Transcript: President Barack Obama, Part 1

"60 Minutes" Correspondent Steve Kroft Interviewed The President Nov. 4, 2010

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KROFT: The Republicans say the voters sent you a very clear message on Tuesday. That they want a smaller, less costly, more accountable government. Is that the message that you received?

PRESIDENT OBAMA: I think that, first and foremost, they want jobs and economic growth in this country. They want to feel that the next generation is gonna be able to benefit from the American dream the way previous generations have. That our kids and our grandkids are gonna have a better life than ours, not one that's diminished. That's the most important thing that people are looking for.

I also do think that the American people are concerned that the debt and deficits that have been built up over decades -- and they got worse as a consequence of this economic recession -- are things that have to be fixed. And we've gotta fix them so that the next generation doesn't have to fix 'em.

And so, our goal has to be to try to bring the parties together and see if we can move forward on some areas that we know will encourage growth -- like education, investment in research and development, investment in science and technology. Make sure that government continues to do the things that people think are important. Social Security. Making sure there's a safety net. Making sure that Medicare is there for future generations. Making sure that we have a strong defense. Try to find those areas where we're engaging in a lot of waste and eliminate those.

But there's one last component to this, Steve. That that is, I think, people want to see Washington work. And what they mean by Washington working: It's transparent. It's accountable. That people aren't just playing political games all the time. That Democrats and Republicans aren't shouting across the abyss, but instead are trying to sit down and have a conversation and come up with practical solutions. And we have not seen enough of that over the last two years.

KROFT: Are you saying, then, that idea of smaller, less costly, more accountable government was not what you think the voters were saying?

PRESIDENT OBAMA: No, no, no. There is no doubt that folks are concerned about debt and deficits. And they want to make sure that government spending is not leaving a big tab for the next generation. I think that is absolutely a priority. And by the way, that's a concern that I had before I was even sworn in. And the fact is, I had a $1.3 trillion deficit waiting for me. We then had an emergency situation that required us to take a series of steps that added to that deficit in the short term.

But part of the reason, for example, that I thought it was so important for us to take on health care reform was the single, biggest expansion of government -- one that is inevitable if we don't make some serious changes -- is on the health care front. Medicare, the cost of Medicare, Medicaid and, you know medical care for veterans. Medical care in the Defense Department. Medical care across the board. That is the single thing that is gonna be driving the expansion of the federal government over the next several years. And so one of the things that we've said is -- we've got to start getting a better bang for our buck on that front. If we don't, it is gonna be very difficult for future generations to deal with it.

KROFT: It wasn't just the Republicans. I mean, you lost a lot of your base on Tuesday. You lost people who had helped elect you. A lot of the people that helped elect you two years ago voted for Republicans. Women, senior citizens, independents. Young people and African Americans did not turn out in large numbers. How do you explain that?

PRESIDENT OBAMA: Well, I as I said, I think that folks are frustrated with what they've seen over the last two years. I mean, you know, one of the challenges we had was that we'd lost four million jobs in the six months before I was sworn in. We lost 750,000 jobs the month I was sworn in. 600,000 the month after that. 600,000 the month after that. So, what you had was the economy continuing to get worse in the first several months of my Administration, before any of our economic policies had a chance to be put into place.

And we saw such a big hole develop, eight million jobs lost, that the actions that we took may have saved or created 3.5 million jobs, but that still leaves a huge hole. And that's what people are experiencing on a day to day basis. The hardest argument to make in politics is: things would have been a lot worse if we hadn't done all those taken all these steps. And particularly since these were really big steps. I mean, yeah, the Recovery Act was big. The, you know, intervention with the auto companies, even though it will end up costing tax payers much less than anybody thought at the time, was still big.

You know? The bank interventions. TARP, that we inherited from the previous administration. The banks -- we're gonna make sure that they pay that money back. And it won't have cost taxpayers as much as, say, the savings and loans crisis back in the '80s. It's still big.

So, people are looking and saying, "Well government intervened a lot, spent a lot of money, and yet, I still don't have a job or my neighbor still doesn't have a job or that home is still being foreclosed down the block." And our argument was, "Well, we had to take these steps to stabilize the economy and things would be a lot worse if we hadn't taken these steps." And people say, "Well, you know what? That's not particularly persuasive to us."

We want to get back to a time when, if folks are willing to work hard, are responsible you know, we're making sure that our kids are staying in school and doing the right thing and going to college -- that there are gonna be opportunities out there. And right now, people, I think, are concerned as to whether that future is gonna be as bright as it needs to be. And appropriately, I'm held accountable for that. You know? I'm President of the United States. We painted a picture of how we can move this country forward. And we're not there yet. And, you know, I paid the political cost for not getting us there.