BARTIROMO: Let me move on from taxes. I don't want to spend all the time there. Let's talk about small business. This is the one area of the economy that really is creating jobs, small business.

Sen. OBAMA: Yes, absolutely.

BARTIROMO: You want to index the minimum wage to inflation, we'll see the minimum wage go up every year. You are looking to strengthen the unions. Basically, making costs go up for small business. Why put a further strain of expenses, higher expenses, on the one place in the economy that's actually creating jobs?

Sen. OBAMA: Well, actually, you know, that's not entirely true. It is true that I think that having the minimum wage go up every 10 years is a bad idea and it's not good for small businesses, because they get socked with sudden jumps as opposed to something more gradual that they can build into their cost structures. It is true that I think that unions are a useful thing. But generally that's not affecting the average small business, that is typically much more targeted at large companies who, again, wages and incomes have not gone up for the average worker over the last seven years. There's a reason for that, and that's a problem. I actually want to provide more tax breaks to small businesses, because I think they are the primary generator of income.

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?

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