SCHIEFFER: Good morning again. The former vice president is in the studio with us this morning, as he has been many times over the years.

Mr. Vice President, thank you for being here. You’re obviously here because we invited you here and we appreciate that, but I want to ask you something. President Bush has done what people normally do when they leave the Oval Office — he has remained mum. He said very little. At one point, he said that he thought President Obama deserved his silence.

But you have taken a very different tack, and I must say a very unusual tack for somebody just leaving the vice president’s office. You’ve been speaking out not just frequently, but often very pointedly. At one point you said, for example, the Obama administration has made this country less safe. That’s a very serious charge. Why have you taken this approach?

CHENEY: Well, Bob, first of all, it’s good to go back on the show.

SCHIEFFER: Thank you.

CHENEY: It’s nice to know that you’re still loved and are invited out in public sometimes.

The reason I’ve been speaking, and in effect what I’ve been doing is responding to press queries such as yours, is because I think the issues that are at stake here are so important. And, in effect, what we’ve seen happen with respect to the Obama administration as they came to power is they have moved to take down a lot of those policies we put in place that kept the nation safe for nearly eight years from a follow-on terrorist attack like 9/11. Dealing with prisoner interrogation, for example, or the terrorist surveillance program.

They campaigned against these policies across the country, and then they came in now, and they have tried, very hard, to undertake actions that I just fundamentally disagree with.

SCHIEFFER: Well, do you — I mean, should we take that literally? You say that the administration has made this country more vulnerable to attacks here in the homeland.

CHENEY: That’s my belief, based upon the fact, Bob, that we put in place those policies after 9/11. On the morning of 9/12, if you will, there was a great deal we didn’t know about Al Qaida. There was the need to embark upon a new strategy with respect to treating this as a strategic threat to the United States. There was the possibility of Al Qaida terrorists in the midst of one of our own cities with a nuclear weapon or a biological agent.

It was a time of great concern, and we put in place some very good policies, and they worked, for eight years. Now we have an administration that’s come to power that has been critical of the programs, but not only that, there’s been talk about prosecuting the lawyers in the Justice Department who gave us the opinions that we operated in accordance with, or referring them to the Bar Association for disbarment or sanctions of some kind, or possibly cooperating with foreign governments that are interested in trying to prosecute American officials, those same officials who were responsible for defending this nation for the last eight years.

That whole complex of things is what I find deeply disturbing, and I think to the extent that those policies were responsible for saving lives, that the administration is now trying to cancel those policies or end them, terminate them, then I think it’s fair to argue — and I do argue — that that means in the future we’re not going to have the same safeguards we’ve had for the last eight years.

SCHIEFFER: Well, but why does that make the country less safe? You’re talking about — you say you don’t think we ought to be going back and questioning those people, looking into some of these things. All right, I take your point on that, but how is that making the country less safe? How does that make the country more vulnerable to an attack in the future?

CHENEY: Well, at the heart of what we did with the terrorist surveillance program and the enhanced interrogation techniques for Al Qaida terrorists and so forth was collect information. It was about intelligence. It was about finding out what Al Qaida was going to do, what their capabilities and plans were. It was discovering all those things we needed in order to be able to go defeat Al Qaida.

And in effect, what’s happening here, when you get rid of enhanced interrogation techniques, for example, or the terrorist surveillance program, you reduce the intelligence flow to the intelligence community upon which we based those policies that were so successful.

So I think before they do that sort of thing, it’s important to sit down and find out what did we learn? Why did it work?

One of the things that I did six weeks ago was I made a request that two memos that I personally know of, written by the CIA, that lay out the successes of those policies and point out in considerable detail all of — all that we were able to achieve by virtue of those policies, that those memos be released, be made public. The administration has released legal opinions out of the Office of Legal Counsel. They don’t have any qualms at all about putting things out that can be used to be critical of the Bush administration policies. But when you’ve got memos out there that show precisely how much was achieved and how lives were saved as a result of these policies, they won’t release those. At least, they haven’t yet.

SCHIEFFER: Let me just ask you about that, because some people in the administration — believe the attorney general says he does not know of such memos. Other people in the administration say, as a matter of fact, what we found out using these methods — and I mean, let’s call things what they are — waterboarding was one of the techniques that were used — that they really didn’t get all that much from that. You say they did.

CHENEY: I say they did. Four former directors of the Central Intelligence Agency say they did, bipartisan basis.

Release the memos. And we can look and see for yourself what was produced.

The memos do exist. I have seen them. I had them in my files at one time. Now everything is part of the National Archives. I’m sure the agency has copies of those materials, and there’s a formal way you go through, once you’re a former official, a formal way you go through requesting declassification of something, and I started that process, as I say, six weeks ago. I haven’t heard anything from it yet. I assume…

SCHIEFFER: You have not — they haven’t responded to you as yet?

CHENEY: That’s right. There’s been — up until now, I’ve got a letter of notification saying they had started the process, but I haven’t seen anything by way of a result from this request for declassification. And if we’re going to have this debate, it ought to be a complete debate, and those memos ought to be out there for people to look at and journalists like yourself to evaluate in terms of what we were able to accomplish with these policies.

SCHIEFFER: Well, Mr. Vice President, let me ask you this. I mean, I’m not asking you to violate any rules of classification, but is there anything you can tell us specifically that those memos would tell us? I mean, some information we gleaned, some fact that we got that we wouldn’t have gotten otherwise?

CHENEY: That’s what’s in those memos. It talks specifically about different attack planning that was under way and how it was stopped. It talks about how the volume of intelligence reports that were produced from that.

SCHIEFFER: Does it talk about planning for attacks or attacks that were actually stopped?

CHENEY: Well, I need to be careful here, Bob, because it’s still classified. The way to answer this is give us the memos. Put them out there. Release them to the press. Let everybody take a look and see.

What it shows is that overwhelmingly, the process we had in place produced from certain key individuals, such as Khalid Shaikh Mohammed and Abu Zubaydah, two of the three who were waterboarded, and Khalid Shaikh Mohammed is the man who killed 3,000 Americans on 9/11, blew up the World Trade Center, attacked the Pentagon, tried to blow up the White House or the Capitol building. An evil, evil man that’s been in our custody since March of ‘03. He did not cooperate fully in terms of interrogations until after waterboarding. Once we went through that process, he produced vast quantities of invaluable information about Al Qaida.

SCHIEFFER: What do you say to those, Mr. Vice President, who say that when we employ these kinds of tactics, which are after all the tactics that the other side uses, that when we adopt their methods, that we’re weakening security, not enhancing security, because it sort of makes a mockery of what we tell the rest of the world?

CHENEY: Well, then you’d have to say that, in effect, we’re prepared to sacrifice American lives rather than run an intelligent interrogation program that would provide us the information we need to protect America.

The fact of the matter is, these techniques that we’re talking about are used on our own people. We — in a program that in effect trains our people with respect to capture and evasion and so forth and escape, a lot of them go through these same exact procedures. Now…

SCHIEFFER: Do you — is what you’re saying here is that we should do anything if we could get information?

CHENEY: No. Remember what happened here, Bob. We had captured these people. We had pursued interrogation in a normal way. We decided that we needed some enhanced techniques. So we went to the Justice Department. And the controversy has arisen over the opinions written by the Justice Department.

The reason we went to the Justice Department wasn’t because we felt we were going to take some kind of free hand assault on these people or that we were in the torture business. We weren’t. And specifically, what we got from the Office of Legal Counsel were legal memos that laid out what is appropriate and what’s not appropriate, in light of our international commitments.

CHENEY: If we had been about torture, we wouldn’t have wasted our time going to the Justice Department.

SCHIEFFER: How much did President Bush know specifically about the methods that were being used? We know that you– and you have said– that you approved this…

CHENEY: Right.

SCHIEFFER: … somewhere down the line. Did President Bush know everything you knew?

CHENEY: I certainly, yes, have every reason to believe he knew — he knew a great deal about the program. He basically authorized it. I mean, this was a presidential-level decision. And the decision went to the president. He signed off on it.

SCHIEFFER: You said — you said just a moment ago as you were talking about this, that — you said that we have to realize what was at stake and we have to realize the circumstances. Do you have any regrets whatsoever about any of the methods that were taken? Any of the things that were used back in those days? Because there’s no question the country — it was a different time. The country’s mood was different. We had just been — something had happened here that had never happened before.

In retrospect, you — years have passed. You’re now out of office. Do you think we should have done some things differently back then, or do you have any regrets about any of it?

CHENEY: No regrets. I think it was absolutely the right thing to do. I’m convinced, absolutely convinced, that we saved thousands, perhaps hundreds of thousands of lives.

In the aftermath of 9/11, we had all of these questions about who Al Qaida was, where they were operating and so forth. We didn’t know nearly as much as we know today. We were faced with a very real possibility — we had reporting that said Al Qaida is trying to acquire nuclear capabilities. We had the A.Q. Khan network out there, a black-market operator selling nuclear weapons technology to Libya, North Korea and Iran. We had the anthrax attack within a matter of weeks after 9/11. We had the kind of situation that meant that we were absolutely convinced, the country was convinced, that there was a very high likelihood of a follow-on attack, a mass casualty attack against the United States. No one then would have bet anything that you’re going to go eight years and not have another attack. And we know, in fact, that they did try other attacks, and that we were able to stop them.

Now, if you’d look at it from the perspective of a senior government official, somebody like myself, who stood up and took the oath of office on January 20th of ‘01 and raised their right hand and said we’re going to protect and defend the United States against all enemies foreign and domestic, this was exactly, exactly what was needed to do it.

I think if you look at this intelligence program that when things are quieter, 20 or 30 years from now, you’ll be able to look back on this and say this is one of the great success stories of American intelligence. I think, in fact, what the men and women in the intelligence community and the lawyers in the Justice Department and the senior officials who approved this program did exactly the right thing. I think the charge that somehow there was something wrong done here or that this was torture in violation of U.S. statutes is just absolutely false.

SCHIEFFER: You — you are speaking out. You say you obviously feel passionately about this. How far are you willing to take this approach? Are you willing to go back to the Congress and talk to people in Congress about this? There are all kinds of people talking about various kinds of investigations. Would you go back and talk to the Congress?

CHENEY: Certainly. I’ve made it very clear that I feel very strongly that what we did here was exactly the right thing to do. And if I don’t speak out, then where do we find ourselves, Bob? Then the critics have free run, and there isn’t anybody there on the other side to tell the truth. So it’s important — it’s important that we…

SCHIEFFER: Senator Leahy, the chairman of the Judiciary Committee, was on this broadcast recently. And I said, do you intend to ask the former vice president to come up? And he said if he will testify under oath. Would you be willing to testify under oath?

CHENEY: I’d have to see what the circumstances are and what kind of precedent we were setting. But certainly I wouldn’t be out here today if I didn’t feel comfortable talking about what we’re doing publicly. I think it’s very, very important that we have a clear understanding that what happened here was an honorable approach to defending the nation, that there was nothing devious or deceitful or dishonest or illegal about what was done.

SCHIEFFER: All right. We’re going to take a little break here and come back and talk about this and some other things, in a moment.

(COMMERCIAL BREAK)

SCHIEFFER: We’re back again with the former vice president, Dick Cheney .

Mr. Vice President, General Petraeus, our top military man out in that part of the world, said this morning he is confident that Pakistan’s nuclear weapons are secure. But I want to ask you this, does the United States have enough information about the location of those weapons and the security of those weapons that we could take action should there be a collapse of Pakistan’s government or a civil war broke out?

CHENEY: Well, I wouldn’t want to speculate on that, Bob. I think the key thing from my perspective would be if General Petraeus, who is our commander in Centcom, covering that part of the world, knowing as he does how important that issue is, if he says they’re on top of it, I believe it.

SCHIEFFER: So how do you feel about what’s happening in Pakistan right now? Though, I mean, the Pakistani government continues to seem to have trouble sort of getting organized to fight the Taliban. Sometimes you wonder if they — if they take the threat of the Taliban as seriously as we seem to take it in this country. Do you have faith that they can beat the Taliban in their country?

CHENEY: We had a problem, I’d say, a year or so ago, was one we worried about very much in the Bush administration, that you had in Pakistan Al Qaida, which had retreated there from Afghanistan. You had the Taliban coming back and forth across the border. And the feeling that the Pakistani government understood that the Al Qaida was a threat to the U.S. and that the Taliban were a threat to Afghanistan, but they didn’t believe they were threatened.

I think that is gone now. I think they understand full well that those radical Islamists, whatever their stripe in northwestern Pakistan, would love to see the government in Islamabad toppled. And I think they’re committed to do that. That’s a major step forward, just to have the government in Pakistan understand that they are as threatened, if not more so, than are the United States or Afghanistan.

SCHIEFFER: What about Afghanistan? President Karzai said recently that maybe we ought to stop some of the air attacks there because of civilian casualties. Jim Jones, the new national security adviser, said he did not foresee air attacks being stopped there. How is that war going, in your view? What are we doing that we should be doing and what are we doing — or what is not happening that should be happening, in your analysis?

CHENEY: I think we have to get our heads around the concept that there’s not likely to be a point any time in the near future when you can say, oh, it’s all wrapped up, we can go home. I think that’s the wrong way to look at this conflict.

Afghanistan is a very, very difficult part of the world to operate in, from an economic standpoint, a geographical standpoint. It’s a very tough place to do business.

What happened, of course, was that it became a sanctuary for Al Qaida, and they used it to train terrorists to come to the United States and kill Americans.

We can’t allow that to happen. We can’t allow ourselves to go back to a situation where Afghanistan is out there operating — there’s no U.S. presence, no foreign military presence — until we’re convinced that the Afghans themselves can control all their sovereign territory. When that day happens, I think we’ll be happy to leave. But that’s how I would define success in Afghanistan, is it no longer constitutes a threat to the United States.

I think we have to be committed there for a long period of time. I was glad to see President Obama commit additional troops to Afghanistan. I think we need to do whatever we have to do there to be able to prevail.

Air strikes are an important part of it. And a lot of times, the air strikes do generate controversy, but oftentimes we found in the past that these strikes are engineered by the Taliban. For example, a suggestion in the most recent case is that they used grenades to kill a lot of civilians, not American bombs.

SCHIEFFER: Let me ask you about Guantanamo. President Obama said it’s going to be closed within a year. It’s proved to be a little more complicated than perhaps some in the administration thought it was going to be. Now you’ve got Congress in a real uproar about if these people are brought to prisons in this country. We’ve had resolutions introduced up there on the Hill that unless the state legislature gives the go-ahead, you can’t put them into a prison any place in that particular state. But can we ask other countries to take these people back, Mr. Vice President? If we’re not willing to take them back in this country?

CHENEY: Well, we have asked other countries to take them back, and they’ve refused. I can remember a situation before we left office where we were trying to find a home for some Uighurs, who were generally believed not to be all that big a threat. They ended up in Albania, because Albania was the only country in the world that would take them.

What’s left — we released hundreds already of the less threatening types. About 12 percent of them, nonetheless, went back into the fight as terrorists. The group that’s left, the 245 or so, these are the worst of the worst. This is the hard core. You’d have a recidivism rate out of this group of maybe 50 or 60 percent.

They want to get out because they want to kill more Americans. And you’re just going to find it very difficult to send them any place.

Now, as I say, there has been some talk on the part of the administration about putting them in the United States. I think that’s going to be a tough sell. I don’t know a single congressional district in this country that is going to say, gee, great, they’re sending us 20 Al Qaida terrorists.

It’s a graphic demonstration of why Guantanamo is important. We had to have a place, a facility, where we could capture these people and hold them until they were no longer a danger to the United States. If you bring them to the United States, they acquire all kinds of legal rights. And as Khalid Shaikh Mohammed said when we captured him, he said I’ll talk to you guys after I get to New York and see my lawyer. That’s the kind of problem you’re going to have with these terrorists.

SCHIEFFER: Let’s talk quickly about your party, the Republican Party. A lot of controversy. Arlen Specter has left. He said there’s no room for moderates in the party anymore. You said last week the party should not moderate. But what are you going to do? I mean, you can purify the party to the point that it’s too small to ever get elected to anything. How do you broaden the appeal of your party, and yet do you think there’s a place for moderates?

CHENEY: Oh, sure. I think there is room for moderates in the Republican Party. I think partly it’s a semantic problem. I don’t think the party ought to move dramatically to the left, for example, in order to try to redefine its base.

We are what we are. We’re Republicans. We have certain things we believe in. And maintaining our loyalty and commitment to those principles is vital to our success.

I think there are some good efforts out there. Jeb Bush, I know, has been working on it. Eric Cantor , Mitt Romney, trying to find ways to appeal to a broader range of people. I don’t have any problem with that. I think that’s a good thing to do. But the suggestion our Democratic friends always make is somehow, you know, if you Republicans were just more like Democrats, you’d win elections. Well, I don’t buy that. I think we win elections when we have good solid conservative principles to run upon and base our policies on those principles.

SCHIEFFER: Colin Powell, Rush Limbaugh said the other day that the party would probably be better off if Colin Powell left and just became a Democrat. Colin Powell said Republicans would be better off if they didn’t have Rush Limbaugh out speaking for them. Where do you come down?

CHENEY: Well, if I had to choose in terms of being a Republican, I’d go with Rush Limbaugh, I think. I think my take on it was Colin had already left the party. I didn’t know he was still a Republican.

SCHIEFFER: So you think that he’s not a Republican?

CHENEY: I just noted he endorsed the Democratic candidate for president this time, Barack Obama . I assumed that that is some indication of his loyalty and his interest.

SCHIEFFER: And you said you would take Rush Limbaugh over Colin Powell.

CHENEY: I would.

SCHIEFFER: All right.

CHENEY: Politically.

SCHIEFFER: Mr. Vice President, you promised some news. I think we probably made a little.

CHENEY: All right.

CBS News Chief Washington Correspondent Bob Schieffer: Mr. President, thank you for joining us. This economic crisis has been so severe that it has literally pushed all the other issues off the television, out of the newspapers. But as – when you outlined your program for Afghanistan and the new strategy, it really underlined in the starkest terms that we may not be talking about these serious issues, but there are some very serious things going on out there. So I’d like to start there -

President Obama: Please.

Schieffer: – if I could. This is a hugely ambitious plan. 22,000 more troops. You’re gonna increase spending by 60 percent. You said in your announcement we must defeat al Qaeda.

President Obama: Right.

Schieffer: This has really now become your war, hasn’t it?

President Obama: I think it’s America’s war. And it’s the same war that we initiated after 9/11 as a consequence of those attacks on 3,000 Americans who were just going about their daily round. And the focus over the last seven years I think has been lost.

What we want to do is to refocus attention on al Qaeda. We are going to root out their networks, their bases. We are gonna make sure that they cannot attack U.S. citizens, U.S. soil, U.S. interests, and our allies’ interests around the world.

In order for us to do that, we have to ensure that neither Afghanistan nor Pakistan can serve as a safe haven for al Qaeda. And, unfortunately, over the last several years what we’ve seen is, essentially, al Qaeda moving several miles from Afghanistan to Pakistan but effectively still able to project their violence and, and hateful ideologies out into the world.

Schieffer: You talked many times during your – as you outlined this strategy, about al Qaeda in Pakistan.

President Obama: Right.

Schieffer: You talk about safe havens in Pakistan.

President Obama: Right.

Schieffer: Are you giving our commanders now in Afghanistan a green light to go after these people even if they’re in what used to be safe havens in Pakistan?

President Obama: Well, I haven’t changed my approach. If we have a high-value target within our sights, after consulting with Pakistan, we’re going after them. But our main thrust has to be to help Pakistan defeat these extremists.

Now, one of the concerns that we’ve had building up over the last several years is a notion I think among the average Pakistani that this is somehow America’s war and that they are not invested. And that attitude I think has led to a steady creep of extremism in Pakistan that is the greatest threat to the stability of the Pakistan government – and ultimately the greatest threat to the Pakistani people.

What we want do is say to the Pakistani people, you are our friends, you are our allies. We are going to give you the tools to defeat al Qaeda and to root out these safe havens. But we also expect some accountability. And we expect that you understand the severity and the nature of the threat.

In addition, what we want do is to help Pakistan grow its economy, to be able to provide basic services to its people, and that I think will help strengthen those efforts. If the Pakistan government doesn’t have credibility, if they are weakened, then it’s gonna be much more difficult for them to deal with the extremism within their borders.

Schieffer: But you’re talking about going after them. Are you talking about with American boots on the ground -

President Obama: No.

Schieffer: – pursuing these people into these so-called safe havens?

President Obama: No. Our plan does not change the recognition of Pakistan as a sovereign government. We need to work with them and through them to deal with al Qaeda. But we have to hold them much more accountable. And we have to recognize that part of our task in working with Pakistan is not just military. It’s also our capacity to build their capacity through civilian interventions, through development, through aid assistance. And that’s part of what you’re seeing – both in Afghanistan and Pakistan I think is fully resourcing a comprehensive strategy that doesn’t just rely on bullets or bombs but also relies on agricultural specialists on doctors, on engineers, to help create an environment in which people recognize that they have much more at stake in partnering with us and the international community than giving into some of these -

Schieffer: Help me out here -

President Obama: – extremist ideologies.

Schieffer: How do you – what if they can’t do it? What if they won’t do it? I mean, we have reports now about members of Pakistan’s intelligence service actually actively helping the Taliban and al Qaeda.

President Obama: Well, some -

Schieffer: What if they don’t do it?

President Obama: Some of those reports aren’t new. There are a whole host of contingencies that we’ve gotta deal with. I mean, this is gonna be hard, Bob. I’m under no illusions. If it was easy, it would have already been completed. And so we’re gonna have to go with a strategy that is focused, that is narrowly targeted on defeating al Qaeda. We think that if you combine military, civilian, diplomatic, development approaches, if we are doing a much better job of coordinating with our allies, then we can be successful.

But we recognize there are gonna be a lot of hurdles between now and us finally having weakened al Qaeda or destroyed al Qaeda to the point there – it cannot, it doesn’t pose a danger to us. And we will continue to monitor and adjust our strategies to make sure that we’re not just going down blind alleys.

Schieffer: Are you concerned at all? Because some people say the more troops you put in is just gonna enflame the situation. It’s gonna make it worse. What do you say to them?

President Obama: Well, I’m very mindful of that. Look, you know, I’m enough of a student of history to know that the United States in Vietnam and other countries, other epics of history have overextended to the point where they were severely weakened. And the history in Afghanistan obviously shows that that country has not been very favorably disposed towards foreign intervention.

And that’s why a central part of our strategy is to train the Afghan National Army so that they are taking the lead increasingly to deal with extremists in their area. That’s been one of the few success stories that we’ve seen over the last several years, is the Afghan National Army actually has great credibility. They are effective fighters. We need to grow that. And that’s part of the reason why we wanna make sure that there are trainers there.

But the last point I would make, you know, a request was made for increased troop levels in Afghanistan. I have already authorized 17,000. We’re now adding 4,000 trainers, specifically designed to train Afghan security forces. But what I’ve also said to the Department of Defense and what I will say to the American public is that, you know, we now have resourced properly this strategy. It’s not going to be an open-ended commitment of infinite resources. We’ve just got to make sure that we are focused on achieving what we need -

Schieffer: What you seem -

President Obama: – to achieve with resources we have.

Schieffer: – to be saying is we have to win. There’s no choice here.

President Obama: Uh-huh.

Schieffer: So does that mean if more is needed, if the commanders come back to you and say, “We may need more troops, Mr. President, to do this,” you’re gonna be ready to do that?

President Obama: What I will not do is to simply assume that more troops always results in an improved situation. I think there was a good argument after us scrubbing this very hard and talking to a lot of our allies in the region, including the Pakistan, Afghanistan governments, the Europeans, and our other NATO allies, that this was the best strategy.

But just because we needed to ramp up from the greatly under-resourced levels that we had, doesn’t automatically mean that if this strategy doesn’t work that what’s needed is even more troops. There may be a point of diminishing returns in terms of troop levels. We’ve gotta also make sure that our civilian efforts, our diplomatic efforts and our development efforts, are just as robustly encouraged.

And so, for example, in the budget that I’ve presented to Congress, I’ve said we’ve got to increase foreign aid in Afghanistan, and we’ve gotta increase foreign aid in Pakistan. And I am gonna be really pushing Congress because sometimes foreign aid is a juicy target, particularly during tough times. I’m gonna tell them this is central to our strategy, and it can save lives and troops if we properly execute it.

Schieffer: But you described this in very dark terms. I mean, and there’s no question that things are worse than ever -

President Obama: Yes.

Schieffer: – in Afghanistan. You would agree with that?

President Obama: I do.

Schieffer: But you’re saying -

President Obama: Well, let me make sure I’m clear. They’re not worse than they were when the Taliban was in charge -

Schieffer: Yes.

President Obama: – and al Qaeda was operating with impunity. We have seen a deterioration over the last several years. And unless we get a handle on it now, we’re gonna be in trouble.

Schieffer: You said the other day in the 60 Minutes interview that you would not have thought at this point in your presidency that Iraq would be the least of your worries, something to that effect.

President Obama: Right. Right.

Schieffer: Are things going well enough there now that you may consider speeding up the withdrawal of troops from Iraq?

President Obama: No, I think the plan that we put forward in Iraq is the right one, which is, let’s have a very gradual withdrawal schedule through the national elections in Iraq. There’s still work to be done on the political side to resolve differences between the various sectarian groups around issues like oil, around issues like provincial elections.

And so we’re gonna continue to make progress on that front. I’m confident that we’re moving in the right direction. But Iraq is not yet completed. We still have a lot of work to do. We still have a lot of training of Iraqi forces to improve their capacity. I’m confident, though, that we’re moving in the right direction.

Schieffer: Let me ask you about something closer to home and that is Mexico. You talked about sending more aid to the Mexican government. But things down there are really serious, as you well know. It’s my understanding that 90 percent of the guns that they’re getting down in Mexico are coming from the United States. We don’t seem to be doing a very good job of cutting off the gun flow. Do you need any kind of legislative help on that front? Have you, for example, thought about asking Congress to reinstate the ban on assault weapons?

President Obama: Well, I think the main thing we need is better enforcement. And so this week we put forward a comprehensive initiative to assist those border regions that are being threatened by these drug cartels to provide assistance to the Mexican government to make sure that on our side of the border we’ve got more personnel, more surveillance equipment.

Schieffer: But why are we having so much trouble with that? I mean -

President Obama: Well, what’s happened is that President Calderon I think has been very bold and rightly has decided that it’s gotten carried away. The drug cartels have too much power, are undermining and corrupting huge segments of Mexican society. And so he has taken them on in the same way that when, you know, Elliot Ness took on Al Capone back during Prohibition, oftentimes that causes even more violence. And we’re seeing that flare up.

Schieffer: Do you think it’s a threat to the United States security?

President Obama: I don’t think that it is what would be called an existential threat. But it is a serious threat to those border communities, and it’s gotten out of hand. And so what we have to do is to recognize that, look, this is a two-way street -

Schieffer: Which -

President Obama: – as Secretary Clinton indicated -

Schieffer: Yes?

President Obama: – we’ve gotta reduce demand for drugs. We’ve got to do our part in reducing the flow of cash and guns south.

Schieffer: Are we anywhere close to putting U.S. troops on the border?

President Obama: You know, obviously there have been calls to increase National Guard troops on the borders. That’s something that we are considering. But we want to first see whether some of the steps that we’ve taken can help quell some of the violence. And we want to make sure that we are consulting as effectively as we can with the Mexican government in moving this strategy forward.

Schieffer: All right. Let’s take a break here. We’ll come back and talk about some domestic issues.

>>> COMMERCIAL BREAK

Schieffer: Mr. President, you’re scheduled to announce on Monday what you plan to do with the auto industry as they’re asking for more federal money.

President Obama: Right.

Schieffer: You’ve told them they’re gonna have to cut back, present a different business plan. Our sources tell us that as far as the White House is concerned, they’re not there yet. Do they have to do more in order to get this money?

President Obama: Yes. They’re not quite there yet. There’s been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen, you know, the market for new cars drop from 14 million to nine million. Everybody’s having problems, even Toyota and other very profitable companies.

And so what we’re trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean, mean, and competitive than it currently is.

And that’s gonna mean a set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody’s gonna have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road.

Schieffer: But they’re not there yet.

President Obama: They’re not there yet.

Schieffer: You campaigned on cutting taxes for the middle class.

President Obama: Uh-huh.

Schieffer: And yet lately I don’t see any middle-class tax cut in the version of the budget that’s going through the Senate right now. You have suggested that maybe you’d let the tax cut you put for the middle class in the stimulus bill run out next year. Can you tell us, are you still pushing a middle-class tax cut? I know you said you want the Congress to follow the principles -

President Obama: Right.

Schieffer: – you set out, your priorities – education -

President Obama: Health care.

Schieffer: – reducing the deficit, health care, and so on – and education. But have you abandoned the middle-class tax cut?

President Obama: Absolutely not. Now, first of all, let’s understand, Bob, I’ve delivered that middle-class tax cut for two years in the stimulus package. So people will be getting -

Schieffer: This year and next year.

President Obama: They, that’s right. They will be -

(CROSSTALK)

Schieffer: – lay that one out?

President Obama: Hold on a second. They’ll be seeing their tax cuts in their paychecks starting on April 1st for 95 percent of working families, just as we promised. I strongly believe that we should continue those tax cuts. We should make them permanent because the average worker out there, the average family saw their wages and incomes flatline even during boom times over the last decade. And there’s been a huge growth in income at the very top echelons but not for average American workers. They’ve been losing ground. So I think it’s the right thing to do.

What I’ve also said, though, is we’ve gotta pay for it. Now, in my original budget we had a way of paying for it. And some of the proposals that we have made, members of Congress have said, “Well, we’re not quite comfortable with that.”

So what’ve I’ve said is, if you don’t wanna pay for it in those ways, let’s find another way to pay for it. I think it’s still the right thing to do. And I’m gonna be pushing as hard as I can to get it done in this budget. If it’s not done in this budget then I’m gonna keep on pushing for it next year and the year afterwards so that we don’t see a drop-off after -

Schieffer: So, so what you’re saying is -

President Obama: – the two years the tax cuts are out there.

Schieffer: – the Congress may want to find a different way to pay for it. But you’re gonna insist on -

President Obama: Absolutely. That’s -

(CROSSTALK)

Schieffer: – a middle-class tax cut. I want to ask you also about the, these bonuses and all that on Wall Street. Congress expressed outrage. You seemed outraged. And then after the Congress, the House passed the bill to get that money back with some kind of taxes on those, on those people, you seemed to throw a little cold water on that.

President Obama: Right.

Schieffer: You said we shouldn’t legislate down a banker. Have you now, on reflection, decided that maybe you let that go a little too far?

Schieffer: Thank you.

President Obama: Oh, no, I think that the anger was justified. And had we not seen some healthy expressions of anger, we wouldn’t have gotten $50 million of those bonuses back -

Schieffer: Well, do you -

President Obama: – that, that had been sent to AIG. But what I consistently said – and I said this even on the first day when I announced that, in fact, we were gonna do everything we could to get some of those bonuses back – I said at the time that it is important to keep our eye on the ball. My most important job is to get this economy moving again, to get credit flowing again so that businesses large and small can start rehiring, open their doors, and we can start seeing economic growth again.

That’s my most important job. What I don’t want is that larger project to be threatened by short-term gratification of our legitimate frustrations with some of the behavior that we’ve seen on Wall Street. And I’ve met with bankers, some of the -

Schieffer: Did you talk about that in your big meeting with bankers at the White House?

President Obama: I talked to them. And what I said was, look, first of all, there are a lot of bankers that are doing good work in the community, that are acting responsibly, that haven’t taken huge risks. I understand that. But understand that for the average single mom who is just barely struggling to pay her mortgage or medical bills for her kid, who’s paying her taxes, who’s playing by the rules and then finds out that a taxpayer-assisted firm is paying out multi-million dollar bonuses, that’s just not acceptable. Show some restraint. Show some, show that you get that this is a crisis and everybody has to make sacrifices.

Schieffer: And what did they say?

President Obama: They agreed. And they recognized it. Now, the proof of the pudding’s in the eating. So I expect to see that restraint operate. Another way of putting it, as I said to those folks, let me help you – help me help you. It’s very difficult for me as president to call on the American people to make sacrifices to help shore up the financial system if there’s no sense of mutual obligation and mutual help.

Now, the flip side is, I’ve gotta explain to the American people we’re not gonna get this recovery if we don’t see a recovery of the financial sector. And there’s no separation between Main Street and Wall Street. We’re all in this together. And it’s my job to help keep that focus as we move forward.

Schieffer: One more question, Mr. President. This week I went down to Monticello, Thomas Jefferson’s home, where they have this wonderful new visitor center. And one of the historians down there reminded me that Thomas Jefferson once said the presidency is a splendid misery. (LAUGHTER) But at the end of his term, he also said, quote, that “the presidency had brought him nothing but increasing drudgery and a daily loss of friends.” (LAUGHTER) I just wonder, have you lost any friends yet?

President Obama: I don’t think I’ve lost any friends! But I’m sure I’ve strained some friendships. Look, this is an invigorating job. In some ways, I feel incredibly fortunate to be in this job at a time where the presidency really matters. You know, I’m – this is not a caretaker presidency right now. Every decision we’re making counts. And my team understands that.

You know, if I had my preferences, would I love to deal with one of these at a time? Deal with Afghanistan now and maybe put off banking till later or deal with health care three years from now, that would be great. I don’t have that luxury because the American people don’t have that luxury. They need to be kept safe now. They need health care assistance now. They need this economy back on track now. They need to educate their kids now. And given that they’re having to make a lot of difficult choices, it’s important for us to work as hard as we can to help them live out their American dream.

Schieffer: Thank you, Mr. President.

President Obama: Great to talk to you, Bob. Thank you.