For Immediate Release
Office of the Press Secretary
January 30, 2007
Press Gaggle by Tony Fratto and Al Hubbard
Aboard Air Force One
En Route Peoria, Illinois
Tony Fratto, Deputy Press Secretary
Al Hubbard, Assistant to the President for Economic Policy and Director, National Economic Council
9:46 A.M. EST
MR. FRATTO: Hi guys. We have the President's National Economic Advisor, Al Hubbard, here with us today. I'm going to run through a few things. Let me just tell you a little bit about the President's day. He had his normal briefings this morning. On the airplane with us is Congressman Ray LaHood. We'll be visiting his district today, in Peoria.
Something that wasn't on the schedule that went out -- I think you may have it -- but our first stop is going to be a visit with business leaders, breakfast meeting with business leaders in Peoria. It will be an opportunity for the President to spend some time talking to some of the local business leaders in the community and getting their sense of how the economy and the region is going there. And then of course we go the Caterpillar plant for a tour, and the President will make remarks to Caterpillar employees, and then we'll head back.
I'm going to ask Al Hubbard to give us a rundown of some of the themes the President will be discussing today, and maybe tomorrow, and then we can come back to questions after.
DIRECTOR HUBBARD: Thanks, Tony. Obviously, he'll be highlighting how strong this economy is, how truly remarkable it is, given the challenges that we've faced over the last six years, starting with 9/11, and then the recession, and Katrina, and the war in Iraq. And despite that, this economy continues to expand and be very strong, unemployment at 4.5 percent. We've created over 7 million jobs since 2003, and there's nothing to suggest that we won't continue to have a strong and prosperous economy.
The President is going to be talking about what needs to be done to ensure that we continue our growth. Obviously, keeping the taxes low and making his tax cuts permanent are extremely important to that; continuing to support free trade policies. Caterpillar is a great example of how the American worker can compete with anyone on a level playing field. Caterpillar is enormously successful -- over half the products they manufacture are actually exported.
And every time we have a new free trade agreement with a country like Chile or Australia, the sales of Caterpillar dramatically improve. That's why the President is committed to continuing to expand our trade agreements and support the Doha Round and the Doha agreement.
He'll also be talking about the major initiatives that he discussed in his State of the Union -- health care reform, which is so important to America, to American businesses, most importantly to all Americans. The cost of health care has been growing at an unsustainable pace. It is too expensive. And the President has some, as you all know, very important reforms that would have a major impact on accessibility of health care, affordability of health care, especially for the uninsured.
One little detail that I think I'd like to make clear about our health care proposal: It helps every single working American, even those who don't pay federal income taxes, because everyone would get the opportunity to deduct on their payroll taxes, as well as their income taxes. So for someone buying individual insurance who does not pay federal income taxes, they would get an $1,125 tax credit, or a reduction in their payroll taxes if they bought single coverage. They'd get at $2,250 deduction if they bought family coverage. And that's for people who do not pay federal income taxes, because the President's proposal allows individuals who purchase health insurance to get the same deductions as people who get their health insurance from their employers.
He's also going to be talking about the importance of energy, and reducing our dependence on foreign sources of energy, and his commitment to reducing our dependence on gasoline by 20 percent within the next 10 years, which is very ambitious, but we believe that the ingenuity and the commitment of the American people will make that happen.
He will continue to talk about the importance of education, and he'll talk about that today at Caterpillar, because there's no question the inequality between the skilled and unskilled, in terms of compensation, has been growing over the last 25 years. The most important determinant of one's wages is one's education, and that's why the President is committed to No Child Left Behind, which is working. He's committed to having it, what do you call it in Congress, reauthorized, because what's important is that we dramatically increase the number of high school graduates who are prepared for college, and we do that by improving our K through 12 education system. And that's what the President is committed to.
Q Is the CEO of Caterpillar going to be there today?
DIRECTOR HUBBARD: Yes.
Q He's been -- he was part of that industry group that came out for carbon caps a week or two ago. Why is the administration not following the lead of industry on the issue of addressing carbon dioxide emissions?
DIRECTOR HUBBARD: Well, I think the President has talked about the importance of global warming and climate, and the policies that he's promoted, in terms of alternative fuel, will have a dramatic impact on CO2 emissions. And within 10 years, assuming we meet our goals, we will stop the growth of CO2 emissions from automobiles.
Q You talked about energy independence, and part of that being ethanol. And the President is also going to talk about free trade today. What's the rationale for imposing a tariff on imported ethanol? And why would the administration not lift that, if those are two things that the President aspires to?
DIRECTOR HUBBARD: Well, as you know, ethanol receives a -- my numbers may not be perfect here -- $0.51 per gallon subsidy, and I think there's a $0.54 per gallon import duty, and those offset one another. So there's a reason behind the import duty, and the President's position is, that's in law right now, and we see no reason to change that.
Q No reason to change the import tax on ethanol?
DIRECTOR HUBBARD: It's set to expire in 2009, and at that point in time we think it's appropriate for Congress to revisit that.
Q Can you talk about how this speech will differ from tomorrow's speech?
DIRECTOR HUBBARD: Well, he's going to be using talking points today, and tomorrow really it's a formal state of the economy, where he's going to talk about where the economy is, the condition of the economy, what's made us successful, and most importantly, what's important to ensure that we continue to be successful.
Q Are new initiatives going to be unveiled today, and/or tomorrow?
DIRECTOR HUBBARD: I'll leave that up to the President.
Q Are you encouraged or discouraged by the latest talks about restarting the Doha Round of trade talks? Is the President going to mention that today?
DIRECTOR HUBBARD: Listen, the President mentions that every chance he gets, just like he mentions entitlements every chance he gets, because those are two initiatives that are so important to him, because he thinks they are so important to the country. We are -- feel more optimistic. We made a very, very bold proposal in October of '05, and we continue to -- Susan Schwab representing the U.S. -- continues to lean forward to work with our trading partners to work for an agreement. We are waiting for them to meet us halfway, or not even halfway. And hopefully that's a signal that the Europeans are going to be more aggressive, like we are, in terms of negotiating the Doha Round.
Q Is the President going to call for a renewal of fast track authority today?
DIRECTOR HUBBARD: We'll leave that up to him.
Q What if Congress doesn't renew fast track?
DIRECTOR HUBBARD: Again, TPA, we all know, is extremely important -- TPA meaning Trade Promotion Authority, the fast track -- is very important to passing any trade bill. And so that's been critical during this administration, and it will be critical to future administrations.
Q What's your take on the minimum wage situation on Congress? Are the tax break coupling -- is that a deal breaker if that doesn't happen?
DIRECTOR HUBBARD: We think it's important -- raising the minimum wage will cost some jobs, and we think it's important to counter that with tax breaks that will replace those jobs, so it will have a no-net impact on the number of jobs in America. And what's most important to the American worker is opportunity for work.
Q Is there any negotiating room?
DIRECTOR HUBBARD: Congress is working on it. I'm confident Congress will make sure that -- and the Republicans will make certain that there are appropriate tax breaks in the bill.
Q What sort of changes in the labor provisions are you guys seeking in the already negotiated trade agreements with Peru and those countries?
DIRECTOR HUBBARD: I don't know the details, so I can't --
Q It's been mentioned in press reports that Henry Paulson is going to take on a high profile role in the Doha negotiations. Is that true?
DIRECTOR HUBBARD: Susan Schwab will continue to be our leader in the negotiations. At the same time, everyone in this administration is involved, committed, and trying to help Susan and reinforcing her positions with the foreign leaders with whom they meet. And Hank has been enormously helpful. Condi Rice is being enormously helpful -- obviously, Secretary Johanns, Secretary Gutierrez. So it's important that this is a team effort, but we're being led by Susan Schwab, and we'll continue to be led by Susan Schwab.
MR. FRATTO: Thank you.