The White House

Office of the Press Secretary

Press Gaggle by Press Secretary Jay Carney, 8/16/2011

Aboard Press 1, En Route Northeast Iowa Community College, Peosta, Illinois

11:00 A.M. CDT

        MR. CARNEY:  Okay, let’s start.  It’s a beautiful day in Iowa and this is your gaggle.  Mr. Associated Press.

        Q    Thanks, Jay.  Welcome to our better digs.  Two things.  Wondering if you could comment on the remarks that Governor Perry made yesterday regarding Fed Chairman.  And two, if -- now that we’re a day and a half into this, if you could kind of contemplate a little bit on what the President is accomplishing in this trip, and whether it’s changing any kind of storyline that he has been facing over the past several weeks.

        MR. CARNEY:  Well, on the first, I guess the only comment I have is that when you’re President or you’re running for President you have to think about what you’re saying, because your words have greater impact.  And President Obama and we take the independence of the Federal Reserve quite seriously, and certainly think threatening the Fed Chairman is probably not a good idea.  

        And on the trip, I think the purpose of the trip is for the President of the United States to get out into the country and to interact with folks here in these three states -- Minnesota, Iowa, Illinois -- talk about the economy, talk about what -- listen to people here, find out what they’re hearing and seeing about the economy, and how -- hear their ideas for things that are working, especially among small business men and women.

        As you know, he just had breakfast with some small businessmen.  And he actually -- I just found out when we got in the van that he invited them to come to the Rural Forum, and they’re coming; most of them are going to try to come.

        So this is principally a trip focused on the economy.  The rural economy is a vital part of the overall American economy.  It’s also a vital part of the engine that small business represents in the American in terms of economic growth and job creation.  So he’s enjoying this trip tremendously and thinks it’s very important.

        Q    Incredible amounts of downtime.  What’s the President doing during those long rides?

        MR. CARNEY:  Well, I mean, as you know, as is true, wherever he travels, he’s got full communications capabilities, and he has the need to and the capability to stay in contact with senior advisors who are not traveling with him and others, obviously, in the administration.  And so he’s doing that, getting updates, and staying in touch with folks.  I don’t have any specific phone calls to read out to you.  But if we do, I’ll let you know.

        Q    During your last gaggle you said that one of the reasons he was coming to this state was because unemployment was slightly lower here, and he could try to find one of the things they’re learning about the economy.

        MR. CARNEY:  Well, I was asked about why he was -- why come here when unemployment is lower here than the average in the nation.  And I think that -- first of all, he’s traveled throughout the country into areas where unemployment is either below average or above average.  He was in Michigan last week, for example.  And I think one of the things that you can find in places that are doing comparatively well is what’s working.  And I think that that’s something that he looks forward to hearing from local businessmen and women here in this part of the country.

        Q    Has he learned what’s working here?

        MR. CARNEY:  Well, I’ll let him speak for himself.  He’s going to be speaking a number of times at the Rural Forum that we’re having, in just a short amount of time.  So he’ll probably address that.

        Q    Jay, when you said that threatening the Fed Chairman is not a good idea, what kind of threat do you think that Rick Perry was making?

        MR. CARNEY:  Well, I just -- that was -- those were my words.  I just mean -- I just think that you’ve got to be careful of what you say.  The Fed’s independence is important, and that’s really the only thing I was trying to convey.

        Q    The President made a few comments about Republican candidates yesterday.  Do you expect him in the coming months to engage more directly, even while he’s focused on -- not focused on the campaign to engage more directly?

        MR. CARNEY:  I think the -- those comments were in the context of discussing the challenges that face policymakers and elected officials in Washington, that have faced them all year and will continue to face them this fall, involving, in this case, the need to get our deficits and debt further under control, to take dramatic action -- the kind of action that will only work if it’s done in a balanced way.  And he was struck by the fact that -- the sort of maximalist position that was taken by those who would lead their party, and that he thinks it’s representative of an unwillingness to compromise that is precisely what’s causing the kind of political gridlock in Washington that Americans get so frustrated by.

        Q    Do you feel like you have more leverage in the September, October, November negotiations because the debt limit is no longer, to quote, “being held hostage”?

        MR. CARNEY:  I think it’s important to remember -- it wasn’t that long ago, but all of our memories get fuzzy pretty quickly -- that the President put an extraordinary amount of effort into trying to reach a grand compromise, grand bargain with the Speaker of the House that would really fix this problem for the long term.  

        When the Speaker walked away from the table and the prospects of getting that grand bargain were diminished, at least for now, the issue that remained was, would the Republicans -- would the Republicans’ insistence that we go through the circus of holding our economy and our ability to pay our obligations hostage to a political agenda, and doing that again in the next few months -- would that prevail?  Or would the President’s insistence that doing that kind of harm to our economy by creating that kind of uncertainty was unacceptable -- would that position prevail?  And in the end, as you know, the President’s position prevailed, and precisely because our lawmakers and -- we shouldn’t be doing things in Washington to hurt the economy; we should be focused on doing things to help the economy.  And he was very focused on that.  

        So that’s a long way of getting to your question that having removed that threat that would have otherwise been there, the President does feel that we can now debate these issues about how best to deal with our deficits and debt, and we can debate issues about how best to promote economic growth and spur job creation without having that hanging over us.

        Q    Jay, did the White House coordinate at all with Warren Buffett?

        MR. CARNEY:  Not that I’m aware of.  I mean, we obviously -- the President has made reference to Mr. Buffett’s article, and others have -- we endorse his point of view.  But I’m not aware of any coordination.

        Q    Two quick ones.  Firstly, any reaction to Fitch affirming the U.S. AAA credit rating?  And secondly, on the Washington Post housing story, any comment on the administration pulling together a team to look at GSE reform?

        MR. CARNEY:  On the Fitch, obviously I would refer you to the Treasury Department.  But we believe strongly -- the Treasury Department, the administration -- that America’s credit rating is and remains AAA, but that overall this is just another reminder of why we need to continue to take steps to address our deficit and long-term debt issues.

        Let me get this next one right here.  On the article you referred to, I just want to say that it is simply untrue that the administration has settled on any single proposal for the longer-term structure of the housing finance market.  

        The Housing Finance Reform team at the White House, the Treasury Department, and the Department of Housing and Urban Development continues to weigh and analyze each of the options laid out in the administration’s report to Congress.

        The article in question mischaracterizes a number of the core housing finance reform principles that the administration laid out in its February report to Congress.  The administration believes that the private sector, subject to strong oversight and consumer protection, should be the dominant provider of mortgage credit.  That’s why in each of the three options we outlined in our report to Congress, the government’s footprint in the housing market will shrink substantially.  That’s why in each of the options, any government support for housing finance will be targeted and limited.  That will ensure that taxpayers are protected and the private sector bears the burden for losses.

        Q    Could you email that?

        MR. CARNEY:  I think I can -- I think the Treasury might be coming out with something soon on that.

        Q    Is that -- that’s your statement, or were you --

        MR. CARNEY:  That’s provided by Treasury, yes.

        Q    Jay.

        MR. CARNEY:  Yes.

        Q    Last night the President made reference to a package that he is going to submit to Congress when they come back in September.  What’s going to be in that?  How fully formed is it?  Is it going to be the items that he’s been talking about on this trip, something different?  Can you give us some guidance on that?

        MR. CARNEY:  Well, I won’t go any further than what the President has said, not just yesterday but in previous remarks.  And he’s made clear that -- both yesterday and previously -- that he will put his concrete ideas for further deficit reduction on the table, provide them to the select -- joint select special committee -- super committee of Congress.  He will also -- has been talking a lot about some of his ideas that he believes could get bipartisan support for further economic growth and to spur economic growth and create jobs.  And I’m sure he will have some new ideas as well beyond those that he’s discussed, but I won’t get into any more specifics than that.

        Q    Is it going to be a legislative package that he offers?

        MR. CARNEY:  I just -- I don’t want to get into the process of how it’s going to be rolled out.  But I’ll just leave it at what the President said yesterday.

        Q    After what the President said yesterday, he seemed to sort of lay out almost a campaign strategy for what would happen if that plan failed in Congress.  

        MR. CARNEY:  Well, he simply said that we have as our highest priority taking steps to help the economy grow and to create jobs, and he would put forward ideas that should have -- have in the past and should have broad support and that are backed by the views of economists broadly on what would help the economy, speaking specifically on growth and job creation, and that he would expect Congress to work with him to make that happen because growing the economy and creating jobs is or should be their highest priority.  Obviously, if we aren’t able to achieve some of those goals, then we would have to take the argument to the American people about what the best measures are to help the economy grow and to create jobs.

        Q    He specifically said, “I’ll be running against a Congress that will not move to help the economy.”  So is this -- I mean, is it a campaign --

        MR. CARNEY:  This is separate from what he said about laying out his ideas in September, I think.

        Q    But he said, “I will be laying out an idea plan in September and my message to Congress will be, ‘Let’s do it.’  If they don’t do it, then I’ll be running -- then we’ll be running against the Congress.”

        MR. CARNEY:  Well, I think that’s what I just said:  If they don’t do it, he will take his arguments to the American people, because there’s enormous, broad, bipartisan support for the kinds of ideas that the President has put forward, both to achieve significant deficit and debt reduction and to spur economic growth and create jobs.  A perfect example is the payroll tax cut that he pushed through and got Congress to agree to last December for one year that he wants to extend next year -- puts money in the pockets of every working American, helps them make ends meet, and that, in turn, puts money back into the economy and helps the economy grow and create jobs.  That’s a tax cut for most or all working Americans; you would think that it would be something that the Republicans would support, and he expects that they will, even though we have heard otherwise on occasion.

        Q    So this will not be a campaign --

        MR. CARNEY:  We’re not campaigning.  I don’t know -- this is August of 2011.  This is a proposal to get Congress to act.  And, again, the ideas that he’s put forward already, the ideas that are under consideration are all that have in the past had broad support, bipartisan support, certainly should have broad, bipartisan support in the present and the future, and we expect that if Congress is serious about helping the economy grow and create jobs, that they’ll get support when the President puts them forward.

        Q    Jay, how do you persuade this Congress to do something like invest in infrastructure and spend money on the kinds of stuff the President is talking about when they’ve shown an unwillingness to do anything on the revenue side?

        MR. CARNEY:  Look, I think that it’s not -- it’s not an esoteric argument, it’s about saving jobs and creating jobs; it’s about investing in the infrastructure of our country.  And, again, if you look at investments in infrastructure, they have historically had broad bipartisan support.  The infrastructure bank is something that the Chamber of Commerce and the AFL-CIO support, so I would expect that members of Congress would hear from some of their traditional allies -- in this case, business -- on why that kind of investment is essential to help create jobs, help the economy grow, and help rebuild the foundation of our economy so that it can grow and create jobs into the future.

        I think those are the kinds of proposals that we’ve talked about in the past and we’re continuing to talk about, and we expect that there will be a fair amount of pressure on Congress to do things to create jobs as opposed to -- going back to the Warren Buffett editorial that was mentioned earlier -- as opposed to extending or adding tax cuts to millionaires and billionaires who pay lower rates in taxes --

        Q    Are you saying that taxes --

        MR. CARNEY:  -- than their secretaries.

        Q    -- proposing to raise taxes on the top earners?

        MR. CARNEY:  No, I’m not saying that at all.  Well, you know the President’s position on that.  And, again, as part of any broad and successful effort to reduce our deficits and long-term debt, he would absolutely support revenues being part of that package.

        Q    I know that Warren Buffett was at the White House a couple weeks ago.  Has he ever offered to provide support to the President as an economic surrogate to validate administration policies or messages on the economy?

        MR. CARNEY:  Again, I think Mr. Buffett is an independent person who speaks his mind, as I think he has for a long time now.

        Q    To your previous answer, one of the things that the last eight months have proved is that leverage works incredibly well in negotiations, particularly for the Republicans.  What’s the President’s leverage going forward with your -- with the economic plan he wants to put out in September?  I mean, the Republicans used the extension of the Bush tax cuts as leverage in December; they used the debt ceiling as leverage in this go-around.  What does the President have?

        MR. CARNEY:  Well, I would take issue with your second point, because I think that the principal objective that the Republican Party had through the debt ceiling negotiations was to ensure that we went through a second round -- a second vote on raising the debt ceilings, at which point they could, having agreed to a first round of discretionary cuts, they could try to force the President and others in Congress to accept draconian cuts in entitlement programs that were wildly and widely unacceptable to the American public, to the President, and to -- certainly to Democrats in Congress.

        That was their objective, and they failed.  So the leverage that they thought they had they did not have.  And, principally, that’s because the American people were not at all behind them in that.

        In terms of going forward, I think, again, that goes back to where the public is and what the public wants to see, and the kind of -- what I imagine a lot of members of Congress of both parties are hearing as they spend August away from Washington and hopefully listening to their constituents and their expectation that Washington will do things that will help the private sector create jobs; will do things to help them make their ends meet at home; and will do things to get the deficit under control in a way that represents the kind of compromise that is required for anything big to get done.  It has always been the case.  And it has to be the case if we’re going to get anything big done.

        Q    Would the payroll tax cut, as an example, be the kind of leverage that the President would have?  Because without extending that, it would be tantamount to a tax increase on the middle class.  Is that something that he can parlay into getting some action from Congress?

        MR. CARNEY:  The idea that if you fail to extend it, it would be a tax increase?  Is that how you would write it?

        Q    If it was not extended, well, it would certainly be an additional burden on the middle class.

        MR. CARNEY:  Well, I think that’s a good point.  I mean, I think that the facts here are our friends and that that would be a fact.  And that at a time that we’re still emerging from the worst --

        Q    But is that (inaudible) -- other than how I would write it.

        MR. CARNEY:  Well, I don’t know, because we expect in the end to see bipartisan support for that proposal.

        Q    So you’ve obviously called for extending UI and the payroll tax cut.  But I have a question about the President’s overall diagnosis of the economic problem.  Are those and a number of other somewhat modest measures like the veterans program perhaps important, but they’re not a huge stimulus program -- are those enough or does the President see economically the need so big that government needs to have a major new initiative to fill the gap?  

        MR. CARNEY:  I’m not going to get beyond where the President has been and what he said yesterday, and what -- or into --

        Q    (Inaudible.)

        MR. CARNEY:  Well, I think since it’s his job to propose solutions to problems, I think that analyzing the size of the problem that needs a solution would be a back way -- a back end way of answering that other question.  I think the President has been very clear about where we are economically, how far we’ve come out of the worst recession since the Great Depression, how many private sector jobs we’ve created, and very clear and candid about where we are right now as the economy has -- economic growth has slowed and job creation has slowed in part because of some of the headwinds that we’ve faced this year that were unanticipated, the Arab Spring that’s caused a surge in oil prices, the earthquake and tsunami in Japan that had a significant impact on global supply chains and the situation in Europe.  So we’ve fought through those and we’re continuing to.  And we think we just need to continue to take measures that will help the economy grow and create jobs.  

        Q    Can you say if corporate tax repatriation holiday is one of the things that you’re considering?

        MR. CARNEY:  I’m not going to get into a guessing game about which proposals we may or may not be considering.  I’ll leave that to him to propose.

        Q    Jay, we’re passing Dyersville, home of “Field of Dreams” --

        MR. CARNEY:  I wish we could stop.

        Q    Chicago White Sox.  

        MR. CARNEY:  Well, maybe we’ll do an OTR.  That would be fun.  Perfect day for it.

        Q    That was off the record?  That was --

        MR. CARNEY:  Well, maybe we’ll do an OTR.  That can be on the record.  Anybody else?  

        Yes, ma’am.

        Q    Do you think that some of the ideas that the President was talking about today might translate to jobs in the rural communities that we’re visiting -- he’s visiting?

        MR. CARNEY:  I think you’ll hear a lot about that, some of the proposals that we unveiled this morning.  We have the Small Business Administration Administrator here and a number of other representatives from the Cabinet promoting some of these initiatives.  Secretary Vilsack has spoken a lot about this.  And I think you’ll learn more from the experts shortly on the direct impact we expect those initiatives to have on the rural economy.

        Q    One other small point -- the President has called for patent reform and passage of the trade bills.  And Republicans in Congress are saying we’re planning a vote on patent reform as soon as Congress comes back, and the President hasn’t submitted the trade bills, so why does he keep calling for these two items if they’re --

        MR. CARNEY:  Well, we’re glad that the Congress will vote on the patent reform and hope they will.  We’ve been calling for it for quite a while and hope they finally will vote on it.  That’s a good sign.  That will be a helpful thing if that takes place.

        And on the trade bills, we’ve said all along that we need to take action and we need to get an agreement with Congress on the submission process.  We’ve made a lot of progress in our dealings with the Senate leaders, and hope and expect that that will -- process will be resolved and we’ll get this done, because we definitely agree that passing those trade bills and making sure we have a process that allows for the TFAs [sic] and the TAA to go forward will be very beneficial to the economy.

        Q    So this is basically a sequencing issue, Jay, getting the TAA passed first and then getting the --

        MR. CARNEY:  It’s not -- how the process itself works, I might steer you to Treasury on that.  But it’s just -- it’s working out an agreement.  We’ve made some progress.  We’re working out an agreement with Congress for submission.

        Q    Because McConnell and Reid do have an agreement (inaudible). Is the issue right now working something out --

        MR. CARNEY:  I really don’t have anything more specific on it.  But we do -- we are pleased by the progress made in the Senate.

        Q    I have a question about -- to change the topic a little bit, did you have any reaction to the news yesterday that Pakistan might have shown our helicopter to China after the Osama bin Laden raid?  And does that change our relationship with Pakistan at all?

        MR. CARNEY:  I don’t have anything for you on that.  If you want to come back to me, I can get you something for it.  

        Q    If you do something on it, can you share?

        MR. CARNEY:  Yes, I’ll make sure everybody knows.  Yes.  Are we good?

        Q    And I just had another question about the bus.

        MR. CARNEY:  Sure.

        Q    We understand that these are new -- sort of a new addition to the Secret Service arsenal --

        Q    (Inaudible.)

        Q    I don’t know.  I’m asking.  I mean, he’s the expert on that.  (Laughter.)  Not much armor --

        MR. CARNEY:  I’ll refer you to the Secret Service for the specifics about the bus.

        Q    I mean, I’ve seen reports and overheard information that it has like a PA system on board.  The President might be using that at stops like that.  Do we have any --

        MR. CARNEY:  I don’t know about all of its capabilities.  He hasn’t, when I’ve been on the bus, used the PA system.  He has -- I think we’ve seen some pictures of him waving from the front of the bus to folks lining the roads.  But other things that it’s capable of, I point you to the Secret Service for answers.

        Q    Communications capability (inaudible) stay in touch with -- more than what he’s had --

        MR. CARNEY:  Well, I think it’s comparable to what he’s had.  I mean, obviously when he is in the presidential limo and on Air Force One -- I mean, that’s an essential element of presidential travel.  And, again, I refer you to the Secret Service.  But I know I’ve seen that they’ve said that one of the reasons why they feel like they’ve long needed this kind of bus in their fleet is because they’ve -- for a number of decades now, Presidents, Vice Presidents, presidential candidates have traveled by bus.  It’s very useful and cost-effective, because in the past they’ve had to lease buses at great expense, retrofit them -- or outfit them to have all this security that’s necessary and then reverse that process at great expense, so that this, in this view -- and, again, I’m just citing them and their view, was a cost-effective approach.

        Thank you, guys.

END 11:27 A.M. CDT

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