Apr 3, 2012 | By ThinkProgress War Room
President Obama: 2012 is 'Make-or-Break Moment for the Middle Class'
Speaking today to a convention of news editors, President Obama laid
out in the clearest possible terms the two competing visions for
America's future and the choice the country faces over the next few
months:
I believe this is a make-or-break moment for the middle class, and I
can't remember a time when the choice between competing visions of our
future has been so unambiguously clear.
The president, in stark and unambiguous terms, attacked the extreme
Republican budget passed by the House of Representatives last week:
This Congressional Republican budget is something different
altogether. It is a Trojan Horse. Disguised as deficit reduction plan,
it is really an attempt to impose a radical vision on our country. It
is thinly-veiled Social Darwinism. It is antithetical to our entire
history as a land of opportunity and upward mobility for everybody
who's willing to work for it — a place where prosperity doesn't
trickle down from the top, but grows outward from the heart of the
middle class. And by gutting the very things we need to grow an
economy that's built to last — education and training; research and
development; our infrastructure — it is a prescription for decline.
The president also took the opportunity to drive home one of the
central elements of the GOP's disastrous budget plan — that it "ends
Medicare as we know it":
Instead of being enrolled in Medicare when they turn 65, seniors to
retire a decade from now would get a voucher…The net result is our
country will end up spending more on health care and the only reason
the government will save any money is at — is because we have shifted
it to seniors. They will bear more of the costs themselves. It is a
bad idea. It will ultimately end Medicare as we know it.
The president added that the Republican budget — and the conservative
vision for the future — is now "so far to the right it makes the
Contract with America look like the New Deal."
The president's entire speech is a must read (which you can do here)
or watch (which you can do here).
IN TWO SENTENCES: The conservative vision for the future leaves
everyone on their own and doubles down on the failed conservative
policies that caused the economy to collapse, income inequality to
reach record levels, and jobs and middle class incomes to decline. The
progressive vision for the future is one where we're all in it
together, where we invest in a strong middle class, and where the
economy works for everyone, not just the privileged few.
Remarks by the President at the Associated Press Luncheon
Marriott Wardman Park
Washington, D.C.
12:35 P.M. EDT
THE PRESIDENT: Thank you very much. (Applause.) Please have a seat.
Well, good afternoon, and thank you to Dean Singleton and the board
of the Associated Press for inviting me here today. It is a pleasure
to speak to all of you -- and to have a microphone that I can see.
(Laughter.) Feel free to transmit any of this to Vladimir if you see
him. (Laughter.)
Clearly, we're already in the beginning months of another long, lively
election year. There will be gaffes and minor controversies, be hot
mics and Etch-a-Sketch moments. You will cover every word that we
say, and we will complain vociferously about the unflattering words
that you write -- unless, of course, you're writing about the other
guy -- in which case, good job. (Laughter.)
But there are also big, fundamental issues at stake right now --
issues that deserve serious debate among every candidate, and serious
coverage among every reporter. Whoever he may be, the next President
will inherit an economy that is recovering, but not yet recovered,
from the worst economic calamity since the Great Depression. Too many
Americans will still be looking for a job that pays enough to cover
their bills or their mortgage. Too many citizens will still lack the
sort of financial security that started slipping away years before
this recession hit. A debt that has grown over the last decade,
primarily as a result of two wars, two massive tax cuts, and an
unprecedented financial crisis, will have to be paid down.
In the face of all these challenges, we're going to have to answer a
central question as a nation: What, if anything, can we do to restore
a sense of security for people who are willing to work hard and act
responsibly in this country? Can we succeed as a country where a
shrinking number of people do exceedingly well, while a growing number
struggle to get by? Or are we better off when everyone gets a fair
shot, and everyone does their fair share, and everyone plays by the
same rules?
This is not just another run-of-the-mill political debate. I've said
it's the defining issue of our time, and I believe it. It's why I ran
in 2008. It's what my presidency has been about. It's why I'm running
again. I believe this is a make-or-break moment for the middle class,
and I can't remember a time when the choice between competing visions
of our future has been so unambiguously clear.
Keep in mind, I have never been somebody who believes that government
can or should try to solve every problem. Some of you know my first
job in Chicago was working with a group of Catholic churches that
often did more good for the people in their communities than any
government program could. In those same communities I saw that no
education policy, however well crafted, can take the place of a
parent's love and attention.
As President, I've eliminated dozens of programs that weren't working,
and announced over 500 regulatory reforms that will save businesses
and taxpayers billions, and put annual domestic spending on a path to
become the smallest share of the economy since Dwight Eisenhower held
this office -- since before I was born. I know that the true engine
of job creation in this country is the private sector, not Washington,
which is why I've cut taxes for small business owners 17 times over
the last three years.
So I believe deeply that the free market is the greatest force for
economic progress in human history. My mother and the grandparents
who raised me instilled the values of self-reliance and personal
responsibility that remain the cornerstone of the American idea. But
I also share the belief of our first Republican President, Abraham
Lincoln -- a belief that, through government, we should do together
what we cannot do as well for ourselves.
That belief is the reason this country has been able to build a strong
military to keep us safe, and public schools to educate our children.
That belief is why we've been able to lay down railroads and highways
to facilitate travel and commerce. That belief is why we've been able
to support the work of scientists and researchers whose discoveries
have saved lives, and unleashed repeated technological revolutions,
and led to countless new jobs and entire industries.
That belief is also why we've sought to ensure that every citizen can
count on some basic measure of security. We do this because we
recognize that no matter how responsibly we live our lives, any one of
us, at any moment, might face hard times, might face bad luck, might
face a crippling illness or a layoff. And so we contribute to
programs like Medicare and Social Security, which guarantee health
care and a source of income after a lifetime of hard work. We provide
unemployment insurance, which protects us against unexpected job loss
and facilitates the labor mobility that makes our economy so dynamic.
We provide for Medicaid, which makes sure that millions of seniors in
nursing homes and children with disabilities are getting the care that
they need.
For generations, nearly all of these investments -- from
transportation to education to retirement programs -- have been
supported by people in both parties. As much as we might associate
the G.I. Bill with Franklin Roosevelt, or Medicare with Lyndon
Johnson, it was a Republican, Lincoln, who launched the
Transcontinental Railroad, the National Academy of Sciences, land
grant colleges. It was Eisenhower who launched the Interstate Highway
System and new investment in scientific research. It was Richard
Nixon who created the Environmental Protection Agency, Ronald Reagan
who worked with Democrats to save Social Security. It was George W.
Bush who added prescription drug coverage to Medicare.
What leaders in both parties have traditionally understood is that
these investments aren't part of some scheme to redistribute wealth
from one group to another. They are expressions of the fact that we
are one nation. These investments benefit us all. They contribute to
genuine, durable economic growth.
Show me a business leader who wouldn't profit if more Americans could
afford to get the skills and education that today's jobs require. Ask
any company where they'd rather locate and hire workers –- a country
with crumbling roads and bridges, or one that's committed to
high-speed Internet and high-speed railroads and high-tech research
and development?
It doesn't make us weaker when we guarantee basic security for the
elderly or the sick or those who are actively looking for work. What
makes us weaker is when fewer and fewer people can afford to buy the
goods and services our businesses sell, or when entrepreneurs don't
have the financial security to take a chance and start a new business.
What drags down our entire economy is when there's an ever-widening
chasm between the ultra-rich and everybody else.
In this country, broad-based prosperity has never trickled down from
the success of a wealthy few. It has always come from the success of
a strong and growing middle class. That's how a generation who went
to college on the G.I. Bill, including my grandfather, helped build
the most prosperous economy the world has ever known. That's why a
CEO like Henry Ford made it his mission to pay his workers enough so
they could buy the cars that they made. That's why research has shown
that countries with less inequality tend to have stronger and steadier
economic growth over the long run.
And yet, for much of the last century, we have been having the same
argument with folks who keep peddling some version of trickle-down
economics. They keep telling us that if we'd convert more of our
investments in education and research and health care into tax cuts --
especially for the wealthy -- our economy will grow stronger. They
keep telling us that if we'd just strip away more regulations, and let
businesses pollute more and treat workers and consumers with impunity,
that somehow we'd all be better off. We're told that when the wealthy
become even wealthier, and corporations are allowed to maximize their
profits by whatever means necessary, it's good for America, and that
their success will automatically translate into more jobs and
prosperity for everybody else. That's the theory.
Now, the problem for advocates of this theory is that we've tried
their approach -- on a massive scale. The results of their experiment
are there for all to see. At the beginning of the last decade, the
wealthiest Americans received a huge tax cut in 2001 and another huge
tax cut in 2003. We were promised that these tax cuts would lead to
faster job growth. They did not. The wealthy got wealthier -- we
would expect that. The income of the top 1 percent has grown by more
than 275 percent over the last few decades, to an average of $1.3
million a year. But prosperity sure didn't trickle down.
Instead, during the last decade, we had the slowest job growth in half
a century. And the typical American family actually saw their incomes
fall by about 6 percent, even as the economy was growing.
It was a period when insurance companies and mortgage lenders and
financial institutions didn't have to abide by strong enough
regulations, or they found their ways around them. And what was the
result? Profits for many of these companies soared. But so did
people's health insurance premiums. Patients were routinely denied
care, often when they needed it most. Families were enticed, and
sometimes just plain tricked, into buying homes they couldn't afford.
Huge, reckless bets were made with other people's money on the line.
And our entire financial system was nearly destroyed.
So we tried this theory out. And you would think that after the
results of this experiment in trickle-down economics, after the
results were made painfully clear, that the proponents of this theory
might show some humility, might moderate their views a bit. You'd
think they'd say, you know what, maybe some rules and regulations are
necessary to protect the economy and prevent people from being taken
advantage of by insurance companies or credit card companies or
mortgage lenders. Maybe, just maybe, at a time of growing debt and
widening inequality, we should hold off on giving the wealthiest
Americans another round of big tax cuts. Maybe when we know that most
of today's middle-class jobs require more than a high school degree,
we shouldn't gut education, or lay off thousands of teachers, or raise
interest rates on college loans, or take away people's financial aid.
But that's exactly the opposite of what they've done. Instead of
moderating their views even slightly, the Republicans running Congress
right now have doubled down, and proposed a budget so far to the right
it makes the Contract with America look like the New Deal.
(Laughter.) In fact, that renowned liberal, Newt Gingrich, first
called the original version of the budget "radical" and said it would
contribute to "right-wing social engineering." This is coming from
Newt Gingrich.
And yet, this isn't a budget supported by some small rump group in the
Republican Party. This is now the party's governing platform. This
is what they're running on. One of my potential opponents, Governor
Romney, has said that he hoped a similar version of this plan from
last year would be introduced as a bill on day one of his presidency.
He said that he's "very supportive" of this new budget, and he even
called it "marvelous" -- which is a word you don't often hear when it
comes to describing a budget. (Laughter.) It's a word you don't
often hear generally. (Laughter.)
So here's what this "marvelous" budget does. Back in the summer, I
came to an agreement with Republicans in Congress to cut roughly $1
trillion in annual spending. Some of these cuts were about getting
rid of waste; others were about programs that we support but just
can't afford given our deficits and our debt. And part of the
agreement was a guarantee of another trillion in savings, for a total
of about $2 trillion in deficit reduction.
This new House Republican budget, however, breaks our bipartisan
agreement and proposes massive new cuts in annual domestic spending –-
exactly the area where we've already cut the most. And I want to
actually go through what it would mean for our country if these cuts
were to be spread out evenly. So bear with me. I want to go through
this -- because I don't think people fully appreciate the nature of
this budget.
The year after next, nearly 10 million college students would see
their financial aid cut by an average of more than $1,000 each. There
would be 1,600 fewer medical grants, research grants for things like
Alzheimer's and cancer and AIDS. There would be 4,000 fewer
scientific research grants, eliminating support for 48,000
researchers, students, and teachers. Investments in clean energy
technologies that are helping us reduce our dependence on foreign oil
would be cut by nearly a fifth.
If this budget becomes law and the cuts were applied evenly, starting
in 2014, over 200,000 children would lose their chance to get an early
education in the Head Start program. Two million mothers and young
children would be cut from a program that gives them access to healthy
food. There would be 4,500 fewer federal grants at the Department of
Justice and the FBI to combat violent crime, financial crime, and help
secure our borders. Hundreds of national parks would be forced to
close for part or all of the year. We wouldn't have the capacity to
enforce the laws that protect the air we breathe, the water we drink,
or the food that we eat.
Cuts to the FAA would likely result in more flight cancellations,
delays, and the complete elimination of air traffic control services
in parts of the country. Over time, our weather forecasts would
become less accurate because we wouldn't be able to afford to launch
new satellites. And that means governors and mayors would have to
wait longer to order evacuations in the event of a hurricane.
That's just a partial sampling of the consequences of this budget.
Now, you can anticipate Republicans may say, well, we'll avoid some of
these cuts -- since they don't specify exactly the cuts that they
would make. But they can only avoid some of these cuts if they cut
even deeper in other areas. This is math. If they want to make
smaller cuts to medical research that means they've got to cut even
deeper in funding for things like teaching and law enforcement. The
converse is true as well. If they want to protect early childhood
education, it will mean further reducing things like financial aid for
young people trying to afford college.
Perhaps they will never tell us where the knife will fall -- but you
can be sure that with cuts this deep, there is no secret plan or
formula that will be able to protect the investments we need to help
our economy grow.
This is not conjecture. I am not exaggerating. These are facts. And
these are just the cuts that would happen the year after next.
If this budget became law, by the middle of the century, funding for
the kinds of things I just mentioned would have to be cut by about 95
percent. Let me repeat that. Those categories I just mentioned we
would have to cut by 95 percent. As a practical matter, the federal
budget would basically amount to whatever is left in entitlements,
defense spending, and interest on the national debt -- period. Money
for these investments that have traditionally been supported on a
bipartisan basis would be practically eliminated.
And the same is true for other priorities like transportation, and
homeland security, and veterans programs for the men and women who
have risked their lives for this country. This is not an
exaggeration. Check it out yourself.
And this is to say nothing about what the budget does to health care.
We're told that Medicaid would simply be handed over to the states --
that's the pitch: Let's get it out of the central bureaucracy. The
states can experiment. They'll be able to run the programs a lot
better. But here's the deal the states would be getting. They would
have to be running these programs in the face of the largest cut to
Medicaid that has ever been proposed -- a cut that, according to one
nonpartisan group, would take away health care for about 19 million
Americans -- 19 million.
Who are these Americans? Many are someone's grandparents who, without
Medicaid, won't be able to afford nursing home care without Medicaid.
Many are poor children. Some are middle-class families who have
children with autism or Down's Syndrome. Some are kids with
disabilities so severe that they require 24-hour care. These are the
people who count on Medicaid.
Then there's Medicare. Because health care costs keep rising and the
Baby Boom generation is retiring, Medicare, we all know, is one of the
biggest drivers of our long-term deficit. That's a challenge we have
to meet by bringing down the cost of health care overall so that
seniors and taxpayers can share in the savings.
But here's the solution proposed by the Republicans in Washington, and
embraced by most of their candidates for president: Instead of being
enrolled in Medicare when they turn 65, seniors who retire a decade
from now would get a voucher that equals the cost of the second
cheapest health care plan in their area. If Medicare is more
expensive than that private plan, they'll have to pay more if they
want to enroll in traditional Medicare. If health care costs rise
faster than the amount of the voucher -- as, by the way, they've been
doing for decades -- that's too bad. Seniors bear the risk. If the
voucher isn't enough to buy a private plan with the specific doctors
and care that you need, that's too bad.
So most experts will tell you the way this voucher plan encourages
savings is not through better care at cheaper cost. The way these
private insurance companies save money is by designing and marketing
plans to attract the youngest and healthiest seniors -- cherry-picking
-- leaving the older and sicker seniors in traditional Medicare, where
they have access to a wide range of doctors and guaranteed care. But
that, of course, makes the traditional Medicare program even more
expensive, and raise premiums even further.
The net result is that our country will end up spending more on health
care, and the only reason the government will save any money -- it
won't be on our books -- is because we've shifted it to seniors.
They'll bear more of the costs themselves. It's a bad idea, and it
will ultimately end Medicare as we know it.
Now, the proponents of this budget will tell us we have to make all
these draconian cuts because our deficit is so large; this is an
existential crisis, we have to think about future generations, so on
and so on. And that argument might have a shred of credibility were
it not for their proposal to also spend $4.6 trillion over the next
decade on lower tax rates.
We're told that these tax cuts will supposedly be paid for by closing
loopholes and eliminating wasteful deductions. But the Republicans in
Congress refuse to list a single tax loophole they are willing to
close. Not one. And by the way, there is no way to get even close to
$4.6 trillion in savings without dramatically reducing all kinds of
tax breaks that go to middle-class families -- tax breaks for health
care, tax breaks for retirement, tax breaks for homeownership.
Meanwhile, these proposed tax breaks would come on top of more than a
trillion dollars in tax giveaways for people making more than $250,000
a year. That's an average of at least $150,000 for every millionaire
in this country -- $150,000.
Let's just step back for a second and look at what $150,000 pays for:
A year's worth of prescription drug coverage for a senior citizen.
Plus a new school computer lab. Plus a year of medical care for a
returning veteran. Plus a medical research grant for a chronic
disease. Plus a year's salary for a firefighter or police officer.
Plus a tax credit to make a year of college more affordable. Plus a
year's worth of financial aid. One hundred fifty thousand dollars
could pay for all of these things combined -- investments in education
and research that are essential to economic growth that benefits all
of us. For $150,000, that would be going to each millionaire and
billionaire in this country. This budget says we'd be better off as a
country if that's how we spend it.
This is supposed to be about paying down our deficit? It's laughable.
The bipartisan Simpson-Bowles commission that I created -- which the
Republicans originally were for until I was for it -- that was about
paying down the deficit. And I didn't agree with all the details. I
proposed about $600 billion more in revenue and $600 billion -- I'm
sorry -- it proposed about $600 billion more in revenue and about $600
billion more in defense cuts than I proposed in my own budget. But
Bowles-Simpson was a serious, honest, balanced effort between
Democrats and Republicans to bring down the deficit. That's why,
although it differs in some ways, my budget takes a similarly balanced
approach: Cuts in discretionary spending, cuts in mandatory spending,
increased revenue.
This congressional Republican budget is something different
altogether. It is a Trojan Horse. Disguised as deficit reduction
plans, it is really an attempt to impose a radical vision on our
country. It is thinly veiled social Darwinism. It is antithetical to
our entire history as a land of opportunity and upward mobility for
everybody who's willing to work for it; a place where prosperity
doesn't trickle down from the top, but grows outward from the heart of
the middle class. And by gutting the very things we need to grow an
economy that's built to last -- education and training, research and
development, our infrastructure -- it is a prescription for decline.
And everybody here should understand that because there's very few
people here who haven't benefitted at some point from those
investments that were made in the '50s and the '60s and the '70s and
the '80s. That's part of how we got ahead. And now, we're going to
be pulling up those ladders up for the next generation?
So in the months ahead, I will be fighting as hard as I know how for
this truer vision of what the United States of America is all about.
Absolutely, we have to get serious about the deficit. And that will
require tough choices and sacrifice. And I've already shown myself
willing to make these tough choices when I signed into law the biggest
spending cut of any President in recent memory. In fact, if you
adjust for the economy, the Congressional Budget Office says the
overall spending next year will be lower than any year under Ronald
Reagan.
And I'm willing to make more of those difficult spending decisions in
the months ahead. But I've said it before and I'll say it again --
there has to be some balance. All of us have to do our fair share.
I've also put forward a detailed plan that would reform and strengthen
Medicare and Medicaid. By the beginning of the next decade, it
achieves the same amount of annual health savings as the plan proposed
by Simpson-Bowles -- the Simpson-Bowles commission, and it does so by
making changes that people in my party haven't always been comfortable
with. But instead of saving money by shifting costs to seniors, like
the congressional Republican plan proposes, our approach would lower
the cost of health care throughout the entire system. It goes after
excessive subsidies to prescription drug companies. It gets more
efficiency out of Medicaid without gutting the program. It asks the
very wealthiest seniors to pay a little bit more. It changes the way
we pay for health care -- not by procedure or the number of days spent
in a hospital, but with new incentives for doctors and hospitals to
improve their results.
And it slows the growth of Medicare costs by strengthening an
independent commission -- a commission not made up of bureaucrats from
government or insurance companies, but doctors and nurses and medical
experts and consumers, who will look at all the evidence and recommend
the best way to reduce unnecessary health care spending while
protecting access to the care that the seniors need.
We also have a much different approach when it comes to taxes -- an
approach that says if we're serious about paying down our debt, we
can't afford to spend trillions more on tax cuts for folks like me,
for wealthy Americans who don't need them and weren't even asking for
them, and that the country cannot afford. At a time when the share of
national income flowing to the top 1 percent of people in this country
has climbed to levels last seen in the 1920s, those same folks are
paying taxes at one of the lowest rates in 50 years. As both I and
Warren Buffett have pointed out many times now, he's paying a lower
tax rate than his secretary. That is not fair. It is not right.
And the choice is really very simple. If you want to keep these tax
rates and deductions in place -- or give even more tax breaks to the
wealthy, as the Republicans in Congress propose -- then one of two
things happen: Either it means higher deficits, or it means more
sacrifice from the middle class. Seniors will have to pay more for
Medicare. College students will lose some of their financial aid.
Working families who are scraping by will have to do more because the
richest Americans are doing less. I repeat what I've said before:
That is not class warfare, that is not class envy, that is math.
If that's the choice that members of Congress want to make, then we're
going to make sure every American knows about it. In a few weeks,
there will be a vote on what we've called the Buffett Rule. Simple
concept: If you make more than a million dollars a year -- not that
you have a million dollars -- if you make more than a million dollars
annually, then you should pay at least the same percentage of your
income in taxes as middle-class families do. On the other hand, if
you make under $250,000 a year -- like 98 percent of American families
do -- then your taxes shouldn't go up. That's the proposal.
Now, you'll hear some people point out that the Buffett Rule alone
won't raise enough revenue to solve our deficit problems. Maybe not,
but it's definitely a step in the right direction. And I intend to
keep fighting for this kind of balance and fairness until the other
side starts listening, because I believe this is what the American
people want. I believe this is the best way to pay for the
investments we need to grow our economy and strengthen the middle
class. And by the way, I believe it's the right thing to do.
This larger debate that we will be having and that you will be
covering in the coming year about the size and role of government,
this debate has been with us since our founding days. And during
moments of great challenge and change, like the ones that we're living
through now, the debate gets sharper; it gets more vigorous. That's a
good thing. As a country that prizes both our individual freedom and
our obligations to one another, this is one of the most important
debates that we can have.
But no matter what we argue or where we stand, we have always held
certain beliefs as Americans. We believe that in order to preserve
our own freedoms and pursue our own happiness, we can't just think
about ourselves. We have to think about the country that made those
liberties possible. We have to think about our fellow citizens with
whom we share a community. We have to think about what's required to
preserve the American Dream for future generations.
And this sense of responsibility -- to each other and our country --
this isn't a partisan feeling. This isn't a Democratic or Republican
idea. It's patriotism. And if we keep that in mind, and uphold our
obligations to one another and to this larger enterprise that is
America, then I have no doubt that we will continue our long and
prosperous journey as the greatest nation on Earth.
Thank you. God bless you. God bless the United States of America.
(Applause.) Thank you.
MR. SINGLETON: Thank you, Mr. President. We appreciate so much you
being with us today. I have some questions from the audience, which I
will ask -- and I'll be more careful than I was last time I did this.
Republicans have been sharply critical of your budget ideas as well.
What can you say to the Americans who just want both sides to stop
fighting and get some work done on their behalf?
THE PRESIDENT: Well, I completely understand the American people's
frustrations, because the truth is that these are eminently solvable
problems. I know that Christine Lagarde is here from the IMF, and
she's looking at the books of a lot of other countries around the
world. The kinds of challenges they face fiscally are so much more
severe than anything that we confront -- if we make some sensible
decisions.
So the American people's impulses are absolutely right. These are
solvable problems if people of good faith came together and were
willing to compromise. The challenge we have right now is that we
have on one side, a party that will brook no compromise. And this is
not just my assertion. We had presidential candidates who stood on a
stage and were asked, "Would you accept a budget package, a deficit
reduction plan, that involved $10 of cuts for every dollar in revenue
increases?" Ten-to-one ratio of spending cuts to revenue. Not one of
them raised their hand.
Think about that. Ronald Reagan, who, as I recall, is not accused of
being a tax-and-spend socialist, understood repeatedly that when the
deficit started to get out of control, that for him to make a deal he
would have to propose both spending cuts and tax increases. Did it
multiple times. He could not get through a Republican primary today.
So let's look at Bowles-Simpson. Essentially, my differences with
Bowles-Simpson were I actually proposed less revenue and slightly
lower defense spending cuts. The Republicans want to increase defense
spending and take in no revenue, which makes it impossible to balance
the deficit under the terms that Bowles-Simpson laid out -- unless you
essentially eliminate discretionary spending. You don't just cut
discretionary spending. Everything we think of as being pretty
important -- from education to basic science and research to
transportation spending to national parks to environmental protection
-- we'd essentially have to eliminate.
I guess another way of thinking about this is -- and this bears on
your reporting. I think that there is oftentimes the impulse to
suggest that if the two parties are disagreeing, then they're equally
at fault and the truth lies somewhere in the middle, and an
equivalence is presented -- which reinforces I think people's cynicism
about Washington generally. This is not one of those situations where
there's an equivalence. I've got some of the most liberal Democrats
in Congress who were prepared to make significant changes to
entitlements that go against their political interests, and who said
they were willing to do it. And we couldn't get a Republican to stand
up and say, we'll raise some revenue, or even to suggest that we won't
give more tax cuts to people who don't need them.
And so I think it's important to put the current debate in some
historical context. It's not just true, by the way, of the budget.
It's true of a lot of the debates that we're having out here.
Cap and trade was originally proposed by conservatives and Republicans
as a market-based solution to solving environmental problems. The
first President to talk about cap and trade was George H.W. Bush. Now
you've got the other party essentially saying we shouldn't even be
thinking about environmental protection; let's gut the EPA.
Health care, which is in the news right now -- there's a reason why
there's a little bit of confusion in the Republican primary about
health care and the individual mandate since it originated as a
conservative idea to preserve the private marketplace in health care
while still assuring that everybody got covered, in contrast to a
single-payer plan. Now, suddenly, this is some socialist overreach.
So as all of you are doing your reporting, I think it's important to
remember that the positions I'm taking now on the budget and a host of
other issues, if we had been having this discussion 20 years ago, or
even 15 years ago, would have been considered squarely centrist
positions. What's changed is the center of the Republican Party. And
that's certainly true with the budget.
MR. SINGLETON: Mr. President, the managing director of the
(inaudible) for continuation of United States leadership (inaudible)
economic issues, and underscored the need for a lower deficit and
lower debt. How can you respond to that claim?
THE PRESIDENT: Well, look, she's absolutely right. It's interesting,
when I travel around the world at these international fora -- and I've
said this before -- the degree to which America is still the one
indispensable nation, the degree to which, even as other countries are
rising and their economies are expanding, we are still looked to for
leadership, for agenda setting -- not just because of our size, not
just because of our military power, but because there is a sense that
unlike most superpowers in the past, we try to set out a set of
universal rules, a set of principles by which everybody can benefit.
And that's true on the economic front as well. We continue to be the
world's largest market, an important engine for economic growth. We
can't return to a time when by simply borrowing and consuming, we end
up driving global economic growth.
I said this a few months after I was elected at the first G20 summit.
I said the days when Americans using their credit cards and home
equity loans finance the rest of the world's growth by taking in
imports from every place else -- those days are over. On the other
hand, we continue to be a extraordinarily important market and
foundation for global economic growth.
We do have to take care of our deficits. I think Christine has spoken
before, and I think most economists would argue as well, that the
challenge when it comes to our deficits is not short-term
discretionary spending, which is manageable. As I said before and I
want to repeat, as a percentage of our GDP, our discretionary spending
-- all the things that the Republicans are proposing cutting -- is
actually lower than it's been since Dwight Eisenhower. There has not
been some massive expansion of social programs, programs that help the
poor, environmental programs, education programs. That's not our
problem.
Our problem is that our revenue has dropped down to between 15 and 16
percent -- far lower than it has been historically, certainly far
lower than it was under Ronald Reagan -- at the same time as our
health care costs have surged, and our demographics mean that there is
more and more pressure being placed on financing our Medicare,
Medicaid and Social Security programs.
So at a time when the recovery is still gaining steam, and
unemployment is still very high, the solution should be pretty
apparent. And that is even as we continue to make investments in
growth today -- for example, putting some of our construction workers
back to work rebuilding schools and roads and bridges, or helping
states to rehire teachers at a time when schools are having a huge
difficulty retaining quality teachers in the classroom -- all of which
would benefit our economy, we focus on a long-term plan to stabilize
our revenues at a responsible level and to deal with our health care
programs in a responsible way. And that's exactly what I'm proposing.
And what we've proposed is let's go back, for folks who are making
more than $250,000 a year, to levels that were in place during the
Clinton era, when wealthy people were doing just fine, and the economy
was growing a lot stronger than it did after they were cut. And let's
take on Medicare and Medicaid in a serious way -- which is not just a
matter of taking those costs off the books, off the federal books, and
pushing them onto individual seniors, but let's actually reduce health
care costs. Because we spend more on health care with not as good
outcomes as any other advanced, developed nation on Earth.
And that would seem to be a sensible proposal. The problem right now
is not the technical means to solve it. The problem is our politics.
And that's part of what this election and what this debate will need
to be about, is, are we, as a country, willing to get back to
common-sense, balanced, fair solutions that encourage our long-term
economic growth and stabilize our budget. And it can be done.
One last point I want to make, Dean, that I think is important,
because it goes to the growth issue. If state and local government
hiring were basically on par to what our current recovery -- on par to
past recoveries, the unemployment rate would probably be about a point
lower than it is right now. If the construction industry were going
through what we normally go through, that would be another point
lower. The challenge we have right now -- part of the challenge we
have in terms of growth has to do with the very specific issues of
huge cuts in state and local government, and the housing market still
recovering from this massive bubble. And that -- those two things are
huge headwinds in terms of growth.
I say this because if we, for example, put some of those construction
workers back to work, or we put some of those teachers back in the
classroom, that could actually help create the kind of virtuous cycle
that would bring in more revenues just because of economic growth,
would benefit the private sector in significant ways. And that could
help contribute to deficit reduction in the short term, even as we
still have to do these important changes to our health care programs
over the long term.
MR. SINGLETON: Mr. President, you said yesterday that it would be
unprecedented for a Supreme Court to overturn laws passed by an
elected Congress. But that is exactly what the Court has done during
its entire existence. If the Court were to overturn individual
mandate, what would you do, or propose to do, for the 30 million
people who wouldn't have health care after that ruling?
THE PRESIDENT: Well, first of all, let me be very specific. We have
not seen a Court overturn a law that was passed by Congress on a
economic issue, like health care, that I think most people would
clearly consider commerce -- a law like that has not been overturned
at least since Lochner. Right? So we're going back to the '30s, pre
New Deal.
And the point I was making is that the Supreme Court is the final say
on our Constitution and our laws, and all of us have to respect it,
but it's precisely because of that extraordinary power that the Court
has traditionally exercised significant restraint and deference to our
duly elected legislature, our Congress. And so the burden is on those
who would overturn a law like this.
Now, as I said, I expect the Supreme Court actually to recognize that
and to abide by well-established precedence out there. I have
enormous confidence that in looking at this law, not only is it
constitutional, but that the Court is going to exercise its
jurisprudence carefully because of the profound power that our Supreme
Court has. As a consequence, we're not spending a whole bunch of time
planning for contingencies.
What I did emphasize yesterday is there is a human element to this
that everybody has to remember. This is not an abstract exercise. I
get letters every day from people who are affected by the health care
law right now, even though it's not fully implemented. Young people
who are 24, 25, who say, you know what, I just got diagnosed with a
tumor. First of all, I would not have gone to get a check-up if I
hadn't had health insurance. Second of all, I wouldn't have been able
to afford to get it treated had I not been on my parent's plan. Thank
you and thank Congress for getting this done.
I get letters from folks who have just lost their job, their COBRA is
running out. They're in the middle of treatment for colon cancer or
breast cancer, and they're worried when their COBRA runs out, if
they're still sick, what are they going to be able to do because
they're not going to be able to get health insurance.
And the point I think that was made very ably before the Supreme
Court, but I think most health care economists who have looked at this
have acknowledged, is there are basically two ways to cover people
with preexisting conditions or assure that people can always get
coverage even when they had bad illnesses. One way is the
single-payer plan -- everybody is under a single system, like
Medicare. The other way is to set up a system in which you don't have
people who are healthy but don't bother to get health insurance, and
then we all have to pay for them in the emergency room.
That doesn't work, and so, as a consequence, we've got to make sure
that those folks are taking their responsibility seriously, which is
what the individual mandate does.
So I don't anticipate the Court striking this down. I think they take
their responsibilities very seriously. But I think what's more
important is for all of us, Democrats and Republicans, to recognize
that in a country like ours -- the wealthiest, most powerful country
on Earth -- we shouldn't have a system in which millions of people are
at risk of bankruptcy because they get sick, or end up waiting until
they do get sick and then go to the emergency room, which involves all
of us paying for it.
MR. SINGLETON: Mr. President, you've been very, very generous with
your time, and we appreciate very much you being here.
THE PRESIDENT: Thank you so much, everybody. (Applause.) Thank you.
END
Video:
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
Together, we can change the world, one mind at a time.
Have a great day,
Tommy
--
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