WALLACE: Mr. President, thanks for talking with us.
OBAMA: Thank you so much for being here.
WALLACE: Did you or anyone else in your administration tell Tom Daschle he had to step down as your nominee?
OBAMA: Well, you know, I'm not going to go into the details of it, but as has been reported, Tom made the decision that he was going to be too much of a distraction to carry out what he's so passionate about, which is health-care reform.
What I did tell him was that I take responsibility for this mistake. I mean, I think that Tom took responsibility for the mistake on his taxes. I think it was an honest mistake, and I made the assessment. I made the judgment that he was the best person to achieve health-care reform and bring people together.
But what became clear to me is that we can't send a message to the American people that we've got two sets of rules: one for prominent people and one for ordinary people. And, you know, so I consider this a mistake on my part and one that I intend to fix and correct and make sure that we're not screwing up again.
WALLACE: Well, the reason I ask is because yesterday in this office, you were asked whether you supported him, and you said absolutely.
WALLACE: And it -- it becomes clear from your answer that you played a role in the decision for him to...
OBAMA: No. No, no, no, no, no. I don't want to -- I don't want to mistake the issue here. Tom made the decision here. He called me and indicated this was his decision.
WALLACE: Would you have continued to back him?
OBAMA: Well, I don't want to get into hypotheticals, Chris. Here's what I'll say. I think Tom is an outstanding person. I think this was an unintentional mistake on his part but a substantial one, and there's no excuse for the mistake. He took responsibility for it.
Ultimately, I have to take responsibility for a process that resulted in us not having a HHS secretary at a time when people need relief from their health-care costs.
And so, you know, this is a mistake, probably not the first one I'm going to be making in this -- in this office. But what I'm absolutely committed to doing is fixing it, getting a highly-qualified HHS secretary, and then making sure that we start providing some health-care relief to families who so desperately need it.
WALLACE: On your first day in office, you signed an executive order on lobbyists...
WALLACE: ... that you said marked a, quote, "clean break" with business as usual. And yet, in less than two weeks, you have signed waivers to allow the hiring of lobbyists to be deputy secretary at the Pentagon, deputy secretary at HHS, and chief of staff at the treasury.
Is that a clean break?
OBAMA: Well, that's three out of hundreds of appointments that we've made.
WALLACE: Three of the top jobs. Three really important jobs.
OBAMA: But let me say this, Chris. We disclosed these ahead of time. We set a very high bar. And everybody acknowledges that we have the toughest standards, not only of people who have lobbied previously, and the restrictions on them working in this White House, but also going forward.
And those rules will still apply, even for Mr. Lynn, who had some unique qualifications that I felt was important to America's national security. Even he is going to have to not be engaged in lobbying for two years -- or for the duration of my administration.
And so, look, is every approach that we're taking here going to be perfect? No.
Have we set a very high bar, higher than any president who's ever been in this office?
And are we generally meeting that very high standard? I think the answer is absolutely yes.
WALLACE: Let's turn to the economic stimulus plan and the bottom-line question...
WALLACE: ... will it work? You are taking hits right now from all sides: right and left. Columbia University economist Jeffrey Sachs calls it a, quote, "astounding mish-mash of tax cuts, public investments, transfer payments, and special treats for insiders."
Why not just pull it back, forget about the February 16 deadline, and get it right?
OBAMA: Well, I think, actually, that we are closer to getting it right than all these critics, partly because all these critics...
OBAMA: Hold on -- hold on a second, Chris. You want me to answer your questions, right?
WALLACE: Yes. Yes, sir.
OBAMA: The -- it turns out that all these critics have contradictory suggestions, don't they?
Some of them are saying, "Well, it doesn't spend out fast enough." Except it turns out that they also want infrastructure projects that might last for four, five, or six years.
There is no magic bullet to these situations. Here's what this package does. It provides payments, like unemployment insurance, to people who've lost their jobs and are in desperate need of help. And every economist says that that's a smart thing to do, because that gets the money out right away.
It provides support for people who have lost their health care because they've lost their job. And I think that's the right thing to do for families.
It also invests in green technologies, infrastructure that will lay the groundwork for long-term economic growth.
And most of the criticisms that have been leveled and, you know, that are -- that you've heard on your show about various pet projects that members of Congress might have put in there, when you tally all those up, amount to less than one percent of the entire package.
The last point I'd make is that many of the critics, what they're calling for are more tax cuts when, in fact, this is already $300 billion worth of tax cuts. And many of the people on the other side of the debate consider many of those wasteful.
But I actually think that Mitch McConnell is right, that we should have some tax cuts in this package.
No -- this is not going to be a package that makes everybody happy, but the main criteria I have is, is it going to put people back to work? And I think it actually will.
WALLACE: Is the February 16 deadline firm?
OBAMA: Yes, because nobody disagrees with the idea that, if we keep on putting this off, that we're going to end up seeing more months with half a million people losing their jobs each month. We can't afford to wait.
WALLACE: You reportedly told Senate Democratic leaders, when you met with them yesterday, that you want some changes in the bill. So let's do what we can, sir -- I used to do this with you as a candidate, but I'm going to ask you as president -- do a lightning round of quick questions and answers about specific changes.
Tax credits for people who buy homes or business? Good or bad?
OBAMA: I think it has some potential, and I'm willing to take a look at it.
WALLACE: Lower, federally-financed -- let me rephrase. Federally-guaranteed lower mortgage rates?
OBAMA: I think that we've got to take a look at the whole package of housing. Now, keep in mind that our intention has always been that, in addition to this recovery and reinvestment package, that we're also going to have a housing bill, that we have also got to fix the banking system, that we're going to have to make sure that, for example, issues like executive compensation for banks that are getting money through the TARP, that that's dealt with.
So we're moving on parallel tracks on a whole host of issues.
How much of the housing issue is dealt with in this bill, versus a separate bill, I think is something that we have got to discuss. But I actually agree with Democrats and Republicans that we've got to do more to provide relief to homeowners to prevent foreclosure.
WALLACE: Strip out the "buy American" provision for steel and iron in the bill, which a number of our allies are saying is too protectionist?
OBAMA: I agree that we can't send a protectionist message. I want to see what kind of language we can -- we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade.
WALLACE: When you see how well the Iraqi provincial elections went last weekend and how sharply the violence in Iraq has fallen, could the 16-month time line for getting our combat troops out slip?
OBAMA: Well, you know, I've been meeting with the joint chief of staff and Bob Gates, who I think is outstanding, one of my appointments. And the interesting thing I think there's a greater convergence than you would think watching the news media or having listened to us during the campaign.
Part of it is because of the outstanding work that was done by our military. But violence has gone down. You saw an election that was successful and peaceful and we've got to continue to give support to Iraqi security forces.
But I actually think that we can create a situation in which it is possible for us to draw down our troops in a responsible fashion, that meets my criteria for putting more troops into Afghanistan, but also meets the criteria of all of us to make sure that our troops are safe and that Iraqis (inaudible)
WALLACE: But is your job now in this office as commander in chief, a general (inaudible) says to you, we're going to do it, but it's going to take a little more than 16 months.
Are you open-minded on that?
OBAMA: I've said throughout that I have a conversation with my joint chiefs of staff and commanders on the ground. That's what I did the day after our the day I was sworn in and we are going to make sure that we have the best possible plan to achieve America's national security interests.
WALLACE: Two more questions.
WALLACE: Good. Since you became president, you have warned Republicans, quote, "You can't just listen to Rush Limbaugh and get things done."
OBAMA: Now, how do you know that's a quote?
WALLACE: Well, I read it in the media.
WALLACE: Did you not say...
OBAMA: I just wanted - I'm not sure that was the exact quote.
WALLACE: Let me throw another one at you and you tell me whether this is an exact quote. You were widely quoted, when you met with the House GOP caucus saying, go ahead, (inaudible) I'll watch Fox News and feel bad about myself.
OBAMA: That one I did say.
WALLACE: Is perhaps -- let me just raise the possibility -- are you a trifle thin-skinned?
OBAMA: No, no, no. I said it in good humor. I think everybody understood that that was a joke.
No, I think, Chris -- I think it's fair to say that I don't always get my most favorable coverage on Fox, but I think that's part of how democracy is supposed to work. You know, we're not supposed to all be in lock step here, and you've always been very gracious to me and...
WALLACE: ... improves or hurts my stock at Fox.
OBAMA: But they heard it.
WALLACE: Finally, last question sir, biggest surprise since you've been in here, two weeks, of the demands of the office?
OBAMA: Every decision you make counts. I think in terms of just raw hours and physical exhaustion, you can't beat a presidential campaign, especially the one that I just underwent which was so long. But here, everything you do matters.
I think I mentioned this a couple of days ago. I'm now signing letters to the families of troops who have fallen in Iraq or Afghanistan.
Every time you sign that, you are reminded that you have enormous responsibilities and so, that's why all of these debates -- when I'm talking to Democrats or Republicans, one of the things I try to remind then and something I remind myself every single day is the only criteria for what I do should be -- is it working for the American people?
Because this job is too big, too important, to just want to occupy space. And if I've spent the next four years, every day, making decisions based on that single criteria, is this going to help the American people achieve their dreams and keep them safe, then I'll be able to look at myself in the mirror and say, you know what, you did a good job?
WALLACE: Mr. President, thanks for talking with us.
OBAMA: Appreciate it. Thank you, Chris.