Obama Interview: The complete transcript

President Obama interview on Sunday Morning

The following is the complete transcript of CBS News correspondent Anthony Mason's interview with President Barack Obama, conducted Wednesday, August 17, 2011 in Atkinson, Illinois:

Anthony Mason: Mr. President, to start with, there's talk of a new economic package that you're gonna unveil after Labor Day. And there's some details that have been leaking out. Is-- is this gonna be a comprehensive job plan that you're gonna propose after Labor Day?

President Barack Obama: Well, keep in mind that for the last two and a half years all we've been thinking about is how we get people back to work and grow the economy. And we had made some progress. We've seen over 2 million jobs created over the last 17 months. But clearly over the last six months there've been a lot of headwinds on the economy and we have not seen the kind of growth that ensure the unemployment rate coming down as fast as it needs to.

So what we've said is let's redouble our efforts and investment on putting people back to work on the front end, but let's make sure we're paying for it by dealing with the debt and deficit issues on the back end. And so what we're gonna be doing is arguing for a larger deficit reduction package than had been agreed to during this debt ceiling debacle.

It will be based on principles that are consistent with what I've been talking about for the last several months a balance approach consistent with what the bipartisan Bowles Simpson Committee talked about. And by securing those savings and stabilizing our debt and deficits over a 10- and 20-year horizon it allows us to also do more in terms of spurring job growth right now.

Mason: Are you talking about doing things beyond what you've been talking about here the last three days?

President Obama: I think we will have some additional components to it. It's still very important that we extend the payroll tax cut that we initiated in December into next year. That's $1,000 in the pocket of an average family that will boost the economy overall. We think it's still important for us to do trade deals, patent reform. So there are a host of measures that are consistent with what we said before.

But we also think that there are some additional things we need to do given that the economy has slowed down in part because of how badly I think the American people responded to the brinksmanship that we saw around the debt ceiling. That has hampered business confidence and consumer confidence and we're gonna need to give it another jump start.

Mason: There are reports that you're considering a middle class tax cut. Is that on the table?

President Obama: Well, the payroll tax cut is a middle class tax cut that, that applies to everybody who's on a payroll. We'll look at a variety of other incentives, particularly helping businesses to hire more workers. But you know, I think what you can be assured of is that the package will be paid for and that economists independently will say this is something that will help drive economic growth and jobs not just this year, but into next year.

Mason: The larger question of course is what is the reception in Congress likely to be to it?

President Obama: Well you know, it's hard these days to figure out what the reception to anything in Congress is gonna be. I mean, we've had a lot of plans that historically have had bipartisan support where we've seen resistance, particularly in the House of Representatives.

But one of the things that I've been saying on this bus tour and I think you've seen has gotten a hearty response from audiences is they want Congress to be thinking about the country and not politics. And if both Democrats and Republicans in Congress are thinking about country first and not politics first, then they'll see that whether it's a payroll tax cut, infrastructure, you know, trade deals, patent reform, these are all things that historically have secured Democratic and Republican support. There's no reason why we shouldn't be doing 'em right now.

Mason: People as you know, people look at Washington and they think it's broken to the point of being irreparable. Do you think the damage to the process is irreparable?

President Obama: I don't think it's irreparable. I mean, keep in mind, you know, as President out of necessity you read a lot of history. And there've been times when Congress was just as dysfunctional, there've been times where the country was full of vitriol in its politics. So this isn't unique to our time.

But I think what people are especially frustrated about is the fact that we're at a turning point in this country where if we make good decisions we can win the 21st century and we can continue to be the most successful country on Earth. And if we don't deal with some of these challenges, we could see a potential decline in our relative status.

And so I think the American people understand the urgency of the situation right now and recognize we don't have time to play games. You know, it's one thing when you had President Clinton and Newt Gingrich going back and forth back in '95 at the end of the Cold War when the economy was expanding and we didn't have competition around the world and, you know, it might have been unpleasant, but it wasn't gonna affect the underlying economy. We're at a time now where we've gotta make very good choices and we've gotta make 'em quick in order for us to succeed.

Mason: But saying that doesn't make it happen. And as we've seen, I mean, we thought a debt ceiling timetable might spur some action, it didn't happen. And obviously a lot of Americans are extremely discouraged. We had an extremely volatile stock market. First of all, what was your takeaway from the stock market volatility? When you saw that kind of volatility on Wall Street in your view what was the mar-- what were the markets saying?

President Obama: Well, what the markets were saying - and I think this is borne out by subsequent events - they don't worry about the United States not being a AAA country. You know, the markets voted and they rejected the down, the assessment of downgrade because they all rushed to treasuries as soon as they saw stock market volatility.

What I think the markets were reacting to is the fact that the economy has not grown as quick as it needs to. They've have been a lot of headwinds, the European debt crisis, Japan, high gas prices from the Arab spring. And so if the economy is not growing faster than two percent it means unemployment's not coming down as quick as it needs to. And what a lot of folks are worried about is that the recovery that we have been on is stalling or not moving as quickly as it needs to.

Mason: Do you think we're in danger of another recession?

President Obama: I don't think we're in danger of another recession, but we are in danger of not having a recovery that's fast enough to deal with what is a genuine unemployment crisis for a whole lot of folks out there --

Mason: Well, it seems--

President Obama: -- and that's why we need to be doing more.

Mason: --we, we have that already though, don't we? I mean, it seems to me the, I mean, the concern last week and the week before was that the market was saying we were closer to it than we thought and that in fact the markets themselves might cause consumers to pull back and tip us into a recession.

President Obama: Well, what is absolutely true is confidence matters. We should not have had any kind of brinksmanship around the debt ceiling. I wish that the Speaker had taken me up on a grand bargain to deal with our long-term debt and deficit. We still have the opportunity to fix that, it's not too late. I will be putting forward a plan that will be very similar to the plan that I put forward to the Speaker.

I will let the American people judge whether it's the kind of balanced plan that I've been talking about for the last couple of months. We can fix these problems. Compared to a lot of countries around the world the adjustments we have to make are so much more modest. And I think that's part of the reason why the American people are so frustrated. It'd be one thing if we had the kinds of problems that a Greece did where, you know, you potentially have to completely restructure your economy and your society. That's not the situation here.

Here we're talking about closing some loopholes in the tax code, making some modest adjustments in entitlements, paring back a little bit on programs that don't work. And if we do that - and I on the back of an envelope I could show you what it would take for us to do it - most folks wouldn't notice.