[Barack Obama, President Of The United States:] Over the past three years, our businesses have created nearly 6.5 million new jobs, but we know we can help them create more. Corporate profits are at an all-time high, but we have to get wages and incomes rising, as well. Our deficits are falling at the fastest pace in years, but we can do more to bring them down in a balanced and responsible way. The point is, our economy is poised for progress as long as Washington doesn't get in the way. Frankly, the American people deserve better than what we've been seeing a shortsighted crisis-driven decision-making like the reckless across-the-board spending cuts that are already hurting a lot of communities out there, cuts that economists predict will cost us hundreds of thousands of jobs during the course of this year. If we want to keep rebuilding our economy on a stronger, more stable foundation, then we've got to get smarter about our priorities as a nation, and that's what the budget I'm sending to Congress today represents, a fiscally responsible blueprint for middle class jobs and growth. For years, the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy. This budget answers that argument because we can do both. We can grow our economy and shrink our deficits. In fact, as we saw in the 1990s, nothing shrinks deficits faster than a growing economy. That's been my goal since I took office and that should be our goal going forward. At a time when too many Americans are still looking for work, my budget begins by making targeted investments in areas that will create jobs right now. And prime our economy to keep generating good jobs down the road. As I said in my State of the Union address, we should ask ourselves three questions every day. How do we make America a magnet for new jobs, how do we give our workers skills to do those jobs, and how do we make sure that hard work leads to a different living? To make America a magnet for good jobs, this budget invests in new manufacturing hubs to help turn regions left behind by globalization in the global centers of high-tech jobs. We'll spark new American innovation and industry with cutting edge research like the initiative I announced to map the human brain and cure disease. We'll continue our march towards energy independence and address the threat of climate change. And our Rebuild America partnership will attract private investment to put construction workers back on the job rebuilding our roads, our bridges and our schools in terms of attracting manier new business to schools across the country. To help workers to learn the skills to fill those jobs, we'll work with states to make high-quality preschool available to every child in America, and we're going to pay for it by raising taxes on tobacco products that harm our young people. It's the right thing to do. We'll reform our high schools and job training programs to equip more Americans with the skills they need to compete in the 21st century economy. And we'll help more middle class families afford the rising cost of college. To make sure hard work is rewarded, we'll build new ladders of opportunity into the middle class for anybody who is willing to work hard to climb them. We'll partner with 20 of our communities hit hardest by the recession to help them improve housing and education and business investment. And we should make the minimum wage a wage you can live on because no one who works full-time should have to raise his or her family in poverty. My budget also replaces the foolish across-the-board spending cuts that are already hurting our economy, and I have to point out that many of the same members of Congress who supported deep cuts are now the ones complaining about them the loudest as they hit their own communities. Of course, the people I feel for are the people who are directly feeling the pain of these cuts, the people who can least afford it. They're hurting military communities that have already sacrificed enough, they're hurting middle class families, there are children who have had to enter a lottery to determine which of them get to stay in their Head Start program with their friends. There are seniors who depend on programs like Meals on Wheels that they can live independently but who are seeing their services cut. That's what the so-called sequester means. Some people may not have been impacted, but there are a lot of folks who are being increasingly impacted throughout this country. And that's why my budget replaces these cuts with smarter ones, making long-term reforms, eliminating actual waste and programs we don't need anymore. So building new roads and bridges, educating our children from the youngest age, helping more families afford college, making sure that hard work pays. These are things that should not be partisan, should not be controversial. We need to make them happen. My budget makes these investments to grow our economy and create jobs and it does so without adding a dime to our deficits. Now, on the topic of deficits, despite all the noise in Washington, here's a clear and unassailable fact. Our deficits are already falling. Over the past two years, I've signed legislation that will reduce our deficits by more than $2.5 trillion. More than 23 of it through spending cuts and the rest through asking the wealthiest Americans to begin paying their fair share. That doesn't mean we don't have more work to do. But here's how we finish the job. My budget will reduce our deficit by nearly another $2 trillion so that all told we will have surpassed the goal of $4 trillion in deficit reduction that independent economists believe we need to stabilize our finance, but it does so in a balanced and responsible way, a way that most Americans prefer. Both parties, for example, agree that the rising cost of caring for an aging generation is the single biggest driver of our long-term deficits. And the truth is, for those like me who deeply believe in our social insurance programs think it's one of the core things that our government needs to do. If we want to keep Medicare working as well as it has, if we want to preserve the ironclad guarantee that Medicare represents, then we're going to have to make some changes. They don't have to be drastic ones. And instead of making drastic ones later, what we should be doing is making some manageable ones now. The reforms I'm proposing will strengthen Medicare for future generations without undermining that ironclad guarantee that Medicare represents. We'll reduce our government's Medicare bills by finding new ways to reduce the cost of health care, not by shifting the cost to seniors or the poor or families with disabilities. They are reforms that keep the promise we've made to our seniors basic security that is rock solid and dependable and there for you when you need it. That's what my budget represents. My budget does also contain the compromise I offered Speaker Boehner at the end of last year, including reforms championed by leaders in Congress. And I don't believe that all these ideas are optimal, but I'm willing to accept them as part of a compromise, if and only if they contain protections for the most vulnerable Americans. But if we're serious about deficit reduction, then these reforms have to go hand in hand with reforming our tax code to make it more simple and more fair so that the wealthiest individuals and biggest corporations cannot keep taking advantage of loopholes and deductions that most Americans don't get. That's the bottom line. If you're serious about deficit reduction, then there's no excuse to keep these loopholes open. They don't serve an economic purpose, they don't grow our economy, they don't put people back to work. All they do is to allow folks who are already well off and well connected game the system. If anyone thinks I'll finish the job of deficit reduction on the backs of middle class families or through spending cuts alone that actually hurt our economy short-term, they should think again. When it comes to deficit reduction, I've already met Republicans more than half way. So in the coming days and weeks, I hope that Republicans will come forward and demonstrate that there really as serious about the deficits and debt as they claim to be. So growing our economy, creating jobs, shrinking our deficits, keeping our promise to the generation that made us great but also investing in the next generation. The next generation that will make us even greater. These are not conflicting goals. We can do them in concert. That's what my budget does. That's why I'm so grateful for the great work that Jeff and his team have done in shaping this budget. The numbers work. There's not a lot of smoke and mirrors in here. And if we can come together, have a serious, reasoned debate not driven by politics and come together around common sense and compromise, then I'm confident we'll move this country forward and leave behind something better for our children. That's our task. Thank you. God bless you. God bless the United States of America.
[Wolf Blitzer, Cnn Anchor:] So there he is, the president with the head of the Office of Management of the Office of Management and Budget, Jeffrey Zients, walking back into the Oval Office from the Rose Garden, the president making his proposals public now. And there's a detailed budget that the White House is releasing, hundreds if not thousands of pages going through point by point by point all domestic, all national security, all Social SecurityMedicare, all spending for the fiscal year 2014 budget. Once again, that fiscal year begins October 1st of this year. Our White House correspondent Jessica Yellin is there. Jessica, so the House has already approved Paul Ryan's budget. He's the chairman of the House budget committee. The Senate has approved Patty Murray's budget, a very different budget. She's the chair of the Senate budget committee. Now the president's weighing in with his own budget. So what happens now?
[Jessica Yellin, Cnn Chief White House Correspondent:] These are effectively negotiating positions, Wolf, and what the president has done today is laid out what he considers a compromised position to try to restart debt talks with Republicans. The headlines out of this budget are that he's proposing reforms to Social Security and Medicare, a big thing from a Democratic president to do, not well-received by some progressive groups in the president's own party. But even Republicans say it's not enough. So he's managed to, with this budget, anger both folks on the left without winning over people on the right. So you have a bit of a challenge in understanding where this will go next. He's also proposed replacing the sequester cuts, those across-the- board spending cuts, with more reasoned cuts in his view that he thinks will affect people less harshly and with some tax increases and tax changes for millionaires. But the budget also includes some new spending and priorities that the president thinks are important, spending on infrastructure and, for example, universal pre-K education for all kids in America, which we're looking for the dollar figure on that. It's going to come out soon and that's going to be a big price tag. Republicans really dislike all that new spending. So you ask where this goes. It could go nowhere from here. Tonight he sits down with a dozen or so senators, Republican senators, to talk this over, guns, immigration, and see if they can revive any sort of talks. Not a lot of optimism in Washington that a deficit deal will get going from here. But this is the president's offer to restart kick start that discussion, Wolf.
[Blitzer:] Yeah, at least there's a budget proposal on the table right now from the president, one from the Democrats who have the majority in the Senate, one from the Republicans who have the majority in the House. Gloria Borger, our chief political analyst, is watching what's going on. What is probably is going to be the death of any compromise is the president's adamant position that there have to be additional tax increases on wealthy Americans, on big corporations, as well as an across-the-board tax increase, at least 30 percent tax for wealthy Americans, the so-called "Buffett Rule." I can't imagine the Republicans, especially in the House of Representatives, going along with that since they did go along with averting the fiscal cliff and raising taxes on wealthy Americans at the end of the year.
[Gloria Borger, Cnn Chief Political Analyst:] Yeah, they're already saying, look, we did that. We did we gave you tax increases, and we're not going to do it again. I think what the most interesting thing about the president's budget is the point, as Jess was pointing out earlier, that he did decide to bring Medicare back on the table, to bring Social Security back on the table. Remember, it was part of his so-called "grand bargain" that became a grand failure with House Speaker John Boehner. And the White House is saying, OK, this budget is not the starting point, but it's our sticking point because we're putting these things back on the table. If Republicans and Democrats were serious, they would take a look at entitlement changes as well as tax reform, as the president was just talking about, as a way to do some grand bargain on spending in this country where you did change the tax code so that you could raise revenue and lower rates to a certain degree and attack these entitlements. But again, does the Congress have the will to do that right now? Is there an awful lot on their plate? We've been talking about guns, we've been talking about immigration reform when will they finally get around to doing this or will they just keep patching this, as they've been doing over the last years?
[Blitzer:] Let's get some Republican reaction to what we just heard from the President of the United States. Representative Greg Walden of Oregon is joining us right now. He's the chairman of the National Republican Congressional Committee. Congressman, what did you think of the president's remarks?
[Rep. Greg Walden , Chairman, Nrcc:] Well, I thought it very intriguing in that the budget really lays out kind of a shocking attack on seniors, if you will. And we haven't seen all the detail yet, and we'll look at it, but I'll tell you, when you're going after seniors the way he's already done on Obamacare, taking $700 billion out of Medicare to put into Obamacare, and now coming back at seniors again, I think you're crossing that line very quickly here in terms of denying access to seniors for health care in districts like mine, certainly, and around the country. I think he's going to have a lot of pushback from some of the major senior organizations on this and Republicans, as well. And this is a budget that doesn't balance. At the end of the day, you can have all the flowery rhetoric, but I'm a numbers guy and this doesn't add up. It does not balance. We've passed the Ryan budget. It does balance in ten years; it will put us on a path to grow the economy and jobs. And, again, gets us to where we have a balanced budget. This is 65 days late and it doesn't add up.
[Blitzer:] Well, let's talk about these proposed changes that the president is putting forward when it comes to Social Security and Medicare, the shocking proposals that you say the president's putting forward that could affect seniors. What's so shocking about changing that CPI, that consumer price index the way that you would determine how much inflation would go ahead with increases for Social Security recipients, for example?
[Walden:] Well, once again, you're trying to balance this budget on the backs of seniors and I just think it's not the right way to go.
[Blitzer:] But doesn't the doesn't Paul Ryan's budget have major changes as far as Social Security and Medicare concerned, as well?
[Walden:] Look, it doesn't yes, but it doesn't do that. And so I just think there's some you know, it's all about when you get to the specifics. And what does that really mean down on the ground? You know, the president just said that his proposals will reduce the cost of health care. Where did we hear that before? We heard that premiums for a family on for health insurance would go down $2,500 if his plan was adopted and we now see them going up $2,000 in my state to $3,000. So you've got to cut through the rhetoric, Wolf, which, of course, you all and your team will do and get into the real facts and figures and so will we. But I don't see this budget as either on time, adding up, balancing, and, further, I think it really does go right at seniors in a way they're going to be shocked, coming out of the administration.
[Blitzer:] Let's talk about taxes right now. Are you open to what the president calls tax reform, eliminating some of the loopholes, the reductions, for the wealthiest Americans, some of the biggest corporations, in order to pay for some of the infrastructure, education, health care benefits that he's putting forward?
[Walden:] So, Wolf, let's go back as you said, or one of your folks there said it about the fiscal cliff. The president got $600 billion in new revenue. And in part, he also put a little provision into the law, it was in there, the Pease Amendment, which already reduces and trails out how much the wealthy in America can claim for deductions. Tax reform is where you would have the debate about how you can close these loopholes and reduce the rates so we have a competitive code and create jobs in America. What he's proposing, at least at this point and again, we've got to get into the details sounds a lot like the old style of we're going to raise taxes by dividing the country and then we're going to go spend the money on new programs and existing programs and never get around to real tax reform, which is what we need to be competitive in the world to grow private sector jobs in the world. The notion that the federal government is somehow going to be the great creator of jobs in America, I think, is a misnomer, because if we're spending $800 billion more than we took in this year, and the last few years $1 trillion plus more than we take in, we ought to have a robust economy right now. The federal government isn't what's going to do this; it's the private sector. We've got to get out there where the folks on the street aren't having to work two or three jobs in order to make ends meet and now seeing their health insurance costs spike. So I think there's a lot of problem with what he's proposing.
[Blitzer:] What do you think of that so-called Buffett Rule, that individuals making more than $1 million a year are required to pay at least 30 percent income tax?
[Walden:] Well, again, he had the opportunity to put that into law before. He had the opportunity to do that in the fiscal cliff discussions. And I just don't see that catching traction here; it didn't catch traction in the Senate, I don't believe. And so I'm not sure that's even a starter.
[Blitzer:] You oppose that? You would vote against that so-called Buffett Rule?
[Walden:] Yes, again, look, what we've got to do is get back to have a meaningful discussion about overall tax reform, not just, you know, split one group of Americans against the others to the benefit of the growth of the federal government and its deficit. This does not put us on a path toward reducing America's deficit in a meaningful way, and need to have those serious discussions.
[Blitzer:] It's called the Buffett Rule because Warren Buffett himself came up with the notion. Warren Buffett, one of the richest people in the world, saying if he pays 15 percent of his income, which is a lot, to the federal government, 15 percent, that is a lot less and that's legal, from his investments and his earned income or whatever, that's if his secretary is paying 28 percent or 30 percent, he says there's something not fair that his secretary's paying 30 percent of her income in federal taxes and he's paying 15 percent.
[Walden:] Well Wolf, there's a big difference of putting your money at risk in terms of investment strategies, because you can lose that money, as people painfully know from the losses they suffered in the stock market versus a paycheck every month that's guaranteed. Those have always been treated differently because there's a higher risk of putting your money at risk in an investment strategy that can go bad. And remember, you're limited on how much you can deduct when it does go bad. So these are apples and orange comparisons except when it gets spun out there at 30,000 feet in the political world. But they're meaningful differences in the tax code because we want to incent people to take their wealth, and he has giant wealth, and invest it in the private sector to grow companies and jobs. But you could lose that, as well. He's had good years and he's had bad years. His secretary probably has been paid each month, and that's a good thing. He should pay her more. I'm all for that. But you do that because you have companies that are successful and they make money going forward, not because you're suddenly giving the federal government more of your money. And I think that's the confusion here is that building up a bigger, more costly federal government puts a burden of debt on the next generation that's unconscionable and it suppresses our economy. And that's not fair.
[Blitzer:] One final question, Congressman, before I let you go. So now there's a House budget, there's a Senate budget, the president has come up with his proposals today there is a deadline of sorts I suspect at the end of July, early August, when the government's going to have to raise the nation's debt ceiling once again. Are you in favor of raising the debt ceiling even if there's no so-called grand bargain budget agreement between the House and Senate and the president?
[Walden:] You know, I would hope we wouldn't get to where that's the only choice on the table. I've supported increasing the debt ceiling when there's been offsetting reductions in spending because I think at some point here, and we've reached that point, you can't keep borrowing 42 cents of every dollar, sending the next generation the bill. And so we've dealt with the debt ceiling, we'll deal with it again, but it's going to be in the context of overall more broad discussions about how we achieve savings going forward.
[Blitzer:] I think that will be a sort of deadline looking forward. Let's hope everybody can come up with some sort of
[Walden:] Yes.
[Blitzer:] acceptable compromise.
[Walden:] Exactly, let us avoid these...
[Blitzer:] It would be bad news for U.S. credit worthiness around the world, bad news for American workers, bad news for exports, bad news for the U.S. economy, if we once again had to go through that drama of having to see if the nation's debt ceiling is going to be increased.
[Walden:] I couldn't agree more with you, Wolf, and that's certainly not what we're proposing as Republicans. And in fact we already extended the debt ceiling a couple of times here, but we also said it's not a good thing for the country and our jobs and our exports and our economy when you've got the printing press on jet fuel at the Federal Reserve kicking out $85 billion a month in phony money, in effect, and increasing, ballooning our debt out at over $1 trillion a year. That's not good either. So somewhere in here, there's common ground to solve the problem.
[Blitzer:] Let's hope that common ground can be found. Representative Greg Walden of Oregon, hanks very much for coming in.
[Walden:] You bet.
[Blitzer:] All right. So we just heard the president say he plans to cut the deficit, but the new budget adds some new revenues, as well. We're going to break it all down. Our own Christine Romans is standing by. We'll take a quick break. Much more of our special coverage here in the CNN NEWSROOM right after this.