In response to a question about outsourcing, Obama takes the opportunity to lay out his jobs agenda in general. Most importantly, he's trying to tie financial reform to job creation:

"It's not that we're overly concerned aboout Wall Street or a bunch of CEOs," the President said. "It's that if we don't fix credit...then those businesses shrivel up and start laying people off."

Arguing that the U.S. economy has become too dependent on financial services while neglecting manufacturing, Obama argues his budget will put the "economy on more sound footing."

"We've got to go after the high-skill, high-wage jobs of the future," Obama urged.

Coming back around to the original question, about lowers expectations: "Not all of these jobs are going to come back," he answers. "And it probably wouldn't be good for our economy if all of these jobs came back." The solution, he says is to "create new jobs that can't be outsourced," citing the energy industry as particularly promising.