Remarks by the President at the Departure of Chief of Staff Rahm Emanuel

East Room

Remarks by the President at DNC Gen44 Event

DAR Constitution Hall, Washington, D.C.

Remarks by the President at a Backyard Discussion in Des Moines, Iowa

Clubb Residence, Des Moines, Iowa

10:06 A.M. CDT

THE PRESIDENT:  Thank you so much for being here.  And first of all, I just want to thank Jeff and Sandy and Tristan and Skyelar for letting us use their backyard.  So please give them a big round of applause.  (Applause.)

And since we are here, I should just say, go Bulldogs.  (Applause.)  I know how to work a crowd.  (Laughter.) 

I want to make sure that everybody also acknowledges your outstanding governor, Chet Culver, who’s here.  (Applause.)  The mayor of Des Moines, Frank Cownie, who is here.  (Applause.)  And State Representative Janet Petersen is here.  (Applause.)  All of whom are doing great work, and I had a chance to work with and get to know when I spent a few months here in Iowa a couple years ago.

It is wonderful to be back, and I thank all of you for coming.  I am not going to give a long speech on the front end here.  What I really want to do is hear from you.  So what I’m going to do is just speak a little bit at the front end about where I think the country is at, how we move forward.  It’s relevant because there is an election coming up, although I’m going to try to avoid making just a straight political speech here.

When I started running for President back in 2008 -- 2007, 2008 -- the reason I was willing to go into the race, even though Michelle was not crazy about politics and I had two young daughters who are the center of my world and I was going to be away from for quite a bit, was a feeling that the country was at a crossroads; that we had some fundamental decisions to make that we had been putting off for decades.

And there are a whole host of individual issues -- education and energy and what we do in terms of our foreign policy -- a whole bunch of discrete issues that concern me.  What concerned me most I think was the nature of our economy and how the American Dream seemed as if it was slipping away for too many people.

From 2001 to 2009, the average wage of middle-class families in America actually declined by 5 percent.  Job growth was slower during that period than at any time since World War II, at the same time as the costs of everything from health care to college tuition were skyrocketing.

And so what you had was a situation in which the very top was getting very wealthy, but the middle class, which is the beating heart of our economy, and those aspiring to get into the middle class, were finding it harder and harder to get ahead. 

And there were a range of reasons for that, but a lot of it had to do with the set of policies that had been put in place, whose basic premise was that if we cut taxes, especially for millionaires and billionaires, and if we cut back on rules and regulations for how our industries and companies operate, and then we cut everybody loose to sort of do -- to fend for themselves, that somehow the economy would automatically grow.  And it didn’t work.

The other thing that was happening was that we were becoming less competitive internationally, so manufacturing jobs were moving overseas, you saw countries like China and India and Brazil investing heavily in their education systems and in infrastructure.  And where we used to be ranked number one, for example, in the proportion of college graduates, we now rank number 12.  Where we used to have the best public school system in the world, now our kids rank 21st in science and 25th in math.

And so slowly all the things that had made us the most productive country on earth were starting to slip away.  And we were losing that competitive position.

So what I said was I’m going to run for President because there are some long-term things that we can do that will start growing our economy from the bottom up, make sure that the middle class is expanding, make sure that innovation and entrepreneurship is taking place in this country and not someplace else, that we can start rebuilding our economy so that it works for everybody.  And that was really the platform that I ran on in 2008.

And that meant that we had to have a school system that was serious about training our young people for the jobs of the future, which wasn’t just a function of more money, by the way -- it also meant reforming our school system so that it worked better.  It meant that we made sure that every young person who worked hard and took responsibility was able to afford to go to college without accumulating some huge mountain of debt. 

It meant that we put much more emphasis on math and science and how we could develop new technologies in our economy and innovation.  It meant that we started investing more in research and development.  We used to typically invest about 3 percent of our gross domestic product in research and development.  That started slipping.  I said we had to get it back up. 

It meant that we invested in infrastructure that would lay the groundwork for a 21st century economy -- not just roads and bridges but also broadband lines and a smart electric grid that could make us more energy efficient.  It meant that we had a new energy policy that would focus on clean energy -- solar and wind and biodiesel. 

And it meant we had to fix our health care system, which was a huge drag on businesses and families and the federal government.  It meant that we had to also get control of our spending and align what we take in and how much we spend at the federal government level so that it was sustainable.

Now, that was just on domestic policy.  We had a whole bunch of things we had to do on foreign policy, too.

It turns out that we were in more trouble than we had even imagined in 2008, so that by the time I was sworn in, in January of 2009, a lot of these economic policies had culminated in the worst financial crisis since the Great Depression.  And I don’t need to tell you how devastating that’s been for people all across the country and here in Iowa.  In the six months before I was sworn in, we lost 4 million jobs.  The month I was sworn in, we lost 750,000 jobs; the month after that, 600,000; the month after that, 600,000.

So we had already lost most of the 8 million jobs that we were going to end up losing in this recession before any of my economic policies even had a chance to take effect.  And the financial system was on the verge of meltdown, so that people couldn’t even get loans to buy a car.  I mean, credit was just shut down.

So we had to take a number of emergency measures.  We stepped in and we stopped the bleeding.  Now the economy is growing again.  We’ve had private sector job growth for the last eight months.  Credit is now flowing again, although small businesses are still having a tough time getting credit and so we’ve been focused -- we signed a bill actually this week to help small businesses get credit and cut some of their taxes.

And so I’m very proud of the fact that we’ve been able to prevent the economy from going into a second depression, but not only do we have a big hole that we’ve got to climb ourselves out of -- we still have those 8 million jobs that were lost, and that’s a lot of jobs to make up -- the economy is still not growing as fast as it needs to.  A lot of small businesses are still struggling.  A lot of large businesses are just sitting on a lot of cash because they’re still uncertain about whether to invest in the future.  But all those other problems that we had, those didn’t go away, the foundational problems, the structural problems in the economy that had led us to slip relative to other countries. 

So we’ve had a real challenge over the last couple of years of dealing with a crisis but not taking our eye off the ball in terms of some of the policies that we’ve got to change.

And that’s why financial reform was so important, so we never have to engage in taxpayer-funded bailouts again.  That’s why health reform was so important because we had the opportunity not only to help ordinary folks have a better handle on their health care costs, but also that over time, we could make the health care system as a whole more efficient and effective.

That’s why we’ve put so much emphasis on education reform.  And this is one area where I think that we’ve actually gotten some compliments from Republicans because we’re -- we are not taking an ideological approach.  We’re saying how do we create more accountability in the system, how do we encourage better teachers in the classroom, how do we break through some of the bureaucracy to make sure our kids are learning what they need to learn.

This is all by way of saying that the challenges the economy faces are still great, and they’re not going to go away tomorrow or the next day.  But we’re on the right path, we’re on the right track, as long as we stay focused on two things:  number one, that our economy only works when folks who are working hard, middle-class families, ordinary folks have opportunity so that if they’re doing the right thing, they’re going to be able to support a family; they’re going to be able to send their kids to a good school and send them to college; they’re going to be able to retire with some dignity and respect; they’re going to be able to afford health care and not go bankrupt when they get sick. 

That has to be the orientation.  And everything we think about in terms of economic policy is how do we make sure that if people are out here working hard and taking responsibility for themselves and their families, that they are rewarded.  That’s the essence of the American Dream.

And the second thing that we’ve got to keep in mind is that we’ve got to make tough choices if we’re going to solve some of these long-term problems that we’ve been putting off.  And that means putting aside some of the politics as usual.  And it also means sometimes telling folks things they don’t want to hear.

Now, we’re in election season, so that second part of the formula is very hard to apply.  And I just want to say -- and then I’m just going to open it up for comments and questions -- when you look at the choice we face in this election coming up, the other side, what it’s really offering is the same policies that from 2001 to 2009 put off hard problems and didn’t really speak honestly to the American people about how we’re going to get this country on track over the long term.

And I just want to use as an example the proposal that they put forward with respect to tax policy.  They want to borrow $700 billion to provide tax cuts for the top 2 percent of Americans, people making more than $250,000 a year.  It would mean an average of a $100,000 check to millionaires and billionaires.  That’s $700 billion we don’t have, so we’d either have to borrow it, which would add to our deficit, or we’d have to cut -- just to give you an example, about 20 percent of the amount of money that we spend on education.  We’d have to cut investments we’ve made in clean energy.  We’d have to cut investments we’ve made in Head Start.  We’d have to cut improvements in terms of student loans for kids going to college that would affect about 8 million kids.

So that’s an example of where, you’ve got a choice to make.  You can’t say you want to balance the budget, deal with our deficit, invest in our kids, and have a $700 billion tax cut that affects only 2 percent of the population.  You just can’t do it. 

And so I hope that as you go forward, not just over the next six weeks before the election but over the next two years or next six years or next 10 years, as you’re examining what’s taking place in Washington, that you just keep in mind that we’re not going to be able to solve our big problems unless we honestly address them. 

And it means that we’ve got to make choices and we’ve got to decide what’s important.  And if we think our kids are important and the next generation is important, then we’ve got to act like it.  We can’t pretend that there are shortcuts or that we can cut our taxes, completely have all the benefits that we want, and balance the budget, and not make any tough choices.  That’s I think more than anything the message that I want to be communicating to the American people in the months and years ahead.

Anyway, with that, I just want to open it up.  I know that there are microphones somewhere in the audience.  We’ve got these terrific young people who volunteered.  So just raise your hand, and they’ll find you.

Here you go.  Why don’t we start right here?  And please introduce yourself.

Q    Good morning, Mr. President.  Welcome back to Iowa.  We’re thrilled to have you back here. 

THE PRESIDENT:  Thank you, Mary.  It’s great to be back.

Q    I have a 24-year-old son who campaigned fiercely for you and was very inspired by your message of hope.  He graduated from Simpson College about a year and a half ago with honors.

THE PRESIDENT:  Congratulations.

Q    And he’s still struggling to find a full-time job.  And he and many of his friends are struggling.  They are losing their hope, which was a message that you inspired them with.  Could you speak to that -- how you would speak to the young men and women in our country who are struggling to find a job, and speak to that message of hope?

THE PRESIDENT:  Well, I was in Madison, Wisconsin, yesterday, and we had about 25,000 mostly young people come out.  And it was a terrific reminder of the fact that young people still have so much energy and so much enthusiasm for the future.  But they’re going through a tough time.  Look, this generation that is coming of age is going through the toughest economy of any generation since the 1930s.  That’s pretty remarkable.

Most of us -- in fact, I’m just looking around the room -- I think it’s fair to say nobody here remembers the economy of the Great Depression.  So the worst economy we had gone through -- maybe one -- (laughter) -- maybe one, maybe a couple.  But you guys look really good for your age, though, so -- (laughter.) 

But for most of us, the worst we had seen before was the 1981 recession, the 1991 recession, and then the recession of 2001.  This recession had more impact on middle-class families than those other three recessions combined in terms of job loss and how it’s affected people’s incomes.

So that’s going to have an effect on an entire generation.  It means that they’re worried about the future in a way that most of us weren’t worried when we got out of college.

Now, here’s the good news -- and I’ve said this to young people.  I think that this generation, your son’s generation, is smarter, more sophisticated, more passionate, has a broader worldview.  I think that they don’t take things for granted; they’re willing to work hard for whatever they can achieve.  I think they think about the community and other people and they don’t just have a narrow focus on what’s in it for me.  When I meet young people these days, I am very impressed with them.  I think they’re -- they are terrifically talented.

And so -- so their future will be fine.  But in the short term, what I’d say to them is that, first of all, we’re doing everything we can to make sure that they can get the best education possible. 

One of the things that we did this year that didn’t get a lot of attention was we were able to change the student loan program out of the federal government to save about $60 billion that’s going to go directly to students in the form of higher grants, reduced loan burdens, debt burdens when they get out of college.  It’s going to make a difference to them.  So we’re going to do everything we can to make sure they can succeed educationally.

Number two, obviously we’re doing everything we can to grow the economy so that if they’ve got the skills, they’re going to be able to find a job in this new economy.  And as I said, we’ve seen private sector job growth eight consecutive months now. 

The economy is growing; it’s just not growing as fast as we’d like it -- partly because there are still some headwinds.  We had some overhang because of all the problems in the housing market, and the housing market is a big chunk of our economy.  All that excess inventory of houses that were built during the housing bubble, they’re getting absorbed and slowly that will start improving.  So the expectation is, is that although we’re not growing as fast as we can, if we’re making some good choices about providing small businesses tax breaks and helping to shore up the housing market, that over the next couple of years, you’re going to start seeing steadily the economy improving.

And if young people like your son are prepared, if they’re focused and equipped, they’re going to be able to find a good job. 

In the meantime, what we’ve also done is made sure, for example, that your son can stay on your health insurance until the age of 26, which -- because of health care reform.  And that is going to relieve some of the stress that they’re feeling right now.

And then finally what I’d tell your son is, is that we’re trying to make some tough decisions now so that by the time he has his own son or daughter, that we are back to number one in research and development, back to number one in the proportion of college graduates, back to number one in terms of innovation and entrepreneurship, that we have succeeded in creating a competitive America that will ensure this 21st century is the American Century, just like the 20th century was.

But it’s going to take some time, and so the main message I have to young people -- in some ways, this generation may be less fixed on immediate gratification than our generation was, partly because they’ve seen some hardship in their own families and in their own careers.

Okay, who’s next?  Gentleman right here.

Q    I live about five or six blocks away in Beaverdale.  And we’re really glad you came here, Mr. President. 

THE PRESIDENT:  Thank you.  It’s not hard to come here.  This is a nice neighborhood, by the way.

Q    It’s great.

THE PRESIDENT:  I love these big trees.  (Applause.)  It’s beautiful. 

Q    Now, my question relates to things halfway around the world and how they affect the economy, particularly the wars and the enormous amount of spending that has gone into that over the last decade, not just the last couple years.  So this is what I’d ask.  Those decade-long conflicts have had an enormous cost in terms of people killed and wounded -- our men and women, and other peoples who are killed -- and they’ve had a gigantic cost in terms of money and resources and people diverted to the war.  When can we look forward to reducing the huge spending on these wars, and is it possible that kind of funds could help us square up our budget and give us crucial resources to strengthen our economy right here at home?

THE PRESIDENT:  Well, I said at a speech I made at West Point talking about Afghanistan that I’m interested in nation-building here at home.  That’s the nation I want to build more than anything else. 

As you know, because it was a big issue when I was campaigning here in Iowa, I was opposed to the war in Iraq from the start.  I made a commitment that I would bring that war to a responsible end.  We have now ended our combat mission in Iraq and we’ve pulled out 100,000 troops out of Iraq since I was in office.  (Applause.)  So that’s a commitment we’ve followed up on.

Now, Afghanistan was a war that most people right after 9/11 I think overwhelmingly understood was important and necessary.  We had to go after those who had killed 3,000 Americans.  We had to make sure that al Qaeda did not have a safe haven inside Afghanistan to plan more attacks.  And you can speculate as to whether if we hadn’t gone into Iraq, we had just stayed focused on Afghanistan, whether by now we would have created a stable situation and we would not have a significant presence there.  But that’s not what happened. 

And so when I walked in, what we had was a situation in Afghanistan that had badly deteriorated over the course of seven years, and where the Taliban was starting to take over half of the country again.  You had a very weak Afghan government.  And in the border region between Afghanistan and Pakistan, you had al Qaeda still plotting to attack the United States.

Now, I had said during the campaign we need to make sure that we’re getting Afghanistan right.  And what I committed to when I came into office was we’ll put additional resources, meaning troops and money on the civilian side, to train up Afghan forces, make sure that the Afghan government can provide basic services to its people. 

But what I also said is we’re not going to do it in an open-ended way.  We’re going to have a time frame within which Afghans start having to take more responsibility for their own country.  And I said that on July of next year, we’re going to begin a transition of shifting from U.S. troops to Afghan troops in many of these areas.

Now, the situation there is very tough.  Afghanistan is the second-poorest country in the world.  There are a lot of countries in the world.  This is the second poorest.  It has a 70 percent illiteracy rate.  Afghanistan was much less developed than Iraq was.  And it had no significant traditions of a strong central government that could provide services to its people, or a civil service, or -- just the basic infrastructure of a modern nation state.

So we’re not going to get it perfect there.  It is messy, it is hard, and the toughest job I have is when I deploy young men and women into a war theater because some of them don’t come back, and I’m the one who signs those letters to family members offering condolences for the enormous sacrifice of their loved ones.

But I do think that what we are seeing is the possibility of training up Afghan forces more effectively, keeping pressure on al Qaeda so that they’re not able to launch big attacks, and that over the next several years as we start phasing down, those folks start lifting up.

Here’s the impact it will have on our budget.  There are going to be still some hangover costs from these two wars -- the most obvious one being veterans, which we haven’t always taken care of as well as we should have, and I’ve had to ramp up veterans spending significantly because I think that’s a sacred trust.  They’ve served us well; we’ve got to serve them well.  (Applause.)  And that means services for post-traumatic stress disorder, reducing backlogs in terms of them getting disability claims, help specifically for women veterans who are much more in the line of fire now than they’d ever been before.  All those things cost some money.

So even as we start winding down the war in Afghanistan, it’s not as if there’s going to be a huge peace dividend right away.  But what it does mean is we’ll be able to more responsibly manage our military budget, and this is another example of where you can’t say you want to balance the budget and not take on reform in the Pentagon.  I mean, we’ve already pushed hard to eliminate some weapons programs in the Pentagon budget that the generals, the people who actually do the fighting, say we don’t need.  But getting those programs shut down is very difficult because typically there’s not a single weapons program out there that doesn’t have some part being built in 40 different congressional districts in 10 or 20 different states so that everybody has a political vested interest in keeping it going.

And Bob Gates, my Defense Secretary, has been really good about pushing hard on that.  And we’ve won some battles, but that’s going to be an area that we’re going to have to take a serious look at as well when we put forward a plan for getting a handle on our long-term debt and deficits.

Okay?  All right, I’m going to go boy, girl, boy, girl, just to make sure everybody knows I’m fair here.  (Laughter.)  Right here.

Q    Hi.  My mother lives with my husband and I.  We take care of her.  She’s been with us for six years now.  She is currently in a nursing home getting rehab. 

THE PRESIDENT:  Right.

Q    I have great concerns over your health bill.  One of the ladies in admissions over there whom I was talking with the other week, started -- she’s from England, and her family is still in England.

THE PRESIDENT:  Right.

Q    And she was explaining to us how -- telling us what we had to look forward to here.  Her sister worked as a nurse in the same hospital for 20 years.  She was 55.  She was told she needed open-heart surgery.  She was put on a 10-year waiting list.  Three years later, she had a major heart attack and they were forced to give her that surgery that she needed.

I realize you’re saying the 26-year-olds will have health insurance -- they don’t have to worry about that.  My mother always told me the older you get, the faster time goes.  And when she said that to me years back, I thought she was crazy.

THE PRESIDENT:  Yes, I’ve noticed this, too.  (Laughter.)

Q    Yes.  And these 26-year-olds in a heartbeat are going to be 50, 55.  When you’re young, you’re supposed to be able to work hard for what you want.  You build up your income.  You further yourself so you can retire and have peace of mind.  It’s hard to -- I can’t fathom now how can you be excited in your youth when you have to save, save, save just to protect yourself health insurance-wise when you reach our age.

THE PRESIDENT:  Let me ask you a question, though.  I mean, because you said you’re worried about my health reform bill, and the nurse said, here’s what you have to look forward to.  Is your mom on Medicare?

Q    Yes.

THE PRESIDENT:  So there’s nothing in our health reform bill that is going to impact whether your mom can get heart surgery if she needed it.  We didn’t change the core Medicare program.  So unless there’s something specific that you’re worried about --

Q    Medicare doesn’t start until you’re 65.

THE PRESIDENT:  No, no, I understand.

Q    I’m talking about 50, 55 years old. 

THE PRESIDENT:  All right, so if you’re not on Medicare --

Q    Yes, right.

THE PRESIDENT:  And do you have health insurance?

Q    Yes.  Right now, yes.

THE PRESIDENT:  So there’s nothing in the bill that says you have to change the health insurance that you’ve got right now.  I just want to identify what your worry is, because I want to say you shouldn’t be worried about it.  But what is it that you think might happen to your health insurance as a consequence of health care reform?

Q    Okay, what I’m concerned about is say if my -- just say if my husband got laid off.  Say we had no health care.

THE PRESIDENT:  You had no health insurance, okay?  Now, right now before reform, if you had no health insurance, you’d just be out of luck, okay?

Q    And then we’d get the government-run health insurance, right?  Is that what you’re saying?

THE PRESIDENT:  No, here’s the way it would work.  So let me just kind of map it out for you.  If you are already getting health insurance on your job, then that doesn’t change.  Health insurance reform was passed six months ago.  I don’t know if anybody here has gotten a letter from their employer saying you now have to go into government-run health care because we can’t provide you health insurance anymore.  I mean, that hasn’t happened, right?

So you’re keeping the health insurance that you had through your job.  And the majority of people still get health insurance through your job. 

The only changes we’ve made on people’s health insurance who already have it was to make it a little more secure by saying there are certain things insurance companies can’t do -- a patient’s bill of rights, basically.

So insurance companies can no longer drop your coverage when you get sick, which was happening.  Sometimes there were some insurance companies who were going through your policy when you got sick to see if you had filled out the form wrong, you hadn’t listed some infection that they might call a preexisting condition, et cetera -- a bunch of fine print that led to people not having health insurance.  So that was one thing that we said. 

We said also you can keep kids on your health insurance till they’re 26; that children with preexisting conditions had to be covered under health insurance.

So there were a handful of things that we said insurance companies have to do, just as good business practices to protect consumers.  But otherwise you can stay on your employer’s health care.  So that’s if you have health insurance.

The other thing that we did was we said if you’re a lot of people who don’t have health insurance, it’s because they work for small businesses, who have trouble affording health insurance, because they’re not part of a big pool -- they’re not like a big company that has thousands of employees and they can negotiate because the insurance companies really want their business -- so what we said was let’s provide tax breaks to small businesses so they can -- they’re more likely to buy health insurance for their employees.  And right now about 4 million businesses across the country are now getting a tax break, a tax credit, if they provide health insurance for their employees, that can save them tens of thousands of dollars.  So that’s the second thing.

And the third thing we said was, okay, if you don’t have health insurance -- let’s just say your job doesn’t offer you health insurance, or you lose your job -- then what we’re going to set up is what’s called an exchange, which is basically a big pool -- you become part of this big group of people, just like as if you were working for a big company or a big university like Drake.  You become part of this pool, and you’ll be able to buy your own insurance through this pool, but the rates will be lower and you’ll get a better deal because you’ve got the bargaining power of these thousands or millions of people who you’re buying it with.  You’ll still have a choice of plans.  You’ll have a choice of BlueCross or you’ll have a choice of this plan or that plan, but you’ll be buying it through a pool.  And if you can’t afford it, then we’ll provide you some subsidies to see if we can help you buy it, so make it affordable.

So that’s essentially what health reform is about.  Now, what that means is, is that you’re not going to be forced to buy a “government-run” health care plan.  The only thing that we have said is, is that if you can afford to get health care and you’re not getting health care, well, that’s a problem because that means when you get sick and you have to go the emergency room, everybody else here has to pay for it.  And that’s not fair.

So we’ve said if you can afford to get health care, we’re going to make sure that you can afford it, but you’ve got to have some basic coverage so that we’re not subsidizing -- everybody else isn’t paying an extra thousand dollars on their premiums to cover you.

Q    All right.  We’re all -- we all agree health -- there needs to be health reform, okay?  We just moved out here a year ago from Las Vegas, okay?  There are illegal immigrants that are getting free health care right now, okay?  The doctor that we had, clinics and stuff, closed up because they couldn’t even afford to stay open because of all the illegal immigrants that were getting health care.

THE PRESIDENT:  Well, let me do this because -- I’ll answer this question and then I want to make sure everybody else gets a chance, too.  But the -- no, I think this is important for me to be able to clear up some stuff.  There’s no doubt that there are probably a number of hospitals in every major city, doctors in every major city, who are providing uncompensated care to a whole lot of people, including some illegal immigrants.

Basically most doctors and nurses that I meet, their whole reason for being in the profession is to help people.  And so if they see somebody coming into the emergency room, if there’s some child who is badly injured or sick, they’re going to not check on their immigrant status, they’re going to say this is somebody who needs help.

And I think that’s the right thing to do for our society generally.  I don’t -- I think it is very important for us to make sure that we have compassion as part of our national character.  (Applause.)

Now, the thing I want to point out, though, is, is that, first of all, there’s nothing in my health care plan that covers undocumented workers, right?  So that’s not part of health reform. 

And the second thing is, it turns out actually illegal immigrants probably under-utilize the health care system.  The only time they go to the health care system is if they have an emergency, because for the most part they’re worried about getting caught. 

So that’s not to say that there’s not a portion of that population that is getting uncompensated care that’s adding to our costs.  But there are a lot more Americans who don’t have health insurance, as a consequence don’t get regular checkups, aren’t getting preventive care, are more likely to end up in the emergency room, are more likely to add to the cost of the hospitals or the doctors. 

And so if we can provide them with basic checkups, basic preventive care, affordable health care so they’ve got some peace of mind, that will actually over time make the system more efficient as a whole, because emergency room care is the most expensive kind of care. 

But I guess the main message I just want to communicate -- because there was a lot of misinformation during the health care debate -- I just want to communicate that if you’re happy with what you’ve got, nobody is changing it.  And you and your mom are going to be able to have -- your mom is going to have her Medicare and -- the core benefits of Medicare aren’t changing.  And if you’ve got health care through your employer, that’s not going to change, except to make it a little bit safer and more secure. 

If you don’t have health care, then it’s just going to help.  And overall, independent estimates say that this is not going to add to our deficit; it’s actually going to reduce our deficit because we’re making the health care system more efficient over time.

But I understand why people are concerned, because this is a very personal thing, and nothing is scarier than when you don’t have health care and you’re sick.

I’ve told the story of when Sasha was three months old, she got meningitis.  And I still remember going to the hospital.  And she had to get a spinal tap, and I never felt so helpless and scared in my life.  And I was lucky to have health insurance, but we were in the emergency room looking around and thinking, well, what if I was one of these other parents who didn’t have it and my daughter was going through this.

And I was thinking I’m going to get a $20,000 or $30,000 bill after this and I have no way of paying for it. Or what if my child has a chronic illness?  And so it’s not just a one-time trip, but it’s trip after trip.  And I don’t think any parent should have to go through that, not in a society as rich as ours, so -- but thank you for the question.  It’s helpful.

Yes, sir.  Got a mic right behind you.

Q    President Obama, first, thanks for allowing us the opportunity to meet with you here in Iowa.

THE PRESIDENT:  You bet.

Q    Especially since I’m a Drake graduate, I’m especially thrilled to be here -- it’s like testing my education, my graduate degree at least.

Anyways, I moved here from Chicago about 30 years ago.

THE PRESIDENT:  You still got a little --

Q    It’s a nice town.

THE PRESIDENT:  You still got a little Chicago in you.

Q    Yes, it’s still going to be there.  I won’t argue with you on anything.  But I think the reason I stayed here was it was a wonderful place to start a business.  I got a Master’s here and I started a small business with $200 and a big dream.  And I was 25 years old.

I’m 53 now.  I’ve been in business 28 years.  We went from what was myself to now almost 100 and some employees and about 200,000 square foot of manufacturing.

THE PRESIDENT:  That’s -- what kind of business is it?

Q    We manufacture promotional products, and we actually make those bag signs you see in all the political yards.

THE PRESIDENT:  Right, right.

Q    We do all the printed T-shirts for every Juvenile Diabetes walk.

THE PRESIDENT:  That’s great.

Q    And the beauty of my background is I actually came from a medical background.  My father, my father-in-law, my brother, my brother-in-law -- everybody is a doctor, all in Chicago.  So I was supposed to be a doctor, but I came here and I said, well, you know, I sort of like business, I like making deals.  So we got started in business, and we started out as an ad agency.  And I guess as we got into it, we realized that the key thing is to have a product to sell so you could sell truckloads of something rather than just sell one thing at a time.  And so we did wholesale the way most people would like to do wholesale.  And part of that meant importing, it meant trips to China 25 years ago, and it meant 25 years of growing the business.

I always hear -- I’m never confrontational, I’m sure everybody here will tell you that -- but I always hear that we’re trying not to tax anybody but the people that make over that $250,000, that elitist 2 percent.  Any viable, strong competitive business -- and the name of our business is “Competitive Edge,” 30 years ago, before CNN ever used it as a term -- the hope is that you’re supposed to grow profitability so you can grow your business.

When I went in as a young man of 25 and said, “How about a bank loan?”  There was a bank right across the street, and they really weren’t interested in myself unless I was buying a boat or a car and I was going to make payments.  They didn’t understand the business.

Twenty-five years go by very quickly, unfortunately, and you find yourself looking around, proud of what you’ve built, but at the same time realizing there are new threats that besides what unfortunately you have to deal with on your plate, on a macro level, which is mindboggling, we each have our own little niche. 

We also pay that health insurance for our employees.  Always did.  I remember paying for an employee who said, “What are my benefits?”  I said, you’re going to get health insurance, you’re going to get a profit-sharing possibility here, you’re going to be able to grow with us.  And the goal was, lock up the person, because you don’t want people changing jobs. 

That insurance for that individual was $32 -- $32 a month, and I more than happily picked that up.  Today that amount is like $500.  They don’t even get the same level of service.  They get all generics, they don’t get the products, they don’t get anything.

I guess what my commentary comes down to is, as the government gets more and more involved in business and gets more involved in taxes to pay for an awful lot of programs, what you’re finding is you’re strangling those job-creation vehicles that are available -- you’re sort of strangling the engine that does create the jobs.  We have jobs that we offer, I mean, regularly.  There’s always an opportunity for somebody that wants to work hard.  I don’t care what the background is.  I don’t care what the health level, what the education is, or where they came from. 

But the fundamentals are profit.  Two hundred and fifty thousand dollars -- well, if you’re two people and a family, that’s not a lot.  It seems like a lot, but not when you have the family, the kids, the cars, the college, and all the other things that go -- plus you have to grow the engine.  You have to grow it to continue to provide more jobs and to create the dream.

Yes, there’s a lot of wealth, but it’s trapped in the buildings, the 200,000 square feet.  It’s trapped in millions of dollars in inventory.  It’s trapped in accounts receivable, which can run millions of dollars.  People that are saying, you know, I don’t have it right now, I can’t pay yet -- but the government comes along every quarter and the tax checks do go out on imaginary profits that you hope you won’t write off as bad debts a year later; on things that really from my perspective are the thrills of owning a small business, you know, having the whole plate on a micro level that you would have and having to constantly keep the balls in the air.

One of the things that concerns me is that repeal the Bush “tax cuts.”  The repeal, I don’t care if it’s 5 percent -- that’s 5 percent that would create a job.  Five percent on millions of dollars of profit creates many jobs.  Nobody is putting it in their pocket on a corporate level.  They can sit with their piles of cash.  But on a small business level, which is the essence of this country and it is the foreign ambassador for countries around the world to meet us, when I go to China and I spend all my time, I have a one-on-one relationship. 

I sent an email out to all the people we do business with and I go, do you have any questions for our President?  If I’m blessed and I have the opportunity to spend the four hours under the trees, I’d like to present your arguments.  First one was, from China, why are you pressuring them for the renminbi?   Why are you pressuring --

THE PRESIDENT:  All right, we’re going way afield now.  I mean, the -- so let me focus on your question --

Q    -- the job creation --

THE PRESIDENT:  -- and I’ll be happy to talk about it.  And then if you want I can tell you, if you’re making an argument on behalf of China about their currency, I’m happy to make that argument -- to push back on that.  But let me focus on the issue you raised about your business. 

And first of all, I’m thrilled that you’ve been able to build this success.  I have signed eight small business tax cuts since I came into office.  And the package that we signed this week cut taxes in eight more ways.  So your taxes haven’t gone up in this administration.  Your taxes have gone down in this administration.  (Applause.) 

So I just want to be clear about this, because this is something that I know a lot of times there’s -- I just think the notion that, well, he’s a Democrat, so your taxes must have gone up -- well, that’s just not true.  Taxes have gone down for you, the small businessperson and, by the way, for 95 percent of working families.  That was part of the Recovery Act was reducing people’s taxes.

Now, with respect to the debate that’s now taking place on the Bush tax cuts, keep in mind that what we’ve proposed is to extend the Bush tax cuts for all income up to $250,000.  So it’s not just sort of the person who is making $60,000 who would get a tax break or who is making $100,000 who would make a tax break -- who would get a tax break.  If you’re making $300,000, you’d still get a tax break on the first $250,000 worth of income.  You’d pay a slightly higher rate on the $50,000 above that.  If you make half a million dollars, you’d still be having tax relief on the first half of your income.  On the other half above $250,000, you’d have a slightly higher rate -- a rate, by the way, that is back to the level it was under Bill Clinton, at a time when there were a lot of small businesses and, in fact, the economy was doing much better.

The reason I think it’s important for us to do this is not because I’m not sympathetic to small businesses.  It has to do with the fact that 98 percent -- 98 percent of small businesses actually have a profit of less than $250,000.  So it’s not just individuals who generally don’t make that much money; most small businesses don’t make that much money, either.  But it costs $700 billion. 

And so I’ve got to figure out, well, how do I pay for $700 billion?  Because everybody is also concerned that our deficit is out of control.  So then folks will say, well, let’s cut government spending.

Well, most government spending is Medicare, Medicaid, veterans funding, defense.  When people look at the budget a lot of times they say, well, why don’t you just cut out foreign aid, for example?  Foreign aid is 1 percent of our budget -- not 25 percent, it’s 1 percent.

People say, well, why don’t you eliminate all those earmarks, all those pork projects that members of Congress are getting out there?  Now, I actually think that a lot of that stuff needs to end, but even if I eliminated every single earmark, pork project by members of Congress, that’s 1 percent of the budget.  So finding $700 billion is not easy.

And when we borrow $700 billion, we’re adding to our deficit and debt, and then we’ve got to pay interest to China or whoever else is willing to buy our debt. 

So these are the choices -- so it’s not that when it comes to small businesses, or big businesses, that I have any interest in raising taxes.  I’d like to keep taxes low so that you can create more jobs.  But I also have to make sure that we are paying our bills and that we’re not adding -- putting off debt for the future generation.

And that’s what happened in the Bush tax cuts in 2001 and 2003.  We lopped off taxes, and we did not pay for it.  And that is the single largest contributor to the debt and the deficit.  It’s not anything that we did last year in emergency spending.  It’s not the auto bailout.  It’s not the health care bill.  That’s not what’s added to our deficit.  The single biggest reason that we went from a surplus under Bill Clinton to a deficit of record levels when I walked into office had to do with these Bush tax cuts, because they weren’t paid for and we didn’t cut anything to match them up. 

So I think that to say to the top 2 percent of businesses -- which, by the way, includes hedge fund managers who have set up an S corporation but are pulling down a billion dollars a year but they’re still considered a small business under the criteria that are set up there, that to say to them, you’ve got to pay a modestly higher amount to help make sure that our budget over time gets balanced -- I think that’s a fair thing to do.

And I think -- when I talk to a lot of businesses, they just don’t want super high rates of the sort that existed before Ronald Reagan came into office.  And I’m very sympathetic to that.  And on capital gains and dividends, for example, we want to keep those relatively level.  We don’t want -- I would like to see a lower corporate tax rate.  But the way to do that is to eliminate all the loopholes, because right now on paper we’ve got a high corporate tax rate.  But in terms of what people actually pay, they’ve got so many loopholes that they’ve larded up in the tax code, that effectively they pay very low rates.

So this is a challenge.  But I want to do everything I can to make sure that your business succeeds. 

I will say the reason that I’m pushing China about their currency is because their currency is undervalued.  And that effectively means that goods that they sell here cost about 10 percent less and goods that we try to sell there cost about 10 percent -- let me not say 10 percent, because I don’t want the financial markets to think I’ve got a particular -- there is a range of estimates.  But I think people generally think that they are managing their currency in ways that make our goods more expensive to sell and their goods cheaper to sell here.  And that contributes -- that’s not the main reason for our trade imbalance, but it’s a contributing factor to our trade imbalance.

All right.  Over here. 

Q    Thank you.  Good morning, Mr. President.

THE PRESIDENT:  Good morning. 

Q    I’m a proud Iowa social worker who works with crime victims.  And my question is about the poverty rate.  We currently have a rate of 14 percent poverty.  That’s one out of seven people are in poverty.  And I believe that that’s the highest rate since the 1960s.  And there’s a lot of reasons why people go into poverty who weren’t in poverty before, things like medical emergencies and losing jobs, being a crime victim and, especially for women, a divorce.

My question is, what are we going to do -- I guess, more specifically, what are you going to do -- (laughter) -- to help one out of six or seven people get out of poverty?

THE PRESIDENT:  It’s a profound question.  The poverty rate I think is the highest it’s been in 15 years.  It’s still significantly lower than it was back in the 1960s, but it’s -- look, it’s unacceptably high.

The single most important thing I can do to drive the poverty rate down is to grow the economy.  What has really increased poverty is folks losing their jobs and being much more vulnerable.  So everything we can do to provide tax breaks for small businesses that are starting up, to make sure that we are encouraging -- for example, trying to accelerate investment in plants and equipment this year, and letting people write it off more quickly so that companies that are on the sidelines that are thinking about investing, they say, you know what, why don’t we go ahead and take the plunge now and start hiring now, instead of later -- all that can make a big difference in terms of growing the economy, reducing the unemployment rate.  That’ll reduce the poverty rate.

The second most powerful thing I can do to reduce the poverty rate is improve our education system because the single biggest indicator of poverty is whether or not you graduated from high school and you’re able to get some sort of post-secondary education.  And right now too many of our schools are failing.

So this week we spent a lot of time talking about the education reforms we’ve already initiated.  As I said, we set up something called Race to the Top.  And it was a simple idea.  The federal government sends education dollars to schools all across the country to help them, particularly poorer schools. 

But what we said is we’re going to take a portion of that money -- $4 billion -- and we’re going to say to the states, you’re going to have a competition for this money.  You’re not automatically going to get it because of some formula.  You’ve got to show us that you are initiating reforms that are going to recruit better teachers and train them more effectively; that are going to have greater accountability measures so you’re able to track how students are doing during the course of the school year and make adjustments so that they’re not just being passed along from grade to grade even though they can’t read or do arithmetic at their grade level.  We’re going to encourage more charter schools and more experiments in learning across the country. 

All these reform efforts that we triggered through this competition have meant that 32 states actually changed their laws.  It’s probably the biggest set of reforms that we’ve seen nationwide on public education in a generation.

Then what we’re trying to do is make sure that we’re working with community colleges and ensuring that they are providing a great pathway for young people who do graduate from high school.  They may not go to four-year colleges right away, but the community college system can be just a terrific gateway for folks to get skills.  Some start at a community college and then go on to four-year colleges.  Some just get technical training, get a job and then come back maybe five years later to upgrade their skills or adapt them to a new business.

So we’re putting a lot of resources and effort into making sure that community colleges are constantly improving, and they’re adapting their curriculum to the jobs of the future.  So education and growing the economy generally, those are the most important things I can do for poverty.

Now, there are other things like, for example, health reform so that people don’t lose their homes if they get sick that will help keep people out of poverty; making sure that we’re dealing with domestic violence, which can have an impact on women that then drives them out of homes and puts them into difficult situations; dealing with our veterans so that if they’ve got post-traumatic stress disorder, we are treating them quickly before it compounds itself and eventually they end up on the streets and it’s very hard for them then to get back on their feet.

Those are all things that are important, and we’re going to keep on doing them.  But if we can grow this economy and improve our education system, that’s going to be the most important thing we can do. 

I’m getting the signal -- one more question.  Okay.

I’m going to have to call on the guy with the collar.  What can I do?  (Laughter and applause.)  I didn’t mean to outrank you here, but --

Q    Sorry, Matt.  (Laughter.)  Mr. President, Father Michael Amadeo, pastor of Holy Trinity Catholic Church here in Beaverdale, as well as the school that in 2008 was recipient of the Department of Education’s Blue Ribbon Award.

THE PRESIDENT:  Congratulations.  Congratulations.

Q    So thank you for being here.  (Applause.)

THE PRESIDENT:  Congratulations.  (Applause.)

Q    Secondly, thank you for your leadership.  These are very tough economic times, tough times for our country, in regards to men and women being deployed. 

My question for you comes from a member of my congregation who is 55 years of age, has a wife, two children who are freshmen in high school.  A year ago he lost his job in manufacturing.  He’s been unemployed now for a year plus.  What will your economic policies do for him within the next year, and hopefully to be able to secure a job and have that American Dream again, which has now been lost?

THE PRESIDENT:  Well, obviously that story is duplicated all across the country, and I get letters -- I get about 40,000 letters or emails from constituents across the country every single day.  And my staff selects out about 10 of them for me to read each night, sort of a representative sampling.

I know this is a representative sampling because about half the letters call me an idiot -- (laughter) -- so they’re not screening them out.  (Laughter.)  But a bunch of those letters talk about “I’m 50 years old, I’ve worked hard all my life, I’ve looked after my family, the plant closed, or the office shut down, and it’s very hard for me now to find work.  The jobs that are available pay 20, 30 percent less than what I was making before.”

Sometimes the parents write about them feeling ashamed that they can’t provide for their kids the way they wanted to. 

Sometimes I get letters from kids who aren’t at all ashamed of their parents.  They love their parents.  They’re proud of them.  But they know that their parents are feeling bad.  And so they write to me saying, “I wish you could just do something, because my dad or my mom, they look like they’re losing hope and they’re lost, and I feel bad.”

So what you’re hearing is what a lot of folks are going through all across the country.  And I think -- I’ve spoken generally about what we can do long term for our economic competitiveness.  There are some things that we’re doing immediately to try to improve the business climate.  So as I already mentioned, trying to get businesses who actually have a lot of cash -- they’re making profits now -- to invest those profits now as opposed to sitting on the sidelines or holding them.

And in plants and equipment and research and development, we’re trying to change sort of the incentive structures and the tax codes to spur on additional business investment. 

If the member of your congregation, your parishioner, was in manufacturing, one of the things that we think holds a lot of promise is the whole clean energy sector, because some of the manufacturing jobs that have been lost just won’t come back, partly because manufacturing has become much more efficient.

I mean, a lot of people think that the reason manufacturing has gone down so fast is because all these jobs have been shipped overseas.  Well, that’s a contributing factor.  There’s no doubt China took a lot of our manufacturing jobs; prior to that, Mexico.  Next will be Vietnam or Malaysia or other countries, just because their wages are much lower.

But -- and frankly, it’s also because sometimes our trade deals weren’t enforced very well.  And one of the things that I’m saying is I believe in free trade.  I think that it can grow our economy.  We already heard from a businessman who is involved in international trade.  But I think it is very important to make sure that trade is fair and that each side is being treated equally.  And right now, that’s not always the case.

But it turns out that a lot of manufacturing has declined, just because it’s gotten so much more efficient.  You go into a steel plant now that used to take 10 folks to put out one unit of steel; now you need one person with a computer.  When you go into just about any manufacturing plant these days, so much of it is automated.  You’ve got these robot arms and it’s all clean and pristine and it’s just -- it’s a different type of industry now.  So that’s where a lot of jobs have been lost.

But here’s the good news.  The clean energy sector I think is going to be a huge growth sector.  And what we did during the Recovery Act was we invested in companies, including companies here in Iowa.  I was out at a wind farm -- where was that?  Out in Fort Madison, Siemens -- where you go here and what was just a shut-down factory, they’ve reopened.  They’re building the blades for these massive windmills.  And they had just hired several hundred people and were looking at hiring several hundred more because they are seeing some certainty in the renewable energy industry.

And so they had actually hired a lot of folks who were coming off traditional manufacturing industries, applying their new skills to these new jobs.

The same is happening in advanced battery manufacturing.  I don’t know how many people here have a hybrid car -- you’ve got a couple of folks.  It turns out that we weren’t making the batteries that are going into these hybrid and electric cars; they were all being made elsewhere.  We had about 2 percent of the market.

So as part of the Recovery Act what we said was, let’s invest in creating our own homegrown advanced battery manufacturing.  And we’re on track now by 2015 to have 40 percent of the market.  (Applause.) 

And we were in Michigan, looking at one of these plants.  A lot of the folks who were there are folks who used to work as suppliers for the auto industry.  They had gotten laid off, and now they’re back helping to build what will be the cars of the future.  These advanced batteries that they’re building are going into the Chevy Volt, which is a American-built clean energy car, a car of the future.

So there are still going to be opportunities for skilled tradesmen, people who’ve worked in manufacturing, but it’s not going to be in just these massive factories of the 1950s.  It’s going to be in these new factories focusing on new industries, and this is where innovation and research and development is so important.

The one thing that’s going to happen, though, is, is that parishioner is going to need probably to update some of their skills, because as I said, the fact that they know manufacturing, they know machines and tools -- all that is going to be helpful, but they’re also probably going to need to work a computer better.  They’re going to need to know how to diagnose a big, complicated system, looking at a flat screen inside the factory as opposed to tooling around and opening things up to see what’s going on.  And that may require some retraining.  And that’s again why the community college system can be so important.

A lot of folks at the age of 50, they don’t need two years of education, but they may need six months where they’re able to retool and get some help paying the bills and making the mortgage while they are retooling.  And those are the kinds of programs that I think we need to set up.

Well, listen, this has been terrific.  I am so grateful to all of you for taking the time to be here.  As I listen to the questions, it’s a good reminder we’ve got a long way to go. 

But I do want everybody to feel encouraged about our future.  This goes to the first question that was asked about the next generation.  America is still the wealthiest country on earth.  We have the best colleges and universities on earth.  It still has the most dynamic entrepreneurial culture on earth.  We’ve got the most productive workers of just about any advanced nation.  We still have huge advantages, and people -- billions of people around the world would still love the chance to be here.  (Applause.)  

And so I don’t want anybody to forget that we’ve been through tougher times before, and we’re going to get through these times.  But typically, when we’ve gotten through tough times, it’s because we all buckled down and we refocused and we came together and we made some tough but necessary adjustments and changes in how we approach the future.  And I’m confident we’re going to do that again.

But it’s going to happen not just because of me, the President.  It’s going to happen because of individual small businesses.  It’s going to happen because of what’s happening in congregations.  It’s going to happen because of what young people are doing -- thinking about their future and how they’re applying themselves to their studies.

All of us are going to have to be pulling together and refocusing on the future and not just the present.  If we do that, we’re going to do fine. 

So thank you very much, everybody.  Appreciate it.  (Applause.)

END
11:22 A.M. CDT

Remarks by the President in a Backyard Discussion in Albuquerque, New Mexico

Cavalier Residence
Albuquerque, New Mexico

10:09 A.M. MDT

THE PRESIDENT: I just want to thank Andy and Etta for hosting us here today. Can everybody hear me? There we go. I want to thank Andy and Etta for hosting us today because not only did they open up their home to all these Secret Service people and all these press and the whole bit, but they also arranged for perfect weather. (Laughter.) I know Bill Richardson tried to take credit for it, but it was actually Andy and Etta that did it. And so we are very grateful to them for their hospitality here today. And obviously we’re extraordinarily grateful to Andy for his service in the Marine Corps, and for Etta, doing what she’s doing in our school system. And so thank you very much.

Everybody knows your governor, Bill Richardson, and we are grateful to him. (Applause.) Your lieutenant governor, Diane Denish, who is I believe going to be also the next governor of the great state of New Mexico. (Applause.) We’ve got Congressman Martin Heinrich, and I will say that Martin told me that if I was going to come to Albuquerque that I better visit the South Valley the next time I come. So he gets some credit for bringing me here today. (Applause.)

And to all of you, thank you so much for being here. We’ve been trying to do more of these, A, just to get me out of the house. It’s a very nice house that they provide for me in Washington, but at times you do feel like you’re in the bubble. And so every once in a while, I need to just get out of there and have a chance to talk to folks and listen to them and answer questions, but also get suggestions and advice about what’s happening in the country.

And so instead of doing all the talking, what I want to do is maybe just provide a few opening remarks and then basically have a conversation with you about things that are important to you and important to this community, important to this state. There is one thing I want to focus on, though, if you don’t mind in my opening remarks, and that’s the issue of education. We have gone through obviously the toughest economic situation since the Great Depression, and no state has been untouched, no group of people has been untouched by the devastation. We lost 8 million jobs. The financial sector almost completely melted down. We almost slipped into a Great Depression. And so we acted very quickly to try to stop the bleeding.

And we’ve had some success. An economy that was shrinking, was contracting by 6 percent when I was sworn in, is now growing again. We were losing 750,000 jobs a month when I was sworn in. We’ve had eight consecutive months of private sector job growth.

So we’re making progress and we’re moving in the right direction, but in addition to the immediate crisis that we were dealing with, one of the challenges that I think everybody around the country when I talk to them recognizes is we’ve got to have a long-term plan for how we make sure America remains the number one economy in the world and how we make sure that we still have opportunities for middle-class Americans to prosper and to expand, to be able to support their families and send their kids to college and retire with dignity and respect; and how do we provide ladders for people who aren’t yet in the middle class to be able to get into the middle class; how do we help small businesses grow; how do we help make sure that our large businesses are the innovators that are designing the new products that we’re able to sell overseas.

The issue of how we stay competitive and are able to succeed in the next generation the same way that previous generations have succeeded, that’s a question that I think a lot of people have been asking themselves for a long time.

Because keep in mind, even before this financial crisis, we were slipping in a lot of ways. From 2001 to 2009, during that eight-year period, wages -- average wages for middle-class families actually fell by 5 percent. Think about that. People’s real incomes were actually falling -- and this was at a time before the crisis. So supposedly, the economy was growing and things were going pretty well. In fact, people’s incomes were falling.

During that same period of time, job growth was the most sluggish that it’s been since World War II. So part of the reason I decided to run for President was because we had all these problems that we hadn’t been dealing with for a long time, even before the crisis hit, that we had to deal with -- if we want to stay competitive for the 21st century. And the number one issue in terms of us succeeding as an economy is going to be how well we educate and how well we train our kids. Nothing else comes close.

Now, the truth of the matter is, we used to have by far the best education system in the world. We were the first nation in the world to have compulsory public education. And so as people were moving off the farms, moving into the cities, moving into industry, suddenly they were able to get the training and the skills they needed for an advanced industrial economy.

And we had the best universities in the world, and the best colleges in the world, and we had the number one -- we ranked number one in the proportion of college graduates in the world. We now rank 12th -- and that’s just happened in a generation. We went from number one to number 12 in the number of college graduates we have.

Even folks who didn’t go to college still got a good education. My grandmother, she was an amazing woman. She passed away a couple of years ago. But she never went to college. She worked -- when my grandfather went off to World War II, she worked on an assembly line, making bombers. She was like Rosie the Riveter. And then when my grandfather came back, he got the GI Bill to go to college, but she didn’t get the GI Bill, so she went to work. She started off as a secretary; she ended up as a vice president at a bank in Hawaii.

And despite the fact that she hadn’t gone to college, she was so well prepared, in terms of math and reading and skills, that she could end up getting an executive position, working her way up from being a secretary.

Well, now we rank 21st in science education in the world, and we rank 25th in math education in the world. So the trendline is that we’re not at the top in terms of college graduates, we’re not at the top at science, we’re not at the top at math. We’ve got a third of our students who enroll who never graduate from high school. And all this means that not only is it bad for the young people who aren’t getting this education -- typically a high school grad gets paid about $10,000 less than a college grad, and over the course of a lifetime it means hundreds of thousand dollars in lost income -- but it’s also bad for the country as a whole because we don’t have as many engineers, we don’t have as many scientists, we’re not inventing the new products that are going to make all the difference in terms of how well we succeed.

So the reason I want to raise this is because there are a lot of issues we’ve been working on in Washington, a lot of them get a lot of attention, but something that hasn’t gotten as much attention is what we’ve been trying to do, working with states and local school districts over the last two years to make sure that we’re moving in a new direction in improving our education system.

Let me just tell you a couple of things that we’ve done.

First of all, we set up something called Race to the Top. And what we said was that if states wanted to get some additional money, some extra money to help their schools, they would have to compete for that money by showing us what it is that you’re doing to reform the school system so that you get excellent teachers, you have high standards, the schools are accountable; that you’re going after the lowest-performing schools and not just sort of skimming off the top.

And as a consequence of this competition called Race to the Top -- we had about $4 billion -- we’ve ended up seeing 32 states change their laws to reform the system so that the whole education structure works better for our kids and makes it more accountable and we start providing better training and better recruitment for our teachers and more professional development and additional resources.

So it’s been a big boost for education all across the country. Moving forward on a reform agenda, it doesn’t just dictate to states, here’s how you have to do everything, but it says here’s some criteria for success; if you have a plan to match that, then we’re going to help you. So that’s number one.

Number two, we’ve been helping make sure that more young people get early childhood education, because the studies show that if kids are well prepared when they get to school, then they are much likely to do better. If they know their colors and their numbers and their letters and they know how to sit still -- I remember when Malia and Sasha were young; that was a key training point.

And so early childhood education, when it’s well designed, makes a big difference, and we’ve been doing that.

Third thing we’ve been doing is focusing on higher education. Now, it turns out that we’ve got -- the lottery scholarship program here in New Mexico is terrific, but we’ve got a whole lot of states all across the country and a lot of young people who still rely on Pell Grants and student loan programs in order to finance their overall education.

And what we’ve been able to do is when we came into office, tens of billions of dollars were going to banks and financial intermediaries who were essentially acting as middlemen for the student loan program, even though it was federally guaranteed. So they weren’t taking any risks, but it was passing through them and they would take -- they would skim off tens of billions of dollars of profit.

So we said, well, that doesn’t make any sense. Why don’t we just have the money go directly from the government to the student and we’ll save all that money. And now what we have, we’ve been able to save $60 billion that we’re putting in now to make sure that millions more young people across the country are able to get the student loans and the Pell Grants that they need. And starting in 2014, we’re actually going to be able to say to young people that you will never have to pay more than 10 percent of your income in repaying your student loans.

And if you go into public service, if you’re like Etta and you go into teaching, for example, after 10 years, whatever is remaining on your debt will be forgiven. So that will give young people a much better head start, because everybody here, if they haven’t experienced it personally, somebody in your family has finished college with huge amounts of debt that they’re having trouble repaying. I know Michelle and I did, too.

So there are a whole range of things that we’re trying to do, working with colleges, community colleges, universities to try to improve our education system. One of the things that I announced this week was we’re really going to focus on science and math, because that’s where our young people I think are falling the most behind. And we’ve made a commitment that we’re going to hire over the next couple of years 10,000 new science and math teachers. And we’re going to work with the schools to help redesign their math and science curriculums, so that we start boosting -- I want to get to the point where we’re number one in science and math.

And I also want to make sure, by the way, that that’s true for all students, because I’ll be honest with you, African American students, Latino students, we’re doing worse in science and math than the overall average. So America is the 21st and 25th, but if you actually looked at performance of Latino and African American students, it would be even lower. And that’s inexcusable because that’s fastest growing portion of our population. That’s our future. That’s our future workforce.

And so we’ve got to have the most skilled, most highly trained workers in the world. And this is what we’re going to be focusing on over the next couple of years.

Now, last point I’m going to make and then I’m just going to open it up, because I promised I wouldn’t give a long speech. This election coming up in November is going to offer a choice on a whole range of different issues. And this issue of education gives you a sense of the choice that I think Democrats are trying to make and the choice that the Republicans are trying to make. The Republicans recently put out what they call their Pledge to America. And it basically outlined what their priorities are.

Their number one economic priority is retaining $700 billion tax breaks to the wealthiest 2 percent of the country -- millionaires and billionaires mostly. We’d have to borrow the $700 billion because we don’t have it. We’ve got these deficits and debt. So we’d have to borrow the $700 billion from China or the Saudis or whoever is buying our debt, and then we’d pass off on average $100,000 check to people who are making a million dollars up to more than a billion dollars.

That’s their main economic plan. And when you ask them, well, how would you pay for some of this stuff, they don’t really have good answers. But one way they would pay for it is to cut back our education spending by 20 percent and eliminate about 200,000 Head Start programs and reduce student aid to go to college for about 8 million students.

That’s one of their answers. And I just have to say, look, China -- that’s not the decision they’re making about their education system and their kids. South Korea, that’s not the decision that they’re making about their kids.

I was in Shanghai and I talked to the mayor. He said, you know, teachers are the most respected professions, as much as doctors or engineers, and they’re paid to reflect how much we value them.

I was in South Korea, and I was talking to the President, having lunch, and he said, you know, my biggest problem in education is the parents are so demanding, they’re insisting that I ship in English -- people from the United States and other English-speaking countries because they want all their kids to learn English by the time they’re in third grade.

I mean, that’s the -- that’s their mindset. That’s the competition that they’re in. So they’re not cutting back on education, right when we know that that’s going to be the most important thing in determining our success over the long term. And we can’t either. And so I just want everybody to think about those kinds of issues as you go into the polling place in November: Who’s going to prioritize our young people to make sure they’ve got the skills they need to succeed over the long term? Nothing is going to be more important in terms of our long-term success.

All right? So, with that, let me just open it up to any comments or questions people may have about anything. I talked a lot about education, but people may have a whole bunch of different interests here, and I’d love to hear from you. And we’ve got mics so that everybody can hear your questions, okay?

Let’s start with this young lady right here. And introduce yourself again. Even though I got all your names, I’m getting older, so it’s harder to remember these things.

Q Good morning, Mr. President. Welcome to Albuquerque. And I have two questions for you this morning, if I may.

The first question has to do with the changing demographics here in our neighborhood as well as in the public school system. I grew up here in this neighborhood, I’m raising my own family here, I work at a local public school here. And I’ve seen over the years firsthand how recent immigrants have revitalized our local economy. They start small businesses, they hire locally, they live within the community. How do you envision a comprehension immigration reform as one measure towards America’s economic recovery and long-term vitality?

THE PRESIDENT: I have consistently, even before I was a presidential candidate, but when I was a U.S. senator and when I was running for U.S. senator, said that we have to move forward on comprehensive immigration reform. Bill Richardson and I have had a lot of conversations about this.

This is a nation of immigrants. It was built on immigrants -- immigrants from every corner of the globe who brought their talent and their drive and their energy to these shores because this was the land of opportunity. Now, we’re also a nation of laws so we’ve got to make sure that our immigration system is orderly and fair.

And so I think Americans have a legitimate concern if the way we’ve set up our immigration system and the way we are securing our borders is such where people just kind of come and go as they please, well, that means that folks who are waiting, whether it’s in Mexico City or in Nairobi, Kenya, or in Warsaw, Poland -- if they’re waiting there filling out their forms and doing everything legally and properly and it takes them five years or six years or 10 years before they’re finally here and made legal, well, it’s not fair to them if folks can just come and ignore those laws.

So what we -- I think is so important to do is for us to both be a nation of laws and affirm our immigrant traditions. And I think we can do that. So what I’ve said is, look, yes, let’s secure our borders; yes, let’s make sure that the legal immigration system is more fair and efficient than it is right now because if the waiting times were lessened then a lot of people would be more prone to go through a legal route than through an illegal route; let’s make sure that we’re cracking down on employers who are taking advantage of undocumented workers to not pay them overtime or not pay them minimum wage or not give them bathroom breaks; let’s make sure that we’re cracking down on employers to treat all workers fairly. And let’s provide a pathway to citizenship for those who are already here, understanding that they broke the law, so they’re going to have to pay a fine and pay back taxes and I think learn English, make sure that they don’t have a criminal record. There are some hoops that they’re going to have to jump through, but giving them a pathway is the right thing to do.

Now, unfortunately, right now this is getting demagogued. A lot of folks think it’s an easy way to score political points is by trying to act as if there’s a “them” and an “us,” instead of just an “us.” And I’m always suspicious of politics that is dividing people instead of bringing them together. I think now is the time for us to come together.

And I think that economically, immigrants can actually be a huge source of strength to the country. It’s one of our big advantages is we’ve got a younger population than Europe, for example, or Japan, because we welcome immigrants and they generally don’t. And that means that our economy is more vital and we’ve got more people in the workforce who are going to be out there working and starting businesses and supporting us when we’re retired, and making sure Social Security is solvent. All those things are important.

So this is a priority that I continue to have. Frankly, the problem I’ve had right now is that -- and I don’t want to get into sort of inside baseball by Washington. But basically the rules in the United States Senate have evolved so that if you don’t have 60 votes, you can’t get anything through the United States Senate right now. And several years ago, we had 11 Republican senators who were willing to vote for comprehensive immigration reform, including John McCain. They’ve all reversed themselves. I can’t get any of them to cooperate. And I don’t have 60 Democrats in the Senate.

And so we’re going to have to do this on a bipartisan basis. And my hope is, is that the Republicans who have said no and have seen their party I think use some unfortunate rhetoric around this issue, my hope is, is that they come back and say, you know, this is something that we can work on together to solve a problem instead of trying to score political points. Okay?

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

Q I work for the New Mexico VA health care system. My question is that, I think as an integral part of being Hispanic, being from here, home is very integral to that, and not only for Hispanics, for all New Mexicans, for all Americans. And yet I hear stories of my family members’ friends, veterans that I treat, of losing their homes due to this economy that we’ve been through or are going through. And I guess my question is, what are we doing to prevent people from losing their homes?

I know education is truly incredible -- it moves people beyond what we can ever expect -- but if we don’t have homes to go to, what good is the education?

THE PRESIDENT: Well, the housing crisis helped to trigger the financial crisis. And it’s a complicated story, but essentially what happened was, banks started seeing money in peddling what looked like these very low-interest-rate mortgages, no money down. Started peddling these things to folks. A lot of people didn’t read the fine print, where they had adjustable-rate mortgages or balloon payments, and they ended up being in situations where they were in homes that they couldn’t necessarily afford.

The banks made a whole bunch of money on all these mortgages that were being generated. But what happened was -- is that when the housing market started going down, then all these financial instruments that were built on a steady stream of payments for mortgages, they all went bust, and that helped to trigger the entire crisis.

So the housing issue has been at the heart of the economic crisis that we’re in right now. It is a big problem because part of what happened over the last several years is, is that we built more homes than we had families to absorb them. And what’s happened now is, is that housing values have declined around the country, in some places worse than others. In Nevada, in Arizona, they’ve been very badly hit. In New Mexico, I don’t think we had the same bubble, and so prices have not been as badly affected here. But overall across the country, housing lost a lot of value.

Now, this is a multitrillion-dollar market, so there’s no government program where we can just make sure that whoever is losing their home that we can just pick up the tab and make sure that they can pay. And frankly there are some people who really bought more home than they could afford, and they’d be better off renting, or they’re going to have to make adjustments in terms of their house.

What we have tried to do, though, is to make sure that people who had been making their payments regularly, who are meeting their responsibilities, if they could have a little bit of an adjustment with the banks, if some of the principal was reduced, if some of the interest was reduced on their mortgage payment, they could keep on making payments. The bank would be better off than if the home was foreclosed on, obviously they’d be better off, and as the housing market starts picking back up again -- which it will do over time, although not in the same trajectory as it used to, right; it’s going to be more much gradual -- then potentially the bank could recoup some of the money that it had lost by making the adjustments on the mortgages.

So we’ve set up a number of these mortgage modification programs that are out there. But I don’t want to lie to you -- we’ve probably had hundreds of thousands of people who’ve been helped by it. I think there have been a couple of million who’ve applied. But that doesn’t meet the entire need because this is such a huge housing market.

And what really is probably the most important thing I can do right now to keep people in their homes is to make sure the economy is growing so that they don’t feel job insecurity. That’s probably the thing that’s going to strengthen the housing market the most over the next couple of years. If we’ve got a growing economy, unemployment is gradually being reduced, then people are going to feel more confident; they’re going to be able to make their mortgage payments; new -- homeowners, people who are potentially buyers of homes, are going to say, you know what, I don’t mind entering the market because I think things have sort of bottomed out -- that starts lifting prices and that gets us on a virtuous cycle instead of a negative cycle.

But it’s going to take some time. We’re working our way out of overbuilding in the housing market, a lot of not very sensible financial arrangements in the housing market. And we’ve got to get back to sort of a traditional, more commonsense way of thinking about housing which is, if you want a house you got to save for a while. You got to wait until you have 20 percent down. You should go for a mortgage that you know you can afford. You’ve got to -- there shouldn’t be any surprises out there, right? That kind of traditional thinking about saving and thinking about the house not as something that is always going up 20 percent every year and you’re going to flip and take out home equity loans and all that -- we’ve got to have a different attitude, which reflects what you talked about, more of an attitude that this is your home. This is not just a way to make quick money.

Okay. Yes, sir. I know it’s a little warm in here, by the way, but --

Q You’re right, Mr. President, is it a little warm, but it’s all good.

THE PRESIDENT: It’s all good.

Q Yes, I want to thank you again, Mr. President, for coming to Albuquerque, New Mexico. I have several questions to ask you -- I’ll make them short and brief.

I am one of those persons that has been helped by that modification program on my house. And I want to say thank you because it has helped my family, and I’m one of the persons that it has helped. And I want to say thank you.

THE PRESIDENT: That’s great. I appreciate that.

Q It has helped me and my family.

THE PRESIDENT: I’m glad to hear that.

Q And it has helped several -- I mean, it has helped my family, I just don’t know how to say thank you.

Second question, we can’t always depend on government to help us as far as education is concerned. I do think -- my wife is a teacher in an elementary school -- it all has to start at home. We as parents have to educate our children on how to get educated. It starts at home. And I want to thank you for everything you’ve done for public education. Thank you again. But we all have to understand it kind of starts at home, as parents.

And the last question is, Mr. Obama, I am the president of the board of weatherization programs here in New Mexico. And I heard you did the same thing in Chicago. And I thank you. It’s a nonprofit organization that has helped a lot of New Mexicans here in New Mexico. The Central New Mexico Housing Corporation is a nonprofit organization helping lower-income people with their homes.

For example you had mentioned that a lot of people can’t afford to upgrade their homes, things that they need. Well, we are able to provide assistance through Washington, the state of New Mexico, and some other agencies to provide free assistance for a lot of elderly or people who are -- meet certain criteria. So I want to say thank you again for that weatherization program. It has helped a lot of New Mexicans, as myself, as mortgage modification, as a personal friend of yours, I want to say thank you because it has helped my family.

THE PRESIDENT: I appreciate that. The -- that’s --

Q It has helped me, thank you.

THE PRESIDENT: You’re welcome. And people sometimes ask, well, you know, boy, you’re working pretty hard and you got all these issues coming at you, and how do you sort of stay focused and sane? It’s hearing stories like yours, where if we did something that actually helps a family stay in their home or you meet a mom who says, my kid’s now getting health insurance and they weren’t getting it before, you feel a great satisfaction. And I know Diane and the Congressman and Bill all feel the same way about it. So it’s great to hear.

Let me just say something about the weatherization issue, which I think is so important. We’ve got to change how we use energy in this country. And I know that Bill has been committed to this; Diane is committed to continuing this enormous progress. New Mexico has been at the forefront in thinking about solar and wind.

One of the most important things that we can do is something that doesn’t require all kinds of new technology. It doesn’t require huge, fancy investments. It’s just making our buildings, our homes, our schools, our hospitals more energy efficient: putting up insulation, getting in new windows, caulking, getting a new energy-efficient HVAC system. These things, if we did it across the board across the country, it could not only drastically reduce people’s electricity bills, drastically reduce their heating bills, their air-conditioning bills, their gas bills, it could also go about a third of the way in solving the problems of climate change and the pollution that is causing the temperatures around the globe to get warmer.

So it’s an environmental win and it’s a pocketbook win. And it creates businesses, because you can have a whole bunch of mom-and-pop HVAC companies who suddenly they’re out there getting business retrofitting homes to make them energy efficient. And small businesses can grow into larger businesses, can grow into bigger businesses.

I met a business in Seattle, Washington, that started off as a small mom-and-pop plumbing operation. And they now have a thousand employees, and they’re ranked as one of the top 10 companies to work for in the state of Washington. They’ve got unionized tradesmen working alongside computer experts who diagram how the entire energy system of a school or a hospital works, and then they go in there and they redo it soup to nuts.

Now, we made a huge investment in the Recovery Act on this issue of clean energy and weatherization, but this is again an example of where there’s just a strong difference between the two parties. The other side, they really have not shown much of an interest in promoting this.

And the irony is, is that you can actually get your money back on this. A lot of homeowners would love to do it. They’d get their money back over time, it would pay for itself, but if you don’t have $5,000 upfront to do it, you can’t do it, even though you know you’d get the $5,000 back over the course of five years.

So a lot of these programs are designed to say, we’re just going to give you a loan upfront so that you can go ahead and do it, and as you then recoup your money, you can pay some of it back.

It is something that is smart to do. We’re seeing states start to implement it. But we’ve got to I think keep on pushing harder. The more we do this, the more efficient our economy as a whole is going to be, and that’s going to mean more growth and more jobs in the future.

So -- and by the way, the last point I’ll make, I can’t agree with you enough about the parent thing. I was on an interview with Matt Lauer yesterday, and they asked me about parents. I said, look, Malia and Sasha, as wonderful as they are, they are great students, but if Michelle and I weren’t supervising them, they’d come home, they’d turn on the TV and watch TV all night, or be on their computers, or talking to their friends. Right? So even in the White House, the key ingredient is parenting and just making sure your kids are focused on school. Teachers can help, but parents, they’ve got to get those kids started in the right direction.

All right.

Q Thank you.

THE PRESIDENT: Yes, right here.

Q Hello, Mr. President. Thank you for coming to the South Valley.

THE PRESIDENT: Yes, it’s great to be here.

Q It’s really a great opportunity, and I thank the Cavalier family for inviting me and my husband. I have three questions and they’re kind of hot topic questions and I’ll just --

THE PRESIDENT: All three of them?

Q All three of them. (Laughter.)

THE PRESIDENT: You didn’t slip in like sort of a easy, boring one in there with the --

Q No. (Laughter.)

THE PRESIDENT: All right, let’s hear them.

Q One of them is basically -- Mother Teresa answered it in an article and I was going to ask you the same because I loved her answer. The first one is: Why are you a Christian?

Second one is, there’s really no laws about the abortion law and when a woman can and can’t have an abortion, whether it’s two months or eight months, and what is your view on that?

And the third one -- it’s not as -- it is a hot topic but it’s literally a hot topic, and it’s about my husband’s chili peppers. (Laughter.) And that was my question: Would you please take some chili peppers home with you? One is a habanero.

THE PRESIDENT: I will definitely check out these chili peppers. I like spicy food to go with your spicy questions. (Laughter.)

Q Spicy.

THE PRESIDENT: You know, I’m a Christian by choice. My family didn’t -- frankly, they weren’t folks who went to church every week. And my mother was one of the most spiritual people I knew, but she didn’t raise me in the church.

So I came to my Christian faith later in life and it was because the precepts of Jesus Christ spoke to me in terms of the kind of life that I would want to lead -- being my brothers’ and sisters’ keeper, treating others as they would treat me.

And I think also understanding that Jesus Christ dying for my sins spoke to the humility we all have to have as human beings, that we’re sinful and we’re flawed and we make mistakes, and that we achieve salvation through the grace of God. But what we can do, as flawed as we are, is still see God in other people and do our best to help them find their own grace.

And so that’s what I strive to do. That’s what I pray to do every day. I think my public service is part of that effort to express my Christian faith. And it’s -- but the one thing I want to emphasize, having spoken about something that obviously relates to me very personally, as President of the United States, I’m also somebody who deeply believes that the -- part of the bedrock strength of this company is that it embraces people of many faiths and of no faith -- that this is a country that is still predominantly Christian. But we have Jews, Muslims, Hindus, atheists, agnostics, Buddhists, and that their own path to grace is one that we have to revere and respect as much as our own. And that’s part of what makes this country what it is.

Now, with respect to the abortion issue, I actually think -- I mean, there are laws both federal, state and constitutional that are in place. And I think that this is an area where I think Bill Clinton had the right formulation a couple of decades ago, which is abortion should be safe, legal, and rare. I think that it’s something that all of us should recognize is a difficult, sometimes -- oftentimes tragic situation that families are wrestling with.

I think the families and the women involved are the ones who should make the decision, not the government. But I do think actually that there are a whole host of laws on the books that after a certain period, the interests shift such that you can have some restrictions, for example, on late-term abortions, and appropriately so. So there is in fact a set of rules in place.

Now, people still argue about it and still deeply disagree about it. And that’s part of our -- that’s part of our democratic way.

All right, next. I want to make sure I get everybody in.

Q (Inaudible) as far as the mosque in New York. I’m a Christian, but we base our faith on free will. And that’s what we were founded on, was freedom. And I just -- I just thank you for taking a stand.

THE PRESIDENT: Well, I appreciate that. You’re exactly right. We were founded on freedom of religion. That’s how this country got started. That’s why people came here, because there were a bunch of other folks who said you can’t worship the way you want.

And we have to constantly I think reaffirm that tradition, even when it sometimes makes us uncomfortable. Yes.

Q Okay.

THE PRESIDENT: And I will try those chili peppers. (Laughter.)

Q Just like the rest of everyone, we appreciate you being here. It’s a big honor to have you here.

THE PRESIDENT: Thank you.

Q And I have three things also -- mine are simple, though -- kind of. (Laughter.)

First one is, I did a lot of research on you when you were running for President, and so, again, I appreciate you being here and you have come from the same place a lot of the rest of us have come from. We’ve worked our way to where we are now, and we’re working harder to get further high up. So that’s one thing -- easy.

Second thing is, I did take my son -- as I said, we did a lot of research on you. I took my -- he was probably four years old at the time, and we took him to your rally up at UNM. So we snuck all the way up as far as we can go -- it would have been an honor if he was able to see you yesterday; unfortunately we weren’t able to -- but we were.

Now, you -- we own a restaurant right down here in the South Valley.

THE PRESIDENT: What’s it called?

Q It’s called Matteo’s.

THE PRESIDENT: Well, the -- where are some samples? (Laughter.)

Q You know what? We have some for you. (Laughter.) We brought some for you.

THE PRESIDENT: Okay, I’m going to check them out. What do we got?

Q We got to get it past --

THE PRESIDENT: Oh, I’ll talk to Secret Service. We’ll see what you got. (Laughter.)

Q But we did indeed bring you some.

THE PRESIDENT: Okay, all right.

Q Now, you have just recently signed a bill for small businesses --

THE PRESIDENT: Yes.

Q -- and getting loans. Now, it is hard for us to receive a loan only because the money we count on are local people to support us, and we support them with our meals, obviously. Now, the funds are supposed to be available immediately. Now, what is the criteria, what is -- when will that be going into action, and how hard would that be for someone in our situation?

THE PRESIDENT: Well, obviously I haven’t looked at your books and I don’t know what your expansion plans are and --

Q No, I understand that.

THE PRESIDENT: -- but let me describe for you what we did. Number one is we set up loan facilities both through the SBA as well as the new facility so that if you want to expand your business, you’re having trouble getting credit through your local community bank, we are now providing additional financing to the bank that they -- that gives them an incentive to loan to you and they only get these loans if they pass it on to small businesses.

So we’re not helping the bank just to hold the money. We’re saying if you, South Valley Bank, decide that you want to lend to Matteo’s Restaurant because you think that -- you’ve tasted their food, it’s terrific, and they want to open a new one or they want to build an addition, then they now have a pool of money that is going to make it much easier for them to lend to you at low interest rates. That’s number one.

SBA, the Small Business Administration, also has a whole host of lending programs that we have expanded. We’ve reduced the fees for them. We’ve made it easier to apply. So if you’re interested in the lending programs, then you should contact your local SBA administrator here in New Mexico, and I’m assuming that they’re -- I’ll bet your congressman here could probably let you know immediately how to get in touch with them and they would outline for you all the programs that were available. So that’s on the lending side.

Now, what we’ve also done is on the tax side we have said that for companies that are starting up, small businesses that are starting up, we’re going to give them a whole bunch of tax breaks. If you decide that you have to build a new oven, and you haven’t been sure -- should you invest in it this year, should you put it off, it’s kind of expensive -- well, we’re giving you incentives to go ahead and buy that oven this year and put it in. And it will be cheaper for you because you can essentially take -- you can write off the business expenses of purchasing that oven this year a lot faster than you would have otherwise been able to do. So that’s an example of just one of the kinds of tax cuts that are provided in this bill.

And it builds up -- by the way, eight tax cuts that we already passed as part of the Recovery Act that people don’t talk about, right now you can get a tax break if you hire an unemployed worker. We will give you a tax break on the payroll taxes that you have to pay for that person.

There are tax breaks right now for health care. I don’t know if you’re providing health care for your employees. It’s oftentimes very hard for restaurants, who are operating on pretty slim margins, to provide health insurance for their employees, but what we’re doing now is because of health reform, we’ll pay up to a third of the cost to your premiums in the form of tax credits so that it’s much more affordable, much cheaper for you to be able to provide health insurance for your employees.

So we’ve got a whole basket of tax cuts and lending assistance to small businesses. And the reason this is so important is because small businesses create the majority of new jobs in this country. Big businesses are very important, too, and we’re trying to encourage them obviously to do more to invest. They actually have a lot of money right now. It’s just they’re sitting on the sidelines with it instead of investing it, and we’ve got to encourage them to invest more.

But small businesses, that’s the beating heart of so many communities -- restaurants like yours, small dry cleaners, a plumbing operation, a tent company a flower shop. Okay, so the -- we’ve got a bunch of small business owners here. You knit the community together, and you give people opportunity, as well as building something for your family. And you’re so invested in it because it’s yours.

And small businesses have been harder hit by this recession than just about anybody else because they had a harder time getting financing and because obviously customer demand was down. And that’s why we have really tried to focus on making sure that small businesses on Main Street get help.

I’ve got to do a little bit of editorializing again, though, about the politics of this because this is something that -- this bill that I signed this week drew on Republican and Democratic ideas. Traditionally, this is something that’s been completely bipartisan. The Chamber of Commerce, the Association for Small Businesses, a whole bunch of different groups supported it. We could not get the Republicans to let this come up to a vote for months. And there were finally articles in USA Today about how small businesses were holding off making investments or hiring because they were still waiting to see if this thing would pass.

And finally we got two Republicans to vote for it -- out of 41. And one of them had to just admit -- he said, look, the time for playing games is over; this is too serious.

And I guess -- that’s something that I just hope as you are talking to your friends and your neighbors and your coworkers, I hope that’s the one thing you come away from here today thinking about is, these are serious times. I mean we’ve got tough competition out there. This is the greatest country on earth and will continue to be the greatest country on earth as long as we can go ahead and handle serious problems that we have, instead of playing political games all the time.

And when you look at the choices before you, I think you’ve got to ask yourself, who is offering serious answers. And I know you feel that way not just for your business but also for this new son that’s coming. Yes. Have you thought about Barack as a name? (Laughter and applause.) That’s good. I like that.

All right, this gentleman right here.

Q My name is Dan. I’m the principal of Los Lunas High School.

THE PRESIDENT: Well, it’s great to see you.

Q Thank you, sir.

THE PRESIDENT: Now, has somebody given you a pass so you can be off campus?

Q Yes, we do. As a matter of fact, I’m really proud that Etta is my counselor at my high school. So thank you all and welcome to New Mexico.

THE PRESIDENT: Thank you.

Q This statement -- I promised my students -- every day, my students are my mission every day, and what they think and what they do is important to all of us. And I have a statement from Ms. Valerie May’s (ph) AP class. And it could be a statement or question from any high school group of students.

And it says, “Welcome, President Obama, to New Mexico.” And it says, “We are all concerned and sometimes scared that there will be no money for us to continue our education. While we seem to be the target and the gauge on how much monies our school and state gets, what assurance will we have that we will be rewarded for good work? There seems to be less money that banks lend our families and most of all no jobs. We want to thank you for listening to us. Thank you for all you do for our country. We know that you are only one man and we must all believe, have faith, and support you in your endeavors.”

THE PRESIDENT: Well, thank you so much. That’s a wonderful letter. And I think it’s part of what makes me so optimistic about the country. When you actually travel and meet young people around the country, they’ll make you optimistic. I mean, they’re smart and they’re ambitious, and they want to help their community, and they’ve got good values, and they’ve got good common sense.

But they are anxious right now, which is understandable. They’re growing up in the shadow of a financial crisis that we hadn’t seen in our lifetimes. Unless you were born in 1910, 1915, you wouldn’t remember a crisis like this having happened.

And so they’re seeing it firsthand and they’re seeing it in their families. I’m sure even though their parents are trying to hide their stress from them, if business is bad, if you’re having trouble paying the bills, kids hear that. They know it. And some of the letters that are most heartbreaking for me when I’m -- I get a group of letters every night that I read from people all across the country, selected from the 40,000 emails and letters that we get. And sometimes it’s letters from children and they’ll write to you about, you know, my dad lost his job and he just doesn’t seem the same, and is there something you can do? And it’s heartbreaking. They absorb all the pain that is going on out here right now.

But that is why it is so important for us to make sure that we are meeting our commitments to them not just individually as parents but also as a society. So when we increase student aid so that these young people that just wrote to me are able to afford going to college, and you’ve then got the other side in this election pledging to reverse those increases so that they’re less likely to be able to afford going to college, that should motivate you at the voting booth in terms of what your priorities are.

When we’re talking about -- when we -- here’s a good example, and the congressman will remember this. We had a debate in Washington because states were very hard-strapped for cash and were starting to lay off teachers. And we said, let’s close a corporate tax loophole that is incentivizing companies to ship jobs overseas, let’s close that loophole and use that money to help states keep teachers and firefighters and cops on the job, because there are a bunch of states -- Hawaii, actually, had gone to a four-day-a-week school week because they just couldn’t afford teachers. Think about that. Four days a week you go to school. They are missing a fifth of the school year because of budget crunches.

And so we said, well, that’s not acceptable. Let’s just close the tax loophole that even the companies that were using the loopholes couldn’t really defend.

So we closed it. The leader of the Republicans in the House, he fought us tooth and nail to do that. And then when we pointed out this is saving a whole bunch of teacher jobs and police officer jobs and firefighter jobs, he says, well, those are just government jobs.

Those are government jobs? Well, these are people who are teaching our kids. These are folks who are rushing into burning buildings to save our families, putting their lives on the line. Government jobs?

But that is the ideology that the other side has been bringing to every problem out here for years now. And that’s the choice that we’ve got in this election.

So, look, those young people, they’re going to succeed. But we’ve got to make sure that we make it easier for them, as opposed to harder for them, to succeed.

Ultimately what’s going to bring about their success is their determination and their talents and their pluck and their willingness to stick to it. But, you know, we can give them a hand up. We can make sure that college is affordable. We can make sure that they’re able to stay on their parents’ health insurance until they’re 26 if the first job they get out of school doesn’t have health insurance. We can make sure that they’re not cheated the first time they buy their home because now we’ve got a consumer finance protection agency that’s going to monitor mortgage brokers and bank practices so that people don’t have to get tricked because of fine print.

These are just basic things that we can do. If they decide they want to open a business, we can make sure that they can get some financing and that they don’t have to pay capital gains on their startup business. These little things add up to big things. It means that they can focus their energy on their dreams and their vision and what they’re trying to build, and not spend all their time constantly just worrying about, am I going to be able to go to school or not. That should be a given in this country because it’s good for all of us, not just for these young people individually.

Okay? How are we doing on time? I want to make sure that I’m not -- last question? I’ve got to -- you’re going to defer to him? Okay. You’re going to defer to him. Well, he was a good-looking young man, I got to admit. (Applause.) You want to hear from him, I understand. All right, go ahead.

Q Thank you so much, Mr. President. My name is Andrew Cavalier, I’m his son. I’ve got a couple questions for you. One really hits hard for me. I’m getting a little emotional here. My father, being a veteran, we appreciate everything that he’s done for the country. And obviously the VA does a lot for my father.

THE PRESIDENT: Yes, we love your dad. Yes, we appreciate what he’s done.

Q Thank you. (Applause.)

THE PRESIDENT: Absolutely.

Q The reason I get emotional is because --

THE PRESIDENT: Because he’s your dad.

Q Well, unfortunately at the VA sometimes he doesn’t get the care and the service that he should.

THE PRESIDENT: Right.

Q I mean he sacrificed his body -- I mean, over 17 surgeries that he’s had --

THE PRESIDENT: Right.

Q I really didn’t want to do this on TV.

THE PRESIDENT: That’s all right.

Q But, you know, I see -- he put his blood, his sweat and his tears into this country and doesn’t always get the type of care that he deserves because -- I just want to ask, I mean, do you have any plan for that? There’s obviously lots of veterans out there --

THE PRESIDENT: Right.

Q -- feel the same way, not getting the treatments that they deserve. It’s not just the medications, you know, it’s really being treated like a human.

THE PRESIDENT: Right.

Q And, I mean, that’s kind of the issue that I have is, we put in our taxpayer dollars and, you know, it’s -- I mean, I have a small business myself. We help provide people with legal services, stuff like that, you know, having access to their rights. But when you can’t afford it, I mean, we’re forced to just basically settle for what we got because of the fact that that’s all we could afford.

THE PRESIDENT: Well, let me -- first of all, you don’t have to apologize for being emotional about your dad who served our country as a Marine, man. That’s -- I get emotional when I think about our young men and women and our veterans who have served this country with such bravery and courage. We have a sacred trust for people who put on the uniform of the United States. They serve us. They’re willing to put their lives on the line. And that means that when they come back, we’ve got to serve them.

Now, here’s the good news. First of all, I’ve got what I think is one of the finest, if not the finest, Secretaries of Veterans Affairs ever, General Ric Shinseki, who himself is a disabled veteran. And this guy just thinks day and night about how are we going to make sure that veterans services are provided in a timely, effective, respectful fashion, all right? So that’s point number one.

Point number two. We are actually -- even in the midst of this very difficult budget situation that we’re in, we have increased over the last two years funding for veterans more than any time in the last 30 years. More than any time in the last 30 years.

And the reason we did it was because a lot of VA facilities had gotten outdated. The backlog in terms of folks trying to get medical services or getting their claims processed had just gotten ridiculous. You had over a million young people who had served in Iraq and now Afghanistan who had come back and they’ve got new problems like -- well, they’re not new problems but now we’re much more effective at diagnosing post-traumatic stress disorder, traumatic brain injury -- they weren’t getting services. We’ve got women who are now serving in a much more dangerous situation in a lot of these theaters, and yet a lot of VA facilities still did not have special services for women and their special needs as they return.

So we are in the process of investing more in the VA and reforming how business is done at the VA than at any time in the last 30 years.

Now, we’ve still got a ways to go, but this is again an example of where, come November, we’ve got to start making some choices because if, for example, we give tax breaks to millionaires and billionaires that cost us $700 billion that we don’t have, that money has to come from somewhere. And we’ve got to be able to provide for our veterans. I’d rather choose veterans. I’d rather choose these young people who are looking for scholarships.

Homeless veterans. The notion that we’ve got somebody who served our country and they’re now on the streets, they don’t have a house? So we’ve said we’re going to have zero tolerance for homeless veterans. We are going to do everything we can to make sure that every single person who has served our country, that they’ve got proper medical care and they’ve got a roof over their heads. And oftentimes that means counseling. And the irony is if you make the investments early, then it turns out that they’re less expensive over the long term.

So this is something that you’re right to be emotional about, and I think we should all be emotional about it. And we’re grateful to your dad for his service, and we just need to remind ourselves that there are millions of folks across the country who deserve that same kind of respect and we’ve got to meet our obligations to them.

One last point I’ll make about veterans, because it ties in with the overall theme of education -- working with our terrific members of Congress here, we were able to pass the post-9/11 GI Bill, which means that this generation of veterans is going to be able to benefit the same way my grandfather benefited when he came back from World War II; that he was going to be able to get his college education paid for. And by the way, we made it transferable to the spouses of veterans and their family members if they weren’t going to use it, because military families make huge sacrifices as well and oftentimes they don’t get the service and the attention that they need. And this has been a huge priority of the First Lady, and it’s something that I am very, very proud of. But we’ve got to keep on fighting for these changes. They don’t come by themselves.

And I hope everybody is going to pay attention and do their homework and find out about candidates. And I think what you’ll find is, is that when you’re making choices for governor and you’re making choices for Senate and Congress, that these choices are going to mean something.

And you got to ask yourselves, what direction do I want this country to go in? Do I want to invest in our people, in our middle class and making it stronger, and our infrastructure and our education system and clean energy -- is that one vision or are we just going to keep on doing the same things that got us into this mess in the first place?

All right? Thank you so much, everybody. It was great spending time with you. Thank you. (Applause.)

END
11:18 A.M. MDT