That's not quite true - I spent in Austria at least one year and have never heard anybody saying that. There are some politicians now, who are trying to suggest that Austrian German should be called Austrian – but any Austrian would tell you that yes, they speak German and yes, it is a dialect of German (by the way there are hundreds of different dialects of German used in Austria (and in Germany, of-course). But the point is that while it is not a big deal, if Bush would have uttered something like that media would have been all over him right away.

Mr Moron,
Having lived in Austria for more than 2 years, the language they speak is Deutsch (German). They are a very formal people, they believe in formality in ways we as American's would struggle with. A man who knows someone from grade school and may have known him 20 or more years would approach him and address him as MR. (whatever his job is) (Mr. Baker, Mr. Salesman, Mr. Farmer) this level of formality shows a great interest on what is proper, so to suggest they would throw that out the window for what the language is that they speak is lunacy. It is German, they know it they speak it and that is what they refer to it as.

As a native speaker of Swiss-German....I can tell you that the Austrian dialect of German is not the same as high-German. High-German is used in business and for formal occasions. Colloquial speach, as it is in Switzerland, is the local dialect. Obama was right - he did not flub this one.