in 2003 through 2005, at cost of a tremendous number of jobs on the basis of national interest. if we have an issue on the national interest, let this nation pay for it, as opposed to the united steelworkers. the second part of the question that is related, is that, when china got into the world trade organization -- which 15 of us were against, they had bilateral treaties. they have not lived up to their obligations to open their markets to us. they take the markets and the jobs from us. would you support the effort to revoke those -- this bilateral treaty that gives them such an unfair trading advantage? thank you. >> i would not be in favor of revoking the trade relationships

that we have established with china. i have shown myself during the course of this year more than willing to enforce the trade agreements in a much more serious way. at times, i have been criticized for this. there was a case involved -- involving foreign tires. we said -- this was an example of where we have to put the foot down, and show that we are serious about enforcement. that caused the usual fuss at the international level, but this was the right thing to do. .

that is a problem. it has to be confronted. so the approach we are taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on china and other countries to open up their markets in reciprocal ways. one of the challenges that we have to address internationally is currency rates and how they match up, to make sure that our goods areçóñi not artificially inflated -- inflated in price and those are artificially

deflated in price. that puts us at a competitive disadvantage. what i do not want to do is for usñiñi as a country or as a paro shy away from the prospects of international competition. i think we have the best workers on earth. the most innovative products on earth. ñiñiif we are able to compete on even playing field. then nobody can beat us. and that will create jobs in the united states. if we increase our exports to asia by a percentage point, by a fraction, it would mean hundreds of thousands or millions of jobs in the u.s.. that is easily doable. that is why we will put a much bigger emphasis on export promotion "or the next several years.

that includes medium and small size companies as well asñi lare ones. i was in new hampshire yesterday. use of a terrifict( neg =5a9eì(+ tq had jus. it only has 13 or 14 employees. rng techniques for the component parts in l.e.d. light bulbs, potentially could lower the price of l.e.d. lights pope's in half. these folksñr could potentially market not just in theçóñr u.t#t this is a technology that could end up being sent around a world. çóñi

>> michael bennett, colorado. >> thanks for coming, mr. president. you spoke to the state of the union very well about a number of the challenges we face as a country, which are serious. even before we were dragged into the recession since the great depression, this is the first time middle-class family in, excelled. there were no net jobs created since 1998. household wealth was the same at the end of the decade as it was at the beginning. an education system that is not working well enough for our children. 1.4 trillion dollar deficit and

12 trillion dollar debt. in colorado we talk about how our children will have to pay this back. my daughter c she walked out with me and said, just so you know, i am not paying that back. she has the right attitude, i think. [laughter] at the same time, this place looks broken to the american people. our ability to make these decisions, is open to enormous question in the wake of the health care question in particular. a woman the other day in colorado axed where she could get her life fixed in washington? what are you going to do differently and what all we wanted to as democrats and republicans to fix this institution sold our democracy can withstand the test we are

facing? having served in the senate and now seeing it from the perspective of the white house, let me make a couple of observations. first, whenever people ask me why isn't washinton working, i am a fierce defender of the integrity and hard work of individual members. that is matched up, by the way, when you look at the polls, people hate congress, but individual members, a lot of them feel are working hard on their behalf. so the problem is you have an institution that increasingly is not adapted to the demands of a hugely competitive 21st century economy. i think the senate in particular, the challenge that i

gave to republicans and i will continue to issue to republicans is if you want to govern, then you cannot just say no. it cannot just be about scoring points. there are multiple advances during the course of this year in which that has been the case. i mentioned the filibuster record. we hawe had scores of pieces of legislation which there was a filibuster, culture had to be involved, then it ended up passing 90 to 10 or 80 to 15. what that indicates is the degree to which we are just trying to come up the works instead of just getting business done. that is an institutional problem.

in the senate, the filibuster only works if there's a genuine spirit of compromise and try to solve problems as opposed to just shutting the place down. if it is just shutting the place down, it's not going to work. my second point, in terms of how operate as democrats, i do think that's the more open we are, or transparent we are, the more people know exactly how things are working even if sometimes it takes longer to maintain that transparency, the better off we are. i think the health care bill is a perfect example. if the truth of the matter is the process looked painful and messy. and a marble hearings that were held did give an opportunity for the product to get refined so that i think the ultimate

package after potential negotiations between the house and senate is better than where we started. there was a possibility and continues to be a possibility to begin discussions with the american people about what exactly that bill accomplishes. on the other hand -- and i take some fault for this -- at the end of the process, when we were fighting through on these filibuster's and try to get it done quickly so that we could pivot and start talking about other issues that were so important to the american people, some of that transparency got lost. i think we paid the price for it. so it is important to constantly have our cards out on the table. and welcome challenges and questions. the republicans say that they can't insure every american for free-- can insure at no cost.

i want to know. why would i want to get a bunch of lumps on my head doing it the hard way if you have the easy when? but you have to prove to me it works. i have spoken to every health care experts. it turns out, if you want to reform the insurance system, if you want to make sure that people without pre-existing conditions are liable to get insurance, if you want to provide coverage for people, if you want to bend the cost curve, then you need a comprehensive bill. because this is a complicated area involving 16 of our economy. but we shoul-- 1/6 of our econo. we should be open. we should not spend millions of dollars advertising to the contrary to the insurance industry and others. we should not underestimate the

american people's willingness. many people will disagree. we have to constantly make our case and not play an insider's game. play an outsider's game. you know what i think would make a difference, michael, everybody here, excuse all the members of the press, if everybody turned off their cnn, fox, just turn off the tv, m snbc, and just go talk to folks out there instead of being in this echo chamber where the topic is constantly politics, the topic is politics. it is much more difficult to get a conversation focused on how to help people than a conversation

about how this will help or hurt somebody politically. that is part of what the american people are sick of. because they don't care. about majorities and minorities and process and this and that. they just want to know are you delivering for me. we have to get out of the echo chamber. that was a mistake that i think i made last year was not getting out of here enough. it is helpful when you do. [applause] >> mr. president, you told me -- suggested don't pay attention to blogs, a talk-radio, television. i have followed that advice pretty good. [laughter] the next question will be from the chair of the agriculture committee, the senator from arkansas, blanche lincoln.

>> meaney there, mr. president. i stay away from the tv and everything else. thanks for being with us today. i want to thank you also, i had an opportunity with several of my colleagues from the house and senate to have a bipartisan meeting yesterday if with the first lady on childhood obesity. a great meeting. we look forward to working with you and her off to tackle that problem on behalf of our children and the future of our country. i come from a seven-generation arkansas family. my dad was a good democrat, a great arkansan. he was very independence-minded, as im and most of my constituents are. the news to tell me early on when i ran for congress, he said its results that count. as i look at what is going on in my state, i visited with a constituent yesterday, a good

democrat, small business owner extremely frustrated because there was a lack of certainty and predictability from his government, for him to be able to run his businesses. he and his father have worked hard, built three or four small businesses. he feels there is no one in your administration that understands what it means to go to work on monday if fantastical payroll on friday. he wants results. he wants predictability. i think that you are exactly right, people out there watching us see us as nothing more than democrats and republicans fighting, fighting only to win a few political points. not to get the problem solved. so i want to echo some of what my colleague from colorado mentioned but also to ask you, in terms of where we are going, what can we tell people in terms of predictability and uncertainty for in getting this

economy back on track, how are we going to do that? an army willing as democrats not only to reach out to republicans but to push back in our own party for people who want extremes, and look for the common ground that will get us the success we need not only for our constituents but for our country in this global community and global economy? are we as democrats also will to push back on our own party and look for the common ground we need to work with republicans and get the answers and it's really results that will counter to our constituents. we appreciate the hard work you have put into it. >> look, there's no doubt this past year has been an uncertain time for the american people, for businesses, and for people employed by business. some of that certainty had to do with the objective reality of

this economy entering into a free-fall. so let's just remind ourselves that if you have an economy suddenly contracting by 6% or a loss of trillions of dollars of wealth basically in the blink of an eye, or home values descending by 20%, that that will create a lot of uncertainty out there in the business environment and among families. parts of what we have done over the course of this year is to put a floor under people's feet. that is what the recovery act did. that is what the interventions in the financial markets did, broke the back of the recession, stabilized the market. nobody is talking about a market meltdown at this stage. people have not recovered all they lost in their 401k plans, but they are feeling a little better when they open the envelope off now than they did

six months ago. state budgets were in freefall. that was stabilizing. states are still going through incredible pain, but did not have to lay off teachers or firefighters or cops at the levels they otherwise would have had to. that provided some stability and some certainty. so the steps you have taken as a congress, the steps we have taken as an administration have helped to stabilize us. now moving forward, blanche, what you will hear from some folks is that the way to achieve greater -- even greater economic growth -- and keep in mind if the economy is not growing at a 6% clip, so the question is when businesses will start to hire because they are now making a profit -- you are going to start during that the only way to provide stability is to go back and do what we have been doing before the crisis.

so i noticed yesterday when we were -- there was some hearing about our proposal to provide additional financing to small businesses and tax credits to small businesses. some of our friends on the other side of the aisle said this won't help at all, what you have to do is to make sure that we continue the tax breaks for wealthy americans, that is what will make a difference, they said. well, if the agenda -- if the price of certainty is essentially for us to adopt the exact same proposals that were in place eight years leading up to the biggest economic crisis since the great depression, we don't tinker with healthcare, let the insurance companies do what they want, we don't put in place and insurance reforms, we

don't mess with the banks, let them keep on doing what they are doing because we don't want to stir up wall street, the result is going to be the same. i don't know why we would expect a different outcome pursuing the exact same policies that got us into this fix in the first place. michael bennett articulated it very well. part of the reason people are feeling anxious right now it's not just because of this current crisis, they have been going this -- going through this 10 years. they have been working and not seeing a raise. their costs have been going up. if their spouses going into the workforce. they're working as hard as they can, barely keeping their heads above water, figuring out how to retire, a senior health care costs going up, college tuition skyrocketing. they are more and more vulnerable and that have been

through the last decade, treading water. if our response ends up being, you know, because we don't want to stir things up, we are just going to do the same thing that was being done before, then i don't know what differentiates us from the other guys. and i don't know why people would say, we really want to make sure those democrats are in washington fighting for us. so the point i am making and blanche is right, we have to be non-ideological about our approach to these things. if we have to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functional so we cannot be demonizing every bank out there.

we have to be the party of business, small business and large business, because they produce jobs. we have to be in favor of competition and exports and trade. we don't want to be looking backwards. we cannot just go back to the new deal and try to grab all the same policies of the 1930's and think somehow they would work in the 21st century. so blanche is exactly right that sometimes we get ideologically bob down. and just want to find what works. i know you do as well. i know people in arkansas do, too. when you're talking to the folks in arkansas, you have to remind them that what works is not just going back to do the same things we did before. if yes, there will be some transition time. if we have a serious financial regulatory reform package, will the banks squawk?

>yes. we know right now they are not lending and they're paying out big bonuses. we know that the existing regulatory system does not work. so we should not be spooked by the notion that, well, is now the time to take seriously in an intelligent way and not in a knee-jerk fashion, the challenge of financial regulatory reform so you don't have banks that are too big to fail and not putting taxpayers and the economy at risk, so now it's the time to do it. the same is true with health care. the same is true with health care. there are at least as many small businesses out there that will say i just got my bill for my health insurance and it went up 40%.

we have to do something for them, all right? all right. [applause] >> next question, did the junior center from the state of new york, kristen gillibrand. >> i'm sorry, we will get the microphone for you. >> thank you, mr. president. i have an issue that is important to the everyday work and many americans. that is health care for the 9/11 responders and all the community that lived near ground zero. these americans hail from every one of the 50 states and every congressional district in the entire united states. now because of exposure to toxins from the collapse of the world trade center towers, there are 20,000 people that are sick. some of them are gravely ill, suffering from serious health effects. some are disabled, some have

died. i have introduced legislation to provide permanent care and proper compensation for these americans. my question, would you today commit to working with congress to pass comprehensive 9/11 >> i fully committed to working with you guys. keep in mind that our budget already significantly increased funding precisely for this purpose. i'm not just talking the talk. we have been budgeting this as a top priority for the administration. i have not looked at all the details of your legislation, but i know that not only you and chuck, but everybody here wants to make sure those who showed such extraordinary courage and heroism during 9/11, that they are fitting lee carrefour and

that is going to be something that we are going to be very interested in working with you on -- fittingly cased for. >> the next question is the chairperson from the public works committee, senator barbara boxer. >> hello, barbara boxer. grubbs great to see you mr. president. thanks for doing this. thanks for meeting with the republican poppa's in the house. it was constructive for the american people -- the republican caucus. as senator feinstein and i tell our colleagues every day, california is hurting. i know that you are aware. they want to see a fighting spirit that we are committed, even though we have had political setbacks to get the job done. i just want to tell you, as i watched you during the state of the union, what you are doing now is really important for the folks i represent, because you

are showing that fighting spirit, no matter what the adversity is, and you are coming up with specific proposals. i want to ask about small business. we all know 64% of new jobs over the last 15 years came from small business. your new proposal, which does mirror a couple of people, senator warner and others have worked hard on this, for community banks to lend. can you do that by executive order, because my understanding is that you can use some of the tarp funds that were paid back or use the funds that have not been used, can you use that and it is going by executive order? or do you need us to put that program into a jobs bill? second, are you using your winslet as much as you can to get a big banks to lend? they dropped lending by $12 billion over the last year. could you give us an update? first of all, and i have not

taken trips to allentown, pa., or ohio most recently. >> baltimore. >> i was in baltimore. had a great time in baltimore. just recently, new hampshire. i've not been to searchlight yet, but we are going to get there. [laughter] everywhere i go, you talk to small business and they will tell you they are still experiencing a severe credit crunch. the larger businesses right now are able to get financing. even the medium-sized businesses, the credit markets have improved. smaller businesses, even if they're making a profit and have not missed a payment, are finding that banks are averse to

providing them capital. now, two reasons that they have cited. one is they say their bankers are telling them that the regulators are just looking over their shoulder too much and so the community banks feel that their hands are tied. these are independent regulators. they are diligent in doing their jobs. obviously, they feel caught off guard because of the lax regulation in some cases of the banking industry before the financial crisis. you get a sense that the pendulum has swung too far in the other direction. the challenge that we have is to be careful, because these are independent regulators and we don't want to politicize this. what the treasury secretary geithner and others have done is

to discuss with the regulators what we are hearing in the fields and to make sure that there is a consistency of approach that does not prevent banks from making what are good loans and taking reasonable risks. so that is one thing we are hearing. the other thing, though, that is still out there is that the larger banks generally have not been in this market. a lot of the smaller companies never had access to them in the first place. if we want to see if we can get more large banks to get into this marketplace. when i met with the big bang ceo's, this was something i pushed them on, they tell me and we have seen some confirmation of this, that they are actually ramping up some of their small- business lending and setting up

a more aggressive provisions, actively seeking out loans. so that is the effort we are making to get the private sector to do what needs to do. in the meantime, you mentioned a specific proposals we put forward for, i do think it is better to do them through legislation than through executive order. tarp was a congressionally created structure with some fairly stringent guidelines in terms of how we were supposed to approach it. it should not be hard to do. it is a pretty simple concept. banks that are repaid money, there's $30 billion that we could take that has already been repaid, immediately apply that to a fund so that small banks or community banks are able to provide their small businesses, small business customers with greater lending. i do think that getting that as part of a jobs package is

priority number one. i know i have already talked about this. my assumption is that if you combine that with the tax credit that we put into place for hiring, the provisions we talk about to incentivize weatherization programs to immediately start hiring people director of houses and businesses and help reduce our energy costs, taking some of those immediate steps right now, i think will pay big dividends down the road. the timing of it is perfect. our job last year was to make sure the economy was growing. if the economy is growing nthe . what is happening is business is steppin -- businesses tipping their toes in the water are having a hard time getting full- time workers. giving them additional access to financing could accelerate the process that otherwise could take a much longer time.

frankly, all the folks out of work right now cannot afford to wait any longer. they need it now. >> we have time for one or two more questions. keep the question short. >> and the answers short. >> otherwise we will all have one question. chairman pat leahy. >> mr. president, thanks for coming. i was just frustrated by -- these answers are so good and need to be heard. you have a great sense of what the judiciary should be. back to president clinton's time when the other side blocked 61 of his judges. you had some superb judges. you've talked to republicans and democrats, such superb names.

senator reid has not filed cloture. we have to spend a week on doing that. then they passed --20 to 10. because of what they did last time, we are in the most judicial crisis in our history. will you continue to work hard to get out names as quickly as possible so that we can do this and help us get these judges? i don't want the same judicial crises to occur as these nominees. can you commit to work with us in both parties to keep trying to get them through? >> this is going to be a priority. it is not just judges, pat, unfortunately. it's all of our federal appointees. if we have a huge backlog of folks who are unanimously viewed as well qualified. nobody has a specific objection

to them, but end up having to hold out because of some completely unrelated piece of business. that is an example, michael, of the kind of stuff americans don't understand. on the judge's front, we had a judge coming out of indiana, judge hamilton, who everybody said was outstanding. evin bae, dick lugar, all republicans, how long did it take us? six or seven months for somebody supported by democratic and republican senators from that state. you can multiplied that across- the-board. we have to start highlighting the fact that this is not how we should be doing business. in fairness, when we were in the

minority, there were sometimes we bloc judges and appointees. it is fair to say we were a little more selective in how we did it. a lot more, someone said. [applause] this is an example where i will reach out to mcconnell. harry reid has as well. i will say, if if the government is going to work for the american people, i cannot have the administrator for gsa, which runs every federal facility, all federal buildings across the country, here we are trying to save billions of dollars, cut waste -- claire mccaskill has been all on top of how we can audit are spending -- we could save billions of dollars in ending old leases that don't work or renegotiating them or consolidating buildings

and efficiencies, but i don't have a gsa administrator, even though i nominated someone well qualified several months ago. and nobody can tell me there's anything particularly wrong with them. they're blocking her because of some unrelated matter. you guys may know better than i do. and that has depento end. and the american people want it to end. [applause] let's have a fight about real stuff. we don't have told this woman hostage. if you have an objective about michael care policies, then let's debate the health care policies, but don't suddenly end up having as a gsa administrator stuck in limbo because you don't like something else we are

doing, because that does not serve the american people. then they don't know what the argument is about. then it is playing on both of the houses because it looks like you guys are just fighting all the time. we have to put an end to it. >> we will have two short questions. >> ok. >> the first question will come from the only person in the u.s. senate with a spouse that has -- the senator from ohio. >> thank you for joining us, thanks for your visit to lorain county, ohio. the first presidential visit to that county and we can't half ago, since harry truman in 1948. >> we had a great time. >> oberlin college, one of the great private institutions of higher learning in this country, 10 miles from there, there was a building built their seven years ago fully powered by solar panels.

it is the largest building on any college campus in america like that. those solar panels or bought in germany and japan. germany, a country that has an energy policy and the manufacturing policy. 75 miles west of there is toledo, ohio, where you have been several times. the legal has more solar energy jobs it than any city in america -- toleda has more solar power energy jobs than any city in america. we have all kinds of things in so many of our states, manufacturing wind turbine components and solar components. if it were the only major industrial country in the world without manufacturing policy. every rich country has one. we don't. i know what you're doing with ronald bloom and others. how do we read that china is exploding in terms of wind

factor in manufacturing and solar panel manufacturing, how do we rebuild our solar power manufacturing along with wind for an energy policy? >> there was an article last sunday talk about how china is not waiting, that it is moving. already the anticipation is that they will lap us when it comes to clean energy. they are not a democracy. so they don't debate. [laughter] and there are no filibuster rules. , obviously, over the long term, a system that allows for a robust debate an exchange of ideas is going to produce a better result. i believe that. but we have to understand that when it comes to some key issues like energy, we are at risk of

falling behind. we have already fallen behind, but it is not irreversible because we still have the best research and potentially the best technology. we have the best universities and scientists. we have the most productive workers in the world. but we have to bring all those things together into a togetherwhol -- together into a coherent whole. you just mentioned ron bloom, who we put in charge of manufacturing task force, is just issuing a report to me about the direction we need to go off to have some coordination when it comes to manufacturing. this is not some big bureaucratic, down industrial policy. it is figuring out how do we coordinate businesses, universities, government to start looking at where our

strategic opportunity is and then making those investments, filling the holes that exist so that we can be competitive with what china or germany or spain is doing. my hope is that during the course of this year we will be able to work with all 50 senators, because all of you have a stake in this, to see where our manufacturing opportunities and where we can plug some holes in order to make sure we are competitive internationally. specifically on clean energy, we know that is an opportunity. i continue to believe -- and i am not alone in this -- that the country that figures out most rapidly new forms of energy and can commercialize new ideas is going to lead the 21st century economy. [applause] i think that is our growth

model, just one last thing i want to say about this. in order for us to maximize it, part of it is good work jeff has been doing in terms of finding the right incentives. we have to be open-minded about a range of technologies. we have to look at clean coal technology. we have to look at nuclear technology. we're going to make significant announcements this year. this is an example of where we cannot be stuck in the past in terms of how we see these things. we are not going to be able to ramp up solar and wind to suddenly replace every other energy source anytime soon and the economy still needs to grow. so we have to look at how to make existing technologies and options better. but -- and this is the point i want to make because it came up in new hampshire yesterday -- we still -- one of the best

ways to be on the forefront in energy is to incentivize clean energy and discourage the old sources or methods that are not going to work in the future. and so, the fact that joe lieberman is working with lindsey graham, and john kerry has been all over this, the three of them are coming together to try to find if a workable, bipartisan structure so that we are incentivizing and rewarding the future and understanding that there is a transition so that we have to make sure the disruptions are minimized as we move into this new energy future. that is going to be vital. so don't give up on that. i don't want us to just say the easy way out is for us to give a bunch of tax credits to clean energy companies. the market works best when its response to price.

if they start seeing that dirty energy is a little pricey, clean energy is a little cheaper, they will innervate. -- innovate. they will start to think things through in innovative ways. i want to congratulate john kerry, jolie garmin, and lindsey graham -- and joe lieberman. >> the final question from indiana senator evinan bae. >> let's get your microphone. nice sneakers, by the way. >> thank you. you have to take care of your feet around here. mr. president, you have already addressed this in some of the other answers from other questioners. people in my state and on the

minds of moderate republicans and conservative democrats around the country, the issue of the deficit and rising debt and restoring the fiscal health of this country to a position where robby. frankly, the public and average citizens have been ahead of the political class on this. they understand the long run this is unsustainable, it's bad economics. if they understand that general durationally, it is unfair to our children to ask them to pay these bills. most of all, there's a sense of unfairness that they're having to make sacrifices in their daily lives, that too many in washington continue to have increases in the programs they care about. ordinary sec -- ordinary citizens are making sacrifices. they wonder why washington is not able to make the same sacrifices. i think they realized the other party does not have much credibility in this. they handed you a $3 trillion deficit. vice president cheney said

deficits did not matter, in his he flat out said that. that is wrong. it's bad economics. so we have a job to do. i think many people across the country looked at us and say, i don't know if the democrats are willing to take this on. do we have the backbone to really stand up and make some of these hard decisions. to your credit, you called for something that are not always popular in our party. if the first thing i noticed is you put into effect the discretionary spending freeze, you got kicked in the shins by some of the left wing and then you called for more restraints on your marks, not always popular. -- restraints on earmarks. why should the democratic party be trusted? are we willing to make the tough decisions to put this country and a better direction? i will tell you what the democratic party should be trusted. the last time the budget was

balanced, it was under a democratic president who made some very tough decisions. [applause] i think it is pretty straightforward. bill clinton made some very hard political decisions. some of you were in congress and you know how to of the votes or. he got nowak from the other side. as a consequence -- he got no help from the other side. those of new whyou took the vot, congratulate you. we are still haunted by the debates that took place in the 60's and the seven depots. that has not completely worked through the political mind-set. we are still saddled with this notion of the tax and spend model. when did you actually look at, we have been very fiscal

irresponsible. having said that, we have been composite in some ways over the last decade. the prescription drug bill, not paid for. two wars, not paid for. two tax cuts, not paid for. the emergence of a structural deficit that is only going to grow because we all know that the biggest drivers are medicare and medicaid and as the population gets older and as new technologies come on line, people are demanding new services for a healthcare, those are going to become more and more expensive. that is what will blow up the budget in the long term. so to answer your question, having said that, there's no doubt we have lost trust. part of it was bad timing. it is like the cartoon, you are

standing ban and suddenly someone hands you a ticking time bomb and it explodes and you have all this gunpowder on your hands. you did not construct a bomb, but you are holding it. what happened last year was wheatcome in, you have a 1.3 trillion dollar deficit, $3 trillion revenue lost because of the recession. you haven't $8 trillion projected debt over the next 10 years, and you have trillions more in projected deficits when you start counting entitlements. everybody has been looking at kent conrad's charts for the last several years. so at that very moment, it -- suddenly the headlines people are seeing is, and bank bailouts, recovery package, and all mergers together to get this

blob of spending and people are not seeing how it is benefiting them. it seems like washington business as usual. if that all that suspicion gets amplified. it is completely understandable. i think the way that we regain trust is to pursue good policies, but not be afraid to also explain these policies and to be honest with the american people that we are not going to dig ourselves out of this whole overnight. a couple of things i have done, i have encouraged that we go back to pay-as-you-go. people understand that concept. you pay as you go. i congratulate the senate on voting for it. i expect the house to get it done. i want to sign that. the second thing, you are mentioned, is the non-defense

discretionary freeze. one thing i want to mention, though, it is not as if we are not going after defense as well. it would be irresponsible if we have two wars for me to impose that same kind of limitation, my hands, not knowing what contingencies may be needed. if you look at what bob gates has been doing in the defense department, really going after some sacred cows over at the pentagon, he has been serious about it. we have already saved billions of dollars and we intend to keep saving billions on that front as well. we have already proposed $20 billion worth of savings for this year by eliminating and yesterday we proposed 17 billion and we were booed. sun said 17, this is a pittance. only in washington is $17 billion a pittance. it also indicates one of the dangers that we have is that you

have to chip away at this problem. so every dollar counts. the work claire mccaskill has done on auditing. if we can squeeze out $5 million a year and $10 million year and make this program work a livtle good habits. ì(lc@&c+ restraint muscles in ways that will not affect programming for p*uá will affect our bottom line. so we are moving aggressively, we hope, this year to get that stuff done. but what we also have to understand is that if i take all the steps that i have put forward and congress follows my lead jrh non-defense discretionary spe&ding, if we are potent in terms of defense spending, and we do all the things we have talk about, we still have this structural deficit we have inherited. second, with my proposal does is to pay for the recovery act and the other extraordinary steps we

had to take last year, so that i will have covered what happened on my watch. that is important to understand. whatever spending that i have to take that was extraordinary that you took with me, including the recovery, if we follow my budget outline, we will have taken care of and paid for what happened on our watch. but what we will not have solved is that huge structural deficit that existed to the day i walked in. we have to be able to tell the truth to the american people that that is hard to solve. the reason is most of it is coming from entitlements that people like. and it has to do with the fact that there is a huge gap between the amount of money paid out and the amount of money coming in. everybody understands this here, but i think there's a misperception in the public.

if you as your average constituent where federal dollars go, they will tell you four nameand 80. -- they will tell you foreign aid. and they will tell you earmaks. that makes people feel like we are not showing the same kind of discipline that they are. even for the or the projects, he still have to be accountable. even if we eveneareliminated ale earmarks, it does not solve our problem. as far as our colleagues on the other side of the aisle, it is important to explain to people that in order for us to balance the budget while exempting entitlements, no new revenues,

you would have to cut nine discretionary defense spending by 60% -- non-discretionary. that is everything. student loans, nasa, veterans programs, you name it, we would have to cut it by 60%. that is not going to happen. that is why we called for the commission. because we have to look at some tough, long term policy objectives. that is why we have to -- and i will personally do this -- i will say to my republican friends, i want to solve it, i don't want to play politics, but you have to step up. you have to fill these slots with this commission we are going to set up, put these people in a room and actually solve some of these problems. i hope they do. maybe i am not leaaiive.

i am still counting on the notion that good policy over the long term is good politics. if you do the right thing and you explain it clearly and you do it openly, i am confident that the american people, you can have an adult conversation and say it's not going to be easy or painless, we will be struggling for a while, but our future is bright. if we show the same pretend determination the previous generations have shown, for i have every confidence that we are going to have a 21st century that will be an american century just like the 20th. -- if we show the same grit and determination the previous generations have shown. thank you everybody. god bless. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2010] gerb>> for educators, c-span ofs

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