Hamas' Khalid Meshaal on Relations with Israel, US

Hamas political director Khalid Meshaal spoke for three hours last week with Paul McGeough, an Australian journalist who has written a book about the rise of Hamas and Israel's attempts to kill Meshaal. In the interview, Meshaal talked about relations with Israel (“Hamas has declared it’s acceptance of a Palestinian state in the occupied territories; we have joined the political process; we have entered short-term truces with Israel - this is the reality that the world needs to deal with" and relations with countries outside the region ("We’re willing to open a new page with the US and Europe....But they have to be serious about dealing with us on Palestinian rights.”), and the political prospects of the organisation (“If the Palestinian people were gamblers, they would bet on Hamas").

This is McGeough's summary, reprinted from Syria Comment:

DAMASCUS: The tea-cup stops short of his lip, as Khalid Mishal pauses to consider the ironies of trench warfare in the Middle East - a lurch to the political right has anointed as Israel’s next prime minister the man who, 11 years ago, sent Mossad agents on a bizarre mission to assassinate Mishal.

It is late Wednesday evening - March 18 - and Mishal sits deep in a plump armchair, in a second-floor reception room. “Netanyahu…,” he asks, returning to his cup of tea. “Its fate, God’s destiny, but we can’t set policy on the basis of personal grudges.”

The Palestinian resistance leader, whose suicide bombers and assassins have taken their own toll on Israeli life over the years, then declares his would-be-killer to be a man of straw. “We’ve already experienced Netanyahu as prime minister of Israel, so Palestinians are not afraid of him second time round,” Mishal vouches.

“After the battle of Gaza [in December-January] and the steadfastness of our people in the face of the Zionist war machine, do you expect a single Palestinian to be scared of this man? It doesn’t matter if he tries again to kill me, because he’s already killed my people.”

At the time of the 1997 attempt on his life, Mishal was an unlikely target - a mid-level Hamas operative, based in Amman, the capital of Jordan.

These days he is the supreme leader of Hamas, hunkering in a bunker set against a scrabbly hillside in the southern suburbs of the Syrian capital, deep inside a secure enclave which is reserved for high officials of the Damascus regime, foreign diplomats and the staff of foreign NGOs.

It is an unmarked, nondescript apartment block that doubles as jihad headquarters and as Mishal’s family home, where his teenage children are just as likely to wander in, taking a seat for the most intense discussions on Hamas operations.

Festooned with swivelling security cameras, the building also is watched over by an outer ring of leather-jacketed security men who juggle firearms and walkie-talkies as they prowl the pavement.

A Hamas car collects select visitors from city hotels - only by prior arrangement. When discretion is needed, one of a fleet of heavy black Mercedes Benz sedans is wheeled out - black curtains are drawn behind the tinted glass.

When greater discretion is required, the Hamas driver jumps the car on to the pavement, easing to a halt under an outstretched awning that hangs from the perimeter wall of the Hamas HQ. The house guards, moving with practised precision, then seize the loose ends of two bunched canvas flaps suspended from the awning, and draw them quickly out to the edge of the pavement, enveloping vehicles as they arrive, before some of Mishal’s more mysterious callers dare to alight.

The arrival of an outsider is an emergency event for Mishal’s suit-and-tied inner security ring. These men frequently speak into microphones concealed in the cuff of their jacket sleeve. Their thoroughness reveals an understanding that their boss is a constant target for a determined enemy.

Beyond an airport-like, walk-through security scanner and up a set of stairs with a dog-legged turn, a heavy, double-bolted door leads into a hallway, from which a visitor is escorted through a set of big double doors into Mishal’s diwan, or meeting place.

Armchairs line the long walls and the décor is various shades of Hamas green. But upon entering, it is a wall of mostly gaunt faces that locks the attention of a visitor - arranged in a honeycomb pattern; they are 20 Hamas leaders, fighters and bomb-makers, all victims of Israel’s campaign of targeted assassination. It is a sobering achievement in life that Mishal has reached age 53 without his visage being added to this wall of death.

The Hamas leader holds forth expansively, negotiating the tripwires of the diplomatic and political minefields that he inhabits daily, with certainty and a confidence that verges on bombast, as he lectures a fast-changing world on how it should respond to his movement - not than the reverse.

This is the first interview in which Mishal, designated a terrorist by Washington and Europe, makes his first detailed response to the outcome of transformative elections in the US and Israel; the Gaza war; and the imminent return to power in Israel of his would-be assassin - Benjamin Netanyahu.

Mishal starts, on what he genuinely seems to believe is a conciliatory note. However, in the corridors of power in Washington and the other capitals of the Middle East Quartet, they likely will be heard as a challenge.

“We’re willing to open a new page with the US and Europe,” he says through an interpreter, daring President Barack Obama to chart a radical change of course in the Middle East as an acknowledgement of decades of failed US policy in the region. “He’ll continue to repeat the mistakes of those who went before him, unless there is a marked change.”

But as Mishal expanded on his ‘new page’ theme, it soon emerges that what he really means to say is that Hamas requires the US and the European Union to open a new page with the Palestinian Islamist movement.

“I don’t mean that Hamas will take a new [policy] position. I’m talking about a readiness on our part to deal with Washington and Europe. But they have to be serious about dealing with us on Palestinian rights.”

Arguing that Washington and its European allied need to abandon their policy of isolating Hamas until the movement folds to conditions set by the Middle East Quartet, Mishal lectures: “They’ve been trying the wrong way and the wrong approach.”

Then he takes apart what he sees as early signs that nothing has changed in Washington since George W. Bush departed the White House in January.

There is little value, Mishal says, in appointing the experienced Northern Irish peace-broker George Mitchell as a US envoy to the Middle East, if he is not authorised to talk to Hamas. “Would he have succeeded in Belfast if he was ordered to ignore the IRA?”

Mishal is derisory of Secretary of State Hillary Clinton’s ready acceptance of the Bush Administrations’ insistence that Hamas accede to Quartet demands that the Islamists renounce violence, recognise the state of Israel and abide by all previous undertakings on behalf of the Palestinian people.

He belittles Clinton’s warning that international donations for the reconstruction of Gaza had to be kept out of the “wrong hands.” And he ridiculed the seeming contradiction in her invitation to Iran to attend a regional conference on the future of Afghanistan, at the same time as she shunned Hamas on the grounds that not only was it a terrorist group, but “increasingly it was a client of Iran.”

“So despite a new presidency, it’s the same attitude in Washington,” Mishal says. “We expected real change from Obama - not just talk about change.

“They refused to accept the results of the Palestinian election because Hamas won - that failed. They resorted to imposing a siege on the Gaza Strip - that failed. Then they went to war against the Palestinians - and that failed.

“Despite all this, Hamas has advanced and grown, [so] within the logic of real politick, it is Washington that must reconsider its position if they want to achieve an outcome that is not failure.

“The US and Europe have become accustomed to insisting, that the change they demand of the Arabs will be that which is demanded by Israel, [but] the Israeli vision of peace creates only war and chaos.”

The bulk of the Hamas leader’s critique is aimed at Washington’s conduct of what Mishal calls the Palestinian file. And he denies there can be any reason for concern in Hamas at the Obama Administrations dramatic departure from the other policies of its predecessor in the region - its efforts to engage Tehran and Damascus, which could expose Hamas to uncertainties about its future.

Washington is seeking a thaw in its relations with Syria. At the same time it has asked Russia to intervene with Iran, hoping Moscow middlemen might persuade the Iranian regime to back away from its nuclear program. But Syria and Iran are Hamas’ principal sponsors in the region.

Mishal concedes that these indeed are significant events unfolding around his movement. But he prefers to cast them as Obama’s admission of the errors of the Bush II era, or as he puts it, “Washington having to deal with parties that have proved themselves on the ground.”

There’s more lecturing on this theme before he will address the question - which is about the risk that Hamas might become a sacrificial small-fry in any big-picture horse-trading between Washington and Damascus and or Tehran. Mishal inches up to the issue, warning that the U.S. should not seek to “isolate certain parties at the expense of other parties.”

Finally he bites in terms of the position of Hamas. “We’re not worried,” he says. “Hamas is not a card in anyone’s hand. We play an effective role, even in times of dramatic change. Nothing is going to happen in this region until the Palestinian issue is properly addressed - and many countries in the region, including Iran and Syria, hold a principled commitment to the Palestinian cause.”

As much as Mishal criticises Washington, he also pitches a quick plea that it not accept an argument in some quarters that perhaps the U.S. should seek achievable goals elsewhere, while leaving the Palestine-Israel diplomacy to regional players - like Cairo and an increasingly assertive Istanbul. “Israel doesn’t listen to the regional players. The only party that has the power to pressure Israel and to dictate terms to it is Washington.”

Does Khalid Mishal have any regrets about the extent of the damage Israeli forces inflicted on Gaza in December-January - about 1300 Palestinians dead, thousands injured and thousands of homes and other buildings damaged and destroyed? The assault came after Hamas refused to renegotiate a truce, on the grounds that Israel had consistently violated what Hamas understood to be the terms of the six-month ceasefire.

Reminded that the Hezbollah leader Hassan Nasrallah had publicly acknowledged that had he known the ferocity of the Israeli retaliation when it invaded Lebanon after the abduction of three Israeli soldiers in 2006, he would not have taken the soldiers, Mishal insists that Gaza and Hamas are different cases.

“The 2006 captures were an option, a choice for Hezbollah; so they are entitled to assess the validity of what they did in terms of the consequences for Lebanon. But for the Palestinians, Gaza wasn’t a question of choice.

“Israel was supposed to end the siege and open the border-crossings in return for a halt to the rockets - the rockets stopped, but the siege remained and the crossings stayed closed. It’s unfair to ask Palestinians if they want to die slowly under siege, or quickly under fire.”

Hamas senses a thaw in its isolation. Mishal’s visitors on the day he is interviewed, include parliamentary delegations from Greece and Italy. A few days previously, they came from the British and European parliaments.

These MPs come in a wave of publicity, challenging their governments to engage Hamas. But the trail-blazers came earlier - analysts from American and European think-tanks who decided the time had come to make discrete efforts to understand the Hamas mindset.

These are small, non-government delegations. But they are signs of different times for Hamas, of feelers being extended from corners of the world that till now have gone along with the US-led campaign to keep Hamas snap-frozen. And they are in marked contrast to the cold shoulder Israel is feeling around the world in the aftermath of its ferocious assault on Gaza, a chill that is billed in Israel as the country’s worst diplomatic crisis in two decades.

As Israel increases its PR spend in a bid to arrest its plummeting stocks internationally in the aftermath of Gaza, Hamas is buoyed by confirmation from Britain that, notwithstanding consternation in Washington, it is moving to ease its isolation of Hezbollah, Hamas’ counterpart in Lebanon, by agreeing to talk to its political wing.

London says the move is justified because Hezbollah joined a government of national unity. Given that national unity talks are on foot in the Palestinian Occupied Territories, an argument is being formulated in Hamas that it should be granted the same dispensation by London.

France too has intimated a willingness to open dialogue with Hamas and a growing army of former government officials and international peace negotiators is urging that Hamas be given a seat at the table. Led by former US president Jimmy Carter, who has visited Mishal in Damascus, it includes the likes of former British Prime Minister Tony Bair and the head of Saudi intelligence, Prince Turki Bin Faisal.

Despite, or perhaps because of the carnage in Gaza, the mood in the Hamas bunker is upbeat - support for the Islamist movement among Palestinians rose markedly after the January hostility, just as it fell for the US-backed Palestinian president Mahmoud Abbas and his enfeebled Fatah faction, whose writ is confined to the West Bank.

“More and more, the US and Israel and others in their camp understand that they cannot implement their agenda against us - because of the strength that we have acquired,” Mishal says. “Netanyahu destroyed the peace process the last time he was prime minister and his plan now for Palestinians to be limited to some kind of economic independence will fail too.”

Pressed on what policy changes Hamas might make as a gesture to a new regional order, Mishal offers little, arguing: “Hamas has already changed - we accepted the national accords for a Palestinian state based on the 1967 borders and we took part in the 2006 Palestinian elections. Where is the response by Washington and the others? All we got was hostility and negativity.”

In particular, Mishal refuses to entertain rewriting Hamas’ offensive charter, despite the chance that such a move could alter perceptions of the movement at the same time as it might serve to protect the movement’s underbelly from sniping by its critics.

In 2005, the Hamas had appointed a committee to review its controversial 1988 Charter - with its offensive language, its anti Semitism, its incitement to battle and is calls for the elimination f the state of Israel. In a costly fit of pique over being consigned to the sinbin by the US and others after its election win, Hamas shelved the review.

Policy changes by Hamas have rendered much of the document redundant. But the continued inclusion of the call for the destruction of Israel has exposes Hamas to regular atacks.

Revealing that the pique of 2006 is just as potent today, Mishal says: “They didn’t give us a chance after we won the election, irrespective of what we might have done.” Will the charter be rewritten - “not a chance.”

“The message to us from the world was absolute rejection of the election outcome, because the result was not acceptable to the US and to corrupt elements of the Palestinian community [read Fatah].

“Our approach is not by means of changing the charter, a document written in 1988, but by virtue of our policy program today. Judge us by what we do today - not by what was written more than 20 years ago.

“Hamas has declared it’s acceptance of a Palestinian state in the occupied territories; we have joined the political process; we have entered short-term truces with Israel - this is the reality that the world needs to deal with. You say people use the Charter as a weapon against us - well, let them.”

For now, at least, Mishal’s public face is that Hamas is prepared to engage the world - but on his terms.

He becomes irritable when questioned about a letter from Hamas to President Obama, which reportedly was passed to US Senator John Kerry during a recent visit to Israel and Gaza.

“I don’t want to talk about it,” he says. Pressed, he claims that the letter was on behalf of an individual - not the movement.

“If Hamas wishes to communicate with the US Administration, it will do so in a different way - at the right time; in the appropriate manner. Up to now, the Americans have rejected any communication with us. Hamas knows itself well and those who reject it today will find themselves compelled to deal with it tomorrow,” he says.

“In the meantime, Hamas will communicate with Washington through its actions on the ground - I’m talking about all our activities; about our weight and effectiveness; our social welfare and our resistance.”

If that’s how he feels about talking to Washington, what about direct talks with Israel?

Neither side likes to admit it, but Israel and Hamas have demonstrated that they actually can negotiate and in some circumstances, achieve outcomes that are acceptable to each other.

For all the squabbling over how the Gaza truce was breached and by which party, they did agree to a six-month ceasefire last summer - which Hamas held to, despite its view that Israel did not stick to its side of the deal.

There was no agreed text. This was an indirect understanding, arrived at through talks by negotiators for Hamas and Israel who met separately with Egyptian middlemen.

Israel believed that Hamas had agreed to stop the rain of rockets fired from Gaza into nearby Israeli communities. Hoping to breathe some life back into the strip’s comatose economy, Hamas understood that in exchange, Israel would end its year-long siege of Gaza.

Figures quoted by The New York Times, indicate that the rocket-rate was reduced by as much as 80-90 per cent as Hamas curbed its own fire and that of the lesser militia groups in Gaza.

But in comparison, the number of trucks entering Gaza increased only marginally. By closing its border crossings into Gaza, Israel can stop the movement of goods, fuel and people, often allowing a trickle of movement that imposes a level of hardship that amounts to total economic collapse.

Under the June deal, the daily rate of trucks entering Gaza did increase - but only from about 70 a day to about 90 which, according to the figures quoted in The New York Times - well short of a pre-siege delivery-rate of 500-600 trucks a day.

In light of that experience, would Hamas negotiate directly with Israel, to produce documented deals that might allow third parties to more accurately verify compliance or violations?

“Direct or indirect is not the point,” Mishal says. “What really matters is will Israel be truly ready to recognise Palestinian rights and to end the occupation? When Israel is ready to accept this,” he goes on, “we will decide what to do … but we’ll not give them a platform for useless negotiation, for trying to improve their image internationally [because] they always try to buy time and to create new facts on the ground.”

When the shooting stopped in Gaza earlier this year, there were more indirect talks. But Hamas refuses to buckle to Israel’s terms and as Mishal describes it, rather cumbersomely, “the situation is not war like it was in January … and it’s not a state of calm.”

At this point, the Hamas leader stubbornly refuses to acknowledge a more colourful description of events on the ground by one of his colleagues, who told reporters in February, “the [smuggling] tunnels are still operating and rockets are still being fired.”

Mishal refuses to take the question. Pressed to explain, he says: “I am a leader. From my position as leader, I describe and express myself in a manner which I deem to be best when I speak about the situation.”

“But the tunnels are open and rockets are firing, aren’t they?” he is asked. At this point, Mishal becomes Delphic: “You know my way of talking. There is an Arab proverb -‘every situation has its way of being expressed’!”

Mishal insists that it is the Israelis who must explain why the latest truce negotiations collapsed - including their failure to agree terms for the release of the captured Israeli soldier Gilad Shalit. But in what Israel will read as a threat, he warns there is a risk that more Israeli troops will captured by Hamas - to increase the pressure for Israel to agree to Hamas’ demand for the release of as many as 1400 Palestinian prisoners held in Israeli jails.

Asked about reports the accuracy of reports that Hamas is seeking freedom for 1400 prisoners, Mishal explains the calculus of the negotiations - from Hamas’ perspective.

In the most celebrated exchanged in the past, three Israeli soldiers were swapped, in 1985, for 1150 Palestinians - almost 400 Palestinians for each Israeli.

Asked how Hamas now could demand more than three times that many Palestinians in return for Shalit’s freedom, he says: “Israel’s prisoner numbers were relatively low in ‘85 - 1150 would have been most of those they held. The number we are seeking for Shalit is only one-tenth of today’s number of Palestinians in Israeli jails.

“The Israelis just don’t learn. When they refuse to release Palestinians, it forces the Palestinians to resort to other means to gain their release - and inevitable this incudes the capture of more Israeli soldiers.”

In the March 18 interview in Damascus, Mishal recommits Hamas to the electoral process in the Occupied Territories - despite Israel rounding up and jailing more than 30 of Hamas’ West Bank MPs in the aftermath of the 2006 election. And in the days after the interview, taking in 10 senior Hamas figures in the West Bank, including four MPs, who Israel described as ‘terror operatives’ - reportedly in a bid to pressure Hamas to accept Israel’s terms in the haggling over Shalit.

Underlying Mishal’s analysis is Hamas’ determination to avoid what it sees as the pitfalls, for the Palestinian side, of the years that followed the 1993 Oslo Accords.

Under the leadership of Yasser Arafat, the Fatah movement and the PLO renounced violence as a weapon and recognised the state of Israel, but achieved little in endless rounds of so-called peace talks as Israel continued to carve up the Occupied Territories to suit its own needs. Since Arafat’s death at the end of 2004, his successor Mahmoud Abbas has made no headway either.

Finishing up, Mishal lays out the pieces of the geopolitical puzzle and he laughs. Despite Islam’s prohibition on gambling, he concludes: “If the Palestinian people were gamblers, they would bet on Hamas.”

Video and Text: Obama News Conference (24 March)

See Also: John Matlin on "Obama and the US Economy"

"If the Washington press corps successfully links Obama with the privileged in American society and nails him as unable to curb the worst excesses of Wall Street, his Presidency may descend into the disaster that few predicted and fewer, except died-in-the-wool Republicans, wanted."

CNN Summary: "Obama defends his budget as essential to recovery"



PRESIDENT OBAMA: Hello, everybody. Please have a seat.

Good evening. Now, before I take questions from the correspondents, I want to give everyone who’s watching tonight an update on the steps we’re taking to move this economy from recession to recovery, and ultimately to prosperity.

Now, it’s important to remember that this crisis didn’t happen overnight and it didn’t result from any one action or decision. It took many years and many failures to lead us here. And it will take many months and many different solutions to lead us out. There are no quick fixes, and there are no silver bullets.

That’s why we’ve put in place a comprehensive strategy designed to attack this crisis on all fronts. It’s a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long term. And we’re beginning to see signs of progress.

The first step we took was to pass a recovery plan to jump-start job creation and put money in people’s pockets. And this plan’s already saved the jobs of teachers and police officers. It’s creating construction jobs to rebuild roads and bridges. And yesterday I met with a man whose company is reopening a factory outside of Pittsburgh that’s rehiring workers to build some of the most energy-efficient windows in the world.

And this plan will provide a tax cut to 95 percent of all working families that will appear in people’s paychecks by April 1st.

The second step we took was to launch a plan to stabilize the housing market and help responsible homeowners stay in their homes. This plan’s one reason that mortgage interest rates are now at near- historic lows.

We’ve already seen a jump in refinancings of mortgages as homeowners take advantage of lower rates. And every American should know that up to 40 percent of all mortgages are now eligible for refinancing. This is the equivalent of another tax cut, and we’re also beginning to see signs of increased sales and stabilizing home prices for the first time in a very long time.

The third part of our strategy is to restart the flow of credit to families and businesses. To that end, we’ve launched a program designed to support the markets for more affordable auto loans, student loans and small-business loans -- a program that’s already securitized more of this lending in the last week than in the last four months combined.

Yesterday, Secretary Geithner announced a new plan that will partner government resources with private investment to buy up the assets that are preventing our banks from lending money. And we will continue to do whatever is necessary in the weeks ahead to ensure the banks Americans depend on have the money they need to lend, even if the economy gets worse.

Finally, the most critical part of our strategy is to ensure that we do not return to an economic cycle of bubble and bust in this country. We know that an economy built on reckless speculation, inflated home prices and maxed-out credit cards does not create lasting wealth. It creates the illusion of prosperity, and it’s endangered us all.

The budget I submitted to Congress will build our economic recovery on a stronger foundation so that we don’t face another crisis like this 10 or 20 years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses and less dependence on foreign oil. We invest in our schools and our teachers, so that our children have the skills they need to compete with any workers in the world.

We invest in reform that will bring down the cost of health care for families, businesses and our government.

And in this budget, we have -- we have to make the tough choices necessary to cut our deficit in half by the end of my first term, even under the most pessimistic estimates.

At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt. It’s with a budget that leads to broad economic growth by moving from an era of borrow-and-spend to one where we save and invest.

And that’s why clean-energy jobs and businesses will do -- all across America. That’s what a highly skilled workforce can do all across America. That’s what an efficient health-care system that controls costs and entitlements like Medicare and Medicaid will do.

That’s why this budget is inseparable from this recovery, because it is what lays the foundation for a secure and lasting prosperity.

The road to that prosperity is still long, and we will hit our share of bumps and setbacks before it ends. But we must remember that we can get there if we travel that road as one nation, as one people.

You know, there was a lot of outrage and finger-pointing last week, and much of it is is understandable. I’m as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knees, partly because it’s yet another symptom of the culture that led us to this point.

But one of the most important lessons to learn from this crisis is that our economy only works if we recognize that we’re all in this together, that we all have responsibilities to each other and to our country.

Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayer’s dime is inexcusable, that the days of outsize rewards and reckless speculation that puts us all at risk have to be over. At the same time, the rest of us can’t afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity, and it is what will ultimately get these banks lending and our economy moving once more.

We’ll recover from this recession, but it will take time; it will take patience; and it will take an understanding that when we all work together, when each of us looks beyond our own short-term interest to the wider set of obligations we have towards each other, that’s when we succeed. That’s when we prosper. And that’s what is needed right now.

So let’s look towards the future with a renewed sense of common purpose, a renewed determination, and, most importantly, renewed confidence that a better day will come.

All right. With that, let me take some questions. And I’ve got a list here; let’s start off with Jennifer Loven, AP.

QUESTION: Thank you, Mr. President.

Your Treasury secretary and the Fed chair have been -- were on Capitol Hill today, asking for this new authority that you want to regulate big, complex financial institutions. But given the problems that the financial bailout program has had so far -- banks not wanting to talk about how they’re spending the money, the AIG bonuses that you mentioned -- why do you think the public should sign on for another new, sweeping authority for the government to take over companies, essentially?

PRESIDENT OBAMA: Well, keep in mind that it is precisely because of the lack of this authority that the AIG situation has gotten worse. Now, understand that AIG’s not a bank, it’s an insurance company. If it were a bank and it had effectively collapsed, then the FDIC could step in, as it does with a whole host of banks -- as it did with IndyMac -- and in a structured way renegotiate contracts, get rid of bad assets, strengthen capital requirements, resell it on the private marketplace.

So we’ve got a regular mechanism whereby we deal with FDIC-insured banks. We don’t have that same capacity with an institution like AIG, and that’s part of the reason why it has proved so problematic. I think a lot of people understandably say: Well, if we’re putting all this money in there, and if it’s such a big systemic risk to allow AIG to liquidate, why is it that we can’t restructure some of these contracts? Why can’t we do some of the things that need to be done in a more orderly way? And the reason is -- is because we have not obtained this authority.

We should have obtained it much earlier, so that any institution that poses a systemic risk that could bring down the financial system we can handle, and we can do it in an orderly fashion that quarantines it from other institutions. We don’t have that power right now. That’s what Secretary Geithner was talking about.

And I think that there’s going to be strong support from the American people and from Congress to provide that authority so that we don’t find ourselves in a situation where we’ve got to choose between either allowing an enormous institution like AIG, which is not just insuring other banks but is also insuring pension funds and potentially putting people’s 401(k)s at risk if it goes under -- that’s one choice -- and then the other choice is just to allow them to take taxpayer money without the kind of conditions that we’d like to see on it. So that’s why I think the authority’s so important.

QUESTION: But why should the public trust the government to handle that authority well?

PRESIDENT OBAMA: Well, as I said before, if you look at how the FDIC has handled a situation like IndyBank, for example, it actually does these kinds of resolutions effectively when it’s got the tools to do it.

We don’t have the tools right now.

Okay. Chuck Todd.

QUESTION: Thank you, Mr. President. Some have compared this financial crisis to a war, and in times of war, past presidents have called for some form of sacrifice. Some of your programs, whether for Main Street or Wall Street, have actually cushioned the blow for those that were irresponsible during this -- during this economic period of prosperity or supposed prosperity that you were talking about.

Why, given this new era of responsibility that you’re asking for, why haven’t you asked for something specific that the public should be sacrificing to participate in this economic recovery?

PRESIDENT OBAMA: Well, let me -- let me take that question in a couple -- couple of phases. First of all, it’s not true that we have not asked sacrifice from people who are getting taxpayer money. We have imposed some very stiff conditions. The only problem that we’ve had so far are contracts that were put in place before we took over.

But moving forward, anybody -- any bank, for example, that is receiving capital from the taxpayers is going to have to have some very strict conditions in terms of how it pays out its executives, how it pays out dividends, how it’s reporting its lending practices. So we want to make sure that there’s some stiff conditions in place.

With respect to the American people, I think folks are sacrificing left and right. They -- you’ve got a lot of parents who are cutting back on everything to make sure that their kids can still go to college. You’ve got workers who are deciding to cut an entire day and entire day’s worth of pay so that their fellow co-workers aren’t laid off. I think that across the board people are making adjustments, large and small, to accommodate the fact that we’re in very difficult times right now.

What I’ve said here in Washington is that we’ve got to make some tough choices. We got to make some tough budgetary choices. What we can’t do, though, is sacrifice long-term growth investments that are critical to the future. And that’s why my budget focuses on health care, energy, education -- the kinds of things that can build a foundation for long-term economic growth as opposed to the fleeting prosperity that we’ve seen over the last several years. I mean, when you have an economy in which the majority of growth is coming from the financial sector -- when AIG selling a derivative is counted as an increase in the gross domedic -- domestic product, then that’s not a model for sustainable economic growth.

And what we have to do is invest in those things that will allow the American people’s capacity for ingenuity and innovation, their ability to take risks but make sure that those risks are grounded in good products and good services that they believe they can market to the rest of the country, that those models of economic growth are what we’re promoting, and that’s what I think our budget does.

QUESTION: But you don’t think there should be a specific call to action that you want the American -- I mean, this is -- you’ve described this as an economic crisis like nothing we have seen since the Great Depression.

PRESIDENT OBAMA: Well, as I said, the American people are making a host of sacrifices in their individual lives. We are going through an extraordinary crisis, but we believe that taken -- if you take the steps that we’ve already taken with respect to housing, with respect to small businesses, if you look at what we’re doing in terms of increasing liquidity in the financial system, that the steps that we’re taking can actually stabilize the economy and get it moving again.

What I’m looking from the American people to do is that they are going to be doing what they’ve always done, which is working hard, looking after their families, making sure that despite the economic hard times that they’re still contributing to their community, that they’re still participating in volunteer activities, that they are paying attention to the debates that are going on in Washington.

And the budgets that we’re putting forward and some of the decisions that we’re having to make are going to be tough decisions, and we’re going to need the support of the American people, and that’s part of why what I’ve tried to do is to be out front as much as possible, explaining in very clear terms exactly what we’re doing.

Jake?

QUESTION: Thank you, Mr. President. Right now on Capitol Hill, Senate Democrats are writing a budget, and according to press accounts and their own statements, they’re not including the middle-class tax cut that you include in the stimulus. They’re talking about phasing that out. They’re not including the cap-and-trade that you have in your budget, and they’re not including other measures.

I know when you outlined your four priorities over the weekend, a number of these things were not in there. Will you sign a budget if it does not contain a middle-class tax cut, does not contain cap-and- trade?

PRESIDENT OBAMA: Well, I’ve emphasized repeatedly what I expect out of this budget. I expect that there’s serious efforts at health care reform, and that we are driving down costs for families and businesses, and ultimately for the federal and state governments that are going to be broke if we continue on the current path.

I’ve said that we’ve got to have a serious energy policy that frees ourselves from dependence on foreign oil and makes clean energy the profitable kind of energy. We’ve got to invest in education, K through 12 and beyond, to upgrade the skills of the American worker so we can compete in -- in the international economy. And I’ve said that we’ve got to start driving our deficit numbers down.

Now, we never expected, when we printed out our budget, that they would simply Xerox it and vote on it. We assume that it has to go through the legislative process. I have not yet seen the final product coming out of the Senate or the House, and we’re in constant conversations with them. I am confident that the budget we put forward will have those principles in place.

When it comes to the middle-class tax cut, we already had that in the recovery. We know that that’s going to be in place for at least the next two years. We had identified a specific way to pay for it. If Congress has better ideas in terms of how to pay for it, then we’re happy to listen.

When it comes to cap-and-trade, the broader principle is that we’ve got to move to a new energy era. And that means moving away from polluting energy sources towards cleaner energy sources.

That is a potential engine for economic growth.

I think cap-and-trade is the best way, from my perspective, to achieve some of those gains, because what it does is it starts pricing the pollution that’s being sent into the atmosphere.

The way it’s structured, it has to take into account regional differences. It has to protect consumers from huge spikes in electricity prices. So there are a -- a lot of technical issues that are going to have to be sorted through.

Our point in the budget is, let’s get started now. We can’t wait. And my expectation is that the energy committees, or other relevant committees in both the House and the Senate, are going to be moving forward a strong energy package. It’ll be authorized. We’ll get it done. And I will sign it. Okay?

QUESTION: So is that a yes, sir? You’re willing to sign a budget that doesn’t have those two provisions?

PRESIDENT OBAMA: No; I -- what I said was -- is I haven’t seen yet what provisions are in there. The bottom line is -- is that I want to see health care, energy, education and serious efforts to reduce our budget deficit.

And there are going to be a lot of details that are still being worked out. But I have confidence that we’re going to be able to get a budget done that’s reflective of what needs to happen in order to make sure that America grows. Okay?

Chip Reid.

QUESTION: Thank you, Mr. President.

At both of your town hall meetings in California last week, you said, quote, ”I didn’t run for president to pass on our problems to the next generation.”

But under your budget, the debt will increase $7 trillion over the next 10 years. The Congressional Budget Office says $9.3 trillion. And today on Capitol Hill, some Republicans called your budget, with all the spending on health care, education and environment, the most irresponsible budget in American history.

Isn’t that kind of debt exactly what you were talking about when you said passing on our problems to the next generation?

PRESIDENT OBAMA: First of all, I suspect that some of those Republican critics have a short memory, because as I recall, I’m inheriting a $1.3 trillion deficit, annual deficit, from them. That would be point number one.

Point number two. Both under our estimates and under the CBO estimates, both -- the most conservative estimates out there, we drive down the deficit over the first five years of our budget. The deficit is cut in half. And folks aren’t disputing that.

Where the dispute comes in is what happens in a whole bunch of out years. And the main difference between the budget that we presented and the budget that came out of Congressional Budget Office is assumptions about growth.

They’re assuming a growth rate of 2.2. We’re assuming a growth rate of 2.6. Those small differences end up adding up to a lot of money. Our assumptions are perfectly consistent with what blue chip forecasters out there are saying.

Now, none of us know exactly what’s going to happen six or eight or 10 years from now. Here’s what I do know: If we don’t tackle energy, if we don’t improve our education system, if we don’t drive down the costs of health care, if we’re not making serious investments in science and technology and our infrastructure, then we won’t grow 2.6 percent; we won’t grow 2.2 percent. We won’t grow.

And so what we’ve said is let’s make the investments that ensure that we meet our growth targets, that put us on a pathway to growth, as opposed to a situation in which we’re not making those investments and we still have trillion-dollar deficits.

And there’s a interesting reason why some of these critics haven’t put out their own budget. I mean, we haven’t seen an alternative budget out of them. And the reason is because they know that, in fact, the biggest driver of long-term deficits are the huge health care costs that we’ve got out here that we’re going to have to tackle.

And we -- that if we don’t deal with some of the structural problems in our deficit, ones that were here long before I got here, then we’re going to continue to see some of the problems in those out years.

And so what we’re trying to emphasize is let’s make sure that we’re making the investments that we need to grow, to meet those growth targets. At the same time, we’re still reducing the deficit by a couple of trillion dollars. We are cutting out wasteful spending in areas like Medicare. We’re -- we’re changing procurement practices when it comes to the Pentagon budget. We are looking at social- service programs and education programs that don’t work and eliminate them. And we will continue to go line-by-line through this budget, and where we find programs that don’t work we will eliminate them.

But it is -- it is going to be a(n) impossible task for us to balance our budget if we’re not taking on rising health care costs. And it’s going to be an impossible task to balance our budget or even approximate it if we are not boosting our growth rates. And -- and that’s why our budget focuses on the investments we need to make that happen.

QUESTION: But even under your budget -- as you said, over the next four or five years, you’re going to cut the deficit in half. Then, after that, six years in a row it goes up, up, up.

If you’re making all these long-term structural cuts --

PRESIDENT OBAMA: Right.

QUESTION: -- why does it continue to go up in the out years?

PRESIDENT OBAMA: Well, look. It is going to take a whole host of adjustments, and we couldn’t reflect all of those adjustments in this budget. Let me give you an example. There’s been a lot of talk about entitlements and Medicare and Medicaid. The biggest problem we have long term is Medicare and Medicaid, but whatever reforms we initiate on that front -- and we’re very serious about working on a bipartisan basis to reduce those deficits -- or reduce those costs -- you’re not going to see those savings reflected until much later.

And so a -- a budget is a snapshot of what we can get done right now, understanding that eight, 10 years from now we will have had a whole series of new budgets. And we’re going to have to make additional adjustments. And once we get out of this current economic crisis, then it’s going to be absolutely important for us to take another look and say, ”Are we growing as fast as we need to grow? Are there further cuts that we need to make? What other adjustments are -- is it going to take for us to have a sustainable budget level?”

But keep in mind -- just to give one other example, as a percentage of gross domestic product, we are reducing non-Defense discretionary spending to its lowest level since the ’60s -- lower than it was under Reagan, lower than it was under Clinton, lower than it was under Bush or both Bushes.

And so if we’re growing, if we are doing what’s necessary to create new businesses and to expand the economy, and we are making sure that we’re eliminating some of these programs that aren’t working, then over time that gap can close.

But I’m -- look, I’m not going to lie to you. It is tough. As I said, that’s why the critics tend to criticize, but they don’t offer an alternative budget, because even if we were not doing health care, we were not doing energy, we were not doing education, they’d still have a whole bunch of problems in those out years, according to CBO projections. The only difference would -- is that we will not have invested in what’s necessary to make this economy grow.

Is Lourdes here, from Univision? (Let’s see ?).

QUESTION: Thank you, Mr. President. Today your administration presented a plan to help curb the violence in Mexico and also to control any or prevent any spillover of the violence into the United States. Do you consider the situation now a national security threat?

And do you believe that it could require sending national troops to the border? Governor Perry of Texas has said that you still need more troops and more agents. How do you respond to that?

PRESIDENT OBAMA: Well, first of all let’s focus on what we did today. It’s very significant. We are sending millions of dollars in additional equipment to provide more effective surveillance. We are providing hundreds of additional personnel that can help control the border, deal with customs issues. We are coordinating very effectively with the Mexican government and President Calderon, who has taken on a(n) extraordinarily difficult task dealing with these drug cartels that have gotten completely out of hand.

And so the steps that we’ve taken are designed to make sure that the border communities in the United States are protected and you’re not seeing a spillover of violence, and that we are helping the Mexican government deal with a very challenging situation.

Now, we are going to continue to monitor the situation. And if the steps that we’ve taken do not get the job done, then we will do more.

One last point that I want to make about this. As I said, President Calderon has been very courageous in taking on these drug cartels.

We’ve got to also take some steps. Even as he is doing more to deal with the drug cartels sending drugs into the United States, we need to do more to make sure that illegal guns and cash aren’t flowing back to these cartels. That’s part of what’s financing their operations. That’s part of what’s arming them. That’s what makes them so dangerous. And this is something that we take very seriously, and we’re going to continue to work on diligently in the months to come.

Kevin Baron, Stars and Stripes. Is Kevin here? There you go.

QUESTION: Mr. President, where do you plan to find savings in the Defense and Veterans Administration’s budgets when so many items that seem destined for the chopping block are politically untenable, perhaps?

PRESIDENT OBAMA: I’m sorry, so many?

QUESTION: When so many items that may be destined for the chopping block seem politically untenable, from major weapons systems -- as you mentioned, procurement -- to wounded warrior care costs, or increased operations on Afghanistan, or the size of the military itself.

PRESIDENT OBAMA: Well, a couple of -- a couple of points I want to make.

The budget that we’ve put forward reflects the largest increase in veterans funding in 30 years. That’s the right thing to do. Chuck asked earlier about sacrifices. I -- I don’t think anybody doubts the extraordinary sacrifices that men and women in uniform have already made. And when they come home, then they have earned the benefits that they receive.

And unfortunately, over the last several years, all too often the VA has been under-resourced when it comes to dealing with things like post-traumatic stress disorder or traumatic brain injury, dealing with some of the backlogs in admission to VA hospitals.

So there are a whole host of veterans’ issues that I think every American wants to see properly funded, and that’s what’s reflected in our budget. Where the savings should come in -- and I’ve been working with Secretary Gates on this and will be detailing it more in the weeks to come -- is how do we reform our procurement system so that it keeps America safe and we’re not wasting taxpayer dollars? And there is uniform acknowledgment that the procurement system right now doesn’t work. That’s not just my opinion; that’s John McCain’s opinion; that’s Carl Levin’s opinion.

There are a whole host of people who are students of the procurement process that will say if you’ve got a whole range of billion-dollar, multi-billion-dollar systems that are -- where we’re seeing cost overruns of 30 percent or 40 percent or 50 percent, and then still don’t perform the way they’re supposed to or are providing our troops with the kinds of tools that they need to succeed on their missions, then we’ve got a problem.

Now, I think everybody in this town knows that the politics of changing procurement is tough, because, you know, lobbyists are very active in this area. You know, contractors are very good at dispersing the jobs in plants in the Defense Department widely.

And so what we have to do is to go through this process very carefully, be more disciplined than we’ve been in the last several years. As I’ve said, we’ve already identified, potentially, $40 billion in savings, just by some of the procurement reforms that are pretty apparent to a lot of -- a lot of critics out there. And we are going to continue to find savings in a way that allows us to put the resources where they’re needed but to make sure that we’re not simply fattening defense contractors.

One last point. In order for us to get a handle on these costs, it’s also important that we are honest in what these costs are. And that’s why it was so important for us to acknowledge the true costs of the Iraq war and the Afghan war, because if -- if those costs are somehow off the books and we’re not thinking about them, then it’s hard for us to make some of the tough choices that need to be made.

Okay. Ed Henry. Where’s Ed? There he is.

QUESTION: Thank you, Mr. President. You spoke again at the top about your anger about AIG. You’ve been saying that for days now. But why is it that it seems Andrew Cuomo seems to be, in New York, getting more actual action on it? And when you and Secretary Geithner first learned about this, 10 days, two weeks ago, you didn’t go public immediately with that outrage. You waited a few days, and then you went public after you realized Secretary Geithner really had no legal avenue to stop it.

And more broadly -- I just want to follow up on Chip and Jake -- you’ve been very critical of President Bush doubling the national debt. And to be fair, it’s not just Republicans hitting you. Democrat Kent Conrad, as you know, said, quote, ”When I look at this budget, I see the debt doubling again.” You keep saying that you’ve inherited a big fiscal mess. Do you worry, though, that your daughters, not to mention the next president, will be inheriting an even bigger fiscal mess if the spending goes out of control?

PRESIDENT OBAMA: Of course I do, Ed, which is why we’re doing everything we can to reduce that deficit. Look, if this were easy, then we would have already had it done and the budget would have been voted on and everybody could go home. This is hard. And the reason it’s hard is because we’ve accumulated a structural deficit that’s going to take a long time, and we’re not going to be able to do it next year or the year after or three years from now.

What we have to do is bend the curve on these deficit projections, and the best way for us to do that is to reduce health care costs. That’s not just my opinion; that’s the opinion of almost every single person who has looked at our long-term fiscal situation.

Now, how do we -- how are we going to reduce health care costs? Because the problem is not just in government-run programs, the problem is in the private sector as well. It’s experienced by families. It’s experienced by businesses. And so what we’ve said is, look, let’s invest in health information technologies, let’s invest in preventive care, let’s invest in mechanisms that look at who’s doing a better job controlling costs while producing good-quality outcomes in various states, and let’s reimburse on the basis of improved quality as opposed to simply how many procedures you’re doing. Let’s do a whole host of things, some of which cost money on the front end but offer the prospect of reducing costs on the back end.

Now, the alternative is to stand pat, and to simply say we are just going to not invest in health care; we’re not going to take on energy, we’ll wait until the next time that gas gets to $4 a gallon; we will not improve our schools, and we’ll allow China or India or other countries to lap our young people in terms of their performance; we will settle on lower growth rates, and we will continue to contract both as an economy and our ability to -- to provide a better life for our kids.

That I don’t think is the better option.

Now, have -- am I completely satisfied with all the work that needs to be done on deficits? No. That’s why I convened a fiscal responsibility summit, started in this room, to start looking at entitlements and to start looking at the big drivers of costs over the long term. Not all of those are reflected in our budget, partly because the savings we anticipate would be coming in years outside of the 10-year budget cycle that we’re talking about. Okay?

QUESTION: So on AIG, why did you wait -- why did you wait days to come out and express that outrage?

PRESIDENT OBAMA: I --

QUESTION: It seems like the action is coming out of New York in the attorney general’s office. It took you days to come public with Secretary Geithner and say, look, we’re outraged. Why did it take so long?

PRESIDENT OBAMA: Well, it took us a couple of days because I like to know what I’m talking about before I speak. (Laughter.) All right?

QUESTION: Secretary Geithner alluded --

PRESIDENT OBAMA: Major?

QUESTION: (Off mike.)

PRESIDENT OBAMA: Yeah.

QUESTION: Good evening, Mr. President. Thank you. Taking this economic debate a bit globally, senior Chinese officials have publicly expressed an interest in an international currency. This is described by Chinese specialists as a sign that they are less confident than they used to be in the value and the reliability of the U.S. dollar. European countries have resisted your calls to spend more on economic stimulus.

I wonder, sir, as a candidate who ran concerned about the image of the United States globally, how comfortable you are with the Chinese government, run by communists, less confident than they used to be in the U.S. dollar, and European governments, some of the center-left, some of them socialist, who say you’re asking them to spend too much?

PRESIDENT OBAMA: Well, first of all, I haven’t asked them to do anything. What I’ve suggested is -- is that all of us are going to have to take steps in order to lift the economy. We don’t want a situation in which some countries are making extraordinary efforts and other countries aren’t, with the hope that somehow the countries that are making those important steps lift everybody up.

And so somebody’s got to take leadership. It’s not just me, by the way. I was with Kevin Rudd, prime minister of Australia, today, who was very forceful in suggesting that countries around the world, those with the capacity to do so, take the steps that are needed to fill this enormous hole in global demand. Gordon Brown, when he came to visit me, said the exact same thing.

So the goal at the G-20 summit, I think, is to do a couple of things. Number one, say to all countries: Let’s do what’s necessary in order to create jobs and to get the economy moving again. Let’s avoid steps that could result in protectionism, that would further contract global trade. Let’s focus on how are we going to move our regulatory process forward in order so that we do not see the kinds of systemic breakdowns that we’ve already seen.

And that -- that means not just dealing with banks, but also some of the other financial flows that are out here that are currently unregulated. We’ve got to update regulations that date back to the 1930s, and we’re going to have to do some coordination with other countries in order to accomplish that.

As far as confidence in the U.S. economy or the dollar, I would just point out that the dollar is extraordinarily strong right now. And the reason the dollar is strong right now is because investors consider the United States the strongest economy in the world, with the most stable political system in the world.

So you don’t have to take my word for it. I think that there is a great deal of confidence that ultimately, although we are going through a rough patch, that the prospects for the world economy are very, very strong.

And -- and last point I would make in terms of changing America’s image in the world, Garrett, I -- you know, I haven’t looked at the latest polling around the world, but I think the -- it’s -- I think it’s fair to say that the response that people have had to our administration and the steps we have taken are ones that are restoring a sense of confidence and the ability of the United States to assert global leadership.

QUESTION: Is there a need --

PRESIDENT OBAMA: That will just strengthen -- excuse me?

QUESTION: Is there a need for a global currency?

PRESIDENT OBAMA: I don’t believe that there’s a need for a global currency.

Mike Allen, Politico. Hi, Mike.

QUESTION: Mr. President, are you -- (takes mic) -- thank you. Thank you, Mr. President. Are you reconsidering your plan to cut the interest-rate deduction for mortgages and for charities? And do you regret having proposed that in the first place?

PRESIDENT OBAMA: No, I think it’s -- I think it’s the right thing to do.

Where we’ve got to make some difficult choices -- here’s what we did with respect to tax policy. What we said was that over the last decade, the average worker, the average family have seen their wages and incomes flat. Even at times where supposedly we were in the middle of an economic boom, as a practical matter their incomes didn’t go up. And so (what/well ?) we said -- let’s give them a tax cut. Let’s give them some relief, some help -- 95 percent of American families.

Now, for the top 5 percent, they’re the ones who typically saw huge gains in their income. I -- I fall in that category. And what we’ve said is, for those folks, let’s not renew the Bush tax cuts. So let’s go back to the rates that existed back in -- during the Clinton era, when wealthy people were still wealthy and doing just fine. And let’s look at the level at which people can itemize their deductions.

And what we’ve said is let’s go back to the rate that existed under Ronald Reagan.

People are still going to be able to make charitable contributions. It just means if you give $100 and you’re in this tax bracket, at a certain point, instead of being able to write off 36 (percent) or 39 percent, you’re writing off 28 percent. Now, if it’s really a charitable contribution, I’m assuming that that shouldn’t be the determining factor as to whether you’re giving that hundred dollars to the homeless shelter down the street.

And so this provision would effect about 1 percent of the American people. They would still get deductions. It’s just that they wouldn’t be able to write off 39 percent. In that sense, what it would do is it would equalize. When I give $100, I get the same amount of deduction as when some -- a bus driver who’s making $50,000 a year or $40,000 a year gives that same hundred dollars. Right now, he gets 28 percent -- he gets to write off 28 percent, I get to write off 39 percent. I don’t think that’s fair.

So I think this was a good idea. I think it is a realistic way for us to raise some revenue from people who benefitted enormously over the last several years. It’s not going to cripple them.

They’ll still be well-to-do. And, you know, ultimately if we’re going to tackle the serious problems that we’ve got, then in some cases those who are more fortunate are going to have to pay a little bit more.

QUESTION: It’s not the well-to-do people; it’s the charities. Given what you’ve just said --

PRESIDENT OBAMA: Yeah.

QUESTION: -- are you confident that charities are wrong when they contend that this would discourage giving?

PRESIDENT OBAMA: Yes. I am. I mean, if you look at the evidence -- there’s very little evidence that this has a significant impact on charitable giving. I’ll tell you what has a significant impact on charitable giving is a financial crisis and an economy that’s contracting. And so the most important thing that I can do for charitable giving is to fix the economy, to get banks lending again, to get businesses opening their doors again, to get people back to work again. Then I think charities will do just fine.

Kevin Chappell. Hi, Kevin.

QUESTION: Thank you, Mr. President. A recent report found that as a result of the economic downturn, one in 50 children are now homeless in America. With shelters at full capacity, tent cities are sprouting up across the country.

In passing your stimulus package, you said that help was on the way, but what would you say to these families, especially children, who are sleeping under bridges and in tents across the country?

PRESIDENT OBAMA: Well, the first thing I’d say is that I’m heartbroken that any child in America is homeless.

And the most important thing that I can do on their behalf is to make sure their parents have a job. And that’s why the recovery package said, as a first priority, how are we going to save or create 3.5 million jobs? How can we prevent layoffs for teachers and police officers? How can we make sure that we are investing in the infrastructure for the future that can put people back to work right away? How do we make sure that when people do lose their jobs, that their unemployment insurance is extended, that they can keep their health care?

So there are a whole host of steps that we’ve done to provide a cushion for folks who have fallen on very hard times and to try to spur immediate projects that can put people back to work.

Now, in the meantime, we’ve got to work very closely with the states to monitor and to help people who are still falling through the cracks.

And, you know, the homeless problem was bad even when the economy was good. Part of the change in attitudes that I want to see here in Washington and all across the country is a belief that it is not acceptable for children and families to be without a roof over their heads in a country as wealthy as ours. And so we’re going to be initiating a range of programs as well to deal with homelessness.

One area in particular I want to focus on is the issue of veterans. The rate of homelessness among veterans is much, much higher than for non-veteran populations.

And so we’ve got -- a number of the increases that we’re looking for in our budget on veterans funding directly addresses the issue of homeless veterans. That, I think, can provide some real help.

Ann Compton. Hey, Ann.

QUESTION: Sir. (Soft laughter.)

PRESIDENT OBAMA: You sound surprised. (Laughter.)

QUESTION: I am surprised! (Chuckles.) Could I ask you about race?

PRESIDENT OBAMA: You may.

QUESTION: Yours is a rather historic presidency, and I’m just wondering whether in any of the policy debates that you’ve had within the White House, the issue of race has come up, or whether it has in the way you feel you’ve been perceived by other leaders or by the American people. Or have the last 64 days been a relatively color- blind time?

PRESIDENT OBAMA: I -- I think that the last 64 days has been dominated by me trying to figure out how we’re going to fix the economy, and that’s -- affects black, brown and white. And you know, obviously, at the Inauguration I think that there was justifiable pride on the part of the country that we had taken a step to move us beyond some of the searing legacies of racial discrimination in this country, but that lasted about a day. And you know, right now the American people are judging me exactly the way I should be judged, and that is, are we taking the steps to improve liquidity in the financial markets, create jobs, get businesses to reopen, keep America safe?

And that’s what I’ve been spending my time thinking about.

Okay. Jon Ward, Washington Times. Where’s Jon?

QUESTION: Right here, sir.

PRESIDENT OBAMA: There you go.

QUESTION: Thank you, Mr. President.

In your remarks on stem-cell research earlier this month, you talked about a majority consensus in determining whether or not this is the right thing to do, to federally fund embryonic stem-cell research. I’m just wondering, though, how much you personally wrestled with the morality or ethics of federally funding this kind of research, especially given the fact that science so far has shown a lot of progress with adult stem cells but not a lot with embryonic?

PRESIDENT OBAMA: Okay. No, I -- I think it’s a -- I think it’s a legitimate question.

I -- I wrestle with these issues every day. As I mentioned to -- I think in an interview a couple of days ago, by the time an issue reaches my desk, it’s a hard issue. If it was an easy issue, somebody else would have solved it and it wouldn’t have reached me.

Look, I believe that it is very important for us to have strong moral guidelines, ethical guidelines, when it comes to stem-cell research or anything that touches on, you know, the issues of possible cloning or issues related to, you know, the human life sciences.

I think those issues are all critical, and I’ve said so before. I wrestle with it on stem cell; I wrestle with it on issues like abortion.

I think that the guidelines that we provided meet that ethical test. What we have said is that for embryos that are typically about to be discarded, for us to be able to use those in order to find cures for Parkinson’s or for Alzheimer’s or for, you know, all sorts of other debilitating diseases, juvenile diabetes, that -- that it is the right thing to do. And that’s not just my opinion. That is the opinion of a number of people who are also against abortion.

Now, I am glad to see progress is being made in adult stem cells. And if the science determines that we can completely avoid a set of ethical questions or political disputes, then that’s great. I have -- I have no investment in causing controversy. I’m happy to avoid it if that’s where the science leads us.

But what I don’t want to do is predetermine this based on a very rigid ideological approach. And that’s what I think is reflected in the executive order that I signed.

QUESTION: I meant to ask as a follow-up, though, do you think that scientific consensus is enough to tell us what we can and cannot do?

PRESIDENT OBAMA: No. I think there’s always an ethical and a moral element that has to be -- be a part of this. And so, as I said, I don’t take decisions like this lightly. They’re ones that I take seriously. And -- and I respect people who have different opinions on this issue.

But I think that this was the right thing to do and the ethical thing to do. And as I said before, my hope is, is that we can find a mechanism ultimately to cure these diseases in a way that gains a hundred percent consensus. And we certainty haven’t achieved that yet. But I think on balance this was the right step to take.

STAFF: Last question.

PRESIDENT OBAMA: Okay. Stephen Collinson, AFP.

QUESTION: Mr. President, you came to office pledging to work for peace between Israel and the Palestinians.

PRESIDENT OBAMA: Yeah.

QUESTION: How realistic do you think those are hopes are now, given the likelihood of a prime minister who’s not fully signed up to a two- state solution and a foreign minister who’s been accused of insulting Arabs?

PRESIDENT OBAMA: It’s not easier than it was, but I think it’s just as necessary. We don’t yet know what the Israeli government is going to look like. And we don’t yet know what the future shape of Palestinian leadership is going to be comprised of.

What we do know is this; that the status quo is unsustainable. That it is critical for us to advance a two-state solution where Israelis and Palestinians can live side by side in their own states with peace and security. And by assigning George Mitchell the task of working as special envoy, what we’ve signaled is that we’re going to be serious from day one in trying to move the parties in a direction that acknowledges that reality. How effective these negotiations may be, I think we’re going to have to wait and see.

But, you know, we were here for Saint Patrick’s Day, and you’ll recall that we had what had been previously sworn enemies celebrating here in this very room; you know, leaders from the two sides in Northern Ireland that, you know, a couple of decades ago or even a decade ago people would have said could never achieve peace. And here they were, jointly appearing and talking about their commitment, even in the face of violent provocation.

And what that tells me is that if you stick to it, if you are persistent, then -- then these problems can be dealt with.

That whole philosophy of persistence, by the way, is one that I’m going to be emphasizing again and again in the months and years to come, as long as I am in this office. I’m a big believer in persistence. I think that when it comes to domestic affairs, if we keep on working at it, if we acknowledge that we make mistakes sometimes and that we don’t always have the right answer, and we’re inheriting very knotty problems, that we can pass health care, we can find better solutions to our energy challenges, we can teach our children more effectively, we can deal with a very real budget crisis that is not fully dealt with in my -- in my budget at this point, but makes progress.

I think when it comes to the banking system, you know, it was just a few days ago or weeks ago where people were certain that Secretary Geithner couldn’t deliver a plan. Today, the headlines all look like, well, all right, there’s a plan.

And I’m sure there’ll be more criticism and we’ll have to make more adjustments, but we’re moving in the right direction.

When it comes to Iran, you know, we did a video sending a message to the Iranian people and the leadership of the Islamic Republic of Iran. And some people said, ”Well, they did not immediately say they were eliminating nuclear weapons and stop funding terrorism.” Well, we didn’t expect that. We expect that we’re going to make steady progress on this front.

We haven’t immediately eliminated the influence of lobbyists in Washington. We have not immediately eliminated wasteful pork projects. And we’re not immediately going to get Middle East peace. We’ve been in office now a little over 60 days.

What I am confident about is that we’re moving in the right direction, and that the decisions we’re making are based on, how are we going to get this economy moving? How are we going to put Americans back to work? How are we going to make sure that our people are safe? And how are we going to create not just prosperity here but work with other countries for global peace and prosperity?

And we are going to stay with it as long as I'm in this office, and I think that -- you look back four years from now, I think, hopefully, people will judge that body of work and say, "This is a big ocean liner. It's not a speedboat. It doesn't turn around immediately. But we're in a better -- better place because of the decisions that we made."

All right? Thank you, everybody.

The US, Israel, and Charles Freeman: "A Chilling Effect" on Foreign Policy

One of the sharpest, strongest reactions to the withdrawal of the nomination of Charles Freeman (pictured) as head of the US National Intelligence Council has come from Stephen Walt in his blog on the Foreign Policy website. I generally share his views, but a reader offers further useful critique: "All good points, but a bit polemical. You know how this game works: I don't think Walt does Freeman any favours by framing the appointment as a victory over Zionists or as a balance to [the appointment of the State Department's Dennis] Ross. It would have been better to explain why Freeman was a worthy choice in the first place with his other experience and ability."

On Chas Freeman's withdrawal
STEPHEN WALT

First, for all of you out there who may have questioned whether there was a powerful "Israel lobby," or who admitted that it existed but didn't think it had much influence, or who thought that the real problem was some supposedly all-powerful "Saudi lobby," think again.

Second, this incident does not speak well for Barack Obama's principles, or even his political instincts. It is one thing to pander to various special interest groups while you're running for office -- everyone expects that sort of thing -- but it's another thing to let a group of bullies push you around in the first fifty days of your administration. But as Ben Smith noted in Politico, it's entirely consistent with most of Obama's behavior on this issue.

The decision to toss Freeman over the side tells the lobby (and others) that it doesn't have to worry about Barack getting tough with [past and future Israeli Prime Minister Benjamin] Netanyahu, or even that he’s willing to fight hard for his own people. Although AIPAC [American-Israeli Political Action Committee] has issued a pro forma denial that it had anything to do with it, well-placed friends in Washington have told me that it leaned hard on some key senators behind-the-scenes and is now bragging that Obama is a "pushover." Bottom line: Caving on Freeman was a blunder that could come back to haunt any subsequent effort to address the deteriorating situation in the region.

Third, and related to my second point, this incident reinforces my suspicion that the Democratic Party is in fact a party of wimps. I'm not talking about Congress, which has been in thrall to the lobby for decades, but about the new team in the Executive Branch. Don't they understand that you have to start your term in office by making it clear that people will pay a price if they cross you? Barack Obama won an historic election and has a clear mandate for change -- and that includes rethinking our failed Middle East policy -- and yet he wouldn't defend an appointment that didn't even require Senate confirmation. Why? See point No.1 above.

Of course, it's possible that I'm wrong here, and that Obama's team was actually being clever. Freeman's critics had to expend a lot of ammunition to kill a single appointment to what is ultimately not a direct policy-making position, and they undoubtedly ticked off a lot of people by doing so. When the real policy fights begin -- over the actual content of the NIEs [National Intelligence Estimates], over attacking Iran, and over the peace process itself -- they aren't likely to get much sympathy from [Director of National Intelligence Dennis] Blair and it is least conceivable that Obama will turn to them and say, "look, I gave you one early on, but now I'm going to do what's right for America." I don't really believe that will happen, but I'll be delighted if Obama proves me wrong.

Fourth, the worst aspect of the Freeman affair is the likelihood of a chilling effect on discourse in Washington, at precisely the time when we badly need a more open and wide-ranging discussion of our Middle East policy. As I noted earlier, this was one of the main reasons why the lobby went after Freeman so vehemently; in an era where more and more people are questioning Israel's behavior and questioning the merits of unconditional U.S. support, its hardline defenders felt they simply had to reinforce the de facto ban on honest discourse inside the Beltway. After forty-plus years of occupation, two wars in Lebanon, and the latest pummeling of Gaza, (not to mention [Israeli Prime Minister] Ehud Olmert's own comparison of Israel with South Africa), defenders of the "special relationship" can't win on facts and logic anymore. So they have to rely on raw political muscle and the silencing or marginalization of those with whom they disagree. In the short term, Freeman's fate is intended to send the message that if you want to move up in Washington, you had better make damn sure that nobody even suspects you might be an independent thinker on these issues.

This outcome is bad for everyone, including Israel. It means that policy debates in the United States will continue to be narrower than in other countries (including Israel itself), public discourse will be equally biased, and a lot of self-censorship will go on. America's Middle East policy will remain stuck in the same familiar rut, and even a well-intentioned individual like George Mitchell won't be able to bring the full weight of our influence to bear. At a time when Israel badly needs honest advice, nobody in Washington is going to offer it, lest they face the wrath of the same foolish ideologues who targeted Freeman. The likely result is further erosion in America's position in the Middle East, and more troubles for Israel as well.

Yet to those who defended Freeman’s appointment and challenged the lobby's smear campaign, I offer a fifth observation: do not lose heart. The silver lining in this sorry episode is that it was abundantly clear to everyone what was going on and who was behind it. In the past, the lobby was able to derail appointments quietly -- even pre-emptively -- but this fight took place in broad daylight. And Steve Rosen [of AIPAC], one of Freeman's chief tormentors, once admitted: "a lobby is like a night flower. It thrives in the dark and dies in the sun." Slowly, the light is dawning and the lobby's negative influence is becoming more and more apparent, even if relatively few people have the guts to say so out loud.  But history will not be kind to the likes of [Senator] Charles Schumer, Jonathan Chait [of the New Republic], Steve Rosen et al, whose hidebound views are unintentionally undermining both U.S. and Israeli security.

Last but not least, I cannot help but be struck by how little confidence Freeman's critics seem to have in Israel itself. Apparently they believe that a country that recently celebrated its 60th birthday, whose per capita income ranks 29th in the world, that has several hundred nuclear weapons, and a military that is able to inflict more than 1,300 deaths on helpless Palestinians in a couple of weeks without much effort will nonetheless be at risk if someone who has criticized some Israeli policies (while defending its existence) were to chair the National Intelligence Council. The sad truth is that these individuals are deathly afraid of honest discourse here in the United States because deep down, they believe Israel cannot survive if it isn't umbilically attached to the United States. The irony is that people like me have more confidence in Israel than they do: I think Israel can survive and prosper if it has a normal relationship with the United States instead of "special" one. Indeed, I think a more normal relationship would be better for both countries. It appears they aren't so sure, and that is why they went after Charles Freeman.

Ms Clinton's Wild Ride: Is Dennis Ross in the Saddle on Iran?

Related Post: Ms Clinton’s Wild Ride - A US “Grand Strategy” on Israel-Palestine-Iran?

In our analysis today of a possible US "grand strategy" linking its approach on Israel and Palestine to a change in policy on Iran, we speculated, "One explanation for this shift is the long-awaited entry of Dennis Ross, who has long advocated “Diplomacy Then Pressure”, into the State Department." Jim Lobe takes up the theme:

Ross Is Clearly a Major Player

Since Secretary of State Clinton set out for the Middle East over the weekend, it has seemed increasingly clear to me that Dennis Ross, contrary to my earlier speculation, pretty much got the job that he and WINEP [the Washington Institute for Near East Policy] were hoping for. Not only has he claimed an office on the coveted seventh floor, but Obama’s conspicuous placement of Ross’ name between those of Mitchell and Holbrooke in his speech on Iraq at Camp Lejeune last week strongly suggested that he considers Ross to be of the same rank and importance as the other two.

More to the point is what Clinton and those around her have been saying during the trip, including, most remarkably, the report by an unnamed “senior State Department official” that she told the foreign minister of the United Arab Emirates (UAE) that she was “very doubtful” that diplomacy would persuade Iran to abandon its alleged quest for nuclear weapons. This, of course, very much reflects Ross’ own view (as well that of neo-conservatives) and will no doubt bolster hard-liners in Tehran who believe that Obama’s talk of engagement is simply designed to marshal more international support for eventual military action, be it a bombing campaign or a blockade to cut gasoline imports. That Obama essentially confirmed today’s New York Times report about a proposed deal with Moscow whereby it would go along with increasing sanctions against Iran in exchange for Washington’s non-deployment of anti-missile defenses in Poland and the Czech Republic only adds to the impression that some version of the Bipartisan Policy Center’s September ‘08 report on Iran strategy (drafted by hard-line neo-cons Michael Rubin and Michael Makovsky and signed by Ross), which I wrote about here, is in the process of being implemented. (I was going to write about this later this week, but the Moon of Alabama beat me to the punch. See also Stephen Walt’s analysis of Clinton’s scepticism on his Foreign Policy blog).

Adding to my growing sense that Ross occupies a critical role in policy-making, at least in the State Department, are what Clinton has had to say so far on her trip about Gaza, Hamas, and the Palestinian Authority. As Marc Lynch reports in his truly excellent blog, also on the Foreign Policy website, “her remarks suggest that rather than seize on the possibility of Palestinian reconciliation, Clinton prefers to double-down on the shopworn ‘West Bank first, Fatah only’ policy” strongly advocated by Ross. In that respect, you should definitely read Tuesday’s extended colloquy between Lynch, Brookings’ Tamara Wittes (who is more optimistic), and Carnegie’s Nathan Brown, who shares Lynch’s “disappointment” about Clinton’s performance. As Lynch notes, it seems that Clinton is stuck “in a bit of time-warp” regarding Hamas’ power in Gaza, the Palestinian Authority’s abject failure to enhance its legitimacy, and the Arab League’s renewed efforts to both unify itself and to reconstruct a Palestinian government of national unity. This insensitivity to Palestinian and Arab public opinion bears all the hallmarks of Ross’ failed Mideast diplomacy during the 1990’s.

I also have the impression that Ross and the so-called “Israel Lobby” whose interests he represents believe that enhancing conditions on the West Bank, combined with diplomatic engagement with Syria, will somehow be sufficient for Washington to regain its credibility in the region and rally the Sunni Arab states — along with the European Union, Russia, China, etc. — behind a policy of confrontation with Iran.

Text: Hillary Clinton Speech to Gaza Donors Conference

Thank you very much. It is a pleasure to be back in Egypt, and to be with so many people dedicated to building regional and global peace. I want to thank the Egyptian Government, my colleagues in the Quartet, the Norwegian co-chair, and other sponsors for convening this meeting. Let me also convey special gratitude to President Mubarak for his hospitality and for his personal efforts to bridge divides and end conflict.

I’m proud to be here on behalf of the Obama Administration – and to bring this message from our new President: The United States is committed to a comprehensive peace between Israel and its Arab neighbors and we will pursue it on many fronts. So too will we vigorously pursue a two-state solution to the Israeli-Palestinian conflict. As a sign of our seriousness, President Obama and I have appointed Special Envoy George Mitchell to lead this effort.

We commend President Abbas for his commitment to move forward with a negotiated solution, and also Prime Minister Fayyad for his work to build institutions to support a Palestinian state. And we take inspiration from the Arab Peace Initiative proposed by His Majesty King Abdullah of Saudi Arabia and endorsed by the Arab League.

Time is of the essence. We cannot afford more setbacks and delays, or regrets about what might have been had different decisions been made. And now is not the time for recriminations. It is time to look ahead.

We gather today to address the humanitarian and early recovery needs of the Palestinian people after the recent conflict, and the United States joins with others in generously stepping forward to help. Our pledge of over $900 million, designed in coordination with the Palestinian Authority and to be submitted to the United States Congress, will deliver assistance to the people of Gaza and the West Bank.

All of us recognize that human progress depends on the human spirit. That a child growing up in Gaza without shelter, health care, or an education has the same right to go to school, see a doctor, and live with a roof over her head as a child growing up in your country or mine. That a mother and father in the West Bank struggling to fulfill their dreams for their children have the same right as parents anywhere else in the world to a good job, a decent home, and the tools to achieve greater prosperity and peace. That progress toward the goals we seek here today is more likely to grow out of opportunity, than futility; out of hope, than out of misery.

So we will work with our Palestinian partners, President Abbas and Prime Minister Fayyad, to address critical humanitarian, budgetary, security, and infrastructure needs. We have worked with the Palestinian Authority to install safeguards that will ensure that our funding is only used where, and for whom, it is intended, and does not end up in the wrong hands.

In pledging these funds, we are pursuing both a short- and long-term approach. It is not enough just to respond to the immediate needs of the Palestinian people. Our response to today’s crisis in Gaza cannot be separated from our broader efforts to achieve a comprehensive peace. Only by acting now can we turn this crisis into an opportunity that moves us closer to our shared goals.

By providing humanitarian assistance to Gaza, we also aim to foster conditions in which a Palestinian state can be fully realized – a state that is a responsible partner, is at peace with Israel and its Arab neighbors, and is accountable to its people; a state that Palestinians everywhere can be proud of and is respected worldwide.

This is the Palestinian state we all envision. This is the Palestinian state that we have an obligation to help create.

For the Israelis, that means showing the Palestinians that there are benefits to negotiating if their goal is to control their own destiny and live in peace and dignity in an economically viable state.

For the Arab states, it means signaling through words and deeds that the spirit of the Arab Peace Initiative can begin to govern attitudes toward Israel now. For all of us – the Arab states and the wider international community – it means working with the government of the Palestinian people, the Palestinian Authority, to help build a state that can meet international expectations and obligations.

And for the Palestinians, it means that it is time to break the cycle of rejection and resistance, to cut the strings pulled by those who exploit the suffering of innocent people, and show the world what the talent and skills of an exceptional people can build and create.

That is why we’re here today – not only to address Gaza’s urgent needs, but to move ahead toward genuine Israeli-Palestinian and Arab-Israeli peace.

Our aid package is meant to accelerate, not hinder, that effort.

Through his commitment to negotiations with neighbors, President Abbas has shown the hallmarks of leadership, as has Prime Minister Fayyad, who has bolstered the credibility of his government by instituting a national budget process that is transparent and serves the needs of the Palestinian people. They are offering their people the option of a peaceful, independent, and more prosperous future, not the violence and false choices of extremists whose tactics – including rocket attacks that continue to this day – only will lead to more hardship and suffering. These attacks must stop.

The positive approaches I’ve outlined offer an opportunity for even greater progress if our Palestinian partners can continue to work with us and abide by the PLO commitments to renounce violence and recognize Israel’s right to exist. The Quartet, in adopting its own principles, has agreed with the Arab League that the interests of the Palestinian people are best served under a government that abides by the PLO commitments.

Only a Palestinian Authority that adheres to these principles can fulfill the aspirations of the Palestinian people to be free, independent, prosperous and peaceful, flourishing in a viable state of their own.

As President Obama has said, the United States will engage in this effort with vigor and intensity in pursuit of genuine progress – progress that will improve the lives and the livelihoods of the people of Gaza and the West Bank, the people of Israel, and the neighbors throughout the region.

Assistance for the Palestinians is one step up the ladder to a comprehensive Arab-Israeli peace. We must be willing to take this step – and many more together – until we fulfill that promise.

Thank you very much.