Following is a transcript of President Obama’s first press prime-press conference, as provided by Federal News Service.

PRESIDENT OBAMA: Good evening, everybody. Please beseated.

Before I take your questions tonight, I'd like to speak briefly about thestate of our economy and why I believe we need to put this recovery planin motion as soon aspossible.

I took a trip to Elkhart, Indiana, today. Elkhart is a place thathas lost jobs faster than anywhere else in America.

In one year, the unemployment rate went from 4.7 percent to 15.3percent. Companies that have sustained this community for years areshedding jobs at an alarming speed, and the people who've lost them haveno idea what to do or who to turn to. They can't pay their bill andthey've stopped spending money. And because they've stoppedspending money, more businesses have been forced to lay off moreworkers. In fact, local TV stations have started running publicservice announcements that tell people where to find food banks, even asthe food banks don't have enough to meet thedemand.

As we speak, similar scenes are playing out in cities and towns acrossAmerica. Last Monday, more than a thousand men and women stood inline for 35 firefighter jobs in Miami. Last month, our economy lost598,000 jobs, which is nearly the equivalent of losing every single jobin the state of Maine. And if there's anyone out there who stilldoesn't believe this constitutes a full-blown crisis, I suggest speakingto one of the millions of Americans whose lives have been turned upsidedown because they don't know where their next paycheck is comingfrom.

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And that is why the single most important part of this Economic Recoveryand Reinvestment Plan is the fact that it will save or create up to 4million jobs, because that's what America needs most right now.

It is absolutely true that we can't depend on government alone to create jobs or economic growth. That is and must be the roleof the private sector. But at this particular moment, with theprivate sector so weakened by this recession, the federal government isthe only entity left with the resources to jolt our economy backinto life. It is only government that can break the vicious cyclewhere lost jobs lead to people spending less money, which leads to evenmore layoffs. And breaking that cycle is exactly what the planthat's moving through Congress is designed todo.

When passed, this plan will ensure thatAmericans who'velost their jobs through no fault of their own can receivegreater unemployment benefits and continue their health carecoverage. We will also provide a $2,500 tax credit to folks who are strugglingto pay the cost of their college tuition, and $1,000 worth ofbadly needed tax relief to working and middle-class families. Thesesteps will put more money in the pockets of those Americans who aremost likely to spend it, and that will help break the cycle and getour economymoving.

But as we've learned very clearly andconclusively over the last eight years, tax cuts alone can't solve all of our economicproblems -- especially tax cuts that are targeted to the wealthiestfew Americans.

We have tried that strategy, time and time again. And it'sonly helped lead us to the crisis we face rightnow.

And that's why we have come together,around a plan that combines hundreds of billions in tax cuts for the middle class withdirect investment in areas like health care, energy, educationand infrastructure, investments that will save jobs, create new jobsand new businesses and help our economy grow again, now and in thefuture.

More than 90 percent of the jobs createdby this plan will be in the private sector. They're not going to be make-work jobsbut jobs doing the work that America desperately needs done, jobsrebuilding our crumbling roads and bridges, repairing our dangerouslydeficient dams and levees, so that we don't face anotherKatrina.

They'll be jobs building the wind turbinesand solar panels and fuel-efficient cars that will lower our dependence on foreign oiland modernizing our costly health care system that will save usbillions of dollars and countlesslives.

They'll be jobs creating the 21st-centuryclassrooms, libraries and labs for millions of children across America. And they'llbe the jobs of firefighters and teachers and police officers that would otherwise be eliminated, if we do not provide states with somerelief.

Now after many weeks of debate and discussion, the planthat ultimately emerges from Congress must be big enough and bold enoughto meet the size of the economic challenges that we face rightnow. It's a plan that is already supported by businesses representingalmost every industry in America, by both the Chamber of Commerce andthe AFL-CIO. It contains input, ideas and compromises from bothDemocrats and Republicans. It also contains an unprecedented levelof transparency and accountability, so that every American will beable to go online and see where and how we're spending everydime.

What it does not contain, however, is asingle pet project, not a single earmark, and it has been stripped of the projects membersof both parties found mostobjectionable.

Now despite all of this, the plan's notperfect. No plan is. I can't tell you for sure that everything in this plan will workexactly as we hope, but I can tell you with complete confidence that afailure to act will only deepen this crisis, as well as the pain feltby millions ofAmericans.

My administration inherited a deficit ofover $1 trillion,but because we also inherited the most profound economic emergencysince the Great Depression, doing little or nothing at all will resultin ever -- even greater deficits, even greater job loss, even greater loss of income and even greater loss of confidence.

Those are deficits that could turn a crisis into a catastrophe, and I refuse to let that happen. As long as I hold this office, Iwill do whatever it takes to put this economy back on track and putthis country back towork.

I want to thank the members of Congresswho've worked so hard to move this plan forward. But I also want to urge all membersof Congress to act without delay in the coming week to resolvetheir differences and pass thisplan.

We find ourselves in a rare moment wherethe citizens of our country and all countries are watching and waiting for us tolead. It's a responsibility that this generation did not ask for, butone that we must accept for the future of our children andour grandchildren.

The strongest democracies flourish fromfrequent and lively debate, but they endure when people of every background andbelief find a way to set aside smaller differences in service of agreater purpose. That's the test facing the United States of Americain this winter of our hardship, and it is our duty as leaders and citizensto stay -- stay true to that purpose in the weeks and monthsahead.

After a day of speaking with and listeningto the fundamentally decent men and women who call this nation home, I have full faithand confidence that we can do it.


And with that, I'll take some of your questions. And let mego to Jennifer Loven at AP. There youare.

QUESTION: Thank you, Mr.President. Earlier today in Indianayou said something striking. You said that this nation could endup in a crisis, without action, that we would be unable to reverse. Can you talk about what you know or what you're hearing that would lead youto say that our recession might be permanent when others in ourhistory have not? And do you think that you risk losing somecredibility or even talking down the economy by using dire language likethat?

MR. OBAMA: No, no, no,no. I think that what I've said is what other economists have said across the political spectrum,which is that if you delay acting on an economy of this severity, thenyou potentially create a negative spiral that becomes much moredifficult for us to get outof.

We saw this happen in Japan in the 1990s,where they did notact boldly and swiftly enough, and as a consequence they suffered whatwas called the "lost decade," where essentially for theentire '90s, they did not see any significant economicgrowth.

So what I'm trying to underscore is whatthe people in Elkhart already understand, that this is not your ordinary,run-of-the-mill recession.

We are going through the worst economic crisis since theGreat Depression.

We've lost now 3.6 million jobs. Butwhat's perhaps even more disturbing is that almost half of that job loss has taken placeover the last three months, which means that the problems areaccelerating instead of getting better.

Now, what I said in Elkhart today is whatI'll repeat this evening, which is I'm absolutely confident that we can solvethis problem, but it's going to require us to take somesignificant, importantsteps.

Step number one, we have to pass aneconomic recovery and reinvestment plan. And we've made progress. There was avote this evening that moved the process forward in the Senate. Wealready have a House bill that's passed. I'm hoping over the next severaldays that the House and the Senate can reconcile their differences andget that bill on mydesk.

There have been criticisms from a bunch ofdifferent directions about this bill. So let me just address a few ofthem.

Some of the criticisms really are with thebasic idea that government should intervene at all in this moment of crisis. You have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace.

And in fact there are several who have suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles thatI thought were resolved a pretty long timeago.

Most economists, almost unanimously,recognize that evenif philosophically you're -- you're wary of government intervening inthe economy, when you have the kind of problem we have right now --what started on Wall Street goes to Main Street, suddenly businessescan't get credit, they start paring back their investment, they startlaying off workers, workers start pulling back in terms of spending --that when you have that situation, that government is an importantelement of introducing some additional demand into the economy. Westand to lose about $1 trillion worth of demand this year and anothertrillion next year, and what that means is you've got this gaping hole inthe economy.

That's why the -- the figure that weinitially came up with, of approximately $800 billion, was put forward. That wasn't justsome random number that I plucked out of -- out of a hat. Thatwas Republican and Democratic, conservative and liberal economists thatI spoke to, who indicated that given the magnitude of the crisis andthe fact that it's happening worldwide, it's important for us to havea bill of sufficient size and scope that we can save or create 4million jobs. That still means that you're going to have some net jobloss, but at least we can start slowing the trend and moving it in theright direction.

Now, the recovery and reinvestment packageis not the only thing we have to do. It's one leg of the stool. We are stillgoing to have to make sure that we are attracting private capital, get thecredit markets flowing again, because that's the lifeblood of theeconomy. And so tomorrow my Treasury secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are goingto start loosening up credit once again.

And that means having some transparency and oversight in the system.

It means that we correct some of themistakes, with TARP, that were made earlier, the lack of consistency, the lack of clarity,in terms of how the program was going to moveforward.

It means that we condition taxpayerdollars that arebeing provided, to the banks, on them showing some restraint when itcomes to executive compensation, not using the money to chartercorporate jets when they're notnecessary.

It means that we focus on housing and howare we going to help homeowners that are suffering foreclosure or homeowners who arestill making their mortgage payments but are seeing their property values decline.

So there's going to be a whole range ofapproaches that we have to take for dealing with the economy. My bottom line is tomake sure that we are saving or creating 4 million jobs, we are making surethat the financial system is working again, that homeowners aregetting somerelief.

And I'm happy to get good ideas fromacross the political spectrum, from Democrats and Republicans.

What I won't do is return to the failed theories of the last eight years that got us into this fix in the first place, becausethose theories have been tested and they have failed. And that'spart of what the election in November was all about. Okay?

Caren Bohan ofReuters.

QUESTION: Thank you, Mr.President. I'd like to shift gearsto foreign policy. What is your strategy for engaging Iran, andwhen will you start to implement it? Will your time table beaffected at all by the Iranian elections? And are you getting anyindications that Iran is interested in a dialogue with the UnitedStates?

MR. OBAMA: I said during thecampaign that Iran is a country that has extraordinary people, extraordinary historyand traditions, but that its actions over many years now havebeen unhelpful when it comes to promoting peace and prosperity both inthe region and around the world; that their attacks or -- or their-- their financing of terrorist organizations like Hezbollah andHamas, the bellicose language that they've used towards Israel,their development of a nuclear weapon or their pursuit of a nuclearweapon -- that all of those things create the possibility ofdestabilizing the region and are not only contrary to our interests, but I thinkare contrary to the interests of international peace.

What I've also said is that we should take an approach with Iran that employs all of the resources at the United States' disposal,and that includes diplomacy. And so my national security teamis currently reviewing our existing Iran policy, looking at areaswhere we can have constructive dialogue, where we can directly engagewith them. And my expectation is, in the coming months, we will belooking for openings that can be created where we can start sitting acrossthe table, face to face; of diplomatic overtures that will allow usto move our policy in a new direction.


And it's important that even as we engagein this direct diplomacy, we are very clear about certain deep concerns that wehave as a country, that Iran understands that we find the fundingof terrorist organizations unacceptable, that we're clear about thefact that a nuclear Iran could set off a nuclear arms race in theregion that would be profoundly destabilizing. So there are going tobe a set of objectives that we have in these conversations, but Ithink that there's the possibility, at least, of a relationship ofmutual respect andprogress.

And I think that if you look at howwe've approached theMiddle East, my designation of George Mitchell as a special envoy tohelp deal with the Arab-Israeli situation, some of the interviews thatI've given, it indicates the degree to which we want to dothings differently in the region. Now it's time for Iran to sendsome signals that it wants to act differently as well and recognizethat even as it is has some rights as a member of theinternational community, with those rights come responsibilities.


MR. OBAMA: ChipReid.

QUESTION: Thank you, Mr.President.

You have often said that bipartisanship isextraordinarily important overall and in this stimulus package. But now whenwe ask your advisers about the lack of bipartisanship so far -- zero votesin the House, three in the Senate -- they say, well, it's not thenumber of votes that matters; it's the number of jobs that will becreated.

Is that a sign that you are moving away,your White House is moving away, from this emphasis on bipartisanship? And whatwent wrong? Did you underestimate how hard it would be to changethe way Washingtonworked?

MR. OBAMA: I don't think -- Idon't think I underestimated it. I don't think the American people underestimatedit. They understand that there have been a lot of bad habits built up herein Washington. And it's going to take time to break down some ofthose badhabits.

You know, when I made a series ofovertures to the Republicans -- going over to meet with both Republican caucuses, you know,putting three Republicans in my Cabinet, something that is unprecedented, making sure that they were invited here to the White House, totalk about the economic recovery plan -- all those were not designedsimply to get some short-term votes. They were designed to try tobuild up some trust over time.


But understand the bottom line that I'vegot right now, which is what's happening to the people of Elkhart and what's happeningacross the country. I can't afford to see Congress play the usualpolitical games. What we have to do right now is deliver for theAmerican people. So my bottom line when it comes to the recoverypackage is send me a bill that creates or saves 4 million jobs, becauseeverybody has to be possessed with a sense of urgency about putting peopleback to work, making sure that folks are staying in their homes, thatthey can send their kids tocollege.

That doesn't negate the continuing effortsthat I'm going to make to listen and engage with my Republican colleagues. Andhopefully the tone that I've taken, which has been consistently civiland respectful, will pay some dividends over the longterm.

There are going to be areas where wedisagree and there are going to be areas where we agree.

As I said, the one concern I've got on the stimulus package, in terms of the debate and listening to some of what's been saidin Congress is that there seems to be a set of folks who -- I don'tdoubt their sincerity -- who just believe that we should donothing. Now, if that's their opening position or their closing positionin negotiations, then we're probably not going to make muchprogress, because I don't think that's economically sound and I don't thinkwhat -- that's what the American people expect, is for us to stand byand donothing.

There are others who recognize that we'vegot to do a significant recovery package but they're concerned about the mix of what'sin there. And if they're sincere about it, then I'm happy tohave conversations about this tax cut versus that -- that tax cut orthis infrastructure project versus that infrastructureproject.

But what I -- what I've been concernedabout is some ofthe language that's been used suggesting that this is full of porkand this is wasteful government spending, so on and so forth. First of all, when I hear that from folks who presided over a doubling ofthe national debt, then, you know, I just want them to not engage insome revisionist history. I inherited the deficit that we haveright now and the economic crisis that we have rightnow.

Number two is that, although there aresome programs in there that I think are good policy, some of them aren't jobcreators. I think it's perfectly legitimate to say that those programs shouldbe out of this particular recovery package, and we can deal withthem later.

But when they start characterizing this as porkwithout acknowledging that there are no earmarks in this package --something, again, that was pretty rare over the last eight years -- then youget a feeling that maybe we're playing politics instead of actuallytrying to solve problems for the Americanpeople.

So I'm going to keep on engaging. Ihope that as we get the Senate and the House bills together, that everybody is willing togive a little bit. I suspect that the package that emerges is notgoing to be a hundred percent of what I want. But my bottom line is,arewe creating 4 million jobs, and are we laying the foundation forlong- term economicgrowth?

This is another concern that I've had insome of the arguments that I'm hearing. When people suggest that what a waste ofmoney to make federal buildings more energy-efficient -- why would that bea waste of money? We're creating jobs immediately byretrofitting these buildings or weatherizing 2 million Americans' homes, as was called for in the package. So that right there creates economicstimulus, and we are saving taxpayers, when it comes to federalbuildings, potentially $2 billion. In the case of homeowners, they willsee more money in their pockets. And we're reducing our dependence onforeign oil in the Middle East. Why wouldn't we want to make thatkind of investment?

Now, maybe philosophically you just don't think that the federal government should be involved in energy policy. I happen todisagree with that. I think that's the reason why we find ourselvesimporting more foreign oil right now than we did back in the early '70s,when OPEC first formed. And we can have a respectful debate aboutwhether or not we should be involved in energy policymaking, but don'tsuggest that somehow that's wasteful spending. That's exactly whatthis countryneeds.

The same applies when it comes toinformation technologies and health care. We know that health care is crippling businessesand making us less competitive, as well as breaking the banks offamilies all across America. And part of the reason is we've got themost inefficient health care system imaginable. We're still usingpaper. We're -- we're still filing things in triplicate. Nursescan't read the prescriptions that doctors -- that doctors have writtenout. Why wouldn't we want to put that on an -- put that on anelectronic medical record that will reduce error rates, reduce our long-termcost of health care, and create jobs rightnow?

Education, yet another example. Thesuggestion is, why should the federal government be involved in school construction? Well, I visited a school down in South Carolina that was built in the1850s. Kids are still learning in that school -- as best they can. When the -- when the railroad -- when the -- it's right next to a railroad,and when the train runs by the whole building shakes and the teacherhas to stop teaching for a while. The -- the auditorium iscompletely broken down and they can't use it. So why wouldn't we want to build state-of-the-art schools with science labs that are teaching our kids the skills they need forthe 21st century, that will enhance our economy and, by the way, rightnow will createjobs?

So, you know, we can differ on some of theparticulars,but again, the question I think that the American people are asking is,do you just want government to do nothing, or do you want it todo something? If you want it to do something, then we can havea conversation. But doing nothing -- that's not an option frommy perspective.

All right. Chuck Todd. Where'sChuck?

QUESTION: Thank you, Mr.President. In your opening remarks,you talked about that if your plan works the way you want it to work,it's going to increase consumer spending. But isn't consumerspending, or over-spending, how we got into this mess? And if people getmoney back into their pockets, do you not want them saving it or payingdown debt first, before they start spending money into theeconomy?

MR. OBAMA: Well, first of all,I don't think it's accurate to say that consumer spending got us into this mess. What gotus into this mess initially were banks taking exorbitant, wild riskswith other people's monies, based on shaky assets. And because ofthe enormous leverage, where they had $1 worth of assets and theywere betting $30 on that $1, what we had was a crisis in thefinancial system.

That led to a contraction of credit, whichin turn meant businesses couldn't make payroll or make inventories, which meantthat everybody became uncertain about the future of the economy.

So people started making decisions accordingly, reducing investments, initiating layoffs, which in turn made thingsworse.

Now, you are making a legitimate point,Chuck, about the fact that our savings rate has declined. And this economy has beendriven by consumer spending for a very long time. And that's notgoing to be sustainable. You know, if all we're doing is spending andwe're not making things, then over time, other countries are going to gettired of lending us money. And eventually the party's going to beover.

Well, in fact, the party now isover. And so the sequence of how we're approaching this is as follows. Our immediate job is tostop the downward spiral. And that means putting money intoconsumers' pockets. It means loosening up credit.

It means putting forward investments thatnot only employ people immediately but also lay the groundwork for long-term economicgrowth. And that by the way is important, even if you're afiscal conservative, because the biggest problem we're going to have,with our federal budget, is if we continue a situation in which thereare no tax revenues, because economic growth is plummeting at thesame time as we've got more demands for unemployment insurance; we'vegot more demands for people who've lost their health care, more demandfor food stamps. That will put enormous strains on the federal budget as well as the state budget.

So the most important thing we can do forour budget crisisright now is to make sure that the economy doesn't continue totank. And that's why passing the Economic Recovery Plan is the right thingto do, even though I recognize that it's expensive.

Look, I would love not to have to spendmoney right now. I'd -- you know, this notion that somehow I came in here just ginned upto spend $800 billion, you know, that -- that wasn't -- that wasn'thow I envisioned my presidency beginning. But we have to adapt toexisting circumstances.

Now, what we are going to also have to dois to make sure that as soon as the economy stabilizes, investment begins again; we'reno longer contracting, but we're growing; that our midterm andlong-term budget is dealt with. And I think the same is true forindividual consumers. Right now, they're just -- they're just trying tofigure out how do I make sure that if I lose my job, you know, I'm still going to be able to make my mortgage payments.


Once the economy stabilizes and people areless fearful, then I do think that we're going to have to start thinking about how dowe operate more prudently, because there's no such thing as a freelunch. So if -- if you want to get -- if you want to buy a house,then putting zero down and buying a house that is probably notaffordable for you in case something goes wrong, that's something that has tobe reconsidered.

So we're going to have to change our --our bad habits. But right now, the key is making sure that we pull ourselves out ofthe economic slump that we'rein.

All right. Julianna Goldman,Bloomberg.

QUESTION Thank you, Mr.President.

Many experts, from Nouriel Roubini toSenator Schumer, have said that it will cost the government more than a trillion dollars to really fix the financial system. During the campaign, youpromised the American people that you won't just tell them what they wantto hear, but what they need to hear. Won't the government needfar more than the $350 billion that's remaining in the financial rescue fundto really solve the credit crisis?

MR. OBAMA: Well, the credit crisis is real. And it'snot over. I mean, we averted catastrophe by passing the TARPlegislation. But as I said before, because of a lack of clarity and consistencyin how it was applied, a lack of oversight in -- in -- in how themoney went out, we didn't get as a big of a bang for the buck as weshould have.

My immediate task is making sure that thesecond half ofthat money, $350 billion, is spent properly. That's my firstjob. Before I even think about what else I've got to do, my first task is tomake sure that my secretary of the Treasury, Tim Geithner, workingwith Larry Summers, my national economic adviser, and others, are comingup with the best possible plan to use this money wisely, in a waythat's transparent, in a way that provides clear oversight; that weare conditioning any money that we give to banks on themreducing executive compensation to reasonable levels and to make surethat they're not wasting thatmoney.

We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restoredwithin the marketplace, because right now part of the problem is thatnobody really knows what's on the banks' books. Any given bank,they're not sure what kinds of losses are there. We've got to open thingsup and restore sometrust.

We also have to deal with the housingissue in a clearand consistentway.

I don't want to preempt my secretary ofthe Treasury; he's going to be laying out these principles in great detail tomorrow. But my instruction to him has been let's get this right, let's createa template in which we're restoring market confidence. And thereason that's so important is because we don't know yet whether we'regoing to need additional money or how much additional money we'll needuntil we've seen how successful we are at restoring a sense of confidencein a marketplace that the federal government and the Federal ReserveBank and the FDIC, working in concert, know what they're doing.

That can make a big difference, in terms of whether or not we attract private capital back into the marketplace. Andultimately the government cannot substitute for all the private capital that hasbeen withdrawn from the system. We've got to restore confidence,so that private capital goes backin.



QUESTION: Thank you, Mr.President. My question followsJulianna's incontent.

The American people have seen hundreds ofbillions ofdollars spent already. And still the economy continues tofree-fall. Beyond avoiding the national catastrophe that you've warned about, onceall the legs of your stool are in place--

MR. OBAMA: Right.

QUESTION: -- how canthe American people gauge whether or notyour programs areworking?

Can they -- should they be looking at themetric of the stock market, home foreclosures, unemployment? What metric shouldthey use? When? And how will they know if it's working or whether ornot we need to go to a Plan B?

MR. OBAMA: I think my initialmeasure of success is creating or saving 4 million jobs. That's bottom line numberone, because if people are working, then they've got enough confidenceto make purchases, to make investments. Businesses start seeingthat consumers are out there with a little more confidence. Andthey start making investments, which means they start hiring workers.

So step number one, jobcreation.

Step number two, are we seeing the creditmarketsoperate effectively? You know, I can't tell you how many businessesthat I talk to that are successful businesses but just can't getcredit. Part of the problem in Elkhart that I heard about today was thefact that this is the RV capital of America. You've got a bunch ofRV companies that have customers who want to purchase RVs, buteven though their credit is good, they can't get theloan.

Now, the businesses also can't get loansto make payments to their suppliers. But when they have consumers, consumerscan't get the loans that they need. So normalizing the credit marketsis, I think, step number two.

Step number three is going to behousing. Have we stabilized the housing market? Now, you know, the federal government doesn'thave complete control over that. But if our plan is effective,working with the Federal Reserve Bank, working with the FDIC, I think whatwe can do is stem the rate of foreclosure and we can startstabilizing housing values over time.

And the most -- the biggest measure of success is whether we stop contracting and shedding jobs, and we start growing again. Now, you know, I don't have a crystal ball, and as I said, this isan unprecedented crisis. But my hope is that after a difficultyear -- and this year is going to be a difficult year -- that businessesstart investing again, they start making decisions that, you know, infact, there's money to be made out there; customers -- or consumersstart feeling that their jobs are stable and safe, and they startmaking purchases again. And if we get things right then, startingnext year, we can start seeing some significantimprovement.

Ed Henry. Where's Ed? CNN. There heis.

QUESTION: Thank you, Mr.President. You've promised to sendmore troops to Afghanistan. And since you've been very clear abouta time table to withdraw our combat troops from Iraq within 16 months,I wonder what's your time table to withdraw troops eventuallyfrom Afghanistan?

And related to that, there's a Pentagonpolicy that bans media coverage of the flag-draped coffins from coming into Dover AirForce Base. And back in 2004, then-Senator Joe Biden said that itwas shameful for dead soldiers to be, quote, snuck back into thecountry under the cover ofnight.

You've promised unprecedentedtransparency, openness in your government. Will you overturn that policy, so the Americanpeople can see the full human cost of war?

MR. OBAMA: Your question is timely. We got reportsthat four American service members have been killed in Iraq today. And you know, obviously our thoughts and prayers go out to thefamilies.

I've said before that, you know, peoplehave asked me, "When did it hit you that you are now president?" And what I toldthem was the most sobering moment is signing letters to the families of ourfallen heroes. It reminds you of the responsibilities that you carryin this office and the consequences of decisions that youmake.

Now with respect to the policy of openingup media to loved ones being brought back home, we are in the process of reviewingthose policies in conversations with the Department of Defense. SoI don't want to give you an answer now, before I've evaluated that reviewand understand all the implicationsinvolved.

With respect to Afghanistan, this is goingto be a big challenge. I think, because of the extraordinary work done by our troops andsome very good diplomatic work done by Ambassador Crocker in Iraq, wejust saw an election in Iraq that went relatively peacefully, and youget a sense that the political system is now functioning in ameaningful way.

You do not see that yet in Afghanistan. They've got elections coming up, but effectively the national government seems verydetached from what's going on in the surrounding community. Inaddition, you've got the Taliban and al Qaeda operating in the FATA andthese border regions between Afghanistan and Pakistan. And what wehaven't seen is the kind of concerted effort to root out those safehavens that would ultimately make our missionsuccessful.

So we are undergoing a thorough-goingreview. Not only is General Petraeus, now the head of CENTCOM, conducting his ownreview, he's now working in concert with the special envoy that I've sentover -- Richard Holbrooke, one of our top diplomats -- to evaluatea regional approach. We are going to need more effectivecoordination of our military efforts with diplomatic efforts withdevelopment efforts with more effective coordination with our allies in orderfor us to be successful.

The bottom line, though -- and I just want to rememberthe American people, because this is going to be difficult -- is thisis a situation in which a region served as the base to launch anattack that killed 3,000 Americans. And this past week I met withfamilies of those who were lost in 9/11, a reminder of the costs ofallowing those safe havens toexist.

My bottom line is that we cannot allow alQaeda to operate. We cannot have those safe havens in that region. And we're goingto have to work both smartly and effectively, but with consistency, inorder to make sure that those safe havens don'texist.

I do not have yet a timetable for how longthat's going to take. What I know is I'm not going to make -- I'm not going to allowal Qaeda or bin Laden to operate with impunity planning attacks onthe U.S. homeland. All right.

Helene Cooper. Where is Helene? Here yougo.

QUESTION: Thank you,sir.

I wanted to ask you, on the next bankbailout, are you going to impose a requirement that the financial institutions use this moneyto loosen up credit and make new lending? And if not, how do youmake the case to the American people that this bailout will work whenthe last one didn't?

MR. OBAMA: Again, Helene, I --I -- and I'm trying to avoid preempting my secretary of the Treasury; I want all of youto show up at his press conference as well. (Laughter.) He's going to beterrific.

But this relates to Jake's earlierquestion. One of my bottom lines is whether or not credit is flowing to the people who needit. Is it flowing to banks? Is -- excuse me; is it flowing tobusinesses, large and small? Is it flowing to consumers? Are theyable to operate in ways that translate into jobs and economic growth onMain Street?

And the package that we've put together isdesigned to help do that. And beyond that, I'm going to make sure that Tim getshis moment in the sun tomorrow, allright?

Major Garrett. Where isMajor?

QUESTION: Mr. President,at a speech Friday that many of us covered, Vice President Biden said the following thing about a conversationthe two of you had in the Oval Office about a subject he didn'tdisclose. "If we do everything right, if we do it with absolutecertainty, if we stand up there and we really make the tough decisions, there'sstill a 30 percent chance we're going to get it wrong."

Since the vice president brought it up,can you tell the American people, sir, what you were talking about? And if not, can you at least reassure them it wasn't the stimulusbill or the bank rescue plan and if in general you agree with that ratioof success, 30 percent failure, 70 percent success?

MR. OBAMA: (Laughs.) Youknow, I don't remember exactly what Joe was referring to, not surprisingly. (Laughter.) But let me try thisout.

I think what Joe may have been suggesting,although I wouldn't put numerical -- I would ascribe any numerical percentage to anyof this, is that given the magnitude of the challenges that we have,any single thing that we do is going to be part of the solution, notall of thesolution.

And as I said in my introductory remarks,not everything we do is going to work out exactly as we intended it to work out. Thisis an unprecedented problem. And you know, when you talk toeconomists, there's some general sense of how we're going to move forward.

There's some strong consensus about the need for a recovery package of a certain magnitude. There's a strong consensus that youshouldn't put all your eggs in one basket, all tax cuts or all investment,but that there should be a range ofapproaches.

But even if we do everything right onthat, we've still got to deal with what we just talked about, the financial system andmaking sure that banks are lending again. We're still going to haveto deal with housing. We're still going to have to make sure thatwe've got a regulatory structure -- a regulatory architecture for thefinancial system that prevents crises like this from occurring again. Those are all big, complicated tasks.

So I don't know whether Joe was referringto that, but I use that as a launching point to make a general point about theseissues.

MR. OBAMA: I have noidea. I reallydon't.

Michael Fletcher, The WashingtonPost.

QUESTION: Yeah, thank you,sir. What's you're reaction to Alex Rodriguez's admission that he used steroids as a member of theTexas Rangers?

MR. OBAMA: Yeah, I think it'sdepressing news on top of what's been a flurry of depressing items, when it comes to Major League Baseball.









QUESTION: Did you get any promise from them?



And one of my goals is to prevent nuclear proliferation generally.




All right.

Sam Stein, Huffington Post. Where's Sam?

QUESTION: Right here.

MR. OBAMA: There. Go ahead.

QUESTION: Thank you, Mr. President.







Mara Liasson.















All right?

STAFF: Thank you.

QUESTION: One more, Mr. President.

PRESIDENT OBAMA: Thank you, guys.

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