12:05 P.M. MDT

THE PRESIDENT: Hello, Montana! Thank you. Thank you. Thank you. It's great to be here. Please, everybody have a seat, have a seat. Thank you so much. Thank you. I am excited to be back in Montana. (Applause.) I want to --

Q Where's Michelle?

THE PRESIDENT: where's Michelle? Come on, what is this, chopped liver here? (Laughter.) Michelle and the girls were supposed to go white water rafting. Now, I just heard some rain out there, so I don't know what's going on there, but they're on their way.

I want to first of all acknowledge some outstanding public officials and great friends. First of all, the man who is working tirelessly to make sure that the American people get a fair deal when it comes to health care in America, please give Max Baucus a big round of applause. (Applause.) One of my favorite people in Washington, probably because he hasn't "gone Washington" -- still gets the same haircut, give it up for John Tester. (Applause.) Your own star here in Montana, the great governor of this state, please give Brian Schweitzer and his lovely wife Nancy a big round of applause. (Applause.) The lieutenant governor, John Bohlinger, is here. Give John a big round of applause. (Applause.) The mayor of Belgrade, Russ Nelson, is here. (Applause.) The mayor of Bozeman, Kaaren Jacobson is here. And somebody who I believe is destined to be one of the greatest Secretaries of the Interior in our history, former senator from Colorado, Ken Salazar, is here. Please give Ken a big round of applause. (Applause.)

Well, it is nice to be back. It's nice to take a break from the going ons in Washington. I'm thrilled to have a chance to spend some time with the folks in this beautiful state. After all, here in Montana you've got bears and moose and elk. In Washington you just have mostly bull. (Laughter.) So this is a -- (applause) -- this is a nice change of pace, being in Montana.

I especially want to thank Katie for her introduction. (Applause.) Where'd Katie go? There she is, right there. Katie's willingness to talk about such a painful experience is important, because we have to understand what's at stake in this health care debate. Katie's story is the kind of story that I've read in letters all throughout the campaign and everyday when I'm President. I hear about them in town halls all across America: The stories of hardworking people who are doing the right thing, they're acting responsibly, only to find out that they're penalized because others aren't doing the right thing, because others aren't acting responsibly.

On Tuesday, I was in New Hampshire talking about people denied insurance coverage because of preexisting conditions. Now today, we're talking about folks like Katie who've had their insurance policies suddenly revoked, even though they were paying premiums, because of a medical condition. They got sick, and suddenly that's when they get dropped. Tomorrow, in Colorado, we'll be talking about the people who have insurance but are still stuck with huge bills because they've hit a cap on their benefits or they're charged exorbitant out-of-pocket fees.

And when you hear about these experiences, when you think of the millions of people denied coverage because of preexisting conditions, when you think about the thousands who have their policies cancelled each year, like Katie, I want you to remember one thing: There but for the grace of God go I. (Applause.) Most of us have insurance. And most of us think, you know, knock on wood, that we're going to stay healthy. But we're no different than Katie and other ordinary Americans, no different than anybody else. We are held hostage at any given moment by health insurance companies that deny coverage, or drop coverage, or charge fees that people can't afford at a time when they desperately need care.

It's wrong. It's bankrupting families, it's bankrupting businesses. And we are going to fix it when we pass health insurance reform this year. We are going to fix it. (Applause.) Again, I want to specially thank Max for his hard work on a bill as chair of the Finance Committee. He has been committed to getting this done.

This is obviously a tough time in America. It's a tough time here in Montana. Just six months ago, we were in the middle of the worst recession in our lifetimes. We were losing about 700 [sic] jobs each month. Economists of all stripes feared a second coming of a Great Depression. And that's why we acted as fast as we could to pass a recovery plan to stop the freefall.

I want to just speak briefly about the recovery plan because that has colored how people view the health care debate. The recovery plan was divided into three parts. One-third of the money in the Recovery Act went to tax cuts that have already started showing up in the paychecks of about 400,000 working families in Montana. Four hundred thousand working families have seen their taxes reduced because of the Recovery Act. (Applause.)

We also cut taxes for small businesses on the investments that they make, and more than 200 Montana small businesses have now qualified for new loans backed by the Recovery Act, including 10 businesses right in the Bozeman area. (Applause.)

Another third of the money in the Recovery Act is for emergency relief for folks who've borne the brunt of this recession. What am I talking about? Unemployment insurance -- we've extended benefits for 40,000 Montana residents. We've made health insurance 65 percent cheaper for families who rely on COBRA when they lose their job and they're out there looking for work. (Applause.) And I think as your governor will testify, for states facing historic budget shortfalls, we provided assistance that has saved the jobs of tens of thousands of workers who provide essential services, like teachers and police officers. We've prevented painful jobs cuts, but we've also prevented a lot of painful state and local tax increases.

So that's two-thirds of the Recovery Act.

The last third of the Recovery Act is for investments that are already putting people back to work: rebuilding infrastructure. There are nearly 70 transportation projects already approved here in Montana. These are jobs fixing up the roads that run through the national forests, good jobs doing the work that America needs done. And most of the work is being done by local businesses, because that's how we're going to get this economy growing again.

So there is no doubt that the recovery plan is doing what we said it would: putting us on the road to recovery. We saw last Friday the jobs picture is beginning to turn. We're starting to see signs that business investment is coming back. So people, I think, sometimes when I listen to them on TV or on these cable shows, they seem to have a selective memory. We started with this mess. We're now pulling out of it. But that doesn't mean we're out of the woods. (Applause.) That doesn't mean we're out of the woods. You know that. In Bozeman, for example, the local job center recently reported seeing more than 8,000 job seekers for just 160 jobs.

So we can't just sit back and do nothing while families are struggling. Because even before this recession hit, we had an economy that was working pretty well for the wealthiest Americans -- working pretty well for Wall Street bankers and big corporations -- but it wasn't working so well for everybody else. It was an economy of bubbles and busts. It was an economy in which recklessness, and not responsibility, was rewarded. We can't go back to that kind of economy.

If we want a country that succeeds in the 21st century then we have to lay a new foundation for lasting prosperity. And health insurance reform is one of the key pillars of this new foundation. (Applause.) This economy won't work for everyone until folks like Katie and her husband can start that small business without fear of losing their health coverage; until companies aren't slashing payroll and losing profits to pay for health insurance; until every single American has the security and the peace of mind of knowing they've got quality, affordable care.

And the fact is, health care touches all of our lives in a profound way. Now, that also makes this debate an emotional one. I know there's been a lot of attention paid to some of the town hall meetings that are going on around the country, especially when tempers flare -- TV loves a ruckus.

What you haven't seen on TV -- and what makes me proud -- are the many constructive meetings going on all over the country. Everywhere -- everywhere across the country, you're seeing people who are coming together and having a civil, honest -- often difficult -- conversation about how we can improve the system. That's how democracy is supposed to work.

Earlier this week, I held a town hall in New Hampshire. A few thousand people showed up. Some were big supporters of health insurance reform, some had concerns and questions, some were downright skeptical -- didn't believe it could be done. But I was glad to see that people were there not to shout, they were there to listen and ask questions. That reflects America a lot more than what we've seen covered on television for the last few days -- and I want to thank you for coming here today in that spirit. (Applause.)

Now, before I take questions, I just want to talk briefly about what health insurance reform will mean for you. We still have work to do in Congress. The bills aren't finalized. But I just want you to understand about 80 percent of this has already been agreed to. And here are the basic principles that folks are talking about.

First, health insurance reform will mean a set of common-sense consumer protections for folks with health insurance. So those of you who have health insurance, this is what it will mean. Insurance companies will no longer be able to cancel your coverage because you get sick. (Applause.) That's what happened to Katie. It can't happen anymore.

If you do the responsible thing, if you pay your premiums each month so that you are covered in case of a crisis, when that crisis comes -- if you have a heart attack or your husband finds out he has cancer or your son or daughter is rushed to the hospital -- at the time when you're most vulnerable and most frightened, you can't be getting a phone call from your insurance company saying that your insurance is revoked. It turns out, once you got sick, they scoured your records looking for reasons to cancel your policy. They'd find a minor mistake on your insurance form that you submitted years ago. That can't be allowed to happen. (Applause.)

One report -- one report found that three insurance companies alone had canceled 20,000 policies in this way over the past few years. One man from Illinois lost his coverage in the middle of chemotherapy because his insurer discovered he hadn't reported gall stones he didn't know about. True story. Because his treatment was delayed, he died. A woman from Texas was diagnosed with an aggressive form of breast cancer, was scheduled for a double mastectomy. Three days before surgery, the insurance company canceled the policy, in part because she forgot to declare a case of acne. True story. By the time she had her insurance reinstated, the cancer had more than doubled in size.

And this is personal for me. I'll never forget my own mother, as she fought cancer in her final months, having to worry about whether the insurance company would refuse to pay for her treatment. The insurance company was arguing that she should have known that she had cancer when she took her new job -- even though it hadn't been diagnosed yet. If it could happen to her, it could happen to any one of us. It's wrong. And when we pass health insurance reform, we're going to put a stop to it once and for all. That is what Max Baucus is working on. (Applause.)

Number two: Insurance companies will be prohibited from denying coverage because of your medical history. A recent report found that in the past three years, more than 12 million Americans were discriminated against by insurance companies because of a preexisting condition. No one holds these companies accountable for these practices. But we will.

And insurance companies will no longer be able to place an arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. (Applause.) And that will help -- that will help 3,700 households in Montana. We'll place a limit on how much you can be charged for out-of-pocket expenses, as well, because no one in America should be broke when they get sick. (Applause.) And finally -- finally, we'll require insurance companies to cover routine checkups and preventive care, like mammograms and colonoscopies, because that saves money and that saves lives. (Applause.)

So that's what health care reform is all about. Right now we've got a health care system that all too often works better for the insurance companies than it does for the American people. We want to change that.

Now, if you are one of nearly 46 million people who don't have health insurance, you'll finally have quality affordable options. And if you do have health insurance, we'll help make sure that your insurance is more affordable and more secure. If you like your health care plan, you can keep your health care plan. This is not some government takeover. If you like your doctor, you can keep seeing your doctor. This is important. I don't want government bureaucrats meddling in your health care, but I also don't want insurance company bureaucrats meddling in your health care either. (Applause.) That's what reform is about. (Applause.)

Now, let me say this: Under the proposals that Max is working on, more than 100,000 middle-class Montanans will get a health care tax credit. More than 200,000 Montanans will have access to a new marketplace where you can easily compare health insurance options. Nearly 30,000 small businesses in Montana will be helped by new tax benefits, as well. (Applause.) And we will do all this without adding to our deficit over the next decade, largely by cutting waste and ending sweetheart deals for insurance companies that don't make anybody any healthier. (Applause.)

So the fact is, we are closer to achieving health insurance reform than we've ever been in history. We have the American Nurses Association and the American Medical Association on board because America's doctors and nurses know how badly we need reform. We have broad agreement in Congress on about 80 percent of what we're trying to achieve. And we continue to work on the other 20 percent. We have an agreement from the drug companies, who violently opposed reform in the past, to make prescription drugs more affordable for seniors. The AARP supports this policy, and agrees with us that reform must happen this year.

But because we're getting close, the fight is getting fierce. And the history is clear: Every time we are in sight of health insurance reform, the special interests fight back with everything they've got. They use their influence, they run their ads, and their political allies try to scare the heck out of everybody. It happened in '93. It's happening now. It happened, by the way, when Lyndon Johnson tried to propose Medicare. It happened when John F. Kennedy tried to propose Medicare.

We can't let them do it again. Not this time. (Applause.) Because for all the scare tactics out there -- for all the scare tactics out there, what is truly scary -- what's truly risky -- is if we do nothing. If we keep the system the way it is right now, we will continue to see 14,000 Americans lose their health insurance every day. And that could be you. Premiums will continue to skyrocket, rising three times faster than wages. That will be you. The deficit will continue to grow. Medicare will go into the red in less than a decade.

So for all the seniors out there who understandably are worried about Medicare, understand if we don't reform the system, in about eight years Medicare goes in the red. And given the deficits that we have right now, we've got to start thinking how are we going to pay for that. Insurance companies will continue to profit by discriminating against people for being sick.

So if you want a different future -- a brighter future -- I need your help. Change is never easy -- and by the way, it never starts in Washington. It starts with you. So I need you to keep knocking on doors, talking to your neighbors, spread the facts. (Applause.) Fight against the fear. This is not about politics; this is about helping the American people, and if we can get it done this year, the American people are going to be better off.

Thank you, Montana. Thank you. (Applause.)

All right, everybody have a seat. So we are going to try to take as many questions as we can in the time that we've got. And we haven't pre-selected anybody, or pre-screened the questions. All we want to do is just ask you to raise your hand if you've got a question. And I'm going to go girl-boy-girl-boy so I don't get into trouble. (Laughter.)

There are -- there are people in the audience with microphones, as you can see. And so if you can -- once I call on you, if you can just wait until they bring the microphone, stand up so we can all see your lovely face, and introduce yourself, and then I will ask -- I will answer the question. And if you can keep your questions relatively brief, I'll try to keep my answers relatively brief.

All right, this young lady right here in the blue blouse. Right there.

Q Hi, Mr. President. Thank you so much for coming to Southwest Montana. We really appreciate you being here. (Applause.)

THE PRESIDENT: Thank you. It's great to be here.

Q I was laid off in January. I am currently uninsured. My two children have Medicaid right now. And my question is, without going into too much detail, can you tell us what you -- if you have kind of looked at Canada, England's system, and sort of -- can you pick and choose from those systems that work, that we see there's some success rate and apply that to what you're trying to push through right now?

THE PRESIDENT: Well, let me tell you what happens in other industrialized countries. First of all, I think it's important for everybody to understand that Americans spend $5,000 to $6,000 per person more than any other advanced nation on earth -- $5,000 or $6,000 more than any other person -- any other country on earth.

Now, if you think that -- how can that be? Well, you probably don't notice it, because what's happening is if you've got health insurance through your job, more and more of what would be your salary and wages is going to health insurance. But you don't notice it; you just notice that you're not getting a raise. But a bigger and bigger portion of compensation is going to health care here in the United States. Now that's point number one.

So clearly we've got a system that isn't as efficient as it should be because we're not healthier than these people in these other countries.

Having said that, most other countries have some form of single-payer system. There are differences -- Canada and England have more of what's called -- what people I guess would call a socialized system, in the sense that government owns the hospitals, directly hires doctors -- but there are a whole bunch of countries like the Netherlands where what they do is, it's a single-payer system only in the sense that government pays the bill, but it's all private folks out there -- private doctors, private facilities. So there are a bunch of different ways of doing it.

Now, what we need to do is come up with a uniquely American way of providing care. (Applause.) So I'm not in favor of a Canadian system, I'm not in favor of a British system, I'm not in a favor of a French system. That's not what Max is working on. Every one of us, what we've said is, let's find a uniquely American solution because historically here in the United States the majority of people get their health insurance on the job. So let's build on that system that already exists -- because for us to completely change that, it would be too disruptive. That's where suddenly people would lose what they have and they'd have to adjust to an entirely new system. And Max and I agree that's not the right way to go.

So all we've said is, in building a better system, what are the elements? Well, number one, for people like you, you should be able to get some help going into the private insurance marketplace and buying health insurance. So we would give you a tax credit, a subsidy of some sort, to help you obtain insurance.

Now, the problem is, if you're going out there on your own, then it's much more expensive than if you go in a big group. So we would allow you to buy into a health care exchange that would give you some power to negotiate for a better rate, because you're now part of a big pool. We would also make sure that if you do have health insurance that you are protected from some of the policies that we've already talked about that have not been very good for consumers. So you wouldn't be able to be banned for preexisting conditions. There would be caps on the amount of out-of-pocket expenses you would have to spend. So we would reform the insurance market for people who already have health insurance.

And if we do those things -- making it better for folks who already have insurance, making it easier for you to buy insurance, and helping small businesses who want to do the right thing by their employees but just can't afford it because they're charged very high rates, they can't get a good deal from the insurance companies -- if we do those things, then we can preserve the best of what our system offers -- the innovation, the dynamism -- but also make sure that people aren't as vulnerable. Now, that's essentially what we're talking about with health care reform.

And so when you start hearing people saying, you know, we're trying to get socialized medicine and we're trying to have government bureaucrats meddle in your decision-making between you and your doctor, that's just not true.

All right? Okay. It's a guy's turn. Gentleman right there in the back, with the green.

Q I think most of us know that Medicare is one of the best social programs this nation has ever put together. (Applause.) It works extremely well and helps the people who need it the most. But money doesn't grow on trees. How can we be assured that increasing coverage to others is not going to make Medicare more expensive or less effective?

THE PRESIDENT: Well, I think this is a good point, and I appreciate the question, because a lot of seniors are concerned about this. First of all, it is important to know that Medicare is a government program. So when you hear people saying, "I hate government programs, but keep your hands off my Medicare" -- (laughter) -- then there's a little bit of a contradiction there. And I have been hearing that quite a bit, all right, so I just want to -- (applause) -- I want to be clear about that.

Medicare is a terrific program and it gives our seniors security. And I want Medicare to be there for the next generation, not just for this generation. But if we don't make some changes in how the delivery system works, if we don't eliminate some of the waste and inefficiencies in the system, then seniors are really going to be vulnerable. So what we've proposed is not to reduce benefits -- benefits on Medicare would stay the same -- it's not to ration. What we are asking is that we eliminate some of the practices that aren't making people healthier.

Example number one: Subsidies to insurance companies under Medicare amount to about $177 billion over 10 years. That's how much we think we could save by eliminating subsidies to insurance companies that are offering what's called Medicare Advantage. It doesn't help seniors any more than regular Medicare does. (Applause.)

And so if we took that $177 billion, we're not making seniors worse off, but we've got that money now not only to strengthen the health care system overall, but potentially to cover more people. Now, the insurance companies don't like it, but it's the right thing to do.

Let me give you another example of changes that we should make. Right now when you go into the hospital, you get a procedure under Medicare, if you end up having to come back to that hospital a week later because something went wrong, they didn't do it right, the hospital doesn't pay any penalty for that; they just get reimbursed for a second time or a third time -- same fee, same service.

Now, think about that if car -- auto repair shops operated the same way. You take your car in and you get it fixed, and a week later the thing is broken again. You go in. The guy says, well, let me charge you all over again, and I'll do just the same thing. That doesn't make sense. So what we've said is, let's give hospitals an incentive. Let's say to the hospitals, we're going to charge you for overall treatment of whatever the problem is. And if you get it right the first time, you get to keep a little extra money. But if you keep on having the person coming back again and again, then there's a disincentive.

Those are the examples of the kinds of changes that can be made that aren't reductions in benefits, but they save the system money overall, and by the way, will actually increase the life expectancy of the Medicare Trust Fund, which is in deep trouble if we don't do something, because as you said, money doesn't grow on trees. So we're actually trying to help preserve Medicare and make people healthier in the process.

All right. (Applause.) Young lady in the back there, right there. No, well, actually, I was pointing -- I didn't see you. Right there. No, the young lady in the blue who stood up there.

Q Good afternoon, Mr. President. I'm a Bozeman resident. Sorry, I'm a little nervous.

THE PRESIDENT: You're doing great. (Laughter.)

Q Thank you. I'm a single mother of two children. I'm an MSU student. I have a son that suffers from many disabilities. He's disabled for the rest of his life. He's 11 years old. He suffers from autism. He's non-verbal. He suffers from extremely hard to control epilepsy, and he's Type I diabetic. He has been sick with these ailments ever since he was nine months old. My question to you is, I rely heavily on his Medicaid to support good health care for him. What, with this reform, would happen with his Medicaid -- Medicare coverage -- or Medicaid coverage, sorry.

THE PRESIDENT: First of all, thank you for sharing your story. You are a heroic mom, so we are grateful to you and your son is lucky. (Applause.)

If you currently qualify for Medicaid -- your son currently qualifies for Medicaid, he would continue to qualify for Medicaid. So it would not have an impact on his benefit levels and his ability to get the care that he needs.

Some of the reforms that we're talking about, though -- what I just referred to as delivery system reforms, where we help, for example, encourage doctors when they are seeing a patient, instead of having five tests, do one test and then e-mail all the tests to five specialists. Those kinds of changes can save money in the Medicaid and the Medicare systems overall, and that will actually help Governor Schweitzer, who has to come up with half of Medicaid in his state budget every year, it will actually help him then be able to pay for it.

So we're not changing the benefit levels or who qualifies for Medicaid -- we might see some expansion of Medicaid, in fact, under the reforms that have been proposed in some of the legislation -- but we do have to make the whole system overall just a little bit smarter, make sure we're getting a better bang for the buck, so that the money is there for the services that your son needs. Okay.

This also includes, by the way, preventive care, wellness care, because our system really is not a health care system, it's more like a disease care system, right? We wait until people get sick and then we provide them care. Now, think about it -- are we better off waiting until somebody gets diabetes and then paying a surgeon for a foot amputation, or are we better off having somebody explain to a person who's obese and at risk of diabetes to change their diet, and if they contract diabetes to stay on their medications? Obviously the second is more cost-efficient, but right now the health care system is perverse. It does not incentivize those things that actually make people better or keeps them out of hospitals in the first place, and that's what we have to change overall to make sure that the resources are there for your son. Okay? (Applause.)

It's a gentleman's turn, and I'm going to call on that gentleman right there -- right there.

Q My name is Randy --

THE PRESIDENT: Hold on, Randy. There you go.

Q Okay. My name is Randy, I'm from Ekalaka, Montana. And as you can see, I'm a proud NRA member. (Applause.) I believe in our Constitution, and it's a very important thing. I also get my news from the cable networks because I don't like the spin that comes from them other places.

THE PRESIDENT: Oh, you got to be -- you got to be careful about them cable networks, though. (Laughter.) But that's okay, go ahead, go on with your question.

Q Max Baucus, our senator, has been locked up in a dark room there for months now trying to come up with some money to pay for these programs. And we keep getting the bull. That's all we get, is bull. You can't tell us how you're going to pay for this. You're saving here, you're saving over there, you're going to take a little money here, you're going to take a little money there. But you have no money. The only way you're going to get that money is to raise our taxes. You said you wouldn't. (Applause.) Max Baucus says he doesn't want to put a bill out that will. But that's the only way you can do that.

THE PRESIDENT: Well, let -- I'm happy to answer the question.

Q Thank you.

THE PRESIDENT: Look, you are absolutely right that I can't cover another 46 million people for free. You're right. I can't do that. So we're going to have to find some resources. If people who don't have health insurance are going to get some help, then we're going to have to find money from somewhere.

Now, what I've identified, and most of the committees have identified and agreed to, including Max Baucus's committee, is that there -- overall this bill will cost -- let's say it costs $800 billion to $900 billion. That's a lot of money. That's a lot of money. That's over 10 years, though, all right? So that's about $90 billion -- $80 billion to $90 billion a year.

About two-thirds of it -- two-thirds -- can be obtained by doing some of the things I already mentioned, like eliminating subsidies to insurance companies. So you're right, that's real money. I just think I would rather be giving that money to the young lady here who doesn't have health insurance and giving her some help, than giving it to insurance companies that are making record profits. (Applause.) Now, you may disagree. I just think that's a good way to spend our money.

But your point is well taken, because even after we spend -- even after we eliminate some of the waste and we've gotten those savings from within the health care system, that's only two-thirds. That still means we've got to come up with one-third. And that's about $30 billion a year that we've got to come up with. Now, keep in mind the numbers change, partly because there are five different bills right now. This is all going to get merged in September. But let's assume it costs about $30 billion a year over 10 years. We do have to come up with that money.

When I was campaigning, I made a promise that I would not raise your taxes if you made $250,000 a year or less. That's what I said. But I said that for people like myself, who make more than that, there's nothing wrong with me paying a little bit more in order to help people who've got a little bit less. That was my commitment. (Applause.)

So what I've said is -- so what I've said is let's, for example, just -- this is the solution that I originally proposed; some members in Congress disagree, but we're still working it through -- what I've said is we could lower the itemized deductions that I can take on my income tax returns every year so that instead of me getting 36 percent, 35 percent deductions, I'll just get 28 percent, like people who make less money than me.

If I'm writing a check to my local church, I don't know why Uncle Sam should be giving me a bigger tax break than the person who makes less money than me, because that donation means just as much. (Applause.) If we just did that alone -- just that change alone, for people making more than $250,000, that alone would pay for the health care we're talking about. (Applause.)

So my point is -- my point is, number one, two-thirds of the money we can obtain just from eliminating waste and inefficiencies. And the Congressional Budget Office has agreed with that; this is not something I'm just making up; Republicans don't dispute it. And then the other third we would have to find additional revenue, but it wouldn't come on the backs of the middle class.

Now, let me just make one final point. I know that there are some people who say, I don't care how much money somebody makes; they shouldn't have to pay higher taxes. And I respect that opinion. I respect that view. But the truth of the matter is, is that we've got to get over this notion that somehow we can have something for nothing, because that's part of how we got into the deficits and the debt that we're in, in the first place. (Applause.)

When the previous administration passed the prescription drug bill, that was something that a lot of seniors needed, right? They needed prescription drug help. The price tag on that was hundreds of billions of dollars. You know how we paid for it? We didn't. It just got added on to the deficit and the debt.

So it amuses me sometimes when I hear some of the opponents of health care reform on the other side of the aisle or on these cable shows yelling about how we can't afford this, when Max and I are actually proposing to pay for it, and they passed something that they didn't pay for at all and left for future generations to have to pay in terms of debt. That doesn't make sense to me. (Applause.)

All right, can I say this, though? Randy, I appreciate your question, the respectful way you asked it, and by the way, I believe in the Constitution, too. So thank you very much. Appreciate it. (Applause.)

All right, right there in the green in the back there. Yes, that's you.

Q Okay, so when funding dried up last fall due to the economic downturn, I lost my job at a non-profit helping struggling teens. And I'd like to thank you because -- because of your stimulus funding to community health clinics, I now have a new job helping people who are -- (applause) --

THE PRESIDENT: That's great.

Q -- mostly uninsured people with mental health. I'm a therapist.

THE PRESIDENT: That's great.

Q So I wanted to thank you for that. But there was a gap in there where I lost my insurance in between losing my job at the non-profit and my current job. And I'd like to ask you how you will help people with that gap when they're unemployed.

THE PRESIDENT: Well, first of all, the recovery package, the stimulus helped people precisely with that gap when we said we'll cover 65 percent of the cost of COBRA. How many people here have been on COBRA or tried to get on COBRA? All right, so just for those of you who aren't familiar with it, if you lose your job, under federal law you're able to access something called COBRA which allows you to pay the premiums for the health care insurance that you had until you find your next job. Sounds like a good deal.

Here's the only problem, as I said before, most of us don't realize how much our insurance costs our employers because we're not seeing the actual bill that's being paid mostly by our employers. So when we lose a job, suddenly we get this bill for a thousand dollars or $1,200 or $1,500 a month, and that's absolutely the worst time for you to have to come up with that money, is when you've lost your job.

So what we did was, let's -- we said because this is such a extraordinary crisis, let's pick up 65 percent of that temporarily so that the huge numbers of people who've lost their jobs because of this financial downturn, they get a little bit more of a cushion.

Now, that was the initial help that we wanted to do to provide that bridge. When we pass health reform, you are going to be in a position where, first of all, you will be able to have selected a plan that you can carry with you whether you've lost your job or not, and depending on your income levels, you will also be qualified for a tax credit that will help you pay and continue your coverage even if you've lost your job.

And for a lot of people -- this is especially important for a lot of people who are self-employed because increasingly, you know, if you're a consultant, you're somebody who's opened up your own shop, a little mom and pop store somewhere, you are the people who have the toughest time getting insurance because you just don't have enough employees for the insurance companies to take you seriously.

That's why what we want to do is create an exchange -- it's like a marketplace -- where you can go and choose from a menu of different options, different kinds of plans that you think might be right for you. And one of the options that's being debated is, should there be a public option, all right? (Applause.) And I want to -- I want to just explain this briefly, because this is where the whole myth of a government takeover of health care comes from. And not everybody -- not even every Democrat -- agrees on the public option, but I just want at least people to be informed about what the debate is about.

The idea is, if you go to that marketplace and you're choosing from a bunch of different options, should one of the options be a government-run plan that still charges you premiums? You still have to pay for it just like private insurance, but government would not -- this government option would not have the same profit motive. It would be obviously like a non-for-profit. It would have potentially lower overhead, so it might be able to give you a better deal, should you be able to choose from that option among many others. That's what the debate is about. (Applause.)

Now, what the opponents of a public option will argue is, you can't have a level playing field; if government gets into the business of providing health insurance, they will drive private insurers out of the health insurance market. That's the argument that's made. (Applause.) And I -- that is a legitimate, it's a fair concern, especially if the public option was being subsidized by taxpayers, right? I mean, if they didn't -- if they could just keep on losing money and still stay in business, after a while they would run everybody else out. And that's why any discussion of a public option has said that it's got to pay for itself, it's not subsidized by private insurers.

The only point I want to make about this is whether you're for or against a public option, just understand that the public option is not a government takeover of health insurance. Everybody here who still has -- who has currently private insurance, you would more than likely still be on your private insurance plan. Employers wouldn't stop suddenly providing health insurance. So that is where this idea of government-run health care came from. It is not an accurate portrayal of the debate that's going on in Washington right now. All right?

It's a gentleman's turn. This gentleman right there, sitting -- right there, yes. Yes, sir.

Q Thank you. Given your comments regarding the public option, I would like, if you could, to comment on the following -- and also welcome, and thank you. And I believe in reform as well. I've learned that Medicare pays about 94 percent of hospital cost. And I've learned that Medicaid pays about 84 percent of hospital cost. And I've learned this from a reputable source, my brother who is a chief administrative officer at a large hospital group. He also explains to me, when I communicate with him, that private insurers -- his hospital collects about 135 percent of cost from private insurers, and that makes up the difference. So if public option is out there, will it pay for its way, or will be under-funded like Medicare and Medicaid? Thank you.

THE PRESIDENT: It's a great question, and I'll try to be succinct on this. This is a complicated area. Anybody who has ever gotten a bill from a hospital knows it's a complicated area. But here's the short answer. I believe that Medicare should -- Medicare and Medicaid should not be obtaining savings just by squeezing providers.

Now, in some cases, we should change the delivery system, so that providers have a better incentive to provide smarter care. Right? So that they're treating the illness instead of just how many tests are done, or how many MRIs are done, or what have you -- let's pay for are you curing the patient. But that's different from simply saying, you know what, we need to save some money, so let's cut payments to doctors by 10 percent and see how that works out. Because that's where you do end up having the effect that you're talking about. If they're only collecting 80 cents on the dollar, they've got to make that up somewhere, and they end up getting it from people who have private insurance.

This is true, also, by the way, of emergency room care. Each of us spend -- even though we don't know it; our employer pays for it so we don't notice it on our tab -- each of us spend about a thousand dollars per family, maybe $900 per family, paying for uncompensated care -- people without health insurance going in, getting fixed up. That money comes from somewhere -- well, it comes from you. You just don't see it on your bill.

And so if we can help provide coverage to people so that they're getting regular primary care and they're not going to the emergency room, we will obtain some savings and that's partly -- going to Randy's earlier question -- that's partly how we'll end up paying for giving people health insurance -- because we're already paying for it right now, we just don't notice it. (Applause.) We are paying for it in uncompensated care that is subsidized by the rest of us who have health insurance.

All right. I think this is the signal that I only have a few more questions. I'm going to take two more questions. If I'm in Montana, I got to call on somebody with a cowboy hat. (Laughter.) Absolutely. You've got a little plaque on there -- is it the --

Q Montana Ambassadors. We're a business advisory group appointed by the governor. We've served three Republican and two Democratic governors, and I'd like to welcome you on behalf of the Montana Ambassadors to Montana.

THE PRESIDENT: Thank you so much. Well, you make a great ambassador. (Applause.)

Q Thank you.

THE PRESIDENT: Absolutely.

Q My question -- and I'm glad you called on me -- it has to do with the COBRA question -- because I'm in the building materials business; I own a lumberyard in a beautiful little town of a thousand people about 40 miles southwest of here, Ennis. And I was -- when the economy took a nosedive, I was forced to take my workforce from 11 people to six. And I want to -- like most employers in America, I want to, you know, provide -- I think it's my responsibility to provide health insurance; you know, we like to take care of our peeps, so to speak. (Laughter.) And so I went on --

THE PRESIDENT: Is that a Montana phrase, "peeps"? (Laughter.)

Q And so I went searching for replacement coverage for the employees that have been laid off, only to find out that COBRA doesn't apply to me because I have less than 20 employees. And that conservatively affects 80 percent of all workers in Montana.

So they were pretty much out on their own, and I was wondering if -- what we can do to eliminate discrimination against small employers. As an example, we're a lumberyard. We're out there lifting boards and packing stuff all day long. Every one of my remaining seven employees are fit. So why are we, and I as an employer, able to provide a lesser level of benefits to my employees, and yet an employer with 30 employees who sit in cubicles on their butts instead of working them off -- (laughter) -- gets a better rate? (Applause.)

THE PRESIDENT: Well, that's a pretty good question. So for all of you who are all sitting on your -- what did you call them? (Laughter.) No, as I said, small business is probably as vulnerable as anybody. And one of the things that Max has been working very hard on -- and this just doesn't get advertised, so I just want to make sure everybody is paying attention here -- one of the things that we're trying to do is give a substantial subsidy to help small businesses allow their employees to get health insurance, because there are a lot of employers just like you who want to do the right thing, but they're a small shop, they're operating on small margins, they've got no leverage with the insurance companies.

So there are two ways we want to help. Number one, we want the small business to be able to buy into the exchange. That allows you then to use the purchasing power of everybody who is in the exchange to get the best rates from the insurance companies. That right away would drive down the premiums that you'd have to pay.

And the second thing we want to do is for employers who are doing the right thing and providing health insurance that is real, then we want to give you a tax break so that it's easier for you to make your bottom line.

Now, this is something that a lot of small businesses would benefit from. Nobody is talking about it. And since small businesses are the place where you're seeing the fastest job growth, it makes sense for us to provide this kind of protection. This, I guarantee you, will end up being an important component of whatever we pass out of Washington. All right? (Applause.)

I've only got time for one more question, and it's a guy's turn, and I want somebody who's got a concern or is skeptical about health care reform. Here we go, there we go. I knew we could find a couple here. So I'll call on this gentleman right here in the pale blue shirt -- and hopefully that list is not too long. All right, go ahead. Introduce yourself, though.

Q My name is Mark Montgomery. I'm from Helena, Montana.

THE PRESIDENT: Great to see you, Mark.

Q I appreciate you coming here. It's great to be able to do this.

THE PRESIDENT: Thank you.

Q Mr. President, I make a living selling individual health insurance. (Laughter.) Obviously I've paid very close attention to this insurance debate. As you know, the health insurance companies are in favor of health care reform and have a number of very good proposals before Congress to work with government to provide insurance for the uninsured and cover individuals with preexisting conditions. Why is it that you've changed your strategy from talking about health care reform to health insurance reform and decided to vilify the insurance companies? (Applause.)

THE PRESIDENT: Okay, that's a fair question, that's a fair question. First of all, you are absolutely right that the insurance companies, in some cases, have been constructive. So I'll give you a particular example. Aetna has been trying to work with us in dealing with some of this preexisting conditions stuff. And that's absolutely true. And there are other companies who have done the same.

Now, I want to just be honest with you, and I think Max will testify, that in some cases what we've seen is also funding in opposition by some other insurance companies to any kind of reform proposals. So my intent is not to vilify insurance companies. If I was vilifying them, what we would be doing would be to say that private insurance has no place in the health care market, and some people believe that. I don't believe that. (Applause.) What I've said is let's work with the existing system. We've got private insurers out there. But what we do have to make sure of is that certain practices that are very tough on people, that those practices change.

Now, one point I want to make about insurance: Some of the reforms that we want for the insurance market are very hard to achieve, unless we've got everybody covered. This is the reason the insurance companies are willing to support reform, because their attitude is if we can't exclude people for preexisting conditions, for example, if we can't cherry pick the healthy folks from the not-so-healthy folks, well, that means that we're taking on more people with more expensive care. What's in it for us? The answer is if they've got more customers, then they're willing to make sure that they are eliminating some of these practices. If they've got fewer customers, they're less willing to do it.

So it's important for people -- when people ask me sometimes, why don't you just do the insurance reform stuff and not expand coverage for more people, my answer is I can't do the insurance reform stuff by itself. The only way that we can change some of the insurance practices that are hurting people now is to make sure that everybody is covered and everybody has got a stake in it, and then the insurance companies are able and willing to make some of these changes that will help people who have insurance right now. But thank you for the question. I appreciate it. (Applause.)

All right. I'm going to -- even though I shouldn't do this, I'm going to take one more question. My team always -- and I'm going to call on this person right here to get the last word.

Q Thank you.

THE PRESIDENT: Go ahead.

Q Thank you, Mr. President, and thank you for coming to Bozeman and bringing your beautiful family to the last best place in the world. (Applause.)

Because you're a constitutional scholar, I think it would be terrible to let you escape from Montana without sharing with you the most perfect preamble to a constitution of any state constitution.

THE PRESIDENT: Oh, okay. Well, I'd like to -- I want to hear this. This is a good way to end our town hall.

Q It is. "We the people of Montana, grateful to God for the quiet beauty of our state, the grandeur of our mountains, the vastness of our rolling plains, and desiring to improve the quality of life, the quality of opportunity and to secure the blessings of liberty for this and future generations do ordain and establish this constitution." I hope you take a look at the whole constitution. You'll like it. Thank you.

THE PRESIDENT: Well, that's very nice. Well, thank you. Listen, Montana, you've been terrific. I hope this has been informative. Thank you for the questions. Let's get to work. Thank you. (Applause.)

END
1:07 P.M. MDT

10:17 A.M. EDT

THE PRESIDENT: Good morning, everybody, and welcome to the White House. I am glad all of you could be with us today as we honor the newest member of our highest Court who I'm proud to address, for the very first time, as Justice Sonia Sotomayor. (Applause.)

We are also honored to be joined by Justice Sotomayor's new colleagues. We have Justice Ginsburg who is here -- (applause) -- as well as Justice Stevens. So I just want to thank both Justice Stevens and Justice Ginsburg not only for being here today, but for your extraordinary service on the Court. And I know you'll be giving Justice Sotomayor some good tips. (Laughter.)

I also want to thank everyone who's worked so hard to bring us to this day. I want to thank especially our Judiciary Committee Chairman, Senator Patrick Leahy -- (applause) -- as well as our Senate Majority Leader, Senator Reid -- (applause) -- for their outstanding work to complete this process before the August recess.

I want to thank Senator Schumer and Senator Gillibrand, both of whom are Justice Sotomayor's home-state senators, for their extraordinary work on her behalf. I want to thank all the members of Congress who've taken the time to join us here at the White House event. And I want to acknowledge all the advocates and groups who organized and mobilized and supported these efforts from the very beginning. Your work was absolutely critical to our success, and I appreciate all that you've done. So pat yourselves on the back. Congratulations. (Applause.)

Two members of Congress that I just especially want to acknowledge -- Senator Bob Menendez, who worked so hard on the Senate side. (Applause.) And Congresswoman Nydia Velazquez, who is our chair of the Congressional Hispanic Caucus. (Applause.)

And I think we all want to take a moment to recognize the woman who, in so many ways, truly made this day possible -- Justice Sotomayor's mother, Celina Sotomayor. (Applause.) Mrs. Sotomayor is here with her husband, Omar; and Justice Sotomayor's brother, Juan; and other members of their family. And we're thrilled that they could join us here today.

And by the way -- I don't normally do this, but let me also just thank my extraordinary White House staff who helped to usher this stuff through. We're very proud of them. (Applause.) Thank you very much.

Of course, we're here not just to celebrate our extraordinary new Supreme Court justice and all those who've been a part of her journey to this day. We're here, as well, to celebrate an extraordinary moment for our nation. We celebrate the impact Justice Sotomayor has already had on people across America who have been inspired by her exceptional life story. We celebrate the greatness of a country in which such a story is possible. And we celebrate how, with their overwhelming vote to confirm Justice Sotomayor, the United States Senate –- Republicans and Democrats -- tore down yet one more barrier and affirmed our belief that in America, the doors of opportunity must be open to all.

With that vote, the Senate looked beyond the old divisions and they embraced excellence. They recognized Justice Sotomayor's intellect, her integrity, and her independence of mind; her respect for the proper role of each branch of government; her fidelity to the law in each case that she hears; and her devotion to protecting our core constitutional rights and liberties.

Justice William Brennan once said that in order for government to ensure those rights for all its citizens, government officials must be attentive to the concrete human realities at stake in the decisions they make. They must understand, as Justice Brennan put it, "the pulse of life beneath the official version of events." The pulse of life beneath the official version of events.

Justice Sotomayor understands those realities because she's witnessed them firsthand as a prosecutor, a litigator, and a judge, working to uphold our laws, keep our communities safe, and give people the chance to live out their dreams -- work that she has done with devotion, with distinction, and with an unyielding commitment to give back to this country that has given her so much.

And she understands these things because she's lived these things -- because her life is one of those "only in America" stories: raised by a single mom in the South Bronx determined to give her every opportunity to succeed; propelled by the talent and hard work that would earn her scholarships and honors at the best schools in the country; driven always by the belief that it doesn't matter where you come from, or what you look like, or what challenges life throws your way -- no dream is beyond reach in the United States of America.

And with her extraordinary breadth and depth of experience, Justice Sotomayor brings to the Court both a mastery of the letter of the law and an understanding of how the law actually unfolds in our daily lives -- its impact on how we work and worship and raise our families; on whether we have the opportunities we need to live the lives we imagine.

That understanding is vital for the work of a Supreme Court justice, as Justice Stevens and Justice Ginsburg will testify -- the work of applying principles set forth at our founding to the cases and controversies of our time.

For as visionary as our founders were, they did not presume to know exactly how the times would change, what new questions fate and history would set before us. Instead, they sought to articulate ideals that would be timeless -- ideals that would accommodate the ever-changing circumstances of our lives and preserve for each new generation our most sacred rights and freedoms.

When Justice Sotomayor put her hand on that Bible and took that oath, we took yet another step towards realizing those ideals. We came yet another step closer to the more perfect union that we all seek.

Because while this is Justice Sotomayor's achievement –- the result of her ability and determination -– this moment is not just about her. It's about every child who will grow up thinking to him or herself, if Sonia Sotomayor can make it, then maybe I can, too. (Applause.) It's about every mother or father who looks at the sacrifices Justice Sotomayor's mother made, and the successes she and her brother have had, and thinks, I may not have much in my own life, but if I work hard enough, maybe my kids can have more. It's about everyone in this nation facing challenges and struggles in their lives, who hear Justice Sotomayor's story and thinks to themselves, if she could overcome so much and go so far, then why can't I?

Nearly 80 years ago, as the cornerstone was laid for the building that became our Supreme Court, Chief Justice Charles Evans Hughes declared, "The Republic endures and this is the symbol of its faith."

Justice Sotomayor's rise from humble beginnings to the height of achievement is yet another symbol of that faith -- faith that the American Dream still endures; faith that "equal justice under the law" is not just an inscription in marble, but an animating ideal of our democracy; faith that in this great nation, all things are still possible for all people.

This is a great day for America, and I know that all of us here are proud and honored to have been a part of it.

And so, with that, I would like to introduce the newest member of the United States Supreme Court, Justice Sonia Sotomayor. (Applause.)

JUSTICE SOTOMAYOR: No words can adequately express what I am feeling. No speech can fully capture my joy in this moment. Nothing can convey the depth of gratitude I feel to the countless family members, starting with Mom and my brother, and the many friends and colleagues -- so many of you who are here with me today, and the others who aren't -- who have helped me to reach this moment. None of this would have happened without all of you.

Mr. President, I have the most heartfelt appreciation for the trust that you've placed in me by nominating me. And I want to convey my thanks to the Judiciary Committee, led by Chairperson Leahy, for conducting a respectful and timely hearing, and to all members of the Senate for approving the President's selection. I am so grateful to all of you for this extraordinary opportunity.

I am most grateful to this country. I stand here today knowing that my confirmation as an Associate Justice of the Supreme Court would never have been possible without the opportunities presented to me by this nation. More than two centuries ago, in a Constitution that contains fewer than 5,000 words, our founders set forth their vision for this new land. Their self-proclaimed task was to form a more perfect union, to establish justice, and to secure the blessings of liberty for themselves and their posterity. Over the years, the ideals at the heart of that document have endured, as subsequent generations have expanded those blessings, these rights and freedoms to more and more Americans.

Our Constitution has survived domestic and international tumult, including a civil war, two world wars, and the catastrophe of September 11th. It draws together people of all races, faiths, and backgrounds from all across this country who carry its words and values in our heart. It is this nation's faith in a more perfect union that allows a Puerto Rican girl from the Bronx to stand here now. (Applause.)

I am struck again today by the wonder of my own life, and the life we in America are so privileged to lead. In reflecting on my life experiences, I am thinking also today of the judicial oath of office that I first took almost two decades ago, and that I reiterated this past weekend -- to judge without respect to what a person looks like, where they come from, or whether they are rich or poor, and to treat all persons as equal under the law. That is what our system of justice requires, and it is the foundation of the American people's faith in the rule of law, and it is why I am so passionate about the law.

I am deeply humbled by the sacred responsibility of upholding our laws and safeguarding the rights and freedoms set forth in our Constitution. I ask not just my family and friends, but I ask all Americans, to wish me divine guidance and wisdom in administering my new office.

I thank you all again for the love and support you have shown me. And I thank President Obama and the United States Senate for the tremendous honor and privilege they have granted me. Thank you. (Applause.)

END
10:32 A.M. EDT

1:16 P.M. EDT

THE PRESIDENT: Good afternoon, everybody. I'd like to say a few words about the state of our economy, and what we're doing to put Americans back to work and build a new foundation for growth.

Last week, we received a report on America's Gross Domestic Product -- a key measure of our economic's [sic] health -- and it showed marked improvement over the last few months. This morning, we received additional signs that the worst may be behind us. Though we lost 247,000 jobs in July, that was nearly 200,000 fewer jobs lost than in June, and far fewer than the nearly 700,000 jobs a month that we were losing at the beginning of the year.

Today we're pointed in the right direction. We're losing jobs at less than half the rate we were when I took office. We've pulled the financial system back from the brink, and a rising market is restoring value to those 401(k)s that are the foundation of a secure retirement. We've enabled families to reduce the payments on their mortgages, making their homes more affordable and reducing the number of foreclosures. We helped revive the credit markets and opened up loans for families and small businesses.

While we've rescued our economy from catastrophe, we've also begun to build a new foundation for growth. That's why we passed an unprecedented Recovery Act less than a month after I took office -- and did so without any of the earmarks or pork-barrel spending that's so common in Washington. Now, there's a lot of misinformation about the Recovery Act. So let me repeat what it is and what it is not. The plan is divided into three parts.

One-third of the money is for tax relief that's going directly to families and small businesses. For Americans struggling to pay rising bills with shrinking wages, we've kept a campaign promise to put a middle class tax cut in the pocket of 95 percent of working families -- a tax cut that began showing up in paychecks about four months ago. We also cut taxes for small businesses on the investments they make, and substantially increased loans through the Small Business Administration.

Another third of the money in the Recovery Act is for emergency relief that is helping folks who have borne the brunt of this recession. For Americans who were laid off, we expanded unemployment benefits -- a measure that's already made a difference in the lives of 12 million Americans. We're making health insurance 65 percent cheaper for families that rely on COBRA while they're looking for work. And for states facing historic budget shortfalls, we provided assistance that saved the jobs of tens of thousands of teachers and police officers and other public service workers.

So these two thirds of the Recovery Act have helped people weather the worst phase of this recession, while saving jobs and stabilizing our economy. The last third is dedicated to the vital investments that are putting people back to work today to create a stronger economy tomorrow. Part of that is the largest new investment of infrastructure in America since Eisenhower built the Interstate Highway System back in the 1950s. These are jobs rebuilding America: upgrading roads and bridges, and renovating schools and hospitals.

Now as we begin to put an end to this recession, we have to consider what comes next -- because we can't afford to return to an economy based on inflated profits and maxed out credit cards; an economy where we depend on dirty and outdated sources of energy; an economy where we're burdened by soaring health care costs that serve only the special interests. This won't create sustainable growth, it won't shrink our deficit, and it won't create jobs.

And that's why we've put an end to the status quo that got us into this crisis. We cannot turn back to the failed policies of the past, nor can we stand still. Now is the time to build a new foundation for a stronger, more productive economy that creates the jobs of the future.

And this foundation has to be supported by several pillars to our economy. We need a historic commitment to education, so that America is the most highly-educated, well-trained workforce in the world. We need health insurance reform that brings down costs, provides more security for folks who have insurance, and affordable options for those who don't. And we need to provide incentives that will create new, clean energy sources for our industries. That's where the jobs of the future are, that is the competition that will shape the 21st century, and that's a race that America must win.  So we have a lot further to go. As far as I'm concerned, we will not have a true recovery as long as we're losing jobs, and we won't rest until every American that is looking for work can find a job. I have no doubt that we can make these changes. It won't be easy, though. Change is hard -- especially in Washington. We have a steep mountain to climb, and we started in a very deep valley. But I have faith in the American people -- in their capacity for hard work and innovation, in their commitment to one another, and their courage to face adversity.

We've seen already that strength of character over the course of this recession. Across the country, people have persevered even as bills have piled up and work has been hard to come by. Everywhere I go, I meet Americans who've kept their confidence in their country and in our future. That's how we've pulled the economy back from the brink. That's why we're turning this economy around. I am convinced that we can see a light at the end of tunnel, but now we're going to have to move forward with confidence and conviction to reach the promise of a new day.

Thank you very much.

END
1:23 P.M. EDT

7:02 P.M. EDT

THE PRESIDENT: Hello, Virginia! (Applause.) Are you fired up? (Applause.) Are you ready to go? (Applause.) It is good to be in Virginia -- (applause) -- a place that has been good to me. (Applause.) First of all, it's just good to be next to a guy who spends every single day thinking about your future, thinking about your children's future and the future of this commonwealth; one of my best friends; somebody who is dedicated to the kind of public service that I so deeply believe in -- please give it up for your Governor, Tim Kaine. (Applause.)

I think some of you know that Tim was the first statewide official outside of Illinois to endorse me. (Applause.) In Richmond, Virginia. I called him up just a few weeks after I'd announced, and he was kind of new so he didn't know any better. (Laughter.) So he said, yeah, sure, I'll endorse you. (Laughter.) I think his wife, Anne, had something to do with it also. And he has stood with me ever since, on every tough battle that we've had. And so I am just grateful for him. He was there when people couldn't even pronounce my name. (Laughter.)

AUDIENCE: Obama! Obama! Obama! Obama!

THE PRESIDENT: Now, part of the reason I like being in Virginia is because there is a tradition here that has been developing, starting with your former governor and now outstanding senator, Mark Warner. (Applause.) A tradition that -- it starts off with the basic idea that we're all in this together. Mark Warner came in at a time when the fashionable politics was the nasty kind of politics, the slash-and-burn politics, the arguing and arguing without everything -- ever getting anything done kind of politics. And Mark Warner said, you know what, we can try something different. What we're going to do is we're going to be pragmatic instead of ideological. We are going to try to bring people together rather than push them apart. (Applause.) We are going to make sure that we listen to other people's ideas. We're going to bring labor and business together. (Applause.) We're going to make sure that we don't have a southern Virginia and a northern Virginia, we've got one commonwealth of Virginia. (Applause.)

And so what he was able to do was to shape a kind of politics here in the commonwealth that has resulted in one of the best-managed states in the country; a state that was able to make investments in education even as it was dealing with a fiscal crisis; a state that has now been able to navigate some of the toughest economic times that we've seen in the history of the country because of that foundation of civility and practicality and hard work.

Tim Kaine embodied that tradition. And he has now continued it during his term in office. (Applause.) That's not just a stroke of good luck here in the state of Virginia. It's because you stood up and chose that kind of politics. (Applause.) You decided to take the better way, and now you’ve got the chance to keep moving forward by electing somebody who is cut from the same cloth, somebody who has that same vision for the commonwealth -- Creigh Deeds. (Applause.)

Now, I admit I'm a little biased here. I'm a little biased. First of all, Creigh Deeds and I both have some wonderful daughters. Creigh Deeds and I both served in the state senate. I served for eight years, and he's now served for eight years. Creigh Deeds and I both have -- let's face it -- sort of funny names. (Laughter.) Still trying to figure out the spelling of Creigh. (Laughter.) But that's not the reason I'm here tonight. It's not just because of my personal bias.

This is a man who's spent his life working to do right by his family, and the last two decades working to do right by the people of Virginia. (Applause.) As a prosecutor, as a delegate, as a state senator, he has worked tirelessly to advance this commonwealth that he's loved his whole life.

He wrote Megan's Law, advocated for the Amber Alert program to protect our children. (Applause.) He's worked to preserve open space and protect the environment. (Applause.) When Virginia faced that financial crisis a few years back, he was on Mark Warner's team up to make sure that you reformed the budget and controlled spending. And even in the face of that crisis, record investments in education, laying a foundation for Virginia's growth.

Creigh will continue the progress that has been made in this great commonwealth. He will continue to make that progress -- especially when it comes to education. You heard the commitment to education that he made today. (Applause.) And I know he will follow through because that's been the key to our lives. Growing up, neither one of us had much. But we had mothers who loved us, and pushed us; who instilled a belief that education was the best shot that we were going to have at life. (Applause.) We are living proof that education is the single best investment we can make in our future and our children's future. And the people of Virginia understand that. (Applause.)

That's why he's going to invest in pre-kindergarten programs, and support our teachers, and expand access to higher education -- he knows the smartest workforce is going to attract the best jobs. (Applause.) And I want to partner with Creigh Deeds because we're going to make some commitments at the national level. I've already made sure that we strengthen and improve our education system from the cradle to graduation; from college through career -- so that by 2020, America will once again have the highest proportion of college graduates in the world. (Applause.) And we're going to have them right here in Virginia.

Smart decisions. Sound investments. A civility to our politics. That's why Virginia has become the nation's number-one state to do business in. That's why Virginia is going to come out of the other side of this recession stronger and better-prepared than before -- because of the forward-thinking leadership of Mark Warner and Tim Kaine and Creigh Deeds. (Applause.)

Now, we have to be honest, though. Even though Virginia is weathering this recession, this storm, better than most states -- primarily because of this Democratic leadership -- I know that too many families in Virginia are still hurting. Unemployment is still over 7 percent. Folks here are still losing their homes or being crushed by health premiums that have doubled over the past nine years. But without the steps we've taken, our troubled economy and the pain it's inflicting on Virginia's families would be a lot worse. (Applause.)

I'm always amused when I hear some folks, some critics, start talking about, well, look at the mess that the economy is in. (Laughter.) They seem to have some selective memory. (Applause.) It didn’t just happen somehow. (Laughter.) When my administration took office about six months ago, we faced the worst recession since the Great Depression. We were losing an average of 700,000 jobs a month. It was nearly impossible to take out a home loan, or a car loan, or a student loan, or loans for small business to make payroll and keep the doors open. And economists all across the ideological spectrum, left and right, were saying we might be tipping over into a Great Depression.

At the time, there were some who thought that doing nothing was an option. Remember that?

AUDIENCE: Yes!

THE PRESIDENT: I disagreed. I thought we had to act -- boldly and firmly. (Applause.) And so we took steps to arrest our housing crisis and avert the collapse of our financial system. Less than one month after taking office, we enacted the most sweeping recovery package in history -- and, by the way, we did it without earmarks and the pork-barrel projects that the previous administration had loaded up with. (Applause.)

Now, there's been a lot of misinformation out there about the recovery plan. I hope you don't mind, Virginia, I just want to set the record straight. (Applause.) This is very simple stuff here. The Recovery Act is made up of three parts. The first part, about one-third of the Recovery Act is a middle-class tax cut for 95 percent of working Americans -- (applause) -- a tax cut. And by the way, that's exactly what I promised you when I was running for President of the United States. (Applause.)

So when you hear the naysayers and the critics saying this plan isn't money well-spent, just remember one-third of it is going right into your pockets. (Applause.) That seems like well-spent money to me. (Applause.)

Another third -- all right, so one-third tax cuts. Sometimes I see folks outside with signs, don't raise my taxes. I haven’t raised your taxes. (Laughter.) I've lowered your taxes. That's point number one.

Another third was relief for people and states who had fallen on hard times because of the economic crisis. So we expanded unemployment benefits to help folks who had lost their jobs and we're looking for work. (Applause.) That's made a difference for about 150,000 Virginians. We made health insurance cheaper for families who rely on COBRA after they've lost a job and they're out there looking for a job. We made it 65 percent cheaper. (Applause.) That's you right there. That's you right there.

I've got some testimony. I've got an "Amen" corner right here. (Applause.)

We helped states facing historic budget shortfalls, which prevented layoffs and protected essential services. In Virginia, that means 13,000 folks who are still working in our schools, more than 300 deputy sheriffs who are still keeping communities safe, state colleges and universities like the UVA and Virginia Tech that haven't had to raise tuition -- (applause) -- because of the recovery package. (Applause.)

So I just want to know -- these critics, I want to make sure, are they opposed to the tax cuts that went into your pockets? Are they opposed to making sure that we're not cutting back on vital services and giving states some relief? That's two-thirds of the Recovery Act.

Now, the last third is making the vital investments that are putting people back to work today to create a stronger economy tomorrow -- (applause) -- the largest new investment of infrastructure in America since Eisenhower built the Interstate Highway System back in the 1950s. Around here, that means upgrading the Lake Barton Dam, improving the Fairfax County Parkway, building new roads across Northern Virginia to ease congestion and make your lives a little better. (Applause.)

So step by step, we are moving forward. The American people understand the recession was years in the making. It didn’t just start last month. That bank crisis didn’t happen on my watch. (Applause.) Let's get the history straight. (Applause.)

AUDIENCE: Obama! Obama! Obama!

THE PRESIDENT: And then we start getting into the whole issue of spending. Now, let me tell you, Virginia has a history of prudent fiscal policy. That's what Tim Kaine has been about, and that's what Mark Warner has been about, and that's what Creigh Deeds is going to be about. (Applause.)

So now you've got folks on the other side of the aisle pointing at the federal budget and somehow trying to put that at our feet. Well, let's look at the history. When I walked in, we had a $1.3 trillion deficit. That was gift-wrapped and waiting for me when I walked in the Oval Office. (Laughter.) Without my policies we'd have an even higher deficit going forward. The one exception is the recovery package that we had to do in order to get this economy moving again. (Applause.)

So you can't go out there and charge up the credit card, go on an all kinds of things shopping spree that didn’t grow the economy, hand over the bill to us, and then say, why haven’t you paid it off yet. (Applause.) I got that bill from you. (Laughter.) So we've got some work to do. I don't mind, by the way, being responsible; I expect to be held responsible for these issues because I'm the President. (Applause.) But I don't want the folks who created the mess -- I don't want the folks who created the mess do a lot of talking. I want them just to get out of the way so we can clean up the mess. (Applause.) I don't mind cleaning up after them, but don't do a lot of talking. (Applause.)

Am I wrong, Virginia?

AUDIENCE: No!

THE PRESIDENT: So I'm convinced that the actions we've taken in the first six months have helped stop our economic freefall. (Applause.) We're losing jobs at half the rate we were at the beginning of this year. Our financial system is no longer on the verge of collapse. The market is up. Housing prices are up for the first time in nearly three years. We may just be seeing the very beginnings of the end of this recession.

But if we're going to move from recovery to prosperity, we need to rebuild our economy stronger than before. Because even before this crisis hit, we had an economy that was failing to create the kinds of good jobs with rising incomes for middle class families that is the bedrock of America. There was a lot of money being made at the very top, but it wasn’t an economy that was built to compete in the 21st century -- one where we spend more on health care than any nation but aren't any healthier. That's not sensible. Where we've been slow to invest in clean energy technologies that have created new jobs and new industries in other countries; where we watched our graduation rates lag behind too much of the world. That's not a recipe for success.

That's why, even as we work to rescue our economy from this crisis, we're now laying the new foundation for the country to thrive in the 21st century. (Applause.) We are going to prepare every child, everywhere in America, to compete and win with a world-class education. We're going to invest in the clean energy jobs of the future and train our workers for those jobs. We're going to finally protect consumers and bring down the health care costs that are driving this nation into debt. We're going to pass reform to ensure that a health care system doesn't just work for insurance companies, but for all the people of Virginia and all the people of the United States. (Applause.)

AUDIENCE: Yes we can! Yes we can! Yes we can!

THE PRESIDENT: Yes we can.

There are those out there who want us to go down the same old path -- the path where we just throw up our hands and say, "We can't do anything about education. It's too hard. We can't do anything about health care -- it's too tough." A path where our children fall behind, our workers lose out, they watch jobs being shipped overseas; our health care costs keep rising, our oil dependency keeps on growing. All we do is just then bicker and point fingers.

Well, that's not the future I accept for the United States of America. That's not the future that Creigh Deeds accepts for the future of Virginia. (Applause.) That's not what you want for your children and your grandchildren. We're setting a new course for this nation. It's the one that Mark Warner and Tim Kaine and Creigh Deeds have already begun blazing right here in Virginia.

They know that leadership is more than just about managing crises. It's about making smart decisions for the future, even in the toughest times. That's what Creigh Deeds will do. And that's why every single one of you is going to have to do the work to put him into office, to carry on that tradition of leadership, to bring about a brighter future for generations of Virginians. (Applause.)

We did not come this far by lowering our sights or scaling back our dreams. That's not the American way. It's not about looking backwards, it's about looking forward. (Applause.) We didn't become the greatest nation on Earth because we just stood still in the face of great challenges, shrugged our shoulders, and said "no, we can't." We are Americans. We're a forward-looking people. We stare down challenges. We've always faced the future not with fear, but with determination; not with doubt, but with hope. We've always taken great chances and reached for new horizons, and remade the world around us. (Applause.)

Last year, Virginia, you helped lead a movement of Americans who believed that their voices could make a difference -- (applause) -- a movement of young and old, rich and poor, Democrat and Republican, black, white, Latino, Asian, Native American, gay, straight, disabled, not disabled -- everybody was involved. (Applause.) It didn’t come from Washington -- it came from the bottom up. (Applause.) That's what we need to do in this race. That's what Creigh Deeds is committed to. That's what this election is all about. (Applause.)

I need every one of you to knock on doors and make phone calls, and get fired up once again so that we can go towards the future, confident with Creigh Deeds leading the great commonwealth of Virginia.

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

END
7:26 P.M. EDT