President Barack Obama told a gathering in a Des Moines home Wednesday that after nearly a decade of bad policies, the country has a big hole to climb out of.

He argued the country is on the right track, but acknowledged that college graduates and the generation coming of age will face the toughest economy of any generation since the Great Depression.

President Obama met with about 80 people in the backyard of a middle class Beaverdale neighborhood at the home of Jeff Clubb and Sandy Hatfield-Clubb. Guests included family members of the Clubbs, Drake University athletes, city council members, friends and neighbors.

Gov. Chet Culver was also there; he and his family greeted the president along with other Iowa politicians and officials when Air Force One arrived Tuesday night.

The president put a strong emphasis on what has been or needs to be done to boost the nation’s education system. He cited the goal of helping young people by expanding the federal student loan program and allowing people to stay on their parents’ health insurance plan up to age 26, and said building back strength in long-term economy requires bringing education back to the top in the United States.

“We’ve got to make tough choices if we’re going solve some of these long-term problems we’ve been putting off,” Obama said. “That means putting aside some of the politics as usual, and it also means sometimes telling folks things they don’t want to hear,” which he acknowledged is difficult in an election season.

Obama said the U.S. drop in student rankings on science and math performance and the drop in number of college graduates need to be reversed. Too many schools are failing, and students who work hard should be able to afford a college education, he said.

He said his Race to the Top program sparked reform in 32 states, the biggest reform in a generation.

Obama also said community colleges could be a terrific gateway to getting people back to work through either two-year degrees or short-term training programs. But he warned of how the Republican agenda could jeopardize his attempts to improve education, specifically extending the Bush-era tax cuts for the wealthiest 2 percent of Americans.

“We don’t have $700 billion for these cuts,” Obama said. “So we’ll have to either borrow — and thereby increase our deficit — or cut the equivalent of 20 percent of our educational budget.”

Obama said what the Republicans propose are the same policies from 2001 to 2009, when, he said, the average middle class wage declined by 5 percent. He said part of their proposal to pay for tax cuts for top wage earners would include cutting back on college tuition assistance for nearly 8 million college students.

In answering a question from a guest about what effect those tax cuts would have on small businesses, Obama said his administration cut taxes several times, including a bill this week.

“Your taxes have not gone up in this administration. Your taxes have gone down in this administration,” Obama said. “I just think the notion is ‘well, he’s a Democrat, so your taxes must have gone up,’ but that’s just not true. Taxes have gone down for you, the small business person — and, by the way, for 95 percent of working families that was part of the recovery act was reducing people’s taxes.”

Deficit

“When people look at the budget, a lot of times … people say ‘well, why don’t you eliminate all those earmarks? All of those pork projects that members of Congress are getting out there?'” Obama said. “Now, I actually think a lot of that stuff needs to end, but even if I ended every single earmark, pork project by members of Congress, that’s 1 percent of the budget.”

Obama said most of the federal budget is taken up by Medicare, Medicaid, defense and veterans funding. He said he’d like to keep taxes low on small and big businesses, but does not want to build debt doing it; referring to the tax cuts in 2001 and 2003 as the largest contributor to the nation’s debt.

“It’s not anything we did last year in emergency spending,” Obama said. “It’s not the auto bailout, it’s not the health care bill — that’s not what’s added to our deficit. The single biggest reason that we went from a surplus under Bill Clinton to a deficit of record levels when I walked into office had to do with these Bush tax cuts, because they weren’t paid for and we didn’t cut anything to match them up.”

Obama said that under his proposal to extend the Bush tax cuts for those making up to $250,000 a year, if someone made $300,000 annually, they would still have a tax cut for the first $250,000, and a slightly higher rate for the last $50,000.

“Ninety-eight percent of small businesses have a profit of less than $250,000 dollars,” contrary to the line many Republicans have used, Obama said.

Obama argued financial reform was necessary to ensure there would not be more taxpayer-funded bailouts, and that health care reform would help ordinary citizens while making the system more efficient overall.

Not all of the roughly 80 guests who listened to the president in the middle class neighborhood were happy with the way things were going, but Obama tried to reassure them, saying the country had come through tough times before.

Jeannette McKenzie asked Obama about the health care bill, and he tried to clear up some misconceptions, but she said afterward that she was still very nervous about it. She said she’d rather have seen reform be done little by little.

“We know we’re in trouble [with] health care,” McKenzie said. “It doesn’t have to all be done at once — that’s the scary thing.”

McKenzie said she thought there is too much government intervention in general, causing people to become dependent.

Despite her disagreement on health care reform, McKenzie said she was thrilled to be a part of the event.

There goes the neighborhood

Clubb and Hatfield-Clubb were taken by surprise last week when White House staff and Secret Service showed up and announced they were candidates for hosting the president during his visit to Des Moines, and by Thursday they knew their house had been selected.

Neighbors said Secret Service agents appearing at their homes Tuesday to let them know they would be surveying the property. A woman asked if they would like to see her backyard, to which the agent replied, “Ma’am, we already have.”

The president came to Iowa on Tuesday evening after a rally with an estimated 25,000 attendees in Madison, Wis., focused on youth and voting in the midterm election. The rally was broadcast live on the White House website.

Although a Des Moines Register poll released Tuesday found Obama’s approval numbers dropping in Iowa, a Pew Research Center survey released Monday found many more Americans think he is explaining his vision for the economy better than Republican leaders. Dolph Hatfield said his family was to have a family reunion next week but pushed it up to overlap the president’s visit.

Hatfield, a scientist at the National Cancer Institute in Washington, D.C., said he was proud of the health care reform. He said Obama has many achievements in his first two years, and the new book on the president’s foreign policy by Bob Woodward showcased his ability to seek “the very, very best advice.”

Despite his support, he believed the president is struggling to sell his message to voters who may feel disaffected in the midterms.

“I think he’s getting a bad rap right now because of the influence of the economy, which is understandable, but it overshadows many of his other accomplishments,” Hatfield said.

See more photos from the President’s visit to Iowa

Culver said he supported the tough decisions Obama made.

“[As guests] leave here they’ll have a better understanding of his game plan to move America forward,” Culver said. “Having that straight talk is very helpful.”

Culver said he would expect to see Obama back in Iowa in the final weeks before Nov. 2.

The president also reminded the crowd he is keeping his promise to responsibly end the wars in Afghanistan and Iraq, where he has drawn down 100,000 troops. When asked if ending the wars would provide a dividend to help with the deficit, he said in the long-term it would allow a better Pentagon budget, but the government would not skip on hangover costs in caring for veterans.

“[Veterans have] served us well; we’ve got to serve them well,” Obama said.

Part of the problem in tightening the Pentagon budget, Obama said, is that it meets political opposition because so many parts for the weapons programs are made in multiple congressional districts and states. But he said it was an area the country would “need to take a serious look at to get a handle on our long-term deficit.”

Obama also said the poverty rate is unacceptable, but he again tied it to improving education and health care reform to combat poverty.

Despite troubles in the United States, he said, it is still the wealthiest nation and the envy of the world. He said he is encouraged and believes it will recover as a better nation.

“We’ve got to make choices and decide what’s important,” Obama said. “And if we think our kids are important and the next generation is important, then we’ve got to act like it. We can’t pretend there are shortcuts, that we can cut our taxes, completely have all the benefits we want, and balance the budget and not make any tough choices.”