Presidential Interviews

Memorandum for the Heads of Executive Departments and Agencies: Regulatory Review

THE WHITE HOUSE

Office of the Press Secretary

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For Immediate Release
April 23, 2009

Please find below the complete text of a Memorandum signed by President Obama on January 30th and published in the Federal Register on February 3, 2009.

SUBJECT: Regulatory Review

For well over two decades, the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) has reviewed Federal regulations. The purposes of such review have been to ensure consistency with Presidential priorities, to coordinate regulatory policy, and to offer a dispassionate and analytical ‘‘second opinion’’ on agency actions. I strongly believe that regulations are critical to protecting public health, safety, our shared resources, and our economic opportunities and security. While recognizing the expertise and authority of executive branch departments and agencies, I also believe that, if properly conducted, centralized review is both legitimate and appropriate as a means of promoting regulatory goals.

The fundamental principles and structures governing contemporary regulatory review were set out in Executive Order 12866 of September 30, 1993. A great deal has been learned since that time. Far more is now known about regulation—not only about when it is justified, but also about what works and what does not. Far more is also known about the uses of a variety of regulatory tools such as warnings, disclosure requirements, public education, and economic incentives. Years of experience have also provided lessons about how to improve the process of regulatory review. In this time of fundamental transformation, that process—and the principles governing regulation in general—should be revisited.

I therefore direct the Director of OMB, in consultation with representatives of regulatory agencies, as appropriate, to produce within 100 days a set of recommendations for a new Executive Order on Federal regulatory review. Among other things, the recommendations should offer suggestions for the relationship between OIRA and the agencies; provide guidance on disclosure and transparency; encourage public participation in agency regulatory processes; offer suggestions on the role of cost-benefit analysis; address the role of distributional considerations, fairness, and concern for the interests of future generations; identify methods of ensuring that regulatory review does not produce undue delay; clarify the role of the behavioral sciences in formulating regulatory policy; and identify the best tools for achieving public goals through the regulatory process.

This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

The Director of OMB is hereby authorized and directed to publish this memorandum in the Federal Register.

BARACK OBAMA

INTERVIEW OF THE PRESIDENT BY JUAN CARLOS LOPEZ, CNN EN ESPAÑOL

THE WHITE HOUSE

Office of the Press Secretary

_______________________________________________________

FOR IMMEDIATE RELEASE                April 16, 2009

 April 15, 2009

1:54 P.M. EDT

     Q    You're going to Mexico.  It's your first trip to Latin America, and the White House already announced that the Mexican cartels are being included in the Kingpin Act.  What does this mean, and what message are you bringing to Mexico?

     THE PRESIDENT:  Well, first of all, the reason we're going to Mexico is because it is our neighbor, it is one of our largest trading partners, and it's a country that has enormous ties to the United States.  And so it was very important for me to send a message that we are going to continue to partner with Mexico to accomplish common goals of lifting up people's incomes and growing economic opportunity on both sides of the borders.  And I think that President Calderón has done an outstanding and heroic job in dealing with what is a big problem right now along the borders with the drug cartels.

     The Kingpin law allows us to go after the finances, the financial underpinnings of the cartels in a much more aggressive and much more effective way.  And so that's just part of a broader strategy in which the United States and Mexico will be partnering.  We are putting more resources on the border.  We are providing additional surveillance equipment.  We are going to be dealing not only with drug interdiction coming north, but also working on helping to curb the flow of cash and guns going south.

     And so there's a true partnership that's developing, and I want to make sure that the people of Mexico understand that we are going to do everything we can on our end to promote more security and more peace and more prosperity in the region.

     Q    One of the issues that is discussed in Mexico is that that government spends between $7 billion and $8 billion in their war on drugs, while the U.S. destined $1.4 billion for the Merida Initiative that includes Central America and is spread out through several years.  It's not seen as equitable.

     THE PRESIDENT:  Well, first of all I think it's important to recognize that my budget has actually sought to increase by about 50 percent the amount of money that we're spending.  We are already moving forward on, for example, Black Hawk helicopters to be sent to Mexico to help in the fight against the drug cartels.

So I want to put as much additional resources as we can into this effort.  I think Mexico has been very serious about dealing with the problem.  There are a number of Central American countries who are going to need our assistance, as well.  And my commitment is to make sure that the United States, working in a multilateral fashion with all the countries in the region, are finally putting an end to the power and the strength of these drug cartels.

Q    Will immigration reform be part of this whole process?  And also you've named a border czar.  Was this consulted with Mexico, and what is he going to do?

THE PRESIDENT:  Well, the goal of the border czar is to help coordinate all the various agencies that fall under the Department of Homeland Security, and so that we are confident that the border patrols are working effectively with ICE, working effectively with our law enforcement agencies.  So he's really a coordinator that can be directly responsible to Secretary Napolitano and ultimately directly accountable to me.

There has been a lot of interaction between Mexican officials and officials on our side of the border.  And, you know, Janet Napolitano has already been there.  She and John Brennan, who is part of my national security team, are currently there.  We're going to continue to coordinate effectively.

Now, immigration reform has to be part of a broader strategy to deal with our border issues, and as I've said repeatedly, I am a strong proponent of comprehensive immigration reform.  I've already met with the Congressional Hispanic Caucus, and committed to working with them to try to shape an agenda that can move through Congress.  And this is something that I think is important not just because of the drug cartel issue; it's important because of the human costs of a ongoing flow of illegal immigrants into this country.  It's something that we need to solve.

Q    You're going to Trinidad and Tobago.  Most of these countries, it's the first time you meet with the leaders.  They've been -- they want to bring Cuba up as an issue.  You've lifted restrictions on Cuban Americans.  How is this issue going to play out?

THE PRESIDENT:  Well, you know, I have no problem with them bringing up Cuba as an issue.  I think I've been very clear about my position on Cuba.  What I've said is, is that we should loosen up restrictions on travel and remittances.  We have now acted on that.  We also believe that Cuba can potentially be a critical part of regional growth in the region.

But Cuba has to take some steps, send some signals that when it comes to human rights, when it comes to political rights, when it comes to the ability of Cubans to travel, that there is some signs that we're moving away from what has been a set of policies that have really hampered Cuba's ability to grow.

I mean, I think -- think about the irony, the fact that, you know, on the one hand we're loosening up travel restrictions, and yet there are a lot of Cubans who can't leave Cuba.  That, I think, is an example of the kinds of changes that we hope we can promote over time.  And I think that our partners in Central and South America can be very important in helping to move away from the past and into the future.

Q    There's a movement in Latin America.  Countries are resorting to democratic measures to change the constitution so that the current leaders can stay in office.  It happened in Venezuela, Bolivia, Ecuador, and it's also happening in Colombia.  It's an internal matter, but how do you feel about those Presidents wanting to stay on, and will you bring it up at the summit?

THE PRESIDENT:  Well, you know, I think it's important for the United States not to tell other countries how to, you know, structure their democratic practices and what should be contained in their constitution.

All I can say is that one of the strengths of the United States government and our democracy, the reason it's been stable, is I think people have a sense that through constitutional means they can replace people who are in power who may not be meeting the interests of their populations.

If I'm not doing a good job, ultimately in some way I'm accountable because of elections.  But I'm also accountable in the sense that at most I've got eight years and there's going to be some turnover.

So that's been a strength of our system.  And ultimately it's up to the people of those countries to make a decision about how they want to structure their affairs.

Q    Now, more than the issues at the summit, a lot of people are focused on how you will interact with other leaders; for example, how you will face Hugo Chavez.  Have you thought about that?  Is it going to be any different than any other President?

THE PRESIDENT:  No, look, he's the leader of his country, and we'll -- he'll be one of many people that I will have the opportunity to meet.  And the whole message that we've tried to send throughout my campaign, throughout my recent travels overseas, at the G20 for example, has been that the United States, I think, has a leadership role to play in dealing with many of the big problems that we face.

But we also recognize that other countries have important contributions and insights.  We want to listen and learn, as well as talk.  And that approach, I think, of mutual respect and finding common interests is one that ultimately will serve everybody.

Q    Fidel Castro reacted to your lifting of sanctions, saying it was a positive move, but that he expected the lifting of the embargo.  And he said that Cuba won't beg, but that's what eventually they expect from the U.S.

THE PRESIDENT:  Well, I don't expect Cuba to beg.  Nobody is asking for anybody to beg.  What we're looking for is some signal that there are going to be changes in how Cuba operates that assures that political prisoners are released, that people can speak their minds freely, that they can travel, that they can write and attend church, and do the things that people throughout the hemisphere can do and take for granted.  And if there's some sense of movement on those fronts in Cuba, then I think that we can see a further thawing of relations and further changes.

But we took an important first step.  I think it's a signal of our good faith that we want to move beyond the Cold War mentality that has existed over the last 50 years.  And hopefully we'll see some signs that Cuba wants to reciprocate.

Q    Spanish judge Baltasar Garzón is considering a lawsuit filed by attorneys representing six Spaniards who were at one point held at Guantanamo.  And that lawsuit wants to go after President Bush's legal team.  What is your reaction to that?

THE PRESIDENT:  Well, you know, obviously I've been very clear that Guantanamo is to be closed, that some of the practices of enhanced interrogation techniques I think ran counter to American values and American traditions.  So I've put an end to these policies.

I'm a strong believer that it's important to look forward and not backwards, and to remind ourselves that we do have very real security threats out there.

So I have not had direct conversations with the Spanish government about these issues.  My team has been in communications with them.  I think that we are moving a process forward here in the United States to understand what happened, but also to focus on how we make sure that the manner in which we operate currently is consistent with our values and our traditions.

And so my sense is, is that this will be worked out over time.

Q    There is a sense of mistrust in the region towards the U.S.  You inherited -- you said you inherited the economic crisis.  Did you inherit this from previous administrations?  And how are you going to convince Latin Americans that the U.S. is sincere and that you really want to --

THE PRESIDENT:  Well, you know, I don't want to overstate the degree of anti-American sentiment.  I mean, I think that these things go in ups and downs.  But there are an awful lot of people in Latin America who are inspired by traditions of equal opportunity and entrepreneurship.  And there's a reason why there are consistently so many immigrants to our country from Latin America.  I think people still see America as a place full of hope.

But what is also true is there has always been a tradition of concern that the United States has been heavy-handed when it comes to foreign policy in Latin America.  And that's not something that just arose during the Bush administration.  That's something that dates back to the Monroe Doctrine and a long history of U.S. involvement in Latin America.

So the important thing -- the important message I think I have to send is that we live in the 21st century now.  Times have changed.  A country like Brazil is a economic powerhouse and is a big player on the world stage.  My relationship with President Lula is one of two leaders who both have big countries, that we're trying to solve problems and create opportunities for our people, and we should be partners.  There's no senior partner or junior partner.

When I sit down with President Calderón -- you know, he's a very capable person, and Mexico is very important to the United States just as the United States is important to Mexico.  And so we have this interdependence.

And if we have an attitude of partnership, then -- there are going to be times where countries disagree, but that's not just true between the United States and Latin American countries; between Latin American countries there are disagreements.  That's the nature of foreign policy.  But I think that we can put our foreign policy on a solid footing so that moving forward it's constructive, and ultimately we're making lives better for ordinary people in all countries.

Q    Muchas gracias.

THE PRESIDENT:  De nada.

END                                
2:07 P.M. EDT

Obama interview with Financial Times: Full text

Financial Times

Published: March 30 2009

Lionel Barber, Chrystia Freeland and Edward Luce of the Financial Times interviewed President Obama in Washington on March 27 2009. This is the transcript of the interview.

FT: Thank you for doing the interview Mr President.

Obama: My pleasure, I read the Financial Times before other people read the Financial Times. Now it’s trendy and everybody carries around a Financial Times.

FT: Let’s talk about the G-20. What will be your benchmarks for success?

Obama: The most important task for all of us is to deliver a strong message of unity in the face of crisis. There’s some constituent parts to that. Number one, all the participating countries recognise that in the face a severe global contraction we have to each take steps to promote economic growth and trade; that means a robust approach to stimulus, fighting off protectionism.

Next, we have to make sure that we are all taking serious steps to deal with the problems in the banking sector and the financial markets and that means having a series of steps to deal with toxic assets and to ensure adequate capital in the banking sector.

Third, a regulatory reform agenda that prevents these kinds of systemic risks from occurring again and that requires each country to take initiative but it also requires coordination across borders because we have a global, we have global capital markets, and that will include a wide range of steps, additional monitoring authority coordination of supervisors and various countries dealing with offshore tax havens. Making sure that…

FT: Is that a problem? Offshore tax havens.

Obama: Well, its something that is going to be discussed. I know that in my discussion I think there is a concern that we don’t want people to be able to game the system or circumvent regulated capital markets and making sure our regulations are targeting not just banks but any institution that could pose a potential systemic risk to the system.

A final area of concerted action involves international financial institutions and their capacity to assist emerging markets in developing countries at a time when those markets could be under even more severe strain then some of the more wealthy nations and I think making sure that institutions like the IMF have the resources to provide such assistance that world food supplies are not imperilled as a consequence of the break down in global trade, those are all issues that I think have to be addressed.

Now, I’m confident based on conversations that I have this week with Angela Merkel, Sarkozy, as well as with Kevin Rudd as well as conversations that I have had previously with Gordon Brown and others, that there is already a rough consensus there that by the time we arrive in London we will have taken, we will have made significant progress in moving in the right direction.

FT: Let’s just talk about the stimulus for a moment. At the moment there has been a 1.8 per cent GDP boost in 2009 by the G20 nations. There are concerns among economists that you need a sustainable stimulus and therefore 2010 is key. Will you get secure commitments from say, the Europeans, for action if necessary in 2010?

Obama: Two points I want to make on this, Number one: The press has tended to frame this as an “either or approach”. There are some G20 participants that are arguing fiercely for stimulus, others for regulation. What I have consistently argued is that what is needed is a “both and approach”. We need stimulus and we need regulation. We need to deal with the problems right in front of us and we also need to make sure we’re taking steps to prevent these types of breakdowns from happening again.

With respect to the stimulus, there is going to be an accord that G20 countries will do what is necessary to promote growth and trade. I think there is a legitimate concern that, would most countries already having initiated significant stimulus packages that we need to see how they work. Obviously I admire economists. I have a bunch of them on my staff. But to start making a whole host of plans about next year, without having better information on how the current stimulus efforts are working, is something that I think is of concern.

So what we are going to see is what the United States has led on this. We have been very aggressive in terms of our recovery package. The way our recovery package is structured, money is going out both in 2009 and 2010. But each country has its own constraints, its own political rhythms and what we want to just make sure is that everybody is doing something, everybody recognises the need to make progress on this front and that we are prepared to step into the breech should current efforts prove to be inadequate.

FT: I mean that is really the great challenge, in managing this crisis - bridging the gap between what is economically absolutely necessary and what is politically possible. How do you bridge that?

Obama: That’s one gap. Then there’s a gap in ideas about how to approach a crisis like this, especially among economists - although on the issue of the stimulus there seems to be much broader consensus among both conservative and liberal economists that stimulus is appropriate.

You know, the financial crisis hit the United States first; it is now being experienced around the world. Not surprisingly we took some very aggressive action earlier than some other countries because its impact had been felt most immediately on Wall Street. As other countries start experiencing these drastic declines in GDP and in their exports I think that the sense of urgency has grown and you are going to start seeing a convergence. In all countries there is an understandable tension between the steps that are needed to kick start the economy and the fact that many of these steps are very expensive and tax payers have a healthy scepticism about spending too much of their money, particularly when it is perceived that some of the money is being spent not on them but on others who they perceive may have helped precipitate the crisis. So that is always going to be a challenge and what’s also difficult is the fact that the policies we initiate all take time to take effect and by its very nature politics looks for more instantaneous gratification.

But I am confident that the American people, and I think people around the world, are looking to its leaders to lead and that some of the steps we have already taken are starting to bear fruit. We’re seeing glimmers of stabilisation in the economies and we haven’t yet seen…

FT: Glimmers of stabilisation?

Obama: Here in the United States for example, you’re starting to see pockets of stabilisation in the housing market. Our housing plan has led to the lowest interest rates, mortgage rates in a very long time and you are starting to see a huge number of refinancing in the banking sector. In certain select markets, like the market for auto loans or the market for student loans, Secretary Tim Geithner’s efforts to provide a market for asset-backed securities has helped and so we still have a long way to go, but I am confident that if we are persistent and we don’t approach this with a thought that there is a silver bullet out there but instead are willing to try a range of methods to deliver on the economic growth in jobs that we will get out of this current crisis.

FT: You mentioned the risks and dangers of protectionism. 73 separate measures have been identified by the World Bank since the last G20 summit so what again in practical terms can your administration do at the G20 to stop this - and I’m thinking to whether there are real risks that people worry in Europe a lot about what is going on, on Capitol Hill, with “Buy American” provisions.

Obama: Well first of all I think it’s important to note that here in the United States, despite some protectionist rhetoric and very real economic frustration growing out of the collapse of the financial markets and the huge rise in unemployment that the “Buy American” provision that was in the stimulus package was specifically written that had to be consistent with WTO. That the Mexican trucking provision is now subject to negotiations to ensure that we don’t see an escalating trade war.

I have sent a very clear signal that now is not that time to offer hints of protectionism and I will continue to discourage efforts to close off the US market. I think that in a democracy, there are always going to be some loose ends out there. That’s true here, that’s true around the world but overall I don’t think that we’ve seen a huge rush to protectionism that that isn’t the rhetoric that is emanating from the leaders that will be gathering in London.

And to the extent that the American people or Europeans or Asians, Africans, Latin Americans all feel confident that their leaders are doing everything that they can to encourage and promote economic [..] and that they have their populations interests at heart, I think we are going to be able to hold the line on any significant slippage.

FT: I wondered Mr President whether you’re concerned that, particularly following the AIG bonus controversy, there’s some danger that confidence that business has in the rule of law in the United States has been shaken and that could hinder some of these recovery measures?

Obama: I think it is a source of concern in some quarters. To the extent that the captains of industry recognise very legitimate frustrations that the American people feel when they read about huge bonuses going to members of firms that are receiving large tax payer bailouts. I think they can take steps to lessen that danger and I met with some bankers today and it was a constructive conversation but one of the points that I made is that a time when everybody is needing to sacrifice there has to be a similar sense of sacrifice on the part of those various sectors of the economy that helped to precipitate this crisis and to the extent that they’re showing restraint that compensation packages are structured so that there is some deferral until money is returned to tax payers and the economy recovers that will be good for everybody. That will put [...] in a stronger position to help them.

But you know, keep in mind that although there are going to be, I think, emotional reactions to and legitimate grievances around some of these issues, the United States has been the world’s most successful economy precisely because of a long standing respect for legal contracts and orderly transparent and open market operations and that’s not going to change.

FT: Mr President, given the rising tendency to populism on Capitol Hill and elsewhere, do you feel confident that at a time like this you can go to Congress and ask for the kind of backing of capitalisation that most economists say will be required in the near future?

Obama: I think it is very important for us to show that the money that has already been authorised is being well spent. That it is helping to result in loans going to small business and large business that are in turn investing and creating jobs. If voters perceive that it’s a one way street that we are just pouring more and more money into institutions and seeing no return other than avoiding catastrophe then it’s harder to make an argument for further intervention.

If on the other hand people start saying that they can refinance their house, and their child can get a student loan and that small business is able to retain its credit line, so that there is a tangible and meaningful result from our measures, then I think we can win back the confidence of the American public.

Copyright The Financial Times Limited 2009

President Obama on CBS’s ‘Face the Nation’, 3/29/09

Congressional Quarterly

CQ Transcriptswire

SPEAKERS: BOB SCHIEFFER, HOST

PRESIDENT BARACK OBAMA

[*] SCHIEFFER: Today on “Face the Nation” from the White House, it’s Obama’s war now, and he talks about that in our exclusive interview.

Mr. President, thank you for joining us. This economic crisis has been so severe that it has literally pushed all the other issues off the television, out of the newspapers. But as -- when you outlined your program for Afghanistan and the new strategy, it really underlined in the starkest terms that we may not be talking about these serious issues, but there’s some very serious things going on out there. So I’d like to start there.

OBAMA: Please.

SCHIEFFER: If I could. This is a hugely ambitious plan -- 22,000 more troops. You’re going to increase spending by 60 percent. You said in your announcement, we must defeat Al Qaida.

OBAMA: Right.

SCHIEFFER: This has really now become your war, hasn’t it?

OBAMA: I think it’s America’s war. And it’s the same war that we initiated after 9/11 as a consequence of those attacks on 3,000 Americans, who were just going about their daily round, and the focus over the last seven years I think has been lost.

What we want to do is to refocus attention on Al Qaida. We are going to root out their networks, their bases. We are going to make sure that they cannot attack U.S. citizens, U.S. soil, U.S. interests and our allies’ interests around the world.

In order for us to do that, we have to ensure that neither Afghanistan nor Pakistan can serve as a safe haven for Al Qaida. And unfortunately, over the last several years, what we’ve seen is essentially Al Qaida moving several miles from Afghanistan to Pakistan, but effectively still able to project their violence and hateful ideologies out into the world.

SCHIEFFER: You talked many times during your -- as you outlined this strategy about Al Qaida in Pakistan. You talk about safe havens in Pakistan.

OBAMA: Right.

SCHIEFFER: Are you giving our commanders now in Afghanistan the green light to go after these people even if they’re in what used to be safe havens in Pakistan?

OBAMA: Well, I haven’t changed my approach. If we have a high- value target within our sights -- after consulting with Pakistan, we’re going after them. But our main thrust has to be to help Pakistan defeat these extremists.

Now, one of the concerns that we’ve had building up over the last several years is a notion, I think, among the average Pakistani that this is somehow America’s war and that they are not invested. And that attitude, I think, has led to a steady creep of extremism in Pakistan that is the greatest threat to the stability of the Pakistan government, and ultimately the greatest threat to the Pakistani people. What we want to do is say to the Pakistani people, you are our friends, you are our allies. We are going to give you the tools to defeat al Qaeda and to root out these safe havens, but we also expect some accountability, and we expect that you understand the severity and the nature of the threat.

In addition, what we want to do is to help Pakistan grow its economy, to be able to provide basic services to its people, and that I think will help strengthen those efforts.

If the Pakistan government doesn’t have credibility, if they are weakened, then it’s going to be much more difficult for them to deal with the extremism within their borders.

SCHIEFFER: But you’re talking about going after them. Are you talking about with American boots on the ground, pursuing these people into these so-called safe havens?

OBAMA: No. Our plan does not change the recognition of Pakistan as a sovereign government. We need to work with them and through them to deal with Al Qaida, but we have to hold them much more accountable and we have to recognize that part of our task in working with Pakistan is not just military. It’s also our capacity to build their capacity through civilian interventions, through development, through aid assistance.

OBAMA: And that’s part of what you’re seeing both in Afghanistan and Pakistan, I think, is fully resourcing a comprehensive strategy that doesn’t just rely on bullets or bombs, but also relies on agricultural specialists, on doctors, on engineers, to help create an environment in which people recognize that they have much more at stake, in partnering with us and the international community, than giving in to some of these extremist ideologies.

SCHIEFFER: Help me out here. How do you -- what if they can’t do it? What if they won’t do it?

I mean, we have reports now about members of Pakistan’s intelligence service actually actively helping the Taliban and Al Qaida.

OBAMA: Well, some of those...

SCHIEFFER: What if they don’t do it?

OBAMA: Some of those reports aren’t new. There are a whole host of contingencies that we’ve got to deal with. I mean, this is going to be hard, Bob. I’m under no illusions. If it was easy, it would have already been completed.

So we’re going to have to go with a strategy that is focused, that is narrowly targeted on defeating Al Qaida. We think that, if you combine military, civilian, diplomatic, development approaches; if we are doing a much better job of coordinating with our allies, we can be successful.

But we recognize there are going to be a lot of hurdles between now and us finally having weakened Al Qaida or destroyed Al Qaida to the point it cannot -- it doesn’t pose a danger to us.

And we will continue to monitor and adjust our strategies to make sure that we’re not just going down blind alleys.

SCHIEFFER: Are you concerned at all -- because some people say the more troops you put in, it’s just going to inflame the situation; it’s going to make it worse. What do you say to them?

OBAMA: I’m very mindful of that. Look, I -- I’m enough of a student of history to know that the United States, in Vietnam and other countries, other epochs of history have overextended to the point where they were severely weakened. And the history in Afghanistan obviously shows that that country has not been very favorably disposed towards foreign intervention. And that’s why a central part of our strategy is to train the Afghan National Army so that they are taking the lead, increasingly, to deal with extremists in their area.

That’s been one of the few success stories we’ve seen over the last several years, is the Afghan National Army actually has great credibility. They’re effective fighters. We need to grow that. And that’s part of the reason why we want to make sure that there are trainers there.

But the last point I would make, you know, a request was made for increased troop levels in Afghanistan. I have already authorized 17,000. We’re now adding 4,000 trainers, specifically designed to train Afghan security forces.

But what I’ve also said to the Department of Defense and what I will say to the American public is that, you know, we now have resourced properly this strategy. It’s not going to be an open-ended commitment of infinite resources. We’ve just got to make sure that we are focused on achieving what we need to achieve with the resources we have.

SCHIEFFER: What you seem to be saying is we have to win; there’s no choice here. So does that mean, if more is needed; if the commanders come back to you and say, we may need more troops, Mr. President, to do this, you’re going to be ready to do that?

OBAMA: What I will not do is to simply assume that more troops always results in an improved situation.

I think there was a good argument, after us scrubbing this very hard and talking to a lot of our allies in the region, including the Pakistan and Afghanistan governments, the Europeans and our other NATO allies, that this was the best strategy.

But just because we needed to ramp up from the greatly underresourced levels that we had doesn’t automatically mean that, if this strategy doesn’t work, that what’s needed is even more troops.

There may be a point of diminishing returns in terms of troop levels. We’ve got to also make sure that our civilian efforts, our diplomatic efforts and our development efforts are just as robustly encouraged.

And, so for example, in the budget that I’ve presented to Congress, I’ve said we’ve got to increase foreign aid in Afghanistan and we’ve got to increase foreign aid in Pakistan. And I’m going to be really pushing Congress, because sometimes foreign aid is a, you know, juicy target, particularly during tough times.

I’m going to tell them, this is central to our strategy. And it can save lives and troops if we properly execute it.

SCHIEFFER: But you described this in very dark terms. I mean, and there’s no question that things are worse than ever in Afghanistan. You would agree with that?

OBAMA: I do.

SCHIEFFER: But you’re saying...

OBAMA: Let me make sure I’m clear. They’re not worse than they were when the Taliban was in charge...

SCHIEFFER: Yes.

OBAMA: ... and Al Qaida was operating with impunity. We have seen a deterioration over the last several years. And unless we get a handle on it now, we’re going to be in trouble.

SCHIEFFER: You said the other day in the “60 Minutes” interview that you would not have thought at this point in your presidency that Iraq would be the least of your worries, something to that effect.

OBAMA: Right.

SCHIEFFER: Are things going well enough there now that you may consider speeding up the withdrawal of troops from Iraq?

OBAMA: No, I think the plan that we put forward in Iraq is the right one, which is let’s have a very gradual withdrawal schedule through the national elections in Iraq. There’s still work to be done on the political side to resolve differences between the various sectarian groups around issues like oil, around issues like provincial elections. And so we’re going to continue to make progress on that front.

I’m confident that we’re moving in the right direction, but Iraq is not yet completed. We still have a lot of work to do. We still have a lot of training of Iraqi forces to improve their capacity. I’m confident, though, that we’re moving in the right direction.

SCHIEFFER: Let me ask you about something closer to home, and that is Mexico. You talked about sending more aid to the Mexican government, but things down there are really serious, as you well know. It’s my understanding that 90 percent of the guns that they’re getting down in Mexico are coming from the United States. We don’t seem to be doing a very good job of cutting off the gun flow. Do you need any kind of legislative help on that front? Have you, for example, thought about asking Congress to reinstate the ban on assault weapons?

OBAMA: I think the main thing we need is better enforcement. And so this week, we put forward a comprehensive initiative to assist those border regions that are being threatened by these drug cartels to provide assistance to the Mexican government, to make sure that on our side of the border we’ve got more personnel, more surveillance equipment.

SCHIEFFER: Why are we having so much trouble with that? I mean...

OBAMA: Well, what’s happened is that President Calderon, I think, has been very bold, and rightly has decided that it’s gotten carried away. That the drug cartels have too much power, are undermining and corrupting huge segments of Mexican society, and so he is taking them on, in the same way that when Eliot Ness took on Al Capone back during Prohibition, oftentimes that causes even more violence. And we’re seeing that flare up.

SCHIEFFER: Do you think it’s a threat to the United States security?

OBAMA: I don’t think that it is a -- what would be called an existential threat, but it is a serious threat to those border communities, and it’s gotten out of hand. And so what we have to do is to recognize that, look, this is a two-way street. As Secretary Clinton indicated, we’ve got to reduce demand for drugs. We’ve got to do our part in reducing the flow of cash and guns south.

SCHIEFFER: Are we anywhere close to putting U.S. troops on the border?

OBAMA: You know, obviously, there have been calls to increase National Guard troops on the borders. That’s something that we are considering. But we want to first see whether some of the steps that we’ve taken can help quell some of the violence. And we want to make sure that we are consulting as effectively as we can with the Mexican government in moving this strategy forward.

SCHIEFFER: All right. Let’s take a break here and we’ll come back and talk about some domestic issues.

(COMMERCIAL BREAK)

SCHIEFFER: Mr. President, you’re scheduled to announce on Monday what you plan to do with the auto industry, as they’re asking for more federal money.

OBAMA: Right.

SCHIEFFER: You’ve told them they’re going to have to cut back, present a different business plan. Our sources tell us that, as far as the White House is concerned, they’re not there yet.

Do they have to do more in order to get this money?

OBAMA: Yes. They’re not quite there yet. There’s been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen the market for new cars drop from 14 million to 9 million.

Everybody is having problems, even Toyota and other very profitable companies.

And so what we’re trying to let them know is that we want to have a successful auto industry -- U.S. auto industry. We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is.

And that’s going to mean a set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody is going to have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road.

SCHIEFFER: But they’re not there yet?

OBAMA: They’re not there yet.

SCHIEFFER: You campaigned on cutting taxes for the middle class. And yet, lately, I don’t see any middle-class tax cut in the version of the budget that’s going through the Senate right now.

You have suggested that maybe you’d let the tax cuts you put for the middle class in the stimulus bill run out next year.

Can you tell us, are you still pushing a middle-class tax cut? I know you said you want the Congress to follow the principles you set out, your priorities: education...

OBAMA: Health care.

SCHIEFFER: ... reducing the deficit, health care and so on -- and education. But have you abandoned the middle-class tax cut?

OBAMA: Absolutely not. Now, first of all, let’s understand, Bob, I’ve delivered that middle-class tax cut for two years, in the stimulus package. So people will be getting...

SCHIEFFER: This year and next year?

OBAMA: That’s right.

SCHIEFFER: But are you going to let that run out?

OBAMA: Hold on a second. They’ll be seeing their tax cuts in their -- their paychecks starting on April 1, for 95 percent of working families, just as we promised.

I strongly believe that we should continue those tax cuts. We should make them permanent because the average worker out there, the average family, saw their wages and incomes flatlined, even during boom times, over the last decade.

And there’s been a huge growth in income at the very top echelons but not for average American workers. They’ve been losing ground. So I think it’s the right thing to do. What I’ve also said, though, is we’ve got to pay for it.

Now, in my original budget, we had a way of paying for it. And some of the proposals that we have made, members of Congress have said, well, we’re not quite comfortable with that.

So what I’ve said is, if you don’t want to pay for it in those ways, let’s find another way to pay for it. I think it’s still the right thing to do. And I’m going to be pushing as hard as I can to get it done in this budget.

If it’s not done in this budget, then I’m going to keep on pushing for it next year and the year afterwards, so that we don’t see a drop-off after the two-year tax cuts...

(CROSSTALK)

SCHIEFFER: So what you’re saying is that the Congress may want to find a different way to pay for it but you’re going to insist on...

OBAMA: Absolutely. That’s still...

(CROSSTALK)

SCHIEFFER: ... a middle-class tax cut? I want to ask you, also, about these bonuses and all that on Wall Street. Congress expressed outrage. You seemed outraged. And then after the Congress -- the House passed the bill to get that money back with some kind of taxes on those people, you seemed to throw a little cold water on that. You said we shouldn’t legislate out of anger.

Have you now, on reflection, decided that maybe you let that go a little too far?

OBAMA: Oh, no. I think that the anger was justified. And had we not seen some healthy expressions of anger, we wouldn’t have gotten $50 million of those bonuses back that had been sent to AIG.

But what I consistently said -- and I said this even on the first day, when I announced that, in fact, we were going to do everything we could to get some of those bonuses back.

OBAMA: I said at the time that it is important to keep our eye on the ball. My most important job is to get this economy moving again, to get credit flowing again, so that businesses, large and small, can start rehiring, open their doors, and we can start seeing economic growth again. That’s my most important job.

What I don’t want is that larger project to be threatened by short-term gratifications of our legitimate frustrations with some of the behavior that we’ve seen on Wall Street. And I met with bankers, some of the...

SCHIEFFER: Did you talk about that in your big meeting with the bankers at the White House?

OBAMA: I did. I talked to them. And what I said was, look, first of all, there are a lot of bankers that are doing good work in the community, that are acting responsibly, that haven’t taken huge risks. I understand that. But understand that for the average single mom who is just barely struggling to pay her mortgage or medical bills for her kid, who is paying her taxes, who is playing by the rules, and then finds out that a taxpayer-assisted firm is paying out multimillion-dollar bonuses, that’s not just not acceptable.

Show some restraint. Show some -- show that you get that this is a crisis and everybody has to make sacrifices.

SCHIEFFER: So what did they say?

OBAMA: They agreed. And they recognized it.

Now, the proof of the pudding is in the eating, so I expect to see that restraint operate. Another way of putting it is I said to those folks, let me help you -- help me help you. It’s very difficult for me as president to call on the American people to make sacrifices to help shore up the financial system if there’s no sense of mutual obligation and mutual help.

Now, the flip side is I have got to explain to the American people we’re not going to get this recovery if we don’t see a recovery of the financial sector. And there’s no separation between Main Street and Wall Street. We’re all in this together. And it’s my job to help keep that focus as we move forward.

SCHIEFFER: One more question, Mr. President. This week, I went down to Monticello, Thomas Jefferson’s home, where they have this wonderful new visitors’ center. And one of the historians down there reminded me that Thomas Jefferson once said the presidency is a splendid misery. But at the end of his term, he also said, quote, that the presidency had brought him nothing but increasing drudgery and a daily loss of friends.

I just wonder, have you lost any friends yet?

OBAMA: I don’t think I’ve lost any friends. But I’m sure I’ve strained some friendships.

And look, this is an invigorating job. In some ways, I feel incredibly fortunate to be in this job at a time where the presidency really matters. This is not a caretaker presidency right now. Every decision we’re making counts, and my team understands that.

You know, if I had my preferences, would I love to deal with one of these at a time? Deal with Afghanistan now and maybe put off banking until later, or deal with health care three years from now? That would be great.

I don’t have that luxury because the American people don’t have that luxury. They need to be kept safe now. They need health care assistance now. They need this economy back on track now. They need to educate their kids now. And given that they’re having to make a lot of difficult choices, it’s important for us to work as hard as we can to help them live out their American dream.

SCHIEFFER: Thank you, Mr. President.

OBAMA: Great to talk to you, Bob. Thank you.

CQ Transcript: President Obama Is Interviewed on CBS’ “60 Minutes”

Congressional Quarterly

CQ Transcriptswire

SPEAKERS: PRESIDENT BARACK OBAMA

SCOTT PELLEY, CBS CORRESPONDENT

STEVE KROFT, CBS CORRESPONDENT

LESLEY STAHL, CBS CORRESPONDENT

BOB SIMON, CBS CORRESPONDENT MORLEY SAFER, CBS CORRESPONDENT

[*] STEVE KROFT, CBS NEWS CORRESPONDENT: By most accounts, this past week was one of the most difficult in the young presidency of Barack Obama . At the heart of it all was the public upheaval over $165 million in bonuses paid to employees of AIG, a company largely responsible for bringing the world’s financial system to its knees, and now being propped up by U.S. taxpayers.

The bonuses touched off a cultural war between Wall Street and Main Street, both of whose support the president needs to help stabilize the economy. After campaigning in California to drum up support for his $3.6 trillion budget, the president sat down with us in the Oval Office for a conversation about the AIG debacle, the economy, and getting the hang of the world’s most difficult job.

Were you surprised by the intensity of the reaction, and the hostility from the AIG bonus debacle?

BARACK OBAMA, U.S. PRESIDENT: I wasn’t surprised by it. Our team wasn’t surprised by it. The one thing that I’ve tried to emphasize, though, throughout this week, and will continue to try to emphasize during the course of the next several months as we dig ourselves out of this economic hole that we’re in, is we can’t govern out of anger. We’ve got to try to make good decisions based on the facts, in order to put people back to work, to get credit flowing again. And I’m not going to be distracted by what’s happening day to day. I’ve got to stay focused on making sure that we’re getting this economy moving again.

KROFT: The president ordered his treasury secretary, Timothy Geithner, to use every legal means to recover the bonus money from AIG. If it is not repaid, it will be deducted from the company’s next bailout payment. But the House decided to extract its own revenge, passing a bill that would impose a tax of up to 90 percent on the AIG bonuses, and on the bonuses of anyone making more than $250,000 a year who works for a financial institution receiving more than $5 billion in bailout funds.

I mean, you’re a constitutional law professor.

OBAMA: Yeah.

KROFT: Do you think this bill’s constitutional?

OBAMA: Well, I think that, as a general proposition, you don’t want to be passing laws that are just targeting a handful of individuals. You want to pass laws that have some broad applicability. And as a general proposition, I think you certainly don’t want to use the tax code to punish people. I think that you’ve got a pretty egregious situation here that people are understandably upset about. And so let’s see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness, but don’t hamper us from getting the banking system back on track. KROFT: You’ve got a piece of legislation that could affect tens of thousands of people-- some of these people probably had nothing to do with the financial crisis. And some of them probably deserve the bonuses that they got.

OBAMA: Well ...

KROFT: I mean, is that fair?

OBAMA: Well, that’s why we’re going to have to take a look at this legislation carefully. Clearly, the AIG folks getting those bonuses didn’t make sense. And one of the things that I have to do is to communicate to Wall Street that given the current crisis that we’re in, they can’t expect help from taxpayers but they enjoy all the benefits that they enjoyed before the crisis happened. You get a sense that in some institutions that has not sunk in, that you can’t go back to the old way of doing business, certainly not on the taxpayers’ dime.

Now, the flip side is that Main Street has to understand, unless we get these banks moving again, then we can’t get this economy to recover. And we don’t want to cut off our nose to spite our face.

KROFT: Your treasury secretary, Tim Geithner, has been under a lot of pressure this week. And there have been people in Congress calling for his head. Have there been discussions in the White House about replacing him?

OBAMA: No.

KROFT: Has he volunteered to, or come to you and said to you, “Do you think I should step down?”

OBAMA: No. And he shouldn’t. And if he were to come to me, I’d say, “Sorry, buddy. You’ve still got the job.”

But look, he’s got a lot of stuff on his plate. And he is doing a terrific job. And I take responsibility for not, I think, having given him as much help as he needs.

KROFT: Obama says Geithner is not only responsible for the banks, the bailouts and the automobile industry; he also has to make sure the money is being spent wisely, and to report to Congress. Yet, nearly a dozen high-level treasury department jobs remain unfilled, and Geithner still has no deputy. Two people under consideration for the post withdrew their names after going through the vetting process.

OBAMA: You know, this whole confirmation process, as I mentioned earlier, has gotten pretty tough. It’s been always tough. It’s gotten tougher in the age of 24/7 news cycles. And a lot of people who we think are about to serve in the administration and Treasury suddenly say, “Well, you know what? I don’t want to go through some of the scrutiny, embarrassment, in addition to taking huge cuts in pay.”

KROFT: Have you offered some of these high level positions-- the Treasury-- to people who would have turned them down?

OBAMA: Absolutely. Yeah. And not because people didn’t want to serve. I think that people just felt that, you know, that the process has gotten very onerous.

KROFT: your treasury secretary’s plan, Geithner’s plan, and your plan really, for solving the banking crisis was met with very, very, very tepid response. And you had a lot of people criticize... A lot of people said they didn’t understand it. A lot of people said it didn’t have any, enough details to solve the problem. I know you’re coming out with something next week on this. But these criticisms were coming from people like Warren Buffett, people who had supported you, and you had counted as being...

OBAMA: And Warren still does support me. But I think that -- understand Warren’s also a big player in the financial markets who’s a major owner of Wells Fargo. And so he’s got a perspective from the perspective of somebody who is part owner of a bank. You’ve got members of Congress who’ve got a different perspective, which is, “We don’t want to spend anymore taxpayer money.”

You’ve got a whole host of players, all of whom may have a completely different solution. Right? And you know, one of the challenges that Tim Geithner has had is the same challenge that anybody would have in this situation. People want a lot of contradictory things. You know, the banks would love a lot of taxpayer money with no strings attached. Folks in Congress, as well as the American people, would love to fix the banks without spending any money.

And so, at a certain point, you know, you’ve got just a very difficult line to walk.

KROFT: You need the financial community ...

OBAMA: Right.

KROFT: ... to solve this crisis.

OBAMA: I do.

KROFT: Do you think that the people on Wall Street and the people in the financial community that you need trust you, believe in you?

OBAMA: Part of my job is to communicate to them, “Look, I believe in the market. I believe in financial innovation. And I believe in success.” I want them to do well. But what I also know is that the financial sector was out of balance. You look at how finance used to operate just 20 years ago or 25 years ago. People - If you went into investment banking, you were making 20 times what a teacher made. You weren’t making 200 times what a teacher made.

KROFT: There is a perception right now, at least in New York, which is where I live and work.

OBAMA: Right. KROFT: That people feel, they thought that you were going to be supportive. And now, I think there are a lot of people say, “Look, we’re not going to be able to keep our best people. They’re not going to stay and work here for $250,000 a year when they can go work for a hedge fund - if they can find one that’s still working and make a lot more.

OBAMA: I’ve told them directly, because I’ve heard some of this. Is they need to spend a little time outside of New York. Because, you know, if you go to North Dakota or you go to Iowa or you go to Arkansas, where folks would be thrilled to be making $75,000 a year without a bonus, then I think they’d get a sense of why people are frustrated.

I think we have to understand the severity of the crisis that we’re in right now. The fact is that, because of bad bets made on Wall Street, there have been enormous losses. I mean, there were a whole bunch of folks who, on paper, if you looked at quarterly reports, were wildly successful, selling derivatives that turned out to be ...

KROFT: Worthless.

OBAMA: ... completely worthless.

KROFT: And insuring them.

OBAMA: And insuring them.

Now, you know, gosh, I don’t think it’s me being anti-Wall Street just to point out that the best and the brightest didn’t do too well on that front, and that maybe the incentive structures that have been set up have not produced the kinds of long-term growth that I think everybody’s looking for.

KROFT: Were you surprised at the depth of this recession when you got here? Did you know it was this bad?

OBAMA: I don’t think that we anticipated how steep the decline would be, particularly in employment. I mean, if you look at just, you know, hundreds of thousands, now, millions of jobs being shed over the course of two months or three months, that slope is a lot steeper than anything that we’ve seen before.

Now, there’s a potential silver lining, which may be that things are so accelerated now, the modern economy is so intertwined and wired that things happen really fast for ill, but things may recover faster than they have in the past.

KROFT: Do you believe that there’s still some systemic risk out there? That the financial system could still implode if you had a big failure at AIG or at Citicorp?

OBAMA: Yes.

KROFT: Citibank? OBAMA: Yes. I think that systemic risks are still out there, and if we did nothing, you could still have some big problems. There are certain institutions that are so big that, if they fail, they bring a lot of other financial institutions down with them. And if all those financial institutions fail all at the same time, then you could see an even more destructive recession, and potentially depression.

I’m optimistic about that not happening, because I think we did learn lessons from the Great Depression.

KROFT: Is there some limit to the amount of money we can spend?

OBAMA: Yes.

KROFT: Or print trying to solve this crisis?

OBAMA: There is.

KROFT: And are we getting close to it?

OBAMA: The limit is our ability to finance these expenditures through borrowing. And the United States is fortunate that it has the largest, most stable economic and political system around. And so the dollar is still strong because people are still buying treasury bills. They still think that’s the safest investment out there. If we don’t get a handle on this, and also start looking at our long-term deficit projections, at a certain point, people will stop buying those treasury bills.

KROFT: Do you have any idea when this might end, or when things might start getting better?

OBAMA: Well, we’re already starting to see flickers of hope out there. Refinancings have significantly increased. Interest rates have never been lower. That promises the possibility, at least, of the housing market bottoming out and stabilizing. It’s not going to happen equally in every part of the country.

KROFT: On the subject of the ailing automobile industry, the president said he is still committed to helping General Motors and Chrysler avert bankruptcy, but he says they have yet to demonstrate they can remain economically viable. And there are major political obstacles.

OBAMA: I just want to say that the only thing less popular than putting money into banks is putting money into the auto industry, so ...

KROFT: Eighteen percent are in favor.

OBAMA: That’s ...

KROFT: Seventy six percent against.

OBAMA: It’s not a high number. KROFT: You’re sitting here, and you’re -- You are laughing about some of these problems. Are people going to look at this and say, “I mean, he’s sitting there, just making jokes about money.” How do you deal with -- I mean, explain the ...

OBAMA: Well ...

KROFT: ... the mood and your laughter.

OBAMA: Yeah, I mean, there’s got to be ...

KROFT: Are you punch-drunk?

OBAMA: No, no. There’s got to be a little gallows humor to get you through the day. You know, sometimes my team talks about the fact that, if - If you had said to us a year ago that the least of my problems would be Iraq, which is still a pretty serious problem, I don’t think anybody would have believed it. But we’ve got a lot on our plate, and a lot of difficult decisions that we’re going to have to make.

KROFT: Afghanistan.

OBAMA: Speaking of which,

KROFT: What should that mission be?

OBAMA: Making sure that al Qaeda cannot attack the U.S. homeland and U.S. interests and our allies. That’s our number one priority. And in service of that priority, there may be a whole host of things that we need to do. We may need to build up economic capacity in Afghanistan. We may need to improve our diplomatic efforts in Pakistan. We may need to bring a more regional diplomatic approach to bear. We may need to coordinate more effectively with our allies.

But we can’t lose sight of what our central mission is, the same mission that we had when we went in after 9/11. And that is these folks can project violence against the United States’ citizens. And that is something that we cannot tolerate.

But what we can’t do is think that just a military approach in Afghanistan is going to be able to solve our problems. So what we’re looking for is a comprehensive strategy. And there’s got to be an exit strategy. There’s got to be a sense that this is not perpetual drift.

KROFT: Afghanistan has proven to be very hard to govern. This should not come as news to anybody, given its history ...

OBAMA: Right.

KROFT: ... as the graveyards of empire. And there are people now who are concerned. We need to be careful what we’re getting ourselves into in Afghanistan, because we have come to be looked upon there by people in Afghanistan, and even people now in Pakistan ...

OBAMA: Right.

KROFT: ... as another foreign power coming in, trying to take over the region.

OBAMA: I’m very mindful of that, and so is my national security team. So is the Pentagon. Afghanistan is not going to be easy in many ways. And this is not my assessment, this is the assessment of commanders on the ground.

Is Iraq was actually easier than Afghanistan. It’s easier terrain. You’ve got a much better educated population, infrastructure to build off of. You don’t have some of the same destabilizing border issues that you have between Afghanistan and Pakistan.

And so this is going to be a tough nut to crack. But it is not acceptable for us to simply sit back and let safe havens of terrorists plan and plot ...

KROFT: One question about Dick Cheney and Guantanamo -- I’m sure you want to answer this.

OBAMA: Oh, absolutely.

KROFT: A week ago, Vice President Cheney said, essentially, that your willingness to shut down Guantanamo and to change the way prisoners are treated and interrogated was making America weaker and more vulnerable to another attack. And that the interrogation techniques that were used at Guantanamo were essential in preventing another attack against the United States.

OBAMA: I fundamentally disagree with Dick Cheney . Not surprisingly. You know, I think that Vice President Cheney has been at the head of a movement whose notion is somehow that we can’t reconcile our core values, our Constitution, our belief that we don’t torture, with our national security interests.

I think he’s drawing the wrong lesson from history. The facts don’t bear him out. I think he is - that attitude, that philosophy has done incredible damage to our image and position in the world. I mean, the fact of the matter is, after all these years, how many convictions actually came out of Guantanamo? How many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney? It hasn’t made us safer.

What it has been is a great advertisement for anti-American sentiment, which means that there is constant effective recruitment of Arab fighters and Muslim fighters against U.S. interests all around the world.

KROFT: Some of it being organized by a few people who were released from Guantanamo.

OBAMA: Well, there is no doubt that we have not done a particularly effective job in sorting through who are truly dangerous individuals that we’ve got to make sure are not a threat to us, who are folks that we just swept up. The whole premise of Guantanamo promoted by Vice President Cheney was that, somehow, the American system of justice was not up to the task of dealing with these terrorists. I fundamentally disagree with that. Now, do these folks deserve Miranda rights? Do they deserve to be treated like a shoplifter down the block? Of course not.

KROFT: What do you do with those people?

OBAMA: Well, I think we’re going to have to figure out a mechanism to make sure that they are not released and do us harm, but do so in a way that is consistent with both our traditions, sense of due process, international law. But this is the legacy that’s been left behind. And I’m surprised that the vice-president is eager to defend a legacy that was unsustainable.

Let’s assume that we didn’t change these practices. How long are we going to go? Are we going to just keep on going until, you know, the entire Muslim World and Arab World despises us? Do we think that’s really going to make us safer? I don’t know a lot of thoughtful thinkers, liberal or conservative, who think that that was the right approach.

KROFT: When we come back, President Obama talks about the rigors of his new job, while giving us a tour of the White House grounds.

(COMMERCIAL BREAK)

KROFT: Aside from running the “Harvard Law Review” and directing his own presidential campaign, President Barack Obama entered the White House with no real executive experience. Now he is grappling with the challenges of running one of the largest enterprises in the world under the most trying circumstances. How is he handling the pressure, what is an average day like and how are his wife Michelle and their young daughters adjusting? The president talked about all of that as he gave us a tour of the White House grounds.

So have you gotten into a routine?

OBAMA: I have. You know, I -- Typically work out in the morning. Michelle’s often there with me. After the workout, have breakfast, read the papers, re... Read my morning security briefing. And then I come down here and talk to our national security team. Then we talk to the economic team. After that, who knows? Anything goes. But typically between 7:00 and 10:00 I sort of know what I’m doing.

KROFT: And this is the living quarters.

OBAMA: This is the living quarters, up on the second floor. We’ve got a gym right over there up on the third floor. And the second floor is our bedrooms on this side, and we’ve got a dining room on that side. And -- yeah, pretty nice digs.

KROFT: How are you finding the job?

OBAMA: It’s exhilarating. It’s challenging, you know. I - I find that the governance part of it, the decision-making part of it actually comes - comes pretty naturally. I think I’ve got a great team. I think we’re making good decisions. The hardest thing about the job is staying focused because there’s so many demands and decisions that are pressed upon you.

KROFT: What’s the hardest decision you’ve had to make in the last 60 days?

OBAMA: Well, I would say that the decision to send more troops into Afghanistan. You know, I think it’s the right thing to do. But it’s a weighty decision because we actually had to make the decision prior to the completion of strategic review that we were conducting.

When I make a decision to send 17,000 young Americans to Afghanistan, you can understand that intellectually, but understanding what that means for those families, for those young people when you end up sitting at your desk, signing a condolence letter to one of the family members of a fallen hero. You’re reminded each and every day at every moment that the decisions you make count.

KROFT: What is the most frustrating part of the job?

OBAMA: The fact that you are often confronted with bad choices that flow from less than optimal decisions made a year ago, two years ago, five years ago, when you weren’t here.

A lot of times, when things land at my desk it’s a choice between bad and worse. And as somebody pointed out to me, the only things that land on my desk are tough decisions. Because if they were easy decisions, somebody down the food chain has already made them.

KROFT: Uh-huh. How many decisions do you have to make a day?

OBAMA: Can’t count ‘em.

KROFT: Lots.

OBAMA: Yeah, lots.

KROFT: Every time somebody walks in your office.

OBAMA: There’s a decision. Otherwise, they don’t get a meeting.

KROFT: And you’re briefed for all that before it happens.

OBAMA: I am. I spend a lot of time reading. People keep on asking me, “Well, what are you reading these days?” Well, mostly briefing books. You know, you get a little time to read history or, you know, policy books that are of interest.

But there’s a huge amount of information that has to be digested, especially right now. Because the complexities of Afghanistan are matched, maybe even dwarfed, by the complexities of the economic situation. And there are a lot of moving parts to all of that.

KROFT: Do you take a day off?

OBAMA: I do. It’s never a full day, but typically Saturdays and Sundays. I’ll wander down to the Oval Office. I’ll do some work, but I’ll still have time for the kids.

KROFT: On most days the president says he and the first lady are able to have a family dinner with their children. And he usually sees his two daughters in the afternoon when they come home from school and pay him a visit in the West Wing. He can look out the window of the Oval Office, and watch them play on their new swing set.

OBAMA: Pretty spectacular swing set. I have to say that I was not the purchaser of this. The admiral, our chief usher, Admiral Steve Rochon, took great interest when we said that we should get a swing set and found what I assume must be the Rolls Royce of swing sets.

KROFT: You didn’t have one of these when you were a kid?

OBAMA: I sure did not. I thought we were going to get like two swings. But they went all out.

KROFT: Have the girls had kids over after school?

OBAMA: They have. And they’ve tested this out. And it got a thumbs up.

KROFT: Are they liking it here?

OBAMA: You know, they are adapting remarkably in ways that I just would not have expected. I mean ...

KROFT: Well, this is pretty cool.

OBAMA: Well, it’s cool, but what’s interesting is actually how unimpressed they are with it. I mean, they’re going to school. They are unchanged. They’re the same sweet, engaging, happy, unpretentious kids that they were.

KROFT: And they’re having fun.

OBAMA: They do seem to be having fun. And Michelle is thriving as well. I mean she just started a vegetable garden out here.

KROFT: Ah, where’s that?

OBAMA: That’s ...

KROFT: Is that nearby? Is that ...

OBAMA: No, that’s pretty far down. But they just actually -- All the chefs from the White House staff went down there with her. And they started digging ground. And they’re going to be planting stuff. And this is part of the message that she wants to send about good nutrition.

KROFT: Michelle Obama had broken ground for the vegetable garden a few hours earlier on South Lawn, with the help of some Washington school children. Just a small patch of land on the sprawling White House grounds that cover 18 acres. As for the 55,000-square-foot house, the first family is still exploring the 132 rooms and 35 bathrooms. Have you gotten lost in here yet?

OBAMA: I have. Repeatedly.

KROFT: Harry Truman called the White House “The Great White Jail.” And Bill Clinton said he couldn’t make up his mind whether it was the finest public housing in America or the jewel of the prison system.

OBAMA: The bubble that the White House represents is tough. And one of the things that I am constantly struggling with is how to break out of it. And I’ve taken to the practice of reading 10 letters selected from the 40,000 that we get every night just to hear from voices outside of my staff.

The inability to just go and, you know, sit at a corner coffee shop and have a chat with people or just listen to what folks are saying at the next table, that I think is something that as president you’ve got to constantly fight against.

END

.ETX

Mar 22, 2009 21:59 ET .EOF

Source: CQ Transcriptions

© 2009, Congressional Quarterly Inc., All Rights Reserved

Interview of the President by Regional Reporters, 3/11/09

THE WHITE HOUSE
Office of the Press Secretary
_________________________________________________________________
For Immediate Release          March 12, 2009

Below is a list of the regional reporters who interviewed the President yesterday and the transcript of the interview.

Participants

Bruce Alpert, New Orleans Times-Picayune
Philip Brasher, Des Moines Register
Michael Coleman, Albuquerque Journal
Kevin Diaz, Minneapolis Star Tribune
Craig Gilbert, Milwaukee Journal Sentinel
Todd Gillman, Dallas Morning News
David Goldstein, Kansas City Star
Bob Keefe, Atlanta Journal-Constitution
Stephen Koff, Cleveland Plain Dealer
Mark Matthews, Orlando Sentinel
Mary Orndorff, The Birmingham News
James O’Toole, Pittsburgh Post-Gazette
Mike Riley, Denver Post
Neil Simon, Richmond Times-Dispatch/Media General
Sylvia Smith, Fort Wayne Journal Gazette

Interview Transcript
Roosevelt Room
March 11, 2009

2:05 P.M. EDT

THE PRESIDENT: So I usually don't start these off with a long statement. Obviously our overarching focus right now is the economy. I am very mindful of the hardships that are taking place all throughout the country -- families who are losing their homes, losing their jobs, losing their health care. I get a sampling of the letters that are sent to me every day, and some of the stories are just heartbreaking.

And everything that we're doing is focused on not only pulling this economy out of what is the worst recession since the Great Depression, but also looking at ways that we can set a foundation for long-term economic growth. You know, the days of growing the economy through an overheated housing market or through people running up exorbitant credit card bills is over.

We've got to put our growth model on a different footing, and that means that we've got to deal with our health care system and reduce costs for families, businesses and governments. It means that we have to think through our energy policy so that we're not so badly dependent on foreign oil. It means we've got to improve our education system so that our young people are equipped with the skills and knowledge that they're going to need to get jobs in the future.

And so the Recovery and Reinvestment Act that we passed reflected those priorities. You know, we had tax cuts to the middle class, but also investments on health information technologies and doubling renewable energy; a enormous effort to jumpstart school reform at the same time as we are providing some much needed relief to states so that they wouldn't be laying off teachers and firefighters and cops; and that we could rebuild our infrastructure.

The budget that I've now prepared and will be going before Congress and debated over the next month reflects many of those common priorities, and we're going to be building off of the progress that we made in the first 50 days. Now is the time I think for us to deal with health care in a serious way and start reducing costs as well as expand coverage. We're going to have to keep pushing on the energy front not just with things like the smart grid, but also figuring out how do we move to more renewable energies.

And on education, how do we build on the reforms that we talked about during the campaign and that are funded at least temporarily through the stimulus package. And I gave a major speech on education priorities yesterday.

I think that there's going to be some battles surrounding this budget. There always are. Obviously at the same time as we're moving this budget forward, I'm spending probably the majority of my time stabilizing the financial system. There are some who've argued that we can't do all of these things at once and that we should instead just focus on Wall Street and banking, and not deal with the enormous pressures that families are feeling on a day-to-day basis. I think that would be a mistake. I think that extraordinary times call for extraordinary measures.

And so even as we're working on financial stabilization, reregulating Wall Street, we're going to keep on pressing to get the investments that will ultimately lead to long-term economic growth.

So -- I also have Iraq and Afghanistan to deal with. (Laughter.) But I figured that would at least get us started. So why don't we just go around the room. I'll try to make sure that everybody gets a question. Since we've got somewhat limited time, I'll try to keep my answers short, if you guys can keep your questions short.

All right. Michael.

Q Thank you, Mr. President, for having us today. Since we're only going to get maybe one shot, I want to ask you a question that's of great concern to the people of my state of New Mexico. And as you're fully aware, Mexico is besieged by drug-related violence. In my state there's a very real concern that this violence will spill over to the border; in a few cases, it already has. What specifically does the administration plan to do to help contain this violence? And on a related note, if there's anything you could say about immigration reform and when we might see some sort of action on that front.

THE PRESIDENT: Well, as you know, the first meeting with a foreign leader that I had after my election was with President Calderón in Mexico, who I believe is really working hard and taking some extraordinary risks under extraordinary pressure to deal with the drug cartels and the corresponding violence that's erupted along the borders.

So this past week Admiral Mullen, Chairman of the Joint Chiefs of Staff, visited with his counterparts in Mexico. Janet Napolitano, our director of Homeland Security, a border state governor, has been convening meetings with all the relevant agencies and consulted with the governors down there.

We expect to have a full -- a fully -- or a comprehensive approach to dealing with these issues of border security that will involve supporting Calderón and his efforts in a partnership; also making sure that we are dealing with the flow of drug money and the guns south, because it's really a two-way situation there. The drugs are coming north; we're sending funds and guns south -- and as a consequence, these cartels have gained extraordinary power.

And so, our expectation is to have a comprehensive policy in place in the next few months.

With respect to immigration reform, to some degree the collapse of housing construction in the country has slowed the flow of illegal immigrants coming into the country, but it remains a serious concern. And our approach is to do some things administratively to strengthen border security; to fix the legal immigration system, because a lot of the pressure -- or a lot of the impetus towards illegal immigration involves a broken legal system -- people want to reunify families and they don't want to wait 10 years.

I think we can make some progress on that front, and we've started to talk to all the parties involved and both parties here in Washington about the prospects of taking legislative steps. But obviously we've got a lot on our plate right now. And so what we can do administratively, that's where we're going to start.

Q Thank you very much.

Q Mr. President, the numbers that came out today show that Indiana lost 59,400 manufacturing jobs last year. You've been in Elkhart, you've seen the ravage there. Aside from a bailout to the auto industry and the RV industry, are there policies that the state of Indiana ought to be embracing to strengthen its economy, or is the manufacturing sector in Indiana and elsewhere doomed?

THE PRESIDENT: Well, look, obviously I come from a neighboring state, and if you think about northwest Indiana, it's as much a part of the Chicago regional economy as Indiana's. And so I'm very mindful of what's been happening. But I think that also points to where the opportunities are. Both Chicago and Indianapolis have done relatively well, those regions, because of a diversified economy.

So what started off as hardcore traditional manufacturing towns made the transition to other areas -- building on the universities, setting up research parks, thinking about innovative sectors in bio-medicine or in energy technologies.

And so part of what I think every state should be doing right now is figuring out, A, how do we invest in our people so that we're attracting world-class businesses who are looking for world-class employees. I think getting K-12 education right, not short-changing higher education -- I think those things are absolutely critical; thinking about where can -- where do strategic infrastructure investments make sense. You know, if you think about the Midwest, one of the problems is, is that -- this is my stenographer. She just wants to make sure that I'm not tripping over myself.

One of the exciting things that we put in our stimulus package, for example, was high-speed rail, and is there an opportunity to connect Chicago, Indianapolis, Detroit, Milwaukee, St. Louis, so that we're linking up some of these major metropolitan hubs in ways that provide us a competitive advantage in the world economy.

I think making sure that we are setting up research facilities or encouraging and attracting researchers, venture capital that spins off new technologies into commercial applications -- some states do that better than others. Obviously Silicon Valley is the best example of it, but Massachusetts, along Route 128, did it very well. There's no reason why working with some of the world-class universities that exist in the heartland in the Midwest that we don't adopt some of those same practices.

So we're going to do everything we can to preserve our manufacturing base. We have to recognize that some of those workers who used to manufacture steel now are going to be manufacturing solar panels. And we've got to make sure that they're equipped to do that. Okay?

Q Thank you, Mr. President. You named a special envoy today to oversee the closure of Guantanamo. I'd like to ask you about that. Among the places being -- possibly being considered as an alternative to those prisons is Fort Leavenworth, Kansas. There's a wall of opposition --

THE PRESIDENT: Where my mother was born, by the way.

Q Exactly. There's a wall of opposition to that -- local officials, people in the area and plus from the congressional delegations of those states. How would you explain the rationale between the possibility -- if a place like Leavenworth would be chosen, the rationale behind that, and reassuring people of their safety and security?

THE PRESIDENT: Well, keep in mind we haven't made any decisions on this. But also recognize that these individuals who have been imprisoned, many of whom are very violent or who have been detained, many of whom are violent and are pledging violence against the United States, once captured are similar to criminals who have engaged in violence of other types. They are a serious risk, but so are many of the people who are currently in prison. And we would not -- we would never put people into a situation that elevated the risks for surrounding communities. And that will obviously be something that we take very seriously as we're making these decisions moving forward.

But we already have experience with terrorists who are in federal prisons. And there's been no indication that the safety and security of prison guards or the surrounding communities have been compromised as a consequence. That doesn't mean that it's not a serious issue. I recognize why people are concerned. We haven't made any firm decisions on this yet. But I have every confidence that we can determine the ultimate fates of those in Guantanamo in a way that's consistent with our values, consistent with our ideals, and that keeps us safe and secure.

Q Thank you, Mr. President.

Q Mr. President, yesterday you called for eliminating restrictions on the number of charter schools while enforcing some vigorous standards. In Ohio, the Governor has called charter schools a destructive influence on public education, a few years ago tried to have a moratorium on new charters, now wants to cut state spending by about 20 percent for charter schools and restrict some other funding. I'm wondering whether you've ever talked with him about this, and is this just a fundamental disagreement between the two of you?

THE PRESIDENT: You know, I haven't had a conversation with Governor Strickland. I know that part of his concern was prompted by some bad experiences with charters in Ohio that weren't up to snuff. And if you looked at my statement yesterday, what I said was not only should we lift the cap on charters, we should also shut down charters that aren't meeting standards. I don't think that's inconsistent with Governor Strickland's position.

My goal here is to create laboratories of innovation so that in the public school system, we are on a race to the top as opposed to stuck in the old ways of doing things. And we've got to -- we've got to do that. In your home town of Cleveland, I don't know off the top of my head what the dropout rate is, but I've got to assume that it's hovering around 50 percent. If you look at the number of children going through the Cleveland public schools who are actually prepared to go to college, it's probably one out of seven or eight or 10. And that's just not acceptable. It's not acceptable for them, it's not acceptable in terms of America's economic future. And so we've got to experiment with ways to provide a better educational experience for our kids, and some charters are doing outstanding jobs.

So, the bottom line is to try to create innovation within the public school system that can potentially be scaled up, but also to make sure that we are maintaining very high standards for any charter school that's created.

Q Well, I have to ask you an ethanol question.

THE PRESIDENT: Go ahead.

Q The biofuels. As you probably know, your Agriculture Secretary is joining the ethanol industry and calling on the EPA to do an immediate increase in the ethanol limit to 12 or 13 percent, in advance of doing a higher 15 or 20 percent. Engine manufacturers, the automakers have been opposed to this. What is your position? Are you going to get involved in this decision by EPA?

THE PRESIDENT: At some point I usually get involved. If it -- somebody explained to me that nothing comes to my desk if it's easy. (Laughter.) It means that somebody else has solved it. And I suspect that this one will be reconciling a lot of different issues.

As you know, I've been a supporter of biofuels. I think it is an important ingredient in our overall energy independence. I've also said -- and I said during the campaign trail in Iowa, in front of farmers -- that it was important for us to transition to the next generation of biofuels, that we've got to do a much better job of developing cellulosic ethanol, that corn-based ethanol, over time, is not going to provide us with the energy-efficient solutions that are needed.

And I want to make sure, though, as somebody who comes from a corn-growing state, that the progress that we've made in building up a biofuels infrastructure and the important income generation that has come from ethanol plants, that that is sustained, that that's maintained.

So our challenge, I think, is to see our current ethanol technology as a bridge to the biofuels technologies of the future. And that's what we want to invest in, and that's what I'll be directing my Department of Agriculture to focus on.

Q Mr. President, you already mentioned the budget fight. I'd like to talk to you a little bit more about that, the one that's coming up. The budget outline is an extraordinary document in many ways, and encapsulates a large part of the governing agenda that your administration has laid out. It's no surprise the Republicans don't really like it. But the interesting thing is, it may be the centrist Democrats who are the -- this evolving coalition of centrist Democrats and Republicans in the Senate, and to some degree the Blue Dogs in the House, that are the real problem as they begin to look at the budget and find objections. Could you talk a little bit about that, the coming budget fight, but specifically what you can do to make sure that the vision in that document simply isn't dismantled as it goes through the messy budget process?

THE PRESIDENT: Let me sort of provide you an overarching frame, because I think that -- you know, there's -- the way that it has been discussed, I think, in some cases overstates the degree to which there's some massive transformational shift. On the other hand, in some ways it understates, I think, the significant reforms that are embedded in the budget.

So, point number one, this is a pretty honest budget. You've got billions of dollars that we've put into the budget that for the last eight years at least have never been acknowledged as costs. Fixing AMT, which is about $70 billion a year -- that was just off the books. The war in Iraq -- off the books. The way budgeting was done, it presumed that there was never, ever a national emergency arising out of a hurricane, a flood or tornado; that none of them existed.

Now, if we had continued on -- had we applied the same gimmicks and tricks to our budget as folks have been putting up with for the last eight years, including members of Congress, we could make our numbers look really pretty. We thought that that was the wrong approach.

So, number one, we have provided I think a honest document of what the costs of government are right now.

Second point is that on the revenue side, I campaigned during the election and was not shy about it that we needed to restore some balance to our tax code; that over the last decade the average worker has seen no increase in their wages or incomes when you factor in inflation -- just been flat; whereas the top 5 percent, but more particularly the top 1 percent, and even more particularly the top one-tenth of 1 percent, had seen extraordinary gains in their incomes.

And what I said was, is that we needed to return to the tax structure that existed during the '90s under Bill Clinton and let the Bush tax cuts lapse. That's what this budget does.

Now, if you think about it, just to go back to the budget gimmick issue before, since 2001 part of the trick that had been perpetrated on the American people was to say that the Bush tax cuts would lapse in 2010 and that's why this wasn't a huge budget-buster.

So, in effect, all we're doing is actually moving forward with the premise of the budget that the Republicans presented about five, six years in a row, which was that this was supposed to lapse in 2010. For them to suggest now that this is some radical assault on the rich I think just makes no sense whatsoever.

Here's what we do, though -- we say that on health care, energy and education, it's time for us to make investments that had been put off for decades and had made us less competitive. And every dime of increased spending that we include in those areas we offset either with additional revenues or with cuts, and we cut a lot of stuff.

I mean, we're looking at billions of dollars of cuts out of Medicare's Advantage program, where we're subsidizing insurers but not making seniors any healthier. We are making significant cuts in procurement -- $40 billion that we've identified by making sure that we're not engaging in the same no-bid contracting that has been such a problem.

In fact, if you look at the trajectory of our non-defense discretionary spending, which is what usually people think about when they think about whether a budget is loaded up with a bunch of nonessential spending, following our budget we would drive non-defense discretionary spending down to the lowest levels since they started keeping records back in '62 -- much lower as a percentage of GDP than it was under Reagan or under Bush.

So really what the -- what the big arguments are going to be about are, number one, do you believe that now is the time for us to deal with health care in a serious way? And if you're serious about long-term fiscal responsibility and dealing with Medicare and Medicaid, then you can't say we're not going to deal with health care now. That's our biggest problem. If health care continues to go up at 6, 7, 8, 10 percent a year, then we can't solve our budget deficits and we can't solve our national debt.

So I'm happy to have that argument with anybody. I also think that on the energy front, if we aren't willing to start putting a price on carbons that are contributing to climate change but also encourage us to use fossil fuels that we end up importing from other countries, then we can talk all we want about energy independence -- we're not going to get there.

And on education, if we're pricing people out of the college market, if nobody wants to teach because teachers don't get paid much, if we're not investing in early childhood education, if we're not investing in science and technology, then we're going to fall behind.

So whether we're talking about Republicans or my fellow Democrats, my argument is going to be that these are the -- these are the right priorities for America, these are the right priorities for long-term economic growth. Yes, they require some uncomfortable votes. If it was easy, I'm assuming it would have been done 20 years ago or 30 years ago. It's not easy, but it's the right thing to do.

Q Thank you, Mr. President. I wanted to ask you about your Cabinet and your senior staff. By my count, you have about seven folks from the Midwest, six from the West, a crowd from the Northeast, and with maybe the exception of your able-bodied press secretary --

THE PRESIDENT: Gibbs?

Q Mr. Gibbs.

THE PRESIDENT: He's the only Southerner?

Q I think so.

THE PRESIDENT: You guys are feeling neglected?

Q Yes. (Laughter.) So I'm wondering why is that and what you don't like about the South?

THE PRESIDENT: I love the South. (Laughter.)

Q And I'd also ask -- like to ask you about -- I think this is an unrelated question -- the salmonella outbreak and food safety originated in Georgia and what you think needs to be done about that?

THE PRESIDENT: Well, look, the -- I love the South. I've got to admit that we have thought a lot about finding the very best people for the jobs and haven't been thinking with great intensity about regionalism, because partly except for food and sports teams and weather, I mean, we're one country. And I think that people are so mobile these days that -- I tend to think of ourselves as all just Americans.

But if you've got some great Southerners -- (laughter) -- who want to work for us, please let me know, because we're always open. I love the South.

Food safety is a serious concern, and I've directed both FDA -- I've directed both the Department of Agriculture and Health and Human Services to work to come up with a plan so that a lot of these different agencies that have some jurisdiction over food safety are integrated in a much more effective way and things aren't falling through the cracks.

There's a lot of work that needs to be done in working on the front-end with food producers so that there are better warning signals of potential problems than we have right now. And we also need to be able to trace sources of food contamination much more quickly than we're doing right now. And technology can be helpful, but the key is actually reorganizing the agencies that are responsible so that they're working more in concert than they are right now.

Q Thank you, and thanks for doing these. I actually have a follow-up on FDA, and that is, do you still support that agency regulating tobacco, and if so --

THE PRESIDENT: Yes.

Q -- what's the timeline you'd like to see Congress working on that? And is the agency up to the task if we're still having -- just like we saw last month with the peanut butter -- food problems?

THE PRESIDENT: You know, we're probably going to have an announcement on this fairly soon so I don't want to step on my own story, but I do think that the FDA has an important role to play on an issue that obviously has enormous impact on the health of the American people. That's all you're going to get out me there. (Laughter.)

Go ahead.

Q I have a question sort of similar to the Atlanta question. The Voting Rights Act, as you know, does not -- Birmingham --

THE PRESIDENT: I was just about to say, the -- don't I have some Birmingham people in my Cabinet? (Laughter.)

Q Well, Gibbs is from Auburn.

THE PRESIDENT: There you go, it's close. (Laughter.)

Q The Voting Rights Act, as you know, does not apply -- especially section 5 -- does not apply to the entire country. The South is still required to get pre-clearance for election-related changes. There's an argument in Alabama and I think some other Southern states that they've sort of outgrown that; they no longer need that close scrutiny from the Justice Department to make those kinds of sometimes very simply changes. I know in 2006 you supported reauthorization, but do you still think the South needs this close supervision of Justice on -- under section 5?

THE PRESIDENT: Well, I got to be careful here because I'm a law professor so I may get too deep on the weeds on this stuff, get --

Q No, try it. Go for it. (Laughter.)

THE PRESIDENT: But the idea behind section 5 of the Voting Rights Act is that if there are discriminatory barriers to voting, that the Justice Department has some mechanism to actually deal with it; that you don't just leave it up to the states to self-correct, but that you've got some basis for intervention.

The most obvious kinds of violations don't happen very often these days -- the classic being sort of the poll tax or the county clerk who just turns away African American voters. That's not really the key issue in the Voting Rights Act these days.

Typically, the issues that come up now have to do with whether there is a meaningful opportunity to select a candidate of your choice. If you've got a situation in which there is very racially polarized voting and you've got -- you know, 30 percent of the population is Hispanic or African American and the rest is majority white and it's a polarized part of the country and you've got at-large voting systems, well, it's conceivable that on a city council or a county board, you'd never have any African Americans or Hispanics on that board.

So that's what section 5 of the Voting Rights Act does, is to try to pre-clear, see if there are any changes in the voting systems that would prevent people from exercising a meaningful vote.

The key concept I think in judging whether or not a jurisdiction still should be jumping through that hoop is probably the degree to which there are still highly racially polarized voting -- under the parlance, racial black vote. And, you know, there are probably some parts of the south that were under section 5, that if you looked at the data are no longer that polarized. There are other parts that are probably still very polarized.

So I think it's the task of the courts to look -- and Congress, in future reauthorizations -- to look at the evidence and to see is that kind of polarization still taking place. And is that -- you know, it's not enough just to look and see is that one factor out of 10 or 15 factors, is it such a significant factor that, in fact, it's really preventing certain groups from having any representation whatsoever.

So I guess that's all a long way of saying that you really have to look at the data and examine whether or not it still has some applicability.

The only other thing I'd -- the only other point I'd make about this is keep in mind that the pre-clearance is just that -- it requires before you make a change to go before the D.C. circuit or the federal courts and just show that these changes aren't a problem. That's not such a huge hurdle to jump through. So I think it's legitimate to err on the side of caution before you started eliminating that requirement.

Q Thank you.

Q Mr. President, I wanted to follow up on the border question and the violence in Mexico. President Calderón recently decided to send an additional 5,000 of his troops to the border. The Texas governor has asked for a thousand U.S. troops or Border Agents to reinforce the border on our side. What is the tipping point in you mind, where the violence gets so bad that you need to act?

And related to that, you named a new drug czar today. You've taken that position out of the Cabinet. You in the past have talked about decriminalization of marijuana. Are we still engaged in a war on drugs?

THE PRESIDENT: Well, let me first start on the troop issue. We've got a very big border with Mexico. And so I'm not interested in militarizing the border. I am interested in providing the kind of -- in creating the kind of partnership with the Mexican government that ensures the safety of U.S. citizens, the safety of Mexican citizens, and allows for the continued cross-border trade that's so important to the region.

If we're going to examine whether and if National Guard deployments would make sense and in what circumstances they would make sense as part of this overall review of our border situation -- I haven't drawn any conclusions yet. I don't have a particular tipping point in mind. I think it's unacceptable if you've got drug gangs crossing our borders and killing U.S. citizens. I think if one U.S. citizen is killed because of foreign nationals who are engaging in violent crime, that's enough of a concern to do something about it.

With respect to -- what was the second question?

Q If decriminalization of the marijuana laws --

THE PRESIDENT: I think what gave me pause on that question was I think you -- I'm not sure it's accurate to say that I -- well, the implication was somehow that I think we should weaken our drug laws. That's never been my position. I think that what we do have to -- I think the approach that we do need to take is to make sure that we have a both/and approach as opposed to an either/or approach.

I think traditionally the debate is either interdiction, criminalization, longer drugs -- longer prison sentences for not only dealers, but users; that's one approach. And then the other approach would be sort of a public health, decriminalization approach.

My attitude is we do have to treat this as a public health problem and we have to have significant law enforcement. And, you know, if we can reduce demand, obviously that allows us to focus more effectively where interdiction is needed, where we've got to go after serious drug dealers and narcotrafficking.

Right now I think that we're fighting with one hand tied behind our back because our effort to lower demand is grossly underfunded, not as effective as it needs to be. The average person who is seeking serious substance abuse treatment in a big city, like Dallas or Chicago, typically has a three-, four-, six-month waiting list to get enrolled in a program. I think that's a problem and most law enforcement officials I think would agree that it is a problem.

Q Mr. President, I have a general question about your overall communication strategy as President. I mean, here we are on day 51, I think this is -- and I appreciate you talking to us regional reporters -- you've done outreach with bloggers, I think you've done outreach to columnists across the political spectrum. There's still a lot of fear out there about the economy, the stock market, people aren't buying cars, they're not buying homes.

Do you feel that you've done a good enough job so far in really laying out what the game plane is for your administration in tackling this financial mess that's pulled the rug out from under the economy?

THE PRESIDENT: Well, you know, I think that we can always do a better job. Keep in mind it's only been two weeks since I gave a joint session speech to Congress, the day after which everybody said, boy, that was really clear, and, we have a clear sense of what's going on. You know, the reviews were pretty good. I recognize, I think, the degree of concern that people have.

We've been in office all of seven weeks so far. This is a crisis that was eight years in the making -- maybe longer in some, you know, certain aspects of it. The buck stops with me and we're responsible, but it's going to take some time. And the truth of the matter is that the American people I think understand that it's going to take some time. If you look at the public polling, they recognize it's going to take a while to dig ourselves out of the hole.

We passed the stimulus package and I've been talking almost every day about elements of the stimulus package, the recovery package that are going to be having an immediate impact in the various hometowns that you represent. I think Mayor Rybak, the day we signed it, talked about the 57 police officers that wouldn't be laid off as a consequence of the stimulus.

So I think people are getting the message that slowly, surely we are making progress on these fronts. We released a housing plan that is providing significant relief and you're already starting to see an uptick in refinancings that are providing families with relief. And in certain pockets of the country you're starting to see housing prices stabilize after a long drop.

You know, I think the one area where there's still significant uncertainty has to do with the bank issue. And that's obviously a particular concern to Wall Street. The challenge for us there is that we are in the process of undergoing -- or conducting these stress tests of the banks to get a better sense of what their capital positions are and how strong they are. And what we don't want to do is to prejudge those tests or make a lot of statements that cause a lot of nervousness around banks that are already having difficulty right now.

So on that particular issue, you know, we've got to I think explain to the American people -- and as I said, we can always to do better -- why it is so important to get lending going again, get credit flowing to businesses and consumers. I'll be making statements about this tomorrow, the next day, in my radio addresses, next week. And the main message that I'm going to be delivering is that it's going to take some time to get out of this deep hole we're in -- but we're going to get out of it.

The other message, though, is that there are no shortcuts to long-term economic growth and we can't just keep on doing the same things that we were doing before and somehow expect that all our problems are going to be solved. We've got to tackle some of these things like health care, energy, and education that have been put off for too long.

Q Thank you, Mr. President. I have a question about NASA, in honor of the Discovery launch tonight. Right now, the retirement of the space shuttle in 2010 is going to devastate the Space Coast economy down in Florida. You're looking at about 3,500 job losses, at the least, at the Center -- which will multiply to as many as 28,000 jobs throughout that entire area.

Right now, you reaffirmed President Bush's decision to retire the shuttle in 2010. I guess what I want to know is why you decided to keep that 2010 retirement date for the shuttle, and what type of plans you may have to try to save the Space Coast from an economic crater?

THE PRESIDENT: Well, first of all, we've authorized, and we're budgeted for, additional shuttle launches that had not been scheduled. And so we're extending the life of the shuttle, because, A, I think it is doing some important work; and B, we're very mindful of the economic impact of the space program in the region.

I will soon be appointing a new NASA director. I think it's important for the long term vibrancy of our space program to think through what NASA's core mission is, and what the next great adventures and discoveries are under the NASA banner.

NASA has yielded -- or the space shuttle program has yielded some extraordinary scientific discoveries. But I think it's fair to say that there's been a sense of drift to our space program over the last several years. We need to restore that sense of excitement and interest that existed around the space program. And shaping a mission for NASA that is appropriate for the 21st century is going to be one of the biggest tasks of my new NASA director.

Once we have that vision, then I think it's going to be much easier to build support for expanding our space efforts. But what I don't want NASA to do is just sort of limp along here. And I don't think that's good for the economy of the region either.

Q Mr. President, in appointing a FEMA administrator last week, were you signaling your intention to keep the agency as part of the Department of Homeland Security? And now that you've sent some Cabinet members to New Orleans, might we expect your presence in the city, perhaps even for the new hurricane season?

THE PRESIDENT: I'm just still trying to figure out my schedule for tomorrow -- (laughter) -- so I don't want to get too far ahead of myself. Sending Secretary Donovan and Napolitano signaled that we're going to be focused on New Orleans' reconstruction, and we're going to be paying a lot of attention to the systems that are in place to protect from hurricanes in the future.

And I -- what was the first question?

Q On FEMA, and whether FEMA stays within DHS.

THE PRESIDENT: FEMA. I have not made a final decision on that. But whether FEMA stays inside DHS, or is once again a standalone agency, the one thing you can be certain of is that it's going to do an outstanding job performing its tasks. And I think that the new director has gotten uniformly high grades.

Whenever you got Haley Barbour, Jeb Bush, and Democrats in Congress agreeing on somebody, they know what they're doing.

Q Thanks, Mr. President. I wondered if, first, you could elaborate as a President from Chicago, a little bit on your own vision for high-speed rail in the Midwest -- particularly the idea of a Chicago-to-Milwaukee-to-Twin Cities link.

And then a completely unrelated political question: Whether you're at all surprised by the degree of, sort of, discipline and unity we're seeing in a Republican opposition to your agenda right now?

THE PRESIDENT: Well, let me answer the political question first. I'm not surprised, because opposition is always easy; saying no to something is easy. Saying yes to something, and figuring out how to solve problems, and governing, that's hard. And on this budget debate, for example, if you've got people who on the one hand say, we want to bring down the long term deficit, but we don't want to cut certain programs that are important -- oh, and by the way, we don't want to raise taxes. Well, sounds good. And I'd like to make sure that the Chicago Bulls win the championship every year and the White Sox win the series, but you know, show me how you're going to do it.

So I'm not impressed by just being able to say no. I think what will be interesting is the degree to which my Republican colleagues start putting forward in the form of an affirmative agenda that's not based on ideology, but on the very real struggles and pain that people are feeling right now around the country, and how do we get this economy back on its feet.

In terms of high-speed rail, I think there's enormous opportunities here. Now, I would have loved to have seen more done on high-speed rail in the recovery package, because I think it's the right direction for us to go in. I could not credibly claim that all of the investments that are necessary are short term enough to be in a recovery package, as opposed to be part of our broader transportation bills and budget.

But think about it. I mean, we've laid a transcontinental railway system during the Civil War. Railroads were always the pride of America, and stitched us together. Now Japan, China, all of Europe have high-speed rail systems that put ours to shame. And the potential economic benefits of a high-speed rail link between Chicago and Milwaukee, so that people are avoiding I-94, or the length between Chicago and St. Louis, Detroit, all those Midwestern cities, I think is enormous, and is a very real option with -- although gas prices are low right now, it becomes a very meaningful option for people who don't want to take off their shoes, drive to an airport, pay for parking, suffer delays. So I think there's a very real opportunity.

I should point out that the opportunities around the rail are not just in high-speed rail. I mean, there's some basic freight rail issues in Chicago, Milwaukee, the Midwest, that can also be solved, and would help with the whole distribution of goods in the region that would save business a lot of money. And I hope that we end up spending some time focused on that during the transportation reauthorization.

Last question, because I'm out of time.

Q Mr. President, thanks again for doing this. Given the worldwide context of the economic crisis you're dealing with, are the stimulus measures that you've championed in your mind sufficient to right the economy, absent similar actions by other large economies in the world?

And if I could just turn the question around in a way, there are estimates of, like, a hundred million have been plunged into poverty worldwide. Does the U.S., do you have any interest in their situation, whether from the standpoint of self-interest, national security, or morality?

THE PRESIDENT: Well, it's a great question. I anticipated this question, even though I didn't know you were going to ask it, Jim, because Secretary Geithner is now headed off to the G20 finance minister's meeting as a precursor to our G20 meeting. And what we specifically talked about was, number one, our economic recovery is linked up to the economic recovery of the rest of the world, and vice versa. Up until a few months ago, exports were one of the few bright spots in our economy.

The collapse of worldwide demand costs American jobs and American businesses. And so we want to work with other countries to make sure that they're promoting the kinds of fiscal stimulus packages that can boost demand in their countries. It's important that we don't fall into a protectionist mentality so that each country, even as it's stimulating, is also still promoting the kinds of trade that can help us all grow.

And part of the G20 agenda is also thinking about the adverse impact that this global economic slowdown is having on the poorest of the poor. I think we have all of the above -- a moral, national security, and economic interest in making sure that people in those countries are not suffering even more than they were already suffering, because that can be profoundly destabilizing in all sorts of ways.

You know, there were a couple of questions about the border situation with Mexico. You know, if Mexico's economy can not provide a living wage of any sort to a growing Mexican population, that obviously is going to put more pressure on us in terms of immigration, more people being pushed into the drug trade, and so on.

And that's just one example. There are more severe examples of instability in places like North Africa in the face of drought or shortage of food supplies that can end up causing us real problems.

So figuring out how the developed countries, wealthier countries, even in the midst of hardship, can provide some relief and assistance to those countries, as well, I think is going to be very important.

All right? Okay, guys. You put me through the paces.

Q Thank you, much.

Q Thank you.

THE PRESIDENT: I broke a sweat. (Laughter.)

Q You didn't break a sweat. (Laughter.)

THE PRESIDENT: Thank you, guys. Appreciate it. Take care.

END 3:05 P.M. EDT

CBC News interview with Obama, at the White House, February 17, 2009

MANSBRIDGE: Mr. President, thank you for doing this — Canadians are very excited about your trip.

OBAMA: Thank you.

MANSBRIDGE: When they watch you today sign your recovery bill into law, how concerned should they be that the "Buy America" clause is still there, even though you've given assurances international trade agreements will be respected — how concerned should they be?

OBAMA: I don't think they should be too concerned. You know, I think that if you look at history, one of the most important things during a worldwide recession of the sort that we're seeing now is that each country does not resort to "beggar thy neighbour" policies, protectionist policies. They can end up further contracting world trade.

And my administration is committed to making sure that even as we take steps to strengthen the U.S. economy, that we are doing so in a way that actually over time will enhance the ability of trading partners, like Canada, to work within our boundaries.

And my expectation is, is that where you have strong U.S. competitors who can sell products and services, that a lot of governors and mayors are going to want to try to find U.S. equipment or services, but that we are going to abide by our World Trade Organization and NAFTA obligations just as we always have.

MANSBRIDGE: You mentioned NAFTA. A year ago you were pretty critical of NAFTA. In fact, you even suggested at one point that the U.S. opt out if it couldn't renegotiate. Do you think that's the time now to be making that case, or is it something that's set aside now?

OBAMA: I think there are a lot of sensitivities right now because of the huge decline in world trade. As I've said before, NAFTA, the basic framework of the agreement, has environmental and labour protections as side agreements. My argument has always been that we might as well incorporate them into the full agreement so that they're fully enforceable.

But what I've also said is that Canada is one of our most important trading partners, we rely on them heavily, there's $1.5 billion worth of trade going back and forth every day between the two countries and that it is not in anybody's interest to see that trade diminish.

MANSBRIDGE: Especially now?

THE PRESIDENT: Absolutely.

MANSBRIDGE: Part of that trade involves the energy sector. A lot of oil and gas comes to the United States from Canada, and even more in the future with oilsands development. Now there are some in your Canada — and Canada, as well — who feel the oilsands is dirty oil because of the extraction process. What do you think? Is it dirty oil?

OBAMA: What we know is that oilsands creates a big carbon footprint. So the dilemma that Canada faces, the United States faces and China and the entire world faces, is how do we obtain the energy that we need to grow our economies in a way that is not rapidly accelerating climate change? That's one of the reasons why the stimulus bill that I'll be signing today contains billions of dollars towards clean energy development.

I think to the extent that Canada and the United States can collaborate on ways that we can sequester carbon, capture greenhouse gases before they're emitted into the atmosphere, that's going to be good for everybody. Because if we don't, then we're going to have a ceiling at some point in terms of our ability to expand our economies and maintain the standard of living that's so important, particularly when you've got countries like China and India that are obviously interested in catching up.

MANSBRIDGE: So are you drawing a link, then, in terms of the future of tarsands oil coming into the U.S. contingent on a sense of a continental environment policy on cap and trade?

OBAMA: Well, I think what I'm suggesting is, is that no country in isolation is going to be able to solve this problem. So Canada, the United States, China, India, the European Union, all of us are going to have to work together in an effective way to figure out how do we balance the imperatives of economic growth with very real concerns about the effect we're having on our planet. And ultimately, I think this can be solved by technology.

I think that it is possible for us to create a set of clean energy mechanisms that allow us to use things not just like oilsands, but also coal. The United States is the Saudi Arabia of coal, but we have our own homegrown problems in terms of dealing with a cheap energy source that creates a big carbon footprint.

And so, we're not going to be able to deal with any of these issues in isolation. The more that we can develop technologies that tap alternative sources of energy but also contain the environmental damage of fossil fuels, the better off we're going to be.

MANSBRIDGE: I know you're looking at it as a global situation, in terms of global partners, but there are some who do argue that this is the time, if there was ever going to be a continental energy policy and a continental environmental policy, this would be it. Would you agree with that thinking?

OBAMA: Well, you know, I think one of the, one of the promising areas for not just for bilateral but also trilateral co-operation is around this issue. I met with President Calderon here in the United States, and Mexico actually has taken some of the boldest steps around the issues of alternative energy and carbon reductions of any country out there. And it's very rare for a country that's still involved in developing and trying to raise its standard of living to stay as focused on this issue as President Calderon's administration has.

What I think that offers is the possibility of a template that we can create between Canada, the United States and Mexico that is moving forcefully around these issues. But as I said, it's going to be important for us to make sure that countries like China and India, with enormous populations and huge energy needs, that they are brought into this process, as well.

MANSBRIDGE: Afghanistan. As you know, Canada has been there from the beginning, since the fall of 2001, and has suffered extreme casualties in its combat missions there. And the Canadian Parliament has decided, out of combat by the year 2011. When you get to Ottawa, will you have any suggestions to Canada that it should reconsider what its role in Afghanistan is?

OBAMA: Well, first of all, I think the Canadian contribution has been extraordinary, and for all the families who have borne the burden in Canada, I think we all have a heartfelt thanks.

I'm in the process of a strategic review of our approach in Afghanistan. Very soon we will be releasing some initial plans in terms of how we are going to approach the military side of the equation in Afghanistan.

But I am absolutely convinced that you cannot solve the problem of Afghanistan, the Taliban, the spread of extremism in that region solely through military means. We're going to have to use diplomacy, we're going to have to use development, and my hope is that in conversations that I have with Prime Minister Harper, that he and I end up seeing the importance of a comprehensive strategy, and one that ultimately the people of Canada can support, as well as the people of the United States can support. Because obviously, here as well, there are a lot of concerns about a conflict that has lasted quite a long time now and actually appears to be deteriorating at this point.

MANSBRIDGE: But are you saying that you will or you won't ask Canada to remain in a combat role?

OBAMA: Well, I think, you know, we've got until 2011, according to the Canadian legislature, and I think it's important for the Canadian legislature and the people of Canada to get a sense that what they're doing is productive. So what I will be communicating is the approach that we intend to take. Obviously I'm going to be continuing to ask other countries to help think through how do we approach this very difficult problem. But I don't have a specific "ask" in my pocket that I intend to bring out in our meetings.

MANSBRIDGE: Is Afghanistan still winnable?

OBAMA: Well, I think Afghanistan is still winnable, in the sense of our ability to ensure that it is not a launching pad for attacks against North America. I think it's still possible for us to stamp out al-Qaeda to make sure that extremism is not expanding but rather is contracting. I think all those goals are still possible, but I think that as a consequence to the war on Iraq, we took our eye off the ball. We have not been as focused as we need to be on all the various steps that are needed in order to deal with Afghanistan.

If you've got narco-trafficking that is funding the Taliban, if there is a perception that there's no rule of law in Afghanistan, if we don't solve the issue of the border between Afghanistan and Pakistan, then we're probably not going to solve the problem.

MANSBRIDGE: I'm down to my last minute. A couple of quickies on Canada, your sense of the country. I mean, I think, as you may know, you carry Canada on your belt. That BlackBerry is a Canadian invention.

OBAMA: Absolutely.

MANSBRIDGE: You've been to Canada once. What's your sense of the country?

OBAMA: Well, yes, I've been to Canada a couple of times. Most recently it was to visit my brother-in-law's family, who was from Burlington, right outside of Toronto.

Look, I think that Canada is one of the most impressive countries in the world, the way it has managed a diverse population, a migrant economy. You know, the natural beauty of Canada is extraordinary. Obviously there is enormous kinship between the United States and Canada, and the ties that bind our two countries together are things that are very important to us.

And, you know, one of the things that I think has been striking about Canada is that in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy in ways that we haven't always been here in the United States. And I think that's important for us to take note of, that it's possible for us to have a vibrant banking sector, for example, without taking some of the wild risks that have resulted in so much trouble on Wall Street.

MANSBRIDGE: Appreciate this very much. You still haven't seen your first hockey game.

OBAMA: I'm looking forward to making it happen at some point.

MANSBRIDGE: Mr. President, thank you very much.

OBAMA: Thank you so much. Appreciate it.

Interview of the President by Columnists Aboard Air Force One, February 13, 2009

INTERVIEW OF THE PRESIDENT
BY COLUMNISTS

Aboard Air Force One
En Route Chicago, Illinois

5:05 P.M. EST
THE PRESIDENT: How are we going to run this thing? Are you
guys all taking turns?

Q Yes, we plotted it all out.

Q We did. And I think we all feel, not surprisingly, a
question -- the first question would be what lessons are you
taking out of the experience of passing the stimulus bill in
terms of how you will deal with congressional Democrats,
congressional Republicans, and for that matter, the country, in
moving forward your agenda. What did you learn from this
experience?

THE PRESIDENT: Well, first of all, let me describe for you
the process and the substance of how we put this package
together. And then I’ll be happy to talk about the politics of
it. During the transition I came in, and my first charge to my
economic team was canvas economists across the political
spectrum and present to me as diverse a set of views as
possible, and a set of recommendations in terms of how we can
get the economy moving again and put people back to work.

Now, at that point when we started, we hadn’t yet seen
December’s job report, January’s job report, but we knew that
things seemed to be worsening rather than getting better.
Almost to a economist, there was a consensus that we needed a
large stimulus package not as the silver bullet to solve our
economic problems, but as a necessary component to solving our
economic problems, and in terms of scope, that we were going to
need something between $600 billion and $1.3 trillion. That was
the range that was presented to us.

There also was consensus among economists that the best
approach to spending that much money and getting the stimulus
out of it was to diversify a little bit, so have a tax cut
component -- there was a generally strong feeling that tax cuts
targeted at people who were most likely to spend would have the
biggest impact; a state fiscal relief component, or a countercyclical
spending component, so everything from -- food stamps
to unemployment insurance -- again, stuff that would be spent
out quickly and, in some cases, help prevent a worsening of
layoffs and a spiral downward. And then a third component of
infrastructure.

Now, each of these components had pluses and minuses. For
example, tax cuts, you can get them out quick, but the general
view is that you don’t necessarily see a dollar of spending by
consumers for every tax cut they receive. Infrastructure, you
get probably the biggest multiplier effect -- for every dollar
you spend you might get $1.5 worth of demand out there, but
necessarily you can’t get all those infrastructure projects done
within a two-year time frame and the start-ups may be longer.

So our whole goal was to provide a framework for Congress
that presented the best mix based on the best available
information that we’d gotten. I raise this because I think that
some of the critics ended up fastening on this pet project or
this program that they suggested was not stimulative; in fact,
it would be hard to find economists who would argue that the
guts of the program, the core of what just passed the House and
hopefully will pass the Senate while we’re in the air or shortly
after we land is not pretty well designed to get the economy
moving again.

And one last point -- one last goal that we set out, and
that was if we were going to spend this much money, our number
one priority being to get jobs in place and to get the economy
moving again, wouldn’t it also be helpful for us to make sure
that we laid some made -- that we made an investment in long-
term economic growth -- that we put a down payment on things
that have been deferred for too long? So if we’re going to
spend money on education, then can we try to introduce some
reform elements into the education portion? If we are going to
tackle health care by making COBRA more affordable, can we also
look at health IT as a way of driving down costs over the long
term? How much infrastructure can we design around clean
energy?

Now, again, there’s some tensions on that front because
some of the most innovative down payments might not spend out in
two years. One of the things I was pushing for hard was can we
get the entire smart grid done, and it turns out that actually,
historically, a lot of these lines are laid by private
companies, so we couldn’t spend as much as you would think on
that part of infrastructure, but we have kick-stared it in the
package.

All right, anyway, that’s all the substance of it. Now, in
terms of what I’ve learned on the politics of it, I think what
I’ve learned is that I’ve got a great team because we moved a
very big piece of legislation through Congress in record time.
And that was not easy to do. And I think the end product is not
a hundred percent of what we would want, but it is a very good
start on moving things forward.

I made every effort to reach out to Republicans early to
get their input and to get their buy-in. I think that there were
some senators and House members who have a sincere philosophical
difference with the idea of any government role in boosting
demand in the economy. They don’t believe in Keynes and they’re
still fighting FDR. And no matter what we did, said, whatever
the process was, they just don’t agree that this is the best
prescription. And I think we can disagree without being
disagreeable on that front.

I also think that there was a decision made that was
political and tactical on their part where they said, you know
what, if we can enforce conformity among our ranks then it will
invigorate our base and will potentially give us some political
advantage, either short term or long term. And whether that’s a
smart strategy, I think you should ask them.

The last point I would make, though, is that given the
urgency of the situation right now, my consistent goal
throughout this process is: Are we getting the most immediate,
most effective relief possible to American families who are
losing their jobs, losing their homes, losing their health
care? I welcome Republican participation in that process, but
ultimately I’m answerable to the American people. And my
determination was to get it done, and I think that we’re going
to get it done.

Q Just to follow up -- well, I was going to ask, do you
think you let it hang out there too long, getting attacked and
let the House -- there was this effort to split you and the
House, and Republicans are saying, oh, Obama is not really for
this. Did you leave that out there too long to create a -

THE PRESIDENT: Look, I mean, the fact of the matter is, is
that once a decision was made by the Republican leadership to
have a party-line vote -- a decision that I think occurred
before I met with them -- then I’m not sure that there was a
whole host of things that we were going to do that was going to
make a difference. But again, my bottom line was not how pretty
the process was; my bottom line was am I getting help to people
who need it.

Going forward, each and every time we’ve got an initiative
I’m going to go to both Democrats and Republicans and I’m going
to say, here’s my best argument for why we need to do this. I
want to listen to your counter-arguments; if you’ve got better
ideas, present them. We will incorporate them into any plans
that we make, and we are willing to compromise on certain issues
that are important to one side or the other in order to get
stuff done. There are 535 members of Congress; they’re not
potted plants. Their job is to represent their constituents and
they’ve got ideas, too. So I’m not interested in bulldozing
them. On the other hand, I’m answerable to the American people
in an emergency economy. And what I won’t do is to engage in
Washington tit-for-tat politics and spend a lot of time worrying
about those games to the detriment of getting programs in place
that are going to help people.

Q Mr. President, you got no votes in the House on the
stimulus package and only a tiny number of Republicans in the
Senate. Is there any way to say that the Republicans made a
good-faith effort to function in a bipartisan way on the
stimulus package?

THE PRESIDENT: Well, look, as I said, I don’t want to
question the sincerity of some of the Republicans who opposed
this plan. They just may have a different theory about how the
economy works. Now, I have to say that given that they were
running the show for a pretty long time prior to me getting
there and that their theory was tested pretty thoroughly and
it’s landed us in the situation where we’ve got over a trillion
dollars’ worth of debt and the biggest economic crisis since the

Great Depression, I think I have a better argument in terms of
economic thinking.

But, again, I don’t question their sincerity. I do think
that over time, as we keep on reaching out, and as I think the
American people express their view that we need to start
actually doing something about jobs, housing, health care,
education, and so forth, that there will be some counterveiling
pressures to work in a more constructive way.

Q Do you think -- I’ll just close, maybe, this subject
-has this experience changed your expectation of what you might
be able to achieve in terms of Republican support, or the way
you will seek it? Has it changed what you think is possible?
THE PRESIDENT: You know, I am an eternal optimist and -that
doesn’t mean I’m a sap -- (laughter) -- so my goal is to
assume the best, but prepare for a whole range of different
possibilities in terms of how Congress reacts.

Keep in mind, I do think that because we had to lead with a
recovery package that touched on sort of a -- one of the core
differences between Democrats and Republicans, this particular
debate may have exaggerated some of these issues. And when we
start talking about how we’re going to manage the budget, or
when we start talking about how we’re going to approach
entitlements, or when we start talking about foreign policy,
that there’s going to be greater flexibility. But we’ll have to
see.

Q Mr. President, you had to give up quite a bit to
really -- in order to try to make a deal with the Republicans.
What would you like to restore first?

THE PRESIDENT: Well, look, first of all, let’s get this
package passed. I think it’s a great start. And -- well, if
you think about the number of jobs that are going to be created,
the amount of progress that we can make on, let’s say energy,
for example, where we are doubling alternative fuels, where we
are going to be retrofitting buildings to make them energy-
efficient, where we’re providing a whole host of incentives to
start innovation in new technologies; if you look at what we’re
going to be doing on education and teacher training and
encouraging new approaches; when you look at what we’re doing on
health care, where we do have money now to do what every expert
says, Republican and Democrat, says we should have done 10 years
ago or 15 years ago, and get everybody’s medical records in
digital form; when you think about the roads and the bridges
that are going to be repaired -- there is a lot of stuff in
there that I think is going to be very helpful. And that’s
before you start talking about the immediate relief provided to
families that are hurting.

Now, I think that some of the changes that were made were
-you can argue either way at the margins. I think that there
were some legitimate concerns about programs that were initially
in the House bill that I actually support as policy, but were
not designed to boost the economy. I will say that that
accounted for between one and two percent of the overall
package. And this is an example of where -- somebody was asking
me about sincerity -- I think that from a purely political
tactical point of view, I understand why somebody would gin up
the National Mall or family planning. From a practical point of
view, that was not remotely close to being the core of the
bill.

I do think that we probably could have done more on the
education innovation front. I think we could have done more
with some of the health care reforms that would lower costs. I
think that if you ask governors, Republican and Democrat, around
the country, about their budgets, they would argue that cuts in
help to the states is going to put them in a very bad bind,
particularly if the economy does not turn around fairly soon.
So those are all issues where again, I might have designed it a
little bit differently, but ultimately this is a framework that
is going to create between 3 and 4 million jobs. And that was
my bottom line. I think we’re going to get some good
investments and I think it’s an enormous accomplishment.

Q I wanted to ask a quick question. You often -- on
Monday night, for example, you talked about the catastrophe that
could happen -- of course we don’t know for sure what will work
-- what does catastro0phe look like?

THE PRESIDENT: I don’t have a crystal ball, and I don’t
think anybody does, but I think that you can imagine very easily
a scenario in which we duplicate what happened in Japan in the
‘90s, where we paper over core problems in the banking system.
Despite some efforts at stimulus, we never fully get private
credit flowing again, and the economy contracts severely and
then sort of limps along for a very long period of time.

Keep in mind, though, that even in that scenario, Japan had
an awful lot of foreign currency reserves, they had a surplus
from a positive trade balance. And the United States was
pulling a world economy along. In this situation you’ve got all
the economies around the world, even including China,
decelerating at a fairly rapid rate. So if what happened in
Japan is duplicated here in the United States, there’s nobody
else to help drive the engine of growth, you could end up seeing
an even more protracted and prolonged worldwide contraction.
And I think that would have a severe impact on our quality of
life.

Q Could I ask you on that, the reaction -- put aside
Wall Street’s reaction to Secretary Geithner’s plan, and lots
of, to use your phrase, economists left and right said that they
were, A, concerned that there weren’t enough details there and
why did you put it out then, but, B, substantively, that it may
not go far enough and that there may be -- in order to avoid
Japan you might have to do Sweden -- could you talk about -

THE PRESIDENT: Let me, first of all, emphasize that the
recovery package was critical to help families right now.
Unemployment insurance extensions, health care through a COBRA
that’s affordable, some immediate job creation -- those are very
important. That’s only one leg of the stool. As I said in my
press conference, the second leg of the stool is getting credit
flowing again. And what the first round of TARP accomplished
was to avert potential -- I hate to use the word again, but
potential catastrophe in the banking system. I mean, things
could have melted down much worse. Because of a lack of
clarity, consistency, transparency, what you didn’t see was a
market rebound and credit moving the way it needs to. So the
credit markets still are not functioning the way they should.

Now, this is a hard problem, and that’s why I said, I think
on Nightline the day that Tim Geithner spoke, there are certain
market participants who think that there’s some painless, quick
fix here. There isn’t. Because what happened was that you had
banks making bets, leveraging $30 off of one dollar of subprime
assets; that was duplicated throughout the system, and
deleveraging, sort of working through all those bad debts is
going to be really tough.

Now, we started talking about this, by the way, in
transition as well, and so along parallel tracks, even as we
were working on getting the recovery package done, we were also
talking about how do we get credit flowing to home owners; how
do we make sure that we’re getting small businesses the
resources they need; how do we make sure the banks trust each
other in terms of lending, and even blue-chip companies are able
to shed corporate debt, so they can make payroll and keep people
working.

And as you pointed out, sort of along the spectrum there
are two ways of handling this. There’s the Japan model -- as I
said, they sort of papered things over, never really bit the
bullet, took their medicine, and so you never got credit flowing
the way it should have and the bad assets in their system just
corroded the economy for a long period of time

Sweden, in contrast, took over their banks and took out the
bad assets and then resold the good banks, the fixed banks to
private hands. And they were up and running pretty soon. And as
I said when I was asked about this the other day, you can make a
good argument for the Swedish model, except for this fact: They
only had a handful of banks. We’ve got thousands of banks. The
scale, the magnitude of what we’re dealing with is much bigger.
We’ve got global financial markets that are reacting in all
sorts of unpredictable ways. And so what we have to do is to we
have to pull the Band-Aid off so we don’t duplicate what
happened in Japan. But we’ve also got to make sure that in
pulling the Band-Aid off we don’t just start doing so much
damage that things end up getting much, much worse. Finding
that sweet spot is what we’ve been working on for the last
several weeks and what Tim Geithner is going to continue to be
working on over the next weeks, months, probably through the
end of this year.

Q So are you saying that -- do you foresee a point where
it would be necessary to follow the Swedish model and have the
government take over some of these banks? Or is that -- are you
ruling that out as impractical -- even at a point down the road?

THE PRESIDENT: My absolute goal is to make sure that our
financial system is set and that we get credit flowing again,
that homeowners, small businesses and large businesses will get
-- invest and create jobs and get this economy going again. I’m
going to be very practical in terms of how to approach it. What
we want to do is to make sure that we get this right on the
front end. What Tim Geithner did was to provide a framework.
He is presenting then a timeline of how this is going to roll
out over the next several months: When do we start applying
these stress tests to the banks; opening up their books; making
sure that everybody knows for sure exactly what’s going on in
there; structuring plans to attract private capital to help deal
with some of these weaker institutions. Some of the smaller
institutions that don’t pose systemic risks, if it turns out
that they’re in really, really bad shape, then we may have to
reevaluate how we approach some of those institutions.

He’s also working the Federal Reserve Bank and the FDIC to
open up lines of credit that immediately provide some relief to
small businesses and consumers. There are a whole bunch of
credit markets, like student loans or credit cards, that are
locked up right now, but actually the underlying assets in these
securitized markets are not that bad, so we may just have to use
a variety of different tools to give private investors some
confidence on that front.

But here’s the bottom line: We will do what works. It is
going to take time to lay out every aspect of this plan and
there are going to be certain aspects of any plan that was
designed which will require reevaluation and then have some
experimentation -- if that doesn’t work then you do something
else. What I’m confident about is that the basic framework that
we have put forward is the right one, and that it balances a
whole host of issues, including, by the way, the issue of making
sure the taxpayers aren’t just carrying the whole freight on
this thing, and that we’re sharing -- that institutions on Wall
Street are sharing the burden of cleaning up this mess.

We want to help because -- not because I’m particularly
happy about how Wall Street has been running its businesses, but
because if we don’t fix the banking system and the credit
markets, then businesses can’t make payroll and we continue to
see pain among ordinary Americans. On the other hand, I think
that folks on Wall Street have to understand that these burdens
have to be shared, and so restrictions on executive
compensation, transparency, making sure that shareholders are
more effectively involved, all those things we’re taking into
account. And by the way, the market is not always going to like
some of those decisions, because ideally what they’d like to do,
they’d like to continue business as usual and not pay a price
for a whole bunch of really big mistakes that were made.

Q Just to follow up, if I hear you correctly you are
saying that you could reach a point where you have to go further
in terms of the government. If what you’re doing now doesn’t
work -

THE PRESIDENT: I think what you can say is I will not
allow our financial system to collapse. And we are going to do
whatever is required to get credit flowing again so that
companies and consumers can do their business and we can get
this economy back on track.

Q Mr. President, if I could ask you about
infrastructure, You’ve got infrastructure spending in the
stimulus package. The need is much faster than that and the
money is tight. Do you anticipate any significant further
additions in federal infrastructure spending in the reasonably
near future, and are you making plans to establish an
infrastructure bank?

THE PRESIDENT: Well, number one, we’ve got the
transportation reauthorization bill that’s going to be coming
up. So one thing to keep some perspective about on the recovery
package is this is supposed to provide a jolt to the economy
above and beyond what we’re doing already in the federal
budget. And so I expect that Secretary LaHood, working with the
various transportation committees are going to be moving forward
on a transportation bill. I would like to see some long-term
reforms in how transportation dollars flow, and I’ll give you
just a couple of examples. I think right now we don’t do a lot
of effective planning at the regional level when it comes to
transportation. That’s hugely inefficient. Not only does it
probably consume more money in terms of getting projects done,
but it also ends up creating traffic patterns, for example, that
are really hugely wasteful when it comes to energy use.

If we can start building in more incentives for more
effective planning at the local level, that’s not just good
transportation policy, it’s good energy policy. So we’ll be
working with transportation committees to see if we can move in
that direction.

The idea of an infrastructure bank I think makes sense -
the idea that we get engineers, and not just elected officials,
involved in thinking about and planning how we’re spending these
dollars. I may get some objections from my colleagues, Democrat
and Republican, on the Hill about that, but I think there should
be some way for us to -- just think how can we rationalize the
process to get the most bang for the buck, because the needs are
massive and we can’t do everything, and if it’s estimated that
just on infrastructure alone it would cost a couple trillion
dollars to get our roads, bridges, sewer systems, et cetera, up
to snuff, and we know we’re not going to have that money, then
it would be nice if we said here are the 10 most important
projects and let’s do those first, instead of maybe doing the 10
least important projects but the ones that have the most
political pull.

Q Can you do that without an infrastructure bank?

THE PRESIDENT: I think that an infrastructure bank is
important potential tool for getting that done. As I said,
there’s probably going to be some resistance that doesn’t fall
along partisan lines, but rather has to do with legislators
being understandably protective about their ability to influence
these decisions.

Q Mr. President, when you see the market plunge, if you
will, after Tim Geithner’s announcement, or after congressional
action this week, this makes the public like me nervous. What
do you tell them? You are famous for keeping your cool through
times of negative turns and all, and radiating confidence. What
do you tell people about market reactions?

THE PRESIDENT: What I tell them is, is that the market has
been volatile and will be volatile for a while because there’s a
lot of uncertainty out there, but I am not planning based on a
one-day market reaction. In fact, you can argue that a lot of
the problems we’re in have to do with everybody planning based
on one-day market reactions, or three-month market reactions,
and as a consequence, nobody was taking the long view. My job
is to help the country take the long view, to make sure that not
only are we getting out of this immediate fix but we’re not
repeating the same cycle of bubble and bust over and over and
over again; that we’re not having the same energy conversation
30 years from now that we had 30 years ago; that we’re not
talking about the state of our schools in the exact same ways we
were talking about them in the 1980s; and that at some point we
say, you know what, if we’re spending more money per capita on
health care than any nation on Earth, then you’d think everybody
would have coverage and we would see lower costs for average
consumers and we’d have better outcomes.

So my goal is to say let’s use this crisis as an
opportunity to think long term, and let’s see this as a wake-up
call to make America more competitive.

The one other thing I’d say to people, though, is we’ve
been through tougher times before. I mean, in some ways, part
of this is generational. I think that -- you know, I’m 47-48 -getting
older by the day -- getting older by the day -(
laughter) -

MR. GIBBS: You’re going on 68 -- (laughter.)

THE PRESIDENT: So I’m 48 years old. The last very bad
recession we had in ‘81-‘82 I was still in college. So for a
huge number of people out there, they’re just not accustomed to
seeing a bad economy with really high unemployment and very
bearish markets. But you know what, we went through this in the
‘80s, and that was combined with unbelievable inflation. In the
‘70s, right after the oil shots, we had an economy that was
limping along, and I don’t have to tell you what happened in the
‘30s -- what we’re going through now is nothing compared to what
our grandparents went through during the Great Depression.

So I think that we have to take it seriously and I’m
constantly trying to thread the needle between making sure
people understand this is really serious and we’ve got to take
some drastic action, but also letting people know we’ve been
through tougher times, America is incredibly resilient. We have
-- I forget who had the quote -- and I don’t even know the exact
quote, but to paraphrase, basically we always wait until we’re
in absolute crisis and then somehow we figure out a way to get
the political process working to yank ourselves out of it. It
would be nice if we had a political system that could anticipate
these things and deal with them in a more regular fashion.

Q Is part of that balance between, look, this is
serious, but not wanting to scare people to death -- what -everyday
Americans, what should they do? I don’t think they
know what to do. George Bush said go out and shop.

THE PRESIDENT: Here’s what I think people have to do.
think people have to continue to have confidence that the same
productive capacity that we had before is still there; our kids
still need to go to school and still need to buy computers and
still need to eat; people still need to drive cars and still
need to get to their jobs. There was over-building in the
housing market, much like -- there’s sort of a parallel to what
was happening in the financial markets, but housing prices have
fallen to the point where you’re going to start seeing, starting
some places quicker, but some places later, that existing
inventory absorbed. New young families are coming online and
they’re going to need places to live. And over time as the
population grows you’re going to start seeing housing prices
stabilize. So -

Q What creative ways -- I mean, things that haven’t been
thought of yet that can be done -- for example, you’ve got GIs
coming home from overseas; you’ve got empty houses in Florida
with weeds growing up in the driveway. Is anybody thinking
outside the box?

THE PRESIDENT: Absolutely we’re thinking outside the box.
This is where the political debate is joined, and I’m going to
keep on making the case that government action in these
circumstances is entirely appropriate and not at all
inconsistent with the primacy of the free market and
capitalism. I have no interest in expanding government,
contrary to what some critics might say -

Q -- quote of the day.

THE PRESIDENT: I don’t. I have an interest in fixing the
problem. In fact, keep in mind that one of the exercises that
I’m going through right now is how do we set up a long-term
budget that is sustainable.

I inherited a trillion-dollar-plus budget. That’s a
structural budget that was engineered by some of the very
critics of this package. Now, I would love nothing more than to
be able to walk into the presidency, roll up my sleeves and just
start paring away at that budget because everything had been
taken care of. We didn’t have deteriorating infrastructure.
Families had health care at affordable prices. The schools were
working and we had enough teachers, and the banks were fat and
happy and lending money and people had jobs, and we didn’t have
two wars going on. And then I could -- I would say, you know
what, give me just one of these problem, I’ll take them.
Unfortunately, what they handed off was all of these problems
simultaneously.

So what we’re going to do is to work with anybody who wants
to work with us constructively to solve the short-term problem
of putting people back to work, and the recovery package was
part of that. We’re going to get a financial system that gets
credit flowing again. We’re going to put forward some
regulatory architecture that ensures that we don’t see these
kinds of systemic risks again. We are going to put forward a
housing plan as part of the overall financial approach that
we’re taking that just provides some immediate relief to people
who are on the brink of losing their homes but have been doing
everything right. And some of this is going to cost money short
term and we are going to try to pull off the hat trick of, at
the same time, starting to chip away at our enormous long-term
budget deficit.

Q Can I ask you then, talk a little about your
priorities for the rest of the year and whether the large cost
of this -- what you’ve got to invest in this stimulus package
changes your view about whether you can move forward on some of
them, particularly your health care plan, which does have a
substantial cost.

MR. GIBBS: This will be the last one so we can -

Q Can I ask one more after -- thanks.

THE PRESIDENT: My priorities for the rest of the year.
Number one is to get the right structure for the successor to
TARP; spending the $300-some billion that has already been
authorised as wisely as possible, and injecting transparency and
trust into the financial system. Having a housing program that
provides relief to people who are at risk of losing their
homes. Financial regulations that ensure that the crisis
doesn’t happen again. A innovative and aggressive push for
health care reform that focuses not just on access but also on
costs, and trying to just provide relief to working families.
And a push for an energy policy that puts us on a path to
sustainability.

You asked given what we inherited, are we going to be able
to get all this done. Some of these reforms don’t cost money.
They will still be heavy political lifts because there are
philosophical arguments about how to approach it. Some of these
problems are very complicated. Health care is a classic
situation where it may cost money on the front end and save
enormous money on the back end and what we’re going to have to
figure out is what can we do now to start getting that ball
rolling, because the longer we put that off, the worse off we
are financially. Medicare and Medicaid on their current
trajectory cannot be sustained. And the only way I think we’re
going to fix it is if we see those two problems in the broader
contest of bending the curve down on health care inflation.

The problem is not just demographics. Peter Orszag, before
he joined us, loved to make this presentation -- you sat through
the chart -- that, yes, people are getting older, but that’s not
the problem. The problem is health care costs going up 6, 7, 8,
10 percent a year.

Now, those are the things that need to get done. I should
add one more thing and that is a budget process that starts
bending the deficit curve down. Some of these -- I think that
all these goals are complementary. I also think that the
American people understand we won’t get everything done
overnight. The U.S. government and the U.S. economy are
enormous ocean liners, they’re not speedboats. So what we will
do this year is to try to get them on the right trajectory and
hopefully that means at the end of my term you’ll look back and
you’ll say we’re at a different place than we would have been
had we not made these changes.

The one message I want to send to the American people is
that on all these fronts my consistent bottom line is how do we
make sure that the American people can work, have a decent
income, look after their kids, and we can grow the economy.
That’s my criteria. I don’t have an ideological agenda in how
we’re approaching it.

My second message is to Congress: We can’t afford to get
bogged down in some of the bad habits that have accumulated
during the process over the last several years.

Q I wonder -- you speak more about history I think than
most politicians, maybe even than most presidents. And you’ve
also been talking a lot about Lincoln. But you seem to put
yourself in historical context a lot. And so sort of in a way, I
just want to ask, when you think about this, how much do you
think you make history or history makes you, or how much do you
think Lincoln made history or history made him?

THE PRESIDENT: That was a profoundly abstract and
philosophical question that you asked.

Q Which you talk about all the time, I believe.
(Laughter.)

MR. GIBBS: Got a couple more hours on the flight -(
laughter.)

THE PRESIDENT: Look, I think that there are certain
moments in history where big change is possible. It’s not a
certainty, but it’s possible -- at certain inflection points.
And I think that those changes can be for the good, or they can
be for the ill. And leadership at those moments can help
determine which direction that wave of change goes. I think
it’s very hard to -- for any single individual or politician to
unleash historical momentum on its own. But I think when that
historical wave is there, I think you can help guide it.

Q Good answer.

Q Are we in one of those moments?

THE PRESIDENT: Yes.

Q Yes.

THE PRESIDENT: I firmly believe that.

Q We are in one of those moments?

THE PRESIDENT: I think we are -- which is part of what
makes it scary sometimes, but is also what should make people
determined and excited because I think that we can really solve
some problems that have been there for a long time and we just
couldn’t get the collective focus to tackle them. Now may be
one of those moments where we can.

All right, guys. Thank you.

END 6:00 P.M. EST

February 10, 2009; Nightline Interview with Terry Moran

Nightline Intervew, 2/10/09

TERRY MORAN: So, Treasury Secretary Geithner today has laid out the plan for the banks and judging by the reaction in the markets, Wall Street really doesn't like it.

PRESIDENT OBAMA: Well, you know, Wall Street, I think, is hoping for an easy out on this thing and there is no easy out. Essentially, what you've got are a set a banks that have not been as transparent as we need to be in terms of what their books look like.

And we're going to have to pull off the Band-Aid a little bit and go ahead and just be clear about some of the losses that have been made because until we do that, we're not going to be able to attract private capital into the marketplace. And so, you know, I think that you have two choices in this situation: You can prolong the agony and shareholders will be happy until they're not happy, and that could be a year from now or two years from now, or, in the case of Japan, eight years later.

Or you can just go ahead and acknowledge that, yeah, there's a lot of work that has to be done to put these banks back on a firmer footing.

MORAN: Can you say how much, ballpark figure, that will cost the American taxpayer? A trillion, a trillion-five, two trillion?

OBAMA: I can't say the ballpark figure. What I can say is --

MORAN: Why not?

OBAMA:Well, because ultimately, what happens is going to depend on how the markets respond over the long term, not today or the next day but a month from now or two months from now. How effective we are in actually cleaning out some of these bad assets out of these banks.
If we're doing a good job and we've got a template that creates transparency and accountability, clarity and consistency in terms of how we're applying this program, then what we'll end up seeing is private capital coming back into the marketplace.

If we do a poor job, then private capital will continue to stay out and frankly, at, at a certain point, the government can't replace all that private capital, so you know, our job is to get this right, get the model right. We've got 350 billion dollars of the TARP money that's been allocated but we also have the Federal Reserve Bank and the FDIC, all of whom were consulted in designing this plan.

And those resources -- I think the most important thing is to give both the market, but also the taxpayer, confidence that we're spending that money well. And if we do that well, then I think we can make an assessment down the road in terms of what else we might have to do.

MORAN:There are a lot of economists who look at these banks and they say all that garbage that's in them renders them essentially insolvent. Why not just nationalize the banks?

OBAMA:Well, you know, it's interesting. There are two countries who have gone through some big financial crises over the last decade or two. One was Japan, which never really acknowledged the scale and magnitude of the problems in their banking system and that resulted in what's called "The Lost Decade." They kept on trying to paper over the problems. The markets sort of stayed up because the Japanese government kept on pumping money in. But, eventually, nothing happened and they didn't see any growth whatsoever.

Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. [LAUGHS] We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

And so, what we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and ultimately that's going to be the key to getting credit flowing again.

MORAN: People are angry, there's so much taxpayer money going into the banks. Why shouldn't the government, why shouldn't you just fire the executives who wrecked these banks in the first place and tanked the world's financial system in the process?

OBAMA:Well, some of them are gone because their institutions have effectively collapsed. You know, keep in mind. though, there are a lot of banks that are actually pretty well managed; JP Morgan being a good example. Jamie Dimon, the CEO there; I don't think he should be punished for doing a pretty good job managing an enormous portfolio.

And so what we want to do is to say, if you're going to take money from the taxpayers, then you're going to be constrained in terms of how you give yourself compensation and shareholders are going to be empowered.

If you're not taking money, then we'll let shareholders and boards of directors handle things as they generally have handled them. I do hope that we're going to see a change in culture where everybody in the financial system starts recognizing that ... $100 million bonuses annually are not a birthright [LAUGHS] and that, you know, we've got to recognize that if you're going to reward people for success, you've also got to punish them for failure and that hasn't been happening.

MORAN: Take a step back, you've been sounding some very dire warnings about the economy in recent days. How close do you think the country is to a kind of economic catastrophe that you're warning them?

OBAMA:Well, you know, I'm constantly trying to thread the needle between sounding alarmist but also letting the American people know the circumstances that we're in. And the fact of the matter is that we are in not just an ordinary recession, we are in a perfect storm of financial problems and now, a decline in worldwide demand that is resulting in huge numbers of jobs being shed, the lowest consumer confidence we've seen, credit locked up.

And so this was a big difficult situation. Now, I think we've got to keep perspective. We're not going through the Great Depression. I know there have been some analogies there but when FDR took over, unemployment at that time was 30 percent, as opposed to 7.5 or 7.6.

And so, you know, I think it's important to recognize we've still got enormous assets, we've got the same workforce that we did that's as productive as it's ever been, we've still got some of the best universities in the country and, you know, a wonderful infrastructure and some great companies.

You know, I spoke with the CEO of International yesterday, who's investing billions of dollars in opening up new plants in the face of this recession. And so some of what we need is just a restoration of confidence and people's belief that in fact, we can harness all these resources to continue to be the most dynamic economy on earth.

But we're not going to get there by pretending that we don't have some very big problems and I think the American people understand that.

MORAN: The stimulus bill -- one of the things the Republicans are arguing, they look at this stimulus bill, they see a lot of spending in there ...The Republican argument is that you and Nancy Pelosi are using the need for a stimulus bill as an excuse to jack up spending under a traditional liberal Democratic agenda.

OBAMA:Let me, first of all, point out, I -- I think there are a number of different arguments that have been leveled at, at this recovery package. There are a set of folks who just don't believe in government intervening in the marketplace, period. I mean, they're still fighting FDR and the New Deal and you have -- these are the same folks who think we should be privatizing Social Security and you know, we -- there's no room for government to help people get health care and on and on and on.
So there's a big ideological battle that they want to fight. Frankly, I think that fight's already been won, the American people certainly think so. That's not the argument that makes much sense to them. There are then people who I think are making a sincere argument that if you look at the stimulus package, that maybe some things are more stimulative and some things are not.

Now, the only problem I've got is, you're actually getting a bunch of contradictory arguments from some of the same people. You've got some folks who say, "well, it doesn't spend out fast enough. That's why it's not stimulative. But by the way, we'd like to see more infrastructure spending." Well, it turns out that infrastructure spending provides terrific stimulus to an economy but most infrastructure projects may take three, four, five years to move forward.

There's some folks who complain that, you know, things like investing in energy efficiency for federal buildings or automobile fleets is a, you know, government program. Well, actually, there's no reason why if you're creating jobs, we might not as well save taxpayers $2 billion in potential energy costs every year.

You know, the, the idea that we're making -- the fact that they're federal buildings that we're making more energy-efficient or federal fleets that we're making more energy-efficient doesn't make it less stimulative. That's still creating jobs and requiring services.

So some of these arguments just haven't been real coherent. And you know, where there are good ideas for very effective job creation, I've adopted them. When the govern -- when the Republicans make suggestions about certain tax cuts that they think will work, some of them, you know, the evidence shows that they may be right.

But most of -- for the most part, they haven't really been making those arguments. What they've been doing is picking the 1 or 2 percent of the entire package that fell in the category of policy and then just going after that, ignoring the fact that 98 percent of the package is exactly the kind of stimulus that people would want.

A third of it's tax cuts, a third of it's counter-cyclical payments to states for things like unemployment insurance. Everybody agrees that, that those kinds of steps are appropriate. And a third of it's investments and infrastructure that is going to create jobs and lay the foundation for long-term economic growth.

MORAN: Not a single Republican vote in the House on your first major piece of legislation --

[OVERLAP]

OBAMA: Oh, I'm getting, I'm getting a big honeymoon from the American people.

MORAN: But what happened in Washington --

OBAMA: Oh -- oh, what happened in Washington was, I think that they made a decision that they want to continue the same fights that we've been having over the last decade. The American people, on the other hand, realize that we want something different; hence, the results of the election.

And, you know, I think if you look at how people are doing right now and how the Republicans have responded to a great deal of overtures by me, I think it's pretty clear that the American people would like to see a different way of doing business. But old habits break hard and, and you know, I, I understand that and so we're going to keep on reaching out and eventually, I have confidence that it's going to pay off.

I think there are going to be other areas where we can potentially work together and I'm still hopeful that some Republicans take their cues from Republican governors and Republican mayors like Charlie Christ down here in Florida who recognize that not doing anything is simply not an option.

MORAN: I wonder, in coming into the presidency, maybe you were too nice. If I'm a Republican senator or a Republican Congress, I think you're a very nice guy but I don't have enough reason to fear you...

OBAMA:[LAUGHS] Well, I tell you what -- you know, that accusation -- I think, if I'm not mistaken, was leveled at me a couple years ago and I'm going to be flying out on Air Force One in a little bit. So, people shouldn't underestimate the, the value of civility and, and try to get people to work together.
Over the long term, it pays off. I think Washington has a very narrow way of keeping score. You know, who's up, who's down, who won this vote, who didn't and what kind of tactical maneuvers did they make, who's getting on cable. You know, who's dominating the chatter in mid-day with these not-so-vast audiences of, of political junkies.

The American people are keeping score. What they're asking is, does this person seem to be really trying to work for us, create jobs, help us keep our home, send our kids to college. That's the measure that they're looking at. And, and as long as I stay focused on that, I think the politics will take care of itself.

MORAN: Nice guys don't finish last.

OBAMA: I haven't so far.

February 3, 2009; Interview with Chris Wallace, Fox News

Link to Fox News

WALLACE: Mr. President, thanks for talking with us.

OBAMA: Thank you so much for being here.

WALLACE: Did you or anyone else in your administration tell Tom Daschle he had to step down as your nominee?

OBAMA: Well, you know, I'm not going to go into the details of it, but as has been reported, Tom made the decision that he was going to be too much of a distraction to carry out what he's so passionate about, which is health-care reform.

What I did tell him was that I take responsibility for this mistake. I mean, I think that Tom took responsibility for the mistake on his taxes. I think it was an honest mistake, and I made the assessment. I made the judgment that he was the best person to achieve health-care reform and bring people together.

But what became clear to me is that we can't send a message to the American people that we've got two sets of rules: one for prominent people and one for ordinary people. And, you know, so I consider this a mistake on my part and one that I intend to fix and correct and make sure that we're not screwing up again.

WALLACE: Well, the reason I ask is because yesterday in this office, you were asked whether you supported him, and you said absolutely.

OBAMA: Yes.

WALLACE: And it -- it becomes clear from your answer that you played a role in the decision for him to...

OBAMA: No. No, no, no, no, no. I don't want to -- I don't want to mistake the issue here. Tom made the decision here. He called me and indicated this was his decision.

WALLACE: Would you have continued to back him?

OBAMA: Well, I don't want to get into hypotheticals, Chris. Here's what I'll say. I think Tom is an outstanding person. I think this was an unintentional mistake on his part but a substantial one, and there's no excuse for the mistake. He took responsibility for it.

Ultimately, I have to take responsibility for a process that resulted in us not having a HHS secretary at a time when people need relief from their health-care costs.

And so, you know, this is a mistake, probably not the first one I'm going to be making in this -- in this office. But what I'm absolutely committed to doing is fixing it, getting a highly-qualified HHS secretary, and then making sure that we start providing some health-care relief to families who so desperately need it.

WALLACE: On your first day in office, you signed an executive order on lobbyists...

OBAMA: Right.

WALLACE: ... that you said marked a, quote, "clean break" with business as usual. And yet, in less than two weeks, you have signed waivers to allow the hiring of lobbyists to be deputy secretary at the Pentagon, deputy secretary at HHS, and chief of staff at the treasury.

Is that a clean break?

OBAMA: Well, that's three out of hundreds of appointments that we've made.

WALLACE: Three of the top jobs. Three really important jobs.

OBAMA: But let me say this, Chris. We disclosed these ahead of time. We set a very high bar. And everybody acknowledges that we have the toughest standards, not only of people who have lobbied previously, and the restrictions on them working in this White House, but also going forward.

And those rules will still apply, even for Mr. Lynn, who had some unique qualifications that I felt was important to America's national security. Even he is going to have to not be engaged in lobbying for two years -- or for the duration of my administration.

And so, look, is every approach that we're taking here going to be perfect? No.

Have we set a very high bar, higher than any president who's ever been in this office?

And are we generally meeting that very high standard? I think the answer is absolutely yes.

WALLACE: Let's turn to the economic stimulus plan and the bottom-line question...

OBAMA: Yes.

WALLACE: ... will it work? You are taking hits right now from all sides: right and left. Columbia University economist Jeffrey Sachs calls it a, quote, "astounding mish-mash of tax cuts, public investments, transfer payments, and special treats for insiders."

Why not just pull it back, forget about the February 16 deadline, and get it right?

OBAMA: Well, I think, actually, that we are closer to getting it right than all these critics, partly because all these critics...

WALLACE: Have...

(CROSSTALK)

OBAMA: Hold on -- hold on a second, Chris. You want me to answer your questions, right?

WALLACE: Yes. Yes, sir.

OBAMA: The -- it turns out that all these critics have contradictory suggestions, don't they?

Some of them are saying, "Well, it doesn't spend out fast enough." Except it turns out that they also want infrastructure projects that might last for four, five, or six years.

There is no magic bullet to these situations. Here's what this package does. It provides payments, like unemployment insurance, to people who've lost their jobs and are in desperate need of help. And every economist says that that's a smart thing to do, because that gets the money out right away.

It provides support for people who have lost their health care because they've lost their job. And I think that's the right thing to do for families.

It also invests in green technologies, infrastructure that will lay the groundwork for long-term economic growth.

And most of the criticisms that have been leveled and, you know, that are -- that you've heard on your show about various pet projects that members of Congress might have put in there, when you tally all those up, amount to less than one percent of the entire package.

The last point I'd make is that many of the critics, what they're calling for are more tax cuts when, in fact, this is already $300 billion worth of tax cuts. And many of the people on the other side of the debate consider many of those wasteful.

But I actually think that Mitch McConnell is right, that we should have some tax cuts in this package.

No -- this is not going to be a package that makes everybody happy, but the main criteria I have is, is it going to put people back to work? And I think it actually will.

WALLACE: Is the February 16 deadline firm?

OBAMA: Yes, because nobody disagrees with the idea that, if we keep on putting this off, that we're going to end up seeing more months with half a million people losing their jobs each month. We can't afford to wait.

WALLACE: You reportedly told Senate Democratic leaders, when you met with them yesterday, that you want some changes in the bill. So let's do what we can, sir -- I used to do this with you as a candidate, but I'm going to ask you as president -- do a lightning round of quick questions and answers about specific changes.

Tax credits for people who buy homes or business? Good or bad?

OBAMA: I think it has some potential, and I'm willing to take a look at it.

WALLACE: Lower, federally-financed -- let me rephrase. Federally-guaranteed lower mortgage rates?

OBAMA: I think that we've got to take a look at the whole package of housing. Now, keep in mind that our intention has always been that, in addition to this recovery and reinvestment package, that we're also going to have a housing bill, that we have also got to fix the banking system, that we're going to have to make sure that, for example, issues like executive compensation for banks that are getting money through the TARP, that that's dealt with.

So we're moving on parallel tracks on a whole host of issues.

How much of the housing issue is dealt with in this bill, versus a separate bill, I think is something that we have got to discuss. But I actually agree with Democrats and Republicans that we've got to do more to provide relief to homeowners to prevent foreclosure.

WALLACE: Strip out the "buy American" provision for steel and iron in the bill, which a number of our allies are saying is too protectionist?

OBAMA: I agree that we can't send a protectionist message. I want to see what kind of language we can -- we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade.

WALLACE: When you see how well the Iraqi provincial elections went last weekend and how sharply the violence in Iraq has fallen, could the 16-month time line for getting our combat troops out slip?

OBAMA: Well, you know, I've been meeting with the joint chief of staff and Bob Gates, who I think is outstanding, one of my appointments. And the interesting thing I think there's a greater convergence than you would think watching the news media or having listened to us during the campaign.

Part of it is because of the outstanding work that was done by our military. But violence has gone down. You saw an election that was successful and peaceful and we've got to continue to give support to Iraqi security forces.

But I actually think that we can create a situation in which it is possible for us to draw down our troops in a responsible fashion, that meets my criteria for putting more troops into Afghanistan, but also meets the criteria of all of us to make sure that our troops are safe and that Iraqis (inaudible)

WALLACE: But is your job now in this office as commander in chief, a general (inaudible) says to you, we're going to do it, but it's going to take a little more than 16 months.

Are you open-minded on that?

OBAMA: I've said throughout that I have a conversation with my joint chiefs of staff and commanders on the ground. That's what I did the day after our the day I was sworn in and we are going to make sure that we have the best possible plan to achieve America's national security interests.

WALLACE: Two more questions.

OBAMA: Please.

WALLACE: Good. Since you became president, you have warned Republicans, quote, "You can't just listen to Rush Limbaugh and get things done."

OBAMA: Now, how do you know that's a quote?

WALLACE: Well, I read it in the media.

OBAMA: Yeah.

WALLACE: Did you not say...

OBAMA: I just wanted - I'm not sure that was the exact quote.

WALLACE: Let me throw another one at you and you tell me whether this is an exact quote. You were widely quoted, when you met with the House GOP caucus saying, go ahead, (inaudible) I'll watch Fox News and feel bad about myself.

OBAMA: That one I did say.

WALLACE: Is perhaps -- let me just raise the possibility -- are you a trifle thin-skinned?

OBAMA: No, no, no. I said it in good humor. I think everybody understood that that was a joke.

No, I think, Chris -- I think it's fair to say that I don't always get my most favorable coverage on Fox, but I think that's part of how democracy is supposed to work. You know, we're not supposed to all be in lock step here, and you've always been very gracious to me and...

(CROSSTALK)

WALLACE: ... improves or hurts my stock at Fox.

OBAMA: But they heard it.

WALLACE: Finally, last question sir, biggest surprise since you've been in here, two weeks, of the demands of the office?

OBAMA: Every decision you make counts. I think in terms of just raw hours and physical exhaustion, you can't beat a presidential campaign, especially the one that I just underwent which was so long. But here, everything you do matters.

I think I mentioned this a couple of days ago. I'm now signing letters to the families of troops who have fallen in Iraq or Afghanistan.

Every time you sign that, you are reminded that you have enormous responsibilities and so, that's why all of these debates -- when I'm talking to Democrats or Republicans, one of the things I try to remind then and something I remind myself every single day is the only criteria for what I do should be -- is it working for the American people?

Because this job is too big, too important, to just want to occupy space. And if I've spent the next four years, every day, making decisions based on that single criteria, is this going to help the American people achieve their dreams and keep them safe, then I'll be able to look at myself in the mirror and say, you know what, you did a good job?

WALLACE: Mr. President, thanks for talking with us.

OBAMA: Appreciate it. Thank you, Chris