Press Gaggle on the President's Upcoming Trip to India

James S. Brady Press Briefing Room

PRESS GAGGLE
BY PRESS SECRETARY ROBERT GIBBS;
UNDER SECRETARY OF STATE FOR POLITICAL AFFAIRS
WILLIAM BURNS;
DEPUTY NATIONAL SECURITY ADVISOR FOR
INTERNATIONAL ECONOMIC AFFAIRS MIKE FROMAN;
AND DEPUTY NATIONAL SECURITY ADVISOR FOR
STRATEGIC COMMUNICATION BEN RHODES

** The audio from this portion of the transcript may be used for broadcast.

1:06 P.M. EDT

MR. GIBBS:  Let’s go ahead and get started.  Just to remind you, this is -- we're going to walk through the India portion of the upcoming foreign trip.  We will do, likely tomorrow, the non-India, non -- sort of G20-APEC stuff tomorrow.  And we'll probably do the economic stuff the beginning part of next week, probably on Monday.

     Q    What time tomorrow?

     MR. GIBBS:  I do not know the exact time tomorrow, but we'll get that around. 

     There’s no embargo on this and obviously we are on the record.  We are going to hear from three people today:  Ben Rhodes, who you know -- the Deputy National Security Advisor for Strategic Communications; Mike Froman, the Deputy National Security Advisor for International Economic Affairs; and Bill Burns, our Under Secretary of State for Political Affairs.

     So, with that, let me turn it over to Ben.

     MR. RHODES:  Thanks.  And as Robert said, we'll do questions on the rest of the trip tomorrow and later in the week.  But we wanted to focus on India today.

     So I'll just -- let me just say a few things and then go through the schedule.  First of all, as you’ve heard me say a number of times, we believe that Asia is critical to our foreign policy strategy.  It’s the fastest-growing markets in the world. It’s fundamental to our export initiative.  So India is a cornerstone of our broader Asia approach, which is focused on, again, expanding exports for U.S. goods, deepening partnerships in important part of the world, partnering together in the G20 and other forums -- which Mike has the pleasure of representing us in.

     So, with that context, let me go through the schedule now.  We leave on Friday, the 5th.  We get there the 6th.  The first event that the President will do will be a statement at the Taj Hotel where he’s staying, to commemorate the Mumbai terrorist attacks.  And of course, India is a close counterterrorism partner of the United States.  India has shown remarkable resilience in responding to terrorism.  And the Taj, where the President is staying, was, of course, a centerpiece of those attacks in Mumbai.  So the President wanted to take the time to pay his respects to the victims who lost their lives and to sign the guest book there, but also to make some brief remarks to an assembled group of people who are connected to those attacks.

     From that event at the Taj Hotel he’ll move on and he’ll visit the Gandhi Museum.  I think it’s important to note here that obviously one of the things that the United States shares with India is they’re the two world’s largest democracies.  We believe that that's fundamental to our relationship; it makes it a qualitatively different relationship in the sense that we have shared interests and shared values.  

     And of course, the example of Gandhi is one that has inspired Americans, inspired African Americans, including Dr. King, and it’s very personally important to the President. So we're looking forward to visiting the Gandhi Museum to underscore those shared experiences and shared values.

     From there we're going to move on to a business summit that the U.S.-India Business Council is putting together.  And Mike can talk about this at some length.  But of course, as I said, we believe that India has a hugely dynamic and growing market and we want to discuss opportunities for how we can deepen our economic relationship.

     The President will participate in three events at the business summit.  The first is a roundtable with entrepreneurs.  The second is a roundtable with some U.S. CEOs where they’ll be able to discuss the challenges and opportunities around doing business in India.  And then the President will deliver a speech to the business summit, so the speech the President will give that day is kind of the centerpiece of the day, again, focusing this day on the U.S./India economic relationship, the enormous potential for both countries to expand growth and opportunity for our people through that relationship.

     Then we spend the night in Mumbai.  The second day has a number of events that are focused on the future partnership that we're trying to build with India and how it’s a relationship that we really believe is going to be indispensable to shaping the 21st century.  And Bill can talk about this in a little bit.  And the President is going to begin the day by visiting a school in Mumbai, a local school.  Diwali, of course, a preeminent Indian holiday, will be taking place during the President’s visit, so he will visit a school and help -- participate in celebrations around the Diwali holiday that morning.

     Then he'll go to a town hall with university students, and at that town hall he will, again, have the opportunity to talk about the future -- speaking to young people -- about the future partnership that we're trying to build as we take the U.S./India relationship to a new level.

     On the margins of that town hall, we're going to have a couple of events -- roundtables -- that focus on particular areas of partnership that the U.S. and India are pursuing.  One is on agriculture and food security.  And the U.S. and India -- India, of course, has had tremendous success in helping lift some of its people out of poverty through agricultural innovation.  And our partnership with them has been strong in that respect.  And this is an opportunity to talk about that partnership, and also its potential to service our broader food security initiatives in places like Africa, as well as continuing to advance our bilateral cooperation with India.

     Secondly, democracy -- I mentioned the close ties we have as the world’s two largest democracies.  You heard the President speak at the U.N. General Assembly about his commitment to open government as a part of how we advance democracy around the world.  So what we want to do is highlight some of the successful innovations that India has as the world’s largest democracy in terms of the ways in which it uses technology and innovation to empower its citizens and civil society, as well.
 
     So the President’s, again, main public event that day is the town hall, which is its own event there in Mumbai.  
 
From Mumbai, we then move on the Delhi.  And the first event that the President will do in Delhi is a cultural stop.  He’s going to visit Humayan’s tomb, which is one of the great cultural marvels in New Delhi.  And the President felt it was important give the rich civilization that India has to pay tribute to that through this stop.
 
     And then that night, the President will have a private dinner with -- the President and the First Lady will have a private dinner with Prime Minister Singh and his wife.
 
     I’ll just state briefly on that, no leader -- the President has had a very close personal relationship with Prime Minister Singh from his first meeting in London at the G20.  As much as any leader in the world, I think he’s somebody who has had a close intellectual connection with the President on a range of issues surrounding economic growth and development, so he’s very much looking forward to this opportunity to have a private dinner with the Prime Minister.
 
     Then the next day in New Delhi is the official program.  It will begin with a wreath-laying at Gandhi’s grave -- again, another opportunity to pay respects to that huge historical figure in our history, as well as India’s.  
 
Then the President will have a bilateral meeting with Prime Minister Singh.  And we expect they’ll have a press conference after that bilateral meeting.  
 
     Throughout the day, the President could have a number of meetings with other Indian officials.  We, as the schedule gets locked in, will make those available to you.
 
     And then the main event of this day is the President will address the Indian parliament that afternoon.  The President was honored to be invited by the Indians to speak before their parliament, and, again, I think here will address the broad range of issues on which the U.S. and India cooperate -- political, security and economic -- and the alignment we have with the Indians on a number of issues.
 
     And then that night is the state dinner.  The Indians are hosting a state dinner.  And the President will meet I believe with President Patil before that dinner, and then he and the First Lady of course will attend the state dinner.
 
     And then the next day -- we’ll spend the night in New Delhi that night, and then Tuesday, the 9th, we’ll leave and move on to Jakarta.
 
     With that, I'll turn it over to Bill -- and happy to take your questions on any of this later.
 
     MR. GIBBS:  Let’s go a little out of order.  We’ll go with Froman first because Mike’s got to go see the President in a few minutes.
 
     MR. FROMAN:  He always uses that excuse, right?  (Laughter.)  
     MR. GIBBS:  Yes, exactly, right.
 
     MR. FROMAN:  That’s what I tell my parents, anyway.
 
     MR. GIBBS:  It usually works.
 
     MR. FROMAN:  Well, thanks.  And just to build upon what Ben said, this really is one of the most important emerging economic relationships for the United States, both multilaterally and bilaterally.  We worked very closely with India in the context of the G20, and the G20 was really all about bringing countries like India to the table on economic -- on global economic issues.  And we have a very strong and growing bilateral relationship.  
 
As you all know, with 1.2 billion people and an economy growing -- expected to grow at 8 percent a year for the next several years, we really see India as a potentially very important market for U.S. exports.
 
     U.S. exports have already -- goods exports have already quadrupled over the last seven years to about $17 billion.  And service exports have tripled to about $10 billion a year.  So it’s a fast-growing economic relationship.  And it’s a two-way street as well.  Indian companies are the second-fastest-growing investors in the United States.  And they are creating -- they now support about 57,000 jobs here in the U.S.  
 
So it’s a great market for U.S. exports.  It’s a good place -- source of investment for the United States.  There are a lot of jobs in the United States tied to both of those things.  And that’s the reason why the President will be there, focusing, as Ben said, on the first day on the economic and commercial relationship --
 
     Q    What’s first?  You said they’re second.  What’s first?
 
     MR. FROMAN:  I believe it’s UAE -- in terms of fastest-growing in the United States, I believe it’s UAE.
 
     That day in Mumbai, as Ben laid out, the President will meet with various groups of business people, a group of Indian entrepreneurs who are importing U.S. technology and applying them to the Indian marketplace, and a group of U.S. CEOs, major CEOs, who will have a dialogue with the President about doing business in India and what can be done to expand it.  He’ll then give a speech to the U.S.-India Business Council -- CII/FICCI business summit in Mumbai -- and talk about the economic relationship and the potential that it has.
 
     MR. GIBBS:  Mike’s got to go, as I said.  Are there specific economic questions for him?
 
     Christi.
 
     Q    Yes, I do.  One quick thing about the business leaders.  Are they there as part of the President’s delegation?  Is he convening them?  Are they part of the communication on the American side?
 
     MR. FROMAN:  There’s no official business delegation with the U.S.  They are there in their own capacity.  There will be a meeting in Delhi of something called the U.S./India CEO Forum, which are a group of CEOs from the U.S. and India who get together regularly and work on projects to strengthen economic cooperation.  And some of those CEOs belong to that forum as well.
 
     Q    And could you also just talk a little bit about -- how big a part of the President’s message is going to be devoted to opening markets, and do you expect actual takeaways, or is this just discussion?
 
     MR. FROMAN:  I think certainly that first day, the major focus of that day, in addition to the counterterrorism event and the visit to the Gandhi Museum -- but the major focus of that day will be his message on economics, on increasing exports, supporting jobs back here, and including highlighting some commercial deals that we hope to have consummated by that time.
 
     Q    Given the President’s concern about outsourcing U.S. jobs, how does he deal with the large number of Indians who are involved in computer skills and various interconnections with U.S. business?  
 
     MR. FROMAN:  I think one of the major themes I think that the President is likely to emphasize is that while that is part of the relationship, India is also a tremendous market, potential market, for U.S. exports and a source of investment back in the U.S.  And so it’s more than a unidimensional relationship and it’s a tremendous opportunity for goods, services, agriculture that he'll be pursuing while he‘s there for supporting jobs back here in the U.S.
 
     Q    -- quantify it?
 
     MR. FROMAN:  The opportunity?
 
     Q    The relationship, the difference -- if there’s a trade imbalance of it there’s a job imbalance at all.
 
     MR. FROMAN:  The trade relationship is broadly balanced, including goods and services -- is broadly balanced at the moment.  
 
     Q    Just to briefly follow on that, I wonder how will he deal from a communications standpoint with the concern that many Americans express that so many jobs are being outsourced to India -- that when you call a credit card company or an airline, the phone is picked up by somebody in India?  Will he acknowledge and address that in any way?
 
     MR. GIBBS:  Look, India is in many ways fundamental to his economic message and has been for many years.  I think, as Mike said, we are -- and I think we'll see as we get closer -- not just the genuine potential of the market for American companies but some tangible impact in supporting and creating jobs here in America.
 
     MR. RHODES:  Just to add to that, this is part of -- consistent with the national export initiative. I think there will be a series of things that we talk about there that the President and the administration has done to promote U.S. exports, increase trade financing, advocate on behalf of U.S. companies seeking to export from the U.S. and creating jobs back here.
 
     Q    So he’s okay with the number of times Americans pick up the phone and they get somebody in India answering their questions so long as other exports have greater access there?
 
     MR. GIBBS:  Well, again, I think if you’ve been to any of our rallies in the past, say, four years, I think you’ve heard the President discuss changing the way our tax code is and ensuring that our taxpayers are getting a better deal.  That is not to say that given the size and the emergence of the market, that we're going to ignore opportunities for companies -- big, recognizable companies here in the United States to sell and distribute their goods in India, which creates jobs back here in America.       
 
     Q    But is the President going to talk, though, about that issue, the concern of outsourcing?  I mean, you talked about what the U.S. is doing, but that issue, in particular, is he going to say, listen, I realize there are concerns out there about the imbalance caused by outsourcing?
 
     MR. FROMAN:  I don't want to preempt what the President is going to say.  I would simply say that a key part of the message is going to be that we want to make sure there’s opportunities for U.S. jobs, U.S. exports.  And that's a big part of his mission there.
 
     Q    Will the President talk about the recently passed nuclear power law, ask for changes in it?  This 80-year sort of warranty --
 
     MR. FROMAN:  I’m going to leave that Bill as our resident expert on that issue.
 
     Q    There are reports that there are $12 billion worth of orders are being (inaudible) for the U.S.  This includes $5 billion for the defense and another $7 billion of commercial deals like the Boeing aircraft, which will create 50,000 to 60,000 jobs in the U.S. alone.  How do you think it is justified to level allegations like jobs are being outsourced to India?
 
     MR. FROMAN:  Well, I don't think I’d add anything to what we’ve already said.  I think the important thing is that there’s a large potential market there; that the President and the administration are active in promoting exports to ensure that there’s a level playing field there, there’s open markets there, and that our exports have an opportunity to penetrate that market and support jobs back here.
 
     Q    -- has come out with a report expressing concerns about some of the protectionist measures being taken by this administration and the Congress.  How do you plan to address that concern to U.S.-Indian companies?
 
     MR. FROMAN:  We are the most open economy in the world by any measure, and we have nothing at all to be concerned about with regard to our practices.
 
     Q    You were in Copenhagen.  You were aware of some of the frustrations in the negotiations both bilaterally and in the talks in general.  Do you think that the President will address any issues?  And do we have any leverage or latitude given the failure of the climate change legislation on the Hill?
 
     MR. FROMAN:  I think he and Prime Minister Singh have had a series of discussions every time they’ve met about issues like climate change.  And I imagine they will have a discussion about it as part of their bilateral dialogue.
 
     Clearly -- and this is another area where we work very closely with India -- whatever success there’s going to be in talks like climate change or in Doha will be in part because of the U.S. and India are working together on it.
 
     Q    What do you want to see from the Indians in these negotiations?  Is there anything in --
 
     MR. FROMAN:  On climate change negotiation?
 
     Q    -- in these conversation?  Is there anything particularly you --
 
     MR. FROMAN:  Together with Prime Minister Singh and other leaders, President Obama crafted the Copenhagen accord last year. And we’ve been working over the course of the year, including with our Indian counterparts, to try and make those more concrete and institutionalize some of the agreements that were made in Copenhagen.
 
     Q    Are you moving ahead with implementation of the standards that were adopted in Copenhagen?
 
     MR. FROMAN:  We’ve got more work to do, but we’re moving ahead.
 
     Q    Can you be a little more specific about trade issues that are going to be on the bilateral agenda?  Are we likely to see resolution of anything -- financial services, anything from the summit?
 
     MR. FROMAN:  I think there’s an ongoing dialogue between the two governments about outstanding trade issues, and the President, I imagine, will make clear the importance of removing barriers to U.S. exports and U.S. participation in their market. But I won’t get into any specifics about what we expect to reach agreement on.
 
     Q    The administration is obviously -- has obvious conflicts with China on aspects of economic policy, exports.  Could you talk about how perhaps India offers any better opportunities?  Is there more openness?  Is there more potential for U.S. investment and exports there?
 
     MR. FROMAN:  I think all I’d say is each country is different.  Both are fast-growing economies. We have a strong interest in ensuring that the fastest-growing economies in the world are open, create a level playing field for U.S. exporters, and allow us to take advantage of that growth to support jobs back here at home.
 
     But we have a dialogue with China.  We have a dialogue with India.
 
     MR. GIBBS:  Let me bring Bill in here now and we can --
 
     Q    Could you tell us what you’re meeting with the President about?  Is it this trip? (Laughter.)  
 
     MR. GIBBS:  They're doing -- this is -- they’re meeting about the G20.  
 
     Q    Just one more?  Mr. Froman, you had said -- sorry about that, nice try --
 
     MR. GIBBS:  Yes, go ahead.
 
     Q    -- earlier in your comments that the U.S. was going to consummate new deals while they were there.  What were you referring to?  New economic deals might be announced?
 
     MR. FROMAN:  All I was saying was that there are a number of large contracts being worked on between U.S. companies and their Indian counterparts, oftentimes with the support of the U.S. government in terms of our advocacy efforts or our trade finance being available.  And we hope to consummate some of these deals in the run-up to the President’s visits.
 
     UNDER SECRETARY BURNS:  Good afternoon, everybody.  I just had a few very brief points to provide a little bit of perspective on the relationship.  
 
     Q    Could you speak a little louder, please?
 
     UNDER SECRETARY BURNS: Sure.  I just had a few very brief points to provide some perspective on the U.S.-Indian relationship and underscore the potential in our partnership.  
 
First, the U.S.-India partnership for a number of years has been a genuine bipartisan priority in Washington -- the same is true in India.  Over the last decade through three administrations of both of our parties and two Indian governments of different parties, we’ve transformed the relationship.  The simple truth is that India’s rise and its strength and progress on the global stage is deeply in the strategic interest of the United States.
 
     Second, the President has called our relationship a defining partnership of the 21st century.  In many ways, we’re natural partners, as Ben has suggested.  We’re the world’s two largest democracies.  We’re both big, diverse, tolerant societies. We’re two of the world’s largest economies.  We both have an increasing stake in global stability and prosperity, especially across Asia and the Pacific.
 
     Third, defense cooperation between us is expanding in ways that were hard to imagine a decade ago.  India now holds more defense exercises every year with the United States than it does with any other country.  Some $4 billion in defense sales have been made by the U.S. to India over the last couple of years alone, with more possibilities ahead.  India is today one of the biggest contributors to U.N. peacekeeping forces.  
 
     Fourth, we have a lot to gain, as Mike was suggesting, by working together in high-tech cooperation and innovation.  The civilian nuclear agreement that was completed at the end of the last administration removed the single biggest irritant in our relationship and opened the door to wider cooperation.  We’ve worked hard in this administration to follow through, completing, for example, a reprocessing agreement between the U.S. and India six months ahead of schedule.  
 
     We look forward to U.S. companies contributing to Indian civil nuclear development.  And the signing today by the Indian government in Vienna of the Convention on Supplemental Compensation is a very positive step toward ensuring that international standards apply and that U.S. companies are going to have a level playing field on which to compete.  
 
     We’re also making progress on cooperation in space and updating export controls to reflect the reality of a 21st century partnership in which India is treated as a partner and not as a target.
 
     And finally, I think it’s important to stress that the growth of our partnership is about not just ties between governments but deepening connections between our societies.  Today there are more than 100,000 Indian students in American universities, more than from any other single foreign country.  Three million Indian Americans play a very vibrant role in American society.  And as Mike said, bilateral trade has quadrupled in the last decade.
 
     So that’s the backdrop to the President’s visit.  As Ben said, the fact that the President will spend three days in India, the longest single foreign visit of his presidency so far, the fact that this follows the first state visit of the Obama presidency by Prime Minister Singh last year, the fact that India is the first stop on a trip to four major Asian Democratic partners -- all of that underscores the significance and the potential of Indian/American partnership.
 
     MR. GIBBS:  Scott, do you want to pose your question?
 
     Q    Yes.  I thought it was more of a business question, but I guess it’s a political question, too.  Will the President ask for changes in the recently passed nuclear power law that I guess U.S. companies are seeing as a problem breaking into that market?
 
     UNDER SECRETARY BURNS:  Well, I'd say several things.  I mean, just to repeat, the signing today by the Indian government of the Convention on Supplemental Compensation, which is the basic international standard involving this kind of cooperation, is a very positive step.  What we seek is a level playing field for our companies.  India leadership has said that’s what it wants to ensure, too, and so I think we’re making progress.
 
     Q    Do you expect any gains in getting some Indian companies off the entities list?  Some of them are very unhappy about being -- it’s barring them from getting --
 
     UNDER SECRETARY BURNS:  I mean, that’s one of the subjects we’re talking about in the broad category of export controls, and we’ve had quite intensive discussions with the Indians about that.  So we’ll see where we get.
 
     Q    Under Secretary, you mentioned last June, I believe it was, in a speech, Aung San Suu Kyi in the context of the U.S.-Indian relationship.  You have the Burmese election November 7th -- that’s the day after the President arrives.  Will he, either in India with Prime Minister Singh and/or other parts of the trip, be addressing human rights issues?  And specifically will the U.S. more strongly speak out about the legitimacy of the election in Burma.
 
     UNDER SECRETARY BURNS:  Ben may want to add to this, but I mean, all I'd say, first on Burma, is that everything we’ve seen so far casts pretty serious doubts on whether this is going to be a free and fair election.  And we’ve made very clear the U.S. position that you’re not going to have free and fair elections unless you have the some 2,100 political prisoners released in Burma, and that obviously includes Aung San Suu Kyi.
 
     We have a very active dialogue with India about a whole range of regional issues, and that does include Burma.  And so, again, I can't predict exactly what the conversations are going to be, but I think you’ll continue to see a strong emphasis from the President, from the United States, on human rights issues across Asia and the Pacific.

     MR. RHODES:  The only thing I'd add to that is, as Bill mentioned, it’s not a coincidence necessarily that we're going to four Asian democracies on this trip -- India, Indonesia, Korea and Japan.  It’s, as the President discussed at the U.N., we want to underscore the success of democracy in Asia and around the world and we're going to speak specifically to human rights and democracy-related issues in India and at every stop essentially of this trip.

     And while I can't prejudge the outcome of the election, we've expressed concerns about it in ASEAN; we've expressed it in our bilateral channels to key governments in the region. And if the election does not meet the kinds of standards that we would like to see it meet -- and as Bill said, every indication is that it won't -- I'm sure it will be something that will come up in the course of the trip.

     Q    Quick follow-up.  Are you any closer to appointing a special coordinator for Burma?

     MR. RHODES:  Yes, it’s something we're looking at, but we have nothing to say on that today.

     Q    Russia, of course, has enjoyed a wonderful relationship with India over the years.  For you, when you work with both countries, is that sort of an obstacle or an opportunity in your work?  And also, I understand you talk with the Indians, among other things, about missile defense.  I only learned about that recently.  Can you tell us what that is about?

     UNDER SECRETARY BURNS:  I mean, India obviously has some important relationships with major powers around the world, and that's perfectly understandable and natural.  I mean, we see a lot of room and we've demonstrated over the last 10 years to expand the U.S./India partnership.  So that's what we're focused on.

     And I don't really have anything to add with regard to missile defense.  I mean, we have a pretty wide-ranging discussion with India about a whole range of issues, and as I said, our defense relationship has expanded quite dramatically in recent years -- but nothing in particular on missile defense.

     Q    I have two questions.  One is, first of all, on communications.  A lot of Americans are going to be wondering how this trip affects them, particularly after a very intensive political campaign here and you focused a lot on the economy.  Should we expect the President to make a concerted effort in all of his events to try to connect this trip to how this affects people in their real lives here?

     MR. GIBBS:  I think you’ll see from the very outset of the trip -- and if you think about it, we're talking about one of the -- well, first of all, we're talking about the fastest-growing economic region of the world.  And our ability to interact with it, to sell our goods and our services in that region of the world -- you heard the statistics that Mike had about our growing business investment in India.

     The trip goes on; it includes the G20.  So the trip is basically economic in focus.  I don't think -- and I think when people see the first day of this, they’ll understand that it is  -- our relationship with this region of the world and with this country is not disconnected in any way from what’s important to them in our ability to export our goods, to sell those products, and to create and support jobs here in America.  I don’t think that will be -- you won’t have to do much to demonstrate that from literally the moment that we land.

     MR. RHODES:  I'd just add to that, Ben, real quick, there’s -- in the 21st century, there’s really not -- a relationship with a major emerging power like India is something that directly affects the lives of the American people.  And if you just look at what we’re doing, in every way these are issues that directly impact within our borders.  
 
     So you’ve heard us talk a lot about the economic potential, the potential for job creation connected to exports and Indian investment in the American economy.  Counterterrorism -- the same kinds of extremist groups who have threatened India and in some instances launched attacks are connected to a broader network that threatens us.  So the counterterrorism cooperation that we have with India every day directly affects our security.
 
     The climate negotiations that Glenn asked about -- the President’s key point on climate was we need to move beyond Kyoto simply because we need to bring in the United States into an international climate framework, but also countries like China and India that are the world’s fastest-growing emitters.  
 
     So I think the economic message is very clear; the market potential is clear.  And then in a whole broad range of issues, these are things that directly affect the American people.  
 
     And on the economic point, I'd just point out it’s the G20 and then APEC as well, as the Asian economic forum -- Asia Pacific economic forum that we close in Japan.  So the two summits that he’s attending are entirely economic.
 
     Q    Okay.  I also wanted to make one more run at a question that came up a few days ago to you, Robert, about whether -- what was the specific reason why the President opted not go to the Golden Temple, which was something that was in his tentative plans?  Was it because he would have to cover his head and the concerns about him being perceived as Muslim --
 
     MR. GIBBS:  I'll take -- let Ben take another.  I think he’s going to tell you largely what I told you at the back of the plane.
 
     Go ahead.
 
     MR. RHODES:  I’ve been leading our trip planning here, so I’ve known this trip at every stage of our development.
 
     As Robert said, it’s a big country where we’d like to do a lot of things.  It’s an extraordinary country and we can never do as many events as we’d like to do.  We send advance teams to far more places than we’re ever going to visit.
 
     I think if you look at -- the schedule that we ended up is the schedule that best advances the purposes and interests of the trip.  We’ve got a very packed three days in Mumbai and Delhi that speak to those priorities, that reach out to the Indian people as well.
 
     So we arrived at the schedule we arrived at because we thought it was the best way to have a successful trip.  We’ve visited multiple religious sites -- mosques, churches, synagogues -- on foreign travel.  We’ll do so on this trip, probably in Indonesia.  So I think that the decision we made was driven by, again, the interests of time, how to best advance our common interests with India in these three days.  And, unfortunately, we’re not going to be able to get to get to every place we advanced.
 
     Q    Would it be fair to say, though, just to eliminate that as an issue, that that’s just wrong, that theory that that was the reason why --
 
     MR. RHODES:  Yes.  We -- again, we make the decision about the schedule based on the best way to advance our goals for the trip.  And with three days, we just thought that, when we really crunched it, Mumbai and Delhi, with a very packed official program, that the schedule we arrived at for those two cities filled up our time successfully.
 
Q    Just another question on messaging.  One of the lines we hear from the President on the stump now is when he’s talking about the Republican tax plan, saying that it’s going to cost $700 billion over 10 years and they would cut 20 percent of education funding, and India is not cutting education funding and China is not, either.  So how does he reconcile that message and then go to India and try and form this partnership and --
 
     MR. GIBBS:  First of all, I don’t think when he says it -- he’s not casting aspersions on the Indians or the Chinese.
 
     Q    -- competition.
 
     MR. GIBBS:  Well, I think he’s -- look, go back to virtually -- well, almost every speech he’s made, I think he picks -- there’s a -- I think the President has made clear in these speeches we don’t compete -- as he would say, kids in Chicago or kids in D.C. don’t just compete with kids in Richmond or kids in St. Louis.  They compete with kids all over the world to be among the best-educated workforce that we have available to create the types of goods and services that allow us to sell our products in India and in China and in other places.
 
     And I think it’s important -- again, the President is not casting aspersions on those governments for not cutting their education.  He is challenging us as a country to ensure that we make critical investments in what is ultimately going to be the most important thing that we’re going to be involved in, and that is ensuring that we have the best, most highly educated workforce in the world that can attract the type of jobs that are likely to be created in the 21st century.
 
     MR. RHODES:  The only thing I’d add real quick is this is a win-win economic relationship.  The kinds of -- Indian companies are investing in the American economy because of their faith in it.  Similarly, the kinds of deals that are being advanced, the kinds of partnership we’re building, certainly advances American economic interest and the interests of the American people in greater jobs and growth.  But it’s a kind of relationship that’s going to serve the interest, the economic interest of both the United States and India.  So we see it as a -- in addition to, again, what Robert said, we see this is as a win-win economic relationship.
 
     Q    What was the President’s reason for going to Golden Temple, had he gone? What was the reason he was planning it?
 
     MR. RHODES:  Well, sure. When we look at different stops to potentially visit, and we looked at a broad range in India -- and so I don’t want to kind of get into litigating out places that we’re not visiting beyond saying that we usually try to incorporate a cultural stop, cultural outreach into our trips.  He has very much enjoyed in the past his opportunity to pay respects to the vast diversity of cultures around the world.  
 
     In India, you have one of the most dynamic and tolerant and diverse societies in the world and we want to pay tribute to that.  And I think that’s particularly why, for instance, we wanted to have an event where we could celebrate in some fashion Diwali with Indian young people, and why we wanted to ensure that we had a culture stop in Delhi, in this instance visiting a tomb that has served as a precursor to the Taj Mahal and speaks to the huge -- the enormously impressive civilization that India has had over many centuries.
 
     Q    Would you consider going there in the future?
 
     MR. RHODES:  Certainly we wouldn’t rule out any visit in the future.  And, hopefully, we’ll be able to return to India.  But right now, we’re focused on this upcoming trip.
 
     Q    Will the President talk publicly or privately about Kashmir and the tensions between India and Pakistan?  Obviously, any progress there might provide a (inaudible) effect on the campaign in Afghanistan and Pakistan, and the U.S. campaign.  And can you talk about why he decided to go to Pakistan next year and not on this trip?
 
     MR. RHODES:  I’ll take the second one and then I’ll let Bill take the first because he is closer to that.  But I think again we have -- the President believes that the U.S. relationship with India and the U.S. relationship with Pakistan does not take place within any kind of zero sum dynamic.  It’s often been viewed that way in the past, that if we become closer to one it’s at the expense of the other.  And we’ve tried to send the signal that it’s the opposite with this administration; that, in fact, actually you see that borne out in the fact that we had a very successful strategic dialogue here, with the Pakistanis in town last week, discussing greater security cooperation in governance and economic issues.  And as a part of that, the President met with the Pakistani delegation and ended up speaking to President Zardari yesterday to discuss that strategic dialogue and said that he’d very much like to visit Pakistan next year and is planning to visit Pakistan next year.
 
     On this specific trip, again, we have a limited amount of time.  We have hard dates in terms of summits that we’re attending in Seoul and in Japan.  And we have a very robust program in India on the front end.  And so he wanted to make sure we have the proper focus on that Pakistan trip when it does take place.  
 
So he looks forward to that visit.  Again, we don’t see it as kind of a zero sum equation.  And I think the strategic dialogue speaks to the fact that we’re cooperating closely with Pakistan just as this visit speaks to a deepening relationship with India.
 
     UNDER SECRETARY BURNS:  And the only thing I’d add is that we have always welcomed dialogue between India and Pakistan and certainly encouraged efforts to improve relations between those two very important countries.  Obviously, the pace, scope and character of that dialogue is something that Indians and Pakistanis have to shape.  But we’ll continue to both welcome and encourage it.
 
     Q    How big a delegation will it be?  And do you have a sense of the schedule of the First Lady when she is in India?  
 
     And, secondly, Under Secretary Burns, you were in India a few days ago.   What’s the mood there, what’s the sense of the welcoming of the President?
 
     MR. RHODES:  I’ll take the first and then let Bill speak to that question.  On the delegation that we’re bringing, I’ll leave -- our Cabinet agency will be making announcements.  But I think a number of U.S. officials will be attending in addition to the kind of White House staff that normally goes.
 
     I know Tom Donilon is going, our new National Security Adviser.  Secretary Locke, given the Commerce Department’s role in some of the business events, will be attending.  And I discussed, for instance, the agricultural cooperation -- Raj Shah, who is our USAID Administrator, also -- I think our highest-ranking Indian American in the administration -- will be going.  So there will be a number of U.S. Cabinet officials, as well as a number of senior White House and NSC staff going.  
 
I’ll leave the second question to Bill.  Did you have another part to that?
 
     Q    Schedule of the First Lady?
 
     MR. RHODES:  Oh, First Lady -- that's right.  Thanks for asking.  The First Lady is going to be with the President -- let me just add, too, because I know that there’s different reports in the Indian press.  The children, Sasha and Malia, are not coming.  It’s during their school year, of course.  But the First Lady is coming.  
 
We’ll be announcing some independent events that she’ll be doing.  She is, however, accompanying the President to a number of his events, such as, again, the Mumbai town hall, the Diwali celebration -- and so the cultural stops.  She’ll be with him for certain things, but we expect her to do a couple of independent events.  We expect that they’ll be related to education and the empowerment of women and girls.
 
     So we’ll get you the information as soon as her schedule is locked.
 
     Q    Is she only going to India, though?  Not the other?
 
     MR. RHODES:  She’s going to -- well, again, we’ll put out her schedule.  But I believe she’s going to India and Indonesia and then peeling off.
 
     UNDER SECRETARY BURNS:  Just very briefly, I was in India a few days ago -- I think it was the fourth trip there in a little more than a year.  This was to help prepare for the President’s visit.  And certainly the mood -- I mean, Indians can speak for themselves, obviously -- but the mood I found was positive, an air of anticipation, a lot of interest in how we can work together to translate all the progress of recent years into sort of further tangible benefits that both Indians and Americans can see.
 
     Q    I have an India question, but I was wondering if I could follow up on something from yesterday -- is that all right?
 
     MR. GIBBS:  Let’s do India first.  Let me get India done because I don't want to keep Bill here for that.
 
     Q    Sure. There have been, as there always will be, critics who’ve tried to make a big deal out of the fact that the President has booked the entire hotel.  And I was wondering if you’d speak to the necessity of that, and also the benefits derived from it?
 
     MR. RHODES:  Well, all I’d say about that is we take our guidance from the Secret Service and our security personnel as to what precautions are necessary to ensure that the President has a safe visit.  So, again, that decision is made -- is not made by us.  It’s made by the professionals who know what the requirements are.  So we follow their guidance.
 
     Q    And there’s probably an added risk to this site as a former --
 
     MR. RHODES:  Well, no, I think we always just have -- again, the Secret Service makes their own evaluations.  Again, I would underscore we think that India is a strong and safe and resilient country that is -- with effective counterterrorism.  But again, with respect to our own security requirements, we’re just guided by Service on that and so I wouldn’t be in a position to comment on it.
 
     Q    Just to follow Steven’s question on Kashmir.  Will the President be making some public remarks explaining the U.S. position on Kashmir?  And will he also be addressing -- explaining the U.S. relationship with Pakistan publicly?
 
     MR. RHODES:  I wouldn’t -- I don't want to get into prefacing with precision what his comments are, in part because he’ll be answering a lot of questions there in the town hall and press conference and we haven’t -- we’re still working through his remarks on certain things.
 
     So I will say that he’ll -- I think to echo two points that have been made, on the first question, I think we do support efforts by India and Pakistan to pursue a dialogue with one another, so we'll express support for that, as we always do.
 
     And on the second, I think the point I made is an important one, which is that we believe that a positive relationship between the U.S. and Pakistan, a deepening relationship between the U.S. and Pakistan, does not in any way, shape or form have to be seen through a zero-sum lens as it relates to India, and that we want to have a -- we want to take the U.S.-Indian relationship to a new level on this visit.  We want to expand cooperation on economic issues, but also on security cooperation, counterterrorism and military ties, cooperation on issues like clean energy and, again, as the world’s two largest democracies, working together both bilaterally and also around the world.
 
     And, again, we believe that both of these goals can be -- I mean, our central message -- and it’s a message, really, to the region -- is that both of these relationships can be advanced and deepened at the same time on a parallel track, and that that does not in any way demonstrate a preference for one relationship over the other, that these things can be mutually reinforcing, in fact.   
 
     Q    Can we handle a couple of Indonesia questions?
 
     MR. GIBBS:  We’ll do Indonesia I believe tomorrow.
 
     Q    You are concentrating on Southeast Asia.  Yesterday a former Secretary of State in a private meeting told me that the U.S. is looking for a major strategic partnership not only in Southeast Asia but Indian Ocean and in Central Asia.  Would you like to expand on that?
 
     MR. RHODES:  I'll make one comment, but Bill may want to comment on this.
 
     We have -- as a part of -- I briefly mentioned Asia.  I mean, we’ve put a whole host of attention, from the level of the President on down, to Asia, broadly speaking.  And I think what you see is you see a U.S.-India partnership that’s developed and gone to a new level.  You’ve seen -- again, the question came before on Russia -- a reset of relationships with Russia.  You’ve seen consultations at a high level with the Chinese that haven’t taken place before in terms of trying to have a cooperative and comprehensive relationship.
 
     But in addition to that, we’ve really reengaged the architecture of the region.  So the President has personally met twice with the ASEAN countries, and we see Southeast Asia as a critical region of the world as it relates to a number of security issues, from terrorism to piracy to others, and also, again, a hugely up and coming economic region of the world as well.  So our engagement with ASEAN has been a key part of our Asia strategy.  
 
However, I think you’re right -- I think as we look to the Indian Ocean as well, this is a hugely important part of the world to us and the kind of cooperation we have with India in that part of the world is an important cornerstone of that Asia strategy, just as ASEAN is, just as the U.S.-India partnership is, and then just as our core alliances, for instance, in Korea and Japan are.  
 
But Bill may want to comment.
 
     Q    And Central Asia?
 
     MR. RHODES:  In Central Asia, we, of course, have very close partnerships with some of those governments.  For instance, the President met with the President of Kyrgyzstan.  We’ve played a role in supporting their stability and their democracy in the aftermath of the instability they’ve had there recently.
 
     Our northern distribution network as it relates to moving equipment and material into Afghanistan depends upon some close cooperation that we have with Central Asian countries.  You saw a number of Central Asian countries, for instance, come to the Nuclear Security Summit, and they’re fundamental to our efforts to lock down and secure vulnerable materials in four years.
 
     So I think we’ve had on a bilateral basis a very close collaboration with a number of Central Asian countries.
 
     Q    The question was that U.S.-India bilateral partnership -- strategic partnership, will it also have a component of which you will focus on Indian Ocean and Central Asia?
 
     UNDER SECRETARY BURNS:  I think it’s a mark of the significance that we attach to India’s rise in East Asia that the first stop in a presidential visit to Asia is in India.  We began a regular dialogue with India about a year ago about East Asian issues, which has been very constructive and I think useful for both of us.  We certainly look for ways in which we can talk about the global common -- how our common stake in ensuring the security of sea and air routes that run through the Indian Ocean and elsewhere in Asia and the Pacific.  We have a lot in common in terms of our concerns and interests in Central Asia.
 
     So I think in each of the areas that you mentioned, there are a lot of opportunities for us not only to have a serious dialogue but to look for ways in which we can cooperate.
 
     Q    A follow-up on that?
 
     MR. GIBBS:  Yes.
 
     Q    Do you want more involvement from India in Afghanistan? And how do you see Indian and Pakistani interests balanced in Afghanistan?
 
     UNDER SECRETARY BURNS:  Well, we’ve long made clear our support for India’s contributions in Afghanistan.  India has contributed something like $1.3 billion worth of development assistance in agriculture and other areas over the last eight or nine years in Afghanistan -- at some cost, because there have been Indian workers who have lost their lives during that period. So we not only recognize but support the kind of role that India has been playing in supporting development in Afghanistan.
 
     Q    So the President is visiting India, Indonesia, Japan, South Korea.  The Indian Prime Minister this week is visiting Japan, Malaysia.  And the Secretary of State also is visiting a number of Southeast Asian countries.  And if you connect all these dots, there’s one big red dot missing. (Laughter.)  Should we read something into this?
 
     MR. RHODES:  No, I'd just say a couple things.  First of all we were pleased to have a presidential trip to -- I’m just going to presume you’re talking about China and not another country that we’re not visiting.  We were pleased to visit China last year and we continue to have close cooperation with the Chinese on some issues, even as we disagree on others.
 
     I also expect -- and we’ll get into the broader schedule tomorrow -- that the President will meet with President Hu in the course of this trip because China, of course, is attending the G20.  
 
I will say that, as Bill said, it’s not coincidence that India is the first stop on a major trip to Asia. Asia is a focus, as I’ve said.  And we see India as a cornerstone of our engagement with this hugely important region of the world.  And we believe that we have shared interests with India on a broad range of issues, but we also have shared values, because we’re two democracies.  And the kind of relationship that we have as the world’s two largest democracies is relevant to our ability to have a deep, bilateral partnership, but also to work together in the region and around the world.
 
     So I think that building from that, too, each of the countries we’re visiting are democracies and close friends with the United States -- Indonesia, an emerging democracy, and then Japan and South Korea, of course, being longstanding, close allies of the United States. And I think it speaks to the strength of democracy in Asia.  
 
To those who question whether democracy is proving that it can advance and that it can foster economic development, India sets a powerful example, as does Indonesia, as countries that have robust economic growth while also having very dynamic democracies, just as South Korea and Japan also have had growth over previous decades while strengthening their own democracies.
 
     So I’d make that point.  And then I’d just add that, again, we have a very -- we’ve made a very concerted effort -- I think if you look at the travel by Secretary Clinton and the President, and the kinds of consultations we’ve had at the head of state and secretary level with these countries in Asia, and with ASEAN and with APEC, where we’ll be stopping on this trip, and with a number of other Asian groupings -- we’re sending a very clear message the United States sees itself as an Asian power, see ourselves as a Pacific power, and intend to significantly increase and deepen our engagement in the region.  And, again, India is fundamental to that effort.
 
     Q    I want to take Secretary Burns back to the nuclear question.  By signing the CSC, has India addressed all U.S. concerns, or do problems remain in some fashion or the other?
 
     UNDER SECRETARY BURNS:  Well, I don’t think -- as I said, we consider the signing earlier today of the Convention on Supplemental Compensation to be a positive step.  Our companies are engaged in discussions right now.  We’re engaged in discussions.  I think we’re making progress.  What we’re interested in is simply to ensure that there’s a level playing field for our companies.
 
     Q    (inaudible) --
 
     UNDER SECRETARY BURNS:  Well, the Indian government -- that that’s what it seeks, too.  And so, we’re working on it, is what I would say.  
 
     Q    Robert, I was reading a report by the Center for New American Security on U.S.-India ties.  They say here that many --
 
     MR. GIBBS:  A little nighttime reading, Sheryl?
 
     Q    My nighttime reading, yes -- prominent Indians and Americans now fear that the rapid expansion of ties has stalled. And one thing they recommend is that the United States work with India to secure for India a permanent seat on the U.N. Security Council.  And I wonder, your reaction to the characterization that the expansion of ties has stalled and where do we stand on the Security Council’s seat?
 
     MR. RHODES:  I’ll make a couple of comments, and then Bill may want to weigh in on the Security Council as well.  
 
First of all, I think that the notion that it has stalled is just not in line with the facts that are apparent both in terms of atmospherics and in terms of substance.  On the atmospherics, as Bill laid out, Prime Minister Singh was the first state visit that we hosted here.  This will be the longest trip that the President will have taken as President to a foreign country.  And it speaks to the depth of his partnership with Prime Minister Singh on a personal basis, but also the partnership between our countries.
 
     On a substantive basis, if you look at, again, the breadth of the issues -- and as we get to India, I think we’ll be able to finalize some of the discussions we’re having around some of these issues, go through in detail the outcomes of the President’s meeting with Prime Minister Singh on the trip.  
 
     But we are moving forward on a whole host of energy projects together related to clean energy and climate change.  We are advancing new cooperation on agricultural development.  As Bill said, we’ve continued to expand our military-to-military cooperation in terms of exercise and in terms of how we communicate with one another.  
 
We have deepened our information-sharing on counterterrorism, for instance, exemplified by the access we’ve provided the Indians to David Headley.  We have partnered with the Indians -- continue to partner with them in Afghanistan.  And so I -- and we’ve actually upgraded the G20 to the premier economic forum in the world, in part to give countries like India a greater voice.
 
     So I think across the board, we’re moving forward with India on a whole range of issues on a very substantive basis that speaks to the fact that -- as Bill said, if you look at the previous two administrations, we had some major irritants related to nuclear issues.  I think the civilian nuclear deal helped move beyond that. But now I think what we’re trying to do is use the opportunity afforded by that to lift this relationship up to a new level where India is really a strategic partner for the United States in the region and in the world.
 
     And the Security Council, the first thing I’d say is simply that -- first of all, we’ve, through the G20, through our focus on the G20 and some other bodies, already sought to give India a greater voice in global architecture -- for instance, saying that the G8 can’t deal with global economic issues as effectively as the G20.  The reasoning behind that was because you need India at the table on those discussions, just as you need China and other emerging economies.
 
     On the Security Council, they are going to be a member, first of all, in terms of the next cycle, so we’ll have an immediate opportunity to cooperate with them on the Security Council.  
 
But I’ll let Bill speak to the expansion question.
 
     UNDER SECRETARY BURNS: Sure.  No, the only thing I would say is, first, the United States recognizes the significance of looking at ways to adapt international architecture, including the U.N. Security Council, to reflect the realities of the 21st century.  We want to approach that challenge in a way that ensures the effectiveness -- and hopefully strengthens the effectiveness -- of the Security Council.  Given India’s rise and its significance, we believe that India will be a central part of any consideration of a reformed Security Council.
 
     Q    Can you just maybe explain a little more about why not just do it?  What is the thinking behind not moving ahead quickly with this?
 
     UNDER SECRETARY BURNS:  That's about as far as I’m going today.  (Laughter.)
 
     Q    There is a downside, though, in your view?  You just don't want to articulate what it is?
 
     MR. RHODES:  It’s a very complicated issue that involves international architecture in many countries.  But we’ll continue to work -- to talk this through as we move forward on the trip.
 
     Q    Robert, can you speak the timing of trip just a little bit?  Obviously, the President has been trying to schedule this trip for a number of months.  But does the timing have nothing at all to do with the election?
 
     MR. GIBBS:  No, the timing has all to do with the G20 and APEC.  Look, obviously, this is -- as we will soon learn, this is a long way to travel and there’s a lot of space in between individual stops.  It was important in doing a trip of this magnitude and in having the G20 in this region of the world to highlight the important relationships that this President believes are going to be crucially important not simply to this administration -- you heard Bill talk about that from a bipartisan perspective, our relationship with India has always been important to both Democratic and Republican Presidents.
 
     But certainly, this is a relationship that is important to this country and will be important to this country for many years to come.  So it is -- it’s timed around those economic meetings of which are very important.
 
     Q    I see you already announced the meeting with the Chinese President.  Can you also confirm the meetings with the Russian President?
 
     MR. GIBBS:  Do you know something that you’re not telling us?
 
     Q    I don't know, maybe.  (Laughter.)
 
     MR. RHODES:  We’ll give the full schedule tomorrow with Jeff Bader and me because we’re still finalizing.
 
     Q    And is the Hu meeting a bilat?
 
     MR. RHODES:  Yes, we’ll include that in the --
 
     MR. GIBBS:  We’ll go through that tomorrow.
 
     MR. RHODES:  -- we’ll include that in the briefing tomorrow.  
Q    There seems to be a narrative within China that -- and I know the Secretary of State is now making a stop in China, but nonetheless, there seems to be a narrative within China that the President’s and the Secretary of State’s visit are almost encircling them, and that -- leaning hard on this idea of the U.S. trying to set up some kind of counterbalance.  Can you talk about that more?
 
     MR. RHODES:  I think -- we’ve always had a very clear theory of our approach, which is that as it relates to China, that we want to develop a kind of regular order of high-level consultations that include the strategic dialogues that Secretary Geithner and Secretary Clinton lead with their Chinese counterparts; that include the kinds of trips that we just saw Tom Donilon and Larry Summers take to China; but also include -- I think if you stack up the kinds of interactions that President Obama has had with President Hu just over the course of the last two years, it’s unprecedented in terms of the number of meetings and contacts that they’ve had.
 
     And our approach has always basically been that we need to cooperate with China on a range of issues. If you’re going to deal with the global economy and global economic growth, if you’re going to deal with security concerns in the region, if you’re going to deal with energy and climate, China has got to be a partner on those issues.
 
     However, that even as we cooperate on some issues, we’re going to disagree, and that we’re going to disagree directly with one another, but that those disagreements need not and should not derail cooperation on other issues.  So that you can have a relationship that is mature enough and healthy enough that we can cooperate on some things, disagree on others.
 
     Related to that is we don’t feel like there needs to be a choice between a cooperative U.S.-China relationship and these broader relationships that we have in Asia; that in fact I think, as an Asian power and a Pacific power, it’s in the interests of the region for the U.S. to have a cooperative relationship with China on some of these issues, but it’s similarly in the interests of the region for us to, again, be very engaged with ASEAN, to be deepening our partnership with India, and to firm up our alliances with Korea and Japan.
 
     And I think if we look at our record over the last few years, one of the things we’re most proud of is putting those alliances with Korea and Japan on a firmer footing, again, getting at the table in terms of ASEAN, and then dealing with the partnership in India that has such enormous potential.
 
     And frankly, it is a relationship that, because it’s between two democracies, has a kind of qualitative potential that is unique.  The U.S. and India, as the world’s two largest democracies, share interests but we also share values.  And that opens the doors to cooperation bilaterally but also cooperation in the region and around the world.
 
  ** MR. GIBBS:  I want to do one thing before I go.  During this press briefing, the Department of Justice has made an announcement about a Homeland Security arrest.  This is another important example of work by the FBI, by all levels of our law enforcement, and by our national security team to keep this country safe.
 
     Those groups have been on top of this case from the beginning, and at no point was the public in any danger.  DOJ and FBI will be doing more on this -- there’s a statement out and they’ll be doing more on this later today.
 
     Q    When did the President know about it?
 
     MR. GIBBS:  Let me check on that.  I don’t know the answer.
 
     Q    Do you know whether he’s been briefed during the course of this -- until the time of the arrest this morning?
 
     MR. GIBBS:  He was aware of this prior to the arrest.
 
     Q    Robert, is there any sense that there were targets other than the Metro?
 
     MR. GIBBS:  I'm going to leave those questions, based on the fact that an arrest has been made, to Justice and FBI. **
 
     Tommy, do you have one follow-up from yesterday?  And then I'll --
 
     Q    Yes, I hate to follow that, but I wanted to ask you about Leader McConnell’s comments.  I understand the necessity or the desire to allow the Republicans a window of time in which to realize that they have to roll up their sleeves and work together.  I think what I wanted to ask you yesterday is how long a window is that going to be?  And what’s the plan, what’s the strategy, if that window expires and they’re still not working --
 
     MR. GIBBS:  Well, look, Tommy, I don’t know how long that window is.  I don't know --
 
     Q    Shorter than it was the last two years?
 
     MR. GIBBS:  Look, I will reiterate what I said yesterday and what I’ve said even before Senator McConnell made what I thought was his unfortunate comment, and that is, regardless of the outcome of Tuesday’s election, the American people are going to want Congress and the White House and the two political parties to be able to sit down in the same room, talk coherently about the issues that face the American people, and work constructively to solve them.
 
     Look, if anybody takes a different message from this election, I think they will find themselves on the wrong end of voters two years from now, as well as when they take actions that are different than working together on these issues.  I know it’s the President’s hope -- you heard him enunciate in that interview -- that we can work together to solve our problems; that we can work together to put our economy on an even stronger footing; and that we can work together to improve our educational system and to improve our foreign policy.  All of those things the President wanted to do in running for President and hopes to do even -- hoped to do here and certainly hopes to do after the election.
 
     Q    To follow up on the arrest, you said “arrests” but it’s one?
 
     MR. GIBBS:  It’s an arrest, I’m sorry.
 
     Q    Okay.  And also do you know if the suspect was dealing with an undercover FBI agent or --
 
     MR. GIBBS:  Let me -- again, those are questions better addressed and answered, because of the pending investigation, by law enforcement officials.
 
     Q    Singular, correct?
 
     MR. GIBBS:  Yes, arrest.
 
     Thank you.

END
2:09 P.M. EDT

Joint Statement of the 2ND U.S.- ASEAN Leaders Meeting

New York, NY

1. We, the heads of State/Government of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People’s Democratic Republic, Malaysia, the Union of Myanmar, the Republic of Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam, the Member States of the Association of Southeast Asian Nations (ASEAN), and the United States (U.S.), held our Second ASEAN-U.S. Leaders’ Meeting on September 24 in New York.  The Meeting was co-chaired by H.E. Nguyen Minh Triet, President of Viet Nam, in his capacity as Chairman of ASEAN, and H. E. Barack Obama, President of the United States of America.  The Secretary-General of ASEAN was also in attendance. 

2. ASEAN appreciated the United States’ sustained engagement at the highest level with ASEAN Member States.  We reaffirmed that U.S. participation in the annual Post Ministerial Conference (PMC) meetings, the ASEAN Regional Forum (ARF), the upcoming ASEAN Defense Ministers Meeting Plus (ADMM Plus) process, sustained engagement through the U.S.-ASEAN Trade and Investment Framework Arrangement (TIFA), U.S. accession to the Treaty of Amity and Cooperation in Southeast Asia (TAC), and the establishment of a permanent Mission to ASEAN have all demonstrated the United States' firm commitment to continue to strengthen comprehensive relations with ASEAN.  We welcomed the appointment of the first resident U.S. Ambassador to ASEAN in Jakarta. 

3. We recognized these elements of greater engagement between ASEAN and the United States.  We agreed to further deepen our current partnership in order to provide the framework for continued growth in ASEAN-U.S. relations and to expand the significant contributions our cooperation already has made to peace, stability and prosperity in Southeast Asia and the broader East Asia region. We welcomed the idea to elevate our partnership to a strategic level and will make this a primary focus area of the ASEAN-U.S.  Eminent Persons Group and will task it to develop concrete and practical recommendations to that end by 2011.  We also looked forward to the adoption of the new five-year Plan of Action for 2011-2015.

4. ASEAN Leaders welcomed the United States’ support for ASEAN Community and Connectivity.  We will strengthen cooperation with the United States in addressing issues related to human rights, trade and investment, energy efficiency, agriculture, educational, cultural and people-to-people exchanges, interfaith dialogue, science and technology, disaster risk management and emergency response, health and pandemic diseases, environment, biodiversity conservation, climate change, combating illicit trafficking in persons, arms and drugs and other forms of transnational crimes.  We resolved to deepen cooperation against international terrorism under the framework of the ASEAN-U.S. Joint Declaration for Cooperation to Combat International Terrorism.

5. We discussed the growing efforts to promote regional cooperation in East Asia and reaffirmed the importance of ASEAN centrality in the EAS process.  ASEAN welcomed the U.S. President’s intention to participate in the East Asia Summit (EAS) beginning in 2011 and Secretary Clinton’s attendance as a guest of the chair at the Fifth EAS meeting on October 30, 2010 in Ha Noi.  ASEAN and the United States expect to continue to exchange views with all stakeholders to ensure an open and inclusive approach to regional cooperation in the future.  

6. We reviewed our discussion from our first historic meeting in Singapore last year and noted with satisfaction the substantial accomplishments of the U.S.-ASEAN Enhanced Partnership.  We reaffirmed the importance of our common goals, and tasked our officials to continue to pursue programs and activities to achieve the Millennium Development Goals, enhance regional integration, and support the realization of an ASEAN Community by 2015.

7. We committed to further enhance cooperation on sustainable agriculture development and food security through the L’Aquila Food Security Initiative, in particular to promote investment in country led-plans, greater efficiency of production and distribution, capacity building, sharing of experience and best practices, research and development as well as infrastructure development.  In particular, we pledged to strengthen food security through support for the ASEAN Integrated Food Security (AIFS) Framework and Strategic Plan of Action on Food Security (SPA-FS) and through the promotion of agricultural and fisheries trade. 

8. We acknowledged the continued relationship on technical assistance and capacity-building for intellectual property protection and enforcement matters through a Letter of Arrangement between the ASEAN Secretariat and the U.S. Patent and Trademark Office, in place since 2004 and recently extended for another five years, and commended the results from previous training under this arrangement. 

9. Building on our decision at the First ASEAN-U.S. Leaders Meeting, further consultations between relevant U.S. Cabinet Secretaries and their ASEAN counterparts should be explored and encouraged to develop areas of mutual cooperation.

10. ASEAN and the United States have learned valuable lessons from the crises of 1997 and 2008 and resolved to contribute to the reforms in the global financial architecture to safeguard the global economy from future crises, and committed to establish a durable foundation for future growth that is more balanced in its sources of demand and provides for development in line with the G-20 Framework for Strong, Sustainable, and Balanced Growth.  In this respect, the United States acknowledged ASEAN’s constructive role in multilateral fora, including its contributions to the G-20 process.

11. We welcomed the rebound in trade between ASEAN and the United States and remained committed to further enhance economic cooperation in order to sustain the recovery and create jobs and additional economic opportunities in each of our countries.  Two-way ASEAN-U.S. trade in goods reached $84 billion in the first six months of this year, an increase of 28-percent over last year.  In addition, the stock of U.S. foreign direct investment in ASEAN totaled $153 billion in 2008 and the stock of ASEAN foreign direct investment in the United States was $13.5 billion.

12. We supported the  intensification of efforts to advance new initiatives identified by all Parties under the ASEAN-U.S. Trade and Investment Framework Arrangement (ASEAN-U.S. TIFA), including completion of a trade facilitation agreement, continued development of trade finance and trade and environment dialogues, and continued cooperation on standards under the ASEAN Consultative Committee on Standards and Quality (ACCSQ).  We welcomed that our Finance Ministers have met, for the first time, to discuss issues of mutual concern in the global economy, and regional developments. 

13. We recognized that corruption and illicit trade undermine development, investment, tax revenues and legitimate business in the region, creating insecurity in our communities and long-term barriers to growth.  For this reason, we underscored the importance of ratification and full implementation of the UN Convention against Corruption. We also recognized the need to deepen our cooperation, especially in regard to discussions on achieving more durable and balanced global growth, increasing capacity building activities in the key areas such as combating corruption and illicit trade, preventing bribery, enhancing transparency in both public and private sectors, denying safe haven, extradition and asset recovery.  We also welcomed the G-20’s efforts to advance the fight against corruption. 

14. We welcomed continued progress on regional trade and investment liberalization and facilitation, including through the Asia-Pacific Economic Cooperation (APEC) process, as well as ongoing negotiations on the Trans-Pacific Partnership involving several members of ASEAN as well as the United States.

15. We recognized that climate change is a common concern of humankind.  In line with the Bali Roadmap, we reaffirmed that all countries should protect the climate system for the benefit of present and future generations in accordance with the principles and provisions of the UNFCCC, including the principle of common but differentiated responsibilities and respective capabilities.  We agreed to strengthen our cooperation on addressing the climate change issues including on adaptation, finance, technology transfer, and capacity building.  We recognized the important contribution of the Copenhagen Accord and are committed to work together towards a successful outcome of the 2010 United Nations Climate Change Conference in Cancun, Mexico.

16. We appreciated the United States’ support for the ASEAN Intergovernmental Commission on Human Rights and the offer to support the Commission on the Promotion and Protection of the Rights of Women and Children through capacity building programs.  We looked forward to the outcomes from the AICHR study tours that are to take place in the United States later this year and the visit of the ASEAN Commission on Women and Children planned next year. 

17. ASEAN Leaders welcomed the continued U.S. engagement with the Government of Myanmar.  We expressed our hope that ASEAN and U.S. engagement encourages Myanmar to undertake political and economic reforms to facilitate national reconciliation.  We welcomed the ASEAN Chair’s Statement of 17 August 2010.  We reiterated our call from the November 2009 Leaders Joint Statement that the November 2010 general elections in Myanmar must be conducted in a free, fair, inclusive and transparent manner in order to be credible for the international community.  We emphasized the need for Myanmar to continue to work together with ASEAN and the United Nations in the process of national reconciliation.

18. We reaffirmed the importance of regional peace and stability, maritime security, unimpeded commerce, and freedom of navigation, in accordance with relevant universally agreed principles of international law, including the United Nations Convention on the Law of the Sea (UNCLOS) and other international maritime law, and the peaceful settlement of disputes. 

19. ASEAN Leaders welcomed the signing of the Treaty between the United States of America and the Russian Federation on Measures for the Further Reduction and Limitation of Strategic Offensive Arms on 8 April 2010 in Prague.  ASEAN and the United States consider this an important step towards a world without nuclear weapons.  In addition, ASEAN and the United States reaffirmed that the establishment of the South-East Asia Nuclear Weapons Free Zone (SEANWFZ) contributes towards global nuclear disarmament, nuclear non-proliferation, regional peace and stability.  We encouraged Nuclear Weapon States and State Parties to the SEANWFZ to conduct consultations, in accordance with the objectives and principles of the Treaty.  In this regard, ASEAN welcomed the U.S. announcement at the 2010 Review Conference of the Nuclear Non-Proliferation Treaty that it is prepared to consult and resolve issues that would allow the United States to accede to the SEANWFZ Protocol.  ASEAN congratulated the United States on the successful outcomes of the April 2010 Nuclear Security Summit, in which several ASEAN countries participated, and will work together implement the pledges and commitments they made there, and to engage others in the global effort to prevent nuclear terrorism.  

20. We reiterated our commitment to prevent the use and spread of weapons of mass destruction (WMD), in an effort to build a world free of their threats.  We congratulated the Philippines for its able and effective Presidency of the May 2010 Review Conference of the Nuclear Non-Proliferation Treaty (NPT), and stressed the necessity for all NPT Parties to continue to fulfill our respective obligation under the NPT.  We reiterated the importance of a balanced, full and non-selective application and implementation of the Treaty’s three pillars - nuclear disarmament, nuclear non-proliferation, and peaceful uses of nuclear energy.

21. We reaffirmed the importance of continuing to implement UN Security Council Resolutions 1929 on Iran as well as 1718 and 1874 on Democratic Peoples' Republic of Korea (DPRK).  We called on both countries and the international community to implement their obligations  under the aforementioned resolutions.  We further called on DPRK to implement its commitments under the September 19, 2005 Joint Statement of the Six Party Talks to abandon all nuclear weapons and existing nuclear programs and return, at an early date, to the NPT and to IAEA safeguards.  We also urged the DPRK to comply fully with its obligations in accordance with the relevant United Nations Security Council resolutions.

22. The Leaders of ASEAN and the United States welcomed the ADMM-Plus as a framework that could help strengthen the existing cooperation on regional defense and security between ASEAN and its partners in accordance with ADMM’s open, flexible and outward-looking orientation.  ASEAN welcomed the planned participation of the Secretary of Defense in the inaugural meeting of the ADMM-Plus in October.

23. We welcomed the continuation of the U.S.-Lower Mekong Initiative to promote cooperation in the areas of environment, health, education and infrastructure development.  We supported the continued convening of the ministerial meetings between the United States and Lower Mekong Basin countries.  We encouraged U.S. engagement and support to Brunei Indonesia Malaysia Philippines-East Asia Growth Area (BIMP-EAGA), Indonesia Malaysia Thailand-Growth Triangle (IMT-GT), Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), Cambodia Laos Myanmar Viet Nam (CLMV), Heart of Borneo, and other sub-regional cooperation frameworks.

24. We recognized the importance of cooperation among ASEAN educational and research institutions and encouraged more such academic linkages.  In this regard, we noted with appreciation the ERIA-Harvard University Cooperation in academic exchanges and research collaboration, particularly their joint-sponsored Symposium in Ha Noi on 26 October 2010 entitled “Evolving ASEAN Society and Establishing Sustainable Social Security Net.”

25. We stressed the importance of sustaining dialogue at the highest level between the two sides and committed to hold our third meeting next year in conjunction with the 2011 East Asia Summit.

Remarks by the President in Discussion on the Economy in Fairfax, Virginia

Home of Armstrong-Nicholas Family, Fairfax, Virginia

1:55 P.M. EDT

      THE PRESIDENT:  I want to say a special thanks to John and Nicole.  Trevor and Olivia are back there.

     MS. ARMSTRONG:  They’re turning the A/C unit off.

     THE PRESIDENT:  Yes, exactly.  That’s all right.  But I'm so grateful for their hospitality.  They are just a wonderful family, and for them to open up their backyard for us is just terrific.  So this is really -- oh, I’ve got a mic.  So thank you to the entire family for opening up -- and thanks to all of you for taking the time to be here.  Because I want to -- I was telling John and Nicole that a lot of times, when you're in Washington, you're busy, you’ve got a lot of stuff to do, and you're in a bubble when you're President.  And sometimes you just don't have the opportunity to have the kinds of interactions that I used to have even when I was a senator.

And so these kinds of formats are terrific for me.  And my hope is, is that despite all these people who are here with cameras and microphones and all that stuff, that people won't be shy -- because the whole point of this is for me to hear directly from you and to answer your questions, hear about your concerns, hear about your hopes, and hopefully that will translate itself into some of the things that we're doing at the White House.

     I obviously want to make some introductions that -- I think all of you know that you’ve got some members of Congress who are working very hard here in Northern Virginia, and I want to acknowledge them.  First of all, Congressman Jim Moran, who’s been doing great work for a very long time.  (Applause.)  Congressman Gerry Connolly has been doing terrific work here locally and now on Capitol Hill.  (Applause.)  We've got Sharon Bulova, who is the chairwoman of the Fairfax County Board of Commissioners.  (Applause.)

And we've also got a couple of small business owners, because one of the things I want to talk about is how we can grow the economy and get people back to work, and so who better to hear from than a couple of small business owners.  Don't worry, I'm not going to call on you, but I'm just glad you're here.

First of all, we've got Cherrelle Hurt, who is the owner of As We Grow Learning Center.  Hey, Cherrelle.  Thanks for being here.  (Applause.)  And Larry Poltavtsev -- did I say that right, Larry? -- who is the CEO of Target Labs, Inc.  (Applause.)  And so we're glad that you guys could join us.

Now, I'm only going to say a few things at the top.  And I want to talk a little bit about why I decided to run for President in the first place, back in 2007-2008.

Having served as a state senator, having then served as a United States senator, I had had a chance to see how economic policies were having an effect on working-class families and middle-class families for a long time.  And my wife and I, we came out of hardworking families who didn’t have a lot, but because the economy was growing, because there was an emphasis on what was good for the middle class, we were able to get a great education, we were able to get scholarships.  Michelle’s dad worked as a blue-collar worker, but just on that one salary he was able to provide for his family and make sure that they always had enough and the kids had opportunities.

And what it seemed like was, for about a decade there, middle-class families were losing more and more ground.  And some of that had to do with changes in the global economy and greater competition from around the world.  But a lot of it had to do with the policies that had been put in place, which really boiled down to cutting taxes, especially for millionaires and billionaires; cutting regulations -- that made consumers and workers more vulnerable; failing to make investments that were so critical in growing our middle class over the long term.

And so when I ran for President, my goal was to make sure that we get a set of economic policies in place that would lay the foundation for long-term growth in the 21st century so that the 21st century would be an American Century, just like the 20th century had been.

And that's what we've tried to do over the last 19 months, in the midst of the worst financial crisis that we've seen since the Great Depression.  The first thing we had to do was just stop the bleeding, stabilize the financial system and make sure we didn’t trip into a Great Depression.  And we have done that.

So when I was sworn in on that very cold day in January -- some of you may remember -- we lost 750,000 jobs in that month alone.  Now we've seen eight consecutive months of private sector job growth because of the policies we’ve put in place.

     We were on the verge of financial meltdown.  Anybody who was involved in business at that time remembers banks were not lending at all.  You couldn’t even get an auto loan or a consumer loan.  And now the financial systems have stabilized, although they’re not completely where we need them to be.  The economy was shrinking at a pace of -- an astounding pace of about 6 percent annually.  And now the economy has been growing.

     So we stopped the bleeding, stabilized the economy, but the fact of the matter is, is that the pace of improvement has not been where it needs to be.  And the hole that we had dug ourselves in was enormous.  I mean, we lost 4 million jobs in the last six months of 2008, when I was still running -- we lost 4 million jobs.  And all told, we’ve lost 8 million jobs.  And so even though we’ve grown jobs this year, we haven’t been able to yet make up for those 8 million jobs that had been lost.  And that’s an enormous challenge.

     Now, the second part of the challenge, though, is to make sure that even as we’re digging ourselves out of this hole, we start making some better decisions so that, long term, we don’t find ourselves in the circumstance again, and we start creating the kind of economy that’s working for middle-class families.

     So a couple of things that we did on that front:  We cut taxes for middle-class families because we understand that people’s incomes and wages have not gone up, have not kept pace with increases in health care, increases in college, and so forth.

     The second thing that we felt was very important was to start creating some rules of the road again.  So in financial services, for example, we passed a financial regulatory bill that makes sure that we’re not going to have taxpayer bailouts, makes sure that banks have to operate a little bit more responsibly and take less risks with the money that they’re investing.  And we also made sure that consumers are treated more fairly -- because part of what happened in this financial crisis was people were getting mortgages that they didn't understand.  Suddenly, the bottom fell out of the housing market and banks found themselves in a crisis situation.

     So what we’ve said is let’s make sure that consumers know exactly the kinds of mortgages they're getting.  Let’s make sure that they can’t be steered into these balloon-type payments where there’s no chance that over the long term they're going to be able to make their payments.

     Let’s make sure that credit card companies have to notify you if they're going to increase your interest rates.  And let’s make sure that they can’t increase your interest rates on your existing balances, only on future balances, so that they're not tricking you into suddenly paying exorbitant fees and putting you in the hole over the long term.  (Applause.)

     Gerry likes that one.  (Laughter.)

So we set up a bunch of rules both in the financial services area, in the housing sector and in health care.  And I know that a lot of people here heard a lot about the health care bill.  One of the most important things that that was about was making sure that insurance companies treated you fairly.  So if you’ve got health insurance, companies are not going to be able to drop you from coverage when you get sick, which is part of what had been happening.  They couldn’t deny you insurance because of a preexisting condition or if your child had a preexisting condition, which obviously makes families enormously vulnerable.

     So a set of rules of the road for how companies interact with consumers, how they interact with workers.

     And then the final thing that we’ve tried to do to lay this foundation for long-term economic growth is to put our investments in those things that are really going to make us more competitive over the long term.  So we have made the largest investment in research and development, in basic research and science, in our history, because that's going to determine whether we can compete with China and India and Germany over the long term.  Are we inventing stuff here that we can then export overseas?

     We’re making investments in our infrastructure, because we can’t have a second-class infrastructure and expect to have a first-class economy.  Just an interesting statistic over the last decade:  China spends about 9 percent of its gross domestic product on infrastructure.  Europe spends about 5 percent.  We’ve been spending 2 percent.  And that’s part of the reason why we no longer have the best airports, we no longer have the best rail systems, we don’t have the best broadband service.  South Korea has better broadband service and wireless service than we do.  And over time, that adds up.  It makes us less competitive.  So what we’ve said is we’ve got to make investments in infrastructure.

     A third area -- education.  A generation ago, we had the highest proportion of college graduates of any country in the world.  We now rank 11th or 12th in the proportion of college graduates.  Well, we can’t win in an information society, in a global, technologically wired economy, unless we’re winning that battle to make sure our kids can compete.

     So what we’ve said is we’re going to put more money into higher education and through K-12 -- but here’s the catch -- the money is only going to those communities that are serious about reforming their education system so they work well.  Because it’s -- education is not just a matter of putting more money into it. You also have to make sure that we’ve got the best teachers, that we’ve got accountability, that the way we’re designing our schools help our kids actually succeed over the long term, especially in areas of math and science, where we’re lagging even further behind than we were a generation ago.

     So those are the things that we’ve been trying to do over the last 19 months.  Now, as I said before, the economy is growing, but it’s not growing as fast as we would like.  So over the last week, I’ve put forward a few more things that I think can really make a difference.

     Number one, instead of giving tax breaks to companies that are investing overseas, which our tax code does right now, what I’ve said is let’s close those tax loopholes and let’s provide tax breaks to companies that are investing in research and development here in the United States.  That's a smart thing to do.  We want to incentivize businesses who actually are making profits right now to say, we should go ahead and take a chance, and let’s invest in that next new thing.

     Second is -- what I’ve proposed is, is that we allow companies to write off essentially their new investments early if they make those investments here in 2011, so essentially accelerating the depreciation that they can take on their taxes to encourage them to frontload making investments now.

     The third thing that we’ve proposed -- and this is actually pending right now in the Senate, the United States Senate, because Gerry and Jim have already voted on it, is a small business package that would eliminate capital gains taxes for small businesses, would help small businesses obtain loans.  It is a common-sense bill that traditionally would have garnered a lot of bipartisan support, but we’re in the political silly season right now so it’s been blocked up by the Senate Republicans for the last month and a half, two months.

Small businesses are still having trouble getting loans.  And what we want to do, even though we’ve already given them eight different tax breaks, is we want to say we’re going to give you just a little bit more incentive, because if we can get small businesses growing and investing and opening their doors and hiring new workers, that's probably going to be the area where we can make the most progress over the next year in terms of accelerating employees and reducing the unemployment rate.

     So these are all steps that we’re taking right now to try to move the economy forward.  Now, I have never been more confident about the future of our economy, if we stay on track and we deal with some of these longstanding problems that we hadn’t dealt with for decades.

If we make investments and improve our education system; if we make investments in research and development; if we make investments in things like clean energy so that we’ve got an energy policy that’s not just tied to importing oil from the Middle East but instead start figuring out how can we develop our homegrown industries; if we have a tax system that is fair and helps the middle class, and that also attends to our long-term deficit problems; if we regulate -- but not with a heavy hand -- just regulate enough to make sure that we don’t have a collapse of the financial system, and consumers aren’t taken advantage of, and health insurance companies are responsive to ordinary families -- if we do those things, there’s no reason why we can’t succeed.

     And I’ve travelled all around the world and I’ve looked at all the economic data.  If you had a choice of which country you’d want to be, you still want to be the United States of America.  We still have a huge competitive edge and we’ve got the best workers in the world.  And we’ve got the most dynamic economy in the world.  We’ve got the best universities, the best entrepreneurs in the world.

     But we’ve got to tackle these longstanding problems that have been getting in the way of progress, and we’ve got to do it now.  We can’t wait another 20 years or another 30 years because other countries are catching up.  That’s what we’ve been trying to do over the last two years.

     Now, some of these things, I got to admit, are hard. They cause great consternation.  When we tried to get some common-sense rules in the financial sector, for example, that means billions of dollars that were going to profits to some of the banks are not going to be going there because you’re getting a better deal on your credit card, and they’re not happy about it. So that ends up creating a lot of drama on Capitol Hill.  And it means that we’ve had some very contentious debates.

     But I just want to close by saying this.  Ultimately, when I get out of Washington and I start talking to families like yours, what I’m struck by is not how divided the country is, but I’m actually struck by how basically people have common values, common concerns and common hopes.  They want to be able to find a job that pays a decent wage; give their family -- and their children, in particular -- a bright future; be able to retire with some dignity and respect; not get bankrupt when they get sick.

And that cuts across region; it cuts across racial lines; it cuts across religious or ethnic lines.  People -- there’s a core set of American values that I think people across the country respond to.

     And what I want to do is make sure that the government is on the side of those values, of responsibility and hard work and thinking about future generations and not just thinking about the next election.  And I think we’ve made progress, but we’ve got more progress to make.

     So with that, I thank you all for being here.  And what I want to do is I just want to answer questions.  And I know folks in the sun are hot, so I’m going to stand in the sun to make sure that you know that I feel -- (laughter) -- I feel your pain, as they -- absolutely.  I wouldn’t mind having that hat, though.  (Laughter.)  That's helpful.  I should have thought ahead.

     All right, anybody want to -- John, go ahead.  Yes.  Here, hold on a second.  I’ll give you a mic, so -- oh, we’ve got one.

     Q    Mr. President, thank you very much for coming. We really appreciate it.  It’s a great opportunity.  I’m an engineer.  And you talked a lot about R&D and infrastructure and -- I love every dollar spent on that, by definition.  I’m also a paraplegic.  And I have a great interest in stem cell research and how it gets furthered.  So how do we get this issue to be a scientific issue instead of a political issue?

     THE PRESIDENT:  Well, John, as you know I have been a huge supporter of stem cell research for a very long time.  When I came into office, we said that what’s going to govern our decision-making here is sound science.

     There are legitimate ethical issues involved in all this -- the biotech industry, and those are going to continue as time goes on.  I mean, there are some very tricky questions.  And we’ve got to make sure that our values and our ethical standards are incorporated in everything we do.  But we’ve also got to make sure that we’re making decisions not based on ideology, but based on what the science is.

     Now, the executive order that I signed would say that we are not going to create embryos to destroy for scientific research.  We’re not going to do that.

     On the other hand, when you’ve got a whole bunch of embryos that were created because families were trying -- couples were trying to start a family, and through in-vitro fertilization, they're frozen in some canister somewhere, and are going to be discarded anyway, then it makes sense for us to take those who -- that are going to be destroyed and use them to advance our scientific knowledge to see if at some point we can start making huge progress on a whole set of issues.

Obviously, spinal cord injuries are an example, but Parkinson’s disease, Alzheimer’s disease, diabetes, juvenile diabetes.  There’s not a single family here who has not in some way been touched by a disease that could end up benefiting from the research that’s done on stem cells.

     Now, recently a District Court judge said that not only -- well, essentially said that our executive order he felt went too far beyond what the guidelines that Congress had provided before I came into office.  Although, the way he had written the order, it made it seem like even Bush’s orders were out of line and that you have to stop stem cell research altogether.

     We are appealing that.  We’re challenging it.  And what we’re going to keep on doing on a whole range of these decisions is to make sure that I’m talking to scientists and ethicists and others, and try to build a common-sense consensus that allows us to make progress over the long term.

     Q    Mr. President, it’s a privilege for me to be here.  You talk about the small business loans.  My company is a high-tech company.  And we are growing, and we are providing high-tech jobs for Americans.  How can we ensure that banking and lending institutions are going to actually lend money to small businesses?  There have been numbers of steps done in that way, but so far I’ve been denied a loan twice and only got the -- for the third time after I asked for SBA-backed loan.

     THE PRESIDENT:  Right.  Tell me more about your business, by the way.  I’ve actually read about it.  But tell -- people here I think would be interested, because you’re working on clean energy issues.

     Q    This is correct, yes.  I have two lines of business; clean energy part where we are actually trying to get companies to become green and change their practices so that they follow a sustainability practice as the regular ways.  And the second part of my business is high-tech.  We are doing IT consulting and IT services for federal government and Fortune 500 companies.

     THE PRESIDENT:  How many employees do you have right now?

     Q    About 94.

     THE PRESIDENT:  Ninety-four?

     Q    Yes.

     THE PRESIDENT:  Well, look, part of the answer is what you already spoke about, which is SBA, the Small Business Administration.  We have doubled the number of small business loans that we’ve been giving through the SBA.  We’ve waived a lot of fees on those loans because we knew that small businesses were getting harder hit than just about anybody during the financial crisis.  They were the ones where the banks were pulling back the most.  So we tried to fill that void as the banks were getting well, making sure the small businesses could keep their doors open.

     But even by doubling the number of SBA loans, there’s still not enough capital to meet all the demand for small businesses across the country.

     That's why this bill that we’re looking to pass this week out of the Senate, and that Gerry and Jim already voted for, is so important -- because what it would do is it would take funding authorization to provide to community banks, who are most likely to give loans to small businesses, but it would say to those banks, you know what, we’re going to hold you accountable for actually lending the money.  So -- because what we don't want to do is just help the banks boost their balance sheets, but they’re never getting the money out of the door.

     Over the long term, we think that there are going to be enormous opportunities for banks to make money with businesses like yours, because yours are the ones that grow.  But they’re still feeling gun shy because of what happened on Wall Street.

     And in fairness to a lot of the community banks, they weren’t the ones who were making big bets on derivatives, but they were punished nonetheless.  They’ve been hit really hard in the housing market.  They’ve been hit on their portfolios.  They’ve been trying to strengthen their portfolios.  But when we provide these loan guarantees through the SBA, or we provide cheaper money to them that they can then lend out, and as long as we’re monitoring them to make sure that they actually lend those monies to small businesses, they’re the ones that are most likely to get that money out the door.

     This bill is very important.  It has been held up now for a couple of months, unnecessarily.  There was an article in The USA Today just about three weeks ago that said small businesses were actually holding off on hiring because they weren’t sure whether some of these tax cuts that they were going to get, as well as some of these lending facilities, would actually be set up.

And you hear some of my friends on the Republican side complaining that, well, we’d get more business investment if we had more certainty.  Well, here’s an example where we could give some certainty right away.  Pass this bill.  I will sign it into law the day after it’s passed or the day it is passed.  And then right away I think a lot of small businesses around the country will feel more comfortable about hiring and making investments.

     Q    -- this is what’s happening right now is that, you know, I have contracts and I am ready to hire 20 more people.

     THE PRESIDENT:  Right.

     Q    But nobody is going to give me additional loan right now.  I mean, I had an off-the-record conversation with the vice president of one bank and they said, it’s simply we’ve made a decision not to loan to small businesses; it’s simply more profitable to us to invest this money elsewhere.

     THE PRESIDENT:  Well, that’s why it’s so important to make sure that if they are getting help from us in terms of having more money to lend, that they actually lend it out and they lend it to small businesses.  And we’ve to make a direct link between the help that they’re getting and them actually lending the money.  That’s going to be critical.

     All right, who’s next?  Yes, over here.

     Q    I'm John’s sister, Wendy.

     THE PRESIDENT:  Hey, Wendy.  How are you?

     Q    I’m so honored and delighted to be here.  Thank you.

     THE PRESIDENT:  You must be John’s younger sister.

     Q    Yes, definitely, definitely.  (Laughter.)

     THE PRESIDENT:  That’s what I figured.

     Q    No, he’s my kid brother.  And I actually am the stringer in from Boston with that hockey team you’re meeting with this afternoon.

     THE PRESIDENT:  There you go.  Yes, I’ve been looking forward to congratulating them.

     Q    I would tell you just a little story, which is when I was in high school here at Woodson High School, I got involved in historic preservation.  And I worked on an archeology dig.  I researched the history of an old house.  I helped move the one-room Legato schoolhouse from out in the country into town hall to restore it as a piece of our county’s history.  And that launched my lifelong career is historic preservation.  And so I guess -- and I know you are interested in history and have studied particularly, I think, I’ve read, President Lincoln and the way he created a cabinet and so on.  So I know you value our nation’s history.  And I guess my question for you is, what are your thoughts about what we’re doing in your administration to invest in preserving our nation’s history and our historic places?

     And one little job-generating idea I’d give you is that all the studies show that renovating existing buildings, restoring historic buildings is more labor intensive than materials intensive.  It creates more jobs.  They’re local jobs for local people.  So I hope that might be part of your jobs strategy.

     THE PRESIDENT:  Well, I am a huge booster of historic preservation.  If I wasn’t, Michelle would get on me because she used to actually -- in Chicago, used to be on the historic -- on the landmark commission there.  And we live in a landmark district in Chicago.  So this is something that we care deeply about.

     I guess I’d broaden the point to say that not only should we be thinking about historic preservation, but we should also be thinking about our national parks, our national forests.  There’s this treasure that we inherited from the previous generation, dating back to Teddy Roosevelt.  And that requires us to continually renew that commitment to our historic structures and our natural resource base, so that when Trevor and Olivia and those guys have their kids, when you guys have your grandkids, that that stuff is there for them, too.

     So we have actually tried to ramp up our commitment to these issues.  We’ve, where we can, put a little bit more money into it.  But a lot of it’s not just more money; it’s also more planning.  And the Recovery Act gave a range of grants to state and local governments in some cases around preservation issues.

     Now, one point -- one other point I want to make, though -- and you were mentioning how renovation oftentimes will actually generate more jobs than new construction.  A related idea is what we can do to make our existing buildings and housing stock more energy efficient, because it turns out that we could probably cut about a third of our total energy use just on efficiency.  We wouldn’t need new technologies.  We wouldn’t need to invent some fancy new fusion energy or anything.  If we just took our existing building stock in homes and insulated them, had new windows -- schools, hospitals, a lot of big institutions -- we could squeeze huge efficiencies out of that.

There’s a lot of ways to be had, and that would benefit everybody.  It would mean that over time we were helping to save the planet by reducing our carbon footprint.  People would be paying less on their electricity bills and their heating bills and their air-conditioning bills.  So it helps consumers.

The problem -- the reason we haven’t done more of this is because it requires some capital on the front end.  I mean, a lot of school districts, for example, would love to retrofit their schools, but they’re having problems just keeping teachers on payroll right now, so they always put off those investments.

And one of the things that we tried to do through the Recovery Act, and something that I know that Gerry and Jim have been interested in, is something called Home Star that we’ve been working on -- is to essentially provide families as well as small businesses, as well as institutions like schools or hospitals, grants up front, where we say, all right, we’re going to give you $10,000 to retrofit your building or your house.  And then you’re going to pay us back through your savings on utilities over a five-year period, for example, so that over time, it doesn’t cost taxpayers a lot of money, but we’re essentially giving some money up front that’s going to then be recouped.

And I think there are a lot of ideas that we can pursue on that front that could really make a difference and put a lot of people back to work, whether they’re the folks selling the insulation at Home Depot, or the small contractor that for a long time was remodeling kitchens or putting in home additions -- maybe that business has dried up.  This would be a new area for them to get put to work.

     And about one out of four construction -- one out of four jobs that have been lost during this recession are related to the construction industry in some fashion.  Those folks have been hit harder than just about anybody else.  This would be an important boost for them.

     Q    If I could add to that, just one thing, which is, it’s really not necessary to replace the windows to get that energy efficiency.  Didn’t somebody write about the caulking gun?

        THE PRESIDENT:  Caulking is --

     Q    It’s a lot less expensive.  (Laughter.)

     THE PRESIDENT:  Absolutely.  Cash for caulkers.  (Laughter.)  Good point.

     All right, gentleman right there.

     Q    Mr. President, my name is Mark Murphy.  I’m a neighbor of John and Nicole.  Welcome to our neighborhood.

     THE PRESIDENT:  Thank you.  It’s a beautiful neighborhood.

Q    And before I say anything more, I'd be remiss, and my children would be not letting me back home, if I didn’t say hi to you.

THE PRESIDENT:  What are their names?

Q    Andrew, Tim, and Ellie, and my beautiful wife, Shannon.

THE PRESIDENT:  Tell everybody I said hi.

Q    Thank you.  Now, the question I have for you is, I’m a union-side labor attorney in D.C.  And I know you have some background in that.  And your comments here today and both -- your Labor Day comments struck me and my colleagues about the shrinking middle class, and those jobs that were lost, and how you’re going to and your administration is going to replace those jobs.

I work every day with working-class, blue-collar workers; I deal with a lot of different issues.  One of the issues that is dear to my heart and I know a lot of my colleague and union members is the Employee Free Choice Act.  And for people who don't know about that, it’s just basically an act, a law that would make it easier to unionize.  And it’s proven that unions -- unionized employees get better wages and better benefits.  And unfortunately that act hasn’t been passed yet and I just wanted to hear your thoughts on that.  Thank you.

     THE PRESIDENT:  Well, a little bit of background, for those who aren’t as familiar with it.  The Employee Free Choice Act is in response to 20, 30 years where it’s become more and more difficult for unions to just get a fair election and have their employers actually negotiate with them.

I mean, the laws that have been on the books have gotten more and more difficult to apply.  A lot of times, companies who may be good employers but just don’t want the bother of having a union will work very hard to make sure a union doesn’t develop.  And they will drag out the process for a very long time, and in some cases, workers who are joining unions or want to join a union or are helping to organize one may get intimidated.

     And so the idea behind the Employee Free Choice Act is let’s just make the playing field even.  We don’t have to force anybody to be in a union, but if they want to join a union let’s make it a little easier for them to go ahead and sign up.

     Now, the answer -- the short answer to your question is, we are very supportive of this.  Frankly, we don’t have 60 votes in the Senate.  So the opportunity to actually get this passed right now is not real high.  What we’ve done instead is try to do as much as we can administratively to make sure that it’s easier for unions to operate and that they’re not being placed at an unfair disadvantage.

     Let me speak more broadly, though, about the point that you just made.  So many things we take for granted came about because of the union movement -- minimum wage, 40-hour workweek, child labor laws -- you name it -- weekends -- a lot of these things came about because people were fighting for them.  They didn't come about automatically and naturally.

     The other thing that unions did, particularly in the manufacturing sector, was it gave a base for blue-collar workers to get a middle-class wage, which meant that essentially the guys working at the Ford plant could afford to buy a Ford.  And so it increased demand overall and, ironically, it meant that businesses had more customers and could make more money.

Now, we now live in an era of international competition.  And that makes it harder for businesses.  I mean I think we should acknowledge that the business environment now is much more competitive than it was back in the 1960s or ‘70s.  Technology has made it more difficult for businesses to compete.  Transportation has made it more difficult to compete.  The costs for shipping big, manufactured goods from China to the United States -- or high volumes of goods from Japan or Korea or Malaysia, or Indonesia to the United States is a lot cheaper now than it was.  So what that means is, we’ve got to be sympathetic to business concerns that they don't get priced out of the market if they're competing internationally.

     And I think the best way to balance that is to make sure that business interests here in the United States, and labor interests -- workers’ interests here in the United States are aligned; make sure that businesses are looking after their workers and giving them a good deal.  But workers and unions also have to think about businesses and not put them in a position where they’re potentially priced out of the marketplace.

Now, I think that that balance is tilted way too far against unions these days.  And I think that actually if we had some of these businesses with employees who were there for a longer term, were more loyal, they weren’t worried about their jobs being shipped overseas, that that would actually be good for the economy as a whole and would be good for businesses here as a whole.

     But we have to acknowledge that competition means that businesses and workers here in the United States have to be better trained, better skilled, more competitive, leaner, meaner. And we’ve got to invent more stuff so that we constantly are working on high-end jobs as opposed to the low-end jobs -- because the truth is the low-end jobs, we’re never going to be able to compete on the basis of price.  I mean, there’s always going to be a country -- actually, wages are starting to go up a little bit in China.  Our problem is not China.  The next is going to be Vietnam or it’s going to be Bangladesh or -- there’s always going to be someplace in the world where they pay lower wages.

Our advantage is going to be if we have higher skills, we have a workforce that works together more effectively, that our businesses are better organized -- if we have that, then I think that we can compete against anybody.

     And one of -- a good example is actually Germany, which has a much higher rate of unionization than we do.  But they’ve actually been able to continue to export at very high levels and compete all around the world, mainly because they’ve got such a highly skilled workforce, they’re putting together high-end products that can compete with anybody.

     Yes, right here.  A mic is coming.

     Q    Hi, Mr. President.  It’s an honor.  I’m so nervous.

     THE PRESIDENT:  Don’t be nervous.

     Q    Oh, I am so nervous.  I love everything you’re doing.  I love your vision.  I’m so glad you got into office.  I love medical -- health care reform.  Where I come from, when we have to go to the doctor, we went to the doctor.  If we needed surgery, we got surgery.  And then I came here and found out, oh, my gosh, you need insurance -- you need this, you need that -- which I could never afford on the salary I make.  Now I’m very lucky.  My husband -- unfortunately, he is in the construction business -- but hopefully, that’s going to come back.

     So my question is also -- I work for Fairfax County public schools, and I haven’t had a raise in two years and I may not even have a job next year -- because I hear it’s going to get worse before it’s going to get better.  Do you agree with that?  Like, I mean, I know it’s -- we’re starting to improve and jobs are starting to come back, but how long do you think this is going to take?  It sounds wonderful.

     THE PRESIDENT:  Well, first of all, you have a better chance of keeping your job in the public school systems now, because Gerry and Jim voted to close a pretty egregious tax loophole that was incentivizing jobs going overseas and that even some corporations that stood to benefit thought was ridiculous.  They closed that loophole in order to fund teacher jobs and police officer jobs and firefighter jobs all across the country.  So that’s been very helpful in providing assistance to school districts that are strapped.

        The economy is improving.  But one of the headwinds that the economy is experiencing is actually that state and local governments have been getting really hard hit.  Now, we gave states a lot of help at the beginning of this crisis because their budgets were just imploding.  And typically state and local governments, they get hit faster by declines in tax revenues and property tax -- obviously they’re relying on property taxes, and with the housing market collapsing, that was really hitting them hard.  And so they were looking at possibly laying -- slashing 30 percent of jobs in school districts or in social services.

And one of the most effective ways of preventing this from tipping over into a Great Depression was giving them help.  The problem is some of that help is running out.  And property tax revenues haven’t improved yet; sales tax revenues haven’t improved yet as much as they’d like.  So local districts, states, are still having big budget problems, and they’ll probably have those big budget problems next year.

     Now, the challenge we have is, ironically, that if you start laying off a whole bunch of teachers, or a whole bunch of police officers or firefighters, now they don’t have a job, which means they spend less, which means that there’s less tax revenue.  And you start getting into a vicious, downward spiral.

     So that's why the steps that we took were so important.  And I’ve got to say, this is an example of where you’ve just got a fundamental disagreement between Republican leadership right now and Democrats.  John Boehner, who stands -- wants to be the Speaker -- the next Speaker of the House, if the Republicans take over, he specifically said, well, these are just government jobs and they're not worth saving.  And he fought -- he voted no on closing this tax loophole that was incentivizing jobs from going overseas.

Now, it’s just not smart from an economic perspective for us to allow a whole bunch of those jobs that are right here in the United States to go away while we’re giving tax revenue away to companies that are creating jobs somewhere else.  It just doesn’t make sense.

     And so we’re going to continue to have some of these battles over the next several years.  And I think that, frankly, how state and local governments are able to deal with these budget challenges next year is in part going to depend on whether the people who are making the decisions are Jim and Gerry, or whether they're John Boehner -- because they’ve just got a different set priorities.  And I don't know about you, but I like these guys making these decisions more than the other folks.  (Applause.)  But that's just my unbiased opinion.

     All right.  Yes, go ahead.

        Q    Mr. President, thank you so much for visiting us here in Mantua.  It’s quite an honor.

     THE PRESIDENT:  Thank you.

     Q    I think my question is kind of a good segue on that.  We do face -- the political environment has changed a lot since you were elected.  And I think with the upcoming midterm elections, you can certainly expect a lot of new faces in Congress, and certainly a lot of new representatives and senators are going to have been elected on platforms that are really opposed to government intervention in the economy.  What’s your plan for working with the new Congress to make sure we get the actions that you see are necessary to end the recession?  And what do you see as really common ground with Republicans in Congress for some of the solutions that can bring the recession to an end?

     THE PRESIDENT:  Well, let me just say that I don't believe in wholesale government intervention in the economy.  My starting point is, is that what makes us the wealthiest, most dynamic country on Earth is a free-market system where small business owners are creating jobs, and what start off as small businesses like AOL end up being big businesses, and some kid at Harvard starts something called Facebook, and the next thing you know it’s revolutionized part of our economy.  That's our strength.

     So that's a starting point where Republicans and Democrats should be able to come together.  We all believe in that.

     But there are some fundamental differences.  At the beginning of the crisis, for government not to intervene when the financial system was on the verge of meltdown, and we were shedding hundreds of thousands of jobs a month, and the credit markets had just frozen completely -- for us not to intervene in that situation would have been simply irresponsible -- would have been irresponsible.  And I don’t know a economist, Democrat or Republican, who would suggest otherwise.  It would have been simply irresponsible.

     So that’s -- so some of these steps that we had to take had to do with emergency situations.  A great example is the auto industry.  When we decided to intervene -- keep this in mind:  We had been bailing out the auto industry for years under the previous administration.  The difference was we hadn’t ever asked them anything in return.  So they kept on with their bad practices, creating cars that, frankly, in this kind of energy environment, weren’t the cars of the future.  And they never changed their practices.

     So what we said was, you know what, we’re going to help you, but this time we’re going to help you by also restructuring.  And we’re going to bring all the stakeholders together -- the workers, management, shareholders -- and we’re going to say if taxpayers are going to help you out, you’ve got to change how you do business.  And they have.  And they emerged from bankruptcy and now you’ve got all three U.S. auto companies operating at a profit.

     If we had not taken that step, we would have lost a million jobs in the auto industry.  You would not have an auto -- maybe Ford might have survived.  GM and Chrysler definitely would not have.  And the ripple effects on the economy would have been devastating.

     So sometimes you make these decisions not because you believe in government intervention, per se.  You make these decisions because we’ve got a crisis and we’ve got to respond.

     Now, right now we’ve got a disagreement also on taxes.  Jim, Gerry, the vast majority of Democrats, think that because wages and incomes had flat-lined for middle-class families, which we define as less than $250,000 a year, that they should definitely get an extension of the tax cuts that were instituted in 2001, 2003.

     Now, keep in mind that if you make more than $250,000 a year, you’d still get a tax cut.  It’s just you’d only get it up to your first $250,000.  So if you make half a million dollars a year, you still get tax relief on the first half of your income. If you made a million, it would be the first quarter of your income.  After that, you’d go back to the rates that were in place when Bill Clinton was President -- which I just want to remind everybody, at that time we had 22 million jobs created, much faster income and wage growth, the economy was humming pretty good.

     We could get that done this week.  But we’re still in this wrestling match with John Boehner and Mitch McConnell about the last 2 to 3 percent, where, on average, we’d be giving them $100,000 for people making a million dollars or more -- which in and of itself would be okay, except to do it, we’d have to borrow $700 billion over the course of 10 years.  And we just can’t afford it.

     Now, I wanted to lay out those differences before I talked about where I think we can work together.  Where I think we have a great opportunity to work together is on the issue of our long-term debt.

Our big challenge right now is creating jobs and making sure the economy takes off.  And the steps that we’ve been taking, including cutting taxes for small businesses, providing loans for small businesses, accelerating depreciation -- those steps can encourage investment right now.  They cost some money, but they're wise investments because right now our number one focus has to be jobs, jobs, jobs, and encouraging business investment. But on the horizon, sort of in the middle term and the long term, we do have a very real problem with debt and deficits.

     And I have to say that I understand a lot of people who are upset on the other side.  And some of them were rallying in D.C. today -- or yesterday.  I do understand people’s legitimate fears about are we hocking our future because we’re borrowing so much to finance debt and deficits.  I understand that.  They saw the Recovery Act.  They saw TARP.  They saw the auto bailout.  They look at this and -- God, all these huge numbers adding up.  So they’re right to be concerned about that.

     And I think that there’s an opportunity for Democrats and Republicans to come together and to say, what are the tough decisions we’ve got to make right now that won’t squash the recovery, won’t lead to huge numbers of teacher layoffs -- short term we don’t want to constrict too much early -- but how can we get ourselves on a trajectory where midterm and long term we’re starting to bring our debt and deficits slowly under control?

     Now, I set up a bipartisan fiscal commission that’s designed to start coming up with answers.  And they’re supposed to report back to me right after the election.  That was on purpose, by the way.  We said, don’t give us the answer before the election because nobody will have an honest conversation about it, everybody will posture politically.  But as soon as the election is over, report to us and let’s see if Democrats and Republicans can come together to make some tough decisions.

     And, by the way, they are going to be some tough decisions.

People, I think, have a sense that somehow if we just eliminated a few pork projects and foreign aid, that somehow we would solve our debt.  The big problem with our debt is actually the costs of Medicare and Medicaid.  Our health care system is by far the thing that is exploding faster than anything.  And as the population gets older and it’s using more health care services, if we don't get control of that, we can’t control our long-term debt.  That's why health care reform was so important -- because we’re trying to rationalize and make the system smarter, but that's only one piece of it.  We’ve also got to look at everything from defense budgets to food stamps.  You name it, we’ve got to look at it and see are there ways that we can reduce our costs over the long term.

But we can’t give away $700 billion to folks who don't need it and think somehow that we’re going to balance our budget.  It’s not going to happen.

That's one area where I think we can make progress.

A second area where I hope we can still make progress is on energy.  Everybody agrees our energy policy doesn’t make sense.  We don't have an energy policy.  We’ve talked about this since Richard Nixon.  Remember OPEC, ’73, and oil -- lines at the gas station?  And every President has said this is a national security issue, this is a crisis, we’ve got to do something about it.  But we don't do anything about it.

So my suggestion is let’s both -- let’s join hands, Democrats and Republicans, and go ahead and take the leap and try to solve this problem.  And there’s not a silver bullet, there’s not one magic solution to our energy problems.  We’re going to have to use a bunch of different strategies.

I already mentioned efficiency.  That has to be a huge push. With respect to transportation sector, one of the things that we did without legislation -- nobody has really noticed this, but this was huge -- we increased fuel-efficiency standards on cars for the first time in 30 years -- cars and trucks.  And we got the car companies and auto workers to agree to it, not just environmentalists.  That's going to help.

We’ve got look at nuclear energy.  Historically, a lot of environmentalists have said, oh, we don't like nuclear energy.  There are real problems with storage, et cetera.  But if we’re concerned about global warming and greenhouse gases, nuclear energy is a legitimate fuel -- energy source that the Japanese and the French have been using much more intelligently than we have.  We’ve got huge reservoirs of natural gas that are relatively clean, but we’ve got to use those in an environmentally sound way.  We’ve got to develop those in an environmentally sound way.  So that's an area where I think that we can still hopefully make some progress.

And the last thing I’ll say -- and some people disagree with me on this.  They think it’s too incendiary, it’s too politically difficult, et cetera.  I think we need to reform our immigration system, and we should be able to find a way that secures our borders and provides people who are already here a pathway so that they are out of the shadows.  They're paying a fine.  They're learning English.  They're getting assimilated, but they're not living in fear.  We should be able to do that.

     And we had 11 Republican senators who voted for it, including John McCain was a cosponsor of the bill -- we should be able to get that done again.  Because everybody agrees that the system we’ve got right now is broken.

     And one last thing I wanted to mention is actually education.  The reason I didn't mention up front is this has been one of the few areas where I’ve actually gotten some compliments from Republicans.  (Laughter.)  I think the strategy that we have right now -- which is to maintain high standards, work with states in a smart way to develop curriculums, teacher-training strategies, to boost our higher education -- institutions of higher education -- that's an area where we should all agree. Because it’s indisputable that if we are working smarter, if our kids are better trained, then we will succeed.  And if they’re not, it doesn’t really matter what else we do -- over time, we’re going to decline.

     All right, I’ve got time for one more question.  I’m going to call on this young lady right here.

     Q    I’m really nervous.  Thank you, Mr. President, for being here.  There’s a lot of people sending you a lot of good energy, one being my 82-year-old aunt.  She wanted me to make sure I told you that.

     THE PRESIDENT:  Tell her I said hi.

     Q    Okay.  I’m a massage therapist and --

     THE PRESIDENT:  I’ve got a crick in my neck right here.  (Laughter.)

     Q    Yes, I bet you do.

     THE PRESIDENT:  A lot of tension has been building up.  (Laughter.)

     Q    Do you get a regular massage?  (Laughter.)

     THE PRESIDENT:  Go ahead, go ahead.

     Q    One prevailing theme that comes here in my practice is fear.  And on an energetic level, what I would like to see you institute or get started, bipartisan, is to alleviate people’s fears of spending $5.  I know this is like -- it sounds so basic. But if we go out there and spend a little bit, it’s going to come back around.  It works.  I mean, you’ve got a program here where you’ve got -- you’re giving a tax break to those companies that hire returning vets.

     THE PRESIDENT:  Right.

     Q    You have a $2,400 tax break.

     THE PRESIDENT:  Right.

     Q    Well, who are those companies?  I would patronize a company that’s making the effort of going out and hiring these people.  I mean, you’ve got to spend it to get it back.  And there’s just this prevailing fear all the time and it doesn’t have -- it comes down to $5, $10, whatever, you got to put it out there and it will start the momentum going.

Q    It would also be some good news.

     THE PRESIDENT:  Well, look, I think you are absolutely right that some of this is psychology.  Look, the country went through a huge trauma.  The body politic is like an individual in the sense that if they go through a really bad accident and you’re in a cast and got a little whiplashed and bruised and battered, it takes some time to recover.  And that’s what happened to our economy.  We went through a really bad accident.

     It was a preventable one, by the way.  If we had had some more rules of the road in place, if we’d had better economic policies, we could have prevented it.  But it is what it is.  We went through this.

        You’re absolutely right, though, that now part of what’s holding us back is us needing to go ahead and feel confident about the future.  Now, that’s not the only thing holding us back.  Let’s be realistic.  Part of the reason people aren’t spending is they had maxed out on their credit cards, and people, quite sensibly, said to themselves, you know what, this is probably a good time for us to reflect on the fact that we were buying a bunch of stuff that maybe we should get in the future but we weren’t quite there yet and we should run down our debts. And people have done that.  People have been paying down their debts a lot more over the last year than they had in the previous five or 10 years.

A lot of people were borrowing against their homes -- home equity loans.  One of the things that I always -- Michelle and I always laugh about is when people talk about us, I think they forget that we were basically living the same lives as John and Nicole, just -- it wasn’t that long ago.  It was like six, seven years ago.  I still remember the first time I refinanced our -- we had a condo, and we had gotten higher -- initially, we had gotten higher rates.  And then -- because we bought it in 1993. And sometime around ’97 or ’98 -- I don’t remember exactly when  -- the rates had gone down like a couple of percent.  And we said, well, it makes sense for us to go to refinance.

     And I still remember talking to the bank.  And they said, you can refinance and you can take some money out.  And I said, well, what does that mean?  They said, well, your house -- your condo has appreciated so much that you can take -- it’s like found money.

     And I remember thinking at the time, well that doesn’t sound right.  (Laughter.)  But it was -- but that was -- everybody, I think, was so certain that homes were appreciating, and they would always appreciate, and so it just made everybody feel a lot richer.

     Now, homes suddenly start dropping in value.  You don't have that kind of equity.  And so people feel a little bit less wealthy; 401(k)s still haven’t fully recovered; 529s, the college portfolios that people put together, they still haven’t fully recovered.  So there are legitimate and real reasons why people have pulled back a little bit.

But having said all that, I want to end on the point that you’re making, which is that we have averted the worst.  The economy is now growing.  There are enormous opportunities out there.  There are people who are inventing stuff that will be the new products of the future all across this country.  There are young people who, when I meet them, they are talented and they’re energetic, and they feel confident about America.

If you travel overseas, as tough as this recession has been for us, the truth of the matter is, is that most countries still envy the United States.  And there are billions of people around the world who would die to be here and have that opportunity to prosper and be part of this great middle class of ours.

And so my hope is -- and this goes to the question of the previous gentleman -- what can Republicans and Democrats do together after this election is stop spending so much time attacking the other side, and spend a little more time focusing on what’s good and what’s right about America, and what opportunities we have.  (Applause.)  And if we do that, then I’m absolutely confident that we’re going to move forward for a long time to come.

Thank you very much, everybody.  God bless you.  (Applause.)

                                  END                3:00 P.M. EDT