DIANE SAWYER, ABC’S “WORLD NEWS” ANCHOR: Mr. President, thank you.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you.

SAWYER: So, looking back a year, going before a joint session of Congress. What’s the biggest difference in going this week?

OBAMA: Well, you know, this may seem counterintuitive, but the biggest difference is that I was more worried about where the country was going a year ago than I am now. Keep in mind that when I made that joint session speech, we still didn’t know whether the financial system was going to stabilize. We still were looking at five, six, seven hundred thousand jobs per month being lost. It still wasn’t clear whether or not we were going to be able to generate economic growth again.

And so, the steps that we took at the beginning of this year have meant that the potential meltdown of the economy has gone away. What hasn’t gone away is the desperation that people are feeling who were one of the 7 million who lost jobs during that period, and so right now, I think there’s frustration and anger about why can’t we get this thing moving faster? And it’s a frustration that I feel as well…

SAWYER: Republicans are already out today saying what you’re talking about so far for Wednesday night is not going to create any new jobs.

OBAMA: The — well, I would suggest that they save the rebuttal for after the speech. They haven’t really heard what we’re proposing.

SAWYER: But what is it going to be? New stimulus money — as we know, in the House, they have talked about $170 billion or so for new stimulus money…

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OBAMA: Here’s what we’re going to talk about. We’re going to talk about how we can first of all, focus on job creation and growth. And I’ve met with the Republicans, by the way, several weeks ago. So, I have their ideas. I know what they’re proposing. And some of the things we propose are things that actually should get some strong bipartisan support.

We’re also going to make sure we’re focused on some issues that have been burdening the middle class well before the crisis hit. You know, what’s happening in terms of affordability of college. How can people save for their retirement in a more secure way? How do they deal with both child care and elderly parents that they’ve got to take care of?

So, there are going to be a set of proposals that we put forward that help to stabilize the situation and deal with the growing insecurity and anxiety of people who, even if they haven’t lost their job, are still feeling squeezed by their incomes shrinking and their costs going up.

SAWYER: But a year ago, you said the first item on the agenda, a year ago, jobs.

OBAMA: Absolutely.

SAWYER: Painted a picture of jobs from coast to…

OBAMA: Well, now, Diane, I think that’s not fair. Here’s what I said…

SAWYER: A hope for jobs, at least, infrastructure…

(CROSSTALK)

OBAMA: Here’s what I said, was that our number one priority was stopping the economic contraction and putting people back to work. Now, we have stopped the economic contraction. The economy is growing again, and we did create or save several million of jobs. That’s not my opinion. That’s the opinion of conservative economists as well as liberal economists, was that the Recovery Act, which is a combination of tax cuts, infrastructure improvements, helping states stabilize their budgets — all those things helped to lessen the fall.

But we’ve still lost 7 million jobs. So, I understand why the American people, their attitude is not “It could have been worse.” Their attitude is, “How do we make sure we keep on making it better?”. And that’s what we’ll be talking about on Wednesday.

SAWYER: New proposal? Something surprising?

OBAMA: Well, you know, I’ll let you guys judge whether it’s surprising or not. There’s going to be consistency though in the sense that my first job coming into office was to rescue the economy from great peril. My second job was to make sure that we create a new foundation for economic growth.

Here’s part of what happened. Over the last decade, even when people were saying that the economy was doing fine, it was one of the first times in history where the middle class actually saw its incomes decline. We actually saw very little job growth during that period. And on a whole host of measures from health care cost, college affordability, people were having a harder and harder time getting by. So what I’ve said is we can’t go back to the same pattern where you’ve got bubbles, whether it’s in housing or the dot.com boom that are fueling a lot of speculation, making a lot of people a lot of money, but leaving a lot of people in the middle and low-income people behind.

What we have to have is a foundation that’s built on a good education system, a sound energy policy, a health care system that works for everybody, financial regulations that ensure we don’t have this crisis again, and those foundations for long-term economic growth are going to be my focus this year. They’re going to be my focus next year. They’re going to be my focus the year after that because if we don’t get that stuff right, then it’s going to be very difficult for us to answer the anxieties that people feel over the long-term.

SAWYER: A couple of quick news questions if I can. Fed Chairman Ben Bernanke going to be confirmed. Do you guarantee the markets that he’s going to the Fed chairman?

OBAMA: He has my strongest support. I think he’s done a good job. What we’ve seen is not only Democratic leaders, but also Republican leaders say that he should be confirmed and I’m confident that he will be confirmed.

SAWYER: Even though Barbara Boxer, John McCain have come out and said look — John McCain said he’s the guy who steered into the iceberg. Barbara Boxer said we need a representative of Main Street on the Fed.

OBAMA: What we need is somebody at the Federal Reserve who can make sure that the progress that we’ve made in stabilizing the economy continues. And I think Bernanke is the best person for that job.

SAWYER: Secretary Geithner and Economic Chairman Summers, have you asked them to stay until the end of 2010? Have they said yes?

OBAMA: You know, we haven’t had the conversation because my presumption is that they are staying. There’s a lot of “hue and cry” in Washington because this is what happens. The political season is starting a little bit early this year. But the fact of the matter is that when you look at the cards that we were handed at the beginning of last year and where we are now, a lot of that has to do with sound, steady economic leadership. And they’ve been terrific advisers for me and I think they will continue to be terrific advisers.

SAWYER: To all the people terrified about the deficit, $1.5 trillion more this year than taken in expected next year. Can you guarantee them still that there will be no taxes on anybody who makes under $250,000 a year? That’s still the absolute rule?

OBAMA: I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak. So we’re going to be rolling out our budget. I’m not going to be giving you too many previews of the State of the Union, but I think it’s important to understand that No. 1, I haven’t raised taxes on anybody, I’ve cut taxes. Ninety-five percent of working Americans have gotten a tax cut, partly because it’s the right thing to do because of the recession, partly because it’s just something I campaigned on. So that’s point number one.

Point number two in terms of the deficit. Understand where our deficit index comes from. When I walked into office, we had a $1.3 trillion deficit. We also had $8 billion (sic) — $8 trillion worth of national debt that had been accumulated from the previous administrations, cutting taxes during war time, a prescription drug plan that wasn’t paid for. The only additions that we added were the stimulus package last year, which amounted to $1 trillion. Now that’s a serious amount of money to rescue the economy. But it pales in comparison to the structural deficit that’s built into our budget right now, that is a problem that is long running and we’re going to have to solve.

And we’re not going to solve it easily. There aren’t any magic solutions to it. It’s going to be a slow chipping away, and what I’m going to do is propose a series of measures that show we are serious about it. That I, the president, am willing to not just point fingers, but actually make some tough choices myself. My hope is that both Democrats and Republicans on Capitol Hill will join me in this effort of solving the problem, instead of trying to kick the can down the road and blame somebody else.

SAWYER: Health care — going forward, should all the conversations, all the meetings be on C-SPAN?

OBAMA: You know, I think your question points out to a legitimate mistake that I made during the course of the year, and that is that we had to make so many decisions quickly in a very difficult set of circumstances that after awhile, we started worrying more about getting the policy right than getting the process right. But I had campaigned on process. Part of what I had campaigned on was changing how Washington works, opening up transparency and I think it is — I think the health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don’t know what’s going on. And it’s an ugly process and it looks like there are a bunch of back room deals.

Now I think it’s my responsibility and I’ll be speaking to this at the State of the Union, to own up to the fact that the process didn’t run the way I ideally would like it to and that we have to move forward in a way that recaptures that sense of opening things up more.

SAWYER: A lot of people think you must say at the end of the day, this is not who I was in 2008, these deals with Nebraska, with Florida…

OBAMA: Let’s hold on a second, Diane. I mean, I think that this gets into a big mush. So let’s just clarify. I didn’t make a bunch of deals. There is a legislative process that is taking place in Congress and I am happy to own up to the fact that I have not changed Congress and how it operates the way I would have liked. So that’s point number one.

Number two is that I think it is important to know that the promises we made about increased transparency, we’ve executed here in 1600 Pennsylvania Avenue. I mean, this is the first White House in history where you know anybody who has walked into my office, anybody who has walked into the White House, you actually have a record of who comes in. We have put more stuff on the Internet than ever.

We’ve eliminated lobbyists from all the boards and commissions that historically, you know, they dominated in this town. So it’s not that we haven’t made significant progress, but we haven’t changed it as much as we needed to.

Now, in terms of the health care bill, the product of making sure that we got historic insurance reforms that people have been fighting for years so that insurance companies can’t take advantage of people, making sure that we’re bending the cost curve, and — and actually starting to reduce health care inflation in this country, which is a huge problem, making sure that 30 million people have access to health insurance, making sure that small businesses have tax credits — it’s important that people look at the core elements of what both the House and the Senate passed.

And every health economist out there, who’s serious about this stuff, will tell you it’s a vast improvement over the status quo. It doesn’t — that doesn’t excuse the stray cats and dogs that found their way into legislation. It is point out that as we move forward, we’ve got to make sure that we’re focused on what is actually helping the American people deal with what is a very serious problem.

SAWYER: A personal question, if I can, because a lot of people heard you in the Baptist church say sometimes in these buzz saw bruising seasons…

OBAMA: Right.

SAWYER: … you sit and confront your own doubts…

OBAMA: Yes.

READ the rest of the interview, here.

WATCH Obama: ‘We Started Worrying More About Getting The Policy Right Than Getting The Process Right’, ABC News interview with Barack Obama by Diane Sawyer, Talking Points Memo, January 25, 2010 — 2:01

Obama: I’d rather be
a really good one-term president

COMMENT by Evans Liberal Politics owner Paul Evans: So far as I can see, the Tea Party group LEADERS are all either idiots or evil power seekers. Most of the followers have been deluded by circumstances. Now the leaders who were deceived are coming to their senses. That’s how it seems to me. Here’s the post:

A Tea Party convention billed as the coming together of the grass-roots groups that began sprouting up around the country a year ago is unraveling as sponsors and participants pull out to protest its expense and express concerns about “profiteering.”

The convention’s difficulties highlight the fractiousness of the Tea Party groups, and the considerable suspicions among their members of anything that suggests the establishment.

The convention, to be held in Nashville in early February, made a splash by attracting big-name politicians. (Former Gov. Sarah Palin of Alaska is scheduled to deliver the keynote speech.) But some groups have criticized the cost — $549 per ticket and a $9.95 fee, plus hotel and airfare — as out of reach for the average tea partier. And they have balked at Ms. Palin’s speaking fee, which news reports have put at $100,000, a figure that organizers will not confirm or deny.

Tea Party events exploded last winter, as increasingly large gatherings protested the federal stimulus bill, government bailouts and proposed health care legislation. While they vary by name, specific tenets and relative embrace of anarchy, such groups tend to unite around fiscal conservatism and a belief that the federal government — whether led by Republicans or Democrats — has overstepped its constitutional powers.

Tea Party Nation, the convention organizer, started as a social networking site for the groups last year, a kind of Facebook for conservatives to “form bonds, network and make plans for action.” But its founders, former sponsors and participants are now trading accusations.

Philip Glass, the national director of the National Precinct Alliance, announced late Sunday that “amid growing controversy” around the convention, his organization would no longer participate. His group seeks to take over the Republican Party from the bottom by filling the ranks of local and state parties with grass-roots conservatives, and Mr. Glass had been scheduled to lead workshops on its strategy.

“We are very concerned about the appearance of T.P.N. profiteering and exploitation of the grass-roots movement,” he said in a statement. “We were under the impression that T.P.N. was a nonprofit organization like N.P.A., interested only in uniting and educating Tea Party activists on how to make a real difference in the political arena.”

Mr. Glass said he was also concerned about the role in the convention of groups like Tea Party Express, which has held rallies across the country through two bus tours, and FreedomWorks, a Tea Party umbrella. He called them “Republican National Committee-related groups,” and added, “At best, it creates the appearance of an R.N.C. hijacking; at worst, it is one.”

Erick Erickson, the editor of the influential conservative blog RedState.com, wrote this month that something seemed “scammy” about the convention. And the American Liberty Alliance withdrew as a sponsor after its members expressed concerns about the convention’s finances being channeled through private bank accounts and its organizer being “for profit.”

“When we look at the $500 price tag for the event and the fact that many of the original leaders in the group left over similar issues, it’s hard for us not to assume the worst,” Eric Odom, the executive director of the American Liberty Alliance and an organizer of the tax day rallies last April, wrote on the group’s Web site.

Sherry Phillips, who founded and runs Tea Party Nation with her husband, Judson, said Monday that it was a nonprofit group.

Ms. Phillips said the American Liberty Alliance was “a for-profit company that takes donations.” The National Precinct Alliance, she said, demanded compensation of around $3,000. “Our budget on this convention is very tight and we could not afford them,” she wrote in an e-mail message.

She declined to comment on Ms. Palin’s speaking fee.

“If there is any profit,” Ms. Phillips said, “the money will go toward furthering the cause of conservatism.”

Mr. Glass denied that his group had requested money and said convention organizers had asked his group to pay $2,200 to speak.

As for FreedomWorks, it is not a convention sponsor. Tea Party leaders in training sessions at the group’s headquarters on Monday said their members, for the most part, could not afford the convention or were not interested.

President Barack Obama will propose a three-year freeze in discretionary, “non-security” spending as part of a budget he will unveil one week from now, a senior administration official told the Huffington Post and other reporters Monday evening.

The president will unveil the proposal during his State of the Union address on Wednesday and will describe it as saving $250 billion over 10 years, relative to what spending on those programs would have been otherwise. His goal is to keep the budget for the affected agencies at or below the $447 billion that was spent on them this past year.

“We face the dual challenges of a massive GDP gap and also very substantial budget deficits out over time,” said the administration official. “As we move forward to FY2011 that’s a transition year in which we need to be shifting our focus, making sure we’re getting as much as we can from each dollar that the federal government has. And this is not the end-all-be-all, but it is an important category of restoring discipline to an important component of the budget.”

The spending freeze is likely to meet with tepid support among the president’s fellow Democrats, many of whom view self-imposed limitations as risky politics and policy at a time of deep economic recession. Last week, House lawmakers — who will essentially have a larger role than the president in assuring that the spending freeze is implemented — rejected the proposal after it was initially floated. One Democratic strategist jokingly quipped that the president was taking a page out of the Republican playbook for the sole purpose of placating his Republican critics.

“So we already know Obama has now taken the McCain campaign’s health care position on the excise tax,” the strategist said. “Wasn’t a freeze in discretionary spending also McCain’s plan for when the economy tanked?”

The senior administration official did not address these concerns directly. But in a 15-minute conference call with half a dozen reporters from online outlets, he did state that the White House “may well” pursue additional “jobs-related” legislation in 2010. As for the agencies that would now have to deal with spending limits — the EPA, Commerce Department, Health and Human Services, and the Department of Interior to name a few — the administration official noted that there would be some budgetary flexibility should emergencies arise. If more money is needed at one agency it can go there, but only at the expense of another.

“This is not a blunt across-the-board freeze,” said the senior administration official. “Some agencies will go up, others will go down; but in aggregate for those non-security agencies the total will remain constant.”

Exempt from the limits will be security and defense agencies, whose budgets will undoubtedly rise in the years ahead as the president pursues an aggressive foreign policy agenda. Asked whether the administration is concerned that the deficit reduction pursued by freezes on “non-security” spending would be wiped out by increases in military spending, the administration official said that the White House had and would continue to pursue budgetary discipline in the area of national defense.

“I think it’s worth separating money for the troops from the procurement budget. We will be funding the troops to the degree that is necessary to the degree that they are adequately protected,” the official said. “But then, for example, on the procurement part of the budget, within the DoD, [we are] continuing to try and achieve more efficiencies.”

The official added that the discretionary “non-security” spending freeze was just the first bite of the apple when it came to the administration’s efforts to rein in government spending. “You’re going to see other components of deficit reduction strategy when we release the budget,” the official said, noting earlier that if all goes to plan, by 2015 the administration will have brought this category of spending to its lowest point (as a share of the economy) in 50 years.

“I think what’s important to keep in mind here is that what we are trying to accomplish is this is only one component of an overall budget — you’ll see other components on Monday,” the official said. “And we are again, in 2011, 2012 and 2013, focused on getting as much as we can from each dollar that’s going into this category of spending.”

Email HuffPo author Sam Stein here.

See Obama Seeks Freeze on Many Domestic Programs, The New York Times, January 25, 2010, by Jackie Calmes.

COMMENT by Evans Liberal Politics owner Paul Evans: Hmmmmmm….. Could it be that trying to achieve the fiscal soundness and stability of the United States is a GOOD THING for EITHER a Democrat OR a Republican??????????????

Note by Evans Liberal Politics owner Paul Evans, without comment: It was at this point that I SAID: “I don’t vouch for the logical soundness of the posts earlier than this one. I was too busy being caught up in various versions of the usual partisan bullsh*t and other assorted circumstances beyond my control… I’ll try to clean up some of the earlier posts, but it may take a while.” In point of fact, just about everything before this so far as I can remember is fine. ~ Paul Evans