Transcript: President Barack Obama, Part 1

On Thursday, Nov. 4, 2010 - two days after midterm elections - "60 Minutes" correspondent Steve Kroft interviewed President Barack Obama in the Oval Office. Below is a transcript of that interview. The video of this interview is also available on this Web site.

STEVE KROFT: The mood of the country, the mood in general, the political mood's different than it was when we talked two years ago, right after the presidential election.

PRESIDENT OBAMA: Absolutely.

KROFT: And I think that you made some allusions during that interview that it was gonna be difficult. And it's always a challenge to kind of read the tea leaves of midterm elections, because there's lots of different things going on. But the Republicans have said that this was a referendum on you and the Democratic Party. Do you agree with that?

PRESIDENT OBAMA: I think, first and foremost, it was a referendum on the economy. And the party in power was held responsible for an economy that is still underperforming and where a lot of folks are still hurting. I mean, we've got 9.6 percent unemployment. We've got higher than that underemployment. A lot of folks who would like to be working full time can't work full time. Families are struggling paying the bills. People have seen their home values decline all across the country. In some cases, so that they're under water. Their house is worth less than the cost of their mortgage.

And so, people I think expect that we would have made more progress than we have on the economic front. And I think that was uppermost on people's minds.

I do think that what was also true was that there are a lot of folks in this country who voted for me, hoping that we were gonna be able to get Washington to work again. And what they've seen over the last two years is a lot of partisan bickering. A lot of the same chronic problems that we've seen in Washington over the last several decades now. And that frustrated them. And I think they rightly said, "Okay, President Obama, you said you were gonna do something about this. We haven't seen enough change in Washington." And so in both those instances, I think people rightly said, "You're the President, you committed and promised that we would see changes. We haven't seen as many changes as we'd like. And we're gonna hold you accountable for it."

Obama Interview Transcript, Part 1
Obama Interview Transcript, Part 2

PRESIDENT OBAMA: You know, I think that if you ask people individually, "Does it make sense that President Obama gave 95 percent of working families a tax cut? Does it make sense that we make sure children with preexisting conditions can still get health insurance? Do we need to rebuild our roads and our bridges and put people back to work so that we have a 21st Century infrastructure? Was it smart for us to take money that were going to banks in the forms of unwarranted subsidies and use that to increase student loans for millions of young people across the country?"

If you tick off that list, then people will say, "These are all good ideas." But I think that what happened over the course of two years was that we had to take a series of big, emergency steps quickly. And most of them in the first six months of my administration. Each of them had a big price tag. You got intervention in the banks. You've got the auto bailout. You've got a stimulus package. Each one with a lot of zeroes behind it. And people looked at that and they said, "Boy, this feels as if there's a huge expansion of government." And . . .

KROFT: Well, it was a huge expansion of government.

PRESIDENT OBAMA: What I didn't effectively, I think, drive home, because we were in such a rush to get this stuff done, is that we were taking these steps not because of some theory that we wanted to expand government. It was because we had an emergency situation and we wanted to make sure the economy didn't go off a cliff. The last thing I would have liked to do as an incoming President is figure out how to save GM and Chrysler from bankruptcy. That wasn't on my list of to-dos when I was running for office.

But necessity created circumstances in which I think the Republicans were able to paint my governing philosophy as a classic, traditional, big government liberal. And that's not something that the American people want. I mean, you know, particularly independents in this country. But I think most Democrats and Republicans, they want a government that works, but they want one that's lean. One that's not wasting money. One that is looking after their interests, but isn't engaged in a whole bunch of giveaways.

And I think the Republicans were successful in creating a picture of the Obama Administration as one that was contrary to those commonsense, Main Street values about the size of government. And so, it I think it is fair to say that, you know, the American people don't want to see some massive expansion of government. And I think the good thing is that having gotten through this emergency, I think what people will see over the next two years is probably a better reflection of the kinds of long term priorities that I want to set for the country.

KROFT: The Republicans say the voters sent you a very clear message on Tuesday. That they want a smaller, less costly, more accountable government. Is that the message that you received?

PRESIDENT OBAMA: I think that, first and foremost, they want jobs and economic growth in this country. They want to feel that the next generation is gonna be able to benefit from the American dream the way previous generations have. That our kids and our grandkids are gonna have a better life than ours, not one that's diminished. That's the most important thing that people are looking for.

I also do think that the American people are concerned that the debt and deficits that have been built up over decades -- and they got worse as a consequence of this economic recession -- are things that have to be fixed. And we've gotta fix them so that the next generation doesn't have to fix 'em.

And so, our goal has to be to try to bring the parties together and see if we can move forward on some areas that we know will encourage growth -- like education, investment in research and development, investment in science and technology. Make sure that government continues to do the things that people think are important. Social Security. Making sure there's a safety net. Making sure that Medicare is there for future generations. Making sure that we have a strong defense. Try to find those areas where we're engaging in a lot of waste and eliminate those.

But there's one last component to this, Steve. That that is, I think, people want to see Washington work. And what they mean by Washington working: It's transparent. It's accountable. That people aren't just playing political games all the time. That Democrats and Republicans aren't shouting across the abyss, but instead are trying to sit down and have a conversation and come up with practical solutions. And we have not seen enough of that over the last two years.

KROFT: Are you saying, then, that idea of smaller, less costly, more accountable government was not what you think the voters were saying?

PRESIDENT OBAMA: No, no, no. There is no doubt that folks are concerned about debt and deficits. And they want to make sure that government spending is not leaving a big tab for the next generation. I think that is absolutely a priority. And by the way, that's a concern that I had before I was even sworn in. And the fact is, I had a $1.3 trillion deficit waiting for me. We then had an emergency situation that required us to take a series of steps that added to that deficit in the short term.

But part of the reason, for example, that I thought it was so important for us to take on health care reform was the single, biggest expansion of government -- one that is inevitable if we don't make some serious changes -- is on the health care front. Medicare, the cost of Medicare, Medicaid and, you know medical care for veterans. Medical care in the Defense Department. Medical care across the board. That is the single thing that is gonna be driving the expansion of the federal government over the next several years. And so one of the things that we've said is -- we've got to start getting a better bang for our buck on that front. If we don't, it is gonna be very difficult for future generations to deal with it.

KROFT: It wasn't just the Republicans. I mean, you lost a lot of your base on Tuesday. You lost people who had helped elect you. A lot of the people that helped elect you two years ago voted for Republicans. Women, senior citizens, independents. Young people and African Americans did not turn out in large numbers. How do you explain that?

PRESIDENT OBAMA: Well, I as I said, I think that folks are frustrated with what they've seen over the last two years. I mean, you know, one of the challenges we had was that we'd lost four million jobs in the six months before I was sworn in. We lost 750,000 jobs the month I was sworn in. 600,000 the month after that. 600,000 the month after that. So, what you had was the economy continuing to get worse in the first several months of my Administration, before any of our economic policies had a chance to be put into place.

And we saw such a big hole develop, eight million jobs lost, that the actions that we took may have saved or created 3.5 million jobs, but that still leaves a huge hole. And that's what people are experiencing on a day to day basis. The hardest argument to make in politics is: things would have been a lot worse if we hadn't done all those taken all these steps. And particularly since these were really big steps. I mean, yeah, the Recovery Act was big. The, you know, intervention with the auto companies, even though it will end up costing tax payers much less than anybody thought at the time, was still big.

You know? The bank interventions. TARP, that we inherited from the previous administration. The banks -- we're gonna make sure that they pay that money back. And it won't have cost taxpayers as much as, say, the savings and loans crisis back in the '80s. It's still big.

So, people are looking and saying, "Well government intervened a lot, spent a lot of money, and yet, I still don't have a job or my neighbor still doesn't have a job or that home is still being foreclosed down the block." And our argument was, "Well, we had to take these steps to stabilize the economy and things would be a lot worse if we hadn't taken these steps." And people say, "Well, you know what? That's not particularly persuasive to us."

We want to get back to a time when, if folks are willing to work hard, are responsible you know, we're making sure that our kids are staying in school and doing the right thing and going to college -- that there are gonna be opportunities out there. And right now, people, I think, are concerned as to whether that future is gonna be as bright as it needs to be. And appropriately, I'm held accountable for that. You know? I'm President of the United States. We painted a picture of how we can move this country forward. And we're not there yet. And, you know, I paid the political cost for not getting us there.

KROFT: You said at your news conference that you've been doing a lot of reflecting. Are there things that you wish you could do over?

PRESIDENT OBAMA: Oh, I think . . . .

KROFT: Pull back?

PRESIDENT OBAMA: I think there are things every day that I think about doing better. I'll give you an example. You know, 'cause this is fairly concrete. When we first came in and we were organizing to get the Recovery Act done you know, we knew that we were gonna have to act fast through Congress and get a lot of stuff moving. And there were a bunch of unfinished budgets that were wrapped up in an omnibus bill coming from the previous Congress.

And it was full of earmarks. Now, I campaigned saying we should stop doing earmarks. You know, even though it's small as a part of our overall federal budget, you know, what people consider to be pork projects, no matter how worthy, make people feel that government's not accountable. And there should be a better way of doing it. But I had to make a decision, "Do I sign this omnibus bill to finish last year's business? And, you know, make sure that I can keep on working with Congress to get all these things done? Or do I veto that bill and have a big fight right away in the middle of an economic crisis?"

Well, I decided to sign the bill. Now, that's an example of where I was so concerned about getting things done that, you know, I lost track of part of the reason I got elected. Which was we were gonna change how business was done here. And, you know, each one of those decisions may be justifiable in isolation, but cumulatively I think what people started feeling was, "Gosh, this is sort of business-as-usual in Washington." And that's part of what I ran against.

And so, I reflect a lot about over the next two years, making sure that I remind myself, my job is not legislator in chief. It's not just a matter of how many bills I'm passing, no matter how worthy they are. Part of it's also setting a tone in Washington and for the rest of the country that says, "We're responsible. We're transparent. We're open. We're talking to each other. We're civil." You know?

In some cases, there may be worthy projects that we can't do right now, just because we haven't built the consensus for it. You know, that's an aspect of leadership that I didn't pay enough attention to in the first couple of years.

KROFT: You ran as somebody who was gonna come to Washington and change it. And in the end, as some of your predecessors, it ended up changing you.

PRESIDENT OBAMA: You know, I . . .

KROFT: To a certain extent.

PRESIDENT OBAMA: Yeah. I'm not I . . .

KROFT: You haven't given up?

PRESIDENT OBAMA: Exactly. I think it's fair to say it hasn't changed me in terms of my ideals. But I think that in terms of how I operated on a day to day basis, when you've got a series of choices to make, I think that there are times where we said: let's just get it done, instead of worrying about how we're getting it done. And I think that's a problem.

As I said before, in a crisis situation, in an emergency situation -- which is really what we were in the first six to nine months -- I think it's fair to say that, you know, we made the right decisions in making sure that we stabilize the economy. But in terms of setting the tone and how this town operates, we just didn't pay enough attention to some of the things that we had talked about. And, you know I'm paying a political price for that.

KROFT: Well, to a certain extent the Tea Party and some of the Republicans ran on the same message or much of the same message that you ran on two years ago. Which is, "We're gonna change Washington." And now, you are Washington.

PRESIDENT OBAMA: Well you know, that's one of the dangers of assuming power. And you know, when you're campaigning, I think you're liberated to say things without thinking about, "Okay, how am I gonna actually practically implement this."

KROFT: Do you think you were naïve?

PRESIDENT OBAMA: No, I don't think I was naïve. I just think that these things are hard to do. You know, this is a big country. And democracy is an inherently messy business. And Congress is an institution that has a whole lot of traditions, some of 'em that aren't, you know, all that healthy. And there are a lot of special interests who've got a lot of power. And a lot of lobbyists who are paid a lot of money to influence legislation.

And so, you know, it's a hard, long slog to push up against that. But I think you make a good point, Steve, which is that you now have a lot of Republicans who ran as outsiders, who are coming in. And my hope is that we may be in a position now where the two sides meet and agree on some things that need to be changed. I noticed that [Virginia Congressman] Eric Cantor, one of the leaders in the House, said, you know, we really need to put an end to earmarks.

There are some sincere Republicans in the Senate like Tom Coburn, Oklahoma, who is about as conservative as they come, but a real friend of mine and somebody who has always had the courage of his convictions and not, you know, bringing pork projects back to Oklahoma. And it may be that that's an example of where, on a bipartisan basis, we can work together to change practices in Washington that generate a lot of the distrust of government.

KROFT: You talked about soul searching. The example you gave me was the one about the earmarks. Is that the only thing you . . . .

PRESIDENT OBAMA: Oh, no, no, no. I mean, I think that's an example of the kinds of things that you're thinking about all the time. I was thinking about it at the time. And I continue to think about it. I mean, I think that one of the areas that a lot of folks have focused on, obviously, is the health care bill.

KROFT: Right.

PRESIDENT OBAMA: Because after we took a whole series of these emergency measures, to save the economy, the stimulus, the steps to shore up the banking system, the auto bailout. I think there were some that argued, "Well, you should just stop and let people digest all these changes. And so, you shouldn't take on something as big as health care." And I'll be honest with you, Steve, at the time, we knew that it probably wasn't great politics.

KROFT: You were told that by your aides.

PRESIDENT OBAMA: Absolutely. There's a reason why our health care system hasn't been reformed over the last several decades. Why every president talks about it and it never happens. Because it's hard. It's a huge, big complicated system. Even as unhappy as people are with the system, the majority of people have health insurance. And so, they're more worried about what they might lose than what they might gain from any reforms.

So, we understood that this was bad politics, but I'll tell you, I had spent the previous two years traveling around the country. And in every town hall meeting, in every conversation that I had with a group of voters, there was somebody who'd come in and say, "You know, my kid is sick. And I couldn't get insurance for 'em, because they got a preexisting condition. Or I had to mortgage my house to pay the premiums."

Or a small business came and said, "You know, I'd love to provide health insurance for my employees, but I just can't afford -- I can barely afford health insurance for myself." And then I started looking at the budget and it turned out that if we continued on the same trajectory in terms of Medicare costs going up, that there was no possibility of ever balancing this budget without massive tax hikes. Because the population's getting older. We use more and more medical services. And we were gonna have to control those costs.

So, ultimately, I had to make a decision: do I put all that aside, because it's gonna be bad politics? Or do I go ahead and try to do it because it will ultimately benefit the country? I made the decision to go ahead and do it. And it proved as costly politically as we expected. Probably actually a little more costly than we expected, politically.

KROFT: In what ways?

PRESIDENT OBAMA: Well, partly because I couldn't get the kind of cooperation from Republicans that I had hoped for. We thought that if we shaped a bill that wasn't that different from bills that had previously been introduced by Republicans -- including a Republican governor in Massachusetts who's now running for President -- that, you know, we would be able to find some common ground there. And we just couldn't.

And that was costly partly because it created the kind of partisanship and bickering that really turn people off. Partly because the economy was still on the mend. And the entire focus on health care for so many months meant that people thought we were distracted and weren't paying attention to, you know, the key thing that was on their minds. And partly because the process itself ended up reinforcing this feeling of insider deals. And, you know, individual members of Congress trying to carve things out for themselves.

It just gave people, you know, sort of an overall a message that business hadn't changed in Washington. So there is no doubt. And I think that a lot of this is the lens through which a lot of people view the health care debate. There's no doubt that it hurt us politically.

KROFT: Would you do it again the same way? Or would you try something else?

PRESIDENT OBAMA: You know I think what I would have done is to be more scrupulous about sticking to some of the commitments I had made in how to get it done. For example, I made a commitment that I was gonna make sure that the key negotiations around health care were on C-SPAN. And the truth of the matter is that, you know, you have five different committees over there that are working on it.

KROFT: You did it behind closed doors.

PRESIDENT OBAMA: Trying to coordinate an ongoing conversation on television was, you know, something that we ultimately said, you know, "This is just too cumbersome, we can't pull it off." But there's a price to that, because I think people then felt like, "Well, if you're having conversations with Members of Congress or these various interest groups and we don't know what's going on, you know, then it's easier for them to believe that maybe, you know, what's going on isn't so good for us." And that, I think really hurt us politically. And I'm not sure that we couldn't have gotten it done if we had taken more care on that end of it.

KROFT: You mentioned a couple of times the emergency that you faced when you came into office. And you've mentioned, continually, the unemployment problem. And the economy. This emergency, is it over?

PRESIDENT OBAMA: Not for the people who are out of work. I mean, we've still got a very high unemployment rate. I think that the way to think about it is the dangers of a second big recession are now much reduced. The danger of us tipping into a great depression, I think most economists would say, is not there on the horizon.

What is a danger is that we stay stuck in a new normal where unemployment rates stay high. People who have jobs see their incomes go up. Businesses make big profits. But they've learned to do more with less. And so they don't hire. And as a consequence, we keep on seeing growth that is just too slow to bring back the eight million jobs that were lost. That is a danger. So that's something that I've spent a lot of time thinking about.

And the second danger has to do with our long term competitiveness. You know, a lot of the commercials that were flying around during this campaign -- both Democrat and Republican -- focused on China. And some of them were probably a little bit over the top. But what they captured, I think, was people's sense, rightly, that countries like India and China and Brazil and Germany -- they are investing in infrastructure. They're investing in research and development. Their kids are now working harder on math and science. And they're producing more engineers and more Ph.D.'s.

And so, you know, the playing field now is a lot bigger and a lot more competitive than it used to be. And people rightly worry that if we don't make some fundamental fixes to the economy, that America may not be the preeminent economic power that it's been in the past.

Now, I have confidence that it will be. Because we still have the best universities. The best scientists. The most productive workers in the world. We've got the most entrepreneurial culture. And the strongest capital markets in the world. So, I'm still confident that America will see the 21st Century as the American century just as the 20th Century was. But that won't happen unless we make some big fundamental changes. And that's why even in the midst of crisis, we still spent time on things like education reform. Because if we don't deal with 'em now, we're gonna fall behind.

KROFT: You spent nearly a trillion dollars on the stimulus package. Short term interest rates are practically zero. And still the unemployment rate is 9.6 percent. What can you do to create jobs that hasn't already been done?

PRESIDENT OBAMA: Well, first of all, I think it's just important to understand that the recovery package, the stimulus package, was about $700 billion. Now, that's still a lot of money. But there are a lot of folks who call it a trillion dollar package, and it was actually about a third tax cuts, a third help to states, and then a third infrastructure investments around the country. But look, it was still the biggest stimulus package that we've ever seen.

KROFT: $700 billion put back into the economy.

PRESIDENT OBAMA: Put back into the economy. You're right that the Federal Reserve has driven down interest rates about as low as they can go. Some of this is going to be just a matter of the economy healing.

I had a conversation here in the Oval Office with Warren Buffett, who remains very optimistic about America's long term prospects. And he said, "Look, let's take the housing market, which is about as big of a drag on the economy as anything." He said, "We overbuilt for a lot of years. Now, we're underbuilding to soak up that inventory. Over the course of several years. More new families are gonna go out there and start buying homes. And slowly housing prices are gonna stabilize. And these foreclosures are gonna end and things are gonna pick up." So, some of it is just a matter of the economy recovering from a real trauma, a real body blow.

There are some things we can do to accelerate growth, though. You know I put forward a proposal that in 2011: any business that buys new equipment, opens up a new plant, that they can write off all those expenses right away. That costs us, in the short term in terms of these tax breaks. But the truth is that we would end up seeing that money go back to these companies in out years anyway. So net, it doesn't necessarily add to our deficit. But it's a good way to get people to invest quicker, sooner

KROFT: Frontloading.

PRESIDENT OBAMA: Frontloading it. Infrastructure. We still we've got a couple of trillion dollars worth of infrastructure improvements that need to be made around the country. And we are falling behind other countries. And we spend a much lower percentage of our GDP than China's doing or even Europe is doing. So, for us to figure out in a bipartisan way how to start rebuilding our roads. How to make sure we got the best airports in the world. How do we make sure that we've got a rail system that works in this country? I mean, all those things could put people back to work right now. Doing the work that America needs done.

KROFT: All of them?

PRESIDENT OBAMA: Well, I think that, you know, for us to come up with creative ways, again, to frontload investments now -- at a time when interest rates are real low, and people are desperate for work -- is actually a pretty good investment for America. I mean, one of the interesting things about the Recovery Act was most of the projects came in under budget, faster than expected, because there's just not a lot of work there.

I mean, there are construction crews all across the country that are dying for work. And companies that are willing to take a very small profit in order to get work done. And so for us to say now's the time for us to rebuild this country and equip ourselves for the 21st Century. That's something that could make a real difference. But --

KROFT: Look, the Republicans aren't interested in spending a trillion dollars on infrastructure right now. They don't want stimulus programs.

PRESIDENT OBAMA: Well, you know, again, historically, rebuilding our infrastructure is something that has garnered Democratic and Republican support. I want to have a conversation with them and see if that's still the case. What I just mentioned in terms of providing tax breaks for companies that are investing here in the United States. That's not a traditional liberal position. That's a traditional Republican position. That's a Chamber of Commerce position.

KROFT: It is a Chamber of Commerce position. Why haven't they been able to persuade the Republicans that it's a good idea?

PRESIDENT OBAMA: Well, you know my hope is that now that the election's over. That there's gonna be more openness to taking those kinds of steps. The fact is that in the six months leading up to the election, I think whatever proposals we put forward were not gonna get a serious hearing. Because it didn't serve short term political purposes.

One thing that I'm absolutely convinced of is the message the American people were not sending in this election was, "We want to continue two years of bickering. We want to re-litigate the past two years." I think what they want to do is start acting like adults. Come together responsibly. And let's move the country forward.

KROFT: You talked about jobs. Where are these jobs gonna come from? What kind of jobs? There are people out there that haven't worked in two years that are worried that they're never gonna be able to get a job.

PRESIDENT OBAMA: Well, first of all, let's take the example of infrastructure. One of the hardest hit sectors is the construction industry. Because there are a lot of folks, particularly men, who are skilled tradesman. Who have been laid off from manufacturing plants that had closed. Went into the construction industry and the housing industry. Now, that is collapsed. And these guys are sitting around with skills, eager to work. Don't have a chance to work.

It would be natural for them to go back to work in constructing roads, bridges, airports. That's an example of us being able to absorb a workforce that needs help, is highly skilled, and ready to go. You know, we know that in the health care sector, there's gonna need to be a lot of a growing workforce. Because the population's gettin' older. And they're gonna need more health care.

We still, in this country, have a shortage of nurses. Despite the fact that there's really high unemployment. Partly because it's hard to get a nursing degree. There aren't enough slots out there. Nursing professors are paid so badly that a lot of schools can't hold on to nurses. So, for us to go in and say, "Let's make sure that young people can get the training for jobs that we know exist, make sure that they can finance their educations, make sure that people who are looking for second careers can potentially get the training that they need, even while they're working part time."

Those are all gonna be critical. And that's part of the reason why over the last two years, we've made a huge investment in community colleges. We've made an investment in, you know, a student loan system that works better for people. Because you're right, some of these jobs aren't gonna be comin' back.

Now, the third category is in new industries. And we've put a lot of emphasis on clean energy as an example. We used to . . .

KROFT: And has it produced any jobs?

PRESIDENT OBAMA: Absolutely it's produced jobs. And I'll give you a specific example. In advanced batteries that go into electric cars. We used to have two percent of the market. We're now on pace, because of the investments that we made, to see us have as much as 40 percent of the market by 2015. So, in five years we went from two percent of the world mark potentially to 40 percent of the world market. And those jobs are in places like Michigan and Ohio that had been really hard hit by the exodus of manufacturing jobs.

You're seeing some of these jobs start coming back. So, it's gonna be a mix of things that brings job growth back to the country. The one thing that we can't do, though, is to dis-invest in things like education. Or clean energy. Because our thinking is that we just need to retrench. I mean, we've got to distinguish between things that are wastes of money -- that don't give us a big return. And so, in terms of how we run our government, we've got to identify wasteful spending. And programs that no longer work. But we've gotta keep on investing in those things that are gonna create a better future for the country.

Click here for part 2 of the transcript.