Interview with George Stephanopoulos of ABC's "This Week"

THE PRESIDENT: We're definitely in a better position. Keep in mind that my entire goal throughout this exercise is to make sure that what happened on August 21st does not happen again, that we do not see over a thousand people, over 400 children subjected to poison gas, something that is a violation of international law and is a violation of (common ?) decency.

STEPHANOPOULOS: You're confident that it won't happen again?

THE PRESIDENT: Well, I think we have the possibility of making sure that it doesn't happen again.

Think about where we were. This event happens. And the initial response is the Syrians act as if they don't know anything about it. At that point they're not even acknowledging that they've got chemical weapons. The Russians are protecting the Syrians, suggesting that there is no possibility that the Assad regime might have done this. And the inspectors weren't even in yet.

And as a consequence of the pressure that we've applied over the last couple of weeks, we have Syria first -- for the first time acknowledging that it has chemical weapons, agreeing to join the convention that prohibits the use of chemical weapons, and the Russians, their primary sponsor, saying that they will push Syria to get all of their chemical weapons out. The distance that we've traveled over these couple of weeks is remarkable.

And my position and the United States position has been consistent throughout, which is that the underlying civil conflict in Syria is terrible. I believe that because of Assad's actions, his response to peaceful protests, we've created a civil war in Syria that has led to a hundred thousand people being killed and 6 million people being displaced. But what I've also is that the United States can't get in the middle of somebody else's civil war. We're not going to put troops on the ground. We can't enforce militarily a settlement there. What we can --

STEPHANOPOULOS: In the past you said he had to go.

THE PRESIDENT: What we can do -- what we can do is make sure that the worst weapons, the indiscriminate weapons that don't distinguish between a soldier and an infant are not used. And if we get that accomplished, then we may also have a foundation to begin what has to be an international process in which Assad's sponsors, primarily Iran and Russia, recognize that this is terrible for the Syrian people, and they are willing to come in a serious way to arrive at some sort of political settlement that would deal with the underlying terrible conflict -- [inaudible].

STEPHANOPOULOS: And your -- and Vladimir Putin has become your unlikely partner in this. And, you know, even in this op-ed, which has stirred up a lot of controversy here in the United States, he said there's every reason to believe that the rebels are the ones who used the chemical weapons. So does that tell you he's going to lie to protect Assad?

THE PRESIDENT: Well, nobody around the world takes seriously the idea that the rebels or the perpetrators -- [inaudible].

STEPHANOPOULOS: He wrote it in The New York Times.

THE PRESIDENT: Well, I understand. What I said is nobody around the world takes seriously the idea that the rebels perpetrated this attack.

Now, what is true is that there are radical elements in the opposition, including folks who are affiliated with al-Qaida, who, if they got their hands on chemical weapons, would have no compunction using them in Syria or outside of Syria. And part of the reason why we've been so concerned about this chemical weapons issue is because we don't want those folks getting chemical weapons any more than we want Assad to have chemical weapons. And so the best solution is for us to get them out of there.

But with respect to Mr. Putin, I have said consistently that where the interests of the United States and Russia converge, we need to work together. And I talked to Mr. Putin a year ago, saying to him, the United States and Russia should work together to deal with these chemical weapons stockpiles and to work to try to bring about a political transition inside Syria.

STEPHANOPOULOS: But do you trust he has the same goal? Do you really trust that?

THE PRESIDENT: I don't think that Mr. Putin has the same values that we do. And I think, obviously, by protecting Mr. Assad, he has a different attitude about the Assad regime.

But what I've also said to him directly is that we both have an interest in preventing chaos, we both have an interest in preventing terrorism -- the situation in Syria right now is untenable; as long as Mr. Assad's in power, there is going to be some sort of conflict there -- and that we should work together to try to find a way in which the interests of all the parties inside of Syria -- the Alawites, the Sunnis, the Christians -- that everybody is represented and that there is a way of bringing the temperature down so that, you know, the horrible things that are happening inside the country are contained -- [inaudible].

STEPHANOPOULOS: [inaudible] --

THE PRESIDENT: I think there is a way for Mr. Putin, despite me and him having a whole lot of differences, to play an important role in that. And so I welcome him being involved. I welcome him saying, I will take responsibility for pushing my client, the Assad regime, to deal with these chemical weapons because I think that if, in fact, not only Russia gets involved, but if potentially Iran gets involved as well in recognizing that what's happening there is a train wreck that hurts not just Syrians, but destabilizing the entire region -- [inaudible] --

STEPHANOPOULOS: But aren't you worried at all that Putin is playing for time and playing you?

THE PRESIDENT: Well, you know, Ronald Reagan says "trust but verify," and I think that that's always been the experience of U.S. presidents when we're interacting with first Soviet leaders and now Russian leaders. You know, Mr. Putin and I have strong disagreements on a whole range of issues. But I can talk to him. We have worked together on important issues. The fact of the matter is, is that we couldn't be supplying all of our troops in Afghanistan if he weren't helping us in -- in transporting those supplies through the northern -- northern borders of Afghanistan. So there are a whole range of areas where we currently work together. We've worked together on counterterrorism operations.

And so, you know, this is not the Cold War. This is not a contest between the United States and Russia. I mean, the fact of the matter is, is that if Russia wants to have some influence in Syria post-Assad, that doesn't hurt our interests. I know that sometimes this gets framed or -- or looked at through the lens of the U.S. versus Russia. That -- that's not what this is about. What this is about is how do we make sure that we don't have the worst weapons in the hands either of a murderous regime or, in the alternative, some elements of the opposition that are as opposed to the United States as they are to Assad.

STEPHANOPOULOS: If one year from now Assad is in the process of surrendering his chemical weapons, but he's strengthened his hold on power, is that a victory?

THE PRESIDENT: Well, the chemical weapons issue is the issue I'm concerned about first and foremost simply because that speaks directly to U.S. interests. It speaks to the potential that other countries start producing more chemical weapons, that the ban on chemical weapons unravels, and it becomes more accessible to terrorists, which in turn could be used against us. So I have a -- so I have a -- a primary concern there.

I also believe that the U.S. has an interest in seeing a stable Syria in which people aren't being slaughtered. And it is hard to envision how Mr. Assad regains any kind of legitimacy after he's gassed or his military has gassed innocent civilians and children. And so part of my argument here is that we will not intervene militarily to bring that transition about, but all of the countries in the region and, I think, the entire world and the United Nations should have an interest in trying to bring about that stability.

STEPHANOPOULOS: What do you think Iran makes of all this? You mentioned Iran. Do you think they can look at all this and say, maybe all options aren't on the table, you're not willing to use force?

THE PRESIDENT: No, I think -- I think the Iranians, who we communicate with indirectly --

STEPHANOPOULOS: Have you reached out personally to the new president?

THE PRESIDENT: I have. And -- and he's reached out to me. We haven't spoken directly, but --

STEPHANOPOULOS: Letters.

THE PRESIDENT: Yeah.

And I think what the Iranians understand is that the nuclear issue is a far larger issue for us than the chemical weapons issue, that the threat against Iran -- against Israel that a nuclear Iran poses is much closer to our core interests, that a nuclear arms race in the region is something that would be profoundly destabilizing. And so I -- my suspicions is that the Iranians recognize -- they -- they shouldn't draw a lesson that we haven't struck to think we won't strike Iran. On the other hand, what it -- what they should draw from this lesson is that there is the potential of resolving these issues diplomatically. And --

STEPHANOPOULOS: You think they're there? You think they believe that?

THE PRESIDENT: I think they recognize, in part because of the extraordinary sanctions that we placed on them, that the world community is united when it comes to wanting to prevent a nuclear arms race in the region. And, you know, negotiations with the Iranians is always difficult. I think this new president is not going to suddenly make it easy. But, you know, my view is that if you have both a credible threat of force combined with a rigorous diplomatic effort, that in fact, you can -- you can strike a deal. And -- and I -- and I hold out -- I hold out that hope.

STEPHANOPOULOS: Final foreign policy question. Had some -- a lot of armchair criticism. I'm sure you're used to that.

THE PRESIDENT: I am.

STEPHANOPOULOS: Senator Corker, Foreign Relations Committee, said that you're not comfortable as commander in chief; it's like watching a person who's caged. The president of the Council on Foreign Relations, Richard Haass, words like ad hoc, improvised, unsteady come to mind; this is probably the most undisciplined stretch of foreign policy in your presidency. What do you make of that?

THE PRESIDENT: Well, you know, I -- I think that folks here in Washington like to grade on style. And so had we rolled out something that was very smooth and disciplined and linear, they would have graded it well, even if it was a disastrous policy. We know that because that's exactly how they graded the Iraq War until -- [inaudible].

STEPHANOPOULOS: [inaudible] -- President Bush.

THE PRESIDENT: No, what it -- what it -- what it says is that I'm less concerned about style points. I'm much more concerned about getting the policy right.

And what I've said consistently throughout is that the chemical weapons issue is a problem. I want that problem dealt with. And as a consequence of the steps that we've taken over the last two weeks to three weeks, we now have a situation in which Syria has acknowledged it has chemical weapons, has said it's willing to join the Convention on Chemical Weapons, and Russia, its primary sponsors, has -- has said that it will pressure Syria to reach that agreement. That's my goal. And if that goal is achieved, then it sounds to me like we did something right.

STEPHANOPOULOS: Five years out let's take stock. You know, I'm looking at the cover of Time Magazine this week. It says, "How Wall Street Won." And we've got polls showing that, you know, two-thirds of the country still think we're going in the wrong direction, think the economy is no more secure. What do you say to those Americans who think Wall Street is winning but they're not?

THE PRESIDENT: Let's think about where we were five years ago. The economy was on the verge of the a Great Depression. In some ways, actually, the economic data and the collapse of the economy was worse than what happened in the 1930s. And we came in, stabilized the situation. We've now had 42 straight months of growth, 7 1/2 million new jobs created, 500,000 jobs in manufacturing, 370,000 jobs in an auto industry that had completely collapsed. The banking system works. It is giving loans to companies who can get credit. And so we have seen I think undoubtedly progress across the board. The housing market has recovered.

But what is also true is we're not near where we need to be. And part of it has to do with a whole bunch of long-term trends in the economy where the gains that we've made in productivity and people working harder have all accrued to the people at the very top -- [inaudible] --

STEPHANOPOULOS: Ninety-five percent of the gains to the top 1 percent. That is so striking.

THE PRESIDENT: It is. And the folks at -- in the middle and at the bottom haven't seen major income growth, not just over the last three, four years but over the last 15 years.

And so everything that I've done has been designed to, number one, stabilize the economy, get it growing again, start producing jobs again. Number two, trying to push against these trends that had been happening for decades now. That's why we made sure that we had a tax system that was a little bit fair by asking people to pay more at the top. That's what the Affordable Care Act, health care reform, is about, is making sure that folks who had been left out in the cold when it comes to health care are able to get health care.

That's why we strengthened the entire banking system so that, you know, "too big to fail" is far less likely to be in place if, heaven forbid, there's a crisis the next time because we've said, you know, banks, you've got to double the amount of capital that you have so that you can absorb losses when you have them so taxpayers aren't bailing you out. If you do start going under, you got to have a plan, a living will, we call it, so that we don't have to come in and clean up after you; you're going to be on your own.

STEPHANOPOULOS: OK, but you do have these things, and still 95 percent of the gains go to the top 1 percent.

THE PRESIDENT: Right.

STEPHANOPOULOS: Do you look at that 4 1/2 years in and say, maybe a president just can't stop this accelerating inequality?

THE PRESIDENT: No, I think -- I think the president can stop it. I -- the problem is that there continues to be a major debate here in Washington, and that is, how do we respond to these underlying trends?

If -- if you look at -- at the data, couple of things are -- are -- are creating these trends. Number one, globalization, right? Capital, companies, they can move businesses and jobs anywhere they want. And so they're looking for the lowest wages. That squeezes workers here in the United States, even if corporations are profitable.

Technology. If you go a lot of companies now, they've eliminated entire occupations because they're now robotized. You know, we don't have travel agents. We don't have bank tellers.

STEPHANOPOULOS: It's bigger than Washington.

THE PRESIDENT: Right. So -- so there's a whole bunch of stuff that's happening in the marketplace.

But if we have policies that make sure that our kids are prepared for higher-skill jobs, if we have policies that make sure that we're rebuilding our infrastructure, because a robot can't build a road, and we need, you know, new ports and a smarter electricity grid, if we're making investments to make sure the research and development continues to happen here, if we have tax breaks for companies that are investing here in the United States as opposed to overseas, all those things can make the situation better. It doesn't solve the problem entirely, but it pushes against these trends.

And the problem that we got right now is you've got a portion of Congress who -- whose policies don't just want to, you know, leave things alone; they actually want to accelerate these trends. There is no serious economist out there that would suggest that if you took the Republican agenda of slashing education further, slashing Medicare further, slashing research and development further, slashing investments in infrastructure further, that that would reverse some of these trends of inequality.

STEPHANOPOULOS: This may -- may lead to something even more disastrous. It's deja vu all over again here in Washington. You're a couple weeks away from a government shutdown, few weeks away from a possible default one more time. Speaker Boehner says, listen, you just have to sit down and negotiate with me. Are you still absolutely refusing to talk in any way, shape or form?

THE PRESIDENT: No. No, no. Keep in mind my position here, George, because I -- I have been through this a couple times -- [chuckles] -- with Speaker Boehner.

What I'm -- what I've said is, with respect to the budget, we've presented our budget. And now it's the job of Congress to come up with a budget that keeps our long-term trends down or -- or our current trends of reducing the deficit moving forward but also allows us to invest in the things that we need to grow. And I've told him and I've told the country what I think we need to do.

I'm happy to have a conversation with him about how we can deal with the so-called sequester, which is making across-the-board cuts on stuff that we shouldn't be cutting while continuing tax breaks, for example, for companies that are not helping to grow the economy. There are ways of doing this. It's just that they haven't been willing to negotiate in a serious way on that.

What I haven't been willing to negotiate, and I will not negotiate, is on the debt ceiling.

STEPHANOPOULOS: But presidents have done that in the past, and you've done it in the past.

THE PRESIDENT: No, no, no, no. George, if you take a look, what has never happened in the past was the notion that in exchange for fulfilling the full faith and credit of the United States, that we are wiping away, let's say, major legislation like the health care bill.

STEPHANOPOULOS: [inaudible] -- not any changes in "Obamacare."

THE PRESIDENT: That -- that -- that's -- that's never happened before. And when it comes to budgets, we've never had a situation in which a party said that, you know, unless we get our way a hundred percent, then we're going to let the United States default. That's never happened, George. That didn't happen when you were working here in the White House.

STEPHANOPOULOS: But there were reforms added to the debt limit legislation.

THE PRESIDENT: The -- George, I think it's fair to say -- you -- that never in history have we used just making sure that the U.S. government is paying its bills as a lever to radically cut government at the kind of scale that they're talking about. It's never happened before. There have been negotiations around the corners because nobody had ever presumed you'd actually threaten the United States to default.

STEPHANOPOULOS: So how does this end, then? You know, they say they need changes in "Obamacare." You say you're not going to negotiate. Are you just betting they're going to cave?

THE PRESIDENT: George, here is the problem. The -- if we set -- if we continue to set a precedent in which a president, any president, a Republican president, a Democratic president, where the opposing party controls the House of Representatives, if -- if that president is in a situation in which each time the United States is called upon to pay its bills, the other party can simply sit there and say, well, we're not going to put -- pay the bills unless you give us what our -- what we want, that changes the constitutional structure of this government entirely.

STEPHANOPOULOS: So we're not going to negotiate -- [inaudible] --

THE PRESIDENT: So -- so -- so -- so we can't negotiate around the debt ceiling. If Mr. Boehner has ideas about how we can grow this economy, strengthen the middle class, put people back to work in a serious way, of course, we're happy to, you know, support the negotiations that have taken place between the House and the Senate. If we're going to continue to reduce the deficit -- and I think a lot of people aren't aware of the fact that the deficit's been cut in half since I came into office, it's going on a trend line of further reductions -- if we want to do more deficit reduction, I've already put out a budget that says let's do it. I'm willing to reform entitlements. I'm willing to, you know, cut out additional waste that may be there. But I -- what I also think we should be doing is eliminating corporate tax breaks that nobody can defend but keep on reappearing each year in the budget. If we are serious about it, there is no reason that we can't do it and do right by -- by the -- by the country.

STEPHANOPOULOS: How about -- how about beyond the deficit? You were, you know, re-elected a little more than a year ago, 332 electoral votes, 51 percent of the vote, first president since Eisenhower to do it twice. You put gun control at the top of the agenda, immigration reform, climate change -- all of it's stalled or reversing. How do you answer the argument that beyond the deficit, this has been a lost year, and how do you save it?

THE PRESIDENT: Well, on immigration reform, for example, we got a terrific bipartisan vote out of the Senate. You had Democrats and Republicans in the Senate come together, come up with a bill that wasn't perfect, it wasn't my bill, but got the job done. It's now sitting there in the House.

STEPHANOPOULOS: Not going anywhere.

THE PRESIDENT: Well -- but what I will say is this: If Speaker Boehner put that bill on the floor of the House of Representatives right now, it would pass. It would pass. So the question then is not whether or not the ideas that we put forward can garner a majority of support, certainly in the country. I mean, gun control, we had 80, 90 percent of the country that agreed with it. The problem we have is we have a -- a faction of the Republican Party, in the House of Representatives in particular, that view compromise as a dirty word, and anything that is either remotely associated with me, they feel obliged to oppose. And my argument to them is real simple. That's not why the people sent to here.

STEPHANOPOULOS: We're out of time. Final question. Your vice president is at Tom Harkin's Steak Fry in Iowa this week, and clearly, Secretary Clinton positioning for a possible run for president. You chose both of them. What do you say to your fellow Democrats when they're thinking about that possible choice? And are you determined to stay neutral throughout this whole process?

THE PRESIDENT: What I would say to folks out there is we are tremendously lucky to have an incredible former secretary of state who couldn't have served me better and an incredible vice president who couldn't -- who couldn't be serving me better. And I suspect, if you asked both of them, they'd say, it's too premature to start talking about 2016.

STEPHANOPOULOS: He's in Iowa.

THE PRESIDENT: Well, you know, Iowa's a big state, and he's an old friend of Tom Harkin's.

STEPHANOPOULOS: So you're staying completely neutral?

THE PRESIDENT: You know, listen, I -- I think -- as you pointed out, I just got re-elected last year. My focus is on the American people right now. I'll let you guys worry about the politics.

STEPHANOPOULOS: Mr. President, thanks very much.

THE PRESIDENT: I enjoyed it. Thank you, George.