Now, in the short term, we came together here in Washington at the end of last year and enacted¹ tax cuts that are already making Americans’ paychecks bigger and are allowing businesses to write off major investments.  These are tax cuts and changes in the tax credit system that are going to spur job creation and economic growth, and I’m proud that Democrats² and Republicans worked with each other to get it done. 
 
In the long term, however, we need to address a set of economic challenges that, frankly³, the housing bubble largely papered over for almost a decade.  We now live in a world that’s more connected and more competitive than ever before.  When each of you tries to bring new jobs and industries to your state, you’re not just competing with each other, but you’re competing with China, you’re competing with India, you’re competing with Brazil, you’re competing with countries all around the world.
 
And that means that we as a nation need to make sure that we are the best place on Earth to do business.  We need a skilled and educated workforce⁴, a commitment to cutting-edge research and technology, and a fast and reliable transportation and communications network.  That’s how we’re going to bring new jobs to America, and that’s how we’re going to win the future.
 
Making these necessary investments would be hard at any time.  But it’s that much harder at a time when resources are scarce.  After living through a decade of deficits⁶ and a historic recession that made them worse, we can’t afford to kick the can down the road any longer.  So the budget debate that we’re having is going to be critical here in Washington.  And so far, most of it’s been focused almost entirely⁷ on how much of annual domestic spending -- what in the parlance⁸ we all domestic discretionary spending（可自由支配的个人开支） -- that we should cut.  There’s no doubt that cuts in discretionary spending have to be a part of the answer for deficit⁵ reduction.
 
And that’s why, as a start, I’ve proposed a five-year spending freeze that will reduce our deficits by $400 billion.  The budget that I sent to Congress cuts or eliminates more than 200 federal programs.  And it reforms dozens of others, from health care to homeland security to education, so that rather than throwing money at programs with no accountability or measured results, we’re committed to funding only those things that work.
 
All told, the budget cuts I’ve proposed will bring annual domestic spending to its lowest share of the economy since Dwight Eisenhower.  Let me repeat that.  Under my budget, if it were to be adopted, domestic discretionary spending would be lower as a percentage of GDP than it was under the nine previous administrations, including under Ronald Reagan’s.
 
But we know that this kind of spending, domestic discretionary spending, which has been the focus of complaints about out-of-control federal spending, makes up only about 12 percent of the entire budget.  If we truly want to get our deficit under control, then we're going to have to cut excessive spending wherever it exists -- in defense⁹ spending -- and I have to say that Bob Gates has been as good a steward¹⁰（管家，乘务员） of taxpayer¹¹ dollars when it comes to the Pentagon as just about anybody out there, but we're going to have to do more -- in health care spending, on programs like Medicare and Medicaid, and in spending through tax breaks and loopholes.  That’s going to be a tough conversation to have, but it’s one we need to have, and it’s one I expect to have with congressional leaders in the weeks to come.
 
Those of you who are in this room obviously are on the front lines of this budget debate.  As the Recovery Act funds that saw through many states over the last two years are phasing out -- and it is undeniable that the Recovery Act helped every single state represented in this room manage your budgets,  whether you admit it or not -- you face some very tough choices at this point on everything from schools to prisons to pensions.
 
I also know that many of you are making decisions regarding your public workforces¹², and I know how difficult that can be.  I recently froze the salaries of federal employees for two years.  It wasn’t something that I wanted to do, but I did it because of the very tough fiscal¹³ situation that we’re in.
 
So I believe that everybody should be prepared to give up something in order to solve our budget challenges, and I think most public servants agree with that.  Democrats and Republicans agree with that.  In fact, many public employees in your respective states have already agreed to cuts.
 
But let me also say this:  I don’t think it does anybody any good when public employees are denigrated¹⁴（诋毁，诽谤） or vilified¹⁵ or their rights are infringed¹⁶ upon.  We need to attract the best and the brightest to public service.  These times demand it.  We’re not going to attract the best teachers for our kids, for example, if they only make a fraction of what other professionals make.  We’re not going to convince the bravest Americans to put their lives on the line as police officers or firefighters if we don’t properly reward that bravery.
 
So, yes, we need a conversation about pensions and Medicare and Medicaid and other promises that we’ve made as a nation.  And those will be tough conversations, but necessary conservations.  As we make these decisions about our budget going forward, though, I believe that everyone should be at the table and that the concept of shared sacrifice should prevail.  If all the pain is borne by only one group -- whether it’s workers, or seniors, or the poor -- while the wealthiest among us get to keep or get more tax breaks, we’re not doing the right thing.  I think that’s something that Democrats and Republicans should be able to agree on.
 
Now, as we begin to get our budgets under control, the other thing we can’t do is sacrifice our future.  Even as we cut back on those things that don’t add to growth or opportunity for our people, we have to keep investing in those things that are absolutely necessary to America’s success -- education, innovation, infrastructure¹⁷.
 
On education, our approach has been to partner with you -- to offer more flexibility¹⁸ in exchange for better standards; to lift the cap on charter schools; to spur reform not by imposing¹⁹ it from Washington, but by asking you to come up with some of the best ways for your states to succeed.  That was the idea behind Race to the Top:  You show us the best plans for reform; we’ll show you the money.
 
We’re also working with you and with Congress to fix No Child Left Behind with a focus on reform, responsibility and, most importantly, results.  And we’re trying to give states and schools more flexibility to reward good teachers and stop making excuses for bad teachers, because we know that the single most important factor in a child’s success other than their parents is the man or woman at the front of the classroom.