Facebook Town Hall with President Obama

The President: Well, thank you very much Facebook for organizing this in the first place. (applause) My name is Barack Obama and I'm the guy who got Mark to wear a jacket and tie. (applause) Thank you. (laughs) I'm very proud of that. (laughter) Mr. Zuckerberg: Second time. The President: I know. (Laughs) I will say... and I hate to tell stories about Mark, but the first time we had dinner together and he wore this jacket and tie, I would say that halfway through dinner he was starting to sweat a little. It's really uncomfortable for him. Then I helped him take off his jacket. (laughs) And actually, if you want, Mark, we can take off our jackets.

Mr. Zuckerberg: That's good. (applause) The President: Woo, that's better, right? Mr. Zuckerberg: Yes, but you are much better at these things than I am. (laughter) The President: First of all, I just want to thank everyone for taking the time, not just the people who are here in the audience, but also people from all over the country and some from all over the world. world who are watching this

town

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. The main reason we wanted to do this in the first place is because more and more people, especially young people, are getting information through different means. And obviously what you all have built together is helping to revolutionize the way people get information, how they process it, and how they connect with each other.

And historically, part of what makes a healthy democracy, what makes good politics, is when you have informed and engaged citizens. And what Facebook allows us to do is make sure that this is not just a one-way conversation; He makes sure that not only do I speak to you, but that you also respond to me and we are in a conversation, we are in a dialogue. That's why I love doing public meetings. I think this format and this company is an ideal medium for us to carry out this conversation. And as Mark mentioned, we're obviously having a very serious debate right now about the future direction of our country.

We are living in as tumultuous a time as I have certainly seen in my lifetime. It is true that my life is much longer than most of you so far. This is a fairly young audience. But internally we are seeing a whole host of c

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enges, starting with the worst recession we have had since the Great Depression. We're just getting out of this. We have all kinds of disruptions, technological disruptions happening, most of which promise to make our lives much better, but they also mean that there are a lot of adjustments that people have to make across the economy.

We still have a very high unemployment rate that is starting to go down, but there are so many people who are challenged, day after day, by worrying about whether they will be able to pay their bills, whether they will be able to keep their homes. Internationally, we are seeing the kinds of changes we haven't seen in a generation. We have certain challenges, such as energy and climate change, that no nation can solve alone, but that we will have to solve together. And we still don't have all the existing institutions to do it. But what makes me incredibly optimistic - and that's why being here on Facebook is so exciting to me - is that at every juncture in our history, whenever we face challenges like this, whether it's the shift from an agricultural era to an industrial one age, or whether it was facing the challenges of the Cold War, or trying to figure out how to make this country fairer and more inclusive, at every juncture we have always been able to adapt.

We have been able to change and we have been able to get ahead of the curve. And that is also true today, and you are at the forefront of what is happening. That's why I'll be interested in talking to all of you about why this debate we're having around debt and our deficits is so important, because it will help determine whether we can invest in our future and in the basic research and innovation and infrastructure that will allow us compete in the 21st century and still preserve a safety net for the most vulnerable among us. But I also want to share ideas with you about how we can make our democracy work better and our politics work better, because I don't think there's any problem that we can't solve if we decide that.

Let's figure it out together. And for that, I appreciate the opportunity to speak with you. And instead of just giving a lot of long speeches, I want to make sure that we have time for as many questions as possible. So, Mark, I understand you got the first one. Mr. Zuckerberg: Yes, let's get started. So let's start the debt conversation. So I understand that yesterday morning you had a public meeting in Virginia where you talked about your framework for not only resolving short-term budget issues, but also long-term debt. And he spent some time talking about tax reform and some cost cuts, but he also spent a lot of time talking about things he didn't think we could cut: education, infrastructure and clean energy.

So my question to start with is: What do you think we should do specifically, and what do you think we can cut specifically to make all of this make sense? The President: Well, first of all, Mark, let me share with you the nature of the problem, because I think a lot of people understand that it's a problem but they're not sure how it arose. In 2000, at the end of the Clinton administration, we not only had a balanced budget but we actually had a surplus. And that was due in part to some difficult decisions that had been made by President Clinton, the Republican Congresses, the Democratic Congresses, and President George H.

W. Bush. And what they had said was let's make sure we spend wisely on the things that matter; let's spend less on things that don't matter; and let's make sure that we live within our means, that we earn enough income to pay some of these basic obligations. What happened then was that we spent 10 years forgetting what had created the surplus in the first place. So we had a huge tax cut that was not offset by spending cuts. We had two wars that were not paid for. And this was the first time in history that we went to war and did not ask additional sacrifices from American citizens.

We had a huge prescription drug plan that wasn't paid for. And so, when I took office we already had an annual deficit of about a trillion dollars and we had a huge debt pile up with interest payments to boot. Then we have this huge recession. And then what happens is that less income comes in, because companies' sales are lower, individuals earn less money, at the same time there is more need. So we have to help states and local governments. And that - a big part of the recovery was us making sure that the economy didn't fall into a depression, making sure that teachers weren't laid off and firefighters weren't laid off, and that there was still construction going on. for roads and so on, all of which were expensive.

I mean, that added about another trillion dollars of debt. So now what we have is a situation where not only do we have this accumulated debt, but the baby boomers are just starting to retire. And what's scary is not only that baby boomers are retiring at a higher rate, which means they are making greater demands on Social Security, but mainly Medicare and Medicaid, but that health care costs are rising a lot faster than inflation and older populations use more healthcare costs. If we add all this, we have an unsustainable situation. So now we face a critical moment where we are going to have to make some decisions about how to reduce debt in the short term and how to reduce it in the long term.

In the short term, Democrats and Republicans now agree that we need to reduce debt by about $4 trillion over the next 10 years. And I know it seems like a lot of money, but it is. But it is feasible if we do it in a balanced way. What I proposed was that around $2 trillion over 10 to 12 years would be a reduction in spending. The government wastes, just like any other important institution, and so there are things we do that we can afford not to do. Now, there are some things I would like to do, they are fun to do, but we can't afford them right now.

That is why we have made cuts in all areas. A good example is Pentagon spending, where Congress often includes in the Pentagon budget weapons systems that the Pentagon itself says we don't need. But special interests and voters helped inflate the Pentagon's budget. So we've already reduced the Pentagon budget by about $400 billion. We believe that we can contribute about $400 billion more. So we have to consider spending on both non-security issues and defense spending. And then what we've said is let's take another trillion of that and raise it through a reform of the tax system that allows people like me (and, frankly, you, Mark) to pay a little more in taxes. (Laughter) Mr.

Zuckerberg: That sounds good to me. The President: I know you agree with that. (laughter) Keep in mind that we're talking about going back to the rates that existed when Bill Clinton was

president

. Now, many of you were... (laughter) - I'm trying to put this delicately - still in diapers at that time. (laughs) But for those of you who remember, the economy was booming and rich people were getting richer. There was no problem at that time. If we go back to just those rates, that alone would go a long way toward reducing our overall spending. And if we can get a trillion dollars in revenue, two trillion dollars in spending cuts, we can still invest in basic research.

We can still invest in something we call ARPA-E, which is like DARPA except it's focused solely on energy, so we can figure out what the next innovative technologies are that can help us reduce our dependence on fossil fuels. We can still invest in education, which is why we have already expanded the Pell Grant program so more young people can go to college. We are investing more in STEM education: mathematics, science and technology. We can still make those investments. We can still rebuild our roads and bridges, invest in high-speed rail, invest in the next generation of broadband and wireless, and make sure everyone has access to the Internet.

We can do all of those things while still reducing the deficit in the medium term. Now, there's one last component to this, and I know it's a long answer, but I wanted to make sure everyone had the basics for it. Even if we get this $4 trillion, we still have a long-term problem with Medicare and Medicaid, because health care costs and inflation are rising much faster than wages and salaries. And this is where there's another big philosophical debate with Republicans, because what I've said is that the best way to turn it around is to take advantage of the health care reform that we had last year and start getting a better return on our health care dollar. .

We waste a lot on healthcare. We spend about 20% more than any other country in the world and have worse outcomes because we end up doing multiple tests when we could only do one and share it among doctors on Facebook, for example. We could focus on the chronically ill; 20% of the patients represent 80% of the costs. So doing something simple like reimbursing hospitals and doctors for reducing their readmission rate and treating someone with a chronic illness like diabetes so they take their medications regularly and don't have to go to the emergency room, that saves huge amounts of money.

That's what health care reform was about last year or a year and a half ago, and what we want to do is build on that and continue to improve the system. What Republicans are saying right now is, first of all, they can't accept any tax increases, which means we would have to cut... of that $4 trillion, it would all come from education, transportation... .areas that I believe are critical to our long-term future. Thus, for example, they proposed 70% cuts in clean energy. Well, I don't know how we will free ourselves from dependence on foreign oil - and anyone who pays gas prices knows that this has an economic component as well as an environmental component - if we do not invest in the basic research and technology that allows energy solar, wind and others prosper and develop.

At the same time, what they have said is that we make Medicare a voucher program, so that retirees, instead of knowing that they will always have health care, receive a voucher that covers part of the cost, and any inflation that arises in medical care will fall on them. And if health insurance companies don't sell you a policy that covers your illnesses, you're out of luck. I think it's very important for us to have a basic social safety net for families with children with disabilities, older people, people who are in nursing homes, and I think it's important that we invest in our researchbasic.

We can do all of those things, but we can only do them by taking a balanced approach. And that's what this great debate is about, that's what it's about right now. Alright? Mr. Zuckerberg: Okay, sorry, I don't mean to cut off the applause. The President: No, no, no, no, no. (applause) Mr. Zuckerberg: That was a very thorough answer. The President: No, they were... they were stunned by the length of that response. (laughs) But it's kind of complicated. Mr. Zuckerberg: So the next question is from someone watching Facebook live. Jay Aptine of Williamsburg, Virginia writes and asks: "The housing crisis is not going away.

Mortgage financing for new low- to moderate-income homebuyers is becoming very difficult. President, what can you do to relax policies that disqualify "How can low-to-moderate homebuyers be assured that they will have the opportunity to own their first home?" The President: Well, that's a good question. And I'll be honest with you, this is probably the biggest hurdle for the economy. Right now, along with the frustration people have over gas prices, what we've really seen is that the real estate market, which was a bubble, had become very inflated in all regions of the country. I probably don't have much sympathy for that here because I can only imagine the rents and mortgages you guys are paying.

It's a real drag in every way. People, first of all, feel poorer even if they do it. They still have a house or have already bought a house, because for many people their mortgage is now what is called underwater. The mortgage is more than the house is worth. And so, if you feel that your most important asset is now worth it. less than your debt, that will limit your spending. People who want to move have a lot of trouble selling, and people who want to buy, as you pointed out, see much more restrictive terms. That's why we have implemented a series of programs to try to see if we can accelerate the process of reaching a new equilibrium.

For example, what we did was we went to the mortgage lender and said, why not renegotiate your mortgage? With the person who has the mortgage, renegotiate the terms of your mortgage so that your principal is a little lower. They can afford the payments, and that way the homes will not be repossessed, there will be fewer homes on the market, and that will increase prices and will be good for everyone. And we've seen some significant progress on that front. The challenge we still have, as your interlocutor rightly points out, is that many people who bought their first home when credit was easy now find that credit is difficult.

And we have to strike a balance. Frankly, there are some people who are probably better off renting. And what we don't want to do is go back to a situation where people make no down payment and have very easy payment terms up front and it turns out that five years from now, because they have an adjustable rate mortgage, They couldn't pay it and lost their house. I think regulators are trying to strike that balance. There are certain communities with high foreclosure rates where what we're trying to do is see if we can help state and local governments take over some of these homes and convert them and offer favorable terms to first-time home buyers.

But frankly, I think we need to understand that the days when it was really easy to buy a house with no down payment are probably over. And what we - what I'm really concerned about is making sure that the housing market in general recovers enough that it's not such a big drag on the economy, because if it doesn't, then people will have more trust, If more is spent, more people will be hired and, in general, the economy will improve. But I recognize that for many people who want to buy a home for the first time, it is still difficult.

It is improving in certain areas, but in others, particularly where there was a big housing bubble, it is not. Mr. Zuckerberg: I ​​think the next question is from a Facebook employee who is in the room today. So Lauren Hale has a question. Lauren, where are you from? Audience Member: Hello, over here. The President: Hello, Lauren. Audience Member: Hello, Mr. President. Thank you very much for joining us today. I'm originally from Detroit, Michigan, and now I'm here working at Facebook. So my question to you is based on some of the things we were talking about. At the beginning of your term you spent a lot of time talking about job creation and the path to economic recovery, and one of the ways to do that would be to substantially increase federal investments in various areas as a way to fill the void left by the consumers. spent.

Since then, we have seen the conversation shift from job creation and economic recovery to spending and deficit cuts. So I'd love to hear what you think about how you'll balance these two going forward, or even how you'll shift the conversation backwards. The President: Well, you're absolutely right that when I first took office, our number one task was to prevent us from falling into another Great Depression. And that's what the Recovery Act was about. That's why we helped states make sure they could minimize some of the layoffs and some of the difficult budget decisions they faced. We make sure we have infrastructure spending across the country.

And, in fact, we made the largest investment in infrastructure since Dwight Eisenhower built the interstate highway system. We made the largest investment in clean energy research in history and it is really paying off. For example, when I took office, we had about 2% of advanced battery manufacturing here in the United States. And as everyone here knows, what's really stopping us from reaching my goal of having a million electric vehicles on the roads is that battery technology is still difficult. It is clumsy; it's heavy; It is expensive. And if we can make significant improvements in battery technology, then I think the opportunities for electric vehicles, alternative vehicles that are much cheaper, our opportunities are limitless.

So those were all the investments we made in the first two years. Now, the economy is growing. It is not growing as fast as we would like, because after a financial crisis, there is usually a greater drag on the economy for a longer period of time. But it is growing. And over the last year and a half we have seen almost 2 million jobs created in the private sector. Because this recession came at a time when we were already deeply in debt and made the debt worse, if we don't have a serious plan to address the debt and deficit, that could end up being a bigger drag on the economy. anything else.

If the markets start to feel that we are not taking the problem seriously, and if you start to see that investors are feeling uncertain about the future, then they could pull back just as the economy is taking off. So you're right that it's complicated. People here are used to the hills of San Francisco, and if you've driven, I don't know if there are any cars with clutches around here anymore. Has anyone ever driven a car with a clutch? (laughter) I mean, you have to tap and... well, that's something we face in terms of economics, right? We have to step on the accelerator, but we also have to make sure we don't accelerate;

We can't let the car slide backwards. So what we're trying to do then is come up with a debt and deficit plan that doesn't reduce spending so drastically that we can't continue to invest in education, that we can't continue to invest in infrastructure, all of which would help the economy grow. . In December, we passed a targeted tax cut for business investment, as well as the payroll tax that has a stimulus effect that helps grow the economy. We can do those things and still grow the economy while having a plan to reduce the deficit, first by 2015 and then over the long term.

So I think we can do both, but that requires the balanced approach I was talking about. If all we do is cut spending and we don't discriminate about it, if we use a machete instead of a scalpel and eliminate things that create jobs, then the deficit could get worse because we could fall into another recession. And obviously the people of Detroit, where you're from, know that our investments can make a difference because we essentially saved the American auto industry. We now have three car companies here in the United States and they are all making profits. GM just announced that it will rehire all the workers it planned to lay off.

And we did it, by the way, at the same time that we were able to raise fuel efficiency standards in automobiles for the first time in 30 years. So it is possible to do it, but it requires a balanced approach. (applause) Mr. Zuckerberg: All right, we have a question from the University of Florida, where in February you launched this initiative on WhiteHouse.gov, the youngest Americans with the goal of having a hundred youth roundtables across the country and a Many of them are happening right now, watching this Facebook live. So César Fernández and Elisa Rectanas are participating in one of those round tables and they wanted to ask you this: "Mr.

President, in your deficit reduction speech last week you talked about the need not only to reduce government spending but also to increase federal spending. In light of our nation's budget challenges, will your administration consider reviewing policies like the DREAM Act, which the Congressional Budget Office estimates will reduce the deficit by $1.4 billion and increase government revenues by $2.3 billion in the next few years? next 10 years? (applause) The President: Let me talk not only about the DREAM Act but also about immigration policy in general. And I want to thank... Sheryl Sandberg participated in a discussion we had yesterday, which brought together business leaders, government officials, and religious leaders, a broad cross-section of Americans, to talk about how to finally fix a fundamentally broken immigration system.

For those of you who are not familiar, the DREAM Act deals with a particular portion of the population, children who were brought here when they were young by their parents; his parents could have come here illegally; The children did nothing. They were just doing what children do, which is following their parents. They have grown up as Americans. They went to school with us or with our children. They consider themselves Americans, but many of them still do not have legal status. And so what we've said is that, especially for these young people who are our neighbors, our friends, our children's friends, if they have good character and go to school or join our military, they want to be part of the American family. . , why wouldn't we want to hug them?

Why wouldn't we want to make sure that... (applause) Why wouldn't we want to make sure that they contribute to our future? So that's the DREAM Act. But that's just a small part of a broader challenge we have. Immigration in this country has always been complicated. The truth of the matter is that we are both a nation of immigrants and a nation of laws. Sometimes the laws have not been fair. At times laws have been restrictive for certain ethnic groups. There have been quotas. At times our immigration policies have been arbitrary and determined by whether the industry at a given time was willing to bring in workers cheaply.

But what is undeniable is that the United States is a nation of immigrants. That's our story and that's what makes us stronger. Because we have ambitious people from all over the world who come here because they have a new idea and they want to create something new or they just want a better future for their children and their family, and that dynamism is part of what drove our progress and kept us young. Now, I think most Americans understand it and most Americans agree with it. At the same time, I think most Americans feel that there should be an orderly process for doing so.

People shouldn't just come here and jump ahead of the line, essentially, and be left without having gone through the proper channels. So what we have said is let's fix the entire system. First, let's make the legal immigration system fairer and more efficient than it is. And that includes, by the way, something that I know is of great concern here in Silicon Valley. If we have smart people who want to come here and start businesses and they have PhDs in math, science and computer science, why don't we want them to say so? (applause) I mean, why would we want to send them somewhere else? (applause) So those are potential job creators.

Those are job generators. I think of someone like Andy Grove from Intel.We want more Andy Groves here in the United States. We don't want them to start companies; We don't want Intel to start in China or France. We want you to start here. So there is a lot we can do to make sure that the highly skilled immigrants who come here study; We have paid for their college degrees, we have given them scholarships, we have given them this training; I am sure that if they want to reinvest and make their future here in the United States, they will be able to do so.

So that's point number one. But point number two is that there are also many unskilled workers who are here now who live in the shadows. They are contributing to our economy in many ways. They are working in the agricultural sector. They are in restaurants and communities across the country caring for children and helping build America. But they are afraid and feel as if they are excluded from their environment. And what I have said is that they violated the law; They came here and they have to take responsibility for it. They should pay a fine. They should learn English.

They should go to the back of the line so they don't automatically get citizenship. But there should be a path for them to be legalized in our society so that they do not fear for themselves or their families, so that families do not become separated. At the same time, let's make sure we have a secure border so that people don't wander through the desert to get here. Let's make the legal immigration system more efficient and effective so that there are no major delays. This is all part of what we call comprehensive immigration reform. And there's no reason why we can't achieve a system that is fair, it's equitable, it's an economic engine for America that helps people who are already here acculturate and ensure that our laws are not violated, but that we remain faithful to our traditions.

But, as I mentioned to Sheryl yesterday, I can't solve this problem on my own. Nancy Pelosi is a big proponent of this. I think the Democratic caucus in the House of Representatives is ready for it; most of them are prepared to advance comprehensive immigration reform. But we're going to have to have bipartisan support to make this happen. And all of you need to make sure that your voices are heard, saying that this is a priority, that this is something important, because if politicians don't hear from you, then it probably won't happen. I can't do it alone.

We will have to change the laws in Congress, but I am confident we can do it. (applause) Mr. Zuckerberg: Very good. The following is from a Facebook employee, Leo Abraham. Leo, where are you from? The President: Hello, Leo. Audience Member: Hello, hello. I'm from... originally from San Jose, California. My question is: Paul Ryan's proposed 2012 budget plan has been praised by many media outlets as bold and brave. Do you see this as a moment that calls for boldness, and do you think the plan he outlined last week demonstrated enough boldness, or is it just a creation of the media?

The President: No, it's a great question. Look, this is what I would say. The Republican budget that was presented, I would say, is quite radical. I wouldn't call him particularly brave. I think Mr. Ryan is sincere. I think he is a patriot. I think he wants to solve a real problem, which is our long-term deficit. But I think what he and the other House Republicans also want to do is change our social compact in a pretty fundamental way. His basic point of view is that no matter how successful I am, no matter how much I have received from this country, I was not born rich;

I was raised by a single mother and my grandparents. I went to university on scholarships. There was a time when my mom was trying to get her doctorate, where for a short time she had to receive food stamps. My grandparents relied on Medicare and Social Security to supplement their income as they aged. So your idea is that, despite the fact that I have benefited from all of these investments (my grandfather benefited from the GI Bill after fighting in World War II), somehow I now have no obligation to the people who are less fortunate than me. and I have no real obligation to future generations to make investments so that they have a better future.

So what his budget proposal does is not just keep the income tax flat, but he actually wants to cut taxes even more for the rich, cut taxes even more for corporations, not pay for them, and to make their numbers work, cut 70% of our clean energy budget, cut 25% of our education budget, cut transportation budgets by a third. I guess you could call that bold. I would call it short-sighted. (applause) And then, as I said, there's a fundamental difference between how Republicans and I think about Medicare and Medicaid and our health care system. Their basic theory is that if we simply turn Medicare into a voucher program and Medicaid into block grant programs, then you, a Medicare beneficiary, will go out and look for the best insurance you have, that you can find, and that you will control costs because you're going to tell the insurance company: this is all I can pay.

That will control costs, except if you get sick and the policy you purchased doesn't cover what you have. So either you are going to mortgage your house or you are going to go to the emergency room, in which case I, who do have insurance, will have to pay indirectly because the hospital will have uncompensated care. . So, they don't really want to make the healthcare system more efficient and cheaper. What they want to do is push the costs of healthcare inflation onto you. And then you'll be on your own trying to figure out in the market how to make healthcare cheaper.

The problem is that you are only one person. Now you work at Facebook, it's a pretty big company; Facebook can probably negotiate with insurance companies and providers to get you a good deal. But if you're a startup, if you're an entrepreneur hiding in the back of your garage, good luck trying to get insurance on your own. You can not do it. If you are a senior and have a pre-existing condition, insurance companies will not accept you. So what we've said is, instead of just shifting costs onto people who individually are not going to have any bargaining power or ability to change how providers operate, or how hospitals or doctors operate, how insurance companies operate, let's make sure we have a system for both Medicare and people who currently don't have health insurance where they can be part of one big group.

They can negotiate changes in the way the health care system works to make it more efficient; to make it more effective; so that they receive better care, so that we have lower infection rates, for example, in hospitals; so there are fewer readmission rates; so that we care more effectively for the chronically ill; so there is less unnecessary testing. This is how you save money. The government will save money, but you will also save money. So we think it's a better way to do it. Now, what they'll say is, well, you know what? That will never work because it is imposed by the government, it is bureaucracy, it is a seizure of power by the government and there are death panels.

I still don't fully understand the concept of the "death panel." But I guess what they're saying is that somehow some remote bureaucrat will decide your healthcare for you. All we're saying is that if we have health care experts—doctors, nurses, and consumers—who are helping to design how Medicare works more intelligently, then we won't have to radically change Medicare. So yes, I think it's fair to say that his vision is radical. No, I don't think I'm particularly brave. Because the last point I will make is this. Nothing is easier than solving a problem at the expense of people who are poor or powerless or who have no lobbyists or influence.

I don't think I'm particularly brave. (applause) Mr. Zuckerberg: All right, the next one is from the web. We have a question from Kwami Simmons from Orlando, Florida. And he asks: "I firmly believe that education is the greatest equalizer. With so many problems plaguing our current system, is it possible to examine a complete overhaul of the system so that it addresses the needs of modern learners?" And before I start, I just want to say that as someone who has spent a lot of time researching education and who cares about this, I think the Race to the Top work that you guys have done is some of the most underrated and important stuff. what his administration has done.

The President: I appreciate it. (Applause) This is an area where I think we've seen the parties come together. And good bipartisan work is being done. It used to be that the argument around education always revolved around the left saying we just need more money, and the right saying we should blow up the system because public schools aren't doing a good job. And what we are seeing now is that people recognize that we need both money and reform. It is not an either/or proposition; It is a proposal of both and. So what Mark just mentioned, something called Race to the Top, is a pretty simple concept.

Most federal dollars are allocated using a formula. If you have a certain number of poor kids or a certain number of disabled kids in your school district, there's a formula and you get a certain amount of money. And each state and each school district receives that money according to the formula. What we did was we took about 1% of total education spending and said, to get this 1%, show us that you are reforming the system. It's almost... it's like a competition model. And so every state and every school district could apply. And you had to show us that you had a good plan to retrain teachers and recruit and do good professional development so that we have the best teachers possible.

You had to have responsibility. You had to show us that you were really making progress in the schools, and that you were measuring through data the improvements that were being made; that they were reaching the schools that were most difficult to reach, because there are around 2,000 schools throughout the country that represent the majority of school dropouts in our country. They're like dropout factories, so show us a plan to go into those schools and really make a big difference. And what happened is that more than 40 states, in the process of competing for this extra money, ended up initiating probably the most significant reforms that we've seen in a generation.

And that's why it's made a big difference. Even those states that didn't end up winning the competition made changes that are improving the potential for good results in schools. So that's the kind of creative approach we've seen some Democrats and Republicans take. And our hope is that we can take advantage of that. A couple of things we know work: The most important thing for a good education is to make sure you have a good teacher at the front of the classroom. So providing more support to teachers, recruiting the best and brightest into teaching, making sure they're compensated, but also making sure they perform, that's hugely important.

The other thing is good data so that there is constant feedback, not just a bunch of standardized tests that get put in a drawer or that people can play so they don't get penalized. That's what happened in No Child Left Behind. But instead, there's really good data that you can present to the teacher while she's still teaching that kid and say, you know what? This child is falling behind in math; Here are some ways to do it to improve its performance. So we're starting to see real progress on the ground, and I'm optimistic that before the 2012 elections, we'll be able to have a federal education law that will incorporate some of the best information we have about how to initiate good school reform.

Now, the last point I will make on this: government alone cannot do it. One of the things that inspires me but also frustrates me every time I come to Silicon Valley is how many smart people there are here, but it also frustrates me that I always hear stories about how we can't find enough engineers. We can't find enough computer programmers. You know what, that means our education system isn't working as it should, and that has to start early. And that's why we're emphasizing math and science. That's why we emphasize teaching girls math and science. (applause) That's why we're emphasizing making sure that black and Hispanic children learn math and science. (applause) We have to do a better job when it comes to STEM education.

And that's one of the reasons, by the way, that we're having our first science fair at the White House in a long time, just because we want to start making science interesting. I want everyone to feel the same way they do... (applause) I want people to feel the same way about the next big energy breakthrough or the next big energy breakthrough.Internet, I want people to feel the same way they felt about the Moon. launch: this is how we are going to remain competitive in the future. And that's why these investments in education are so important.

But, as I said, government alone cannot do it. There has to be a change in American culture, where once again we step up and say that these things are important and it's... that's why, Mark, the work that you're doing in Newark, for example, the work that people likes What the Gates Foundation is doing in philanthropic investments, best practices, and education (especially math and science training) is going to be very important. We have to improve... we have to up our game when it comes to technology, math and science. I hope that is one of the most important legacies that I can have as President of the United States. (applause) Mr.

Zuckerberg: Very good. The following is from another Facebook employee. Here's James Mitchell. So, James Mitchell, where are you from? The President: Here is James. Audience Member: Hello, Mr. President. The President: Hello, James. Audience Member: I'm James Mitchell, I was born in Chicago and grew up here in Cupertino, California. I have one more question for you about debt and healthcare. The President: Go ahead. Audience Member: So the biggest threat we have fiscally is rising health care costs. Unfortunately, many of the solutions we hear for Medicare and Medicaid don't actually involve slowing rising health care costs. Rather, they involve shifting costs to beneficiaries and states.

So my question is: Can you tell us a little more about what provisions of the Affordable Care Act are designed to curb the rise in health care costs and what policies you would like to see enacted in the future to continue to curb the rise? ? Rising healthcare costs? The President: Let me give you a couple of examples, because you are absolutely right in describing it. I don't want to just shift health care costs onto the American people, I really want to lower health care costs. Let's take the example of healthcare IT. We are in Silicon Valley, so we can talk about IT topics.

I'll try to sound like I know what I'm talking about. (laughs) The healthcare system is one of the few aspects of our society where many things are still done on paper. The last time your kids went to a doctor's office or maybe their dentist's office, how many people still had to fill out a form on a clipboard? Good? And the reason is that a large part of our supplier system is not automated. So what ends up happening is you can go to your primary care doctor; He does some basic tests, sees something worrying, and refers you to a specialist.

You go to the specialist; he will do another test. You, or your insurance company, will be billed for both tests, rather than emailing the specialist the test your primary care doctor performed. Or better yet, if it turns out that there may be three or four specialists involved, because it is a difficult diagnosis, this is all hypothetical; you look very healthy. (laughs) But let's say there was a group of specialists. Ideally, you should bring all specialists together with your primary care doctor the first time they see you so you don't pay for multiple visits and multiple tests.

That's not how it works now. Now, part of it is technology. So what we did in the Affordable Care Act, building on what we did with the Recovery Act, is try to provide incentives for providers to start having integrated, automated systems. And it's difficult because the individual doctor may say to himself, I don't want to make the initial capital outlay; that is expensive although it may make my system more efficient later. So, providing some incentives, some help for the initial investments of a community hospital or for individual providers so that we can slowly make this system more effective, that is the number one priority.

By the way, we know it can be done. Surprisingly, the health care system that does the best job of this is actually the Veterans Administration, the VA health care system, because it is a completely integrated system. They all work for the VA, all the doctors, all the hospitals, all the providers, so they've been able to achieve huge cost savings simply because they're all in one system. But it also depends on how we reimburse doctors and hospitals. So right now, what happens is, when you've done those two tests, if you're old enough to qualify for Medicare, well, each doctor sends their bill to Medicare and Medicare pays both bills.

And let's say you end up having surgery. They will send the bill for that and Medicare pays for it. Let's say they didn't do a very good job, or you got sick in the hospital, they readmitted you and they have to treat you again and they have to operate again. Medicare is then billed for the second operation. I mean, imagine if this was how it worked when you bought a car. So you go and buy your car. A week later, the car doesn't work. You go back to the dealership and they charge you to fix the bad job they did in the first place.

Well, that's what Medicare does all the time. Therefore, we do not offer performance incentives. We simply provide, we only pay for the number of qualified items that were procedures performed or tests performed by the provider. So what we want to do is start changing the way people are reimbursed. Let's take a hospital. We want to give... this is kind of like Race to the Top, which Mark was talking about in education. We want to be able to tell a hospital, if it does a good job reducing hospital infection rates, which kill tens of thousands of people across the United States every year and are a big cause of readmission rates, and we know that hospitals we can dramatically reduce those reinfection rates simply by using simple protocols for how employees wash their hands and how they move from room to room, etc., there are hospitals that have done this;

If we can say to a hospital, You'll get a bonus for that, Medicare will reimburse you for implementing these simple procedures, which save the entire system money. And that's what we've tried to do in the Affordable Care Act: start institutionalizing these new systems. But it takes time because we have a private sector system (it's not like the VA), a group of individual doctors, individual hospitals spread across the country with private insurers. So it's not something we can do overnight. Our hope is that over the next five years we can see significant savings through these mechanisms, and that will save everyone, not just people who have Medicare and Medicaid, it will save everyone money, including people here. on Facebook.

Because I'm sure you guys offer health insurance and I suspect that if you look at your health insurance bills, it doesn't make you happy. Well? Mr. Zuckerberg: So we only have time for one more question. The President: Okay. Mr. Zuckerberg: It's a question from Terry Atwater of Houston, Texas: "If you had to do one thing differently during your first four years, what would it be?" The President: Well, it's only been two and a half years, so I'm sure I'll make more mistakes in the next year and a half. The jury will still be out. (laughs) There are all kinds of day-to-day issues where I say to myself, oh, you know, I didn't say it right, or I didn't explain it clearly enough, or maybe if I had sequenced this.

If I had planned first instead of that, maybe it would have been done faster. Health care was obviously a huge battle, and if it hadn't been for Nancy Pelosi and her leadership in the House and the great work that (applause) Anna Eshoo and Mike Honda and others did, we wouldn't have made it if it hadn't been for the great work in Congress. But I do think it was so complicated that at a certain point people started saying, oh, these are typical Washington disputes. And I've sometimes wondered: Is there a way we could have done it more quickly and in a way that the American people wouldn't have been so frustrated?

I'm not sure it was done because there's a reason it hasn't been done in a hundred years. It's hard to fix a system as big as healthcare and as complicated as our healthcare system. I can tell you that I think the best way to answer the question is what do I feel like I still have to do, where I still feel a huge sense of urgency. I've talked about a couple of things. I believe it is necessary to control our deficits and our debt in a balanced way while I am

president

. I don't want to leave it to the next president.

Immigration, something I mentioned, we haven't done. It's something that matters to me deeply. It is the right thing for the country. I want to achieve it while I am president. Energy: We haven't talked much about energy today, but first of all, $4 a gallon gas is really hurting a lot of people in this country. It's not because they're wasteful, but if you drive 50 miles to work and that's the only job you can find, and you can't afford a hybrid, then you're stuck with the old beater you're driving. that gets eight miles per gallon, these gas prices are killing it right now.

And this is why I have said that it is so important for us to invest in new approaches to energy. We have to have a long-term plan. It means investing in things like solar and wind energy, investing in biofuels, investing in clean car technology. It means converting 100% of the federal fleet to fuel-efficient vehicles, because we are a great market creator. Obviously it turns out that I have a lot of cars as president. (Laughter) And if we go out and buy electric and hybrid cars, that can help boost demand and lower prices. Continue to increase fuel efficiency standards in automobiles; increasing oil production but intelligently.

I mean, all of those are enormously important. And by the way, we can pay for it. Let me say this. We lose: The Treasury loses $4 billion a year in subsidies to oil companies. Now, think about this. The top five oil companies have earned between $75 billion and $125 billion each year for the past five years. No one is doing better than Exxon. No one is doing better than Shell or these other companies. They are doing great. They are making money hand over fist. Well, maybe Facebook is doing a little better. (laughs) But you get the idea. They are doing very well.

They don't need special tax breaks that cost us $4 billion. So what we've said is: why can't we eliminate tax breaks for oil companies that are doing very well and invest them in new energy sources that can help us save the planet? (Applause) So when it comes to energy, when it comes to immigration, when it comes to controlling our deficit in a balanced and intelligent way, when it comes to improving our math and science education, when it comes to reinvesting in our infrastructure , we simply have a lot more work to do. And I guess my final comment, Mark, would be to just hope that everyone here isn't frustrated and cynical about our democracy.

I mean, it's frustrating. God knows it's frustrating. (laughter) And I know that some of you who may have been involved in the campaign or been energized in 2008 are frustrated because, God, it wasn't done fast enough and it seems like everyone is arguing all the time. time. Just remember that we've been through tougher times before. We have always come out ahead, we have always come out victorious, because we still have the best universities in the world, we still have the most productive workers in the world, this is still the most dynamic, entrepreneurial culture in the world. If we unite, we can solve all these problems.

But I can't do it alone. The only way this will happen is if you all still get involved and committed. It hasn't been that long since Election Day and we've been through very, very difficult times and still accomplished a lot. We have still been able to recover this economy. We have still been able to get healthcare approved. We have still been able to invest in clean energy. We've still been able to make sure we override "don't ask, don't tell." We still made sure to have two women on the Supreme Court. (applause) We have made progress. (Applause) So instead of getting discouraged, I hope that everyone will be willing to redouble their efforts and work even harder.

Regardless of your political affiliation, you have to participate, especially the young people here, your generation. If you don't give us a nudge, if you don't give the system a nudge, it's just not going to change. And you are going to be the ones who end up suffering the consequences. But if you are behind this, if you put the same energy and imagination into the political processwhat you put on Facebook, I guarantee there is nothing we can't solve. Alright? Thanks, Marcos. (applause)