Interview With Ed Henry on CNN's "The Situation Room"

Ed Henry: Well, since the last time we have interviewed you, you have won the Nobel Peace Prize. And, by the end of this week, you will have visited 20 countries as president --

The President: Yes.

Ed Henry: -- the most of any U.S. president in his first year. What have you accomplished?

The President: Well, a couple of key things.

Number one, I think that we have restored America's standing in the world. And that's confirmed by polls. I think a recent one indicated that, around the world, before my election, less than half of the people, maybe less than 40 percent of the people, thought that you could count on America to do the right thing. Now it's up to 75 percent.

That builds goodwill among publics that makes it easier for leaders to cooperate with us. We then have seen very specific areas of cooperation around the nuclear issue. If you just take the example of Iran, you know, we started off saying that, right at -- at the time of my inauguration, the -- the world community was still divided on what Iran's intentions were.

And we mobilized the international community to present a credible, legitimate offer to the Iranians that would show their intentions to pursue peaceful nuclear energy, as opposed to weapons. Iran, so far, has not been able to say yes to that offer, and as a consequence you now have validators like the International Atomic Energy Agency, you've got the P-5 plus one, which includes Russia and China, all saying to Iran, you're on the wrong side of history here. And that means if Iran continues to rebuff the international community, us setting up sanctions or other measures that put pressure on them becomes much easier.

Ed Henry: But the Chinese president is not endorsing sanctions yet. And when people look at other issues like Mideast peace, you could argue that the peace process is worse off now than it was a year ago. You promised transformational change. I know it's not going to happen overnight, but on the other hand, do you feel some pressure to get some of these things done?

The President: Well, I think that there is no doubt that in the same way on domestic policy our first job was to stabilize the situation and prevent disaster, on the international stage our first job was to stabilize the situation to allow us to move forward. A lot of our initiatives have not yet borne fruit, but we knew that something like Iran's nuclear program wasn't going to be solved in a year.

The question is, are we moving in the right direction? And I think there's no doubt that we are.

Ed Henry: While we have been in Asia, your attorney general decided that there were going to be civil prosecutions of the 9/11 mastermind, other terror suspects. Did you sign off on that?

The President: You know, I said to the attorney general, "Make a decision based on the law." We have set up now a military commission system that is greatly reformed, and so we can try terrorists in that forum.

But I also have great confidence in our Article 3 courts, the courts that have tried hundreds of terrorists suspects who are imprisoned right now in the United States. And, you know, I think this notion that somehow we have to be fearful that these terrorists possess some special powers that prevent us from presenting evidence against them, locking them up and, you know, exacting swift justice, I think that has been a fundamental mistake.

Ed Henry: So, that was his decision, but you'll take responsibility if it goes wrong?

The President: I always have to take responsibility. That's my job.

Ed Henry: Now, on Afghanistan, have you made a decision on troop levels in your own mind? And when we hear that you don't want the U.S. to be in Afghanistan forever, obviously, do you think you'll be able to get most U.S. troops home by the end of your presidency, or will this be something you hand off to the next president just as you were handed off Iraq and Afghanistan?

The President: My preference would be not to hand off anything to the next president. One of the things I would like is the next president to be able to come in and say, I've got a clean slate and I can put my vision forward that I presented to the American people.

We are very close to a decision. I will announce that decision, certainly in the next several weeks. The pieces involved, number one, making sure that the American people understand we do have a vital interest in making sure that al Qaeda cannot attack us and that they can't use Afghanistan as a safe haven.

We have a vital interest in making sure that Afghanistan is sufficiently stable, that it can't infect the entire region with violent extremism. We also have to make sure that we've got an effective partner in Afghanistan, and that's something that we are examining very closely and presenting some very clear benchmarks for the Afghan government. We have to make sure that we are training sufficient Afghan troops so that they can ultimately secure their own countries.

Ed Henry: Do you trust President Karzai?

The President: You know, I think that President Karzai has served his country in important ways. If you think about when he first came in, there may not have been another figure who could have held that country together. He has some strengths, but he's got some weaknesses. And I'm less concerned about any individual than I am with a government as a whole that is having difficulty providing basic services to its people in a way that confers legitimacy on them.

So, these are all factors that have gone into the decision- making. I am very confident that when I announce the decision, the American people will have a lot of clarity about what we're doing, how we're going to succeed, how much this thing is going to cost. You know, what kind of burden does this place on our young men and women in uniform? And most importantly, what's the end game on this thing? Which I think is something that unless you impose that kind of discipline, could end up leading to a multiyear occupation that won't serve the interests of the United States.

Ed Henry: Let's talk about health care and the economy. You've set a lot of deadlines for fellow Democrats and they have missed many of them on Capitol Hill and you hear Democrats sometimes say why isn't the president more like LBJ and grab them by the lapels and get this done, get more specific and enforce these deadlines?

The President: The truth of the matter is that we've been very specific. LBJ didn't have the Congressional Budget Office, just to give you one example, of how complicated the process in Washington has become. You know, essentially Harry Reid was ready with a Senate bill several weeks ago, but it has taken this long for the Congressional Budget Office to present its best estimates of how much this is going to cost and how many savings will be obtained -- what kind of savings will be obtained from the legislation, so there are just a lot of procedural hurdles that explain why health care hasn't been dealt with in 40, 50, 70 years, but I remain confident that we are going to get this done and we're going to have a bill that reduces our deficit, bends the cost curve, covers millions of people who don't have health insurance right now and for people who do have health insurance makes their insurance more secure. I'm absolutely confident that we'll get that done.

Ed Henry: On the economy, we received a lot of questions from CNN I-reporters who went to the website and wanted to ask you a question directly. This is one is from Guy Watson in Albuquerque, who says he's a disappointed Obama voter. Why have you chosen to give our tax money to the banks without holding them responsible or forcing them to lower their rates for start ups and to facilitate refinancing of foreclosed homes? You hear that a lot.

The President: I do. I think it's important to understand, first of all, that the so-called bank bailout started before we came in. I actually think it was the right thing to do in a crisis. We had to make sure that you did not have a complete meltdown which would have been even worse, and -- and I've said in the past I supported President Bush's decision to move forward on that.

Once we got them in a place where they were no longer in crisis the problem is things were put together so quickly last year that there weren't as many strings attached as we would have liked and so what we've tried to do is to create some structures after the fact that would impose more accountability, more discipline. The most obvious example would be the rules on executive pay, but it's always hard to do, particularly when a lot of these banks now got well and then just paid the money back so we now no longer have leverage. This is why it's so important moving forward to make sure that we've got a financial regulatory framework that protects consumers, makes sure that they are not getting gouged, make sure that there's a lot of clarity in terms of mortgages that they are getting.

In the meantime, just on an emergency basis, we're trying to do everything we can to poke, prod, incentivize banks to help responsible homeowners who through no fault of their own are finding it very tough for them to pay for their mortgage, to make sure that businesses are getting loans and we've massively expanded small business lending through the SBA.

Those are all steps that we're taking, but, look, I understand people's frustrations. I mean, the American people have gone through a very tough year, and, you know, and my job as president is to help navigate through this tough year, and, you know, people who don't have a job right now, people who have lost their homes, you know, I'd be mad, too, and they expect me to do something about it, and, you know, my job is to within the institutional constraints that I have and the resource constraints that we have, because we also inherited a structural deficit of several trillion dollars, to try to make the best decisions possible to help as many people as possible.