Remarks by the President on the Economy in Allentown, PA

Lehigh Carbon Community College, Allentown, Pennsylvania

11:54 A.M. EST

THE PRESIDENT:  Hello, everybody.  Hello.  Thank you so much.  Thank you, everybody.  Thank you.  Please, have a seat.  Thank you.  It is great to see you all.  It’s good to be back in Pennsylvania.  (Applause.)  Good to be back in Allentown and Lehigh Valley.  (Applause.)  Lot of wonderful faces here.

There are a couple of people I want to acknowledge.  First of all, the great governor of the great state of Pennsylvania, please give it up for Ed Rendell.  (Applause.)  We’ve got an outstanding -- an outstanding congressional delegation that’s here:  Congresswoman Allyson Schwartz is here.  (Applause.)  Congressman Chris Carney is here.  (Applause.)  And Congressman Paul Kanjorski is here.  (Applause.)

We also have Keith McCall, speaker of the Pennsylvania State House.  (Applause.)  We’ve got Ed Pawlowski, mayor of Allentown -- (applause) -- maybe the next member of Congress.  We’ve got John Callahan, mayor of Bethlehem.  (Applause.)  I just want to clarify here -- Ed is not running, John is running.  I got those reversed.  So don’t vote for Ed because he’s -- (laughter) -- I mean, vote for him for mayor.  (Laughter.)  John is going to be outstanding.  And Don Cunningham, Lehigh County Executive.  (Applause.)

So it’s been about a year and a half since I last visited Allentown and Bethlehem and I was running for office.  And while it was a pleasure to be here as a candidate, it’s an honor to be here as your President.  It really is.  (Applause.)

Pennsylvania helped put me into office.  (Applause.)  Thank you.  But even on the most trying days, I want you to know that I’m grateful for the opportunity to serve you in these challenging times for America.  And I’m grateful for this chance to get out of Washington -- (laughter) -- and spend the day in the Lehigh Valley, talking with people about this very tough economy.

I just came from Allentown Metal Works, where I had a chance to visit with workers there.  And they were working hard -- not just to forge the heavy machinery that makes this country run.  In fact, one of their projects is actually related to the rebuilding of the World Trade Center and the Twin Towers down there.  So you could just tell the extraordinary pride that the workers take in this project.

But like so many others across America, these workers have also been doing the best they can to stay afloat in a brutal recession that has hit folks like them hardest of all.

In the two years since this recession began, too many members of our American family have felt the gut punch of a pink slip.  Eight million Americans have lost their jobs.  Every one of us knows somebody who has been swept up by this storm:  neighbors who have lost their homes or their health care; friends who have used up their savings or put off their retirement; relatives who have downscaled their dreams -- or dropped them entirely; young people who aren’t sure whether they can afford their college educations.

I’ve heard these stories from every corner of America, and I see them in the letters that I read every single night. 

So as we come to the end of this very tough year, I want to do something I haven’t had a chance to do that often during my first year in office, and that is to share some modestly encouraging news on our economy.

Today, the Labor Department released its monthly employment survey and reported that the nation lost 11,000 jobs in November -- which was about 115,000 fewer than was forecast -- and is about close to zero, from the perspective of our overall economy.  (Applause.)  The unemployment rate ticked down, instead of up.  (Applause.) The report also found that we lost about 160,000 fewer jobs over the last two months than we had previously thought.  So overall this is the best jobs report that we’ve seen since 2007.  (Applause.)

And this is good news, just in time for the season of hope.  I’ve got to admit, my chief economist, Christy Romer, she got about four hugs when she handed us the report.  But I do want to keep this in perspective.  We’ve still got a long way to go.  I consider one job lost one job too many.  (Applause.)  And as I said yesterday at a jobs conference in Washington, good trends don’t pay the rent.  We’ve got to actually grow jobs and get America back to work as quickly as we can.

Now, the journey from here will not be without setbacks or struggles.  There may be gyrations in the months ahead, there are going to be some months where the reports are a little better, some months where the reports are worse, but the trendline right now is good.  The direction is clear.  When you think about how this year began, even before I was sworn in, and we were losing 700,000 jobs a month -- a month -- today’s report is a welcome sign that there are better days ahead.  In fact, we were losing more than 700,000 jobs a month, and that’s roughly -- that’s roughly half the size of Philadelphia -- each month.  Our financial system was on the verge of collapse.  Economists were warning of a second Great Depression.  You remember.

So from the moment I was sworn into office, I began taking a number of difficult steps to end this economic crisis.  And by the way, can I just say I didn’t take these steps because they were popular or because they were particularly gratifying to me -- they weren’t.  You can be sure that when I was running for this office, things like saving the banks and rescuing auto companies were not on my to-do list.  They weren’t even on my want-to-do list.  (Laughter.)  But I did them because they were necessary to save our country from even greater catastrophe.

We also took steps to unlock our frozen credit markets so average Americans could get the loans that they needed to buy a home or a car; to go to college or start a small business.  We enacted measures to stem the crisis in our housing markets, helping responsible homeowners stay in their homes, curbing the decline in home values overall.  And we’ve seen some stabilization in the housing market.  We cut taxes -- think about this, because you wouldn’t know it from watching the news -- the only tax policy we instituted during the course of this year was to cut taxes for 95 percent of hardworking families -- just as I promised I would when I ran for President.  (Applause.)

And we passed the Recovery Act, which created or saved up to 1.6 million jobs, stopped our freefall, lifted our economy to the point where it’s growing for the first time in more than a year.  And I was just talking to the governor before we walked in and he’s got a whole series of charts about how much more steel is produced in Pennsylvania because of the Recovery Act; how much more infrastructure spending is taking place out here; putting people to work doing the work that America needs done.

So today’s report is another hopeful sign that these steps that we took, difficult steps, have helped turn the tide.  But we’ve got a lot more work to do before we can celebrate, because even though our economy is now growing again, a lot of companies are still hesitant to hire; they’re still worried about hiring.

Now some of this is because they’re still trying to get out of the red brought on by tough times this year and they’re still seeing consumers pull back because people got overextended on their credit cards; those home equity loans suddenly didn’t look so attractive.  And so people are spending a little bit less.

But part of what’s happened also among a lot of companies is they figured out how to squeeze more productivity out of the workers that they’ve got; they’re working people longer hours, they’re doing more overtime, or not, but either way they’re producing the same amount of product or providing the same services without hiring more people.

And that’s something that we’re going to have to really work on.  Now, it’s typical that it takes time for job growth to catch up with economic growth.  And it’s typical that it takes a little more time to come out of a recession when it comes to hiring.  But Americans who’ve been desperately looking for work for months -- some of them maybe for a year or longer -- they can’t wait.  And we won’t wait.  We need to do everything we can, right now, to get our businesses hiring again so that our friends and our neighbors can go back to work.  (Applause.)

So yesterday, at the White House, we had a forum on jobs and growth, with leaders from every sector of our economy and every political and economic viewpoint -- from the CEO of Google to small business owners who know our economy as well as anybody.  And I wanted to ask them what they needed to start hiring again.  And we had a frank discussion about a variety of ideas that helped refine our thinking.

We talked about investments in clean energy, to not only create jobs but to make America a global leader in renewable energy technology.  (Applause.)  We talked about incentives for homeowners, for the materials and labor they need to make their homes more energy efficient.  And a smart electricity grid that saves you money and moves our economy forward.

We talked about additional ways to lift small businesses, which are both a great generator of jobs and the truest reflection of our values.  We talked about additional investments in America’s roads and bridges and railways and ports.  Nobody has been a bigger champion of this than Governor Rendell, rebuilding the critical infrastructure of our economy.

So on Tuesday, I’m going to speak in greater detail about the ideas I’ll be sending to Congress to help jumpstart private sector hiring and get Americans back to work.

But here’s the thing, Allentown.  We’ve got to do more than manage our way through this crisis, because long before the recession hit, many of our communities, including communities right here in Pennsylvania, were struggling even when the economy was doing relatively well.  Plants were closing.  Jobs were leaving, especially in manufacturing.  For too many families and communities, the recession wasn’t a new challenge; it’s a permanent one.  It’s been going on for a decade or more.

So in addition to dealing with the immediate crisis that we face today, we’ve got to face up to the challenges necessary to strengthen our economy for the long term.

That’s why I’ve taken on our broken health insurance system, so that families and businesses won’t have to cope with double-digit premium increases year-after-year.  (Applause.)

That’s why my Secretary of Education, Arne Duncan, is taking on our education system -- (applause) -- so that our kids can compete in the 21st century economy.  And that’s why we are working to upgrade America’s most under-appreciated asset -- community colleges just like this one.  (Applause.)

That’s why we’re doing everything we can to spur new industries, like clean energy, to create good, new jobs that won’t be sent offshore.

And that’s why, when the current emergency passes, I’m committed to bringing down the deficits that loom as a threat to our future economic growth.

Now, here’s why we have to do all this:  because for decades, Washington avoided doing what was right in favor of doing what was easy.  And the middle class took a beating for it.  It got papered over because there was a lot of cheap credit out there so people were just able to keep up by getting more credit cards and taking out more home equity loans, but the long-term trends were not good.  That’s what was happening decade after decade.  Well, I did not run for President to sweep our messes under the rug with the next election in mind.  (Applause.)  I ran for President to solve our problems -- once and for all -- with the next generation in mind.  That’s what we’re doing right now.  (Applause.) 

So here’s the bottom line.  I know times are tough.  Michelle and I were talking the other day -- there are members of our families that are out of work.  We’re not that far removed from struggling to pay the bills.  Five, six years ago, we were still paying off student loans.  Still trying to figure out if we pay this bill this month, what do we have to give up next month.  We’re not that far away from there.  But I promise you this:  I won’t rest until things get better.

I know you may not agree with every decision I make, but I promise I will always tell you the truth about why I’m making these decisions.  (Applause.)  And I know that we can come together to forge a brighter future so that places like Allentown and Bethlehem and the Lehigh Valley don’t just survive, but they thrive.  (Applause.)  That’s why we’re here.  That’s what we’re fighting for.  And as long as I’ve got the privilege of being your President, I will always be there right there with you in the thick of that fight.

So thank you so much, everybody.  (Applause.)  I appreciate you.  Thank you.  Thank you very much.  Thank you.

Listen, I’ve got time, I think, for three questions.  Whoa, whoa, whoa, whoa, whoa.  All right, I’ll make you first just because everybody is very excited about this young man asking.  And you can sit down.  It will be three questions.  Go ahead.  What’s your -- hold on a second, we got microphones in there, so there you go, go ahead.

Q    Mr. Obama, I really appreciate how you’re trying to stimulate the economy to help this country out.  And I was just wondering in LCCC in college we’ve been studying some criminology and I was wondering if -- maybe if you checked out some of the statistics about legalizing prostitution, gambling, drugs, and nonviolent crime in order to stimulate some of the economy?  (Laughter.)

THE PRESIDENT:  You know, I have to say this -- I appreciate the boldness of your question.  (Laughter.)  That will not be my jobs strategy.  (Laughter.)  But let me say this.  What year are you in school?

Q    This is my second year in college.

THE PRESIDENT:  Your second year.  I think, first of all, part of what you’re supposed to do in college is question conventional wisdom.  (Laughter.)  And so you’re doing exactly what you’re supposed to be doing -- (laughter) -- which is thinking in new ways about things.

Here’s -- the truth is that when you look at our economy, in the same way that we used to be an agricultural country and then we moved to an industrial age, and then we went from an industrial economy into an information economy, you know, that transition means that manufacturing will never be as high of a percentage of our economy as it was back in the 1950s.  It’s not just because we’re competing overseas; it’s also that a factory that used to require a hundred guys to make something, now they can do it with 10 guys, because of automation and advances in technology.

So there’s going to be a shift in our economy.  But the capacity for a state like Pennsylvania to make enormous progress on advanced manufacturing around infrastructure on the one hand and green technology on the other are still enormous.

I mean, think about it.  We’ve got about $2 trillion -- $2 trillion worth of -- it might even be more than that, Ed; Ed probably knows the statistics -- we’ve got trillions of dollars of infrastructure improvements that need to be made all across the country:  roads, bridges, ports.  And that’s just the old infrastructure.  Then we’ve got a whole new infrastructure that we have to build.

So when we talk about, for example, the smart grid, this is not a complicated concept.  We’ve got basically an old electricity network that leaks electricity, it leaks energy, all the time.  It’s not efficient in the ways that it should be.  And if we could create a much more efficient 21st-century grid, we could save huge amounts of energy -- 10, 15, 20 percent -- just in making -- just becoming more efficient, and that would create a whole bunch of jobs for people who would have to lay down lines, put up new transmitters, all that good stuff.

The same is true when it comes to clean energy.  There is no reason why we shouldn’t have the corner on wind turbine technology, on solar panel technology.  (Applause.) In fact, some companies that are doing battery and wind and solar technology benefited from the Recovery Act, and they are now hiring people right here in Pennsylvania to do that work.

But in order for us to take advantage of this new future, we’ve got to make some investments now.  We’ve got to have an infrastructure plan, and something that I’ve been working with the governor on is the idea of an infrastructure bank so that instead of us just every six years having Congress vote to figure out what our infrastructure is -- and there’s no real planning to it -- that you had a system where we could actually leverage private sector dollars into making investments alongside the public sector, and it wasn’t based on who’s got the committee chairmanship but it was based on what are the infrastructure needs that we really have in this country and prioritize them.

When it comes to energy, this is a triple-win situation.  If we invest now in clean energy and we acknowledge that we’ve got to change how we do business -- for our economy, for oil independence, but also for climate change -- then we can clean up our environment, we can free ourselves from dependence on foreign oil so we’re not waiting to see what somebody in the Middle East is doing before we know what’s going to happen to gas prices here in the United States.  And we can put people to work right now.  And those jobs can’t be shipped out.  Those are jobs that have to be done right here in the United States of America.  (Applause.)

So that’s the strategy that we’re pursuing.  There’s one last component -- two other components I just want to mention.  People -- first of all, I think -- I noticed the press yesterday, because we had this jobs forum at the White House, they said, "Obama is finally pivoting to jobs," as if what we haven’t been doing for the whole nine months, from the day I was sworn in and we started talking about the recovery, was all about jobs.  But folks’ attention spans are short, I understand that.  (Laughter.)

What has happened is a lot of the debate in Washington has been around health care, so people think, well, I guess they must not be working on jobs.  No, we’ve been working on jobs the whole time.  Health care is part and parcel with where we need to take our economy.  (Applause.)  You talk to every small business -- how many small business owners are here?  There may be a few.  Okay, you talk to any of the folks who raise their hands and you ask them, what happened to your premiums over the last year, two years, three years, they’re not just going up 7 percent or 8 percent -- they’re going up 25 percent, 40 percent.

Now, if you’re a small business person, and let’s say you’ve got five employees, and you are doing the right thing by them, and you’re giving them health insurance, and then you find out that what you’re paying suddenly doubled over the course of two or three or four years?  That’s money that is directly out of your pocket that you could have been reinvesting in your business or hiring more workers.

So us being able to control health care costs and giving small businesses the opportunity to pool with other small businesses and individuals around the country so that they have the same kind of leverage with insurance companies that the big guys have, that’s an economic plan.  That’s part of our jobs growth.

Last point I want to make -- last point I want to make, and that has to do with education.  You know, I was in Asia for a week and we were mostly talking about trade and how we can increase U.S. exports.  I’m tired of just them sending goods into the United States -- I want to start sending goods from the United States out there.  (Applause.)

And I think there are a lot of opportunities for us to increase exports and increase jobs here in the United States without us spending any money.  If we increased U.S. exports, our share of exports to Asia by just 5 percent, we would be creating hundreds of thousands, maybe a million, 2 million jobs -- just by opening up new markets.

But -- I mentioned this yesterday at the jobs summit and I want to mention it again today -- I was having lunch with the President of South Korea.  And that country has gone from dirt poverty and now is just booming.  I mean, they are doing really well.  And I asked him, you know, what’s your biggest challenge in terms of education?  He said, you know, my biggest challenge is the parents are just too demanding.  (Laughter.)  He said, they’re in my office -- I’ve had to import foreign teachers, pay for foreign teachers to come teach English to Korean kids because all the parents there think that their kids should be learning English when they’re in first grade.

Now, I tell that story to make the point that these folks are serious.  They’re not -- you know, their kids aren’t spending a whole bunch of time playing video games or watching TV.  (Applause.)  They’re out there -- they’re working.  They’re working in math, they’re working in science, they’re working in foreign languages.  They are preparing themselves to compete.

And so, you know, one of the messages I have is that we are going to have to work just as hard.  We can’t take for granted that somehow it’s just owed to us that automatically we’ve got the strongest economy.  We’ve got to make sure that each and every one of us are working as hard as we can and working smart in order to create the jobs of the future.

All right.  (Applause.)  Okay, I’ve got time for two more questions.  I think it’s got to be a lady’s turn.  Right there -- yes.  How are you?  Hold on -- get the mic so we can hear you.  Hold on one second -- get the mic so we can hear you.

Q    I’m Susan Kennedy with the Manufacturers Resource Center in Bethlehem, Pennsylvania.  We’re one of the NIST MEP centers across the country and I’ve been working with Joelle from your office.

THE PRESIDENT:  Great.

Q    I have nine manufacturers here with me.  One was located right next to your metal works that you visited this morning.

THE PRESIDENT:  Terrific.

Q    And they all want to know what you will do to loosen up the money for the small businesses and how they can compete more with the things they need to grow their businesses.

THE PRESIDENT:  Now, you’re referring specifically to credit and getting loans from --

Q    Credit -- yes.

THE PRESIDENT:  Is that the main priority that you’re concerned about?

Q    Credit and -- now I have nine people here.  Anything else you want to add?  (Laughter.)

THE PRESIDENT:  Oh, so she just kind of -- (laughter.)  You know, this is like where they send the attractive person to hitchhike, right?  (Laughter.)  Then the car stops and suddenly all the other guys come out of the woodwork.  (Laughter.)

Q    She did hand me the microphone, so I’m going to take this opportunity and first thank you for coming to the Lehigh Valley and listening to us here.  (Applause.)

Now, President Obama, I do represent one of the 10 CEOs of manufacturing companies here.  I’m a third-generation, 59-year family business.  And by the way, I was in Asia when you were, for other reasons, but that’s a good segue into what I’d like to discuss, and that is, I wasn’t going to Asia because I wanted to be there.  I was going to Asia because I had to be there.

You know, manufacturing in this country is changing.  Companies need to move and change with it.  Susan’s point about the credit markets is really important.  The bottom line is that when our companies have an opportunity -- you know, years ago we would take a risk, we would go out, we’d buy the capital equipment, we’d add on to our buildings, we’d hire the necessary people to meet that demand.  Today, our concern is, are the banks going to be there with us?  And we don’t feel they are.

What’s going to change here in the near future to help your plan and get these people to work?  Because we’re willing -- you know, those businesses are still here, those families still talk about it.  We need the support.

THE PRESIDENT:  Good.  Well, let me talk about the whole financial sector, because it really relates to what’s happening in terms of jobs.  When we came in, and even before we came in, everybody remembers the Lehman’s crash and what happened right before the holiday season last year.  The banks, the hedge funds, the whole financial system, had leveraged itself so much -- and leveraged means that they took one dollar and the turned it into $30, or at least they pretended that it was $30 or $40, and they were just -- or $60 -- they were just going out and lending like crazy, even though they knew that a lot of these loans really made no sense whatsoever.

So they were lending -- part of what drove the housing boom was it used to be you had to save 20 percent to get money down to get your mortgage.  Now suddenly people were putting no money down.  It used to be that you’d get a fixed mortgage of 30 years, and you’d have a steady payment.  Now suddenly you only had to pay interest.  You didn’t have to pay principal.

So that was just in the housing sector, but there were a whole bunch of other sectors of the economy where the same thing was happening.

Now, not only were they giving loans to folks that probably in previous eras wouldn’t have qualified for loans, but what was also happening was they were then taking those loans and then selling them, they were packaging them, chopping them up as securities, and those securities then would sell for what they weren’t worth; they were being certified as Grade A investments when they really weren’t.  So there was just a lot of funny business going on, on Wall Street, and everybody was participating up and down the line because they were all making a lot of money.  And frankly Washington wasn’t doing a very good job regulator.

Now, we saw the consequence of this once everybody realized that a lot of this stuff was bogus; that there was no value beneath a lot of these bank loans.  Suddenly everybody started running for the doors.  And you could have had a complete collapse of the financial markets.

We stepped in to make sure that you did not have the kind of meltdown that could have definitely gotten us into a Great Depression.  And we did so successfully, and by the way, the interventions we’ve made have turned out to be actually cheaper than we had predicted, and more effective than we had predicted.

I mean, here’s a little bit of interesting news.  You know, everybody thinks that this bank bailout was about $700 billion.  The truth of the matter is, is that most of the money going to the banks will probably end up being paid back with interest, and we’ve already made about -- well, several tens of billions of dollars that go right into -- to pay off deficits because of some of these investments.  So we’ve been successful in stabilizing the financial markets.

Here’s the problem, though -- I just wanted to give you that background -- here’s the problem.  Having been way too easy in terms of giving credit, now banks have swung in the opposite direction and they’re not giving any credit to some very credit-worthy businesses.  They used to say yes to everything; now they’re just saying no to everything.

And part of what our message to the banks is, the taxpayers were there for you to clean up your mistakes.  (Applause.)  You now have a responsibility to be there for the community now that we’re bearing the brunt of a lot of these problems that you caused.  (Applause.)

In fairness to some of the banks, what they’ll tell you is, well, the regulators are telling us we’ve got to build up our capital reserves; we still have some bad loans on our books; there’s still a commercial real estate problem that’s out there that we’ve got to be on the lookout for -- that’s why we’re not as aggressive lending as we used to be.

So what we’re hoping to do is to work with them and push as hard as we can to say, look, try to get the right balance here.  Don’t swing from one end to the other.  If there’s a manufacturer in Pennsylvania, if there’s a business in Ohio that is making profits, that has a good idea, that has a customer base -- give them a loan, on fair terms.  And what we’re also saying is, is that the government is willing to step into the breach in some circumstances to help.

So, for example, we’ve increased our small business lending by about 73 percent through the SBA.  That doesn’t help everybody that needs help, but it’s helping to fill some of the gaps.  But I promise you -- in fact, I hope to be meeting with the bankers again; I’ve already met with them a couple of times -- sometime before the end of the year to say to them, look, you have a responsibility now, now that we have pulled you back from the brink, to help make sure that Main Street is actually getting the kinds of loans that it needs.  And I am optimistic that we can start next year seeing credit flowing a little more effectively than it has been so far.  All right?  (Applause.)

Okay, last question.  Last question.  I’m going to go to that guy right there.  That guy right there in the blue shirt.  There you go.  No, no, this one -- this one right here.  Too many blue shirts here.  (Laughter.)  Right here.  I was -- I didn’t see you back there, so I was calling on him.

Q    Hi, Mr. President.  The gentleman over there, he asked a funny question, so I don’t really have anything.  I wanted to know if my wife had a question --

THE PRESIDENT:  Oh, see there.

Q    If not, I’d like to pass it off to this nice woman next to me who really has something to say.

THE PRESIDENT:  Oh, look at that.  All right, go ahead, go ahead.  Go ahead.

Q    Mr. President, thank you for coming to Lehigh Valley, and I appreciate you taking up the health care reform.  I think it’s a very important issue.  My question is actually related to what you just ended on, your point, and that is about the investments going on [on] Wall Street.  Are you confident that there have been enough safeguards put in place so that we don’t run over that cliff again with these irresponsible risky investments?

THE PRESIDENT:  No.  I made -- here’s what happens. Let me say this.  Congress works incredibly hard, and you guys have a great congressional delegation.  But I think they’ll testify to the fact that Congress moves, let’s say, deliberately.  (Laughter.)  It takes time to get things done in Congress, and it’s -- the Senate in particular, just because of the way the rules are constructed.  These days you need 60 votes for everything because of the filibuster, which it used to be was applied rarely, but now the opposition just evokes it for everything.  I mean, you can be -- try to pass a bill to rename a post office, and they’ll say, no, we need 60 votes for that and we need two weeks of debate.

So the reason I point all this out is, is that financial regulatory reform was one of our top priorities at the beginning of the year.  We have now gone through a whole series of committees in the House, and the House has passed out its version.  But now the Senate has to pass its version.  So it’s just like the health care bill.  It’s the same kind of thing.

I know sometimes the public thinks, what are these folks doing?  Well, part of it is, is that you’ve got three or four or five different committees, all who think that they’re in charge of their thing.  So they all have hearings, and everybody has to talk, and everybody has got to have their amendments.  Then the bill in one House gets merged, and the bill in the other House gets merged.  You know, sometimes it gives you a headache just thinking about it, but, look, that’s democracy.  That’s part of what makes our government stable is, is it’s not easy to get anything done.  But it’s also what makes it frustrating when we have emergency situations.

Now, we have put forward a very specific set of financial reforms that involve making sure that if you’re got these really big companies -- the JPMorgans or the Goldman Sachses or these companies that have been called "too big to fail" -- well, you know what, if you’re that big, then you better have a whole bunch of safeguards so that we don’t have to bail you out if you make bad mistakes.  (Applause.)

And so that’s one part of the reform.  Another part of the reform is a consumer watchdog that actually has some teeth -- because everybody here has a story to tell about a credit card company that suddenly jacks up your rates or a loan that had a fine print that you didn’t understand and there’s a balloon payment someplace.  We want to make sure that that regulatory framework is much more effective.  We want to set in place mechanisms so that if there is a big bank that is getting into trouble, or for that matter an insurance company like AIG that’s getting into trouble, that there’s a way of essentially quarantining them so that they don’t infect the rest of the financial system.

So there are a series of different provisions.  And if we get this package passed then we will have the safeguard in place to make sure this stuff doesn’t happen again.

But I want to tell all of you and anybody who’s watching or listening, not surprisingly a lot of the banks and the financial institutions are fighting this, because they want to basically just go back to business as usual.  They want to do the same things that they were doing.  And you’re already starting to see some of these bonus payments coming out.  It’s like suddenly they’ve forgotten that we had to yank them out of the fire.

And so it is very important that we get financial regulatory reform done.  We’re hoping that we can get it done early at the beginning of next year, but the banks are going to be pushing back.  You’re going to start seeing ads.  In fact, I think they already started putting out the ad saying, well, you know, florists and bakeries are suddenly going to be subject to financial regulation.  Well, that’s not true.  That’s just not true.  But it’s the same thing we’re dealing with, with health care.  The insurance and the drug companies start running millions of dollars’ worth of ads saying somehow that this is a government takeover of health care when all we’re trying to do is make sure that if you’re buying health insurance on the private marketplace that you’re not getting gouged and gypped by the insurance companies.  (Applause.)

So -- all right?  Okay, I’m going to -- I’m going to take one more question from that gentleman back there, because what happened was is that he thought he had been called on and he felt bad, and it turned out this guy didn’t really have a question.  (Laughter.)  So, go ahead.

Q    Good afternoon, sir.  My name is Leonard Martin, and I’m currently a student here at LCCC.  I’m also from the Army.  (Applause.)

THE PRESIDENT:  From the Army?  Where --

Q    I’m also discharged from the Army, sir. 

THE PRESIDENT:  Appreciate your service.

Q    Yes, sir, three years.  (Applause.)  My question, sir, deals with the Veterans Administration.  For example, this week I’ve called them several times asking questions about the GI Bill.  I’m eligible for the post-9/11 GI Bill, but I haven’t gotten any benefits from them yet.  And when I call them, they are often busy, and we get a message saying that we have to call back later on.  Sir, could you call them up and ask them -- (laughter) -- and get more people to work with them so -- (applause.)

THE PRESIDENT:  All right.  Well, first of all, I will -- we will get your name -- (laughter) -- you went straight to the top here, so -- (laughter and applause) -- I suspect -- I suspect somebody will be calling you on your cell phone in about two seconds.  (Laughter.)

But more importantly, one of my commitments as President was, we are going to whip the VA into shape because when our men and women are serving on behalf of all of us, we’ve got a solemn obligation to look after them when they come home.  (Applause.)  And this 9/11 -- post-9/11 GI Bill I think is a great example of it.  My grandfather fought in World War II and then he got his college education on the GI Bill.  It wasn’t just good for him.  Because of that whole greatest generation going to college, that built our middle class.  And all the things that we’ve been talking about in terms of science and technology and innovation and clean energy, all that depends on what happens in a place like Lehigh -- making sure that people are being trained and constantly upgrading their skills for the future. 

So that’s what the GI Bill is supposed to do.  Now, the VA, we’ve actually increased the budget for the VA by 11 percent last year, which was the largest increase in 30 years, and we’ll be increasing it again this year, because we think it’s important to play some catch-up.  Rick Shinseki, who is a great American hero and now the Secretary of the VA, one of his tasks is to upgrade a bunch of the old systems in the VA.  The truth of the matter is you shouldn’t have to make a phone call.  You should be able to get online.  That would be more efficient.  (Applause.)  And what that tells me is -- I mean, the fact that you’re having to make the call tells me that we have not fully upgraded our information systems yet the way they need to be upgraded. 

But he is really working diligently.  We had a lot of work to do on this front.  The VA had been somewhat underfunded for a number of years despite the growing amount of demand caused by returning Iraq and Afghanistan veterans.  We are, I think, are going to get it in a good place by the time I’m through in Washington.  But in the meantime, you’ll, I promise, get a return phone call.

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

END
12:39 P.M. EST

Remarks by the President and Q&A at the Closing Session of the Forum on Jobs and Economic Growth

Dwight D. Eisenhower Executive Office Building, Washington, D.C.

3:57 P.M. EST

THE PRESIDENT:  Thank you, everybody.  Thank you.  Please be seated.  We want to make sure we get in as much discussion as possible in the remaining time that we have.

I hope everybody enjoyed the breakout sessions.  I had the opportunity to attend two of them for quite some time and enjoyed some terrific conversation and some great ideas.

I heard a great deal of challenges this afternoon about -- or a great deal this afternoon about the challenges that we're all facing, for businesses large and small, when it comes to trying to create jobs.  There's no question that it is difficult out there right now.  But we also heard some exciting ideas and proposals for how we can spur hiring today and lay the groundwork for sustainable economic growth in the future.  In other words, ideas that help us in the short term but also point us in the direction of rebuilding the country.

I attended two of the sessions -- one on infrastructure, where there was broad agreement that the infrastructure in America is not where it needs to be and we've got enormous investments to make.  We got some good, hardheaded feedback from people like Doug Holtz-Eakin and others about how we have to do this more effectively -- how can we measure the costs and benefits of infrastructure investment; how can we make sure that shovel ready actually means shovel ready; how can there be more effective coordination between federal, state, and local governments in order to maximize the benefits of our infrastructure spending.  And there was considerable amount of discussion about how we can leverage the private sector to boost our infrastructure spending.

We also heard, in the clean energy session that I just left, some terrific ideas about how weatherization and energy efficiency promises immediate impacts on the ground, we can create new jobs, spur enormous amounts of business opportunities for the clean tech sector, but we're also laying the groundwork for energy independence, and we would also, as a consequence of having made those investments, set up the prospect that it would pay for itself from ultimate energy savings.

Now, I will tell you that in the green energy discussion, the clean energy discussion, there was also an acknowledgment that we're not going to be able to maximize the benefits of clean energy investment unless we get settled how we're dealing with carbon and the price of carbon.  And we don't want to turn this into a discussion about Congress and legislation, but I think there was some consensus around the table that if we can focus on the enormous business opportunities there, that in fact America will benefit and will be able to compete in the next great round of economic growth around the world.

I was not in some of the other meetings, but I've gotten a quick summary.  My understanding that in the business investment and tax session, there were some important ideas put forward about how we can provide additional tax incentives for job growth.  For example, Bill McComb, CEO of Liz Claiborne, explained the impact of the expanded business tax breaks that I signed into law a few weeks ago.  Before the provisions went into effect, he was planning to close 10 stores.  Now he's going to save those 10 and open an additional 25.  So that's a good news story, but it's also indicative of how our tax policies can make a difference.

Several participants, including Larry Mishel and Alan Blinder, proposed offering additional tax incentives for job creation.  And this concept was raised in a number of the other sessions as well, so it's an idea that we think is worthy of further consideration.

In the small business discussion, Joe Stiglitz I think presented an economic case for how credit markets can fail and deny even good borrowers credit, and put forward some specific ideas about how we can get credit moving again.  All the reports that we're getting is that if you are a big corporation right now, the credit markets are working for you.  If you are a small business, and in some cases a medium-sized business, even if you are profitable, that you're still seeing credit frozen.  And we are going to have to unlock that, and that's going to require an interface between what we're doing on the recovery side and what we're doing on financial regulation and our banking policies.

Angie Selden, who runs a company called Arise Virtual Solutions, explained -- where are you, Angie?  There you are.  She explained how she's creating thousands of call-in sales jobs, bringing jobs back to the United States that have gone overseas in the last several years.  And she had some very specific ideas about how we could foster more of this reverse job migration, which we're going to take a look at.

Which brings us to the exports session.  One of the things that obviously in a time of fiscal constraint that we're constantly looking for is how we can spur job growth here in the United States without spending a whole lot of government money.  We're going to need to put public dollars in, but where can we find leverage?

I think everybody agrees that expanding our exports has to be a priority.  And this was the major topic when I traveled to Asia several weeks ago.  During the session, as I understand it, we heard from Jim Hoffa about the importance of trade strategies that open markets.  We heard from Boeing CEO Jim McNerney about the 22,000 small business suppliers that he relies on to make products -- and underscoring the fact that if these suppliers, these smaller suppliers aren't getting credit it's very hard for him to build products for export.

Bob Iger, from Disney, and other business leaders talked about how we can make our businesses more competitive and some specific ideas were protecting intellectual property and tax policies to promote innovation here at home.

Finally we heard from a broad cross-section of thinkers about the urgent need for more effective worker training.  And Randall Stephenson from AT&T talked about a successful partnership with San Antonio community colleges to train workers for jobs that the company is committed to bringing back from India.  And I think we all agreed that we should look to build on these kinds of partnerships to leverage the community college system.  We heard from -- in our infrastructure session we heard that same refrain about the need to train workers effectively.

Randy Weingarten of the AFT suggested a specific idea:  community schools, especially in rural areas, where parents can get training after hours in the same place where their kids are learning during the day, and I think that's a terrific idea worth exploring.

Let me just close by saying this.  What was striking is the overlap that existed in a lot of these sessions.  When we were in the clean energy session, there was an emphasis on how do we get small businesses and small contractors to get certified and get the financing needed to move forward and take advantage of these clean energy sector opportunities.

When we were in the infrastructure section, there was a strong emphasis on needing to plan not just for existing road projects, but also how do we think about the fact that in the future we need a cleaner transportation industry.  So there's a lot of overlap between all these different breakout sessions that we engaged in.  And it underscores how despite the fact that we had some breakout sessions, we're going to have to figure out how to break out of these silos and integrate these strategies if we're going to be able to get the most bang for the buck.

So, overall, we generated a lot of important ideas.  Some of them I think we can translate immediately into administration plans and potentially legislation.  What I want to do, though, is for the remaining part of this jobs forum, just to call on all of you and to see what kinds of ideas maybe I have not highlighted, things that really stood in the sessions.  Or if you didn't have an opportunity to speak, but you've got this burning idea that is really going to set the world on fire, I want to make sure that you've got the opportunity to -- (laughter) -- that you've got the opportunity to lay it out right now.

So, yes, and please do me a favor and introduce yourself.  Some of you -- a lot of you I know, but not everybody in the room knows you.

Q    My name is David Barber, from Barber Foods in Portland, Maine.  One of the things that we spent a lot of time on was the regulation, from our standpoint, and to your point about not creating regulations and realize the unintended consequences of those.  So that's very important to us as a small manufacturer of food in Portland, Maine.

One of the things that I wanted to make sure -- that we didn't get out in my session -- was we employ 750 people.  We're self-insured.  We spend $4 million every year in health care, self-insured.  And we develop programs to have our associates be healthier.  We've avoided an extra cost this year of 10 percent in our rise; normally, it's 20 percent.  We kept that down to below 10 percent by creating programs to keep our associates more healthy.  And we are sharing those with anybody that will listen.  So we want to make sure that gets out.

THE PRESIDENT:  Well, this is not a plant -- (laughter) -- but let me just point out, obviously the inefficiencies of our current health system are a drag on the economy and a drag on job growth.  And if you -- as a small business or a large business -- are seeing premiums for your employees going up 15, 20 percent a year -- I've had letters from small businesses who said that their policy was jacking up their costs by as much as 48 percent.  In those kinds of situations, you're not going to be able to invest in hiring that new worker, because you're trying to keep the worker you've got and provide them coverage.

So it is very important, I think, for us to take steps both legislatively but also in the private sector to improve prevention, improve wellness, bend the cost curve.  I actually think that the legislation that we are working -- that as we speak I hope members of Congress are working on right now, will have that salutary impact.

But you're absolutely right that companies like yours, companies like Safeway, have done some very important, creative work on your own.  And the question is, are there ways that we can further incentivize those practices and spread the word to companies all across the economy, that you can save money that in turn can be used to reinvest in your businesses.

Yes, sir.

Q    I don't bring an idea, but in reference to silos, is there going to be a document that boils down to different groups so that the people in my group understood what happened in the next group because they might use ideas from the next group.

THE PRESIDENT:  Yes.  We had extensive note-taking in every one of the sessions and that will be distributed to all of you.  And I want to assure you that this is just the start of this interaction that we're having with you, so you will then have the opportunity to continue to refine a lot of these ideas.  We'll probably set up some working groups coming out of this.  And the input that we're soliciting from you is going to be continuous.

All right.  Frank.

Q    Mr. President, I just --

THE PRESIDENT:  Introduce yourself.

Q    Frank Cownie, the mayor of Des Moines, Iowa.  I would emphasize that we feel that it's important that we get targeted fiscal assistance to local government, whether it's through infrastructure projects that we talked about in our group or whether it's energy efficiency block grants or whether it's TIGER grants or whether it's CDBG -- those are all formulas that work and have worked in the past.  And I think to get money to where people live, where people work, where the GDP is produced in this country, that we have to target those kinds of opportunities.

THE PRESIDENT:  Okay.  Let me just pick up on this point, and this may have been discussed in some of the groups but it might not have.  As tough as this financial crisis and recession has been on the federal budget, it has in some cases been worse on state and local government budgets.  About a third of the Recovery Act were essentially stabilization funds either for individuals in the form of unemployment insurance or assistance to states so that they didn't have to lay off teachers and firefighters and police officers.  We don't get a lot of credit for that.  I would point out that some mayors and governors who were very critical of the Recovery Act nevertheless were very happy to get this money.

But I think that it does raise the point that what we've been able to do this year is to stabilize aggregate demand.  And that's been very important to preventing a much more difficult economic environment and a tougher job environment.  Next year we're going to still have some of those challenges because usually state and local government revenues lag the recovery as a whole.  They may need some more help from the federal government.  And I think it's important, particularly for business leaders here, to understand that fact, that if you see a complete collapse in state and local government spending on basic needs, that that could create a very bad business climate for all of you.  And that's something that we're going to have to consider working on very carefully.

All right, the gentleman right there.

Q    Thank you, Mr. President.  My name is Noel Cuellar from Michigan -- tough out there.  One of the things that we're looking at is -- medium-size small businesses -- is the ability for financing.  You know, every month is looking better, it looks like we're bouncing back.  But the ability to get the financing for the upswing -- to buy the raw materials -- so we're kind of struggling buying raw materials or hiring people.  It's a tough decision.

THE PRESIDENT:  Well, look, as I said earlier, the credit markets were completely frozen for everybody.  Because of extraordinary intervention on our part, the financial panic abated and some of the credit markets out there thawed.  So for a Fortune 100 company right now you can probably get credit.  If you are a small business out there right now, though, it is still very tough.

Now, we have increased SBA loans by about 73 percent.  And we are constantly looking for more ways that we can push the banks and the credit markets to get money into the hands of small and medium-sized businesses who create the majority of jobs.

One of the things that -- I'm not sure if Secretary Geithner is here, but -- there he is, he's in the back.  One of the things that I think Tim will testify is that basically at least every other day I ask him, what are we doing to help credit flow to small and medium-sized businesses?  And there is going to be an overlap between what we're doing on the Recovery Act and what we need to do in terms of bank policy, what we're doing -- what the Fed is doing in terms of the credit markets.

And one of the things that we're really exploring is how can we help the community banks and smaller banks to loosen up credit.  In fairness to them, they're a little bit caught in between, because bank regulators are looking at their books and saying, boy, that was a real mess.  So they're asking them to increase their capital requirements and tighten up their lending criteria.  On the other hand, they've got the President of the United States saying, why aren't you lending more.  So they're a little bit in a fix.

Now, some of that is unavoidable because they really do need to strengthen -- you know, the banking sector was in bad shape and it was over-leveraged and we really did need to take some steps to shore up the banking system.  But we have to make sure that we don't overcorrect, and that's something that we're concerned about.

Some of the smaller banks also -- although they weren't involved in some of the crazy stuff that was going on on Wall Street -- frankly were just way overextended when it came to the commercial real estate market, built a lot of malls out there, a lot of strip malls out there.  And now they're finding that with the commercial real estate market actually not having bottomed out, it's sort of trailing the housing market in terms of problems that it's having, that's having a lot of effect on small banks as well.

The bottom line is this:  We know this is a priority.  We are pushing as hard as we can to do it in a responsible way.  We actually think that by getting financial regulatory reform done -- which is currently pending in Congress -- that will provide the certainty and the framework available to us so that we can then help these banks more effectively do the right thing than we're doing right now.

I want to -- behind the gentleman that I just called.  I want to make sure that we're getting a little gender equity here in -- no, no, not you.  (Laughter.)  Yes, right here.  Go ahead.

Q    Thank you, Mr. President.  I'm a farmer from Missouri, my name is Rhonda Perry, and I'm representing the National Family Farm Coalition today.  And I just wanted to bring your attention -- which I know that you understand fully -- that there's been a lot of conversation about we need to get the biggest bang for our buck.  And many times, in many places around this country, in rural communities, independent family farmers are the biggest bang for our buck in terms of creating jobs with independent businesses that depend on farmers.  From the people we buy our seed from to the people we use to process our meat to the transportation system to haul our grain, we create a lot of jobs in rural Missouri, so we want to make sure that's not overlooked.

And one of the things that you and the First Lady have highlighted is this incredible move that's underfoot, where thousands of farmers are producing food for local markets.  So we need to make sure that we have the infrastructure in place, from the meat processing to the transportation and storage to make that a reality, because that really is and could be a reality for us.

And whereas we have tended in the past to put a lot of money into the hands of corporate agribusiness out here in our rural communities, they have not proven to be the bang for the buck that independent family farmers have in terms of job creation that are good-paying and fair jobs in our communities.  So thank you for all you're doing on competition and on local food.  And we just want to remember that we are a job creator out here, so thank you.

THE PRESIDENT:  Robert, you had your hand up.  Wait for the mic, so everybody can hear you.

Q    You know, most of the things that have been proposed today cost money.  And there is this concern about the federal deficit.  I hope that your administration will recognize, as I know you will, that it's possible, first of all, to reduce the deficit over time and sometimes in the short run realize that you need to increase the deficit.  I hope the concern about the deficit in the long run doesn't crowd out the need for additional spending in the short run.

And I also think that some of these programs that increase jobs and increase GDP are probably the fastest way to get the economy back on a track that will reduce the deficit over time.  It's certainly a better way to reduce the deficit than putting ourselves into a debtor's prison, and assume we can deflate our way to recovery.

THE PRESIDENT:  Well, I think this is an important point.  We have been talking a lot about specific initiatives.  There is a macroeconomic element to this whole thing, and so let me just amplify what was just said.  We have a structural deficit that is real and growing, apart from the financial crisis.  We inherited it.  We're spending about 23 percent of GDP and we take in 18 percent of GDP, and that gap is growing, because health care costs -- Medicare and Medicaid in particular -- are growing, and we've got to do something about that.

You then layer on top of that the huge loss of tax revenue as a consequence of the financial crisis, and the greater demands for unemployment insurance and so forth.  That's another layer.  Probably the smallest layer is actually what we did in terms of the Recovery Act.  I think there is a misperception out there that somehow the Recovery Act caused these deficits.  No.  I mean, we had -- we've got a 9-point-something trillion-dollar deficit.  Maybe a trillion dollars of it can be attributed to both the Recovery Act as well as the cleanup work that we had to do in terms of the banks.

It turns out, actually, TARP, as wildly unpopular as it has been, has been much cheaper than any of us anticipated.  So that's not what's contributing to the deficit.  We've got a long-term structural deficit that is primarily being driven by health care costs and our long-term entitlement programs.  All right, so that's the base line.

Now, if we can't grow our economy, then it is going to be that much harder for us to reduce the deficit.  The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who've got jobs are paying taxes, and businesses that are making profits have taxes, are paying taxes.  That's the most important thing we can do.  We understand that in this administration.  That's not always the dialogue that's going on out there in public, and we're going to have to do a better job of educating the public on that.

The last thing we would want to do in the midst of a -- what is a weak recovery, is us to essentially take more money out of the system either by raising taxes or by drastically slashing spending.  And frankly, because state and local governments generally don't have the capacity to engage in deficit spending, some of that obligation falls on the federal government.

Having said that, what is also true is that unless businesses and global capital markets have some sense that we've got a plan, medium and long term, to get the deficit down, it's hard for us to be credible, and that also could be counterproductive.

So we've got about as difficult a economic play as is possible, which is to press the accelerator, in terms of job growth, but then know when to apply the brakes in the out-years, and do that credibly.  And we are trying to strike that balance, but we're going to need help from all of you who oftentimes are more credible than politicians in delivering that message, because we want to leverage whatever public dollars are spent, and we are under no illusion that somehow the federal government can spend its way out of this recession.  But it is absolutely true that any of the ideas that have been mentioned here are still going to require some public dollars, and those are actually good investments to make right now.

How much time do we have?  Just want to make sure I'm not -- we're doing good, okay, good.

We actually have an Internet question because we're trying to make sure that this goes out to other locations.  What do you got?

Q    Mr. President, as you know, in addition to all these people, a lot of people have been watching through the Web site, all the breakout sessions, which will be available for anyone to watch afterward for those of you who want to check out other ones, but they've also been talking on Facebook, on Twitter about what they're seeing.

And we had one question from Don Arrington (ph), who says, "What confuses me is I have an MBA, and that has educated me right out of the market.  I thought furthering my education was supposed to help me in a tough job market."

THE PRESIDENT:  Well, look, first of all, I got a law degree, so it was more expensive, it took longer, and I don't know how much more useful it was.  (Laughter.)  But that e-mail, I think, is indicative of what a lot of people are feeling out there.  This is not the normal recession that we've just gone through.  This is one that is going deep into the economy, it is not hitting blue-collar workers alone.  It is hitting white-collar workers just as hard, and in some cases, when it comes to middle management it's actually hitting them harder.  A lot of people who expected to always be able to find a job are finding the job market really tight.

I guess what I'd say is, number one, we know long term that more education means more opportunity for the individual, greater income for the individual.  That is not decreasing, that is actually increasing -- the gap between higher education and somebody with a high school education.  And in a knowledge-based economy, that's not going away.

So as frustrating as it may be for the college grad or the MBA, the fact of the matter is you are still going to be much better off than if you didn't have that education short term as well as long term.  It is not only good for the individual, it is also critical for our economy.

I told this story I think in this room just a while back, but I just want to repeat it, because we were doing a session on science, technology, and math education.  And one of the things that I'm very proud of in this administration that nobody, except maybe Friedman and a couple others, have paid attention to is, we are actually initiating more education reform, tougher education reform, than just about any administration over the last several years, and people like Randy and others are helping us in this process.

But I told the story of my lunch with the President -- President Lee of South Korea.  And, Gary, you were in that lunch -- remember I asked him, what's happening in terms of education policy in Korea?  And he said, well, you know, my biggest problem is, Korean parents are too demanding and they are insisting, for example, that I import, and I've had to import, thousands of foreign English teachers because they all feel that first graders should be learning English already.

Now, you think about that mentality, which is pervasive throughout Asia -- you saw the same thing in China -- and it gives you a sense of what we're up against in terms of global competition.

So as tough as this recession is, as tough as the job market may be, we need to double down on our education investment.  We have to be more demanding of our schools, of ourselves as parents.  Young people are going to have to be more demanding in terms of our ability to compete.  And I don't want -- the last thing I want, and this actually relates to the previous question, the last thing I want is us to essentially use up our seed corn here, to not make investments in education, to not make our investments in clean energy, to essentially say the only way we can handle this is to constrict our dreams and to go small -- because these other countries out there, they're making these investments in infrastructure, in education, in clean energy.  And we can't lose the race just because we're going through a tough time right now.  Now is the time actually to make sure that we're prioritizing properly and pushing even harder on that front.

Okay.  Yes, sir.

Q    Mr. President, Fred Lampropoulos of Merit Medical Systems.  One of the overriding thoughts in our forum was that there's uncertainty that there's such an aggressive legislative agenda that businesspeople don't really know what they ought to do.  In fact, one CEO said that he thought he has to kind of wait and may have to restructure his business -- this is a large multinational pharma company -- and that uncertainty is really what's holding back the jobs.  And I hear that a lot in the press.  There's so much going on, no one really knows what to do.  How are you going to give us that confidence and make sure that we're certain about both the near-term and long-term growth prospects?

THE PRESIDENT:  You know, I actually think this is a legitimate concern.  This has been a tough year, with a lot of uncertainty.  Now, at the beginning of this crisis, when we were in transition, we could have made a decision.  And there were legitimate arguments for that decision -- there are legitimate arguments for the course that could have been taken, which is to say things are so bad -- we got two wars, we've got a crisis in the financial markets, we've just found out we lost 700,000 jobs per month in the first quarter -- that we should not try any big initiatives legislatively, just shouldn't do it, until everything has stabilized and settled down.

And I strongly considered that argument.  But I think the response is the point that was just made earlier, that if we keep on putting off tough decisions about health care, about energy, about education, we'll never get to the point where there's a lot of appetite for that.  I mean, keep in mind we just went through 10, 15 years where everything looked pretty good.  Except what happened was, is that that growth was built on a house of cards.  The fundamentals of the economy were weakening.  And they were papered over by massive leverage, credit card debt, a housing market bubble.

Our health care system we had to keep on putting off, but the fact of the matter is there is no way that businesses can sustain their current spending levels on health care.  They can't do it.  And families can't, either.  And this CEO of a pharmaceutical company I think would know that, because I'm sure that companies and health care providers are sending that message.  So my belief was that we had to start tackling some of those fundamental problems if we were going to emerge stronger than we were before.

Having said that, my strong hope is, is that we get health care done by the end of this year.  That eliminates some uncertainty because people will have a sense of what's going to be happening in the health care field; that we get financial regulatory reform done, if not by the end of this year then early next year so that banks have certainty; and that, to the extent that the uncertainty is derived from these major legislative initiatives, I think will be solved in the next few months.

I think that the best way for us to deal with long-term uncertainty is to tackle the things that we've been putting off and sweeping under the rug.  There's no point in us pretending that these aren't problems, and thinking that somehow we can go back to business as usual, because I think if we take that approach, then we might be able to manage for the next three or four or five years, but sooner or later we are going to get back into the same problems that we've already been in.  And I think it's very important to start doing the hard business now.

Okay, yes, back there.

Q    Thank you, Mr. President.  My name is Chandra Brown and I'm the president of United Streetcar, which is a subsidiary of Oregon Iron Works, and we are hiring, and we are building the first modern streetcar in 58 years back in this country.  So we're bringing jobs from Europe to here.

And I just wanted to emphasize the importance of having the federal government as a partner in some of these infrastructures, because we're a traditional manufacturing union house, and we want to be the next generation in clean energy, whether that's building streetcar vehicles for the 85 cities looking for it, whether it's building the first wave energy device that we're going to be building off the coast of Oregon.

I think it's critical that our traditional manufacturing base, that those jobs stay here in the United States, and that we continue to advance on those where it's going to be a benefit for all things -- climate change, job creation, and economic development, especially for streetcars and the 85 cities that are looking at them.

THE PRESIDENT:  I'm looking forward to riding on one of them.

Q    All right.  Anytime.

THE PRESIDENT:  Good.  This gentleman right here has been waiting.  Go ahead.

Q    Mr. President, thank you for the invitation.  My name is Bill Aossey from Cedar Rapids, Iowa.  I have a request that won't cost us anything.  It'll bring money home.  Can you please help ease the visa regulations so we can have students coming back, and international business visitors that will bring money and cultivate long-term resources of culture and academic relationships?  So please help ease this visa -- it'll bring money in and it won't cost us anything.  Thank you.

THE PRESIDENT:  Well, I think you make an important suggestion.  We live in a interconnected world and an interdependent world, and I think that, properly, we had to respond to 9/11 by reviewing our policies on visas, on immigration, on a whole host of issues.

But I think it is important for us not to get into a bunker mentality.  That's not America's strength.  Our strength has always been saying yes to the rest of the world, inviting ideas and different cultures and commerce.  And we have not seen the same kinds of openness, I think, over the last several years that I'd like to see.

Now, we've got to do it in a prudent way, but, you know, let's just take the example of foreign students.  One of the great things about this country is we get the best and the brightest talent to study here, and once they study here they start enjoying the intellectual freedom and the entrepreneurship, and they decide to stay, and they start new businesses.  And suddenly you've got a whole new generation of folks who are creating intel or other extraordinary businesses.

If those students start seeing a closed door, then we are losing what is one of our greatest competitive advantages, and that's something that I think we're committed to doing.

Let me broaden the point.  There are a lot of things that don't cost money that could make a difference.  So this goes back to the issue of certainty.  I mean, I do think that providing some regulatory certainty and reducing red tape on a whole bunch of areas like infrastructure investment is very important.  And what I've instructed our team to do is any good idea that will make the systems and processes of the private sector interacting with government smoother, quicker, crisper, more tech-savvy -- I'm for.

And I think on the export front is another example of where a lot of times just showing up, making sure that Gary Locke or our trade representative -- what's that guy's name, Ron Kirk -- (laughter) -- I'm messing with you, Ron.  Is he here?  You can tell him I said that.  But making sure that they are actively pursuing business opportunities overseas and we are not making it tougher.  Let me give you one specific example that could have some significant job implications.

We still have a lot of trade restrictions on high-tech exports that are actually carryovers from the Cold War.  Now, part of the problem is we haven't gotten the kind of intellectual property enforcement in other countries that we need -- and so understandably businesses are wary about sending their products overseas just to be duplicated and then shipped back to us using lower-wage labor.  But in some cases it really has to do with a failure to update and review what restrictions still make sense and what restrictions don't.

Now, China, Korea, a whole bunch of Asian nations would love to import some high-value-added, high-tech stuff that could create huge numbers of jobs here in the United States.  If we just increased our share of exports to Asia by 1 percent, that's about a quarter million jobs right there.  If we increased it by 5 [percent], that's a million jobs.  That fills a big hole; it doesn't cost us money.

So we are going to be scouring federal regulations, restrictions, et cetera that are inhibiting export growth.  We're going to be trying to see if we can use the federal government to link up small business and medium-sized businesses to exports more effectively.  I know a lot of this stuff was talked about in the exports section.  This is going to be a top priority.

Even though I was only supposed to take one more question, I'm going to take two because I had actually called on this gentleman right here and I felt bad that -- go ahead.

Q    I am Farooq Kathwari, chairman and CEO of Ethan Allen.  Just to follow up on this question, immigration, although my comment is on a separate subject, I came to the United States at age 21 with just a few hundred dollars.  I went to work during the day printing envelopes, went to school.  And this country afforded me the opportunity to be where I am today.  I think we should make sure that that kind of an opportunity is not taken away.

Now, my comment is that Ethan Allen is a 77-year-old company.  We have -- to survive, we have to reinvent, either by chance or by plan.  Otherwise, anybody 77 years old, an enterprise, cannot survive.  Well, this last year -- I refer it to like a tsunami hitting the economy -- has given us more opportunity to reinvent in the last seven or eight months than I've seen in the last 25 years that I've been president of Ethan Allen.

We have -- in the first seven or eight months, we had to consolidate.  We had to let people go.  We are a vertically integrated company, from manufacturing to retailing to logistics.  We have taken the brunt of this recession in communities that are very, very far away from Washington -- in Vermont, in Maine, North Carolina, Pennsylvania.  And we have had people with us for 30 to 40 years we had to let go, but we had to.

In the last seven months, as I said, after all this major reinvention, major consolidation -- but we are inventing.  In the last few months, we have been adding people.  We make furniture, and we have 30 stores in China and we're shipping them from the United States.  It's possible.  I would say, Mr. President, that we should not miss this opportunity; crisis creates an opportunity.

We as business leaders are ready for reinvention.  And I think the government should help us -- should help us in fiscal policy, should help us in tax policy, because a reinvention like you talk of the infrastructure of building bridges -- but we got to build up banks, we've got to build our technology.  And I think the government can play a very, very important role, because this opportunity is going to be shot and I think we should not miss it.

THE PRESIDENT:  Well, this is actually a good place to close.  What people are going through every day is heartbreaking, all across the country.  And the decisions that you just made as a CEO obviously have enormous ripple effects.  You had to do it in order to keep your company profitable.  On the other hand, the consequences of those layoffs obviously are felt deeply not just by the individuals involved but by the places -- the restaurant that that person who's been laid off used to frequent -- and it just keeps on rippling throughout the economy.

Digging ourselves out of the hole that we've dug ourselves into is not going to be easy.  The loss of -- the job loss this past year and the months preceding it were as severe as anything we've seen for a very long time, as rapid as we've seen in a very long time.  And generating the kind of economic growth that leads to the kind of hiring that gets our employment base back up to where it was is going to be hard and it's going to take a lot of work.

But I just want to echo what I said at the beginning of this session.  We still have the best universities in the world.  We still have the most open, entrepreneurial economy and market of any advanced nation.  We still have the most productive workers in the world.  Despite the issues of unsettledness around some of -- things like the banking industry and the financial sector, the truth of the matter is, is that we are still the most stable country in the world, which is why, during the midst of this crisis, everybody was buying into the U.S. and the dollar was shooting up and people were snatching up treasuries because they still have confidence in what America has to offer.

And so the most important message that all of us I think have to take away from this session is that if we combine traditional American optimism with an acknowledgment that we can't go back to business as usual, and that we have to rediscover a sense of seriousness of purpose when it comes to educating our kids or when it comes to government managing money properly or it comes to CEOs feeling some obligations to their workers and their communities -- if we can recapture that sense that we're in this thing together and that we are willing to work hard, that America is not great because it's owed to us, but we've been great because previous generations have put in the hard work to get us there, then I'm confident that we're going to get through this tough time and the 21st century is going to be as good for us as the 20th was.

But it's not going to come easily and it is going to require a level of cooperation and a willingness to work strategically together that we have not seen over the last several years.  And frankly, this town and the way the political dialogue is structured right now is not conducive to what we need to do to be globally competitive.  And all of you are leaders in your communities -- in the business sector and the labor sector, in academia, we even have a few pundits here -- it is important to understand what's at stake and that we can't keep on playing games.

I mentioned that I was in Asia on this trip thinking about the economy, when I sat down for a round of interviews.  Not one of them asked me about Asia.  Not one of them asked me about the economy.  I was asked several times about had I read Sarah Palin's book.  (Laughter.)  True.  But it's an indication of how our political debate doesn't match up with what we need to do and where we need to go.

But this kind of dialogue helps and I appreciate all of you participating.  Thank you, everybody.  (Applause.)

Because I'm traveling to Allentown, Pennsylvania --

AUDIENCE MEMBER:  Yay!  (Laughter.)

THE PRESIDENT:  -- I want to make sure that this room of business leaders and labor leaders and others just have a chance real quickly to hear directly from the mayor of Allentown, who's here right now.  Come on up, Mr. Mayor -- (applause) -- because I want to make sure that -- this is the kind of town where the rubber hits the road and I'm going to be having conversations with workers, small businesses, community colleges, and I want the mayor just to give a sense of what's going on and what you think would make the biggest difference in your town.

MAYOR PAWLOWSKI:  Thank you so much, Mr. President, and I want to say we're really honored to have you in Allentown, coming to Allentown tomorrow.  I, for one, am very thankful that you're taking on these challenges.  I know you were handed with a mess when you came in -- probably the worst economy in 70 years -- and I want to say thank you personally for all that you've done.  I think you're doing a great job.

On behalf of the city of Allentown, we have had some difficult challenges, like most mid-sized cities in the Northeast.  Our unemployment rate last month has gone up -- it went up to 9.8 percent.  We have about 41,000 people in that region that are unemployed.

But there's great things that are happening.  We hopefully -- and hopefully you're going to see some of those great things.  We've got some great companies that are actually growing, that are expanding.  We have a company that I know you're going to be at tomorrow that is actually manufacturing steel still in the United States, and doing a great job at it, growing their business and growing the workforce.

We have a number of unique small businesses.  In that particular region, we're very diversified.  We have a lot of Fortune 500 companies.  We have Air Products and Chemicals that's headquartered there; Pennsylvania Power & Light; Olympus has their North American headquarters around the city of Allentown.  But we have over 1,400 employers.  Only 1,100 of them are large employers.  The majority are small businesses.

And there's a number of small businesses in the area that are actually growing the economy.  One of them is the Terra Group, and I want to say thank you on behalf of them.  They started a product that was a small water filtration -- portable water filtration system, and the Marines have just bought that for our troops in Afghanistan.  And they're expanding -- you could clap on that, that was -- (laughter.)  They're actually expanding to hire another 40 jobs because of that.

And so I want to thank you.  We look forward to having you tomorrow, and we look forward to having you around the city of Allentown and talking to many of the businesses that are doing some great things in rebuilding this economy.  (Applause.)

THE PRESIDENT:  And if there are any CEOs here who are looking to locate, I'm sure Mayor Bing, Mayor Pawlowski, Mayor Cownie of Des Moines, they're all interested in talking to you.  (Laughter.)  And they have literature, I'm sure.  (Laughter.)  So thank you very much, everybody.  (Applause.)

END
4:51 P.M. EST

Remarks by The First Lady at Holiday Press Preview

Grand Foyer

12:01 P.M. EST

MRS. OBAMA:  Hello.  Good afternoon.  Welcome to the White House and Happy Holidays!  Thanks to all of you for joining us here today as we preview how we will mark the holidays here at the White House. 

Now, like many years past, we've actually been planning this day, and the holiday season, since the summer.  And our starting point was a very simple idea:  that we include as many people, in as many places, in as many ways as we can.  

So we decided to do something just a little different.  We took about 800 ornaments left over from previous administrations, we sent them to 60 local community groups throughout the country, and asked them to decorate them to pay tribute to a favorite local landmark and then send them back to us for display here at the White House.

And today, thanks to the East Wing and Residence staff, and 92 volunteers from 24 states who spent more than 3,400 hours decorating over the last several days, we have ornaments hanging on the tree behind me throughout the White House and everywhere else that include the Statue of Liberty, Mount Rushmore, the Kennedy Center -- Space Center, as well as some less known places like Davy Crockett Park in Tennessee, Pompey's Pillar in Billings, Montana and one of my favorites, the Lincoln Park Zoo in Chicago.

We also have one of the favorite traditions here at the White House on display -– it's the gingerbread masterpiece by our brilliant chef Bill Yosses, and his team.

But this year we've included something a little bit different.  In addition to the gingerbread White House we also have the White House Kitchen Garden on the South Lawn, a shadow box that lets you look into the gingerbread White House and view the State Dining Room.  And I just saw there's also a little Bo replica.  (Laughter.)  So that's a new addition.

And we opened the doors last night to the first of more than 50,000 visitors who will come to the White House during this holiday season, and it's safe to say that everyone was really impressed.  And I heard you all partying last night.  You had a great time.  (Laughter.)

For many people, a visit to the White House is a once-in-a-lifetime experience and it has been made even more magical because of all of your hard work, all of our volunteers.  So I want to take just a moment again to thank all of our volunteers who spent so much time making this White House such a special treat, and we hope you had as good a time as it sounded like you had last night.  (Laughter.)  Your work has really transformed the White House, which is, as we always say, the people's house, and we're so grateful for everything that you've done to make this really a special treat for all of us.

And finally, I want to take a moment to talk about why we chose this year's theme, which is "Reflect, Rejoice and Renew." 

And for the Obama family, Christmas and the New Year has always been a time to reflect on our many blessings, to rejoice in the pleasure of spending time with our family and our friends, and to renew our commitment to one another and to the causes that we believe in.  And I wanted to continue that part of the tradition during our first holiday season here at the White House. 

And this year has been filled with an infinite number of blessings for me and my family.  And I say this all the time, but every day I am honored to be this nation's First Lady.  And from the day that my family arrived here, I have wanted the American people to share in our journey, to share in the history and the excitement that makes the White House such a special landmark in this nation. 

That's why we've worked so hard throughout this year to invite as many people as possible to events here at the White House.  We've tried to showcase talents and contributions of our artists and our inventors, of students and masters, of exalted heroes and ordinary citizens of every age and every background.  The idea has been to create an environment where every story and every voice is welcome in the White House, and for all of us to rejoice in their accomplishments and to celebrate their contributions to the life of this nation.  

     And in the new year, we all intend to renew this effort and continue this kind of outreach, so that everyone feels like they have a place here at the White House.  And I know many people approach the holidays in the same way in their own lives, and that at this time of year for so many people, they are looking for opportunities to give thanks and to give back.  And we're doing the same thing here at the White House.  We're focusing our efforts this year on two very important causes -- we're supporting local food banks, and the Toys for Tots program.

     Hunger is on the rise here in America, hitting its highest levels in nearly 15 years.  A recent report released by the USDA reveals that in 2008, an estimated 1.1 million children were living in households that experienced hunger multiple times over this year.  And, of course, no child in the United States of America should ever go to bed hungry, and no family in this country should have to worry that they won't have food on the table, not just during the holidays, but every day. 

     So to combat hunger this winter, in coordination with the Corporation for National and Community Service and the U.S. Department of Agriculture, we're launching the United We Serve "Feed a Neighbor" initiative.  And this is a program that will provide all Americans with resources to help combat hunger in their own communities.  This initiative is a great way for you, for all Americans, along with their friends and families, to give back not just during the holidays, but throughout the year.  By going to serve.gov, this program will connect Americans to opportunities like delivering meals to homebound seniors, offering professional skills at a food pantry, or planting a community garden and sharing produce with neighbors. 

We're also pleased to be supporting the Toys for Tots program.  Over the past year, I've had the privilege of visiting servicemen and women, and their families, all across this country, and have spent much of my time in the White House working to ensure that we properly honor their service.  

And each time I visit a base or meet with members of our Armed Forces and veterans, I'm struck not just by the extraordinary sacrifices they and their family make to serve our country, but by all they do to help others right here at home in their own communities. 

     And the U.S. Marine Corps Reserve Toys for Tots program is a great example of how servicemen and women are doing even more than just serving our country in uniform.  For more than 62 years, Marines have distributed more than 400 million toys to more than 188 million needy children.  And in 2008 alone, the program was active in 657 communities in all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands.  Marines and volunteers distributed more than 16.2 million toys that year to 7.6 million children.  That was one of their best years ever. 

So I'm thrilled this year that the White House staff is going to be supporting these efforts with a toy drive to help make the holidays a little brighter for children in the surrounding communities.  The Toys for Tots headquarters is located outside of Marine Corps base Quantico, and I look forward to visiting there later this month to personally deliver the toys that we collect here at the White House.  

     So these are just two important ways that we'll be marking the holidays here at the White House.  So the President and I are urging everyone to join us in these efforts, or to find some way to give back some time during this holiday season. 

     So on behalf of the Obama family, I wish all of you a joyous and meaningful holiday season.  And it is my pleasure to introduce Toys for Tots President and CEO, Lieutenant General Pete Osman, who will provide some additional information about this year's program.

     Thank you all very much.

END
12:10 P.M. EST

Remarks by the President on Pardoning of the National Turkey

North Portico

11:41 A.M. EST

     THE PRESIDENT:  Happy Thanksgiving, everybody.  Welcome to the White House.  On behalf of Sasha and Malia and myself, we're thrilled to see you.  I want to thank Walter Pelletier, chairman of the National Turkey Federation, and Joel Brandenberger, its president, for donating this year's turkey.  His name is "Courage," and he traveled here from Goldsboro, North Carolina, where he was raised under Walter's own precious care.

     (Turkey gobbles.)

     THE PRESIDENT:  There you go.  (Laughter.)

Now, the National Turkey Federation has been bringing its finest turkeys to the White House for more than 50 years.  I'm told Presidents Eisenhower and Johnson actually ate their turkeys.  You can't fault them for that; that's a good-looking bird.  (Laughter.)  President Kennedy was even given a turkey with a sign around its neck that said, "Good Eatin', Mr. President."  But he showed mercy and he said, "Let's keep him going."  And 20 years ago this Thanksgiving, the first President Bush issued the first official presidential pardon for a turkey.

Today, I am pleased to announce that thanks to the interventions of Malia and Sasha -- because I was planning to eat this sucker -- (laughter) -- "Courage" will also be spared this terrible and delicious fate.  Later today, he'll head to Disneyland, where he'll be grand marshal of tomorrow's parade.  And just in case "Courage" can't fulfill his responsibilities, Walter brought along another turkey, "Carolina," as an alternate, the stand-in.

Now, later this afternoon, Michelle, Malia, Sasha and I will take two of their less fortunate brethren to Martha's Table, an organization that does extraordinary work to help folks here in D.C. who need it the most.  And I want to thank Jaindl's Turkey Farm in Orefield, Pennsylvania, for donating those dressed birds for dinner.  So today, all told, I believe it's fair to say that we have saved or created four turkeys.  (Laughter.)

You know, there are certain days that remind me of why I ran for this office.  And then there are moments like this -- (laughter) -- where I pardon a turkey and send it to Disneyland.  (Laughter.)  But every single day, I am thankful for the extraordinary responsibility that the American people have placed in me.  I am humbled by the privilege that it is to serve them, and the tremendous honor it is to serve as Commander-in-Chief of the finest military in the world -- and I want to wish a Happy Thanksgiving to every service member at home or in harm's way.  We're proud of you and we are thinking of you and we're praying for you.

When my family and I sit around the table tomorrow, just like millions of other families across America, we'll take time to give our thanks for many blessings.  But we'll also remember this is a time when so many members of our American family are hurting.  There's no question this has been a tough year for America.  We're at war.  Our economy is emerging from an extraordinary recession into recovery.  But there's a long way to go and a lot of work to do.

In more tranquil times, it's easy to notice our many blessings.  It's even easier to take them for granted.  But in times like these, they resonate a bit more powerfully.  When President Lincoln set aside the National Day of Thanksgiving for the first time -- to celebrate America's "fruitful fields," "healthful skies," and the "strength and vigor" of the American people -- it was in the midst of the Civil War, just when the future of our very union was most in doubt.  So think about that.  When times were darkest, President Lincoln understood that our American blessings shined brighter than ever.

This is an era of new perils and new hardships.  But we are, as ever, a people of endless compassion, boundless ingenuity, limitless strength.  We're the heirs to a hard-earned history and stewards of a land of God-given beauty.  We are Americans.  And for all this, we give our humble thanks -- to our predecessors, to one another, and to God.

So on this quintessentially American holiday, as we give thanks for what we've got, let's also give back to those who are less fortunate.  As we give thanks for our loved ones, let us remember those who can't be with us.  And as we give thanks for our security, let's in turn thank those who've sacrificed to make it possible, wherever they may be.

Now, before this turkey gets too nervous that Bo will escape and screw up this pardon -- (laughter) -- or before I change my mind, I hereby pardon "Courage" so that he can live out the rest of his days in peace and tranquility in Disneyland.

And to every American, I want to wish you, on behalf of myself, Malia, Sasha, and Michelle, the happiest of Thanksgivings.  Thank you very much, everybody.  (Applause.)

END
11:48 A.M. EST