Exclusive Interview with Obama: Video and Part One of the Transcript

I sat down with President Obama today, here is the full transcript:

George Stephanopoulos: Mr. President, thanks for taking the time today.

President Obama: Great to be with you.

George Stephanopoulos: I know you just told Erskine Bowles and Senator Simpson, you want to get these talks moving right away. But boy, it doesn’t sound like it’s going to be easy. Paul Ryan. Spent a lot of time with him yesterday. The Congressman has really come out with a tough response to your speech. Let me-- I want to quote it exactly. He said, "The President was excessively partisan, dramatically inaccurate, and hopelessly inadequate. Instead of building bridges, the President is poisoning wells." Are you poisoning wells?

President Obama: Oh, absolutely not. Look if you look at my speech yesterday it was not so much a critique of what the House Republicans have proposed as it was a description of what they’ve proposed. And you know, I think you--

George Stephanopoulos: You said it would lead to a fundamentally different America.

President Obama: Well, and I think that’s absolutely true. If you set revenues at around 16 percent of our gross domestic product, then what flows from it is exactly what Mr. Ryan’s proposing. 70 percent cuts in clean energy. 25 percent cuts in education. We cut transportation spending by a third. And we end Medicare as we know it, fundamentally. I mean, that-- that’s just-- that-- but that’s a fact.

George Stephanopoulos: How can you compromise--

President Obama: So--

George Stephanopoulos: --a position that fundamentally changes America? It seems like there’s no common ground there.

President Obama: Well, here-- here-- here’s the thing that I think is good. Everybody now agrees that the deficit has to be cut. Everybody is roughly at the same figure in terms of what we need to do over the next ten years. $4 trillion over the next ten to 12 years. And as we saw in these last negotiations, we can come up with some very serious spending cuts that Democrats and Republicans can agree helps to put us on the right path. The key from my perspective is making sure that it’s balanced. And that’s what Mr. Ryan and the House--

George Stephanopoulos: It means revenues.

President Obama: Republicans don’t do. Well, it doesn’t just mean revenues. It means that we’ve gotta look for spending cuts wherever we can find them. So, what my plan does is it says, "Here’s two-- $2 trillion worth of spending cuts." It includes defense cuts. It includes cuts in programs that I care deeply about, but we can make them more efficient. We then say that we need to find a trillion dollars in revenues that wouldn’t hurt the middle class, but would affect people like you and me, George, who can pay a little bit more.

George Stephanopoulos: And you were so forceful on that. And you said, "As long as you’re President, you’re not going to sign any deal where the taxes don’t go up on the wealthy." Republicans have been just as hard-lined on the other side. How do you reconcile those two visions?

President Obama: Well here’s what we should do. Is to focus on those areas that we do agree on. To make sure that we identify the spending cuts that are important. There may be Republicans who acknowledge that we can make some changes in our tax code that makes it simpler, make it fairer. But also helps on the deficit. And keep in mind that if we achieve the $2 trillion in savings on the spending side and we achieve a trillion dollars in revenue, we also save a trillion dollars in interest costs. So, we get to that $4 trillion without having to fundamentally change Medicare. Without having to abandon our commitment to parents who have kids who are autistic or you know, those of us who have parents who-- who may end up being in a nursing home and can’t afford the care. Without abandoning our commitment to investments in things like transportation or education that are going to help us create jobs and economic growth over the long term. So-- but-- the-- what I wanted to do yesterday, and I-- I think I did successfully is to make very clear to the American people that we have a choice. We can’t get everything the government offers and not pay for it. And I think everybody agrees on that. And so, we have two choices. Either we don’t pay for it. In which case we have a-- society that is not caring for our seniors the way it should, is not providing some basic security for people who really need it, and is not investing in the future. Or we can decide to continue on the path that has made us the greatest country on earth. Make those investments. Have a basic social safety net. And we can do it without hurting the middle class--

George Stephanopoulos: I agree with that characterization--

President Obama: --or fundamentally changing these programs.

George Stephanopoulos: --that you were presenting a choice to people. And it really didn’t seem like at some level, you made a calculation. Listen, the House Republicans aren’t going to vote for any tax increases. So, we have to put the choice to the American people and fight it out in 2012.

President Obama: Well, I think-- here-- here’s what I think we can do. I think there are areas of overlap and agreement. I mean, keep in mind, there were several Republicans on the commission, the fiscal commission that I set up, who agreed that we have to have revenue as part of an overall package. And voted for it. And they’re in discussions now to see if potentially we can get a bipartisan process started. I brought the leadership here over yesterday. And the tone was good in the sense that everybody agrees that the United States has to pay its debts. Everybody agrees that we’re going to have to hit a real meaningful target, when it comes to- when it comes to deficit reduction. And that there are going to be some areas where we can agree now. And there are going to be some areas where we don’t agree, but we can get a process going. And some of it will be settled by the American people in the election. And I think that is how democracy should work.

George Stephanopoulos: What can’t wait is the debt limit. You’ve got to extend the debt limit by May. And it seems like you made up the job-- your job is a lot tougher because of your vote in the Senate against extending the debt limit. Up until January, you were defending it. But this week, your staff said it was a mistake. When did you realize that vote was a mistake?

President Obama: Oh you know I think that it’s important to understand the vantage point of a Senator versus the vantage point of a President. When you’re a Senator, traditionally what’s happened is this is always a lousy vote. Nobody likes to be tagged as having increased the debt limit for the United States by a trillion dollars or a trillion and a half, whatever the number is. And so, traditionally the-- the President’s party, the President--

George Stephanopoulos: Bears the burden.

President Obama: --bears the burden of passing it. As President, you start realizing, "You know what? We-- we can’t play around with this stuff. This is the full faith in credit of the United States." And so that was just a example of a new Senator you know, making what is a political vote as opposed to doing what was important for the country. And I’m the first one to acknowledge it.

George Stephanopoulos: But now Senator McConnell is-- is talking to a lot of the Republican Senators about doing the same thing. Saying, "Let’s just have 51 Democratic Senators."

President Obama: Right. Well you know, the-- if in fact we have a situation where it’s not filibustered my suspicion is that the burden is going to fall a lot on Democrats in the Senate to make this happen, but in both chambers, we’re going to need some votes from the other side. And--

George Stephanopoulos: What do you have to give to get Republican votes on that? They’re talking about significant-- some significant measure that is going to bring down the debt.

President Obama: Well, keep in mind that George, the-- the arithmetic doesn’t lie. You know? We have just, in this recent negotiation, that averted the shut down, cut domestic spending by the largest amount in absolute terms in American history. And as a percentage of our overall economy, we cut it more than we have since 1982. So, it’s not like we’re messing around here in terms of cuts, the problem is--

George Stephanopoulos: They want more.

President Obama: Well, the-- the problem is is that the-- you can only get so much out of what’s called discretionary spending. You can only get so much out of Head Start or you know, low-income you know, heating assistance. Or you know, various programs that are not popular with Republicans. Then you start getting into things like defense. And you start getting into things like Medicare and Medicaid in which you know, these are core commitments that we make to our country. And if we’re not going to do anything on revenue, then the Republicans are going to have to explain to me how it is that we can actually get to a number. I think that we can get some cuts going and I’ve shown a lot of flexibility, as you know, George. I’ve been criticized pretty fiercely in my own party. Saying that I’ve been compromising too much. Now, my attitude is is that it’s not a compromise for us to do the right thing and to start getting a handle on our fiscal problems. But at some point there’s going to have to be give on all sides, in order for us to solve this problem.

George Stephanopoulos: You know, and while you all are talking about the debts and deficit which a lot of Americans care about still much more focus on (UNINTEL). I asked-our viewers for questions for you. Thousands came in.

President Obama: Gas prices.

George Stephanopoulos: You got it. You guessed it. I want to actually show you we had dozens. And Louise Ross, Chester, New Hampshire. "Why not release at least some of the oil in our reserves before gas reaches $5 a gallon. If that’s a rainy day fund. It’s pouring out. Give us a break. That’s what it’s there for."

President Obama: Well, I think that we are monitoring the situation very closely. But the strategic petroleum reserve was designed for when oil actually shuts off. It wasn’t supposed to be there--

George Stephanopoulos: To monitor prices.

President Obama: --to monitor prices. Having said that I understand how big of a strain this is on family budgets. And, you know, already we’ve got about $3.85.

George Stephanopoulos: Close to $4.

President Obama: Close to $4. That-- that’s tough. You know, if you’ve got to drive to work every day and you don’t have an option, in terms of the car that you’re driving. And it’s taking more and more out of your budget, that’s a problem. Now, one good thing that we did was in December, an example of compromise that a lot of people didn’t think was going to be possible, with Republicans, we were able to pass a package of tax cuts that has helped to buffer some of that-- that strain on families. So, the total amount of tax cuts that we passed to boost the economy this year will probably be-- be higher than the additional gas costs.

George Stephanopoulos: But you’re not ready to release the reserves yet?

President Obama: But-- the-- the reserves, I think, are something that we’ve got to be very careful about. Typically were used during disruptions. For example, during Hurricane Katrina when refineries just shut down. And what we don’t want to do is catch ourselves in a situation, particularly when things are uncertain in the Middle East, where we’re using it now and it turns out we need more later. But the-- the last thing I want to say on gas prices, ‘cause I know it’s on people’s minds. I- I gave a major speech about this about a week and a half. There-- there aren’t going to be a lot of great short-term solutions to this problem. And what happens every time gas prices spike like this, and the last time it happened was when I was running for President is politicians get up and "We’ve got to do something about gas prices." And then when they go back down, we do nothing. And this time has to be different. We have to make sure that we are improving fuel efficiency standards on cars, which we’ve already done. We’ve got to make sure that we’re developing alternative fuels like electric cars and biofuels and-- and-- natural gas as a strategy for reducing our consumption on oil. We have to increase oil production here. But we’ve got to do it carefully. So, we’re going to have to have a comprehensive package. We’ve got to keep on pushing on that. Understanding that the long term trend, even if I release strategic petroleum reserves. Even if we’re pushing producers to produce more to-- to try to bring the world oil prices down. That over the long term, you’ve got a billion Chinese and a billion Indians all who want to buy cars. And so, the long-term trend is greater demand for oil and we’re not going to have additional supplies that-- that are pretty significant. So, we’ve got to start preparing now as a nation. And I think we can do it.

CLICK HERE for part two of the transcript.

The interview took place on Thursday, April 14 at the White House. This transcript has been edited for clarity.

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