And best of all, he's bound and determined to do what no Republican could do -- gut Social Security:
OBAMA: And so the payroll tax provision that is included in this package is going to help spark economic growth that will help. Now, it doesn't solve our medium- and long-term problems, so we're going to still have to make some very tough decisions — and these, too, are going to be unpopular.
And I promise, I'm going to get criticism from Democrats and Republicans throughout the year in terms of the choices that I am going to be forcing Congress to take a square look at. Because, look, the fact of the matter is that for a decade now, we have had the tendency to think that we can keep on having all the services we want and we keep them — can keep cutting taxes as much as we want and that somehow things are going to magically balance out.
The American people understand that's not the case, and so we're going to have to be responsible about thinking: What are the programs we don't need, that don't contribute to growth, don't contribute to competitiveness, don't make sure our kids are — aren't contributing to making sure that our kids are learning and able to compete in this 21st century economy, and which things are vital investments that we have to make?
And that conversation is going to be one that can't just happen in Washington; it's going to happen all across the country. And I'm looking forward to leading that conversation.
INSKEEP: Won't Republicans argue — and, in fact, won't reality argue that any cuts will have to be even deeper because this package that you're pushing for now will mean there's even less government revenue?
OBAMA: Actually, I think that if you talk to economists, both conservative and liberal, what they'll say is the problem is not next year. The problem is, how are we dealing with our medium-term debt and deficit, and how are we dealing with our long-term debt and deficit? And most of that has to do with entitlements, particularly Social Security and Medicaid.
We've made some progress as a consequence of my health care bill in identifying areas where we can start bending the cost curve on health care. But we're going to have some more work to do across the budget.
I think there's going to have to be a fundamentally different approach to things. And I described earlier what I think that approach has to be. It's not an issue of big government versus small government. It's an issue of smart government.
But there are very few people who think that we would be better off if we've got a contracting economy or economy that's growing very little over the next year — that that somehow is going to be good for our deficit.
INSKEEP: Let me ask you about two or three years out. I'm thinking of the 1990s when President Clinton famously said, "The era of big government is over."
Because of the medium- and long-term need to restrain or cut spending, are you going to be in a position where the era of big government is going to be over again; there's going to have to be a fundamentally different approach to things?
OBAMA: I think there's going to have to be a fundamentally different approach to things. And I described earlier what I think that approach has to be. It's not an issue of big government versus small government. It's an issue of smart government.
You know, when — when families sit around the kitchen table, they say to themselves, what are the things we have to have? College education for our kids. Paying our mortgage. Getting the roof repaired. A new boiler. What are the things that would be nice to have? A vacation. Eating out. Some new clothes. And if they can afford it, they'd buy things that they'd like to have. But the first thing they do is take care of the things that we have to have.
And under that category, I'd put things like research and development, education, making sure that we're sending our kids to college, rebuilding our infrastructure to compete on the 21st century, making sure that this country is safe.
The other stuff, then, we have to debate and figure out, can we get by with a little bit less in some of these other spending categories? And that's going to be a tough discussion, but it's one I’m confident we can have.
You'll — when — when we look at the deficit and the debt, I — I think it's important to understand this doesn't need to be Armageddon. This — this is not a situation where we've got to slash and burn everything. It does mean we've got to make choices. And it means that discussions have to be serious and they've got to be based on fact.
We — we're not going to be able to deal with our deficit just by eliminating foreign aid, for example, which some people suggest. Well, you know what? That only accounts for 1 percent of our budget. It's not going to happen just because we eliminate earmarks. I happen to think that that's a bad way of doing business, but earmarks account for 1 percent or less of the federal budget.
We've got to look at a whole range of things — where the money goes. And that includes entitlements; that includes defense; that includes a whole host of discretionary spending where we can probably do more and do it smarter with less money, if we are actually making some tough choices.
If anyone actually believes that defense is going to take this hit, guess again. The defense industry puts too much money into the pockets of Washington politicians to take a hit. And isn't it funny how Social Security is now called an "entitlement" -- as if no one pays into it but expects a handout.
Tell you what: Give me the almost $200K that I and my employers have put into Social Security over my working life, with accumulated returns according to the Dow Jones Industrial Average since 1975, and I'll shut up about Social Security.