Private Residence Los Altos Hills, California

12:00 P.M. PDT

THE PRESIDENT: Hello, everybody. (Applause.) Oh, no need to stand again. Sit down. Thank you so much. (Applause.)

Well, there are two reasons Im here. Number one, its really nice. (Laughter.) The weather is good. Its pretty -- its gorgeous. The second reason is George and Judys granddaughter and me, weve just got a connection. (Laughter.) She is adorable. There she is. (Laughter and applause.) Look how happy she is to be with the President. (Laughter and applause.) I may take her with me. (Laughter.) She is gorgeous.

A couple of people I want to thank. Obviously, George and Judy, we want to thank them not only for their incredible hospitality, but for the amazing support that they provided to so many important causes through the years. Its wonderful to see somebody who has really lived out the American Dream, remembers it, and wants to give back. And so please give them a big round of applause. (Applause.)

One of my favorite people, even if I did not entirely depend on her for all kinds of stuff -- she is somebody who combines grace and intelligence and toughness with deep and abiding compassion. And she has just been a remarkable partner to me throughout my presidency, and George is exactly right, I need her back as Speaker of the House -- Nancy Pelosi. (Applause.)

Nancy could not do what she does unless she has good partners in Congress. And one of the best partners she could ever hope for is your own Congresswoman, who not only represents this district but is a leader on issues across the board and has been a great friend -- Anna Eshoo. Thank you for all the work, Anna, on this. (Applause.)

And then weve got a couple of candidates who are here. Michael Eggman is here. Where is Michael? There he is. (Applause.) And Amanda Renteria -- there she is -- Renteria. (Applause.) Two outstanding candidates and part of what it is that were just trying to build here and across the country.

Ive got so many friends, so many people who have supported me for so long. As I look back, I realize how many of you have pictures of me with no gray hair. (Laughter.) Youre chronicling the slow deterioration of Barack Obama. But as a consequence, one of my main functions here today is just to say thank you because you guys have been incredibly supportive in everything that weve done at every stage. Many of you supported me back when I was running for the U.S. Senate, when nobody could pronounce my name, and then helped to mobilize an amazing movement back in 2008, and it continued until today.

So because I know so many of you so well, Im not going to speak long at the top. What I want to do is spend most of the time in a conversation with you. Let me just make a couple of observations.

Number one, as George alluded to, when we came into office we were going through the worst economy since the Great Depression. In fact, the contraction was actually larger by some measures than the Great Depression. In part because of the incredible resilience of the American people, but in part because we actually put some smart policies in place, the record over the last five years is some pretty remarkable progress.

Theres almost no economic measure by which we are not better off today than we were when I came into office -- that 52 straight months of job growth; 10 million jobs created; this past year, the biggest drop in unemployment in 30 years. Unemployment now is lower than it was before Lehmans. Weve seen the deficit cut by more than half. Millions of people have health care that didnt have it before and health care inflation is the lowest that its been in 50 years. The stock market, obviously, has more than recovered and thats important for Wall Street but, more importantly, its important for Main Street. People whose 401(k)s had collapsed have built up some sense of retirement security once again.

When I came into office, investors around the world thought that China was the top place to do business. Today they think that America is the top place to do business -- in part because of the fact that weve recovered faster than most industrialized nations and come further; in part because some of the energy policies that weve put in place means that for the first time in over 20 years were now producing more oil than we import. We doubled clean energy, tripled the amount of wind energy that we produce, increased by 10 times the amount of solar energy that were producing, and we have reduced carbon pollution by the largest factor of any industrialized nation. High school dropout rates have gone down; college attendance is up.

And when you put all this together -- manufacturing stronger than any time since the 1990s; an auto industry that was on the verge of collapse now fully recovered and stronger than ever and producing cars that not only people want to buy but also are slated to double fuel efficiency by the next decade -- its no wonder then that a lot of people outside of the United States would say weve got the best cards out there. Theres no country that wouldnt gladly trade places with us in terms of our strategic position. And part of that is also because we continue to have a culture of innovation and dynamism that Silicon Valley represents better than anyplace else on Earth.

And yet, theres a lot of anxiety out there. And theres anxiety for a couple of reasons. Number one, for all the progress that weve made, theres a 20, 30-year trend that has not changed, and that is that more and more, productivity, corporate profits, the benefits of innovation accrue to folks at the very top. And the middle class and folks striving to get into the middle class, theyre stuck. They feel like theyre treading water. They feel as if, no matter how hard they work, they cant get ahead, and, more worrisome, theyre concerned that their kids are not going to be able to get ahead.

And the second concern people have is it feels as if Washington doesnt work and doesnt listen to people and isnt paying attention to them. And those two things are related.

There are specific policies we could put in place that we know would make life easier for people out there who are working hard on behalf of their families and trying to do the right thing. We know that if we had a sensible policy of rebuilding our infrastructure -- our roads, our bridges, our ports, a smart grid -- that all of that would spur on growth, put people to work right away; wed have lower unemployment, and wed be setting the stage for economic growth for decades to come.

We know that if we invest in early childhood education, every dollar we put in we get $7 back in terms of kids doing better in school, less likely to drop out, less likely to end up in prison, less likely to be unemployed. We know that.

We know that 28 million people would be helped if we raise the minimum wage so that its comparable to what it was 20 years ago. We know that if we helped working families deal with issues like child care that that would be an enormous burden lifted off them. We know that if women who are in the workforce arent getting paid less than men for doing the same job, thats not just good for the women, its good for entire families because, as Anna and Nancy often remind us, when women succeed, America succeeds. (Applause.) And by the way, as the child of a single mom, you dont have to convince me on that.

So we know what works. This is not a technical problem. We have some big technical issues: What are the -- whats the next big energy breakthrough thats going to allow us to fully contain the dangers of climate change? How do we make sure that all the innovation and productivity that is taking place and generated in places like this translate into more jobs and not more layoffs? Theres some big, technical, economic issues, scientific issues that we have to address. But if we just took some common-sense steps, this country would grow faster, more people would be working, more families would be better off.

And the reason we dont do it is because politics doesnt work in Washington. And the reason politics does not work in Washington -- I want to be clear -- is not because both parties are in the tank. Its not because everybody who goes to Congress is solely self-interested. The reason it doesnt work right now is because we have one party that has no agenda other than making government not work; whose primary function, primary purpose right now, if you distill their ideology, comes down to saying no to any efforts to help ordinary families get ahead. Some of it is ideologically-driven. Some of it is driven by pure political calculation -- because what they know is if government is not working, people get cynical; and if people get cynical they do not vote; and if people do not vote that advantages them.

And so I hope the reason that youre here today is because you want to get something done. And in order to get something done, we have to reverse that cycle. We have to break this cycle of gridlock and cynicism. And theres a real simply way to do it: Its making sure that people who are serious about governing are in power.

And I say that not as a strict partisan. Yes, I am a Democrat and Im a proud Democrat. But my favorite President is the first Republican President from my home state of Illinois, a guy name Abraham Lincoln. And there has been throughout our history contributions by both parties to advance the common good. Id love nothing more than a loyal and rational opposition. But thats not what we have right now, and as a consequence were going to need change. And to bring about change, were going to need you.

So Ill just close by saying that Democrats have a lot of good qualities. We do have a congenital defect, and that is we do not vote during midterm elections. But I need everybody here to have as great a sense of urgency about these midterms as you had about my election in 2008, or my election in 2012. Because as much as I can do as President of the United States, I cannot do it alone. I need partners. I need help. And that help comes in the form of having Nancy Pelosi as Speaker, and having Anna as somebody whos in the majority. So I hope all of you get to work.

With that, let me take some questions. (Applause.)

END 12:13 P.M. PDT