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 The White House, Briefings, Speeches, Signings
Posted: Jan 26 2007, 04:00 PM

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For Immediate Release
Office of the Press Secretary
January 26, 2007

National African American History Month, 2007
A Proclamation by The President of the United States

African Americans have been an integral part of America for generations, and our Nation is stronger because of their contributions. During National African American History Month, we honor the achievements of African Americans and recognize our continued responsibility to strive for equality for all our citizens.

With grace and determination, African-American men and women have shaped our Nation and influenced American life. Frederick Douglass, W.E.B. DuBois, Rosa Parks, and Martin Luther King, Jr., advanced the cause of civil rights for all Americans and helped change the course of American history. Educators Booker T. Washington and Carter G. Woodson helped break down racial barriers in education to provide opportunity for all people. Americans have benefited from the achievements of scientists like George Washington Carver. Artists such as Pearl Bailey, Ella Fitzgerald, and Louis Armstrong inspired Americans and created some of the most celebrated music this Nation has ever produced.

The theme of this year's National African American History Month, "From Slavery to Freedom: Africans in the Americas," recalls African Americans' long journey to justice and commemorates the courage and persistence of the heroes who called on our Nation to live up to its founding promise. A century after African-American soldiers fought for their freedom on the battlefields of the Civil War, African Americans struggled peacefully for their rights in the streets of Birmingham, Alabama, and on the Mall in Washington, D.C. Courageous civil rights leaders answered hate and discrimination with love and dignity, toppled segregation laws, and worked to make America a more just and hopeful Nation.

All Americans can be proud of the progress we have made, yet the work for a more perfect union is not done. As we celebrate National African American History Month, we reaffirm our commitment to build a society where every individual has the opportunity to achieve the promise of this great land.

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim February 2007 as National African American History Month. I call upon public officials, educators, and all the people of the United States to observe this month with appropriate programs and activities that honor the significant contributions African Americans have made to our Nation.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-sixth day of January, in the year of our Lord two thousand seven, and of the Independence of the United States of America the two hundred and thirty-first.


Posted: Jan 26 2007, 04:01 PM

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For Immediate Release
Office of the Press Secretary
January 26, 2007

Executive Order: Further Amendment to Executive Order 13285, Relating to the President's Council on Service and Civic Participation

By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to extend the President's Council on Service and Civic Participation, it is hereby ordered that Executive Order 13285 of January 29, 2003, as amended, is further amended by revising section 4( to read as follows: "( Unless further extended by the President, this order shall expire on November 30, 2008."



January 26, 2007.

Posted: Jan 26 2007, 04:04 PM

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For Immediate Release
Office of the Press Secretary
January 26, 2007

President Bush Speaks to the House Republican Conference
Hyatt Regency Chesapeake Bay
Cambridge, Maryland

12:26 P.M. EST

THE PRESIDENT: I appreciate the warm applause, thank you very much. It's good to be with you again -- twice in one week, and I'm better off for it. Laura sends her very best to those of you who've run and won, and to your families. I want to say something about the families -- I know how hard it is to be in a political family, and I know the sacrifices that the spouse and children make. So on behalf of a grateful nation, I thank you for standing by your loved one as he or she serves a noble cause, and that is the cause of democracy here in the greatest country on the face of the earth, the United States. (Applause.)

I am glad to be among friends. I count a lot of you as personal friends. I particularly count the leadership as friends. I've gotten to know John Boehner and Roy Blunt over the past six years; I value their friendship, I look forward to working with them. And I know that the Republican Party is in good hands in the House of Representatives with these fine leaders.

I, of course, have known Kay a long time. She and I were blessed, like old Judge Carter, to be raised in Texas. For those of you from Texas, you know what I'm talking about, being blessed to be raised there -- for the rest of you, come on down and visit us sometime.

I've come to admire Adam Putnam. You call him Adam, I call him "Red." (Laughter.) But, nevertheless, he is a strong leader and good friend. I appreciate Tom Cole and Thaddeus McCotter, as well. These two gentlemen are new to the leadership, but I'm confident they'll be able to provide a lot of good direction to the caucus. And so I'm looking forward to working with you all, and I appreciate you taking on big responsibilities.

I want to spend a little time talking about the state of the union. I want to remind you that as a result of our philosophy, this economy of ours is strong. (Applause.) I said to the country the other night, we're a country with low inflation, low unemployment and increasing wages. We've got people working, and they're putting more money in their pocket. And one of the reasons this economy is strong is because we had the wisdom to cut the taxes on the working people. And we need to keep them low. (Applause.)

I'm looking forward to working with you on balancing the budget. Your old colleague Rob Portman, who is now the head of the OMB, will be submitting a budget that shows we can balance this budget within the next five years without raising taxes on the American people. (Applause.)

I want to work with you on earmarks. I know many of you are concerned about these spending items that just show up in bills that you didn't vote on and you didn't discuss. I want to work with you on entitlement reform. There's a lot of discussion about the budget, and there ought to be. There's focus on whether or not we can balance the budget in the short-term; but the truth of the matter is the bigger problem we've got is unfunded liabilities inherent in programs like Medicare and Social Security. And in my judgment, now is the time to fix this problem and now pass them on to future Congresses and future Presidents. (Applause.)

I know it sounds counterintuitive for a Texan to say that we're too dependent on oil -- but we are. And we need to do something about it. And the amazing thing is, we're on the verge of technological breakthrough that will enable us to power our cars in different ways, starting with ethanol derived from corn, and eventually, ethanol derived from wood chips, corn stalks, all kinds of stuff. It's called cellulosic ethanol, and I ask you to join me in continuing to spend taxpayers' money on research that will be necessary to develop new technology so we become less dependent on foreign sources of oil. (Applause.)

I want to work with you on health. I'm a big believer in No Child Left Behind. I think it needs to be reauthorized. I want to work with you on immigration reform, and I want to work with you on health care reform. These are big ideas, and it's going to require us working together to get the job done on behalf of the American people.

And I also appreciate your understanding that we're still a nation at war. You know, when I talked to the country the other night, I wish I could have reported differently. But it's not the truth, and it's not the reality. There's an enemy out there that would still like to strike us. And as I said, and I know most of you believe, the best way to defend this country is to stay on the offense and bring the enemy to justice before they hurt us again. (Applause.)

I talked about the progress, the advance that democracy was making around the Middle East. And then the fact that the enemy struck back, and they struck back against these young democracies, because they cannot stand the thought of freedom. You see, the best way to defeat totalitarianism in the long run is to offer a more hopeful ideology. And that's what we offer through the ideology based on human rights and human dignity, the central theme of which is, all people desire to be free. And it's in the interests of the United States to not only defend ourselves against the enemy in the short term, but it's in the interests of our children and grandchildren to spread freedom so that we can live in peace in the long term. (Applause.)

I've spent time talking about Iraq, and I'll talk with you a little bit later on. But my message to the American people was, I thought about all kinds of ideas about Iraq. And I told the American people I fully understand there are differences of opinion. But one of the things I have discovered is, in Washington, D.C. most people understand the consequences of failure. And if failure is not an option, then it's up to the President to come up with a plan that is more likely to succeed. And I spent a lot of time on the subject, because I understand how serious the issue is. And the plan I outlined to the American people is one that I believe can succeed.

Today I had the honor of welcoming David Petraeus to the Oval Office. He had just been confirmed by the United States Senate without one dissenting vote. (Applause.) And as I looked at that General, who is willing to go back into the war zone to represent our country, it reminded me, as the President, I must make sure he has everything he needs -- that he thinks he needs to succeed in the mission that we have sent him on. And I look forward to working with you to make sure that our generals and our troops that we put into harm's way have the support of the United States Congress.

I talked about the need to have a foreign policy that's more than just military, a foreign policy that's got active diplomacy, which we do all around the world. I mentioned in my speech that the United States does not stand alone. As a matter of fact, our troops are in Iraq based upon a United Nations mandate. We're working with the countries in the neighborhood to support this young democracy and making it clear the stakes of the ideological struggle we're in.

I talked about the fact that we've encouraged and worked with NATO to be an active participant in Afghanistan -- it's the first time that alliance has deployed outside of Europe in the history of its existence. I talked about the fact that we will never forget the importance of freedom, whether it be in our hemisphere, in Cuba, or in Burma, or in Belarus; and when we call a human tragedy "genocide," like in Darfur, we'll continue to rally the world to solve the problem. (Applause.)

I want to thank members of the Congress for supporting the HIV/AIDS initiative on the continent of Africa. It gave me great pleasure to tell the American citizens that because of your actions, because you acted, 50,000 people -- what was once 50,000 people receiving life-saving drugs has increased to 800,000 people in three short years. I firmly believe what I said: To whom much is given, much is required. A lot has been given to the United States, and it's in our interests to help people who suffer from disease and hunger. And I thank you for your support. And the next great initiative is to eliminate malaria in countries on the continent of Africa, and I ask you to join me.

I said, finally, introducing the people that were there, something I believe: I believe the state of this union is strong, and it's strong because the character and decency of the American people remain strong.

And so I'm looking forward to serving with you this year and next year. I thank you for your sacrifices. I have confidence in the future of this country, because we're a country full of such decent and courageous and loving people.

Thanks for having me. (Applause.)

Posted: Jan 29 2007, 05:20 PM

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MR. SNOW: All right. As all of you know, the President is going to be highlighting the strength of the economy over the next couple of days. First, there will be a visit to Peoria, Illinois. He'll visit the Caterpillar headquarters and speak to employees, highlighting, among other things, the benefits of global trade and the way in which free and fair trade have enabled companies like Caterpillar to prosper on the global market.

Then he'll head to New York, the world's leading financial center, and deliver a speech on the state of the economy. He will deliver the New York speech at Federal Hall, where I believe George Washington took the oath of office, and Alexander Hamilton held forth as Treasury Secretary. The President also -- double check on that one, as well -- the President last was there in October of 2001.

Over the last six years the American economy has had to endure a great deal: recession, September 11th terrorist attacks, the bursting of the technology bubble, devastating hurricanes that have crippled entire regions. We have had corporate scandals, we have had wars in Afghanistan and Iraq and a larger war on terror; we have had an oil shock. And, despite all that, the economy continues to thrive.

And the President is going to talk about how to make sure that we build a basis for future and further prosperity in an increasingly competitive global economic environment that includes giving our kids the intellectual and educational skills they're going to need to compete. It means that we are going to try to reduce reliance on foreign oil. It means that we are also going to try to create better, fairer, more efficient legal and health care systems; deal with our long-term entitlement programs -- that is something that inflicts other industrialized nations; continue to expand free and fair trade and keep taxes low; and allow small businesses to thrive. So that is what the President will be doing the next couple of days -- you are all invited.


Q The President said today that the United States would take firm action against Iran if military activities in Iraq threaten Americans. He doesn't seem persuaded that Iran's statement that it's going to become more military involved or in the economy of Iraq as a positive development.

MR. SNOW: Well, again, we'll wait and see whether it's a positive development or not. You're talking about statements to the effect that the Iranians are thinking about opening a series of banks within Iraq, and that they have also offered to do military cooperation.

What we've said is to the extent that anybody -- including Iranians -- are smuggling weapons, bringing in fighters, killing Americans, trying to destabilize the democracy in Iraq, we will take appropriate measures to defend our troops and also to defend the mission.

But the Iranians understand that there's a burden of proof for them, and so it's an interesting statement. As I told you before, we don't have much more on it, and we don't have a lot of detail on it. But the Iraqi government is sovereign and it certainly can make arrangements with its neighbors. And I daresay it's not going to make arrangements that are going to be detrimental to its security or its prosperity.

Q Is that something that the President might talk to the Prime Minister about, to find out where that's going or --

MR. SNOW: Well, I'm sure that there are ongoing conversations. The Prime Minister talks regularly with the ambassador and other officials in Baghdad. I honestly don't know where they stand in terms of those conversations. But they may discuss it.

Q Do you take it at face value that they're trying to help their economy and want to cooperate --

MR. SNOW: Well, we'll just have to see. You don't take -- it's a statement, let's see what actions follow.

Q Tony, if I could follow, just on balance, does the Bush administration see Iran's activities inside of Iraq as more of a positive than a negative?

MR. SNOW: Right now what we are seeing is some evidence that the Iranians have been involved in activities that have led to the deaths of American soldiers and also the deaths of innocent Iraqi civilians -- and to the extent that that kind of activity continues, we will respond appropriately.

What you're asking us to do is to respond to something that hasn't happened. There is a statement of intent and we'll see how they follow through on it. We would certainly welcome Iran to start playing a constructive role in the region. And among other things, they could stop smuggling arms -- or at least contributing arms. They could stop contributing to terrorist organizations. They could stop supporting Hezbollah. They could, in fact, encourage people within the Middle East to promote peaceful negotiations with Israel on a two-state solution. There are a whole series of positive things they can do.

On a separate but equally important track, they could accept the offer that the United States and other nations have made to give them peaceful civil nuclear power in exchange for their renouncing any programs, verifiably, that could lead to the creation of nuclear weapons. And we have certainly extended our hand, in terms of much warmer, more constructive relations should they do so.

Q So it's fair to say the Bush administration still considers Iran's role largely negative inside of Iraq?

MR. SNOW: Again, what we have seen -- I'm going to twist it in a different direction. We would love to see them start playing a positive role.

Q Have you seen anything positive, Tony? I mean, why would you believe this might be a positive role?

MR. SNOW: We don't believe, we just -- as I just said, Martha, let's see what the actions are. You've characterized accurately the situation, which is, we have a statement. Let's see what happens in terms of actions, and then we will assess them.

Q The President is going to talk about trade tomorrow. Does he need -- would he like to have fast-track authority to negotiate trade deals?

MR. SNOW: Absolutely. What he wants to do is to continue to have Trade Promotion Authority; every other President has had it. It is the ability to negotiate a good faith trade agreement without their later being changed by Congress, which means you have to go back to the table and kind of renegotiate. It is an important device in extending free trade and also allowing negotiators to operate effectively. President Clinton used it to positive effect during his presidency, as have prior presidents, and we certainly think it is important that Congress renew it.

Q Will he talk about that tomorrow?

MR. SNOW: I don't know if he's talking about it tomorrow or Thursday, but he will be talking about it -- I mean, tomorrow or Wednesday, but he will talk about it this week.


Q What did the President think of the march on Washington?

MR. SNOW: I don't think he really thought a lot about it. It's nice to see Jane Fonda in front of the camera again. There are a number of people who were here making statements, and that's perfectly appropriate. This is a vigorous democracy.

Q You said something earlier this morning, though. Would you like to repeat that?

MR. SNOW: It's simply that there were predictions of a larger audience than showed up for the protest.

Q And you really counted heads?

MR. SNOW: No. Did you? Did you see 100,000?

Q Don't you think we had a good turnout?

MR. SNOW: Honestly, I didn't go there, Helen, so I'm not going to characterize.

Q How do you make a statement like that?

MR. SNOW: Well, because it's pretty clear from the press accounts that nobody attached six figures to the number who appeared.

Q Tony, the President touched briefly in that NPR interview about the actions Sunday in Najaf. What is the feeling inside the White House about what happened over the weekend, these raids, and the prospects for moving forward?

MR. SNOW: Well, what the President also said is we're getting briefed up on them and he had not been fully briefed. So it's a little -- I'm afraid I'm not in a position to comment specifically on it.

But let's talk generally about the kind of action we've been seeing of late within Iraq, which is Iraqi and U.S. forces standing up against those who are trying to commit acts of violence -- at least according to press accounts, and that's all I can go on now, Bret. They were talking about an operation, actually, on Shia and Sunni together, who were trying to commit acts of violence that would disrupt Shia religious observances, much as we saw last year with the bombing of the Golden Mosque in Samarra.

We have seen the kind of impact that sort of action could have, in terms of inflaming sectarian violence. And it is important to go after those who try to commit such acts of violence. So it is certainly the kind of thing we expect to see more of, in terms of U.S. and Iraqi forces in joint operations going after these acts of violence. It also means that somebody had to provide information that was necessary for carrying out the operation.

Ultimately, the Iraqis are going to have to find a way to provide for their own security, and they are going to need to be able to conduct these kind of operations. They will need the intelligence capabilities, they will need the logistical capabilities. They clearly will need the arms and training to do it in a professional manner. So I know it's a very general answer to the question because even now the kinds of reporting we're getting are fluctuating, in terms of casualty counts and exactly where it was and so on, so I don't want to be too specific because, frankly, we don't have the specifics yet.

Q Follow on a different track -- politics. Senator Clinton in Iowa talking about the war said, "The President has said that this war is going to be left to his successor. He's said that on more than one occasion. I really resent that. This was his decision to go to war." And she described it as "the height of irresponsibility."

MR. SNOW: All right, well, expect a lot of "can you top this" rhetoric early on, on the campaign trail. But let's talk about the merits of the case, as well. Senator Clinton voted to authorize action in Iraq. And Senator Clinton, in many cases, has stood with the President, including providing funding for our forces there. The real question here is, the United States Senate that voted 81 to nothing -- I think that was the vote -- for General Petraeus, now it ought to go ahead and supply what he needs in terms of reinforcements and resources for finishing the job in Iraq.

But, more importantly, you've got ask yourself, what do you really want. If you want American forces out of Iraq, probably the best way to do that is to support the President and support the combatant commanders in doing what they say they need. We have seen already, in the wake of the President's announcing a new way forward, a shift in the way people are behaving in Iraq. We have seen -- apparently some terror groups are making their ways out of Baghdad. You've seen a direct change in the public stance of Muqtada al Sadr. You have also seen very good signs of determination on the part of Prime Minister Maliki, not only in terms of public statements, but also in terms of operations that have been aimed at Shia and Sunni organizations that seem to be working to undermine the government.

And it's important to realize that every time the United States shows strength and determination in operations like this, it makes a difference. After the United States Army went into -- or the U.S. military actually went to Baghdad in three-and-a-half weeks, you saw that Mommar Ghadafi made a calculation about what he thought was in his nation's best interest and decided to stop being part of the problem with terror and started to cooperating with the United States. And you saw in the wake of that a number of nations in the region extending the franchise. You saw the Lebanese putting together the Cedar Revolution.

And as the President also pointed out, last year in the wake of those successes, terrorists decided to fight back. It is important to realize that withdrawal from Iraq without success means that the President would be handing his successor failure. And failure could have dire consequences.

The other thing is when the President talks about handing things to the next President, he's not merely talking about Iraq, he's talking about a larger war on terror. And the point he has also made -- tried to make is that he understands right now that there's enormous political controversy. But he also understands that, like it or not, the terrorists are simply not going to lay down their hatred on January 20, 2009, just as they did not lay down their hatreds when George W. Bush took the oath of office, and they had already been in the stages of planning for September 11th.

This is a long war, based on deep and profound hatred of the United States and its way of life, and a determination to kill us, people who spend their time scheming to find ways of killing us. And the President wants to make sure that the next Commander-in-Chief of the United States will have access to intelligence that can save American lives; will have access to law enforcement tools that will allow people in the United States to go ahead and break up cells before they can act; will have access to the kind of military, diplomatic and economic levers that are going to force nations to make a choice about whether they're going to support us or be against us in the war on terror.

All of those things are essential. And his view is not one of simply trying to confine his field of vision to Iraq, but to say, he will do everything in his power to make it possible for the next President to succeed in a war on terror that surely will continue, even if everybody is home from Iraq, when the next President takes the oath of office.


Q Can you repeat that? (Laughter.)

MR. SNOW: Let me try. (Laughter.)

Q I want to ask you about the mixed messages that NPR pointed out during an interview with the President -- that the Vice President has been quoted as saying there's a lot of success in Iraq; the President has said there's not been enough success in Iraq, and that he doesn't approve of what's going on, either. How do you explain this disconnect and the kind of --

MR. SNOW: I see it less a disconnect as two different ways of looking at it. When you talk to combatant commanders, they make the point that every time there's a military engagement, such as the one that Bret was talking about, the other side doesn't win. On the other hand, what we have seen is a change in the situation on the ground, particularly with regard to sectarian violence, and also some strengthening -- although the locals have been fighting back against it in Anbar province. So what the President sees is the situation of violence in Baghdad and he says this is unacceptable -- and the Vice President agrees.

But the Vice President, I think, was also trying to make the statement that American forces, contrary to popular opinion, aren't just sitting ducks. They have, in fact, been engaged in military operations, and when there is direct conflict, they're successful. And it is important now to create the ability for the most important success of all, which is training up and creating capability within the Iraqi forces so that, sooner rather than later, they can assume full control for their security.

Q But when the President says that his Vice President is a glass half full kind of guy, might that be more charitable than others would allow, and they might think, no, when the Vice President talks about things going so swimmingly, that he's out of touch with what's going on?

MR. SNOW: You mean others are more critical of the Vice President than the President may be?

Q Yes.

MR. SNOW: Well, the Vice President does have a lot of critics.

Q Well, right, but the point is that, whether these are Republican critics or Democratic critics, the idea to -- when the President says he's a glass half full kind of guy, he's not being a little bit charitable, I guess?

MR. SNOW: No, I don't think so. Again, I think there are two ways you look at it. You can take a look at what happens -- it's important -- everybody says, we support the troops, and everybody praises the troops. Well, then acknowledge what they do. And when they do have conflicts in the field, they do succeed.

But the question now is building that capability among the Iraqis and also change in the way we do business in Baghdad proper, so that once you clean out a neighborhood you can keep it cleaned out, you can bring in jobs, you can build a foundation for real and permanent success. That's not something that was being done before and, frankly, the prior efforts didn't work. And so those of -- I think that's what the President and the Vice President are both talking about.

Q But to follow this, are the President and the Vice President -- can we characterize them as being on the same page with their read on Iraq?

MR. SNOW: Yes.

Q And the Vice President's comments reflect the administration's thinking?

MR. SNOW: Both the President and the Vice President -- again, you can take a look at this in two ways, Jim. If you take a look in terms of specific military engagements, you can point to successes. For instance, you take a look at what's been going on in Anbar, you can take a look at operations recently in Diala, you can take a look at what's been going on down south with attempts to create acts of violence or to commit acts of violence against Shia worshipers -- those would all count as "successes."

But on the other hand, there's also been, over the last year, the new phenomenon of sectarian violence that was not addressed effectively, and I think the President and the Vice President both agree that it was not addressed effectively and we need to find better ways of doing it.

Q Tony, why a separate state of the economy speech? Isn't that something typically in the State of the Union speech?

MR. SNOW: Yes, but it wasn't in the State of the Union speech; hence a state of the economy speech.

Q Why? Why the decision to shift it off separately?

MR. SNOW: Well, let's see. the State of the Union speech, as it was, took sort of the normal hour, once you put everything together, and we wanted a State of the Union address that could be focused on key issues and bold initiatives. And you know what? It is worth reminding people of how good this economy is.

We are starting to see signs of it, in terms of people's general confidence in the economy and certainly consumer behavior. But you look at polls a lot of times and people think, well, it's going great for me, but maybe it's not going great for everybody else. The fact is that the American economy, having absorbed the kind of body blows that lesser economies would not have been able to survive, has continued to thrive.

And the last thing we can do -- you know, American workers have done this -- there haven't been any special acts of heroism, people have just gone to work and they've worked hard and they've saved and they've said, okay, I'm going to do what I need for a home addition, or I'm going to save up some money and buy something for my kid, I'll buy more this year for Christmas -- whatever the case may be. People have worked hard to pursue the kind of goals to make life better for themselves and their families. And that has made our economy stronger. And the last thing we need to do to these workers who have put the U.S. economy on their back, through all of these various challenges, is now to say, do you know what, job well done, we're now going to cut your pay in the form of a tax increase.

So what the President is really arguing for is, let's go ahead, let's make permanent the tax increases that have enabled people to have more cash in hand to pump back into the economy, to create conditions of economic growth, and let's make life more rewarding, literally, for the people who are working hard in this country, including small businesses.

Q He's not downgrading that by taking it out of the State of the Union speech?

MR. SNOW: No. No. I don't think -- as a matter of fact, this offers a chance to highlight it, don't you think? I mean, it's a separate speech.

Q Is he also, in a sense, trying to prod the Democrats into acting on this issue? Is this a message really directed to the Hill?

MR. SNOW: If you take a look -- any time a President gives a speech about politics, Sheryl, there are multiple audiences -- certainly Capitol Hill, but also the American public. For instance, in the State of the Union address, a health care plan that really does offer the possibilities of revolutionary change in the health care system that will make it user friendly, which a lot people complain that it is not today. He is talking about taking a new look at the way we go ahead and pursue energy innovation, so we cut our dependence on foreign oil, but at the same time we make the environment cleaner and we create new economic opportunity, rather than throwing people out of work.

Q Does he really expect Democrats to partner with him on those two issues, and to make his tax cuts permanent?

MR. SNOW: Well, we're going to find out. The Democrats, as I've noted many times, said that they wanted to come to Washington, they wanted to work with the President, they wanted to get things done. And I think the President has proposed things that make sense. People understand it. They understand that what he is talking about addresses some of their basic concerns about education, about the environment, about energy, about health care, about immigration, and people want to see action on those. And I think there are enough people of good will on both sides of the aisle that we may, in fact, be able to get things done.

Q Tony, talking about people want to see action on things, you also brought into the issue of the economy the disaster of Hurricane Katrina. You have Mark Morial, the head of the National Urban League, calling for a summit, and you have people like Bruce Gordon still very upset. What can the White House do to help in this lowest (inaudible), particularly as it's concerned with New Orleans, because there seems to be a disparity between the other (inaudible) in the state.

MR. SNOW: Well, as the papers in Louisiana have pointed out, that's really a question to point toward officials in Louisiana, because whereas -- the federal government has made more than $100 billion available for hurricane relief, and it has made billions of dollars available for housing. In the state of Mississippi, thousands of people have received checks, and they've been able to proceed with the business of rebuilding their homes and their lives. My understanding is that in New Orleans, that number is still less than 300, even though they've already spent more than $100 million in administrative costs. So it is an important question -- we will do everything we can to work with local officials, in terms of trying to increase the speed.

But right now, the federal government has made the money available, and we will do whatever those officials think they need in terms of assistance to finish their part of the job.

Q Tony, apparently it's not necessarily about money, it's about when do you say when, and not just work with, but help guide them, push them to move in --

MR. SNOW: Well, I think they're getting pushed a lot by their constituents right now.


Q Tony, so the main issue tomorrow in Peoria is trade; is that right?

MR. SNOW: Yes.

Q There seemed to be some movement on this over the weekend, on the issue of world trade talks. What do you see -- what's your assessment for a world trade agreement at this point?

MR. SNOW: Sue Schwab and her counterpoint -- counterpart with the EU have been working very hard, and they've also been reaching out to the G20 nations. It's a very complex set of negotiations going forward. Also it's, I think, realized that it is going to be in the best interest of all to have success in the Doha round.

I cannot and would not get into details at this point. We are at a very important point of the negotiations. We've got a small window to get a lot of things done. And I know all sides are working very hard on this. But the President is deeply committed to working with all our allies. And they've assured us that they're committed also in working with us toward resolution.

Q And will he address this tomorrow?

MR. SNOW: He's not going to talk in detail about it, but what he will do is once again point to the importance of free trade. You see, not only do we have free trade within the global structure of the Doha round, but also the United States is engaged in a series of free trade agreements that also have yielded real benefits for American businesses and workers.

Q On another issue there, he's going to the Caterpillar plant, and that company was among those last week -- you know, called for the mandatory emissions controls. Do you think that issue will come up?

MR. SNOW: I don't know. We'll have to see. I certainly expect it to come up in reporter questions. But I don't know. Certainly, we're aware of the concern. And, frankly, what we do share is the belief that it is important to figure out every possible way to reduce carbon emissions and at the same time create conditions for continuing a strong economic growth.

There has been in the past -- and I think environmentalists realize this -- the creation of a kind of environmentalism that said the only way that we can clean the environment is to throw people out of work, shut down the factory, impose killer regulations -- in point of fact, there are real markets for making the economy cleaner. We have seen auto companies advertising the fact that their cars are cleaner than others and so on. It's something that Americans want and desire, so there are real market forces in favor of a cleaner environment. And, certainly, we'll continue working with any and all companies to do whatever we can.


Q Tony, this morning in a preview of the economic speech, you mentioned robust growth of India and China. And you said the President was going to lay out why it was important to stay number one.

MR. SNOW: No, what -- I was -- he is not. What I was saying, I was talking in general terms. So that was my characterizing the fact that we've got a very competitive global environment. And in this environment, it is important to make sure that our workers have the education they need, the training -- because you need to have the intellectual capacity to change jobs and change careers a number of times. It happens now with amazing swiftness. Companies themselves change. They change names. They have new logos. They change their missions.

We have an economy that has far more sweeping rapid irregular change than previous generations -- than the previous generations of Americans have had to deal with. It creates a sense of excitement, but also there is a challenge to make sure that you've got the conditions to allow companies to innovate and flourish, and also the ability to make sure that workers have the training and education necessary to compete in that kind of an environment.

Q So he's not going to cast this, then, as a global competition?

MR. SNOW: No, no, no, no.


Q Thank you. Tony, Saudi Arabia is offering to try and broker peace between Hamas and Fatah as violence continues in Gaza. Does the President support such an effort?

MR. SNOW: Let me put it this way, what we would like to see is a Palestinian partner that is willing to talk about peace with the Israelis. We saw a suicide bombing today in Eilat. It is important to have a negotiating partner that renounces violence, acknowledges Israel's right to exist and will abide by all prior agreements made by previous Palestinian administrations with the Israelis. What we're interested in is a reliable partner for peace.

Go ahead.

Q Thank you, Tony. Two questions. To the President's knowledge, has the United States Senate ever before voted to confirm appointment of a combat commanding general, like General Petraeus, and then voted to condemn the mission that he will lead in what would be an astounding hypocrisy?

MR. SNOW: Well, I am not -- I don't think that the people who are discussing resolutions would characterize them in that manner, and nothing has been passed yet.

Q No, of course not, because they're engaged in the hypocrisy. But isn't it hypocrisy?

MR. SNOW: Well, thank you -- thank you for the editorial comment. Let's go to question number two.

Q The Hill newspaper on Capitol Hill reports that Jane Fonda's fellow anti-war protesters were allowed to spray paint on part of the west front steps of the U.S. Capitol building on Saturday after U.S. Capitol Police were ordered by Chief Phillip Morse to fall back, after which 300 protestors spray painted, "Our Capitol building and you can't stop us."

And my question, does the executive branch believe the legislative branch should have allowed this treatment of the Capitol building of the United States?

MR. SNOW: Well, Les, what you're doing is -- I would encourage you, or all others interested, to call the Capitol Police and find out how this came to pass. I just -- I can't answer it.

Q Yes, one wonders what does the President -- he must have an opinion of this? Doesn't he? (Laughter.)

MR. SNOW: Go ahead.

Q How closely is the President following the Libby trial?

MR. SNOW: Not that closely really. I know there's this perception that we're all sitting around buzzing about it, but we really aren't.

Q Well, I mean, you've got Rove and Bartlett both subpoenaed, and you've got the Vice President testifying. I would think there would be some interest in the White House.

MR. SNOW: Yes, but it's just -- look, it is what it is, it's an ongoing trial, and we're not going to comment on it further.

Q What is the President's response to seeing the White House portrayed as being at war with itself?

MR. SNOW: Well, again, as I said, as tempting as it is to jump into that, we're not commenting.

Q Are you glad you were not press secretary then? (Laughter.)

MR. SNOW: I am glad I'm press secretary now.

Q North Korea insists they would never, ever return to the six-party talks unless BDA matter is resolved. Is there any precondition (inaudible) on North Korea?

MR. SNOW: I'm not going to get into talks, but we've made it clear the North Koreans need to return to the talks without precondition, and then we can move forward.


Q Considering the size of the potential crowds of candidates who are already going to Iowa and New Hampshire, has the President been asked to authorize Secret Service protection for any of the announced candidates yet? And will the budget that comes out next week provide for what may be an unusually large number of candidates?

MR. SNOW: I know the answer to neither. We will get them for you. Obviously, on the budget stuff, you're going to have to wait until we release the budget. I will find out and we will attach an asterisk if we do have an answer.

Q Is the President concerned that Israel may have used U.S. cluster bombs in South Lebanon, according to preliminary findings of the State Department?

MR. SNOW: What we're doing is -- I would encourage you to call the State Department about that. That's in their bailiwick, and they'll have a better answer for you.

Paula. You know, I noted you earlier you were in the second row. Now you're way back. I miss you. Come closer.

Q Same type of question, either way. (Laughter.)

MR. SNOW: In that case, go back. (Laughter.)

Q In terms of health care --

MR. SNOW: Go ahead.

Q In case of -- now you've got me speechless. The administration approach to health care, it's been argued that if you really wanted to reach low and middle class families you should have taken a refundable health care tax credit approach.

MR. SNOW: What we've done is we've tried to put together two pieces that together we think offer the opportunity to get private health care in everybody's hands. Number one, you create a health care deduction that allows everybody to have cash in hand that are going to require insurance companies suddenly to compete for their business, and say, let me give you what you want, rather than now, where we stand in lines once a year at open enrollment and we take what they'll give us.

It is really a sea change in the way that market is going to operate. It's going to make it more user friendly. And based on the experience that we've seen with the prescription drug benefit, where there's been vigorous competition to make people happy, we can expect an improvement not only in the quality of the product, but also lower prices.

On the other hand, we do understand that there are some people who, even under this system, are not going to be able to afford health care, and therefore we are working with states to put together programs that are going to allow those states to make private insurance available to all. So I know there are two different ways of cutting the issue. There are a series of -- there are varied series of pluses and minuses to either.

We think this is a strong way to do two things. Number one, create a responsive health care market. Immediately it's going to lower costs for 100 million Americans -- that's a good thing. But also, in addition to providing private health care for the poor, it's also going to give them an opportunity to enter an entirely different kind of health care system, one that's going to be, by design, more user friendly.

Q Also, on health care and climate change, a growing number of states and localities are actually approaching the health care issue by trying to establish universal health care coverage, and also putting their own caps on greenhouse gas emissions, because they apparently feel the federal government isn't setting a high enough bar on either of those.

MR. SNOW: We believe in federalism. On the other hand, we also believe in competition. States are certainly free to try out whatever they can. We think private markets are going to work better than a single payer plan, because, again, a single player plan forces consumers to do whatever government offers them, as opposed to saying to consumers, here is your money, have people go out and compete for the right to get your dollars. That makes the -- that gives the companies a far more profound incentive to reform the system in a way that's going to make it a happier experience for us all.

Q Thank you.

Posted: Jan 30 2007, 06:36 PM

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For Immediate Release
Office of the Press Secretary
January 30, 2007

Press Gaggle by Tony Fratto and Al Hubbard
Aboard Air Force One
En Route Peoria, Illinois

Tony Fratto, Deputy Press Secretary
Al Hubbard, Assistant to the President for Economic Policy and Director, National Economic Council

9:46 A.M. EST

MR. FRATTO: Hi guys. We have the President's National Economic Advisor, Al Hubbard, here with us today. I'm going to run through a few things. Let me just tell you a little bit about the President's day. He had his normal briefings this morning. On the airplane with us is Congressman Ray LaHood. We'll be visiting his district today, in Peoria.

Something that wasn't on the schedule that went out -- I think you may have it -- but our first stop is going to be a visit with business leaders, breakfast meeting with business leaders in Peoria. It will be an opportunity for the President to spend some time talking to some of the local business leaders in the community and getting their sense of how the economy and the region is going there. And then of course we go the Caterpillar plant for a tour, and the President will make remarks to Caterpillar employees, and then we'll head back.

I'm going to ask Al Hubbard to give us a rundown of some of the themes the President will be discussing today, and maybe tomorrow, and then we can come back to questions after.

DIRECTOR HUBBARD: Thanks, Tony. Obviously, he'll be highlighting how strong this economy is, how truly remarkable it is, given the challenges that we've faced over the last six years, starting with 9/11, and then the recession, and Katrina, and the war in Iraq. And despite that, this economy continues to expand and be very strong, unemployment at 4.5 percent. We've created over 7 million jobs since 2003, and there's nothing to suggest that we won't continue to have a strong and prosperous economy.

The President is going to be talking about what needs to be done to ensure that we continue our growth. Obviously, keeping the taxes low and making his tax cuts permanent are extremely important to that; continuing to support free trade policies. Caterpillar is a great example of how the American worker can compete with anyone on a level playing field. Caterpillar is enormously successful -- over half the products they manufacture are actually exported.

And every time we have a new free trade agreement with a country like Chile or Australia, the sales of Caterpillar dramatically improve. That's why the President is committed to continuing to expand our trade agreements and support the Doha Round and the Doha agreement.

He'll also be talking about the major initiatives that he discussed in his State of the Union -- health care reform, which is so important to America, to American businesses, most importantly to all Americans. The cost of health care has been growing at an unsustainable pace. It is too expensive. And the President has some, as you all know, very important reforms that would have a major impact on accessibility of health care, affordability of health care, especially for the uninsured.

One little detail that I think I'd like to make clear about our health care proposal: It helps every single working American, even those who don't pay federal income taxes, because everyone would get the opportunity to deduct on their payroll taxes, as well as their income taxes. So for someone buying individual insurance who does not pay federal income taxes, they would get an $1,125 tax credit, or a reduction in their payroll taxes if they bought single coverage. They'd get at $2,250 deduction if they bought family coverage. And that's for people who do not pay federal income taxes, because the President's proposal allows individuals who purchase health insurance to get the same deductions as people who get their health insurance from their employers.

He's also going to be talking about the importance of energy, and reducing our dependence on foreign sources of energy, and his commitment to reducing our dependence on gasoline by 20 percent within the next 10 years, which is very ambitious, but we believe that the ingenuity and the commitment of the American people will make that happen.

He will continue to talk about the importance of education, and he'll talk about that today at Caterpillar, because there's no question the inequality between the skilled and unskilled, in terms of compensation, has been growing over the last 25 years. The most important determinant of one's wages is one's education, and that's why the President is committed to No Child Left Behind, which is working. He's committed to having it, what do you call it in Congress, reauthorized, because what's important is that we dramatically increase the number of high school graduates who are prepared for college, and we do that by improving our K through 12 education system. And that's what the President is committed to.

Q Is the CEO of Caterpillar going to be there today?


Q He's been -- he was part of that industry group that came out for carbon caps a week or two ago. Why is the administration not following the lead of industry on the issue of addressing carbon dioxide emissions?

DIRECTOR HUBBARD: Well, I think the President has talked about the importance of global warming and climate, and the policies that he's promoted, in terms of alternative fuel, will have a dramatic impact on CO2 emissions. And within 10 years, assuming we meet our goals, we will stop the growth of CO2 emissions from automobiles.

Q You talked about energy independence, and part of that being ethanol. And the President is also going to talk about free trade today. What's the rationale for imposing a tariff on imported ethanol? And why would the administration not lift that, if those are two things that the President aspires to?

DIRECTOR HUBBARD: Well, as you know, ethanol receives a -- my numbers may not be perfect here -- $0.51 per gallon subsidy, and I think there's a $0.54 per gallon import duty, and those offset one another. So there's a reason behind the import duty, and the President's position is, that's in law right now, and we see no reason to change that.

Q No reason to change the import tax on ethanol?

DIRECTOR HUBBARD: It's set to expire in 2009, and at that point in time we think it's appropriate for Congress to revisit that.

Q Can you talk about how this speech will differ from tomorrow's speech?

DIRECTOR HUBBARD: Well, he's going to be using talking points today, and tomorrow really it's a formal state of the economy, where he's going to talk about where the economy is, the condition of the economy, what's made us successful, and most importantly, what's important to ensure that we continue to be successful.

Q Are new initiatives going to be unveiled today, and/or tomorrow?

DIRECTOR HUBBARD: I'll leave that up to the President.

Q Are you encouraged or discouraged by the latest talks about restarting the Doha Round of trade talks? Is the President going to mention that today?

DIRECTOR HUBBARD: Listen, the President mentions that every chance he gets, just like he mentions entitlements every chance he gets, because those are two initiatives that are so important to him, because he thinks they are so important to the country. We are -- feel more optimistic. We made a very, very bold proposal in October of '05, and we continue to -- Susan Schwab representing the U.S. -- continues to lean forward to work with our trading partners to work for an agreement. We are waiting for them to meet us halfway, or not even halfway. And hopefully that's a signal that the Europeans are going to be more aggressive, like we are, in terms of negotiating the Doha Round.

Q Is the President going to call for a renewal of fast track authority today?

DIRECTOR HUBBARD: We'll leave that up to him.

Q What if Congress doesn't renew fast track?

DIRECTOR HUBBARD: Again, TPA, we all know, is extremely important -- TPA meaning Trade Promotion Authority, the fast track -- is very important to passing any trade bill. And so that's been critical during this administration, and it will be critical to future administrations.

Q What's your take on the minimum wage situation on Congress? Are the tax break coupling -- is that a deal breaker if that doesn't happen?

DIRECTOR HUBBARD: We think it's important -- raising the minimum wage will cost some jobs, and we think it's important to counter that with tax breaks that will replace those jobs, so it will have a no-net impact on the number of jobs in America. And what's most important to the American worker is opportunity for work.

Q Is there any negotiating room?

DIRECTOR HUBBARD: Congress is working on it. I'm confident Congress will make sure that -- and the Republicans will make certain that there are appropriate tax breaks in the bill.

Q What sort of changes in the labor provisions are you guys seeking in the already negotiated trade agreements with Peru and those countries?

DIRECTOR HUBBARD: I don't know the details, so I can't --

Q It's been mentioned in press reports that Henry Paulson is going to take on a high profile role in the Doha negotiations. Is that true?

DIRECTOR HUBBARD: Susan Schwab will continue to be our leader in the negotiations. At the same time, everyone in this administration is involved, committed, and trying to help Susan and reinforcing her positions with the foreign leaders with whom they meet. And Hank has been enormously helpful. Condi Rice is being enormously helpful -- obviously, Secretary Johanns, Secretary Gutierrez. So it's important that this is a team effort, but we're being led by Susan Schwab, and we'll continue to be led by Susan Schwab.

MR. FRATTO: Thank you.

Posted: Jan 30 2007, 06:38 PM

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President Bush Discusses Economy
Caterpillar, Inc.
East Peoria, Illinois

In Focus: Jobs & Economy
In Focus: Economy

11:52 A.M. CST

THE PRESIDENT: Thank you all. Thanks for letting me come by. Please be seated. Thanks for the warm welcome. It's good to be in the heartland of America. Thanks for coming to let me visit with you a little bit about our economy. I really want to thank the good folks at Caterpillar for letting me come by. I like it when they say, Team Caterpillar. That's a good sign. It means people are working together for the common good. (Applause.)

You know, people from Texas like to say, things are better in Texas. Well, when you tour the Cat plant here, it's -- having second thoughts about if things are better in Texas. (Laughter and applause.) I'm impressed by the machinery I have seen. More importantly, I'm impressed by the workers I have met who are putting the machines together. (Applause.) And I'm impressed by a culture of excellence and accomplishment that is the spirit of Caterpillar. I also appreciate the chance to drive a D10. If you've never driven a D10 -- (laughter) -- it's a cool experience. (Laughter.)

I'm going to go to New York City tomorrow to deliver a speech on the state of the economy, but I really want to spend a little time here in Peoria to see how things are going. I was at the Sterling Brothers -- Sterling Family Restaurant today -- Sterling Brothers? -- Sterling Family, yes, run by two brothers -- and met with some small business owners, social entrepreneurs, as well as business entrepreneurs. I wasn't surprised by what I heard. It reminded me about the greatness of America. I heard about people willing to work hard to achieve dreams, and people realizing that when they achieve dreams they have an obligation to help others. It seems like to me the community spirit here in Peoria, Illinois is strong.

And that's the way our economy is, as well. It's a strong economy. And the fundamental question is, what are we going to do to keep it strong? It's one thing to say today's economy is strong -- I say it because inflation is down, interest rates are down, wages are on the increase, unemployment rate nationally is low, people are working and putting more money in their pocket. And the question facing the country is, what are we going to do to make sure it's strong tomorrow? As I said to Congress, we don't need more government, we need more enterprise. And so I want to spend a little time talking with you today, talking about the economy.

Before I do, I want to thank Congressman Ray LaHood. He's been bugging me ever since I got elected President -- (applause) -- I didn't tell you what he's bugging me about. He's bugging me to come to Peoria. He said, when are you going to show up? I kept saying, as soon as possible. The moment has finally arrived, and I'm glad I came. Thank you for the invitation.

I appreciate Jim Owens, the Chairman and CEO of Caterpillar. I thank Bob Williams for helping me with the tour. I thank Gerry Shaheen, who is the group president of Caterpillar. I want to thank the workers I met with today. I spent some time with people on the line, talking about the education programs here at this fine company. I thank the leaders of the UAW who welcomed me here. I thank the folks up and down the line who put up with me and all the cameras. I just don't travel alone these days, in case you've noticed. (Laughter.)

I want to thank Mayor Jim Ardis, Mayor of Peoria, Illinois. I met him at the airport. It was about -10. (Laughter.) I said, do you want to get in the limousine? He said, as fast as possible. (Laughter.) So we drove over to the Sterling Family Restaurant together. I was impressed by your young mayor. I want to thank the local and state officials who joined us. I appreciate you serving. I appreciate you doing what you think is right for the community that you represent. But most of all, thanks for letting me come.

People say, why would you want to go to Peoria, and I just told you -- I want to get out of Washington and sit down with folks that are really the backbone of this country. And I wanted to come to one of America's great companies, and that's Caterpillar. (Applause.)

The good folks here show others that in the manufacturing world, we can compete. And that's really what America -- what Americans wonder, can you compete in a global economy? And my answer is, darn right you can, with good policy. And in this company, you've shown how to compete. I want to spend some time explaining that to the American people why competition is important, and why America can compete with anybody, anytime, anywhere, and why it's in our interest to do so.

First of all, it's important for people to know that Caterpillar employs 48,000 workers across America. Secondly, more than half those workers are here in Illinois, 17,000 of them right here in Peoria. Caterpillar has great workers because it has got good training programs. Caterpillar can employ new people because it makes good product that people want.

I appreciate very much the notion that you all are in this deal together. That's what "team" means, that everybody works together for the common good, and if it benefits one, it benefits all. And that's the spirit I have found here. And our job in government is not to get in your way. Our job in government is to put pro-growth economic policies in place that mean companies like Caterpillar, which do the right things, can succeed. And let me talk some of what that means.

First it means keeping taxes low. Oh, there's a debate in Washington that says we need more taxes. We don't need more taxes. It's important for you to keep your own money. You work hard for your money and I -- (Applause.) I understand workers are saying, am I going to have more money in my pocket? That's what we want. And one way to make sure you don't have more money in your pocket is for the government to raise your taxes.

And so we cut taxes. Listen, we've been through a tough economic period in this country. You remember it -- right after the -- we headed into a recession in early 2001, then the terrorists attacked us. And the question was, could we recover? And I worked with Congress to cut taxes before the terrorist attack and after the terrorist attack. And I believe one reason why the recession we went through was one of the shallowest in American history is because we cut the taxes. See, when you have more money in your pocket to spend or save and invest, the economy benefits, as far as I'm concerned. And so one of the challenges we face is making sure that we keep the taxes low.

We cut the taxes on everybody who paid taxes. We increased the child tax credit. Look, if you've got a child, we want to help you. We reduced the marriage penalty. I didn't like a tax code that penalizes marriage. I thought we ought to be encouraging marriage, not penalizing marriage in our society. (Applause.) We cut taxes on capital gains and dividends, cut the taxes on small businesses.

Now, all those tax cuts affected the performance of Caterpillar. You see, the tax cuts help your workers have more money in their pocket. I happen to believe that if the workers have got more money in their pocket, they're going to be a more satisfied worker. I know it sounds not very sophisticated to say that, but I suspect it's true. If you got a safe workplace, a workplace where people are working together, you're a better satisfied worker if you're keeping more of what you earn. And that's what the tax cuts have helped provide.

We helped small businesses with expensing provisions. That's an accounting term that says if you buy new equipment you get a tax benefit for buying new equipment. That helps people in Caterpillar, because it encourages small businesses to use your products. It also helps make sure the small business sector remain vital. Seventy percent of new jobs in America are created by small businesses, and if you're interested in coming out of a recession, and interested in people working, it makes sense to provide tax incentives to help the small business owner in America. And that's what we did.

Capital gains and dividend tax cuts benefit people who invest in your company. One of the things -- reasons this company is strong is you're able to attract capital. People say, I like what the workers are doing, I like the product that's being put together, we want to invest, we want to work alongside of the good people here in Caterpillar. And the tax incentives that we provided by cutting capital gains and dividends encouraged that kind of investment.

We extended the research and development tax credit. One reason why Caterpillar is a modern, competitive company is because you're always investigating new methodologies, you're investing in research. And therefore, in the tax code, we tried to encourage research and development. And so the tax cuts have worked. And I hope you don't fall prey to people in Washington saying, we need more of your money in order to balance the budget. I don't think so.

I think what we need to do is to set priorities like you set priorities with your money, and make sure we focus on that which is necessary to do. And the most important priority we have is to defend this homeland from attack. (Applause.) And we better make sure that when we have a man or woman in our uniform in harm's way, they get all the equipment, all the support they need to defend the United States here in the 21st century. (Applause.)

I have an obligation to submit a budget. It's one thing to stand up here and say we don't need to increase your taxes, we can set priorities and balance the budget; so next Tuesday, I'm going to do just that. I'm going to submit a budget for Congress to look at that shows how we can balance the budget in five years and keep your taxes low.

I want to talk a little bit about trade. Trade is an important subject here at Caterpillar, and the reason why is because a lot of the product you make here, you sell to somebody else, sell overseas to another country. That's trade. And yet it's -- it's a topic of hot debate. The temptation is to say, well, trade may not be worth it, let's isolate ourselves. Let's protect ourselves. I think it would be -- I know it would be a mistake for Caterpillar workers to do that. I think it would be -- I know it's a bad mistake for the country to lose our confidence and not compete.

Let me give you some interesting statistics. First of all, we're the largest exporter in the world. Last year we exported a record $1.4 trillion worth of goods and services. Now, in order to export something, somebody has to make it. In other words, when I talk about numbers, behind the numbers is people who are providing the service and/or making the product. So the more one exports, the more likely it is people are going to be working.

Exports account for about 11 percent of our economy. One in six manufacturing jobs in the United States depends on manufacturing exports. We also benefit when people invest here. There are people who have good-paying jobs as a result of somebody saying, I want to invest in the United States. And so when I'm talking about opening markets, I'm making sure that not only is our markets open, but somebody else's market is opened. And we expect people to treat us just the way we treat them. All we ask for is be fair with the American people.

We've got free trade agreements. That's how you make sure that we're treated fairly. Our market is open, and we want their market open. We got -- these free trade agreements really represent only a small fraction of the GDP. In other words, they're not necessarily with significant economies, and yet they account for 42 percent of American exports.

One way to look at trade is this: We're 5 percent of the people in the world; that means 95 percent live outside of America, and shouldn't we try to put ourselves in a position where we can sell goods and services to those 95 percent? I think it makes sense to do so.

We've pursued trade agreements. The way it works is, you have bilateral trade agreements, in other words, with the United States and, say, Chile. And we have regional trade agreements and world trade agreements. One world trade agreement is called the Doha Round of the WTO -- it's basically attempting to make sure that everybody gets treated the same way, in the same fashion, so that the world markets are open.

Again, I repeat to you, I strongly believe that if we can compete with people on a level playing field, nobody can compete with us. And so the key is to make sure the rules are fair. We had bilateral agreement with three countries when I first became President; they're now up to 13, and we've got three more in the mill.

Let me talk to you about Caterpillar. Half the products you make in America are exported. It's an interesting statistic, isn't it? You walk by one of these things, it's sold right here in the United States, but the other one right here is sold overseas. Cat sells more than 300 products in foreign markets. It's not just the D10 I drove that gets sold overseas, there's 299 other products manufactured by this company, by American workers, that are sold overseas.

Free trade agreements are helping. We did a free trade agreement with Chile. Chile has become Caterpillar's fifth largest export market since that free trade agreement. In other words, because we lowered trade barriers, and said, you treat us the way we treat you, it has enabled this company to sell more product than ever before, which means people are working, when you have to make the product.

The free trade agreement completed with Australia took effect in 2005. Caterpillar exports to Australia have grown by 26 percent. In other words, opening markets benefits people who produce goods that people want. And people want Caterpillar product. Why? Because they work. They generally don't break down, the master craftsmanship is great, and there's a demand for them.

Opening China's market -- I understand trade with China is considered controversial. I know that. But I want to tell you something, if you're a Caterpillar worker or a Caterpillar shareholder, what that has meant; it meant that Caterpillar exports to China have increased by 40 percent since the market was opened. That's helped to create more than 5,000 new jobs right here in America.

We're going to continue to negotiate free trade agreements. And by that I mean we just want people to treat us fairly. I'm confident in our ability to sell American product and services overseas if the playing field is level.

A little bit on health care. You've got a good health care plan here, thanks to Caterpillar employees. A lot of small businesses don't. The cost of health care is on the rise; you know it. Some things we can do to make the health care system better is to make sure that customers, the patients, are more in charge of their lives and their plans. I'm worried about frivolous lawsuits that are running up the cost of health care. You know that there's about 1,500 counties in America where the OB/GYN has left because of frivolous lawsuits, and when somebody gets sued all the time, they practice more medicine than is necessary and it runs up your cost.

Health care needs to have new information technologies. I met some people on the floor that are running some pretty sophisticated computer ware, and we need information technology in health care. The old system of carrying handwritten files is not efficient, runs up the cost of medicine for you, and leads to errors. Most doctors can't write very well to begin with. (Laughter.) It's hard to read their writing.

We need to change the tax code in a fair way that treats everybody fairly. In other words, I've got a plan I'm going to spend a little more time with in New York tomorrow. I want to talk about energy tomorrow in New York. I'll give you the summary here. Dependency on oil puts us in a position that -- where terrorists can harm our economy. When you're dependent on a product, and you import that product, if somebody were to inflict damage on a energy infrastructure, it could cause the price of your energy to go up. Or if you're dependent upon product from a hostile regime, it means you're in a position of vulnerability.

And so I'm going to work with the Congress to spend some of your money on technologies that would change the way we live. One of the interesting things that's happening is that there's some new battery research taking place. And I believe within relatively short order Americans will be able to drive the first 20 miles, and eventually 40 miles, on a new battery. And you can imagine, particularly in the big cities, if people are using electricity to drive their car -- and by the way, the car is not going to look like a golf cart. (Laughter.) Not exactly looking like one of these things, but nevertheless, it will be normal size, something you actually want to use. But you can imagine how this battery technology can change our dependence on oil, because if we reduce the use of gasoline, you reduce your use of oil. And if most of your oil is coming from overseas, you're reducing your dependency upon oil from overseas.

I'm a big believer in ethanol. You've got a lot of farmers around here who -- (applause.) Fifteen years ago, or 20 years ago, if people stood up here and said a lot of people would be using a corn product to drive their cars, they'd have said, man, what -- the guy has kind of lost it, hasn't he? But it's happening. We're up to about -- I think it's 6 billion or 7 billion gallons of ethanol per year now.

We're going to run into a constraint pretty soon, though. It turns out corn is needed for more than just ethanol. You got to feed your cows and feed your hogs. And that's why we're spending some of your money on what's called cellulosic ethanol research so we can use wood chips or other agricultural wastes to make ethanol, to power our automobiles.

I believe we can reduce our consumption of gasoline by 20 percent over the next 10 years, in order to be able to meet a goal of becoming less dependent on oil. And it's coming. These are new eras and it's exciting times. (Applause.)

This is a global issue, obviously. It's an issue -- for example, when demand for oil goes up in a place like India or China, it affects the price that you pay at the pump. And therefore, it makes sense for us to help these developing countries with new technologies that will not only make them less dependent on hydrocarbons, but better stewards of the environment.

And so I appreciate what Caterpillar has done. They're involved with what -- we set up what's called the Asia Pacific Partnership on Clean Development and Climate. I don't know if you know this, but you've sold more than $50 million worth of equipment to a large coal mine in China to help capture methane gas and turn that into energy. In other words, you're not only making Cats, you're making interesting product that will enable us to be better stewards of the environment. And I thank you for that.

And my only point to you is, is that in order for us to be competitive, in order for us to remain the economic leader of the world, we're going to have to promote new technologies that make us less dependent on oil. And it's coming. These are exciting times. I'm very optimistic about meeting the future, because of new technologies.

I do want to say one thing about education. I really appreciate the worker program, the education program for the workers here. I think Cat spends about $900 a worker to help make sure our workers have the skills necessary to be competitive in the 21st century. But good education starts early. And we need to make sure our public schools, particularly in the early grades, get it right.

There's a piece of law I signed that I'm very proud of called the No Child Left Behind Act. The spirit says we're going to raise standards. If you have low standards, you get lousy results. I used to call it the soft bigotry of low expectations. If you don't believe a kid can learn, guess what's going to happen -- he's not going to learn. And so inherent in the No Child Left Behind Act says there is a role for the federal government. After all, we're spending a fair amount of money, and we ought to expect good results for that money.

So we said, in return for federal money we expect you, the local districts, to set high standards and to measure. I've heard every excuse for not measuring: you're teaching the test, you're testing too much. How can you solve a problem unless you measure? And what we need to do is figure out who can read or write early, and have extra money to help those who can't read or write. (Applause.)

We have an achievement gap in America that we better do something about if we're going to be competitive. And by that, I mean when you put out the test scores, the minority students test below white students. And that's not good enough. And we'd better make sure all our children can read early, not just a handful. And therefore, I like the idea of holding people accountable. And we say, we'll measure as a diagnostic tool to correct problems early. And at some point in time, if schools refuse to change, there needs to be a consequence. There needs to be accountability. This isn't anti-teacher, this is pro-teacher. And it's pro-parent, and equally importantly, it's pro-child. (Applause.)

And Congress needs to reauthorize this bill. It's working. The achievement gap is closing. How do I know? Because we're measuring. We can measure success in schools. It's in our interest as a country to make sure every child gets a good education, and it's important to start early.

Oh, I'm sure you've heard about all the reading debates, what works and what doesn't. Well, you're able to determine what works or what doesn't by measuring. And a measurement system says to a school, we appreciate your hard work, thanks for being in the classroom, but you might think about changing your curriculum since you're not meeting standards.

And then what this country needs to do is to recognize that we need to help poor students go to college. That's why we're expanding and increasing Pell Grants. And then what this country needs to do is understand the importance of community colleges and support community colleges, to help older workers gain new skills necessary to fill the jobs of the 21st century.

In order to compete, we got to have an education system that makes sure all children from all walks of life have skills necessary to fill the jobs of the 21st century; we got to be confident and open up markets so that our companies that produce products, goods and services that people want are able to sell them overseas; we got to have a tax code that keeps taxes low on the people who are working for a living; we got to have a health care system that is patient-centered, not government-centered; and we got to make sure that we don't lose our confidence. And if you really knew America like I'm able to see it, which is to see the compassion and the decency and the courage and the strength of the people, you'd share the same confidence I have about the future of this country.

I'm honored to be with you. (Applause.) Thanks for letting me come to the heartland of the United States. God bless. (Applause.)

Posted: Jan 31 2007, 03:37 PM

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For Immediate Release
Office of the Press Secretary
January 31, 2007

President Bush Delivers State of the Economy Report
Federal Hall
New York, New York

In Focus: Jobs and Economy
Fact Sheet: State of the Economy Overview

11:12 A.M. EST

THE PRESIDENT: Thanks for coming. Please be seated. Thanks for being here. I'm pleased to be back in Federal Hall. You know, I drove in, and there stood George Washington. I like to call him George W. (Laughter.) It's nice to be back here.

Last week, I delivered my State of the Union. This morning, I've come to deliver a State of the Economy speech -- and there's no better place to do it than in America's financial capital. More than two centuries ago, Alexander Hamilton led the U.S. Treasury Department from this building. Today, New York City is headquarters of global corporations, it's a center for capital markets, it's the home of three of the world's greatest stock exchanges. You have a Mayor whose name is a fixture on trading floors across the world. And until I took him to Washington, you had Hank Paulson -- who, by the way, is doing a fabulous job.

As we begin this New Year, America's businesses and entrepreneurs are creating new jobs every day. Workers are making more money -- their paychecks are going further. Consumers are confident, investors are optimistic. Just today, we learned that America's economy grew at an annual rate of 3.5 percent in the fourth quarter of 2006. That means our economy grew at 3.4 percent last year, which is up from 3.1 percent in 2005. Ladies and gentlemen: The state of our economy is strong. (Applause.) And with the hard work of the American people and the right policies in Washington, we're going to make it even stronger.

Mr. Mayor, thanks for being here. I appreciate you coming. You're doing what people want you to do, and that is to lead this city.

I appreciate Bill Rudin -- thanks for having me, Bill. Good to see you again. I want to thank members of the Congress who have joined us -- Pete King, Vito Fossella, Carolyn Maloney, and Tom Reynolds. Thanks for flying down with me today. Do you want a ride back? (Laughter.)

Mr. Mayor -- David Dinkins, thank you for being here. Proud you're here. And it's good to see my buddy, Mayor Ed Koch. Mr. Mayor, thank you for coming. Appreciate you being here. (Applause.)

I thank the members of the Association of a Better New York who have joined us. I appreciate all the state and local officials who are here.

Bill mentioned that I was here in October 2001. I recognized then our economy had been hit hard and there was great uncertainty about the future. It was a tough time for the country. Many people were out of work. By mid-December, nearly a million jobs had been lost. The collapse of the Twin Towers had left dangerous cracks in this building's foundations.

I said that day that I was optimistic that our economy would recover from these attacks. But if I'd have told you that we would also make the recession one of the shortest on record, that we'd have confronted corporate scandals, absorb a tripling in the price of oil, fight a global war, and help a whole region of our country recover from a hurricane, you might have been a little skeptical.

Yet America's economy has overcome all these things. Federal Hall has been fully restored. It's on solid ground. And so is the New York City economy -- as the Mayor mentioned, it's booming -- with a bond rating at an all-time high, and unemployment near an all-time low. Across our nation, small businesses and entrepreneurs are creating millions of new jobs. Retail sales are up, consumer spending is strong, exports of goods and services have jumped by nearly 35 percent. The Dow Jones has set new records 26 times in the last four months. Productivity is strong, and that's translating into higher wages.

When people across the world look at America's economy what they see is low inflation, low unemployment, and the fastest growth of any major industrialized nation. The entrepreneurial spirit is alive and well in the United States. There is one undisputed leader in the world in terms of economy, and that's the United States of America. (Applause.)

On Wall Street, you know that America's economic leadership rests on strong and flexible capital markets. Capital markets connect entrepreneurs with the investment they need to turn their ideas into new businesses. America's capital markets are the deepest, the broadest, and the most efficient in the world. Yet excessive litigation and over-regulation threaten to make our financial markets less attractive to investors, especially in the face of rising competition from capital markets abroad. To keep America's economic leadership, America must be the best place in the world to invest capital and to do business.

One important step we've taken in Washington is to pass litigation reform like the Class Action Fairness Act. It's important for people in Congress to understand that excessive lawsuits will make it hard for America to remain the economic leader that we want to be. Another important step we've taken is to strengthen our business institutions by passing the Sarbanes-Oxley Act in 2002. This law helped boost investor confidence by establishing high standards for transparency and corporate governance. The principles of Sarbanes-Oxley are as important today as when they were passed. Yet complying with certain aspects of the law, such as Section 404, has been costly for businesses and may be discouraging companies from listing on our stock exchanges.

We don't need to change the law. We need to change the way the law is implemented. America needs a regulatory environment that promotes high standards of integrity in our capital markets, and encourages growth and innovation. And I'm pleased of the progress that Hank Paulson and Chairman Chris Cox are making to make sure the regulatory burden is not oppressive, and fair, and helps us meet a great national objective to keep the United States the economic leader in the world.

Our economic leadership also depends on sensible, pro-growth tax policies. To help bring our economy out of a recession and recover from September the 11th, we cut taxes on the American people. We cut taxes on everybody who pays income taxes. We doubled the child tax credit. We reduced the marriage penalty. We cut taxes on small businesses. And we cut taxes on dividends and capital gains.

There's a lot of political debate about these tax cuts. But here are some of the facts: Since we enacted major tax relief into law in 2003, our economy has created nearly 7.2 million new jobs. Our economy has expanded by more than 13 percent. That expansion is roughly the size of the entire Canadian economy. This economic growth has led to record tax revenues, which has helped us cut the deficit in half three years ahead of schedule. One fact should be clear when you look at the statistics: The fastest way to kill a recovery would be to raise taxes on the people who created it. Now is not the time for the federal government to be raising taxes on the American people. (Applause.)

We must ensure that the money you send to Washington is spent wisely. Next Monday, I'm going to submit to Congress a budget that will eliminate the deficit by 2012. In order to do so, we need to set priorities in Washington. You can't try to be all things to all people when it comes to spending your money if you want to keep taxes low, keep the economy growing, and balance the budget. And my number one priority is to protect this country. And we're going to make sure our troops have all the equipment they need to do the job we've sent them to do -- (applause) -- and make sure our citizens have what it takes to defend this homeland.

That means we've got to be careful about how we spend money in other areas. One thing we can do to show the American people that we're going to be smart about how we spend their money is to do something about earmarks -- it's that system of appropriations where things end up being spent even though nobody has voted on them. And I'm going to work with Congress to reduce the amount of earmarks and the number of dollars spent by earmarks in a significant way to earn the trust of the taxpayers of this country, and at the same time, be wise about how we spend their money.

I believe I need a line-item veto to help Congress spend money wisely. And so I put forth a plan that says the legislative branch and the executive branch will work together to eliminate wasteful and unnecessary spending.

We're about to pass a farm bill that provides a strong safety net, while tightening spending and cutting subsidies. We can manage this short-term deficit -- and I look forward to working with Congress to do so. But it's important for Congress to understand there are unfunded liabilities inherent in Social Security and Medicare that we need to do something about now.

And I understand it's tough work that requires political will from both the President and the Congress to come together and solve this problem. I'm hopeful that we can set aside needless politics and address the issues with entitlements in a constructive way. That way people will say, they came to Washington and they did the job we expect them to do.

Our growing economy is also a changing economy. The rise of new technologies, new competition, and new markets abroad is bringing changes -- and these changes are coming faster than ever. There was a time when most people expected they'd keep a job for life. Now the average American has 10 jobs before the age of 40. It used to be that a company's name would stay the same for decades. New companies are now -- now companies are merging and splitting, and creating new names and new stock symbols. Some of us can still remember when cell phones were the size of bricks and considered a luxury. Now they fit in your pocket, they take photos, they play music, and every teenager in America has one, it seems like.

By and large, our dynamic and innovative economy has helped Americans live better and more comfortable lives. Yet the same dynamism that is driving economic growth is also -- can be unsettling for people. For many Americans, change means having to find a new job, or to deal with a new boss after a merger, or to go back to school to learn new skills for a new career. And the question for America is whether we treat the changes in our economy as opportunity to help improve people's lives, or as an excuse to retreat into protectionism.

I believe that the changes present us with historic opportunities -- America's growing economy allows us to approach them from a position of strength. And so today, I'm going to discuss actions we should take to make America's economy more flexible and dynamic in four areas -- trade, health, energy and education.

First, we can make our economy more flexible and dynamic by expanding trade. America has about 5 percent of the world's population. That means 95 percent of our potential customers are abroad. Every time we break down barriers to trade and investment, we open up new markets for our businesses and our farmers. As we improve free trade, consumers get lower prices. There are better American jobs. You see increased productivity. Jobs supported by exports of goods pay wages that are 13 to 18 percent higher than the average. So one of our top priorities has been to remove obstacles to trade everywhere we can.

When I took office, America had free trade agreements with three countries. We have free trade agreements in force now with 13 countries -- and we have more on the way. These agreements are leading to direct benefits for America's businesses and, equally importantly, America's workers. Yesterday, I went to the Caterpillar plant in Peoria, Illinois

-- that's where they make big bulldozers. The folks there told me that Caterpillar now exports more than one-half of the products they make. They see immediate results when we have broken down barriers to trade. Within two years of implementing our free trade agreement with Chile, Caterpillar's exports to that country have nearly doubled. The opening of this and other export markets has led Cat to add thousands of new jobs here in America.

Manufacturers, farmers, and service providers all across our country have similar stories. So we need to continue to level the playing field for our goods and services. I strongly believe this: When people around the world have a choice, they choose goods that say "Made in the USA."

In this global economy, new competition means that American businesses must constantly approve [sic]*. Global competition can also lead to hardships for our workers and their families. Government has a responsibility to help displaced workers find new jobs, or even a new career. So my administration has reformed job training programs and expanded Trade Adjustment Assistance to help more displaced workers learn the new skills they need to succeed. I'm going to work with Congress to reauthorize and to improve the Trade Adjustment Assistance this year, so we can help Americans take advantage of this growing, dynamic economy.

At this moment, the most promising opportunity to expand free and fair trade is by concluding the Doha Round at the World Trade Organization. Global trade talks like Doha have the potential to lower trade barriers all around the world. They come around only once every decade or so. Successful trade talks will have an enormous impact on people around the world. Since World War II, the opening of global trade and investment has resulted in income gains of about $9,000 a year for the average American household.

The Doha Round is a chance to level the playing field for our goods and services -- in other words, so we can be treated fairly in foreign markets -- but it also is a great opportunity to lift millions of people out of poverty around the world. And so we're going to work hard to complete it. We are dedicated to making sure we have a successful Doha Round.

The only way America can complete Doha and make headway on other trade agreements is to extent Trade Promotion Authority. This authority allows the President to negotiate complicated trade deals for our country, and then send them to Congress for an up or down vote on the whole agreement. Presidents of both parties have considered this authority essential to completing good trade agreements. Our trading partners consider it essential for our success at the negotiating table. The authority is set to expire on July 1st -- and I ask Congress to renew it. I know there's going to be a vigorous debate on trade, and bashing trade can make for good sound bites on the evening news. But walling off America from world trade would be a disaster for our economy. Congress needs to reject protectionism, and to keep this economy open to the tremendous opportunities that the world has to offer.

Second, we can make our economy more flexible and dynamic by reforming our health care system. Across the country, business owners tell me that the cost of health care is their biggest problem, and it's becoming harder to provide coverage for their workers. American workers and their families also find that the health care system is rigid and confusing. They end up with medical bills that are impossible to understand, and spend hours filling out complicated insurance forms. They feel locked into jobs because they're worried about losing the health insurance if they leave their job. They have no way to measure the quality of their doctors and hospitals. They see good doctors being driven out of practice because of frivolous lawsuits. All this leads to higher medical costs, and higher insurance premiums for businesses and their families.

Listen, federal government has an important role to play when it comes to health care, and that is to help the poor and the disabled and the elderly. And we're keeping those obligations. But for all other Americans, I believe that private health insurance is the best way for them to meet their needs. Many Americans cannot afford private health insurance. So we're taking steps to make it more affordable and to give patients more choices and more control over their health care decisions.

We created health savings accounts, which put patients in charge of their medical decisions and helps reduce the cost of their coverage. And I ask Congress to strengthen health savings accounts. We need to pass Association Health Plans, so that small businesses can insure their workers by pooling risk at the same discount that big companies are able to get.

We're using information technology. Listen, we're a giant consumer of health care at the federal level. And we're insisting upon new technologies to make health care more efficient, and thereby reducing costs inherent in an inefficient system, and reducing medical errors. We believe that the health care industry needs to post price and quality, so as consumers have more choice, they're able to make better decisions about the health care they get. We understand that a non-transparent system where somebody else pays the bills is likely to cause costs to continue to rise. Congress needs to pass medical liability reform. If you're interested in available and affordable health care, we should not have a legal system that's running good doctors out of practice and running up the cost of your medicine. (Applause.)

And one of the most promising ways to make private health insurance more affordable is to reform the tax code. Under current law, workers who get health insurance from their companies get a tax benefit. If you buy insurance on your own, you do not get the tax benefit. The tax code is not fair. So in my State of the Union address I proposed to end this unfair bias in the tax code by creating a standard deduction for every American who has health insurance, no matter where you get it from.

This deduction would also apply to payroll taxes, so those who do not pay income taxes would still get a benefit. With this reform, more than 100 million men, women, and children who are now covered by employer-provided insurance will benefit from lower tax bills. Those who now purchase health insurance on their own would save money on their taxes. Millions of others who have now no health insurance at all would find basic private coverage within their reach.

As well, we need to do more to help the states and localities deal with the uninsured. I think the most innovative programs are developed at the state level. And I think it's in our interest to support states that make basic private health insurance available to all their citizens to have help from the federal government, to help them with the poor, to help them with the uninsured. So we're asking Congress to join us in setting up "affordable choices" grants to make sure that the poor and the sick have private health insurance available to them, as well.

All these steps will bring America closer to a health care system where patients are in charge of their medical decisions. In a reformed system, there will be a vibrant individual market, in which health insurance companies actually compete for your business. When you leave your job for a better opportunity elsewhere, you will be able to take your health care plan with you. If people change jobs 10 times before they're 40, we need a health care system that is flexible and consumer-oriented. Health care providers will have an incentive to improve their service. Your medical records would fit on a CD, so you would not have to fill out multiple forms every time you visit your doctor. In the end, you would have a more flexible health care system that responds to your needs, and at the same time helps us keep our economy flexible and dynamic.

Third, we can make our economy more flexible and dynamic by diversifying our energy supply. Energy is vital to businesses and farmers and families all across our nation. Yet, we have a fundamental problem: We're too dependent on oil. That creates vulnerabilities. When demand for oil goes up in China or India, it affects the price of gasoline here in America. If a terrorist were to attack oil infrastructure, it affects the supply of energy here in America.

Dependency on oil means we're not being as good a steward of the environment as we should be. The way to overcome these challenges is through innovation and technology. I believe it is a good use of your money to spend at the federal level on new technologies to make us less dependent on oil -- and that's exactly what we've done. We're spending money on cellulosic ethanol -- that's a fancy word for saying some day we're going to be able to convert switch grass into energy that powers your cars. We're spending money on biodiesel fuels. We're spending money on advanced batteries, so some day you'll be able to plug in your automobile and drive the first 40 miles on electricity, and your car is not going to look like a golfcart. We're spending money on solar and wind energy, and clean coal and nuclear power.

Since 2001, my administration, working with Congress, has invested up to more than $10 billion to develop cleaner energy alternatives. And this federal funding has helped America's scientists and engineers make tremendous progress toward a goal of becoming less dependent on oil. As well, the private sector is responding. You know it better than I do, but a lot of people are seeing interesting opportunities available in alternative energies. And private money is flowing into these new alternatives.

So we're on the threshold of dramatic technological breakthroughs. And now the challenge is to move the technologies from research lab into the marketplace. In my State of the Union I set an ambitious goal of reducing gasoline usage in the United States by 20 percent over the next 10 years. If you want to become less dependent on oil, the quickest way to do so is to use less gasoline. Meeting this goal will require significant changes in supply and demand. On the demand side, we have got to reform our economy -- fuel economy standards, that will reduce the amount of gasoline that cars and SUVs consume. And on the supply side, I have proposed a new mandatory fuel standard that is nearly a fivefold increase over the current target for renewable and alternative fuels.

We'll leave it to the market to decide the mix of fuels that most effectively and efficiently meet this goal. But that goal can be achieved, and that's why I put it out there. It's a necessary goal for our national security and economic security. It's an important goal to deal with the issue of climate change. Imagine what these technologies will mean for somebody living in New York -- the fuel in your car is going to come from a cornfield in Iowa, or perhaps switch grass out of Texas. Hybrid electric taxicabs will be running on new generation lithium ion batteries. The financial pages will be filled with new stock symbols for dynamic American companies in the growing field of alternative fuels.

This day is coming, but it's not going to happen overnight. If you want to be less dependent on foreign oil, we ought to be drilling for oil and gas in environmentally friendly ways here in the United States. And if you're concerned about a terrorist attack which could disrupt oil supplies, it makes sense for Congress to double the Strategic Petroleum Reserve.

So I hope Congress moves forward on these initiatives, and I'm looking forward to working with them. The idea is to diversify our energy supply, keep our air clean and help create new jobs through new industries that will meet the demand for alternative sources of energy.

Fourth, we can make our economy more flexible and dynamic by strengthening public education. A strong and vibrant education system is vital to maintaining America's competitive edge in the world. A strong and vibrant education system will ensure that every citizen can share in this nation's prosperity.

I know some of our citizens worry about the fact that our dynamic economy is leaving working people behind. We have an obligation to help ensure that every citizen shares in this country's future. The fact is that income inequality is real; it's been rising for more than 25 years. The reason is clear: We have an economy that increasingly rewards education, and skills because of that education. One recent study of male earnings showed that someone with a college degree earns about 72 percent more than someone with a high school diploma. The earnings gap is now twice as wide as it was in 1980 -- and it continues to grow. And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down. The key to rising in this economy is skills -- and the government's job is to make sure we have an education system that delivers them.

And that's why I think one of the most important economic initiatives of my presidency has been the No Child Left Behind Act. The philosophy behind No Child Left Behind says: We're going to spend federal money, but we expect you, at the local level to deliver results. In other words, we've insisted upon accountability. I understand some people don't like accountability, but how can you make sure if our kids are getting the foundation for the skills necessary to compete in the 21st century unless you measure? And when you measure and find failure, correct problems early before it's too late.

The No Child Left Behind Act is working. There's an achievement gap in America that's not fair and it's not right, and it's beginning to close. You know how I know? Because we're measuring. This good law is working, and the Congress needs to reauthorize it. (Applause.)

The agenda to strengthen education and make America more competitive extends beyond the primary grades. And that's why I proposed -- and I'm working with the Congress to pass -- the American Competitiveness Initiative. That means we're going to improve math and science education in the middle schools and high schools. You can't compete in the 21st century unless we're educating young engineers and physicists and chemists -- unless our kids have the skills necessary to fill the jobs of the 21st century.

I also believe it's a vital role for the federal government to spend money on basic scientific research. So I've called upon Congress to double the funding for basic scientific research at the National Institute of Standards and Technology labs, or the Department of Energy's Office of Science, or the National Science Foundation. In other words, there's things we can do in Washington to put good policies in place to make sure that we stay on the cutting edge of change, and at the same time, educate our kids so they can take advantage of the world we're in.

I believe -- and I appreciate Congress's expanding Pell Grants. It's a strong initiative I support. Pell Grants are a good way to help our poor students go to college. And I'm a big believer in the community college system here in America. Community colleges work. They're available and they're affordable, and they have the capacity to change curriculum to meet the needs of the local work force. And it makes sense for the federal government to support community colleges -- for this reason: It doesn't take much additional education to gain a new skill set so you can find jobs in this 21st century.

Let me give you an example. I went to Anne Arundel Community College in Maryland and I met Jeannetta Smith. She used to work in the textile industry. She left to study nursing. She recognized that in nursing she could make a better living for her family and herself. And so she went to a community college and she got some low-interest loans to help her, and she became a registered nurse. With a little bit of extra education and some help, she went to the community college and she's now making three times what she did in her old job. Education enables one to gain new skills necessary to fill the jobs that are coming in the 21st century. She said about her new career, "It's been very, very good. The opportunities are boundless." And that's what we want people saying in America: I have got the skill set to be able to say, the opportunities are boundless.

America's businesses have responsibilities here in America. I know you know that. A free and vibrant economy depends on public trust. Shareholders should know what executive compensation packages look like. I appreciate the fact that the SEC has issued new rules to ensure that there is transparency when it comes to executive pay packages. The print ought to be big and understandable. When people analyze their investment, they ought to see loud and clear -- they ought to be able to see with certainty the nature of the compensation packages for the people entrusted to run the companies in which they've got an investment.

Government should not decide the compensation for America's corporate executives, but the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders. America's corporate boardrooms must step up to their responsibilities. You need to pay attention to the executive compensation packages that you approve. You need to show the world that American businesses are a model of transparency and good corporate governance.

One New Yorker who understands corporate responsibility is a fellow named John Duffy. John Duffy grew up in the Bronx. He became CEO of a Manhattan investment and research firm called Keefe, Bruyette and Woods. On September the 11th, KBW had its offices in the South Tower of the World Trade Center. That day the firm lost 67 people, including John's 23-year-old son. Many thought KBW was finished. But not John Duffy. He moved his company to temporary offices. He paid out $40 million to the families of the employees the firm lost. He set up a charitable trust to help them with medical bills and college expenses. And he rebuilt his business. Last year, KBW went public, and now the firm has twice as many employees as it did on September the 11th.

I want the people to listen to what John Duffy said: "If that day was our final day, it would have meant that the bad guys had won. Our way to fight back was to keep going." It says something about John Duffy that the terrorist attacks only made him more determined to succeed. It says something about New York that there are countless stories like KBW's, of hardworking men and women who picked themselves up and rebuilt bigger and better than before. It says something about America that we continue to produce citizens who come back from adversity and create new opportunity for themselves and for others.

And this is the true strength of our economy. That's what makes us the economic leader of the world. And that's why I'm confident that we can remain that economic leader, because we're a nation of dreamers and doers and believers -- God-fearing, decent, honorable people. And I'm proud to be the President of such a nation. God bless. (Applause.)

Posted: Jan 31 2007, 03:39 PM

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For Immediate Release
Office of the Press Secretary
January 31, 2007

Press Gaggle by Tony Snow and Ed Lazear
Aboard Air Force One
En route New York, New York

Tony Snow, White House Press Secretary
Ed Lazear, Chairman, Council of Economic Advisors

9:31 A.M. EST

MR. SNOW: All right, everybody ready? The President's schedule, early normal briefings. We're on our way to New York, where we'll go to Federal Hall. The President will first have an interview with Neil Cavuto, of FOX News, on the state of the economy address that the President is going to deliver afterward at Federal Hall. And then upon conclusion of that, he'll meet we Ceasar Borja, Jr. and other members of the Borja family. And then we will return home.


Q The meeting with Borja is after the speech?

MR. SNOW: That's correct.

Q Do you know what other members of his family are going to be there?

MR. SNOW: His mother, brother and sister. His mother is Eva; brother, Evan; and sister, Nhia, N-h-i-a.

Q I'm sorry, you said he's going to be meeting with them after his speech?

MR. SNOW: That is correct.

Q Is that going to be pooled at all?

MR. SNOW: It's a private meeting. We will probably -- we may have a photo release. We're not going to do pool; this is a private meeting.

Q (Inaudible.)

MR. SNOW: What?

Q (Inaudible.)

MR. SNOW: I'm sorry, what?

Q (Inaudible.)

MR. SNOW: Because it's an appropriate thing to do.

Q Well, I mean, but, it's a legitimate question. I mean, the kid has been calling for a lot more money than the President put up yesterday, for instance. Why --

MR. SNOW: Well, I think -- look, the President is going to be dealing with a grieving young man and his family. The one thing we can assure him, from a policy point of view, is that we will plug the gaps in any coverage and anybody who needs treatment will get it. Period.

Q "Anybody" -- say that again, anybody --

MR. SNOW: First responders who need treatment will get the treatment they need. Many are already covered by insurance programs, many through their union; but if there are gaps in that, we're going to do it. We've already -- he will get -- the family will get some briefing also about ongoing medical efforts.

Q But you're saying anybody -- when you said "anybody," you're saying first responders --

MR. SNOW: What I'm saying is first responders.

Q -- because, you know, people like Senator Clinton have talked about broadening it out to residents, out of state folks that showed up.

MR. SNOW: Well, at this point we're talking with the family of the first responder. I think at this particular juncture the most important thing to do is to talk to the Borja family, to pass on condolences and we do not look upon this as a political meeting, and I doubt they look at it as a political meeting, as well.

Q On a different subject, how confident are you that Iran was behind the agents that killed those five soldiers in Karbala?

MR. SNOW: I'm not getting into that sort of speculation. I'd send you off to the Department of Defense for any readout they're going to give. But let me just reiterate what the President said -- we're going to do force protection and people who are trying to kill our troops or to try to destabilize the democracy, we will respond to forcefully and appropriately.

Q Tony, good economic news this morning on GDP, how does that help you, if at all, when working with Congress? Does it give you a boost in terms of getting your agenda done?

MR. SNOW: Well, I think it indicates the success of the President's program. If you take a look at the GDP numbers -- a couple of other items I'd draw your attention to: low inflation and high wage growth. What we're seeing now is vigorous growth -- I think it's 5.4 percent in wage growth in the fourth quarter. You guys will have handouts, so you can double check me on the numbers. The fact is, there's vigorous wage growth and it indicates that the President's proposal of cutting taxes and creating more opportunities for businesses and workers is, in fact, succeeding, and it's important that Congress continue to think about ways of expanding our prosperity. And the first thing it ought to do is to extend the tax cuts that are already part of the law.

I've also got Eddie Lazear here, Chairman of the President's Council of Economic Advisors. So if you want sage advice on economic analysis, Eddie is your guy.

Q Do you think that this kind of economic growth is sustainable?

CHAIRMAN LAZEAR: I do. We've had this kind of economic growth for a number of years now. It's symptomatic of what we see as we come out of a recovery. Usually the first year or two is very, very strong, then it tapers off.

We've been fortunate in that this economy has been able to sustain growth for a long period of time. We're seeing it show up not only in growth of output in GDP, but we're also seeing wage growth, as Tony said. We're seeing high profits, which help the business climate, in terms of investment.

The only weak spot in the economy has been housing, and the very good news is that the economy is so robust that it's been able to grow at a very steep pace, despite the fact that the housing sector has slowed really to its historic levels. So it's not slowing relative to its past, it's just slowing to its historic levels.

Q -- quarterly GDP figures going ahead this year?

CHAIRMAN LAZEAR: We think there -- we think that we could see sustained growth. Remember, the labor market is extremely tight right now. We have a lot of people working. We've got 4.5 percent unemployment. Job growth is very strong. When you see that in the labor market, that suggests that the economy can continue to grow.

Q Can I ask you one other question on the Ground Zero stuff? You're saying anybody, first responder, who needs treatment will get treatment. Indefinitely? There's also a question, sort of, of how long this commitment will last.

MR. SNOW: Look, I'm not going to get into specifics. I'll let you -- the better thing to do is talk to the policy guys. Again, what you have is a situation where a lot of people were insured, and if there are holes in the insurance, we're going to plug them. The federal government has made a significant commitment, and we're committed to helping the first responders.

Q Do you have any sense of how much beyond the $25 million we're going to need? Everybody seems to agree that's sort of a down payment at this point.

MR. SNOW: Well, we'll have to see. Look, there are a lot -- what happened is that there was a big first payment -- the federal role began to expand only last October, as you know. So at this point, we are still getting data in. As a matter of fact, the first tranche of data should be coming in either tomorrow or the beginning of next week.

So rather than trying to do a back-of-the-envelope calculation, we'll take a look at the real numbers and find out what we've learned through the first quarter, and obviously we'll make appropriate adjustments as the data indicate.

Q Appropriate adjustments in the 2008 budget?

MR. SNOW: We'll find out. Again, we don't know what adjustments need to be made. So you're trying to talk into a vacuum. It may be that this is sufficient, it may be that it isn't. We'll just have to see.

Q Do you know when you'll know?

MR. SNOW: Well, again, the guys are going to start crunching the numbers as soon as they come in. The best thing to do is to give us a few days to find out, A, when the data are going to be available, and how long they think it's going to take to assess it.

All right, thanks, guys.

Posted: Feb 1 2007, 06:54 PM

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MR. SNOW: Before we get to it, just one quick announcement. Secretary Margaret Spellings is at a higher education forum in North Carolina State University. Today she will announce that the President's 2008 budget will include some significant increases for Pell Grants, as a matter of fact the largest increase in more than three decades. The budget would raise the Pell Grant maximum for students to $4,600, and increase that maximum over a five-year period to $5,400. That is the largest one-year increase and also the largest five-year increase in the history of the program. As you know, it's a program that makes college available for many low-income students who otherwise could not afford to go to college, and right now they're helping more than 5 million full and part time low-income students afford higher education each year.

Q Does that mean the President's cool with the adjustments that Democrats have proposed for, I believe, the current fiscal year?

MR. SNOW: The President is laying out -- I don't -- the current fiscal year, that would be in the CR.

Q And I believe it is in the CR.

MR. SNOW: That I don't know. I'll find out. But I think what you can say is, whatever it is, this is -- the President is, in fact, proposing ambitious increases in Pell Grants.

Q What classifies -- their adjustment was about at a $4,600 level.

MR. SNOW: Well, then my guess is they would agree with this.

Q General Casey testified today that securing Baghdad would take fewer than half the additional troops that President Bush has proposed, and he said that he had asked for two brigades, based on the recommendations of his subordinate commanders. So how did we wind up with five additional brigades?

MR. SNOW: Well, the President has talked with -- you also know that General Casey supports the plan. And the plan is to bring in five brigades into Baghdad, and also another 4,000 Marines into Anbar, not only to take care of immediate security concerns, but to make sure that we have adequate force structure as the Iraqis begin bringing brigades into each of the nine districts of Baghdad, and the Americans also into those nine districts, in support, that we have adequate resources and forces to deal not only with the media, but also potential threats to security.

Q But why the disparity in numbers? When he's talking on the Hill about asking for two, and the President asked for five?

MR. SNOW: Well, there were a number of conversations, and the President, after talking with General Casey and other commanders, came to the conclusion that he preferred to have five brigades into Baghdad and 4,000 Marines into Anbar. And again, what General Casey was talking about is some suggestions he'd made earlier. The President has made his decision, and it does reflect the wisdom of a number of combatant commanders. And again, it does have the assent of General Casey.

Q Let me get one more. General Casey, do you think that he's kind of been all over the park on this? He's first of all, said that additional troops weren't warranted, and then he went along with the President, and now he's saying this?

MR. SNOW: No, I think what you've had is you had a shifting series of circumstances within Baghdad. Keep in mind the assumption originally of Operation Together Forward was that we would not need extra forces. But it became obvious that we did need more simply because we did not have the capacity to put in grounded forces and to leave them 24/7 within the districts of Baghdad.

Equally important we needed significantly more Iraqi forces on the ground. And that really is the key element in this plan. It's one that we tend not to stress because we're thinking about our troops. But the Iraqis are going to be putting significantly more forces, additional forces into Baghdad, as, indeed, already they have more forces in the city, as well.


Q Tony, on that -- the resolution. So you've got more Republicans and Democrats coalescing around some language which at its core opposes the troop increase. You've made the argument about what message that kind of resolution would send. That's an argument. People will agree or disagree with that. What will the President do when there is an actual resolution?

MR. SNOW: The President will continue to exercise his responsibilities as Commander-in-Chief and do what he thinks is going to be best for American security.

The other thing he will do is what he's done already, which is to encourage people to give the plan a chance. It has not yet begun to take effect. The Iraqi forces are not yet into Baghdad, they're on the way. The U.S. brigades are not yet deployed, they're on the way. What you have seen already, however, perhaps as a result of -- signals of American determination, are real signs on the ground, again most recently, Muqtada al Sadr telling his people, lay down your arms. You have seen a move back into the political process of members of al Sadr's party. You have seen open attempts by Shia and Sunni groups to try to figure out how to create the basis for political reconciliation. You've also seen tough military action against Shia and Sunni groups that were operating outside the law. The Prime Minister has given a series of speeches about what he intends to do.

So what you are seeing, David, is many of the actions that members of Congress say they want to see are beginning to take place already. We think it's important, because, again, as you know and everybody else knows, the money is in the budget now for the five brigades into Baghdad and the 4,000 Marines into Anbar, and we would encourage everybody to take a look at what happens.

Q But isn't there -- when this resolution comes to pass in whatever form is final, isn't there a realization on the part of the President that he's effectively lost the public and then lost Congress, and so the answer to the question of, give it more time, is essentially, why should we trust you, Mr. President, to mend this thing?

MR. SNOW: No, I don't, because, again, there are a number of things being floated around, including language that says the finances to support troops in the field. There is a general recognition among members of Congress that we can't afford to fail in Iraq. And there is fairly significant agreement that that means Iraqis able to handle their own security. So I think there's still a basis for further discussion on this.

Also, Americans want to see results and they do want to see an improvement in conditions in Baghdad. I don't think you should take public opinion as something that is chiseled into stone. This is something that can change, based on the realities on the ground. As a matter of fact, the President -- he's made the point a number of times, if somebody were polling him on the situation right now, he would not approve of what's going on, which is precisely why we've come up with a new way of deploying forces, new rules of engagement, new strategies involving such things as much greater presence of provisional reconstruction teams, economic development teams within Baghdad. All of these are a recognition of what was going on before didn't work, and we need to succeed.

Q Fair enough. But there's still a realization that if his request was for patience and allow this to work, the answer, at least where public opinion is today and where congressional opinion is -- if we get this resolution, is, we don't trust you to carry it out.

MR. SNOW: I'm not sure that's right. I'd take a look -- well, well, based --

Q You can make an argument, but I mean based on what? What would you --

MR. SNOW: Based on -- for instance, if you take a look at when people got a chance to listen to him at the State of the Union address. You've seen the flash polls, and they indicated the people did think, okay, we get it. I think that there is still a basis for the public wanting to see success in Iraq.

I think to the extent that the public doesn't like what's going on, we agree with them. And as I would suggest again, facts on the ground are going to shape opinion. We know that. The President has an obligation as Commander-in-Chief to do what he thinks is necessary to keep this country safe.

And one of the things vital to keeping this country safe is to prevent the creation of a vacuum in Iraq that could create conditions of terror that certainly could influence this country, not only our safety but our economic security.

Q Just one final one on this. You make assertions about the public gets it, the public wants this based on I don't know what --

MR. SNOW: No, I mean, we've done --

Q And what I'm -- the question is, do you think the American people and Congress trust the President to fix what's wrong in Iraq?

MR. SNOW: I think the American people want to see results. I think -- I don't know how you say -- let me explain why I think trust is a little loaded. The President is a man of his word, and he's a man of honor. And trust is often associated with that. Do Americans have absolute confidence that what we have laid out is going to have 100 percent chance of success? No, they want to see results. So I think the reason I'm reluctant to answer the trust question is that that bears on character. And I think people do, in fact, trust the President's character.

Q I'm using it in terms of track record.

MR. SNOW: Well, that's why I'm -- I'm taking issue only with that particular term. But the fact is, you got a skeptical public. Absolutely. And it's got a right to be skeptical. They want to see results. And what we're saying is we want to see results, as well. That's why we have changed a whole significant number of the elements of our force structure, the way they operate, the way they interact with the Iraqis and all that. And therefore, I think it is important to let the public see what this program can achieve.

Already a sign of American determination has changed behavior for the better, it appears, on the ground in Iraq. But certainly that is only a very, very, tiny, modest down payment on what we all want and need to see.


Q Tony, you talk about progress over there with the Iraqis. And on the surface it appears that way. But General Casey in his testimony said some of the ministries are so corrupt, they won't make any progress. You talk about al Sadr telling his followers to lay down their arms. He's done that so many times before. And whenever he wants them to pick them up again, they do.

MR. SNOW: Well, yes, and that bears on what I was just talking about, Martha, which is there's a different approach. In the past, you would have forces going in by day and out by night. And that's not a very effective way to deal with militias that are gathering up arms. The Prime Minister has made it real clear that anybody who is trying to build up armaments on the sly is going to be operating outside the law. The difference now is that you're going to have Iraqi brigades with U.S. battalions in support in each of the nine districts.

Q In Sadr City.

MR. SNOW: In Sadr City.

Q Including patrolling, and how big a presence?

MR. SNOW: Well, again, I don't know exactly how the map carves up Sadr City, but it's certainly going to be at least one of the districts and perhaps maybe even falling within more than one district. And so you're going to have an Iraqi brigade and you're going to have U.S. support.

In addition, as you know, part of the deal is, you go door to door. You build confidence with the forces. And by the way, this bears on your corruption question, which I'll get to in a moment, and you also try to collect intelligence. It is absolutely vital to get real-time intelligence. The Iraqis are going to be better at it than we are. Also to try to force people to make choices -- are you going to do the political path, or are you, in fact, going to try to operate outside the law?

There have already been operations within Baghdad in recent days that have made it clear that the Prime Minister is not only willing, but understands the necessity of using force against those who are trying to amass arms to weaken him in his government. So the fact is, you have a different approach. You have different rules of engagement. Nobody can call off an engagement because they're afraid some political ally might get into harm's way. And there is a determination on the part of the Iraqi government not merely to move forward, but to have a 24/7 presence in those districts. I will not give you --

Q But you've got 2.5 million people in Sadr City.

MR. SNOW: I know.

Q And you're talking about a brigade with support from Americans?

MR. SNOW: Yes. Again, I'll have to go back -- and you've probably seen the maps, as well. Let's go back. We'll take a look at -- if you want an operational description, it's where I talk about --

Q I don't want an operational -- but when you come up and you say, it's great, he's going back to the political process, he's asking people to lay down their arms. But you've got 2.5 million people and you've got a brigade, and you've got somebody who has broken their promise a zillion times.

MR. SNOW: I believe also that I have said that it's a very tiny down payment on progress that people expect to see. You've also seen one of his key lieutenants arrested -- not released. These are signs that something different is going on.

Now, I trust that you and everybody else will keep a watchful eye on what goes on in Sadr City. And I think if you want to get into operational detail, it's probably better to talk to the Pentagon about that.

Q I'm not getting into operational details.

MR. SNOW: Let me -- well, you were asking an operational question, how are you going to deal in Sadr City. Now as for the corruption question --

Q But that's the way you answered it, so I get to ask the questions.

MR. SNOW: Well, the corruption question is also very important because absolutely it's a problem. You've seen another shake-up in the police this week. We have made no bones about it, there have been corruption problems. And they have to be addressed and addressed aggressively because if you've got that kind of corruption, especially the situation where people don't know if police are there to save them or kill them, that is not the way to build confidence. You have to have a government that creates confidence among those who are the governed.

And we made it clear to the Iraqis that that is going to be vital for their success. So on that front, I agree with you. Corruption has been a problem. And, yes, we've talked about addressing it before. What we did didn't work as well as it needed to, and obviously, there needs to be more aggressive efforts there.

Q Can I just go back to the question about General Casey and the brigade, saying he felt fewer than half of what the President has planned were needed. You say he supports the plan now. He says he does, but it seems like a very diplomatic way to say, not really, and I don't have to be there to carry it out. So who did the President rely on heavily when he made these decisions? The commander on the ground did not, it appears, agree with the President's bigger, larger plan for more brigades. The commander of Central Command apparently did not. So the President relied mostly on outside people, or the people who he was trying to get to go in --

MR. SNOW: I've often been asked about internal deliberations, and I've always given the same answer, which is, I'm not going to characterize them. It is worth noting that General Abizaid and General Casey, both of whom you've described as being in opposition to the plan, publicly have supported it. And so I'll let you --

Q But what he said today didn't quite fit that, Tony.

MR. SNOW: I'd refer the questions back to him and I let him clarify.

Q How much responsibility do you think General Casey bears for a failed plan?

MR. SNOW: The President has made it clear that if anybody bears responsibility, it's the President. And he does not want people second-guessing commanders who have been acting on his orders.

Q Is the President disappointed that some key Republican allies like Senator Warner have been instrumental in pursuing this resolution?

MR. SNOW: Again, let's see where these things go. Even this issue is in considerable flux. And we're aware of the conversations that have been going on on Capitol Hill; we've been monitoring them. But as I said also, we're not going to get into the business of writing resolutions. As David has pointed out, we've laid out benchmarks about what we think people ought to consider, and they'll do that.

The other thing is we've got a way forward that acknowledges all the faults and defects of previous plans that you have noted and others have noted. This is not an attempt to ignore problems, it's a commitment to address them. And so, as Congress thinks about this, we also would expect members to take a very careful look at how this programs proceeds -- not expecting overnight results, because nothing can yield overnight results, but the problems we have are significant. But we also believe that we have the force structure and the doctrine in place, as well as the commitment on the part of the Iraqis, that will get us to the situation where the Iraqis, as quickly as is feasible, assume lead positions on security and other functions within their government so that they are going to have that free-standing democracy.

Q Tony, back on the issue of Iraqi brigades that you mentioned. What is their status? They're not all there yet, obviously, but --

MR. SNOW: Well, we're talking about five brigades, and as you know, it takes time to get there. What the Iraqis have talked about is within the next four to five weeks trying to get three deployed within Baghdad. So we'll see.

Q Because one of the things that a senior official said on January 10th, when the President was going to deliver his Iraq address, was that the American people are going to have these signs --

MR. SNOW: Right.

Q -- very quickly they'll be able to see whether or not the Iraqi government is coming through. And one of the things that was talked about as an example of that was this move to get Iraqi brigades in -- and it's February 1st now, and --

MR. SNOW: Go back and look what the senior official said, too, it will be mid to late February. So it's still within the time frame I mentioned to you.

Q Well, I believe one of the dates was February 1st there would be at least one Iraqi brigade --

MR. SNOW: No, I think -- go back and take a look. I think it was 15, one; 30, two. But go back and check. The point is we're still within the time frame of that. The other thing is that people have always said, look, you may have a day or two here -- I know you've got the stopwatch going, today is February 1st, but there's progress on that. And, yes, there will be an opportunity to see how quickly people -- how quickly the Iraqis get their forces into Baghdad. So we're taking a look at it. But I don't think that there's any sign right now that indicates that they're not capable of meeting this.


Q Back to Casey and his questioning today. Senator McCain was pretty scathing in questioning Casey's credentials and saying all these mistakes were on his watch and he should take responsibility for them. You're just saying that you think the President takes responsibility for that --

MR. SNOW: I know he does.

Q -- does that mean Casey is off the hook?

MR. SNOW: No, look, the President is not in the business of putting his commanders on the hook. He's the Commander-in-Chief, and he has said -- he said it yesterday with The Wall Street Journal -- I'm the Commander-in-Chief; I do not want you second-guessing people who have been carrying out my orders.

And so the President says he takes -- the President takes full responsibility for what has not worked, and he understands that he is going to be held accountable for what happens in the way forward. That's what happens when you're a Commander-in-Chief, you have to make decisions.

Q So Senator McCain was off base --

MR. SNOW: No, don't try to -- Senator McCain is -- in the process of advising and consenting on a nomination, is certainly free to ask tough questions and to express his opinions. I'm telling you what the President's view is. I am not going to try to get caught in a fight with Senator McCain, whom we respect and who has been very supportive of the President on the way forward.

April, you had a question earlier and I jumped -- do you want to go back and get that?

Q Yes, please. Could you articulate how you're connecting -- how the White House will connect the Pell Grant issue being increased to helping to keep the economy resilient?

MR. SNOW: Yes. If you take a look yesterday at the remarks the President made on income inequality, which gathered a significant amount of attention, it is obvious that there is a significant income gap in this country based on educational attainment levels. It's one of the reasons why we want to make sure that high schools provide better education -- actually, K through 12 -- but also that more people have access to a college education, because in the kind of economy we have now, education matters.

You've got an economy where there is an enormous amount of transition within industries. As I pointed out before, in any given month we create millions of new jobs. The economy sheds millions, but creates even more. And many people go through a variety of careers. What is the best way to be able to cope with an economy like that? The answer is the kind of intellectual, skills, tools, and creativity and inquisitiveness that allow you to adjust, adapt, or even simply pick up and change careers on various occasions based on what you want to do.

That's a strict byproduct of education. In a global economy, education really is going to matter. And it is important that people at all income levels have the same ability to learn, to get first-class educations. That is the thought behind No Child Left Behind, and it is the commitment embedded also in the Pell Grant program.

Q Can I follow up on something else. Is the President going into the lion's den tomorrow?

MR. SNOW: No -- are you talking about when he's speaking -- he's actually -- no, he is speaking to Republicans tomorrow. He will speak to Democrats on Saturday.

Q Well, the Democrats Saturday.

MR. SNOW: Okay.

Q Is he going into the lion's -- forgive me for --

MR. SNOW: No, it's -- actually, it was intriguing and pleased to be invited. And I think this is going to be an opportunity for the President once again to repeat things that he has said on a number of occasions, which is, there's an opportunity to work together, and the State of the Union had a series of four big areas of stated concerns of Democrats and Republicans.

And this is, incidentally, not a way of saying, I just want to work with Democrats. The President wants to work with Democrats and Republicans in both chambers to address educational performance -- again, No Child Left Behind, going ahead and renewing No Child Left Behind; a health care proposal that offers not only lower health care costs to 100 million Americans, but also the prospects of private insurance to millions who either can't afford it, or go uncovered today. He believes that it's very important to have an energy policy that provides the energy we need and cleans the environment at the same time.

These are a series of initiatives -- and on immigration, something that not only respects the rule of law when it comes to people who are trying to cross the border, people who are trying to exploit cheap labor by employing people illegally, and knowingly so, but also, at the same time, realizing that this is a nation that grows stronger when we have the rule of law and we also create opportunities for everybody.

So all of that -- all of those are themes that I think are profitable and fruitful to discuss before Democratic and Republican audiences.

Q But there's just so much strong disagreement on Iraq, and then there's so much strong disagreement on the health care proposal, particularly saying that people who don't have insurance now don't have it for a reason. If they have a chance to pay for a house, versus insurance --

MR. SNOW: But that's precisely why we're talking about innovative ways to make insurance available for those who can't afford it. Furthermore, the tax credit is available to anybody who works. So this is really a two-part program. It's not merely -- not the tax credit, but the tax deduction. You've got the tax deduction, plus you also have a supplementary program that's designed to address the poor and the uninsurable. So those are all parts of it.

But, look, they can talk this back and forth. If you listened to Speaker Pelosi yesterday, she, in fact, talked about wide areas of agreement when she came back from a trip to Iraq. She's had critical comments, but she also came out when she was at the sticks -- all of you freezing out there yesterday waiting for her -- got to hear the Speaker say that there's a lot they have in common. I think there's an opportunity for both sides to examine where they can work together.

And both have said they think that it's vital for the credibility of this Congress to demonstrate that it can get the job done. And the President is committed to getting things done. He's a man of action.


Q Thank you so much. Do you have any reaction to this alleged terrorist arrest, series of arrests in Great Britain? They were pretty horrific. Is there any lesson in this for the U.S.? And did the U.S. intelligence have any input in arresting these men?

MR. SNOW: The first part is no comment. And the second is, come on, of course, no comment.

I really don't have anything to say about the British arrests. And we would never talk about intelligence cooperation. You know that.

Q Do you see similar dangers from the community here in this country, based on the U.K.?

MR. SNOW: Again, I don't want to start -- what you're talking about is -- I'd rather not try to make broad brush characterizations of any community in the United States. What we have tried to do is to make it possible for law enforcement authorities to do everything they can to give them the tools they need to try to figure out who is trying to kill Americans. A lot of them are Americans, perhaps. A lot of them may have come here from overseas. But the fact is you need the surveillance tools. You need the law enforcement tools. You need the intelligence tools. And most importantly, you also need to be able to deal with the threat overseas to try to deal with many of the sources, financially, inspirationally and otherwise, for terror around the world. So that's the most important thing for this government to do.

And obviously an essential part of that is dealing with foreign governments. We have a lot of cooperation at the strategic and tactical level, as well in intelligence-sharing. But for obvious reasons, we don't want the bad guys to figure out what's going on. We're not going to talk about it publicly.

Q Do you know if President Bush had any contact with Prime Minister Blair in the wake of this?

MR. SNOW: The President talks to Prime Minister Blair very regularly.

Q Democrats next week are going to make a big deal about the cost of the war. And so I'm wondering what you can say about how the budget is going to address the costs of the war. And just what did you say --

MR. SNOW: Well, as we've said, we're going to try to be much more transparent in the costs of the war. I will let all that come out at the beginning of next week when the President releases the budget. But you'll see that in the budget. And Democrats will have an opportunity to respond to what they see in that budget.

Q Tony, I have a question on the influence of presidential appointees on regulatory and environmental policy. There is an executive order that came out a few weeks ago that's drawn criticism because it would require all policy, regulatory review officers to be presidential appointees. And I just wondered your response to a concern that this will have a chilling effect and slow down the process --

MR. SNOW: I don't buy it. You have political appointees. You also have an administration -- and, Paula, we'll be happy to do chapter and verse with you -- where not only on regulation but also environmental issues, we've spent more money on environmental research than all the other governments of the world. This is an administration that actually has a better performance in terms of CO2 emissions. It is an administration where the President in the summer of 2001 was talking about man-made global warming and the need to address it through innovation, and created a panel that involves key Cabinet members in going after the sources of pollution and emissions.

So the fact is, we do have an aggressive set of regulations in place. And the other thing is, the process here is one that always ends up, in scientific peer review -- I would encourage people, rather than looking at whether somebody is a political appointee, to look at the process that has been laid out for reviewing regulations, because it's designed not to chill, but in fact to invigorate a process to make sure that you have thorough scientific review of all these things, as well as cost benefit analyses.

Q The other question, though, related to influence on environmental policy. There was a hearing a few days ago in which government scientists have said that their works have been either edited or censored if it does not support administration policy on climate change. As far as peer review, too, it's been a criticism that some of these boards are made up of somewhat industry-friendly members.

MR. SNOW: What's also the case is that some of the people who have been at the lead of making these allegations are not, themselves, scientists. I would just point to the fact that, for instance, the IPCC report, which will be coming out, makes use of U.S. scientists and U.S. scientific data. The largest source of scientific data on climate change comes from the United States. The incremental improvement in our ability to understand what's going on with climate change is a result of research that has been funded through the United States government.

So I understand that there will be people who say their voices are not heard, but we will be happy to provide you in great detail -- because I now have a stack that is about this thick -- that goes through the processes and the data that have been gathered. But no administration in American history, and none on the face of the Earth, has been more aggressive in trying to do sound science on this than this administration.

Q But the survey that was cited at that hearing was based on the respondents, who are all government scientists.

MR. SNOW: I understand that. As I said, I will be happy to provide you -- without getting into the vagaries of one survey, we'll be happy to swamp you with data so that you will be in a position to assess fully and completely the varying claims.

Q You were just mentioning cooperation with foreign governments on your fight against terrorism. Is the administration going to cooperate with the German government after the German justice has issued mandates against a dozen of the CIA operators?

MR. SNOW: We'll continue to do security and intelligence cooperation with allies. We do not discuss particular operations or allies. But let me just say that we continue to work with people who have been helpful in the war on terror.


Q Thank you, Tony. Two questions. Since the President told Fox News yesterday that he is "impressed" by Senator Obama, who he finds "attractive and articulate," surely you can tell us, Tony, what the President thinks of a widely reported page 1 quote of Senator Biden that Senator Obama is "clean"?

MR. SNOW: No, I can't. But thank you. I haven't talked to him about it. It's just -- I don't know.

Q Well, Senator Obama said yesterday that "Senator Biden certainly didn't intend to offend. And I'll leave it at that."

At which Senator Biden called Obama "a superstar, the most exciting candidate from either party in decades, he's fresh, he's new, he's smart, he's insightful, a very special guy, who is like catching lightning in a jar. I think he's great. I think I'm better."

And my question, does the President --

MR. SNOW: Whoa, wait a minute -- all that, and he's better?

Q Yes, right, right, and he's better.

MR. SNOW: Wow. Well, you need to call him and ask him how he'd describe himself.

Q He says he's better.

MR. SNOW: But what's better than lightning in a jar? (Laughter.)

Q Fireflies in a jar.

Q White lightning in a jar. (Laughter.)

Q White lightning in a jar. Does the President recognize this hilarious contradiction as the indication of a preface to another Biden withdrawal, as he did in 1988?

MR. SNOW: Oh, my goodness. Let the candidates make their cases to the public. The public will decide.


Q Tony, yesterday Dana said these resolutions send mixed signals to our troops and our enemies. Should we really be so concerned that the misunderstanding of the exercise of our form of government by the enemy would cause us to not pass resolutions?

MR. SNOW: Well, if one came to the conclusion that it emboldened an enemy and placed people in harm's way and increased the risk. It's something -- look, the thing is, when you talk about this, you're trying to read states of mind. And these are things that are important to keep -- at least to consider when you're doing these things. As you know, and I've said many times, Osama bin Laden thought the lack of American resolve was a key reason why he could inspire people to come after us on September 11th. I am not accusing members of the Senate of inviting carnage on the United States of America. I'm simply saying, you think about what impact it may have.

But we also -- look, they're a separate and co-equal branch of government. And they will do what they think is appropriate. The most important thing to do is for everything to realize -- I'll finish up and then you can come back at me.

Q All right.

MR. SNOW: The real challenge before members of Congress who say they do not like the idea of putting in another 21,500 forces is, okay, then what other path to success in Iraq? That is one of the things we would love to hear.

Rather than trying to get into these debates that sort of try to paint one side into a corner, this is an opportunity for people to try to step up and work together.

Q It seems as though you're suggesting that the Senate should not pass this kind of resolution because in fact it would somehow embolden the enemy.

MR. SNOW: I just don't know. I don't -- I'm saying that that is something that they'll have to consider. And I'm sure they are.

Q Tony, what's the earliest date on which it would be fair to gage whether the new way forward is working or has worked?

MR. SNOW: It's a tricky question and I can't give you an answer. I'll tell you why it's tricky. One of the reasons we have resisted strict timetables is because you do then create sort of an invitation for those who would undermine the government to kind of sit it out, to melt away to the periphery, to try to build strength and organization. That's something you have to be concerned about.

So -- but what we have said is that people are going to need to see progress. I won't give you an absolute timetable, but obviously the next six to eight months are going to be times when people expect to see something happening. But I would be very wary about trying to assign a specific date to it.

Q And what will the administration do if, after eight months, it's not working?

MR. SNOW: Well, again, you don't talk about "what if" -- what you're asking is, what happens if a program that hasn't even begun doesn't work? We spent a lot of time thinking through this program precisely because we thought it did work. And we hope we will never get to the point where we have to ask the follow-up.

Q Is six to eight months the timetable the administration is working with on when another look at it might have to be taken?

MR. SNOW: You take a look at it every day. This is not something where -- look, we want to see results, but the other thing that's going to happen is that there will be constant communications on the ground. How do you see it? What's going on with the Iraqi forces? What's going on inside the country? What does intel tell us about -- are people filtering out to the north, are they filtering to the south? It's a war-time situation. So real-time intelligence and nimble response on the basis of that intelligence is always going to be important.

Getting back to what Terry said, there may be the need -- part of what's built in here is the ability to respond to some of those shifts in the landscape so that you don't find yourself in a position of saying, oops, we need another thousand forces. At that point, you're not going to have the political capital to do it because the American people then will come back and say, why didn't you, and fill in the blank.

Q One way or the other, when people start voting roughly a year from now in the presidential primaries and caucuses, is Iraq going to look a lot different than it does today?

MR. SNOW: Sure hope so, but we don't know. I mean, the thing is what you're asking for -- General Petraeus and others have said, don't expect instant results. We're -- it's not something that changes overnight, but on the other hand, I think what we do hope that Americans will certainly see is much enhanced Iraqi capability -- we're talking about the Iraqis a year from now being in control of security operations in each and every one of the 18 provinces. That will be significant.

We are talking about significant economic development efforts; we're talking about significant political reconciliation. Those are the kinds of things that we would expect to see. There is no guaranteeing a complete and total end to violence, because, as we've seen, a small number of people who are determined to commit mass murder by packing themselves with dynamite, or loading up a car and driving by somebody -- that's almost impossible to stop. What you do have to do is create the conditions where the public is pushing back hard enough within Iraq, itself, that it decreases the ability of such people to organize themselves and to carry off missions, but also, that there's going to be a much stronger commitment to the success of the government because people are feeling a greater sense of security and also greater sense of economic security.

One of the big contributors to what's going on right now is high unemployment and a considerable amount of criminal activity that's made possible by the fact that people don't have other things to do. And therefore, you have to address all those. I know it's a long, sprawling answer, but that's -- those are the kinds of things that we take into account when we start assessing the situation in Iraq.


Q Eight months from now would put us at October, and that would --

MR. SNOW: Okay, nine months -- then we get to November.

Q Wait a minute. But you're saying, between six and eight months we can kind of gage to see if it's working. And then in November, that's a month away -- do you have enough time to change -- to put the Iraqi security in total control within that small window?

MR. SNOW: No, no, no, what I'm saying is this is a time for -- between now and then, April, in the next few months we're going to see increasing numbers of provinces going over to Iraqi control. This is not something where everything gets stacked up with November 1st as sort of the beginning date. A lot of these transfers of authority are going to be taking place during the course of the year.

Q Tony, Senator Bill Nelson was one of the Senators that visited Damascus some months ago with Senator Kerry, Senator Dodd, and has been talking to the Council on Foreign Relations about his discussions with President Bashir Assad, where he indicated that, although Assad was saying many of the same things he's been saying on a lot of topics, with regard to the over-the-border operations that were being conducted from Syrian territory, he was willing to talk with either the United States or with the Iraqi government to do something about this. And Nelson indicated that from past experience when there were moves made by the Syrians to try and deal with this, they did show an indication that they would work on this.

The question is, would the United States be willing to talk with Syria about these issues and somehow try and engage in a dialogue with them on the situation in Iraq?

MR. SNOW: I think the better way to think of it is if the Syrians want to demonstrate goodwill -- because Senator Nelson has also been the recipient of broken promises on prior trips to Damascus. He's come back, said, I was promised this, and it didn't happen. So probably the best thing to do is for the Syrians simply to go ahead, step up and go ahead and take action against cross-border incursions.

As you know, the Iraqis have decided to do so themselves. That was one of the things that they've announced in the last days. So certainly the Syrians can make that a lot easier by striking a cooperative pose and doing what they can to try to prevent the shipment of arms, and also people coming across the border. They don't need our permission. We would love to see this. As a matter of fact, what we've said all along is one of the conditions in the future for having negotiations with the Syrians is for them to demonstrate good behavior.

Q Prime Minister Maliki seems to resent the new order to kill, capture Iranian agents in Iraq. And how is the President respond or react to Maliki when he talks about the United States -- with the regime of Iran, and he literally said, take your issues and fight outside Iraq?

MR. SNOW: I'm not sure he resents.

Q He literally said that, we know there are issues between the United States and Iran, and they shouldn't be solved on the ground of Iraq.

MR. SNOW: Right, but -- and we agree. But when there are Iranian agents trying to destabilize the government of Iraq, I believe that the Prime Minister also believes in protecting his own government from foreign incursions, and he's talked about foreign fighters. I believe he's talking about something far different.

Let me -- there has been so much speculation about the United States crossing the border and invading Iran. And everybody keeps trying to create this narrative. The President has said it, and I've said it three or four times from the podium, let me reiterate, we're not invading Iran. What we are doing is force protection within Iraq, which is something that is done with the cooperation and support of Prime Minister Maliki, because quite often arms that are smuggled in are designed not only to kill Americans, but quite often to kill larger numbers of Iraqis. And as the head of a government that needs to reduce the level of violence and increase the level of cooperation across sectarian lines, it's certainly in his interest to do so.


Q Tony, Vice Admiral McConnell was up on the Hill for his confirmation hearing today. The criticism up there is that the DNI just created another level of bureaucracy, and that now the guy who set up the bureaucracy and at least knew about it is heading over to State. What's your response to that --

MR. SNOW: Well, the response is that John Negroponte is the Director of National Intelligence -- he's not created another bureaucracy, but what he's tried to do is to assemble a new institution that is able to do what a whole series of sometimes competing bureaucracies in the past could not do, which is to try to find a coherent way to assemble and make use of intelligence gathered by various parts of the United States government.

Now you're bringing in Admiral McConnell, who not only has intelligence and military background, but private sector experience that gives him management skills that are going to enable him creatively to handle some of the challenges at the Department of National Intelligence.

So one of the reasons, in fact, we chose him is that he's somebody who has experience and he knows how to use intelligence, and at the same time, he also knows how to manage.

Q Thank you.

MR. SNOW: All right, thank you.

Posted: Feb 1 2007, 06:55 PM

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For Immediate Release
Office of the Press Secretary
February 1, 2007

American Heart Month, 2007
A Proclamation By the President of the United States of America

Heart disease is the leading cause of death in the United States, claiming hundreds of thousands of lives each year. During American Heart Month, we renew our commitment to fighting cardiovascular disease by increasing public awareness of this deadly disease and understanding of how it can be prevented.

Today, millions of Americans live with some form of cardiovascular disease, including congenital heart disease, coronary heart disease, and high blood pressure. Individuals can reduce their chance of developing these and other types of heart disease by exercising regularly, maintaining healthy eating habits and weight, avoiding tobacco use, and monitoring cholesterol and blood pressure levels. All Americans should speak with their doctors about the dangers of this disease and get regular preventive screenings.

My Administration continues to help raise awareness of heart disease through initiatives such as "The Heart Truth" campaign, sponsored by the National Heart, Lung, and Blood Institute. First Lady Laura Bush serves as the National Ambassador of "The Heart Truth" campaign and works with partner organizations as part of her Women's Health and Wellness Initiative. The campaign informs women about the dangers of this deadly illness and encourages them to make cardiovascular health a priority. This year marks the fifth anniversary of the campaign, which uses the red dress as a symbol to remind women to protect their heart health and inspire them to take action. New data shows that fewer women are dying from heart disease, and more women are aware heart disease is the number one killer.

During American Heart Month, we honor the medical professionals, researchers, and all those whose tireless efforts are making a positive difference in the lives of those battling heart disease. By working together, we can continue to help the American people live longer and healthier lives.

In acknowledgement of the importance of the ongoing fight against cardiovascular disease, the Congress, by Joint Resolution approved December 30, 1963, as amended (77 Stat. 843; 36 U.S.C. 101), has requested that the President issue an annual proclamation designating February as "American Heart Month."

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, do hereby proclaim February 2007 as American Heart Month, and I invite all Americans to participate in National Wear Red Day on February 2, 2007. I also invite the Governors of the States, the Commonwealth of Puerto Rico, officials of other areas subject to the jurisdiction of the United States, and the American people to join me in recognizing and reaffirming our commitment to fighting cardiovascular disease.

IN WITNESS WHEREOF, I have hereunto set my hand this first day of February, in the year of our Lord two thousand seven, and of the Independence of the United States of America the two hundred and thirty-first.


Posted: Feb 2 2007, 03:01 PM

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MR. HADLEY: Good morning. I presume everybody has seen the declassified key judgments for the NIE on prospects for Iraq stability. I just wanted to talk a little bit about that, draw your attention, I think, if I could, to a couple aspects of it that are useful, and then take your questions.

I want to begin by saying that while the NIE, the National Intelligence Estimate, which is an effort to bring together all the elements of the intelligence community and come out with a consolidated set of judgments about the situation in Iraq -- this is a new document, the result of the conclusion of that review, but it's not new intelligence. That is to say, the substance of the document is intelligence that we have been provided by the intelligence community for several months, and it is this intelligence and the picture it paints that caused the President to conclude and then develop a new strategy or new approach to Iraq.

Secondly, in developing that new strategy or new approach, the intelligence community was a participant, and this intelligence, of course, inputted into that process to help us identify, then, and develop the policy that we did. Put another way, the intelligence assessment that is reflected in this NIE is not at war with this new approach or new strategy the President has developed, but I would say, explains why the President concluded that a new approach, a new strategy was required; explains a number of the elements of that strategy, and generally supports it. That is to say that the policy is designed to deal with the challenges that are reflected in this intelligence.

I think overall it is a fair statement of the challenge we face in Iraq, about the prospects for success, and a good statement about the risks if we do not succeed in Iraq, for Iraqis, for the region, and for Americans here at home.

So, in summary, it's a tough look at Iraq. It makes clear the challenges we face. It does suggest that we can succeed with the right policies, and we think we've developed the right policy, the right strategy, the right approach. And it makes it clear once again, as the President has been saying, that the consequences of failure are grave, indeed.

I'd like to just call your attention to some portions of the NIE that I think are important to get in front of us. The NIE shows, and the President clearly understands that it is clearly a difficult, challenging and complex situation on the ground in Iraq. This is not a simple problem. And we came to -- that is to say, the President came to the same conclusion that unless efforts to reverse these conditions in Iraq show measurable progress in the coming 12 to 18 months, the overall security situation will deteriorate.

That's a conclusion the President reached. To continue doing what we're doing was, as he said, a prescription for slow failure. We needed to do something different, which is why we have a new strategy, and we need to measure our progress in carrying out that strategy -- things that the Iraqis need to do, and things that we need to do.

I think it's important also to focus on the fact that as a follow-on to that statement -- that unless efforts are made to reverse the situation, the situation will deteriorate -- the declassified version says really in its first paragraph something very important -- "If strengthened, Iraqi security forces more loyal to the government and supported by coalition forces are able to reduce levels of violence and establish more effective security for Iraq's population, Iraqi leaders could have an opportunity to begin the process of political compromise necessary for longer-term stability, political progress, and economic recovery." And the comment I would make here is, everyone understands that that greater compromise and working together of Iraq's communities is critical to long-term security and stability in Iraq.

In order to achieve that, the judgment here and the judgment of the President was we need to get control of the violence in Baghdad and return Baghdad to the control of the Iraqi government. Nonetheless, even then it will not be easy. And as the NIE goes on to say, "Nevertheless, even if violence is diminished, given the current winner-take-all attitude and sectarian animosities infecting the political scene, Iraq leaders will be hard pressed to achieve sustained political reconciliation in the time frame of this estimate."

We agree that it is hard. We think that's accurate. We would emphasize the "hard pressed," because we will be pressing them hard, and the Iraqi people will be pressing the government hard, because in the end of the day, we all understand that reconciliation is a key to long-term security and success.

The NIE makes clear the consequences of withdrawal are serious. Again, I'd like to quote from it: "Coalition capabilities, including force levels, resources, and operations, remain an essential stabilizing element in Iraq." And that is why, as part of the President's strategy, while the Iraqis have a plan for bringing security to Baghdad, it is a plan that requires the support of the coalition and the additional forces of reenforcement that they describe.

Let me continue to read: "If coalition forces were withdrawn, if such a rapid withdrawal were to take place, we judge that the Iraqi security forces would be unlikely to survive as a nonsectarian national institution. Neighboring countries, invited by Iraqi factions or unilaterally, might intervene openly in the conflict. Massive civilian casualties and forced population displacement would be probable. AQI, or al Qaeda in Iraq would attempt to use parts of the country, particularly al Anbar Province, to plan increased attacks in and outside of Iraq. And spiraling violence and political disarray in Iraq, along with Kurdish moves to control Kirkuk and strengthen autonomy could prompt Turkey to launch a military incursion.

That's why the President concluded that while the current strategy was not working and it was a prescription for slow failure, an American withdrawal or stepping back now would be a prescription for fast failure and a chaos that would envelop not only Iraq, but also the region, and could potentially, by giving al Qaeda a safe haven in Iraq, result in risk and threats to the United States.

The NIE gives us some evidence of why the President announced a fundamental shift in our strategy in Iraq. The President and the Iraqis have taken steps necessary to address the conditions described in the report. For example, most people agree that we have to focus on fighting al Qaeda. The President's strategy steps up that fight, particularly in Anbar Province, which is the stronghold of the al Qaeda in Iraq, and where al Qaeda seeks a sanctuary.

The administration also agrees that we must accelerate the training of Iraqi security forces. And the President's strategy does this, with benchmarks to track the progress and bolster the size and effectiveness of Iraqi forces. And as we have said, the training and supporting of Iraqi troops will remain our military's essential and primary mission. But again, for the reconciliation to occur, and for that training in the end to be effective, we need to get control of the situation in Baghdad.

I think I will stop at that point -- I'll just say a couple other things I'd like to draw your attention to, in terms of the question I think you're going to have, which is, what is the marrying up or the match up between this intelligence judgments and the President's strategy. And let me just try to direct your attention to a couple things in that regard.

If you go to page three, it talks at the bottom of the page, it talks about a number of identifiable security and political -- what they call political triggering events, things that if they occurred, would severely convulse the Iraqi security environment, and result into a range of bad effects. And the point I would make here -- and they talk about mass sectarian killings, assassination of major religious or political leader, defection of the Sunnis from the government. The point here is, and what the President concluded from this is that the status quo is not stable. With the level of violence we have, particularly in Baghdad, it makes more likely that one of these triggering events that could collapse the government and the Iraqi security forces might occur.

And we had a rather chilling taste of that this week, with the actions and effort by a Shia extremist group to launch what appears to have been an attack in Najaf to kill the key clerical leaders of Shia in Najaf. If that would have occurred, it could have triggered exactly the kind of thing talked about in the NIE. And that's why the priority for the President is to get the level of violence down, to reduce the likelihood that one of these triggering events could actually occur.

So the NIE identifies a problem, derives a policy process which tries to develop a solution to that problem. Let me give you a second one, if I might.

We talked about the security forces and needing the support from the coalition forces and, of course, that is, indeed, the reason why, while the Iraqis are in the lead with the Baghdad security program, they have called for the support of coalition forces -- why the President thinks it's so important for the coalition to support them and give adequate forces in order to do that.

A third -- on page two, it talks about a number of identifiable developments that could help to reverse the negative trends in the current environment. And one of the -- on the list, the third on the list talks about a bottom up approach, "deputizing, resourcing and working more directly with neighborhood watch groups, and establishing grievance committees to mend relations at the local level." That's exactly one of the features that distinguishes the new approach of the President. It is not so Baghdad-centric, there's an effort to get out in the provinces and increase our presence in the provinces.

That's why the President has doubled the number of provincial reconstruction teams, and increased the number of State Department and other civilians who will be in the provinces to do not only local reconstruction, but also provide and provoke reconciliations among the communities at the local level, and to build governmental institutions at the local level. So we're going to try and help Iraqis build this democracy from the top down, and from the bottom up.

And finally, on the top of page three, there is a statement that says, "A key enabler of all these steps would be stronger Iraqi leadership." The President clearly agrees with that, and that's one of the reasons he's been very clear in his comments, both publically and privately to the current unity government that it is time for them to step up; that they need to take the lead on these issues, particularly Baghdad security, and success will depend on them doing so.

So that's by way of introduction, and I would be pleased to take your questions.

Q Mr. Hadley, the report also says, the term "civil war" accurately describes key elements of the Iraqi conflict. Is the President ready to embrace that term, as well?

MR. HADLEY: One of the things that is helpful -- and this is on page two -- is a statement that the intelligence community judges that the term "civil war" does not adequately capture the complexity of the conflict in Iraq. And we think that is right. And one of the things that's good about the NIE is it describes the complexity. Iraq right now is a number of different conflicts, and it talks in that paragraph about Shia-on-Shia violence, al Qaeda and Sunni insurgent attacks on coalition forces, criminally motivated violence. I would add one more, and I don't think the analysts would object, and that is efforts by al Qaeda not just to attack coalition forces, but to attack Shia civilians in order to provoke them to attack Sunnis and to encourage the sectarian violence that we've seen.

So I think the thing I would say is, we would agree with the description in that paragraph of the realities on the ground. Now, you get to the issue of labels. Labels are difficult. And of course, everyone is looking at the label of "civil war." Let me read to you what Iraqis say. As we've talked about before, Iraqis do not describe it as a civil war. And it's very interesting -- in a recent interview, the Iraqi Prime Minister* [sic], Abd al Madhi, had the following statement, which I thought was an interesting, different perspective on this issue. He said first, "I don't think we are in a civil war. We are in a war on civilians. That's what Abu Musab al Zarqawi was trying to do. That's what the insurgents are trying to do. Otherwise, what is the meaning of a car bomb in a university or market? You're against a society, against civilians. Or when Sunni militias attack, some Shia militias attack in retaliation. They are not attacking as one army against another, but they are attacking civilians from the other community. That's why I say," and this is Abd al Madhi's comment, "we are in a war against civilians, not a civil war."

And finally he says, "Secondly, the government is still powerful, still feared by the population. Whenever it issues a curfew it is respected all over Iraq. No country in a civil war respects the decision of a government. We have to go and decrease the sectarian violence; we have to go and protect people from car bombs and from insurgent acts that target civilians and institutions."

So what I would say -- let me just say, the description in the NIE of the situation on the ground and the variety of these challenges is real. And we agree with that. The issue of the level -- the issue of the label is one we're going to go back and forth on. What the President's job is, in view of that situation on the ground, to develop a policy and a strategy that has the prospect of success. That's what the policy challenge is, and that's what we think we've done.

Q Does it mean that the President does accept that civil war accurately describes key elements -- does he accept that?

MR. HADLEY: I think what the President does is he accepts the description of the key elements -- that is that there's a hardening of ethno-sectarian identities, a sea change in the character of the violence, ethno-sectarian mobilization, and population displacements. The facts are not in dispute, and they are what drove the policy. And the policy seeks to try and respond to those facts and come up with a strategy that will succeed. That's what our task is and that's what we've done.

Q About the sea change in the character of the violence that the report describes, all senior administration officials, when they're asked about the deterioration of security in Iraq, point back to the Samarra bombing as a key -- as the sea change, if you will. And they point to this changing nature of the violence, now the Iraqi-on-Iraqi sort of violence, not an insurgency against U.S. forces so much. But correct me if I'm wrong -- did not the administration intercept a letter from Zarqawi in 2005 that laid out his plans to foment this kind of sectarian violence? And if that's the case, why did something like the Samarra bombing, that kind of tactic come as such a surprise to this administration?

MR. HADLEY: I don't think it came as a surprise to us. This has been clear -- Zarqawi's strategy. It's one of the reasons why, for the last three years, a major priority for our forces in Iraq has been to go after al Qaeda and to go after their leadership, and to frustrate the strategy. And that's been a major focus of our activity on the ground, because we saw the danger it posed.

What we saw was a series of incidents of al Qaeda attacks trying to provoke a kind of Shia response. And for over two years plus, it failed, and the Shia community showed great restraint. I think what happened was, with the Samarra bombing, because it was an attack on a religious facility and because it came after that length of time, it caught the Iraqi community, in some sense, it was a trauma for the Iraqi community, in some sense.

And what we watched, in some sense, holding our breath, is what would happen. And in the short run the response was good. After about 24 hours, 48 hours, the Iraqi security forces stepped in and they were able to bring the violence down. And the Iraqi government did not splinter. So the security forces held together, the government held together. And that's why we said at the time, Iraqis have looked into the abyss and they've stepped back.

But what we found was, while the initial response was good, we began to see the kind of mobilization in the Shia community and the beginnings of retaliation of Shia on Sunni, and Sunni on Shia. And that is talked about very clearly in the NIE.

Q And that wasn't anticipated by the administration?

MR. HADLEY: We did, and we had two security plans, efforts -- because, of course, as you know, most of this is focused in Baghdad; about 80 percent of sectarian violence is within 30 miles of Baghdad. And we took two bites at that apple in terms of Iraq security plans, phase one, phase two. And the truth is, as we've said very clearly, they did not work. And it did not bring down the violence.

And what we've done with the Baghdad security plan that is now being -- beginning to be executed by the Iraqi government is a new approach that we believe learns from that prior experience and corrects the defects. It's an Iraqi plan; they're in the lead; different operational concept to bring security to the population of Baghdad, not just simply sweep through looking for bad guys, following on with economic assistance that arrives in time and promptly, and adequate forces -- U.S. and Iraqi -- and having those forces working in a configuration that would be more effective.

So that's the narrative of how we got here.

Q The President asked for patience to see that his plan will work. The NIE says that unless there's measurable progress in 12 to 18 months, then the security situation could deteriorate. Is that the same time frame that you all are looking at to see if this plan is going to work?

MR. HADLEY: Well, we'd obviously like the plan to work sooner, because the sooner we get the violence down, the sooner the Iraqis can move forward more effectively on the reconciliation, the sooner we can proceed in training the Iraqi security forces. So we would like it to occur as soon as we can. Nonetheless, as you've heard from General Petraeus and from General Casey in their testimony, we've got to be patient, it's going to take some time.

Q But are you not going to reassess the new strategy in 12 to 18 months?

MR. HADLEY: No, no, we're -- one of the advantages about the benchmarks that we have talked about and the President talked about is they are gauges for whether that strategy is succeeding, both narrowly, in terms of the Baghdad security plan, but also more broadly, because, as you know, some of those benchmarks involve the reconciliation effort. So we are going to try and monitor the progress and our response is going to be, if we don't see progress, we're going to be talking to the Iraqis and emphasize the importance that we, and they take the steps that they need to do.

So we're going to be monitoring this along the way. The Congress has made clear that they will be monitoring the situation as we go.

Q Could you clarify the CBO estimate in number of troops, support troops that might be going would be 21,500? Because now there seems to be a suggestion that it's an appreciable number more than 21,500 troops when you factor in support troops.

MR. HADLEY: Well, what the President focused on was what we needed to make the Baghdad security plan work, which was additional Iraqi brigades and additional American brigades. And so if you looked at his speech, what he talks about is, five brigades into Iraq and a 4,000 increase -- net increase in the forces in al Anbar to deal with al Qaeda. You run the numbers on though, it gets you somewhere north of 20,000. He was focusing on the combat element.

I've not seen the CBO study. I know DOD is looking at it. I don't know the assumptions. It's one thing to put combat units into an environment where there is no support, it's another to put them into an environment of 140,000 U.S. troops. So I can't give you a good answer to that question. What the President was focusing on is what we needed in terms of combat power. And I'm sure DOD will figure out what additional support, if any, is required. General Casey gave an initial answer on this yesterday. I'd really stand with his answer.

Q Let me just direct you, then, back to what -- the second graph here under key judgments. Could you clarify what your point was about -- the paragraph that says, "Nevertheless, even if violence is diminished, Iraqi leaders will be hard-pressed to achieve sustained political reconciliation" -- because I heard you as sort of saying this sort of fits in with the general approach of the administration. This seems to be, with the "nevertheless," even if the ISF is successful, there's still a great chance that Iraqi leaders will be unable to achieve sustained political reconciliation.

MR. HADLEY: I agree. I read it the same way you do. And I was doing a bit of a play on words, which probably I shouldn't have done. It makes it clear -- and that's why I wanted to emphasize it for completeness. Even if we get the violence down, the NIE says that the forces are going to be hard pressed to come forward with the reconciliation. We agree with that, but we think there is no alternative but to press them hard to do that reconciliation.

And Maliki agrees. And if you look at the program that the Iraqis are starting to talk about, they're talking about the need for a revision to the de-Baathification law, an oil law, constitutional amendments to address some of the issues that remain unresolved from the constitution.

Q But if you read this paragraph straight, it seems to me what's being suggested is the odds are against success.

MR. HADLEY: It's going to be hard, and the President made it very clear it's going to be hard, and there's no assurance for success. The case the President has made is, he's looked at all the alternatives, and the alternatives have little, if any, prospect for success, whether it's slow failure as I talked about, or fast failure. The President believes his strategy has a prospect for success. It's going to be hard. The NIE says that; the President has said that.

They agree, though, on two things: One, the consequences of failure give us every incentive to try to make this succeed. And secondly, if you look at the end of the key judgments, the last section, which talks about, in some sense, alternatives, what might happen if this fails, they are pretty grim. So I would say, yes, this is no assurance of success, but it is the only path that offers the prospect for success. And because the consequences of failure are so dire, and we all agree with that, we need, together with the Congress, to put every effort in towards achieving success.

Q Mr. Hadley, I want to go back to the term "civil war." The administration has really gone out of its way not to use that term, "civil war," in the same way that Don Rumsfeld wouldn't call it a "guerilla war" when it was, or an "insurgency" when it was. Why do you go out of your way not to use that word? The President goes out of his way, as well. You say labels are difficult, but is it not important -- certainly any military strategist will tell you it's important to know what kind of fight you're in. Can you call it a civil war, and why haven't you?

MR. HADLEY: We know what kind of fight we're in. We know the facts. That is described well in this NIE, and we have a strategy to deal with those facts and to try to succeed.

Q Is it a civil war?

MR. HADLEY: I will tell you what this NIE says.

Q I want to know why you avoid using that term.

MR. HADLEY: Because it's not an adequate description of the situation we find ourselves, as the intelligence community says. Intelligence judges "the term civil war does not adequately capture the complexities of the conflict in Iraq." And what we're doing is saying, if you're going to run policy, and if you're going to explain it to the American people, we need to get across the complexities of the situation we face in Iraq, and what is our strategy to deal with that. And simple labels don't do that. We're going to try and force everybody to get into the facts.

Q Can I do a follow-up on something else? Can you talk about accelerating the training of the Iraqi security forces? That has been done so many times before. How do you plan on accomplishing that, and particularly in 12 to 18 months? And I think the key judgments say they're not going to be able to do significant security for 12 to 18 months, during that period.

MR. HADLEY: No, no, that is not what the NIE says. You ought to be very clear about that. The NIE talks about the role of the Iraqi security forces in bringing security to Baghdad. And, indeed, the strategy -- which is the strategy they have developed -- has the Iraqi security forces very much in the lead.

One of the things they've done in the operational concept is to try and make up for some of the weaknesses in the security forces. Everybody knows that the police has been a problem of effectiveness and of infiltration by sectarian groups. So the concept in Baghdad is to have nine districts, to have a military or national police commander head of each district, and within that district the army -- the Iraqi army, the Iraqi national police and the local police are all going to be working together out of various police stations under unity of command. We think that, plus the presence of a U.S. battalion in each of those districts, will stiffen those forces and make them more effective.

We also think that if this succeeds -- and we believe it will, General Petraeus believes it will, General Casey believes it will -- it is the best kind of training for Iraqi security forces. They've had the classroom training, they've been equipped; now this is the on-the-job training phase. And we think if and, we believe, when they succeed in Baghdad, the result will be a more effective Iraqi security force in Baghdad.

Now, separate from that, we will continue to do the training countrywide that we've been doing. The Iraqis have made clear they are going to put greater reliance on the Iraqi army. Prime Minister Maliki has talked about expanding the Iraqi army. There are additional equipment needs they have; we are addressing those. And also, as you know, separate and outside of Baghdad, we will also be embedding our forces, doing more embedding with Iraqi units.

So this is both, if you will, train and fight, recognizing that, in some sense, for security forces, fighting is a good complement to training. That's what we're trying to do. On the acceleration, there is a plan. Prime Minister Maliki has developed and it and shown the benchmarks. That's the essence.

Q If this falls apart, and as you say, these catastrophic events, if they happen --

MR. HADLEY: Can we get on to some other people?

Q Yes, just one last one. If this falls apart -- and they talk about this in the NIE, that there would be mass chaos, there would be sectarian violence -- do we have a plan on how we would operate in there if that happened?

MR. HADLEY: As you would expect, we are developing all kinds of contingency plans. But the best -- one of the things you should conclude from this NIE is the best plan is to have this plan succeed.

Q The report says that outside actors, including Iran, are not likely to be a major driver of violence. Given that, is it possible the President has been overstating the danger posed by Iran in Iraq?

MR. HADLEY: I think it's important, actually, to take a look at that language. It's on page three of the key judgments. And it says, as Steve says, that "Iraq's neighbors influence and are influenced by events within Iraq, but the involvement of those outside actors is not likely to be a major driver of violence or the prospects for stability, in light of the sectarian character of this."

I would point your attention to the sentence that follows -- "Nonetheless, Iranian lethal support for select groups of Iraqi Shia militants clearly intensifies the conflict in Iraq. Syria continues to provide safe haven for expatriate Iraqi Baathists, and to take less than adequate measures to stop the flow of foreign jihadists in Iraq."

The President has talked about the concerns about Iranian activity in Iraq, first and foremost, because it puts our troops at risk and because it's resulting in the death of Iraqis. That is something that we need to address.

The other thing I think that this does not adequately reflect, particularly in the next paragraph, that talks about Sunni concerns with Iran -- there's a suggestion almost that the concern of Sunni nations for Iran's activities comes out of their assessments of what's happening in Iraq. But, of course, if you talk to any of those leaders, their concerns about Iran go much beyond an Iranian role in Iraq. They are concerned about what Iran is doing to destabilize the democratically elected Siniora government in Lebanon. They're concerned about Iranian training and support for Hamas that is making it difficult for President Abbas to move forward with Prime Minister Olmert to try and find a way forward to a peace. And of course, there's concern in the region about a nuclear-armed Iran because of the current Iran can cause this much disruption, the concern is with a nuclear Iran.

So I think if there's one thing in the key judgments, I think that does not adequately put the regional context around Iran. I'm not criticizing the NIE. I'm sure if the analysts were here they would agree with what I'm saying, because I'm getting that from their intelligence. And I think -- I'm quite confident that in the bulk of the document, those issues are adequately addressed.

Q Do you think the threat from Iran is more grave than the report reflects?

MR. HADLEY: No. I think the report -- if you read it in toto, and particularly if you read what I'm sure is in the back elaborating the things I've been saying, is a pretty good judgment. And the other thing is to say we're very much concerned, first and foremost from force protection, the Iraqis have also been talking increasingly about the unconstructive role that Iran has been playing. So it's not just us.

Q Going back to the civil war, the use of that term, is it fair to say, or accurate to say that it is now beyond a civil war, because that would imply that you have the elements of a civil war and yet there is -- there are additional factors?

MR. HADLEY: I think I can't do better than the description of the facts on the ground that is in the NIE with which we agree, and that says this is a complex, difficult situation. And that's what it is.

Q Can I also ask you about -- the report talks about the consequences of rapidly withdrawing coalition forces.


Q But what about the option of adding forces, as the President has now chosen to do? Was that part of their examination of the situation on the ground, the possibility of the consequences of adding forces?

MR. HADLEY: We certainly talked about that in the review that was developed -- that produced this strategy that the President adopted, and of course, as I said, the intelligence community participated in that review. I thought it's interesting -- in the earlier portion of it, they do talk about the need for continuing involvement of coalition forces if this is going to succeed. The NIE key judgments is very clear about that. And as they talk about the need to get control of security situations, they talk about strengthen Iraqi security forces, which we're trying to do, and supported by coalition forces. So I think the intelligence community recognizes that for this to succeed, it is going to require those two things -- more effective Iraqi security forces and coalition support.

Yes, sir.

Q But it doesn't talk about level, the number of forces.

MR. HADLEY: No, the President has talked about the number in the speeches that he's given.

Q Steve, in 2002 and 2003, in the run-up to the Iraq war, the administration made statements that were obviously not borne by facts subsequently. And it later came out that caveats from the intelligence community, caveats from Energy Department analysts, those were left out of public statements of Vice President Cheney, the President, others in the administration. Now when it comes to Iran, you've been saying for months that Iran is a key driver of violence in Iraq. You've said there is evidence tying Iran to attacks in Iraq. You've said that you'd make that evidence public. That supposed to be made public on the 31st.

MR. HADLEY: Right.

Q It wasn't.

MR. HADLEY: That's correct.

Q Now you have this report saying it contributes in some way, so does Syria, so do other factors, but it is not, in and of itself, causing the violence, nor would the violence stop if Iranian influence stopped.

MR. HADLEY: I didn't read it that way.

Q You see it on the second --

MR. HADLEY: "Iraq's neighbors influence and are influenced by events within Iraq. But the involvement of these outside -- is not likely to be a major driver of violence or the prospect for stability because of the self-sustaining character of Iraq's internal sectarian dynamics."

We need to get control of that. Now, to the extent Iraqi support -- sorry, Iranian support is going to extremist groups that are participating in that sectarian violence, it is obviously a factor. And as we talked about it more broadly, they are, of course, a disruptive factor in the region.

The reason we put the intelligence briefing on hold was really two reasons. One, we thought we'd better get the NIE out so people could see the full context, which you now can. And secondly, quite frankly, we want to make sure that if we put out intelligence, the intelligence community and MNFI can stand behind it, because we are sensitive to try and put out the facts as accurately as we can.

Q When will that be, that briefing?

MR. HADLEY: When this process gets done, the briefing will be -- will come out. I don't think there's a timetable on this point since it's slipped a couple times. We want to get the work done so that we can get people a firm date and that we won't have to change.

Q Even though it was already scheduled and officials in Baghdad gave a date, they gave a time, and in some cases, they gave a place?

MR. HADLEY: Correct.

Q And now it's been pushed back. Can we conclude anything from that other than people looked at the intelligence that was set to offered and said, this is not good enough?

MR. HADLEY: No, I wouldn't --

Q Does that mean there was a willingness to overstate it?

MR. HADLEY: The truth is, quite frankly, we thought the briefing overstated. And we sent it back to get it narrowed and focused on the facts. And that's not a criticism of anybody. It was, in some sense, an attempt to do and address some of the issues in the NIE in a briefing on intelligence of Iranian activity in Iraq. And we thought, hey, why are we doing this? Let's get the NIE out, the coordinated intelligence judgment of the intelligence community. And then with that as context, get a briefing that is focused on and one that we're confident everyone can stand behind.

Q Mr. Hadley, given the track record on weapons of mass destruction, and recent events that have alleged that intelligence has been cherry-picked and pulled selectively, how can the public be assured that intelligence is driving the policy and not the other way around, that it's being tailored to what the President and the Vice President want the policy to be?

MR. HADLEY: By putting out things like this, the coordinated judgment of the intelligence community, so you can see the intelligence on which the policy was based.

Q How can we be assured that this wasn't written for that purpose?

MR. HADLEY: Well, you can talk to the intelligence community. This came from the NIC -- the National Intelligence Council. And it came out of that process. It was not a result of a policy process. It was a result of the intelligence process. And there was no effort to put a policy spin on that by the White House. This is a thing we got roughly a day or two before you.

One last question, ma'am.

Q Can I clarify the use in this document of the words Iraqi leaders and leadership? There's the sentence here, "Iraqi leaders will be hard pressed to achieve sustained political reconciliation . . . the absence of unifying leaders limits prospects for reconciliation." The President has made a bet that Prime Minister Maliki is a leader who can act more strongly. Does the full document from the intelligence community agree with him on that? Or do they believe that in the 12 to 18 months that they're assessing that Prime Minister Maliki will not be a unifying leader?

MR. HADLEY: I think what I read from the key judgments -- and you'll have -- in some sense, you have to ask the analysts. What I would say is it's a recognition that, one, we have to start from the proposition it is a unity government. Prime Minister Maliki is there, but he has in his government representatives of the Kurdish community, the Shia community, the Sunni community, and other communities in Iraq. And the President, while he has good conversations with Prime Minister Maliki, he's also talking about -- with Vice President Hashimi, he's talking with President Talabani, he's talking with Abdul Aziz al Hakim, one of the leaders of the Shia community.

So he is basically calling on this unity government that was the creation of Iraqis, that now is the time to step forward. That's what the NIE says, that's what the President believes, and that's what he's been telling the Iraqis.

Q Does the complete document assess Prime Minister Maliki's activities and performance?

MR. HADLEY: You've got me in a problem, because the complete document is classified, so I can't talk to you about it. What I can talk to you about is the unclassified document that we released today.

Q Does it address it? That's all we want to know.

MR. HADLEY: The document is a long document, 90 pages. It addresses a whole bunch of things.

Q Is that a "yes"?

MR. HADLEY: No, I didn't say, yes. I'm saying, really, you've got me in a difficult situation. You're asking me to talk about a classified document which is now classified.

Q -- because you, yourself, assessed that in your memo to the President.

MR. HADLEY: Right.

Q You did it personally, so I can only assume that they would have followed up in the same way you did.

MR. HADLEY: And I think what you get from the NIE here, clearly, is this government needs to step up. That's the conclusion of the memo, that's the conclusion of the President in his strategy, and that is, I think, supported by this NIE, which says that is going to be a crucial aspect of success.

Thanks very much.

END 12:23 P.M. EST

* Deputy President

Posted: Feb 2 2007, 03:03 PM

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For Immediate Release
February 2, 2007

Intergovernmental Panel on Climate Change Finalizes Report
Office of Science and Technology Policy
Executive Office of the President
Washington, DC

Office of Science and Technology Policy
In Focus: Environment

The United States joined 112 other nations in finalizing and approving a landmark climate change science report today in Paris, France. Working Group I of the Intergovernmental Panel on Climate Change (IPCC) acted to finalize its contribution to the IPCC's Fourth Assessment Report. The Fourth Assessment Report, consisting of three Working Group contributions and a Synthesis Report, will be released in the fall. The Working Group I portion of the Assessment Report released today represents a comprehensive assessment of the most recent state of knowledge of the physical science of climate change. A Summary for Policymakers, which is a condensed summary of the Working Group I assessment was approved on a line-by line basis by the participating nations over this past week and released in Paris today. The last IPCC assessment of the physical science aspects of climate change was issued in 2001.

"This Summary for Policymakers captures and summarizes the current state of climate science research and will serve as a valuable source of information for policymakers," said Dr. Sharon Hays, the leader of the U.S. delegation at the meeting and Associate Director/Deputy Director for Science at the White House Office of Science and Technology Policy. "It reflects the sizeable and robust body of knowledge regarding the physical science of climate change, including the finding that the Earth is warming and that human activities have very likely caused most of the warming of the last 50 years."

The United States has played a leading role in advancing climate science and observations. Since 2001, the President has devoted nearly $29 billion to climate-related science, technology, international assistance, and incentive programs. Since 2002, the President has spent nearly $9 billion on climate science research -leading the world with unparalleled financial commitment.

These investments have played a key role in enabling the research results summarized in the IPCC Working Group I report. The U.S. delegation to the Working Group I meeting included climate science experts from the National Aeronautics and Space Administration (NASA), the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA), and the U.S. Department of State. The delegation's participation in the meeting followed significant U.S. involvement in the generation of the report, as numerous U.S. climate scientists were involved in its drafting and expert review. In addition, a NOAA climate expert, Dr. Susan Solomon, a senior scientist at the National Oceanic and Atmospheric Administration's Earth System Research Laboratory in Boulder, Colorado served as co-chair of Working Group I.

The IPCC was established under the auspices of the United Nations Environmental Programme and the World Meteorological Organization to periodically undertake comprehensive and objective assessments of scientific and technical aspects of climate change. The first IPCC Assessment Report was completed in 1990, the second in 1995, and the third in 2001. Today's Working Group I summary represents the first of the current series of three reports, and is focused on the physical science basis of climate change. IPCC's Working Group II meets in Brussels in April to issue a Summary for Policy Makers on climate change impacts, adaptation and vulnerability issues. Working Group III will meet in Bangkok in May to consider a summary report on technical aspects of climate change actions.

IPCC reports are drafted and reviewed by several hundred scientists who are leading experts in their fields from around the world, and contain extensive scientific and technical information and analysis. The drafts go through both expert and government reviews. U.S. government scientists led the U.S. review of the draft, and provided an opportunity through the Federal Register for citizens in the United States to provide expert comments in preparation for this review.

Posted: Feb 5 2007, 04:59 PM

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Press Briefing by OMB Director Rob Portman on the President's Fiscal Year 2008 Budget
Room 450
Eisenhower Executive Office Building

12:04 P.M. EST

DIRECTOR PORTMAN: Well, thank you all for braving the cold and joining us this morning. As you probably know, earlier today the President transmitted to the Congress the FY 2008 five-year budget. It contains good news for the American people. It includes a balanced budget over five years, while meeting the nation's priorities.

It's a credible and more transparent budget. Instead of painting a rosy scenario on revenues to get to balance, we take a cautious approach. We've shown full war costs for the rest of this administration and some of 2009. We've also included these war costs as war supplementals as part of the budget this year, in a more transparent, timely and comprehensive way than ever before. And by the way, all of those war costs are included in our balanced budget calculations.

We changed our projections from past years to include a slight increase in non-security discretionary spending, consistent with what Congress and the President have actually enacted for the past three years.

In our budget we also begin to address our biggest fiscal challenge, the unsustainable growth in entitlement programs such as Medicare, Medicaid and Social Security. Although the fiscal house is getting in order short-term, frankly these looming challenges are the biggest budget problem we face. We take a good first step by proposing sensible reforms, primarily in Medicare, that are less than a 1 percent deduction in the annual rate of growth. Instead of Medicare increasing 7.4 percent per year over the next 10 years, for instance, it would increase 6.7 percent.

While restraining growth overall in spending, the President's budget also provides new resources for key priorities. It increases funding for our national security to combat terrorism and to protect the homeland. It includes new policies to address critical issues that concern America's families, including educating their children, access to affordable health care, and reducing energy costs.

Over the past two years we have worked with Congress to reduce the deficit by $165 billion. We've been able to make progress on this for two primary reasons: first, the strong and growing economy; and second, a little better restraint of non-security spending. It is exactly these elements -- a solid economy and restraint on spending -- that will enable us to achieve a balanced budget.

As you see from this first chart, our budget reduces deficits every year and results in a surplus in 2012. In FY07, we project that deficit will decline to $244 billion, a reduction of $95 billion since our last estimate in July 2006; $244 billion is the difference between total spending of just under $2.8 trillion, and total receipts of just over $2.5 trillion.

The deficit in 2008 falls again. This projected deficit is 1.6 percent, as a percent of our economy, which is really the key measurement, because it shows the impact of government deficits on economic activity. The projected FY08 deficit is lower than 18 of the past 25 years as a percent of our economy. The deficit then continues to decline each year, both in nominal terms and as a percent of the economy until we reach a budget surplus of $61 billion in 2012.

You'll recall that three years ago, President Bush established the goal of cutting the federal budget deficit by half in five years from its projected peak in 2004. At the time, many expressed skepticism this goal could be met. But we achieved the goal last September, three years ahead of schedule. We'll now build on that success and work with Congress to balance the budget within five years.

Again, getting the balance requires keeping the economy strong and sensible and realistic spending restraint. The President's budget is able to achieve both of these goals while funding critical priorities, including our national security.

To keep our economy vibrant, we continue the pro-growth policies that have helped fuel the robust economy and the increased revenues. The 2008 budget continues to support growth, innovation and investment by making permanent the President's tax relief which would otherwise expire in 2010.

In addition to tax policy, the budget will also strengthen our ability to compete in the global economy. It advances the American Competitiveness Initiative to increase our investment in critical basic research, ensures the United States continues to lead the world in innovation, and provides American children with a stronger foundation in math and science. And it will promote the continued opening of new export markets for America's farmers, workers, and service providers.

As you can see from this next chart, since the tax relief took full effect in 2003, we've seen a strong and steady growth in the economy. We've seen steady job growth, with the creation of 7.4 million new jobs since 2003. We've also seen a pretty dramatic increase in business investment during that period. Productivity is strong, paychecks are growing, with real hourly wages growing 1.7 percent in 2006, which is above the average of the late 1990s.

Unemployment remains low at 4.6 percent. Gas prices are down. Inflation remains low. Interest rates have moderated. And the stock market has reached new highs, showing that investors have confidence in America's economic future. And investors should be optimistic. In the most recent quarter, when there was a lot of talk of a slowdown, real GDP grew by a very strong 3.5 percent. The U.S. economy has now grown faster than the G7 industrialized countries for the past four quarters, and remains the envy of the world, in part because of its resilience in the face of some very significant headwinds. A healthy economy is a testament to the work ethic and ingenuity of the American people, but also to the effectiveness of pro-growth policies, including the tax relief.

This chart shows that after 2003 the economy not only strengthened, but federal revenues also surged, hitting record levels in the past two years. The President's 2008 budget uses five-year economic projections that are in line with forecasts by outside experts. As you'll see from this chart, we assume GDP growth will average about 3 percent over the budget window. This closely tracks the forecast of the blue chip forecasters. This year, our 2.7 percent growth you see for 2007 is now below most outside forecasts and market expectations.

As you'll see from this next chart, with solid economic growth, total receipts for 2006 were slightly above the historical average of 18.3 percent as a share of the economy, and we project receipts remain at this historical average for much of the five-year period, in fact, slightly above the historical average.

We have what I would term a cautious revenue forecast for this fiscal year and going forward. We forecast revenue growth will be 5.5 percent in fiscal year 2007 and average 5.4 percent through 2012. This is below the 40-year average of 7.6 percent and well below the dramatic 11.8 percent and 14.5 percent revenue growth we've seen over the last two fiscal years. In fact, it's below the actual first quarter FY07 revenue increase of 8.2 percent over the same period last year.

As in the past, our revenue projections are produced by the career professionals at the Office of Tax Analysis at the U.S. Department of Treasury. And I will say this morning, as was the case in the past two years, we may well find that our revenue projections are not rosy, but pessimistic.

Even with the a conscious forecast on revenues, this budget demonstrates we can balance by 2012 without raising taxes. In addition, we have plans to more effectively and efficiently collect the taxes owed, help to close the tax gap. Our budget helps close the tax gap in two ways. First, we improve the effectiveness of IRS activities with a $410 million package of new initiatives to enhance enforcement and taxpayer service, and to improve IRS's technology. Second, we include in the budget 16 carefully targeted tax law changes that promote compliance while maintaining an important balance between taxpayers and their government. These tax law changes alone are estimated to raise $29 billion over the next 10 years out of the tax gap.

The success of our growing economy following the enactment of the President's tax relief also underscores exactly why it's important to balance the budget without raising taxes, as others have suggested. By raising taxes, we could put the growth of jobs and our economy at risk. Now is the time instead to focus our energy on spending restraint.

To keep spending under control, our budget provides realistic spending restraint for the annually appropriated day-to-day government spending that isn't focused on national security. It strengthens our efforts to better manage taxpayer resources, and it proposes significant budget reforms to eliminate wasteful and unnecessary spending. And as noted earlier, it also takes an important first step in implementing changes needed to address our long-term challenge, the unsustainable growth in entitlement programs.

The 2008 budget proposes to hold the rate of growth for non-security discretionary spending to 1 percent, well below the rate of inflation. We believe this is both fiscally prudent and realistic. As noted earlier, Congress and the President have done a better job restraining spending in this area over the past few years. In fact, the average growth in this area of non-security spending has been about 1.2 percent for the past three years, including spending growth in the roughly 1 percent range in this long-term continuing resolution the House just passed.

We believe this level of non-security discretionary spending is not only what we've been able to do the last three years, but it's adequate to fund the nation's priorities. One way to judge this restraint is to look at our total government spending as a percent of the economy. We're moving in the right direction. While tax revenues as a percent of the economy are about 18.3 percent, total spending drops from 20.2 percent of the economy in FY 2007 to 18.3 percent in 2012.

One of the ways we're achieving smart spending restraint is by closely examining each federal program to determine if it's a priority, whether it's effective in producing the intended results. Based on these thorough reviews, the budget proposes to terminate or reduce 141 discretionary spending programs, for a savings of $12 billion in 2008. These reforms will help us reduce the deficit and channel resources to higher priorities and more effective programs.

We're able to make these judgments of how to spend taxpayer dollars more wisely in part with tools that we've developed through the President's management agenda. Last year, to ensure greater government accountability, we launched a new website -- here it is -- ExpectMore.gov. The site includes information for taxpayers, and the programs have been assessed for their effectiveness, using the program assessment rating tool, commonly known as "the part." With this website, Congress and the public now have an unprecedented view into which programs work, which do not, and what they're doing to try to improve. It's another way we're providing greater transparency, holding ourselves accountable and demanding results.

With the new and improved version of this website, launched today, we now have program-level information about the performance of nearly 1,000 federal programs, representing 96 percent of government and $2.5 trillion of federal spending. I encourage you to go online and check it out.

With our changes to the functionality, users can now more easily search for programs by their rating or topic, or conduct a key word search. They can also look broadly at how each agency's programs are performing and find detailed evidence to support the program's rating. I want a nod to Clay Johnson, who is here with us this morning, the Deputy Director of OMB for Management, for his good work in leading the charge in the President's management agenda and on launching ExpectMore.gov.

The President's 2008 budget also outlines a comprehensive series of budget reforms that will improve fiscal restraint, transparency, and accountability in government spending. There's been a lot of discussion about earmarks, provisions added by Congress that direct funding to specific recipients or locations without being subject to competition or merit-based selection processes.

Often, these earmarks are not subject to adequate legislative or public scrutiny, and they often lead to wasteful federal spending. Earmarks have grown dramatically, as you know. They've nearly tripled in the last decade. And that's why the President has outlined three key reforms: First, full disclosure of all earmarks; second, putting earmarks in actual legislative language rather than a report language so they can actually get voted on; and third, cutting the number and amount of money provided in earmarks by half by the end of this year.

The President has also called on Congress to enact a legislative line-item veto. This would be a powerful tool. It complements the earmark reforms to help the executive and legislative branches work together to strike unwarranted earmarks and other wasteful and unnecessary spending from the budget. Both the House and the Senate have now demonstrated by a majority vote that each chamber supports this legislation. It's time to enact this sensible budget reform.

Our budget also shows how we can work with Congress to achieve a balanced budget by 2012 by dealing with the entitlement issue. Accomplishing a balance would be short-lived without addressing our long-term budgetary challenge, which is the unsustainable growth in these important programs -- Medicare, Medicaid and Social Security.

As you can see from this chart, mandatory spending is overwhelming the rest of the budget. In the space of four decades, mandatory spending -- also called entitlement spending -- has grown from 26 percent of the budget in 1962 to 53 percent of the budget by 2006, and it's growing. As this next chart shows, the current trends are simply not sustainable. Under current law, we estimate that by 2040, as you'll see on this bar chart, spending on these three important programs alone will crowd out all other spending -- no defense spending, no education spending, no homeland security spending -- unless we are willing to make the necessary reforms.

It seems to me there's now near universal and bipartisan agreement that the unchecked growth of these programs presents real long-term threats to beneficiaries, to our federal budget, to our economy. The choices without reform are pretty stark: massive benefit cuts, enormous deficits, or huge tax increases. We should not leave these problems for our children and grandchildren to solve. We now face a $32 trillion unfunded obligation in Medicare over the 75-year horizon.

The balanced budget is important in part because it better positions our country to address these looming fiscal challenges, but our five-year budget proposal also makes an important down payment towards sensible reform of mandatory spending, reducing spending growth by $96 billion over five years. These reforms are primarily in the Medicare program, but also in Medicaid and other programs. The proposals that we are submitting today are very similar in character to what this administration and the prior administration have offered in the past.

To put the reforms in context, you can see from this next chart the size of our budget proposal is considerably smaller than the savings in the balanced budget agreement of 1997 when I was in Congress, and the last time that Congress attempted to balance the budget. Although an important first step, the savings in this proposal would only reduce the unsustainable annual growth rates of mandatory spending by less than one percentage point. Specifically, again, over 10 years, the annual growth of Medicare would be reduced from 7.4 percent to 6.7 percent. However, these proposals do deliver more savings over time. The changes we have proposed to Medicare would reduce the unfunded obligation of the program by almost 25 percent, or $8 trillion, over the 75-year horizon.

Frankly, under the budget we have proposed, we can achieve balance within the five-year window without making any of these mandatory savings changes. But we would only be digging a deeper hole by ignoring it for another year. Balance is not coming at the expense of our nation's commitment to seniors and low-income Americans; quite the opposite. We must begin the reform of these programs now in order to protect those commitments. Addressing entitlement spending is the right thing to do because small changes now can have a big impact later. I urge Congress to take a careful look at these sensible reforms.

As we restrain spending, we're investing in our nation's highest priorities: combating terrorism, protecting the homeland, and addressing pocketbook issues that affect the standard of living for America's families.

The 2008 budget supports our troops fighting terrorism abroad, strengthens our military for the future, supports our efforts on the diplomatic front, and protects our homeland from attack. It invests substantial resources to maintain high levels of military readiness and to continue the transformation of our military to meet the new threats of the 21st century.

I want to make this point very clear, because it's often misunderstood: The cost of the war is reflected in the administration's deficit projections. In fact, there has been a $165 billion decrease in our deficit over the past two years, and that includes all of the war costs that we've incurred during that time.

As noted earlier, the administration supports greater transparency and accountability. And this budget improves the timeliness and specificity of the information provided to Congress and to the American public about the cost of the war.

With the 2008 budget, the administration goes further than we have in the past to show the full cost of the war

-- Iraq, Afghanistan and the global war on terror, generally -- for the rest of the President's term. We are providing our requests for the full cost of the war in both FY 2007 and 2008, and for the first time, including account-level detail and justifications. Specifically we're requesting additional resources of $99 billion for FY 2007 to support our troops, $145 billion for 2008, and an allowance of $50 billion for anticipated war costs in 2009.

The administration welcomes oversight of its war spending, and we hope these details will help Congress more fully understand our war-related request. This is our good-faith effort to be as transparent as possible in what we anticipate the needs will be as far out as we can possibly and reasonably project.

The President's budget also addresses three key issues that are on the minds of many American families: the quality and cost of their kid's education, access to affordable health care, and our nation's dependence on foreign sources of energy from unstable parts of the world.

Regarding our schools, No Child Left Behind is already working to achieve the goal of all students performing at or above grade level in reading and math by 2014. It's raised student achievement for millions of children in schools across our country. The 2008 budget directs more funding to high schools to better prepare our students for college or the work force. It offers new school choice options, so children in low-performing schools can have a chance to attend a school where they can learn and succeed. To help low-income families afford college, the 2008 budget substantially increases the Pell grant maximum awards.

The 2008 budget also improves America's access to affordable health care through a number of proposals. It proposes a significant change in the tax treatment of health care to expand coverage and bring greater fairness to the system. With more transparency and competition, it will also slow the rate of growth of health care costs, all of which will help reduce the number of uninsured Americans.

The budget also provides for an affordable health care initiative with the states, improves access to health care by allowing small businesses and civic and community groups to band together to leverage their bargaining power, and it helps reduce frivolous lawsuits that increase patient's costs.

The budget includes a number of proposals to increase our energy security, while improving our environment. As noted in the State of the Union speech, the President is proposing to increase the current standards for alternative fuels use, and for fuel economy in order to cut our domestic gasoline consumption by 20 percent over the next 10 years, thereby reducing projected air pollution, and projected CO2 emissions.

The budget also continues the Advanced Energy Initiative to make alternative sources of fuel and electrical energy -- like cellulosic, hydrogen, solar, nuclear, and clean coal more cost-competitive.

And in a continued effort to preserve our environment and national treasures, we are proposing today an exciting new plan, called the National Parks Centennial Initiative. This new program will provide up to $3 billion over the next 10 years in new federal and private spending to help achieve new levels of excellence in our national parks.

The budget shows that we can achieve balance by keeping the economy strong and by imposing realistic spending restraint, while investing in our nation's priorities. We are committed to the hard work ahead, to ensure that our fiscal house is in order, for the near-term and for the longer-term. I am optimistic we can do it across party lines, as the American people expect and deserve.

I've just outlined the broad structure of the President's budget and touched on some of the key priorities. Greater detail on every aspect of this budget is available online. If you go to our website, www.omb.gov, you will find lots of detail. In the meantime, I'm happy to try to answer any questions you might have.

Q Why did you decide to switch and put the war spending in the main budget, as opposed to the supplemental? What was your thinking in previous years, and how does that thinking change this year, and why?

DIRECTOR PORTMAN: Thanks for the question. Let me clarify what we've done first. The war spending continues to be supplemental. It is supplemental spending. It is not in the base spending of the Department of Defense or the Department of State. And I think that's appropriate; otherwise, you'd be building into the base very large numbers that, frankly, would be difficult to extract when the war costs do begin to go down, which we all expect to happen and we all hope happens.

However, in the past, we have put our budget forward and then later submitted a supplemental for the year in question -- in other words, our 2007 budget had 2006 war costs a few weeks later provided in a supplemental, without the kinds of justifications that members of Congress have been seeking. So the two big differences are, one, we are moving the supplemental spending request into the budget. Literally a separate chapter of the budget will be supplemental war spending. And second, we're providing a lot more detail, including all of the justifications up front. We are also going out another year, so we're providing full war costs not just for '07, but for '08. And then additionally, we are adding a supplemental amount of $50 billion for '09.

Why did we decide to do it? Because we heard loud and clear from Congress that they were seeking more transparency and more and better information sooner, so they could conduct appropriate oversight. And so we've tried to be responsive to that concern.

There's a balance here, because as you provide more and more information, further and further out, it's very difficult to predict what those costs will be. And you can imagine that our war planners had a difficult time telling the department of -- Management and Budget and also telling the Congress what the costs will be in fiscal year 2008. Much of that spending won't occur for 18 months or two years. On the other hand, we've tried to achieve this balance where we're providing as much information as we can to go beyond that. To provide information for further years I think would be very unwise because it would be very unreliable information that could be misleading. But that's the balance that we tried to achieve, and that's why we changed our approach this year.

Q Why the $50 billion figure in '09? Is that just a place holder, or it's something that's going to happen that's going to cut the war costs by $95 billion?

DIRECTOR PORTMAN: I think we call it an allowance, and it's a notion that we believe there will still be war costs in 2009. We have no idea what those costs will be.

Q But why so small?

DIRECTOR PORTMAN: Well, again -- interesting that you say it's so small. Others have said these war costs are large. What we're trying to do is to show as much of the war costs as possible, as reasonable, as practical. And that's why we're showing full war costs for '07, for '08, and then for '09, we really don't know what the war costs will be, but we think there will be war costs. So we call it an allowance. You called it a place holder. That sounds pretty good. That's more or less what that is for '09.

Q -- in '08 you're approaching something like $700 billion with the war -- can you speak a little bit to what that combination of defense and war spending is going to do to the budget --

DIRECTOR PORTMAN: It's a good question, and I do want to make that clear that we're not just providing these supplemental spending requests; we're also providing, in the actual budget for '08, an increase in the Department of Defense base spending. That increase will be approximately 11 percent from 2007. It's a substantial increase. As you will see, it focuses directly on the issues. We've heard from the military on -- and from members of Congress on both sides of the aisle, and regardless of their opinion about the ongoing military operations in Iraq, and that is readiness.

We have, as you know, an increase in troop strength in the budget for the five-year period. Beginning in '08, we also have increases in procurement, equipment, training. And so this is to be responsive to the concerns that the military has expressed. And again, you will find, in the halls of Congress on both sides of the aisle, there is -- has been a concern about readiness. We directly address this in the budget, both in the supplemental with regard to the war costs, and significant reset or reconstitution funding there, particularly for equipment that's been subject to wear-and-tear, but also in our base funding for the Department of Defense.

I would also make the point that although this is a substantial commitment to our military and to our troops, it is all included in the numbers you saw earlier, which show declining deficits every year and a balanced budget in the fifth year.

Q If the situation with the entitlements is so critical, than why not accept some tax increases as a way to get the Democrats to go along with spending reforms?

DIRECTOR PORTMAN: Well, the entitlement situation is critical. And, again, the President, by submitting this budget, only takes a first step toward addressing it. But I think it will be interesting to see how this first step is responded to. So far, in my conversations with Democrats and Republicans about the proposal, I've gotten a sense that although there are some immediate negative response that you might predict, there's also a lot of response that says, let's take a look at this, on both sides of the aisle. And so I think this will be an important test to see whether we can move beyond talking about sitting down and move beyond talking about the need to discuss reform of these important programs, to what are some of the solutions. And, clearly, because Medicare is the program that has the largest unfunded obligation -- I mentioned $32 trillion over the 75-year period -- this seems to us to be a good place to start.

In terms of the discussions that the President has talked about, particularly on Social Security, but also on entitlements generally, he's made clear that there will be no preconditions; that all sides should come together and we can talk about these issues, and that there would be no preconditions on our side, nor should there be on the other side. And I think this is exactly the way we must proceed -- it's the only way to proceed.

So to answer your question, I guess I would say, the President is very interested in addressing these issues. He's shown great political courage, and certainly has not shrunk from the challenge of Social Security over the last few years. And he wants to continue to try to work with Congress to address that issue, but also the larger problem of mandatory and entitlement spending.

Q Are there any specific places where he's willing to soften his stance, any compromise areas?

DIRECTOR PORTMAN: Well, by saying there are no preconditions and we should all come to the table and talk, that was a change in position. And by putting into the budget some specific ideas, the President is, again, taking the next step, which is not just the need to discuss, but the need to actually start to put solutions on the table.

Q Mr. Portman, you said there are no preconditions. But in the Cabinet meeting a couple hours ago, the President said no tax increases. That sounds like a precondition.

DIRECTOR PORTMAN: What the President said was, that we can balance the budget in five years without increasing taxes, and that, in fact, to increase taxes would put at risk the economy that's generated the revenues that are largely responsible for putting us in a better fiscal condition. So he was very explicit about that issue, but it was in relation to this proposal.

Q So he would welcome tax increases beyond those five years?

DIRECTOR PORTMAN: No, that's not what he said. I'm just telling you that -- unless I missed something -- I was sitting next to him at that Cabinet meeting -- what he was talking about there was his strong belief that it is incumbent upon us to keep the tax relief in place. It's encouraging innovation, encouraging investment. It's been very responsible, as we saw on those charts, since 2003 for the growth in jobs, the growth in productivity, and the ability for us to see these increased revenues. And it would be exactly the wrong thing to do to put the economy at risk and raise taxes on the American people at this point.

Instead, what we should be doing, restraining spending a little bit better, which is in this budget, and continuing with solid economic growth so that we can, indeed, balance the budget for the American people. It's an exciting opportunity, and we don't need to raise taxes to do it.

Q One final thing, just broadly speaking, beyond entitlements. Is there a percentage of growth for the overall -- to sort of put in plain terms -- $2.9 trillion budget, is that 2 percent higher than last year, or where is the budget sort of in the big picture? How much has it increased?

DIRECTOR PORTMAN: Is it 2.9 percent or is it just over 2.8 percent, Steve? We'll give you 2.9 percent, which is a little growth. What's the percentage growth? The overall growth in the non-security area in this budget is 1 percent. The overall growth in the security area is closer to 6 percent, and the overall growth in the mandatory side, which is about half the budget, is closer to 6 or 7 percent. So, Ned, I think it's about probably a little higher than the GDP growth, which will be about 5.6 percent for this year.

Yes, Keith.

Q You seem in the budget to have assumed very little in the way of AMT relief. I'm wondering why did you do that? Is that very realistic? And also, doesn't it threaten to hamper your efforts to get to a surplus in 2012?

DIRECTOR PORTMAN: Yes, it's a good question. The alternative minimum tax is addressed in this budget. Congress has, in the past, enacted patches to the alternative minimum tax so that it does not hit upper-middle and middle-income taxpayers -- or hit additional upper-middle income or middle-income taxpayers.

We are proactive in this budget in the sense that although Congress has not passed a patch for this year, we include a patch in the budget. That patch is the most generous version of the patch that Congress has passed, which is a "no new filers" patch. It is for 2007. Although Congress has not passed that yet, it would enable Congress, then, not to have to patch again for about 20 months, until the end of 2008. The cost of that is about $36 billion, incidentally, and most of that is in the FY 2008 numbers.

Going forward, we want to work with Congress to reform the AMT because we believe that it is misguided tax policy. We want to keep it from, again, hitting further down into the tax brackets. We think there's a way to do that, working with Congress. This is what we have proposed in the past five budgets, as you know. This year, I think things might be a little different. I think there's more discussion of the importance of dealing with AMT. I think there's more concern because of the impact of a non-indexed AMT on taxpayers over the next several years.

So I'm hopeful that working with Congress, we can come up with a way to reform AMT. We think it ought to be part of a larger tax reform. It almost has to be, because there's so many interactions now between AMT and the individual income tax code. So we will be looking forward to seeing what the congressional budget proposals are in this regard, but we think it's an issue that we ought to be addressing together.

Q Okay, but doesn't it threaten to sort of really sap a lot of revenues out of your predictions when you do get a fix, or does it need to be done revenue neutral, in your view?

DIRECTOR PORTMAN: Well, implicit in the budget would be revenue neutrality because that's the numbers we show include AMT revenues. But I think we need to see. We'll work with Congress on that. Some members of Congress have proposed elimination without any pay-for's. Others have suggested that there ought to be pay-for's, and we want to work with Congress on that.

I indicated earlier that I believe our revenue projections this year are cautious. I'm saying that, in part, because I don't want those of you who are going to write the story about the rosy scenarios to then, in July, write the story about how we lowered expectations, which is what happened the last couple of years. So I will just tell you I think our expectations on the revenue growth are probably low, and the first-quarter results are in -- 8.2 percent, and we're saying 5.5 percent -- and there's no sign of a slowing economy right now.

So the first quarter growth numbers came in higher than expected. We had not included those in our budget projections, of course, because the budget was put to bed before those numbers came out a week ago. So that's an example, Keith, where there may be additional revenue available that Congress would want to work with to address a pressing issue, like reform of the alternative minimum tax.

Q On the health care proposal of the President, how does a tax expense work out? There's some cost on the tax expense the President -- there's some cost initially, and then it evaporates, or what?

DIRECTOR PORTMAN: I think in the first five years, it's -- there is an impact on the budget. If you look at our numbers, it will show that in the first five years, it is a coster.

Q Is it broken out in the book?

DIRECTOR PORTMAN: Yes, it is. Longer-term, 10 years, it's about revenue neutral.

Q Two questions. First, you're projecting some pretty substantial savings on -- for Medicare reforms and I guess Medicaid reforms. And you talked throughout your presentation about a rosy scenario and a cautious approach. Do you consider this a cautious approach?

And then secondly, you're proposing to limit the kids who are in the SCHIP program to those under 200 percent of poverty. Seventeen states currently allow children in families over that line to be eligible for SCHIP, so what happens to those kids under this budget?

DIRECTOR PORTMAN: Can we take the charts back to the chart on the 1997 balanced budget? Do we have that ability? Thank you.

In terms of caution and prudence, I think that is realistic. I don't know if it's cautious, but I think encouraging Congress to look at the mandatory side of the ledger -- again, more than half of our spending now is in the entitlement area. It is growing faster by far than inflation, faster by far than our GDP numbers, faster than the rest of the domestic spending. It's the fastest growing part of our budget now. And over time, as we noted, it crowds out all other federal spending unless we do something. This assumes that we don't have huge tax increases or huge benefit cuts.

So I don't think it's unrealistic to expect Congress to do something along the lines that the President has proposed. And these proposals are not particularly new or different. You'll see the proposals are similar to what we've proposed before. In fact, it's about doubled our Medicare provisions in our last budget, in terms of the savings over time.

But the proposals are very similar. You look back to the Clinton administration, you'll see some very similar proposals. You've heard from Capitol Hill some Democrats respond that they want to take a look at these proposals, because some of them have made some of the same proposals. One proposal that's a little different in our budget is, there is more on income relating, both in Part B of Medicare and in Part D, otherwise known as means testing. And so for those who are retired and making over $80,000 a year, or $160,000 a year as a couple, would continue to have their premiums subsidized, but not as much, under our proposal. This would affect about 5.6 percent of current beneficiaries, under our proposal. And again, this includes Part B. Some of these proposals have been out there before, but also a little more income-relating or means testing in Part D.

So that's part of the way that we get the savings. It begins, I think, a very important debate as to what is the best way to restrain the rate of the growth of these programs. Nobody is talking about cutting these programs. It's a question of how much the unsustainable rate of growth can be reduced so that it becomes sustainable.

So I don't think it's unrealistic. I would hope that, again, in a good-faith effort, we can work on both sides of the aisle on this, because both sides of the aisle acknowledge the problem.

What's your second question?

Q On SCHIP, there are 17 states that currently allow kids to go to --

DIRECTOR PORTMAN: On SCHIP, we have to go through the reauthorization process of SCHIP every several years, and this year is the reauthorization year for SCHIP. So we included in the budget a reauthorization number for SCHIP. It includes somewhere between $4 billion and $5 billion in additional spending on the SCHIP program, but it does target this additional spending on children who need the help the most, which is low-income children. And those are children under 200 percent of poverty. We think that's appropriate. We think that is the original intent of the program. And again, that debate will unfold this year as we get into the reauthorization process.

Q Mr. Portman, you talked a second ago about the introduction of some more means testing in the Medicare proposal. And, obviously, although this catches relatively few people at this juncture, presumably, over time, a larger and larger proportion of people would meet these income thresholds, and therefore be drawn into the means testing. Also -- and separately, the budget once again endorses the progressive indexing approach to Social Security benefits. So I wanted to ask you, does this add up to a sort of vision of how to fix the entitlement problem, that in other words, rather than raising taxes to meet the entitlement spending, you proportionately reduce the amount of benefits paid to higher income citizens?

DIRECTOR PORTMAN: I think that's observant, and once again, you are looking beyond maybe where we are in the budget and where we're headed. I don't know if it is a change. In other words, this has been something that Congress has debated for years. There is already means testing in every one of these programs. In the Part D program, as you know, we focused the new resources on prescription drugs on those who needed the help the most. So low-income seniors are given the great bulk of the support under that program. That was something new.

This is, I think, again, not a surprise or a new approach, but I think it's part of what everyone acknowledges who has looked carefully at these programs, part of the long-term solution.

Q Mr. Portman, you said that a reason you included the war costs in the budget is because you heard Congress loud and clear. I wonder, are there any other elements of this budget on which you heard Congress loud and clear, things that you did specifically because Congress has been asking for it?

DIRECTOR PORTMAN: Actually, there are. Our attempt here is to provide a credible, more transparent budget, and one that is more realistic, and so there are a number of different areas where we tried to be responsive. One is showing more war costs in greater detail, sooner in the process. Another is trying to minimize the number of user fees that are in the budget that permit us to spend more in other areas because we can show a savings on a user fee, but that have little chance of being enacted by Congress. Another is some of the so-called mandatory saving programs that the Appropriations Committee is concerned about because we have a savings again in our budget that the appropriators cannot effectuate on their own. And so we have attempted in this budget to reduce or eliminate those kinds of differences between us and the Appropriations Committee. So this is viewed as a more realistic document.

I'll give you a great example of that. When I first started by consultations on the budget, I went to the Hill. I didn't go around the administration. I went first to the Hill to hear what they were looking for. And they were concerned about the fact that we included a user fee in a number of different areas. One was -- the biggest one is in the TSA area, and we had a Transportation Security Administration user fee of about a billion dollars over the five-year period, per year -- a billion dollars per year for the five-year period -- so $5 billion in our previous budgets. And that fee, you will see, is no longer in our budget because the Congress has not shown an interest in funding TSA through such a fee, but we think it's good policy, frankly. So we had tried to be responsive to appropriators and others who have said, this is not a realistic budget.

The second one I'll tell you is our budgets the last couple of years, you will see, have had a freeze in spending outside of security. In fact, for the fiscal years, we've had below a freeze request in our budgets. This budget is a tight budget, as it should be, in the situation we find ourselves in. But it has a 1 percent increase in non-security spending as compared to below a freeze in the year in question, and then a freeze for the out-years.

So it -- and how did 1 percent come about? It came about because we looked back at what Congress has actually done the last few years, including this year, with a Democrat Congress, the long-term continued resolution for this area of spending will be roughly 1 percent.

So war costs, some of the specifics in the budget -- and we'll be happy to give you more detail on that -- we tried to be more realistic in terms of what the spending levels will be for the annual appropriated funds. We've tried to be more realistic and tried to give Congress the ability to use this document as a basis for coming up with a budget that serves the American people's interest.

Q -- 141 programs, are these the same programs this year at the same level of reduction or elimination?

DIRECTOR PORTMAN: They're very similar --

Q And if not, do you have a list of what the 141 programs are for this year versus last year?

DIRECTOR PORTMAN: They are different. Last year it was a little higher number. But they are some of the same programs. Some are relatively small programs. There's a new venture capital fund that was put in legislation for -- I think it's called the Red Venture Capital Fund for NASA. We don't think the government ought to be investing in venture capital. So we propose eliminating that program, as an example. There are some oil and gas tax incentives that we believe are not necessary given the current price of oil and gas, and so we recommend eliminating those in this budget.

So there's some new ones, and others we can provide you. If you look at the website I talked about earlier, the OMB.gov website, you will see a list -- is it separately broken out, Steve or Beth, the 141 programs? Will it be?

After your question, it will be. (Laughter.)

Q Today?

DIRECTOR PORTMAN: I don't know if we can get it up today, but we're happy to present that information to you, so just contact us.

Q What assumption do you use on immigration? Do you assume that this is going to be 10 million illegal aliens in the country contributing to Social Security and Medicare? Do you assume there's going to be a comprehensive reform that will change those figures?

DIRECTOR PORTMAN: That's interesting. As you know, the CBO numbers have been interesting on that, what the various reforms would cost. Some have indicated that because of the fees that would go into a new temporary worker program you might see an increase in revenues; others have said a decrease because of the Social Security benefits. We have not attempted to do that in this budget. We have assumed that, from a budget perspective, that there would not be those changes. But we have looked at those CBO analyses, and we're doing some of our own analyses, as well.

Q In terms of getting to the balanced budget by 2012, you mentioned that you can get there without the Medicare savings that you just outlined. In your mind, what would you identify as the key decisions in this document that get you to 2012, the three or four things that you think are the most significant? And just a side question on private accounts -- do you deal with private accounts on this at all? Do you propose that? And was there any discussion about sort of leaving that out to be

-- as a sign of peace to the Democrats?

DIRECTOR PORTMAN: Good question, Mike. I guess if I were to say three or four things -- this won't surprise you -- I would say, again, it comes back to, can you keep a growing economy? I think our projections are very realistic on that front. We're not assuming a huge increase in revenues, as we've seen in the last two years, but we're assuming a steady growth of an economy, and we're assuming some spending restraint, as we have done the last few years, on the non-security side. And then, as you say, we don't need the mandatory savings to achieve balance; however we think it's the right thing to do. So I would say those are the fundamentals.

And although this tax issue has become sort of a political football, if we can show balance by providing for the nation's priorities without raising taxes which put the economy at risk, in our view, that ought to be a priority. And there's no reason that we can't. In a sense, then the burden is on others to show why there is a need for additional spending, other than what we have provided for, including, as I noted, healthy increases in spending on the security side, both for Iraq and Afghanistan, but also for our nation's defense readiness.

So that's what I would say. It's pretty simple; it's how do you keep the economy moving forward -- pro-growth policies -- and then how do you have just reasonable spending restraint? We find ourselves in a very fortunate situation because of strong economy and because of increased progress on restraining non-security spending, we can -- we can achieve balance for the American people. And it's the right thing to do, because it will position us better for the future.

While we're doing that, though, we should also begin the process of restraining this growth rate in the entitlement programs, both because of the long-term challenge, which is mind-boggling -- $32 trillion over 75 years, over $70 trillion over the infinite horizon, just in Medicare, $15 trillion with Social Security -- but also because every year, these programs are crowding out other spending that is considered important, whether it's education or homeland security. So it's the right thing to do. But I'd say that's the trick.

And I think we can get there. I'm really encouraged by what I hear -- when the President talked about a balanced budget at the House Democrat retreat on Saturday, you might have noticed, he got an ovation, because members, I think, on both sides of the aisle, are eager to show constituents, to show the American taxpayer that we can get our fiscal House in order here short-term. It's necessary to do it. Because of these other challenges that we face, it's the right way to go.

Q I've got one more --

DIRECTOR PORTMAN: Oh, private accounts. We do include private accounts in the budget, but as an olive branch, I suppose you could say they are delayed, but also, because we think as a practical matter, probably would not be able to be implemented until 2012. So we delay them from 2010 to 2012. Last year, we delayed them from 2009 to 2010. So we delay them another year. But private accounts are in the budget, and the President continues to believe that this is part of the answer to Social Security, particularly for younger people.

Q On homeland security, there's also been some political changes on the Hill. You've got Robert Byrd at appropriations. They want -- the authorizing committee wants to inspect every container. Would you say that your homeland projections are also low ball, given what Democrats are likely to do to plus things up?

DIRECTOR PORTMAN: I don't know, we'll have to see. We have a healthy increase in homeland security spending. We have our specific ideas as to how that should be spent, including more border security, including more Border Patrol. But it also includes more funds across the board for homeland security. So we will be working closely with the authorizers and the appropriators to try to ensure that the funds that we provided here are properly allocated to best protect the country. But we do provide significant increases in resources.

Q -- to build the fence --

DIRECTOR PORTMAN: There is adequate funding to build 370 miles of fence in the --

Q (Inaudible).

DIRECTOR PORTMAN: Well, it depends if you mean double strand or double fence for 700 -- no. If you mean virtual fence using the SBI net, in other words, having in some places, other than a physical fence, I suppose you could take it out to 700 miles. But there is significant new resources toward border security, including fence. We can give you all that detail if you're interested.

Thank you all.

Posted: Feb 7 2007, 02:36 PM

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MR. SNOW: One addition to the schedule for tomorrow. Tomorrow the President will travel to the Department of Homeland Security and visit the Nebraska Avenue complex. He'll receive a briefing from Secretary Chertoff and other senior-level employees on their priorities and efforts to guard against the threat of terrorism and keep America safe.

As you know, the global war on terror is a struggle against terrorists who are threatening the entire civilized world. While men and women in the military are fighting abroad we've got to make sure that we continue to fight them at home. And the men and women of the Department of Homeland Security are essential in that fight. So we hope to have pool coverage at the end. We'll give you details on coverage as they become available.


Q Tony, the President said in his speech on the 10th that America will hold the Iraqi government to the benchmarks it has announced. How do you follow through on that pledge if Iraq is not meeting its own target dates for certain pieces of legislation, they're not supplying troops into Baghdad at the numbers that were expected? What does the White House do to follow through?

MR. SNOW: I think the most important thing to do is to keep in mind what is, in fact, going on. For instance, yesterday, I think the Prime Minister stood up before everybody and said, "I call on you quickly to finish the preparations so we don't disappoint people." He also made the point that either we win or -- "Either we all win or we all lose. The whole world is watching us and expecting us to win."

I think at this point, to try to start rendering summary judgment at the very beginning of an effort by the Iraqis not only to deal with matters of legislation, but also economic development and getting forces on the ground, and for that matter, getting their headquarters and command stood up, is a little premature. The other thing we've said is if it takes a couple extra days or weeks at one end or another, we're going to understand that.

It is clear that there are very serious and good-faith efforts to deal with all the things you've been talking about, Jennifer, including getting the legislature, the council of representatives to conclude business on an oil law, and also to move on such things eventually as the de-Baathification statute, or de-Baathification reforms. So those continue to be priorities. But I think it's simply too early at this point to start drawing conclusions.

The Iraqis are continuing to move forces toward Baghdad, but this is an ongoing process. And there's going to be a requirement to, not only on the military side, put people in place to assess what's going on in neighborhoods, to work on plans, to work on the unity and the cohesiveness of U.S. and Iraqi forces.

Let me just read you something that General Petraeus said the other day, because I think this helps put in perspective the fact that these things don't happen overnight, it does take time, and there are a lot of logistical considerations to take into account. And he said, "It will take time for the additional forces to flow to Iraq, time for them to gain an understanding of the areas in which they will operate, time to plan with and get to know their Iraqi partners, time to set conditions for the successful conduct of security operations, and of course, time to conduct those operations and build on what they achieve."

So all these are still really in progress. But as we've said all along, over time, within the next couple of months, we'll be able to get a firmer sense of how the Iraqis are doing and how the plan is proceeding.

Q What will happen then?

MR. SNOW: Well, we hope that we'll be able to report success.

Q But even that drawn-own process doesn't do much to address the lack of security for the people who are needed to rebuild Iraq in places outside the Green Zone. And as you know, there's difficulty getting those people to go there.

MR. SNOW: Yes, there is, absolutely. We're in the process right now of working on building up the provisional reconstruction teams. The State Department pretty much has its commitments now made. Their team leader positions are pretty much filled. The President, in the Cabinet meeting the other day, made it clear to members of the Cabinet that we need to be able to get people in place, and we've also talked about a civilian corps that would be able to provide some of the services we need.

Force protection is clearly a priority, not merely for the military, but for the people working on the PRTs. But the Department of State, the Department of Defense and other departments, other Cabinet-level departments and agencies, are working toward getting them staffed up, because there also is a significant return, once you do start creating economic opportunities and jobs. And I know you've seen some of the research on it, which indicates that it does have a significant impact on reducing violence. You have a situation where once you do have the ability, first, to clean and hold neighborhoods -- or clear and hold neighborhoods, it does then give you the opportunity to follow on.

What we are not doing is putting provisional reconstruction teams in hot zones. But the plan is, you go in, you go in with force, you stay in on a 24-7 basis, you clear the neighborhoods, you also work on developing the trust and confidence of those -- then you start flowing in with the forces that do the economic support. So we're keenly aware of the security challenges.

Q You've got a chicken-and-egg question here. I mean, you can't get people in there because it isn't secure.

MR. SNOW: Well, keep in mind, the security part is the first -- as I just explained, when you're working with the U.S. and Iraqi forces going in district by district, you do the clear and hold; and then at that point you start bringing in the other infrastructure, the provisional reconstruction teams.

Q And that's taking a lot of time, a lot more time than people --

MR. SNOW: Well, it's still worth doing. It's an important piece.

Q What can you tell us about the helicopter that was shot down?

MR. SNOW: Not much. I'd refer you to DOD.

Q Was it shot down?

MR. SNOW: Again, preliminary reports indicate mechanical, perhaps. But again, I just -- I don't -- we don't have firm word on it. And the place to go for a real answer is the Department of Defense.

Q Tony, are you concerned about these reports that a member of the Iraqi parliament, Dawa party member, ruling coalition, appears to be the same guy that was convicted of those embassy bombings back in '93?

MR. SNOW: Well, again, the one thing we've made clear with the Iraqi government, and the Prime Minister has made clear, is that you have a situation now where you have a government that's committed to peace. And people who are operating outside the law committing acts of violence, you're going to need to deal with them. But I'm not going to render judgment on the story.

Q Tony, this may seem demeaning, but it's obviously a serious question. This NASA scandal is huge all over the world. Is the White House going to ask the NASA for any more transparency in the oversight and selection of astronauts in light of this unfortunate --

MR. SNOW: I know it is the most salacious story, but I'll refer it all to NASA, much to the consternation of all in this room.

Q Well, even the oversight of the way they select, and then they continue to monitor their astronauts --

MR. SNOW: Again, Connie, I'm just -- NASA has the answers and the responses to this, and I'd direct you to them. I'm not going to grandstand on that story.

Q Tony, as far as terrorism, the President going to talk tomorrow. I'm frustrated, as many Americans, that it's been a long time, five years, for General Musharraf to respond not to support the terrorism. So much has been written on this issue

-- clearly indicates also that he is not questionable as far as the support in global war on terror with the United States. Do you think the President is frustrated? Or he still has faith and trust in General Musharraf?

MR. SNOW: I haven't had a "pick on Musharraf" question since you've been gone. No, look, President Musharraf is an absolutely essential ally in the war on terror. He has, himself, been the object of a number of assassination plots. And he is somebody who is serious about helping, and has been a considerable help, and we continue to work with him.

As we've said before, also, when it comes to cross-border incursions, people making their way into Afghanistan, it's very important to deal with it. And I believe he's had some public announcements this week about his determination to try to foil that. So I think it would simply be misstating the facts to say he hasn't been active. He's been very active.

Q Tony, I'm curious about this Centennial Parks Initiative. This is a time of very tight budget constraints; even programs like Children's Health Insurance got only the smallest of increases. I'm wondering what brought on this sort of sudden bout of conservationism and a big increase for parks.

MR. SNOW: Sheryl, you haven't been watching. You're talking about a $1-billion federal increase with a $1-billion matching grant. By the way, your characterization of CHIPS, the budget right now is $5 billion. It's going to be increased by -- we're putting $4.8 billion into it over the next five years. That is not an insubstantial increase. As a matter of fact, it's a significant one. Furthermore, there is a real focus right now on making sure that you're dealing with poor Americans.

Q -- talking about the parks --

MR. SNOW: No, the first thing we've got to do is to talk about the assumption of the question, because it was an argumentative assumption that I think is worth at least trying to pick apart, as well.

The President has been committed to conservationism since the beginning of this administration. Last year, for instance, we set aside the largest natural wildlife reserve on the face of the Earth. This is not new. Just as many people have been saying, wow, isn't the President -- isn't it nice that the President has finally agreed that global warming has manmade components, only to find out, because we've been telling you, that he first started talking about it in June of 2001.

There's been a lot of misreporting, or perhaps it just hasn't -- perhaps folks have not taken notice of the fact that this is an administration that's been keenly committed, both to environmentalism and conservationism from the start. This is important -- this is also a plan to work on the national parks over a 10-year period. So what we're talking about is $1 billion over 10 years for the centennial of the U.S. Park Service, which will -- it seems to me that that's a pretty reasonable down payment.

Q Well, you raise that point about reporting on the President's environmental record. People are starting to say, is George Bush waking up to the environment?

MR. SNOW: Well, the fact is -- actually, the question is, are reporters waking up to his five-year record? The answer is, the long national slumber may be approaching an end.

Q Is there any concern that U.S. and Italian relations are going to be hurt by the Italian judge charging an American soldier with homicide for that --

MR. SNOW: I'm not going to talk about any particular judicial activity, but I will note that we continue to work closely with our allies. And many of our -- throughout Europe, our allies continue to supply important aid and assistance in the war on terror, and that's going to continue.

Q Lawmakers have been going after Secretary Paulson up on the Hill in the hearings the last few days on the budget, particularly the AMT fix, saying that the administration has used the revenue after '08 to balance the budget. Do you think that's a fair criticism?

MR. SNOW: No, because what we've said all along -- there are a couple of things going on. First, as some people in this room are suddenly finding out, the alternative minimum tax is a way of declaring working people rich and raising their taxes. I know a number of you have suggested in recent days that you're starting to feel the bite of the AMT.

There are a couple of things that we've tried to do. Number one is to put in a patch not only for this year, but for next year, which gives us 20 months to figure out what's going on. Also, this is a patch that means that nobody who has not been previously affected by the AMT will be affected, because in the past, other people woke up with the unpleasant surprise that, lo and behold, they were going to get socked with a tax that was once designed to be reserved for the rich, but increasingly is, in fact, hitting middle-income American families.

Now we have 20 months to work with Congress. And our rules are the same as they are in the rest of the budget deliberations, which is that we still want revenue-neutral solutions to this. This is something that is going to have to be the product of legislative deliberation. And both parties now have, as I said, 20 months to work through how best to do this. This is an administration that believes in cutting taxes, and that includes on people who have suddenly been socked with the alternative minimum tax, and we look forward to working with Congress on it.

Q But, Tony, if the administration believes in cutting taxes, why didn't the administration propose a legislative fix


MR. SNOW: Well, I think you understand, what's happened is it's a pretty hot topic and a lot of members of Congress, I think, at this point, are going to want to talk it through. So let's see what members of Congress have. What we're doing is we're trying to be deliberative. We have now created and opportunity -- we've basically created a space, a 20-month space, in which members of Congress can avoid trying to sort of score quick political points and instead do something that's responsible, because millions of Americans now have suddenly become alive to the fact that this is a tax increase that's been sort of snuck in.

And by the way, a few years from now, if Congress does not extend tax cuts that are now in effect, they're going to have a similar unpleasant surprise when tax cuts expire. So the President has, in fact, been talking with Congress about a series of things: holding taxes down, extending tax cuts, working on the AMT, and also the kind of budget discipline that's going to make it possible for us to do this without raising taxes on Americans.

Q Just one question, though. Do you acknowledge that just the one-year fix, and nothing -- and being silent in the off-years helps show a balanced budget by 2012?

MR. SNOW: No, what it means is it gives us the basis for working forward on it. Obviously, this is part of the balanced budget, but what I've just told you is the principle of revenue neutrality remains in effect.

Q I had a couple questions on -- the first being a response to what you just said a moment ago. Are you saying, then, in terms of the President's position on greenhouse gas emissions, that five years ago you said with 90 percent certainty -- contributes to greenhouse gases --

MR. SNOW: What you're talking about is having the President, five years before the fact, read out something that was in a draft report in the year 2007 at the International Panel on Climate Change. What he said was that global warming exists and humans are significant contributors. That's what he said. Since then, what has this administration done? Well, we have spent more money on technology and also research than anybody else -- $9 billion on basic scientific research strictly into global warming, which very likely is more than the rest -- any other -- the rest of the world combined.

In addition, $29 billion total on technology. What happened, for instance, in the previous administration is that there was talk of Kyoto, which would have been economically ruinous and would have thrown a lot of people out of work. The President, instead, has aggressively pursued ways of trying to clean the environment that don't have to make people lose their jobs, and in effect -- and at the same time, proceed on all the major areas where pollution is concerned.

You and I have talked before about industrial pollution. We've got clean coal technology programs. We have alternative fuel programs for auto emissions. We're talking about nuclear development, which is now championed by, among others, Greenpeace. The fact is no administration has been more aggressive, no administration has put more money into research, and none has been more committed to basic peer review research on climate change than this one. And that one you can look up and we'll be -- I'm sure Jim Connaughton has already supplied you with plenty of data on it, but if not, he will be happy to do so.

Q Well, in respect to opposing views, companies such as -- Energy, Whirlpool, are coming out and saying we need mandatory federal constraints --

MR. SNOW: Well, they're talking about carbon caps.

Q -- is the administration meeting with these groups at all, these groups that believe that mandatory -- whether it's a carbon tax, or --

MR. SNOW: Yes, as a matter of fact, if you'll recall, one of the first trips -- it may have even been the first trip right after the State of the Union was to DuPont, which was one of those companies.

Q Greenpeace has signed on to nuclear?

MR. SNOW: I think there's some Greenpeace people who are certainly advocates of nuclear power. Why? Because it's clean and it provides for energy.

Q I'm sorry -- did they discuss greenhouse gas emissions at that event?

MR. SNOW: I don't know. I don't know. Paula, we constantly have conversations with people on this, as well as with scientists. And I think what you're trying to do is to lend the impression that if a President does not meet with people who are corporate leaders, that somehow that issue goes unexamined within the administration. Nothing could be further from the truth.

Again, think about what happened. In the Clinton administration they went -- they talked about Kyoto and did nothing to get it passed, knowing what kind of a ruinous economic impact it would have. What we did is instead, we said, we believe in the goal -- and early on, the President talked about the linkage between climate change and the human elements -- and began to proceed on the most aggressive program of research and technology ever, when it comes to this.

And furthermore, on the negotiation side, not only are we talking about follow-on negotiations when it comes to climate change with our allies, we've also been dealing with the developing world, which was not at all included within Kyoto, offering them technology, and really taking the kinds of steps that demonstrate real seriousness, not simply giving the speeches, but walking the walk.

So the idea that somehow we are -- that we don't understand the arguments, or we're not contemplating or taking serious the arguments about carbon caps -- of course, we are. I would point out that the carbon -- that there is a carbon cap system in place in Europe. We are doing a better job of reducing emissions here.

Q Thank you. Tony, an advance team is reportedly on his way to Central and South America to prepare for the President's special trip there next month. Is he going? And what about a stop in Puerto Rico? No President has visited there in more than 50 years.

MR. SNOW: I'm not going to comment on unannounced trips.

Q Does the President think it's a good idea that Speaker Pelosi have a large government military jet available to her to back and forth to California?

MR. SNOW: After September 11th, the Department of Defense -- with the consent of the White House -- agreed that the Speaker of the House should have military transport. And so what is going on is that the Department of Defense is going through its rules and regulations and having conversations with the Speaker about it. So Speaker Hastert had access to military aircraft and Speaker Pelosi will, too.

Q Does the United States have moral obligation to refugees from Iraq? And if so -- refugees from the war in Iraq, which there are now a couple million almost in Syria and Jordan -- and if so, why have we accepted so few?

MR. SNOW: Well, I don't know if you saw this, Wendell, yesterday, but the Secretary of State has, in fact, announced the creation of a working group on the problem. I don't know if it's a moral obligation, but it is certainly an obligation that we think is important to take up. I think to the extent that we believe there's a moral obligation to reach out to those who have been displaced around the globe -- and the United States is usually the first to the scene -- we certainly are interested in trying to work with regional partners to deal with those who are there. We're also trying to work with the Iraqis to create better conditions on the ground. But it is a problem. And as I said, the Secretary yesterday announced a program for addressing that and will continue to do so.

Q That does not indicate that we would accept any more than the --

MR. SNOW: I just don't --

Q -- the tiny handful that we've accepted in this country.

MR. SNOW: Well, again, I would refer those issues over to State. That is -- no, I would. If you want an answer to it, call them.

Q Let me try and bring it home here.

MR. SNOW: Okay.

Q Gerald Ford made a commitment to accept Vietnamese refugees. Is the President willing to make the same commitment?

MR. SNOW: As I said, I would refer -- right now this is being done in a working group at State. And so we're not in a position to make any announcements at this point of that sort. But why don't you give them a call? They may be able to -- literally be able to give you better context and texture about this.


Q I just want to make clear something about 2001. Wasn't this President's position then that, yes, he acknowledged there is global warming, but there's too much scientific uncertainty as far as how much of it was human-generated?

MR. SNOW: Well, again, go back to the statement. He talked about -- there was a certain amount of uncertainty about the percentage that is human-generated, and there continues to be controversy in scientific circles. But what the President said right then and there was that human behavior was a significant contributor. I don't know how to make you happy. When he says exactly what you've been wanting him to say, it turns out he's been saying it actually over a six-year period, I think you'd say, okay, I need to give him credit. And instead what you're saying is, well, golly, didn't he say what the IPCC said in 2007? I mean, come on, give us a break here.

Q -- on global warming, do you have any reaction to some apparent comments by Al Gore in Spain in an interview, where he suggested that the administration is paying scientists to dispute the global warming findings --

MR. SNOW: The reported remarks by the Vice President that the United States -- that the government is going out and paying money to those who dispute climate change research is just breathtakingly silly. I think maybe what he's done is he's mixed up a story about a think tank in Washington with government policy.

As I've said, this administration has spent more money than his administration and any other administration when it comes to doing serious, peer-reviewed scientific researches on the nature, causes and extent of global warming, and also has spent far more money on technology to try to ameliorate it without throwing people out of work.

The President really does believe that it is important to address climate change, and, incidentally, to address issues of pollution, as well, on the industrial side, on the transportation side. And that is why he laid out a whole series of initiatives in the State of the Union address. Those really build on the efforts -- and, again, just to reiterate, $9 billion for basic research when it comes to climate change, and $29 billion total on that research, plus technological innovation designed to make sure that Americans do get -- that we address carbon emissions, we address issues of pollution and, at the same time, we do it in a way that continues to make economic opportunity possible for everybody.

Q Thank you.

MR. SNOW: Thank you.

Posted: Feb 8 2007, 03:53 PM

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MR. SNOW: Hello. I just learned an interesting factoid, apropos of Black History Month. On this day in 1944, Harry S. McAlpin became the first black reporter admitted to a White House press briefing, representing the National Negro Press Association, in 1944.

Q Now do you want to bust on the White House Correspondent's Association, on what they offered him?

MR. SNOW: No, I don't think so.

Q Okay.

MR. SNOW: I'll let you take that up.

Q Wasn't that the same reporter that was thrown out of the Senate press gallery? I believe he was.

MR. SNOW: I'll let you recall that from your memory, Les; I don't know. (Laughter.)

All right, also this: President and Mrs. Bush will travel to Brazil, Uruguay, Colombia, Guatemala, and Mexico from March 8th to 14th of 2007. The trip will underscore the commitment of the United States to the Western Hemisphere and will highlight our common agenda to advance freedom, prosperity and social justice, and deliver the benefits of democracy in the areas of health, education and economic opportunity. Many more details forthcoming in the days ahead, but there you have that.

And I'll be happy to take questions.

Q You called the Pelosi plane issue a "silly story" this morning. Shortly thereafter the RNC put out a statement saying -- calling it "Pelosi's power trip" and that she's "non-stop Nancy seeks flight of fancy." Are you calling that --

MR. SNOW: Well, I'll reiterate our position. The question -- the RNC has put out a statement on Speaker Pelosi and travel arrangements, and I'll just repeat our position, which is, as Speaker of the House, she is entitled to military transport, and that the arrangements, the proper arrangements are being made between the Sergeant of Arms office in the House of Representatives and the U.S. Department of Defense. We think it's appropriate, and so, again, I think this is much ado about not a whole lot. It is important for the Speaker to have this kind of protection and travel. It was certainly appropriate for Speaker Hastert. So we trust that all sides will get this worked out.

Q So, Tony, is it inappropriate for the RNC then to make an issue out of this, and say -- I mean, ridiculing her as "non-stop Nancy, flights of fancy"?

MR. SNOW: Jonathan, you know what my position is. I will let you draw whatever conclusions you may, but our position is pretty clear on this one.

Q Senator McCain had some harsh comments about General Casey today. And among other things, he said that lawmakers were promoting a general who has pursued a failed policy. Do you have any reaction to that?

MR. SNOW: Well, the President supports General Casey. That's why he has nominated him to become the Army Chief of Staff. We understand that there are members of Congress who do have disagreements. But we support his nomination and hope that it will be voted on successfully, that he will approved today by the United States Senate.

Q Can I also ask you about Iran, as well? Do you have any response to the comments from Iran's supreme leader, talking about attacking interests around the world --

MR. SNOW: I believe the Ayatollah was referring to, if the United States attacked -- let's see, I have said it, the Secretary of Defense has said it, the President has said it: We're not invading Iran. So I think this is -- he's spinning a hypothetical about something that is not contemplated.

Q Why did he have to say it?

MR. SNOW: Why did he have to say it?

Q No, why do you have to say it?

MR. SNOW: Because you guys kept trying to report that we were doing it, and we kept saying, no, we're not.

Q -- forces in your backyard, aircraft carriers, missiles, submarines?

MR. SNOW: Yes. That's correct.

Q Does that give you a little pause --

MR. SNOW: I don't think so.

Q -- as an American?

MR. SNOW: It doesn't give me pause. It gives me reassurance to know that we were able to deploy people.

Q You don't think we should be worried about that?


Q Why?

MR. SNOW: Because we quite often deploy carrier task forces all around the world.

Q Two task forces in their backyards?

MR. SNOW: I don't believe it's their backyard. I believe it is the ocean that also encompasses a whole series of other nations. It is not as if they are parking outside of Iranian ports. As a matter of fact, as you know, the area of passage through the Straight of Hormuz is quite narrow -- 21 miles -- and we are talking about deploying through an area where -- that includes a number of key allies, including the Gulf states, Saudi Arabia, and others.

Q Thank you, Tony. A follow up question. Is the military satisfied with the clarity of the guidance they're getting as to how to deal with the Iranians in Iraq, or the members of the IRG that are coming across the border?

MR. SNOW: Is the military satisfied? I would -- you'll have to ask the military about that. They have rules of engagement. But as you also know, John, we are not from the podium going to be describing in any detail any particular orders given to people in the field. The President has said that we will do force -- we will protect our forces in the field. I will go no further than that.

Q Can I go back to the Pelosi issue? The Republican National Committee is putting out press releases. Is the RNC now beyond the President's purview? If you think it's a silly story, is there -- they're able to just operate if they want to attack like that on their own?

MR. SNOW: Well, apparently they did this time. (Laughter.)

Q Two quick questions. As President speak on homeland security today -- you're worried about the homegrown terrorists and some of them may have connection outside of the country, or -- mosques around the country, here in the U.S. What's the President's position as far as we still live under the threat of terrorism even though we haven't had any major attack after 9/11?

MR. SNOW: No, that's precisely why he's visiting the Department of Homeland Security. You cannot try to live under the illusion that the war on terror is confined to Iraq, or even that region of the world. It is a global war on terror, as the President made very clear on September 20th of 2001. And it requires activity by every department and agency of the federal government in trying to deal with challenges as they become appropriate. It's why we have the Patriot Act. It's why we have the Terror Surveillance Program. And it's why the President has tried to do everything he can lawfully to find out who's on our soil trying to kill our people and to conduct the proper kind of surveillance and give law enforcement officials the tools they need to track down and apprehend folks who are trying to kill Americans before they have a chance to do so.


Q -- still calling on the global war on terrorism as far as to the top al Qaeda leaders, including Osama bin Laden?

MR. SNOW: Well, that's certainly part of it. But as you know, also what's happened is that a lot of that original organizational structure of al Qaeda has been significantly degraded. However, what we've seen are the splintering into a number of autonomous, independently acting groups that are committing acts of terror. And that also raises the challenge of finding -- the ability to gather intelligence to track the changing nature of the terror threat.


Q You said this morning that you all were taking essentially a hands-off, sort of interested observer approach to the Iraq debate on the Hill --

MR. SNOW: Yes.

Q Why is that? I mean, there may be some sense of inevitability about what's going to happen there, but that's never stopped the White House before from getting very involved in debates that are --

MR. SNOW: This is a little unusual. This is a non-binding resolution where people are trying to speak their minds on an issue. And it's appropriate to let them go ahead and work through it. This is not something where the White House is in a position, or ought to be in a position to try to tell people exactly how they ought to frame it; instead you have members of Congress who have been trying to have an open debate about this, and to offer different views and different ways of expressing their concerns about the war.

Americans are concerned about the war. The President is concerned about the war. Nobody is happy with the way the situation is today. And therefore, the key challenge is to move forward in a way that leads towards success.

Q But is there a sense of, maybe, resignation that you just have to let this one go --

MR. SNOW: No --

Q -- because the White House has never stayed out of a battle like this before --

MR. SNOW: Have you ever seen a battle like this?

Q On other issues --

MR. SNOW: On a resolution, on a non-binding resolution, where people are trying to make a statement? I don't think -- I think it would --

Q (Inaudible.)

MR. SNOW: No, I think it would be difficult to draw a parallel. But this is an expression of opinion on the part of members of Congress. And therefore, it is appropriate to let them go ahead and express it. You don't want to -- this is not something where you negotiate and say, Senator, that's not your view. It doesn't work that way. I mean, a lot of times when you're dealing with a piece of legislation, you can sit down and you can try to work with folks. As a matter of fact, we made it clear to members of the House and Senate that we do want to work with them and share our views. But on something where they're trying to express their views, they're their views.

Q But every vote is an expression of opinion. I mean, by that argument you could say --

MR. SNOW: Come on, Jennifer, no --

Q -- we should never try to convince someone to vote a way that they don't --

MR. SNOW: I'm sorry, but when you're talking about the difference, for instance, on Social Security, or health care, or energy, you're dealing with specific provisions that have policy implications where an administration will be called upon to enact that law. This is different. It's a non-binding resolution that we think members ought to look at carefully to see what kind of message they're sending, but on the other hand, we don't think that it's appropriate to say, don't express your views. They've decided to do so, and it's appropriate.

Q Well, would you concede that the White House has an interest in the outcome of this debate, particularly in that it may hold the President's policy up to further criticism?

MR. SNOW: We understand -- I'm sorry, would I concede?

Q Yes.

MR. SNOW: No. Lousy verb. I think --

Q It was deliberate.

MR. SNOW: I know. That's why I pointed it out. I know you choose it carefully. (Laughter.) This is great, he keeps the poker face longer than anybody on the front row. (Laughter.) In any event, actually, what's interesting is members, I think, are stepping back and they're thinking, okay, what message do we want to send, and how do we contribute in the long run to success of the mission in Iraq. We think it's going to be a healthy debate.

Q Well, you say it's non-binding, but you have seven Republican senators now threatening to slow down the legislative process by attaching their measure to any bill that hits the floor. So clearly the White House must take -- must be concerned beyond that this is just a non-binding vote because it now has other consequences.

MR. SNOW: No. These are seven senators who, the other day, also voted against cloture because the cloture resolution didn't -- the resolution that was being sought for cloture didn't permit the free expression of views including their own.

This is -- you know, this is a process question involving members of the Senate. We are talking about something that is not going to happen this month. It gives members on both sides, in both parties, an opportunity to work through this. And I think rather than trying to squeeze a view out of the White House about what's likely to happen in three weeks, talk to the members. I think they're working that through, and I think it does have to do more with procedural matters within the United States Senate.

Q Tony, let me go --

MR. SNOW: Peter, and then --

Q Just going back to the Pelosi story for a moment, just to clarify, is there no message coordination between you guys and the RNC?

MR. SNOW: There is from time to time, yes. But in this particular case, we've got a clear view.

Q Would it be correct to put it --

MR. SNOW: Would --

Q No, would it be -- it just seems that you're at such odds on this. Would it be correct to say that --

MR. SNOW: Well, why don't you -- why don't you call the RNC and ask what the view is.

Q Oh, absolutely.

MR. SNOW: Okay.

Q But as the President's spokesman, are you unhappy about this, disappointed that it's come out this way?

MR. SNOW: I emote constantly about it, but I won't share that. That's private --

Q Pardon me?

MR. SNOW: I was being a smart aleck. (Laughter.) Look, my view is it's important to clarify the President's position on this, and the President's position is that Speaker Pelosi, because of an agreement that was made, I think wisely, of necessity after September 11th, has access to U.S. Department of Defense transportation, under suitable rules and guidelines, and that is going to be negotiated between DoD and the Sergeant at Arms, and that's as it should be.

Q The President is headed to DHS today, Secretary Chertoff on the Hill today and tomorrow, and the committee he will face tomorrow, the Chair of the committee describes the morale at the DHS as appalling and is very critical of cuts in

first responder programs and budget increases for first responders, and security programs for aviation and mass transit that he considers totally inadequate.

MR. SNOW: Sorry, who is the source of this? Who is the source of the characterization?

Q Bennie Thompson.

MR. SNOW: Who does not work at the Department of Homeland Security.

Q But he's homeland security chairman.

MR. SNOW: Yes, I know. He's making a characterization. He'll be able to ask Secretary Chertoff about that. Fact is, the people who work at the Department of Homeland Security have an enormously difficult task. They work at it. And I'm not going to characterize morale. I mean, I think what he's talking about are grants that are awarded and continue to increase in terms of the amount of money that we're allocating to them when it comes to dealing with first responders.

Q -- some of those grants were cut?

MR. SNOW: Well, as you know, there's a process. Some of the grants to different areas -- last year, we were under fire because they went down for New York. They're back up for New York this year. The fact is that there is a formula for trying to apportion those based on need and appropriateness. You do have to make some choices with the scarce resources available to you.

Q One follow up on that?

MR. SNOW: Well, first -- yes, go ahead.

Q A recent OMB survey came out, ranked 36 federal agencies, and homeland security -- the Department of Homeland Security came in 36th out of 36 on job satisfaction, 35th on leadership and management, 36th on results-oriented performance, and 33rd in talent management. Does that raise concerns about the ability of the Department of Homeland Security to protect homeland security?

MR. SNOW: I think the most important thing to do is constantly to work -- every department and agency, Jonathan, worries about its effectiveness and constantly strives to improve. And that's going to be true at DHS as well as anybody else.

Q You're not concerned, the President's not concerned?

MR. SNOW: Wendell, I didn't raise it with him today.

Go ahead.

Q Tony, somewhat going back to you opening with the minority -- well, the Black History Month factoid, do you think in February 2007 that this country is hyper-sensitive when it comes to minorities to include -- not just saying minorities in race, but minority in gender? Look at the Nancy Pelosi issue right now, do you think that this country is hypersensitive about that because of her gender?

MR. SNOW: I believe women are a majority in this country.

Q Yes, but who runs Washington? How is Washington --

MR. SNOW: No, no, actually, April, I don't think that has anything to do with the fact that the Speaker is a woman. I think we've grown up a lot as a country when it comes to minorities over the decades. We have a way to go. That's the way it works in this country. The one thing you can always be sure of is that we try to get it right and we try to make sure that over time, we acknowledge the equality of every human being not only before the law, but before God, and try to respect their individual dignity.

Q Well, Ms. Pelosi just came out saying that she would like to be afforded the same --

Q Mrs. Pelosi.

Q Mrs. Pelosi, thank you so much, said that she would like to be afforded the same items that her male counterpart received. And she brought into the issue of gender into this whole --

MR. SNOW: I spoke with her office earlier today on this, if you're talking about the flights. We're supporting them, and I'm not going to get into characterizations about it because, frankly, in this particular case, it certainly plays no role in our calculations.

Q Do you think that at this stage --

MR. SNOW: I'm not -- I'm not going to --

Q But wait a minute --

MR. SNOW: But you're asking me for a chin-pulling, metaphysical judgment on --

Q Do you think that this nation is hypersensitive when it comes to issues --

MR. SNOW: Hypersensitive, in and of itself, is one of those things that almost -- no, I think what it is is we've got a nation that's determined to make things better, and that's one of the glories of being an American.

Q Tony, any readouts from the meeting with Amine Gemayel this morning?

MR. SNOW: No. We'll get you one when we have one, but I don't have one.

Q Tony, Hamas and Fatah have reached a deal, apparently forming a government of national unity. Will the U.S. support such a government? Will it resume its aid to the --

MR. SNOW: We're going to have to see. At this juncture, as you know, there are very preliminary reports, and we have not had -- we have not had any opportunity to study what may have been worked out there.

The one thing that we have always said, and will continue to say, is that it's important to have a government that will be a full negotiating partner with Israel, and therefore, will abide by the Quartet conditions, which are a renunciation of violence, an agreement to all prior treaty obligations, and an acknowledgment of Israel's right to exist.

So those are the key pillars of our view. But I cannot at this -- it's just too early to give you an answer on it.

Q On this Iraq debate, you say that President Bush or his aids spoke with Mitch McConnell or Judd Gregg about their legislative strategies?

MR. SNOW: I don't think so, but I just don't know. I can't tell you. But look, on something like this, we are certainly keeping an eye on it. But members of the Senate, Republicans and Democrats, they're grown ups. They can -- they can deal with their own issues on this. We are keeping an eye on it. But again, I think any notion that the White House is somehow trying to micro manage that is something that I think senators would find unwelcome, and you would have heard about.

Q It must be the reverse. I mean, what Gregg proposed is something the White House looked like they would be comfortable with, maybe you called over there.

MR. SNOW: Well again, I'm not going to characterize, but we've got an eye on all of them. We're certainly -- we're staying informed about it, but on the other hand, as you see with what happened last night, I'm not sure a lot of members of the Senate know that the letter was coming out from the seven. They've got their strong feelings, and they're going to proceed as they feel appropriate.

Q Tony, the President had groups of senators down to the White House for a reception a week, or 10 days, or so ago. Wasn't that, at least in part, trying to express influence over the --

MR. SNOW: No. I was in the meeting. I guarantee you, members there were expressing their concern about Iraq. There was -- as well as a number of other issues. This was not an attempt to sit around and strategize about resolutions.

Certainly the topic came up, but again, it's just -- this is not one where if the White House is trying to dictate language -- these are senators. Senators have their own sense of pride and their own obligations to be working through these things, and these are unique because these are resolutions that have to do with the sentiments of the senators themselves. You can't dictate that.

Q Does the President think that the role of the Commander-in-Chief is so powerful that he can ignore the will of the people as manifested in the election and also in Congress?

MR. SNOW: Helen, if you can find somebody who says that they want us to fail in Iraq, then perhaps --

Q That's not the question. I --

MR. SNOW: No, what you asked was a very vague question about the will of the people.

Q It's not vague.

MR. SNOW: Yes, it is, because if you want to talk --

Q I want you to -- do you think the power of a Commander-in-Chief is so all powerful that he can ignore the people?

MR. SNOW: The President never ignores the people. And that's why it's a tendentious assumption on your part that somehow the President runs roughshod over the will of the people. But he does have an obligation to keep the people safe --

Q -- ignored --

MR. SNOW: No, he doesn't -- if you get a non-binding resolution, he certainly is not going to ignore it. But on the other hand, he's going to do what it takes to keep you safe, and everybody in this room safe.

Q That's not the question.

MR. SNOW: Oh, yes, it is. Au contraire, Helen.

Q It is, is he going to ignore --

MR. SNOW: I got to tell you, you've got to understand in this particular case, when the President is thinking about national security, he understands the importance of opinion. He shares people's opinion that what's going on is --

Q (Inaudible.)

MR. SNOW: What do you think --

Q -- responded to it?

MR. SNOW: He's responded to it. He's responded to it by laying out a new way forward --

Q (Inaudible.)

MR. SNOW: Well, it will be interesting. Let's see how the debate unfolds and let's also see how facts on the ground unfold in Baghdad.


Q On North Korea, there are reports there may be an agreement coming in the six-party talks. So I'm wondering what you think -- what's your feeling, are you optimistic we'll get an agreement coming out of that? And secondly, the reports are that some kind of an agreement where North Korea would suspend activity at its Yongbyon nuclear plant in exchange for easing some of the financial --

MR. SNOW: I'm unaware of all of those at this point. Let's not negotiate from the podium, let's see what happens. We have always -- our view is that we need to return to the September 19th agreement, which includes the suspension of all enrichment and reprocessing activities, and that they need to sit down and they need to deal with us. So let's -- that is what we're hoping. We know at this point the Chinese, I think, are going to be putting an offer on the table, but it's really not fruitful to be trying to speculate about possible proffers. Let's see what happens at the table.

Q But as a principle, would it be appropriate to ease any of the financial measures that the U.S. has imposed on North Korea for anything short of a full dismantling of that nuclear program?

MR. SNOW: Again, as a principle -- we've already laid out what our principle is, which is the September 19th accords. In terms of trying to get into what may be going on in the negotiations, it's also, as a principle, not wise to get ahead of yourself. But let us -- what we have made clear is that the action that's been taken financially has to -- involves criminal activity in terms of counterfeiting U.S. currency.

Q Thank you, Tony. Two questions. News reports last week listed two days in which 70 Palestinians were killed by other Palestinians in the Fatah-Hamas killings of each other. Since they have continued killing each other, along with many Israeli civilians as they can, why is U.S. money by the millions being still sent to what is hardly a government as much as a conclave of competing terrorists who refuse -- still refuse, as I understand, to recognize Israel?

MR. SNOW: Well, to the extent that there is aid, it is going to forces that are actually trying to put an end to violence rather than to foment it.

Q Okay. The Democrats, along with some Republicans in the Senate, apparently are planning to express their dissatisfaction with attempts to bring about victory in Iraq by opposing more U.S. troops being ordered there. And my question: What is the alternative if winning isn't pursued and defeat isn't acceptable?

MR. SNOW: You're asking me -- this is actually even more chin-pulling than the earlier inquiry in the sense that you're asking me to respond to something that has not formally been proposed. The President has made it clear, we've got forces going into the field --

Q Are you saying --

MR. SNOW: You know, it will be interesting, I don't have the crystal ball. Members of Congress have a very serious -- they're going to have some serious decisions to make about whether to continue their support for forces in the field. A lot of people pointed to what General Pace had to say yesterday -- one of the most important things he had to say is that the measure the troops are going to use about whether they're supported is whether their activities are going to continue to be supported by members of Congress when these things come up for a vote. And I'm not talking about a resolution, I'm talking about continued funding.


Q The House Ways and Means Committee has indicated that they're planning to advance the minimum wage bill that has a small amount of small business tax breaks in it, sizably less than the Senate. Is there any set amount that you want to see? Would that be acceptable?

MR. SNOW: Again, abiding by my rule expressed earlier to Jonathan, I'm not going to negotiate against ourselves up here. We're going to have to see what comes out of a conference. We do think it is a welcome sign that the House is considering relief for small businesses because they're the providers of the bulk of minimum wage jobs, and you want to make sure that the businesses are still around to provide those jobs so that people can get their first jobs and start moving up the economic ladder.

Q And also, the White House yesterday issued an open letter on climate change --

MR. SNOW: Yes.

Q -- and in it there is cited a National Academy of Science study, but it doesn't include in it part of the National Academy of Science conclusion that the verdict is still out to the extent that natural greenhouse cycle contributes to climate change, versus the human generation --

MR. SNOW: Are you talking about the 2001 report?

Q Right. I'm talking about the reference in the open letter to the President's speech, which doesn't include -- in fact, it doesn't even include one sentence in the paragraph it is cited.

MR. SNOW: So you're saying that we didn't heavily footnote the President's speech. I think if you go back and take a look at the status of science in 2001 -- I'm sorry, that was a cheap shot, and I apologize. You go back and look at the state of science in 2001, both with the National Academy of Sciences and the IPCC, you find that there was considerably more uncertainty about the nature and causes. In fact, go back and look at the 2001 IPCC report, and you will find that human activity is seen as likely, as opposed to very likely in the more recent report, and the percentage of likelihood was considerably lower than it is today.

What the President was calling for in 2001 is good science. And over the first six-plus years of this administration we've committed, as I pointed out yesterday, $9 billion to climate change science, which is more than any other country on Earth. And it is largely as a result of that research that the IPCC issued its findings.

Q But my question is also in reference to what you said yesterday, which is that you said in 2001, the President said, human activity is a significant factor, when in fact, as you just said, the verdict was still out on that.

MR. SNOW: Yes, but what he did, it still said -- here's what it says: "The National Academy of Sciences indicate that the increase is due in large part to human activity." You're right. He didn't use the term significant. He used the term "in large part."

Q Yes, but you also in that paragraph did not include what was in the President's speech which, prior to the sentence he read -- and this is what they're referring to -- an increase in greenhouse gas emissions, particularly CO2.

MR. SNOW: Right.

Q Yes, but this gives the impression that what you're referring to is that it's the actual increase of surface temperatures of the Earth that is in large part due to human activity, when in fact, in his own speech, that reference to increase --

MR. SNOW: No, Paula, you're trying too hard. You're trying too hard. If you look at the quote that we -- here's the President's full quote: "There is a natural greenhouse effect that contributes to warming. Greenhouse gases trap heat and thus warm the Earth because they prevent a significant portion of infrared radiation from escaping into space. Concentration of greenhouse gases, especially CO2, have increased substantially since the beginning of the industrial revolution. And the National Academy of Sciences indicate that the increase is due in large part to human activity."

It then goes on to say that the science is unsettled and it is less settled today in large part because we've ponied up the money and we've funded the scientific research to try to get at it. What the President was talking about back then and continues to talk about is putting money behind good science.

Q Thank you for putting that full paragraph into the record.

MR. SNOW: Yes, happy to do so.

Go ahead.

Q Can I ask you about FEMA, specifically the idea of cutting 14 percent from FEMA's budget? What is the administration's thinking on that?

MR. SNOW: Look, I'm going to have to go back. Are we talking about 14 percent straight cut, or 14 percent against the baseline?

Q Well, it's the $800,000 -- I'm sorry $800 million.

MR. SNOW: Okay, I don't know. Neither you nor I know enough about this one right now. Give me a call and I'll get you an answer. I don't have a good FEMA answer on me right now.

Q Can I just clarify something on Pelosi? You said you spoke with her office today and then "we're supporting them," supporting the Speaker's use of a military plane for transportation?

MR. SNOW: Yes.

Q Or their desire to fly -- that she be able to fly nonstop?

MR. SNOW: Their argument is -- all they're doing is -- the Sergeant at Arms is conducting negotiations, and everybody else seems to be getting knitted up against this. I'm not going to get into middle of negotiations about the way it works. When Tom Foley was Speaker, he sometimes used military transport and stopped in North Dakota, but that doesn't mean -- I think this is something that the Sergeant at Arms and DoD have to work out.

Q It's probably North Dakota.

MR. SNOW: I know. He was --

Q Tom Foley?

MR. SNOW: Yes, I know. He was from Washington state. He had to stop to get gas so he could complete the journey.

Q So what was your phone call about?

MR. SNOW: Just to -- just making sure that they understood what our position was on this, which is that the Speaker of the House deserves DoD transport.

Q But not necessarily a nonstop flight --

Q (Inaudible.)

MR. SNOW: Because this thing came out shortly before the press conference. I spoke to them considerably before.

Q But she doesn't necessarily have -- she's not necessarily entitled to a nonstop flight to California.

MR. SNOW: Well, you've got to take a look at -- you've got a whole series of craft. And not every one is available at each and every time. You're talking about a limited fleet. The jet that Speaker Hastert used probably gets you about halfway across the country. They got G-3s and G-5s that can get you all the way. There's a 757, but the Vice President usually gets that one. So you've got to keep in mind that it's -- sometimes there are -- the craft will be available, and sometimes they won't be. And I think, again, everybody is busy trying to pick a fight on this one. Let the Sergeant at Arms and DoD work through this, and then everybody can make their final commentary.

Q Tony, as President travels to the neighboring countries, immigration will be the major topics of his trip.

MR. SNOW: The South America trip? No.

Q Well, because in the past Mexico has -- immigration issue will be solved, illegals in this country -- but where do we stand as far as the immigration issue is concerned because I'm sure this will be a major topic also in the coming elections as in the past?

MR. SNOW: Well, let me correct. For instance, in Brazil, we'll be talking about energy independence, and we'll be talking about trade. In Uruguay, it's a reciprocal trip, and they'll do bilateral issues of interest. In Bogota, we're going to talk about President Uribe's commitment to battling narco-terrorism.

and also improving the lives of the Columbian people. When we're in Guatemala, they're going to reemphasize the close relationship between the countries. And obviously in Mexico, we're going to be supporting the President's efforts to address poverty, income equality, law -- restoring law and order, fighting the common threats of drug trafficking, and strengthening the economic relationship.

So those -- I think to deal with this as strictly an immigration trip is, I think, to underplay the significance of the trip, because there will be a lot of discussions of trade. And things like addressing poverty, income equality, drug trafficking, law enforcement, those all have a role also in dealing with the immigration problem.

Q But don't you think he will -- immigration in Mexico, particularly because Mexico has a major role. More illegals are from Mexico in this country --

MR. SNOW: The numbers have been going down pretty significantly in the last year. We continue to be committed to having the borders where -- to securing our borders, and at the same time, dealing with the problem of those who have come here illegally, and what you do --

Q Should price be, or cost be an element in deciding which airplanes might be available to the Speaker? Because as you -- well, it costs more --

MR. SNOW: This is -- Ann, this is not a negotiation. What I -- please ask the Sergeant at Arms and ask the Department of Defense. I'm not getting -- this is not our negotiation. They're dealing with it.

Q -- what are you supporting --

MR. SNOW: The fact that the Speaker is entitled to a Department of Defense aircraft pursuant to an agreement that was made after September 11th.

Q But an airplane at any cost, security at any cost?

MR. SNOW: Again --

Q You don't think cost should be a factor?

MR. SNOW: I'm not aware that this is the primary concern at this point. I don't believe she's asking to be sent on -- you know, in the space shuttle. (Laughter.)

Q Would you like her to be put on the space shuttle, Tony? (Laughter.) I didn't hear an answer to that.

Q The 757 costs more to operate than the Gulfstream --

MR. SNOW: Well again, that's almost all -- that's more likely going to be set aside for the Vice President. What I was trying to do is to give people a sense of the variety of aircraft that are available, and it's a fairly limited fleet. So that's all I was trying to do there. I believe I noted at the time that the Vice President almost always has access to the 757.

Thank you.

Posted: Feb 9 2007, 03:04 PM

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For Immediate Release
Office of the Press Secretary
February 9, 2007

Memorandum for the Secretary of State

SUBJECT: Implementation of Sections 603 and 604 of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228)

Consistent with the authority contained in section 604 of the Foreign Relations Authorization Act, Fiscal Year 2003 (Public Law 107-228) (the "Act"), and with reference to the determinations set out in the report to the Congress transmitted pursuant to section 603 of the Act, regarding noncompliance by the Palestine Liberation Organization (PLO) and the Palestinian Authority with certain commitments, I hereby impose the sanction set out in section 604(a)(2), "Downgrade in Status of the PLO Office in the United States." This sanction is imposed for a period of 180 days from the date hereof or until such time as the next report required by section 603 of the Act is transmitted to the Congress, whichever is later. You are authorized and directed to transmit to the appropriate congressional committees the report described in section 603 of the Act.

Furthermore, I hereby determine that it is in the national security interest of the United States to waive that sanction, pursuant to section 604 of the Act. This waiver shall be effective for a period of 180 days from the date hereof or until such time as the next report required by section 603 of the Act is transmitted to the Congress, whichever is later.

You are hereby authorized and directed to transmit this determination to the Congress and to publish it in the Federal Register.


Posted: Feb 9 2007, 03:28 PM

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For Immediate Release
Office of the Press Secretary
February 8, 2007

President Bush Discusses Department of Homeland Security Priorities
Department of Homeland Security
Washington, D.C.

4:20 P.M. EST

THE PRESIDENT: Mr. Secretary, thank you very much for the hospitality. I appreciate you inviting me over to hear what has been a substantive briefing by your different operating entities.

First of all, I'm very proud of the hard work of the men and women of the Homeland Security Department. This vital department is actively engaged in the war on terror. We are still a nation at risk. Part of our strategy, of course, is to stay on the offense against terrorists who would do us harm. In other words, it is important to defeat them overseas so we never have to face them here. Nevertheless, we recognize that we've got to be fully prepared here at the homeland.

Part of that preparation requires a robust budget. We submitted the budget, you testified on the budget. It's about an 8 percent increase in the budget of the Homeland Security Department.

This department works to secure our borders. I appreciate very much, Ralph, you and your department's hard work of doing a difficult job, and that is doing what the American people expect and that is to have secure borders. But we're making good progress. We're modernizing a border that needed to be modernized, whether it be through fencing or the different types of high-tech investments.

I firmly believe that in order for your Border Patrol agents to be able to do their job, we need a guest worker program so that people don't have to sneak in our country, and therefore, we can really enable your good folks to be able to focus on terrorism, drug runners, gun runners.

I appreciate so very much the fact that we've got a wise strategy to effect the security of our ports and cargo. We've got a lot of good people working hard overseas. In other words, we're inspecting cargo before it leaves a port -- foreign port -- so that the first line of defense is away from our shores, or away from our ports. And we've got a lot of good people working hard to achieve that.

I appreciate so very much the effort of TSA. You've got a hard job. It's a job that really was a response to 9/11, and that is we don't want people getting on our airplanes that will terrorize our fellow citizens again. I fully recognize that there are thousands of hardworking people that are trying to do their best to, on the one hand, accommodate our fellow citizens as they travel; on the other hand, protect our country from attack.

We also talked about the need to have effective response if there is a emergency, if there is a catastrophe. And one agency that has been under fire and that needed to be reorganized was FEMA, and I asked David Paulison to do just that. We took the lessons learned from Katrina and applied it to this vital agency. And this agency was recently tested through the tornadoes there in central Florida. And I want to thank you, Dave, and your team for a quick response to help the poor citizens who were affected by that natural disaster.

The Department of Homeland Security was initially melded together by organizations that tended to be stove-piped -- independently run organizations that we felt needed to be brought under the central planning, the central organizing principle of a single department. The organization of such a vast enterprise has been difficult and complicated; nevertheless, there is noticeable and substantial and measurable progress.

And I appreciate all the hardworking folks for putting together an institute, part of our government, all aiming to protect the American people.

And so, Secretary, thank you for the invitation. I appreciate the hard work of the people of this department. I oftentimes say to the American people that you can go about your business, you can run your enterprises, you can send your children to school, knowing full well that there are thousands of our fellow citizens who work every day, 24 hours, to help you by protecting this homeland. And this is where it all starts. And I thank you for your hard work.

Thank you.

Posted: Feb 12 2007, 04:57 PM

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MR. SNOW: Questions.

Q Wow. (Laughter.)

Q Tony, the Democrats are out with their proposed --

Q Answers. (Laughter.)

MR. SNOW: Please, Steve is trying to speak here. We believe in decorum.

Q The Democrats in the House are out with their resolution -- fairly straightforward. Is this something you can live with?

MR. SNOW: Look, Congress is going to do whatever it thinks it needs to do, in terms of resolutions. We're not going to get into the business of writing them. What the President lives with is the responsibility of being an effective Commander-in-Chief and advancing the cause of a democracy in Iraq. Although members of the House did not have an opportunity to vote on General Petraeus, members of the Senate did, and without objection they voted for him. And we believe that he ought to get what is necessary to move forward in Iraq.

So as we have said in all cases, members need to understand that their words do travel, and they need to assess what impact they think they may have. But other than that --

Q Tony, to be more specific on that point, there were Republican talking points on the Hill floating around that say that this House resolution Steve mentioned will, "weaken troop morale," and will, "give comfort to the enemy." Do you agree with that assessment?

MR. SNOW: Don't know. I mean, I've always said that -- and the President has said that those are things that people have to take into account. Certainly, General Petraeus and Secretary Gates thought that they would have an adverse impact when it came to morale, and also that they may provide some comfort to the enemy. But, again, I think these are serious matters that people voting on the resolution are going to have to take into account.

Q But the resolution, itself, the first line says that the United States Armed Forces are serving and have served bravely and honorably in Iraq. I mean, it's very clearly stating that the supporters of this resolution -- there is one Republican who has signed on -- believe that U.S. soldiers have served bravely and honorably. So what's the --

MR. SNOW: Okay, so they don't want to provide the additional support for their mission, and that helps how?

Q That's for them to answer. But they say that --

MR. SNOW: That's what I'm saying.

Q Okay. Well, then what is your problem with it? Because specifically after saying that they believe U.S. soldiers have served bravely and honorably, it says Congress disapproves of the decision of President Bush announced on January 10th to deploy --

MR. SNOW: Well, we disagree, and the President is Commander-in-Chief, and he has the obligation to do what he thinks is best to make this country safe, and that's what he's doing.

Q Doesn't the Congress have the obligation to weigh in on it?

MR. SNOW: Congress has the option of it. Members of Congress can express themselves however they wish.

Q This brings up sort of a very interesting point that I think, if we pull back a second, that a lot of Americans are probably engaged in trying to get their arms around. There was an op/ed piece yesterday by a former Director of the NSA and a former Army senior intelligence official, and he asked the question, can you support the troops and still call for bringing them home? Is the only way to support the troops to follow out what -- follow what the President's sort of continued mission is? What do you think of that?

MR. SNOW: Well, what I think is I'm not going to quite rise to that bait, but I'll give you an answer that is responsive. The way you support the troops is help them complete their mission successfully. That's how you support them. And after a very long period of review, the President and senior military commanders came to the conclusion that it will require additional troops, but a completely different kind of mission.

I think there's a common misperception that all we're doing is we're throwing an extra 21,000 into exactly the same mission that existed before. You've got a different structure with the Iraqis, you have different rules of engagement, you have a different approach to trying to deal with problems of violence -- including integrating economic development teams, the provisional reconstruction teams -- in areas where we have cleared out some of the bad guys.

So the fact is, this is a significantly different approach to dealing with the problems of violence, especially in Baghdad, Anbar province and a couple of other places within Iraq. And, therefore, in order to make this particular approach succeed, the President came to the conclusion you need five brigades in Baghdad and you need another 4,000 Marines in Anbar.

Q Clearly, the underpinnings of what the President -- why the President decided on the policy he did -- and I don't think this is bait. I think it's a very important philosophical question, because right now, the way it's configured, you can't say "bring them home" without being accused of not supporting the troops.

MR. SNOW: Well, again, if "bring them home" -- I want somebody to fill in the blanks: Bring them home achieves victory in the following way. If the simple goal is to bring them home, that is different than having a goal of providing victory in Iraq, providing an Iraq that can stand up as a democracy. And we have said from the very beginning the members of Congress, yes, they've got a chip in the game, and one of the things they can do is that they can offer their own plan that they think is going to be -- if they think that they have a superior way to have a democracy that's going to be stable so that you do not have the opportunity for al Qaeda to use Anbar province as a launching pad; so that you do not create a power vacuum that may allow other nations to come in and try to take advantage of chaos within Iraq; and you do not set off a series of consequences throughout the region that may, in fact, make us less safe, make that region less stable and make the globe a less peaceful place.

So you put all that together, there are real consequences to leaving before the job is done. And if critics have a better way of achieving the aims that we've laid out, we'd love to hear them.

Q When he makes the speech this week on Afghanistan, is he going to be making the case for military buildup or at least --

MR. SNOW: I'll let the President make whatever case he wishes to make. We have talked about having more resources in Afghanistan.

Q And, also, does the administration have any evidence that Iran is becoming more involved in Afghanistan?

MR. SNOW: I'm not aware of any findings to that effect. The real key -- the destabilizing factors in Afghanistan largely have been al Qaeda or Taliban remnants. That's a much different thing, as you know. It tends to be Sunni violence. In any event, the key level of concern in the southern part of Afghanistan tends to be, again, attempts to rebuild the Taliban or to have fighters coming in across the Pakistani border.

In terms of going any more in depth into the intelligence, it's inappropriate for me to do it. I direct you to DNI.

Q Tony, the senior military officials made this presentation in Baghdad on background about the evidence against Iran active inside Iraq. Can you talk about the significance of that presentation, about its timing, and what it really means in context of the war right now?

MR. SNOW: What it means is that there is evidence that there's been some weaponry coming across the border into Iraq and it's being used to kill Americans. And it explains why the administration -- why our military commanders are doing what they can to try to interdict any movement of weapons into the theaters of battle so we can save American lives. It really is a -- it's a force protection issue.

So why in Baghdad? Because that's where the action is and that's where people are collecting things. Why on background? Because one of the key briefers otherwise could not participate, and we thought it was important to get information to reporters. Why then? Because the information was ripe and it had been scrubbed and therefore was ready for presentation. But I don't want to make more or less of it than it was.

Q You and others have said repeatedly that the U.S. is not preparing for war against Iran. Yet administration critics continue to say this is making the case for action against Iran.

MR. SNOW: These guys are trying to create an issue maybe for their own political fortunes, and they need to stop it. This is clearly a case where people are hyping something up. I don't know how much clearer we can be: We're not getting ready for war in Iran. But what we are doing is we're protecting our own people. And we're going to do it, and we've made it clear that that is going to be a priority.

We have also said to the Iranians, look, you really do have an opportunity to get yourself into the global community in a way that is going the reflect not only the long glory of the Persian culture, but also an opportunity for Iran to be a member in good standing of the international community, with many of the things that it has always seen as benchmarks of respect, including civil nuclear power. So we continue to work diplomatically with the Iranians. The President has made it absolutely clear that he believes in pursuing diplomacy. We have a number of partners who have been working with us on it, and we will continue to make our views known that way.

Q Tony, when Diane Sawyer interviewed Iranian President Ahmadinejad earlier today, he said that this presentation was based on fabrication. Is the U.S. administration confident that there is conclusive evidence that Iran is providing these weapons to Iraq?

MR. SNOW: Yes.

Q And what's the administration's reaction to Ahmadinejad's claim that Iran is promoting peace in the region?

MR. SNOW: Well, it's got funny ways of showing it. We think the Iranians -- if they want to promote peace, they need to stop funding Hezbollah, they need to stop funding terrorist organizations around the world; they need to stop moving in the direction of developing nuclear -- enriched uranium or plutonium in a way that could be used for nuclear weapons. And they also have an opportunity to demonstrate their own peaceful desires by, in fact, meeting the conditions that have been laid out for returning to the table with the U.S. and other partners.

So, I mean, I think that's probably the key here. We would love for the Iranians, in fact, to be a force for peace in the region. It would be good for them, it would be good for the region. And we've laid out very strong inducements that we think make it perfectly sensible for them to do so.

Q As far as democracy and freedom is concerned, beyond Iran, last week Secretary of State Dr. Rice was on the Capitol Hill before the Senate. And many senators, including -- especially Senator Lugar was very critical of what the Secretary was saying. He's saying that, as far as democracy and freedom is concerned in Pakistan, that it must (inaudible) terrorism is concerned, because he is not very helping. And upcoming election is not going to be fair and free, and General Musharraf must step down and --

MR. SNOW: What? I'm sorry, there have been so many parts to this --

Q Actually, about the elections -- upcoming elections in Pakistan, and also democracy and freedom in Pakistan.

MR. SNOW: We obviously advocate the continued progress toward democracy everywhere.

Q Tony, going back to something you said earlier, is there anything in the resolution that denies Petraeus what he needs, inherent in that resolution?

MR. SNOW: No, because Congress -- the budgetary authority already exists for dispatching the five brigades and the 4,000 Marines. At some point, if Congress wishes to get back into the business, obviously there are going to be some budgetary decisions to be made later this year. But in the short run, no.

Q Do you support the statements made by Prime Minister Howard of Australia about the deadline? And has President Bush been in contact with him since the statement?

MR. SNOW: The answer to the second is no, and the answer to the first is we're not commenting on Democratic candidates. People have tried to get us to bite on that a number of times. What's going to happen is that Democratic candidates are going to be standing for election. Most of them -- I think they all oppose the President's policy in Iraq, so they're going to have to describe how to make the world safer.

Meanwhile, the President is trying to put in place the tools that are going to allow the next President, Democrat or Republican, to be able to exercise Commander-in-Chief responsibilities with the kind so tools necessary to succeed, and that includes everything from the Patriot Act, the Terror Surveillance Program, putting in place the vital tools to fight effectively a war on terror that surely will continue into the future, not merely in Iraq, but elsewhere. And as each and every one of these candidates hits the hustings, they're going to have to make their case about why they're going to be better as a Commander-in-Chief.


Q What direct evidence do you have that Iranian leaders authorized the smuggling of weapons into Iraq?

MR. SNOW: What I first would do is just point you back to the briefing. What they have are a number of serial numbers, and so on. I'd just take you back to the transcript on that. If you're looking for the granular evidence, that's what they presented.

Q But that wasn't direct evidence linking Iran --

MR. SNOW: Let me put it this way: There's not a whole lot of freelancing in the Iranian government, especially when it comes to something like that. So what you would have to do, if you're trying to do the -- to counter that position, you would have to assume that people were able of putting together sophisticated weaponry, moving it across a border into a theater of war and doing so unbeknownst and unbidden.

Q Could I just follow it just one more time? So the direct evidence would be the assumption, then, that it would have to be Iranian --

MR. SNOW: Again, what I would suggest, Victoria, if you really want to go into the details, is you go to Embassy Baghdad, because they're the ones who do the briefing. This really is -- it's a force protection matter. That's why they did the briefing. And I'm not going to be able to give you all the jot and tittles on it. That's why -- if you want to call them, or call DoD, they'll be able to give you more detail on it.


Q I thought you were going to be calling on me. You said you would call on me first --

MR. SNOW: No, I think I actually said Victoria. I didn't say April. I did look in your direction, however.

Q You did call on me, because --

MR. SNOW: Sorry if I created offense.

Q I will certainly yield to this lady on my right.

MR. SNOW: You know, I believe many people will be grateful for that. Go ahead. (Laughter.)

Q Following up with Jessica and Victoria's question. Tony, the American public is somewhat leery of the intelligence issues with the United States, because especially after Iraq, they found that a lot of the intelligence was faulty on Iraq. And word is from those in the security community, national security community, that our intelligence is much less -- it's maybe just as faulty or worse on Iran. How can you say for sure and for certain what you're saying from the podium?

MR. SNOW: Well, number one, again, I would refer you back to the people doing the briefing. And this -- there is no question when you have these enhanced devices, these IEDs, they have them -- they're there. So you do have direct physical evidence that, in fact, the weapons are being used within Iraq. There's no question that they're being used, and they are, in fact, of enhanced lethality. And we are doing our best to respond as quickly as possible to the challenge presented by it.

April, the most important thing to understand here -- again, I think what's happening is a lot of people keep trying to hype this into a casus belli with the Iranians -- no, it is simply a matter of force protection with the United States. Our people laid out what they think -- "our people," that is, the Pentagon -- and the briefers in Baghdad laid it out. They're the ones who have the evidence. And if you want to get into the evidentiary findings, you're going to need to talk to the Pentagon about it.

Q Do you think the American people deserve a little bit more than deduction? I mean, the evidence --

MR. SNOW: I think what the American people -- what our troops deserve is somebody who is going to protect them. Now, you cannot deny these weapons exist. You cannot deny that there is presently no manufacturing capability within Iraq able to produce those kinds of weapons. Beyond that, again I point you back to Defense briefing. What the American people need is somebody who is going to say we're going to protect our people from these weapons. The weapons exist. People have got to look at it, they've got to look at what happens when they detonate. It's hard for me to argue that that's a phantom menace. And it's also a lot harder to argue to our troops, who have been getting hit by them.

Q Tony, Senator Feinstein has been authorized by Judiciary Committee Chairman Leahy to lead a Senate investigation of the case of former U.S. Border Patrol Agent Ignacio Ramos, who was assaulted by four other inmates in the federal prison in Yazoo City, Mississippi, about which Senator Feinstein said this -- and this is a quote -- "I urge the committee to look into why these agents are not being protected in the federal prison system. It is not hard to predict that two federal agents would be targeted in a prison population."

And my question, what is the President's reaction to this upcoming investigation and Republican Congressman Rohrabacher's warning of "impeachment talk if either of these agents is killed"?

MR. SNOW: You know, this is a time when cooler heads ought to prevail and facts ought to be presented. Therefore, we're perfectly happy with anything that will reveal the facts of this case. I think there are efforts ongoing and may yield fruit quite soon to get the full transcripts of the trial of agents Campion and Ramos out before the public, every syllable. You and your guys can read them. You know, obviously, we're concerned about the safety of anybody in the prison system.

Q As a former leader of baseball, what was the President's reaction to the death on February 9th of the greatest pitcher who ever lived?

MR. SNOW: And that would be?

Q Eddie Feigner, the King and his Court.

MR. SNOW: He actually may have been, Eddie Feigner having thrown, what, 280 perfect games? Having struck out more than 12,000 people? Having had a fastball in excess of 104 m.p.h.?

Q (Laughter.)

MR. SNOW: -- from time to time? Did you ever watch the King and his Court? (Laughter.) I don't know, but I think he's under-rated. I will speak completely independently.

Q Did you brief --

MR. SNOW: No, I'm a sports nut. Eddie Feigner --

Q Softball we're talking about?

MR. SNOW: Yes, we're talking about softball, Eddie Feigner, softball.

Q He struck out five in a row, of the top baseball player.

MR. SNOW: Of six. He faced six.

Q There were some reports it was 113 m.p.h.

MR. SNOW: I think it's time for WorldNetDaily to do more of its famous investigations.

Q Tony, I'm not sure you want to go back on this notion of freelancing in the Iranian government, but there's obviously a difference between saying, as they did in Baghdad, that some elements in the leadership --

MR. SNOW: Look, the Department of Defense is doing this. What I'm telling you is you guys want to get those questions answered, you need to go to the Pentagon, because they're the ones who have done the work on this.

Q But they've refused. I mean, you should be able to give us --

MR. SNOW: Well, actually, no. I didn't get briefed on it.

Q Well, there should be some kind of coordination, don't you think?

MR. SNOW: Well, actually, when you've got -- combatant commanders are out doing their work. You can pick up the phone and call the Pentagon. We'll be happy to supply numbers for you.

Q Give me the number --

Q How long have these EFPs been around, that the White House is aware of, in Iraq?

MR. SNOW: Again, I'd refer you back -- I think -- I don't want to fake it.

Q They've been reported for a few years, though.

MR. SNOW: Yes, but they've also been increasingly rather dramatically in use, I believe, if you take a look at it over the last year or so. They're a concern. But on the other hand, you've got to keep in mind, there's an attempt here to try to narrow the focus, so this becomes the grand showdown between the United States and Iran. What you have are weapons making their way in and we're going to try to stop it to protect our people. But there are plenty of other things going on. Al Qaeda is active, and you do have rejectionist cells, and you do have some activity -- you have militia activity.

And all these things need to be addressed in the context of a war. It's sort of a classic case of taking one piece and trying suddenly, boom, to make it the big story of the day or to try to internationalize it. This is what it is. They have found munitions, they've traced them to Iran. And, again, for all those further details, you can call the Pentagon and get what you need.

Q But that's not new, is it?

MR. SNOW: No, it's not -- thank you -- no, it's not new. It's not new. The concern is something that we've had for some time, and it's one of the reasons why, for instance, there's a new generation of armor that's being used for Humvees and other things.

Q Thank you. Tony, politics aside -- (laughter) --

MR. SNOW: Politics aside. (Laughter.)

Q Aside. Would the President like to get more troops in Iraq from Australia and other friendly nations? And what about NATO? Shouldn't we try to get NATO to send troops into Iraq, as well as Afghanistan?

MR. SNOW: Politics aside, he's the Commander-in-Chief of the United States, and I would defer to the commanders-in-chief of the other nations.


Q No Child Left Behind is up for reauthorization, and there's a somewhat controversial provision in there right now, requiring standardized tests for immigrant children after they've been here a year, regardless of their proficiency in English. Why is the administration opposed to alternative assessments for children who aren't proficient in the English language?

MR. SNOW: Paula, I cannot answer question. I will find out.

Q Tony, I just wanted to follow on what you were saying before, about the President -- with the resolutions flying around the Hill, what the President is doing. He's focused on trying to, you said, leave tools in place to fight the war on terror for the next President.

MR. SNOW: Correct.

Q What, then, do you say to the President of Russia, one of the President's allies, who is saying that the President's policies have actually made the Mideast more unstable?

MR. SNOW: That's actually not what he said. What he -- I've got the quote, maybe you've got a different one. He talks about greater and greater disdain for the basic principles of international law. He says --

Q Okay, let's start with that one, then.

MR. SNOW: Okay.

Q I mean, he said a litany of things --

MR. SNOW: Yes, he said a litany of things, and the fact is, the basic thrust of those is wrong. The United States continues -- we continue also to have Russia as a valued ally in this. For instance, you talk about the ongoing discussions with North Korea, the six-party talks, where we're working with the Russians; we have worked with the Russians on the GNEP program, which is an attempt to try to provide peaceful civilian nuclear energy, among others, to Iran. They're working with us on the Iranian front. We continue to work with them on matters of trade. We've continued to work on matters of intelligence and security.

If you take a look at the way this administration has dealt with international issues, it has always begun with an international diplomatic component, and will continue to. Secretary Gates will be in Moscow, I believe next week, and so --

Q But if you're working on all these things together, then why would President Putin come out and say, "uncontained hyper use of force ... bringing the world up to the abyss of one conflict after another." I mean, those are things --

MR. SNOW: I'd pose that to President Putin. The most important thing is, we continue to work together.

Q But how can you say on the one hand, you're working together on all these wonderful projects you just laid out, and on the other hand, he's saying the President --

MR. SNOW: On the other hand, he's delivered a speech. I would ask him.

Q Where are they on the kumbaya index?

MR. SNOW: I don't know. That's a very good question. I haven't heard him sing.

Q Tony, as far as the Iranian support for the Iraqi elements are concerned, do we know where the Iranians are getting those weapons they are supplying to the --

MR. SNOW: Why do you guys ask me intel questions that even if I knew them, it would be utterly inappropriate for me to answer?

Q And is this a warning to Iran, as far as --

MR. SNOW: No, no, no, no. I'm almost ready to hit my head on the microphone again. I'm not saying, but I'm saying -- (laughter.)

Q Is our President ignoring us? Does he want to have a news conference this week, maybe, and if so, when?

MR. SNOW: You'll be contacted at the appropriate time.

Q Thank you.

MR. SNOW: Thank you.

Q Tony, Tony --

MR. SNOW: Yes.

Q One -- The New York Times quotes Senator Clinton in Berlin, New Hampshire, saying in answer to a question about her vote for our military move into Iraq, "I've taken responsibility for my vote. Mistakes were made by this President, who came into office with an obsession to oust Saddam Hussein. I'm not a psychiatrist, I don't know all the reasons behind their concern. Some might say obsession."

Question: Will the President remain silent about this presidential candidate's charge that he is obsessed?

MR. SNOW: Yes, but I hope you will read them with equal feeling at all times. (Laughter.) You can do sort of a daily readout.

Thank you.

Posted: Feb 12 2007, 04:59 PM

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For Immediate Release
Office of the Press Secretary
February 12, 2007

Fact Sheet: The Economic Report of the President

"Our economy is on the move and we can keep it that way by continuing to pursue sound economic policy based on free-market principles."

- President George W. Bush, 2/12/07

Today, The White House Released The Economic Report Of The President. The Economic Report of the President is an annual report written by the Council of Economic Advisors. It overviews the Nation's economic progress and is transmitted to Congress no later than 10 days after the submission of the Budget of the United States Government.

The Full Economic Report Of The President Is Available At: http://www.whitehouse.gov/cea/pubs.html.
Chapter 1: The Year In Review And The Years Ahead

Economic Growth In The United States Has Been Above The Historic Average And Faster Than Any Other Major Industrialized Economy In The World. The economic expansion continued for the fifth consecutive year in 2006. This economic growth comes despite numerous headwinds, and results from inherent U.S. economic strengths and pro-growth policies. Chapter 1 reviews the past year and discusses the Administration's forecast for the years ahead. The key points are:

Real GDP posted above-average 3.4 percent growth in 2006. The composition of growth changed, with more coming from exports and business structures investment, while residential investment flipped from contributing to GDP growth in 2005 to subtracting from it in 2006. Consumer spending remained strong.
Labor markets continued to strengthen, with the unemployment rate dropping to 4.6 percent and payroll job growth averaging 187,000 per month. Real average hourly earnings accelerated to a 1.7 percent increase during the 12 months of 2006.
Energy prices rose sharply in the first half of the year, but then declined just as sharply in the second half.
Chapter 2: Productivity Growth

Strong Productivity Growth Underlies Much Of The Good Economic News From The Past Few Years. Productivity growth rarely makes the headlines, but is important to the Nation because higher productivity growth improves the outlook for economic issues such as standards of living, inflation, international competitiveness, and long-run demographic challenges. Chapter 2 reviews the sources of the recent strength in productivity growth, highlighting the role that flexible markets and entrepreneurship play in explaining cross-country differences. It also explains the benefits of productivity growth and discusses how policymakers can further promote it. The key points are:

Recent productivity growth has been primarily driven by efficiency growth (growth in how well labor and capital inputs are used) and by capital deepening (growth in the amount of capital that workers have available for use).
Openness to international trade and investment, and improvements in the education and training of the U.S. workforce, will continue to be important to long-run productivity growth.
Policies that encourage capital accumulation, research and development, and increases in the quality of our education system can boost productivity growth.
Chapter 3: Pro-Growth Tax Policy

Sound Economic Policy Begins With Low Taxes. Chapter 3 discusses the advantages of adopting a more pro-growth tax system. It reviews recent changes that have reduced tax distortions on capital investment decisions, and evaluates options to reduce such distortions further. The key points are:

The goal of pro-growth tax policy is to reduce tax distortions that hamper economic growth. Most economists agree that lower taxes on capital income stimulate greater investment, resulting in greater economic growth, greater international competitiveness, and higher standards of living.
The tax code contains provisions that discourage investment and create distortions that affect the level, distribution, and financing of capital investment.
Estimates from research suggest that removing these tax distortions to investment decisions could increase real gross domestic product (GDP) by as much as 8 percent in the long run.
Since 2001, temporary changes in the tax code have reduced the tax on investment. These pro-growth policies have stimulated short-run investment and economic growth. However, the temporary nature of the provisions eliminates desirable long-run economic stimulus.
Chapter 4: The Fiscal Challenges Facing Medicare

The President And Congress Should Work Together To Spend The Taxpayers' Money Wisely And To Tackle Unfunded Liabilities Inherent In Entitlement Programs Such As Social Security, Medicare, And Medicaid. Social Security, Medicare, and Medicaid are three entitlement programs in the United States that provide people with important economic security against financial risk. However, the projected long-term growth in entitlement spending is unsustainable because of the pressure it puts on future Federal budgets. It is crucial that reforms to these programs preserve the protection against financial risk that these programs provide without having negative effects on economic growth. Chapter 4 focuses on Medicare by examining the main reasons for its projected financial pressures and by discussing ways to improve the efficiency of the program and thus slow the growth of Medicare spending. The key points are:

Medicare spending is growing quickly, primarily because of the demographic shift to an older society and the increases in per-beneficiary medical spending driven largely by new technologies.
Rewarding providers for supplying higher-quality care and improving incentives for patients to choose higher-value care can both increase the efficiency and slow the growth of Medicare spending.
Chapter 5: Catastrophe Risk Insurance

Insuring Economic Losses Arising From Large-Scale Natural And Manmade Catastrophes Such As Earthquakes, Hurricanes, And Terrorist Attacks Poses Challenges For The Insurance Industry And For Federal And State Governments. Chapter 5 examines the economics of catastrophe risk insurance. The key points are:

In insurance markets, as in other markets, prices affect how people weigh costs and benefits. Artificially low insurance prices can discourage people from adequately protecting against future losses. For example, subsidized property insurance prices may stimulate excessive building in high-risk areas, potentially driving up future government disaster relief spending.
Government intervention in insurance markets can have unintended consequences, such as limiting the availability of insurance offered by private firms.
Insurers manage catastrophe losses by being selective about which risks to insure, designing insurance contracts to provide incentives for risk-reducing behavior, and charging prices that are high enough to enable them to diversify risk over time or transfer risk to third parties. By managing and pricing risk more effectively, government insurance programs can reduce the burden they impose on taxpayers and minimize negative effects on private insurance markets.
Chapter 6: The Transportation Sector: Energy And Infrastructure Use

We Must Continue To Diversify Our Energy Supply To Benefit Our Economy, National Security, And Environment. The transportation sector accounts for the majority of the petroleum consumed in the United States and whether plane, train, ship, or automobile almost all transportation is powered by petroleum. Understanding the petroleum market, and the ways in which consumers and firms respond to changes in world oil prices, is key to understanding the transportation sector. In addition to petroleum, the transportation sector also relies heavily on infrastructure. The key points of Chapter 6 are:

Recent increases in the price of oil and the external costs of oil have led to renewed interest by markets and governments in the development of new alternatives. Government can play a role in ensuring that external costs are taken into account by markets, but ultimately markets are best suited to decide how to respond.

Cars and light trucks are the largest users of petroleum. As a result, the fuel economy of the vehicles purchased and the number of miles that they are driven have a large effect on oil consumption.
Congestion is a growing problem in American urban areas. Cities and States have shown a growing interest in and capacity for setting prices for road use during peak periods to reduce the full economic costs of congestion.
Chapter 7: Currency Markets

Open Commerce And Financial Markets Allow Productivity To Flourish. The need for international transactions provides the impetus for a huge, well-functioning market that facilitates currency conversions and allows global economic integration and trade to occur smoothly and quickly at low cost. Both by volume of trade and ease of making transactions, currency markets today are the world's deepest, most liquid markets. Currency markets range from common markets where parties simply exchange one currency for another to sophisticated markets where parties buy and sell currencies far into the future. The key points of Chapter 7 are:

Foreign-exchange markets allow firms to trade goods and services across borders, and to manage the risks they face from fluctuations in the price of their domestic currency.
As with any other good, the exchange value of a currency is determined by its supply, as well as the demand for the country's assets, goods, and services.
Over much of the 20th century, countries tended to favor fixed exchange rates, but in recent decades there has been a shift toward freely floating exchange rates.
Monetary and exchange-rate policies are tightly linked. A nation's government must decide between controlling its exchange rate and controlling its domestic inflation rate.
Chapter 8: International Trade And Investment

We Must Keep Our Economy Open And Break Down Barriers To Trade And Investment Abroad So Our Workers And Consumers Can Continue To Enjoy The Benefits Of Global Commerce. The United States derives substantial benefits from open trade and investment flows. Over many decades, increased trade and investment liberalization has been an important catalyst for greater productivity growth and rising average living standards in the United States. The key points of Chapter 8 are:

Looking ahead, international trade liberalization in services presents significant opportunities for U.S. workers, firms, and consumers.
Foreign direct investment (FDI) flows into the United States benefit the U.S. economy by stimulating growth, creating jobs, promoting research and development that spurs innovation, and financing the current account deficit.
U.S. direct investment abroad is an important channel of global market access for U.S. firms. U.S. multinational companies have contributed to productivity growth, job creation, and rising average living standards in the United States.
Chapter 9: Immigration

To Improve Border Security, Reduce The Number Of Unauthorized Workers, And Maintain The Economic Benefits Of Immigration, We Must Pursue Comprehensive Immigration Reform. The United States is a nation of immigrants and a nation of laws, and we value both historical legacies. Immigrants continue to make positive contributions to our Nation and our economy, yet our current immigration laws have proven difficult to enforce and are not fully serving the needs of the American economy. The key points of Chapter 9 are:

International differences in economic opportunities and standards of living create strong incentives for labor migration. Once established, migration flows from a certain region tend to be self-perpetuating.
Foreign-born workers make significant contributions to the American economy, but not all Americans gain economically from immigration. Foreign-born workers tend to be concentrated at the low end and the high end of the educational spectrum relative to native-born workers.
Immigration policy plays a key role in determining the volume and composition of the foreign-born workforce. Comprehensive immigration reform can help ensure an orderly, lawful flow of foreign-born workers whose presence continues to benefit the American economy.

Posted: Feb 12 2007, 05:00 PM

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For Immediate Release
Office of the Press Secretary
February 12, 2007

Nominations and Withdrawal Sent to the Senate

Carol D'Amico, of Indiana, to be a Member of the Board of Directors of the National Board for Education Sciences for a term expiring November 28, 2010.

Perry R. Eaton, of Alaska, to be a Member of the Board of Trustees of the Institute of American Indian and Alaska Native Culture and Arts Development for a term expiring May 19, 2012, vice A. David Lester, term expired.

Ford M. Fraker, of Massachusetts, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Kingdom of Saudi Arabia.

David C. Geary, of Missouri, to be a Member of the Board of Directors of the National Board for Education Sciences for a term expiring November 28, 2010, vice Roberto Ibarra Lopez, term expired.

Eric Alan Hanushek, of California, to be a Member of the Board of Directors of the National Board for Education Sciences for a term expiring November 28, 2010.

Janis Herschkowitz, of Pennsylvania, to be a Member of the Board of Directors of the National Consumer Cooperative Bank for a term of three years, vice Rafael Cuellar, term expired.

Marylyn Andrea Howe, of Massachusetts, to be a Member of the National Council on Disability for a term expiring September 17, 2008, vice Glenn Bernard Anderson, term expired.

Sonya Kelliher-Combs, of Alaska, to be a Member of the Board of Trustees of the Institute of American Indian and Alaska Native Culture and Arts Development for a term expiring May 19, 2008, vice Michael A. Naranjo, term expired.

Zalmay Khalilzad, of Maryland, to be Representative of the United States of America to the Sessions of the General Assembly of the United Nations during his tenure of service as Representative of the United States of America to the United Nations.

Zalmay Khalilzad, of Maryland, to be the Representative of the United States of America to the United Nations, with the rank and status of Ambassador Extraordinary and Plenipotentiary, and the Representative of the United States of America in the Security Council of the United Nations.

Brenda L. Kingery, of Texas, to be a Member of the Board of Trustees of the Institute of American Indian and Alaska Native Culture and Arts Development for a term expiring May 19, 2012, vice John Richard Grimes, resigned.

Julie E. Kitka, of Alaska, to be a Member of the Board of Trustees of the Institute of American Indian and Alaska Native Culture and Arts Development for a term expiring May 19, 2012, vice Katherine L. Archuleta, term expired.

Kristine Mary Miller, of Colorado, to be a Member of the Board of Trustees of the Institute of American Indian and Alaska Native Culture and Arts Development for a term expiring May 19, 2010, vice D. Bambi Kraus, term expired.

Lonnie C. Moore, of Kansas, to be a Member of the National Council on Disability for a term expiring September 17, 2008, vice Marco A. Rodriguez, term expired.

David George Nason, of Rhode Island, to be a Member of the Board of Directors of the National Consumer Cooperative Bank for a term of three years, vice Michael Scott, resigned.

Nguyen Van Hanh, of California, to be a Member of the Board of Directors of the National Consumer Cooperative Bank for a term of three years, vice Alfred Plamann, term expired.

W. Craig Vanderwagen, of Maryland, to be Assistant Secretary for Preparedness and Response, Department of Health and Human Services.
(New Position)

Cynthia Allen Wainscott, of Georgia, to be a Member of the National Council on Disability for a term expiring September 17, 2008, vice Barbara Gillcrist, term expired.

Ellen C. Williams, of Kentucky, to be a Governor of the United States Postal Service for a term expiring December 8, 2014. (Reappointment)


Ellen C. Williams, of Kentucky, to be a Governor of the United States Postal Service for a term expiring December 8, 2016 (Reappointment), which was sent to the Senate on January 9, 2007.

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