Remarks by the President at DNC Fundraising Dinner

National Museum of Women in the Arts, Washington, D.C.

February 4, 2010

8:05 P.M. EST

THE PRESIDENT:  Hello, everybody!  Thank you!  Thank you!  Please, everybody, have a seat.  Especially Tom McMullen and Dikembe Mutombo.  (Laughter.) Every time I stand next to them I look like a little kid.  (Laughter.)

I want to thank three people who are just extraordinarily important to the project of rebuilding our country and have just been great friends of mine, great friends of the Democratic Party.  You already heard from one -- please give it up for Governor Tim Kaine.  (Applause.)  Our DNC finance chair, Jane Stetson, who's racking up a lot of frequent flier miles.  (Applause.)  And Andy Tobias, our DNC treasurer -- hey, Andy.  (Applause.)  

It is great to see all of you here tonight, wonderful to see so many good friends, many of you who were there from the beginning of this campaign.  And I want you to all know that I appreciate everything that you've done -- not just for the campaign, but also what you've done for the country and what you've done for the party.

Many of you were invested in this campaign at the very beginning when nobody could pronounce my name.  (Laughter.)  And you’d tell your friends, there's this young guy, I really think he's got something.  "What's his name?"  Barack Obama?  (Laughter.)  Yeah.  So you had to confront a lot of skepticism, a lot of confusion.  Some of you were involved in a campaign for the first time, and some of you got involved for the very first time in a very long time -– because you believed that we were in a defining moment in our history and that your voice could make a difference.

Not a single day goes by where I don’t think about all the time and the energy, the money, the commitment, the unyielding faith that you put into our campaign -- because it wasn’t just about winning an election; it was about changing a country.

Last year, we asked you to take on something new.  We asked you to help us keep the promises that we made in the campaign -- help to bring about the changes that we had talked about together.  And a lot of you have worked hard to do that.  You've continued to be engaged in education policy, in foreign policy, and helping us at a grassroots level, and continuing to finance our ability to get our message out.  And it matters.  It's made the successes of the last year possible. 

Sometimes I think we got so many things done so quick that people forgot.  But let's just think about this.  We upheld the principle of equal pay for equal work.  (Applause.)  We lifted the ban on stem cell research and restored science to its rightful place in America.  (Applause.)  We provided health care to 4 million children who now have it who didn’t have it before. (Applause.)  We passed the strongest veterans budget in decades. We protected families from getting ripped off by credit card companies, and children from being targeted by big tobacco, and helped consumers deal with the twin plagues of mortgage fraud and predatory lending. 

We appointed Sonia Sotomayor to the Supreme Court.  (Applause.)  We passed a service bill named for Ted Kennedy that’s giving young and old a chance to serve their country and their communities.  (Applause.)  We're working with Congress to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are.  (Applause.)

Oh, and by the way, and in the meantime, we prevented the worst financial crisis from getting even worse -- (applause) -- turned the economy from contraction to expansion; made the largest investment in clean energy in history; the largest investment in education in decades.  (Applause.)  Expanded the Pell Grant program; dealt with a H1N1 virus on the side.  

That’s what your support has helped us do at home.  Abroad, we’ve begun a new era of engagement.  We’re working with our partners to stop the spread of nuclear weapons, seeking a world free of them.  We’re working with other nations to confront climate change.  We are now a leader and not a follower in that critical mission.  (Applause.)  We banned torture.  We’re rebuilding our military.  We're reaffirming our alliances.  We've begun to leave Iraq to its own people, as I committed to doing in the campaign.  (Applause.)  And we’ve charted a new way forward in Afghanistan and Pakistan.  We’re making progress every single day in taking the fight to al Qaeda and across the globe. 

And I went to Cairo on behalf of the American people to begin a new dialogue with the Muslim world.  (Applause.)  We're living up to our obligations as a wealthy nation, helping to promote food security around the world, helping to deal with diseases around the world.  We're living up to a moment that demands American leadership by standing with the people of Haiti as we speak.  (Applause.)

So in ways large and small, we've begun to deliver on the change that we talked about, the change that you believed in and that you campaigned hard for.  But the reason that you and I are here tonight is because we're not done.  We've got a lot more work to do.

As I said, the day we took office we confronted a financial system on the verge of collapse; we were losing 700,000 jobs per month; a $1.3 trillion deficit; two wars that, frankly, had not been paid for and were costly in every sense of the word.  A lot of the solutions we proposed, the decisions we took, they weren’t quick, they weren’t easy, and they weren’t popular.  But we decided we were going to go govern.  We were going to put politicking on hold to get this country out of the mess it was in.  

I mentioned this to a group I spoke to earlier.  You know, pundits act surprised about the fact that we spent so much political capital.  Well, you know, I didn't get elected to play it safe.  And I didn't govern, and I don't govern by checking the polls every few days.  I know that's the habit in Washington, but that's not the obligation I owe the American people; that's not the promise I made to you.  And because we took bold and swift and coordinated action, we can stand here today and say we averted another depression.  We broke the back of the recession. The economy is growing again. 

So the worst of the storm has passed.  But, as all of you know, the devastation remains.  We've got 10 percent unemployment.  Many of you watching at home, as you go around the country and your individual communities, you see the stores shuttered and the foreclosed businesses; friends and neighbors, family members who still can’t find work.  This is on top of a decade that had been tough for middle-class families all across the country.  They hadn't seen their incomes go up in years.  Their costs skyrocketing at the same time as their wages were stagnant. 

For two years I heard stories, all across the country, everywhere I go.  I heard stories about people trying their best to hold on; a family sitting around the kitchen table wondering if they were going to be able to retire on schedule; if they were going to be able to finance a college education for their kids; wondering when would health care costs stop climbing, when would their premiums start stabilizing.  People started expressing doubts about whether the dream that generations built and defended -- the American Dream -- was slipping away.

That's the reason I ran for President.  That's the reason you supported me.  And that's why we are going to continue to do everything we can to create an economy that hasn’t just recovered back to the status quo, but an economy where hard work is valued and responsibility is rewarded; and where businesses are hiring and wages are rising; and where our middle class is getting stronger and more secure.

Now, our most urgent task is job creation –- that was our number-one priority last year and our number-one priority this year.  And the first task was to make sure the economy is growing.  It is growing.  But we've got to do more.  So we're going to give tax breaks and loans to small businesses to help them hire new workers, and raise wages, and invest in new plants and equipment.  We’re going to put even more Americans to work on clean energy facilities and upgrading our infrastructure to meet the challenges of the 21st century. 

We’re going to create incentives for consumers to make their homes more energy-efficient, creating jobs and saving families money.  And we're going to look at our tax code, because it's time we ended practices like giving tax breaks to companies that ship jobs overseas instead of investing in companies that are creating jobs right here in the United States of America.

But the truth is, these steps alone won’t make up for 7 million jobs that have been lost over the last two years.  They're not going to, alone, provide the economic security that's been dwindling for middle-class families over the last decade.  The only way we do that is to lay a strong foundation for growth, over the long term.  And the things that we talked about during the campaign are the things that still need to be done.  They've been put off by Washington for too long.

And this is where change gets hard.  Change is easy if you're just talking about tinkering around the edges.  Change is harder when you actually dig in and try to deal with the structural problems that have impeded our progress for too long. This is where we run headlong into the lobbyists and the special interests, and the bitterness and misinformation that characterizes so much of our politics -- which means that some of you may be feeling discouraged, because it feels like things have taken longer than you might have expected.

Well, don’t be discouraged.  I'm not discouraged.  I knew this was going to take a long time, but I knew the fight was worth it.  And we've got to keep up on this fight.  The forces of the status quo, they may not give an inch, but I don't give an inch either.  And you shouldn't give an inch either.  (Applause.) We didn’t come this far to put things off, or to play it safe, or to take the easy road.  That wasn’t why we were elected.  We came here to solve problems -- for the next generation, not for the next election.

That means opening up this government to the people.  That's why we post all our visitors online.  That's why we've excluded lobbyists from policy-making jobs and seats on boards and commissions.  That's why I’ve called on Congress to put their earmark online so everybody can see what's going on.  That's part of the change that we promised. 

We've got to change the tone of government and politics here in Washington and all across America.  I'm not going to give up on that either.  You know, the American people are right to be frustrated about a Washington where every day is Election Day -- and the basic theory is, "If you lose I win."  Where we're not measuring success by what we're doing for the American people, but how we look in the latest Gallup.  No wonder people are frustrated. 

That’s why I went to the House Republican caucus the other day.  We had a good discussion -- (laughter) -- about the challenges that are facing the American people, our ideas to solve them.  That was good for the country.  It's good for our democracy.  I had fun. 

Now, there are some issues that Democrats and Republicans aren’t going to agree on, and that’s okay.  Vigorous debate is healthy.  We’re going to tussle from time to time.  And you know what -- there may be some issues that we do agree on, or at least we say we agree on.  And we have to test whether or not people are serious.  So I told my Republican friends I want to work together with them where I can -- and I meant it.  Because I don't want to just score political points.  I've got time to campaign down the road.  In the meantime, there's a lot of work that we've got to get done together.  And we can get a lot done together. 

And I told then I will also call them out if they say they want to work on something and then when I offer a hand I get nothing in return.  The American people have to understand that. The old playbook of just blocking everything -- I understand that's easier than actually doing something, and sometimes it may be more politically effective.  But that's not what's going to move our country forward.

That’s why I’m here.  That’s why you joined our campaign.  That’s what you’ve helped deliver over the last year.  That’s why I need your help now.  That's why Tim and everybody in the party needs your help now.  Because you know as well as anyone that change doesn’t come without a fight.  We’ve got some fights to wage.  We've got some fights to make sure that we're sparking innovation and igniting a clean energy sector where American workers are making solar panels and wind towers and cutting-edge batteries for the new plug-in hybrid, that leads on clean energy  -- because the economy that leads on clean energy I believe is going to lead the global economy.  And I want America to be that nation.  (Applause.)

We’re going to keep fighting to make sure that America has the best education possible for every child.  And we're going to reward success through our Race to the Top program.  We want every child to meet their potential, and that's why we're going to make sure that young people all across America can afford college without going broke.  (Applause.)  That's a priority.  We can do that.  And we can do it this year.  

We’re going to keep fighting for common-sense rules of the road for Wall Street.  I want to be clear -- there's a lot of talk about Wall Street, Main Street -- we need a financial sector that works.  That's a priority.  We need businesses that are thriving, and they've got to raise capital; that will help them hire workers.  So there's no separation between our financial system and the real economy.  That's part of what this crisis has reminded us.  But we've got to ensure that our economy isn't brought to its knees by outdated and antiquated financial rules and the irresponsibility of a few.

And that's why I expect Democrats and Republicans to want to make sure that we don't find ourselves in this same situation again.  That's why we have to have financial regulatory reform.  And, yes, that is why we're going to fix the health care system  -- (applause) -- a health care system that too often works for insurance companies better than it does for individual Americans.

And again, I didn’t take this on because it was easy.  I got David Axelrod -- he does all the polls.  He whispers in my ear, man, this health care thing is hard.  (Laughter.)  I am a amateur historian, so I know that seven Presidents starting with Teddy Roosevelt couldn't get this done.  We understood this was going to be hard. 

But I took it on not for its political value; I took it on because families are dealing with skyrocketing premiums and skyrocketing out-of-pocket costs, and insurance companies that routinely deny coverage because of preexisting conditions -– or drop people altogether when they get sick.  We took it on because the costs were killing small businesses, and creating an uneven playing field for our international companies, and it was eating into workers’ take-home pay and canceling raises.  And we took it on because it’s the single best way -- in fact, the only way -- that we are actually going to get control of our federal budget.

So when I hear "deficit hawks" out there who say they want to control the federal budget and aren’t willing to do a darn thing about the skyrocketing costs of health care, I get a sense they're not entirely on the level.  Because our proposal for health care reform, according to the Congressional Budget Office, would bring it down by $1 trillion over the next two decades.  And even in Washington that's a lot of money.  (Applause.) 

I took it on because every single day, 15,000 Americans join the tens of millions who don’t have health insurance -- and 18 million -- 18,000 Americans die because of the lack of health insurance.

That's what we campaigned on.  That's what we're working to get it done -– with Democrats and with independents and with Republicans.  We want to bring down costs and end the worst insurance practices, and finally give every American a chance to have the security of quality, affordable health care.

I am not going to walk away from those fights.  And I don't expect you will either.  You've come this far.  The odds were a lot less that I'd ever be standing here than they are that we can solve some of these big problems.  I mean, think about it.  Tim was -- (applause) -- when Tim endorsed me in Richmond, first endorsement I got outside of Illinois of any elected official -- here he is, newly minted governor for the Commonwealth of Virginia -- there was one thing that was clear, and that is he was term-limited.  (Laughter.)

But don't you guys -- you remember this.  Nobody gave us a chance.  This campaign was declared dead -- what -- 10 times.  (Laughter.)  You know, the same folks who are now writing about what next, and what's happened to the Obama -- these are the same folks who were writing about how he doesn’t stand a chance; how after New Hampshire, that was it.  After Pennsylvania, that was it.  Right?  We went through this.  And they were saying your faith was misplaced and you set your sights to high, and your hope is naïve, and Washington won't change.  And now all of them are feeling like, see, we told you, Washington doesn’t change.  And they're feeling kind of self-satisfied about the fact that we haven’t yet gotten health care done.

Well, let me tell you something.  You didn’t listen to those voices then.  Your voice proved them wrong.  You proved that nothing can stop the power of millions of people who want to see an America that's living up to its values and its ideals.  That’s what you did.  And that’s what I’m asking you to do again.  (Applause.)

This is an extraordinary moment.  I want to remind you we don't quit.  And I don't quit.  (Applause.)  And we are going to bring about the changes that you believe in and I believe in, and that ultimately will help our children and grandchildren believe as they grow up -- an America in which everybody has got a decent shot at life; in which we're leading in innovation; in which we're proud of our foreign policy.

That's what we were fighting for then.  That's what we're fighting for now.  We’ve taken some good steps.  We got many miles to go on this journey.  I hope you join me.

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

END
8:27 P.M. EST

Remarks by the President at the National Prayer Breakfast

Washington Hilton
Washington, D.C.

9:08 A.M. EST

THE PRESIDENT:  Thank you.  Thank you very much.  Please be seated.

Thank you so much.  Heads of state, Cabinet members, my outstanding Vice President, members of Congress, religious leaders, distinguished guests, Admiral Mullen -- it's good to see all of you.  Let me begin by acknowledging the co-chairs of this breakfast, Senators Isakson and Klobuchar, who embody the sense of fellowship at the heart of this gathering.  They're two of my favorite senators.  Let me also acknowledge the director of my faith-based office, Joshua DuBois, who is here.  Where's Joshua?  He's out there somewhere.  He's doing great work.  (Applause.)

I want to commend Secretary Hillary Clinton on her outstanding remarks, and her outstanding leadership at the State Department.  She's doing good every day.  (Applause.) I'm especially pleased to see my dear friend, Prime Minister Zapatero, and I want him to relay America's greetings to the people of Spain.  And Johnny, you are right, I'm deeply blessed, and I thank God every day for being married to Michelle Obama.  (Applause.)

I'm privileged to join you once again, as my predecessors have for over half a century.  Like them, I come here to speak about the ways my faith informs who I am -- as a President, and as a person.  But I'm also here for the same reason that all of you are, for we all share a recognition -- one as old as time -- that a willingness to believe, an openness to grace, a commitment to prayer can bring sustenance to our lives.

There is, of course, a need for prayer even in times of joy and peace and prosperity.  Perhaps especially in such times prayer is needed -- to guard against pride and to guard against complacency.  But rightly or wrongly, most of us are inclined to seek out the divine not in the moment when the Lord makes His face shine upon us, but in moments when God's grace can seem farthest away.

Last month, God's grace, God's mercy, seemed far away from our neighbors in Haiti.  And yet I believe that grace was not absent in the midst of tragedy.  It was heard in prayers and hymns that broke the silence of an earthquake's wake.  It was witnessed among parishioners of churches that stood no more, a roadside congregation, holding bibles in their laps.  It was felt in the presence of relief workers and medics; translators; servicemen and women, bringing water and food and aid to the injured.

One such translator was an American of Haitian descent, representative of the extraordinary work that our men and women in uniform do all around the world -- Navy Corpsman Christian [sic] Brossard.  And lying on a gurney aboard the USNS Comfort, a woman asked Christopher:  "Where do you come from?  What country?  After my operation," she said, "I will pray for that country."  And in Creole, Corpsman Brossard responded, "Etazini."  The United States of America.

God's grace, and the compassion and decency of the American people is expressed through the men and women like Corpsman Brossard.  It's expressed through the efforts of our Armed Forces, through the efforts of our entire government, through similar efforts from Spain and other countries around the world.  It's also, as Secretary Clinton said, expressed through multiple faith-based efforts.  By evangelicals at World Relief.  By the American Jewish World Service.  By Hindu temples, and mainline Protestants, Catholic Relief Services, African American churches, the United Sikhs.  By Americans of every faith, and no faith, uniting around a common purpose, a higher purpose.

It's inspiring.  This is what we do, as Americans, in times of trouble.  We unite, recognizing that such crises call on all of us to act, recognizing that there but for the grace of God go I, recognizing that life's most sacred responsibility -- one affirmed, as Hillary said, by all of the world's great religions -- is to sacrifice something of ourselves for a person in need.

Sadly, though, that spirit is too often absent when tackling the long-term, but no less profound issues facing our country and the world.  Too often, that spirit is missing without the spectacular tragedy, the 9/11 or the Katrina, the earthquake or the tsunami, that can shake us out of complacency.  We become numb to the day-to-day crises, the slow-moving tragedies of children without food and men without shelter and families without health care.  We become absorbed with our abstract arguments, our ideological disputes, our contests for power.  And in this Tower of Babel, we lose the sound of God's voice.

Now, for those of us here in Washington, let's acknowledge that democracy has always been messy.  Let's not be overly nostalgic.  (Laughter.)  Divisions are hardly new in this country.  Arguments about the proper role of government, the relationship between liberty and equality, our obligations to our fellow citizens -- these things have been with us since our founding.  And I'm profoundly mindful that a loyal opposition, a vigorous back and forth, a skepticism of power, all of that is what makes our democracy work.

And we've seen actually some improvement in some circumstances.  We haven't seen any canings on the floor of the Senate any time recently.  (Laughter.)  So we shouldn't over-romanticize the past.  But there is a sense that something is different now; that something is broken; that those of us in Washington are not serving the people as well as we should.  At times, it seems like we're unable to listen to one another; to have at once a serious and civil debate.  And this erosion of civility in the public square sows division and distrust among our citizens.  It poisons the well of public opinion.  It leaves each side little room to negotiate with the other.  It makes politics an all-or-nothing sport, where one side is either always right or always wrong when, in reality, neither side has a monopoly on truth.  And then we lose sight of the children without food and the men without shelter and the families without health care.

Empowered by faith, consistently, prayerfully, we need to find our way back to civility.  That begins with stepping out of our comfort zones in an effort to bridge divisions.  We see that in many conservative pastors who are helping lead the way to fix our broken immigration system.  It's not what would be expected from them, and yet they recognize, in those immigrant families, the face of God.  We see that in the evangelical leaders who are rallying their congregations to protect our planet.  We see it in the increasing recognition among progressives that government can't solve all of our problems, and that talking about values like responsible fatherhood and healthy marriage are integral to any anti-poverty agenda.  Stretching out of our dogmas, our prescribed roles along the political spectrum, that can help us regain a sense of civility.

Civility also requires relearning how to disagree without being disagreeable; understanding, as President [Kennedy] said, that "civility is not a sign of weakness." Now, I am the first to confess I am not always right.  Michelle will testify to that.  (Laughter.)  But surely you can question my policies without questioning my faith, or, for that matter, my citizenship.  (Laughter and applause.)

Challenging each other's ideas can renew our democracy.  But when we challenge each other's motives, it becomes harder to see what we hold in common.  We forget that we share at some deep level the same dreams -- even when we don't share the same plans on how to fulfill them.

We may disagree about the best way to reform our health care system, but surely we can agree that no one ought to go broke when they get sick in the richest nation on Earth.  We can take different approaches to ending inequality, but surely we can agree on the need to lift our children out of ignorance; to lift our neighbors from poverty.  We may disagree about gay marriage, but surely we can agree that it is unconscionable to target gays and lesbians for who they are -- whether it's here in the United States or, as Hillary mentioned, more extremely in odious laws that are being proposed most recently in Uganda.

Surely we can agree to find common ground when possible, parting ways when necessary.  But in doing so, let us be guided by our faith, and by prayer.  For while prayer can buck us up when we are down, keep us calm in a storm; while prayer can stiffen our spines to surmount an obstacle -- and I assure you I'm praying a lot these days -- (laughter) -- prayer can also do something else.  It can touch our hearts with humility.  It can fill us with a spirit of brotherhood.  It can remind us that each of us are children of a awesome and loving God.

Through faith, but not through faith alone, we can unite people to serve the common good.  And that's why my Office of Faith-Based and Neighborhood Partnerships has been working so hard since I announced it here last year.  We've slashed red tape and built effective partnerships on a range of uses, from promoting fatherhood here at home to spearheading interfaith cooperation abroad.  And through that office we've turned the faith-based initiative around to find common ground among people of all beliefs, allowing them to make an impact in a way that's civil and respectful of difference and focused on what matters most.

It is this spirit of civility that we are called to take up when we leave here today.  That's what I'm praying for.  I know in difficult times like these -- when people are frustrated, when pundits start shouting and politicians start calling each other names -- it can seem like a return to civility is not possible, like the very idea is a relic of some bygone era.  The word itself seems quaint -- civility.

But let us remember those who came before; those who believed in the brotherhood of man even when such a faith was tested.  Remember Dr. Martin Luther King.  Not long after an explosion ripped through his front porch, his wife and infant daughter inside, he rose to that pulpit in Montgomery and said, "Love is the only force capable of transforming an enemy into a friend."

In the eyes of those who denied his humanity, he saw the face of God.

Remember Abraham Lincoln.  On the eve of the Civil War, with states seceding and forces gathering, with a nation divided half slave and half free, he rose to deliver his first Inaugural and said, "We are not enemies, but friends… Though passion may have strained, it must not break our bonds of affection."

Even in the eyes of confederate soldiers, he saw the face of God.

Remember William Wilberforce, whose Christian faith led him to seek slavery's abolition in Britain; he was vilified, derided, attacked; but he called for "lessening prejudices [and] conciliating good-will, and thereby making way for the less obstructed progress of truth."

In the eyes of those who sought to silence a nation's conscience, he saw the face of God.

Yes, there are crimes of conscience that call us to action.  Yes, there are causes that move our hearts and offenses that stir our souls.  But progress doesn't come when we demonize opponents.  It's not born in righteous spite.  Progress comes when we open our hearts, when we extend our hands, when we recognize our common humanity.  Progress comes when we look into the eyes of another and see the face of God.  That we might do so -- that we will do so all the time, not just some of the time -- is my fervent prayer for our nation and the world.

Thank you, God bless you, and God bless the United States of America.  (Applause.)

END
9:25 A.M. EST

Remarks by the President at the Senate Democratic Policy Committee Issues Conference

The Newseum, Washington, D.C.

10:09 A.M. EST

THE PRESIDENT:  Thank you, guys.  Thank you.  Thank you very much.  Thank you.  Everybody please have a seat.  Thank you.

Listen, you guys had to listen to me at the State of the Union -- or at least pretend to listen to me.  (Laughter.)  So I'll try to keep it relatively brief, some opening remarks and then open it up for questions.

First of all, I just want to thank Harry Reid.  (Applause.)  I recently said he's got one of the toughest jobs in Washington -- managing an institution that by its very nature is, let's face it, you guys are a little difficult to manage.  I've been a part of this caucus.  I really don't think anybody could have done a better job under more trying circumstances than Harry Reid.  And I think he deserves a huge round of applause.  (Applause.) 

Now, let me start by saying we always knew this was going to be a difficult year to govern -- an extraordinarily difficult year to govern.  We began 2009 with a financial system on the brink of collapse, an economy bleeding nearly 700,000 jobs per month, a $1.3 trillion deficit, and two wars that were costly in every sense of the word.  We knew that solutions wouldn't come easily or come quickly.  We knew that the right decisions would be tough and sometimes they would be unpopular.  And we knew that we might have to make them sometimes without any help from our friends on the other side of the aisle.
 
But we made those decisions.  We led.  Those actions prevented another Great Depression; they broke the back of a severe recession.  The economy that was shrinking by 6 percent a year ago is now growing at nearly 6 percent one year later.  (Applause.)  That's because of the work that you did.

Harry listed some of the work that you did on behalf of the American people, even under these difficult circumstances:  extending health insurance to 4 million children, protecting consumers from getting ripped off by their credit card companies, and kids being targeted by big tobacco.  Some things that weren't noted or didn't get a lot of attention:  You reformed defense spending by eliminating waste, and saved taxpayers billions while keeping us safe at the same time.  You gave billions of dollars of tax relief to small businesses and 95 percent of working families here in America.

You did all this despite facing enormous procedural obstacles that are unprecedented.  You may have looked at these statistics.  You had to cast more votes to break filibusters last year than in the entire 1950s and '60s combined.  That's 20 years of obstruction packed into just one.  But you didn't let it stop you.

As Harry mentioned, though, our mission is far from accomplished, because while the worst of the storm has passed, far too many Americans are still hurting in its wake.  I know you've seen it back home in the shuttered businesses, the foreclosed homes; you've heard it from constituents who are desperate for work; and we've seen it in the burdens that families have been grappling with long since this recession hit -- issues that we've been talking about now for years:  the burden of working harder and longer for less, of being unable to save enough to retire or to help kids with college expenses, the extraordinarily constant rising costs of health care. 

Those problems haven't gone away.  It's still our responsibility to address them.  All that's changed in the last two weeks is that our party has gone from having the largest Senate majority in a generation to the second largest Senate majority in a generation.  And we've got to remember that.  There was apparently a headline after the Massachusetts election; the Village Voice announced that Republicans win a 41-59 majority.  (Laughter.)  It's worth thinking about.  We still have to lead.

Saving and creating jobs have to continue to be our focus in 2010.  Last year, we gave small business -- the engines of job creation -- tax relief, and expanded lending through the SBA.  I don't know if you are aware that SBA loans have gone up 70, 80 percent, which, by the way, indicates the degree to which there is still huge demand among small businesses.  Some of the banks are saying, well, we're not lending because there's not as much demand out there.  There are a lot of small businesses that are hungry for loans out there right now.  And we've made progress but they're still struggling.  So I've proposed additional ideas to help small businesses start up and hire, to raise wages and expand, and to get the credit they need to stay afloat.  You've made some of these same proposals, as well.  We should put them into action without delay.  (Applause.)

We've invested in America's infrastructure, rebuilding roads and bridges, and ports and railways, and putting people to work strengthening our communities and our country.  And as you know, the Recovery Act was designed so that a lot of that work is going to be taking place this year, not just last year.  Many of the projects you funded come online in the next six months.  But we can do more, and we should do so without delay.

Through the investments you made in clean energy startups, we've not only helped put Americans to work, we're on track to double our nation's capacity to generate renewable energy over the next few years.  I've proposed additional tax credits that will promote private sector hiring and energy conservation.  We should do that without delay.

I think ideas like this should be pretty palatable to the other party.  They seem pretty common sense, pretty centrist.  We should be able to hear their ideas as well.  That's why I spoke to the Republican caucus last Friday.  I think it was to the country's benefit that we had an open and frank discussion about the challenges facing the American people and our ideas to solve them.  (Applause.)  I got to admit, I had a little fun at that caucus.  (Laughter.)

Now, obviously, on some issues, we didn't agree.  But on some, we did.  And I'm reminded that when it came to health insurance reform in particular, I sought out and supported Republican ideas from the start -- so did you.  Max Baucus -- where's Max?  I think he can testify to spending a little time listening to Republican ideas.  So can Chris Dodd and Tom Harkin.  You considered hundreds of Republican amendments, and incorporated many of their ideas into the legislation that passed the Senate.  So when I start hearing that we should accept Republican ideas, let's be clear -- we have.  What hasn't happened is the other side accepting our ideas.

And I told them, I want to work together when we can, and I meant it.  I believe that's the best way to get things done for the American people.  But I also made it clear that we'll call them out when they say they want to work with us and we extend a hand and get a fist in return. 

Last week, for example, you put up for a vote a bill I supported -- Conrad-Gregg fiscal commission.  We were sure this was going to be bipartisan, only to see seven Republicans who co-sponsored the idea in the first place suddenly decide to vote against it.

Now, I'm open to honest differences of opinion.  But what I'm not open to is changing positions solely because it's good short-term politics.  And what I'm not open to is a decision to stay on the sidelines and then assign blame.  I've little patience for the kinds of political calculation that says the cost of blocking everything is less than the cost of passing nothing; that basically says "If they lose, I win."  That's been the politics in Washington for too long, and the problem is it leaves the American people out of the equation.

So I would just suggest to this caucus, if anybody is searching for a lesson from Massachusetts, I promise you the answer is not to do nothing.  The American people are out of patience with business as usual.  They're fed up with a Washington that has become so absorbed with who's up and who's down that we've lost sight of how they're doing.  They want us to start worrying less about keeping our jobs and more about helping them keep their jobs.

And they want to see their business done in an open and transparent way.  When we took back the Senate in 2007, we did so in part because we made a case that we'd be better on ethics and transparency.  And we backed that up by passing the most sweeping ethics reforms since Watergate and by beginning to address earmark abuse.  We should be proud of those accomplishments.  But if we're going to erase that deficit of trust that I mentioned at the State of the Union, we're still going to have to do more.

That's why I've proposed that we work together to make all earmark requests public, on one central Web site, before they come up for a vote; and to require lobbyists to discuss details of their contacts on behalf of their clients with the administration or with Congress.  That's why, working with people like Dick Durbin, who's been vocal on this for a long time, we've got to confront the gaping loophole that the Supreme Court recently opened in our campaign finance laws that allowed special interests to spend without limit to influence American elections. 

We've also got to get back to fiscal responsibility.  And I spoke about this at the State of the Union.  Just 10 years ago, America had a budget surplus of over $200 billion.  Remember, people were worried about what might happen with all these surpluses, and whether it would create problems in the financial markets.  That was just a decade ago. 

After two wars, two tax cuts, prescription drug program -- none of which were paid for -- we faced a deficit of over $1 trillion, a debt over the next decade of $8 trillion, before my administration spent a single dollar.

Now, we can't change the past, but we can change the future.  That's why I'm asking you to adopt a freeze in non-security discretionary spending for the next three years, starting next year.  We're still having a tough time right now, given the economy is just starting to pick up steam -- but starting next year.

That's why I'm grateful that all of you restored the PAYGO rules that worked so well in the 1990s.  I already mentioned the fiscal commission.  We may not have been able to get the votes for a statutory commission, but we're going to -- I am going to appoint a commission by executive order, because it's important for us to take these issues seriously -- not just for us but for our children and our grandchildren.

Let me just wrap up by saying this.  I know these are tough times to hold public office.  I'm there in the arena with you.  The need is great.  The anger and the anguish are intense.  The economy is massive and so, as a consequence, no matter what levers and buttons we press, sometimes it doesn't move as quickly as is needed to provide relief to so many of our constituents.  In that kind of circumstance, I think the natural political instinct is to tread lightly, keep your head down, and to play it safe.

I've said this before to this caucus; I just want to say it again.  For me, it is constantly important to remind myself why I got into this business in the first place; why I'm willing to be away from my family for big stretches at a time; the financial sacrifices that so many of you have made; being subject to criticism constantly.  You don't get in this for the fame.  You don't get in it for the title.  You get in it because somewhere in your background, at some point in time, you decided there was an issue that was so important that you were willing to stand up and be counted.  You were going to fight for something.  And you decided you were going to run as a Democrat because there was a core set of values within the Democratic Party about making sure that everybody had a fair shot, making sure that middle-class folks were treated fairly in our economy, making sure that those who were on the outside had a way in that led you to get involved in public service. 

And that's what we have to remind ourselves, especially when it's hard -- especially when it's hard.  You look at an issue right now like health care.  So many of us campaigned on the idea that we were going to change this health care system.  So many of us looked people in the eye who had been denied because of a preexisting condition, or just didn't have health insurance at all, or small business owners in our communities who told us that their premiums had gone up 25 percent or 30 percent.  And we said we were going to change it. 

Well, here we are with a chance to change it.  And all of you put extraordinary work last year into making serious changes that would not only reform the insurance industry, not only cover 30 million Americans, but would also bend the cost curve, and save a trillion dollars on our deficits, according to the Congressional Budget Office.  There's a direct link between the work that you guys did on that and the reason that you got into public office in the first place.

And so as we think about moving forward, I hope we don't lose sight of why we're here.  We've got to finish the job on health care.  (Applause.)  We've got to finish the job on financial regulatory reform.  (Applause.)  We've got to finish the job even though it's hard. 

And I'm absolutely confident that if we do so in an open way, in a transparent way, in a spirit that says to our political opponents that we welcome their ideas, we are open to compromise, but what we're not willing to do is to give up on the basic notion that this government can be responsive to ordinary people and help give them a hand up so they can achieve their American Dream -- we will not give up that ideal.  (Applause.)  If that's where we go, I'm confident that politics in 2010 will take care of themselves.

Harry, thank you very much.  I'm going to turn it over to questions.  Thank you.  (Applause.)

SENATOR REID:  First question, Arlen Specter.  Let me tell everyone people have come to me and indicated they wanted to ask questions.  We're taking a list of those.  Arlen Specter is first.

     SENATOR SPECTER:  Mr. President, I begin by applauding your decision to place the economy at the top of the agenda, to put America back to work and provide jobs, jobs, jobs. 

     I have a two-part question, and just a brief statement of the issue.  We have lost 2.3 million jobs as a result of the trade imbalance with China between 2001 and 2007.  The remedies to save those jobs are very ineffective -- long delays, proceedings before the International Trade Commission, subject to being overruled by the President.  We have China violating international law with subsidies and dumping -- really, a form of international banditry.  They take our money and then they lend it back to us and own now a big part of the United States.

     The first part of my question is, would you support more effective remedies to allow injured parties -- unions which lose jobs, companies which lose profits -- by endorsing a judicial remedy, if not in U.S. courts perhaps in an international court, and eliminate the aspect of having the ITC decisions overruled by the President -- done four times in 2003 to 2005, at a cost of a tremendous number of jobs on the basis of the national interest.  And if we have an issue on the national interest, let the nation pay for it, as opposed to the steel industry or the United Steel Workers.

     And the second part of the question, related, is when China got into the World Trade Organization, a matter that 15 of us in this body opposed, there were bilateral treaties.  And China has not lived up to its obligations to have its markets open to us, but take our markets and take our jobs.  Would you support an effort to revise, perhaps even revoke, those -- that bilateral treaty, which gives China such an unfair trade advantage?  Thank you.

     THE PRESIDENT:  Arlen, I would not be in favor of revoking the trade relationships that we've established with China.  I have shown myself during the course of this year more than willing to enforce our trade agreements in a much more serious way.  And at times I've been criticized for it.  There was a case involving foreign tires that were being sent in here, and I said this was an example of where we've got to put our foot down and show that we're serious about enforcement.  And it caused the usual fuss at the international level, but it was the right thing to do.

     Having said that, I also believe that our future is going to be tied up with our ability to sell products all around the world, and China is going to be one of our biggest markets, and Asia is going to be one of our biggest markets.  And for us to close ourselves off from that market would be a mistake.

     The point you're making, Arlen, which is the right one, is it's got to be reciprocal.  So if we have established agreements in which both sides are supposed to open up their markets, we do so and then the other side is imposing a whole set of non-tariff barriers in place, that's a problem.  And it has to be squarely confronted.

     So the approach that we're taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways. 

One of the challenges that we've got to address internationally is currency rates and how they match up to make sure that our goods are not artificially inflated in price and their goods are artificially deflated in price.  That puts us at a huge competitive disadvantage.

But what I don't want to do is for us as a country, or as a party, to shy away from the prospects of international competition, because I think we've got the best workers on Earth, we've got the most innovative products on Earth, and if we are able to compete on an even playing field, nobody can beat us.  And by the way, that will create jobs here in the United States.

If we just increased our exports to Asia by a percentage point, by a fraction, it would mean hundreds of thousands, maybe millions of jobs here in the United States.  And it's easily doable.

And that's why we are going to be putting a much bigger emphasis on export promotion over the next several years.  And that includes, by the way, export promotion not just for large companies but also for medium-size and small companies, because one of the challenges -- I was up in New Hampshire yesterday, and you saw this terrific new company that had just been started up -- it's only got 13, 14 employees at this point.  But it has a new manufacturing technique for the component parts in LED light bulbs, potentially could lower the price of LED light bulbs, cut them in half. 

And these folks, they potentially could market not just here in the United States, but this is a technology that could end up being sent all around the world.  But they don't have the money to set up their own foreign office in Beijing to navigate through the bureaucracy.  They've got to have some help being over there.  And so that's one of the things that we really want to focus on in this coming year, is making sure that our export-import banks, our trade offices, that we are assisting not just the big guys, although we do want to help them, but also the medium-sized and small businesses that have innovative products that could be marketed if they just got a little bit of help and a little bit of push from the United States government.

     SENATOR REID:  Sir, Michael Bennet, Colorado.

     SENATOR BENNET:  Thanks for coming, Mr. President.  It's good to see you.  You talked in the State of the Union very well about a number of the challenges that we face as a country, which are serious.  I mean, even before we were driven into the worst recession since the Great Depression, the last period of economic growth in this country's history, was the first time middle-class family income actually fell during a period of economic growth; no net jobs created since 1998; household wealth the same at the end of the decade as it was at the beginning; and an education system that's not working well enough for our kids.  And on top of everything else, got a $1.4 trillion deficit and $12 trillion of debt. 

I was saying that the other day, by the way, in Colorado, and I was talking about how our kids were going to have to pay this back if we didn't make this decision that we've got to face up to.  And my daughter, Caroline, who's 10, was there, and she walked out with me at the end and she said, "Just so you know, I'm not paying that back."  (Laughter.)  So she has the right attitude, I think.

THE PRESIDENT:  But just in case you're counting on it.  (Laughter.)

SENATOR BENNET:  At the same time, this place looks broken to the American people.  Our ability to make these decisions is open to enormous question in the wake of the health care discussion, in particular.  I had a woman the other day in Glenwood Springs, Colorado, ask me where she could get her lobbyist in Washington, D.C.

What are we going to do differently?  What are you going to do differently?  What do we need to do differently as Democrats and Republicans to fix this institution so that our democracy can actually withstand the test that we're facing right now?

THE PRESIDENT:  Well, let me just make a couple observations, having served in the Senate and now seeing it from the perspective of the White House.

First of all, whenever people ask me, why isn't Washington working -- I am a fierce defender of the integrity and hard work of individual members, which is, by the way, matched up by --when you look at polls, people hate Congress, but individual members a lot of them feel are really working hard on their behalf.

So the problem here you've got is an institution that increasingly is not adapted to the demands of a hugely competitive 21st century economy.  I think the Senate in particular, the challenge that I gave to Republicans and I will continue to issue to Republicans is if you want to govern then you can't just say no.  It can't just be about scoring points.  There are multiple examples during the course of this year in which that's been the case. 

     Look, I mentioned the filibuster record.  We've had scores of pieces of legislation in which there was a filibuster, cloture had to be invoked, and then ended up passing 90 to 10, or 80 to 15.  And what that indicates is a degree to which we're just trying to gum up the works instead of getting business done. 

That is an institutional problem.  In the Senate, the filibuster only works if there is a genuine spirit of compromise and trying to solve problems, as opposed to just shutting the place down.  If it's just shutting the place down, then it's not going to work.  That's point number one.

     Point number two.  In terms of what -- how we operate, we as Democrats, I do think that the more open we are, the more transparent we are, the more people know exactly how things are working even if sometimes it takes longer to maintain that transparency, the better off we are. 

     And I think the health care bill is a perfect example.  And the truth of the matter is, is that the process looked painful and messy, but the innumerable hearings that were held did give an opportunity for the product to get refined so that I think that the ultimate package, after potential negotiations between the House and the Senate, is better than where we started.  And there was a possibility and continues to be a possibility to be in discussions with the American people about what exactly that bill accomplishes. 

     On the other hand -- and I take some fault for this -- at the end of the process when we were fighting through all these filibusters and trying to get it done quickly so that we could pivot and start talking about other issues that were so important to the American people, some of that transparency got lost.  And I think we paid a price for it.

     And so it's important, I think, to constantly have our cards out on the table and welcome challenges and welcome questions.  If the Republicans say that they can insure every American for free, which it what was claimed the other day, at no cost, I want to know.  Because I told them, I said, why would I want to get a bunch of lumps on my head doing the hard thing if you've got the easy thing?  But you've got to show me, you've got to prove to me that it actually works -- because I've talked to every health care expert out there and it turns out if you want to reform the insurance system, if you want to make sure that people without preexisting conditions are able to get insurance, if you want to provide coverage for people, if you want to bend the cost curve, then you need a comprehensive bill, because this is a complicated area involving one-sixth of our economy.

     But we should be open to that dialogue, and not underestimate the power of the American people, over time -- despite millions of dollars of advertising to the contrary from the insurance industry and others -- we should not underestimate the American people's willingness to say, okay, I got it.  And there are still going to be disagreements, and some will disagree with us.  But we've got to constantly make our case, I think, and not play an insider's game.  Play an outsider's game.

     Last point I would make about this.  You know what I think would actually make a difference, Michael -- I think if everybody here -- excuse all the members of the press who are here -- if everybody here turned off your CNN, your Fox, your -- just turn off the TV -- MSNBC, blogs -- and just go talk to folks out there, instead of being in this echo chamber where the topic is constantly politics -- the topic is politics.  It is much more difficult to get a conversation focused on how are we going to help people than a conversation about how is this going to help or hurt somebody politically. 

And that's part of what the American people are just sick of -- because they don't care, frankly, about majority and minorities and process and this and that.  They just want to know, are you delivering for me?  And we've got to, I think, get out of the echo chamber.  That was a mistake that I think I made last year, was just not getting out of here enough.  And it's helpful when you do.  (Applause.)

     SENATOR REID:  Mr. President, you've told me -- suggested don't pay any attention to the blogs, don't listen to talk radio, don't watch cable TV.  And I follow that advice pretty good.  (Laughter.) 

Next question will be from the chair of our Agriculture Committee, the Senator from Arkansas, Blanche Lincoln.

     SENATOR LINCOLN:  Me, neither, Mr. President.  I stay away from the TVs and everything else.  But thank you so much for being here with us today.  And I want to thank you also -- I had an opportunity with several of my colleagues from the House and Senate to have a bipartisan meeting yesterday with the First Lady on childhood obesity.  It was a great meeting and we look forward to working with her and you and your administration to really tackle that problem on behalf of our children and the future of our country.

     Mr. President, I come from a seventh-generation Arkansas family.  My dad was a good Democrat, and he was a great Arkansan, and he was very typical of Arkansans in that he was very independent-minded, as am I, and as most of my constituents.  And he used to tell me early on when I ran for Congress, he said it's really results that count.  And as I look at what's going on in my state and among my constituents -- I visited with a constituent yesterday, good Democrat, small business owner, who was extremely frustrated -- extremely frustrated because there was a lack of certainty and predictability from his government for him to be able to run his businesses.  He's -- he and his father have worked hard, they've built three or four different small businesses, and he fears that there's no one in your administration that understands what it means to go to work on Monday and have to make a payroll on Friday.  He wants results.  He wants predictability.

     And I think that you're exactly right.  People out there watching us, they see us nothing more than Democrats and Republicans up here fighting, fighting only to win a few political points, not to get the problem solved.  And so I just -- I want to echo I guess some of what my colleague, Michael Bennet from Colorado, mentioned, but also to ask you, in terms of where we are going, what can we tell the people in terms of predictability and certainty in getting this economy back on track?  How are we going to do that?

     And are we willing as Democrats not only to reach out to Republicans but to push back in our own party for people who want extremes, and look for the common ground that's going to get us the success that we need not only for our constituents but for our country in this global community, in this global economy?  Are we willing as Democrats to also push back on our own party and look for that common ground that we need to work with Republicans and to get the answers?  And it's really the results that are going to count to our constituents.  And we appreciate the hard work that you put into it.

     THE PRESIDENT:  Well, the -- look, there's no doubt that this past year has been an uncertain time for the American people, for businesses and for people employed by businesses.  Some of that certainty just had to do with the objective reality of this economy entering into a freefall.  So let's just be -- let's remind ourselves that if you've got an economy suddenly contracting by 6 percent, or a loss of trillions of dollars of wealth basically in the blink of an eye, or home values descending by 20 percent, that that's going to create a whole lot of uncertainty out there in the business environment and among families.

     And part of what we've done over the course of this year is to put a floor under people's feet.  That's what the Recovery Act did.  That's what the interventions and the financial markets did.  It broke the back of the recession, stabilized the markets.  Nobody is talking about a market meltdown at this point.  And people haven't recovered all that they had lost in their 401(k)s, but they're feeling a little better when they open that envelope now than they did six months ago.  State budgets were in freefall; that was stabilized.  States are still going through incredible pain, but they did not have to lay off teachers and firefighters and cops at the levels that they would have to otherwise lay them off.  That provided some stability and some certainty.

     So the steps you've taken as a Congress, the steps we've taken as an administration, have helped to stabilize things. 

     Now, moving forward, Blanche, what you're going to hear from some folks is that the way to achieve even greater economic growth -- and keep in mind the economy is now growing at a 6 percent clip, so the question is when do businesses actually start hiring, because they're now making a profit -- what you're going to start hearing is the only way to provide stability is to go back and do what we'd been doing before the crisis. 

     So I noticed yesterday when we were -- there was some hearing about our proposal to provide additional financing to small businesses and tax credits to small businesses.  Some of our friends on the other side of the aisle said, "This won't help at all.  What you have to do is to make sure that we continue the tax breaks for wealthiest Americans.  That's really what's going to make a difference."

     Well, if the agenda -- if the price of certainty is essentially for us to adopt the exact same proposals that were in place for eight years leading up to the biggest economic crisis since the Great Depression -- we don't tinker with health care, let the insurance companies do what they want, we don't put in place any insurance reforms, we don't mess with the banks, let them keep on doing what they're doing now because we don't want to stir up Wall Street -- the result is going to be the same.  

     I don't know why we would expect a different outcome pursuing the exact same policies that got us into this fix in the first place.  Michael Bennet articulated it very well.  Part of the reason people are feeling anxious right now, it's not just because of this current crisis -- they've been going through this for 10 years.  They've been working and not seeing a raise.  Their costs have been going up, their spouses going to the workforce -- they work as hard as they can.  They're barely keeping their heads above water.  They're trying to figure out how to retire.  They're seeing more and more of their costs on health care dumped in their lap.  College tuition skyrockets.

     They are more and more vulnerable, and they have been for the last decade, treading water.  And if our response ends up being, because we don't want to -- we don't want to stir things up here, we're just going to do the same thing that was being done before, then I don't know what differentiates us from the other guys.  And I don't know why people would say, boy, we really want to make sure that those Democrats are in Washington fighting for us. 

     So the point I'm making -- and Blanche is exactly right -- we've got to be non-ideological about our approach to these things.  We've got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can't be demonizing every bank out there.  We've got to be the party of business, small business and large business, because they produce jobs.  We've got to be in favor of competition and exports and trade.  We don't want to be looking backwards.  We can't just go back to the New Deal and try to grab all the same policies of the 1930s and think somehow they'd work in the 21st century.

     So Blanche is exactly right that sometimes we get ideologically bogged down.  I just want to find out what works, and I know you do, too, and I know the people in Arkansas do, too.  But when you're talking to the folks in Arkansas you also have to remind them what works is not just going back and doing the same things that we were doing before.  And, yes, there's going to be some transition time.  If we have a serious financial regulatory reform package, will the banks squawk?  Yes.  Will they say this is the reason we're not lending?  Yes.  The problem is we know right now they're not lending, and paying out big bonuses.  And we know that the existing regulatory system doesn't work. 

     So we shouldn't be spooked by this notion that, well, is now the time to take seriously in an intelligent way, not in a knee-jerk way, the challenge of financial regulatory reform so that you don't have banks that are too big to fail and you're not putting taxpayers at risk and you're not putting the economy at risk -- now is the time to do it.

     The same is true with health care.  The same is true with health care.  There are, I promise you, at least as many small businesses out there, if you talk to them, who will say, I just got my bill from my health insurance and it went up 40 percent.  And we've got to do something for them.  All right?  (Applause.)

     SENATOR REID:  Next question, the junior Senator from the state of New York, Kirsten Gillibrand.  

     SENATOR GILLIBRAND:  Mr. President, I have an issue I'd like to --

     THE PRESIDENT:  Kirsten, we've got a mic for you.

     SENATOR GILLIBRAND:  Thank you, Mr. President.  I have an issue I'd like to raise that is very important to every New Yorker and to many, many Americans, and that's health care for our 9/11 responders and for all the communities that live near Ground Zero. 

Now, these Americans hail from every one of the 50 states and every single congressional district in the entire United States.  And now, because of exposure to toxins from the collapse of the World Trade Center Towers, there's about 20,000 people who are sick -- some of them gravely ill, suffering from serious health effects, some are disabled, some have died.

     I've introduced legislation to provide permanent care and proper compensation for these Americans.  And my question is:  Would you today commit to working with Congress to pass comprehensive 9/11 -- a comprehensive 9/11 health bill that's fully paid for?

     THE PRESIDENT:  Well, I fully commit to working with you guys.  Keep in mind that our budget already significantly increased funding precisely for this purpose.  So I'm not just talking the talk; we've been budgeting this as a top priority for the administration. 

I confess, Kirsten, I have not looked at all the details of your legislation.  But I know that not only you and Chuck, but everybody here, wants to make sure that those who showed such extraordinary courage and heroism during 9/11, that they are fittingly cared for, and that's going to be something that we are going to be very interested in working with you on.  All right?

     SENATOR GILLIBRAND:  Thank you, Mr. President.

     THE PRESIDENT:  Good.  (Applause.)

     SENATOR REID:  The next question is the Chairperson of the Environmental Public Works Committee, Senator Barbara Boxer. 

     THE PRESIDENT:  Hey, Barbara Boxer.

     SENATOR BOXER:  Great to see you here, Mr. President.  And thanks for doing this and thanks for meeting with the Republican caucus at the House.  I thought it was very instructive for the American people.

     As Senator Feinstein and I tell our colleagues every day, California is hurting.  I think -- I know -- that you're aware of that.  And they really want to see a fighting spirit in us -- that we are committed, even though we've had some political setbacks, to get the job done.  And I just want to tell you, as I watched you during the State of the Union, listened to you, what you are doing now is really important to the folks that I represent, because you're showing that fighting spirit no matter what the adversity is, and you're coming up with specific proposals. 

So I want to ask you about small business.  We all know they're the job creators; 64 percent of new jobs over the last 15 years came from small business.  Your new proposal, which does mirror a couple of people -- I look at Senator Merkley, I know Senator Warner and others, we've worked hard on this. 

For community banks to lend, can you do that by executive order?  Because my understanding is you can use some of the TARP funds that were paid back and use that -- or those funds that have not been used -- can you use that and get this going by executive order, or do you need us to put that program into a jobs bill?

And second, are you using your influence as much as you can to get the big banks to lend?  They've dropped lending by $12 billion over the last year, so I wonder if you can give us an update on that.

THE PRESIDENT:  First of all, I've now taken trips to Allentown, Pennsylvania; Elyria, Ohio; most recently --

SENATOR REID: Baltimore.

THE PRESIDENT:  I was in Baltimore.  (Laughter.)  Had a great time in Baltimore.  Just recently in --

SENATOR REID:  Searchlight.

THE PRESIDENT:  -- Nashua, New Hampshire.  Haven't been to Searchlight yet, but we're going to get there.  (Laughter.)  And everywhere I go, you talk to small business and they will tell you they are still experiencing a severe credit crunch.  The larger businesses right now are able to get financing.  Even the medium-size businesses, the credit markets have improved.  Smaller businesses, even if they are making a profit and have not missed a payment, are finding that banks are averse to providing them capital.

     Now, two reasons that they cite:  One is they say their bankers are telling them that the regulators are just looking over their shoulder too much and so the community banks feel that their hands are tied.  These are independent regulators.  They are diligent in doing their jobs.  Obviously they feel caught off guard because of the lax regulation, in some cases, of the banking industry before the financial crisis.  You get a sense that the pendulum has swung too far in the other direction.

     The challenge that we've got is we've got to be careful because these are independent regulators and we don't want to politicize them.  But what Treasury Secretary Geithner and others have done is to discuss with the regulators what we are hearing in the field and to make sure that there is a consistency of approach that doesn't prevent banks from making what are good loans and taking reasonable risks.

     So that's one thing we're hearing.  The other thing, though, that is still out there is that the larger banks generally haven't been in this market; a lot of the smaller companies never had access to them in the first place, and we want to actually see if we can get more of those large banks to get into this marketplace.  And when I met with the big bank CEOs, this was something that I pushed them on.  They tell me, and we have seen some confirmation of this, that they are actually ramping up some of their small business lending and setting up more aggressive divisions actively seeking out loans.

     So that's the effort that we're making to jawbone the private sector to do what it needs to do.  In the meantime -- you mentioned the specific proposals that we've put forward -- I do think it's better to do them through legislation than through executive order.  TARP was a congressionally created structure with some fairly stringent guidelines in terms of how we were supposed to approach it.  It shouldn't be hard to do, though.  It's a pretty simple concept.  Banks have repaid money; there's $30 billion that we could take that has already been repaid -- immediately apply that to a fund so that small banks are -- community banks are able to provide their small business customers with greater lending. 

     And I do think that getting that as part of a jobs package is priority number one.  And I know I've already talked to Harry about this -- my assumption is, is that if you combine that with the tax credits that we've put in place for hiring, the provisions that we talked about to incentivize weatherization programs that can immediately start hiring people to retrofit homes and businesses and help reduce our energy costs -- taking some of those immediate steps now I think will pay some big dividends down the road.

     And the timing of it is perfect, because our job last year was to make sure the economy was growing.  The economy is now growing.  But what's happening is businesses, either because they can't find financing or because they're still just dipping their toe in the water, have been hesitant to hire full-time workers.  And for us to start giving them some serious incentives, giving them additional access to financing, could accelerate a process that otherwise could take a much longer time and, frankly, all those folks out there who are out of work right now, they just can't afford to wait any longer -- they need it now.  All right?

     SENATOR REID:  We have time for one or two more questions, if the question is short --

     THE PRESIDENT:  And the answer is short.  (Laughter.)

     SENATOR REID:  Otherwise we'll only have one question.  The Chairman of the Judiciary Committee, Pat Leahy.

     SENATOR LEAHY:  Mr. President, I want to thank you for coming here.  I think this is -- thank you for coming here.  I was just whispering to Marcel these answers are so good and need to be heard. 

You have a great sense of what the federal judiciary should be.  I think back to President Clinton's time, when the other side blocked 61 of his judges.  You've had some superb judges.  You've talked to both Republicans and Democrats, sent up some superb names.  And Senator Reid still has to file a cloture.  We have to spend a week of doing that, and then they pass by 100 to nothing or 90-10. 

My thing is this -- because of what they did last time, we end up with the greatest shortage and the most judicial crises I think in our history.  Will you continue to work very hard to get up names as quickly as possible, so that we can do this, and help us get these judges through?  I don't want the same judicial crises to occur.  You've had good nominees.  Can you commit to work with us, both parties, and keep trying to get them through?

     THE PRESIDENT:  Well, this is going to be a priority.  Look, it's not just judges, unfortunately, Pat, it's also all our federal appointees.  We've got a huge backlog of folks who are unanimously viewed as well qualified, nobody has a specific objection to them, but end up having a hold on them because of some completely unrelated piece of business.  That's an example, Michael, of the kind of stuff that Americans just don't understand.

     On the judges front, we had a judge for the -- coming out of Indiana, Judge Hamilton, who everybody said was outstanding  -- Evan Bayh, Democrat; Dick Lugar, Republican; all recommended.  How long did it take us?  Six months, six, seven months for somebody who was supported by the Democratic and Republican senator from that state.  And you can multiply that across the board.  So we have to start highlighting the fact that this is not how we should be doing business.

     Now, in fairness -- in fairness, when we were in the minority, there were some times where we blocked judges, we blocked appointees.  I think it's fair to say we were a little more selective in how we did it -- "a lot more," somebody said.  (Laughter.) 

So this is an example of where I'm going to reach out to Mitch McConnell; I know Harry has as well.  And I'm just going to say, look, if the government is going to work for the American people, I can't have the administrator for GSA, which runs every federal facility, all federal buildings all across the country -- here we are, we're trying to save billions of dollars, cut waste -- Claire McCaskill has been all on top of how can we audit our spending -- and we could save billions of dollars in ending old leases that don't work or renegotiating them or consolidating buildings and efficiencies.  But I don't have a GSA administrator, even though I nominated somebody who was well qualified several months ago, and nobody can tell me that there's anything particularly wrong with her.  They're blocking her because of some unrelated matter.  I don't know,  you guys may know better than I do.  And that is -- that has to end.  It has to end.  (Applause.)  And the American people want it to end.

Let's have a fight about real stuff.  Don't hold this woman hostage.  If you have an objection about my health care policies, then let's debate the health care policies.  But don't suddenly end up having a GSA administrator who is stuck in limbo somewhere because you don't like something else that we're doing, because that doesn't serve the American people.  Then they don't know what the argument is about.  Then it's just sort of a plague on both your houses because it looks like you guys are just fighting all the time.  And we've got to put an end to that.

SENATOR REID:  I missed somebody on my list.  If you would just be patient with us, we'll have two very short questions.

THE PRESIDENT:  I will indulge, Harry.

SENATOR REID:  The first question is going to come from the only person that's a member of the United States Senate who has a spouse that's won a Pulitzer Prize -- Sherrod Brown from Ohio.  (Laughter.)

SENATOR BROWN:  Thank you for joining us.  Thank you for your visit to Lorain County, Ohio, a week and a half ago; first presidential visit to that county of 300,000 since Harry Truman in 1948.

     THE PRESIDENT:  It was a great visit.  We had a great time.

     SENATOR BROWN:  It was terrific.  Ten miles from there, Oberlin College, one of the great private institutions of higher learning in this country -- at Oberlin College, there was a building built there seven or eight years ago, fully powered by solar panels.  It's the only -- it's the largest building on any college campus in America like that.  Those solar panels were bought in Germany and Japan, not surprisingly -- Germany, a country that has both an energy policy and a manufacturing policy.  Seventy-five miles west of there is Toledo, Ohio, where you've been several times, and Toledo has more solar energy manufacturing -- solar manufacturing jobs than any city in America.

     It begs the question of two things in terms of manufacturing policy and energy policy.  We have all kinds of things in so many of our states -- manufacturing wind turbine components and solar panel components -- but we're the only major industrial country in the world without a manufacturing policy.  And every rich country in the world has one.  We don't. 

I know what you're doing with Ron Bloom in the White House and other things, but how do we get there?  How do we -- when we read these articles in the paper that China is just exploding in terms of wind turbine manufacturing and solar panel manufacturing -- how do we rebuild our manufacturing sector with a manufacturing policy, combined with an energy policy that gets us there?

     THE PRESIDENT:  I hope people had a chance to read that article that was in The New York Times I guess last Sunday, talking about how China is not waiting, it is moving.  And already the anticipation is, is that they will lap us when it comes to clean energy.

     Now, they're not a democracy and so they don't debate.  (Laughter.)  And there are no filibuster rules.  And so obviously over the long term a system that allows for robust debate and exchange of ideas is going to produce a better result.  I believe that.  But we have to understand that when it comes to some key issues like energy, we are at risk of falling behind. 

We've already fallen behind, but it's not irrevocable because we still have the best research, we still have potentially the best technology, we've got the best universities, the best scientists, and as I said, we've got the most productive workers in the world.  But we've got to bring all those things together into a coherent whole. 

Now, I think there are a couple of elements to this.  One, in terms of manufacturing generally -- you just mentioned Ron Bloom, who we put in charge of a manufacturing task force, is just issuing now a report to me about the direction we need to go to have some coordination when it comes to manufacturing. 

     Now, this is not some big bureaucratic top-down industrial policy; it is figuring out how do we coordinate businesses, universities, government, to start looking at where are our strategic opportunities, and then making those investments, filling holes that exist so that we can be competitive with what China is doing or what Germany is doing or what Spain is doing. 

     And my hope is, is that during the course of this year we're going to be able to work with all 50 senators, because all of you have a stake in this, to just see where are our manufacturing opportunities and where can we fill -- plug some holes in order to make sure that we're competitive internationally.

     Specifically on clean energy, we know that's an opportunity.  I continue to believe, and I'm not alone in this, that the country that figures out most rapidly new forms of energy and can commercialize new ideas is going to lead the 21st century economy.  I think that is our growth model.  (Applause.)

     SENATOR REID:  Final question --

     THE PRESIDENT:  But -- hold on, just one last thing I want to say about this:  In order for us to maximize it, part of it is the good work that Jeff has been doing in terms of just finding the right incentives.  We've got to be open-minded about a whole range of technologies.  We've got to look at clean coal technology.  We've got to look at nuclear technology. 

We're going to be making some significant announcements this year.  This is an example, Blanche, of where we can't be stuck in the past in terms of how we see these things.  We're not going to be able to ramp up solar and wind to suddenly replace every other energy source anytime soon, and the economy still needs to grow.  So we've got to look at how to make existing technologies and options better.

     But -- and this is just the point that I wanted to make because it came up in New Hampshire yesterday -- we still -- one of the best ways to be on the forefront in energy is to incentivize clean energy, and discourage the old sources or methods that aren't going to work in the future.

     And so the fact that Joe Lieberman is working with Lindsey Graham, John Kerry has been all over this -- the three of them are coming together to try to find a workable, bipartisan structure so that we are incentivizing and rewarding the future -- and understanding that there's a transition, so that we've got to make sure that the disruptions are minimized as we move into this new energy future -- that's going to be vital. 

So don't give up on that.  I don't want us to just say the easy way out is for us to just give a bunch of tax credits to clean energy companies.  The market works best when it responds to price.  And if they start seeing that, you know what, dirty energy is a little pricier, clean energy is a little cheaper, they will innovate, and they will think things through in all kinds of innovative ways. 

So I want to congratulate specifically John Kerry, Joe Lieberman, and Lindsey Graham, who it probably doesn't help him for me to compliment him -- (laughter) -- but has been very thoughtful in terms of how they're approaching this issue.

SENATOR REID:  Final question, Evan Bayh, Indiana.

     SENATOR BAYH:  Thank you for being with us, Mr. President.

     THE PRESIDENT:  We can get you a mic.  Nice sneakers, by the way, Evan.  (Laughter.)

     SENATOR BAYH:  Oh, thank you.  You've got to stay light on your feet around here, right?  (Laughter.)  Mr. President, you've already addressed this in part, and several of the other questioners have raised this, but I'd like to present it in a little bit different way that I think is on the minds of people in my state, and perhaps in the minds of independents and moderate Republicans and conservative Democrats around the country -- and that's this issue of the deficit and rising debt, and restoring the fiscal health of this country to a position where it ought to be.

     Frankly, I think the public and average citizen have been way ahead of the political class on this.  They understand in the long run this is unsustainable, it's bad economics.  They understand that generally -- generationally, as Michael was mentioning, it's unfair to our children to ask them to pay these bills.  And most of all, there's a sense of unfairness.  They're having to make sacrifices in their daily lives, but too many in Washington expect to have continuing increases in the programs they care about; ordinary citizens are making sacrifices, and yet we want our earmarks or pet projects.  And they ask, why can't Washington make the same sacrifices that we're willing to make? 

Now, I think they realize that the other party doesn't have much credibility on this subject.  They handed you a -- what, a $1.3 trillion deficit.  Vice President Cheney famously said that in his opinion deficits didn't matter.  He just flat out said it.  That's wrong.  It's bad economics.  It's wrong.  And so we've got a job to do.  But I think many people across the country candidly look at us and say, I don't know if the Democrats are willing to take this on.  They think we want to tax too much and spend too much, and do we have the backbone to really stand up and make some of these hard decisions?

Now, to your credit, you've called for some things that aren't always popular in our party.  The first thing I noticed when you put into effect that non-security discretionary spending freeze is you got kicked in the shins by some of the left-wing blogs.  And you called for more restraint on earmarks.  That's not always popular among our group, but to your credit, you've called for those things. 

So my question to you, Mr. President, is speaking to independents, conservative Democrats, moderate Republicans -- people who know we have to do this -- why should the Democratic Party be trusted?  And are we willing to make some of the tough decisions to actually head this country in a better direction?

THE PRESIDENT:  Well, I'll tell you why the Democratic Party should be trusted -- because the last time this budget was balanced, it was under a Democratic President who made some very tough decisions.  (Applause.)

     I think this is pretty straightforward.  Bill Clinton made some very hard political decisions.  Some of you were there in Congress.  You know how tough those votes were.  You got no help from the other side.  But as a consequence, the economy took off and you had a $200 billion surplus at the end of his presidency.  So I think he deserves enormous credit for that.  Those of you who took those votes deserve enormous credit for that.  That's why we've had -- we should have credibility. 

But we're still haunted by the debates that took place from the '70s, the '60s, right?  And that hasn't completely worked through the political mindset.  So we're still saddled with this notion of the tax-and-spend model when, if you actually look at it, we've been very fiscally responsible.

Now, having said that, we have been complicit in some ways over the last decade.  The prescription drug bill -- not paid for.  Two wars -- not paid for.  Two tax cuts -- not paid for.  The emergence of a structural deficit that is only going to grow because we all know that the biggest drivers are Medicare and Medicaid, and as people get older, as the population gets older, and as new technologies come online, people are demanding new services for health care, those are going to become more and more expensive, and that's what's going to blow up the budget in the long term.

So to answer your question, how do we -- having said that, there's no doubt that we've lost trust.  And part of it was just bad timing.  It's like the cartoon, right, you're sort of standing there and somebody hands you a ticking time bomb and it explodes, and you've got all this gunpowder on your hands, and you didn't construct the bomb, but you're holding it.

And so what happened last year was, we come in.  You got a $1.3 trillion deficit that we're inheriting; you've got $3 trillion revenue that are lost because of the recession; you've got an $8 trillion projected debt over the next 10 years; and you've got trillions more in projected deficits when you start looking -- counting entitlements.  Everybody has been looking at Kent Conrad's charts here for the last several years about it.  And so at that very moment, suddenly the headlines that people are seeing is, "bank bailout, recovery package," and it all kind of merges together into just this blob of spending, and people aren't seeing, how is this benefiting me.  It just looks like Washington business as usual.  And all that suspicion gets amplified.  So it's completely understandable.

     I think the way that we regain trust is to pursue good policies but not be afraid also to explain these policies, and to be honest with the American people that we're not going to dig ourselves out of this hole overnight.

     So a couple of things I've done.  I have encouraged that we go back to PAYGO, pay-as-you-go.  People understand that concept:  You pay as you go.  I congratulate the Senate on voting for it.  I expect the House to get it done.  I want to sign that.

     SENATOR REID:  Not a single Republican.

     THE PRESIDENT:  The second thing you already mentioned is this non-defense discretionary freeze.  One thing I want to mention, though.  It's not as if we're not going after defense, as well.  It's just it would be irresponsible when we have two wars for me to impose that same kind of limitation, tie my hands not knowing what contingencies may be needed.  But if you look at what Bob Gates has been doing in the Defense Department in really going after some sacred cows over at the Pentagon, he's been serious about it.  We've already saved billions of dollars.  We intend to keep saving billions of dollars more on that front, as well. 

     We've already proposed $20 billion worth of savings for this year by eliminating and consolidating programs.  Last year we proposed $17 billion and we were pooh-poohed.  Some of the editorials were all, "Uh-huh, 17, this is a pittance."  You know, only in Washington is $17 billion a pittance.  But it also indicates one of the dangers that we have, is that you've got to chip away at this problem.  So every dollar counts.  The work that Claire has done on auditing -- if we can squeeze out $5 million here, $10 million here, make this program work a little bit better, over time it creates good habits, and it starts exercising the fiscal restraint muscles in ways that won't affect programming for people but will affect our bottom line.  So we're moving aggressively.  We hope this year we get that stuff done.

     But what we also have to understand is that if I take all the steps that I've put forward and Congress follows my lead on the non-defense discretionary spending, we're prudent in terms of defense spending, and we do all the things that we've talked about, we've still got this structural deficit that we've inherited. 

     Essentially what my proposal does is to pay for the Recovery Act and the other extraordinary steps we had to take for last year, so that I will have covered what happened on my watch.  That's important to understand.  Whatever spending that I had to take that was extraordinary that you took with me, including the Recovery Act, if we follow my budget outline, we will have taken care of, paid for what happened on our watch.

     But what we will not have solved is that huge structural deficit that existed the day I walked in.  And we've got to be able to tell the truth to the American people that that is hard to solve.  And the reason it's hard to solve is most of it is coming from entitlements that people like.  And it has to do with the fact that there's this huge gap between the amount of money being paid out and the amount of money coming in. 

     And everybody understands this here, but I think that there's a misperception in the public.  If you ask your average constituent where does federal dollars go, they'll tell you foreign aid.  And you say, well, foreign aid accounts for 1 percent of our budget.  And then they'll say, well, earmarks. 

     Look, I think we have to discipline ourselves on earmarks just because symbolically I think people -- it makes people feel like we're not showing the same kind of discipline that they are.  Even for worthy projects you've still got to make choices.  So they're absolutely right about that.  But earmarks account for about 1 percent of the budget.

     All right, so even if we eliminated all foreign aid and all earmarks, it doesn't solve our problem.  And as far as the arguments that our colleagues on the other side of the aisle are making, I think it's important to explain to people that in order for us to balance the budget while exempting entitlements, no new revenues, you'd have to cut non-discretionary defense spending by 60 percent -- cut it by 60 percent.  That's everything -- student loans, NASA, veterans programs -- you name it, we'd have to cut by 60 percent -- six, zero. 

     That's just not going to happen.  That's why we called for the commission, because we've got to look at some tough, long-term policy objectives.  And that's why we've got to -- and I will personally do this, I will say to my Republican friends, I want to solve it.  I don't want to play politics on it, but you've got to step up, you've got to fill these slots with this commission that we're going to set up, put these people in a room, and actually solve some of these problems.  And I hope they do.

     And maybe I'm naïve.  I'm still counting, Evan, on the notion that good policy over the long term is good politics.  If you do the right thing, and you explain it clearly and you do it openly, I'm confident that the American people -- you can have an adult conversation and say, this is not going to be easy, this is not going to be painless, we're going to be struggling for a while, but our future is bright.  And if we show the same grit and determination that previous generations have shown, I have every confidence that we are going to have a 21st century, the American century, just like the 20th. 

     All right?  Thank you, everybody.  God bless you.  (Applause.)

                                      END                 11:25 A.M. EST
 

 

 

Remarks by the President in Town Hall Meeting in Nashua, New Hampshire

Nashua High School North, Nashua, New Hampshire

2:05 P.M. EST

THE PRESIDENT:  Thank you. Thank you.  Hello, Nashua!  Thank you very much.  Thank you, guys.  Thank you so much.  Everybody, please have a seat.  Thank you.  Well, it is --

AUDIENCE MEMBER:  We love you!

THE PRESIDENT:  I love you back!  (Applause.)  It’s great to be here.  Great to be back in New Hampshire.

Now, some of you may remember, I’ve spent a little time in this state.  (Applause.)  I’ve had beers at the Peddler’s Daughter.  (Applause.)  I manned the scoop at ice cream socials from Dover to Hudson.  I’ve walked Main Street in Concord, visited with folks in all 10 counties.  I even once flew into the airport in Milan, which has got to be one of the only airports with a functioning wood stove.  (Laughter.)  We spent a bunch of times in this gym, caused traffic jams several times.  And just have a lot of good friends here in this state, here in this city, and here in this -- here in this high school.  So I'm just grateful to all of you for taking the time to be here.

I've got a couple of special thank yous to say.  First of all, please thank Tim Dining for the wonderful introduction and for the great work that he’s doing day in, day out.  (Applause.)  I want to thank David Ryan, doing a great job as principal here at Nashua North.  (Applause.)  Mayor Donnalee Lozeau is here, give her a big round of applause.  (Applause.)  Your outstanding governor, John Lynch, is here.  Give John a big round of applause.   (Applause.)

Three great members of Congress:  Senator Jeanne Shaheen.  (Applause.)  Congressman Paul Hodes.  (Applause.)  Congresswoman Carol Shea-Porter.  (Applause.)  And behind me I've got the outstanding administrator for our Small Business Administration, who hails from these parts, Karen Mills.  Give Karen a big round of applause.  (Applause.)

So I want to spend a bunch of time hearing from you, answering your questions.  But if you'll indulge me, I want to make some brief remarks on the front end.

I've had the privilege of getting to know people here in New Hampshire.  I've seen firsthand that spirit of independence and spirit of self-reliance.  I know how hard all of you work and how tough and resilient you are.  But I also know that people here in New Hampshire have been tested by the last two years, just like people all across the country.  We've gone through the deepest recession since the Great Depression, and folks here have had their lives uprooted by lost jobs and foreclosed homes, shuttered businesses, vanished savings.  Many good, hardworking people who met their responsibilities are now struggling, in part because folks on Wall Street and people in Washington didn't meet their responsibilities.

So when I took office, we knew the first thing we had to do was to break the back of this recession.  And sometimes that meant doing some things that weren't easy, doing some things that weren't popular.  Lord knows it wasn't popular to prevent our financial system from collapsing.  We had to throw a lifeline to some of the very firms that had helped cause this crisis in the first place.  But it was the right thing to do, because if we hadn't taken those steps, the entire system could have gone down and taken our economy and millions of families and businesses with it.  We couldn't afford that.

Because of the steps we've taken, the markets have now stabilized.  Nobody's worrying about another Great Depression like they were just a year ago, and the worst of the storm has passed.

But I don't need to tell you the devastation remains.  Today, one in 10 Americans still can't find work.  That's why jobs has to be our number one focus in 2010.  (Applause.)

And we're going to start where most new jobs start -- with small businesses.  These are the companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it's time she becomes her own boss.  They're companies like ARC Energy, which I just visited before I came here.  It's a terrific -- (applause) -- there you go.  A little booster.  (Laughter.)

Now, these folks are hard at work on a new manufacturing process for ultra-efficient LED lights that will make them more affordable for people all across the country and around the world.  The technology they've created is the only one of its kind in the entire world.  They're this little business just on Amherst Street, but they've got the potential to revolutionize an entire industry, right here in Nashua.  Right here in Nashua.  (Applause.)

Now, small businesses like ARC Energy have created roughly 65 percent of all new jobs over the past decade and a half.  So we need to make it easier for them to open their doors, to expand their operations, to hire more workers.  That's why I've already proposed a new tax credit for more than 1 million small businesses that hire new workers or raise wages -- and a tax incentive for all businesses, large and small, to invest in new plants and equipment.  And while we're at it, we should eliminate all capital gains taxes on small business investment, so these folks can get the capital they need to grow and create jobs.  And when they start making a profit, they can put those profits back into the business.

Now, that's particularly critical right now, because bank lending standards have tightened since the financial crisis and many small businesses are still struggling to get loans.

And that's why today, I'm announcing a proposal to take $30 billion of the money that was repaid by Wall Street banks, now that they're back on their feet, take that $30 billion and use it to create a new Small Business Lending Fund that will provide capital for community banks on Main Street.  (Applause.)  It's the small, local banks that work most closely with small businesses.  They usually provide them their first loan.  They watch them through good times and bad.  The more loans these smaller banks provide to creditworthy small businesses, the better deal we’ll give them on capital from this fund that we've set up.  And if you combine it with my proposal back in December to continue waiving fees and increasing guarantees for SBA-backed loans, all this will help small banks do even more of what our economy needs -- and that's ensure that small businesses are once again the engine of job growth in America.  Now, I'm convinced we can make that happen.  (Applause.)

This is just one example of what we’ve been doing to create jobs this past year.  As some of you might remember, last February, we passed the Recovery Act, which had three parts.  One-third was tax relief for small businesses and for 95 of you, 95 percent of working families.  One-third of the Recovery Act was emergency relief, like increasing unemployment benefits and helping states keep teachers and police officers and firefighters from losing their jobs.  And one-third was putting people to work on infrastructure and renewable energy and medical research, and more.

Now, if you hear some of the critics, they'll say, well, the Recovery Act, I don't know if that's really worked, because we still have high unemployment.  But what they fail to understand is that every economist, from the left and the right, have said because of the Recovery Act, what we've started to see is at least a couple of million jobs that have either been created or would have been lost.  The problem is 7 million jobs were lost during the course of this recession.  So we've still got a big hole to fill.  It's going to be absolutely critical that Congress acts over the next several months to make sure that we don't lose sight of the fact that even though the economy is now growing again -- almost 6 percent last quarter -- people have not started hiring again.  And we've got to do everything we can to put people back to work, because we need a sustainable recovery over the long term.  (Applause.)

I've got to be honest with you, there's no magic wand that makes the economic problems that were years in the making disappear overnight.  And sometimes, it’s easy for politicians to exploit the anger, the pain that people are feeling right now.  I have to point out, though, that some of the very same folks in Congress who opposed the Recovery Act -- and claim that it hasn’t worked -- have been all too happy to claim credit for Recovery Act projects and the jobs those projects have produced.  (Applause.)  They come to the ribbon cuttings and -- (laughter.)  They found a way to have their cake and vote against it, too.  (Laughter.)

But look, we’re making progress, but it can’t come fast enough.  We want to accelerate it.  And we know that if we truly want to have long-term economic growth in this country, then we need to start addressing some of the struggles the middle-class families have been dealing with for years, long before this particular recession hit.

This past decade has been one of the toughest our middle class has faced in generations, because folks have seen their paychecks shrink, their housing prices fall, while the cost of everything -- from groceries to health care to college -- keeps going up.  So a lot of you are working two jobs.  Certainly everybody in your household is working.  You're working longer hours -- but you feel like you’re treading water and in some cases it’s not adding up.  A lot of people put their kids to bed wondering whether they’ll be able to give them the opportunities in life that they got from their parents.

And the thing, New Hampshire, when I was up here campaigning, I told you -- I didn’t run for President to kick these challenges down the road.  I didn’t run for President to play it safe.  I didn't run just to keep my poll numbers as high as possible for the next election.  I ran to solve problems for the next generation.  (Applause.)  I ran to get the hard things done.  That's why you elected me.  (Applause.)

So I won’t rest until businesses are hiring again, and wages are rising again, and the middle class is thriving again, and we’ve finally got an economy that works for all Americans, not just some Americans.  I won't rest until we do what we know has to be done to secure our leadership in the 21st century.  I don't want to cede our future to China and India and European countries.  I'm not willing to settle for second place -- not for the United States of America.  (Applause.)

But if we're going to win the race, here's the thing:  I can't do this alone.  Democrats can't do it alone.  The President can't do it alone.  We've got two parties in this country, and that's a good thing.  It means we've got heated debates and vigorous disagreements.  And as messy as democracy sometimes is, it means bad ideas can be discarded and good ones can be refined and we don't go too far in any one extreme.  That's the genius of American democracy.

So I was very pleased when the House Republican Caucus graciously invited me to attend their retreat last week.  (Applause.)  We had a good time for more than an hour.  For more than an hour, we had a frank exchange about the issues facing our country, and we aired some of our grievances, we shared some ideas.  There were plenty of things on which we didn't agree, but there were also some things on which we did, and even more things that we should agree on, if we could just focus on solving problems instead of scoring political points.  (Applause.)

Now, for example, we all agree that education is the key to a 21st century economy.  (Applause.)  We all agree that the best anti-poverty program around is a world-class education.  (Applause.)  So why don't we work together to transform our schools, so that every child in America can compete with their counterparts around the world, from Beijing to Bangalore.  Let's work together to upgrade our community colleges, which are the gateway to a career for so many children from so many working families.  (Applause.)  And I know we've got a lot of young people who are about to head off to college.  In an era when a high school diploma is no longer a guarantee of a good job, let's make college affordable for every qualified student.  (Applause.)  As I said at the State of the Union, no graduate should have to pay more than 10 percent of his or her income on student loans each year.  (Applause.)  We can see to it that they don't.  We can see to it that they don't.  We've got legislation pending right now that could make this happen.

Republicans and Democrats may not see eye to eye on the threat of global warming -- I happen to think the evidence is overwhelming.  (Applause.)  Some disagree.  That's -- we can have a respectful argument there.  But shouldn't we agree that American homegrown energy is good for our security, and that new clean energy jobs are good for our economy?  (Applause.)  Can't we all agree that these jobs shouldn't be going to China or Germany or Spain -- they should be right here in United States of America.  (Applause.)

So let's invest in innovation.  Let's put people to work on solar panels and wind towers and cutting-edge batteries.  Because the nation that leads the clean energy economy will be the nation that leads the global economy, and America has to be that nation.  (Applause.)

These are key parts of the foundation we need to build for a better future for our families, for our country.

Another foundation stone is fixing a health insurance system that works better for insurance industry than it does for the American people.  (Applause.)  I do not quit.  We are going to get that done.  (Applause.)  We've got to get it done.  We have to get it done.  (Applause.)

Nobody should be satisfied with a system that allows insurance companies to deny care to folks with preexisting conditions, that allows insurance companies to kick people off their plans when they get too sick.  Nobody should accept a system where small businesses are forced to pay outrageous premiums to get their workers covered, and seniors have big gaps in their Medicare prescription coverage.  (Applause.)  Nobody should accept another decade in which health insurance premiums double and millions lose their coverage altogether.  (Applause.)

There was just a report the other day that showed even greater numbers of Americans now are having to rely on government insurance, not because of my plan, but because employer-based insurance has declined to an all-time low.  Now, these are the things that I hear about every day in the letters I get -- from families going bankrupt; from small businesses crushed by their health care costs.  So I am not going to walk away from these efforts.  I will not walk away from these people, and Congress shouldn't either.  (Applause.)  We should keep working to get it done -- Democrats and Republicans together, let's get it done this year.  (Applause.)

Now, finally, we should all be able to agree that we've got to do something about our long-term deficits.  Now, these deficits won’t just burden our kids and our grandkids decades from now -- they could damage our markets now, they could drive up our interest rates now, they could jeopardize our recovery right now.

Responsible families don’t do their budgets the way the federal government does.  Right?  When times are tough, you tighten your belts.  You don’t go buying a boat when you can barely pay your mortgage.  You don’t blow a bunch of cash on Vegas when you’re trying to save for college.  You prioritize.  You make tough choices.  It’s time your government did the same.  (Applause.)

Now, that’s why I continue to insist on making investments for job growth this year, why I continue to insist that we put more money into education; that's why I say we put more money into science and technology for innovation.  (Applause.)  That's why I continue to believe that we've got to invest in our infrastructure so that we are building the kind of America that can compete in the 21st century.  Those are smart investments.  That's like buying the new boiler -- if it's busted, you got to get a new boiler.  If the roof's leaking, you got to fix the roof.  There's some things you've got to do.

But you can put off buying the new curtains, even if it'd be nice to have.  You know, that -- remodeling the bathroom, I mean, everything is working.  You don't need it right now.  I mean, what we've been having are folks who want to buy the curtains but don't want to fix the boiler.  (Applause.)  And our priorities have to change.

That's why I proposed cutting more than 120 government programs -- consolidating ones that are duplicative, reducing ones that are wasteful, eliminating those that just don't work.  (Applause.)  That's why I proposed to cap government spending over the next three years.  Spending related to Medicare, Medicaid, Social Security, and our national security will not be affected.  (Applause.)  But all other discretionary government programs will.  That doesn't mean we have to do less.  It just means we've got to do more with the money we've got.  That's why I'm grateful that both the House and the Senate have now voted to reinstate what's called the PAYGO rule.  It's a very novel concept.  It means "pay as you go."  (Laughter and applause.)  By the way, that is not to be confused with Paul Hodes's wife Peggo.  (Applause.)  That's a different -- although I really like her, too.

So the PAYGO rule helped create those record surpluses back in the 1990s.  You remember that?  That was way back when -- (laughter) -- instead of the record deficits that we had when I came into office.  And the concept here is, as I said, is it's very simple.  You want to start a new program?  Go ahead.  But you've got to cut another one to pay for it.  That's how we'll make sure we're spending your money wisely.  You want to cut taxes for somebody?  That might be a good idea, but you got to find a way to close the revenue hole, so that everything actually adds up.  That's how we'll get our deficit under control.  That's something that Democrats and Republicans should be able to agree to -- if we could just stop playing politics, get past the Washington game.  (Applause.)

Now, let me just -- let me just give you an example here, because we released the budget, right way the other side says, oh, look at all these trillions of dollars of debt -- absolutely.  I mean, I'm concerned about it very much.  It keeps me awake at night, looking at all that red ink.  Most of it is structural and we inherited it.  The only way that we are going to fix it is if both parties come together and start making some tough decisions about our long-term priorities.

But last week, the Senate blocked a law that I had supported to create a bipartisan fiscal commission that would come up with a set of recommendations for cutting our deficits in the long term.  This is a difficult thing.  It's only going to be solved if we do it together.  This law failed by seven votes when seven Republicans who had co-sponsored the bill -- had co-sponsored the idea -- suddenly walked away from their own proposal after I endorsed it.  (Laughter.)  So, they make a proposal.  They sign on to the bill.  I say, great, good idea.  I turn around -- (laughter) -- they're gone.  What happened?  (Laughter.)  Look, it’s one thing to have an honest difference of opinion on something.  There’s nothing wrong with that.  But you can't walk away from your responsibilities to confront the challenges facing the country, because you don't think it’s good short-term politics.  We can’t afford that.  (Applause.)  We can't afford that.  (Applause.)

The message you all sent when you elected me, the message that was sent this past month -- whether you're Democrat, Republican, independent -- you're out of patience.  You're out of patience with this kind of business as usual.  You want us to start worrying less about our jobs and more about your jobs.  (Applause.)  You want us to worry less about our election and more about solving your problems.  And for once, you’d like a government that reflects a sense of responsibility and decency and generosity, because that's how you try to live your lives.  (Applause.)

That's the spirit that led students here at Nashua North to spring into action in the wake of the tragedy in Haiti.  And I want to congratulate you guys for planning fundraisers and selling ribbons and collecting money at lunch -- all to help folks that they’ve never known in a place that most of them have never been.  (Applause.)  We're proud of you for that.  That's good work.  That's good work.  (Applause.)

It’s that same spirit that drives small business owners like Tim, and like Kedar Gupta, the CEO of ARC Energy.  I told you about him, I told you about the company.  These are the two guys who are running it right here.  Now, Kedar founded ARC, but he also, years before, co-founded a company called GT Solar with just $1,000.  It now has 343 employees, hundreds of millions of dollars in revenue.  And as he was growing that company, nursing it from $1,000, he made sure his employees shared in the company’s profits.  When the company hit hard times, he cut his own salary first.  When talking about his business philosophy, he explains that many CEOs take a “me, me and me” approach.  But his approach has been “we” -- not about benefiting just himself, but lifting his employees too, and his community.  (Applause.)

We need that kind of spirit.  We've come through a tough year and a tough decade, but that fundamental decency, that sense of determination, that grit, that willingness to work hard in pursuit of a good idea, the determination to do what's right -- that's been at the core of the American experience.  And that should fill us all with optimism about what lies ahead.  So let’s put aside the small things.  Let’s come together.  Let's do what's hard.  Let's welcome what's hard.  Let's welcome the challenge.  Let's do what's necessary to help the middle class succeed again; to give our shot -- our kids a shot at their dreams again; and to fulfill the promise of this great country in our time, in our generation.  That's our test.  Thank you very much, everybody.  God bless you.  (Applause.)  God bless the United States of America.  Thank you.  (Applause.)

Okay.  You know, when in New England, we got to do the town hall.  (Laughter.)  You guys have been -- thank you.  Thank you very much.  Thank you.  God bless you.  (Applause.)

Now, a lot of you guys have been in these before, so you know the drill.  I'm going to call girl, boy, girl, boy.  (Laughter.)  There are microphones in the audience, and I will try to get in as many questions as possible.  And it would be nice if you introduce yourself so that people know who you are.  And don't yell out.  Just raise your hand and I'll call on you -- although she seems very eager, so go ahead.  All right, we're going to start right around here.

Q    I'm (inaudible), I'm from Fairfield, Connecticut.

THE PRESIDENT:  Hey.  Uh-oh.  How did this Connecticut person sneak in here?  All right, go ahead.  I love people in Connecticut.  Go ahead.

Q    Due to the great health care in this country I am a three-time cancer survivor.  (Applause.)

THE PRESIDENT:  We’re proud of you.

Q    But like many cancer patients was pushed out of a job.  I was lucky enough to be able to retire early, buy into the retirees’ health plan and then start my own successful business.  (Applause.)  However, this is not the case for most people with chronic illnesses.  Health care for cancer survivors is more expensive.  How are the jobs bill and the proposed health care legislation going to account for the level of variability of the needs of cancer survivors?

THE PRESIDENT:  Well, look, first of all, we’re proud of you, you look great.  You say you agree?  (Laughter.)  You should.

Q    Health-wise I'm great.  (Laughter.)

THE PRESIDENT:  No, you look good, too -- go ahead.

Q    Thank you.  (Laughter.)

THE PRESIDENT:  There are a couple of aspects of this.  First of all I think we shouldn’t lose sight of the enormous potential in the new branches of medicine to go after cancer.  I was over at NIH, National Institute for Health.  We’ve increased funding drastically.  This is an area that should be one of our competitive advantages, right?  We have the best scientists in the world.  We've got the best universities in the world.  We have traditionally led in innovation.  And the more money we're putting in, they're starting to come up with drugs that only kill the cancer cells and don't kill healthy cells, or that can be tailored to a particular kind of cancer that's matched up because of new genetic information.  So there's enormous potential here to go after cures and that involves the kind of research and investment that we've made.

In our health care bill, one of the most important components was the idea, the basic principle that nobody should have to go without health insurance because of a preexisting condition.  (Applause.)  Nobody should have to go after -- go without health insurance without -- because of a preexisting condition.  Now, this is something that's very popular if you just say it in isolation, but when you start explaining what is required to make that happen, then sometimes some people get a little nervous.  You can't have insurance companies have to take somebody who's sick, who's got a preexisting condition, if you don't have everybody covered, or at least almost everybody covered.

And the reason, if you think about it, is simple.  If you had a situation where not everybody was covered but an insurance company had to take you because you were sick, what everybody would do is they'd just wait till they got sick and then they'd go buy insurance.  Right?  And so the potential would be there to game the system.

The reason I point that out is because a lot of the reforms that we've proposed fit together.  So we want insurance reforms that make sure that a cancer survivor can still get health insurance.  But to do that, we want to make sure that everybody has health insurance, which in turn allows us to cut back on some wasteful spending and help upgrade hospitals and doctors and how they perform medicine because now they're not dealing with as many emergency room patients.

So the cost control aspects of it, the coverage aspects of it, and the insurance reform aspects of it all fit together.

Here's the problem, though, is when you've got all those things fitting together it ends up being a big, complicated bill and it's very easy to scare the daylights out of people.  And that's basically what happened during the course of this year's debate.  But here's the good news:  We're essentially on the five-yard line -- for those who like football analogies.  So we've had to go into overtime, but we are now in the red zone, that's exactly right.  We're in the red zone.  We've got to punch it through.

What I have said is that both the House bill and the Senate bill were 90 percent there.  Ten percent of each bill, people had some problems with, and legitimately so.  So we were just about to clean those up, and then Massachusetts’ election happened.  Suddenly everybody says, oh, oh, it's over.  Well, no, it's not over.  We just have to make sure that we move methodically and that the American people understand exactly what's in the bill.

And what I've done is I've said to the Republicans, show me what you've got.  You've been sitting on the sidelines criticizing what we're proposing.  I'm happy to defend insurance reforms; I'm happy to defend the fact that we need to provide 30 million people with access to coverage; I'm happy to defend the need to provide small businesses an ability to pool so that they can have the same purchasing power that the big companies have and drive down their premiums and drive down their rates for their employees.  I'm happy to have these debates.  I just want to see what else you got.  And if you've got a good idea, great. 

At the Republican caucus, they held up -- they said, we've got a plan; it's going to provide everybody coverage at no cost.  And I said, well, if that were true, why wouldn't I take it?  My wife Michelle thinks I'm stubborn sometimes, but I'm not that stubborn.  Okay, let me think.  I could have everybody get health care coverage that's high quality, and it's free, which I'll bet is really popular.  But I'm not going to do that.  I'm going to go through the pain of really working through this hard process in Congress, getting yelled at and called a socialist, because I just -- that's how I roll.  I'm a glutton for punishment.  (Laughter.)

No, look, if this were easy and simple, first of all, somebody would have done it before.  Seven Presidents have failed at this; seven Congresses have failed at this.  If this was simple, it would have already been done.  It's not.

This is one-sixth of our economy; it's extremely complex.  But I want everybody to understand here:  The health care proposal we put forward is basically the same shape as the proposal that was put forward by Tom Daschle, former Senate Democratic Majority Leader; Bob Dole and Howard Baker, two Republican Senate leaders.

So it can't be that radical.  It's a very straightforward principle that says we're going to set up an exchange, a pool, where people who don't have health insurance and small businesses who can't afford it right now can buy into the pool.  If even after we've driven premiums down because of increased competition and choice, you still can't afford it, we're going to give you a subsidy, depending on your income.  We're going to ask that everybody get health insurance, but if you still can't afford it we'll exempt you, we'll give you a hardship exemption, because there are some folks, you know, that it's just too tough.

We are going to insist that the insurance companies all abide by certain practices like making sure that you take people with preexisting conditions, that you don't drop people just because they get sick.

We then say that we have to control the costs of medicine, so we're going to set up a panel of experts -- doctors and health care economists -- who are going to scrutinize how we reimburse things like Medicare to make sure that doctors are encouraged to work as teams -- don't order five tests if you could just do one test and then e-mail it to five different doctors.  Pretty straightforward.

Now, what I just described is the essence of what we're doing.  And according to the Congressional Budget Office, it would save $1 trillion in our deficits, which is the single most important thing we can do, by the way, to reduce our deficit over the long term.

Almost all the growth in deficit has nothing to do with my Recovery Act, and has everything to do with the growing costs of Medicare and Medicaid.  Almost all of it.  You project out 20-30 years -- almost all the growth is because health care costs are just going out of control and we've got an older population that's going to need more care.  And if we can't figure out how to get a better bang for the buck, we're going to lose.

So here's my thing:  You got a better idea?  Bring it on.  But what I will not do is to stop working on this issue -- because it is the right thing to do for America and you need to let your members of Congress know they shouldn't give up, they should keep on pushing to make it happen.  (Applause.)

All right.  Okay.  All right.  It's a guy's turn.  It's a gentleman's turn.  This gentleman right here in front.  Go ahead -- hold on one second, we've got a mic coming over here.

Q    I'm Gary Meyer.  I live in Hampton, New Hampshire, and I was a quality leader who worked with (inaudible).  And I know you're well aware that there's a lot of non-valuated work both within health care, within education, and within a lot of businesses and government.  You also talked eloquently about the need to have more jobs and to be more energy efficient.  All these things together require that we get a health care act reform passed in the Senate, a better one than we have today, and that we also get a clean air act passed.  Would you be willing to meet one on one with Senator Gregg to get these things passed in the Senate?

THE PRESIDENT:  Oh, I wasn’t -- I'm willing to meet with anybody, including Senator Gregg, who I offered a job to.  (Laughter.)  I don't know if you guys remember that.  (Applause.)  I like Senator Gregg.  I think he is a -- he is a serious person.  But you know that fiscal commission that I just talked about, that was Gregg's proposal.  That was his proposal.  It was Senator Judd Gregg and Senator Kent Conrad.  And they had been advocating for this for years.  Mitch McConnell, the Republican Senate -- Republican Leader had just a few months ago said this was the way to deal with this.  So I said, great, let's do it.  And, suddenly, they're gone -- not Judd, Judd is still supportive of it.  So what we're going to try to do -- we're going to try to do it by executive order.

My point is the easiest thing to do in politics is to point fingers, to figure out who to blame for something, or to make people afraid of things.  That's the easiest way to get attention.  That's what reporters will report on.  You call somebody a name, you say, look what a terrible thing they've done and they're going to do more terrible things to you if you don't watch out.  And you'll get a lot of press attention.  And, in some cases, you can win elections, particularly when unemployment is 10 percent.

What's hard is to figure out how to solve these problems.  Our long-term deficit, if we can't control health care costs -- I don't care who's talking about eliminating waste from the government, we can't solve the problem.  A lot of people just -- let me just give you one example.  If you ask a lot of folks what accounts for the federal budget, they'll say foreign aid and pork projects, and if you just eliminated all the foreign aid and the pork projects, somehow we'd bring our deficit under control.  Foreign aid accounts for about 1 percent of our federal budget -- 1 percent, not 25 percent, not 20 [percent] -- 1 percent.  Earmarks -- all these pork projects -- a lot of them, by the way, people like, a lot of them are wastes of money, and we got to be able to distinguish between the two and make it more transparent so that they're not stuck into bills without anybody knowing about it -- (applause) -- but they only cost -- they amount to about 1 percent of the budget as well.

What really accounts for our federal budget is Medicare, Medicaid, Social Security, defense, interest on the national debt, and then everything else, from national parks to the environmental -- the EPA, the Environmental Protection Agency.  And in order -- if you just wanted to cut the deficit to balance the budget, only on non-discretionary -- or on discretionary non-defense spending -- so if you wanted to exempt out all the entitlements, exempt defense, you'd have to cut all those other things by 60 percent -- 60 percent.  Can you imagine?

So we've got to have an honest conversation about all the aspects of the budget, and that's what this commission was designed to do.  That's why I think Judd Gregg was absolutely right.  I support him on this.  And we're going to set up an executive -- by executive order a commission to do this.

But I want good ideas.  It is not in my interest to bloat government with wasteful programs, because every time I spend money on a program that doesn't work, that's money that I'm not spending on early childhood education that would make a difference in a child's life -- (applause) -- or on college scholarships to send kids to school.  We've got to use our money more wisely.  But that can only be done if both parties are responding to the interests of the American people and not their short-term politics.

All right, let's see, a woman's turn.  That young lady up there.  Yes, you -- yes.  You sound surprised.  (Laughter.)  Oh, wait, wait, wait, I was calling on this young lady in the black blouse right here, I'm sorry.  Sorry about that, but it's nice to see you, though.  I may call on you in a second.  (Laughter.)  Go ahead.

Q    My name is Ashley Sevins (phonetic) and I live here in Nashua and attend Nashua High South.  (Applause.)  There were a lot of -- during your campaign, there was a lot of promises of transparency, but lately a lot of stuff in the media said that most of health care has been behind closed doors.  I was just wondering how you would grade yourself on your transparent government.

THE PRESIDENT:  Well, you know, I've got to be careful about grading myself.  (Laughter.)  But I will tell you that a recent independent watchdog group took a look and said this has been the most transparent government, most transparent administration, that we have seen in a very, very long time, perhaps in the modern era.  (Applause.)

And here's the reason.  Let me just list off the things we've done.  This is the first White House ever where you know every single person who visits the White House.  Now, that seems like a small thing, but that means any lobbyist, any company -- anybody who comes to visit the White House, you know who it is.

The Recovery Act that I just talked about -- we put every dollar of spending in the Recovery Act on a Web site.  You can go and look up right now every dollar that's been spent in the Recovery Act.  You know where it's been spent, who got contracts, how it's been spent.  That's all there, plain as day, for everybody to see.

So we've put more information online.  We declassified things that used to be classified.  We've revamped the classification system so it's not used for us to just hide things that might be embarrassing to us.  We posted salaries for everybody in the White House all on a Web site, which as you might imagine, when it comes out, everybody is looking in the White House.  (Laughter.)  Hmmm.  (Laughter.)

But seriously, we very much believe in transparency and accountability.

Now, when it came to the debate, think about all the hours of congressional hearings, all the meetings that were on C-SPAN.  They were constant.  It took a year, remember?  I did town hall meetings all across the country in August talking just about health care.  So when people say, well, the negotiations weren't on C-SPAN, what they're frustrated about -- and I take responsibility for this -- is that after Congress had finally gone through its processes, the House had voted on a bill, the Senate had voted on a bill, it is true that I then met with the leaders and chairmen of the House and the Senate to see what differences needed to be resolved in order to get a final package done.  And that wasn't on C-SPAN.

And, look, I made that commitment and I probably should have put it on C-SPAN, although one of the tricky things is trying to figure out, well, if it is on C-SPAN, are people actually going to be saying what they think about trying to get the bill done or is everybody going to be posturing to say things that sound good for the camera.

But I think it is a legitimate criticism to say, if you say that all of it is going to be on C-SPAN, all of it is going to be on C-SPAN.  Which is why, at this point, it's important for me to say that when the Republicans put forward their proposals for what they want to do on health care, and we put forward what we want to do on health care, I very much want that on C-SPAN, and I want everybody here to watch.  (Applause.)  I want everybody here to watch.  Because I think it will be a good educational process for people to weigh the arguments about the relative merits of the bill instead of listening to millions of dollars' worth of insurance industry ads that have been put out there or whatever pundit on the left or the right is saying about these different issues.

So we're going to keep on doing it.  Have we gotten it perfect?  No.  Have we done better than any administration in recent memory?  Absolutely.  And we'll keep on trying to improve on it.

All right?  Good.  (Applause.)  It's a gentleman's turn.  This gentleman there in the back, in the tie.  He got all spruced up for the meeting; I want to make sure I call on him.

Q    My name is Dick Swett, I live in Bow, New Hampshire.  (Applause.)

THE PRESIDENT:  Hey, Dick, you got a big fan club here.

Q    I used to occupy the seat that Paul Hodes holds now, and he's doing a great job.

THE PRESIDENT:  He's a good guy.

Q    He is.  First of all, thank you for coming to New Hampshire.  We are very pleased and proud that you're here.  And we are grateful for the opportunity to talk.

Now, in your discussions, you have said that you're ready to listen to anybody with a good idea.  Well, I'd like to go out on a limb and say I think I've got a good idea; I'd like to share it with you.

THE PRESIDENT:  Good, please do.

Q    When we talk about energy issues in this country, we are talking about jobs; we're talking about dependence on international oil, some coming from difficult places that are feeding terrorist organizations that are causing harm to our citizens; we are talking about a problem of keeping our money here at home as opposed to send it overseas when we purchase that foreign oil.

I think what we can do is we need to put all of these issues together in one basket, and first set a date by which time we can be independent enough of foreign oil; I can't say that we could be completely independent, and I think you understand the reasons why.

But if we can invest in technology here at home, to develop clean technology, place that technology in developing countries, not only just where they can have energy and electricity to be productive with, but establish with that an economic system where they have jobs and they are opening up new markets that we can sell our products into and that we can build our relationships with their leaders through.

And at home, if we can focus on making ourselves more energy efficient, because we are a very inefficient country when it comes to the use of energy, just like all of the industrialized countries.  These two things, I think, done first can help us to avoid having to do cap and trade and other aspects with environmental controls that are going to have negative impacts on our economy.  We need to make productive use of our technology and our people so that we can clean up the economy, put people to work, and then if that isn't sufficient enough, we then go to the kinds of programs that have been talked about at the Copenhagen summit.  (Applause.)

THE PRESIDENT:  Well, let me respond by talking more broadly about energy.  First of all, those are such good ideas I've already adopted them, although I didn't know they came from you.  (Laughter.)

Number one, we have to invest in innovation and new technologies.  There's no doubt about it.  And by the way, we've got to upgrade some old technologies.  I know it's controversial in some quarters, but if you're serious about dealing with climate change then you've got to take a serious look at the nuclear industry.  If you are serious about climate change, you've got to figure out is there technology that can allow us to sequester coal and the emissions that are set out.

The reason for that is not just for the United States.  China is building a coal-fired plant once a week, just about --India is doing the same -- because coal is cheap.  And unless we can come up with some energy alternatives that allow us to franchise that technology so that they are equipped to burn that coal cleanly, we're going to have problems no matter what we do in this country when it comes to the environment.  So technology is key.  And, by the way, we can make significant profits and create huge jobs just upgrading traditional technologies.  Then you've got the whole clean energy sector, which is ready to take off if we provide the kind of seed capital, the kind of R&D credits that are necessary.

This past recession almost killed a lot of our homegrown clean energy sectors.  And the industry will tell you.  You talk to the wind industry or the solar industry, if we hadn't passed the Recovery Act and all the support for clean energy, a lot of them would have completely gone under and we would have been ceding leadership as we already have, unfortunately, to a lot of countries like Spain and Germany and Japan that are doing a lot more work on it.  So this is a huge engine for job creation, and we've got to make those investments.

The third thing you said, energy efficiency.  We are one of the least efficient advanced economies when it comes to energy usage.  And it's estimated that we could probably lop off 30 percent of our energy consumption just on efficiency without changing our lifestyles significantly.  I say "significantly" because you'd have to start buying LED batteries or LED light bulbs.  But it's still a light bulb.  You don't have to sit in the dark.  You don't have to use gas lanterns.  You just have to make the investment.  And one of the things that a company like ARC Energy is doing is trying to bring down the unit cost for each of those light bulbs.

A school building like this, guarantee you that we could make this school probably 10-15-20 percent more energy efficient.  But the problem is school budgets a lot of times don't have the money to put the capital up front to make it more energy efficient.  So are there ways we can help universities and schools and other institutions -- more efficient?  We could retrofit every building in this country that was built over the last 50 years and get huge increases in energy, huge decreases in greenhouse gas emissions.  But it requires some seed money.  It requires some work.  And that's why part of our jobs package is actually -- it's a very simple concept:  Hire people to weatherize homes that will save those homeowners' heating bills, or cooling bills, and at the same time put people back to work and train them in things like insulation and heating systems.  So there's a lot of opportunity there.

Now, here's the only thing I would say.  The most controversial aspects of the energy debate that we've been having -- the House passed an energy bill and people complained about, well, there's this cap and trade thing.  And you just mentioned, let's do the fun stuff before we do the hard stuff.  The only thing I would say about it is this:  We may be able to separate these things out.  And it's conceivable that that's where the Senate ends up.  But the concept of incentivizing clean energy so that it's the cheaper, more effective kind of energy is one that is proven to work and is actually a market-based approach.  A lot of times, people just respond to incentives.  And no matter how good the technology is, the fact of the matter is if you're not factoring in the soot that's being put in the atmosphere, coal is going to be cheaper for a very long time.  For the average industry, the average company, we can make huge progress on solar, we can make huge progress on wind, but the unit costs -- energy costs that you get from those technologies relative to coal are still going to be pretty substantial.  They're going to get better, but it might take 20-30-40 years of technology to get better.

And so the question then is:  Does it make sense for us to start pricing in the fact that this thing is really bad for the environment?  And if we do, then can we do it in a way that doesn't involve some big bureaucracy in a control and command system, but just says, look, we're just going to -- there's going to be a price to pollution.  And then everybody can adapt and decide which are the -- which are the best energies.  And that's -- that's, by the way, remember acid rain?  That's how that got solved, was basically what happened -- the Clean Air Act slapped a price on sulfur emissions.  And what ended up happening was all these companies who were saying this was going to be a jobs killer, et cetera, they figured it out.  They figured it out a lot cheaper than anybody expected.  And it turns out now that our trees are okay up here in New Hampshire.  That's a good thing.  So we should take a lesson from the past and not be afraid of the future.  (Applause.)

There's a signal that I only have time for a few more questions.  I'm going to try to take two more.  It is a young lady's turn.  I shouldn't be biased against the folks back here.  Here you go.

Q    Hi.  I'm Judy Loftus.  I teach at Nashua South High School.  (Applause.)  I teach in the careers and education program, and that's a career and technical program that prepares students for lives working -- to work with children, to make a difference, from pre-school up to elementary age.

I have a couple of questions.  First of all, what are you going to do about No Child Left Behind?  We've had a lot of legacies from the last administration.  And as an educator I've seen the impact of that in my school and it hasn't been a positive impact.  We're focused more on testing and worrying about test scores than what's right for kids.  (Applause.)

And the second is, what are you going to do to help my students, who want to be teachers, who want to make a difference in this world, be able to afford a college education and not be saddled with so much debt that they're working -- as many teachers in Nashua are -- two jobs, to make ends meet to pay their student loans?  (Applause.)

THE PRESIDENT:  It's a good question.  The short-term proposals that I put forward are designed to accelerate job growth, that inspire a company that's right on the brink of hiring but it's still kind of uncertain:  Should I make that investment, should I bring in somebody out of the workforce?  Well, maybe if I get a $5,000 credit or maybe if I can get a loan from SBA, I'm going to go ahead and take the plunge.  So we're trying to induce hiring to start a little quicker than it's been -- than has taken place so far.

But long term, the question you ask is the most vital one for how our economy performs.  Look, this is a very straightforward proposition here.  Countries that have a highly skilled workforce, that innovate, that excel in science and technology, are going to dominate the future.  And countries that don't are going to see, over time, their standard of living decline.  It's pretty straightforward.  If we're the country that's innovating and creating new products and at the high end of the product chain, then everybody here is going to have enormous opportunity.  And if we're not, we don't.

So what does that mean?  On the education front, our elementary schools, our secondary schools, have been slipping.  We used to have the best; now we have pockets of the best, and then we have mediocrity, and then we have some schools that are just terrible.  We've got to make sure every child is getting a good, solid education.  (Applause.)  And what that means is, it means we continue to invest in early childhood education, which my budget does.  It means -- so that our kids are prepared when they start school.  It means that we help schools with just their basic budgets.  And as I said, the Recovery Act prevented a lot of layoffs and really patched holes in a lot of school budgets.  It's not sexy, it doesn't get a lot of credit, but it made a huge difference.

We've got to make sure, though, also, that the single most important factor in an elementary and secondary school education is fulfilled, and that is, we've got excellent teachers in the classroom who are getting paid a good salary and are getting the support that they need.  (Applause.)

Now, traditionally what's happened is the debate between the left and the right has said, well, the left just says, we just need more money in the schools and everything will be okay -- you know, it’s for new equipment, new computers, smaller class sizes.  That's been the argument on the liberal side.  The conservative side has said, the whole problem is bureaucracy, teachers' unions -- you got to blow up the system.  What my administration believes is, it's not an either/or proposition, it's both/and.  We need more money, but we need to spend the money wisely and we need to institute reforms that raise standards and push everybody in a school -- principal, teacher, student, parent -- to pursue excellence.

So last year what we did is we started with something called Race to the Top, and it's a pretty simple proposition.  We carved out a little bit of money that doesn't just go to general revenue -- Title I, all the general federal support for schools -- and we said, this money, this Race to the Top money, you get it only if you're working to make for excellent teachers, you're collecting good data to make sure that your students are actually making progress in the schools, you're dealing with the lowest-performing schools in your school district.  You've got ideas that are showing concrete results in improvement, not in absolute test scores, but in the progress that that school is making, we're going to fund those improvements.

And we've already seen reforms across 48 states, just because we incentivized reform.  That's a good thing.

This year is when reauthorization for what's called No Child [Left] Behind would be coming up, as part of the broader education legislation that's up for reauthorization.  And what we're saying there is, on the one hand, we don't want teachers just teaching to the test; on the other hand, we also want to keep high standards for our kids.  And I think the best way to do that is to combine high standards, measurable outcomes, but have an assessment system that you work with teachers on so that it's not just a matter of who's filling out a bubble, and you're also taking into account where do kids start, because not every kid is going to start at the same place.  So you want to see where do they end up at the end of the year.  (Applause.)

So I just -- I just had a meeting with my team this week about this, trying to find ways that we can improve the assessment system so we're still holding schools accountable, we're still holding teachers accountable, but we're not just holding them accountable for a score on a standardized test, but we have a richer way of assessing whether these schools are making progress.

All right, so that's the answer to the No Child Left Behind.

On the college front, here's the deal.  We've already increased Pell grants, and we want to increase them again.  (Applause.)  We've already increased both the size of each grant that's permissible, but also the number of grants available so more students can get to them.  The next step -- and this is legislation that's pending that we are strongly supportive of and I think our entire congressional delegation from New Hampshire is strongly supportive of -- what it would do is it would say to every student all across America, and this is especially important for somebody who wants to go into teaching -- not a high-salary profession -- that you will never have to pay more than 10 percent of your income on student loans.  (Applause.)  And to every student, we would say that after 20 years your debt would be forgiven as long as you were making payments commensurate with your income.  But if you went into public service, we would forgive those student loans after 10 years.  (Applause.)  And teaching obviously is one of our most important public services.

So we think this is a fair deal because what is says is you won't go bankrupt if you decide to go to college, but what it also says is you can make the choice for the lower salary but greater fulfillment, greater satisfaction pursuing your passion -- you can do that and it's not going to be cost-prohibitive.

Now, you may ask, how are we going to pay for it?  Remember, we were -- we said we're going to pay for everything from here on out, pay as you go -- PAYGO.  Right?  So here's how we're going to do it.  It turns out that right now a lot of the student loan programs are still run through financial institutions and banks.  So you got this middle man and they get billions of dollars per year managing loans that are guaranteed by the federal government.  So think about this.  You, the taxpayers, are guaranteeing that this is going to be paid back.  These institutions are essentially taking no risks, and yet they're still extracting these huge profits.

And what we've said is, look, cut out the middle man.  You take those billions of dollars, give it directly to the students; with the money that we save, we can make sure that nobody goes bankrupt because they're going to college, because we need every single person to go to college.  We think it's a good idea.  We're going to make it happen.  (Applause.)

All right.  I've only got -- I got one last question.  Oh, and it's a guy's turn.  It's a guy's turn.  All right, this gentlemen over here.  We figured -- are you a student?  Oh, you look like a student.  That's why I called on you.  (Laughter.)  You've got a baby face.

Q    It's my young face.  Thank you, Mr. President.  My name is Ronnie Camile (phonetic), I live in Nashua, New Hampshire.  Three weeks ago, as you know, there was an earthquake in Haiti.  I traveled to Haiti to visit my family.  And I know times are tough for the American people.  And, as President, what will you do to ensure that Haiti will be continued -- will receive help, because many people down there have yet to receive help?

THE PRESIDENT:  Well, first of all, I appreciate that you went down.  I appreciate what the students did here at Nashua North.  (Applause.)  There's been an outpouring of incredible generosity in response to this earthquake, and it's a testament to the American people.  Our military and our government has responded, I believe, in exemplary fashion.  We got Marines and aid workers and helicopters and food and clean water facilities -- we got those down in record time.  The devastation, and the fact that Haiti already had such poor infrastructure to begin with, makes it that much harder.  So, yes, there are still a lot of people there who are going through enormous hardship.  But America should be proud of what we've done so far.  We really should.  (Applause.)

Now, part of the point you're making though is, you know, the headlines start to drift in another direction, right?  So, it was 24/7 Haiti for about a week, and then the media decided it was time to move on to something else, so now you're not hearing about it as much.  And what can happen is that everybody's memories of the devastation start fading away, and then pretty soon people are asking:  Why are we giving money to Haiti?  So what we have to do is to build a strong consensus around a long-term recovery plan for Haiti that is not just shouldered by the United States but the entire international community.  (Applause.)  I'm going to be working with countries like France and Brazil and Canada, the European Union, Japan, China.  We want to get countries that have capacity and resources to come together with the United Nations, with the Haitian government, to determine how can we see if out of this incredible tragedy we can start actually rebuilding in a way that makes life even better for people over the long term than it was before the earthquake.  And that's going to require improving our schools, that's going to require improving the infrastructure in Haiti, that's going to require providing the ability of Haitians to sell their products like textiles into advanced countries at an advantageous situation so that they can start rebuilding their commerce and their industry.

It's in our interest to do so, though.  I want everybody to do it.  We do it because it’s right, but we also do it because when the United States sends the USS Vinson to Haiti to allow a bunch of helicopters to unload food and Marines or -- helping and we've got a hospital that's set up -- that sends a message of American power that is so important, because too often what other countries think of when they think of the United States and our military is just war.

But when they see us devoting these resources and the incredible capacity that we have to help people in desperate need, that message ripples across the world.  And it means that when you've got a guy like bin Laden out there screaming, "blow up America," it's a lot harder for that seed to take root when people have been seeing images of America making sure that people in desperate need are helped.  (Applause.)  So it's part of our national security.  It's a smart thing to do.  It's great to see you, Nashua.  I love you guys.  Thank you.  Appreciate it.  (Applause.)

END
3:21 P.M. EST