This week was filled with more good news about America's economy. We learned that our economy grew at an annual rate of 3.5 percent in the fourth quarter of last year. Overall, our economy grew 3.4 percent in 2006 — up from 3.1 percent in 2005.
The Dow Jones reached an all-time high this week for the 27th time in the past four months. And we learned that America created 111,000 new jobs in January, which means we have added over 7.4 million jobs in the past three-and-a-half years.
This good news is a result of the hard work of the American people and pro-growth economic policies like tax relief. By cutting taxes, we put more money into the hands of American families and small businesses. You have used this money to produce strong and lasting economic growth. And now Congress needs to make this tax relief permanent, so we can keep America's economy growing.
Pro-growth economic policies also play a vital role in our plan to balance the Federal budget. Our growing economy has produced record levels of tax revenue. This increase in tax revenue has helped us cut the deficit in half three years ahead of schedule. And on Monday, we will take the next step when I submit to Congress a budget that will eliminate the deficit by 2012.
To meet this goal, we must set priorities for government spending. My top priority will continue to be keeping America safe and winning the war against extremists who want to destroy our way of life. The budget I will submit to Congress includes the cost of funding the global war on terror, including in Iraq and Afghanistan. Our troops deserve our full support, and this budget gives them the resources they need.
Cutting the deficit during a time of war requires us to restrain spending in other areas. One good way to help eliminate wasteful spending is to pass earmark reform. Earmarks are special interest items that are often slipped into bills at the last hour. Even worse, more than 90 percent of earmarks never make it to the floor of the House and Senate for a vote. They are dropped into committee reports that are not even part of the bill that arrives on my desk. Yet they are treated as if they have the force of law.
The time has come to end this practice. So I will work with Democrats and Republicans in Congress to continue reforming the budget process, expose every earmark to the light of day and a vote in Congress, and cut the number and cost of earmarks at least in half.
Another important tool for eliminating wasteful spending is the line-item veto. Today, when lawmakers tack pork-barrel spending onto large bills, the President is left with an all or nothing choice: either sign the bill with the wasteful spending or veto the whole bill and deny funding for vital programs.
With the line-item veto, the President can sign the funding for necessary programs into law and send the unnecessary provisions back to Congress for a prompt up-or- down vote on whether to uphold the spending. Forty-three governors have a line-item veto. I urge Congress to pass the line-item veto, so we can work together to control Federal spending.
Controlling spending also requires us to address the unsustainable growth of entitlement programs such as Social Security, Medicare, and Medicaid. Spending for these programs is growing faster than inflation, faster than our economy, and faster than our ability to pay for it. Unless we act, we will saddle our children and grandchildren with tens of trillions of dollars of unfunded obligations. They will face three bad options: huge tax increases, huge budget deficits, or huge and immediate cuts in benefits. Republicans and Democrats need to come together to confront the challenge of entitlement spending and ensure that these vital programs are there when our children and grandchildren need them.
I look forward to working with Members of Congress from both sides of the aisle to address these challenges. Together, we can pass a budget that keeps our economy strong, keeps America safe, and makes deficit spending a thing of the past.
Thank you for listening.