THE PRESIDENT: Thank you very much. Thank you for the warm welcome. Good evening. I appreciate that kind introduction -- Jeb. (Laughter.) And I thank you for bringing Melissa, too.

It's my honor to be with you. I can't thank you enough for coming to support our candidates running for the United States House, the United States Senate, and for the White House. I appreciate my friends from the Congress who are here. I especially want to pay tribute to Senator Mitch McConnell, Senate Republican Leader, Congressman John Boehner, House Republican Leader. (Applause.) Senator John Ensign, the Chairman of the NRSC -- (applause) -- who, by the way, brought his son, Michael. Congressman Tom Cole, Chairman of the NRCC. (Applause.) A man who deserves a lot of credit, along with Jeb, for tonight's success, my friend from the state of Utah, Senator Orrin Hatch. (Applause.) I thank the RNC Chairman, Mike Duncan; all those here at the head table for their leadership in making this an incredibly successful event.

Most of all I want to thank you all for coming, for giving of your time and your money to help us achieve a big victory in November of 2008. (Applause.)

This is my eighth President's Dinner -- also known as my last dinner before mandatory retirement. (Laughter.) I can't say for sure what I'm going to be doing at this time next year -- I suspect I'll be in Crawford, watching the Rangers on TV. But I know what you'll be doing -- you'll be holding this dinner in honor of a new guest: President John McCain. (Applause.)

I know John McCain well. I have worked with him, and I have run against him. Take it from me: It's better to have him on your side.

The stakes in this election are high. I know the pressures of the Oval Office -- the daily intelligence briefings, the unexpected challenges, and the tough decisions that can only be made at the President's desk. In trying times, America needs a President who has been tested and will not flinch. We need a President who has the experience and judgment to do what is right, even when it is not easy. We need a President who knows what it takes to defeat our enemies. And this year, there is only one man who has shown those qualities of leadership -- and that man is John McCain. (Applause.)

Sending John to the White House is a great goal, but it's not our only goal. As President, he's going to need strong conservative allies on Capitol Hill. And that means we need to put the House and the Senate back where they belong -- into Republican hands. (Applause.) And I appreciate you coming tonight to see that is exactly what happens.

You know, this election season is just beginning. The real campaign will be in the fall. And the American people will take the measure of the candidates running and their vision for the future. And when they do, they're going to find some big differences between our parties. On issues that matter the most -- from taxes and spending, to confirming good judges and building a culture of life, to protecting our people and winning the war on terror -- the American people will have a clear choice. And after the speeches and the debates and when the American people focus on what matters to their future, they're going to send Republican candidates to the House, Republican candidates to the Senate, and John McCain to the White House. (Applause.)

This November, the American people are going to have a clear choice when it comes to taxes and spending.

Republicans believe American families can spend their money far better than the federal government can. We've restrained spending in Washington, D.C. We delivered the largest tax cut since Ronald Reagan was the President of the United States. (Applause.) We cut taxes for married couples. We cut taxes for families with children. We cut taxes for small businesses. We cut taxes on dividends and capital gains. We put the death tax on the road to extinction. We eliminated income taxes for nearly 5 million families in the lowest tax bracket. And as a result, the American people have more money in their pocket and that is the way it should be. (Applause.)

Our opponents take a different view. The Democratically-controlled Congress refuses to make the tax relief permanent. And when tax relief expires, every income tax rate in America will go up. The marriage penalty will return in full force. The child tax credit will be cut in half. Taxes on capital gains and dividends will increase significantly. The death tax will return to life. A typical family of four with an income of $40,000 will face a tax increase of more than $2,000. At a time when the American people are struggling with high food [prices], high gas prices, and economic uncertainty, the absolute last thing they need is a tax increase. (Applause.) In order to make sure that doesn't happen the American people need to elect a Congress and a President that will make the tax relief permanent. (Applause.)

There's a reason why the Democrats want to raise taxes -- they need more money to pay for all the new spending they have in mind. When the Democrats campaigned in 2006, they promised fiscal responsibility. But when they took control of the Congress, they tried to go on a spending spree and stick the American people with the tab. Over the past 17 months, Democrats in Congress have routinely filed legislation with excessive spending. But there was an important thing that stood between them and the American people paying more in taxes, and it's called a veto pen. (Applause.)

You know, when it comes to taxes and spending, our opponents offer a lot of soothing words. But keep this in mind: While their talk may be cheap, their agenda isn't. And here's the bottom line: If you want a bigger tax bill and bigger government, put the Democrats in charge of both the White House and Capitol Hill. But if you want to keep your taxes low and stop wasteful spending, elect John McCain and a Republican Congress. (Applause.)

This November, the American people will have a clear choice when it comes to confirming good judges and building a culture of life. Republicans aspire to build a society where every human being is welcomed in life and protected in law. We've funded crisis pregnancy programs and supported parental notification laws. We outlawed the cruel practice of partial birth abortion. We defended this good law all the way to Supreme Court -- and we won. (Applause.)

This victory shows how important it is to put good judges on the bench. Republicans have a clear view of the role of courts in our democracy. We believe that unelected judges should strictly interpret the law, and not legislate from the bench. I've nominated and Congress has confirmed good judges, including the two newest members of the Supreme Court -- Justice Sam Alito and Chief Justice John Roberts. (Applause.)

Our opponents have a different view. There's no clearer illustration of their differences in our judicial philosophies than this: John McCain voted to confirm these eminently qualified Supreme Court justices. His opponent voted against them.

We received a fresh reminder of the importance of the courts last week. A bare majority of five Supreme Court justices overturned a bipartisan law that the United States Congress passed and I signed to deliver justice to detainees at Guantanamo Bay. With this decision, hardened terrorists -- hardened foreign terrorists now enjoy certain legal rights previously reserved for American citizens. This is precisely the kind of judicial activism that frustrates the American people. And the best way to change it is to put Republicans in charge in the Senate and John McCain in the White House. (Applause.)

This November, the American people will have a clear choice when it comes to protecting our country and winning the war on terror.

Republicans believe that our most solemn duty is to protect the American people. Since September the 11th, 2001, we have worked day and night to stop another attack on our homeland. Here at home, we've strengthened our defenses, reformed our intelligence community, and launched a new program to monitor terrorist communications. Around the world, we have gone on the offense against the terrorists, we've advanced freedom as the great alternative to the ideology of hatred and violence. In a time of war we need a President who understands that we must defeat the enemy overseas so we do not have to face them here at home -- (applause) -- and that man is John McCain. (Applause.)

In Afghanistan, we destroyed al Qaeda training camps and removed the Taliban from power. And today we're helping a democratic society take root -- ensuring that Afghanistan will never again be a safe haven for the terrorists planning an attack on America.

And in Iraq we removed the dangerous regime of Saddam Hussein. Removing Saddam Hussein was the right decision at the time, and it is the right decision today. (Applause.) Early last year, when the situation in Iraq was deteriorating, we launched what's called the surge. And since the surge, violence in Iraq has dropped. Civilian deaths and sectarian killings are down. And political and economic progress is taking place. A democracy is taking root where the tyrant once ruled. In Iraq and Afghanistan and around the world, our men and women in uniform are performing with skill and honor -- and our country needs a Commander-in-Chief who will respect and fully support the United States military, and that man is John McCain. (Applause.)

The war on terror is the great challenge of our time. And on this vital issue, the Democratic Party has repeatedly shown it would take America down the wrong direction. Democratic leaders in Congress have yet to renew a surveillance law that our intelligence professionals say is critical to protecting America. They tried to shut down a CIA program -- CIA program for questioning terrorists, a program that has saved American lives. They've repeatedly delayed funding for our troops in the field.

On Iraq, the Democrats declared the surge a failure before it began. And now that the surge has turned the situation around, they still call for retreat. The other side talks a lot about "hope," and that sums up their Iraq policy pretty well: They want to retreat from Iraq and hope nothing bad happens. But wishful thinking is no way to fight a war and to protect the American people. (Applause.) Leaving Iraq before the job is done would embolden our enemies and endanger our citizens. The only path to victory is to support the Iraqi people, support our commanders, support our troops, support Republicans for Congress, and elect John McCain as the next Commander-in-Chief. (Applause.)

Over the next few months of this campaign, you're going to hear a lot of talk about change. Democrats say they're the party of change. There was a time when they believed that low taxes were the path to growth and opportunity -- but they've changed. There was a time when they believed in common-sense American values -- but they have changed. There was a time when they believed that America should pay any price and bear any burden in the defense of liberty -- but they have changed. These days, if you want to know how a Democrat in Congress is going to vote tomorrow, just visit the website of MoveOn.Org today. (Applause.)

This is change alright, but it's not the kind of change the American people want. Americans want change that makes their life better and our country safer -- and that requires changing the party in control of the United States Congress. (Applause.) So with your efforts and with your hard work, I am confident that the American people will send Republicans to Congress -- and to send our friend John McCain to the White House. (Applause.)

This is the final time I'm going to speak to this event. And when I ran for President eight years ago, as Jeb mentioned, I promised to uphold the dignity and honor of this office. And to the best of my ability, I have tried to live up to that promise. (Applause.) Next January I will leave with confidence in our country's course -- and the proud work we have done together.

We've worked together to make our country safer and to spread prosperity throughout our land. I've been strengthened by your support and lifted up by your prayers. I've also been blessed to share these years with a strong and loving family, including a fabulous woman named Laura Bush. (Applause.) I believe she's the finest First Lady in our nation's history. (Applause.) Just don't tell Mother. (Laughter.) And in this job, I have had no finer example of character, decency, and integrity than the first man to be called President George Bush. (Applause.)

This isn't a farewell speech because we've got a lot to do this year. I want you to know my energy is up, my spirits are high, and I am going to finish this job strong. (Applause.) So with confidence in our vision, strong belief in our philosophy, faith in our values, let us go forward, reclaim the Congress, and elect John McCain as President in 2008.

God bless you, and God bless America. (Applause.)

END 7:47 P.M. EDT