Tuesday 31 January 2006

I am grateful for the opportunity to talk with you about the state of our union on the day of the president's address to our country. While it is discouraging for all of us to see our country moving in the wrong direction, we need to take this opportunity to offer ideas for how to get the nation back on track.

America is losing the most important element of our national character: We are no longer the land of opportunity for all.

Generations before us came to America for one reason. This is the land where everyone who worked hard would be rewarded, could raise a family and could make a better life for their children. But America has changed. Now, hard work does not guarantee a decent standard of living, and our children do not believe they can achieve the successes of their parents. It should not be that way.

Hurricane Katrina brought the issue of poverty to the forefront for the first time in decades. But the reality is that the people of the Gulf Coast - the vast majority of them working - were living in crisis for years before the hurricane hit and put them on the news. They were living without good schools, adequate health care, safe housing and without hope - just like millions of other families across this country.

During the week of the hurricane, the Census Bureau reported that more than 37 million Americans live in poverty; 13 million of them children, most likely as not going to bed hungry some nights. Their parents sit around the kitchen table and wonder how they'll be able to feed their kids the next day - let alone send them to college. When will our leaders recognize that Americans are ashamed of our failure to reach out to these families?

My friend, Rev. Jim Wallis, has said that the Bible talks about fighting poverty more than 3,000 times. Three thousand times. Our work here on earth is clear.

When history judges us, as a nation and as individuals, it will ask: What did we do to end poverty? How we answer this call will forever define us as a nation - showing the world how America leads or how we fail to live up to our most cherished values.

Let's start with something simple, something that has worked in the past.

In the 1990s, the Earned Income Tax Credit (EITC) helped move 7 million Americans out of poverty and into the middle class. The goal of the EITC is to make work pay by reducing the taxes that low-wage workers pay on their wages and by supplementing their earnings.

To receive this benefit, you have to work and you have to file a tax return. And if you qualify, you get a tax refund even if you don't owe taxes, which is another way to encourage people to work instead of relying on public assistance programs.

The EITC represents the biggest single check that most low-wage working families see during the year. They rely on this tax credit to pay their home heating costs, for school books for their kids, for prescription drugs - and some use it to open a bank account to begin building assets for their future.

Unfortunately, the EITC is under attack from this administration. Forty years ago, President Johnson declared a war on poverty. This president has declared a war on the people living in poverty.

The Bush administration is dead set on making the lives of low-wage workers as difficult as possible. Last year, only 17 percent of taxpayers claimed the EITC, while an extraordinary 48 percent of all tax audits fell on people who claimed the credit. That means a working person earning a low wage and claiming the EITC was about three times more likely to be audited than the rest of us. And it gets worse.

This president has added insult to injury by requiring "pre-certification" for the EITC. The paperwork for pre-certification is like responding to an audit before you even file your tax return. Imagine having to fill out lengthy forms and getting affidavits from doctors and landlords before you even file your return or claim a tax credit you are due. Other taxpayers do not have to jump through these kinds of hoops.

But the mean-spiritedness doesn't stop there. The Bush administration has been freezing hundreds of thousands of EITC payments - for an average of more than eight months a piece - as it sifts through what it says may be questionable applications. According to the IRS's Taxpayer Advocate, the vast majority of these taxpayers appear to have done nothing wrong, but still they must wait for credits they have earned and put life's essentials on hold.

More than $300 billion each year is owed by taxpayers and not paid. We ought to be recovering taxes owed. The Bush administration knows what you and I know: Most of the tax evaders are wealthy individuals and big corporations, not the struggling mothers and fathers that President Bush's IRS is going after. It makes no sense to focus on people who are least able to defend themselves while letting wealthy tax cheats get off scot-free.

We've heard a lot over the years about racial profiling. Now it seems the Bush administration has invented "poverty profiling." It's just plain wrong.

Above all, we must keep America's promise of opportunity for all. We must build a Working Society - an America where everyone who works hard finally has the rewards to show for it.

In the Working Society, no one who works full-time will have to raise children in poverty or live in fear that one health emergency or pink slip will put them on the streets. In the Working Society, everyone who works full-time will at last have something to show for it - a home of their own or an account where their savings and paycheck can grow. And in the Working Society, everyone will also be asked to hold up their end of the bargain: to work, to hold off having kids until they are ready, and to do their part for their kids when the time comes.

We must take five important steps to move toward this vision.

First: Work should lead to home ownership. Today, the rich get subsidies and loopholes while the poor get ravaged by predatory lenders. The poor pay higher interest rates on their loans, which is one factor preventing them from building assets, like owning a home. We should do two things. First, we should crack down on predatory lenders and their obscene practices. And we should make this offer to poor families going into the workforce: For the first five years you are working, we will set aside up to $1,000 in an account to help you make home payments. After five years, you'll have up to $5,000 for a down payment on a home of your own.

At the same time, we should give working parents who are poor a chance to move into neighborhoods with better schools by giving them housing vouchers. That will not only expand opportunity; it will build healthier communities through cultural integration.

Second: Work should lead to savings and the creation of assets. We should offer low-income Americans "work bonds" - an extension of the Earned Income Tax Credit that helps families save for the future. Low-income working families would receive an extra credit of up to $500 per year that would be directly deposited into a new account held by a bank or a safe stock fund with low fees. If families put away more, the amount in the account would grow, and it would be available not just for retirement, but also to open a small business - the engine of our economy - or to meet a personal emergency.

Third: Work should give you a good education. We will never end poverty unless we improve our schools, and I'd like to just touch on one idea. If you have been accepted to college, stay out of trouble in high school and agree to work 10 hours a week during your first year in college, you ought to get your first year of tuition at a public university or community college for free. I have talked about this concept of "College for Everyone" for years, and right now I am working on a new pilot project in North Carolina to test out this idea in an entire county.

Fourth: Work must pay fairly. We must raise the minimum wage. With the costs of health care, energy and housing shooting through the roof, working Americans living on the minimum wage have seen their pay stay the same for eight years now. The administration's response is that minimum wage is intended for part-time teenage workers and families aren't supposed to live on the minimum wage. But the reality is that they are. If Congress will not raise the minimum wage, or the president threatens to veto a raise, then we have to go state-by-state to raise the minimum wage. We need to go further and end the political grandstanding in opposition to every effort to raise the minimum wage: We should attach the annual federal minimum wage to the poverty line, guaranteeing that the full-time worker in this bountiful country lives a life out of poverty.

Fifth: Finally, we need to work to strengthen families. All of us - parents, teachers, clergy, leaders - we all need to stand together and speak simple truths: It is wrong when boys and young men father children, but don't care for them. It is wrong when girls and young women bear children that they aren't ready to care for. And it is wrong when all Americans see this happening and do nothing to stop it. And there are simple things we can do to strengthen families, including the ones I've outlined above. The 2001 tax bill eliminated the marriage penalty for the middle class, but poor families can still get hit with a $3,000 marriage penalty. That makes no sense. And we also need to finish the job of welfare reform. It helped millions of poor mothers get jobs, but too many young men were left behind. So we should make sure that young fathers get the same deal as young mothers. You have to work and take responsibility for your children. In return, we'll help you find a job.

Making changes to help ordinary Americans get ahead won't be easy. We live in a time where laws can be bought by the highest bidder. Big tobacco, big pharmaceutical companies, big insurance companies, big broadcasters and big oil companies are winning big with this administration and the Republican-controlled Congress.

I never accepted a dime from Washington lobbyists or PACs while I was in office. Every politician could take that step now and change the way Washington works.

But most of them will need a legislative mandate to make sure they do the right thing. The starting point is comprehensive campaign finance reform, not tinkering at the edges - comprehensive campaign finance reform. I have said before that I support public financing of campaigns. As long as politicians are trapped in a desperate money chase, as long as they must spend huge amounts of time and resources to raise the money to run for re-election, we will continue to see wealthy interests trying to buy their way into favor. We need to change the way business is done there, and we need to do it immediately if we want to get out government back.

I want to acknowledge the rumors that the president may address health care in this, his fifth State of the Union speech. Democrats have been trying to steer public debate to health care for the entire Bush presidency. Just in the past year, the number of Americans without health insurance increased by 800,000, while countless others moved to less expensive - and less comprehensive - health insurance programs. The public rightly is demanding meaningful health care reform. Mr. President, let me welcome you to this debate.

Health care is the right problem to address, but the president has the wrong solution. His policy combines the worst elements of his failed Social Security plan and the disastrous prescription drug benefit. You'll get less security - higher copayments, higher deductibles and less health care. You'll be discouraged from getting the preventive care that could actually bring down health care costs. And, as with the Medicare drug benefit, you'll get lots of choices among health "plans" that don't meet your most basic needs. The winners? As usual with the Bush administration, they will be the big health care companies and HMOs.

The president says he wants to help small businesses. That's the right goal, but this isn't the way to do it. The Bush plan will give small businesses incentives to insure the healthiest Americans with low-end insurance and then forget about everyone else. I've long supported tax credits for small businesses to buy all their employees good health care.

We need real health reform in America so we can achieve what the greatest nation on earth deserves: secure, affordable health insurance for every American. That is not just a moral imperative; it is an economic imperative at a time when health costs are dragging down our biggest businesses. Along with many others, I've offered ideas in the path that would take giant steps toward reducing costs and covering everyone. It's too bad the president is taking us backward.

We have to be stronger at home so that we are better able to meet the many changes we face abroad - whether it is dealing with a rising China, halting the spread of weapons on mass destruction, stopping North Korea and Iran from obtaining nuclear weapons, combating Islamic extremism, showing leadership to end the genocide in Darfur, or dealing with the continuing conflicts and instability in the Middle East.

Which brings me to Iraq. Almost three years ago, we went into Iraq to remove what we were told - and what many of us believed and argued - was a threat to America. But in fact we now know that Iraq did not have weapons of mass destruction when our forces invaded Iraq in 2003. The intelligence was deeply flawed and, in some cases, manipulated to fit a political agenda.

It was a mistake to vote for this war in 2002. I take responsibility for that mistake. It has been hard to say these words because those who didn't make a mistake - the men and women of our armed forces and their families - have performed heroically and paid a dear price.

The world desperately needs moral leadership from America, and the foundation for moral leadership is telling the truth. While we can't change the past, we need to accept responsibility, because a key part of restoring America's moral leadership is acknowledging when we've made mistakes or been proven wrong - and showing that we have the creativity and guts to make it right.

The urgent question isn't just how we got here but what we do now. We have to give our troops a way to end their mission honorably. That means leaving behind a success, not a failure. A plan for success needs to focus on three interlocking objectives: reducing the American presence, building Iraq's capacity, and getting other countries to meet their responsibilities to help. These objectives mean nothing, however, in the absence of meaningful action.

Passive pursuit of these objectives and failure to reach aggressively for benchmarks of progress are unacceptable.

Month after month of an unchanging, or worse, increasingly dangerous, landscape in Iraq not only demoralizes the American people, it unfairly burdens those who are already making the greatest sacrifices.

Too many mistakes have already been made for this to be easy. Yet we must take these steps to succeed. The American people, the Iraqi people and - most important - our troops who have died or been injured there and those who are fighting there today deserve nothing less.

America risks losing our position as a global leader and our reputation for being the land of opportunity if we continue on the course that President Bush has set for us. We are fortunate, however, that our forefathers established a democracy that lets the people decide the ultimate fate of the nation.

I know we can create a country that works for all of us. We must focus on important goals that bring America together, such as fighting the battle against poverty, rewarding work and preparing our country for the challenges ahead.

If we are all truly equal in the eyes of the Lord and the Law; if we believe that there is dignity in hard work, then poverty has no place in America - the greatest, wealthiest nation on earth. God bless America, especially for our finest goals, and for our determination to meet the challenges that have been laid before us.

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