THE WHITE HOUSE
Office of the Press Secretary
__________________________________________________________
For Immediate Release March 26, 2009
East Room
11:39 A.M. EDT
THE PRESIDENT: Thank you so much. Well, it is great to see all of
you. And I am thrilled that all of you here in the White House and
everybody who is viewing this online is participating in this
experiment that we're trying out. When I was running for President, I
promised to open up the White House to the American people. And this
event, which is being streamed live over the Internet, marks an
important step towards achieving that goal. And I'm looking forward to
taking your questions and hearing your thoughts and concerns -- because
what matters to you and your families, and what people here in
Washington are focused on, aren't always one and the same thing.
Here in Washington, politics all too often is treated like a game.
There's a lot of point scoring, a lot of talk about who's up and who's
down, a lot of time and energy spent on whether the President is
winning or losing on this particular day or this particular hour. But
this isn't about me. It's about you. It's about the folks whose
letters I read every single day. And for the American people, what's
going on is not a game. What matters to you is how you're going to
find a new job when nobody seems to be hiring or how to pay medical
bills after you get out of the hospital or how to put your children
through college when the money you'd put away for their tuition is no
longer there.
That's what matters to you. That's what you expect your leaders to be
focused on. And that's why I've been working to deliver the changes
you sent me here to make; to ensure that we're not only making it
through this crisis, but come out on the other side stronger and more
prosperous as a nation over the long term. That's the future that I
believe is within our reach.
But that future will not come about on its own. It will come because
we all, every single one of us, from Main Street to the halls of
Congress, do what generations of Americans have done in times of trial;
because we remember that at heart we are one nation, and one people,
and united by a bond that no division of party or ideology can break;
because we come together as Americans to choose that better day.
And that's what we've already begun to do. We, as a nation, have
already begun the critical work that will lead to our economic
recovery. It's a recovery that will be measured by whether jobs are
being created and families have more money to pay their bills at the
end of each month. That's why we're preventing teachers and police
officers from being laid off, and putting Americans to work rebuilding
our crumbling roads and bridges and dams, creating or saving 3.5
million jobs in the coming years.
And that's why we're putting a tax cut into the pockets of 95 percent
of working families who will see it -- see that tax cut in their
paycheck by April 1st.
It's a recovery that will be measured by whether families can achieve
that most American of dreams, and own a home without fear of losing
it. That's why we've launched a plan to stabilize the housing market
and help responsible homeowners stay in their homes. This plan is one
of the reasons that mortgage interest rates are now at near-historic
lows. And we've already seen a jump in refinancings of mortgages, and
homeowners taking advantage of lower rates. And every American, by the
way, should know that up to 40 percent of all mortgages right now are
eligible for refinancing.
It's a recovery that will be measured by whether families and
entrepreneurs can get the loans they need. That's why we're freeing up
credit that's frozen with a program that supports the market for more
car loans, and student loans, and small business loans; and with a plan
that will partner government resources with private investment to break
the logjam that is currently preventing our banks from lending money to
even the most creditworthy customers.
And in the end, it's a recovery that will be measured by whether it
lasts, whether it endures; by whether we build our economy on a solid
foundation instead of a overheated housing market or maxed-out credit
cards or the sleight of hand on Wall Street; whether we build an
economy in which prosperity is broadly shared. That's what the budget
I expect to sign is intended to do. It's a budget that cuts the things
we don't need to make room for the investments we do; a budget that
cuts the massive deficits we've inherited in half by the end of my
first term and offers a blueprint for America's success in the 21st
century.
That success will require preparing every child, everywhere in this
country, to out-compete any worker anywhere in the world because we
know that those students who are getting the best education are going
to be able to compete. And that's why we're making a historic
investment in early childhood education. That's why we're going to
make a historic investment in improving K-12 education, making sure
that our children get a complete and competitive education from the
cradle up through a career. It's an investment that will expand and
improve not just early learning programs, but reward good teachers
while replacing bad ones, and put college or technical training within
reach for anyone who wants it.
Our success will also require freeing ourselves from the dangerous
dependence on foreign oil by building a clean-energy economy, because
we know that with this will not only come greater security and a safer
environment, but new high-paying jobs of the future to replace those
that we've lost.
And our success will also require controlling spiraling health care
costs that are bankrupting families, and crushing businesses, and
driving up skyrocketing deficits. At the current course and speed,
these health care costs are unsustainable. And that's why my budget
takes a first big step towards comprehensive health care reform that
will reduce costs, improve care and ensure that everyone who works has
coverage they can afford.
This is what Americans' success demands and this is what our budget
will do. And I'm under no illusions that a better day will come about
quickly or easily. It's going to be hard. But as I said the other
night at my press conference, I'm a big believer in the idea of
persistence -- the idea that when the American people put their mind to
something and keep at it, without giving up, without turning back, no
obstacle can stand in our way, and no dream is beyond our reach.
That's why we're here today -- because it will take all of us talking
with one another, all of us sharing ideas, all of us working together
to see our country through this difficult time and bring about that
better day.
So I want to thank all of you for this opportunity to talk with you.
And now I'd like to bring Jared back up to the stage, and he's going to
open it up for questions. So, Jared, let's see how this thing works.
DR. BERNSTEIN: Thank you, Mr. President. Our first question comes
from Boston, Massachusetts, on the topic of education: "The Founding
Fathers believe that there is no difference between a free society and
an educated society. Our educational system, however, is woefully
inadequate. How do you plan to restore education as a right and core
cultural value in America?"
THE PRESIDENT: Well, it's a great question, and -- let me see if this
mic works so that I'm not stuck at this podium. I'm here only because
of the education I received. I wasn't born into wealth, I wasn't born
into fame, but I had parents who cared about education and grandparents
who cared about education, and I was lucky enough, through scholarships
and sacrifice on the part of my family, to get the best education that
America has to offer.
Too many of our children aren't getting that kind of education. It's
not because their parents don't believe in the value of education; it's
not because these young people are less talented. It's because of two
reasons: One, in many cases, our schools are under-resourced. There
aren't enough teachers; the teachers aren't getting enough of the
training they need for the classroom; there's a shortage of supplies.
Some of the schools that I visited during the course of traveling
around the country just shock the conscience. There are schools that
I've seen that were built in the 1850s that are still being used but
haven't been upgraded the way they need to.
Now, there's a second problem, though, and it's one that money alone
cannot solve, and that is that we have a school system that was
designed for the agricultural era -- there's a reason why we've got
three months off during the summer. That's supposed to be when
everybody is working on -- out on the farm and bringing in harvest.
And it's not just the amount of time our kids are spending, it's how
our classrooms are designed, how curriculums are structured, how things
like teacher promotion and training happen.
So a lot of times in Washington we get an argument about money versus
reform. And the key thing to understand about our education system is
we need more resources and we need reform. If we just put more money
into a system that's designed for the 19th century and we're in the
21st, we're not going to get the educational outcomes we need. On the
other hand, if we talk a lot about reform but we're not willing to put
more resources in, that's not going to work.
So let me give you just a couple examples of what we need to do. Early
childhood education we know works. Let's invest in that. That's what
my budget calls for -- substantial investment; every dollar we invest
in early childhood education, we get potentially $10 back in improved
reading scores, reduced dropout rates, reduced delinquency rates and so
forth.
Number two, let's focus on the most important ingredient in the school,
and that's the teacher. Let's pay our teachers more money. Let's give
them more support. Let's give them more training. Let's make sure
that schools of education that are training our teachers are up to date
with the best methods to teach our kids. And let's work with teachers
so that we are providing them measures of whether they're effective or
not, and let's hold them accountable for being effective.
Now that doesn't mean just a single high-stakes standardized test. It
also means that we're working with teachers to determine, what's the
best way to discipline -- maintain discipline in a classroom? What's
the best way to get kids excited about science? Giving them the time
and the resources to improve, but also having high standards of
expectation in terms of their performance.
If we do early childhood education, if we focus on teacher training, if
we invest in math and science education, which is vital -- and we're
falling behind other countries on that front -- then I actually feel
pretty confident that we can out-compete any country in the world. But
it's going to take more money and it's going to take more reform and
it's going to take, by the way, openness to innovation on things like
charter schools or performance pay. There are a whole range of things
that may work, in some cases may not work, but we've got to try some
new things because right now too many of our kids are stuck, and we
can't afford to lose them.
DR. BERNSTEIN: The next question is on homeownership, from Heather
from Ohio: "President Obama, what benefits from the stimulus plan are
there to those of us who are paying our mortgages but living paycheck
to paycheck?"
THE PRESIDENT: Well, I mentioned this in the opening remarks. This is
something that I really want everybody to understand. Our housing plan
-- and we're devoting $50 billion to it -- has a number of different
components. One component is setting up a mechanism where people who
just can't afford their mortgage right now are able to renegotiate with
banks, and the banks lower their interest, and the homeowner assures
that they're going to make a commitment to pay a certain amount every
month, and the government helps to step in to bridge the gap. But the
point is, it's going to be cheaper, not only for that family but also
potentially for the entire community, if they stay in their home.
And so that's -- that part of the housing plan is targeted for folks
who are really in distress. They're getting close to the point where
they might be losing their home.
But there are a whole bunch of folks out there who are not about to
walk away from their home, but are getting killed right now because
their home values have dropped drastically; they're still making
payments, but they're in trouble. And for that huge set of responsible
homeowners out there, I want people to understand what we've done is
created mechanisms in the credit markets that have lowered mortgage
rates down to historic levels, and what we've done is we've opened it
up so that FHA loans that used to be only for people with a certain
mortgage level, that we are using FHA and other mechanisms to open up
refinancings to a whole bunch of homeowners who previously weren't
qualified.
So now what you've got is a situation where 40 percent of the people
sitting here, 40 percent of the people who are participating in this
virtual town hall, could potentially refinance their mortgage. And
they've got to take advantage of that. We are providing additional
support from the government in order to facilitate those refinancings.
We're starting to see refinancings go up significantly.
So you have the potential to cut your monthly payments, but you've got
to take advantage of it. And if you need more information, you can go
on our web site, whitehouse.gov, or you can contact your local bank and
find out whether you qualify to participate in this refinancing.
DR. BERNSTEIN: Next we have a video question from Harriet in Georgia
about bringing jobs back to America: "Hello, President Obama. Here is
my question for your online town meeting. When can we expect that jobs
that have been outsourced to other countries to come back and be made
available to the unemployed workers here in the United States? Thank
you so much for all your hard work. God bless you. Bye-bye."
THE PRESIDENT: Well, I appreciate that. Let me talk more, first of
all, broadly about what's happening in the job market. We have had
just a massive loss of jobs over the last several months, the kind of
job loss we haven't seen at least since the early '80s and maybe since
the 1930s, in terms of how quickly we've seen the economy shed jobs.
A lot of that is prompted by the financial crisis and the locking up of
the credit markets. And that's why when we are -- when we talk about
dealing with this credit crisis and the banks, I just want everybody to
understand it's not because we're overly concerned about Wall Street or
a bunch of CEOs; it's because if we don't fix credit, if we don't get
liquidity back to small businesses and large businesses alike who can
have that -- use that line of credit to buy inventory and to make
products and sell services, then those businesses shrivel up and they
start laying people off.
Ultimately, our measure of whether we're doing a good job or not is,
are we going to be able to create and save jobs? And part of that
involves fixing the financial system.
There is a long-term issue, though, that we have to deal with -- and
this was true even before the current crisis -- and that is that so
much of our economic activity was in the financial services sector. It
was related to an overheated housing market. It was dependent on huge
amounts of consumer saving. And we were seeing those steady declines
in manufacturing. We were seeing steady declines in a lot of other
productive sectors of the economy. And one of the things that my
budget is designed to do is, by fixing our education system, by
reducing costs of health care, by going after the clean-energy jobs of
the future, trying to put our economy on a more solid footing.
Now, a lot of the outsourcing that was referred to in the question
really has to do with the fact that our economy -- if it's dependent on
low-wage, low-skill labor, it's very hard to hang on to those jobs
because there's always a country out there that pays lower wages than
the U.S. And so we've got to go after the high-skill, high-wage jobs
of the future. That's why it's so important to train our folks more
effectively and that's why it's so important for us to find new
industries -- building solar panels or wind turbines or the new biofuel
-- that involve these higher-value, higher-skill, higher-paying jobs.
So I guess the answer to the question is, not all of these jobs are
going to come back. And it probably wouldn't be good for our economy
for a bunch of these jobs to come back because, frankly, there's no way
that people could be getting paid a living wage on some of these jobs
-- at least in order to be competitive in an international setting.
So what we've got to do is create new jobs that can't be outsourced.
And that's why energy is so promising. We've been talking about what's
called a smart grid, and some of you may have heard of this. The basic
idea is, is that we're still using an electricity grid that dates back
100, 150 years ago. Well, think about all the gizmos you guys are
carrying -- (laughter) --all the phones and the BlackBerrys and the
this and the that. You're plugging in all kinds of stuff in your
house. We've got an entirely new set of technologies, huge demands in
terms of energy, but we've got a grid that's completely outdated.
Now, one of the things that we wanted to do in the stimulus package was
to go ahead and start laying a new grid. And to do that, it's like
building the Transcontinental Railroad. You've got a -- it's a huge
project involving all 50 states.
The benefits of the grid are that we could reduce our energy costs by
billions of dollars. We could set up systems so that everybody in each
house have their own smart meters that will tell you when to turn off
the lights, when the peak hours are, can help you sell back energy that
you've generated in your home through a solar panel or through other
mechanisms. If we get plug-in hybrid cars, you can plug it in at night
and sell back electricity to the utility, and then charge up your car
again in the morning before you leave.
All this can be done, but it also creates jobs right now. Our biggest
problem, we don't have enough electricians to lay all these lines out
there. And these are jobs -- these are union jobs that potentially pay
$80,000-$90,000 a year, with benefits. But it's a matter of making the
investment in infrastructure and also then training the workers to be
able to get those jobs. And that's where we're going to be focused
on. That's where the job growth is going to occur.
One last point I want to make -- and I know I'm not supposed to talk
this long, but we're going to have to be patient and persistent about
job creation because I don't think that we've lost all the jobs we're
going to lose in this recession. We're still going to be in a
difficult time for much of this year. Employment is typically what's
called a lagging indicator. Now, this is -- Dr. Bernstein, he's a
Ph.D. economist, so he'll correct me if I'm wrong here, but --
DR. BERNSTEIN: I'm sure I can make this really confusing. (Laughter.)
THE PRESIDENT: But historically, if you look at every recession, what
happens is that when the economy starts getting in trouble, it takes a
while before businesses decide, you know what, this economy is in
trouble, it's not bouncing back -- we better start laying off workers.
So what we're seeing now is a lot of businesses have decided that our
sales are way down, we've got to start shedding workers. And that's
going to continue for a while.
Now, the reverse is true, as well. When the economy starts recovering,
when these businesses start being a little more confident that, you
know what, we think we've bottomed out; the recovery package President
Obama passed gives us some optimism about making investments in certain
areas -- it takes a while before they start hiring even if they've
started to make these investments.
So the reason I point that out is, I don't want people to think that in
one or two months suddenly we're going to see net job increases. It's
going to take some time for the steps that we've taken to filter in.
The fact that the housing market is starting to stabilize a little bit
-- there's still a lot of inventory out there before people then
actually start building new homes. At some point people are going to
start buying new cars again, but it's going to take a little bit of
time for the automakers to get back on their feet.
So employment is something that we're going to have a difficult time
for the next several months, maybe through the end of this year, but
I'm confident that we're taking the steps that are required to create
these new jobs of the future.
DR. BERNSTEIN: After the last recession ended in 2001, the
unemployment rate went up for another 19 months before it started
coming back down.
This next question -- an area close to your heart -- health care
reform. From Richard in California: "Why can we not have a universal
health care system, like many European countries, where people are
treated based on needs rather than financial resources?"
THE PRESIDENT: Well, first of all, I was in this room last month in
what we called a health care forum. And we brought all the members of
Congress, Republicans and Democrats who were interested in this issue;
we brought together various constituency groups, insurance companies,
drug companies, you name it. And my message to them was: Now is the
time to reform the health care system -- not four years from now, not
eight years from now, not 20 years from now. Now.
And the reason -- (laughter) -- the reason that I think it is so
important is that the high costs of health care are a huge drag on our
economy. It's a drag on our families. I can't tell you how many
personal stories that I hear about people who are working, maybe have
two parents working and yet still don't have health care. And the
decisions that they have to make -- excruciating decisions about
whether or not somebody goes to a doctor -- it makes them less
productive, it makes them less mobile in terms of being able to take
new jobs or start a new business because they're worried about hanging
on to their health care. So it's a drag on families.
But it's a drag on businesses, as well. There's not a small business
or large business out here who hasn't seen their health care costs
skyrocket, and it cuts into their profits.
And it's a drag on the federal budget and the state budgets. That's
the thing that is going to potentially break the bank here in the
United States. Medicare and Medicaid, if we don't get control of that,
that is the biggest driver of our long-term deficits.
So when people -- when you hear this budget debate that's taking place
right now, and folks say, oh, you know, President Obama's budget, he's
increasing money for veterans and he's increasing money for education,
and he's doing all these things that -- that's going to bust the
budget, what they don't understand is, is that if you add up the
recovery package that we've already passed and you add up the various
proposals I have to grow the economy through clean energy and all that
stuff that we're doing, that amounts to a fraction of the long-term
deficit and debt that we're facing. The lion's share of it has to do
with Medicare and Medicaid and the huge, rising cost of health care.
So our attitude is, better to pay now and make an investment in
improving the health care system rather than waiting and finding
ourselves in a situation where we can't fix it.
Now, the question is, if you're going to fix it, why not do a universal
health care system like the European countries? I actually want a
universal health care system; that is our goal. I think we should be
able to provide health insurance to every American that they can afford
and that provides them high quality.
So I think we can accomplish it. Now, whether we do it exactly the way
European countries do or Canada does is a different question, because
there are a variety of ways to get to universal health care coverage.
A lot of people think that in order to get universal health care, it
means that you have to have what's called a single-payer system of some
sort. And so Canada is the classic example: Basically, everybody pays
a lot of taxes into the health care system, but if you're a Canadian,
you're automatically covered. And so you go in -- England has a
similar -- a variation on this same type of system. You go in and you
just say, "I'm sick," and somebody treats you, and that's it.
The problem is, is that we have what's called a legacy, a set of
institutions that aren't that easily transformed. Let me just see a
show of hands: How many people here have health insurance through your
employer? Okay, so the majority of Americans, sort of -- partly for
historical accident. I won't go into -- FDR had imposed wage controls
during war time in World War II. People were -- companies were trying
to figure out how to attract workers. And they said, well, maybe we'll
provide health care as a benefit.
And so what evolved in America was an employer-based system. It may
not be the best system if we were designing it from scratch. But
that's what everybody is accustomed to. That's what everybody is used
to. It works for a lot of Americans. And so I don't think the best
way to fix our health care system is to suddenly completely scrap what
everybody is accustomed to and the vast majority of people already
have. Rather, what I think we should do is to build on the system that
we have and fill some of these gaps.
And I'm looking to Congress to work with me to find that optimal
system. I made some proposals during the campaign about how we can
lower costs through information technologies; how we can lower costs
through reforms in how we reimburse doctors so that they're not getting
paid just for the number of operations they're doing, but for whether
they're quality outcomes; investing in prevention so that kids with
asthma aren't going to the emergency room, but they're getting regular
checkups.
So there are a whole host of things that we can do to cut costs, use
that money that we're saving then to provide more coverage to more
people. And my expectation is, is that I will have a health care bill
to sign this year. That's what we're going to be fighting for. That's
what we're going to be striving for.
Can I just interrupt, Jared, before you ask the next question, just to
say that we -- we took votes about which questions were going to be
asked and I think 3 million people voted or --
DR. BERNSTEIN: Three point five million.
THE PRESIDENT: Three point five million people voted. I have to say
that there was one question that was voted on that ranked fairly high
and that was whether legalizing marijuana would improve the economy --
(laughter) -- and job creation. And I don't know what this says about
the online audience -- (laughter) -- but I just want -- I don't want
people to think that -- this was a fairly popular question; we want to
make sure that it was answered. The answer is, no, I don't think that
is a good strategy -- (laughter) -- to grow our economy. (Applause.)
So -- all right.
DR. BERNSTEIN: Thank you for clearing that up. (Laughter.) This next
question comes from Columbia, South Carolina: "The unemployment rate
for Iraq and Afghanistan veterans is higher than the national
unemployment rate. Our veterans are a national treasure. How can you,
the VA, and I ensure our veterans are successfully transitioning into
civilian life?"
THE PRESIDENT: That's a great question. You know, I had just an
extraordinary honor -- yesterday was Medal of Honor Day. And I went to
Arlington National Cemetery, and we had a ceremony in front of the Tomb
of the Unknown Soldier with a collection of Medal of Honor winners from
all our various wars.
And a special place of honor was a guy named John Finn, who had been
present the day Pearl Harbor was bombed. He was on one of the ships,
was shot by -- was strafed by the fire from the planes coming in, and
yet still had the presence of mind to shoot down a plane, and won the
Medal of Honor -- or was awarded the Medal of Honor for that.
And it just reminds you that we wouldn't be here if it hadn't been for
the sacrifices of earlier veterans. We would not -- (applause) -- we
would not enjoy the same safety and security and liberty that we do.
So when our veterans come home from Iraq and Afghanistan -- and they
have performed brilliantly, they have done everything that's been asked
of them, regardless of what your views are on these wars -- they have
earned these benefits that all too often we fail to give them.
And that's why in my budget we are increasing veterans funding by more
than any time in the last 30 years. We're going to make sure that we
deal with the -- (applause) -- we're going to make sure that deal with
the backlog that too many veterans experience in terms of getting
benefits. We're going to make sure that homeless veterans are
receiving housing and services.
The homeless rate for veterans is multiple times higher than it is for
non-veterans. That's inexcusable. It means that we're going to
provide services for Post-Traumatic Stress Disorder, that we're going
to provide services for Traumatic Brain Injury that are the signature
injuries of these recent wars. So we are going to significantly
increase veterans spending.
Now, just as is true generally, government alone can't do it. So all
of us individually are going to have roles. If you're a business
owner, hiring a veteran, not discriminating against somebody who's a
veteran is going to be absolutely critical. In your communities, in
your churches, in your neighborhoods, making sure that there's outreach
and celebration of veterans when they come home, that's going to be
critical.
I think we've done a much better job during these wars than we did
during Vietnam, where in many cases our treatment of veterans was
inexcusable. But we can always do more. Government is going to do its
role, and then we've got to make sure that our communities do their
role, as well.
DR. BERNSTEIN: Mr. President, the next video will be our last Internet
question before we turn to the audience for Q&A for follow-up. Let
me also note that this question from Alex in Ohio happens to be about
the same topic that the Middle Class Task Force is focusing on this
month. Let's turn to this:
"Hi, Mr. President. My name is Alex. My name is Kristin (ph). And
I'm Mallory (ph). We are all sophomores at Kent State University in
Ohio. We really like the emphasis you've put on education so far in
your administration, but we're concerned about higher education. Our
question is: What proposals do you have to make college more
affordable and to make student loans easier to get? And when will your
national service program be available so we can take advantage of the
scholarship? Thank you, Mr. President!"
THE PRESIDENT: That was pretty well done. (Laughter and applause.)
Well, I am very excited about the possibility that we may be able to
get national service done in the next few weeks. National service was
a priority for me during the campaign, partly because of my own
biography. I found my calling when I became a community organizer
working in low-income neighborhoods when I was 22, 23 years old. And
it gave me a sense of direction, a sense of service, it helped me grow,
it helped me give back. And I think there are young people all across
America who are eager for that opportunity.
And so what we've said during the campaign was, let's set up a
situation where every young person who is so inspired can take
advantage of service, and in exchange they will help be able to finance
their educations.
And I'm confident that we're about to get legislation passed. And once
that legislation is passed, I think that before the end of the year
potentially we can get something implemented on that front.
In addition, what we are also doing is to try to make the student loan
and student grant programs that are already in place work better. So
just to give you one example, right now a lot of the student loan
programs run through banks, but a lot of them go directly to students
from the government -- so-called direct loans. The banks make several
billion dollars' worth of profits off managing these student loans,
which would be okay except for the fact that these loans are guaranteed
by the federal government.
So, the reason banks are able to make money lending you is because --
that there's some risk that you might not pay it back, plus you're
giving up the use of your money for -- they're giving up the use of
their money for a while. If, on the other hand, this is the
government's money and they're just a pass-through, it doesn't seem
very sensible that banks should be making money that way.
So what we've said is let's make all these direct loans, as opposed to
having bank intermediaries or -- and not just banks -- financial
services organizations. They can make profits on other things, but
let's not have them make profits on this. Let's take those billions of
dollars, and that then allows us to either lower student loan rates or
expand grants.
And one of the things that we want to do is on the Pell grant program,
for example. We want to increase the amount of the Pell grant so that
it catches up with inflation and we want to -- we want more young
people to be eligible for the Pell grant program. And that's
particularly important because anybody who's financed their educations
understands that grants are a lot better than loans. And when I was
going to college, about -- and this was typical for I think college
students -- the average student who needed financial assistance, about
70 percent of it came in grants and about 30 percent of it came in
loans. Today, it's reversed: 30 percent come in grants; 70 percent
come in loans. And so students are loaded up with $20,000, $30,000,
$40,000 worth of debt -- and this is just for their undergraduate
education; that doesn't even start counting their higher ed.
And if you come out of college with $50,000 worth of debt, it's hard
for you to then start making a decision about wanting to be a teacher,
or wanting to go into social work, or wanting to be a scientist and
research to find the next innovation. You may decide, well, the only
thing I can do is to work on Wall Street or work in a big corporation
that's not doing cutting-edge research.
And we want people -- all that's fine, I mean, those are good career
choices -- but we want our young people to have more flexibility, not
to mention we want them to be able to -- if they choose to get married,
to be able to buy a home and start a family without already having
essentially a mortgage that they're carrying with them out of college,
before they even buy a house.
So we're going to spend -- this is another area where we devote a
considerable amount of money in our budget. And I just want to remind
you of this, because we're having this budget debate in Washington
right now. And again, everybody says -- a lot of the critics out there
are saying, how is it that you're going to be spending all this money?
We've got to worry about the deficit, et cetera.
I just want to remind you that the money that we are spending on
education, on health care, and on energy -- if you added up all that
increased money that we're spending, it still is not what's driving our
long-term deficits. What's driving it is Medicare, Medicaid, a
structural gap that we have because of the Bush tax cuts over the last
several years that left us spending a lot more than we were saving.
And it's going to take us a while to dig our way out of that problem.
But the way to dig our way out of that problem is not to shortchange
investments in our people. A lot of -- I'll bet there are a bunch of
families here who are making some tough choices right now, and who are
scrimping a little bit and saving.
Now, somebody could make the same argument to you that folks are making
to us with respect to the budget, which is, you can't afford to be
sending your kids to college right now. That's fiscally
irresponsible. You're taking out debt for your kids to get an
education. It's better for you to just put them to work right now at a
fast-food place, and they'll be bringing in a little bit of income.
And maybe later they can go to college.
Well, most of us don't make that decision, because we understand that
making the investment now will lead to greater opportunity, greater
economic advancement later. Well, the same thing is true in our
economy. We can't shortchange the investments that will allow us to
grow in the future.
We're going to have to impose discipline and eliminate programs that
don't work, and we're doing that. We're cutting this budget by $2
trillion. And we're cutting the deficit in half by the end of my first
term.
But what we can't shortchange are those things that are going to allow
us to grow long term. I don't want us to constrict and reduce our
ambitions, and set our sights lower for our kids and the next
generation, because we weren't willing to make those investments now.
That's not how America works. (Applause.)
All right. So now -- the folks here have been very patient, so all of
you who are watching this live-streaming online, we're actually going
to have some live stuff instead of some virtual stuff. We're going to
ask -- get some questions or comments from the audience. And I'm going
to go boy, girl, boy, girl -- (laughter) -- to avoid anybody being mad
at me. We'll start right there, yes. And we've got some microphones
so everybody can hear you.
Q Mr. President, my name is Ellie (ph). I'm from Maryland, but I'm
originally from Michigan. I have family members who work for GM and
Ford. I know the top executives have made -- of the auto companies --
have made a lot of bad moves over the years, but I can't imagine the
suffering that we would see in the Midwest if these companies went
under. So my question to you is, what specific steps do you see your
administration taking about the health of the auto industry?
THE PRESIDENT: Okay. It is a very topical question because I'm going
to be making some announcements over the next several days about the
auto industry. I don't want to make all the news here today, so I'm
not going to be as specific as you'd like, but I guarantee in the next
few days you will have a very extensive answer on what we need to do.
Let me give you my general philosophical approach, and that is that we
need to preserve a U.S. auto industry. I think that's important. I
think it's important not just symbolically; it's important because the
auto industry is a huge employer -- not just the people who work for GM
or Ford or Chrysler, but all the suppliers, all the ripple effects that
are created as a consequence of our auto industry.
But my job is also to protect taxpayers. And you're right -- there's
been a lot of mismanagement of the auto industry over the last several
years.
Now, right now we are in such a bad crisis that even Toyota is losing a
whole lot of money. So typically you're looking at $14 million -- or
14 million new cars are sold every year. Is that right, Jared, in an
average year for our population? It's gone down to 9 [million].
Everybody has pulled back -- partly because the credit-crunch people
couldn't get auto loans; people were worried about, am I going to keep
my job, so they decided let's put off buying the new car. The point
is, is that you've seen this huge drop-off. So every automaker is
getting killed right now.
I think it is appropriate for us to say, are there ways that we can
provide help for the U.S. auto industry to get through this very
difficult time -- but the price is that you've got to finally
restructure to deal with these long-standing problems. And that means
that everybody is going to have to give a little bit -- shareholders,
workers, creditors, suppliers, dealers -- everybody is going to have to
recognize that the current model, economic model, of the U.S. auto
industry is unsustainable. Even if sales go back to 14 million, which
eventually they will, it's still a model that doesn't work. Just
trying to build more and more SUVs and counting on gas prices being low
and that's your only profit margin, that's just not a model that's
going to work.
So what we're expecting is that the automakers are going to be working
with us to restructure. We will provide them some help. I know that
it is not popular to provide help to autoworkers -- or to auto
companies. But my job is to measure the costs of allowing these auto
companies just to collapse versus us figuring out, can they come up
with a viable plan? If they're not willing to make the changes and the
restructurings that are necessary, then I'm not willing to have
taxpayer money chase after bad money.
And so a lot of it's going to depend on their willingness to make some
pretty drastic changes. And some of those are still going to be
painful because I think you're not going to see a situation where the
U.S. automakers are gaining the kind of share that they had back in the
1950s. I mean, we just didn't have any competition when -- back then,
Japan was in rubble, Europe was in rubble -- we were the only players
around. And that's not going to be true. This is going to be a
competitive global market. We have to make those adjustments.
All right. Okay. It's a gentleman's turn. All right, this gentleman right here. We got a microphone behind you.
Q Good afternoon, Mr. President. My name is Carlos Del Toro. I
served in the Navy for 26 years, retired four years ago, and started a
small business. So I first want to thank you for all the efforts that
you and your administration has done on behalf of veterans and also on
behalf of small businesses.
THE PRESIDENT: Well, we appreciate your service. Thank you.
Q Thank you, sir. My question is, one of the things that I have
experienced over the last four years as a small business trying to do
business in the federal procurement business, essentially, as a small
engineering company, is the challenge of the bundling of contracts,
which has made it increasingly difficult for service-disabled
businesses -- all small businesses across the nation -- to compete
basically within the federal procurement system. I know that you
believe in fair and open competition on a broad basis. I would suggest
to you, and my question to you is, will your administration look at
this issue and try to unbundle these contracts that make it more
competitive for small businesses to work in the federal marketplace?
THE PRESIDENT: It's a great question. It's an issue that I'm familiar
with. Just by way of background for people who aren't as familiar with
federal purchasing, the federal government is such a big customer that
sometimes for administrative convenience, what they do is they just
say, here, Halliburton, here's a contract for $20 billion to do all
these various things, and then you sort of figure out how you're going
to divvy it up. Well, it may be that -- I'm sorry, what was your name?
Q Carlos.
THE PRESIDENT: It may be that Carlos has a better product to sell --
(laughter) -- you know, for a segment of that contract, but he can't
bid on the entire thing, all right? And so what ends up happening is
the taxpayer loses the benefit of a better product at a better price
because everything is bundled into this huge contract with a giant
general contractor who then divvies up the business.
So one of the things that we're trying to figure out is, are there are
ways that we can unbundle and unpackage some of these goods and
services that the government purchases. It'll save taxpayers' money.
It'll promote more competition. Carlos is still going to have to bid.
He's still going to have to prove that his price is better and his
product is better, but at least he's got a chance.
Now, we're not going to be able to do that on everything, because there
are some things that, frankly, you need some economies of scale,
right? But what we want to do is make sure that we're looking for
every opportunity to unbundle to give everybody a chance to compete so
that we don't just have one or two or three major contractors who are
getting every contract, because at a certain point what ends up
happening is those contractors get so much clout in Washington, they're
getting such huge contracts, then they start spending a million dollars
on lobbyists to make sure that the contracts keep going the same way.
You start seeing the system distorted in ways that aren't healthy. And
the more players there are, the more Carloses there are who are out
there scratching and striving to get some business, ultimately the
better deal we'll get as taxpayers.
So, great. Okay. Here you go.
Q My name is Linda Bock and I'm a registered nurse just in Prince
George's County, Maryland -- been there 34 years at a free senior
health center. And I'm here with my fellow nurses from SEIU. First of
all, thank you for listening to us, because as nurses we do listen to
our patients all the time. We're their advocate. And so we appreciate
this opportunity for you to hear from us.
One of the things we want to make sure is that nurses are represented
in the health care forum committees -- reform committees because we
want to be there on behalf of our fellow nurses and on behalf of the
patients that we sometimes have to speak up for. So I really hope that
we can be there so we can push the things like prevention and education
that are so very important so that we don't use our emergency rooms for
their doctor visits and that we have more community-based health
centers for those that are in need. And I just -- I really appreciate
this opportunity to be heard.
THE PRESIDENT: Well, I appreciate that. I guarantee you nurses were
part of the health care summit, and they will be at the table in all
these discussions. I'm biased toward nurses, I just like nurses --
(laughter). When Michelle and I went in and Malia was being born, the
OB/GYNE was a close friend of ours and so was much more attentive than
the usual OB/GYNE might be. But the fact is, we only saw her for like
15 minutes. The rest of the time, it was nurses who were doing
everything. When Sasha, our little precious pea -- (laughter) -- she
got meningitis when she was three months old -- very dangerous. The
doctors did a terrific job, but, frankly, it was the nurses that were
there with us when she had to get a spinal tap, and all sorts of things
that were just bringing me to tears.
And we've got a problem in this country, which is we have a shortage of
nurses -- makes no sense, given this unemployment rate. But the reason
is, is because the pay of nurses, the hours of nurses, the quality of
life of nurses, the fact that nurse professors are even worse paid than
the nurses themselves, so that you get these huge bottlenecks in terms
of training as many nurses as we want.
All these issues are part of the inefficiency of the health care system
that has to be fixed. And the more we're emphasizing primary care,
preventive care, wellness -- all of which will save us money in the
long term -- the more that we can deploy nurses as the troops on the
front lines in ultimately driving down some of these health care costs.
So I think it's very important that nurses are a part of this process.
Here, we've got a mic. I'm hanging on to my mic. (Laughter.)
Q Yes, sir.
THE PRESIDENT: I might not get it back. (Laughter.)
Q Sir, you're the President, you always get it back. (Laughter.)
Sir, I'm Tom Sawner. I'm a service-disabled veteran, small-business
owner in Arlington, Virginia. My company, Educational Options, works
with public schools. We serve more than 200,000 at-risk kids within
public schools, providing online content, partnering with teachers, and
I was honored to serve on your education platform committee.
THE PRESIDENT: Wonderful.
Q Today my question is, as a small-business owner, my company is
still profitable. We're still growing, we're still hiring. The money
that I make as a profit, I'm plowing right back in, and even the money
that I pay to the bank for my business loans. Yet under current tax
laws, all of that counts as income to me before I ever see a penny of
it.
Sir, could you please help small businesses by allowing, some way,
somehow, money we pay to the bank in principle to not count against our
income, and put us in the "richest" before we ever seem a dime, and
allow us to invest in this huge engine to drive economic recovery?
And a final question: As a veteran, would you please see if we can
enforce the existing laws for veteran and other small-business
set-asides? Thank you, sir.
THE PRESIDENT: Okay, good. Well, thank you for the question.
Obviously, I'm not completely familiar with your circumstances or your
tax status. But we want to do everything we can to relieve the tax
burden on startups and small businesses, and as they grow, then their
tax burden is going to grow accordingly.
So one of the things that we have already proposed and is reflected in
our budget is that we are eliminating capital gains taxes for small
businesses. That's something that we've already proposed and put in
place.
Now, what'll happen is, you won't see that reflected in an immediate
benefit because it will kick in five years from now. The law starts
now, but you have to have those capital gains accumulate over the
course of five years before it counts, because we don't want people
gaming the system. But that's an example of the kinds of tools that we
are already putting in place in the tax code to provide you relief, so
that as you're reinvesting, that you are not penalized for that
reinvestment.
And we will do everything we can to enforce the existing rules with regard to small businesses for veterans.
Okay, this young lady back here.
Q Hi, Mr. President. Thank you so very much for having me, a public
school teacher from Philadelphia, Pennsylvania, here to be with you.
THE PRESIDENT: What's your name?
Q Bonnee Breese.
THE PRESIDENT: Good to see you, Bonnee.
Q Thank you. I'm from Overbrook High School. I have to say that, because I know all the children are watching. (Laughter.)
THE PRESIDENT: All right. Hello, Overbrook. (Laughter and applause.) There you go.
Q Thank you. Two questions in reference of education, since this is
a major part of your budget plan and platform. Definitions of charter
schools and definitions of effective teachers -- how do you plan to
define those two categories? And are you willing to have teachers on
the platform, in the committees, as a part of developing those plans?
THE PRESIDENT: Absolutely. Well, as I said, the teachers are the most
important person in the education system. So if we don't have teacher
buy-in, if they're not enthusiastic about the reforms that we're
initiating, then, ultimately, they're not going to work. So we've got
to have teacher participation in developing these approaches.
The definition of charter schools is pretty straightforward. And that
is that in most states you now have a mechanism where you set up a
public school -- so this is not private schools, these are public
schools receiving public dollars -- but they have a charter that allows
them to experiment and try new things. And typically, they're
partnering up with some sort of non-for-profit institution.
So, in Chicago, you've got charter schools that are affiliated with a
museum, or they're affiliated with an arts program, and they may have a
particular focus. It may be a science charter school, or it may be a
language academy. They are still going to have to meet all the various
requirements of a state-mandated curriculum; they're still subject to
the same rules and regulations and accountability. But they've got
some flexibility in terms of how they design it. Oftentimes they are
getting parents to participate in new ways in the school. So they
become laboratories of new and creative learning.
Now, there are some charter schools that are doing a great job, and you
are seeing huge increases in student performance. And by the way --
one last point I want to make about these charters -- they're
non-selective, so it's not a situation where they're just
cherry-picking the kids who are already getting the highest grades;
they've got to admit anybody. And typically there are long waiting
lines, so they use some sort of lottery to admit them.
Some of them are doing great work, huge progress and great innovation;
and there's some charters that haven't worked out so well. And just
like bad -- or regular schools, they need to be shut down if they're
not doing a good job. But what charters do is they give an opportunity
for experimentation and then duplication of success. And we want to
encourage that. So that's the definition of charters.
In terms of teachers, how we measure performance -- as I said before, I
have been a critic of measuring performance just by the administering
of a single high-stakes standardized test during the year, and then the
teacher is judged. And that was, I think, the biggest problem with No
Child Left Behind. It basically said that you just go in -- (applause)
-- here's the standardized test, we'll see how the kids are doing; and
because it doesn't even measure progress, you could have a very good
teacher or a very good school in a poor area where test scores have
typically been low, and they are still punished even though they're
doing heroic work in a difficult situation.
The other problem is that you started seeing curriculums and teachers
teaching to the test -- not because they want to, but because there's
such a huge stake in doing well on these tests that suddenly the
science curriculum, instead of it being designed around sparking
people's creativity and their interest in science, it ends up just
being, here's the test, here's what you have to learn -- which the
average kid is already squirming enough in their seat; now they're
thinking, well, this is completely dull, this is completely
uninteresting. And they get turned off from science or math or all
these wonderful subjects that potentially they could be passionate
about.
So what we want to do is not completely eliminate standardized tests --
there's a role for standardized tests. All of us have taken them and
they serve a function. We just don't want it to be the only thing. So
we want to work with teachers to figure out how do we get peer review,
how do we have evaluation -- I was just talking to Bill Gates yesterday
and he was talking about the use of technology where you can use videos
to look at really successful teachers and how they interact with their
students, how they're monitoring students, et cetera, and then you
bring in the teachers at the end of the day and, just like a coach
might be talking to his players about how you see how on that play you
should have been here and you could have done that -- same thing with
teachers.
But they don't get that feedback. Usually, especially beginning
teachers are completely isolated. They're in this classroom -- they're
sort of just thrown in to sink or swim. Instead, let's use a variety
of mechanisms to assess and constantly improve teacher performance.
Now, one thing I have to say -- I know you'll admit this, although
maybe you can't on TV, but in private I'll bet you'd admit that during
the -- how long have you been teaching?
Q Fifteen years.
THE PRESIDENT: Fifteen years. Okay, so you've been teaching for 15
years. I'll bet you'll admit that during those 15 years there have
been a couple of teachers that you've met -- you don't have to say
their names -- (laugher) -- who you would not put your child in their
classroom. (Laughter.) See? Right? You're not saying anything.
(Laughter.) You're taking the Fifth. (Laughter.)
My point is that if we've done everything we can to improve teacher pay
and teacher performance and training and development, some people just
aren't meant to be teachers, just like some people aren't meant to be
carpenters, some people aren't meant to be nurses. At some point
they've got to find a new career.
And it can't be impossible to move out bad teachers, because that
brings -- that makes everybody depressed in a school, if there are some
folks -- and it makes it harder for the teachers who are inheriting
these kids the next year for doing their job.
So there's got to be some accountability measures built in to this
process. But I'm optimistic that we can make real progress on this
front. But it's going to take some time. All right?
DR. BERNSTEIN: Mr. President, we have --
THE PRESIDENT: How many times --
DR. BERNSTEIN: One more question, please.
THE PRESIDENT: Oh, one more question. Now, yelling -- just saying it
right here is not going to get you the question. (Laughter.) You know
what I'm going to do, is -- I hope I don't seem biased here; I'm going
to go with a young person here. Last question -- at least younger than
me. (Laughter.)
Q Thank you, Mr. President. My name is Sergio Salmeron. I want to
find out about health care. In a society, a lot of times we have to
step back and ask ourselves if what we're doing in principle, not in
practice, is right. And so when we think about health care, I want to
know from you if the things like preexisting conditions and preventive
medicine, if they are a symptom of what's going on in our health care
system, then what is the problem and how do you address it?
THE PRESIDENT: Well, I'll talk to you about preexisting conditions,
because this is something that I talked about during the campaign; it's
something that touched on me personally.
My mother contracted ovarian cancer when she was 53, and she died six
months later. It's one of those cancers that typically is diagnosed
very -- at late stages; it's hard to catch early.
She was at the time working as an independent contractor. She was
working for an international assistance organization. And so she had
insurance, but when she was diagnosed and the medical bills started
mounting up, some of -- this insurance company started saying that this
is a preexisting condition, so maybe we don't have to reimburse you.
And we had to spend a bunch of time fighting with these insurance
companies about this issue.
Now, eventually we were lucky we got these costs approved, because the
point was she didn't know, nobody had diagnosed it, and if you start
having a -- the standard of preexisting condition is you might have had
that illness some time at some point before you -- or you were
genetically predisposed to it, potentially none of us would ever get
any insurance.
So -- but I still remember watching her -- you know, she's sick, she's
going through chemotherapy, and she's on the phone arguing with
insurance companies. And she's lucky she had insurance. There are
tons of people out there who, once they've had one heart attack, once
they've been diagnosed with diabetes, once they've got some form of
chronic illness, from that point forward it is almost impossible for
them to get health insurance. And if their employer, especially if
it's a small employer, wants to give them health insurance, the costs
are so prohibitive that they can't do it even if the employer wants to
help.
I mean, if Carlos has got a small business, if -- I don't know how many
employees he has, but if he has 10 employees, 22 employees, and if one
of them got a serious illness like leukemia, it would send his
insurance rates skyrocketing to a point where he just couldn't operate.
So this is why any reform of the health care system I think has to
address this issue, and to say we are going to allow anybody to get
health insurance. And if you've got a preexisting condition you're not
going to be excluded but you're going to be able to obtain health
insurance. And if you can't obtain it through a private plan then
there is going to a public plan that is available in some way to give
you insurance, or insurers are obligated to provide you with insurance
in some way.
Now that's a principle. What are the details of how we're going to do that? There are a lot of different approaches.
We have seen some progress with the insurance companies where they have
said, we are willing to take everybody in, but only if everybody is
required to be in. That's the position that they're taking right now.
So the idea is you combine a rule that eliminates preexisting condition
exclusions with mandatory health insurance, just like auto insurance is
mandatory. That's a proposal they've put forward.
Now, that's progress in the sense that they've acknowledged that this
preexisting condition situation is a real problem. Whether that ends
up being the best mechanism -- during the campaign, I was skeptical of
mandates only because my attitude was the reason people don't have
health insurance is not because they don't want it, it's because they
can't afford it. And if we drive down cost, then people will have it.
But that's part of the debate that's going to be taking place over the
next several months as we try to develop a health care plan for the
future.
Okay? Listen, I know that there were other people who had questions,
both here in the live audience, as well as in our virtual audience.
But we're out of time. I just want to say thank you for
participating. Thanks for paying attention. And we need you guys to
keep paying attention in the months and years to come. (Applause.)
Thank you, everybody. (Applause.)
END
12:50 P.M. EDT
