this speech comes as congress is arguing over extending the payroll tax cut and unemployment benefits that expire at the end of this month. there is reaction from a republican senator before the president speaks lashing out saying " it's ironic the president would give a major lecture to the american people today on ek noik nomic fairness. because of his reckless spending agenda every child comes into the world owing $46,000. the president is starting to speak now. let me let you hear from the president. >> thank you so much. thank you. good afternoon, everybody. well, i want to start by thanking a few folks who joined us today. we have the mayor of osawatomie, phil douglas is here.

we have the superintendent, gary french in the house. and we have the principal of osawatomie of the high school, doug kriz hom. doing an outstanding job of health and human services, kathleen sebelius. we love kathleen. it is great to be back in the state of texas -- oops! state of kansas.

i was giving bill a hard time. he was here a while back. as many of you know, i have roots here. i'm sure you are all familiar with the obamas of osawatomie. actually i like to say i got my name from my father, but i got my accent from and my values from my mother. she was born in wichita. her mother grew up in augusta. her father was from el dorado. my kansas roots run deep. my grandparents served during

world war ii. he was a soldier in patton's army. she was a worker on a bomber assembly line. together they shared the optimism of a nation that try umped over the great depression and fascism. they believed in an america where hard work paid off. responsibility was rewarded. and anyone could make it if they tried. no matter who you were. no matter where you came from. no matter how you started out. these values gave rise to the largest middle class and the strongest economy that the world has ever known. it was here in america that the

most productive workers, the most innovative companies turned out the best products on earth. you know what every american shared in that pride and success. from those in the executive suites to those in middle management to those on the factory floor. you could have confidence that if you gave it your all, you would take enough home to raise your family and send your kids to school and have your health care covered. put a little away for retirement. today we are still home to the world's most productive workers. we are still home to the world's most innovative companies. but for most americans, the basic bargain that made this country great has eroded. long before the recession hit,

hard work stopped paying off for too many people. fewer and fewer of the folk who is contributed to the success of our economy actually benefitted from that success. those at the very top grew wealthier from their incomes and investments and wealthier than ever before. everybody else struggled with costs that were growing and paychecks that weren't. too many families found themselves racking up more and more debt to keep up. for many years, credit cards and home equity loans papered over this harsh reality. in 2008 the house of cards collapsed. we all know the story by now. mortgages sold to people who couldn't afford them or

sometimes understand them. banks and investors allowed to keep packaging the risk and selling it off. huge bets and huge bonuses made with other people's money on the line. regulators who were supposed to warn us about the dangers of all this, but looked the other way. or didn't have the authority to look at all. it was wrong. it combined the breathtaking greed of a few with irresponsibility all across the system. it plunged our economy into a world from a crisis which which we are still fighting to recover. it claims the jobs and the homes and the basic security of millions of people, innocent hardworking americans who had met their responsibilities but were left holding the bag. ever since, there has been a

raging debate over the best way to restore growth and prosper y prosperity, restore balance, restore fairness. throughout the country, it sparked protests and political movements from the tea party to the people who had been occupying the streets of new york and other cities. it left washington in a near constant state of gridlock. it has been the topic of heated and sometimes colorful discussion among the men and women running for president. osawatomie, this is not just another political debate. this is the defining issue of our time. this is a make or break moment for the middle class and all of those who are fighting to get into the middle class. because what's at stake is whether this will be a country where working people can earn

enough to raise a family, build a modest savings, own a home, secure their retirement. now, in the midst of this debate, there are some who seem to be suffering for a collective amnesia. after all that's happened, after the worst economic crisis and the worst financial crisis since the great depression, they want to return to the same practices that got us into this mess. in fact, they want to go back to the same policies that stacked the deck against middle class americans for way too many years and their philosophy is simple. we are better off when everybody is left to fend for themselves and play by their own rules. i am here to say they are wrong.

[ applause ] >> i'm here in kansas to reaffirm my deep conviction that we are greater together than on our own. i believe this country succeeds when everyone gets a fair shot. when everyone does their fair share. when everyone plays by the same rules. these are not democratic values or republican values. these aren't 1% values or 99%

values. they are american values. we have to reclaim them. >> this is not the first time americans have faced this choice. or the turn of the last century when the nation of farmers was transitioning to be the world's industrial giant. we had to decide. would we settle for a country where most of the new railroads and factories would be controlled by a few giant monopolies that kept prices high and wages low? would we allow our workers to work unsave and unsanitary rules and conditions? there were people who thought massive inequality and

exploitation of people was just the price you pay for progress. theodore roosevelt disagreed. he was the republican son of a wealthy family. he praised what the titans of industry had done to create jobs and grow the economy. he believed then what we know is true today. the free market is the greatest force for economic progress in human history that led to a prosperity and standard of living unmatched by the rest of the world. roosevelt also knew that the free market has never been a free license to take whatever you can from whoever you can.

he understood the free market works when there rules of the road that ensure competition is fair and open and honest. so he busted up forcing the companies to compete for consumers with better services and better prices. today they still must. he fought to make sure businesses couldn't profit by exploiting children or selling food or medicine that wasn't safe. today they still can't. in 1910, teddy roosevelt came here to osawatomie and laid out a vision for what he called a new nationalism. our country, he said, means nothing unless it means the triumph of a real democracy. an economic system under which

each man shall be guaranteed the opportunity to show the best that there is in him. now, for this roosevelt was called a radical, he was called a socialist. even a communist. today we are a richer nation and a stronger democracy because of what he fought for in his last campaign. an eight-hour work day and minimum wage for women. insurance for the unemployed. for the elderly and those with disabilities. political reform and a progressive income tax.

today over 100 years later, our economy has gone through another transformation. over the last few decades, huge advances in technology allowed businesses to do more with less and made it easier to set up shop and hire workers anywhere they want in the world. many of you know firsthand the painful disruptions this caused for a lot of americans. factories where people thought they would retire suddenly picked up and went overseas where workers were cheaper. steel mills that needed 100 or 1,000 employees are able to do the same work with 100 employees. so layoffs too often became permanent and not a termerary part of the business cycle.

these didn't just affect blue collar workers. if you were a bank teller or phone operator or a travel agent, you saw many of your professionals replaced by internet. accountants and middle management can be outis sourced to china or india. if your job can be done cheaper by a computer or someone in another country, you don't have a lot of leverage when it comes to asking for better wage or benefits. especially since fewer americans are part of a union. just as there was in teddy roosevelt's time, there is a certain crowd in washington who for the last few decades have said let's respond to this economic challenge with the same thing. the market will take care of

everything, they tell us. if we just cut more regulations and cut more taxes, especially for the wealthy, our economy will grow stronger. sure they say. there will be winners and losers, but if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. and, they argue, even if prosperity doesn't trickle down, that's the price of liberty. it's a simple theory. we have to admit it's 1 to speaks to our rugged individualism and healthy skepticism of too much government. that's in america's dna. and that theory fits well on a bumper sticker. but here's the problem. it doesn't work. it has never worked.

it didn't work when it was tried in the decade before the great depression. it's not what led to the incredible postwar booms of the 50s and 60s. and it didn't work when we tried it during the last decade. understand it's not as if we haven't tried this theory. remember in those years in 2001 and 2003, congress passed two of the most expensive tax cuts for the wealthy in history. what did it get us? the slowest job growth in a half

century. massive deficits. it made it much harder to pay for the investments that built this country and provided the basic security that helped millions of americans reach and stay in the middle class. like education and infrastructure. science and technology. medicare and social security. remember in those same years thanks to the same folks who are now running congress, we had weak regulation and little oversight and what did it get us? insurance companies that jacked up people's premiums with impunity and denied care to patient who is were sick. mortgage lender tha eers that t families into buying homes they cooped afford. lack of oversight nearly destroyed our entire economy.

we simply cannot return to this brand of you are on your own economics if we are serious about rebuilding the middle class in this country. we know it doesn't result in a strong economy. it results in an economy that invests too little in its people and in its future. it doesn't result in a prosperity that trickles down. it results in a prosperity that is enjoyed by fewer and fewer of our citizens. look at the statistics. in the last few decades, the average income of the top 1% has gone up by more than 250%.

$1.2 million per year. i'm not talking about millionaires and people who have a million dollars, but people who make a million dollars every single year. for the top 100th of 1%, the average income is now $27 million per year. the typical ceo who used to earn about 30 times more than his or her worker now earns 110 times more. and yet over the last decade the incomes of most americans have fallen by about 6%. this kind of inequality, a level that we haven't seen since the great depression hurts us all. when middle class families can no longer afford to buy goods

and services that businesses are selling, when people are slipping out of the middle class, it drags down the entire economy from top to bottom. america was built on the idea of broad based prosperity and strong consumers all across the country. that's why a ceo like henry ford made it his mission to pay his workers enough so they could buy the cars he made. it's also why a recent study showed that countries with less inequality tend to have stronger and steadier economic growth over the long run. inequality distorts our democracy and gives an outside voice to the few who can afford a high priced lobbyist and campaign contributions. it runs the risk of selling out our democracy to the highest bidder.

it leaves everyone else rightly suspicious that the system in washington is rigged against them. elected representatives are not looking out for the interests of most americans. there is an even more fundamental issue at stake. this kind of gaping inequality gives lie to the promise that is at the very heart of america. this is a place where you can make it if you try. we tell people and our kids that in this country even if you are born with nothing, work hard and you can get into the middle class.

we tell them that your children will have a chance to do better than you do. that's why immigrants from around the world historically flocked to our shores and yet over the last few decades, the rungs on the ladder of opportunity have grown further and further apart. the middle class shrunk. a few years afterworld war 2, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. by 1980 that chance had fallen to around 40%. if the trend of rising inequality over the last few decades continues, it is estimated a child born today will only have a 33% chance of making it.

it's heart breaking enough that there millions of working families in this country who are now forced to take their children to food bank for a decent meal. the idea that those children may not have a chance to climb out of that situation and back into the middle class no matter how hard they work? that's inexcusable. it is wrong. it flies in the face of everything that we stand for. [ applause ] [ applause ] >> fortunately that's not a future that we have to accept.

because there is another view about how we build a strong middle class in this country. a view that is truer to our history. a vision that has been embraced in the past by people of both parties. for more than 200 years. it's not a view we should somehow turn back technology or put up walls around america. it's not a view that says we should punish profit or success or pretend government knows how to fix society's problems. it is a view that says in america we are greater together. when everyone engages in fair play and everybody gets a fair shot and everybody does their fair share. [ applause ]

so what does that mean for restoring middle class security in today's economy. it starts by making sure that everyone in america gets a fair shot at success. the truth is, we will never be able to compete with other countries when it comes to who is best at letting their businesses pay the lowest wages. who is best at busting unions. who is best at letting companies pollute as much as they want. that's a race to the bottom that we can't win. we shouldn't want to win that race. those countries don't have a strong middle class. they don't have our standard of living. the race we want to win.

the race we can win is a race to the top. the race for good jobs that pay well and offer middle class security. businesses will create those jobs in countries with the highest skilled, highest educated workers and the most advanced transportation and communication and the strongest commitment to research and technology. the world is shifting to an innovation economy. nobody does innovation better than america. nobody does it better. nobody has better college oers universities or a greater diversity of talent and ingenuity. no one's enterprises are more driven or daring.

the things that are our strengths matchup perfectly with the demands of the moment. we need to meet the moment and up our game. we need to remember that we can only do that together. it starts by making the education a national mission. a national mission. government and businesses. parents and citizens. in this economy, a higher education is the surest route to the middle class.

the unemployment rate for americans with a college degree or more is about half the national average. their incomes are twice as high as those who don't have a high school diploma. that means we shouldn't be laying off good teachers right now, we should be hiring them. [ applause ] we shouldn't be expecting less of our schools. we should be demanding more. [ applause ] we shouldn't be making it harder to afford college. we should be a country where everyone has a chance to go and doesn't rack up $100,000 of debt just because they went. [ applause ]

in today's innovation economy, we also need a world class commitment to science and research. the next generation of high tech manufacturing. our factories and workers shouldn't be idle. we should be giving people the chance to get new skills and training at community colleges to learn how to make wind turbines and semiconductors and high-powered batteries. by the way, if we don't have an economy built on bubbles and financial speculation, our best and brightest won't gravitate towards careers in banking and finance. because if we want an economy that is built to last, we need more young people in science and

engineering. this country should not be known for bad debt and phony profits. we should be known for creating and selling products all-around the world that are stamped with three proud words. made in america. [ applause ] today manufacturers and other countries are setting up shop in the places with the best infrastructure to ship their products and move their workers and communicate with the rest of the world. that's why the over 1 million

construction worker who is lost their jobs shouldn't be sitting at home with nothing to do. they should be rebuilding our roads and bridges. laying down faster railroads and broadband. modernizing our schools. all the things other countries are already doing to attract good jobs and businesses to their shores. yes, business and not government will always be the primary generator of good jobs with incomes that lift people into the middle class and keep them there. but as a nation, we have always come together through our government to help create the conditions where both workers and businesses can succeed.

and historically that hasn't been a partisan yet. franklin roosevelt worked with democrats and republicans to give veterans of world war 2, including my grandfather a chance to go to college on the gi bill. it was a republican president, dwight eisenhower, proud son of kansas, who started the interstate highway system and doubled down on science and research to stay ahead of the soviets. of course those productive investments cost money. they are not free. so we have also paid for these investments by asking everybody to do their fair share. if we had unlimited resources, no one would ever have to pay any taxes and we would never

have to cut any spending. but we don't have unlimited resources. so we have to set priorities. if we want a strong middle class, then our tax code must reflect our values. we have to make choices. today that choice is very clear. to reduce our deficit i signed nearly $1 trillion of spending cuts into law and proposed trillions more including reforms to lower the cost of medicare and medicaid. but in order to structurally close the deficit and get our fiscal house in order, we have to decide what our priorities are. most immediately short-term, we need to extend a payroll tax cut set to expire at the end of this

month. [ applause ] if we don't do that, the 160 million americans including most of the people here will see their taxes go up by an average of $1,000 starting in january and badly weaken our recovery. that's the short-term. in the long-term, we have to rethink our tax system more fundamentally. we have to ask, do we want to make the investments we need in things like education and research and high tech manufacturing and all those things that make us an economic super power or do we want to keep in place the tax breaks because we can't afford to do both. that is not politics. it's just math.

[ applause ] so far most of my republican friends in washington have refused under any circumstance to ask the wealthiest americans to go to the same tax rate they were paying when bill clinton was president. let's just do a trip down memory lane here. keep in mind when president clinton first proposed these tax increases, folks in congress predicted they would kill jobs and lead to another recession. instead, our economy created nearly 23 million jobs and we eliminated the deficit. [ applause ] today the wealthiest americans are paying the lowest taxes in over a half century. this isn't like in the early 50s

when the top tax rate was over 90% this is not even like the early 80s when the top tax rate was about 70%. under president clinton the top rate was only about 39%. today thanks to loopholes and shelters, a quarter of all millionaires now pay lower tax rates than millions of you. millions of middle class families. some billionaires have a tax rate as low as 1%. that is the height of unfairness. it is wrong. it's wrong that in the united states of america, a teacher or

nurse or construction worker maybe earns $50,000 a year should pay a higher tax rate than somebody raking in $50 million. [ applause ] it's wrong for warren buffett's secretary to pay a higher tax rate than warren buffett. [ applause ] by the way, warren buffett agrees with me. so do most americans. democrats, independents and republicans. i know that many of our wealthiest citizens would agree to contribute a little more if it meant reducing the deficit and strengthening the economy that made their success possible. this is not about class warfare,

but the nation's welfare. it's about making choices that benefit not just the people who have done fantastically well over the last few decades, but benefits the middle class. those fighting to get into the middle class. the economy as a whole. finally, a strong middle class can only exist in an economy where everyone plays by the same rules. from wall street to main street. [ applause ] as infuriating as it was for all of us, we rescued our major banks from collapse, not only because the full-blown financial melt down would send us into a

second depression, but because we need a strong healthy financial sector in this country. part of the deal was that we wouldn't go back to business as usual. that's why last year we put in place new rules of the road. they refocused the financial sector on what should be their core purpose. getting capital to the entrepreneurs with the best ideas and financing millions of family who is want to buy a home or send their kids to college. we are not all the way there yet. the banks are fighting us every inch of the way. already some of these reforms are being implemented. if you are a big bank or risky financial institution, you have to write out a living will that details how you pay the bills if you fail.

the taxpayers are never again on the hook for wall street's mistakes. there also limits on the size of banks and dismantling a firm that is going under. the new law bans banks from making risky bets with customer deposits and takes away big bonuses and paydays from failed ceos while giving shareholders a say on executive salaries. this is the law that we passed. we are in the process of implementing it now. all of this is being put in place as we speak. now, unless you are a financial institution whose business model is built on breaking the law and cheating customers and making risky bets to damage the entire

economy, you should have nothing to fear from the new rules. some of you may know, my grandmother worked as a banker for most of her life and started as a secretary and ended up being a vice president of a bank. i know from her and i know from all the people that i came in contact with that the vast majority of bankers and financial service professionals want to do right by their customers. they want to have rules in place that don't put them at a disadvantage for doing the right thing. yet republicans in congress are fighting as hard as they can to make sure these rules are not enforced. i will give you a specific example. for the first time in history, the reforms that we pass put in place a consumer watch dog who is charged with protecting everyday americans from being taken advantage of by mortgage

lenders or payday lenders or debt collectors. the man we nominated for the post is a former attorney general of ohio who has the support of most attorney generals both democrat and republican throughout the country. nobody claims she is not qualified. the republicans in the senate refuse to confirm him for the job. they refuse to let him do his job. why? does anybody here think that the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors? of course not. every day we go without a consumer watch dog. is another day when a student or a senior citizen or member of our armed forces because they

are vulnerable to some of this stuff, could be tricked into a loan they can't afford. something that happens all the time. the fact is that financial institutions have lobbyists looking out for their interest. consumers deserve to have someone whose job it is to look out for them. i intend to make sure they do. [ applause ] i want you to hear me, cannes as. i will veto any effort to delay or dismannedle the new rules we put in place. [ applause ]

we shouldn't be weakening oversight and accountability. we should be strengthening it. i will give you an example. too often we see firms violating major fraud laws because the penalties are too weak and there is no price for being a repeat offender. no more. i will be calling for legislation that makes the penalties count. the firms don't see punishment for making the law as the price of doing business. the fact is this crisis left a huge deficit of trust between main street and wall street. major banks that were rescued by the taxpayers have an obligation to go the extra mile in helping

to close that deficit of trust. at minimum they should be remedying past mortgage abuses that led to the crisis and working to keep responsible homeowners in their home. we are going to keep pushing them to provide more time for unemployed homeowners to look for work without having to worry about immediately losings their house. the banks should increase access to refinancing opportunities and borrowers who haven't yet benefitted from historically low interest rates and the big banks should recognize that precisely because the steps are in the steps of middle class families and the broader economy, it will be in the bank's own long-term phi national interest. what will be good for consumers over the long-term will be good for the banks.

investing in things like education that gives everybody a chance to succeed. a tax code that makes sure everybody pays their fair share and laws that make sure everybody follows the rules. that's what will transform our economy. that's what will grow our middle class again. in the end, rebuilding their economy based on fair pla and a fair shot will require all of us to see that we have a stake in each other's success. it will require all of us to take responsibility and require parents to get more involved in their children's education. it will require students to study harder. it will require some workers to studying all over again.

it will require greater responsibility from homeowners not to take out mortgages they can't afford. they need to remember if something seems too good to be true, it probably is. it will require those of us in public service to make government more efficient and more effective. more consumer-friendly and more responsive to people's needs. that's why we are cutting programs we don't need to pay for those we do. we made hundreds of regulatory reforms to save billions of dollars. we are not just throwing money at education, but challengying schools to come up with innovative reforms and the best results. and it will require american business leaders to understand

that their obligations don't just end with the shareholders. andy grove, the legendary former ceo of intel put it best. he said there is another obligation i feel personally given that everything i have achieved in my career and a lot of what intel has achieved were made possible by a climate of democracy and economic climate and investment climate provided by the united states. this broader obication can take many forms. when the cost of hiring workers in china is rising rapidly. it should mean more ceos back to the united states.

not just because it's good for business, but because it's good for the country that made their business and personal success possible. [ applause ] i think about the big three auto companies who during recent negotiations agreed to create more jobs and cars here in america and decided to give bonuses not just to executives, bu but employees so everyone was invested in their success. i think about a company based in minnesota. it's called marvin windows and doors. during the recession marvin's competitors closed dozens of plants and let hundreds of workers go.

marvin did not lay off a single one of the 4,000 or so employees. not one. in fact they only laid off workers once in over 100 years. mr. marvin's grandfather even kept his eight employees during the great depression. now, at marvin's the workers agree to give up perks and pay and so do the owners. as one owner said, you can't grow if you are cutting your life blood. that's the skills and experience your workforce delivers. [ applause ] for the ceo it's about the community. he said these are people we went to school with.

we go to church with them. we see them in the same restaurants. indeed a lot of us married local girls and boys. we could be anywhere. we are in warroad. that's how america was built and why we are the greatest nation on earth. that's what the greatest companies understand. our success has never just been about survival of the fittest. it's about building a nation where we are all better off. we pulling to and pitch in and do our part. we believe hard work will pay off and responsibility will be reward and our children will inherit a nation where those values live on.

it is that belief that rallied thousands of americans to osawatomie. maybe even some of your ancestors. on a rain-soaked day more than a century ago, by train, by wagon, on buggy, bicycle, on foot, they came to hear the vision of a man who loved this country and was determined to perfect it. we are all americans, teddy roosevelt told them that day. our common interests are as brought as the economy. the final years of his life, he took the same message across this country.

from osawatomie to new york city that no matter where he went, everybody would benefit from a country in which everyone gets a fair chance. well into our third century as a nation, we have grown and changed in many ways since roosevelt's time. the world is faster and the playing field is larger and the challenges are more complex, but what hasn't changed, what can never change are the values that got us this far. we still have a stake in each other's success.

we still believe that this should be a place where you can make it if you try. we still believe in the worlds of a man who called for a new nationalism and the fundamental rule of the national life, he said. the rule which underlies all others is that on the whole and in the long run we shall go up or down together. i believe america is on the way up. thank you and god bless you. god bless the united states of america. >> the president making the case he said for the people, the life blood of this country. the working middle class. let me bring in "washington post." the president wrapping his remarks centered around teddy roosevelt. this was supposed to be a speech inspired by new nationalism. did he live up to the expectations for all those folks who were hoping his focus is on

the working middle class at this point? >> this was a pretty expansive speech. we haven't heard the president talk in such broad terms in a while. he talked about his jobs bill and extending unemployment and the payroll tax cut. this was bigger than any of that. he strings together the vision of the economy and they will say this was a big speech. >> a lot of lines have been tweeted and sent out on facebook. the president saying this was not about class warfare, but the welfare. inequality distorts our democracy and you should not feel you have to be connected to a major organization with millions to have your voice heard here. obviously i'm thinking about newt gingrich who was the gop front-runner. they made over $100 million after leaving congress. is this the president setting up

what is to come in the general election facing mitt romney or newt gingrich? >> there were a couple of lines about child labor and that's something that newt gingrich mentioned recently, but overall it was a searing indictment of supply side economics. he said we tried it and it doesn't work. setting up that fundamental disagreement with whoever the nominee is over how the economy should work and whether trickle down economics works what what he was after and the most forceful way. >> he pointed out that the tax increase for the wealthy under the clinton years, they paid 39%. if you increase taxes, it urts the economy. it's not true as proof under the clinton years and when the country is then compared to after the bush administration. with that said, is this enough to get the people at home and

the bully pulpit the president has to drive home and put the pressure on congress? >> if anybody listened to the whole speech, i think he probably did make a convincing case. which portions get teased out as for the pressure on congress, he did give them a hard time. he did mention the payroll tax cut that he would like to see. he department talk about expanding it, but extending it which is a $1,000 tax hike that won't affect the middle class. this was a philosophical speech rather than an attack on congress. this wasn't a we can't wait speech. >> this was the direction he would like the country to move forward if he is reelected. that does it for this edition of

"news nation." martin bashir starts now. somewhere over the rainbow, the president in kansas clicks his heels three times, but does congress have the courage to act and on the yellow brick road to the white house, the candidate with heart. >> we will compete in all 50 states. >> the tin man. >> his idea of a hands on approach to the economy is getting a grip on his golf club. >> and dorothy with wicked words for them both. >> if you want to talk about a poster child for capitalism is newt gingrich. >> mitt romney is cut out of the same cloth. >> there is noplace like home. we begin with president obama delivering a