Remarks by the President at Signing of the Iran Sanctions Act

East Room

6:30 P.M. EDT

THE PRESIDENT:  Thank you.  Please have a seat, everybody.  Good evening, everybody.  As President, one of my highest national security priorities is to prevent the spread of nuclear weapons.  That’s why my administration has aggressively pursued a comprehensive agenda of non-proliferation and nuclear security.

Leading by example, we agreed with Russia to reduce our nuclear arsenals through the New START Treaty —- and I’ve urged the Senate to move forward with ratification this year.  And with allies and partners, we’ve strengthened the global non-proliferation regime, including the cornerstone of our efforts -—the Nuclear Non-Proliferation Treaty.

Now, in the entire world, there is only one signatory to the NPT -— only one -— that has been unable to convince the International Atomic Energy Agency that its nuclear program is for peaceful purposes.  One nation.  And that nation is Iran.  For years, the Iranian government has violated its commitments, defied United Nations Security Council resolutions, and forged ahead with its nuclear program —- all while supporting terrorist groups and suppressing the aspirations of the Iranian people.

Since taking office, I’ve made it clear that the United States was prepared to begin a new chapter of engagement with the Islamic Republic of Iran.  We offered the Iranian government a clear choice.  It could fulfill its international obligations and realize greater security, deeper economic and political integration with the world, and a better future for all Iranians. Or it could continue to flout its responsibilities and face even more pressure and isolation.  

To date, Iran has chosen the path of defiance.  That’s why we have steadily built a broader and deeper coalition of nations to pressure the Iranian government.  Last month, we joined with our partners at the U.N. Security Council to pass the toughest and most comprehensive multilateral sanctions that the Iranian government has ever faced.  (Applause.)  And I want to specifically single out our tireless -- and I mean tireless -- Ambassador to the United Nations, Susan Rice, for her terrific -- (applause.)  

As I said last month, we are going to make sure that these sanctions are vigorously enforced.  At the same time, we’ll work with our allies and friends to refine and enforce our own sanctions on Iran.  And that’s exactly what we’ve been doing.  Here in the United States —- thanks to the efforts of my Treasury Secretary, Tim Geithner, and Under Secretary Stuart Levey —- (applause) -- they have been terrific on this effort; Stuart has been just outstanding -- we have imposed sanctions against more institutions, more individuals involved with Iran’s nuclear and missile programs. 

Other nations are now acting alongside us -- nations like Australia, which announced new sanctions, including those against a major Iranian bank and Iran’s shipping company.  The European Union is moving ahead with additional strong measures against Iran’s financial, banking, insurance, transportation, and energy sectors, as well as Iran’s Revolutionary Guard.  Other countries, like Canada, have indicated they will also be taking action.  In other words, we are ratcheting up the pressure on the Iranian government for its failure to meet its obligations.

And today, we’re taking another step —- a step that demonstrates the broad and bipartisan support for holding Iran accountable.  I’m pleased to sign into law the toughest sanctions against Iran ever passed by the United States Congress -— the Comprehensive Iran Sanctions, Accountability, and Divestment Act.  (Applause.) 

I want to thank all the members of Congress who worked on behalf of this legislation, including another tireless person, but who never seems to break a sweat -- the Speaker of the House, Nancy Pelosi.  (Applause.)  I want to thank Representatives Steny Hoyer and Eric Cantor for doing outstanding work.  (Applause.)   Although they weren’t able to join us, I want to acknowledge Senators Harry Reid, Jon Kyl and Richard Shelby.  And I want to thank those who led the effort to forge a final bill that received overwhelming bipartisan support —- Senator Chris Dodd and Representative Howard Berman.  Thank you for your good work. (Applause.) 

Consistent with the Security Council mandate, this legislation strengthens existing sanctions, authorizes new ones and supports our multilateral diplomatic strategy to address Iran’s nuclear program.  It makes it harder for the Iranian government to purchase refined petroleum and the goods, services and materials to modernize Iran’s oil and natural gas sector.  It makes it harder for the Revolutionary Guards and banks that support Iran’s nuclear programs and terrorism to engage in international finance.  It says to companies seeking procurement contracts with the United States government -— if you want to do business with us, you first have to certify that you’re not doing prohibited business with Iran.

In short, with these sanctions -— along with others —- we are striking at the heart of the Iranian government’s ability to fund and develop its nuclear program.  We’re showing the Iranian government that its actions have consequences.  And if it persists, the pressure will continue to mount, and its isolation will continue to deepen.  There should be no doubt —- the United States and the international community are determined to prevent Iran from acquiring nuclear weapons. 

Finally, even as we increase pressure on the Iranian government, we’re sending an unmistakable message that the United States stands with the Iranian people as they seek to exercise their universal rights.  This legislation imposes sanctions on individuals who commit serious human rights abuses.  And it exempts from our trade embargo technologies that allow the Iranian people to access information and communicate freely.  In Iran and around the world, the United States of America will continue to stand with those who seek justice and progress and the human rights and dignity of all people.
  
So, again, this is not a day that we sought -— but it is an outcome that was chosen by the Iranian government when it repeatedly failed to meet its responsibilities.  And the government of Iran still has a choice.  The door to diplomacy remains open.  Iran can prove that its intentions are peaceful.  It can meet its obligations under the NPT and achieve the security and prosperity worthy of a great nation. 

It can have confidence in the Iranian people and allow their rights to flourish.  For Iranians are heirs to a remarkable history.  They are renowned for their talents and their contributions to humanity.  Here in the United States, Iranian-Americans have thrived.  And within Iran, there’s great potential for the Iranian people to forge greater prosperity through deeper integration with the international community, including with the United States. 

That’s the future we do seek -– one where Iran’s leaders do not hold their own people back by failing to live up to Iran’s international obligations, and where Iran can reclaim its place in the community of nations and find greater peace and prosperity.

That is the Iranian government’s choice.  And it remains our hope that they choose this path, even as we are clear-eyed and vigilant about the difficult challenges ahead. 

So, with that, I will sign this legislation into law.  (Applause.) 

(The bill is signed.)  (Applause.) 

END
6:40 P.M. EDT
 

Remarks by the President on Comprehensive Immigration Reform

American University School of International Service, Washington, D.C.

11:12 A.M. EDT

THE PRESIDENT:  Thank you very much.  Thank you.  Thank you.  (Applause.)  Everyone please have a seat.  Thank you very much.  Let me thank Pastor Hybels from near my hometown in Chicago, who took time off his vacation to be here today.  We are blessed to have him.

I want to thank President Neil Kerwin and our hosts here at American University; acknowledge my outstanding Secretary of Labor, Hilda Solis, and members of my administration; all the members of Congress -- Hilda deserves applause.  (Applause.)  To all the members of Congress, the elected officials, faith and law enforcement, labor, business leaders and immigration advocates who are here today -- thank you for your presence.

I want to thank American University for welcoming me to the campus once again.  Some may recall that the last time I was here I was joined by a dear friend, and a giant of American politics, Senator Edward Kennedy.  (Applause.)  Teddy’s not here right now, but his legacy of civil rights and health care and worker protections is still with us.

I was a candidate for President that day, and some may recall I argued that our country had reached a tipping point; that after years in which we had deferred our most pressing problems, and too often yielded to the politics of the moment, we now faced a choice:  We could squarely confront our challenges with honesty and determination, or we could consign ourselves and our children to a future less prosperous and less secure. 

I believed that then and I believe it now.  And that’s why, even as we’ve tackled the most severe economic crisis since the Great Depression, even as we’ve wound down the war in Iraq and refocused our efforts in Afghanistan, my administration has refused to ignore some of the fundamental challenges facing this generation.

We launched the most aggressive education reforms in decades, so that our children can gain the knowledge and skills they need to compete in a 21st century global economy.

We have finally delivered on the promise of health reform -– reform that will bring greater security to every American, and that will rein in the skyrocketing costs that threaten families, businesses and the prosperity of our nation.

We’re on the verge of reforming an outdated and ineffective set of rules governing Wall Street -– to give greater power to consumers and prevent the reckless financial speculation that led to this severe recession.

And we’re accelerating the transition to a clean energy economy by significantly raising the fuel-efficiency standards of cars and trucks, and by doubling our use of renewable energies like wind and solar power -- steps that have the potential to create whole new industries and hundreds of thousands of new jobs in America. 

So, despite the forces of the status quo, despite the polarization and the frequent pettiness of our politics, we are confronting the great challenges of our times.  And while this work isn’t easy, and the changes we seek won’t always happen overnight, what we’ve made clear is that this administration will not just kick the can down the road. 

Immigration reform is no exception.  In recent days, the issue of immigration has become once more a source of fresh contention in our country, with the passage of a controversial law in Arizona and the heated reactions we’ve seen across America.  Some have rallied behind this new policy.  Others have protested and launched boycotts of the state.  And everywhere, people have expressed frustration with a system that seems fundamentally broken. 

Of course, the tensions around immigration are not new.  On the one hand, we’ve always defined ourselves as a nation of immigrants -- a nation that welcomes those willing to embrace America’s precepts.  Indeed, it is this constant flow of immigrants that helped to make America what it is.  The scientific breakthroughs of Albert Einstein, the inventions of Nikola Tesla, the great ventures of Andrew Carnegie’s U.S. Steel and Sergey Brin’s Google, Inc. -– all this was possible because of immigrants.

And then there are the countless names and the quiet acts that never made the history books but were no less consequential in building this country -- the generations who braved hardship and great risk to reach our shores in search of a better life for themselves and their families; the millions of people, ancestors to most of us, who believed that there was a place where they could be, at long last, free to work and worship and live their lives in peace. 

So this steady stream of hardworking and talented people has made America the engine of the global economy and a beacon of hope around the world.  And it’s allowed us to adapt and thrive in the face of technological and societal change.  To this day, America reaps incredible economic rewards because we remain a magnet for the best and brightest from across the globe.  Folks travel here in the hopes of being a part of a culture of entrepreneurship and ingenuity, and by doing so they strengthen and enrich that culture.  Immigration also means we have a younger workforce -– and a faster-growing economy -- than many of our competitors.  And in an increasingly interconnected world, the diversity of our country is a powerful advantage in global competition. 

Just a few weeks ago, we had an event of small business owners at the White House.  And one business owner was a woman named Prachee Devadas who came to this country, became a citizen, and opened up a successful technology services company.  When she started, she had just one employee.  Today, she employs more than a hundred people.  This past April, we held a naturalization ceremony at the White House for members of our armed forces.  Even though they were not yet citizens, they had enlisted.  One of them was a woman named Perla Ramos -- born and raised in Mexico, came to the United States shortly after 9/11, and she eventually joined the Navy.  And she said, “I take pride in our flag and the history that forged this great nation and the history we write day by day.”

These women, and men and women across this country like them, remind us that immigrants have always helped to build and defend this country -– and that being an American is not a matter of blood or birth.  It’s a matter of faith.  It’s a matter of fidelity to the shared values that we all hold so dear.  That’s what makes us unique.  That’s what makes us strong.  Anybody can help us write the next great chapter in our history. 

Now, we can’t forget that this process of immigration and eventual inclusion has often been painful.  Each new wave of immigrants has generated fear and resentments towards newcomers, particularly in times of economic upheaval.  Our founding was rooted in the notion that America was unique as a place of refuge and freedom for, in Thomas Jefferson’s words, “oppressed humanity.”  But the ink on our Constitution was barely dry when, amidst conflict, Congress passed the Alien and Sedition Acts, which placed harsh restrictions of those suspected of having foreign allegiances.  A century ago, immigrants from Ireland, Italy, Poland, other European countries were routinely subjected to rank discrimination and ugly stereotypes.  Chinese immigrants were held in detention and deported from Angel Island in the San Francisco Bay.  They didn’t even get to come in.

So the politics of who is and who is not allowed to enter this country, and on what terms, has always been contentious.  And that remains true today.  And it’s made worse by a failure of those of us in Washington to fix a broken immigration system. 

To begin with, our borders have been porous for decades.  Obviously, the problem is greatest along our Southern border, but it’s not restricted to that part of the country.  In fact, because we don’t do a very good job of tracking who comes in and out of the country as visitors, large numbers avoid immigration laws simply by overstaying their visas.

The result is an estimated 11 million undocumented immigrants in the United States.  The overwhelming majority of these men and women are simply seeking a better life for themselves and their children.  Many settle in low-wage sectors of the economy; they work hard, they save, they stay out of trouble.  But because they live in the shadows, they’re vulnerable to unscrupulous businesses who pay them less than the minimum wage or violate worker safety rules -– thereby putting companies who follow those rules, and Americans who rightly demand the minimum wage or overtime, at an unfair [dis]advantage.  Crimes go unreported as victims and witnesses fear coming forward.  And this makes it harder for the police to catch violent criminals and keep neighborhoods safe.  And billions in tax revenue are lost each year because many undocumented workers are paid under the table.

     More fundamentally, the presence of so many illegal immigrants makes a mockery of all those who are going through the process of immigrating legally.  Indeed, after years of patchwork fixes and ill-conceived revisions, the legal immigration system is as broken as the borders.  Backlogs and bureaucracy means the process can take years.  While an applicant waits for approval, he or she is often forbidden from visiting the United States –- which means even husbands and wives may be forced to spend many years apart.  High fees and the need for lawyers may exclude worthy applicants.  And while we provide students from around the world visas to get engineering and computer science degrees at our top universities, our laws discourage them from using those skills to start a business or power a new industry right here in the United States.  Instead of training entrepreneurs to create jobs on our shores, we train our competition.

In sum, the system is broken.  And everybody knows it.  Unfortunately, reform has been held hostage to political posturing and special-interest wrangling -– and to the pervasive sentiment in Washington that tackling such a thorny and emotional issue is inherently bad politics. 

Just a few years ago, when I was a senator, we forged a bipartisan coalition in favor of comprehensive reform.  Under the leadership of Senator Kennedy, who had been a longtime champion of immigration reform, and Senator John McCain, we worked across the aisle to help pass a bipartisan bill through the Senate.  But that effort eventually came apart.  And now, under the pressures of partisanship and election-year politics, many of the 11 Republican senators who voted for reform in the past have now backed away from their previous support. 

Into this breach, states like Arizona have decided to take matters into their own hands.  Given the levels of frustration across the country, this is understandable.  But it is also ill conceived.  And it’s not just that the law Arizona passed is divisive -– although it has fanned the flames of an already contentious debate.  Laws like Arizona’s put huge pressures on local law enforcement to enforce rules that ultimately are unenforceable.  It puts pressure on already hard-strapped state and local budgets.  It makes it difficult for people here illegally to report crimes -– driving a wedge between communities and law enforcement, making our streets more dangerous and the jobs of our police officers more difficult. 

And you don’t have to take my word for this.  You can speak to the police chiefs and others from law enforcement here today who will tell you the same thing. 

These laws also have the potential of violating the rights of innocent American citizens and legal residents, making them subject to possible stops or questioning because of what they look like or how they sound.  And as other states and localities go their own ways, we face the prospect that different rules for immigration will apply in different parts of the country -– a patchwork of local immigration rules where we all know one clear national standard is needed. 

Our task then is to make our national laws actually work -– to shape a system that reflects our values as a nation of laws and a nation of immigrants.  And that means being honest about the problem, and getting past the false debates that divide the country rather than bring it together.

For example, there are those in the immigrants’ rights community who have argued passionately that we should simply provide those who are [here] illegally with legal status, or at least ignore the laws on the books and put an end to deportation until we have better laws.  And often this argument is framed in moral terms:  Why should we punish people who are just trying to earn a living? 

I recognize the sense of compassion that drives this argument, but I believe such an indiscriminate approach would be both unwise and unfair.  It would suggest to those thinking about coming here illegally that there will be no repercussions for such a decision.  And this could lead to a surge in more illegal immigration.  And it would also ignore the millions of people around the world who are waiting in line to come here legally. 

Ultimately, our nation, like all nations, has the right and obligation to control its borders and set laws for residency and citizenship.  And no matter how decent they are, no matter their reasons, the 11 million who broke these laws should be held accountable.

Now, if the majority of Americans are skeptical of a blanket amnesty, they are also skeptical that it is possible to round up and deport 11 million people.  They know it’s not possible.  Such an effort would be logistically impossible and wildly expensive.  Moreover, it would tear at the very fabric of this nation -– because immigrants who are here illegally are now intricately woven into that fabric.  Many have children who are American citizens.  Some are children themselves, brought here by their parents at a very young age, growing up as American kids, only to discover their illegal status when they apply for college or a job.  Migrant workers -– mostly here illegally -– have been the labor force of our farmers and agricultural producers for generations.  So even if it was possible, a program of mass deportations would disrupt our economy and communities in ways that most Americans would find intolerable. 

Now, once we get past the two poles of this debate, it becomes possible to shape a practical, common-sense approach that reflects our heritage and our values.  Such an approach demands accountability from everybody -– from government, from businesses and from individuals. 

Government has a threshold responsibility to secure our borders.  That’s why I directed my Secretary of Homeland Security, Janet Napolitano -- a former border governor -- to improve our enforcement policy without having to wait for a new law. 

Today, we have more boots on the ground near the Southwest border than at any time in our history.  Let me repeat that:  We have more boots on the ground on the Southwest border than at any time in our history.  We doubled the personnel assigned to Border Enforcement Security Task Forces.  We tripled the number of intelligence analysts along the border.  For the first time, we’ve begun screening 100 percent of southbound rail shipments.  And as a result, we’re seizing more illegal guns, cash and drugs than in years past.  Contrary to some of the reports that you see, crime along the border is down.  And statistics collected by Customs and Border Protection reflect a significant reduction in the number of people trying to cross the border illegally. 

So the bottom line is this:  The southern border is more secure today than at any time in the past 20 years.  That doesn’t mean we don’t have more work to do.  We have to do that work, but it’s important that we acknowledge the facts.  Even as we are committed to doing what’s necessary to secure our borders, even without passage of the new law, there are those who argue that we should not move forward with any other elements of reform until we have fully sealed our borders.  But our borders are just too vast for us to be able to solve the problem only with fences and border patrols.  It won’t work.  Our borders will not be secure as long as our limited resources are devoted to not only stopping gangs and potential terrorists, but also the hundreds of thousands who attempt to cross each year simply to find work. 
 
That’s why businesses must be held accountable if they break the law by deliberately hiring and exploiting undocumented workers.  We’ve already begun to step up enforcement against the worst workplace offenders.  And we’re implementing and improving a system to give employers a reliable way to verify that their employees are here legally.  But we need to do more.  We cannot continue just to look the other way as a significant portion of our economy operates outside the law.  It breeds abuse and bad practices.  It punishes employers who act responsibly and undercuts American workers.  And ultimately, if the demand for undocumented workers falls, the incentive for people to come here illegally will decline as well.   

Finally, we have to demand responsibility from people living here illegally.  They must be required to admit that they broke the law.  They should be required to register, pay their taxes, pay a fine, and learn English.  They must get right with the law before they can get in line and earn their citizenship -- not just because it is fair, not just because it will make clear to those who might wish to come to America they must do so inside the bounds of the law, but because this is how we demonstrate that being -- what being an American means.  Being a citizen of this country comes not only with rights but also with certain fundamental responsibilities.  We can create a pathway for legal status that is fair, reflective of our values, and works.

     Now, stopping illegal immigration must go hand in hand with reforming our creaky system of legal immigration.  We’ve begun to do that, by eliminating a backlog in background checks that at one point stretched back almost a year.  That’s just for the background check.  People can now track the status of their immigration applications by email or text message.  We’ve improved accountability and safety in the detention system.  And we’ve stemmed the increases in naturalization fees.  But here, too, we need to do more.  We should make it easier for the best and the brightest to come to start businesses and develop products and create jobs. 

Our laws should respect families following the rules -– instead of splitting them apart.  We need to provide farms a legal way to hire the workers they rely on, and a path for those workers to earn legal status.  And we should stop punishing innocent young people for the actions of their parents by denying them the chance to stay here and earn an education and contribute their talents to build the country where they’ve grown up.  The DREAM Act would do this, and that’s why I supported this bill as a state legislator and as a U.S. senator -- and why I continue to support it as president.
                          
So these are the essential elements of comprehensive immigration reform.  The question now is whether we will have the courage and the political will to pass a bill through Congress, to finally get it done.  Last summer, I held a meeting with leaders of both parties, including many of the Republicans who had supported reform in the past -- and some who hadn’t.  I was pleased to see a bipartisan framework proposed in the Senate by Senators Lindsey Graham and Chuck Schumer, with whom I met to discuss this issue.  I’ve spoken with the Congressional Hispanic Caucus to plot the way forward and meet -- and then I met with them earlier this week. 

And I’ve spoken with representatives from a growing coalition of labor unions and business groups, immigrant advocates and community organizations, law enforcement, local government -– all who recognize the importance of immigration reform.  And I’ve met with leaders from America’s religious communities, like Pastor Hybels -- people of different faiths and beliefs, some liberal, some conservative, who nonetheless share a sense of urgency; who understand that fixing our broken immigration system is not only a political issue, not just an economic issue, but a moral imperative as well. 

So we’ve made progress.  I’m ready to move forward; the majority of Democrats are ready to move forward; and I believe the majority of Americans are ready to move forward.  But the fact is, without bipartisan support, as we had just a few years ago, we cannot solve this problem.  Reform that brings accountability to our immigration system cannot pass without Republican votes.  That is the political and mathematical reality.  The only way to reduce the risk that this effort will again falter because of politics is if members of both parties are willing to take responsibility for solving this problem once and for all. 

And, yes, this is an emotional question, and one that lends itself to demagoguery.  Time and again, this issue has been used to divide and inflame -– and to demonize people.  And so the understandable, the natural impulse among those who run for office is to turn away and defer this question for another day, or another year, or another administration.  Despite the courageous leadership in the past shown by many Democrats and some Republicans -- including, by the way, my predecessor, President Bush -– this has been the custom.  That is why a broken and dangerous system that offends our most basic American values is still in place.

But I believe we can put politics aside and finally have an immigration system that’s accountable.  I believe we can appeal not to people’s fears but to their hopes, to their highest ideals, because that’s who we are as Americans.  It’s been inscribed on our nation’s seal since we declared our independence.  “E pluribus unum.”  Out of many, one.  That is what has drawn the persecuted and impoverished to our shores.  That’s what led the innovators and risk-takers from around the world to take a chance here in the land of opportunity.  That’s what has led people to endure untold hardships to reach this place called America. 

     One of the largest waves of immigration in our history took place little more than a century ago.  At the time, Jewish people were being driven out of Eastern Europe, often escaping to the sounds of gunfire and the light from their villages burning to the ground.  The journey could take months, as families crossed rivers in the dead of night, traveled miles by foot, endured a rough and dangerous passage over the North Atlantic.  Once here, many made their homes in a teeming and bustling Lower Manhattan. 

It was at this time that a young woman named Emma Lazarus, whose own family fled persecution from Europe generations earlier, took up the cause of these new immigrants.  Although she was a poet, she spent much of her time advocating for better health care and housing for the newcomers.  And inspired by what she saw and heard, she wrote down her thoughts and donated a piece of work to help pay for the construction of a new statue -- the Statue of Liberty -- which actually was funded in part by small donations from people across America. 

Years before the statue was built -- years before it would be seen by throngs of immigrants craning their necks skyward at the end of long and brutal voyage, years before it would come to symbolize everything that we cherish -- she imagined what it could mean.  She imagined the sight of a giant statue at the entry point of a great nation -– but unlike the great monuments of the past, this would not signal an empire.  Instead, it would signal one’s arrival to a place of opportunity and refuge and freedom. 

“Here at our sea-washed, sunset gates shall stand,” she wrote,

A mighty woman with a torch…
From her beacon-hand
Glows world-wide welcome…
“Keep, ancient lands, your storied pomp!”…
“Give me your tired, and your poor,
Your huddled masses yearning to be free…
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

Let us remember these words.  For it falls on each generation to ensure that that lamp -– that beacon -– continues to shine as a source of hope around the world, and a source of our prosperity here at home. 

Thank you.  God bless you.  And may God bless the United States of America.  Thank you.  (Applause.) 

END
11:47 A.M. EDT

Remarks by the President at a Town Hall Meeting on the Economy in Racine, Wisconsin

1:24 P.M. CDT

THE PRESIDENT:  Thank you so much.  Thank you.  Everybody have a seat, if you’ve got a chair.  (Laughter.)  Well, thank you so much.  Thank you, everybody.  It’s great to see you.  (Applause.)  It’s good to be back in Racine!  (Applause.)  It is great to be back in this hall -- because I don't know if there was anybody here who, when I was running for President came -- (applause) -- we did a rally in this hall.  That's like -- is that three years ago?  (Laughter.)  I did not have as much gray hair back then.  (Laughter.)  That I'm certain of.  Jim Doyle still had hair on his head.  (Laughter.)  That's true.

I want to make some acknowledgements.  First of all, you’ve got one of the best governors in the country and one of the most wonderful first ladies -- (applause) -- Jim Doyle and Jessica Doyle are here. (Applause.) 

I want to acknowledge your outstanding and dynamic young mayor -- John Dickert is here.  (Applause.)  You know, I try not to meddle in local politics, but you’ve got a Milwaukee mayor who might make a really good governor -- Tom Barrett is here.  (Applause.)  State Treasury Dawn Marie Sass is here.  (Applause.)  And State Superintendent of Public Instruction Tony Evers is here.  (Applause.)

I also want to thank Bishop Darrell Hines for doing the invocation -- (applause) -- Justine Boerger for doing the Pledge -- (applause) -- and Staff Sergeant Emily Russell, who is with the Wisconsin National Guard and sang our National Anthem.  Give them a big round of applause.  (Applause.)  Thank you.  Thank you.       

So it is great to be back in the Midwest -- even if it’s just for a day -- especially on a day like today.  I was trying to tell somebody that weather in the Midwest is always like this.  (Laughter.)  You know, lakes all calm and blue -- they didn’t believe me.  But it’s wonderful to be here, and it’s just nice to get out of Washington.  I love Washington, but I have to tell you, it’s good to escape the heat and hot air.  (Laughter and applause.)

So I stopped off on the way here to get a Kringle.  (Applause.)  Which was nice.  Maybe on the way back I'll look for a brat and some cheese curds.  (Laughter.)  But don’t tell Michelle.  (Laughter.)   

What I really wanted to do was have a chance to talk to all of you and listen to you about what’s on your minds.  So this is going to be a town hall meeting.  But I want to make some remarks at the top, if you don’t mind. 

I know that towns like Racine are still hurting from this recession.  This city has the second-highest unemployment rate in the state, and I can only imagine how much pain that’s caused and how many lives have been upended.  And you got, as I said, a dynamic young mayor who’s thinking day in, day out, about how to put people back to work, and the city has been cooperating with the state and federal programs to figure out how we can start incubating a bunch of growth here, but it’s still tough.   

And some of you may be out of work, and you’re tired of sending out resumes and not getting a response.  Maybe you’ve got a job, but the bills seem to be stacking up faster than your pay is.  Maybe you’ve looked through the family budget and you’ve got no idea how you’re going to save for your retirement or send your kid to college.  Or maybe you’re a young person who’s just about to get out of school and you’re wondering what your job prospects are going to be.

I hear worries like this all the time -- from folks that I talk to in town halls like this, but also in the letters that I read each night from all across the country.  And it’s frustrating and often it’s heartbreaking.  And that’s why even though there’s -- there are plenty of challenges on our plate -- everything from Afghanistan to Iran to the oil spill, all critical issues that go to our long-term prosperity and security -- nothing is more important than reversing the damage of the great recession and getting folks back to work.

We had to take the country through some pretty tough steps to pull us out of the freefall that we faced when I took office.  And I know that sometimes people don’t remember how bad it was and how bad it could have been.  But when I was sworn in, we were losing 750,000 jobs a month.  Every -- each month, we were losing 750,000 jobs.  The economy was shrinking at 6 percent.  It was contracting by 6 percentage points.  That’s faster than it had in decades. 

Today, it’s growing again.  Today, we’ve added private sector jobs for five months in a row.  (Applause.)  So the economy is headed in the right direction.  But for a lot of Americans -- for Racine and a lot of other communities -- it’s not heading there fast enough.  Not if you’re out of work.  Not if you can’t pay the mortgage.  Not if you can’t take care of your family.  And the truth is, from the day we walked into the White House, we knew that the crisis we faced was so severe that it was going to take months, and maybe even years, to fully heal, to dig ourselves out of one of the worst recessions in our history.  

And that’s why I’ve been fighting, in addition to everything we’ve done, for additional steps to speed up this recovery and keep the economy growing.  We want an extension of unemployment benefits for workers who lost their job through no fault of their own.  (Applause.)  We want to help small business owners get the loans they need to keep their doors open and hire more workers.  (Applause.)  We want relief for struggling states so they don’t have to lay off thousands of teachers and firefighters and police officers.  (Applause.)

Now, you’d think this would be pretty straightforward stuff, but I’ve got to say that lately we’ve been having to wrangle around what used to be pretty noncontroversial things -- providing loans for small businesses, extending unemployment insurance when 8 million people lost their jobs during the recession.  But lately, there’s a minority of senators from the other party who’ve had a different idea.  As we speak, they are using their power to stop this relief from going to the American people.  And they won’t even let these measures come up for a vote.  They block it through all kinds of procedural maneuvering in the Senate.

Now, some of this is just politics.  That’s the nature of Washington.  Before I was even inaugurated, there were leaders on the other side of the aisle who got together and they made the calculation that if Obama fails, then we win.  Right -- that was the basic theory.  They figured if we just keep on saying no to everything and nothing gets done, then somehow people will forget who got us into this mess in the first place and we’ll get more votes in November.  (Applause.)  And, you know, that will make people pretty cynical about politics.  

Now, let’s be fair though.  The other party’s opposition is also rooted in some sincere beliefs about how they think the economy works.  They think that our economy will do better if we just let the banks or the oil companies or the insurance industry make their own rules.  They still believe that, even after the Wall Street crash, even after the BP oil well blew, that we should just keep a hands-off attitude.  They think we should keep doing what we did for most of the last decade leading up to the recession. 

So their prescription for every challenge is pretty much the same -- and I don’t think I’m exaggerating here -- basically cut taxes for the wealthy, cut rules for corporations, and cut working folks loose to fend for themselves.  Basically their attitude is, you’re on your own.

Now, here’s the problem.  And again, I don’t question that a lot of them sincerely subscribe to this view.  Here’s the problem:  We’ve already tried these ideas.  Remember, we tried them for eight years.  We tried them for a good part of the last decade.  We know where they led us. 

On Wall Street, the financial industry and its lobbyists spent years chipping away at rules and safeguards that could have prevented the meltdown of -- that caused -- that was caused by Lehmann Brothers and AIG.  But we didn’t have those rules in place, that framework of regulation in place.  So instead, we saw a disaster that nearly led to the collapse of the entire economy.  

In the Gulf, we don’t yet know what caused the explosion on the Deepwater Horizon oil rig.  But what we do know is that for decades, the oil industry has been able to essentially write its own rules and safety regulations.  Industry insiders were put in charge of industry oversight.  And oil and gas companies were allowed to basically fill out their own safety inspection forms.

In Washington, nearly a decade of tax breaks for millionaires and billionaires led to little more than sluggish growth, a shrinking middle class, your paychecks flat-lined.  Wages and incomes did not go up.  Even when the economy was growing, it wasn’t growing for you.  And for all the party’s moralizing about fiscal discipline, because it is true that part of what we inherited is a real significant problem in terms of spending at the federal level, the economic policies they put in place turned a $237 billion surplus into a $1.3 trillion deficit.  (Applause.) 

So when I -- you know, there were a couple of signs when I came in, said, you know, do something about spending.  I’m game to do something about spending, but let’s just remember how we got into this fix.  (Applause.)

Now, I’ve never believed that government has all the answers.  That’s now how America thinks.  Government can’t and should not replace businesses as the engines of growth and job creation in our economy.  Government should live within its means.  We should root out waste and abuse of taxpayer dollars wherever and whenever we can.  Too much regulation can stifle competition and hurt businesses.

But if you think about the history of this country, we’ve always recognized that there are times when only government has been able to do what individuals couldn’t do and what corporations would not do.  That’s how we have railroads and highways and public schools and police forces.  That’s how we’ve made possible scientific research that led to the medical breakthroughs and technological wonders that all of us take for granted now.  That’s why we have Social Security and a minimum wage and laws to protect the food we eat and the water we drink and the air we breathe.  (Applause.)  That’s why we have rules to ensure that mines are safe and that oil companies pay for the spills that they cause.  (Applause.) 

And there have always been those who said no to these policies and these ideas.  I mean, you look back on the history books.  There were people who said that Social Security was socialism, said that Medicare was a government takeover.  There were automakers who said that installing seat belts was unnecessary, unaffordable, and would ruin the auto industry.  There were skeptics who thought that cleaning our water and our air would bankrupt our economy.  Right here in Wisconsin -- if you look at the lake now and look at the lake, what it was like 30 years ago, 40 years ago.  And there were people who said, well, there’s nothing we can do about all the sludge and drudge and whatever is going on in there. 

But they were wrong.  They were wrong then, and they’re wrong today.  (Applause.)  So I want everybody to understand, this debate that we’re having in Washington is not about big government or small government.  It’s about responsible government.  It’s about accountable government.  It’s about whose side government is on.  It should be on the side of the American people.  (Applause.)  A government that breaks down barriers to opportunity and prosperity.  That’s the kind of government we need.  That’s the kind of government I’m trying to give you.  (Applause.) 

So I just want everybody to remember, we've tried the other side’s theories.  We know what their ideas are.  We know where they led us.  So now we've got a choice.  We can return to what we know did not work, or we build a stronger future.  (Applause.)  We can go backwards, or we can go forward.  And I don’t know about you, but I want to move forward in this country.  (Applause.)  

As we speak, right now, we’re on the verge of passing the most comprehensive financial reform since the Great Depression -- a reform that will prevent a crisis like this from happening again.  It will protect our economy from the recklessness and irresponsibility of a few on Wall Street.  It will protect consumers against unfair practices of credit card companies and mortgage lenders.  It’s a reform that makes sure taxpayers never have to engage in a bailout for Wall Street’s mistakes. 

But I have to tell you, you would think this would be a bipartisan issue -- don't you?  I mean, you’d think everybody would say, all right, what we were doing, that didn’t work; we've really got to tighten things up a little bit.  But right now most of our friends on the -- in the other party are planning to vote against this reform.  The leader of the Republicans in the House said that financial reform was like -- I'm quoting here -- “using a nuclear weapon to target an ant.”  That’s what he said.  He compared the financial crisis to an ant.  This is the same financial crisis that led to the loss of nearly 8 million jobs.  The same crisis that cost people their homes, their life savings. 

He can't be that out of touch with the struggles of American families.  And if he is, then he’s got to come here to Racine and ask people what they think.  (Applause.)  Do you think we should fix -- I mean, maybe I'm confused.  Do you think that the financial crisis was an ant and we just needed a little ant swatter to fix this thing?  Or do you think that we need to restructure how we regulate the financial system so you aren’t on the hook again and we don't have this kind of crisis again?  (Applause.)

When you ask men and women who have been out of work for months at a time, who talk about how they’ve been barely hanging on, they don't think this financial crisis     was something where you just need a few tweaks.  They know it’s what led to the worst recession since the Great Depression.  And they expect their leaders in Washington to do whatever it takes to make sure a crisis like this doesn’t happen again.  And so there may be those in Washington who want to maintain the status quo, but we want to move America forward. 

There are some folks who are against raising the limit on what companies like BP have to pay if they cause an environmental disaster.  A few of them said they were against the $20 billion fund that we set up to make sure that workers and businesses in the Gulf whose livelihoods have been harmed by the oil spill would get compensation.  The top Republican on the energy committee apologized to BP.  Did you all read about that?  He apologized to BP that we had made them set up this fund.  Called it “a tragedy” that we had made them pay for the destruction that they had caused.  Now, I got to say, they pulled it back after -- he meant it, but then they kind of walked it back.  (Laughter.) 

I mean, the tragedy is what the people of the Gulf are going through right now.  That’s the tragedy.  And our government has a responsibility to hold those who caused it accountable.  (Applause.)  They want to take us backwards.  We want to move forward.  (Applause.) 

Some of these same folks want to maintain the status quo where we just rely on oil and other fossil fuels for all of our energy needs, even though we know that our dependence on these energy sources is a problem because they’re finite.  They’re going to run out, and that jeopardizes our national security and our prosperity and our planet. 

So I want to move forward.  I believe it is time for this country to embrace a clean energy future.  (Applause.)  I don’t want clean energy jobs to go to China.  I don’t want them to go to Germany.  I want those industries to take root right here in the United States of America.  (Applause.) 

So already -- already we’ve provided entrepreneurs and small business owners with tax credits and loan guarantees that’s led to 720,000 clean energy jobs -- will lead to over 700,000 jobs in 2012.  These are good-paying, middle-class, American jobs.  I’ve seen them.  I’ve gone to wind turbine plants where they’re creating wind turbines, and gone to solar plants where they’re making the latest generation of solar panels.  And we’ve created an entire new advanced battery industry here in the United States.  So where we were only getting 2 percent of that market, we’re now going to be getting 40 percent of that market.  That was all done through the Recovery Act.  (Applause.) 

We’ve got to build on that progress, not undo it.  That’s why we need to pass legislation that makes clean energy the profitable kind of energy for America’s businesses.  We’ve got to have a national mission to change the way we use energy and produce energy.  And you know what, it will be good for our economy.  It is going to drive our economy in the 21st century.  It is not time for us to look backwards, it’s time for us to look forward right now when it comes to energy policy in this country.  (Applause.) 

So, look, these are incredibly challenging times for America, especially for families who’ve been hurt by this recession.  And, you know, one of the things that I’ve tried to do is always be straight with you when I was running and as President.  The problems we face aren’t going to go away overnight.  No President, no politician, has the power to make that happen. 

There will be some who tell you that the closer you get to election day -- (laughter) -- but the fact is some of these challenges have been building up for decades.  Making sure that our schools are prepared to -- are preparing our kids to compete in this new global economy; making sure that our health care system is efficient and provides good, quality care to everybody; making sure that we are at the forefront of a clean energy future; getting our budgets under control -- all those issues are issues that have been building up for decades. 

So we’re not going to fix them overnight, but what we can do is make a choice about which direction we want to take this country.  What we can do is what we’ve always done, which is shape our own destiny as a nation. 

The interests of the status quo, they’re always going to have the most vocal defenders, the most powerful defenders.  There will always be lobbyists for the banks and the insurance industry that doesn’t want more regulation, for companies that would prefer to see tax breaks instead of more investment on infrastructure or education.  And let’s face it -- for some of us, just voters, the prospects of change are kind of scary, even when we know the status quo isn’t working for us.

I mean, you remember all the fear-mongering that was going on during the health care debate -- right, remember?  All of you were told, you’re going to lose your health care.  It’s going to be socialized.  The government is going to come in and death panels are going to be set up and -- remember that?  And now, we’re about three, four months into it, and everybody is looking around and -- (laughter.)  But at the time -- at the time it was scary.

And the other thing is, there are no powerful interests to lobby for a clean energy future that may be starting years from now, or the research that may lead to the life-saving medical breakthrough a decade from now.  There aren’t powerful lobbyists for the student who may not be able to afford a college education right now but if they got that college education would end up starting a business that would create thousands of jobs here in Wisconsin. 

It’s our job as a nation to advocate for the America that we hope for, to fight for the future that we want for the next generation -- even if it’s not always popular, even if it’s not easy, even if we’re not benefitting in the short term.  And if we do that now, if we set up that foundation, I am positive that we are going to create the kind of America that we want for the next generation.  Our better days are ahead of us, not behind us, but we got to fight for that future.  I want to fight with you.  I want to fight alongside you for that future, Racine.  (Applause.)   And I’m absolutely positive that if we can unify the country, if we have the courage to change, then nothing can stop us.

Thank you.  Thank you, everybody.  God bless you.  Thank you.  Thank you.  Thank you, everybody.  Thank you.  I’m going -- thank you.  (Applause.)

All right.  Everybody, take a seat again.  We've got time for some questions, all right?  (Applause.)  So we've got people in the audience who’ve got microphones, so if you will wait until I call on you, and then somebody with a microphone will come.  I'm going to go girl, boy, girl, boy -- (laughter) -- so we know it’s fair. 

All right, so I am going to start with this young lady right here, right in front.  You don't have to cheer.  (Laughter.)  Cheering for yourself here.  All right, can you see her right here?  Can somebody get her a microphone?  There you go.  You can just hand it to her, it will be all right.  I know they told you -- go ahead.

Q    I just want to know what you plan on doing with the mortgage companies that were bailed out and that are not really helping the people, that won't modify these loans.  I want to know what’s going to be going on with that.

THE PRESIDENT:  Okay.  You know, one of the -- obviously part of what triggered this entire crisis was what was going on in the mortgage industry.  American homeownership -- that's always been such an important symbol of the American Dream, right?  Having your own home.  And so I think that part of what’s happened over the years was it was easier and easier to get a mortgage.  And some of that was good, but unfortunately what you started seeing were what were called these sub-prime loans.

So people were told, you know, you don't have to put any money down, don't worry about it, zero interest.  But when you read the fine print, your mortgage was adjustable and if home values didn’t keep on going up and up and up, then suddenly you might find yourself in a situation where you just couldn't pay your mortgage. 

What was worse was that all the big investors and bankers on Wall Street were investing in these sub-prime loans, so they would pour huge amounts of money into the mortgage industry -- nobody was really seeing whether these mortgages were ones that people were going to have the salary to sustain. 

So when you started seeing people defaulting on these mortgages, it not only hurt the person who was in danger of losing their home, suddenly the whole banking system -- which was resting on top of all these loans -- started getting shaky.  And that triggered a panic.  And then suddenly, banks weren’t willing to lend to each other.  And it all just started unraveling.

And that's why we had to step in so aggressively, because at a certain point nobody was getting any loans.  Even if you had a good credit rating, even if you had an ample salary, you just couldn't get a loan for your business, you couldn't get a loan for -- to buy a car, you couldn't get anything.

Now, we have been able to settle the markets down and stabilize them so that now it’s possible for people to get mortgages and get auto loans and it’s possible for businesses to get credit -- although small businesses are still having a problem.  But that underlying problem of the housing market is still there.

Now, part of it is there are some folks who really just couldn't afford the home that they bought.  And it might not be their fault -- they were fooled into thinking they could afford it -- but no matter how much we help, they’ve just got too much house for their salary.  And so the best we can do there is to try to help them find other options and not lose too much money.  And we have programs to do that.

We've also been pushing the banks -- who we helped -- to say that if you’ve got somebody who actually could afford their home, but what happened was their home values dropped so quick that right now they’re what’s called underwater, where the loan is worth more than the house -- try to make an adjustment, because you're better off -- everybody will be better off if you make an adjustment so that people are still paying their mortgage but you reduce some of the interest or the principal so that they can stay in their home over the long term.  That will be better off for the bank than if that person who has the mortgage goes into foreclosure.

So we've got programs now that we've set up to help people who can afford to stay in their homes, but just need a little bit of help, a little bit of adjustment at the margins. 

But I've got to caution everybody here because sometimes we'll get letters and people say, you know, I'm not getting help staying in my home.  And I feel bad for them, but some of them just, no matter how much money we put into it, their salary just doesn’t support the mortgage that they have and we can't make a big enough adjustment.

So you are going to see foreclosures.  You’re going to see some folks lose their homes.  What we have to do is to make sure, number one, that they land in a decent rental situation or maybe a different house, provide them some help and counseling, and we're doing that, cooperating with state and local officials.

The second thing we've got to do is make sure that we've got regulations in place so that people don't get tricked into buying homes that they can't afford again.  And that's part of this financial regulatory bill that we set up.  (Applause.)  So a lot of the predatory practices, a lot of the fine print that made people think they were getting a fixed-rate mortgage and then they find out suddenly it’s a adjustable-rate, balloon mortgage -- so they thought they were getting 5 percent interest rates, and the next thing they know they’re paying 10 -- a lot of those practices now are going to be subject to regulation and oversight.  (Applause.) 

Because we don't want to go through anything like this again.  It’s not fair for the person who buys the home, and it’s not fair for everybody else who ends up having to help Wall Street because of their irresponsible behavior. 

All right?  Okay, a gentleman’s turn.  The gentleman right there -- yes, right there, in the striped shirt.  You, yes.  (Laughter.)  There you go.

Q    Thank you, sir.  I had heard something and read about it on the Internet -- you wanted the civilians to be just as strong and well-funded as our military.  What are your plans to go about constructing that?

THE PRESIDENT:  I'm sorry, could you repeat the question?

Q    Sorry, nervous.  I saw an interview where you said that you wanted the civilians to be just as strong and well-funded as our military.  What are your plans to go about constructing such a thing?

THE PRESIDENT:  Well, I don't know exactly the interview you're referring to, but if I was talking about civilians versus military, I was probably talking about in the context of our federal workforce.  If you take a look at it -- first of all, our military has just been extraordinary.  So much burden has been placed on them -- (applause) -- I mean, they’ve been fighting two wars now for a long time.  And, frankly, a lot of folks have been going about their business, not really changing how they behave.

People in uniform have made all kinds of adjustments and their families have made all kinds of adjustments and sacrifices.  That’s part of the reason why, even though I’ve frozen discretionary domestic spending, I haven’t frozen the budgets that are needed to give pay raises to our troops, to make sure that our veterans are properly cared for, to make sure that their families are getting support on things like child care.  (Applause.)  Because my attitude is, we’ve got a solemn obligation to those who put on the uniform to protect the United States of America. 

And in the past, there have been times, frankly, where we didn’t live up to that obligation.  I mean, Veterans Affairs is a great example.  When we came in, for all the talk about how we were going to take care of veterans, the truth was the backlogs were so bad and a lot of the facilities for veterans were just not up to snuff.  So we actually raised the Veterans Administration’s budget by 11 percent -- the biggest hike in 30 years -- just so we could catch up and start making sure that our veterans got the kind of care that they deserve.  (Applause.) 

Now, but what I may have been referring to is this.  When you look at a place like Afghanistan, or you look at a place like Iraq, so many of our military personnel are having to engage in work that really should be civilian work -- helping to build schools, helping to build bridges, helping to set up rule of law and courts, helping -- agricultural specialists to help people learn how to irrigate their fields so that they can grow more food.  And the problem is, is that we don’t have a civilian effort that has always matched up to the military efforts. 

So the military goes in there, they clear out everything, they’re making everything secure -- and now the question is, all right, can we get the civilians to come in to work with the local governments to improve the situation.  And a lot of times, that civilian side of it has been under-resourced.

So what I’m trying to say is, don’t put all the burden on the military.  Make sure that we’ve got a civilian expeditionary force that when we go out into some village somewhere and the military makes it secure, let’s have that agricultural specialist right there.  Let’s have that person who knows how to train a police force right there.  Let’s have all those personnel and let’s make sure that we are giving them the support that they need in order for us to be successful on our mission.

And that means that --by the way, the State Department, our diplomatic arms, we’ve got to give them more support.  A lot of times -- we really support our military, but I’ll be honest with you, when you go up to Congress and you start talking to them about the budget for training our diplomats and training our development specialists and all that, then people want to cut their budget because they think, well, that’s just foreign aid, that’s not -- we don't want to spend our money on that.

But the problem is, is that if you shortchange that, you may end up having to send our troops in to a very dangerous situation because a country has collapsed.  We didn’t do the good diplomatic work and it’s too late, and now the only solution is a military solution that might cost us five times as much.  So we’ve just got to be smart about using all the elements of American power, not just one element on American power.  All right?  (Applause.)

Okay.  Right there in the green.  Right there in the green blouse.

Q    First of all, thank you very much for all that you do.  (Applause.) 

THE PRESIDENT:  Thank you.    

Q    I would like to continue on the subject of the military just a little bit.  Would you consider improving the quality of life of our military men and women in a couple areas -- one would be more counseling, more available; eliminating that stigma, that terrible stigma that’s there.  And the other one would be if they are actively in a war zone and they are deployed back to the United States, could we be sure that they have time to reground themselves before they are sent back into a similar situation again?  (Applause.) 

THE PRESIDENT:  Absolutely.  Well, you’ve just identified two things that we’re working on as we speak that are really critical.  The first is making sure that counseling support for our troops is there in theater as well as when they get back home.  And there has been in the past this sort of stigma around mental health issues.  But you know what, if you send somebody into a war zone, that’s going to be a shock on the system.  They may engage in enormous heroism, enormous courage -- our troops do just spectacular things, but it’s going to have an impact.  And when they’ve been on two tours or three tours or four tours sometimes, that impact adds up. 

And in the past, things like Post Traumatic Stress Disorder weren’t really talked about.  Now we’re starting to talk about it.  And we’ve actually -- I was mentioning what we’re doing for veterans as well as active duty -- this whole issue of Post Traumatic Stress Disorder, PTSD, we are really emphasizing this.  And up and down the chain of command, we’re saying people should not be embarrassed about seeking out counseling in these situations.  So that’s point number one.  (Applause.) 

The second point you’re making is there needs to be that rest in between deployments, and that’s part of the reason why we actually increased the number of Marines.  The Army and Marines have really borne the biggest burden in terms of these very quick and rapid and stressful deployments.  And what we’ve been saying is let’s start getting back to a point where there is ample time between deployments.

And we are actually -- for the Marines I think we’re just about there.  For the Army, I think we’ve got another year before we get it to where we want to be, although we’ve spaced it out a lot more than it was, for example, two years or three years ago.

But you’re right -- people need to be able to decompress in ways that they have not always had a chance to do.  So thank you very much for your question.  (Applause.)

All right, let me make sure the folks up here are getting -- I’ll call on that gentleman way up there.  Way  -- yes, you, right, that guy. 

Q    Thanks for coming to see us.

THE PRESIDENT:  You bet.  (Applause.) 

Q    I’d recommend the O&H Kringle and the Johnsonville brats.  (Laughter.)  My question is if you could remind us why the stimulus spending was a good idea and how we should judge its effectiveness at this point in time.

THE PRESIDENT:  I think it’s a great question.  Here’s what happened.  As I said, when I came in, we were losing 750,000 jobs a month and the economy was contracting at about 6 percent, which is just a huge contraction.  And that was happening at every level.  That was happening in terms of individual consumers because either they were losing their jobs or they were worried about maybe losing a job, they had seen their home values plummet, et cetera.  So everybody pulled back on spending.  Right?  People would say, you know what, I better cut out the -- that dinner out, or maybe I’m not going -- I’m going to cancel my gym membership.  Everybody was doing some belt-tightening either because they had seen their 401(k) drop, or they had lost their job, or some reason, right?

Businesses then they’re starting to say, you know what, I’m losing consumer -- customers, because the gym membership just got cancelled, so suddenly I’ve seen a 5 percent drop in the number of customers I have; or if you make widgets, suddenly you’re supplying an auto company and the auto company says, you know what, people aren’t buying new cars right now.  So that demand was going down.

All this meant that the state and the local governments, suddenly their revenues are dropping because most of their revenues are based on things like sales taxes or property taxes that were all going down.

So what you have is suddenly what’s called a negative cycle where everybody is worried about the recession, so they pull back, which means that businesses pull back, which means they lay off people, which makes them more worried and they pull back.  And pretty soon you’ve got a vicious cycle where the economy just keeps on shrinking and shrinking with no end in sight.

So the job of the Recovery Act was to essentially step in and say, you know what, this is an emergency so we’re going to plug that hole in demand in the economy temporarily so that everybody kind of settles down. 

So we sent -- about $250 billion, about a third of that Recovery Act was in the form of tax cuts to all of you.  You may not have noticed it because it just went into your weekly paycheck.  But everybody here -- I won't say everybody because if you are really rich you might not have gotten one.  But 95 percent of workers, 95 percent of workers got a tax cut last year.  (Applause.) 

So what that meant was even though you had seen your 401(k) go down, or maybe you're a small business owner and you are tightening your belt, you had a little bit of extra money to cushion the blow.  And that meant you were spending those dollars and circulating those into the economy.  All right?  So that was about a third of it.

About a third of it was help to states and local governments so that they could plug their budget holes.  So, for example, Jim Doyle here I think will testify, had we not provided this federal aid, the states would have had to cut much more severely police officers, teachers, firefighters, and so forth.  Now, not only is that bad in terms of people then not getting services and being less safe, or kids not -- having a larger class sizes or all those things, but obviously when those people lose their jobs they can't spend money buying a new car or buying clothes or buying the computer for their kids.  So it was  -- it put the states and local governments in a better position to kind of sustain themselves.

And then the last third of it was infrastructure and long-term investments.  So, for example, we've got more road projects going on here in Wisconsin and around the country than at any time since -- (applause) -- road projects, sewer projects, a whole bunch of deferred stuff that needed to be done.  But we also looked to the future, and we said let’s invest in clean energy; let’s invest in research and development; let’s invest in broadband lines to link rural communities with -- who don't have broadband lines, so they can be part of the global economy -- all those infrastructure investments and R&D investments not only put people back to work short term to help plug that hole that had been created, but it also lays the foundation for long-term economic growth. 

So that here in Wisconsin, there may be some roads that not only were repaired, but also were suddenly linked up to create a new industrial park that would facilitate long-term economic development beyond this immediate crisis.

So those were the things that we did through the Recovery Act.  Now, every economist who has looked at it has said that the recovery did its job.  It put a brake on the collapse of the economy.  We avoided a Great Depression.  We are now growing again.  The problem is, number one, it’s hard to argue sometimes, things would have been a lot worse.  Right?  So people kind of say, yeah, but unemployment is still at 9.6.  Yes, but it’s not 12 or 13, or 15.  People say, well, the stock market didn’t fully recover.  Yeah, but it’s recovered more than people expected last year.

So part of the challenge in delivering this message about all that the Recovery Act accomplished is that things are still tough, they just aren’t as bad as they could have been.  They could have been a catastrophe.  In that sense, it worked.

Now, the other reason that it has been -- it has generated some controversy is, for example, I just pointed out the fact that 95 percent of you got a tax cut and most of you didn’t know it.  Most of you didn’t know it.  Now, the reason you didn’t know it was because it turns out that economists will tell you if you give that tax break to people each time they get a paycheck, as opposed to in one lump sum, then they’re more likely to spend it, and that is a better way to stimulate the economy.  It wasn’t a good way to advertise the tax cut.  So if I had been just thinking politics I would have sent you one big check with my picture on it -- (laughter) -- and said, here’s your tax cut.  (Applause.) 

In terms of infrastructure, it turns out the way we structured this, because we knew this was such a bad recession that 2010 would still be pretty bad, even though it was better than 2009, we structured it so that not all the money was spent in 2009; some of it was spent this year.  So a lot of the road projects you're now seeing are part of the Recovery Act we passed last year, but last year everybody was looking around saying, how come we haven't created more jobs yet? 

But we structured it because we knew that we didn’t want it all to be front-loaded and not have anything -- and have it run out too quick.  (Applause.)   

Now, here’s the last point I want to make, last point I want to make.  Having said all that, I'm still not satisfied with where we’re at.  We're growing at about 2.5, 3 percent growth.  We need to be growing at 4 percent or 5 percent.  So there are still more things we can do.  I mentioned a couple of them.  We should pass a bill that helps small businesses get more loans.  (Applause.)  If we can help the big banks, then we should certainly be able to help small business lending.  And a lot of small businesses are still having trouble getting credit.  We've done some work on that, but we can do more. 

I think that we could spur more economic development  -- here’s one idea, just an example, something that we've been promoting, but hasn’t passed through Congress yet.  Everybody would benefit from more energy-efficiency in their home.  The problem -- and everybody knows that.  I mean, the truth is -- I was back home in Chicago the other day -- it’s nice when you're in your own house and -- I mean, the White House is nice, don't get me wrong, but -- (laughter) -- you know, you just like kind of tooling around your own place, and seeing how the garden is doing, and looking in the basement, seeing what kind of stuff needs to get done.  But everybody, every homeowner here, if you haven't already done it, you could probably retrofit your home and save 10, 15, 20 percent on your electricity and your heating bills.

But the problem is a lot of people don't have cash right now to make the investments.  So what we've said is, why don't we give everybody a tax credit to retrofit their homes.  That will help Home Depots and Lowe’s, where you’re buying the insulation or the new windows.  That will help a lot of these small construction companies that have been out of work -- they were doing remodeling on homes and now that business isn’t there -- give them a little bit of business.  All that would help stimulate the economy.

You could, with a relatively small investment, help put people back to work and, by the way, we could save on our energy bills and reduce the amount of greenhouse gases we're sending into the atmosphere.  So it’s a win-win-win situation. 

But we haven't been able to get particularly my Republican friends on the other side of the aisle to move on this.  So I'm going to make -- I know this is a long question, but it was -- long answer, but it was an important question.  I see you, Reggie.  Reggie is saying I'm going to have to go soon. 

Let me make one last point, and that is about the spending issue.  People I think have a very real and legitimate concern that after having spent $700 billion on the Recovery Act, after having intervened with the autos and had to deal with the banks -- even though, by the way, the banks will have paid back all this money, and the auto companies are now up and running -- GM and Chrysler -- and if we hadn’t intervened they would have collapsed and all those folks would have lost their jobs -- (applause) -- but the fact is, is that everybody looks at this and they start saying, you know what, that looks like just a lot of money going out there.  The debt is getting bigger, the deficit is getting bigger.  How do we get government spending under control?

And that's a legitimate question.  And whether you're a Democrat, an independent, or a Republican, all of us should be worried about the fact that we have been running the credit card on -- in the name of future generations.  And somebody is going to have to pay that back.  And by the way, when we borrow all that money, we have to pay interest on that -- to other countries and other investors.  So we've got to get our debt and our deficits under control.

Here’s the thing.  The steps we took -- the emergency steps that we took added, let’s say, a trillion dollars to our debt.  That's with a “t” -- that's serious money.  But our structural deficit -- and what that means is the amount of money that we're paying out versus the amount of money we're taking in -- the gap between what we're spending and how much money we have has been out of whack for years now.  That's why -- I inherited a $1.3 trillion deficit.

Our big problem is not the emergency steps we took last year.  Our big problem is the fact that when you add in what’s happening with Medicare, what’s happening with Social Security, the population is aging -- when you add all those things in, if we don't change how we do business medium and long term, then that's going to be our big problem.

So we've got a tough job, but I think it’s a job that we can accomplish.  And that is we stimulated the economy, we got it moving again, it’s growing again; we now have to, in a gradual way, reduce spending, particularly on those big-ticket items, but do so in a way that doesn’t hurt people.  And that is a challenge.

That's why I set up a fiscal commission to take a look and figure out how are we going to reorder our priorities so that we're spending the same -- we're not spending any more than we're taking in, but we're doing it in a way that doesn’t hurt the economy and doesn’t hurt ordinary people.  And that’s going to be our project for the next couple of years.  All right?  But everybody is going to have to be patient because we're not going to be able to change that overnight.

All right, I'm going to take -- thank you for the question, though.  That was very helpful.  (Applause.) 

All right, I guess it’s a lady’s turn.  Okay.  I'm going to call on that young lady right there in the white t-shirt -- right, right there.

Q    One man cannot create this country again the way it needs to be built.  So we as a nation need to work together.

THE PRESIDENT:  Right.

Q    What are we doing as a nation to bring jobs back into this country that have left, so that we the people can give you the resources that you need to do the job you need to do?  (Applause.) 

THE PRESIDENT:  Well, it’s a great question.  Well, this actually connects to the previous question, because I was talking about what we were doing for the emergency, what we were doing for the local economy.  But obviously now we live in a global economy.  So we've got to compete with other countries like we've never had to compete before. 

It used to be that because you didn’t have an Internet, and you didn’t have jet planes, if somebody made something in China, they couldn't get it here fast enough to sell it, or it was too expensive to ship.  And so basically we had a protected market and whatever was made here we could sell here.  Now it’s a global market.

Some of that we can't stop.  I mean, that's just technology, the world has shrunk.  We've got to be more competitive.  And what that means is our workers have to be better trained than we've ever been, which means we've got to make sure our education system is the best in the world, and that our kids are going to -- (applause) -- get secondary school and community college and university educations. 

So back to that gentleman’s question up there -- people may not have known, but this Recovery Act was also the biggest investment that we've ever made in education in our history.  We -- at the federal level.  (Applause.) 

We helped universities and community colleges to create new labs and set up a better infrastructure.  And as part of the health care bill -- a lot of people don't know this -- that as part of the health care bill we also have an education bill in there.  It’s just the health care bill is getting so much attention, people miss the fact that we changed the rules so that the way previously the student loan program was working, it would go through a bank or a financial institution and they took out billions of dollars of profits even though the loan was guaranteed so they weren’t taking any risk.  So we said, well, if the government is guaranteeing this loan, why are we going through a bank?  Let’s just give it directly to the student.  We’ll take that money to reduce the cost of the loan.  (Applause.) 

So all those steps are critical to bring jobs back here, because companies will come to where they’ve got the most highly skilled workforce.  That’s point number one.

Second thing we’ve got to do is infrastructure, what I just mentioned.  If we’ve got a third-class infrastructure, it’s hard for us to have a first-class economy.  So we’ve got to upgrade our infrastructure.  And I don’t just mean the old infrastructure like roads.  I mean new infrastructure like broadband and wireless, and what are we doing in terms of making our electricity grid reliable and efficient.  Those are all investments that we make that help bring more jobs back to places like Racine.  That’s the second thing.

Third thing we’ve got to do is we’ve got to get control of our health care costs.  Part of the reason we did health care reform -- (applause.)  A lot of the reason to do health care reform was because it was the right thing to do.  I was tired of hearing stories about parents who were worried about whether they could get health care for their kids, or somebody with a preexisting condition who wasn’t able to get insurance because they were discriminated against. 

But part of it was it’s a huge burden on business.  The cost for businesses of health care have been going up and up and up.  And what we’re doing in health care reform is trying to control the costs of health care so that we’re improving quality but people are getting a better bang for their health care dollar.  That helps make our businesses more competitive.

And then we’ve got to put more money into research and development, because ultimately the jobs that are being created here are going to be created by small businesses, by start-ups, by entrepreneurs who’ve got a new idea.  And we’ve got to make sure that -- we’ve got make sure that we’re investing in research on things like clean energy, so that’s another aspect of it. 

A couple other elements -- in terms of our tax structure, one of the things that we’ve done -- one of the things we proposed was eliminating the capital gains tax for small businesses, because small businesses create businesses -- or create jobs.  Start-ups create jobs.  So there are things we can do with the tax structure that encourages more job creation.

And the last thing I want to talk about is trade, because I think a lot of people focus on trade and they say, you know what, that’s been the thing that has driven so many jobs away.  It is absolutely true that a lot of our manufacturing left to go to China and other low-wage countries -- and a lot of these were U.S. companies, by the way, but they took their operations over there and then they shipped the goods back.

And so we’ve got to make sure that the countries we’re trading with are being fair.  I believe in free trade.  I think we can compete with anybody in the world.  We’ve got the best workers in the world.  We’ve got the best universities in the world.  We’ve got the best ideas in the world.  We can sell to anybody.  (Applause.)  And I want to expand our exports.  I want to be able to sell products from Wisconsin all around the world.  (Applause.) 

But that means things have to be fair.  So, for example, if China has a currency that’s undervalued, that makes our exports more expensive, it makes their imports cheaper.  So we’ve been putting pressure on them to say, you know what, let’s make sure that we’re not favoring one side or the other in this trade deal.  If it turns out that there’s a country where they’re selling cars here in the United States but we can’t sell cars there, that’s a problem.

So we’re -- we want to enter into trade arrangements with other countries, but we want to make sure that there’s a quid pro quo; that if we open up our markets, they’re also opening up theirs.  And that’s got to be a top priority.  (Applause.)

All right.  Okay.  Let me -- I’ve only got time for one more question.  Only got time for one.  I’m going to call on this young man right here since he’s in front -- although it looks like there are two of them.  (Laughter.)  The other guy just sprung up -- did you see that?  (Laughter.)  All right, go ahead.

Q    My name is Gerald.

Q    And I am Spencer.

THE PRESIDENT:  I think they’ve practiced this.  (Laughter.) 

Q    All the way here.

Q    We go to the Prairie School here in Racine.

Q    We hope to go to college one day soon and --

Q    -- we were wondering about student loans.

THE PRESIDENT:  Well, you guys -- you were so busy practicing your question, you didn’t hear that I answered it over here.  (Laughter.)  I’m teasing.  What grade are you guys in?

Q    Seventh.

THE PRESIDENT:  You’re in seventh grade.  Well, first of all, you guys are very well-spoken young men, so very impressive.  (Applause.) 

Q    Thank you.

Q    Thank you.

THE PRESIDENT:  And I want everybody to note the attitude here, which is we want all our young people to just take for granted they’re going to college.  We want high expectations for our young people.  (Applause.) 

So here was the answer.  What we’re doing is we’re putting more money into student loans.  We’re also talking to universities and colleges about how they can control their costs so that tuition is not so expensive.  And we need to make sure that colleges and universities are doing their part.  They can’t just keep on jacking up rates 15 percent a year and then expect Uncle Sam to come in and help students pay more and more money.  So they’ve got to control their costs as well.

But if you guys do well in school, my goal is to make sure that, through loans and grants, you are going to be able to afford to go to college.  (Applause.)  And -- because we need to have the highest -- I want us to have the highest college graduation rate of any country in the world. 

And by the way, I want to make clear, this doesn’t just mean a four-year college.  (Applause.)  Community colleges are doing great work.  (Applause.)  And one of the things that we’re trying to do is to work with community colleges so that they can be matched up with businesses and employers to help set up -- sometimes it might just be a one-year training program, sometimes it might just be a six-month training program -- that would help workers train for jobs that are actually there, that actually exist, so that when you go through that program you know that there’s a job there for you. 

And part of the thing that you guys will discover, your generation, but it’s already true for the generation that’s now entering into the workforce, it used to be you went to work at one job and you might keep that job for 30 years.  Now, because the economy moves so fast, you might go into one industry and the industry might disappear 10 years later and you’ve got to retrain for a new industry.

And so not only do we want to make sure that you have the money you need for college in those first four years, or first two if you’re going to community college, but you have the opportunity for life-long learning, so that a worker who is 35 or 40 wants to suddenly make a career change, or suddenly they’ve got new computers and equipment in their plant and they’ve got to retrain, that they’ve got an opportunity to get that training so that they can keep on upgrading their skills, get more money, get a higher paycheck, get more job security. 

That’s what we’re fighting for.  We’re fighting for you. 

Thank you so much, everybody.  Great question.  Appreciate you guys.  Thank you.  (Applause.) 

END
2:32 P.M. CDT

Remarks by the President after Meeting with Fed Chairman Ben Bernanke

Oval Office

10:44 A.M. EDT

THE PRESIDENT:  Well, I just had an excellent conversation with Chairman Bernanke.  This is a periodic discussion that we have to get the Chairman’s assessment of the economy and to discuss some of the policy initiatives that we have here at the White House.

I think in our discussions, we share the view that the economy is strengthening, that we are into recovery, that it’s actually led by some interesting sectors like manufacturing that we haven’t seen in quite some time -- the tech sectors are strong; we have gone from losing 750,000 jobs per month to five months of job growth now; private sector job growth that is obviously so important to consumer confidence and the well-being of the economy overall.

But what we also agreed is that we’ve still got a lot of work to do.  There is a great concern about the 8 million jobs that were lost during the course of these last two years, and that we’ve got to continually push the pace of economic growth in order to put people back to work.  That ultimately is the measure for most Americans of how well the economy is doing. 

And although we’ve seen corporate profits go up, we have seen some very positive trends in a number of sectors, unfortunately, because of the troubles that we’ve seen in Europe, we’re now seeing some headwinds and some skittishness and nervousness on the part of the markets and on part of business and investors.  And so we’re still going to have to work through that.

The thing that I think both of us emphasized was that if we can make sure that we continue to do the things that we’re doing, deal with folks who need help -- so passing unemployment insurance, for example; making sure that we are working to get credit flowing to small businesses that are still having some difficulties in the credit markets; strengthening consumer confidence -- then we think that the general trends will be good, but we’re going to have to keep on paying a lot of attention to the labor markets and helping people who have been displaced during the last couple of years get back into the labor market.  So that’s going to be a major challenge.

We also talked about the financial regulatory reform package that has now cleared both the House and the Senate conferees.  It will now be going to both the House and the Senate.  This was a result of terrific work, I think, by my economic team, by members of the committee and Chairman Dodd and Chairman Frank, and some good advice from Chairman Bernanke in consultation during this process.

Not only will completion of the financial regulatory reform bill provide some certainty to the markets about how we are going to prevent a crisis like this from happening again, but it also ensures that consumers are going to be protected like never before on all the things day to day that involve interactions with the financial system.  From credit card debt to mortgages, consumers are going to have the kinds of protections that they have not had before.

We’re going to be taking a whole range of financial instruments that had been in the shadows and we’re going to be putting them in the light of day so that regulators can provide the oversight that potentially would prevent a future crisis.  We’re going to be in a position to resolve the failure of one institution without seeing it infect the entire financial system.

And this weekend at the G20, we talked about how we can coordinate effectively with the international community to make sure that high standards for capital and reduced leverage apply not just here in the United States but across the board.

So, overall, I think that, listening to Chairman Bernanke, I continue to be convinced that with financial regulatory reform in place, with a recovery well underway, that we have enormous potential to build on the hard work that’s been done by this team and put people back to work and keep this recovery and the economy growing over the next several years. 

But we can’t let up.  We’re going to have to continue to be vigilant.  I know that the Chairman feels the same way with respect to his role.  And we look forward to working together in our respective institutions to make sure that we keep this recovery going on track.

CHAIRMAN BERNANKE:  Thank you.  We had a wide-ranging discussion; I’m very appreciative of the chance to do that.  We talked about the outlook for the economy.  We talked about financial regulatory reform.  The President talked about some of the issues in that area.  But I think very importantly, we also talked a lot about the international context.  What’s happening around the world in the emerging markets, in Europe, affects us here in the United States and it’s important for us to take that global perspective as we discuss the economy.

THE PRESIDENT:  All right.

Q    Mr. President, are you at all concerned that the passing of Senator Byrd jeopardizes regulatory reform?  And how big a blow would that be to the economic recovery?

THE PRESIDENT:  Well, I’m concerned about the fact that a giant of the Senate and a personal friend of mine passed away.  I don’t think about that in the context of financial regulatory reform. 

I’m confident that given the package that has been put together, that senators, hopefully on both sides of the aisle, recognize it’s time we put in place rules that prevent taxpayer bailouts and make sure that we don’t have a financial crisis that can tank the economy.  And I think there’s going to be enough interest in moving reform forward that we’re going to get this done. 

But when I think about Senator Byrd, what I think about is somebody who, during the course of an unparalleled career, not only helped to transform the institution of the Senate but, through his own personal transformation, embodied the kind of changes in America that have made us more equal, more just, more fair.  And he will be sorely missed.

END
10:51 A.M. EDT