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Hi, everybody. A few weeks ago, we launched an important new part of the Affordable Care Act.
It’s called the Marketplace. And for Americans without
health insurance, and Americans who buy insurance on their own because
they can’t get it at work, it’s a very big deal.
If you’re one of those people, the Affordable Care Act
makes you part of a big group plan for the first time. The Marketplace
is where you can apply and shop for affordable new health insurance
choices. It gathers insurers under one system to compete for your
business. And that choice and competition have actually helped bring
Ultimately, the easiest way to buy insurance in this
Marketplace will be a new website, HealthCare.gov. But as you may have
heard, the site isn’t working the way it’s supposed to yet. That’s
frustrating for all of us who have worked so hard to make sure everyone
who needs it gets health care. And it’s especially frustrating for the
Americans who’ve been trying to get covered. The site has been visited
more than 20 million times so far. Nearly 700,000 people have applied
for coverage already. That proves just how much demand there is for
these new quality, affordable health care choices. And that’s why, in
the coming weeks, we are going to get it working as smoothly as it’s
supposed to. We’ve got people working overtime, 24/7, to boost capacity
and address these problems, every single day.
But even as we improve the website, remember that the
website isn’t the only way to apply for coverage under these new plans.
We’ve updated HealthCare.gov to offer more information about enrolling
over the phone, by mail, or in person with a specially-trained navigator
who can help answer your questions. Just call 1-800-318-2596 or visit
LocalHelp.HealthCare.gov. Don’t worry – these plans will not sell out.
We’re only a few weeks into a six-month open enrollment period, and
everyone who wants insurance through the Marketplace will get it.
Some people have poked fun at me this week for sounding
like an insurance salesman. And that’s okay. I’d still be out there
championing this law even if the website were perfect. I’ll never stop
fighting to help more hardworking Americans know the economic security
of health care. That’s something we should all want.
That’s why it’s also interesting to see Republicans in
Congress expressing so much concern that people are having trouble
buying health insurance through the new website – especially considering
they’ve spent the last few years so obsessed with denying those same
people access to health insurance that they just shut down the
government and threatened default over it.
As I’ve said many times before, I’m willing to work with
anyone, on any idea, who’s actually willing to make this law perform
better. But it’s well past the time for folks to stop rooting for its
failure. Because hardworking, middle-class families are rooting for its
The Affordable Care Act gives people who’ve been stuck
with sky-high premiums because of preexisting conditions the chance to
get affordable insurance for the first time.
This law means that women can finally buy coverage that doesn’t charge them higher premiums than men for the same care.
And everyone who already has health insurance, whether
through your employer, Medicare, or Medicaid, will keep the benefits and
protections this law has already put in place. Three million more
young adults have health insurance on their parents’ plans because of
the Affordable Care Act. More than six million people on Medicare have
saved an average of $1,000 on their prescription medicine because of the
Affordable Care Act. Last year, more than 8 million Americans received
half a billion dollars in refunds from their insurers because of the
Affordable Care Act. And for tens of millions of women, preventive care
like mammograms and birth control are free because of the Affordable
That’s all part of this law, and it’s here to stay.
We did not fight so hard for this reform for so many years
just to build a website. We did it to free millions of American
families from the awful fear that one illness or injury – to yourself or
your child – might cost you everything you’d worked so hard to build.
We did it to cement the principle that in this country, the security of
health care is not a privilege for a fortunate few, but a right for
every one of us to enjoy. We have already delivered on part of that
promise, and we will not rest until the work is done.
A stern-faced Barack Obama bluntly chastised Congress on the
“unnecessary” damage done to America’s prestige and to its economy by
the budget and debt ceiling stand-off that was only resolved late
Thursday night and lectured members on stopping their habit of treating
government “as an enemy”.
“Let’s be clear, there are no winners here ,” said Mr Obama,
who just after midnight had signed the frantically negotiated stop-gap
bill to re-open America’s shuttered government and give the US Treasury
the authority to begin borrowing again. “The American people are
completely fed up with Washington.”
Barely was the
president’s ink dry on the bill ending the October agony than the four
members of a bi-partisan committee created by it to try to seek by 13
December a long-term solution to America’s spending priorities had a
first meeting amid public expressions of optimism but private feelings
of dread that its fate will be the same of so many committees before it:
deadlock, followed by more dysfunction.
Headed by two
members of the Senate and two members of the House from each of the
parties – Senator Patty Marray and Rep. Chris Van Hollen for the
Democrats and Senator Jeff Sessions and Rep. Paul Ryan for the
Republicans – the purpose of the committee is to bridge the gap between
draft budgets that their respective chambers put forward earlier this
year but which are separated by more than $90 billion in spending over
the fiscal year.
With their breakfast gathering, the four
members seemed intent on sending the message that Congress – as Mr
Obama was later to demand – was putting the stand-off behind it and
resuming its usual responsibilities.
what we’re doing here, we’re going back to regular order,” Mr Ryan, who
chairs the House Budget Committee, told reporters. “This is the budget
process… This is how the founders envisioned the budget process. We want
to get back to that. We haven’t had a budget conference since 2009 and
we so think it’s high time we start talking together trying to reconcile
But then Mr Ryan, who has a chance to
rebuild a standing that has slipped since he ran as number two on the
Republican ticket last year, added: “It’s premature to get into exactly
how we’re going to do that.”
No sooner will the hangover
of the last weeks clear in Washington than reality will set in that the
bill signed by Mr Obama is a reprieve and nothing more. If Mr Ryan and
his colleagues are not seen to make some progress quickly fear will
return that extremists in both parties will dig in. Thursday’s truce
extends the borrowing authority only until 7 February and provides money
for the budget only until mid-January.
But what ails
Washington is more than the just wide span of ideological differences.
It is also about the sheer difficulty of finding a way to address what
almost everyone – Mr Obama and the Democrats included – recognises must
be addressed, getting control of spending and deficits over the long
term, when one side is simply dead set against raising taxes and the
other side is similarly unable to countenance any serious curtailing of
government service and paring of the safety net, notably in social
security and Medicare.
Making things worse, as ever, are
the powerful lobby groups in town that threaten political oblivion to
politicians who don’t heed them. This is especially so for Republicans
often less in fear of Democrat challengers in their districts – the
mid-term congressional races are now less than a year away – than of
more extreme members of their own party preparing to challenge them in
the primaries that come first.
It was Heritage Action, a
right wing action group in Washington, warning conservative Republicans
not to support a version of a bill to end the stand-off tabled by
speaker John Boehner – and saying it would identify them if they did so
when they ran for re-election – that led to it falling apart on Tuesday
night. The result: the Senate stepped in with its bill that achieved
even less of what conservatives were seeking.
circumstances, any words, however wise, from Mr Obama on the need for
more bi-partisanship is unlikely to have any real impact. But, standing
in the state dining room in the White House, he delivered them anyway.
“Understand that how business is done in this town has to change,” he
said. “Let’s work together to make government work better instead of
treating it as enemy or purposefully making it worse.”
Murray nonetheless said it would be job of the newly created committee
to try. “Chairman Ryan knows I’m not going to vote for his budget, and I
know he’s not going to vote for mine,” she said at a press conference.
“We’re going to find the common ground between our two budgets that we
both can vote on and that’s our goal.”
While there was
global relief that the immediate crisis was over, China’s official
Xihhau news agency saw only further dysfunction ahead, declaring the
deal merely makes “the fuse of the US debt bomb one inch longer.” In
another of its increasingly scathing editorials about American political
deadlock it added: “Politicians in Washington have done nothing
substantial but postponing once again the final bankruptcy of global
confidence in the US financial system and the intactness of dollar
Federal workers return to posts
of thousands of federal workers headed back to work in the Washington
area after a 16-day government shutdown that barricaded national parks
and monuments; halted programmes serving veterans and cancer patients;
and cast an unnatural quiet onto America’s capital city.
the Metrorail system opened, eight-car-long trains were once again in
use after two weeks of six-car trains because of a decline in federal
The World War II Memorial was quiet save for a
handful of cameramen, an occasional jogger and Adam Schwartz, who waded
through the pool of water at the centre, sweeping the bottom clean with
Mr Schwartz had not been authorised to clean
the pool during the shutdown. He began work at 6am, scooping leaves and
dirt from the water. “The key is to make it crystal clear again,” Mr
Schwartz said. “For the veterans.”
THE PRESIDENT: Good morning, everybody. Please have a seat.
Well, last night, I signed legislation to reopen our government and
pay America’s bills. Because Democrats and responsible Republicans came
together, the first government shutdown in 17 years is now over. The
first default in more than 200 years will not happen. These twin
threats to our economy have now been lifted. And I want to thank those
Democrats and Republicans for getting together and ultimately getting
this job done.
Now, there’s been a lot of discussion lately of the politics of this
shutdown. But let’s be clear: There are no winners here. These last
few weeks have inflicted completely unnecessary damage on our economy.
We don’t know yet the full scope of the damage, but every analyst out
there believes it slowed our growth.
We know that families have gone without paychecks or services they
depend on. We know that potential homebuyers have gotten fewer
mortgages, and small business loans have been put on hold. We know that
consumers have cut back on spending, and that half of all CEOs say that
the shutdown and the threat of shutdown set back their plans to hire
over the next six months. We know that just the threat of default -- of
America not paying all the bills that we owe on time -- increased our
borrowing costs, which adds to our deficit.
And, of course, we know that the American people’s frustration with
what goes on in this town has never been higher. That's not a surprise
that the American people are completely fed up with Washington. At a
moment when our economic recovery demands more jobs, more momentum,
we've got yet another self-inflicted crisis that set our economy back.
And for what?
There was no economic rationale for all of this. Over the past four
years, our economy has been growing, our businesses have been creating
jobs, and our deficits have been cut in half. We hear some members who
pushed for the shutdown say they were doing it to save the American
economy -- but nothing has done more to undermine our economy these past
three years than the kind of tactics that create these manufactured
And you don’t have to take my word for it. The agency that put
America’s credit rating on watch the other day explicitly cited all of
this, saying that our economy “remains more dynamic and resilient” than
other advanced economies, and that the only thing putting us at risk is
-- and I'm quoting here -- “repeated brinksmanship.” That's what the
credit rating agency said. That wasn’t a political statement; that was
an analysis of what’s hurting our economy by people whose job it is to
analyze these things.
That also happens to be the view of our diplomats who’ve been hearing
from their counterparts internationally. Some of the same folks who
pushed for the shutdown and threatened default claim their actions were
needed to get America back on the right track, to make sure we're
strong. But probably nothing has done more damage to America's
credibility in the world, our standing with other countries, than the
spectacle that we've seen these past several weeks. It's encouraged our
enemies. It's emboldened our competitors. And it's depressed our
friends who look to us for steady leadership.
Now, the good news is we'll bounce back from this. We always do.
America is the bedrock of the global economy for a reason. We are the
indispensable nation that the rest of the world looks to as the safest
and most reliable place to invest -- something that’s made it easier for
generations of Americans to invest in their own futures. We have
earned that responsibility over more than two centuries because of the
dynamism of our economy and our entrepreneurs, the productivity of our
workers, but also because we keep our word and we meet our obligations.
That’s what full faith and credit means -- you can count on us.
And today, I want our people and our businesses and the rest of the
world to know that the full faith and credit of the United States
But to all my friends in Congress, understand that how business is
done in this town has to change. Because we've all got a lot of work to
do on behalf of the American people -- and that includes the hard work
of regaining their trust. Our system of self-government doesn’t
function without it. And now that the government is reopened, and this
threat to our economy is removed, all of us need to stop focusing on the
lobbyists and the bloggers and the talking heads on radio and the
professional activists who profit from conflict, and focus on what the
majority of Americans sent us here to do, and that’s grow this economy;
create good jobs; strengthen the middle class; educate our kids; lay the
foundation for broad-based prosperity and get our fiscal house in order
for the long haul. That’s why we're here. That should be our focus.
Now, that won't be easy. We all know that we have divided government
right now. There's a lot of noise out there, and the pressure from the
extremes affect how a lot of members of Congress see the day-to-day
work that’s supposed to be done here. And let's face it, the American
people don’t see every issue the same way. But that doesn’t mean we
can't make progress. And when we disagree, we don’t have to suggest
that the other side doesn’t love this country or believe in free
enterprise, or all the other rhetoric that seems to get worse every
single year. If we disagree on something, we can move on and focus on
the things we agree on, and get some stuff done.
Let me be specific about three places where I believe we can make
progress right now. First, in the coming days and weeks, we should sit
down and pursue a balanced approach to a responsible budget, a budget
that grows our economy faster and shrinks our long-term deficits
At the beginning of this year, that’s what both Democrats and
Republicans committed to doing. The Senate passed a budget; House
passed a budget; they were supposed to come together and negotiate. And
had one side not decided to pursue a strategy of brinksmanship, each
side could have gotten together and figured out, how do we shape a
budget that provides certainty to businesses and people who rely on
government, provides certainty to investors in our economy, and we’d be
growing faster right now.
Now, the good news is the legislation I signed yesterday now requires
Congress to do exactly that -- what it could have been doing all
And we shouldn’t approach this process of creating a budget as an
ideological exercise -- just cutting for the sake of cutting. The issue
is not growth versus fiscal responsibility -- we need both. We need a
budget that deals with the issues that most Americans are focused on:
creating more good jobs that pay better wages.
And remember, the deficit is getting smaller, not bigger. It’s going
down faster than it has in the last 50 years. The challenges we have
right now are not short-term deficits; it’s the long-term obligations
that we have around things like Medicare and Social Security. We want
to make sure those are there for future generations.
So the key now is a budget that cuts out the things that we don’t
need, closes corporate tax loopholes that don’t help create jobs, and
frees up resources for the things that do help us grow -- like education
and infrastructure and research. And these things historically have
not been partisan. And this shouldn’t be as difficult as it’s been in
past years because we already spend less than we did a few years ago.
Our deficits are half of what they were a few years ago. The debt
problems we have now are long term, and we can address them without
shortchanging our kids, or shortchanging our grandkids, or weakening the
security that current generations have earned from their hard work.
So that’s number one. Number two, we should finish fixing the job of
-- let me say that again. Number two, we should finish the job of
fixing our broken immigration system.
There's already a broad coalition across America that’s behind this
effort of comprehensive immigration reform -- from business leaders to
faith leaders to law enforcement. In fact, the Senate has already
passed a bill with strong bipartisan support that would make the biggest
commitment to border security in our history; would modernize our legal
immigration system; make sure everyone plays by the same rules, makes
sure that folks who came here illegally have to pay a fine, pay back
taxes, meet their responsibilities. That bill has already passed the
Senate. And economists estimate that if that bill becomes law, our
economy would be 5 percent larger two decades from now. That’s $1.4
trillion in new economic growth.
The majority of Americans think this is the right thing to do. And
it's sitting there waiting for the House to pass it. Now, if the House
has ideas on how to improve the Senate bill, let's hear them. Let's
start the negotiations. But let's not leave this problem to keep
festering for another year, or two years, or three years. This can and
should get done by the end of this year.
Number three, we should pass a farm bill, one that American farmers
and ranchers can depend on; one that protects vulnerable children and
adults in times of need; one that gives rural communities opportunities
to grow and the long-term certainty that they deserve.
Again, the Senate has already passed a solid bipartisan bill. It's
got support from Democrats and Republicans. It's sitting in the House
waiting for passage. If House Republicans have ideas that they think
would improve the farm bill, let's see them. Let's negotiate. What are
we waiting for? Let's get this done.
So, passing a budget; immigration reform; farm bill. Those are three
specific things that would make a huge difference in our economy right
now. And we could get them done by the end of the year if our focus is
on what's good for the American people. And that’s just the big stuff.
There are all kinds of other things that we could be doing that don’t
get as much attention.
I understand we will not suddenly agree on everything now that the
cloud of crisis has passed. Democrats and Republicans are far apart on a
lot of issues. And I recognize there are folks on the other side who
think that my policies are misguided -- that’s putting it mildly.
That’s okay. That’s democracy. That’s how it works. We can debate
those differences vigorously, passionately, in good faith, through the
normal democratic process.
And sometimes, we'll be just too far apart to forge an agreement.
But that should not hold back our efforts in areas where we do agree.
We shouldn’t fail to act on areas that we do agree or could agree just
because we don’t think it's good politics; just because the extremes in
our party don’t like the word “compromise.”
I will look for willing partners wherever I can to get important work
done. And there's no good reason why we can't govern responsibly,
despite our differences, without lurching from manufactured crisis to
manufactured crisis. In fact, one of the things that I hope all of us
have learned these past few weeks is that it turns out smart, effective
government is important. It matters. I think the American people
during this shutdown had a chance to get some idea of all the things,
large and small, that government does that make a difference in people's
We hear all the time about how government is the problem. Well, it
turns out we rely on it in a whole lot of ways. Not only does it keep
us strong through our military and our law enforcement, it plays a vital
role in caring for our seniors and our veterans, educating our kids,
making sure our workers are trained for the jobs that are being created,
arming our businesses with the best science and technology so they can
compete with companies from other countries. It plays a key role in
keeping our food and our toys and our workplaces safe. It helps folks
rebuild after a storm. It conserves our natural resources. It finances
startups. It helps to sell our products overseas. It provides
security to our diplomats abroad.
So let's work together to make government work better, instead of
treating it like an enemy or purposely making it work worse. That’s not
what the founders of this nation envisioned when they gave us the gift
of self-government. You don’t like a particular policy or a particular
president, then argue for your position. Go out there and win an
election. Push to change it. But don’t break it. Don’t break what our
predecessors spent over two centuries building. That's not being
faithful to what this country is about.
And that brings me to one last point. I’ve got a simple message for
all the dedicated and patriotic federal workers who’ve either worked
without pay or been forced off the job without pay these past few weeks,
including most of my own staff: Thank you. Thanks for your service.
Welcome back. What you do is important. It matters.
You defend our country overseas. You deliver benefits to our troops
who’ve earned them when they come home. You guard our borders. You
protect our civil rights. You help businesses grow and gain footholds
in overseas markets. You protect the air we breathe and the water our
children drink. And you push the boundaries of science and space, and
you guide hundreds of thousands of people each day through the glories
of this country. Thank you. What you do is important. And don't let
anybody else tell you different. Especially the young people who come
to this city to serve -- believe that it matters. Well, you know what,
you’re right. It does.
And those of us who have the privilege to serve this country have an
obligation to do our job as best we can. We come from different
parties, but we are Americans first. And that’s why disagreement cannot
mean dysfunction. It can't degenerate into hatred. The American
people’s hopes and dreams are what matters, not ours. Our obligations
are to them. Our regard for them compels us all, Democrats and
Republicans, to cooperate, and compromise, and act in the best interests
of our nation –- one nation, under God, indivisible with liberty and
justice for all.
Sixteen days and $24 billion in damage to the economy later,
the House voted to end the government shutdown and raise the debt
ceiling – sending a bill already approved by the Senate on to President
Barack Obama, who said he plans to sign it immediately. The House voted 285 to 144 to pass the bill.
The vote ends a weeks-long stalemate that began as a fight over
the president’s health care law, which was barely touched in the deal
passed Wednesday – a far cry from the complete defunding of the law that
Republicans wanted at the start.
The White House told federal workers to plan to return to work Thursday morning.
“Once this agreement arrives on my desk I will sign it
immediately, we will begin reopening our government immediately, and we
can begin to lift this cloud of uncertainty and unease from our
businesses and from the American people,” Obama said just before the
House vote. Asked by a reporter as Obama walked away whether Congress would
only force another shutdown in a few months when the Senate deal
expires, Obama replied simply, “No.”
Details of the plan were hammered out between Democrats and Republicans in the Senate. The bill will fund the government through January 15, raise the
debt ceiling until February 7, and restore back pay to federal workers
affected by the shutdown. It touches on Obamacare in only one minor way,
by strengthening its income verification procedure for insurance
subsidies, a tweak supported by the White House. The deal also sets up a
budget conference between the House and Senate to work out a larger
spending deal by December 13, a negotiating structure that Democrats
have demanded for months.
Senate Majority Leader Harry Reid thanked Republicans, including Minority Leader Mitch McConnell, for striking a deal.
“Averting this crisis is historic,” Senate Majority Leader Harry Reid
said. “Let’s be honest. This is pain inflicted on our nation for no
“We cannot make this mistake again as we go into the next round of negotiations,” Reid said.
A strong majority of 81 senators voted for the deal;
18 opposed. Those voting “no” included Senators Ted Cruz, Mike Lee,
Marco Rubio, and Rand Paul, four of the most prominent Republicans who
backed the defund strategy that provoked the shutdown.
Boehner announced earlier in the day he believed the bill would clear the House.
“The House has fought with everything it has to convince the
president of the United States to engage in bipartisan negotiations
aimed at addressing our country’s debt and providing fairness for the
American people under Obamacare,” Boehner said in a statement. “That
fight will continue. But blocking the bipartisan agreement reached today
by the members of the Senate will not be a tactic for us.”
Boehner’s announcement came after a brief meeting with his conference
in the House basement, where participants said he was greeted with an
immediate standing ovation. Despite the warm reception, his decision
confirms that the party will move on from the debt ceiling and shutdown
fights with no significant concessions whatsoever after they tried to
defund, then delay the president’s health care law.
Senate leaders Reid and Mitch McConnell announced the deal to
end the shutdown and raise the debt ceiling early Wednesday afternoon in
successive speeches. Removing a key obstacle to passage, Senator Ted
Cruz said shortly afterwards that he would not use procedural tricks to
delay a vote past the October 17 deadline to raise the debt ceiling, a
move that could have put the nation at risk of default.
Speaking from the Senate floor, McConnell acknowledged that his
party had fallen far short of its initial goals of blocking the
Affordable Care Act, but urged members to unite behind him.
“Republicans remain determined to repeal this terrible law,”
McConnell said in a speech from the Senate floor. “But for today… the
relief we hope for is to reopen the govenrment, avoid default, and
protect the historic cuts we achieved under the Budget Control Act.”
Boehner’s own plan imploded Tuesday night when warring factions in his conference made a deal impossible.
In a dramatic defeat, Boehner scrapped a bill that
would raise the debt ceiling, end the shutdown, and secure minor
changes to the Affordable Care Act. The proposal was a last-ditch plan
by Boehner to end the standoff with some shred of dignity before Senate
leaders reached a bipartisan deal with even more modest Obamacare
changes. But House conservatives, backed by the influential Heritage
Foundation, rebelled and refused to support the measure, decrying it as
too weak on the president’s health care law.
Fitch Ratings warns it could cut the US sovereign credit rating for failure of political leaders to raise debt ceiling.
House Republican efforts to pass legislation averting a US debt
default and ending a partial government shutdown have collapsed, and a
top ratings firm warned of a possible downgrade in the country's
Just hours after unveiling it on Tuesday, Republican leaders -
apparently lacking votes from their own rank-and-file - pulled
legislation to reopen the government and raise the amount of money the
Treasury can borrow to pay the nation's bills.
The setback came just two day before the Obama administration says the government will be out of money to pay debts.
The wrangling in the House had imposed a daylong freeze on Senate
negotiations on a bipartisan compromise that had appeared ready to bear
fruit a day earlier.
Shortly after the House efforts fell apart, aides said Senate leaders
had renewed talks to reopen the government and prevent a default.
House Republican leaders had unveiled a bill to allow the Treasury to
borrow normally until Feb. 7 and to reopen the government with
sufficient funds to carry it to Dec 15.
A spokesman for House Speaker John Boehner had said it would be put
to a vote Tuesday night. But the bill had been stripped of key
conservative demands related to President Barack Obama's healthcare
plan, and Boehner soon pulled it.
The New York Stock Exchange fell 133 points after rising a day earlier when optimism spread that a deal might be at hand.
Bond rating on watch
Fitch Ratings announced after the markets closed that it was putting
the government's AAA bond rating on watch because of uncertainty over
the debt limit.
Fitch, one of the three leading US credit ratings agencies, said it
expects the debt limit will be raised soon, but added, "the political
brinkmanship and reduced financing flexibility could increase the risk
of a US default."
The partial shutdown began 15 days ago after House Republicans
refused to accept a temporary funding measure to provide the money to
run the government unless Obama agreed to defund or delay his signature
House Republicans also refused to move on needed approval for raising
the amount of money the Treasury can borrow to pay the nation's bills.
House Republicans have since dropped their demands to defund or delay the healthcare law, known as Obamacare.
The latest House proposal had also done away with plan to delay a
medical device tax created under the health law, and another provision
to impose tougher income verification standards on individuals and
families seeking subsidies for care under the law.
Democrats had viewed both as concessions to Republicans, and deemed
their inclusion as a violation of Obama's vow not to pay a "ransom" to
the Republicans for passing essential funding and borrowing measures.
The House measure would have kept one provision linked to the
healthcare plan: Members of Congress, the president, vice president and
thousands of aides would no longer be eligible to receive employer
healthcare contributions from the government that employs them.
Congress is trying to pass two measures that are normally routine: A
temporary funding bill to keep the government running and the
legislation to raise the borrowing limit.
But a hard-right tea party faction of Republicans in the House has
seen both deadlines as a weapon to get their way on gutting the
healthcare overhaul, designed to provide tens of millions of uninsured
Americans with coverage.
President Barack Obama Weekly Address The White House October 12, 2013
Good morning. Over the past few days, I’ve met with Republicans and
Democrats from both houses of Congress in an effort to reopen your
government and remove the dangers of default from our economy. It’s a
positive development that House Republicans have agreed on the need to
avoid the economic consequences of not meeting our country’s
Because once the debt ceiling is raised, and the shutdown
is over, there’s a lot we can accomplish together. We’ve created seven
and a half million new jobs in the past three and a half years. Now
let’s create more. We’ve cut our deficits in half over the past four
years. Now let’s do it in a smarter, balanced way that lets us afford to
invest in the things we need to grow. The truth is, there’s a lot we
can agree on. But one thing we have to agree on is that there is no good
reason anyone should keep suffering through this shutdown. I met with
some really innovative small business owners on Friday who’ve already
lost contracts, lost customers, and put hiring on hold – because the
pain of this Republican shutdown has trickled down to their bottom
lines. It’s hurting the very citizens that our government exists to
That’s why a growing number of reasonable Republicans say it
should end now. And it wouldn’t be wise, as some suggest, to just kick
the debt ceiling can down the road for a couple months, and flirt with a
first-ever intentional default right in the middle of the holiday
shopping season. Because damage to America’s sterling credit rating
wouldn’t just cause global markets to go haywire; it would become more
expensive for everyone in America to borrow money. Students paying for
college. Newlyweds buying a home. It would amount to a new tax – a
Republican default tax – on every family and business in America. It
doesn’t have to be this way. It’s not supposed to be this way.
Manufacturing crises to extract massive concessions isn’t how our
democracy works, and we have to stop it. Politics is a battle of ideas,
but you advance those ideas through elections and legislation – not
extortion. I know you’re frustrated by what you see in your nation’s
capital right now. But because it’s easy to get lost in or give up on
the political back-and-forth, I want you to remember: this is not
normal. Our government is closed for the first time in 17 years. A
political party is risking default for the first time since the 1700s.
This is not normal. That’s why we have to put a stop to it. Not only
because it’s dangerous, but because it saps everyone’s faith in our
extraordinary system of self-government. And that hurts us all.
it’s the work of creating jobs, growing the economy, or getting our
fiscal house in order for the long haul, we’ve got a lot of work to do –
and constant brinksmanship doesn’t let us do it. It inflicts real pain
on real people. It creates spasms of uncertainty for business owners. It
threatens our nation’s credit and standing in the world. And the longer
it goes on – the more frequently this brinksmanship is inflicted – the
more we’ll see markets react, businesses put off plans to spend and
hire, and unemployment claims tick up. The hundreds of thousands of
hardworking civil servants who go even longer without pay will worry
that they won’t be able to cover their bills, and that their own
creditworthiness will be ruined for no good reason at all. And I want to
thank all the neighbors and local business owners who’ve shown acts of
kindness to these Americans who serve their country. I ask that same
spirit of citizenship from lenders who do business with these folks.
Because they’re being punished enough through no fault of their own. So
let’s pass a budget, put people back to work, and end this Republican
shutdown. Let’s pay our bills, and prevent an economic shutdown. Then
let’s get back to the work of the American people. Because there is so
much else we should be focusing our energies on right now. We’ve got to
create more jobs, and kids to educate, and an immigration system to fix.
We’ve got more troops to bring home, and a middle class to rebuild, and
opportunity to restore. There’s so much America has going for it in
this new century. And as always, this country works better when we work
together. Thank you, and have a great weekend.
The Republican Party has been "badly damaged" by the government shutdown, according to an NBC/Wall Street Journal poll released Thursday evening, which finds public opinion souring on the GOP and some of its core positions.
Americans blamed Republicans over President Barack Obama for the shutdown by a margin of 22 percentage points, with 53 percent saying the GOP deserved more blame, and 31 percent saying Obama did. Approval ratings for the Republican Party and the tea party were at 24 percent and 21 percent respectively -- both record lows as measured by NBC/WSJ.
Democrats aren't wildly popular either. Obama's approval rating is a marginally positive 47 percent, while the Democratic Party is at 39 percent, and congressional Democrats are at 36 percent.
A slim plurality of Americans say Obama should negotiate with Republicans, even before they agree to a deal that reopens the government or raises the debt ceiling. The president's approval has remained stable since the shutdown, and there are signs that Democrats may get a boost from the shutdown's political effects.
Voters were 8 points more likely to say they'd prefer a Democratic-controlled Congress over a Republican-controlled Congress, a 5-point shift toward the Democrats since last month. Support for the new health care law, the touchstone of the government shutdown, rose a net 8 points from September, while the belief that government should do more to solve problems was up 8 points from June.
“That is an ideological boomerang,” Bill McInturff, the GOP pollster who conducts the NBC/WSJ poll along with Democratic pollster Peter Hart, told NBC. “As the debate has been going on, if there is a break, there is a break against the Republican position.”
The poll found that 42 percent think the economy will worsen over the next year, nearly doubling since September, and nearly eight in 10 think the country is on the wrong track. The number who think the country is on the right track has fallen by half since September.
WSJ/NBC pollsters said the survey showed some of the most dramatic shifts they had seen in decades in public attitudes toward the well-being of the country, the direction of the economy and wider political sentiment, according to the Journal.
"What is stunning about these results is just how hard and how quickly public attitudes have landed on the shutdown," said Hart, a Democratic pollster, according to the Journal. He said the poll showed "a broad disgust for the political system."
The NBC/WSJ's findings are largely in line with other recent polling, but with some differences. A Gallup survey released Wednesday found the Republicans' favorable rating the lowest for either party since 1992. While an AP-GfK poll found the president, as well as Congress, taking a serious approval hit, other surveys found Obama's approval either stable or down by 1 or 2 percentage points.
Polls on who's to blame for the shutdown have generally shown Republicans being faulted most, but the margin varies, with some surveys last week showing the blame more evenly distributed.
In a SPIEGEL interview, political economist and icon of the American left Robert Reich urges President Obama to stand his ground on the country's budget crisis. He also calls for drastic tax increases for the rich to fight growing inequality. SPIEGEL: The world is mesmerized by the spectacle of the government shutdown in Washington. To you, however, this must seem like déjà vu.
SPIEGEL: The world is mesmerized by the spectacle of the government shutdown in Washington. To you, however, this must seem like déjà vu.
Reich: When I was secretary of labor under President Bill Clinton, we lived through the last shutdown of the US government, in 1995. I had to tell 15,000 people that they had to go home, and I didn't know when they would be paid. It was terrible, and we didn't know how long it would last.
SPIEGEL: Since then, the political culture in the US has become even more radicalized.
Reich: The members of the Tea Party are much more radical and extreme. Some of them really have contempt for the entire process of government. They're followers of people who say that we ought to shrink government down to the size that it can drown in a bathtub. They hate government viscerally. They're not in Washington to govern; they're in Washington to tear it down.
SPIEGEL: The shutdown is hurting the entire country, and there is no telling how this will effect financial markets and still-shaky economic growth. Will President Obama ultimately have to aim for a compromise?
Reich: This bill passed both houses of Congress, was enacted by the president, signed into law by the president, certified as constitutional by the Supreme Court. But instead of going through a normal legislative process of amending a piece of legislation to delay it or change it or even repeal it, the Republicans simply say: "We are going to hold the entire government of the United States ransom unless we get our way." You can't negotiate with extortionists.
SPIEGEL: Clinton won re-election after the last shutdown because the American public largely blamed the Republicans. Could Obama eventually end up the big winner in all of this, as well?
Reich: It's much more difficult. Today, you have many more Republican members of Congress in safe districts, so they're not worried about the voters being angry with them. And many of them are bankrolled by some of the richest Americans, often billionaires. They have the resources to support the demand to shrink the government. America has become the most unequal society among advanced countries, and rich people are now free to spend as much money on political campaigns as they wish.
SPIEGEL: That is the main theme of your documentary "Inequality for All," which is already being touted as an Oscar contender. In it, you paint a grim picture of the US as a country torn apart, and you warn about dramatic consequences for the economy. Are things really that bad?
Reich: The economic divide has rarely been as pronounced. The typical male worker in the US was making $48,078 (€35,400) a year in 1978; now this average annual salary is down to $39,000. At the same, the net worth of the 400 richest Americans is higher than that of 150 million Americans combined.
SPIEGEL: The idea of getting rich used to be a basic element of the "American Dream." Whoever succeeded in becoming a millionaire was admired rather than reviled.
Reich: We used to be so proud that our country offered far more economic opportunities than the feudal system in Great Britain, with its royal family, princesses and dukes. But today, social mobility in the UK is higher than in the US. Our social rift is as big as it was in the 1920s.
SPIEGEL: This didn't happen overnight; it has been decades in the making. Why was the protest against it muted for so long?
Reich: Most Americans stopped looking at what was happening through a variety of coping mechanisms -- starting with women entering paid work and then everyone working longer hours and using their homes for raising equity and generating more money through debt. The typical household basically staved off the day of reckoning. But all those coping mechanisms are now gone, and we have an economy where the median household has got to face the reality that wages are actually declining in real terms adjusted for inflation. The second reason has to do with the direct consequences of wealth in politics. The super-rich not only poured their money into politics directly but poured money into think tanks and public relations campaigns.
SPIEGEL: To say what?
Reich: To tell the public big lies, for example, that if you lower taxes on the wealthy and allow them to become even wealthier, the gains will trickle down to everybody else.
SPIEGEL: But didn't President Kennedy say "A rising tide lifts all boats"?
Reich: Well, that sounds very nice; but it never actually happened. And people are beginning to catch on to the fact that it was a big lie. The super-rich also insisted that income from investments should be taxed less than wages. That is why Warren Buffett pays a lower tax rate than his secretary. And there were related lies, like the message that you have to reduce taxes on corporations and the super-rich for them to create jobs.
SPIEGEL: But the top earners are also responsible for the largest share of tax receipts. And when wealthy people spend more, the whole economy benefits.
Reich: Only that they do not. A super-rich person featured in my movie puts it this way: "Even the richest person sleeps on only one or two pillows." The reality is that the major job creators in any economy are the people who buy, the vast middle class and the poor; if you reduce their share of the economy and yet productivity gains continue, they simply are not going to be able to buy enough to keep the economy going at or near full employment unless you have a huge net export market, which we do not have.
SPIEGEL: Your suggestion is to dramatically increase taxes. But would that not curb demand as well? In Germany, that is one of the strong arguments against government plans to raise taxes on wealthy citizens after the election.
Reich: It is a myth that higher taxes lead to less demand and slower growth. In the first three decades after World War II, US top tax rates on the wealthy were never below 70 percent. Under President Dwight D. Eisenhower, it rose to 91 percent. And the economy grew faster in those years than it has grown after President Reagan radically lowered taxes on the wealthy, partly because we heavily invested in infrastructure and education back then, which is essential to economic growth.
SPIEGEL: These days, the top tax rates are drastically lower, average earners have sinking incomes and the middle class has more and more burdens. Why hasn't a group of fed-up Americans taken to the streets to express their outrage?
Reich: There was one. It was called the Occupy movement.
SPIEGEL: But it petered out quickly, while the Tea Party is still a political factor. Has the American left lost its fighting spirit?
Reich: The Tea Party movement was bankrolled by some very wealthy people. And that bankrolling enabled it to do what the Occupy movement could never do, and that is develop a political strategy and organization. But there is some fatalism, true. One of the goals of the right in America is to make the American public so cynical about government that they give up caring.
SPIEGEL: That strategy appears to be working.
Reich: It works to a point. Social change occurs when the gap between the ideals that people hold and the reality that they see every day gets too large. So even though people may be cynical about government, there will soon be an upsurge of demand for change.
SPIEGEL: Are you trying to accelerate that process with your movie?
Reich: Look. I am a person of short stature; I was bullied constantly when I was growing up. Therefore, I have always wanted to stand up for the little guy. I am not so self-important to believe that I can solve this huge problem alone. The question is if my movie can help catalyze something that's just below the surface. If you look at the mayoral campaign of Bill de Blasio in New York, you'll see social inequality is front and center ...
SPIEGEL: The Democratic candidate has pledged to raise taxes on the rich to finance better schools for everybody else.
Reich: And that in New York, the financial capital of the world! And de Blasio is likely to win! Also, if you look at the strikes of Wal-Mart and fast-food workers around the country, there are a lot of indications that people are fed up with where things are and want fundamental change.
SPIEGEL: Still, that's far from meaning that these sentiments will also lead to political outcomes. Directly after the financial crisis erupted, there was an enormous amount of rage at the complex of Wall Street, corporations and Congress. Obama had a unique opportunity to tackle that complex …
Reich: … and he squandered it. Obama should have put far more conditions on the banks that received the bailouts. He should have told them: "You've got to agree to some severe regulations like resurrecting the Glass-Steagall Act" -- which separated investment from commercial banking -- "and you've got to refrain from providing big bonuses for your executives."
SPIEGEL: Why wasn't Obama able to get his way?
Reich: His administration has been too close to Wall Street. Too many Obama administration officials have worked on Wall Street; too many are leaving to go to Wall Street. And Wall Street is simply not attuned to the needs of average working Americans. SPIEGEL: Wall Street is no longer the dominant industry in the US. Silicon Valley and brands like Google, Apple and Facebook have become the backbone of the American economy.
Reich: I am not so sure if that is a great development. Look more closely where the jobs are created and the profits flow. You would think that a hugely profitable company like Apple employs hundreds of thousands of people in the US. Actually, it's not even 50,000. You would also think that software giant Microsoft would pay taxes on its profits in the US. But Microsoft just bought Nokia. Why? Well, Microsoft has a huge amount of money offshore. It doesn't want to bring it home because it doesn't want to pay taxes. So buying another company is a better way to spend that money. But that doesn't help American middle class families, and it aggravates inequality here.
SPIEGEL: But isn't a certain degree of inequality also the price a country has to pay for innovation? Doesn't the incentive of great wealth foster risk-taking and creativity?
Reich: A little inequality fosters innovation, true. But there are limits. Does somebody need an annual income of $20 million to be innovative? Somebody's going to be very innovative at $10 million a year. And I am sure Mark Zuckerberg did not create Facebook to become a multi-billionaire.
SPIEGEL: Compared with how things are today, the years when Bill Clinton was president seem downright heavenly. The economy was growing; the budget was balanced. But you resigned after one term as secretary of labor. Do you regret doing so?
Reich: I was frustrated. Even though the economy did really well in these years, we didn't fundamentally change the trend toward wider income inequality. SPIEGEL: There is a lot of chatter about a potential 2016 presidential campaign by Hillary Clinton. Could she be the kind of progressive president that her husband and Obama were not?
Reich: Perhaps. I worked very closely with her over the years.
SPIEGEL: More than that! You even dated her.
Reich: We once went out to see a movie when we both went to law school at Yale. It was one date which I did not even remember until a reporter called me about it a few years ago. But, honestly, I have enormous respect for her. However, she is wise enough to understand that a president can only lead to some extent.
SPIEGEL: Why is that?
Reich: One of the biggest problems in this country is that we are losing the intermediary organizations, such as strong labor unions. They were the backbone of our economic and democratic system, and now just 11 percent of our workforce is still unionized. Instead, we have national parties that are nothing more than fundraising devices -- and officeholders who are constantly out there trying to sell themselves, literally.
THE PRESIDENT: Good afternoon, everybody. I am eager to take your questions, so I’ll try to be brief at the top.
This morning, I had a chance to speak with Speaker Boehner, and I told him what I've been saying publicly, that I am happy to talk with him and other Republicans about anything -- not just issues I think are important, but also issues that they think are important. But I also told him that having such a conversation, talks, negotiations, shouldn’t require hanging the threats of a government shutdown or economic chaos over the heads of the American people.
Think about it this way. The American people do not get to demand a ransom for doing their jobs. You don't get a chance to call your bank and say, “I’m not going to pay my mortgage this month unless you throw in a new car and an Xbox. If you’re in negotiations around buying somebody’s house, you don't get to say “Well, let’s talk about the price I'm going to pay, and if you don't give me the price then I'm going to burn down your house.”
That’s not how negotiations work. That's not how it happens in business; it’s not how it happens in private life. In the same way, members of Congress -- and the House Republicans, in particular -- don’t get to demand ransom in exchange for doing their jobs. And two of their very basic jobs are passing a budget and making sure that America is paying its bills.
They don't also get to say, “Unless you give me what the voters rejected in the last election, I'm going to cause a recession.” That's not how it works. No American President would deal with a foreign leader like this. Most of you would not deal with either coworkers or business associates in this fashion, and we shouldn’t be dealing this way here in Washington.
And I've heard Republicans suggest that, well, no, this is reasonable, this is entirely appropriate. But as I've said before, imagine if a Democratic Congress threatened to crash the global economy unless a Republican President agreed to gun background checks or immigration reform? I think it’s fair to say that Republicans would not think that was appropriate.
So let’s lift these threats from our families and our businesses, and let’s get down to work.
It’s not like this is a new position that I'm taking here. I had Speaker Boehner and the other leaders in just last week. Either my Chief of Staff or I have had serious conversations on the budget with Republicans more than 20 times since March. So we've been talking all kinds of business. What we haven’t been able to get are serious positions from the Republicans that would allow us to actually resolve some core differences. And they have decided to run out the clock until there’s a government shutdown or the possibility of default, thinking that it would give them more leverage. That's not my characterization; they’ve said it themselves. That was their strategy from the start. And that is not how our government is supposed to run.
It’s not just me, by the way, who has taken the position that we're willing to have conversations about anything. Senate Democrats have asked to sit down with House Republicans and hash out a budget, but have been rejected by the House Republicans 19 times. At the beginning of this year, Speaker Boehner said, what we want is regular order and a serious budget process, so the Senate should pass a bill and the House should pass a bill. And then, a committee comes together and they hash out their differences, and they send a bill to the President. Well, that's exactly what Democrats did. Except somewhere along the way, House Republicans decided they wouldn't appoint people to the committee to try to negotiate. And 19 times, they've rejected that.
So even after all that, the Democrats in the Senate still passed a budget that effectively reflects Republican priorities, at Republican budget levels, just to keep the government open. And the House Republicans couldn't do that either.
The point is I think not only the White House, but also Democrats in the Senate and Democrats in the House have shown more than ample willingness to talk about any issues that the Republicans are concerned about. But we can't do it if the entire basis of the Republican strategy is, we're going to shut down the government or cause economic chaos if we don't get 100 percent of what we want.
So my suggestion to the Speaker has been and will continue to be let’s stop the excuses. Let's take a vote in the House. Let's end this shutdown right now. Let's put people back to work. There are enough reasonable Republicans and Democrats in the House who are willing to vote yes on a budget that the Senate has already passed. That vote could take place today. The shutdown would be over. Then, serious negotiations could proceed around every item in the budget.
Now, as soon as Congress votes to reopen the government, it's also got to vote to meet our country’s commitments -- pay our bills; raise the debt ceiling. Because as reckless as a government shutdown is, the economic shutdown caused by America defaulting would be dramatically worse.
And I want to talk about this for a minute, because even though people can see and feel the effects of a government shutdown -- they're already experiencing it right now -- there are still some people out there who don’t believe that default is a real thing. And we've been hearing that from some Republicans in Congress that default would not be a big deal. So let me explain this.
If Congress refuses to raise what's called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years. And because it's called “raising the debt ceiling,” I think a lot of Americans think it's raising our debt. It is not raising our debt. This does not add a dime to our debt. It simply says, you pay for what Congress has already authorized America to purchase. Whether that's the greatest military in the world, or veterans benefits, or Social Security -- whatever it is that Congress has already authorized, what this does is make sure that we can pay those bills.
Now, the last time that the tea party Republicans flirted with the idea of default two years ago, markets plunged, business and consumer confidence plunged, America’s credit rating was downgraded for the first time. And a decision to actually go through with it, to actually permit default, according to many CEOs and economists, would be -- and I'm quoting here -- “insane,” “catastrophic,” “chaos." These are some of the more polite words.
Warren Buffett likened default to a nuclear bomb, a weapon too horrible to use. It would disrupt markets. It would undermine the world’s confidence in America as the bedrock of the global economy. And it might permanently increase our borrowing costs -- which, of course, ironically would mean that it would be more expensive for us to service what debt we do have, and it would add to our deficits and our debt, not decrease them. There's nothing fiscally responsible about that.
Preventing this should be simple. As I said, "raising the debt ceiling” is a lousy name, which is why members of Congress in both parties don’t like to vote on it, because it makes you vulnerable in political campaigns. But it does not increase our debt. It does not grow our deficits. It does not allow for a single dime of increased spending. All it does is allow the Treasury Department to pay for what Congress has already spent.
But, as I said, it's always a tough vote. People don’t like doing it -- although it has been done 45 times since Ronald Reagan took office. Nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years. And this is the creditworthiness of the United States that we're talking about. This is our word. This is our good name. This is real.
In a government shutdown, millions of Americans face inconvenience or outright hardship. In an economic shutdown, every American could see their 401ks and home values fall; borrowing costs for mortgages and student loans rise. And there would be a significant risk of a very deep recession at a time when we're still climbing our way out of the worst recession in our lifetimes. The American people have already fought too hard and too long to come back from one crisis only to see a handful of more extreme Republicans in the House of Representatives precipitate another one.
Now, the good news is, over the past three and a half years, our businesses have created 7.5 million new jobs. Our housing market is healing. We’ve cut the deficit in half since I took office. The deficit is coming down faster than any time in the last 50 years. America is poised to become the number-one energy producer in the world this year. This year, for the first time in a very long time, we’re producing more oil than we’re importing.
So we’ve got a lot of good things going for us. But the uncertainty caused by just one week of this nonsense so far has caused businesses to reconsider spending and hiring. You’ve seen consumer confidence plunge to the lowest level since 2008. You’ve seen mortgages held up by thousands of homebuyers who weren’t sure about the economic situation out there. And all this adds to our deficits; it doesn’t subtract from it.
So we can’t afford these manufactured crises every few months. And as I said, this one isn’t even about deficits or spending or budgets. Our deficits are falling at the fastest pace in 60 years. The budget that the Senate passed is at Republican spending levels. It’s their budget that Democrats were willing to put votes on just to make sure the government was open while negotiations took place for a longer-term budget.
And what’s happened -- the way we got to this point was one thing and one thing only, and that was Republican obsession with dismantling the Affordable Care Act and denying health care to millions of Americans. That law, ironically, is moving forward.
So most Americans -- Democrats and Republicans -- agree that health care should not have anything to do with keeping our government open or paying our bills on time -- which is why I will sit down and work with anyone of any party not only to talk about the budget, I’ll talk about ways to improve the health care system. I’ll talk about ways that we can shrink our long-term deficits. I’ll also want to talk about how we’re going to help the middle class and strengthen early childhood education, and improve our infrastructure, and research and development. There are a whole bunch of things I want to talk about in terms of how we’re going to make sure that everybody is getting a fair shake in this society, and that our economy is growing in a broad-based way and building our middle class.
And, by the way, if anybody doubts my sincerity about that, I’ve even put forward proposals in my budget to reform entitlement programs for the long haul, and reform our tax code in a way that would close loopholes for the wealthiest and lower rates for corporations and help us invest in new jobs and reduce our deficits. And some of these were originally Republican proposals, because I don’t believe any party has a monopoly on good ideas. So I’ve shown myself willing to go more than halfway in these conversations.
And if reasonable Republicans want to talk about these things again, I’m ready to head up to the Hill and try. I’ll even spring for dinner again. But I’m not going to do it until the more extreme parts of the Republican Party stop forcing John Boehner to issue threats about our economy. We can’t make extortion routine as part of our democracy. Democracy doesn’t function this way.
And this is not just for me. It’s also for my successors in office, whatever party they’re from -- they shouldn’t have to pay ransom either for Congress doing its basic job. We’ve got to put a stop to it.
The last point I’ll make -- already this week, I had to miss critical meetings in Asia to promote American jobs and businesses. And although, as long as we get this fixed, that’s not long-term damage, whenever we do these things, it hurts our credibility around the world. It makes it look like we don’t have our act together. And that’s not something we should welcome. The greatest nation on Earth shouldn’t have to get permission from a few irresponsible members of Congress every couple of months just to keep our government open or to prevent an economic catastrophe. So let’s pass a budget. Let’s end this government shutdown. Let’s pay our bills. Let’s avert an economic shutdown. Let’s drop the gimmicks, put aside what’s good for any particular party, and let’s focus on what’s good for the American people because they know we’ve got a lot of work to do.
All right? So with that, let me take a couple of questions, and I will start with Julie Pace of AP.
Q Thank you, Mr. President. Obviously, if Congress does pass a clean CR and a clean debt ceiling bill, those may just be short-term measures.
THE PRESIDENT: Yes.
Q If that happens, does your offer to negotiate with them on issues like health care and spending and deficit reduction still stand in the intervening weeks if they pass measures that are just perhaps six weeks or two months long?
THE PRESIDENT: Absolutely. I mean, what I’ve said is that I will talk about anything. What will happen is we won’t agree on everything. I mean, the truth is, is that the parties are pretty divided on a whole bunch of big issues right now. Everybody understands that. And by the way, voters are divided on a lot of those issues, too. And I recognize that there are some House members, Republican House members, where I got clobbered in the last election, and they don’t get politically rewarded a lot for being seen as negotiating with me. And that makes it harder for divided government to come together.
But I am willing to work through all those issues. The only thing that our democracy can’t afford is a situation where one side says, unless I get my way, and only my way, unless I get concessions before we even start having a serious give-and-take, I’ll threaten to shut down the government or I will threaten to not pay America’s bills.
So I will not eliminate any topic of conversation. And I’ve shown myself willing to engage all the parties involved, every leader, on any issue.
Q And that applies no matter how long the time frame is on the debt ceiling bill that they would pass?
THE PRESIDENT: The only thing that I will say is that we’re not going to pay a ransom for America paying its bills. That’s something that should be non-negotiable. And everybody should agree on that. Everybody should say one of the most valuable things we have is America’s creditworthiness. This is not something we should even come close to fooling around with.
And so when I read people saying, oh, this wouldn’t be a big deal, we should test it out; let’s take default out for a spin and see how it rides -- and I say, imagine in your private life if you decided that, I’m not going to pay my mortgage for a month or two. First of all, you’re not saving money by not paying your mortgage; you’re just a deadbeat. And you can anticipate that will hurt your credit, which means that in addition to debt collectors calling, you’re going to have trouble borrowing in the future. And if you are able to borrow in the future, you’re going to have to borrow at a higher rate.
Well, what’s true for individuals is also true for nations -- even the most powerful nation on Earth. And if we are creating an atmosphere in which people are not sure whether or not we pay our bills on time, then that will have a severe long-term impact on our economy and on America’s standard of living. And that’s not something that we should even be in a conversation about. That is not something that we should be using as leverage.
Okay. Julianna Goldman.
Q Thank you, Mr. President. You laid out the economic consequences of default, but if we were to get to that point, would you prioritize and pay bondholders first to maintain the semblance of credit or -- rather than Social Security recipients or military servicemen and women? And how would you go ahead and make that determination?
THE PRESIDENT: I am going to continue to be very hopeful that Congress does not put us in that position. And I think if people understand what the consequences are, they will set that potential scenario aside.
I do know that there have been some who have said that if we just pay bondholders, if we just pay people who have bought Treasury bills that we really won’t be in default because those interest payments will be made. And to them, what I have to remind them is we’ve got a lot of other obligations, not just people who pay Treasury bills. We’ve got senior citizens who are counting on their Social Security check arriving on time. We have veterans who are disabled who are counting on their benefits. We have companies who are doing business for our government and for our military that have payrolls that they have to meet, and if they do not get paid on time, they may have to lay off workers. All those folks are potentially affected if we are not able to pay all of our bills on time.
What's also true is if the markets are seeing that we're not paying all our bills on time that will affect our creditworthiness even if some people are being paid on time. So, again, just to boil this down to personal examples, if you've got a mortgage, a car note and a student loan that you have to pay, and you say, well, I'm going to make sure I pay my mortgage, but I'm not going to pay my student loan or my car note, that's still going to have an impact on your credit. Everybody is still going to look at that and say, you know what, I'm not sure this person is that trustworthy. At a minimum, presumably, they're going to charge a higher interest rate. That's what would happen to you if you made those decisions. Well, the same is true for the federal government.
So we are exploring all contingencies. I know that Secretary Lew, the Secretary of the Treasury, will be appearing before Congress on Thursday, and he can address some of the additional details about this. But let me be clear: No option is good in that scenario. There’s no silver bullet. There’s no magic wand that allows us to wish away the chaos that could result if, for the first time in our history, we don't pay our bills on time.
And when I hear people trying to downplay the consequences of that, I think that's really irresponsible. And I'm happy to talk to any of them individually and walk them through exactly why it's irresponsible. And it's particularly funny coming from Republicans who claim to be champions of business. There's no businessperson out here who thinks this wouldn't be a big deal. Not one. You go to anywhere from Wall Street to Main Street and you ask a CEO of a company, or ask a small businessperson whether it would be a big deal if the United States government isn't paying its bills on time, they'll tell you it's a big deal. It would hurt.
And it's unnecessary. That's the worst part of it. This is not a complicated piece of business. And there's no reason why, if, in fact, Republicans are serious about wanting to negotiate, wanting to have a conversation, wanting to talk, there's no reason why you have to have that threat looming over the conversations. I mean, think about it. The only reason that the Republicans have held out on negotiations up until the last week or so is because they thought it was a big enough deal that they would force unilateral concessions out of Democrats and out of me. They said so. They basically said, you know what, the President is so responsible that if we just hold our breath and say we’re going to threaten default, then he’ll give us what we want and we won’t have to give anything in return. Again, that’s not my account of the situation. You can read statements from Republicans over the last several months who said this explicitly.
And so, for them now to say, well, it wouldn’t be a big deal if it happens, that’s not how they’ve been acting over the last couple months. And if it’s not a big deal, then why would I give them concessions now to avoid it? It is a big deal. And nobody should be getting concessions for making sure that the full faith and credit of the United States is retained.
Q Thank you, Mr. President. With Speaker Boehner so far unwilling to hold a vote on a clean CR, what assurances can you give to those affected by a shutdown who are concerned about an even longer impasse? And how worried are you, personally, that your preferred solution to this is a clean CR at sequestration levels that ‘may do harm to the nation’s economy and your second term agenda?
THE PRESIDENT: Well, I mean, Sam, you’re making an important point, which is what we’re asking of the Republicans right now is to keep the government open at funding levels that Democrats think are very harmful to the economy and inadequate to make sure that the economy is growing faster, more people are put back to work, and the middle class is growing. We’re willing to pass at least a short-term budget that opens up the government at current funding levels. It doesn’t even address the harm that’s been done because of sequestration.
Now, the Democrats have a budget that would eliminate sequestration -- this meat-cleaver approach to deficit reduction -- and make sure that we’re adequately funding basic medical research and Head Start programs and VA programs, and a whole range of things that have been really hard hit this year. But we recognize that there are going to have to be some compromises between the Democratic position and the Republican position. And in the meantime, we shouldn’t hurt the economy even worse by shutting down the government.
So let me just give you an example -- very specific. Because of sequestration, because of the meat-cleaver cuts that have been taking place over the course of this year, thousands of families have lost Head Start slots for their children. So you’ve had parents all across the country who’ve been scrambling trying to figure out how can I find some decent, quality child care for my kids. Now, the government shutdown means several thousand more are going to be losing their slots.
If we vote today or tomorrow or the next day in the House of Representatives to go ahead and reopen the government, at least those additional several thousand people will be spared the difficulties of trying to scramble and figure out where your kid is going to be when you're trying to go to work. But it doesn’t solve the broader problems. And if we were going to have real negotiations, the Democrats would say, let's solve the bigger problem -- what about all those thousands who have been hurt by sequester?
The Democrats aren't making that demand right now. We understand there's going to have to be some give-and-take. What we are saying is, don’t hurt more people while we're trying to resolve these differences; let's just at least make sure that we keep the lights on while we're having these conversations.
Q Do you support back-pay for furloughed workers?
THE PRESIDENT: Excuse me?
Q Do you support back-pay for furloughed federal workers?
THE PRESIDENT: Absolutely. I mean, that’s how we've always done it.
Q Thanks. You talked a bit about the hit to credibility around the world that this impasse has caused. I'm wondering what you and your administration are telling worried foreign creditors -- China and Japan -- who are calling and asking about whether the United States is going to avoid defaulting on its debt.
THE PRESIDENT: Well, I won't disclose any specific conversations. But obviously my message to the world is the United States always has paid its bills and it will do so again. But I think they're not just looking at what I say, they're looking at what Congress does. And that ultimately is up to Speaker Boehner. This will not get resolved, we're not going to calm creditors un
til they see Speaker Boehner call up a bill that reopens the government and authorizes the Secretary of the Treasury to pay our bills on time. And until they see that, there's going to be a cloud over U.S. economic credibility.
But it is not one from which we can't recover. I mean, we've been through this before. Every country -- every democracy, in particular -- has tussles over the budget, and I think most world leaders understand it. They, themselves, have been through it if they're in a democracy. What you haven't seen before, I think, from the vantage point of a lot of world leaders is the notion that one party in Congress might blow the whole thing up if they don’t get their way. They've never seen that before. And that does make them nervous, particularly given what happened in 2011. I mean, keep in mind we've been here before, right? We saw what happened in 2011. I think the assumption was that the Americans must have learned their lesson; that there would be budget conflicts, but nobody again would threaten the possibility that we would default. And when they hear members of the Senate and members of Congress saying, maybe default wouldn’t be that bad, I’ll bet that makes them nervous. It makes me nervous.
It should make the American people nervous -- because that's irresponsible. It is out of touch with reality. It is based on a flawed analysis of how our economy works. You cannot pay some bills and not others, and think somehow that the fact that you're paying some bills protects you from a loss of creditworthiness. That's not what happens in our own personal lives. I don't know why people think that that's how it works for the United States government.
Q Do you think you might have emergency powers that you could use after any default situation?
THE PRESIDENT: We have used a lot of our emergency powers. Jack Lew has used extraordinary measures to keep paying our bills over the last several months. But at a certain point, those emergency powers run out, and the clock is ticking. And I do worry that Republicans, but also some Democrats, may think that we've got a bunch of other rabbits in our hat. There comes a point in which, if the Treasury cannot hold auctions to sell Treasury bills, we do not have enough money coming in to pay all our bills on time. It's very straightforward.
And I know there's been some discussion, for example, about my powers under the 14th Amendment to go ahead and ignore the debt ceiling law. Setting aside the legal analysis, what matters is, is that if you start having a situation in which there's legal controversy about the U.S. Treasury's authority to issue debt, the damage will have been done even if that were constitutional, because people wouldn't be sure. It would be tied up in litigation for a long time. That's going to make people nervous. So a lot of the strategies that people have talked about -- well, the President can roll out a big coin, or he can resort to some other constitutional measure -- what people ignore is that, ultimately, what matters is what do the people who are buying Treasury bills think?
And, again, I'll just boil it down in very personal terms. If you're buying a house and you're not sure whether the seller has title to the house, you're going to be pretty nervous about buying it. And at minimum, you'd want a much cheaper price to buy that house because you wouldn't be sure whether or not you're going to own it at the end. Most of us would just walk away, because no matter how much we like the house, we'd say to ourselves, the last thing I want is to find out after I’ve bought it that I don't actually own it.
Well, the same thing is true if I'm buying Treasury bills from the U.S. government. And here I am sitting here -- what if there's a Supreme Court case deciding that these aren't valid, that these aren't valid legal instruments obligating the U.S. government to pay me? I'm going to be stressed -- which means I may not purchase them. And if I do purchase them, I'm going to ask for a big premium.
So there are no magic bullets here. There's one simple way of doing it, and that is Congress going ahead and voting. And the fact that right now there are votes, I believe, to go ahead and take this drama off the table should at least be tested. Speaker Boehner keeps on saying he doesn’t have the votes for it, and what I've said is, put it on the floor, see what happens, and at minimum, let every member of Congress be on record. Let them vote to keep the government open or not, and they can determine where they stand, and defend that vote to their constituencies. And let them vote on whether or not America should pay its bills or not.
And if, in fact, some of these folks really believe that it's not that big of a deal, they can vote no, and that will be useful information for voters to have. And if it fails, and we do end up defaulting, I think voters should know exactly who voted not to pay our bills so that they can be responsible for the consequences that come with it.
Q Thank you, Mr. President. You mentioned the Supreme Court, and the term started today with the campaign finance case that sort of picks up where Citizens United left off. You've called Citizens United "devastating to the public interest," so I wonder if you could weigh in on this latest case.
THE PRESIDENT: Well, the latest case would go even further than Citizens United. I mean, essentially it would say anything goes; there are no rules in terms of how to finance campaigns. There aren't a lot of functioning democracies around the world that work this way, where you can basically have millionaires and billionaires bankrolling whoever they want, however they want -- in some cases undisclosed. And what it means is ordinary Americans are shut out of the process.
And Democrats aren't entirely innocent of this in the past. And I had to raise a lot of money for my campaign, so I -- there's nobody who operates in politics that has perfectly clean hands on this issue. But what is also true is that all of us should bind ourselves to some rules that say the people who vote for us should be more important than somebody who's spending a million dollars, $10 million, or $100 million dollars to help us get elected -- because we don’t know what their agendas are, we don’t know what their interests are.
And I continue to believe that Citizens United contributed to some of the problems we're having in Washington right now. You have some ideological extremist who has a big bankroll and they can entirely skew our politics. And there are a whole bunch of members of Congress right now who privately will tell you, I know our positions are unreasonable, but we're scared that if we don’t go along with the tea party agenda or some particularly extremist agenda that we'll be challenged from the right. And the threats are very explicit, and so they toe the line. And that’s part of why we've seen a breakdown of just normal, routine business done here in Washington on behalf of the American people. And all of you know it. I mean, I'm not te
lling you anything you don’t know -- because it’s very explicit. You report on it. A big chunk of the Republican Party right now are in gerrymandered districts where there’s no competition, and those folks are much more worried about a tea party challenger than they are about a general election where they’ve got to compete against a Democrat or go after independent votes. And in that environment, it’s a lot harder for them to compromise.
Q Thank you, Mr. President. This week, the President of China has visited several of the Asian countries that you were going to visit and have had to skip because of the shutdown.
THE PRESIDENT: Right.
Q He’s also taken a big role at the two regional summits, both of which your administration has made a pretty big priority of as part of the broader Asia pivot. Does China benefit from the chaos in Washington? And then, more broadly, you’ve said in general that this hurts the reputation of the United States overseas. Are there specific things that you can point to where you already have seen some damage? And one that occurs to me is the trade deal that you’ve tried to do in Asia. The leaders today announced that they still want to wrap it up, but they no longer are able to say they want to wrap it up by the end of this year. Had you been there, do you think you could have gotten that additional push?
THE PRESIDENT: I think that’s a great example, and we don’t know, but it didn’t help that I wasn’t there to make sure that we went ahead and closed a trade deal that would open up markets and create jobs for the United States, and make sure that countries were trading fairly with us in the most dynamic, fastest-growing market in the world. I should have been there.
But I can tell you -- because I had to apologize to some of the host countries -- that they understood that the most important thing I can do for them and the most important thing I can do for the bilateral relationship and America’s reputation is making sure that we reopen our government and we don’t default.
So I don’t think it’s going to do lasting damage. As I said, if we deal with this the way we should, then folks around the world will attribute this to the usual messy process of American democracy, but it doesn’t do lasting damage.
In the short term, I would characterize it as missed opportunities. We continue to be the one indispensable nation. There are countries across Asia who have welcomed our pivot because they want to do business with us. They admire our economy. They admire our entrepreneurs. They know that their growth is going to be contingent on working with us. They care about the security environment that we’ve maintained -- helped maintain, and the freedom of navigation and commerce that is so important to them. So it’s not as if they’ve got other places to go. They want us to be there and they want to work with us.
But in each of these big meetings that we have around the world, a lot of business gets done. And in the same way that a CEO of a company, if they want to close a deal, aren’t going to do it by phone, they want to show up and look at somebody eye-to-eye and tell them why it’s important and shake hands on a deal -- the same thing is true with respect to world leaders.
And the irony is our teams probably do more to organize a lot of these multilateral forums and set the agenda than anybody. I mean, we end up being engaged much more than China, for example, in setting the agenda and moving this stuff forward. And so when -- it's almost like me not showing up to my own party. I think it creates a sense of concern on the part of other leaders. But as long as we get through this, they'll understand it and we'll be able to, I believe, still get these deals done. The last point I'd make, though, is we can't do it every three months. Right? Back in the '90s, we had a government shutdown. That happened one time, and then after that, the Republican Party and Mr. Gingrich realized this isn't a sensible way to do business, that we shouldn't engage in brinksmanship like this, and then they started having a serious conversation with President Clinton about a whole range of issues. And they got some things that they wanted. They had to give the Democrats some things that the Democrats wanted. But it took on a sense of normal Democratic process.
So here we already went through this once back in 2011. And then, at the end of last year, right after my election, we went through something similar with the so-called fiscal cliff, where Republicans wouldn't negotiate about taxes, despite the fact that taxes actually went up anyway, even though they refused to negotiate. And they could actually have gotten some things from us that they wanted if they had been willing to engage in normal negotiations.
So we've got to stop repeating this pattern. I know the American people are tired of it. And to all the American people, I apologize that you have to go through this stuff every three months, it seems like. And lord knows I'm tired of it. But at some point, we've got to kind of break these habits, and get back to the point where everybody understands that in negotiations there is give and there is take, and you do not hold people hostage or engage in ransom-taking to get 100 percent of your way. And you don't suggest that somehow a health care bill that you don't agree with is destroying the Republic, or is a grand Socialist scheme. If you disagree with certain aspects of it, tell us what you disagree with and let's work on it. If you're concerned about long-term debt, that's a good thing to be concerned about, but don't pretend as if America is going bankrupt at a time when the deficits have been cut in half.
That's what the American people, I think, expect, is just civility, common sense, give-and-take, compromise. Those aren't dirty words. There's nothing wrong with them. And I think the American people understand I may -- not “I may” -- I have flaws. Michelle will tell you. One of them is not that I'm unwilling to compromise. I've been willing to compromise my entire political career. And I don't believe that I have the answers to everything and it's my way or the highway. But I'm not going to breach a basic principle that would weaken the presidency, change our democracy, and do great damage to ordinary people, just in order to go along with what the House Republicans are talking about.
Q Sir, just one follow-up -- I did ask specifically about China, and I'm wondering whether to what extent is our loss their gain.
THE PRESIDENT: I'm sure the Chinese don't mind that I'm not there right now in the sense that there are areas where we have differences and they can present their point of view and not get as much pushback as if I were there -- although Secretary of State Kerry is there, and I'm sure he’s doing a great job. But I've also said that our cooperation with China is not a zero-sum game. There are a lot of areas where the Chinese and us agree. On trade, in particular, though, here is an area where part of what we're trying to do is raise standards for, for example, intellectual property protection, which sometimes is a big problem in China. And if we can get a trade deal with all the other countries in Asia that says you've got to protect people's intellectual property that will help us in our negotiations with China. Richard McGregor. Q Up here. THE PRESIDENT: There you go, Richard. Q Could I go back to the issue of debt privatization? THE PRESIDENT: Yes. Q What are your legal liabilities -- what is your legal advice? That foreign creditors must be paid first, particularly as it's a sovereign credit issue -- THE PRESIDENT: Richard, you know what I'm going to do is I'm going to let Jack Lew, the Secretary of the Treasury, make a formal presentation on Thursday before the Senate committee, because this is obviously sensitive enough and I think people would be paying close enough attention that details count. And I think prepared remarks from Secretary Lew on that topic would probably be more appropriate. But as I indicated before, we plan for every contingency. So obviously, worst-case scenario, there are things that we will try to do. But I will repeat: I don’t think any option is good. Steven Dennis. Q Mr. President, I'm wondering if you could talk a little bit about budget process. In the past, you've negotiated along with the debt ceiling with the Blue Dogs, for instance, in 2009, 2010 -- along with a debt ceiling increase then. Pay-as-you-go reform, you named a fiscal commission. The Republicans today are talking about maybe another committee that would work out our differences over the next few weeks. Is that something that you could talk about on the side, something that wouldn’t necessarily be a concession, but something that would be a format for getting a deal done? THE PRESIDENT: Here's the thing, Steven. I know that Speaker Boehner has talked about setting up some new process or some new super committee, or what have you. The leaders up in Congress, they can work through whatever processes they want. But the bottom line is either you're having good-faith negotiations in which there's give-and-take, or you're not. Now, there is already a process in place called the Budget Committees that could come together right now -- Democrats have been asking for 19 months to bring them together -- make a determination how much should the government be spending next year. The Appropriations Committees could go through the list, and here's how much we're going to be spending for defense and here's how much we're going to be spending for education. And that’s a process that’s worked reasonably well for the last 50 years. I don’t know that we need to set up a new committee for a process like that to move forward. What has changed, or what seems to be motivating the idea we have to have a new process is Speaker Boehner, or at least some faction of the Republicans in the House and maybe some in the Senate, are holding out for a negotiation in theory, but in fact, basically, Democrats give a lot of concessions to Republicans, Republicans don’t give anything, and then that’s dubbed as compromise. And the reason that Democrats have to give is because they're worried that the government is going to stay shut down or the U.S. government is going to default. And again, you can dress it up any way you want. If that’s the theory that the Republicans are going forward with, then it's not going to work. So let me just give you one specific example. I've heard at least -- and I can't confirm this -- that one of the ideas of this new committee is you could talk about reductions in discretionary spending; you could talk about entitlement reform and reductions in mandatory spending; you could talk about how long you'd extend the debt ceiling; but you couldn’t talk about closing corporate loopholes that aren't benefitting ordinary folks economically, and potentially, if you closed them, would allow us to pay for things like better education for kids. Well, I don’t know why Democrats right now would agree to a format that takes off the table all the things they care about, and is confined to the things that the Republicans care about. So, again, I don’t know that that’s exactly what's being proposed. My simple point is this: I think Democrats in the Senate and the House are prepared to talk about anything. I'm prepared to talk about anything. They can design whatever formats they want. What is not fair and will not result in an actual deal is ransom-taking, or hostage-taking, and the expectation that Democrats are paying ransom or providing concessions for the mere act of reopening the government or paying our bills. Those are not things that you do for me, and they're not things that you do for the Democrats. Q But is there room here where it's not necessarily a concession; where it is you would negotiate what the negotiations are going to look like? You don’t have to agree to overturn Obamacare, but you can actually negotiate what the talks are going to look like so everybody is comfortable. And you know, you've mentioned yourself, this is a tough vote for all these House Republicans. You're asking them to take a very tough vote for the debt ceiling. Usually, people in both parties want to have some cover, something that they can point to and say, hey, I want some budget process reform -- THE PRESIDENT: Which is fine -- Q -- before I approve another trillion dollars in debt. THE PRESIDENT: Which is fine. And so if they want to do that, reopen the government, extend the debt ceiling. If they can't do it for a long time, do it for the period of time in which these negotiations are taking place. Why is it that we've got hundreds of thousands of people who aren't working right now in order for what you just described to occur? That doesn’t make any sense. The Small Business Administration gives out a billion dollars' worth of loans every month to small businesses all across the country. That’s not happening right now. So there are small businesses in every state that are counting on a loan to get their business going, and you've got the party of small business saying, the Small Business Administration can't do it -- that’s what they call themselves. And yet, they're suffering. You've got farmers who are waiting for loans right now. Those loans cannot be processed. The Republican Party says they're the party that looks out for farmers. I happen to disagree; I think farmers have done real good under my administration, but having said that, why would you keep the government shut down and those farmers not getting their loans while we're having the discussions that you just talked about? The Republicans say they're very concerned about drilling. They say, Obama has been restricting oil production, despite the fact that oil production is at its highest levels that it's been in years and is continuing to zoom up. But they say the Democrats are holding back oil production in this country. Well, one of the things that happens when the government shut down is new drilling permits aren't processed. So why would the Republicans say to the folks who are interested in drilling for oil, sorry, we can't let those things be processed until we have some negotiations and we have some cover to do what we're supposed to be doing anyway? That doesn’t make sense. If there's a way to solve this, it has to include reopening the government, and saying America is not going to default, it's going to pay our bills. They can attach some process to that that gives them some certainty that, in fact, the things they're concerned about will be topics of negotiation, if my word is not good enough -- but I've told them I'm happy to talk about it. But if they want to specify all the items that they think need to be a topic of conversation, happy to do it. If they want to say part of that process is we're going to go through line-by-line all the aspects of the President's health care plan that we don’t like and we want the President to answer for those things, I'm happy to sit down with them for as many hours as they want. I won't let them gut a law that is going to make sure tens of millions of people actually get health care, but I'm happy to talk about it. Q Mr. President, can I ask you a question about -- THE PRESIDENT: Stephen Collinson. Q Thank you, Mr. President. THE PRESIDENT: I'm just going through my list, guys. Talk to Jay. (Laughter.) Q The operations in Africa this weekend suggest that the continent is now the central front in the campaign against terrorism, and if we're going to see U.S. military operations all around the continent, how does that square with your contention that American cannot be at war forever? THE PRESIDENT: Well, if you look at the speech I gave at the National Defense College several months ago, I outlined how I saw the shift in terrorism around the world and what we have to do to respond to it. And part of what I said is, is that we had decimated core al Qaeda that had been operating primarily between Afghanistan and Pakistan, but you now had these regional groups, some of which are explicitly tied to al Qaeda or that ideology, some of which are more localized. Few of them have the ability to project beyond their borders, but they can do a lot of damage inside their borders.
And Africa is one of the places where, because, in some cases, a lack of capacity on the part of the governments, in some cases because it is easier for folks to hide out in vast terrains that are sparsely populated, that you're seeing some of these groups gather. And we're going to have to continue to go after them.
But there's a difference between us going after terrorists who are plotting directly to do damage to the United States, and us being involved in wars. The risks of terrorism and terrorist networks are going to continue for some time to come. We've got to have a long-term plan that is not just military-based; we've got to engage in a war of ideas in the region, and engage with Muslim countries and try to isolate radical elements that are doing more damage to Muslims than they're doing to anybody else. We've got to think about economic development, because although there's not a direct correlation between terrorism and the economy, there's no doubt that if you've got a lot of unemployed, uneducated young men in societies that there's a greater likelihood that terrorist recruits are available.
But where you've got active plots and active networks, we're going to go after them. We prefer partnering with countries where this is taking place wherever we can, and we want to build up their capacity. But we're not going to farm out our defense.
And I have to say, by the way, the operations that took place both in Libya and Somalia were examples of the extraordinary skill and dedication and talent of our men and women in the armed forces. They do their jobs extremely well, with great precision, at great risk to themselves. And I think they are pretty good examples for how those of us here in Washington should operate as well. Q Mr. President, did the capture of Mr. Libi comply with international law?
THE PRESIDENT: We know that Mr. al-Libi planned and helped to execute plots that killed hundreds of people, a whole lot of Americans. And we have strong evidence of that. And he will be brought to justice.
Q Mr. President, while you're waiting for the shutdown to end, why is it that you can't go along with any of the bills the House is passing funding the FDA and FEMA -- where you were yesterday -- and veterans' benefits and Head Start? You've got to be tempted to sign those bills and get funding to those programs that you support.
THE PRESIDENT: Of course, I'm tempted, because you'd like to think that you could solve at least some of the problem if you couldn't solve all of it. But here's the problem. What you've seen are bills that come up where wherever Republicans are feeling political pressure they put a bill forward. And if there's no political heat, if there's no television story on it, then nothing happens. And if we do some sort of shotgun approach like that, then you'll have some programs that are highly visible get funded and reopened -- like national monuments -- but things that don't get a lot of attention -- like those SBA loans -- not being funded.
And we don't get to select which programs we implement or not. There are a whole bunch of things that the Republicans have said are law that we have to do. And I don't get a chance to go back and say, you know what, this cockamamie idea that this Republican congressman came up with I really don't like, so let's not implement that. Once you have a budget and a government with a set of functions, you make sure that it's all operating. We don't get to pick and choose based on which party likes what.
So that's where the budget discussions take place. Now, if there are some things that the Republicans don't like, they should argue for eliminating those programs in the budget, come up with an agreement with the Democrats. Maybe the Democrats will agree and those things won't be funded. But you don't do a piecemeal approach like that when you're dealing with a government shutdown. Okay?
Q Mr. President, would you be willing -- THE PRESIDENT: I'm going to take one more question. And right here, you've been -- your hand persistence has worked. (Laughter.)
Q Persistence pays off, yes. Mr. President, you've talked about the political dynamics that leave House Republicans feeling that they don't want to negotiate with you, they don't want to come together. I wanted to ask you two things about that. Looking back at the 2011 default discussions and the budget drama, is there anything that you wish that you had done differently in 2011? And after this, what you call this nonsense has ended, what do you expect the political dynamics might -- how will they have changed to move forward?
THE PRESIDENT: Well, I think it's an interesting question. In 2011, I entered into good-faith negotiations with John Boehner. He had just won the speakership. It was at a time when, because we were still responding to the recession, deficits were high, people were concerned about it, and I thought it was my obligation to meet him halfway. And so we had a whole series of talks. And at that point at least, nobody had any belief that people would come close to potential default. I don’t regret having entered into those negotiations, and we came fairly close. And whenever I see John Boehner to this day, I still say, you should have taken the deal that I offered you back then, which would have dealt with our long-term deficit problems, would not have impeded growth as much, would have really boosted confidence. But at that time, I think House Republicans had just taken over. They were feeling their oats and thinking, we don’t have to compromise. And we came pretty close to default, and we saw the impact of that.
I would have thought that they would have learned the lesson from that, as I did, which is we can’t put the American people and our economy through that ringer again. So that’s the reason why I’ve been very clear, we’re not going to negotiate around the debt ceiling. That has to be dealt with in a reasonable fashion.
And by the way, I often hear people say, well, in the past it has been dealt with all the time. The truth of the matter is if you look at the history, people posture about the debt ceiling frequently, but the way the debt ceiling often got passed was you’d stick the debt ceiling onto a budget negotiation once it was completed -- because people figured, well, I don’t want to take a bunch of tough votes to cut programs or raise taxes and then also have to take a debt ceiling vote, let me do it all at once.
But it wasn’t a situation in which, what if I don’t get what I want, then I’m going to let us default. That’s what’s changed. And that’s what we learned in 2011. And so, as a consequence, I said we’re not going to do that again -- not just for me, but because future Presidents, Republican or Democrat, should not be in a position where they have to choose between making sure the economy stays afloat and we avoid worldwide catastrophe, or we provide concessions to one faction of one party in one House.
But let me tell you a lesson I did not learn. I did not learn a lesson that we shouldn’t compromise. I still think we should. I still think there are all kinds of issues that we should be talking about, and I don’t expect to get 100 percent of my way. And I’m still very open to having conversations with not just the Speaker but any Republican over there. Go ahead.
Q Just to clarify this -- if you enter into a series of short-term funding bills or a debt ceiling bill, you will be back in the same place, presumably, with these, the same members of Congress. So what has changed in the political dynamic if you do the short-term -- THE PRESIDENT: Well, I think what has changed is they’re aware of the fact that I’m not budging when it comes to the full faith and credit of the United States -- that that has to be dealt with; that you don’t pay a ransom; you don’t provide concessions for Congress doing its job and America paying its bills.
And I think most people understand that. I was at a small business the other day and talking to a bunch of workers, and I said, when you’re at the plant and you’re in the middle of your job, do you ever say to your boss, you know what, unless I get a raise right now and more vacation pay, I’m going to just shut down the plant -- I’m not just going to walk off the job, I’m going to break the equipment? I said, how do you think that would go? They all thought they’d be fired. And I think most of us think that. There’s nothing wrong with asking for a raise or asking for more time off, but you can’t burn down the plant or your office if you don’t get your way. Well, the same thing is true here. And I think most Americans understand that. Thank you very much, everybody.