THE PRESIDENT: Thank you. Hello, Reno! Thank you. Thank you so much. Please, everybody have a seat.

It is great to be back here in Reno, great to be back in Nevada. I am thrilled that all of you are here. Weve got some special, special people that I want to acknowledge. First of all, I want to thank Electra Therm for hosting us, and John Fox, the CEO of Electra Therm, is here. (Applause.) Stephen Olson, the president and CFO of Electra Therm. Thank you very much. (Applause.) They just had a chance to meet me backstage and they were describing all the great work that they are doing. I am told the contraption behind me here is known as the Green Machine. Produces renewable energy from low-temperature heat waste. And John and Stephen were explaining to me how it works, and I was nodding, pretending like I understood what they were saying. (Laughter.) Actually, I have no idea how it works, but Im glad it does work. (Laughter.)

And I want to congratulate Electra Therm for being a fine example of a clean energy company thats been growing by leaps and bounds over the last few years. Give yourselves a big round of applause. (Applause.)

In addition, weve got some people who are here. Somebody whos working hard for you, Congresswoman Shelley Berkley is here. (Applause.) Mayor Bob Cashell is here. (Applause.) Lieutenant Governor Brian Krolicki is here. (Applause.) State Controller Kim Wallin is in the house. (Applause.) State Treasurer Kate Marshall is here. (Applause.) Secretary of State Ross Miller is here. (Applause.) Catherine Cortez Masto, Attorney General, is here. (Applause.) Steven Horsford, Senate Majority Leader, is in the house. (Applause.) And John Oceguera, Speaker of the House, is here as well. (Applause.)

Thank you all for your attendance. Last week, I laid out a plan on one of the biggest issues that were going to be facing this year, and that is how to get Americas finances in order -- a plan for shared prosperity through shared responsibility. And before I take some of your questions today, Id like to discuss the plan briefly because it goes to the heart of whats happening at this company and businesses all across America. Its a plan that does two big things. First, it cuts spending and brings down the deficit. It cuts spending and brings down the deficit. And we know how important that is. Just like any family on a tight budget, America has to start living within its means. And for a long time, Washington acted like that rule didnt apply to the federal government. A lot of folks promised us a free lunch. We had a surplus in 2000 -- we had a surplus a decade ago. But we cut taxes -- including for millionaires and billionaires; we fought two wars; we created a new prescription drug plan -- and we didnt pay for any of it. Didnt pay for any of it, just put it on the credit card.

Well, as the saying goes, it turns out there is no such thing as a free lunch. So we were left with a big deficit when I walked into office, and a lot of accumulated debt, and interest on that debt.

And then it was made worse by the worst recession that weve had since the Great Depression. And as many of you know, when you have a huge recession like that, two things happen: On the one hand, revenues go down because companies and individuals arent doing as well so youre not taking in as many taxes. On the other hand, the demands on government are even greater, whether its unemployment benefits, or trying to help states and local governments deal with their shortfalls. And so that added to the deficit as well.

Now, the bottom line is this: If we dont close our deficit, if we dont start reducing our debt, if we dont get our finances, medium and long term, under control, if we keep on spending more than we take in, its going to cause serious damage to our economy. Companies might be less likely to set up shop and hire folks here in Nevada and here in the United States. It could cost us more to take out loans for homes or buying a new car or starting a business. And we wont be able to invest in those critical investments we need to win the future. Those are the kinds of investments that make a company like Electra Therm possible.

So we have to tackle this challenge. And I believe the right way to tackle it is to live up to another old-fashioned principle, which is shared responsibility. That means everybody has to do their part.

First thing weve got to do is to comb through the budget and find every dime of savings that we can, wherever we can find it. And weve made a good start a few weeks ago, when both parties came together -- Republicans and Democrats -- around a compromise on spending that reduced it and kept the government open at the same time. So we need to build on those savings, and Im not going to quit until weve found every dime that we can. Well check under the cushions. But were going to find -- any program thats not working, we need to eliminate it. Anything that can be done more efficiently, we want to do it.

But finding savings in our domestic spending by itself wont be enough; it only gets you so far. So weve also got to find savings in places like the defense budget. I have no greater honor than being the Commander-in-Chief. And when I watch what our young mean and women are doing overseas, its incredible. So I can promise you I will not cut a penny if it undermines our national security. But over the last two years, the Secretary of Defense has taken on wasteful spending that does little to protect our troops or protect our nation -- like old weapons systems that the Pentagon doesnt want, it says we dont need them, but somehow still gets into the budget thanks to well-connected special interests. Secretary Gates has already found $400 billion worth of waste in the Pentagon budget. I think we can find those same kinds of savings again.

Next, were going to need to reduce health care spending, and strengthen Medicare and Medicaid through some common-sense reforms that build on what we already have done with the health care reform bill -- eliminates wasteful subsidies to insurance companies, for example; actually improves care by making it easier for folks to buy generic drugs; helps providers manage care for the chronically ill. And we need to reform the tax code so that its fair and simpler. I know thats on peoples minds. Some of you just had to file, and I know I looked at my bill -- and I have actually done my taxes quite a few times. I admit I dont do them now. (Laughter.) But all of us have gone through the experience of saying this is just too complicated. It doesnt make sense. The amount of taxes you pay shouldnt depend on a high-priced accountant or lawyer that you can hire. It should be fair and simple.

And part of what we have to do with our tax code is also
end some of the tax cuts that were instituted for the wealthiest Americans. (Applause.) Now, I say that not because I want to punish success. Im rooting for everybody to get rich. But I believe that we cant ask everybody to sacrifice and then tell the wealthiest among us, well, you can just relax and go count your money and dont worry about it; were not going to ask anything of you.

Ive been incredibly blessed by this country -- son of a single mom, went on scholarships to get through school. And so the fact that Im now well off, I want to be able to give a little bit something back so that the next generation can achieve that same success. I dont need additional tax cuts, especially when I know that extending those tax cuts may end up meaning that some senior citizens are getting less health care; or thousands of kids on Head Start might not have that opportunity available to them; or people who are on Medicaid, seniors who are in nursing homes, or families who have got a child whos autistic or disabled, that somehow theyre left to fend for themselves. Thats not a good option, from my perspective. Thats not a trade-off Im willing to make.

And I dont believe its a trade-off that most Americans are willing to make -- no matter what party you belong to. Thats not who we are as a country. We are better than that. We dont allow people who are vulnerable just to sink further and further without giving them a little bit of a hand up. Its part of what has made this country great.

So thats the first part of our plan. Were going to cut spending in a way thats fair and asks everybody to share responsibility. Were going to reform our tax code. But heres what else we need to do, weve got to make sure that even as were living within our means, even as government is not spending more than its taking in, that were still investing in the future; were still strengthening the middle class; were still growing the economy and putting people back to work. (Applause.)

So were going to make some cuts in some programs, including some that I like and if we were in better fiscal shape wed keep on funding, but Im telling you what were not going to do. Were not going to reduce our deficit by gutting our investment in clean energy and medical research and basic science. I refuse to make that choice. (Applause.)

America has always been the worlds engine for innovation, the leader in discovery. Thats who we are. Thats how weve prospered. I dont want other countries to get the lead in the industries of tomorrow; I want America to lead in these industries. I want new technologies invented here. I want companies like Electra Therm to set up shop here in America and to hire American workers and build American products. Thats the future that we deserve. (Applause.)

Lets just take the example of energy. Think about it, everybody right now is dealing with $4 a gallon at the pump. Now, I admit Secret Service doesnt let me fill up my own tank now. (Laughter.) But I remember before I was President the last time gas prices went up this high -- its tough.

And if youre somebody whos got to drive 20 miles, 30 miles to a job, and maybe you dont have the money to buy a new car that gets better gas mileage, so you got that old beater. Its eight miles a gallon, and -- you know? (Laughter.) Ive been there. (Laughter.)

It hurts because you know every time you go to work a big chunk of your paycheck is being eaten up. And you might already be having trouble making ends meet at the end of the month. So this gas issue is serious. But heres the problem -- every time it happens, every time gas prices go up like this, like clockwork, suddenly politicians look around and they discover high gas prices. And theyre shocked, and they get in front of TV and they say, weve got a three-point plan to bring gas down to two bucks a gallon. And then when gas prices go down, nothing ever happens, and were back into the same old patterns, and we dont have a comprehensive energy strategy for the future.

Now, there are some things that we can do right now. Last month I asked my Attorney General to look into any cases of price gouging so we can make sure nobody is being taken advantage of at the pump. Today, Im going to go a step further. The Attorney General is putting together a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators. Were going to make sure that nobody is taking advantage of American consumers for their own short-term gain. (Applause.)

And while were at it, if were looking for places to save money that we can then use to invest in clean energy projects like Electra Therm, lets start with the $4 billion in taxpayer subsidies that right now are going to big oil companies even though they are making billions of dollars a year as it is because of these high oil prices. (Applause.) Four billion dollars a year are going to companies that are making record profits -- even during the recession they were making big profits.

The big five oil companies over the last five years, the least theyve made in profits is $75 billion. The most theyve made is $125 billion. They are doing fine. And we are encouraging production. We are working to make sure that there are safe and secure ways for us to drill for more oil, develop more natural gas. We are all for production in a safe way. But these folks dont need further incentives by getting a better deal than the mom-and-pop shop down the street are getting when it comes to their taxes. They shouldnt get special tax breaks worth $4 billion that we could invest someplace else. That doesnt make sense. Its got to stop.

Instead of subsidizing yesterdays energy sources, lets invest in tomorrows. (Applause.) Some in Congress have proposed slashing by 70 percent our investment in clean energy. Im not going to do that. I was talking to John about the fact that the investment made by the Department of Energy helped Electra Therm do what its doing -- helped it expand, helped it hire more workers. Why are we going to stop making investments in companies like this?

Were also not going to reduce our deficit by sacrificing investments in infrastructure. You know, America used to have the best roads, the best bridges, the best trains, the best airports, the best ports. Thats part of what made us great. Thats part of why businesses wanted to locate here -- they could move businesses -- or they could move products, services, information. We dont have the best infrastructure anymore. Our roads and bridges are deteriorating.

Remember what happened in Minnesota when that bridge just collapsed? There are bridges like that all across the country. Our sewer systems, our water systems are not where they need to be. And thats the old infrastructure. What about the new infrastructure? You go to Beijing Airport, it is unbelievable. You go to some of ours, it was built back in the 50s.

We dont have high-speed rail in this country. Why not? Every other advanced country has got it. It works. We can do this.

If we want businesses to locate here in America and create jobs, weve got to make sure that America is built to compete. Weve got to have the best roads and the quickest trains and the best broadband networks so we can move information around. (Applause.) We dont want to be dodging potholes for the next 30 years. Lets put some people to work doing the work that America needs done.

And if were going to reduce our deficit, were not going to do it by cutting education. (Applause.) Were not going to do it by cutting education. This is another bright idea that some in Congress have. In a world where our kids are going to be facing tougher competition than ever before, where youve got hundreds of millions of Chinese kids and Indian kids and Brazilian kids and Eastern European kids, all who are trying to compete for the jobs of tomorrow, how are we not going to invest in making sure our kids have the best skills possible?

We see why this matters right here. More than 50,000 college students from Nevada are relying on Pell Grants to help them pay their tuition. Now, working with folks like Shelley, we were able to eliminate some subsidies that were going to big banks because they were middlemen on student loan programs, and take that money and put more money into Pell Grants so that the grants were higher, so that more kids could get them and theyd have less debt when they graduate. That was the right thing to do. (Applause.) Now youve got some folks in Congress who want to roll back some of those changes. How many of those students do you think can afford to pay $1,000 more to go to school? I know what its like. I could not have made it through college without scholarships, without loans.

Im standing here before you because America gave me opportunity. How am I going to pull up the ladder on the next generation of kids who are just as talented, smarter than I am? (Applause.) All they need is a chance. So I think it would be a mistake to balance the budget on the backs of students by cutting their scholarships by more than $1,000 and forcing a whole lot of students to go without them altogether.

So thats the bottom line. We need to cut spending. We cant ignore future deficits. But just as ignoring deficits would mortgage our future, failing to invest in our kids, in our infrastructure, in our basic research and clean energy, that would be mortgaging our future as well. And Im not willing to do it. And thats at the core of the debate that were having right now.

Both Democrats and Republicans agree that we need to cut the deficit. In fact, there is general agreement on the need to cut about $4 trillion over the medium term to hit our targets. And when folks in Washington agree on anything thats quite an accomplishment. (Laughter.) So the debate isnt about whether to cut the deficit, the debate is about how we cut the deficit. And my view is we can live within our means while still investing in our future. We can take a balanced approach, cutting where we can while investing in education and innovation and infrastructure, strengthening the safety net of Medicare and Medicaid to make sure that theyre there for future generations.

And I think that Democrats and Republicans can come together to solve this problem. It has been done before. (Applause.) It wont be easy. There will be some strong disagreements. Im willing to bet that along the way some politics will be played. (Laughter.) Thats just a guess. And there will be some who say, you know what, the country is just too divided, were not going to get it done. But Im optimistic. Im hopeful. Im confident that we can come together.

And heres why this is so important. Ultimately, this debate is not just about numbers on a page. Its about the vision we have for our future -- who we are as a country. Its about making sure that the most you can do here is not just live out your own American Dream, but make sure that the people around you are living out their American Dream as well.

We want to make sure this is a country where if youre willing to try hard you can make it, where everybody has a chance at prosperity. Thats my focus, thats my guiding light. Its what I think about when I wake up in the morning and go down to the Oval Office. Thats what I think about when I leave the Oval Office and go to bed at night. And thats why Im going to need the help of all of you. I dont want you to be bystanders in this debate. I want you to hold me accountable. I want you to hold Washington accountable. I hope you will hold all of our feet to the fire, because youve got a big stake in this fight. And if your voices are heard, we will meet this challenge. Thats how were going to secure our future; thats how were going to make our country everything that it can be.

Thank you very much, everybody. (Applause.)

All right, everybody, have a seat. Ive got a little time for questions. Ill take off my jacket, because I know Im in the hot seat here. Weve got some folks in the audience with microphones, so if you just raise your hand I will call boy, girl, boy, girl -- (laughter) -- make sure its fair. And Ill try to get through as many questions as I can.

This gentleman right here. Here, heres a microphone. Introduce yourself, if you dont mind.

Q Hi, my name is Howard Crabtree (ph). And I go to the TMCC school right now, just trying to get an education after we lost our -- my wife and I lost our jobs here.

So I entered the renewable energy program, and the more and more I learn about energy and the policies and things, I wonder what -- is the federal government doing anything to encourage the states, because I know the states really control it -- are they doing anything to encourage the states to open the market up so that there are more competitors in the market to bring prices down? I know that Ive only ever had NV Energy as a choice.

THE PRESIDENT: Well, I am not fully familiar with what Nevadas state regulatory structure is, Ill admit. But let me make some general points about how we can start creating not only more competition, but also more innovation in the energy sector.

When it comes to electricity, the traditional sources that we get electricity from are coal, natural gas, and some nuclear. Thats typically the menu from which we get most of our electricity production at most of the big utilities. And the advantage, particularly of coal, is that its been very cheap. We are the Saudi Arabia of coal. Weve got a lot of coal.

But each of these fossil fuels that we use have some problems, particularly with pollution. And coal, in particular, in some of these old plants create a lot of particulates that go into the atmosphere and create all kinds of problems in terms of asthma, and its also having an impact on the climate overall.

Nuclear doesnt produce greenhouse gases, but weve got problems in terms of storing waste. And obviously were heartbroken by whats happened in Japan, and thats raising questions about the safety of the existing storage mechanisms. And I know obviously theres a big debate here in Nevada about Yucca Mountain.

Natural gas -- we actually have a lot of natural gas available, but getting to it has historically been a little bit difficult, and so now were developing new technologies for that.

But when you think about whats going to be sort of our future electricity sources, I want to make sure that we are also the frontrunners, the leaders, when it comes to solar, when it comes to wind, when it comes to waste heat -- (laughter) -- geothermal, right? So there are a whole range of additional energy sources that were just not tapping into, and thats what a company like Electra Therm is all about.

Now, the question for Electra Therm is -- or any of these companies that are innovating -- is, is there enough demand out there that they can start building to scale, they can start making the capital investments that allow them to catch up with these older ways of producing electricity that had a 50-year head start? Right? I mean, if you built an old coal plant 30, 40 years ago, well, its -- whatever money you put into it, thats already sunk costs, and now youre producing electricity that may be relatively cheap, but its also relatively dirty. And the question is, how do we make sure that new companies with newer, cleaner technologies are able to catch up?

So one of the things that weve proposed is whats called a clean energy standard. Its a very simple concept. What it says is, the country, state by state, will purchase a certain amount of energy from these alternative sources. So were not saying that immediately you shut down the old plants, because, frankly, we couldnt. I mean, the economy needs a certain amount of electricity just to run our businesses and do everything that we do. But if we set a target and we say heres the amount of alternative energy that is going to be purchased every year, then suddenly all these companies out here start saying, you know what, Ive got some certainty. I know that if I invest in building a new plant that Im going to be able to sell that electricity.

And that changes the economic incentives, and then the market can sort out which ones are the best -- whos got the best company, whos got the best technologies, et cetera. Its not the government saying -- picking winners and losers, its just saying get a certain amount from this option, this array of options of clean energy. That can make a huge difference.

Now, in addition to doing that, the other thing that we really have to do is make sure that as an economy, as a society, we just become more energy efficient generally. And thats a lot of what Electra Therm is all about. Theyre capturing -- when youre talking about waste heat, every business, every industry, is generating some sort of energy byproduct, some sort of heat; its going up in smoke stacks and nobody is using it. And the question is, can we capture that energy and use it in a smart way? Thats what Electra Therm is all about.

But we waste energy everywhere -- schools, hospitals, our homes. When we dont insulate our houses, when we dont have the kinds of windows that are properly insulated, when our air conditioning systems are all old and creaky and make a lot of noise -- energy is being dissipated everywhere. Now, I think most people understand that, but the problem is that you might not have a couple thousand bucks initially to insulate your home. You dont have that kind of spare change lying around. Even though if you made the investment youd get the money back in three or four or five years, you may not be able to make that investment on the front end.

So one of the things that were doing, both for homeowners, but also increasingly for commercial buildings, we want to give you some incentives where we say, you know what, you buy that insulation, you make your home more energy efficient, well give you a tax break. Or we say to companies, youre going to make your building more energy efficient, we will give you some money on the front end and then you can pay it back by the savings that you get on your electricity bill every month. So a combination of creating a market for clean and alternative energy, and also providing incentives to consumers to be more energy efficient -- you combine those two things, theres no reason why we cant have a brighter energy future. But it does require some investment from the federal government. Thats why Im not willing to see our investment in clean energy slashed by 70 percent, and thats part of the debate that were having in Washington right now. All right? (Applause.)

Okay, this young lady right there. Go ahead. You got the microphone right here.

Q Jill Derby (ph). Im an educator whos fighting educational cuts in Nevada that will slash our education budget. (Applause.)

THE PRESIDENT: Okay, Jill.

Q But my question is about health care reform. I would say all of us in this room understand that the health care reform act that you championed and was passed is critical for the whole country, but somehow the opposition got the message ahead of us and now there isnt widespread support. I want to know what you and others are doing to turn that around to help people realize how important that reform act is. (Applause.)

THE PRESIDENT: Well, first of all, I appreciate the support and I appreciate the work youre doing on education. It turns out that when Social Security was passed, initially it was really unpopular, and all kinds of lawsuits were brought against Social Security. And people said we were going socialist. Sound familiar? (Laughter.) And now everybody loves Social Security, because once the program got up and running, people understood, you know what, this provides a basic floor, a baseline, so if something goes wrong in my life, even though Im doing all the responsible things, even though Im saving, Im working hard every day, Im looking out for my family, Im doing what Im supposed to do -- if at the end, somehow, things didnt work out the way I planned, Ive still got this baseline of savings.

Then, when Medicare was passed in the middle 60s, low and behold, it turns out it was very controversial. And everybody said this is socialized medicine, and there were efforts to repeal it. And then once it got up and running, lo and behold, people said, you know what, its a good thing that our senior citizens now, if they dont have the health care that they need, they dont have money, they have something to count on so that if they get sick theyve got some support.

And I make that point just to say that every time we make a change like this, there are some folks who say no. And ordinary folks who arent following the debate, all they hear is a lot of arguing; it makes folks uncertain about, well, is this thing actually going to work or not.

The big thing that we need is the three years that we designed to implement the plan. Now, were already making progress. There are already changes that are benefiting you right now. Everybody whos sitting here right now, whether you know it or not, youre being benefited by the health care reform that we passed. If youve got a child who graduated from college, doesnt yet have a job that provides health insurance, you can keep that child on your health insurance until theyre 26 years old. (Applause.) If youre a parent whose child has a preexisting condition, you now have to be able to get health insurance. An insurance company cannot turn you down from getting health insurance for that child. (Applause.)

Right now, insurance companies cant drop you when you get sick. They cant impose arbitrary lifetime limits so that if you really get sick and you really need it, you dont find out right in the middle of treatment it turns out that youve already hit your limit and theres no more money left and youre on your own.

So weve already implemented a wide range of reform. Small businesses are eligible right now for huge tax breaks about a third of what small businesses pay for their employees to provide them health care, now they can deduct from their taxes. And that can save tens of thousands or even hundreds of thousands on their health care bills. Thats already going on right now.

Senior citizens, youre getting a $250 rebate on your drugs because of the health care bill. And by the time weve fully implemented it, that doughnut hole that used to be there, where if you got sick, youd pay -- Medicare would pay only up to a certain point, and then suddenly you had to pick it up in your own pocket because of that doughnut hole, thats going to be fully closed. So we are making all sorts of reforms right now.

But the big change comes in 2014 when were working with states, including Nevada, to set up a system so that you can be part of a big pool if youre on your own, if your employer doesnt provide you health insurance. You can be part of a big pool with all that purchasing power to get the same health care that Shelley Berkley and other members of Congress get for themselves at reduced prices and higher quality. (Applause.)

The other thing that we did in health care reform bears on what I was talking about earlier, which is our deficit reduction. We were giving -- we were giving about $180 billion worth of subsidies to insurance companies under the Medicare program. It wasnt making seniors healthier, but it was making the profit margins for those insurance companies a lot healthier.

And we said, you know what, youre doing just fine without those subsidies. We are saying to providers, lets make some changes so instead of having multiple tests for one patient, lets have one test and then email all the tests through electronic medical records to the specialists that need to work with them. That saves us money.

Twenty percent of the sick account for 80 percent of the costs under Medicare -- typically the chronically ill, folks who have diabetes, for example. So why not reimburse providers to help manage the illnesses of the chronically ill? That will save us money.

So part of what were doing is providing care for people. Part of what were doing is making sure that you as a consumer of health insurance are getting a fair deal for insurers. But part of what were doing also is making the overall system more efficient. And thats how well save money in the long term.

Thats the big debate that were having about Medicare as part of this budget. There has been a proposal -- it passed through Congress -- that would essentially make Medicare a voucher system. Essentially what Medicare would become is youd get a certain amount of money and then you could use that money to buy health insurance on the private marketplace. But guess what. If health inflation keeps on going up, youre out of luck. If the insurance that you buy isnt good enough to cover you, too bad.

So what weve said is, no, were not going to change Medicare as we know it. What we will do is work inside of Medicare to make sure that providers -- the health care system as a whole is more efficient. We think thats the better way to go. (Applause.) And I think most folks on Medicare do, too.

All right, lets see. Gentleman back there -- right there. Yes.

Q John Galbraith, Geothermal Resources Council. Mr. President, we applaud and commend you for supporting clean, green, renewable, 24-hour baseload energy. Please describe your thoughts going forward. Can we expect the same?

THE PRESIDENT: You can expect the same. We want to keep on giving the same incentives for clean alternative energies. We want to make sure that, for example, the tax credits that are in place, that we make those permanent so that folks arent always in a guessing game each year as to whether or not theyre going to be there for you.

We think that needs to be part of a overall, comprehensive energy package. And I was talking earlier about electricity generation, but obviously whats on the minds of a lot of folks right now are gas prices. Let me just make this point: One of the key ways were going to get gas prices down is just to use less oil. Right? If you buy less, prices go down. (Applause.)

The best way for us to reduce usage is in the transportation sector. So a couple of things that were doing already: Number one, we increased fuel-efficiency standards on cars last year for the first time in 30 years. First time in 30 years. Its going to save us 1.8 billion barrels of oil. And by the way, we didnt do it through legislation. We got the car companies, autoworkers, environmental groups -- we got everybody to agree that this made sense for America. So thats point number one.

Point number two is we want a million electric cars on the road. (Applause.) Over the next several years, we want to develop electric cars and make them affordable for everybody. And Detroit is now making some good electric cars; the problem is theyre still too expensive. A couple of things are involved in that. One is the technology for batteries is still not as developed as it needs to be. But heres the good news: We used to have 2 percent of the market for advanced batteries that go into electric cars; we are going to have 40 percent in five years because of the investments we made with the Recovery Act. Were going to have -- 40 percent of those batteries are going to be made here in the United States of America. (Applause.)

There is no reason why we cant get cars out there that are getting 150 miles per gallon. Weve got the technology for it; weve just got to keep on investing it and developing it. And so one example of how we can really make a difference -- it turns out as President Ive got a lot of cars in my fleet. (Laughter.) The federal government has the biggest fleet of automobiles of anybody, any organization. So what weve said is lets make our fleet 100 percent alternative-fuel cars. (Applause.)

And what that does, that creates a big market for American-made cars that are efficient. (Applause.) It puts people to work, but it also helps us free ourselves from dependence on foreign oil.

And now what were doing -- I was just over at a UPS facility in Maryland. Weve gotten Federal Express, Verizon, AT&T -- there are a bunch of companies now that are joining together, and theyre doing the same thing with their truck fleets. So part of what this is all about is just creating a market.

And once you create a market -- let me tell you, I have driven that -- I didnt -- when I say drove, they let me drive like five feet. (Laughter.) They didnt really let me zip around there. But Ive been in one of these Chevy Volts. That is a nice car. It drives really well.

And so the question is can we start getting enough demand that prices go down. And think about it, I mean, it used to be having a flat-screen TV was a big deal, right? Now, everybody is going into Best Buy -- because it was such big volume that prices started going down. Same thing with all technology. Its no different in the transportation sector. We can drive prices down, we just have to make sure that theres enough demand out there for them.

So for all of you out there who are still driving those eight-mile-a-gallon, big SUVs, some of you -- thats the car you got to drive right now, you cant afford a new car, but when you do decide to buy a new car, think about the fact that were putting a whole bunch of money into the pockets of some folks in some cases who dont like us at all.

We send billions of dollars to other countries, some of whom do not like us at all. Were just giving away our wealth. That makes no sense, and its got to change, and were going to change it. So -- all right. (Applause.)

Its a young ladys turn. Right here, in the red. Right in front. You got a microphone coming.

Q Mr. President, my name is Courtney Miller (ph). And I want to thank you for returning science to the national priority. And I need to ask for some help for my family. My husband has chronic fatigue syndrome, which is an illness very much like multiple sclerosis. And we spend billions of dollars in this country on roughly a million patients for disability and Medicare and lost tax revenue and lost productivity, and we spend less than $6 million for NIH research on this illness. And Im asking you for my husband and my kids, who want their father to be able to go to their baseball games, if theres a way to make improvements on that.

THE PRESIDENT: Well, let me, first of all, say that you are absolutely right that weve tried to put science back where it belongs. (Applause.) I am a Christian and a person of faith, and I believe that God gave us brains to figure things out -- (applause) -- and that weve got to use science to make life better for our families and our communities and this planet.

Thats one of the reasons why part of the Recovery Act was reinvesting in National Institute of Health -- NIH -- which does a huge amount of the basic medical research that ends up then creating so many of the scientific advances that are making our lives longer and making our lives better.

Now, I will confess to you that, although Ive heard of chronic fatigue syndrome, I dont have expertise in it. But based on the story that you told me, what I promise I will do when I get back is I will have the National Institute of Health explain to me what theyre currently doing and start seeing if they can do more on this particular ailment. Okay? (Applause.)

Gentleman there, back there with the beard. Thats you. Oh, actually, I was calling on this guy with the beard, but I -- (laughter.) Thats all right, go ahead.

Q Hi, Im Will Adler (ph). Im a student at UNR. And currently we are facing millions -- millions in cuts. And you mentioned higher education earlier. I think its the most important thing for Americas future in general, and Im just worried, with the rhetoric nowadays, that -- the word tax is like the most evil word on Earth now. So our state in particular cannot raise enough revenues to support our higher education. I was wondering how we can change that rhetoric and get more funding in the state level and federal to support our education for the future. (Applause.)

Thank you very much, Mr. Obama. I love you, by the way. I voted for you.

THE PRESIDENT: Well, first of all, something that a lot of folks may not be aware of, you hear people say, oh, the stimulus didnt work, the stimulus didnt work, the recovery didnt work. Well, you know what, we had a terrible recession and shed so many jobs so fast that we had lost 4 million jobs before I came into office. We lost another 4 million probably in the first six months that I was in office, before any of my economic policies took effect. So we had a big hole we dug.

But when you look at the Recovery Act, about a third of it was direct support to state budgets. About a third of it was tax cuts -- your taxes all got cut by the Recovery Act. Nobody knew it, and I dont blame folks for not knowing it because it was happening paycheck for paycheck so the increments were relatively small each month and a lot of folks -- if you saw your hours cut back or you had lost your job, you might not have felt it. But we cut taxes. That was about a third.

About a third of it was infrastructure investment. And about a third of it was support to states. And by the way, some of these same governors who go on TV denouncing the Recovery Act, the stimulus, they took that money. (Laughter and applause.) And they used it to close their state budget deficits. Im just saying. (Laughter.) It is funny, sometimes youre watching TV and you say, hold on a second. (Laughter.) That guy right there, he took that check. (Laughter.) And he used it to balance his budget, and then he starts getting on TV complaining about how irresponsible we are. What are you talking about? Its not on the level sometimes.

But what happened as a consequence was for two years we were able to prevent some of the worst choices that states might have to make about laying off teachers and police officers and firefighters and so on.

Now the economy is growing again and state revenues are getting a little bit better. But I understand here in Nevada, the economy has been the slowest to recover because this is also where the housing boom was hottest. So thats put bigger strains on the budget here than just about anywhere.

So I recognize that a state like Nevada has to make tough choices. I just think it is very important in making those choices not to be shortsighted. If youre a family and youve got to tighten your belt, you might cut out eating out. You might say, you know what, we cant afford that vacation this year. But youre not going to decide not to replace the boiler if it has to be replaced. Youre not going to decide not to fix a hole in the roof, because you know if it starts raining its going to ruin the house. Youre not going to say, were going to use up all the savings we had for our kids college education and still go on vacation. Right? Youre going to prioritize.

Thats what we have to do at the federal level, and thats what we have to do at the state level. And I dont think there is a more important priority than education. (Applause.)

Now, I think its important that our education system is efficient like every other system. So universities -- Ive said to universities, try to figure out how you can reduce costs for students. Dont just ask for more money. You should also look at your operations to figure out are there ways that you can make it a better bargain for your kids. Because theyve got to pay for it, or somebody has got to pay for that tuition.

I mean, look, Im a big supporter of state colleges and universities having nice facilities, but you go to some of these gyms and some of these athletic facilities -- Im thinking, this is really nice. Shoot, I wouldnt mind being a member of this club.

And Ive got to tell you, when I was going to college -- Im showing my age now where you start when I was back in my day -- but its true, like the cafeteria was horrible. The food was bad. You didnt expect to get good food when you went to college. You go to the gym, it had some old rusty weights, a medicine ball. You didnt have some gleaming state-of-the-art.

Im just using those as examples. There are ways that universities have to cut costs as well. But ultimately weve got to make sure that were not cutting education unnecessarily. And youre right. In some cases, revenue is going to be necessary.

Now, how many people here know that not only did we cut your taxes when I first came into office, but back in December we just cut your taxes again? How many folks are aware of that? (Applause.) I mean, you wouldnt know it from watching TV. You would think I was just out there raising everybodys taxes. Just these big-spending Democrats out there -- we havent raised your taxes; weve lowered your taxes. Because it was important during the recession to make sure that middle-class families were able to land on their feet.

And thats actually helping absorb some of the increased costs of gas prices and food prices that are out there right now, and helping to sustain consumer spending to keep the economy growing.

But at a certain point, as the economy begins to grow again, as people are getting back on their feet, weve got to go back and say to ourselves, you know what, theres no such thing as a free lunch. Taxes are lower now than they have been in a generation. Taxes are a lot lower now than they were under Ronald Reagan. Theyre lower than they were under Bill Clinton. Theyre lower than they were under George Bush, in many cases.

And what Ive said is, at minimum, we should say, for those like myself who can afford it, lets pay a little bit more. Lets go -- we can go back -- if we went back to the Clinton rates for the wealthiest 2 percent, going back to the Clinton rates -- you remember back in the 90s, the economy was doing really well, and rich people were doing just fine. And I can afford it. Its not that I like paying taxes. I dont like paying taxes. Nobody likes paying taxes. But if the choice is keeping my tax break, or 33 seniors having to pay an extra 6,000 bucks for their Medicare, why would I want that -- why would I wish that on those 33 seniors? If the choice is between me keeping my tax cut and a couple hundred kids being to go get their Head Start, why would I want that?

This isnt a matter of charity; its a matter of what we think it is to live in a good society. And I think it is good for me, it is good for my life if when Im driving around, Im saying to myself, you know what, that school is producing all kinds of kids who are smart and are going to help build Americas future.

And I drive around and I see some seniors, and theyre out for a walk. And I know, you know what, Im glad that I live in a country where in their retirement years, theyre going to be secure. That makes me feel good. Thats the kind of country I want to live in. (Applause.) Thats the kind of country you want to live in. And weve got to make sure were willing to fight for it.

Everybody, thank you very much. God bless you. (Applause.)

END 12:50 P. M. PDT