United States President George W. Bush delivered his annual State of the Union Address on Tuesday.
Bush opened the speech to Congress by honoring Coretta Scott King, wife of civil rights activist Martin Luther King Jr., who died on Monday.  
Bush emphatically claimed that terrorism was still a serious threat, citing the 2004 Beslan school hostage crisis.  Bush also urged what he felt was the need for American troops to continue their presence in Iraq, to ensure what he described as the successful transition of the Iraqi government.
In reference to the victory of Hamas in the recent Palestinian elections, Bush urged its leaders to disarm and recognize Israel as a sovereign state.
Talking about foreign policy, Bush said Iran is held hostage by a clerical elite and that it is not a democracy. He also alleged that Iran has nuclear ambitions, and said the world "must not permit the Iranian regime to gain nuclear weapons." 
Bush outlined an economic plan that he claims would cut the budget deficit in half by 2009, if successful.  Bush said that by cutting over 140 programs that were "performing poorly or not fulfilling essential priorities", that the government would save over US$14 billion. Bush briefly touched on the upcoming problem of Social Security; with baby boomers reaching retirement age, Bush urged Congress to bypass partisan differences in order to save the program. In a rare break from the usual preplanned format of the speech, Bush received applause from Democrats when he announced that "Congress did not act last year on my proposal to save Social Security".
Bush talked about the need for affordable health care.  These plans include expanding the health savings account program, allowing health insurance to be more portable for workers changing jobs.  Bush also urged Congress to support medical liability reform, which he said would help doctors forced out of practice by the high price of insurance.
Bush also introduced an energy plan to reduce oil dependency.  The Advanced Energy Initiative would allocate federal funds for research in clean coal technology, solar and wind energy, and for research in the use of ethanol and hydrogen fuel in vehicles, Bush stated.  The President also described his support of funding "additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks or switch grass."
On the topic of education and jobs, Bush introduced the American Competitiveness Initiative.  This plan would allocate more than $136 billion over the next ten years to increase research in the physical sciences sector, provide job skills training for workers in these areas, and improve the quality of math and science education. He urged Congress to make temporary tax relief permanent. He also mentioned that he would like Congress to pass the power of line-item veto, which was given briefly to President Bill Clinton in 1996, before being declared unconstitutional in 1998 by the Supreme Court, six to three.
Bush closed the address emphatically claiming what he called the historic courage of Americans, and saying that in Iraq, "like Americans before us, we will show that courage and we will finish well."
The Democratic rebuttal, delivered by Virginia governor Tim Kaine, criticized Bush's speech, saying that Bush had failed to uphold his previous promises, and that his administration had caused many of the problems that Bush promised in his address to fix.  Kaine also stated that the Democratic Party had previously introduced many policies similar to Bush's, but these policies had not been supported by Republicans.
In addition to Kaine's speech, a second rebuttal, delivered in Spanish, was given by Los Angeles mayor Antonio Villaraigosa.
Cindy Sheehan, who became an anti-war activist after her son was killed serving in Iraq and gained recognition in 2005 for her protests outside Bush's ranch in Texas, was arrested in the House gallery by Capitol Police Officer Mike Weight about fifteen minutes before the speech. Initial reports claimed that she had attempted to unfurl an anti-war banner; in fact, Sheehan wore a t-shirt with the words, "2,245 dead. How many more?" Sheehan had been invited to the speech by Rep. Lynn Woolsey (D-CA). In contrast, Beverly Young, the wife of Rep. Bill Young (R-FL), was ordered to leave the gallery but not arrested during Bush's speech because she was wearing a shirt with the words, "Support the Troops Defending Our Freedom." Sheehan is charged with unlawful conduct in violation of D.C. Code §10-503.16(b)(7), a misdemeanor prohibiting demonstrations in the Capitol carrying a maximum penalty of six months in jail and a $500 fine. Capitol Grounds Regulations defining the prohibited activities allow "wearing Tee shirts, buttons, or other similar articles of apparel that convey a message."
On Wednesday, Capitol Police dropped charges against Sheehan and apologized for ejecting her and Young. "The officers made a good faith, but mistaken effort to enforce an old unwritten interpretation of the prohibitions about demonstrating in the Capitol," Chief Terrance Gainer said in a statement.

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President Bush delivers 2006 State of the Union Address