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The White House
Office of the Press Secretary
For Immediate Release

Press Briefing by Press Secretary Josh Earnest, Deputy Press Secretary Jennifer Friedman, and CEA Chair Jason Furman

James S. Brady Press Briefing Room

11:47 A.M. EDT

MS. FRIEDMAN:  Good afternoon, everyone -- or morning -- as it is.  So before I turn this over to our esteemed CEA Chairman, Jason Furman, to talk about our eighth annual and final Economic Report of the President, I thought I'd take a couple minutes and just provide some context.  And so Jason and I will talk through the report a little bit and take a few of your questions.  And then we will turn it over to Josh to continue with our regularly scheduled programming.

So as we've discussed many times in this room, the incoming President campaigned on a very different approach than President Obama, so we don't need to rehash all of that here.  But one way to think about this final Economic Report is as a comprehensive scoreboard of the economic progress over the past eight years.  And so this breezy, 594-page report -- (laughter) -- that the Chairman is holding is based on facts and data, and it tells the story of the significant progress that we've seen and that can and should be used as a benchmark for future administrations.

So Jason will go into all this in greater detail, with some slides to follow, but a quick primer for all of you on how far we've come. 

First, when the President took office, as you know, we were losing nearly 800,000 jobs per month.  Now we've added an average of nearly 200,000 jobs per month for more than six years, which is the longest streak of total job growth on record. 

You’ll recall that in 2012 we had presidential candidates making campaign promises to get the unemployment rate below 6 percent by 2016.  Today we've far surpassed that, with the unemployment rate cut by more than half to 4.6 percent.  And meanwhile, middle-class incomes rose at the fastest rate on record last year, up $2,800 for the typical household.  The number of people in poverty fell by 3.5 million.  That's the largest one-year drop in the poverty rate since the 1960s.  And all the while the S&P 500 has tripled since the lows reached in March of 2009.

So you’ve all heard about the President’s approach to our economy,between growing from the middle out, building an economy that works for everyone.  You know that this has meant restoring higher tax rates on the wealthy so they pay more of their fair share.  It's meant a relentless focus on creating good jobs and raising wages.  It's meant taking concrete steps to make college more affordable for every college student and their families.  And it's meant a new cop on the beat in the Consumer Financial Protection Bureau, fighting to protect consumers from abuse and putting nearly $12 billion back in consumers’ pockets.

And so this report shows that that approach is working.  Now, I'll remind you there are number of policies that the President proposed that would have done even more, and while, historically, a number of these policies have enjoyed broad bipartisan support, in this Republican-led Congress they will instead go down in history as missed opportunities. 

Take, for example, expanding the Earned Income Tax Credit for childless workers, which would directly reduce hardship for more than 13 million low-income workers struggling to make ends meet.  Passing the Trans-Pacific Partnership would have boosted incomes by $131 billion, not to mention cementing America’s leadership in the Asia Pacific.  Raising the federal minimum wage to $12 an hour would have boosted wages for nearly 35 million workers, more than one in four working Americans, according to an analysis of the Economic Policy Institute. 

There are many more, but you get the point.  And so the final piece and context that I would urge you to consider, both today as you listen to this presentation, and going forward as you evaluate the next President, is that much of this progress is the result of the tough choices this President made early on, and he put this country ahead of politics and he faced serious political headwinds.

So take, for example, the auto industry rescue.  Clearly there was a lot of opposition to that at the time, and it ended up saving more than 1 million jobs.  And now the auto industry has added nearly 700,000 new jobs since 2009.  Domestic auto production has hit record highs.

He took swift action to stabilize our financial system while securing more than $1.4 trillion in support for our economy at a time when many were trying to turn stimulus into a dirty word.

So how did these decisions play out?  Republicans said the ACA and Wall Street reform would kills jobs.  But instead we've seen the longest streak of total job growth on record.  They said the President's climate and clean energy policies would drive up gas prices.  And instead we've seen low gas prices driven in part by increased domestic energy production.  They said raising taxes on the wealthy would crush our economy.  And instead the stock market is surging, profits are up, and incomes are rising across the board.

So this time, eight years ago, when the President took office, he was facing the worst economic crisis since the Great Depression.  And we weren’t talking about record streaks of job growth or the fastest income growth on record; we were teetering on the edge of abyss.  Now, that is a seriously far cry from the highly beneficial financial system and situation that this President-elect is inheriting.


So, at some point a few years from now, you'll be seeing some new faces at this podium who will outline for you all of what the Trump administration's economic strategy has been and the approach that they have taken.  You'll have an opportunity to evaluate the impact of their policies and rely on the same economic data and metrics that you see now to judge how their approach has worked.  And as you sit here in the future, in the seats that you assign yourselves -- (laughter) -- we urge you draw your conclusions based on data and facts, like the one in this year's Economic Report.

So with that long windup, I will turn it over to the Chairman to arm you with all the data to sound smart at your holiday parties and to evaluate the next administration. 

So, over to the Chairman.

MR. FURMAN:  Thank you, Jen.  Thanks all for coming here.  We're very proud of the 71st Economic Report of the President, the eighth in this administration, and -- I apologize to all of you -- the longest one ever.  But it took 594 pages to document both what's happened in the last eight years, but also to try to understand the direct role that the President's policies have played in what's happened. 

I understood there were going to be slides, but if somebody can advance them for me and go to the first slide.  It gets to what Jen said, and this is a point we've made many times before

-- that I remember sitting in the transition office eight years ago when we were losing hundreds of thousands of jobs a month.  At the time, the estimates actually underestimated what we subsequently learned to be 800,000 jobs per month.  And then we've seen since then a record streak of job creation with more than 15.5 million jobs created.

And it's all too easy to, in retrospect, see that as something inevitable and natural that just happened, but it was anything but.  As the next slide shows you, the shock that precipitated this job loss was much more severe than the shock that led to the Great Depression.  In the Great Depression, 2 percent of wealth was lost as a result of the crash in the stock market and the fall in home prices.  In this crisis, it was precipitated by an 18 percent loss of wealth because home ownership was much more widespread and house prices fell even more.

Economists have studied financial crises around the world, and they usually end up looking more like the Great Depression, with a prolonged decade of extremely high unemployment, of output not returning to its trend.  And, indeed, that's what we saw in the wake of this financial crisis in Europe and other countries around the world that still have not gotten back to where they were before the crisis. 

The United States has done much better than that historical benchmark, better than other countries around the world.  And that's because of a range of policies -- one of which I would highlight on the next slide, which is, within a month of taking office, on February 17, 2009, the President signed into law the Recovery Act.  That was the single-largest fiscal measure as a share of GDP ever done.  It was larger than any single fiscal measure to respond to the Great Depression. 

But what a lot of people realize is we didn’t finish there. After that, we did 12 subsequent pieces of fiscal legislation, including payroll tax cut, unemployment insurance, support for homeowners, investments infrastructure that together added up to those orange bands, which, along with the automatic stabilizers, was a larger fiscal response and a faster fiscal response than you saw in any of the other major economies in the world.  That complemented the monetary policy response.  The financial rescue, which, as Jen said, was not popular at the time, but we've gotten every dollar back and more that we put into the banks, and saved the financial system.  And then the auto rescue that prevented the loss, potentially, of a million manufacturing jobs not just in the auto industry, but the suppliers and associated.

The result of this, you see on the next slide, is that the unemployment rate has consistently fallen.  It's fallen at or faster than the rate that you've ever seen in any OECD country in the wake of a run-up of the unemployment rate of this nature.  It's consistently outpaced forecasts.  You see the forecast there that was made in the 2010 that thought we'd never get to a 5 percent unemployment rate, and we're now at 4.6 percent. 

This decline in the unemployment rate, as you see in the next slide, has followed the progression that you expect to see in the economy, which is, first, we got GDP growth in 2009, employment growth starting in 2010, and then, starting at about 2013, wage growth really picked up.  And it has grown at an 18 percent faster annual rate since 2012 than it did in the entire time from 1980 through 2007. 

And if you look at the next slide, you can see that for this business cycle as a whole, if you look as an economist would like to, from the peak of the business cycle to the present, or peak to peak for the past, wage growth has been faster than any business cycle on record.  Moreover, as we see in the next slide, is wage growth has been broadly enjoyed with very strong gains for the typical household.  As Jen said, that's the fastest gain ever recorded.  And then even stronger gains for households at the bottom of the income distribution.

As I said, a range of policies have contributed to this.  It didn’t automatically happen.  One of those policies is what you see on this next slide, which is that when the President called for a higher minimum wage in his State of the Union address at the beginning of 2013, it was part of a very deliberate strategy that he wanted Congress to raise the minimum wage, but also wanted states, cities, businesses to do it.  And if you look at that blue bar, that shows you the average value of the state and federal minimum, which has actually gone up, because 18 states and the District of Columbia and more than 50 municipalities have followed the President's call.  Unfortunately, the federal one has continued to be eroded by inflation.  And you could get that much more wage growth if that was raised.

Another policy that has been important and will be even more important in the coming years and decades is shown on the next slide, which is the large increase in investments in college education, which we document in one of the chapters of our report. 

In addition, as you see in the next slide, we have an entire chapter on inequality, and it documents the combination of the Affordable Care Act, cutting taxes for low-income families, especially low-income families with children, and raising taxes on those most able to afford it have resulted in a historic reduction in after-tax income inequality, the largest under any President on record, with data going back to 1960, and the largest investments in tackling inequality since the Great Society.  And as you saw, that’s paying dividends.

Finally, the report includes an extensive analysis of the Affordable Care Act.  As you see in the next slide -- and lots of people are familiar with the percentage of people without health insurance has gone done dramatically to below 10 percent for the first time on record.  But as the slide after this shows, this has really meant something to everyone, not just the people who didn’t have insurance.  People who had insurance get a range of protections like free prevention, coverage from preexisting conditions, and no lifetime and annual limits.  I’ve also seen a dramatic slowdown in premium growth, and if you count out-of-pocket costs, the slowdown has been even larger.

If you go to the last slide, I would conclude by saying that none of this was an accident.  You can draw a direct line between policies in areas that we haven’t had a chance to talk about here, like financial reform, climate change, macroeconomic policy, health care, education -- between not just the outcomes that we have seen to date but also putting the economy in a better position to have a more stable financial system, slower health cost growth, more competitive economy overall going forward.

MS. FRIEDMAN:  Great, thank you, Jason.  So we have time to take a few questions on this document here and then we’ll turn it over to Josh.


Q    I have two things.  The press was -- Janet Yellen said yesterday that you don’t need a big job program or tax cuts right now, with the labor market near full employment, and that additional debt spending could be an even bigger risk to the economy.  I’m wondering if you agree with that, and if you would encourage President-elect Trump, therefore, to steer away from some of the policies that you guys have advocated over the last eight years.  I’m also wondering, given where we are at the late stage of this business cycle, what you see the chances for a recession in the next four years is.

MR. FURMAN:  So in answer to your first question, the economy I think is almost all the way healed from the Great Recession.  These have really lasting consequences.  Most of the other countries affected by the global financial crisis are not healed to the degree that we are.  But our unemployment rate is back to where it was before the crisis; a lot of the other measures are.  I think there’s probably still some additional slack in terms of people working part-time, and in participation, but not a lot.

What I think our economy needs is more things that will increase our productivity over the medium and long-run and expand the potential of our economy.  So we have, as Jen noted in her introduction, proposed substantial infrastructure spending.  And last year, Congress did a down payment on that -- they did a five-year infrastructure bill that was a 5 percent increase in inflation-adjusted terms.  That was welcome and that’s helping.  That’s something we should do more of going forward. 

But it’s important when you do it, one, to make sure you’re getting actual net new infrastructure out of it, and two, that you’re not doing it at the expense of your medium and long-run deficit.  So the President also explained exactly how he’d pay for that increase in infrastructure.

So a policy like that, just in economics parlance, is something that we think of a little bit less on the demand side because we’re most of the way recovered, but something that would help us expand aggregate supply over time.

In terms of your second question, economists have studied this question, and the way they like to put it is that business cycles don’t die of old age -- which if you’re a person who’s older, you have a higher probability of mortality in that year than a person who’s younger.  That’s not true of the economy and business cycles.  If you look at where we are right now, 70 percent of our economy is consumer spending.  The real wage increases I showed you, the confidence that consumers have, the fact that they’re deleveraged means that we have a lot more potential in our economy going forward.  That, of course, does require continuing to have sensible and sound policies that have undergirded that economic strength.

Q    Let me ask you about inflation.  The Fed raised interest rates yesterday.  They’re proposing to raise it several times next year.  They seem to be looking over the horizon and seeing inflation.  Do you see inflation out there?

MR. FURMAN:  We have our final forecast in the Economic Report, so you can look up what we forecast inflation to be.  It was pretty similar to what the blue chip, which is gradually rising to what the Fed has said its target is, which is 2 percent for inflation as measured by the PCE.

But all the signs we have seen is almost exactly what you’d want to see, which is a process that’s been very gradual and consistent with the goals that policymakers have set out, again, unlike some other parts of the world, which are still worried even about deflation.  That’s a conversation we haven’t had in the United States, and we haven’t had for good reason, because of the economic policies we’ve had.

Q    A totally hypothetical -- if the new administration were to come in with bigger deficits, more deficit spending, borrowing, et cetera, is that more of a concern?

MR. FURMAN:  I think we have made progress on the deficit.  We’ve cut it from 10 percent to GDP to about 3 percent of GDP.  If you look over the medium and long run, it starts to creep back up again, which is why we’ve put out a budget that shows what you would do to continue to lower the deficit over the medium and long term, keep it on the path that we’ve already been on.  And I think it would be unwise to do something other than that.  The economy needs additional investments to help it grow, but those shouldn’t be coming at the expense of a large and costly reversing of the progress we’ve made on getting the deficit down.

Q    One of the biggest criticisms of Obamacare that’s used is the cost, and yet you said that you’re now seeing the lowest growth in premiums versus pre-Obamacare.  Could you go into that more?  And why is that message not more successful?

MR. FURMAN:  I think once people have read the chapter in here on health care, which is 105 pages, they’ll all fully appreciate this set of points.

Q    Nighttime reading.

MR. FURMAN:  All night long.  (Laughter.)  Pull an all-nighter and read it.  But just to give you the facts, if you look at health care prices, since the Affordable Care Act they’ve grown at the slowest pace health care prices have grown in over 50 years.  If you look at health care costs per enrollee, they have slowed dramatically in private insurance, Medicare and Medicaid.

If you look at insurance premiums, they’ve also slowed and are among the lowest growth we’ve ever seen there.  And if you include out-of-pocket costs, it is the case that deductibles have gone up -- they were going up before the Affordable Care Act -- that’s continued to happen, but people also now get free prevention and get health insurance plans that have out-of-pocket limits, which they didn’t use to have.  So you take all that into account, and out-of-pocket payments have actually -- the growth of those has slowed as well.

I think it’s certainly the case that the health system is not perfect.  People remain dissatisfied with all sorts of aspects of it.  And that is completely understandable, and that’s why there’s a lot more work that remains to be done.  But the health system is in much better shape in terms of both cost growth and all the measures we have of quality as well -- for example, hospital-acquired infections or readmissions have also come way down.  And you can draw -- and we do here -- a direct line between some of the reforms we’ve made in Medicare and some of the ways the private sector has mimicked and adopted those reforms to really improve the health system.

But, of course, people want it to continue to be better, and that’s why a lot more work remains to be done.

Q    I wanted to ask about productivity and what -- to kind of get an idea of your theory of why it’s slowed, and how big of a problem you think it is for the next administration, what it might mean for living standards going forward.

MR. FURMAN:  So I think you’re asking exactly the right question, and like every question, somewhere in this 594 pages is the answer.

On productivity, the first thing to understand is it’s been a global phenomenon.  You’ve seen productivity growth slow everywhere.  In fact, if you look at the G7 economies, the United States has had the fastest productivity growth of all of the G7 economies.  And that’s in part because a lot of the tremendous innovation that we’ve seen here -- whether it’s in the tech industry, mobile, computing, artificial intelligence, personalized medicines, advanced materials, or all the other things, some of which may continue to be adding to in possibly a bigger way productivity growth in the future.

The problem that a lot of the advanced economies have seen is a slowdown of capital accumulation.  A lot of that appears to be a fallout from the very deep recession, and something that you would expect to see in the wake of something like that.  And as  capital investment rebounds -- which historically it has after periods like this -- you’d expect to see some strengthening.  That being said, if you look at the underlying trends in the economy that require more work, certainly productivity is part of that, and that’s why we’ve done so much to put forward infrastructure, investments in science, expanding international trade as a way to raise productivity through agreements like the Trans-Pacific Partnership and the like.

Q    Thanks.  I just wanted to get you to describe growth as a percentage of GDP.  Would you call it robust?  Would you call it something less than that?  And are you satisfied with the rate of growth, especially given the extensive jobs growth that we’ve seen over the last eight years, and yet, as a percentage of GDP, I wouldn’t say it’s exactly overwhelming.  How would you describe it?

MR. FURMAN:  The United States has outpaced what you would expect after just a massive financial crisis of the type we went through just eight years ago -- outpaced some of the historical benchmarks, outpaced other countries around the world.  And, in particular, if you look where it matters most to people, which is the job market, the unemployment rate being 4.6 percent, more than 15 million jobs added, wages growing at the fastest pace they have of any expansion since the 1970s and growing even faster for people at the middle and the bottom than for those at the top, this is an economy that really is generating gains for American families.

Of course, a lot more work remains to be done.  Of course, we should be raising the minimum wage, making investments to raise productivity growth to do even better, but you’d be building on what I would describe as a very solid foundation.

Q    To push back just a bit.  As far as some communities doing better than others, in particular, wage growth among college graduates has certainly been on the rise -- we can go back to the 1970s -- but for those who are not college graduates, for those who have two-year degrees and less, frankly, their wages have been relatively stagnant.  I think you would at least acknowledge that, would you not?  And I guess the other part of this is, given all the great reporting that we just heard today and have heard consistently from Josh and others, the American people sort of didn’t feel that way back on November 8th.  Is there this disconnect because they’re not seeing it?  Is it because you're not explaining it properly?  Tell me where that is not syncing up based on what you just showed.

MR. FURMAN:  That was a lot of different questions in one.  I mean, I'd, first of all, say, no, I actually don't agree with your statement about wage stagnation.  If your statement is for many, many decades there was wage stagnation -- absolutely.  If you looked at that previous chart, from 1980 through 2007, wages grew at .1 of a percent per year for 27 years.  If you look at the last couple years, they’ve grown at nearly a percent and a half per year.  So you're growing at a much faster rate.

Now, that's not enough to make up for 27 sub-par years in a row -- or 27 sub-par years, on average.  So there’s a lot more work to dig out of a hole that was many decades in the making.  But I think it's indisputable that we're moving very much in the right direction and that you're seeing larger income gains for households at the tenth percentile or the 50th percentile than you are for households at the 90th percentile. 

So, again, that hasn’t made up for several decades of problems, but it's been a quite remarkable reversal -- the fastest income gains for the typical household ever recorded.

In terms of people feeling it, the data I look at on that is, are consumers confident?  Yes.  Are consumers spending money? That's one of the strongest parts of our economy.  People are essentially voting when they go into a store or when they decide whether to buy a house, and they’re voting yes and voting their confidence in the economy.

MS. FRIEDMAN:  Again, thank you and for this final report.

MR. EARNEST:  Good afternoon, everybody.  Before we get started, obviously I appreciate Jason and Jen offering up the presentation.  Today is a -- as you get towards the end of the administration, you have to start acknowledging some departures. And today is a special day in the briefing room, not just because it was Jen’s first time behind the podium, but it also is likely the last time that she’ll be attending a White House briefing in person -- at least with this administration.  She’ll be leaving the administration at the end of the year. 

Jen, over the course of her service to this President, has taken on a variety of difficult assignments -- and I don't just mean being my deputy.  She’s also served at the Department of Homeland Security, the Department of Health and Human Services, and the Department of Treasury.  She took on assignments at each of those agencies that they couldn't find anybody else to do because they didn’t have confidence in anybody else’s ability to handle it.  And so they brought on Jen to take on those challenges.  And in each case, and in each situation, she performed even better than people assumed that she would.

So to borrow some of the economic parlance that we've been hearing, I am certainly bullish about the prospects for Jen’s career when she leaves the White House.  But we all owe her a deep debt of gratitude for her performance and service to the country and to the administration.  And as somebody who spent five years serving as a deputy White House press Secretary, I can't think of anybody who has been more effective and taken on more responsibility in this role than Jen has.

So, Jen, thank you.  And we wish you well as you pursue other things.  (Applause.)

With that out of the way, Kathleen, do you want to kick us off here?

Q    Thanks, Josh.  And thanks to Jen for all your hard work. 

I want to just start with the latest reports on the Russia hacking story.  Has the White House been told that Vladimir Putin was personally involved in Russia's attempts to interfere with the election?

MR. EARNEST:  I do not have an additional intelligence assessment to share from the podium.  As we've seen in the last several days, there are officials in the intelligence community who apparently are calling all of you to anonymously share their thoughts and conclusions and opinions.

I think what is relevant to this point is to consider the statement that was made back on October 7th.  This was the statement that was issued by the intelligence community.  It reflected the unanimous opinion and conclusion of all 17 intelligence agencies.  And they reported publicly that Russia was engaged in malicious cyber activity to erode public confidence in our democracy.  They included another sentence that I believe is worth repeating, so let me just read it here.  That statement included in part:  "We believe, based on the scope and sensitivity of these efforts, that only Russia's senior-most officials could have authorized these activities."  That is the statement from the intelligence community that was made public on October 7th. 

At the risk of editorializing, when I read that statement for the first time in early October, I didn’t think it was particularly subtle.

Q    You didn’t think it was --

MR. EARNEST:  It was particularly subtle.

Q    Oh.  So are you confirming that the White House believes that Vladimir Putin was --

MR. EARNEST:  I've seen those reports.  I'm not in a position to confirm them.  I'd refer you to the intelligence community for their assessment.  But their assessment that they reported publicly on October 7th may give you some insight into what they may be thinking. 

Q    And since you mentioned some of the officials being willing to talk to the media, are you worried about leaks on this issue?

MR. EARNEST:  Well, listen, one of the challenges of any White House Press Secretary, regardless of which administration they're serving in, is that they have a responsibility of coming out here in public and answering questions from all of you, on camera and on the record.  Others are allowed to offer their opinion anonymously.  It's a free country, and that's certainly what people are, to some extent, allowed to do. 

In the past, you've heard me express some concern about that habit.  It's particularly concerning in those circumstances when people are sharing information that's classified or sensitive.  But this is not a new phenomenon.  It's one that previous press secretaries have held to deal with.  It's certainly something that's come up in the context of my tenure, and I suspect that future White House press secretaries will encounter the same thing.

Q    And then on a different topic.  We're hearing a little bit about how Donald Trump might -- and his daughter Ivanka -- might have something of a different arrangement in the White House, that she may move into the East Wing and be something approaching the -- take on some of the First Lady's role and also an advisory role.  I was wondering if you could talk a little bit about how the President and First Lady drew that line and sort of talk about how they arranged their sort of conversations on policy.

MR. EARNEST:  Look, Presidents throughout our history have, in part based on the structure of their family, put together a system that works for them and works for the country.  Obviously, when Secretary Clinton, for example, was First Lady, she had a hands-on role in some policymaking efforts here at the White House.  Other First Ladies, including Mrs. Obama, have refrained from engaging at that level on a lot of policymaking. 

But what we have seen from Mrs. Obama is an effort to focus on some priority areas that are near and dear to her heart.  And that includes offering support to military families, giving more girls in the United States and around the world access to quality educational opportunities, and, of course, encouraging Americans of all ages to have a healthy and active lifestyle.

She has pursued those initiatives because of her interest in them, personally.  She's also pursued the progress on those issues, because she believes that each of them is important to the country.  And Mrs. Obama has certainly established quite a legacy for the effective and strategic and impactful use of the attention and limelight that comes with serving as First Lady, and she has directed that to a lot of good use.  And I certainly wish the Trump family well as they figure out the best way to design a system where they can do the same.


Q    What kind of government information was compromised, if any, in the Yahoo! hack?  How concerned is the White House about the very large hack?  And how likely are we to see attribution provided by the government about who's responsible for that hack?

MR. EARNEST:  I can't speak from here to the potential scope of material that could be vulnerable or may have been exfiltrated.  What I can say is that the FBI is investigating this matter.  There was a previously reported breach that the FBI had previously indicated that they were investigating, and they're investigating this situation, as well.  So I'll let them speak to what they have found over the course of that investigation thus far. 

When it comes to attribution, the principle that our investigators and the President's national security team have applied is to ensure that it wouldn’t undermine the investigation to go public with some information about what we have learned about the investigation.  So, for example, we would want to be sure that before we indicate publicly who we believe or who the intelligence community has concluded is responsible for the breach we would want to make sure that revealing that information didn’t undermine the ability the investigators to learn more about what had happened. 

So that will be the chief criteria that will be used in determining how and whether the FBI should make public who they have concluded is responsible for this particular breach.  And that includes whether it's a state actor, a criminal organization, or some other entity.

Q    Switching topics, there have been some questions about the deployment of the THAAD anti-missile system.  Given the impeachment vote in South Korea and, of course, the upcoming change in administration here, I'm wondering if you have any update on whether it will deploy as planned, or whether there’s been a hold put on it.

MR. EARNEST:  I'm not aware of any change in plans for the deployment of this anti-ballistic missile battery in South Korea based on some of the political turmoil that we've seen in the Republic of Korea. 

Over the last couple of months, as some of this political situation has persisted, I've repeated our commitment to the strength of the alliance between the United States and South Korea.  And our two countries have been discussing for some time now the potential deployment of additional equipment and technology to South Korea that would ensure they can protect themselves from the missile threat that emanates from North Korea. 

And our commitment to the safety and security of the South Korean people has not changed.  It is a commitment that has persisted through transitions of the U.S. presidency.  It is a commitment that has persisted through transitions of the South Korean presidency.  And it’s our hope and expectation that the U.S. commitment to that alliance and support for the South Korean people, even as they face this menacing threat from North Korea, will not change, despite some of the changes in government that are slated for the months ahead.


Q    I’m wondering if you had any reaction to President Duterte saying that he used to personally prowl the streets on a motorcycle looking for a chance to kill criminals.

MR. EARNEST:  Those comments are deeply troubling and they certainly are at odds with the Philippine government’s stated commitment to due process and rule of law.

The United States continues to be concerned by the widespread reports of extrajudicial killings by or at the behest of government authorities in the Philippines.  The United States strongly supports the idea of a thorough, credible and transparent investigation into these reports. 

The United States stands with the people of the Philippines as they confront the drug problem that’s having a negative impact on the security situation in the country.  And the United States has provided significant security assistance to assist in the investigation of those crimes, and to assist the Filipino government in handling this threat to their security.

But we continue to believe it’s critically important that the government in the Philippines observe and even protect the basic universal human rights that are central to that democracy and ours.  And that’s an important principle and one that we believe is worth upholding.

Q    We’ve had a lot of conversations in different contexts in the last couple days about whether the U.S. should have done more when they see signs of trouble.  Your reaction so far to a range of comments from President Duterte has been sort of to condemn them or to express concern, but not to cut off U.S. support or change our sort of relationship.  What does he have to say or do to prompt some sort of official reaction from the U.S. beyond just expression of concern?

MR. EARNEST:  Well, Justin, what you have heard me say on a number of occasions now is that we often hear rhetoric from President Duterte or other senior officials in the government of the Philippines vowing to carry out radical changes in their policy of cooperating with or investing in the U.S.-Philippines alliance.  In almost every situation, that rhetoric has not been matched by action.  And so you’ve also heard me say in a variety of settings that we certainly are paying attention to the words and comments that are being expressed, but we’re paying more careful attention to the actions.

And that is certainly true in this case with regard to our relationship in the Philippines.  And that’s why the United States remains committed to working effectively with the government in the Philippines to advance our shared interests.  And that’s everything from the domestic security situation in the Philippines, including the drug trade.  It also relates to our support for their efforts to find a diplomatic resolution to some of the competing land claims in the South China Sea.  It also relates to some of the economic and cultural ties between the United States and the Philippines that extends back for multiple generations. 

So this is an important relationship and an important alliance, and one that we believe is worth investing in because it benefits not just the American people it also benefits the people of the Philippines as well.

Q    Kellyanne Conway was on TV this morning and said that it was “incredibly irresponsible” for you to have said that Donald Trump called for hacking by Russia, and the defense is that some of Mr. Trump’s supporters have said that he was joking at the time and was speaking after the hack had already occurred, so it’s not really relevant to the situation.  I’m wondering if you have a reaction to what she said about your comments.

MR. EARNEST:  Me?  (Laughter.)  I do have some comments; I don’t think you’d be surprised to hear that.  Hard to know where to start, but let me start with this. 

The primary defense -- well, first of all, it is just a fact -- you all have it on tape -- that the Republican nominee for President was encouraging Russia to hack his opponent because he believed that that would help his campaign.  That’s not a controversial statement.  I’m not trying to be argumentative, but I am trying to acknowledge a basic fact.  And all of you saw it. This is not in dispute.

Now, I recognize that the defense from the Trump campaign is that he was joking.  I don’t think anybody at the White House thinks it’s funny that an adversary of the United States engaged in malicious cyber activity to destabilize our democracy.  That’s not a joke.  Nobody at the White House thought it was a joke.  Nobody in the intelligence community thought it was a joke.  I’m not aware that any members of Congress in either party that was briefed on this matter multiple times dating back to the summer thought it was a joke.  Senator Rubio put out a comment shortly before the election indicating that he took it rather seriously. So I think that’s not a particularly persuasive defense that’s being mounted by the President-elect’s team.

I’ll say two other things about this.  I know that they also object to the idea, something that I said yesterday, that somehow -- I made the observation yesterday that Mr. Trump was obviously aware of the fact that Russia was engaged in malicious cyber activity and that that malicious cyber activity was having a negative impact on his opponent’s campaign and was boosting his. He’s not the only person that knew that.  That was something that was being widely reported and was evident to anybody who was reading the newspaper. 

I don't know exactly what source he was using.  He could have been relying on news reports.  Maybe somebody on Capitol Hill who had been briefed about this matter had informed him or his team about it.  It’s also possible that he consulted with one of his closest aides, Roger Stone, who back in July -- July 27th, to be precise -- tweeted “of course the Russians hacked @HillaryClinton’s email.”

So, again, I don't know if it was a staff meeting, or he had access to a briefing, or he was just basing his assessment on a large number of published reports, but Mr. Trump obviously knew that Russia was engaged in malicious cyber activity that was helping him and hurting Secretary Clinton’s campaign.  And again, these are all facts that are not in dispute.  This is not a situation where we are launching charges and countercharges, or I’m offering up my opinion and hoping that it will be considered more persuasive than the opinion that’s offered up by somebody else.  These are just facts. 

And I know that we’ve also heard from the President-elect’s team that they’re concerned that there’s some effort to delegitimize his presidency.  Well, I think President Obama has made clear, literally hours after the votes were tabulated and reported, that he and his team were committed to a smooth and effective transition to the Trump administration, and all of the available evidence about our actions since then indicates how seriously the Obama administration has fulfilled that responsibility that we have.  But there are others on the outside who are raising these questions, and apparently that is striking a nerve with the President-elect’s team. 

One way to deal with that is to start answering these questions, and not just relying on a defense suggesting that the rhetoric of the Republican nominee was a joke when nobody thought it was funny.  And there’s plenty of evidence to indicate he knew exactly what he was talking about.  It might be time to not attack the intelligence community, but actually be supportive of a thorough, transparent, rigorous, nonpolitical investigation into what exactly happened, and to cooperate with it, and to support it.

But they’re probably not that interested in advice from me, so -- but I don’t think I’m -- I guess I am biased in saying that is advice that I have to offer based on years of experience and I think it would serve them well to follow it.


Q    So just to be clear, when this malicious activity was detected, what did the White House do about it?  Anything?  You often say the statement was put out.

MR. EARNEST:  Well, this is a statement that we -- well, first of all, this was thoroughly investigated and this was included in The New York Times report that appeared a couple days ago that sort of went through in rigorous detail all of the work that was done to investigate these hacks and these breaches.  And the FBI, the Department of Homeland Security, a variety of intelligence agencies were all investigating to learn as much as they possibly could.  There were extensive briefings that were provided to Capitol Hill dating back to the summer, and there was an effort to learn as much as we could about what had happened. 

There also was an effort that was undertaken by experts at the Department of Homeland Security to fortify the elections administration’s equipment of states and cities and counties all across the country to make sure that they could defend themselves against potential Russian action that would manipulate the vote count or at least interfere with people’s ability to cast ballots.  That was a significant undertaking.  We had to go and work with local jurisdictions in all 50 states.

And we also tried to build strong political support on Capitol Hill among Democrats and Republicans to send a clear signal to Democrats and Republicans who were administering the elections that this isn’t a partisan effort.  And we did encounter some resistance from Republicans to our efforts to do that -- Senator McConnell in particular.

Q    Beyond reinforcing of the voting apparatus --

MR. EARNEST:  That’s not an insignificant proposition because that is central to our democracy.  And it is a lot of work because it’s not -- we don’t just go to one agency.  We have to go to agencies in 50 states in order to get that done -- some agencies that are skeptical and suspicious of the motives of the federal government.  But yet we did succeed in that.  And what the intelligence agencies concluded is that there was no increase in malicious cyber activity on the part of the Russians that did succeed on Election Day in preventing people from voting or preventing those votes from being accurately counted.

Q    But did the United States retaliate against Russia for this?

MR. EARNEST:  The President determined once the intelligence community had reached this assessment that a proportional response was appropriate.  But at this point, I don’t have anything to say about whether or not that response has been carried out or whether additional responses could be deployed.

Q    All right.  And that’s the question, is how can it be effective if, in fact, we don’t know whether it happened or not? Will the Russians know when it happened and that it happened?

MR. EARNEST:  Listen, Ron, I’m just not going to be in a position to talk about potential responses.  And I know that’s frustrating.  What I can tell you is that there may be an opportunity in the future where we can talk in more detail about what the responses is, has been, or will be. 

Q    But tell me how the response can be effective unless it’s -- if it’s not made public.

MR. EARNEST:  Well, that’s a difficult question to answer because the United States retains significant, extensive cyber capabilities that exceed the capabilities that are wielded by any other country in the world.  And to detail those cyber capabilities would be to potentially undermine our ability to use them.

So, unfortunately, that’s not something that I can discuss from here.  But there are a range of proportional responses that the President and his team believe would be an appropriate response.

Q    And just back to the statement of October about the highest levels of the Russian government being responsible for this -- was that intentionally worded to point a finger at Vladimir Putin?

MR. EARNEST:  This is a statement that was written by the intelligence community and the Department of Homeland Security, so you should ask them exactly what their intent was.  But my reading of it was that it was not intended to be subtle.  But that’s based on my reading of it.  You’d have to ask them what they --

Q    So it points a finger at Vladimir Putin.

MR. EARNEST:  Again, you’d have to ask them what their intent was.

Q    Is that your interpretation of this?

MR. EARNEST:  Well, I guess the reference to senior-most officials in Russia would lead me to conclude that, based on my personal reading and not based on any knowledge that I have that may be classified or otherwise, pretty obvious that they were referring to the senior-most government official in Russia.

Q    Last one.  The Russians say that this is laughable, this is nonsense that they did this, that their President was involved in any of this.  What’s your response to that?

MR. EARNEST:  I’m not surprised.


Q    I want to ask you about Planned Parenthood and the White House’s effort to ensure their funding.  And I’m curious if you could explain, in particular, for the Americans who are well aware of the fact that the federal government cannot legally fund abortions, with the exception of rape, incest or the endangerment of the life of the mother, why the President did what he did, and how did he go about doing it?  Without getting too much into the weeds on Title X.

MR. EARNEST:  Well, the Obama administration did implement a rule that essentially prevents the federal government from discriminating against specific service providers.  And again, I think this goes back to a principle that really should resonate with a lot of conservatives.  The Obama administration is suggesting that the federal government shouldn’t be getting in the way of people getting access to quality, affordable health insurance, or quality, affordable health care.  And Planned Parenthood is an organization that provides extensive health care services to men and women in communities, large and small, all across the country.  That’s just a fact.

What the Obama administration has also done is carefully followed the law to ensure that we are abiding by this longstanding rule that prevents federal funding of abortions, with the exceptions that you outlined.  And that is consistent with the law that’s on the books.  It’s also consistent with a principle that we have prioritized, which is that getting access to quality health care is not a privilege, it’s a right.  And we want to make it possible for as many people as possible to get access to that health care.  And that’s the idea behind this rule.

Q    But there are those, in particular in the states that feel like this is an egregious overreach by the administration, that feel like this should be a state’s issue that they can certainly handle without this added layer from the federal government.  What would you say to them?

MR. EARNEST:  I would say to that that we’re talking about federal funding and what the federal government can do with that federal funding.  And so this is actually empowering patients to make their own choices about their health care.  And that is a principle that conservatives -- that should really resonate with conservatives.  And I guess I’ll leave it to them to explain why it doesn’t.

Q    Last, I just want to -- a little bit far afield, but I was reading an interesting piece that accused the President of being so focused on creating the Iran nuclear deal that he in effect took his eye off the ball, or was less focused on other issues abroad, in particular the growing threat from Iran and perhaps even Russia.  What would you -- or rather Russia and China, I should say.  What would you say to critics who feel like the President was so dead-set on making history and propping up the Iran nuclear deal and pushing it over the finish line that he didn’t see, perhaps, or react as quickly to threats from Russia in particular.  We can use the cyber threat as just one example of that.

MR. EARNEST:  Well, I didn’t see the argument that was made in the piece that you’ve referenced, but I think, in general, what I would say is simply that the successful implementation of the international agreement to prevent Iran from obtaining a nuclear weapon was not just a major national security priority of the United States, it was a major national security priority of some of our closest allies and partners in the region and around the world.

Israel was deeply concerned about the prospect of Iran getting their hands on nuclear weapons.  Saudi Arabia and other counties in the Gulf were also deeply concerned about this prospect.  There were countries in Europe who are within range of some of Iran’s ballistic missile capabilities, were deeply concerned about the prospect that Iran could put one of those nuclear weapons on top of one of those ballistic missiles.  So preventing Iran from obtaining that nuclear weapon wasn’t just a priority of the President’s, it was a priority of the international community’s. 

And I would just point out that when President Obama took office, that was the case.  The international community was fractured in terms of trying to design a strategy that would successfully prevent them from getting a nuclear weapon.  So President Obama didn’t just have to identify the priority, he actually had to organize the international community to go and achieve it.  And that’s exactly what we’ve done.  And that is --

Q    Did it distract him, though, from the focus on Russia and China?  In particular, when you look at some of the things that happened -- Russia running off into Ukraine and whatnot, and China with the South China Sea.  Did it at least in part take his focus off those things?  Would you reject that notion?

MR. EARNEST:  I would utterly reject that notion as not being an accurate description of the situation.

Q    Okay, last one.  You looked like you were chopping at the bit when I asked Jason about why it didn’t seem to resonate, some of the great numbers that you all have been touting.  Month after month after month, we talked about job growth, and yet for some reason, at least among many of the working-class, they don’t feel that.  Did you sense that?  And if you did, where was the disconnect?  Was it a lack of messaging?  Was it a lack of understanding how great things are for them?  You tell me.

MR. EARNEST:  Well, listen, I think the reason that I reacted is I'm not sure there's much evidence to indicate that a lot of people supported Mr. Trump because they had more confidence in his economic policies than they did the President's.

Q    I wouldn’t make that connection.  I was suggesting that given what we hear here often, what seems to have been missing in terms of -- I mean, at least in theory you would say, hey, listen, the economy is going great, people should really -- that should really resonate with people and they should be ready to run up the hill and continue the policies.

MR. EARNEST:  Unless they were just voting on something else.  And I think that's my suggestion, is that they had other things that were influencing their decision about who to vote for.  And I think that's a testament to the strength of the economy that President Obama has presided over, and I think it's a testament to the strong public support that exists for the economic strategy that we have pursued.  And I'm not surprised that there's strong public support for our economic strategy because the benefits of our economic strategy are obvious and widely felt.

Steven.  Nice to see you.  Welcome to your new seat.

Q    Thank you.  Mark Knoller pointed out this morning that Barack Obama has never, before now, allowed a bill to become law without his signature.  So why did he not sign the Iran Sanctions Extension Act?  And were you aware?  The National Archives tells us it hasn’t happened since December of 1995.

MR. EARNEST:  It's been a long time.  It is -- well, let me go through some basics here, and then I'll explain the decision. We've been saying for quite some time that it is not necessary to extend the Iran Sanctions Act because the executive branch, the Obama administration retains all of the needed executive authority to implement sanctions against Iran.  We have the authority to waive those sanctions, which we did, in the context of the international agreement to prevent Iran from obtaining a nuclear weapon.  We have the ability to implement and ramp up sanctions against Iran for their destabilizing activity in the Middle East, for the development of their missile program, for their support for terrorism, for their lack of respect for basic human rights.  And we have used that authority even since the international agreement to prevent Iran from obtaining a nuclear weapon was implemented.

Because of our significant concern about some of those activities, we also have all the executive authority that we need to snap sanctions back into place if Iran violates the international agreement to prevent Iran from obtaining a nuclear weapon.  So we retain all of the authorities that we need to carry out this policy, and that is why we have said for more than a year that the extension of the Iran Sanctions Act was unnecessary. 

Now, at the same time, on the other side, a clean extension of the Iran Sanctions Act, like the one that landed on the President's desk, is consistent with our commitments under the international agreement to prevent Iran from obtaining a nuclear weapon.  That's an important point because the President was rather forward-leaning in making clear that he would veto any effort to undermine the nuclear deal.  This legislation does not undermine the nuclear deal.

So we find ourselves in a situation that I'm not sure that we've encountered in eight years, which is that the bill doesn’t meet the standard of something that we would veto, but it's also not something that the administration believes is necessary.  So the President made a decision to allow that bill to become law without his signature.

But I will say that this decision to allow the bill to become law without the President's signature is also part of a message that we're sending to Congress, and it's simply this:  If Congress does blow up the deal that prevents Iran from getting a nuclear weapon, they're going to have to deal with the consequences.  And the consequences are grave.  And we have seen irresponsible efforts on the part of some members of Congress to advocate for and to write up and submit pieces of legislation that would violate the deal, that would cause the deal to break up, that would, in all likelihood, prompt Iran to kick inspectors out of their country.  These are inspectors who right now are keeping closer tabs on the Iranian nuclear program than any other nuclear program in the world. 

What they would also precipitate by passing legislation that undermines the deal, it would cause the international coalition that we have built to shatter, and it would be very difficult for the United States to make the case to countries like India and China and Japan that they should help us enforce those sanctions. We would have a hard time convincing them to help us enforce those sanctions because the reason that the deal blew up is the fault of the United States Congress. 

So this is a -- President Obama is only in office here for another month.  And after that, Congress will have to deal with the consequences if they choose to pursue irresponsible legislation that would blow up the deal. 

Now, just to be crystal-clear about this, the Iran Sanctions Act is consistent with our commitments under the international agreement, and the President did not veto this bill because it does not undermine the deal.  But there's been plenty of rhetoric and plenty of legislative work done on legislation that would blow up the deal.  And this is a message that if the United States Congress blows up the deal that prevents Iran from obtaining a nuclear weapon, they will have to deal with the grave consequences that ensue.

So thank you for indulging me on the long answer.

Q    Tom Wheeler announcing his departure from the FCC the day that President Obama leaves office.  Is that the end of net neutrality?  What does it mean?

MR. EARNEST:  Well, listen, President Obama has been pleased by the service of Chairman Wheeler.  He runs an independent agency, so we are limited in how much we can say.  But the President appointed him to that job because he's somebody who's a good manager and knew those issues well, and certainly shared the President's approach, generally speaking, to dealing with some of these issues. 

And obviously the next President will have an opportunity to choose someone that shares his view of these issues.  And maybe the President-elect was meeting with one of them yesterday when he sat down with tech executives from all over the country.  Maybe one of them would be interested in taking this job.  We'll see. 


Q    China seems to have abandoned its pledge not to militarize features in the South China Sea, with aerial photography showing the deployment of anti-aircraft guns and other weapons systems.  I'm wondering if the administration has a response.

MR. EARNEST:  I've seen those reports, Andrew.  I cannot confirm them independently from here.  I think the most direct response comes from the joint declaration that was signed by all of the leaders of the ASEAN countries this past February at the summit that President Obama held in Sunnylands.  And that statement affirmed, “the shared commitment to maintain peace, security and stability in the region, ensuring maritime security and safety, including the rights of freedom of navigation and overflight and other lawful uses of the seas, and unimpeded lawful maritime commerce as described in the 1982 U.N.  Convention on the Law of the Sea" -- and this is the key part -- "as well as non-militarization and self-restraint in the conduct of activities." 

The United States has been very clear that we make no independent claims to the land features in the South China Sea.  It is our view that competing claims should be resolved not by might or through military action, but rather through diplomacy and negotiation.  And that's what we're encouraging all parties to do.  And we certainly, in pursuit of that goal, are encouraging all parties to refrain from the kinds of actions that would heighten this tension and risk military conflict, because our ultimate goal is a resolution through diplomacy and negotiations.  And the U.S. interest in this situation is in protecting the free flow of commerce and the freedom of navigation in this region of the world. 

Billions of dollars of commerce transits this region regularly, and disruption of that navigation could have a negative impact on the global economy.  And that, of course would have a negative impact on the U.S. economy, and that’s our chief interest here.

Q    A number of European countries have summoned the ambassadors of Russia and Iran over events in Syria.  Obviously there’s no Iranian ambassador, but does the administration plan to do the same, or has it done the same?

MR. EARNEST:  I’m not aware of a plan to do that, but if that’s something that happens, we’ll let you know.  Obviously U.S. diplomats have been in close touch with Russian diplomats not just over the last several days but over the last several months on this issue, and I know that just yesterday Secretary Kerry communicated in a phone conversation with Foreign Minister Lavrov.  So we don’t need to summon the Russia ambassador to the United States to make clear our deep concerns about the way that Russia has conducted themselves in Syria.

Q    And a final question.  A few days ago the U.S. introduced sanctions against some officials in the Democratic Republic of Congo over the delay of elections.  Bloomberg today had a report on pretty staggering levels of wealth and assets accumulated by Kabila and his family.  So I was wondering if those assets and individuals could be the target of sanctions should Kabila decide to stay in office against the constitution?

MR. EARNEST:  Andrew, just to make sure you get an accurate answer to your question, I’m going to refer you to Treasury Department for the details about the way that those sanctions are likely to be implemented.


Q    Is sounds like you have no dispute or quarrel with the information that has been put out there on saying that Vladimir Putin had a direct role in the hacking.

MR. EARNEST:  I think what I’m saying is there was -- that I don’t have new information to share from here, but there was an October 7th statement from the intelligence community that spoke pretty directly and, in my own personal opinion, quite unsubtly, to this question.

Q    Okay.  So -- but you’re not addressing whether those reports are accurate or whether you have a problem with the accuracy of any of those reports?

MR. EARNEST:  I’m not discussing the accuracy of those reports.  I’d refer you to the intelligence community for their own assessment.  They’re aware of the facts firsthand and they can try to describe to you exactly what their official view is of that circumstance.

Q    And let’s just say that in a situation like this, if there is the head of state directly involved in something of this level, would that change the proportional response that is formulated to respond to it?

MR. EARNEST:  Well, it’s difficult for me to talk about potential response options.  I think what I will say is, as the President and his team consider proportional responses, a wide variety of aspects of the situation will be considered.  Proportionality includes things like the impact and the sophistication of the attack -- the malicious activity.  So they’ll cast a wide net in considering exactly what happened and formulating an effective proportional response.

I would acknowledge -- which may be what you’re thinking, --that designing a proportional response seems inherently subjective, and I would acknowledge that that’s true.  But it means the President and the experts on his team using the best knowledge at their disposal and their knowledge of U.S. capabilities to determine what would be appropriate.

Q    Does it make it much more serious if the head of a state is involved in something like this than not?

MR. EARNEST:  Well, again, I think we’ve known for some time, since even before the election, that senior -most Russian officials were involved.  So the U.S. intelligence community recognized from the beginning how serious this was.

Q    Okay.  And you talked a couple of times this week about the cyber capabilities, but obviously they don’t prevent the hacking of an individual’s email, and all of that taken together, we’ve seen how it could potentially affect a presidential election.  You also tried to convey confidence a number of times leading up to the election and after in the system.  But if we see this happen -- like I think for many it’s hard to believe that we’re even talking about this right now, and then days later we have more word of another hack and an unprecedented hack.  So how can the American people have confidence in elections that follow if maybe the weakest link is going to be somebody’s Yahoo! or Gmail account?

MR. EARNEST:  Well, how our democracy responds to this situation is an important question, and a question that the President and his team is very focused on.  And I would expect that this is a question that the next administration will have to carefully consider as well.

As we stated in the -- as the intelligence community, just to be precise, stated back in October, the goal of this Russian effort was to erode public confidence in our democracy.  And that’s not an effort that can be countered solely in cyberspace. It raises questions about our democracy and about the kind of public debate that we have in this country.  It raises questions about how the media handles information that’s been the target of a hack and leak operation carried out by an American adversary.  It raises questions about how American voters view the news media and view the information that’s presented by the news media.  All these kinds of questions are raised.

The President retains substantial confidence in the durability of our democracy and in our system of government, and in the ability of news organizations like yours to respond to this challenge, but these are the kinds of questions that have to be asked.

Q    And I mean part of the debate and the harsh reactions leading up the election surrounded over the statement that the election was going to be rigged.  It was said in a much different context, but now we’re seeing this.  Does it seem to you like this election was rigged, except it was rigged by Russia?

MR. EARNEST:  Well, again, I feel the need to restate something I’ve said before, so just bear with me on this, which is that there was reason to be concerned on the part of the intelligence communities about Russia potentially attacking the election infrastructure of the country in cyberspace.  And that is why a focal point of our efforts through the summer and fall was to mobilize substantial federal resources and to work to build political support for a federal government effort to help cities, counties, and states defend their elections infrastructure from Russian hacking. 

And the good news is that the intelligence community has reported that they did not observe an increase in Russian malicious cyber activity on Election Day that interfered with the ability of anybody to cast a ballot or any election official to count it accurately.  So that is good news.  That didn’t happen by accident.  That was not a foregone conclusion back in early October.  That was not a foregone conclusion in early November.

Q    But we’re seeing that that may not matter, and maybe the definition of rigged kind of depends on how you’re looking at it.

MR. EARNEST:  Well, again, it would matter had the Russians hacked it.  So the reason I just keep going back to this is because it’s important to -- and this sort of goes to Ron’s question earlier about sort of what did the White House and the government do -- this was an effort that took place behind the scenes, and it had to, I think for obvious reasons, but we shouldn’t underestimate the outcome of that effort.

But you’re asking a somewhat different question that’s just as legitimate, which is, even if the Department of Homeland Security can mobilize all the resources and work effectively with state and local officials to protect our elections infrastructure, isn’t there still a vulnerability that exists when it comes to the way that the 300 million people who live in this country consume information?

And, look, I think that these are difficult questions.  And I think everybody has got a role here, particularly the news media, particularly citizens who are trying to inform themselves and want to be good consumers of information.  But news organizations have had to adapt to a changing news media environment driven by technology for more than a decade now.  So I retain confidence, I know the President continues to be confident, that if these questions are asked and the answers are carefully considered, that the U.S. system of democracy is durable and strong enough to withstand some of these changes and even withstand some of these threats.

Q    Related to this case, we’re seeing the selective release of information, we’re seeing reports that Vladimir Putin himself determined how that information was going to be released.

We’re seeing, as you termed it, a “surprise result” of the election.  So does the administration think that Russia has successfully rigged this election?

MR. EARNEST:  And, Michelle, what I’ve said about this in the past is still true, that there are a lot of political analysts who have cited a variety of reasons for the surprising outcome of the election.  And some of them say that Russia’s malicious cyber activity weighed heavily on the result; others discount it.  Others suggest that perhaps the public communication of FBI Director Jim Comey about his bureau’s investigation of Secretary Clinton’s email may have tilted the outcome.

There are others who have suggested that Secretary Clinton was a flawed candidate from the start who would never win.  Others have suggested that she didn’t pursue the right electoral strategy, that she focused on the wrong states.  Others have suggested that she should have had a stronger message.

Look, there are a variety of potential explanations, and that’s more of a question for analysts of politics than it is for analysts of intelligence. 


Q    Josh, one last question on Russian hacking.  Just to clarify, to get it on the record, was there a policy decision or even influence to not mention Putin’s name in that intelligence report?

MR. EARNEST:  Again, for the wording that’s included in the statement I’d refer you to the intelligence community.  It was written by them.

Q    Also, I wanted to ask about a tweet that President-elect Donald Trump said this morning, which was, if Russia or any entity was hacking, why did the White House wait so long to act and why did they only complain after Hillary Clinton?  I know you addressed that with Ron’s question, but with that criticism from a tweet, from Conway’s criticism of you, is this smooth transition, is it seeing a bump in the road here?  And what’s your comment about -- or reaction to that tweet from President-elect Donald Trump?

MR. EARNEST:  I think there’s just a simple fact that -- I guess I’m going to break with precedent here and actually respond to a tweet from the President-elect just by pointing to a simple fact, which is that there was a statement that was issued by the intelligence community on October 7th, a month before the election, warning that Russia was engaged in malicious cyber activity in an attempt to erode confidence in our democracy.  And it was obvious to everyone who was paying attention, including the gentleman whose thumbs authored that tweet, that the impact of that malicious activity benefitted the Trump campaign and hurt the Clinton campaign.  That is, after all, why the President-elect called on Russia to hack Secretary Clinton’s email.  That is presumably why the coverage of the hack-and-leak operation that Russia carried out was focused on emails from the Democratic Party and Clinton campaign staffers, and not the Republican Party and Trump campaign staffers.

It wasn’t a secret.  It’s obvious what the impact was.  There’s a separate question about intent, and there are anonymous figures in the intelligence community that are weighing in all over the place, and I’m not at liberty to do that from here.  We’re going to rely on intelligence assessments to try to get to the bottom of that if they can.

But it’s not -- the impact of this operation is not in doubt.  It’s not in doubt.  It benefitted the Trump campaign, and it hurt the Clinton campaign.  That’s why the Republican nominee was hoping they would do more of it.  That’s why his staffers were hoping that they would do more of it.  That is why in the days leading up to Election Day, the Republican nominee himself was encouraging people to check out WikiLeaks.  He thought it would help his campaign, and he knew that when people went to WikiLeaks they weren’t going to find damaging information about Steve Bannon or Reince Preibus or the RNC. 

In fact, there’s only evidence of one Republican being hacked and targeted by this hack-and-leak operation, and that one Republican was General Colin Powell, and the only information that was released was him being privately critical of Secretary Clinton.

So there’s no subtlety.  There’s no security clearance required to figure out what happened.

Q    One more.  The Trump team claims that the President of the United States cannot have any conflicts of interest by law.  Does the White House agree with that?  And what steps were taken for President Obama to avoid those potential conflicts, besides a blind trust?

MR. EARNEST:  Well, I know that there are a variety of ethical, legal experts in both parties that have raised profound concerns with that approach.  President Obama, when he took office, didn’t just vow to adhere to the letter of the ethics laws, he went above and beyond the letter of the ethics laws and actually converted all of his financial holdings to Treasury bonds.  And as I’ve pointed out earlier, that was a rather poor personal financial management decision because the Fed was aggressively slashing interest rates.

So President Obama lost a lot of money, but it was worth it because freeing himself of even the appearance of a personal financial conflict of interest was in the best interest of the country.  And the President has talked about how proud he is that his administration has not been buffeted by the kinds of personal ethical scandals that have plagued other administrations, particularly at the end of a second term.  And the President attributes part of that to the example that he set from the top about maintaining an extraordinarily high ethical standard, one that far exceeds even the letter and spirit of the law.

And that is an example that we’ve all tried to follow.  And the American people have benefitted from that and his administration has benefitted from that because we haven’t seen these kinds of distracting personal ethical scandals that would otherwise shake confidence in government.  And that’s a result of the example that was set by the person at the top.

Andrei.  Given all of the conversations about your country in here today, it seems only fair to give you an opportunity to ask a question.

Q    Josh, I cannot believe that we are having this conversation for weeks.

MR. EARNEST:  You and me both.  How about that?  We found something we can agree on.

Q    Live and learn.  You’ll never know what comes next.  So basically I have two.  One is a follow-up to Michelle's.  You do seem happy to talk about the leaks.  You do seem happy.  So my question is very simply:  Is the White House encouraging the leaks?

MR. EARNEST:  Of course not.

Q    Is the White House happy that the leaks are happening?

MR. EARNEST:  Of course not.  Andrei, I think there's only been one person who's tried to joke about this.  Unfortunately, that person is the President-elect of the United States.  This is an extraordinarily serious matter.  And I think that's why you've seen such extensive conversation about it in this room, and I think that's why you've seen such a robust response from the intelligence community to this matter.  And it's because it's extraordinarily serious.

Q    I wanted to follow up on that.  This is the essence of my bigger question, which is about President Obama's leadership. I think you'll like the premise of my question.  I've always thought that President Obama is an extremely intelligent and decent person, well-meaning person.  So my question is, after that, if we have that as a premise, how come he wanted the U.S.-Russian relations to be a win-win for both sides?  We are now in a situation, obviously, where it is a lose-lose.  No matter how we spin it, it's a lose-lose for both of us.  But this is not the only one.

America, in all the eight years, did not have one day where it was completely at peace.  There was one war or another, and not all of those wars were inherited by President Obama.  And he's a Nobel Peace prize winner.  He's like the first African American President, but the race relations in this country have become worse, not better -- worse.  You say some things are facts.  Those are allegations.  But I cannot say that it's a fact; it's an impression I have that they're worse.  But many people share this impression.  Then, hacking.  America is all of a sudden vulnerable to hacking after eight years of Obama leadership.  How come?  And, of course, the biggest of all is the result of the election.  The leadership has been rejected.  The preferred candidate has been rejected. 

So my question, to come to the question, is, who's at fault? Is it Russia that performed all of that?  Is it because of Russia that the voters in the U.S. rejected the leadership and the legacy?

MR. EARNEST:  Well, again, I disagree with your assessment about the outcome of the election, because I think there's ample evidence to indicate how strongly the American people feel about and support President Obama personally, and his legacy.  President Obama's poll ratings are higher than they've been in quite some time, and certainly exceed -- or at least in the range of, or exceed, every other recent outgoing President.  And I think that it is a pretty clear indication of how strongly the American people do feel about his leadership. 

When it comes to the question about whether or not Russia is at fault for the outcome of the election, that's not a question for intelligence analysts, that is a question for political analysts to evaluate why people voted the way that they did, and how -- and why the outcome was so unexpected.

Q    Josh, that's not my question.  The question was about the responsibility of the top executive in this country.  Does he feel any responsibility for all this?

MR. EARNEST:  When you say for all of this, can you be slightly more precise?

Q    For the wars, for the race relations, for the deterioration of relations with Russia.

MR. EARNEST:  Well, I disagree with your assessment of race relations.  With regard to wars, President Obama is quite proud of the efforts that we -- that the United States, in close concert with our allies around the world, with the steps that we have taken to strengthen our national security, to make the United States and our allies safer.  The United States has actually been effective and forceful in taking on ISIL.  It's actually Russia who has only had one operational gain on the ground inside of Syria, against ISIL, that has had that gain rolled back.  And, in fact, the threat posed by ISIL is now worse because of Russia's failed strategy inside of Syria, because ISIL didn’t just retake Palmyra, they retook Palmyra and all of the military equipment that the Assad regime, backed by Russia, had moved in there.

Q    You sound as if you welcome that. 

MR. EARNEST:  I don't welcome that at all.  I am gravely concerned about the danger that is now heightened because of Russia's failed strategy.  And according to what my colleagues at the Pentagon are now saying, it's now U.S. servicemembers, U.S. members of the military that are now going to have to go in and clean up the mess again that was created by Syria, with the backing of the Russians.  And when you consider the President's record overall, the fact of the matter is, when you consider what he inherited, when President Obama walked into office, there were 180,000 U.S. troops in Iraq and Afghanistan combined.  Today, America is safer, and there are only about 15,000 U.S. servicemembers in those two countries.  And that represents substantial progress in enhancing our national security but also moving America off a permanent war footing.

Q    And that's why we have the results of the election. 

MR. EARNEST:  Bob, I'll give you the last one.

Q    Thanks so much, Josh.  Given all the talk about Russian hacking, should the Electoral College voters take into account the influence of Russian hacking the distribution of emails in their voting, which is going to happen on Monday?  And do they have the constitutional right to do so?

MR. EARNEST:  Listen, I know that there are a number of electors who have spoken publicly, raising some concerns, some questions about how they should fulfill their constitutional obligations.  I think that's evidence of how serious many of these electors take their constitutional responsibilities.  But I'm not going to stand here and tell them how to vote, or stand here and tell them how to fulfill their constitutional responsibilities.  This is a responsibility that they've been entrusted with.  And there certainly is ample information about the election that has already been made public.  But ultimately it's up to the Electoral College to fulfill their basic constitutional responsibility.


Q    Josh, will there be a press conference tomorrow?

MR. EARNEST:  I anticipate that I will not be the one standing here tomorrow, but we'll be able to confirm that for you before the end of the day today. 

Thanks, everybody.  And if I don’t see you, happy holidays. 

1:20 P.M. EST