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President Bush Holds News Conference; Obama on Foreign Policy

Aired July 15, 2008 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


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QUESTION: And this is a body that they have ignored. What are your thoughts about what's happening with the Sudan?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes. Well, we're not a member of the ICC, so we see how that plays out.

My thought on Sudan is, is that the United Nations needs to work with this current government to get those troops in to help save lives -- AU Hybrid Force. I talked to --- you know, Williamson, who's a special envoy to Sudan, yesterday.

There's two aspects to the Sudanese issue. One is the north/south agreement, and he was talking about the need to make sure that there is a clear understanding about how oil revenues will be shared between north and south in a certain part of the border region there so as to make sure that, you know, that there is -- that this agreement that Ambassador Danforth negotiated stays intact and stays full.

And the other aspect obviously is Darfur. And that's a very, very complex issue. And we're trying to make -- we're trying to work with the rebel groups so that they speak more with one voice. Trying to work with Bashir to make sure that he understands that there will be continued sanctions if he doesn't move forward.

We're trying to help get the AU troops in Africa, throughout Africa, into Sudan. And we're working with the French on the issue of Chad.

And it's a complex situation, and sadly enough, you know, innocent people are being displaced and are losing their life. And it's very difficult and unacceptable.

And as you know, I made the decision not to unilaterally send troops. Once that decision was made, then we had to rely upon the United Nations. And I brought the issue up with the G-8, with our partners there. There's the same sense of consternation and a same sense of frustration that things haven't moved quicker.

I talked to Ban Ki-moon about the issue and he told me -- I think he told me that by the end of this year, you know, a full complement of aid troops will be there. And then the question is, will the government help, you know, expedite the delivery of humanitarian aid?

Another question? QUESTION: Yes. On the...

BUSH: When will the economy turn around?

QUESTION: Yes.

BUSH: I'm not an economist, but I do believe that we're growing. And I can remember, you know, this press conference here, many people yelling "recession" as if you're economists. And I'm an optimist. You know, I believe there's a lot of positive things for our economy.

But I will tell you it's not growing the way it should. And I'm sorry people are paying as high of gasoline prices as they are. And all I know is good policy will help expedite, you know, a -- will strengthen our economy.

QUESTION: Do you think it will change when you leave office?

BUSH: I certainly hopes it changes tomorrow. But it's -- it's -- I'm also realistic to know things don't change on a dime.

But nevertheless, the economy is growing. There's obviously financial uncertainty. We've talked about the decisions on the GSEs here. People need to know that if they've got a deposit in a commercial bank, the government will make good up to $100,000 worth of their deposit.

You know, there's no question it's a time of uncertainty. There's a lot of events taking place at the same time. But we can pass some good law to help expedite the recovery.

One such law is a good piece of housing legislation. And the Congress needs to get moving on it. Another such law is to send a signal that we're willing to explore for oil here at home.

I fully understand that this is, you know, a transition period away from hydrocarbons, but we ought to be wise about how we, you know, use our own resources. I think it would be a powerful signal if we announced that we're really going to get after it when it comes to oil shale.

There's enormous reserves in the western states. And I think if the world saw that we were willing to, you know, put a focus, concerted effort on using new technologies to bring those reserves to bear, which would then relieve some pressure on gasoline prices, it would have an impact.

The other thing is, is that, I'm sure you know this, April, but we haven't built a new refinery in the United States since the early '70s. It makes no sense. And yet, you try to get one permitted, it is unbelievably difficult to do.

People aren't willing to risk capital if they're deeply concerned about how their capital is going to be tied up in lawsuits or regulations. And we import a lot of gasoline, refined product, from overseas. So there's some things we can do to send signals that it's important that we can get the economy -- you know, take advantage of the positive aspects and get it moving stronger again.

The other thing is trade. It is -- I don't understand the decision on the Colombia Free Trade Agreement.

The Congress has given preferential treatment to goods coming out Colombia through the Andean Trade Preference Act. In other words, Colombia businesses can sell into our country relatively duty-free, and yet we don't have the same -- we don't get the same treatment.

Now, why does that make sense? It doesn't.

You know, trade -- our trade or exports have helped keep the economy growing, April, as paltry as it may be. Now, shouldn't it make sense for us to continue to open up further opportunities to sell goods? I think it does. I do not understand why it's OK for Colombia to be able to sell into our country close to duty-free and we don't have the same advantage.

And secondly, turning our back on somebody like Uribe makes no sense at all. He is a courageous fighter against terrorists, and yet our Congress won't even bring up a free trade agreement with Colombia.

Anyway, it's a -- politics is just choking good sense.

And the other thing is, is that once we get moving on Colombia, we need to get moving on, you know, Panama and South Korea. It's in our country's interest we do that.

Olivier (ph). Oliver.

QUESTION: Yes, sir. A follow-up on...

QUESTION: (OFF-MIKE)

QUESTION: Following up on...

BUSH: I knew what it is. I was just waiting (INAUDIBLE).

Yes, Olivier?

QUESTION: Thank you, sir. Following up on Brett Baier's question...

BUSH: What was the question, Olivier? I'm 62. I'm having trouble remembering a lot of things.

QUESTION: It was about Afghanistan, sir.

BUSH: Good, yes.

QUESTION: OK. And President...

BUSH: I'm remembering now.

QUESTION: Afghan President Hamid Karzai has blamed Pakistan's intelligence services for a recent terrorist attack in his country. And recent reporting suggests that al Qaeda has regrouped to pre- September 11th levels along the border between Pakistan and Afghanistan.

Is President Karzai correct? And do you think the new government in Pakistan is willing and is able to fight the terrorists?

BUSH: Well, first of all, we'll investigate his charge. And we'll work with his service to get to the bottom of his allegation.

No question, however, that some extremists are coming out of parts of Pakistan and Afghanistan. And that's troubling to us. It's troubling to Afghanistan. And it should be troubling to Pakistan.

We share a common enemy. That would be extremists who use violence to either disrupt democracy or prevent democracy from taking hold.

Al Qaeda is -- they're there. We have hurt al Qaeda hard, hit them hard and hurt them, and around the world, including in Pakistan. And we will continue to keep the pressure on al Qaeda with our Pakistan friends.

I certainly hope that the government understands the dangers of extremists moving in their country. I think they do. As a matter of fact, we'll have an opportunity to explore that further on Monday with the prime minister of Pakistan.

Pakistan is an ally, Pakistan is a friend. And I repeat, all three countries, United States, Pakistan and Afghanistan, share a common enemy.

I remember very well the meeting I had at the White House with President Musharraf and President Karzai. And we talked about the need for cross-border cooperation to prevent dangerous elements from training and coming into Afghanistan. And then, by the way, returning home with a skill level that could be used against the government.

And, you know, there was some hopeful progress made. Obviously it's still a tough fight there. And we were heartened by the provincial elections in that part of the world.

We will continue to work to help the government, on the one hand, deal with extremists, on the other hand, have an effective counterinsurgency strategy that uses aid to foster economic development. And it's a challenge, and the three of us working together can deal with the challenge a lot better than if we don't work together.

OK, I've enjoyed it. Thank you very much for your time. Appreciate it.

HEIDI COLLINS, CNN ANCHOR: There you have a pretty lengthy press conference by obviously President Bush there, discussing all kinds of topics. Not quite sure if there was a topic he did not address.

Obviously talking about Freddie Mac and Fannie Mae. Talking about energy and the offshore drilling, the ban that he wants lifted. It happened over the weekend. GDP, I could go on and on -- Iraq and Afghanistan, Colombian free trade, all of that.

First, we want to get over to CNN's Elaine Quijano. Pardon me.

Do we want to go to Elaine or Gerri?

Let's go to Gerri.

TONY HARRIS, CNN ANCHOR: All right.

COLLINS: It's amazing how that little voice in my ear tells me just what to do.

Gerri, I understand that you need to get ready for your show. It's coming up very shortly...

GERRI WILLIS, CO-HOST, "ISSUE #1": That's very kind.

COLLINS: ... at noon. So we want to start with you.

And I am interested in a couple of things the president said regarding specifically the economy. He brought up gross domestic product, saying that, you know, it didn't grow as much as he wanted to, but it still is growth. And he also brought up this Fannie Mae and Freddie Mac situation, saying that, you know, it's not really a buyout because these are still privately owned companies owned by the shareholders.

WILLIS: That's right.

COLLINS: So those two topics for us.

WILLIS: Well, exactly. You know, he said the economy has shown remarkable resilience, that productivity is growing, trade is growing. But you're right, it's that GDP that's the main measure of the economy's health and growth. It's not growing as much as they would like.

He said that a second stimulus package which someone asked him about, not on -- not on his agenda yet. He still wants to see how the current one works into the economy. Clearly, he's not happy with growth, but he says at least we have some at this point.

On the topic of Freddie Mac and Fannie Mae, two quasi-government institutions that the federal government, Treasury Secretary Henry Paulson moved to stabilize over the weekend, he said the system is sound. He said the banking system is sound.

He said people need to take a very deep breath. He even recalled his own anecdote about being in a bank when there was a run on the bank and how it was really driven by emotion and not fundamentals.

COLLINS: Yes, isn't it always?

WILLIS: Yes, frankly. Yes. And he noted, of course, as we've been talking about on air, that the government stands behind any account at $100,000 or less and, of course, behind any retirement account, which is critically important to folks out there, of $250,000 or less. You should know that he said that what the federal government is doing to help Freddie Mac and Fannie Mae, two institutions critical to the mortgage markets, he said it is not a bailout despite the fact that the government is going to offer a credit line, a very substantial one at that, should Congress approve it. And he also said that these two entities need to remain private despite the fact, of course, they're getting a lot of public dollars here.

So, he said he wanted to calm nerves on the topic of this banking crisis we seem to be in right now. As you know, Wall Street, of course, looking at every bank imaginable, scrutinizing them for issues.

I should note that when the president started speaking, we were down about 200 points.

COLLINS: Yes. We're watching.

WILLIS: We've had some improvement here. So it sounds like the markets at least were -- found his comments somewhat reassuring.

COLLINS: Yes, a change of about 130 points or so. We were down more than 200.

WILLIS: Right. A little rebound.

COLLINS: Yes, interesting.

WILLIS: We'll see if it holds.

COLLINS: Yes. Yes, we will.

All right. Appreciate that. Thanks, Gerri. We'll see you coming up at noon.

WILLIS: My pleasure. All right.

COLLINS: Thank you.

HARRIS: And let's get to our White House correspondent, Elaine Quijano, who joins us now.

And Elaine, some of the highlights that we anticipated the president talking about he, in fact, did. According to the guidance you sent along this morning, the president talking about his plan to lift the executive branch's ban on the prohibition on offshore exploration, the need for Congress to move on some appropriations bills, the overall state of the economy. But he did spend some time, as was just noted by Heidi and Gerri, trying to ease some of the concerns, chiefly that the banking sector is in trouble.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Yes. I think his message can really be summed up on the economy, anyway, in two words, that are, don't worry. That's basically what the president is trying to do, is quell some of these fears that have really surfaced here over the last days and weeks, specifically those images, as you remember, of people lining outside IndyMac Bank, essentially making a run on the bank.

So we heard the president say time and time again throughout the course of the news conference, look, the federal government will stand behind any deposits that you make of up to $100,000, so essentially there's nothing to fear here. At the same time, the president talking as well about Fannie Mae and Freddie Mac, and arguing once more that, despite the fact that growth is not necessarily where the U.S. would like it to be, that the fundamentals of the economy are sound.

HARRIS: Great.

Elaine Quijano at the White House for us.

Elaine, thank you. I think we cut you a little short because presumptive Democratic presidential nominee Barack Obama is on the stage ready to lay out his strategy for Iraq. And kind of an odd juxtaposition.

You had the president definitely on focus, issue #1, talking about the economy, not exclusively, but certainly spending a lot of time talking about the economy. And you will have Barack Obama now delivering what his campaign is calling a major policy speech on Iraq. He is expected to call the Iraq war a distraction and say the emphasis should be shifted to Afghanistan.

Lee Hamilton introducing Barack Obama at this time, former congressman. Let's listen in just a moment here.

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LEE HAMILTON (D), FMR. CONGRESSMAN: ... because the attendants did not recognize him. They asked to see his identification.

Now, keep in mind, this is Washington, D.C., the red-hot center of this country's political universe. So I said to myself, "Whoa. Maybe we better get back to the basics here."

Let me be clear. Our speaker today is Barack Obama, B-A-R-A-C-K O-B-A-M-A. Born in Hawaii, he's the junior senator from the state of Illinois, elected to the United States Senate in 2004 after serving in Illinois's state senate for eight years.

He worked as a community organizer, a civil rights attorney, and as a professor of constitutional law in Chicago. He's a graduate of Columbia University and Harvard Law School. He is married to Michelle Obama, and they have two daughters.

No matter what happens in November, during the primaries he has reshaped the contours of American politics. His life story is uniquely and distinctively American. My friends, it is my pleasure to introduce to you Senator Barack Obama. He will speak on national security policy this morning as he prepares for a very high-profile trip to Europe and the Middle East.

Senator Obama.

(APPLAUSE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you. Thank you so much. Thank you so much.

Thank you. Thank you very much, everybody. And I very much appreciate your patience.

I want to, first of all thank, Ambassador Gildenhorn for the outstanding work he does as board chairman here at the Woodrow Wilson Center.

And to my great friend, Lee Hamilton, who is I think an example of what's best in American public service, and has done so much to not only promote American interests all across the globe, but also to educate the American people on our foreign policy.

So thank you very much.

Sixty-one years ago, George Marshall announced the plan that would come to bear his name. At the time, much of Europe lay in ruins. The United States faced a powerful and ideological enemy intent on world domination. And this menace was magnified by the recently discovered capability to destroy life on an unimaginable scale. The Soviet Union did not yet have atomic bomb, but before long it would.

The challenge facing the greatest generation of Americans, the generation that had vanquished fascism on the battlefield, was how to contain this threat while at the same time extending freedom's frontiers. Leaders like Truman and Acheson and Kenan and Marshall knew that there was no single decisive blow that could be struck for freedom.

Instead, what we needed was a new overarching strategy to meet the challenges of a new and dangerous world. Such a strategy would join overwhelming military strength with sound judgment. It would shape events not just through military force, but through the force of our ideas, through economic power, and intelligence and diplomacy.

It would support strong allies that freely shared our ideals of liberty and democracy, open markets, and the rule of law. It would foster new international institutions like the United Nations, NATO, and the World Bank, and focus on every corner of the globe. It was a strategy that saw clearly the world's dangers while seizing its promise.

As a general, Marshall had spent years helping FDR wage war, but the Marshall Plan, which was just one part of this strategy, helped rebuild not only allies, but also the nation that Marshall had plotted to defeat. In the speech announcing his plan, he concluded not with tough talk or definitive declarations, but rather with questions and a call for perspective.

The whole world of the future, Marshall said, hangs on a proper judgment. The whole world hangs on a proper judgment.

To make that judgment, he asked the American people to examine distant events that directly affected their security and prosperity, and he closed by asking, what is needed? What can best be done? What must be done?

What is needed? What can best be done? What must be done?

Today's dangers are different, though no less great. The power to destroy life on a catastrophic scale now risks falling into the hands of terrorists. The future of our security and our planet is held hostage to our dependence on foreign oil and gas.

From the cave-spotted mountains of northwest Pakistan, to the centrifuges spinning beneath Iranian soil, we know that American people cannot be protected by oceans or the sheer might of our military alone. Its act of September 11th brought this new reality into a terrible and ominous focus.

On that bright and beautiful day, the world at peace and prosperity, that appeared to be the legacy of our Cold War victory, seemed to suddenly vanish under rubble and twisted steel and clouds of smoke. But all of you, I'm sure, will recall that the depths of this tragedy also drew out the decency and determination of our nation at blood banks, at vigils, and schools, and in the United States Congress.

Americans were united, more united even than we were at the dawn of the Cold War. And the world, too, was united against the perpetrators of this evil act, as old allies, new friends, and even long-time adversaries stood by our side.

It was time once again for America's might and moral to be harnessed. It was time to once again shape a new security strategy for an ever-changing world.

Imagine for a moment what we could have done in those days and months and years after 9/11.

We could have deployed the full force of American power to hunt down and destroy Osama bin Laden, al Qaeda, the Taliban, and all of the terrorists responsible for 9/11, while supporting real security and development in Afghanistan.

We could have secured loose nuclear materials around the world with a sense of urgency and updated a 20th century nonproliferation framework to meet the challenges of the 21st century.

We could have invested hundreds of billions of dollars in alternative sources of energy and energy efficiency to grow our economy and save our planet and end the tyranny of oil. We could have strengthened old alliances, formed new partnerships and renewed international institutions to advance peace and prosperity.

We could have called on a new generation to step into the strong currents of history and to serve their country as troops and teachers, Peace Corps volunteers and police officers.

We could have secured our homeland, investing in sophisticated new protection for our ports, our trains, our power plants.

We could have rebuilt our roads and bridges, laid down new rail and broadband systems and electricity grids, and made college affordable for every American to strengthen our ability to compete.

We could have invested in science and technology that will be the hallmark of economic success in the 21st century.

We could have done all of those things. Instead, we've lost thousands of American lives, spent nearly a trillion dollars, alienated allies, neglected emerging threats, all in the cause of fighting a war for well over five years in a country that had absolutely nothing to do with the 9/11 attacks.

Now, our men and women in uniform have accomplished every mission we have given them. They have performed brilliantly. So what's missing in our debate about Iraq, what has been missing since before the war began, is a discussion of the strategic consequences of Iraq and its dominance of our foreign policy.

This war distracts us from every threat that we face and so many opportunities we could seize. This war diminishes our security, our standing in the world, our military, our economy, and the resources that we need to confront the challenges of the 21st century. By any measure, our single-minded and open-ended focus on Iraq is not a sound strategy for keeping America safe.

I am running for president of the United States to lead this country in a new direction and to seize this moment's promise.

Instead of being distracted from the most pressing threats that we face, I want to overcome them. Instead of pushing the entire burden of our foreign policy onto the brave men and women on our military, I want to use all elements of American power to keep us safe and prosperous and free. Instead of alienating ourselves from the world, I want America once again to lead.

As president, I intend to pursue a tough, smart and principled national security strategy, one that recognizes that we have interests beyond Baghdad and Kandahar and Karachi and Tokyo and London and Beijing and Berlin. I will focus this strategy on five goals essential to making America safe: ending the war on terror in Iraq responsibly; finishing the fight against al Qaeda and the Taliban; securing all nuclear weapons and materials from terrorists and rogue states; achieving true energy security; and rebuilding our alliances to meet the challenges of the 21st century. My opponent in this campaign has served this country with honor. And we all respect his sacrifice. We both want to do what we think is best to defend the American people. But we have made different judgments and would lead in a very different direction. And that starts with our difference on Iraq.

I opposed going to war in Iraq. Senator McCain was one of Washington's biggest supporters for the war.

I warned that the invasion of a country posing no imminent threat would fan the flames of extremism and distract us from the fight against al Qaeda and the Taliban. Senator McCain claimed that we would be greeted as liberators and that democracy would spread across the Middle East. Those were the judgments we made on the most important strategic question since the end of the Cold War.

Now, all of us recognize that we must do more than look back. We must make a judgment about how to move forward.

In the words of General Marshall, what is needed? What can best be done? And what must be done?

Senator McCain wants to talk about our tactics in Iraq. I want to focus on a new strategy for Iraq and the wider world.

It has been 18 months since President Bush announced the surge. As I've said many times, our troops have performed brilliantly in lowering the level of violence.

General Petraeus has used new tactics to protect the Iraqi population. We have talked directly to Sunni tribes that used to be hostile to America and supported their fight against al Qaeda. Shia militias have generally respected a cease-fire.

Those are the facts, and all Americans welcome them. And for weeks now, Senator McCain has argued that the gains of the surge mean that I should change my commitment to end the war. But this argument misconstrues what is necessary to succeed in Iraq and stubbornly ignores the facts of the broader strategic picture that we face.

In the 18 months since the surge began, the strain on our military has increased. Our troops and their families have borne an enormous burden, and American taxpayers have spent another $200 billion in Iraq. That's over $10 billion each month. That is a consequence of our current strategy.

In the 18 months since the surge began, the situation in Afghanistan has deteriorated. June was our highest casualty month in the war. The Taliban has been on the offensive, even launching a brazen attack on one of our own bases. Al Qaeda has a growing sanctuary in Pakistan. Those are consequences of our strategy in Iraq.

In the 18 months since the surge began, as I warned at the outset, Iraq's leaders have not made the political progress that was the purpose of the surge. They have not invested tens of billions of dollars in oil revenues to rebuild their country. They have not resolved their differences or shaped a new political compact. That is why I strongly stand by my plan to end this war.

Now Prime Minister Maliki's call for a timetable for the removal of U.S. forces presents a genuine opportunity. It comes at a time when the American general in charge of training Iraq's security forces has testified that Iraq's army and police will be ready to assume responsibility for Iraq's security in 2009.

Now is the time for a responsible redeployment of our combat troops that pushes Iraq's leaders toward a political solution, rebuilds our military, and refocuses on Afghanistan and our broader security threats.

George Bush and John McCain don't have a strategy for success in Iraq. They have a strategy for staying in Iraq. They say we couldn't leave when violence was up, and they now say that we can't leave when violence is down.

They refuse to press the Iraqis to make tough choices and they label any timetable to redeploy our troops surrender, even though we would be turning Iraq over to a sovereign Iraqi government, not to a terrorist enemy.

Theirs is an endless focus on tactics inside Iraq with no consideration of our strategy to face threats beyond Iraq's borders. And at some point, a judgment must be made. Iraq is not going to be a perfect place, and we do not have unlimited resources to try to make it one.

We are not going to kill every al Qaeda sympathizer, eliminate every trace of Iranian influence, or stand up a flawless democracy before we leave. General Petraeus and Ambassador Crocker acknowledged this to me when they testified last April. That's why the accusation of surrender is a false rhetoric used to justify a failed policy.

In fact, true success in Iraq -- victory in Iraq -- will not take place in a surrender ceremony where an enemy lays down their arms. True success will take place when we leave Iraq to a government that is taking responsibility for its future, a government that prevents sectarian conflict and ensures that the al Qaeda threat, which has been beaten back by our troops, does not reemerge.

That is an achievable goal if we pursue a comprehensive plan to press the Iraqis to stand up. Now to achieve that success, I will give our military a new mission on my first day in office, ending this war.

Let me be clear. We must be as careful getting out of Iraq as we were careless getting in. We can safely redeploy our combat brigades at a pace that would remove them in 16 months. That would be the summer of 2010, one year after Iraqi security forces will be prepared to stand up. Two years from now and more than seven years after the war began.

After this redeployment, we will keep a residual force to perform specific missions in Iraq, targeting any remnants of al Qaeda, protecting our service members and diplomats, and training and supporting Iraq's security forces so long as the Iraqis make political progress.

And, yes, we will make tactical adjustments as we implement this strategy. That is what any responsible commander in chief must do. As I have consistently said, I will consult with commanders on the ground and the Iraqi government. We will redeploy from secure areas first and volatile areas later.

We will commit $2 billion to a meaningful international effort to support the more than 4 million displaced Iraqis. We will forge a new coalition to support Iraq's future, one that includes all of Iraq's neighbors, and also the United Nations, the World Bank and the European Union, because we all have a stake in stability.

And we will make it clear that the United States seeks no permanent bases in Iraq. That is the future that Iraqis want. This is the future that the American people want. And that is what our common interests demand.

Now both America and Iraq will be more secure when the terrorists in Anbar is taken out -- being taken out by the Iraqi army and the criminal in Baghdad fears Iraqi police, not just coalition forces.

Both America and Iraq will succeed when every Arab country has an embassy opened in Baghdad and the child in Basra benefits from services provided by Iraqi dinars, not American tax dollars. And this is the future we need for our military. We cannot tolerate this strain on our forces to fight a war that has not made us safer.

I will restore our strength by ending this war, completing the increase of our ground forces by 65,000 soldiers and 27,000 Marines, and investing in the capabilities we need to defeat conventional foes and meet the unconventional challenges of our time.

So let's be clear. Senator McCain would have our troops continue to fight tour after tour of duty and our taxpayers keep spending $10 billion a month indefinitely. I want Iraqis to take responsibility for their own future and to reach the political accommodation necessary for long-term stability.

That is victory. That is success. That's what best -- that is what is best for Iraq. That is what is best America. And that's why I will end this war as president.

In fact, as should have been apparent to President Bush and Senator McCain, the central front in the war terror is not Iraq and it never was. And that's why the second goal of my new strategy will be taking the fight to al Qaeda in Afghanistan and Pakistan.

It is unacceptable that almost seven years after nearly 3,000 Americans were killed on our soil, the terrorists -- who attacked us on 9/11 are still at large. Osama bin Laden, Ayman Zawahiri, are recording messages to their followers and plotting more terror. The Taliban controls parts of Afghanistan. Al Qaeda has an expanding base in Pakistan that is probably no farther from the old Afghan sanctuary than a train ride from Washington to Philadelphia.

If another attack on our homeland comes, it will likely come from the same region where 9/11 was planned. And yet today we have five times more troops in Iraq than Afghanistan.

Senator McCain said, just months ago, that Afghanistan is not in trouble because of our diversion to Iraq. I could not disagree more. Our troops and our NATO allies are performing here heroically in Afghanistan, but I have argued for years that we lack the resources to finish the job because of our commitment to Iraq.

That's what the chairman of the Joint Chiefs of Staff said earlier this month. And that is why, as president, I will make the fight against al Qaeda and the Taliban the top priority that it should be.

This is a war we have to win. I will send at least two additional combat brigades to Afghanistan and use this commitment to seek greater contributions with fewer restrictions from our NATO allies. I will focus on training Afghan security forces and supporting an Afghan judiciary with more resources and incentives for American officers who perform these missions.

And just as we succeeded in the Cold War by supporting allies who could sustain their own security, we must realize that the 21st century's frontlines are not only on the field of battle. They are found in training exercises near Kabul, in the police station in Kandahar, and in the rule of law in Iraq.

Moreover, lasting security will only come if we heed General Marshall's lessons and help Afghans grow their economy from the bottom up. That's why I've proposed an additional $1 billion in non-military assistance each year with meaningful safeguards to prevent corruption and to make sure investments are made not just in Kabul but out in Afghanistan's provinces.

As a part of this program, we'll invest in alternative livelihoods to poppy growing for Afghan farmers. Just as we cracked down on heroin traffic. We cannot lose Afghanistan to a future of narco-terrorism. The Afghan people must know that our commitment to their future is enduring because the security of Afghanistan and the United States is shared.

The greatest threat to that security lies in the tribal regions of Pakistan where terrorists train and insurgents strike in Afghanistan. We cannot tolerate a terror sanctuary. And-- and as president, I will not. We need a stronger and sustained partnership between Afghanistan, Pakistan, and NATO to secure the border to take out terrorist camps and to crack down on cross-border insurgents.

We need more troops, more helicopters, more satellites, more Predator drones in the Afghan border region. And we must make it clear that if Pakistan cannot or will not act, we will take out high- level terrorist targets like bin Laden if we have them in our sights.

Make no mistake, we can't succeed in Afghanistan or secure our homeland unless we change our Pakistan policy. We must expect more of the Pakistani government, but we also must offer more than a blank check to a general who has lost the confidence of his people.

It's time to strengthen stability by standing up for the aspirations of the Pakistani people. That's why I'm co-sponsoring a bill with Joe Biden and Dick Lugar to triple non-military aid to the Pakistani people and to sustain it for a decade while ensuring that the military assistance we provide is used to take the fight to the Taliban and al Qaeda.

We must move beyond a purely military alliance built on convenience or face mounting popular opposition in a nuclear-armed nation at the nexus of terror and radical Islam.

Now only a strong Pakistani democracy can help us move toward my third goal, and that is securing all nuclear weapons and materials from terrorists and rogue states. One of the terrible ironies of the Iraq war is that President Bush used the threat of nuclear terrorism to invade a country that had no active nuclear program.

But the fact that the president misled us into a misguided war doesn't diminish the threat of a terrorist with a weapon of mass destruction. In fact, it has only increased it. In those years after World War II, we worried about the deadly atom falling into the hands of the Kremlin. Now we worry about 50 tons of highly enriched uranium, some of it poorly secured at a civilian nuclear facility, some were in over 40 countries.

Now we worry about the breakdown of a nonproliferation framework that was designed for the bipolar world of the Cold War. Now we worry, most of all, about a rogue state or nuclear scientist transferring the world's deadliest weapons to the world's most dangerous people, terrorists who won't think twice about killing themselves and hundreds of thousands in Tel-Aviv or Moscow or London or New York.

We cannot wait any longer to protect the American people. I've made this a priority in the Senate where I work with Republican senator Dick Lugar to pass a law accelerating our pursuit of loose nuclear materials.

I will lead a global nuclear -- global effort to secure all loose nuclear materials around the world during my first term as president. And I'll develop new defenses to protect against the 21st century threat of biological weapons and cyber-terrorists, threats that I'll discuss in more detail tomorrow.

Beyond taking these immediate urgent steps, it's time to send a clear message -- America seeks a world with no nuclear weapons. As long as nuclear weapons exist, we must retain a strong deterrent. And I will never waver from that commitment.

But instead of threatening to kick them out of the G8, we need to work with Russia to take U.S. and Russian ballistic missiles off trigger alert to dramatically reduce the stockpile the weapons and terror.

To seek a global ban on the production of fissile material for weapons and to expand the U.S./Russian ban on intermediate long -- intermediate-range missiles so that the agreement is global.

And by keeping our commitment under the nuclear nonproliferation treaty, we'll be in a better position to press nations like North Korea and Iran to keep theirs. In particular, it will give us more credibility and leverage in dealing with Iran.

We cannot tolerate nuclear weapons in the hands of nations that support terror. Preventing Iran from develop nuclear weapons is a vital national security interest of the United States.

No tool of state craft should be taken off the table, but Senator McCain would continue a failed policy that has seen Iran strengthen its position, advance its nuclear program, and stockpile 150 kilos of low enriched uranium.

I will use all elements of American power to pressure the Iranian regime, starting with aggressive, principled and direct diplomacy, diplomacy backed with strong sanctions and without preconditions.

There will be careful preparation. And I commend the work of our European allies on this important matter. We should be full partners in that effort. Ultimately, the measure of any effort is whether it leads to a change of behavior in Iran.

That's why we must pursue these tough negotiations in full coordination with our allies, bringing to bear our full influence, including -- if it will advance our interests -- my meeting with the appropriate Iranian leader at a time and place of my choosing.

We will pursue this diplomacy with no allusions about the Iranian regime. Instead, we will present a clear choice -- if you abandon your nuclear program, your support for terror, and your threats against Israel, there will be meaningful incentives.

If you refuse, then we will ratchet up the pressure with stronger unilateral sanctions, stronger multi-lateral sanctions in the Security Council, and sustained action outside the U.N. to isolate the Iranian regime.

That's the diplomacy we need.

And the Iranians should negotiate now. By waiting, they will only face mounting pressure. The surest way to increase our leverage against Iran in the long run is to stop bankrolling its ambitions. And that will depend on achieving my fourth goal -- ending the tyranny of oil in our time.

One of the most dangerous weapons in the world today is the price of oil. We ship nearly $700 million a day to unstable or hostile nations for their oil. It pays for terrorist bombs going off from Baghdad to Beirut. It funds petro diplomacy in Caracas and radical madrasas from Karachi to Khartoum. It takes leverage away from America and shifts it to dictators.

This immediate danger is eclipsed only by the long-term threat from climate change which will lead to devastating weather patterns, terrible storms, droughts, famine.

That means people competing for food and water in the next 50 years in the very places that have known horrific violence in the last 50 years -- Africa, the Middle East, South Asia , most disastrously, that could mean destructive storms on our shores and the disappearance of our coastline.

This is not just an economic issue or an environmental concern. This is a national security crisis for the sake of our security and for every American family that is paying the price at the pump right now, we must end this dependence on foreign oil.

And as president, that's exactly what I'll do. Small steps and political gimmickry just won't do it. I will invest $150 billion over the next 10 years, $15 billion a year, to put America on the path of true energy security.

This fund will fast-track investments in a new green energy business sector that will end our addiction to oil and create up to 5 million jobs over the next two decades and help secure the future of our planet and our country.

We'll invest in research and development of every of form of alternative energy, solar, wind, biofuels, as well as technologies that can make coal clean and nuclear power safe. And from the moment I take office, I will let it be known that the -- that the United States of America is ready to lead again.

Never again will we sit on the sidelines or stand in the way of global action to tackle this global challenge. I will reach out to the leaders of the biggest carbon emitting nations and ask them to join a new global energy forum that will lay the foundation for the next generation of climate protocols.

We will also build an alliance of oil importing nations and work together to reduce or demand and to break the grip of OPEC on the global economy. We'll set a goal of an 80 percent reduction in global emissions by 2050. And as we develop new forms of clean energy here at home, we will share our technology and innovations with all the nations of the world.

That is the tradition of American leadership on behalf of the global good, and that will be my fifth goal -- rebuilding our alliances to meet the common challenges of the 21st century.

For all of our power, America is strongest when we act alongside strong partners. We face down fascism with the greatest wartime alliance the world has ever known. We stood shoulder to shoulder with our NATO allies against the Soviet threat and paid a far smaller price for the first Gulf War because we acted together with a broad coalition.

We helped create the United Nations, not to constrain America's influence but to amplify it by advancing our values. Now is the time for a new era of international cooperation. It's time for America and Europe to renew our common commitment to face down the threat of the 21st century just as we did the challenges of the 20th.

It's time to strengthen our partnerships with Japan, South Korea, Australia, and the world's largest democracy, India, to create a stable and process prosperous Asia. It's time to engage China on common interests, like climate change, even as we continue to encourage the shift to a more open and market-based society.

It's time to strengthen NATO by asking more of our allies while always approaching them with the respect owed a full partner. It's time to reform the United Nations so that this imperfect institution can become more perfect, a more perfect form to share burdens, strengthen our leverage, and promote our values.

It's time to deepen our engagement, to help resolve the Arab- Israeli conflict. So that we help our ally Israel achieve true and lasting security while helping Palestinians achieve their legitimate aspirations for statehood.

And just as we renew long standing efforts, so must we shape ones to meet new challenges. And that's why I'll create a shared security partnership program, a new alliance of nations to strengthen cooperative efforts to take down global terrorist networks while standing up against torture and brutality.

That's why we'll work with the African Union to enhance its ability to keep the peace in its neighborhood. That's why we'll build a new partnership to roll back the trafficking of drugs and guns and gangs in the Americas. It's what we can do if we are ready to engage the world.

We will have to provide meaningful resources to meet these critical priorities. And I know development assistance is not the most popular of programs. But as president, I will make the case to the American people that it can be our best investment in increasing the common security of the entire world and increasing our own security.

That was true with the Marshall Plan and that will be true today. And that's why I will double our foreign assistance by $50 billion by 2012, and use it to support a stable future in failing states and sustainable growth in Africa to have global poverty, and to roll back disease.

To send, once more, a message to those yearns faces beyond our shores that says you matter to us, your future is our future, and our moment is now. Our moment is now. This must be the moment when we answer the call of history.

For eight years, we've paid the price for foreign policy that lectures without listeners, that divides us from one another, and from the world. Instead of calling us to a common purpose. Politics that focuses on our tactics in fighting a war without end in Iraq instead of forging a new strategy to face down the true threats we face.

We cannot afford four more years of a strategy that is so out of balance and out of step with this defining moment.

I recognize none of this will be easy. But I also recall that we have faced great odds before. When General Marshall first spoke about the plan that would bear his name, the rubble of Berlin had not yet been built into a wall. But Marshall knew that even the fiercest of adversaries could forge bonds of friendship founded in freedom.

He had the confidence to know that the purpose and pragmatism of the American people could outlast any fault.

Today the dangers and divisions that come with the dawn of the Cold War have receded. Now the defeat of the threat to the past has been replaced by the transitional threats of today.

We know what is needed. We know what can best be done. We know what must be done. Now it falls on us to act with the same sense of purpose and pragmatism as an earlier generation to join with friends and partners to lead the world anew.

Thank you very much, everybody.

COLLINS: Senator Barack Obama there giving his speech on foreign policy. Several different issues were actually addressed. Iraq and Afghanistan, also $150 billion energy sort of proposal that he says he would put into place if he were to become president of the United States.

Speaking to us out of Washington, D.C., once again presidential candidate, Barack Obama. Also I want to let you know, of course, at the top of the hour, John McCain is campaigning in Albuquerque, New Mexico. A live shot there for you. He will also talk about Iraq.

Senator McCain opposed a timetable and says that should dictate when to leave and when that event happens. We, of course, are going to bring it to you live.

For now, a quick break.

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ANNOUNCER: You're watching CNN NEWSROOM on CNN, the most trusted name in news.

TONY HARRIS, CNN ANCHOR: And very quickly, we want to get you to Susan Lisovicz at the New York Stock Exchange.

And a lot of market action, Susan. And we saw the price of oil drop precipitously. Boy, I had to go slow on that word.

Bring us the latest on the price of oil. SUSAN LISOVICZ CNN CORRESPONDENT: Crude's dropping just about $7 on the day. And that's one of the reasons why this terrible selloff has now become only a modest selloff.

A lot of data in the marketplace today. You know, Ben Bernanke speaking on Capitol Hill trying to reassure investors about the financial system. But his most pessimistic outlook yet.

We got an inflation report earlier today, which came in worse than expected, obviously. it's gas and food prices and year-over-year inflation growing at the fastest pace in 27 years.

All that spending on energy and food, of course, you know, gives us less spending power and retail sales came in lower than expected. And the dollar hit a new low against the euro, $1.60 now. So if you're going to Europe, you're going to have to travel like a student, basically.

The financial sector is improving today. But Fannie Mae and Freddie Mac shares are down at least 23 percent.

HARRIS: Boy.

LISOVICZ: So they continue to get hammered despite the Fed and Treasury Department's extraordinary moves over the weekend, Tony.

HARRIS: But I've got to tell you, as you look at the numbers there for the Dow that is such an improvement on where we were. Early this morning and certainly for periods of time when the president was speaking. And then as the president continued to speak, it appeared as though the markets were starting to rally a bit, Susan.

LISOVICZ: No disrespect to the president, I think it was oil.

HARRIS: Oh, yes, yes, yes.

LISOVICZ: A big drop in oil.

HARRIS: Yes. That's it. OK, and I know you're going to be following this for us throughout the day. And "ISSUE #1" coming up in just a couple of moments.

Susan, thank you, as always.

LISOVICZ: You're welcome.

COLLINS: You know the last time I talked to Susan, it was all bad, bad, bad, bad, bad, bad.

HARRIS: Yes. Yes.

COLLINS: Let's put it out there. Anyway, CNN NEWSROOM continues one hour from now.

HARRIS: And "ISSUE #1" with Gerri Willis and Ali Velshi starts right now.