and proven faulty. >> one quick question about the 2010 elections. you are a practitioner of campaigns. this is going to be the first campaign in the wake of a supreme court decision that said corporations can advertise directly in favor or against candidates. what do you think is going to be the practical impact this year or in this election? >> my concern is now that any industry can go to any member of congress and say if you do not vote our way we're going to run of $1 million of ads in your district. i do not think it is disputable. it is an unbelievably on wholesome thing, but it can be meaningful. if you have big entities running multibillion-dollar campaigns to try to influence who goes to congress, that is a big concern.

that is certainly going to increase the power of special interests. that is why congress ought to do something about it. >> i have a question about the mood in the white house. wendy think we're going to start seeing some turnover at the white house? this year -- when the you think we are going to start seeing some turnover at the white house? >> everyone is very committed to this president, so no one is eager to go. there always is some turnover, but we all have the same sense, which is this is a very critical time for our country. we are challenged in so many ways, and we have to overcome the politics and help this president solve problems and move this country forward. we want to be a part of that. it has been a long, hard road, but a very rewarding one. >> we should not leave without noting the president said he liked to say the super bowl.

what about you? -- liked the saints in the super bowl. what about you? >> i want to say new orleans, but i empire the precision with with -- with which the colts execute. my heart says states, and my head says colts. >> what has been your biggest challenge? maybe something that surprised you. >> the greatest challenge personally has been being separated from my family. that has been very difficult. my wife and children remain in chicago. i do not see them as much as i would like, but professionally, i think the greatest challenge is this very tough tension between having to get things done within the system as it exists, and also trying to change the system as it exists,

and that is a very hard problem to solve, and in terms of what surprised me, i guess john f. kennedy once said what surprised him the most was that things were worse than he actually said when he was campaigning. i would say what surprises me is everything i have said about washington for 30 years has turned out to be true, but i still remain confident we can improve that. we can change that. i know the president committed to that, and we can really pull together and solve some problems. >> david axelrod, we thank you for joining us. we invite you back any time. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> coming up, president obama's remarks of the conference with senate democrats, and later on this week's q &a, thom hartmann. president of mama took a meeting at a retreat. this is about an hour -- president obama took a meeting at a retreat. [applause]

[applause] >> can i get everyone's attention? i want to talk just for a brief minute about where we were -- privatizing social security, a couple of wars that are on paid for, trillions of dollars of tax cuts and paid for, -- that are not paid for, in trillions of dollars of tax cuts not paid for, but let's talk about where we are and what we have done to

establish where we are. the first thing we passed was a landfill -- not very sexy- sounding, but we had reviews and editorials across the country -- significant legislation. the most significant environmental legislation in a quarter of the century. more than 2,000 acres, 5,000 miles of trails, and many things affecting all 50 states without exception. we pass legislation equalizing pay. we passed a children's program, now covering 14 million children, who could go to the doctor.

something people do not focus on much but was one of my favorite things i have ever been involved in is the national service legislation, allowing people to be involved in their community, receive a small stipend, and then have helped to go to college. we did that. [applause] we did something relating to mortgage fraud. there were so many problems in housing, but they would be so exacerbated had we not move in and passed laws to stop people from manipulating people in big trouble. we talked about what happened with credit cards, but we've did something about it. now fees cannot be charged, and hidden costs no longer exist. as we go down, people may not realize it is so unfortunate as it relates to credit in america

-- tobacco. both my parents smoke. all my family is smoke. now the federal drug administration regulates tobacco. job creation, the story has yet to be told. 60% of the money is still not among the people of our country. we did remarkable things on health care, and we have so much more to do. i want to say to each of you senators from maine to new hampshire to minnesota, to louisiana and the middle of this country -- the dakotas and nebraska -- how hard we worked together. there have been some good teams in the history of this country. one of the greatest teams in the history of this country is this

democratic team we are a part of, and i appreciated very much. jú÷-- appreciate it very much. [applause] where are we going? we have a lot to do. health care, energy reform, and we're going to move forward. why? because it is good politics and good for the country. behind all of this i have talked about is a man from hawaii, the president of the united states, barack obama. >> thank you, thank you. thank you very much. thank you. everybody please have a seat. you guys had to listen to me at the state of the union for at least pretend to listen to me, so i will try to keep it relatively brief. some opening remarks and then

open it up for questions. first, i want to thank harry reid. i recently said he has got one of the toughest job in washington, managing an institution that by its nature is a little difficult to manage. i have been a part of this caucus. i do not think anyone could have done a better job under more trying circumstances than harry reid, and i think he deserves a huge round of applause. let me start by saying we always knew this was going to be a difficult year to govern. we began 2009 with the financial system on the brink of collapse, and economy bleeding jobs every month, a 1.3 trillion dollar deficit and two wars that

were costly in every sense of the word. we knew solutions would not come quickly. we knew decisions would be tough and sometimes unpopular, and we knew we would have to make them without any help from our friends on the other side of the aisle, but we made those decisions, and those actions prevented another great depression. the economy that was shrinking by 6% a year ago is now growing at nearly 6% one year later because of the work that you did. [applause] listen to some of the work you did. expanding health insurance for 4 million children, of protecting consumers from getting ripped off by their credit card

companies and the kids getting targeted by a tobacco. some things that were not noticed -- reforms by eliminating waste and saving taxpayers billions while keeping a safe at the same time. it gave billions of dollars of tax relief to small businesses and 95% of working families here in america. you did all this despite facing enormous procedural obstacles that are unprecedented. he may have looked at these statistics. you had to pass more votes to break filibusters last year than in the entire 1950's and 1965 combined. that is 20 years of obstruction packed into just one, but you did not let it stop you. our mission this far from an accomplice, because while the worst of the storm is past, far too many americans are hurting in its wake. i know you have seen it back home with shepard businesses and

foreclosed homes. you have heard it from constituents desperate for work, and we have seen it in the burdens families have been grappling with us since this recession hit, things we have been grappling with for years. being able to save up enough to retire or to help a child with college expenses or pay health care. these problems have not gone away. it is still our responsibility to address them. all that has happened is we have gone from having the largest senate majority in a generation to having the second largest in a generation, and we have got to remember that. there was apparently a headline in the village voice announced that republicans win a 49-51

majority. that is worth thinking about. we still have to leave. saving and creating jobs has to continue to be our focus in 2010. last year we gave small businesses tax relief and expanded lending. i do not know if you are aware that loans have gone up 78 or 80%, which indicates the degree to which there is still a huge demand among small businesses. some banks say they are not lending because there is not enough demand out there. there are a lot of businesses that are still hungry for loans. i proposed additional ideas to help businesses waves -- raise wages and stay afloat. you have made some of these proposals as well.

[applause] we have invested in america's infrastructure, rebuilding roads and bridges and putting people to work strengthening our communities. you know the recovery act was designed so a lot of that work is going to be taking place this year and not just last year. many projects, in the next six months. we can do more, and we should do so without delay. we have not only helped put americans to work, but we are on track to double our nation's capacity for renewable energy. i propose additional tax credit that will promote energy conservation. we should do that without delay. i think ideas like this should be pretty palatable to the other party. they seem pretty common sense, pretty centrist. we should be able to hear their

ideas as well. that is why i spoke to the republican caucus. i think it is important we have an open discussion about the problems and our ideas to stop them. i have a government i have a little fun. on some issues we did not agree, but on some, we did, and i am reminded when it came to health insurance reform, i sought out republican response from the start. i think max can testify me spending time with republican ideas. we have considered hundreds of republican amendments and incorporated many of their ideas into legislation to pass the senate, so when i start hearing we should except ideas, we

should be clear. what has not happened is the other side accepting our ideas, and i told him, i want to work together when we can, and i meant it. i also made it clear we will call them out when they say they want to work with us, and we extend a hand and it a fist in return. last week for example we put up for a vote of bill i supported. we were assured this was going to be bipartisan, only to seize several republicans who co- sponsored the idea in the first place suddenly decided to vote against it. i am open to honest differences of opinion, but what i am not open to is changing positions solely because it is short-term

politics. i am not open to a decision to stand on the sidelines and assign blame. i have no patience for political legislation but says the cost of blocking everything is better than passing nothing. the problem is it leaves american people out of the equations, so i would suggest to this caucus if anyone is searching for a lesson to massachusetts,ñi i promise the answer is not to do nothing. the american people are out of patience as usual. they are fed up with a washington that is so of sort with who is up and who is down that they lost sight of what they are doing. they want us to start focusing on how to help them keep their jobs. they want to say their business done in an open and transparent way, but when we took the

senate back in 2007, we made a case we would be better on ethics and transparency, and we passed the most sweeping ethics reforms since watergate and by beginning to address earmark abuse. we should be proud of those achievements, but we're still going to have to do more, and that is why i propose to work together to make all earmarks public before they, of for a vote and to require lobbyists to discuss details reading before they come up -- to make all earmarks public before they come up for a vote. if we also have to get back to fiscal responsibility, and i

spoke about this at the state of the union. 10 years ago, we had a budget surplus. people were worried about what might happen with these surpluses and whether it would create problems. that was just a decade ago. after two wars, to tax cuts, a prescription drug program, none of which were paid for, we paid -- faced a deficit of over a trillion dollars, a debt of a trillion dollars, before my administration paid a single dollar. we cannot change the past, but we can change the future, and that is why i am asking you to adopt a freeze in on discretionary spending for the next three years starting next year. we're still having a tough time, given the economy is just starting to pick up speed. that is why i am grateful we

restored the pay go rules of the 1990's. we may not have been able to get the votes for a statutory commission, but i am going to appoint a commission by executive order, because it is important to take these issues seriously, not just for us, but for our children and grandchildren. let me wrap up by saying this. i know these are tough times to hold public office. the need is great. the anger and anguish are intense. the economy is massive, so no matter what levers and buttons we press, sometimes it does not move as quickly as needed to provide relief to so many of our constituents. in those circumstances, i think the natural political instinct is to tread lightly, to keep your head down and play it safe. i have said this before and just

want to say it again. for me, it is constantly important to remind myself why i got in this business and the first place, why i am willing to be away from my family for big stretches at a time, the financial sacrifices so many of you have made, being subject to criticism constantly. you do not get in this for the same. you do not get in this for the title. you get in this because of some point in time, you decided there was an issue that was so important you are willing to your stand of end fight for something. -- to stand up and fight for something, and you decided to run as a democrat because there is a core set of values about making sure everybody had a fair

shot, making sure middle-class folks were treated fairly in our congress, making sure those on the outside had away in that led you to get involved in public service, and that is what we have to remind ourselves, and especially when it is hard. if you look at an issue right now like health care, so many of us campaigned on the idea we were going to change his health care system. so many of us look people in guy that had been denied because of a pre-existing condition or just did not help it -- did not have health insurance at all for their premiums have gone off of, and we said we were going to change it. here we are with a chance to change it, and all of you for

the extraordinary work last year into making serious changes that would not only to reform the insurance industry, not only cover 30 million americans but also saved a trillion dollars on our deficit according to the budget office. there is a direct link between the work you did on that and the reason you got into public office in the first place, so as we think about moving forward, i hope we do not lose sight of why we are here. we have got to finish the job on health care. we have got to finish the job on reform. we have got to finish the job, even though it is hard, and i am absolutely confident if we do so in an open way, in a

transparent way, and a spirit of says we welcome their ideas, we're open to compromise, but what we are not willing to do is give up on the basic notion that this government can be responsive to ordinary people and help give them a hand up so they can achieve their american dreams. we will not give up that idea of. if that is where we go, i am confident politics will take care of itself. [applause] >> let me tell you people have indicated they wanted to ask questions. arlen specter is first.

>> mr. president, i begin by applauding your decision to place the economy at the top of the agenda, to put america back to work, and to provide jobs. i have a two-part question. it is just a brief statement of the issue. we have lost 2,300,000 jobs as a result of the trade imbalance with china between 2001 andñr 2007. the remedies to save those jobs are very ineffective. long delays, proceedings before the international trade commission subject to being overruled by the president. we had china of violating international law with subsidies, really a form of international banditry. they take our money and landed

back to us, and it is a big part of the united states. the first part of my question is, would you support more affective remedies to allow injured parties, companies, by endorsing a judicial remedy, if not in u.s. courts but by an international court and eliminate the aspect of having the itc decision overruled by the president done four times better cost of a tremendous number of jobs on the basis of the national interest, and if we have a basis on the national

interest, let them pay for it. the second part of the question is when china got into the world trade organization, 15 of us in this body oppose. there were bilateral treaties, and china has not lived up to its obligation to have its markets open, but take our markets and our jobs. would you support an effort to revise, and perhaps provoke the bilateral treaty, which gives china such an unfair advantage? thank you theory -- thank you. >> i would not be in favor of revoking the trade relationships we have established with china. i have shown myself during the course of this year more than willing to enforce our trade agreements and a much more serious way, and at times i have

been criticized for it. there was a case involving foreign tires that were being sent in here, and i said this was an example of where we have got to put our foot down and show we are serious about enforcement, and it caused the usual fuss and the international level, but it was the right thing to do. having said that, i also believe our future is going to be tied up with our ability to sell products all around the world, and china is green to be one of our biggest markets, and asia is going -- china is going to be one of our biggest markets, and asia is going to be one of our biggest markets, and for us to close ourselves off from that market is a big mistake. the point you're making is it has got to be reciprocal. if we have established agreements and with -- in which

both are supposed to open their markets, we do so, and the other side is imposing on whole set of barriers in place, that is a problem, and it has to be squarely confronted, so the approach we're taking is to have to get much tougher about enforcement of existing rules, putting constant pressure on china and other countries to open their markets in reciprocal waves. -- ways. .

if we increased our exports to asia by a percentage point, it would mean hundreds of thousands, maybe millions of jobs here in united states. and it is easily doable. that is why we are going to be putting a much bigger emphasis on export promotion over the next several years. and not just for large companies but also for medium-size and small companies. one of the challenges -- i was up in new hampshire yesterday, and you saw this terrific new company that just had been started up.

it has only got 14 employees at this point. but it has a new manufacturing technique for the component parts in italy the light bulbs, potentially could lower the price of led light bulbs, cut them in half. and these folks, potentially could market not just here in the united states, but this is a technology that could end up being sent all around the world. but they do not have the money to set up their own foreign office in beijing to navigate through the bureaucracy. they have got to have help being over there. that is one of the things that we would want to focus on in this coming year, making sure that our export-import banks, our trade offices, that we are assisting not just the big guys, although we do want to help them, but the medium-sized and small businesses that have innovative products that could

be marketed if they got just a little bit of help and a little bit of push from the united states government. >> michael bennett, colorado. >> thank you for coming, mr. president. it is good to see you. you talked about a number of the challenges that we faced as a country, which are serious. even before we were driven into the worst recession since the great depression, the last period of economic growth in this country's history, was the first time middle-class income family income actually fell during a period of economic growth. no net jobs created since 1998, household wealth the same at the end of the decade as it was at the beginning, and annette beach -- and an education system that is not working well enough for our kids. and on top of everything else, $1.40 trillion deficit and $12 trillion of debt. i was saying that the other day

in colorado, and i was talking about how our kids were going have to pay this back if we did not make this decision that we have to face up to. and my daughter, who is 10 years old, was there and she walked out with me and she said, just so you know, i am not paying that back. [laughter] so she has the right attitude, i think. >> but just in case you're counting on it. >> 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 discussion, in particular. i had a woman the other day asked me where she could get her lobbyist in washington, d.c. >> let me make a couple of observations, having served in the senate and now seeing it from the perspective of the white house. whenever people ask me, why isn't washington working -- i am a fierce defender of the

integrity and hard work of individual members, which is, by the way, matched up by -- when you look at polls, people hate congress, but individual members a lot of them feel are really working hard on their behalf. the problem here that you have died is an institution -- that you have got is an institution that is increasingly 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 examples during the course of this year in which that has been the case. i mentioned the filibuster record. we have had scores of pieces of legislation in which there was the filibuster, and then ended up passing 90-10, or 80-15. what that indicates is a degree to which we're just trying to gum up the works instead of getting business done. that is an institutional problem. in the senate, the filibuster only works if there is a genuine spirit of compromise and trying to solve problems, as opposed to just shutting the place down. it is just shutting the place down, then that is not going to work. that is point number one.

point number two. in terms of how we operate, we as democrats, i think that the more open we are, the more 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. and i think the health care bill is a perfect example. the truth the matter is -- the truth of the matter is, the process looked painful and messy, but the innumerable hearings that were held did give an opportunity for the product to get refined, so that i think that the ultimate package, after potential negotiations between the house and the senate, is better than where we started. and there was a possibility and continues to be a policy -- a possibility to be in 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 all these filibusters and trying to get it pivot and start talking about other issues that were so important to the american people, some of that transparency got lost. and i think we paid a price for it. it is important to constantly have our cards out on the table and welcome challenges and questions. if the republicans say that they can insure every american for free -- which is what was claimed the other day, at no cost, i want to know. because i told them, i said, why would i want to get a bunch of lumps on my head doing the hard thing if you've got the easy thing? but you have got to show me.

you have got to prove to me that it actually works, because i have talked to every health care expert out there and it turns out if you want to insurance -- reform the insurance system, if you want to make sure that people without preexisting conditions are able to get insurance, if you want to provide coverage for people and been the cost curve, then you need a comprehensive bill because this is a complicated area involving 1/6 of our economy. but we should be open to that dialogue, and not underestimate the power of the american people over time -- despite millions of dollars of advertising to the contrary from the insurance industry and others -- we should not underestimate the american people's willingness to say, okay, i got it. and there are still going to be disagreements, but we have got to constantly make our case and not play an insider's game. play an outsider's game.

last point i would make about this. if everyone here -- excuse all the members of the press who are here -- if everybody turned off your cnn, in your fox -- just turn off the tv -- msnbc, blogs -- and go talk to people out there instead of being in this echo chamber where the constant topic is politics. topic is politics. it is much more difficult to get a conversation focused on how we are going to help people than a conversation about how is this going to help or hurt somebody politically. and that is part of what the american people are just sick of. because they do not care, frankly, about majority and minorities and process and this and that.

they just want to know -- are you delivering for me? and we have got to, i think, get out of the echo chamber. that was a mistake that i think i made last year, was just not getting out of here enough. and it is helpful when you do. [applause] >> mr. president, you've told me and suggested -- do not pay any attention to the blogs, don't listen to talk radio, don't watch -- don't watch cable tv. and i follow that advice pretty good. [laughter] the next question will be from the chair of our agricultural committee, the senator from arkansas, blanche lincoln. >> me, neither, mr. president. i stay away from the tvs and everything else. but i want to thank you for

being with us today. we had an opportunity with several of my colleagues from the first -- from the house and senate have a bipartisan meeting yesterday with the first lady on child of the city. it was a great meeting and we look for to working with there and you and your administration to tackle that problem. i come from a seventh-generation arkansas family. my dad was a good democrat and he was very typical of arkansas in that he was very independent- minded, as am i. and as most of my constituents. he used to tell me early on when i ran for congress, he says is really results that count. and as i look at what is going on in my state, and among my constituents -- i visited with one yester day, good democrat, small business owner, who was 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 to build three or four

small businesses, and he fears that there is no one in your administration that understands what it means to go to work on monday and have to make a payroll on friday. he wants results and predictability. and i think that you are exactly right. people out there watching us, they see us nothing more than democrats and republicans up here fighting only to win a few political points, not to get the problem solved. and so i just -- i want to echo, i guess, some of what my colleague michael bennett from colorado -- michael bennet from colorado mentioned, but also to ask you, what can we tell the people in terms of predictability and certainty in getting this economy back on track? how are we going to do that? and are we willing as democrats not only to reach out to republicans but to push back and

our party for people who want extremes, and look for that common ground that is born again as the success that we need not only for our constituents but for our economy in this global community, in this global economy? are we willing as democrats to also push back on our own party and look for that common ground that we need to work with republicans and to get the answers? and it is really the results that are going to count to our constituents. and we appreciate the hard work that you put into it. >> there is no doubt that this past year has been an uncertain time for the american people. for businesses and for people employed by businesses. some of that certainty just had to do with the objective reality -- the objective reality of this economy entering into a freefall. let's remind ourselves that if you have got 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 is going to create all whole lot of uncertainty out there in the business environment and among families. part 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. it broke the back of the recession and stabilize the markets. nobody is talking about a market meltdown at this point. and people have not recovered all that they lost in their 401(k)'s, but they are feeling a little better when they open that envelope now than they did six months ago. state budgets were in freefall -- that was stabilized. states are still going through incredible pain, but they did not have to lay off teachers and firefighters and cops at the level that they would have to

otherwise lay them off. that provided some stability and some certainty. so the steps you have taken as a congress, the steps we have taken as an administration, that has helped to stabilize things. now, moving forward, blanche, what you're going to hear from some folks is that the way to achieve even greater economic growth -- and keep in mind the economy is now growing at a 6% clip, so the question is when do businesses actually start hiring, because they are now making a profit -- what you're going to start hearing is the only way to provide stability is to go back and do what we have been doing before the crisis. 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 will not help but all. what you have to do is to make sure that we continue the tax breaks for the wealthiest americans. that is really what is going to make a difference." well, if the agenda -- if the price of certainty is essentially for us to adopt the exact same proposals that were in place for eight years leading up to the biggest economic crisis since the great depression -- we don't tinker with health care, let the insurance companies do what they want, we don't put in place any insurance reforms, we don't mess with the banks, let them keep on doing what they are doing now because we do not want this to rockwall street -- to stir up wall street -- result is going

to be the same. i do not know why we would expect a different outcome pursuing the exact same policies that got us into this fix in the first place. michael bennet articulated it very well. part of the reason people are feeling anxious right now, it is not just because of this current crisis. they have been going this -- through this for 10 years. they have been working and not seeing a raise. ross had been going up, their spouses going into the work force, they work as hard as they can. they are barely keeping their heads above water. they're trying to figure out retire. they are seeing more and more of their cost of health care dumped into their lap. college tuition skyrockets. they are more and more vulnerable, and they have been for the last decade, treading water. and if our response ends up being -- we do not want to stir things up here, going to adjust to the same thing that was being

done before, then i do not know what differentiates us from the other guys. and i do not know why people would say, boy, we really want to make sure that those democrats are in washington fighting for us. so the point i am making -- and blanche is exactly right, we have got to be non-ideological about our approach to these things. we have got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we cannot be demonizing every bank out there. we have got to be the party of business, small business and large business, because they produce jobs. we've got to be in favor of competition and exports and trade. we do not 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 bogged down. i just want to find out what works. and i know that you do, too, and i know the people in arkansas do, too. but when you're talking to the folks in arkansas, you also have to remind them that what works is not just going back and doing the same things that we were doing before. and, yes, there is going to be some transition time. if we had a serious financial it -- if we have a serious financial regulatory reform package, will the banks squawk? yes. will they say that this is not the -- -- this is the reason that we are not lending? yes. the problem is we know right now

they are not lending, and paying out big bonuses. and we know that the existing regulatory system does not work. so we should not be spooked by this notion that, well, it is not now time to take seriously in an intelligence -- that this is now the time to take seriously in an intelligent way the challenge of financial regulatory reform so that you do not have banks that are too big to fail and you're not putting taxpayers at risk and you're not putting the economy at risk -- now is 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, if you talk to them, who will say, i just got my bill from my health insurance and it went up 40%. and we've got to do something for them. all right? >> next question, the junior

senator from the state of new york, kirsten gillibrand. >> we have a microphone for you. >> thank you, mr. president. i have an issue that all like to raise that is very important to every new yorker and to many, many americans, and that is health care for our 9/11 responders and for all the communities that live near ground zero. these americans hail from every one of the 50 states and every single congressional district in the entire united states. and because of exposure to toxins from the collapse of the world trade center towers, there are about 20,000 people who are sick -- some of them 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. would you commit today to

working with congress to pass comprehensive 9/11 health bill that's fully paid for? >> i fully commit to working with you guys. keep in mind that our budget already significantly increased funding precisely for this purpose. i am not just talking the talk. we have been budgeting this as a top priority for the administration. i confess, kirsten, 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 that those who showed such extraordinary courage and heroism during 9/11, that they are fittingly cared for, and that is going to be something that we're going to be very interested in working with you on. all right? >> thank you, mr. president. >> at the next question is the

chairperson of the environmental public works committee, senator barbara boxer. >> hey, barbara boxer. >> great to see you here, mr. president. and thank you for doing this and thanks for meeting with the republican caucus at the house. i thought was very instructive for the american people. as senator feinstein and i tell our colleagues every day, california is hurting. i know that you are aware of that. and they want to see a fighting spirit in us -- that we are committed, even though we've had some political setbacks, to get the job done. and i just want to tell you, as i watched you during the state of the union and listen to you, what you are doing now is really important to the folks that i represent, because you're showing that fighting spirit no matter what the adversity is, and you're coming up with specific proposals. i want to ask you about small business. we all know they are the job creators -- 64% of new jobs over

the last 15 years came from small business. your new proposal, which does mirror a couple of people -- i look at senator merkley, i know senator warner and others, we have worked hard on this. for community banks to lend, can you do that by executive order? my understanding is that you can use some of the tarp funds that were paid back -- or those funds that have not been used -- can you use that and get this going by executive order, or do you need us to put that program into a jobs bill? and are you using your influence as much as you can to get the big banks to lend? they have dropped lending by $12 billion over the last year, so i am wondering if you can give an update on that. >> first of all, i have now taken trips allentown, pa. -- elyria, ohio, most recently --

>> baltimore. >> i was in baltimore. [laughter] i had a great time in baltimore. just recently and now shock, new hampshire. have not been the searchlight yet, but we're going to get there. -- have not been to searchlight yet, but we're going to get there. [laughter] everywhere i go, you talk to small businesses 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 are making a profit and have not missed a payment, are finding that banks are averse to providing them capital. two reasons that they cite -- one is that 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 all 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've got is that we have got to be careful because these are independent regulators and we do not want to politicize them. but what treasury secretary geithner and others have done is to ensure with the regulators what we are hearing in the field 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, and we want to actually see if we can get more of those large banks to get into this marketplace. when i met with the big bank ceo's, this is something i pushed them on. they tell me, and they have seen -- and we have seen some confirmation of this, that they are actually ramping up some of their small-business lending and setting up more aggressive divisions actively seeking out loans. that is the effort that we're making to jawbone the private sector to do what it needs to do. in the meantime -- you mentioned the specific proposals that we

put forward -- i 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, though. it is a pretty simple concept. banks have repaid money. there's $30 billion that we could take that has already been repaid and immediately apply that to what one said that small banks -- community banks are able to provide their small business customers with greater lending. and i did think that getting that as part of a jobs package is priority number one. and i know i have already talked to harry about this. my assumption is, is that if you combine that with the tax credits that we have put in place for hiring, the provisions that we've talked about to

incentivize weatherization programs that can immediately start hiring people to retrofit homes and businesses and help reduce our energy costs -- taking some of those immediate steps now, i think, will pay some big dividends down the road. and the timing of it is perfect, because our job last year was to make sure the economy was growing. the economy is now growing. but what is happening is businesses, either because they cannot find financing or because they are still just dipping their toe into the water, had been hesitant to hire full-time workers. and for us to start giving them some serious incentives, giving them additional access to financing, could accelerate a process that could otherwise take a much longer time and all those people out there out of work right now, they cannot afford to wait in long term. they need it now. >> we have time for one or two more questions if the question

is short. >> and the answer short. [laughter] >> otherwise we will only have one question. the chairman of the judiciary kit -- committee, pat leahy. >> thank you for coming here. i word -- i was just whispering to marcel these answers are so good and need to be heard. >> you have a great sense of what the federal judiciary should be. i think that the president clinton when the other side blocked 61 of his judges. you have had some superb judges. you have talked to both republicans and democrats, sent up some superb names. and senator reid still has to file a cloture. we have to spend a week of doing that, and then they pass by 100-0 or 9 d-tenn. -- 90-10.

because of what they did last time, we end up with the greatest shortage and the most judicial crises, i think, in our history. will you continue to work very hard to get up names as quickly as possible, so that we can do this, and helped us get these judges through? i do not want the same judicial crises to occur. you have had good nominees. >> this is going to be a priority. it is not just judges, unfortunately, pat, it is also our -- all of our federal appointees. we have got a huge backlog of folks who are unanimously viewed as well qualified, no one has a specific objective to them, but end up having a hold on them because of the completely unrelated piece of business. that is as an example, michael, of the kind of stuff that americans just do not understand. on the judge's' front, we

had judge for indiana, judge hamilton, who everybody said was outstanding. evan bayh, dick lugar, all recommended. how long did it take us? six or seven months for somebody who was supported by the democratic and republican senator from that state. and you can multiplied that across the board. we have to start highlighting the fact that this is not how we should be doing business. now, in fairness, when we were in the minority, there were some times when we bought judges, we blocked appointees. i think it is fair to say we were a little more selective in how did it. "a lot more," somebody said. [laughter]

this is an example of where i am going to reach out to mitch mcconnell, and i know harry has as well. the if the american -- if the at the -- 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 all across the country -- here we are, we're trying to save billions of dollars, cut waste -- claire mccaskill has been all on top of how we can audit our spending and we could save billions of dollars in ending old leases that do not work or renegotiating them or consolidating buildings and efficiencies. but i do not have a gsa administrator even though i nominated someone who was well qualified several months ago. nobody can tell me that there's anything particularly wrong with her. they are blocking her because of

some unrelated matter. i do not know, you guys may know better than i did. that has to end. it has to win. [applause] -- it has to end. let's have a fight about real stuff. don't hold this woman hostage. if you have an objection about my health care policies, then let's debate the health care policies. but don't suddenly end up having a gsa administrator who is stuck in limbo somewhere because you do not like something else that we are doing, because that does not serve the american people. then they do not know what the argument is about. it's a plague on both your houses because it looks like you guys are just fighting all the time. and we have got to put an end to that. >> i missed somebody on my list. we will have two very short

question. >> i will indulge, harry. >> the first question is going to come from the only person that is a member of the u.s. senate who has a spouse that has won a pulitzer prize -- sherrod brown from ohio. [laughter] >> thank you for joining us and thank you for your visit to lorain county, ohio, a week and a half ago. first presidential visit to that county of 300,000 since harry truman in 1948. >> it was a great visit. we had a great time. 10 miles from there, oberlin college, one of the great private institutions of higher learning in this country, there was a building built there seven or eight years ago, fully powered by solar panels. it is the largest building on any college campus in america like that. those solar panels were bought in germany and japan, not surprisingly.

75 miles west of there is toledo, ohio, and toledo has more solar energy manufacturing jobs than any city in america. it begs the question of two things in terms of manufacturing policy and energy policy. we have all kinds of things in so many of our states -- manufacturing wind turbine components and solar panel components -- but we're the only industrial country in the world without a manufacturing policy. every rich country in the world has one. we do not. i know what you're doing with ron bloom in the white house and other things, but how do we get there? when we read these articles in the paper that china is just exploding in terms of wind turbine manufacturing and solar panel manufacturing, how do we rebuild our manufacturing sector with a manufacturing policy, combined with an energy policy that gets us there? >> i know people had a chance to

read that article in the "new york times" last sunday, talking about how china is not waiting, it is moving. and already the anticipation is that they will lap us when it comes to clean energy. now they are not a democracy and so they do not debate. [laughter] and there are no filibuster rules. and so obviously over the long term a system that allows for robust debate and 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 irrevocable because we still have the best research, potentially the best technology, the best

universities, the best scientists, and as i have said, we've got the most productive workers in the world. but we have got to bring all those things together into a coherent whole. i think that there are a couple of elements to this. in terms of manufacturing generally, i you just mentioned ron bloom who we put in charge of a manufacturing task force. he is just issuing now a report to me about the direction we need to go to have some coordination when it comes to manufacturing. now this is not some big bureaucratic, top-down industrial policy. it is figuring out how do we coordinate businesses, universities, government, to start looking at where are our strategic opportunities and then making those investments, filling holes that exist so that we can be competitive with what china is doing or what germany for spain is doing. and my hope is that during the course of this year we are going

to be able to work with all 50 senators, because all of you have a stake in this, to just see where are our manufacturing opportunities and where we can plug some holes in order to make sure that we're competitive internationally. specifically on clean energy, we know that 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. i think that is our growth model. >> final question. >> just one last thing i want to say about this. in order for us to maximize it, part of it is the good work that jeff has been doing in terms of just finding the right incentives. we have to be open-minded about

all whole range of technologies. we have to look a clean coal technology -- look at clean coal technology and nuclear technology. this is an example, blanche, of where we cannot be stuck in the past in terms of how we see these things. we're 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. we have got to look at how to make existing technologies and options better. this is just the point that i wanted to make because it came up in new hampshire yesterday. 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, john kerry has been all over this -- the three of them are coming together to try and find a workable, bipartisan structure so that we are incentivizing and rewarding the future -- and understanding that there is a transition, so that we have got to make sure that the disruptions are minimized as we move into this energy future. that is going to be vital. so do not give up on that. i do not want us to just say the easy way out is for arrested just give a bunch of tax credits to clean energy companies. the market works best when it responds to price. and if they start seeing that, you know what, dirty energy is a little pricier, clean energy is a little cheaper, they will innovate and think things through in all kinds of innovative ways.

i want to congratulate specifically john kerry, joe lieberman, and lindsey graham, who it probably does not help him for me to compliment him, but has been very thoughtful in terms of how they are approaching the issue. >> final question -- evan bayh, indiana. [inaudible] >> we can get to a microphone. nice sneakers, by the way. [laughter] >> you have got to stay light on your feet around here. mr. president, you or the address this in part, but i would like to present it in a little different way that i think is on the minds of people in my state, and perhaps in the minds of independents and 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 it ought to be. i think the public and average citizen has been way ahead of the below class on this. they understand in the long run this is unsustainable, it is bad economics, and it is unfair to our children to ask them to pay these bills. and most of all, there's a sense of unfairness. they are having to make sacrifices in their daily lives, but to many in washington expect have increasing programs they care about. ordinary citizens are making sacrifices and yet we want our earmarks or pet projects. why can washington make the same sacrifices that we're willing to make? now i think they realize that the other party does not have much credibility on the subject. is president cheney famously said that in his opinion deficits did not matter. he just flat out said it. that is wrong. it is bad economics. it is wrong. i think many people across the country candidly look at us and say, i do not know if the democrats are willing to take

this on. they think we want to tax too much and spend too much, and do we have the backbone to really stand up and make some of these hard decisions? to your credit, you've called for some things that adopt -- that are not always popular in our party. the first thing i noticed when you put into effect that non- security discretionary spending freeze is that you got kicked in the shins by some of the left- wing blog. and you've got a call for more -- and you call for more restraint on earmarks. that is not always popular among our group but you call for those thain. so my question to you, mr. president, why should the democratic party be trusted? are we willing to make some of the tough decisions to actually head this country in a better direction? >> i will tell you why the democratic party should be trusted. the last time this budget was balanced, it was under democratic president who made some very tough decisions. bill clinton made some very hard political decisions.

some of you were there in congress and know how tough those votes were. you got no help from the other side. but as a consequence, the economy took off and you had to wonder billion >> surplus at the end of his presidency. he deserves enormous credit for that. those of you who took those votes deserve enormous credit for that. that is why we should have credibility. but we are still haunted by debates that took place from the 1970's and 1960's, right? and that has not completely worked through the political mindset. we're still saddled with this notion of the tax and spend model, when if you actually look at it, we have been very fiscally responsible. now having said that, we have been complicit 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 people get older, as the population gets older and as new technologies come online, people are demanding new services for health care, those are going to become more and more expensive, and that is what is going to blow up the budget in the long term. having said that, there is no doubt that we have lost trust. part of it was just bad timing. it is like the cartoon, right, you're standing there and someone hands you a ticking time bomb and it explodes, and you've got all this gunpowder on your hands, and you did not construct the bomb, but you're holding it.

and so what last -- what happened last year was -- we , , you've got a $1.30 trillion deficit that we're inheriting. you have $3 trillion revenue that are lost because of the recession. you've got an $8 trillion projected debt over the next 10 years, and you've got trillions more in projected deficits when you start counting entitlements. everyone has been looking at kent conrad's charts here for the last several years about it. and so at that very moment, suddenly the headlines that people are seeing is -- bank bailout, recovery package -- and it all kind of merges together into this blob of spending, and people are not seeing how this is benefiting me. it just looks like washington business as usual. 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 also to explain these policies, and to be honest with the american people that we're not going to dig ourselves out of this hole overnight. a couple of things i have done. i have encouraged that we go back to paygo, pay-as-you-go. people understand that concept. you pay as you go. i congratulate the senate on voting for that. i expect the house to get it done. i want to sign that. >> not a single republican. >> the second thing you have already mentioned is this 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 responsible when we have two wars for me to impose that same kind of limitation and

tie my hands not knowing what contingencies may be needed. but if you look at what bob gates has been doing in the defense department in really going after some sacred cows over at the pentagon, he has been serious about it. we've already saved billions of dollars. we intend to keep saving billions of dollars more on that front as well. we are to propose $20 billion worth of savings for this year by eliminating and consolidating programs. last year we proposed $17 billion in we were pooh-poohed. -- and we were pooh-poohed. some of the editorials were saying, all of this is a pittance." only in washington is $17 billion a pittance. but it also indicates one of the dangers that we have, if you have got to chip away at this problem. if we can squeeze out $5 million

here, $10 million here, make this program work a little better, over time it creates good habits and it starts exercising the fiscal restraint muscles in ways that will not affect programming for people but will affect our bottom line. we're moving aggressively and we hope this year we get that stuff done. what we also have to understand is that if i take all the steps that i have put forward and congress follows my lead on the non-defense discretionary spending, and we're prudent in terms of defense spending, and we do all the things that we've talked about, we have still got this structural deficit that we have inherited. what 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 had to take that was extraordinary that you took with me, including the

recovery act, if we follow my budget outline, we will have taken care of -- paid for what happened on our watch. but what we will not have solved is that huge structural deficit that existed the day i walked him. and we have got to be able to tell the truth to the american people that that is hard to solve. and the reason is hard to solve is that most of that is coming from the entitlements that people like. and it has to do with the fact that there's this huge gap between the amount of pulp -- the amount of money being paid out and the amount of money coming in. everybody understands that here, but i think that there's a misperception in the public. if you ask your average constituent where does federal dollars code, they will tell you foreign aid. you will say, foreign aid accounts for 1% of our budget. and then they will say,

earmarks. we have to discipline ourselves on earmarks just because symbolically i think people -- it makes people feel like we are not showing the same kind of discipline that they are. even for worthy projects, you've still got to make choices. so they're absolutely right about that. but earmarks account for about 1% of the budget. so what we eliminate all foreign aid and all earmarks, it does not solve our problem. and as far as the arguments that our colleagues on the other side of the aisle are making, 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 non- discretionary defense spending by 60%. cut it by 60%. that is everything -- student loans, nasa, veterans programs

-- you name it, we would have to cut it by 60%. six, zero. that is just not going to happen. that is why we call for the commission because we have got to look at some tough, long-term policy objectives. and that is why we have got to -- and i will personally do this. i will say to my republican friends, i want to solve it. i do not want to play politics on it, but you've got to step up, you've got to fill these slots with this commission that we're going to set up, put these people into our room, and ashley solve some of these problems. and i hope that they do. maybe i am not a. -- naive. and 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 do it openly, i am confident that the american people -- you can have

an adult conversation and say, this is not going to be easy or painless, we're going to be struggling for a while but our future is bright. if we show the same grit ended direct -- and determination that previous generations have shown, i have every confidence that we're going to have a 21st century american century, just like the 20th. all right? thank you, everybody. god bless you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

[inaudible] >> all nets, -- up next, an update on the possibility of two possibilities -- two vacancies on the supreme court. joining us to talk about a story that the white house is working behind-the-scenes to replace two

supreme court places. guest: i don't think it is a new story. i think there was a big piece on abc at the end of last week saying john paul stevens is 89 and he's only hired one clerk instead of three for next fall. ginsburg is 76. recently recovering from pancreatic cancer. this is a story which says something we already knew which says there are two justices definitely looking to retire at some point soon. the speculation was it would happen sooner rather than later. as soon as -- maybe as soon as this spring. host: what are the names being floated out there? guest: it is similar to what we had last spring except sonia sotomayor isn't on it anymore. the dean of harvard law school, diane wood, a judge on the district circuit court of

appeals. it is a very similar list. one of the things that i think will solidify who is on the liz is if ginsburg steps down, i think obama might be inclined to take a woman rather than a man. host: behind-the-scenes movement accident whether it is old or new, that the white house in the 2010 electrics will try to make the supreme court pick. a whole issue part of making sure the democrats retain their majority in the house and senate. what do you hear? guest: i think wuvent reasons president obama took a whack at the supreme court last week in the state of the union is he is going to make the court and the composition of the court more of an issue. this big campaign finance decision that came down is sort of mana from heaven for this

white house. it is a decision that really riled up a sense of a populous satisfaction with the court a sense that the court was giving corporations personhood. i think you are quite right to say that his -- he's e!ing it up for the elections. he's putting it on so that he can put -- very similar list. one of the things that i think >> tomorrow, a look at the toyota recalls, with david jefferson of the "detroit news -- david shepherdson of the "detroit news."