Obama @ House Republican Retreat

Don't miss this excellent Q&A and talk by President Obama to the House Republican Retreat on 1/29/10:
http://www.huffingtonpost.com/2010/01/29/transcript-of-president-o_n_442423.html

The whole thing is quite long, but below is a portion of the Q&A:

THE PRESIDENT: But let's talk about just the jobs environment generally. You're absolutely right that when I was sworn in the hope was that unemployment would remain around 8 [percent], or in the 8 percent range. That was just based on the estimates made by both conservative and liberal economists, because at that point not all the data had trickled in.

We had lost 650,000 jobs in December. I'm assuming you're not faulting my policies for that. We had lost, it turns out, 700,000 jobs in January, the month I was sworn in. I'm assuming it wasn't my administration's policies that accounted for that. We lost another 650,000 jobs the subsequent month, before any of my policies had gone into effect. So I'm assuming that wasn't as a consequence of our policies; that doesn't reflect the failure of the Recovery Act. The point being that what ended up happening was that the job losses from this recession proved to be much more severe -- in the first quarter of last year going into the second quarter of last year -- than anybody anticipated.

So I mean, I think we can score political points on the basis of the fact that we underestimated how severe the job losses were going to be. But those job losses took place before any stimulus, whether it was the ones that you guys have proposed or the ones that we proposed, could have ever taken into effect. Now, that's just the fact, Mike, and I don't think anybody would dispute that. You could not find an economist who would dispute that.

Now, at the same time, as I mentioned, most economists -- Republican and Democrat, liberal and conservative -- would say that had it not been for the stimulus package that we passed, things would be much worse. Now, they didn't fill a 7 million hole in the number of people who were unemployed. They probably account for about 2 million, which means we still have 5 million folks in there that we've still got to deal with. That's a lot of people.

The package that we put together at the beginning of the year, the truth is, should have reflected -- and I believe reflected what most of you would say are common sense things. This notion that this was a radical package is just not true. A third of them were tax cuts, and they weren't -- when you say they were "boutique" tax cuts, Mike, 95 percent of working Americans got tax cuts, small businesses got tax cuts, large businesses got help in terms of their depreciation schedules. I mean, it was a pretty conventional list of tax cuts. A third of it was stabilizing state budgets.

There is not a single person in here who, had it not been for what was in the stimulus package, wouldn't be going home to more teachers laid off, more firefighters laid off, more cops laid off. A big chunk of it was unemployment insurance and COBRA, just making sure that people had some floor beneath them, and, by the way, making sure that there was enough money in their pockets that businesses had some customers.

You take those two things out, that accounts for the majority of the stimulus package. Are there people in this room who think that was a bad idea? A portion of it was dealing with the AMT, the alternative minimum tax -- not a proposal of mine; that's not a consequence of my policies that we have a tax system where we keep on putting off a potential tax hike that is embedded in the budget that we have to fix each year. That cost about $70 billion.

And then the last portion of it was infrastructure which, as I said, a lot of you have gone to appear at ribbon-cuttings for the same projects that you voted against.

Now, I say all this not to re-litigate the past, but it's simply to state that the component parts of the Recovery Act are consistent with what many of you say are important things to do -- rebuilding our infrastructure, tax cuts for families and businesses, and making sure that we were providing states and individuals some support when the roof was caving in.

And the notion that I would somehow resist doing something that cost half as much but would produce twice as many jobs -- why would I resist that? I wouldn't. I mean, that's my point, is that -- I am not an ideologue. I'm not. It doesn't make sense if somebody could tell me you could do this cheaper and get increased results that I wouldn't say, great. The problem is, I couldn't find credible economists who would back up the claims that you just made.

Now, we can -- here's what I know going forward, though. I mean, we're talking -- we were talking about the past. We can talk about this going forward. I have looked at every idea out there in terms of accelerating job growth to match the economic growth that's already taken place. The jobs credit that I'm discussing right now is one that a lot of people think would be the most cost-effective way for encouraging people to pick up their hiring.

There may be other ideas that you guys have; I am happy to look at them and I'm happy to embrace them. I suspect I will embrace some of them. Some of them I've already embraced.

But the question I think we're going to have to ask ourselves is, as we move forward, are we going to be examining each of these issues based on what's good for the country, what the evidence tells us, or are we going to be trying to position ourselves so that come November we're able to say, "The other party, it's their fault." If we take the latter approach then we're probably not going to get much agreement. If we take the former, I suspect there's going to be a lot of overlap. All right?

Q Mr. President, will you consider supporting across-the-board tax relief, as President Kennedy did?

THE PRESIDENT: Here's what I'm going to do, Mike. What I'm going to do is I'm going to take a look at what you guys are proposing. And the reason I say this, before you say, "Okay," I think is important to know -- what you may consider across-the-board tax cuts could be, for example, greater tax cuts for people who are making a billion dollars. I may not agree to a tax cut for Warren Buffet. You may be calling for an across-the-board tax cut for the banking industry right now. I may not agree to that.

So I think that we've got to look at what specific proposals you're putting forward, and -- this is the last point I'll make -- if you're calling for just across-the-board tax cuts, and then on the other hand saying that we're somehow going to balance our budget, I'm going to want to take a look at your math and see how that works, because the issue of deficit and debt is another area where there has been a tendency for some inconsistent statements. How's that? All right?

CONGRESSMAN RYAN: Say hi, everybody. (Laughter.) I serve as a ranking member of the budget committee, so I'm going to talk a little budget if you don't mind. The spending bills that you've signed into law, the domestic discretionary spending has been increased by 84 percent. You now want to freeze spending at this elevated beginning next year. This means that total spending in your budget would grow at 3/100ths of 1 percent less than otherwise. I would simply submit that we could do more and start now.

You've also said that you want to take a scalpel to the budget and go through it line by line. We want to give you that scalpel. I have a proposal with my home state senator, Russ Feingold, bipartisan proposal, to create a constitutional version of the line-item veto. (Applause.) Problem is, we can't even get a vote on the proposal.

So my question is, why not start freezing spending now, and would you support a line-item veto in helping us get a vote on it in the House?

THE PRESIDENT: Let me respond to the two specific questions, but I want to just push back a little bit on the underlying premise about us increasing spending by 84 percent.

Now, look, I talked to Peter Orszag right before I came here, because I suspected I'd be hearing this -- I'd be hearing this argument. The fact of the matter is, is that most of the increases in this year's budget, this past year's budget, were not as a consequence of policies that we initiated but instead were built in as a consequence of the automatic stabilizers that kick in because of this enormous recession.

So the increase in the budget for this past year was actually predicted before I was even sworn into office and had initiated any policies. Whoever was in there, Paul -- and I don't think you'll dispute that -- whoever was in there would have seen those same increases because of, on the one hand, huge drops in revenue, but at the same time people were hurting and needed help. And a lot of these things happened automatically.

Now, the reason that I'm not proposing the discretionary freeze take into effect this year -- we prepared a budget for 2010, it's now going forward -- is, again, I am just listening to the consensus among people who know the economy best. And what they will say is that if you either increase taxes or significantly lowered spending when the economy remains somewhat fragile, that that would have a destimulative effect and potentially you'd see a lot of folks losing business, more folks potentially losing jobs. That would be a mistake when the economy has not fully taken off. That's why I've proposed to do it for the next fiscal year. So that's point number two.

With respect to the line-item veto, I actually -- I think there's not a President out there that wouldn't love to have it. And I think that this is an area where we can have a serious conversation. I know it is a bipartisan proposal by you and Russ Feingold. I don't like being held up with big bills that have stuff in them that are wasteful but I've got to sign because it's a defense authorization bill and I've got to make sure that our troops are getting the funding that they need.

I will tell you, I would love for Congress itself to show discipline on both sides of the aisle. I think one thing that you have to acknowledge, Paul, because you study this stuff and take it pretty seriously, that the earmarks problem is not unique to one party and you end up getting a lot of pushback when you start going after specific projects of any one of you in your districts, because wasteful spending is usually spent somehow outside of your district. Have you noticed that? The spending in your district tends to seem pretty sensible.

So I would love to see more restraint within Congress. I'd like to work on the earmarks reforms that I mentioned in terms of putting earmarks online, because I think sunshine is the best disinfectant. But I am willing to have a serious conversation on the line-item veto issue.

CONGRESSWOMAN CAPITO: Thank you, Mr. President, for joining us here today. As you said in the State of the Union address on Wednesday, jobs and the economy are number one. And I think everyone in this room, certainly I, agree with you on that.

I represent the state of West Virginia. We're resource-rich. We have a lot of coal and a lot of natural gas. But our -- my miners and the folks who are working and those who are unemployed are very concerned about some of your policies in these areas: cap and trade, an aggressive EPA, and the looming prospect of higher taxes. In our minds, these are job-killing policies. So I'm asking you if you would be willing to re-look at some of these policies, with a high unemployment and the unsure economy that we have now, to assure West Virginians that you're listening.

THE PRESIDENT: Look, I listen all the time, including to your governor, who's somebody who I enjoyed working with a lot before the campaign and now that I'm President. And I know that West Virginia struggles with unemployment, and I know how important coal is to West Virginia and a lot of the natural resources there. That's part of the reason why I've said that we need a comprehensive energy policy that sets us up for a long-term future.

For example, nobody has been a bigger promoter of clean coal technology than I am. Testament to that, I ended up being in a whole bunch of advertisements that you guys saw all the time about investing in ways for us to burn coal more cleanly.

I've said that I'm a promoter of nuclear energy, something that I think over the last three decades has been subject to a lot of partisan wrangling and ideological wrangling. I don't think it makes sense. I think that that has to be part of our energy mix. I've said that I am supportive -- and I said this two nights ago at the State of the Union -- that I am in favor of increased production.

So if you look at the ideas that this caucus has, again with respect to energy, I'm for a lot of what you said you are for.

The one thing that I've also said, though, and here we have a serious disagreement and my hope is we can work through these disagreements -- there's going to be an effort on the Senate side to do so on a bipartisan basis -- is that we have to plan for the future.

And the future is that clean energy -- cleaner forms of energy are going to be increasingly important, because even if folks are still skeptical in some cases about climate change in our politics and in Congress, the world is not skeptical about it. If we're going to be after some of these big markets, they're going to be looking to see, is the United States the one that's developing clean coal technology? Is the United States developing our natural gas resources in the most effective way? Is the United States the one that is going to lead in electric cars? Because if we're not leading, those other countries are going to be leading.

So what I want to do is work with West Virginia to figure out how we can seize that future. But to do that, that means there's going to have to be some transition. We can't operate the coal industry in the United States as if we're still in the 1920s or the 1930s or the 1950s. We've got to be thinking what does that industry look like in the next hundred years. And it's going to be different. And that means there's going to be some transition. And that's where I think a well-thought-through policy of incentivizing the new while recognizing that there's going to be a transition process -- and we're not just suddenly putting the old out of business right away -- that has to be something that both Republicans and Democrats should be able to embrace.

--jump to end--

Now, I just want to point out -- and this brings me to the second problem -- when we made a very modest proposal as part of our package, our health care reform package, to eliminate the subsidies going to insurance companies for Medicare Advantage, we were attacked across the board, by many on your aisle, for slashing Medicare. You remember? We're going to start cutting benefits for seniors. That was the story that was perpetrated out there -- scared the dickens out of a lot of seniors.

No, no, but here's my point. If the main question is going to be what do we do about Medicare costs, any proposal that Paul makes will be painted, factually, from the perspective of those who disagree with it, as cutting benefits over the long term. Paul, I don't think you disagree with that, that there is a political vulnerability to doing anything that tinkers with Medicare. And that's probably the biggest savings that are obtained through Paul's plan.

And I raise that not because we shouldn't have a series discussion about it. I raise that because we're not going to be able to do anything about any of these entitlements if what we do is characterized, whatever proposals are put out there, as, well, you know, that's -- the other party is being irresponsible; the other party is trying to hurt our senior citizens; that the other party is doing X, Y, Z.

That's why I say if we're going to frame these debates in ways that allow us to solve them, then we can't start off by figuring out, A, who's to blame; B, how can we make the American people afraid of the other side. And unfortunately, that's how our politics works right now. And that's how a lot of our discussion works. That's how we start off -- every time somebody speaks in Congress, the first thing they do, they stand up and all the talking points -- I see Frank Luntz up here sitting in the front. He's already polled it, and he said, you know, the way you're really going to -- I've done a focus group and the way we're going to really box in Obama on this one or make Pelosi look bad on that one -- I know, I like Frank, we've had conversations between Frank and I. But that's how we operate. It's all tactics, and it's not solving problems.

And so the question is, at what point can we have a serious conversation about Medicare and its long-term liability, or a serious question about -- a serious conversation about Social Security, or a serious conversation about budget and debt in which we're not simply trying to position ourselves politically. That's what I'm committed to doing. We won't agree all the time in getting it done, but I'm committed to doing it.