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  • THE PRESIDENT: Good morning, everybody. As you know, I just met with leaders of both

  • parties to discuss a way forward in light of the severe budget cuts that start to take

  • effect today. I told them these cuts will hurt our economy. They will cost us jobs.

  • And to set it right, both sides need to be willing to compromise.

  • The good news is the American people are strong and they're resilient. They fought hard to

  • recover from the worst economic crisis since the Great Depression, and we will get through

  • this as well. Even with these cuts in place, folks all across this country will work hard

  • to make sure that we keep the recovery going. But Washington sure isn't making it easy.

  • At a time when our businesses have finally begun to get some traction -- hiring new workers,

  • bringing jobs back to America -- we shouldn't be making a series of dumb, arbitrary cuts

  • to things that businesses depend on and workers depend on, like education, and research, and

  • infrastructure and defense. It's unnecessary. And at a time when too many Americans are

  • still looking for work, it's inexcusable.

  • Now, what's important to understand is that not everyone will feel the pain of these cuts

  • right away. The pain, though, will be real. Beginning this week, many middle-class families

  • will have their lives disrupted in significant ways. Businesses that work with the military,

  • like the Virginia shipbuilder that I visited on Tuesday, may have to lay folks off. Communities

  • near military bases will take a serious blow. Hundreds of thousands of Americans who serve

  • their country -- Border Patrol agents, FBI agents, civilians who work at the Pentagon

  • -- all will suffer significant pay cuts and furloughs.

  • All of this will cause a ripple effect throughout our economy. Layoffs and pay cuts means that

  • people have less money in their pockets, and that means that they have less money to spend

  • at local businesses. That means lower profits. That means fewer hires. The longer these cuts

  • remain in place, the greater the damage to our economy -- a slow grind that will intensify

  • with each passing day.

  • So economists are estimating that as a consequence of this sequester, that we could see growth

  • cut by over one-half of 1 percent. It will cost about 750,000 jobs at a time when we

  • should be growing jobs more quickly. So every time that we get a piece of economic news,

  • over the next month, next two months, next six months, as long as the sequester is in

  • place, we'll know that that economic news could have been better if Congress had not

  • failed to act.

  • And let's be clear. None of this is necessary. It's happening because of a choice that Republicans

  • in Congress have made. They've allowed these cuts to happen because they refuse to budge

  • on closing a single wasteful loophole to help reduce the deficit. As recently as yesterday,

  • they decided to protect special interest tax breaks for the well-off and well-connected,

  • and they think that that's apparently more important than protecting our military or

  • middle-class families from the pain of these cuts.

  • I do believe that we can and must replace these cuts with a more balanced approach that

  • asks something from everybody: Smart spending cuts; entitlement reform; tax reform that

  • makes the tax code more fair for families and businesses without raising tax rates -- all

  • so that we can responsibly lower the deficit without laying off workers, or forcing parents

  • to scramble for childcare, or slashing financial aid for college students.

  • I don't think that's too much to ask. I don't think that is partisan. It's the kind of approach

  • that I've proposed for two years. It's what I ran on last year. And the majority of the

  • American people agree with me in this approach, including, by the way, a majority of Republicans.

  • We just need Republicans in Congress to catch up with their own party and their country

  • on this. And if they did so, we could make a lot of progress.

  • I do know that there are Republicans in Congress who privately, at least, say that they would

  • rather close tax loopholes than let these cuts go through. I know that there are Democrats

  • who'd rather do smart entitlement reform than let these cuts go through. So there is a caucus

  • of common sense up on Capitol Hill. It's just -- it's a silent group right now, and we want

  • to make sure that their voices start getting heard.

  • In the coming days and in the coming weeks I'm going to keep on reaching out to them,

  • both individually and as groups of senators or members of the House, and say to them,

  • let's fix this -- not just for a month or two, but for years to come. Because the greatest

  • nation on Earth does not conduct its business in month-to-month increments, or by careening

  • from crisis to crisis. And America has got a lot more work to do.

  • In the meantime, we can't let political gridlock around the budget stand in the way of other

  • areas where we can make progress. I was pleased to see that the House passed the Violence

  • Against Women Act yesterday. That is a big win for not just women but for families and

  • for the American people. It's a law that's going to save lives and help more Americans

  • live free from fear. It's something that we've been pushing on for a long time. I was glad

  • to see that done. And it's an example of how we can still get some important bipartisan

  • legislation through this Congress even though there is still these fiscal arguments taking

  • place.

  • And I think there are other areas where we can make progress even with the sequester

  • unresolved. I will continue to push for those initiatives. I'm going to keep pushing for

  • high-quality preschool for every family that wants it. I'm going to keep pushing to make

  • sure that we raise the minimum wage so that it's one that families can live on. I'm going

  • to keep on pushing for immigration reform, and reform our voting system, and improvements

  • on our transportation sector. And I'm going to keep pushing for sensible gun reforms because

  • I still think they deserve a vote.

  • This is the agenda that the American people voted for. These are America's priorities.

  • They are too important to go unaddressed. And I'm going to keep pushing to make sure

  • that we see them through.

  • So with that, I'm going to take some questions. I'm going to start with Julie.

  • Q Thank you, Mr. President. How much responsibility do you feel like you bear for these cuts taking

  • effect? And is the only way to offset them at this point for Republicans to bend on revenue,

  • or do you see any alternatives?

  • THE PRESIDENT: Look, we've already cut $2.5 trillion in our deficit. Everybody says we

  • need to cut $4 trillion, which means we have to come up with another trillion and a half.

  • The vast majority of economists agree that the problem when it comes to deficits is not

  • discretionary spending. It's not that we're spending too much money on education. It's

  • not that we're spending too much money on job training, or that we're spending too much

  • money rebuilding our roads and our bridges. We're not.

  • The problem that we have is a long-term problem in terms of our health care costs and programs

  • like Medicare. And what I've said very specifically, very detailed is that I'm prepared to take

  • on the problem where it exists -- on entitlements -- and do some things that my own party really

  • doesn't like -- if it's part of a broader package of sensible deficit reduction. So

  • the deal that I've put forward over the last two years, the deal that I put forward as

  • recently as December is still on the table. I am prepared to do hard things and to push

  • my Democratic friends to do hard things.

  • But what I can't do is ask middle-class families, ask seniors, ask students to bear the entire

  • burden of deficit reduction when we know we've got a bunch of tax loopholes that are benefiting

  • the well-off and the well-connected, aren't contributing to growth, aren't contributing

  • to our economy. It's not fair. It's not right. The American people don't think it's fair

  • and don't think it's right.

  • So I recognize that Speaker Boehner has got challenges in his caucus. I recognize that

  • it's very hard for Republican leaders to be perceived as making concessions to me. Sometimes,

  • I reflect is there something else I could do to make these guys -- I'm not talking about

  • the leaders now, but maybe some of the House Republican caucus members -- not paint horns

  • on my head. And I genuinely believe that there's an opportunity for us to cooperate.

  • But what doesn't make sense -- and the only thing that we've seen from Republicans so

  • far in terms of proposals -- is to replace this set of arbitrary cuts with even worse

  • arbitrary cuts. That's not going to help the economy. That's not going to help growth.

  • That's not going to create jobs. And as a number of economists have noted, ironically,

  • it doesn't even reduce our deficit in the smartest way possible or the fastest way possible.

  • So in terms of going forward, my hope is that after some reflection -- as members of Congress

  • start hearing from constituents who are being negatively impacted, as we start seeing the

  • impact that the sequester is having -- that they step back and say, all right, is there

  • a way for us to move forward on a package of entitlement reforms, tax reform, not raising

  • tax rates, identifying programs that don't work, coming up with a plan that's comprehensive

  • and that makes sense. And it may take a couple of weeks. It may take a couple of months,

  • but I'm just going to keep on pushing on it. And my view is that, ultimately, common sense

  • prevails.

  • But what is true right now is that the Republicans have made a choice that maintaining an ironclad rule that we will

  • not accept an extra dime's worth of revenue makes it very difficult for us to get any

  • larger comprehensive deal. And that's a choice they're making. They're saying that it's more

  • important to preserve these tax loopholes than it is to prevent these arbitrary cuts.

  • And what's interesting is Speaker Boehner, just a couple months ago, identified these

  • tax loopholes and tax breaks and said we should close them and raise revenue. So it's not

  • as if it's not possible to do. They themselves have suggested that it's possible to do. And

  • if they believe that in fact these tax loopholes and these tax breaks for the well-off and

  • the well-connected aren't contributing to growth, aren't good for our economy, aren't

  • particularly fair and can raise revenue, well, why don't we get started? Why don't we do

  • that?

  • It may be that because of the politics within the Republican Party, they can't do it right

  • now. I understand that. My hope is, is that they can do it later.

  • And I just want to repeat, Julie, because I think it's very important to understand,

  • it's not as if Democrats aren't being asked to do anything, either, to compromise. There

  • are members of my party who violently disagree with the notion that we should do anything

  • on Medicare. And I'm willing to say to them, I disagree with you, because I want to preserve

  • Medicare for the long haul. And we're going to have some tough politics within my party

  • to get this done.

  • This is not a situation where I'm only asking for concessions from Republicans and asking

  • nothing from Democrats. I'm saying that everybody is going to have to do something. And the

  • one key to this whole thing is trying to make sure we keep in mind who we're here for. We

  • are not here for ourselves, we're not here for our parties, we're not here to advance

  • our electoral prospects. We're here for American families who have been getting battered pretty

  • good over the last four years, are just starting to see the economy improve; businesses are

  • just starting to see some confidence coming back. And this is not a win for anybody, this

  • is a loss for the American people.

  • And, again, if we step back and just remind ourselves what it is we're supposed to be

  • doing here, then hopefully common sense will out in the end.

  • Q It sounds like you're saying that this is a Republican problem and not one that you

  • bear any responsibility for.

  • THE PRESIDENT: Well, Julie, give me an example of what I might do.

  • Q I'm just trying to clarify your statement.

  • THE PRESIDENT: Well, no, but I'm trying to clarify the question. What I'm suggesting

  • is, I've put forward a plan that calls for serious spending cuts, serious entitlement

  • reforms, goes right at the problem that is at the heart of our long-term deficit problem.

  • I've offered negotiations around that kind of balanced approach. And so far, we've gotten

  • rebuffed because what Speaker Boehner and the Republicans have said is, we cannot do

  • any revenue, we can't do a dime's worth of revenue.

  • So what more do you think I should do? Okay, I just wanted to clarify. (Laughter.) Because

  • if people have a suggestion, I'm happy to -- this is a room full of smart folks.

  • All right -- Zach Goldfarb.

  • Q Mr. President, the next focal point seems to be the continuing resolution that's funding

  • the government at the end of the month, that expires at the end of the month. Would you

  • sign a CR that continues the sequester but continues to fund the government? And in a

  • related point, how do you truly reach the limits of your persuasive power? Is there

  • any other leverage you have to convince the Republicans, to convince folks that this isn't

  • the way to go?

  • THE PRESIDENT: Well, I'd like to think I've still got some persuasive power left. Let

  • me check. (Laughter.) Look, the issue is not my persuasive power. The American people agree

  • with my approach. They agree that we should have a balanced approach to deficit reduction.

  • The question is can the American people help persuade their members of Congress to do the

  • right thing, and I have a lot of confidence that over time, if the American people express

  • their displeasure about how something is working, that eventually Congress responds. Sometimes

  • there is a little gap between what the American people think and what Congress thinks. But

  • eventually Congress catches up.

  • With respect to the budget and keeping the government open -- I'll try for our viewing

  • audience to make sure that we're not talking in Washington gobbledygook. What's called

  • the continuing resolution, which is essentially just an extension of last year's budget into

  • this year's budget to make sure that basic government functions continue, I think it's

  • the right thing to do to make sure that we don't have a government shutdown. And that's

  • preventable.

  • We have a Budget Control Act, right? We agreed to a certain amount of money that was going

  • to be spent each year, and certain funding levels for our military, our education system,

  • and so forth. If we stick to that deal, then I will be supportive of us sticking to that

  • deal. It's a deal that I made.

  • The sequester are additional cuts on top of that. And by law, until Congress takes the

  • sequester away, we'd have to abide by those additional cuts. But there's no reason why

  • we should have another crisis by shutting the government down in addition to these arbitrary

  • spending cuts.

  • Q Just to make it 100 percent clear, you'd sign a budget that continues to fund the government

  • even at the lower levels of the sequester, even if you don't prefer to do that?

  • THE PRESIDENT: Zach, I'm not going to -- I never want to make myself 100 percent clear

  • with you guys. (Laughter.) But I think it's fair to say that I made a deal for a certain

  • budget, certain numbers. There's no reason why that deal needs to be reopened. It was

  • a deal that Speaker Boehner made as well, and all the leadership made. And if the bill

  • that arrives on my desk is reflective of the commitments that we've previously made, then

  • obviously I would sign it because I want to make sure that we keep on doing what we need

  • to do for the American people.

  • Jessica.

  • Q Mr. President, to your question, what could you do -- first of all, couldn't you just

  • have them down here and refuse to let them leave the room until you have a deal? (Laughter.)

  • THE PRESIDENT: I mean, Jessica, I am not a dictator. I'm the President. So, ultimately,

  • if Mitch McConnell or John Boehner say, we need to go to catch a plane, I can't have

  • Secret Service block the doorway, right? So --

  • Q But isn't that part of leadership? I'm sorry to interrupt, but isn't --

  • THE PRESIDENT: I understand. And I know that this has been some of the conventional wisdom

  • that's been floating around Washington that somehow, even though most people agree that

  • I'm being reasonable, that most people agree I'm presenting a fair deal, the fact that

  • they don't take it means that I should somehow do a Jedi mind-meld with these folks and convince

  • them to do what's right. Well, they're elected. We have a constitutional system of government.

  • The Speaker of the House and the leader of the Senate and all those folks have responsibilities.

  • What I can do is I can make the best possible case for why we need to do the right thing.

  • I can speak to the American people about the consequences of the decisions that Congress

  • is making or the lack of decision-making by Congress. But, ultimately, it's a choice they

  • make.

  • And this idea that somehow there's a secret formula or secret sauce to get Speaker Boehner

  • or Mitch McConnell to say, you know what, Mr. President, you're right, we should close

  • some tax loopholes for the well-off and well-connected in exchange for some serious entitlement reform

  • and spending cuts of programs we don't need. I think if there was a secret way to do that,

  • I would have tried it. I would have done it.

  • What I can do is I can make the best possible argument. And I can offer concessions, and

  • I can offer compromise. I can negotiate. I can make sure that my party is willing to