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The White House
Office of the Press Secretary
For Immediate Release

Press Briefing by Press Secretary Robert Gibbs and Deputy Treasury Secretary Neal Wolin

See below for an answer to a question(marked with an asterisk) posed in the briefing that required follow up.

*On May 4, the Vice President chaired his monthly Cabinet-level meeting on Iraq.  Ambassador Hill and General Odierno briefed Principals on political and security developments via secure video teleconference and the Departments of Justice, State, and Homeland Security discussed Rule of Law programs in Iraq.  Participants included Defense Secretary Gates, Homeland Security Secretary Napolitano, UN Ambassador Rice, Admiral Mullen, General Petraeus, National Security Advisor Jones, Deputy National Security Advisor Donilon, State Deputy Secretaries Steinberg and Lew, Deputy Treasury Secretary Wolin, Deputy Attorney General Grindler, and representatives from OMB, the Departments of Energy and Commerce, the ODNI, and the CIA.

2:13 P.M. EDT

MR. GIBBS:  Good afternoon.  Shortly, the Senate is going to consider Senator Shelby’s amendment to weaken the President’s and Senator Dodd’s proposal for strong consumer protection in the financial regulatory bill.  I think you’ve all seen the President’s statement, and here to talk about that is Deputy Treasury Secretary Neal Wolin.


DEPUTY SECRETARY WOLIN:  Thank you, Robert.  Good afternoon, everyone.  The financial crisis has demonstrated beyond any question that our current approach to consumer financial protection has failed.  In the run-up to this crisis, millions of Americans were sold mortgages and other financial products that they couldn’t understand and could not afford.  Unfair and deceptive acts and practices in the consumer finance market have left Americans facing foreclosure and debts they cannot bear.  It left responsible community banks to compete with non-banks and other non-bank institutions in an unlevel playing field, often irresponsible and often unregulated competitors.

Through the market for mortgage-backed securities, bad practices in the consumer financial market put our entire system at risk.  And why is that?  Because the current system puts bank regulators in charge of protecting consumers.  It didn’t work, and there’s no likelihood that it could work.  There’s no focus, no accountability.

Today seven different regulators have some responsibility for consumer financial protection, but none is focused on consumer protection as their priority.  And to the extent that there is any focus on consumer protection, the focus is overwhelmingly on banks, not on many, many other thousands of non-bank financial operations -- payday lenders, check cashers, auto lenders, money transmitters, mortgage brokers, et cetera. 

This unaccountable fragmented system allows for bad practices to take place in the shadows of the marketplace and we have to put an end to this.

The President has been very clear about what real reform means in this area.  It means independence.  It means accountability.  It means the ability to write rules across the consumer financial marketplace, and it makes ensuring that banks and non-banks alike are held to the same consistent standard.

The Dodd legislation pending in the Senate right now does all of that.  The Republican alternative does none of it.  The Dodd bill creates a fully independent, fully accountable bureau.  The Republican alternative just picks an existing consumer office from one banking regulator and drops it into another bank regulator that would be totally subordinate to bank regulators.  As I said earlier, that hasn’t worked; it will not work.

The bureau in the Dodd bill has an independent ability to set clear rules of the road across the marketplace.  The Republican alternative leaves the bank regulators in charge of the consumer laws -- the same regulators who have shown none or little interest in implementing these laws properly over the last series of years.

The Dodd bill creates for the first time effective federal authority to adopt rules banning unfair or deceptive practices wherever they may occur.  The Republican alternative keeps in place huge legal obstacles that make it nearly impossible to ban unfair or deceptive practices by non-banks like mortgage brokers, payday lenders, auto lenders, et cetera, perpetuating an unfair advantage that these banks have over community banks, for example.

The Dodd bill creates a bureau that can ensure consistent enforcement of rules across all of this marketplace.  It can directly enforce against bigger banks, against mortgage companies, against payday lenders, against auto lenders, and other firms.  The Republican alternative gives the so-called consumer office virtually no enforcement authority.

I think in the end, and to sum it up, the Shelby amendment is actually worse than the status quo.  It keeps all of the flaws of today’s system.  It keeps banks regulators completely in charge of protecting American families.  It keeps a huge loophole for payday lenders, for auto lenders, for mortgage brokers, for check cashers, and for all the other lenders and financial businesses that compete with banks but don’t happen to be called banks.  And it actually undermines existing rules.

Let me just say this.  The Republican argument for leaving the bank regulators in charge of protecting consumers is that there is some conflict between consumer protection and the health of financial institutions.  We reject that argument out of hand.  There is no real conflict between safety and soundness of banks and other financial institutions on the one hand, and transparency and fairness for consumers on the other.  Strong protections are actually good for the banking system.  I think we’ve just learned that when you don’t have strong consumer protections, the banking system is very much at risk.

We saw yesterday that the Republicans have decided to join with the Democrats in the Senate in a constructive way on some issues.  But on consumer protection, which really is the issue that arguably sits at the heart of what everyday Americans care about and how they are dealt with by the financial system, the Republicans have continued to oppose serious efforts at reform.  I think two years after this financial crisis began, a crisis that was exacerbated by a lack of transparency, it’s time for us to ensure that we have comprehensive reform that includes these fundamental improvements in consumer protection that the President has put forward and that the Dodd bill in the Senate contains.

Thank you.

MR. GIBBS:  Jonathan.

Q    Can I ask you about the Sanders amendment and what you guys are doing to try to change it or possibly kill it on Fed audit?

DEPUTY SECRETARY WOLIN:  Well, let me say, John, at the start, we oppose the Sanders amendment in its current form.  We think that, as Senator Sanders does, that transparency of the Fed is critically important, but we also believe that it’s important that the Federal Reserve Board have independence.  We think that independence has served this country very well over a long period of time.  We think that countries that have had either the reality or the perception of political influence in their central banks have had real problems -- problems with respect to inflation, with respect to the cost and availability of credit, including to consumers and to small businesses.  It hasn’t worked out well where the question about whether the congress or the executive branch of various countries have interfered with or had the perception of interfering with their central bank.

So we will continue to work with Senator Sanders, Senator Dodd and others to make sure that we have appropriate transparency of the Fed.  We think that is important, but also that we make sure that we do not encroach on the independence of the central bank.

Q    Would you veto -- would the President veto this bill if the Sanders amendment is in there?

DEPUTY SECRETARY WOLIN:  As I said, John, we are continuing to work with Senator Sanders, Senator Dodd and others to make sure we can accomplish these twin objectives.  We think that we’ll move forward in those discussions before we get to any discussion about vetoes.

MR. GIBBS:  Julianna.  

Q    Would the President veto the bill if the Shelby amendment was in it?  And also where -- is there any room for the President when it comes to the CFPA?  Are there elements that he would accept, for example, it being housed in the FDIC as Shelby has proposed?

DEPUTY SECRETARY WOLIN:  I think the President has expressed his support for the Dodd approach; it very closely mirrors his own.  I think -- we don’t expect that the Shelby amendment will pass.  We think that there are enough senators who, like the President, are committed to making sure that this incredibly important piece of reform is appropriately addressed.  And so I think the question of veto is something that’s premature.

Q    What are the elements to it that the Dodd -- if the CFPA, as Dodd has proposed, is amended, are there elements that Shelby has proposed that the President would accept?

DEPUTY SECRETARY WOLIN:  Well, we’ll see what others put forward.  As I just tried to outline, I think the elements of the Shelby approach, the Republican alternative in the Senate, are things that really gut the strength of this piece of this important legislation with respect to independence, with respect to accountability, effective rule-writing, and then obviously the need for enforcement across this marketplace.

Yes, sir.

Q    Mr. Wolin, you said something very interesting.  You said --

MR. GIBBS:  Just one thing.  (Laughter.) 

Q    You said, “We do not think the Shelby amendment will pass,” and yet all day today I’ve been getting e-mails like from Americans United for Change, all these grassroot Democratic organizations, and you’re out here today making a big deal about a Shelby amendment that you don’t think will pass.  I’m wondering, why is that?

DEPUTY SECRETARY WOLIN:  Well, I think it’s because of the centrality of the consumer provisions in this legislation.  The President has been very clear from the beginning that this is something that’s enormously important; that’s really at the core of what caused the problems we got ourselves into.  And the solutions are really at the core of making -- providing rules of the road going forward that will work and be protective not just of consumers but ultimately, as I mentioned earlier, of the broader financial system.

So we want to make sure that we say clearly and loudly that the Republican amendment will not work on all of the various dimensions that I described.  And while it’s pending in front of the Senate, we think it’s important for us to express our view.

MR. GIBBS:  Jake.

Q    Just a couple follow-ups.  The President said that this -- he will not let amendments like this one, written by Wall Street lobbyists, pass for reform.  Specifically, if it’s part of the bill, will he veto it?

DEPUTY SECRETARY WOLIN:  I think, Jake, the same answer I gave before.

Q    You didn’t give an answer.  Is it a veto threat or not?

DEPUTY SECRETARY WOLIN:  I think it’s premature to talk about veto threats, Jake.  As I say, we don’t expect this amendment to succeed, and if it comes to that we’ll deal with it when that happens.

Q    Okay.  And then in terms of the Sanders amendment, Sanders says that -- and the amendment says that nothing shall be construed as interfering with monetary policy.  What they want to know is, who received the $2 trillion in Wall Street bailout funds?  Does the administration oppose letting the American people know and see who received every dime of the $2 trillion in bailout funds?

DEPUTY SECRETARY WOLIN:  It doesn’t.  And, again, we are for transparency.  We think that’s an incredibly important principle and one that, frankly, is well embedded in the Dodd approach and in the approach that the President has put forward.

What we want to make sure at the same time, though, is that the provision doesn’t, in sort of an unintended way or whatever, get in the -- into the area of monetary policy that encroaches on the central bank’s independence or has the perception of that.  Where that has happened in various places, it’s not been a pretty picture.

Q    Sanders said that that charge, that it would interfere with monetary policy, he called it bogus.

DEPUTY SECRETARY WOLIN:  Well, I think having a multiplicity of voices, Jake, being able to comment on the conduct of monetary policy already creates a bit of an issue.  The legislation does take down some barriers that have existed for some time now with respect to the GAO not getting into the middle of monetary policy.  That’s the kind of thing that we’re concerned about.

MR. GIBBS:  Jeff.

Q    Does the President support Senator Blanche Lincoln’s provision that would effectively force banks to spin off their swaps desks, or does he think that the Volcker rule is enough in that particular area?

DEPUTY SECRETARY WOLIN:  Well, you know, we’ve worked with Chairman Lincoln and Chairman Dodd on a very strong package of reforms in the derivatives area -- strong regulation of derivatives dealers, central clearing, transparency through exchange trading, and so forth.  We have not taken a position on this precise element.  But as the Secretary -- as Secretary Geithner has said, we do want to make sure that there aren’t -- there isn’t the unintended consequence of taking activities and pushing them off into the shadows.  That was an important part of what got us into this set of troubles and we want to make sure that we learn that lesson and don’t repeat it.

I think the last thing I would say is, in that regard, Sheila Bair has obviously written a strong letter raising some concerns.  We are very committed to strong derivatives provisions.  We’ve been working with Senator Lincoln and with Senator Dodd all along the way and we will continue to do so to make sure that that framework stays robust.

Q    Why are you not taking a position on that particular proposal?

DEPUTY SECRETARY WOLIN:  Well, you know, there are lots of different pieces of this and they -- it’s hard to sort of extract one in isolation.

Q    But this is a big one.  I mean, does the President support the idea of banks having to spin off their swaps desks or not?

DEPUTY SECRETARY WOLIN:  I don’t think is a binary question.  I think we want to make sure that we accomplish the goals that we set forward, which is to make sure that the dealers in these instruments are well regulated, well capitalized, well looked after, but also that there is transparency through exchange trading and so forth.  We also, though, want to make sure, as we’ve said now a number of times, that we don’t through what we’re doing here create a problem somewhere else.

And so as the various pieces come together, that’s something that we will continue to be attentive to.

MR. GIBBS:  Let me go to Chip and then --

Q    The President said that this bill with this amendment was written by Wall Street lobbyists.  What evidence is there that they actually wrote this?  The Republicans say that it’s the small business trade associations that are pushing hardest for this amendment.

DEPUTY SECRETARY WOLIN:  Well, no, Chip, I would say that there’s been an enormous amount of lobbying activity on these provisions.  I refer you to some of the things I said to the Chamber of Commerce a few weeks back.  There’s been I think a broad set of assertions made by big banks in particular, the Chamber of Commerce in addition, with respect to things in the consumer provisions of the President’s proposal and the Dodd language.  I think lobbyists have been chipping away, frankly, all the way through.  And this alternative, I think, reflects a lot of the themes that you’ve seen from them, from their trade associations, from the chamber and so forth.

MR. GIBBS:  George.

Q    Thank you.  How big a threat to the bill is the Republican demand for the strict preemption of state consumer laws?  And how confident are you of getting Senator Carper to share your view?

DEPUTY SECRETARY WOLIN:  Well, we’ll continue to work through that issue with Senator Carper and others.  We think it’s important that the national banks, with respect to matters that really interfere with their ability to do their business, ought to realize some preemption.  But we also think that it’s important for there to be strong consumer protections; that there be a strong set of federal rules with respect to consumer protection that would affect banks and non-banks.  And we think that if states want to protect their citizens against the kinds of consumer practices that have really caused an important piece of this crisis, they ought to be free to do so.

MR. GIBBS:  David, and then we’ll go back a little bit.

Q    Thanks, another amendment question.  What about the Brown-Kaufman amendment to cap the size of banks and put on hard leverage placements?  Is the administration supporting that or not?

DEPUTY SECRETARY WOLIN:  Well, we share Senator Brown and Senator Kaufman’s -- frankly other senators’ concerns about the riskiness of certain institutions.  I guess I would say that from our perspective, what’s really key about this is that the institutions be less risky, that they not pose threats to the broader system.  Size is one attribute with respect to risk, but there are other attributes.  The Dodd bill, as it stands, has important provisions that limit the size of financial institutions, that give regulators the capacity to break them apart when they see things that create risk to the entire system, but also contain a number of other provisions with respect to capital and leverage and so forth that are all in the aggregate meant to make sure that no institution can pose an outsize risk to the broader financial system.  And that, I think, is the approach that we have been working on and we’ll continue work with them on this.

Q    Does that mean you’re not supporting that amendment, per se?

DEPUTY SECRETARY WOLIN:  Well, I think it’s not -- we’ve been talking to them about the size constraints that we have in the bill that is pending now in the Senate and some of these other issues that I just discussed.  And we will continue along that vein.  But I think from our perspective, just size -- I mean there are a number of institutions that weren’t so big that caused an awful lot of damage to the financial system.  So Bear Stearns, the financial products division of AIG -- neither of them very big, Long-Term Capital Management -- size is not, I think, the single attribute that we feel should be focused on.

MR. GIBBS:  Thank you.

Q    Overall, are you optimistic or pessimistic you’ll get overall legislation?

DEPUTY SECRETARY WOLIN:  I’m optimistic, absolutely.  I think there’s a developing momentum, and I think we’re going to continue to move forward as we have.  Yesterday was a good day in terms of the resolution authority piece.  I think we will continue to move forward as that momentum continues to develop.

Q    Neal, before you go, could you just say what your -- I know Fannie and Freddie aren’t in this, but what are your plans for Fannie and Freddie?

DEPUTY SECRETARY WOLIN:  The Secretary has said a number of times now that this is an important issue, one that we will turn to and work our way through over the next year.  We have outlined -- he has outlined publicly in testimony on the Hill a series of principles that will guide our work in this area.  I think that it’s awfully important to make sure that the housing markets are stabilized, first and foremost, that we get financial reform as it’s currently pending in the Senate next.  And then obviously this is a very important critical set of issues that we will turn to with focus and seriousness and work through over the period ahead.

MR. GIBBS:  Yes, ma’am.

Q    A couple questions on the Times Square case.  In the President’s Afghanistan-Pakistan meeting earlier today, how much did Shahzad’s possible contacts in Pakistan come up?

MR. GIBBS:  Without getting into specifics, I will just simply say that John Brennan and others used the opportunity to discuss where we were with the President and those in the room.

Q    Has the Pakistani Taliban come up at all in the President’s meetings today and the past on Pakistan?  And has the administration’s information shown that this is a group that might be capable of an attack on the U.S.?

MR. GIBBS:  I will just say that in the hour and 15 minutes the President spent in that room it was a comprehensive discussion of all of our issues dealing with Afghanistan and Pakistan.  The President heard from Ambassador Eikenberry in getting an update on governance.  We spent more than -- probably about 20 or 25 minutes hearing from General McChrystal about the shaping that is going on right now as it relates to Kandahar.  So just suffice to say it was a comprehensive meeting on a whole host of those issues.

Q    And then one of the big holes in this case right now is still the idea, was Shahzad a lone wolf in this or was he connected to a foreign plot?  And the last real statement we had from the administration was Secretary Napolitano over the weekend saying that we thought he was a one-off.  Is that still the administration’s position?

MR. GIBBS:  Well, I think the administration’s position on the investigation is it a -- this is a rapidly developing ongoing investigation, and if there are developments that need to be made public they’ll likely be done so through the Department of Justice.

Q    But have you moved away from the idea of him being a one-off?

MR. GIBBS:  I’m not going to get into parsing where we are on -- and the Department of Justice is on an active investigation.

Yes, sir.

Q    Robert, is the administration pleased or satisfied with Pakistan’s cooperation on this investigation so far?

MR. GIBBS:  Yes.

Q    Second question.  The President said --

MR. GIBBS:  Let me just -- can we just -- let me make sure -- I want to -- one of the things I think if you look back over the course of 15 or 16 months of our administration, we have dramatically increased our partnership with Pakistan -- intense security cooperation, supporting Pakistan’s largest offensive against terrorism within borders -- within its borders in years, an offensive that was -- is focused not just on al Qaeda, but on the Pakistani Taliban as well.

Q    Switching topics, the President said a couple weeks ago to business leaders that once financial regulation was passed, that the administration would be shifting to climate change.  Then the Arizona law and immigration came up.  Last night he spoke about immigration at the Cinco de Mayo party and said he wanted to begin work on immigration this year.  Is the next big push after fin reg still going to be climate change?

MR. GIBBS:  Well, look, I think there are a whole host of things that the administration will work on.  I think we’re going to continue to make progress on creating an environment for job creation, right?  We’ve -- I think the House is likely to take up the home retrofitting, the Home Star legislation today, and we believe we’ll pass that. 

So there are a whole host of those issues -- the small business lending initiative also that has to be worked on.  I don’t doubt that the Senate will soon move to, as has been discussed, comprehensive energy legislation. 

I think what the President has said over the past several weeks on immigration is, as he said last night, we have to begin work on this.  But as I said here yesterday and as the President has said before, this is not going to pass without Republican support.  This is not going to pass without the people that have been involved in this effort in the years past pledging and showing their support right now.

So while we begin this effort to shape bipartisan comprehensive immigration reform legislation, its passage is going to be dependent upon whether or not we can find Republicans that are -- that have shared this viewpoint in the past are ready, willing and able to work on this legislation in the present.

Q    But is it right to draw any connection between what you’re saying and what the President said about immigration and --

MR. GIBBS:  Well, I hope it’s fairly analogous.  (Laughter.)  And so in that sense I would draw a largely direct connection.

Q    The end of my question is, “and climate change?”  Is that a signal that climate change in fact will be a bigger priority -- because it’s clearly something --

MR. GIBBS:  I will say this --

Q    -- that’s derailed Lindsey Graham’s support for it.  Is that --

MR. GIBBS:  Well, I will say this.  I think that while each is a priority, I don’t think I’m -- this is an earth-shattering comment to believe that the energy legislation is farther ahead of immigration legislation.  I think that is -- that’s simply a look at where we are in the construction -- legislative construction process.

Q    But that sense, whether it’s true or not, of a priority is something that has affected Lindsey Graham’s support.  So is that something that you’re addressing right now?

MR. GIBBS:  Well, I would say this about Senator Graham’s support.  We have worked with Senator Graham I think pretty well in this administration.  He’s been here a number of times to discuss a whole host of issues.  All we’ve done on Senator Graham -- with Senator Graham on energy and immigration reform is each and every thing he asked to do, right?  He came to the Oval Office, met with the President, and asked that the President, with Senator Schumer, support an outline that they were working for comprehensive immigration reform and asked that we seek additional Republican support through calling five senators.  We did each of those things.  I think we’ve done -- if I’m not mistaken, I think there was an energy meeting and an immigration meeting -- one on a Monday, one on a Tuesday. 

So I can’t speak for where Senator Graham is today.  I can simply speak for what he asked the President to do and what the President did to keep his word and his commitment.  I don’t -- again, I think we’ve made it -- I think there’s a lot of progress that has been made on energy legislation and I don’t think anybody -- Democrat, Republican, or independent, in Joe Lieberman’s case -- want to see that work and that commitment walked away from.


Q    Just a follow-up on that, the President has said that he wants it to be a bipartisan bill -- immigration reform.

MR. GIBBS:  Well, let me just be clear.  Again, in order to get through, it’s going to have to be.

Q    Right.

MR. GIBBS:  There’s -- that’s a math problem, not a perception problem.

Q    Democrats have been shopping around an immigration reform proposal in the absence of Lindsey Graham being partners with Schumer on this.  They haven’t been able to find a Republican yet the last time I checked to join them.

MR. GIBBS:  Therein lies the problem.

Q    How important is it to the President that the bill itself be one that can attract Republicans even if there are no Republican sponsors?

MR. GIBBS:  Again, it --

Q    Do you see what I’m driving at?  I mean, because there are some Republicans who say that the Democratic leadership in the Senate is just looking to use this as an issue to gin up and galvanize Democratic voters for the fall.  I’m not saying that that’s what the President is trying to do.

MR. GIBBS:  Yes, that’s -- I mean, I think the President’s involvement on this issue has been consistent throughout the years.  I would say -- whether or not you could get people to vote for something but not be a direct sponsor, I don’t -- that might be a tougher --

Q    Well, how do you make that equation though?  I mean, do you look at the 2007 legislation as a template?  Do you --

MR. GIBBS:  Look, I think there are certainly aspects of the legislation that was done throughout the period of ‘05 through ‘07.  I’d have to look specifically at -- I’ve not evaluated specifically what is in one and isn’t in the other sort of thing.  But, again, I would simply reiterate, Jake, that it’s not just a luxury in needing Republican support and sponsors -- it’s a necessity.  And unless or until we get to that point, it’s going to be hard to enact overall comprehensive reform.

Q    Just to follow up on a couple other things, Neal Wolin talked about Fannie and Freddie reform being something that the President wants to do.  Is there a timeline for that?  Is there any pressing need?  Obviously there was some news from Freddie yesterday that couldn’t have been heartening to the President.

MR. GIBBS:  But I think something we -- that was largely believed to be expected.  I wouldn’t add much, since he’s the Deputy Secretary of the Treasury, to what Neal said and what Secretary Geithner have over the past few months outlined.  The President reiterated to the economic team on either Monday or Tuesday -- I forget exactly which day we were in the Oval -- that this was something that had to be pursued as part of the full panoply of financial reform, even as we ensure, as Neal said, stability in the housing market.

Q    And lastly, Senators Lieberman and Scott Brown, as well as Congressmen Altmire and Dent, introduced a law today that would allow the State Department to designate anyone who the State Department believes is providing material support or resources to a foreign terrorist organization, to strip that person of their citizenship if they are a U.S. citizen.  Does the administration have a position on this bill?

MR. GIBBS:  I have not heard anybody inside the administration that’s been supportive of that idea.

Q    Does that mean the administration opposes it?

MR. GIBBS:  I have not heard anybody that supports it at all.

Q    Do you want the press release?

MR. GIBBS:  No, I got Google, too.

Q    Okay.

MR. GIBBS:  Go ahead.

Q    After the last Afghan -- AfPak meeting, there was a sense from the White House of optimism, that a lot of progress was being made on the ground.  What was the tone today in terms of what’s going on in Afghanistan?

MR. GIBBS:  Well, look, I think the phrase that General McChrystal specifically used was that progress has been slow but steady.  I anticipate that that is likely what we’ll see for the remainder of the year. 

A couple of -- as we do in all of these meetings, they went through where we are in building an Afghan national security force, both -- which is comprised of an Afghan national army and an Afghan national police -- both of which were ever so slightly ahead of the goals, and that the force flow of our additional troops moving into Afghanistan was on pace, which is obviously something that has been of great concern to the President.

Q    And in terms of -- in the wake of the attempted bombing at Times Square, has intelligence picked up any additional increased activity from various terrorist groups?  Are they seeing anything more?

MR. GIBBS:  I’m not going get into what intelligence officials are picking up.

Q    British elections -- will the White House be paying close attention to that tonight?  And any thought given to how that could impact the special relationship that --

MR. GIBBS:  I don’t think the outcome will impact any measure of the special relationship.  (Interruption.)  Is that just in my head or do you all hear that?

Q    It’s just in your head.  (Laughter.) 

MR. GIBBS:  Happens to me all the time, Chip.

Q    Instructions from outer space.

MR. GIBBS:  Right when I just can’t quite get the station locked in.  (Laughter.)  I don’t think that will impact at all that special relationship.  I think we will certainly be watching what happens and I anticipate that the President will at an appropriate time reach out to --

Q    The winner.  (Laughter.) 

MR. GIBBS:  Yes, it’s -- reach out to the British government, how about that?  Let’s -- I think we’re all sort of watching the -- what might be an interesting result.

Q    You said that General McChrystal said progress is slow but steady.  Is the President satisfied with the pace of progress?

MR. GIBBS:  Thus far, yes.

Q    He did not express any frustration or impatience at how things are going?

MR. GIBBS:  I think that the President was under no illusions that what we have been involved in for many, many years in Afghanistan is going to take some time.  There are a whole host of issues -- not just military -- but issues surrounding governance that we’re working through, so I think slow and steady is largely to be what’s expected.

Q    Does he believe that they are still on pace to keep -- to start bringing troops out as he has scheduled?

MR. GIBBS:  Yes -- nothing that was discussed that would change what the President outlined in December.

Q    There was a fairly alarming piece by Ahmed Rashid -- I don’t know if you saw it, an op-ed piece in the Post a couple of days ago where he said that North Waziristan now, of all the provinces in western Pakistan, that’s the one that’s the least touched by Pakistani forces and U.S. forces and that it is now such a hotbed of terrorist activity and terrorist training that it is worse than Afghanistan was before 9/11.  And Ahmed Rashid is a very respected writer, author --

MR. GIBBS:  I think --

Q    Was that discussed in the meeting today?  And is that something that people in this administration agree with?  Is it that bad?

MR. GIBBS:  Yes, it was not -- the specific region was not, as I recall, brought up in great detail today.  Suffice to say that many regions in Pakistan have been the focus of our cooperative work with Pakistan, the government of Pakistan for the length of our administration, understanding that we have a threat that continues from that region of the world.

Q    I know this is probably pointless but I’ll do it anyway -- Supreme Court.

MR. GIBBS:  Supreme Court -- all right, I was waiting.  How many questions did that take?

Q    Yes, well, anything?  (Laughter.)

MR. GIBBS:  You go about 16 blocks and you hang a right, and you --

Q    You mean you can’t go in the front?

MR. GIBBS:  I know.  I know. 

Q    Is tomorrow a possibility?

MR. GIBBS:  Every day is a possibility.

Q    Today is a possibility?

Q    We have to change your frequency.  (Laughter.)

MR. GIBBS:  I would say -- that was good.  I would say less today given the time that’s elapsed. 

Q    The weekend? 

Q    Let’s just say Monday.

Q    The weekend?

Q    You’re not ruling it out?

MR. GIBBS:  Every day is a possibility.  I hear the static coming back.

Q    You won’t rule out this week?

MR. GIBBS:  I’m not going to rule out -- I’m not going to rule out anything. 

Q    It could be happening right now, for all we know.

MR. GIBBS:  You didn’t know?  That would be quite the diversion, wouldn’t it?

Q    Is Vice President Biden’s attendance mandatory at the announcement?


Q    Would the administration consider --

MR. GIBBS:  It would still be a big deal.  (Laughter.)

Q    What kind of deal?  (Laughter.)

Q    A very big deal.

MR. GIBBS:  How loud is the static?  That’s -- go ahead.

Q    Why would be a big deal?

MR. GIBBS:  Nice try.  Go ahead.

Q    Would the administration consider reinstating what was at the time an emergency provision to stop for secondary screening people from 14 countries?  I know that you sent a note in the briefing that addressed why you think these new measures are superior.

MR. GIBBS:  More comprehensive and, quite frankly, superior given the best information that we have from counterterrorism officials.  As I talked about yesterday, we’ve got a degraded command and control structure -- upper command and control structure in al Qaeda that has moved them to less sophisticated planning around different events.  They don’t -- they fit a whole host of different profiles that geography alone may not alert you to.  So the development of what was announced post the 14 specific countries takes into account the evolving geographic nature of the threat.

Q    In the case of Shahzad are you confident that these new measures would have stopped him for secondary screening?

MR. GIBBS:  Yes.

Q    When is the administration going to name a new TSA administrator?

MR. GIBBS:  I don’t have anything on that.

Q    Would you consider it a priority?  We haven’t had a permanent TSA administrator since January of 2009.

MR. GIBBS:  Absolutely -- it is.  And our improvements in airline safety have -- and in screening are important to our overall increase in domestic defense against a possible terror attack.

Q    Does it take on great urgency given the events of the last week --

MR. GIBBS:  Again, I think -- I think every day it’s an important position.


Q    New job numbers coming out tomorrow.  I’m sure -- I expect the President will have something to say about that.  Going to Buffalo on Thursday.

MR. GIBBS:  Yes.

Q    Do you feel like -- does the President feel like his message on jobs and on economic focus is getting through, or that it’s just being swamped by oil spills and terrorism and everything else that keeps cropping up?

MR. GIBBS:  Well, we did a little of this yesterday.  First and foremost, I think the American people -- as you heard Neal say -- most of the American people’s intersection with this financial crisis has been through aspects that would be better regulated with a consumer -- something that looks after the consumer -- the protection of consumers financially.  So I don’t think that -- I think what’s going on on the floor now is very emblematic of an economic agenda.  I don’t think those are -- I don’t think that’s different than something else.

As I said earlier, the House is likely to take up and pass an aspect of the President’s proposal even as both houses work on a small business lending issue.  As you mentioned, we’re getting new jobs numbers tomorrow, and we’ll be able to evaluate where we are on the road to further economic recovery.

At the same time, Jonathan, you can’t -- the President has to be able to walk, chew gum, juggle and ride a unicycle all at the same time.  You don’t have the luxury of just doing -- or focusing on one thing, and that’s what the President has had to do, quite frankly, throughout the whole of his administration.

Q    Robert, can I just follow up?  Apparently the Dow is dropping 1,000; the European markets have stopped lending.  Do you have any response?

MR. GIBBS:  I -- first I’ve --

Q    It’s news to you?

MR. GIBBS:  First I’ve -- I don’t -- my producer did not hand me a --

Q    Well, mine did, and --

MR. GIBBS:  I will -- no, I understand, I will --

Q    Can you talk more generally about the crisis in Greece?

MR. GIBBS:  Yes.  All I want to say is obviously the President has heard regularly from his economic team -- from Secretary Geithner, from Director Summers; been in frequent communications, as they have been, with European counterparts.  The Treasury is monitoring the situation closely.  The reforms that are needed to be enacted in Greece are important and will take some time.  And we will continue to monitor that.  I will see if there’s anything specific as it relates to that when I get back.

Q    On that?

MR. GIBBS:  Yes, sir.

Q    If I could, the leaders of the House Republican Conference have objected to U.S. participation in the IMF loan for Greece.  I presume the President supports it.  Tell me why he feels it’s needed.

MR. GIBBS:  Yes, let me get something more specific on that for you.  I don’t -- I have not seen the House conferences --

Q    They sent a letter to Geithner basically characterizing it as a taxpayer bailout of Greece, though the U.S., of course, doesn’t provide all the funds for the IMF loan.

MR. GIBBS:  Let me find something else out for you guys on that.

Q    Robert?

MR. GIBBS:  Yes, sir.

Q    Can we now say that the President’s interviews with candidates for the High Court are over?

MR. GIBBS:  I’ve not been told that, no.

Q    You haven’t?


Q    All right.  On his remarks yesterday in the Rose Garden, does he object as strongly to the modified Arizona immigration law as he did to the original one?  It sounded yesterday like he was talking about the original law and changes, modifications have been made in it.

MR. GIBBS:  I can check with those folks here and at Justice, but I know of no change in our belief as originally stated by the President.

Q    Well, my understanding is under the modified law, police just can’t go up to somebody they suspect of being an illegal immigrant, but they can only ask about it if they’ve stopped that individual for a different -- for a legal purpose.

MR. GIBBS:  I can check.  

Q    Sneaking a stoplight or something like that?

MR. GIBBS:  I don’t know whether -- I don’t know the degree to which that changes things, to be 100 percent honest with you, but I’ll check.

Q    Okay.

MR. GIBBS:  Julianna.

Q    Is the President having separate briefings on the Greek debt crisis?  Or is it part of the daily economic briefing?

MR. GIBBS:  Generally has been -- I will double-check on this, but generally the updates that he has gotten have been a part of the economic daily briefing.  Obviously there have been a couple of calls -- one on Sunday to the Greeks, and one, I believe it was the last week with Chancellor Merkel, that obviously involved some separate meetings.

Q    Did he talk directly to Greek leaders?

Q    Wait, what was the Sunday call?

MR. GIBBS:  That -- yes, I believe there was a -- I’ll send you the readout.

Q    Do you know if he was updated this morning in his daily --

MR. GIBBS:  You know, I didn’t go to the 10:00 a.m. meeting, but I will -- I presume that it came up.  It had come up in earlier staff meetings.

Q    And then also just more broadly when it comes to regulatory reform, the President publicly and advisors even in private meetings have told the big banks to call off their lobbyists, wanting them to stop watering down provisions of the legislation.  Is there any sense that that message has gotten through at all?  Or do you see the big banks cooperating any more?

MR. GIBBS:  I think there have been some banks that have stated their support for financial reform.  There are others that continue to -- through both their personal actions and the actions of their exceedingly large group of well-paid lobbyists that continue, as you heard Neal talk about, continue to try to water down reform on behalf of the American people.

The President has been very clear about the principles that he sees that are tremendously important in ensuring strong rules of the road going forward to make sure nothing happens like this again.

Q    Would you like to say who those other banks are that have been --

MR. GIBBS:  I think many of them know who they are. 

Yes, sir.

Q    Does the President agree with Chancellor Merkel that dealing with the -- the future of Europe really is at stake in dealing with the Greek crisis that --

MR. GIBBS:  I have not heard the President talk about that specifically.  As I said here earlier, several weeks ago in the beginning of this, this was an important thing for the Europeans to work through. 

Yes, sir.

Q    Just a little further on this.  Vice President Biden spoke to the European parliament this morning but spent very little time on the economic crisis.  Why has the White House seemed to be so reluctant to speak out more forcefully about what Europe should be doing about Greece and with Portugal and Spain and Ireland waiting in the wings?

MR. GIBBS:  Well, again, I would point you to -- we’ve done everything that those in Europe have sought Secretary Geithner and others, including the President, to do on this.

Q    Just another subject, today’s AfPak meeting, how much time was spent on President Karzai’s visit next week and who weighed in on that?

MR. GIBBS:  We talked a little bit about that.  Let’s see -- look, a whole host of -- as many of you would expect, Secretary of State Clinton, General Jones, General Lute, Ambassador Eikenberry -- I’m trying to go through the room now -- Ambassador Holbrooke -- I would say those are some that talked about the -- President Karzai’s upcoming visit.

Q    Robert, could you address the administration’s view of the extent to which the United States is vulnerable to a debt contagion spinning out from the European Union?

MR. GIBBS:  Let me get somebody from Treasury who will have a more technical answer.  The viewpoint that I have heard in many of these meetings is that anything that we believe has the ability to affect the global economic recovery is and should be a concern to this country.  That’s why, as I said a minute ago, the President and officials here have done all that’s been asked of them in responding.

Q    And on the AfPak meeting as well, was there any discussion at all of Iraq and its efforts, ongoing efforts to put a government together that would allow the United States forces to draw down?

MR. GIBBS:  Not specifically this morning in the meeting.  Let me get back and see if there’s a -- if there was an Iraq meeting over the past few days.*

Q    Robert, can I ask you, on the oil spill and the economic impact of it, I realize it’s not going to be reflected in the jobs numbers tomorrow but is there a concern that in the subsequent months that you’re going to have a quantifiable impact from the loss of business there?

MR. GIBBS:  The discussions that I saw on Sunday, the briefing with Thad Allen, with the President, at that point -- and again, I caution that -- I understand it’s Thursday and that was Sunday -- was that they believed that they had a manageable plan for how to deal with the potential impact on shipping lanes in particular. 

Obviously I think you all understand that the SBA administrator I think today outlined -- well, I know today -- outlined a program for providing assistance to those that -- largely fishermen that as a result of the spill and the closures that have been involved that have -- that it will greatly impact their business at an important time for their livelihood.

I have not heard or seen a larger report on, as you said, what that may mean weeks and months down the road.


Q    In the last few seconds while you’ve been talking, the Dow really dipped down below 10,000 for a second.  Is the President -- is there anything he can tell Americans to not worry that the overall economy isn’t going to be shaken by the situation in Greece or --

MR. GIBBS:  Again, let me -- give me the -- let me go find out -- you guys have -- I’m going to start bringing my computer.

Q    You’ve got -- right there.

MR. GIBBS:  No, no, no, these little things just say “The White House” and you click on them and they go to a blank screen and then it goes back to “The White House.”  (Laughter.)  This is -- no, this isn’t --

Q    How much did it cost?

MR. GIBBS:  -- this doesn’t do a thing.

Q    You need Bloomberg, you need a Bloomberg --

MR. GIBBS:  Do what?

Q    It’s rather dramatic.

MR. GIBBS:  No, no, no, I’m not doubting it is, you just have to understand that I -- while they appear to be television screens, they’re largely unhelpful.

Q    You think the President will address this?

MR. GIBBS:  I don’t know, let me go find out.

Q    I just have two questions, one to follow up on Scott’s question about AfPak and Karzai coming.  The last time the President met with him, he kind of read him the riot act.  What’s the -- going to be the tone of this meeting or is it any different than last time?

MR. GIBBS:  Well, no, look, I think that I would broadly define the role that each of these two individuals is going to be play is we are -- we have a partnership with Afghanistan.  We have -- the President has tripled our forces in that country to deal with al Qaeda and its extremist allies.  President Karzai in his inaugural and then later at the London conference outlined a series of reforms that he believe and that we believe are necessary.  We will laud him for the actions that he takes that are positive steps in implementing the reforms that he’s outlined, and we will work with them to ensure they make progress on those that are harder to do.

Q    It doesn’t sound like anything has changed since the last -- in your estimation since the last time they met.

MR. GIBBS:  No, I don’t -- I think there have been very positive developments in the elections commission, particularly in the one or two days right after the visit, that demonstrate that reform progress has and is being made.

Q    Just on immigration, you were saying before, and obviously it’s true as a practical matter, this thing can’t go forward without Republican support that you don’t have right now.  A lot of immigration activists are asking, why not treat this like financial reform?  You guys went ahead -- you went through two or three I think cloture votes.  I mean, in other words, it didn’t stop you when you didn’t have Republicans aboard for financial reform.  You went ahead anyway.  Why isn’t immigration reform similar?

MR. GIBBS:  Because there’s not enough support to move forward, Mara.  There’s just -- I mean, go back and look at the votes in 2006 and 2007, and go look at who voted in what way, and go ask those guys and gals where they are on this bill.  I don’t think you’ll have to make many calls to figure out that the people on the Republican side that supported this proposal three or four years ago -- if they’re supporting it, it’s muted support.

Q    When immigration supporters say why isn’t this like financial reform, the answer is because you actually like secret Republican support for financial reform and you just had to go through the --

MR. GIBBS:  I got to tell you I don’t understand -- I don’t really understand the analogy.

Q    Well, because you called the Republicans’ bluff on that, you didn’t wait to get them onboard before you brought it to the --

MR. GIBBS:  Well, again, I just -- I think that in order to get something -- I think it has been clear through four and five years of votes, Mara, that you’re going to have a hefty number of Republicans, because we all know there are some that aren’t going to support this on our side.  But the truth of this is there’s not the support that there was in 2007 on the Republican side.  That’s a math -- well, maybe it’s a political thing, but it’s definitely a math thing.

Q    Robert, in his speech at the University of Michigan, the President talked about the need to tone down the rhetoric, something we’ve obviously heard him mention several times before.  How do you square that with his statement today on the Republican alternative, which, as Chip mentioned, accused Republicans of having lobbyists write their bill?  I mean, that’s pretty harsh rhetoric itself, isn’t it?

MR. GIBBS:  I would -- I’ll send you the clip from the Republicans calling the lobbyists up to Capitol Hill in order to kill the financial reform bill.  I don’t -- if that was something that was embarrassing, I think that might have been embarrassing on their part a long time ago.

I don’t think you’ll have to do much to find hefty examples of many individuals either asking for political contributions based on the legislation that the President and Senator Dodd have proposed, or in calling legions of lobbyists to offices on Capitol Hill in order to kill financial reform.  I think the votes are going to line up with those that want to see progress on behalf of the people of this country, and those who want to see reform installed on behalf of Wall Street and the big banks.

Q    On the Times Square attack for a moment, if there are suspects identified in Pakistan, would those people be brought to New York and tried?

MR. GIBBS:  I would need to get some clarity on that.  I think -- I don’t know the individual circumstances that might determine such a thing.

Q    And can you say at the moment if there have been any direct links tied between people in Pakistan and this incident?

MR. GIBBS:  Not anything I’m going to get into at this point.

Q    And could I just ask one other quick question?

MR. GIBBS:  Sure.

Q    Is the President looking at going to Israel any time this year?

MR. GIBBS:  I don’t have the foreign travel with me, but I could certainly check.


Q    Thank you.  Back on the AfPak meeting, is President Karzai’s meeting definitely going to happen next week, or is this still remotely in doubt?  And did any of the --

MR. GIBBS:  No, no, it’s happening.  His visit is scheduled for next week.

Q    Okay.  And are any of the --

Q    What day?   

MR. GIBBS:  I think -- he’s here a host of days.  I think the President meets on Wednesday, if I’m not mistaken.

Q    The 12th.

MR. GIBBS:  Yes.

Q    So were any of the advisors in today’s meeting advocating against that meeting going forward?


Q    And finally, the last time President Karzai was here he came out with the President but there was not an opportunity to ask him questions.  Do you know whether they intend to do joint questions and answers?

MR. GIBBS:  It is on a list to talk to folks about today, but I don’t have an answer on it.

Q    Many of us might be interested in asking him a question, for what it’s worth.

MR. GIBBS:  For what it’s worth, I will check.


Q    Thanks, Robert.  In Jonathan Alter’s new book, the President is quoted as using a vulgar term to describe the Tea Party movement.  Is the quote accurate, and does the President --

MR. GIBBS:  I have -- I barely have enough time to read my briefing books, and what I have -- I have -- no offense to Jonathan, but I have not read his book.


Q    But you’d only have to read one word to answer his question.  (Laughter.)

MR. GIBBS:  Chip, you go buy me Jonathan’s book so that he gets the royalty --

Q    Deal, deal.

MR. GIBBS:  -- and I will be glad to read the word.


Q    You haven’t heard about this, though?

Q    So is the answer then that you don’t know?

MR. GIBBS:  The answer is I haven’t read the book.


Q    Robert, on one issue -- on two issues, one on the Gulf of Mexico situation.  Has anyone in this White House -- I’m going back to a question that I originally asked you when you had that briefing with all the principals on it -- has anyone in the administration worked with any of the oil companies in trying to work on the prices that are expected to rise?  Also, has anyone within the administration talked to the fisheries, talked to many of the people who have produce or are dealing with produce down there and marine life that we eat on the table?  I mean, has anyone dealt with that, tried to keep the price down as this economy is still --

MR. GIBBS:  I will check on -- this was a little bit of where Mark was heading, in a sense, on sort of the comprehensive environmental -- or economic impact.  I mean, obviously the President met with local fishermen.  SBA is down there offering loans -- low-interest loans to small businesses that are affected by the spill.

I will say that the way I understood it and the way it was described to me, this is a -- this is an exploratory well.  The BP Deepwater Horizon well was an exploratory rather than a production well, so the oil to be extracted from this was not planned on -- that was not planned to go online immediately.  So I would say that it’s not a -- it’s not as if a series or amount of oil is being taken out of the planned production of BP.

Q    But during that press conference -- and you were the one who said this -- that the President was advised that there would be oil that could possibly be in the way of shipping.  It would stand in the way of shipping.

MR. GIBBS:  And I talked about that with Mark.  The Sunday briefing that we got from Admiral Allen, which I think that you guys probably saw the video, there was a projection screen with mapping that had, at that point, where the oil spill had spread to, and went through a whole host of -- there’s many shipping lanes in that area -- to get into the port of New Orleans and ultimately up the Mississippi.  I will check again on the economics of shipping and seafood.

Q    And lastly, on the issue of Haiti, everyone is dealing with emergent issues right now.  We haven’t heard this White House talk that much about Haiti.  We understand recently that the President signed into law a debt forgiveness for Haiti.  But is the President at all thinking still about going to Haiti, and is the President getting any kind of still a daily update on progress reports in Haiti and also the fact that military units are leaving Haiti?

MR. GIBBS:  I don’t know that the President gets a daily update on that.  Obviously the First Lady was there not too recently.  We have -- obviously the footprint involved for the President of the United States to go, we believe, would hinder the -- have always believed that would hinder efforts at relief and recovery.  So there are not to my knowledge any plans to do so.


Q    Thanks, Robert.  I have two quick questions.  But first, are you able to get an answer on Fred’s question about the tea-bagger quote, if the President is aware that people are offended and --

MR. GIBBS:  Again, I’ve not seen the book.  I can’t imagine I’m going to ask the President that.  But I will entertain it.

Q    (Inaudible.)

MR. GIBBS:  I will check.

Q    And my first question is, there’s been a lot of talk lately about the lack of presidential news conferences, notwithstanding the nuclear summit.

MR. GIBBS:  Notwithstanding the last one?

Q    Right.  Well, it’s been suggested that rather than having formal news conferences, that the President maybe pick a day at random during the month to come down here and brief us the way you do.  What would you think about a plan like that?  (Laughter.)

MR. GIBBS:  There are about 10,000 answers beaming through my head, none of which I think would be -- I will -- again, I appreciate the notion that, except for the last time that the President did that -- I think the President -- I think the President has got a pretty remarkably busy schedule that he’s working through right now.

You had one more?

Q    Yes, one more.  The Neil Cavuto thing -- notwithstanding, again, the fact that what Michael Brown said was only slightly less crazy than what you said he said --

MR. GIBBS:  Yes, I will say this -- can I say this to Neil?  I was -- I apparently had the wrong FOX show.  There were two references on “FOX & Friends” to the deliberate nature of the spill being set.  Sometimes --

Q    That wasn’t Brown, it was somebody else?

MR. GIBBS:  Yes.  Sometimes I get it all mixed up.

Q    Thanks, Robert.

MR. GIBBS:  Thanks, guys.  Sam, I’ll go with you -- you’ve had your hand up.

Q    Thank you.  It’s a 10-part question.  (Laughter.)  Two questions.  One is, you talked to Jake about -- that you hadn’t heard anyone inside the administration that’s supportive of Senator Lieberman’s proposal to strip citizenship.  Why aren’t they supportive?  Can you get into this a little bit?

MR. GIBBS:  I don’t think that -- I have not heard large enumerations on why, except that I don’t think anybody would find that to be such an effective way.  I will try to get a better explanation as to why no one supports it.  Like I said, I’ve noticed Democrats and Republicans alike express concern about the legislation.

Q    And then the second one is, Chuck Schumer has an interesting proposal to the state of Arizona to put their immigration law on hold for a year so that a federal law can be enacted.  What do you think of the idea?

MR. GIBBS:  Well, I will say this, that I think you’ve heard the President say, and I have said certainly in this room, that without a comprehensive federal law, Arizona and 49 other states could well enact a myriad of different proposals for an issue that can and should be dealt with at the federal level.  That’s why the President has begun the work that he has and hopes that we have Republican support to address this in a comprehensive way.  It’s something that -- it is something that, if we don’t address this at the federal level, is simply going to create a 50-state patchwork of immigration laws.

Q    But he wasn’t -- you don’t want to call for a momentary delay in implementation?

MR. GIBBS:  I have -- I saw a story on what Senator Schumer had -- I think I saw a copy of the letter.  I have not talked with immigration officials on that yet.

Thanks, guys.

Q    Thank you.

3:14 P.M. EDT