DIANE SAWYER, ABC'S "WORLD NEWS" ANCHOR: Mr. President, thank you.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you.
SAWYER: So, looking back a year, going before a joint session of Congress. What's the biggest difference in going this week?
OBAMA: Well, you know, this may seem counterintuitive, but the biggest difference is that I was more worried about where the country was going a year ago than I am now. Keep in mind that when I made that joint session speech, we still didn't know whether the financial system was going to stabilize. We still were looking at five, six, seven hundred
thousand jobs per month being lost. It still wasn't clear whether or not we were going to be able to generate economic growth again.
And so, the steps that we took at the beginning of this year have meant that the potential meltdown of the economy has gone away. What hasn't gone away is the desperation that people are feeling who were one of the 7 million who lost jobs during that period, and so right now, I think there's frustration and anger about why can't we get this thing moving faster? And it's a frustration that I feel as well…
SAWYER: Republicans are already out today saying what you're talking about so far for Wednesday night is not going to create any new jobs.
OBAMA: The -- well, I would suggest that they save the rebuttal for after the speech. They haven't really heard what we're proposing.
SAWYER: But what is it going to be? New stimulus money -- as we know, in the House, they have talked about $170 billion or so for new stimulus money…
OBAMA: Here's what we're going to talk about. We're going to talk about how we can first of all, focus on job creation and growth. And I've met with the Republicans, by the way, several weeks ago. So, I have their
ideas. I know what they're proposing. And some of the things we propose are things that actually should get some strong bipartisan support.
We're also going to make sure we're focused on some issues that have been burdening the middle class well before the crisis hit. You know, what's happening in terms of affordability of college. How can people save for their retirement in a more secure way? How do they deal with both child care and elderly parents that they've got to take care of?
So, there are going to be a set of proposals that we put forward that help to stabilize the situation and deal with the growing insecurity and anxiety of people who, even if they haven't lost their job, are still
feeling squeezed by their incomes shrinking and their costs going up.
SAWYER: But a year ago, you said the first item on the agenda, a year ago, jobs.
SAWYER: Painted a picture of jobs from coast to...
OBAMA: Well, now, Diane, I think that's not fair. Here's what I said...
SAWYER: A hope for jobs, at least, infrastructure...
OBAMA: Here's what I said, was that our number one priority was stopping
the economic contraction and putting people back to work. Now, we have stopped the economic contraction. The economy is growing again, and we did create or save several million of jobs. That's not my opinion. That's the opinion of conservative economists as well as liberal economists, was that the Recovery Act, which is a combination of tax cuts, infrastructure improvements, helping states stabilize their budgets -- all those things helped to lessen the fall.
But we've still lost 7 million jobs. So, I understand why the American people, their attitude is not "It could have been worse." Their attitude is, "How do we make sure we keep on making it better?". And that's what we'll be talking about on Wednesday.
SAWYER: New proposal? Something surprising?
OBAMA: Well, you know, I'll let you guys judge whether it's surprising or not. There's going to be consistency though in the sense that my first job coming into office was to rescue the economy from great peril. My second job was to make sure that we create a new foundation for economic growth.
Here's part of what happened. Over the last decade, even when people were saying that the economy was doing fine, it was one of the first times in history where the middle class actually saw its incomes decline. We actually saw very little job growth during that period. And on a whole host of measures from health care cost, college affordability, people were having a harder and harder time getting by. So what I've said is we can't go back to the same pattern where you've got bubbles, whether it's in housing or the dot.com boom that are fueling a lot of speculation, making a lot of people a lot of money, but leaving a lot of people in the middle and low-income people behind.
What we have to have is a foundation that's built on a good education system, a sound energy policy, a health care system that works for everybody, financial regulations that ensure we don't have this crisis again, and those foundations for long-term economic growth are going to be my focus this year. They're going to be my focus next year. They're going to be my focus the year after that because if we don't get that stuff right, then it's going to be very difficult for us to answer the anxieties that people feel over the long-term.
SAWYER: A couple of quick news questions if I can. Fed Chairman Ben Bernanke going to be confirmed. Do you guarantee the markets that he's going to the Fed chairman?
OBAMA: He has my strongest support. I think he's done a good job. What we've seen is not only Democratic leaders, but also Republican leaders say that he should be confirmed and I'm confident that he will be confirmed.
SAWYER: Even though Barbara Boxer, John McCain have come out and said look -- John McCain said he's the guy who steered into the iceberg. Barbara Boxer said we need a representative of Main Street on the Fed.
OBAMA: What we need is somebody at the Federal Reserve who can make sure that the progress that we've made in stabilizing the economy continues. And I think Bernanke is the best person for that job.
SAWYER: Secretary Geithner and Economic Chairman Summers, have you asked them to stay until the end of 2010? Have they said yes?
OBAMA: You know, we haven't had the conversation because my presumption is that they are staying. There's a lot of "hue and cry" in Washington because this is what happens. The political season is starting a little bit early this year. But the fact of the matter is that when you look at the cards that we were handed at the beginning of last year and where we are now, a lot of that has to do with sound, steady economic leadership. And they've been terrific advisers for me and I think they will continue to be terrific advisers.
SAWYER: To all the people terrified about the deficit, $1.5 trillion more this year than taken in expected next year. Can you guarantee them still that there will be no taxes on anybody who makes under $250,000 a year? That's still the absolute rule?
OBAMA: I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak. So we're going to be rolling out our budget. I'm not going to be giving you too many previews of the State of the Union, but I think it's important to understand that No. 1, I haven't raised taxes on anybody, I've cut taxes. Ninety-five percent of working Americans have gotten a tax cut, partly because it's the right thing to do because of the recession, partly because it's just something I campaigned on. So that's point number one.
Point number two in terms of the deficit. Understand where our deficit index comes from. When I walked into office, we had a $1.3 trillion deficit. We also had $8 billion (sic) -- $8 trillion worth of national debt that had been accumulated from the previous administrations, cutting taxes during war time, a prescription drug plan that wasn't paid for. The only additions that we added were the stimulus package last year, which amounted to $1 trillion. Now that's a serious amount of money to rescue the economy. But it pales in comparison to the structural deficit that's built into our budget right now, that is a problem that is long running and we're going to have to solve.
And we're not going to solve it easily. There aren't any magic solutions to it. It's going to be a slow chipping away, and what I'm going to do is propose a series of measures that show we are serious about it. That I, the president, am willing to not just point fingers, but actually make some tough choices myself. My hope is that both Democrats and Republicans on Capitol Hill will join me in this effort of solving the problem, instead of trying to kick the can down the road and blame somebody else.
SAWYER: Health care -- going forward, should all the conversations, all the meetings be on C-SPAN?
OBAMA: You know, I think your question points out to a legitimate mistake that I made during the course of the year, and that is that we had to make so many decisions quickly in a very difficult set of circumstances that after awhile, we started worrying more about getting the policy right than getting the process right. But I had campaigned on process. Part of what I had campaigned on was changing how Washington works, opening up transparency and I think it is -- I think the health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don't know what's going on. And it's an ugly process and it looks like there are a bunch of back room deals.
Now I think it's my responsibility and I'll be speaking to this at the State of the Union, to own up to the fact that the process didn't run the way I ideally would like it to and that we have to move forward in a way that recaptures that sense of opening things up more.
SAWYER: A lot of people think you must say at the end of the day, this is not who I was in 2008, these deals with Nebraska, with Florida...
OBAMA: Let's hold on a second, Diane. I mean, I think that this gets into a big mush. So let's just clarify. I didn't make a bunch of deals. There is a legislative process that is taking place in Congress and I am happy to own up to the fact that I have not changed Congress and how it operates the way I would have liked. So that's point number one.
Number two is that I think it is important to know that the promises we made about increased transparency, we've executed here in 1600 Pennsylvania Avenue. I mean, this is the first White House in history where you know anybody who has walked into my office, anybody who has walked into the White House, you actually have a record of who comes in. We have put more stuff on the Internet than ever.
We've eliminated lobbyists from all the boards and commissions that historically, you know, they dominated in this town. So it's not that we haven't made significant progress, but we haven't changed it as much as we needed to.
Now, in terms of the health care bill, the product of making sure that we got historic insurance reforms that people have been fighting for years so that insurance companies can't take advantage of people, making sure that we're bending the cost curve, and -- and actually starting to reduce health care inflation in this country, which is a huge problem, making sure that 30 million people have access to health insurance, making sure that small businesses have tax credits -- it's important that people look at the core elements of what both the House and the Senate passed.
And every health economist out there, who's serious about this stuff, will tell you it's a vast improvement over the status quo. It doesn't -- that doesn't excuse the stray cats and dogs that found their way into legislation. It is point out that as we move forward, we've got to make sure that we're focused on what is actually helping the American people deal with what is a very serious problem.
SAWYER: A personal question, if I can, because a lot of people heard you in the Baptist church say sometimes in these buzz saw bruising seasons...
SAWYER: ... you sit and confront your own doubts...
SAWYER: ... somebody who is close to the administration that asked the question, I was wrong about -- personally -- personally wrong about fill in the noun...
OBAMA: Well, you know, I -- I'd say I probably make a mistake a day, maybe two. But -- but I think in terms of over the course of the year, as I said before, we've been so focused on just getting things done that I think that we stopped giving voice to the frustrations that people have about the process here in Washington.
SAWYER: You talked about...
OBAMA: And that was -- that -- that's something that I take responsibility for. I will also say, though, that what we've actually been fighting to get done is entirely consistent with what I campaigned on.
It -- it's trying to figure out how we can make sure that, you know, the -- the woman I meet in Iowa, who has lost her job and now doesn't have health insurance, how she can get some help. It's -- it's the small businessman in -- in New Hampshire, who is -- is looking at suddenly his premiums going up 40, 50 percent and is having to make a decision about either cutting health care for his employees or losing an employee.
And -- and those are the voices in my head when I wake up in the morning, and those are the voices in my head when I go to bed at night. And I don't make apologies for trying to solve some big problems that this town has proven incapable of solving for way too long.
SAWYER: Ever in the middle of all that's coming did you think maybe one term is enough?
OBAMA: You know, I -- I would say that when I -- the one thing I'm clear about is that I'd rather be a really good one-term president than a mediocre two-term president. And I -- and I believe that.
You know, there's a tendency in Washington to think that our job description of elected officials is to get re-elected. That's not our job description. Our job description is to solve problems and to help people. And, you know, that's not just the view of elected officials themselves. That's also the filter through which the media reads things.
And the reason I can say this with confidence is I've gone through this before. I went through this through the campaign.
When your poll numbers drop, you're an idiot. When your poll numbers are high, you're a genius. If my poll numbers are low, then I'm cool and cerebral and cold and detached. If my poll numbers are high, well, he's calm and reasoned.
So that's -- that's the filter through which a lot of this stuff is interpreted. But...
SAWYER: Do you think there's a lot of bed wetting, as David Plouffe said?
OBAMA: I do think that people are always thinking in the cable news cycle, and whatever appears that given day is how people view the world. That is not how I look at things. You know, I went to Iowa -- I went to Ohio last week on Friday. And I went to a company that the family had owned for years -- third generation. They make machine tools.
And you go and you talk to the workers there and you talk to the owners and then you go to the diner and you're meeting with people and talk to them. You know, they are not interested in whether Democrats are scoring points on Republicans or vice versa. What they're interested in is, you know, I can't get a loan from my bank right now. I'm trying to save for my kid's college education. You know, I'm worried that my 401(k), although it's bounced back a little bit, still doesn't leave me enough for retirement.
Those are the things that people talk to me about. And so that's what I spend a lot of my time thinking about.
SAWYER: Two diametrically opposing paths have been laid out by your supporters. One is come out swinging, go down for history, let everyone -- let the Republicans filibuster and do it and the other is slow down, scale back, less money. Which is it going to be?
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
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?
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.
There is no doubt that there is a real terrorist threat out there. Al Qaeda, itself, is greatly weakened from where it was back in 2000. Bin Laden sending out a tape, trying to take credit for a Nigerian student, who engaged in a failed bombing attempt, is an indication of how weakened he is, because this is not something necessarily directed by him.
The concern that we have now is that if you have the lone wolf, or the small network, that can equip itself to try to engage in suicide attacks, those are in some ways folks that are even harder to catch than well-known terrorists like bin Laden. So we have to improve our cooperation, our work with countries like Yemen to make sure that we are catching those individuals ahead of time. In some cases they may not have records. They may not be known terrorists. And that makes the job harder.
This is part of the reason, though, why it is so important that we don't have a knee-jerk reaction that actually inflames the situation in the Muslim world. That we are measured, we are deliberate, we do everything we need for our security, but we also are engaged in the public diplomacy that makes sure that some lonely teenager, in some Muslim country, doesn't think that the way to belong is to engage in attacks against the United States. So, it can't just be a military response. It also has to be a diplomatic response. It also has to be us working in these countries on providing educational opportunity.
America has to be perceived as a country that is a force for good and that is why, I think, the extraordinary response of not just our government, but also the people of the United States, to a tragedy like Haiti is so important. It is important because it is the right thing to do, but it also shows that America's power is used, not just in a military fashion, but to make sure that people are getting help.
SAWYER: That's the signal. May I ask one family question then. Mrs. Obama, as you know, has always been the person we are told, who gauges you and gauges the world outside. In the past 78 hours, what's been the most -- 78, 48, one week, what's been most the important and useful thing she's said to you?
OBAMA: She told me that after we went to Sasha's basketball game that I need to show Sasha how to shoot her shot a little more effectively. So yesterday, we went out and went to the gym for about an hour and nothing was more therapeutic than taking my daughter to shoot some baskets. That's the stuff that grounds me.
But you know, I think, as I said before, Michelle and I now have been through these cycles enough where she has a lot of confidence that as long as I'm trying to do the right thing, as long as I'm focused on helping the people who sent me here, no matter how hard the decisions are, no matter how many times the politics may break in a different direction, that over time, people can tell if you're on their side or not. You know and so the most important thing for me is just to make sure that every day, I know who I'm fighting for and that we communicate that effectively. That we don't get so trapped in the bubble that people start thinking boy, he's been -- that Washington has changed him, instead of he's changing Washington.
SAWYER: So serious question, Colts/Saints.
OBAMA: You know, I think both teams are terrific. I guess I'm rooting a little bit for the Saints as the underdog partly just because when I think of what's happened in New Orleans over the last several years and how much that team means to them. You know, I'm pretty sympathetic. And Drew Brees came to visit here at the White House, a terrific young man, and he's done a lot not just for New Orleans, but also for military troops. I'm very impressed with him.
SAWYER: Two pictures: inauguration, first congressional speech. What would you say to him?
OBAMA: You're going to look older in a year. You've got more gray. But you know what, I'd say to him, stick with it. That's what I always tell myself, just stick with it. You know, the one thing that I think people in this town forget is that the kinds of political setbacks that we experience, they're nothing compared to the setbacks of a guy who loses his job is going through. He's sending out 100 resumes and he's not getting any answers back and his wife and kids are at home and he's thinking, am I going to be able to make sure that mortgage payments gets made? Am I going to be able to afford to keep my health insurance? Those are the kinds of setbacks that in some cases are life or death and yet Americans all across the country in circumstances like that, they get up every day, they go out for that next interview and they keep on interviewing until they find a job. Those are the people who inspire me. That's why when I get up in the morning, you know, I'm not worrying about what the latest headline is. I'm worrying about whether I'm being true to them.