Interview With Michael Smerconish on MSNBC

THE PRESIDENT: [in progress] -- worth talking to.

SMERCONISH: You know, I recognize I'm on the clock, so let's do it.

THE PRESIDENT: Let's fire away.

SMERCONISH: All right. The election is six days away. I saw, Mr. President, a recent Pew Research poll that said, among Republican voters compromise is not a virtue. They value politicians who stick to principles rather than those who compromise. And you'll not be surprised to hear that that's what I hear often from my radio listeners.

So the question is this: If control of the House changes, as now appears likely, and it's brought about by voters who want to put the brakes on you, how are you going to govern for the next two years?

THE PRESIDENT: Well, first of all, you know, I think the only poll that matters is going to be on November 2nd. And I still feel confident that it is a very close race in terms of the House. You've got close races all across the country, including in your hometown. So we're going to have to wait and see what happens. And a lot of it is going to depend on turnout.

Having said that, there's no doubt that voters across the board, I think, want to see Washington work. They don't want games. They don't want posturing. They don't want business as usual.

They want us to focus on them, on jobs, on the economy, on keeping small businesses open. And my expectation is, is that Republicans, should they win additional seats, should they be in a position to hopefully take more responsibility working with us, are going to say to themselves that it's important for us to show some accomplishments over the next couple of years.

And I think there's some areas where traditionally we've had bipartisan agreement. I'll give you an example -- infrastructure. You know, traditionally, that hasn't been a Democratic or a Republican issue. We should have the best infrastructure in the world. We used to have the best roads, the best airports, the best rail systems. We don't anymore, and it's important for us to, I think, put people back to work right now doing the work that America needs done. And that's the kind of thing that I think we could get bipartisan support.

The same is true on potentially reducing our debt and our deficit. Everybody agrees that we have to get control of our deficits. I think us working together, Democrats and Republicans, with a responsible plan that makes sure that we're protecting those core investments like education, that help improve economic growth long term, but also eliminating wasteful spending, is something where we should be able to get some agreement.

SMERCONISH: Well, I'm glad you raised the deficit, Mr. President, because on the subject of the economy, I've been watching, and it seems like the Brits have thrown under the bus one of their own in John Maynard Keynes. And you know, Keynes was THE proponent of deficit spending by government to avoid recession.

And what occurs to me, sir, is that while your approach has been an $800 billion stimulus, over there they're raiding the retirement age, they're making 130 billion in spending cuts, and they're eliminating a half million jobs. Which begs this question, why isn't that the right approach for us?

THE PRESIDENT: Well, keep in mind, first of all, that they had a big stimulus program over the course of the last two years. So actually, Britain has taken the same approach that we have, and most countries have taken the same approach, which is that in crisis when you had a complete collapse of the economy and jobs were being shed at a pace of hundreds of thousands a month, that it was very important to make sure that the government was able to provide a backstop and allow businesses to heal and recover.

Now, we've done that over the last two years. The question is, what do we do going forward? And our problem has not been as bad as Britain's in terms of debt relative to GDP. Our problem is a long- term structural problem that has to do with the fact that we've got an aging population, we've got a bunch of entitlements that are very expensive and are very popular.

People like Social Security, they like Medicare. I think that those are pillars of security for people in the retirement age. And so we have to make sure that those are there for future generations, but we've got to make sure that we make some adjustments so that those programs are in place.

And I think that we can responsibly set a pathway where, over the course of several years, we are reducing our deficit without endangering economic growth, without endangering, you know, the core investments that are required to make sure that the American dream continues, and without completely shredding our safety net.

SMERCONISH: In a word, what I hear from listeners on a day- to-day basis is, angst. And you talk about the American dream. I was raised to believe that, of course, if I worked hard and had a good education, I would further those achievements of my folks. What I hear from people is a concern that that's no longer the case. They're fearful that their own children will continue to exceed their own opportunities.

THE PRESIDENT: Well, look, we've gone through a tough decade. I mean, obviously, we've been focusing mostly on this brutal recession that we've gone through, the worst since the Great Depression. But between 2001 and 2009, middle-class families saw their income go down by 5 percent. During that period, job growth was more sluggish than anytime since World War II.

So middle-class families have every right to be frustrated and concerned. And the answer is going to be making sure that we are doing what we've always done best, which is innovate, have a dynamic private sector that is investing in new plants and new equipment and hiring new workers. We've got to have a government that is lean and mean, but also making important investments that foster long-term growth. I already mentioned infrastructure. Making sure that we've got the best education system in the world.

We used to be ranked number one in the proportion of college graduates. We now rank ninth. We now rank 21st and 25th, respectively, in our math and science education. Those are all critical changes that need to be addressed. And we have begun addressing them over the last two years.

So for example, we took away tens of billions of dollars that were going in the form of unwarranted subsidies to banks, and we've made sure that that money was going into making student loan programs cheaper so that more people have access to college educations. That's going to be critical for our long-term growth.

I will say, this is an example of the choice that we confront in this election, because my colleagues on the Republican side right now have said that they want tax cuts for the top 2 percent, the wealthiest Americans. And that would cost $700 billion, and they have no way of paying for it. But part of the way that they're suggesting to pay for it is to potentially cut education by 20 percent. That's not a smart way for us to get our debt and deficits under control. We don't want to undermine those things that help us grow over the long term.

SMERCONISH: But I guess that's the reason why I brought up the British model or the British example, is because what I hear from folks on a day-to-day basis is they want to see some corresponding reduction of federal spending. You know the perception of those that you most need to reach. The perception is that the spending is wildly out of control.

THE PRESIDENT: You know, the truth of the matter is, is that the budget that we've set up, where we've proposed freezing non- defense discretionary spending, if we followed that program would mean that non-defense discretionary spending, everything other than defense and security spending, would actually be lower as a percentage of our GDP than any time in 50 years.

So we each year have identified billions of dollars in cuts and wasteful spending. I am somebody who firmly believes that if a federal program isn't working, it should be cut, it should be eliminated. And you know, as I said before, part of what we have to recognize is that over the last two years we had a brutal recession and a critical crisis that had to be addressed. And that did increase the deficit.

I mean, the fact of the matter is, is that we would have seen hundreds of thousands of teachers laid off, hundreds of thousands of firefighters and police officers laid off. This isn't just at the federal level. It's also at the state level. We had to help them because their budgets were getting decimated by the severity of this recession.

SMERCONISH: Mr. President --

THE PRESIDENT: But having said that that, you know, that was a crisis moment that had to be addressed, what people are actually right about is that we've got to make sure that, moving forward, we're doing so in a responsible way. And the best way for us to do it is to do it with a scalpel, not a machete, and to make sure that the cuts we're making are not eliminating those things that are going to help us grow.

Because here's one interesting statistic. One percentage point of additional economic growth next year or the year after actually would do more to close the deficit than anything else that we could do, because it brings in more revenues.

So you know, if we could make sure that we are eliminating wasteful programs while at the same time growing the economy, that should be the sweet spot that we're aiming for.

SMERCONISH: Mr. President, why is no one who supported the health-care bill running on it?

THE PRESIDENT: Well, I think that you've seen a couple hundred million dollars' worth of negative TV ads that make it very difficult to do so. I mean, the fact of the matter is, is that, you know, there was an awful lot of misinformation about this health-care bill while we were debating it, and that has continued after we've finished debating it and after it's into law.

So you know, I recognize that, you know, folks feel barraged by negative information, but let's look specifically at what was in this health-care bill.

You've got us closing the donut hole so that senior citizens are able to get their prescription drugs. We've got young people who are able to stay on their parents' health-care insurance policy until they're 26-years old. We've got young people who can now get health insurance, even if they're got a preexisting condition.

We've got basically a patient's bill of rights that says that insurance companies can't drop you when you get sick, can't drop you because of some fine print in your insurance policy, can't impose arbitrary lifetime limits that mean you might be bankrupt, even though you've got health insurance if you've had a serious illness.

You know, when you look at the specific provisions of the health- care bill, they're all very popular. And you know, I think that it's going to be very important as these things get online and people are seeing how this provides more choice and more competition for them, gives them more control of their health care, gives them more options, allows them to keep their doctor, I think that a lot of this is going to go away.

SMERCONISH: You've earned more than your fair share of political stripes. Is it, politically speaking, a mistake for the Democrats, who supported the health-care proposal, not to be running on it, to go full bore in support of it out on the campaign trail?

THE PRESIDENT: You know, my strong belief, and this is just a personal theory, is that you wake up every day, you do what you think is right, and you make sure that you're not embarrassed about what you thought was right, even if it's not politically expedient. And that's how I've tried to govern.

My attitude has been that I was sent here to take on hard problems. We took over at a moment where probably the nation was facing the greatest set of challenges at least since World War II.

And you know, we should be clear and strong about the steps we took to save this country from a second Great Depression, to make sure that we still had a U.S. auto industry and can produce clean cars for the future, that we made the biggest investment in clean energy in our history so that solar panels and wind turbines are built here in the United States and not somewhere overseas, that we are working to expand exports, that we're improving our education system, that we've got a health-care system that is now on track to provide better quality at a better price.

You know, those are things that, you know, I want everybody to know about. And obviously, as long as unemployment is as high as it is, people are still going to be frustrated. There are a lot of folks who are hurting out there. You know, there are families who are losing their homes. There are people who have been looking for a job for a year.

And in those circumstances, you know, people don't want to hear a lot of happy talk, and we shouldn't pretend that we've solved every problem out there. We've got a lot of work to do.

But I am very proud of what we've accomplished over the last two years. And the key question for folks who are looking forward is, you know, what is the agenda to bring about growth and expand our middle class over the next two years? And the fact of the matter is, it's very hard to figure out from the Republicans what exactly that agenda would be.

Nobody believes that tax cuts for the wealthiest 2 percent is somehow going to significantly cut our unemployment rate. Nobody thinks that us cutting education is going to prepare us for long-term competitiveness. Nobody thinks, by the way, that Republicans actually have a very good track record when it comes to dealing with debt and deficits. Last time we had a balanced budget and surpluses was under a Democratic president, and they ran up the tab so that I inherited a $1.3 trillion deficit.

And so I think that if people are focusing on the choice in terms of whether we pursue policies that got us into this mess, or we're pursuing policies that have gotten us out of this mess and are moving us forward, then I think we will do fine in November.