Press Briefing with President Obama and President Clinton

President Obama:
I thought it was a
slow day, so I’ve — The Press:
Slow news day, huh? President Obama:
— bring the other guy in. Obviously, there’s a big
debate going on about taxes, and about the need to grow the
economy and to create jobs. And just about
every day this week, I’ve been making an argument as
to why the agreement that we’ve struck to provide billions of
dollars in payroll tax cuts that can immediately help
rejuvenate the economy, as well as tax cuts for
middle-class families, unemployment insurance for
folks who desperately need it, credits for college,
Child Tax Credits, as well as a range of business
investments credits are so important to make sure that
we keep this recovery moving. I just had a terrific meeting
with the former President, President Bill Clinton. And we just happened to have
this as a topic of conversation. And I thought, given the fact
that he presided over as good an economy as we’ve seen
in our lifetimes, that it might be useful for him
to share some of his thoughts. I’m going to let him
speak very briefly. And then I’ve actually got
to go over and do some — just one more Christmas party. So he may decide he wants
to take some questions, but I want to make sure that you
guys hear it from him directly. Former President Clinton:
Thank you very
much, Mr. President. First of all, I feel
awkward being here, and now you’re going to
leave me all by myself. (laughter) Let me just say a
couple of things. First of all, I still spend
about an hour a day trying to study this economy. And I’m not running
for anything, and I don’t have a
political agenda. I just — I try to
figure out what to do. I have reviewed this agreement
that the President reached with Republican leaders. And I want to make full
disclosure I make quite a bit of money now, so the position that
the Republicans have urged will personally benefit me. And on its own, I wouldn’t
support it because I don’t think that my tax cut is the most
economically efficient way to get the economy going again. But I don’t want to be in the
dark about the fact that I will receive the continuation
of the tax rates. However, the agreement taken
as a whole is, I believe, the best bipartisan agreement we
can reach to help the largest number of Americans, and to
maximize the chances that the economic recovery will
accelerate and create more jobs, and to minimize the chances
that it will slip back, which is what has happened in
other financial collapses. Like, that’s what Japan faced,
and it’s something that we have to avoid in America. Why do I say that? First of all, because clearly
the extension of unemployment, which gives people a percentage
of the income they were previously making, will — that money will be spent and it will bolster the economy for
the next couple of years. Secondly, the conversion of
the Make Work Pay Tax Credit, which the President passed
before, which goes to — went to 95% of the
American people, converting that into an $120
billion one-year payroll tax relief act is, according to
all the economic analyses, the single most effective tax
cut you can do to support economic activity. This will actually create
a fair number of jobs. I expect it to lower the
unemployment rate and keep us going. Thirdly, and one thing I haven’t
seen much about in the reports, this agreement will really help
America over the long term, because it continues the credits
for manufacturing jobs related to energy coming in to America. And I’ll remind you, just
in the last two years, there have been 30 high-powered
battery factories either opened or presently being
built in America, taking us from 2 to 20% of
the world’s share of that. And we’re going to
probably be at 40% by 2014. This is a really
important thing, bringing manufacturing
back to America, because it’s a huge multiplier
to create new jobs. So in my opinion,
this is a good bill. And I hope that my fellow
Democrats will support it. I thank the Republican leaders
for agreeing to include things that were important
to the President. There is never a perfect
bipartisan bill in the eyes of a partisan. And we all see this differently. But I really believe this will
be a significant net-plus for the country. I also think that in general a
lot of people are heaving a sigh of relief that there’s finally
been some agreement on something. But don’t minimize the impact
of the unemployment relief for working families, of
the payroll tax relief, and of the continuation of
the incentives to grow jobs, which will trigger more credit
coming out of the banks. Keep in mind, ultimately the
long-term answer here is to get the $2 trillion, which banks
now have in cash reserves uncommitted to loans, out
there in the economy again, the $1.8 trillion in corporate
treasuries not now being invested out there
in the economy again. I think this is a net-plus. And you know how I feel. I think the people that
benefit most should pay most. That’s always been
my position — not for class warfare reasons;
for reasons of fairness in rebuilding the middle
class in America. But we have the distribution of
authority we have now in the Congress and what we’re
going to have in January, and I think this is a much, much
better agreement than would be reached were we to
wait until January. And I think it will have a much
more positive impact on the economy. So for whatever it’s worth,
that’s what I think. President Obama:
That’s worth a lot. Former President Clinton:
I would like to say one other thing on another subject, just to be recorded
on the record. They don’t need my support on
this because we have some good Republican support, including
the first President Bush. I think this START agreement is
very important to the future of our national security. And it is not a
radical agreement. Boris Yeltsin and I agreed
in principle on this same reduction, and there was no way
in the wide world he could get it through the Russian Duma
that existed at the time in his second term. So we didn’t proceed because
it couldn’t be ratified there. I’m not sure the Senate
would have ratified it then, but I think they will now
with enough encouragement. But the cooperation that we
will get from the Russians, and the signal that will
be sent to the world on nonproliferation, when all these
other things are going on which threaten to increase
nuclear proliferation, is very important. One of the things you know is
that when people fool with these weapons, they’re expensive to
build, expensive to maintain, and expensive to secure the
material that goes into making the weapons. This is something that
is profoundly important. This ought to be
way beyond party. They’ve worked very hard. They’ve worked out, in
my opinion, the details. And I hope it will be ratified. The Press:
Mr. President. Former President Clinton:
Yes. The Press:
First of all, a lot of Democrats on Capitol Hill say this is a bad deal; that President
Obama could have gotten more. What’s your message to them? And then if I could also
just ask — well, go ahead. You can answer — Former President Clinton:
First, my message is, I don’t believe that’s true because in January, they will
be in the majority. And this would dramatically
reduce their incentive to extend unemployment benefits, to
support the conversion of the Make Work Pay tax credits
President Obama enacted into this payroll tax deduction,
which as I said, I read all these
economic studies. Every single, unbiased, economic
study says the best thing you can do if you’re going to take a
tax-cut path to grow the economy is to give payroll tax relief. I just got back from a trip
to Asia with my foundation. Hong Kong, super free-market
place, had a stimulus. Well, I guess we’re not supposed
to use that word any more. (laughter) You know what they did? They gave almost
10% of the people — low-income, working people — two months free rent in public housing. They gave some money
to the seniors. But the most important thing
they did was payroll tax relief for a year. This is — all the people who study this believe it’s the number one thing, so I don’t believe they can get a better deal by waiting. And I think the other thing
that nobody is talking about, but I’m telling you it’s
important, I live out there now, and I do a lot of
this energy work, these tax credits have
made us competitive again. I didn’t see a single story that
credited Senator Reid’s election with the fact that with three
weeks before the election, two new plants were
announced in Nevada, which has the highest
unemployment rate in the state, a thousand people
making LED lights, a thousand people making wind
turbines for that big wind farm in Texas, both companies owned
by Chinese interests who said in no uncertain terms we’re here
because you decided to compete with us for the future, and you
gave us tax credits so we can pay higher labor costs because
we save the transportation costs because of these credits. I don’t believe there is
a better deal out there. The Press:
And then as a follow-up,
you mentioned the Republican Congress taking
office in January. What was your advice to
President Obama today about how to deal with the Congress
from the opposition party? Former President Clinton:
I have a general rule which is that whatever he asked me about my advice, and whatever I say
should become public only if he decides to make it public. He can say whatever
he wants, but — The Press:
What do you think? (laughter) President Obama:
Here’s what I’ll say, is I’ve been keeping the First Lady waiting for about half an hour,
so I’m going to take off, but — Former President Clinton:
I don’t want to make
her mad, please go. President Obama:
You’re in good hands, and
Gibbs will call last question. Former President Clinton:
Yes, help me. Thank you. Yes, go ahead. The Press:
Mr. President, is there anything else that can be done in your opinion to loosen up the private
credit markets that have been so tight? I mean if people can’t get
their hands on capital, how can they be the
entrepreneurs that they want to be? And this is something that the
Republicans have fought all along. What’s the next step? Former President Clinton:
First of all, let me just
run through the numbers again. We’re not talking
about high-risk stuff. That’s what the financial
regulation bill tries to stop and charges the federal
regulators with — even if the Wall
Street banks get — we all know they have to be able
to have more leverage than the traditional community banks tend
to want up in the Dakotas or Arkansas or anyplace else. But let’s start with
the community banks. If they loan money
conservatively, they can loan $10 for every
dollar they have in the bank. If they have $2 trillion
uncommitted to loans, even though some of them may
have a few mortgage issues unresolved, most of that
mortgage debt has been off-loaded to Fannie Mae or
Freddie Mac or has vanished into cyber-sphere with those
securitized subprime mortgages. I don’t like the securities,
but they happened. So what I believe is
going on is, first of all, the business community has not
come forward as aggressively — the small business community. And this bill did preserve all
those small business incentives that were enacted by the
Congress in the previous two years. There are like 16 different
measures that give incentives for small businesses to take
loans and loan guarantees and that kind of thing. It appears to me that the
community banks, at least, are somewhat uncertain about
how the financial reform bill, which I supported, applies to
them and what the costs of compliance might be. You remember, the two big things
that bill did was to require the federal regulators to monitor
every month the big banks that caused the meltdown and to
require them to set aside more capital. And then it set up an orderly
bankruptcy mechanism and banned future bailouts. It said — that bill actually says: If this happens again, the shareholders and the
executives have to eat it. But there’s a whole lot of other
things in credit cards and other matters that deal with it. I think it is really, really
important just to do an aggressive, 100%
information drench. I mean I would go so far as to
do it bank by bank by bank by bank so that everybody knows
exactly what they have to do, exactly what it costs and
how quickly this can all be resolved. And then I think it’s important
to make sure that all these community banks and the people
who might borrow from them understand where the small
businesses of America are and where the manufacturers are with
the various loan guarantees and credits and deductions that are
available under these laws. I still think — you know, we too often assume that when a law passes, people know it passed, and they know what’s in it, and they know how
it applies to them. That may not be true in this
case because there’s been so much activity and so much debate
about it that was a debate that occurred in the context of a
campaign rather than in the context of, “Let me tell you
how this works, come here, let’s figure out how
to get you a loan.” So in my opinion, that’s what
needs to be done over the next two or three months. The money is there to get this
country out of this mess. Two trillion dollars in the
bank is $20 trillion in loans. Now, there’s not that much
guaranteed, but there’s plenty. And I also believe the same
thing with big companies. We should analyze the situation
of every company that at a minimum has got a $1 billion or
more in cash and ask them to be honest with us about what would
it take to get you back in the investment business. These companies clearly have a
preference for reinvesting in America, or they’d have put this
money somewhere else already. They have got —
it’s an amazing thing, $1.8 trillion in
corporate treasuries, 6.2% of their capitalized value. It’s been since 1964 that they
had those kind of cash balances relative to their value. So those are the things that
I think we have to do now, so I can’t answer your question,
except the bankers I talked to in Arkansas, in small places
that I visit around where I live in New York, they all say, we
know we need to ramp up the activity. We got to get the green light
about how we’re going to comply with these laws,
and then we’ll go. And you might be able to
actually use your program to do it. You might be able to bring
some community bankers on, bring some regulars on, work
through this stuff for people. I just think they
don’t know yet. Yes. The Press:
Some of your fellow Democrats are saying that the President just didn’t go in and fight hard
enough for his core principles; that he caved in. Politically, some say that he
should be a one-term President. Has he damaged not only
his own political path, but has he let the party down? Former President Clinton:
I don’t believe so. I think — I just respectfully
disagree about that. I think that a lot of — look,
a lot of them are hurting now. And I get it. And you know I did
133 events for them. I believe the Congress in the
last two years did a far better job than the American
people thought they did, at least the American people
that voted in the midterms. And I went to extraordinary
efforts to try to explain what I thought had been done in the
ways that I thought were most favorable to them. But we had an election. The results are what they are. The numbers will only get
worse in January in terms of negotiating. And the President — look, if we had 5% growth and unemployment was dropping like a rock, maybe you could have a so-called Mexican standoff, and you could say, it will be you, not me, the voters will hold responsible
for raising taxes on middle-class people if
they all go down next year. That is not the
circumstance we face. The United States has suffered
a severe financial collapse. These things take longer to get
over than normal recessions. We must first make sure
we keep getting over it. We don’t want to slip
back down as Japan did. And in order to make it
happen over the long run, that’s why the question I
was just asked is so good, is we have to go beyond
direct investments, whether they’re stimulus
projects or tax cuts, to private growth. But to get there, we have to
achieve a higher level of growth that triggers a confidence. So I personally believe this
is a good deal and the best he could have gotten under
the circumstances. I just disagree. I understand why — people have a right to disagree with him. But I disagree. Yes, sir. The Press:
Mr. President, you’ve made a number of very effective calls for the health care
plan last year. Have you been asked to make any
calls to Democratic members on the tax deal? And, secondly, there are a
lot of comparisons being made between the ’94 election
and the 2010 election. Do you think those
are analogous? Are they similar situations? Former President Clinton:
It’s like all these things
— all of you will be under enormous pressure to
develop a storyline. And there are some parallels,
and some that are different. And you know, I’m —
I’ll let you do that. I’m out of politics now, except
to say that I care about my country and I want to get
this economy going again. And I believe that it is
necessary for these parties to work together. And I think, for example, the
storyline is how well we work with the Republicans
and all that. But we’ve played political
kabuki for a year, had two government shutdowns. We can’t afford that now. The only reason we could do that
is if the deficit was already coming down in a time when
interest rates were the problem, and the economy was coming out. People just didn’t
feel it yet in ’94. We can’t afford that. We have got to pull together. And both sides are going to have
to eat some things they don’t like, because we cannot afford
to have the kind of impasse that we had last time over
a long period of time. We don’t want to slip
back into a recession. We got to keep this thing
going and accelerate its pace. I think this is the
best available option. Mark. The Press:
— any calls — The Press:
Mr. President — Former President Clinton:
Oh, I’m sorry,
George, I have not. But in fairness, as soon
as the election was over, I took my foundation
trip to Asia. Then I came back — I just
got back from the West Coast, doing my annual trip out there. There are people that support
the work I do and my foundation. I flew overnight
to get here today. And I have to leave
again tonight. If I were asked to, I would
be happy to talk to anyone. But I have not been asked. But, in fairness, the President
didn’t have a chance to. He asked me to come down today,
because he knew I was going to — Hillary and I were appearing before the Brookings Saban Forum on the Middle East tonight. Yes, Mark. The Press:
Mr. President, I get the feeling that you’re happier to be here commenting and giving
advice than governing. Former President Clinton:
Oh, I had quite a
good time governing. (laughter) I am happy to be
here, I suppose, when the bullets that are
fired are unlikely to hit me, unless they’re just ricocheting. No, I’m glad to be here because
I think the President made a good decision and because I
want my country to do well. And after the ’94 election,
I said the American people, in their infinite wisdom, have
put us both in the same boat. So we’re going to
either row or sink. And I want us to row. The Press:
Can you give us a Haiti update? Former President Clinton:
What? The Press:
Can you give us a Haiti update? I know you were there. Former President Clinton:
Yes. I had a long talk with
the Prime Minister today. And he, first of all, has done I
think a remarkable job of being a loyal prime minister, but not
being involved in the political imbroglio that’s going on,
except to try to keep calm. There was a decision made by the
electoral council to review the vote in its entirety and to ask
some outside observers to come in who are not only
credible but knowledgeable. And they will announce exactly
how they propose to do that. Today was a pretty calm day. And they expect the
weekend to be pretty calm. We are going to have our
commission meeting next week. We may move it to the
Dominican Republic. But I think the best thing that
we can do for the people of Haiti is to prove that
Haitians on the commission, and the donors, are still
committed to the long-term reconstruction process, whoever
gets elected president. The best thing they can do is — everyone understands they had to carry out this election
under enormously difficult circumstances. Even getting the ID cards
to everybody, as you know, proved difficult, because they
were in those tented areas. But what I can say is
it was calmer today. It appears they are going to try
to have a recount procedure, which they hope will acquire
more support from across the political spectrum. And, meanwhile, we want the
commission to keep working. The World Bank just released
about $70 billion of the $90 billion in projects we
approved four months ago. So that will go in. We’ll be hiring more people
immediately on those projects. And we’re going to approve a
lot more projects on the 14th. And that’s my focus now. Yes. The Press:
Mr. President, I have to ask, do you think your appearance here today will help sway votes where
they’re needed the most right now, among House Democrats? Former President Clinton:
I have no idea. The Press:
The reason I ask you that is because a lot of them are sort of antsy. And I know you never used the
term back in your first term, but they’re antsy about the
precedent of triangulation. They’re still
smarting over that. And your appearance here today
might not necessarily push them in the direction that the
President wants them to be pushed. Former President Clinton:
That’s right, it may not. But I would like to — you
know, I told President Obama, and I’ll tell you, you ought to go back and read a lecture that Franklin Roosevelt gave in
1926 before he was the Vice Presidential nominee, before
he came down with polio, to his old alma
mater (inaudible), in which he discussed the dilemma of the progressive movement in American politics. I have an enormous amount of
respect for the Democrats in the House. And I’ve already told you I
regret that so many of them lost. I think some of our
best people lost. And I get where
they’re coming from. I can only tell you that my
economic analysis is that given all the alternatives that I can
imagine actually becoming law, this is the best economic
result for America. And I think it is enormous
relief for America to think that both parties might
vote for something, anything that they
could both agree on. And there is no way you can have
a compromise without having something in the bill
that you don’t like. So I don’t know if I
can influence anybody. Heck, I couldn’t — you know, I’d go some places and the people I campaigned for won. In some places, the people
I campaigned for lost. I don’t know. All I can tell you
is what I think. The Press:
Considering your
credibility on the deficit, what do you think about concerns
about the short-term deficit and the long-term deficit, and
where our country is going? Former President Clinton:
I’m happy to address that because I don’t think that — I don’t think I did a good
enough job in this election season, obviously, and
I’m not sure we did. The difference between now
and when I became President, when we immediately went after
the deficit, is quite simple. When I became President, it was
after 12 years in which the accumulative debt of the
country had risen from $1 to $4 trillion. It was the first period in
American history when we had ever run structural
deficits of any size. And so we were having to
pay too much for money. It was costing us a lot to
borrow money in the public sector, taking I think it was
14 cents of every dollar on the debt at the time. And it was crowding out the
opportunity of the private sector to borrow money,
and raising their cost. And that’s sparked the recession
that we had in the early ’90s. What happened this time
was totally different. This time there was a collapse
of a financial system, which took interest
rates to zero. Now, I know there’s
a lot of alarm now. People say, oh, the interest
rates went up on bond and in debt in the last couple of days. And they said, oh, is it because
of the increase in the — increasing the deficit
in the short term? Is it because of
the economy growing? That doesn’t bother me. We have to get out of deflation. The biggest problem we
have now is deflation. So, look, I’m a
Depression-era kid. I don’t like deficits
ever, really. We had four surpluses
when I was President. That’s what I like. I like balanced budgets and
surpluses; when you have growth. But if I were in office now,
I would have done what the President has done. You have to first put the brakes
on a contracting economy. And then you have to somehow
hold it together until growth resumes. When growth resumes, you have to
have interest rates higher than zero. So you should actually —
now, if they get too high, you’ll be alarmed. But you should be encouraged
that interest rates are beginning to creep up again. It’s the sign of
a healthy economy, and the idea that there would
be competition for money. I do believe that we’ll have to
take aggressive and disciplined action to eliminate the
structural deficit again. And I think it was a mistake to
go back to structural deficits. I think if America were out
of debt on a normal basis, and we didn’t have to borrow
money from our major trading partners, we would have more
economic freedom and economic security. So I want to see what
comes out of this, but I expect to support some
very vigorous actions to eliminate the deficit and
get us back to balance. Yes, one more, then I’ve got to get out of here; go ahead. The Press:
Thank you, Mr. President. Beyond this pending tax deal,
there are enormous issues of importance that are unfinished,
from education to energy, the deficit. And this is still a
very divided country. Do you think the American people
want a President to compromise with the opposing party? And is that a message that you
think Democrats are going to have to accept? Former President Clinton:
Yes, but I also believe that it’s a message Republicans are going to have to accept. Keep in mind that many of the — the really interesting thing was — is that a lot of the hardcore
conservatives think the Republicans gave too much. Read Charles Krauthammer’s
column in the Post today. He’s a brilliant man, and he
pointed out that they got the divisive tax cuts, but most
of them were targeted to middle-class working people — that’s what the payroll tax cut is — that the unemployment
benefits were extended, which some of them
did not want to do, and that the American people, by
two to one, support them both. So there are some conservatives
who don’t believe in the economic theory I
just advanced to you; who believe that the President
and Democrats got more out of this than the Republicans did. So I think that’s healthy, too,
because everybody has got to give a little. Yes, I think the one thing that
always happens when you have divided government is that
people no longer see principled compromise as weakness. This system was set up to
promote principled compromise. It is an ethical thing to do. In a democracy where
no one is a dictator, we would all be at each
other’s throats all the time, and we would be in a state of
constant paralysis if once power is divided, there
is no compromise. The Press:
What’s the political
fight worth having? What would you tell Democrats
the political fight worth having is right now? Former President Clinton:
Well, I think it’s worth fighting against the repeal of the health care law. I would be in favor — and I can give you four or five things off the top of my head I think should be done to improve it. I think it’s worth a ferocious
fight to avoid repeal of the student loan reform, which I
believe is the best chance we’ve got to take America back to
number one from number nine in the percentage of adults in the
world with four-year college degrees. I think it’s worth fighting
against repeal of the financial reform and the assurance it
gives us that we won’t have another meltdown, and if we do,
there won’t be another bailout. I think there are a lot
of fights worth having, and I presume the Republicans
want to fight those, too, since they ran on that. And they’ll be able to
have these differences. But this holds the promise that
after the fights are over, we’ll be able to find principled
compromises on those areas, as well. And to me that’s worth doing. But first, the economy first. We can’t go back
into a recession. We have to keep crawling
out of this mess we’re in. And this is a good first step,
both on the substantive merits and on the psychological relief
it gives to the American people in general, and the small
business people and community bankers and others who can start
doing things that will help get better in particular. Thank you.

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