government and the U.N. Institute for Defense and Disarmament Studies. "It is a race against time, and once we pass the tipping point, there is no reversing it. The ramifications of a collision on economics, space exploration and communications — these are grand issues."
Mr. Hoey said the code of conduct's emphasis on space debris is "a good thing," adding that the EU code "is a great precedent."
"It is not exactly binding," he said. "There are not exactly penalties. It is a bit of an honor system. But it's the first step towards space-based arms control that we will eventually need."
The United States is a party to one major arms-control treaty dealing with outer space. Signed in 1967, that treaty bans countries from bringing nuclear weapons or other weapons of mass destruction into space.
Paula DeSutter, who was an assistant secretary of state for verification and compliance under President George W. Bush, said the EU code would be much better for U.S. national interests than a space-based arms control treaty introduced by the Russian and Chinese delegations at the 2008 U.N. Conference on Disarmament.
That proposed treaty, known as the Prevention of the Placement of Weapons in Outer Space Treaty (PPWT), is regarded by the Obama administration, and the Bush administration before it, as unverifiable and not in the U.S. national interest, according to public statements by both administrations.



"The code of conduct needs a few changes, but it is certainly far better than the PPWT," Ms. DeSutter said. "One of the good things about it is that it recognizes specifically the legitimate right of self-defense in space and the virtue of the U.S. satellite shootdown in 2008. It does not appear to limit U.S. missile defenses in any way."



However, she added that "it needs to be thoroughly reviewed to make sure that it protects U.S. intelligence and military satellite systems."



A senior State Department official familiar with the interagency review of the code of conduct said: "We had everyone look at this. Our defense programs are not harmed by it."



The State Department has exchanged language with the EU on the code of conduct. The U.S. and Russia also have begun talks about creating confidence-building measures regarding space-based activities. The U.S. has reached out to China on space issues, but Beijing has declined offers to discuss the issue, according to a senior State Department official.



One congressional staffer said many aides still had questions after Monday's briefing.



"There are capabilities that we have in space and that we want to have in space," the staffer said.



"We want to make sure our ability to conduct space situation awareness and to pursue those capabilities are not hindered by the code of conduct."



Another congressional staff member said: "There is a suspicion that this is a slippery slope to arms control for space-based weapons, anti-satellite weapons and a back door to potentially limiting missile defense."



Baker Spring, a defense analyst at the Heritage Foundation, said the staffers' concerns are "likely to be well-founded."



"Because it appears that they are talking about limiting operations, as opposed to limiting the weapons themselves, it could be that this is as much an agreement on the law of war as it is on arms control," Mr. Spring said. "If it is something more like a law-of-war agreement, then you are creating a situation of legal jeopardy for a military commander who is responsible for operating systems in space."



But Scott Pace, director of the Space Policy Institute at George Washington University, said: "I don't see this text as limiting U.S. capabilities. In fact, I see the idea of limiting space debris as deeply in the U.S. national interest and the interest of all space-faring nations."



In briefings with Congress, administration officials have said they do not consider the EU code of conduct to be a treaty, meaning it would not have to sent to the Senate for approval.



Mr. Pace said that "saying responsible countries agree on responsible behavior is not the same as a treaty."



Mr. Spring disagreed. He said the resolution of ratification adopted by the Senate last month for the New Strategic Arms Reduction Treaty spells out exactly the kinds of agreements that require the Senate's approval and the definition of militarily significant limitations would cover the code of conduct.



"The administration is trying to pretend with the EU code of conduct that an agreement that places significant restrictions on how the military may operate its systems is not militarily significant," he said.

Global Insider: U.S.-Russia 123 Agreement

The Editors
27 Jan 2011

A civilian nuclear agreement between Russia and the U.S. recently entered into force. Signed in 2008, the 123 Agreement was revived by U.S. President Barack Obama as part of the U.S.-Russia reset. In an e-mail interview, Richard Weitz, senior fellow at the Hudson Institute and a World Politics Review senior editor, discussed the U.S.-Russia 123 Agreement.

WPR: What was the impetus for U.S.-Russia 123 Agreement?

Richard Weitz: Russian and U.S. officials wanted to improve their bilateral relationship, while their nuclear industries, two of the largest in the world, wanted to expand their commercial collaboration. Presidents George W. Bush and Vladimir Putin announced their intent to negotiate a U.S.-Russia Agreement for Peaceful Nuclear Cooperation on the sidelines of the July 2006 G-8 summit in St. Petersburg. Section 123 of the U.S. Atomic Energy Act requires the United States to negotiate a framework cooperation agreement (known as a "123 Agreement") with a foreign government before any exchange of U.S.-origin nuclear materials or technologies can occur. Since many nuclear reactors use U.S.-origin uranium or fuel that has been enriched in the United States, or other American-based technologies, these restrictions apply to many foreign nuclear programs.

WPR: What will the agreement mean for each side?

Weitz: This framework agreement establishes the legal basis for Russian and American companies to negotiate specific nuclear deals directly among themselves with limited government intervention. This will expand Russia's role as a provider of international nuclear-fuel services. Russia's nuclear-energy managers seek in particular to encourage the reprocessing of spent nuclear fuel that originated in the United States and was then used in third countries to generate electricity. Russia's government and nuclear industry could earn an estimated $10 billion to $20 billion from supplying additional nuclear-fuel-cycle services now that the 123 Agreement has established the legal foundation for such transfers.

U.S. officials hope the new partnership will enhance bilateral cooperation against nuclear proliferation. For example, they want to work with Russia's government and nuclear industry to develop advanced nuclear fuel cycles less prone to misuse in making weapons. They also hope to give Moscow some financial benefits from cooperating with Washington in the nuclear field in compensation for the recent reduction in Russian-Iranian nuclear and arms collaboration. The hope is that Russia's nuclear industry and government would not want to jeopardize a lucrative relationship with the United States by working too closely with Iran or taking other disruptive actions. American companies hope to partner with Russian firms to develop new products and also hope to sell Russia U.S.-made nuclear technologies.

WPR: How will the agreement affect U.S.-Russia energy and broader diplomatic relations?

Weitz: The 123 Agreement may prove even more important over the long term for the relationship than the better-known New START Treaty. Whereas the New START treaty looks backward and addresses the Soviet-U.S. Cold War legacy, the 123 agreement looks forward. It aims to create a foundation for future bilateral civil-nuclear cooperation and open new business opportunities that might expand the currently narrow constituencies in both countries that support close Russian-American economic and energy relations.

Calling for Restraint, Pentagon Faces Test of Influence With Ally

By ELISABETH BUMILLER


January 29, 2011

 
Will the uprisings change the country’s future?

The relationship between the Egyptian and American militaries is, in fact, so close that it was no surprise on Friday to find two dozen senior Egyptian military officials at the Pentagon, halfway through an annual week of meetings, lunches and dinners with their American counterparts.
By the afternoon, the Egyptians had cut short the talks to return to Cairo, but not before a top Defense Department official, Alexander Vershbow, had urged them to exercise “restraint,” the Pentagon said.
It remained unclear on Saturday, as the Egyptian Army was deployed on the streets of Cairo for the first time in decades, to what degree the military would remain loyal to the embattled president, Hosni Mubarak.
The crisis has left the Obama administration to try to navigate a peaceful outcome and remain close to an important ally, and the military relationship could be crucial in that effort.
One fear was the possibility that, despite the Egyptian Army’s seemingly passive stance on Saturday, the soldiers would begin firing on the protesters — an action that would probably be seen as leading to an end to the army’s legitimacy.
“If they shoot on the crowd, they could win tomorrow, and then there will be a revolt that will sweep them away,” said Bruce O. Riedel, an expert on the Middle East and Asia at the Brookings Institution, who predicted that in any event Mr. Mubarak would step down.
A possible successor — and a sign of how closely the military is intertwined with the ruling party — is Omar Suleiman, the intelligence chief and a former general, who was sworn in as the new vice president. Mr. Suleiman is considered Mr. Mubarak’s closest confidant and a hard-liner, although Obama administration officials say they consider him someone they can work with. In meetings with Secretary of State Hillary Rodham Clinton, they say, he has shown substance and an ability to deliver on promises.
Mr. Riedel, who was an Egypt analyst at the C.I.A. when President Anwar el-Sadat was assassinated in 1981 and has since tracked the rise of Islamic extremism in that country, said that the Egyptian military would be a critical player in any deal to remove Mr. Mubarak from power.
Unlike the feared Egyptian police forces, which had mostly withdrawn from central Cairo on Saturday, the army is considered professional and a stable force in the country’s politics. Egyptian men all serve in the army, which for the most part enjoys popular support.
Mr. Obama met Saturday afternoon with his national security team at the White House about the uprising, but the officials would not say what, if any, decisions had been reached or whether the administration was trying to negotiate a safe exit for Mr. Mubarak.
One former United States official who is close to the Obama administration, Martin S. Indyk, said that it was time for Mr. Mubarak to go, and that the Egyptian military could serve as a crucial transition power.
“What we have to focus on now is getting the military into a position where they can hold the ring for a moderate and legitimate political leadership to emerge,” said Mr. Indyk, a Middle East peace negotiator in the Clinton administration.
Mr. Suleiman could announce that he would take control as president and hold elections within six months, Mr. Indyk said.
At the Pentagon on Saturday morning, American military officials said that the Egyptian Army was acting professionally and that they had no indications that it was swinging over en masse to the side of the uprising. At the same time, the officials noted, the army had not cracked down on the protests.
“They certainly haven’t inflicted any harm on protesters,” said Capt. John Kirby, a spokesman for Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff. “They’re focused mainly on protecting the institutions of government, as they should be.”
United States military officials said there was no formal line of communication between the Joint Chiefs and the Egyptian military, although they held out that possibility if the crisis deepened. Admiral Mullen had been scheduled to meet on Monday with Lt. Gen. Sami Hafez Enan, who is Egypt’s defense chief and chief of staff of the Egyptian Army. But General Enan was the leader of the delegation of senior Egyptian officials that left abruptly for Cairo on Friday night.
For the Pentagon, the question is how much a military that the United States in large part pays for will be receptive to American influence. Since the 1978 Camp David accords, the United States has given Egypt $35 billion in military aid, making it the largest recipient of conventional American military and economic aid after Israel.
“Is it a force that will listen to us if there is a military takeover and we want them to move to a democratically elected government as soon as possible?” said Anthony H. Cordesman, an expert on the Egyptian military at the Center for Strategic and International Studies. “They will listen. But this is a very proud group of people. The fact that they will listen doesn’t mean we can in any way leverage them.”
American military officials said on Friday that they had had no formal discussions with their Egyptian counterparts at the Pentagon about how to handle the uprising. “In other words,” said Gen. James E. Cartwright, the vice chairman of the Joint Chiefs of Staff, “we didn’t say anything to them about how they should handle it, and they didn’t tell us about how they were going to handle it.”
But, General Cartwright said, “hallway” discussions did take place, and American military officials said contingency plans had been made should the American Embassy have to be evacuated.

Wednesday, January 26, 2011

China's new stealth fighter may use US technology

SLOBODAN LEKIC and DUSAN STOJANOVIC, Associated Press
 
BRUSSELS – Chinese officials recently unveiled a new, high-tech stealth fighter that could pose a significant threat to American air superiority — and some of its technology, it turns out, may well have come from the U.S. itself.

Balkan military officials and other experts have told The Associated Press that in all probability the Chinese gleaned some of their technological know-how from an American F-117 Nighthawk that was shot down over Serbia in 1999.
Nighthawks were the world's first stealth fighters, planes that were very hard for radar to detect. But on March 27, 1999, during NATO's aerial bombing of Serbia in the Kosovo war, a Serbian anti-aircraft missile shot one of the Nighthawks down. The pilot ejected and was rescued.
It was the first time one of the much-touted "invisible" fighters had ever been hit. The Pentagon believed a combination of clever tactics and sheer luck had allowed a Soviet-built SA-3 missile to bring down the jet.
The wreckage was strewn over a wide area of flat farmlands, and civilians collected the parts — some the size of small cars — as souvenirs.
"At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers," says Adm. Davor Domazet-Loso, Croatia's military chief of staff during the Kosovo war.
"We believe the Chinese used those materials to gain an insight into secret stealth technologies ... and to reverse-engineer them," Domazet-Loso said in a telephone interview.
A senior Serbian military official confirmed that pieces of the wreckage were removed by souvenir collectors, and that some ended up "in the hands of foreign military attaches."
In Washington, an Air Force official said the service was unaware of any connection between the downed F-117 plane and development of Chinese stealth technology for the J-20. The official spoke on condition of anonymity because the subject involves classified information.
Efforts to get comment from China's defense ministry were unsuccessful.
China's multi-role stealth fighter — known as the Chengdu J-20 — made its inaugural flight Jan. 11, revealing dramatic progress in the country's efforts to develop cutting-edge military technologies.
Although the twin-engine J-20 is at least eight or nine years from entering air force inventory, it could become a rival to America's top-of-the-line F-22 Raptor, the successor to the Nighthawk and the only stealth fighter currently in service.
China rolled out the J-20 just days before a visit to Beijing by U.S. Defense Secretary Robert Gates, leading some analysts to speculate that the timing was intended to demonstrate the growing might of China's armed forces.
Despite Chinese President Hu Jintao's high-profile visit to the United States this week, many in Washington see China as an economic threat to the U.S. and worry as well about Beijing's military might.
Parts of the downed F-117 wreckage — such as the left wing with US Air Force insignia, the cockpit canopy, ejection seat, pilot's helmet and radio — are exhibited at Belgrade's aviation museum.
"I don't know what happened to the rest of the plane," said Zoran Milicevic, deputy director of the museum. "A lot of delegations visited us in the past, including the Chinese, Russians and Americans ... but no one showed any interest in taking any part of the jet."
Zoran Kusovac, a Rome-based military consultant, said the regime of former Serbian President Slobodan Milosevic routinely shared captured Western equipment with its Chinese and Russian allies.
"The destroyed F-117 topped that wish-list for both the Russians and Chinese," Kusovac said.
Russia's Sukhoi T-50 prototype stealth fighter made its maiden flight last year and is due to enter service in about four years. It is likely that the Russians also gleaned knowledge of stealth technology from the downed Nighthawk.
The F-117, developed in great secrecy in the 1970s, began service in 1983.
While not completely invisible to radar, its shape and radar-absorbent coating made detection extremely difficult. The radar cross-section was further reduced because the wings' leading and trailing edges were composed of nonmetallic honeycomb structures that do not reflect radar rays.
Kusovac said insight into this critical technology, and particularly the plane's secret radiation-absorbent exterior coating, would have significantly enhanced China's stealth know-how.
Alexander Huang of Taipei's Tamkang University said the J-20 represented a major step forward for China. He described Domazet-Loso's claim as "a logical assessment."
"There is no other stronger source for the origin of the J-20's stealthy technology," said Huang, an expert on China's air force. "The argument the Croatian chief-of-staff makes is legitimate and cannot be ruled out."
The Chinese are well-known perpetrators of industrial espionage in Western Europe and the United States, where the administration has also been increasingly aggressive in prosecuting cases of Chinese espionage.
Western diplomats have said China maintained an intelligence post in its Belgrade embassy during the Kosovo war. The building was mistakenly struck by U.S. bombers that May, killing three people inside.
"What that means is that the Serbs and Chinese would have been sharing their intelligence," said Alexander Neill, head of the Asia security program at the Royal United Services Institute, a defense think tank in London. "It's very likely that they shared the technology they recovered from the F-117, and it's very plausible that elements of the F-117 got to China."

China's new stealth fighter may use US technology

SLOBODAN LEKIC and DUSAN STOJANOVIC, Associated Press
 
BRUSSELS – Chinese officials recently unveiled a new, high-tech stealth fighter that could pose a significant threat to American air superiority — and some of its technology, it turns out, may well have come from the U.S. itself.

Balkan military officials and other experts have told The Associated Press that in all probability the Chinese gleaned some of their technological know-how from an American F-117 Nighthawk that was shot down over Serbia in 1999.
Nighthawks were the world's first stealth fighters, planes that were very hard for radar to detect. But on March 27, 1999, during NATO's aerial bombing of Serbia in the Kosovo war, a Serbian anti-aircraft missile shot one of the Nighthawks down. The pilot ejected and was rescued.
It was the first time one of the much-touted "invisible" fighters had ever been hit. The Pentagon believed a combination of clever tactics and sheer luck had allowed a Soviet-built SA-3 missile to bring down the jet.
The wreckage was strewn over a wide area of flat farmlands, and civilians collected the parts — some the size of small cars — as souvenirs.
"At the time, our intelligence reports told of Chinese agents crisscrossing the region where the F-117 disintegrated, buying up parts of the plane from local farmers," says Adm. Davor Domazet-Loso, Croatia's military chief of staff during the Kosovo war.
"We believe the Chinese used those materials to gain an insight into secret stealth technologies ... and to reverse-engineer them," Domazet-Loso said in a telephone interview.
A senior Serbian military official confirmed that pieces of the wreckage were removed by souvenir collectors, and that some ended up "in the hands of foreign military attaches."
In Washington, an Air Force official said the service was unaware of any connection between the downed F-117 plane and development of Chinese stealth technology for the J-20. The official spoke on condition of anonymity because the subject involves classified information.
Efforts to get comment from China's defense ministry were unsuccessful.
China's multi-role stealth fighter — known as the Chengdu J-20 — made its inaugural flight Jan. 11, revealing dramatic progress in the country's efforts to develop cutting-edge military technologies.
Although the twin-engine J-20 is at least eight or nine years from entering air force inventory, it could become a rival to America's top-of-the-line F-22 Raptor, the successor to the Nighthawk and the only stealth fighter currently in service.
China rolled out the J-20 just days before a visit to Beijing by U.S. Defense Secretary Robert Gates, leading some analysts to speculate that the timing was intended to demonstrate the growing might of China's armed forces.
Despite Chinese President Hu Jintao's high-profile visit to the United States this week, many in Washington see China as an economic threat to the U.S. and worry as well about Beijing's military might.
Parts of the downed F-117 wreckage — such as the left wing with US Air Force insignia, the cockpit canopy, ejection seat, pilot's helmet and radio — are exhibited at Belgrade's aviation museum.
"I don't know what happened to the rest of the plane," said Zoran Milicevic, deputy director of the museum. "A lot of delegations visited us in the past, including the Chinese, Russians and Americans ... but no one showed any interest in taking any part of the jet."
Zoran Kusovac, a Rome-based military consultant, said the regime of former Serbian President Slobodan Milosevic routinely shared captured Western equipment with its Chinese and Russian allies.
"The destroyed F-117 topped that wish-list for both the Russians and Chinese," Kusovac said.
Russia's Sukhoi T-50 prototype stealth fighter made its maiden flight last year and is due to enter service in about four years. It is likely that the Russians also gleaned knowledge of stealth technology from the downed Nighthawk.
The F-117, developed in great secrecy in the 1970s, began service in 1983.
While not completely invisible to radar, its shape and radar-absorbent coating made detection extremely difficult. The radar cross-section was further reduced because the wings' leading and trailing edges were composed of nonmetallic honeycomb structures that do not reflect radar rays.
Kusovac said insight into this critical technology, and particularly the plane's secret radiation-absorbent exterior coating, would have significantly enhanced China's stealth know-how.
Alexander Huang of Taipei's Tamkang University said the J-20 represented a major step forward for China. He described Domazet-Loso's claim as "a logical assessment."
"There is no other stronger source for the origin of the J-20's stealthy technology," said Huang, an expert on China's air force. "The argument the Croatian chief-of-staff makes is legitimate and cannot be ruled out."
The Chinese are well-known perpetrators of industrial espionage in Western Europe and the United States, where the administration has also been increasingly aggressive in prosecuting cases of Chinese espionage.
Western diplomats have said China maintained an intelligence post in its Belgrade embassy during the Kosovo war. The building was mistakenly struck by U.S. bombers that May, killing three people inside.
"What that means is that the Serbs and Chinese would have been sharing their intelligence," said Alexander Neill, head of the Asia security program at the Royal United Services Institute, a defense think tank in London. "It's very likely that they shared the technology they recovered from the F-117, and it's very plausible that elements of the F-117 got to China."

Two Pakistani N-bombs available to Saudi Arabia

December 30, 2010



With an eye on the nuclear arms race led by its neighbor Iran, Saudi Arabia has arranged to have available for its use two Pakistani nuclear bombs or guided missile warheads, debkafile's military and intelligence sources reveal. They are most probably held in Pakistan's nuclear air base at Kamra in the northern district of Attock. Pakistan has already sent the desert kingdom its latest version of the Ghauri-II missile after extending its range to 2,300 kilometers. Those missiles are tucked away in silos built in the underground city of Al-Sulaiyil, south of the capital Riyadh.



At least two giant Saudi transport planes sporting civilian colors and no insignia are parked permanently at Pakistan's Kamra base with air crews on standby. They will fly the nuclear weapons home upon receipt of a double coded signal from King Abdullah and the Director of General Intelligence Prince Muqrin bin Abdel Aziz. A single signal would not be enough.

Our military sources have found only sketchy information about the procedures for transferring the weapons from Pakistani storage to the air transports. It is not clear whether Riyadh must inform Pakistan's army chiefs that it is ready to take possession of its nuclear property, or whether a series of preset codes will provide access to the air base's nuclear stores. The only detail known to our Gulf sources is that the Saudi bombs are lodged in separate heavily-guarded stores apart from the rest of Pakistan's nuclear arsenal.

This secret was partially blown by Riyadh itself. In recent weeks, Saudi officials close to their intelligence establishment have been going around security forums in the West and dropping word that the kingdom no longer needs to build its own nuclear arsenal because it has acquired a source of readymade arms to be available on demand. This broad hint was clearly put about under guidelines from the highest levels of the monarchy.



Partial nuclear transparency was approved by Riyadh as part of a campaign to impress on the outside world that Saudi Arabia was in control of its affairs: The succession struggle had been brought under control; the Saudi regime had set its feet on a clearly defined political and military path; and the hawks of the royal house had gained the hand and were now setting the pace.

Israel Marks Signal Victory in Holding Back Iran’s Nuclear Bomb Drive

Debka


Moshe YaalonIsrael is quietly celebrating the perceived success of its five-year secret war for dramatically postponing Iran’s attainment of a nuclear bomb, previously estimated at 2011. The occasion was not marked by flamboyant ceremonies or public cries of triumph by Prime Minister Binyamin Netanyahu or Defense Minister Ehud Barak, but by a dry, inconspicuous comment which scarcely made it through two news bulletins.

Netanyahu sent Moshe Yaalon, Deputy Prime Minister in charge of Strategic Affairs, former chief of staff, and one of the most hawkish members of his government, to a brief early morning national radio interview Wednesday Dec. 28, in which he offered the opinion that Western pressure (sanctions) would force Iran to consider whether its nuclear program was worth pursuing.

“I believe that this effort will grow, and will include areas beyond sanctions, to convince the Iranian regime that, effectively, it must choose between continuing to seek nuclear capability and surviving,” he said. “I don’t know if it will happen in 2011 or in 2012, but we are talking in terms of the next three years.”

He did not specifically mention Stuxnet or the damage it had wrought to Iran’s nuclear progress – only that the Iranians had run into technical difficulties.

These difficulties “postpone the timeline,” said Yaalon. “Thus we cannot talk about a ‘point of no return.’ Iran does not currently have the ability to make a nuclear bomb on its own. I hope it won’t succeed at all and that the Western world’s effort will ultimately deny Iran a nuclear capability.”

North Korea must be dealt without before it helps Tehran catch up

Two US presidents, George W. Bush and Barack Obama, the Defense Secretary they shared, Robert Gates, as well as American intelligence and military chiefs, opposed an Israeli military attack on Iran’s secret nuclear installations, arguing that even if they were destroyed, Iran’s development of a nuclear weapon would not be put back more than two to three years. The Yaalon interview has now put Washington on notice that for the government in Jerusalem, the argument between them was over. Israel had already carried out its attack and won a respite of two to three years, leaving Washington enough time to go into action and halt the Iranian nuclear program permanently, including uranium enrichment.

The Israeli attack was not carried out with missiles, warplanes, submarines or special operations forces, but rather, as DEBKA-Net-Weekly‘s intelligence and Iranian sources revealed in two separate items in this issue, by clandestine means in the course of the secret war it waged with the United States against Iran.

The Stuxnet virus was a key weapon in this war, as were the assassinations or abductions of Iranian nuclear scientists and the creation of openings for desertions and defections.

The Israeli minister laid it on the line when he said: Today, Iran is not capable of producing a nuclear bomb on its own – meaning Israel has knocked out its ability to build a bomb unaided.

It doesn’t mean that Tehran cannot go outside for help. Since North Korea is the only practical candidate for Tehran to turn for nuclear assistance, Yaalon’s comment conveyed this message to Washington: We’ve taken care of Iran, now it’s your turn to deal with Pyongyang and make absolutely sure that it does not transfer a nuclear bomb to Iran.

(This week, the White House and Pentagon decided to build up the naval, air and marines forces off the coasts of North Korea; the aircraft carrier USS George Washington, which is stationed in Japan, is to be beefed up by two more carriers, the USS Ronald Reagan and the USS Carl Vinson.)

According to the latest information incoming Thursday from US and South Korean intelligence sources, North Korea is planning its next nuclear test as a joint effort with Iran.

Now the delay is in place, it’s up to Washington to make it permanent

Our military sources say that the concentration of three US aircraft carriers with their strike forces in a single arena signifies Washington is on the ready for a military showdown. When the number goes up to five, it means that military action is imminently in the offing.

Also worth noting is the Israeli minister’s comments on the substance and scope of future American steps against Iran.

“I believe that this effort will grow, and will include areas beyond sanctions, to convince the Iranian regime that, effectively, it must choose between continuing to seek nuclear capability and surviving,” he said.

This appears to be a reference to what is known as the American diplomatic-military option on Iran.

This approach was defined by Secretary of State Hillary Clinton in Thailand on July 22, 2009.

She stated, “If the US extends a defense umbrella over the region, it’s unlikely that Iran will be any stronger or safer, because they won’t be able to intimidate and dominate, as they apparently believe they can, once they have a nuclear weapon.”

In an interview with the Wall Street Journal on March 5, 2010, former National Security Advisor Zbigniew Brzezinski called for such an umbrella as the way to deal with Iran.

The Netanyahu government’s outlook on Iran, as articulated by Ya’alon, views the American “umbrella” not as a defensive device but rather an instrument for squeezing Iran ever harder until the Islamic regime in Tehran either gives up its drive for a nuclear weapon or falls.

In other words, the secret American-Israeli war against Iran must continue at full force.

Obama challenges the nation - and Republicans

By Dan Balz

Washington Post Staff Writer

Tuesday, January 25, 2011; 11:58 PM







President Obama and his party may have suffered a historic defeat in November's midterm elections, but in his State of the Union address on Tuesday night, he was anything but on the defensive.



His speech was most notable not for the nods he made to the changed political balance or the issues that cost the Democrats control of the House and that shaved their majority in the Senate - although he did do that.



More striking was his effort to frame the coming debates over spending and the role of government in ways that are designed to put Republicans on the defense as the fights begin. It was his latest effort to appeal to the center of the electorate.



The speech was a defense of the active use of government to prepare the country for the long-term challenge of global competitiveness, through spending on education, infrastructure, alternative energy and other projects.



Obama agreed that dealing with the deficit is crucial to ensuring the country's competitive might. But he warned, in essence, that the goal of cutting spending alone should not eclipse the assurance that the U.S. economy remains the strongest in the world.



Although this was a speech long on policy and broad ideas, it was also a calculated political argument, an effort to move the debates that framed the election to a different place.



Obama tried to project a new spirit of bipartisanship. He salted the speech with ideas that Republicans could easily agree with, such as lowering the corporate tax rate, ending earmarks and taking on medical malpractice reform. But there were also many things with which Republicans will take issue.



There was much Obama did not say, or at least said in only the most general terms. His goals sounded concrete; the steps to get there far less so. That leaves open whether his new strategy will produce real cooperation with Republicans, convince voters and others that he really has gotten the message from the midterms or, most crucially, show progress in lowering the unemployment rate.



The speech drew generally polite applause but there appeared to be little energy in the chamber. Perhaps that was because everyone was on good behavior, many seated with someone from the other party or because some of what the president said was non-controversial.



Much has changed since the November elections, and the president took advantage of those changes. His success in the lame-duck session of Congress helped restore some of his political balance and boost his standing. His well-received speech at a memorial service in Tucson after the shootings there put him in an even stronger position. But Obama has yet to consolidate those gains, especially with independent voters.



The shootings that left six dead and 13 wounded, including Rep. Gabrielle Giffords (D-Ariz.), also changed the overheated partisan environment. On Tuesday night, Obama sought to capitalize on an atmosphere of lowered voices and greater political civility to again reprise the themes of unity and common purpose that helped him win the White House in 2008.



After two years of hard partisan debate, Obama argued that the voters' decision to produce divided government means there can be progress only through cooperation and compromise between the parties.



"We will move forward together, or not at all," he said.



The president's words will not head off difficult discussions, particularly about government spending and health care. Republicans are not buying his calls for new investment, which they consider government spending by another name. But it was clearly his goal Tuesday to try to put the onus on Republicans to defend the spending cuts they are pledging to pursue, rather than allowing them to seize the initiative first.



On health care, the most contentious issue of the past two years, Obama devoted only two paragraphs. He said he is open to improvements but vowed to resist any GOP efforts to undo the benefits included in the new law. In another challenge for the parties to work together, he said, "So instead of re-fighting the battles of the last two years, let's fix what needs fixing and move forward."



Although the nation's unemployment rate still stands at 9.4 percent, the president hardly dealt with short-term efforts to produce jobs - even though that may be the most important factor in determining whether he is reelected.



Instead, he praised the work done in the lame-duck session to inject more money into the economy and sounded a cheerleader's tone to say that the worst is over. Whether the public agrees is another question. There are some signs of optimism, but there is much room for improvement.



On spending, which Republicans consider the main reason for their midterm success, Obama acknowledged the problem. But his call for a five-year freeze in discretionary domestic spending was a longer version of his three-year freeze announced a year ago and left open the question of just where he plans to cut to offset the new spending he seemed to be calling for.



On that front, however, Republicans are not doing much better. They passed a resolution Tuesday pledging to return to 2008 levels of spending, but have not put specifics behind the goal. And they clearly disagree on how much is enough.



The president did not tackle the biggest causes of the country's long-term fiscal imbalance. Although he created a deficit commission, the best he could do was to say it has done a credible job and that the conversation it started should continue.



Obama said that further reductions in Medicare and Medicaid are needed and that he is open to ideas. He called for a bipartisan effort to strengthen Social Security. He then put down markers on the things he would not accept. He only mentioned comprehensive tax reform. He was, in essence, asking Republicans to walk out on the ledge with him before he is prepared to embrace specifics of what arguably is the most difficult of the fiscal debates.



The president used the speech again to attack one key element of the compromise he struck with Republicans in the lame-duck session, saying the country cannot afford a permanent extension of the tax cuts for the wealthiest Americans. When he signaled his unhappiness with that part of the deal days after the compromise, Republicans took it as a sign of bad will on his part.



They may still be skeptical about his real willingness to cooperate and compromise, although there are reasons to think the two sides can find more common ground now than they have in the past.



Obama entered the Capitol on Tuesday night stronger politically than either he or the Republicans might have anticipated in the days after the fall elections. That put him ahead of the schedule of other presidents whose parties took a beating in midterm contests, most obviously Bill Clinton after Republicans won back Congress in 1994.



But Obama's political standing, while improved, is by no means solid. While a majority of Americans approve of his overall performance, they are generally negative in their assessment of how he is handling key issues, starting with the economy.



And although he has gained ground among independent voters, who remain the key to the outcome of the 2012 elections, they are still a group up for grabs depending on whether the economy recovers and who wins the coming debate about spending cuts and restraining government growth.



Republicans said Tuesday that they expected the president to deliver an impressive speech, but doubted whether he could match his words with actions in the coming months. That will be his test, and theirs, once they move from generalities to specifics.

State of the Union 2011: 'Win the future,' Obama says

By Anne E. Kornblut and Scott Wilson

Washington Post Staff Writers

Wednesday, January 26, 2011; 1:00 AM







President Obama sought to rouse the nation from complacency in his State of the Union address Tuesday, urging innovation and budget reforms that he said are vital to keep the United States a leader in an increasingly competitive world.



"Sustaining the American dream has never been about standing pat," Obama said. "It has required each generation to sacrifice, and struggle, and meet the demands of a new age. Now it's our turn."



Obama repeatedly declared the imperative to "win the future," comparing the current need for innovation to the space race against the Soviet Union in the 1950s and '60s. Calling for more dedication to research and technology as he raised the specter of a rapidly growing China and India, Obama declared: "This is our generation's Sputnik moment."



Speaking less than three months after his party's defeat in the midterm elections, Obama struck notes of optimism and conciliation in an address that spanned 62 minutes and was interrupted at least 75 times for applause. The president spoke to a House chamber where traditionally segregated Republicans and Democrats mingled, and he acknowledged the unusual seating arrangement at the outset of his speech. But, Obama said: "What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow."



Facing steep budget deficits, Obama did not call for massive new programs, instead proposing a five-year freeze in most discretionary spending and tens of billions of dollars in defense cuts. Those and other budgetary proposals, outlined previously by Obama and his advisers, were intended to give the president the upper hand in a debate over spending and the broader role of government that is likely to define the legislative year ahead and the presidential election to come.



But Obama also used the prime-time stage to combine a number of policy proposals into a blueprint for confronting growing threats to U.S. economic dominance. While he has emphasized innovation in his travels to battery factories and solar panel plants over the past year, he has never done so as explicitly as he did Tuesday before a national audience and after a year when the unemployment rate remained stuck above 9 percent.



He sought to sway his audience with rhetoric rather than specifics. He declared the country "poised for progress" with the stock markets and corporate profits on the rebound. Acknowledging the agony of workers who have seen jobs sent overseas, he admitted the "rules have changed" - and must be reckoned with through innovation and education.



"Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we'd beat them to the moon. The science wasn't even there yet. NASA didn't exist," he said. "But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs."



Obama's proposals - some of them left over from last year's address - included increasing math and science teacher training and investing more in developing clean-energy technology. Behind his words loomed the rising economies of Asia that present both promising new markets for American exports and sharper competition to U.S. industry in areas where the economy is likely to grow most in the coming decades.



Obama did not call for new gun legislation, as some expected he might in the wake of deadly shootings in Tucson less than three weeks earlier. Instead he referred to the massacre, which left six dead and Rep. Gabrielle Giffords (D-Ariz.) severely wounded, as an incident that gave the nation pause because it "reminded us that no matter who we are or where we come from, each of us is a part of something greater - something more consequential than party or political preference." As Obama mentioned Giffords, cameras panned to an empty chair where Giffords would have sat, while her colleagues, wearing lapel ribbons in her honor, solemnly clapped.



Obama touched glancingly on immigration, saying it is time to allow students in the country illegally to remain. "Let's stop expelling talented, responsible young people who can be staffing our research labs, starting new businesses, who could be further enriching this nation," he said.



He vigorously defended his health-care overhaul. While he said he would accept minor corrections to "flaws" in the law, he drew a bright line against big changes favored by Republicans, saying "what I'm not willing to do is go back to the days when insurance companies could deny someone coverage because of a preexisting condition."



He proposed merging government agencies to eliminate redundancies, saying he would release a government restructuring plan and submit it to Congress for a vote.



And, referring to the passage of the repeal of "don't ask, don't tell" - the military's ban on openly gay service members - Obama called on universities to allow military recruiters on college campuses. "It is time to leave behind the divisive battles of the past," Obama said.



Addressing a Republican-led House for the first time, Obama touched on ideas with bipartisan appeal, from medical malpractice reform to deficit reduction. He promised to veto any bill that arrives on his desk with pet projects destined for lawmakers' districts, known as earmarks. His overarching theme - of "winning the future," a phrase he used nearly a dozen times - had patriotic underpinnings, part of his effort to reach a broad swath of the electorate and strike a balance between sounding too rosy and too alarmed about America's standing in the world.



Republicans received his speech well. The jeers and sarcastic cheering of years past were in little evidence - in part because, with Democrats and Republicans seated together, their applause at different moments was harder to discern. When Obama mentioned his earmark ban, Sen. John McCain (R-Ariz.), his opponent in the 2008 presidential race, leapt to his feet and clapped with a huge grin.



Still, Republicans questioned whether the president will live up to his own standards. In the official Republican response, Rep. Paul Ryan (Wis.) criticized the president's health-care overhaul and challenged him on the deficit. "Americans are skeptical of both political parties, and that skepticism is justified - especially when it comes to spending," Ryan said. "So hold all of us accountable."



In delivering a State of the Union focused largely on the economy, Obama found himself in familiar territory, recycling themes that have cropped up repeatedly during his time in office.



His five-year spending freeze proposal marked a modest extension of his earlier proposal to halt spending for three years. He addressed investments in education, infrastructure and energy innovation - concepts he discussed as far back as his first address to Congress in 2009. He urged a revamping of the No Child Left Behind act, a familiar call that is also popular across party lines.



And Obama talked about the pressing need to create jobs - just as he did the year before. Yet the demands were presented against a dramatically different political backdrop, after a succession of major accomplishments during his last year, as well as defeats.



Briefly looking abroad, Obama reiterated his plan to begin withdrawing U.S. troops from Afghanistan in July, saying the strategy of escalation he adopted at the end of 2009 has shown some success. He pledged to meet the end-of-the-year deadline to withdraw all U.S. forces from Iraq more than eight years after the invasion.



He also announced plans to make his first-ever trip to South America, traveling to Brazil, Chile and El Salvador in March.



And after weeks of unrest in Tunisia, Obama said "the will of the people proved more powerful than the writ of a dictator" in the North African nation, where recent demonstrations against economic inequality, official corruption and political oppression drove the autocratic President Zine el-Abidine Ben Ali into exile after 23 years in power.



"The United States of America stands with the people of Tunisia and supports the democratic aspirations of all people," Obama said.



He contrasted the simplicity of dictatorships with the messiness of U.S. democracy, saying Americans should have "no illusions about the work ahead."



"Reforming our schools, changing the way we use energy, reducing our deficit - none of this is easy," he said. "And it will be harder because we will argue about everything. The cost. The details. The letter of every law."



And yet, Obama concluded: "As contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth."

Obama Pitches Global Fight for U.S. Jobs in Address

January 25, 2011


By SHERYL GAY STOLBERG

WASHINGTON — President Obama challenged Americans on Tuesday night to unleash their creative spirit, set aside their partisan differences and come together around a common goal of outcompeting other nations in a rapidly shifting global economy.



In a State of the Union address to a newly divided Congress, Mr. Obama outlined what he called a plan to “win the future” — a blueprint for spending in critical areas like education, high-speed rail, clean-energy technology and high-speed Internet to help the United States weather the unsettling impact of globalization and the challenge from emerging powers like China and India.



“The rules have changed,” he said.



But at the same time he proposed budget-cutting measures, including a five-year freeze in spending on some domestic programs that he said would reduce the deficit by $400 billion over 10 years.



Drawing a stark contrast between himself and Republicans, who are advocating immediate and deep cuts in spending, Mr. Obama laid out a philosophy of a government that could be more efficient but would still be necessary if the nation was to address fundamental challenges at home and abroad.



“We need to out-innovate, outeducate and outbuild the rest of the world,” he said. “We have to make America the best place on earth to do business. We need to take responsibility for our deficit and reform our government. That’s how our people will prosper.”



Just weeks after the shooting in Tucson that claimed six lives and left Representative Gabrielle Giffords, Democrat of Arizona, gravely injured, Mr. Obama received a reception that was muted and civil.



There were no boos or a shout of “You lie!” as in speeches past. Many Republicans and Democrats sat side by side — the first time anyone here can remember such mixing — and nearly all wore black-and-white lapel ribbons in honor of the dead and injured. Ms. Giffords’s colleagues held a seat open for her.



The president’s speech, lasting slightly more than an hour, lacked the loft of the inspirational address he delivered in Tucson days after the shooting. But it seemed intended to elevate his presidency above the bare-knuckled legislative gamesmanship that has defined the first two years of his term.



Reaching out to Republicans who have vowed to end the pet projects known as “earmarks,” Mr. Obama pledged to veto any bill that contained them. He tried to defuse partisan anger over his health care measure with humor, saying he had “heard rumors” of concerns over the bill, and he reiterated his pledge to fix a tax provision in the measure that both parties regard as burdensome to businesses.



He drew sustained applause when he declared that colleges should open their doors to military recruiters and R.O.T.C. programs now that “Don’t Ask, Don’t Tell,” the policy barring gay men and lesbians from serving openly, has been repealed.



And he tried to charm Republicans by weaving the new House speaker, Representative John A. Boehner of Ohio, into his narrative about American greatness, citing Mr. Boehner’s rise from “someone who began by sweeping the floors of his father’s Cincinnati bar” as an example of “a country where anything is possible.”



Still, the good will lasted only so long. Moments after Mr. Obama finished speaking, Representative Paul D. Ryan of Wisconsin, the chairman of the House Budget Committee, delivered the official Republican response, in which he criticized Mr. Obama as doing too little to attack the deficit.



And Representative Michele Bachmann of Minnesota, who delivered her own Republican critique with the backing of the Tea Party wing, complained that instead of creating “a leaner, smarter government,” Mr. Obama had created “a bureaucracy that tells us which light bulbs to buy.”



The president sought to use Tuesday night’s address to shed the tag of big-government liberal that Republicans have placed on him, and to reclaim the mantle of a pragmatic, postpartisan leader that he used to ride to the presidency in 2008.



With one eye toward his 2012 re-election campaign, Mr. Obama offered a rosy economic vision. The president who once emphasized the problems he had inherited from his predecessor was instead looking forward and making the case that the nation had at long last emerged from economic crisis.



“Two years after the worst recession most of us have ever known, the stock market has come roaring back,” Mr. Obama said. “Corporate profits are up. The economy is growing again.”



The speech was light on new policy proposals, reflecting both political and fiscal restraints on the administration after two years in which it achieved substantial legislative victories but lost the midterm elections, failed to bring the unemployment rate below 9 percent and watched the budget deficit rise sharply.



Mr. Obama did not address gun control, a hotly debated topic after the shooting in Tucson.



He did not lay out any specific plans for addressing the long-term costs of Social Security and Medicare, the biggest fiscal challenges ahead. He backed an overhaul of corporate taxes but spoke only in passing about the need to simplify the tax code for individuals. He called for legislation to address illegal immigration but provided no details.



He called for an end to subsidies for oil companies and set a goal of reducing dependence on polluting fuels over the next quarter-century, but without any mechanism to enforce it. And in a speech largely devoted to economic issues, he talked only generally about the conflicts in Iraq and Afghanistan.



As he drew a contrast between the United States and other nations, Mr. Obama gave a nod to the nation’s high unemployment rate, arguing that “the world has changed” and that it was no longer as easy as it once was for Americans to find a good and secure job.



Government itself, he said, needs to be updated for the information age. “We can’t win the future with a government of the past,” he said.



He packaged his message in optimistic, almost nationalistic phrasing, saying the country had always risen to challenges.



“So yes, the world has changed,” Mr. Obama said. “The competition for jobs is real. But this shouldn’t discourage us. It should challenge us. Remember, for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.”



He continued: “No workers are more productive than ours. No country has more successful companies, or grants more patents to inventers and entrepreneurs. We are home to the world’s best colleges and universities, where more students come to study than any other place on earth.”



Mr. Obama outlined initiatives in five areas: innovation; education; infrastructure; deficit reduction; and a more efficient federal bureaucracy. He pledged to increase the nation’s spending on research and development, as a share of the total economy, to the highest levels since John F. Kennedy was president, and vowed to prepare an additional 100,000 science and math teachers over the next 10 years.



He proposed new efforts on high-speed rail, road and airport construction and a “national wireless initiative” that, administration officials said, would extend the next generation of wireless coverage to 98 percent of the population.



“Our infrastructure used to be the best, but our lead has slipped,” Mr. Obama said. “South Korean homes now have greater Internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports.”



Saying it was imperative for the nation to tackle its deficit, Mr. Obama reiterated his support for $78 billion in cuts to the Pentagon’s budget over five years, in addition to the five-year partial freeze on domestic spending. But he did not adopt any of the recommendations of the bipartisan fiscal commission he appointed to figure out ways to bring the deficit under control.



Mr. Obama headed into the speech in surprisingly good political shape, given the drubbing Democrats took in the November elections. His job approval ratings are up — in some polls, higher than 50 percent. The public is feeling more optimistic about the economy, voters are giving Mr. Obama credit for reaching out to Republicans in a bipartisan way, and the president won high marks for his speech in Tucson after the shooting.



“There’s a reason the tragedy in Tucson gave us pause,” Mr. Obama said Tuesday night. “Amid all the noise and passions and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater — something more consequential than party or political preference.”

The Republican Response to Obama's 2011 State of the Union Address

January 25, 2011



By Rep. Paul Ryan



Good evening. I'm Congressman Paul Ryan from Janesville, Wisconsin - and Chairman here at the House Budget Committee.



President Obama just addressed a Congressional chamber filled with many new faces. One face we did not see tonight was that of our friend and colleague, Congresswoman Gabrielle Giffords of Arizona. We all miss Gabby and her cheerful spirit; and we are praying for her return to the House Chamber.



Receive news alerts



Sign Up



Rep. Paul Ryan RealClearPolitics

Obama administration Health care



Paul Ryan

[+] More

Earlier this month, President Obama spoke movingly at a memorial event for the six people who died on that violent morning in Tucson. Still, there are no words that can lift the sorrow that now engulfs the families and friends of the fallen.



What we can do is assure them that the nation is praying for them; that, in the words of the Psalmist, the Lord heals the broken hearted and binds up their wounds; and that over time grace will replace grief.



As Gabby continues to make encouraging progress, we must keep her and the others in our thoughts as we attend to the work now before us.



Tonight, the President focused a lot of attention on our economy in general - and on our deficit and debt in particular.



He was right to do so, and some of his words were reassuring. As Chairman of the House Budget Committee, I assure you that we want to work with the President to restrain federal spending.



In one of our first acts in the new majority, House Republicans voted to cut Congress's own budget. And just today, the House voted to restore the spending discipline that Washington sorely needs.



The reason is simple.



A few years ago, reducing spending was important. Today, it's imperative. Here's why.



We face a crushing burden of debt. The debt will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead.



On this current path, when my three children - who are now 6, 7, and 8 years old - are raising their own children, the Federal government will double in size, and so will the taxes they pay.



No economy can sustain such high levels of debt and taxation. The next generation will inherit a stagnant economy and a diminished country.



Frankly, it's one of my greatest concerns as a parent - and I know many of you feel the same way.



Our debt is the product of acts by many presidents and many Congresses over many years. No one person or party is responsible for it.



There is no doubt the President came into office facing a severe fiscal and economic situation.



Unfortunately, instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree that not only failed to deliver on its promise to create jobs, but also plunged us even deeper into debt.



The facts are clear: Since taking office, President Obama has signed into law spending increases of nearly 25% for domestic government agencies - an 84% increase when you include the failed stimulus.



All of this new government spending was sold as "investment." Yet after two years, the unemployment rate remains above 9% and government has added over $3 trillion to our debt.



Then the President and his party made matters even worse, by creating a new open-ended health care entitlement.



What we already know about the President's health care law is this: Costs are going up, premiums are rising, and millions of people will lose the coverage they currently have. Job creation is being stifled by all of its taxes, penalties, mandates and fees.



Businesses and unions from around the country are asking the Obama Administration for waivers from the mandates. Washington should not be in the business of picking winners and losers. The President mentioned the need for regulatory reform to ease the burden on American businesses. We agree - and we think his health care law would be a great place to start.



Last week, House Republicans voted for a full repeal of this law, as we pledged to do, and we will work to replace it with fiscally responsible, patient-centered reforms that actually reduce costs and expand coverage.



Health care spending is driving the explosive growth of our debt. And the President's law is accelerating our country toward bankruptcy.



Our debt is out of control. What was a fiscal challenge is now a fiscal crisis.



We cannot deny it; instead we must, as Americans, confront it responsibly.



And that is exactly what Republicans pledge to do.



Americans are skeptical of both political parties, and that skepticism is justified - especially when it comes to spending. So hold all of us accountable.



In this very room, the House will produce, debate, and advance a budget. Last year - in an unprecedented failure- Congress chose not to pass, or even propose a budget. The spending spree continued unchecked.

­­

We owe you a better choice and a different vision.



Our forthcoming budget is our obligation to you - to show you how we intend to do things differently ... how we will cut spending to get the debt down... help create jobs and prosperity ... and reform government programs. If we act soon, and if we act responsibly, people in and near retirement will be protected.



These budget debates are not just about the programs of government; they're also about the purpose of government.



So I'd like to share with you the principles that guide us. They are anchored in the wisdom of the founders; in the spirit of the Declaration of Independence; and in the words of the American Constitution.



They have to do with the importance of limited government; and with the blessing of self-government.

­­

We believe government's role is both vital and limited - to defend the nation from attack and provide for the common defense ... to secure our borders... to protect innocent life... to uphold our laws and Constitutional rights ... to ensure domestic tranquility and equal opportunity ... and to help provide a safety net for those who cannot provide for themselves.



We believe that the government has an important role to create the conditions that promote entrepreneurship, upward mobility, and individual responsibility.



We believe, as our founders did, that "the pursuit of happiness" depends upon individual liberty; and individual liberty requires limited government.



Limited government also means effective government. When government takes on too many tasks, it usually doesn't do any of them very well. It's no coincidence that trust in government is at an all-time low now that the size of government is at an all-time high.



The President and the Democratic Leadership have shown, by their actions, that they believe government needs to increase its size and its reach, its price tag and its power.



Whether sold as "stimulus" or repackaged as "investment," their actions show they want a federal government that controls too much; taxes too much; and spends too much in order to do too much.



And during the last two years, that is exactly what we have gotten - along with record deficits and debt - to the point where the President is now urging Congress to increase the debt limit.



We believe the days of business as usual must come to an end. We hold to a couple of simple convictions: Endless borrowing is not a strategy; spending cuts have to come first.

­­­­

Our nation is approaching a tipping point.



We are at a moment, where if government's growth is left unchecked and unchallenged, America's best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.



Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked - and it won't work now.



We need to chart a new course.



Speaking candidly, as one citizen to another: We still have time... but not much time. If we continue down our current path, we know what our future will be.



Just take a look at what's happening to Greece, Ireland, the United Kingdom and other nations in Europe. They didn't act soon enough; and now their governments have been forced to impose painful austerity measures: large benefit cuts to seniors and huge tax increases on everybody.



Their day of reckoning has arrived. Ours is around the corner. That is why we must act now.

­­

Some people will back away from this challenge. But I see this challenge as an opportunity to rebuild what Lincoln called the "central ideas" of the Republic.



We believe a renewed commitment to limited government will unshackle our economy and create millions of new jobs and opportunities for all people, of every background, to succeed and prosper. Under this approach, the spirit of initiative - not political clout - determines who succeeds.



Millions of families have fallen on hard times not because of our ideals of free enterprise - but because our leaders failed to live up to those ideals; because of poor decisions made in Washington and Wall Street that caused a financial crisis, squandered our savings, broke our trust, and crippled our economy.



Today, a similar kind of irresponsibility threatens not only our livelihoods but our way of life.

­­

We need to reclaim our American system of limited government, low taxes, reasonable regulations, and sound money, which has blessed us with unprecedented prosperity. And it has done more to help the poor than any other economic system ever designed. That's the real secret to job creation - not borrowing and spending more money in Washington.



Limited government and free enterprise have helped make America the greatest nation on earth.



These are not easy times, but America is an exceptional nation. In all the chapters of human history, there has never been anything quite like America. The American story has been cherished, advanced, and defended over the centuries.



And it now falls to this generation to pass on to our children a nation that is stronger, more vibrant, more decent, and better than the one we inherited.



Thank you and good night.



Paul Ryan represents Wisconsin's First Congressional District and serves as Ranking Member of the House Budget Committee.

Obama’s Second State of the Union

Following is the prepared text for President Obama’s second State of the Union address on Tuesday, as released by the White House:




Mr. Speaker, Mr. Vice President, Members of Congress, distinguished guests, and fellow Americans:



Tonight I want to begin by congratulating the men and women of the 112th Congress, as well as your new Speaker, John Boehner. And as we mark this occasion, we are also mindful of the empty chair in this Chamber, and pray for the health of our colleague – and our friend – Gabby Giffords.



It's no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs. And that's a good thing. That's what a robust democracy demands. That's what helps set us apart as a nation.



But there's a reason the tragedy in Tucson gave us pause. Amid all the noise and passions and rancor of our public debate, Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater – something more consequential than party or political preference.



We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled.



That, too, is what sets us apart as a nation.



Now, by itself, this simple recognition won't usher in a new era of cooperation. What comes of this moment is up to us. What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.



I believe we can. I believe we must. That's what the people who sent us here expect of us. With their votes, they've determined that governing will now be a shared responsibility between parties. New laws will only pass with support from Democrats and Republicans. We will move forward together, or not at all – for the challenges we face are bigger than party, and bigger than politics.



At stake right now is not who wins the next election – after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else. It's whether the hard work and industry of our people is rewarded. It's whether we sustain the leadership that has made America not just a place on a map, but a light to the world.



We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.



But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.



That's the project the American people want us to work on. Together.



We did that in December. Thanks to the tax cuts we passed, Americans' paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.



But we have more work to do. The steps we've taken over the last two years may have broken the back of this recession – but to win the future, we'll need to take on challenges that have been decades in the making.



Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn't always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you'd have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you'd even have the pride of seeing your kids work at the same company.



That world has changed. And for many, the change has been painful. I've seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I've heard it in the frustrations of Americans who've seen their paychecks dwindle or their jobs disappear – proud men and women who feel like the rules have been changed in the middle of the game.



They're right. The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there's an internet connection.



Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They're investing in research and new technologies. Just recently, China became home to the world's largest private solar research facility, and the world's fastest computer.



So yes, the world has changed. The competition for jobs is real. But this shouldn't discourage us. It should challenge us. Remember – for all the hits we've taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We are home to the world's best colleges and universities, where more students come to study than any other place on Earth.



What's more, we are the first nation to be founded for the sake of an idea – the idea that each of us deserves the chance to shape our own destiny. That is why centuries of pioneers and immigrants have risked everything to come here. It's why our students don't just memorize equations, but answer questions like "What do you think of that idea? What would you change about the world? What do you want to be when you grow up?"



The future is ours to win. But to get there, we can't just stand still. As Robert Kennedy told us, "The future is not a gift. It is an achievement." Sustaining the American Dream has never been about standing pat. It has required each generation to sacrifice, and struggle, and meet the demands of a new age.



Now it's our turn. We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That's how our people will prosper. That's how we'll win the future. And tonight, I'd like to talk about how we get there.



The first step in winning the future is encouraging American innovation.



None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn't know that something called the Internet would lead to an economic revolution. What we can do – what America does better than anyone – is spark the creativity and imagination of our people. We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn't just change our lives. It's how we make a living.



Our free enterprise system is what drives innovation. But because it's not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That's what planted the seeds for the Internet. That's what helped make possible things like computer chips and GPS.



Just think of all the good jobs – from manufacturing to retail – that have come from those breakthroughs.



Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we'd beat them to the moon. The science wasn't there yet. NASA didn't even exist. But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.



This is our generation's Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven't seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We'll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.



Already, we are seeing the promise of renewable energy. Robert and Gary Allen are brothers who run a small Michigan roofing company. After September 11th, they volunteered their best roofers to help repair the Pentagon. But half of their factory went unused, and the recession hit them hard.



Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country. In Robert's words, "We reinvented ourselves."



That's what Americans have done for over two hundred years: reinvented ourselves. And to spur on more success stories like the Allen Brothers, we've begun to reinvent our energy policy. We're not just handing out money. We're issuing a challenge. We're telling America's scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we'll fund the Apollo Projects of our time.



At the California Institute of Technology, they're developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they're using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.



We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.



Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they're selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America's electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.



Maintaining our leadership in research and technology is crucial to America's success. But if we want to win the future – if we want innovation to produce jobs in America and not overseas – then we also have to win the race to educate our kids.



Think about it. Over the next ten years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren't even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us – as citizens, and as parents – are willing to do what's necessary to give every child a chance to succeed.



That responsibility begins not in our classrooms, but in our homes and communities. It's family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it's not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair; that success is not a function of fame or PR, but of hard work and discipline.



Our schools share this responsibility. When a child walks into a classroom, it should be a place of high expectations and high performance. But too many schools don't meet this test. That's why instead of just pouring money into a system that's not working, we launched a competition called Race to the Top. To all fifty states, we said, "If you show us the most innovative plans to improve teacher quality and student achievement, we'll show you the money."



Race to the Top is the most meaningful reform of our public schools in a generation. For less than one percent of what we spend on education each year, it has led over 40 states to raise their standards for teaching and learning. These standards were developed, not by Washington, but by Republican and Democratic governors throughout the country. And Race to the Top should be the approach we follow this year as we replace No Child Left Behind with a law that is more flexible and focused on what's best for our kids.



You see, we know what's possible for our children when reform isn't just a top-down mandate, but the work of local teachers and principals; school boards and communities.



Take a school like Bruce Randolph in Denver. Three years ago, it was rated one of the worst schools in Colorado; located on turf between two rival gangs. But last May, 97% of the seniors received their diploma. Most will be the first in their family to go to college. And after the first year of the school's transformation, the principal who made it possible wiped away tears when a student said "Thank you, Mrs. Waters, for showing… that we are smart and we can make it."



Let's also remember that after parents, the biggest impact on a child's success comes from the man or woman at the front of the classroom. In South Korea, teachers are known as "nation builders." Here in America, it's time we treated the people who educate our children with the same level of respect. We want to reward good teachers and stop making excuses for bad ones. And over the next ten years, with so many Baby Boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science, technology, engineering, and math.



In fact, to every young person listening tonight who's contemplating their career choice: If you want to make a difference in the life of our nation; if you want to make a difference in the life of a child – become a teacher. Your country needs you.



Of course, the education race doesn't end with a high school diploma. To compete, higher education must be within reach of every American. That's why we've ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.



Because people need to be able to train for new jobs and careers in today's fast-changing economy, we are also revitalizing America's community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old. And she told me she's earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams too. As Kathy said, "I hope it tells them to never give up."



If we take these steps – if we raise expectations for every child, and give them the best possible chance at an education, from the day they're born until the last job they take – we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.



One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.



Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let's agree to make that effort. And let's stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.



The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information – from high-speed rail to high-speed internet.



Our infrastructure used to be the best – but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a "D."



We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system. The jobs created by these projects didn't just come from laying down tracks or pavement. They came from businesses that opened near a town's new train station or the new off-ramp.



Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I'm proposing that we redouble these efforts.



We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what's best for the economy, not politicians.



Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.



Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn't just about a faster internet and fewer dropped calls. It's about connecting every part of America to the digital age. It's about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It's about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.



All these investments – in innovation, education, and infrastructure – will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.



Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.



So tonight, I'm asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.



To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 – because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.



Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That's what we did with Korea, and that's what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.



To reduce barriers to growth and investment, I've ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That's what we've done in this country for more than a century. It's why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It's why we have speed limits and child labor laws. It's why last year, we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis. And it's why we passed reform that finally prevents the health insurance industry from exploiting patients.



Now, I've heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.



What I'm not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition. I'm not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I'm not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents' coverage. So instead of re-fighting the battles of the last two years, let's fix what needs fixing and move forward.



Now, the final step – a critical step – in winning the future is to make sure we aren't buried under a mountain of debt.



We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people's pockets.



But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.



So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.



This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I've proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.



I recognize that some in this Chamber have already proposed deeper cuts, and I'm willing to eliminate whatever we can honestly afford to do without. But let's make sure that we're not doing it on the backs of our most vulnerable citizens. And let's make sure what we're cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you're flying high at first, but it won't take long before you'll feel the impact.



Now, most of the cuts and savings I've proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won't.



The bipartisan Fiscal Commission I created last year made this crystal clear. I don't agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.



This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.



To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market.



And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.



It's not a matter of punishing their success. It's about promoting America's success.



In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.



So now is the time to act. Now is the time for both sides and both houses of Congress – Democrats and Republicans – to forge a principled compromise that gets the job done. If we make the hard choices now to rein in our deficits, we can make the investments we need to win the future.



Let me take this one step further. We shouldn't just give our people a government that's more affordable. We should give them a government that's more competent and efficient. We cannot win the future with a government of the past.



We live and do business in the information age, but the last major reorganization of the government happened in the age of black and white TV. There are twelve different agencies that deal with exports. There are at least five different entities that deal with housing policy. Then there's my favorite example: the Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them in when they're in saltwater. And I hear it gets even more complicated once they're smoked.



Now, we have made great strides over the last two years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We're selling acres of federal office space that hasn't been used in years, and we will cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote – and we will push to get it passed.



In the coming year, we will also work to rebuild people's faith in the institution of government. Because you deserve to know exactly how and where your tax dollars are being spent, you will be able to go to a website and get that information for the very first time in history. Because you deserve to know when your elected officials are meeting with lobbyists, I ask Congress to do what the White House has already done: put that information online. And because the American people deserve to know that special interests aren't larding up legislation with pet projects, both parties in Congress should know this: if a bill comes to my desk with earmarks inside, I will veto it.



A 21st century government that's open and competent. A government that lives within its means. An economy that's driven by new skills and ideas. Our success in this new and changing world will require reform, responsibility, and innovation. It will also require us to approach that world with a new level of engagement in our foreign affairs.



Just as jobs and businesses can now race across borders, so can new threats and new challenges. No single wall separates East and West; no one rival superpower is aligned against us.



And so we must defeat determined enemies wherever they are, and build coalitions that cut across lines of region and race and religion. America's moral example must always shine for all who yearn for freedom, justice, and dignity. And because we have begun this work, tonight we can say that American leadership has been renewed and America's standing has been restored.



Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high; where American combat patrols have ended; violence has come down; and a new government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America's commitment has been kept; the Iraq War is coming to an end.



Of course, as we speak, al Qaeda and their affiliates continue to plan attacks against us. Thanks to our intelligence and law enforcement professionals, we are disrupting plots and securing our cities and skies. And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.



We have also taken the fight to al Qaeda and their allies abroad. In Afghanistan, our troops have taken Taliban strongholds and trained Afghan Security Forces. Our purpose is clear – by preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny al Qaeda the safe-haven that served as a launching pad for 9/11.



Thanks to our heroic troops and civilians, fewer Afghans are under the control of the insurgency. There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them. This year, we will work with nearly 50 countries to begin a transition to an Afghan lead. And this July, we will begin to bring our troops home.



In Pakistan, al Qaeda's leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe-havens are shrinking. And we have sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: we will not relent, we will not waver, and we will defeat you.



American leadership can also be seen in the effort to secure the worst weapons of war. Because Republicans and Democrats approved the New START Treaty, far fewer nuclear weapons and launchers will be deployed. Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.



Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher and tighter sanctions than ever before. And on the Korean peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons.



This is just a part of how we are shaping a world that favors peace and prosperity. With our European allies, we revitalized NATO, and increased our cooperation on everything from counter-terrorism to missile defense. We have reset our relationship with Russia, strengthened Asian alliances, and built new partnerships with nations like India. This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances for progress in the Americas. Around the globe, we are standing with those who take responsibility – helping farmers grow more food; supporting doctors who care for the sick; and combating the corruption that can rot a society and rob people of opportunity.



Recent events have shown us that what sets us apart must not just be our power – it must be the purpose behind it. In South Sudan – with our assistance – the people were finally able to vote for independence after years of war. Thousands lined up before dawn. People danced in the streets. One man who lost four of his brothers at war summed up the scene around him: "This was a battlefield for most of my life. Now we want to be free."



We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.



We must never forget that the things we've struggled for, and fought for, live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.



Tonight, let us speak with one voice in reaffirming that our nation is united in support of our troops and their families. Let us serve them as well as they have served us – by giving them the equipment they need; by providing them with the care and benefits they have earned; and by enlisting our veterans in the great task of building our own nation.



Our troops come from every corner of this country – they are black, white, Latino, Asian and Native American. They are Christian and Hindu, Jewish and Muslim. And, yes, we know that some of them are gay. Starting this year, no American will be forbidden from serving the country they love because of who they love. And with that change, I call on all of our college campuses to open their doors to our military recruiters and the ROTC. It is time to leave behind the divisive battles of the past. It is time to move forward as one nation.



We should have no illusions about the work ahead of us. Reforming our schools; changing the way we use energy; reducing our deficit – none of this is easy. All of it will take time. And it will be harder because we will argue about everything. The cost. The details. The letter of every law.



Of course, some countries don't have this problem. If the central government wants a railroad, they get a railroad – no matter how many homes are bulldozed. If they don't want a bad story in the newspaper, it doesn't get written.



And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth.



We may have differences in policy, but we all believe in the rights enshrined in our Constitution. We may have different opinions, but we believe in the same promise that says this is a place where you can make it if you try. We may have different backgrounds, but we believe in the same dream that says this is a country where anything's possible. No matter who you are. No matter where you come from.



That dream is why I can stand here before you tonight. That dream is why a working class kid from Scranton can stand behind me. That dream is why someone who began by sweeping the floors of his father's Cincinnati bar can preside as Speaker of the House in the greatest nation on Earth.



That dream – that American Dream – is what drove the Allen Brothers to reinvent their roofing company for a new era. It's what drove those students at Forsyth Tech to learn a new skill and work towards the future. And that dream is the story of a small business owner named Brandon Fisher.



Brandon started a company in Berlin, Pennsylvania that specializes in a new kind of drilling technology. One day last summer, he saw the news that halfway across the world, 33 men were trapped in a Chilean mine, and no one knew how to save them.



But Brandon thought his company could help. And so he designed a rescue that would come to be known as Plan B. His employees worked around the clock to manufacture the necessary drilling equipment. And Brandon left for Chile.



Along with others, he began drilling a 2,000 foot hole into the ground, working three or four days at a time with no sleep. Thirty-seven days later, Plan B succeeded, and the miners were rescued. But because he didn't want all of the attention, Brandon wasn't there when the miners emerged. He had already gone home, back to work on his next project.



Later, one of his employees said of the rescue, "We proved that Center Rock is a little company, but we do big things."



We do big things.



From the earliest days of our founding, America has been the story of ordinary people who dare to dream. That's how we win the future.



We are a nation that says, "I might not have a lot of money, but I have this great idea for a new company. I might not come from a family of college graduates, but I will be the first to get my degree. I might not know those people in trouble, but I think I can help them, and I need to try. I'm not sure how we'll reach that better place beyond the horizon, but I know we'll get there. I know we will."



We do big things.



The idea of America endures. Our destiny remains our choice. And tonight, more than two centuries later, it is because of our people that our future is hopeful, our journey goes forward, and the state of our union is strong.



Thank you, God Bless You, and may God Bless the United States of America.