low-risk environmentally and have a high potential upside. here is the last thing i will say about drawing. you have some environmentalists that say do not drill anywhere. then, you have some of my friends on the republican side that were saying that this is a nice first thought, but it is not enough, you should open up everything. i do not agree that we should not do anything. it turns out that oil rigs generally did not cause films -- do not cause spills. even during katrina, they came from the refineries on shore. the notion that we can drill our way out of the problem, you start hearing about this in the summer as soon as the gas prices started going up. every summer it is the same thing. politicians say we are what to do something about it. these days, some of my

colleagues on the republican side will say you have to drill even more. just remember the statistics when you start hearing this. we account for 2% of the world's oil reserves but we used 20% of the world's oil. we use 20%, we only have 2%. we cannot drill our way out of the problem. that is why we have to get moving on the clean energy sector and we also have to make sure that we have enough supply that is regular in terms of these other traditional energy sources so that by the time we get to the clean energy sector, we have not had to sacrifice economic growth along the way. all right? all right, the gentleman right here in the white shirt. >> james hill, from greenville, south carolina. i agree. it is an honor for you to be here today.

thank you. to springboard from what you're saying, how long do think it will take to have more hybrid vehicles on the road than gas vehicles and what would it take? >> we have already seen a huge spike in the purchase of hybrid vehicles. if you think about it, just two years ago if you found out somebody had a hybrid vehicle, that was a pretty big deal. you wanted to test it out. you wanted to see how it works. now, it is pretty common. everybody here knows somebody that has a hybrid. the have probably tried it out. it is kind of cool one to back it out and it is quiet. -- when you back it out and it is quiet. i think that is the future. consumers will naturally gravitate in that direction. we're just talking about oil. not only do we produce 2% and

use 20%, but countries around the world -- everybody is starting to use more oil. think about it. china. if they get even half the number of cars per capita per population that we have right now, there are a lot of folks in china. there are a lot of folks in india. their standards of living of starting to rise and they are starting to be interested in buying cars. if they even approached the amount of car ownership that we have, oil will run out very quickly. on the way, prices will spike up naturally, no matter what we do. so, it is a huge need for us to increase our fuel efficiency on

cars now. that is why one of the things i did last year is actually taking effect this week -- raising a national fuel efficiency standard. it is the first time we have done that in a very long time. but, frankly, even with us raising those standards, i think consumers, just in terms of pocketbook interests will be even more interested in buying hybrids and electric cars. two things that we could do that would make a difference now -- we have to make sure that those cars are made here, in the united states of america. part of the reason why it is so important to develop battery technology here is that it helps us leverage more auto production here, in the united states. that, in the same way that bob

was talking about what was happening here at sell bread -- @ celgard, the grant we gave broad 300 jobs. the same is true in the auto industry. why are we bailing out gm? gm might have employed several hundred thousand, but when you look at all of the suppliers involved, and the economy, you could have seen in other couple million jobs lost that would have huge implications for the economy. now, gm is actually making a profit, there started to hire people back. one thing we need to do is make sure they are made in the united states. the second thing we need to do is to create the electricity grid, what we are calling the "smart grid."

part of the reason we can drive our cars is because there is a gas station every so often. there are roads. there are gas stations. we know how to fuel up our automobiles. if we want to have everybody getting maximum use of a hybrid car or an electric car, part of what we need to do is create a similar distribution mechanism for electricity. one of the exciting things about these hybrids is we want to get to the point where we have a plug-in hybrid, where you have a gas station at your house called an electric socket. you'll be able to plug your car in at night. some of the energy that was stored in the car, that could add to go back into the house. then, when you are ready to go, you can get their energy and use it to drive. to do all of that, we need a

better electricity grid. that is one of the major investments that we want to start making. that, by the way it is in investment that only the government working with the private-sector can make. you are. a lot of talk these days about the government. -- you are hearing a lot of talk about the government these days. the government is horrible. look. i do not want the government any more than business as eric. there are some things that -- that is necessary. there are some things that ceo's cannot invest in. no company is going to make investment for a public good. none of you would expect a private company to fund our military. there are just some things that you cannot do on your own.

the private sector is not going to do it. it is not profitable. is bob was the guy who had to build the road, -- if bob was the guy who had to build the road, he would have a bunch of people that were not paying for it. that is where government comes in. the same is true for the electricity grid. we have to create that infrastructure, just like broadband lines. that is what the chinese are doing. that is what the indians are doing. that is what the germans are doing. that is what the united states is going to have to do. i have time for a couple of more questions. this is my guy reggie, from charlotte, n.c., by the way. [applause] >> he told me he is not getting on the plane going back. he is spending the weekend here.

all right. let's see. i want to make sure that i get a woman in here. make sure that it is balanced. this young lady right here. >> thank you, mr. president. we are honored to have you here today. i work at celgard. we have wonderful ceo's that take care of us and help the company grow. my question is, in the tough times that we have now, is it a wise decision to add more taxes to us with the health care? we are over-taxed as it is. >> let's talk about that. this is an area where there has been a whole lot of information -- of misinformation. i will have to work hard to clean up a lot of the misapprehensions' that people

have. here is the bottom line. number one is that we are the only -- we have been come up's last week, the only advanced country that allows 50 million of its citizens to not have any health insurance, and the vast majority of those folks work. it is just that but they did not happen to work for a company that is either big enough or generous enough to provide them any coverage. that is the first point. there is a moral imperative that is important. number two -- you do not know who might end up being in that situation. see, those of us who have health care right now ask ourselves

well, should this be a priority right now? anybody here who lost their jobs, and then cobra ran out, where colbern was not subset get -- or cobra was not subsidized, and you had someone at home who was sick or a child that got sick, you would suddenly say, now i see the need. part of what we have to do is always say to ourselves there, but for the grace of god go i.. that is point number two. point number two -- 3, the way that insurance companies have been a target -- arguing -- operating, even if you have insurance, you did not know what

you have. if you are not lucky enough to work for a big company that is a big pool, essentially it is almost self-insured, which is happening is you are going out on the marketplace. you may be my -- you may be buying insurance. you think you're covered. when you get sick, they decide to drop the insurance, right when you need it, or they try to find what they consider to be a pre-existing condition that would justify them cancelling your policy, or there is some fine print in there where you have a lifetime limit and it turns out you thought you had coverage, but it only goes up to a certain point, and then afterwards you have to pay out of pocket. even after paying all those premiums, you are now in the whole and you're going -- you are now in the hole, and you are going bankrupt.

the final point, set aside anything we did in the reform, if we allowed the contradictory to go on, it is out of control -- the cost of health care. i've not talked to bob about what his costs look like for celgard employees, but i can tell you that health-care costs have gone up. the price of health care has gone up three times faster. -- three times faster than wages. either the company is going to have to swallow those costs, which means it is less money they will use to hire new workers, where they will pass along those costs to their employees in the form of higher premiums or higher deductibles. what is happening federally, because the costs are so lot of control, all the programs that we already have like medicare,

medicaid, the children's health insurance program, all of those things are completely out of control. if you're concerned about a deficit, what you are really concerned about is the cost of medicare, medicaid and all the other programs that are already in place. here is what we did. what we said is, number one, we will have the basic principle that everybody gets coverage. the way we appointed to that -- the way we are going to do that is to say that most people individually, they should not buy health insurance on their own because they have no leverage. instead, we will set up a big pool, a market place that allows everybody to buy into it. members of congress will be a part of it, so you know it is going to beat a good deal. they have to look out for their own families.

just like wal-mart is able to leverage a really good price because they are such a big purchaser, this pool will be a big purchaser and it will be able to get a better deal from insurance companies. that is the first point. that will drive down the prices for people that are participating and it will allow everybody to get a decent deal on insurance. what we do is provide tax credits to people that can still not afford it, so that they can afford it. that is the first point. the second point is that we have the strongest reforms in history on insurance. all those things i told you about -- pre-existing conditions, you finding yourselves getting dropped even though you have been paying a premium for 15 years, those policies will be over. you will be protected as a consumer to make sure you have

security and production if -- protection if you have insurance already. that is the second thing we do. the third thing we do is actually put in place a whole bunch of mechanisms to start reducing the actual cost of health care. for example, one of the things that we do is to say we are going to start encouraging paying doctors, not based on how many tests they take, but based on the quality of the outcome. it turns out that a lot of times, if you go to the doctor, you get one test, then, you go get referred to a specialist, get another test, then, maybe you go to a third person, a surgeon, and to get another test. it is all the same test, and you are paying three times. we will take one test, and an e-

mail the test to everybody. [laughter] [applause] >> right? or, have all three doctors in the room when the test is being taken. that is an example of the kinds of things that save money and start reducing costs over the long term. we have embedded how medicaid and medicare reimburses, all of these ideas to actually reduce the cost of care. our hope is that over time, over the next three, four, five, six years, because of all these changes, that we have actually saved money from this, even though more people are covered. you will hear the critics and the republicans say that is not common sense. if you add 30 more people, a

test to cost more money. you cannot pretend that that will not cost us on the deficit. i for this criticism. let me give you an example. if you have a house. -- if you have a house, a hole in your roof, and it is raining and snowing through this brick -- through this roof, and there are some people that are nice and warm in rooms where the rules is ok, and then you have a few -- where the roof is ok, and then you have family debt is shivering and cold, repairing the roof will cost money. but, if all of the water damage and all of the heat is going out of the roof, you count all of those savings and over time, it turns out it is saving money and all of the family members are

warm, too. you are not the only one, right? that is essentially what we are trying to set up. the last point that i want to make is that all of those savings that we are anticipating, we do not even count those when we come to make sure that it is deficit-neutral. here is how we are paying for this thing. we are eliminating a whole bunch of waste fraud and insurance subsidies that were being paid out under medicare that are not making our seniors any healthier. you have a sweet deal for insurance companies right now in a program called medicare advantage where they get $18 billion a year paid to them to manage a medicare program that about 80% of seniors are getting directly from the government and

it is working just fine. it is just a subsidy to them that does not make anybody healthier. we are saying, let's eliminate the subsidy. that is how we pay for half of the stink. the other half of that, it is true -- -- that is how we pay for half of this think. the other half of it w -- it is true. let me give you an example. i do not think it will affect you, but i do not know your family circumstances. right now, if you are on salary, you get your salary from celgard or any of the companies are around here, you are paying your medicare tax on all of that, right? but, if you are warren buffett, and you get most of your money from dividends and capital gains, you do not pay medicare

cat -- medicare taxes on that. you are eligible for it, he will get the same benefits as anybody else, but because your source of income is what is called on earned income, even not have to pay. i am thinking to myself, how is it that the guy who was cleaning up the office is paying the medicare tax and the guy who is making capital gains is not? what we said was that if you make more than two hundred thousand, 21 $50,000 the year -- slaughtered $50,000 a year, that is on earned, you should have to pitch in like everybody else. you will be using it like everybody else. it is a concept of fairness. now, what the congressional budget office -- i am sorry.

these answers are long sometimes. i want to make sure that i really answering your question. i really want to respect the importance of your question. with the congressional budget office has said is that as a consequence of the savings from the waste and fraud, combined with the new revenue sources that i just mentioned, this thing is going to reduce our deficit by over $1 trillion -- over a dollar trillion. we are actually saving money for the government. we close the roof. the house is now insulated. it is warm. in the meantime, we have a whole bunch of people that were left out in the cold that are now being taken care of. that is the concept. i know that for a lot of people, they have a legitimate concern about government

spending seeming like it is out of control. i understand that. i feel that. understand what happens. when i walked in, we already had a $1.30 trillion deficit. that was before i did a thing. we had a dollars trillion in accumulated debt from the war in iraq -- $8 trillion in accumulated debt from the war in iraq, not paid for, the prescription drug plan, not paid for, bush tax cuts, not paid for -- we already had this debt that had piled up, but nobody noticed because things were going kind of good. that is just like people not noticing that their credit cards were going up or their home equity was going up. when things are going good, you

tend not to notice. all of that debt had already accumulated. we, then, had to spend on the recovery act to do all of the things -- unemployment insurance, cobra, essentially helping states to keep their budget afloat so that they did not have to lay off teachers and police officers and firefighters, all of which would the -- all of which would have further depress the economy. we would have recovered a lot later. the investments we are making in things like celgard to help spur economic growth -- we had to spend that. that is only a fraction of our debt. in addition, what happens when the economy goes south is that there are fewer tax revenues. you put more money out to help people with unemployment insurance and things like that,

but you are getting less money in because people are out of work and not making money. the bottom line is that we have a significant that. that is why i am and -- institute in a government freeze. we have a pay as you go. you cannot spend without pain for. the big thing, if you are worried about leaving that for the next generation, which i know you are, the most important thing we have to tackle is our health care cost. medicare, is by far -- medicare and medicaid are the biggest thing that are looming in the horizon in terms of what our debt is point to be. nothing comes close. is this health-care bill never existed, if i did not do anything about it, we would actually be worse off. even with the savings, we are still going to have to do more. if you did not believe that, and

go on our website, www. white house.gov. a lot of people think that if you've eliminated your marks, that would settle everything. foreign aid accounts for about 1.5% or 2% of the budget. most of the budget is medicare, social security medicaid -- social security, medicaid, and defense spending. that accounts for about 70% of the budget. so, all of this other stuff that we sometimes argue about, that is not the big stuff. we will have to tackle the big stuff if we are going to get our budget under control. boy, that was a long answer. i am sorry.

i hope everybody -- i hope i answered your question. [applause] >> i have to make this the last question. >> my name is matt. i flew down from cleveland, ohio. we are a supplier to celgard. about 75 of those 1000 jobs are in northeast ohio. a quick question, if reggie is not on the plan, could i get a ride to the airport? >> let's go. the question, the limousines that you drive, electric, sometime soon? [laughter] >> i will be honest with you. when i first got secret service protection, i asked, can we make these cars hybrids. and, i apologize, because secret service said no.

the reason is not because they are bad guys, it is because the cars that i and then, they are like tanks. as you might imagine, there is a little bit of extra stuff on there. they are reinforced. they weigh twice or three times what an ordinary car ways. they could not get the performance in terms of acceleration using a hybrid engine. but, here is the good news. as a part of our overall energy strategy, i have ordered us to triple the federal fleet that is hybrid. so, government purchases an awful lot of cars for all kinds of things, -- i am assuming we are the biggest car purchaser. we are big.

we are using our purchasing power to help encourage the clean car industry and hopefully to get you more business, all right? thank you, everybody. god bless you. thank you. [laughter] [applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] ♪