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.