First Presidential Debate Obama vs. Romney (Complete HD - Quality Audio)

JIM LEHRER: Good evening from the Magness
Arena at the University of Denver in Denver, Colorado. I'm Jim Lehrer of the PBS NewsHour,
and I welcome you to the first of the 2012 presidential debates between President Barack
Obama, the Democratic nominee, and former Massachusetts Governor Mitt Romney, the Republican
nominee. This debate and the next three  two presidential,
one vice- presidential  are sponsored by the Commission on Presidential Debates. Tonight's 90 minutes will be about domestic
issues, and will follow a format designed by the commission.

There will be six roughly
15-minute segments, with two-minute answers for the first question, then open discussion
for the remainder of each segment. Thousands of people offered suggestions on
segment subjects of questions via the Internet and other means, but I made the final selections,
and for the record, they were not submitted for approval to the commission or the candidates. The segments, as I announced in advance, will
be three on the economy and one each on health care, the role of government, and governing,
with an emphasis throughout on differences, specifics and choices. Both candidates will
also have two-minute closing statements.

The audience here in the hall has promised
to remain silent. No cheers, applause, boos, hisses  among other noisy distracting things
so we may all concentrate on what the candidates have to say. There is a noise exception
right now, though, as we welcome President Obama and Governor Romney. (Cheers, applause.) Gentlemen, welcome to you both.

Let's start the economy, segment one. And
let's begin with jobs. What are the major differences between the two of you about how
you would go about creating new jobs? You have two minutes  each of you have two
minutes to start. The coin toss has determined, Mr.

President, you go first. PRESIDENT BARACK OBAMA: Well, thank you very
much, Jim, for this opportunity. I want to thank Governor Romney and the University of
Denver for your hospitality. There are a lot of points that I want to make
tonight, but the most important one is that 20 years ago I became the luckiest man on
earth because Michelle Obama agreed to marry me.

(Laughter.) And so I just want to wish,
Sweetie, you happy anniversary and let you know that a year from now, we will not be
celebrating it in front of 40 million people. (Laughter.) You know, four years ago we went through the
worst financial crisis since the Great Depression. Millions of jobs were lost. The auto industry
was on the brink of collapse.

The financial system had frozen up. And because of the resilience
and the determination of the American people, we've begun to fight our way back. Over the last 30 months, we've seen 5 million
jobs in the private sector created. The auto industry has come roaring back and housing
has begun to rise.

But we all know that we've still got a lot of work to do. And so the
question here tonight is not where we've been but where we're going. Governor Romney has
a perspective that says if we cut taxes, skewed towards the wealthy, and roll back regulations
that we'll be better off. I've got a different view.

I think we've got
to invest in education and training. I think it's important for us to develop new sources
of energy here in America, that we change our tax code to make sure that we're helping
small businesses and companies that are investing here in the United States, that we take some
of the money that we're saving as we wind down two wars to rebuild America and that
we reduce our deficit in a balanced way that allows us to make these critical investments. Now, it ultimately is going to be up to the
voters, to you, which path we should take. Are we going to double down on the top-down
economic policies that helped to get us into this mess, or do we embrace a new economic
patriotism that says, America does best when the middle class does best? And I'm looking
forward to having that debate.

MR. LEHRER: Governor Romney, two minutes. MR. ROMNEY: Thank you, Jim.

It's an honor
to be here with you, and I appreciate the chance to be with the president. I am pleased
to be at the University of Denver, appreciate their welcome and also the presidential commission
on these debates. And congratulations to you, Mr. President,
on your anniversary.

I'm sure this was the most romantic place you could imagine here
here with me, so I  (laughter)  congratulations. This is obviously a very tender topic. I've
had the occasion over the last couple of years of meeting people across the country. I was
in Dayton, Ohio, and a woman grabbed my arm, and she said, I've been out of work since
May.

Can you help me? Ann yesterday was a rally in Denver, and a
woman came up to her with a baby in her arms and said, Ann, my husband has had four jobs
in three years, part-time jobs. He's lost his most recent job, and we've now just lost
our home. Can you help us? And the answer is yes, we can help, but it's
going to take a different path, not the one we've been on, not the one the president describes
as a top-down, cut taxes for the rich. That's not what I'm going to do.

My plan has five basic parts. One, get us
energy independent, North American energy independent. That creates about four million
jobs. Number two, open up more trade, particularly in Latin America; crack down on China if and
when they cheat.

Number three, make sure our people have the skills they need to succeed
and the best schools in the world. We're far away from that now. Number four, get us to
a balanced budget. Number five, champion small business.

It's small business that creates the jobs
in America. And over the last four years small-business people have decided that America may not be
the place to open a new business, because new business startups are down to a 30-year
low. I know what it takes to get small business growing again, to hire people. Now, I'm concerned that the path that we're
on has just been unsuccessful.

The president has a view very similar to the view he had
when he ran four years ago, that a bigger government, spending more, taxing more, regulating
more  if you will, trickle-down government would work. That's not the right answer for
America. I'll restore the vitality that gets America working again. Thank you.

MR. LEHRER: Mr. President, please respond
directly to what the governor just said about trickle-down  his trickle-down approach.
He's  as he said yours is. PRESIDENT OBAMA: Well, let me talk specifically
about what I think we need to do.

First, we've got to improve our education
system. And we've made enormous progress drawing on ideas both from Democrats and Republicans
that are already starting to show gains in some of the toughest-to- deal-with schools.
We've got a program called Race to the Top that has prompted reforms in 46 states around
the country, raising standards, improving how we train teachers. So now I want to hire
another hundred thousand new math and science teachers and create 2 million more slots in
our community colleges so that people can get trained for the jobs that are out there
right now. And I want to make sure that we keep tuition low for our young people.

When it comes to our tax code, Governor Romney
and I both agree that our corporate tax rate is too high. So I want to lower it, particularly
for manufacturing, taking it down to 25 percent. But I also want to close those loopholes that
are giving incentives for companies that are shipping jobs overseas. I want to provide
tax breaks for companies that are investing here in the United States.

On energy, Governor Romney and I, we both
agree that we've got to boost American energy production. And oil and natural gas production are higher
than they've been in years. But I also believe that we've got to look at the energy source
of the future, like wind and solar and biofuels, and make those investments. So, all of this is possible.

Now, in order
for us to do it, we do have to close our deficit, and one of the things I'm sure we'll be discussing
tonight is, how do we deal with our tax code, and how do we make sure that we are reducing
spending in a responsible way, but also how do we have enough revenue to make those investments?
And this is where there's a difference because Governor Romney's central economic plan calls
for a $5 trillion tax cut, on top of the extension of the Bush tax cuts, so that's another $2
trillion, and $2 trillion in additional military spending that the military hasn't asked for.
That's $8 trillion. How we pay for that, reduce the deficit and make the investments that
we need to make without dumping those costs on the middle-class Americans I think is one
of the central questions of this campaign. MR. LEHRER: Both of you have spoken about
a lot of different things, and we're going to try to get through them in as specific
a way as we possibly can.

But first, Governor Romney, do you have a
question that you'd like to ask the president directly about something he just said? MR. ROMNEY: Well, sure. I'd like to clear
up the record and go through it piece by piece. First of all, I don't have a $5 trillion tax
cut.

I don't have a tax cut of a scale that you're talking about. My view is that we ought
to provide tax relief to people in the middle class. But I'm not going to reduce the share
of taxes paid by high- income people. High-income people are doing just fine in this economy.
They'll do fine whether you're president or I am.

The people who are having the hard time right
now are middle- income Americans. Under the president's policies, middle-income Americans
have been buried. They're  they're just being crushed. Middle-income Americans have
seen their income come down by $4,300.

This is a  this is a tax in and of itself. I'll
call it the economy tax. It's been crushing. The same time, gasoline prices have doubled
under the president, electric rates are up, food prices are up, health care costs have
gone up by $2,500 a family.

Middle-income families are being crushed.
And so the question is how to get them going again, and I've described it. It's energy
and trade, the right kind of training programs, balancing our budget and helping small business.
Those are the  the cornerstones of my plan. But the president mentioned a couple of other
ideas, and I'll just note: first, education. I agree, education is key, particularly the
future of our economy.

But our training programs right now, we got 47 of them housed in the
federal government, reporting to eight different agencies. Overhead is overwhelming. We got
to get those dollars back to the states and go to the workers so they can create their
own pathways to getting the training they need for jobs that will really help them. The second area: taxation.

We agree; we ought
to bring the tax rates down, and I do, both for corporations and for individuals. But
in order for us not to lose revenue, have the government run out of money, I also lower
deductions and credits and exemptions so that we keep taking in the same money when you
also account for growth. The third area: energy. Energy is critical,
and the president pointed out correctly that production of oil and gas in the U.S.

Is up.
But not due to his policies. In spite of his policies. Mr. President, all of the increase
in natural gas and oil has happened on private land, not on government land.

On government
land, your administration has cut the number of permits and license in half. If I'm president,
I'll double them. And also get the  the oil from offshore and Alaska. And I'll bring
that pipeline in from Canada.

And by the way, I like coal. I'm going to
make sure we continue to burn clean coal. People in the coal industry feel like it's
getting crushed by your policies. I want to get America and North America energy independent,
so we can create those jobs.

And finally, with regards to that tax cut,
look, I'm not looking to cut massive taxes and to reduce the  the revenues going to
the government. My  my number one principle is there'll be no tax cut that adds to the
deficit. I want to underline that  no tax cut that
adds to the deficit. But I do want to reduce the burden being paid by middle-income Americans.
And I  and to do that that also means that I cannot reduce the burden paid by high-income
Americans.

So any  any language to the contrary is simply not accurate. MR. LEHRER: Mr. President.

PRESIDENT OBAMA: Well, I think  let's talk
about taxes because I think it's instructive. Now, four years ago when I stood on this stage
I said that I would cut taxes for middle-class families. And that's exactly what I did. We
cut taxes for middle-class families by about $3,600.

And the reason is because I believe
we do best when the middle class is doing well. And by giving them those tax cuts, they had
a little more money in their pocket and so maybe they can buy a new car. They are certainly
in a better position to weather the extraordinary recession that we went through. They can buy
a computer for their kid who's going off to college, which means they're spending more
money, businesses have more customers, businesses make more profits and then hire more workers.

Now, Governor Romney's proposal that he has
been promoting for 18 months calls for a $5 trillion tax cut on top of $2 trillion of
additional spending for our military. And he is saying that he is going to pay for it
by closing loopholes and deductions. The problem is that he's been asked a  over a hundred
times how you would close those deductions and loopholes and he hasn't been able to identify
them. But I'm going to make an important point here,
Jim.

MR. LEHRER: All right. PRESIDENT OBAMA: When you add up all the loopholes
and deductions that upper income individuals can  are currently taking advantage of
if you take those all away  you don't come close to paying for $5 trillion in tax
cuts and $2 trillion in additional military spending. And that's why independent studies
looking at this said the only way to meet Governor Romney's pledge of not reducing the
deficit  or  or  or not adding to the deficit, is by burdening middle-class
families.

The average middle-class family with children
would pay about $2,000 more. Now, that's not my analysis; that's the analysis of economists
who have looked at this. And  and that kind of top  top-down economics, where
folks at the top are doing well so the average person making 3 million bucks is getting a
$250,000 tax break while middle- class families are burdened further, that's not what I believe
is a recipe for economic growth. MR.

LEHRER: All right. What is the difference? MR. ROMNEY: Well  MR. LEHRER: Let's just stay on taxes for  MR.

ROMNEY: But I  but I  right, right. MR. LEHRER: OK. Yeah, just  let's just
stay on taxes for a moment.

MR. ROMNEY: Yeah. Well, but  but  MR. LEHRER: What is the difference? MR.

ROMNEY:  virtually every  virtually
everything he just said about my tax plan is inaccurate. MR. LEHRER: All right, go  MR. ROMNEY: So  so if  if the tax plan
he described were a tax plan I was asked to support, I'd say absolutely not.

I'm not looking
for a $5 trillion tax cut. What I've said is I won't put in place a tax cut that adds
to the deficit. That's part one. So there's no economist can say Mitt Romney's tax plan
adds 5 trillion (dollars) if I say I will not add to the deficit with my tax plan.

Number two, I will not reduce the share paid
by high-income individuals. I  I know that you and your running mate keep saying that,
and I know it's a popular things to say with a lot of people, but it's just not the case.
Look, I got five boys. I'm used to people saying something that's not always true, but
just keep on repeating it and ultimately hoping I'll believe it  (scattered laughter)  but
that  that is not the case, all right? I will not reduce the taxes paid by high-income
Americans. And number three, I will not, under any circumstances,
raise taxes on middle-income families.

I will lower taxes on middle-income families. Now,
you cite a study. There are six other studies that looked at the study you describe and
say it's completely wrong. I saw a study that came out today that said you're going to raise
taxes by 3(,000 dollars) to $4,000 on  on middle-income families.

There are all these
studies out there. But let's get to the bottom line. That is,
I want to bring down rates. I want to bring down the rates down, at the same time lower
deductions and exemptions and credits and so forth so we keep getting the revenue we
need.

And you think, well, then why lower the rates?
And the reason is because small business pays that individual rate. Fifty-four percent of
America's workers work in businesses that are taxed not at the corporate tax rate but
at the individual tax rate. And if we lower that rate, they will be able to hire more
people. For me, this is about jobs.

MR. LEHRER: All right. That's where we started. MR.

ROMNEY: This is about getting jobs for
the American people. MR. LEHRER: Yeah. Do you challenge what the governor just said
about his own plan? PRESIDENT OBAMA: Well, for 18 months he's
been running on this tax plan.

And now, five weeks before the election, he's saying that
his big, bold idea is "never mind." And the fact is that if you are lowering the rates
the way you describe, Governor, then it is not possible to come up with enough deductions
and loopholes that only affect high-income individuals to avoid either raising the deficit
or burdening the middle class. It's  it's math. It's arithmetic. Now, Governor Romney and I do share a deep
interest in encouraging small-business growth.

So at the same time that my tax plan has already
lowered taxes for 98 percent of families, I also lowered taxes for small businesses
18 times. And what I want to do is continue the tax rates  the tax cuts that we put
into place for small businesses and families. But I have said that for incomes over $250,000
a year that we should go back to the rates that we had when Bill Clinton was president,
when we created 23 million new jobs, went from deficit to surplus and created a whole
lot of millionaires to boot. And the reason this is important is because
by doing that, we can not only reduce the deficit, we can not only encourage job growth
through small businesses, but we're also able to make the investments that are necessary
in education or in energy.

And we do have a difference, though, when
it comes to definitions of small business. Now, under  under my plan, 97 percent of
small businesses would not see their income taxes go up. Governor Romney says, well, those
top 3 percent, they're the job creators. They'd be burdened.

But under Governor Romney's definition, there
are a whole bunch of millionaires and billionaires who are small businesses. Donald Trump is
a small business. And I know Donald Trump doesn't like to think of himself as small
anything, but  but that's how you define small businesses if you're getting business
income. And that kind of approach, I believe, will not grow our economy because the only
way to pay for it without either burdening the middle class or blowing up our deficit
is to make drastic cuts in things like education, making sure that we are continuing to invest
in basic science and research, all the things that are helping America grow.

And I think
that would be a mistake. MR. LEHRER: All right. MR.

ROMNEY: Jim, let me just come back on
that  on that point. MR. LEHRER: Just for the  just for the
record  MR. ROMNEY: These small businesses we're talking
about  MR.

LEHRER: Excuse me. Just so everybody understands
MR. ROMNEY: Yeah. MR.

LEHRER:  we're way over our first 15
minutes. MR. ROMNEY: It's fun, isn't it? MR. LEHRER: It's OK.

It's great. PRESIDENT OBAMA: That's OK. MR. LEHRER: No problem.

No, you don't have
you don't have a problem, I don't have a problem, because we're still on the economy,
but we're going to come back to taxes and we're going to move on to the deficit and
a lot of other things, too. OK, but go ahead, sir. MR. ROMNEY: You bet.

Well, President, you're  Mr. President,
you're absolutely right, which is that with regards to 97 percent of the businesses are
not  not taxed at the 35 percent tax rate, they're taxed at a lower rate. But those businesses
that are in the last 3 percent of businesses happen to employ half  half  of all
of the people who work in small business. Those are the businesses that employ one quarter
of all the workers in America.

And your plan is take their tax rate from 35 percent to
40 percent. Now, I talked to a guy who has a very small
business. He's in the electronics business in  in St. Louis.

He has four employees. He said he and his son calculated how much
they pay in taxes. Federal income tax, federal payroll tax, state income tax, state sales
tax, state property tax, gasoline tax  it added up to well over 50 percent of what they
earned. And your plan is to take the tax rate on successful
small businesses from 35 percent to 40 percent.

The National Federation of Independent Businesses
has said that will cost 700,000 jobs. I don't want to cost jobs. My priority is jobs. And
so what I do is I bring down the tax rates, lower deductions and exemptions  the same
idea behind Bowles-Simpson, by the way.

Get the rates down, lower deductions and exemptions
to create more jobs, because there's nothing better for getting us to a balanced budget
than having more people working, earning more money, paying  (chuckles)  more taxes.
That's by far the most effective and efficient way to get this budget balanced. PRESIDENT OBAMA: Jim, I  you may want to
move on to another topic, but I would just say this to the American people. If you believe
that we can cut taxes by $5 trillion and add $2 trillion in additional spending that the
military is not asking for  $7 trillion, just to give you a sense, over 10 years that's
more than our entire defense budget  and you think that by closing loopholes and deductions
for the well-to-do, somehow you will not end up picking up the tab, then Governor Romney's
plan may work for you. But I think math, common sense and our history
shows us that's not a recipe for job growth.

Look, we've tried this  we've tried both
approaches. The approach that Governor Romney's talking about is the same sales pitch that
was made in 2001 and 2003. And we ended up with the slowest job growth in 50 years. We
ended up moving from surplus to deficits.

And it all culminated in the worst financial
crisis since the Great Depression. Bill Clinton tried the approach that I'm talking
about. We created 23 million new jobs. We went from deficit to surplus, and businesses
did very well.

So in some ways, we've got some data on which
approach is more likely to create jobs and opportunity for Americans, and I believe that
the economy works best when middle-class families are getting tax breaks so that they've got
some money in their pockets and those of us who have done extraordinarily well because
of this magnificent country that we live in, that we can afford to do a little bit more
to make sure we're not blowing up the deficit. MR. LEHRER: OK. (Inaudible)  MR.

ROMNEY: Jim, the president began this
segment, so I think I get the last word, so I'm going to take it. All right? (Chuckles.) MR. LEHRER: Well, you're going to get the
first word in the next segment. MR.

ROMNEY: Well, but  but he gets the
first word of that segment. I get the last word of that segment, I hope. Let me just
make this comment. PRESIDENT OBAMA: (Chuckles.) He can  you
can have it.

He can  MR. ROMNEY: First of all  MR. LEHRER: That's not how it works. MR.

ROMNEY: Let me  let me repeat  let
me repeat what I said  (inaudible). I'm not in favor of a $5 trillion tax cut. That's
not my plan. My plan is not to put in place any tax cut that will add to the deficit.
That's point one.

So you may keep referring to it as a $5 trillion tax cut, but that's
not my plan. PRESIDENT OBAMA: OK. MR. ROMNEY: Number two, let's look at history.
My plan is not like anything that's been tried before.

My plan is to bring down rates but
also bring down deductions and exemptions and credits at the same time so the revenue
stays in, but that we bring down rates to get more people working. My priority is putting
people back to work in America. They're suffering in this country. And we talk about evidence
look at the evidence of the last four years.

It's absolutely extraordinary. We've
got 23 million people out of work or stop looking for work in this country. MR. LEHRER: All right.

MR. ROMNEY: It's just  it's  we've got
we got  when the president took office, 32 million people on food stamps; 47 million
on food stamps today. Economic growth this year slower than last year, and last year
slower than the year before. Going forward with the status quo is not going to cut it
for the American people who are struggling today.

MR. LEHRER: All right. Let's talk  we're
still on the economy. This is, theoretically now, a second segment still on the economy,
and specifically on what do about the federal deficit, the federal debt.

And the question
you each have two minutes on this  and, Governor Romney you go first because the president
went first on segment one. And the question is this: What are the differences between
the two of you as to how you would go about tackling the deficit problem in this country? MR. ROMNEY: Well, good. I'm glad you raised
that.

And it's a  it's a critical issue. I think it's not just an economic issue. I
think it's a moral issue. I think it's, frankly, not moral for my generation to keep spending
massively more than we take in, knowing those burdens are going to be passed on to the next
generation.

And they're going to be paying the interest and the principle all their lives.
And the amount of debt we're adding, at a trillion a year, is simply not moral. So how do we deal with it? Well, mathematically
there are  there are three ways that you can cut a deficit. One, of course, is to raise
taxes. Number two is to cut spending.

And number three is to grow the economy because
if more people work in a growing economy they're paying taxes and you can get the job done
that way. The presidents would  president would prefer
raising taxes. I understand. The problem with raising taxes is that it slows down the rate
of growth and you could never quite get the job done.

I want to lower spending and encourage
economic growth at the same time. What things would I cut from spending? Well,
first of all, I will eliminate all programs by this test  if they don't pass it: Is
the program so critical it's worth borrowing money from China to pay for it? And if not,
I'll get rid of it. "Obamacare" is on my list. I apologize, Mr.

President. I use that term
with all respect. PRESIDENT OBAMA: I like it. MR.

ROMNEY: Good. OK, good. (Laughter.) So
I'll get rid of that. I'm sorry, Jim.

I'm going to stop the subsidy to PBS. I'm going
to stop other things. I like PBS. I love Big Bird.

I actually like you too. But I'm not
going to  I'm not going to keep on spending money on things to borrow money from China
to pay for it. That's number one. Number two, I'll take programs that are currently
good programs but I think could be run more efficiently at the state level and send them
to state.

Number three, I'll make government more efficient,
and to cut back the number of employees, combine some agencies and departments. My cutbacks
will be done through attrition, by the way. This is the approach we have to take to get
America to a balanced budget. The president said he'd cut the deficit in half.

Unfortunately,
he doubled it. Trillion-dollar deficits for the last four years. The president's put it
in place as much public debt  almost as much debt held by by the public as all prior
presidents combined. MR.

LEHRER: Mr. President. Two minutes. PRESIDENT OBAMA: When I walked in the Oval
Office, I had more than a trillion dollar deficit greeting me, and we know where it
came from.

Two wars that were paid for on a credit card. Two tax cuts that were not
paid for, and a whole bunch of programs that were not paid for. And then a massive economic
crisis. And despite that, what we've said is, yes,
we had to take some initial emergency measures to make sure we didn't slip into a Great Depression.
But what we've also said is, let's make sure that we are cutting out those things that
are not helping us grow.

So, 77 government programs  everything
from aircrafts that the Air Force had ordered but weren't working very well. Eighteen government
18 government programs for education that were well- intentioned but weren't helping
kids learn. We went after medical fraud in Medicare and Medicaid very aggressively  more
aggressively than ever before, and have saved tens of billions of dollars. Fifty billion
dollars of waste taken out of the system.

And I worked with Democrats and Republicans
to cut a trillion dollars out of our discretionary domestic budget. That's the largest cut in
the discretionary domestic budget since Dwight Eisenhower. Now, we all know that we've got to do more.
And so I've put forward a specific $4 trillion deficit-reduction plan. It's on a website.

You can look at all the
numbers, what cuts we make and what revenue we raise. And the way we do it is $2.50 For every cut,
we ask for a dollar of additional revenue, paid for, as I indicated earlier, by asking
those of us who have done very well in this country to contribute a little bit more to
reduce the deficit. And Governor Romney earlier mentioned the
Bowles-Simpson commission. Well, that's how the commission  bipartisan commission that
talked about how we should move forward suggested we have to do it  in a balanced way with
some revenue and some spending cuts.

And this is a major difference that Governor Romney
and I have. Let  let me just finish this point because
you're looking for contrast. You know, when Governor Romney stood on a stage with other
Republican candidates for the nomination, and he was asked, would you take $10 of spending
cuts for just $1 of revenue, and he said no. Now, if you take such an unbalanced approach,
then that means you are going to be gutting our investments in schools and education.
It means that  Governor Romney talked about Medicaid and how we could send it back to
the states, but effectively this means a 30 percent cut in the primary program we help
for seniors who are in nursing homes, for kids who are with disabilities  MR.

LEHRER: Mr. President, I'm sorry  PRESIDENT OBAMA: And that is not a right strategy
for us to move forward. MR. LEHRER: Way over the two minutes.

PRESIDENT OBAMA: Sorry. MR. LEHRER: Governor, what about Simpson-Bowles.
Will you support Simpson-Bowles? MR. ROMNEY: Simpson-Bowles, the president
should have grabbed that.

MR. LEHRER: No, I mean do you support Simpson-Bowles? MR. ROMNEY: I have my own plan. It's not the
same as Simpson- Bowles.

But in my view, the president should have grabbed it. If you wanted
to make some adjustments to it, take it, go to Congress, fight for it. PRESIDENT OBAMA: That's what we've done, made
some adjustments to it; and we're putting it forward before Congress right now, a $4
trillion plan, (a balanced ?)  MR. ROMNEY: But you've been  but you've
been president four years.

You've been president four years. You said you'd cut the deficit
in half. It's now four years later. We still have trillion- dollar deficits.

The CBO says we'll have a trillion-dollar
deficit each of the next four years. If you're re-elected, we'll get to a trillion-dollar
debt. You have said before you'd cut the deficit in half. And this four  I love this idea
of 4 trillion (dollars) in cuts.

You've found $4 trillion of ways to reduce or to get closer
to a balanced budget, except we still show trillion dollar deficits every year. That
doesn't get the job done. Let me come back and say, why is that I don't
want to raise taxes? Why don't I want to raise taxes on people? And actually, you said it
back in 2010. You said, look, I'm going to extend the tax policies that we have.

Now,
I'm not going to raise taxes on anyone because when the economy's growing slow like this,
when we're in recession you shouldn't raise taxes on anyone. Well, the economy is still growing slow. As
a matter of fact, it's growing much more slowly now than when you made that statement. And
so if you believe the same thing, you just don't want to raise taxes on people.

And the
reality is it's not just wealthy people  you mentioned Donald Trump  it's not just Donald
Trump you're taxing; it's all those businesses that employ one-quarter of the workers in
America. These small businesses that are taxed as individuals. You raise taxes and you kill
jobs. That's why the National Federation of Independent Businesses said your plan will
kill 700,000 jobs.

I don't want to kill jobs in this environment. Let me make one more point. And that's  and
that  MR. LEHRER: Let's let him answer the taxes
thing for a moment, OK? MR.

ROMNEY: OK. MR. LEHRER: Mr. President.

PRESIDENT OBAMA: Well, we've had this discussion
before. MR. LEHRER: No, about the idea that in order
to reduce the deficit there has to be revenue in addition to cuts. PRESIDENT OBAMA: There has to be revenue in
addition to cuts.

Now, Governor Romney has ruled out revenue. He's  he's ruled out
revenue. MR. LEHRER: That's true, right? MR.

ROMNEY: Absolutely. PRESIDENT OBAMA: OK, so  MR. LEHRER: Completely? MR. ROMNEY: I  look, the revenue I get
is by more people working, getting higher pay, paying more taxes.

That's how we get
growth and how we balance the budget. But the idea of taxing people more, putting more
people out of work  you'll never get there. You never balance the budget by raising taxes. Spain  Spain spends 42 percent of their
total economy on government.

We're now spending 42 percent of our economy on government. I don't want to go down the path to Spain.
I want to go down the path of growth that puts Americans to work, with more money coming
in because they're working. MR. LEHRER: Yeah.

But Mr. President, you're saying in order
to get it  the job done, it's got to be balanced. You've got to have  PRESIDENT OBAMA: If we're serious, we've got
to take a balanced, responsible approach. And by the way, this is not just when it comes
to individual taxes.

Let's talk about corporate taxes. Now, I've
identified areas where we can, right away, make a change that I believe would actually
help the economy. The  the oil industry gets $4 billion a year in corporate welfare.
Basically, they get deductions that those small businesses that Governor Romney refers
to, they don't get. Now, does anybody think that ExxonMobil needs some extra money when
they're making money every time you go to the pump? Why wouldn't we want to eliminate
that? Why wouldn't we eliminate tax breaks for corporate
jets? My attitude is if you got a corporate jet, you can probably afford to pay full freight,
not get a special break for it.

When it comes to corporate taxes, Governor
Romney has said he wants to, in a revenue-neutral way, close loopholes, deductions  he hasn't
identified which ones they are  but thereby bring down the corporate rate. Well, I want
to do the same thing, but I've actually identified how we can do that. And part of the way to do it is to not give
tax breaks to companies that are shipping jobs overseas. Right now you can actually
take a deduction for moving a plant overseas.

I think most Americans would say that doesn't
make sense. And all that raises revenue. And so if we take a balanced approach, what
that then allows us to do is also to help young people, the way we already have during
my administration, make sure that they can afford to go to college. It means that the
teacher that I met in Las Vegas, wonderful young lady, who describes to me  she's
got 42 kids in her class.

The first two weeks, she's got them  some
of them sitting on the floor until finally they get reassigned. They're using textbooks
that are 10 years old. That is not a recipe for growth; that's not how America was built. And so budgets reflect choices.

Ultimately
we're going to have to make some decisions. And if we're asking for no revenue, then that
means that we've got to get rid of a whole bunch of stuff, and the magnitude of the tax
cuts that you're talking about, Governor, would end up resulting in severe hardship
for people, but more importantly, would not help us grow. As I indicated before, when you talk about
shifting Medicaid to states, we're talking about potentially a  a 30  a 30 percent
cut in Medicaid over time. Now, you know, that may not seem like a big deal when it
just is  you know, numbers on a sheet of paper, but if we're talking about a family
who's got an autistic kid and is depending on that Medicaid, that's a big problem.

And
governors are creative. There's no doubt about it. But they're not creative enough to make
up for 30 percent of revenue on something like Medicaid. What ends up happening is some
people end up not getting help.

MR. ROMNEY: Jim, let's  we  we've gone
on a lot of topics there, and  so I've got to take  it's going to take a minute
to go from Medicaid to schools to  PRESIDENT OBAMA: (Inaudible.) MR. LEHRER: Come back to Medicaid, here, yeah,
yeah, right. MR.

ROMNEY:  oil to tax breaks and companies
overseas. So let's go through them one by one. First of all, the Department of Energy
has said the tax break for oil companies is $2.8 Billion a year. And it's actually an
accounting treatment, as you know, that's been in place for a hundred years.

Now  PRESIDENT OBAMA: It's time to end it. MR. ROMNEY: And  and in one year, you provided
$90 billion in breaks to the green energy world. Now, I like green energy as well, but
that's about 50 years' worth of what oil and gas receives, and you say Exxon and Mobil
actually, this $2.8 Billion goes largely to small companies, to drilling operators
and so forth.

But you know, if we get that tax rate from
35 percent down to 25 percent, why, that $2.8 Billion is on the table. Of course it's on
the table. That's probably not going to survive, you get that rate down to 25 percent. But  but don't forget, you put $90 billion
like 50 years worth of breaks  into solar and wind, to  to Solyndra and Fisker
and Tesla and Ener1.

I mean, I  I had a friend who said, you don't just pick the winners
and losers; you pick the losers. All right? So  so this is not  this is not the
kind of policy you want to have if you want to get America energy-secure. The second topic, which is you said you get
a deduction for getting a plant overseas. Look, I've been in business for 25 years.
I have no idea what you're talking about.

I maybe need to get a new accountant. MR. LEHRER: Let's  MR. ROMNEY: But the  the idea that you
get a break for shipping jobs overseas is simply not the case.

MR. LEHRER: Let's have  MR. ROMNEY: What we do have right now is a
setting  MR. LEHRER: Excuse me.

MR. ROMNEY:  where I'd like to bring money
from overseas back to this country. And finally, Medicaid to states, I'm not quite
sure where that came in, except this, which is, I would like to take the Medicaid dollars
that go to states and say to a state, you're going to get what you got last year plus inflation
inflation  plus 1 percent. And then you're going to manage your care for your
poor in the way you think best.

And I remember as a governor, when this idea
was floated by Tommy Thompson, the governors, Republican and Democrats, said, please let
us do that. We can care for our own poor in so much better and more effective a way than
having the federal government tell us how to care for our poor. So let states  one of the magnificent things
about this country is the whole idea that states are the laboratories of democracy.
Don't have the federal government tell everybody what kind of training programs they have to
have and what kind of Medicaid they have to have. Let states do this.

And by the way, if a states get  gets in
trouble, why, we could step in and see if we could find a way to help them. But  MR. LEHRER: Let's go. MR.

ROMNEY: But  but the right  the
right approach is one which relies on the brilliance  MR. LEHRER: Two seconds. MR. ROMNEY:  of our people and states,
not the federal government.

MR. LEHRER: Two seconds and we're going on,
still on the economy on another  but another part of it. PRESIDENT OBAMA: OK. MR.

LEHRER: All right? All right, this is
this is segment three, the economy, entitlements. First answer goes to you. It's two minutes.
Mr. President, do you see a major difference between the two of you on Social Security? PRESIDENT OBAMA: You know, I suspect that
on Social Security, we've got a somewhat similar position.

Social Security is structurally
sound. It's going to have to be tweaked the way it was by Ronald Reagan and Speaker  Democratic
Speaker Tip O'Neill. But it is  the basic structure is sound. But  but I want to
talk about the values behind Social Security and Medicare and then talk about Medicare,
because that's the big driver  MR.

LEHRER: Sure  it  you bet. PRESIDENT OBAMA:  of our deficits right
now. You know, my grandmother, some of you know,
helped to raise me. My grandparents did.

My grandfather died awhile back. My grandmother
died three days before I was elected president. And she was fiercely independent. She worked
her way up, only had a high school education, started as a secretary, ended up being the
vice president of a local bank.

And she ended up living alone by choice. And the reason
she could be independent was because of Social Security and Medicare. She had worked all
her life, put in this money and understood that there was a basic guarantee, a floor
under which she could not go. And that's the perspective I bring when I
think about what's called entitlements.

You know, the name itself implies some sense of
dependency on the part of these folks. These are folks who've worked hard, like my grandmother.
And there are millions of people out there who are counting on this. So my approach is to say, how do we strengthen
the system over the long term? And in Medicare, what we did was we said, we are going to have
to bring down the costs if we're going to deal with our long- term deficits, but to
do that, let's look where some of the money is going. Seven hundred and sixteen billion
dollars we were able to save from the Medicare program by no longer overpaying insurance
companies, by making sure that we weren't overpaying providers.

And using that money, we were actually able
to lower prescription drug costs for seniors by an average of $600, and we were also able
to make a  make a significant dent in providing them the kind of preventive care that will
ultimately save money through the  throughout the system. So the way for us to deal with Medicare in
particular is to lower health care costs. But when it comes to Social Security, as I
said, you don't need a major structural change in order to make sure that Social Security
is there for the future. MR.

LEHRER: We'll follow up on this. First, Governor Romney, you have two minutes
on Social Security and entitlements. MR. ROMNEY: Well, Jim, our seniors depend
on these programs.

And I know any time we talk about entitlements, people become concerned
that something's going to happen that's going to change their life for the worst, and the
answer is, neither the president nor I are proposing any changes for any current retirees
or near retirees, either to Social Security or Medicare. So if you're 60 or around 60
or older, you don't need to listen any further. But for younger people, we need to talk about
what changes are going to be occurring. Oh, I just thought about one, and that is
in fact I was wrong when I said the president isn't proposing any changes for current retirees.
In fact, he is on Medicare.

On Social Security, he's not. But on Medicare, for current retirees he's
cutting $716 billion from the program. Now, he says by not overpaying hospitals and providers,
actually just going to them and saying we're going to reduce the rates you get paid across
the board, everybody's going to get a lower rate. That's not just going after places where
there's abuse, that's saying we're cutting the rates.

Some 15 percent of hospitals and
nursing homes say they won't take anymore Medicare patients under that scenario. We also have 50 percent of doctors who say
they won't take more Medicare patients. This  we have 4 million people on Medicare Advantage
that will lose Medicare Advantage because of those $716 billion in cuts. I can't understand
how you can cut Medicare $716 billion for current recipients of Medicare.

Now, you point out, well, we're putting some
back; we're going to give a better prescription program. That's one  that's $1 for every
15 (dollars) you've cut. They're smart enough to know that's not a good trade. I want to take that $716 billion you've cut
and put it back into Medicare.

By the way, we can include a prescription program if we
need to improve it, but the idea of cutting $716 billion from Medicare to be able to balance
the additional cost of "Obamacare" is, in my opinion, a mistake. And with regards to
young people coming along, I've got proposals to make sure Medicare and Social Security
are there for them without any question. MR. LEHRER: Mr.

President. PRESIDENT OBAMA: First of all, I think it's
important for Governor Romney to present this plan that he says will only affect folks in
the future. And the essence of the plan is that he would turn Medicare into a voucher
program. It's called premium support, but it's understood to be a voucher program.

His
running mate  MR. LEHRER: And you  and you don't support
that? PRESIDENT OBAMA: I don't. And  and let
me explain why. MR.

ROMNEY: Again, that's for future people
PRESIDENT OBAMA: I understand. MR. ROMNEY:  right, not for current retirees. PRESIDENT OBAMA: For  for  so if you're
if you  you're 54 or 55, you might want to listen, because this  this will
affect you.

The idea, which was originally presented by Congressman Ryan, your running
mate, is that we would give a voucher to seniors, and they could go out in the private marketplace
and buy their own health insurance. The problem is that because the voucher wouldn't necessarily
keep up with health care inflation, it was estimated that this would cost the average
senior about $6,000 a year. Now, in fairness, what Governor Romney has
now said is he'll maintain traditional Medicare alongside it. But there's still a problem,
because what happens is those insurance companies are pretty clever at figuring out who are
the younger and healthier seniors.

They recruit them leaving the older, sicker
seniors in Medicare. And every health care economist who looks at it says over time what'll
happen is the traditional Medicare system will collapse. And then what you've got is
folks like my grandmother at the mercy of the private insurance system, precisely at
the time when they are most in need of decent health care. So I don't think vouchers are the right way
to go.

And this is not my own  only my opinion. AARP thinks that the  the savings
that we obtained from Medicare bolster the system, lengthen the Medicare trust fund by
8 years. Benefits were not affected at all and ironically if you repeal "Obamacare"  and
I have become fond of this term, "Obamacare"  (laughter)  if you repeal it, what
happens is those seniors right away are going to be paying $600 more in prescription care.
They're now going to have to be paying copays for basic check-ups that can keep them healthier. And the primary beneficiary of that repeal
are insurance companies that are estimated to gain billions of dollars back when they
aren't making seniors any healthier.

And I.  I don't think that's right approach when
it comes to making sure that Medicare is stronger over the long term. MR. LEHRER: We'll talk about  specifically
about health care in a moment, but what is  do you support the voucher system, Governor? MR.

ROMNEY: What I support is no change for
current retirees and near-retirees to Medicare and the president supports taking $716 billion
out of that program. MR. LEHRER: What about the vouchers? MR. ROMNEY: So that's  that's number one.

MR. LEHRER: OK. All right. MR.

ROMNEY: Number two is for people coming
along that are young. What I'd do to make sure that we can keep Medicare in place for
them is to allow them either to choose the current Medicare program or a private plan
their choice. They get to  and they'll have at least two plans that will be entirely
at no cost to them. So they don't have to pay additional money, no additional $6,000.
That's not going to happen.

They'll have at least two plans. And by the way, if the government can be as
efficient as the private sector and offer premiums that are as low as the private sector,
people will be happy to get traditional Medicare, or they'll be able to get a private plan.
I know my own view is I'd rather have a private plan. I  I'd just as soon not have the
government telling me what kind of health care I get. I'd rather be able to have an
insurance company.

If I don't like them, I. Can get rid of them and find a different insurance
company. But people will make their own choice. The other thing we have to do to save Medicare,
we have to have the benefits high for those that are low-income, but for higher-income
people, we're going to have to lower some of the benefits.

We have to make sure this
program is there for the long term. That's the plan that I've put forward. And by the way, the idea came not even from
Paul Ryan or  or Senator Wyden, who's a co-author of the bill with  with Paul Ryan
in the Senate, but also it came from Bill Clinton's  Bill Clinton's chief of staff.
This is an idea that's been around a long time, which is saying, hey, let's see if we
can't get competition into the Medicare world so that people can get the choice of different
plans at lower cost, better quality. I believe in competition.

PRESIDENT OBAMA: Jim, if I  if I can just
respond very quickly, first of all, every study has shown that Medicare has lower administrative
cost than private insurance does, which is why seniors are generally pretty happy with
it. And private insurers have to make a profit. Nothing wrong with that; that's what they
do. And so you've got higher administrative costs, plus profit on top of that, and if
you are going to save any money through what Governor Romney's proposing, what has to happen
is is that the money has to come from somewhere.

And when you move to a voucher system, you
are putting seniors at the mercy of those insurance companies. And over time, if traditional
Medicare has decayed or fallen apart, then they're stuck. And this is the reason why
AARP has said that your plan would weaken Medicare substantially, and that's why they
were supportive of the approach that we took. One last point I want to make.

We do have
to lower the cost of health care. Not just in Medicare and  MR. LEHRER: We'll talk about that in a minute. PRESIDENT OBAMA:  but  but overall.

MR. LEHRER: Go. OK. PRESIDENT OBAMA: And so  MR.

ROMNEY: That's  that's a big topic.
Could we  could we stay on Medicare? PRESIDENT OBAMA: Is that a  is that a separate
topic? I'm sorry. MR. LEHRER: Yeah, we're going to  yeah.
I want to get to it, but all I want to do is very quickly  MR. ROMNEY: Let's get back to Medicare.

MR. LEHRER:  before we leave the economy
MR. ROMNEY: Let's get back to Medicare. MR.

LEHRER: No, no, no, no  MR. ROMNEY: The president said that the government
can provide the service at lower  MR. LEHRER: No. MR.

ROMNEY:  cost and without a profit. MR. LEHRER: All right. MR.

ROMNEY: If that's the case, then it will
always be the best product that people can purchase. But my experience  MR. LEHRER: Wait a minute, Governor. MR.

ROMNEY: My experience is the private sector
typically is able to provide a better product at a lower cost. MR. LEHRER: Can we  can the two of you
agree that the voters have a choice, a clear choice between the two of you  MR. ROMNEY: Absolutely.

PRESIDENT OBAMA: Yes. MR. LEHRER:  on Medicare? MR. ROMNEY: Absolutely.

MR. LEHRER: All right. So, to finish quickly,
briefly, on the economy, what is your view about the level of federal regulation of the
economy right now? Is there too much, and in your case, Mr. President, is there  should
there be more? Beginning with you  this is not a new two-minute segment  to start,
and we'll go for a few minutes and then we're going to go to health care.

OK? MR. ROMNEY: Regulation is essential. You can't
have a free market work if you don't have regulation. As a business person, I had to
have  I needed to know the regulations.

I needed them there. You couldn't have people
opening up banks in their  in their garage and making loans. I mean, you have to have
regulations so that you can have an economy work. Every free economy has good regulation.

At the same time, regulation can become excessive. MR. LEHRER: Is it excessive now, do you think? MR. ROMNEY: In some places, yes, in other
places, no.

MR. LEHRER: Like where? MR. ROMNEY: It can become out of date. And
what's happened in  with some of the legislation that's been passed during the president's
term, you've seen regulation become excessive and it's hurt the  it's hurt the economy.
Let me give you an example.

Dodd- Frank was passed, and it includes within it a number
of provisions that I think have some unintended consequences that are harmful to the economy.
One is it designates a number of banks as too big to fail, and they're effectively guaranteed
by the federal government. This is the biggest kiss that's been given
to  to New York banks I've ever seen. This is an enormous boon for them. There's been
122 community and small banks have closed since Dodd-Frank.

So there's one example. Here's another. In Dodd-Frank, it says that
MR. LEHRER: You want to repeal Dodd-Frank? MR.

ROMNEY: Well, I would repeal it and replace
it. You  we're not going to get rid of all regulation. You have to have regulation.
And there's some parts of Dodd-Frank that make all the sense in the world. You need
transparency, you need to have leverage limits for institutes  MR.

LEHRER: Well, here's a specific  let's
excuse me  MR. ROMNEY: Let me mention the other one.
Let's talk the  MR. LEHRER: No, no, let's do  right now,
let's not. Let's let him respond.

MR. ROMNEY: OK. MR. LEHRER: Let's let him respond to this
specific on Dodd-Frank and what the governor just said.

PRESIDENT OBAMA: Well, I think this is a great
example. The reason we have been in such a enormous economic crisis was prompted by reckless
behavior across the board. Now, it wasn't just on Wall Street. You had  loan officers
were  they were giving loans and mortgages that really shouldn't have been given, because
they're  the folks didn't qualify.

You had people who were borrowing money to buy
a house that they couldn't afford. You had credit agencies that were stamping these as
A-1 (ph) great investments when they weren't. But you also had banks making money hand-over-fist,
churning out products that the bankers themselves didn't even understand in order to make big
profits, but knowing that it made the entire system vulnerable. So what did we do? We stepped in and had the
toughest reforms on Wall Street since the 1930s.

We said you've got  banks, you've
got to raise your capital requirements. You can't engage in some of this risky behavior
that is putting Main Street at risk. We're going to make sure that you've got to have
a living will, so  so we can know how you're going to wind things down if you make a bad
bet so we don't have other taxpayer bailouts. In the meantime, by the way, we also made
sure that all the help that we provided those banks was paid back, every single dime, with
interest.

Now, Governor Romney has said he wants to
repeal Dodd-Frank, and, you know, I appreciate, and it appears we've got some agreement that
a marketplace to work has to have some regulation, but in the past, Governor Romney has said
he just wants to repeal Dodd-Frank, roll it back. And so the question is does anybody
out there think that the big problem we had is that there was too much oversight and regulation
of Wall Street? Because if you do, then Governor Romney is your candidate. But that's not what
I believe. MR.

ROMNEY: (Inaudible)  sorry, Jim. That
that's just not  that's just not the facts. Look, we have to have regulation of
Wall Street. PRESIDENT OBAMA: Yeah.

MR. ROMNEY: That  that's why I'd have regulation.
But I wouldn't designate five banks as too big to fail and give them a blank check. That's
one of the unintended consequences of Dodd-Frank. It wasn't thought through properly.

We need
to get rid of that provision, because it's killing regional and small banks. They're
getting hurt. Let me mention another regulation of Dodd-Frank.
You say we were giving mortgages to people who weren't qualified. That's exactly right.
It's one of the reasons for the great financial calamity we had.

And so Dodd-Frank correctly
says we need to  MR. LEHRER: All right. MR. ROMNEY:  have qualified mortgages,
and if you give a mortgage that's not qualified, there are big penalties.

Except they didn't
ever go on to define what a qualified mortgage was. MR. LEHRER: All right. MR.

ROMNEY: It's been two years. We don't
know what a qualified mortgage is yet. So banks are reluctant to make loans, mortgages.
Try and get a mortgage these days. It's hurt the housing market  MR.

LEHRER: All right  MR. ROMNEY:  because Dodd-Frank didn't
anticipate putting in place the kinds of regulations you have to have. It's not that Dodd- Frank
always was wrong with too much regulation. Sometimes they didn't come out with a clear
regulation.

MR. LEHRER: OK. MR. ROMNEY: I will make sure we don't hurt
the functioning of our  of our marketplace and our businesses, because I want to bring
back housing and get good jobs.

MR. LEHRER: All right, I think we have another
clear difference between the two of you. Now let's move to health care, where I know there
is a clear difference  (laughter)  and that has to do with the Affordable Care Act,
"Obamacare." And it's a two-minute new segment, and it's
that means two minutes each. And you go first, Governor Romney.

You wanted repeal.
You want the Affordable Care Act repealed. Why? MR. ROMNEY: I sure do. Well, in part, it comes,
again, from my experience.

I was in New Hampshire. A woman came to me, and she said, look, I
can't afford insurance for myself or my son. I met a couple in Appleton, Wisconsin, and
they said, we're thinking of dropping our insurance; we can't afford it. And the number
of small businesses I've gone to that are saying they're dropping insurance because
they can't afford it  the cost of health care is just prohibitive.

And  and we've
got to deal with cost. And unfortunately, when  when you look
at "Obamacare," the Congressional Budget Office has said it will cost $2,500 a year more than
traditional insurance. So it's adding to cost. And as a matter of fact, when the president
ran for office, he said that by this year he would have brought down the cost of insurance
for each family by $2,500 a family.

Instead, it's gone up by that amount. So it's expensive.
Expensive things hurt families. So that's one reason I don't want it. Second reason, it cuts $716 billion from Medicare
to pay for it.

I want to put that money back in Medicare for our seniors. Number three, it puts in place an unelected
board that's going to tell people, ultimately, what kind of treatments they can have. I don't
like that idea. Fourth, there was a survey done of small businesses
across the country.

It said, what's been the effect of "Obamacare" on your hiring plans?
And three-quarters of them said, it makes us less likely to hire people. I just don't
know how the president could have come into office, facing 23 million people out of work,
rising unemployment, an economic crisis at the  at the kitchen table and spent his
energy and passion for two years fighting for "Obamacare" instead of fighting for jobs
for the American people. It has killed jobs. And the best course for
health care is to do what we did in my state, craft a plan at the state level that fits
the needs of the state.

And then let's focus on getting the costs down for people rather
than raising it with the $2,500 additional premium. MR. LEHRER: Mr. President, the argument against
repeal.

PRESIDENT OBAMA: Well, four years ago when
I was running for office I was traveling around and having those same conversations that Governor
Romney talks about. And it wasn't just that small businesses were seeing costs skyrocket
and they couldn't get affordable coverage even if they wanted to provide it to their
employees; it wasn't just that this was the biggest driver of our federal deficit, our
overall health care costs. But it was families who were worried about going bankrupt if they
got sick  millions of families, all across the country. If they had a pre-existing condition they
might not be able to get coverage at all.

If they did have coverage, insurance companies
might impose an arbitrary limit. And so as a consequence, they're paying their premiums,
somebody gets really sick, lo and behold they don't have enough money to pay the bills because
the insurance companies say that they've hit the limit. So we did work on this alongside
working on jobs, because this is part of making sure that middle-class families are secure
in this country. And let me tell you exactly what "Obamacare"
did.

Number one, if you've got health insurance it doesn't mean a government take over. You
keep your own insurance. You keep your own doctor. But it does say insurance companies
can't jerk you around.

They can't impose arbitrary lifetime limits. They have to let you keep
your kid on their insurance  your insurance plan till you're 26 years old. And it also
says that they're  you're going to have to get rebates if insurance companies are
spending more on administrative costs and profits than they are on actual care. Number two, if you don't have health insurance,
we're essentially setting up a group plan that allows you to benefit from group rates
that are typically 18 percent lower than if you're out there trying to get insurance on
the individual market.

Now, the last point I'd make before  MR. LEHRER: Two minutes  PRESIDENT OBAMA:  before  MR. LEHRER: Two minutes is up, sir. PRESIDENT OBAMA: No, I  I think I've  I
had five seconds before you interrupted me  was  (laughter)  that the irony
is that we've seen this model work really well in Massachusetts, because Governor Romney
did a good thing, working with Democrats in the state to set up what is essentially the
identical model.

And as a consequence, people are covered there. It hasn't destroyed jobs.
And as a consequence, we now have a system in which we have the opportunity to start
bringing down cost, as opposed to just  MR. LEHRER: Your five  PRESIDENT OBAMA:  leaving millions of people
out in the cold. MR.

LEHRER: Your five seconds went away a
long time ago. (Laughter.) PRESIDENT OBAMA: That  MR. LEHRER: All right, Governor. Governor,
tell the  tell the president directly why you think what he just said is wrong about
"Obamacare." MR.

ROMNEY: Well, I did with my first statement. PRESIDENT OBAMA: You did. MR. ROMNEY: But I'll go on.

PRESIDENT OBAMA: Please elaborate. MR. ROMNEY: I'll elaborate. Exactly right.

First of all, I like the way we did it in
Massachusetts. I like the fact that in my state, we had Republicans and Democrats come
together and work together. What you did instead was to push through a plan without a single
Republican vote. As a matter of fact, when Massachusetts did something quite extraordinary,
elected a Republican senator to stop "Obamacare," you pushed it through anyway.

So entirely
on a partisan basis, instead of bringing America together and having a discussion on this important
topic, you pushed through something that you and Nancy Pelosi and Harry Reid thought was
the best answer and drove it through. What we did, in a legislature 87 percent Democrat,
we worked together. Two hundred legislators in my legislature  only two voted against
the plan by the time we were finished. What were some differences? We didn't raise taxes.

You've raised them
by a trillion dollars under "Obamacare." We didn't cut Medicare. Of course, we don't have
Medicare, but we didn't cut Medicare by $716 billion. We didn't put in place a board that
can tell people ultimately what treatments they're going to receive. We didn't  we didn't also do something
that I think a number of people across this country recognize, which is put  put people
in a position where they're going to lose the insurance they had and they wanted.

Right
now, the CBO says up to 20 million people will lose their insurance as "Obamacare" goes
into effect next year. And likewise, a study by McKinsey & Company of American businesses
said 30 percent of them are anticipating dropping people from coverage. So for those reasons,
for the tax, for Medicare, for this board and for people losing their insurance, this
is why the American people don't want  don't want "Obamacare." It's why Republicans said,
do not do this. And the Republicans had a  had a plan.
They put a plan out.

They put out a plan, a bipartisan plan. It was swept aside. I think
something this big, this important has to be done in a bipartisan basis. And we have
to have a president who can reach across the aisle and fashion important legislation with
the input from both parties.

PRESIDENT OBAMA: Governor Romney said this
has to be done on a bipartisan basis. This was a bipartisan idea. In fact, it was a Republican
idea. And Governor Romney, at the beginning of this
debate, wrote and said, what we did in Massachusetts could be a model for the nation.

And I agree
that the Democratic legislators in Massachusetts might have given some advice to Republicans
in Congress about how to cooperate, but the fact of the matter is, we used the same advisers,
and they say it's the same plan. It  when Governor Romney talks about this
board, for example  unelected board that we've created  what this is, is a group
of health care experts, doctors, et cetera, to figure out how can we reduce the cost of
care in the system overall, because the  there are two ways of dealing with our health care
crisis. One is to simply leave a whole bunch of people
uninsured and let them fend for themselves, to let businesses figure out how long they
can continue to pay premiums until finally they just give up and their workers are no
longer getting insured, and that's been the trend line. Or, alternatively, we can figure
out how do we make the cost of care more effective.

And there are ways of doing it. So at  at Cleveland Clinic, one of the
best health care systems in the world, they actually provide great care cheaper than average.
And the reason they do is because they do some smart things. They  they say, if a
patient's coming in, let's get all the doctors together at once, do one test instead of having
the patient run around with 10 tests. Let's make sure that we're providing preventive
care so we're catching the onset of something like diabetes.

Let's  let's pay providers
on the basis of performance as opposed to on the basis of how many procedures they've
they've engaged in. Now, so what this board does is basically identifies best practices
and says, let's use the purchasing power of Medicare and Medicaid to help to institutionalize
all these good things that we do. And the fact of the matter is that when "Obamacare"
is fully implemented, we're going to be in a position to show that costs are going down.
And over the last two years, health care premiums have gone up, it's true, but they've gone
up slower than any time in the last 50 years. So we're already beginning to see progress.
In the meantime, folks out there with insurance, you're already getting a rebate.

Let me make one last point. Governor Romney
says we should replace it. I'm just going to repeal it, but we can replace it with something.
But the problem is he hasn't described what exactly we'd replace it with other than saying
we're going to leave it to the states. But the fact of the matter is that some of
the prescriptions that he's offered, like letting you buy insurance across state lines,
there's no indication that that somehow is going to help somebody who's got a pre-existing
condition be able to finally buy insurance.

In fact, it's estimated that by repealing
"Obamacare," you're looking at 50 million people losing health insurance at a time when
it's vitally important. MR. LEHRER: Let's let the governor explain
what you would do if "Obamacare" is repealed. How would you replace it? What do you have
in mind? MR.

ROMNEY: Let  well, actually  actually
it's  it's  it's a lengthy description, but number one, pre-existing conditions are
covered under my plan. Number two, young people are able to stay on their family plan. That's
already offered in the private marketplace; you don't have  have the government mandate
that for that to occur. But let's come back to something the president
I agree on, which is the  the key task we have in health care is to get the costs
down so it's more affordable for families, and  and then he has as a model for doing
that a board of people at the government, an unelected board, appointed board, who are
going to decide what kind of treatment you ought to have.

PRESIDENT OBAMA: No, it isn't. MR. ROMNEY: In my opinion, the government
is not effective in  in bringing down the cost of almost anything. As a matter of fact,
free people and free enterprises trying to find ways to do things better are able to
be more effective in bringing down the costs than the government will ever be.

Your example
of the Cleveland clinic is my case in point, along with several others I could describe.
This is the private market. These are small  these are enterprises competing with each
other, learning how to do better and better jobs. I used to consult to businesses  excuse
me, to hospitals and to health care providers. I was astonished at the creativity and innovation
that exists in the American people.

In order to bring the cost of health care down, we
don't need to have a  an  a board of 15 people telling us what kinds of treatments
we should have. We instead need to put insurance plans, providers, hospitals, doctors on targets
such that they have an incentive, as you say, performance pay, for doing an excellent job,
for keeping costs down, and that's happening. Intermountain Health Care does it superbly
well. PRESIDENT OBAMA: They do.

MR. ROMNEY: Mayo Clinic is doing it superbly
well, Cleveland Clinic, others. But the right answer is not to have the federal government
take over health care and start mandating to the providers across America, telling a
patient and a doctor what kind of treatment they can have. That's the wrong way to go.
The private market and individual responsibility always work best.

PRESIDENT OBAMA: Let me just point out, first
of all, this board that we're talking about can't make decisions about what treatments
are given. That's explicitly prohibited in the law. But let's go back to what Governor Romney
indicated, that under his plan he would be able to cover people with pre-existing conditions.
Well, actually, Governor, that isn't what your plan does. What your plan does is to
duplicate what's already the law, which says if you are out of health insurance for three
months then you can end up getting continuous coverage and an insurance company can't deny
you if you've  if it's been under 90 days.

But that's already the law. And that doesn't
help the millions of people out there with pre-existing conditions. There's a reason
why Governor Romney set up the plan that he did in Massachusetts. It wasn't a government
takeover of health care.

It was the largest expansion of private insurance. But what it
does say is that insurers, you've got to take everybody. Now, that also means that you've
got more customers. But when Governor Romney says that he'll replace
it with something but can't detail how it will be in fact replaced, and the reason he
set up the system he did in Massachusetts is because there isn't a better way of dealing
with the pre-existing conditions problem, it  it just reminds me of  you know,
he says that he's going to close deductions and loopholes for his tax plan.

That's how it's going to be paid for. But
we don't know the details. He says that he's going to replace Dodd-Frank, Wall Street reform.
But we don't know exactly which ones. He won't tell us.

He now says he's going to replace
"Obamacare" and assure that all the good things that are in it are going to be in there and
you don't have to worry. And at some point, I think the American people
have to ask themselves, is the reason that Governor Romney is keeping all these plans
to replace secret because they're too good? Is  is it because that somehow middle-class
families are going to benefit too much from them? No, the  the reason is because when
we reform Wall Street, when we tackle the problem of pre-existing conditions, then,
you know, these are tough problems, and we've got to make choices. And the choices we've
made have been ones that ultimately are benefiting middle-class families all across the country. MR.

LEHRER: All right, we're going to move
to a  MR. ROMNEY: No, I  I have to respond to
that  MR. LEHRER: No, but  MR. ROMNEY:  which is  which is my experience
as a governor is if I come in and  and lay down a piece of legislation and say it's
my way or the highway, I don't get a lot done.

What I do is the same way that Tip O'Neill
and Ronald Reagan worked together some years ago. When Ronald Reagan ran for office, he
laid out the principles that he was going to foster. He said he was going to lower tax
rates. He said he was going to broaden the base.

You've said the same thing: You're going
to simplify the tax code, broaden the base. Those are my principles. I want to bring down the tax burden on middle-income
families. And I'm going to work together with Congress to say, OK, what are the various
ways we could bring down deductions, for instance? One way, for instance, would be to have a
single number.

Make up a number  25,000 (dollars), $50,000. Anybody can have deductions
up to that amount. And then that number disappears for high-income people. That's one way one
could do it.

One could follow Bowles-Simpson as a model and take deduction by deduction
and make differences that way. There are alternatives to accomplish the objective
I have, which is to bring down rates, broaden the base, simplify the code and create incentives
for growth. And with regards to health care, you had remarkable
details with regards to my pre-existing condition plan. You obviously studied up on  on my
plan.

In fact, I do have a plan that deals with people with pre-existing conditions.
That's part of my health care plan. And what we did in Massachusetts is a model for the
nation, state by state. And I said that at that time. The federal government taking over
health care for the entire nation and whisking aside the 10th Amendment, which gives states
the rights for these kinds of things, is not the course for America to have a stronger,
more vibrant economy.

MR. LEHRER: That is a terrific segue to our
next segment, and is the role of government. And let's see, role of government and it is
you are first on this, Mr. President.

The question is this. Do you believe  both
of you  but you have the first two minutes on this, Mr. President  do you believe
there's a fundamental difference between the two of you as to how you view the mission
of the federal government? PRESIDENT OBAMA: Well, I definitely think
there are differences. MR.

LEHRER: And  yeah. PRESIDENT OBAMA: The first role of the federal
government is to keep the American people safe. That's its most basic function. And
as commander in chief, that is something that I've worked on and thought about every single
day that I've been in the Oval Office.

But I also believe that government has the
capacity  the federal government has the capacity to help open up opportunity and create
ladders of opportunity and to create frameworks where the American people can succeed. Look,
the genius of America is the free enterprise system, and freedom, and the fact that people
can go out there and start a business, work on an idea, make their own decisions. But as Abraham Lincoln understood, there are
also some things we do better together. So in the middle of the Civil War, Abraham
Lincoln said, let's help to finance the Transcontinental Railroad.

Let's start the National Academy
of Sciences. Let's start land grant colleges, because we want to give these gateways of
opportunity for all Americans, because if all Americans are getting opportunity, we're
all going to be better off. That doesn't restrict people's freedom; that enhances it. And so what I've tried to do as president
is to apply those same principles.

And when it comes to education, what I've said is we've
got to reform schools that are not working. We use something called Race to the Top. Wasn't
a top-down approach, Governor. What we've said is to states, we'll give you more money
if you initiate reforms.

And as a consequence, you had 46 states around the country who have
made a real difference. But what I've also said is let's hire another
hundred thousand math and science teachers to make sure we maintain our technological
lead and our people are skilled and able to succeed. And hard-pressed states right now
can't all do that. In fact, we've seen layoffs of hundreds of thousands of teachers over
the last several years, and Governor Romney doesn't think we need more teachers.

I do,
because I think that that is the kind of investment where the federal government can help. It
can't do it all, but it can make a difference, and as a consequence, we'll have a better-trained
workforce, and that will create jobs, because companies want to locate in places where we've
got a skilled workforce. MR. LEHRER: Two minutes, Governor, on the
role of government, your view.

MR. ROMNEY: Well, first, I love great schools.
Massachusetts, our schools are ranked number one of all 50 states. And the key to great
schools: great teachers. So I reject the idea that I don't believe in great teachers or
more teachers.

Every school district, every state should make that decision on their own. The role of government  look behind us:
the Constitution and the Declaration of Independence. The role of government is to promote and protect
the principles of those documents. First, life and liberty.

We have a responsibility
to protect the lives and liberties of our people, and that means the military, second
to none. I do not believe in cutting our military. I believe in maintaining the strength of America's
military. Second, in that line that says, we are endowed
by our Creator with our rights  I believe we must maintain our commitment to religious
tolerance and freedom in this country.

That statement also says that we are endowed by
our Creator with the right to pursue happiness as we choose. I interpret that as, one, making
sure that those people who are less fortunate and can't care for themselves are cared by
by one another. We're a nation that believes we're all children
of the same God. And we care for those that have difficulties  those that are elderly
and have problems and challenges, those that disabled, we care for them.

And we look for
discovery and innovation, all these thing desired out of the American heart to provide
the pursuit of happiness for our citizens. But we also believe in maintaining for individuals
the right to pursue their dreams, and not to have the government substitute itself for
the rights of free individuals. And what we're seeing right now is, in my view, a  a trickle-down
government approach which has government thinking it can do a better job than free people pursuing
their dreams. And it's not working.

And the proof of that is 23 million people
out of work. The proof of that is one out of six people in poverty. The proof of that
is we've gone from 32 million on food stamps to 47 million on food stamps. The proof of
that is that 50 percent of college graduates this year can't find work.

PRESIDENT OBAMA: (Inaudible)  MR. ROMNEY: We know that the path we're taking
is not working. It's time for a new path. MR.

LEHRER: All right, let's go through some
specifics in terms of what  how each of you views the role of government. How do  education.
Does the federal government have a responsibility to improve the quality of public education
in America? MR. ROMNEY: Well, the primary responsibility
for education is  is of course at the state and local level. But the federal government
also can play a very important role.

And I.  And I agree with Secretary Arne Duncan.
He's  there's some ideas he's put forward on Race to the Top  not all of them but
some of them I agree with, and congratulate him for pursuing that. The federal government
can get local and  and state schools to do a better job. My own view, by the way, is I've added to
that.

I happen to believe  I want the kids that are getting federal dollars from IDEA
or  or Title I  these are disabled kids or  or poor kids or  or lower-income
kids, rather. I want them to be able to go to the school of their choice. So all federal
funds, instead of going to the  to the state or to the school district, I'd have
go  if you will, follow the child and let the parent and the child decide where to send
their  their  their student. MR.

LEHRER: How do you see the federal government's
responsibility to  as I say, to improve the quality of public education in this country? PRESIDENT OBAMA: Well, as I've indicated,
I think that it has a significant role to play. Through our Race to the Top program,
we've worked with Republican and Democratic governors to initiate major reforms, and they're
having an impact right now. MR. LEHRER: Do you think you have a difference
with your views and those of Governor Romney on  about education and the federal government? PRESIDENT OBAMA: You know, this is where budgets
matter because budgets reflect choices.

So when Governor Romney indicates that he wants
to cut taxes and potentially benefit folks like me and him, and to pay for it, we're
having to initiate significant cuts in federal support for education, that makes a difference. You know, his running mate, Congressman Ryan,
put forward a budget that reflects many of the principles that Governor Romney's talked
about. And it wasn't very detailed. This seems to be a trend.

But  but what it did do
is to  if you extrapolated how much money we're talking about, you'd look at cutting
the education budget by up to 20 percent. When it comes to community colleges, we are
seeing great work done out there all over the country because we have the opportunity
to train people for jobs that exist right now. And one of the things I suspect Governor
Romney and I probably agree on is getting businesses to work with community colleges
so that they're setting up their training programs  MR. LEHRER: Do you agree, Governor? PRESIDENT OBAMA: Let  let  let me just
finish the point.

MR. ROMNEY: Oh, yeah. Oh, yeah. PRESIDENT OBAMA: I suspect it'll be a small
agreement.

MR. ROMNEY: It's going over well in my state,
by the way, yeah. PRESIDENT OBAMA: The  where their partnering
so that  they're designing training programs, and people who are going through them know
that there's a job waiting for them if they complete them. That makes a big difference.
But that requires some federal support.

Let me just say one final example. When it
comes to making college affordable  whether it's two-year or four-year  one of the
things that I did as president was we were sending $60 billion to banks and lenders as
middle men for the student loan program, even though the loans were guaranteed. So there
was no risk for the banks or the lenders but they were taking billions out of the system. And we said, why not cut out the middle man?
And as a consequence, what we've been able to do is to provide millions more students
assistance, lower or keep low interest rates on student loans.

And this is an example of
where our priorities make a difference. Governor Romney, I genuinely believe, cares about education.
But when he tells a student that, you know, you should borrow money from your parents
to go to college, you know, that indicates the degree to which, you know, there may not
be as much of a focus on the fact that folks like myself, folks like Michelle, kids probably
who attend University of Denver just don't have that option. And for us to be able to make sure that they've
got that opportunity and they can walk through that door, that is vitally important  not
just to those kids. It's how we're going to grow this economy over the long term.

MR. LEHRER: We're running out of time. MR. ROMNEY: Jim, Jim  MR.

LEHRER: I'm certainly going give you a
chance to respond to that. Yes, sir, Governor. MR. ROMNEY: Mr.

Mr. President, you're
entitled, as the president, to your own airplane and to your own house, but not to your own
facts  (laughter)  all right? I'm  I'm not going to cut education funding. I don't
have any plan to cut education funding and grants that go to people going to college.
I'm planning on continuing to grow, so I'm not planning on making changes there. But you make a very good point, which is that
the  the place you put your money makes a pretty clear indication of where your heart
is.

You put $90 billion into  into green jobs. And  and I  look, I'm all in favor
of green energy. Ninety billion (dollars)  that  that would have  that would
have hired 2 million teachers. Ninety billion dollars.

And these businesses  many of
them have gone out of business. I think about half of them, of the ones have been invested
in, they've gone out of business. A number of them happened to be owned by  by people
who were contributors to your campaigns. Look, the right course for  for America's
government  we were talking about the role of government  is not to become the economic
player picking winners and losers, telling people what kind of health treatment they
can receive, taking over the health care system that  that has existed in this country
for  for a long, long time and has produced the best health records in the world.

The
right answer for government is to say, how do we make the private sector become more
efficient and more effective? How do we get schools to be more competitive?
Let's grade them. I propose we grade our schools so parents know which schools are succeeding
and failing, so they can take their child to a  to a school that's being more successful.
I don't  I don't want to cut our commitment to education; I wanted to make it more effective
and efficient. And by the way, I've had that experience.
I don't just talk about it. I've been there.

Massachusetts schools are ranked number one
in the nation. This is not because I didn't have commitment to education. It's because
I care about education for all of our kids. MR.

LEHRER: All right, gentlemen, look  PRESIDENT OBAMA: Jim, I  (inaudible)  MR. LEHRER: Excuse me, one sec  excuse,
me sir. (Laughter.) We've got  we've got  barely have three minutes left. I'm not
going to grade the two of you and say you've  your answers have been too long or I've
done a poor job  PRESIDENT OBAMA: You've done a great job,
Jim.

MR. LEHRER: Oh, well, no. But the fact is,
government  the role of government and governing, we've lost a (pod ?), In other
words, so we only have three minutes left in the  in the debate before we go to your
closing statements. And so I want to ask finally here  and remember, we've got three minutes
total time here.

And the question is this: Many of the legislative
functions of the federal government right now are in a state of paralysis as a result
of partisan gridlock. If elected in your case, if re-elected in your case, what would you
do about that? Governor? MR. ROMNEY: Jim, I had the great experience
it didn't seem like it at the time  of being elected in a state where my legislature
was 87 percent Democrat, and that meant I. Figured out from day one I had to get along
and I had to work across the aisle to get anything done.

We drove our schools to be
number one in the nation. We cut taxes 19 times. MR. LEHRER: Well, what would you do as president? MR.

ROMNEY: We  as president, I will sit
down on day one  actually the day after I get elected, I'll sit down with leaders
the Democratic leaders as well as Republican leaders and  as we did in my state. We
met every Monday for a couple hours, talked about the issues and the challenges in the
in the  in our state, in that case. We have to work on a collaborative basis  not
because we're going to compromise our principle(s), but because there's common ground. And the challenges America faces right now
look, the reason I'm in this race is there are people that are really hurting today in
this country, and we face  this deficit could crush the future generations.

What's
happening in the Middle East? There are developments around the world that are of real concern.
And Republicans and Democrats both love America, but we need to have leadership  leadership
in Washington that will actually bring people together and get the job done and could not
care less if it's a Republican or a Democrat. I've done it before. I'll do it again. MR.

LEHRER: Mr. President. PRESIDENT OBAMA: Well, first of all, I think
Governor Romney's going to have a busy first day, because he's also going to repeal "Obamacare,"
which will not be very popular among Democrats as you're sitting down with them. (Laughter.) But look, my philosophy has been I will take
ideas from anybody, Democrat or Republican, as long as they're advancing the cause of
making middle-class families stronger and giving ladders of opportunity into the middle
class.

That's how we cut taxes for middle-class families and small businesses. That's how
we cut a trillion dollars of spending that wasn't advancing that cause. That's how we
signed three trade deals into law that are helping us to double our exports and sell
more American products around the world. That's how we repealed "don't ask, don't tell." That's
how we ended the war in Iraq, as I promised, and that's how we're going to wind down the
war in Afghanistan.

That's how we went after al-Qaida and bin Laden. So we've  we've seen progress even under
Republican control of the House or Representatives. But ultimately, part of being principled,
part of being a leader is, A, being able to describe exactly what it is that you intend
to do, not just saying, I'll sit down, but you have to have a plan. Number two, what's important is occasionally
you've got to say now to  to  to folks both in your own party and in the other party.
And you know, yes, have we had some fights between me and the Republicans when they fought
back against us, reining in the excesses of Wall Street? Absolutely, because that was
a fight that needed to be had.

When  when we were fighting about whether or not we were
going to make sure that Americans had more security with their health insurance and they
said no, yes, that was a fight that we needed to have. And so part of leadership and governing
is both saying what it is that you are for, but also being willing to say no to some things. And I've got to tell you, Governor Romney,
when it comes to his own party during the course of this campaign, has not displayed
that willingness to say no to some of the more extreme parts of his party. MR.

LEHRER: That brings us to closing statements.
There was a coin toss. Governor Romney, you won the toss, and you elected to go last. So you have a closing two minutes, Mr. President.

PRESIDENT OBAMA: Well, Jim, I want to thank
you and I want to thank Governor Romney, because I think this was a terrific debate and I very
much appreciate it. And I want to thank the University of Denver. You know, four years ago we were going through
a major crisis, and yet my faith and confidence in the American future is undiminished. And
the reason is because of its people.

Because of the woman I met in North Carolina who decided
at 55 to go back to school because she wanted to inspire her daughter, and now has a new
job from that new training that she's gotten. Because of the company in Minnesota who was
willing to give up salaries and perks for their executives to make sure that they didn't
lay off workers during a recession. The auto workers that you meet in Toledo or Detroit
take such pride in building the best cars in the world  not just because of a paycheck,
but because it gives them that sense of pride, that they're helping to build America. And so the question now is, how do we build
on those strengths? And everything that I've tried to do and everything that I'm now proposing
for the next four years in terms of improving our education system, or developing American
energy, or making sure that we're closing loopholes for companies that are shipping
jobs overseas and focusing on small businesses and companies that are creating jobs here
in the United States, or  or closing our deficit in a responsible, balanced way that
allows us to invest in our future  all those things are designed to make sure that
the American people, their genius, their grit, their determination is  is channeled, and
and  and they have an opportunity to succeed.

And everybody's getting a fair shot and everybody's
getting a fair share. Everybody's doing a fair share and everybody's playing by the
same rules. You know, four years ago I said that I'm not
a perfect man and I wouldn't be a perfect president. And that's probably a promise that
Governor Romney thinks I've kept.

But I also promised that I'd fight every single day on
behalf of the American people and the middle class and all those who are striving to get
in the middle class. I've kept that promise and if you'll vote
for me, then I promise I'll fight just as hard in a second term. MR. LEHRER: Governor Romney, your two-minute
closing.

MR. ROMNEY: Thank you, Jim and Mr. President.
And thank you for tuning in this evening. This is a  this is an important election.
And I'm concerned about America.

I'm concerned about the direction America has been taking
over the last four years. I know this is bigger than election about the two of us as individuals.
It's bigger than our respective parties. It's an election about the course of America  what
kind of America do you want to have for yourself and for your children. And there really are two very different paths
that we began speaking about this evening.

And over the course of this month we're going
to have two more presidential debates and vice presidential debate. We'll talk about
those two paths. But they lead in very different directions. And it's not just looking to our
words that you have to take in evidence of where they go; you can look at the record.

There's no question in my mind that if the
president were to be re-elected you'll continue to see a middle-class squeeze with incomes
going down and prices going up. I'll get incomes up again. You'll see chronic unemployment.
We've had 43 straight months with unemployment above 8 percent. If I'm president, I will
create  help create 12 million new jobs in this country with rising incomes.

If the president's re-elected, "Obamacare"
will be fully installed. In my view, that's going to mean a whole different way of life
for people who counted on the insurance plan they had in the past. Many will lose it. You're
going to see health premiums go up by some $2,500 per  per family.

If I'm elected,
we won't have "Obamacare." We'll put in place the kind of principles that I put in place
in my own state and allow each state to craft their own programs to get people insured.
And we'll focus on getting the cost of health care down. If the president were to be re-elected, you're
going to see a $716 billion cut to Medicare. You'll have 4 million people who will lose
Medicare advantage. You'll have hospitals and providers that'll no longer accept Medicare
patients.

I'll restore that $716 billion to Medicare. And finally, military. If the president's
re-elected, you'll see dramatic cuts to our military. The secretary of defense has said
these would be even devastating.

I will not cut our commitment to our military. I will
keep America strong and get America's middle class working again. Thank you, Jim. MR.

LEHRER: Thank you, Governor. Thank you, Mr. President. The next debate will be the vice presidential
event on Thursday, October 11th at Center College in Danville, Kentucky.

For now, from
the University of Denver, I'm Jim Lehrer. Thank you, and good night. (Cheers, applause.).