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For Immediate Release
Office of the Press Secretary
January 23, 2002

Press Briefing by Ari Fleischer

      Listen to the Briefing

  1. President's daily schedule
  2. Surplus, budget, stimulus
  3. President's meeting w/ bipartisan leaders
  4. War update
  5. John Walker Lindh
  6. Enron
  7. Detainees
  8. India
  9. U.N. Summit on Global Poverty
  10. Homeland security funding
  11. Libya
  12. Middle East

The James S. Brady Briefing Room

12:23 P.M. EST

MR. FLEISCHER:  Good afternoon.  The President this morning had his usual intelligence briefing followed by a briefing with the FBI and then convened a meeting of the National Security Council.

Following that, he convened a meeting with the bipartisan House and Senate leaders to come down and talk about the upcoming agenda for the year.  During that meeting, the President urged the members of Congress to take action on a wide variety of issues on the domestic agenda, including trade promotion authority, energy legislation.  The President referred to both of those as job creators.  The President called for action on prescription drugs and Medicare.  He talked about the need for a farm bill and covered many other domestic issues, as well as gave them an update on the war.

I will be happy to return to that.  I've got a little more information for you on that when you want.

Then the President had another meeting with members of Congress to discuss several of the military issues that are pending up on the Hill.  The timing of that could not have been better.

The President will shortly depart the White House to give a speech this afternoon to the Reserve Officers Association Luncheon, in which the President is going to make the case to the American people about the need to increase defense spending in the upcoming budget.

The President will provide the specifics about how much money he is seeking to increase defense spending by.  The President thinks it is absolutely essential to win the war on terrorism, to protect the country, that Congress take action to give the defense budget the boost that it needs and deserves.  And the President will address that himself.  His remarks will begin at 1:20 p.m.

The President will return to the White House, where he will sign legislation to help with victims of terrorism, not only from 9/11 but those who have died from the anthrax attacks as well as those who died at Oklahoma City, by providing them tax relief to help the families deal with the consequences of the death of their loved ones.

And then the President will have a private meeting with members of Congress who recently visited the Middle East to listen to them and to hear their thoughts about the situation in the Middle East.

With that, I am happy to take questions.

Q    The Congressional Budget Office is testifying today and saying that the 10-year projected surplus has collapsed by $4 trillion, of which they say the tax cut is responsible for $1.3 trillion of that reduction, about a third.  Does the President think that's wise fiscal policy, given the nation's needs?

MR. FLEISCHER:  The President thinks that tax relief is absolutely essential to get the economy growing again and to help the economy recover from the recession that began in March.  But I also wanted to say that on the dollar amount, the President always called for a $1.3 trillion tax cut, that should surprise nobody that the size of the surplus has been diminished by the size of the tax cut, as advertised.

That the purpose of federal governments are not to run surpluses that are gargantuan, taking more money away from American people, as you point out, the Congressional Budget Office also says that over the next five years and 10 years, the government will still have a surplus.  So taxes have been cut, the economy is going to come back, the President believes, thanks to the stimulus provided by a tax relief.  And the government will still have a surplus.

Q    But the surplus has collapsed, essentially, given the new needs post-September 11th, that the nation faces, there's just going to be a lot less money to deal with those needs.  And the President still wants a prescription benefit, drug benefit for the elderly.  And there's increasing calls that too much of that tax cut, especially in the out years, goes to the rich.  There's no second thoughts about the fiscal impact -- not the economic policy, but what this has done to the federal budget?

MR. FLEISCHER:  Terry, I think the President understands, and most people at home in America understand that with all that money coming into Washington, it was going to be spent by the politicians anyway in both parties.  And at the end of the day, the government, instead of having a gargantuan surplus, will now have a very large surplus.

But the purpose of government is not to keep taxes high on American people so the government can run gargantuan surpluses which get spent anyway.  The purpose of the government is to keep taxes as low as possible while funding the government's vital priorities, such as Social Security, such as Medicare, such as education, such as defense.  And that's the purpose of the President's budget.

Q    One more.  It sounds like you're saying we can still have it all, that despite this collapse in the surplus, of which the tax cut is a major part, we an still have it all -- you just rattled off a list of Social Security, Medicare, homeland security, defense -- there are hard choices before the --

MR. FLEISCHER:  Especially in the early years, right now, as a result of the recession, as a result of the war, as a result of the war, as a result of the extra spending that was done to respond to September 11th, there is a need now particularly, watch the budget.  Because there will be a deficit -- as the President has said, as the White House has been saying for months -- in the current year and in the next year.

That is not caused by the tax cut, that was caused by the slow-down in the economy, the recession, as well as the need as a nation to respond to war.  As I said, the President today is going to make the case to the American people why we need to have a big increase in funding for defense.

Part of the President's priorities are to protect the country by providing the defense of the United States; to protect the homeland, which, incidentally, the President believes that the single most thing that our country or our government can do to help the economy grow is to prevent another terrorist attack; and also then, to fund vital programs of the government.

Q    What did the President tell the leaders about the war, status of the war?  And did he defend putting prisoners in cages?

MR. FLEISCHER:  Your characterization, of course, Helen, not the President's.

Q    No, Rumsfeld said, we put them in cages.

MR. FLEISCHER:  On the question of the meeting the President had, he met with the bipartisan leaders for just a little bit over half an hour, I think the meeting lasted.  The President spent about half the meeting talking about the domestic agenda and about half talking about the war.

On the domestic agenda, I jotted this down, one thing the President said was, "I look forward to a healthy domestic agenda.  We can get a lot done.  2001 was a good year, I thank you.  I think we can improve on it." The President believes there's a lot more that can be done working with the Congress on the domestic agenda, including getting a patient bill of rights, which has been passed by the House and Senate, enacted into law; a stimulus plan to help the economy to recover; I  mentioned a couple of the other items that the President mentioned earlier.

On the war --

Q    Did have a priority list for the agenda?

MR. FLEISCHER:  No, the President didn't rank them in order.  The President believes that there is a lot that can be done.

On the war, the President gave an update on the war and much of that you're going to hear shortly in the President's remarks.  But the President believes that things have gone very, very well in achieving our missions in Afghanistan.  And the President looks forward to his State of the Union, where the President is also going to explain to the American people how this is a war against terrorism and that Afghanistan is the focus for now, but the mission is a war against terrorism; that Osama bin Laden will be caught, but Osama bin Laden is not the focus of what we're doing, he's an objective of this war on terrorism, but the focus is much larger -- which is to help win a war against terrorism, wherever terrorism has global reach.

Q    Ari, on the subject of detainees and prisoners, why is there so much secrecy surrounding the transfer of John Walker back to this country?  And what does the President believe Americans should think about his return to the United States to face trial?

MR. FLEISCHER:  The President believes that what Americans think about John Walker's return to the United States is he will now get the justice he deserves; that he has been charged with something extraordinarily serious, conspiracy to murder Americans; that he was found in Afghanistan as a member of al Qaeda, as a member of the Taliban, which were waging a war against our men and women.

But the President also knows the great strength of America is he will now have his day in court and he will be judged impartially and fairly.  And that's one of the reasons the United States wins wars, because people like John Walker deserve and receive the judgment that they get from their fellow citizens.

Q    And the reason for the secrecy surrounding his transfer?

MR. FLEISCHER:  I can't speak to that, John.  I think it is probably pretty common sense.  You need to check with the Department of Defense and the Attorney General's office who will be in charge with any of the operational details of his transfer.

Q    Ari, three or four Democratic senators are backing the  GAO's drive to give more details about the Enron contacts here in the White House.  Is your position still the same?  And would it be any different if another branch of the government asked for those records, a congressional committee or lawmakers themselves?

MR. FLEISCHER:  There has been no change in the White House position at all and that includes my statement, oh, probably about 10 days ago when I said there was no change in the White House position.  And I also indicated that I cannot make a predication about any future and every future circumstance that may or may not come up.

Q    Right now, the sticking point is that the GAO, according to the Vice President, doesn't have the statutory authority to request these documents.

MR. FLEISCHER:  That is part of the case with the GAO, as well as the principle that you heard articulated here many times before, about the rights of Americans to come and talk to their government, people -- all kinds of meetings and all variety of settings from all types of different backgrounds, and have a right to have a meeting where anything they say is not turned into a news release.

Q    That may be a problem even if the GAO were to stand down and a congressional committee were to come forward which didn't have that statutory authority?

MR. FLEISCHER:  What I have always indicated is the administration will always work with Congress and continue to do so in a vein that is cooperative.

Q    I want to get back to the deficits in a minute, but I want to talk about the Majority Leader's letter to the President yesterday, on the stimulus package.

Scott understandably danced around that a little bit this morning.  I want to try to get from you what is the White House assessment of what needs to be in a stimulus package that passes the Senate.

Does acceleration of the Bush tax cut need to be in there?  Do the health care tax credits need to be in there?  And if they're not, is this just an exercise in letter passing?

MR. FLEISCHER:  Well, the President was very pleased to receive a letter last night from both Senator Daschle and Senator Lott.  Obviously, there's a lot of letter writing going on.  The President is hopeful that the Senate this year will be able to work together and be able to send to him -- or at least send to the conference committee, so it can be sent to him -- legislation that creates jobs, gives a stimulus to the economy and helps workers who have lost their jobs.

The President believes that a comprehensive package is the best package to be sent to him.  But the President welcomes progress on this issue.  He understands how difficult it is in the United States Senate.  And before the United States Senate can do anything that gets enacted into law, they have to reach an agreement within themselves -- that way, they can send it to the conference.

The House of Representatives has an equal role to play in this matter.  And so all the focus now has been on the Senate because the House did its work.  It's now important for the Senate to complete its work, and that's a very difficult charge for Leader Daschle, but the President has confidence in his ability that if he wants to get it done, he'll be able to get it done and he welcomed the letter.

Q    Will the President sign a stimulus bill that does not include an acceleration of his tax cut and health care tax credits?

MR. FLEISCHER:  I'm not going to speculate on any given circumstance.  Again, the President wants to see Congress make progress, but the President believes that we need to have a comprehensive package that focuses on job creation as well as help for people who have lost their jobs.

Q    The CBO numbers, of course, do not reflect future legislative action.

MR. FLEISCHER:  Correct.

Q    That being said, we've been led to believe by Mitch Daniels that the Bush 2003 budget will not really cut a lot of programs significantly.  We may expect a 7 to 8 percent growth in discretionary spending, almost twice what the President originally recommended a year before.

Are we now seeing a Bush White House that has essentially raised the white flag, as trying to hold and restrain spending, as far as Congress is concerned?  And, if so, can't we expect more pressure on deficits because Congress typically trumps whatever an administration puts before it?

MR. FLEISCHER:  Well, it's a very good question.  It's a reminder that deficits are affected not only -- or surpluses and deficits are affected not only by the economy and how much revenue comes in by the strength of the economy, by the attack on our country, which hurt the economy as well as led to a lot of spending; tax cuts, which, again, the President believes are stimulative -- but spending, of course.

Spending has a dollar for dollar affect on the bottom line.  For every dollar you spent, you can increase the deficit a dollar.  Having said that, here are the President's priorities.  The President's priorities in the budget he proposes will be to increase defense spending so that our nation can win the war on terrorism and so that our men and women have the tools they need to finish the job.

Two, to protect the homeland -- homeland security, because the President believes the best way to protect the economy is to prevent another attack on our country.

And, thirdly, to take care of vital domestic needs.  And to do so, there will be a need to limit the growth, to increase spending more slowly, if you will, on many of the issues on the domestic home front -- recognizing that for the last several years there have been major increases in many of these domestic accounts.

And so when you take a look at the proposals over a two or three year period, you'll see the budget is growing at a rate that is healthy and appropriate.  But the President is still dedicated to making certain that the spending habits of Washington are restrained within those priorities.

Q    Ari, despite the explanations given by Secretary of Defense Rumsfeld, this morning Speaker Hastert, when asked about it, said that the treatment of the detainees in Guantanamo -- Taliban and al Qaeda -- is humane and severe.  He used the word "severe."

The critics, in Europe, especially --

MR. FLEISCHER:  You said the Speaker said it was humane?

Q    And severe, right.  The critics, especially Europe, continue to not accept the explanations given by American authorities.  What do you think the U.S. should do to prove its point, that they have given them humane treatment in accordance with the Geneva Convention?

MR. FLEISCHER:  Again, I would refer you to the briefing that Secretary Rumsfeld had on this topic yesterday.  There's not a new question here.  Secretary Rumsfeld took all these questions.  Secretary Rumsfeld has been in touch with the people who are in charge of Guantanamo and he understands this.  So, too, does the President.  And the President is perfectly satisfied that the traditions of the United States, which are to treat people well, to treat people with dignity and to treat people humanely are being kept at our base in Guantanamo.

The President also understands that the people who are detained there are detained because, for the most part they're all al Qaeda, and if they were free they would engage in murder once again.  These are not mere innocents.  These are among the worst of the worst who are being detained because of what they have done, because of the suicidal nature of the actions that they have taken -- their willingness, their training to go out and kill and destroy and engage in suicide if they can take others with them.

And the President is also concerned that as they are treated humanely and fairly and consistent with the Geneva Convention, that the young men and women of the United States military who are guarding them are not subject to harm and subject to danger, as was done in the prison uprising in Mazar-e-Sharif. Those are also the brothers and sisters and the sons and daughters of Americans, who are in harm's way by guarding those prisoners.  And it's not easy duty.

And the President is very well satisfied that they're doing it in the traditions of the American military, which sets a standard around the world for people treating well, treating people humanely while doing a tough job.

Q    Most of the international organizations say they are not being treated properly under the Geneva Convention and they are not being treated humanely.  Why do you have this world outcry if they're being treated humanely?

MR. FLEISCHER:  I think, Helen, there's been a reaction to a photo that is not befitting the facts.

Q    Photos put out by the Pentagon.

MR. FLEISCHER:  That's correct.

Q    Two questions, one domestic, one international.  International, again, U.S. interests was -- India, if President is concerned about it and if he has spoken to anybody.  And Indian authorities are saying this is also an act of terrorism.  And if President claims victory in Afghanistan --

MR. FLEISCHER:  Ask me the second part of your question again.

Q    If President claims victory Afghanistan.

MR. FLEISCHER:  President plans what on Afghanistan?

Q    If he claims victory.

Q    Does he claim victory.

MR. FLEISCHER:  I'm sorry, I'm sorry.  On the attack in Calcutta, number one, the perpetrators of that have not yet been identified.  And the President is looking forward to finding out if that is going to be information that's obtainable.  The President is very concerned about the violence that took place in Calcutta and the innocents who were affected in the attack.

As far as Afghanistan goes, no, the President is not claiming victory.  The President is very pleased with the progress of the campaign in Afghanistan to rid Afghanistan of terrorism, to move the Taliban from power because they've harbored terrorists, and of the ability of the United States to destroy the al Qaeda's ability to harm anybody else.

There's an important reconstruction process that is also underway simultaneously with a war that still is a fighting war and a shooting war in many pockets in Afghanistan.  And in that endeavor, as you know, there was a conference in Tokyo over the weekend in which the United States played a lead role.   The United States has committed $300 million toward the rebuilding of Afghanistan.  I believe that the total funding for the effort in Afghanistan by the various nations that are involved is a little bit in excess of $1 billion -- it's $1.8 billion, from 61 participating countries.

You know, it's another sign of what happens when the United States gets involved in the world and does things because the President commits the United States to a path that he believes will result in justice.

The United States engaged in a war -- at the same time engaged in a war to protect the citizens of this country, it dropped bombs and it dropped food at the same time.  And at the same time the war was being fought, plans were being made to help Afghanistan rebuild so they could go beyond what was done to them during the Taliban regime, and help improve the lives there.  And you've seen how many women and children are now in the streets, liberated.

Q    Back on the Daschle proposal for a slimmed down stimulus, or at least an agreement on just those things the two sides don't disagree over.  Is the President asking his allies on the Hill to work on such a package, to continue talks on such a package?

MR. FLEISCHER:  During the meeting it was discussed, and both Senator Daschle and Senator Lott have indicated they've already talked to each other, they will continue to talk to each other.  And that's exactly what the President thinks that the leaders of the Senate should be doing.  They have a difficult job ahead of them, it's never easy in the United States Senate.

But one way or another, it needs to be done, in the President's opinion, so that the country can have laws passed.

Q    But you already know the that Democrats agree with you on a body of things, such as extending unemployment benefits and rebates to people who didn't get tax cuts.  Those things are already agreed the by both sides.  What is the purpose of continuing discussions on that and cutting out the things that the President is insisting upon as a real economic stimulus?

MR. FLEISCHER:  Well, that's again why the President believes that a comprehensive package is the best package in order to help the most Americans.  And that's why when the President received the letters last night he talked about how pleased he was that the senators are saying that they want to work with each other and get the job done.  But at the end of the day, the President believes a comprehensive package is best.

Q    I understand what he thinks is best.  How does he think this process of working on a slimmed down version will actually get to that?

MR. FLEISCHER:  Well, you just never know with the United States Congress.  It is not unusual for the United States Congress to proceed slowly, quickly, slowly, quickly.  That's our legislative process.  And that's why again I say it's not easy.

And with just one quick look at the numbers, you can see the margins are very narrow on both the House and the Senate.  But when you consider the fact that the House of Representatives has about four-and-a-half times as many people as the Senate, really the margins in the House and the margins in the Senate are the same.  It's one vote in the Senate, six votes in the House, and the House is four-and-a-half times the size of the Senate.

The House of Representatives has been able to get it done, not only on a stimulus package, but on energy legislation, on faith-based legislation, on a ban on cloning.  The House of Representatives has been able to take action on many of these different issues -- trade promotion authority.

And the President believes that the Senate can do it as well, and it's important for the Senate to do it as well, because if they can't, nothing gets sent to the President.

Q    Ari, on the subject of aid, the U.N. Summit on Global Poverty is in less than two months.  And the draft declaration for that calls for wealthy nations to increase spending on foreign aid to .7 percent of their national income.  That's something that's supported by, amongst others, the British.  We currently spend about .1 percent of our budget.  What is the President's stance on that draft declaration and are we actively seeking to alter it?

MR. FLEISCHER:  Well, as you indicated, that summit is several months away and so it's too soon to say what the position will be on the drafts that are in the process of formulation prior to that.  You'll be able to see more of the specific budget numbers in the budget that the President releases on February 4th.

Q    Ari, the President plans this huge increase in homeland security funding -- Governor Ridge was talking about it to the mayors a little while ago.  What kind of guidelines does the administration have in mind to make sure that that money goes to the right place and that it's used for the right purpose?

MR. FLEISCHER:  The homeland security increases that the President will be seeking will be very specific in most categories.  For example, there will be a big focus on first-responders.  What happens very often, as you can see in New York or at the Pentagon, when the attacks took place, the first people on the scene typically are your local fire department, your local police department.  Those are what the lexicon calls first-responders.  It's logical, it's common sense, they're the ones who are on the ground, they're trained to respond and respond immediately.

Part of homeland security is making certain that they have the resources around the nation, because if we don't know exactly where the enemy will hit us next -- if they're able to hit us next.  And so the funds will be earmarked for specific purposes.  There will be funds earmarked, for example, we learned a lot in the anthrax scares.  There will be funds earmarked for public health.  There will be funds earmarked for stockpiling of medicines.  There will be funds earmarked for the distribution of medicines.  That will be all part of the homeland security package.

So there will be increases in spending for homeland security in a variety of specific categories.

Q    So there will be restrictions, there will be rules that make sure that these funds are not -- that local governments don't redefine these funds and squander them on something else?

MR. FLEISCHER:  There will be specifically defined purposes.  Now, there may be -- and I'd have to take a look carefully -- some programs which could be block granted.  I haven't looked at every area of the homeland funding.  But the majority, the overwhelming majority of the funds will be earmarked for specific purposes like I mentioned.

Q    Do you think that the Daschle plan is an acceptable vehicle for being voted on by the Senate?  It's solely for the purpose of hammering out a broader, more comprehensive package once it's in conference.

MR. FLEISCHER:  The President thinks the Daschle plan is an appropriate vehicle for Senator Lott and Senator Daschle to discuss, so the Senate can get something done.  But, again, the House of Representatives is an equal part of our democracy and it's important for the Senate to do as the House did and pass a bill that can get to conference so that something can be sent to the President.

Q    Ari, a follow up on Peter's questions.  Some of the mayors have said that it all looks good, this money that's going out to the local cities -- I mean, to the cities, to give to the first responders -- the fire, the police.  But they're saying that, you know, they feel that it's not enough, the proposed increase in homeland security first-responder money that they've heard.

And they're saying basically what they're doing is just telling their people in the cities, we can fight it, but knowing in their hearts it's just not enough.  What does the administration say about their gripe that it's not enough to really effectively fight terrorism?

MR. FLEISCHER:  Well, first of all, I'm not certain that sentiment is widespread.  You will always be able to find people in both parties who like to push the spending envelope to get more.  Everybody knows how that works.  You ask for a figure much higher than you need and then you are very satisfied with the amount you actually get.  That's an age-old issue when it comes to budgeting and everybody engages in it.

But the President is very well satisfied that the review that was done by Governor Ridge, working with the officials on the state and local level to determine how much we could spend on homeland security, effectively and efficiently and fully give resources to state and local governments is the right amount.  But he'll be satisfied to send that program up to the Congress and the Congress will take a careful look at it, as well.

Q    And to follow up.  How can you determine what cities get what?  Let's say a New York, let's say a Chicago, let's say Walla Walla, Washington -- okay, yes, Walla Walla -- (laughter) and cities in Florida -- I mean, how can you determine which city gets what?

MR. FLEISCHER:  Much of it is, of course, done by the size.  That, obviously, a city with a budget that is 10 times the size of a city of another budget has often 10 times the need.  New York City, Los Angeles, Chicago, towns that are much smaller don't have the same needs.  But they all need to have increased funds.

The President believes one of the best ways is to get the money into the hands of the legislators and the governors.  They can make decisions, too, as they pass the money down to their local entities, because they have a lot of knowledge of it, too.

Q    Ari, does the President plan to sign off on the reported settlement between Libya and the families from Pan Am 103?  And how close is the administration to taking Libya off the list of rogue nations?

MR. FLEISCHER:  Thank you for asking that, I'm glad you did, that gives me a chance to clarify something that was out there this morning.

There are discussions that have been underway involving several of the parties with Libya.  But the report this morning that there is any type of agreement is substantially, widely off the mark.  There is no such

agreement.  There have been conversations, but Libya knows what it needs to do, and that is to follow the United Nations' policies about paying reparations to the victims of the attack at Lockerbie, as well as to apologize for the attack.  And that has not yet taken place.

And that's a separate matter from de-listing Libya as a terrorist state that sponsors terrorism.  That's a matter that's with the State Department and is separate and apart from Libya simply conforming to the actions that they are supposed to conform to in accordance with the U.N.  obligations.

Q    Would the President want to hear from the Pan Am 103 families before he took action?

MR. FLEISCHER:  Well, I think there's no action about to be taken.

Q    Ari, the Senate plan from Senator Daschle, could you just clarify that you support everything in that Daschle plan, and then clarify why you think it's not a good vehicle for it to go to conference?  Because everything works in conference anyway, so why not just send it to conference?

MR. FLEISCHER:  Well, again, the President is pleased with the fact that the senators are doing what they should do, which is beginning the year sounding as if they want to work together to get it done.  The President believes that that is the case with the Senate and he hopes that they will now manifest that in action.

But always, on any of these proposals, the devil is in the details and people talk about bonus expensing, I think were the words that Senator Daschle used.  You know, he has one definition for it, the administration has had another definition for it.  So even if you were to assume that in and of itself -- and I'm not assuming that -- but that letter alone was agreeable, you'd have to ask the substantive questions, well, how do you define and how do you define it.

And, of course, there is still a legislative process that would have to move forward as they put the details down in writing.

Q    So you agree with the concepts, but not necessarily everything in --

MR. FLEISCHER:  Well, the concept is that the Senate needs to do its job.  The senators still have to pass legislation and get it to a conference committee.  And to do that, the Democrats and Republicans have to work well together to get it done.

The President believes we need a comprehensive package.  That's something that Senator Lott has talked about that would create jobs.

Q    Ari, top aids to Yasser Arafat has been visiting -- the last few days, and there have been talks about mediation efforts to narrow the gap between the Israelis and the Palestinians.  We understand that the Foreign Minister of Qatar this morning met with the Vice President Cheney.  He also met before that with General Anthony Zinni.  Could you fill us in on the meeting with the Vice President and if there are some developments and mediations to narrow the gap between the --

MR. FLEISCHER:  I'm afraid you'll have to talk to the Vice President's office about that, I was in different meetings with the President all morning and so I don't have any information on those meetings.

Let me go back to the Libya question for a second.  I want to give you some very specific language on that, just to help you clarify that.  I was looking for this earlier.  There have been positive discussions with Libya, but Libya still has not fully complied with its United Nations Security Council resolutions.  The United States government is not -- not -- negotiating a compensation settlement with the Libyans.  As we've said before, we are committed to preserving the right of the families of Pan Am 103 victims and will not undercut their pending claims.

Q    Since yesterday's Defense Department's dropping of its requirement that our female Armed Forces personnel in Saudi Arabia have to wear head-to-toe gowns when leaving their base was surely done with the consent of the Commander-in-Chief.  Why does the President believe that Colonel Martha McSally (phonetic) should still be unable to drive a car off base in Saudi Arabia when she can pilot a fighter plane above Saudi Arabia?

MR. FLEISCHER:  Actually, Les, those decisions are made properly by the Department of Defense under the authority --

Q    He approved this, didn't he, Ari?

MR. FLEISCHER:  -- it's done under the authority that the President has granted the Secretary to make these type of judgments.

Q    He thinks it's a good thing, doesn't he?

MR. FLEISCHER:  The President has faith that the Department of Defense executes its mission well and that's their call.

Q    Does the President, in his dedication to equal justice under law, believe it's right for the U.S. Department of Justice to have gone to court to force the Virginia Military Institute to accept women with no such action to make 59 women-only colleges -- running from Hood in Maryland, to Mills in California -- accept males?

MR. FLEISCHER:  The President does not comment on court cases.

Q    What do you think he thinks, are?

MR. FLEISCHER:  He thinks he thinks he doesn't comment on court cases.  (Laughter.)

Q    Ari, are any other members of the Bush family, including his parents or his brother and sister, have investments in Enron and have they sustained the same kind of losses that they did, as his mother in law?

MR. FLEISCHER:  I don't know.  Anybody who is covered under financial disclosure laws, you'll be able to take a look at.  But I don't know the answer to that question.

Q    Well, not all of them.

MR. FLEISCHER:  I don't know the answer to the question.  I can tell you that the fastest way to find out I'm sure is to take a look at what is publicly known.  But I don't know the answer; I haven't spoken to his brothers or sisters.  I know what the President said, of course, about his mother in law, because the President said it.  But you can ask directly, I don't know the answers.

Q    Can you take the question?

Q    On Monday we understand the President talked over the phone with the President of Mexico.  Can you give us a readout of their conversation?

MR. FLEISCHER:  I know they spoke briefly yesterday or the day before yesterday.

Q    I think --

MR. FLEISCHER:  Pardon me?  Yes, I think the day before yesterday.  Let me see if we can't get you something after the briefing, because I don't have anything with me; I haven't talked with the President about that particular phone call.

Q    Two questions.  First of all, could you take Ben's question, at least insofar as the family members who are not covered by the financial disclosure --

MR. FLEISCHER:  I take questions for the President; I don't take questions for his whole family.

Q    But he opened the door to this yesterday.

MR. FLEISCHER:  I understand.  I'll see if there's anything I can help you with.  The point is the same.  Whether somebody owned stock, sold stock or they owned stock and held stock -- they all lost.  And they lost because of the accounting and the manner in which Enron handled its finances, that put tens of thousands of investors and pensioners in a spot that none of them deserve to be in.

Q    But some of them cashed-out beforehand.  I mean, some of them were able to cash-out before the stock fell.

MR. FLEISCHER:  That's correct.  You had a second question?

Q    When the House was dealing with economic stimulus, the President -- the House passed things, included things in its package that the President did not agree with, did not support.  The President supported that bill to keep the process moving, to get it to conference.  Why would the President not adopt the same approach to the Senate vehicle, a Daschle vehicle, for example, that may contain things that he wouldn't agree with or not contain things he did support for the same reason?

MR. FLEISCHER:  Sure.  And you learned that those were the President's reflections about what was in the House bill the day the House passed it.  And if we can arrive at the beautiful day where the Senate passes it, you'll be able to know definitively what the President thinks about the various provisions in it.

Up until that point, it's speculation about what may or may not be in the Senate bill.  So if the Senate were able to pursue that same successful path of the House, then I think we could all learn the answer to that question.  And the only way for that to happen is the Senate to get together to do it and that's where the President still is hopeful and, based on today's meeting, perhaps it will be done.

Q    On the stimulus.  Just if you looked at the details of the scaled back plan that Daschle is proposing and you saw the details of the common elements, do you completely rule out using that as a vehicle to go to conference with the House, to get a --

MR. FLEISCHER:  I really have nothing new to add.  I've answered that question a variety of ways as often as I can.

Q    Ari, just one back on the budget.  You said that prior to this that if we had the projected surplus of $5.6 trillion it would have been spent anyway.  Does the President regard surpluses fundamentally as an indication of over taxation that needs to be avoided?  Or does he regard it as an essential condition to paying back the debt?

MR. FLEISCHER:  The President views surpluses as a sign of economic growth, which is why he's cut taxes, so they can be put back on an upward path by creating growth, which creates surpluses.  The President views surpluses as a very helpful way to pay down the debt.  But the President's fear has always been that in the town of Washington, D.C., if the politicians get their hands on the money, they're going to spend it.  And that applies to politicians in both parties.

And if you take a look at what's happened over the last many years, there's a lot of proof in both parties to support that contention that the President has.  So surpluses, if they were able to be used for the purpose of debt reduction would be very economically beneficial to the nation.  Surpluses that would be used to spend on creating a permanent bigger government will lead to increased deficits and to more pressure on politicians to spend more money.

Q    Ari, you spoke somewhat enthusiastically a moment ago about the good things that happen when the United States gets involved.  The evidence of that is Afghanistan.  I'm curious what the United States involvement will be in the next couple of days in the Middle East.  We had a temporary cease-fire that now, by all accounts, has completely collapsed.  Violence has again taken over -- Anthony Zinni doesn't appear to be heading to the region anytime soon.  What new ideas, what new efforts, what anything at all does the administration intend to do to prove, perhaps, to that Middle East that U.S. involvement directly can achieve some beneficial results?

MR. FLEISCHER:  The United States is going to remain deeply involved in events in the Middle East.  The events in the Middle East are unique; they are not like any events anywhere else in the world.  The complications are unique.  The history is unique.  And the President has made it abundantly clear that he will remain engaged.  Secretary Powell continues at the President's direction to have conversations with officials in the Middle East.  And the President will continue in that vein himself.

But you put your finger on something very important.  A lot of progress was being made.  It was being made, thanks in good part to a speech that Secretary Powell gave where he laid out a vision of a more comprehensive peace in the Middle East; President Bush's speech at the United Nations where he talked about the need for Israel to be able to live in a secure border; and then the President saying to the United Nations that the Palestinian people should have a Palestinian state.

General Zinni was then dispatched to the region.  And all the good work and all that good effort was then derailed as a result of the arms shipment that was received and paid for by the Palestinian Authority, which has immensely complicated the prospects for getting a return to the peace in the Middle East.

Q    Where do the Israelis get their arms?

MR. FLEISCHER:  There's a difference, Helen, and that is --

Q    What is the difference?

MR. FLEISCHER:  The targeting of innocents through the use of terror, which is a common enemy for Yasser Arafat and for the people of Israel, as well as --

Q    -- Palestinian people are fighting for their land --

MR. FLEISCHER:  -- I think killing of innocents is a category entirely different.  Justifying killing of innocents for land is an argument in support of terrorism.

Q    Ari, finish making the point you were making about the result of the discovery of the shipment and what it has done to this process.  Please continue that thought.

MR. FLEISCHER:  And as a result of the arms shipment, it has made it immensely more difficult to pursue the path of peace.  It has made it much more difficult for all parties concerned, because the common enemy has got to be terrorism, in the President's opinion.  And if weapons are going to be bought for -- paid for so they can be used to pursue terrorism, then it makes it very hard to have a peace process that's a realistic one or a meaningful one.

Having said that, the President will continue to work with the parties to explore ways that it can be done, but I'm not making any explanations about how uncomplicated it is because it is a complicated one.

Q    Ari, can I just follow on your Libyan statement that you came back to?  Is there any evidence whatsoever that the Libyans have taken the proper steps in order to possibly be taken off of the list of rogue nations?

MR. FLEISCHER:  That's a separate issue and that has to be resolved bilaterally.  And it cannot even be resolved bilaterally until Libya has fulfilled the Security Council requirements.  And the discussions with Libya into fulfilling its Security Council requirements need to be had with the families involved of the Pan Am Flight 103.  So it's a very separate measure from what you saw this morning.

Thank you.

END                              1:03 P.M.  EST

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