Obama Defends Tax Cuts in Stimulus Plan

Before our exclusive interview with Barack Obama, we asked viewers what they would ask the president-elect. We received hundreds and hundreds of pages of questions -- overwhelmingly on the economy, asking, "Can Obama truly fix the economy?"  I posed the question to the president-elect.

"I think we can fix this," Obama told me. "But it's going to take some time. It's not going to happen overnight. And what we tried to do this week was, first of all, explain where we are in the economy.

"That the jobs numbers this week were terrible. That means we've lost 2.5 million last year. That's the most since World War II. You've got another 3.4 million people who have gone from full-time work to part-time work, or want full-time work. So the underemployment rate is extremely high. And, you know, whether it's retail sales, manufacturing, all of the indicators show that we are in the worst recession since the Great Depression. And it's going to take some time to fix it. But what we tried to do was put forward a plan that says let's act boldly, let's act swiftly. Let's not only provide a jumpstart to the economy and immediately or save 3 million jobs, but let's also put a down payment on some of the structural problems that we have in our economy." Obama said the bulk of his stimulus plan is focused on new energy, modernizing healthcare information technology, and education spending. "The bulk of the package is direct government spending," Obama said. "And here are a few things we're going to do. We're going to alternative energy production. We are going weatherize 2 million homes. We are going to create a much more efficient energy system.And that's going to have enormous ramifications for the economy as a whole down the line. I think we can create a new green economy. And that's going to be one of the keys to the 21st Century. Health care, which is a drain on our economy, both families and businesses, we're going to make investments in information technology, update our systems work, reduce medical error, that's going to save people money. Education, we want to create a classroom for the 21st Century for every child, as well as community colleges and public universities. So we're making a series of investments that point to the future as well as just dealing with rebuilding our roads, bridges, et cetera."Obama defended against Democratic pushback on the tax cuts inside his stimulus package and said he is open to input from Democrats and Republicans.

But, he was adamant about the stimulus package getting passed by President's Day weekend.

"The concern is that in a non-emergency situation, Congress exercises all sorts of prerogatives. They've got all sorts of procedures. Everybody wants to be heard. And I'm respectful of that. I'm coming from the United States Senate. I understand why that is important. And, you know, one of the things that we're trying to set a tone of is that, you know, Congress is a co-equal branch of government. We're not trying to jam anything down people's throats. Here's what we know though, that the sooner a recovery and reinvestment package is in place, the sooner we can start turning the economy around. We can't afford three, four, five, six more months where we're losing half a million jobs per month. And the estimates are that if we don't do anything, we could see 4 million jobs lost this year," Obama said.

--George Stephanopoulos

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