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The White House
Office of the Press Secretary
For Immediate Release

Press Briefing by Principal Deputy Press Secretary Eric Schultz, 1/28/2015

James S. Brady Press Briefing Room

1:44 P.M. EST

MR. SCHULTZ:  Good afternoon.  Welcome to your White House press briefing.  Before we get started, I want to highlight some good health news this week.  As you saw, yesterday Indiana became the 28th state, plus the District of Columbia, to expand Medicaid.  This is great news for the estimated 350,000 Hoosiers, who will gain coverage.  And we commend Governor Pence for joining other Democrats and Republicans who have decided to expand Medicaid.  If the remaining 22 states expanded Medicaid, millions of more people would gain health coverage.

Yesterday, as you also saw, the Department of Health and Human Services announced that 9.5 million people have selected a health insurance marketplace plan, or were automatically re-enrolled in the first two months of open enrollment for 2015.  And in the 37 states using, 2.5 million young people under age 35 have selected a plan or have been re-enrolled.  And in those same states, 87 percent of people have signed up for a qualified premium tax credit or other financial assistance to help make insurance more affordable.  This is great progress, and we encourage people who still need insurance to come and sign up by February 15th.

With that, Nancy, I will take your questions.

Q    I had a question about this quick dropping of the 529 tax plan as a distraction.  What does that say about the President’s commitment to his policies if something can be dropped so quickly as a distraction?

MR. SCHULTZ:  Thank you, Nancy.  I appreciate the question.  And I think it’s important to take a step back and look at the broader proposal the President has offered to ensure more middle-class families can get a college degree.

First, he’s proposed making two years of community college free for responsible students so that every American has access to at least two years or more of high school -- of high-quality schooling.  The President believes the surest way to the middle class is higher education.

So some of you were on our trip to Knoxville a few weeks ago, where we were very transparent that we modeled our program on the national scale after the Republican governor’s program in Tennessee.

In addition, he’s proposed -- the President has proposed nearly $50 billion in education tax reforms geared towards helping middle-class families afford the cost of college.  This proposal includes simplifying, consolidating, and better targeting tax-based financial aid.  The President’s plan would cut taxes for 8.5 million families and students; simplify taxes for more than 25 million families and students that claim tax benefits.  All told, this would provide students working towards a college degree with up to $2,500 of assistance each year for five years. 

So while the program you’re asking about is a very small component of that, it was a distraction, we decided to move forward with the rest of our plan, and we hope Congress moves on it shortly.

Q    So is there any thinking that by doing this there’s a greater opportunity to strike a broader deal with Republicans on a broader package?

MR. SCHULTZ:  We absolutely are anxious to roll up our sleeves and get to work with both Republicans and Democrats on this.  As I mentioned, the fundamental pieces of this proposal are pieces that have enjoyed bipartisan support -- support from Republicans and Democrats -- in the past.  So we are absolutely hopeful that we can get to work on them.

Q    On immigration, what is your thinking about this talk on the Hill that the DHS funding deadline isn’t necessarily that important because DHS employees would be the essential employees who would be working anyway?

MR. SCHULTZ:  I’m glad you asked that, Nancy.  I think that Republicans have a choice to make right now.  They can decide to either refight an old political battle over the President’s executive actions on immigration, or they can choose to fully fund the Department of Homeland Security.  This is a mess they created back in December when they decided to opt for that fight over the immigration reform actions the President took.  We believe that was unwise and misguided; that they now have a mess on their hands that they ought to be cleaning up.  They fought very hard for control of power in both chambers -- the House of Representatives and the Senate -- and it’s now time for them to step up and govern.

Q    Any comment on the growing indication of a lawsuit by the House Republicans on immigration?

MR. SCHULTZ:  I would just say that House Republicans seem to be relying more and more on the courts these days to challenge the President’s authority.  We believe that we acted within the full bounds of the authority -- into the executive branch, and we’ll be defending that.


Q    Eric, back on 529s -- can you tell us who at the White House was involved in the original proposal, and how you came about deciding not to move forward?

MR. SCHULTZ:  Sure.  The President’s budget is the culmination of extensive conversations and discussions across the executive branch with agencies, and it’s a process that’s housed at our Office of Management and Budget.  So I’m not going to be in a position to give a tick-tock of those conversations.  But I can tell you that that was a small part of a larger plan to help build economic opportunity for the middle class, because we feel that higher education is critical to that endeavor.

Q    Is it fair, though, to say that I guess budget officials were involved in making the proposal then?

MR. SCHULTZ:  It’s fair to say that under the proposal that we put forth, that both senior staff at the White House and administration officials from across the agencies were involved.

Q    Did you expect to get the blowback from both sides that you did?

MR. SCHULTZ:  I think that what we expected was that when the President put forward this plan, in order to lift opportunities for the middle class to achieve higher education, we wanted to make sure that the focus was on expanding that economic opportunity.  Over the past six years, we've seen significant economic progress across this country, and that includes, by the way, the longest stretch of job creation in our nation’s history, and last year marking the highest number of job growth for a calendar year since the late 1990s.

But we've also seen that the middle class hasn’t always enjoyed the prosperity that some at the top have.  So what the President is focused on and what we expected was to have a conversation now about middle-class economics, so that more and more Americans in the middle class could enjoy that prosperity.  And that's what the President is focused on.

Q    All right.  On another topic, what’s the White House’s reaction to the new Greek Prime Minister’s short tenure so far, and his desire and efforts to renegotiate the bailout package with Europe?

MR. SCHULTZ:  Thank you, Jeff.  We do, in fact, look forward to working with the new Prime Minister and his new government.  The Greek people have taken many difficult but important steps to lay out the groundwork for the economic recovery.  As a longstanding friend and ally, the United States will continue to support their efforts and those of the international community to strengthen the foundation of Greece’s long-term prosperity.  We also continue to discuss ways that Europe can boost demand in job creation to help foster an environment that is supportive of reforms in Greece and elsewhere in Europe.  So that's definitely a situation that we're monitoring closely.

Q    But can you be specific as to whether you support Greece’s desire to renegotiate its bailout terms?  Or are you coming down more on the side of Germany, which is the big creditor in this package?

MR. SCHULTZ:  Well, I think it's important to note that European leaders have made clear that they want Greece to remain in the Euro area, while respecting its commitments to reform.  And so the United States supports those efforts.

Q    Does he take a side on that particular question?

MR. SCHULTZ:  Well, Jeff, we remain in communications with IMF and European leaders on the measures necessary to secure that progress that Greece has achieved.  We're going to continue to monitor the situation.


Q    I wanted to loop back on immigration first.  I know that you said it's time for Republicans to get to work on a solution, and I guess I'm curious what your guys’ parameters for that solution would be.  I know you’ve threatened to veto anything that would override the President’s executive action.  But there’s been talk on Capitol Hill of Republicans, including maybe something on border security, maybe something on H1B visas.  Can you envision the President signing a bill that includes -- that's not a kind of clean bill, like funding as it were, but includes some of those provisions?

MR. SCHULTZ:  Sure.  Our view is we want a clean DHS funding bill.  If you look at where we are, again, over the past six years, we are now at a point where Republicans fought very hard for majorities in both the House and the Senate, and a few months ago they achieved just that.  So it is now time for them to help fund the Department of Homeland Security.  It's unimaginable to me that Republicans would risk defunding that agency which is responsible for aviation security, which is responsible for the United States Secret Service, which is responsible for enforcement of our immigration laws.  So our view is we want a year’s worth of full funding.

Q    Sure, but that doesn’t really answer the question, which is would you accept a year’s worth of full funding that included some of the provisions that Republicans have been trying to bargain into a broader comprehensive immigration bill but attached to DHS funding?

MR. SCHULTZ:  Justin, I've seen some reports of Republicans sort of floating certain riders and such.  Our bright line thus far has been we will veto anything that includes a rollback of the President’s executive actions on immigration.  Short of that, I'm not going to be in a position to sort of negotiate on those pieces.

Q    And then just on 529s -- after you guys rolled that out, there was a press call with senior administration officials in which they said they hadn’t talked to Capitol Hill about this before it was kind of rolled out to us.  Was that a mistake?  Did not bringing Democrats in and kind of explaining to them how this tax plan was going to work lead to the sort of mutiny that we saw?  We saw Nancy Pelosi kind of get in the President’s ear about this.

MR. SCHULTZ:  I think, Justin, that you saw, in the wake of the State of the Union, widespread, if not unanimous support from Democrats on the President’s plan to make college more affordable and more accessible for all Americans.  Again, this particular piece was becoming a distraction.  We didn’t want that to jeopardize the broader plan, so that's why we announced what we did.


Q    Eric, what’s the White House reaction to the Jordanian government expressing a willingness to give in to demands of ISIL to release a convicted terrorist to gain release of their pilot who’s been held hostage?  What does the White House make of this?

MR. SCHULTZ:  Jon, as you know, our policy is that we don't pay ransom, we don't give concessions to terrorist organizations.  But in terms of details on the negotiations between the Jordanians and the Japanese, I'm going to refer you to their governments.

Q    Okay, but my question is -- okay, so we don't -- the United States government will not pay ransom, will not give in to demands.  Do we think it is a bad idea if another government does exactly that?

MR. SCHULTZ:  I can tell you that this is a longstanding policy that predates this administration, and it's also one that we've communicated to our friends and allies across the world. 

Q    So you announced, the White House announced that there would be a review of our hostage negotiation policy back in November.  What has happened with that review?

MR. SCHULTZ:  Sure.  That review is underway, Jon, and that review is being led by our counterterrorism director, Lisa Monaco.  This is a review that takes a look at our internal processes on this.  It was prompted by the increasing number of U.S. citizens taken hostage by terrorist groups overseas, the extraordinary nature of recent hostage cases.  And that’s why the President directed this review to be conducted.

I don’t have a status update for you on that, but as soon as we do we’ll let you know.

Q    And this is a -- you say the United States government does not give in to demands, does not pay hostage -- does not pay ransom.  But how is what the Jordanians are talking about doing any different than what the United States did to get the release of Bergdahl -- the releasing prisoners held at Guantanamo Bay to the Taliban, which is clearly a terrorist organization? 

MR. SCHULTZ:  As you know, this was highly discussed at the time.  And prisoner swaps are a traditional, end-of-conflict interaction that happens.  As the war in Afghanistan wound down, we felt like it was the appropriate thing to do.  The President’s bedrock commitment as Commander-in-Chief is to leave no man or woman behind.  That’s the principle he was operating under.

Q    Isn’t that what the Jordanians are operating under?  I mean, the Taliban is still conducting terrorist attacks, so you can’t really say that the war has ended as far as they’re concerned.

MR. SCHULTZ:  Well, I’d also point out that the Taliban is an armed insurgency; ISIL is a terrorist group.  So we don’t make concessions to terrorist groups.

Q    You don’t think the Taliban is a terrorist group? 

MR. SCHULTZ:  I don’t think that the Taliban -- the Taliban is an armed insurgency.  This was a winding-down of the war in Afghanistan, and that’s why this arrangement was dealt. 

Our view is, as the President said at the time, which is, as Commander-in-Chief, when he sends men and women into armed combat, he doesn’t want to leave anyone behind.  That was the commitment he was following through on this.

Q    Okay, and just one other topic.  On the question of Iran, of course the President made it clear he would veto the sanctions bill if Congress did it -- saying it would interfere with negotiations.  Now Senator Menendez and nine other Democrats who all support that bill have conceded to the White House that they will not support a sanctions bill until March 24th; that’s the date that you’re supposed to have a framework agreement.  So does the veto threat go away after March 24th?  Because they say they want to vote on it right after March 24th if Iran has not agreed to that framework agreement.  So will you -- they’ve now made a big concession to the White House that they’re going to hold off.  Will that veto threat be dropped on March 24th if there is no framework agreement?

MR. SCHULTZ:  Jon, the President does indeed appreciate the recognition that our negotiators need continued time and space to pursue this diplomatic option.  We welcome the commitment by Senator Menendez and others to vote against, as you point out, the sanctions bill on the floor right now.  We’re going to continue to work closely with Congress on this.

Q    But my question is, does the veto threat go away on March 24th if there is no agreement, if the Iranians have not agreed to a broad framework?

MR. SCHULTZ:  Jon, the President has made clear the importance of the end-of-March deadline in our own pursuit of a political framework there.  So we’re going to certainly engage Congress at that point, just like we have been thus far.  And if we determine that negotiations have failed, we have always said we’ll be the first ones to move for sanctions; I think the President has said that.  We’ll take a day or two, but that’s a determination we’re going to make based on the progress of the negotiations at that point.


Q    Another topic.  Senator Burr last week sent a letter to the White House requesting that the administration send all copies of the full torture report that it got from the Senate back to the Senate because he doesn’t think that it should have gotten it in the first place.  Will the administration be sending the full 6,700-page copy -- the copies that it has of the full torture report back to the Senate?

MR. SCHULTZ:  I’m going to be honest with you, Mike, I did not see that letter.  I will say, it was under the President’s directive that the un-redacted version of the report be made public.  So I think we have a strong record of transparency on that front, but I don’t have a particular response to that specific request.

Q    Can you follow up on that?

MR. SCHULTZ:  I’m happy to take a look.  Edward-Isaac Dovere. 

Q    Full name.  (Laughter.)  Senator Feinstein issued a 15-point dissection of the report about the CIA snooping on the committee computers.  Josh had expressed a lot of -- “a lot of confidence” was the quote in that report.  Does what Senator Feinstein said about this raise any questions for you guys now about that confidence that you had in it?

MR. SCHULTZ:  We're 0 for 2, because I did not see Senator Feinstein’s release either.  I can tell you that we continue to have confidence in that report.  I know that a lot of professionals worked a long time on that report.  The President felt it was strong.  It was important to make sure that an un-redacted version was able to get into the public space because of the important dialogue that was happening on this issue.  But I don't have a response to that.

Q    There’s nothing that's come up since that has raised any questions in the minds of --

MR. SCHULTZ:  Not that I’ve seen.


Q    Thanks, Eric.  Is the President watching any of confirmation hearings for Loretta Lynch? 

MR. SCHULTZ:  So I don't know if the President has been watching C-SPAN at all this morning.  But I can tell you that we feel good about the confirmation hearing.  We think Ms. Lynch has made clear that she’s proven the President correct when he said that it was pretty hard to find someone more qualified for this job than Loretta.  She has a 30-year career distinguishing herself as tough, fair, independent; and twice headed the most prominent U.S. attorney’s office in the country -- twice being confirmed with bipartisan support by the United States Senate.  But don't take my word for it.  This might be the first and only time we cite Bill O’Reilly from the podium.  (Laughter.)  But just a few days ago, he called her a hero and happy that she’s the new Attorney General.

Q    So with all of that, she said that she’s not Eric Holder.  And the President really admired Eric Holder for all of his work, particularly in areas of civil rights and criminal justice.  What does that mean for you for her to say that on the Hill when the President was so much of a supporter of Eric Holder’s work?

MR. SCHULTZ:  We are very much a supporter of Eric Holder’s work.  We think his record speaks for itself.  If you look at the progress we’ve made on civil rights enforcement, if you look at the progress we’ve made prosecuting terrorists, increasing the rights of the LGBT community, and fighting tirelessly for voting rights, we feel good about Eric Holder’s record at the Department of Justice.  He has a strong record, an impressive record.  And we feel that Loretta Lynch will be just as strong of an Attorney General as Eric Holder was.

Q    Do you mean she will follow along that line even though she says she is not Eric Holder?

MR. SCHULTZ:  I didn't have a chance to read Loretta Lynch’s opening statement.  She might have been just being literal that she’s not Eric Holder.  (Laughter.)  I think that -- if you are -- (laughter) -- I think if you take a look at Loretta Lynch’s testimony and her career and her credentials, you’ll find the values and the priorities and the public policies that she’s going to pursue.  The President certainly felt comfortable with that, and that's why he nominated her.


Q    I have a question about another veto threat, which is Keystone.  It might be the first one you get to exercise.  He’s been very clear that he’ll veto this, but he hasn’t been clear about why.  Is he against building the Keystone pipeline?  Or is this because he wants to preserve some kind of process and wait for the State Department to do its thing?  That's been very unclear.

MR. SCHULTZ:  Mara, to the contrary, I think we have been clear.  This Keystone project is undergoing review at the State Department.  That is a process that long predates this administration.  So we are opposed to any legislative maneuver that would circumvent that process.

Q    This is about the process, it is not about the Keystone pipeline?

MR. SCHULTZ:  Again, we are opposed to any legislative maneuver that would circumvent a process that’s been in place for decades.

Q    Does the President have an opinion after all this time on the Keystone pipeline?  The merits of the Keystone pipeline?

MR. SCHULTZ:  I think you’ve heard the President talk about this on many occasions.  I’m not going to go ahead and parse his words.  Most recently, he addressed this in the State of the Union, where he said the United States government can set a larger bar, have a grander vision to rebuild infrastructure in this country.  That’s what he’s focused on.

In terms of the Keystone pipeline, as I said, this is undergoing review at the State Department.  He’s going to wait until the State Department makes its final determination before voicing anything determinative.

Q    Well, how do you interpret what he said in the State of the Union?  Because it was kind of oblique.  He said, we shouldn’t set our sights so low as to a single pipeline.  Does that mean he thinks it’s small potatoes and it doesn’t matter either way?  Or what?

MR. SCHULTZ:  I think the President has talked about this a couple of different times, and so I don’t have anything to add at this point from the podium.  I will say the project is under review at the State Department.  We’re going to wait for that review to complete before we weigh in.  It’s under careful consideration.  There’s a lot -- it’s an elaborate process.  Now that the Nebraska court has weighed in, that route can now be assessed.  But I’m not going to prejudge that process.


Q    Eric, thanks.  I want to try to nail down a little bit more why you abandoned the plan to tax the 529 college savings funds.  Of course, there were those reports that Minority Leader Pelosi was pressing President Obama on Air Force One, as well as Chris Van Hollen.  Were those conversations the straw that broke the camel’s back, essentially?

MR. SCHULTZ:  Those conversations were indicative of the distraction that this was becoming.  And the President put forth a bold proposal to make college more affordable for all Americans.  He didn’t want this to be a stumbling block that would jeopardize the rest of the package.

Q    So you call it a distraction.  Do you still think this is a good policy?  There was so much backlash, particularly from middle-class Americans, who said we really value these plans.  So do you still stand behind that as a good policy?

MR. SCHULTZ:  We do.  And again, even at the time, before yesterday -- as my colleague, Josh Earnest, said -- we would have only implemented this particular piece alongside a much broader package, which would have amounted to $50 billion in tax cuts for the middle class. 

Q    You have a lot of people saying, though, that they wouldn’t buy those plans if they came along with the tax.  So I guess just in keeping with that, is that really good policy, when you have so many people saying, well, then the plans become useless essentially?

MR. SCHULTZ:  I’m not sure I’d characterize it that way.  I do think, again, this particular piece, which was $1 billion over 10 years, compared to a $50-billion program, was a small, tiny piece of a program we wanted to implement on behalf of middle-class families.

Q    And the First Lady is getting some criticism for not wearing a head scarf.  Does she have a reaction to that criticism?  She’s getting some criticism on Twitter, particularly, I guess, in Arabic.  So what is her reaction to that?  Does she think that’s fair or justified?  Does the White House have a reaction?

MR. SCHULTZ:  Kristen, I saw those reports, and the attire the First Lady wore on this trip was consistent with what First Ladies in the past have worn -- First Lady Laura Bush, what Secretary Clinton wore on her visits to Saudi Arabia, Chancellor Merkel on her visits to Saudi Arabia, and including other members of the United States delegation at the time.

Q    Ted Cruz, Senator Ted Cruz just tweeted, “Kudos to FLOTUS for standing up for women and refusing to wear Sharia-mandated head scarfs in Saudi Arabia.  Nicely done.”  Was that her intention, to send that message?

MR. SCHULTZ:  I don’t have a response to a tweet from Senator Ted Cruz.  I will say that the First Lady very much enjoyed her visit to both India and Saudi Arabia.  She felt like she was warmly welcomed by the King there.  They had a very good discussion that included catching up on their families, and also a new school that the King had built to help 60,000 women get educated.


Q    Thanks.  Back to 529 -- Republicans have introduced a bill now that would actually expand those 529 college accounts.  Would the White House support a bill like that?

MR. SCHULTZ:  I saw those press reports, and I can tell you that my friends in the policy shops and the legislative shops are taking a look at that.  Our focus is on working with Congress to deliver the larger package of education tax relief the President proposed, which, again, does have bipartisan support, as well as the President’s broader package of tax relief for child care and working families -- again, as we’ve discussed, paid for by closing the trust fund loophole and making sure the wealthy pay their fair share.


Q    The United States continues to conduct drone strikes in Yemen.  Previously, this was done with the support and cooperation of the Yemeni government, but now there isn’t one.  Are we continuing to do this on our own? 

MR. SCHULTZ:  I know you’re not putting me on the spot to confirm any activity like that, but I will say that the political instability in Yemen has not forced us to suspend our counterterrorism operations in the past -- or suspend our counterterrorism operations there.

As we have in the past, we will continue to take action to disrupt continuing and imminent threats to the United States and our citizens.  We continue to partner with Yemeni security forces in this effort. 

So I think the short answer to your question is, our relationship with the Yemenis was not bound to just one person.  We have a multifaceted relationship with folks over there, and we continue to be in touch.

Q    Well, it wasn’t just one person.  There’s no government, effectively. 

MR. SCHULTZ:  Again, our relationship was not confined to just one individual.  We were working with the Yemeni security forces and other parties over there.

Q    So no matter what the Yemenis think, we’re going to continue to do it?

MR. SCHULTZ:  Bill, again, I think even as the President has made clear, our counterterrorism operations have not stopped.  The President believes if there’s a threat emanating from that region, he’s going to take action.

Wow -- Jim.  (Laughter.) 

Q    Took a while to scan over to this side of the room.  Speaking of drones, following that crash landing here at the White House on Monday, does the White House believe that the grounds here are adequately protected from drones?

MR. SCHULTZ:  We do, we do.  Obviously, the safety and security of the White House grounds is the mission of the -- is one of the missions of the United States Secret Service.  We have full confidence in them to accomplish that.  And I think that one of the -- I’m not going to be in a position to detail the sort of security infrastructure around the White House.  I’ll refer you to the Secret Service for what they are willing to share. 

But I will also say that this technology is not new to the Secret Service.  This is something they’ve been working through for some time.  And so they also are constantly reviewing emerging technologies.  This is no different, so I’d refer you to them for any details they can share on that.

Q    And has the White House looked at all at this operator’s story?  It was reported out by the Secret Service that he was only using it for recreational reasons.  Does that fly with you guys?

MR. SCHULTZ:  Well done.  (Laughter.) 

Q    Sorry.

MR. SCHULTZ:  It’s good.

Q    A little Josh thrown in there. 

MR. SCHULTZ:  Yes, that’s good, that’s good.  Jim, the investigation is squarely housed at Secret Service, so they’re the ones who are completing that investigation.  I expect it to be fair, thorough and tough.

Q    And the President told Fareed Zakaria with CNN that he reiterated the explanation that you guys gave that he’s not going to meet with Prime Minister Netanyahu within a couple of weeks of the Israeli elections.  Have they had a chance to speak at all?

MR. SCHULTZ:  I don’t have any calls with Prime Minister Netanyahu and the President to read out right now.

Q    So you don’t know if they’ve spoken at all, so --

MR. SCHULTZ:  Again, I don’t have any calls to read out.

Q    And just to follow up on Kristen’s questions about the 529 plans, it does seem as though -- I don’t want to say you don’t get it, but there are a lot of people out there who really believe in these 529 plans.  And I guess I’m just curious -- did the White House explore that?  Did you guys look, in putting together this policy, this proposal for the budget, did you look at the popularity of these programs and the fact that so many people out there are invested in these? 

And what would have been the impact on all of those Americans if they had to all of a sudden figure out a different way to save for college?  I mean, it just seems as though it’s a very inexpensive item in the budget but a major headache that was created by putting this out there.

MR. SCHULTZ:  I appreciate you noting the reality, that this is a relatively inexpensive and small piece of business for us.  Our proposal, as we’ve said all along, is to deliver nearly $50 billion in education tax cuts for the middle class.  The 529 proposal is about 3 percent of that nearly $50-billion tax reform package.  And that being said, the President is very interested in working with Congress to move forward on his broader package.

As you point out, this was a concern for both Democrats and Republicans on the Hill.  We decided to take that to heart.  And sometimes we come out here, face a lot of heat for not listening to the Hill.  We decided that we didn’t want this to become a distraction, and that’s why we want to move forward on the rest of the package.

Q    I mean, do you think maybe you should have talked to the Hill beforehand?

MR. SCHULTZ:  I think that we have extensive conversations with members of Congress and their staff.  I think, by and large, we’ve seen near unanimous support, at least from the Democrats, on a lot of the goals and the pieces of the education reform proposal.

Thank you.  Annie.

Q    There’s another piece in the President’s plan that is very popular among middle-class families that’s ending, and that’s the child care flexible savings accounts.  Has there been any discussion in the White House about also taking a step back from that proposal?

MR. SCHULTZ:  No.  The President’s proposals for child care and education tax benefits invest nearly $1 billion more in middle-class families while making it a lot easier for families to take advantage of them. 


Q    Eric, can I ask about the drilling of oil on the Atlantic Coast?  There are probably lots of folks along the coast who are thinking, what did the President decide after the Deepwater accident that made him confident that this was the way to go.  Can you just describe how the President arrived at his decision that this would be safe environmentally and worth doing at this time?

MR. SCHULTZ:  Thank you for the question, Alexis.  I’m not sure if it was yesterday or earlier this week, the Department of Interior did release its five-year plan.  That plan did make available additional areas for drilling and for leasing.  But it’s important to note that that was just a preliminary step, that this is a plan that's now open for feedback and for public input both from the public and specific stakeholders.  So this plan is by no means final.

And so before that's locked it, there will be plenty of time to comment.  I think more largely speaking, this is consistent with the President’s all-of-the-above energy approach.  The United States of America is now the world’s largest producer of domestic -- of oil.  And we are at a historic low for imports of oil and natural gas.  So the President feels good about his all-of-the-above energy approach.  Clearly, energy prices are down, production is up, and so I think the announcement by the Department of Interior yesterday was consistent with that.

Q    And also, just to follow up on Mara’s question, is there any correlation in the President’s mind in terms of this policy announcement between drilling on the Atlantic Coast and his dissatisfaction with the Keystone pipeline’s utility or job creation or necessity?

MR. SCHULTZ:  I don't think so.  I think that -- can you ask your question one more time?  I’m sorry.

Q    Does the President’s policy on drilling, the need for drilling on the Atlantic Coast, relate at all to his dissatisfaction with the arguments for the Keystone pipeline?

MR. SCHULTZ:  No.  Again, the Keystone pipeline project is still under review at the Department of State, so it’s going to be hard for me to weigh in here on that right now.

In terms of the President’s commitment to increase oil production, we think the numbers speak for themselves.  Again, it’s part of the President’s all-of-the-above energy approach.  Our numbers on solar, wind, with domestic oil production are all high, and the President is proud of that record.

Q    One other quick follow-up.  The President is going to release his budget on Monday.  And I have another 529 question.  If the President believed that the 529 proposal was the right policy and now he’s arguing that he’s changed his mind because it became a political distraction, how are we supposed to appraise the blowback that we're going to hear to the President’s budget on Monday?  Are the policies that get some sort of political blowback distractions that should be jettisoned from the budget?  How do we evaluate that?

MR. SCHULTZ:  Why are you anticipating blowback from the budget?  You don't think it’s going to be received with universal acclaim?  (Laughter.)

I do want to give you one heads-up for your planning, which is the 529 piece will still be in the written budget that's released.  The announcement yesterday was made after the book was in the shop to be produced.  So just for your planning.

But the President, broadly speaking, is very excited about this budget.  We think it reflects a lot of priorities that the President talked about in his State of the Union.  Again, it’s a product of an exhaustive process that crosses many different agencies here in the administration.  We think it’s going to reflect the fundamental values of building out the middle class to help sustain economic progress.  For us, that includes making paychecks go further, making sure young people have the skills they need to succeed, and making sure higher education is more attainable for Americans across the board.

Q    Right, but you didn’t answer my question. 

MR. SCHULTZ:  Why don’t you give it another shot?

Q    Okay.  So you just set a new way to evaluate the budget, right?  If something becomes a distraction, the President will consider eliminating it.  So my question to you is, as the President prepares and releases the budget on Monday, and there is political dissatisfaction of elements of it, will the President consider eliminating those?  Did he just set a new way of evaluating, even though he thought the 529 policy made sense?

MR. SCHULTZ:  That's not how we see it, Alexis.  The President, in his budget -- if you're looking for clues for what’s in the budget and how it's going to be received, I would draw you to the State of the Union text where he laid out pretty firm plans for strengthening our economy, improving the education and skills of our workforce, accelerating scientific discovery, bolstering manufacturing, and keeping our nation safe.  Those are the fundamental tenets of our budget.  Beyond that, I'm not going to preview what’s in there or what the reaction is going to be or how we're going to respond to the reaction right now.

Thank you.  Byron.

Q    Thanks, Eric.  The President, in his 2006 book, had a lot of praise for tax-free education savings accounts, which would encompass plans like the 529.  Is it fair to say he’s changed his mind on this issue?  He also, in 2007, voted to make 529 tax savings permanent.  So has he flip-flopped? Has he changed his mind on this issue over the years?  And perhaps, why?

MR. SCHULTZ:  Thank you.  I think if we take a look back at this proposal, it was part of a larger $50-billion proposal to make economic opportunity for the middle class more attainable by making college more accessible.  That’s what’s driving the President, that's his North Star.  When he wakes up every morning, that's what he wants to achieve.  So this was a small piece of a much broader plan to get there.  Because this did not enjoy the support from members of the House and the Senate, we wanted to make sure that this didn’t become a distraction to help jeopardize the rest of the plan.  So that's why we made the decision that we did.  And that's why we want to get to work on the rest of the plan as soon as possible.

Q    But has he changed his mind over the course of a couple years about, I guess, educational financing and the way that the tax code should treat educational savings?

MR. SCHULTZ:  I think the President, by virtue of the proposals he’s released over the past 10 days, has been very clear where he stands on funding higher education and making sure that is more attainable for people in the middle class.  And I can also tell you that the President did agree with the decision to not move forward with this particular proposal yesterday.

Q    Can I ask a question following up on what the President was asked in the YouTube interview?  He was asked about the legalization of marijuana, and he cited federal law as a reason that marijuana remains illegal.  But federal law also contains a provision for rescheduling drugs within the administration.  Does he have a position on that aspect?

MR. SCHULTZ:  Which interview are you saying?  I'm sorry.

Q    The YouTube interview -- I'm sorry -- he was asked about marijuana legalization.

MR. SCHULTZ:  Oh, got it.  I thought you said Jeffrey Toobin.  I'm going to refer you to the Department of Justice.  I don't have a lot of information on that right now.

Q    Thanks, Eric.  New Jersey Governor Chris Christie this weekend is planning on going overseas to London; he becomes one in a long list of potential Republican presidential candidates to make a trip abroad, and to London specifically.  And I'm wondering, does the President view those trips as helpful, hurtful, or relevant to the overall conduct of U.S. foreign policy?  And also, as somebody who came from the Senate to the White House and who took a trip abroad, does he view those trips as potentially helpful in preparing to be Commander-in-Chief?

MR. SCHULTZ:  As tempting as it is, I'm not going to take the bait and take a 2016 question.  But I appreciate the effort.

Q    Would such a trip -- are there risks involved in such a trip if a U.S. official goes abroad and says something that's off-kilter?  Mitt Romney, for example, when he went as a Republican nominee, made several missteps.

MR. SCHULTZ:  I remember that trip.  (Laughter.)  But I'm going to let others judge the wisdom of those trips. 


Q    Is there an administration view on eliminating the tax-exempt status on big-money sports leagues like the NHL and the NFL?

MR. SCHULTZ:  If there is, I didn’t come prepared to share it.

Q    Could you get back to me on that?

MR. SCHULTZ:  I will, yes.


Q    Eric, thanks.  I want to ask about Jeremy Bird, who served as a national field director during the 2012 reelection campaign.  He is said to be actively working in Israel as part of a concerted effort against Prime Minister Netanyahu.  And I'm just curious, given all the friction between the administration right now and Jerusalem, how concerned are you with his activities right now?

MR. SCHULTZ:  Kevin, I haven't see those reports, but I will tell you that we feel very good about the relationship we have with Israel.  They are our closest ally in the Middle East.  The President talks to Prime Minister Netanyahu more than any other foreign leader.  They spoke, I believe, just a few weeks ago.  So that relationship is as solid as ever, and so I’m not going to have anything more for you.

Q    Would it be fair to say you would discourage other former administration either officials or those who have worked with the administration from engaging in such activity?

MR. SCHULTZ:  I have a lot on my plate.  Taking to task what former administration officials do once they leave the White House is not something I’m going to engage in right here.

Q    Let me ask you about the relationship, Eric, between the Pentagon and the White House.  There’s been some criticism about micromanagement, heavy handedness, the inability to sort of formulate a coherent plan given the second-guessing that happens often at 1600 Pennsylvania Avenue.  How would you characterize the relationship between the White House and the Pentagon?

MR. SCHULTZ:  It’s going to be helpful if you -- are there any specifics you're asking about?

Q    Well, specifically Leon Panetta, Robert Gates, and even more recently comments attributed off the record to others in very high and senior-level positions have been critical of micromanagement from the White House.

MR. SCHULTZ:  This is something we’ve discussed at length from here.  But we, of course, always deeply value and respect the input of our military leadership.  That's something that is placed at paramount value here at the White House and something that goes into every consideration the President makes as Commander-in-Chief. 

That said, the President is the Commander-in-Chief.  The friction with the Pentagon, I believe, those who have been covering this White House much longer than I’ve been working here will tell you that’s something that predates this administration.  So we believe we have good relationships with the military leaders, and most importantly the President has an open ear, and values their input around the table or over the telephone.

Q    Thank you.

Thank you.  Jared.

Q    Thanks, Eric.  You were talking about an all-of-the-above energy strategy earlier, and I just wanted to follow up.  Yesterday the House passed a bill about liquefied natural gas exports.  Does the White House have a reaction to that?

MR. SCHULTZ:  We think the bill is unnecessary.

Q    Why?

MR. SCHULTZ:  Because the Department of Energy has already taken steps to modernize the LNG export approval process and ensure applications are looked at efficiently and expeditiously.  So we believe the process is working well, and that bill is totally unnecessary.

Q    You don't think it’s unnecessary because any sale of LNG would actually be bogged down by bureaucratic red tape?

MR. SCHULTZ:  We actually think the process is working well, and I haven’t seen much evidence to the contrary.

Q    On the other side of the issue of natural gas, any reaction -- I know I asked Josh about this a couple weeks ago. The states like New York who have banned fracking of natural gas, the White House wants to push -- they want to drill on the southeast coast of the United States for oil.  What about states that are opting out of some of the all-of-the-above positions?

MR. SCHULTZ:  Well, as you know, Jared, I think as part of the DOI five-year plan that was released earlier this week, some areas were taken off the table, specifically in Alaska.  So we are open to working with stakeholders.  Again, the plan that was put forward by the Department of Interior is going to be subject to comment.  It’s subject to the public giving comments, but also specific stakeholders who have an area of expertise.  So we're open to that feedback, and we're going to be working through that moving forward.

Q    All right, but what does the White House think of -- that's the Interior’s position, but what does the White House think when states take themselves out of the equation?

MR. SCHULTZ:  We feel good about the list that Department of Interior has put forward.  I’m not here to speculate on a list that wasn’t put forward or other states that may or may not be speaking up on this.


Q    Thanks, Eric.  I also have a question about the YouTube interview.  The President said he hopes the Supreme Court comes to the right decision on pending litigations on marriage rights for same-sex couples.  What will the right decision look like?

MR. SCHULTZ:  I think that the President -- I think we can all guess.  The President believes in the pillar of equality.  The President believes that -- and he’s spoken out to this many times, but that marriage should be something that’s enjoyed by every man and every woman.

Q    And every man and every woman, does that mean a 50-state ruling striking down on all remaining state bans prohibiting same-sex marriage?

MR. SCHULTZ:  I am just not an expert on sort of what the actual details are pending before the court, so I'm going to leave it to the President to voice our view.

Q    Also in the interview, the President said a lot of nice things about same-sex couples, such as they’re good parents and they’re brothers and sisters.  He also referred to their lives as a “lifestyle choice.”  Does the President regret using that phrase?

MR. SCHULTZ:  I haven’t talked to the President about using that phrase.  But again, I think the President’s views on this are well known.

Q    But should we take away from that statement that the President thinks that being gay is a choice?

MR. SCHULTZ:  I don’t think so.


Q    Yes, thank you very much.  Yes, today Loretta Lynch was up on the Hill and she said today she believes illegal immigrants have an obligation to work, and that she said, regardless of how they came here, the obligation to work is one that’s shared by everyone in the country.  Does the President believe that people who are here unlawfully have an obligation and a right to work?

MR. SCHULTZ:  The President believes that as part of the immigration -- both the executive action that he announced, but also a pillar of the bipartisan bill that passed the Senate with both Democrats and Republicans and that was blocked by the House leadership from even coming up to a vote -- that that restores accountability, that those immigrants can come out of the shadows, join the workforce, and pay taxes and be held accountable.

Q    That law was never passed, you remember.  So does the President believe that people who are here unlawfully now have an obligation to work and compete for jobs against Americans -- unemployed Americans, young Americans, et cetera?  His Attorney General -- his prospective Attorney General believes this.  Does the President agree with Lynch on this, that people who are here unlawfully have an obligation to work?

MR. SCHULTZ:  I think the people who under the President’s executive action plan can now come out of the shadows, get a job and pay taxes --

Q    -- all people who are here unlawfully.  Does that mean they include the non -- do all 12 million have an obligation to work, or does the President have a disagreement with his nominee for the Attorney General?

MR. SCHULTZ:  I'm going to admit, I know that hearing is ongoing, so I haven’t had a chance to review that transcript before coming out here.  But we’ll see if we can get you something.

Q    --  answer back on that?

MR. SCHULTZ:  I will try my best.  Thank you, guys.

2:30 P.M. EST