From White House Official:
“The President and Vice President visited the Norwegian ambassador’s residence in Washington to offer their condolences to the people of Norway after the tragic killings that occurred last week.
The President and Vice President will sign a condolence book before returning to the White House. The First Lady and Dr. Biden asked the President and Vice President to deliver their own hand-written condolence letters.”
Remarks of President Barack Obama – As Prepared for Delivery
Primetime Debt Speech
Monday, July 25, 2011 Washington, DC
As Prepared for Delivery –
Tonight, I want to talk about the debate we’ve been having in Washington over the national debt – a debate that directly affects the lives of all Americans. For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card. As a result, the deficit was on track to top $1 trillion the year I took office.
To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more – on tax cuts for middle-class families; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. These emergency steps also added to the deficit. Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy. More of our tax dollars will go toward paying off the interest on our loans.
Businesses will be less likely to open up shop and hire workers in a country that can’t balance its books. Interest rates could climb for everyone who borrows money – the homeowner with a mortgage, the student with a college loan, the corner store that wants to expand. And we won’t have enough money to make job-creating investments in things like education and infrastructure, or pay for vital programs like Medicare and Medicaid. Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it. And over the last several months, that’s what we’ve been trying to do.
I won’t bore you with the details of every plan or proposal, but basically, the debate has centered around two different approaches. The first approach says, let’s live within our means by making serious, historic cuts in government spending. Let’s cut domestic spending to the lowest level it’s been since Dwight Eisenhower was President. Let’s cut defense spending at the Pentagon by hundreds of billions of dollars. Let’s cut out the waste and fraud in health care programs like Medicare – and at the same time, let’s make modest adjustments so that Medicare is still there for future generations.
Finally, let’s ask the wealthiest Americans and biggest corporations to give up some of their tax breaks and special deductions. This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. And the cuts wouldn’t happen so abruptly that they’d be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right now.
This approach is also bipartisan. While many in my own party aren’t happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. While Republicans might like to see deeper cuts and no revenue at all, there are many in the Senate who have said “Yes, I’m willing to put politics aside and consider this approach because I care about solving the problem.” And to his credit, this is the kind of approach the Republican Speaker of the House, John Boehner, was working on with me over the last several weeks. The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach – an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all. And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about – cuts that place a greater burden on working families.
So the debate right now isn’t about whether we need to make tough choices. Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done. Most Americans, regardless of political party, don’t understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don’t get.
How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don’t need and didn’t ask for?
That’s not right. It’s not fair. We all want a government that lives within its means, but there are still things we need to pay for as a country – things like new roads and bridges; weather satellites and food inspection; services to veterans and medical research. Keep in mind that under a balanced approach, the 98% of Americans who make under $250,000 would see no tax increases at all. None.
In fact, I want to extend the payroll tax cut for working families. What we’re talking about under a balanced approach is asking Americans whose incomes have gone up the most over the last decade – millionaires and billionaires – to share in the sacrifice everyone else has to make. And I think these patriotic Americans are willing to pitch in. In fact, over the last few decades, they’ve pitched in every time we passed a bipartisan deal to reduce the deficit. The first time a deal passed, a predecessor of mine made the case for a balanced approach by saying this: “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer.” Those words were spoken by Ronald Reagan.
But today, many Republicans in the House refuse to consider this kind of balanced approach – an approach that was pursued not only by President Reagan, but by the first President Bush, President Clinton, myself, and many Democrats and Republicans in the United States Senate. So we are left with a stalemate. Now, what makes today’s stalemate so dangerous is that it has been tied to something known as the debt ceiling – a term that most people outside of Washington have probably never heard of before. Understand – raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won’t be able to pay all of our bills. Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.
If that happens, and we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses. For the first time in history, our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people.
We would risk sparking a deep economic crisis – one caused almost entirely by Washington. Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now.
In other words, it doesn’t solve the problem. First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there’s no point in putting the economy at risk by kicking the can further down the road.
But there’s an even greater danger to this approach. Based on what we’ve seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way. That is no way to run the greatest country on Earth. It is a dangerous game we’ve never played before, and we can’t afford to play it now. Not when the jobs and livelihoods of so many families are at stake.
We can’t allow the American people to become collateral damage to Washington’s political warfare. Congress now has one week left to act, and there are still paths forward. The Senate has introduced a plan to avoid default, which makes a down payment on deficit reduction and ensures that we don’t have to go through this again in six months. I think that’s a much better path, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform. Either way, I have told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of Congress – a compromise I can sign. And I am confident we can reach this compromise.
Despite our disagreements, Republican leaders and I have found common ground before. And I believe that enough members of both parties will ultimately put politics aside and help us make progress. I realize that a lot of the new members of Congress and I don’t see eye-to-eye on many issues. But we were each elected by some of the same Americans for some of the same reasons. Yes, many want government to start living within its means. And many are fed up with a system in which the deck seems stacked against middle-class Americans in favor of the wealthiest few.
But do you know what people are fed up with most of all? They’re fed up with a town where compromise has become a dirty word. They work all day long, many of them scraping by, just to put food on the table. And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can’t seem to come together and do what it takes to make life just a little bit better for ordinary Americans. They are offended by that. And they should be. The American people may have voted for divided government, but they didn’t vote for a dysfunctional government.
So I’m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your Member of Congress know. If you believe we can solve this problem through compromise, send that message. America, after all, has always been a grand experiment in compromise. As a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding: that out of many, we are one.
We have engaged in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that Jefferson once wrote: “Every man cannot have his way in all things…Without this mutual disposition, we are disjointed individuals, but not a society.”
History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good.
We remember the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union. That’s who we remember. That’s who we need to be right now. The entire world is watching. So let’s seize this moment to show why the United States of America is still the greatest nation on Earth – not just because we can still keep our word and meet our obligations, but because we can still come together as one nation.
Thank you, God bless you, and may God bless the United States of America.
BREAKING NEWS FROM THE WHITE HOUSE: President Obama to GOP: “Congress Should Refrain From Playing Reckless Political Games With Our Economy!”
Statement from the Press Secretary
The President and Vice President met with Speaker Boehner, Leader Pelosi, Leader Reid and Leader McConnell in the Cabinet Room to discuss options for ensuring that the debt ceiling is raised and the United States does not default on its obligations for the first time in its history.
The President restated his opposition to a short-term extension of the debt ceiling, explaining that a short-term extension could cause our country’s credit rating to be downgraded, causing harm to our economy and causing every American to pay higher credit cards rates and more for home and car loans.
As the current situation makes clear, it would be irresponsible to put our country and economy at risk again in just a few short months with another battle over raising the debt ceiling.
Congress should refrain from playing reckless political games with our economy. Instead, it should be responsible and do its job, avoiding default and cutting the deficit.
The meeting lasted approximately one hour. The leaders agreed to return to Capitol Hill to talk to their members and discuss a way forward, and conversations will continue throughout the day.
Readout of the President’s Meeting with Marc Morial, President of the National Urban League, and Ben Jealous, President of the NAACP
Readout of the President’s Meeting with Marc Morial, President of the National Urban League, and Ben Jealous, President of the NAACP
This afternoon, President Obama met with civil rights leaders Marc Morial, president of the National Urban League, and Ben Jealous, president of the NAACP, in the Oval Office. During their meeting, the President discussed the continued efforts his administration is making to spur job creation and economic growth, and reiterated the urgency of moving forward on a balanced approach to deficit reduction to avoid defaulting on our obligations.
The President stressed that such an agreement must involve shared sacrifice and reaffirmed that we cannot afford to balance the budget on the back of the most vulnerable Americans including the middle class, low-income families, seniors, and students.
The President also reiterated that reducing unemployment, which disproportionately burdens the African-American community at 16.2%, remains a top priority for him and his Administration.
The President also spoke with the two civil rights leaders about dramatic efforts his Administration has already made to address urban economic development through initiatives such as Strong Cities, Strong Communities, a program that acts to spur economic growth in urban centers while ensuring taxpayer dollars are used wisely and efficiently; the Treasury Department’s Community Development Financial Institutions fund; and the Minority Business Development Agency at the Department of Commerce.
The President has worked tirelessly since entering office to bring economic relief and equal opportunity to all Americans, and he looks forward to a continued partnership with civil rights organizations like the National Urban League and the NAACP.
The President also congratulated the leaders on their upcoming conventions.
REMARKS BY THE PRESIDENT
James S. Brady Press Briefing Room 6:06 P.M. EDT
THE PRESIDENT: Good evening, everybody. I wanted to give you an update on the current situation around the debt ceiling. I just got a call about a half hour ago from Speaker Boehner who indicated that he was going to be walking away from the negotiations that we’ve been engaged in here at the White House for a big deficit reduction and debt reduction package. And I thought it would be useful for me to just give you some insight into where we were and why I think that we should have moved forward with a big deal. Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense.
We then offered an additional $650 billion in cuts to entitlement programs — Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation, and did not affect current beneficiaries in an adverse way.
In addition, what we sought was revenues that were actually less than what the Gang of Six signed off on. So you had a bipartisan group of senators, including Republicans who are in leadership in the Senate, calling for what effectively was about $2 trillion above the Republican baseline that they’ve been working off of. What we said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process that could have lowered rates generally while broadening the base.
So let me reiterate what we were offering. We were offering a deal that called for as much discretionary savings as the Gang of Six. We were calling for taxes that were less than what the Gang of Six had proposed. And we were calling for modifications to entitlement programs, would have saved just as much over the 10-year window.
In other words, this was an extraordinarily fair deal. If it was unbalanced, it was unbalanced in the direction of not enough revenue. But in the interest of being serious about deficit reduction, I was willing to take a lot of heat from my party — and I spoke to Democratic leaders yesterday, and although they didn’t sign off on a plan, they were willing to engage in serious negotiations, despite a lot of heat from a lot of interest groups around the country, in order to make sure that we actually dealt with this problem.
It is hard to understand why Speaker Boehner would walk away from this kind of deal. And, frankly, if you look at commentary out there, there are a lot of Republicans that are puzzled as to why it couldn’t get done. In fact, there are a lot of Republican voters out there who are puzzled as to why it couldn’t get done. Because the fact of the matter is the vast majority of the American people believe we should have a balanced approach.
Now, if you do not have any revenues, as the most recent Republican plan that’s been put forward both in the House and the Senate proposed, if you have no revenues at all, what that means is more of a burden on seniors, more drastic cuts to education, more drastic cuts to research, a bigger burden on services that are going to middle-class families all across the country. And it essentially asks nothing of corporate jet owners, it asks nothing of oil and gas companies, it asks nothing from folks like me who’ve done extremely well and can afford to do a little bit more.
In other words, if you don’t have revenues, the entire thing ends up being tilted on the backs of the poor and middle-class families. And the majority of Americans don’t agree on that approach. So here’s what we’re going to do. We have now run out of time. I told Speaker Boehner, I’ve told Democratic Leader Nancy Pelosi, I’ve told Harry Reid, and I’ve told Mitch McConnell I want them here at 11:00 a.m. tomorrow. We have run out of time. And they are going to have to explain to me how it is that we are going to avoid default. And they can come up with any plans that they want and bring them up here and we will work on them.
The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013. And the reason for it is we’ve now seen how difficult it is to get any kind of deal done. The economy is already weakened. And the notion that five or six or eight months from now we’ll be in a better position to try to solve this problem makes no sense. In addition, if we can’t come up with a serious plan for actual deficit and debt reduction, and all we’re doing is extending the debt ceiling for another six, seven, eight months, then the probabilities of downgrading U.S. credit are increased, and that will be an additional cloud over the economy and make it more difficult for us and more difficult for businesses to create jobs that the American people so desperately need.
So they will come down here at 11:00 a.m. tomorrow. I expect them to have an answer in terms of how they intend to get this thing done over the course of the next week. The American people expect action. I continue to believe that a package that is balanced and actually has serious debt and deficit reduction is the right way to go. And the American people I think are fed up with political posturing and an inability for politicians to take responsible action as opposed to dodge their responsibilities.
With that, I’m going to take some questions. Ben.
Q Thank you, Mr. President. You said you want the leaders back here at 11:00 a.m. to give you an answer about the path forward. What is your answer about the path forward? What path do you prefer, given what’s just happened? And also, sir, quickly, what does this say about your relationship with Speaker Boehner?
THE PRESIDENT: Well, with respect to my relationship with Speaker Boehner, we’ve always had a cordial relationship. We had very intense negotiations — I’m going to have my team brief you exactly on how these negotiations proceeded. Up until sometime early today when I couldn’t get a phone call returned, my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing but the right thing. I think it has proven difficult for Speaker Boehner to do that. I’ve been left at the altar now a couple of times. And I think that one of the questions that the Republican Party is going to have to ask itself is can they say yes to anything? Can they say yes to anything? I mean, keep in mind it’s the Republican Party that has said that the single most important thing facing our country is deficits and debts. We’ve now put forward a package that would significantly cut deficits and debt. It would be the biggest debt reduction package that we’ve seen in a very long time. And it’s accomplished without raising individual tax rates. It’s accomplished in a way that’s compatible with the “no tax” pledge that a whole bunch of these folks signed on to — because we were mindful that they had boxed themselves in and we tried to find a way for them to generate revenues in a way that did not put them in a bad spot. And so the question is, what can you say yes to? Now, if their only answer is what they’ve presented, which is a package that would effectively require massive cuts to Social Security, to Medicare, to domestic spending, with no revenues whatsoever, not asking anything from the wealthiest in this country or corporations that have been making record profits — if that’s their only answer, then it’s going to be pretty difficult for us to figure out where to go. Because the fact of the matter is that’s what the American people are looking for, is some compromise, some willingness to put partisanship aside, some willingness to ignore talk radio or ignore activists in our respective bases, and do the right thing. And to their credit, Nancy Pelosi, Harry Reid, the Democratic leadership, they sure did not like the plan that we are proposing to Boehner, but they were at least willing to engage in a conversation because they understood how important it is for us to actually solve this problem. And so far I have not seen the capacity of the House Republicans in particular to make those tough decisions. And so then the question becomes, where’s the leadership? Or, alternatively, how serious are you actually about debt and deficit reduction? Or do you simply want it as a campaign ploy going into the next election? Now, in terms of where we go next, here’s the one thing that we’ve got to do. At minimum, we’ve got to increase the debt ceiling. At minimum. I think we need to do more than that. But as I’ve said before, Republican Leader McConnell in the Senate put forward a plan that said he’s going to go ahead and give me the responsibility to raise the debt ceiling. That way folks in Congress can vote against it, but at least it gets done. I’m willing to take the responsibility. That’s my job. So if they want to give me the responsibility to do it, I’m happy to do it. But what we’re not going to do is to continue to play games and string this along for another eight, nine months, and then have to go through this whole exercise all over again. That we’re not going to do. Jessica Yellin.
Q Standing here tonight, Mr. President, can you assure the American people that they will get their Social Security checks on August 3rd? And if not, who’s to blame?
THE PRESIDENT: Well, when it comes to all the checks, not just Social Security — veterans, people with disabilities — about 70 million checks are sent out each month — if we default then we’re going to have to make adjustments. And I’m already consulting with Secretary Geithner in terms of what the consequences would be. We should not even be in that kind of scenario. And if Congress — and in particular, the House Republicans — are not willing to make sure that we avoid default, then I think it’s fair to say that they would have to take responsibility for whatever problems arise in those payments. Because, let me repeat, I’m not interested in finger-pointing and I’m not interested in blame, but I just want the facts to speak for themselves. We have put forward a plan that is more generous to Republican concerns than a bipartisan plan that was supported by a number of Republican senators, including at least one that is in Republican leadership in the Senate. Now, I’ll leave it up to the American people to make a determination as to how fair that is. And if the leadership cannot come to an agreement in terms of how we move forward, then I think they will hold all of us accountable. But that shouldn’t even be an option. That should not be an option. I’m getting letters from people who write me and say, at the end of every month I have to skip meals. Senior citizens on Social Security who are just hanging on by a thread. Folks who have severe disabilities who are desperate every single month to try to figure out how they’re going to make ends meet. But it’s not just those folks. You’ve got business contractors who are providing services to the federal government, who have to wonder are they going to be able to get paid and what does that do in terms of their payrolls. You’ve got just a huge number of people who, in one way or another, interact with the federal government. And even if you don’t, even if you’re not a recipient of Social Security, even if you don’t get veterans’ benefits or disabilities, imagine what that does to the economy when suddenly 70 million checks are put at risk. I mean, if you’re a business out there, that is not going to be good for economic growth. And that’s the number one concern of the American people. So we’ve got to get it done. It is not an option not to do it.
Q And your degree of confidence?
THE PRESIDENT: I am confident simply because I cannot believe that Congress would end up being that irresponsible that they would not send a package that avoids a self-inflicted wound to the economy at a time when things are so difficult. Scott Horsley.
Q Mr. President, can you explain why you were offering a deal that was more generous than the Gang of Six, which you seemed to be embracing on Tuesday when you were here?
THE PRESIDENT: Because what had become apparent was that Speaker Boehner had some difficulty in his caucus. There are a group of his caucus that actually think default would be okay and have said that they would not vote for increasing the debt ceiling under any circumstances. And so I understand how they get themselves stirred up and the sharp ideological lines that they’ve drawn. And ultimately, my responsibility is to make sure that we avoid extraordinary difficulties to American people and American businesses. And so, unfortunately, when you’re in these negotiations you don’t get 100 percent of what you want. You may not even get 60 or 70 percent of what you want. But I was willing to try to persuade Democratic leadership as well as Democratic members of Congress that even a deal that is not as balanced as I think it should be is better than no deal at all. And I was willing to persuade Democrats that getting a handle on debt and deficit reduction is important to Democrats just as much as it’s important to Republicans — and, frankly, a lot of Democrats are persuaded by that. As I said in the last press conference, if you’re a progressive you should want to get our fiscal house in order, because once we do, it allows us to then have a serious conversation about the investments that we need to make — like infrastructure, like rebuilding our roads and our bridges and airports, like investing more in college education, like making sure that we’re focused on the kinds of research and technology that’s going to help us win the future. It’s a lot easier to do that when we’ve got our fiscal house in order. And that was an argument that I was willing to go out and make to a lot of skeptical Democrats, as you saw yesterday. But ultimately, that’s what we should expect from our leaders. If this was easy it would have already been done. And I think what a lot of the American people are so disappointed by is this sense that all the talk about responsibility, all the talk about the next generation, all the talk about making sacrifices, that when it comes to actually doing something difficult folks walk away. Last point I’ll make here. I mean, I’ve gone out of my way to say that both parties have to make compromises. I think this whole episode has indicated the degree to which at least a Democratic President has been willing to make some tough compromises. So when you guys go out there and write your stories, this is not a situation where somehow this was the usual food fight between Democrats and Republicans. A lot of Democrats stepped up in ways that were not advantageous politically. So we’ve shown ourselves willing to do the tough stuff on an issue that Republicans ran on. Norah.
Q Mr. President, there seems to be an extraordinary breakdown of trust involved here. And I wonder if you could address what we’re hearing from Republicans, which is that there was a framework and a deal that was agreed with your chief of staff, with the Treasury Secretary, about a certain number of revenues, that the Republicans had agreed to that. And then after you brought that to your party and the discussion of that, the goal line was moved. Is this an example of where the goal line has moved and that that’s what has led to this breakdown in trust?
THE PRESIDENT: Norah, what I’ll do is we’ll do a tick-tock, we’ll go through all the paper. We’ll walk you through this process. What this came down to was that there doesn’t seem to be a capacity for them to say yes. Now, what is absolutely true is we wanted more revenue than they had initially offered. But as you’ll see, the spending cuts that we were prepared to engage in were at least as significant as the spending cuts that you’ve seen in a whole range of bipartisan proposals, and we had basically agreed within $10 billion, $20 billion — we were within that range. So that wasn’t the reason this thing broke down. We were consistent in saying that it was going to be important for us to have at least enough revenue that we could protect current beneficiaries of Social Security, for example, or current beneficiaries of Medicare; that we weren’t slashing Medicaid so sharply that states suddenly were going to have to throw people off the health care rolls. And we were consistent in that. So I want to be clear. I’m not suggesting that we had an agreement that was signed, sealed and delivered. The parties were still apart as recently as yesterday. But when you look at the overall package, there’s no changing of the goalposts here. There has been a consistency on our part in saying we’re willing to make the tough cuts and we’re willing to take on the heat for those difficult cuts, but that there’s got to be some balance in the process. What I’ve said publicly is the same thing that I’ve said privately. And I’ve done that consistently throughout this process. Now, with respect to this breakdown in trust, I think that we have operated aboveboard consistently. There haven’t been any surprises. I think the challenge really has to do with the seeming inability, particularly in the House of Representatives, to arrive at any kind of position that compromises any of their ideological preferences. None. And you’ve heard it. I mean, I’m not making this up. I think a number of members of that caucus have been very clear about that.
Q But they were willing to move on some revenues, apparently.
THE PRESIDENT: Absolutely. But what you saw — and, again, you’ll see this from the description of the deal — essentially what they had agreed to give on is to get back to a baseline — this starts getting technical, but there were about $800 billion in revenue that were going to be available. And what we said was when you’ve got a ratio of $4 in cuts for every $1 of revenue, that’s pretty hard to stomach. And we think it’s important to make sure that whatever additional revenue is in there covers the amount of money that’s being taken out of entitlement programs. That’s only fair. If I’m saying to future recipients of Social Security or Medicare that you’re going to have to make some adjustments, it’s important that we’re also willing to make some adjustments when it comes to corporate jet owners, or oil and gas producers, or people who are making millions or billions of dollars. Wendell. Where’s Wendell? Wendell is not here. Lesley. Is Lesley here?
Q Yes, Mr. President.
THE PRESIDENT: There you are.
Q Thank you. You’ve said that your bottom line has been the big deal; that’s not going to happen. Are you going to be willing to go back to just raising the debt ceiling still?
THE PRESIDENT: Well, I think I’ve been consistently saying here in this press room and everywhere that it is very important for us to raise the debt ceiling. We don’t have an option on that. So if that’s the best that Congress can do, then I will sign a extension of the debt ceiling that takes us through 2013. I don’t think that’s enough. I think we should do more. That’s the bare minimum; that’s the floor of what the American people expect us to do. So I’d like to see us do more. And when I meet with the leadership tomorrow I’m going to say let’s do more. But if they tell me that’s the best they can do, then I will sign an extension that goes to 2013, and I will make the case to the American people that we’ve got to continue going out there and solving this problem. It’s the right thing to do, and it’s time to do it. We can’t keep on putting it off.
Q You suggested that Speaker Boehner didn’t return phone calls this afternoon. Could you elaborate a little bit on that?
THE PRESIDENT: You know, I’m less concerned about me having to wait for my phone call returned than I am the message that I received when I actually got the phone call. I’m going to make this the last question. Go ahead.
Q Yes, the markets are closed right now, obviously. What assurances can you give people on Wall Street? Are you going to be reaching out to some people on Wall Street so that when Monday comes we don’t see a reaction to the news that’s developing right now?
THE PRESIDENT: I think it’s very important that the leadership understands that Wall Street will be opening on Monday, and we better have some answers during the course of the next several days.
Q What can you say to people who are watching who work on Wall Street who might find this news a bit alarming, perhaps?
THE PRESIDENT: Well, I think what you should say — well, here’s what I’d say: I remain confident that we will get an extension of the debt limit and we will not default. I am confident of that. I am less confident at this point that people are willing to step up to the plate and actually deal with the underlying problem of debt and deficits. That requires tough choices. That’s what we were sent here to do. I mean, the debt ceiling, that’s a formality. Historically, this has not even been an issue. It’s an unpleasant vote but it’s been a routine vote that Congress does periodically. It was raised 18 times when Ronald Reagan was President. Ronald Reagan said default is not an option, that it would be hugely damaging to the prestige of the United States and we shouldn’t even consider it. So that’s the easy part. We should have done that six months ago. The hard part is actually dealing with the underlying debt and deficits, and doing it in a way that’s fair. That’s all the American people are looking for — some fairness. I can’t tell you how many letters and emails I get, including from Republican voters, who say, look, we know that neither party is blameless when it comes to how this deft and deficit developed — there’s been a lot of blame to spread around — but we sure hope you don’t just balance the budget on the backs of seniors. We sure hope that we’re not slashing our commitment to make sure kids can go to college. We sure hope that we’re not suddenly throwing a bunch of poor kids off the Medicaid rolls so they can’t get basic preventative services that keep them out of the emergency room. That’s all they’re looking for, is some fairness. Now, what you’re going to hear, I suspect, is, well, if you — if the Senate is prepared to pass the cap, cut and balance bill, the Republican plan, then somehow we can solve this problem — that’s serious debt reduction. It turns out, actually, that the plan that Speaker Boehner and I were talking about was comparable in terms of deficit reduction. The difference was that we didn’t put all the burden on the people who are least able to protect themselves, who don’t have lobbyists in this town, who don’t have lawyers working on the tax code for them — working stiffs out there, ordinary folks who are struggling every day. And they know they’re getting a raw deal, and they’re mad at everybody about it. They’re mad at Democrats and they’re mad at Republicans, because they know somehow, no matter how hard they work, they don’t seem to be able to keep up. And what they’re looking for is somebody who’s willing to look out for them. That’s all they’re looking for. And for us not to be keeping those folks in mind every single day when we’re up here, for us to be more worried about what some funder says, or some talk radio show host says, or what some columnist says, or what pledge we signed back when we were trying to run, or worrying about having a primary fight — for us to be thinking in those terms instead of thinking about those folks is inexcusable. I mean, the American people are just desperate for folks who are willing to put aside politics just for a minute and try to get some stuff done. So when Norah asked or somebody else asked why was I willing to go along with a deal that wasn’t optimal from my perspective, it was because even if I didn’t think the deal was perfect, at least it would show that this place is serious, that we’re willing to take on our responsibilities even when it’s tough, that we’re willing to step up even when the folks who helped get us elected may disagree.
And at some point, I think if you want to be a leader, then you got to lead.
Thank you very much.
Statement by the President on Attacks in Mumbai
I strongly condemn the outrageous attacks in Mumbai, and my thoughts and prayers are with the wounded and those who have lost loved ones. The U.S. government continues to monitor the situation, including the safety and security of our citizens. India is a close friend and partner of the United States.
The American people will stand with the Indian people in times of trial, and we will offer support to India’s efforts to bring the perpetrators of these terrible crimes to justice. During my trip to Mumbai, I saw firsthand the strength and resilience of the Indian people, and I have no doubt that India will overcome these deplorable terrorist attacks.
Obama Administration Releases Blueprint to Reduce Drug Use and Its Consequences
(Washington, D.C.) -
Today, Gil Kerlikowske, Director of National Drug Control Policy released the Administration’s 2011 National Drug Control Strategy at events in Ohio. This Strategy coordinates an unprecedented government-wide public health and safety approach to reduce drug use and its consequences in the United States.
The Administration’s new Strategy continues to expand upon a balanced approach to drug control that emphasizes community-based drug prevention, integration of drug treatment into the mainstream health care system, innovations in the criminal justice system to break the cycle of drug use and crime, and international partnerships to disrupt transnational drug trafficking organizations.
For the first time, the 2011 Strategy outlines specific actions designed to improve the health and safety of three special populations affected by high rates of substance use: active duty military and veterans; college students; and women and their dependent children. Among our veterans, an estimated 375,000 VA patients had a substance use disorder diagnosis in 2007. According to the most recent survey data of state and Federal prison inmates from the Department of Justice, around 60 percent of the 140,000 veterans in Federal and state prisons are struggling with a substance use disorder, and 25 percent reported using drugs at the time of offense.
Equally concerning is the fact that substance use affects many of the Nation’s estimated 75,600 homeless veterans. Additionally, approximately 44 percent of full-time college students, age 18 to 22, reported binge drinking in the past 30 days, and 20 percent reported past-month use of marijuana or other illegal drugs. Women are also using drugs in increasing numbers, but continue to receive treatment less frequently than men, while teenage girls are abusing prescription drugs at higher rates than teenage boys.
“Drug use affects every sector of society that is vital to a strong America, straining our economy, our healthcare and criminal justice systems, and endangering the futures of our young people,” said Gil Kerlikowske, White House Director of National Drug Control Policy. “This roadmap to reducing drug use and its consequences will require teamwork and collaboration that draws on the strengths of the prevention, treatment, law enforcement, criminal justice, and recovery communities, as well as parents all across America.”
The Strategy will also build upon several important legislative milestones achieved over the past year. In August, President Obama signed into law the Fair Sentencing Act. This significant piece of criminal justice reform dramatically reduced a 100-to-1 disparity between the amounts of powder and crack cocaine that trigger mandatory minimum sentences and eliminates the mandatory minimum sentence for simple possession of crack cocaine. It also increases penalties for major drug traffickers.
In October, the President signed into law the Secure and Responsible Drug Disposal Act of 2010, which will help communities combat the Nation’s prescription drug abuse epidemic by providing states and localities the authority to collect expired, unused, or unneeded prescription drugs. Both of these legislative accomplishments were the result of support from both Democrats and Republicans, illustrating how combating drug use and its consequences continues to be a non-partisan effort.
Overall drug use in the United States has dropped substantially over the past thirty years. In response to comprehensive efforts to address drug use at the local, state, Federal, and international levels, the rate of Americans using illicit drugs today is roughly half the rate it was in the late 70s.
More recently, there has been a 46 percent drop in current cocaine use among young adults (age 18 to 25 years) over the past five years, and a 68 percent drop in the rate of people testing positive for cocaine in the workplace since 2006. To build on this progress and support a public health approach to drug control outlined in the Strategy, the Obama Administration has committed over $10 billion drug education programs and support for expanding access to drug treatment for addicts.
A full copy of the 2011 National Drug Control Strategy is available here. Click here to listen to several audio stories about how drug policy and substance abuse prevention affects the lives of everyday Americans.
For more information on National efforts to reduce drug use and its consequences visit: www.WhiteHouseDrugPolicy.gov
The Office of National Drug Control Policy seeks to foster healthy individuals and safe communities by effectively leading the Nation’s effort to reduce drug use and its consequences.
Statement of President Barack Obama: Recognition of the Republic of South Sudan
Saturday, July 9, 2011
I am proud to declare that the United States formally recognizes the Republic of South Sudan as a sovereign and independent state upon this day, July 9, 2011.
After so much struggle by the people of South Sudan, the United States of America welcomes the birth of a new nation. Today is a reminder that after the darkness of war, the light of a new dawn is possible. A proud flag flies over Juba and the map of the world has been redrawn. These symbols speak to the blood that has been spilled, the tears that have been shed, the ballots that have been cast, and the hopes that have been realized by so many millions of people.
The eyes of the world are on the Republic of South Sudan. And we know that southern Sudanese have claimed their sovereignty, and shown that neither their dignity nor their dream of self-determination can be denied. This historic achievement is a tribute, above all, to the generations of southern Sudanese who struggled for this day. It is also a tribute to the support that has been shown for Sudan and South Sudan by so many friends and partners around the world.
Sudan’s African neighbors and the African Union played an essential part in making this day a reality. And along with our many international and civil society partners, the United States has been proud to play a leadership role across two Administrations.
Many Americans have been deeply moved by the aspirations of the Sudanese people, and support for South Sudan extends across different races, regions, and political persuasions in the United States. I am confident that the bonds of friendship between South Sudan and the United States will only deepen in the years to come. As Southern Sudanese undertake the hard work of building their new country, the United States pledges our partnership as they seek the security, development and responsive governance that can fulfill their aspirations and respect their human rights.
As today also marks the creation of two new neighbors, South Sudan and Sudan, both peoples must recognize that they will be more secure and prosperous if they move beyond a bitter past and resolve differences peacefully. Lasting peace will only be realized if all sides fulfill their responsibilities.
The Comprehensive Peace Agreement must be fully implemented, the status of Abyei must be resolved through negotiations, and violence and intimidation in Southern Kordofan, especially by the Government of Sudan, must end. The safety of all Sudanese, especially minorities, must be protected.
Through courage and hard choices, this can be the beginning of a new chapter of greater peace and justice for all of the Sudanese people. Decades ago, Martin Luther King reflected on the first moment of independence on the African continent in Ghana, saying, “I knew about all of the struggles, and all of the pain, and all of the agony that these people had gone through for this moment.”
Today, we are moved by the story of struggle that led to this time of hope in South Sudan, and we think of those who didn’t live to see their dream realized. Now, the leaders and people of South Sudan have an opportunity to turn this moment of promise into lasting progress.
The United States will continue to support the aspirations of all Sudanese. Together, we can ensure that today marks another step forward in Africa’s long journey toward opportunity, democracy and justice.
REMARKS BY THE PRESIDENT ON THE MONTHLY JOBS REPORT
Rose Garden 11:05 A.M. EDT
THE PRESIDENT: Good morning, everybody. Obviously, over the last couple of days, the debate here in Washington has been dominated by issues of debt limit, but what matters most to Americans, and what matters most to me as President, in the wake of the worst downturn in our lifetimes, is getting our economy on a sounder footing more broadly so the American people can have the security they deserve. And that means getting back to a place where businesses consistently grow and are hiring, where new jobs and new opportunity are within reach, where middle-class families once again know the security and peace of mind they’ve felt slipping away for years now. And today’s job report confirms what most Americans already know: We still have a long way to go and a lot of work to do to give people the security and opportunity that they deserve.
We’ve added more than 2 million new private sector jobs over the past 16 months, but the recession cost us more than 8 million. And that means that we still have a big hole to fill. Each new job that was created last month is good news for the people who are back at work, and for the families that they take care of, and for the communities that they’re a part of.
But our economy as a whole just isn’t producing nearly enough jobs for everybody who’s looking. We’ve always known that we’d have ups and downs on our way back from this recession. And over the past few months, the economy has experienced some tough headwinds — from natural disasters, to spikes in gas prices, to state and local budget cuts that have cost tens of thousands of cops and firefighters and teachers their jobs. The problems in Greece and in Europe, along with uncertainty over whether the debt limit here in the United States will be raised, have also made businesses hesitant to invest more aggressively.
The economic challenges that we face weren’t created overnight, and they’re not going to be solved overnight. But the American people expect us to act on every single good idea that’s out there. I read letter after letter from folks hit hard by this economy. None of them ask for much. Some of them pour their guts out in these letters. And they want me to know that what they’re looking for is that we have done everything we can to make sure that they are rewarded when they’re living up to their responsibilities, when they’re doing right by their communities, when they’re playing by the rules. That’s what they’re looking for, and they feel like the rules have changed. They feel that leaders on Wall Street and in Washington –- and believe me, no party is exempt –- have let them down. And they wonder if their efforts will ever be reciprocated by their leaders. They also make sure to point out how much pride and faith they have in this country; that as hard as things might be today, they are positive that things can get better. And I believe that we can make things better. How we respond is up to us.
There are a few things that we can and should do, right now, to redouble our efforts on behalf of the American people. Let me give you some examples. Right now, there are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding. We connect the two by investing in rebuilding our roads and our bridges and our railways and our infrastructure. And we could put back to work right now some of those construction workers that lost their jobs when the housing market went bust.
Right now, we can give our entrepreneurs the chance to let their job-creating ideas move to market faster by streamlining our patent process. That’s pending before Congress right now. That should pass. Today, Congress can advance trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting thousands of jobs here at home. That could be done right now. R
ight now, there are a lot of middle-class families who sure could use the security of knowing that the tax cut that I signed in December to help boost the economy and put a thousand dollars in the pockets of American families, that that’s still going to be around next year. That’s a change that we could make right now. There are bills and trade agreements before Congress right now that could get all these ideas moving. All of them have bipartisan support. All of them could pass immediately.
And I urge Congress not to wait. The American people need us to do everything we can to help strengthen this economy and make sure that we are producing more jobs. Also to put our economy on a stronger and sounder footing for the future, we’ve got to rein in our deficits and get the government to live within its means, while still making the investments that help put people to work right now and make us more competitive in the future. As I mentioned, we’ve had some good meetings. We had a good meeting here yesterday with leaders of both parties in Congress. And while real differences remain, we agreed to work through the weekend and meet back here on Sunday.
The sooner we get this done, the sooner that the markets know that the debt limit ceiling will have been raised and that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need in order to make additional investments to grow and hire and will provide more confidence to the rest of the world as well, so that they are committed to investing in America. Now, the American people sent us here to do the right thing not for party, but for country. So we’re going to work together to get things done on their behalf. That’s the least that they should expect of us, not the most that they should expect of us.
I’m ready to roll up my sleeves over the next several weeks and next several months. I know that people in both parties are ready to do that as well. And we will keep you updated on the progress that we’re making on these debt limit talks over the next several days. Thank you.
Q How was the meeting with Mrs. Pelosi?
THE PRESIDENT: It was good.
President Obama Announces More Key Administration Posts
Today, President Barack Obama announced his intent to nominate the following individuals to key Administration posts: ·
Michael A. Hammer, Assistant Secretary for Public Affairs, Department of State
· Charles McConnell, Assistant Secretary for Fossil Energy, Department of Energy
The President also announced his intent to appoint the following individuals to key Administration posts: ·
Terry Guen, Member, Advisory Council on Historic Preservation
· Dorothy T. Lippert, Member, Advisory Council on Historic Preservation · Rosemary A. Joyce, Member, Cultural Property Advisory Committee
President Obama said, “Our nation will be greatly served by the talent and expertise these individuals bring to their new roles. I am grateful they have agreed to serve in this Administration, and I look forward to working with them in the months and years ahead.”
President Obama announced his intent to nominate the following individuals to key Administration posts:
Michael A. Hammer, Nominee for Assistant Secretary for Public Affairs, Department of State
Michael A. Hammer, a career member of the Senior Foreign Service, currently serves as the Acting Assistant Secretary and Principal Deputy Assistant Secretary for Public Affairs at the U.S. Department of State. Prior to this assignment, Mr. Hammer served as Special Assistant to the President, Senior Director for Press and Communications, and National Security Council Spokesman from January 2009 to January 2011. Previous assignments at the National Security Council include Deputy Spokesman and Director of Andean Affairs. Since joining the Foreign Service in 1988, Mr. Hammer has served abroad in Bolivia, Norway, Iceland, and Denmark. In Washington D.C., Mr. Hammer has also served in the Department’s Operations Center and as Special Assistant to the Under Secretary for Political Affairs. Mr. Hammer holds a B.A. from Georgetown University’s School of Foreign Service and master’s degrees from the Fletcher School of Law and Diplomacy at Tufts University and from the National War College at the National Defense University. Charles McConnell, Nominee for Assistant Secretary for Fossil Energy, Department of EnergyCharles McConnell is the Chief Operating Officer in the Office of Fossil Energy at the U.S. Department of Energy (DOE). Prior to joining DOE in 2011, Mr. McConnell served as Vice President of Carbon Management at Battelle Energy Technology from 2009-2011, with responsibility for business and technology management. He previously spent 31 years with Praxair, Inc., in various positions in the U.S. and Asia, including as Global Vice President. Mr. McConnell has held a number of advisory positions including chairmanships of the Gasification Technologies Council and the Clean Coal Technology Foundation of Texas. He has served on the FutureGen Advisory Board in Texas, the Gulf Coast Carbon Center, T&P Syngas Company, the Pittsburgh Coal Conference and the Coal Utilization Research Council. Mr. McConnell holds a B.S. in Chemical Engineering from Carnegie-Mellon University and an M.B.A. in Finance from Cleveland State University.
President Obama announced his intent to appoint the following individuals to key Administration posts:
Terry Guen, Appointee for Member, Advisory Council on Historic PreservationTerry Guen, FASLA, is president and principal of Terry Guen Design Associates, Inc., a Chicago-based consultancy specializing in the master planning and design of contextual, sustainable public spaces and landscapes. Ms. Guen was lead landscape architect and urban designer for the West Side Waterfront- Hudson River Park Plan in New York City, the Charles River Basin Plan for the Department of Conservation and Recreation in Boston, and is the master landscape architect of Millennium Park, Chicago. Ms. Guen was honored in 2009 as a Fellow of the American Society of Landscape Architects. A graduate of Bowdoin College and the University of Pennsylvania, she is on the design faculty at the Illinois Institute of Technology, Program of Landscape Architecture. Dorothy T. Lippert, Appointee for Member, Advisory Council on Historic Preservation
Dorothy Lippert is currently a Case Officer in the Repatriation Office of the National Museum of Natural History at the Smithsonian Institution. In her current position, Ms. Lippert responds to repatriation requests from Native American tribes for human remains and sacred material. Following graduate school, Ms. Lippert worked as the Education Coordinator for the John P. McGovern Hall of the Americas at the Houston Museum of Natural Science. She currently serves on the Executive of the World Archaeological Congress and is a past member of the Board of Directors for the Society for American Archaeology. Her research interests include the development of indigenous archaeology, repatriation, ethics, and the archaeology and bioarchaeology of the southeastern United States. Ms. Lippert received her B.A. from Rice University and her M.A. and Ph.D. from the University of Texas at Austin.
Rosemary A. Joyce, Appointee for Member, Cultural Property Advisory CommitteeRosemary Joyce is a professor of anthropology and former chair of the Anthropology Department at the University of California at Berkeley. She is one of the world’s leading experts on Honduran archaeology and once served as an Assistant Director of the Peabody Museum at Harvard University and Director of the Hearst Museum at Berkeley. She has served as an officer of the Archaeology Division of the American Anthropological Association, on committees of the Society for American Archaeology and the Archaeological Institute of America, and is a member of the Society for Historical Archaeology. Her research includes comparative study of collections of Honduran archaeological materials in museums in Europe, the United States, and Central America, and historical research on the origins of museums in systematic collecting of objects beginning in the sixteenth century. Professor Joyce received her A.B. from Cornell University and her Ph.D. in Anthropology from the University of Illinois-Urbana.
Statement from President Obama on the Passing of Elizabeth Anne Ford
Throughout her long and active life, Elizabeth Anne Ford distinguished herself through her courage and compassion. As our nation’s First Lady, she was a powerful advocate for women’s health and women’s rights.
After leaving the White House, Mrs. Ford helped reduce the social stigma surrounding addiction and inspired thousands to seek much-needed treatment.
While her death is a cause for sadness, we know that organizations such as the Betty Ford Center will honor her legacy by giving countless Americans a new lease on life.
Today, we take comfort in the knowledge that Betty and her husband, former President Gerald Ford, are together once more. Michelle and I send our thoughts and prayers to their children, Michael, John, Steven, and Susan.
REMARKS BY THE PRESIDENT
IN TWITTER TOWN HALL
2:04 P.M. EDT
MR. DORSEY: Good afternoon and welcome to the White House. I am Jack Dorsey, from Twitter.
Through more than 200 million tweets per day, people around the world use Twitter to instantly connect to what’s most meaningful to them. In every country — Egypt and Japan, the UK and the United States — much of this conversation is made up of everyday people engaging in spirited debate about the future of their countries.
Our partners at Salesforce Radian6 studied more than a million tweets, discussing our nation’s politics over the recent weeks, and they found that America’s financial security to be one of the most actively talked about topics on Twitter. They further found that President Obama’s name comes up in more than half of these conversations.
And so today this vibrant discussion comes here to the White House and you get to ask the questions. To participate, just open your web browser and go to askObama.Twitter.com. Neither the President or I know the questions that will be asked today. That decision is driven entirely by the Twitter users.
And so let’s get the conversation started. Ladies and gentlemen, the President of the United States. (Applause.)
THE PRESIDENT: Hello, everybody! (Applause.) First of all, everybody can sit down. (Laughter.) It’s much easier to tweet from a seated position. (Laughter.)
MR. DORSEY: And I understand you want to start the conversation off with a tweeter yourself.
THE PRESIDENT: I’m going to make history here as the first President to live tweet. So we’ve got a computer over here. (Types in tweet.)
MR. DORSEY: It’s only 140 characters. (Laughter.)
THE PRESIDENT: All right, I think I have done this properly. But here’s the test.
MR. DORSEY: And you tweeted.
THE PRESIDENT: How about that? Not bad. (Applause.) Thank you. So I think my question will be coming up at some point.
MR. DORSEY: So what was your question? Here it is.
THE PRESIDENT: Here’s the question: “In order to reduce the deficit, what costs would you cut and what investments would you keep?”
And the reason I thought this was an important question is, as all of you know, we are going through a spirited debate here in Washington, but it’s important to get the whole country involved, in making a determination about what are the programs that can help us grow, can create jobs, improve our education system, maintain our clean air and clean water, and what are those things that are a waste that we shouldn’t be investing in because they’re not helping us grow or create jobs or creating new businesses. And that debate is going to be heating up over the next couple of weeks, so I’d love to hear from the American people, see what thoughts they have.
MR. DORSEY: Excellent. Well, first question comes from a curator in New Hampshire. And we have eight curators around the country helping us pick tweets from the crowd so that we can read them to the President.
And this one comes from William Smith: “What mistakes have you made in handling this recession and what would you do differently?”
THE PRESIDENT: That’s a terrific question. When I first came into office we were facing the worst recession since the Great Depression. So, looking around this room, it’s a pretty young room — it’s certainly the worst recession that we’ve faced in our lifetimes. 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 that they didn’t have to lay off teachers and cops and firefighters 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 also was the right thing to do, although a tough decision, to save the auto industry, which is now profitable and gaining market share — the U.S. auto industry — for the first time in a very long time.
I think that — probably two things that I would do differently. One would have been to explain to the American people that it was going to take a while for us to get out of this. I think even I did not realize the magnitude, because most economists didn’t realize the magnitude, of the recession until fairly far into it, maybe two or three months into my presidency where we started realizing that we had 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 area is in the area of housing. I think that the continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected. And so that’s continued to be a big drag on the economy.
We’ve had to revamp our housing program several times to try to 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 to us trying to solve the problem.
MR. DORSEY: Mr. President, 27 percent of our questions are in the jobs category, as you can see from the screen over here. Our next question has to do about jobs and technology. It comes from David: “Tech and knowledge industries are thriving, yet jobs discussion always centers on manufacturing. Why not be realistic about jobs?”
THE PRESIDENT: Well, it’s not an either/or question; it’s a both/and question. 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. And manufacturing jobs end up having both higher wages typically, and they also have bigger multiplier effects. So one manufacturing job can support a range of other jobs — suppliers and the restaurant near the plant 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 to figure out 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.
So it’s great that we have an Apple that’s creating iPods, iPads and designing them and creating the software, but it would be nice if we’re also making the iPads and the iPods here in the United States, because that’s some more jobs that people can work at.
And there are going to be a series of decisions that we’ve got 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 GPS got formed. Companies on their own can’t always finance the basic research because they can’t be assured that they’re going to get a return on it.
Number two, we’ve got to drastically improve how we train our workforce and our kids around math and science and technology.
Number three, we’ve got to have a top-notch infrastructure to support advanced manufacturing, and we’ve got to look at sectors where we know this is going to be the future. Something like clean energy, for example. For us not to be the leaders in investing in clean energy manufacturing so that wind turbines and solar panels are not only designed here in the United States but made here in the United States makes absolutely no sense. We’ve got to invest in those areas for us to be successful.
So you can combine high-tech with manufacturing, and then you get the best of all worlds.
MR. DORSEY: You mentioned education. There’s a lot of questions coming about education and its impact on the economy. This one in particular is from a curator who is pulling from a student in Ohio, named Dustin: “Higher ed is necessary for a stronger economy, but for some middle-class Americans it’s becoming too expensive. What can be done?”
THE PRESIDENT: Well, here is some good news. We’ve already done something that is very significant, and people may not know. As part of a higher education package that we passed last year, what we were able to do was to take away subsidies that were going to banks for serving as middlemen 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 that we’ve already taken. This is about tens of billions of dollars’ worth of additional federal dollars that were going to banks 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. And that obviously helps to relieve the burden on a lot students — because, look, I’m a guy who had about $60,000 worth of debt when I graduated from law school, and Michelle had $60,000. And so we were paying a bigger amount every month than our mortgage. And we did that for eight, 10 years. So I know how burdensome this can be.
I do think that the universities still have a role in trying to keep their costs down. And I think that it’s important — even if we’ve got better student loan programs, more grants, if the costs keep on going up then we’ll never have enough money, you’ll never get enough help to avoid taking on these huge debts. And so working with university presidents to try to figure out, where can you cut costs — of course, it may mean that the food in the cafeteria is a little worse and the gym is not as fancy. But I think all of us have to figure out a way to make sure that higher education is accessible for everybody.
One last point — I know, Twitter, I’m supposed to be short. (Laughter.) But city — community colleges is a huge, under-utilized resource, where what we want to do is set up a lifelong learning system where you may have gotten your four-year degree, but five years out you decide you want to go into another field or you want to brush up on new technologies that are going to 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 I think we can make a lot of progress.
MR. DORSEY: You mention debt a lot. That’s come up in conversation a lot recently, especially in some of our recent questions, specifically the debt ceiling. And this is formulated in our next question from RenegadeNerd out of Atlanta: “Mr. President, will you issue an executive order to raise the debt ceiling pursuant to Section 4 of the 14th Amendment?”
THE PRESIDENT: Can I just say, RenegadeNerd, that picture is — captures it all there. (Laughter.) He’s got his hand over there, he’s looking kind of confused. (Laughter.)
Let me, as quickly as I can, describe what’s at stake with respect to the debt ceiling. Historically, the United States, whenever it 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 created a lot of controversy.
What’s happening now is, is that Congress is suggesting we may not vote to raise the debt ceiling. If we do not, then the Treasury 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 doesn’t mean anything. And so our credit 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 that we shouldn’t be toying with. What Dexter’s question referred to was there are some people who say that under the Constitution, it’s unconstitutional for Congress not to allow Treasury to pay its bills and are suggesting that 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 that the U.S. is going to default on its debt is just irresponsible. And my expectation is, is that over the next week to two weeks, that Congress, working with the White House, comes up with a deal that solves our deficit, solves our debt problems, and makes sure that our full faith and credit is protected.
MR. DORSEY: So back to jobs. We have a question from New York City about immigrant entrepreneurs: “Immigrant entrepreneurs can build companies and create jobs for U.S. workers. Will you support a startup visa program?”
THE PRESIDENT: What I want to do is 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 against the United States 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 PhD in computer science or you’ve got a PhD in engineering, and you say I’m ready to invest in the United States, create jobs in the United States, then we are able to say to you, we want you to stay here.
And I think that it is 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’s 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. And 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 that — we don’t want to pay for training them here and then having them benefit other countries.
MR. DORSEY: Our next question was just — was sent just an hour ago and touches on alternative energy and job creation: “Will you focus on promoting alternative energy industries in oil states like Louisiana and Texas?”
THE PRESIDENT: I want to promote alternative energy everywhere, including oil 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. And so we put forward a range of programs that provided credits and grants to startup 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. And 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, all across America.
And whoever wins this race on advanced battery manufacturing is probably going to win the race to produce the cars of the 21st century. China is investing in it. Germany is investing in it. We need to be investing in it as well.
MR. DORSEY: I wanted to take a moment and point out the map just behind you. These are tweets coming in, in real time, and these are questions being asked right now. And it flips between the various categories that we’ve determined and also just general askObama questions.
So our next question is coming up on the screen now, from Patrick: “Mr. President, in several states we have seen people lose their collective bargaining rights. Do you have a plan to rectify this?”
THE PRESIDENT: 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.
Now, we live in a very competitive society in the 21st century. And that means 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, why is it that the person whose salary I’m paying has a better deal?
What this means is, 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 be able to join together with other workers and to negotiate and kind of even the bargaining power on either side, that’s something that has to be protected. And we can make these adjustments in a way that are equitable but preserve people’s collective bargaining rights.
So, 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 out forcefully for the principle that we can make these adjustments that are necessary during these difficult fiscal times, but do it 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 make sure that we sent a signal that everybody is going to have to make some sacrifices, including federal workers.
By the way, people who work in the White House, they’ve had their pay frozen since I came in, our high-wage folks. So 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.
MR. DORSEY: Mr. President, 6 percent of our questions are coming in about housing, which you can see in the graph behind me. And this one in particular has to do with personal debt and housing: “How will admin work to help underwater homeowners who aren’t behind in payments but are trapped in homes they can’t sell?” From Robin.
THE PRESIDENT: This is a great question. And remember, I mentioned one of our biggest challenges during 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, they’ve got to sell at a massive loss that they can’t afford. It means that they don’t feel like they have any assets because the single biggest asset of most Americans is their home.
So what we’ve been trying to do is to work with the issuers of the mortgages, the banks or the 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 their payments are lower, and in some cases, maybe even modify their principal, so that they don’t feel burdened by these huge debts and feel tempted to walk away from homes that actually they love and where they’re raising their families.
We’ve made some progress. We have, through the programs that we set up here, have 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. And so we’re going back to the drawing board, talking to banks, try to put some pressure on them to work with people who have mortgages to see if we can make further adjustments, modify loans more quickly, and also see if there may be circumstances where reducing principal is appropriate.
MR. DORSEY: And our next question comes from someone you may know. This is Speaker Boehner.
THE PRESIDENT: Oh, there you go. (Laughter.)
MR. DORSEY: “After embarking on a record spending binge that left us deeper in debt, where are the jobs?” And I want to note that these characters are his fault. (Laughter.)
THE PRESIDENT: First of all –
MR. DORSEY: Not his fault, not his fault.
THE PRESIDENT: — John obviously needs to work on his typing skills. (Laughter.) Well, look, obviously John is the Speaker of the House, he’s a Republican, and so this is a slightly skewed question. (Laughter.) But what he’s right about is that we have not seen fast enough job growth relative to the need. I mean, we lost, as I said, 4 million jobs before I took office, before I was sworn in. About 4 million jobs were lost in the few months right after I took office before our economic policies had a chance to take any effect.
And over the last 15 months, we’ve actually seen two million jobs created in the private sector. And so we’re each month seeing growth in jobs, But when you’ve got a 8 million dollar — 8-million-job hole and you’re only filling it 100,000-200,000 jobs at a time 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 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, 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 the Republicans have been more resistant in cooperating, even though 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 other countries.
For us to move forward on a major infrastructure initiative where we’re putting people 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 very low, contractors are looking for work, and the need is there, 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 going to keep on trying and eventually I’m sure the Speaker will see the light. (Laughter.)
MR. DORSEY: Speaking of startups, there’s a ton of questions about small businesses and how they affect job creation. This one comes from Neal: “Small biz create jobs. What incentives are you willing to support to improve small business growth?”
THE PRESIDENT: Well, I just mentioned some of the tax breaks that we’ve provided not only to small businesses, but also in some cases were provided big businesses. For example, if they’re making investments in plants and equipment this year, they can fully write down those costs, take — 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, because 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 their various regional banks in their communities. A lot of those banks were pretty over-extended in the commercial real estate market, which has been hammered. A lot of them are still digging themselves out of bad loans that they made that were shown to be bad during the recession.
And so, what we’ve tried to do is get the Small Business Administration, the federal agency that helps small businesses, to step in and to provide more financing — waiving fees, seeing if we can lower interest rates in some cases, making sure that the threshold for companies that qualify for loans are more generous. And that’s helped a lot of small businesses all across the country. And this is another example of where, working with Congress, my hope is, is that we can continue to provide these tax incentives and maybe do even a little bit more.
Q Our next question was tweeted less than five minutes ago and comes to us from Craig: “My question is, can you give companies a tax break if they hire an honorable discharged veteran?”
THE PRESIDENT: This is something that I’ve been talking a lot about internally. We’ve got all these young people coming back from Iraq and Afghanistan; have made incredible sacrifices; 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. And that makes no sense.
So what we’d like to do is potentially combine a tax credit for a company that hires veterans with a campaign to have private companies step up and do the right thing and hire more veterans. And 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 the hiring of veterans, and this has been a top priority of mine. The notion that these guys 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.
MR. DORSEY: Mr. President, this next question comes from someone else you may recognize. And what’s interesting about this question, it was heavily retweeted and voted up by our userbase. This comes from NickKristof: “Was it a mistake to fail to get Republicans to commit to raise the debt ceiling at the same time tax cuts were extended?”
THE PRESIDENT: Nicholas is a great columnist. But I have to tell you the assumption of the question is, is that I was going to be able to get them to commit to raising the debt ceiling.
In December, we were in what was called the lame duck session. The Republicans knew that they were going to be coming in as the majority. We only had a few short weeks to deal with a lot of complicated issues, including repealing “don’t ask, don’t tell,” dealing with a START 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 the Republicans badly wanted, which is to extend the Bush tax cuts on the wealthy for another two years.
In exchange, we were able to get this payroll tax that put $1,000 — 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 out there who are still out of work and whose benefits were about to run out. And that was a much better deal than I think a lot of people expected.
It would have been great if we were able to also settle this issue of the debt ceiling at that time. That wasn’t the deal that was available. But here’s the more basic point: Never in our history has the United States 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’m happy to have those debates. I think the American people are on my side on this. 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. Everything has — we need to look at entitlements, and we have to say, how do we protect and preserve Medicare and Social Security for not just this generation but also future generations. And that’s going to require some modifications, even as we maintain its basic structure.
So what I’m hoping to see over the next couple of weeks is people put their dogmas aside, their sacred cows aside; they come together and they say, here’s a sensible approach that reduces our deficit, makes sure that government is spending within its means, but also continues to make investments in education, in clean energy, and basic research that are going to preserve our competitive advantage going forward.
MR. DORSEY: So speaking of taxes, our next question is coming from us — from Alabama, from Lane: “What changes to the tax system do you think are necessary to help solve the deficit problem and for the system to be fair?”
THE PRESIDENT: Well, I think that, first of all, 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 an extra thousand dollars in the pockets of every family in America.
And 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 — senior or George Bush, junior. They’re lower than they were under Bill Clinton.
The question is how do we pay for the things that we all think are important and how do we make sure that the tax system is equitable? And 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 made tens of billions of dollars per quarter need an additional break to give them an 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 — (laughter) — for me to be able to go back to the tax rate 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. And, Jack, we haven’t talked about this before, but I’m assuming it makes sense to you, given Twitter has done pretty well. (Laughter.)
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 their incomes go up. It does mean that those who are in the top 1-2 percent, who have seen their incomes go up much more quickly than anybody else, pays a little bit more in order to make sure that we can make the basic investments that grow this country — that’s not an unreasonable position to take. 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 about defense spending, or even some programs that I like but we may not need. But we can’t close the deficit and debt just by cutting things like Head Start or Medicare. That can’t be an equitable solution to solving the problem. And then, we say to millionaires and billionaires, you don’t have to do anything. I don’t want a $200,000 tax break if it means that some senior is going to have to pay $6,000 more for their 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 it’s good for the country.
MR. DORSEY: So we have a follow-up question to your answer about homeowners being underwater. And this one came in under 10 minutes ago from Shnaps: “Is free-market an option? Obama on homeowners underwater: have made some progress, but plus needed looking at options.”
THE PRESIDENT: Well, when Shnaps — (laughter) — when Shnaps talks about free market options, I mean, keep in mind that most of this is going to be a function of the market slowly improving because people start having more confidence in the economy; more people decide, you know what, the housing market has kind of bottomed out, now is the time to buy. They start buying. That starts slowly lifting up prices, and 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 feel more confident about jobs? Do they feel more confident that they’re going to be able to make their mortgage? And 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 that we can do it make sure that for homeowners who have been responsible, didn’t buy more house than they could 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. The banker says, you know, I’m going to be better off than if this house is foreclosed upon and I have to sell it at a fire sale. The mortgage owner is able to stay in their home, but still pay what’s owed.
And I think that that kind of adjustment and negotiation process is tough. It’s difficult partly because a lot of banks these days 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 on filing some of their papers on these foreclosure actions, and so there’s been litigation around that.
But the bottom line is we should be able to make some progress on helping some people, understanding that some folks just bought more home than they could afford and probably they’re going to be better off renting.
MR. DORSEY: So 10 percent of our questions now are about education, and this one was surfaced from our curator in California by Marcia: “Public education here in California is falling apart, not graduating enough skilled workers or smart citizens. Privatization looming?”
THE PRESIDENT: 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 World War II, 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 made 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 workforces or not, that makes no sense.
And so we’ve got to 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 bang for the buck in education. And so my administration has pushed more reform more vigorously across the country through things 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, talented people aren’t going to 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 in a lot of schools around the country.
We do have to make sure that there are computers in a computer age inside classrooms, and that they work and that there’s Internets that are actually — there are Internet connections that actually function.
And I think that those states that are going to do well and those countries that do well are the ones that are going to continue to be committed to making education a priority.
MR. DORSEY: We have another follow-up sent about 10 minutes ago in response to your answer on Vietnam vets. From Brendan: “We definitely need to get more vets into jobs, but when are we going to support the troops by cutting oil dependence?”
THE PRESIDENT: 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 “three-fer.” And we have not had a serious energy policy for decades. Every President talks about it; we don’t get it done.
Now, 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 are going full-throttle on clean energy solutions like solar and wind and biodiesel, we’re going to need oil for some time. But if we had a goal where we’re just reducing our dependence on oil each year in a staggered set of steps, it would save consumers in their pocketbook; it would make our businesses more efficient and less subject to the whims of the spot oil market; it would make us less vulnerable to the kinds of disruptions that have occurred because of what happened in the Middle East this spring; and it would drastically cut down on our carbon resources.
So what I — 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, we only have 2 to 3 percent of the world’s oil reserves; 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, just to take one example. That will save us millions of barrels of oil, just by using existing technologies and saying to car companies, you can do better than 10 miles a gallon or 15 miles a gallon. And you’re starting to see Detroit respond. U.S. car companies have figured out, you know what, if we produce high-quality electric vehicles, if we produce high-quality low gas — or high gas mileage vehicles, those will sell.
And we’re actually starting to see market share increase for American cars in subcompact and compact cars for the first time in many years. And that’s partly because we increased fuel-efficiency standards through an administrative agreement. It’s also because, as part of the deal to bail out the oil companies, we said to them, start focusing on the cars of the future instead of looking at big gas guzzlers of the past.
MR. DORSEY: So all of our questions now are coming in real time — this one less than 10 minutes ago, and surfaced from a curator: “So will you raise taxes on the middle class at least to President George W. Bush levels?”
THE PRESIDENT: No, what we’ve said is let’s make permanent the Bush tax cuts for low and moderate income folks — people in — for the 98 percent of people who, frankly, have not seen their wages go up or their incomes go up over the last decade. They don’t have a lot of room; they’re already struggling to meet the rising cost of health care and education and 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, we could solve our deficit and our debt problems.
This is not something that requires radical solutions. It requires some smart, common-sense, 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, is 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.
Q So a slight deviation from the economy — we have a lot of questions, and this will be our last before we start reading some responses to your question — about the space program. And this one from Ron: “Now that the space shuttle is gone, where does America stand in space exploration?”
THE PRESIDENT: 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. It was an extraordinary accomplishment and we’re very proud of the work that it did. But now what we need is that next technological breakthrough.
We’re still using the same models for space travel that we used with the Apollo program 30, 40 years ago. And so what we’ve said is, rather than keep on 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.
And what you’re seeing now is NASA I think redefining its mission. And we’ve set a goal to let’s ultimately get to Mars. A good pit stop is an asteroid. I haven’t actually — we haven’t identified the actual asteroid yet, in case people are wondering. (Laughter.) 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 horizon, what’s the next frontier out there.
But in order to do that, we’re actually going to need some technological breakthroughs that we don’t have yet. And what we can do is for some of this low-orbit stuff, some of the more routine space travel — obviously no space travel is routine, but it could become more routine over time — let’s allow the private sector to get in so that they can, for example, send these low-Earth orbit vehicles into space and we may be able to achieve a point in time where those of you who are just dying to go into space, you can buy a ticket, and a private carrier can potentially take you up there, while the government focuses on the big breakthroughs that require much larger investments and involve much greater risk.
MR. DORSEY: So, Mr. President, we received a lot of responses to your question over the last hour. And we wanted to go through seven of them that we picked out and just spend some time giving feedback on each. This one from Brian: “Cut defense contracting, end war on drugs, eliminate agribiz and big oil subsidies, invest in public campaign financing.”
THE PRESIDENT: Well, that’s not a bad list. (Laughter.) The 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 that investing in prevention, reducing demand, is going to be the most cost-effective thing that we can do. We still have to interdict the big drug kingpins and we still have to 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 the 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 happens here in Washington. And the more we can reduce money’s impact on Washington, the better off we’re going to be.
MR. DORSEY: Our next response from Elizabeth in Chicago: “Stop giving money to countries that waste it — Pakistan. Keep military, share the wealth between branches, and don’t cut education.”
THE PRESIDENT: You know, the 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 for people to know that foreign aid accounts for less than 2 percent of our budget. And if you defined it just narrowly as the kind of foreign aid to help feed people and what we think of classically as foreign aid, it’s probably closer to 1 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. And I think America, to be a leader in the world, to have influence, to help stabilize countries and create opportunity for people so that 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.
MR. DORSEY: This next one is pretty simple, from Daniel: “We need to raise taxes, period.” (Laughter.)
THE PRESIDENT: As I said before, if wealthy individuals are willing to simply go back to the rates that existed back in the 1990s when rich people were doing very well — it’s not like they were poor — and by the way, that’s when we saw the highest job growth rates and that’s when we saw the highest — 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, we’re not going to — you’re 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.
I mean, we can test the two theories. You had what happened during the ‘90s — right? Taxes for wealthy individuals were somewhat higher, businesses boomed, the economy boomed, great job growth. And then the 2000s, when taxes were cut on wealthy individuals, jobs didn’t grow as fast, businesses didn’t grow as fast. I mean, 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.
MR. DORSEY: So our next response — we have about nine minutes left and four more responses — this one from Tammy: “Cut military spending on oil subsidies and keep education investments.”
THE PRESIDENT: I agree with this. The one thing I’ll say about military spending — we’ve ended the war in Iraq, our combat mission there, and our — 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 going to 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’re properly equipped and safe. We’ve got to make sure that we are meeting our commitments for those veterans who are coming home. We’ve got to make sure that — in some cases, we’ve got outdated equipment that needs to be replaced.
And so I’m committed to reducing the defense budget, but as Commander-in-Chief, one of the things that we have to do is make sure that we do it in a thoughtful way that’s guided by our security and our strategic needs. And I think we can accomplish that. And the nice thing about the defense budget is it’s so big, it’s so huge, that a 1 percent reduction is the equivalent of the education budget. Not — 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 to fund things like basic research or student loans or things like that.
Q Our next response from southwest Ohio, Mostlymoderate: “Cut subsidies to industries which are no longer in crisis or are unsuccessful, cotton, oil, corn subsidies from ethanol.”
THE PRESIDENT: Well, there’s been a interesting debate taking place in Congress recently. I’m a big supporter of biofuels. But one of the things that’s become clear is, is that we need to accelerate our basic research in ethanol and other biofuels that are made from things like woodchips and algae as opposed to just focusing on corn, which is probably the least efficient energy producer of these various other approaches.
And so I think that it’s important for even those folks in farm states who traditionally have been strong supporters of ethanol to examine are we, in fact, going after the cutting-edge biodiesel and ethanol approaches that allow, for example, Brazil to run about 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. And so us doing more basic research in finding better ways to do the same concept I think is the right way to go.
Q I believe you addressed this next one, so we’re going to skip past it.
THE PRESIDENT: I did.
Q But from Ryan: “I would cut defense spending.”
Q And James: “I’d cut costs by cutting some welfare programs. People will never try harder when they are handed everything.”
THE PRESIDENT: Well, here’s what I would say. I think we should acknowledge that some welfare programs in the past were not well-designed and in some cases did encourage dependency. And as somebody who worked in low-income neighborhoods, I’ve seen it, where people weren’t encouraged to work, weren’t encouraged to upgrade their skills, were just getting a check, and over time their motivation started to diminish. And I think even if you’re progressive, you’ve got to acknowledge that some of these things have not been well-designed.
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 the vast majority of folks who are getting welfare want to work but can’t find jobs. And what we should be doing is in all our social programs evaluating what are 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’re there to support you and encourage 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, they haven’t spent a lot of time looking at military budgets. Those who say that 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 some programs, if they don’t work, we should have the courage to eliminate them, and then use that money to put it into the programs that do work.
But the bottom line is that our core values of responsibility, opportunity, making sure that the American Dream is alive and well so that anybody who is willing to put in the time and the effort and the 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 they’ve got basic health care, they’re going to be able to retire with some dignity and some respect, 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 to both have a commitment to our individualism and our freedom and our 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 provide some scholarships for my school, and you would not have Twitter if the Department of Defense, at some point, and a bunch of universities hadn’t made some investments in something that ended up being the Internet. And those were public goods that were invested in.
So you and I are sitting here because somebody, somewhere, made an investment in our futures. We’ve got the same obligation for the folks who are coming up behind us. We’ve got to make sure that we’re looking out for them, just like the previous generations 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.
MR. DORSEY: And on that note, thank you very much, Mr. President. (Applause.)
THE PRESIDENT: Thank you. I appreciate it. (Applause.) All right, thank you, guys. Thanks. (Applause.)
NOMINATIONS SENT TO THE SENATE:
Thomas J. Curry, of Massachusetts, to be Comptroller of the Currency for a term of five years, vice John C. Dugan, resigned.
Mary John Miller, of Maryland, to be an Under Secretary of the Treasury, vice Jeffrey Alan Goldstein.
Matthew G. Olsen, of Maryland, to be Director of the National Counterterrorism Center, Office of the Director of National Intelligence, vice Michael E. Leiter, resigned.
Wendy Ruth Sherman, of Maryland, to be an Under Secretary of State (Political Affairs), vice William J. Burns, resigned.
Obama Administration Officials Release Southwest Border Counternarcotics Strategy
Nogales, AZ—Today, Gil Kerlikowske, Director of National Drug Control Policy joined Secretary of Homeland Security Janet Napolitano, U.S. Customs and Border Protection (CBP) Commissioner Alan Bersin, and other public health and safety officials to release the 2011 National Southwest Border Counternarcotics Strategy—a key component of the Obama Administration’s unprecedented efforts to enhance security along the Southwest border. The strategy outlines Federal, state, local, tribal, and international actions to reduce the flow of illicit drugs, cash, and weapons across the border, and highlights the Obama Administration’s support for promoting strong border communities by expanding access to drug treatment and supporting programs that break the cycle of drug use, violence, and crime.
“The demand for illegal drugs in America is a driving factor for violence, addiction, and crime on both sides of our border,” said Kerlikowske. “Federal, state, local, tribal, and international efforts to reduce the threat of drug trafficking along the Southwest border are paying off, but we cannot let up. We must continue to dismantle the transnational criminal organizations that prey upon our communities while also supporting programs and initiatives that reduce drug consumption in the United States and Mexico.”
“Disrupting the flow of illegal drugs across our borders is critical to our nation’s safety and security,” said Secretary Napolitano. “Through this strategy, the Obama Administration will continue to strengthen our coordinated efforts to interdict drug traffickers and disrupt their links to terrorism and organized crime.”
“Drug trafficking cartels are responsible for some of the most devastating violence and criminal activity along the Southwest border and beyond, penetrating into communities large and small throughout this country. To be effective in fighting these criminal organizations, we must aggressively employ all of our international, Federal, state, local and tribal resources, and the strategy unveiled today is a critical piece of this Administration’s comprehensive efforts to dismantle these cartels,” said Attorney General Holder. “Through this strategy and the coordinated efforts with our law enforcement and other partners, we can continue to target these organizations, disrupt domestic transportation and distribution cells, and seize as many of the organization’s assets as possible.”
“Targeting, disrupting and dismantling Mexican drug cartels and their trafficking organizations operating on both sides of the border is a top priority for DEA” said Michele M. Leonhart, Administrator of the Drug Enforcement Administration. “The National Southwest Border Counternarcotics Strategy strengthens collaboration with our American and Mexican partners as together we seek to reduce drug addiction, secure our border, and bring these traffickers and their leaders to justice.”
The National Southwest Border Counternarcotics Strategy increases coordination and information sharing between Federal, and state and local law enforcement agencies, and calls for continued close collaboration with the Government of Mexico in their efforts against the drug cartels—highlighting national efforts to interdict the southbound flow of weapons and illicit currency and reduce the demand for drugs. The Director of National Drug Control Policy will oversee the implementation of the strategy, in coordination with the Department of Homeland Security, Office of Counternarcotics Enforcement, and the Department of Justice, Office of the Deputy Attorney General. The strategy will be implemented in coordination with other border related efforts, including the Merida Initiative, led by the State Department, and the Department of Homeland Security’s (DHS) ongoing Southwest border security efforts.
Under the Southwest Border Initiative the Obama Administration has deployed unprecedented amount of personnel, technology, and resources along the Southwest border—nearly doubling the number of Border Patrol agents from approximately 10,000 in 2004 to over 20,700 today, screening of 100% of southbound rail shipments, and for the first time providing critical surveillance capabilities to personnel on the ground through unmanned aerial systems that cover the Southwest border from California to Texas. Over the past two and a half years, DHS has seized 75 percent more currency, 31 percent more drugs, and 64 percent more weapons along the Southwest border as compared to the last two and a half years during the previous administration. Additionally, the Drug Enforcement Administration (DEA) has allocated nearly 29 percent of its domestic agent positions to the Southwest border, while U.S. Immigration and Customs Enforcement (ICE) increased its Federal agents on the border, and the Department of Justice (DOJ) has secured a record number of extraditions from Mexico: 94 in 2010 compared to 12 in 2000 and trained over 5,400 Mexican prosecutors and investigators.
The National Southwest Border Counternarcotics Strategy is an integral component of the Administration’s broader national drug control policy. This policy includes a renewed commitment to reduce the demand for illegal drugs at home through a balanced approach that provides increased support to prevention, treatment, and other programs.
For a full copy of the 2011 National Southwest Border Counternarcotics Strategy click here.
For more information on national efforts to reduce drug use and its consequences visit www.WhiteHouseDrugPolicy.gov
The Office of National Drug Control Policy seeks to foster healthy individuals and safe communities by effectively leading the Nation’s effort to reduce drug use and its consequences.
STATEMENT OF ADMINISTRATION POLICY
H.R. 2354 — Energy and Water Appropriations Act, 2012
(Rep. Rogers, R-KY)
This Statement of Administration Policy provides the Administration’s views on H.R. 2354, making appropriations for energy and water development and related agencies for the fiscal year ending September 30, 2012. The Administration is committed to ensuring the Nation lives within its means and reducing the deficit so that the Nation can compete in the global economy and win the future. That is why the President put forth a comprehensive fiscal framework that reduces the deficit by $4 trillion, supports economic growth and long-term job creation, protects critical investments, meets the commitments made to provide dignity and security to Americans no matter their circumstances, and provides for our national security.
While overall funding limits and subsequent allocations remain unclear pending the outcome of ongoing bipartisan, bicameral discussions between the Administration and congressional leadership on the Nation’s long-term fiscal picture, the Administration has concerns regarding the level of resources the bill would provide for a number of programs in a way that undermines core government functions, investments key to economic growth and job creation, as well as national security. Programs adversely affected by the bill include:
Department of Energy (DOE)
Clean Energy Research and Development (R&D). The level of funding provided for R&D of renewable energy and energy efficient technologies would undermine the ability of the United States to develop a clean energy economy and create jobs for the future. By reducing funds for key programs including Advanced Research Projects Agency – Energy, the Energy Efficiency and Renewable Energy program, and the Office of Science, the bill places at risk U.S. competitiveness in technologies and expanding markets such as electric vehicles and batteries, new “drop-in” hydrocarbon biofuels, cost-saving energy-efficient systems for homes and businesses, advanced manufacturing materials and processes, and cost-competitive solar energy and offshore wind power.
Climate Research. The funding level for the Office of Science’s Biological and Environmental Research program would hamper the Administration’s efforts to conduct and support scientific research on the relationship between energy production and the environment. The Administration also strongly disagrees with the Committee Report suggestion that climate and atmospheric research are unrelated to DOE’s core basic science mission.
Innovative Technology Loan Guarantee Program (Title XVII). The bill significantly reduces credit subsidy budget authority for the Title XVII Loan Guarantee Program, which helps finance renewable energy and efficient end-use projects. The bill also does not provide any additional loan volume authority for nuclear power projects or any of the requested funds for a new Better Building Pilot Loan Guarantee Program. These programs are an important part of the Nation’s efforts to deploy innovative clean energy technologies, and these reductions may slow progress toward a clean energy future.
Yucca Mountain License. Continued funding of the Yucca Mountain license application will divert funds from the Nation’s efforts to advance fuel cycle technologies and develop waste management options. The Administration has established a Blue Ribbon Commission to inform the development of a new strategy for nuclear waste management and disposal.
Environmental Management. The level of resources in the bill may affect DOE’s ability to meet its goals for cleaning up legacy waste from its nuclear programs.
Nuclear Posture Review Goals and Maintaining a Safe, Secure and Effective Nuclear Deterrent. The Administration objects to the funding reduction in Title III, Weapons Activities, which will delay the achievement of a number of important Nuclear Posture Review (NPR) goals. The full request supports the Administration’s commitment to modernization of the nuclear weapons complex made in the NPR and reaffirmed as part of the New START treaty ratification process.
Defense Nuclear Nonproliferation. The Administration objects to funding reductions in Title III, Defense Nuclear Nonproliferation in the Fissile Materials Disposition and Highly Enriched Uranium (HEU) Reactor Conversion. These reductions will undermine U.S. ability to begin disposing plutonium in 2018 and delay efforts to reduce usage of HEU in nuclear reactors worldwide.
Corps of Engineers (Corps)
Construction and New Starts. The bill provides excess funding for the Corps’ construction program while also underfunding some of the highest priority construction projects, including the South Florida Ecosystem Restoration Program, a nationally significant effort that includes the Everglades. The bill’s “no new start” prohibition would preclude funding the limited number of priority new starts in the President’s Budget, including an important new program to reverse damage to the coastal Louisiana ecosystem and a study called for by the Congress to examine flood risks nationwide in order to improve existing programs.
Department of the Interior, Bureau of Reclamation
Indian Water Rights Settlements. Absorbing funding for Indian water settlements in the Bureau’s primary funding account would limit the Bureau’s ability to fund other high priority programs, such as its water conservation activities.
San Joaquin Rescission. Rescinding unobligated balances from the San Joaquin Restoration Fund would undermine the San Joaquin River Restoration Settlement’s goals to restore and maintain fish populations and reduce or avoid water supply impacts.
Department of Transportation, Federal Railroad Administration
High Speed Rail Balances. The Administration opposes the rescission of unobligated balances that have already been competitively awarded to projects across the country. These projects will create jobs and make needed improvements to the intercity passenger rail network. Rescinding funds now would significantly disrupt States’ planning and construction efforts, which count on their committed amounts.
The bill includes the following problematic policy and language issues:
Clean Water Act. Section 109 of the bill would stop an important Administration effort to provide clarity around which water bodies are covered by the Clean Water Act. The Administration’s work in this area will help to protect the public health and economic benefits provided to the American public by clean water, while also bringing greater certainty to business planning and investment and reducing an ongoing loss of wetlands and other sensitive aquatic resources. The existing regulations were the subject of two recent Supreme Court cases, in which the Court itself indicated the need for greater regulatory clarity regarding the appropriate scope of the Clean Water Act jurisdiction.
Fighting Fraud, Waste, and Abuse. The Administration is concerned with sections 606 and 607 of the bill and looks forward to working with the Congress to achieve the intended purpose of protecting the interest of the Nation’s taxpayers, which is consistent with the Administration’s efforts to fight fraud, waste, and abuse in Federal contracts, grants, and other Federal assistance.
Innovative Technology Loan Guarantee Program (Title XVII). Section 312 of the bill, requiring release of pre-decisional, business-sensitive information, could negatively impact the Title XVII loan program, potential applicants, and related private-sector entities. Not protecting business-sensitive information of applicants to the program could have significant market implications for the companies and could encourage “gaming the system” by applicants, including by discouraging them from sharing information with the Department which is critical to ensuring the Government establishes accurate cost estimates.
Regulatory Restriction. Section 313 of the bill unnecessarily limits and delays the Department’s activities on regulations as defined under Executive Order 12866 for energy efficient appliances and potentially other regulatory activities.
The Administration looks forward to working with the Congress as the fiscal year 2012 appropriations process moves forward.
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OBAMA ADMINISTRATION OFFERS ADDITIONAL MORTGAGE RELIEF TO UNEMPLOYED HOMEOWNERS
Adjustments to FHA and MHA requirements to allow 12-month Forbearances
(Washington, DC)- Today, the Obama Administration announced adjustments to Federal Housing Administration (FHA) requirements that will require servicers to extend the forbearance period for unemployed homeowners to 12 months. The Administration also intends to require servicers participating in the Making Home Affordable Program (MHA) to extend the minimum forbearance period to 12 months wherever possible under regulator and investor guidelines. These adjustments will provide much needed assistance for unemployed homeowners trying to stay in their homes while seeking re-employment. These changes are intended to set a standard for the mortgage industry to provide more robust assistance to unemployed homeowners in the economic downturn.
The changes to FHA’s Special Forbearance Program announced today will require servicers to extend the forbearance period for FHA borrowers who qualify for the program from four months to 12 months and remove upfront hurdles to make it easier for unemployed borrowers to qualify.
“The current unemployment forbearance programs have mandatory periods that are inadequate for the majority of unemployed borrowers,” U.S. Housing and Urban Development Secretary Shaun Donovan said. “Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home.”
Changes to MHA’s Home Affordable Unemployment Program (UP) will require participating servicers to extend the minimum forbearance period from 3 months to 12 months for eligible unemployed homeowners, whenever possible subject to investor and regulator guidance for each mortgage loan. Additionally, forbearance under UP will become available to borrowers who are seriously delinquent.
All FHA-approved servicers must participate in FHA’s Loss Mitigation Program, which includes the Special Forbearance program. In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option. If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.
These reforms build on successful Administration initiatives to support unemployed borrowers through the $7.6 billion Hardest Hit Fund and the $1 billion Emergency Homeowner Loan Program (EHLP). The Hardest Hit Fund, first announced in February 2010, provides support to 18 states and the District of Columbia, which represent the areas hardest hit by steep home price declines and unemployment, to design and implement programs to help struggling homeowners avoid foreclosure. Participating states have dedicated approximately seventy percent of program funds toward programs to help homeowners struggling with unemployment or underemployment. As of this month, each participating state is accepting applications from borrowers and providing direct mortgage assistance to those that qualify.
The EHLP program complements the Hardest Hit Fund, by serving the remaining 32 states and Puerto Rico. Congress provided $1 billion dollars to HUD, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to implement the recently launched program. EHLP assists homeowners who have experienced a reduction in income and are at risk of foreclosure due to involuntary unemployment, underemployment due to economic conditions or a medical condition. EHLP is expected to aid up to 30,000 distressed borrowers, with an average loan of approximately $35,000.