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And one of the areas that I want to help small businesses on is their health care costs, which are crushing them. And if you talk to a lot of small business owners, not only are they having problems if they provide health care to their employees, but they're also having problems paying health care for themselves. And if we can provide them significant relief there, then I think that there are going to be a whole bunch of small businesses who are going to be much more successful in building their businesses and expanding it over time.

BARTIROMO: But you say that, but we've had small businesses on, they're terrified. They feel that their costs are about to soar.

Sen. OBAMA: I know. Small businesses often get terrified because people ramp up. The chambers of commerce, anytime you talk about the minimum wage, the sky is falling. The sky doesn't fall. And as I said, the--what is important is making sure that this happens over a gradual period of time. Instead of us lurching back and forth, what I want to do is to create a climate for sustained economic growth. Small businesses are going to be the heart of that, and that's why we're going to give a large amount of support to small businesses in the form of tax breaks for investment and in making sure that their health care costs are dealt with.

BARTIROMO: Let's talk about spending. You've got a $400-plus billion deficit. How do you plan to pay for the new health, education, you mentioned green technology, social programs...

Sen. OBAMA: Right.

BARTIROMO: ...in the middle of a recession?

Sen. OBAMA: Well, I tell you what...

BARTIROMO: Away from tax cuts?

Sen. OBAMA: Right. The two points I would make. Number one, as I said, I'm going to have to take a look at what revenues are coming in when I take office because, you know, I'm not ideological and I think it is very important for us to stick to a principle of pay as you go. If I'm going to cut taxes for the middle class, as I've proposed, that means that I've got to either end some tax breaks elsewhere or cut spending. And if I want to increase spending, then I've got to find offsetting revenues or cut programs that aren't working. That's a principle that I believe in strongly and I will run on and implement when I'm president.

What's interesting, though, is The Wall Street Journal, I think--actually a columnist looked, in The Wall Street Journal, at does Obama's policies in fact add up? Do the numbers add up? And the conclusion was, yes. Because not only have I called for an end to the war in Iraq, which would not provide all the money that's being spent there--some of that's going to have to go to resetting our military, dealing with veterans and so forth--but there will be some money that we can use for other things.

Number two is the rollback of the Bush tax cuts on the top 1 and 2 percent. That will in fact create additional revenue. And the third thing is the cap and trade system that I've proposed to deal with climate change and to increase energy independence. That potentially generates billions of dollars that we can reinvest in solar, wind, biodiesel, creating jobs here in America that can't be exported. And so when you tally it all up, all my proposals pay for themselves.

Now, as I said before, it could be that revenues are so short in a year's time that we've got to make some assessments. And I am not going to initiate programs that can't be paid for.

BARTIROMO: So name three spending programs you would cut to balance the budget.

Sen. OBAMA: Oh, you know, there are probably some weapons programs that I think are not serving our national security interests that need to be examined, and we've got to do an audit there. There are reforms that need to be made in our purchasing processes, where--simple things, you know. If we actually made sure that every government employee had a single, you know, debit card or credit card, then negotiated with large purchasers to get the discounts that any other large purchaser would get, we could lop off 10 percent of some of our major purchases by the federal government. Our travel allowances and expenses are a major problem. We could save several billion dollars just in how we set up government travel. So there are a whole bunch of areas where we can make some significant savings.

I will tell you, though, that historically when--you know, the fact is that the federal government primarily spends its money on Social Security, on Medicare and Medicaid, and on defense. And that's the bulk of our spending.

The biggest thing we've got to do is get control of our health care spending, and that's why the health care plan that I've proposed, although costing some money in the front end--we've got to help rural hospitals invest in, you know, health IT. We've got to make sure that we are bringing people into coverage so that they're not going to the emergency room. Short term, that will cost us some money. Long term, the more we emphasize prevention, the less likely we are to pay huge bills down the road. That's the only way we're going to get control of health care inflation. And if you talk to any executive, as well as any actuary who's looking at government spending, our biggest crisis looming in the horizon has to do with our health care costs. And the only way to really solve it long term is to make sure that we are making for a healthier America and improving the quality of care so that we get more bang for our health care dollar.

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