The White House

Office of the Press Secretary

Daily Briefing by the Press Secretary, 10/10/13

James S. Brady Press Briefing Room

12:58 P.M. EDT

MR. CARNEY:  Good afternoon.  Thank you for your patience.  Obviously, as almost every day is, a busy day for news and events.  Before I go to your questions I just wanted to mention that in addition to the Senate Democrats and then the House Republicans -- or a subsection of the House Republicans, although all of them were invited -- being here this afternoon, Senate Republicans will pay a visit to the White House to meet with the President tomorrow morning.  And we'll have a specific time for you later.

Beyond that, I don't have an announcement to make.  I suspect I know at least some of the questions you’ll ask, so I'll go straight to the Associated Press.

Q    Thanks, Jay.  I think we all want to know what the White House reaction is to the Speaker’s proposal this morning.

MR. CARNEY:  The President is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option.  Now, the President believes that it would be far better for the Congress -- and in this case, the House -- to raise the debt ceiling for an extended period of time, as Senate Democrats are working on as we speak.  It would be far better for the economy if we stopped this episodic brinksmanship and sort of moth-balled the so-called nuclear weapon here, which is the threat of default, for a longer duration.

But it is certainly at least an encouraging sign that, based on today’s statement by the Speaker, they’re not listening to the debt limit and default deniers who seem to suggest, against all the accumulated wisdom of financial experts, that somehow it would be okay for the United States to enter territory that it had never entered before and threaten default for the first time in our history.  So that's our initial response.

Q    Would the President sign a short-term --

MR. CARNEY:  Well, we have seen nothing -- obviously no proposal from House Republicans yet.  There’s no bill to look at. As I just said, the President strongly prefers a longer-term resolution so that we can get away from this periodic brinksmanship.  I mean, if there’s a recognition that we can't default, why is there an insistence or the implication that you keep the nuclear weapon in your back pocket to threaten default in the near term?  It doesn’t make a lot of sense to us.

Having said that, we'll see what the House Republicans propose.  We'll see what they’re able to pass and consider it then.  The President said the other day that, in the hypothetical, he would be willing to do this because he thinks that we need to avoid default.  But he’s not -- he’s been very clear.  He will not pay ransom in exchange for the Republicans in the House doing their job -- pay ransom to the tea party Republicans to allow Congress to do its job, which is to fund the government and ensure that we do not default.  And that position has been steady and clear throughout this period.

Q    Why would not that same argument apply during a short-term extension of the debt ceiling where the President agrees to hold negotiations over the budget?

MR. CARNEY:  Again, you keep adding things that we don't know -- we haven't seen a bill yet.  We haven’t seen what the House -- what the Speaker is going to put forward.  We don't know what he could pass.

Now, what the Speaker said today is that he thinks there ought to be negotiations, and what the other leaders said is that there ought to be negotiations over our budget priorities.  The President has been saying that all year long.  House Republicans rejected on 19 different occasions the opportunity to appoint conferees to match the Senate conferees so that they could try to reconcile the two budgets they passed.

But why would it be the right thing to do to keep punishing the American people in order to talk about our budget priorities? That's what they're doing by keeping the government shut down.  Why would it be the right thing to do to do continued harm to the American economy?  I didn't hear a rationale for why that is acceptable or okay, and I don't think any of you did either.

Q    Must the condition of extending the debt ceiling also include reopening the government?

MR. CARNEY:  Again, you’re asking me hypotheticals.  We’ve said very clearly --

Q    It’s not a hypothetical.  What is your position?  I’m not asking you to react to Boehner.  I’m just asking if you --

MR. CARNEY:  We’ve said all along that they should turn on the lights and open the government.  They should raise the debt ceiling.  They should do both.  So if they -- I think the President said the other day that if they were to send him a clean debt ceiling extension, no partisan strings attached, he would sign it.  But we don't know that that's what we’re going to get here.  If they send him a -- if the House passes, as they could right now, the bill that passed the Senate to reopen the government at funding levels Republicans set and celebrated, he would sign it. 

What we haven’t heard is -- we got into this mess because tea party Republicans were insisting that they could use the shutdown of the government and the threat of default to defund Obamacare, or delay Obamacare, basically prevent millions of Americans from getting access to affordable insurance.  It was a fool’s errand.  And the people who are paying the price are the hardworking Americans across this country who suffer when the government is shut down, and who would suffer mightily if Republicans who seem to think default is a game get their way. 

I mean, I think we have up here -- these are the elected representatives sent to Washington to fulfill their responsibilities as members of Congress:  Representative Ted Yoho just yesterday said, “Someone needs to convince me why we need to raise the debt ceiling.”

Warren Buffett, who knows a thing or two about the financial markets and the economy, said, “It should be like a nuclear bomb, basically too horrible to use.”

The head of PIMCO, the CEO says, “Default would be a tragedy for America.”

On the other hand, Senator Richard Burr, Republican senator, says, “Default is manageable for some time.”

The experts -- Macroeconomic Advisers says, “Default would lead to 14 percent unemployment and the worst recession since World War II.” 

RBC Capital Markets says, “Crossing the debt ceiling would be catastrophic.”

Senator Rand Paul, Republican, says, “If you don't raise the debt ceiling, we balance the budget.  The world is going to end?”

Well, Ben Bernanke, the Chairman of the Fed, says, “Default would be very, very costly to our economy.”

Martin Feldstein, Reagan’s CEA chair, says, “The debt ceiling is a very dangerous thing to play with.”

So these are the voices that have been driving this crisis, and it should end.  And to the extent that there’s an implication in what we heard from House Republican leaders today that they are coming to see the light, that we need to end this crisis -- this manufactured crisis -- that would be a good thing.  But the President’s position that he’s not going to pay ransom to the tea party so that Congress can do its job remains what it was.

Q    Obamacare has not been part of the demand -- are you saying, then the President can negotiate?

MR. CARNEY:  Jim, I’m not sure how you could have reached that conclusion.  The President is not going to pay ransom.  I’m saying that this is how we got here.  This is the logic that led to the shutdown of the government, and the logic that has led to us getting perilously close to the point beyond which the Treasury can no longer use borrowing authority. 

And it’s time for a rational approach to be taken by leaders in Congress towards these very serious challenges -- because they're -- as the President said all along, we should sit down and work out our differences, find common ground on our budget priorities.  The President has been meeting with Republicans, talking to Republicans all year long in search of that compromise.  And we should put everything on the table, and the President has made that clear.  It’s exemplified in the budget proposal he’s put forward.

But what we cannot do is continue to punish the American people, which is what tea party Republicans are doing, in the name of trying to extract partisan demands that they couldn’t get through the normal legislative process.  And whether that's an attempt to defund or repeal or delay the Affordable Care Act, or any other partisan demand -- maybe tax breaks for millionaires, or anything else they could attach for it -- who benefits from that approach?  The American people don't benefit, and the economy doesn't benefit.  And that's why the President has taken the position that he’s taken.

Q    Jay, you have Republicans coming to the White House this afternoon.  You’ve repeatedly said the administration isn’t going to negotiate over the debt ceiling or the government shutdown.  But Republicans now say they have made this suggestion, this offer of a short-term increase in the debt limit and that if the President rejects that offer we're back to square one.  What do you expect from today's meeting, if not some kind of discussion about where to go next?

MR. CARNEY:  The President has always said that he is willing to talk about anything.  What he will not do is pay a ransom, negotiate over their demands in exchange for Congress doing its fundamental job -- paying our bills, funding our government.  And, yes, he looks forward to having a subset of House Republicans here.  Our view -- and the reason why we invited all members of Congress to these meetings is that it's often the case that he or others meet with leaders of the House and then find out that the decisions are being driven by other members of the House.  So it might have been useful to hear from some of those other members and for them to hear from him.

Be that as it may, he looks forward to the meeting.  And he looks forward to hearing more from the Speaker and the other leaders about this proposal that they talked about today.  What we haven't seen yet is a bill.  What we haven't seen yet is whether or not any bill that they would write could pass.  And we'll look forward to having that discussion. 

The principle remains throughout, which is the American people should not be punished so that Republican leaders can save face.  The American people should not see their economy harmed, and economic growth slowed and job creation slowed and interest rates spiked, because the tea party insists on getting what it could not get through normal legislative means or through the ballot box. 

Q    Yesterday, you expressed disappointment that not all the members of the Republican caucus were coming to the White House today.  What do you lose from them not being here?  Were you hoping to see divisions in the Republican Party? 

MR. CARNEY:  No, no.

Q    What does it say about your relationship with Speaker Boehner?

MR. CARNEY:  As I just was saying, I think that we -- the President invited all members of Congress because he believes that all of them shoulder the responsibility invested in them when they were sworn into office to uphold their responsibilities.  And that includes making sure the government is open and functioning and funded, and making sure that the United States continues to pay its bills on time and maintains its full faith and credit. 

When it comes specifically to the House of Representatives and the House Republican conference, I think the President extended the invitation to all members because we have seen that it is a very diverse and fractious conference and that discussions with the leaders have not always -- well, it has become apparent -- and I think many of your colleagues and you yourselves have reported on it -- that a subsection of the House Republican conference has been driving decision-making by the House Republican leadership at least for the past several weeks, and that is in part why we have a shutdown. 

The Speaker of the House took an approach to the funding of the government and passing a CR that was acceptable, even though it was Republican spending levels, acceptable to the Democratic leader in the Senate, acceptable to the Democratic leader in the House.  And he had to abandon that approach -- or he chose to abandon that approach under pressure from the tea party.  So, in our view, it would have been useful to hear from them as well and to speak to them as well, directly.

Q    Jay, if a short-term debt ceiling bill comes to the President’s desk and it does not carry with it a continuing resolution to reopen the government, the President would at the very least sign that bill -- even though you haven't seen it -- clean debt ceiling bill to raise the nation’s debt limit?

MR. CARNEY:  Again, I think, as I stated at the top, the President believes that if there’s a recognition that we cannot default, that we must ensure that we can continue to pay our bills and therefore the Congress must raise the debt ceiling that they ought to do it for longer than a few weeks.  But if a clean debt limit bill is passed he would likely sign it.  Again, we would have to see it.  We're speaking about a bill that does not at this point exist and it’s not at all clear, based on what the Speaker said, that that's what we're going to see.

The point is they don't get anything in exchange for holding the economy hostage.  They don't get anything in exchange for doing continued harm to the American people.  They ought to -- and they could -- the meeting would go very well indeed if prior to arriving here the House Republicans put on the floor the continuing resolution already passed by the Senate, passed it in the House, and then we would know that the government can reopen and that all the various problems caused by the shutdown could end today.

Q    Given the fact that you might not get everything that you want here --

MR. CARNEY:  Here’s the thing.  We're not asking for anything.  We're just asking for the government to be open at spending levels set by Republicans, and for Congress -- at the behest of the tea party -- not to default on the United States’ full faith and credit for the first time in history.  That's not -- we're not asking for concessions.  That's just asking for Congress to be responsible.

Q    I guess my point is, is that all you may be able to get right now is the clean debt ceiling increase for the time being.

MR. CARNEY:  The answer is the President has always said he would sign a clean debt limit increase.  It is far preferable that it be longer.  And what I said yesterday holds true today -- short term, medium term, long term, it will always be the case when it is Congress’s responsibility, again, to ensure that our bills be paid, that he will not pay a ransom, that he will not allow the tea party to hold the American people hostage in exchange for doing its job.

Q    But we may have a scenario where the debt ceiling is raised, default is averted, but we may still be in the position of having a government shutdown that is ongoing.

MR. CARNEY:  Well, if that were to happen, what would the Republican rationale for that be -- he continued punishment of the American people and the continued harm that that would do to the American economy?  Why?  Why?  Just open the government at levels set by the Republicans.  And then let’s talk about our budget priorities.  Then let’s talk about solving these issues for the longer term.

Q    You could take it one chunk at a time, you could take one bite at a time, then?

MR. CARNEY:  Jim, I’ve been pretty clear in answering the question.

Q    Jay, can I ask a very straightforward --

MR. CARNEY:  I’ll come back to you, Jim.  Go ahead, Jon -- straightforward, I’m all for it.

Q    Straightforward.  Is the President willing to engage in budget negotiations with the Republicans if the government is still shut down?

MR. CARNEY:  I think the President has been very clear on that.  If the Republicans think, or the tea party that is driving the Republican decision-making up there thinks, that they can extract concessions by punishing the American people, by punishing the American economy in order to get what they want, the answer is no. 

The President is meeting with House Republicans today, so the idea that this is about having a conversation -- well, they’re having a conversation today.  But they will not, whether it’s Obamacare, or tax breaks for millionaires, or any other of their possible demands -- they’re not going to get it in exchange for funding the government in a CR that was set by Republicans. 

Remember, the whole point of a short-term CR, as proposed by the Speaker originally, basically a clean CR set at existing levels, was to allow for time to have budget negotiations.  So what’s the rationale for refusing to do that in order to have budget negotiations?  There is none.  The only -- it’s spite.  It’s deliberate harm to average folks out there, some of whom are directly affected because they can’t go to work; others who are affected because they can’t get a business loan, or they can’t get access to services that are important to them.  There is macroeconomic harm done the longer the government is shut down.  And there’s no logical rationale for it. 

And I would say that they’re doing harm to the American people, they’re doing harm to the American economy, and by all accounts, they’re doing harm to the Republican Party, which is bad for America.  We need two strong parties that can work together, and not be in a situation where one faction of one house of one branch of government is forcing shutdowns or default.

Q    So that was a very long answer to a yes-or-no question, and I just want to be sure I had it right.  The President will not engage in budget negotiations with the Republicans until the government is reopened -- is that his position?

MR. CARNEY:  Our position is clear.  They ought to turn on the lights, they ought to pay our bills.  The President has been ready all year long.  The fundamental question for Republicans is why is the price of negotiations the President has been willing to engage in all year long doing harm to the American people and doing harm to the American economy and threatening the global economy?  It’s preposterous.

Q    Because the Republicans have proposed this six-month extension, because they -- sorry, six-week -- don’t get excited  -- six-week extension -- (laughter) -- to give time for these budget negotiations they think will happen while the government remains shut down.  Are they deluding themselves?

MR. CARNEY:  Just think about the proposition here, Jon.  You’re suggesting that --

Q    No, I’m not suggesting, I’m asking you to respond to what they --

MR. CARNEY:  I understand.  But again, since we’ve seen nothing from the Republicans yet beyond a very brief press conference, we don’t know what they’re actually going to propose or what they may try to get passed in the House.  But the suggestion in your question is the Republicans would think that we can resolve all of our significant differences over the budget, and that while we work that out, we should do sustained harm to the American economy and sustained harm to the American people.  And their rationale for that would be what?

Q    To put pressure on you guys.

MR. CARNEY:  I love the crystallization here.  (Laughter.)  That’s right, they want to use harm -- I’m obviously not suggesting that this is your view.  I’m saying that the logic here is that they would harm the American economy and the American people in order to try to extract concessions from the President and their counterparts on Capitol Hill.  That’s an unsustainably bad proposition.  It’s bad economics.  It’s bad governance.  And it’s bad politics.

Q    So the President would sign a clean -- truly clean six-week extension of the debt ceiling; he’s going to need a clean CR before he will sit down and engage in negotiations on the long-term budget?

MR. CARNEY:  Again, to continue to talk about ifs and buts, as the Speaker said, doesn’t get us anywhere.  We haven’t seen anything from the House Republicans yet.  The President believes they ought to pay our bills.  The President believes they ought to turn on the lights.  And the President has always been willing to negotiate and work out and find common ground with Republicans over our long-term budget priorities. 

But he’s not -- again, going back to, like, the assertion that they’re going to use punishing the American people as leverage, doing harm to the American economy as leverage, that’s unacceptable to the President and I think he’s made that clear. 

Q    So is today’s meeting with the Republicans a negotiation?

MR. CARNEY:  I know that they are calling it that.  They’ve called it a dialogue, a conversation.  The President is always willing to talk, have a dialogue.  What he’s not going to do --

Q    What do you call it?

MR. CARNEY:  -- is pay a ransom.

Q    What do you call it?

MR. CARNEY:  They’re going to have a conversation. 

Q    But not negotiations?

MR. CARNEY:  Well, it depends on what you mean.  He’s not going to give anything in return for Congress doing their job.  He’s made that very clear.  He’s not going to pay ransom to the tea party so that the government opens or the United States doesn’t default. 

And there are enormous stakes here when you think about the long-term implication of a willingness to do that, to let one faction of one party in one house of one branch of government threaten -- extract ideological demands of any President of either party in the future, and the harm that would do, the sustained damage that would do to the American people, to the middle class and to our economy.

Q    So what comes of today’s conversation?  What good does it do?

MR. CARNEY:  Well, I think that it’s always useful, as is the case when the President has, on a number of occasions in recent days, for the President and the Speaker to talk, for the President and other members of the Republican Party in Congress to talk, and to hear directly from each other.  And that’s what will happen today.  That’s what happened obviously with House Democrats yesterday.  It’s what will happen with Senate Democrats today and Senate Republicans tomorrow.  But he will make clear his view that it is a fundamental responsibility of Congress to fund the government and ensure that we don’t default for the first time in our history.

Q    So what has to happen before there can be any negotiation?

MR. CARNEY:  Again, if there’s anything that we’ve been clear about throughout this process, it’s that the Congress needs to do its job -- turn on the lights; stop threatening default; pay our bills.  And the President, all year long -- he’s bought them dinner, he’s had coffees, he’s had meetings, he’s had phone conversations, and has sincerely engaged -- it’s not just been talk for him --

Q    Maybe he needs to up the ante.

MR. CARNEY:  Well, I know that there's a subsection here that would only raise the debt ceiling if he offered to resign.  That's the level of extremism we deal with here when we're talking about this kind of logic. 

They need to do their job.  They're hurting -- the only people they're hurting -- well, they're hurting obviously the Republican Party, nationally.  But they're also hurting their constituents.  They're hurting average folks out there.  Because as some of these financial experts have noted, default is far worse, but even shutdown has an effect on GDP, which, in turn, has an effect on hiring; which, in turn, has an effect on the ability of families across the country to make ends meet.

And we've been climbing out of this recession for a long time now and we've made significant progress.  And this kind of manufactured crisis is a slap in the face to the American people who have been working so hard to get to where they are today and want to keep moving forward, not backward.

Q    One other question on another subject.  The Congressional Research Service was asked to provide a legal opinion on whether the Pay Our Military Act could legally pay the death gratuity, and they say there appears to be sufficient legal basis upon which a court could hold that the best reading of the term "payment" would be to go ahead and pay the death gratuity. 

MR. CARNEY:  Well, again, it was the Department of Defense's position that they would not be legally able to.  This was in the briefing that they gave Congress prior to the debt ceiling and in statements made by an Under Secretary of Defense to the press prior to -- sorry -- prior to October 1st and the decision by Republicans to shut down the government -- that the effect of a lapse in funding would be the Department of Defense would be legally unable to make those payments.  So the Pay Our Military Act emerged after that.

It's important to remember -- and we had this discussion yesterday -- from the beginning, we were arguing, don't shut down the government.  There would be myriad negative consequences to doing that.  We explicitly, through the Department of Defense, noted this specific potential consequence.  Every hour of every day since the Republicans shut the government down, we have been asking them to reopen the government so that more consequences would not occur, including this one.  The Pay Our Military Act was written, passed and signed into law. 

It was my understanding the judgment -- that since it did not explicitly call for or allow for this, that an alternative had to be found.  And the President, when he learned that an alternative needed to be found, asked his Chief of Staff, Denis McDonough, to work with and speak to the Office of Management and Budget and with his lawyers to come to a resolution.  And, obviously, you know now what it is, which is the Department of Defense is going to be able to --

Q    It looked like they could have gotten another opinion.

MR. CARNEY:  Well, again, that's a legal opinion that I understand was not the judgment at the time.  And the President's interest here is that this be resolved.  It is always worth noting that this never had to happen if Republicans hadn't shut down the government, if they had, alternatively, decided to allow for the government to stay open at funding levels that were perfectly acceptable to them a month ago, and six months ago, and a year ago, and at spending levels that they hailed as a success and an achievement for them -- until they decided they weren’t good enough and they would shut the government down over it. 


Q    How are you?

MR. CARNEY:  I'm great.  How are you?

Q    Good.  Following up on Bill, you started to say but went on to another point that this has been solved.  I want to be clear.  Are you saying because of the Fisher House saying that they’ll pay -- the reason why I ask is the Senate, about an hour ago, passed by unanimous consent legislation that appears to mirror what the House already passed.  And so my question really is, will the President sign that into law, or does the White House believe that the Fisher House paying this solves it?

MR. CARNEY:  Again, the Fisher House is contracting with the Department of Defense; through that contract, the Department of Defense obligates itself to reimburse the Fisher House upon the reopening of the government.  So it’s not just the Fisher House taking on the sole responsibility in perpetuity for making these payments.

Q    But does that mean you don't need legislation?

MR. CARNEY:  It does mean that we don't need legislation.  And again, we go from day to day, and we discover new, terrible consequences of shutdown.  And when they get attention, lawmakers rush to propose a fix when there is an obvious available fix to avoid all of these negative consequences:  Open the government. The only harm you're doing is to the American people and to your party by continuing to shut it down.  Just open the government.

Q    Would the President veto that legislation or --

MR. CARNEY:  Again, I don't think -- first of all, the legislation is not necessary.  Our view has been that this piecemeal funding is, again, a gimmick.  It’s an attempt -- why is it that -- think about the amount of expended energy here to try to piecemeal solve their specific political problems every day when a bad consequence is revealed because of their decision to shut down the government.  They could save themselves a lot of trouble and the American people a lot of harm if they would simply open the government.

Q    To follow up then, yesterday you took the question about when the President learned about the military death benefits not being paid.  A moment ago, you said, everyone should have known because the Pentagon warned everyone, I believe, on September 27th.  When did that filter through to the President?

MR. CARNEY:  What I can tell you is that in his evening walk with Chief of Staff Denis McDonough on Tuesday, the President raised the concern about death benefits not being paid to deserving families.  And Mr. McDonough explained that the Office of Management and Budget and the Department of Defense were trying to find a solution and that the Pay Our Military Act did not appear to fix it.  The President directed Mr. McDonough to get creative and get it solved within 24 hours. 

The Department of Defense had been approached by the Fisher House Foundation, which had generously offered to make charitable donations to these families from its own funds.  The Department of Defense, in consultation with the Office of Management and Budget, developed a solution overnight.  They determined that DOD could enter into a rush agreement with the Fisher House that would essentially make the organization a government contractor that could deliver benefits and enable DOD to reimburse the costs it had incurred after the shutdown ends.

Again, shutdown never should have happened.  It was a choice made by Republicans, a choice that, for those who paid attention, included an awareness of the fact that among the many consequences potentially would be this one.  When the Pay Our Military Act -- which was a bill supported by both parties and signed by the President to address some of the unfair consequences to our military families and those who support them -- was passed, and it was viewed by some at least that it did not solve this specific problem, the President said, get creative and solve it in 24 hours.  And they solved it in less than that.

Q    Thank you for answering that question.  Two other short ones.  I want to just clarify, because I know you’ve been asked several times and at the risk of belaboring the point, but Gene Sperling, earlier today, I think sat down with Ron Brownstein of the National Journal, and suggested that he’d be willing -- that the President would be willing -- and this gets at what Jon and I think Jim were asking, and others -- that the President would be willing to sign a clean debt ceiling without reopening the government.  And I've heard you answer it a couple different ways, because you have said over and over they should turn the lights on and reopen the government; they should also take default off the table.  Gene Sperling, one of the top economic advisors, suggested you could do one without the other.  I understand everyone is trying to nuance this, but just can you state clearly, does it have to be both to then enter into negotiations?

MR. CARNEY:  That's the part -- see, you just added something to what Gene said that I think reflected what I've said, what the President said, which is that he wants Congress to do both.  He wants Congress to fulfill both of its fundamental responsibilities -- open the government, i.e., turn on the lights; pay our bills; i.e., do not allow for default to happen for the first time.  And if Congress takes action without partisan strings attached on either of those, that would be a good thing.  And the President said himself that he would sign it.

Q    But the Boehner proposal is only to do one.

MR. CARNEY:  Again, I heard a lot of things said.  What I haven’t seen is a bill.  And one thing that I think the Speaker and the Leader and other Republican leaders in the House sort of circled around was this idea that we should be sitting down and having sustained, serious negotiations about our budget priorities and reaching common ground and finding consensus and compromise.  And the President has long held the same view.  What he does not believe is that the American people should be punished day after day in exchange for Republicans being willing to sit down and have a negotiation. 

What is the rationale for that?  What are they seeking to achieve by shutting the government down day after day after day, when the President has been willing all year long to have these conversations and negotiations, and has demonstrated far more than they have thus far a willingness to offer proposals that are difficult for Democrats to accept as long as they are part of a comprehensive and balanced approach to dealing with our long-term challenges?

Q    Last one, promise.  Important story overnight:  The Libyan Prime Minister apparently was kidnapped by gunmen.  Then there were reports suggesting he was released.  My question would be what do you know about it?  And has the President been briefed?  I assume he has.  What has he been told, and what’s the President’s reaction to all this?

MR. CARNEY:  Well, certainly the President has been briefed, and I can tell you that we condemn the kidnapping of the Libyan Prime Minister, and we are pleased to hear that he has been released.  The United States supports Libya’s efforts to fulfill the aspirations of the 2011 revolution for a democratic, secure and prosperous Libya.  The people of Libya deserve a democracy based on the rule of law and respect for human rights.  We will continue to work closely with the Libyan government as it continues to build its capacity to deliver security and good governance to the people of Libya. 

And I understand that the Prime Minister himself has now addressed the events, and I would refer you to him and his office for details about what happened.

Q    Very quickly, about that act that we were just talking about, the Honoring the Families of Our Fallen Soldiers Act -- you said legislation is not needed.  So a very simple yes or no, since the Senate has passed it, will the President veto that or will it just sit?

MR. CARNEY:  Again, I'll have to -- when I walked out here, I was unaware that legislation had been acted on in the Senate.  The President directed that this be resolved, and it has been.  What is preposterous is this notion that we should piecemeal fix all the consequences caused by shutdown.  Because, guess what, even the most competent Congress in the world couldn't do that without still causing harm to the American people.  If they're concerned about the harm done by shutdown, they should open the government.

Q    We'll let you find out what the position is now that you've been made aware of the Senate's movement on that.  Specifically, in the conversation the President had with the American people and with reporters in this room just a couple of days ago, at one point he apologized that Americans have to put up with this right now.  Has the President reached out to the families of those servicemembers who did not receive death benefits and apologized to them that they didn't receive those death benefits?

MR. CARNEY:  I don't have any private conversations to read out to you.  The President took action to solve this problem, ordered a creative solution to solve this problem, a problem caused by House Republicans who decided to shut the government down. 

And I fail to see anyone in the House Republican leadership explain why, why this is a good thing to do, in exchange -- by the way, these benefits were held up because Republicans wanted to defund Obamacare.  These benefits were held up because they wanted to get what they could not get through the legislative process, what they could not get from the Supreme Court of the United States, what they could not get in a national election for President. 

That's why all of these consequences that you read about and see and hear about have occurred.  And they're all unnecessary, because all the President has asked for, and what all the Senate and House Democrats have asked for is that the House pass a continuing resolution funding the government at levels that House Republicans support.  What is so hard about that?  Why punish the American people over refusing to -- because you refuse to accept what you wanted?

Q    Secretary of Veteran Affairs Eric Shinseki yesterday testified that if the shutdown continues into late October, compensation payments for more than 3.8 million veterans will not be made in the month of November.  Acknowledging in this conversation you spoke about the President pushing for creative measures in terms of death benefits, will the President push for creative measures to help those --

MR. CARNEY:  Peter, my answer is the same.  There are so many consequences of shutdown that Congress has a responsibility to resolve all of them with one vote in the House of Representatives that would receive a majority -- votes from Democrats and Republicans.  Open the government.  Solve this problem.  And then, let's get about the business of dealing with our longer-term budget challenges.


Q    From your discussions with the first row my takeaway is that -- (laughter.)

MR. CARNEY:  Well said, sir. 

Q    My takeaway -- and thank you, row one --

Q    A negotiation.

Q    Conversation.

Q    My takeaway is that the President is open to signing the short-term raising of the debt limit even if he does not get from Congress an accompanying clean CR -- is that correct?

MR. CARNEY:  Well, I'll just try again.  The President believes -- the answer is yes, but he is not paying a ransom for Congress to do its job.  Because the only people who get hurt -- well, the American people get hurt when the Republicans shut the government down.  The American people get hurt when those who believe default is not a problem are listened to and followed.

Q    Could we just take a yes?  (Laughter.)

Q    We just need a definition of ransom.

THE PRESIDENT:  The President of the United States stood before you at this podium and answered this question.

Q    You're saying he won't negotiate.  You're saying he'll sign a clean extension of the debt ceiling, but he is not going to negotiate on the other stuff until the shutdown is over?

Q    Yes?  Yes?

MR. CARNEY:  Yes, the President will not pay a ransom for --

Q    Yes, that's all.  Yes. 

Q    It's the "pay a ransom" --

Q    You see it as a ransom, but it's a metaphor that doesn't serve our purposes of figuring out what's actually going on.

Q    We just don't want to write it wrong.

MR. CARNEY:  But you guys are just too literal then, right? 
Q    We just want to accurately report what's happening.

MR. CARNEY:  The closing of the American mind and failure to appreciate metaphor and simile.

Q    Can you just break it down in regular terms?

Q    I mean, like, we're trying to be accurate in our description of what's going on.  We just want to make sure we're not saying the wrong thing.

Q    No negotiations.

MR. CARNEY:  You're asking me a lot of questions based on a bill that does not exist and may never exist, and doesn't even reflect what the Speaker of the House and his colleagues discussed a couple of hours ago.  So I think we ought to see whether they're serious about putting the matches and the gasoline aside when it comes to threatening default.  And if they're serious, we'll evaluate what they've moved forward on. 

What the President has been crystal-clear about all along is that it is unacceptable to him that the Republican Party, driven by the tea party caucus, try to extract ideological objectives in exchange for opening the government and raising the debt ceiling.

Q    So your position is that until then, you'll continue to obfuscate?  (Laughter.)

Q    You said we need to see whether they're serious about “putting the matches and the gasoline aside.”  You've also said they want to keep a "nuclear weapon in their back pocket."  So is keeping a nuclear weapon in the back pocket the same as putting the matches and gasoline aside?  (Laughter.) 

MR. CARNEY:  Where are we going --

Q    Or even better, can we stop talking about matches and gasoline and nuclear weapons and start talking about what's actually happening?

MR. CARNEY:  Well, I wish we knew.  And I think that there is nobody who has followed the machinations in the House Republican conference for the last several weeks -- and, you might argue, for the last several years -- who has any clear picture about what they're going to do and when, and whether they're going to do the right thing by the American people, which is open the government and raise the debt ceiling.

Q    Okay, so just to use your statements, do you see "putting the gasoline and matches aside" as consistent with "keeping a nuclear weapon in your back pocket?"

MR. CARNEY:  Okay, let me explain those metaphors and I'll refrain from using them.  The President strongly believes that it would be far preferable if Congress were to pass a bill that would ensure that the United States could pay its bills for a longer duration, longer than the hypothetical six weeks that has currently been discussed.

But as he told you guys just two days ago, if a clean debt  -- a clean bill raising the debt ceiling for six weeks were to hit his desk, he would sign that.  It would be a sign -- it would be at least for a short period of time the removal of that threat.  He thinks that the implication of a willingness only to raise the debt ceiling for six weeks is that Republicans haven’t gotten over their obsession with using the threat of default as a means to try to extract concessions from him to do harm to the world economy, the American economy, and the American middle class in exchange for trying to achieve their political demands.

But he answered this question; I answered this question.  What remains to be seen is what the Speaker of the House will actually put on paper and what he could get through his rather disparate conference.

Q    But if he signs one without getting the other, isn’t he negotiating with threats?

MR. CARNEY:  He’s signing a bill.

Q    He’s just signing the debt ceiling, let’s say, and you still don't have the government open.  I think the question we’re all trying to get at is that, is he then negotiating with still the threat of --

MR. CARNEY:  By signing a bill?

Q    Yes.  Well, he signs one of them.  But you’re -- obviously, the President also said at the news conference and you’ve said he wants both.  We get that.  He wants both.

MR. CARNEY:  Yes, he wants both.

Q    But if he only gets one, he’s negotiating --

MR. CARNEY:  Ed -- and I think we should let some others in the other row, as Peter said --

Q    Sure.  Please.

Q    Yes.

MR. CARNEY:  -- speak and ask questions.  But what he has said is that Congress needs to do both.  If does one, that's a good thing.  But he will still insist that they do the other.

Q    Okay.

MR. CARNEY:  Margaret.

Q    Thanks.  I have a couple.

MR. CARNEY:  The third row is going to be really mad. 

Q    We’ll tough it out.  Just saying.  (Laughter.)

MR. CARNEY:  April is over your right shoulder.

Q    We know that he would sign the clean debt limit.  Will he do the kind of obvious interim step and ask the House Democrats to support that clean debt limit without the CR, to make it happen?

MR. CARNEY:  I think his position is clear.  I’ve stated it; he told you two days ago; I’ve restated it.  I think beginning to -- now the level of hypothetical here is reaching the absurd because we don't know --

Q    It’s October 10th.  That's why.  I mean, it’s just that there’s --

MR. CARNEY:  But you’re asking me -- this is all in the hands of a Speaker whose direction has been unclear, I think it’s fair to say, for the past several weeks.  So we heard from him and other leaders today, and we’ll see what they are actually going to propose, and evaluate it once we see it.  But it does nobody any good for me to speculate, based on you speculating, what we might support that we may never see from them.  They know our position. 

I mean, I think it’s fair to say, in the conversations the President has had with the Speaker and the public statements he made, that it’s pretty clear what his position is both to them and to you.  And so we’ll see if they do the right thing -- if, in fact, they’ve decided to cease listening to Jeff Sessions, who should be reassuring the world that the bondholders will be getting their payments -- an assertion that seems to contradict what J.P. Morgan said earlier this year, which is prioritization would be like the financial equivalent of that Hieronymus Bosch painting of hell.  Who are you going to believe?


Q    Wait, wait, wait.

MR. CARNEY:  Sorry.  Oh, you had two, that’s right.  Margaret.  (Laughter.)

Q    Nice try, though.  So in today’s meeting at 4:35 p.m. or whatever --

MR. CARNEY:  I just want to say that I’m probably the first and maybe the last Press Secretary who’s ever gotten to say “Hieronymus Bosch” from the podium.  (Laughter.)

Q    So far.

Q    I think I had that poster in college.  (Laughter.)  Anyway.  So this --

MR. CARNEY:  Tell me more.

Q    Right.  No, no.  So in today’s meeting, are we just looking, then, at purely a discussion of the six-week debt limit extension, since you’re not going to do the ransom/shutdown thing?  Then is the half-hour, hour, or however long today takes  -- do you think that the boundaries of that are going to be just how to extend the debt ceiling?  Or do you think you are still holding out hope --

MR. CARNEY:  I don’t know.

Q    -- that it will be the discussion of both today?

MR. CARNEY:  The President will discuss both.  The President will say what he’s said already to leaders of both parties, which is that Congress ought to act and open the government, stop punishing the American people, stop punishing the middle class, stop doing deliberate harm on a repetitive basis to the economy, and instead open the government, raise the debt ceiling.  And then let’s do what Presidents and members of Congress have done over many years and decades, which is sit down and hammer out our differences and reach a compromise. 

And the President has demonstrated, in the wake of his reelection, an ample willingness to meet the Republicans halfway. And what we haven’t seen this year, unfortunately, is a similar willingness.  And when Democrats in the Senate responded to the insistence by House Republicans that they pass a budget so that we could return to regular order and do what Congresses have done for decades and pass a budget that is representative of a compromise between the Senate and the House -- that’s what the House demanded -- so the Senate said okay and they did it.  And the House then said, never mind.  And 19 times, Senate Democrats asked House Republicans to do what they said they wanted to do, and 19 times, House Republicans said no.  And today, we hear they want to have a conference.  Well, good.

Q    So in making those points to the House Republicans, will the President at that point plan to say, “And I will pass the” --

MR. CARNEY:  Before I read out the meeting, I’m going to let the meeting happen.


Q    Granted that the President is an advocate for nuclear nonproliferation, both foreign and domestic, I do want to ask you about some real things that are being talked about on the Hill that aren’t exactly a clean debt ceiling increase.  The House Republicans are talking about adding in language that would bind the Treasury Secretary, prevent him from using extraordinary measures.  I want to know if that’s something that is acceptable, possible, unacceptable.  And then I’ve got a follow-up to that on the Senate side.

MR. CARNEY:  Okay.  I will, when it gets to what they’re saying versus what they’ve actually put on paper and submitted, beg your forgiveness to say that I will wait -- we will wait to respond until we actually see a bill.  House Republican leaders say a lot of things, and I’m not going to respond to all of them. Let’s see what they actually propose, see if they’re serious about raising the debt ceiling and removing the threat of default, and for how long they’re willing to do that, and then we can assess how we move forward.

Q    So to clarify, you’re not ruling that out?  And then the actual follow-up I wanted --

MR. CARNEY:  Again, I’m not going to respond to -- we don’t know what they’re proposing.  I get that anonymous Senate -- or I mean House Republican staff may be telling reporters -- good staffers, good reporters -- and maybe what they’re saying is accurate, maybe it’s not.  But in the end, we respond to actual proposed legislation.  And when we get it we’ll be able to make that assessment.  Fair enough?

Q    I’ll assume the same answer for the Senate side.

MR. CARNEY:  Excellent.  (Laughter.)


Q    Jay, I want to go back to the issue of what’s happening in this evening’s meeting with the GOP leadership, the House GOP leadership, and your definition of ransom.  What’s the President going to say to the GOP leadership about corporate tax cuts, offshore drilling, Keystone pipeline and Obamacare this afternoon?  What’s he going to say to them, and the other issues that --

MR. CARNEY:  I’ll read out the meeting once it happens.  What I know the President will say is that it is the right and responsible thing to do for the elected members of Congress to stop punishing the American people by shutting the government down, and stop threatening further punishment on the American people by threatening default, and just take that off the table. And then let’s get about the business of having a serious negotiation about our budget priorities, something the President has amply demonstrated he wants to do.

Q    All right.  And then also, we understand some Democratic leaders from the meeting last evening said the President made it clear that he is willing to negotiate for investments in early childhood education, children’s activities and infrastructure investments.  Could you talk a little bit about that?  Some of those Democrats are talking about what the President said he wants to put on the table with the negotiations.

MR. CARNEY:  Well, again, you’re talking about what a normal budget negotiation would look like, absent these threats -- I’ll refrain from metaphors -- absent the threats of continued shutdown or default.  And I think what the President was talking about was the investments that are in his budget.  And he believes very strongly and passionately that these are wise investments that we need to make in our children and their education, and wise investments that we need to make in key areas to allow our economy to grow, and our infrastructure and research and development.

So that’s the proposal he’s put on the table.  Those are:  the better bargain for the middle class that the President has been talking about, and there are proposals in his budget and proposals that he’s been talking about since, that he would, in a budget negotiation, argue passionately for.  And he believes firmly that we are our best and our strongest as a nation and as an economy when the middle class is expanding, and when the middle class feels secure.  That has been proven out in our past, and we need to return to that focus, rather than the kind of political games and manufactured crises that have been occupying everyone’s time these last several weeks.

Q    And on something else related to the government shutdown, there are some persons, particularly the American Academy of Pediatrics, who are very concerned about some of the kids -- 200 to 300 kids who have metabolic and genetic issues that need treatment from the NIH, and they’re concerned about funding.  And they’re feeling like the President needs to work on that as well to get some kind of special funding in the midst of this shutdown.  Is there --

MR. CARNEY:  Again, what is absolutely true is that there are terrible consequences of shutdown.  There are inconveniences and then there are real hardships caused by it.  And Congress needs to open the government.  This is the result -- the potential for -- I don’t know of the specific example in any detail, but this is the result of the decision by Republicans to refuse to accept funding levels that they once said met their -- fulfilled their dreams of what they could get out of Democrats and the President.

So the responsible thing to do for those children, for military families, for veterans, for hardworking Americans across the country, for small businesses who need loans, is to open the government.  The President is not asking for anything in return.

Q    But, Jay, a lot of the question --

MR. CARNEY:  April, I can't answer every specific instance of hardship or consequence.

Q    I understand.  But these are life-or-death issues.  And then some of these people are concerned that our President --

MR. CARNEY:  Right, I get it.

Q    -- is allowing monies go other places.  What about these issues?

MR. CARNEY:  April, I get it.  There are just countless stories of the negative effects of shutdown, so let’s end the shutdown.  The President is not asking for anything in return.  No partisan strings attached, just end the shutdown. 

Q    Jay, for the outside world, if I may, as an outside observer looking at this dispute, without resorting to metaphors, is this good?  Is it a sign of strength or weakness of the American democracy?

MR. CARNEY:  The greatness of democracy is that it allows for free and open debate, and allows for the freely elected representatives of the American people -- or of any people where democracy has taken root to have themselves heard.  And that is the case here, even when it is messy, and even when there are less-then-ideal outcomes to that debate. 

But it is the responsibility of leadership and being elected to Congress -- in this case, here in the United States, or parliaments elsewhere -- to act responsibly and to advocate for your passionately held positions, but not to the point of punishing the people you serve because you don't get what you want.  And that is what’s happening here.

So obviously, observers of this debate both in the United States and around the world will draw conclusions based on what they see and what they know about our history.  What I think is obvious is that the greatest nation on Earth, when it comes to the economy and its extremely valuable position as the safest investment in the world, should not toy with that, which is why we should not flirt with default, why we should not listen to those, against the collected wisdom of a whole lot of experts in the field, who say default wouldn’t be bad -- because it would be.  It would be terrible.

Q    Jay, I come here from the IMF.  And this is exactly what --

MR. CARNEY:  I thought you came from Russia.  (Laughter.)

Q    No, I came to the briefing from a briefing at IMF.  They are holding their annual meetings now.  And this is exactly what they are talking about.  This is the main subject for them, too.  But they are saying what the question is -- because I am supposed to ask questions, right?

MR. CARNEY:  Hopefully.

Q    Who is speaking for the Americans?  Because there is a commitment from the U.S. at the IMF, approved a couple years ago, two or three years ago, for the --

MR. CARNEY:  Sorry, Andrei, I think for everyone’s sake, what’s the question?

Q    Yes.  At the IMF, there is a reform plan approved by the United States.  It’s been held back two years by the U.S. Congress.  Does it mean that in the future, when the U.S. makes a commitment, it needs to say it is a commitment made by the President and the Congress?  Who speaks for the U.S. on foreign policy with one voice?

MR. CARNEY:  On foreign policy?

Q    Yes.

MR. CARNEY:  The President.

Q    The President.  So what about the Congress?

MR. CARNEY:  Well, obviously the Congress plays a very important role in a variety of ways when it comes to the conduct of foreign policy and the funding of foreign policy initiatives. But I think if you read the Constitution, that delineation of power is pretty clear.

Don -- sorry, the person next to Don.

Q    Thanks, Jay.  Nick with Gannett Wisconsin.


Q    Wisconsin Governor Scott Walker’s recent op-ed called on the President to take a page from his governing book.  What’s your response to that?

MR. CARNEY:  I didn't see it.

Q    He was talking about government reforms, taking your medicine, that type of thing.

MR. CARNEY:  Well, again, I didn't see it.  I can tell you that the President is very interested in having serious-minded negotiations with Republicans over funding our budget priorities.  The President would also note that since he has been President, our deficits have fallen at the fastest rate since well before you were born, and that he wants to continue that work.  And that requires tough choices, but it also requires investing in our economy so that it continues to grow. 

Growth begets jobs.  Jobs helps the economy grow further, helps us reduce our deficits.  And we need to make the right choices and the right decisions.  And the President looks forward, as he has all year long in his many meetings and conversations with Republican lawmakers here in Washington, to the ability to have those compromise-focused negotiations.


Q    Jay, can you tell us more about the President’s pattern of taking evening strolls with his Chief of Staff, which is an interesting comment that you made.  I don’t remember him taking evening strolls with Rahm or Jack Lew.  Can you just elaborate on it -- is that a new habit that he has?

MR. CARNEY:  I don’t know -- I recall he would do that with previous Chiefs of Staff.  It’s a nice place to take a walk and a good place to have a conversation.  So it is true that the President and Chief of Staff on occasion go for a stroll and talk about all the various issues that have arisen throughout a day.  And unfortunately, the spectacular weather that we’ve been experiencing in Washington has come to an abrupt end, but maybe it will improve in the near future.

Thanks, all, very much.

Q    Does the White House consider Ronald Reagan a financial expert?

MR. CARNEY:  Well, we threw that in there because Ronald Reagan said -- I appreciate the -- here’s the compare/contrast.  There’s Steve King, presumably who, I assume -- I don’t want to put words in his mouth -- admires President Reagan, says that “I don’t think the credit of the United States is going to be collapsed.  All of this talk has been a lot of false demagoguery.”  And I wonder if he thinks that President Reagan, when he said, “Bringing the government to the edge of default threatens the holders of government bonds and those who rely on Social Security and veterans benefits” in September of 1987 was engaging in a lot of false demagoguery.  I doubt it.

Q    So henceforth we can consider the White House agreeing with President Reagan as a financial expert?

MR. CARNEY:  I think we can agree that President Reagan was right when he said we shouldn’t default or flirt with default.

Thanks very much.

1:58 P.M. EDT

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