Transcript: Diane Sawyer Interviews Obama

OBAMA: Well, you know, I reject those two polar opposites. Here's what I can tell you. I will not slow down in terms of going after the big problems that this country faces because other countries aren't slow down.

SAWYER: But it's about money...

OBAMA: Asia is not slowing down. Europe's not slowing down. They're worried about getting the competitive advantage in terms of clean energy. They're worried about their kids. Our health-care system is unsustainable.

So on the big issues, I am going to keep on pushing not because I welcome controversy. The easiest thing for me to do -- the easiest thing for me to do, Diane, would be to go small bore, avoid controversy, just make sure that everybody's comfortable and we only propose things that don't threaten any special interests in Washington.

If you do that, then you can get a boost in the poll numbers but, ultimately, you're not solving problems that are vital to making sure the American dream continues for the next generation. And I don't want to look back on my time here and say to myself, all I was concerned about was nurturing my own popularity. That's not why I came.

And so the one thing that I think -- whether it's supporters or opponents -- should know is that I am not backing off the need for us to tackle these big problems in a serious way. Now, if there are ideas that...

SAWYER: Even if it's spending money?


OBAMA: Well, in some cases we are going to be saving money. We are going to have to be serious about the deficit in ways that we haven't been before. We've got to – we need a smarter government, not a bigger government, not a smaller government, we need a smarter government. And we don't have one right now. And that is part of the task before, for us this year and for several years to come.

SAWYER: Mr. President, a couple of quick questions, if I can about the terrorist threat against this country

OBAMA: Sure.

SAWYER: Because of what has happened recently. There are reports now of other potential suicide bombers coming out of Yemen. Osama bin Laden, as you know, has issued a tape championing the Christmas Day attempted bombing. Do you have any indication that they are already here?

Watch Diane Sawyer's interview with President Obama on "World News" at 6:30 p.m. ET tonight, on "Nightline" at 11:35 p.m., and on "Good Morning America" at 7 a.m. Tuesday.

OBAMA: Well, obviously, I don't want to talk about classified information. I can tell the American people this: That since 9/11 we have put in a series of measures, both on the intelligence side, militarily, as well as in Homeland Security, that make us much safer now than we were before 9/11.

SAWYER: And since Christmas?

OBAMA: Since Christmas, we have identified some additional holes that need to be filled. And I think everybody –

SAWYER: Not yet filled?

OBAMA: Well, no. I think many of them were immediately filled. But some of them, in terms of how we make sure that intelligence in one agency is immediately passed on to another. I think that is something that constantly is improved. And we're constantly learning how to do it better.

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