HILLARY CLINTON: I don't think President Obama gets the credit he deserves for digging us

out of the ditch that the republicans dropped us into.

DONALD TRUMP: We have other countries basically sucking away our money, sucking away our jobs.

BERNIE SANDERS: Anyone in this country who works 40 hours a week should not live in poverty.

IF you want a job in Elkhart County, you can find a job.

Its a good place to live for people who need a job who are not college-educated.

People tend to live paycheck to paycheck. The foodstamps that we get are not enough

to feed a family.

Most of our society thinks they deserve something. The Government tends to give too much to people

who don't want to work. I think we're more divided than we've ever been and the people

running for office now--who in the world are you going to vote for?

ANNOUNCER: This is a PBS NEWSHOUR special -- Questions for President Obama.

Now, from the Lerner Theatre in Elkhart, Indiana, PBS NewsHour co-anchor, Gwen Ifill.

GWEN IFILL: Good evening.

And welcome to Elkhart, Indiana, as we sit down with President Obama and the residents

of this community to discuss their concerns, look back on his time in office and assess

the feverish campaign to succeed him.

This marks the president's fifth visit to the once and again RV capital of the world

-- a small city where the unemployment rate hit 19.6 percent his first year in office

and now has dropped to about 4 percent.

But this White House isn't getting any credit for that turnaround. Residents here voted

for Ted Cruz in this year's primaries and Mitt Romney by two to one in 2012. Even when

President Obama won Indiana in 2008, just as the economy was crashing, Elkhart went

with John McCain.

So what gives?

We've asked some of the people who live here to join us on the stage of the beautiful Lerner

Theatre here downtown for an intimate conversation.

But first, the president of the United States, Barack Obama.

PRESIDENT BARACK OBAMA: Hi, Gwen.

(APPLAUSE)

PRESIDENT BARACK OBAMA: Thank you.

(APPLAUSE)

PRESIDENT BARACK OBAMA: Thank you.

(APPLAUSE)

PRESIDENT BARACK OBAMA: How are you?

GWEN IFILL: Hi, Mr. President.

PRESIDENT BARACK OBAMA: It's good to see you.

GWEN IFILL: Thank you.

PRESIDENT BARACK OBAMA: Hello.

(APPLAUSE)

PRESIDENT BARACK OBAMA: Thank you.

(APPLAUSE)

PRESIDENT BARACK OBAMA: Thank you, guys.

GWEN IFILL: Our residents have been waiting faithfully, patiently and eagerly to see you

today.

PRESIDENT BARACK OBAMA: Well, I'm eager to see them.

And this is a beautiful theatre.

GWEN IFILL: It is beautiful.

PRESIDENT BARACK OBAMA: Which got converted. Congratulations on a wonderful venue.

IFILL: Some of them voted for you, some of them didn't. We'll be talking about that...

PRESIDENT BARACK OBAMA: Well, that's what we’d expect.

GWEN IFILL: -- in a moment.

But I first want to ask by talking to you a little bit about this campaign.

What do you think it means when you hear the words “let's make America great again”?

PRESIDENT BARACK OBAMA: I think America is pretty great. And, you know, it's interesting,

I do a lot of commencement speeches this time of year. In fact, tomorrow, I'm going to be

going to the Air Force Academy to deliver a commencement for the second time there.

And I always remind young people that despite all the challenges that we face right now,

if you had the choice to be born in -- in any one period of time in -- in our history,

and you didn't know ahead of time whether you were going to be rich or poor, black or

white, male or female, you know, you just had to guess on what moment do you have a

best chance of succeeding, it actually would be now.

That America is the strongest country on Earth. Its economy is the most durable on Earth.

You know, we are a -- a country that has incredible diversity, people are striving, working hard,

creating businesses. We've got the best universities in the world, the best scientists.

You know, so we've got -- we've got some challenges and we've just come through a very rough stretch

as a consequence of the financial crisis, but overall, not only are we recovered from

the crisis that we had, but we're well positioned to do extraordinarily well going forward as

long as we make some good decisions.

GWEN IFILL: And yet, many people, including probably some folks in this room...

PRESIDENT BARACK OBAMA: Yes.

GWEN IFILL: -- think the deficits have gone up and the jobless rate has gone up. And,

in fact, that their lives have not improved.

How -- in fact, we have your nominee for the -- the presumptive nominee for the Republican

Party saying, Donald Trump, saying this -- America is a third world nation.

How do you persuade -- or I suppose, how does your likely Democratic successor, possible,

persuade anybody that's not true?

PRESIDENT BARACK OBAMA: Well, it's important you said my successor, because Michelle would

be very upset if she thought I was running again.

Look, you just look at the evidence here in Elkhart. As you mentioned in the introduction,

when I took office, this was the first city I came to. And unemployment about a month

after I took office, a month and a half after I took office, was almost 20 percent. One

out of 10 people were behind on their mortgage or in foreclosure.

Today, the unemployment rate is around 4 percent. It's only about one in 30 people who are behind

on their mortgage. The RV industry, which is, uh, central to Elkhart, is on track to

break records in terms of sales. And so that doesn't mean that folks aren't struggling

in some circumstances. And one of the things that I've emphasized is that there are some

long-term trends in the economy that we have to tackle in terms of wages not going up as

fast as they used to, some big costs, like college costs or health care costs that are

still a challenge, people still worrying about retirement.

And so we're going to have to make sure that we make some good decisions going forward.

But the notion that somehow America is in decline is just not borne out by the facts.

That...

GWEN IFILL: But it resonates. It resonates among a lot of...

PRESIDENT BARACK OBAMA: Well...

GWEN IFILL: -- aggrieved people who are voting in big numbers for Donald Trump.

PRESIDENT BARACK OBAMA: Well, look, -- I think that what it is also -- always been true in

American politics is that when we've gone through a tough time -- and we went through

the worst financial crisis of our lifetimes. I'm looking around and I -- I think it's safe

to say that it's been the worst in -- in the lifetimes or memories of most people here.

Then you feel nervous. People lost homes. People lost savings. People were worried about

whether or not they could make ends meet.

And so we're -- even though we've recovered, people feel like the ground under their feet

isn't quite as solid. And in those circumstances, a lot of times it's easy for somebody to come

up and say you know what, if we deport all the immigrants and build a wall or if we cut

off trade with China, or if we do X or Y or Z, that there's some simple answer and suddenly

everything is going to feel secure. And...

GWEN IFILL: Why don't -- why don't you mention Donald Trump by name?

PRESIDENT BARACK OBAMA: You know, he seems to do a good job mentioning his own name,

so...

(LAUGHTER)

PRESIDENT BARACK OBAMA: -- I figure -- you know...

(LAUGHTER)

PRESIDENT BARACK OBAMA: -- I'll let him do his advertising for him.

GWEN IFILL: Do you consider at all that any of the support for him is backlash against

you personally?

PRESIDENT BARACK OBAMA: Well, here's one thing I would say -- and I just spoke about this

at the local high school. I think Trump is a more colorful character than some of the

other Republican elected officials, but a lot of the story that he's telling is entirely

consistent with what folks have been saying about me or the general story they've been

telling about the economy for the last seven and a half, the last 10, the last 20, the

last 30 years. And you can -- you can actually describe the story fairly concisely, right?

The -- the basic story they tell is that the problems that the middle class working families

are experiencing has to do with a big bloated government that taxes the heck out of people

and then gives that money to undeserving folks, welfare cheats or, you know, the 47 percent

who are takers or, you know, whatever phrase they use, that businesses are being strangled

by over-regulation, that, you know, Obamacare has killed jobs.

And the fact of the matter is when you look at it, the government, as a proportion of

our overall economy, is actually smaller now under my presidency than it was under Ronald

Reagan...

GWEN IFILL: Let me read you something...

PRESIDENT BARACK OBAMA: : -- I have...

GWEN IFILL: -- that Bill Clinton said, though.

PRESIDENT BARACK OBAMA: But -- but let me -- let me finish, Gwen.

GWEN IFILL: OK.

PRESIDENT BARACK OBAMA: We have fewer federal employees today.

GWEN IFILL: Um-hmm.

PRESIDENT BARACK OBAMA: The -- the health care costs since I signed Obamacare have actually

gone up slower than they were before I signed it. Twenty million more people have health

insurance.

So the arguments they're making just are not borne out by the facts. But what is true is

that if people are feeling secure -- feeling insecure and they're offered a simple reason

for how they can feel more secure, people are going to be tempted by it, particularly

if they're hearing that same story over and over again.

GWEN IFILL: Perception. So Bill Clinton said, "Millions and millions and millions of people

look at that pretty picture of America you painted," which you just described, "and they

cannot find themselves in it to save their lives."

PRESIDENT BARACK OBAMA: The pretty picture that...

GWEN IFILL: The pretty picture of all the things that have gone well. Why is there a

disconnect between -- that he's describing here?

PRESIDENT BARACK OBAMA: Well, look, here's what has changed in the economy over the last

20 to 30 years. Right after World War II, America was ascendant. It was dominant around

the world because Europe was blown up. Japan was digging itself out of the rubble. China

was still a backwater. Eastern Europe was behind the Iron Curtain.

There wasn't much competition. We were the only folks who were seriously making cars

and trucks and appliances and you name it.

We had strong unionization, which meant that workers had leverage so that they could get

a good share of a growing pie. And people saw each year and each generation their standards

of living going up pretty rapidly.

And what started happening is you started seeing foreign competition. Unions started

getting busted, so workers had less leverage, which meant their wages didn't go up quite

as fast. You started seeing the end of defined benefit pension plans. In terms of health

care programs, if you had health care on your job, suddenly you were paying a lot of deductibles

and premiums.

College costs started going up because the public university system, which used to be

generously funded by state governments so that tuition was low, suddenly state governments

were spending more money on prisons than they were on universities, which meant tuition

went up.

You add all those things together, and people then start feeling more stressed.

Now, the answer to that is how do we get wages up; how do we make sure that you can save

for retirement; how can you make sure that your kid can afford to get a higher education

to compete for the jobs of the future. And the question then is what is actually going

to get that done?

To me, if we raise the minimum wage; if we make it easier not harder for people to unionize;

if we negotiate trade deals that raise labor standards and environmental standards in other

countries, instead of letting them sell here and we can't sell there; if we make sure that

we're rebuilding our roads and our bridges and our infrastructure to put a bunch of folks

in hard-hats back to work; if we make Social Security stronger rather than cutting it.

If we do those things, then we are going to see wages go up, labor markets tighten, and

we will relieve a lot of the stress that people feel. But if you look at the arguments that

are being made by the Republicans and the actions that have been taken by those members

of Congress, it's hard to see how cutting taxes for the wealthiest Americans, deregulating

Wall Street again, is somehow going to benefit middle class families.

GWEN IFILL: But let's turn to the audience and see what they think. We're going to open

this conversation up. I have a lot more questions, but they do, too. And we're going to be right

back in just a moment with that.

(BREAK) GWEN IFILL: So Mr. President, we are back

with a few questions for you from our invited audience here. They are anxious to get started

and so am I.

You're a small businessman here in Elkhart.

BILL KERCHER, Farmer: Yes, I am.

GWEN IFILL: What's your name?

BILL KERCHER: Bill Kercher.

GWEN IFILL: What's your question for the president?

BILL KERCHER: Mr. President, I am a fifth-generation fruit and vegetable grower here in Elkhart

County. And over the last six years, we've seen a dramatic increase in the number of

regulations that touch all aspects of our business, from the Food Safety Modernization

Act to Obamacare and many others.

Now, large farms are able to comply with these regulations more easily, and small family

farms we've seen actually exiting the industry. At what point are we overregulated, if not

now? And how can we encourage younger growers to either stay or enter an industry when the

barriers to entry are higher than ever?

Thank you.

PRESIDENT BARACK OBAMA: Well, it's a great question. And first of all, my administration's

policy has been to encourage family farming, rather than big agribusiness, because not

only is that sort of a model of farming that built this country, but as Michelle will tell

you, it actually produces food that's better for you, as she reminds me constantly.

So, you know, we want you to succeed. Now, if you look at the trend lines in terms of

small family farms, the problem generally has been actually farms getting bought up

by larger agricultural operations. It's been you guys not always getting good prices for

the products that you put together.

I don't doubt that some elements of the regulations I put in place have probably put a burden

on you. So let's take health care for example. It may be that previously you weren't -- you

didn't think you were able to provide health insurance for your employees. The problem

is that if they're not getting health insurance through you, then that means that they're