Interview With President Obama

Following is a transcript of an interview with President Obama conducted by Jackie Calmes and Michael D. Shear of The New York Times. The interview was conducted at Knox College in Galesburg, Ill., on July 24, 2013.

NYT:

So we’re here with you, already four years since the recession officially ended. And as your speech sort of laid out, you still have a situation where growth remains slow, income’s is unequal, and a lot of American -- unemployment high -- and a lot of Americans start to worry that this is the new normal. Your intentions aside like you stated them out there in the speech, why shouldn’t we expect that you’re going to leave behind an economy that’s fragile, continued income inequality, and a weakened middle class?

MR. OBAMA:

Well, obviously, what Congress does matters. As I said in the speech, the economy is far stronger now than it was four and a half years ago. Most economists believe that growth will actually pick up next quarter and the second half of the year. And the one thing that could really screw things up would be if you have a manufactured crisis and Republicans choose to play brinksmanship all over again. And I’m glad to see that there are folks in the Senate who I think have already indicated that that is not good policy. We can have debates about fiscal issues without precipitating a crisis. Certainly the idea that we wouldn’t pay our bills and plunge not just the United States but potentially the world into another financial crisis makes absolutely no sense. But what I also said out there is true that if we stand pat, if we don’t do anything, then growth will be slower than it should be. Unemployment will not go down as fast as it should. Income inequality will continue to rise. Wages, incomes, savings rates for middle-class families will continue to be relatively flat. And that’s not a future that we should accept. So the entire intention of the speech is to make sure that we are focused on the right thing. It doesn’t mean that I expect Republicans to agree with all my prescriptions, but it is to say that the central problem we face and the one that we faced now that the immediate crisis is over is how do we build a broad-based prosperity. And I want to make sure that all of us in Washington are investing as much time, as much energy, as much debate on how we grow the economy and grow the middle class as we’ve spent over the last two to three years arguing about how we reduce the deficits.

NYT:

But do you worry, Mr. President, that that description of that sort of standing pat, what happens if you stand pat and the sort of slower than expected -- do you worry that that could end up being your legacy simply because of the obstruction that -- and the gridlock that doesn’t seem to end?

MR. OBAMA:

Well, let’s separate it from me for a second, because I think if I’m arguing for entirely different policies and Congress ends up pursuing policies that I think don’t make sense and we get a bad result, it’s hard to argue that’d be my legacy. And so I’ll worry about my legacy later or I’ll let historians worry about my legacy. I do worry about what’s happening to ordinary families here is Galesburg and all across the country. When we know that rebuilding our infrastructure right now would put people back to work and it’s never been cheaper for us to do so, and this is all deferred maintenance that we’re going to have to do at some point anyway, I worry that we’re not moving faster to seize the moment. When we know that families are getting killed by college costs, for us not to take bold action -- which means that young people are graduating with massive debt, they can’t buy a home as soon as they want, they can’t start that business that they’ve got a great idea for -- that worries me. So as I suggested in the speech, what I want to make sure everybody in Washington is obsessed with is how are we growing the economy, how are we increasing middle-class incomes and middle-class wages, and increasing middle-class security. And if we’re not talking about that, then we’re talking about the wrong thing. And if our debates around the budget don’t have that in mind, then we’ve got the wrong focus.

NYT:

Well, you said it yourself in the speech that Washington has taken its eye off the ball. Do you have any -- are you culpable at all in that? Did you -- it’s six -- it’s July now, it’s almost August. Do you wish you were giving a speech like this earlier and done it more often?

MR. OBAMA:

If you look over the last six months, we right away delivered on the promise to make sure that our tax code was more reflective of our values; that middle-class families locked in relief that they needed; folks like me, at the very top, paid a little bit more. That, by the way, was a fundamental shift that was a decade in the making. That was a big argument. Immediately after that, obviously, we had the tragedy in Newtown and the need for a response. And my wish and hope had been that that was a quicker piece of business and that we had gone ahead and moved forward on that. Immigration reform actually squarely fits into what I’m discussing right now. As I indicated before, we know the economy will grow faster if we get immigration reform done. We know that Social Security will be shored up if we get immigration reform done. And the Senate’s done the right thing by passing a strong bipartisan bill. So what I will absolutely admit to is that I’ve been here – I’ve been in Washington long enough now to know that if once a week I’m not talking about jobs, the economy, and the middle class, then all manner of distraction fills the void.

NYT:

Is there any part of your agenda moving forward that you think you are willing to move to the backburner so that you can spend more time on the economy?

MR. OBAMA:

Well, immigration reform we’ve got to get done, and that right now is just a matter of the House Republicans recognizing that both the American people, businesses, labor, evangelicals -- there’s a broad consensus to go ahead and pass that bill, and if that bill was on the floor tomorrow it would pass. Beyond that, though, we’re working on a range of other issues -- from climate change to reforming government to reducing the backlog in the VA. So there’s a bunch of stuff we’re going to be doing. I will be spending my time over the next several weeks talking about the issues in more detail that I discussed today so that by the time Congress gets back in the fall, I want to make sure that the American people are paying attention and asking themselves, are we doing everything we can to boost middle-class incomes, ladders of opportunity, and middle-class security. And if we’re doing that, then ultimately I think that we won’t get everything done that I want to see done, but we will have shifted away from what I think has been a bad – a damaging framework in Washington, which is to constantly think about is there more we can do to cut the deficit without asking are we making the right cuts, the smart cuts that actually help people in their own lives and help us grow over the long term.

NYT:

Well, in contrast with the jobs plan that’s now what you’re reflecting today, it’s almost two years old now, and which would measurably add to employment the studies show.

MR. OBAMA: Right.

NYT:

But in contrast with that, the policies that have been in place since the start of your second term, fiscal policies --

MR. OBAMA: Right, because of the sequester.

NYT:

-- that you and Congress agreed to -- right -- and some of the laws -- the payroll tax cut, and the increase in upper-end taxes to some extent -- but all of those things are by any economist’s measure a drag on the economy. There’s not a day goes by I don’t get some analyst saying that -- and that the Fed is pursuing expansionary policies to offset that. How can you -- how are you going to -- what exactly can you do between now and the end of the year to overcome the Republicans’ opposition and change that, to end sequester?

MR. OBAMA:

Well, let me back up, Jackie. First of all, as the economy got stronger during the course of my presidency, I had always committed to a responsible reduction in the deficit. I think that was the smart thing to do, the right thing to do, and good for our growth. And if we’re growing faster, if businesses and the markets have more confidence, then ultimately that benefits middle-class families as well. So I make no apologies for putting forward budgets consistently that, as I had promised, would gradually reduce the deficit. Now, the sequester I did not want to be in place. When you say I agreed to it, what happened, as you will recall, in 2011 is, is that we had the prospect of either default or a willingness on the part of Republicans and Democrats to spend a year and a half trying to come up with a sensible way to reduce the deficit. The sequester was supposed to be something that was so damaging to the economy that both parties would want to avoid it. The fact that Republicans embraced the sequester as what they consider a win during the course of this year, despite all the damage that they said they wanted to avoid, for example, to our military, is different from me agreeing to the sequester. All right? So that’s point number one. Point number two, every economist will tell you that if we are being smart about growth and we’re thinking about jobs and we’re thinking about the middle class, but we’re also thinking about fiscal responsibility, then what we should be doing is making sure that the drop-off in government spending on vital things like education and infrastructure don’t go down too fast, and that rather we look at what the real problem is, which is long-term health care costs. Because of the Affordable Care Act and a lot of changes that are taking place out there among providers, we’re starting to see health care costs slow. That’s a positive. If we can build on that, then we can capture the same amount of savings that we’re capturing through the sequester and use those to make sure that we’re not cutting vital investments that I talked about today, and we can help middle-class families. Now, I think there are probably going to be 15 different ways for you guys to ask me the same question, which is, “But there’s Congress.” (Laughter.) More specifically, “There’s the House Republicans, and what are you going to do about that?”

NYT:

Who are still embracing sequestration and who are still willing to use the debt limit to go to the mat.

MR. OBAMA:

Well, this is what they say. On the other hand, we also have a number of very thoughtful and sensible Republicans over in the Senate who have said that we should not play brinksmanship, that we should come up with a long-term plan. I met with a couple of House Republicans over the last several weeks who would like to see that happen. They’re not the loudest voices in the room at the moment. And part of what I’d like to see over the next several weeks is, if we’re having a conversation that’s framed as how are we growing the economy, how are we strengthening the middle class, how are we putting people back to work, how are we making college more affordable, how are we bringing manufacturing back -- the answer to those questions I think force a different result than if we are constantly asking ourselves how can we cut the deficit more, faster, sooner.

NYT:

Have you yielded anything from your outreach to Republicans? And do you still have hope for a 10-year deal by the end of the year?

MR. OBAMA:

I think it’s still possible. There are certainly Republicans who are deeply concerned about the effects of sequester. It’s been interesting -- I’ve talked to a number of them who are from deeply red states, consider themselves very conservative, who say it doesn’t make sense for us to cut discretionary spending more; it doesn’t make sense for us to cut education further -- because they’re seeing the impacts in their districts. Certainly there are a bunch of Republicans who say for us to hollow out our military as steeply, drastically as we’re doing if sequester stays in place for next year makes no sense. So if the American people have confidence that there’s a path that will grow the economy faster, put more people back to work, that doesn’t involve massive new federal spending programs, but instead just make sure that we’re investing in the right things, and if we’re being attentive to debt and deficits over a 20, 30-year time horizon, then potentially some of those Republicans start giving voice to their concerns a little more loudly than they’re doing right now. But one of the challenges, as I said in the speech, is that there’s almost a kneejerk habit right now that if I’m for it, then they’ve got to be against it. And I think there are a lot of Republicans who are frustrated by that, because they want to be for something, not just against something. But they’ve got to work through that pattern that’s developed over the last couple of years.

NYT:

A couple of slightly different topics. On the economy, the Fed is obviously an important player. You’ve got a big decision ahead of yourself in terms of the chairman. What are you looking for in a chairman? And there were reports yesterday that you are very close to naming Larry Summers as the new Fed chairman. True?

MR. OBAMA:

I have not made a final decision. I’ve narrowed it down to some extraordinarily qualified candidates.

NYT:

Do you want to say who?

MR. OBAMA:

No. (Laughter.)

NYT:

I tried.

MR. OBAMA:

And what I’m looking for is somebody who understands the Fed has a dual mandate, that that’s not just lip service; that it is very important to keep inflation in check, to keep our dollar sound, and to ensure stability in the markets. But the idea is not just to promote those things in the abstract. The idea is to promote those things in service of the lives of ordinary Americans getting better. And when unemployment is still too high, and long-term unemployment is still too high, and there’s still weak demand in a lot of industries, I want a Fed chairman that can step back and look at that objectively and say, let’s make sure that we’re growing the economy, but let’s also keep an eye on inflation, and if it starts heating up, if the markets start frothing up, let’s make sure that we’re not creating new bubbles.

NYT:

And do you have a timeline in mind for announcing that?

MR. OBAMA:

I think you can anticipate that over the next several months, an announcement will be made. Ben Bernanke, by the way, has done a fine job as Fed chairman. And when you look at Ben Bernanke’s testimony, not just last week but over the last couple of years, what he’s consistently said is right now, our priority needs to be growing the economy faster and strengthening incomes for ordinary Americans. If we do that, our deficits come down because we’re bringing in more revenue. If we do that, it becomes easier for us to handle the long-term fiscal challenges. And one of the interesting things that we don’t talk about enough is the contrast between what’s happened in the United States and what’s happened in a lot of other developing countries, Europe in particular. It's pretty rare where we have the chance to look at two policy approaches and follow them over several years and see which one worked. And the fact is there are a lot of European countries who followed the prescription that the House Republicans are calling for right now, and not only have they lagged well below where we've gone in terms of growth, in many cases their debt and their deficits have actually gone up because their economy is still effectively in recession. And although we haven’t been growing as fast as we would like, we have consistently outperformed those countries that followed the recipe that the House Republicans are offering right now. Now, I’m more sympathetic to those European countries because they, in some cases, didn’t have a choice. They don’t have the dominant world currency. They don’t have people who want to invest in their countries the way folks around the world still want to invest in ours. But in some ways, we've got evidence here. This is not an abstract argument. We know what's needed to make our economy grow right now. And if we grow our economy, and middle-class families are doing better, and housing prices are stronger, and young people are starting families of their own and they’re jobs at good wages, that’s the thing that will bring deficits down the fastest.

NYT:

A couple other quick subjects that are economic-related. Keystone pipeline -- Republicans especially talk about that as a big job creator. You've said that you would approve it only if you could be assured it would not significantly exacerbate the problem of carbon in the atmosphere. Is there anything that Canada could do or the oil companies could do to offset that as a way of helping you to reach that decision?

MR. OBAMA:

Well, first of all, Michael, Republicans have said that this would be a big jobs generator. There is no evidence that that’s true. And my hope would be that any reporter who is looking at the facts would take the time to confirm that the most realistic estimates are this might create maybe 2,000 jobs during the construction of the pipeline -- which might take a year or two -- and then after that we’re talking about somewhere between 50 and 100 [chuckles] jobs in a economy of 150 million working people.

NYT:

Yet there are a number of unions who want you to approve this.

MR. OBAMA:

Well, look, they might like to see 2,000 jobs initially. But that is a blip relative to the need. So what we also know is, is that that oil is going to be piped down to the Gulf to be sold on the world oil markets, so it does not bring down gas prices here in the United States. In fact, it might actually cause some gas prices in the Midwest to go up where currently they can’t ship some of that oil to world markets. Now, having said that, there is a potential benefit for us integrating further with a reliable ally to the north our energy supplies. But I meant what I said; I'm going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.

NYT:

And if they did, could that offset the concerns about the pipeline itself?

MR. OBAMA:

We haven't seen specific ideas or plans. But all of that will go into the mix in terms of John Kerry’s decision or recommendation on this issue.

NYT:

And then -- I’ll let Jackie go -- but on the employer mandate, I don’t think you’ve been asked the question directly why you made the decision to delay it, and whether, given your criticism of President Bush over the years for potentially exceeding his executive authority, there’s been a lot of folks out there on the Republican side who claim that somehow you’ve exceeded your authority on this. Is there anything to that?

MR. OBAMA:

Well, this was a very practical decision that actually doesn’t go to the heart of us implementing the Affordable Care Act. The majority of employers in this country provide health insurance to their employees. And the number of employers who are potentially subject to the employer mandate is relatively small. The way the law was originally written, it did not take into account the fact that we don’t necessarily need to load up the vast majority of companies that are already doing the right thing with a bunch of additional paperwork; are there simpler ways for us to allow them to certify that they’re providing health insurance? And if they do that, then the purpose, the spirit of the law is met, and we can concentrate on the few bad actors who are unwilling to provide health insurance to their employees even though they can afford it, and they’re relatively large employers. And businesses came to us and said, listen, we were supportive of providing health insurance to employees, in fact, we provide health insurance to our employees; we understand you want to get at the bad actors here, but are there ways to provide us some administrative relief? And what we said was, given that that is not critical to standing up the marketplaces where people are going to actually be able to buy lower-cost, high-quality insurance and get the tax credits that make it affordable for them, we thought it made sense to give another year not only for companies to prepare, but also for us to work with Treasury and others to see if there are just ways we can make this a little bit simpler for companies who are already doing the right thing. This is the kind of routine modifications or tweaks to a large program that’s starting off that in normal times in a normal political atmosphere would draw a yawn from everybody. The fact that something like this generates a frenzy on Republicans is consistent with the fact that they've voted to repeal this thing 38 times without offering a alternative that is plausible. And from what I understand, based on recent reporting, they’ve just given up on offering an alternative. So essentially -- their central economic plan that they’re currently presenting involves making sure that 50 million Americans cannot get health insurance; that people with preexisting conditions are potentially locked out of the market; that the rebates that people have received from insurance companies are sent back; that young people who are right now on their parents’ plan because they’re 26 or under, that they suddenly don’t have health insurance. I do not understand the argument that that somehow grows the economy or strengthens the middle class. And during the course of implementation, are there going to be some glitches? Are there going to be some complaints from employers who are still trying to figure it out and may not know what subsidies are available to them? Absolutely. Are there some folks who may say, we're going to try to figure out ways not to provide health insurance to our employees? Yes. But that’s a small proportion of our overall economy, and the principle that everybody should be able to get health insurance is one that the vast majority of Americans agree with.

NYT:

People questioned your legal and constitutional authority to do that unilaterally -- to delay the employer mandate. Did you consult with your lawyer?

MR. OBAMA:

Jackie, if you heard me on stage today, what I said was that I will seize any opportunity I can find to work with Congress to strengthen the middle class, improve their prospects, improve their security --

NYT:

No, but specifically –

MR. OBAMA:

-- but where Congress is unwilling to act, I will take whatever administrative steps that I can in order to do right by the American people. And if Congress thinks that what I’ve done is inappropriate or wrong in some fashion, they’re free to make that case. But there’s not an action that I take that you don't have some folks in Congress who say that I'm usurping my authority. Some of those folks think I usurp my authority by having the gall to win the presidency. And I don't think that's a secret. But ultimately, I’m not concerned about their opinions -- very few of them, by the way, are lawyers, much less constitutional lawyers. I am concerned about the folks who I spoke to today who are working really hard, are trying to figure out how they can send their kids to college, are trying to make sure that they can save for their retirement. And if I can take steps on their behalf, then I’m going to do so. And I would hope that more and more of Congress will say, you know what, since that’s our primary focus, we’re willing to work with you to advance those ideals. But I’m not just going to sit back if the only message from some of these folks is no on everything, and sit around and twiddle my thumbs for the next 1,200 days.

NYT:

Polls this week have shown your health care law has lost support. What are you going to be doing to build support?

MR. OBAMA:

We’re going to implement it.

NYT:

Are you going to be getting out on the road?

MR. OBAMA:

Here is what will build support, given that we’ve been outspent four to one from the other side with all kinds of distortions about health care. Here is what we’re going to do to beat back that misinformation. On October 1st, people are going to be able to start signing up. And if right now they’re buying insurance on the individual market, they’re going to get on those computers or they’re going to make a phone call to one of these call centers and they’re going to find out that they can save 20 percent, 30 percent, or 50 percent on their premiums. And people who have not been able to get insurance before are going to be able to finally get insurance. And people who lose their jobs in the interim and find out that they’ve got a preexisting condition, it’s hard for them to get insurance or they can’t afford COBRA, they’re going to have a place to go. And over the course of six months to a year, as people sign up, and it works, and lo and behold, the people who already have health insurance are not being impacted at all other than the fact that their insurance is more secure and they are getting free preventive care, and all the nightmare scenarios and the train wrecks and the “sky is falling” predictions that come from the other side do not happen, then health care will become more popular. But until then, when we’re getting outspent four to one and people are just uncertain about what all this means for them, we’re going to continue to have some polls like that. And me just making more speeches explaining it in and of itself won’t do it. The test of this is going to be is it working. And if it works, it will be pretty darn popular.

NYT:

March on Washington coming up soon. Are you going to do anything to mark it? Are you planning on being a part of the 50th anniversary?

MR. OBAMA:

Absolutely. It’s obviously a historic, seminal event in the country. It’s part of my generation’s formative memory and it’s a good time for us to do some reflection. Obviously, after the Trayvon Martin case, a lot of people have been thinking about race, but I always remind people -- and, in fact, I have a copy of the original program in my office, framed -- that that was a march for jobs and justice; that there was a massive economic component to that. When you think about the coalition that brought about civil rights, it wasn’t just folks who believed in racial equality; it was people who believed in working folks having a fair shot. It was Walter Reuther and the UAW coming down here because they understood that if there are some workers who are not getting a fair deal then ultimately that’s going to undercut their ability to get a fair deal. And if there’s one thing that I wanted to try to emphasize today in this speech, it is that America has always worked better when everybody has a chance to succeed. I had a conversation a couple of weeks back with a guy named Robert Putnam, who I’ve known for a long time.

NYT:

He was my professor actually at Harvard.

MR. OBAMA:

Right. I actually knew Bob when I was a state senator and he had put together this seminar to just talk about some of the themes that he had written about in “Bowling Alone,” the weakening of the community fabric and the impact it’s having on people. And the work he’s doing right now has to do with this issue of inequality. And it applies to a city like Galesburg, where 30 years ago, anybody in this town who wanted to find a job, they could go get a job. They could go get it at the Maytag plant. They could go get it with the railroad. It might be hard work, it might be tough work, but they could buy a house with it. The kids here all went to the same school -- the banker’s kid and the guy working at the Maytag plant’s going to the same school. They've got the same social support. College is affordable for all of them. They don't have to take out $100,000 of debt to do it. And there was a sense of not upward mobility in the abstract; it was part and parcel of who we were as Americans. And that’s what’s been eroding over the last 20, 30 years, well before the financial crisis. Now, the financial crisis made things a lot worse. And so I had to spend the first four years in my presidency getting us back to ground level. We had to make sure the banking system wasn't collapsing. We had to make sure the auto industry didn't collapse. We had to make sure that we put people back to work short term and boosted demand until the markets got going and consumers got more confident and housing started to recover. And so here we are, having dealt with this massive crisis, but those trends -- that erosion of what a Galesburg or a [Port]* Clinton, Ohio, where Bob Putnam lived -- those trends have continued. And that’s what people sense. That's why people are anxious. That's why people are frustrated. That's what they talk to me about and that's what they write to me about: “I'm doing okay right now, but what I've seen over the last 20 years and what I learned profoundly during this crisis is that the ground under my feet just isn't as secure, and that the work I'm doing may not be rewarded.” And everything that I am proposing and everything I will be proposing over the next three years goes right at that issue. And if that’s not what Washington’s talking about, then we will be missing the boat. And racial tensions won’t get better; they may get worse, because people will feel as if they’ve got to compete with some other group to get scraps from a shrinking pot. If the economy is growing, everybody feels invested. Everybody feels as if we're rolling in the same direction. And so a lot of the other issues that we’re talking about -- whether it’s climate change or immigration, or how we manage our trade relations -- all those are eased if we’ve got our economic act together. But that’s not what we talk about. And it's true that Congress moves at such a glacial pace these days that sometimes if you start a bill like immigration and you're thinking this should be done by now, it seems to take a year of folks just sitting around spinning their wheels, that can be frustrating. But we should be able to attend to some of these other issues even as we’re staying focused on this central issue. That’s at least what I’m going to be doing.

NYT: Thank you, Mr. President.

MR. OBAMA:

Thanks, guys. Appreciate you.