George Stephanopoulos and Barack Obama

“ Do you really believe those business tax cuts are going to work to create jobs? Or do you put them in so you could get Republican votes?
OBAMA: Well, let's look at the package as a whole, the bulk of the package is direct government spending. And here are a few things we're going to do. We're going to alternative energy production. We are going
weatherize 2 million homes. We are going to create a much more efficient energy system.
And that's going to have enormous ramifications for the economy as a whole down the line. I think we can create a new green economy. ”

“ There are a couple of basic principles that I laid out. We've got to move quickly. We've got to make sure that any investments that we make have good long-term benefits for the economy, not just short-term.
We can't set up a situation where we're adding to the structural deficit over the long-term. We can't have waste and abuse in it. We can't have earmarks in it.
STEPHANOPOULOS: Well, let's look at some --
OBAMA: But -- just to finish the point, if people have better ideas on certain provisions, if they say, you know, this is going to work better than that, then we welcome that. ”

“ Here's what we know though, that the sooner a recovery and reinvestment package is in place, the sooner we can start turning the economy around. We can't afford three, four, five, six more months where we're losing half a million jobs per month. ”

“ Obama on Economy, 'Grand Bargain' Obama Defends Tax Cuts in Stimulus Plan America's Economy Full Coverage That's as important as what's happening in terms of consumer spending or business investment, because if companies can't make payroll, people get laid off. If a guy can't borrow for a car loan, that affects not only him, but the car dealer and the car manufacturer. ”

“ And I think that we can gain -- regain the confidence of both Congress and the American people that this is not just money that is being given to banks without any strings attached and nobody knows what happens, but rather that it is targeted very specifically at getting credit flowing again to businesses and families. ”

“ Now as difficult as it is to spend money wisely, it's going to be even tougher to make some of the adjustments that are needed to get the deficit under control.
STEPHANOPOULOS: But you're going to face some real hard choices. You brought up health care a couple of times&
OBAMA: Absolutely.
STEPHANOPOULOS: & in this interview already. During the campaign you said you would pay for health care by repealing the Bush tax cuts on the wealthy. According to the CBO, you're going to get a $1.2 trillion to $1.8 trillion deficit even if all of the tax cuts are repealed. ”

“ Let's not only provide a jumpstart to the economy and immediately or save three-million jobs, but let's also put a down payment on some of the structural problems that we have in our economy.
STEPHANOPOULOS: It has been pretty well-received in the Congress. But you're getting some pushback as well, especially from Senate Democrats on the tax cut portions. Senator Tom Harkin said this is trickle down economics all over again. They're focused especially on the business taxes. ”

“ But more broadly, will your policy in the Middle East, will it be building on the Bush policy or a clean break?
OBAMA: Well, you know, I think that if you look not just at the Bush administration, but also what happened under the Clinton administration, you are seeing the general outlines of an approach.
And I think that players in the region understand the compromises that are going to need to be made. But the politics of it are hard. ”

“ I think that when you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families on the ground who may have lost their homes because they lost their jobs or because they got sick, we haven't done enough there. ”

“ And it's clear there's a lot of pain out there, a lot of fear. And if I could sum up the questions, it would be very simple, can you fix this?
OBAMA: I think we can fix this. But it's going to take some time. It's not going to happen overnight. And what we tried to do this week was, first of all, explain where we are in the economy. That the jobs numbers this week were terrible. That means we've lost 2.5 million last year. That's the most since World War II. You've got another 3.4 million people who have gone from full-time work to part-time work, or want full-time work. ”

“ We know exactly what they're planning, where they're positioned. If you have a small group of people in today's world with today's technology who are intent on doing harm and are willing to die, that is something that's always going to be a challenge.
STEPHANOPOULOS: Your smile goaded me into another question. I was thinking about Harry Truman. You know when he took office he didn't even know about the Manhattan project, found out about it after he was president. Have you been shocked by anything you've learned? ”

“ Some of them, for example, accelerating the depreciation, accelerating the losses that can be written off by businesses, it turns out those are short-term, temporary measures that actually can have an impact. ”

“ OBAMA: It is more difficult than I think a lot of people realize and we are going to get it done but part of the challenge that you have is that you have a bunch of folks that have been detained, many of whom who may be very dangerous who have not been put on trial or have not gone through some adjudication. ”

“ And so, my focus is to try to be able to describe in simple, plain terms what are the challenges we face, but then also to let people know I have every intention of working with the American people so that we meet those challenges. ”

“ We cannot have two administrations at the same time simultaneously sending signals in a volatile situation. But what I am doing right now is putting together the team so that on January 20th, starting on day one, we have the best possible people who are going to be immediately engaged in the Middle East peace process as a whole. ”