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For Immediate Release
Office of the Press Secretary
October 8, 2008
Press Briefing by Press Secretary Dana Perino
James S. Brady Press Briefing Room
11:45 A.M. EDT
MS. PERINO: A couple of announcements for you. This afternoon, Secretary Paulson will hold a press conference in advance of the meeting this Friday of the G7 finance ministers and central bank governors. It's at 3:00 p.m. Secretary Paulson will discuss the current coordinated actions amongst the G7 and other nations that they are taking to deal with stress in the global financial system. He will also discuss the -- sorry?
MS. PERINO: No, no, at Treasury. He will also discuss the actions being taken by the Treasury Department, the Federal Reserve, and the FDIC to implement the new authorities that were granted in the rescue package passed last week. He will focus on Treasury's coordinated actions with other federal regulators to use the tools to address the four key challenges in our financial markets today: confidence, capital, systemic risk, and liquidity. So that will be at 3:00 p.m. today.
Also this afternoon, President Bush will sign H.R. 7081. This is the United States-India Nuclear Cooperation Approval and Non-Proliferation Enhancement Act. The President looks forward to signing this bill into law and continuing to strengthen the U.S.-India strategic partnership that he's worked very hard on since becoming President. This legislation will strengthen our global nuclear non-proliferation efforts and create jobs, assist India in meeting its growing energy needs in a responsible manner, and also help us deal with environmental challenges from electricity needs.
Also, finally, I'd like to announce that the White House Summit -- the White House will be hosting the White House Summit on International Development on October 21st. The official title of it is White House Summit on International Development: Sustaining the New Era. It will be held in the Ronald Reagan Building. President Bush will deliver the keynote address, and Secretary Rice will also make remarks. Given the slowdown in the economy and the impact of the financial crisis on developing nations, it's more important now than ever that developing nations continue to fulfill their commitments to support the aspirations of their people, and that the developed nations help them do that.
And Carlton Carroll will have more information for you on this later today.
With that, I'll take your questions.
Q How much is left in the tool kit to address the economic problem? We've had to coordinate a rate cut today, the commercial paper buy-out by the Fed yesterday, and you had the rescue package last week. How many more things are left they can draw on? And what happens if these things don't work?
MS. PERINO: I think all that activity shows that we take this issue very seriously and that we are committed to trying to help solve the problem. And unfreezing the credit markets is the root cause of the problem and that's what these efforts are trying to address. The Fed's announcement yesterday on commercial paper went a long way towards that. And then this coordinated effort today amongst the Fed central bankers to reduce rates across the board should help, as well. I think it shows innovation and industriousness that people are working 24/7 to find the ways to be able to deal with it.
But what I would say to you is that in the rescue package that Secretary Paulson -- and you'll probably hear more about this from him today -- is working to, as quickly as possible and efficiently as possible, implement the new regulation and the new tools that they were given. They have a whole range of new tools from, as I said, systemic risk of liquidity, stabilizing the markets, the auctions, the swaps, all sorts of technical terms that I don't know. But they're working very hard. And Neel Kashkari will be in charge of that and he's setting up shop and trying to hire as many people as possible.
Q But do you get to the point where you can cut interest rates to zero and then you can't go any further, like they did in Japan, they cut them to zero -- and what happens when you run out of --
MS. PERINO: I don't think -- I'm not going to speculate on a hypothetical.
Q All right. Are you near the end, or where do you stand on this?
MS. PERINO: I think that we are taking appropriate action as quickly as possible during rapidly developing market changes and we'll continue to do so. And I don't think it's appropriate to speculate on hypotheticals. We hope that this action will start to stem the crisis. And I think that this weekend's meeting amongst the G7 ministers will again help to make sure everybody is on the same page as we move forward, since we're all so interconnected now.
Q Dana, if I could just follow on Terry's question for a second. The rate cut by the Fed, and if you're looking at coordinated rate cuts around the world, clearly isn't enough for Wall Street. And I know you don't want to comment on day-to-day movement in the markets, but could you comment on the sentiment coming off the street this morning that it's just not enough? Because that's going to translate into a general sense, I think, of anxiety if not panic, as people in the country watch step after step, significant step, being taken and the market just continues to go down.
MS. PERINO: Well, I think that -- again, a lot of this excess debt has to be shaken out of the system, and we're seeing that happen not just in our own country, but around the world in those world markets. You're right, I can't comment on day-to-day market movements, but what I will say is that all of these efforts aren't necessarily going to have an instant effect. And the work that the Fed is doing, the work that the Treasury Department is doing, collectively should help stem the crisis. And we think that the rescue package will do what we need it to do to unfreeze the credit markets. That doesn't mean there's not going to be pain along the way, because there will be, unfortunately, for all of us.
Q In terms of an expectation from the administration, how long should people sort of expect before something at least stops the slide? No matter what's being done, it's another 100 to 200 points every day.
MS. PERINO: I wish I could tell you, but I don't know. But what I can say is that we're working hard to try to solve the problem, stop the downturn in the stock market, return stability and confidence so that we can return to job growth. But it's going to just take us a while to get through it. I think that Neel Kashkari and his team, as they work through to implement the rules of the new rescue package that we just signed last Friday -- you know, in Washington this is actually moving at lightning speed -- but it's just going to take us a while. I wish that we could do it faster.
Go ahead, Bret.
Q Dana, what was the President's role in the coordinated effort, if any, of the banks?
MS. PERINO: His communications with the Fed is not something I can comment on either way.
Q What about his communications with other leaders? You mentioned yesterday he talked to Berlusconi, Brown and Sarkozy. Were there other leaders he reached out to? And was this coordinated effort really the focus of those discussions?
MS. PERINO: I couldn't comment on that aspect of it. But what I can tell you is that the President expects to be talking to Chancellor Merkel soon, today. And so we'll hopefully have a readout for you of that within the next couple of hours.
Q So you've always been sensitive about talking about the White House interaction with the Fed. In this time, the President's moves and the tick-tock of what's going on -- isn't this a time to tell us what the President is doing in this situation?
MS. PERINO: What I share with you is what I can. We don't talk about Fed actions here. We respect what they did; we think it was the right decision. They are independent, and we leave them that way. But of course, the President does talk to his Fed Chairman.
Q Can I just ask a quick follow-up? You normally don't talk about the Fed actions, but you have actually, in the first two questions. And I'm wondering why you have some sort of shift --
MS. PERINO: I think if you go back and look at the things that I've said about previous Fed actions, I've been extremely consistent in what I've said today, in that we respect the Fed, we think that they've made the right moves, and we're not going to comment on any deliberations leading up to decisions.
Q A question here about -- you mentioned coordinated actions that Paulson will be talking about later today. Earlier today, Prime Minister Brown of Britain called for the G7 to coordinate actions on guaranteed bank lending. Do you guys -- what's your take on that?
MS. PERINO: I don't know if I said that we would be talking about further coordinated efforts later today. I think what I was referring to is that we're -- what I've told everybody is that we will continue to talk with our allies and coordinate with them. And I think this morning's action that the Fed governors took is an example of that, and we'll continue to do so. Then, the G7 finance ministers are meeting this weekend. And so, we'll continue to work with them and talk with them.
On specific countries, Prime Minister Brown made a decision that he thinks is best for the UK. And we're going to continue to work with them. Each nation is going to have to take steps to deal with its own individual problems. But that doesn't mean we can't also collectively work as a whole. And so far that's what we've been able to do.
Q Sure. And Prime Minister Brown is saying -- calling on the G7 to work collectively to guarantee inter-bank lending.
MS. PERINO: Again, that's just a detail that I'm not able to talk about. I'm sure that it's going to be something that if that's their position, that will be talked about this weekend. I think the Treasury Department has an agenda that they can provide for the G7 finance ministers' meeting, though I don't know how specific it gets, so if you could check with them. And then Secretary Paulson might have more to say on that today at his press conference.
Q Dana, I'm just wondering what in general the President is doing relating to the economy today, Is he having any meetings? And will we hear from him on the economy today?
MS. PERINO: He's been briefed several times, and as I said, you -- I expect to have a readout from a call that he's having with Chancellor Merkel soon. And I -- but he'll be doing the remarks at the India civ-nuke bill signing. I don't know if there will be any remarks -- could be. It's obviously on his mind and he's been wanting to talk to the American people about it and to reassure them that the government is going to do whatever it takes to make sure that we can help stem the crisis.
Q Do you think that his message is getting through? I know that the small business leaders that he talked with yesterday said, you know, get out there, put that positive message forward; Americans need to hear it. But do you think it's connecting? Do you think it's resonating and that people are listening?
MS. PERINO: It's hard to say. I think that there's -- you could say on the one hand and on the other hand -- on any given day in the recent past, we would have days where you'd have good economic news mixed with bad economic news. In the last few weeks we've had bad economic news. And I'm sure that people are very concerned about their retirement accounts, especially those baby boomers who are getting ready to retire or thinking about how many more years they have to work, and they're probably very nervous and upset and angry, and I don't blame them a bit.
And President Bush has tried to be very measured in his comments to let people know that this is not going to be solved overnight, this is something that is going to take a while, but that people should be assured of two things: The government is going to do what it takes to make sure this financial system does not collapse and that the government is committed to making sure that in the long term that this country, who has built the greatest capitalistic system in the world, will be able to continue to enjoy prosperity. But it's going to take us a while to stabilize the system and return confidence to the markets.
Q Other than being a cheerleader, I guess there's a limit to what any President can do.
MS. PERINO: I hope you're not suggesting that the President is only a cheerleader, Kathleen. I have told you for weeks all the things that President Bush is doing, leading these efforts, challenging the policymakers, working to get that rescue package passed. I mean, I'm sure you probably don't mean that he was just being a cheerleader, so I'll drop it.
Q Is the President following any of the financial hearings that are going on, on the Hill, specifically at AIG executives? When the White House hears about these executives taking a spa vacation, spending thousands of dollars on massages and treatments -- I mean, do they think that there should be any kind of action taken against these executives, considering how much taxpayer money was put into that company to rescue it?
MS. PERINO: I don't know how much he's been able to actually watch those. As you know, yesterday we were traveling out to Chantilly, Virginia. But certainly we've seen coverage of it. And I understand why the American people would be outraged -- I am. It's pretty despicable to realize how callous somebody might be as they go through this -- as some might be reacting to this crisis.
And the President did not want to move forward on this rescue package to help anybody in the top positions in Wall Street. He was concerned about everybody -- everyday people like you and me in America and people all across this country who have worked so hard to put money into their retirement accounts, to pay their mortgages on time, who have been responsible in the loans that they've taken out.
Not everybody has, and there were risky lenders -- lenders who gave people loans that they knew they weren't going to be able to pay, and borrowers who took out loans that they probably knew they didn't have the income in order to pay but thought maybe that eventually that they would. Now, Americans are not the type of people who fault success. When people succeed we like that, we think that that's good, and we aspire to be successful ourselves. But rewarding failure is something that we have a very hard time swallowing.
And President Bush has said that his first instinct was absolutely not to go down this road. What he wanted was to make sure that we were asking all the right questions to prevent this financial market collapse and that we take the actions necessary on Capitol Hill, or anywhere else -- at the Fed, or the SEC, wherever we could independently -- to help save the system. But he didn't do that to help top executives and certainly not to help executives go to a spa. President Bush did that in order to try to help everybody save their accounts.
Q Should some of that money be taken back from those individuals? Is there a way to do that?
MS. PERINO: I don't know how it was all paid for or anything. I just know that I can understand that people would question the judgment of executives who would take that kind of action.
Go ahead, Jon.
Q There's a number being thrown around as far as what -- the bailout of the economic rescue plan and how that will affect the federal budget and the deficit. People are saying that this will increase the deficit to about a trillion or over a trillion dollars. I think Senator Obama mentioned that last night. Economists are beginning to talk about it this way. Is that a number that -- I haven't heard you guys comment on this -- is that a number you guys agree with?
MS. PERINO: That's not a number -- that's certainly not the number that the Congressional Budget Office came out with yesterday. But, look, I don't know how much it is going to add to the deficit, but OMB, which puts out its numbers regularly, plans to do that next week, so we'll have to wait and see as they do the analysis.
Q What's your sense of how much this will add to the budget? Do you have specific numbers --
MS. PERINO: I don't know how -- I don't know the specific numbers, so you could call Corinne Hirsch at OMB, though.
Q Dana, back on the AIG situation, you've made some very strong words -- "despicable" one of them -- about what happened with the spa weekend or retreat after the money was given. What could this White House do in reference to that? Could the President direct the Justice Department to look into that, to investigate, to possibly find a way to recoup the money?
MS. PERINO: I think the Justice Department is taking actions and looking into possible wrongdoing across the board. I'm not singling out any company -- it would not be appropriate for me to do so -- but I'd refer you to the Justice Department for any details on that. But obviously there have been investigations that have been reported in the press and confirmed by the FBI.
Q So the President -- has the President said anything --
MS. PERINO: The President doesn't order investigations. This is -- those are decisions made by the Justice Department.
Q -- said anything? You used the word "despicable." What were the words that he used when he found out about this?
MS. PERINO: April, I haven't spoken to him firsthand today. This is taken from my briefing after somebody else saw him.
Q Last night and this morning, Senator McCain has proposed -- he was calling it home ownership resurgence plan. It's requiring Treasury -- and its details are still sketchy, but it requires Treasury to directly buy back mortgages from homeowners, regardless of how the original transaction was -- came to be. Is that something the President would support?
MS. PERINO: I haven't seen analysis of that bill. What I can tell you is that there's a range of programs that we have -- I've talked about them before, HOPE NOW and FHASecure; HOPE NOW is a private sector initiative, working with banks and homeowners to keep them in their homes, and FHASecure is something that HUD overseas. We've helped 2 million homeowners so far. There's also a provision in a bill that passed in August that would allow I think it was $4 billion of community development block grant funds to do what I believe Senator McCain was talking about for his new plan. But I don't have enough analysis in order to tell you about how it fits into this particular plan.
There's a range of tools that have been given to the Treasury Secretary that now they're trying to work on implementing those rules. And it's just going to take them about a week or two to finish that out. But Secretary Paulson might have more on that.
Q Did the President watch the debate?
MS. PERINO: I think he saw some of it, and then read a lot of the coverage this morning.
Q Dana, is there any chance that the President would meet with the G7 finance ministers this weekend?
MS. PERINO: I don't have anything for you yet on that. Secretary Paulson will be, and I believe that the Fed Chairman will also be there. We'll have representation there from the White House, as well, but not necessarily at the President's level. So I'll let you know.
Q What about President Sarkozy's call for a summit on economic issues?
MS. PERINO: We are -- the President said that he is open to the idea of meeting at the head-of-state level, but right now we're all focused on the emergency issues and the actions that people can take one by one.
Q Who from the White House is going to be there this weekend?
MS. PERINO: I don't know who all will be there. I know Dan Price with the National Security Council, who does all of our trade and international economic issues, will likely be there -- possibly others. But I'll need to find out.
Go ahead, Goyal.
Q Two quick questions -- thank you, Dana. One, as far as this deal to be signed by the President this afternoon, what you think this deal will do in the future as far as U.S.-India relations are concerned? You think this deal will strengthen --
MS. PERINO: You know what I think I'll do? In about an hour and a half, you can hear the President himself, and he'll say it better than I will, so I'll refer you to him.
Q And second, as far as Afghanistan is concerned, bombings are still going in the area, and what -- British are saying that cannot win the Taliban's war, because now maybe you need to change some strategy; maybe you have to analyze who is friend and who is foe in the area. You think President is going to take this seriously, because --
MS. PERINO: Secretary Gates has already said that there's been -- there's reviews underway to make sure that we are acting -- that we have troops positioned in the best possible place. We've had command structures changed, and we are going to continue to go after the Taliban. There's many provinces that are doing well, but there are several that aren't doing well at all and that the violence is up. And one of the things that we're concerned about is the civilian casualties. And one of the things that happens is that as we move in to try to take out the enemy, the enemy knows how to hide amongst innocent civilians. And that's become a challenge for us, but one that we're committed to trying to fix.
Go ahead, April.
Q In this bad economic time, many Americans are tightening their belts. What's happening around here in the White House leading into the last few months of this President? Are you guys scaling back, by any chance, on trips, anything in keeping with --
MS. PERINO: Well, I think that you've seen that the President has canceled several trips over the past three or four weeks, because he wanted to be here to be able to deal with the crisis. All of us are mindful of the tough economic times that we're going through and the possible ones ahead, both individually and collectively, both outside of these walls and inside these walls. But I don't know -- I don't have anything specific for you in terms of things that we've scaled back. What I can point you to is the trips that we've already cut back on.
Q Any farewell celebrations here, or anything like that? I mean, seriously --
MS. PERINO: Maybe you're focused on the farewell celebration. We've been pretty busy to focus on a -- go ahead.
Q I just want to ask a quick question. Is the President aware that a former top lawyer of the Treasury Department has agreed to pay $6.5 million for allegations of insider trading?
MS. PERINO: I don't know if he was. I saw that report yesterday, though.
Q Do you have a reaction to it from the White House?
MS. PERINO: Given that the Justice Department has completed that litigation, I wouldn't have a comment. Obviously, they did the right thing.
Go ahead, Paula.
Q You mentioned earlier about the pain everybody is feeling as a result of all this. Well, the House passed an unemployment extension bill, which would extend unemployment for all states for seven weeks, and for those that have high unemployment, above six percent, for an additional 13. Would the White House support this bill?
MS. PERINO: Well, Paula, I don't even think -- Congress is not even in session, so there's no legislation moving through Congress. We have supported unemployment benefit extensions in the past, although we wanted a shorter period of time than many had wanted. I don't know if there's some people recommending a 26-week extension. We cut that back to 13 weeks back in June. One of the reasons that we did that is because we want people to be able to return to the workplace as soon as possible.
So unless legislation starts moving that I'm not aware of when Congress isn't here, I don't know how we could support it.
Q The Senate comes back in November -- November 17th --
MS. PERINO: Well, let's take it up then, Paula. I mean, it's October 8th; there's a long way to go between now and then.
Q I know, but in the meantime, there are people that won't have unemployment checks between October 15th --
MS. PERINO: Well, my point is, Paula, that one of the things that we want is we want people to be able to return to work. We understand that there are people that are hurting, but we've already extended the unemployment benefits. But if legislation isn't moving between now and November 17th, if then, there's not a lot that we can do in terms of getting a law passed.
Q So you assume that in states that have high unemployment that those people will be able to find jobs between October and --
MS. PERINO: I hope that everybody who wants to find a job is able to find a job. I can only imagine the anxiety for people who are looking for a job and can't find one. And it's hard to put myself in their shoes because I haven't been in that situation. But obviously states -- and there are many of them -- that have high unemployment rates have a lot of people who are suffering. But getting back to work would be the best way to help all of us, collectively, them individually, and then us as a country.
Q Thank you.
MS. PERINO: Okay, thanks.
END 12:06 P.M. EDT