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President Obama Addresses Media on DADT, START Treaty, Tax-Cut Extension and Other Major Administration Efforts Over Last Year

Aired December 22, 2010 - 16:10   ET



WOLF BLITZER, HOST, "THE SITUATION ROOM": You're looking at a live picture right now of the Old Executive Office Building, now called the Eisenhower Executive Office Building, right next door to the White House, on the White House complex, reporters standing by, the president of the United States getting ready to walk out, make a statement, and then start answering reporters' questions.

We have special coverage this hour. We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer in Washington.

I'm joined here by the best political team on television, joining us, John King, Gloria Borger, Joe Johns, Paul Begala, Alex Castellanos.

But I want to go to Capitol Hill first. Dana Bash is standing by.

Dana, the Senate, the House, they're getting ready to get out of town, but there are some new developments unfolding right now. What's going on?


I can tell you that senators and members of the House can smell it, because they're really ready to get out of here, but it really was a dramatic day, Wolf, because the president is coming out to tout the accomplishments that he saw and a frenzy of activity during the late morning, early afternoon, and that is the president getting approval of his START treaty that has been his top foreign policy priority, 71 senators voting yes, and also the Senate voting unanimously, unanimously, on the 9/11 first-responders bill that Democrats, especially those from New York, have been pushing very, very hard.

It is actually going to the House right now. So, that coupled with the tax cut compromise, the "Don't Ask, Don't Tell" repeal, in the words of Senator Lindsey Graham, a Republican, to me just in the hallway a few moments ago, when people say President Obama had a great two weeks, they're absolutely right.

BLITZER: Very impressive, what he's managed to accomplish during this lame duck session.

John, there was low expectations after the Republican victory November 2. People thought the lame duck session probably wouldn't do much. But there have been a series of accomplishments, legislative achievements.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: You remember, what did he call it, we called it on election night and the president himself called it the day after, a shellacking?

What happened? He has had a December to remember. And he's got a number of great achievements here. And the interesting question, is, Wolf, is this a down payment on a new Washington, where grownups actually have conversations, work out their differences, and govern, or is this just a temporary lull?

Because, as Dana just noted, Lindsey Graham gives the president credit. Lindsey Graham gives the majority leader in the Senate, Harry Reid, credit, who deserves a lot of the credit for his negotiating tactics and his use of the rules. But Republicans also left their leadership.

The key dynamic in 2009 and 2010 was the ability of John Boehner in the House and Mitch McConnell in the Senate to hold the Republicans into voting no. The Republicans broke on "Don't Ask, Don't Tell". On the tax compromise, the Republicans cut that deal, on the START treaty, on other issues as well. Does that carry over?

Can you cut deals, get six Republicans here, two Republicans here, eight Republicans there in the next year, or does Mitch McConnell draw the line, when he will have more Republicans in the Senate, and more conservative Republicans in the Senate?

BLITZER: And they passed -- and they're about to pass completely, the House as well, the 9/11 first-responders compensation health care bill. A lot of Republicans were skeptical about that, but, in the end, they supported it.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, you know, they went into a room and they cut a deal and they made it a little bit less expensive and they limited it in certain ways. And they actually did what members of Congress are supposed to do, which is to work things out.

I think, going into the next Congress, though, it's going to be issue by issue, because you're going to have some very tough things. And I think, again, the president will have to define what they are in his State of the Union.

But the first thing on the table is going to be deficit reduction. And that, of course, is the most partisan of issues, because it involves every single social program, and Republicans are going to say, cut, cut, cut. And Democrats are going to say, wait a minute.

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: I'm not sure all that much has changed, though, though the president has had a wonderful December.

Republicans didn't really go over the line on one area, economics. They killed Harry Reid's 1,900-page spending wreck. And they held the line there.


BORGER: -- stimulus package


CASTELLANOS: And they got their -- that was a tax cut. They got 100 --


CASTELLANOS: They got that. They got President Bush's tax cuts extended. So, they're holding the line on that. On social issues, on "Don't Ask, Don't Tell", Democrats won. The president gets credit for both. But the --


CASTELLANOS: And START, the president gets credit for that.

But on economics, Republicans are going to hold the line, I think, and you're -- you're going to see that. Barack Obama's light beer, now you can have all the taste of Barack Obama you want without the spending calories, because Republicans can say no on spending.

BLITZER: All right, hold on, hold on one second. I want to go quickly to Dan Lothian cause he's going to have to sit down in a minute, he's over there at the news conference.

Dan, the president, I assume, right after this news conference, shortly thereafter, he gets out of Dodge as well and heads to catch up with his family in Hawaii.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. His family went there a few days ago, now he'll get a chance to take this long-awaited vacation, but will making somewhat of a victory lap here. The president will be acknowledging some of the accomplishments that you have been talking about, but also looking to the future. It will be a much more challenging environment for the president in 2011 with Republicans taking the lead in the House. And so, it will be interesting to see what the president will be able to get done.

But this will be a chance for the president really to look back over the last two years. As we heard him talk about this morning, how much was accomplished over the last two years and certainly what was accomplished over the last six weeks, Wolf.

BLITZER: All right. Dan, sit down, get ready if he call on you for your question.

Paul Begala, you wanted to make a statement or a comment or something?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Well, first off, anything good that happens in Washington, the president gets credit. And to a great degree, he should, he takes a lot of blame when things go wrong.

But this notion that we've reached a new era is, I think, foolish. I think this is maybe some nice holiday cheer. It's also, frankly, the fact that there's a deadline, and nothing focuses the mind like a deadline.

BLITZER: Hold on. Hold on. Here comes the president right now. He's going to open with a statement.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon. I know everybody is itching to get out of here and spend some time with their families. I am, too. I noticed some of your colleagues have been reporting from Hawaii over the last week.

But I just wanted to say a few words about the progress that we've made on some important issues over these last few weeks.

A lot of folks in this town predicted that, after the midterm elections, Washington would be headed for more partisanship and more gridlock. And instead, this has been a season of progress for the American people.

That progress is reflected -- is a reflection of the message the voters sent in November, a message that said it's time to find common ground on challenges facing our country. It's a message that I will take to heart in the new year, and I hope my Democratic and Republican friends will do the same.

First of all, I am glad that Democrats and Republicans came together to approve my top national security priority for this session of Congress, the New START treaty. This is the most significant arms control agreement in nearly two decades. And it will make us safer and reduce our nuclear arsenals, along with Russia.

With this treaty, our inspectors will also be back on the ground at Russian nuclear bases, so we will be able to trust, but verify.

We'll continue to advance our relationship with Russia, which is essential to making progress on a host of challenges, from enforcing strong sanctions on Iran to preventing nuclear weapons from falling into the hands of terrorists.

And this treaty will enhance our leadership to stop the spread of nuclear weapons and seek the peace of a world without them.

The strong bipartisan vote in the Senate sends a powerful signal to the world that Republicans and Democrats stand together on behalf of our security. And I especially want to thank the outstanding work done by Vice President Joe Biden, the chairman of the Foreign Relations Committee, Senator John Kerry, and the ranking Republican, Senator Richard Lugar, for their extraordinary efforts. In fact, I just got off the phone with Dick Lugar and reminded him, the first trip I ever took as senator, foreign trip, was with Dick Lugar to Russia to look at nuclear facilities there. And I told him how much I appreciated the work he had done and that there was a direct line between that trip that we took together when I was a first-year senator and the results of the vote today on the floor.

This all speaks to a tradition of bipartisan support for strong American leadership around the world. And that's a tradition that was reinforced by the fact that the New START treaty won the backing of our military and our allies abroad.

In the last few weeks, we also came together across party lines to pass a package of tax cuts and unemployment insurance that will spur jobs, businesses, and growth. This package includes a payroll tax cut that means nearly every American family will get an average tax cut next year of about $1,000 delivered in their paychecks.

It will make a difference for millions of students and parents and workers and people still looking for work. It's led economists across the political spectrum to predict that the economy will grow faster than they originally thought next year.

In our ongoing struggle to perfect our union, we also overturned a 17-year-old law and a longstanding injustice by finally ending "Don't Ask, Don't Tell."

As I said earlier today, this is the right thing to do for our security. It's the right thing to do, period.

In addition, we came together across party lines to pass a food safety bill, the biggest upgrade of America's food safety laws since the Great Depression. And I hope the House will soon join the Senate in passing a 9/11 health bill that will help cover the health care costs of police officers, firefighters, rescue workers, and residents who inhaled toxic air near the World Trade Center on that terrible morning and the days that followed.

So I think it's fair to say that this has been the most productive post-election period we've had in decades. And it comes on the heels of the most productive two years that we've had in generations.

That doesn't mean that our business is finished. I am very disappointed Congress wasn't able to pass the DREAM Act, so we can stop punishing kids for the actions of their parents and allow them to serve in the military or earn an education and contribute their talents to the country where they grew up.

I'm also disappointed we weren't able to come together around a budget to fund our government over the long term. I expect we'll have a robust debate about this when we return from the holidays, a debate that will have to answer an increasingly urgent question, and that is, how do we cut spending that we don't need, while still making investments that we do need, investments in education, research and development, innovation, and the things that are essential to grow our economy over the long run, create jobs, and compete with every other nation in the world?

I look forward to hearing from folks on both sides of the aisle about how we can accomplish that goal.

If there's any lesson to draw from these past few weeks, it's that we are not doomed to endless gridlock. We've shown in the wake of the November elections that we have the capacity not only to make progress, but to make progress together.

And I'm not naive. I know there will be tough fights in the months ahead. But my hope heading into the new year is that we can continue to heed the message of the American people and hold to a spirit of common purpose in 2011 and beyond. And if we do that, I'm convinced that we will lift up our middle class, we will rebuild our economy, and we will make our contribution to America's greatness.

Finally, before I take questions, I want to send a message to all those Americans who are spending Christmas serving our nation in harm's way. As I said in Afghanistan earlier this month, the American people stand united in our support and admiration for you.

And in this holiday season, I'd ask the American people to keep our troops in your prayers and lend a hand to those military families who have an empty seat at the table.

So with that, I'm going to take some questions, and I'm going to start with Karen Boren (ph).

QUESTION: Thank you, Mr. President. You racked up a lot of wins in the last few weeks that a lot of people thought would be difficult to come by. Are you ready to call yourself the comeback kid?

And also, as you look ahead to 2011, are you worried that bipartisan agreement will be a lot harder to reach on issues like deficit reduction and maybe even tax reform?

OBAMA: Well, look, as I said right after the midterm elections, we took a shellacking, and I take responsibility for that. But I think what's happened over the last several weeks is it's not a victory for me, it's a victory for the American people.

And the lesson I hope that everybody takes from this is that it's possible for Democrats and Republicans to have principled disagreements, to have some lengthy arguments, but to ultimately find common ground to move the country forward.

That's what we did with taxes. Those arguments have not gone away. I still believe that it doesn't make sense for us to provide tax cuts to people like myself who don't need them when our deficit and debts are growing. That's a debate that's going to continue into 2011. And I know that Republicans feel just as strongly on the other side of that.

I think that we're still going to have disagreements in terms of spending priorities. It's vital for us to make investments in education and research and development, all those things that create an innovative economy, while at the same time cutting those programs that just aren't working. And there are going to be debates between the parties on those issues.

But what we've shown is that we don't have to agree on 100 percent to get things done that enhance the lives of families all across America. And if we can sustain that spirit, then regardless of how the politics play out in 2012, the American people will be better for it. And that's my ultimate goal.

Jake Tapper?

QUESTION: Thanks, Mr. President. Merry Christmas.

OBAMA: Merry Christmas.

QUESTION: I have a couple of questions about "Don't Ask, Don't Tell." First of all, congratulations. What was your conversation like with Marine Commandant Amos when he expressed to you his concerns, and yet he said that he would abide by whatever -- whatever the ruling was? Can you understand why he had the position he did?

And then, on the other hand, is it intellectually consistent to say that gay and lesbians should be able to fight and die for this country, but they should not be able to marry the people they love?

OBAMA: You know, I don't want to go into detail about conversations in the Oval Office with my service chiefs. Jim Amos expressed the same concerns to me privately that he expressed publicly during his testimony. He said that there could be disruptions as a consequence of this.

And what I said to him was that I was confident, looking at the history of the military with respect to racial integration, with respect to the inclusion of women in our armed forces, that that could be managed, and that was confirmed by the attitudinal studies that was done prior to this vote.

And what he assured me of -- and what all the service chiefs have assured me of -- is that, regardless of their concerns about disruptions, they were confident that they could implement this policy without it affecting our military cohesion and good discipline and readiness. And I take them at their word.

And I've spoken to them since the vote took place, and they have all said that we are going to implement this smartly and swiftly, and they are confident that it will not have an effect on our military effectiveness. So I'm very heartened by that.

And I want to, again, give Bob Gates and Admiral Mullen enormous credit for having guided this process through in a way that preserves our primary responsibility to keep America safe and, at the same time, allows us to live up to our values.

Now, with respect to the issue of whether gays and lesbians should be able to get married, I've spoken about this recently. As I've said, you know, my feelings about this are constantly evolving. I struggle with this.

I have friends, I have people who work for me who are in powerful, strong, long-lasting gay or lesbian unions, and they are extraordinary people, and this is something that means a lot to them and they care deeply about.

At this point, what I've said is, is that my baseline is a strong civil union that provides them the protections and the legal rights that married couples have. And I think -- and I think that's the right thing to do.

But I recognize that, from their perspective, it is not enough. And I think this is something that we're going to continue to debate and I personally am going to continue to wrestle with going forward.

QUESTION: But the military does not recognize civil unions, right?

OBAMA: I understand. And -- and as I said, this is going to be an issue that is not unique to the military. This is an issue that extends to all of our society, and I think we're all going to have to have a conversation about it.

Dan Lothian?

LOTHIAN,: Thank you, Mr. President. And happy holidays.

OBAMA: Happy holidays.

LOTHIAN: Can you -- could you give us an update on that car that you talk so much about being in the ditch, can you give us an update as to where it is today? What kind of highway do you think it will be driving on in 2011? Who will really be behind the wheel, given the new make-up in Congress? And what do you think Republicans will be sipping and saying (ph) next year?


OBAMA: Dan, you gave some thought to that question, didn't you?


OBAMA: Well, I do think that the -- the car is on level ground. I mean, the car is the economy. And I think we are past the crisis point in the economy, but we now have to pivot and focus on jobs and growth.

And my singular focus over the next two years is not rescuing the economy from potential disaster, but rather jumpstarting the economy so that we actually start making a dent in the unemployment rate and we are equipping ourselves so that we can compete in the 21st century.

And that means we've got to focus on education. That means we have to focus on research and development. We have to focus on innovation. We have to make sure that in every sector, from manufacturing to clean energy to high-tech to, you know, biotech, that we recognize that the private sector is going to be the driving force and what the government can do is to make sure that we're a good partner with them, that we're a facilitator, that in some cases we're a catalyst when it's a fledgling industry.

And that means that we've got to look at some of our old dogmas, both Democrats and Republicans, conservatives and liberals, to think about what works. If there are regulations that are in place that are impeding innovation, let's get rid of those regulations.

Let's make sure that we're also protecting consumers and we're protecting the environment and protecting workers in the process, but let's find ways to do business that helps business.

You know, people were doubtful about the approach that we took to the auto industry, but that was an example of -- there may be occasions, certainly during crisis, where a timely intervention that's limited and restricted can end up making a difference.

And so I think Democrats, Republicans, House, Senate, the White House, all of us have to be in a conversation with the private sector about what's going to ensure that we can export and sell our products instead of just buying exports from someplace else.

How do we make sure that, you know, the green technologies of the future are made here in America? And how do we get all these profits that companies have been making since the economy recovered into productive investment and hiring?

That's the conversation I had with the 20 CEOs who -- who came here, and that's a conversation I expect to continue in the months ahead.

But the answer about who drives, the American people are driving the car. They're the ones who are going to be making an assessment as to whether we're putting in place policies that are working for them. And both parties are going to be held accountable and I'm going to be held accountable if we take a wrong turn on that the front.


OBAMA: You know, my sense is the Republicans recognize that with greater power is going to come greater responsibility. And some of the progress that I think we saw in the lame duck was a recognition on their part that people are going to be paying attention to what they're doing as well as what I'm doing and what the Democrats in Congress are doing.

Mark Knoller?

QUESTION: Yes, sir. Mr. President, can you explain the anger and even outrage many Democrats felt when the tax cut bill extended tax cuts not just for the middle class, but also for the wealthy? And is that a divide that you may be contributing to when you and the vice president talk about morally inappropriate tax cuts for the wealthy?

OBAMA: Look, the frustration that people felt about that was frustration I shared. I've said that before, and I'll probably say it again.

I don't think that over the long run we can afford a series of tax breaks for people who are doing very well and don't need it, were doing well when Bill Clinton was in office. You know, they were still rich then, and they will still be rich if those tax cuts went away.

And so this is going to be a debate that we're going to be having over the next couple of years, because I guarantee you, as soon as the new Congress is sworn in, we're going to have to have a conversation about, how do we start balancing our budget or at least getting to a point that's sustainable when it comes to our deficit and our debt?

And that's going to require us cutting programs that don't work, but it also requires us to be honest about paying for the things that we think are important. If we think it's important to make sure that our veterans are getting care that they need when they come back home from fighting in Afghanistan or Iraq, we can't just salute and wish them well and have a Veterans Day parade. We've got to make sure that there are doctors and nurses and facilities for post-traumatic stress disorder, and that costs money.

If we say that education is going to be the single most important determinant for our children's success and this country's success in the 21st century, we can't have schools that are laying off so many teachers that they start going to four days a week, as they've done in Hawaii, for example.

We've got to make sure that young people can afford to go to college. If we want to keep our competitive edge in innovation, well, we've got to invest in basic research, the same basic research that resulted in the Internet, the same basic research that invited -- that resulted in GPS. All those things originated in research funded by the government.

So, you know, we are going to have to compare the option of maintaining the tax cuts for the wealthy permanently versus spending on these things that we think are important. And that's a debate that I welcome.

But I completely understand why not just Democrats, but some Republicans might think that that part of the tax package we could have done without.

Having said that, I want to repeat: Compromise, by definition, means taking some things you don't like. And the overall package was the right one to ensure that this economy has the best possible chance to grow and create jobs.

And there's no better anti-poverty program than an economy that's growing. There's no better deficit-reduction program than an economy that is growing. And if the economy started contracting, as it might have had we not gotten this tax agreement, then the choices that we would have to make would be even tougher.

QUESTION: Sir, is there a divide between middle-class and wealthy Americans? OBAMA: I think middle-class folks would confirm what the statistics say, which is that they have not seen a real increase in their incomes in a decade while their costs have skyrocketed. That's just a fact.

What is also a fact is that people in the top 1 percent, people in the top 0.1 percent or 0.01 percent have a larger share of income and wealth than any time since the 1920s. Those are just facts. That's not a feeling on the part of Democrats; those are facts.

And something that's always been the greatest strength of America is a thriving, booming middle class, where everybody's got a shot at the American dream. And that should be our goal. That should be what we're focused on: How are we creating opportunity for everybody?

So we celebrate wealth. We celebrate somebody like a Steve Jobs, who, you know, has created two or three different revolutionary products. We expect that person to be rich, and that's a good thing. We want that incentive. That's part of the free market.

But we also want to make sure that -- that those of us who have been extraordinarily fortunate, that we're contributing to the larger American community so that a whole bunch of other kids coming up are doing well. And that means schools that work and, you know, infrastructure, like roads and airports that function, and it means colleges and universities that teach and aren't restricted to just people who can afford it, but are open to anybody with talent and a willingness to work.

And -- and that's going to be, I think, part of the conversation that we've got to have over the next couple of years.

Juan Carlos Lopez?


OBAMA: Feliz Navidad.

LOPEZ: Mr. President, you've been able to fulfill many of your promises. Immigration reform isn't one of them. Just this last weekend, the DREAM Act failed cloture by five votes, and five Democrats didn't support it, three Republicans did.

How are you going to be able to keep your promise when Republicans control the House when you haven't been able to do so with Democrats controlling both the Senate and the House and when Republicans say they want to focus on border security before they do anything on immigration?

OBAMA: Well, let -- let me say, you know, there are a number of things that I wanted to get accomplished that we did not get accomplished. For example, collective bargaining for firefighters and public safety workers, that was something that I thought was important. We didn't get it done. I'm disappointed in that. I think we're still going to have to figure out how we work on energy. And that's an area that I want to immediately engage with the Republicans to -- to figure out.

But I will tell you, one of -- maybe my biggest disappointment was this DREAM Act vote. You know, I get letters from kids all across the country, came here when they were 5, came here when they were 8. Their parents were undocumented.

The kids didn't know. The kids are going to school, like any other American kid. They're growing up. They're playing football. They're going to class. They're dreaming about college.

And suddenly, they come to 18, 19 years old, and they realize, "Even though I feel American, I am an American, the law doesn't recognize me as an American. I'm willing to serve my country. I'm willing to fight for this country. I want to go to college and better myself, and I'm at risk of deportation."

And it is heartbreaking. That can't be who we are, to have kids, our kids, you know, classmates of our children who are suddenly under this shadow of fear, through no fault of their own. They didn't break a law; they were kids.

So, you know, my hope and expectation is that, first of all, everybody understands I am determined and this administration is determined to get immigration reform done. It is the right thing to do. I think it involves securing our borders.

And my administration has done more on border security than any administration in recent years. We have more of everything, ICE, Border Patrol, surveillance, you name it. So we take border security seriously. And we take going after employers who are exploiting and using undocumented workers, we take that seriously.

But we need to reform this immigration system so we are a nation of laws and we are a nation of immigrants. And at minimum, we should be able to get the DREAM Act done.

And so I'm going to go back at it, and I'm going to engage with Republicans who -- I think some of them, in their heart of hearts, know it's the right thing to do, but they think the politics is tough for them. Well, that may mean that we've got to change the politics and I've got to spend some time talking to the American people and others have to spend time talking to the American people, because I think that if the American people knew any of these kids -- they probably do, they just may not know their status -- they'd say, "Of course we want you."

That's -- that's -- that's who we are. We're -- that's the better angels of our nature.

And so one thing I hope people have seen during this lame duck, I am persistent. I am persistent. I -- you know, if I believe in something strongly, I stay on it. And I believe strongly in this.

And -- and I am happy to engage in -- with the Republicans about, if they've got ideas about more on border security, I'm happy to have that conversation.

And, you know, I think that it's absolutely appropriate for the American people to expect that we don't have porous borders and anybody can come in here anytime. That -- that is entirely legitimate.

But I also think about those kids. And I want to do right by them. And I think the country is going to want to do right by them, as well.

Mike Emanuel?

QUESTION: Thank you, Mr. President. Merry Christmas.

OBAMA: Merry Christmas.

QUESTION: Guantanamo, sir, I understand a draft of an executive order is being prepared for you. And I don't expect you to comment then on that. It hasn't gotten to you yet.


QUESTION: But it makes me wonder where you are, sir, about the two-year mark on Guantanamo, when closing it was one of your initial priorities, sir.

OBAMA: Obviously, we haven't gotten it closed. And let me just step back and explain that the reason for wanting to close Guantanamo was because my number-one priority is keeping the American people safe. One of the most powerful tools we have to keep the American people safe is not providing Al Qaeda and jihadists recruiting tools for fledgling terrorists.

And Guantanamo is probably the number-one recruitment tool that is used by these jihadist organizations. And we see it in the websites that they put up; we see it in the messages that they're delivering.

And so my belief is that we can keep the American people safe, go after those who would engage in terrorism, and my administration has been as aggressive in going after Al Qaeda as any administration out there.

And we've seen progress, as I noted during the Afghan review. Every intelligence report that we're seeing shows that Al Qaeda is more hunkered down than they have been since the original invasion of Afghanistan in 2001, that they have reduced financing capacity, reduced operational capacity. It is much more difficult for their top folks to communicate, and a lot of those top folks can't communicate because they're underground now.

But it is important for us, even as we're going aggressively after the bad guys, to make sure that we're also living up to our values and our ideals and our principles. And that's what closing Guantanamo is about, not because I think that the people who are running Guantanamo are doing a bad job, but rather because it's become a symbol. And I think we can do just as good of a job housing them somewhere else.

Now, to your -- the issue you had about the review. You're right, I won't comment right now on a review that I have not received yet.

I -- I can tell you that, over the last two years, despite not having closed Guantanamo, we've been trying to put our battle against terrorists within a legal structure that is consistent with our history of the rule of law. And we've succeeded on a number of fronts.

One of the toughest problems is what to do with people that we know are dangerous, that we know are -- have engaged in terrorist activity, are proclaimed enemies of the United States, but because of the manner in which they were originally captured, the circumstances right after 9/11 in which they were interrogated, it becomes difficult to try them, whether in an Article III court or in a military commission. Releasing them at this stage could potentially create greater danger for the American people.

And so how do we manage that? And that's what this team has been looking at.

You know, are there ways for us to make sure these folks have lawyers, to make sure that these folks have the opportunity to challenge their detention, but at the same time, making sure that we are not simply releasing folks who could do us grievous harm and have shown a capacity and willingness to engage in brutal attacks in the past?

And so, when I get that report, I'm sure that I'll have more comments on it. The bottom line is, is that striking this balance between our security and making sure that we are consistent with our values and our Constitution is not an easy task, but ultimately that's what's required for practical reasons, because the more people are reminded of what makes America special, the fact that we stand for something beyond just our economic power or our military might, but we have these core ideals that we observe even when it's hard, that's one of our most powerful weapons, and I want to make sure that we don't lose that weapon in what is a serious struggle.

So, with that, everybody, I want to wish you all a merry Christmas, happy holidays, happy new year. See you in 2011.

BLITZER: So the president answering questions, making a statement, obviously very pleased by what has been accomplished during this lame duck session on several critical issues. He's getting ready now to get out of Washington and meet up with his family in Hawaii for a little Christmas/New Year's vacation. He's obviously worked really hard during these past few weeks.

Let's assess what we just heard from the president of the United States.

He was very pleased. He didn't overly gloat, John. But he was obviously very pleased by the accomplishments, which so many had said were not going to be possible after the Republican "shellacking" of the Democrats.

KING: He shared the credit, which was smart. He's operating out of Washington, where he's a Democratic president. He will have a Republican House and a very evenly divided, slightly Democratic Senate, so sharing the credit is a smart thing to do.

He didn't gloat. He said jobs and growth, jobs and growth, jobs and growth quite a bit, which is what he needs to focus on almost exclusively when he comes back next year.

Look, Wolf, you know this from the Bill Clinton, days, when we covered the White House. The president is always elevated. The president is more elevated when you have divided government.

When he will have a Republican Speaker in the House and a Democratic Leader in the Senate, it gives the president a platform, an even bigger platform than normal. The question is, will he use it to the best of his political advantage and to the policy advantage?

There have been a lot of critics of the president within the Democratic Party -- one of them is at the table right here with us, Paul -- and outside the party about his leadership, his chief executive skills. But a lot of people also say, OK, let's see what happens, how he adjusts to this election.

BLITZER: I've always believed from the day he accepted the Republican demands, the compromise on the tax cut bill, allowing wealthier Americans to continue getting the Bush-era tax cuts, he wanted to get that issue out of the way so some of these other issues, like "Don't Ask, Don't Tell," like the START treaty ratification, some of these other issues could go forward, especially the START treaty, because the Republicans had said nothing was going forward until you resolve that tax issue.

BORGER: Right. They declared that from day one. They said nothing's going to get done in this lame duck session until we get this tax issue out of the way.

And I think you're absolutely right. I think they made a decision that got a lot of Democrats, including Paul Begala, very upset. But he decided to do it so he could get the rest of his agenda done.

And I, for one, was kind of surprised, actually, that he managed to get both "Don't Ask, Don't Tell" and the START treaty and the 9/11 responder bill, and I think that's because everybody was paying attention to what the voters were saying in the midterm election, which is, actually, get something done. Context is everything. We're just going to have to see what happens.

(CROSSTALK) BLITZER: Joe, I want you to respond to this specific question, but listen to what the president said on working with Congress and the Republicans.


OBAMA: If there's any lesson to draw from these past few weeks, it's that we are not doomed to endless gridlock. We've shown in the wake of the November elections that we have the capacity not only to make progress, but to make progress together.

And I'm not naive. I know there will be tough fights in the months ahead. But my hope heading into the new year is that we can continue to heed the message of the American people and hold to a spirit of common purpose in 2011 and beyond.


BLITZER: Is he being naive? Is he realistic in assuming that the next two years, especially gearing up for a re-election campaign, there's going to be this kind of cooperation?

JOHNS: He's speaking to the Democrats, I think. And he's speaking to the country at large. I think by now, Barack Obama is wise enough to know how this town works.

He's clearly matured in this news conference from the person who took office two years ago. But what was interesting to me is how much he was talking to Democrats about tax cuts, I feel your pain, just like Bill Clinton.

Democrats who have criticized this president have said he is an inspirational, but not a persuasive leader. He's starting to sound a little bit more persuasive, but he's going to have to do it in the middle, I think.

BLITZER: You know, Paul, if he wouldn't have accepted the Republican demands on extending the Bush-era tax cuts for the wealthiest, he probably would not have gotten ratification of the START treaty, would not have gotten "Don't Ask, Don't Tell" repealed, would not have gotten this first responders 9/11 health care bill passed.

So the question to you, as someone who was critical of the president for making this compromise, was with it worth it?

BEGALA: First off, I dispute the premise wholeheartedly. If he had fought the Republicans on the tax bill, he would have beaten them, and then a weakened Republican Party he -- or, the Republicans, having to fight so hard on the tax bill, would have been forced to compromise on these other issues. So it's a counterfactual we don't really know.

But let me say, since it's been so long since I've praised Barack Obama, I forgot what it feels like. What an outstanding press conference he just had, in part because what he was saying before about the tax bill was, people like me, who still hold to the principles that he held to a few weeks ago, were sanctimonious, that we were somehow opposing the national interest. He didn't say that today.

He said, as Joe said, basically, I feel your pain, you're right. This question about not raising taxes -- not cutting taxes for the rich was a central premise of his campaign. He was forced to go back on it, he believes. But he said that today.

And then, when he talked about issues -- one of my big concerns about him as a communicator has been he tends to be a little too professorial. He's got a big brain, we all know that.

In this press conference, he talked about kids who wrote him letters about the DREAM Act. He sounded like a dad. When he talked about the economy, he sounded like somebody who actually knew about jobs.

It was a great (ph) performance, really outstanding.

BLITZER: I want you to listen to this clip from the news conference, Alex, and then we'll talk about it on the other side.

Listen to this.


OBAMA: One thing I hope people have seen during this lame duck, I am persistent. I am persistent. You know, if I believe in something strongly, I stay on it.


BLITZER: And he was specifically referring to immigration reform, his deep disappointment that the DREAM act was not approved, at least right now. But he says he's going to continue to fight on both of these issues.

CASTELLANOS: And expect him to. I think we've fixed the immigration problem in the sense the economy's cratered and more immigrants are leaving than coming. So it's not going to be that big a priority, politically, on the agenda, though it certainly is to Republicans and Democrats on the base.

But I'm going to get my Republican union card yanked for this, but I'm agreeing with Paul. This is the Obama we saw during the campaign.

This is the guy who sold hope and change and connected with people. There wasn't the arrogance of an insecure, young president in his first two years lifting his chin. This was a confident president who had gotten something done.

He's got the sweet spot. He can use Republicans to cut spending and taxes. He can go to Democrats -- excuse me.

BEGALA: You're getting choked up. CASTELLANOS: I'm getting choked up, he was so good.


BORGER: But he has Nancy, rihgt? He has the Republicans who are going to control the House again.

CASTELLANOS: He was very good.

BORGER: If he doesn't have Nancy Pelosi and Harry Reid, he's not disagreeing with them. He's disagreeing with the Republican leaders.

KING: But the choices are a lot harder next year.

BORGER: Right.

KING: He ends the year on a great, high note. The question is, can he carry it over? Because the choice -- it's not hard to give people tax cuts and run up the deficit. It's hard to cut Social Security and Medicare and domestic spending, and to try to convince the Republicans that in exchange for him going to the Democrats to do that, they're going to give him some taxes (ph).

CASTELLANOS: It will be if he wants to cut spending first. But if he's the first guy on the table to say, look, here's an agenda for growth, an agenda for -- we're going to all get together and cut spending later, but right now, here's how we're going to grow the economy --


BEGALA: They just spent $858 billion. I'm sorry. It's like putting Lindsay Lohan in charge of your rehab treatment.


CASTELLANOS: -- no problem adding $3 billion to the deficit, giving tax cuts to the middle class. You only have a problem when it's actually productive at the upper end as well, right?

BEGALA: We just disagree on who's productive.

BORGER: But why can't he --

CASTELLANOS: Three billion?

BEGALA: You think that Ms. Lohan or Paris Hilton are more productive than, like, a master sergeant or a maid (ph). I just disagree.

BORGER: But why can't Barack Obama talk about reforming the tax code, we're going to change the tax code, and in doing so, we're going to get some tax increases because we're going to take away some of those sacred cow write-offs that we all get? And grownups getting together to try and deal with this. BLITZER: You know, I was also intrigued, Joe -- and I'd like you to respond to this -- on this day, that the president signed into law repealing "Don't Ask, Don't Tell" that ends discriminations against gays serving openly in the United States military. He also once again strongly signaled -- in his words, he's wrestling with the whole issue of gay marriage, something he has opposed consistently, but now he's wrestling with it.

I sense a signal from him that he's increasingly becoming open to moving towards same-sex marriage.

JOHNS: Yes. It sure sounded like it. But he is going to have to walk a line there, because while it's pretty clear the United States electorate has shifted on this issue, and that's why they could move with "Don't Ask, Don't Tell," it's another thing to tackle this issue that is still very much tied up in the courts and that the country is still grappling with.

So that's one of those very hard social issues that could be a potential landmine for this president and one of those many tough things John talked about. He's got a lot of tough stuff ahead.

KING: If his advisers wish they could take one part of the news conference away, that's it. Not because they don't agree with him that this is a conversation that's good for the country, but because it is so divisive, because especially -- the people who oppose same- sex marriage tend to be the people who are more religious. They oppose it on religious grounds.

That's where Barack Obama says he has his questions from, coming out of the African-American church where it was frowned upon, it was harshly criticized. It's a debate the country might have to have. From a political standpoint, when you just want to say, I had a great week, his advisers would have prefer he would have left that out.

CASTELLANOS: The president is not supposed to be the evolver in chief. He actually said, "I'm evolving." He's supposed to be the commander in chief.

BEGALA: But I guarantee you, he did not walk in there saying, if I talk about nothing else, I'm going to talk about gay marriage. I guarantee you he did walk in this thing, if I talk about nothing else, I want to talk the Dream Act.


BEGALA: I was so impressed when he talked about the things that hadn't gotten done. He could have picked hundreds of things. The first thing, he said the DREAM Act. Then he called from the reporter on CNN Espanol and went out of his way to have a long discussion of the Dream Act. This is, I think, good for the country, but it's also very good for Democrats.

Look at the new Census data. The biggest growing sector of our population are Latinos in a lot of important states. He's -- I know he's thinking as the president it's good public policy. But let me tell you, as a political guy --


BEGALA: -- that was music to my ears.

CASTELLANOS: And maybe it's just Christmas, but I think you can see the beginnings of his presidential campaign here. This is a promised land campaign -- here's where I'm going to take you. He touched immigration. He talked about the economy, jobs and growth. I'm going to take you over here.


CASTELLANOS: Here's -- here's -- to a better place. Follow me and then you pull people behind you. OK, we're going to have to cut some spending. We're going to look at taxes. We're going to look at all those things.


LOTHIAN: You see, that's the thing --

BORGER: And jobs. Jobs, jobs, jobs.

CASTELLANOS: And that's what's tough for Republicans to compete with the president about.

LOTHIAN: The pain for this --

CASTELLANOS: They don't have that bully pulpit.

LOTHIAN: The pain for this president is going to be the moment when they start taking a pix ax --


LOTHIAN: -- to all of those social programs that mean so much to him and to his base. That's going to be a very bad and hard situation for --

BLITZER: How does he handle the issue of gay marriage, looking toward his own reelection campaign?

BEGALA: Well, I -- I think he needs to let the country lead on that. I thought, frankly, he was too slow on gays in the military. But today, he signed it into law, God bless him.

This is the one where the country has to move before he -- he gets too far out in front.


BEGALA: The country is moving --


BEGALA: Look, as a citizen, I'm all for it.

KING: The Supreme Court may deal with this before --


KING: -- by the time he runs for reelection.

BORGER: He may get a couple more justices --


BORGER: Right.

CASTELLANOS: From a Republican point of view, I think it's going to get increasingly harder for Republicans to explain why they think --


CASTELLANOS: -- that the biggest problem in the world is there's just too much love in it. And I think, politically, for the next lap of presidential elections, it's going to be a lot less prejudicial for a Democratic candidate to -- to support gay marriage. I don't -- I -- we've got the economy to worry about. That's where his focus is going to need to be. All the other stuff is two or three rings out.

BLITZER: And, Gloria, if -- if the economy doesn't improve over the next year or two, if there's still nearly 10 percent unemployment --


BLITZER: -- he can say all the great things --

BORGER: Forget it.

BLITZER: -- in the world --


BLITZER: -- but he's going to be in deep trouble.

BORGER: But -- but, you know, I -- I keep looking back to Ronald Reagan. Ronald Reagan had over 10 percent unemployment, lost seats in his first mid-term election. And then unemployment went down to the 7.2 percent range and he was fine. So if Barack Obama can get unemployment below 8 percent, he'd be looking pretty good.

BLITZER: All right, guys, thanks very much.

We're -- we're not going away from this issue.