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Transcript: Obama Business Roundtable President Barack Obama delivers remarks at Business Roundtable, with question and answer. -- Astor Ballroom, St. Regis Hotel (16:04:38) Thank you, good. Please everybody have a seat. (16:04:43) I want to get to q /a as quickly as possible. So, Let me dive right in. It's a pleasure to be here this afternoon. I see a lot of friends in the room. It's especially important I think for us to be meeting today with the with business roundtable because the companies that you lead account for nearly 10 million jobs. You generate trillions in dollars each year. (16:05:08) Your companies have fueled the prosperity of communities across the country. The success story of those individuals. They have enriched our nation and have served as en enduring spirit of American capitalism. (16:05:23) But for over three decades the Business roundtable has also taken a broader view of your responsibilities as chief executives. You've looked beyond the bottom line of the next quarter to the long term health of your company. You've not only served as accomplished leaders but as engaged citizens. Citizens who understand that it is in the express interest of both your companies and your country to have a workforce that is highly educated, healthy and prosperous. (16:05:49) To have a market that's free and also fair, to live in a nation that's willing to invest in it's own future. We understand the public responsibility of private enterprise. It's fitting then that we meet at this moment because over the last few weeks a spirited debate has emerged in Washington, a debate over what it will take to ultimately break the back of this recession and strengthen our economy for the long run. (16:06:17) It's a debate that centers on one key question - does the greatest economic crisis in our lifetime warrant extraordinary action to deal with the array of challenges we face or should we limit out efforts and deal with them incrementally or one at a time. (16:06:37) Now let me say that it was not my preference to launch administration by passing largest economic recovery plan in the nations hisotry, or to face crisis in the financial market and automobile industry. It was not ideal to take office in the midst of the worst job and growth numbers in decades, particularly since we're still in the midst of two wars. But that's the duty I signed on for. (16:07:03) And although my administration did not create these problems, it's not only my responsibility but my extraordinary privilege to help solve them. It's my job to address every challenge that may threaten the strength and vitality of our families, our businesses and our entire nation. (16:07:20) Now, and in the future we must move quickly and aggressively on the most immediate threats to our economy and financial stability, jobs, housing and credit. There is no debate about that. (16:07:32) That's why we've already passed a recovery plan that will save and create 3.5 million jobs over the next 2 years, more than 90% of which will be in the private sector. A plan that will also give 95% of working families a tax cut that begins by April 1. (16:07:50) That's why we've launched a housing plan that will help responsible families lower their monthly payments. A plan that's already helping responsible homeowners save money by refinancing their loans. (16:08:01) That's why we forcefully attacked the credit lockdown that the housing crisis helped create. As all of you know, credit is the lifeblood of the healthy economy. The inability of even credit worthy business today is a major roadblock to our recovery. (16:08:21) To help get credit flowing again, we've created an unprecedented lending fund in partnership with the Federal Reserve that will help support up to a trillion dollars in auto loans, college loans, loans for the consumer, the consumer and entrepreneurs who keep this economy running. (16:08:32) We'll soon be announcing more efforts to provide more lending to businesses who are being devastated by this credit crisis. These are all important steps but the only way we can truly unlock credit and heal our financial system for good is to address the state of our banking system. (16:08:55) I know that this crisis is at the top of your list of immediate concerns and I promise you that it is at the top of mine as well. We all know how we got here, a wave of complex and risky transactions around mortgages and other loans produced huge profits for financial institutions and those who run them until the housing bubble burst. (16:09:15) Now some of the nations largest banks are holding so-called toxic assets, problematic that are dragging down the balance sheets of these institutions with no real market in which to sell them. (16:09:27) This is caused a slow down in lending and since finance today is global the virus has spread worldwide. Now it's important to note that there are thousands of banks large and small that have made sound decisions and are on solid footing. (16:09:41) All Americans need to know that their deposits are secure. But the weakened conditions of some of our largest banks has implications on the entire system. Those weaknesses must be addressed. (16:09:52) Critical to that solution is an honest and forthright assessment of the true status of bank balance sheets, something that we have not yet had. That is why the Treasury has asked bank regulators to conduct intensive examinations or stress tests of each bank. When that process is complete next month, we will act decisively to ensure that our major banks have enough money on hand to lend to people even in more difficult time. (16:10:19) If we learn that such a bank has more serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets and assure the continuity of a strong, viable instituition that can serve our people and our economy. (16:10:36) I intend to hold these banks fully accountable for any assistance they receive and this time they'll have to clearly demonstrate how tax payer dollars result in more lending for the American tax payer. (16:10:48) I also intend to enact tough common sense regulatory reforms equal to the challenges to the 21st century financial system so that a crisis like this never happens again. And when I meet with the leaders of the other G-20 nations next month, I'll ask them to join us in these actions because in an age when financial transactions often cross borders, global coordination is essential to safeguard against future crisis. (16:11:14) But, the truth is that these problems in the financial market as acute and urgent as they are, are only part of what threatens our economy. And we must not use the need to confront them as an excuse to keep ignoring the long term threats to our prosperity. (16:11:35) The cost of our health care and our oil addiction, our education deficit and our fiscal deficit. I'm not choosing to choosing to address these additional challenges just because I feel like it or because I'm a glutton for punishment, I'm doing so because they are fundamental to our economic growth and ensuring that we don't have more crisis like this in the future. (16:11:54) You see, we can not go back to endless cycles of bubbles and bust. We can't continue to base our economy on reckless speculation and spending beyond our means, on bad credit and inflated home prices and overleveraged banks. (16:12:12) This crisis teaches us that such activity is not the creation of lasting wealth, it's the illusion of prosperity and it hurts us all in the end. Instead we must build this recovery on a foundation that lasts. (16:12:26) On the 21st century infrastructure and green economy with lower health care costs that create millions of new jobs and new industries. On schools that prepare our children to compete and thrive. On businesses that are free to invest in the next big idea or breakthrough discovery. (16:12:43) We can not wait to build this foundation. Putting off these investments 4 years, 8 years, 12 years or 20 years, would be to continue the same irresponsibility that lead us to this point. It would be exactly what Washington has done for decades and it will make our recovery more fragile and our future less secure. (16:13:04) That's a future I don't accept, not for my children and not for yours. I did not come here to pass our problems onto the next President or the next generation. I'm here to solve them. I'm here to start building an economy and a prosperity that lasts. (16:13:20) Now would I prefer to tackle these challenges without having inherited a trillion dollar deficit or financial crisis, absolutely. But that's a choice that we don't have. I don't like the idea of spending more government money, nor am I interested in expanding governments role. I've always been a strong believer in the power of the free market. It has been and will remain the very engine of America's progress, the source of a prosperity that has gone unmatched in human history. (16:13:47) I believe that jobs are best created not by government but by businesses and entrepreneurs like you who are willing to take risks on a good idea. I believe that our role as lawmakers is not to disparage wealth but to expand its reach, not to stifle the market but to expand its ability to unleash the creativity and innovation that still makes this nation the envy of the world. (16:14:09) But I also know this, throughout our history there have been times when the market has fallen out of balance. There have been moments of economic transformation and upheaval when prosperity and even basic financial security have escaped far too many of our citizens. (16:14:25) At these moments, government has stepped in not to supplant private enterprise but to catalyze it, to create the conditions for thousands of entrepreneurs and new businesses to adapt and ultimately to thrive. That's why we laid down railroads and highways to spur commerce and industry to stitch this nation together. (16:14:44) That's why even in the midst of civil war, Lincoln launched a trans-continental railroad and land grant colleges and the national academy of sciences. That's why we initiated universal public high schools and passed a GI bill to nurture the skills and talents of all our workers. That's why Eisenhower built an interstate highway system and Kennedy pointed us to the moon knowing that the exploration would lead to unimagined innovations here on earth. (16:15:12) That's what we've done in the past. That's why I've chosen to address education, health care, energy and this budget because we can't wait to make the investments today that will lead to tomorrows prosperity. (16:15:28) As members of the business roundtable you know how important this is when it comes to each of these challenges. On Education I know you just heard from Arne Duncan. You've all long understood that the success of your business ultimately depends on its ability to hire workers who have the skills and knowledge to compete with others and other companies all over the world. (16:15:49) You also know that America is increasingly falling behind in that competition. That's why it will be the goal of this administration to ensure that every child has access to complete and competitive education from the to the day they begin their career. We've already dramatically expanded early childhood education, and we will continue to improve the quality of these programs. (16:16:13) For as this organization knows, children who receive a quality early childhood education are more likely to attend college, more likely to hold a job, and more likely to earn more in that job. This budget also creates new rewards tied to teacher performance. And pathways to advancement and rewards for success for those teachers. And we're gonna invest in innovative programs that are already helping schools meet high standards and close achievement gaps. We've urged states to lift the cap on the number of charter schools they built. And I've asked every American to commit to at least one year or more of higher education or career training, with the goal of having the highest proportion of college graduates in the world by the year 2020. (16:16:55) And to meet that goal we're investing 2.5 million dollars to identify and support initiatives across the country that achieve results in helping students graduate. We'll also make sure that higher education is affordable for every American who wants to go. Now this budget also recognizes reality that you understand as business leaders. In this economy, adults of all ages need opportunities to earn new degrees and skills. So we will work with our universities and community colleges to prepare workers for good jobs and high growth industries. And to improve access to job training, not only for young people who are just starting their careers, but also for older workers who need new skills to change careers. (16:17:35) That's how we'll create a workforce that will help our businesses compete, and win in the 21st century. And that's how we'll create a workforce that is adaptable to a dynamic, global, capitalist system. Even as we invest in our workers, we'll also need to create the jobs for them to fill. And that's why the second major investment that our budget makes is in the jobs and industries of the future. (16:18:00) The recovery plan we passed will ultimately leverage at least $175 billion in private sector investments. Investment in areas like clean energy, small business development, school construction. This budget builds on that foundation, by making historic investments in science and technology and infrastructure, by making permanent the research and experimentation credit. By eliminating capital gains taxes for investments in small businesses and start ups. And by providing the resources necessary to finally spark a clean energy revolution. (16:18:35) We all know that the country that harnesses the power of renewable energy will lead the 21st century, and yet it's China that's launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we've fallen behind countries like Germany and Japan in producing. New plug-in hybrids will roll off our assembly lines but running on battery cells made in Korea. (16:18:58) I do not accept a future where the jobs and industries of tomorrow take root beyond our borders, and I know you don't either. It's time for America to lead. To do this you and I both know that we need ultimately to make clean renewable energy the profitable kind of energy. We know that the best way to do that is through market-based caps on carbon pollution, that drives the production of more renewable energy in America. (16:19:25) I understand that this will be a difficult transition for many businesses to make. And that's why this budget does not account for such a cap until 2012, the time when this economy should be on the road to recovery. And to support this transition we'll invest $15 billion a year to develop technologies like wind power, solar power, advanced bio fuels, clean coal, and more fuel efficient cars and trucks built right here in America. (16:19:50) And the last major challenge we address in this budget is the threat not only of the wellbeing of our families, the prosperity of our businesses, but to the very foundation of our economy and that's the exploding cost of healthcare in America. (16:20:00) The exploding cost of health care in America, and I know you had a session with Peter Ortsag about this. For those who believe that this issue is somehow unrelated to our economic crisis, consider the fact that up to 1.5 million Americans could lose their homes this year just because of medical crises. And as everybody in this room is painfully aware the same soaring costs that are straining our families budgets are also sinking some of our best businesses or putting enormous strain on your bottom line. Today too many small businesses can't even think about insuring their employees, and major American corporations like yours are struggling to compete with foreign counterparts. Companies of all sizes are being forced to ship jobs overseas or shut their doors for good. Medicare costs are consuming our federal budget. Medicade is overwhelming our state budgets. At the fiscal summit we held in the white house a few weeks ago the one thing on which everyone agreed was that the greatest threat to America's fiscal health is not the investments we've made to rescue our economy, it's the sky rocketing cost of our health care system. You understand this. (16:21:08) For years the business round table has worked tirelessly to promote investments in electronic medical records with strict privacy standards that will help save money and lives. Investments that we have now made in the recovery plan. You participated in last week's white house forum on health reform. Proving that this time we find business in labor, medical professionals and labor, medical professionals and patient advocates all on the same side of the issue. Urging meaningful reform. And you are one of the many organizations that urged us to include health care in this budget. Which is why we've made an historic commitment to reform based on the principal that we must bring down crushing costs and provide quality affordable health care to every America. (16:21:50) It's a commitment that's paid for in part by efficiencies in the system that are long overdue. And we will need your help to ensure that it is included in the final budget. Let me just give you one example - medicare. For years we've been paying medicare advantage plans fourteen percent more than it would cost for the traditional medicare plan. In this budget we have a simple idea. Instead of government setting prices for our seniors why not have private plans bid for medicare's business. This competitive bidding is good for businesses its good for our seniors and its good for tax payers because it saves us 177 billion dollars over ten years. (16:22:33) We've undertaken an unprecedented effort to find savings just like this in every corner of this budget. Because with the deficit we've inherited, the cost of the recession that we face and the long term challenges we have to meet - it's never been more important to ensure that as our economy recovers we do what it takes to cut this deficit in half by the end of my first term in office. And I know that some have questioned this commitment and I want you to know that I understand the skepticism because we've heard promises like this before. And it's true that this crisis has compelled us to add to our deficit in the short term. But I ask all of you to look at this budget. Already, we've identified two trillion dollars in deficit reductions over the next decade. We've announced procurement reform that will save the government forty billion dollars by greatly reducing no bid contracts. (16:23:25) we're going to end education programs that won't work. We will eliminate direct payments to agri business that don't need them. We'll root out even more waste, fraud and abuse in our medicare program. So all together this budget cuts spending by one trillion dollars over the next decade. One trillion dollars from where it would be if we just kept going on our current path. And that would reduce discretionary spending for domestic programs as a share of the economy by more than ten percent over the next decade. It will be at the lowest level in nearly half a century. The lowest level in nearly half a century. Now if we wanted to we could have painted a sunnier fiscal picture in this budget. We could have relied on some of the same gimmicks that our government has used for the last eight years. (16:24:15) Gimmicks that would hide spending on things like Iraq and Afghanistan. Gimmicks like assuming that there's never a natural disaster anywhere in the country over the course of a year. Our deficit would appear 2.7 trillion dollars better had we used those gimmicks over the next decade. But I told my team we are not going to do that. We are not just suffering from a deficit of dollars in this government we're suffering from a deficit of trust. And I believe that restoring that trust begins by restoring a sense of honesty and accountability to our budget. Now while we're being honest, lets also talk about taxes. Always a favorite subject. I said in my address to Congress that this is the one issue that always falls victim to the same political scare tactics we've seen for decades so let me be very clear. If this budget's passed not one American will see their taxes raised a single dime on the end of 2010. so for the next two years our taxes aren't going up. Nobody. At that point at the end of 2010 97 percent of all tax payers and 97 percent of all small businesses will still not see a tax increase. 97 percent. In fact 95 percent of all working families will receive a tax cut so they can buy some of the wonderful products that you make. (16:25:40) For the top 3 percent of all tax payers, and I'm gonna just take a shot in the dark and guess that includes some of the people in this room, the top tax rate across the board will still be lower than they were during the prosperity of the 1990's. still be lower than they were during the Clinton era. You will pay a tax rate on capital gains and dividends that is also lower than it was during most of the 1990s. and the revenue that results from these changes will reduce the deficit by 750 billion dollars over the next ten years. Now there's no doubt that we've had to make some tough choices in this budget and we're likely to have to make more in the days and months ahead. And you and I won't always agree on every decision or every issue but I do believe that we know what needs to be done to build an economy that's not just revived from a crisis but rebuilt for the future. To secure a prosperity that no longer rests on a bubble. But on a firm foundation that will make this country strong and competitive in the 21st century. (16:26:54) that kind of economy. An economy with workers who are highly skilled and highly educated with a health care system that is efficient and affordable with energy that is clean and renewable. With entrepreneurs that are free to invest in the next big idea. That's an economy that's built to last. That's an economy that's good for business. This is a country that will lead and prosper for generations to come. And I look forward to your continued cooperation in building that country. Because I have absolute faith that we can get there together. Thank you very much. (16:27:36) I asked my team for some extra time to make sure that I could answer as many questions as possible. Mr. Chairman of the round table. Do you want to start us off? (16:27:50) CHAIRMAN OF ROUNDTABLE: thank you very much Mr. President we really appreciate you taking time to be with us and to give us access to so much (inaudible) throughout the day. The business community is committed to be part of the solution. And the millions of jobs that you talked about largely as you say are coming from businesses and therefore w want to partner with you in terms of one ending this economic crisis, increasing liquidity and getting smart regulation and we're with you and secretary Duncan on the education agenda work force development personal training vocational training we're for affordable and quality health are costs and access to that for everyone. We certainly won't be able to create that energy independence that you talked about and we want to be in a position where we can have that kind of investment in our community by keeping our markets open and having access to markets all around. So we're committed to do all that and working with you. During the campaign you talked often about having an open administration and you're going to push very hard for that. There is a misperception I think in some people's minds that the relationship between businesses and the Obama administration is like oil and vinegar. Well I'd like to tell you that from our point of view that couldn't be farther from the truth. Everybody in this room is anxious to see you succeed and wants to be a part of that. In that end we have the same common goals right now. Jobs, growth, recovery competitiveness and as such the ask that I would have for you is that if you were allowed to set up a regular schedule such that the expertise of the chief executives here could work with whoever you designate to be a sounding board pushing back and helping to form those kinds of opinions. And thank you again for coming. (16:29:56) OBAMA: absolutely well that's exactly the kind of partnership that we seek. As I said there are a lot of people in this room who our team has consulted with on a regular basis and we hope to do more of that in the future and I know that John has attended a number of the summits that we've been putting in place. I think you will find that this is actually an administration that also wants you to succeed in the same way you want us to succeed. I am a strong believer in the ability of the free market to generate wealth and prosperity that's shared across the board. I think there are times when sometimes our economy gets out of balance. This is obviously one of those times, and so government has to intervene in a crisis, but the goal should always be to right the ship and let private enterprise do its magic. (16:31:08) There are going to be a series of fairly complex issues around regulation in the financial markets which we believe is necessary. I assume that many people here agree that we've got to update the regulatory framework that was created in the 30s for global markets where trillions of dollars are spinning around the globe with the press of a button. But we are also very mindful that we've got to do those regulatory reforms in a way that doesn't strangle innovation and creativity and entrepreneurship but deals with the systemic risks that obviously we were unprepared to deal with when this latest crisis occurred. With respect to tax policy, again we want to consult with you, because our belief is that we've got to have a stable system that closes the structural deficit that right now is built into the federal government. And it's n unsustainable deficit. If we keep on going down this path at some point folks who've been financing our ways are going to say enough we don't want to buy anymore T-villes and then we've got some problems. (16:32:28) We're going to need to work with you on that. We want to do it in a way that encourages work, encourages investment encourages savings.and make sure that we're financing what we need out of government but no more than what we need. So on a whole host of these issues we are going to be actively soliciting your advice and your input and our expectation is that we can use this moment to create a stronger free market system. One that's more stable, one that's more profitable over the long term. But I think as everyone here recognizes because you're all thinking about it with respect to your own businesses. This is going to take some times. We were engaging in an unsustainable model for a very long time. And the bill is now due for a lot of bad habits and bad practices that were built up over the course of many years. Its complicated and it is international and so our focus right now is to stabilize the financial system get credit flowing again to project a budget that allows in future years for us to start tackling these very big problems but we've got to get started now if we're actually going to get there on health care on energy and education and that's what we're trying to accomplish. QUESTION CONTINUED: [16:35:00] We appreciate that. But what's happened in the past, is that there's a thing called a deferral. And the deferral was put in place to normalize all these anomalies. They're all different, they're not the same, so it was put in place for that purpose, so it was a normalization to help America in competetiveness. As you know, in the current proposed budget, there's a consideration around the deferral. We all accept that we need to deal with the deficit, I mean nobody in this room is going to argue that we want big deficits. They hurt businesses as you know, they squeeze capitol out of the private sector. But at the same time, the deferral has been very, very important to the normalization and helped us to compete so what we really are just asking for and we mentioned this to Tim earlier today is just an open dialogue to engage, to give you all the facts that we know and why it's so important to us [16:35:49] so just to kind of reach out, take you up on your offer and listen to our point of view. PRESIDENT OBAMA: [16:35:53] Good. I will certainly listen to your point of view because I want American businesses to be competitive. And by the way, at some point, this is reflected in our current budget, because we've already got a lot on our plate. But my interest over time in potentially lowering corporate rates, in exchange for closing a lot of the loop holes that make the tax system so complexthat's a very appealing conversation to me. And I'd like to pursue it. [16:36:25] With respect to the specific issue of the deferrals, look, it is difficult for, I think the average American if they feel as if businesses investing here are paying a higher tax rate than if they're investing overseas. It's just counter intuitive. People generally feel like, let's encourage and motivate corporations to invest here at home, particularly at a time when there's been significant job loss. I'm appreciate of the fact that if you are a multi national operation that you've got all sorts of tax rates that create a lot of headaches and you don't want to end up double paying, where you can help it. [16: 37:12] So some of this stuff gets pretty technical. Let's make sure that you and other representatives at the business round table are working with the treasury to find out if we can find the right balance. I want you to be competitive. I don't want you to be placed at a competitive disadvantage with other countries, or other companies from other countries. We also want to make sure that - not just from a revenue perspective but also from the perspective of job creation here at home, that we've got a tax code that reflects those values. Okay. Um, Anne? Where's Anne? There you are. QUESTION [16:37:54]: Mr. President, thanks for engaging with us this afternoon. It's actually been a very productive day. You know, on that theme of global companies and I think lots of us are witnessing further deterioration around the word. And it's worrying in terms of the business community. In a few weeks, you're going to meet with G20 leaders and an ability to coordinate, to have a set of actions that really are aligned I think is important, you know, for the health of the world right now. What are your expectations and how feasible to have an aligned agenda? PRESIDENT OBAMA [16:38:36] Well I actually think that it's very feasible. We're actively persuing. And I'm having meetings and conversations with the head of the G20. I already had a meeting with Gordon Brown. I'll be meeting with people like Kevin Rudd from Australia, I met with the Chinese foreign minister today, in preparations for a meeting with President Hu in London when we arrive. [16:39:06] I think there are a couple of broad principles we'd like to see emerging out of the G20. Number one that the stimulus efforts of all countries are sufficiently robust to deal with the declining demand. We think that's important. And countries like China for example are doing that. We want to make sure that everybody is mindful that the decline in global demand is enormous and now is the time for us to provide some balance. [16:39:41] Number two: financial regulation. We think that it's very important that there is coordination Not necessarily a super regulator, but that there's coordination and effort so that if we are doing things that are increasing transparency, openness, trust in Wall Street, that London is doing the same thing. And that other financial markets are doing the same thing, so that we don't start seeing a race to the bottom but rather we see a race to the top, where we've got a stable global financial system. [16:40:20] The third thing we have to pay attention to is the situation in emerging markets. We've got some very big problems potentially there. And that is something the Europeans for example should be very interested in, because their banks have enormous exposure to those countries. We've got to pay a lot of attention to it, not only for economic reasons but also for national security reasons. If you start seeing a lot of emerging markets collapse, it's bad for business, but it also creates a dangerous international environment. [16:41:01] So to that end, the idea of wealthier countries or countries that are running surpluses have decent foreign reserves, foreign currency reserves, being able to work with the international financial institutions to provide some help in propping up those economies as we climb out of this recession I think is going to be very important. [16:41:28] And I just want to make sure, I'm doing this off the top of my head, the last thing I think we have to pay some attention to is making sure that we're not dropping back into protectionism. Now I think everybody sort of understands the history of the great depression. So far at least, we're seeing some movement to contain protectionist sentiments in these various domestic markets, but we have to build on that, and I think having a strong statement that encourages trade, and making sure that there are sufficient credit lines for trade, because that's one of the big problems we've see right now in terms of world trade is it's just very hard tothe traditional mechanisms for lending that facilitate trade have uh, really contracted. So those are areas we've got to spend a lot of times focuses on. I'm confident actually that interests will be aligned here more than they have been in the past. Okay? Let's see. How about Bill [16:42:57] Thank you Mr. President, and thank you also for your comments on education over the last several days, and it gave us a lot of clarity. Secretary Duncan did a terrific job and I think it's one thing we've very much aligned on. We realize than a competitive country needs competitive companies and in order to do that we need a competitive workforce. There is something I think that it's important that you know. We are launching tomorrow the springboard project, which is organized by the business round table and what it's focused on is sort of really three charges. The first one is about making sure the education systems produces the skills that we need for today's and tomorrow's markets. [16:43:38] The second this is we need to institutionalize lifelong learning. It's absolutely true, we can see that all now. It needs to be an individual and a collective imperative for our country and I think all of our citizens and all of our workforce needs to understand that. And the third is for a problem that's here and now is we have to facilitate workers in gaining new skills that have been displaced by economic dislocation and other changes in the market, which are going to be a natural occurrence over time. And we need to look forward to that. So we're just looking forward to working closely with your team to make sure we can tackle those. PRESDIENT OBAMA [16:44:19] I look forward to that and you're exactly right. We are going to continue to be the most dynamic economy in the world. And one of our strengths is our dynamism. And our strength is that we adapt quickly. We've got risk takers in this country, that means that sometimes we have higher failure rates, but it also means we've got greater flexibility and we pursue opportunity. That is part of the American character we want to retain. [16:44:52] And so I'm amused sometimes when I read sort of this talk that the Obama Administration wants to get government in everybody's business. I don't, I want you guys to do your thing. What is true though, is in the current global highly competitive environment, That the burdens and benefits, the dislocations of that dynamism are disproportionally borne by workers in certain sectors, in certain reasons and that creates great pain, that creates great hardship, and, so part of what we want to figure out is, how do we make sure that the burdens and benefits of this dynamic economy are spread in a way that maintains a strong political and social support of that dynamism. For those of you who are concerned about protectionism, the best way to ensure that we're not seeing protectionist tendencies in this country is to make sure that workers are benefitting from trade. [16:46:09] And some sectors are but some sectors may not be. If we are retraining them, if we are investing in their futures, if when there are new opportunities and green energy, companies are saying, you know what let's go to Michigan, let's go to Ohio where you've seen a huge exodus of jobs. Let's go in there and work on developing then new battery. Or the new solar panel, or the new technology that's going to help launch new industries. That is going to be something that I think benefits everybody. And benefits your businesses most of all, so I'm excited about the prospect. That's part of what we've already done in our recovery package and the recovery and re-investment package. [16:47:03] Carol is going to be talking to you about some of the stuff we've been doing on energy. We've got to train people. Something like the Smart Grid which could create huge efficiencies for your businesses as well as in individual families. There are a bunch of bottle necks, some of it has to do with local sighting issues, but some of it has to do with the fact that finding enough trained electricians to lay these lines. Right now we don't have enough. And at a time when we've got huge unemployment out there, and so figuring out how we're training people for the right jobs. That requires consultation with business. You guys can help us identify what are the specific skill sets that people are going to need so that working with community colleges and universities, vocational programs, apprenticeship programs we are teeing that up. Um, is Ivan here? [16:47:57] Again, on behalf of all of us, thank you so much for being with us today and the energy you're putting into all these issues. It's really encouraging. Healthcare. Your comments on healthcare were terrific and very enlightening. I think we're all pretty much focused and agreed that the costs of healthcare are way out of line and we need to do something to bring them in line, We at the BRT have been working on among, working on a framework to move ahead with reform. [16:48:30] I'd just like to point out a couple of things and get your reaction to them. We agree that the goal is not only to broaden access, but to lower the cost and improve the quality for everyone. So we start with employer based healthcare. We think today most people get healthcare from their business -one hundred eighty million Americans do. We can provide not only the current need for their families but also create the kind of incentives for their future well being; make sure they have good behaviors and all the kinds of things that create healthy employees. Not just today but for a long time. [16:49:05] We can work with the insurance carriers to provide the robust policies and plans that are out in the marketplace so it's really important that we start with that framework. The second thing is to make sure that we have some individual participation. I think it's very important that we don't have a government plan competing with a private plan and finding our employees and citizens in general can go to a plan that doesn't have the same incentives and requirements and behavioral characteristics that make sure they do the right things long term. [16:49:40] I think the last thing is the thing you mentioned, with respect to health IT. There are at least two of three dozen things we can do right now to begin driving costs down. I think the initiatives you approved on health care IT is terrific. The quicker we get the systems built and the data collected, we can start changing the system, but we could do more. We could do more with medical reform, medical liability reform, we could do more in effect with medicare, and review and change the payment systems. So I think heath care reform really is the devils in the details. I think that if we get the model working we can make significant impact on the things you've articulated today. PRESIDENT OBAMA [16:50:26] Absolutely, I think you make a couple of terrific points. So let me just amplify a few. Number one. I think we have a moral obligation to make sure that in a country this wealthy, you don't have single moms not able to send their kids to a doctor because they just cant afford it. And they don't have insurance on their job. So I think there's a powerful moral element to healthcare. I get ten letters sent to me out of the forty thousand that are sent to me every day. [16:51:00] To read every night, just so that I am attuned to what's happening outside my bubble. Although somebody pointed out the other day it's a very nice bubble, but it is a bubble. And I would say that at least half of them in some way relate to an individual family crisis with healthcare. And they're heartbreaking. This has to be dealt with. [16:51:24] But, having said that, I also have a very hard headed analysis about this, which is that the path we're on is unsustainable. If you have six, eight, ten percent health care inflation every single year at some point, we are all broke. Businesses are broke when you stop providing healthcare to your employees, the federal government is way broke with medicare and medicade, State governments are groaning under the weight of this stuff, it's consuming everything. [16:52:01] So, what that also means, though, and this is something I've tried to emphasize to my more progressive friends, we cant simply add on a whole bunch of people to a broken system, because that's also unsustainable. You cant just take people who are currently uninsured and plop them onto a system that is generating those kids of costs and not dig into the engine and try to figure out how to make the thing run more efficiently because then you'll just be broke that much faster. And somehow you start making decisions that are very draconian about people losing benefits. [16:52:43] So the cost is the thing we actually think is the big driver in this whole debate. And that's why I know you heard things like imperative effectiveness, health IT, prevention, figuring out how our reimbursement structures are designed under medicare and medicade. Medical liability issues. I think all those things have to be on the table. And, I wont lie to you, everybody agrees on this theoretically, until you start getting to the specifics, and oftentimes though, Ivan, and one of the things I'll note is that t he resistance is not based on evidence, it's based on people's interests. [16:53:33] Everybody's kind of dug in. They know that the system doesn't work but it least it kind of works for them in one particular aspect. And part of the reason we did not simply design our own plan and try to jam it down the throats of Congress is we want them to see some of the contradictions in their own positions and over time sort through some of those tensions. Make some tough choices, working with us, but we think we have to get this done now. This is a window. Not that everything is going to be implemented now, and this by the way goes to a broader issue, with respect to our budget. Because there's some people, when we issued the budget, they said boy these Obama people, they're really ambitious. They're taking on heath care, they're taking on energy, they're taking on education. Don't they know there's this bank crisis right now. We've got to do one thing at a time. [16:54:32] Look, the budget document that we put forth is a ten year document. We are like any organization just like all of yours. We have to do long term planning even though we're addressing short term issues. If we don't do the long term planning, then we end up having more short term issues. Again and again and again and again. So we don't anticipate that every piece of health care is done this year. OBAMA: we think that we've got to get the process and get in place a structure and a framework and a funding approach and work out a lot of these details but its going to be implemented over time. We're not going to have instant health IT all next year. The same is true on the energy front. Under the CAT proposal we have it wouldn't even start until 2012 where we're going to be out of this recession or you're going to have someone else speaking to you in 2013. but if we don't' start now if we wait to have the debate in 2012 and then suddenly it turns out that oil is at 150 a barrel again and we say, 'ah! Why didn't we start thinking about this and making some steps on how to figure this out. That's what Washington does. You guys could not run your business this way. So the notion that we are doing some long term planning now and trying to get this town to think long term that somehow that's a distraction, just defies every sound management practice that I've ever heard of. So we've got some immediate stuff that we've got to deal with right now what this budget does is it reflects a vision about where we need to go and I think it's the right vision. Alright, let me see how I'm doing now on time. I've got a little more time. [16:56:34] I'm gonna take at least a couple more questions. Dan Fulton - is Dan around? Yes Sir, go ahead FULTON: thank you for being here. My company Werhouser (sp) is committed to addressing climate change. We've adopted significant emission reduction goals and we support legislation to establish capital trade approach to climate change. In your comments you've expressed support for a CAT with one hundred percent auction of carbon allowances to generate revenue for the government. And your comments earlier today you also talked about an implementation time frame of 2012. I just wanted to comment that a number of us in the business community are concerned that 100 percent auction will effectively be a tax that would impose significant cost on energy intensive industries, such as some that we operate and may impact existing industries ability to fund needed investments and know in a new low carbon technology. I just wondered if you could explain how the hundred percent auction would work in our highly challenged economy because we're all feeling a lot of pressure today on costs for existing industries and strengthen our existing manufacturing sector. [16:58:11] OBAMA: let me start by saying this; I said during the campaign that we were looking at 100 percent auction, we are not going to be able to move this in an effective way without partnership with the business community. We just can't get it done. And for businesses like yours that are committed to the concept and the idea we're going to work to make sure that it works for you. Now, the experience of a cap and trade system thus far is that if you're giving away carbon permits for free then basically you're not really pricing the thing and it doesn't work, or people can gain the system in so many ways that its not creating the incentive structures that we're looking for. The flip side is you're right, if it's so ownerist that people can't meet it, then it defeats the purpose, and politically we can't get it done anyway, so we're going to have to find a structure that arrives at that right balance. We want to create a price structure. Keep in mind that the reason that I'm interested in a cap and trade approach is precisely because I think the market makes decisions about these technologies better than we do. [16:59:41] for those who are concerned about some heavy handed command and control regulations coming down the pike, cap and trade is designed to say, you know what? Here's the target, here's a price, you guys go figure it out, and if you can make money on it, all the better. So that's our goal, that's what we want, and how that pricing mechanism works most effectively to actually influence incentives but also be sufficiently realistic that industries are thriving as opposed to groaning under the weight of it, I think its going to be the trick. I'm confident that we can do it. We've done it before. Keep in mind that when I'm trying to remember if this was in the 70s or early 80s - I'm getting old enough now that I can't remember - but the issue of acid rain was around, everybody though all your trees were going to be dying - you couldn't make any paper. [17:00:45] and we put in an auction system and a trading mechanism and low and behold American ingenuity and American entrepreneurship and inventiveness created options that ended u being much cheaper than anybody had imagined. Much cheaper than anybody had imagined. Now in the meantime I was talking to some members of congress, just yesterday, who were concerned about this because I'm sure they're hearing from industries you know, what does this mean economically, etc. I just want to point out anybody who has been to Las Vegas recently and looked at Lake Mead or who is familiar with what's happening with agriculture in Ca right now, or go down to Atlanta, which may not have any water soon because of what's happening in terms of changing weather patterns. Or talk to Kevin Rudd in Australia. [17:01:58] that's going to cost us money too. Its just not priced and I'm not somebody, I've never bought into these Methusian, chicken little, the earth is falling, I tend to be more optimistic, I wouldn't be here if I weren't pretty optimistic. But I think the science is overwhelming. This is a real problem, it will have severe economic consequences, as well as political, national security and environmental consequences. I'm confident that if we do it smart, if we're talking to you guys, if we're talking to industries if our projections don't end up being wildly unrealistic I think we can handle this problem. Okay let me make this the last question. [17:02:53] DICK: as you know secretary Geithner was here earlier today, and I thought did a terrific job. And as he went through his hastily prepared remarks I made a little tick mark every time he used the word confidence, or talked about restoring confidence, until I ran out of ink. I say that somewhat facetiously but I think he's spot on. We're in a battle in this country now, and maybe in the world, where we're between confidence and fear and its important that confidence wins because if consumers are confident they'll spend, but if they're fearful they wont. If investors are confident they'll invest if they're fearful they wont. And all the money in all the governments can't replace that so I take it down to our banking business. At its core it's a very simple business it takes funds from depositors and other providers of funding and it makes those funds available in the credit markets and that's how business grow and people buy homes and send their kids to college and buy cars and all that stuff [17:04:15] OBAMA - can I just say Dick, it hasn't been that simple lately (laughter) but I get your theory though. I'll talk to Jamie maybeDICK - at it's core. Some folks got carried away. But the core business is essential to restoring this economy to full vitality and one of the things the secretary said was that (inaudible) at the end of the day though we're committed to particularly for those institutions that are core to the financial system to providing support so that those essential funders, depositors, people participating in that market can have confidence that they'll be protected. I think that if those fundamental funders do have confidence, do believe that we're protected in all this, they will help stabilize the banking system and then what you talked about earlier will happen. That credit cycle will regain and then the country and the economy will begin to heal. I just wondered, you're among other chiefs, you're the confidence builder in chief. I wonder if you could either elaborate or drive home that point that the secretary made because I think that it will help us all [17:05:41] OBAMA: well look, this is the most dynamic economy on earth, and our capacity is undiminished. We've got the same smart folks and engineers and scientists, we've got the hardest working workers on Earth, we've got the best universities on earth. We've got all kinds of innovations and you know what we've also got a whole bunch of potential customers out there. As bad as the housing market has been, we're starting to see inventories decline and there's a young family out there right now who is going to be thinking about buying a home. And if we can get them credit, they're going to buy that home, and if they buy that home, then that construction worker comes in and remodels the kitchen, and that means that he can buy that computer for this kid at school and we're off to the races. [17:06:48] So I am very confident about our long term prospects. We live in such a rapid fire information rich environment that people's attention spans go like this (gestures) and that makes for volatility in confidence. Alright? Smidgen of good news and suddenly everything's going great. A little bit of bad news oooooh, we're down in the dumps. And I am obviously an object of this constantly varying assessment. Um, I'm the object in chief of this varying assessment. And so my view, people ask me sometimes, you seem like a pretty calm guy, how do you do thatI say well look, I don't think things are ever as good as they say and never as bad as they say. And things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy they're not as bad as we think they are now. We're going to restore confidence by in a very systematic way, getting this financial system fixed. I think secretary geithner and chairman Bernanke and Sheila Bair have done an extraordinary job. It hasn't gotten a lot of fan fare, but the TALF program that has been put in place, the creation of [17:08:20] markets once again for some of these securities that are out there so that they can be priced and we can see financing flowing again. The fact that for all the angst that's been out there you've got banking institutions that are still functioning and low and behold making profits we still have some big problems in the banking industry, that's what these stress tests are about. We are going to make an effective assessment and even with the worse case scenarios, we're still gonna be looking at the vast majority of banks are going to be doing fine, and in a position to make profits. Even with the worst case scenarios, even if things stay bad for a while the vast majority of these banks are going to be fine. By the way depositors are gonna be fine. [17:09:26] that's why we've got the FDIC. And so I think Americans understand that their deposits are going to be fine. The market is going to be responding to all this information out there. The whole issue of animal spirits in the market place and when suddenly a rally catches, you guys know that better than I do. But my focus has to be on the long term. And my long term projections are highly optimistic. If we take care of some of these long term structural problems. The one thing I don't want to do is to replicate the false confidence that was premised on bubbles. And I think that we've really got to think through and all of you as critical captains of industry have to help us think through, how do we prevent this froth that builds up and go back to steady growth. Fundamental growth that's based on making things, providing good services, innovating, exporting, as opposed to just borrowing and leveraging. [17:10:54] and that is going to be a challenge, and there is going to be some adjustment. But even with consumers we've got this interesting situation where we're actually seeing consumers do exactly what we would have liked them to do just not all at once and that's starting to save some. Paying down credit card bills, making sure that they've socked away a little bit each month for their retirement for their kids college education, that actually is a positive thing. We just want to make sure that everybody understands that you don't have to stop in your tracks here. It's going to require some patience. The one thing that I think our country and our culture will benefit from is an end to short term gratification and a recognition that ultimately you build up value by hard work and dedication and sweat and there are going to be some bumps in the road and things take time. But I'm very confident about it, and I hope you are too. Thank you everybody APPLAUSE END 
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