President Obama's First Re-Election Press Conference (Transcript)

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Q: What about voters? Do they deserve to know?

PRESIDENT OBAMA: You know, again, I think you're going to have to talk to the FBI in terms of what their general protocols are when it comes to what started off as a potential criminal investigation. And one of the challenges here is -- is that we're not supposed to meddle in, you know, criminal investigations. And that's been our practice. And you know, I think that there are certain procedures that both the FBI follow or DOJ follow when they're involved in these investigations. That's traditionally been how we view things, in part because people are innocent until proven guilty. And we want to make sure that we don't prejudge these kinds of situations. And so my expectation is -- is that they followed protocols that they already established.

(Inaudible) -- Jessica Yellin. Where's Jessica? Right there.

Q: Mr. President, on the fiscal cliff -- two years ago, sir, you said that you wouldn't extend the Bush-era tax cuts, but at the end of the day, you did.

So respectfully, sir, why should the American people and the Republicans believe that you won't cave again this time?

PRESIDENT OBAMA: Well, two years ago the economy was in a different situation. We were still very much in the early parts of recovering from the worst economic crisis since the Great Depression. And ultimately, we came together, not only toe extend the Bush tax cuts, but also a wide range of policies that were going to be good for the economy at the point -- unemployment insurance extensions, payroll tax extension -- all of which made a difference, and is a part of the reason why what we've seen now is 32 consecutive months of job growth, and over 5 1/2 million jobs created, and the unemployment rate coming down.

But what I said at the time is what I meant, which is this was a one-time proposition. And you know, what I have told leaders privately as well as publicly is that we cannot afford to extend the Bush tax cuts for the wealthy. What we can do is make sure that middle-class taxes don't go up.

And so the most important step we can take right now, and, I think, the foundation for a deal that helps the economy, creates jobs, gives consumers certainty, which means gives businesses confidence that they're going to have consumers during the holiday season, is if we right away say 98 percent of Americans are not going to see their taxes go up; 97 percent of small businesses are not going to see their taxes go up.

If we get that in place, we are actually removing half of the fiscal cliff. Half of the danger to our economy is removed by that single step.

And what we can then do is shape a process whereby we look at tax reform, which I'm very eager to do. I think we can simplify our tax system. I think we can make it more efficient. We can eliminate loopholes and deductions that have a distorting effect on our economy.

I believe that we have to continue to take a serious look at how we reform our entitlements, because health care costs continue to be the biggest driver of our deficits.

So there is a package to be shaped, and I'm confident that parties -- folks of good will in both parties can make that happen. But what I'm not going to do is to extend Bush tax cuts for the wealthiest 2 percent that we can't afford and, according to economists, will have the least positive impact on our economy.

Q: You've said that the wealthiest must pay more. Would closing loopholes instead of raising rates for them satisfy you?

PRESIDENT OBAMA: I think that there are loopholes that can be closed, and we should look at how we can make the process of deductions, the filing process easier, simpler.

But when it comes to the top 2 percent, what I'm not going to do is to extend further a tax cut for folks who don't need it, which would cost close to a trillion dollars. And it's very difficult to see how you make up that trillion dollars, if we're serious about deficit reduction, just by closing loopholes in deductions. You know, the math tends not to work.

And I think it's important to establish a basic principle that was debated extensively during the course of this campaign.

I mean, this shouldn't be a surprise to anybody. This was -- if there was one thing that everybody understood was a big difference between myself and Mr. Romney, it was, when it comes to how we reduce our deficit, I argued for a balanced, responsible approach, and part of that included making sure that the wealthiest Americans pay a little bit more.

I think every voter out there understood that that was an important debate, and the majority of voters agreed with me, not -- by the way, more voters agreed with me on this issue than voted for me.

So we've got a clear majority of the American people who recognize if we're going to be serious about deficit reduction, we've got to do it in a balanced way.

The only question now is, are we going to hold the middle class hostage in order to go ahead and let that happen? Or can we all step back and say, here's something we agree on. We don't want middle- class taxes to go up. Let's go ahead and lock that in. That will be good for the economy. It will be good for consumers. It will be good for businesses. It takes the edge off the fiscal cliff. And let's also then commit ourselves to the broader package of deficit reduction that includes entitlement changes and it includes, potentially, tax reform, as well as I'm willing to look at additional work that we can do on the discretionary spending side.

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