For Immediate Release
Office of the Press Secretary
September 7, 2001
Press Briefing Index
Unemployment, Economy 1-5; 8; 16-18
Budget 5-6; 9
Prescription Drugs, Medicare 6-8
Gao, Energy Plan 9-13
Northern Ireland 13
Nursing Home Inspections 13-15
Week Ahead 19
the White House
Office of the Press Secretary
Immediate Release September 7, 2001
the James S. Brady Briefing Room
12:22 P.M. EDT
MR. FLEISCHER: Good
afternoon. I have an opening statement and then, if you
would, at the end, I want to make sure I get to the week ahead.
The President is very concerned about the
rise in unemployment, as was announced today. As President
Bush indicated on Labor Day, for any one person who was out of a job,
their unemployment rate is 100 percent. And he is concerned
about anything that would indicate that Americans are being laid off,
and he has a plan in place to address this issue.
The plan was agreed to by congressional
Republicans and Democrats, an overwhelming bipartisan vote,
particularly in the United States Senate. And the President believes
very much that the stimulative effect of the tax cut, in combination
with the series of interest rates cuts undertaken by the Federal
Reserve will give the economy the boost it needs so that Americans can
have the jobs they need.
And with that, I'd be more than happy to
take any questions.
Q On that point,
the Democrats are saying that the budgetary projections with deficits
that are projected are now becoming their own drag on the economy, that
they are prolonging the slow down in economic growth and threatening
future growth and, in fact, these deficit projections in the budget may
have their own part in creating these higher unemployment
numbers. How do you respond to that?
MR. FLEISCHER: Well, I think
it's just the contrary. Most private sector experts have
said directly that the stimulative effect of the tax cut will add to
economic growth. So I think there is little support for what
the Democrats have said.
The fact of the matter is, the existence
of surplus results from growth. And the President believes
the most important thing for the nation is to pursue growth policies
that bring about jobs for Americans and also bring about surpluses for
the government, keeping in mind that even with the economic slowdown
that is now about 14 months old, the surplus is the second largest in
Q So you disagree
that these on-budget deficit projections are having any drag on the
MR. FLEISCHER: The surplus is
created as a result of growth. And growth is created as a
result of the decisions the government makes, which are reflected in
the budget. And in this case, the decision by the President,
as well as the Congress and the many Democrats who supported the tax
relief package, will help create an environment in which growth will
take place as a result of the stimulative effect of a tax cut which is
only now going into the effect in the economy.
Q But on that
particular point, that they're arguing that the projection of on-budget
deficits are having a drag on the economy, do you disagree, and why?
MR. FLEISCHER: Well, number
one, there is no projection of on-budget deficits. The
administration projects that there will be on-budget
surpluses. And, frankly, if you take a look at it from a
pure economic point of view, the only surplus that matters from an
economic point of view in terms of growth is how much money comes into
the government and how much is spent. And on that question,
the federal government has the second largest surplus in history.
Q Well, isn't that
mostly for Social Security --
MR. FLEISCHER: Each dollar that
comes in is measured against how much goes out. And when
it's measured in that effect, the government has the second largest
surplus in history.
Q So you still
believe, then, that this surplus -- on-budget, off-budget -- is still
an imaginary red line, and that the only true deficit is one --
MR. FLEISCHER: No, it's a real
Q But the only true
deficit, though, is when both the on-budget and the Social Security
MR. FLEISCHER: Well, the
Democrats are saying that markets react to on-budget,
off-budget. Each dollar is economically viewed as the same.
But from President Bush's point of view, it's a governmental priority,
and he will continue to push for it, to protect Social
Security. And his budget protects it.
Q So then, again,
the only true deficit projection that would have an impact on the
market were if both the on-budget and the off-budget surpluses were
MR. FLEISCHER: Well, again, the
key to budget surpluses is growth. And the President's plans create an
environment in which growth takes place. And the budget is
the reflection of the decisions that policy makers make. And
in this case, it's the tax cut that will help drive the economy.
Q Ari, you said
that the President has a plan in place to address this issue, and that
the plan will give the economy the boost it needs. Is the
President really confident that no additional measures will be
necessary to move the economy forward, or to help people that are going
out of work in a number nearing 5 percent now?
MR. FLEISCHER: The President is
confident that the plan that is in place will work. And let
me remind you that that plan is only now beginning to be felt in the
economy. And the plan is a three-part plan in the short
term, and our nation has only experienced, now, about one and a half
parts of that three-part plan: the rate cut across-the-board
that went into effect on July 1st provided a small boost; the rebate
checks that are now being felt throughout the economy provide a
significant boost. And there will be the additional
stimulative effect of an across-the-board tax cut for all Americans
that goes into effect on January 1st.
That, combined with the fact that the
Federal Reserve Board has cut interest rates for now a sustained period
of time, provides the nation with a unique moment for both tax policy
and Federal Reserve policy are kicking in at just at the moment the
nation needs it most.
Q Just to follow up
on that, Ari, how much time should the Congress -- will the White
House, and should the public allow to pass in the current economic
distress that's being felt before thinking that perhaps some additional
measure beyond what the President has proposed or different from what
the President has proposed should be attempted?
MR. FLEISCHER: The best advice
of the economists, private sector and public sector, even taking into
account rising unemployment has been that the economy is projected to
come back late this year and into next.
Q Well, Ari, the
text plan that did pass was originally touted as an insurance policy,
itself. So what's wrong with another insurance policy like
the capital gains tax cut?
MR. FLEISCHER: Because the
President is satisfied at this time that this insurance policy will
Q So you're not
worried that by supporting a capital gains tax cut that it would feed
charges that the tax plan of the Bush administration is friendly to the
wealthy and so forth?
MR. FLEISCHER: No, and
actually, the President is open-minded on the question of a capital
gains tax cut.
Q Yet, he President
appears to be closed-minded to the idea of spending any money from the
Social Security surplus. Why would he do that if he believes
in the stimulative effect of a tax cut if there are many economists who
believe that you can stimulate the economy similarly with spending?
MR. FLEISCHER: Because that
money was paid into Social Security by workers, and it was promised by
the government to be held for Social Security, and the President thinks
that promise should be kept, and his budgets keep the promise, he's
dedicated to keeping the promise, and the promise will be kept unless
Q Does this have
any impact at all on your projections -- this, and slower-than-expected
economic growth in the most recent figures? Does it change
in any way the projections that the administration had over the next
year or two? And did officials here anticipate that
unemployment would reach this level, or is this a surprise?
MR. FLEISCHER: Unemployment, as
you know, is a lagging economic indicator. In private
markets there was talk for the last several months that the
unemployment rate, they were surprised the unemployment rate did not
inch up. But from President Bush's point of view, whether
the unemployment rate is 4.5 percent or 4.9 percent, any one American
who loses a job has 100 percent unemployment. And that's why
his focus will remain, like a laser beam, on growth, on improving the
economy. And that way the government and the country can
enjoy surpluses bigger than the second largest, which we currently
enjoy, and as well as giving a stimulative effect to the economy.
Q I understand that
he feels the pain of anyone who's unemployed, but what I was asking
really was whether or not your economic advisors anticipated this and,
if not, does it change any of the projections you had?
MR. FLEISCHER: Actually, if you
recall, I believe Mr. Lindsey gave an interview sometime in the spring
or early summer in which he did indicate that he projected a rise in
Q And was that
included in your projection?
MR. FLEISCHER: That is clearly
included in the projections for the mid-session review.
Q Ari, would you
respond to this ruling about the discount cards and what the
MR. FLEISCHER: Do you want to
stay on that topic, or do you want me to come to that? Did
you have something on that?
Q I have a follow
on the unemployment, actually.
MR. FLEISCHER: Go
ahead. And then, Paula, I think you're on that topic and
then, David, I'll be happy to take that.
Q Thank you,
Ari. The President, yesterday, called migration, linked that
to an employment issue. He said it's an employment
issue. He said there are employers who can't find people to
work. I'm wondering whether the new unemployment numbers
make it more difficult to sell that line politically?
MR. FLEISCHER: It does not
change the President's belief and the principle belief that America
must be a nation that welcomes people, and that we need to welcome
people, and that we need to welcome people in a manner that is legal,
safe and humane.
Q Ari, when the
House Minority Leader came out after meeting with the President, he
invited the President to either come forward with a new budget or with
some new budget ideas, because he said the current budget basically
does not accurately reflect current or future economic
conditions. Would the White House entertain doing anything
at all in terms of modifying its budget?
And, also, I just need to clarify what you
said this morning in terms of how you define a surplus, because
regardless of how you define a surplus, don't the appropriators have to
base their requests for spending on the budget
resolution? And if things like the military come outside of
that budget resolution, don't you have to abide by the pay-go rule,
which means that you've got to find a way to pay for it?
MR. FLEISCHER: Okay, on the
first question, I don't think it should surprise anybody that the
people who voted against the budget would like the President to submit
a new budget. They had their best shot, they voted, and they
lost. There was a bipartisan majority that supported the
budget, that passed the budget, and allowed the budget to be signed
into law. So the President stands with the bipartisan
majority that expressed its will and passed the budget.
On the technical question of pay-go, the
rules are simple. It's defined by the Gramm-Rudman-Hollings
Emergency Deficit Reduction Act, which dates back to the '80s, at a
time when there were deficits. Now we're in an era where
there are surpluses. We have the second largest, as I've
indicated. It's projected to be even larger next year and
into the out-years as far as the eye can see. The economic
changes, the slowdown has not changed that long-term outlook.
To answer your technical question, under
that law, any time there are two consecutive quarters of less than 1
percent growth, it affects such issues as sequesters, it affects such
issues as the caps that are placed on spending.
Q Reaction to this
ruling on the discount cards and what the administration would do
MR. FLEISCHER: Well, the
President is disappointed by this stay. The President is
dedicated to getting senior citizens prescription drugs and