From nbc news in washington, the worlds longest running news program. This is meet the press. Thats one of our key jobs, helping to restore american faith, what the stock market is all about. I have a certain vision for what this country is going to be for my kids. That gives me purpose. Optimistic yesterday, but we dont yet see an agreement. Now the pressure is on congress to produce. If they dont, what ive said is that in the senate, we should go ahead and introduce legislation that would make sure middle class taxes stay where they are and there should be an up or down vote. Everybody should have a right to vote on that. If republicans dont like it, they can vote no. But i actually think theres a majority support for making sure the middle class families are held harmless. If you go over to cliff, whats the impact on the markets which have been pretty confident now it would get done . Its hard to speculate on the market, but obviously, i think business and investors will feel more negative about the economy next year. If you look at projections of 2013, people generally felt the economy would continue to grow, housing would continue to improve, but whats been holding us back is the dysfunction here in washington. And if, you know, people start seeing that on january 1st this problem still hasnt been solved, that we havent seen the deficit reduction that we could have had had the republicans been willing to take the deal that i gave them, if they say that peoples taxes have gone up, which means Consumer Spending is going to be depressed, then, obviously, thats going to have an adverse reaction in the markets. What about automatic spending cuts . Those take effect january 1st, as well. Do they have to be part of this deal . Youve got half of those cuts in defense law . Well, congress agreed they would cut an additional 1. 2 trillion in spending. They put a committee together to try to come up with those numbers. They didnt figure out how to do it. So what we now have is a situation where these automatic spending cuts go into place. Now, if we have raised some revenue by the wealthy paying a little bit more, that would be sufficient to turn off what is socalled the sequester, these automatic spending cuts, and that also would have a better outcome for our economy longterm. But, you know, so far, at least, congress has not been able to get this stuff done, not because democrats in congress dont want to go ahead and cooperate, but because i think its been very hard for Speaker Boehner and republican leader mcconnell to accept the fact that taxes on the wealthiest americans should go up a little bit as part of an overall deficit reduction package. You talk about a dysfunction in washington. You sign this legislation setting up a fiscal cliff 17 months ago. How accountable are you for the fact that washington cant get anything done and that we are at this deadline again . Well, i have to tell you, david, if you look at my track record over the last two years, i cut spending by over 1 trillion in 2011. I campaigned on the promise of being willing to reduce the deficit in a serious way, in a balanced approach of spending cuts and tax increases on the wealthy while keeping middle class taxes low. I put forward a very specific proposal to do that. I negotiated with Speaker Boehner in good faith and moved more than halfway in order to achieve a grand bargain. I offered over 1 trillion in additional spending cuts so that we would have 2 of spending cuts for every 1 increased revenue. I think anybody objectively who has looked at this would say we have put forward not only a sensible dooeg deal, but one that has the support of the majority of the American People including close to half the republicans. When they say Leadership Falls on you, mr. President , you dont have a role here in breaking this impact . David, you know, at a certain point, if folks cant say yes to good offers, then i also have an obligation to the American People to make sure that the entire burden of deficit reduction doesnt fall on seniors who are relying on medica medicare. I also have an obligation to make sure that families who rely on medicare to take care of a disabled child arent carrying this burden entirely. I also have an obligation to middle class family toes make sure that theyre not paying higher taxes when millionaires and billionaires are not having to pay higher taxes. There is a basic fairness that is at stake in this whole thing that the American People understand and they lynched to an entire years debate about it. They made a clear decision about that the approach they prefer, which is a balanced, responsible package, they rejected the notion that the economy grows best from the top down, they believe that the economy grows best from the middle class out and at a certain point, you know, it is very important for republicans in congress to be willing to say we understand were not going to get 100 . We are willing to compromise in a serious way in order to solve problems as opposed to be worrying about the next election. You say republicans have a hard time saying yes, particularly to you. Yeah. What is it about you, prosecute president , that you think is so hard to say yes to . You know, thats something youre probably going to have to ask them. You know, david, you follow this stuff pretty carefully. The offers that ive made to them have been so fair that a lot of democrats get mad at me. I mean, i offered to make some significant changes to our entitlement programs in order to reduce the deficit. I offered not only 1 trillion in over 1 trillion in spending cuts over the next ten years, but these changes would result in even more savings in the next ten years and would solve our deficit prab for a decade. They say the biggest priority is making sure we deal with the deficit in a serious way. But the way theyre behaving is by saying their only priority is making sure taxes are protected on the wealthy. I think at some point whats important is that they listen to the American People. Now, i think that over the next 48 hours, my hope is that the people recognize that regardless of partisan differences, our top priority has to be to make sure that taxes on middle class families do not go up that would hurt our economy badly. We can get that done. Democrats and republicans both say they dont want taxes to go up on middle class families. Thats something we all agree on. If we can get that done, that takes a big bite out of the fiscal cliff. It avoids the worst outcomes and were then going to have some tough negotiation necessary terms of how we continue to reduce the deficit, grow the economy, create but this fight comes back. Now, i want to ask you specifically about entitlements, medicare and Social Security. Are you prepared in the first year of your second term to significantly reform those two programs, to go beyond the cuts youve suggested to benefits in medicare, that your own dead commission suggested you would have to do if you were going to shore up medicare at least . Are you prepared to do that in your first year of a second term . What ive said is i am prepared to do everything i can to make sure that medicare and Social Security are there not just for this generation and for future generations. You have to talk tough to seniors. I already have. One of the proposals we made is something called change cpi which basically makes an adjustment in terms of how inflation is calculated on Social Security, highly unpopular among democrats, not something supported by aarp, but in pursuit of strengthening Social Security for the longterm, im willing to make those decisions. What im not willing to do is to have the entire burden of deficit reduction rest of the shoulders of seniors, making students pay higher student loan rates, ruining our capacity to invest in things like basic research that help our economy grow. Those are the things that im not willing to do. And so would you commit to that first year of your second term getting significant reform done telling congress we have to do it in the first year . David, i want to be very clear. You are not only going to cut your way to prosperity. One of the fallacies, i think, that has been promoted is this notion that deficit reduction is only a matter of cutting programs that are really important to seniors, students and so forth. That has to be part of the mix. But what i ran on and what the American People elected me to do was to put forward a balanced approach, to make sure that theres shared sacrifice, that everybody is doing a little bit more. And it is very difficult for me to say too a Senior Citizen or a student or a mom with a disabled kid, you are going to have to do with less, but were not going to ask billionaires or millionaires to do more. Thats not an approach that the American People think is right and by the way, historically, thats not how we grow an economy. We grow an economy when folks in the middle, folks who are striving to get into the middle class, when they do well. I asking but time frame, because as you well know, second term president now, your Political Capital is limited. So what is your single priority of the second term . What is the equivalent to health care . There are a couple of things we need to get done. Ive said fixing our broken immigration system is a top priority. I would introduce legislation in the first year to get that done. I think we have talked about it long enough. We know how we can fix it. We can do it in a comprehensive way that the American People support. Thats something we should get done. The second thing that weve got to do is to stabilize the economy and make sure its growing. Part of that is deficit reduction. Part of it is also making sure that were investing, for example, in rebuilding our infrastructure, which is broken. And, you know, if we are putting people back to work rebuilding our roads, our bridges, our schools, in part, paying for it by some of these broader, longterm deficit reduction measures that need to take place, that will grow our economy at a time while setting our path for longterm fiscal stability. Number three, we have a longterm opportunity around energy. America can become an energy exporter. How do we do that in a way that deals with some of the environmental challenges that we have at the same time . Thats going to be a third thing. But the most immediate thing ive got to do, starting on january 1st, if congress doesnt act before the end of the year is make sure that taxes are not going up on middle class families. Because it is going to be very hard for the economy to sustain its Growth Trends if suddenly we have a huge fight taken out of the average americans paycheck. New gun regulations. Mayor bloomberg of new york told me a couple weeks ago on this program that ought to be your number one agenda item. You know how hard this is. Do you have the stomach for the political fight for new gun control laws . You know, david, i think anybody who was up in newtown who talked to the parents, who talked to the families, understands that something fundamental in america has to change. And all of us have to do some soul serving, including me as president , that we allow a situation in which 20 precious, small children are getting gunned down in a classroom and ive been very clear that, you know, an Assault Rifle ban, banning these high capacity clips, background checks, that theyre a set of issues that i have historically supported and will continue to support. But can you get it done . So the question is are we going to be able to have a National Conversation and move something through congress . Id like to get it done in the first year. I will put forward a very specific proposal based on the recommendations that joe bidens task force is putting together. But its not going to work. It didnt work before, its not going to work now. My response is something has to work. It is not enough for us to say this is too hard, so were not going to try. So what i intend to do is i will call all the stakeholders together. I will meet with republicans, i will meet with democrats. I will talk to anybody. I think theres a variety majority of responsible gun owners out there who recognize we cant have a situation in which somebody with, you know, severe psychological problems is able to get the kind of high capacity weapons that this individual in newtown obtained and gunned down our kids. And, yes, its going to be hard. Should we have an armed guard at every school in the country . Thats what the nra told me last week. Im not going to prejudge the recommendations that are given to me. I am skeptical that the only answer is putting more guns in schools. And i think the vast majority of the American People are skeptical that that somehow is going to solve our problem. Here is the bottom line. Were not going to get this done unless the American People decide its important. So this is not going to be simply a matter of on me spending Political Capital. One of the things that you learn and i have now been in this office for four years is the old adage of abraham lincoln. With public opinion, theres nothing you cant do. And without public opinion, theres very little you can get done in this town. So im going to be putting forward a package and im going to be putting my full weight behind it and is im going to be making an argument to the American People about why this is important and why we have to do everything we can to make sure that Something Like what happened at sandy hook elementary does not happen again. Ultimately, the way this is going to happen is because the American People say, thats right. We are willing to make different choices for the country and we support those in congress who are willing to take those actions. And will there be resistance . Absolutely, there will be resistance. And the question then becomes whether we are actually shook up enough by what happened here, that it does not just become another routine episodes where it gets a lot of attention for a couple of weeks and then it drifts away. It certainly wont feel like that to me. This is something that you know, that was the worst day of my presidency and its not something that i want to see repeated. Let me ask you about a couple of Foreign Policy notes. After the attack in benghazi, is there a need for more accountability this doesnt happen again and do you know who was behind the attack at this point . Two points. Number one, i think tom pickrick and mike mullen who headed up the review board did a very thorough job in identifying what were some severe problems in diplomatic security. And they provided us with a series of recommendations. Many of them were already starting to be implemented. Secretary clinton has indicated that she is going to implement all of them. What i my message to the state department has been very simple. And that is were going to solve this. Were not going to be defensive about it. Were no pretend that this was not a problem. This was a huge problem and were going to implement every single recommendation thats been put forward. Some individuals have been held accountable inside of the state department and what ive said is that we are going to fix this to make sure this does not happen again because these are folks that i send into the field. We understand that there are dangers involved. But when you read the report and it confirms what we had already seen based on some of our internal reviews, there was just some sloppiness, not intentional, in terms of how we secure embassies in areas where you essentially dont have governments that have a lot of capacity to protect those embassies. So were doing a thorough review. Not only will we implement the recommendations that were made, but well try to do more than that. With respect to who carried it out, thats an ongoing investigation. The fbi has sent individuals to libya repeatedly. We have some very good leads. But this is not something im going to be ad at liberty to talk about right now. In the politics, in the back and forth of this, do you feel like you let your friend, susan rice, hang out there in this . No. First of all, i was very clear that susan has been an outstanding u. N. Ambassador for the united states. She appeared on a number of Television Shows reporting what she and we understood to be the best information at the time. This was a politically motivated attack on her. I mean, of all the people in my National Security team, they probably had the least to do with anything that happened in benghazi. Why she was targeted individually for the kind of attacks that she was subjected to is was puzzling to me and i was very clear in the days after those attacks that they werent acceptable. So, you know, the good thing is i think she will continue to serve at the u. N. And do an outstanding job and i think that most americans recognize that these were largely politically motivated attacks as opposed to being justified. You have another series of cabinet choices to make. Former senator chuck hagel has come under criticisms for comments he made including about another former ambassador during the clinton years that being gay was an inhibiting factor of being gay to do an effective job. Is there anything about chuck hagels statements or comments that are disqualifying to you about him running the Justice Department . First of all, i havent made a decision who to nomination. My number one criteria will be who is going to do the best job in america. Anything you see disqualifying him . No. Hes a patriot. Hes somebody who has done extraordinary work in the senate, somebody who served this country with valor in vietnam and somebody who is currently serving on any intelligence Advisory Board and doing an outstanding job. So i havent made a decision on this. With respect to the particular comments that you quoted, he apologized for it and i think its a testimony wto what has been a positive change over the last decade in terms of peoples attitudes about gays and lesbians serving our country. And thats something that im very proud to