Barack Obama Interview: Complete Transcript

January 27, 2008— -- STEPHANOPOULOS: Congratulations, Senator Obama, on your victory. Does it feellike vindication?

OBAMA: Well, you know, it was a wonderful win. And the peopleof South Carolina, I think, were remarkable, not just in providing mea terrific margin of victory. But one of the wonderful stories wasthe turnout.

I mean, we actually had more Democrats vote in the Democraticprimary, or more individuals vote in the Democratic primary than inthe Republican primary. It was 200,000 more people voting this timethan last time. And I think that shows you the enormous enthusiasmyou're seeing, not only for change but also for the Democratic Partyright now.

STEPHANOPOULOS: And more voters, I think, voted for you lastnight than voted in the entire Democratic Party in 2004. Before thevotes were finally counted yesterday, President Clinton was asked whyit was taking both Clintons to handle you in South Carolina. Here'show he responded to our David Wright.

VIDEO CLIP B. CLINTON: Jesse Jackson won South Carolina twice in '84 and'88. And he ran a good campaign, and Senator Obama's run a goodcampaign here. He's run a good campaign everywhere.

STEPHANOPOULOS: The implication there is pretty clear: You'rethe Jesse Jackson of 2008.

OBAMA: Well, you know, Jesse Jackson ran historic races in 1984and 1988, and there's no doubt that that set a precedent for AfricanAmericans running for the highest office in the land. But, you know,that was 20 years ago, George.

And I think that what we saw in this election was a shift inSouth Carolina that I think speaks extraordinarily well, not just forfolks in the South, but all across the country. I think people wantchange. I think they want to get beyond some of the racial politicsthat, you know, has been so dominant in the past.

We're very encouraged as we go to the February 5th states.

STEPHANOPOULOS: Do you think President Clinton was engaging inracial politics there?

OBAMA: Well, you know, I think that that's his frame ofreference was the Jesse Jackson races. That's when, you know, he wasactive and involved and watching what was going to take place in SouthCarolina. I think that a lot of South Carolinians looked at itthrough a different lens.

And certainly our campaign was confident that if we talked aboutthe things that people are really trying to deal with on a day-to-daybasis. If we were talking about how to make sure everybody has healthcare that they can afford, how people are going to be able to go tocollege, making sure that people are able to stay in their homes inthe face of this subprime lending crisis and the larger credit crunchthat we're seeing.

As long as we were focused on those issues, we thought thosewould transcend the sort of racial divisions that we've seen in thepast.

STEPHANOPOULOS: But several in the Clinton camp say that it wasyour campaign that was playing the race card throughout this primary.They point to Dick Harpootlian, one of your major supporters in SouthCarolina, who said that the Clinton campaign was reminiscent of LeeAtwater.

They point to the comments of one of your top advisers, SteveHildebrand, who said that the Clintons have always put people in abox.

STEPHANOPOULOS: They look at everything through racial lines,gender lines, geographic lines. They tend to segment people.

They say that it was your campaign playing the race card.

OBAMA: George, I'm not going to continue sort of the tit-for-tat. I think that the results yesterday spoke for themselves, thatpeople wanted to move beyond some of these old arguments, and theywant to look forward to figure out how we pull the country togetherand move forward, and that's what we're going to do during theremainder of this campaign.

STEPHANOPOULOS: You made that point last night in your victoryspeech as well. You pretty directly said you wanted to move beyondthe Clinton brand of politics, without saying the Clintons by name. Iwant to show voters some of what you said last night.

VIDEO CLIPOBAMA: We're up against decades of bitter partisanship thatcaused politicians to demonize their opponents instead of comingtogether to make college affordable or energy cleaner. It's the kindof partisanship where you're not even allowed to say that a Republicanhad an idea, even if it's one you never agreed with.

STEPHANOPOULOS: You also said that you're up against the ideathat it's acceptable to say anything or do anything. Is that what youthink the Clintons were doing in South Carolina? And you also usedthe word demonize there. Were they trying to demonize you?

OBAMA: No, I don't think they were trying to demonize me, but Ido think that there is a certain brand of politics that we've becomeaccustomed to, and that the Republican Party had perfected and wasoften directed against the Clintons, but that all of us had becomecomplicit in, where we basically think anything is fair game.

And you know, during the course of this campaign, I've said veryclearly, I want to run a positive campaign. But I think it'simportant for all of us to try to talk about policies that areactually going to make a difference in the lives of ordinary people.And as I traveled around South Carolina, whether I was talking toveterans who weren't getting their benefits or I was talking tomothers who couldn't get health care for their kids, they are eagerand anxious to make sure their problems are solved. And that is the kind of approach that we want to take, and Ithink that's where the Democratic Party should go if we want to win inNovember.

STEPHANOPOULOS: So much of the dialogue was about these commentsyou made about Ronald Reagan back in Reno, Nevada. Let me just showour viewers some of what you said back in Reno, so they can have somecontext.

VIDEO CLIP

OBAMA: Ronald Reagan changed the trajectory of America in a waythat, you know, Richard Nixon did not, and in a way that Bill Clintondid not. He tapped into what people were already feeling, which is wewant clarity, we want optimism, we want a return to that sense ofdynamism and, you know, entrepreneurship that had been missing.

STEPHANOPOULOS: You go on to say that the Republican Party wasthe party of ideas for 10 to 15 years, in the sense that they werechallenging the conventional wisdom.

Now, you didn't like the way the Clintons characterized what yousaid there, but just to try to flesh this out, what ideas were youtalking about there? What ideas did the Republicans have that werechallenging the conventional wisdom?

OBAMA: Well, I think that -- keep in mind, Ronald Reagan came induring the 1980s, at a time when I think Democrats still dominatedCongress, when the view was that we were going to solve our problemsoftentimes by expanding government programs. And he challenged manyof those ideas.

Now, keep in mind that back in the 1980s, I was working as acommunity organizer on the streets of Chicago and seeing theconsequences of some of the bad ideas that Ronald Reagan had promoted.

But the broader point that I was making, George, and I don'tthink this is something that is subject to dispute, is that RonaldReagan transformed American politics and set the agenda for a longtime. You know, when Bill Clinton said the era of small government isover, he was echoing some of the shifts that had taken place. Andpart of what had happened was that Ronald Reagan was able to getDemocrats to vote for the Republican ticket, oftentimes against theirown economic interests. And people -- Democrats were often puzzled bythat.

The point is that this is one of those moments when I thinkDemocrats have the opportunity to do the same thing that Ronald Reagandid in 1980. I think there are a lot of disaffected Republicans.They've seen the disastrous policies of George Bush, both domesticallyand internationally, and the question is: Are we going to be able toreach out to those independents and those disillusioned Republicans,and form a working majority so that we can move our agenda forward? So you know, at no point did I suggest that my agenda was RonaldReagan's agenda. The point was that in political terms, we may be inone of those moments where we can get a seismic shift in how thecountry views itself and our future. And we have to take advantage ofthat.

STEPHANOPOULOS: And you do not call them good ideas, but whenyou say that the Republican Party is challenging the conventionalwisdom, isn't it fair for someone to conclude that you'recomplimenting the Republican Party there?

OBAMA: No, because some of the conventional wisdom was right. Imean, it was right to believe that we should be able to provide healthinsurance to all Americans.

Now, what I do believe is that we can't be bogged down in dogma,in thinking about how we're going to deliver health care. So I thinkit's very important for us to be willing to take ideas from allquarters, and to listen to Republicans and conservatives and others interms of how we might go about accomplishing what is a critical goal,which is universal health care. The same is true with the notion ofupward mobility.

You know, I think Reagan trickle-down economics were a disaster,but what I do think is important is for us to think about how can weempower ordinary individuals, so that they can get the education andthe skills that they need in a market economy to succeed.

STEPHANOPOULOS: Take a look at this historically. How couldBill Clinton have changed the trajectory of the country in the 1990sin a way that he did not do? What would you have done differently?

OBAMA: Well, I actually think that Bill Clinton did an importantservice for the Democratic Party, and you know, if you read some ofthe things that I've written in my book, for example, I've been verycomplimentary of Bill Clinton, because I think that he recognized thatwe needed to take the old, traditional values of the Democratic Party-- of equality, of opportunity, of community -- and update them for anew era. And so, I think that Bill Clinton did important work back inthe 1990s.

The question is now, we're in 2008, and how do we move it forwardto the next phase? And I wouldn't be running for president if Ididn't think that I was best equipped to move us in a new direction.

STEPHANOPOULOS: You were also tough on him in places of yourbook. I want to show our viewers some of it. You talked about the1992 campaign, where you said that Clinton's gestures towardsdisaffected Reagan Democrats could seem clumsy and transparent --whatever happened to Sister Souljah? -- or frighteningly cold-hearted,allowing the execution of a mentally retarded death row inmate to goforward on the eve of an important primary. And then in 1996, youtold the Cleveland Plain-Dealer, "the Clintons' campaign isfascinating to a student of politics. It's disturbing to someone whocares about certain issues."

And you seemed to be repeating some of this, these charges aboutthat brand of politics in your speech last night.

Do you think there is a pattern here?

OBAMA: Well, George, first of all, the excerpts that you read,as I think you'll acknowledge, were sandwiched in an entire page ofcomplimenting Bill Clinton for the work that he did. But...

STEPHANOPOULOS: As you just repeated now.

OBAMA: Yes. But there is no doubt that I think that in the'90s, we got caught up in a slash-and-burn politics that the Americanpeople are weary of. And we still see it in Washington today. It isvery hard for us to have a common sense, non-ideological conversationabout how we're going to deal with our energy problems. It's verydifficult for us to figure out how are we going to make this economywork for all people and not just some people.

Now, that is not the Clintons' fault. It is all of our faults,in the sense that we've gotten into these bad habits and we can't seemto have disagreements without being disagreeable.

So part of what I think we have to do is to set a new tone inpolitics. Not a naive one. The insurance companies, the drugcompanies, they're not going to give up their profits easily when itcomes to health care. The oil companies like writing the energybills, and they have a clear agenda. But it does mean that we have toreduce the interests -- or the influence of special interests andlobbyists. I think that we've got to take ethics reform seriously. Ithink that we all have some responsibilities in terms of focusing onhow we're going to solve problems for the American people.

STEPHANOPOULOS: Let's talk about the economy. The immediateeconomic crisis going forward right now, the housing crisisspecifically. Senator Clinton has called on a 90-day freeze on homeforeclosures, and freezing the rates for five years on adjustable ratemortgages. Is that a good idea?

OBAMA: Well, what I've said is that we should put forward a $10billion fund to focus on helping families that are in their homes thathave been induced into mortgages that they can't pay, but who arewilling to pay the current rates that they have. And I think that isan approach that most observers recognize will prevent the kind ofmoral hazards where speculators or lenders who made bad loans somehoware bailed out.

But I think that the problem goes beyond just the immediatecrisis of home foreclosures.

OBAMA: What we have is a situation in which, over the lastdecade, there has been -- the rewards of the economy have all gone tothe top 1 percent.

We've seen people who are wealthy, flush with cash, huge amountsof capital, that have been feeding the real estate bubble, the dotcombubble. But what we haven't seen are ordinary people's incomes andwages going up significantly.

In fact, they've flatlined at the same time that their costs haveskyrocketed.

So what I've talked about is, let's get tax relief, a middle-class tax cut for ordinary working families. Let's make sure thatsenior citizens who make $50,000 or less aren't paying income tax ontheir Social Security.

Let's close corporate tax loopholes and tax savings to pay forit.

Let's shift some of the rewards of the economy to middle andworking-class families. And if we do that, I think we're going tohave the kind of economic growth, from the bottom up, that's alwaysbeen the hallmark of the United States and the American dream

STEPHANOPOULOS: But just to be clear on these specific ideas,you think that, by freezing home foreclosures for 90 days and freezingadjustable-rate mortgages for five years, that could create moralhazards; that's why you're not for it?

OBAMA: Well, I think it is important for us not to bail outlenders who made, in some cases, poorly considered or speculativeloans. I think what is important is to make sure that people arestaying in their homes, particularly first-time home buyers, familieswho are actually living in the house, as opposed to just flipping acondominium.

And I think that we have to sort through how we can help thoseindividuals aggressively, at the same time that we're not bailing outbanks who made loans that they shouldn't have made.

STEPHANOPOULOS: Your home town paper, the Chicago Tribune,endorsed John McCain today. It had some kind words for you as well,but they went on to talk about your relationship with the real estatedeveloper, now indicted, Tony Rezko.

And they wrote this in their editorial. "Obama's assertion innetwork TV interviews last week that nobody had any indications Rezkowas engaging in wrongdoing strained credulity. Tribune stories linkedRezko to questionable fund-raising for Governor Rod Blagojevich in2004, more than a year before the adjacent home and property purchasesby the Obamas and the Rezkos."

One more time, Senator, you need to divulge all there is to knowabout that relationship.

Take that opportunity here.

OBAMA: Well, George, this is a story that has been out there fora year, and has been thoroughly gnawed on by the press, both inChicago and nationally.

Tony Rezko was a friend of mine, a supporter, who I've known for20 years. He was a contributor not just myself but Democrats, as wellas some Republicans, throughout Illinois. Everybody perceived him asa businessman and developer.

He got into trouble that was completely unrelated to me. Andnobody has suggested that I have been involved in any of thoseproblems. I did make a mistake by purchasing a small strip ofproperty from him, at a time where, at that point, he was under thecloud of a potential investigation.

And I've acknowledged that that was a mistake. But again, nobodyhas suggested any wrongdoing. And you know, I think, at this point,it's important for people to recognize that I have actually providedall the information that's out there about it.

STEPHANOPOULOS: One final question on that: Several newsorganizations, the Los Angeles Times, ABC News, have said that youactually collected far more money for your campaign from Rezkoassociates than you have actually returned -- maybe a multiple ofthree or four.

Are you committed to returning every dollar connected to TonyRezko? Will you do that?

OBAMA: Absolutely. I mean, keep in mind, George, that, youknow, what we've done is we've traced any funds that we know of thatwe think were connected to him.

And if there any other funds that were connected to him thatwe're not aware of, then we will certainly return them. It's in ourinterest to do so.

STEPHANOPOULOS: Caroline Kennedy endorses you in the New YorkTimes. This morning she says, "I have never had a president whoinspired me the way people tell me my father inspired them. And forthe first time, I believe that I have found that man."

Mark Halperin reports, on Time Magazine's Web site this morning-- and our reporting seems to confirm it -- that Ted Kennedy is alsoon the verge of endorsing you. Is that true?

OBAMA: Well, you know, I'll let Ted Kennedy speak for himself.And nobody does it better. But obviously, any of the Democraticcandidates would love to have Ted Kennedy's support. And we havecertainly actively sought it.

And you know, I will let him make his announcement and hisdecision when he decides it's appropriate.

STEPHANOPOULOS: We will be watching for that.

STEPHANOPOULOS: Also, Florida is coming up on Tuesday, theFlorida primary. Of course, the Democratic National Committee hassaid that the delegates will not count because Florida moved up itsprimary.

But the other day, Senator Clinton said that she wants theFlorida and Michigan delegations seated at the convention. And sheasked her delegates to vote for it. Will you do the same?

OBAMA: Well, you know, what I'm going to do is, I'm going toabide by the agreement that all the candidates, including SenatorClinton, made when we were out campaigning in Iowa and New Hampshire,which was that we would not campaign, and we would abide by theDemocratic National Committee rules when it came to the seating ofFlorida and Michigan delegates.

You know, obviously, both are extraordinarily important statesthat are very important to the Democrats winning in November. Butwhat I'm going to do is, I'm going to stick to the pledge that I made.

STEPHANOPOULOS: So, that means you will not ask the delegates tovote for it. But bottom line, do you agree with the Clinton camp,given the fact that we're seeing hundreds of thousands of Floridiansgoing to the polls already, voting by absentee -- there are likely tobe more on Tuesday -- that those votes are going to matter in someimportant way?

OBAMA: Well, there are no delegates at stake, and all of usagreed not to campaign there. So, you know, as I said before, when Itell people I'm going to do something or not do something, I try tostick to it. And that's what I'm going to do with respect to Florida.

STEPHANOPOULOS: The longer this campaign goes on and the nastierit gets, the more pressure that's going to be on both you and SenatorClinton to come together and show a united front in November. Are youopen to having Senator Clinton as your running mate, and vice versaserving with her?

OBAMA: Oh, you know, I think it's premature, George, to talkabout running mates. I mean, we've got a lot of election left here.So all of us, I think, are competing vigorously. Senator Edwards isrunning a terrific campaign as well.

And what I want to do is try as much as possible to spend theremaining weeks and potentially months of the campaign talking aboutthe issues that all Democrats should be concerned about, and I thinkall Americans should be concerned about. You know, I alreadymentioned making sure that we have tax relief for middle-income andworking Americans.

I think that the issue of college affordability is absolutelycritical, so I've proposed a $4,000 tuition tax credit for everystudent every year in exchange for national service. We've got totalk about energy and climate change, which I think is going to beextraordinarily important not just for our economy and ourenvironment, but also for our national security.

And finally, I don't want the war in Iraq to be forgotten. Ithink that I continue to meet every single day young men and youngwomen who have been injured in war, families who are being strained bythe fourth or fifth rotation. We're still spending $9 billion everysingle month that we could be investing in broadband lines in ruralareas and rebuilding bridges and roads here in the United States ofAmerica.

That has to be our focus. And in fact, there has been aconvergence on a lot of ideas among the Democrats. My suspicion isthat by the time we get a Democratic nominee, the party will beunified and it will be energized.

We have doubled turnout, essentially, in every single contestfrom what we did four years ago. And we are seeing huge numbers ofindependents and Republicans flock into the Democratic primary. Sothere are a lot more folks who want change than folks who aresatisfied with the status quo.

I think that bodes well for the November elections.

STEPHANOPOULOS: So you believe the party will come together.Senator Obama, thanks very much for your time this morning.

OBAMA: It was great to talk to you, George. Thank you.

STEPHANOPOULOS: So long.