Obama on CNN's "Situation Room"
PLEASE CREDIT CNN'S "THE SITUATION ROOM"
THIS IS A RUSH FDCH TRANSCRIPT. IT MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN HOST: Senator Obama, thanks very much for joining us.
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: Thanks for having me, Wolf.
BLITZER: Pretty exciting to come back to Iowa because a lot of people think this is where it all started for you.
OBAMA: Well, especially when it's 70 degrees outside in late October.
I'm really happy to come back to Iowa.
BLITZER: It's warmer here than it is back in New York and Washington.
OBAMA: But, it felt really good. To see all these familiar faces. There were bunch of people out here who signed up for our campaign when we had almost no money, very few endorsements, the polls weren't good for us.
And a lot of these people took a chance. They came up and volunteered, put their names on my campaign …
BLITZER: Iowa showed that a black man can really get a lot of white people's support.
OBAMA: I think that's part of what it showed but what it also showed, I think you'll remember because you were watching. A lot of people were skeptical about young people coming out, about people who traditionally haven't participated in caucuses getting involved. And here's where we, I think, proved that we can get people much more engaged in the political process than they had been before.
BLITZER: Let's go through a whole bunch of substantive economic issues, foreign policy issues. I'm going to give you quick questions, if you give me quick answers I think we'll get through a lot. We have limited time, as you know.
You want universal health care or something approaching universal health care. That is a top priority. Where is the money going to come from?
OBAMA: Well, we're going to have to cut back on some things that don't make sense right now. We're spending $15 billion a year, for example, under the Medicare program to subsidize insurance companies. We're going to have to cut some programs that don't work in order to provide health care and as I said before, we're going to roll back the Bush tax cuts on the wealthiest Americans, people making over $250,000 a year, especially millionaires and billionaires who have been making much more than that.
BLITZER: So in effect that will pay for the health care?
OBAMA: That will pay for the health care.
BLITZER: What about the war in Iraq? You're going to want to stop that war as well, right?
OBAMA: The war in Iraq, we can achieve some significant savings. It's not going to come immediately. I've said I want a responsible drawdown.
We're still going to have to refit our military. We're still going to have to deal with rising veterans' costs. Post traumatic stress disorder, for example, I think it has been under-diagnosed. We've got to make sure treatment …
BLITZER: But the $12 billion the United States is spending a month right now on Iraq, that's going to go on at least for what, a year, a year and a half?
OBAMA: My hope is that we draw down that money over time, it's drastically reduced. But the point is that we're not going to be able to take that $12 billion and suddenly automatically apply it all to domestic stuff. We've got to take care of our troops. And we're still going to have expenditures in Afghanistan because we need to hunt down bin Laden and al Qaeda and put them finally out of business.
BLITZER: Senator McCain says if he's president, he will veto every piece of legislation that has pork barrel spending or earmarks. Will you make that same commitment?
OBAMA: You know, here is what I tell you. We're going to have to fundamentally change how our appropriations process works. And I want to sit down with members of Congress, should I be elected, even before I am sworn in and explain to them that some of these projects may be worthy projects in their home state, home district, but right now we can only do those things that are absolutely necessarily.
And if we're going to have a project, I think it has to be not just a whim of a particular local community, it's got to be something that serves to help build the overall economy and move us in a better direction.
BLITZER: At a time of economic crisis, as it is right now, the worst since the Great Depression, people want to know who you'll be surrounded with on these important decisions. Who do you think will be your secretary of the Treasury?
OBAMA: Well, I am not going to make that kind of news …
BLITZER: Give me an example of the folks that you're thinking about.
OBAMA: I haven't won yet. But I'll tell you who already is part of my senior economic advisory group because you've seen them. Paul Volcker.
Former Federal Reserve Board chairman. Larry Summers, former treasury of the – secretary of the Treasury. Warren Buffett, who has been a great friend and great adviser and talked to me a lot during this recent economic crisis.
Those are the kinds of people that I expect will surround me, will help me make decisions, but it's getting ahead of ourselves for me to identify particular Cabinet folks.
BLITZER: Will you raise the capital gains tax? The tax where people sell stocks or mutual funds or 401(k)s. Will you raise it from 15 percent, that capital gains tax?
OBAMA: I have said early in this campaign that it makes sense for us to go from 15 to 20 percent. Now frankly, people aren't experiencing a lot of capital gains right now. People are having a lot of capital losses.
But I have talked to people like Warren Buffett and asked him, will that modest increase in the capital gains tax have an impact on the real economy, on investment, on business growth and he assures me that is not going to be an impediment to capital formation and us being able to move forward on the economy.
BLITZER: Will a middle class family be exempted from that capital gains tax?
OBAMA: Well, what I've said is small businesses are going to be exempt.
And everyone who makes less than 250,000 a year I've said they're not going to get their capital tax increased, they're not going to be …
BLITZER: So they will be exempt?
OBAMA: They will be exempt from that as well as any income tax increase, any payroll tax increase. My attitude is that middle class families need a tax cut and 95 percent of American families and workers are going to get reduced taxes. In fact we – there was an article today in "The New York Times" that laid out in very stark terms the fact that I give much more tax relief to middle class families than John McCain does.
BLITZER: And in times of economic stress, is it wise to increase the corporate – the corporate tax rate?
OBAMA: Well, we're not increasing the corporate tax rate.
BLITZER: But there is some talk that you want to increase it to 35 percent right now.
OBAMA: Where is that talk coming from?
BLITZER: I don't know. You tell me. You want to keep it at 35 percent?
OBAMA: I have no plans for increasing the corporate tax rate and in fact you can make an argument for lowering the corporate tax rate but only if at the same time you close all the corporate loopholes. The problem we have right now is on paper we have a high corporate tax rate. In actual terms corporations are not paying their fair share. We've got some of the lowest …
BLITZER: ExxonMobil will still pay 35 percent, is that right?
OBAMA: ExxonMobil will stay pay 35 percent although I've talked about previously that we should have a windfall profits tax similar to the one that Sarah Palin imposed on oil companies to benefit Alaska.
BLITZER: If you're elected president, still a big if right now, when would you shut down Gitmo, the Guantanamo naval base where the detention center for suspected terrorists is?
OBAMA: I want to close Gitmo as quickly as we can do …
BLITZER: What does that mean?
OBAMA: As quickly as we can do prudently. And I am not going to give a time certain because I think what we have to do is evaluate all those who are still being held in Gitmo, we have to put in place appropriate plans to make sure they are tried, convicted and punished to the full extent of the law and that's going to require, I think, a review of the existing cases which I have not had the opportunity to do.
BLITZER: Senator McCain says if he is elected president, Iran will not become a nuclear power. Can you make that same commitment?
OBAMA: Well, I have I said I will do everything in my power to prevent Iran from obtaining nuclear weapons.
I think it would be a game changer. It would not acceptable. It would be a threat to our strongest ally in the region, Israel. But it would also potentially trigger a nuclear arms race in the region and we have to both apply much tougher diplomacy but – and sanctions, potentially, if they do not move in a better direction.
We have to give them some inducements to walk away from their nuclear program. And we should never take a military option off the table.
BLITZER: If you're elected president, would you support direct talks with the Taliban in Afghanistan?
OBAMA: I know that General Petraeus has discussed the possibility of trying to peel away more moderate factions within the Taliban and I think talking to our commanders on the ground and based on sound intelligence, if we can peel off some support from the hard core militants that are aligned with al Qaeda, that would be beneficial. I don't think that we necessarily are the best intermediary in that kind of discussion and I'd want to see some proof, some evidence that in fact there are aspects of the Taliban that are susceptible to reasonable dialogue.
BLITZER: But you know that this is the group that gave aid and comfort to al Qaeda.
OBAMA: Well, and that's exactly my point. If – my general attitude is that we have to snuff out al Qaeda, we have to capture and kill bin Laden, and in order for us to do that we're going to have to have cooperation from Afghans and Pakistans. But it may get murky in terms of who are our potential allies and who are enemies in that situation.
I want to work with our commanders to do whatever practically we can do in order to make sure that the overall goal of eliminating al Qaeda as a threat is accomplished.
BLITZER: The model that General Petraeus used in Iraq to wean away …
OBAMA: The Sunni – right …
BLITZER: … Iraqi Sunni insurgents from al Qaeda. It seems to have worked in the al Anbar Province and elsewhere.
BLITZER: Is that model applicable in weaning away Taliban elements from al Qaeda and Afghanistan?
OBAMA: I think it is important to understand that these countries are all different. That is one of the mistakes we made going into Iraq. We have to I think analyze very specifically what the situation is there before we make any moves and I will expect if I am the president elect to have some very rapid discussions with General Petraeus who I think has done a very good job in Iraq. I want to get his assessment and I would want to see some evidence that in fact the possibility of that model working existed in Afghanistan.
BLITZER: As you know, he was charged today, even as we're speaking …
OBAMA: That's right.
BLITZER: … of the U.S. military Central Command that oversees that entire region.
You have confidence in him and you want him to stay.
OBAMA: I do have confidence in him. I think he did an outstanding job in Iraq as our military generally has done outstanding work. What they need is a commander-in-chief who is thinking more strategically about how we deploy our resources to make America more secure and I look forward to working alongside our commanders and our troops on the ground in order to make sure that we are going after al Qaeda, we are getting bin Laden, that we stabilize Iraq, that we create a situation in Afghanistan where this ongoing threat is not constantly coming back at us.
BLITZER: Senator McCain says he knows how to capture bin Laden and he says I'll get him if he is elected president.
Do you know how to capture bin Laden?
OBAMA: I am reminded – he said this during the debate and I think the next – that night maybe I think Jon Stewart on Comedy Central – you know, why have you been holding out for the last six years?
I mean, the fact is is that along with George Bush, John McCain championed a strategy that distracted us from capturing for bin Laden, that focused on Iraq, that had nothing to do with 9/11. And so clearly Senator McCain doesn't know how to capture bin Laden because he was supportive of a huge strategic blunder when it came to accomplishing the task.
I will focus on what Secretary Gates and others have indicated is our number one security threat and that is bin Laden and al Qaeda. We will go after him. We will kill him or we will capture him, try him, tie the death penalty to him where – as necessary.
But that is the threat that we should have stayed focused on, that is the threat that I will focus on when I am president.
BLITZER: How worried are you about the stability of the Pakistani government, because it looks like al Qaeda is going after the new leadership post Musharraf in Islamabad.
OBAMA: Well, I am concerned about it. This was one of the problems with our previous strategy where there was a lot of resentment that built up as a consequence of our support of President Musharraf there who had squelched democracy.
Now you've got a fledgling democratic government. We have to support their efforts to democratize. That means, by the way, not just providing military aid, it means helping them to provide concrete solutions to the poverty and lack of education that exists in Pakistan.
So I want to increase non-military aid to Pakistan.
But we also have to help make the case that the biggest threat to Pakistan right now is not India which has been their historical enemy, it is actually militants within their own borders. And if we can get them to refocus on that, then that is going to be critical to our success not just in stabilizing Pakistan but also in finishing the job in Afghanistan.
BLITZER: Let's talk about – if you're elected president, you have to make major decisions and you have to make them right away. Priorities are going to be critical. I am going to give you five issues.
You tell me which one of these five will be your top priority after you are inaugurated on January 20, if you are inaugurated. Health care reform, energy independence, a new tax code including tax cuts for the middle class, education spending or comprehensive immigration reform.
OBAMA: Top priorities may not be any of those five. It may be continuing to stabilize the financial system. We don't know yet what's going to happen in January.
And none of this can be accomplished if we continue to see a potential meltdown in the banking system or the financial system. So that's priority number one, making sure that the plumbing works in our capitalist system.
Priority number two of the list have put forward I think has to be energy independence. We have to seize this moment because it is not just an energy independence issue, it is also a national security issue and it is a jobs issue. And we can create 5 million new green energy jobs with a serious program.
Priority number three would be health care reform. I think the time is right to do it. Priority number four is making sure that we have tax cuts for the middle class and part of a broader tax reform effort.
Priority number five I think would be making sure that we have an education system that works for our children.
One thing I want to make a point of though, that the tax cut that I talked about may be part of my priority number one because I think that's going to be part of stabilizing the economy as a whole. I think we are going to need a second stimulus. One of my commitments is to make sure that that stimulus includes a tax cut for 95 percent of working Americans.
That may be the first bill that I introduce.
BLITZER: We are almost out of time, senator. We asked viewers in the United States and around the world to send some question to you. We got one from Martha Amadono (ph) of Union City, New Jersey. She says she is an undecided voter who votes mostly Republican, sometimes Democrat. She says she originally supported Hillary Clinton.
I'll read to you what her question is. "As a Cuban American your plan to redistribute the wealth scares me. It didn't work with Castro in my country of Cuba. What makes you think it will work in this country?"
OBAMA: If she is taking the description that John McCain is giving of my plans then I would be scared too. Understand, to Maria (ph), I will repeat what I've said. If you make less than $250,000 a year, you will see no tax increase, you will probably see a tax cut in my plan.
If you make more than $250,000 a year, all we're talking about is going back to the tax rates that existed under Bill Clinton. If she was a strong support of Hillary Clinton's then she should understand that all I am talking about is going back to the tax rates that existed under Bill Clinton in the 1990s where the economy grew.
By the way, that's the same position that Hillary Clinton too.
BLITZER: We have one more question from a viewer, Derek Noiner (ph) of St. Louis. "He says this, I know you pledged to have a bipartisan administration, but I was wondering, does that include John McCain?
After this very vicious campaign, can you consider him a friend and ally in the Senate or would you even consider him in a position in your administration?"
OBAMA: Well, I'll tell you what. I would certainly consider any position for John McCain where I thought he was going to be the best person for our country. He and I have had a tough fight but I think I certainly have respect for him. I've said that before. He is a leader in his party, the leader of his party right now. I think that he has a history of wanting to work together on some things that I care about like comprehensive immigration reform and making sure that we are dealing with critical issues like global warming so I hope that we can forge a strong relationship to get some things done, get some things moving.
BLITZER: We're out of time.
But all of us were moved last weekend when you went to see your grandmother in Hawaii. I know she watches CNN …
OBAMA: She does.
BLITZER: … because she says she watches CNN. And she might be watching right now and I know how proud she must be that you've reached this level and on the verge potentially of becoming president of the United States. How emotional is this for you and for her at this moment.
OBAMA: Well, you know, look, she is my grandma and she helped raise me and she put off a lot of things in her life to make sure that myself and my sister, that we were taken care of so a big chunk of whatever success I have achieved is because of her. I love her dearly and she knows that and if she is listening I just want to make sure that she is getting her rest and hopefully getting better.
BLITZER: We wish her only the best and a speedy, speedy recovery.
OBAMA: Thank you so much, Wolf.
BLITZER: For your grandma.
OBAMA: Thank you.
BLITZER: Senator, thanks very much.
OBAMA: Thank you. Appreciate it. Thank you.
BLITZER: Thank you.