Almost all politicians stretch the truth, or outright lie, to convince people that what they’re doing is for their benefit. But what’s happening right now regarding a possible parliamentary move by Senate Democrats to use reconciliation to pass health care reform is just too much.

There are so many Republican lies whizzing across the media landscape about reconciliation it’s hard to keep up. The two biggest whoppers that GOP Senators and Fox News are disseminating are that Republicans would never dream of using reconciliation to thwart a filibuster, and that the use of the existing reconciliation rule (created in 1974) is the so-called “nuclear option.”

Republicans and Fox News are counting on no one looking at the public record and uncovering their blatant fabrications. If you look, you’ll see that Republicans have used reconciliation way more often than Democrats have. In fact, in the more than 20 times it’s been used, Republicans are on record with using reconciliation 17 times.

Most recently the GOP chose reconciliation to pass the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, the Deficit Reduction Act of 2005 and the Tax Increase Prevention and Reconciliation Act of 2005.

And as far as the so-called “nuclear option” is concerned – that has absolutely nothing to do with reconciliation – nothing, nada, zip, zilch.

It was Republicans who coined the “nuclear option” phrase back in 2003 when they threatened to change Senate rules outlawing the filibuster. They were pissed at Democrats who were trying to filibuster judicial nominees. It had nothing to do with reconciliation.

Watch this video. Stop watching Fox News. Think. Read. Research. Be critical. The information is there. “The truth is out there.” — Fox Mulder

Here we go again. Just like in 2003, groupthink is sweeping the nation. When the war drums were beating their loudest to attack Iraq, the media and pundits were onboard with the Bush administration lies. No one challenged what everyone knew to be true – that Saddam Hussein had weapons of mass destruction and he was going to attack the US. Now seven years later, we’re back at it again, but this time it’s that deadly deficit that will surely kill you and your family before the year is through.

Economist Paul Krugman has been calling for more deficit spending since the recession began. He wrote that “running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.”

And according to Krugman, he’s not a lone ranger supporting deficit spending.

“Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates,” Krugman said in his Feb. 4 column.

So what’s all the fuss about deficits? It’s politics of course. The GOP and their talk radio and Fox News echo chamber have created the illusion that deficit spending is bad and needs to stop now.

Krugman wrote that “the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda.”

And like the media’s duck-walking in lockstep with Bush’s push for war with Iraq, Americans will suffer if deficit spending is stopped now. Americans need jobs and they need them now. State governments can’t run deficits, but the federal government can.

“For the fact is that thanks to deficit hysteria,” Krugman said, “Washington now has its priorities all wrong: all the talk is about how to shave a few billion dollars off government spending, while there’s hardly any willingness to tackle mass unemployment. Policy is headed in the wrong direction — and millions of Americans will pay the price.”

Read Krugman’s column Fiscal Scare Tactics.”

Here’s the complete transcript and video of President Obama’s Weekly Address. The transcript was prepared by the White House and downloaded from WhiteHouse.gov on Feb. 7, 2010 at 2:30 p.m. Eastern.

Weekly Address
February 6, 2010

Even though our economy is growing again, these are still tough times for America. Too many businesses are still shuttered. Too many families can’t make ends meet. And while yesterday, we learned that the unemployment rate has dropped below ten percent for the first time since summer, it is still unacceptably high – and too many Americans still can’t find work.

But what we must remember at a time like this is that we are not helpless in the face of our difficulties. As Americans, we make our own destiny. We forge our own path. And I am confident that if we come together and put aside the politics that keeps holding us back, we can do that again. We can rebuild this economy on a new, stronger foundation that leads to more jobs and greater prosperity.

I believe a key part of that foundation is America’s small businesses – the places where most new jobs begin.

These companies represent the essence of the American spirit – the promise that anyone can succeed in this country if you have a good idea and the determination to see it through. And every once in awhile, these ideas don’t just lead to a new business and new jobs, but a new American product that forever changes the world. After all, Hewlett Packard began in a garage. Google began as a simple research project.

Government can’t create these businesses, but it can give entrepreneurs the support they need to open their doors, expand, or hire more workers. And that’s what we’ve always done in this country. The folks at Southwest Windpower in Flagstaff, Arizona started their company in a small home. Since getting a loan from the Small Business Administration, they’ve sold 160,000 wind turbines to about 90 different countries, and are hiring even more workers today. When Sam Ko walked into one of the SBA’s small business development centers in Illinois, he didn’t have any business experience at all – just a patent for a new metal manufacturing technology. He was given a loan and a business plan, and today his company is still growing, with offices all over the Midwest.

Last year, the steps we took supported over 47,000 loans to small businesses and delivered billions in tax relief to small business owners, which helped companies keep their doors open, make payroll, and hire workers. But we can and must do more. That’s why I’ve proposed a series of steps this week to support small business owners and the jobs they create – to provide more access to credit, more incentives to hire, and more opportunities to grow and sell products all over the world.

Because financing remains difficult for good, credit-worthy small businesses across the country, I’ve proposed that we take $30 billion from the TARP fund originally used for Wall Street and create a new Small Business Lending Fund that will provide capital for community banks on Main Street. These are the small, local banks that will be able to give our small business owners more of the credit they need to stay afloat. We should also continue to waive fees, increase guarantees, and expand the size of SBA-backed loans for small businesses. And yesterday, I proposed making it easier for small business owners to refinance their mortgages during these tough times.

To give these companies greater incentives to grow and create jobs, I’ve proposed a new tax credit for more than one million small businesses that hire new workers or raise wages, as well as the elimination of all capital gains taxes on small business investment.

Finally, we should provide targeted support to the most innovative small businesses – the ones with the greatest potential to export new goods and products all over the world. A lot of these companies – like the wind turbine manufacturer I mentioned – are the foundation on which we can rebuild our economy to compete in the 21st century. They just need a little help securing the financing they need to get off the ground. We have every incentive to help them do that.

Next week, Congress will start debating many of these proposals. And if anyone has additional ideas to support small businesses and create jobs, I’m happy to consider them. My door is always open. But I urge members of both parties: do not oppose good ideas just because it’s good politics to do so. The proposals I’ve outlined are not Democratic or Republican; liberal or conservative. They are pro-business, they are pro-growth, and they are pro-job. Leaders in both parties have supported similar ideas in the past. So let’s come together and pass these measures without delay. Let’s put more Americans back to work, and let’s give our small business owners the support to do what they’ve always done: the freedom to pursue their dreams and build our country’s future. Thanks for listening.

Fox News broadcasted an edited version of the Bill O’Reilly interview with Jon Stewart on cable. Not inherently a bad thing to do, perfectly acceptable, but some have suggested that it made O’Reilly look like he nailed Stewart. Here’s the entire unedited version of the interview.

Here’s the complete video of Sarah Palin’s speech at the Tea Party Convention on Feb. 6, 2010. Palin is the de facto leader of the Tea Party movement. The speech sounds like she’s planning for a presidential run in 2012.

There are two questions. Who will she pick as a running mate and what will the new political party be called?

When and if a transcript becomes available, it will be posted here.

This is a complete transcript and the full video of President Obama’s meeting with Senate Democrats on Feb. 3, 2010. The transcript was provided by the White House and downloaded from WhiteHouse.gov at approximately 11:15 a.m. Eastern on Feb. 4, 2010

10:09 A.M. EST

THE PRESIDENT: Thank you, guys. Thank you. Thank you very much. Thank you. Everybody please have a seat. Thank you.

Listen, you guys had to listen to me at the State of the Union — or at least pretend to listen to me. (Laughter.) So I’ll try to keep it relatively brief, some opening remarks and then open it up for questions.

First of all, I just want to thank Harry Reid. (Applause.) I recently said he’s got one of the toughest jobs in Washington — managing an institution that by its very nature is, let’s face it, you guys are a little difficult to manage. I’ve been a part of this caucus. I really don’t think anybody could have done a better job under more trying circumstances than Harry Reid. And I think he deserves a huge round of applause. (Applause.)

Now, let me start by saying we always knew this was going to be a difficult year to govern — an extraordinarily difficult year to govern. We began 2009 with a financial system on the brink of collapse, an economy bleeding nearly 700,000 jobs per month, a $1.3 trillion deficit, and two wars that were costly in every sense of the word. We knew that solutions wouldn’t come easily or come quickly. We knew that the right decisions would be tough and sometimes they would be unpopular. And we knew that we might have to make them sometimes without any help from our friends on the other side of the aisle.

But we made those decisions. We led. Those actions prevented another Great Depression; they broke the back of a severe recession. The economy that was shrinking by 6 percent a year ago is now growing at nearly 6 percent one year later. (Applause.) That’s because of the work that you did.

Harry listed some of the work that you did on behalf of the American people, even under these difficult circumstances: extending health insurance to 4 million children, protecting consumers from getting ripped off by their credit card companies, and kids being targeted by big tobacco. Some things that weren’t noted or didn’t get a lot of attention: You reformed defense spending by eliminating waste, and saved taxpayers billions while keeping us safe at the same time. You gave billions of dollars of tax relief to small businesses and 95 percent of working families here in America.

You did all this despite facing enormous procedural obstacles that are unprecedented. You may have looked at these statistics. You had to cast more votes to break filibusters last year than in the entire 1950s and ’60s combined. That’s 20 years of obstruction packed into just one. But you didn’t let it stop you.

As Harry mentioned, though, our mission is far from accomplished, because while the worst of the storm has passed, far too many Americans are still hurting in its wake. I know you’ve seen it back home in the shuttered businesses, the foreclosed homes; you’ve heard it from constituents who are desperate for work; and we’ve seen it in the burdens that families have been grappling with long since this recession hit — issues that we’ve been talking about now for years: the burden of working harder and longer for less, of being unable to save enough to retire or to help kids with college expenses, the extraordinarily constant rising costs of health care.

Those problems haven’t gone away. It’s still our responsibility to address them. All that’s changed in the last two weeks is that our party has gone from having the largest Senate majority in a generation to the second largest Senate majority in a generation. And we’ve got to remember that. There was apparently a headline after the Massachusetts election; the Village Voice announced that Republicans win a 41-59 majority. (Laughter.) It’s worth thinking about. We still have to lead.

Saving and creating jobs have to continue to be our focus in 2010. Last year, we gave small business — the engines of job creation — tax relief, and expanded lending through the SBA. I don’t know if you are aware that SBA loans have gone up 70, 80 percent, which, by the way, indicates the degree to which there is still huge demand among small businesses. Some of the banks are saying, well, we’re not lending because there’s not as much demand out there. There are a lot of small businesses that are hungry for loans out there right now. And we’ve made progress but they’re still struggling. So I’ve proposed additional ideas to help small businesses start up and hire, to raise wages and expand, and to get the credit they need to stay afloat. You’ve made some of these same proposals, as well. We should put them into action without delay. (Applause.)

We’ve invested in America’s infrastructure, rebuilding roads and bridges, and ports and railways, and putting people to work strengthening our communities and our country. And as you know, the Recovery Act was designed so that a lot of that work is going to be taking place this year, not just last year. Many of the projects you funded come online in the next six months. But we can do more, and we should do so without delay.

Through the investments you made in clean energy startups, we’ve not only helped put Americans to work, we’re on track to double our nation’s capacity to generate renewable energy over the next few years. I’ve proposed additional tax credits that will promote private sector hiring and energy conservation. We should do that without delay.

I think ideas like this should be pretty palatable to the other party. They seem pretty common sense, pretty centrist. We should be able to hear their ideas as well. That’s why I spoke to the Republican caucus last Friday. I think it was to the country’s benefit that we had an open and frank discussion about the challenges facing the American people and our ideas to solve them. (Applause.) I got to admit, I had a little fun at that caucus. (Laughter.)

Now, obviously, on some issues, we didn’t agree. But on some, we did. And I’m reminded that when it came to health insurance reform in particular, I sought out and supported Republican ideas from the start — so did you. Max Baucus — where’s Max? I think he can testify to spending a little time listening to Republican ideas. So can Chris Dodd and Tom Harkin. You considered hundreds of Republican amendments, and incorporated many of their ideas into the legislation that passed the Senate. So when I start hearing that we should accept Republican ideas, let’s be clear — we have. What hasn’t happened is the other side accepting our ideas.

And I told them, I want to work together when we can, and I meant it. I believe that’s the best way to get things done for the American people. But I also made it clear that we’ll call them out when they say they want to work with us and we extend a hand and get a fist in return.

Last week, for example, you put up for a vote a bill I supported — Conrad-Gregg fiscal commission. We were sure this was going to be bipartisan, only to see seven Republicans who co-sponsored the idea in the first place suddenly decide to vote against it.

Now, I’m open to honest differences of opinion. But what I’m not open to is changing positions solely because it’s good short-term politics. And what I’m not open to is a decision to stay on the sidelines and then assign blame. I’ve little patience for the kinds of political calculation that says the cost of blocking everything is less than the cost of passing nothing; that basically says “If they lose, I win.” That’s been the politics in Washington for too long, and the problem is it leaves the American people out of the equation.

So I would just suggest to this caucus, if anybody is searching for a lesson from Massachusetts, I promise you the answer is not to do nothing. The American people are out of patience with business as usual. They’re fed up with a Washington that has become so absorbed with who’s up and who’s down that we’ve lost sight of how they’re doing. They want us to start worrying less about keeping our jobs and more about helping them keep their jobs.

And they want to see their business done in an open and transparent way. When we took back the Senate in 2007, we did so in part because we made a case that we’d be better on ethics and transparency. And we backed that up by passing the most sweeping ethics reforms since Watergate and by beginning to address earmark abuse. We should be proud of those accomplishments. But if we’re going to erase that deficit of trust that I mentioned at the State of the Union, we’re still going to have to do more.

That’s why I’ve proposed that we work together to make all earmark requests public, on one central Web site, before they come up for a vote; and to require lobbyists to discuss details of their contacts on behalf of their clients with the administration or with Congress. That’s why, working with people like Dick Durbin, who’s been vocal on this for a long time, we’ve got to confront the gaping loophole that the Supreme Court recently opened in our campaign finance laws that allowed special interests to spend without limit to influence American elections.

We’ve also got to get back to fiscal responsibility. And I spoke about this at the State of the Union. Just 10 years ago, America had a budget surplus of over $200 billion. Remember, people were worried about what might happen with all these surpluses, and whether it would create problems in the financial markets. That was just a decade ago.

After two wars, two tax cuts, prescription drug program — none of which were paid for — we faced a deficit of over $1 trillion, a debt over the next decade of $8 trillion, before my administration spent a single dollar.

Now, we can’t change the past, but we can change the future. That’s why I’m asking you to adopt a freeze in non-security discretionary spending for the next three years, starting next year. We’re still having a tough time right now, given the economy is just starting to pick up steam — but starting next year.

That’s why I’m grateful that all of you restored the PAYGO rules that worked so well in the 1990s. I already mentioned the fiscal commission. We may not have been able to get the votes for a statutory commission, but we’re going to — I am going to appoint a commission by executive order, because it’s important for us to take these issues seriously — not just for us but for our children and our grandchildren.

Let me just wrap up by saying this. I know these are tough times to hold public office. I’m there in the arena with you. The need is great. The anger and the anguish are intense. The economy is massive and so, as a consequence, no matter what levers and buttons we press, sometimes it doesn’t move as quickly as is needed to provide relief to so many of our constituents. In that kind of circumstance, I think the natural political instinct is to tread lightly, keep your head down, and to play it safe.

I’ve said this before to this caucus; I just want to say it again. For me, it is constantly important to remind myself why I got into this business in the first place; why I’m willing to be away from my family for big stretches at a time; the financial sacrifices that so many of you have made; being subject to criticism constantly. You don’t get in this for the fame. You don’t get in it for the title. You get in it because somewhere in your background, at some point in time, you decided there was an issue that was so important that you were willing to stand up and be counted. You were going to fight for something. And you decided you were going to run as a Democrat because there was a core set of values within the Democratic Party about making sure that everybody had a fair shot, making sure that middle-class folks were treated fairly in our economy, making sure that those who were on the outside had a way in that led you to get involved in public service.

And that’s what we have to remind ourselves, especially when it’s hard — especially when it’s hard. You look at an issue right now like health care. So many of us campaigned on the idea that we were going to change this health care system. So many of us looked people in the eye who had been denied because of a preexisting condition, or just didn’t have health insurance at all, or small business owners in our communities who told us that their premiums had gone up 25 percent or 30 percent. And we said we were going to change it.

Well, here we are with a chance to change it. And all of you put extraordinary work last year into making serious changes that would not only reform the insurance industry, not only cover 30 million Americans, but would also bend the cost curve, and save a trillion dollars on our deficits, according to the Congressional Budget Office. There’s a direct link between the work that you guys did on that and the reason that you got into public office in the first place.

And so as we think about moving forward, I hope we don’t lose sight of why we’re here. We’ve got to finish the job on health care. (Applause.) We’ve got to finish the job on financial regulatory reform. (Applause.) We’ve got to finish the job even though it’s hard.

And I’m absolutely confident that if we do so in an open way, in a transparent way, in a spirit that says to our political opponents that we welcome their ideas, we are open to compromise, but what we’re not willing to do is to give up on the basic notion that this government can be responsive to ordinary people and help give them a hand up so they can achieve their American Dream — we will not give up that ideal. (Applause.) If that’s where we go, I’m confident that politics in 2010 will take care of themselves.

Harry, thank you very much. I’m going to turn it over to questions. Thank you. (Applause.)

SENATOR REID: First question, Arlen Specter. Let me tell everyone people have come to me and indicated they wanted to ask questions. We’re taking a list of those. Arlen Specter is first.

SENATOR SPECTER: Mr. President, I begin by applauding your decision to place the economy at the top of the agenda, to put America back to work and provide jobs, jobs, jobs.

I have a two-part question, and just a brief statement of the issue. We have lost 2.3 million jobs as a result of the trade imbalance with China between 2001 and 2007. The remedies to save those jobs are very ineffective — long delays, proceedings before the International Trade Commission, subject to being overruled by the President. We have China violating international law with subsidies and dumping — really, a form of international banditry. They take our money and then they lend it back to us and own now a big part of the United States.

The first part of my question is, would you support more effective remedies to allow injured parties — unions which lose jobs, companies which lose profits — by endorsing a judicial remedy, if not in U.S. courts perhaps in an international court, and eliminate the aspect of having the ITC decisions overruled by the President — done four times in 2003 to 2005, at a cost of a tremendous number of jobs on the basis of the national interest. And if we have an issue on the national interest, let the nation pay for it, as opposed to the steel industry or the United Steel Workers.

And the second part of the question, related, is when China got into the World Trade Organization, a matter that 15 of us in this body opposed, there were bilateral treaties. And China has not lived up to its obligations to have its markets open to us, but take our markets and take our jobs. Would you support an effort to revise, perhaps even revoke, those — that bilateral treaty, which gives China such an unfair trade advantage? Thank you.

THE PRESIDENT: Arlen, I would not be in favor of revoking the trade relationships that we’ve established with China. I have shown myself during the course of this year more than willing to enforce our trade agreements in a much more serious way. And at times I’ve been criticized for it. There was a case involving foreign tires that were being sent in here, and I said this was an example of where we’ve got to put our foot down and show that we’re serious about enforcement. And it caused the usual fuss at the international level, but it was the right thing to do.

Having said that, I also believe that our future is going to be tied up with our ability to sell products all around the world, and China is going to be one of our biggest markets, and Asia is going to be one of our biggest markets. And for us to close ourselves off from that market would be a mistake.

The point you’re making, Arlen, which is the right one, is it’s got to be reciprocal. So if we have established agreements in which both sides are supposed to open up their markets, we do so and then the other side is imposing a whole set of non-tariff barriers in place, that’s a problem. And it has to be squarely confronted.

So the approach that we’re taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways.

One of the challenges that we’ve got to address internationally is currency rates and how they match up to make sure that our goods are not artificially inflated in price and their goods are artificially deflated in price. That puts us at a huge competitive disadvantage.

But what I don’t want to do is for us as a country, or as a party, to shy away from the prospects of international competition, because I think we’ve got the best workers on Earth, we’ve got the most innovative products on Earth, and if we are able to compete on an even playing field, nobody can beat us. And by the way, that will create jobs here in the United States.

If we just increased our exports to Asia by a percentage point, by a fraction, it would mean hundreds of thousands, maybe millions of jobs here in the United States. And it’s easily doable.

And that’s why we are going to be putting a much bigger emphasis on export promotion over the next several years. And that includes, by the way, export promotion not just for large companies but also for medium-size and small companies, because one of the challenges — I was up in New Hampshire yesterday, and you saw this terrific new company that had just been started up — it’s only got 13, 14 employees at this point. But it has a new manufacturing technique for the component parts in LED light bulbs, potentially could lower the price of LED light bulbs, cut them in half.

And these folks, they potentially could market not just here in the United States, but this is a technology that could end up being sent all around the world. But they don’t have the money to set up their own foreign office in Beijing to navigate through the bureaucracy. They’ve got to have some help being over there. And so that’s one of the things that we really want to focus on in this coming year, is making sure that our export-import banks, our trade offices, that we are assisting not just the big guys, although we do want to help them, but also the medium-sized and small businesses that have innovative products that could be marketed if they just got a little bit of help and a little bit of push from the United States government.

SENATOR REID: Sir, Michael Bennet, Colorado.

SENATOR BENNET: Thanks for coming, Mr. President. It’s good to see you. You talked in the State of the Union very well about a number of the challenges that we face as a country, which are serious. I mean, even before we were driven into the worst recession since the Great Depression, the last period of economic growth in this country’s history, was the first time middle-class family income actually fell during a period of economic growth; no net jobs created since 1998; household wealth the same at the end of the decade as it was at the beginning; and an education system that’s not working well enough for our kids. And on top of everything else, got a $1.4 trillion deficit and $12 trillion of debt.

I was saying that the other day, by the way, in Colorado, and I was talking about how our kids were going to have to pay this back if we didn’t make this decision that we’ve got to face up to. And my daughter, Caroline, who’s 10, was there, and she walked out with me at the end and she said, “Just so you know, I’m not paying that back.” (Laughter.) So she has the right attitude, I think.

THE PRESIDENT: But just in case you’re counting on it. (Laughter.)

SENATOR BENNET: At the same time, this place looks broken to the American people. Our ability to make these decisions is open to enormous question in the wake of the health care discussion, in particular. I had a woman the other day in Glenwood Springs, Colorado, ask me where she could get her lobbyist in Washington, D.C.

What are we going to do differently? What are you going to do differently? What do we need to do differently as Democrats and Republicans to fix this institution so that our democracy can actually withstand the test that we’re facing right now?

THE PRESIDENT: Well, let me just make a couple observations, having served in the Senate and now seeing it from the perspective of the White House.

First of all, whenever people ask me, why isn’t Washington working — I am a fierce defender of the integrity and hard work of individual members, which is, by the way, matched up by –when you look at polls, people hate Congress, but individual members a lot of them feel are really working hard on their behalf.

So the problem here you’ve got is an institution that increasingly is not adapted to the demands of a hugely competitive 21st century economy. I think the Senate in particular, the challenge that I gave to Republicans and I will continue to issue to Republicans is if you want to govern then you can’t just say no. It can’t just be about scoring points. There are multiple examples during the course of this year in which that’s been the case.

Look, I mentioned the filibuster record. We’ve had scores of pieces of legislation in which there was a filibuster, cloture had to be invoked, and then ended up passing 90 to 10, or 80 to 15. And what that indicates is a degree to which we’re just trying to gum up the works instead of getting business done.

That is an institutional problem. In the Senate, the filibuster only works if there is a genuine spirit of compromise and trying to solve problems, as opposed to just shutting the place down. If it’s just shutting the place down, then it’s not going to work. That’s point number one.

Point number two. In terms of what — how we operate, we as Democrats, I do think that the more open we are, the more transparent we are, the more people know exactly how things are working even if sometimes it takes longer to maintain that transparency, the better off we are.

And I think the health care bill is a perfect example. And the truth of the matter is, is that the process looked painful and messy, but the innumerable hearings that were held did give an opportunity for the product to get refined so that I think that the ultimate package, after potential negotiations between the House and the Senate, is better than where we started. And there was a possibility and continues to be a possibility to be in discussions with the American people about what exactly that bill accomplishes.

On the other hand — and I take some fault for this — at the end of the process when we were fighting through all these filibusters and trying to get it done quickly so that we could pivot and start talking about other issues that were so important to the American people, some of that transparency got lost. And I think we paid a price for it.

And so it’s important, I think, to constantly have our cards out on the table and welcome challenges and welcome questions. If the Republicans say that they can insure every American for free, which it what was claimed the other day, at no cost, I want to know. Because I told them, I said, why would I want to get a bunch of lumps on my head doing the hard thing if you’ve got the easy thing? But you’ve got to show me, you’ve got to prove to me that it actually works — because I’ve talked to every health care expert out there and it turns out if you want to reform the insurance system, if you want to make sure that people without preexisting conditions are able to get insurance, if you want to provide coverage for people, if you want to bend the cost curve, then you need a comprehensive bill, because this is a complicated area involving one-sixth of our economy.

But we should be open to that dialogue, and not underestimate the power of the American people, over time — despite millions of dollars of advertising to the contrary from the insurance industry and others — we should not underestimate the American people’s willingness to say, okay, I got it. And there are still going to be disagreements, and some will disagree with us. But we’ve got to constantly make our case, I think, and not play an insider’s game. Play an outsider’s game.

Last point I would make about this. You know what I think would actually make a difference, Michael — I think if everybody here — excuse all the members of the press who are here — if everybody here turned off your CNN, your Fox, your — just turn off the TV — MSNBC, blogs — and just go talk to folks out there, instead of being in this echo chamber where the topic is constantly politics — the topic is politics. It is much more difficult to get a conversation focused on how are we going to help people than a conversation about how is this going to help or hurt somebody politically.

And that’s part of what the American people are just sick of — because they don’t care, frankly, about majority and minorities and process and this and that. They just want to know, are you delivering for me? And we’ve got to, I think, get out of the echo chamber. That was a mistake that I think I made last year, was just not getting out of here enough. And it’s helpful when you do. (Applause.)

SENATOR REID: Mr. President, you’ve told me — suggested don’t pay any attention to the blogs, don’t listen to talk radio, don’t watch cable TV. And I follow that advice pretty good. (Laughter.)

Next question will be from the chair of our Agriculture Committee, the Senator from Arkansas, Blanche Lincoln.

SENATOR LINCOLN: Me, neither, Mr. President. I stay away from the TVs and everything else. But thank you so much for being here with us today. And I want to thank you also — I had an opportunity with several of my colleagues from the House and Senate to have a bipartisan meeting yesterday with the First Lady on childhood obesity. It was a great meeting and we look forward to working with her and you and your administration to really tackle that problem on behalf of our children and the future of our country.

Mr. President, I come from a seventh-generation Arkansas family. My dad was a good Democrat, and he was a great Arkansan, and he was very typical of Arkansans in that he was very independent-minded, as am I, and as most of my constituents. And he used to tell me early on when I ran for Congress, he said it’s really results that count. And as I look at what’s going on in my state and among my constituents — I visited with a constituent yesterday, good Democrat, small business owner, who was extremely frustrated — extremely frustrated because there was a lack of certainty and predictability from his government for him to be able to run his businesses. He’s — he and his father have worked hard, they’ve built three or four different small businesses, and he fears that there’s no one in your administration that understands what it means to go to work on Monday and have to make a payroll on Friday. He wants results. He wants predictability.

And I think that you’re exactly right. People out there watching us, they see us nothing more than Democrats and Republicans up here fighting, fighting only to win a few political points, not to get the problem solved. And so I just — I want to echo I guess some of what my colleague, Michael Bennet from Colorado, mentioned, but also to ask you, in terms of where we are going, what can we tell the people in terms of predictability and certainty in getting this economy back on track? How are we going to do that?

And are we willing as Democrats not only to reach out to Republicans but to push back in our own party for people who want extremes, and look for the common ground that’s going to get us the success that we need not only for our constituents but for our country in this global community, in this global economy? Are we willing as Democrats to also push back on our own party and look for that common ground that we need to work with Republicans and to get the answers? And it’s really the results that are going to count to our constituents. And we appreciate the hard work that you put into it.

THE PRESIDENT: Well, the — look, there’s no doubt that this past year has been an uncertain time for the American people, for businesses and for people employed by businesses. Some of that certainty just had to do with the objective reality of this economy entering into a freefall. So let’s just be — let’s remind ourselves that if you’ve got an economy suddenly contracting by 6 percent, or a loss of trillions of dollars of wealth basically in the blink of an eye, or home values descending by 20 percent, that that’s going to create a whole lot of uncertainty out there in the business environment and among families.

And part of what we’ve done over the course of this year is to put a floor under people’s feet. That’s what the Recovery Act did. That’s what the interventions and the financial markets did. It broke the back of the recession, stabilized the markets. Nobody is talking about a market meltdown at this point. And people haven’t recovered all that they had lost in their 401(k)s, but they’re feeling a little better when they open that envelope now than they did six months ago. State budgets were in freefall; that was stabilized. States are still going through incredible pain, but they did not have to lay off teachers and firefighters and cops at the levels that they would have to otherwise lay them off. That provided some stability and some certainty.

So the steps you’ve taken as a Congress, the steps we’ve taken as an administration, have helped to stabilize things.

Now, moving forward, Blanche, what you’re going to hear from some folks is that the way to achieve even greater economic growth — and keep in mind the economy is now growing at a 6 percent clip, so the question is when do businesses actually start hiring, because they’re now making a profit — what you’re going to start hearing is the only way to provide stability is to go back and do what we’d been doing before the crisis.

So I noticed yesterday when we were — there was some hearing about our proposal to provide additional financing to small businesses and tax credits to small businesses. Some of our friends on the other side of the aisle said, “This won’t help at all. What you have to do is to make sure that we continue the tax breaks for wealthiest Americans. That’s really what’s going to make a difference.”

Well, if the agenda — if the price of certainty is essentially for us to adopt the exact same proposals that were in place for eight years leading up to the biggest economic crisis since the Great Depression — we don’t tinker with health care, let the insurance companies do what they want, we don’t put in place any insurance reforms, we don’t mess with the banks, let them keep on doing what they’re doing now because we don’t want to stir up Wall Street — the result is going to be the same.

I don’t know why we would expect a different outcome pursuing the exact same policies that got us into this fix in the first place. Michael Bennet articulated it very well. Part of the reason people are feeling anxious right now, it’s not just because of this current crisis — they’ve been going through this for 10 years. They’ve been working and not seeing a raise. Their costs have been going up, their spouses going to the workforce — they work as hard as they can. They’re barely keeping their heads above water. They’re trying to figure out how to retire. They’re seeing more and more of their costs on health care dumped in their lap. College tuition skyrockets.

They are more and more vulnerable, and they have been for the last decade, treading water. And if our response ends up being, because we don’t want to — we don’t want to stir things up here, we’re just going to do the same thing that was being done before, then I don’t know what differentiates us from the other guys. And I don’t know why people would say, boy, we really want to make sure that those Democrats are in Washington fighting for us.

So the point I’m making — and Blanche is exactly right — we’ve got to be non-ideological about our approach to these things. We’ve got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can’t be demonizing every bank out there. We’ve got to be the party of business, small business and large business, because they produce jobs. We’ve got to be in favor of competition and exports and trade. We don’t want to be looking backwards. We can’t just go back to the New Deal and try to grab all the same policies of the 1930s and think somehow they’d work in the 21st century.

So Blanche is exactly right that sometimes we get ideologically bogged down. I just want to find out what works, and I know you do, too, and I know the people in Arkansas do, too. But when you’re talking to the folks in Arkansas you also have to remind them what works is not just going back and doing the same things that we were doing before. And, yes, there’s going to be some transition time. If we have a serious financial regulatory reform package, will the banks squawk? Yes. Will they say this is the reason we’re not lending? Yes. The problem is we know right now they’re not lending, and paying out big bonuses. And we know that the existing regulatory system doesn’t work.

So we shouldn’t be spooked by this notion that, well, is now the time to take seriously in an intelligent way, not in a knee-jerk way, the challenge of financial regulatory reform so that you don’t have banks that are too big to fail and you’re not putting taxpayers at risk and you’re not putting the economy at risk — now is the time to do it.

The same is true with health care. The same is true with health care. There are, I promise you, at least as many small businesses out there, if you talk to them, who will say, I just got my bill from my health insurance and it went up 40 percent. And we’ve got to do something for them. All right? (Applause.)

SENATOR REID: Next question, the junior Senator from the state of New York, Kirsten Gillibrand.

SENATOR GILLIBRAND: Mr. President, I have an issue I’d like to –

THE PRESIDENT: Kirsten, we’ve got a mic for you.

SENATOR GILLIBRAND: Thank you, Mr. President. I have an issue I’d like to raise that is very important to every New Yorker and to many, many Americans, and that’s health care for our 9/11 responders and for all the communities that live near Ground Zero.

Now, these Americans hail from every one of the 50 states and every single congressional district in the entire United States. And now, because of exposure to toxins from the collapse of the World Trade Center Towers, there’s about 20,000 people who are sick — some of them gravely ill, suffering from serious health effects, some are disabled, some have died.

I’ve introduced legislation to provide permanent care and proper compensation for these Americans. And my question is: Would you today commit to working with Congress to pass comprehensive 9/11 — a comprehensive 9/11 health bill that’s fully paid for?

THE PRESIDENT: Well, I fully commit to working with you guys. Keep in mind that our budget already significantly increased funding precisely for this purpose. So I’m not just talking the talk; we’ve been budgeting this as a top priority for the administration.

I confess, Kirsten, I have not looked at all the details of your legislation. But I know that not only you and Chuck, but everybody here, wants to make sure that those who showed such extraordinary courage and heroism during 9/11, that they are fittingly cared for, and that’s going to be something that we are going to be very interested in working with you on. All right?

SENATOR GILLIBRAND: Thank you, Mr. President.

THE PRESIDENT: Good. (Applause.)

SENATOR REID: The next question is the Chairperson of the Environmental Public Works Committee, Senator Barbara Boxer.

THE PRESIDENT: Hey, Barbara Boxer.

SENATOR BOXER: Great to see you here, Mr. President. And thanks for doing this and thanks for meeting with the Republican caucus at the House. I thought it was very instructive for the American people.

As Senator Feinstein and I tell our colleagues every day, California is hurting. I think — I know — that you’re aware of that. And they really want to see a fighting spirit in us — that we are committed, even though we’ve had some political setbacks, to get the job done. And I just want to tell you, as I watched you during the State of the Union, listened to you, what you are doing now is really important to the folks that I represent, because you’re showing that fighting spirit no matter what the adversity is, and you’re coming up with specific proposals.

So I want to ask you about small business. We all know they’re the job creators; 64 percent of new jobs over the last 15 years came from small business. Your new proposal, which does mirror a couple of people — I look at Senator Merkley, I know Senator Warner and others, we’ve worked hard on this.

For community banks to lend, can you do that by executive order? Because my understanding is you can use some of the TARP funds that were paid back and use that — or those funds that have not been used — can you use that and get this going by executive order, or do you need us to put that program into a jobs bill?

And second, are you using your influence as much as you can to get the big banks to lend? They’ve dropped lending by $12 billion over the last year, so I wonder if you can give us an update on that.

THE PRESIDENT: First of all, I’ve now taken trips to Allentown, Pennsylvania; Elyria, Ohio; most recently –

SENATOR REID: Baltimore.

THE PRESIDENT: I was in Baltimore. (Laughter.) Had a great time in Baltimore. Just recently in –

SENATOR REID: Searchlight.

THE PRESIDENT: — Nashua, New Hampshire. Haven’t been to Searchlight yet, but we’re going to get there. (Laughter.) And everywhere I go, you talk to small business and they will tell you they are still experiencing a severe credit crunch. The larger businesses right now are able to get financing. Even the medium-size businesses, the credit markets have improved. Smaller businesses, even if they are making a profit and have not missed a payment, are finding that banks are averse to providing them capital.

Now, two reasons that they cite: One is they say their bankers are telling them that the regulators are just looking over their shoulder too much and so the community banks feel that their hands are tied. These are independent regulators. They are diligent in doing their jobs. Obviously they feel caught off guard because of the lax regulation, in some cases, of the banking industry before the financial crisis. You get a sense that the pendulum has swung too far in the other direction.

The challenge that we’ve got is we’ve got to be careful because these are independent regulators and we don’t want to politicize them. But what Treasury Secretary Geithner and others have done is to discuss with the regulators what we are hearing in the field and to make sure that there is a consistency of approach that doesn’t prevent banks from making what are good loans and taking reasonable risks.

So that’s one thing we’re hearing. The other thing, though, that is still out there is that the larger banks generally haven’t been in this market; a lot of the smaller companies never had access to them in the first place, and we want to actually see if we can get more of those large banks to get into this marketplace. And when I met with the big bank CEOs, this was something that I pushed them on. They tell me, and we have seen some confirmation of this, that they are actually ramping up some of their small business lending and setting up more aggressive divisions actively seeking out loans.

So that’s the effort that we’re making to jawbone the private sector to do what it needs to do. In the meantime — you mentioned the specific proposals that we’ve put forward — I do think it’s better to do them through legislation than through executive order. TARP was a congressionally created structure with some fairly stringent guidelines in terms of how we were supposed to approach it. It shouldn’t be hard to do, though. It’s a pretty simple concept. Banks have repaid money; there’s $30 billion that we could take that has already been repaid — immediately apply that to a fund so that small banks are — community banks are able to provide their small business customers with greater lending.

And I do think that getting that as part of a jobs package is priority number one. And I know I’ve already talked to Harry about this — my assumption is, is that if you combine that with the tax credits that we’ve put in place for hiring, the provisions that we talked about to incentivize weatherization programs that can immediately start hiring people to retrofit homes and businesses and help reduce our energy costs — taking some of those immediate steps now I think will pay some big dividends down the road.

And the timing of it is perfect, because our job last year was to make sure the economy was growing. The economy is now growing. But what’s happening is businesses, either because they can’t find financing or because they’re still just dipping their toe in the water, have been hesitant to hire full-time workers. And for us to start giving them some serious incentives, giving them additional access to financing, could accelerate a process that otherwise could take a much longer time and, frankly, all those folks out there who are out of work right now, they just can’t afford to wait any longer — they need it now. All right?

SENATOR REID: We have time for one or two more questions, if the question is short –

THE PRESIDENT: And the answer is short. (Laughter.)

SENATOR REID: Otherwise we’ll only have one question. The Chairman of the Judiciary Committee, Pat Leahy.

SENATOR LEAHY: Mr. President, I want to thank you for coming here. I think this is — thank you for coming here. I was just whispering to Marcel these answers are so good and need to be heard.

You have a great sense of what the federal judiciary should be. I think back to President Clinton’s time, when the other side blocked 61 of his judges. You’ve had some superb judges. You’ve talked to both Republicans and Democrats, sent up some superb names. And Senator Reid still has to file a cloture. We have to spend a week of doing that, and then they pass by 100 to nothing or 90-10.

My thing is this — because of what they did last time, we end up with the greatest shortage and the most judicial crises I think in our history. Will you continue to work very hard to get up names as quickly as possible, so that we can do this, and help us get these judges through? I don’t want the same judicial crises to occur. You’ve had good nominees. Can you commit to work with us, both parties, and keep trying to get them through?

THE PRESIDENT: Well, this is going to be a priority. Look, it’s not just judges, unfortunately, Pat, it’s also all our federal appointees. We’ve got a huge backlog of folks who are unanimously viewed as well qualified, nobody has a specific objection to them, but end up having a hold on them because of some completely unrelated piece of business. That’s an example, Michael, of the kind of stuff that Americans just don’t understand.

On the judges front, we had a judge for the — coming out of Indiana, Judge Hamilton, who everybody said was outstanding — Evan Bayh, Democrat; Dick Lugar, Republican; all recommended. How long did it take us? Six months, six, seven months for somebody who was supported by the Democratic and Republican senator from that state. And you can multiply that across the board. So we have to start highlighting the fact that this is not how we should be doing business.

Now, in fairness — in fairness, when we were in the minority, there were some times where we blocked judges, we blocked appointees. I think it’s fair to say we were a little more selective in how we did it — “a lot more,” somebody said. (Laughter.)

So this is an example of where I’m going to reach out to Mitch McConnell; I know Harry has as well. And I’m just going to say, look, if the government is going to work for the American people, I can’t have the administrator for GSA, which runs every federal facility, all federal buildings all across the country — here we are, we’re trying to save billions of dollars, cut waste — Claire McCaskill has been all on top of how can we audit our spending — and we could save billions of dollars in ending old leases that don’t work or renegotiating them or consolidating buildings and efficiencies. But I don’t have a GSA administrator, even though I nominated somebody who was well qualified several months ago, and nobody can tell me that there’s anything particularly wrong with her. They’re blocking her because of some unrelated matter. I don’t know, you guys may know better than I do. And that is — that has to end. It has to end. (Applause.) And the American people want it to end.

Let’s have a fight about real stuff. Don’t hold this woman hostage. If you have an objection about my health care policies, then let’s debate the health care policies. But don’t suddenly end up having a GSA administrator who is stuck in limbo somewhere because you don’t like something else that we’re doing, because that doesn’t serve the American people. Then they don’t know what the argument is about. Then it’s just sort of a plague on both your houses because it looks like you guys are just fighting all the time. And we’ve got to put an end to that.

SENATOR REID: I missed somebody on my list. If you would just be patient with us, we’ll have two very short questions.

THE PRESIDENT: I will indulge, Harry.

SENATOR REID: The first question is going to come from the only person that’s a member of the United States Senate who has a spouse that’s won a Pulitzer Prize — Sherrod Brown from Ohio. (Laughter.)

SENATOR BROWN: Thank you for joining us. Thank you for your visit to Lorain County, Ohio, a week and a half ago; first presidential visit to that county of 300,000 since Harry Truman in 1948.

THE PRESIDENT: It was a great visit. We had a great time.

SENATOR BROWN: It was terrific. Ten miles from there, Oberlin College, one of the great private institutions of higher learning in this country — at Oberlin College, there was a building built there seven or eight years ago, fully powered by solar panels. It’s the only — it’s the largest building on any college campus in America like that. Those solar panels were bought in Germany and Japan, not surprisingly — Germany, a country that has both an energy policy and a manufacturing policy. Seventy-five miles west of there is Toledo, Ohio, where you’ve been several times, and Toledo has more solar energy manufacturing — solar manufacturing jobs than any city in America.

It begs the question of two things in terms of manufacturing policy and energy policy. We have all kinds of things in so many of our states — manufacturing wind turbine components and solar panel components — but we’re the only major industrial country in the world without a manufacturing policy. And every rich country in the world has one. We don’t.

I know what you’re doing with Ron Bloom in the White House and other things, but how do we get there? How do we — when we read these articles in the paper that China is just exploding in terms of wind turbine manufacturing and solar panel manufacturing — how do we rebuild our manufacturing sector with a manufacturing policy, combined with an energy policy that gets us there?

THE PRESIDENT: I hope people had a chance to read that article that was in The New York Times I guess last Sunday, talking about how China is not waiting, it is moving. And already the anticipation is, is that they will lap us when it comes to clean energy.

Now, they’re not a democracy and so they don’t debate. (Laughter.) And there are no filibuster rules. And so obviously over the long term a system that allows for robust debate and exchange of ideas is going to produce a better result. I believe that. But we have to understand that when it comes to some key issues like energy, we are at risk of falling behind.

We’ve already fallen behind, but it’s not irrevocable because we still have the best research, we still have potentially the best technology, we’ve got the best universities, the best scientists, and as I said, we’ve got the most productive workers in the world. But we’ve got to bring all those things together into a coherent whole.

Now, I think there are a couple of elements to this. One, in terms of manufacturing generally — you just mentioned Ron Bloom, who we put in charge of a manufacturing task force, is just issuing now a report to me about the direction we need to go to have some coordination when it comes to manufacturing.

Now, this is not some big bureaucratic top-down industrial policy; it is figuring out how do we coordinate businesses, universities, government, to start looking at where are our strategic opportunities, and then making those investments, filling holes that exist so that we can be competitive with what China is doing or what Germany is doing or what Spain is doing.

And my hope is, is that during the course of this year we’re going to be able to work with all 50 senators, because all of you have a stake in this, to just see where are our manufacturing opportunities and where can we fill — plug some holes in order to make sure that we’re competitive internationally.

Specifically on clean energy, we know that’s an opportunity. I continue to believe, and I’m not alone in this, that the country that figures out most rapidly new forms of energy and can commercialize new ideas is going to lead the 21st century economy. I think that is our growth model. (Applause.)

SENATOR REID: Final question –

THE PRESIDENT: But — hold on, just one last thing I want to say about this: In order for us to maximize it, part of it is the good work that Jeff has been doing in terms of just finding the right incentives. We’ve got to be open-minded about a whole range of technologies. We’ve got to look at clean coal technology. We’ve got to look at nuclear technology.

We’re going to be making some significant announcements this year. This is an example, Blanche, of where we can’t be stuck in the past in terms of how we see these things. We’re not going to be able to ramp up solar and wind to suddenly replace every other energy source anytime soon, and the economy still needs to grow. So we’ve got to look at how to make existing technologies and options better.

But — and this is just the point that I wanted to make because it came up in New Hampshire yesterday — we still — one of the best ways to be on the forefront in energy is to incentivize clean energy, and discourage the old sources or methods that aren’t going to work in the future.

And so the fact that Joe Lieberman is working with Lindsey Graham, John Kerry has been all over this — the three of them are coming together to try to find a workable, bipartisan structure so that we are incentivizing and rewarding the future — and understanding that there’s a transition, so that we’ve got to make sure that the disruptions are minimized as we move into this new energy future — that’s going to be vital.

So don’t give up on that. I don’t want us to just say the easy way out is for us to just give a bunch of tax credits to clean energy companies. The market works best when it responds to price. And if they start seeing that, you know what, dirty energy is a little pricier, clean energy is a little cheaper, they will innovate, and they will think things through in all kinds of innovative ways.

So I want to congratulate specifically John Kerry, Joe Lieberman, and Lindsey Graham, who it probably doesn’t help him for me to compliment him — (laughter) — but has been very thoughtful in terms of how they’re approaching this issue.

SENATOR REID: Final question, Evan Bayh, Indiana.

SENATOR BAYH: Thank you for being with us, Mr. President.

THE PRESIDENT: We can get you a mic. Nice sneakers, by the way, Evan. (Laughter.)

SENATOR BAYH: Oh, thank you. You’ve got to stay light on your feet around here, right? (Laughter.) Mr. President, you’ve already addressed this in part, and several of the other questioners have raised this, but I’d like to present it in a little bit different way that I think is on the minds of people in my state, and perhaps in the minds of independents and moderate Republicans and conservative Democrats around the country — and that’s this issue of the deficit and rising debt, and restoring the fiscal health of this country to a position where it ought to be.

Frankly, I think the public and average citizen have been way ahead of the political class on this. They understand in the long run this is unsustainable, it’s bad economics. They understand that generally — generationally, as Michael was mentioning, it’s unfair to our children to ask them to pay these bills. And most of all, there’s a sense of unfairness. They’re having to make sacrifices in their daily lives, but too many in Washington expect to have continuing increases in the programs they care about; ordinary citizens are making sacrifices, and yet we want our earmarks or pet projects. And they ask, why can’t Washington make the same sacrifices that we’re willing to make?

Now, I think they realize that the other party doesn’t have much credibility on this subject. They handed you a — what, a $1.3 trillion deficit. Vice President Cheney famously said that in his opinion deficits didn’t matter. He just flat out said it. That’s wrong. It’s bad economics. It’s wrong. And so we’ve got a job to do. But I think many people across the country candidly look at us and say, I don’t know if the Democrats are willing to take this on. They think we want to tax too much and spend too much, and do we have the backbone to really stand up and make some of these hard decisions?

Now, to your credit, you’ve called for some things that aren’t always popular in our party. The first thing I noticed when you put into effect that non-security discretionary spending freeze is you got kicked in the shins by some of the left-wing blogs. And you called for more restraint on earmarks. That’s not always popular among our group, but to your credit, you’ve called for those things.

So my question to you, Mr. President, is speaking to independents, conservative Democrats, moderate Republicans — people who know we have to do this — why should the Democratic Party be trusted? And are we willing to make some of the tough decisions to actually head this country in a better direction?

THE PRESIDENT: Well, I’ll tell you why the Democratic Party should be trusted — because the last time this budget was balanced, it was under a Democratic President who made some very tough decisions. (Applause.)

I think this is pretty straightforward. Bill Clinton made some very hard political decisions. Some of you were there in Congress. You know how tough those votes were. You got no help from the other side. But as a consequence, the economy took off and you had a $200 billion surplus at the end of his presidency. So I think he deserves enormous credit for that. Those of you who took those votes deserve enormous credit for that. That’s why we’ve had — we should have credibility.

But we’re still haunted by the debates that took place from the ’70s, the ’60s, right? And that hasn’t completely worked through the political mindset. So we’re still saddled with this notion of the tax-and-spend model when, if you actually look at it, we’ve been very fiscally responsible.

Now, having said that, we have been complicit in some ways over the last decade. The prescription drug bill — not paid for. Two wars — not paid for. Two tax cuts — not paid for. The emergence of a structural deficit that is only going to grow because we all know that the biggest drivers are Medicare and Medicaid, and as people get older, as the population gets older, and as new technologies come online, people are demanding new services for health care, those are going to become more and more expensive, and that’s what’s going to blow up the budget in the long term.

So to answer your question, how do we — having said that, there’s no doubt that we’ve lost trust. And part of it was just bad timing. It’s like the cartoon, right, you’re sort of standing there and somebody hands you a ticking time bomb and it explodes, and you’ve got all this gunpowder on your hands, and you didn’t construct the bomb, but you’re holding it.

And so what happened last year was, we come in. You got a $1.3 trillion deficit that we’re inheriting; you’ve got $3 trillion revenue that are lost because of the recession; you’ve got an $8 trillion projected debt over the next 10 years; and you’ve got trillions more in projected deficits when you start looking — counting entitlements. Everybody has been looking at Kent Conrad’s charts here for the last several years about it. And so at that very moment, suddenly the headlines that people are seeing is, “bank bailout, recovery package,” and it all kind of merges together into just this blob of spending, and people aren’t seeing, how is this benefiting me. It just looks like Washington business as usual. And all that suspicion gets amplified. So it’s completely understandable.

I think the way that we regain trust is to pursue good policies but not be afraid also to explain these policies, and to be honest with the American people that we’re not going to dig ourselves out of this hole overnight.

So a couple of things I’ve done. I have encouraged that we go back to PAYGO, pay-as-you-go. People understand that concept: You pay as you go. I congratulate the Senate on voting for it. I expect the House to get it done. I want to sign that.

SENATOR REID: Not a single Republican.

THE PRESIDENT: The second thing you already mentioned is this non-defense discretionary freeze. One thing I want to mention, though. It’s not as if we’re not going after defense, as well. It’s just it would be irresponsible when we have two wars for me to impose that same kind of limitation, tie my hands not knowing what contingencies may be needed. But if you look at what Bob Gates has been doing in the Defense Department in really going after some sacred cows over at the Pentagon, he’s been serious about it. We’ve already saved billions of dollars. We intend to keep saving billions of dollars more on that front, as well.

We’ve already proposed $20 billion worth of savings for this year by eliminating and consolidating programs. Last year we proposed $17 billion and we were pooh-poohed. Some of the editorials were all, “Uh-huh, 17, this is a pittance.” You know, only in Washington is $17 billion a pittance. But it also indicates one of the dangers that we have, is that you’ve got to chip away at this problem. So every dollar counts. The work that Claire has done on auditing — if we can squeeze out $5 million here, $10 million here, make this program work a little bit better, over time it creates good habits, and it starts exercising the fiscal restraint muscles in ways that won’t affect programming for people but will affect our bottom line. So we’re moving aggressively. We hope this year we get that stuff done.

But what we also have to understand is that if I take all the steps that I’ve put forward and Congress follows my lead on the non-defense discretionary spending, we’re prudent in terms of defense spending, and we do all the things that we’ve talked about, we’ve still got this structural deficit that we’ve inherited.

Essentially what my proposal does is to pay for the Recovery Act and the other extraordinary steps we had to take for last year, so that I will have covered what happened on my watch. That’s important to understand. Whatever spending that I had to take that was extraordinary that you took with me, including the Recovery Act, if we follow my budget outline, we will have taken care of, paid for what happened on our watch.

But what we will not have solved is that huge structural deficit that existed the day I walked in. And we’ve got to be able to tell the truth to the American people that that is hard to solve. And the reason it’s hard to solve is most of it is coming from entitlements that people like. And it has to do with the fact that there’s this huge gap between the amount of money being paid out and the amount of money coming in.

And everybody understands this here, but I think that there’s a misperception in the public. If you ask your average constituent where does federal dollars go, they’ll tell you foreign aid. And you say, well, foreign aid accounts for 1 percent of our budget. And then they’ll say, well, earmarks.

Look, I think we have to discipline ourselves on earmarks just because symbolically I think people — it makes people feel like we’re not showing the same kind of discipline that they are. Even for worthy projects you’ve still got to make choices. So they’re absolutely right about that. But earmarks account for about 1 percent of the budget.

All right, so even if we eliminated all foreign aid and all earmarks, it doesn’t solve our problem. And as far as the arguments that our colleagues on the other side of the aisle are making, I think it’s important to explain to people that in order for us to balance the budget while exempting entitlements, no new revenues, you’d have to cut non-discretionary defense spending by 60 percent — cut it by 60 percent. That’s everything — student loans, NASA, veterans programs — you name it, we’d have to cut by 60 percent — six, zero.

That’s just not going to happen. That’s why we called for the commission, because we’ve got to look at some tough, long-term policy objectives. And that’s why we’ve got to — and I will personally do this, I will say to my Republican friends, I want to solve it. I don’t want to play politics on it, but you’ve got to step up, you’ve got to fill these slots with this commission that we’re going to set up, put these people in a room, and actually solve some of these problems. And I hope they do.

And maybe I’m naive. I’m still counting, Evan, on the notion that good policy over the long term is good politics. If you do the right thing, and you explain it clearly and you do it openly, I’m confident that the American people — you can have an adult conversation and say, this is not going to be easy, this is not going to be painless, we’re going to be struggling for a while, but our future is bright. And if we show the same grit and determination that previous generations have shown, I have every confidence that we are going to have a 21st century, the American century, just like the 20th.

All right? Thank you, everybody. God bless you. (Applause.)

END 11:25 A.M. EST

This is the complete text of President Obama’s State of the Union delivered on Jan. 27, 2010 and transcribed by the White House.

Madam Speaker, Vice President Biden, members of Congress, distinguished guests, and fellow Americans:

Our Constitution declares that from time to time, the President shall give to Congress information about the state of our union. For 220 years, our leaders have fulfilled this duty. They’ve done so during periods of prosperity and tranquility. And they’ve done so in the midst of war and depression; at moments of great strife and great struggle.

It’s tempting to look back on these moments and assume that our progress was inevitable — that America was always destined to succeed. But when the Union was turned back at Bull Run, and the Allies first landed at Omaha Beach, victory was very much in doubt. When the market crashed on Black Tuesday, and civil rights marchers were beaten on Bloody Sunday, the future was anything but certain. These were the times that tested the courage of our convictions, and the strength of our union. And despite all our divisions and disagreements, our hesitations and our fears, America prevailed because we chose to move forward as one nation, as one people.

Again, we are tested. And again, we must answer history’s call.

One year ago, I took office amid two wars, an economy rocked by a severe recession, a financial system on the verge of collapse, and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted — immediately and aggressively. And one year later, the worst of the storm has passed.

But the devastation remains. One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. And for those who’d already known poverty, life has become that much harder.

This recession has also compounded the burdens that America’s families have been dealing with for decades — the burden of working harder and longer for less; of being unable to save enough to retire or help kids with college.

So I know the anxieties that are out there right now. They’re not new. These struggles are the reason I ran for President. These struggles are what I’ve witnessed for years in places like Elkhart, Indiana; Galesburg, Illinois. I hear about them in the letters that I read each night. The toughest to read are those written by children — asking why they have to move from their home, asking when their mom or dad will be able to go back to work.

For these Americans and so many others, change has not come fast enough. Some are frustrated; some are angry. They don’t understand why it seems like bad behavior on Wall Street is rewarded, but hard work on Main Street isn’t; or why Washington has been unable or unwilling to solve any of our problems. They’re tired of the partisanship and the shouting and the pettiness. They know we can’t afford it. Not now.

So we face big and difficult challenges. And what the American people hope — what they deserve — is for all of us, Democrats and Republicans, to work through our differences; to overcome the numbing weight of our politics. For while the people who sent us here have different backgrounds, different stories, different beliefs, the anxieties they face are the same. The aspirations they hold are shared: a job that pays the bills; a chance to get ahead; most of all, the ability to give their children a better life.

You know what else they share? They share a stubborn resilience in the face of adversity. After one of the most difficult years in our history, they remain busy building cars and teaching kids, starting businesses and going back to school. They’re coaching Little League and helping their neighbors. One woman wrote to me and said, “We are strained but hopeful, struggling but encouraged.”

It’s because of this spirit — this great decency and great strength — that I have never been more hopeful about America’s future than I am tonight. (Applause.) Despite our hardships, our union is strong. We do not give up. We do not quit. We do not allow fear or division to break our spirit. In this new decade, it’s time the American people get a government that matches their decency; that embodies their strength. (Applause.)
And tonight, tonight I’d like to talk about how together we can deliver on that promise.

It begins with our economy.

Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there’s one thing that has unified Democrats and Republicans, and everybody in between, it’s that we all hated the bank bailout. I hated it — (applause.) I hated it. You hated it. It was about as popular as a root canal. (Laughter.)

But when I ran for President, I promised I wouldn’t just do what was popular — I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.

So I supported the last administration’s efforts to create the financial rescue program. And when we took that program over, we made it more transparent and more accountable. And as a result, the markets are now stabilized, and we’ve recovered most of the money we spent on the banks. (Applause.) Most but not all.

To recover the rest, I’ve proposed a fee on the biggest banks. (Applause.) Now, I know Wall Street isn’t keen on this idea. But if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need. (Applause.)

Now, as we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.

That’s why we extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.

Now, let me repeat: We cut taxes. We cut taxes for 95 percent of working families. (Applause.) We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. (Applause.)

I thought I’d get some applause on that one. (Laughter and applause.)

As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime. (Applause.)

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. (Applause.) Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. (Applause.) And we’re on track to add another one and a half million jobs to this total by the end of the year.

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. (Applause.) That’s right — the Recovery Act, also known as the stimulus bill. (Applause.) Economists on the left and the right say this bill has helped save jobs and avert disaster. But you don’t have to take their word for it. Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act. Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created. Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn’t be laid off after all.

There are stories like this all across America. And after two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again.

But I realize that for every success story, there are other stories, of men and women who wake up with the anguish of not knowing where their next paycheck will come from; who send out resumes week after week and hear nothing in response. That is why jobs must be our number-one focus in 2010, and that’s why I’m calling for a new jobs bill tonight. (Applause.)

Now, the true engine of job creation in this country will always be America’s businesses. (Applause.) But government can create the conditions necessary for businesses to expand and hire more workers.

We should start where most new jobs do — in small businesses, companies that begin when — (applause) — companies that begin when an entrepreneur — when an entrepreneur takes a chance on a dream, or a worker decides it’s time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they’re ready to grow. But when you talk to small businessowners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they’re mostly lending to bigger companies. Financing remains difficult for small businessowners across the country, even those that are making a profit.

So tonight, I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. (Applause.) I’m also proposing a new small business tax credit
– one that will go to over one million small businesses who hire new workers or raise wages. (Applause.) While we’re at it, let’s also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment. (Applause.)

Next, we can put Americans to work today building the infrastructure of tomorrow. (Applause.) From the first railroads to the Interstate Highway System, our nation has always been built to compete. There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.

Tomorrow, I’ll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. (Applause.) There are projects like that all across this country that will create jobs and help move our nation’s goods, services, and information. (Applause.)

We should put more Americans to work building clean energy facilities — (applause) — and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. (Applause.) And to encourage these and other businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America. (Applause.)

Now, the House has passed a jobs bill that includes some of these steps. (Applause.) As the first order of business this year, I urge the Senate to do the same, and I know they will. (Applause.) They will. (Applause.) People are out of work. They’re hurting. They need our help. And I want a jobs bill on my desk without delay. (Applause.)

But the truth is, these steps won’t make up for the seven million jobs that we’ve lost over the last two years. The only way to move to full employment is to lay a new foundation for long-term economic growth, and finally address the problems that America’s families have confronted for years.

We can’t afford another so-called economic “expansion” like the one from the last decade — what some call the “lost decade” — where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation.

From the day I took office, I’ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious. I’ve been told that our political system is too gridlocked, and that we should just put things on hold for a while.

For those who make these claims, I have one simple question: How long should we wait? How long should America put its future on hold? (Applause.)

You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations — they’re not standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs. Well, I do not accept second place for the United States of America. (Applause.)

As hard as it may be, as uncomfortable and contentious as the debates may become, it’s time to get serious about fixing the problems that are hampering our growth.

Now, one place to start is serious financial reform. Look, I am not interested in punishing banks. I’m interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.

We need to make sure consumers and middle-class families have the information they need to make financial decisions. (Applause.) We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.

Now, the House has already passed financial reform with many of these changes. (Applause.) And the lobbyists are trying to kill it. But we cannot let them win this fight. (Applause.) And if the bill that ends up on my desk does not meet the test of real reform, I will send it back until we get it right. We’ve got to get it right. (Applause.)

Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history — (applause) — an investment that could lead to the world’s cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy. You can see the results of last year’s investments in clean energy — in the North Carolina company that will create 1,200 jobs nationwide helping to make advanced batteries; or in the California business that will put a thousand people to work making solar panels.

But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies. (Applause.) And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America. (Applause.)

I am grateful to the House for passing such a bill last year. (Applause.) And this year I’m eager to help advance the bipartisan effort in the Senate. (Applause.)

I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing — even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future — because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation. (Applause.)

Third, we need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. (Applause.) To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security. (Applause.)

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia. (Applause.)

Fourth, we need to invest in the skills and education of our people. (Applause.)

Now, this year, we’ve broken through the stalemate between left and right by launching a national competition to improve our schools. And the idea here is simple: Instead of rewarding failure, we only reward success. Instead of funding the status quo, we only invest in reform — reform that raises student achievement; inspires students to excel in math and science; and turns around failing schools that steal the future of too many young Americans, from rural communities to the inner city. In the 21st century, the best anti-poverty program around is a world-class education. (Applause.) And in this country, the success of our children cannot depend more on where they live than on their potential.

When we renew the Elementary and Secondary Education Act, we will work with Congress to expand these reforms to all 50 states. Still, in this economy, a high school diploma no longer guarantees a good job. That’s why I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. (Applause.)

To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans. (Applause.) Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. (Applause.) And let’s tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years — and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college. (Applause.)

And by the way, it’s time for colleges and universities to get serious about cutting their own costs — (applause) — because they, too, have a responsibility to help solve this problem.

Now, the price of college tuition is just one of the burdens facing the middle class. That’s why last year I asked Vice President Biden to chair a task force on middle-class families. That’s why we’re nearly doubling the child care tax credit, and making it easier to save for retirement by giving access to every worker a retirement account and expanding the tax credit for those who start a nest egg. That’s why we’re working to lift the value of a family’s single largest investment — their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments.

This year, we will step up refinancing so that homeowners can move into more affordable mortgages. (Applause.) And it is precisely to relieve the burden on middle-class families that we still need health insurance reform. (Applause.) Yes, we do. (Applause.)

Now, let’s clear a few things up. (Laughter.) I didn’t choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn’t take on health care because it was good politics. (Laughter.) I took on health care because of the stories I’ve heard from Americans with preexisting conditions whose lives depend on getting coverage; patients who’ve been denied coverage; families — even those with insurance — who are just one illness away from financial ruin.

After nearly a century of trying — Democratic administrations, Republican administrations — we are closer than ever to bringing more security to the lives of so many Americans. The approach we’ve taken would protect every American from the worst practices of the insurance industry. It would give small businesses and uninsured Americans a chance to choose an affordable health care plan in a competitive market. It would require every insurance plan to cover preventive care.

And by the way, I want to acknowledge our First Lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make kids healthier. (Applause.) Thank you. She gets embarrassed. (Laughter.)

Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office — the independent organization that both parties have cited as the official scorekeeper for Congress — our approach would bring down the deficit by as much as $1 trillion over the next two decades. (Applause.)

Still, this is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, the process left most Americans wondering, “What’s in it for me?”

But I also know this problem is not going away. By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans, and neither should the people in this chamber. (Applause.)

So, as temperatures cool, I want everyone to take another look at the plan we’ve proposed. There’s a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. (Applause.) Let me know. Let me know. (Applause.) I’m eager to see it.

Here’s what I ask Congress, though: Don’t walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people. (Applause.) Let’s get it done. Let’s get it done. (Applause.)

Now, even as health care reform would reduce our deficit, it’s not enough to dig us out of a massive fiscal hole in which we find ourselves. It’s a challenge that makes all others that much harder to solve, and one that’s been subject to a lot of political posturing. So let me start the discussion of government spending by setting the record straight.

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. (Applause.) By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. All this was before I walked in the door. (Laughter and applause.)

Now — just stating the facts. Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis. And our efforts to prevent a second depression have added another $1 trillion to our national debt. That, too, is a fact.

I’m absolutely convinced that was the right thing to do. But families across the country are tightening their belts and making tough decisions. The federal government should do the same. (Applause.) So tonight, I’m proposing specific steps to pay for the trillion dollars that it took to rescue the economy last year.

Starting in 2011, we are prepared to freeze government spending for three years. (Applause.) Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t. And if I have to enforce this discipline by veto, I will. (Applause.)

We will continue to go through the budget, line by line, page by page, to eliminate programs that we can’t afford and don’t work. We’ve already identified $20 billion in savings for next year. To help working families, we’ll extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can’t afford it. (Applause.)

Now, even after paying for what we spent on my watch, we’ll still face the massive deficit we had when I took office. More importantly, the cost of Medicare, Medicaid, and Social Security will continue to skyrocket. That’s why I’ve called for a bipartisan fiscal commission, modeled on a proposal by Republican Judd Gregg and Democrat Kent Conrad. (Applause.) This can’t be one of those Washington gimmicks that lets us pretend we solved a problem. The commission will have to provide a specific set of solutions by a certain deadline.

Now, yesterday, the Senate blocked a bill that would have created this commission. So I’ll issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans. (Applause.) And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law that was a big reason for why we had record surpluses in the 1990s. (Applause.)

Now, I know that some in my own party will argue that we can’t address the deficit or freeze government spending when so many are still hurting. And I agree — which is why this freeze won’t take effect until next year — (laughter) — when the economy is stronger. That’s how budgeting works. (Laughter and applause.) But understand — understand if we don’t take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery — all of which would have an even worse effect on our job growth and family incomes.

From some on the right, I expect we’ll hear a different argument — that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that’s what we did for eight years. (Applause.) That’s what helped us into this crisis. It’s what helped lead to these deficits. We can’t do it again.

Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the citizens who sent us here. Let’s try common sense. (Laughter.) A novel concept.

To do that, we have to recognize that we face more than a deficit of dollars right now. We face a deficit of trust — deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap we have to take action on both ends of Pennsylvania Avenue — to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve. (Applause.)

That’s what I came to Washington to do. That’s why — for the first time in history — my administration posts on our White House visitors online. That’s why we’ve excluded lobbyists from policymaking jobs, or seats on federal boards and commissions.

But we can’t stop there. It’s time to require lobbyists to disclose each contact they make on behalf of a client with my administration or with Congress. It’s time to put strict limits on the contributions that lobbyists give to candidates for federal office.

With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. (Applause.) I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. (Applause.) They should be decided by the American people. And I’d urge Democrats and Republicans to pass a bill that helps to correct some of these problems.

I’m also calling on Congress to continue down the path of earmark reform. Applause.) Democrats and Republicans. (Applause.) Democrats and Republicans. You’ve trimmed some of this spending, you’ve embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. (Applause.) Tonight, I’m calling on Congress to publish all earmark requests on a single Web site before there’s a vote, so that the American people can see how their money is being spent. (Applause.)

Of course, none of these reforms will even happen if we don’t also reform how we work with one another. Now, I’m not naïve. I never thought that the mere fact of my election would usher in peace and harmony — (laughter) — and some post-partisan era. I knew that both parties have fed divisions that are deeply entrenched. And on some issues, there are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, about our national priorities and our national security, they’ve been taking place for over 200 years. They’re the very essence of our democracy.

But what frustrates the American people is a Washington where every day is Election Day. We can’t wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about the other side — a belief that if you lose, I win. Neither party should delay or obstruct every single bill just because they can. The confirmation of — (applause) — I’m speaking to both parties now. The confirmation of well-qualified public servants shouldn’t be held hostage to the pet projects or grudges of a few individual senators. (Applause.)

Washington may think that saying anything about the other side, no matter how false, no matter how malicious, is just part of the game. But it’s precisely such politics that has stopped either party from helping the American people. Worse yet, it’s sowing further division among our citizens, further distrust in our government.

So, no, I will not give up on trying to change the tone of our politics. I know it’s an election year. And after last week, it’s clear that campaign fever has come even earlier than usual. But we still need to govern.

To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve problems, not run for the hills. (Applause.) And if the Republican leadership is going to insist that 60 votes in the Senate are required to do any business at all in this town — a supermajority — then the responsibility to govern is now yours as well. (Applause.) Just saying no to everything may be good short-term politics, but it’s not leadership. We were sent here to serve our citizens, not our ambitions. (Applause.) So let’s show the American people that we can do it together. (Applause.)

This week, I’ll be addressing a meeting of the House Republicans. I’d like to begin monthly meetings with both Democratic and Republican leadership. I know you can’t wait. (Laughter.)

Throughout our history, no issue has united this country more than our security. Sadly, some of the unity we felt after 9/11 has dissipated. We can argue all we want about who’s to blame for this, but I’m not interested in re-litigating the past. I know that all of us love this country. All of us are committed to its defense. So let’s put aside the schoolyard taunts about who’s tough. Let’s reject the false choice between protecting our people and upholding our values. Let’s leave behind the fear and division, and do what it takes to defend our nation and forge a more hopeful future — for America and for the world. (Applause.)

That’s the work we began last year. Since the day I took office, we’ve renewed our focus on the terrorists who threaten our nation. We’ve made substantial investments in our homeland security and disrupted plots that threatened to take American lives. We are filling unacceptable gaps revealed by the failed Christmas attack, with better airline security and swifter action on our intelligence. We’ve prohibited torture and strengthened partnerships from the Pacific to South Asia to the Arabian Peninsula. And in the last year, hundreds of al Qaeda’s fighters and affiliates, including many senior leaders, have been captured or killed — far more than in 2008.

And in Afghanistan, we’re increasing our troops and training Afghan security forces so they can begin to take the lead in July of 2011, and our troops can begin to come home. (Applause.) We will reward good governance, work to reduce corruption, and support the rights of all Afghans — men and women alike. (Applause.) We’re joined by allies and partners who have increased their own commitments, and who will come together tomorrow in London to reaffirm our common purpose. There will be difficult days ahead. But I am absolutely confident we will succeed.

As we take the fight to al Qaeda, we are responsibly leaving Iraq to its people. As a candidate, I promised that I would end this war, and that is what I am doing as President. We will have all of our combat troops out of Iraq by the end of this August. (Applause.) We will support the Iraqi government — we will support the Iraqi government as they hold elections, and we will continue to partner with the Iraqi people to promote regional peace and prosperity. But make no mistake: This war is ending, and all of our troops are coming home. (Applause.)

Tonight, all of our men and women in uniform — in Iraq, in Afghanistan, and around the world — they have to know that we — that they have our respect, our gratitude, our full support. And just as they must have the resources they need in war, we all have a responsibility to support them when they come home. (Applause.) That’s why we made the largest increase in investments for veterans in decades — last year. (Applause.) That’s why we’re building a 21st century VA. And that’s why Michelle has joined with Jill Biden to forge a national commitment to support military families. (Applause.)

Now, even as we prosecute two wars, we’re also confronting perhaps the greatest danger to the American people — the threat of nuclear weapons. I’ve embraced the vision of John F. Kennedy and Ronald Reagan through a strategy that reverses the spread of these weapons and seeks a world without them. To reduce our stockpiles and launchers, while ensuring our deterrent, the United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly two decades. (Applause.) And at April’s Nuclear Security Summit, we will bring 44 nations together here in Washington, D.C. behind a clear goal: securing all vulnerable nuclear materials around the world in four years, so that they never fall into the hands of terrorists. (Applause.)

Now, these diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of nuclear weapons. That’s why North Korea now faces increased isolation, and stronger sanctions — sanctions that are being vigorously enforced. That’s why the international community is more united, and the Islamic Republic of Iran is more isolated. And as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences. That is a promise. (Applause.)

That’s the leadership that we are providing — engagement that advances the common security and prosperity of all people. We’re working through the G20 to sustain a lasting global recovery. We’re working with Muslim communities around the world to promote science and education and innovation. We have gone from a bystander to a leader in the fight against climate change. We’re helping developing countries to feed themselves, and continuing the fight against HIV/AIDS. And we are launching a new initiative that will give us the capacity to respond faster and more effectively to bioterrorism or an infectious disease — a plan that will counter threats at home and strengthen public health abroad.

As we have for over 60 years, America takes these actions because our destiny is connected to those beyond our shores. But we also do it because it is right. That’s why, as we meet here tonight, over 10,000 Americans are working with many nations to help the people of Haiti recover and rebuild. (Applause.) That’s why we stand with the girl who yearns to go to school in Afghanistan; why we support the human rights of the women marching through the streets of Iran; why we advocate for the young man denied a job by corruption in Guinea. For America must always stand on the side of freedom and human dignity. (Applause.) Always. (Applause.)

Abroad, America’s greatest source of strength has always been our ideals. The same is true at home. We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we’re all created equal; that no matter who you are or what you look like, if you abide by the law you should be protected by it; if you adhere to our common values you should be treated no different than anyone else.

We must continually renew this promise. My administration has a Civil Rights Division that is once again prosecuting civil rights violations and employment discrimination. (Applause.) We finally strengthened our laws to protect against crimes driven by hate. (Applause.) This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are. (Applause.) It’s the right thing to do. (Applause.)

We’re going to crack down on violations of equal pay laws — so that women get equal pay for an equal day’s work. (Applause.) And we should continue the work of fixing our broken immigration system — to secure our borders and enforce our laws, and ensure that everyone who plays by the rules can contribute to our economy and enrich our nation. (Applause.)

In the end, it’s our ideals, our values that built America — values that allowed us to forge a nation made up of immigrants from every corner of the globe; values that drive our citizens still. Every day, Americans meet their responsibilities to their families and their employers. Time and again, they lend a hand to their neighbors and give back to their country. They take pride in their labor, and are generous in spirit. These aren’t Republican values or Democratic values that they’re living by; business values or labor values. They’re American values.

Unfortunately, too many of our citizens have lost faith that our biggest institutions — our corporations, our media, and, yes, our government — still reflect these same values. Each of these institutions are full of honorable men and women doing important work that helps our country prosper. But each time a CEO rewards himself for failure, or a banker puts the rest of us at risk for his own selfish gain, people’s doubts grow. Each time lobbyists game the system or politicians tear each other down instead of lifting this country up, we lose faith. The more that TV pundits reduce serious debates to silly arguments, big issues into sound bites, our citizens turn away.

No wonder there’s so much cynicism out there. No wonder there’s so much disappointment.

I campaigned on the promise of change — change we can believe in, the slogan went. And right now, I know there are many Americans who aren’t sure if they still believe we can change — or that I can deliver it.

But remember this — I never suggested that change would be easy, or that I could do it alone. Democracy in a nation of 300 million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That’s just how it is.

Those of us in public office can respond to this reality by playing it safe and avoid telling hard truths and pointing fingers. We can do what’s necessary to keep our poll numbers high, and get through the next election instead of doing what’s best for the next generation.

But I also know this: If people had made that decision 50 years ago, or 100 years ago, or 200 years ago, we wouldn’t be here tonight. The only reason we are here is because generations of Americans were unafraid to do what was hard; to do what was needed even when success was uncertain; to do what it took to keep the dream of this nation alive for their children and their grandchildren.

Our administration has had some political setbacks this year, and some of them were deserved. But I wake up every day knowing that they are nothing compared to the setbacks that families all across this country have faced this year. And what keeps me going — what keeps me fighting — is that despite all these setbacks, that spirit of determination and optimism, that fundamental decency that has always been at the core of the American people, that lives on.

It lives on in the struggling small business owner who wrote to me of his company, “None of us,” he said, “…are willing to consider, even slightly, that we might fail.”

It lives on in the woman who said that even though she and her neighbors have felt the pain of recession, “We are strong. We are resilient. We are American.”

It lives on in the 8-year-old boy in Louisiana, who just sent me his allowance and asked if I would give it to the people of Haiti.

And it lives on in all the Americans who’ve dropped everything to go someplace they’ve never been and pull people they’ve never known from the rubble, prompting chants of “U.S.A.! U.S.A.! U.S.A!” when another life was saved.

The spirit that has sustained this nation for more than two centuries lives on in you, its people. We have finished a difficult year. We have come through a difficult decade. But a new year has come. A new decade stretches before us. We don’t quit. I don’t quit. (Applause.) Let’s seize this moment — to start anew, to carry the dream forward, and to strengthen our union once more. (Applause.)

Thank you. God bless you. And God bless the United States of America. (Applause.)

It was November 1961 when Ted Kennedy first took his seat as the Senator from Massachusetts – he was 30 years old. At the same time, Barack Obama was just 14 months old. Throughout the turbulent 1960s, Kennedy and little Barack watched as Martin Luther King Jr, Malcolm X, John Kennedy and Robert Kennedy were assassinated. There was the passage of the Civil Rights Act of 1964 and another one in 1968. The Civil Rights Movement dramatically altered the two political parties and paved the way for Nixon’s so-called “southern strategy.” The war in Vietnam would eventually snatch the lives of 55,000 US soldiers, millions of Vietnamese and millions everywhere would wonder why. That was the sixties. Nixon then gave us the disgrace of Watergate in the seventies, and we decided to distract ourselves with disco for awhile. In 1979, Ronald Reagan was elected president – Kennedy had been a senator for 17 years and Obama had just graduated from high school. And now here we are, Kennedy is gone, his funeral is today, and Obama eulogized Edward Moore Kennedy in front of 1,500 mourners at Our Lady of Perpetual Help Basicila in Boston. As if electing the first African American president weren’t enough proof, there is no doubt that we are witnessing firsthand a generational transformation in this country which begs the question, where will the next generation take us?

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Books by Ted Kennedy on Amazon
Books about Ted Kennedy on Amazon