April 3, 2012
Marriott Wardman Park, Washington, D.C. 12:35 P.M. EDT
THE PRESIDENT: Thank you very much. (Applause.) Please have a seat.
Well, good afternoon, and thank you to Dean Singleton and the board of
the Associated Press for inviting me here today. It is a pleasure to
speak to all of you -- and to have a microphone that I can see.
(Laughter.) Feel free to transmit any of this to Vladimir if you see
him. (Laughter.)
Clearly, we’re already in the beginning months of another long, lively
election year. There will be gaffes and minor controversies, be hot
mics and Etch-a-Sketch moments. You will cover every word that we say,
and we will complain vociferously about the unflattering words that you
write -- unless, of course, you're writing about the other guy -- in
which case, good job. (Laughter.)
But there are also big, fundamental issues at stake right now -- issues
that deserve serious debate among every candidate, and serious coverage
among every reporter. Whoever he may be, the next President will
inherit an economy that is recovering, but not yet recovered, from the
worst economic calamity since the Great Depression. Too many Americans
will still be looking for a job that pays enough to cover their bills or
their mortgage. Too many citizens will still lack the sort of
financial security that started slipping away years before this
recession hit. A debt that has grown over the last decade, primarily as
a result of two wars, two massive tax cuts, and an unprecedented
financial crisis, will have to be paid down.
In the face of all these challenges, we're going to have to answer a
central question as a nation: What, if anything, can we do to restore a
sense of security for people who are willing to work hard and act
responsibly in this country? Can we succeed as a country where a
shrinking number of people do exceedingly well, while a growing number
struggle to get by? Or are we better off when everyone gets a fair
shot, and everyone does their fair share, and everyone plays by the same
rules?
This is not just another run-of-the-mill political debate. I’ve said
it’s the defining issue of our time, and I believe it. It’s why I ran in
2008. It’s what my presidency has been about. It’s why I’m running
again. I believe this is a make-or-break moment for the middle class,
and I can’t remember a time when the choice between competing visions of
our future has been so unambiguously clear.
Keep in mind, I have never been somebody who believes that government
can or should try to solve every problem. Some of you know my first job
in Chicago was working with a group of Catholic churches that often did
more good for the people in their communities than any government
program could. In those same communities I saw that no education
policy, however well crafted, can take the place of a parent’s love and
attention.
As President, I’ve eliminated dozens of programs that weren’t working,
and announced over 500 regulatory reforms that will save businesses and
taxpayers billions, and put annual domestic spending on a path to become
the smallest share of the economy since Dwight Eisenhower held this
office -- since before I was born. I know that the true engine of job
creation in this country is the private sector, not Washington, which is
why I’ve cut taxes for small business owners 17 times over the last
three years.
So I believe deeply that the free market is the greatest force for
economic progress in human history. My mother and the grandparents who
raised me instilled the values of self-reliance and personal
responsibility that remain the cornerstone of the American idea. But I
also share the belief of our first Republican President, Abraham Lincoln
-- a belief that, through government, we should do together what we
cannot do as well for ourselves.
That belief is the reason this country has been able to build a strong
military to keep us safe, and public schools to educate our children.
That belief is why we’ve been able to lay down railroads and highways to
facilitate travel and commerce. That belief is why we’ve been able to
support the work of scientists and researchers whose discoveries have
saved lives, and unleashed repeated technological revolutions, and led
to countless new jobs and entire industries.
That belief is also why we’ve sought to ensure that every citizen can
count on some basic measure of security. We do this because we
recognize that no matter how responsibly we live our lives, any one of
us, at any moment, might face hard times, might face bad luck, might
face a crippling illness or a layoff. And so we contribute to programs
like Medicare and Social Security, which guarantee health care and a
source of income after a lifetime of hard work. We provide unemployment
insurance, which protects us against unexpected job loss and
facilitates the labor mobility that makes our economy so dynamic. We
provide for Medicaid, which makes sure that millions of seniors in
nursing homes and children with disabilities are getting the care that
they need.
For generations, nearly all of these investments -- from transportation
to education to retirement programs -- have been supported by people in
both parties. As much as we might associate the G.I. Bill with
Franklin Roosevelt, or Medicare with Lyndon Johnson, it was a
Republican, Lincoln, who launched the Transcontinental Railroad, the
National Academy of Sciences, land grant colleges. It was Eisenhower
who launched the Interstate Highway System and new investment in
scientific research. It was Richard Nixon who created the Environmental
Protection Agency, Ronald Reagan who worked with Democrats to save
Social Security. It was George W. Bush who added prescription drug
coverage to Medicare.
What leaders in both parties have traditionally understood is that
these investments aren’t part of some scheme to redistribute wealth from
one group to another. They are expressions of the fact that we are one
nation. These investments benefit us all. They contribute to genuine,
durable economic growth.
Show me a business leader who wouldn’t profit if more Americans could
afford to get the skills and education that today’s jobs require. Ask
any company where they’d rather locate and hire workers –- a country
with crumbling roads and bridges, or one that’s committed to high-speed
Internet and high-speed railroads and high-tech research and
development?
It doesn’t make us weaker when we guarantee basic security for the
elderly or the sick or those who are actively looking for work. What
makes us weaker is when fewer and fewer people can afford to buy the
goods and services our businesses sell, or when entrepreneurs don’t have
the financial security to take a chance and start a new business. What
drags down our entire economy is when there’s an ever-widening chasm
between the ultra-rich and everybody else.
In this country, broad-based prosperity has never trickled down from
the success of a wealthy few. It has always come from the success of a
strong and growing middle class. That’s how a generation who went to
college on the G.I. Bill, including my grandfather, helped build the
most prosperous economy the world has ever known. That’s why a CEO like
Henry Ford made it his mission to pay his workers enough so they could
buy the cars that they made. That’s why research has shown that
countries with less inequality tend to have stronger and steadier
economic growth over the long run.
And yet, for much of the last century, we have been having the same
argument with folks who keep peddling some version of trickle-down
economics. They keep telling us that if we’d convert more of our
investments in education and research and health care into tax cuts --
especially for the wealthy -- our economy will grow stronger. They keep
telling us that if we’d just strip away more regulations, and let
businesses pollute more and treat workers and consumers with impunity,
that somehow we’d all be better off. We’re told that when the wealthy
become even wealthier, and corporations are allowed to maximize their
profits by whatever means necessary, it’s good for America, and that
their success will automatically translate into more jobs and prosperity
for everybody else. That’s the theory.
Now, the problem for advocates of this theory is that we’ve tried their
approach -- on a massive scale. The results of their experiment are
there for all to see. At the beginning of the last decade, the
wealthiest Americans received a huge tax cut in 2001 and another huge
tax cut in 2003. We were promised that these tax cuts would lead to
faster job growth. They did not. The wealthy got wealthier -- we would
expect that. The income of the top 1 percent has grown by more than
275 percent over the last few decades, to an average of $1.3 million a
year. But prosperity sure didn't trickle down.
Instead, during the last decade, we had the slowest job growth in half a
century. And the typical American family actually saw their incomes
fall by about 6 percent, even as the economy was growing.
It was a period when insurance companies and mortgage lenders and
financial institutions didn’t have to abide by strong enough
regulations, or they found their ways around them. And what was the
result? Profits for many of these companies soared. But so did people’s
health insurance premiums. Patients were routinely denied care, often
when they needed it most. Families were enticed, and sometimes just
plain tricked, into buying homes they couldn’t afford. Huge, reckless
bets were made with other people’s money on the line. And our entire
financial system was nearly destroyed.
So we tried this theory out. And you would think that after the
results of this experiment in trickle-down economics, after the results
were made painfully clear, that the proponents of this theory might show
some humility, might moderate their views a bit. You'd think they’d
say, you know what, maybe some rules and regulations are necessary to
protect the economy and prevent people from being taken advantage of by
insurance companies or credit card companies or mortgage lenders.
Maybe, just maybe, at a time of growing debt and widening inequality, we
should hold off on giving the wealthiest Americans another round of big
tax cuts. Maybe when we know that most of today’s middle-class jobs
require more than a high school degree, we shouldn’t gut education, or
lay off thousands of teachers, or raise interest rates on college loans,
or take away people’s financial aid.
But that’s exactly the opposite of what they’ve done. Instead of
moderating their views even slightly, the Republicans running Congress
right now have doubled down, and proposed a budget so far to the right
it makes the Contract with America look like the New Deal. (Laughter.)
In fact, that renowned liberal, Newt Gingrich, first called the
original version of the budget "radical" and said it would contribute to
"right-wing social engineering." This is coming from Newt Gingrich.
And yet, this isn’t a budget supported by some small rump group in the
Republican Party. This is now the party’s governing platform. This is
what they’re running on. One of my potential opponents, Governor
Romney, has said that he hoped a similar version of this plan from last
year would be introduced as a bill on day one of his presidency. He
said that he’s “very supportive” of this new budget, and he even called
it "marvelous" -- which is a word you don’t often hear when it comes to
describing a budget. (Laughter.) It’s a word you don’t often hear
generally. (Laughter.)
So here’s what this "marvelous" budget does. Back in the summer, I
came to an agreement with Republicans in Congress to cut roughly $1
trillion in annual spending. Some of these cuts were about getting rid
of waste; others were about programs that we support but just can’t
afford given our deficits and our debt. And part of the agreement was a
guarantee of another trillion in savings, for a total of about $2
trillion in deficit reduction.
This new House Republican budget, however, breaks our bipartisan
agreement and proposes massive new cuts in annual domestic spending –-
exactly the area where we’ve already cut the most. And I want to
actually go through what it would mean for our country if these cuts
were to be spread out evenly. So bear with me. I want to go through
this -- because I don’t think people fully appreciate the nature of this
budget.
The year after next, nearly 10 million college students would see their
financial aid cut by an average of more than $1,000 each. There would
be 1,600 fewer medical grants, research grants for things like
Alzheimer’s and cancer and AIDS. There would be 4,000 fewer scientific
research grants, eliminating support for 48,000 researchers, students,
and teachers. Investments in clean energy technologies that are helping
us reduce our dependence on foreign oil would be cut by nearly a
fifth.
If this budget becomes law and the cuts were applied evenly, starting
in 2014, over 200,000 children would lose their chance to get an early
education in the Head Start program. Two million mothers and young
children would be cut from a program that gives them access to healthy
food. There would be 4,500 fewer federal grants at the Department of
Justice and the FBI to combat violent crime, financial crime, and help
secure our borders. Hundreds of national parks would be forced to close
for part or all of the year. We wouldn’t have the capacity to enforce
the laws that protect the air we breathe, the water we drink, or the
food that we eat.
Cuts to the FAA would likely result in more flight cancellations,
delays, and the complete elimination of air traffic control services in
parts of the country. Over time, our weather forecasts would become
less accurate because we wouldn’t be able to afford to launch new
satellites. And that means governors and mayors would have to wait
longer to order evacuations in the event of a hurricane.
That’s just a partial sampling of the consequences of this budget.
Now, you can anticipate Republicans may say, well, we’ll avoid some of
these cuts -- since they don’t specify exactly the cuts that they would
make. But they can only avoid some of these cuts if they cut even
deeper in other areas. This is math. If they want to make smaller cuts
to medical research that means they’ve got to cut even deeper in
funding for things like teaching and law enforcement. The converse is
true as well. If they want to protect early childhood education, it
will mean further reducing things like financial aid for young people
trying to afford college.
Perhaps they will never tell us where the knife will fall -- but you
can be sure that with cuts this deep, there is no secret plan or formula
that will be able to protect the investments we need to help our
economy grow.
This is not conjecture. I am not exaggerating. These are facts. And
these are just the cuts that would happen the year after next.
If this budget became law, by the middle of the century, funding for
the kinds of things I just mentioned would have to be cut by about 95
percent. Let me repeat that. Those categories I just mentioned we
would have to cut by 95 percent. As a practical matter, the federal
budget would basically amount to whatever is left in entitlements,
defense spending, and interest on the national debt -- period. Money
for these investments that have traditionally been supported on a
bipartisan basis would be practically eliminated.
And the same is true for other priorities like transportation, and
homeland security, and veterans programs for the men and women who have
risked their lives for this country. This is not an exaggeration.
Check it out yourself.
And this is to say nothing about what the budget does to health care.
We’re told that Medicaid would simply be handed over to the states --
that's the pitch: Let's get it out of the central bureaucracy. The
states can experiment. They'll be able to run the programs a lot
better. But here's the deal the states would be getting. They would
have to be running these programs in the face of the largest cut to
Medicaid that has ever been proposed -- a cut that, according to one
nonpartisan group, would take away health care for about 19 million
Americans -- 19 million.
Who are these Americans? Many are someone’s grandparents who, without
Medicaid, won't be able to afford nursing home care without Medicaid.
Many are poor children. Some are middle-class families who have
children with autism or Down’s Syndrome. Some are kids with
disabilities so severe that they require 24-hour care. These are the
people who count on Medicaid.
Then there’s Medicare. Because health care costs keep rising and the
Baby Boom generation is retiring, Medicare, we all know, is one of the
biggest drivers of our long-term deficit. That’s a challenge we have to
meet by bringing down the cost of health care overall so that seniors
and taxpayers can share in the savings.
But here’s the solution proposed by the Republicans in Washington, and
embraced by most of their candidates for president: Instead of being
enrolled in Medicare when they turn 65, seniors who retire a decade from
now would get a voucher that equals the cost of the second cheapest
health care plan in their area. If Medicare is more expensive than that
private plan, they’ll have to pay more if they want to enroll in
traditional Medicare. If health care costs rise faster than the amount
of the voucher -- as, by the way, they’ve been doing for decades --
that’s too bad. Seniors bear the risk. If the voucher isn’t enough to
buy a private plan with the specific doctors and care that you need,
that's too bad.
So most experts will tell you the way this voucher plan encourages
savings is not through better care at cheaper cost. The way these
private insurance companies save money is by designing and marketing
plans to attract the youngest and healthiest seniors -- cherry-picking
-- leaving the older and sicker seniors in traditional Medicare, where
they have access to a wide range of doctors and guaranteed care. But
that, of course, makes the traditional Medicare program even more
expensive, and raise premiums even further.
The net result is that our country will end up spending more on health
care, and the only reason the government will save any money -- it won’t
be on our books -- is because we’ve shifted it to seniors. They’ll
bear more of the costs themselves. It’s a bad idea, and it will
ultimately end Medicare as we know it.
Now, the proponents of this budget will tell us we have to make all
these draconian cuts because our deficit is so large; this is an
existential crisis, we have to think about future generations, so on and
so on. And that argument might have a shred of credibility were it not
for their proposal to also spend $4.6 trillion over the next decade on
lower tax rates.
We’re told that these tax cuts will supposedly be paid for by closing
loopholes and eliminating wasteful deductions. But the Republicans in
Congress refuse to list a single tax loophole they are willing to
close. Not one. And by the way, there is no way to get even close to
$4.6 trillion in savings without dramatically reducing all kinds of tax
breaks that go to middle-class families -- tax breaks for health care,
tax breaks for retirement, tax breaks for homeownership.
Meanwhile, these proposed tax breaks would come on top of more than a
trillion dollars in tax giveaways for people making more than $250,000 a
year. That’s an average of at least $150,000 for every millionaire in
this country -- $150,000.
Let’s just step back for a second and look at what $150,000 pays for: A
year’s worth of prescription drug coverage for a senior citizen. Plus a
new school computer lab. Plus a year of medical care for a returning
veteran. Plus a medical research grant for a chronic disease. Plus a
year’s salary for a firefighter or police officer. Plus a tax credit to
make a year of college more affordable. Plus a year’s worth of
financial aid. One hundred fifty thousand dollars could pay for all of
these things combined -- investments in education and research that are
essential to economic growth that benefits all of us. For $150,000,
that would be going to each millionaire and billionaire in this
country. This budget says we’d be better off as a country if that’s how
we spend it.
This is supposed to be about paying down our deficit? It’s laughable.
The bipartisan Simpson-Bowles commission that I created -- which the
Republicans originally were for until I was for it -- that was about
paying down the deficit. And I didn’t agree with all the details. I
proposed about $600 billion more in revenue and $600 billion -- I'm
sorry -- it proposed about $600 billion more in revenue and about $600
billion more in defense cuts than I proposed in my own budget. But
Bowles-Simpson was a serious, honest, balanced effort between Democrats
and Republicans to bring down the deficit. That’s why, although it
differs in some ways, my budget takes a similarly balanced approach:
Cuts in discretionary spending, cuts in mandatory spending, increased
revenue.
This congressional Republican budget is something different
altogether. It is a Trojan Horse. Disguised as deficit reduction
plans, it is really an attempt to impose a radical vision on our
country. It is thinly veiled social Darwinism. It is antithetical to
our entire history as a land of opportunity and upward mobility for
everybody who’s willing to work for it; a place where prosperity doesn’t
trickle down from the top, but grows outward from the heart of the
middle class. And by gutting the very things we need to grow an economy
that’s built to last -- education and training, research and
development, our infrastructure -- it is a prescription for decline.
And everybody here should understand that because there's very few
people here who haven't benefitted at some point from those investments
that were made in the '50s and the '60s and the '70s and the '80s.
That’s part of how we got ahead. And now, we're going to be pulling up
those ladders up for the next generation?
So in the months ahead, I will be fighting as hard as I know how for
this truer vision of what the United States of America is all about.
Absolutely, we have to get serious about the deficit. And that will
require tough choices and sacrifice. And I’ve already shown myself
willing to make these tough choices when I signed into law the biggest
spending cut of any President in recent memory. In fact, if you adjust
for the economy, the Congressional Budget Office says the overall
spending next year will be lower than any year under Ronald Reagan.
And I’m willing to make more of those difficult spending decisions in
the months ahead. But I’ve said it before and I’ll say it again --
there has to be some balance. All of us have to do our fair share.
I’ve also put forward a detailed plan that would reform and strengthen
Medicare and Medicaid. By the beginning of the next decade, it achieves
the same amount of annual health savings as the plan proposed by
Simpson-Bowles -- the Simpson-Bowles commission, and it does so by
making changes that people in my party haven’t always been comfortable
with. But instead of saving money by shifting costs to seniors, like
the congressional Republican plan proposes, our approach would lower the
cost of health care throughout the entire system. It goes after
excessive subsidies to prescription drug companies. It gets more
efficiency out of Medicaid without gutting the program. It asks the
very wealthiest seniors to pay a little bit more. It changes the way we
pay for health care -- not by procedure or the number of days spent in a
hospital, but with new incentives for doctors and hospitals to improve
their results.
And it slows the growth of Medicare costs by strengthening an
independent commission -- a commission not made up of bureaucrats from
government or insurance companies, but doctors and nurses and medical
experts and consumers, who will look at all the evidence and recommend
the best way to reduce unnecessary health care spending while protecting
access to the care that the seniors need.
We also have a much different approach when it comes to taxes -- an
approach that says if we’re serious about paying down our debt, we can’t
afford to spend trillions more on tax cuts for folks like me, for
wealthy Americans who don’t need them and weren’t even asking for them,
and that the country cannot afford. At a time when the share of national
income flowing to the top 1 percent of people in this country has
climbed to levels last seen in the 1920s, those same folks are paying
taxes at one of the lowest rates in 50 years. As both I and Warren
Buffett have pointed out many times now, he’s paying a lower tax rate
than his secretary. That is not fair. It is not right.
And the choice is really very simple. If you want to keep these tax
rates and deductions in place -- or give even more tax breaks to the
wealthy, as the Republicans in Congress propose -- then one of two
things happen: Either it means higher deficits, or it means more
sacrifice from the middle class. Seniors will have to pay more for
Medicare. College students will lose some of their financial aid.
Working families who are scraping by will have to do more because the
richest Americans are doing less. I repeat what I’ve said before: That
is not class warfare, that is not class envy, that is math.
If that’s the choice that members of Congress want to make, then we’re
going to make sure every American knows about it. In a few weeks, there
will be a vote on what we’ve called the Buffett Rule. Simple concept:
If you make more than a million dollars a year -- not that you have a
million dollars -- if you make more than a million dollars annually,
then you should pay at least the same percentage of your income in taxes
as middle-class families do. On the other hand, if you make under
$250,000 a year -- like 98 percent of American families do -- then your
taxes shouldn’t go up. That’s the proposal.
Now, you’ll hear some people point out that the Buffett Rule alone
won’t raise enough revenue to solve our deficit problems. Maybe not,
but it’s definitely a step in the right direction. And I intend to keep
fighting for this kind of balance and fairness until the other side
starts listening, because I believe this is what the American people
want. I believe this is the best way to pay for the investments we need
to grow our economy and strengthen the middle class. And by the way, I
believe it’s the right thing to do.
This larger debate that we will be having and that you will be covering
in the coming year about the size and role of government, this debate
has been with us since our founding days. And during moments of great
challenge and change, like the ones that we’re living through now, the
debate gets sharper; it gets more vigorous. That’s a good thing. As a
country that prizes both our individual freedom and our obligations to
one another, this is one of the most important debates that we can
have.
But no matter what we argue or where we stand, we have always held
certain beliefs as Americans. We believe that in order to preserve our
own freedoms and pursue our own happiness, we can’t just think about
ourselves. We have to think about the country that made those liberties
possible. We have to think about our fellow citizens with whom we
share a community. We have to think about what’s required to preserve
the American Dream for future generations.
And this sense of responsibility -- to each other and our country --
this isn’t a partisan feeling. This isn’t a Democratic or Republican
idea. It’s patriotism. And if we keep that in mind, and uphold our
obligations to one another and to this larger enterprise that is
America, then I have no doubt that we will continue our long and
prosperous journey as the greatest nation on Earth.
Thank you. God bless you. God bless the United States of America. (Applause.) Thank you.
MR. SINGLETON: Thank you, Mr. President. We appreciate so much you
being with us today. I have some questions from the audience, which I
will ask -- and I'll be more careful than I was last time I did this.
Republicans have been sharply critical of your budget ideas as well.
What can you say to the Americans who just want both sides to stop
fighting and get some work done on their behalf?
THE PRESIDENT: Well, I completely understand the American people’s
frustrations, because the truth is that these are eminently solvable
problems. I know that Christine Lagarde is here from the IMF, and she’s
looking at the books of a lot of other countries around the world. The
kinds of challenges they face fiscally are so much more severe than
anything that we confront -- if we make some sensible decisions.
So the American people’s impulses are absolutely right. These are
solvable problems if people of good faith came together and were willing
to compromise. The challenge we have right now is that we have on one
side, a party that will brook no compromise. And this is not just my
assertion. We had presidential candidates who stood on a stage and were
asked, “Would you accept a budget package, a deficit reduction plan,
that involved $10 of cuts for every dollar in revenue increases?”
Ten-to-one ratio of spending cuts to revenue. Not one of them raised
their hand.
Think about that. Ronald Reagan, who, as I recall, is not accused of
being a tax-and-spend socialist, understood repeatedly that when the
deficit started to get out of control, that for him to make a deal he
would have to propose both spending cuts and tax increases. Did it
multiple times. He could not get through a Republican primary today.
So let's look at Bowles-Simpson. Essentially, my differences with
Bowles-Simpson were I actually proposed less revenue and slightly lower
defense spending cuts. The Republicans want to increase defense
spending and take in no revenue, which makes it impossible to balance
the deficit under the terms that Bowles-Simpson laid out -- unless you
essentially eliminate discretionary spending. You don't just cut
discretionary spending. Everything we think of as being pretty
important -- from education to basic science and research to
transportation spending to national parks to environmental protection --
we'd essentially have to eliminate.
I guess another way of thinking about this is -- and this bears on your
reporting. I think that there is oftentimes the impulse to suggest
that if the two parties are disagreeing, then they're equally at fault
and the truth lies somewhere in the middle, and an equivalence is
presented -- which reinforces I think people's cynicism about Washington
generally. This is not one of those situations where there's an
equivalence. I've got some of the most liberal Democrats in Congress
who were prepared to make significant changes to entitlements that go
against their political interests, and who said they were willing to do
it. And we couldn't get a Republican to stand up and say, we'll raise
some revenue, or even to suggest that we won't give more tax cuts to
people who don't need them.
And so I think it's important to put the current debate in some
historical context. It's not just true, by the way, of the budget.
It's true of a lot of the debates that we're having out here.
Cap and trade was originally proposed by conservatives and Republicans
as a market-based solution to solving environmental problems. The first
President to talk about cap and trade was George H.W. Bush. Now you've
got the other party essentially saying we shouldn’t even be thinking
about environmental protection; let's gut the EPA.
Health care, which is in the news right now -- there's a reason why
there's a little bit of confusion in the Republican primary about health
care and the individual mandate since it originated as a conservative
idea to preserve the private marketplace in health care while still
assuring that everybody got covered, in contrast to a single-payer
plan. Now, suddenly, this is some socialist overreach.
So as all of you are doing your reporting, I think it's important to
remember that the positions I'm taking now on the budget and a host of
other issues, if we had been having this discussion 20 years ago, or
even 15 years ago, would have been considered squarely centrist
positions. What's changed is the center of the Republican Party. And
that’s certainly true with the budget.
MR. SINGLETON: Mr. President, the managing director of the (inaudible)
for continuation of United States leadership (inaudible) economic
issues, and underscored the need for a lower deficit and lower debt.
How can you respond to that claim?
THE PRESIDENT: Well, look, she's absolutely right. It's interesting,
when I travel around the world at these international fora -- and I've
said this before -- the degree to which America is still the one
indispensable nation, the degree to which, even as other countries are
rising and their economies are expanding, we are still looked to for
leadership, for agenda setting -- not just because of our size, not just
because of our military power, but because there is a sense that unlike
most superpowers in the past, we try to set out a set of universal
rules, a set of principles by which everybody can benefit.
And that’s true on the economic front as well. We continue to be the
world’s largest market, an important engine for economic growth. We
can’t return to a time when by simply borrowing and consuming, we end up
driving global economic growth.
I said this a few months after I was elected at the first G20 summit. I
said the days when Americans using their credit cards and home equity
loans finance the rest of the world’s growth by taking in imports from
every place else -- those days are over. On the other hand, we continue
to be a extraordinarily important market and foundation for global
economic growth.
We do have to take care of our deficits. I think Christine has spoken
before, and I think most economists would argue as well, that the
challenge when it comes to our deficits is not short-term discretionary
spending, which is manageable. As I said before and I want to repeat,
as a percentage of our GDP, our discretionary spending -- all the things
that the Republicans are proposing cutting -- is actually lower than
it's been since Dwight Eisenhower. There has not been some massive
expansion of social programs, programs that help the poor, environmental
programs, education programs. That’s not our problem.
Our problem is that our revenue has dropped down to between 15 and 16
percent -- far lower than it has been historically, certainly far lower
than it was under Ronald Reagan -- at the same time as our health care
costs have surged, and our demographics mean that there is more and more
pressure being placed on financing our Medicare, Medicaid and Social
Security programs.
So at a time when the recovery is still gaining steam, and unemployment
is still very high, the solution should be pretty apparent. And that
is even as we continue to make investments in growth today -- for
example, putting some of our construction workers back to work
rebuilding schools and roads and bridges, or helping states to rehire
teachers at a time when schools are having a huge difficulty retaining
quality teachers in the classroom -- all of which would benefit our
economy, we focus on a long-term plan to stabilize our revenues at a
responsible level and to deal with our health care programs in a
responsible way. And that's exactly what I'm proposing.
And what we've proposed is let's go back, for folks who are making more
than $250,000 a year, to levels that were in place during the Clinton
era, when wealthy people were doing just fine, and the economy was
growing a lot stronger than it did after they were cut. And let's take
on Medicare and Medicaid in a serious way -- which is not just a matter
of taking those costs off the books, off the federal books, and pushing
them onto individual seniors, but let's actually reduce health care
costs. Because we spend more on health care with not as good outcomes
as any other advanced, developed nation on Earth.
And that would seem to be a sensible proposal. The problem right now
is not the technical means to solve it. The problem is our politics.
And that's part of what this election and what this debate will need to
be about, is, are we, as a country, willing to get back to common-sense,
balanced, fair solutions that encourage our long-term economic growth
and stabilize our budget. And it can be done.
One last point I want to make, Dean, that I think is important, because
it goes to the growth issue. If state and local government hiring were
basically on par to what our current recovery -- on par to past
recoveries, the unemployment rate would probably be about a point lower
than it is right now. If the construction industry were going through
what we normally go through, that would be another point lower. The
challenge we have right now -- part of the challenge we have in terms of
growth has to do with the very specific issues of huge cuts in state
and local government, and the housing market still recovering from this
massive bubble. And that -- those two things are huge headwinds in
terms of growth.
I say this because if we, for example, put some of those construction
workers back to work, or we put some of those teachers back in the
classroom, that could actually help create the kind of virtuous cycle
that would bring in more revenues just because of economic growth, would
benefit the private sector in significant ways. And that could help
contribute to deficit reduction in the short term, even as we still have
to do these important changes to our health care programs over the long
term.
MR. SINGLETON: Mr. President, you said yesterday that it would be
unprecedented for a Supreme Court to overturn laws passed by an elected
Congress. But that is exactly what the Court has done during its entire
existence. If the Court were to overturn individual mandate, what
would you do, or propose to do, for the 30 million people who wouldn’t
have health care after that ruling?
THE PRESIDENT: Well, first of all, let me be very specific. We have
not seen a Court overturn a law that was passed by Congress on a
economic issue, like health care, that I think most people would clearly
consider commerce -- a law like that has not been overturned at least
since Lochner. Right? So we’re going back to the ’30s, pre New Deal.
And the point I was making is that the Supreme Court is the final say
on our Constitution and our laws, and all of us have to respect it, but
it’s precisely because of that extraordinary power that the Court has
traditionally exercised significant restraint and deference to our duly
elected legislature, our Congress. And so the burden is on those who
would overturn a law like this.
Now, as I said, I expect the Supreme Court actually to recognize that
and to abide by well-established precedence out there. I have enormous
confidence that in looking at this law, not only is it constitutional,
but that the Court is going to exercise its jurisprudence carefully
because of the profound power that our Supreme Court has. As a
consequence, we’re not spending a whole bunch of time planning for
contingencies.
What I did emphasize yesterday is there is a human element to this that
everybody has to remember. This is not an abstract exercise. I get
letters every day from people who are affected by the health care law
right now, even though it’s not fully implemented. Young people who are
24, 25, who say, you know what, I just got diagnosed with a tumor.
First of all, I would not have gone to get a check-up if I hadn’t had
health insurance. Second of all, I wouldn’t have been able to afford to
get it treated had I not been on my parent’s plan. Thank you and thank
Congress for getting this done.
I get letters from folks who have just lost their job, their COBRA is
running out. They’re in the middle of treatment for colon cancer or
breast cancer, and they’re worried when their COBRA runs out, if they’re
still sick, what are they going to be able to do because they’re not
going to be able to get health insurance.
And the point I think that was made very ably before the Supreme Court,
but I think most health care economists who have looked at this have
acknowledged, is there are basically two ways to cover people with
preexisting conditions or assure that people can always get coverage
even when they had bad illnesses. One way is the single-payer plan --
everybody is under a single system, like Medicare. The other way is to
set up a system in which you don’t have people who are healthy but don’t
bother to get health insurance, and then we all have to pay for them in
the emergency room.
That doesn’t work, and so, as a consequence, we've got to make sure
that those folks are taking their responsibility seriously, which is
what the individual mandate does.
So I don’t anticipate the Court striking this down. I think they take
their responsibilities very seriously. But I think what's more
important is for all of us, Democrats and Republicans, to recognize that
in a country like ours -- the wealthiest, most powerful country on
Earth -- we shouldn’t have a system in which millions of people are at
risk of bankruptcy because they get sick, or end up waiting until they
do get sick and then go to the emergency room, which involves all of us
paying for it.
MR. SINGLETON: Mr. President, you've been very, very generous with your time, and we appreciate very much you being here.
THE PRESIDENT: Thank you so much, everybody. (Applause.) Thank you.
END
1:35 P.M. EDT
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