has been pitted by the government against the peaceful protesters and if it is, is there any red line that your administration won't cross where that offer will be shut off? >> well, obviously what's happened in iran is profound. and we're still waiting to see how it plays itself out. my position coming into this office has been that the united states has coronation security interests in making sure iran doesn't possess a nuclear weapon and stops exporting terrorism out of its borders. we have provided a path whereby iran can reach out to the international community, engage and become a part of international norms. it is up to them to make a decision as to whether they choose that path. what we've been seeing over the last several days, the last

couple of weeks, obviously is not encouraging in terms of the path that this regime may choose to take. and the fact that they are now in the midst of an extraordinary debate taking place in iran may end up coloring how they respond to the international community as a whole. we are going to monitor and see how this plays itself out before we make any judgments about how we proceed. but just to reiterate, there is a path available to iran in which their sovereignty is respected, their traditions, their culture, their faith is respected but one in which they are part of a larger community that has responsibilities and operates according to norms and international rules that are universal. we don't know how they're going

to respond yet and that's what we're waiting to see. >> should there be consequences for what's happened so far? >> i think that the international community is, as i said before, bearing witness to what's taking place. and the iranian government should understand that how they handle the dissent within their own country generated indigenously, internally from the iranian people, will help shape the tone not only for iran's future but alsoity relationship to other countries. since we're on iran, i know niko pitny is here. i know that you and all across the internet we've been seeinging a lot of reports coming directly out of iran. i know that there may actually be questions from people in iran who are communicating

through the internet. do you have a question? >> yeah, i did, but i wanted to use this opportunity to ask you a question directly from an iranian. we've solicited questions last night from people who were still courageous enough to be communicating online and one of them wanted to ask you this. under which conditions would you accept the election of ahmadinejad and if you do accept it without any significant changes in the conditions there, isn't that a betrayal of what the demonstrators there are working toward? >> well, look, we didn't have international observers on the ground, we can't say definitively what exactly happened at polling places throughout the country. what we know is that a sizable percentage of the iranian people themselves spanning iranian society consider this election illegitimate.

it's not an isolated incidence, little grumbling here or there, there is significant questions about the legitimacy of the election. and so ultimately the most important thing for the iranian government to consider is legitimacy in the eyes of its own people. not in the eyes of the united states. and that's why i've been very clear, ultimately this is up to the iranian people to decide who their leadership is going to be and the structure of their government. what we can do is to say unequivocally that there are sets of international norms and principles about violence, about dealing with the peaceful dissent that spans cultures, spans borders and what we've been seeing over the internet and what we've been seeing in news reports, violates those norms and violates those

principles. i think it is not too late for the iranian government to recognize that there is a peaceful path that will lead to stability and legitimacy and prosperity for the iranian people. we hope they take it. >> switching gears slightly. in line of the financial regulation and reform issue, how did you rate the performance of the fed in handling the financial crisis and more specifically, how do you rate the performance of ben bernanke and would you like him to stay on? >> i'm not going to make news about ben bernanke. although i think he has done a fine job under a very difficult circumstance -- under very difficult circumstances. i would say that all financial regulators didn't do everything

that needed to be done to prevent the crisis from happening. and that's why we've put forward the boldest set of reforms in financial regulation in 75 years. because there were too many gaps where there were laws on the books that would have brought about a prevention of the crisis, the enforcement wasn't there. in some wayses -- cases there just weren't sufficient laws on the books, for example, with the nonbanking sector. i think that the fed probably performed better than most other regulators prior to the crisis taking place. but i think they'd be the first to acknowledge that in dealing with systemic risk and anticipating systemic risk they didn't do everything that kneed to be done. i think -- needed to be done. i think since the crisis has occurred, ben bernanke has

performed very well and one of the central concepts behind our financial regulatory reform is that there's got to be somebody who is responsible not just for monitoring the health of individual institutions but somebody who is monitoring the systemic risks of the system as a whole. and we believe -- believe that the fed has the most technical expertise and the best practical -- track record in terms of doing that. but that's not the only part of financial regulation. one of the things that we're putting a huge amount of emphasis on is the issue of consumer protection. whether it's subprime loans that were given out because nobody was paying attention to what was being peddled to consumers, whether it's how credit cards are handled, how annuities are dealt with, what people can expect in terms of understanding their 401-k's, there's a whole bunch of

financial transactions out there where consumers are not protected the way they should and that's why we said we're going to put forward a consumer financial protection agency whose only job it is to focus on those issues. now, the fed was one of the regulators that had some of those consumer responsibilities . we actually think that they're better off focusing on issues of broad systemic risk and we have just one agency that's focused on the consumer protection side. >> is that getting too powerful? >> if you look at what we've proposed, we are not so much expanding the fed's power as we are focusing what the fed needs to do to prevent the kinds of crises that are happening again. another good example is the issue of resolution authority. it wasn't that long ago where everybody was properly outraged

about a.i.g. and the enormous amounts of money the taxpayers had to put into a.i.g. in order to prevent it from dragging the entire financial system down with it. had we had the kinds of resolution authority, the kinds of law that were in place that would allow an orderly winding down of a.i.g. then potentially taxpayers could have saved a huge amount of money. we want that power to be available so that taxpayers aren't on the hook. major garrett. >> in your opening remarks, sir, you said about iran that you were appalled and outraged. what took you so long to say those words? >> i don't think that's accurate. track what i've been saying. right after the election i said that we had profound concerns

about the nature of the election. but that it was not up to us to determine what the outcome was. as soon as violence broke out, in fact, in anticipation of potential violence, we were very clear in saying that violence was unacceptable. that that was not how governments operate with respect to their people. so we've been entirely consistent, major, in terms of how we've approached this. my rule has been to say, the united states is not going to be a force for the iranian government to try to blame what's happening on the streets of tehran on the c.i.a. or on the white house, that this is an issue that is led by and given voice to the frustrations of the iranian people and so we've been very consistent the first day and we're going to continue to be consistent in saying this is not an issue about the united states, this is about an issue of the iranian people. what we've also been consistent

about is saying that there are some universal principles, including freedom of assembly and freedom of speech, making sure that governments are not using coercion and violence and repression in terms of how they interact with peaceful demonstrators and we've been speaking out very clearly about that fact. >> are diplomats still welcome at the assembly on the fourth of july, sir? >> i think as you're aware, major, we don't have formal diplomatic relations with -- we don't have formal -- we don't have formal diplomatic relations with iran. i think that we have said that if iran chooses a path that abides by international norms and principles then we are interested in keeling -- healing some of the wounds of 30 years in terms of u.s.-iranian relations. but that is a choice that the

iranians are going to have to make. >> the offer still stands? >> that's a choice the iranians are going to have to make. >> two of the key players of the insurance industry, america's health insurance plans and blue cross, blue shield, sent a letter to the senate saying that government health insurance plan would dismantle private insurers. why are they wrong and is this public plan nonnegotiable? >> let's talk about health care reform more broadly. i think in this debate there's been some notion that if we just stand pat we're ok. and that's just not true. you know, there are polls out that show that 70% or 80% of americans are satisfied with the health insurance that they currently have. the only problem is that premiums have been doubling every nine years. going up three times faster

than wages. the u.s. government is not going to be able to afford medicare and medicaid on its current trajectory. businesses are having to make very tough decisions about whether we drop coverage or with we further restrict coverage. so the notion that somehow we can just keep on doing what we're doing and that's ok -- that's just not true. we have a long-standing critical problem in our health care system that is pulling down our economy, it's burdening families, it's burdening businesses and it is the primary driver of our federal deficits. all right. so if we start from the premise that the status quo is unacceptable, then that means we're going to have to bring about some serious changes. what i've said is our top priority has to be to control costs. and that means not just tinkering around the edges, it

doesn't mean just lobbing off reimbursements for doctors on any given year because we're trying to fix our budget. it means that we look at the kinds of incentives that exist, what our deliver system is like -- delivery system is like, why it is that some communities are spending $30 -- 30% less than other communities but getting better health care yao cut -- outcomes and trying to make sure everybody is benefiting from lower costs and better quality by improving practices. it means health i.t., it means prevention. all these things are the starting point, i think, for reform and i've said very clearly, if any bill arrives from congress that is not controlling cost, that's not a bill i can support. it's going to have to control costs. it's going to have to be paid for. so there's been a lot of talk about well, $1 trillion price tag. what i've said is, if we're going to spend that much money then it's going to be largely

funded through reallocating dollars that are already in the health care system but aren't being spent well. if we're spending $177 billion over 10 years to subsidize insurance companies under medicare advantage when there's no showing that people are healthier using that program than the regular medicare program, well, that's not a good deal for taxpayers and we're going to take that money and use it to provide better carat a cheaper cost to the american people. so that's point number one. number two, while we are in the process of dealing with the cost issue, i think it's also wise policy and the right thing to do to start providing coverage for people who don't have health insurance or are underinsured, are paying a lot of money for high deductibles.

i get two, three letters a day that i read of families who don't have health insurance, are going bankrupt, are on the brink of losing their insurance, have deductibles that are so high that even with insurance they end up with $50,000, $100,000 worth of debt, are at risk of losing their homes and that has to be part of reform. making sure that even if you've got health insurance now, you are not worried that when you lose your job or your employer decides to change policies that somehow you're going to be out of luck. i think about the woman who was in wisconsin that i was with who introduced me up in green bay. 36 years old, double mastectomy, breast cancer has now moved to her bones and she's got two little kids, a husband with a job, they had health insurance but they're still $50,000 in debt and she's thinking, my main legacy if i don't survive this thing is going to be leaving $100,000 worth of debt. so those are the things that

i'm prioritizing. now, the public plan i think is an important tool to discipline insurance companies. what we've said is, under our proposal, let's have a system, the same way that federal employees do, same way that members of congress do, where we call it an exchange but you can call it a marketplace where essentially you've got a whole bunch of different plans. if you like your plan and you like your doctor you won't have to do a thing. you keep your plan. you keep your doctor. if your employer is providing you good health insurance, terrific, we're not going to mess with it. but, if you're a small business person, if the insurance neas being offered is something you can't afford, if you want to shop for a better price then you can go to this exchange, this marketplace, and you can, look, ok, this is how much this plan costs, this is how much

that plan costs, this is what the coverage is like, this is what fits for my family. as one of those options, for us to be able to say, here's a public option that's not profit-driven, that can keep down administrative costs and that provides you good quality care for a reasonable price as one of the options for you to choose, i think that makes sense. >> drive insurance out of business? >> why would it? if private insurers say that the marketplace provides the best quality health care, if they tell us that they're offering a good deal, then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business? that's not logic. now, i think that there's going to be some healthy debates in congress about the shape that this takes. i think there can be some legitimate concerns on the part of private insurers that if any

public plan is simply being subsidized by taxpayers endlessly that in over time they can't compete with the government just precipitationing money so there are going to be some legitimate debates to be had about how this private plan takes shape. but just conceptionly the notion that all these insurance companies who say they're giving consumers the best possible deal, that they can't compete against a public plan as one option with consumers making the decision what's the best deal, that defies logic, which is why i think you've seep in the polling data overwhelming support for a public plan. >> that's nonnegotiable? >> chip. >> thank you, mr. president. following up on major's question, some republicans on capitol hill, john mccain and lindsay graham, for example, have said that up to this point your response on iran has been

timid and weak. today it sounded a lot stronger. it sounded like the kind of speech john mccain has been urging to you give saying that those who stand up for justice are always on the right side of history. referring to an iron fist in iran. deplored, appalled, outraged. were you influenced at all by john mccain and lindsay graham accusing you of being timid and weak? >> what do you think? [laughter] look, i think john mccain has genuine passion about many of these international issues. and, you know, i think that all of us share a belief that we want justice to prevail. but only i'm the president of the united states. and i've got responsibilities in making certain that we are continually advancing our

national security interests and that we are not used as a tool to be exploited by other countries. i mean, you guys must have seen the reports. they've got some of the comments that i've made being mistranslated in iran suggesting that i'm telling rioters to go out and riot some more. there are reports suggesting that the c.i.a. is behind all this. all of which are patently false. but it gives you a sense of the narrative that the iranian government would love to play into. so members of congress, they've got their constitutional duties and i'm sure they will carry them out in the way they think is appropriate. i'm president of the united states and i'll carry out my duties as i think are appropriate.

>> speaking so strongly today, aren't you giving the leadership in iran the fadder to make those arguments? >> look, i mean i think that we can paris this as much as we want. if you look at the statements that i've made, they've been very consistent. i just made a statement on saturday in which we said, we deplor the violence. and so i think that in the hot house of washington there may be all kinds of stuff going back and forth in terms of republican critics versus the administration. that's not what is relevant to the iranian people. what's relevant to them right now is are they going to have their voices heard and, frankly, a lot of them aren't paying a lot of attention to what's being said on capitol hill and probably aren't spending a lot of time thinking about what's being said here. they're trying to figure out how can they make sure justice is served in iran. >> no adjusting your statement today? >> mr. president, i want to follow up on iran. you have avoided twice spelling

out consequences. you hinted that there would be from the international community if they continued so to violate, you said, violate these norm. you hint that there are human vites ryeslations taking place. >> i'm not hinting. when a young woman gets shot in the street when she gets out of her car, that's a problem. >> so why won't you spell out the consequences? >> because we don't know how this thing is going to play out. i know everybody here is on a 24-hour news cycle. i'm not. ok? >> i mean, shouldn't -- >> i answered -- i answered the question, chuck, which is that we don't yet know how this is going to play out. ok. >> thank you, mr. president. before i ask my question, i wanted to end david's, is the public plan nonnegotiable? >> that's your question. are you the ombudsman for the white house press corps? what's -- is that your

question? >> i have a two-part question. is the public plan nonnegotiable? and while i appreciate your plangwadge about the logic of the health care plan, the public plan, investing logical to a lot of people that if the government is offering a cheaper health care plan then lots of employers will want to have their employees covered by that cheaper plan which will not have to be for profit, unlike private plans and may possibly benefit from some government subsidies, who knows, and then their employees would be signed up for this public plan which would violate what you're promising the american people, that they will not have to change health care plans if they like the plan they have. >> ok. you're pitching, i'm catching. i got the question. first of all, was the reference to spock, is that a crack on my ears? all right. i just want to make sure.

>> i would never make fun of your ears, sir. >> in answer to david's question which you co-opted, we are still early in this process. so we have not drawn lines in the sand other than that reform has to control costs. and that it has to provide relief to people who don't have health insurance or are underinsured. those are the broad parameters that we've discussed. there are a whole host of other issues where ultimately i may have a strong opinion and i will express those to members of congress as this is shaping up. it's too early to say that. right now i will say that our position is that a public plan makes sense. now, let me go to the broader question you made about the public plan. as i said before, i think that there is a legitimate concern if the public plan was simply

eating off the taxpayer trough. that it would be hard for private insurers to compete. if on the other hand the public plan is structured in such a way where they've got to collect premiums and they've got to provide good services, then if what the insurance companies are saying is true, that they're doing their best to serve their customers, that they're in the business of keeping people well and giving them security when they get sick, they should be able to compete. now, if it turns out that the public plan, for example, is able to reduce administrative costs significantly then, you know what? i'd like the insurance companies to take note and say, hey, if the public plan can do that, why can't we? and that's good for everybody in the system. and i don't think there should be any objection to that.

now, by the way, i should point out that part of the reform that we've suggested is that if you want to be a private insurer as part of the exchange, as part of this marketplace, this menu of options that people can choose from, we're going to have some different rules for all insurance companies. one of them being that you can't preclude people from getting health insurance because of a preexisting condition. you can't cherry pick and just take the healthiest people. so there be -- there are going to be ground rules that apply to all insurance companies because the american people understand that too often insurance companies have been spending more time thinking about how to take premiums and then avoid providing people coverage than they have been thinking about how can we make sure that insurance is there, health care is there, when families need it? but, you know, i'm confident that if, you know, i take those

advocates of the free market to heart when they say that the free market is innovative and is going to compete on service and is going to compete on their ability to deliver good care to families. and if that's the case then this just goings -- becomes one more option. if the not the case then i think that that's something that the american people should know. all right. >> what about keeping your promise to the -- proposition to the american people that they won't have to change plans even if employers -- >> when i say if you have your plan and you like it and your doctor has a plan or you have a doctor and you like your doctor that you don't have to change plans, what i'm saying is, the government is not going to make you change plans under health reform. now, are there going to be employers right now, assuming we don't do anything, let's say that we take the advice of some folks who are out there and

say, oh, this is not the time to do health care, we can't afford it, it's too complicated, let's take our time, etc. let's assume that nothing happened. i can guarantee you that there's the possibility for a whole lot of americans out there that they're not going to end up having the same health care they have because what's going to happen is, as costs keep going up, employers are going to start making decisions, we've got to raise premiums on our employees. in some cases we can't provide health insurance at all and so there are going to be a whole set of changes out there. that's exactly why health reform is so important. margaret. >> thank you, mr. president. as a former smoker, i understand the frustration and the fear that comes with quitting. but with the new law that you signed yesterday regulating to the tobacco industry, i'd like to ask you a few questions, how many cigarettes a day -- >> a few questions? >> how many