Transcript

Vice President Joe Biden Addresses the Recovery Act at the Brookings Institution

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Thursday, September 3, 2009; 11:52 AM

Biden: Thank you very much, Strobe.

(APPLAUSE) It's a pleasure to be back. And I told Strobe in the anteroom that, "Mr. Secretary, the many, many times that I've been here, almost always the subject has been foreign policy, and I hope I have an opportunity to come back and discuss some of those areas at a later date."

But today, I want to talk about the economy, specifically the Recovery Act. President Obama and I when we entered office, we were in the midst of what I refer to as the great recession. It seemed that every day that we woke up from the day we were sworn in there was a new revelation to be added to the economic parade of horribles, that we -- some of which we had anticipated.

Americans were seeing their savings decimated by losses in the stock market, watching it tank. Housing values were collapsing. People were losing their savings, as well as their home. Major banks -- it's hard to remember this, even though it's only been eight months ago -- major banks were on the verge of failure, closure. People were talking about shuttering the doors.

There was actually a serious discussion among economists we brought in from the outside during the interim period between the election and being sworn in where there was discussion by some very serious economists about a bank holiday maybe being necessary.

We were -- we were on the verge of failure. Credit was frozen. Businesses couldn't borrow for inventory, much less expand or hire; as a matter of fact, even to keep the employment force they had.

Credible economists were handicapping the possibility of a true depression. As Nobel Prizewinner Paul Krugman wrote in January of 2009 in the New York Times, he said, "Let's not mince words. This looks an awful lot like the beginning of the second Great Depression."

BIDEN: A look at some of the headlines at the time is a reminder of just how precarious our situation was eight months ago.

Quote: "The financial sector can't be relied on to keep U.S. economy humming." Headline: "No One Home. Record 1 in 9 Housing Units Empty. Vacancies Have Ripple Effect." Headline: "Economy Strains under Weight of Unsold Items." Headline: "Automakers Bankruptcy Looms." Headline: "Credit Freeze Leaves Thousands of Student Borrowers Stuck in Default." Headline: "Governments Brace for Hard Times: Some Have Frozen Hiring and Postponed Major Projects." Headline: "New Poor Swell Lines of Food Banks."

In the face of this mounting disaster, we, along with everyone in this room, knew action had to be taken. And we took action in three areas.

First, we had to stabilize the financial system. We took the very unpopular, but necessary, step of rescuing the banks. And now, although there's a long way to go, eight out of 10 of the largest financial institutions in America, including Goldman, Morgan Stanley, American Express, as well as 16 smaller banks, have repaid the government in full, and, I might add, at a $4 billion profit for the taxpayers.

Second, along with the Fed, we took action in stabilizing the housing market, allowing responsible homeowners to stay in their homes. And we're beginning to see the results of that.

We just learned that new housing starts rose 10 percent in July, for the fourth straight month increase.

Are we there yet? No. But we're moving.

Two hundred days ago, President Obama signed into law the third piece of our economic plan, the American Recovery and Reinvestment Act. And today there's a growing consensus the Recovery Act is, in fact, working. We don't -- don't just take my word for it. Analysts from Moody's to IHS Global Insight (ph), to the Economic Policy Institute and others all estimate the Recovery Act has created or saved between 500,000-750,000 jobs.

As a matter of fact, some notable economists suggest that the number is as high as a million.

Economists at Goldman Sachs believe that the -- the package added 2.2 percentage points to real GDP growth in the second quarter of 2009 and estimate that it'll add 3.3 percentage points to the current quarter.

Mark Zandi, a highly respected economist and former campaign aide for John McCain, wrote in a recent analysis, and I quote, "The fiscal stimulus is providing the fodder for better sales. Lower payroll tax withholding, checks to Social Security recipients and more financial help to unemployed workers are buoying household incomes, and housing tax credit has boosted home sales. It is no coincidence," the quote goes on, "that the recession is ending just when the stimulus is providing maximum economy benefit," end of quote.

BIDEN: As Australia's prime minister, Kevin Ruud, said a couple of weeks ago, and I quote, "This is a case study in bringing the world back from the brink, and it was the American leadership from President Obama that was the key," end of quote.

You know, it all adds up to this, in my view at least: The Recovery Act has played a significant role in changing the trajectory of our economy, in changing the conversation about the economy in this country. Instead of talking about the beginning of a depression, we're talking about the end of a recession eight months after taking office.

But the Recovery Act still has its critics, and one of the criticisms is that it's a grab bag of too many different programs. But the fact is, the Recovery Act is a multifaceted piece of legislation. It doesn't reflect a lot of design. That was the design, that was its intended design.

Our economy is so complex and so wounded that reinvigorating one segment alone or using one tool alone would never -- would never do all that needed to be done.

The Recovery Act is not a single silver bullet. I think of it as silver buckshot, as opposed to a single bullet.

In 200 days, the president's Recovery and Reinvestment Act isn't just working towards something -- excuse me, isn't just working, it's working toward something: It's working toward a more resilient, more transformative economy.

Folks, this act -- this act was designed to do three things.

One -- and it's never -- most people, when you talk about it and the criticism comes, they think it was $787 billion for highway projects -- this was $787 billion for highway projects.

My Republican friends, as my mother would say, God love them, forge that they insisted on $288 billion in tax cuts in this, which is part of it, and as a significant factor as well as benefit.

BIDEN: The people think it to be $787 billion of public works projects, but it's made up of three parts.

One, to bring relief to those hardest hit by the recession. Now, I know my Republican critics think maybe we shouldn't do that. Maybe that's the difference between being a Democrat and a Republican. I'm not being facetious; it's a legitimate disagreement. But the first part is bring relief to those who were falling into the abyss.

The second was to jump-start the economy by giving assistance to states, all of which were in desperate economic circumstances.

The third was to reinvest in existing infrastructure and lay a platform for the economic growth in future in energy, education and health care.

That was what it was intended to do.

In broad terms, let me explain how it breaks down. Approximately one-third of the money in the Recovery Act, $288 billion, is in the form of tax cuts or tax incentives, and thus far we've delivered more than $62 billion in tax relief to businesses and to 95 percent of the wage-earners in America. And by design, that will fold out over -- unfold over 18 months. It is not all paid out at once.

There are almost 320,000 new homeowners who took advantage of the first-time homebuyers tax credit, breathing life back into the housing market.

In addition, we've encouraged banks to loan to small businesses by -- by putting up front $200 million in loan guarantees, we've been able to leverage for small businesses capital -- capital loans -- private capital of $9.5 billion for many banks who hadn't made a single loan in two and a half years, helping small businesses stay and some expand.

BIDEN: Roughly another third of the money in the Recovery Act went to relief for worker, for working Americans who were most badly hit by the recession.

Whether it was through the state governments to keep cops, firefighters and teachers on the job or allowing states to continue; to provide food assistance to people who were in danger of going hungry or Medicaid; for the swelling rolls of people desperately in need of health care; to Pell Grants for families to keep their kids in college as they fell below that $50,000 mark; to extended unemployment benefits, extended COBRA benefits. And over 54 million seniors and veterans have received a one-time check for $250.

Not only does this give relief to the vulnerable, Americans who are in danger of falling into the abyss, it also -- it also has had the economic effect of injecting nearly $90 billion in the first 200 days into the bloodstream of the American economy, stimulating growth.

I believe this was the right thing to do morally. But that's not what we're about today. It was also the smart thing to do economically.

Roughly the last third of the Recovery Act is about rebuilding our communities and infrastructure while laying a platform -- a platform for growth in the 21st century.

We've made major investments in modernizing our infrastructure: highways, bridges, water and sewer systems. This has increased the productivity of the nation's capital stock and in the process improved the safety on our highways, the quality of our drinking water for millions of Americans.

We're also investing in what everybody knows is necessary to build the 21st-century economy.

(inaudible) I have people sometimes say, "Aren't you guys doing too much?"

You know, presidents in the past have been able to -- and I've been here for eight of them -- they've been able to take the problems that they have and segregate them, said, "We're going to take these two first. We'll put these other four, six or five aside and we'll get to them next." Because they know the status quo ante will pertain.

BIDEN: But name me one problem that landed on the president's desk that allowed him to say, "No, no, we're going to focus on this, and then in three years we'll get to this."

I say to my friends, does anybody think we can lead in the 21st century without a radically altered energy policy? Does anybody think we can sustain our position in the world without a radically altered education system where we're no longer 17th in the world in the number of college graduates we graduate? Does anybody think we can sustain our fiscal house without radical change in the cost of health care in this country and bending that curve?

Look, we knew we had to begin to lay the platform. While we were generating economic growth, why not begin to lay a platform for the 21st century?

We know we needed a totally new smart grid. Health information technologies will modernize the delivery of health care, saving -- saving lives and saving money. Expanding broadband to parts of the country that have been left behind, bringing the benefits of technology to everyone everywhere, and in the meantime having a significant increase on -- impact on productivity; high-speed rail diminishing congestion, increasing efficiency and reducing pollution; investing in new battery technology, electric motors for the next generation of vehicles.

When all is said and done, we want to emerge into an economy that isn't built on a bubble, but to rest on a firm foundation of innovative businesses, green energy, and a modernized health care system providing good jobs in each of those sectors on the way.

That's our vision and that's the vision we're determined to fulfill. We don't think, as my grandpop would say, the Recovery Act is the horse that can carry that sleigh alone, but is in a sense the down payment.

That's why from the beginning, I've held a Cabinet meeting every single week that we've been in session.

The joke is, you know, it's my job to hold Cabinet meetings. But I've had the great benefit -- by the way, it's the added benefit of getting them all together once a week and watching the synergy among them, watching them work off of one another. I really mean it. It's had -- there's been ancillary benefits to this that have been, I think, hopefully will be long-lasting in terms of competence of government.

BIDEN: But every week, with notable exceptions, I hold a Cabinet meeting, and most of the Cabinet secretaries attend and/or their deputies. For the first 100 days, I was very, very clear with them. Remember when the president -- by the way, never write a memo to the president suggesting that a job be undertaken that you don't want to have.

(LAUGHTER)

Don't ever do that.

After we passed the Recovery Act, I wrote a long memo to the president. We had lunch. And I said, "Boss, I think you should do this." He said, "Good. Do it."

I did not volunteer for this job.

But all kidding aside, when he announced that Biden was going to be the sheriff, well, the truth of the matter was that from the first 100 days, dealing with the Cabinet members on a weekly basis, I made it clear that our focus had to be in the first 100 days, accountability, transparency and responsiveness.

I wanted each of those Cabinet secretaries to set up systems where they would have a high degree of confidence that as they implemented -- implemented -- what they were in charge of, it would be done effectively and efficiently.

One of -- now, I'm going to get E.J. in trouble, but he happened to be in the room the day that a number of columnists came in to interview me. One of his colleagues said, "Well, what's going to happen, Mr. Vice President, when you plant" -- remember this? -- "10 dead trees in Central Park?"

I said, "I'm going to have to make sure we plant 100 good trees in Fairmont Park."

(LAUGHTER)

But, look, what could have -- what could have derailed this in the beginning was -- were those stories -- millions of dollars wasted on, you know, polar bear tanks and millions -- all the things you -- where everybody was predicting.

But in the first 100 days, this was the dog that didn't bite. So I wanted -- I wanted to make sure as well, that the governors, mayors and county executives knew this wasn't business as usual. I have now spoken to every governor except one, and now -- who's now a former governor.

(LAUGHTER)

And -- and, by the way, it wasn't by design. She was going to be on a couple times and couldn't for other reasons.

I've spoken to most of the governors twice. Once a week, I call and speak with five to seven governors and seven to 12 mayors.

BIDEN: I'm now well over 100 in the number of mayors I've talked to and I answer their specific questions. And I drove Ed Deseve, who's sort of the CEO of this operation, behind me, been involved in the federal government before, crazy when I said, "Ed, I want every question they have answered in 24 hours."

Pick up the phone and call any of the governors or the mayors I've spoken to, you will that we've given them an answer in 24 hours, and if we don't have an answer we call them in 24 hours, tell them why we don't have the answer and when they'll get the answer.

Because, again, this was all about establishing credibility at the front end of this; that this was going to be done well and differently, with accountability and transparency. Otherwise it had no chance.

In the process, the criticism was legitimate of me that we were moving too slowly to distribute taxpayers' funds in those first 100 days. But I thought we had to set up a system to ensure that those taxpayers' funds weren't wasted, undercutting what I truly believed then, believe now and think we are beginning to prove is an incredibly important element for recovery of this economy over the next 18 months.

And, quite frankly, I am very proud of the job that agencies have done and the responsiveness of the secretaries in each of the departments.

For the second 100 days, I gathered the Cabinet together and I instructed them that I wanted to be much more aggressive in implementing the programs, now that they had systems in place. And I take responsibility for mistakes that were made, but I want them to put more pace on the ball.

This was also the season -- the season of building. This is the time you make -- you're able to go out there and build highways, you're able to go out there and put sewer systems in the ground, you're able to lay broadband, because of the season.

In a sense, it was the planting season, and it was time to get these programs out, up and running and be on the backs of governors and mayors to make sure that they have let the contracts and that they had an accounting procedure in place where they'd be able to let us know exactly what happened.

BIDEN: So I asked them to set goals.

I remember the meeting -- I will not mention non-Cabinet member's name, but someone who had been involved in the government a long time, and said, "You're going to announce these goals? You're going to actually ask every Cabinet member to tell you precisely what they're going to do in the next 60 days -- excuse me -- 100 days, and you're going to announce it?" And I just said, "Yes."

And the reason wasn't any nobility. It was the only way to get credibility and accountability.

So we publicly announced the goals, putting ourselves on the line to deliver meaningful results in the second 100 days.

And I'm here today to report on the progress of achieving those goals.

We set a goal of having over 1,100 health centers in all 50 states be able to provide expanded care for an additional 300,000 patients. Not only have we met that goal, we exceeded it by 200,000 patients. 500,000 new patients are being treated.

We set a goal of funding 135,000 education jobs, because I heard from every governor, every mayor, every county executive about the fear of closing down schools, increasing class sizes, laying off tens of thousands of teachers.

You may remember the celebrated case in New York where somewhere (inaudible) 15,000, roughly, got their pink slips. They weren't going to be able to teach in the -- in the fall. So I wanted to make sure this occurred.

So we set a goal for 135,000 teachers and support staff whose jobs were otherwise at risk. We've met that goal.

We set a goal of hiring or keeping 500,000 law enforcement officers on the job in places hard hit and hard pressed to maintain their force structure as crime rates begin to go up. We met that goal.

We set a goal of having construction crews working on 98 airport projects and 100 -- 1,500 highway projects.

BIDEN: We exceeded that goal in the second 100 days by 94 airports and 700 highway projects.

And we set a goal of starting to build 200 water sanitary systems and wastewater treatment facilities in rural America. We've met that goal, and now approximately 4.5 million people in the next several months will have clean drinking water that they didn't have before.

We set a goal of starting or speeding up the cleanup work at 20 Superfund sites. How many speakers have you heard over the years talk about the Superfund sites that exist in America? Well, we met that goal, and in some cases we're taking years off the expected completion date of cleaning up these Superfund sites.

We met our goals through the military construction projects, the national parks, the summer youth jobs, and veterans facilities.

And not only have we met and achieved these goals, but contrary to what many have heard and contrary to usual practice, we've achieved them ahead of schedule and under budget.

Look, let me give you an example.

The FAA initially committed $1.1 billion to about 300 airport improvement projects. Now, we're going to finish those projects for $200 million less than originally estimated, and that means the FAA is in the process of being able to fund an additional 60 airport improvements.

We're seeing the same thing in the Department of Defense, where construction contracts are coming in at 12 percent under budget on average, representing hundreds of millions of dollars in savings. And the same can be said of many of our highway projects.

The reason I don't have a number for you, we have so many projects out there. I initially in the first 150 days had numbers -- what average they were coming in at, but now there's too many. We don't have the accounting for all of them.

The GSA has also seen projects come in ahead of schedule and under budget. Most bids, I'm told, to the GSA are coming in 8 to 10 percent below estimated cost.

Recovery Act dollars are going further and working harder than the vast majority of people anticipated. There are the facts. One hundred days ago, on June the 8th, I stated that we had -- I believed that we had saved or created 150,000 jobs in the first 100 days. And I went on to say, again over the objection of some of my more cautious advisers -- I went on to say that we will create another 600,000 jobs in the second 100 days.

On September the 10th, the Council of Economic Advisers plans to report to the nation their projections of jobs created or saved as a result of the Recovery Act. I'm optimistic -- as a matter of fact, I'm confident that that report will show that we met or exceeded our goal -- that goal as well.

To state the obvious, we will emerge from this great recession.

BIDEN: And I believe that is only -- that's necessary, but not sufficient. We have to emerge better positioned to lead the world in the 21st century as we did in the 20th century.

Where the last cycle generated billions of dollars -- billions from investments made by our high-speed trades, this cycle needs to make real investments in high-speed rail.

In the last cycle, innovation meant bundling and selling subprime mortgages. In this one, our innovations will bundle -- bundle and sell technologies to produce clean, efficient, renewable energy.

Where the benefits of productivity have not flown in the past -- from 2000 to 2007, productivity grew 20 percent, yet the middle-income households fell 3 percent, their income, in this cycle, we're determined to make sure that productivity doesn't elude the poor and the middle class. And this cycle must be one in which, once again, American workers get his or her fair share of the wealth they help produce.

If you look at the Recovery Act as a -- as a -- as a two-year marathon, we're at the nine-mile mark. We're just approaching the nine-mile mark. Two hundred days in, the Recovery Act is doing more, faster and more efficiently and more effectively than most people expected.

Some of the most exciting and transformative initiatives are now just about to get under way.

Throughout the fall, we'll be going to -- or we're going to be ramping up the loan guarantees that will help us generate solar, wind and geothermal energy. We're ramping them up in a significant way. And, as a matter of fact, I'll have an announcement tomorrow on this score.

And just 30 days since the Department of Energy opened the Renewable Grants program for applications, we have received applications for projects that could produce over a gigawatt of wind energy, enough power to power a half a million homes.

And, by the way, buried in all of this is what I think is not going to be able to be measured: What is the leveraging effect of what we are doing?

BIDEN: That will remain to be seen, but I believe it will be consequential.

This will be energy that's clean, renewable and doesn't pollute, and begins to wean us off the incredible dependence on foreign oil.

Next month we're going to release our initial payments, downpayments on the new smart grid, a new superhighway of connectivity that will allow reliable transmission of renewable energy, allow consumers to have real information in real time about how they're consuming their energy; allow them to adjust the ability to decide to turn their dishwasher on at 11 o'clock automatically because what is generating also is new manufacturing initiatives, the people building smart toasters, smart washers, smart dryers.

This is real stuff. That's what I mean by the leveraging effect that's out there. I don't know how to measure that. It's above my pay grade. But I know it's real. I know it's real.

Investment in broadband will ramp up in November, collecting (sic) large parts of the country that have been underserved or unserved by the Internet.

We already had nearly $30 billion in applications -- over $30 billion in requests, seven times the amount of money we have to distribute.

The result will be that rural hospitals can practice telemedicine and get consults from specialists who are hundreds of miles away. Adults can go to a virtual classroom and get their college or graduate degrees at home. Ranchers -- ranchers can in real time price -- get real time pricing information and sell their cattle online, on online auctions, earning them more money with less consequence to them.

It's real. These are tangible, real things that thus far have been denied significant segments of the population.

And, again, our broadband initiative of $7 billion isn't going to answer it all. There ain't enough there there to finish it. But once this begins, I believe, as the recovery increases and gets stronger over the next several years, you will see a national commitment that didn't exist before.

BIDEN: We're going to connect people from the inner cities and rural America to worlds of opportunity that have been previously worlds away for them.

Later, this winter, we're going to start investing in newer, faster and better rail travel. Now, I know, I'm a bit of a hobby horse on that. The joke in the administration when Rahm and I pushed for money for high-speed rail is, "There goes Biden again: cops and railroads."

(LAUGHTER)

By the way, finally got cops on railroads now.

(LAUGHTER)

But all kidding aside, it can be, again, transformative over time. We've already received pre-applications for thousands of miles of new rail for train corridors that would routinely exceed 150 miles an hour, and for two that are well planned that would allow travel for new train sets over 240 miles an hour.

Mr. Secretary, I don't have to tell you about transportation.

We're going to make additional investments in battery electric -- batteries and electric drive train technologies, which we've already made some, that will allow Detroit to produce vehicles so you get the equivalent of over 200 miles a gallon. And we're beginning to fund the network needed. You need gas stations. You need plug-in stations to charge up these vehicles. We've already beginning to fund them, hopefully, again, having a leveraging effect, making people realize that this is the future.

This fall we're going to continue to invest in modernizing our health care system so that doctors and hospitals would be able to have secure access to individual medical records by the press of a button, preventing hundreds of thousands of dollars in medical errors, thousands of unnecessary readmissions, and hundreds of thousands of unnecessary tests.

Give you an example of my colleague Tom Carper's driver having chest pains, taking him to an event, pulls into the Delaware hospital down there, Christiana Hospital. He happened to have a particular ailment that, had they known this, they would have gone right to deal with this hypertension that was there.

BIDEN: Instead, he had several thousand dollars worth of unnecessary tests done.

A doctor I met with in Chicago at a forum pointed out that he ordered a CAT scan, but because he had electronic record keeping in this particular office that he had set up and the hospital he was dealing with, a big orange marker came up saying, "You sure you need this?" -- pointing out that a CAT scan had been done at the request of another doctor just two weeks earlier.

This is real. This is not fiction. This is not -- this is not make-believe stuff. This is real. It's consequential.

Are we going to do it all? No. But we are -- we are -- while priming the economy, we're investing in new platforms that I believe other people are going to build off of.

In the first 200 days, we were about necessity. The next 200 days will be about possibilities. And the end of the day, these investments are about more than creating jobs. They're about creating strong communities and a stronger economy. They're about renewing a sense of hope and possibilities.

You know, it's often easy to sit in Washington, as we do today, and opine on what is or isn't happening beyond the capital Beltway. Well, like many of you, over the past two years I've had the opportunity to travel the byways and the highways of this entire country. I've crisscrossed it on rural highways and interstate highways, in large cities and small towns. I've met with local officials, business people, union workers, community leaders, farmers.

And the most oft-heard remark -- and I mean this literally, I heard as we go by and in their towns -- we go by and they go by a lot, and they say, "Well, that used to be -- that used to be. This used to be a steel mill. This town used to be the ceramic capital of America. This factory used to -- used to employ 1,200 people. This company used to have their headquarters here."

The "used to" was the most oft-heard phrase over the past two years when I was speaking to local officials.

But because of the investments we're beginning to make and investments that's generating and some competence that's beginning to build, I'm now hearing a different refrain -- literally, not figuratively.

BIDEN: Not everywhere, but I'm beginning to hear the refrain: "This is going to be" -- "This is going to be a factory that makes super-efficient windows."

"This is going to be a place where we make batteries and drive trains for electric cars and get 220 miles equivalent to a gallon."

"This is going to be the hub of a new smart grid, harvesting energy from the Great Plains to light up the cities of the Midwest."

"This abandoned factory" -- as I just did in Cincinnati, Ohio -- "This abandoned factory is going to house hundreds of families in adequate, low-cost housing."

"This factory is expanding, not closing, because we're building transformers for a new wind farm in central Missouri."

"This school won't shut down. We're going to be adding two classrooms and we're going to be leading the race to the top by taking advantage of the innovative money that's available to us."

These are real stories the Recovery Act is helping to write -- not totally responsible, but helping to write.

It's not nearly enough yet. But there'll be a lot more of them to come in the days to come. Remember, we're at the nine-mile mark of this marathon, 200 days in. We know there's a great deal more to do.

And again, to use my grandpop's metaphor, the Recovery Act isn't the horse that's carrying the whole sleigh. But it's pulling its weight.

We also know that, thanks to the Recovery Act, where we are today is a much better place than we could have possibly been without it.

And even more exciting is where I think we're headed. The road ahead is going to remain very, very bumpy. There's going to be positive economic news and there's going to be negative economic news.

But I believe it's going to be the three steps forward, the one step back. That's the way recoveries work, particularly in the last four decades.

But we know -- we are absolutely confident we are on the right road to recovery. We are on a road to recover in a way that we'll be able to sustain growth longer and more reliable, based on having created the circumstances where real jobs that pay real wages allow people to live middle-class lives are growing and not diminishing.

I thank you all for listening. And I yield the floor to the president, as I always do.

(APPLAUSE)

MODERATOR: Thanks very much, Mr. Vice President.

We've got about 15 minutes to spend in conversation with the vice president. He's already, in effect, called on E.J. in advance. So I'm sure E.J. will rise to the occasion.

Antoine (ph), did I see your hand go up?

Antoine Von Akmo (ph)?

BIDEN: Try mine.

(LAUGHTER)

QUESTION: Thank you very much. Mr. Vice President, thank you for an extremely interesting and inspiring and optimistic speech.

My question is this.

When the administration started, things looked very dire. You talked about the great recession, Krugman even about the Great Depression.

Things are clearly better. Would you say it is just the economic recovery act or was there perhaps an assessment at the time that was perhaps worse than it should have been on what the situation was?

And my second question, if I may, is you talked about the question of our dependence on oil. But recently department -- your Department of Energy has way upped the estimates for gas, because of the shale gas. How dependent are we really on foreign energy?

BIDEN: Well, let me take the first question. Do I think the Recovery Act is responsible for the recovery to the extent we're seeing it, that it has been -- it has generated the recovery we've seen so far.

No, I think it's part of it. I think everything from what the Fed's intervention to what we did with regard to the banks, as well as we did with regard to the housing markets and a whole range of other things, are combined to generate this impact.

What I will say is I will go back and reference the -- and I believe they're right, you'd expect me to say they're right -- the economists at Goldman's. Roughly, you can argue whether it's 2 percent or 3 percent, they say 2.2 percent of the growth in GDP in the second quarter was the consequence of the act, and roughly 3.3 percent is estimated to be responsible for the growth -- economic growth -- the growth in the GDP in the third quarter.

I think that's got it about right.

Is it responsible for all of it? Absolutely not.

Had we done just this and not done the incredibly unpopular thing of bailing out the banks, had we had done this and tried to deal with stabilizing the housing market, had we done only this we would not be where we are.

But, conversely, had we done the other things and not done this, one thing is certain: millions of Americans would be in much more dire straits now, even if you just think as simply as unemployment and COBRA and FMAP and all the things that provide the immediate, necessary, desperate help needed for people in extremis.

BIDEN: That's for sure.

The other piece is, I believe we would not -- we would not be in a position -- you would see absolute catastrophe occurring in all but two states in America who had no possibility -- no -- ask them. Ask the governors, Republican and Democrat. Without the billions of dollars in Recovery Act stabilization funds coming in, could they have maintained essential services in their states?

In the state of Pennsylvania alone, it's estimated they would have had to lay off 10,000 additional teachers and cops. It's not like you're laying off, you know -- you know, the local elevator operator, which is not insignificant, but it's a lost job -- but these are essential jobs. All you have to do is talk to them. Pick up the phone. I know you reporters will. Pick up the phone and call any governor, ask them about the impact on their ability to balance their budget without decimating essential services.

And the third piece that I'm confident of is that the infrastructure, which has been badly neglected -- we -- we have been devoting eight-tenths of 1 percent of our GDP to maintaining our infrastructure, where in China it's gotten as high as 8 percent of their GDP. Now, granted, they start from a different platform than we did. But the point is, this was necessary anyway. I mean, those of us who were running for public office were talking about investment in infrastructure before we had a recession.

So part of what we're doing here is not only economically sound, it is worthwhile in and of itself. It is worthwhile to take some of those 5,000 bridges out there that are ready to collapse, follow what happened in the upper Midwest, and fix them. But it has the added benefit of giving people good and decent jobs, paying a decent wage, and stimulating economic growth so the barber shop can stay open and the deli doesn't close.

BIDEN: I know you economists know all this, but I don't think we usually translate it that way for average, hard-working Americans. This flow -- this is in the economic bloodstream. There's $90 billion in there now that was in -- in terms tax cuts.

Are people spending it all? No. They're saving it.

Do we wish they'd spend more? In one sense, yes, but there's something pretty sound about it -- the American people aren't stupid. They're spending a lot of it through the Recovery Act, but they're also trying to get straight. They're trying to get right.

So, anyway, I -- I think it's been very helpful.

With regard to oil, I'm not sure I understood your question. You said our dependence on foreign oil, and now you're saying, what?

QUESTION: Foreign energy.

BIDEN: Foreign energy. Well, we are going to continue to need foreign. I'm not one up here making the argument to you that there is -- that it's in our near future or even in our overall interest to be energy independent.

But we have to be energy secure enough that we don't need any one source of energy; that we could say, if it stopped -- if tomorrow Chavez decided, "I'm not sending any more oil north to the United States," we'd be OK.

But there's a second reason for moving away from fossil fuels. It's the environment.

And so, this is -- these are multiple benefits that flow here.

And the other aspect of this is there's been studies that have been done here and other think tanks that show that these green jobs when created pay more for the same kind of effort, are more sustainable looking down the road, and many of them are not exportable.

So there's a number of ancillary benefits that flow from some of the things we're doing.

I'm not making the case, guys, that this is the be all, the end all; that the Recovery Act contains the answer to all our economic problems. What I am saying is without it, we'd be in real, much deeper trouble. With it, we're doing some really good things, and I believe we're changing the attitude about the country -- of the country about a number of areas of concern -- education, energy and health care -- modernization of the health care system.

BIDEN: And I think that has long-term leveraging impact on what's going to happen over the next 10 years.

MODERATOR: Mr. Vice President, I know you like hand-held mikes and you already gave yours away. We can get one back for you.

BIDEN: No, no. I'm fine.

MODERATOR: Darryl -- Darryl West (ph), head of our government study program.

QUESTION: Mr. Vice President, you mentioned that 8 to 10 percent of the recovery projects are coming in under their estimated costs. I am just wondering, how has the federal government achieved those kinds of very impressive cost savings?

And secondly, do you think it's time for the American public to revise the common view that the government is wasteful and inefficient?

BIDEN: On the last point, I think it's too early to make that decision, to be very blunt about it.

Running the risk of setting myself up for a test I might not be able to pass 18 months from now, I have tasked the Cabinet members to do a number of things beyond -- beyond transparently and accountably distribute the monies that are under their jurisdiction.

I've asked at the end of the day for us to put together a -- literally a handbook on how to, from this point on, to responsibly in the future for every government program that is administered from Washington, be more accountable, be more transparent and done more efficiently.

I hope the end result of what we're doing -- and we're actually compiling the changes we're making. Let me give you an example.

Up until now, you could not find -- and you know this better than I do -- if you were to try to determine whether or not the -- the toilet built in Yellowstone Park in a rest area had actually been built and how much it cost and who -- how many people it employed, and you went to the Interior Department, you couldn't find that answer. You can now. You can now.

We've never done this before. It has never -- we have never followed the dollars like we're following now before. And my view is, this should be the start of a new way of doing business, rather than the implementation of a single program.

BIDEN: Now, with regard to the first part of your question, which I forget what it was...

(LAUGHTER)

QUESTION: The 8 to 10 percent.

BIDEN: ... the 8 to 10 percent saving, I mean, contracts that are coming in, project can be 8 to 10 percent below, there's a reason for that. There's multiple reasons.

One is everybody knows that I'm looking to hang somebody. Not a joke. The guy who heads up the staff of 10 I.G.s, when I met with him after he was appointed, he doesn't work for me, he's independent, I asked for what he's looking for and I said, "You'd be doing me a great favor, Earl, if you detect something's wrong, tell me."

He said, "Well, yes, I would do that."

And I said, "Because I want to announce it."

And he looked at me, he said, "That's novel."

(LAUGHTER)

But, literally, to gain credibility, to be able to continue to do this kind of work, we have to demonstrate and acknowledge when we screw up, when we've made a mistake. Because the government -- you know, folks don't have a lot of confidence in Washington.

And there's a second reason I think they're coming under budget, and that is because people badly needed work. So we have contractors who might have in a different circumstance come in and said, you know, "I'm going to bid 1,000 bucks to do this job, but, man, I'm really hurting," and they're going to build -- they're going to bid $920 to do the job.

So I think it's both. I think it's both.

The question is, are we gathering it up, are we accounting for it, and what are we doing with it, and are we making it work for leveraging those dollars to do more to employ people and to generate a new infrastructure?

MODERATOR: Mr. Vice President, we're going to give one more last question to the floor from Amy Liu of our metro program. But if I could, I'd like to append to whatever Amy's going to ask you, request that you say a word or two about health care reform, since you did touch on health care a couple of times in your remarks, and what you see as the prospects for a bill emerging and reaching the president's desk that coincides with his objectives and promises.

(LAUGHTER)

BIDEN: Amy -- Amy, make it a long question.

(LAUGHTER)

QUESTION: Good morning, Mr. Vice President.

BIDEN: Good morning.

QUESTION: Thank you so much for your remarks. And congratulations to you and your team for all the achievements at the 200-day mark.

You know, as you may know, we have been working with a number of local elected officials, business leaders, nonprofit leaders, civic leaders in cities and metropolitan areas around the country who are really invested in making sure that the stimulus dollars are used in very catalytic ways.

I think, just like you, they don't want to waste a crisis, and they really want to not just focus on short-term job growth, but really making sure that we achieve your third goal of transformative outcomes and laying the groundwork for a long-term opportunity, not just short-term job growth.

But they are -- as you learn from all your conference calls, they are running into some challenges, linking up broadband and smart grid investments together, the desire to do neighborhood stabilization with mass transit investments that would really stabilize those neighborhoods for the long haul, bring market value to those neighborhoods. And they want to do this across jurisdictional lines, in partnership.

But again, they're running into some challenges. If I did my math correctly, there are 17.2 more miles left in this marathon, so I think on behalf of many of these folks who are your partners in recovery, what are the kind of tools or flexibilities are you thinking about to make sure that the next 18 months brings those catalytic outcomes that you want?

BIDEN: Well, Amy, you put your finger on the biggest frustration (inaudible) -- is this working? There you go -- and let me make a broad statement first.

Compare the recovery program and how the monies are being dispensed to a program that I had a hand in writing years ago, the COPS program.

We had a big fight when we were writing the COPS program, and I insisted that it not go to governors, it not go to the states, it go directly to -- you could directly apply. So you would put pressure, quite frankly, on the mayor when the chief said, "We want to apply to get two more cops in town because we need them." And the mayor had to decide whether or not he would write the application and the city council would support it to get a consensus to whether you were going to do this.

BIDEN: It put pressure.

But it also had a direct -- direct -- you do not -- you get out of jail, you do not have to, you know, do anything other than you pass Go, you go right and you apply for the -- at a local level, you apply for the grant. That's what we wanted to do for an awful lot of what was done in this legislation.

The fact is, the Congress, in its wisdom, decided that the governors should have a bigger input. I'm not -- they may be right, but I'm just telling you where -- where I come from -- and they may be right.

And the governors got a bigger say, which has caused real conflict some places. I have literally found myself in a place -- just like you should never volunteer to negotiate a marriage difficulty...

(LAUGHTER)

... you should never volunteer, as I've had to do, to settle a dispute between a big city mayor and his governor about whether or not the off ramp that's needed in a particular part of town should be funded versus 140 miles of highway in rural Missouri that is needed but is arguably, from the mayor's standpoint, not needed as badly.

And so, I -- there -- what's happened is, the first 100 days, I literally spent, as you probably know, because you talk to these people, literally negotiating those things. I had no authority -- I had no authority to tell the governor or the mayor, but I would get them together on the phone and I'd say, "Guys, can't you work this out? Can't you work this thing out? Can't you do -- may you should do," and, you know.

And so, I have done, like I did in the COPS bill, the criticism among my staff is I am too hands-on. But it reflects the difficulty you've raised, that in fact a lot of this is cross-jurisdictional.

And in some cities -- let me give you one -- one of the big problems. Governors now, at the other end of it, are in trouble -- not trouble, have a problem. All -- everybody has to account for the money they got beginning October 1st. It's going to go up on a big old Web site. We've got a new modern Web site that's going to blow you away in terms of how detailed it is. I really mean that. You're going to see it in the middle of -- in the middle of September.

BIDEN: But everything's got to go up on that Web site.

Governors are now calling me and saying, "Joe, I need guidance. You guys gave X thousand dollars through the Department of Education to school district Y. I don't control school district Y. I don't control it. That's controlled by the city."

Or the city is saying, "My school district is not controlled by me, it's controlled by an independent board and I got to account for the money going to the school district."

So it works both ways.

What we've tried to do is two things, and I'll give you last -- this is more detail than you wanted, but it's a really important question.

The example you're familiar with of dealing with healthier cities, healthier neighborhoods and communities, that affects everything from their water to their transportation system to their housing.

So we have for the first time, as you're probably aware, HUD working with DOT, Department of Transportation, and we're -- we are styling the grants that we are awarding based upon whether or not we are in fact impacting on the total health of that community.

So if you have a system where you know there is -- has been a problem, people not able to -- they have adequate housing, but they do not have access to transportation for jobs and they're in a lower- middle-income group of people, and we have a request that comes in for both the housing program that relates to weatherization, as well as a transportation request coming, we're trying to marry these things together.

Now, it's imperfect, because we don't have an overall piece of legislation out there that's called, you know -- you know, urban policy ABCD. So that's what I meant about the catalytic impact that I'm finding when you get all these -- these -- these Cabinet secretaries together.

Most of them are new. Most of them are -- we've got some superstars. This guy, kid, Arne Duncan, man, this guy's a superstar. I really mean it. Watch. Watch this guy.

You know, you got Shaun at HUD. This guy -- these guys are innovative, they're excited. And what they're doing is, there's a lot of cross-pollenization going on.

Is it written into the act? No, it's not. But we're trying to maximize the dollars.

BIDEN: But, Amy, we -- our hands are tied in some cases where we have no ability -- no ability to dictate how, in fact, the governor and the county executive and the mayor get together.

The last example -- broadband. What I'm asking the folks when they're all calling me in these conference calls, I'm calling them, and they say, "Well, broadband's a big deal. We've had a project for it, and the state has a project, and there's independent vendors that have a project." And they're saying, "And by the way," -- this is particularly in the West -- "we should have this cross-state."

And I said, "Well, why don't you get together? Why don't you get together? Get the governor of" -- I'm making this up, I don't want to, well, I won't even do it...

(LAUGHTER)

"The governor of state, the governor of state B, the governor of state C -- get your people together. Make a single submission to us."

So we're doing everything we can to encourage, although we have no authority to dictate, how this is being done. And you're going to be surprised -- I hope, knock on wood -- that a lot of innovative stuff is coming out of this, but it's coming also up from the community. Community people are saying, "Well, wait a minute. Now, look, why don't we do it this way? I know we can get X number of dollars for this, and they get -- why don't we get together? Can we -- if we come to you with this kind of program, can we still qualify?"

And I have not bent the law, but I have let imagination take hold in some places where I think it's consistent with the spirit of the law.

Is that the best way of saying that? Yes.

(LAUGHTER)

I should stop.

(LAUGHTER)

QUESTION: (OFF-MIKE)

BIDEN: Health care.

QUESTION: (OFF-MIKE) BIDEN: OK. OK. I do foreign policy. I don't do health care.

(LAUGHTER)

I'm often introduced as -- in the past, as the senator who is an expert on foreign policy, and I say, "Well, you know, an expert is anyone from out of town with a briefcase. I don't have a briefcase. And secondly, the reason I choose foreign policy, it's a lot easier than health care and a lot less complicated."

And that's not a joke. That's not a joke.

Look, the thing I can speak to now is the part of the health care -- modernization of the health care system that has nothing to do with anything from public plans to how many people get covered.

BIDEN: Just think of it in raw, simple terms: If you ran your businesses from an I.T. standpoint like doctors are forced and hospitals are forced to run their businesses, you would be out of business. You could not do it, literally.

Think about what happened 20 years ago in your law firm or your think tank, your business, when you were just setting up computers. It's not a joke -- I mean, I mean really basics. It's really basic, basic stuff.

But what we're talking about, if we did nothing else -- and we're going to do a great deal more in health care -- you've got to modernize the system that allows for the transfer of information. It is archaic. It is absolutely archaic.

I got in trouble for saying once "You've got to spend money to save money." And my right-wing friends went, "Ah, look at that Biden. Typical liberal, spending money."

Let me tell you: If we modernize health care recordkeeping, we will save tens of billions of dollars. Name me a business who didn't have to make an investment in their I.T. system in order to save money and increase productivity. That's what I mean by you've got to spend some money to save a lot more money. And I.T. is that one area.

So we put that platform down in this legislation. Beyond that, it has nothing to do with health care, other than also providing money for health care clinics, expansion of those clinics and increasing services.

Now, I am now about to go out of my brief.

With regard to the question of whether or not or what the health care system is going to look like that we're going to get, stay tuned for Wednesday. One thing I have learned, don't step on you boss's lines, OK?

(LAUGHTER)

But, all kidding aside, there's going to be a major speech laying out in understandable, clear terms what our administration wants to happen with regard to health care, and what we're going to push for, specifically.

But I can answer the question, do I think we will get it? What are the prospects of success? I think the prospects of success are high. I think they're very high.

They are high for three reasons.

One, most of the stakeholders, with the notable exception of the insurance companies, have an overwhelming stake in a fundamental change in the way the system functions.

BIDEN: Many of you cover the impact of health care on American businesses. How can they compete? How can American business compete with that ball-and-chain they're dragging in terms of health care costs, competing with -- in an international economy with companies from countries where they have a fundamentally different health care system and it's not all laid on top of them? How can they do that?

Docs -- I never thought I'd live to see the day where medical doctors show up at Democratic functions.

(LAUGHTER)

Docs desperately want health care reform. American business wants health care reform. Hospitals know there's a need for a reform.

Now, obviously, the devil is in the details, but here's the point. I've been around this town a long time as a United States senator. We have never had this many stakeholders invested in the need for a fundamental change in the status quo. And that is a powerful engine all by itself.

And notwithstanding all the scare tactics, the vast majority of the American people still know that the system that exists is not serving them very well. Those who have it are desperately afraid they're going to lose it. Those who have had to dip into it know that their premiums go up without any rhyme or reason in their mind. Small businesses are getting clobbered as a consequence of it.

And so there is a real sense of need.

Those two sort of unarticulated in terms of detail factors I think are the reason why, Strobe, that as bleak as it looks -- you know, always darkest before the dawn -- think about every major change in health care. They passed by a couple of votes, old buddy. They passed by a couple of votes. There weren't a whole lot of Republicans falling over themselves for Medicare. Find the number of people who want to eliminate it in the Republican Party.

There weren't a whole lot of people falling over themselves in the late '30s when -- in the mid-'30s when, you know, Social Security came along, and it only covered widows and orphans at the front end.

BIDEN: So we're going to get something substantial. We're going to get something substantial. It's going to be an awful lot of screaming and hollering before we get there, but I believe we're going to get there.

And I think the president's going to lay out -- I know the president's going to lay out for you, very clearly, on Wednesday, what he thinks those pieces have to be and will be.

But that's as much as I should say, and the president will tell you a lot more on Wednesday.

(LAUGHTER)

Thank you.

(APPLAUSE)

Can I go now?

MODERATOR: You bet.

Good luck to all of us on the 17.5 miles that remain.

And thank you for your leadership, Mr. Vice President.

BIDEN: Thanks, (inaudible).

Thank you, folks.

(APPLAUSE)

END


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