THE VICE PRESIDENT:  Thank you very much, Mr. Secretary.  (Applause.)  Gov, as the old saying goes, you've forgotten more about New York than I'm going to know, although I lived awhile in Upstate New York.  I went to Syracuse University.  But I can tell you if there's one group of people who are not intimidated by "nobody messes with Joe," it's New Yorkers.  (Laughter.)

I want to thank you, Mr. Secretary.  And I want to thank the business leaders that have joined us here today with first-hand knowledge of how our economy, our policies -- and how it's affecting them, what impact it's having on the areas they're involved in.  And I want to thank all of you for joining us.  Mr. President, thanks for the hospitality.  And the students that are here -- welcome, I'm delighted you're able to be here, as well as the Dean, who -- as of the business school, is very interested in what we're about to do.

And, look, we came into office a few months ago, and the economic climate I think is fair to say was somewhat bleak.  This is the deepest recession we've faced since the Great Depression, and it was getting deeper every day:  cases of credit -- crisis in credit, as well as the crisis in confidence in the imploding housing market; job losses that have been averaging about 600,000 or more jobs a month; a feeling of general uncertainty, and a sinking feeling for average families all over America, all across this country from big cities to small rural areas.  So we acted.  And quite frankly, we had no choice -- no choice but to act.

We confronted this crisis head on, and we did it by implementing a comprehensive strategy to stabilize the key sectors that are behind the down turn, while investing deeply in trying to jump start jobs and investments, particularly -- not only in big cities, but also in rural America, in small towns. 

And our strategy rested upon a few very important pillars, Gov.  The first was a financial rescue plan to get banks back on sound footing so they can start lending again.  That's a process.  It's been a difficult process, but it's beginning to have an effect.  And the plan was to stabilize the housing market, which isn't -- we still have foreclosures.  We know there are going to be more foreclosures.  But we're trying to keep responsible homeowners in their homes, and keeping mortgages affordable for middle-class people and first-time homebuyers -- as we're going to hear a little bit from Joe.

The budget we submitted seeks to create a widespread, long-term, long-lasting prosperity; making historic investments in health care, alternative energy, and education while cutting the deficit in half.  How many of you have said, or heard people say, hey, Obama-Biden, why don't you just focus on getting us out of this recovery -- I mean, getting us out of the economic mess we're in?

Well, folks, tell me how we're going to lead the 21st century without a fundamental change in our energy policy?  Tell me how we're going to do it with costs of premiums of health care escalating 54 percent over the last seven years without gaining control of that?  Tell me how we're going to do it without revamping American education?  We don't have a choice in our view.  That's why we submitted the robust budget we submitted.  And, of course, we also came forward with what we're going to talk about today, the American Recovery and Reinvestment Act, an initial big jolt to give the economy a real head start.

But some criticism -- we've not gotten enough money out so far.  Well, look, since I was the guy put in charge of it, I want to make sure these first hundred days we do it right.  The one thing that could undermine this whole effort is if you had read stories the last hundred days about how this money was being wasted and the tens of billions of dollars.

And you're going to see things start to really change in the second hundred days -- got a $126 billion out.  It's now going to take the governors and the county executives and the mayors a little bit of time.  Why?  Particularly, infrastructure stuff -- they're letting in contracts.  Those contracts are now going to come back in.  People are starting.  We don't start to pay them until they start to -- until they actually get things going here.

You're going to see the next hundred days with some real pace on the ball, no pun intended.  You're going to see this thing begin to move.  And at least one, in the Recovery Act, is, as I said, the pillar we want to focus on today.  The act created -- was created to serve three specific purposes.  The first and fundamental purpose was -- kind of goes unnoticed, but has a difficult -- the impact is difficult to measure with precision, but it was to provide badly needed relief to individual families who are devastated by this recession.

As the Deputy Secretary mentioned, our Making Work Pay program gives 95 percent in America an $800 tax break.  They're getting somewhere between around $60 a month more on their paycheck, less withholding.  Now, with a lot of people that's not a lot of money.  But guess what.  Neighborhoods I come from, that makes the difference for people. 

We're also out there not only trying to help with their family budgets, we're helping those that lost their job during this down turn by dramatically, as the Governor can tell you, expanding unemployment insurance program, increasing the actual benefit by $100, expanding eligibility; also, improving COBRA.  That's the deal.  You all know what COBRA is, but the average American may not be aware of all these acronyms.  It means being able to, when you’ve lost your job, keep your insurance.

We've been doing that so that they can keep their health care insurance, and so while families are unemployed, they're still able, at a reduced cost, to keep that insurance; and to provide for retirees.  Retirees are getting slammed.  They're particularly vulnerable during the recession, and we provided an extra payment of $250 to Social Security recipients and to veterans to help them weather this economic crisis.

But guess what that means.  That's a lot of money out there.  That's hundreds of billions of dollars over the period of this act.  That means they're going in and they're buying their groceries; they're buying shoes; they're getting their hair cut; they're actually doing things that put all that money back into the economy while helping themselves.

The second fundamental goal of the act was to give a boost to the struggling states.  And, by the way, states have been hit by this worldwide recession.  They've been hit very badly.  They don't have the options the federal government has in this down turn.  Twenty-three states including New York, plus Puerto Rico, have qualified for education stabilization funds to help the states meet education costs and give them budget relief. 

You don't have to look too far to see the impact, because the Recovery Act impact right here in the city of New York was able to keep 14,000 New York public school teachers who otherwise would have lost their jobs on the payroll.  Now, that's not just helping them keep their job.  I don't know what the numbers are -- the school could probably tell me -- but the numbers are real.  That means class size is not increasing by 10, or 20, or 30 percent; whatever the number is relative to the number of teachers that would have been lost.  It's a big deal.

States also are benefiting from an increase in Medicaid funding, and that's the public health insurance, as you all know.  But a lot of people who are on Medicaid are not sure what it is, particularly young people.  It's for low-income families, which is even more necessary in hard times.  It's billions of dollars.  To date, the states have received $18.8 billion to help up to 20 million more Americans get coverage that they now qualify for -- because they are poor, because they're in trouble -- to keep the health care that is absolutely necessary for them.      

And the third goal of this Recovery Act is to make a major investment in projects that are going to create jobs that are going to build a foundation, a foundation for the 21st century.  How many times have you heard the President say, and I think it's true -- and I'm here with a bunch of very sophisticated business people -- this next growth in our economy can't be built on another bubble.  We've been through two of those bubbles, the dot come bubble and the housing bubble.  We cannot lead the world in the 21st century unless we build a new foundation to be able to compete.  And so this will not do it, but this makes down payments.  

As Secretary Wolin said, there's $4.5 billion in tax benefits for businesses leveraged to produce jobs.  Already state and local governments have issued over $10 billion in bonds to fix schools, roads, and transit facilities.  The SBA has made $600 million in loans so far, in the first hundred days. 

And here's the important part -- that's not a lot of money, but of those $600 million in loans, there are over 600 small-town banks who hadn't made a loan since 2007 or 2008 that are making a loan.  It makes a difference in towns where First Federal of Maquoketa, Iowa, is actually making a loan to be able to keep that local restaurant open; actually make a loan to keep that dress shop around.  This is a big deal in a lot of places.  And it's loosening -- loosening credit, because we're guaranteeing up to 90 percent some of those loans

In addition, we've approved more than -- approved so far, signed off on more than 3,800 highways, roads, bridges, airport constructions, and repair projects in 53 different states.  You don't see that -- the effect of that yet.  That's the stuff that's being contracted out.  The governor is going to have people out there laying this asphalt, pouring this concrete.

I was up in northern Wisconsin at a bus factory.  An awful lot of folks out there are taking their local money and the state money, and they're buying new buses or clean technology, because we're focusing on it.  It's employing an awful lot of people at a living wage, a wage they can live a middle-class life on.  This has a ripple effect throughout the country.

This isn't just about smoother pavement and new bridges; it's about State [sic] Hill Constructors, a New York construction company who was able to rehire laid–off seasonal employees after winning contracts for some of the road projects the governor mentioned; it's about a highway in Illinois, dotted with potholes, being repaved by 120 new workers.  And guess what.  They're being paid a decent wage.  This is about middle-class standards we are focusing on, as well; it’s about $1.5 million to $2 million the contractor spent on that project.  What does that affect?  He had to go out and buy more earth-movers.  He had to go out and buy more Caterpillar pavers, profiling machines, rollers, other equipment.  That keeps somebody hired at the Caterpillar factory, or someone not laid off, maybe even re-hired.

This is about the thousands, literally, thousands of stories like this I've heard all -- I haven't heard thousands, but I've heard scores of them all around the country; shovels going into the ground, money going back into the economy, workers heading back to their jobs even in the face of rising unemployment.

We’ve also approved $2.9 billion in money, as I referenced by -- obliquely from the SBA.  The administration loans have supported $4 billion in lending to small business.  It's a leveraging impact.  It's real.

And so, look, where we are now is that we -- we've already announced $38 billion in new spending to develop, commercialize -- and renewable energy sources that will be the foundation of our new economy.

I've been out there in the Midwest.  There are -- a new windmill farm.  Were it not for our investment in clean energy, they wouldn't be building those 100 new windmills.  So guess what I did.  I went to a small factory that was around, hired the UAW work there, means they get a decent wage and guess what, they're the ones out there preparing the transformers for these operations.  These have over 800 parts -- 8,000 parts.  We're trying to bring an industry here to the United States.

Why in God's name when we're -- and, by the way, we announced a new windmill farm off the state of Delaware.  New Jersey has from none to now four major petitions in -- New York, and a lot of other states up and down this West Coast -- I mean, excuse me, East Coast as well as the West Coast.  We're talking about spurring a new industry of renewable energy that's going to make a fundamental difference; not only in our climate; not only in our environment, but also in providing jobs that can't be exported.

It sounds fancy, but I've seen what it means for real families and small businesses across the country.  I saw at ABB Inc., in Missouri -- they’re an electrical transformer factory, and because of a new wind farm project of a hundred new windmills that couldn't have been funded without this act, new orders are up dramatically.  They are able to keep people hired at a decent wage.

You're going to hear a little bit about this, because an outfit out in Chicago I went to see if -- I don't mind mentioning a competitor here to one of our folks, Serious Windows in Chicago, where because of increased demand for high-energy windows, they're able to reopen several shuttered factories, re-hire some 200 workers that were laid off by the previous manufacturer, and hire them into multiple states.  They went out and bought Republic.

And it’s happening here in New York too.  The New York State Veteran’s Home at St. Alban’s Jamaica, New York, is installing more efficient motors, variable speed drive units, lighting, ballasts, lighting sensors, daylight sensors and replacing incandescent bulbs with compact fluorescent bulbs.  All of these things actually provide a job, decent jobs for people; they improve energy efficiency, reducing the cost of manning and running those facilities; they lower cost across the board; and they lessen the impact of energy consumption on our environment.

And here in New York, the Recovery Act is allowing the weatherization of public housing projects as it is all over the country.  Not only are we lowering heating and cooling bills for vulnerable families, but, in the process, we’re leaving men and women with jobs from the projects.  We're spending $500 million on re-training jobs.  So our goal here is to get -- there are over 1.8 million young men and women in those projects qualified to do these jobs.  We want to re-hire them, hire them and train them to do these weatherization jobs and give them a skill they can work with, so they end up having a permanent job.

Look, we're trying to lay a foundation for a new century -- not to -- not make-work jobs.  And, on top of all of that, I think we're helping the environment.  Everywhere I go, I see it with my own eyes -- like energy-efficiency and high-speed rail, relatively small amounts of recovery dollars will leverage very, very large investments in those areas.

Folks, in all, we're building a secure economic future.  We're investing heavily today.  We're going to build an economy for tomorrow.  It's been a little more than a hundred days since the President signed the act, and while this is not the ultimate solution for our problems, we also know that it's a historic investment -- an investment in the American people and an investment in American business.

We’ve obligated, in the first 100 days, $126 billion -- $9.1 billion here in New York.  We’ve created more than 150,000 jobs thus far, and we've helped more than a thousand communities and tribes in every state and territory.

And, with some solid hints of stabilization in key markets, including housing, we may be starting to see some of the fruits of this investment.  Most forecasters believe that GDP will turn positive by the end of this year, meaning recovery will soon replace recession.  And, vitally important, a recent survey has shown that consumer confidence is rising; two-thirds of the respondents saying that the Recovery Act will help the overall economy; and half of them saying the act will help their personal financial situation.

All said, our administration understands we have a long, long way to go and plenty of work left to do.  We know the American economy will not fully be up and running until we see robust growth in jobs, decent jobs, providing working families with a stable and dependable income.  

And here is where we believe the Recovery Act can have its greatest impact.  The goal is to save 3.5 million jobs by the end of next year.  By now, only 100-plus days in, people are at work in every single state in the nation who would not have been at work but for this act, and providing product that is worthwhile in and of itself.

In the end, we know that recovery isn’t just a compilation of statistics, and whether the GDP is growing, it’s a broad quilt stretching all across America, designed for the sole purpose of making life better for communities and real working families everywhere.

And, the truth is we’re just getting started.  We've just gotten out of the box.  We realize this act is only one piece of a major puzzle, but it's certainly an important piece.  And what we’ve done so far is a real testament to America’s vast capacity to create real progress in just over a hundred days.  And it gives me great hope that the next hundred days and beyond will even have more speed on it.  We'll see more impact as we begin to spend out -- the states spend out these monies.

Oliver Wendell Holmes said, the great thing in the world is not so much where you stand, as in what direction you're moving.

Ladies and gentlemen, I think we're moving in the right direction.  I want you to hear from this panel, and I want to hear from you.  Thank you, all, for being here --particularly you, Governor.  It's a great honor to share this podium with you.  So why don't we get started.  Thank you all very much.  (Applause.)

END

11:51 A.M. EDT

THE PRESIDENT:  Good morning, everybody.  Just over two months ago, I spoke with you in this same spot about the challenges facing our auto industry, and I laid out what needed to be done to save two of America's most storied automakers -- General Motors and Chrysler.  These companies were facing a crisis decades in the making, and having relied on loans from the previous administration, were asking for more.

From the beginning, I made it clear that I would not put any more tax dollars on the line if it meant perpetuating the bad business decisions that had led these companies to seek help in the first place.  I refused to let these companies become permanent wards of the state, kept afloat on an endless supply of taxpayer money.  In other words, I refused to kick the can down the road.

But I also recognized the importance of a viable auto industry to the well-being of families and communities across our industrial Midwest and across the United States.  In the midst of a deep recession and financial crisis, the collapse of these companies would have been devastating for countless Americans, and done enormous damage to our economy -- beyond the auto industry.  It was also clear that if GM and Chrysler remade and retooled themselves for the 21st century, it would be good for American workers, good for American manufacturing, and good for America's economy.

I decided, then, that if GM and Chrysler and their stakeholders were willing to sacrifice for their companies' survival and success; if they were willing to take the difficult, but necessary steps to restructure, and make themselves stronger, leaner, and more competitive, then the United States government would stand behind them.

The original restructuring plans submitted by GM and Chrysler earlier this year did not call for the sweeping changes these companies needed to survive -- and I couldn't in good conscience proceed on that basis.  So we gave them a chance to develop a stronger plan that would put them on a path toward long-term viability.  The 60 days GM had to submit its revised plans have now elapsed, and I want to say a few words about where we are and what steps will be taken going forward.  But before I do, I want to give you an update on where things stand with Chrysler.

When my administration took office and began going over Chrysler's books, the future of this great American car company was uncertain.  In fact, it was not clear whether it had any future at all.  But after consulting with my Auto Task Force, industry experts, and financial advisors, and after asking many tough questions, I became convinced that if Chrysler were willing to undergo a restructuring, and if it were able to form a partnership with a viable global car company, then Chrysler could get a new lease on life.

Well, that more promising scenario has now come to pass.  Today, after taking a number of painful steps, and moving through a quick, efficient, and fair bankruptcy process, a new, stronger Chrysler is poised to complete its alliance with Fiat.  Just 31 days after Chrysler's Chapter 11 bankruptcy filing, a court has approved the Chrysler-Fiat alliance, paving the way for a new Chrysler to emerge from bankruptcy in the next few days.

What happens next is in the hands of their executives, managers, and workers -- as it is for any private company.  But what the completion of this alliance means is that tens of thousands of jobs that would have been lost if Chrysler had liquidated will now be saved, and that consumers have no reason at all to worry about a restructuring -- even one as painful as what Chrysler underwent.

And keep in mind -- many experts said that a quick, surgical bankruptcy was impossible.  They were wrong.  Others predicted that Chrysler's decision to enter bankruptcy would lead to an immediate collapse in consumer confidence that would send car sales over a cliff.  They were wrong, as well.  In fact, Chrysler sold more cars in May than it did in April, in part because consumers were comforted by our extraordinary commitment to stand behind a quick bankruptcy process.  All in all, it's a dramatic -- an outcome dramatically better than what appeared likely when this process began.

Now the situation we found at General Motors was very different from what we found at Chrysler -- largely because GM is a different kind of company.  It is much larger and much more complex, with operations all over the globe.  In this context, GM's management team -- including its new CEO, Fritz Henderson, its interim chairman, Kent Kresa, and all of their colleagues -- have worked -- has worked tirelessly to produce a plan that meets the strict standards I laid out at the beginning:  to streamline GM's brands, clean up GM's balance sheet, and make it possible for GM to compete and succeed.

Working with my Auto Task Force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again.  It's a plan tailored to the realities of today's auto market; a plan that positions GM to move toward profitability, even if it takes longer than expected for our economy to fully recover; and it's a plan that builds on GM's recent progress in making better cars. As this plan takes effect, GM will start building a larger share of its cars here at home, including fuel-efficient cars.  In fact, if all goes according to plan, the share of GM cars sold in the United States that are made here will actually grow for the first time in three decades.

Now, any time a business as large as General Motors goes through a restructuring, it is extremely difficult to find common ground among all of the company's stakeholders.  But while the deal that has been worked out is tough, it is also fair.

It will require the United Auto Workers to make further cuts in compensation and retiree health care benefits -- painful sacrifices on top of all that they have already done.

It will require GM shareholders to give up the remaining value of their shares -- just as they would have had to do in any private restructuring of this kind.

And it will also provide unsecured bondholders with an equitable outcome -- an outcome that will let them recover more than the current value of their claims, and substantially more than they would have recovered if the government had not intervened and GM had liquidated.  That's why a majority of GM's bondholders already support this deal.

Throughout this process, I wanted to ensure that none of GM's stakeholders receives special treatment because of our government's involvement.  That's why I instructed my Auto Task Force to treat all of GM's stakeholders fairly and to ensure that this restructuring was carried out in a way that was consistent with past precedent -- and it was.

What we have, then, is a credible plan that is full of promise.  But GM can't put this plan into effect on its own.  Executing this plan will require a substantial amount of money that only a government can provide.  Considering GM's extensive operations within their borders, the governments of Canada and Ontario have agreed to do their part with an investment in GM's future, and I want to thank them for doing so.  I also want to thank the government of Germany for working diligently to reach a Memorandum of Understanding on the sale of a major stake in GM's European Division and for providing interim funding that will make it possible for that transaction to be finalized.

But of course GM is an American company with tens of thousands of employees in this country, and responsibility for its future ultimately rests with us.  That's why our government will be making a significant additional investment of about $30 billion in GM -- an investment that will entitle American taxpayers to ownership of about 60 percent of the new GM.

Now, let me talk about this.  I recognize that this may give some Americans pause.  So let me explain as clearly as possible why we are making this investment.  We inherited a financial crisis unlike any that we've seen in our time.  This crisis crippled private capital markets and forced us to take steps in our financial system -- and with our auto companies -- that we would not have otherwise even considered.  These steps have put our government in the unwelcome position of owning large stakes in private companies for the simple and compelling reason that their survival and the success of our overall economy depend on it.

Understand we're making these investments not because I want to spend the American people's tax dollars, but because I want to protect them.  Instead of taking so much stock in GM, we could have simply offered the company more loans.  But for years, GM has been buried under an unsustainable mountain of debt.  And piling an irresponsibly large debt on top of the new GM would mean simply repeating the mistakes of the past.  So we are acting as reluctant shareholders -- because that is the only way to help GM succeed.

What we are not doing -- what I have no interest in doing -- is running GM.  GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality.  They -- and not the government -- will call the shots and make the decisions about how to turn this company around.  The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions.  When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.

In short, our goal is to get GM back on its feet, take a hands-off approach, and get out quickly.

Exiting a restructuring of this scale, however, requires not only new investment.  It also requires giving GM a chance to start anew by clearing away the massive past debts that are weighing the company down.  And that's why earlier today, GM did what Chrysler has successfully done and filed for Chapter 11 bankruptcy with the support of its key stakeholders and the United States government.

In all likelihood, this process will take more time for GM than it did for Chrysler because GM is a bigger, more complex company.  But Chrysler's extraordinary success reaffirms my confidence that GM will emerge from its bankruptcy process quickly, and as a stronger and more competitive company.  And I want to remind everyone that if you are considering buying a GM car during this period of restructuring, your warrantees will be safe and government-backed.

So I'm confident that the steps I'm announcing today will mark the end of an old GM, and the beginning of a new GM; a new GM that can produce the high-quality, safe, and fuel-efficient cars of tomorrow; that can lead America towards an energy independent future; and that is once more a symbol of America's success.

But I want to be honest with you.  Building a leaner GM will come at a cost.  It will take a painful toll on many Americans who have relied on General Motors throughout the generations.  So I want to say a word directly to all the men and women watching today, wondering what all of this will mean as far as their own lives are concerned.

I know you've already seen more than your fair share of hard times.  We saw 400,000 jobs lost in the auto industry in the year before this restructuring even began.  I will not pretend the hard times are over.  Difficult days lie ahead.  More jobs will be lost.  More plants will close.  More dealerships will shut their doors, and so will many parts suppliers.

But I want you to know that what you're doing is making a sacrifice for the next generation -- a sacrifice you may not have chose to make, but a sacrifice you were nevertheless called to make so that your children and all of our children can grow up in an America that still makes things; that still builds cars; that still strives for a better future.

As our autoworkers and auto communities pass through these difficult times, we, as a nation, must do our part.  That's why, in March, I appointed Ed Montgomery Director of Recovery for Auto Communities and Workers.  That's why two weeks ago Ed announced a green jobs training program for autoworkers in hard-hit communities.  And that's why last week Ed and Karen Mills, my Small Business Administration chief, traveled to Indiana to announce a new plan to provide loans to auto, RV, and boat dealers to help finance floor plans.  That's why we are accelerating the purchase of a federal fleet of cars to jumpstart demand and give the industry a boost at a time when it needs one.  And that's why I'm calling on Congress to pass fleet modernization legislation that can provide a credit to consumers who turn in old cars and purchase cleaner, more fuel-efficient cars.  These are important steps on the long road to overcoming a problem that didn't happen overnight and will not be solved overnight.

I recognize that today's news carries a particular importance because it's not just any company we're talking about -- it's GM.  It's a company that's not only been a source of income, but a source of pride for generations of autoworkers and generations of Americans.  But while the GM of the future will be different from the GM of the past, I am absolutely confident that if well managed, a new GM will emerge that can provide a new generation of Americans with a chance to live out their dreams, that can out-compete automakers around the world, and that can once again be an integral part of America's economic future.  And when that happens, we can truly say that what is good for General Motors and all who work there is good for the United States of America.

Thank you, everybody.

                                                            END                                           12:07 P.M. EDT
 

2:14 P.M. EDT

     MRS. OBAMA:  Well, that's hard to follow.  (Laughter.)  I mean, those were just some amazing presentations.  Carlos, Cierra, Tammy, David, I am so proud of you all -- I mean, because it wasn't just what they said, but how you presented it, how you structured it; you added humor, great description.  Just as a teacher, that's just A-plus work right there.  (Laughter.) 

     And it says it all.  I mean, those presentations are just a great representation of what this little project can do with kids.  They just eat up information and they take our lead, and they drink it up like nothing, and then they turn it around and teach us in the process.

     It has been an honor to work with you all.  It has been an honor.  Each and every time you have come to the White House, you have come with graciousness, good manners, enthusiasm, energy.  Your parents should be very proud of you, as well as your teachers.  You have made it just so easy for us to work with you, and I am thrilled to be here in your garden.  And I'm going to do some planting, too, here.

     So I want to thank you all for what you've done to help us get the garden started.  And Tammy, just to answer your questions, the garden is beautiful.  It is blooming, it is bursting.  We've already used about 80 pounds of lettuce.  We've eaten it, we served it at a big fancy luncheon that I did for other congressional and senate spouses, and they just raved over it.  And I told everybody about the work that you did to plant it, how you came back again and again, and how you're working in your own gardens.

     So everything is going well.  We also shared some of the lettuce and some of the honey with Miriam's Kitchen, as well, so already the work that you're doing is not just feeding our family and the staff and our guests at the White House, but it's feeding people who may not have anything to eat.  So you all should know, when you come back to harvest in a couple of weeks, you will see a totally different garden. 

     Everything is blooming.  We even had to replant some more lettuce because we used it up so quickly.  But the beans are starting to sprout up.  We put the tomatoes in.  We've sent -- rhubarb.  We've had rhubarb pie.  If you guys have had rhubarb, it tastes just -- sort of like strawberry, and maybe Sam -- Mr. Sam -- (laughter) -- maybe we can do something with rhubarb, a nice sweet when you guys come back for the harvesting.

    

     And we used a lot of the herbs, seasonings in our salads and in our foods, so we are using every single aspect of that garden.  And the tomatoes, hopefully, will be starting to come up, and some of the berries, as well.

     So things are going well at the White House Garden, thanks to you all, and you should be proud of what you've done. 

     But this is exactly why I wanted to be a part of this project -- what we're seeing here.  Being able to share this with the Bancroft School has just been a special treat because as the students indicated in their presentation, it's not just about being out in the garden, being out in the open air, or being at the White House.  They've really learned some lessons about nutrition.  They're making different choices because they're a part of the process of planting and tilling the soil and pulling up the food.  It makes such a huge difference in the choices that they make.

     So this is an example of why we wanted to do this, and I'm so happy that today some parents and community members have been able to join us to see just how much these kids have learned and how much they've embraced these concepts, because it's an example of what we can do nationally with kids and nutrition, because we have to have these conversations about nutrition in a society where we're seeing growing rates of obesity and diabetes among kids.  It is really about choices.

     And one of the ways that I got involved in gardening and eating fresh foods is because I was a busy parent.  When we started this election, even before this campaign, you find that your schedule is so packed that it becomes difficult to figure out how to quickly and effectively feed your family.  So what do you resort to?  I know, it was take-out, it was processed foods, it was everything quick and easy. 

     And we started to see that taking a toll on our health.  And our children's pediatrician gave me a little tap on the shoulder and said, you might want to make some changes.  And the changes that we made were very simple.  We added more fruits and vegetables to our plates.  We eliminated processed foods.  We didn't say no to anything -- we still went out -- but it was just about moderation, and we were able to engage our children in the process of understanding what foods do to their bodies.

     And like the kids at Bancroft, they ate up that information and they started schooling me and lecturing me about what I should be eating, and what a carrot does, and what broccoli does.  And sometimes they look at my plate in disgust now.  (Laughter.)  But what that just told me is that kids can lead the way for us, because we care about them so much.  I know I care about these kids as much as I care about my own.  And I wanted to share some of the lessons that I learned as a parent and the improvement that I saw in our overall family health with the rest of the nation, because it is difficult if you don't know about choices.

    

     And we also know that access and affordability is also an important part of this conversation, which is why encouraging people to use farmer's markets, community gardens are really critical.  But we have to figure out how to make this more affordable. 

     And Bancroft School, this partnership has been right on track, because you've seen firsthand how possible it is to develop a community garden.  There were times, my mother reminded me, when there were victory gardens all over communities throughout this nation.  She talked about, as we went through this garden project -- it was like -- she just remembered that her mother -- you know, they had seven kids -- would get their fruits and vegetables from a victory garden in their neighborhood on the South Side of Chicago.  And that was one of the reasons why during some tough times with a big family and very little resources, they always had fruits and vegetables.  That was always something that was a part of their diet.  So part of what we need to do is reengage our communities in this kind of dialogue. 

     But we also need to think more broadly about the quality of the foods that we give our kids throughout -- what we're doing in our schools, in our school lunch programs -- because as the economy gets more troubled, there are going to be more and more kids who are going to qualify and rely on the meals that they get at schools, their breakfasts and their lunches.

     And the next step -- or one of the next steps in this conversation is figuring out how do we ensure, through the help of the government, as well as local communities, that the foods that our kids are getting in school each and every day is as healthy as it can be, so that we're bringing some of these lessons home and we're also expanding them in the classrooms and in the schools.

     So this has been just a wonderful kickoff.  And as you said, you think I've -- you've enjoyed the hugs and the kisses and the hugs and the sharing?  I've enjoyed that the most --  getting to know you guys, digging in the dirt, you know, just being out in the open air and watching your excitement -- because we did a lot of hard work moving that dirt with those shovels.  That was harder than I thought it was.  Remember we had to get the soil ready?  That was hard.  That stuff was heavy, wasn't it?

     AUDIENCE:  Yes.

     MRS. OBAMA:  But you guys didn't stop.  And I didn't think that we were going to finish planting everything.  I told Sam -- I said, well, we're going to -- when it was time to plant, I said, well, maybe we'll get through some of this, but we're going to run out of time.  But what did we do? 

     AUDIENCE:  Finish.

     MRS. OBAMA:  You finished everything.  You guys planted every single thing in the White House Kitchen Garden.  You did everything, and you didn't stop until it was done.  And you should be proud of yourselves because I am so proud of you. 

     Thank you.  Thank you for being you guys, okay.  So let's go out and do some more planting.  (Applause.)

                                         END                     2:23 P.M. EDT

 
 

11:08 A.M. EDT

THE PRESIDENT:  Everybody, please be seated.  We meet today at a transformational moment -- a moment in history when our interconnected world presents us, at once, with great promise but also great peril.

Now, over the past four months my administration has taken decisive steps to seize the promise and confront these perils.  We're working to recover from a global recession while laying a new foundation for lasting prosperity.  We're strengthening our armed forces as they fight two wars, at the same time we're renewing American leadership to confront unconventional challenges, from nuclear proliferation to terrorism, from climate change to pandemic disease.  And we're bringing to government -- and to this White House -- unprecedented transparency and accountability and new ways for Americans to participate in their democracy.

But none of this progress would be possible, and none of these 21st century challenges can be fully met, without America's digital infrastructure -- the backbone that underpins a prosperous economy and a strong military and an open and efficient government.  Without that foundation we can't get the job done.

It's long been said that the revolutions in communications and information technology have given birth to a virtual world.  But make no mistake:  This world -- cyberspace -- is a world that we depend on every single day.  It's our hardware and our software, our desktops and laptops and cell phones and Blackberries that have become woven into every aspect of our lives.

It's the broadband networks beneath us and the wireless signals around us, the local networks in our schools and hospitals and businesses, and the massive grids that power our nation.  It's the classified military and intelligence networks that keep us safe, and the World Wide Web that has made us more interconnected than at any time in human history.

So cyberspace is real.  And so are the risks that come with it.

It's the great irony of our Information Age -- the very technologies that empower us to create and to build also empower those who would disrupt and destroy.  And this paradox -- seen and unseen -- is something that we experience every day.

It's about the privacy and the economic security of American families.  We rely on the Internet to pay our bills, to bank, to shop, to file our taxes.  But we've had to learn a whole new vocabulary just to stay ahead of the cyber criminals who would do us harm -- spyware and malware and spoofing and phishing and botnets.  Millions of Americans have been victimized, their privacy violated, their identities stolen, their lives upended, and their wallets emptied.  According to one survey, in the past two years alone cyber crime has cost Americans more than $8 billion.

I know how it feels to have privacy violated because it has happened to me and the people around me.  It's no secret that my presidential campaign harnessed the Internet and technology to transform our politics.  What isn't widely known is that during the general election hackers managed to penetrate our computer systems.  To all of you who donated to our campaign, I want you to all rest assured, our fundraising website was untouched.  (Laughter.)  So your confidential personal and financial information was protected.

But between August and October, hackers gained access to emails and a range of campaign files, from policy position papers to travel plans.  And we worked closely with the CIA -- with the FBI and the Secret Service and hired security consultants to restore the security of our systems.  It was a powerful reminder:  In this Information Age, one of your greatest strengths -- in our case, our ability to communicate to a wide range of supporters through the Internet -- could also be one of your greatest vulnerabilities.

This is a matter, as well, of America's economic competitiveness.  The small businesswoman in St. Louis, the bond trader in the New York Stock Exchange, the workers at a global shipping company in Memphis, the young entrepreneur in Silicon Valley -- they all need the networks to make the next payroll, the next trade, the next delivery, the next great breakthrough.  E-commerce alone last year accounted for some $132 billion in retail sales.

But every day we see waves of cyber thieves trolling for sensitive information -- the disgruntled employee on the inside, the lone hacker a thousand miles away, organized crime, the industrial spy and, increasingly, foreign intelligence services. In one brazen act last year, thieves used stolen credit card information to steal millions of dollars from 130 ATM machines in 49 cities around the world -- and they did it in just 30 minutes.  A single employee of an American company was convicted of stealing intellectual property reportedly worth $400 million.  It's been estimated that last year alone cyber criminals stole intellectual property from businesses worldwide worth up to $1 trillion.

In short, America's economic prosperity in the 21st century will depend on cybersecurity.

And this is also a matter of public safety and national security.  We count on computer networks to deliver our oil and gas, our power and our water.  We rely on them for public transportation and air traffic control.  Yet we know that cyber intruders have probed our electrical grid and that in other countries cyber attacks have plunged entire cities into darkness.

Our technological advantage is a key to America's military dominance.  But our defense and military networks are under constant attack.  Al Qaeda and other terrorist groups have spoken of their desire to unleash a cyber attack on our country -- attacks that are harder to detect and harder to defend against.  Indeed, in today's world, acts of terror could come not only from a few extremists in suicide vests but from a few key strokes on the computer -- a weapon of mass disruption.

In one of the most serious cyber incidents to date against our military networks, several thousand computers were infected last year by malicious software -- malware.  And while no sensitive information was compromised, our troops and defense personnel had to give up those external memory devices -- thumb drives -- changing the way they used their computers every day.

And last year we had a glimpse of the future face of war.  As Russian tanks rolled into Georgia, cyber attacks crippled Georgian government websites.  The terrorists that sowed so much death and destruction in Mumbai relied not only on guns and grenades but also on GPS and phones using voice-over-the-Internet.

For all these reasons, it's now clear this cyber threat is one of the most serious economic and national security challenges we face as a nation.

It's also clear that we're not as prepared as we should be, as a government or as a country.  In recent years, some progress has been made at the federal level.  But just as we failed in the past to invest in our physical infrastructure -- our roads, our bridges and rails -- we've failed to invest in the security of our digital infrastructure.

No single official oversees cybersecurity policy across the federal government, and no single agency has the responsibility or authority to match the scope and scale of the challenge.  Indeed, when it comes to cybersecurity, federal agencies have overlapping missions and don't coordinate and communicate nearly as well as they should -- with each other or with the private sector.  We saw this in the disorganized response to Conficker, the Internet "worm" that in recent months has infected millions of computers around the world.

This status quo is no longer acceptable -- not when there's so much at stake.  We can and we must do better.

And that's why shortly after taking office I directed my National Security Council and Homeland Security Council to conduct a top-to-bottom review of the federal government's efforts to defend our information and communications infrastructure and to recommend the best way to ensure that these networks are able to secure our networks as well as our prosperity.

Our review was open and transparent.  I want to acknowledge, Melissa Hathaway, who is here, who is the Acting Senior Director for Cyberspace on our National Security Council, who led the review team, as well as the Center for Strategic and International Studies bipartisan Commission on Cybersecurity, and all who were part of our 60-day review team.  They listened to a wide variety of groups, many of which are represented here today and I want to thank for their input:  industry and academia, civil liberties and private -- privacy advocates.  We listened to every level and branch of government -- from local to state to federal, civilian, military, homeland as well as intelligence, Congress and international partners, as well.  I consulted with my national security teams, my homeland security teams, and my economic advisors.

Today I'm releasing a report on our review, and can announce that my administration will pursue a new comprehensive approach to securing America's digital infrastructure.

This new approach starts at the top, with this commitment from me:  From now on, our digital infrastructure -- the networks and computers we depend on every day -- will be treated as they should be:  as a strategic national asset.  Protecting this infrastructure will be a national security priority.  We will ensure that these networks are secure, trustworthy and resilient.  We will deter, prevent, detect, and defend against attacks and recover quickly from any disruptions or damage.

To give these efforts the high-level focus and attention they deserve -- and as part of the new, single National Security Staff announced this week -- I'm creating a new office here at the White House that will be led by the Cybersecurity Coordinator.  Because of the critical importance of this work, I will personally select this official.  I'll depend on this official in all matters relating to cybersecurity, and this official will have my full support and regular access to me as we confront these challenges.

Today, I want to focus on the important responsibilities this office will fulfill:  orchestrating and integrating all cybersecurity policies for the government; working closely with the Office of Management and Budget to ensure agency budgets reflect those priorities; and, in the event of major cyber incident or attack, coordinating our response.

To ensure that federal cyber policies enhance our security and our prosperity, my Cybersecurity Coordinator will be a member of the National Security Staff as well as the staff of my National Economic Council.  To ensure that policies keep faith with our fundamental values, this office will also include an official with a portfolio specifically dedicated to safeguarding the privacy and civil liberties of the American people.

There's much work to be done, and the report we're releasing today outlines a range of actions that we will pursue in five key areas.

First, working in partnership with the communities represented here today, we will develop a new comprehensive strategy to secure America's information and communications networks.  To ensure a coordinated approach across government, my Cybersecurity Coordinator will work closely with my Chief Technology Officer, Aneesh Chopra, and my Chief Information Officer, Vivek Kundra.  To ensure accountability in federal agencies, cybersecurity will be designated as one of my key management priorities.  Clear milestones and performances metrics will measure progress.  And as we develop our strategy, we will be open and transparent, which is why you'll find today's report and a wealth of related information on our Web site, www.whitehouse.gov.

Second, we will work with all the key players -- including state and local governments and the private sector -- to ensure an organized and unified response to future cyber incidents.  Given the enormous damage that can be caused by even a single cyber attack, ad hoc responses will not do.  Nor is it sufficient to simply strengthen our defenses after incidents or attacks occur.  Just as we do for natural disasters, we have to have plans and resources in place beforehand -- sharing information, issuing warnings and ensuring a coordinated response.

Third, we will strengthen the public/private partnerships that are critical to this endeavor.  The vast majority of our critical information infrastructure in the United States is owned and operated by the private sector.  So let me be very clear:  My administration will not dictate security standards for private companies.  On the contrary, we will collaborate with industry to find technology solutions that ensure our security and promote prosperity.

Fourth, we will continue to invest in the cutting-edge research and development necessary for the innovation and discovery we need to meet the digital challenges of our time.  And that's why my administration is making major investments in our information infrastructure:   laying broadband lines to every corner of America; building a smart electric grid to deliver energy more efficiently; pursuing a next generation of air traffic control systems; and moving to electronic health records, with privacy protections, to reduce costs and save lives.

And finally, we will begin a national campaign to promote cybersecurity awareness and digital literacy from our boardrooms to our classrooms, and to build a digital workforce for the 21st century.  And that's why we're making a new commitment to education in math and science, and historic investments in science and research and development.  Because it's not enough for our children and students to master today's technologies -- social networking and e-mailing and texting and blogging -- we need them to pioneer the technologies that will allow us to work effectively through these new media and allow us to prosper in the future.  So these are the things we will do.

Let me also be clear about what we will not do.  Our pursuit of cybersecurity will not -- I repeat, will not include -- monitoring private sector networks or Internet traffic.  We will preserve and protect the personal privacy and civil liberties that we cherish as Americans.  Indeed, I remain firmly committed to net neutrality so we can keep the Internet as it should be -- open and free.

The task I have described will not be easy.  Some 1.5 billion people around the world are already online, and more are logging on every day.  Groups and governments are sharpening their cyber capabilities.  Protecting our prosperity and security in this globalized world is going to be a long, difficult struggle demanding patience and persistence over many years.

But we need to remember:  We're only at the beginning.  The epochs of history are long -- the Agricultural Revolution; the Industrial Revolution.  By comparison, our Information Age is still in its infancy.  We're only at Web 2.0.  Now our virtual world is going viral.  And we've only just begun to explore the next generation of technologies that will transform our lives in ways we can't even begin to imagine.

So a new world awaits -- a world of greater security and greater potential prosperity -- if we reach for it, if we lead.  So long as I'm President of the United States, we will do just that.  And the United States -- the nation that invented the Internet, that launched an information revolution, that transformed the world -- will do what we did in the 20th century and lead once more in the 21st.

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

END                                                                                                    
11:25 A.M. EDT