Remarks by the President on Review of Signals Intelligence

Department of Justice
Washington, D.C.

11:15 A.M. EST

THE PRESIDENT:  At the dawn of our Republic, a small, secret surveillance committee borne out of the “The Sons of Liberty” was established in Boston.  And the group’s members included Paul Revere.  At night, they would patrol the streets, reporting back any signs that the British were preparing raids against America’s early Patriots.

Throughout American history, intelligence has helped secure our country and our freedoms.  In the Civil War, Union balloon reconnaissance tracked the size of Confederate armies by counting the number of campfires.  In World War II, code-breakers gave us insights into Japanese war plans, and when Patton marched across Europe, intercepted communications helped save the lives of his troops.  After the war, the rise of the Iron Curtain and nuclear weapons only increased the need for sustained intelligence gathering.  And so, in the early days of the Cold War, President Truman created the National Security Agency, or NSA, to give us insights into the Soviet bloc, and provide our leaders with information they needed to confront aggression and avert catastrophe.

Throughout this evolution, we benefited from both our Constitution and our traditions of limited government.  U.S. intelligence agencies were anchored in a system of checks and balances -- with oversight from elected leaders, and protections for ordinary citizens.  Meanwhile, totalitarian states like East Germany offered a cautionary tale of what could happen when vast, unchecked surveillance turned citizens into informers, and persecuted people for what they said in the privacy of their own homes.

In fact, even the United States proved not to be immune to the abuse of surveillance.  And in the 1960s, government spied on civil rights leaders and critics of the Vietnam War.  And partly in response to these revelations, additional laws were established in the 1970s to ensure that our intelligence capabilities could not be misused against our citizens.  In the long, twilight struggle against Communism, we had been reminded that the very liberties that we sought to preserve could not be sacrificed at the altar of national security.

If the fall of the Soviet Union left America without a competing superpower, emerging threats from terrorist groups, and the proliferation of weapons of mass destruction placed new and in some ways more complicated demands on our intelligence agencies.  Globalization and the Internet made these threats more acute, as technology erased borders and empowered individuals to project great violence, as well as great good.  Moreover, these new threats raised new legal and new policy questions.  For while few doubted the legitimacy of spying on hostile states, our framework of laws was not fully adapted to prevent terrorist attacks by individuals acting on their own, or acting in small, ideologically driven groups on behalf of a foreign power. 

The horror of September 11th brought all these issues to the fore.  Across the political spectrum, Americans recognized that we had to adapt to a world in which a bomb could be built in a basement, and our electric grid could be shut down by operators an ocean away.  We were shaken by the signs we had missed leading up to the attacks -- how the hijackers had made phone calls to known extremists and traveled to suspicious places.  So we demanded that our intelligence community improve its capabilities, and that law enforcement change practices to focus more on preventing attacks before they happen than prosecuting terrorists after an attack. 

It is hard to overstate the transformation America’s intelligence community had to go through after 9/11.  Our agencies suddenly needed to do far more than the traditional mission of monitoring hostile powers and gathering information for policymakers.  Instead, they were now asked to identify and target plotters in some of the most remote parts of the world, and to anticipate the actions of networks that, by their very nature, cannot be easily penetrated with spies or informants.

And it is a testimony to the hard work and dedication of the men and women of our intelligence community that over the past decade we’ve made enormous strides in fulfilling this mission.  Today, new capabilities allow intelligence agencies to track who a terrorist is in contact with, and follow the trail of his travel or his funding.  New laws allow information to be collected and shared more quickly and effectively between federal agencies, and state and local law enforcement.  Relationships with foreign intelligence services have expanded, and our capacity to repel cyber-attacks have been strengthened.  And taken together, these efforts have prevented multiple attacks and saved innocent lives -- not just here in the United States, but around the globe.

And yet, in our rush to respond to a very real and novel set of threats, the risk of government overreach -- the possibility that we lose some of our core liberties in pursuit of security -- also became more pronounced.  We saw, in the immediate aftermath of 9/11, our government engaged in enhanced interrogation techniques that contradicted our values.  As a Senator, I was critical of several practices, such as warrantless wiretaps.  And all too often new authorities were instituted without adequate public debate.

Through a combination of action by the courts, increased congressional oversight, and adjustments by the previous administration, some of the worst excesses that emerged after 9/11 were curbed by the time I took office.  But a variety of factors have continued to complicate America’s efforts to both defend our nation and uphold our civil liberties.

First, the same technological advances that allow U.S. intelligence agencies to pinpoint an al Qaeda cell in Yemen or an email between two terrorists in the Sahel also mean that many routine communications around the world are within our reach.  And at a time when more and more of our lives are digital, that prospect is disquieting for all of us.

Second, the combination of increased digital information and powerful supercomputers offers intelligence agencies the possibility of sifting through massive amounts of bulk data to identify patterns or pursue leads that may thwart impending threats.  It’s a powerful tool.  But the government collection and storage of such bulk data also creates a potential for abuse.

Third, the legal safeguards that restrict surveillance against U.S. persons without a warrant do not apply to foreign persons overseas.  This is not unique to America; few, if any, spy agencies around the world constrain their activities beyond their own borders.  And the whole point of intelligence is to obtain information that is not publicly available.  But America’s capabilities are unique, and the power of new technologies means that there are fewer and fewer technical constraints on what we can do.  That places a special obligation on us to ask tough questions about what we should do.

And finally, intelligence agencies cannot function without secrecy, which makes their work less subject to public debate.  Yet there is an inevitable bias not only within the intelligence community, but among all of us who are responsible for national security, to collect more information about the world, not less.  So in the absence of institutional requirements for regular debate -- and oversight that is public, as well as private or classified -- the danger of government overreach becomes more acute.  And this is particularly true when surveillance technology and our reliance on digital information is evolving much faster than our laws.

For all these reasons, I maintained a healthy skepticism toward our surveillance programs after I became President.  I ordered that our programs be reviewed by my national security team and our lawyers, and in some cases I ordered changes in how we did business.  We increased oversight and auditing, including new structures aimed at compliance.  Improved rules were proposed by the government and approved by the Foreign Intelligence Surveillance Court.  And we sought to keep Congress continually updated on these activities.

What I did not do is stop these programs wholesale -- not only because I felt that they made us more secure, but also because nothing in that initial review, and nothing that I have learned since, indicated that our intelligence community has sought to violate the law or is cavalier about the civil liberties of their fellow citizens.

To the contrary, in an extraordinarily difficult job -- one in which actions are second-guessed, success is unreported, and failure can be catastrophic -- the men and women of the intelligence community, including the NSA, consistently follow protocols designed to protect the privacy of ordinary people.  They’re not abusing authorities in order to listen to your private phone calls or read your emails.  When mistakes are made -- which is inevitable in any large and complicated human enterprise -- they correct those mistakes.  Laboring in obscurity, often unable to discuss their work even with family and friends, the men and women at the NSA know that if another 9/11 or massive cyber-attack occurs, they will be asked, by Congress and the media, why they failed to connect the dots.  What sustains those who work at NSA and our other intelligence agencies through all these pressures is the knowledge that their professionalism and dedication play a central role in the defense of our nation.

Now, to say that our intelligence community follows the law, and is staffed by patriots, is not to suggest that I or others in my administration felt complacent about the potential impact of these programs.  Those of us who hold office in America have a responsibility to our Constitution, and while I was confident in the integrity of those who lead our intelligence community, it was clear to me in observing our intelligence operations on a regular basis that changes in our technological capabilities were raising new questions about the privacy safeguards currently in place. 

Moreover, after an extended review of our use of drones in the fight against terrorist networks, I believed a fresh examination of our surveillance programs was a necessary next step in our effort to get off the open-ended war footing that we’ve maintained since 9/11.  And for these reasons, I indicated in a speech at the National Defense University last May that we needed a more robust public discussion about the balance between security and liberty.  Of course, what I did not know at the time is that within weeks of my speech, an avalanche of unauthorized disclosures would spark controversies at home and abroad that have continued to this day.

And given the fact of an open investigation, I’m not going to dwell on Mr. Snowden’s actions or his motivations; I will say that our nation’s defense depends in part on the fidelity of those entrusted with our nation’s secrets.  If any individual who objects to government policy can take it into their own hands to publicly disclose classified information, then we will not be able to keep our people safe, or conduct foreign policy.  Moreover, the sensational way in which these disclosures have come out has often shed more heat than light, while revealing methods to our adversaries that could impact our operations in ways that we may not fully understand for years to come.

Regardless of how we got here, though, the task before us now is greater than simply repairing the damage done to our operations or preventing more disclosures from taking place in the future.  Instead, we have to make some important decisions about how to protect ourselves and sustain our leadership in the world, while upholding the civil liberties and privacy protections that our ideals and our Constitution require.  We need to do so not only because it is right, but because the challenges posed by threats like terrorism and proliferation and cyber-attacks are not going away any time soon.  They are going to continue to be a major problem.  And for our intelligence community to be effective over the long haul, we must maintain the trust of the American people, and people around the world.

This effort will not be completed overnight, and given the pace of technological change, we shouldn’t expect this to be the last time America has this debate.  But I want the American people to know that the work has begun.  Over the last six months, I created an outside Review Group on Intelligence and Communications Technologies to make recommendations for reform.  I consulted with the Privacy and Civil Liberties Oversight Board, created by Congress.  I’ve listened to foreign partners, privacy advocates, and industry leaders.  My administration has spent countless hours considering how to approach intelligence in this era of diffuse threats and technological revolution.  So before outlining specific changes that I’ve ordered, let me make a few broad observations that have emerged from this process.

First, everyone who has looked at these problems, including skeptics of existing programs, recognizes that we have real enemies and threats, and that intelligence serves a vital role in confronting them.  We cannot prevent terrorist attacks or cyber threats without some capability to penetrate digital communications -- whether it’s to unravel a terrorist plot; to intercept malware that targets a stock exchange; to make sure air traffic control systems are not compromised; or to ensure that hackers do not empty your bank accounts.  We are expected to protect the American people; that requires us to have capabilities in this field.

Moreover, we cannot unilaterally disarm our intelligence agencies.  There is a reason why BlackBerrys and iPhones are not allowed in the White House Situation Room.  We know that the intelligence services of other countries -- including some who feign surprise over the Snowden disclosures -- are constantly probing our government and private sector networks, and accelerating programs to listen to our conversations, and intercept our emails, and compromise our systems.  We know that. 

Meanwhile, a number of countries, including some who have loudly criticized the NSA, privately acknowledge that America has special responsibilities as the world’s only superpower; that our intelligence capabilities are critical to meeting these responsibilities, and that they themselves have relied on the information we obtain to protect their own people.

Second, just as ardent civil libertarians recognize the need for robust intelligence capabilities, those with responsibilities for our national security readily acknowledge the potential for abuse as intelligence capabilities advance and more and more private information is digitized.  After all, the folks at NSA and other intelligence agencies are our neighbors.  They're our friends and family.  They’ve got electronic bank and medical records like everybody else.  They have kids on Facebook and Instagram, and they know, more than most of us, the vulnerabilities to privacy that exist in a world where transactions are recorded, and emails and text and messages are stored, and even our movements can increasingly be tracked through the GPS on our phones.

Third, there was a recognition by all who participated in these reviews that the challenges to our privacy do not come from government alone.  Corporations of all shapes and sizes track what you buy, store and analyze our data, and use it for commercial purposes; that’s how those targeted ads pop up on your computer and your smartphone periodically.  But all of us understand that the standards for government surveillance must be higher.  Given the unique power of the state, it is not enough for leaders to say:  Trust us, we won’t abuse the data we collect.  For history has too many examples when that trust has been breached.  Our system of government is built on the premise that our liberty cannot depend on the good intentions of those in power; it depends on the law to constrain those in power.

I make these observations to underscore that the basic values of most Americans when it comes to questions of surveillance and privacy converge a lot more than the crude characterizations that have emerged over the last several months.  Those who are troubled by our existing programs are not interested in repeating the tragedy of 9/11, and those who defend these programs are not dismissive of civil liberties. 

The challenge is getting the details right, and that is not simple.  In fact, during the course of our review, I have often reminded myself I would not be where I am today were it not for the courage of dissidents like Dr. King, who were spied upon by their own government.  And as President, a President who looks at intelligence every morning, I also can’t help but be reminded that America must be vigilant in the face of threats. 

Fortunately, by focusing on facts and specifics rather than speculation and hypotheticals, this review process has given me -- and hopefully the American people -- some clear direction for change.  And today, I can announce a series of concrete and substantial reforms that my administration intends to adopt administratively or will seek to codify with Congress. 

First, I have approved a new presidential directive for our signals intelligence activities both at home and abroad.  This guidance will strengthen executive branch oversight of our intelligence activities.  It will ensure that we take into account our security requirements, but also our alliances; our trade and investment relationships, including the concerns of American companies; and our commitment to privacy and basic liberties.  And we will review decisions about intelligence priorities and sensitive targets on an annual basis so that our actions are regularly scrutinized by my senior national security team.

Second, we will reform programs and procedures in place to provide greater transparency to our surveillance activities, and fortify the safeguards that protect the privacy of U.S. persons.  Since we began this review, including information being released today, we have declassified over 40 opinions and orders of the Foreign Intelligence Surveillance Court, which provides judicial review of some of our most sensitive intelligence activities -- including the Section 702 program targeting foreign individuals overseas, and the Section 215 telephone metadata program.

And going forward, I’m directing the Director of National Intelligence, in consultation with the Attorney General, to annually review for the purposes of declassification any future opinions of the court with broad privacy implications, and to report to me and to Congress on these efforts.  To ensure that the court hears a broader range of privacy perspectives, I am also calling on Congress to authorize the establishment of a panel of advocates from outside government to provide an independent voice in significant cases before the Foreign Intelligence Surveillance Court.

Third, we will provide additional protections for activities conducted under Section 702, which allows the government to intercept the communications of foreign targets overseas who have information that’s important for our national security.  Specifically, I am asking the Attorney General and DNI to institute reforms that place additional restrictions on government’s ability to retain, search, and use in criminal cases communications between Americans and foreign citizens incidentally collected under Section 702.

Fourth, in investigating threats, the FBI also relies on what's called national security letters, which can require companies to provide specific and limited information to the government without disclosing the orders to the subject of the investigation.  These are cases in which it's important that the subject of the investigation, such as a possible terrorist or spy, isn’t tipped off.  But we can and should be more transparent in how government uses this authority. 

I have therefore directed the Attorney General to amend how we use national security letters so that this secrecy will not be indefinite, so that it will terminate within a fixed time unless the government demonstrates a real need for further secrecy.  We will also enable communications providers to make public more information than ever before about the orders that they have received to provide data to the government.

This brings me to the program that has generated the most controversy these past few months -- the bulk collection of telephone records under Section 215.  Let me repeat what I said when this story first broke:  This program does not involve the content of phone calls, or the names of people making calls.  Instead, it provides a record of phone numbers and the times and lengths of calls -- metadata that can be queried if and when we have a reasonable suspicion that a particular number is linked to a terrorist organization.

Why is this necessary?  The program grew out of a desire to address a gap identified after 9/11.  One of the 9/11 hijackers -- Khalid al-Mihdhar -- made a phone call from San Diego to a known al Qaeda safe-house in Yemen.  NSA saw that call, but it could not see that the call was coming from an individual already in the United States.  The telephone metadata program under Section 215 was designed to map the communications of terrorists so we can see who they may be in contact with as quickly as possible.  And this capability could also prove valuable in a crisis.  For example, if a bomb goes off in one of our cities and law enforcement is racing to determine whether a network is poised to conduct additional attacks, time is of the essence.  Being able to quickly review phone connections to assess whether a network exists is critical to that effort.

In sum, the program does not involve the NSA examining the phone records of ordinary Americans.  Rather, it consolidates these records into a database that the government can query if it has a specific lead -- a consolidation of phone records that the companies already retained for business purposes.  The review group turned up no indication that this database has been intentionally abused.  And I believe it is important that the capability that this program is designed to meet is preserved.  

Having said that, I believe critics are right to point out that without proper safeguards, this type of program could be used to yield more information about our private lives, and open the door to more intrusive bulk collection programs in the future.  They’re also right to point out that although the telephone bulk collection program was subject to oversight by the Foreign Intelligence Surveillance Court and has been reauthorized repeatedly by Congress, it has never been subject to vigorous public debate.

For all these reasons, I believe we need a new approach.  I am therefore ordering a transition that will end the Section 215 bulk metadata program as it currently exists, and establish a mechanism that preserves the capabilities we need without the government holding this bulk metadata.

This will not be simple.  The review group recommended that our current approach be replaced by one in which the providers or a third party retain the bulk records, with government accessing information as needed.  Both of these options pose difficult problems.  Relying solely on the records of multiple providers, for example, could require companies to alter their procedures in ways that raise new privacy concerns.  On the other hand, any third party maintaining a single, consolidated database would be carrying out what is essentially a government function but with more expense, more legal ambiguity, potentially less accountability -- all of which would have a doubtful impact on increasing public confidence that their privacy is being protected.

During the review process, some suggested that we may also be able to preserve the capabilities we need through a combination of existing authorities, better information sharing, and recent technological advances.  But more work needs to be done to determine exactly how this system might work.

Because of the challenges involved, I’ve ordered that the transition away from the existing program will proceed in two steps.  Effective immediately, we will only pursue phone calls that are two steps removed from a number associated with a terrorist organization instead of the current three.  And I have directed the Attorney General to work with the Foreign Intelligence Surveillance Court so that during this transition period, the database can be queried only after a judicial finding or in the case of a true emergency.

Next, step two, I have instructed the intelligence community and the Attorney General to use this transition period to develop options for a new approach that can match the capabilities and fill the gaps that the Section 215 program was designed to address without the government holding this metadata itself.  They will report back to me with options for alternative approaches before the program comes up for reauthorization on March 28th.  And during this period, I will consult with the relevant committees in Congress to seek their views, and then seek congressional authorization for the new program as needed.

Now, the reforms I’m proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe.  And I recognize that there are additional issues that require further debate.  For example, some who participated in our review, as well as some members of Congress, would like to see more sweeping reforms to the use of national security letters so that we have to go to a judge each time before issuing these requests.  Here, I have concerns that we should not set a standard for terrorism investigations that is higher than those involved in investigating an ordinary crime.  But I agree that greater oversight on the use of these letters may be appropriate, and I’m prepared to work with Congress on this issue. 

There are also those who would like to see different changes to the FISA Court than the ones I’ve proposed.  On all these issues, I am open to working with Congress to ensure that we build a broad consensus for how to move forward, and I’m confident that we can shape an approach that meets our security needs while upholding the civil liberties of every American.

Let me now turn to the separate set of concerns that have been raised overseas, and focus on America’s approach to intelligence collection abroad.  As I’ve indicated, the United States has unique responsibilities when it comes to intelligence collection.  Our capabilities help protect not only our nation, but our friends and our allies, as well.  But our efforts will only be effective if ordinary citizens in other countries have confidence that the United States respects their privacy, too.  And the leaders of our close friends and allies deserve to know that if I want to know what they think about an issue, I’ll pick up the phone and call them, rather than turning to surveillance.  In other words, just as we balance security and privacy at home, our global leadership demands that we balance our security requirements against our need to maintain the trust and cooperation among people and leaders around the world.

For that reason, the new presidential directive that I’ve issued today will clearly prescribe what we do, and do not do, when it comes to our overseas surveillance.  To begin with, the directive makes clear that the United States only uses signals intelligence for legitimate national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary folks.  I’ve also made it clear that the United States does not collect intelligence to suppress criticism or dissent, nor do we collect intelligence to disadvantage people on the basis of their ethnicity, or race, or gender, or sexual orientation, or religious beliefs.  We do not collect intelligence to provide a competitive advantage to U.S. companies or U.S. commercial sectors.

And in terms of our bulk collection of signals intelligence, U.S. intelligence agencies will only use such data to meet specific security requirements:  counterintelligence, counterterrorism, counter-proliferation, cybersecurity, force protection for our troops and our allies, and combating transnational crime, including sanctions evasion. 

In this directive, I have taken the unprecedented step of extending certain protections that we have for the American people to people overseas.  I’ve directed the DNI, in consultation with the Attorney General, to develop these safeguards, which will limit the duration that we can hold personal information, while also restricting the use of this information.

The bottom line is that people around the world, regardless of their nationality, should know that the United States is not spying on ordinary people who don’t threaten our national security, and that we take their privacy concerns into account in our policies and procedures.  This applies to foreign leaders as well.  Given the understandable attention that this issue has received, I have made clear to the intelligence community that unless there is a compelling national security purpose, we will not monitor the communications of heads of state and government of our close friends and allies.  And I’ve instructed my national security team, as well as the intelligence community, to work with foreign counterparts to deepen our coordination and cooperation in ways that rebuild trust going forward.

Now let me be clear:  Our intelligence agencies will continue to gather information about the intentions of governments -- as opposed to ordinary citizens -- around the world, in the same way that the intelligence services of every other nation does.  We will not apologize simply because our services may be more effective.  But heads of state and government with whom we work closely, and on whose cooperation we depend, should feel confident that we are treating them as real partners.  And the changes I’ve ordered do just that.

Finally, to make sure that we follow through on all these reforms, I am making some important changes to how our government is organized.  The State Department will designate a senior officer to coordinate our diplomacy on issues related to technology and signals intelligence.  We will appoint a senior official at the White House to implement the new privacy safeguards that I have announced today.  I will devote the resources to centralize and improve the process we use to handle foreign requests for legal assistance, keeping our high standards for privacy while helping foreign partners fight crime and terrorism.

I have also asked my counselor, John Podesta, to lead a comprehensive review of big data and privacy.  And this group will consist of government officials who, along with the President’s Council of Advisors on Science and Technology, will reach out to privacy experts, technologists and business leaders, and look how the challenges inherent in big data are being confronted by both the public and private sectors; whether we can forge international norms on how to manage this data; and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security.  

For ultimately, what’s at stake in this debate goes far beyond a few months of headlines, or passing tensions in our foreign policy.  When you cut through the noise, what’s really at stake is how we remain true to who we are in a world that is remaking itself at dizzying speed.  Whether it’s the ability of individuals to communicate ideas; to access information that would have once filled every great library in every country in the world; or to forge bonds with people on other sides of the globe, technology is remaking what is possible for individuals, and for institutions, and for the international order.  So while the reforms that I have announced will point us in a new direction, I am mindful that more work will be needed in the future. 

One thing I’m certain of:  This debate will make us stronger.  And I also know that in this time of change, the United States of America will have to lead.  It may seem sometimes that America is being held to a different standard.  And I'll admit the readiness of some to assume the worst motives by our government can be frustrating.  No one expects China to have an open debate about their surveillance programs, or Russia to take privacy concerns of citizens in other places into account.  But let’s remember:  We are held to a different standard precisely because we have been at the forefront of defending personal privacy and human dignity.

As the nation that developed the Internet, the world expects us to ensure that the digital revolution works as a tool for individual empowerment, not government control.  Having faced down the dangers of totalitarianism and fascism and communism, the world expects us to stand up for the principle that every person has the right to think and write and form relationships freely -- because individual freedom is the wellspring of human progress.

Those values make us who we are.  And because of the strength of our own democracy, we should not shy away from high expectations.  For more than two centuries, our Constitution has weathered every type of change because we have been willing to defend it, and because we have been willing to question the actions that have been taken in its defense.  Today is no different.  I believe we can meet high expectations.  Together, let us chart a way forward that secures the life of our nation while preserving the liberties that make our nation worth fighting for.

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

END
11:57 A.M. EST

Remarks by the First Lady at a Discussion with Education Stakeholders

State Dining Room

Remarks by the President on the National Network for Manufacturing Innovation

J.W. Isenhour Tennis Center
North Carolina State University
Raleigh, North Carolina 

1:14 P.M. EST

THE PRESIDENT:  Hello, Raleigh!  (Applause.)  Thank you so much.  Thank you.  (Applause.)  Well, it is good to be back in North Carolina.  (Applause.)  If you have a seat, go ahead and have a seat.  Now, if you don't have a seat, don't.  (Laughter.) 

It is good to be here at the home of the Wolfpack.  (Applause.)  I want to thank your chancellor, Randy Woodson, for the introduction and the great work that he’s doing on behalf of students all across the system.  I want to recognize my Secretary of Energy, Ernie Moniz, who is here.  Give him a big round of applause -- he’s doing good work.  (Applause.)  Your Governor, Pat McCrory, is here.  (Applause.)  The Mayor of Raleigh, Nancy McFarlane.  (Applause.)  The Mayor of Chapel Hill, Mark Kleinschmidt.  (Applause.)  The Mayor of Durham, Bill Bell.  (Applause.)  And we've got Congressman Mike McIntyre doing great work.  (Applause.)  Your Senator, Kay Hagan, couldn't be here, but I wanted to thank her publicly for the great work she’s doing.  (Applause.)  

And I want to thank all the students for coming out.  We’re doing this event nice and early so it doesn’t run up against the Wake game.  (Applause.)  I’ve learned a few things as President, and one of them is not to compete with college basketball down here on Tobacco Road.  You don't do that.  (Applause.)

Now, this is actually my second stop in Raleigh-Durham.  I just took a tour of a company called Vacon, where workers design the drives that power everything from elevators to the giant fans that help cool buildings like this one -- although I think we're kind of saving money on this -- (laughter) -- which is the smart thing to do. 

So this company is making these engines and these systems more efficient, saving businesses big bucks on energy costs, improving the environment.  Those savings get passed on to customers, puts money in people’s pockets.  And growing companies that need the products that Vacon makes, they’re benefitting enormously.  So it’s a good-news story.  But in a global economy, that company, just like every company in America, has to keep inventing and innovating in order to stay on the cutting edge.  And that’s where all of you come in.

Here at NC State, you know something about innovation.  You’ve got one of the largest undergraduate engineering programs in the country.  That's worth cheering for.  (Applause.)  I'm a lawyer by training, and that is nice.  But we need more engineers.  (Applause.)   

Companies like Cisco and IBM, they come to this school when they’re looking to hire because of the quality of the engineering program.  And over at Centennial Campus -- (applause) -- some very smart people experiment in state-of-the-art facilities to figure out everything from how to design better fireproof fabrics to how to better protect our computer systems. 

So the reason I came here today is because we've got to do more to connect universities like NC State with companies like Vacon to make America the number-one place in the world to open new businesses and create new jobs.  We want to do that here in North Carolina, and we want to do this all across America.  (Applause.)   

Now, it’s been more than five years since a devastating recession cost this country millions of jobs, and it hurt North Carolina pretty tough.  But everyone here knows that even before the recession hit, the middle class had been hitting -- getting hit on the chin for years before that.  Here in North Carolina, factories were shutting their doors, jobs were getting shipped overseas.  Wages and incomes were flat-lining, so even if you had a job you didn’t see your standard of living going up very much. Meanwhile the cost of everything from college tuition to groceries did go up. 

So when I took office, we decided to focus on the hard work of rebuilding our economy on a new foundation for growth and prosperity, and to make sure that everybody had a chance to get ahead.  And thanks to the hard work and sacrifice of the American people, the good news is the economy is growing stronger.  (Applause.)  Our businesses have now created more than 8 million new jobs since we hit bottom.  Because of an all-of-the-above strategy for American energy, for the first time in nearly two decades we produce more oil here in the United States than we buy from the rest of the world.  That hasn't happened in a very long time.  (Applause.)  We now generate more renewable energy than ever before, more natural gas than anybody on the planet.  (Applause.)  We're lowering energy costs, reducing pollution. 

Health care costs are growing at their slowest rate in 50 years.  For the first time since the 1990s, health care costs eat up a smaller chunk of our economy, and part of that, yes, has to do with the Affordable Care Act.  (Applause.)  And so over time, that means bigger paychecks for middle-class families, bigger savings for companies that are looking to hire.  And along with all this, since I took office we've cut our deficits by more than half.  (Applause.) 

So we've made progress.  And that’s what I mean when I say this can be a breakthrough year for America.  The pieces are all there to start bringing back more of the jobs that we've lost over the past decade.  A lot of companies around the world are starting to talk about bringing jobs back to the United States, bringing jobs back to places like North Carolina -- partly because we got cheap energy costs, we’ve got the best workers in the world, we’ve got the best university systems in the world -- (applause) -- and we’ve got the largest market in the world.

So the pieces are there to restore some of the ground that the middle class has lost in recent decades, start raising wages for American families.  But it requires us to take action.  This has to be a year of action.

And here in North Carolina, you’re doing your part to create good jobs that pay good wages.  Congress has to do its part, too -- because restoring the American Dream of opportunity for everyone who’s willing to work for it is something that should unite the country.  That shouldn’t divide the country.  That's what we should be aspiring to -- that everybody has a shot if they're willing to work hard and take responsibility.  (Applause.)

So in the short term, one thing Congress could do is listen to the majority of the American people and restore the unemployment insurance for Americans who need it.   (Applause.)  And let me just make an aside here.  North Carolina still has a higher-than-average unemployment rate, so this is important to this state.  Folks aren’t looking for a handout.  They're not looking for special treatment.  There are a lot of people who are sending our resumes every single day, but the market -- the job market is still tough in pockets around the country, and people need support, a little help, so they can look after their families while they’re looking for a new job.  (Applause.)  So Congress should do the right thing and extend this vital lifeline for millions of Americans. 

Of course, that's just short term.  Long term, the challenge of making sure everybody who works hard can get ahead in today’s economy is so important that we can't wait for Congress to solve it.  Where I can act on my own without Congress, I’m going to do so.

And today, I’m here to act -- to help make Raleigh-Durham, and America, a magnet for the good, high-tech manufacturing jobs that a growing middle class requires and that are going to continue to keep this country on the cutting edge.  (Applause.)  

So we’ve already got some success to build on.  Manufacturing is a bright spot in this economy.  For decades we’d been losing manufacturing jobs.  But now our manufacturers have added over the last four years more than 550,000 new jobs, including almost 80,000 manufacturing jobs in the last five months alone.  So we want to keep that trend going.  We want to build on the kind of work that's being done in places like NC State to develop technology that leads to new jobs and entire new industries. 

So a little over a year ago, we launched America’s first manufacturing innovation institute in Youngstown, Ohio.  And what it was is a partnership; it includes companies and colleges.  They came up with a joint plan.  They were focusing on developing 3D printing technology and training workers with the skills required to master that technology. 

Now, that was a great start.  We got one going and some of the folks from Youngstown are here today, and we congratulate them on the great work they’re doing.  But here’s the problem:  We created one; in Germany, they’ve already got about 60 of these manufacturing innovation hubs.  So we’ve got some catching up to do.  I don’t want the next big job-creating discovery, the research and technology to be in Germany or China or Japan.  I want it to be right here in the United States of America.  I want it to be right here in North Carolina.  (Applause.) 

So what I said was in my State of the Union address last year, I said to Congress, let’s set up a network of at least 15 of these manufacturing hubs all across America, focusing on different opportunities where we can get manufacturing innovation going, create jobs, make sure that the research is tied to businesses that are actually hiring, and those synergies are going to grow the economy regionally and ultimately across the whole country. 

And last summer, as part of our push to create middle-class jobs, I said, you know what, let’s not settle on 15, let’s just go ahead and do 45.  Republicans and Democrats in the House and the Senate introduced bills that would get this going -- that’s good.  But they haven’t passed the bills yet.  So I want to encourage them to continue to pass the bills that would create 45 of these manufacturing hubs.  In the meantime, I’m directing my administration to move forward where we can on our own.

So today, after almost a year of competition, I’m pleased to announce America’s newest high-tech manufacturing hub -- which is going to be focused on the next generation of power electronics  -- is going to be based right here in Raleigh, North Carolina.  (Applause.)  That’s good news.  That’s good news.  (Applause.)   That's good news.  It’s great.  (Applause.) 

So just like the hub in Youngstown, what we’re calling the Next Generation Power Electronics Innovation Institute is bringing together leading companies, universities, and federal research all together under one roof.  Folks at this hub are going to develop what are called “wide bandgap semiconductors.” 

Now, I was just schooled on all this.  (Laughter.)  I’m not sure that I’m fully qualified to describe the technical elements of this.  Raise your hand if you know what that is.  (Laughter.) See, we’ve got some.  (Laughter.)  For all you non-engineers out there, here’s what it means in the simplest terms.  Semiconductors, obviously, are at the heart of every piece of the electronics that we use every day -- your smartphone, your television set, these days everything.  Public research helped develop them decades ago, and then that research allowed commercialization, new products, new services, and obviously not only improved the economy, but greatly enhanced our lives.  So we want companies to run with the ball also, but first we’ve got to make sure that we’re also doing the research and linking it up to those companies. 

Wide bandgap semiconductors, they’re special because they lose up to 90 percent less power; they can operate at higher temperatures than normal semiconductors.  So that means they can make everything from cell phones to industrial motors to electric cars smaller, faster, cheaper.  There are going to be still applications for the traditional semiconductors, but these can be focused on certain areas that will vastly improve energy efficiency, vastly improve the quality of our lives.  And the country that figures out how to do this first, and the companies that figure how to do this best, they’re the ones that are going to attract the jobs that come with it.

So this manufacturing hub, right here, focused in North Carolina --

AUDIENCE MEMBER:  GoPack!

THE PRESIDENT:  GoPack!  (Laughter and applause.)  This hub is going to make it easier for these wide bandgap semiconductors to go from the drawing board to the factory floor to the store shelves -- or not necessarily the store shelves, because what I just saw, for example, were these really big pieces of equipment that are attached to utility companies or help windmills translate the power they’re generating actually get transmitted to where they’re going to be finally used.  It’s going to bring together chip designers and manufacturers with companies like Vacon and Delphi that stand to benefit from these new technologies.  And this will help big companies, but it’s also going to help small companies, because they’re going to be able to use equipment they otherwise wouldn’t be able to afford to test and prototype new products.  And of course, American workers will be able to come right here, to North Carolina, to learn the skills that companies are looking for.  And the next generation of manufacturing will be an American revolution.

So in the coming weeks, we’re going to be launching two more of these innovation hubs; we’ve already got them all planned out. One is going to focus on digital design and manufacturing; another is going to be developing lightweight metals that could transform everything from wind turbines to military vehicles.  And together, they’re going to help build new partnerships in areas that show potential.  They’ll help to lift up our communities.  They’ll help spark the technology and research that will create the new industries, the good jobs required for folks to punch their ticket into the middle class. 

And that’s what America is all about.  We have always been about research, innovation, and then commercializing that research and innovation so that everybody can benefit.  And then we start selling our stuff all around the world, we start exporting it.  And we create good jobs, and middle-class families then are able to buy the products that result from this innovation.  And you get a virtuous cycle where everybody is doing better, and nobody is left behind.  And that’s what we can do if we pull together the way those companies and universities have pulled together as part of this bid. 

Now, this is going to be a long haul.  We're not going to turn things around overnight.  A lot of jobs were lost in the textile industry and furniture-making.  But the great news is, is that ultimately, because our people are good and smart and hardworking and willing to take risks, we are going to be able to start bringing those jobs back to America.  And that’s what we do.  (Applause.)  When times get tough, we don’t give up.  We get up.  We innovate.  We adapt.  We keep going.  We look to the future.  (Applause.) 

And I want all of you to know, North Carolina, that as long as we keep working together and fighting together and doing what it takes to widen the circle of opportunity for more Americans so nobody is left behind -- if you work hard, if you are responsible, then you can go out there, get a skill, train yourself, find a job, support a family.  If we work together, and that’s our focus, there’s nothing we can’t achieve.  (Applause.) There’s no limit to how far we can go.

So congratulations, North Carolina State.  Congratulations, Raleigh.  Let’s get to work.  God bless you.  God bless America. (Applause.)

END
1:31 P.M. EST

Remarks by the President Before Cabinet Meeting

Cabinet Room

11:04 A.M. EST

THE PRESIDENT:  I’m glad to be able to pull together my Cabinet for the first official Cabinet meeting of the year, and I want to wish everybody a wonderful New Year.

We’ve got a lot to do in 2014.  As I’ve said before, this is going to be a year of action.  We’ve seen the economy improve.  We want to maximize the pace of our recovery, but most importantly, we want to make sure that every American is able to benefit from that recovery, that we’re not leaving anybody behind and everybody is getting a fair shot.

I was very pleased to see the House and the Senate agree to a budget and to put forward a bill that will fund our government at levels that allow us to take some important steps to provide the services and the help that Americans need and American families need in order to get ahead in this economy.  And so I would urge that Congress pass that funding measure as quickly as possible so that all these agencies have some certainty around their budgets. 

And Congress is going to have some additional work over the course of the next several weeks; specifically, it’s important that they do something about unemployment insurance.  Although we’ve seen improvements in the economy and job creation in our economy, I think we all know that there are a lot of hardworking Americans out there who are desperately looking for a job, and unemployment insurance is not only good for them and necessary for them, but it’s also good for our economy as a whole and will actually accelerate our growth if we go ahead and get that done. We know that we need to get immigration reform done -- a major piece of unfinished business from last year. 

So Congress is going to be busy, and I’m looking forward to working with Democrats and Republicans, House members and Senate members, to try to continue to advance the economic recovery and to provide additional ladders of opportunity for everybody.  But one of the things that I’ll be emphasizing in this meeting is the fact that we are not just going to be waiting for a legislation in order to make sure that we’re providing Americans the kind of help that they need.  I’ve got a pen and I’ve got a phone -- and I can use that pen to sign executive orders and take executive actions and administrative actions that move the ball forward in helping to make sure our kids are getting the best education possible and making sure that our businesses are getting the kind of support and help they need to grow and advance to make sure that people are getting the skills that they need to get those jobs that our businesses are creating. 

And I’ve got a phone that allows me to convene Americans from every walk of life -- non-profits, businesses, the private sector, universities -- to try to bring more and more Americans together around what I think is a unifying theme:  making sure that this is a country where if you work hard, you can make it. 

So one of the things that I’m going to be talking to my Cabinet about is how do we use all the tools available to us, not just legislation, in order to advance a mission that I think unifies all Americans -- the belief that everybody has got to take responsibility, everybody has got to work hard, but if you do, that you can support a family and meet the kinds of obligations that you have to yourself and your family but also to your communities and to your nation.

We’re already seeing some examples of that.  In fact, this week I’ll be traveling tomorrow down to North Carolina to talk about a manufacturing innovation hub that we initiated, talked about in our State of the Union last year.  It’s going to be moving forward.  And there are a lot of folks down in North Carolina who are excited, because it’s a perfect example of the kind of public-private partnership that can really make a difference in growing our economy faster and creating the kinds of good-paying jobs that help people get ahead.

I’ll also be pulling together university presidents from all across the country to talk about how we can make college education more accessible to more young people around this country.  And we’re going to be bringing CEOs from across the country to also have a conversation about commitments they can make to start hiring the long-term unemployed -- people who oftentimes have terrific skills, have a great work ethic, have wonderful experience, but because of the misfortune of having been laid off or lost their jobs during the depths of an extremely severe recession, have been out of work long enough that now we’re finding it’s very hard for them to just get in the door and make their case to an employer; that there’s some screening that’s taking place for people who have been out of work for more than a month or two and it makes it harder for them to get the kind of shot that they need.  And we’re going to try to work with CEOs to make a pledge that we’re going to take a second look at these Americans who are very eager to get back to work and have the capacity to do so, but aren’t getting the kind of shot that they need.

So, overall, the message to my Cabinet and that will be amplified in our State of the Union is that we need all hands on deck to build on the recovery that we’re already seeing.  The economy is improving, but it could be improving even faster.  A lot of people are doing better than they were in the depths of the recession, but there are still a lot of folks who need help. And I am absolutely confident that in 2014, if we’re all working in the same direction and not worrying so much about political points but worrying much more about getting the job done, that we can see a lot of improvement this year, and people will look back on 2014 as a year in which we didn’t just turn the corner in the aggregate for the economy, but everybody started feeling a little more optimistic about our futures.

So I’m looking forward to the discussion.  And with that, I’m going to kick you all out.  (Laughter.)

Q    How do you think the NSA is going to affect your year this year?  And will you address it on Friday?

Q    Have you finished your review on the NSA?

THE PRESIDENT:  Actually, it’s getting close.  So I’ll have quite a bit to say about that very soon. 

Thank you, guys.
   
END
11:11 A.M. EST