THE PRESIDENT: Good morning. Two thousand and one has been a year that Americans will always remember. We suffered great loss, and we found a new unity. We were attacked, and we responded swiftly. We have seen the strength of America in countless acts of kindness, compassion and courage.

This year ends with progress on the battlefield and accomplishment at home. The men and women of our military have successfully fought a new kind of war. They applied new tactics and new technology to rout a new kind of enemy. The lessons we learn in Afghanistan will guide our military to the future, and make our country stronger and more secure.

On the home front, we're strengthening our defenses against terrorist attack, while upholding our constitutional liberties. Our airways are more secure, and we are standing on alert.

And here in Washington, we have built a record of achievement. We've set out clear priorities of tax relief and education reform, and we achieved them. Strengthening a troubled economy was one of my first priorities. So we passed the biggest tax reduction in a generation. And on January 1st, the next round of tax relief takes effect.

As of January 1st, the marginal tax rate for moderate-income taxpayers falls to 10 percent. Tax credits to encourage businesses to provide day care will expand. And the adoption tax credit will increase to $10,000. Yet, we cannot stop here.

I was disappointed by the failure of the Senate to act on my proposals to help laid off workers and to stimulate job creation. I outlined these proposals in October, more than 800,000 lost jobs ago. My ideas passed the House of Representatives. And according to the Council of Economic Advisors, they could save 300,000 endangered jobs. But the Senate would not schedule them for a vote. I hope that we can resolve in the new year and put politics aside and get the job done for the American people.

Education was another top priority, and we passed the boldest reform of the federal education program in nearly four decades. We raised standards, put a new emphasis on reading, protected local control, and made sure that our schools teach all of our children. These are real achievements, and we must do more.

We must have quick action on other issues that passed the House of Representatives, but languished in the Senate. I'm counting on the Senate to take up my proposals to assure America's energy independence, to stimulate our economy and create jobs, to adopt a solid patients' bill of rights, to mobilize faith-based institutions for a new era of effective compassion, and to enhance our ability to negotiate favorable trade agreements for the United States.

We have work to do to strengthen Social Security and put Medicare on sound footing for the future. Above all, this coming year will require our sustained commitment to the war against terrorism. We cannot know how long this struggle will last. But it can end only one way: in victory for America and the cause of freedom.

We look back on 2001 with sadness and with pride. We must look forward with determination and with resolve.

Thank you so much for listening, and Happy New Year to you all.

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