Presidential News Conference - Mar 24, 2009

Transcript Text

  • PRESIDENT OBAMA

    At 00:26
    6 minutes

    Please, have a seat.
    Good evening. Before I take questions from the correspondents, I
    want to give everyone who's watching tonight an update on the steps
    we're taking to move this economy from recession to recovery and
    ultimately to prosperity.
    It's important to remember that this crisis didn't happen
    overnight and it didn't result from any one action or decision. It
    took many years and many failures to lead us here, and it will take
    many months and many different solutions to lead us out. There are no
    quick fixes and there are no silver bullets.
    That's why we've put in place a comprehensive strategy designed
    to attack this crisis on all fronts. It's a strategy to create jobs,
    to help responsible homeowners, to restart lending and to grow our
    economy over the long term. And we're beginning to see signs of
    progress.
    The first step we took was to pass a recovery plan to jump-start
    job creation and put money in people's pockets. And this plan's
    already saved the jobs of teachers and police officers. It's creating
    construction jobs to rebuild roads and bridges. And yesterday I met
    with a man whose company is reopening a factory outside of Pittsburgh
    that's rehiring workers to build some of the most energy-efficient
    windows in the world.
    And this plan will provide a tax cut to 95 percent of all working
    families that will appear in people's paychecks by April 1st.
    The second step we took was to launch a plan to stabilize the
    housing market and help responsible homeowners stay in their homes.
    This plan's one reason that mortgage interest rates are now at near-
    historic lows.
    We've already seen a jump in refinancings of mortgages as homeowners
    take advantage of lower rates. And every American should know that up
    to 40 percent of all mortgages are now eligible for refinancing. This
    is the equivalent of another tax cut, and we're also beginning to see
    signs of increased sales and stabilizing home prices for the first
    time in a very long time.
    The third part of our strategy is to restart the flow of credit
    to families and businesses. To that end, we've launched a program
    designed to support the markets for more affordable auto loans,
    student loans and small-business loans -- a program that's already
    securitized more of this lending in the last week than in the last
    four months combined.
    Yesterday, Secretary Geithner announced a new plan that will
    partner government resources with private investment to buy up the
    assets that are preventing our banks from lending money. And we will
    continue to do whatever is necessary in the weeks ahead to ensure the
    banks Americans depend on have the money they need to lend, even if
    the economy gets worse.
    Finally, the most critical part of our strategy is to ensure that
    we do not return to an economic cycle of bubble and bust in this
    country. We know that an economy built on reckless speculation,
    inflated home prices and maxed-out credit cards does not create
    lasting wealth. It creates the illusion of prosperity, and it's
    endangered us all.
    The budget I submitted to Congress will build our economic
    recovery on a stronger foundation so that we don't face another crisis
    like this 10 or 20 years from now. We invest in the renewable sources
    of energy that will lead to new jobs, new businesses and less
    dependence on foreign oil. We invest in our schools and our teachers,
    so that our children have the skills they need to compete with any
    workers in the world.
    We invest in reform that will bring down the cost of health care for
    families, businesses and our government.
    And in this budget, we have -- we have to make the tough choices
    necessary to cut our deficit in half by the end of my first term, even
    under the most pessimistic estimates.
    At the end of the day, the best way to bring our deficit down in
    the long run is not with a budget that continues the very same
    policies that have led us to a narrow prosperity and massive debt.
    It's with a budget that leads to broad economic growth by moving from
    an era of borrow-and-spend to one where we save and invest.
    And that's why clean-energy jobs and businesses will do -- all
    across America. That's what a highly skilled workforce can do all
    across America. That's what an efficient health-care system that
    controls costs and entitlements like Medicare and Medicaid will do.
    That's why this budget is inseparable from this recovery, because it
    is what lays the foundation for a secure and lasting prosperity.
    The road to that prosperity is still long, and we will hit our
    share of bumps and setbacks before it ends. But we must remember that
    we can get there if we travel that road as one nation, as one people.
    You know, there was a lot of outrage and finger-pointing last
    week, and much of it is is understandable. I'm as angry as anybody
    about those bonuses that went to some of the very same individuals who
    brought our financial system to its knees, partly because it's yet
    another symptom of the culture that led us to this point.
    But one of the most important lessons to learn from this crisis
    is that our economy only works if we recognize that we're all in this
    together, that we all have responsibilities to each other and to our
    country.
    Bankers and executives on Wall Street need to realize that enriching
    themselves on the taxpayer's dime is inexcusable, that the days of
    outsize rewards and reckless speculation that puts us all at risk have
    to be over. At the same time, the rest of us can't afford to demonize
    every investor or entrepreneur who seeks to make a profit. That drive
    is what has always fueled our prosperity, and it is what will
    ultimately get these banks lending and our economy moving once more.
    We'll recover from this recession, but it will take time; it will
    take patience; and it will take an understanding that when we all work
    together, when each of us looks beyond our own short-term interest to
    the wider set of obligations we have towards each other, that's when
    we succeed. That's when we prosper. And that's what is needed right
    now.
    So let's look towards the future with a renewed sense of common
    purpose, a renewed determination, and, most importantly, renewed
    confidence that a better day will come.
    All right. With that, let me take some questions. And I've got
    a list here; let's start off with Jennifer Loven, AP.

  • Jennifer Loven

    At 06:37
    27 seconds

    Thank you, Mr. President.
    Your Treasury secretary and the Fed chair have been -- were on
    Capitol Hill today, asking for this new authority that you want to
    regulate big, complex financial institutions. But given the problems
    that the financial bailout program has had so far -- banks not wanting
    to talk about how they're spending the money, the AIG bonuses that you
    mentioned -- why do you think the public should sign on for another
    new, sweeping authority for the government to take over companies,
    essentially?

  • PRESIDENT OBAMA

    At 07:04
    2 minutes

    Well, keep in mind that it is precisely because
    of the lack of this authority that the AIG situation has gotten worse.
    Now, understand that AIG's not a bank, it's an insurance company. If
    it were a bank and it had effectively collapsed, then the FDIC could
    step in, as it does with a whole host of banks -- as it did with
    IndyMac -- and in a structured way renegotiate contracts, get rid of
    bad assets, strengthen capital requirements, resell it on the private
    marketplace.
    So we've got a regular mechanism whereby we deal with FDIC-insured
    banks.
    We don't have that same capacity with an institution like AIG,
    and that's part of the reason why it has proved so problematic.
    I think a lot of people understandably say: Well, if we're
    putting all this money in there, and if it's such a big systemic risk
    to allow AIG to liquidate, why is it that we can't restructure some of
    these contracts? Why can't we do some of the things that need to be
    done in a more orderly way? And the reason is -- is because we have
    not obtained this authority.
    We should have obtained it much earlier, so that any institution that
    poses a systemic risk that could bring down the financial system we
    can handle, and we can do it in an orderly fashion that quarantines it
    from other institutions. We don't have that power right now. That's
    what Secretary Geithner was talking about.
    And I think that there's going to be strong support from the
    American people and from Congress to provide that authority so that we
    don't find ourselves in a situation where we've got to choose between
    either allowing an enormous institution like AIG, which is not just
    insuring other banks but is also insuring pension funds and
    potentially putting people's 401(k)s at risk if it goes under --
    that's one choice -- and then the other choice is just to allow them
    to take taxpayer money without the kind of conditions that we'd like
    to see on it. So that's why I think the authority's so important.

  • Jennifer Loven

    At 09:08
    3 seconds

    But why should the public trust the government to handle
    that authority well?

  • PRESIDENT OBAMA

    At 09:11
    21 seconds

    Well, as I said before, if you look at how the
    FDIC has handled a situation like IndyBank, for example, it actually
    does these kinds of resolutions effectively when it's got the tools to
    do it.
    We don't have the tools right now.
    Okay. Chuck Todd.

  • Chuck Todd

    At 09:32
    33 seconds

    Thank you, Mr. President. Some have compared this
    financial crisis to a war, and in times of war, past presidents have
    called for some form of sacrifice. Some of your programs, whether for
    Main Street or Wall Street, have actually cushioned the blow for those
    that were irresponsible during this -- during this economic period of
    prosperity or supposed prosperity that you were talking about.
    Why, given this new era of responsibility that you're asking for,
    why haven't you asked for something specific that the public should be
    sacrificing to participate in this economic recovery?

  • PRESIDENT OBAMA

    At 10:05
    2 minutes

    Well, let me -- let me take that question in a
    couple -- couple of phases. First of all, it's not true that we have
    not asked sacrifice from people who are getting taxpayer money. We
    have imposed some very stiff conditions. The only problem that we've
    had so far are contracts that were put in place before we took over.
    But moving forward, anybody -- any bank, for example, that is
    receiving capital from the taxpayers is going to have to have some
    very strict conditions in terms of how it pays out its executives, how
    it pays out dividend, how it's reporting its lending practices.
    So we want to make sure that there's some stiff conditions in place.
    With respect to the American people, I think folks are
    sacrificing left and right. They -- you've got a lot of parents who
    are cutting back on everything to make sure that their kids can still
    go to college. You've got workers who are deciding to cut an entire
    day and entire day's worth of pay so that their fellow co-workers
    aren't laid off. I think that across the board people are making
    adjustments, large and small, to accommodate the fact that we're in
    very difficult times right now.
    What I've said here in Washington is that we've got to make some
    tough choices. We got to make some tough budgetary choices. What we
    can't do, though, is sacrifice long-term growth investments that are
    critical to the future. And that's why my budget focuses on health
    care, energy, education -- the kinds of things that can build a
    foundation for long-term economic growth as opposed to the fleeting
    prosperity that we've seen over the last several years. I mean, when
    you have an economy in which the majority of growth is coming from the
    financial sector -- when AIG selling a derivative is counted as an
    increase in the gross domedic -- domestic product, then that's not a
    model for sustainable economic growth.
    And what we have to do is invest in those things that will allow the
    American people's capacity for ingenuity and innovation, their ability
    to take risks but make sure that those risks are grounded in good
    products and good services that they believe they can market to the
    rest of the country, that those models of economic growth are what
    we're promoting, and that's what I think our budget does.

  • Chuck Todd

    At 12:50
    10 seconds

    But you don't think there should be a specific call to
    action that you want the American -- I mean, this is -- you've
    described this as an economic crisis like nothing we have seen since
    the Great Depression.

  • PRESIDENT OBAMA

    At 13:00
    1 minute

    Well, as I said, the American people are making
    a host of sacrifices in their individual lives. We are going through
    an extraordinary crisis, but we believe that taken -- if you take the
    steps that we've already taken with respect to housing, with respect
    to small businesses, if you look at what we're doing in terms of
    increasing liquidity in the financial system, that the steps that
    we're taking can actually stabilize the economy and get it moving
    again.
    What I'm looking from the American people to do is that they are
    going to be doing what they've always done, which is working hard,
    looking after their families, making sure that despite the economic
    hard times that they're still contributing to their community, that
    they're still participating in volunteer activities, that they are
    paying attention to the debates that are going on in Washington.
    And the budgets that we're putting forward and some of the decisions
    that we're having to make are going to be tough decisions, and we're
    going to need the support of the American people, and that's part of
    why what I've tried to do is to be out front as much as possible,
    explaining in very clear terms exactly what we're doing.
    Jake?

  • Jake Tapper

    At 14:22
    32 seconds

    Thank you, Mr. President. Right now on Capitol Hill,
    Senate Democrats are writing a budget, and according to press accounts
    and their own statements, they're not including the middle-class tax
    cut that you include in the stimulus. They're talking about phasing
    that out. They're not including the cap-and-trade that you have in
    your budget, and they're not including other measures.
    I know when you outlined your four priorities over the weekend, a
    number of these things were not in there. Will you sign a budget if
    it does not contain a middle-class tax cut, does not contain cap-and-
    trade?

  • PRESIDENT OBAMA

    At 14:54
    2 minutes

    Well, I've emphasized repeatedly what I expect
    out of this budget. I expect that there's serious efforts at health
    care reform, and that we are driving down costs for families and
    businesses, and ultimately for the federal and state governments that
    are going to be broke if we continue on the current path.
    I've said that we've got to have a serious energy policy that
    frees ourselves from dependence on foreign oil and makes clean energy
    the profitable kind of energy. We've got to invest in education, K
    through 12 and beyond, to upgrade the skills of the American worker so
    we can compete in -- in the international economy. And I've said that
    we've got to start driving our deficit numbers down.
    Now, we never expected, when we printed out our budget, that they
    would simply Xerox it and vote on it. We assume that it has to go
    through the legislative process. I have not yet seen the final
    product coming out of the Senate or the House, and we're in constant
    conversations with them. I am confident that the budget we put
    forward will have those principles in place.
    When it comes to the middle-class tax cut, we already had that in
    the recovery. We know that that's going to be in place for at least
    the next two years. We had identified a specific way to pay for it.
    If Congress has better ideas in terms of how to pay for it, then we're
    happy to listen.
    When it comes to cap-and-trade, the broader principle is that
    we've got to move to a new energy era. And that means moving away
    from polluting energy sources towards cleaner energy sources.
    That is a potential engine for economic growth.
    I think cap-and-trade is the best way, from my perspective, to
    achieve some of those gains, because what it does is it starts pricing
    the pollution that's being sent into the atmosphere.
    The way it's structured, it has to take into account regional
    differences. It has to protect consumers from huge spikes in
    electricity prices. So there are a -- a lot of technical issues that
    are going to have to be sorted through.
    Our point in the budget is, let's get started now. We can't
    wait. And my expectation is that the energy committees, or other
    relevant committees in both the House and the Senate, are going to be
    moving forward a strong energy package. It'll be authorized. We'll
    get it done. And I will sign it. Okay?

  • Jake Tapper

    At 17:25
    3 seconds

    So is that a yes, sir? You're willing to sign a budget
    that doesn't have those two provisions?

  • PRESIDENT OBAMA

    At 17:28
    29 seconds

    No; I -- what I said was -- is I haven't seen
    yet what provisions are in there. The bottom line is -- is that I
    want to see health care, energy, education and serious efforts to
    reduce our budget deficit.
    And there are going to be a lot of details that are still being
    worked out. But I have confidence that we're going to be able to get
    a budget done that's reflective of what needs to happen in order to
    make sure that America grows. Okay?
    Chip Reid.

  • Chip Reid

    At 17:57
    35 seconds

    Thank you, Mr. President.
    At both of your town hall meetings in California last week, you said,
    quote, "I didn't run for president to pass on our problems to the next
    generation." But under your budget, the debt will increase $7
    trillion over the next 10 years. The Congressional Budget Office says
    $9.3 trillion. And today on Capitol Hill, some Republicans called
    your budget, with all the spending on health care, education and
    environment, the most irresponsible budget in American history.
    Isn't that kind of debt exactly what you were talking about when
    you said passing on our problems to the next generation?

  • PRESIDENT OBAMA

    At 18:32
    3 minutes

    First of all, I suspect that some of those
    Republican critics have a short memory, because as I recall, I'm
    inheriting a $1.3 trillion deficit, annual deficit, from them. That
    would be point number one.
    Point number two. Both under our estimates and under the CBO
    estimates, both -- the most conservative estimates out there, we drive
    down the deficit over the first five years of our budget. The deficit
    is cut in half. And folks aren't disputing that.
    Where the dispute comes in is what happens in a whole bunch of
    out years. And the main difference between the budget that we
    presented and the budget that came out of Congressional Budget Office
    is assumptions about growth.
    They're assuming a growth rate of 2.2. We're assuming a growth rate
    of 2.6. Those small differences end up adding up to a lot of money.
    Our assumptions are perfectly consistent with what blue chip
    forecasters out there are saying.
    Now, none of us know exactly what's going to happen six or eight
    or 10 years from now. Here's what I do know: If we don't tackle
    energy, if we don't improve our education system, if we don't drive
    down the costs of health care, if we're not making serious investments
    in science and technology and our infrastructure, then we won't grow
    2.6 percent; we won't grow 2.2 percent. We won't grow.
    And so what we've said is let's make the investments that ensure
    that we meet our growth targets, that put us on a pathway to growth,
    as opposed to a situation in which we're not making those investments
    and we still have trillion-dollar deficits.
    And there's a interesting reason why some of these critics
    haven't put out their own budget. I mean, we haven't seen an
    alternative budget out of them. And the reason is because they know
    that, in fact, the biggest driver of long-term deficits are the huge
    health care costs that we've got out here that we're going to have to
    tackle.
    And we -- that if we don't deal with some of the structural problems
    in our deficit, ones that were here long before I got here, then we're
    going to continue to see some of the problems in those out years.
    And so what we're trying to emphasize is let's make sure that
    we're making the investments that we need to grow, to meet those
    growth targets. At the same time, we're still reducing the deficit by
    a couple of trillion dollars. We are cutting out wasteful spending in
    areas like Medicare. We're -- we're changing procurement practices
    when it comes to the Pentagon budget. We are looking at social-
    service programs and education programs that don't work and eliminate
    them. And we will continue to go line-by-line through this budget,
    and where we find programs that don't work we will eliminate them.
    But it is -- it is going to be a(n) impossible task for us to
    balance our budget if we're not taking on rising health care costs.
    And it's going to be an impossible task to balance our budget or even
    approximate it if we are not boosting our growth rates. And -- and
    that's why our budget focuses on the investments we need to make that
    happen.

  • Chip Reid

    At 22:15
    15 seconds

    But even under your budget -- as you said, over the next
    four or five years, you're going to cut the deficit in half. Then,
    after that, six years in a row it goes up, up, up.
    If you're making all these long-term structural cuts --

  • PRESIDENT OBAMA

    At 22:30

    Right.

  • Chip Reid

    At 22:30
    1 second

    -- why does it continue to go up in the out years?

  • PRESIDENT OBAMA

    At 22:31
    2 minutes

    Well, look. It is going to take a whole host
    of adjustments, and we couldn't reflect all of those adjustments in
    this budget.
    Let me give you an example. There's been a lot of talk about
    entitlements and Medicare and Medicaid. The biggest problem we have
    long term is Medicare and Medicaid, but whatever reforms we initiate
    on that front -- and we're very serious about working on a bipartisan
    basis to reduce those deficits -- or reduce those costs -- you're not
    going to see those savings reflected until much later.
    And so a -- a budget is a snapshot of what we can get done right
    now, understanding that eight, 10 years from now we will have had a
    whole series of new budgets. And we're going to have to make
    additional adjustments. And once we get out of this current economic
    crisis, then it's going to be absolutely important for us to take
    another look and say, "Are we growing as fast as we need to grow? Are
    there further cuts that we need to make? What other adjustments are
    -- is it going to take for us to have a sustainable budget level?"
    But keep in mind -- just to give one other example, as a
    percentage of gross domestic product, we are reducing non-Defense
    discretionary spending to its lowest level since the '60s -- lower
    than it was under Reagan, lower than it was under Clinton, lower than
    it was under Bush or both Bushes.
    And so if we're growing, if we are doing what's necessary to
    create new businesses and to expand the economy, and we are making
    sure that we're eliminating some of these programs that aren't
    working, then over time that gap can close.
    But I'm -- look, I'm not going to lie to you. It is tough. As I
    said, that's why the critics tend to criticize, but they don't offer
    an alternative budget, because even if we were not doing health care,
    we were not doing energy, we were not doing education, they'd still
    have a whole bunch of problems in those out years, according to CBO
    projections. The only difference would -- is that we will not have
    invested in what's necessary to make this economy grow.
    Is Lourdes here, from Univision? (Let's see ?).

  • Lourdes Meluza

    At 25:01
    31 seconds

    Thank you, Mr. President. Today your administration
    presented a plan to help curb the violence in Mexico and also to
    control any or prevent any spillover of the violence into the United
    States. Do you consider the situation now a national security threat?
    And do you believe that it could require sending national troops to
    the border? Governor Perry of Texas has said that you still need more
    troops and more agents. How do you respond to that?

  • PRESIDENT OBAMA

    At 25:32
    1 minute

    Well, first of all let's focus on what we did
    today. It's very significant. We are sending millions of dollars in
    additional equipment to provide more effective surveillance. We are
    providing hundreds of additional personnel that can help control the
    border, deal with customs issues. We are coordinating very
    effectively with the Mexican government and President Calderon, who
    has taken on a(n) extraordinarily difficult task dealing with these
    drug cartels that have gotten completely out of hand.
    And so the steps that we've taken are designed to make sure that
    the border communities in the United States are protected and you're
    not seeing a spillover of violence, and that we are helping the
    Mexican government deal with a very challenging situation.
    Now, we are going to continue to monitor the situation. And if
    the steps that we've taken do not get the job done, then we will do
    more.
    One last point that I want to make about this. As I said,
    President Calderon has been very courageous in taking on these drug
    cartels.
    We've got to also take some steps. Even as he is doing more to
    deal with the drug cartels sending drugs into the United States, we
    need to do more to make sure that illegal guns and cash aren't flowing
    back to these cartels. That's part of what's financing their
    operations. That's part of what's arming them. That's what makes
    them so dangerous. And this is something that we take very seriously,
    and we're going to continue to work on diligently in the months to
    come.
    Kevin Baron, Stars and Stripes. Is Kevin here? There you go.

  • Kevin Baron

    At 27:18
    12 seconds

    Mr. President, where do you plan to find savings in the
    Defense and Veterans Administration's budgets when so many items that
    seem destined for the chopping block are politically untenable,
    perhaps?

  • PRESIDENT OBAMA

    At 27:30
    2 seconds

    I'm sorry, so many?

  • Kevin Baron

    At 27:32
    11 seconds

    When so many items that may be destined for the chopping
    block seem politically untenable, from major weapons systems -- as you
    mentioned, procurement -- to wounded warrior care costs, or increased
    operations on Afghanistan, or the size of the military itself.

  • PRESIDENT OBAMA

    At 27:43
    3 minutes

    Well, a couple of -- a couple of points I want
    to make.
    The budget that we've put forward reflects the largest increase
    in veterans funding in 30 years. That's the right thing to do. Chuck
    asked earlier about sacrifices. I -- I don't think anybody doubts the
    extraordinary sacrifices that men and women in uniform have already
    made. And when they come home, then they have earned the benefits
    that they receive.
    And unfortunately, over the last several years, all too often the VA
    has been under-resourced when it comes to dealing with things like
    post-traumatic stress disorder or traumatic brain injury, dealing with
    some of the backlogs in admission to VA hospitals.
    So there are a whole host of veterans' issues that I think every
    American wants to see properly funded, and that's what's reflected in
    our budget.
    Where the savings should come in -- and I've been working with
    Secretary Gates on this and will be detailing it more in the weeks to
    come -- is how do we reform our procurement system so that it keeps
    America safe and we're not wasting taxpayer dollars? And there is
    uniform acknowledgment that the procurement system right now doesn't
    work. That's not just my opinion; that's John McCain's opinion;
    that's Carl Levin's opinion.
    There are a whole host of people who are students of the
    procurement process that will say if you've got a whole range of
    billion-dollar, multi-billion-dollar systems that are -- where we're
    seeing cost overruns of 30 percent or 40 percent or 50 percent, and
    then still don't perform the way they're supposed to or are providing
    our troops with the kinds of tools that they need to succeed on their
    missions, then we've got a problem.
    Now, I think everybody in this town knows that the politics of
    changing procurement is tough, because, you know, lobbyists are very
    active in this area. You know, contractors are very good at
    dispersing the jobs in plants in the Defense Department widely.
    And so what we have to do is to go through this process very
    carefully, be more disciplined than we've been in the last several
    years. As I've said, we've already identified, potentially, $40
    billion in savings, just by some of the procurement reforms that are
    pretty apparent to a lot of -- a lot of critics out there. And we are
    going to continue to find savings in a way that allows us to put the
    resources where they're needed but to make sure that we're not simply
    fattening defense contractors.
    One last point. In order for us to get a handle on these costs,
    it's also important that we are honest in what these costs are. And
    that's why it was so important for us to acknowledge the true costs of
    the Iraq war and the Afghan war, because if -- if those costs are
    somehow off the books and we're not thinking about them, then it's
    hard for us to make some of the tough choices that need to be made.
    Okay. Ed Henry. Where's Ed? There he is.

  • Ed Henry

    At 31:15
    48 seconds

    Thank you, Mr. President. You spoke again at the top about
    your anger about AIG. You've been saying that for days now. But why
    is it that it seems Andrew Cuomo seems to be, in New York, getting
    more actual action on it? And when you and Secretary Geithner first
    learned about this, 10 days, two weeks ago, you didn't go public
    immediately with that outrage. You waited a few days, and then you
    went public after you realized Secretary Geithner really had no legal
    avenue to stop it.
    And more broadly -- I just want to follow up on Chip and Jake --
    you've been very critical of President Bush doubling the national
    debt. And to be fair, it's not just Republicans hitting you.
    Democrat Kent Conrad, as you know, said, quote, "When I look at this
    budget, I see the debt doubling again."
    You keep saying that you've inherited a big fiscal mess. Do you
    worry, though, that your daughters, not to mention the next president,
    will be inheriting an even bigger fiscal mess if the spending goes out
    of control?

  • PRESIDENT OBAMA

    At 32:03
    2 minutes

    Of course I do, Ed, which is why we're doing
    everything we can to reduce that deficit. Look, if this were easy,
    then we would have already had it done and the budget would have been
    voted on and everybody could go home. This is hard. And the reason
    it's hard is because we've accumulated a structural deficit that's
    going to take a long time, and we're not going to be able to do it
    next year or the year after or three years from now.
    What we have to do is bend the curve on these deficit projections, and
    the best way for us to do that is to reduce health care costs. That's
    not just my opinion; that's the opinion of almost every single person
    who has looked at our long-term fiscal situation.
    Now, how do we -- how are we going to reduce health care costs?
    Because the problem is not just in government-run programs, the
    problem is in the private sector as well. It's experienced by
    families. It's experienced by businesses. And so what we've said is,
    look, let's invest in health information technologies, let's invest in
    preventive care, let's invest in mechanisms that look at who's doing a
    better job controlling costs while producing good-quality outcomes in
    various states, and let's reimburse on the basis of improved quality
    as opposed to simply how many procedures you're doing. Let's do a
    whole host of things, some of which cost money on the front end but
    offer the prospect of reducing costs on the back end.
    Now, the alternative is to stand pat, and to simply say we are
    just going to not invest in health care; we're not going to take on
    energy, we'll wait until the next time that gas gets to $4 a gallon;
    we will not improve our schools, and we'll allow China or India or
    other countries to lap our young people in terms of their performance;
    we will settle on lower growth rates, and we will continue to contract
    both as an economy and our ability to -- to provide a better life for
    our kids.
    That I don't think is the better option.
    Now, have -- am I completely satisfied with all the work that
    needs to be done on deficits? No. That's why I convened a fiscal
    responsibility summit, started in this room, to start looking at
    entitlements and to start looking at the big drivers of costs over the
    long term. Not all of those are reflected in our budget, partly
    because the savings we anticipate would be coming in years outside of
    the 10-year budget cycle that we're talking about. Okay?

  • Ed Henry

    At 35:01
    4 seconds

    So on AIG, why did you wait -- why did you wait days to
    come out and express that outrage?

  • PRESIDENT OBAMA

    At 35:05

    I --

  • Ed Henry

    At 35:05
    7 seconds

    It seems like the action is coming out of New York in the
    attorney general's office. It took you days to come public with
    Secretary Geithner and say, look, we're outraged. Why did it take so
    long?

  • PRESIDENT OBAMA

    At 35:12
    7 seconds

    Well, it took us a couple of days because I
    like to know what I'm talking about before I speak. (Laughter.) All
    right?

  • Ed Henry

    At 35:19
    1 second

    Secretary Geithner alluded --

  • PRESIDENT OBAMA

    At 35:20
    2 seconds

    Major?

  • Major Garrett

    At 35:22
    1 second

    (Off mike.)

  • PRESIDENT OBAMA

    At 35:23
    3 seconds

    Yeah.

  • Major Garrett

    At 35:26
    38 seconds

    Good evening, Mr. President. Thank you. Taking this
    economic debate a bit globally, senior Chinese officials have publicly
    expressed an interest in an international currency. This is described
    by Chinese specialists as a sign that they are less confident than
    they used to be in the value and the reliability of the U.S. dollar.
    European countries have resisted your calls to spend more on economic
    stimulus.
    I wonder, sir, as a candidate who ran concerned about the image
    of the United States globally, how comfortable you are with the
    Chinese government, run by communists, less confident than they used
    to be in the U.S. dollar, and European governments, some of the
    center-left, some of them socialist, who say you're asking them to spend
    too much?

  • PRESIDENT OBAMA

    At 36:04
    2 minutes

    Well, first of all, I haven't asked them to do
    anything. What I've suggested is -- is that all of us are going to
    have to take steps in order to lift the economy. We don't want a
    situation in which some countries are making extraordinary efforts and
    other countries aren't, with the hope that somehow the countries that
    are making those important steps lift everybody up.
    And so somebody's got to take leadership. It's not just me, by
    the way. I was with Kevin Rudd, prime minister of Australia, today,
    who was very forceful in suggesting that countries around the world,
    those with the capacity to do so, take the steps that are needed to
    fill this enormous hole in global demand. Gordon Brown, when he came
    to visit me, said the exact same thing.
    So the goal at the G-20 summit, I think, is to do a couple of
    things. Number one, say to all countries: Let's do what's necessary
    in order to create jobs and to get the economy moving again. Let's
    avoid steps that could result in protectionism, that would further
    contract global trade. Let's focus on how are we going to move our
    regulatory process forward in order so that we do not see the kinds of
    systemic breakdowns that we've already seen.
    And that -- that means not just dealing with banks, but also some of
    the other financial flows that are out here that are currently
    unregulated. We've got to update regulations that date back to the
    1930s, and we're going to have to do some coordination with other
    countries in order to accomplish that.
    As far as confidence in the U.S. economy or the dollar, I would
    just point out that the dollar is extraordinarily strong right now.
    And the reason the dollar is strong right now is because investors
    consider the United States the strongest economy in the world, with
    the most stable political system in the world. So you don't have to
    take my word for it. I think that there is a great deal of confidence
    that ultimately, although we are going through a rough patch, that the
    prospects for the world economy are very, very strong.
    And -- and last point I would make in terms of changing America's
    image in the world, Garrett, I -- you know, I haven't looked at the
    latest polling around the world, but I think the -- it's -- I think
    it's fair to say that the response that people have had to our
    administration and the steps we have taken are ones that are restoring
    a sense of confidence and the ability of the United States to assert
    global leadership.

  • Major Garrett

    At 38:48
    1 second

    Is there a need --

  • PRESIDENT OBAMA

    At 38:49
    1 second

    That will just strengthen -- excuse me?

  • Major Garrett

    At 38:50
    1 second

    Is there a need for a global currency?

  • PRESIDENT OBAMA

    At 38:51
    7 seconds

    I don't believe that there's a need for a
    global currency.
    Mike Allen, Politico. Hi, Mike.

  • Mike Allen

    At 38:58
    13 seconds

    Mr. President, are you -- (takes mic) -- thank you. Thank
    you, Mr. President. Are you reconsidering your plan to cut the
    interest-rate deduction for mortgages and for charities? And do you
    regret having proposed that in the first place?

  • PRESIDENT OBAMA

    At 39:11
    2 minutes

    No, I think it's -- I think it's the right
    thing to do.
    Where we've got to make some difficult choices -- here's what we
    did with respect to tax policy. What we said was that over the last
    decade, the average worker, the average family have seen their wages
    and incomes flat. Even at times where supposedly we were in the
    middle of an economic boom, as a practical matter their incomes didn't
    go up. And so (what/well ?) we said -- let's give them a tax cut.
    Let's give them some relief, some help -- 95 percent of American
    families.
    Now, for the top 5 percent, they're the ones who typically saw
    huge gains in their income. I -- I fall in that category. And what
    we've said is, for those folks, let's not renew the Bush tax cuts. So
    let's go back to the rates that existed back in -- during the Clinton
    era, when wealthy people were still wealthy and doing just fine. And
    let's look at the level at which people can itemize their deductions.
    And what we've said is let's go back to the rate that existed under
    Ronald Reagan.
    People are still going to be able to make charitable
    contributions. It just means if you give $100 and you're in this tax
    bracket, at a certain point, instead of being able to write off 36
    (percent) or 39 percent, you're writing off 28 percent. Now, if it's
    really a charitable contribution, I'm assuming that that shouldn't be
    the determining factor as to whether you're giving that hundred
    dollars to the homeless shelter down the street.
    And so this provision would effect about 1 percent of the
    American people. They would still get deductions. It's just that
    they wouldn't be able to write off 39 percent. In that sense, what it
    would do is it would equalize. When I give $100, I get the same
    amount of deduction as when some -- a bus driver who's making $50,000
    a year or $40,000 a year gives that same hundred dollars. Right now,
    he gets 28 percent -- he gets to write off 28 percent, I get to write
    off 39 percent. I don't think that's fair.
    So I think this was a good idea. I think it is a realistic way
    for us to raise some revenue from people who benefitted enormously
    over the last several years. It's not going to cripple them.
    They'll still be well-to-do. And, you know, ultimately if we're going
    to tackle the serious problems that we've got, then in some cases
    those who are more fortunate are going to have to pay a little bit
    more.

  • Mike Allen

    At 42:06
    4 seconds

    It's not the well-to-do people; it's the charities. Given
    what you've just said --

  • PRESIDENT OBAMA

    At 42:10

    Yeah.

  • Mike Allen

    At 42:10
    5 seconds

    -- are you confident that charities are wrong when they
    contend that this would discourage giving?

  • PRESIDENT OBAMA

    At 42:15
    40 seconds

    Yes. I am. I mean, if you look at the
    evidence -- there's very little evidence that this has a significant
    impact on charitable giving.
    I'll tell you what has a significant impact on charitable giving
    is a financial crisis and an economy that's contracting. And so the
    most important thing that I can do for charitable giving is to fix the
    economy, to get banks lending again, to get businesses opening their
    doors again, to get people back to work again. Then I think charities
    will do just fine.
    Kevin Chappell. Hi, Kevin.

  • Kevin Chappell

    At 42:55
    27 seconds

    Thank you, Mr. President. A recent report found that as a
    result of the economic downturn, one in 50 children are now homeless
    in America. With shelters at full capacity, tent cities are sprouting
    up across the country.
    In passing your stimulus package, you said that help was on the
    way, but what would you say to these families, especially children,
    who are sleeping under bridges and in tents across the country?

  • PRESIDENT OBAMA

    At 43:22
    1 minute

    Well, the first thing I'd say is that I'm
    heartbroken that any child in America is homeless.
    And the most important thing that I can do on their behalf is to make
    sure their parents have a job. And that's why the recovery package
    said, as a first priority, how are we going to save or create 3.5
    million jobs? How can we prevent layoffs for teachers and police
    officers? How can we make sure that we are investing in the
    infrastructure for the future that can put people back to work right
    away? How do we make sure that when people do lose their jobs, that
    their unemployment insurance is extended, that they can keep their
    health care?
    So there are a whole host of steps that we've done to provide a
    cushion for folks who have fallen on very hard times and to try to
    spur immediate projects that can put people back to work.
    Now, in the meantime, we've got to work very closely with the
    states to monitor and to help people who are still falling through the
    cracks.
    And, you know, the homeless problem was bad even when the economy
    was good. Part of the change in attitudes that I want to see here in
    Washington and all across the country is a belief that it is not
    acceptable for children and families to be without a roof over their
    heads in a country as wealthy as ours. And so we're going to be
    initiating a range of programs as well to deal with homelessness.
    One area in particular I want to focus on is the issue of
    veterans. The rate of homelessness among veterans is much, much
    higher than for non-veteran populations.
    And so we've got -- a number of the increases that we're looking for
    in our budget on veterans funding directly addresses the issue of
    homeless veterans. That, I think, can provide some real help.
    Ann Compton. Hey, Ann.

  • Ann Compton

    At 45:19
    1 second

    Sir. (Soft laughter.)

  • PRESIDENT OBAMA

    At 45:20
    3 seconds

    You sound surprised. (Laughter.)

  • Ann Compton

    At 45:23
    4 seconds

    I am surprised! (Chuckles.) Could I ask you about race?

  • PRESIDENT OBAMA

    At 45:27
    2 seconds

    You may.

  • Ann Compton

    At 45:29
    21 seconds

    Yours is a rather historic presidency, and I'm just
    wondering whether in any of the policy debates that you've had within
    the White House, the issue of race has come up, or whether it has in
    the way you feel you've been perceived by other leaders or by the
    American people. Or have the last 64 days been a relatively color-
    blind time?

  • PRESIDENT OBAMA

    At 45:50
    1 minute

    I -- I think that the last 64 days has been
    dominated by me trying to figure out how we're going to fix the
    economy, and that's -- affects black, brown and white. And you know,
    obviously, at the Inauguration I think that there was justifiable
    pride on the part of the country that we had taken a step to move us
    beyond some of the searing legacies of racial discrimination in this
    country, but that lasted about a day. And you know, right now the
    American people are judging me exactly the way I should be judged, and
    that is, are we taking the steps to improve liquidity in the financial
    markets, create jobs, get businesses to reopen, keep America safe?
    And that's what I've been spending my time thinking about.
    Okay. Jon Ward, Washington Times. Where's Jon?

  • Jon Ward

    At 46:51
    1 second

    Right here, sir.

  • PRESIDENT OBAMA

    At 46:52
    1 second

    There you go.

  • Jon Ward

    At 46:53
    26 seconds

    Thank you, Mr. President.
    In your remarks on stem-cell research earlier this month, you
    talked about a majority consensus in determining whether or not this
    is the right thing to do, to federally fund embryonic stem-cell
    research. I'm just wondering, though, how much you personally
    wrestled with the morality or ethics of federally funding this kind of
    research, especially given the fact that science so far has shown a
    lot of progress with adult stem cells but not a lot with embryonic?

  • PRESIDENT OBAMA

    At 47:19
    2 minutes

    Okay. No, I -- I think it's a -- I think it's
    a legitimate question.
    I -- I wrestle with these issues every day. As I mentioned to --
    I think in an interview a couple of days ago, by the time an issue
    reaches my desk, it's a hard issue. If it was an easy issue, somebody
    else would have solved it and it wouldn't have reached me.
    Look, I believe that it is very important for us to have strong
    moral guidelines, ethical guidelines, when it comes to stem-cell
    research or anything that touches on, you know, the issues of possible
    cloning or issues related to, you know, the human life sciences.
    I think those issues are all critical, and I've said so before. I
    wrestle with it on stem cell; I wrestle with it on issues like
    abortion.
    I think that the guidelines that we provided meet that ethical
    test. What we have said is that for embryos that are typically about
    to be discarded, for us to be able to use those in order to find cures
    for Parkinson's or for Alzheimer's or for, you know, all sorts of
    other debilitating diseases, juvenile diabetes, that -- that it is the
    right thing to do. And that's not just my opinion. That is the
    opinion of a number of people who are also against abortion.
    Now, I am glad to see progress is being made in adult stem cells.
    And if the science determines that we can completely avoid a set of
    ethical questions or political disputes, then that's great. I have --
    I have no investment in causing controversy. I'm happy to avoid it if
    that's where the science leads us.
    But what I don't want to do is predetermine this based on a very rigid
    ideological approach. And that's what I think is reflected in the
    executive order that I signed.

  • Jon Ward

    At 49:56
    6 seconds

    I meant to ask as a follow-up, though, do you think that
    scientific consensus is enough to tell us what we can and cannot do?

  • PRESIDENT OBAMA

    At 50:02
    52 seconds

    No. I think there's always an ethical and a
    moral element that has to be -- be a part of this. And so, as I said,
    I don't take decisions like this lightly. They're ones that I take
    seriously. And -- and I respect people who have different opinions on
    this issue.
    But I think that this was the right thing to do and the ethical
    thing to do. And as I said before, my hope is, is that we can find a
    mechanism ultimately to cure these diseases in a way that gains a
    hundred percent consensus. And we certainty haven't achieved that
    yet. But I think on balance this was the right step to take.
    STAFF: Last question.
    Okay. Stephen Collinson, AFP.

  • Stephen Collinson

    At 50:54
    5 seconds

    Mr. President, you came to office pledging to work for
    peace between Israel and the Palestinians.

  • PRESIDENT OBAMA

    At 50:59

    Yeah.

  • Stephen Collinson

    At 50:59
    16 seconds

    How realistic do you think those are hopes are now, given
    the likelihood of a prime minister who's not fully signed up to a two-
    state solution and a foreign minister who's been accused of insulting
    Arabs?

  • PRESIDENT OBAMA

    At 51:15
    5 minutes

    It's not easier than it was, but I think it's
    just as necessary. We don't yet know what the Israeli government is
    going to look like. And we don't yet know what the future shape of
    Palestinian leadership is going to be comprised of.
    What we do know is this; that the status quo is unsustainable.
    That it is critical for us to advance a two-state solution where
    Israelis and Palestinians can live side by side in their own states
    with peace and security. And by assigning George Mitchell the task of
    working as special envoy, what we've signaled is that we're going to
    be serious from day one in trying to move the parties in a direction
    that acknowledges that reality. How effective these negotiations may
    be, I think we're going to have to wait and see.
    But, you know, we were here for Saint Patrick's Day, and you'll
    recall that we had what had been previously sworn enemies celebrating
    here in this very room; you know, leaders from the two sides in
    Northern Ireland that, you know, a couple of decades ago or even a
    decade ago people would have said could never achieve peace. And here
    they were, jointly appearing and talking about their commitment, even
    in the face of violent provocation.
    And what that tells me is that if you stick to it, if you are
    persistent, then -- then these problems can be dealt with.
    That whole philosophy of persistence, by the way, is one that I'm
    going to be emphasizing again and again in the months and years to
    come, as long as I am in this office. I'm a big believer in
    persistence. I think that when it comes to domestic affairs, if we
    keep on working at it, if we acknowledge that we make mistakes
    sometimes and that we don't always have the right answer, and we're
    inheriting very knotty problems, that we can pass health care, we can
    find better solutions to our energy challenges, we can teach our
    children more effectively, we can deal with a very real budget crisis
    that is not fully dealt with in my -- in my budget at this point, but
    makes progress.
    I think when it comes to the banking system, you know, it was
    just a few days ago or weeks ago where people were certain that
    Secretary Geithner couldn't deliver a plan.
    Today, the headlines all
    look like, well, all right, there's a plan.
    And I'm sure there'll be more criticism and we'll have to make more
    adjustments, but we're moving in the right direction.
    When it comes to Iran, you know, we did a video sending a message
    to the Iranian people and the leadership of the Islamic Republic of
    Iran. And some people said, "Well, they did not immediately say they
    were eliminating nuclear weapons and stop funding terrorism." Well,
    we didn't expect that. We expect that we're going to make steady
    progress on this front.
    We haven't immediately eliminated the influence of lobbyists in
    Washington. We have not immediately eliminated wasteful pork
    projects. And we're not immediately going to get Middle East peace.
    We've been in office now a little over 60 days.
    What I am confident about is that we're moving in the right
    direction, and that the decisions we're making are based on, how are
    we going to get this economy moving? How are we going to put
    Americans back to work? How are we going to make sure that our people
    are safe? And how are we going to create not just prosperity here but
    work with other countries for global peace and prosperity?
    And we are going to stay with it as long as I'm in this office. And I
    think that -- you look back four years from now, I think, hopefully,
    people will judge that body of work and say: This is big ocean liner;
    it's not a speedboat. It doesn't turn around immediately, but we're
    in a better -- better place because of the decisions that we made.
    All right. Thank you, everybody.