Obama to ABC News: U.S.-Russia Ties Are 'Reset' but Now Comes the 'Hard Work'

July 7, 2009— -- The day after he heralded a preliminary nuclear disarmament treaty with Russian President Dmitry Medvedev, President Barack Obama told ABC News that his approach to foreign affairs was already bearing modest fruit in efforts to disarm Iran and North Korea.

"In North Korea, what we saw was a very strong unanimity around a very strong sanctions regime that I think it's fair to say that even two or three years ago might not have been imposed by either Russia or China," the president said in an interview today at the Gostiny Dvor exhibition center in St. Petersburg, where he'd just finished speaking at the commencement address for the New Economic School. "They might have blocked it in the Security Council. We've already seen a ship of North Korea's turned back because of international effort to implement the sanctions and I think that is a positive step forward."

Transcript of President Obama's Interview With ABC's Jake Tapper

Obama said that Iran's "governing elites ... are going through a struggle that has been mirrored painfully and powerfully on the streets." He said that, "the fact that we have both said we are willing to work with Iran -- at the same time as we have been very clear about our grave deep concerns with respect to not just the violence, not just the detentions that have taken place -- has created a space where the international community can potentially join and pressure Iran more effectively than they have in the past."

That said, the president said that it was too early to declare the policy successful.

"Ultimately, we're going to have to see whether a country like Russia, for example, is willing to work with us to apply pressure on Iran to take a path toward international respectability as opposed to the path they're on," Obama said. "That's not something we're going to know the results of for several more months as we continue to do the hard diplomatic work of putting this coalition together to tell Iran: 'Make the better choice.'"

Asked if the North Korean and Iranian nuclear proliferation challenges mean the United States needs Russia's help more than Russia needs the United States, Obama was non-committal.

"Russia, I think understands that their long-term prosperity is still tied to the world economy and to the world community," he said, arguing that "on a whole host of international issues, they recognize that a partnership with the United States will strengthen them and their interests, so I think there's the opportunity for mutual benefit here."

He said of his new diplomatic efforts with Russia that the "tone" has been "reset" but now "comes the hard work of actually seeing this produce improvements in our security situation and the world security situation."

On Michael Jackson's Funeral: 'At Some Point People Will Start Focusing Again on Things Like Nuclear Weapons'

Having joked that he'd have to discuss Michael Jackson in order to get media coverage of the U.S.-Russian summit, the president said he wasn't at all irritated by the media attention to the funeral of the King of Pop.

"You know, this is part of American culture," the president said. "Michael Jackson, like Elvis, like Sinatra, when somebody who's captivated the imagination of the country for that long passes away, people pay attention. And I assume at some point, people will start focusing again on things like nuclear weapons."

The last time Obama was in Russia was in 2005, when then-Sen. Obama was part of a congressional delegation visiting future nuclear weapons sites.

At the time, the president recalled, "you had already started to see the Russian public concerned less with democracy and human rights than they were in consumption and a growing economy." Obama said that "there was a renewed confidence that in some ways had pushed those other issues out to the side."

But in conversations with President Medvedev on this trip, Obama said, he's convinced that "there is a growing recognition that if they want to diversity their economy, continuing to develop the entrepreneurs of the sort that I just spoke to at this graduation, that issues like rule of law, transparency, democracy are going to continue to be important."

Obama predicted that after what he called Russia's "wild swings" since the 1990s, "you're starting to see Russia balance out. And I think that they want to pursue economic growth but I think that they recognize that some of the nagging issues around civil society still have to be fixed."

'There's Nothing That We Would Have Done Differently' on the Economy

Turning to domestic issues, the president said that when Vice President Joe Biden recently told ABC News' George Stephanopoulos that the White House "misread" the economy when planning the stimulus package in January, the president said that "what Vice President Biden was referring to was simply the fact that when we passed he stimulus, we hadn't gotten the full report of the first quarter contractions in the economy that turned out to be way worse than anybody had anticipated."

But the president denied that his economic prescription was wrong because the diagnosis was incomplete.

"There's nothing that we would have done differently," he said. "We needed a stimulus and we needed a substantial stimulus."

Even with an economic assessment that was, in retrospect, overly optimistic, the president said his team knew "there was an economic tsunami coming at us, and we still knew that we were going to need a substantial stimulus," one that would include "tax cuts which you can get out really fast" and "money to states so they're not laying off teachers and firefighters, and police officers at such a rapid pace."

Infrastructure projects were always going to take "six months to eight months to get that money actually into the ground because that's the nature of big infrastructure projects," he said.

In Singapore overnight, White House economic adviser Laura D'Andrea Tyson said that "we should be planning on a contingency basis for a second round of stimulus."

On the issue of a second stimulus package, as some congressional Democrats have proposed, Obama said, "The question that some have argued is, 'Okay, what next?' Maybe you stop the freefall but you still have close to 10 percent unemployment. And, you know, this is something that we wrestle with constantly."

The challenge, the president said, is "that we inherited a big deficit, and it is at a certain point potentially counterproductive if we're spending more money than we're having to borrow."

The president said supporters such as retired Gen. Colin Powell and billionaire investor Warren Buffet, who have said they're worried about the massive deficits the Obama administration is creating, have "legitimate concerns. In the mid-term and long-term, we're going to have to get control of that."

Working on short-term stimulus "is one that where we're pressing the gas, pressing the brakes, trying to get it right," he said.

The issues the president is dealing with here may be serious, but first lady Michelle Obama and first tweens Sasha and Malia accompanied their father to Moscow.

Calling his daughters "great travelers," the president said that "Sasha was walking down one of the halls of the Kremlin yesterday. She had her trench coat on, had her pockets in her trench coat."

The president joked that he and his wife "called her Agent 99, she just looked like she knew where she was going. I thought she was going to pull out her shoe phone."