The White House

Office of the Press Secretary

For Immediate Release

February 02, 2015

Press Briefing by Senior Administration Officials on the President's FY2016 Budget

South Court Auditorium

12:54 P.M. EST

MR. EARNEST: Good afternoon, everybody. The day that you’ve been waiting for for so long is finally here. The administration has released the budget. You all have heard us talk about this quite a bit already.

So what I am going to do is have my colleagues each make very short opening remarks to sort of talk about some of the highlights that they’ve been focused on in terms of putting the budget together, but we’re going to reserve the bulk of the time here to taking your detailed questions that I’ve been putting off for weeks, but now we can finally go through them.

So, Shaun, since you are the principal author here, why don’t you go first?

DIRECTOR DONOVAN: Great. Thank you, Josh. And I want to thank my colleagues -- Jason, Cecilia and Jeff -- for joining us as well today. And let me begin with where we’ve come from. This budget comes on the heels of a breakthrough year for America. In 58 months, we’ve created over 11 million jobs, and our unemployment rate fell 1.2 percentage points from the previous year -- the largest annual decline in 30 years. The number of uninsured Americans has dropped by an estimated 10 million, and we brought our deficits below 3 percent of GDP, less than the 40-year average.

This budget supports the President’s ambitious vision for accelerating growth and expanding opportunity, and does so while meeting key fiscal tests of sustainability; reducing deficits to below 3 percent of GDP; and stabilizing debt as a share of the economy, and putting it on a declining path. It achieves these goals by paying for all new investments, replacing mindless sequestration cuts with smart reforms, and achieves $1.8 trillion in deficit reduction, primarily from health tax and comprehensive immigration reform.

I’ll talk primarily about the latter two prongs of our approach, and my colleagues will speak to some of the specific investments.

In 2014, we began to move away from manufactured crises in austerity, helping to lay the groundwork for stronger growth and job market gains. The Bipartisan Budget Act of 2013, or Murray-Ryan, as it’s widely known, reversed a portion of sequestration and allowed for higher investment levels in 2014 and 2015. Not only has the Murray-Ryan agreement contributed to improving job market and accelerating growth, but it allowed for important investments in critical priorities, ranging from early education and manufacturing, to providing appropriate funding for national security.

But that agreement expires at the end of this fiscal year, causing a return to sequestration in 2016 that would bring discretionary funding to its lowest level adjusted for inflation since 2006. That’s despite the fact that since 2006 the U.S. population has grown by 7 percent, and costs in some key areas, such as Veterans Administration medical care, have grown much faster than inflation. And it’s despite important needs in national security.

The Joint Chiefs have been very clear that a return to sequestration levels would significantly reduce the military’s ability to fully implement the President’s defense strategy. That’s why the budget proposes to end sequestration, fully reversing it for domestic priorities in 2016, matched by equal dollar increases for defense.

These investments are more than paid for with smart spending cuts, program integrity measures, and common-sense loophole closers. The proposed increases in the discretionary budget caps will make room for a range of domestic and security investments that will help move the nation forward, including a number of investments my colleagues, Jeff and Cecilia, will discuss in a moment.

And I want to emphasize again that every investment in the budget, both the discretionary investments made possible by reversing sequestration, and also the new and expanded tax credits for middle-class and working families, and mandatory investments that will expand access to community college and preschool -- all of them are fully paid for through spending or tax reforms.

Meanwhile, the budget also achieves an additional $1.8 trillion in deficit reduction in the budget, primarily by focusing on the key drivers of our budget challenges -- health care cost growth and inadequate revenue levels in the face of an aging population. Specifically, the budget includes about $400 billion in health savings that build on the Affordable Care Act, including measures that complement the administration’s other efforts on delivery system reform that Secretary Burwell announced last week, and will help maintain the historic slowdown in health care cost growth while improving health care quality.

The budget also raises about $640 billion in net revenue for deficit reduction from curbing high-income tax expenditures. And this year’s budget again reflects the President’s support for common-sense, comprehensive immigration reform along the lines of the bipartisan Senate-passed bill. In part because it helps balance out an aging population, immigration reform is good for the economy, for the Social Security Trust Fund, and our budget more broadly.

Overall, the budget brings deficits down below 3 percent of the economy, while putting debt on a declining path. It shows how we can build on the economic progress that’s been made over the last five years, and make investments to ensure that our country remains both strong and prosperous, while at the same time continuing our fiscal progress.

With that, let me turn it over to Jason Furman, who’s going to discuss the economic outlook and the budget assumptions.

MR. FURMAN: Good afternoon. As Shaun noted, the U.S. economy strengthened considerably in 2014, with the strongest job growth in any calendar year since 1999. Looking ahead, the administration expects that the economy will continue to grow at an above-trend rate of 3 percent per year in both 2015 and 2016. This assumption is in line with the forecast from the Congressional Budget Office and the Blue Chip consensus, and is somewhat more conservative than the latest international monetary fund forecast.

While the economy has come a long way since the recession, the expectation of additional above-trend growth reflects the widely held view that the economy is still returning to the full utilization of its resources.

Several factors are supporting this growth. Fiscal policy has shifted to a generally neutral stance, aided by the Ryan-Murray agreement reached at the end of 2013. If Congress continues to act without brinksmanship or harmful austerity, fiscal policy will continue to be conducive to strong growth. Consumer spending has picked up, reflecting the savings from the recent drop in energy prices. The ongoing improvement in household finances and increased economic optimism. And there’s continued room for growth in both business and residential investment.

The slowdown in growth for many of our key trading partners is, however, a headwind for the U.S. economy, and a downside risk to the near-term forecast. In the later years of the forecast window, we assume that the growth rate converges to our projected 2.3 percent rate of potential GDP growth. This matches the latest long-run forecast by the Blue Chip panel, and is generally in line with CBO’s recent estimate of 2.2 percent per year for potential. We also project that inflation will remain low, the unemployment rate will continue to edge down, and interest rates will rise as the economy continues its expansion.

Finally, I want to note that the forecast was finalized in November in order to give agencies time to prepare their budget estimates. On Friday, we learned that the economy grew 2.4 percent in 2014, above the 2.2 percent rate that was assumed in November and appears in the budget.

Moreover, both inflation and interest rates are also somewhat lower than we had forecast in November. We will, of course, have updated economic and budget projections in the mid-session review that would incorporate all of this information.

And with that, let me turn it over to Cecilia.

MS. MUÑOZ: Thanks very much, Jason. Good afternoon, everybody. You’ve heard us, in talking about the budget in the weeks leading up to today, that the budget is an expression of the President’s vision for what he wants -- what he wants us to be, what he wants our economy to look like in the 21st century, and how we will continue to lead the world economically.

The supports for working families that you see in this budget, in particular, are an expression of the vision of both what helps us economically, as well as what supports the middle class and, in particular, supports and creates a good start for our youngest Americans. So I'm going to focus in a little bit in particular on the series of proposals around children and child care, because this budget presents the most comprehensive to date approach for early childhood education for children in this country, from birth until they enter kindergarten. And the hope here is that one of the many results of the policies that the President has put forward is more children entering kindergarten ready to learn.

So this budget sets a historic goal of helping every family with children under five find a place for their child to learn and grow while parents work. So the biggest elements of this plan include tripling the child care tax credit for middle-class families to up to $3,000 for families with young children, offering child care subsidies to low-income working families to serve an additional one million children a month by 2025, while also working to strengthen the quality of child care programs.

In addition, the President is repeating his Preschool For All program. This is the proposal to provide pre-K -- high-quality pre-K to every four-year-old in this country. And there’s also an expansion of the Head Start proposed in this budget, in particular to make sure that Head Start can be offered for a full day throughout a full year, which is not currently the case for many Head Start programs.

So the combination of these proposals is essentially a comprehensive approach to early childhood development in a way which supports children and also supports working families.

There are other important investments in this budget in the K-12 system, as well as in higher education. You've obviously heard about the proposal to make community college free. We continue our commitment to Pell grants and other supports for families in higher ed. And there are important investments here in the Title I program under the Elementary and Secondary Education Act, an important $3 billion investment towards the goal of making sure teachers are full prepared and fully supported throughout their careers. And then a $1.2 billion investment towards creating better schools through re-designing high schools, through school improvement grants and investments in charter schools.

So altogether, what we see is an approach that's really focused on, again, making sure that working families have the supports they need, particularly families with youngest children, but also making sure that we are investing in the full spectrum of the educational system from birth really through what we think of now as grade 14, by making community college as accessible in the future as high school has become for Americans today.

MR. ZIENTS: I thought I’d just spend one minute on what is really a core component of middle-class economics, and that's the President’s plan on infrastructure. Infrastructure is critical to creating good middle-class jobs, and it’s also critical to our long-term competitiveness in a global economy.

We have an over-$1-trillion deficit in infrastructure. All of us feel it every day. Workers trying to get to work stuck in traffic. Businesses trying to get products overseas in an efficient manner to export and support good-paying jobs. Infrastructure is critical to all of this, and we're not where we need to be.

The President goes very big on infrastructure in the budget to repair roads, bridges, freight, and our rail systems. It’s a long-term plan, so it’s six years -- up from four years last year. We’ve been solving infrastructure in few-month patches. That is no way to plan infrastructure projects. So this is a six-year proposal. It’s $480 billion, which allows us to fund at about 40 percent above the current level of spend. And there are many high-return investments for that $480 billion. Importantly, it’s fully paid for through business tax reform -- specifically the one-time money that's overseas, bringing that money back and raising taxes on that money to pay for the plan.

So the bottom line is infrastructure is traditionally a bipartisan issue. Everyone agrees our infrastructure is outdated; it needs to be modernized. It’s also a twofer in that it supports good-paying jobs -- good-paying, middle-class jobs -- right away. And at the same time, it sets us up for long-term competitiveness in this global marketplace.

So with that, I’ll hand it back to Josh.

MR. EARNEST: Thank you for the top lines, guys. So with that, let’s go to questions. Who wants to be first?

Mr. Kuhnhenn.

Q Thanks, Josh. Jeff, I wanted to follow up on the infrastructure and corporate tax reform component. Do you believe that without a full corporate tax reform, you can still do a one-off on the 14 percent on accumulated foreign earnings? Or does that -- can only that occur in the context of a broader corporate tax overhaul? And also, yesterday, Ways and Means Chairman Paul Ryan said that corporate tax reform has to occur in the context of small business tax reform as well, which would mean somehow dealing with individual income tax reform. So do you see those as inevitably --

MR. ZIENTS: We do believe in comprehensive business tax reform, which involves lowering the domestic rate, the statutory rate, which is at 35 percent -- which is the highest in the world -- to 28 percent, 25 percent for manufacturing; setting up an international system that is a hybrid system where you have a minimum tax of 19 percent, and then bringing back the money that’s overseas at this 14 percent that you mentioned. That is very different than a repatriation holiday, which we believe is bad policy.

You’re right that many businesses are small businesses, and the President’s plan does a lot for small businesses. It simplifies how small businesses file their taxes so they can use cash accounting, which is basically their bank statement rather than very complex accrual accounting. That’s available for all businesses up to $25 million. It also enables businesses to write off investments in their first year of up to a million dollars. That will really help simplify small business filings and lower rates for many small businesses.
So we believe in doing business tax reform across the board, while at the same time making sure that we do things that are good for the middle class. I mentioned in my opening, investing in infrastructure is good for the middle class, so that’s an important component of any tax reform that we do -- making sure that we are benefitting the middle class.

Q The 14 cannot occur absent broader --

MR. ZIENTS: It is not a one-off proposal. It’s part of a more comprehensive approach to fix what is clearly a broken business tax system. And at the same time, we want to make sure that as we’re addressing business tax reform, that we’re doing things that are good for the middle class.

MR. EARNEST: Justin.

Q I know that, Josh, you described this as kind of the open -- I know that you’ve described this as kind of the opening of a negotiation, and I was interested in something that the President said while he was unveiling it today. He said, “I’m not going to accept a budget that locks in sequestration going forward,” and I’m not going to “accept a budget that severs the vital link between [our] national security and [our] economic security.” So I’m wondering, as you guys are entering a negotiation with Republicans in Congress, whether those are both kind of bright lines that you’re going to insist on in any budget document that might actually pass.

MR. EARNEST: So you’re asking if there are additional ones beyond the ones that the President mentioned today?

Q Would you veto, I guess, legislation that doesn’t include those two aspects?

MR. EARNEST: Well, we just put out our budget proposal today and we haven’t seen anything from Republicans yet, so I don’t want to be -- I mean, Republicans have found it a virtue for some reason to declare a budget dead on arrival before having seen it. I don’t think I want to put myself in the same position. The President has indicated that he’s willing to consider good ideas from either side of the aisle wherever they -- from wherever they originate, particularly if they’re going to benefit middle-class families.

And I think that’s part of why you’ve seen the President identify at least those two areas as essentially deal-breakers for him, because continuing to leave the sequester in place does have a negative impact on our ability to support middle-class families, and it certainly has a negative impact on the ability of our men and women in the military to keep our country safe. You don’t have to take my word for it; we’ve obviously seen just about every uniformed military leader who’s spoken on this issue has raised the same concern.

So the kind of concerns -- the good news in all of this, I think, is that the concerns that the President has raised along these lines are consistent with concerns that at least some Republicans on Capitol Hill have raised as well. We know that there are Republicans who are concerned about the sequester, both in terms of the impact it’s having on the economy and the impact it’s having on national security, for example.

So despite the President being pretty declarative about those two elements, I don’t think that necessarily is going to rule out or make it that much more difficult for us to be able to try to find common ground on some common-sense budgeting proposals that are in the best interest of our national security and the best interest of middle-class families.

DIRECTOR DONOVAN: Josh, just from a fiscal perspective, I also think that there is growing bipartisan recognition that discretionary spending is not the important issue from a fiscal perspective. In fact, our discretionary spending is at near its lowest level as a share of our economy as it's ever been. And I also think it's important to remember that national security is dependent on more than just the Department of Defense budget.

In fact, in the non-defense category is all of the commitments we've made to our veterans. It includes the Homeland Security budget, which obviously is a critical part of protecting our country. It's why it's critical that we get a bill done, a full year bill for 2015 right now.

So I think we have to see this, in addition to the investments that Jeff and Cecilia have talked about, as this connection between the defense and the non-defense part of the budget. You really can't -- that's what the President said today -- you cannot break that link.

MR. EARNEST: Good. We’ll go back to this side. Jim.

Q Mr. Donovan, you said the budget would be good for Social Security. I haven't had a chance to read the budget this morning. Can you tell us exactly how this budget would strengthen the Social Security system?

DIRECTOR DONOVAN: Well, broadly speaking, the long-term deficit is significantly helped by this budget. Just to be clear -- and CBO put out these numbers last week -- under current law, we would see both deficits grow above 4 percent of GDP and the debt grow over 80 percent of GDP. What this budget does is to reverse that course. It keeps deficits under 3 percent of GDP every year of the budget window. And, critically, it starts to bend that curve on debt, so it stabilizes and then begins to reduce debt as a share of GDP.

Specifically, on Social Security Trust Fund, one of the fundamental problems we're facing is that the number of workers that we have relative to the number of retirees that are supported by Social Security has been shrinking. And so comprehensive immigration reform is actually one of the most critical things that we can do to shore up the long-term solvency of Social Security, and as a result, to improve our deficit challenges in the long run.

And in fact, you might have seen last week that just from the executive actions that the President took late last year, there is a positive impact on the Social Security Trust Fund because of additional payments that come into that. And so comprehensive immigration reform on a much larger scale would improve that.

CBO’s numbers are that comprehensive immigration reform -- and that's what we reflect in our budget -- in the first decade is about $160 billion of deficit reduction; in the second decade, it's almost $700 billion of deficit reduction. So it grows over time as more workers come into the country, pay taxes, and pay into the Social Security Trust Fund.

MR. EARNEST: Kristen.

Q Thanks. Couple questions. Is there anything in this budget that specifically discourages tax inversions, first? Secondly, if you are serious about finding common ground with Republicans, why not include a plan in this budget for entitlement reform? I know that that was a big part of the 2011 budget discussions. And then I just want to get your thoughts on the sequester. You’ve been talking about the fact all day that the deficit has been reduced by two-thirds, you said. So did the sequester ultimately work?

MR. EARNEST: Jason, do you want to do inversions first?

MR. FURMAN: Yes. I'm also happy to start on the entitlement part, too.

In terms of inversions, the budget repeats a proposal the President had made last year and actively called on Congress to pass that would set the threshold that you have -- as long as you're majority-owned by your historical U.S. shareholders, you’ll be treated for tax purposes as a U.S. company. So it would take away the ability to find a smaller foreign company, acquire them, and shift over to them.

The entire business tax reform agenda, though, is also about making it more attractive to invest in America and to close a number of the other loopholes that companies use that complement what they’ve done on inversions. So all of this, as the Secretary said when he announced what he was doing administratively on inversions, that helped, but it couldn't do as much as what you could do legislatively. So that proposal repeats itself here.

Just to take the first crack at entitlements, and then others could build on it. This is a budget that does include $400 billion of savings from reforming our health system. Those reforms to our health system are very much in the spirit of what we've done to date, which is about how to make the health system more effective and efficient. When you do that, it brings down costs, it saves money for the budget, it saves money for seniors, and it slows the cost growth in health care.

That's part of an overall fiscal approach, though, that includes reforming the tax system and reforming the immigration system. So it follows in the same path that the President has in previous budgets of balanced deficit reduction coming from the spending side, coming from the revenue side, and sufficient to get the debt on a declining share of the economy, which is what economists would think is important.

MR. EARNEST: Shaun, do you want to add to that?

DIRECTOR DONOVAN: Just two quick points I would make. One, there’s been a lot of focus, rightly so, on our short-run deficits and how much they’ve come down. This has been the fastest period of sustained deficit reduction since after World War II. But we've also seen substantial improvements in our long-run deficits. And the single biggest driver of that has been the slower growth in health care costs.

Just to take one example, if you look at CBO’s numbers, our spending on Medicare and Medicaid in the year 2020 is now expected to be almost $200 billion lower, just in that one year, than it was when the President came into office.

So what Jason is talking about on entitlement reform is incredibly important, but building on that as well, we have a new proposal in the budget this year which would adopt bipartisan legislation on what’s called the doc fix, or SGR. We would adopt that, paid for, because everything in the budget is fully paid for, and we would add some additional reforms to that legislation that build on what Sylvia Burwell, Secretary of HHS, has done on delivery system reform. So if we can keep driving those costs lower, even more important than Social Security or other entitlement issues, this issue of health care cost is the single most important place where we can really bend the cost curve in the long run on entitlement savings.

MR. EARNEST: And then there’s the question of the sequester and whether or not it worked.

MR. FURMAN: Let me just say, first of all, if you just look at the deficit reduction to date, more of it this past year was because of the tax deal that restored the Clinton-era rates on high-income households and the Affordable Care Act, the combination of those, than from the sequester.

Second of all, the most important test of your fiscal policy, as Shaun says, is where you are over the medium or long run. And there, those steps dwarf the impact of the sequester in terms of changing our medium- and long-run debt and deficit trajectory.

Q (Off-mic.)

DIRECTOR DONOVAN: We have detailed charts in the budget that we could provide to you that show precisely what role it’s played. But, again, to Jason’s point, it’s dwarfed in the long run by these other –- and also, the fundamental point that it’s not going to where our challenges are in the long term on the fiscal side.

Discretionary spending, once again, it’s at a very low level relative to GDP. And, in fact, over our budget window, it continues to grow smaller as a share of GDP because it is not growing as fast as GDP. So it is not the fiscal challenge that we focus on. If anything, the reverse; if we want to grow our economy, we need to make the investments that Jeff and Cecilia have talked about.

MR. EARNEST: Roberta.

Q How did you choose the 14 percent level for the tax on bringing back overseas profits? And would there be any limits on what companies could do with those repatriated funds? And do you have forecasts for the impact on the economy if a considerable amount of company brought back those funds?

MR. ZIENTS: That rate of 14 percent is about 40 percent of the 35 percent. Importantly, it will be on all dollars overseas. So this is not voluntary; it’s mandatory. And the dollars would come back to the U.S. hopefully to be invested in good U.S. jobs and manufacturing facilities, but there would not be a specific requirement on those dollars. The requirement is that they all pay 14 percent.

MR. EARNEST: This side of the room. Kevin.

Q Josh, thanks. I want to ask a couple questions. First, the debt. For all the high-fiving and balloon-releasing about the deficit, which is impressive, the debt is a ticking time bomb. How aggressive is your policy toward reducing the debt?

DIRECTOR DONOVAN: So as I said earlier, on our current course, debt would grow as a share of the economy from about 75 percent now to about 81 percent by 2025. What we do in our budget is bring that down substantially so that debt as a share of the economy shrinks from about 75 percent of GDP down to 73 percent of GDP by the end of the window, so by 2025.

And I think perhaps even more importantly, the key things that we’re doing, unlike sequestration, the key things that we’re doing for our long-term fiscal future grow in importance as you get beyond 10 years. So the tax changes that we’re talking about, for example, on capital gains, they’re structured so that the scale of revenues they bring in grows over time. Immigration reform is something where the impact would grow substantially over time. And many of the things that we’ve talked about before on health care costs, delivery system reform and others, the benefits would compound over time as you bring the growth in health care costs down below the growth of GDP. So all of those are the most important things that you can do in the long run to bring down our debt.

At the same time, what we should recognize is that we owe a debt to our seniors who have paid into Social Security and other benefits. What we can’t do is make reforms that break that promise to them, and recognize that we have a demographic bubble that we are dealing with through roughly the mid-2030s. And if we can get through that period with debt stabilized and on a declining path as our budget does, we put the nation in a much better position as the number of workers grows, particularly if we can pass immigration reform.

Q And a very quick follow. I want to ask about military spending in general. Fighting the wars on terror and everything that is still happening -- it is very real. Does this budget address, in your estimation, everything that needs to be addressed, or is there more that you can do to make sure that the American people are safe?

DIRECTOR DONOVAN: Well, first of all, we have to recognize that the country has made real progress. The President talked about in the State of the Union address that when he came into office, that we had 180,000 troops overseas in Iraq and Afghanistan. We’re down now to 15,000 and on a downward trajectory there. And so we’ve had real benefits in terms of the lives of our brave service people who are serving overseas.

At the same time, there are real fiscal benefits from that. We’re spending $130 billion less this year just on emergency military costs than we were when the President came into office. And because of his stewardship of our national security, those costs continue to decline by another more than $10 billion in our budget proposal.

At the same time, the budget recognizes that in our base investments, in the DOD budget, not our emergency costs but our base budget, there are places where we need to invest. And that means investing in our service people. It means investing in making sure our technology stays ahead of other countries, whether that’s in space or other research and development.

So there are a number of places where we recognize it, and that’s why you see a $37 billion increase in 2016 for the defense budget that really focuses on where those needs are and keeping Americans safe.

MR. EARNEST: Jim.

Q Thank you, Josh. And, Cecilia, I wanted to ask you, if I could, about the $1 billion being sent to Central American countries to address the issue that happened last summer with the immigrants coming across the border. When there, the biggest problem that people who are not in the government talk about is government corruption. What is the United States going to do to protect that billion dollars to make sure it doesn’t appear and land up in Swiss bank accounts, and instead actually helps the people there?

MS. MUÑOZ: So I’ll tackle this a little bit, but with the reminder that I’m the Domestic Policy Advisor so I will also turn to my colleagues.

The focus of the resources going to Central America is really both to improve safety as well as development. When you’ve heard the Vice President talk about it, he talks in very strong terms and makes a comparison to what we did in Colombia, which required enormous investment of resources as well as political capital by the Colombians in partnership with the United States. And we're talking about building the same kind of partnership with the Central American countries to make sure that they're advancing economically, but that they're also making the advances that are needed with respect to safety and security.

You'll recall that the reason for -- one of the stated reasons for the crisis in the arrival of unaccompanied minors that we saw last summer had to do with folks’ fear, in particular fear of violence affecting young people. So we're dedicating resources to a panoply of things with a goal being that the United States be a good partner to these societies and help strengthen them so that they're able to deal with these problems in country rather than confront the kind of crisis that we had here.

And I think it’s a broader illustration of the notion that we have to approach these issues as a hemisphere, and that the United States has to be thinking about this and thinking about situations like the situation we experienced last summer. From a much broader perspective, that was not just a migration situation; it was a migration situation which resulted from a much larger phenomenon that we have a role to play in making sure that we mitigate.

DIRECTOR DONOVAN: So just to add a little bit on Cecilia’s point, Plan Colombia has been remarkably successful in going at exactly the same issues that you talked about. And so as a piece, as a Cecilia talked about this comprehensive approach, a specific piece of the funding that we would dedicate is on governance reforms and would be directly targeted at making sure that you build the government institutions and also attack the kind of graft and corruption that you're talking about.

The other thing I would just mention on this: This is something that the President and the Vice President really have been focusing on for some time. And we’ve already taken a number of steps where the three countries in particular that we're focused on have already agreed to a number of things to strengthen, whether it’s the rule of law or to stop corruption within their systems. And we can get you more specifics on those, but there are steps that have already been committed in advance of us making this commitment.

I think it’s also important to recognize that this is one of many opportunities that the President’s efforts on Cuba have begun to open up in the hemisphere. We have a moment of opportunity to move forward together with countries across the hemisphere so that we're much more likely now, as Cecilia said, to get other countries investing -- the source, the three countries themselves -- but other countries, as well, that would support our efforts.

MR. EARNEST: Thank you. On this side. Let’s see. Lalit.

Q Yes, thank you. Can you give us some more details about your Asia Pacific rebalance? And is the increased budget allocation for cybersecurity, is it driven by the threats being posed by China and Russia?

DIRECTOR DONOVAN: I’m sorry, just to make sure, you said on the Asia Pacific rebalance?

Q Yes, yes.

DIRECTOR DONOVAN: I think what probably would be best, given that we don't have a national security staff here, is if maybe if we could follow up with you specifically. There are a number of places where we are increasing investments to focus on the Asia Pacific rebalance. But I’m not sure we have the expertise, the right expertise here to get into detail on those.

MR. EARNEST: So, Lalit, I’ll have somebody follow up with you, okay?

Q Cybersecurity?

MR. EARNEST: Cybersecurity. Shaun, can you take that? Or, Jeff? I’m sorry.

DIRECTOR DONOVAN: We do have a range of investments around cybersecurity, well over $10 billion of investment that is going toward cybersecurity. That includes both research and development, investments that are part of a broader significant expansion of R&D, as well as specific investments at the Department of Homeland Security; at OMB actually, which is responsible for setting policy in many of these areas; and also in our national security agencies, more broadly. So it is a specific area, and you’ll see called out in the budget presentation today, many more details on exactly where those are focused.

MR. ZIENTS: And I’ll remind folks that the President has sent to the Hill legislation on data breach and on information sharing, and encourages those pieces of legislation to move forward as fast as possible in bipartisan way. The President also will be hosting a summit on cybersecurity on the West Coast at Stanford University on the 13th of this month, so in 10 days or so.

MR. EARNEST: All right. Jonathan.

Q Three questions.

MR. EARNEST: I was actually referring to --

Q Oh, sorry.

Q Hi, a number of these proposals have been in this budget for quite some time -- closing the carried interest loophole, the Buffett Rule. They were not passed by a Congress that had Democratic control in the Senate. What can you do in the coming year to bring Republicans to the table? And what makes you think that these plans actually have life this year with the new Republican Congress?

MR. EARNEST: Well, I’ll take the first crack at this, and Shaun may have some other ideas on this too. I mean, I think the first thing that comes to mind, Jonathan, is just that the fact that they didn’t pass the first time doesn’t mean they’re not good ideas. I think the reason that they’re included in the budget once again is because they are good ideas, and we’re going to continue to advocate to members of Congress in both parties that they should consider them and actually include them in legislation.

The second thing is, we also would acknowledge that this is going to be a compromise; that we’ve got Republicans who are in charge of the Congress, we’ve got a Democrat who’s sitting in the White House. So anything that emerges from these proposals and discussions about the budget will require an effort to try to find some common ground. And maybe there will be an opportunity to include some things in this budget that Republicans haven’t previously supported, in exchange for some things -- some new ideas that they may have.

The third thing is -- and this is, I think, a good segue to Shaun -- is that there are a pretty substantial number of things that are included in this budget that have been previously supported by Republicans. And I think it is a good indication that by focusing on what we think the core goals should be, in terms of protecting the country and investing in middle-class families, that there should be some reasonable common ground that we can find. That’s why the President so strongly advocates ensuring that we not allow a disagreement over one issue, like immigration, to become a deal-breaker over all the others.

There are a lot of important things that we can do where there does appear to be some common ground. I'm not suggesting that this is easy, or that anybody here thinks it's going to be easy, but there certainly is an opportunity that’s worth pursuing. Shaun, do you want to just do two or three of sort of some of the best ideas that are included in this budget that have previously been supported by Republicans?

DIRECTOR DONOVAN: Sure, and Jeff may have some thoughts on this as well, given his focus on tax policy. But there are a number of things -- the financial fee is a good example, but also the linkage between international tax reform and infrastructure, which were included in the Camp plan. And many of the proposals -- whether it's around child care or a number of the other things that Cecilia focused on, free community college -- have been ideas that not only have had Republican support in the past, but actually legislative proposals that we’ve seen with bipartisan support.

So that doesn’t mean there’s been support for every one of the ideas -- I think Josh is exactly right. But we will see I think a significant opportunity to get some of these -- to advance some of these ideas going forward.

The other thing I would just point out, which I think you’ve got lots of good examples from the budget last year, whether it’s on minimum wage or others -- it isn’t just about what the federal government does, it’s also about what mayors and governors and other local officials do. And I think there is a real opportunity in many of these ideas to build momentum and support in a way that Congress may not lead on them but they may end up following because of work that happens in other parts of the country.

MR. ZIENTS: I would just add that, yes, I think there is, at a strategic level, real alignment. I used the example that we talked about some of infrastructure and tax reform. Everybody agrees that we have to fix our infrastructure. Everybody agrees that the current tax system doesn’t work, that our statutory rate at 35 percent is the highest in the world, that our international system is dysfunctional.

And then everybody agrees a top line -- not everyone, but both Republican leaders and some Democratic leaders, including the President, most importantly, agree on the basic framework for the approach. So there’s a lot in the detail, but the strategic alignment is real and significant. And then you can be more granular and look at something like expanding the EITC, the childless EITC, which both the President proposes in his budget and Paul Ryan proposes.

So I think you have strategic alignment in some very important areas, and then you have specific alignment around proposals that both Republican leadership and the President agree upon. So we’re hopeful that we can get some of this stuff done.

MR. EARNEST: Okay. Over here. Connie.

Q Thanks. Cecilia, on the 529 plan, tuition plan, how safe is that? Is there any chance that could be rolled back and we would lose our investment?

MS. MUÑOZ: We’ve already said -- we’ve already essentially backed away from the original 529 proposal. It was also a very, very small part of the restructuring of the various offerings with respect to savings for a college education.

So the point here is that this administration continues to be committed to making sure that we’re making resources available to make college more affordable. So the budget includes things like making sure that Pell grants are permanently protected from inflation. We have the community college proposal. But we also have a consolidation of the various tax credits and other sort of structures that exist now. And the idea being that we learned that a significant number of folks who participate in one program ended up not participating in the one that would have benefitted them more because there are so many different options and it can be confusing.

So the goal here is to consolidate in such a way that more middle-class families, and families working to get to the middle class, get the support that they need to pay for college and to repay student loans.

Q (Off-mic.)

MR. FURMAN: The administration has no plans or proposals in the 529 space.

DIRECTOR DONOVAN: Just to put a -- as the budget wonk here, to put a number on this -- what we’re proposing in the budget is a nearly $50 billion-dollar increase in tax benefits toward paying for college. And so, on a net basis, what you’ll see is that the President’s proposal dramatically improves college affordability through the tax system compared to what we currently have.

MR. EARNEST: John.

Q Two questions. One for Josh, one I think for Jason. Josh, what do you think the effect of this budget will be for Democrats heading into the 2016 election, both at the presidential level and at the congressional level? Is there anything in here they're not going to like? And then for Jason, on carried interest, which Jonathan mentioned a moment ago, it’s my understanding that that loophole could be closed without congressional action with the reinterpretation at the Treasury or IRS level. Is that the case? And if so, why not just close it?

MR. EARNEST: As it relates to the 2016 question, I will confess this is the first time I’ve sort of thought about the budget in that context. My suspicion is that everybody who looks at this will think that there is at least one element in the hundreds of pages that they’re presented with, or they’ll think to themselves, gee, I might have done it a little bit differently. I suspect that’s true of the vast majority of Democrats, both those who are in office and those who are contemplating running for a different one.

But, at the same time, I also think that what is codified in the series of volumes that were presented today is a pretty cogent vision for how to move the country forward and how to grow our economy from the middle out; that by focusing on middle-class economics, we can build the kind of country that is in the best interest of middle-class families but also is in the best interest of the longer-term stability of our country. That there is an opportunity for us to use this new foundation that we have laid, after recovering from the crisis over the last six years, to really build this country in the direction of making it more fair and more free, and creating more opportunity for everybody who lives here. And I think that really is the core of the President’s vision and I think that reflects a vision that I think the vast majority of Democrats out there can agree with.

The truth is, I think that there are a lot of reasons that Republicans can find to agree with that as well. The question is, will they put politics aside and actually try to work to try to find common ground with this administration to do that, or will they not -- which has been consistent with their pattern in the last six years. But hope does spring eternal around here.

MR. FURMAN: In answer to your second question, Treasury and the IRS are responsible for administering the tax system, so you should ask them that question in terms of specific regulations. In terms of our budget proposal, we’re asking Congress to change the law so that income that is essentially like any other form of income, but earned in certain activities, gets taxed as such. And that’s a common-sense idea.

Q The President wants carried interest to be taxed as ordinary income, which is in this budget and has been in past budgets, and his Treasury Department and IRS are able to make policy to do that. I guess the question is, why not just do it?

MR. FURMAN: I think you should ask Treasury and IRS what their authorities and plans are in this area, because this is –- they’re responsible for implementing the tax laws that Congress passes.

MR. EARNEST: Yes, this gentleman right here in the back.

Q Hi. Steve Stromberg with the Washington Post Editorial Board.

MR. EARNEST: Hi, Steve.

Q Instead of relying on corporate repatriation to fund infrastructure, why not just raise the gas tax?

MR. ZIENTS: The President has not proposed and has no plans to propose an increase in the gas tax. The plan that we’ve described here -- using dollars from overseas, bringing them back to the U.S., and raising money in order to fund a long-term, six-year reauthorization at a level that’s close to 40 percent higher than current spend -- we think is the right plan. It’s got a lot of traction. That said, the President is open to other proposals and would consider other proposals that Congress contemplates.

MR. EARNEST: Bill.

Q Just a quick two-part. Cecilia, I was interested in what the pay-for is for the two free years of community college, if you might. And also, Jeff, just kind of following up on that question, how real is this infrastructure plan? And aren’t you, in effect, raising taxes on American businesses, which seems to be a non-starter with this Republican Congress? And then, secondly, expecting them to believe that once you raise taxes once, it’s just a one-year only and it won’t become a permanent thing.

MS. MUÑOZ: So I’ll start. The revenue raisers that we’ve described in the course of the tax reforms that we laid out a couple weeks ago are more than enough to cover the community college program as well as the other elements of the budget that I described.

MR. ZIENTS: Sorry, repeat the first part of your question.

Q So the first part is, so you’re (inaudible) this infrastructure -- bringing the money back from American corporations. How real is it to expect this Congress to basically raise taxes on American businesses or ask them to pay a tax they’re not paying now? And then, secondly, to believe that this is a one-time only tax?

MR. ZIENTS: Well, it’s part of, as I mentioned earlier, a comprehensive approach to business tax reform. And a very important component of that is to make sure that this is also good for middle-class families, infrastructure investment being central to that.

The long-term plan here is revenue neutrality, so no additional money from corporate or business taxes. That said, there is this one-time opportunity, because of the $2 trillion that are overseas, that would be taxed here at a much lower rate -- 14 percent -- and that raises the money to do the six-year reauthorization at a much higher level than our current spend. So it’s long-term revenue neutral, but this one-time opportunity to tax the $2 trillion, which has not been taxed, which is overseas, at 14 percent.

MR. FURMAN: Could I just add one thing to that? Because I think there’s been some confusion about the relationship between this proposal and something that would be completely different and, in many ways, the opposite of this proposal, which is a repatriation holiday. And I think in the course of explaining that difference, it also helps answer your question.

The proposal the President is making would be mandatory on all overseas earnings as opposed to an election that could be made. As a result, it raises money -- $270 billion over 10 years -- as opposed to a repatriation holiday would lose money. And then the third that I think gets at your question, this is part of a plan to reform the tax system. So on a going-forward basis, you would have a 19 percent minimum tax on all the earnings of foreign subsidiaries of U.S. corporations. And because it’s part of a plan that deals with the earnings that have been incurred in the past and the earnings in the future, it becomes a stable system as opposed to a one-time measure that then raises a question about how you’re going to deal with it again in the future.

MR. EARNEST: And just on the politics of this, the other thing that occurs to me is that when the President was running for this office in 2007 and 2008, he was strongly advocating raising taxes on the wealthiest Americans -– something that Republicans said was dead on arrival, that they would never approve of. But in 2012, shortly after he was reelected, and which he campaigned on this issue again, he did actually succeed in getting a Republican majority in the House of Representatives to eventually vote for a tax increase on the wealthiest Americans. So the point is, just because they’re against it now doesn’t mean they’ll be against it in the end.

MR. ZIENTS: Well, and to that end, the framework, as I’ve mentioned a couple times, that the President has, of lowering the statutory rate, creating this minimum tax that Jason just described and bringing the money back from overseas with the one-time toll charge, using that money for infrastructure -- all four components are the same as Chairman Camp’s plan from last year, the Republican House Ways and Means plan.

MR. EARNEST: Major.

Q Three quick items. How do you achieve your mandatory savings that you’re projecting over 10 years? What is the baseline VA number for this year, and how do you project VA spending to have to increase going forward? And what’s your disposition of overseas contingency operations funding?

DIRECTOR DONOVAN: So on the mandatory side, we discussed a little bit earlier there’s about $400 billion in savings on Medicare and Medicaid. In addition to that -- so those are not the only mandatory savings in the budget, so I want to be clear. There’s program integrity savings that we would achieve, for example, at IRS. Because we're under-investing in IRS capacity, we're actually losing out on tax collections to the tune of tens of billions of dollars. So it’s about $60 billion of mandatory savings we’d get if we invested more in collection and enforcement at IRS. That's one example.

Crop insurance is another area where we think we can improve the system, encourage farmers to actually be planting more, lower the excess profits of insurance companies. So there’s are a range of other -- my point is there are a range of other mandatory savers in this, not just on the health side.

But on the health side, there are a range of them. Jason has I think pretty great expertise here that include reforms on the provider side that accelerate the kind of savings measures that we’ve seen in areas where we think there are not current incentives to save. And that's things like home health care aids and a range of other ways that we -- the payment arrangements we have with providers. There are also some -- about 20 percent of the savings, which focus on ensuring that particularly the highest income beneficiaries are paying their fair share.

And there are also then things like controlling drug costs; other things that right now are leading to -- even though health care costs are growing much more slowly than they have historically, we still have areas where costs are growing quickly, like particularly some of these designer, new prescription drugs that we think could be brought under the umbrella of cost-saving proposals that have worked in other areas of Medicare and Medicaid.

How did I do, Jason?

MR. FURMAN: Yes, I thought that was fine. If you have your budget, pages 105 to 119 have 15 pages with dozens and dozens and dozens of mandatory proposals that, on net, save money -- of which Shaun hit the highlights. I thought you had two others. But they seem like numbers we could get you afterwards.

MR. EARNEST: VA and OCO.

DIRECTOR DONOVAN: So OCO, I mentioned earlier, is down about $130 billion since the President came into office. It declines another $11 billion under our proposal. And on VA, I don't have the precise number in front of me, but it is a substantial increase for veterans health care, I think in the range of 7 percent. But let me get you a specific number.

MR. EARNEST: Major, we’ll follow up with you on that.

Lesley.

Q Thanks. Josh, you mentioned that you said that you had -- first time you had thought about the budget in a 2016 context. I wanted to ask you a little bit about that, because isn’t this something that you're hoping that Democrats will seize this sort of mission of helping the middle class? And also if I could ask Mr. Donovan to expand a little bit on the idea why you targeted crop insurance and the savings from that -- because it’s not playing well in Kansas.

MR. EARNEST: (Laughter.) To allude to a famous book. In terms of 2016, one reason is that we’ll have a fiscal year 2017 budget that will be out in early 2016 too. So I guess that would be one reason. The second reason is, we certainly do hope that Democrats and Republicans will seize on the ideas that are included in this budget, but not for political end, but to actually get something done in Congress that would benefit middle-class families. That’s what our aim is. And that’s why maybe I should have thought about it more in a 2016 context, but hadn’t, because our principal goals here are around bipartisanship and around actually trying to get action on Capitol Hill on this and not just a talking point.

DIRECTOR DONOVAN: So maybe to go back to Josh’s earlier point, if you look at the broad scope of proposals that we have in the budget and recognize the fact that we have roughly 100 different cuts, consolidations, reforms, two significant programs, I'm sure that there will be places in the country and, as Josh said, things that Democrats and Republicans alike will find that they may not totally agree with. But we have in past years proposed reforms to crop insurance, as well.

Specifically here what you find is there are places where, for example, by the way that we structure these insurance programs, we actually encourage farmers not to plant on their land, for example. We also have other places where we encourage or we subsidize farmers in farming techniques that actually are less sustainable for the land that they’re working. And so we think that these are smart reforms that both maintain the basic protection of farmers for real emergencies that happen, but don’t actually encourage them not to plant when they could, or encourage them to follow practices that are actually not good for the very land that they depend on.

MR. EARNEST: Julie.

Q Hi, thanks. I wanted to ask about the debt again. I know you’ve said that there are some mandatory savings in this that would help with the sustainability of Social Security and Medicare in the long run. But you started out by saying that now with economic growth, and things starting to move again, this budget was an opportunity for the President to really say what he thought should happen. And I wonder why a lot of people are saying this is a missed opportunity. He didn’t choose to -- rather than shave a little bit off a very fast growth -- projected growth of entitlements over the next decade, he didn’t choose to really tackle them. Is it just too politically difficult to do that?

DIRECTOR DONOVAN: Let me just, I guess, disagree with the fundamental premise. When the President came into office, he recognized what I think a broad group on a bipartisan basis recognize is the single most important contributor to the long-run growth in the cost of our entitlements, which was the spiraling cost of health care. And, in fact, what we’ve achieved since he came into office, in part because of the recession we inherited, but also because of structural reforms in our system, have now substantially lowered the long-term cost of entitlements.

I’ll go back to the point I made. Just in the year 2020, you’re talking about almost $200 billion of savings in Medicare and Medicaid. And if you look at the projections in the budget this year long run, you see substantially lower costs far out into the future for these programs than we had when the President came into office.

And the fact that we’re adopting not just the $400 billion in Medicare and Medicaid savings that we discussed in the budget, we’re also adopting a bipartisan proposal on the doc fix, on SGR reform, which incorporates additional delivery system reforms that will lower the cost of health care in the future, and a range of other things that we’re doing beyond just the Medicare and Medicaid investments, on precision medicine, and a whole range of other areas. I think we have a very strong argument that the President has been focused on since the beginning, on the key drivers of our long-term entitlements. And he continues to be focused with some real momentum behind us in lower health care costs.

I also think -- and this has been I think lost a little bit in the sort of political back and forth around immigration -- in addition to health care costs, the single most important thing that we can pay attention to is that we have a demographic imbalance in our country. We have a growing number of retirees for the number of workers that we have in the country. And therefore, immigration reform is fundamentally something that alters the balance on our entitlements in a way that very few other things do, because it grows the number of workers that we have per retiree. And that's why the contributions to the solvency of the Social Security Trust Fund, on Medicare and Medicaid -- all of those are enormous out-year benefits that should not be ignored in this debate.

MR. FURMAN: Can I just add just a tiny bit economically. In 2008, in the transition with Larry Summers, Tim Geithner, Christy Romer, Peter Orszag, the whole original economic team was trying to figure out what the right fiscal goal was going to be. And economically, the decision was the right fiscal goal was to make sure the debt was falling as a share of the economy, which would require the deficit being below about 3 percent of GDP. That's a goal we achieved in 2014. That's a goal we need to take additional steps on taxes, on health care and on immigration in order to make sure we continue to meet that goal over the next decade and beyond. But it’s one that's very consistent with what economics would tell you you need to do to be in a sustainable and strong position to grow economically.

MR. EARNEST: Let me just add to that, that the 3 percent target was also the one advocated by the minor deities that served on the Simpson-Bowles Commission. So it’s worth pointing out that while that certainly included the wisdom of the Obama economic team -- (laughter) -- it also included the stamp of approval from that bipartisan commission.

Two other points I think that are also relevant to this. The first is that the President has also been clear about the fact that his approach to dealing with our debt and deficit is that we're not going to ask the elderly and working families to bear the brunt of balancing our deficits and improving our fiscal situation; that there are a variety of steps that we can take that reflects a balanced approach, and that's one that the President is committed to.

The last thing is that -- I’m going to sort of speak like an economist, so correct me if I’m wrong, that one of the most important things we can do to deal with our debts and deficits is to ensure we have a strong, dynamic, growing economy. And we're not going to have a strong, dynamic growing economy if we're going to chip away at the kinds of investments that we know are critical to the success of middle-class families.

So making the kinds of investments that we know are going to be good for a dynamic, growing economy are also going to be good for debt and deficit reduction down the line.

Did I get that right? Would I at least get a pass in the Furman economic coursework?

MR. FURMAN: Yes, absolutely. (Laughter.) A-plus.

MR. EARNEST: Okay, good. Dave.

Q Thanks, Josh. And forgive me if this was already asked and answered, but the budget proposes to cut the Veterans Choice Card program and take some of that money and move it elsewhere in the VA system. Can you explain that? Is the Choice Card program not as needed as it was just last year?

DIRECTOR DONOVAN: So there is not a proposal to cut it. I think that's a mischaracterization. As we were looking at the projections for the VA going forward, recognize that this Choice program is a brand new program. And for those not involved in the details, the Choice program was set up by legislation that gave certain veterans who either had been waiting a certain period of time or lived a geographic distance farther away from VA facilities the ability to get a Veterans Choice Card and seek medical care outside the VA system. As we were putting together projections for the budget, you can imagine that it’s quite uncertain how many veterans will ultimately exercise that choice and use that program.

And so what we’ve done in the budget is propose flexibility that would allow the VA to draw from some of the $10 billion that was set aside for that program if needed, if it is not fully utilized, and in case, for example, more veterans than we expect seek health care within the VA system.

And so what we were trying to deal with is to give some flexibility in those resources to deal with some of the uncertainty that we have, given that this is a new program and we’re not sure how many veterans would choose either to remain within the VA system or to seek health care using their Choice Cards. And that was the idea. It was not a cut in that sense.

MR. EARNEST: This gentleman over here.

Q On the original point of this being a document from which negotiations can take place, on the matter of financing of infrastructure, is the mandatory requirement one of those potential negotiating points? As you may know, there's a bipartisan bill that’s coming together in Congress that may not include that aspect of it.

MR. ZIENTS: As Jason said earlier, and he should feel free to add here, we are not supportive of a voluntary repatriation holiday. That’s bad policy. It costs a lot of money. What the President is proposing is to reform what is a broken system and to fund infrastructure with the one-time revenue.

DIRECTOR DONOVAN: Just to be specific about that, what the voluntary repatriation does is actually encourage profits to be held overseas going forward, and therefore it ends up being scored as costing a lot of money, as Jeff said, rather than actually saving money.

MR. EARNEST: Alexis, I’m going to give you the last one. The President is getting ready to do his event over in the East Room.

Q Two quick ones. One for you, Josh, and one for Shaun. Josh, since we have you here today, can you describe the President’s thinking about arming Ukraine? And, Shaun, for you, Republicans are very interested in an old idea, dynamic scoring. And I wanted to ask you what kind of challenges that presents to the administration going forward as Republicans create their budget proposals and try to calculate the dynamic elements of features of their budget.

MR. EARNEST: Well, Alexis, I think I read the same story that you did, which may be prompting your question. There are a lot of people who apparently, through one way or another, are making their views known on this policy area. I can tell you that the President’s view continues to be that this administration needs to be continually assessing what our strategy is to further isolate the Putin regime in Russia to convince them to reevaluate their strategy in Ukraine.

And the strategy that we have implemented so far has succeeded in uniting the international community around this principle of respecting the territorial integrity and sovereignty of other countries. It has also succeeded in enforcing a sanctions regime against the Russian economy that has succeeded in devaluing their currency, causing many independent debt evaluators to downgrade the credit worthiness of Russian securities. It has caused longer-term projections about their economy to be revised downward and into negative territory. And so just about any measure that you consider, the Russian economy has taken a big hit because of the strategic decisions that President Putin has made as it relates to Ukraine.

So that pressure is only continuing to intensify, and it has served to isolate them. But it has not, as we’ve acknowledged, caused him at this point to live up to the kinds of diplomatic commitments that he’s previously made to deescalate the situation in Ukraine.

So, for that reason, we’re continually assessing what sort of options are available, but I certainly don’t have anything new to announce at this point. And there are, of course, a wide variety of opinions about this, but when we have anything to announce on this we’ll let you know.

DIRECTOR DONOVAN: And just on dynamic scoring, to be clear, the current CBO practice, which we support, is to do a range of what we would call supplementary analyses. And that includes using some of these dynamic models to look at what the potential range of effects could be on macroeconomic factors so that policymakers can understand and think about those.

The fundamental problem of taking what are right now kind of speculative and broad-ranging analyses that are not used for budget scoring is that the range of uncertainty in doing these is vast, from the point of -- certain kinds of tax changes might actually grow the economy, they might actually shrink them. And so the problem is -- and this has been the longtime practice of CBO directors for decades -- is highly speculative and uncertain kinds of effects like that, to take them in as score-able savings or costs on any significant bill really degrades the ability of policymakers to understand and to do accurate budgeting.

And this is not something that in the past has been partisan. There’s been agreement that looking at this information is helpful, but to actually use it for scoring is highly problematic in terms of being able to really get to precise understanding of what budgeting looks like going forward.

MR. EARNEST: Thanks, everybody, for sitting through all of this. If you have additional questions certainly folks in lower press and in the OMB press office will be available to answer your detailed questions. Thank you.

END
2:06 P.M EST

The White House

Office of the Press Secretary

For Immediate Release

January 30, 2015

Press Briefing by Press Secretary Josh Earnest, 1/30/2015

James S. Brady Press Briefing Room

12:55 P.M. EST

MR. EARNEST: Good afternoon, everybody. TGIF. It’s nice to see all of you. I don’t actually have any announcements at the beginning, so we can go ahead and go straight to questions.

Q Okay, I’d like to start by asking a couple questions about the Islamic State hostage situation. First of all, do you have any update on the fate of the Japanese journalist or the Jordanian pilot?

MR. EARNEST: I don’t have any updates, Nedra, but I would encourage you to check with either the Jordanian government or the Japanese government who could give you an update on their efforts to secure the release of their citizens.

Q Because some people in Jordan have been expressing the opinion that this pilot is paying the price for a war that they shouldn’t be involved in. Is the President at all concerned that this could reduce public opinion within the Arab world or the U.S.-Arab coalition?

MR. EARNEST: Well, Nedra, I think the reason that we have had tremendous success in building a coalition of more than 60 nations to take the fight to ISIL and execute the President’s strategy of degrading and ultimately destroying ISIL, is that nations around the world reflect the risk that ISIL poses to nations in the region. And particularly, a nation like Jordan understands the risk that they face from extremists. And there are ambitions that have been articulated by ISIL to expand their footprint. And that is why it was so important for countries from around the world to come together to face down this threat.

And as the President was building this coalition, there was some doubt expressed about how much success he would have in enlisting the support of other Arab nations in this fight. And we are pleased that nations like Jordan, like Saudi Arabia, like the UAE aren’t just ready to stand with the United States in this endeavor to counteract, degrade, and ultimately destroy ISIL, they’re actually joining the fight. And we do see members of the military -- from Jordan, the UAE, and Saudi Arabia and others -- who are flying alongside American pilots, carrying out strikes against ISIL. And that, I do think, sends a clear signal to our enemies and to the world that the world is united to face down this threat.

Q On another topic -- did the President have any reaction to his former opponent Mitt Romney’s decision not to seek the presidency again?

MR. EARNEST: I did not have an opportunity to speak to the President since Governor Romney made his announcement. But certainly Governor Romney is a man of great faith and a man who has tremendous loyalty and commitment to his country, and that is something that is worthy of our respect. I confident that the announcement that he made today was a difficult one; I think he acknowledged as much. But it’s also an intensely personal decision that candidates and their families make.

The other thing that I’ll say is he did say in recent days that he hoped that we could have more robust debate in this country about what we could do to put in place policies that benefit middle-class families; that he was articulating a concern that he had that we’ve seen those at the top benefit quite a bit from our economic recovery, but not as much benefit being directed to middle-class families. And that obviously is a sentiment that the President himself has shared.

So I’m confident that Governor Romney will be someone whose endorsement will be sought by other Republican candidates. And I’m hopeful that Governor Romney will use that influence to try to elevate the debate and have more attention and focus on policies that actually benefit middle-class families. And surely we’re going to have disagreements about the best way to do that. But if that can be at least be our starting point, I think we would feel like we’ve made some progress.

Q In his remarks last night, the President seemed to relish a debate over poverty in the United States with Romney. Is that the case? Or do you think maybe he’d be disappointed not to be able to have that debate now?

MR. EARNEST: No, I don’t think the President is disappointed. Thank you, Nedra.
Jeff.

Q Following up on that, he seemed, the President, last night to be tweaking the Governor a little bit without naming him by name. Was that his intention?

MR. EARNEST: No. Again, I think that his intent was to note that we are seeing more rhetoric from Republicans indicating what was a previously unstated concern for people who aren’t at the top. And the President certainly welcomes their interest in these issues. And as I mentioned, I think Governor Romney is genuine when he’s articulating that concern. The problem is -- and this is something that we’ve seen too often from the Republican side -- that they’ve essentially used the middle class as a talking point and not actually put forward policies that benefit the middle class.

So again, to the extent that Governor Romney can use his influence to try to change the fundamentals of this debate in a way that will actually focus on what we can do to benefit the middle class, and those who aren’t in the top 1 percent -- which is where so many of the Republican policies seem to be aimed -- then that would be a really good thing. And it certainly would be a way for Governor Romney -- although he has indicated that he’s not going to be a candidate -- a way that he could substantially contribute to this debate.

Q And on a couple of other topics. Russia’s Central Bank cut its interest rate today in reaction to the possibility of a recession in the country. You’ve talked a lot about the effectiveness of sanctions. Do you have any reaction to that? And can you give us any update on potentially more sanctions coming down the road?

MR. EARNEST: Well, Jeff, I won’t comment extensively on the actions that were taken by another central bank. But I can say as a general matter that I also noticed that, within the last week or so, the Central Bank had actually raised interest rates dramatically to try to protect the value of their own currency.

I think what this illustrates is, it illustrates that there is an element of chaos in the Russian economy, and some of that is a result of the international sanctions regime that this President has led the implementation of. And that is an indication that there are specific and clear economic costs associated with President Putin’s expedition into eastern Ukraine; that continuing to violate the territorial integrity of one of their neighbors is having an economic impact -- a negative one -- on Russia.

And as the days go by, and as Russia continues to refuse to live up to previous commitments that they have made to deescalate this conflict, those costs are only going to intensify. And we’re hopeful that as these costs mount, that it will prompt the President, President Putin, to reevaluate his strategy.

Q Peace talks over Ukraine have also stopped before they began because of additional deaths of civilians there. Is the White House watching that? Do you have any specific reaction to those deaths?

MR. EARNEST: We are continuing to monitor the situation in Ukraine, and we have seen repeatedly that the Russians have been unwilling to live up to their agreements, and that a lot of these deaths of civilians are the result of military actions that are taken by separatists that are supported and armed by the Russian military. And that is an indication that we need to change the cycle. And we are hopeful that as the international community continues to show their resolve, and as the costs continue to pile up on the Russian economy, that President Putin will ultimately change course.

Q And finally, the Greek government is having meetings this week. The White House released a readout the other day of the President’s discussion with the Prime Minister. What’s the White House’s reaction to the new government’s statement today that it will not cooperate with the IMF and European lenders about extending its aid package?

MR. EARNEST: Well, Jeff, I don’t have a specific reaction to that announcement. I call tell you that, in general, the President telephoned Prime Minister Tsipras earlier this week, because the United States for a number of years now has been working closely with the EU and the Greeks to try to resolve so much of the financial and fiscal instability that we see over in Europe. And that does have implications and an impact on the U.S. economy and on the global economy, of course.

So we’re going to continue to work closely with the EU, and that means engaging with the new political leaders in Greece to try to resolve these differences and get Greece and Europe and the global economy back on a path toward growth and prosperity, because that, ultimately, is going to be in the best interest of the U.S. economy.
Justin.

Q First I wanted to ask about GDP. It came in a little lower than expectations today. I know the President has spoken a lot recently about how kind of promising economic signs are the reason that with this budget we can invest more in sort of all his priorities. Is there any concern that some of the international factors that are dragging on now the U.S. economy are going to undermine the President’s efforts to sort of make that argument?

MR. EARNEST: Justin, I’ll tell you that that may end up being true, but I don’t think the GDP numbers that were released today are much evidence of that. The fact is, this is one snapshot. And as you’ve heard me say for years up here now, we don’t get too excited about one great economic report, or too disappointed by one that doesn’t meet expectations. The fact is, what we’re looking at are the longer trends. And even if you look at the more recent trends, just in the last six months of 2014, the economy grew at a rate of 4 percent. And that is certainly a pretty robust rate of growth, and that’s momentum that we want to build on. And that’s why so many of the policies that the President laid out in the State of the Union would try to capitalize on that momentum.

At the same time, we have said -- and this is what I tried to acknowledge at the beginning of my answer to your question -- is that there are consequences for a slowdown in the international economy on the U.S. economy. And we do continue to be concerned about some of those things. Jason Furman appeared in the briefing with me about a little over a month ago now, and talked about some of the potential impacts from the slowing global economy. And certainly, our work with the Europeans that Jeff asked about, is evidence of our ongoing efforts to work with the international community to strengthen the economy around the globe because that’s going to have important benefits for the U.S. economy here at home.

Q And last night in Philadelphia, it sounded like there was a lively exchange on trade between the President and House Democrats. And I know that the President promised to loop them in more as these trade deals are being developed, and kind of made his argument for why they were important. So I’m wondering after that discussion if you guys feel as if you’ve got the 50 or so House Democrats that you need for Trade Promotion Authority.

MR. EARNEST: Well, the President wasn’t there to count votes last night. The President was there to have a conversation about his strategy when it comes to these conversations about opening up markets for American exports. And the President did lay out a pretty compelling case; it’s not that different than the case you heard him make in the State of the Union.

So this is a process. We’re going to continue to have a conversation with Democrats and Republicans, both supporters of these kinds of trade agreements and some people who have indicated an opposition to them. The President does have a strong case to make about how an agreement that he will sign will only be an agreement that is in the best interest of American middle-class families and in the best interest of American businesses. And that will sort of be the guidepost as we pursue this agreement with a range of other countries in the Asia Pacific.

And we’ll make our case to Democrats and Republicans alike along those lines. I will say that the President over the course of the last six years, based on the success that his policies have had in strengthening our economy after the worst economic downturn since the Great Depression, should give those who are concerned about the middle class some confidence that the President knows what he’s talking about when he says he’s going to go out and stand up for middle-class families.

Q Even if he wasn’t counting votes, did the President come away from that feeling as if there was enough Democratic support?

MR. EARNEST: Well, I’ll say that the President came away with the impression that people were focused on this issue, and I do think that he came away with the impression that he got a fair hearing from the Democrats who were in attendance. I do not anticipate that every single Democrat is going to end up voting for this thing, but I do think that as long as people give the President an opportunity to present the facts and to ask legitimate questions about the details of the agreement, then we’re going to -- then I think we’re going to have an opportunity to continue to make our case and I think we’re going to win some support as a result.

Mr. Viqueira.

Q Thank you. I’ll take you to the Middle East. Israel has announced --

MR. EARNEST: I was there earlier this week, but we can go back if you’d like. (Laughter.)

Q Israel has announced plans to build 450 units on the West Bank. The chief Palestinian negotiator has said that this is a result of impunity granted to Israel, a reference to the speech that the Speaker has invited the Prime Minister to make here. What is your reaction to the announcement by Israel?

MR. EARNEST: Well, Mike, we’ve, on a number of occasions, had the opportunity to make clear our position on settlement activity. Our position is that we believe that settlements are illegitimate and counterproductive to achieving a two-state outcome. We have deep concerns about these highly contentious settlement construction announcements. They will have detrimental impacts on the ground, inflame already-heightened tensions with the Palestinians, and further isolate the Israelis internationally. The United States, as a close ally of Israel, works -- uses our diplomatic influence around the globe to try to build support for Israel, and an announcement like this only serves to further isolate them.

I can tell you that issuing tenders like this does nothing to bolster Israel’s security. It does not increase its prosperity and it does not further the cause for peace; in fact, it does precisely the opposite.

Q Do you suspect a political motive on the part of the Prime Minister, coming so soon before the elections, which you’ve alluded to?

MR. EARNEST: It’s unclear to me exactly what their motive is. But what is clear is that this, in our view, would only undermine the ability of the Israelis to build support internationally and to ultimately secure the kind of peace agreement with a two-state outcome that we believe is clearly in the best interest of Israel’s national security.

Kristen.

Q Josh, thank you. Can you comment on the reports that one of the five Taliban fighters who was traded last year for Bowe Bergdahl has reached out to try to make contact with the Taliban? What can you tell us about that?

MR. EARNEST: Well, I can tell you there are a couple of facts that are important that should be reflected in the reporting. The first is, is that none of these individuals has returned to the battlefield. None of them is allowed to travel outside of Qatar, and none has engaged in physical violence. In fact, each of them at this moment is still in Qatar, and each of them is subject to monitoring and other mitigation measures that limit their activities.

I can also tell you that we are regularly in touch with the Qataris about those mitigation efforts. And in light of the concerns that you have raised, I can tell you that those mitigation efforts and those monitoring efforts have been updated to reflect those concerns. But I can tell you, because of the cooperation we’ve gotten from the Qataris and because of the conversations that they’ve had with our national security team here in the administration, that we continue to have confidence that there are measures in place to substantially mitigate the threat that they pose to American national security.

Q Can you be specific? What do you mean by “updated”? Mitigation efforts have been updated?

MR. EARNEST: Unfortunately, I’m not in a position I think for some -- for a variety of reasons, some of which are obvious, I’m not in a position to detail the mitigation efforts that are in place.

Q And I know that you’re making the point that this individual hasn’t returned to the battlefield, but doesn’t it suggest that releasing these prisoners could potentially pose a threat to the United States?

MR. EARNEST: Well, Kristen, you’ll recall that when this transfer from Guantanamo Bay -- from the prison at Guantanamo Bay to Qatar, that the Secretary of Defense had independently certified that there were sufficient mitigation measures in place to substantially mitigate the threat that they posed to American national security. And Secretary Hagel certified as such last summer.

Now, the success of those mitigation measures depends on the cooperation of the Qatari government, and I’m pleased to report to you that we’ve gotten good cooperation and there is good coordination between the United States and the Qatari government about these measures that need to be implemented. And the fact that we are updating them to reflect some of these concerns I think is evidence that we have a system in place that is protecting American national security right now.

Q And the fact that this contact happened in the first place -- will it make the administration, has it made the administration re-think the effort to essentially close Guantanamo, to step up its release of some of these prisoners?

MR. EARNEST: No, it does not, and simply because keeping the prison open undermines our national security. That is the view of the President of the United States. It’s been his view since he campaigned for this office in the first place. It actually was the view of the previous administration, who also advocated for the closing of the prison at Guantanamo Bay.

The fact is, the prison at Guantanamo Bay only serves as a recruitment tool for terrorists. It drains our resources. As the President mentioned in the State of the Union address, we spend $3 million a year per prisoner to keep them locked up at the prison at Guantanamo Bay. That certainly is not a good use of our resources. And the opening of that prison -- or the prison’s continued operation has only served to damage our relationships with countries around the world, countries we rely on to protect our national security.

So the President believes that it is an easy call that we need to close the prison at Guantanamo Bay. And as we transfer prisoners from the prison, we need to make sure that we have measures in place to mitigate the risk that those individuals pose to the United States. And in the case of these five individuals, that’s exactly what we have.

Q And just to put a fine point on it, you can say with confidence that this individual right now does not continue to pose a threat to the United States?

MR. EARNEST: Well, what I can say with confidence is this individual has not returned to the battlefield. This individual is not allowed to travel outside Qatar. And this individual has not engaged in any physical violence. In fact, this individual is still in Qatar right now, and is subject to monitoring measures that mitigate the threat that this individual poses to the United States of America.

Q And I want to ask you about something here at home. There’s a lot of concern, particularly among the CDC officials, about this recent spread of measles. It’s now impacting people in 14 different states. There’s been concern, as we get closer to the Super Bowl. How concerned is the White House? How closely is the President being informed by the CDC?

MR. EARNEST: Well, the CDC is obviously monitoring this very closely, and we have our public health experts across the country who are taking a careful look at this. I mean, I think what those experts would tell you is that their recommendation is that if you’re sick, we recommend that you don’t get on an airplane and you don’t go to crowded locations. And that’s true of the flu and other illnesses as well.

But this obviously is an illness that’s a little bit more potent than the flu, and it’s certainly attracted the attention of our public health professionals both here in the federal government but also in states and communities all across the country. And it’s something we’re going to continue to closely monitor.

Q And obviously it has revived the debate over vaccines. Does the President, does the White House have a message about that and who will be getting vaccinated?

MR. EARNEST: Well, the President certainly believes that these kinds of decisions are decisions that should be made by parents, because ultimately when we’re talking about vaccinations, we’re typically talking about vaccinations that are given to children. But the science on this, as our public health professionals I’m sure would be happy to tell you, the science on this is really clear.

Q That people should get vaccinated?

MR. EARNEST: That’s certainly what the science indicates, and that’s obviously what our public health professionals recommend. And being guided by the science in matters like this is typically the right approach.
Kevin.

Q Josh, thanks. An interesting question posed by Politico today about lurching leftward from a policy perspective, perhaps budgetary perspective. Is that a fair characterization of how the President is now leading? Is there still an opportunity for a grand bargaining or centrist policies moving forward?

MR. EARNEST: Well, Kevin, I think what I would say is that the President is driving towards the middle, not on the ideological spectrum, but driving toward the middle class. And that has exactly been the focal point of his domestic policymaking agenda since he took office. But I think it’s fair to say that he’s doubling down on that effort, and that was what was included in his State of the Union address.

And when the President rolls out his budget on Monday, you’ll see that we’re going to have an orientation in that budget where we make clear that our priority is middle-class families. And the reason for that is simply that when our economy is growing from the middle out, we know that our economy is on its strongest footing. And the President believes that there’s a lot more that we can do to support middle-class families. And I don’t know if -- if supporting middle-class families means that you’re more oriented to the progressive end of the ideological spectrum, so be it. But that certainly -- what the President is focused on is the middle class.

Q I want to switch gears for just a second and ask you about immigration. I know a great deal has been talked about with respect to the people that are already here. I’m curious about policy moving forward for those who would like to work here and be here for longer periods. There are thousands, if not more, Canadians, for example, that come here, they do good jobs, and then they have to go back because it’s a time limitation. Is there any thought to sort of expanding that opportunity as you continue to unpack immigration reform?

MR. EARNEST: Well, Kevin, this is one of the tragedies of the House Republicans’ decision not to even consider a vote on the bipartisan legislation that passed through the Senate early in 2013. That legislation included a wide variety of things, but one of the important things it included were reform of our legal immigration system, that there should be some things that we can do to better attract talent from all across the world and entrepreneurs from all across the world to make it easier for them to come to the United States. And if they want to open a business and create jobs here in America, they should be able to have a clear path to do so.

And right now, our system doesn’t operate as efficiently as we would like, and it certainly doesn’t optimize our ability to retain talent that has come to the United States. In some cases, we’re talking about individuals who left their home country to come to the United States to go to school and avail themselves of the most effective higher education system in the world.

But yet, when their education system is up and they’re ready to invent a new product or innovate in an exciting way, or open a new business, we tell them, sorry, you’re going to have to go back to your home country. The President doesn’t think that makes a lot of sense. Certainly the Chamber of Commerce and a number of other business-friendly organizations that don’t typically align themselves with the President agree with him, however, in this case, that it doesn’t make a lot of sense.

So that’s why the President has said that he was going to use all of the power at his disposal, using his executive authority, to try to fix as much of our broken immigration system as possible. But there is more work that needs to be done. And we stand ready to work closely with Democrats and Republicans on Capitol Hill who are eager to join that fight. And that fight should include reforms of our legal immigration system.

Q One more thing I wanted to ask you about. There’s a game coming on Sunday; perhaps you’ll be watching it. A lot of fans in Seattle and in the New England area want to know: Does the President have a team that he’s picking this year? Are you picking a team this year?

MR. EARNEST: Well, the President is always rooting for the Chicago Bears. And unfortunately, they’re not in the game yet again.

Q Again. (Laughter.)

MR. EARNEST: The President told House Democrats last night that he wasn’t going to choose sides in this particular contest, but he’s just hoping for a good game. I think I can say the same thing for myself.
Major.

Q Josh, the House Republicans have put together a working group to draft an alternative, they say, to the President’s Affordable Care Act, and doing so in anticipation of King v. Burwell before the Supreme Court. Two questions. Do you think there is anything premature about putting together a working group in anticipation of a Supreme Court decision that may strike down a key component of the Affordable Care Act? And in general, White House reaction to what has long been missing from the Republican argument about Obamacare, that is to say a full-blown legislative replacement?

MR. EARNEST: Well, I guess what I’d say, Major, is that they’re not premature, they’re about five years too late. We’ve been waiting for years for Republicans to actually engage constructively in putting forward a plan to reform our health care system. And that’s why the President had to drive so hard to get this across the finish line, because, again, he was obstructed at every turn by Republicans.

So the President has also said, since that success of passing health care reform that has expanded health insurance to millions more Americans, and actually limited the growth in health care cost to the lowest level in recorded history, that we welcome ideas from Republicans for actually improving the law. The fact of the matter is, they voted more than 50 times to actually try and eliminate the law. So it’s not really clear that either, A, Republicans are serious about putting forward their own plan, or, B, actually even serious about trying to reform our health care system in a way that’s actually good for small business owners and middle-class families.

Q Do you think there is anything to the idea that if King v. Burwell goes against the Affordable Care Act, the act itself becomes largely toothless in dealing with national health care?

MR. EARNEST: Well, Major, at this point we remain confident that the Supreme Court will take a close look at the arguments and conclude what so many other people have, which is that the common-sense reading of the legislation is that Congress always intended for individuals that are eligible to collect tax credits that make their health care more affordable, that they should be able to collect those tax credits regardless of who was operating their marketplace.

So we remain confident in that. And, frankly, what we found from Republicans who are raising those concerns, those are the same Republicans who voted against the Affordable Care Act in the first place. So it’s hard to take their concerns very seriously.

Q On Monday, Strobe Talbot, Michele Flournoy and several others will put forward a recommendation on administration policy in Ukraine. Among the things they’re going to suggest is that this administration provide military equipment to Ukraine because after many, many months of using economic sanctions, they will argue the Ukrainian government needs financial resources of a greater degree than so far provided, and the military means by which to make the continued use of Russian separatists too painful for Russia. Is this administration willing to give any consideration more seriously than it has to date to the concept of arming -- or providing arms to the Ukrainian government?

MR. EARNEST: Major, I don’t know that anybody here has had a chance to take a look at that report, so when it’s issued on Monday I’m sure we’ll take a close look at it.

I know that there are a couple of things that it sounds like we may have some agreement with their proposals, based on the way that you’ve described them. The first is that there is substantially more financial support that we can offer the Ukrainian government; that as a result of this instability in their country that’s been fomented and aided and abetted by the Russians, that they’ve sustained some pretty significant economic costs themselves. That’s why the President earlier this year called for Congress to act on a $1 billion loan guarantee to Ukraine. And consistent with some reforms that they put in place, we’d be in favor of even additional support beyond that, in the second half of this year. So we’ll see how that moves forward.

The second thing is, the President has been urging Congress to approve of some long overdue reforms at the IMF that would bolster the IMF’s ability to offer some financial assistance to the Ukrainians. So at least that element of the report, the way that you’ve described it, is consistent with our view that there is more that we can and should do to support the Ukrainians financially.

As it relates to military support, the President has been reluctant to do that, principally because in his mind --

Q Is he becoming more open to it?

MR. EARNEST: Well, I think at this point what I would say is, he continues to be reluctant -- because ultimately there’s not going to be a military solution to this problem. This is the kind of dispute that has to be resolved diplomatically. And what we need to do is we need to see the Russians actually abide by the commitments that they’ve already made at the negotiating table.

Q The arguments from Strobe Talbot and Michele Flournoy, as someone -- obviously the President is very familiar with both, is that that’s been tested; that there has to be a military price, and the Russians need to begin to feel it, and the Ukrainians need to have a sense they can defend themselves and not see civilian casualties and other destruction continue for there to be a different conclusion on the Russian side about the necessity of reaching the political accommodation you’ve just described. Does the President disagree with that fundamentally?

MR. EARNEST: Well, I think I’d look at their report before I pronounced a judgment on it one way or the other. I think it’s certainly a reasonable point of view. But the other part of this that we have to remember is that the longer that the sanctions remain in place, the worst the economic costs that Russia has to bear get. And I think that’s evidenced even by the Russian Central Bank today that they’re having to -- that they’re going to attempt to lower their interest rates just a few days after increasing them significantly. So there is an element of chaos in the Russian economy that’s only getting worse by the day.

So I think it is too early to say that the economic costs that Russia has to bear as a result of their incursions into Ukraine are not sufficient to get them to change their mind, and will not. They haven't been so far, obviously. But as those costs mount, there still is the possibility that it could prompt them to reevaluate their strategy in Ukraine.

Q Two quick questions on trade. Is 50 votes in the House, on the Democrat side, the White House benchmark? And what is it about this argument you think House Democrats who oppose this already, sight unseen, don’t get about the new global economy and what this trade deal might mean for the U.S.?

MR. EARNEST: I’m not ready to establish a benchmark in terms of the number of Democratic votes that we’d expect for this legislation.

Q Or that you’d seek.

MR. EARNEST: What we’d seek is a majority in the House of Representatives for the bill. And whether that’s all Republicans or a bunch of Republicans and a small number of Democrats is, frankly, not something that we’re particularly concerned about. We actually just want to see this piece of legislation pass.

On your second question about what it is that we will try to persuade reluctant Democrats, at least, about this matter is I think we’d try to persuade them about two facts. The first is, there is significant risk associated with not engaging in this region of the world; that if the United States were to stand back and say, we’re not going to enter into any sort of economic agreements with countries in the Asia Pacific, it only serves to create an opening for China to step in and start writing the rules of the road in a way that is certainly not advantageous to American businesses and certainly not advantageous to American workers. In fact, it would put Americans businesses and American workers at a significant disadvantage if China were to go in and start writing the rules of engagement with a bunch of other countries in the Asia Pacific.

That’s why the President believes it’s important for us to go into that situation and attempt to set a higher standard and to raise standards in a way that will level the playing field and create opportunities for American businesses to grow and thrive and open up access to markets in other countries. We’re talking about countries that have, combined, a large population and a lot of customers, a lot of potential customers. So there is an opportunity to be seized here, but there also is a cost associated with failing to seize it, and that is what is on the mind of the President.

And I think the second thing is -- and again, this is what I would expect to be an argument that’s pretty persuasive for a lot of Democrats in Congress -- when the President says he’s not going to sign an agreement that he doesn’t believe is clearly in the best interest of American middle-class families, he means it. And there is an interest that other countries obviously have in trying to strike an agreement with the United States. This is the most dynamic economy in the world, and it’s understandable that other countries would want to have more access to sell their goods here or to locate some of their businesses here.

So we’ve sort of got -- the carrot on the other end of the stick is making sure that this is an agreement that’s clearly in the best interest of American businesses and American middle-class families. And that is the criteria that the President will use to evaluate this agreement. And the President, as I mentioned, over the last six years or so, has put in place a whole host of policies that are clearly in the interest of middle-class families. So he’s got some credibility built up around these issues.

And again, I wouldn’t expect that argument to carry the day with every single Democrat in the House of Representatives, but I do think that the President deserves, and so far has gotten, a fair hearing. But this is a case that we’ll be making in the weeks ahead.
Jim.

Q Just to put a finer point on the measles vaccine issue. When you say that it’s the parents -- you prefaced your comments by saying that parents would have that decision. Are you supporting those who not for religious reasons, but because they have a special reason for it which may be based upon faulty science, are holding their kids back from getting vaccines? Does the President support that?

MR. EARNEST: Well, the President believes that everybody should be listening to our public health professionals. Our public health professionals are guided by the science. They’re the ones who are steeped in this knowledge, they’ve reviewed the studies, and then can offer the best advice to Americans about how they can best protect themselves and their kids from diseases like measles.

So I guess my point is, I’m not going to stand up here and dispense medical advice, but I am going to suggest that the President’s view is that people should evaluate this for themselves with a bias toward good science and toward the advice of our public health professionals who are trained to offer us exactly this kind of advice.

Q And as I understand the regulations now are, is that the federal rules are you have to get a vaccine to go to school, but if you have -- but there are exemptions, and the exemptions are for religious reasons and also if you have a special concern. Does that law need to be addressed? Does that mean we have to eliminate these special concerns, which are not based on science?

MR. EARNEST: I haven't heard any discussion about revising those rules, but this administration and our public health professionals rely on the best science available to give Americans the information that they need so that they can take the steps that are necessary to protect themselves and their families. And that’s what we believe is the most important rule for the government in this case.

Q And then just, in the State of the Union, the President said that it was time for Congress to begin to lift the embargo in Cuba. Do you believe that the legislation, which has been proposed by Senators Leahy -- in the Senate, Senators Leahy and Flake and Durbin, is what the President is talking about? It’s not talking asking for the embargo to be lifted, but for the travel restrictions to be lifted?

MR. EARNEST: I think it’s certainly a step in the right direction, and I think it reflects the kind of bipartisan support there is for the policy proposal -- or the policy change that the President has started to implement on his own and has called for Congress to follow up on. So we certainly welcome that piece of legislation, and hope it will get due consideration in both the House and the Senate.

Q And do you think in this Congress, that the second step, the lifting of the embargo, will come up?

MR. EARNEST: Well, it’s certainly possible. I know the President is not the only person to support the lifting of the embargo. There are Democrats and Republicans on both sides of the aisle who do support it, and the President will continue to advocate for it.
Annie.

Q You just mentioned earlier that you welcome Republican ideas to change Obamacare. And one of those that may have come up today with Obama’s push for medical research is supporting rescinding the medical device tax. And I’m curious if there’s been any movement on that at all, and particularly with this push that you guys are making.

MR. EARNEST: Well, I don’t think that there’s much of a connection between the medical device tax and the precision medicine announcement that the President made today. The announcement that the President made today related to precision medicine is part of a substantial investment that he believes is necessary in the kind of medical innovations that could serve to dramatically overhaul health care in this country in a way that would have tremendous benefits for the health and wellbeing of people all across the country.

The President is also supportive of those kinds of investments because they have important economic benefits as well. Right now it’s difficult to predict exactly what kind of businesses could sprout up around some of these innovations, but there is tremendous economic potential associated with a lot of this research.

And so, for both of those reasons, the President strongly believes that this is a worthwhile investment, and he’ll have more details about what that investment actually is in his budget.

Q Well, many of those companies, though -- many of the companies that come up with these innovations are pushing for the medical device tax to be rescinded for that very reason. And it will give them more time and more resources to put into research.

MR. EARNEST: Well, we certainly have indicated a willingness to have a conversation with Republicans about the medical device tax. I know some of them have expressed some concerns about it. And we’re certainly willing to have that conversation. But I don’t think there’s any reason why that medical device tax would in any way limit the kind of innovation that the President believes could revolutionize health care and has great economic potential for both those well-established health care companies, but also new companies that could emerge as a result of some of this new technology.

Q And then, just on the Super Bowl, I’m wondering if the President has any thoughts about either what the NFL has done on domestic violence or on the issue of concussions.

MR. EARNEST: Well, as I think has been covered in a lot of the reporting, this has been a challenging year for the NFL, and there are a range of important issues that I think even they’ve acknowledged that they need to address. And I haven't heard the President sort of evaluate the specific response of the NFL to some of these challenges, but certainly acknowledging that these challenges exist is an important first step, and there’s no question that the NFL has done that.
Jim.

Q Getting back to the President’s remarks last night, specifically when he referenced Governor Romney, the President did say that Governor Romney is a former presidential candidate on the other side, who suddenly is just deeply concerned about poverty. He was zinging Romney, was he not?

MR. EARNEST: Well, Jim, I think the President was observing a phenomenon that we’ve seen emerge from the mouths of many members of the Republican Party in the last few months; that all of a sudden, a party that has for years advocated policies that benefit those at the top, with the expectation that those benefits may trickle down to those in the middle, that all of a sudden, at least some Republicans seem to be changing their tune and indicating that they’re now actually all of a sudden interested in helping middle-class families. The President welcomes their interest, but is hopeful that their interest is a signal of actual policy proposals and not just a new set of talking points.

Q And how much does the President expect his message, the one that he delivered last night, the message that he’s trying to convey in this upcoming budget proposal, is picked up by Hillary Clinton or the Democratic Party heading into 2016? Is he trying to set the table for whoever may be running for that nomination in 2016?

MR. EARNEST: I mean, the short answer to the question is no. What the President is trying to do is he wants to set the table for some progress for the country over the course of the two remaining years of his presidency. And the President is hopeful that he can work with Congress to make some of that progress. The President is also the first to acknowledge that he may have to take some steps on his own to realize some of that progress, and he’s willing to do both.

That’s what the President is going to be focused on for the last two years, and there will be this other presidential campaign that’s going on. And I’m confident that there will be some people who are running for President who are going to be critical of some of the President’s proposals, and there will be some people who are running for President who will compliment the President for some of the proposals that he’s put forward. And the President is happy to be a part of that debate.

But ultimately, the debate that he’s going to have will be one that’s focused on the middle class and focused on how we can make progress for the middle class. The people who are part of that campaign will be making the case for the country about how they can make that progress, if they’re given the same kind of opportunity that this President has been given, to serve here in the White House.

Q And with Governor Romney making his decision today, they aren’t any thoughts here at the White House as to how soon perhaps Hillary Clinton or Joe Biden should be making some decisions on the future?

MR. EARNEST: They’ll make those decisions on their own timeframe.

Q Okay. And I want to get back to the Bowe Bergdahl swap. No regrets at this White House for that swap?

MR. EARNEST: Of course not, Jim. We’re talking about a principle that has a lot of precedent that this President is firmly committed to. As the Commander-in-Chief, it’s his responsibility that no man or woman who wears the uniform of the United States military is left behind. And that is a principle that the President is committed to upholding, in the same way that commanders-in-chief before him upheld that principle. And that, ultimately, is where this debate starts and stops for him.

Q And you said that none of these individuals have returned to the battlefield. Has the administration confirmed that?

MR. EARNEST: That’s correct.

Q And when was that confirmation made? Was that just made in recent days -- contacts made in recent days to confirm that?

MR. EARNEST: Jim, we are -- the national security team here is in regular touch with our counterparts in Qatar. And right now, these individuals are in Qatar and they are subjected to monitoring and mitigation measures that ensures that we’re limiting their activities and doing so in a way that protects the national security interest of the United States.

Q And the United States is doing that monitoring, is that correct? In conjunction with the allies there in the region?

MR. EARNEST: Well, Jim, we’re in close touch with the Qataris about these monitoring and mitigation procedures. But I’m just not going to be in a position to detail exactly what those are.

Q And I’m sorry, just to button it up, the fact that this individual was perhaps in contact with people on the battlefield, or in that theater of concern, does that concern the White House? It appears that was the case. You’re saying not on the battlefield, making that distinction. But perhaps making attempts to contact people on the battlefield, that should be a concern, I would think.

MR. EARNEST: Well, I can’t talk about the individual concern that we have. I can just say, as a general matter, that there have been concerns that have been raised about one individual, and that the monitoring and mitigation measures that were in place have been updated to reflect those concerns. But I just can’t get into the details of either what prompted those concerns, what the concerns are, or what the mitigation measures were.

Q And by “updated,” you mean intensified, right?

MR. EARNEST: Well, I think it would be fine for you to interpret it that way.

Q And because of the drone concerns here at the White House earlier this week, and there have been some reports about drone concerns at the Super Bowl this weekend -- that people may try to do this sort of thing, and people have been told not to do that -- I mean, what is the Department of Homeland Security, I guess, activity related to that? Is this a new concern? Is this sort of a new phenomenon that the Department of Homeland Security is looking at, that the national security apparatus of this government is looking at with respect to keeping people safe this weekend?

MR. EARNEST: Well, Jim, this is a concern that is new in the headlines, but is a concern that our national security team, and specifically the Department of Homeland Security has been aware of and focused on for quite some time. And I can tell you, as it relates to the White House, this is something that has been a subject of extensive conversation at the United States Secret Service, the agency that’s responsible for protecting the White House. I also know that the Department of Homeland Security is involved in some of the security precautions that are put in place around the Super Bowl, as they are with other large gatherings like that. So I’d refer you to the Department of Homeland Security to discuss what they can about the security measures that are in place to keep people safe when they’re attending the Super Bowl today -- or this weekend.
Jared.

Q Josh, I want to follow up on Major’s question about King v. Burwell. I know you said that you remain confident about the Supreme Court’s decision. Is there any legislative proposal that the administration is considering that could potentially get through two Republican chambers of Congress that would fix the Affordable Care Act if the King v. Burwell decision went the other way?

MR. EARNEST: Well, Jared, we’re confident that it’s not going to go the other way.

Q So there’s no legislative consideration happening to hedge any of those bets?

MR. EARNEST: Well, Republicans have indicated that they’re, again, determined to try to undermine the Affordable Care Act. And for some reason, they think it’s good politics to try to take health care away from people; I’m not sure exactly why that is. But that’s the conclusion that they’ve reached. And they have said that they would block any sort of legislative improvements to the Affordable Care Act, and that’s unfortunate but that’s the situation as it exists. That’s why it’s a good thing that we continue to be confident that the Supreme Court is going to take a look at the legislation and consider what is a pretty straightforward reading -- that the Congress intended for individuals who are qualified to accept tax credits to make their health care more affordable can actually accept them. And that’s a pretty simple principle, and I don’t think it’s one that we -- it is a conclusion that has been acknowledged by others who have looked at this.

For example, when the Congressional Budget Office did a review of the Affordable Care Act, they did so, and their analysis indicated that they expected people who lived in states where the federal government was running their marketplace, that those people who be eligible to collect tax credits to make their health insurance more affordable.

So it’s not as if this is some sort of creative interpretation of the legislation. I think it is rather the clear intent of those who wrote the law. Ultimately, it’s the Supreme Court that has to decide this, but I think on its face it’s a matter of common sense.

Q So since the Republicans control both chambers of Congress, there’s no point in the White House -- is this what you’re saying -- pursuing a backstop proposal if the Supreme Court went the other way?

MR. EARNEST: Well, again, we don’t think the Supreme Court is going to go the other way. And even if they did, Republicans have said that they wouldn’t consider a legislative solution. So we’re pretty busy here at the White House. I don’t think that would be a good use of our time.

Q One other thing, Josh. Does the White House have any reaction to Texas state representative, Molly White, and a decision that she made to put an Israeli flag on her desk and ask people to sign a pledge of allegiance to Muslims who were visiting her office yesterday? Does the White House happen to have any reaction to that?

MR. EARNEST: I don’t, Jared. And that’s actually the first I’m hearing of it, but I’ll go see if I can learn more about it.
April.

MR. EARNEST: Or not, maybe. (Laughter.) I’m sorry, April, I didn’t mean to interrupt.

Q No problem. No problem. Josh, I want to know, is Ferguson still a very special issue item that the President still looks at daily to find out what’s happening?

MR. EARNEST: This broader issue, April, of strengthening the bonds of trust between local law enforcement officials and the citizens of the communities they serve is something that the President is very focused on. And as you know, there is this commission that has been hard at work, that was appointed by the President, to take a look at some of these issues. This is a commission that include members of law enforcement, some community and civil rights leaders and others, who could examine what some communities across the country have done to build this trust and to try to find ways to share those best practices with other communities across the country.

Q So since you’re still looking at that issue, what did the President say about the dust-up that happened in Ferguson as tensions are still very high between the black community and law enforcement there?

MR. EARNEST: April, I haven't talk to the President about it. I have seen the news reports that you’re referring to. And I think this is an indication that there’s more work that needs to be done on this, and I don’t think that’s a surprise to anybody, that some of the --

Q On a federal level?

MR. EARNEST: Well, no, actually in that community. And don’t think that’s a surprise to anybody. I think that so much of the turmoil that we saw in that community over the summer and fall were not the result of issues that had just cropped up; these were issues that were long-simmering and erupted in rather tragic ways into public view.

And the Department of Justice, as you know, has been intensively involved in that local community, trying to work through some of those issues. And we’re hopeful that the work of this commission that the President has appointed will have some very practical, tangible recommendations for Ferguson and other communities all across the country, large and small, for some ideas about things they can do to try to head off these issues before they erupt so violently in the way that they did in Ferguson.

Q And on a second, unrelated question, you brought up Mitt Romney. Well, Nedra asked about Mitt Romney and you spoke very glowingly of him, saying he’s a man of great faith and it was a difficult decision, things that you said. And Jim asked -- brought up a really good point about inclusion. During his run for President against President Obama, he was not known for inclusion efforts, and with that, what does this White House think of the crop of candidates running -- be it Democrat or Republican -- as it relates to inclusion and to include the issues that we’re seeing with Ferguson, what’s happened in New York, in Sanford, Florida, with Travon Martin, and with Tamir Rice in Cleveland? Does this administration feel that there’s a responsibility for these potential presidential candidates to really reach out for inclusion versus being a party for a single group of people?

MR. EARNEST: Well, April, I think the best way for me to answer your question is to talk about the President’s experience. And the President believed that the strength of his campaign was built on the diversity of the support that he enjoyed all across the country; that the President’s campaign had succeeded in energizing people who hadn’t been involved in politics before; that we got Democrats and Republicans and independents excited about the prospect of being able to change their country.

And the President believes that ultimately, in 2008 and in 2012, that that was the key to his success. And to the extent that the campaigns that are run in 2016 are going to want to try to emulate successful -- recent, successful president campaigns, then a core element of those campaigns will need to be predicated on building a diverse, inclusive national campaign.

Q So are you saying that we’re in a time that there’s no room for just focusing on one group of people?

MR. EARNEST: Well, what I’m saying is that ultimately the people who will run in the 2016 campaigns are going to have to devise their own strategy. But I can tell you that when the President devised his strategy in 2008 and 2012, that one of the most important elements of that strategy was building an inclusive campaign that reflected the kind of diverse support that he wanted to earn from voters and supporters all across the country.

Francesca.

Q Yes, speaking of people who might potentially be running for President, Joe Biden -- when he was at the Democratic conference, he said, to state the obvious, the past six years have been really, really hard for this country. What was Vice President Biden trying to say there? I mean, the past six years this President has been in charge of the country.

MR. EARNEST: Francesca, I think what the Vice President was observing is that it’s been very difficult to dig out of the financial crisis that this President inherited when he took office and that it has been hard work to dig out of that financial crisis. And because of the grit and determination of the American people and American workers, because of the policies that this administration put in place, our economy has bounced back stronger than ever.

And we’ve laid a new foundation that we need to capitalize on, and the President is hopeful that on top of that new foundation, we can actually put in place policies that are going to benefit middle-class families. And whether it’s opening up the doors to a college education to more middle-class families; making it easier for middle-class families to save for retirement; helping middle-class families stretch a paycheck -- stretch their paychecks, particularly if both mom and dad are working. There are a number of policies we can put in place that will be in the best interest of middle-class families and that’s an opportunity that we have now that we have recovered from a terrible financial crisis.

Q Well, you’re very clear, but on a related note, the Democrats are having a panel today called, “Where Do We Go From Here?” Does that suggest that the rest of the Democratic Party, especially congressional democrats, are adrift and they don’t know where the party is going?

MR. EARNEST: Well, I don’t speak for all the Democrats; I speak for just the most powerful Democrat in the world. (Laughter.) And I can tell you that he’s very clear about where he wants to take the country.

Ching-Yi.

Q Thank you, Josh. I have a question regarding the Asia Pacific, actually. Yesterday, U.S. Seventh Fleet Commander, Admiral Robert Thomas, told Reuters that the U.S. would welcome Japan patrols in the South China Sea. And the Chinese government has a reaction to that. And China’s English newspaper also reacts strongly by saying that Washington has no authority to draw Japan in, and also if Japan did send air patrols to South China Sea, China would counter that action and also announce to establish a South China Sea air defense zone. So is this a new strategy for Obama administration to involve Japan’s military into South China Sea? And is there any change of your Asia rebalance policy?

MR. EARNEST: Ching-Yi, I’m not aware of the specific report that you’ve raised, but I can tell you that the administration policy that we have sought to pursue is to make sure that disputes that are arising in the South China Sea are resolved peacefully; that the South China Sea is a zone of commerce that’s critically important to the global economy. And ensuring that commerce can be conducted in that region of the world is in the clear interest of the largest economies in the world, including China, Japan and the United States. So we all have an interest in making sure that those disputes are resolved peacefully and in a way that will allow commerce to continue unimpeded in that region of the world.

Q So will the U.S. support Japan to air patrol in South China Sea?

MR. EARNEST: Again, I haven’t seen that specific prospect being raised but let me see if I can have my colleagues at the National Security Council get back to you on it.

Cheryl.

Q Yes, thanks. Last night, one of the other messages from the President was DHS, Department of Homeland Security funding. But what can Democrats do at this point, and have you heard anything new from Republicans on where that’s headed?

MR. EARNEST: Yes, unfortunately, we have not heard anything new from Republicans. As I mentioned earlier, Republicans -- I guess this was yesterday that we discussed this previously -- the Republicans spent a lot of time trying to campaign so that they could have the majority in the House of Representatives and the majority in the United States Senate, and that they promised that they would show the country the kind of leadership that the Republican Party stands for. But less than a month into this new era of Republican majorities in both Houses of Congress we see that Republicans are saying it's not that big of a deal if they don’t fund the Department of Homeland Security.

I can tell you that it's a pretty big deal to a border patrol officer. If he’s going to be expected to show up to work, protect the country, but not get his paycheck for doing so. It certainly is a pretty big deal for the President, that in a time when we’re dealing with some pretty significant national security challenges, that we’re not giving the Department of Homeland Security the flexibility and certainty that they need to carry out their mission because they don’t have a budget.

So, again, if Republicans want to take some responsibility, as they said they did when they were running for the majority, we hope that they understand that a basic responsibility that they have is to protect the country, and to protect our homeland security, and to make sure that the agency that’s charged with homeland security is properly funded.

Olivier.

Q Josh, I’ve got a couple for you. First, in the spirit of the President’s repeated calls for raising taxes on the most well-off in America, will the President support legislation that would strip the NFL of its tax-exempt status?

MR. EARNEST: Olivier, I haven’t seen that specific proposal but maybe after the President rolls out his budget we’ll have more to say about this.

Q And then secondly and unrelated, over the last six years if you and I wanted to discuss the President’s policy in Afghanistan we’d be able to draw on a wealth of data compiled by the Special Inspector General in charge of Afghan Reconstruction. Specifically, if we wanted to discuss the recruitment training equipment of Afghan forces, we’d be able to draw on data of how many people are in the field, what is their status, we can’t anymore because -- with apparently this White House’s blessing now the NATO command has classified information they used to make public. Will the President reverse that decision? And how are we supposed to hold this administration and this policy to account if we can’t get this information?

MR. EARNEST: I have to admit, Olivier, I'm not aware of this specific issue, but we can take a look into it for you. And the President has made it a priority to try to be more transparent and that has included trying to limit the over-classification -- there is a tendency to classify data in a way that ultimately upon further review isn’t necessary. I don’t know whether or not this is one of those situations, but we can take a look into it and get back to you.

Q I appreciate that.

Mark.

Q One more on the President’s speech last night. He said there is no economic metric by which we are not better off. Now does he include the national debt in that?

MR. EARNEST: Well, what the President has noted is that when you evaluate the deficit, the deficit has actually fallen by two-thirds since he’s taken office. And the way that we measure that is the way that economists evaluate it. They don’t look at just the sum total; what they do is they evaluate the deficit as a percentage of the economy -- that that’s a more effective and precise way to evaluate the impact of the deficit on our economy. And by that measure, the deficit has been brought down by two-thirds since the President took office.

Q What about the debt, which has gone up 70 percent on his watch?

MR. EARNEST: Yes, well, I don’t know what the measure is of the debt as it relates to when you measure it as a percentage of the economy. But I can tell you that the President continues to be committed to the kinds of fiscally responsible policies that were important to getting our debt and deficit under control when the President first took office. And that includes, as somebody mentioned a little earlier, raising taxes on those at the top so that we can offer some tax cuts to the middle class; that by closing loopholes and making our tax code a little bit more fair, we can also make it a little easier for middle-class families to make their ends meet, and we can do that in a way that does exacerbate the federal deficit.

Q Might he concede that the debt is not a metric that shows we’re better off?

MR. EARNEST: Well, I think he would concede, as I would, that the raw math shows that the debt has increased. But the steps that the President has taken have been important to improving our fiscal picture.

Chris, I’ll give you the last one.

Q Thanks, Josh. On Wednesday the Senate Armed Service Committee will hold a confirmation hearing for Ashton Carter as Defense Secretary. LGBT advocates have been calling for two things that will be under his purview: Openly transgender service and a non-discrimination rule for LGBT servicemembers. Do you anticipate the President’s nominee will address those things during the hearing?

MR. EARNEST: If asked, I'm sure that he will.

Q Will he volunteer this in some capacity do you think?

MR. EARNEST: Well, I don’t know that there’s a lot of volunteering that goes on in those kinds of settings, I think usually they’re asked questions -- and I'm sure that he’ll answer them if he’s given the opportunity to do so. So, one thing you could do is you could go and ask members of Congress if they’re going to ask him.

Q In other news, federal contractor Exxon Mobile today announced that it has adopted an LGBT inclusive non-discrimination policy for its workers. This follows the executive order the President signed in July to prohibit LGBT discrimination among federal contractors. Does the President deserve credit for this change?

MR. EARNEST: Well, I was not aware of that news until you just informed me -- but I guess that is your profession. What I will say is I do think this is an indication of something that we have talked about quite a bit, that there is -- that there are a number of ways that the President can advance the kind of agenda that he thinks is in the best interest of the country.

Sometimes that’s by passing legislation that would apply broadly across the economy and across the country. Sometimes it's about the President taking action that applies only to the federal government and using that as a model for other businesses that are considering -- or other entities that are considering similar action. So we’ve seen this when it came to the minimum wage, that the President was able to raise the minimum wage for federal contractors, and that in conjunction with that, we saw that other states said that’s probably a good idea in our states. Or voters in other states said, we should raise the minimum wage in our states.

So, there is a way for the President to use his executive authority in a way that may, at the beginning, have only a limited effect, but does serve to motivate and in some cases even inspire other states or other companies or other organizations to take similar steps. And certainly the -- we’re gratified by the success that we’ve had when it comes to pushing other states to raise the minimum wage or states to expand access to quality early childhood education. And it's possible, based on what you’ve described to me, that this may be an example of that as well.

Q I just want to go back to my first question because I wasn’t really satisfied with that response. Those two issues of openly transgender service and --

MR. EARNEST: There’s a lot of that in this building it sometimes. (Laughter.) It's okay, it's part of my profession.

Q -- the LGBT non-discrimination policy. Do you think those are two things that the Pentagon can implement either before or after confirmations?

MR. EARNEST: I don’t know, you’ll have to check with the Pentagon about that. Okay? Why don’t we do a week ahead before we go?

Q Josh, the Super Bowl plans? The President’s guests?

MR. EARNEST: The President will be here at the White House to watch the Super Bowl with some friends and family. As you may know, the President on Sunday will be doing an interview with NBC’s Savannah Guthrie. That will be, I think, around 4:30 on Sunday, it’ll be aired live so those of you who are watching the Super Bowl should tune in for that.

Q But is it going to be a party?

MR. EARNEST: I'm sorry.

Q Not just a gathering, is it going to be a party --

MR. EARNEST: I think they’re hoping to have a little fun while they’re watching the football game.

Q You know what I'm talking about.

MR. EARNEST: I'm not sure that I totally do. (Laughter.)

Q Large numbers of people, big-screen TVs, popcorn, pretzels, all that stuff, like it's been in the past.

MR. EARNEST: I think there will be some of that, yes.

Q Okay.

MR. EARNEST: On Monday, the President will deliver remarks on the FY 2016 budget at the Department of Homeland Security. That will be an opportunity for the President to make the case once again that it's important for Republicans to not allow funding for the Department of Homeland Security to lapse at the end of February.

In the afternoon, the President will welcome the 2014 NHL Champion Los Angeles Kings and the 2014 MLS Cup Champion L.A. Galaxy to honor the teams on winning their championship titles. Thank goodness it's Friday. This visit will continue the tradition begun by President Obama of honoring sports teams for their efforts to give back to their communities.

On Tuesday, the President here at the White House will hold a cabinet meeting. On Wednesday, the President will attend meetings at the White House. On Thursday, the President is looking forward to delivering remarks at the National Prayer Breakfast. The First Lady will also attend. And on Friday, the President will attend meetings at the White House.

Have a great weekend, everybody.

END
2:05 P.M. EST

Statement by Assistant to the President for Homeland Security and Counterterrorism Lisa Monaco: Update on Implementation of Signals Intelligence Reform and Issuance of PPD-28

Press Briefing by Senior Administration Officials on the President's FY2016 Budget

Remarks by the President Honoring 2014 Stanley Cup Champions the L.A. Kings and 2014 MLS Cup Champions the L.A. Galaxy

Sequestration Order for Fiscal Year 2016

Remarks by the President on the FY2016 Budget

Statement by the Press Secretary on the Visit of Chancellor Merkel of Germany

Statement by the President on the Death of Kenji Goto

Statement by the President on the Election of President Sergio Mattarella of Italy

Weekly Address: A Path Towards a Thriving Middle Class

Press Briefing by Press Secretary Josh Earnest, 1/30/2015