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The President: Hello, everybody! Thank you! Thank you so much.
Everybody have a seat, have a seat.
It's good to be back.
Good to be back in Annandale. Good to be back at NOVA.
How is everybody doing?
(applause)
I want to make a couple of acknowledgments.
First of all, Congressman Gerry Connolly is here.
(applause)
Dr. George Gabriel, the provost of Northern Virginia Community
College, is here.
(applause)
And the president, Bob Templin, is here.
(applause)
It is great to be back.
I keep on coming back because Jill Biden tells me to keep on
coming back.
(laughter)
I tend to listen to her.
I always say Vice President Joe Biden's best quality is
Jill Biden.
(laughter)
Though Jill couldn't be here today because she's teaching
all day and she does not skip class for anybody,
including the President of the United States.
(laughter)
What I want to do is just make a few quick remarks at the top,
and then I'm just going to open it up for questions.
This gives me a chance to get out of the immediate environs
of Washington and hear directly from voters and
have a conversation with them.
And so I'm grateful that all of you took the time.
Last week, I laid out a plan to get America's finances in order.
It was a plan for shared prosperity through shared
sacrifice and shared responsibility.
So before I take your questions, I want to talk a little bit
about this plan briefly, because it goes to the heart of what's
happening at this campus and schools like it all
across America.
And my plan does two big things: First,
it cuts spending and it brings down the deficit.
We all know how important that is.
Just like any student on a tight budget -- and I'm assuming there
are a few students on a tight budget here.
Let's see a show of hands.
Any students on a tight budget?
(laughter)
I've been there.
Just like you, America has to start living within its means.
For a long time, Washington acted like
deficits didn't matter.
A lot of folks promised us a free lunch.
So I think everybody needs to recall,
we had a surplus back in 2000, 11 short years ago,
but then we cut taxes for everybody,
including millionaires and billionaires.
We fought two wars and we created a new and expensive
prescription drug program, and we didn't pay for any of it.
And as the saying goes, there is no such thing as a free lunch.
So we were left with a big deficit as I was coming into
office, and then we had the worst recession since
the Great Depression.
And that made it worse, because in a recession two things
happen: Number one, the federal government helps out states and
localities to prevent teacher layoffs and firefighters and
police officers from being laid off, and all that costs money.
It requires more money to provide additional help to
people who've lost their jobs or are in danger or
losing their homes.
So the federal government is putting more money out,
but because of the recession it's taking less money in in
tax revenues, and so that grows the depression --
the deficit further.
Now, if we don't close this deficit,
now that the economy has begun to grow again,
if we keep on spending more than we take in,
it's going to cause serious damage to our economy.
Companies might be less likely to set up shop here in the
United States of America.
It could end up costing you more to take out a loan for a home or
for a car, because if people keep on having to finance
America's debt, at a certain point they're going to start
charging higher interest rates.
We won't be able to afford investments in education or
clean energy, or all the things that we care about because we
know it'll help drive our economy and create jobs.
So we've got to tackle this challenge.
And I believe the right way to do it is to live up to an
old-fashioned principle of shared responsibility.
That means everybody has to do their part.
So what my plan does is it starts with combing the budget
for savings wherever we can find it.
And we had a good start a few weeks ago,
when both parties came together around a compromise that cut
spending but also kept the government open and kept vital
investments in things that we care about.
We need to build on those savings,
and I'm not going to quit until we've found every single dime of
waste and misspent money.
We don't have enough money to waste it right now.
I promise you that.
We're going to check under the cushions -- you name it.
(laughter)
But finding savings in our domestic spending only gets
you so far.
We're also going to have to find savings in places like
the defense budget.
(applause)
As your Commander-in-Chief, I will not cut a penny if
it undermines our national security.
But over the last two years, the Secretary of Defense Bob Gates
has taken on wasteful spending that doesn't protect our troops,
doesn't protect our nation -- old weapons systems,
for example, that the Pentagon doesn't want,
but Congress sometimes keeps on stuffing into the budget.
Well-connected special interests get these programs stuck in the
budget even though the Pentagon says we don't need these
particular weapons systems.
So we've begun to cut those out.
And Secretary Gates has found a lot of waste like that and has
been able to save us $400 billion so far.
I believe we can do that again.
Four hundred billion dollars -- even in Washington,
that's real money.
That funds a lot of Pell Grants.
That funds a lot of assistance for communities like this one.
(applause)
We'll also reduce health care spending,
and strengthen Medicare and Medicaid through some
common-sense reforms that will get rid of, for example,
wasteful subsidies to insurance companies.
(applause)
Reforms that can actually improve care -- like making
it easier for folks to buy generic drugs,
or helping providers manage care for the chronically ill
more effectively.
And we can reform the tax code so that it's
fair and it's simple --
(applause)
-- so the amount of taxes you pay doesn't depend on whether
you can hire a fancy accountant or not.
And we've also got to end tax cuts for
the wealthiest Americans.
(applause)
Let me say, this is not because we want to punish success.
I suspect there are a bunch of young people in this gym that
are going to end up being wealthy, and that's good.
We want you to.
We want you to be able to go out there and start a business and
create jobs and put other people to work.
That's the American way.
But we are going to have to ask everybody to sacrifice.
And if we're asking community colleges to sacrifice,
if we're asking people who are going to see potentially fewer
services in their neighborhoods to make a little sacrifice,
then we can ask millionaires and billionaires to make a
little sacrifice.
(applause)
We can't just tell the wealthiest among us,
you don't have to do a thing.
You just sit there and relax, and everybody else,
we're going to solve this problem.
Especially when we know that the only way to pay for these
tax cuts for the wealthiest Americans is by asking seniors
to pay thousands of dollars more for their health care,
or cutting children out of Head Start,
or doing away with health insurance for millions of
Americans on Medicaid -- seniors in nursing homes,
or poor children, or middle-class families
who may have a disabled child, an autistic child.
This is not a trade-off that I'm willing to make.
It's not a trade-off that I think most Americans think is
fair, no matter what party you belong to.
That's not who we are as a country.
We're better than that.
So that's the first part of the plan -- cutting spending in a
way that is fair and asks for shared responsibility.
But here's the second part of the plan,
and that's why I'm here at this campus today.
Even as we're making sure that government lives within its
means, we've still got to invest in the future.
We've still got to invest in you.
We've still got to strengthen the middle class,
and we've still got to grow the economy.
So, yes, we're going to have to save wherever we can;
and my proposal makes some tough cuts to some worthy programs and
services that if we were in better times
I'd continue to fund.
But I'll tell you what I'm not going to do.
We're not going to reduce the deficit by sacrificing
investments in our infrastructure.
We're not going to allow our roads and our bridges to grow
more and more congested while places like China are building
new roads and new airports and thousands of mile of
high-speed rail.
If we want businesses to locate here in the United States of
America and create jobs here, we've got to make sure that
America is built to compete.
We've got to have the best roads.
We've got to have the quickest trains.
We have to have the fastest broadband networks.
That's who we are.
Some folks in Washington also want to close the deficit by
gutting our investments in things like clean energy or
medical research or basic science.
That's not a viable choice.
America has always been the world's engine of innovation
and discovery.
That's who we are.
That's how we've prospered.
I don't want other countries to lead in
the industries of tomorrow.
I want new technologies invented here in the United States.
I want new solar panels and wind turbines and fuel-efficient cars
and advanced batteries all to be made right here in the
United States of America.
I want us to invent them right here.
(applause)
I mean, let's just take energy as an example.
Folks are out there dealing with gas at four bucks a gallon.
It's just another hardship, another burden,
at a time when we're just coming out of a recession and things
are already pretty tight for folks.
Now, whenever this happens, just like clockwork,
you see politicians going in front of the cameras and they'll
say they've got a three-point plan for two-buck-a-gallon gas.
(laughter)
The truth is, the only real solution to helping families
at the pump in the medium and the long term is clean energy.
That's how we'll save families money.
That's how we'll reduce our dependence on foreign oil.
We've got to develop new technologies to lessen our
reliance on a fuel that is finite and that we've got to
import from other countries, including some very unstable
parts of the world.
And that's why I think that cutting clean energy investments
by 70 percent -- 70 percent, which has been proposed by some
in Congress -- would be such a mistake.
Finally -- and I know this is near and dear to your hearts --
we're not going to reduce our deficit by cutting education and
eliminating college scholarships.
(applause)
In a world where our students face stiff competition from
students from other countries, why would we make it harder for
you to compete?
We see why it matters right here.
More than 10,000 students at this college,
at this college alone, are relying on Pell Grants to
help pay their tuition.
It's almost 3,000 students at the Annandale campus alone --
3,000 students just at this campus.
How many of you who are in the audience have gotten a Pell
Grant to help you pay your way?
How many of you can't afford to pay another
$1,000 to go to school?
I know what this is like.
Scholarships helped make it possible for me and for
Michelle to go to college.
It's fair to say I wouldn't be President if it hadn't been for
somebody helping me be able to afford college.
That's why I think it would be such a huge mistake to balance
the budget on the backs of students,
by cutting scholarships by as much as $1,000,
forcing students to go without them altogether.
I just spent the last two years making sure that instead of
giving subsidies to banks, we were giving that money directly
to students in the form of more grants and better
deals on their loans.
I'm not going to undo that after all the work we've done over the
last two years.
(applause)
That's not a smart way to close our deficit.
(applause)
So that's the bottom line.
Just as it would undermine our future to ignore our deficits,
it would also undermine our future to ignore the promise
of students like you -- young people who come to this school
to get a degree in the hopes of living out a better life,
giving your children and your grandchildren a better life.
That's the core of the debate that we're having right now.
Both Democrats and Republicans agree that we should reduce the deficit.
In fact, there is general agreement that we need to cut
spending by about $4 trillion over the medium term.
And when folks in Washington agree on anything,
that's a good sign.
So the debate isn't about whether we reduce our deficit.
The debate is about how we reduce our deficit.
And my view is, we need to live within our means while still
investing in our future -- cutting where we can while
investing in education, investing in innovation,
investing in infrastructure, and strengthening the safety
net provided by programs like Medicare so that they're there
for this generation and for next generations.
(applause)
And here's the good news -- I believe that Democrats and
Republicans can come together to get this done.
It won't be easy.
There are going to be some fierce disagreements.
Shockingly enough, there will be some politics
played along the way.
(laughter)
There will be those who say that we're too divided,
that the partisanship is too stark.
But I'm optimistic.
I'm hopeful.
Both sides have come together before.
I believe we can do it again.
And here's why this is important.
Ultimately, this debate is not just about numbers on a page.
It's about making sure that you can make the most of your
futures, that you can find a good job and achieve the life
that you're studying for in a nation that's prosperous and
rich with opportunities for anybody who's willing to work
hard to get ahead.
That's my focus.
That's what I think about first thing I wake up in the morning.
That's what I think about when I go to bed at night,
and that's what I think about all the hours in between.
That's why I'm going to need your help.
This is probably my most important message today:
I'm going to need your help.
I can't afford to have all of you as bystanders
in this debate.
I want everybody to be in the game.
I want you to hold me accountable.
I want you to hold all of Washington accountable.
There's a way to solve this deficit problem in an
intelligent way that is fair and shares sacrifices so that we can
share opportunity all across America.
But I can't do that if your voices are not heard.
There are powerful voices in Washington;
there are powerful lobbies and special interests in Washington.
And they're going to want to reduce the
deficit on your backs.
And if you are not heard, that's exactly what's going to happen.
If you are heard, then we're going to meet this challenge.
We are going to secure our future.
We're going to make our country stronger and more prosperous
than it has ever been before.
With that, I want to take some questions.
Thank you very much, everybody.
Thank you.
(applause)
Thank you. Thank you. Thank you.
All right, we've got some -- testing -- there we go.
All right, so we've got some people in the audience,
our wonderful volunteers, with microphones.
When I call on you, if you could introduce yourself -- wait for
the microphone so we can all hear you -- and then introduce
yourself, and try to keep the question relatively short.
(laughter)
I will try to keep my answers relatively short.
And I'm going to go boy, girl, boy, girl --
(laughter)
-- just to make sure things are fair.
All right?
Let me start with this young lady right there.
That's right, you. Yes, you.
(laughter)
I'll call on you, too.
(laughter)
Go ahead.
Audience Member: My name is Asiada Sough (phonetic), and I'm a student here at NOVA.
And I'd like to know your plan to cut $4 trillion in up to
12 years -- is any of that toward the education budget?
The President: No, what we've done is we have actually said that even as we
are making all these spending cuts,
we actually think that education spending should
go up a little bit.
(applause)
And the reason is not that money solves all the problems
in education -- it doesn't.
But whether it's K-12 or higher education,
money does make a difference if it's used intelligently.
So, for example, what we're doing at the K-12 level is
we've designed a program called Race to the Top.
And it's a pretty straightforward program.
What it says to school districts and states all across the
country is, in addition to the usual money that you get for
disadvantaged kids, the usual money that you get for disabled
kids -- most of which is given out in formulas so it just
depends on how many kids are there and how many kids are
disadvantaged or disabled -- we're also going to have a
little bit of money that we save to give to schools and school
districts that are really digging deep to reform
themselves and to find new ways to improve performance.
So if you are doing a great job in recruiting and training new
teachers, if you're doing a great job in lifting up schools
that are under-performing -- and there are about 2,000 schools in
the country that are what are called dropout factories.
I mean, they just are not doing the job.
So if in that state you say, we've got a special plan to
make sure those schools are doing a great job,
if you've got innovative programs in math and science
education, if you're doing some things that increase
accountability, improve excellence,
then we're going to give you a little extra money,
but you're going to have to reform to do it.
So the idea is not just spending more money for its own sake.
It's tying more money to improved performance
and real reform.
That's what we're doing at K-12.
Now, what we're doing at the community college and university
levels is we've redesigned some of the programs like Pell Grant
and student loan programs.
As I mentioned, it used to be that the student loan programs
used to go through banks, and they would skim billions of
dollars in profits, even though they weren't really taking any
risk because the federal government was guaranteeing
the loans.
So we said, well, let's just give the money directly to students.
That will give us an extra several billion dollars that
we can use to provide all of you additional scholarships,
higher levels for your Pell Grants.
But we're also working with community colleges to see can we
make sure that the programs at the community colleges are as
effective as they can be to provide the training and the
skills you need to succeed.
So, for example, one of the things that we're doing is
identifying where are the jobs of the future;
can we get the private sector and businesses to help design
curriculums ahead of time so that young people when they go
through -- and if they're taking out these loans and making these
big investments, they know there's going to be a job
at the end of the tunnel.
So we need more money, but we also need more reform.
And in order to provide more money for education,
we're having to make some cuts in some other areas that are
going to be difficult in some cases.
I mean, I just mentioned the defense budget, for example.
There are certain aspects of the defense budget that
I will not touch.
For example, making sure that our troops have the equipment
they need to be safe when they're in theater --
(applause)
-- making sure that when they come home veterans are getting
the help that they need for post-traumatic stress disorder,
or to be able to go to college themselves.
So there are certain commitments that we make to our men and
women in uniform that are sacred,
and we can't cut back on those.
But as I said, there are some weapons systems that
just don't work.
There are some that may work but we don't need.
There are some that we just can't afford.
So we're going to have to make some difficult decisions on some
of those issues.
And let's face it, there are also some social service
programs that don't work.
I mean, one of the things that I always say is if you're really
progressive, you've got to be willing to examine whether
something that you're paying for is actually working,
because if it isn't working, that money could be used
somewhere else to help people.
So we've got to have a much more rigorous review of how effective
various programs are.
Some work and some don't.
And if they don't work we should eliminate them and put that
money into programs that do.
Okay? All right.
It's the gentleman's turn, right back there.
Audience Member: Hi, Mr. President.
I've lived overseas for the last 15 years and there has been very
good medical care, but now that I'm here back in the States and
on Medicare I find something interesting,
and that is that Medicare won't pay for any expenses overseas;
it has to be here in this country,
and that costs you money, the government,
and it costs me money, but it's good, of course,
for the health care industry.
Would you be interested in changing that?
The President: Well, I think you're raising an interesting point.
First of all, Medicare is one of the most important pillars
of our social safety net.
(applause)
And so before I get to your specific point,
I want everybody to understand what the debate right now about
Medicare that's taking place between Democrats and
Republicans is, because you're going to need this as this
debate unfolds over the next several months.
The House Republicans just passed a proposal,
and their main plan to reduce our long-term deficits and debt
is to turn Medicare into a voucher program.
What would happen would be that right now seniors,
when they get -- once they're on Medicare,
you basically are able to get the care that you need and
Medicare covers it for you.
What would happen under this proposal is you'd get a set
amount of money; you could then go out under the private market
place and buy insurance, but if the voucher you were getting was
for $6,000 or $7,000 and the insurance company said it's
going to cost you $12,000, well, you're going to have to make up
that difference.
And so it's estimated by the Congressional Budget Office,
which is an independent, bipartisan sort of referee
in Congress that determines these things -- they figure that
seniors would end up paying twice as much for their health
care as they are currently.
At least twice as much.
And more importantly, it would get worse over time,
because health care inflation goes up a lot faster than
regular inflation.
So your health care costs keep on going up and up and up;
the voucher doesn't.
Each year, more and more costs coming out of pocket.
Now, I think that is the wrong way to go.
That would fundamentally change Medicare as we know it --
(applause)
-- and I'm not going to sign up for that.
Having said that, we are going to have to reform Medicare and
our entire health care system in order to improve quality for the
amount of money that we spend -- because we spend much more money
in this country on health care than any other industrialized
country, and our outcomes aren't better.
And that's what we started doing with health care reform
last year.
Essentially what we said was let's not just dump these
additional costs on seniors -- I mean,
it's not hard to save the government money if you're
willing to just say, here, you pay for it.
That's not a solution.
The question is, how do we actually make health care
costs lower overall?
That means that we work with providers to say,
how can you do a better job providing care to the
chronically ill?
About 15, 20 percent of the patients account for 80 percent
of the costs because they have chronic illnesses like diabetes.
Can we incentivize providers, doctors,
hospitals to do a better job monitoring those illnesses,
preventing those illnesses, treating those illnesses in
a comprehensive way so that the overall costs
to the system go down?
Can we stop with the five or six tests, all of which cost money,
and just give you one test and have them -- the results emailed
to everybody that you need to deal with?
That can save us money.
So there are a whole host of steps that we can take
that could make a big difference in reducing
health care costs overall.
And keep in mind, even if you're not on Medicare,
the overall costs of health care are being driven up for you and
for -- even if you're on private health care -- you're paying
about $1,000 per family in extra costs because of all
the uncompensated care that comes in,
all the folks who show up at the emergency room,
all the medical errors that take place at hospitals that end up
costing the system money as a whole.
So if we can squeeze those inefficiencies out of the
health care system, then we can maintain Medicare as we know it,
but still reduce the cost to the federal government and
to everybody in society.
Now -- uh-oh.
(laughter)
We don't need any health care, do we?
Nobody fell?
To get to your question, then, my preference would be that
you don't have to travel to Mexico or India to get
cheap health care.
I'd like you to be able to get it right here in
the United States of America that's high quality.
(applause)
So before we went on the path of you can go somewhere else to get
your health care, let's work to see if we can reduce the costs
of health care here in the United States of America.
That's going to make a big difference.
And Medicare is a good place to start because Medicare is such
a big purchaser that if we can start changing how the health
care system works inside of Medicare,
then the entire system changes.
All the doctors, all the hospitals,
they will all adapt to these best practices.
And the same is true, by the way, for prescription drugs.
One of the things that we want to do as part of our health care
reform package is let's start doing a better job of
negotiating better prices for prescription drugs here in the
United States so that you don't feel like you're getting cheated
because you're paying 30 percent more or 20 percent more than
prescription drugs in Canada or Mexico.
Re-importation is a short-term solution that a lot of seniors
are resorting to, but why should drugs that are invented here in
the United States end up being more expensive
than another country?
Well, the reason is, is because drug companies can get away with
it here and they can't get away with it there,
and we should change some of those systems to make
it cheaper for everybody here.
But that's going to make a huge difference in terms of
reducing our deficit.
So, thank you.
(applause)
All right, it's a young lady's turn -- right here.
Hold on, let's -- can we get a mic over here,
or do I need to lend her my mic? Okay.
Audience Member: Hi, Mr. President. My name is Vinita Griffin (phonetic).
I'm a late student here at Northern Virginia
Community College.
I'm in my second career now.
My question is, in about 15 years I'll be eligible
for Social Security.
And I'm part of the baby boomer generation,
and I don't know if there will be Social Security when I get
ready to -- and I probably won't retire for another 25 years,
I'm thinking.
The President: No, you look pretty young.
(laughter)
You look like you're -- you look like you've got a lot of career
left in you.
Audience Member: I'm about your age.
But, yes, so I figure another 25 years I'll be working.
But I don't know if it will be there when I need it,
and I'm concerned about that.
The President: Well, let me talk about Social Security.
The big drivers of our deficit are health care costs.
I mean, the thing that we've really got to get control of
is Medicare and Medicaid.
That's what's skyrocketing really fast.
Because not only is the population getting older,
but health care costs are just going up a lot faster
than people's wages and salaries -- or tax revenues
to the federal government.
Social Security is a problem but one that
we can solve much more easily.
So the first answer to your question is,
Social Security will definitely be there when you retire.
(applause)
I'm absolutely confident about that.
I am absolutely confident about that.
Now, here's the thing.
If we don't do anything on Social Security,
if we just don't -- if we don't touch it at all,
then what would happen is, by the time you retire,
or maybe just a couple years after you retire,
you might find that instead of getting every dollar that
you were counting on, you're only getting 75 cents out of
that dollar.
Because what's happening is the population is getting older;
there are more retirees per worker and more money starts
going out than is coming in.
So we do have to stabilize Social Security's finances,
but we can do that with some relatively modest changes --
unlike health care, where we've got to get in and work with
providers and really get some much more substantial reforms.
With Social Security, it's just a matter of tweaking how it
currently works.
Now, politically, it's hard to do.
Politically, it's hard to do.
For example -- I'll just give you one example of a change that
would make a difference in Social Security.
Right now you only pay a Social Security tax up to a certain
point of your income.
So a little bit over $100,000, your Social Security -- you
don't pay Social Security tax.
Now, how many people are making less than $100,000 a year?
Don't be bashful.
(laughter)
The point is, for the vast majority of Americans,
every dime you earn, you're paying some in Social Security.
But for Warren Buffett, he stops paying at a little bit over
$100,000 and then the next $50 billion he's not paying a dime
in Social Security taxes.
So if we just made a little bit of an adjustment in terms of the
cap on Social Security, that would do a significant amount
to stabilize the system.
And that's just an example of the kinds of changes that
we can make.
(applause)
So we are going to have to make some changes in Social Security,
but it's not the major driver of our deficit.
And what I've proposed is let's work on Social Security,
but let's not confuse that with this major budget debate that
we're having about how we deal with both spending and revenues
because that is the problem that is going to require some really
hard work and some bipartisan cooperation.
Okay? All right.
It's a gentleman -- gentleman in the white shirt right there
in the middle.
You got three guys right in a row,
I'm choosing the guy right in the middle.
There you go. Right there.
Audience Member: Mr. President, my name is Mitchell Holliman (phonetic).
I'm a student here at NOVA, electrical and
computer engineering.
And I'm really concerned about the clean energy solutions
because with the deficit that we have,
most of those solutions and alternatives are far more
expensive than the things that we have in place now.
So how are we going to reduce the deficit and at the same
time develop clean energy alternatives as well as removing
the current systems that we have in place that are dependent on
oil and other things from other countries?
The President: Well, it's a great question.
(applause)
And so -- let me start with gas prices because I know that
that's on everybody's minds and it'll -- you can sit down.
(laughter)
I'll admit to you, it's been a while since I filled up at the
tank -- filled up at the pump.
(laughter)
You know, Secret Service doesn't let me get out --
(laughter)
-- and they don't let me drive anymore.
But it wasn't that long ago that I did have to
fill up my gas tank.
And I know that if you've got a limited budget and you just
watch that hard-earned money going away to oil companies that
will once again probably make record profits this quarter,
it's pretty frustrating.
And if you're driving out of necessity 50 miles a day to work
and you can't afford to buy some fancy new hybrid car so you're
stuck with the old *** that is getting you eight miles a
gallon, that's pretty frustrating.
Now, I wish I could tell you that there was some easy,
simple solution to this.
It is true that a lot of what's driving oil prices up right now
is not the lack of supply.
There's enough supply.
There's enough oil out there for world demand.
The problem is, is that oil is sold on these world markets,
and speculators and people make various bets, and they say,
you know what, we think that maybe there's a 20 percent
chance that something might happen in the Middle East that
might disrupt oil supply, so we're going to bet that oil
is going to go up real high.
And that spikes up prices significantly.
We're now in a position where we can investigate if there's
unfair speculation.
We're going to be monitoring gas stations to make sure there
isn't any price gouging that's taking advantage of consumers.
But the truth is that it is a world commodity,
and when prices spike up like this there aren't a lot of
short-term solutions.
What we have are medium- and long-term solutions.
Now, one solution is making sure that we're increasing production
of U.S. oil.
And we have actually continually increased U.S. production,
so U.S. production is as high as it's ever been.
The problem is we only have about 2 to 3 percent of the
world's oil reserves, and we use 25 percent of the world's oil.
So when you say we should be using traditional sources,
the problem is we've got finite sources when it comes to oil.
And that means we've got to find some replacements.
There are a couple of alternatives.
One are biofuels.
I was down in Brazil; a third of their cars are run on biofuels
-- mostly ethanol made out of sugar cane.
We should be able to develop technologies where we are
building more efficient biofuels than we're currently using.
Right now we use -- most of our ethanol comes from corn.
It would be better if we can get farmers to work with industry to
figure out whether we can use woodchips or algae or
switchgrass or other biomass that can create fuel that is
competitive with gasoline.
So that's point number one.
Point number two is we should be looking at electric cars and how
can we produce more effective electric cars,
cheaper electric cars, here in the United States.
Technologically, it's not feasible to get a car that
runs 150 miles a gallon, or maybe no gallons of gas.
And you just get your car, you plug it in at night in
your garage; whatever energy is stored in your car battery goes
back into your house, and then when you come back out at night
it's recharged and you're ready to go.
You're right right now that hybrid cars and electric cars
are more expensive than regular cars,
but partly that's because we haven't increased demand enough
for it that the unit costs have gone down.
And the more you produce of something, the cheaper
it gets, right?
You remember what it used to cost you for a flat-screen TV,
or a laptop computer.
But as volume picked up, technology improves,
costs go down.
Well, the same thing could be true for electric cars,
so one of the things we're trying to do is to increase
demand on electric cars.
It turns out that the federal government has a lot of cars,
so we're saying let's have the federal government make sure
that 100 percent of our cars are energy-efficient cars to create
a better market for those cars that can help drive costs down.
We've also increased fuel-efficiency standards
on cars for the first time in 30 years.
That will save about 1.8 billion gallons -- or barrels -- of oil,
billion barrels of oil.
And we can now increase fuel-efficiency standards
on cars and trucks, and that could make a huge difference
because now consumers are just -- whenever they go to buy a new
car, by necessity that car is going to have
higher mileage standards.
All that drives down demand and can reduce gas prices overall.
But there's one last component to this,
and you just pointed out if we're going to have electric
cars, we still have to have electricity and how do we
produce electricity?
Now, it's true that coal is something that's very
plentiful in America.
We're sort of the Saudi Arabia of coal.
The challenge with coal is that although it's very cheap,
it's also dirty.
And it can create the kinds of air pollution that not only is
contributing to climate change but is also creating asthma for
kids nearby.
You got asthma? Okay.
And so sucking that stuff in is not ideal.
So what we've said is let's invest in clean coal technology
that potentially can capture some of these particulates
and some of the carbon dioxide that's going
into the atmosphere.
If we can do that in a energy-efficient -- in a
cost-efficient way, then that would be hugely helpful to us.
But we also have to look at other ways
of generating electricity.
It's true that solar and wind right now are more expensive
than coal, for example, or natural gas.
But that doesn't mean that it will always be the case;
it just means that we haven't developed the technologies to
maximize our ability to capture and store electricity through
those means.
I just mentioned natural gas.
We have a lot of natural gas here in this country.
The problem is, is that extracting it from the ground
-- the technologies aren't as developed as we'd like and so
there are some concerns that it might create pollution in
our groundwater, for example.
So we've got to make sure that if we're going to do it,
we do it in a way that doesn't poison people.
The point is, is that there's not going to be any single
silver bullet.
What we've got to do is develop all these energy alternatives.
All of them, though, are going to require some investment in
new ways of thinking, new basic science, new research.
And typically no single company is going to be making those
investments because it's not profitable for them to do it.
And that means that the federal government historically has
stepped in and said, you know what,
we'll make this investment in basic research and then we'll
let somebody else commercialize it and make money on it.
That's how we invented the Internet.
That's how we invented the GPS system.
That's how we invented the bar code.
Those were all federal investments that eventually
spread out throughout the economy and made everybody
richer and better off.
And that's what we've got to do with energy as well,
but that requires an investment and I'm
prepared to make that investment.
I think we all should be.
All right? Thank you.
(applause)
All right.
It's a young lady's turn -- right there, yes.
Audience Member: Hi, Mr. President. I'm Dr. Rebecca Hayes.
I'm a history professor at Manassas.
And my question is, are you encouraged to see more of the
bipartisanship like the Gang of Six that has formed recently
addressing some of the very concerns you've mentioned?
Do you think we're going to see more of that and are you going
to try to stay behind it?
The President: Well, I am encouraged that over the last four or five months
we've been able to strike some deals between Democrats and
Republicans that a lot of people didn't expect us
to be able to do.
Our conflicts and our disagreements tend to get more
attention than our agreements.
And the easiest way to be on TV is to call somebody a name.
(laughter)
Right?
I mean, if you are -- if you say something mean about somebody,
that will get you on TV.
If you say something nice about somebody,
everybody -- you figure that's -- well, that's boring,
I'm not interested.
So I think that there is a huge opportunity for us to be able to
work together, particularly on this deficit issue.
As I said, we now agree that it's a problem.
Everybody agrees it's a problem.
Everybody agrees about how much we have to lower the deficit by
over the medium term, and that we've got to deal with long-term
health care costs in order to get this under control.
So it's pretty rare where Washington says this is a
problem; everybody agrees on that;
and everybody agrees on about how much we need to do to solve
the problem.
The big question that is going to have to be resolved is,
how do we do it?
And there is -- I don't want to lie to you,
there is a big philosophical divide right now.
I believe that you've got to do it in a balanced way.
I believe that you've got to, yes, have spending cuts,
but you can't cut things like education or basic research or
infrastructure down to the bone.
I believe that people who have been really blessed in this
society like me and have a very, very,
very good income can afford to pay a little bit more -- nothing
crazy, just go back to the rates that existed
when Bill Clinton was President.
That wasn't that long ago --
(applause)
-- that that's a fair thing to do,
especially if it makes sure that seniors are still getting their
Medicare and kids are still going to Head Start.
Why wouldn't I want to make that sacrifice?
Look, and I think most wealthy Americans feel the same way.
I want to live in a society that's fair -- not just out
of charitable reasons, but because it improves my life.
If there are young people out there who are going to good
schools and have opportunity, if I'm not driving by and seeing
homeless folks on the streets, why wouldn't I want to have a
society where I knew that the American Dream was
available for everybody?
So the question is, how do we achieve the same goal?
Can we do it in a more balanced way?
And the House Republican budget that they put forward,
they didn't just not ask the wealthy to pay more;
they actually cut their taxes further.
Now, we just had Tax Day, so nobody wants to pay taxes.
Let me tell you, I looked at my tax form and I though,
hmm -- there is a moment there where you look at the figure
you're paying and you say, wow, I don't -- let me think about my
position on taxing the wealthy here.
(laughter)
I understand that.
Nobody volunteers and says, boy, I'm just wild to pay more taxes.
But it's a matter of values and what we prioritize.
And I certainly don't think my taxes should be even lower.
That's -- I think America wants a smart government.
It wants a lean government.
It wants a accountable government.
But we don't want no government.
According to the Republican budget that was passed,
for example, we would have to eliminate transportation
funding by a third.
We'd have to cut transporting funding by a third.
You remember when that bridge in Minnesota collapsed with
all those people on it?
And there was a big hue and cry: How can this happen in America?
Well, the National Society of Engineers,
they've looked around and they give us a D when it
comes to infrastructure.
Our roads, our bridges, our sewer systems are
all deteriorating.
We don't even have a serious high-speed rail infrastructure
in this country.
Our broadband lines are slower than places like South Korea.
Well, so what, we cut transportation by another
third, and what's going to happen to America?
We're just going to have potholes everywhere?
(laughter)
We're just going to have bridges collapsing everywhere?
Are we going to continue to have airports that are substandard?
Are we going to go to other countries and suddenly realize
that China and South Korea and all of Europe all have better
infrastructure than we do, and we think that businesses are
going to come here and invest?
Or do we think that at some point companies say,
you know what, America has got a second-rate infrastructure
and it costs us too much money because our trucks going over
those potholes are getting messed up?
So that's the choice that we're going to have to make.
This debate is going to be very important, though.
And as I said before, I'm going to need all of you
involved in this debate.
You've got to make your voices heard.
And I would say, I'm not just talking to Democrats here.
Republicans, I want you to be able to talk to your members of
Congress and say, yes, I'm serious about reducing the
deficit; yes, I want limited government; yes,
I want reductions in spending -- but I do think that we've got to
make investments in basic research and infrastructure
and education, and so let's do it in a balanced way.
And if we do that, we can come up with a compromise that is
effective, that puts America's fiscal house in order,
but also allows us to win the future.
That's my goal.
I'm going to need your help, though.
Thank you very much, everybody.
God bless you. Thank you.
(applause)