PRESS CONFERENCE BY THE PRESIDENT James S. Brady
Press Briefing Room December 7, 2010
[WHITE HOUSE TRANSCRIPT]
2:25 P.M. EST
THE PRESIDENT: Good afternoon, everybody. Before I answer a
few
questions, I just wanted to say a few words about the agreement we’ve
reached on tax cuts.
My number one priority is to do what’s right for the American people,
for jobs, and for economic growth. I’m focused on making sure
that
tens of millions of hardworking Americans are not seeing their
paychecks shrink on January 1st just because the folks here in
Washington are busy trying to score political points.
And because of this agreement, middle-class Americans won’t see their
taxes go up on January 1st, which is what I promised -- a promise I
made during the campaign, a promise I made as President.
Because of this agreement, 2 million Americans who lost their jobs and
are looking for work will be able to pay their rent and put food on
their table. And in exchange for a temporary extension of the
high-income tax breaks -- not a permanent but a temporary extension --
a policy that I opposed but that Republicans are unwilling to budge on,
this agreement preserves additional tax cuts for the middle class that
I fought for and that Republicans opposed two years ago.
I’ll cite three of them. Number one, if you are a parent trying
to
raise your child or pay college tuition, you will continue to see tax
breaks next year. Second, if you’re a small business looking to
invest
and grow, you’ll have a tax cut next year. Third, as a result of
this
agreement, we will cut payroll taxes in 2011, which will add about
$1,000 to the take-home pay of a typical family.
So this isn’t an abstract debate. This is real money for real
people
that will make a real difference in the lives of the folks who sent us
here. It will make a real difference in the pace of job creation
and
economic growth. In other words, it’s a good deal for the
American
people.
Now, I
know there are some who would have preferred a protracted political
fight, even if it had meant higher taxes for all Americans, even if it
had meant an end to unemployment insurance for those who are
desperately looking for work.
And I understand the desire for a fight. I’m sympathetic to
that. I’m
as opposed to the high-end tax cuts today as I’ve been for years.
In
the long run, we simply can’t afford them. And when they expire
in two
years, I will fight to end them, just as I suspect the Republican Party
may fight to end the middle-class tax cuts that I’ve championed and
that they’ve opposed.
So
we’re going to keep on having this debate. We’re going to keep on
having this battle. But in the meantime I’m not here to play
games
with the American people or the health of our economy. My job is
to do
whatever I can to get this economy moving. My job is to do
whatever I
can to spur job creation. My job is to look out for middle-class
families who are struggling right now to get by and Americans who are
out of work through no fault of their own.
A long political fight that carried over into next year might have been
good politics, but it would be a bad deal for the economy and it would
be a bad deal for the American people. And my responsibility as
President is to do what’s right for the American people. That’s a
responsibility I intend to uphold as long as I am in this office.
So with that, let me take a couple of
questions.
Ben Feller.
Q Thank you, Mr. President. You’ve been telling
the American people
all along that you oppose extending the tax cuts for the wealthier
Americans. You said that again today. But what you never
said was
that you oppose the tax cuts, but you’d be willing to go ahead and
extend them for a couple years if the politics of the moment demand it.
So what I’m
wondering is when you take a stand like you had, why should the
American people believe that you’re going to stick with it? Why
should
the American people believe that you’re not going to flip flop?
THE PRESIDENT: Hold on a second, Ben. This isn’t the
politics of the
moment. This has to do with what can we get done right now.
So the
issue -- here’s the choice. It’s very stark. We can’t get
my
preferred option through the Senate right now. As a consequence,
if we
don’t get my option through the Senate right now, and we do nothing,
then on January 1st of this -- of 2011, the average family is going to
see their taxes go up about $3,000. Number two: At the end
of this
month, 2 million people will lose their unemployment
insurance.
Now, I have an option, which is to say, you know what, I’m going to
keep fighting a political fight, which I can’t win in the Senate -- and
by the way, there are going to be more Republican senators in the
Senate next year sworn in than there are currently. So the
likelihood
that the dynamic is going to improve for us getting my preferred option
through the Senate will be diminished. I’ve got an option of just
holding fast to my position and, as a consequence, 2 million people may
not be able to pay their bills and tens of millions of people who are
struggling right now are suddenly going to see their paychecks
smaller. Or alternatively, what I can do is I can say that I am
going
to stick to my position that those folks get relief, that people get
help for unemployment insurance. And I will continue to fight
before
the American people to make the point that the Republican position is
wrong.
Now, if
there was not collateral damage, if this was just a matter of my
politics or being able to persuade the American people to my side, then
I would just stick to my guns, because the fact of the matter is the
American people already agree with me. There are polls showing
right
now that the American people, for the most part, think it’s a bad idea
to provide tax cuts to the wealthy.
But the issue is not me persuading the American people; they’re already
there. The issue is, how do I persuade the Republicans in the
Senate
who are currently blocking that position. I have not been able to
budge them. And I don’t think there’s any suggestion anybody in
this
room thinks realistically that we can budge them right now.
And
in the meantime, there are a whole bunch of people being hurt and the
economy would be damaged. And my first job is to make sure that
the
economy is growing, that we’re creating jobs out there, and that people
who are struggling are getting some relief. And if I have to
choose
between having a protracted political battle on the one hand, but those
folks being hurt or helping those folks and continuing to fight this
political battle over the next two years, I will choose the latter.
Q
If I may follow up quickly, sir, you’re describing the situation you’re
in right now. What about the last two years when it comes to your
preferred option? Was there a failure either on the part of the
Democratic leadership on the Hill or here that you couldn’t preclude
these wealthier cuts from going forward?
THE
PRESIDENT: Well, let me say that on the Republican side, this is
their
holy grail, these tax cuts for the wealthy. This is -- seems to
be
their central economic doctrine. And so, unless we had 60 votes
in the
Senate at any given time, it would be very hard for us to move this
forward. I have said that I would have liked to have seen a vote
before the election. I thought this was a strong position for us
to
take into the election, to crystallize the positions of the two
parties, because I think the Democrats have better ideas. I think
our
proposal to make sure that the middle class is held harmless, but that
we don’t make these Bush tax cuts permanent for wealthy individuals,
because it was going to cost the country at a time when we’ve got these
looming deficits, that that was the better position to take. And
the
American people were persuaded by that.
But
the fact of the matter is, I haven’t persuaded the Republican
Party. I
haven’t persuaded Mitch McConnell and I haven’t persuaded John
Boehner. And if I can’t persuade them, then I’ve got to look at
what
is the best thing to do, given that reality, for the American people
and for jobs.
Julianna.
Q Thank you, Mr. President. Back in July, your
budget office’s
Mid-Session Review forecast that unemployment would be 7.7 percent in
the second -- in the fourth quarter of 2012. Will this package
deal
lower that projected rate? And also, is it going to do more to
boost
growth and create jobs than your Recovery Act?
THE PRESIDENT: This is not as significant a boost to the economy
as
the Recovery Act was, but we’re in a different situation now. I
mean,
when the Recovery Act passed, we were looking at a potential Great
Depression and we might have seen unemployment go up to 15 percent, 20
percent -- we don’t know. In combination with the work we did in
stabilizing the financial system, the work that the Federal Reserve
did, that’s behind us now. We don’t have the danger of a
double-dip
recession.
What
we have is a situation in which the economy, although growing, although
company profits are up, although we are seeing some job growth in the
private sector, the economy is not growing fast enough to drive down
the unemployment rate given the 8 million jobs that were lost before I
came into office and just as I was coming into office.
So what this package does is provide an additional boost that is
substantially more significant than I think most economic forecasters
had expected. And in fact, you’ve already seen some, just over
the
last 24 hours, suggest that we may see faster growth and more job
growth as a consequence of this package. I think the payroll tax
holiday will have an impact. Unemployment insurance probably has
the
biggest impact in terms of making sure that the recovery that we have
continues and perhaps at a faster pace.
So, overall, every economist I’ve talked to suggests that this will
help economic growth and this will help job growth over the next
several months. And that is the main criteria by which I made
this
decision.
Look, this is something that I think everybody has to remember, and I
would speak especially to my fellow Democrats who I think rightly are
passionate about middle-class families, working families, low-income
families who are having the toughest time in this economy.
The
single most important jobs program we can put in place is a growing
economy. The single most important anti-poverty program we can
put in
place is making sure folks have jobs and the economy is growing.
We
can do a whole bunch of other stuff, but if the economy is not growing,
if the private sector is not hiring faster than it’s currently hiring,
then we are going to continue to have problems no matter how many
programs we put into place.
And
that’s why, when I look at what our options were, for us to have
another three, four, five months of uncertainty, not only would that
have a direct impact on the people who see their paychecks get smaller,
not only would that have a direct impact on people who are unemployed
and literally depend on unemployment insurance to pay the bills or keep
their home or keep their car, but in terms of macroeconomics, the
overall health of the economy, that would have been a damaging thing.
Q
Just to follow up. The unemployment rate was just north of 8
percent
when the last Recovery Act was put in place. It’s now 9.8
percent.
Are you prepared to say today that the unemployment rate is going to go
down as a result of this package?
THE
PRESIDENT: My expectation is that the unemployment rate is going
to be
going down because the economy is growing. And even though it’s
growing more slowly that I’d like, it’s still growing.
Now,
how fast it’s going to go down, how quickly the economy is going to
grow, when are private sector businesses going to start making the
investments in plant and equipment and actually start hiring people
again? There are a lot of economists out there who have been
struggling with that question.
So
I’m not going to make a prediction. What I can say with
confidence is
that this package will help strengthen the economy -- will help
strengthen the recovery. That I’m confident about.
Chuck Todd.
Q Mr. President, what do you say to Democrats who say
you’re
rewarding Republican obstruction here? You yourself used in your
opening statement they were unwilling to budge on this. A lot of
progressive Democrats are saying they’re unwilling to budge, and you’re
asking them to get off the fence and budge. Why should they be
rewarding Republican obstruction?
THE PRESIDENT: Well, let me use a couple of analogies. I’ve
said
before that I felt that the middle-class tax cuts were being held
hostage to the high-end tax cuts. I think it’s tempting not to
negotiate with hostage-takers, unless the hostage gets harmed.
Then
people will question the wisdom of that strategy. In this case,
the
hostage was the American people and I was not willing to see them get
harmed.
Again,
this not an abstract political fight. This is not isolated here
in
Washington. There are people right now who, when their
unemployment
insurance runs out, will not be able to pay the bills. There are
folks
right now who are just barely making it on the paycheck that they’ve
got, and when that paycheck gets smaller on January 1st, they’re going
to have to scramble to figure out, how am I going to pay all my
bills?
How am I going to keep on making the payments for my child’s college
tuition? What am I going to do exactly?
Now, I could have enjoyed the battle with Republicans over the next
month or two, because as I said, the American people are on our
side.
This is not a situation in which I have failed to persuade the American
people of the rightness of our position. I know the polls.
The polls
are on our side on this. We weren’t operating from a position of
political weakness with respect to public opinion. The problem is
that
Republicans feel that this is the single most important thing that they
have to fight for as a party. And in light of that, it was going
to be
a protracted battle and they would have a stronger position next year
than they do currently.
So I guess another way of thinking about it is that if -- certainly if
we had made a determination that the deal was a permanent tax break for
high-income individuals in exchange for these short-term things that
people need right now, that would have been unacceptable. And the
reason is, is because you would be looking at $700 billion that would
be added to the deficit with very little on the short term that would
help to offset that.
The deal that we’ve struck here makes the high-end tax cuts temporary,
and that gives us the time to have this political battle without having
the same casualties for the American people that are my number one
concern.
Q If
I may follow, aren’t you telegraphing, though, a negotiating strategy
of how the Republicans can beat you in negotiations all the way through
the next year because they can just stick to their guns, stay united,
be unwilling to budge -- to use your words -- and force you to
capitulate?
THE
PRESIDENT: I don’t think so. And the reason is because this
is a very
unique circumstance. This is a situation in which tens of
millions of
people would be directly damaged and immediately damaged, and at a time
when the economy is just about to recover.
Now, keep in mind, I’ve just gone through two years, Chuck, where the
rap on me was I was too stubborn and wasn’t willing to budge on a whole
bunch of issues -- including, by the way, health care where everybody
here was writing about how, despite public opinion and despite this and
despite that, somehow the guy is going to bulldoze his way through this
thing.
Q Tell that to the left --
they weren’t happy --
THE
PRESIDENT: Well, but that’s my point. My point is I don’t
make
judgments based on what the conventional wisdom is at any given
time.
I make my judgments based on what I think is right for the country and
for the American people right now.
And I will be happy to see the Republicans test whether or not I’m
itching for a fight on a whole range of issues. I suspect they
will
find I am. And I think the American people will be on my side on
a
whole bunch of these fights. But right now I want to make sure
that
the American people aren’t hurt because we’re having a political fight,
and I think that this agreement accomplishes that.
And, as I said, there are a whole bunch of things that they are giving
up. I mean, the truth of the matter is, from the Republican
perspective, the Earned Income Tax Credit, the college tuition tax
credit, the Child Tax Credit -- all those things that are so important
for so many families across the country -- those are things they really
opposed. And so temporarily, they are willing to go along with
that,
presumably because they think they can beat me on that over the course
of the next two years.
And I’m happy to have that battle. I’m happy to have that
conversation. I just want to make sure that the American people
aren’t
harmed while we’re having that broader argument.
Scott Horsley.
Q Thank you, Mr. President. Last week members
of your
administration were boasting that your willingness to walk away from
the Korean negotiations led to a better deal. Can you explain how
this
is --
THE
PRESIDENT: The difference is that if I didn’t get the Korea deal
done
on January 1st the taxes of middle-class America wouldn’t go up.
It’s
pretty straightforward. If we didn’t get the Korea deal done by
January 1st, 2 million people weren’t suddenly looking at having no way
to support their families.
And that’s why -- this goes to Chuck’s question as well about what’s
going to be different in the future. You’ve got a situation here that
was urgent for millions of people. But as I recall, with the
Korea
free trade agreement, that was deemed by conventional wisdom as an
example of us not getting something done. I remember a story
above the
fold on that. Then when we got it done with a better deal that
has the
endorsement of not only the U.S. auto companies but also of labor, the
story was sort of below the fold. So I would just point that
out. I
think -- I am happy to be tested over the next several months about our
ability to negotiate with Republicans.
Q Having bought that time
now, do you hope to use this two-year window to push for a broader
overhaul of the tax code?
THE PRESIDENT: Yes. And the answer is yes. Part of
what I want to do
is to essentially get the American people in a safe place so that we
can then get the economy in a stable place. And then we’re going
to
have to have a broad-based discussion across the country about our
priorities. And I started doing that yesterday down in North
Carolina.
Here’s going to
be the long-term issue. We’ve had two years of emergency --
emergency
economic action on the banking industry, the auto industry, on
unemployment insurance, on a whole range of issues -- on state
budgets. The situation has now stabilized, although for those
folks
who are out of work, it’s still an emergency. So we’ve still got
to
focus short term on job growth.
But we’ve got to have a larger debate about how is this -- how is this
country going to win the economic competition of the 21st
century? How
are we going to make sure that we’ve got the best-trained workers in
the world? There was just a study that came out today showing how
we’ve slipped even further when it comes to math education and science
education.
So
what are we doing to revamp our schools to make sure our kids can
compete? What are we doing in terms of research and development
to
make sure that innovation is still taking place here in the United
States of America? What are we doing about our infrastructure so
that
we have the best airports and the best roads and the best
bridges? And
how are we going to pay for all that at a time when we’ve got both
short-term deficit problems, medium-term deficit problems, and
long-term deficit problems?
Now, that’s going to be a big debate. And it’s going to involve
us
sorting out what government functions are adding to our competitiveness
and increasing opportunity and making sure that we’re growing the
economy, and which aspects of the government aren’t helping.
And then we’ve got to figure out how do we pay for that. And
that’s
going to mean looking at the tax code and saying, what’s fair, what’s
efficient. And I don’t think anybody thinks the tax code right
now is
fair or efficient. But we’ve got to make sure that we don’t just
paper
over those problems by borrowing from China or Saudi Arabia. And
so
that’s going to be a major conversation.
And in that context, I don’t see how the Republicans win that
argument. I don’t know how they’re going to be able to argue that
extending permanently these high-end tax cuts is going to be good for
our economy when, to offset them, we’d end up having to cut vital
services for our kids, for our veterans, for our seniors.
But I’m happy to listen to their arguments. And I think the
American
people will benefit from that debate. And that’s going to be
starting
next year.
Marc Ambinder.
Q Mr. President, thank you. How do these
negotiations affect
negotiations or talks with Republicans about raising the debt
limit?
Because it would seem that they have a significant amount of leverage
over the White House now, going in. Was there ever any attempt by
the
White House to include raising the debt limit as a part of this package?
THE PRESIDENT: When you say it would seem they’ll have a
significant
amount of leverage over the White House, what do you mean?
Q Just in the sense that they’ll say essentially
we’re not going to
raise the -- we’re not going to agree to it unless the White House is
able to or willing to agree to significant spending cuts across the
board that probably go deeper and further than what you’re willing to
do. I mean, what leverage would you have --
THE PRESIDENT: Look, here’s my expectation -- and I’ll take John
Boehner at his word -- that nobody, Democrat or Republican, is willing
to see the full faith and credit of the United States government
collapse, that that would not be a good thing to happen. And so I
think that there will be significant discussions about the debt limit
vote. That’s something that nobody ever likes to vote on.
But once
John Boehner is sworn in as Speaker, then he’s going to have
responsibilities to govern. You can’t just stand on the sidelines
and
be a bomb thrower.
And so my expectation is, is that we will have tough negotiations
around the budget, but that ultimately we can arrive at a position that
is keeping the government open, keeping Social Security checks going
out, keeping veterans services being provided, but at the same time is
prudent when it comes to taxpayer dollars.
Jonathan Weisman, last question.
Q Some on the left have questioned -- have looked at
this deal and
questioned what your core values are, what specifically you will go to
the mat on. I’m wondering if you can reassure them with some
specific
things in saying, all right, this is where I don’t budge. And
along
those lines, what’s going to be different in 2012, when all these tax
cuts again are up for expiration?
THE PRESIDENT: Well, what’s going to be different in 2012 we’ve
just
discussed, which is we will have had two years to discuss the budget --
not in the abstract, but in concrete terms. Over the last two
years,
the Republicans have had the benefit of watching us take all these
emergency actions, having us preside over a $1.3 trillion deficit that
we inherited and just pointing fingers and saying, that’s their
problem.
Well,
over the next two years, they’re going to have to show me what it is
that they think they can do. And I think it becomes pretty clear,
after you go through the budget line by line, that if in fact they want
to pay for $700 billion worth of tax breaks to wealthy individuals,
that that’s a lot of money and that the cuts -- corresponding cuts that
would have to be made are very painful. So either they rethink
their
position, or I don’t think they’re going to do very well in 2012.
So
that’s on the first point.
With respect to the bottom line in terms of
what my core principles are --
Q Where is your line in the
sand?
THE PRESIDENT: Well, look, I’ve got a whole bunch of lines in the
sand. Not making the tax cuts for the wealthy permanent -- that
was a
line in the sand. Making sure that the things that most impact
middle-class families and low-income families, that those were
preserved -- that was a line in the sand. I would not have agreed
to a
deal, which, by the way, some in Congress were talking about, of just a
two-year extension on the Bush tax cuts and one year of unemployment
insurance, but meanwhile all the other provisions, the Earned Income
Tax Credit or other important breaks for middle-class families like the
college tax credit, that those had gone away just because they had
Obama’s name attached to them instead of Bush’s name attached to them.
So this notion that somehow we are willing to compromise too much
reminds me of the debate that we had during health care. This is
the
public option debate all over again. So I pass a signature piece
of
legislation where we finally get health care for all Americans,
something that Democrats had been fighting for for a hundred years, but
because there was a provision in there that they didn’t get that would
have affected maybe a couple of million people, even though we got
health insurance for 30 million people and the potential for
lower
premiums for 100 million people, that somehow that was a sign of
weakness and compromise.
Now,
if that’s the standard by which we are measuring success or core
principles, then let’s face it, we will never get anything done.
People will have the satisfaction of having a purist position and no
victories for the American people. And we will be able to feel
good
about ourselves and sanctimonious about how pure our intentions are and
how tough we are, and in the meantime, the American people are still
seeing themselves not able to get health insurance because of
preexisting conditions or not being able to pay their bills because
their unemployment insurance ran out.
That can’t be the measure of how we think about our public
service.
That can’t be the measure of what it means to be a Democrat. This
is a
big, diverse country. Not everybody agrees with us. I know
that
shocks people. The New York Times editorial page does not
permeate
across all of America. Neither does The Wall Street Journal
editorial
page. Most Americans, they’re just trying to figure out how to go
about their lives and how can we make sure that our elected officials
are looking out for us. And that means because it’s a big,
diverse
country and people have a lot of complicated positions, it means that
in order to get stuff done, we’re going to compromise. This is
why
FDR, when he started Social Security, it only affected widows and
orphans. You did not qualify. And yet now it is something
that really
helps a lot of people. When Medicare was started, it was a small
program. It grew.
Under the criteria that you just set out, each of those were betrayals
of some abstract ideal. This country was founded on
compromise. I
couldn’t go through the front door at this country’s founding.
And if
we were really thinking about ideal positions, we wouldn’t have a union.
So my job is to make sure that we have a North Star out there.
What is
helping the American people live out their lives? What is giving
them
more opportunity? What is growing the economy? What is
making us more
competitive? And at any given juncture, there are going to be
times
where my preferred option, what I am absolutely positive is right, I
can’t get done.
And so then my question is, does it make sense for me to tack a little
bit this way or tack a little bit that way, because I’m keeping my eye
on the long term and the long fight -- not my day-to-day news cycle,
but where am I going over the long term?
And I don’t think there’s a single Democrat out there, who if they
looked at where we started when I came into office and look at where we
are now, would say that somehow we have not moved in the direction that
I promised.
Take
a tally. Look at what I promised during the campaign.
There’s not a
single thing that I’ve said that I would do that I have not either done
or tried to do. And if I haven’t gotten it done yet, I’m still
trying
to do it.
And so
the -- to my Democratic friends, what I’d suggest is, let’s make sure
that we understand this is a long game. This is not a short
game. And
to my Republican friends, I would suggest -- I think this is a good
agreement, because I know that they’re swallowing some things that they
don’t like as well, and I’m looking forward to seeing them on the field
of competition over the next two years.