Transcript: President Barack Obama, Part 2

On Monday, Dec. 7, 2009, 60 Minutes correspondent Steve Kroft interviewed President Barack Obama in the Map Room of the White House. Below is a transcript of that interview. Video excerpts from that interview are also available on this Web site.

Transcript: President Obama, Part 1
Obama Versus the "Fat Cats"
Obama: Gatecrashers Lapse "Won't Happen Again"
Obama: Senate Will Pass Health Bill by Christmas
Web Extra: Afghanistan and Pakistan
Web Extra: What Pakistan Must Do
Web Extra: Why This War?
Web Extra: His Biggest Frustration
Web Extra: Unfinished Business
Web Extra: The Party Crashers

KROFT: How many jobs do you think this new program will provide?

PRESIDENT OBAMA: Well, you know, I'm not gonna get into the prognostication business here. Here's what I know. That when I walked in to office, we had gone through a debilitating financial crisis. The banking system was close to meltdown. And in that first quarter, we lost over 3 million jobs. In December, we lost 681,000 jobs. That's before I was sworn in. January, 700,000 jobs. That was just about as I was being sworn in. The following month, before we had put any of our programs in place, we had lost another 681,000 jobs, and it just kept on going. So, I had two immediate tasks. The first was to stem the financial panic, and to stabilize the financial markets.

And although some of the decisions we made we knew were gonna be politically unattractive, they were the right things to do. And the fact is, the financial markets are stabilized. And by the way, they will have stabilized at much less cost than anybody had anticipated.

KROFT: They've stabilized to the point where three Wall Street investment banks are about to pay out $30, $40, $50 billion in bonuses this year.

PRESIDENT OBAMA: Yeah, and I'm not happy about that, so we're gonna get back to that point. Let me let me just walk this through. So, what you have is a situation in which the financial markets stabilized, the stock market stabilizes, a lot of ordinary Americans out there start with recovering what they had lost in their 401Ks and their retirement accounts. And lending starts loosening up for basic things. Buying a car student loans. Larger companies are able to get loans, and keep their businesses going.

The second problem we had was that we've all these jobs that were shed. And everybody in a panic and pulling back, business is not wanting to invest, consumers not wanting to spend. And trillions on paper at least having been lost.

Now, what we had to do was he had to make sure that there was some buoy, some stabilizer in the economy so that it didn't go into a Great Depression. And that's why we passed the Recovery Act. And for all the criticism that it received from the other side --and we got no help from any Republicans, other than a couple, in passing it -- what we now know and every economist who's looked at it will acknowledge this, is that it helped us [stem] the panic and get the economy growing again. And it probably saved somewhere between a million and a million and a half jobs. But in addition to that, what it also did was it made sure that everybody had enough confidence that you did not see a complete collapse.

All right, so financial market stabilized, economy growing again. The problem we now face is that in any recession, job growth is what's called a lagging indicator. Businesses don't start hiring again until they have some confidence out there that there's actually a market for additional goods and services. That's always true in any recession.

Usually, it's worse when you have a big financial crisis like this that prompts the recession. And this one's been exceptionally bad, partly because businesses were very spooked, and it was a global crisis. But partly because, frankly, businesses have figured out that maybe they can sustain themselves just with fewer employees producing the the same amount of goods and services.

And what's also happening is that the small businesses, and some medium-sized businesses are still having trouble . . . 'cause the banks are still pulling back and being pretty cautious in terms of their lending practices. So, what we want to do is this: How can we accelerate what we think will be additional hiring that eventually has to happen anyway. Sooner or later, these businesses are gonna say, you know what, there's a market out there, we could be making more products. We can't just keep on trying to double the hours of the workers we have. So, there's gonna be some hiring taking place.

Can we accelerate that so that you start getting a virtuous cycle, more people being hired, people then going out and shopping more, increasing consumer demand, which means more business and more hiring. Are there ways to accelerate that, number one.

Number two, are there ways to loosen up additional lending for small businesses because they are the major job producers out there. And number three, are there some particular targeted areas that could be engines for growth in the future. One of those being clean energy and you know, the whole green industry that should be developing.

So, rather than see this as a second stimulus -- we can't afford that right now -- what I'm interested in is a targeted jobs package that can help to boost what's already taking place. Companies are already starting to hire again. We've got good jobs numbers for the first time essentially. At least they're not firing anymore. And some companies are starting to inch back into the hiring of workers.

Is there a way to boost their confidence, and I think there are. Number one, by making sure that we are loosening up lending for small businesses, and building on some of the successes that we've already had. Number two providing some targeted tax breaks for companies if they are making new hires now as opposed to waiting and sitting on the sidelines. Number three -- are there some extensions of programs that were way oversubscribed around alternative energy as well as weatherization programs, where that whole sector can really take off. And we think we can do that in a package that is manageable and is not gonna solve our entire unemployment problem, but will make some significant progress.

KROFT: It's my understanding that there's still about two-thirds of the stimulus money that is still sitting in Washington.

PRESIDENT OBAMA: No, no, no, it's not. It's not sitting in Washington. What it truly is is that some of it, a big chunk of it, has not hit the ground yet. And the reason some of this was by design.

When we put together the recovery package, it was basically a third, a third, a third. A third of it were tax breaks to individuals. Ninety-five percent of working Americans got a tax break. They may not know it. And maybe we haven't done a good enough job in advertising it, 'cause if you poll people, people still think somehow we raised taxes. We've actually lowered taxes on 95 percent of working Americans. That's money in their pocket that they could've spent.

We had a big set of stabilization programs, things like unemployment insurance, making COBRA the program that people can keep their health insurance if they lose their jobs, making that more generous so that more people could use it, providing tax breaks to businesses so that they would have the incentive to continue to invest.

So a third of it was stabilization. A third of it was just assistance to the states who are hemorrhaging. Their budgets were collapsing, and so we made sure that police and firefighters and teachers could still stay on the job. And the third was infrastructure.

Now the stabilization money both for the states and for individuals and for businesses, that goes up out quicker. The infrastructure money, though, that tends to go out a little bit slower. Even though it has a great bang for the buck, you know, people talk about shovel-ready projects, they're usually not really shovel-ready. I mean, the permitting takes place, you've got to hire people, et cetera. So, the good thing is that a lot of the infrastructure projects are now going to be going online of this year. And you're going to see more hiring in the construction industry as a consequence of the investments that we slated in the Recovery Act early last year.

KROFT: How much money of this new proposal is going to end up going to small businesses, do you know?

PRESIDENT OBAMA: Well, I think that we're still examining it. And Tim Geithner, the Treasury Secretary, I think has started to refine the numbers in terms of how much money is being repaid by the banks, what we actually think losses will be on loans and assistance that were given to the banks. And there's definitely gonna be more left over than anybody had anticipated. And then, the question is what can we do for small businesses in a realistic timeframe. And what should we devote to just drawing down the debt and making sure that taxpayers are paid back. Or at least the kitty is refilled. And we'll be making those determinations over the next several weeks.

What I don't want is TARP to become -- having spent all that money to help the banks, we didn't need it as much as we wanted, that it doesn't become some slush fund where we can just spend willy-nilly on whatever we want. Because we still have some significant deficit issues out there.

KROFT: Why not reuse it why not use it to reduce the deficit?

PRESIDENT OBAMA: Well, I think that a portion of it will be used. And that's why I say what I'm looking for are there some targeted things that we can do that will help really jumpstart job creation in an environment where we are now seeing some good economic growth. And what can't be used effectively for that narrow objective I think has to go back to reduce the deficit. 'Cause, you know, we're operating under a fiscal constraint.

Now, let me say more generally I did not run for office to be helping out a bunch of you know, fat cat bankers on Wall Street. Nothing has been more frustrating to me this year than having to salvage a financial system at great expense to taxpayers that was precipitated, that was caused in part by completely irresponsible actions on Wall Street. And I've spoken out repeatedly about this.

This is why A, we've got to have financial regulatory reform. And I want that in place next year to prevent this from ever happening again. That's why we've put in some constraints on any bank that was receiving assistance from taxpayers. Constraints on the kinds of bonuses they could pay out. The only ones that are gonna be paying out these fat bonuses are the ones that have now paid back that TARP money and aren't using taxpayer loans.

KROFT: Do you think that's why they paid it back specifically?

PRESIDENT OBAMA: I think in some cases that was a motivation. Which I think tells me that the people on Wall Street still don't get it. They don't get it. They're still puzzled, why is it that people are mad at the banks. Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it's gone through in decades, and you guys caused the problem. And we've got ten percent unemployment. Why do you think people might be a little frustrated.

But I think that there is a culture there that feels that you know, it's always making good decisions, and if it's not, then it's somebody else's fault. And that has to change. And the only way to change it, obviously, because so far at least, I haven't seen a lot of shame on their part, is to make sure that we've got a regulatory system in place that prevents them from putting us in this kind of pickle again.

KROFT: Do you think that they've made some of these bonuses based in part on the generosity and policies of the United States government to help put the financial system back on its feet?

PRESIDENT OBAMA: I think there is no doubt about it. Look, if we had not acted and not just, by the way, my administration. You know, the Bush administration started the TARP program. They got the $700 billion. We just implemented the second half of it. But I defend the Bush administration for having to make that decision. We were in freefall. And if we hadn't, we would've seen a lot more banks collapse, and lot more of these folks would've lost their shirts.

Now, I think part of what frustrates the American people is yeah, why don't we just let that happen. And that's an understandable impulse. And the problem is that unfortunately this is like the guy who has dynamite strapped around him and his finger on the button. You know, you gotta kind of talk him down because all of us could go.

If the banking system had collapsed completely, then we really would've been in a great depression. Unemployment might have been double what it is right now. It would've been so massively destructive that any satisfaction we would've gotten from seeing these guys lose their shirts would've been offset by a extraordinary amount of hardship around the country. That would've been irresponsible. That would've been a bad choice to make, even though politically, I promise you people probably would've cheered it on.

But now that the system is stable. I think it is very important for us to get a system in place that prevents us from being lassoed to folks who are making bad decisions and benefitting from it. And what's most frustrating me right now is you've got these same banks who benefitted from taxpayer assistance who are fighting tooth and nail with their lobbyists up on Wall Street or up on Capitol Hill fighting against financial regulatory reform.

KROFT: Why is taking so long?

PRESIDENT OBAMA: Well everything appears to take long in Congress. We can talk about health care if you want. This is democracy in action. But part of it is also the need to get it right. I mean, on the one hand, you've got to get financial regulatory reform, on the other hand, you've got to make sure that it's done properly. And I think we've got it just about right.

You've got a situation where, for the first time, we are having an agency whose sole function is to protect consumers by from financial shenanigans. Number two, we've got a situation which we're finally controlling things like the derivatives and some of these exotic financial instruments that helped to create this crisis on Wall Street. So, those are all gonna be tightly subject to oversight in a way they haven't been before. And number three we're setting up a system where regulators are actually looking at these big systemic, too-big-to-fail institutions, making sure that they don't get themselves in a position where we can't let them fail. And when they do fail, that we can unwind their assets in a way that doesn't endanger the entire economy. It's the right thing to do. And I expect it done early next year.

KROFT: You mentioned Congress and health care. You ran for office based on the fact that you were going to try and reform the system. That you wanted to change the status quo in Washington. Then you came in, and you turned over your top priority to the Congress.

PRESIDENT OBAMA: That's not true.

KROFT: You laid out what you wanted and you set the guidelines.

PRESIDENT OBAMA: Exactly.

KROFT: And then stood back and turned it over to 535 people who produced a 2,000-page bill that is --

PRESIDENT OBAMA: What?

KROFT: Well, I haven't read it so --

PRESIDENT OBAMA: Finish your thought, Steve.

KROFT: I can't really. I'd say some people think is incomprehensible. Not very many people have read it. I've not met anybody who's read it.

PRESIDENT OBAMA: Steve, let's be clear here. Seven presidents have tried to reform a health care system that everyone acknowledges is broken. Seven presidents have failed up until this point. We are now that close to having a bill that does all the things that I said and most experts said needed to be done when we started this process. Let me just tick 'em off for you. It is not only deficit neutral, but will actually bring down the deficit according to the Congressional Budget Office. This will be the most significant piece of deficit reduction since the budget balance the Balanced Budget Act that Bill Clinton passed back in the early '90s.

Number two, it brings down costs and premiums for American families and businesses. That's not my argument. That's what the Congressional Budget Office says. And every health economist that's looked at this says that it is embodying a lot of what are called game-changers that can start bending the cost curve on health care over the long term.

Number three, it has historic insurance reforms. So that insurance company abuses like not allowing people to get insurance if they got preexisting conditions, or charging exorbitant out-of-pocket expenses in the fine print of their policies, that those practices end. And that makes secure insurance a reality for a whole bunch of families out there who think they already have good insurance, but could be pleasantly surprised if they get sick.

And number four, it provides 30 million people who don't have health insurance health insurance by setting up an exchange that allows individuals and small businesses to pool their purchasing power and get a better deal, and provide subsidies for people who just can't afford it.

Now, that's what I wanted. That is what health economists have recommended. And lo and behold, here it is. Not a government-run program. Not socialist medicine, but a thoughtful -- although admittedly complex -- set of reforms that are going to make health care work better, more cheaply for American consumers. I think that's pretty darned good outcome. And you know, I think that when we look back after I signed this bill, people are going to acknowledge that not only was this the most important piece of domestic legislation since at least social security, but it also tackled the biggest problem that we had in terms of our long-term fiscal well-being.

Because if we hadn't done this, then it was guaranteed that premiums and costs for health care would continue to double, or triple, businesses would start dropping health care because they couldn't afford to provide it to families, families would start dropping health care because they couldn't afford all the co-payments and deductibles that were being pushed on them, and I guarantee you, the federal government couldn't afford it because that is the single biggest driver of our long-term deficit.

KROFT: Do you think it's going to pass?

PRESIDENT OBAMA: Yes.

KROFT: Do you do you think it's gonna pass before Christmas? In the Senate?

PRESIDENT OBAMA: I think it's going to pass out of the Senate before Christmas. And I think that we will then have to reconcile the House and Senate bills. But I am confident that it will pass.

KROFT: Are you going to be involved in that process?

PRESIDENT OBAMA: I've been involved the whole time. Just because I'm not, you know, over at the Capitol Building doesn't mean I'm not involved. You know my job is not to draft legislation. My job is to set forward a vision, point people in the right direction. That's what we've done. And that's why we're gonna get a bill.

KROFT: You're going off in a couple of days, tomorrow I think, to Scandinavia to receive the Nobel Peace Prize. You're sitting here. It's a wonderful honor. How did you reconcile writing the speech sitting here, going and having to make an address a week after you committed 30,000 troops to go fight a troop in Afghanistan?

PRESIDENT OBAMA: That will be the topic of the Nobel Peace Price speech. Acknowledging that there is a contradiction there. I'm getting a peace prize and yet 30,000 more troops are being deployed for a war, granted, that I did not start. But for that matter, the American people didn't start it. It was started when a couple of planes crashed into the Twin Towers and into the Pentagon, and killed 3,000 Americans.

But the point that I'm gonna make in the speech is that America is reluctant when it comes to war, and historically has been. We did not set ourselves up to be an occupier. In fact, we were founded to fight off occupation. To promote self-determination, and self-government. And at least since World War II, we have carried the burden of being peacekeepers around the world, on a whole host of conflicts that in some cases had nothing to do with us. We haven't always been perfect. We've made mistakes. But overall, we've underwritten global security that has lifted billions out of poverty and actually reduced violence significantly during that period.

And so the point that I'll try to make is that I think the peace prize was awarded not so much to me as it was to America, to signify that there's still great hope around the world for America's role as a promoter of peace. That there are gonna be times where we have to use military action not to destroy the peace, but rather to shore up the peace, or to make sure that it is a just peace.

And you know, we live in history. And it's complicated. And things aren't always, you know, completely clean. But I think that the policies that we're pursuing around nuclear disarmament and nonproliferation, the policies we're pursuing in terms of issues like food security and climate change, the policies we're pursuing in terms of engagement and promoting more effective diplomacy -- all those policies I think over the long term really will make for a more peaceful 21st century than the alternative if we weren't taking these actions.

KROFT: The gate crashers. By now, you must know --

PRESIDENT OBAMA: It's really a shame that I had to go through a whole 60 Minutes interview without talking about the gate crashers. (laughter) Good catch.

KROFT: You must know what happened. Can you share that with us?

PRESIDENT OBAMA: I think that what I know is what everybody knows. Which is that these people should not have gotten through the gate. A mistake was made at the checkpoint to let them through. That mistake was not corrected through the process. I think the Secret Service has already taken responsibility for it. I think there's been an acknowledgement on the part of the White House that there should've been better coordination between Secret Service and the Social Secretary's office. And it won't happen again.

KROFT: Were you unhappy with your Social Secretary?

PRESIDENT OBAMA: I was unhappy with everybody who was involved in the process, because obviously although I chafe at being in the bubble, I also want to make sure my family is safe. And that foreign guests of ours are safe. And so, it was a screw up. Now I will admit that, you know, this is a town where once a screw up happens, people can't just say, okay, that was a screw up and let's fix it. There has to be, you know two weeks worth of cable chatter about it. I don't think that from a policy perspective, this was the most important thing or even the fifth or sixth most important thing that happened this week, although it got the most news.

KROFT: Were you angry when you found out about it?

PRESIDENT OBAMA: Yes. That's why --

KROFT: Seriously angry? Right.

PRESIDENT OBAMA: Yes. That's why it won't happen again.

Transcript: President Obama, Part 1