my presidency is entering the fourth quarter. interesting stuff happens in the fourth quarter, and i'm looking forward to it. but, glowing into the fourth quarter, you usually get a time-out. i am now looking forward to a quiet time-out. christmas with my family. i want to wish everybody a merry christmas, a happy hanukkah, a happen new year. i hope all of you get some time to spend with your families as well. because one thing that we share, is that we are away too much from them. and, now, josh has given me the who's been naughty and who's been nice list, and i'm going to use it to take some questions, and we're going to start with terry brown. >> reporter: thank you, mr. president. starting with north korea, seems to be the biggest topic today.

what does the proportional response look like to the sonny hack? and did sony make the right decision in pulling the movie or does that set a dangerous precedent in this situation? >> let me address the second question first. sony is a corporation. it -- suffered significant damage. there were threats against the employees, i am sympathetic to the concerns that they faced. having said all of that. yes, i think they made a mistake. in this inner connected digital world, there are going to be opportunities for hackers to engage in cyberassaults, both in the private sector and in the public sector. now, our first order of business

is making sure we do everything to harden sites and prevent those kind of attacks from taking place. when i came into office i set autopsy a cyber security interagency team to look at everything we can do oat the government level to prevent these kinds of attacks. we've been coordinating with the private sector, but a lot more needs to be done. we are not even close to where we need to be. and, one of the things in the new year that i hope congress is prepared to work with us on, is strong cyber security laws that allow for information-sharing across private sector platforms as well as the public sector, so that we are incorporating best practices and preventing these attacks from happening in the first place. but even as we get better, the hackers are going to get better, too. some of them are going to be

state actor, some are going to be non-state actors. all of them are going to be sophisticated and many of them are going to do some damage. we cannot have a society in which some dictator someplace can start imposing censorship here in the united states. because if somebody is able to intimidate folks out of releasing a satire movie, imagine what they do if they see documentary they don't like or news reports they don't like or even worse, imagine if producers or distributors and others, start engaging in self-censorship, because they don't want to offend the sensibilities of somebody whose

sensibilities probably need to be offended. so, that's not who we are. that's not what america's about. again, i'm sympathetic that sony, as a private company, was worried about liabilities and this, and that, and the other. i wished they had spoken to me, first. i would have told them. do not get into a pattern in which you are intimidated by these kinds of criminal attacks. >> imagine if, instead of it being a cyber threat, somebody had broken into their offices and destroyed a bunch of computers. and stolen disks. and -- is that what it takes for suddenly you to pull the plug on

something? so, we'll engage with, not just the film industry but the news industry and the private sector around these issues we already had. we will continue to do so. but, i think all of us have to anticipate occasionally there are going to be breaches like this. they're going to be costly, they're going to be serious. we take them with the utmost seriousness. but we can't start changing our patterns of behavior any more than we stopped going to a football game, because there might be the possibility of a terrorist attack. any more than boston didn't run its marathon this year, because of the possibility that somebody might try to cause harm. so, let's not get into that way of doing business. >> reporter: do you think the

response to this attack, would you consider taking a symbolic step like watching the movie yourself, or doing something extreme here? >> i got a long list of movies i'm going to be watching. >> reporter: will this be one of them? >> yeah. i never release my full movie list. but, let's talk about the specifics of what we now know. the fbi announced today, and we can confirm, that north korea engaged in this attack. i think it says something interesting about north korea, that they decided to mount an all-out assault on a movie studio, because of a satirical movie because of seth rogen and james franco. i love seth and i love james, but the notion that that was a

threat to them, i think gives you some sense of the kind of regime we're talking about here. they caused a lot of damage. and we will respond. we will respond bro portionally and respond in a place and time and manner that we choose. it is not something that i will announce here today at a press conference. more broadly, though, this points to the need for us to work with the international community to start setting up some very clear rules of the road in terms of how the internet and cyber operates. right now, it's sort of the wild west. and, part of the problem is, you've got weak states that can engage in these kinds of attacks. you've got nonstate actors that can do enormous damage. that's part of what makes this issue of cyber security so

urgent. again, this is part of the reason why it's going to be so important for congress to work with us and get an actual bill passed that allows for the kind of information-sharing we need. because, you know, if we don't put in place the kind of architecture that can prevent these attacks from taking place, this is not just going to be affecting movies, this is going to abe affecting our entire economy in ways that are extraordinarily significant. and, by the way, i hear you're moving to europe? where are you going to be? >> brussels. >> brussels? >> starting a new -- >> well, congratulationses. >> reporter: it's been a long road. >> there's no doubt what belgium needs is a version of politico! [ laughter ]

>> yeah, the waffles are delicious there, by the way. >> you've been naughty. go ahead. >> reporter: thank you, mr. president. looking ahead to your work with congress next year, you mention tdz an area of possible compromise. tax reform. so, i am wondering, do you see a republican congress as presenting a better opportunity for actually getting tax reform next year? will you be putting out a new proposal? are you willing to consider both individual and corporate side of the tax ledger there? and, also, are you still concerned about corporate inversion? >> i think an all-democratic congress would have provided an even better opportunity for tax reform, but i think talking to speaker boehner and leader mcconnell, that they are serious

about wanting to get some things done. the tax area is one area where we can get things done. and i think in the coming weeks leading up to the state of the union, there will be conversations at the staff levels about what principles each side of looking at. i can tell you, broadly, what i'd like to see. i'd like to see more simplicity in the system. i would like to see more fairness in the system. with respect to the corporate tax reform issue, we know that there are companies that are paying the full freight, 35%, higher than just about any other company on earth, if you're paying 35%, and then there are other companies that are paying zero because they have better accountants or lawyers. that's not fair. there are companies that are parking money outside of the country because of tax avoidance. we think that it's important that everybody pay something if

in fact they are effectively head quartered in the united states. in terms of corporate inversion, those are situations where companies really are head quartered here, but on paper, switch their headquarters to see if they can avoid paying their fair share of taxes. i think that needs to be fixed. so, fairness, everybody paying their fair share, everybody taking responsibility. i think it's going to be very important. some of those principles, i've heard republicans say they share. how we do that, the devil is in the details. and i'll be interested in seeing what they want to move forward. i'm going to make sure that we put forward some pretty specific proposals, building on what we've already put forward. one other element of this that i think is important, is -- and

i've been on this hobby horse now for six years -- bless you -- we've got a lot of infrastructure we've got to build in this country if we're going to be competitive. roads, bridges, airports, electrical grids, water systems, sewage systems. we are way behind and early on, we indicated there's is a way of us potentially doing corporate tax reform, lowering rates, eliminating loopholes so everybody is paying their fair share and, during that transition, also providing a mechanism where we can get some infrastructure built. i would like to see us work on that issue as well, historically, obviously, infrastructure has not been a democratic or republican issue, and i would like to see if we can return to that tradition. julie pace? >> reporter: thank you, mr. president. i want to ask you about cuba.

what do you think the dissidents or advocates inside cuba. fear giving the castro regime economic benefits without allowing rights. why not do the same with cuba as you did with myanmar. do you have any indication north korea was acting with another country, perhaps china? >> we have no indication north korea was acting in conjunction with another company. with respect to cuba, we are glad that the cuban government has released, slightly over 50 disdents that they are going to be allowing the international committee of the red cross, united nations human rights agencies to operate more freely inside of cuba and monitor what is taking place. i share the concerns of

dissidents there, and human rights activists. that inth is still a regime that represses its people. as i said, when i made the announcement, i don't anticipate overnight changes. but what i know, deep in my bones, is if you've done the same thing for r50 years and nothing's changed. you should try something different if you want a different outcome and this gives us an opportunity for a different outcome. because suddenly, cuba is open to the world in ways it's not been before. it's open to americans traveling there, in ways that it hasn't been before. it's open to church groups visiti visiting, you know, their fellow believers inside of cuba in ways they haven't been before.

it offers the prospect of telecommunications. and the internet. being more wildly available in cuba in ways that it hasn't been before, and over time, that chips away at this hermetically sealed society. and i believe, offers the best prospect then of leading to greater freedom, greater self-determination on the part of the cuban people. i think it will happen in fits and starts. but, through engagement, we have a better chance of bringing about change than we would have otherwise. >> reporter: are there ways of cuban being at the end of your presidency is. >> i think it would be unrealistic to map out exactly where cuba will be. but change is going to come to cuba. it has to. they have an economy that

doesn't work. they've been reliant for years, first on subsidies from the coffee yet union, then on subsidies from venezuela. those can't be sustained and the more the cuban people see what's pop, the more interested they are going to be in change. but how society has changed, is country specific, is culturally specific. it could happen fast. it could happen slower than i'd like. but it's going to happen, and i think this change of policy is going to advance that. leslie clark? >> reporter: thank you, mr. president. i have a number of questions as well. i wanted to -- >> do i have to write all of these down? >> a number sounded intimida intimidating. >> if i can. >> i want to see if you got assurances from the cuban government that it would not

sabotage the deal as it has in the past when past presidents have made similar overtures to the government. >> be specific, what do you mean? >> reporter: when the clinton administration raised over tours, they shot down claims. sort of has pattern of doing provocative -- >> just general provocative activity. >> reporter: provocative activity. i want to see what is your knowledge of fidel castrcastro, he have any role in the talks? when you talked to president raul castro, did fidel castro's name come up? did you ask about him, how is he doing? we haven't seen him in a while. given the deep opposition of republicans in congress lifting the embargo. the embassy, any changes that you're doing, are you going to personally get involved about talking to them about what they

want to do to block money on a new embassy? >> i love that. this is taking up a lot of time. all right. so, with respect to sabotage, i mine, my understanding of the history, for example, the plane being shot down, it's not clear that that was the cuban government purposely trying to undermine overtures by the clinton administration. it was a tragic circumstance that ended up collapsing talks that had begun to take place. i haven't seen an historical record that suggests they shot the plane down specifically in order to undermine overtures by the clinton government. i think that the -- it is not precedented for the president of the united states, and the president of cuba, to make an announcement at the same time that they are moving towards

normalizing relations. so, there hasn't been anything like this. in the past. that doesn't mean that over the next two years, we can't anticipate them taking certain actions that we may end up finding deeply troubling. >> either inside of cuba or with respect to their foreign policy. and that could put significant strains on the relationship. but that's true of a lot of countries out there where we have an embassy. and the whole point of normalizing relations, is it gives us a greater opportunity to have an influence with that government than not. so, i would be surprised.

if the cuban government purposely tries to undermine what is now effectively its own policy. i wouldn't be surprised if they take at any given time actions that we think are a problem. and we will be in a position to bond to whatever actions they take the same we do with a whole range of countries around the world when they do things we think are wrong. >> but the point is, we will be in a better position, i think, to actually have some influence and there may be carrots as well as sticks that we can then apply. the only way fidel's name came up, i think i may have mentioned this in the david muir article -- interview that i did, was i delivered a fairly lengthy statement at the front end about how we're looking forward to a new future in the relationship

between our two country, but that we are going to continue to press on issues of democracy and human rights which we think are important. in my opening remarks probably took about 15 minute, which, on the phone, is a pretty long time and, at the end of that, he said, mr. president, you're still a young man. perhaps you have the -- at the end of my remark i-apologized for taking such a long time, but i wanted to make sure that before we engage in the conversation, we -- he was very clear about where i stood. he said, oh, don't worry about it, mr. president, you're still a young man, and you still have a chance to break fidel's record, he once spoke seven hours straight. and then president castro proceeded to deliver his own preliminary remarks that lasted at least twice as long as mine.

[ laughter ] >> then i was able to say, obviously, it runs in the family. but that was the only discuss of fidel castro that we had. i sort of forgot all from the other questions. >> reporter: i have a few more. how personally involved are you going to get -- >> well, with respect to congress, we cannot unilaterally bring down the embargo. that's codified in the act. what i do think it is going to happen, there's going to be a process where congress digests it, there are bipartisan supporters of our new approach. there are bipartisans detractors of this new approach. people will see how the actions we take unfold. and i think there's going to be a healthy debate inside of congress, and i will certainly weigh in. i think that ultimately we need

to go ahead and pull down the embargo, which i think has been self-defeating in advancing the aims that we're interested in. but i don't anticipate that that happens right away. i think people are going to want to see how does this move forward before there's any serious debate about whether or not we would make major shifts in the embargo. all right. there you go. >> reporter: i want to follow on that by asking, under what conditions did you meet with president cass stroe in havana, and if you have certain conditions that you want want to see before doing that. and on the hack, i know you said you're not going to announce your response, but could you at least say if you're considering additional economic or financial sanctions on north korea. can you rule out military force or some kind of fabric of your own? >> i think i'll leave it where i

left it. we just confirmed that it was north korea. we had been working up a range of options. they will be presented to me. i will make a decision on those based on what i believe is proportional and appropriate to the nature of this crime. with respect to cuba, we're not at a stage here where me visiting cuba, or president cass stroe coming to the united states is in the cards. i don't know how this relationship will develop over the next several years. i'm a fairly young man. i imagine at some point in my life i will have the opportunity to visit cuba and enjoy interacting with the cuban people, but there's nothing specific where we're trying to

target some sort of visit on my part. >> colleen nelson. >> reporter: thank you, mr. president. >> there you are. >> reporter: you spoke earlier about 2014 being a break-through year on executive actions on climate change and cuba but you didn't make progress on your legislative agenda and lawmakers said they're less inclined to work with you if you burr sue executive actions so aggressively. are you going to continue to pursue aggressive actions, or have you concluded it's not possible to break the fever in washington and the grid lock here? >> i think the real opportunity to get things done in congress. as i said before i take speaker boehner and mitch mcconnell at their words that they want to get things done. i think the american people would like to see us get some things done. the question is going to be, are

we able to celebrate out those areas where we disagree and those areas where we agree. i think there will be tough fights on areas where we disagree. if republicans seek to take take health care away from people who just got it, they will meet stiffer resistance from me. if they try to water down consumer protections we put in place in the afterplath of the financial crisis, i will say no. and i'm confident i'll be able to uphold vetoes of those types of provisions. but, on increasing american export, on simplifying our tax system and on rebuilding our infrastructu infrastructure, my hope is we can get some things done. i've never been purr swieded by this argument, that if it

weren't for executive actions, they would have been more productive. there's no evidence of that. so, i intend to continue to do what i'm doing, which is where i see a big problem, and the opportunity to help the american people. and it is within my lawful authority to provide that help, i'm going to do it. and i will then, side-by-side, reach out to members of congress, reach out to republicans and say, let's work together. i'd rather do it with you. immigration is a classic example. i was really happy when the senate passed a bipartisan comprehensive immigration bill and i did everything i could for a year and a half. to provide republicans the space to act. and showed, not only great patience but flexibility, saying to them, look. if there are specific changes you would like to see, we're

willing to compromise, we are willing to be patient and work with you. ultimately it wasn't forthcoming. and so, the question is going to be, i think, if executive actions on areas like minimum wage, or equal pay, or having a more sensible immigration system, are important to republicans, if they care about those issues, and the executive actions are bothering them, there's a very simple solution and that is pass bills and work with me to make sure i'm willing to sign those bills. both sides are going to have to compromise. on most issues, in order for their initiatives to become law, i'm going to have to sign off, that means they have to take into account the issues that i care about. just as i'm going to take into account the issues that they

care about. all right. i think this is going to be our last question. juliette -- there you go. >> reporter: thank you so much. one of the first bills that mitch mcconnell sent to you is one that authorized the construction of the pipeline. when you talked about this in the past you minimized the benefits and highlighted the risks. i wonder what you would do given the public majority and also, what do you see as the benefit, and given the precipitous in drop of oil prices recently, does that change the calculous in changes of how that contributes to climate change and whether it makes sense to go forward with that project? >> i don't think i minimized the benefits. i think i described the benefits. at issue on keystone is not american oil, it is canadian

oil. that is drawn out of tar sands in canada. that oil currently is being shippeded out, through rail or trucks, and it would save canadian oil companyies, and th canadian oil industry, an enormous amount of money, if they could simply pipe it all of the way through the united states, down to the gulf. once that oil gets to the gulf, it is then entering into the world market, and it would be sold all around the world. so, there's no -- i won't say "no" -- there's very little impact, nomal