President Obama holds a press conference today at 11am ET. I’ll monitor it here. The press event is supposed to focus on the economy, though that isn’t sexy enough for the media as some dude with a handlebar moustache burning Korans, so that will probably take precedence. And then the media will wonder why the President isn’t “focusing on the economy.”

…The presser is taking place in the East Room. Obama is expected to announce in remarks before taking questions the appointment of Austan Goolsbee as the head of the Council of Economic Advisers.

Obama starts out by criticizing the previous Administration for cutting taxes for millionaires and billionaires, ignoring regulations and leading us to a financial crisis and a deep recession.

Obama walks the tightrope, says even though we’re growing again, progress has been painfully slow. Measures announced this week designed to accelerate job growth in the short term, and produce a foundation for growth in the long term.

He briefly describes the three pieces – making permanent the R&D tax credit, write-offs for business capital expenditures, and a 6-year plan for infrastructure with front-loaded money. Also touts the small business bill, which is virtually assured to pass after George Voinovich announced his support yesterday.

Obama cites the Voinovich shift, and his statement, “We don’t have time to play games.” Obama says he couldn’t agree more. “We weren’t sent to Washington to think about our jobs, we were sent to think about theirs.”

Now announcing Austan Goolsbee’s promotion to the head of the Council of Economic Advisers.

…Brief remarks about September 11. Obama will be at the Pentagon, Biden in NYC. “Tomorrow’s a national day of service and remembrance.”

Questions begin. First question on the midterms and whether it’s a referendum on the economy.

Obama restates the question. If the election is about the policies that will move us forward versus the policies that would move us into a mess, he thinks the Dems will do well. Basically reiterates the state of the economy under Bush. Again says that job growth in the 2000s was the slowest for a recovery since WWII.

Now it’s just the usual “we’re moving forward but we’re not there yet.” Says “we lost four million jobs in the six months before I was sworn in.” Good to actually look backwards here, though I’m missing the word “Republicans.”

…People are frustrated and people are angry. Since I’m the President and Dems control Congress, it’s understandable that people are saying “What have you done?” Actually says “Republicans,” i.e. “The Republicans are offering the same policies that got us into this mess.”

…Brings up taxes unprompted. “I am prepared to sign a bill this month that ensure middle class families get tax relief.” We can give permanent tax relief to 97% of families. Says that families making above that would still get tax relief on the first $250K. Republicans are holding that hostage because they want to give $100,000 to every millionaire. They want to spend $700 billion on that, and economists say it’s the worst way to stimulate the economy.

…Next question. “Is there room for middle ground,” like temporary extension of tax cuts? Obama: certainly there’s room for discussion. On small business bill, he “doesn’t understand” why the bill wasn’t passed two months ago. On the high-income tax cuts, my position is let’s get done what we all agree on. Let’s work on making middle-class tax cuts permanent. We can have a discussion on giving $100K to millionaires. There are a lot better ways of spending that money. Why would we borrow money to help people who don’t need help? We’ve got an area of agreement, let’s do that this month. We could give every American certainty and tax relief up to $250,000 a year. Nice use of “certainty” there.

…Obama again avoids calling for a veto. Says again, let’s give certainty to families out there having a tough time.

Next question: Chip Reid. Why did you wait until campaign season for the business tax cuts? On the stimulus part, why won’t anyone say the word? Is that because stimulus is unpopular?

Obama goes back to beginning of term. We put in place of an economic plan which 95% of economists say saved us from a Depression. This notion that we waited until now, just on the small business issue alone, we cut taxes on them eight times in 18 months (so why will tax cut #9 work? -ed.)

Proposals we put forward are historically ones that have bipartisan support.

Obama admits that the infrastructure piece is basically just a re-tooled and front-loaded highway bill.

Says what we did previously worked, but we just have a long way to go. Chip Reid asks “so this is a second stimulus?” Obama says everything we’ve tried to do is designed to stimulate growth and jobs in the economy. Isn’t that what I should be doing? I assume that’s what the Republicans think we should do. I will try to keep on this as long as I’m President.

Next question on naming a head of the CFPB. Is Elizabeth Warren still a candidate? Obama: This is a great opportunity to talk about the CFPB. An independent agency whose sole job is to protect families in their financial transactions. Briefly describes CFPB and benefits for consumers. This agency has the capacity to really provide families protection that has been lacking for too long. I’ve known Warren since law school. I have been in conversations with her. It’s only been a couple months. This is a big task standing up this agency. It was her idea. I should have an announcement soon.

Concerned about her Senate confirmation? I’m concerned about all Senate confirmations these days. If I hire a dog catcher… I’ve got people who were voted out of committee unanimously and I can’t get a vote on. Judges, homeland security. Determined minority in the Senate insists on a 60-vote filibuster on everyone, even if after we break the filibuster, they get 90 votes. They’re just playing games. It’s time to stop.

Chuck Todd asks, “how have you changed Washington?” Obviously not a lot, after that dumbass question. Obama answers it by mentioning policies he’s signed into law.

“If you’re asking why I haven’t been able to create a greater spirit of cooperation in Washington, I think that’s fair… I’m as frustrated as anyone by it.” Says Republican leaders made a decision to sit on the sidelines. “We got a lot of resistance very early.” When you take on tough issues, there’s a lot of money at stake, you end up having a lot of big fights and it’s messy and frustrating.

I could have not taken on those issues. Could have let health care go. Could have let Wall Street reform go. “I don’t think that’s the kind of leadership that the American people would want from their President.”

Anne Kornblut goes there on American resentment rising against Islam. Obama: when country is anxious generally, fears can surface, suspicions and divisions can surface. That plays a role. I admired President Bush for saying we were not at war with Islam after 9/11. We were at war with terrorists who perverted Islam. Proud of country rallying around that idea. Americans standing together. We should take pride in that. I think it’s important now for the majority of the American people to hang onto that thing that is best in us: belief in religious tolerance. Al Qaeda has killed more Muslims than anyone. We have to be careful that we don’t turn on each other. We are one nation under God and we may call that God different names but we are one nation. As someone who relies heavily on my Christian faith (I’m a Christian!!!!), I am mindful of the fact that others share other faiths. I want to make sure this country retains that sense of purpose. We can remind ourselves of that tomorrow.

Haaretz question: on Middle East peace talks. If they fail at an early stage, will Administration disengage? Obama: Abbas and Netanyahu were here last week. They came with a sense of purpose and seriousness and cordiality that exceeded a lot of people’s expectations (yes, but the reporter’s question was about what happened after that meeting). Clinton will be flying to the Middle East next week for next meeting on Sept. 14-15. We’ve brought the parties together to recognize that the path for Israeli security and Palestinian sovereignty can only be met through negotiations. Lots of people in the region want to undermine it.

We understood it was a risk to open these discussions. But it was a risk worth taking. It’s in everyone’s interest to arrive at a peace deal. The two parties need each other, but that doesn’t mean it’s going to work. We can facilitate and encourage them arriving at a solution. Ultimately, it’s up to them. I remain hopeful but this is going to be tough.

If these talks break down, we’re going to keep on trying. A deal would help us deal with the dynamic in the region. Not doing this just to feel good. Will help secure America.

Jake Tapper: Were you concerned about elevating the pastor in Florida by having Robert Gates call him? Then, on health care, CMS reported that the cost curve is bending up (no it isn’t) and Dems aren’t talking about it.

Obama: I’ll repeat what I said about the pastor in Florida. Burning the sacred texts of someone else’s religion is contrary to what this nation stands for. Hope this guy prays on it and refrains from doing it. We saw today riots in Afghanistan that threaten men and women in uniform. We have an obligation to send a clear message that this threatened action put soldiers in harm’s way (so did putting soldier’s in harm’s way). This endangered our troops. I hardly think “we’re the ones who elevated this story.” (dig at the media)

With respect to health care, bending the cost curve is hard to do. We’ve got hundreds of thousands of doctors and providers and insurers. We took every idea out there to reduce or slow the growth of the cost of health care (uh, no). Our goal is to slowly bring down those costs. Also 31 million people who aren’t getting health insurance will start getting it. Implementation so far has been smooth. Kids under 26 can stay on parent’s policy, children can’t be denied coverage for pre-existing condition, no rescissions. Four million small businesses eligible for 35% tax break for purchasing health care.

Slaps down Tapper’s idiocy. “We didn’t think we would cover 30 million people for free.” Whatever you think about health care, Tapper’s being intentionally obtuse here.

House Dems running against health care? Obama: We’re in a political season, every candidate has their own district and their own message. In an environment with 9.5% unemployment people will make the best argument they can, try to align with polls. That’s how political races work.

Question on fighting poverty in black community, and Cobell and Pigford II. Obama: these relate to settlements surrounding historic discrimination against black farmers. It is a fair and just settlement. We think it’s important for Congress to fund it, we’re going to continue to make it a priority. Obama says he got his start working on South Side of Chicago. Constantly thinking about creating ladders to move into the middle class. Most important anti-poverty effort is making sure economy is growing and creating jobs. Bigger than any program or transfer payment.

…We want broad-based job growth and business expansion. We’re up against tough headwinds. My central focus. We can do targeted things to help communities in need. We should improve school systems in low-income communities.

Touts Race to the Top, says it’s based on “proven ideas.” (Really?) Higher education is important too, and touts student loan reform. Poor kids will benefit the most from that.

Question on Afghanistan: How can you lecture Hamid Karzai on corruption when they’re on the US payroll? Also should Netanyahu extend the settlement moratorium.

Obama: I want to remind people why we’re in Afghanistan the day before September 11. We want to dismantle Al Qaeda and that Afghanistan is never used as a base for attacks. Afghanistan also the second-poorest country in the world. Multi-ethnic population that mistrusts each other. Illiteracy at 70%. No tradition of strong central government. We said that after 7 years of drift, we’re going to work with government to train Afghan security forces. We will promote a political settlement in the region. We will encourage government to provide services to its people. And we’ll try to reduce corruption. We’ve made progress on some of those fronts. Example on corruption: four years ago 11 judges indicted for corruption, this year 86. Afghan efforts have gone after police commanders, businessmen. But we’re a long way from where we need to be on that.

(He’s completely ignoring the question.)

We’re going to keep putting pressure on Karzai. Won’t happen overnight. Some of our folks on the ground have made compromises with folks engaged in corruption. We’ve got to make sure we’re not sending a mixed message. I’ve told national security team to be consistent. We don’t want to give a wink and a nod. Actions have to match up. Challenging environment “in which to do that.” (hm.)

On Netanyahu. The potential lapse of the settlement moratorium will be a major bone of contention. Palestinians were skeptical at first, but moratorium has been significant. Now they want it to continue. I’ve said to Netanyahu that, since talks are moving forward in constructive way, it makes sense to extend moratorium. Politics for Netanyahu are difficult. Members of coalition don’t want to continue it. Abbas must show Israeli public that he’s serious and constructive in these talks to make politics for Netanyahu easier.

Both sides need to think about how to make the other succeed.

Ann Compton question: why are plotters still awaiting trial? Why has that stalled? Gitmo still open? Civilian trial? Obama: we have succeeded on a lot of campaign promises, we have fallen short on Guantanamo. It’s not for lack of trying, it’s because politics are difficult. I believe American justice system is strong enough for this. We should be able to convict and lock up terrorists. We’ve done it before. We’ve got terrorists in maximum security prisons all over the country. This issue has generated a lot of political rhetoric. This country is resilient. We can’t be frightened by a handful of people trying to do us harm, especially when we captured them. There are also circumstances where a military tribunal may be appropriate. For example, we may have captured them in theater, may not have the chain of evidence. But we know they’re guilty (????). So military commissions may be appropriate if it meets highest standards of due process.

(That’s gobbledygook)

I think KSM trial needs to happen. This is going to have to be on a bipartisan basis. Should move forward in a way consistent with due process, Constitution, image in the world as a country caring about rule of law. Al Qaeda still cites Gitmo as a recruiting tool. We can use various mechanisms of our justice system to prosecute these folks.

Ed Henry question. Will we ever catch bin Laden? Isn’t this a failure of not capturing him (unbelievable)? Obama: I think capturing or killing bin Laden and Zawahiri would be very important to our national security. We’ve successfully ramped up the pressure on Al Qaeda in ways that has made it harder for them to operate. Bin Laden and Zawahiri have gone deeper underground. We have people thinking about this day and night. Followup: Do we have another generation of this terror threat? Obama: Always going to be the potential of a small group of individuals, if they are willing to die, of killing others. That threat is there. People shouldn’t live in fear, but it’s a reality of today’s world. I think we’ve greatly improved homeland security. America’s strength comes in part from its resilience. We shouldn’t lose who we are and overreact. It doesn’t have to distort us or dominate our foreign policy (very dissonant there).

Final question on the damn mosque at Ground Zero (ugh) and Koran burning (ugh ugh). Obama: Koran burning threat has made life difficult for troops overseas. On Park51, this country stands for the proposition that all men and women are created equal, and they have certain inalienable rights, and one of them is the right to worship freely. You should be able to build mosque on the site like any other house of worship. I recognize pain of 9/11, met with families. But we are not at war against Islam, we are at war against terrorist groups that have distorted Islam to engage in destructive acts. We must be clear about that. We need all the allies we can get. The folks most interested in war between the West and Islam are Al Qaeda. Fortunately the overwhelming majority of Muslims are peace-loving and interested in the same things as us. They have rejected this violent ideology for the most part. We want to be clear about the enemy. Tiny minority of people.

We’ve got millions of Muslim-Americans in this country. They’re our friends and co-workers. When we start acting like their religion is offensive, what are we saying to them? I have Muslims fighting in Afghanistan, putting their lives on the line for us. They are Americans and we honor their service. They should understand that we don’t differentiate between them and us. It’s just us.