Today’s Q’s for O

Feb 9, 2010 2:15pm

President Obama made a surprise appearance in the White House briefing room today.

TAPPER: Mr. President, one of the reasons Anthem said — Anthem Blue Cross says that it's raising premiums is because so many people are dropping out of individual coverage because the economy is so bad.

PRESIDENT OBAMA:  Yes.

TAPPER:  And that leaves the people in the pool who are people who  need medical care driving up costs. One of the reasons why businesses are not expanding right now, in addition to some of the credit issues you talked about, at least according to business leaders, is they say there's an uncertainty of what they need to plan for because of the energy bill, because of health care. That's what they say.  I'm not saying it's true or not.  But that's what they say. What do you say when you hear that?

PRESIDENT OBAMA:  Well, the — I think that the biggest uncertainty has been we just went through the worst recession since the Great Depression, and people weren't sure whether the financial system was going to melt down and whether we were going to tip into a endless recession. So let's be clear about the sources of uncertainty in terms of business investment over the last several years:  a huge contraction, trillions of dollars of losses in people's 401(k)s, people have a lot of debt coming out of the previous decade that they still haven't worked out, the housing market losing a whole bunch of value. So the good news is that where we were contracting by 6 percent, the economy is now growing by 6 percent.  The CEOs I talk to are saying they are now making investments, and I anticipate that they're going to start hiring at a more rapid clip. What I've also heard is them saying that, "We would like to feel like Washington is working and able to get some things done." There are two ways of interpreting the issue of uncertainty. One way would be to say, "Well, you know what?  We'll just go back to what we were doing before on, let's say, the financial markets.  We won't have the regulations that we need.  We won't make any changes in terms of too-big-to-fail." That will provide certainty until the next financial crisis. That's not the kind of certainty I think that the financial markets need. The kind of certainty they need is for us to go ahead and agree on a bipartisan effort to put some rules of the road in place so that consumers are protected in the financial markets, so that we don't have banks that are too big to fail, that we have ways of winding them down and protecting the overall system without taxpayer bailouts. That requires legislation. The sooner we can get that done, the better. The same would be true when it comes to health care.  A lot of CEOs I hear from will say, "Boy, we'd like you to get health care settled, one way or another," but they will acknowledge that, when they open up their latest invoice for their premiums and they find out that those premiums have gone up 20 percent or 25 percent, that's the kind of uncertainty that also tamps down business investment. So — so I guess my answer would be this.  The sooner the business community has a sense that we've got our act together here in Washington and can move forward on big, serious issues in a substantive way, without a lot of posturing and partisan wrangling, I think the better off the entire country's going to be.  I absolutely agree on that. What I think is important is not to buy into this notion that is perpetrated by some of the business interests that got a stake in this, who are fighting financial reform, for example, to say, "Boy, we'd be doing fine if we just didn't try to regulate the banks." That, I think, would be a mistake.

TAPPER:  But just to play devil's advocate on that, a small business, let's say — not somebody who's going to be affected by the regulatory reform, a small business — you have proposed, you would acknowledge, a bold agenda, and a small business might wonder, "I don't know how the energy bill is going to affect me.  I don't know how the health care reform bill is going to affect me.  I better hold off on hiring."

PRESIDENT OBAMA:  Yes, the small businesses that I talk to — and I've been talking to a lot of them as I've been traveling around the country over the last several months — their biggest problem is right now they can't get credit out of their banks, so they're uncertain about that.  And they're still uncertain about orders.  You know, do they just have enough customers to justify them doing more? It's looking better at this point, but that's not the rationale for people saying, "I'm not hiring." Let me put it this way.  Most small businesses, right now — if they've got enough customers to make a profit and they can get the bank loans required to boost their payroll, boost their inventory and sell to the customers, they will do so, OK?

-jpt

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