President Obama Town Hall on Credit Cards
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President Obama Town Hall on Credit Cards

November 12, 2019

(applause and cheering) The President:
Hello! Hello, New Mexico. Thank you so much. Thank you. Thank you very much, everybody. Please, have a seat. Have a seat. Thank you so much. What a wonderful welcome. It’s good to be
back in New Mexico. (applause) It’s always nice to get out
of Washington for a while — (applause) — and come to places
like Rio Rancho. (applause) The climate’s nice, the
conversation’s nice, people are nice. It is just wonderful to be here. We’ve got a few special guests
that I want to acknowledge here. First of all, a great friend,
one of the finest governors in the country — please give
it up for Bill Richardson. (applause) Lieutenant Governor,
Diane Denish. (applause) Secretary of State,
Mary Herrera. (applause) State Treasurer, James Lewis. (applause) State Auditor Hector Balderas. (applause) We’ve also got Joe Garcia,
President of the National Congress of American Indians. (applause) Got Rio Rancho
Mayor, Tom Swisstack. (applause) We’ve got some members of
Congress who couldn’t be here today, but I just want to
acknowledge them because they’re doing a great job. Senator Tom Udall — (applause) — Senator Jeff Bingaman — (applause) — and Representative Ben Luján. (applause) And I want to thank Chris for
the wonderful introduction and for her wonderful
family who are here. Please give her a big
round of applause. (applause) Now, the last time I came here
was 10 days before the election. (applause) We were over at the
University of New Mexico. (applause) Tens of thousands of you showed
up, it was a gorgeous night, stars were out. And I told you then that if we
wanted to steer ourselves out of our economic crisis, if we
wanted to bring about the change we needed, then I
needed your help. I needed you to show
up one more time. And, New Mexico, you delivered. (applause) Audience Member:
We love you! The President:
I love you back. (laughter) You delivered because you
believed that after an era of selfishness and greed, we
could reclaim a sense of responsibility from Wall Street
to Washington to Main Street. You believed that in a
time of great inequality, we could restore a sense of
fairness to our economy. You believed that rather than
go back to the pursuit of short-term profits and a
bubble-and-bust economy that led us to this point, we could build
an economy based on sound ideas and solid investments,
hard work, in order to secure a
long-term prosperity. So, New Mexico, I’ve come back
today to tell you that’s exactly what we’ve begun to do. (applause) Since the very first
day that I took office, we have acted boldly and swiftly
across all fronts to clear away the wreckage of this painful
recession and to start laying a new foundation for prosperity. We passed the most ambitious
economic recovery plan in our nation’s history to
jumpstart job creation — (applause) — and get our economy moving
again — a plan that has kept teachers in the classroom and
class sizes from increasing; a plan that will save or create
22,000 jobs just in New Mexico, mostly in the private sector;
a plan that made good on the middle-class tax cut
that we promised — (applause) — a tax cut that’s already
begun to appear in paychecks for 700,000 working families
across New Mexico. (applause) We made historic investments in
the kind of clean energy that’s led to an influx of cutting-edge
companies creating new jobs and new opportunities right
here in this state. We’ve made productive strides
towards fixing the health care crisis that I know has hit
especially hard here — strides towards reform that
brings down costs; that give Americans the freedom
to keep their doctor or plan that they already have, and
choose a new doctor and a new plan if they want to; that
finally gives every American access to quality,
affordable health care. (applause) And already we’ve got millions
of children across the country that have health care right now
under the children’s health care bill that we signed
since I’ve taken office. (applause) So I believe we’re moving
in the right direction. Step by step, we’re
making progress. Now, we’ve got a long way to go
before we can put this recession behind us. And New Mexico is doing
better than many states. But it’s tough out there. But we do know that the
gears of our economy, the economic engine, are
slowly beginning to turn. In the meantime, though, I know
that there are so many Americans who are hurting right now. You got hundreds of thousands
who’ve lost their jobs just last month. Millions are working jobs
that don’t pay enough to cover the bills. Millions more see increasing
portions of their income going towards paying down debt. They’re Americans struggling to
cope with the rising cost of putting things like their
mortgage, their tuition, their medical bills — even
their food and gas bills — on their credit cards, because
they feel like they’re going underwater. But they’re quickly finding out
that they can’t dig their way out of debt because
of unfair practices. And that’s what I want to
talk about today briefly. We’re talking about
folks like Chris Lardner. She and her husband work
hard; they’re doing well. They have a wonderful
small business. But she wrote to me last week
and you just heard her story. Her husband’s business
is in Albuquerque; two of their children
are in college. When one tuition payment that
was mistakenly charged to a credit card put
her over the limit, her credit card company more
than tripled her rate to nearly 30 percent. And she made a simple point in
the letter that she wrote to me. She said: “If we conducted
business this way, we’d have no
business,” she wrote. “And if this is happening to us,
I can only imagine what’s going on in homes less
fortunate than ours.” You all know what
Chris is talking about. I know. I remember. It hasn’t been that long
since I had my credit card, sometimes working
that a little bit. (laughter) We’re lured in by ads and
mailings that hook us with the promise of low rates while
keeping the right to raise those rates at any time for any reason
— even on old purchases; even when you make a late
payment on a different card. Right now credit card companies
charge more than $15 billion a year in penalty fees. One in five Americans carry a
balance that has been charged interest rates above 20 percent. Sometimes they even raise rates
on outstanding balances even when you’ve paid
your bills on time. Now, I understand that many
Americans are defaulting on their debt, and that’s why
these companies claim the need to raise rates. One of the causes of this
economic crisis was that too many people were living beyond
their means with mortgages they couldn’t afford, buying
things they couldn’t pay for, maxing out on credit cards
that they couldn’t pay down. And in the last decade,
Americans’ credit card debt has increased by 25 percent. Nearly half of all Americans
carry a balance on their cards, and those who do have an
average balance over $7,000. So we have been complicit
in these problems. We’ve contributed
to our own problems. We’ve got to change
how we operate. But these practices, they’ve
only grown worse in the midst of this recession, when hardworking
Americans can afford them least. Now fees silently appear. Payment deadlines suddenly move. Millions of cardholders have
seen their interest rates jump in the past six months. You should not have to worry
that when you sign up for a credit card, you’re signing
away all your rights. You shouldn’t need a magnifying
glass or a law degree to read the fine print that sometimes
don’t even appear to be written in English — or Spanish. (applause) And frankly, when you’re trying
to navigate your way through this economy, you shouldn’t feel
like you’re getting ripped off by “any time, any
reason” rate hikes, and payment deadlines that seem
to move around every month. That happen to anybody? You think you’re supposed
to pay it this day, and suddenly — and it’s never
on the end of the month where you’re paying all the
rest of your bills, right? It’s like on the 19th. (laughter) All kinds of harsh penalties and
fees that you never knew about. Enough’s enough. It’s time for strong, reliable
protections for our consumers. It’s time for reform — (applause) — it’s time for reform that’s
built on transparency and accountability and mutual
responsibility — values fundamental to the new
foundation we seek to build for our economy. Now, this is not an issue
I just discovered recently. For years, I’ve been a proponent
of strengthening consumer protections when it
came to credit cards. As a senator, I fought predatory
lending and credit card abuse. And I called for what I called
a Credit Card Bill of Rights. Last month, I met with the
leaders of the major credit card companies to discuss these and
other reforms that I believe will better protect the
nearly 80 percent of American households that
use credit cards. And we didn’t agree on
anything — everything as you might expect. (laughter) That was a slip of
the tongue here. (laughter) We didn’t agree on everything — (laughter) — but we did agree that any
reforms we can shouldn’t diminish consumers’
access to credit. I also think there’s no doubt
that people need to accept, as I said before, responsibility
that comes with holding a credit card. This is not free money. It’s debt. And you shouldn’t take on
more than you can handle. We expect consumers to make
sound choices and live within their means and pay what
they owe in a timely manner. Banks are a business, too, and
so they have a right to insist that timely payments are made. But what we also expect is that
our institutions act with the same sense of responsibility
that the American people aspire to in their own lives. We expect that when we
enter into an agreement, that agreement is
reasonable and transparent. We expect to pay what’s fair,
not just what fattens growing profits for some
credit card company. This is America, and we don’t
begrudge a company’s success when that success is based on
honest dealings with consumers. But some of these
dealings are not honest. (applause) That’s why we need reform. We need reform that restores
some sense of balance. We need a new equilibrium
where credit is flowing, where lenders can succeed, where
consumers don’t find themselves in a bad situation that
they didn’t anticipate. This kind of reform is
especially needed during this economic crisis. And as I’ve said all along, it
should adhere to four basic principles: First,
there has to be strong, reliable protections for
consumers — protections that ban unfair rate increases
and forbid abusive fees and penalties. The days of “any
time, any reason, anything goes” rate hikes and
late fees, that must end. That must end. (applause) Second, all forms and statements
that credit card companies send out have to be in plain
language, in plain sight. (applause) No more fine print, no
more confusing terms, no more hiding the truth. We’re going to require clarity
and transparency from now on. Third, we have to give people
the tools to shop for a credit card that meets their needs
without being afraid of being taken advantage of. So we’re going to require firms
to make all their contract terms easily accessible, and we’re
going to give consumers the information they need to do
some comparison shopping. And we’ll require firms to
offer at least one simple, straightforward card that offers
the strongest protections along with the plainest
terms and prices. And finally — (applause) — finally we need
more accountability. Instead of abuse
that goes unpunished, we need to strengthen monitoring
and enforcement and penalties for those who engage in
deceptive practices that take advantage of families
and consumers. (applause) And we also need to clean up
practices at universities to protect students from getting
stuck in debt before they even get started in life. That’s important. (applause) Now, the Federal Reserve has
already issued some new rules that would change some
of these practices, and I’m grateful to
them for doing so. But I’m also pleased that
Congress has begun to act. Two weeks ago, the House passed
credit card reform legislation that follows these principles
by a wide bipartisan majority, and I thank them for that. And New Mexico, you should
be proud that you’ve elected people, as I said before — Ben
Ray Luján, Martin Heinrich, Harry Teague — (applause) — who stood up for you
by voting for that bill. (applause) Even as we speak, the Senate
is debating its version of the bill, and I know your senators,
Jeff Bingaman and Tom Udall, stand on your side, too. (applause) So I’m calling on Congress to
take final action to pass a credit card reform bill that
protects American consumers and send it to my desk so that
I can sign it into law by Memorial Day. There’s no time for delay. (applause) It’s time to get it done. There’s no time for delay. We need durable and successful
flows of credit in our economy, but we can’t tolerate profits
that depend on misleading working families. Those days are over. Because more than anything, this
economic crisis has reminded us we’re all in this together. We can’t prosper by
putting off hard choices, or by protecting the profits of
the few at the expense of the middle class. We’re making steady progress
moving from recession to recovery, but we want
lasting prosperity. And that means that we have to
ensure that the legacy of this moment is an American economy
that rewards work and innovation, that’s guided by
fairness and responsibility, and that grows steadily
into the future. (applause) So, New Mexico, I know
there will be setbacks. I know that this is
going to take some time. Some of you are going
to continue to struggle for a while. We’re doing everything we can. But here’s what I also know —
if you’re willing to do your part, if our companies are
willing to do their part, if those of us in Washington
are willing to do our part, if we all work together, then
I promise you this: Years from now, you will be able to look
back at this moment as the time when the American people once
again came together to reclaim their future and bring about
a new and brighter day. (applause) Thank you, everybody. Thank you. (applause) So I didn’t come here — I
didn’t come here just to make a speech. Whenever we visit a community
we want to do a little bit of a town hall, give people a
chance to ask questions. Obviously we’ve got a lot of
people and I won’t get through every question, but I’m going
to try to get through as many as possible. And we’re going to go
boy, girl, boy, girl. (laughter) Or girl, boy, girl, boy. And I’m going to
go around the room. If you can raise your hands
when you have the question, and there are people with
microphones in the audience, so wait until you get the
microphone — everybody can hear your question that way. And introduce yourself
so we know who you are. And I’ll start with this
young lady over here. Yes. Audience Member:
Oh, thank you. Thank you, Mr. President. My name’s Linda Allison,
I work for one of the large corporations here. But I talk to a lot of
people about health care. My question is, so many people
go bankrupt using their credit cards to pay for health care. Why have they taken
single-payer off the plate? And why is Senator Baucus — (applause) — on the Finance Committee discussing health care when he has received so much money from the pharmaceutical companies? Isn’t it a conflict of interest? (applause) The President:
Well, as you know, I campaigned vigorously on health care reform, and I think that we have a better chance of getting it done this year than
we’ve had in decades. I am optimistic about us getting
health care reform done. Now, health care is
one-sixth of our economy, so it is a complicated,
difficult task. And Congress is going
to have to work hard. And everybody is going to have
to come at this with a practical perspective, as opposed to
trying to be ideologically pure in getting it done. Here are my principles in terms
of health care: Number one, we’ve got to control
costs across the system, because if we simply insured
everybody under the current system, we couldn’t afford
it — we’d go broke. The fact of the matter is, is
that families are seeing their premiums go up — skyrocket
each and every year. Businesses are getting crushed
by the rising costs of their employees’ health care. And the federal government —
Medicare and Medicaid — is going broke. That’s the single biggest
driver, by the way, of our deficits. I want everybody to
be clear about this, because driving in I saw
some folks who were saying, what are you going to do
about debt, et cetera. Listen, by far the biggest
contributor to our national debt and our annual deficit is the
costs of Medicare and Medicaid — as well as the
other entitlement, Social Security — defense, and
interest on the national debt. That’s the lion’s share
of the federal budget. The things you read about in the
newspapers and you see on TV about earmarks — I want
to get rid of earmarks, but the truth of the matter,
they’re only 1 percent of the entire budget. Most of what’s driving us
into debt is health care. And so we’ve got to
drive down costs. Now, here is some good news. There are ways that we
can drive down costs, because we just have
an inefficient system. If we emphasize prevention and
wellness programs; if we help — (applause) — if we — so that we’re
reimbursing doctors and providers not just for treating
people after they get sick but for helping people stay well if
we use medical technology to reduce error rates and ensure
electronic medical billing so when you go to the
hospital, you don’t have 15, 20 forms that you have to
fill out over and over and over again. There are simple things that we
can do that will save us money, so we need to focus on
cost, that’s number one. Number two, I think that it is
very important that we provide coverage for all people, because
if everybody’s got coverage then they’re not going to the
emergency room for treatment. And right now, if you’ve
got health insurance, the average family is paying
about $900 a year in additional hidden costs because you’re
subsidizing the folks who are going to the emergency room. And so you’d be better off with
a system that might cost the federal government overall a
little bit more — and we do have to pay for that — but that
would lower your premiums so that you don’t have
these hidden costs, because it’s cheaper to treat a
child for asthma with an inhaler than it is to have them go to
the emergency room and take up a hospital bed. So that’s the second principle. Now, this brings to
the last principle, and so this touches on
your point, and that is, why not do a
single-payer system. (applause) Got the little single-payer
advocates up here. (applause) All right. For those of you who don’t know,
a single-payer system is like — Medicare is sort of a
single-payer system, but it’s only for people over
65, and the way it works is, the idea is that you don’t
have insurance companies as middlemen. The government goes directly — (applause) — and pays doctors or nurses. If I were starting a
system from scratch, then I think that the idea of
moving towards a single-payer system could very
well make sense. That’s the kind of system that
you have in most industrialized countries around the world. The only problem is that we’re
not starting from scratch. We have historically a tradition
of employer-based health care. And although there are a lot of
people who are not satisfied with their health
care, the truth is, is that the vast majority of
people currently get health care from their employers and
you’ve got this system that’s already in place. We don’t want a huge disruption
as we go into health care reform where suddenly we’re trying to
completely reinvent one-sixth of the economy. So what I’ve said is, let’s set
up a system where if you already have health care through your
employer and you’re happy with it, you don’t have
to change doctors, you don’t have to change
plans — nothing changes. If you don’t have health care or
you’re highly unsatisfied with your health care, then
let’s give you choices, let’s give you options,
including a public plan that you could enroll in and sign up for. That’s been my proposal. (applause) Now, obviously as President I’ve
got to work with Congress to get this done and — (laughter) There are folks in Congress
who are doing terrific work, they’re working hard. They’ve been having
a series of hearings. I’m confident that both the
House and the Senate are going to produce a bill before
the August recess. And it may not have everything I
want in there or everything you want in there, but it will be a
vast improvement over what we currently have. We’ll then have to
reconcile the two bills, but I’m confident that we are
going to get health care reform this year and start putting us
on a path that’s sustainable over the long term. (applause) That’s a commitment I
made during the campaign; I intend to keep it. All right. We’ve got — it’s a man’s turn. This guy right here. This guy right here — big guy. Yes, right here. Audience Member:
Hello, President Obama. (inaudible) I work with AFT New Mexico,
and also with the AFL-CIO. (applause) And I’d like to ask you, what
would the Employee Free Choice Act do for New Mexicans and
throughout the United States? And mine is kind of like a
two-question — and the second one is, how can you help
us get this bill passed? The President:
Okay, let me talk about the Employee Free Choice Act. One of the things that I believe
in — and if you look at our history, I think it bears this
out — even if you’re not a member of a union, you owe
something to unions, because — (applause) — because a lot of the things
that you take for granted as an employee of a company — the
idea of overtime and minimum wage and benefits — a whole
host of things that you, even if you’re not a member of
a union, now take for granted, that happened because unions
fought and helped to make employers more accountable. (applause) The problem that we’ve seen
is that union membership has declined significantly
over the last 30 years. And so the question
is, why is that? Now, part of it, the economy
has changed and the culture has changed, and there hasn’t been
a very friendly politics in Washington when it comes
to union membership. But part of it just has to do
with the fact that the scales have been tilted to make it
really hard to form a union. So a lot of companies, because
they want maximum flexibility, they would rather spend a lot of
money on consultants and lawyers to prevent a union from forming
than they would just going ahead and having the union and then
trying to work with — and collectively — allow workers
to collectively bargain. So there’s a bill called the
Employee Free Choice Act that would try to even out
the playing field. And what it would
essentially say is, is that if a majority of workers
at a company want a union then they can get a union without
delay — and some of the monkey business that’s done right now
to prevent them from having a union. Now, I want to give the
other side of the argument. Businesses object to some of the
provisions in the Employee Free Choice Act, because one of
the things that’s in there is something called card check,
where rather than have a secret ballot and organize
a big election, you could simply have
enough employees, a majority of employees, check
a card and that would then form the union. And the employers argue we
need to have a secret ballot. I think that there may be
areas of compromise to get this bill done. I’m supportive of it, but there
aren’t enough votes right now in the Senate to get it passed. And what I think we have to do
is to find ways in which the core idea of the Employee
Free Choice Act is preserved, which is how do we make it
easier for people who want to form a union to at least get a
vote and have a even playing field — how do we do that, but
at the same time get enough votes to pass the bill. That’s what we’re
working on right now. I think it’s going to
have a chance of passage, but there’s still
more work to be done. (applause) All right, it’s a
young lady’s turn. This young lady right there. You, yes. (laughter) Audience Member:
Hello, President Obama. Our family, we’re
small business owners, and we’re seeing a marked
decrease in revenue due to customers having less
discretionary income. Are there any plans to
help small businesses ride out the storm? The President:
I’m sorry, can you repeat —
I missed just part of it. No, not the whole thing. You’re a small business owner. You were saying that you’ve
seen something happen to your revenues, but I
couldn’t hear you. Audience Member:
We’ve noticed a decrease — The President:
A decrease. Audience Member:
Right. The President:
Well, look, this is part of
why we passed the Recovery Act. We passed a package of $787
billion over two years — this is the largest economic recovery
package ever been passed — and it includes tax cuts. So everybody should be
seeing a slight increase in your paycheck. It’s not in a lump sum, it’s
spread out — each paycheck you’re getting a little bit
money back that you weren’t getting before. So that’s putting money
in people’s pockets. We are rebuilding our
infrastructure all across the country. So Governor Richardson, I know
he’s put in a whole bunch of proposals to rebuild
roads and bridges and — (applause) — infrastructure. The Mayor of
Albuquerque is here, I know that he’s working on it. The nice thing about
infrastructure projects, it’s a two-fer — not only does
it put to work — people to work right now, especially a lot of
folks who have been laid off from the construction industry,
which has been weakened, but what it’s also done is
it creates the framework for long-term economic growth,
because if we’ve got better mass transit, if we’ve
got high-speed rail, if we are rebuilding our
electricity grid to get clean energy from the places that
produce it to the places that need it, all that will generate
economic growth above and beyond the short term. So that’s another element of it. Part of what we’ve done in the
Recovery Act is just make sure that the economic
damage is not worse. So we’ve provided states
additional resources to retain teachers and retain
police officers — (applause) — and to make sure that
if you do lose your job, you can keep your health
care through COBRA, which prior to this bill was
really hard for most folks to afford because you had to pay
the full cost of your health care without employer subsidy,
but now the government has picked up the subsidy and that
allows a lot more people to keep health care. So we’ve been doing a lot of
things through the Recovery Act. The other thing we’re trying
to do is to stabilize the housing market. And so we have programs now in
place that have helped boost refinancings, making millions of
people who weren’t eligible to get their homes refinanced,
refinanced at lower rates. That’s like a tax cut. That’s like money in people’s
pockets because your monthly rate will be lower. And if you have not
recently refinanced, you should take a look at what
banks are now offering because interest rates have gone down
significantly and the programs that we’ve put in place have
helped to spur on some of those refinancings. We’re also trying to stop
the rate of foreclosure. Now, this is hard to do because
housing prices have gone down so far that some people,
they’re just, unfortunately, not going to be able to stay in
their home — they bought too much home given their incomes. But people who are
at the margins, what we’ve done is
we’ve said to the banks, negotiate — the banks will be
better off and the consumer will be better off if you
avoid foreclosure, and everybody takes a haircut. The bank has to lose a little
bit of money on what they were expecting on principal
and interest. On the other hand,
the homeowner, if they make this
agreement with the bank, they’ve got to agree that when
prices start going up again they give up a little bit of
equity to repay the bank. But either way,
everybody is better off, including the community, if
people stay in their homes. (applause) So there are a whole bunch of
steps that we’ve been taking, and we’re starting to see
improvements in the housing market, we’re starting to see
slight improvements in some of these other areas. But I have to tell you,
this was a big, big, big economic
problem that we had. This is like nothing that we’ve
seen since the Great Depression. And as I said, New Mexico
has been fortunate, partly because of some good
administration from the New Mexican government — (applause) — but also because New Mexico
wasn’t overbuilt at the same pace, it did not have some
of the same problems as some other states. But for the country as a
whole, we took a big hit. Wall Street just was gambling
with a lot of people’s money and they were taking risks they
should have never taken. So we’ve seen trillions of
dollars of wealth removed and it’s going to take
some time to catch up. And a lot of people are still
paying off their credit cards and a lot of people are trying
to get out from under the debts that they had accumulated
when times were better. And so we’re going to have to
set what I’m calling a new foundation for growth, where
people are less reliant on debt, they’re living more
within their means; businesses are engaging in more
sensible business practices, they’re investing in the future
and the long term and not short-term profits; we are
focusing on clean energy; we’re reforming our
health care system; we are boosting our education
system to produce more engineers and more scientists; and
retraining our workers so that we’ve got the most productive
workers in the world. (applause) That’s the strategy that we’re
going to be pursuing in the months and years to come. All right. It must be — it’s a guy’s turn. It’s a guy’s turn. Let me go up here, because I
don’t want to feel — I don’t want folks up here
feeling neglected. That gentleman way up
there right in the corner, way up there. (laughter) Look at that guy. He’s all standing
right in front of him. (laughter) Audience Member:
Thank you, Mr. President. My name is Phillip Sublet out
of Belinda Mexico and I’m just asking that — you’re saying all these wonderful things and it’s really good to hear this, but whenever you say that we’ve got to get laws passed or the help to the people that we need, we chuckle about it having
to go through Congress. Well, can you break those
lines of bipartisanship, and get these laws and this help
that we need to us, the people? (applause) The President:
Well, first of
all — first of all, I think it’s very important to
understand that since I came into office, I have said to my
Republican friends in Congress, I want to work with you. I’ve had them over to the White
House more than they were over in the White House during
the Bush administration. (laughter) That’s true. (applause) We have consulted
with them extensively. Now, there have been, on two big
issues, some very fundamental disagreements with
the Republican Party. And I don’t doubt their
sincerity — they just have a different view. One is on the stimulus
package, on the Recovery Act. There were people who said we
should not have government spend that much, especially when we’re
inheriting a $1.3 trillion deficit from the previous
administration and we’ve already spent money on the TARP program
and shoring up the banks, et cetera — we
shouldn’t do this. There are some people
who made that argument. Now, I will tell you that
every serious Democratic and Republican, conservative and
liberal economist that I spoke to believe very strongly that
we needed a recovery package because what was happening was
consumers, they had pulled back. People weren’t shopping as much,
because they were worried about the state of the economy, and
their debts had gotten too high. Businesses were pulling back. And so what you had was a crisis
in demand where if everybody pulls back at the same time,
nobody is going shopping. If nobody is going shopping,
then this young lady with her store, she doesn’t have money. She may have to
lay off a worker, which means that worker is now
spending less — which means they’re not buying groceries. And now somebody else’s
store shuts down. You start getting into a vicious
cycle where everybody is pulling back all at the same time. In that circumstance, the only
person — or the only entity that can fill the gap
is the government. And so that’s why we
passed the Recovery Act. It’s not because we’re not
worried about deficits; it’s because if we
didn’t do anything, this economy could have
really gone into a tailspin. But I make that point only to
say there’s some Republicans who just philosophically were
opposed to the idea of this recovery package. I have to say they weren’t
as worried when the previous administration was
running up and doubling our national debt, but — (applause) — but having said
that, having said that, it’s entirely legitimate for
— that’s part of what our democracy is about, to
disagree with us on this. They also disagreed on our
budget because they don’t believe that we
should, for example, reform our health care system in
a way that includes more people. They think that the free
market can solve the problem. Now, I’m a strong believer
in the free market, but I think that when
it comes to health care, the free market only
takes you so far. If your child is sick and you
don’t have health insurance, in a country this wealthy, we
should be able to make sure that your child is cared for. (applause) And I actually think — I
actually think that long term we’ll spend less
money when we do that. Because other countries like
France and Japan and a whole host of other countries, they
spend less a percentage of their GDP on health care than we do. We spend more per capita
than any nation on Earth, but we still have 45
million uninsured, and in some cases we’ve
got worse outcomes. We’ve got higher infant
mortality rates; we’ve got higher rates
of some deadly diseases. That doesn’t make sense. But, again, there’s a
philosophical difference. Having said all that,
on this credit card bill, when it passed in the
House, we actually got 100 Republican votes. (applause) On our children’s
health insurance bill, we got some Republican votes. So the media likes to
focus on where we disagree; they don’t tend to focus on the
areas where we are actually working together. And I think that we’ll see more
and more agreement over time as the Republican Party starts to
realize that the American people want results right now;
they don’t want bickering. (applause) And when they realize that,
they’ll have an open, outstretched hand from me. (applause) All right? Okay. Guys, I hate to do this,
but I’ve only got time for one question. One more question. It’s got to be a young lady. All the guys, sit down. Why is everybody pointing
at this young lady? All right, go ahead. Everybody was
advocating for you. Audience Member:
Thank you so much. Thank you, President Obama. My name is Eliza Sultan, I
work for Congressman Ben Luján. The limits on earnings for
people on Social Security disability are so low that it
discourages people from working. For those who are hoping to be
self-supporting and get off Social Security
disability, like myself, would you consider
raising the earning limit? The President:
You know, I think it’s
something that we should look at carefully. We’ve got a wonderful advisory
group relating to people with disabilities and how
we expand opportunity, and let’s examine
what we can do. Now, I will tell you that Social
Security disability has gone up significantly during
this recession. Some of you may have read in the
last couple of days that Social Security — the Social Security
trust fund is worse off now because of the
recession than it was. We were already having some
issues with Social Security, and so we’re going to have to
do some significant reforms of Social Security. So, in principle, the answer is,
I would like to raise the income limits to encourage people to
become more self-sufficient. In practice, it costs
money on the front end, even though long term
it may save money. And what I’d like to do is
examine this in the broader context of Social
Security reform and Medicare/Medicaid reform. What I’d like to do is just
shift off — pivot off your question to talk about this
issue of debt and deficits one more time. During a recession of this
severity it is important, as I explained, for the
government to step in and fill the hole in demand that was
created by consumers and by businesses, to get the
economy kick-started. But the long-term deficit and
debt that we have accumulated is unsustainable. We can’t keep on just
borrowing from China, or borrowing from
other countries — (applause) — because part of it is, we
have to pay for — we have to pay interest on that debt. And that means that we’re
mortgaging our children’s future with more and more debt, but
what’s also true is that at some point they’re just going to
get tired of buying our debt. And when that happens, we will
really have to raise interest rates to be able to borrow, and
that will raise interest rates for everybody — on your
auto loan, on your mortgage, on — so it will have a
dampening effect on the economy. So we are going to have to
deal with our long-term debt. As I said before, the biggest
thing that we can do on that front is to deal
with entitlements. We are going through the budget,
line by line, page by page, rooting out waste and abuse. We’ve already found $40 billion
in procurement practices and no-bid contracts on the
defense side that we are going to eliminate. (applause) We found $17 billion in programs
that don’t work and we’re going to stop those programs so that
— 120 programs so that we can put the money into
programs that do work. We are going to go
through — and by the way, I just want to make a little
commentary about the media here, if you don’t mind. When Congress included in last
year’s budget a whole bunch of earmarks, you remember there was
a week worth of stories about how terrible these
earmarks were. You remember this, Chip — a
week worth of stories — “oh, these earmarks, this is what’s
blowing up the deficit, this is terrible,”
blah, blah, blah. And yet, as I said before, that
was less than 1 percent of that entire budget that
had been signed. When we find $17 billion
worth of cuts in programs, what do the same folks say? They say, “Oh, that’s nothing.” (laughter) “Now, that’s not even —
that’s not even — that’s not significant. That’s not important.” Well, you can’t
have it both ways. If those earmarks
were important, then this money
is important, too. But what is true about the
budget — is absolutely true — is that we can cut programs,
we can eliminate waste, we can eliminate abuse,
we can eliminate earmarks; we could do all that stuff, and
we’re still going to have a major problem, because Social
Security, Medicare, Medicaid, interest on the national debt. And so I have said before and
I will repeat again that my administration is going to seek
to work with Congress to execute serious entitlement reform that
preserves a safety net for our seniors, for people
with disabilities, but also puts it on a firmer,
stable footing so that people’s retirements are going to be
secure not just for this generation, but also
for the next generation. And that’s going
to be hard work. (applause) It’s going to require
some tough choices, but I’m going to need support
of the American people to get that done. That’s part of what this
administration is about: Let’s make the tough choices now, so
that we’ve got a better future for America. Thank you everybody. God bless you.

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