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Public Statements

Remarks by President Barack Obama at a Town Hall Meeting

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Date:
Location: Los Angeles, CA


REMARKS BY PRESIDENT BARACK OBAMA AT A TOWN HALL MEETING

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PRESIDENT OBAMA: (Cheers, applause.) Thank you, everybody. (Cheers, applause.) Good to see you. (Cheers, applause.) Thank you. Thank you. Thank you so much. (Cheers and applause continuing.) Thank you. Thank you. Thank you, everybody. Please. (Cheers and applause continuing.) Thank you, everybody. Please have a seat. (Cheers, applause.) Have a seat.

Thank you so much. I --

AUDIENCE MEMBER: We love you!

PRESIDENT OBAMA: It is good to be -- (cheers, applause) -- it is good to be here, although I was hoping that the governor was going to take a little longer on his remarks, because I was standing outside soaking in some rays. (Laughter.) Nothing like California weather. (Cheers, applause.)

I am greatly honored to be joined here by one of the great innovators of state government, somebody who has been leading California through some very difficult times, and somebody who has turned out to be just an outstanding partner with our administration.

I'm grateful for him. I'm grateful for the first lady of California. (Cheers, applause.) Please give it up for Arnold Schwarzenegger and Maria Shriver. Thank you.

Another outstanding public official, somebody who is fighting every day on behalf of the working people of Los Angeles and has a vision for the future for this great city, please give a huge round of applause to your mayor, Antonio Villaraigosa. (Cheers, applause.)

Somebody who's always been ahead of his time and has covered the waterfront in public service and has excelled in each thing that he's done, please, a big round of applause for your attorney general, Jerry Brown. (Cheers, applause.)

Some other friends who are here: State Auditor Elaine Howle -- where's Elaine? Right here. (Cheers, applause.) Speaker of the Assembly, a great supporter of Obama from the start -- (cheers, applause) -- Karen Bass. Senate President pro tem Darrell Steinberg is here. (Cheers, applause.) State Senator Gil Cedillo is here. (Cheers, applause.) Assemblyman John Perez is here. (Cheers, applause.)

Your two wonderful United States senators are not here, but I want you to applaud them anyway because they work for us each and every day, Dianne Feinstein and Barbara Boxer. (Cheers, applause.)

Congresswoman Lucille Roybal-Allard is not here, but she is your congresswoman, so give her a big round of applause. (Cheers, applause.)

And last person I want to mention -- well, two other people I want to mention -- I believe that my Secretary of Labor, Hilda Solis, is here in the house. (Cheers, applause.)

I also want to make this point. We are in a facility named after one of the finest labor leaders in this region's history and in this country's history, Miguel Contreras. (Cheers, applause.) And Miguel's widow is a great friend of mine, a great supporter, a great labor leader in her own right. Please give it up for Maria Elena De Rosa -- Durazo. (Cheers, applause.)

Maria Elena was one of our earliest supporters, at a time when nobody gave us a chance. She said, "Si, se puede," we could do it. (Cheers, applause.) And we're grateful to her. Thank you so much.

It's always nice to get out of Washington -- (laughter) -- at least for a little bit, and to come to places like this.

The climate's nicer. (Cheers.) So is the conversation sometimes. (Laughter.)

So I am looking forward to taking your questions and hearing about your concerns. And I look forward to telling you about the work my administration's doing to address some of those concerns.

But the one thing I don't need to tell you is that these are challenging times. I don't need to tell you this, because you're living it every day. Between December of last year and January of this year, this state lost more than 0.5 million jobs.

One out of every 10 Californians is now out of work. Housing prices here have fallen 20 percent in the past year. You've got one of the highest foreclosure rates in the nation.

So your public servants are working double-overtime to address these critical issues. And I know how tough times are in Los Angeles, in California but also all across the country.

Here's what I want you to remember though. We are going to meet these challenges. We will come out on the other side stronger and a more prosperous nation. That I can guarantee you.

I can't tell you how long it will take, what obstacles we'll face along the way. But I promise you this. There will be brighter days ahead. (Cheers, applause.)

Because of the Recovery Act that I signed into law, last month, and that your two outstanding senators, Feinstein and Boxer, worked so hard to pass, we're making major investments to create jobs, right here in California, rebuilding infrastructure, weatherizing homes and putting more police on the streets, supporting community health centers.

All together, we expect to create or save more than 396,000 jobs in this state over the next two years. (Applause.) But we also know that we can't create as many jobs as we want or rebuild our economy the way we hope without addressing the problem at the heart of this economic crisis. And that's our housing crisis.

We know that fixing that crisis, breaking that cycle of falling home values and rising foreclosures, is one of the keys to fixing our economy. And that's why we've launched a housing plan that will help millions of responsible homeowners save money, by refinancing or modifying their mortgages.

Our plan included important steps to help lower interest rates. And today, millions of Americans, people who never thought they'd be able to lower their monthly payments, are now able to take advantage of these rates, which are the lowest that they have been in decades. (Applause.)

Already, already, we're seeing a burst of refinancing. Refinancing applications jumped 30 percent last week, to more than double the rate we had last fall, saving the average homeowner hundreds of dollars a month, the equivalent of a generous tax cut.

That's money in their pocket, money you can use right now to pay your bills or pay off your debts or save up for a rainy day, to save for retirement or that college education for your child.

And today we launched a new website called makinghomeaffordable.gov to help borrowers determine whether they're eligible for our plan and to help them calculate how much money the plan could save them on their mortgage -- on their monthly payments.

And keep in mind, this is in addition to the $8,000 tax credit for first-time homebuyers that's in our recovery plan. And if you buy your home -- your first home any time between now and December 1st, you can claim that credit this year on your 2008 tax return and receive that money in as little as 10 days.

So if you haven't filed your taxes yet -- (laughter) -- but you're thinking about buying a house -- (laughter) -- you can request a six-month extension until October 15th and claim the credit before then. Or -- (applause) -- or if you've already filed your taxes or you wish to do so before April 15th, you can just amend your form later this year after you've bought your home and get your money then.

Look, the idea here is very simple. If you buy a home this year, you should be able to get your tax credit this year. That's when you need it most, that's how we'll help people start spending again -- (extended applause) -- that's how we'll help raise home values, stabilize our housing market, create new jobs again. (Applause continues.) That's our plan. That's what we're going to do right here in California. (Applause continues.)

Now, I'm also pleased to announce that today California will be receiving $145 million from the Department of Housing and Urban Development to provide additional help to communities hardest hit by the foreclosure crisis. So -- (applause) -- these funds will be used to buy up and rehabilitate vacant and foreclosed homes, resell those homes with affordable mortgages, and to provide mortgage assistance and rehabilitation loans for low-income and middle-income families. That's how we'll help people here in California live their dream of homeownership and how we'll start transforming abandoned streets lined with empty houses back into thriving neighborhoods.

Now, we know that it's not enough to address challenges like housing and infrastructure and job creation just in the short term. None of this will make a difference unless we build an economy that offers prosperity in the long run. We can't go back to a bubble-and- burst economy based on reckulous -- reckless speculation and spending beyond our means, and where a relative few do spectacularly well while the middle class loses ground. We can't go back to a culture on Wall Street that says it's okay to bend or break the rules and a culture in Washington that says it's okay to look the other way. We can't go back to that. (Cheers, applause.)

We can't allow what happened at AIG to ever happen again in this country. (Cheers, applause.)

I know -- I know a lot of people are outraged about this. I'm outraged too. The idea that some of the very people who drove our economy into the ground could accept bonuses with one hand while they're taking taxpayer money with the other goes against our most basic sense of what's fair and what's right.

I'm committed as president to ensuring that we have the tools to prevent the kinds of abuses that sent AIG spiraling in the first place, so we never again put our financial system at that kind of risk and we're not held hostage by companies that are, quote-unquote, "too big to fail."

We also want to do this because it serves the most important goal we have today, which is to rebuild our economy in a way that's consistent with our values, an economy that rewards hard work and responsibility, not high-flying financial schemes, an economy that's built on a strong foundation, not one that's propelled by an overheated housing market or everybody maxing out on their credit cards.

We need to bring about a recovery that endures. You remember -- you remember that ad where it used to say: We earn money the old- fashioned way. We earn it. Right? "We make the money the old- fashioned way; we earn it." (Applause.) That's what we have to do. We have to get back to the principle of hard work and innovation and dedication.

And that's exactly the purpose of the budget I'm submitting to Congress. It's a budget that makes hard choices about where to save and where to spend. Because of the massive deficit we inherited and the cost of this financial crisis, we're going through our books, line by line, so that we can cut our deficit in half by the end of my first term, and reduce it by $2 trillion over the next decade. (Applause.)

Now, I know that, you know, the governor is having to make these same tough choices. And there are going to be initiatives here that -- that talk about the need for everybody to chip in, everybody give a little something up, in order to get our fiscal house in order. We -- we're going to have to do that same thing at the federal level. Mayor Villaraigosa's got to do the same thing with respect to city budgets. These are tough times.

What we won't do, though, is cut investments that will lead to real growth and real prosperity over the long term, investments that will make a difference in the lives of this generation and future generations.

So because it's -- because we know that spiraling health care costs are crushing families and dragging down the entire economy, and because we know it represents one of the fastest growing parts of our budget, we've made a historic commitment to health care reform in this budget, reform that brings us closer to the day when health care is affordable and accessible for every single American. (Cheers, applause.) That's something we've got to keep on. (Extended cheers, applause.) It's time. It's time! It's time. (Cheers, applause.)

We know -- we know -- and we've got three principals right here in the front row -- we know that -- (cheers, applause) -- we know and they know that countries that out-educate us today will out-compete us tomorrow. And that's why my budget invests in a complete and competitive education for every American, in early childhood education programs that work -- (cheers, applause) -- in high standards and accountability for our schools -- (cheers, applause) -- in finally putting the dream of a college degree or technical training within reach for anybody who wants it -- (cheers, applause).

Because we know that enhancing America's competitiveness will require reducing our dependence on foreign oil and building a clean- energy economy, this budget will spark the transformation we need to create green jobs and launch renewable energy companies right here in California. (Applause.) It makes clean energy the profitable kind of energy, and invests in technologies like wind power and solar power and fuel-efficient cars and trucks and high-speed rail -- (cheers, applause) -- powered by batteries like the one I saw in Pomona earlier today -- all of which will help us combat climate change. That's got to be a priority. (Applause.)

That's what this budget does. Now, here's what this budget doesn't do. It doesn't raise taxes on any family making less than 150 -- $250,000 a year, by a single dime. In fact, 95 percent of all working families will receive a tax cut as a result of our recovery plan. (Applause.)

Now, there are those who say these plans are too ambitious; that anything we should be trying to do is -- is just focused on the banking crisis; that we should be trying to do less, not more. In fact, somebody was saying the other -- today, I think -- that I shouldn't be on Leno -- (laughter) -- I can't -- I can't handle that and the economy at the same time -- (chuckles) -- (laughter, cheers, applause).

Listen, here's what I say. I say our challenges are too big to ignore. The cost of our health care is too high to ignore. Our dependence on oil is too dangerous to ignore. (Cheers, applause.) Our education deficit is too wide to ignore! (Cheers, applause.)

To kick these problems down the road for another four years, or eight years, that would be to continue the same irresponsibility that led us to this point in the first place. (Cheers, applause.)

And I -- I did not run for president to pass on our problems to the next generation. I ran for president to solve these problems for the next generation and for the next president. (Cheers, applause.)

So -- (cheers, applause continue) -- so I -- that's what you want.

I know -- I know some folks on (sic) Washington and on Wall Street are saying we should just focus on their problems. I understand the thinking behind that. It would be nice if I could just pick and choose what problems to face, when to face them, so I -- I could say, "Well, no, I don't want to deal with war in Afghanistan right now," and "I'd prefer not having to deal with climate change right now," and "If you could just hold on, even though you don't have health care, just please wait" -- (laughter) -- "because I've got other things to do." (Laughter.)

But that's not how -- how things work. That's not how it works for you.

AUDIENCE MEMBERS: No.

PRESIDENT OBAMA: You don't get to choose between paying your mortgage bills or your medical bills. (Applause.) You don't get to choose between paying your kids' tuition and saving it up for retirement. (Applause.) You've got to take all those problems on at the same time.

And you need a government that will do the same. That's what leadership is about. (Cheers, applause.) That's what the debate on this budget is all about -- other -- about whether we're willing to do what needs to be done to get our economy moving and put people back to work and put us on the road to shared and lasting priorities. That's what I'm going to do. That's what I'm going to focus on. (Cheers, applause.) We're going to get it done with your help. I need you.

All right. (Cheers, applause continue.) Okay. All right. All right. This is the fun part of the program. (Cheers, applause.) Everybody have a seat. This is the fun part of the program.

Now first of all, we haven't pre-screened anybody. So you know, if you don't like me, go ahead and just say, you know -- (laughter) -- all right, you know, "You're a bum." That's okay.

Here's -- hold on. Hold on one second. Just hold on. (Laughter.) Just a couple of rules. First of all, we're going to go girl, boy, girl, boy. (Cheers.)

I'm not going to be able to get to every question. So you know, people, raise your hands.

I'll try to get as many as possible. We'll try to go around the room. There are people with microphones in the audience; this young lady for example, an example. So wait until she gets there, so everybody can hear your question.

And the only other thing is, since we have a lot of people and not that much time, if everybody could try to keep their question relatively short, that will be helpful. Okay, and stand when I've called on you. You don't need to stand before I've called on you. But stand when I've called on you.

Okay, this young lady in the black, right here, she gets the first question. (Cheers, applause.)

Introduce yourself too.

Q My name is Patricia. (Inaudible.)

PRESIDENT OBAMA: Hey, Patricia.

Q Hi.

First, I want to say, I'm very glad and thankful that you are our president. And five years ago, I told my friend Tim that Barack Obama will be president. And he said, no, not in my lifetime; there won't be a black president. I said, just wait a few years. And when you won, I said, I told you so.

PRESIDENT OBAMA: See that, always satisfying to say I told you so.

Q And he was very happy. But he was very happy for me to tell him so.

PRESIDENT OBAMA: Good.

Q So my question is, you talk about health care, which usually means insurance, after you're sick. What about making our lifestyle healthier?

Like, we have corn syrup, we have trans fats in all our food. Those things are illegal in Europe. And I know people that go to Europe. And they overeat but they lose weight, because their foods don't have all the hormones and additives.

And also you know that Clinton put legislation into place that limited the dumping of mercury into the rivers.

And then you-know-who came into office and took that legislation away ---

PRESIDENT OBAMA: Okay. All right, all right, all right, all right, all right.

Q -- and now the mercury levels in the fish are out of control. (Applause.)

PRESIDENT OBAMA: Okay. Let me answer your first --

Q Are you going to put that legislation back?

PRESIDENT OBAMA: Okay. First of all, if you burn that many calories asking a question -- (laughter, cheers, applause) -- you know, I mean, she's -- she's fired up. (Laughs.) So you -- you'll be able to eat whatever you want. (Laughter.)

Q No, not trans fats. They block up your arteries.

PRESIDENT OBAMA: The -- anyway, all right. Let me answer your question.

And then -- did you just hit -- (short audio break from source)?

Q (Off mike.) (Laughter.)

PRESIDENT OBAMA: Hand the mike -- (short audio break from source).

This is actually a serious question. You're exactly right that if we are going to reform our health care system, what we can't do is simply add more people to a hugely inefficient system that is costing us more and more each and every year, because eventually it'll bankrupt families, it'll bankrupt state governments and it'll bankrupt the country. So the only way that we can initiate true health care reform is if we control costs.

And one of the most important ways for us to control costs is to deal with the issue of prevention, which means making sure that we have proper nutrition programs in our schools; making sure that we've got effective physical education programs for our children. (Applause.) It means making sure that everybody has access to a primary care doctor and that they are getting regular checkups, that we are avoiding preventable diseases like diabetes, that are helping to shoot our medical costs through the roof.

So that's going to be a huge component of whatever health care reform package that I sign, is a major push towards prevention. There are some other areas where we can do some important cost savings as well. Information technology -- the recovery act provides billions of dollars just putting our medical records online, so -- (audio break from source).

AUDIENCE MEMBERS: (Change mikes ?).

PRESIDENT OBAMA: Okay, hold on one second. (Laughter.) If we've got a replacement mike, that would be helpful, because this one's going in and out a little bit. Got one?

Well, no, but you need that for your guys.

STAFF: (Off mike.) (Laughter.)

PRESIDENT OBAMA: Here we go.

Let's -- okay, that's good, there. But these -- you know, if everybody's data -- medical data is in digital form with important privacy protections, we can reduce medical errors. We can make sure that doctors and nurses, pharmacists are all communicating more effectively. We'll have actually better quality in hospitals and we will also be driving down costs.

So there are a whole host of measures that we put down payments on on the recovery package, but we've got to get our budget passed in order to actually make it happen.

One last point I'll make -- something that has not been getting a lot of attention -- we signed a renewal of the Children's Health Insurance program that added -- (cheers, applause) -- added millions of children, including children of legal immigrants, into the mix. That's an important tool to prevent long-term diseases that can cost us a lot of money.

All right. All right. Gentleman right here -- gentleman right here with the beard.

STAFF: (Off mike.)

Q No, I'm unable to stand up. I believe that I'm entitled to an exception of that rule under the ADA.

PRESIDENT OBAMA: Go ahead.

STAFF: Oh, my -- (word inaudible). I'm so sorry.

Q I forgive you.

PRESIDENT OBAMA: Go ahead.

Q Okay.

PRESIDENT OBAMA: Introduce yourself.

Q I'm Gary Parep (ph). And Mr. President, thank God for you. (Cheers, applause.)

Sir, my question regards the true renaissance that's happening with people with disabilities. They are an emerging population. Millions of people with more potential and capacity -- more mobile, more educated, more healthy, more empowered technology -- but still trapped in very, very old social models that see them in terms of tragedy and charity and need and care. And the modern population of people with disabilities simply does not fit that model.

And as you plan succeeds and you generate these jobs, and as baby boomers retire, we're going to need every single person of capacity to work that we can, and that must include many, many, many thousands, if not millions, of people with disabilities. So -- (applause). Thank you.

So -- I see you nodding your head, so my first question is, do you subscribe to what I'm saying? And next of all, can you talk about how your disability agenda will release this emerging potential that's currently wasted and untapped?

PRESIDENT OBAMA: Well, you are exactly right that we need everybody. And every program that we have has to be thinking, on the front end, how do we make sure that it is inclusive, and building into it our ability to draw on the capacities of persons with disabilities. That's true on the education front, where our recovery package increases funding for children with disabilities. It is true in terms of how Hilda Solis, our secretary of Labor, will be thinking about our training programs to make sure that we are not excluding from training for high-tech jobs, the new jobs of the future, persons with disability. It means enforcing the ADA and fighting back on some court opinions that have tried to narrow what I -- in ways that I think are inappropriate the original intent of that legislation.

So one of the things that I think is important is to make sure, as you pointed out, that we don't see this as an after-thought, a segregated program, but we are infusing every department, every agency, every act that we take with a mindfulness about the importance of persons with disabilities, their skills, their talents, their capacity. That, I think, is the approach that my administration's going to take, and we hope that by taking that approach, that attitude will infuse state and local governments that are also receiving federal money. Okay? (Applause.)

This young lady right here has had her hand up for a while.

Q (Off mike.)

Q Hello, Mr. President.

PRESIDENT OBAMA: Don't worry. I'm going to get around. Hold on a second. I'm going around.

Go ahead.

Q Hello.

PRESIDENT OBAMA: Hi.

Q My name is Charnette (sp).

PRESIDENT OBAMA: Hey, Charnette (sp).

Q And first of all, I would just like to say as a mixed-raced (sic) individual, it's so fantastic to finally have a role model and a leader that I can actually identify with. So thank you.

PRESIDENT OBAMA: Well, that's -- that's nice. Thank you. (Cheers, applause.)

Q There haven't been a whole lot growing up, so.

Okay, so my question is specific to California. As you know, we have one of the highest costs of living in the U.S. here. A household income that is considered middle or upple -- upper class in any other state wouldn't go very far here. However, the tax laws in the recent economic stimulus address household income on a national level and do not take into account the cost of living by state, as far as I know.

California now has, as you mentioned before, a higher unemployment rate than the national average. We make up one-third of the nation's foreclosures. So what I want to know is, what can be done to address California's unique and -- unique situation and stimulate the economy here in California and, like you mentioned, just be prosperous into the future, keeping in mind, again, household incomes, and we're not really apples-to-apples with other states but we're taxed as if we are. (Applause.)

PRESIDENT OBAMA: Well, look. I -- I mean, obviously, there's differentiation between states, both in terms of costs of living but also in terms of salaries. And, you know, generally those are taken into account through the deductions that are available through the tax code.

I would say that the biggest problem, though, is probably not the -- in our tax code is not the difference between how Californians are treaten -- treated and people in Idaho are treated. The bigger difference actually has to do with how people inside California are treated by the tax code.

So if you are a multi-millionaire who get (sic) most of your income from dividends and capital gains, then you're typically paying 15 percent of your income in taxes at the federal level. But if you're a secretary making $30,000 a year in wages, then you're paying a higher rate. Now -- so the secretary's paying a higher rate than Warren Buffett as a percentage of their income.

That's the inequity that I think is most destructive, because what it's done -- (applause) -- what it's done is, over the last decade the average working family has seen their median income flatline. Their wages and income have not gone up. On the other hand, people who are at the very top of the income scale -- and I -- I'm now included in that category -- we've seen all the benefits of economic growth when things were going well. And I actually think that contributes to a cycle of bubble and bust.

And if we have a situation in which middle-class people are earning a decent living, where we've got bottom-up economic growth, then I think that's good for everybody.

I think ultimately that's good for businesses. I think it's good for rich folks, because when the economy, everybody does well, and you don't get as many distortions as you've gotten in this sort of bubble and bust cycle that we've had.

Now, there are some things in California that we are doing that focus on particular needs here. We just talked -- Governor Schwazenegger and Mayor Villaraigosa. Here in Los Angeles, for example, there is an enormous opportunity to deal with traffic and transit and transportation in a way that will relieve congestion -- (applause) -- make this economy more efficient, more productive.

You know, the needs of Los Angeles in terms of transportation dollars are going to be different from the needs of somebody in a predominantly rural state. And one of the things that we want to do in terms of how transportation dollars flow is to start emphasizing the fact that the vast majority of people live in suburbs or in cities in metropolitan regions, and how can we do a better job in planning and coordinating regionally so that you aren't in your car for two hours a day. (Applause.)

There are things that we can do that end up being specific to the situation of the economy in California, but generally, you know, California oftentimes gets hit worse when recessions come, but you also rise up faster when the economy starts to recover. So I'm confident California we continue to be on the cutting edge of our economy.

All right. It's a guy's turn, so, ladies, put your hands down. (Laughter.) It's a guy's turn.

This gentleman right here. Right here.

Q Mr. President, I really don't have a question, but I'd like to offer up to you the young lady by the name of Lena Kennedy, who hosted you in Pasadena, as possibly your domestic policy adviser for children and families. (Applause.)

PRESIDENT OBAMA: Oh, okay.

Q And my name is John Kennedy.

PRESIDENT OBAMA: Okay, John. (Laughter, applause.)

All right. We'll --

AUDIENCE MEMBER: Great.

PRESIDENT OBAMA: Does she know that you were just doing that?

Q No. No. Oh, no.

PRESIDENT OBAMA: That's a shame. She's going to be all embarrassed. (Laughter.)

All right. Since that wasn't really a question, I'm going to call on another guy. Gentleman back there in the cap. Right there. Let's get a microphone. Right there.

Q Thank you.

PRESIDENT OBAMA: What's your name?

Q My name is Peter Graf (sp). I immigrated here from Germany. And last summer I was very excited when you had that wonderful reception in Berlin.

Now, former Vice President Cheney used to say, "Deficits don't matter." But since you inherited his mess -- (applause) -- the national debt has been growing and growing, and no end seems in sight.

I'm very happy you're in the White House, but for the first time, I am worried about this country, the stability and the future.

My question: How -- is there a chance that we may follow in the footsteps of Iceland and one day just simply be broke? That's the question.

PRESIDENT OBAMA: No.

Q Thank you. (Applause.)

PRESIDENT OBAMA: No, but -- but you know, there is a chance that we leave such a mountain of debt, to the next generation, that it makes them poor over the long term, because we're having to borrow from foreign countries, make interest payments to other countries, and that over time, standards of living here are lower than they should be, relative to other countries. So we've got to get control of our deficit.

Now, you're right. I inherited a $1.3-trillion deficit. And we saw the national debt double during the previous administration. Which is why when I hear, you know, generally I'm a -- I try to be a bipartisan guy. But when I hear some folks from the other party, in Congress, start howling about the deficits, I'm starting to think, well, where have you been; what have you been doing? (Cheers, applause.)

I mean, you would have thought -- you would have thought a good time to do something about deficits was when the economy was going good, right? You would have thought that's when you would have been saving away a little bit. If you had inherited a surplus, you would have thought that maybe, you know, we'll maintain that.

So I don't put much stock in some of those political attacks. But what is true is that the path we're on right now is unsustainable. So here's what we have to do. Our most immediate and urgent task is to put people back to work and get the economy rolling again. That's the thing we have to do right now. (Applause.)

And that means that for the next couple of years, we're going to have to tolerate much higher deficits than I'm comfortable with, not just for the recovery package but the money that we've had to put in to deal with the financial crisis.

The fact that people are out of work means they are needing unemployment insurance. They need additional -- there are greater needs for food stamps. All sorts of pressures and strains are placed on state government and local governments during a deep recession like this one.

So we've got to suffer some big deficits while we move into recovery. The worst thing we could do is not worry about recovery, slash government spending at the same time as businesses are slashing their spending and consumers are slashing their spending. That creates a downward spiral that could make things even worse.

But as soon as we start seeing a recovery, and my hope is that, you know, over the next couple of years, we will have started moving again, building back up, then what we have to do is build in a pathway for reducing our deficits.

My question: How -- is there a chance that we may follow in the footsteps of Iceland and one day just simply be broke? That's the question.

PRESIDENT OBAMA: No.

Q Thank you. (Applause.)

PRESIDENT OBAMA: No, but -- but you know, there is a chance that we leave such a mountain of debt, to the next generation, that it makes them poor over the long term, because we're having to borrow from foreign countries, make interest payments to other countries, and that over time, standards of living here are lower than they should be, relative to other countries. So we've got to get control of our deficit.

Now, you're right. I inherited a $1.3-trillion deficit. And we saw the national debt double during the previous administration. Which is why when I hear, you know, generally I'm a -- I try to be a bipartisan guy. But when I hear some folks from the other party, in Congress, start howling about the deficits, I'm starting to think, well, where have you been; what have you been doing? (Cheers, applause.)

I mean, you would have thought -- you would have thought a good time to do something about deficits was when the economy was going good, right? You would have thought that's when you would have been saving away a little bit. If you had inherited a surplus, you would have thought that maybe, you know, we'll maintain that.

So I don't put much stock in some of those political attacks. But what is true is that the path we're on right now is unsustainable. So here's what we have to do. Our most immediate and urgent task is to put people back to work and get the economy rolling again. That's the thing we have to do right now. (Applause.)

And that means that for the next couple of years, we're going to have to tolerate much higher deficits than I'm comfortable with, not just for the recovery package but the money that we've had to put in to deal with the financial crisis.

The fact that people are out of work means they are needing unemployment insurance. They need additional -- there are greater needs for food stamps. All sorts of pressures and strains are placed on state government and local governments during a deep recession like this one.

So we've got to suffer some big deficits while we move into recovery. The worst thing we could do is not worry about recovery, slash government spending at the same time as businesses are slashing their spending and consumers are slashing their spending. That creates a downward spiral that could make things even worse.

But as soon as we start seeing a recovery, and my hope is that, you know, over the next couple of years, we will have started moving again, building back up, then what we have to do is build in a pathway for reducing our deficits.

So, you know, we may be able to take education funding at the federal level from 7 percent to 9 percent, for example, but the lion's share is still going to be coming locally. And that's why it's so important for everybody to be engaged in the various initiatives that are going to be coming up, to make sure that what you just articulated, the need to invest in our kids, that that is reflected in terms of state budgets.

Now, one thing I've got to say, though, and I think I speak for every public official here: You can't have something for nothing. You can't have something for nothing. I was in the White House, and we had done this event when we signed stem cell research. (Cheers, applause.) And a woman who was in the audience, she came up to me and she shook my hand and she said, "Oh, President Obama, I'm very excited. But, you know, you just had this health care forum. Please, please, I hope your plan is free health care for all." And I said, "Listen, nothing's free. Nothing is free."

So the reason I make that point is, you can't ask local elected officials to raise teachers' salaries and cut taxes and balance the budget and increase roads -- you know, at some point you've got to make some choices. So if you want a high-quality education -- and California historically had the best education system in the country -- then somebody's got to pay for it. Now, the obligation of local officials, and this is -- the same is true on the federal government -- our obligation is to make sure that every dime of money is being spent wisely. Every dime of money is being spent wisely.

And when it comes to education, when it comes to education -- and I'm speaking to teachers here and educators -- let me say this. I want to -- I want to do some truth telling here. Uh-oh. (Laughter.) I love teachers. There is no profession that is more important than teaching. My sister is a teacher. But -- and I am a huge supporter of the teachers' unions. They were some of my first supporters. But let me tell you, you can't just be talking more money, more money, without also talking about how are we going to reform and make the system better. (Applause.) There's got to be a reform agenda in exchange for the money. There's got to be a reform agenda in exchange for the money. (Applause.)

So -- you know, so don't just say, you know, give us more money or smaller classrooms, but you're not willing to consider, for example, how are we going to do better assessments, or how are we going to -- you know, how are we going to work to improve teacher performance?

And if a teacher's not improving, you know, how do we get them to choose a different career? (Applause.)

AUDIENCE MEMBER: Right!

PRESIDENT OBAMA: Right? (Cheers.) I mean, there's got to be -- there's got to be some serious conversation about that.

Now, before I get off the topic of education, let me do a little more truth-telling: parents. (Applause.) You can't -- you can't complain about the schools and complain about the teachers but when your child comes home they're playing video games and not doing homework -- (applause) -- and you don't have time to go to your teacher and parent -- teacher-parent meeting. You know, our parents have to instill a sense of excellence and a thirst for knowledge.

I mean, the truth of the matter is, even as overcrowded as schools may be, as -- as, you know, poor the -- the computer equipment may be, if you took a bunch of kids right now from China or India and you put them in these classrooms, from their perspective, these would be unbelievable schools. I mean, they -- they don't have better facilities, but they're outperforming us in math and science. Why is that?

Well, part of it is -- is that we as parents are not insisting and demanding on the kind of higher performance from our kids. So -- so everybody's got to be more accountable in order to improve our education system. (Applause.)

All right. It's a man's turn. I -- I'm going to turn back here. This guy in the green shirt right here. (Cheers.) What -- everybody likes you, man! (Cheers.) What -- is -- is -- is he on, like, "Gossip Girl" or something? I don't -- (laughter) -- I didn't recognize him, but maybe he's -- he's -- is he a movie star?

Who's got a mic? Go ahead.

Q Not a movie star. Just one of your volunteers. (Cheers.)

PRESIDENT OBAMA: There you go. (Cheers, applause.)

Q And they're all around here. And in my book, that's even more powerful.

I guess that's the fundamental question I have, is there's such a passion in this country, and you inspired such a passion for us to do things that we never had before in the name of volunteerism, in the name of making you become our president. My -- and thank you to everyone that was involved with that. (Cheers.) My question is, clearly this is not something you can do alone, in terms of changing our country. How can we best partner with you?

How can we be most effective, moving forward, to change this country? (Cheers, applause.)

PRESIDENT OBAMA: Well, well, well, the first thing, I think, is patience. No. I'm serious about this because, look, there was a lot of excitement during the campaign. And we were talking about the importance of bringing about change.

We are moving systematically to bring about change. But change is hard. Change doesn't happen overnight. And -- and -- and the change we bring has to be matched, by a sense of responsibility, because if you try to just change things overnight and you haven't thought everything through, you can have some real problems.

So for example, I closed Guantanamo. That was the right thing to do. (Cheers, applause.) But I made the -- but in making that decision, I said, we're going to take a year to figure out, how are we going to deal with the folks who are detained there, some of whom really are dangerous folks who, if we just released them, could do us harm.

I believe that we are going to be able to effectively balance our national security needs with our civil liberties concerns. But it's not something that happens overnight. We've got to do it systematically.

On the economy, this financial crisis that we've had is the largest since the Great Depression. I understand how mad everybody is about this AIG bonus business. I understand that. As I said before, I'm mad. And even though I didn't -- I didn't draw up these AIG contracts, my White House didn't, it's my responsibility to fix the system.

But fixing the system requires us understanding that if banks are not solvent, if they are not lending, then businesses are not going to be able to invest. We are not going to be able to create jobs. And we can be as mad as we want. But the fact of the matter is, we've got to work through this huge mess that was made in the financial system.

It's going to cost some money. It's not going to be pretty. People are going to be frustrated. And we are going to get it done. So on a whole range of these fronts, the first thing we need, from the American people, is a sense that we are going to get it done. But it's going to take a little bit of time.

The second thing is keep paying attention to the debates that are taking place right now. So when we have a big budget debate, I want everybody who was paying so much attention during the election to be as interested in, you know, what's going on in terms of -- (applause) -- education spending; what's going on in terms of higher health care spending; are the investments we're planning to make on energy, are they the right ones, because, again, we're going to have some tough choices to make.

I can't just keep on -- I can't print money. And so if we are going to make a serious investment in clean energy, well, that requires that we phase out dirty energy, and that requires that we stop subsidizing certain things and instead subsidize other things. Somebody's not going to be happy about that, because they've been given a subsidy. So they will start running ads on television saying this is a terrible energy plan. And you've got to pay attention and educate your coworkers and educate your friends and your family.

And we're not -- my administration also -- here's one last claim I want to make, a guarantee: We are not always going to be right. And -- and I don't want everybody disappointed if we make a mistake here or there. The important point is, are we moving in the right direction? Are we generally -- (applause) -- speaking consistent with our campaign promises? Are we reflecting the values of hardworking middle-class Americans who are -- who are trying to see Washington work for them?

And, you know, that's one thing I can assure you of, is that four years from now, you are going to be able to look back and you're going to say, you know what? A, the guy worked hard on what he said he was going to work hard during the campaign. And he may not have gotten everything perfect, but we are moving in the right direction.

That's what we -- (applause) -- that's what we're going to be focused on over the next few years. (Cheers, applause.)

All right. I've -- I've -- I've only got time for a couple more questions. All right. I've got a -- I'm trying to look -- I'm going to go way up there -- way up there.

Yeah, that young -- it's -- it's a young lady's turn. Right there. Right there.

Q Oh, here.

Q Yes.

Q Hi, President Obama. My name is Kirsten Parry (sp), and I'm recent college graduate. (Whoops, applause.) My mom's a teacher and my dad is disabled carpenter. So needless to say, I have accrued a significant amount of student loan debt.

And I want to know what your administration is going to do for young people like me who are educated, who are new to the workforce, who would be ready to enter the housing market, ready to investing small business, ready to take lower-paying jobs, like teaching, but can't because we're burdened with an excess of student loans. (Cheers, applause.)

PRESIDENT OBAMA: Yes. Well, it's a great question. It's a great question.

Here's what we're going to be doing going forward, so let me start there. In our current budget, we are calling for mandatory increases in Pell grant programs, to keep up with inflation -- (applause) -- improvements in the Perkins loan program. We are going to cut out the middlemen, banks that are making huge profits on student loans, just make those loans -- (applause) -- that are federally guaranteed directly to the students. That'll save us billions of dollars. That will allow us to expand student loan assistance and grant assistance to more people.

So we've got a significant increase in student loan support slated in this budget.

Now, I recognize, though, if you've already graduated, then that may not -- that will be cold comfort for you. And one of the things that we're trying to figure out is, are there ways that we can lower interest rates or principal on some of the existing student loans that are out there by consolidation or other tools. We have not announced an official program on that front, but we do believe that there are going to be some things that we can do.

This is an example, by the way, of where the banking reforms that we are talking about are so important. We just announced some changes, for example, in the ability of the student loan market -- of the secondary market of securitized student loans to be purchased in such a way that we can reduce the interest rates on student loans for everybody. But if we don't help the banks, it's going to be hard for us in order to lower some of these student loan rates.

So a lot of these things are intertwined, and we've got to make sure that we deal with that.

Last point I want to make: I expect that over the next couple of weeks, maybe even next week, we are going to in a position to sign a national service bill coming from the House and the Senate. (Applause.) And as part of this, what we're going to be doing is expanding programs like the Peace Corps and Teach for America -- (cheers, applause) -- and other mechanisms, other avenues where you can make a decision, as a young person, to teach for three years or to serve in the Peace Corps or to serve in the Foreign Service or, you know, volunteer in some fashion in your communities and help finance your education in the process.

And I think that there are young people all across California, all across America who are interested in that opportunity, and I want to give that opportunity to you.

(Cheers, applause.) All right. Okay. This is the last -- last question. (Cheers.) You know, I'm going to --

AUDIENCE MEMBER: (Off mike.)

PRESIDENT OBAMA: Hold on -- hold -- you know, on the last question, I think I -- hold on a second. I think I want to call on a -- I want to call on a young person.

AUDIENCE MEMBERS: Here!

PRESIDENT OBAMA: A -- but it's got to be a guy. It's a guy.

AUDIENCE MEMBERS: Here!

PRESIDENT OBAMA: That -- that -- no, no. You're not that young. You sit down. (Laughter.)

AUDIENCE MEMBERS: Here! Obama!

PRESIDENT OBAMA: That guy right there. That -- that young guy in the t-shirt. In the t-shirt. Or in the tie -- in the tie. This young man right here. (Cheers.)

AUDIENCE MEMBER: Yeah! Good job, buddy!

PRESIDENT OBAMA: All right. You got to stand up, though. You look good in that tie. (Laughter.)

Q Hi. My name is Ethan.

AUDIENCE: Awww.

PRESIDENT OBAMA: Hold on -- shhh, sh, sh.

AUDIENCE MEMBER: It's okay.

Q President Obama, our school is in big trouble because of budget cuts. Our whole -- 25 of our teachers already have been fired to get pink slips, and the whole school -- my class, we made this.

PRESIDENT OBAMA: Oh, you made -- you made -- are those letters for me?

Q Yes.

PRESIDENT OBAMA: Well -- now, what's your name?

Q Ethan Lopez.

PRESIDENT OBAMA: Ethan Lopez? How old are you, Ethan?

Q Eight.

PRESIDENT OBAMA: Eight? So what grade are you in?

Q Third grade.

PRESIDENT OBAMA: Third grade? Do you like school?

Q Yes.

PRESIDENT OBAMA: Yes, you do? Is that your mom next to you?

Q Yes.

PRESIDENT OBAMA: Yes? Is -- she -- she looks very nice. (Laughter.)

The -- well, let me -- as I said before, Ethan, we're going to do everything we can to protect our teachers. We already passed a law in Washington that's going to give more money to the state to help keep teachers in their jobs.

And one of the things that we didn't talk about earlier -- we're also going to be putting more money into school construction, because there are a lot of overcrowded schools and overclouded crassrooms (sic) that don't -- aren't wired for the Internet effectively. And we are going to make sure that we invest in that as well, because I want you to get a first-class education.

What -- what do you want to be when you -- when you grow up? Have you decided yet?

Q Yes.

PRESIDENT OBAMA: What do you -- what would you like to be?

Q A cop.

PRESIDENT OBAMA: A cop! (Laughter, cheers, applause.) That's what I'm talking about. All right.

Well -- well, I can -- I can tell that you will be an outstanding police officer.

Your mom's proud of you. We're all proud of you. Give Ethan a big round of applause. (Applause.)

Thank you, everybody. God bless you.

END.


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