Transcript: President Obama's Twitter Townhall

Thursday, 07 Jul 2011 03:30 PM

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Transcript Adapted from President Obama’s “Twitter” Town Hall

Twitter Question: What mistakes have you made in handling this recession and what would you do differently?

President Obama: That’s a terrific question. When I first came into office we were facing the worst recession since the Great Depression, certainly the worst recession we’ve faced in our lifetime. And we had to act quickly and make some bold and sometimes difficult decisions. It was absolutely the right thing to do to put forward a recovery act that cut taxes for middle class folks so they had more money in their pocket to get through the recession. It was the right thing to do to provide assistance to states to make sure they didn’t have to lay off teachers and cops and firefighters and cops as quickly as they needed to. And it was the right thing to do to try to rebuild our infrastructure and put people back to work building roads and bridges and so forth. It was also the right thing to do, although a tough decision, to save the auto industry which is now profitable and gaining market share for the first time in a very long time.

Probably two things that I would do differently, one would have been to explain to the American people that it is going to take us a while to get out of this. I think even I didn’t realize the magnitude because most economists didn’t realize the magnitude of the recession until maybe two or three months into my presidency where we started realizing that we’d lost 4 million jobs before I was even sworn in. And so I think people may not have been prepared for how long this was going to take and why we were going to have to make some very difficult decisions and choices. And I take responsibility for that because setting people’s expectations is part of how you end up being able to respond well.

The other is in the area of housing. I think the continuing decline in the housing market is something that hasn’t bottomed out as quickly we expected. So that’s continued to be a big drag on the economy. We had to revamp housing several times to try and help people stay in their homes and try to start lifting home values up. But, of all the things we’ve done that’s probably been the area that’s been most stubborn in us trying to solve the problem.

Twitter Question: Tech and knowledge industries are thriving, yet jobs discussion always centers on manufacturing, why not be realistic about jobs?

President Obama: We have to be successful at the cutting edge industries of the future like Twitter. But we also have always been a country that makes stuff. Manufacturing jobs end up having both higher wages typically and they also have bigger multiplier effects. One manufacturing jobs can support a range of other jobs—suppliers, the restaurant near a plant, and so on and so forth. So they end up having a substantial impact on the overall economy. What we want to focus on is advanced manufacturing that combines new technology--so research and development into how are we going to create the next Twitter, how are we going to create the next Google, how are we going to create the next big thing—but make sure that production is here. It’s great that we have an Apple that is creating iPods and iPads, and designing them and creating the software, but it’d be nice if we were also making the iPads and the iPods here in the United States because that would be some more jobs that people can work at.

And there are going to be a series of decisions that we have to make. Number one, are we investing in research and development in order to emphasize technology? And a lot of that has to come from government. That’s how the Internet got formed, that’s how the GPS got formed. Companies on their own can’t always finance the basic research because they can’t be sure that they’re always going to get a return on it. Number two, we’ve gotta drastically improve how we train our workforce and our kids around math and science and technology. Number three, we’ve gotta have a top notch infrastructure to support advanced manufacturing, and we’ve gotta look at sectors where we know this is going to be the future. Areas like clean energy for example. For us not to be the leaders in investing in clean energy manufacturing makes so that wind turbines and solar panels are not only designed here in the United States, but also made here in the United States makes absolutely no sense. We’ve got to invest ing those areas for us to be successful. So you can combine high tech with manufacturing and then you get the best of all worlds.

Twitter Question: Higher ed is necessary for a stronger economy, but for some middle class Americans it’s becoming more expensive. What can be done?

President Obama: As part of a higher education package that we passed last year, what we were able to do was take away subsidies that were going to banks for serving as middle-men in the student loan program and funnel that to help young people through Pell grants and lower rates on student loans, and so there are millions of students who are getting more affordable student loans and grants as a consequence of the steps we’re taking. This is tens of billions of dollars’ worth of additional federal dollars that were going to banks that are now going to students directly. In addition, what we’ve said is that starting in 2013, young people who are going to college will not have to pay more than 10 percent of their income in repayment. Look, I’m a guy who had about $60,000 of debt when I graduated from law school and Michelle had $60,000 so we were paying a bigger amount every month than our mortgage. And we were doing that for eight to ten years, so I know how burdensome this can be. I do think the universities still have a role in trying to keep their costs down. And I think that it’s important even if we have better student loan programs and more grants, If the costs keep on going up then we’ll never have enough money and never have enough help to avoid taking on these huge debts. Working with these university presidents to see where can you cut costs? Of course it may mean the food in the cafeteria is a little worse, or the gym isn’t as fancy. But I think all of us have to figure out a way to make sure higher education is accessible for everybody.
One last point…I know Twitter I’m supposed to be short…but community colleges is a huge underutilized resource. Where what we want to do is set up a life-long learning system where you may have gotten your four year degree but five years out you decide you want to go into a different field or might want to brush up on new technologies that are gonna help you advance, we need to create a system where you can conveniently access community colleges that are working with businesses to train for the jobs that actually exist. That’s a huge area where we can make a lot of progress.

Twitter Question: Mr. President, will you issue an executive order to raise the debt ceiling pursuant to section IV of the 14th Amendment?


President Obama: Let me, as quickly as I can, describe what’s at stake with the debt ceiling. Historically, whenever the U.S. has a deficit it finances that deficit through the sale of treasuries. And this is a very common practice over our lifetimes, typically the government is always running a modest deficit. And Congress is supposed to vote on the amount of debt that treasury can essentially issue. It’s a pretty esoteric piece of business. Typically has not been something that has created a lot of controversy. What’ s happening now is that Congress is suggesting we may not vote to raise the debt ceiling. If we do not then the treasure will run out of money. It will not be able to pay the bills that are owing and potentially the entire world capital markets could decide, you know what, the full faith and credit of the United States does not mean anything. Our credit rate could be downgraded, interest rates could go drastically up, and it could cause a whole new spiral into a second recession or worse. So, this is something we shouldn’t be toying with.

What Dexter’s question referred to is there are some ppl that say under the Constitution it’s unconstitutional for Congress not to allow the treasury to pay its bills and are suggesting this should be challenged under the Constitution. I don’t think we should even get to the constitutional issue. Congress has a responsibility to make sure we pay our bills. We’ve always paid them in the past. The notion the U.S. is going to default in its debt is just irresponsible. My expectation is that in the next week to two weeks, Congress, working with the White House, comes up with a deal that solves our deficit and debt problems and makes sure that our full faith and credit is protected.

Twitter Question: Immigrant entrepreneurs can build companies and create jobs for U.S. workers. Will you support a start-up visa program?


President Obama: What I want to do is to make sure that talented people who come to this country to study, to get degrees and are willing and interested in starting up businesses, can do so as opposed to going back home and starting those businesses over there to compete with the U.S. and take away U.S. jobs. So, we’re working with the business community as well as the entrepreneurial community to figure out are there ways that we can streamline the visa system so if you are studying here, you’ve got a Ph.D. in computer science or a Ph.D. in engineering, and you say, I’m ready to invest in the United States and create jobs in the United States, then we are able to say to you, “we want you to stay here.” And I think it’s possible for us to deal with this problem, but it’s important for us to look at it more broadly.

We’ve got an immigration system that is broken right now where too many folks are breaking the law, but also our laws make it too hard for talented people to contribute and be part of our society. And we’ve always been a nation of laws and a nation of immigrants, so we need comprehensive immigration reform part of which would allow entrepreneurs and high skilled individuals to stay here. Because we want to be attracting that talent here. We don’t want to pay for training them here and have it benefit other countries.

Twitter Question: Will you focus on promoting alternative energy industries in oil states like Louisiana and Texas?


President Obama: I want to promote alternative energy everywhere including states like Louisiana and Texas. This is something that I’m very proud of and doesn’t get a lot of attention. We made the largest investment in clean energy in our history through the Recovery Act. We put forth a range of programs through credits and grants to start-up companies in areas like creating wind turbines, solar panels. A great example is advanced battery manufacturing. When I came into office, advanced batteries which are used, for example, in electric cars, we only accounted for 2 percent of the world market in advanced batteries. We have quintupled our market share or even gone further just over the last two years, and we’re projecting that we can get to 30 to 40 percent of that market. That’s creating jobs all across the Midwest and all across America. And whoever wins this race on advanced battery manufacturing is probably going to win the race to produce the cares of the 21st century. China is investing in it. Germany is investing in it. We need to be investing in it as well.

Twitter Question: Mr. President, in several states we have seen people lose their collective bargaining rights. Do you have a plan to rectify this?

President Obama: The first thing I want to emphasize is that collective bargaining is the reason why the vast majority of Americans enjoy a minimum wage, enjoy weekends, enjoy overtime. So many things that we take for granted are because workers came together to bargain with their employers. We live in a very competitive society in the 21st century. That means that in the private sector, labor has to take management into account. If labor is making demands that make management broke and they can’t compete, then that doesn’t do anybody any good.

In the public sector what is true is that some of the pension plans that have been in place and the health benefits that are in place are so out of proportion with what’s happening in the private sector that a lot of taxpayers start feeling resentful. They say well if I don’t have health care where I only have to pay $1 for prescription drugs, then why is it that the person’s salary I’m paying has a better deal?

What this means is that all of us are going to have to make some adjustments. But, the principle of collective bargaining--making sure that people can exercise their rights to join together with other workers and to negotiate to even the bargaining power on other side--that’s something that needs to be protected. And we can make those adjustments in ways that are equitable and preserve those bargaining rights. Typically the challenges against bargaining rights have been taking place at the state level. I don’t have direct control over that, but what I can do is to speak up forcefully for the principle that we can make these adjustments that are necessary during these difficult fiscal times, but do so in a way that preserves collective bargaining rights, and certainly at the federal level where I do have influence, I can make sure that we make these adjustments without affecting people’s collective bargaining rights.

I’ll give you just one example. We froze federal pay for federal workers for two years. Now that wasn’t real popular as you might imagine among federal workers. On the other hand, we were able to do that precisely because we wanted to prevent layoffs and we wanted to send some signals that everyone was going to need to make sacrifices including some federal workers. By the way, people who work in the White House have had their pay frozen since I came in. Our high-wage folks. They haven’t had a raise in two and a half years and that’s appropriate because a lot of ordinary folks out there haven’t either, in fact, they’ve seen their pay cut in some cases.

Twitter Question: How will admin work to help underwater homeowners who aren’t behind in payments but are trapped in homes they can’t sell?

President Obama: This is a great question. Remember I mentioned one of our biggest challenges in the course of the last two and a half years has been dealing with a huge burst of the housing bubble. What’s happened is a lot of folks are underwater, meaning their home values went down so steeply and so rapidly that now their mortgage, the amount they owe, is a lot more than the assessed worth of their home. And that obviously burdens a lot of folks. It means if they’re selling that they have to sell at a massive loss they can’t afford. It means they don’t feel that they have any assets because the single biggest asset of most Americas is their home. So we’ve been trying to work with the issuers of the mortgages—the banks or service companies—to convince them to work with homeowners who are paying, trying to do the right thing, trying to stay in their homes, to see if they can modify the loans so that payments are lower, in some cases maybe even modify their principle so they don’t feel burdened by these huge debts and feel tempted to walk away from homes they love and where they’re raising their families. We’ve made some progress through the programs we’ve set up. We’ve probably seen several million home modifications either directly because we had control of the loan process or because the private sector followed suit, but it’s not enough. So we’re going back to the drawing board, talking to banks, trying to put some pressure on them to work with people who have mortgages to see if we can make further adjustments and to see if there may be circumstances where reducing principle is appropriate.

Twitter Question: From Speaker Boehner—After embarking on a record spending binge that left us deeper in debt, where are the jobs?

President Obama: Obviously John’s the Speaker of the House, he’s a Republican, so this is a slightly skewed question. But what he’s right about is that we have not seen fast enough job growth relative to the need. We lost, as I said, 4 million jobs before I took office, before I was sworn in. About 4 million were lost in the few months after I took office before my economic policies had any chance to take effect. And in the past 15 months we’ve seen 2 million jobs created in the private sector, so we’re each month seeing growth in jobs. But, when you have an 8 million job hole, and you’re only filling it with 100,000 or 200,000 jobs each month, obviously that’s way too long for a lot of folks who are still out of work.

There are a couple of things that we can continue to do. I actually worked with Speaker Boehner to pass a payroll tax cut in December that put an extra $1,000 in the pockets of almost every single American. That means they’re spending money. That means that businesses have more customers. And that has helped improve overall growth. We have provided at least 16 tax cuts to small businesses, who have needed a lot of help and have been struggling, including, for example, saying zero capital gains taxes on startups. Because our attitude is we want to encourage new companies, young entrepreneurs, to get out there and start their business without feeling like if they’re successful in the first couple of years that somehow they have to pay taxes as opposed to putting that money back into their business. So we’ve been able to cooperate with Republicans on a range of these issues.
There are some areas where Republicans have been more resistant in cooperating, although I think most objective observers think it’s the right thing to do. I’ll give you a specific example.

It’s estimated that we have about $2 trillion worth of infrastructure that needs to be rebuilt--roads, bridges, sewer lines, water mains. Our air traffic control system doesn’t make sense. We don’t have the kind of electric grid that’s smart, meaning it doesn’t waste a lot of energy in transmission. Our broadband system is slower than a lot of countries. For us to move forward on a major infrastructure initiative where we’re putting ppl to work right now, including construction workers who were disproportionately unemployed when the housing bubble went bust, to put them to work rebuilding America at a time when interest rates are really low, that is something that could make a huge positive impact on the economy overall. And it’s an example of making an investment now that ends up having huge payoffs down the road. We haven’t gotten the kind of cooperation that I’d like to see on some of those ideas and initiatives, but I’m just gonna keep on trying and eventually, I’m sure the Speaker will see the light.

Twitter Question: What incentives are you willing to support to improve small business growth?

President Obama: I just mentioned some of the tax breaks that we’ve provided not only to small businesses, but also in some cases to big businesses. For example, if they’re making investments in plants and equipment this year, they can fully write down those costs, and essentially depreciate all those costs this year. And that saves them a pretty big tax bill. So we’re already initiating a bunch of steps.

The biggest challenge that I hear from small businesses right now actually has to do with financing. A lot of small businesses got their financing from community banks. Typically they’re not getting them from the big Wall Street banks, but they’re getting them from the various regional banks in their communities. A lot of those banks were pretty overextended in the commercial real estate market, which has been hammered. A lot of them are still digging themselves out of bad loans that they’ve made that were shown to be bad during the recession. So what we’ve tried to do is get the Small Business Administration, the federal agency that helps small businesses, to step in and provide more financing by waving fees and seeing if we can lower interest rates in some cases and making sure that the threshold for companies that qualify for loans are more generous. And that’s helped small businesses all across the country. This is another example where working with Congress, my hope is that we can continue to provide these tax incentives and maybe even be able to do a bit more.

Twitter Question: Can you give companies a tax break if they hire an honorable discharge veteran?


President Obama: This is something that I’ve been talking about a lot internally. We’ve got all these young people coming back from Iraq and Afghanistan who’ve made incredible sacrifices and have taken on incredible responsibilities. You see some 23 year old who’s leading a platoon in hugely dangerous circumstances, making decisions, operating complex technologies. These are folks who can perform. But, unfortunately, what we’re seeing is that a lot of these young veterans have a higher unemployment rate than people who didn’t serve. So what we want to do is potentially combine a tax credit for a company that hires veterans with a campaign for private companies to step up and do the right thing and hire more veterans.

One of the things that we’ve done is, internally in the federal government, we have made a huge emphasis on ramping up our outreach to veterans and hiring of veterans. And this has been a top priority of mine. The notion that these folks who are sacrificing for our freedom and our security end up coming home and not being able to find a job, I think, is unacceptable.

Twitter Question: Was it a mistake to fail to get Republicans to commit to raise the debt ceiling at same time tax cuts were extended?

President Obama:
I have to tell you the assumption of the question is that I was going to be able to get them to commit to raising the debt ceiling. In December, we were in what is called the lame duck session. Republicans knew they were coming in as the majority and we only had a few short weeks to deal with a lot of complicated issues including repealing DADT, dealing with a treaty to reduce nuclear weapons, and come to terms with a budget. And what we were able to do was negotiate a package where we agreed to do something that we didn’t like but that Republicans badly wanted, which is to extend the Bush tax cut on the wealthy for another two years. And in exchange we were able to get up this payroll tax cut that put $1,000 in the pockets of every American which would help economic growth and jobs. We were also able to get unemployment insurance extended for the millions of Americans who were still out of work and whose benefits were about to run out. And that was a much better deal that I think a lot of ppl expected.

It’d be great if we could also settle the debt ceiling at this time, but here’s the more basic point. Never in our history has the U.S. defaulted on its debt. The debt ceiling should not be something that is used as a gun against the heads of the American people to extract tax breaks for corporate jet owners, or oil and gas companies that are making billions of dollars because the price of gasoline has gone up so high. I mean I’m happy to have those debates. I think the American people are on my side on this. But what we need to do is to have a balanced approach where everything is on the table.

We need to reduce corporate loopholes. We need to reduce discretionary spending on programs that aren’t working. We need to reduce defense spending. We need to look at entitlements. And we have to say how do we protect and preserve Medicare and social security not just for this generation, but for future generations. And that’s going to require some modifications even as we maintain this basic structure. What I’m hoping to see over the next couple of weeks is people put their dogmas aside, their sacred cows aside, and say here’s a sensible approach that reduces our deficit, makes sure the government is spending within its means, but also continues to make investment in education, clean energy and basic research that will preserve our competitive advantage going forward.

Twitter Question: What changes to tax system do you think are necessary to help solve deficit problem and for the system to be fair?

President Obama: Firsts of all, I think it’s important for people to realize that since I’ve been in office, I’ve cut taxes for middle class families repeatedly. The Recovery Act cut taxes for 95 percent of working families. The payroll tax cut that we passed in December put $1,000 in the pockets of ever famine in America. So we actually now have the lowest tax rates since the 1950s. Our tax rates are lower now than they were under Ronald Reagan. They’re lower than they were under George Bush Sr. and Jr., and they’re lower than they were under Bill Clinton.

The question is, how we pay for the things that we all think are important and how do we make sure that the tax system is equitable. What I’ve said is that in addition to eliminating a whole bunch of corporate loopholes that are just not fair—the notion that corporate jets should get a better deal than commercial jets, or the notion that oil and gas companies that make tens of billions of dollars per quarter need an additional break to give them incentive to go drill for oil—that doesn’t make sense. But what I’ve also said is, people like me who have been incredibly fortunate, mainly because a lot of folks bought my book, for me to be able to go back to the tax rates that existed under Bill Clinton to pay a couple of extra percentage points so that I can make sure that seniors still have Medicare or kids still have Head Start, that makes sense to me.

I think that for us to say that millionaires and billionaires can go back to the tax rate that existed when Bill Clinton was president, that doesn’t affect middle class families who are having a tough time and haven’t seen incomes go up. It does mean that those who are in the top one or two percent who have seen their incomes go up much more quickly than anybody else pays a little bit more to make sure that we can make the basic investments that grow this country. That’s not unreasonable, and the vast majority of Americans agree with me on that.

That doesn’t mean that we can just continue spending anything we want. We’re still going to have to make some tough decisions on defense spending, or even some programs that I like but that we may not need. But we can’t just close the deficit and debt by cutting things like Head Stare or Medicare. That can’t be an equitable solution to solving the problem. And then we say that millionaires and billionaires don’t have to do anything. Well I don’t want to $200 tax break if it means some senior is going to have to pay $6000 more for Medicare that they don’t have. Or a bunch of kids are going to be kicked off of Head Start and aren’t going to get the basics that they need in order to succeed in our society. I don’t think that’s good for me. I don’t think that’s good for the country.

Twitter Question: Is free market an option? (Obama on homeowners underwater)

President Obama:
Keep in mind that most of this is gonna be a function of the market slowly improving because people start having more confidence in the economy, more people decide the housing market has bottomed out, now is the time to buy, and they start buying. That starts slowly lifting up prices. You get a virtuous cycle going on. So a lot of this is going to be determined by how well the overall economy does. Do people who feel more confident about jobs? Do they feel more confident that they’re going to be able to make their mortgage?

Given the size of the housing market, no federal program is going to be able to solve the housing problem; most of this is going to be free market. The one thing we can do is make sure that for homeowners who have been responsible, didn’t buy more how then they can afford, had some tough luck because they happened to buy at the top of the market, can afford to continue to pay for that house, can afford their current mortgage, but need some relief given the drop in value, that we try to match them up with bankers so that each side ends up winning. So the banker says I’m gonna be better off than if this house is foreclosed upon. And the mortgage owner is able to stay in their home but still be able to pay what’s owed.

And I think that kind of adjustment and negation process is tough, partly because banks don’t hold mortgages; they were all sold to Wall Street and were sliced and diced in these complex financial transactions, so sorting through who owns what can be very complicated. And as you know, some of the banks didn’t do a very good job in filing the papers on some of these foreclosure actions, so there’s been litigation behind that. But the bottom line is we should be able to make some progress on helping some people, understanding that some people just bought more home than they can afford, and probably are just going to be better off renting.

Twitter Question: Public education in California is falling apart. Is privatization looming?

President Obama: Look, when America was making a transition from an agricultural society to an industrial society, we as a country made a decision that we were going to have public high schools that would upgrade the skills of young people as they were leaving the farms and start participating in a more complex industrial economy. When my grandfather’s generation came back from WWII, we made a decision that we were going to have a GI bill that would send these young people to college because we figured that would help advance our economy.

Every time we’ve make a public investment in education, it has paid off many times over. For us now to give short shrift to education when the world is more complex than ever and it’s a knowledge-based society and companies locate based on whether they’ve got skilled work forces or not, that makes no sense. And so we’ve gotta get our priorities straight here. It is important for us to have a healthy business climate, to try to keep taxes low, to make sure that we’re not spending on things that don’t work. It’s important that we get a good bank for the buck in education. My administration has pushed more reform more vigorously with programs like Race to the Top than most previous administrations have been able to accomplish. So we don’t just need more money; we need more reform.

But we do have to pay for good teachers. Young people won’t go into teaching if they’re getting paid a poverty wage. We do have to make sure that buildings aren’t crumbling. It’s pretty hard for kids to concentrate if there are leaks, and it’s cold and there are rats running around in their schools. And that’s true of a lot of school across the country. We have to make sure that there are computers in a computer age, and that they work, and that there are internet connections that actually function. I think that those states that are gonna do well and those countries that do well are the ones that are going to continue to be committed to making education a priority.

Twitter Question: We definitely need to get more vets into jobs, but when are we going to support our troops by cutting oil dependence?

President Obama: Reducing our dependence on oil is good for our economy. It’s good for our security. And it’s good for our planet. So, It’s a “3-for.” We have not had a serious energy policy for decades. Every president talks about it, but we don’t get it done. I’d like to see robust legislation in Congress that actually took some steps to reduce oil dependency. We’re not going to be able to replace oil overnight, even if we’re going full throttle on clean energy solutions like solar, wind, and biodiesel; we’re going to need oil for some time. But, if we had a goal where we’re just reducing our oil dependency each year in a set of staggered steps, it would save consumers in the pocketbook, it would make our businesses more efficient and less subject to whims of spot oil market, it would make us less vulnerable to the kinds of disruptions that have occurred in the Middle East this spring, and it would drastically cut down on our carbon resources.
Unfortunately, we have not seen a sense of urgency coming out of Congress over the last several months on this issue. Most of the rhetoric has been about let’s produce more. Well, we can produce more and I’m committed to that, but the fact is that we only have 2 to 3 percent of the world’s oil reserves and we use 25 percent of the world’s oil. We can’t drill our way out of this problem. What we can do, that we’ve already done administratively, is increase fuel efficiency standards on cars. That will save us millions of barrels of oil just by using existing technology and saying to car companies, ”You can do better than 10 mils a gallon or 15 miles a gallon.” And you’re starting to see Detroit respond.

U.S. companies have figured out that if we can produce high quality electric and high quality, high gas mileage vehicles, those will sell. And we’re actually starting to see market share increase for American cars in sub-compact and compact cars for the first time in many years. And that’s partly because we’ve increased fuel efficiency standards through an administrative agreement. It’s also because, as part of the deal to bailout the auto companies we said to them, “start focusing on cars of the future instead of looking at big gas-guzzlers of the past.”

Twitter Question: Will you raise taxes on middle class at least to the George W. Bush levels?


President Obama: No, what we’ve said is let’s make permanent the Bush tax cuts for low and moderate income folks, the 99 percent of people who have not seen their wage or incomes go up in the past decade. They don’t have a lot of room, already struggling to meet rising cost of health care, education, gas prices and food prices. If all we do is just go back to the pre-Bush tax cut rates for the top income brackets—for millionaires and billionaires—that would raise hundreds of billions of dollars. And if you combine it with the cuts we’ve already proposed, you can solve our deficit and debt problems.

This is not something that requires radical solutions; it requires some smart, common sensed balanced approaches. I think that’s’ what the American people are looking for, and that’s’ what I’ve proposed, and that’s what I’m going to keep on trying to bring the parties together to agree to—a balanced approach that has more cuts than revenue, but has some revenue. And that revenue should come from the people who can most afford it.

Twitter Question: Now that the space shuttle is gone? Where does America stand in space exploration?

President Obama: We are still a leader in space exploration, but frankly I have been pushing NASA to revamp its vision. The shuttle did some extraordinary work in low-orbit experiments, the international space station, moving cargo, etc. It was an extraordinary accomplishment. And we’re very proud of the work that it did. Now what we need is that next technological breakthrough. We’re still using the same model for space exploration that we used with the Apollo program 30 or 40 years ago.

So what we’ve said is rather than doing the same thing, let’s invest in basic research around new technologies that can get us places faster, allow human space flight to last longer. What you’re seeing now is NASA redefining its mission. We’ve set a goal—let’s ultimately get to Mars. A good pit stop is an asteroid. Now we haven’t identified the actual asteroid yet, in case people are wondering. But the point is let’s start stretching the boundaries so we’re not doing the same thing over and over again. But rather let’s start thinking about what’s the next frontier out there. But in order to do that we’re actually gonna need some technological breakthroughs that we don’t have yet. But what we can do is for some of this low-orbit stuff, some of this more “routine” space travel—obviously no space travel is routine, but it could become more routing over time—but let’s allow the private sector to get in so they can, for example, send those low-orbit earth vehicles into space. And we may achieve a point in time where those of you who are just dying to go into space can buy a ticket and a private carrier can take you up there while the government focuses on the big breakthroughs that require much larger investments and involve much greater risk.

President Obama on public responses to his own Twitter question:

Defense contracting is something we’re already making progress on. I think with respect to the war on drugs, what we’ve always said is investing in prevention, reducing demand, is gonna be the most cost effective thing that we can do. We still have to interdict the big drug kingpins and enforce our drug laws. But making sure that we’re spending more on prevention and treatment can make a huge difference.

With respect to some of these big agribusiness and big oil subsidies, those are examples of the kinds of loopholes we can close. And public campaign financing is something that I’ve supported in the past. There is no doubt that money has an impact on what is happening here in Washington. The more we can reduce money’s impact on Washington, the better off we’ll be.

One thing I would say is on the notion of giving money to countries that waste it, and Pakistan is listed there. I think it’s important to know that foreign aid accounts for less than 2 percent of our budget. And if you define it narrowly as what we think of classically as foreign aid, it’s probably closer to one percent. So, sometimes people have an exaggerated sense that we spend 25 percent of the federal budget on foreign aid. It’s a tiny amount that has a big impact. For America to be a leader in the world, to have influence, to help stabilize countries and create opportunity for people so they don’t breed terrorists or create huge refugee flows and so forth, it’s smart for us to make a very modest investment in foreign aid. It’s a force multiplier, and it’s something that even in tough fiscal times, America needs to continue to do as part of our role as a global leader.

As I said before, if wealthy individs are willing to simply go back to the rates that existed back in the 1990s when rich people were doing very well—and by the way that’s when we saw the highest job growth rates, and that’s when we saw the greatest reduction in poverty, and that’s when we saw businesses very profitable. If the wealthiest among us, and I include myself in this category, are willing to give up a little bit more, then we can solve this problem. It does not take a lot.

And I just have to say, when people say “job killing tax increases” that’s what Obama is proposing—you’r entitled to your own opinions, but not your own facts. And the facts are that a modest increase for wealthy individuals is not shown to have an adverse impact on job growth.

We can test the two theories. You have what happened in the 1990s. Taxes on the wealthy were somewhat higher, businesses boomed, the economy boomed. Then we have the 2000s where taxes were cut on wealthy individuals, and jobs didn’t grow as fast, businesses didn’t grow as fast. It’s not like we haven’t tried what these other folks are pitching. It didn’t work. And we should go with what works.

The one thing I’ll say about military spending is we’ve ended the war in Iraq, our combat mission there, and all our troops are slated to be out by the end of this year. We’ve already removed 100,000. I announced that we were gonna begin drawing down troops in Afghanistan and pivot to a transition process where Afghans are taking more responsibility for their defense. But, we have to do all of this in a fairly gradual way.

We can’t simply lop off 25 percent off the defense budget overnight. We have to think about all the obligations we have to our current troops who are in the field, and making sure they are properly equipped and safe. We have to make sure we are meeting those commitments to the veterans who are coming home. In some cases we have outdated equipment that needs to be replaced. I’m committed to reducing the defense budget, but as Commander in Chief one of the things we have to do is make sur that we do it in a thoughtful way that’s guided by our security and our strategic needs.

One of the nice things about our defense budget is that it’s so big and so huge that a 1 percent reduction is the equivalent of the education budget…I’m exaggerating…But it’s so big that you can make relatively modest changes to defense that end up giving you a lot of head room fund things like basic research or student loans or things like that.
I’m a big supporter of biofuels. But one of the things that’s become clear is that we need to accelerate our basic research in ethanol and other biofuels that are made from things like wood chips and algae, as opposed to just focusing on corn, which is probably the least efficient energy producer of these various other approaches. So, I think that it’s important for even those folks in farm states to examine are we win fact going for the cutting edge biodiesel and ethanol approaches that allow, for example, Brazil to run a third of its transportation system on biofuels. Now they get it from sugar cane, and it’s a more efficient conversion process than corn-based ethanol. Us doing more basic research and finding better ways to do the same concept, I think, is the right way to go.

(On cutting welfare programs)
I think we should acknowledge that some welfare programs in the past were not well designed and in some cases did encourage dependency. As somebody who worked din low income neighborhoods, I’ve seen it where people weren’t encouraged to work, weren’t encouraged to upgrade their skills. They were just getting a check and over time their motivation started to diminish.

I will say that today welfare payments are not the big driver of our deficit or our debt. There are work obligations attached to welfare that he vast majority of folks who are getting welfare, want to work but can’t find jobs. And what we should be doing in all our social programs is upgrading people’s skills, giving them the tools they need to get into the workforce, nudging them into the workforce, but letting them know that we are there to encourage you and support you as long as you’re showing the kind of responsibility for being willing to work that every American should be expected to show.

And I’m somebody who believes that we can constantly improve any program, whether it’s a defense program; those who say that we can’t cut military at all haven’t spent a lot of time looking at the military budgets. Those who say we can’t make any changes to our social welfare programs or else you’re being mean to poor people, that’s not true. There are some programs that can always be improved. And there are some programs that if they don’t work, we should have the courage to eliminate them and put them in the programs that do work.

But the bottom line is, our core values of responsibility, opportunity, making sure the American dream is alive and well so that anybody who is willing to put in the time and effort and energy are able to get a good education in this society, find a job that pays a living wage, that they’re able to send their kids to college without going broke; that that opportunity is open to anybody regardless of race or religion or sexual orientation, that that basic principle—that’s what holds us together. That’s what makes us Americans.

We’re not all tied together by ethnicity or a single religion. What ties us together is this idea that everybody has got a shot. As long as you carry out your responsibilities, you can make it. You can get into the middle class and beyond, and you can start a company and suddenly help bring the whole world together. That’s what makes this country outstanding. But in order to do that, it requires us both to have a commitment to individualism, our freedom, and creativity, and our idiosyncrasies. But it also requires us to have a commitment to each other and recognize that I would not be President if somebody hadn’t helped provided some scholarships to my school. And you would not have Twitter if the Department of Defense at some point and a bunch of universities hadn’t made a bunch of investments in something that ended up being the internet.

So you and I are sitting here because somebody somewhere made an investment in our futures. We have the same obligation to the folks that are coming up behind us. We have to make sure that we are looking out for them just like the previous generation looked out for us. And that’s what I think will help us get through what are some difficult times and make sure that America’s future is even brighter than the past.



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