PRESIDENT OBAMA: Well, first of all, Julianna, let’s take the example of this year and the fiscal cliff. I didn’t say that I would not have any conversations at all about extending the Bush tax cuts. What I said was, we weren’t going to extend Bush tax cuts for the wealthy. And we didn’t.

Now, you can argue that during the campaign I said -- I set the criteria for wealthy at 250(,000 dollars) and we ended up being at 400(,000 dollars), but the fact of the matter is, millionaires, billionaires are paying significantly more in taxes, just as I said. So for -- for -- you know, from the start, my concern was making sure that we had a tax code that was fair and that protected the middle class, and my biggest priority was making sure the middle-class taxes did not go up.

You know, the difference between this year and 2011 is the fact that we’ve already made $1.2 trillion in cuts. And at the time, I indicated that there cuts that we could sensibly make that would not damage our economy, would not impede growth. I said at the time I think we should pair it up with revenue in order to have an overall balanced package. But my own budget reflected cuts in discretionary spending. My own budget reflected the cuts that needed to be made. And we’ve made those cuts.

Now, the challenge going forward is that we’ve now made some big cuts, and if we’re going to do further deficit reduction, the only way to do it is in a balanced and responsible way. The alternative is for us to go ahead and cut commitments that we’ve made on things like Medicare or Social Security or Medicaid, and for us to fundamentally change commitments that we’ve made to make sure that seniors don’t go into poverty or that children that are disabled are properly cared for.

For us to change that contract we’ve made with the American people, rather than look at options like closing loopholes for corporations that they don’t need, that points to a long-term trend in which, you know, we have fundamentally, I think, undermined what people expect out of this government, which is that parties sit down, they negotiate, they compromise, but they also reflect the will of the American people, that you don’t have one narrow faction that is able to simply dictate 100 percent of what they want all the time, or otherwise threaten that we destroy the American economy.

Another way of putting it is, we got to break the habit of negotiating through crisis over and over again. And now we -- now’s as good of a time as any, at the start of my second term, because if we continue down this path, then there’s really no stopping the principle. I mean, literally -- even in divided government, even where we’ve got a Democratic president and a Democratic Senate, then a small group in the House of Representatives could simply say, you know, every two months, every three months, every six months, every year, we are going to more and more change the economy in ways that we prefer, despite strong objections of Americans all across the country, or otherwise we’re going to have America not pay its bills.

And you know, that is no way for us to do business.

And by the way, I would make the same argument if it was a Republican president and a Republican Senate and you had a handful of Democrats who were suggesting that we are going to hijack the process and make sure that either we get our way a hundred percent of the time or otherwise, you know, we are going to default on America’s obligations.