Press Briefing on the State of the Union Speech (Text Only)

Press Briefing on the State of the Union Speech
Room 450
Eisenhower Executive Office Building

State of the Union 2007

PARTICIPANTS
Counselor to the President Dan Bartlett
National Security Advisor Steve Hadley
Deputy Chief of Staff for Policy Joel Kaplan
Press Secretary Tony Snow

MR. SNOW: Welcome. This is an on-the-record briefing. The material before you, these handouts -- the embargo is now broken on these, so these are reportable.

What we're going to do is to give you a detailed overview of the President's proposals in the State of the Union address. Steve Hadley will lead off with a summary. Let me just give you a description of the address. It roughly breaks down 50/50, domestic and foreign policy. The President will have -- and I will allow Steve to characterize the foreign policy aspects. Joel Kaplan, Deputy Chief of Staff for Policy, will run through the policy items, what you're going to find in the State of the Union policy initiatives book. Dan Bartlett also will do some communications framing. We will have questions, and we have to be out of here promptly at the top of the next hour.

MR. HADLEY: The President had an opportunity to lay out his new approach, new strategy for Iraq here two weeks ago Wednesday. As a consequence, he's not going to replow that ground in the speech tonight. What he's going to do is step back, make the point that the struggle in Iraq is part of a broader struggle between forces of democracy and freedom and the forces of extremism that support terrorism and tyranny. He's going to remind the American people that that is the struggle we see in the Middle East, and that Iraq is a part of that, and it is not just a military struggle, it is a broad struggle that is an ideological struggle between two very different views of the Middle East and what life in the Middle East should be about.

He, in that context, is going to talk about the consequences of failure in Iraq, not only in Iraq for Iraqis, but also the consequences of failure in the Middle East and beyond. He will make the point that it will strengthen extremists and terrorists, potentially give them safe havens from which to attack neighbors and also give them the capability to plan against targets here in the United States. So the security of the American people is very tied up with how we -- how the situation in Iraq plays out.

It would also strengthen Iran, an Iran already emboldened by diplomatic success seeking a nuclear weapon, and the prospect that that could pose for American interests in the region. And it would also undermine those in the region who have stood on the side of freedom and democracy, and have taken severe personal risks to standing up against the terrorists.

So it will be a lot about what is at stake. He will talk a bit about the strategy. He will emphasize the point that it is time for the Iraqi government to act, that he has made that clear, the kinds of things the Iraqis need to do. He will also mention, though, and emphasize the fact that security in Baghdad is essential if we are going to make progress with our overall strategy in Iraq. That is really the key issue that is being debated on the Hill today, and why he continues to believe that security in Baghdad is the key for progress in the region.

He is also going to talk about the broader issues in terms of the war on terror. He is going to mention the effort we are making, and both the successes and challenges that have occurred in Afghanistan; the undertakings to try and move towards peace in the Middle East and to implement the vision of two democratic states living side-by-side in peace and security. He's going to talk about the importance of maintaining the commitment and a clear voice on behalf of freedom in places like Cuba, Belarus, and Burma. He's going to talk about the importance of helping the people in Darfur.

Finally, he's going to emphasize that the foreign policy of the United States is not simply about war on terror, as important as that issue is, but that it is also about confronting the ongoing challenges of hunger, poverty, and disease. He's going to talk about his commitment to his initiative against HIV/AIDS, about the malaria initiative. He is going to call for Congress to continue to fund these initiatives, including funding the Millennium Challenge Account, and make the point that the foreign policy of the United States is not just about making the world safer, it is also about making the world better, and the elements of his program that are directed at that objective.

On the domestic side tonight, the President is going to lay out a positive, comprehensive vision for addressing real problems, real challenges facing Americans today, and he's going to provide real solutions.

I think you heard already in the past couple of days that the President did not want to do a laundry list-type approach that's kind of become the formula for State of the Union addresses. He wanted to focus on a handful of the most serious, biggest challenges that we face where there's real interest and real opportunity to work together across the aisle to come up with good solutions to those problems on behalf of the American people. And I'll just discuss briefly what those are, and then I guess we'll turn to Dan and some questions.

First of all, the President, because he wants to focus on a handful of key issues tonight, he'll note that he's going to address the state of our economy in remarks next week. He'll focus on three economic reforms that he does want to discuss very briefly related to the budget. The first is, he will reiterate that because of the strong economic growth and the revenues that that's generated, that we now have an opportunity to balance the budget within five years, and to do so without raising taxes on the American people, but rather to restrain the spending appetite of their government.

He'll also touch briefly on the challenge of earmarks and the need to make sure that the Congress reforms the process that allows special interest provisions to be inserted into bills, and to call on Congress to expose all earmarks to the light of day and to a vote of Congress, and to at least cut them in half by the end of this session.

Finally, on the budget, he'll talk about how our improved budget position gives us an opportunity to address the real, long-term fiscal challenge that we face which is in our entitlement programs, Medicare, Medicaid, and in particular, the opportunity to save Social Security.

The President will then turn to the four initiatives that he wants to discuss in some detail. The first is health care. You've heard, I think, a fair amount about that in the last couple of days, so I'll try to keep it brief on that. The President will lay out his plan for ensuring available and affordable access to health insurance for more Americans.

There are two related proposals to do that. The first is to reform the incentives in the tax code that work against a fair and efficient health system, in particular two things: The President will propose a reform that -- the current tax code discriminates against those who purchase their health insurance on their own, as in they don't get it through their employer. He wants to eliminate that bias in the tax code. He also wants to eliminate the bias in the tax code in favor of the most expansive and expensive health insurance policies.

The way he'll do that is by proposing a standard deduction for health insurance for anybody who has health insurance, whether they buy it from their employer -- or rather whether their employer provides it, or whether they buy it on their own, and regardless of how much it costs. The deduction is $15,000 for a family, $7,500 for individuals.

This helps three groups of people. Today, if you get your insurance through your employer, the President's proposal for 100 million people, 80 percent of the people in that category, the President's proposal will result in a substantial tax benefit. If you're in the category of people who currently provide health insurance on their own, by eliminating the discrimination in the code that group of people will get a substantial tax benefit. A family of four making $60,000 will get a $4,500 tax benefit. And the proposal will help millions of uninsured for the first time get a tax benefit that will put health insurance within reach.

Now, I say within reach because, while it's a substantial benefit, there are a number of low-income and chronically ill people for whom it will be a big help, on average about $3,300 but still not quite enough. And the President has a second proposal called Affordable Choices. And under that proposal, the Secretary of HHS will work with states that are willing to provide access to private affordable health insurance in their state -- if they're willing to do that, the Secretary of HHS will provide assistance in helping the state make sure that their low-income and uninsured can actually get access to that private affordable health insurance. So that's the health insurance proposal that the President will lay out tonight.

He'll also lay out a bold and ambitious proposal on energy. As the President described in last year's State of the Union, we have an addiction to oil, and he'll talk tonight about how that creates a national security risk for our country because it leaves us vulnerable to hostile regimes and to terrorists.

The President will announce a bold new initiative to reduce our gasoline usage by 20 percent in 10 years, by 2017. We're calling it 20 in 10. And the way he'll do this is with two proposals. To address our dependence on oil, you have to address the supply side and you have to address the demand side. On the supply side, the President will propose a new alternative fuel standard of 35 billion gallons -- mandatory fuel standard of 35 billion gallons by 2017. That's nearly five times the current renewable fuel standard of 7.5 billion gallons by 2012. So it's a very ambitious goal, but it's one we think is achievable.

On the demand side, the President will propose that Congress authorize a reformed and modernized CAFE, fuel economy system for passenger cars, that will allow the Secretary of Transportation to increase fuel economy in the same way we've done for light trucks, and by doing so, save up to 8.5 billion gallons of fuel. Together, the 35 billion gallons from the alternative fuel standard represents 15 percent of our gasoline usage in 2017; the 8.5 billion gallons that we're assuming from the increased fuel economy standards represents 5 percent of the gasoline usage in 2017. Together that will allow us to save 20 percent of our gasoline usage in 2017.

Obviously, that's a very ambitious, but achievable goal. It will -- while it will help address our dependency on foreign oil, it won't eliminate it. And so the President will also call on Congress to step up our production of domestic oil and resources in environmentally sensitive ways, and he will call on Congress -- in order to protect from severe disruptions of our oil supply in the future, he'll call on Congress to double the current capacity of the Strategic Petroleum Reserve to 1.5 billion gallons.

The President will also talk about education and immigration in the speech. On education, the President will call on Congress to strengthen and reauthorize the very successful No Child Left Behind Act, which was a signature, bipartisan achievement of the President's first term. The No Child Left Behind Act is working. It's closing the achievement gap. We've raised standards for students across the country and improved accountability. The President will insist that Congress, in reauthorizing it, strengthen the law, but also make sure that Congress does not water down the law or backslide and call it reform.

Finally, on immigration, the President will call tonight for Congress to engage in a serious and conclusive debate on immigration, so that they can pass and he can sign into law comprehensive immigration reform. He'll again highlight that comprehensive immigration reform requires us to secure our borders by doubling the number of Border Patrol and increasing our investments in infrastructure and technology. It requires improving our work site and interior enforcement. But even those measures alone will not secure the border unless we have a temporary worker program which will take pressure off of the border.

In addition to those three components, the President will talk about the need to address in a rational and humane way the millions of undocumented workers who are currently here, and he'll call on Congress to do that without animosity and without amnesty. Finally, any comprehensive immigration reform will include efforts at assimilation, to make sure that new immigrants to this country share in the values that have made the country great.

MR. BARTLETT: I'll just be real brief since most of this has been covered, and get to the questions. But, in essence, the message to the American people is, want to be a gracious President who welcomes and congratulates a Democratic Congress, but also to speak directly to the American people and say, hey, there are big things we can do together. There are big issues in which the American people expect, regardless of what side of the aisle you sit on, is to cross that aisle and work together. And the President -- through the policies he will outline tonight and what Joel has just described, we believe gives us a really unique opportunity to try to get some big achievements in the coming legislative calendar.

They're difficult issues. They're ones that have been attempted to solve in the past and have come up short. We go into this process with no illusions about the atmosphere in which we're operating in. But the American people send a signal that they want Washington to act differently, they want their leaders to try to find common ground. And we believe both -- when you talk about the elements of the domestic agenda, as well as many elements of the war on terror, obviously there is a very emotional and highly charged debate when it comes to Iraq -- but there are many elements to this war, there are many elements to this foreign policy in which there has been broad bipartisan support. And collectively, if you look at the agenda the President will outline tonight, we do believe it's one that can serve as a basis for bipartisan outreach.

MR. SNOW: All right, what we're going to do is, as in a press conference, we're going to group the questions by topic. We'll begin with the foreign policy questions. Once we've exhausted those, then we'll march through the policy items.

Q Thanks. How much will he talk about Iran tonight? And how specifically and how tough will the language be about Iran?

MR. HADLEY: I don't think he'll break any new ground on Iran. He'll talk about the challenge that Iran poses in the region. He'll also talk about the extremist challenge, which is both a challenge from groups, Sunni groups like al Qaeda. He'll also talk about the challenge of Shia extremists. And, of course, a number of those are supported by Iran, as you know.

So it certainly is a part of the context in the Middle East. It's one of the things one has to consider about what our actions in Iraq and elsewhere would do toward strengthening and empower Iran and feeding Iran's ambitions in the region. But I think it will be things that you've heard from him before, said in a broader context.

MR. SNOW: Let me suggest if you have questions, keep your hands up a little bit so folks with microphones can identify you. That way we can move a little more quickly.

MR. HADLEY: Well, the President has been very clear. We think that there is -- we hope there is an opportunity for a democratic transition in Cuba, where the Cuban people will have an opportunity really for the first time to take control of their own future and define the kind of government they want going forward. We hope that is an opportunity that is going to come in the imminent succession that we see there.

The President has been very clear about Belarus. He has hosted dissidents and those who support freedom and democracy in Belarus in the Oval Office. He's been very clear that it's time for the Belarusian people again to be able to step forward and to find their own future.

And same in Burma -- I mean, we've been very clear. We were pleased to have an opportunity to get a Security Council resolution. Sorry that it was vetoed by two countries, but again, it put the issue of Burma as an issue for the international community. So it's an ongoing effort.

Q Steve, if you could talk broadly about what he's talking about the global war on terrorism and Iraq. Does he really say anything new in talking about what effect it would have in the region and the world if there was failure in Iraq? And also I know you said he wants to look forward in this, but does he again acknowledge mistakes or failures in the past? Just basically, is there anything new on Iraq and global war on terrorism and the mistakes?

MR. HADLEY: Well, I think it is. I think you'll find it's a very good statement about the consequences in the region. We've been doing a lot of outreach to members of Congress over the last two weeks. And one of the things we've heard is that Americans don't understand the connection between what is happening and the war on terror, and doesn't understand the connection between the outcome of the war on terror and security here at home. And what the President is going to do is sort of walk through those connections. And I think you'll -- I'll let you hear it from the President tonight.

Q Is he going to do the mistakes part? Is he going to talk about any failures in the past again?

MR. HADLEY: Well, he's covered a lot of the specific issues about Iraq, what our strategy was, what we've learned, particularly in terms of describing how the new Baghdad security plan differs from what we did in the past. This is an effort, really, to step back and paint a broader picture. So in some sense, he did that in the speech he gave two weeks ago Wednesday. I think it's a different speech with a different purpose tonight.

MR. BARTLETT: I think just to amplify on that just for a second, Steve, the way he will talk about the kind of -- how this war has transpired, he'll talk about where we went from 2005 to 2006. In 2005, there were a lot of advancements in the democracy agenda -- and Steve can talk more to this -- and in 2006, the enemy fought back across the fronts, whether it be in Iraq, whether it be in Lebanon, whether it be in Afghanistan and elsewhere. And it's a good way to have -- the President can use this as an opportunity to discuss the nature of the enemy we're facing, why it is -- like I said, the interconnectedness between Iraq and the other elements of extremism, whether it be Shia-Sunni, as Steve described. So there will be some difference, some new language and new context to something you've heard him talk a lot about.

Q Steve, back on Iran, if I could. As you know, in the last weeks there's been quite a debate over the degree of Iranian involvement in both the insurgency and the militias in Iraq. Will the President produce new evidence, new information about what Iran is doing in Iraq? And if not, why not?

MR. HADLEY: Well, there's already a lot out in the public on that. You've reported about the detention of Iranians in Iraq engaged in the movement of equipment and other things into the country, and activities that threaten our men and women in uniform, and also Iraqis. So a lot of that evidence is already out. And what we're doing about it is something the President addressed in his speech on Iraq. And you've seen some of the evidences of that over the last two weeks. So I think that issue has already been pretty well framed.

MR. BARTLETT: No, I think you're right. I think that, again, that was a specific context to how the new Iraq strategy was going to be specifically outlined. While the President will reiterate key elements of the President's Iraqi strategy, talking about why we need to secure Baghdad, the reinforcements needed to do just that, he'll make that case again, just not at a level of granularity on Iran and other elements that you would hear. But he'll talk about our diplomatic strategy in parts of --

MR. SNOW: And furthermore, Iran does fit into the overall picture of the global terror threat.

Q Is the doubling of the Strategic Petroleum Reserve tied to foreign policy in that you are afraid that there's going to be an interruption of oil flow from the Middle East?

MR. SNOW: No, it's merely a matter of providing for energy security. This has been American policy for some time. As U.S. consumption has gone up, the capacity of the Strategic Petroleum Reserve to provide a cushion has, in fact, decreased over the years, and what we're doing is we're rebuilding the cushion. In the -- it certainly does fit into the overall picture of energy security, but it is not specifically designed for that.

Q Real quick follow-up, Dan. You were talking about 2006 being the year when the enemy fought back. If you're listening to this speech, will you, as a listener, get any context of timing in the President's mind, how long Americans are expected his new plan to take, or how long we would expect the enemy to fight back?

MR. BARTLETT: Well, I think -- what I meant when I said the enemy would fight back -- in '05, we saw elections in Iraq, we saw advancements in the Cedar Revolution in Lebanon, we saw Afghanistan, assembling of a legislature made up in large parts of women. There were just huge advances made in '05. And as the President will say, the enemy took stock of this, adapted and struck back with quite a fury across-the-board in the Middle East, and obviously, including mostly in Iraq.

And the President has made clear in his speech two weeks ago that a commitment in Iraq is not open-ended, that we have to have a willing party, because, ultimately, Iraqis have to solve many of the difficult problems facing their country. He made the assessment that as they demonstrate their intent to take these on, we have to make sure they have the capability to take them on, and he will speak specifically to that, as well.

But the President has also made very clear, and so have many of the generals and others who have been testifying, to talk about the specific elements of the military campaign it would not be appropriate to say that this is a 90-day or a 120-day campaign, 180-day campaign, because those types of operational predictions feed into the hands of the enemy. But this is going to be a sustained, forceful effort, as General Petraeus testified to this morning.

Q Can you tell me, will the President make any mention of North Korea? And, if so, what will he say? And, also, will he ask for the international community to reach out with regards to Iran or Iraq?

MR. BARTLETT: Well, he will definitely talk about the fact that in order to advance American interests in the world, we can't do this alone, that the civilized world plays a key role. And we have a diplomatic strategy on many fronts, including the six-party talks with North Korea; where it talks about our diplomacy through the United Nations; when it comes to Iran, talking about working with our allies and friends in the region to bring about peace in the Middle East, two states living side- by-side. So he will talk extensively about, and comprehensively about, our diplomatic strategy across many different fronts.

MR. BARTLETT: Well, as you know, those six-party talks are underway and he's not going to be doing real-time analysis of that. But he's going to talk about the importance of having many voices speaking to make clear our intentions when it comes to North Korea's nuclear ambitions.

Q Will the President respond to the Senate resolutions that are opposing the troop increase?

Just to amplify a little bit on what Tony just said there in his answer -- (laughter) -- is that the President is going to articulate why he made the decision he made with this new strategy, why he believes it has the best chance for success, what the ramifications of failure would be. And he's going to ask this Congress to give it a chance to work and to support our troops. And that's an important message, not only for the United States Congress, but there's an important audience with the American people.

He understands and will acknowledge the fact that there is skepticism. He's listened to their views. He understands that there are disagreements when it comes to the decision he made. But he did -- and our administration is doing -- what many people, including the new top military commander who is going to Iraq, has the best chance for success. And he'll make that case tonight.

MR. SNOW: It's important to realize, as the President stressed before, there seems to be substantial agreement on a lot of things: Number one, you can't afford to have a failure in Iraq -- and he will explain more clearly to the American people exactly what that would entail and why it would be disastrous; number two, people want to support the troops; and number three, people want Iraqis in the lead -- all of which he will address. And then he'll make the further point that it is his view -- and he'll explain why -- that having a larger troop presence is essential for success in Iraq.

But there will not be direct engagement on resolutions on the Senate floor. There will be, as Dan pointed out, a forceful and clear argument of why the President, after a very exhaustive process of looking at all options, including some that have been raised on the floor of the Senate and elsewhere, has chosen this particular way forward.

Q Dan, the 2002 State of the Union was, of course, when they used the "axis of evil" phrase for the first time, and it suggested a connection of some kind between the various terror forces and enemies. Is the President going to do anything tonight to suggest that the forces in the Mideast are in some way allied against us, that there is interaction beyond what we've seen in Iran and Iraq?

MR. BARTLETT: Well, I think as you've heard the President articulate, it's more about the forces of extremism against moderation in the Middle East, and that the American -- United States of America has an interest to see that the moderates prevail; that it is a brutal and determined enemy that wears more than one face -- it's not just al Qaeda and Sunni-based extremists like we're facing in many parts of the world, as well as in Iraq, but also a Shia extremism that has to be just as concerning to the American people -- who their agents are, Hezbollah, Hamas; who they rely upon, state actors. Those are things of real concern. But both of those extremist elements are trying to snuff out the moderate forces in the Middle East, and we have a stake in seeing for our own security interests that the moderates prevail. And that's the argument he will make tonight.

Q Will the President say anything tonight to convince skeptics that Prime Minister Maliki has changed his heart and he is willing to fulfill his end of the deal, and stop political and sectarian interference?

MR. BARTLETT: He'll make very clear that a key element of the new Iraq strategy requires an active and willing partner in the Iraqi government, that they have to take steps to achieve concrete benchmarks that everybody recognizes have to be achieved in order to get political progress on the ground. The President also has made clear that there's not a military solution alone to this problem, that there has to be the type of reconciliation and reconstruction in that country for them to advance toward a more mature democracy that can meet the goals we all have and require less support from the United States.

I think the interesting thing -- and the President won't go into these details tonight -- but that there have been some preliminary but encouraging signs by the Maliki government. If you look at reports talking about Jaish al Mahdi and other extremist elements that have been taken down in the last several weeks, you look at some of -- it looks like there's more progress being made on the oil law and those things. So we're seeing a clear recognition out of Baghdad that the Iraqi government must make these types of advances in order to continue to have the support of the United States.

Q Thank you. Will the President elaborate more on the benchmarks for the Iraqi government and the consequences of not meeting those benchmarks?

MR. BARTLETT: Well, we've talked extensively, and he will list, specifically, many of the benchmarks that not only the United States expects them to meet, but the Iraqi people expect them to meet. And this has been a topic of conversation for the last two weeks, about linking and consequences for benchmarks. I think the Iraqi political system, the democracy you have on the ground there, as well at the democracy here, demonstrates that there will be consequences if these benchmarks are not met.

Everybody recognizes -- the President said that our commitment is not open-ended. So he'll make clear there are specific, measurable benchmarks both on the security front, and the political and economic front that the Iraqi government must make progress on. And the good thing is they recognize that, too. Their own electorate expects them to make similar progress.

Q Dan and Tony, the President made, I believe, five speeches in the runup to the election in which he cast the global war on terror as the decisive ideological struggle of our time. He talked about Iraq as the central front in that war. Now you're saying that the public does not get the connection between what's happening over there and what might happen here. So why do you think, after all those speeches, the public still doesn't get that connection? And what is the President going to say tonight that is different, that he believes will change the public's mind?

MR. SNOW: Well, I think what the President understands is that the public wants to see progress. And he is going to talk about the way -- not only in the context of the way forward in Iraq, but also, once again linking up -- because there does seem to be a sense that the war in Iraq somehow can be segregated, for instance, from al Qaeda. Quite often you'll hear people say, well, why don't you go after al Qaeda, as if that is a separate threat, where, in point of fact, it is part of a larger war on terror and Iraq does remain the central front. He will talk about that. He will cast it as the defining ideological struggle of our time.

But it is important from time to time to go through and talk with the American people about what the stakes are and how it fits into a larger strategy of keeping America safe and defending American interests. Just because -- he gave speeches in September and they were well received, and it's important to talk about that again.

MR. BARTLETT: Just to add to that, Sheryl, I think where the disconnect comes, or where people may lose sight of that is because of the increased nature of the sectarian violence that has taken place in the last quarter -- half and quarter of this past year, is that appearance to the American people that this is just Iraqi-on-Iraqi, this doesn't have to do with the war on terror. And what is incumbent upon the administration and others is to explain how very much it has an element to the war on terror because the instigators of the sectarian violence, the ones who have a stake in seeing one extremist side of the sectarian violence prevail -- whether it be al Qaeda or former Saddamists on one side, or Shia extremists on the other side -- who are using innocent Iraqis on both sides of the sectarian divide as essentially cannon fodder in a much broader extremist movement. And it's a very unsettling development in Iraq.

And the calculation the President had to make is that, should we help in a sustained way the Iraqi government to break this current level of sectarian violence going on in the capital? And our judgment is, yes. And if we didn't, it will have severe consequences on every element of the war on terror, both inside Iraq and outside of Iraq.

But that is, I think -- some of the things that have happened over the course of the last several months is because of the sectarian nature of this violence, is almost expected to think that the American people would lose sight of the broader context of this war.

MR. SNOW: Okay, let's do a couple more on foreign, and then we need to get to domestic.

Q To kind of follow up on Sheryl's question, is he going to use the phrase "the new way forward" tonight in describing the strategy? Because as I recall -- I could be wrong, but I don't believe he used that phrase during his Iraq prime-time address. It was on all the fact sheets, correct?

MR. SNOW: Yes, we'll have to go back and look. It's still -- we're still talking about the same, it is a new way forward. I don't know if it appears in the speech.

MR. BARTLETT: We thought that was an important point -- there was a lot of -- in the confirmation hearing for General Petraeus, there was a lot of talk about what is just 21,000 more troops to do, that's not -- and General Petraeus I think eloquently talked about it's not just how many, it's how you use them, and underlined the fact that this is a different strategy, expecting different results.

MR. SNOW: And also with a different role for the Iraqis, which is the key and pivotal element.

Q I guess I'm describing it as sort of the certainty. By using that phrase or not using that phrase, is that reflecting the lack of control that the --

Q Dan, that's the strongest I've heard you talk about actual benchmarks. In fact, I think you and the President have kind of gone out of the way to not say there were specific benchmarks, other than there were to be consequences if some troops didn't -- will he use the word "benchmarks," there are benchmarks in this?

Q But specifically, will he say, this has to happen by this date, that has to happen by that date? I think I'm still vague --

Q But that's your line you won't cross -- he won't talk about dates, but are there dates?

MR. BARTLETT: He used a date two weeks ago, when he said that of all -- handing over the security of all the provinces to Iraqi lead by November of 2007. That's a specific date.

Q But that's sort of a vague -- if troops don't -- right, handing it over by then. But if troops don't arrive by X date, this date, if we don't have an oil deal by X date -- are they that specific?

MR. BARTLETT: We are not doing what others have done, is say, if this doesn't happen, we're going to withhold this funding, or if this doesn't happen, we're going to withdraw troops from here. And that is not a part of our strategy.

Q Okay, so I don't get what the difference between that and benchmarks. I don't --

MR. BARTLETT: To clearly articulate, and very publicly, in a very transparent way, the indicators and the measurements we will use to see if the Iraqi government is succeeding in doing the things that the Iraqi people and the American people and the international community expect them to do, as I said, on the military front, on the reconstruction front, the reconciliation front -- this goes to the oil law, it goes to the provincial elections, it goes to reconstruction dollars being evenly distributed, even to Sunni provinces. It goes to a lot of different -- reform the de-Baathification law. These are things that everybody recognizes as the benchmarks that need to be met.

And the President generally has said, this is not an open-ended commitment, you have to make progress in these. There are others who say you should get more specific, and tying specific consequences to specific benchmarks. The President won't do that tonight.

Q Why was the decision made not to directly address the resolution? This is a huge issue before Congress. Did he deliberately decide not to --

MR. BARTLETT: I think what you're seeing is that there is multiple ideas, multiple resolutions. There's a

-- the House of Representatives has ideas; the United States Senate has ideas; there's five senators here, there's seven senators here. There's a lot of debate going on in the United States Congress, which is important. And they have a role to play and they're going to make their views known.

But what the President feels obligated to do, not only speaking to the Congress, but to the American people, is to articulate the strategy that he has chosen and explain why he believes it will work and what he thinks will be the consequences if we fail in Iraq.

Q I just want to follow up on what Martha was asking, because maybe I took the wrong note here, but I thought you said the President will list specific benchmarks and consequences. So what consequences are we talking about?

MR. BARTLETT: I apologize if I misspoke. What I was saying was that there will be specific benchmarks he will articulate, as I just said -- reconciliation on the side of reform, de-Baathification laws, talking about an oil law; those things.

The consequences I said will be the fact that the Iraqi people and the United States of America do not expect an open-ended commitment to a government that is not meeting these goals. In a general sense, I am trying to make -- to clarify to both of you -- and I'm not saying that there are specific ultimatums or consequences tied to each of these benefits -- these benchmarks. But what I am saying is that everybody recognize that this is the decisive period for the Iraqi government. This is the period where they have to step up and make key advancements on the political front, the reconstruction front and the security front. And their own elected people are going to hold them -- their own political process is going to hold them to account and the President has made clear to the American people that we expect them to make progress on those accounts.

MR. SNOW: And to add to that, there have been some signs -- one does not want to leap to conclusions based on those -- you have seen more aggressive and forthright action against Shia militias. We all not only have the captures, but we also have movement. You have changes in behavior on the part of Muqtada al Sadr in terms of the kind of public stance he's taking in also telling his people to go back to the Council of Representatives. That made possible a quorum that's going to enable the legislature to move toward passing such things as oil laws and de-Baathification reform.

So again, we don't want to make too much of it, but on the other hand, you're starting to see some movement. There have been reports of brigades beginning to make their way toward Baghdad. All of those things that the American people ought to keep an eye out for.

Q Dan, I wonder if you could talk about the overall political context for this speech. He's arguably in worse shape than he's ever been for one of these speeches. How is that reality reflected in this? How does it change his goals? Does he have to show he's relevant, especially on domestic issues?

MR. BARTLETT: Well, I think it demonstrates that the power of ideas can transcend partisan differences in Washington. And if you talk about the issues the public cares about, and you put forward innovative, bold ideas that the American people, regardless of what the polls say that day, will say, this is worth study, this is worth engaging the Democratic Congress on. And the Democratic Congress, understanding its new responsibilities to demonstrate that they can be just not the party of opposition, but to reach out and govern, that these are areas we think that you can find common ground. If you peel back all the rhetoric and all the campaign talk, these are issues on education, immigration, energy and health care, that the American people expect to see progress made by their leaders in Washington.

What the President will do, I believe in a very gracious way, is say, congratulations, now here are some big -- you know, it doesn't matter what side of the aisle we sit on, let's come together and work on these issues. Here are my ideas to how we can advance our goals in these areas.

MR. SNOW: And furthermore, the assumption in the question is talking about being in bad shape, he understands that as President, he has the ability to articulate issues and he's got a responsibility for dealing with them. And he's doing so, I think, in a refreshing and innovative way. These are bold proposals. You take a look at the health care and energy proposals, and they really do have incredible potential for transforming two areas of concern for the American people.

And as the debate proceeds and as people begin to grasp precisely what he's talking about, I think they're going to get a sense of a President here who really is being bold and visionary when it comes to dealing with these issues. And it's going to place -- it's going to create an opportunity for members of Congress who came to town saying, we want to demonstrate that we can work with the President and we can get things done -- you can get some very serious and constructive things done. And the President doesn't lay it out as a challenge or a confrontation, but in fact, as an opportunity to work together.

Q This is for Joel on the energy question, one factual question and then a broader question. The factual question: Is it your position that Congress needs to pass legislation on CAFE standards? That's not something that you guys can do on your own, that the Secretary of Transportation can't just order an increase in the standards?

And number two, just philosophically, are you able to discuss to what extent the President has -- in sort of the first part of his presidency, he really focused a lot on supply, on energy and drilling in ANWR and stuff, and this speech obviously seems like it's much more of a focus on the demand side. And if you could just explain how the President philosophically has shifted on that issue.

MR. KAPLAN: Thanks, Mike. It's been such a long time since I spoke, I'm just going to do my whole presentation again as a refresher. (Laughter.) But, no, the two issues --

MR. KAPLAN: On CAFE, our understanding of the law and the Department of Transportation's understanding of the law is that we could, today, simply increase the fuel economy standards for cars, but we couldn't reform the program in the way that we did for light trucks. And it's been the President's view for a long time -- it was the National Academy of Sciences' view when they looked at this issue that it would be a mistake to try to increase fuel economy within the current broken CAFE system that we have. It's not cost-effective. It encourages gaming. And most importantly, if you look back historically over the life of the program, it's contributed to a number of -- a very significant number of fatalities on the road.

So it is important to reform the system, and once we do so and Congress gives us that authority -- which we don't believe exists under the law -- then the President believes we'll be able to increase fuel economy on the demand side, and do it in a way as to save up to 8.5 billion gallons, which is a very significant increase. We've proven the effectiveness of this type of reform in the light truck context over the last couple of years. We want to extend that into the passenger car fleet.

The second issue, look, it doesn't seem to me that the President is just discovering this issue. He's the one in the State of the Union last year who said that we're addicted to oil. In his national energy policy five years ago he proposed a whole suite of tax incentives for renewable energy. We've spent billions of dollars -- I think it's $12 billion -- I'll have to check my figure on that to be sure -- $12 billion through this budget year on all kinds of advanced energy technologies. And as a result of those investments, and as a result of investments in the private sector, most importantly, we're on the cusp of some very exciting technological breakthroughs that will help us achieve the President's goal of reducing our gasoline usage by 20 percent.

So this is something the President has been focused on for a long time, and as a result of that focus and the ingenuity of the American people, we're very close to being able to do something we haven't in the past.

MR. SNOW: But, Mike, just to make a second point, when he talks about innovation, that's also talking about supply. It's simply talking about supply of alternative sources. He will also talk about environmentally responsible extraction of resources, such as ANWR. This also follows on -- this is an administration that has twice raised CAFE standards on light trucks. The President is not new to either of these and this really is an extension of principals he's been talking about for some time.

Q On the CAFE standards, the one measure you've got in here aimed at consumption is a measure that will impact a struggling industry and a struggling sector based in a struggling state. And I wonder, A, whether or not there was any consideration of looking at other industries or other ways at affecting energy consumption, and B, whether or not there's anything either in the speech or coming later that might soften the economic impact that that's going to have on the auto industry.

MR. KAPLAN: A couple of points. First of all, the President is talking about this issue in the terms of national security and what our dependence on oil -- what the impacts that has for our national security. As opposed to 30, 40 years ago, where we used oil in lots of sectors in our economy, right now transportation sector is the one that uses 97 percent of the oil. So if you're trying to reduce your dependence on foreign oil, you've got to deal with the transportation sector.

The President obviously recognizes some of the challenges the domestic automakers have been facing. He had a very productive meeting with CEOs of the Big Three a couple of weeks, a month or so back. And the President has got very bold economic policies that -- from his tax policy to, importantly, his health care policies. One of the big challenges that all businesses have these days is rising health care costs. That's particularly true in the manufacturing sector, and the automotive industry in particular.

The proposal the President is discussing -- proposing in the health care area will have a dramatic effect in reducing the overall cost of health care by reversing the inflationary pressures that exist today because of the incentives in the tax code to purchase the most expensive health care policies possible.

So there are a number of policies in place -- opening up markets overseas -- there are lots of policies the President is pursuing that address the concerns of struggling industries. We do think it's important, if you're going to address a dependence on foreign oil, that you've got to address both the supply side and the demand side.

Q Tony, yesterday you were a little reluctant to divvy up the pie about how this speech will break out. Can you talk a little bit more about the structure of the speech, domestic and foreign policy?

MR. SNOW: Yes, it begins with a section on -- first he will great the new Speaker -- it is an historic opportunity, so there will be some comments on the new Congress and the new Speaker. Then he will talk about the domestic policy sections. And then the back half of the speech -- roughly 50/50 -- the back half of the speech will be on Iraq, but also on the larger war on terror.

In addition, the President will be talking about diplomatic efforts; as Dan was pointing out earlier, that's an enormously important part of what we do. And the President also will talk about humanitarian elements, whether it be with regard to addressing malaria or AIDS, also is an important national security concern. So it's going to be a broad and thoughtful discussion of foreign policy. It is not simply half the speech on Iraq. Iraq certainly will come up, but to give people a sense of how all the pieces of foreign policy fit together, and that will also involve about half of it.

Q Will he be breaking any new ground at all on immigration? Or is this just going to be recasting of the longstanding proposal on that issue?

MR. KAPLAN: Well, what's new ground is that we've got a new Congress, and it's a Congress that we're hopeful will be very eager to take up in a serious, and as I said at the outset, conclusive way, this issue. The President is going to recognize that this is an issue on which convictions run very deep. But he thinks now is the time for the administration and the Congress to work together. He's laid out the principles of reform that, when packaged together, make up the type of comprehensive reform that's essential to really fix the problem. And I think he's hopeful, and we're all hopeful, that this new Congress is going to want to take up the challenge.

Q In reference to stem cell research, is the President going to talk about new medical advances made in the reference to amniotic fluid?

MR. KAPLAN: He's not going to mention that in the speech tonight. As I mentioned at the outset, the President wanted to focus this speech on a handful of specific issues. Obviously, there's a broader agenda that the President will continue to talk about. He had a very important -- we had a very important statement in the statement of administration policy when the stem cell bill was on the floor of the House. And we'll continue educating the American people and the Congress about the technological breakthroughs there, as well.

Q How will the President address the issue of going to 35 billion gallons of biofuels with today's limited infrastructure? And will he address the issues of hybrids and hybrid research funding?

MR. KAPLAN: Yes, he will mention, again, as he did last year, the importance of continuing the research and development, and hopefully very soon, commercialization of plug-in batteries and the things that are needed to take the next step in hybrid and electric vehicles.

MR. KAPLAN: Yes, thank you. As I said in the outset, what the President is announcing is an ambitious, but we think, achievable goal. But it's a technology push. Basically, as I mentioned, we're on the cusp of some very important technological breakthroughs, in particular, in cellulosic ethanol. As it stands now, we've seen a very dramatic increase just in the last couple of years in the use of corn ethanol. So, as a result, even though it was just a year or two ago that the 7.5 billion gallon mark was set for 2012, we're coming up quickly on that mark and we're going to surpass it within a year or so.

So we're going to be continuing to increase the amount of corn ethanol. But to reach the goal of 35 billion gallons equivalent in 2017, we're going to need to see some technological breakthroughs. And that's why the President is setting this goal so that investors, venture capitalists, researchers, scientists are all focused on that goal and can expedite and accelerate that technology. And we're optimistic that it can happen. And when it does, we'll be able to meet that goal.

MR. SNOW: I'm going to apologize. We are not going to be able to get to all the questions because -- at least I have to break out of here at 3:00 p.m., and I think these guys also have commitments, so we're --

MR. BARTLETT: The other thing that Joel made a little comment on, but the President will also make clear the benefit the environment will gain by this policy of a very ambitious pushing of the envelope on technology in an alternative space, and that it does help us address what he will call the serious challenge of global climate change.

MR. SNOW: As a matter of fact, at the end of the decade there will be -- the carbon dioxide emissions from automobiles and other such sources will actually stabilize and begin to decline in future years. So that's a very significant goal.

Q Actually, to follow on that, the fact sheet mentions that you expect that the CO2 emissions will be reduced about 10 percent a year from the energy initiatives. Should we look for any new language on climate change, any sort of philosophically new acknowledgments of the scope of the problem or what needs to be done to address it?

MR. KAPLAN: The President has acknowledged that global climate change is a serious challenge, and he'll acknowledge that again tonight. Most importantly, he'll acknowledge that the proposals that we've been discussing here on renewable fuels and increased fuel economy standards will have a dramatic effect on reducing the projected emissions of CO2.

So those things have an important effect, as do the continued investments we're making in clean coal technology. Just a month or so ago -- highly-efficient clean coal technology -- a month or so ago, it wasn't widely reported, but the Energy Department and the Treasury Department released about a billion dollars in tax credits to support the construction of nine next-generation, highly efficient clean coal, which is what's going to be essential in the future to reduce CO2 emissions further.

And the President will continue and will mention in his speech his support of safe, clean nuclear power, which if you're serious about climate change, you have to be -- you have to support clean, safe nuclear power, because that's the only source we've got today in ready supply that provides power with net zero emissions. So the President will continue to support those initiatives that have actually had a tremendous amount of success so far.

MR. SNOW: It's also worth noting that as early as 2001 the President was acknowledging a manmade component to global climate change, and has been making these commitments for a long time. There seems to be the notion that he's never discussed it before. He's actually been discussing it throughout the presidency.

We've got Paula, then Jim, then Deb, and I think that's probably going to wrap up what we can do.

Q A follow-up on climate change. There's a growing number of CEOs from a wide spectrum of industries that significantly contribute to greenhouse gas emissions who are calling for mandatory cap in trade, and have indicated that without that, what you're suggesting will not be enough, it will not be done quickly enough to reduce greenhouse gases before you reach actual environmental -- dire environmental and economic consequences. So why are you opposed to regulating industries that are calling for regulation?

MR. KAPLAN: Well, first of all, again, I want to just reiterate the President is putting on the table tonight something that will have very significant effects on the level of carbon dioxide emissions into the environment. We can do that because we've made significant improvements and significant enhancements in the technology for the next-generation of ethanol, in the technology for our automobiles; the CAFE standards we're talking about can be reached, we think, with technology that's literally on the shelf today.

So when you look at how you regulate and how you interact with industries, you need to focus on where they are in the technology development and what the costs will be on our economy. The President is announcing some regulations tonight that he thinks will have the benefits -- energy security benefits and the climate benefits, while not having harmful effects on our economy.

It's also important to note that under this President's climate change policy, we're making significantly more progress than any of our friends and allies who have adopted some kind of national carbon trading system. In between 2000 and 2004, while our economy was growing 10 percent, our carbon emissions grew by 1.7 percent, as compared to the European Union, which had economy growth of 7 percent and carbon emissions growth of 5 percent. So we've been making good progress under this President, and we'll continue to make progress with the types of energy policies the President is talking about tonight.

Q This is maybe for Joel and for Dan, but congressional reaction to the health care proposals that have been out since, I guess, Friday night has been almost withering. Labor groups have been very critical. Are you confident you're going to be able to get these changes through Congress? And have you had back-channel talks with them where you have important leaders lining up with you? Because on the surface, it doesn't appear that you do.

MR. KAPLAN: Well, first of all, I wouldn't say that's the case of congressional reaction. That has been the case of some members of Congress. One member of Congress who is obviously very important on the Democratic side in anything we do here is the Chairman of the Finance Committee, Senator Baucus, who have very -- who indicated, at least in the comments I saw, interest in the proposal.

Look, this is a bold, new proposal. It's going to take some time for people to absorb it and to understand it. I'll let Dan answer in a second. I, for one, am confident that when the new leadership in Congress takes a look at a proposal that improves the economic condition of more than 100 million Americans who currently have health insurance through their employer and focuses the majority of that benefit on the lower and middle income, a proposal that dramatically improves the economic condition of people who currently buy health insurance on the private market, which again, will have the most benefit for people in the lower and middle income quintiles, and most importantly, that helps uninsured for the first time -- to be honest, it's hard for me to see how anybody who seriously is interested in reforming our health care system and is concerned about the difficulties that people in low and middle income, in particular, face today with rising health care costs and the difficulty of obtaining insurance, it's hard to see how folks wouldn't want to have a conversation about that, learn more about it, and I think ultimately will see the wisdom of it and understand why it's a proposal that is in the best interests of all Americans.

And, as well, I should mention the second part again, of the Affordable Choices that the Secretary of HHS will be working on with governors and members of Congress. This is a very important announcement and a proposal for the federal government to help the states that are innovating in a way to get private basic insurance in the hands of their citizens, and in particular, their citizens who need it most.

So we've seen some initial reactions. Some of the reactions I've seen are better than the one you described. But this is a new, bold policy and I think when people -- for instance, a couple of editorial pages that don't often give us as much support that I think took some time to appreciate the proposals have I think recognized that this is a very serious and important proposal. And Congress, we're hopeful, will take it up.

MR. BARTLETT: Yes, I think there's a lag. The conversations we're having both with Republicans and Democrats, that there's a lot of interest in this proposal. It is very complicated, as I've learned over the last couple weeks, and you'll learn over the next couple weeks. It's very complex dealing with the tax code. But I think as this unfolds, people will give it serious consideration. And that's -- I think across -the-board, Jim, I think when you talk about the relationship with the new Congress, is that what the American people expect is to see an honest and civil exchange of ideas and proposals. The President is putting forth some pretty big ones tonight. The Democrats have put forward some specific proposals in the last two weeks. As they accomplish that work, they'll be now asked to look at other big issues, and the issues that the President is putting on the table.

So there's an opportunity here. And there will be times where people will be opposed. But they have a greater responsibility to put things forward that will actually -- can get signed into law. So it's the beginning of a conversation, not the end of one.

MR. KAPLAN: Just one other point on the complexity of this proposal. The truth is, what's complex is the current code. Most people don't have any idea how employer -- excuse me, how their health insurance is treated by the tax code and the fact that these incentives exist. The actual proposal is very simple. And so when people have a chance to absorb it, I think they'll appreciate that. People understand a standard deduction. And when everybody gets the same standard deduction, whatever the source of their insurance and whatever the cost, that ultimately is a more simple tax system. Although I admit--

MR. BARTLETT: I'm not going to take a shot, Joel, that I didn't understand -- (laughter.)

Q On the earlier question about how the CAFE standard change would affect a struggling state like Michigan, Joel, you had brought up the health care issue. Could you do two things? One is, could you explain how you think this health care proposal would help the big three in terms of mitigating some of the obvious challenges it will present? And two, how do you address the issue of why companies aren't going to start decoupling health care when they can just say to employees, well, you get a tax credit for that, and we'll give you something else? You buy it out on the market.

MR. KAPLAN: Yes, okay, on the first question, one of the problems that's caused by this -- the way the tax code treats health in the complex manner that I just referred to is that it creates an incentive for people to buy the most expensive health insurance they possibly can, because they can get tax benefits, no matter how expensive it is for health insurance, when they can't get that tax benefit for other forms of compensation, like wages. So people buy the most expensive health insurance that they can, which means, by and large, first-dollar coverage and things like that. As a result, what you have is inflationary pressures on health care, that drives up the cost of health insurance for everybody -- for everybody in the system. And one of the biggest challenges that employers have -- big and small -- is the cost of health care.

So I described earlier a lot of the direct effects on individuals of this proposal. One of the most important things is the indirect effect it will have on reducing the overall cost of health care. I think our estimates -- and Kate Baicker from CEA is here -- but our estimates are that over the intermediate term, it would reduce the overall cost of health care in the economy by about, what is it, 3 percent of GDP? By 3 percent, which is half a percent of GDP, which is a very significant cost savings. And that cost savings will be to the benefit of employers and to employees and individuals. So that's the answer to the first part of your question.

On the second part of your question, I think if you talk to a lot of employers, they'll say that one of the things they need to do to be competitive is to offer health insurance. A lot of people are still going to want to get their health insurance through their employer -- they're used to it, they understand how that works. So I think you'll see employers retaining their health care. But one thing we know for sure is that right now, because of the costs of health care, employers are dropping coverage. And when they do, the worker is incredibly vulnerable, because the worker doesn't have the ability to get the tax benefit of purchasing health care in the private, individual insurance market.

So if employers -- after this proposal is in law, if employers were to drop coverage, the employee would not have that same vulnerability that they have today. And that's another problem with the system that we have today; you're tied to your job; people are worried that if they lose their job, they're going to lose their health care. One of the benefits of creating a level playing field for the purchase of health insurance is that individuals will be able to get that same tax benefit even if they have to buy it on their own. And that, I think, will be a big comfort to people.

Q Can you just clarify -- are you saying the President is agnostic about whether employers continue to provide health insurance, or does he actually -- would he be fine if they dropped it?

MR. KAPLAN: The President wants employers and employees to make these decisions based on something other than the incentives of the tax code, which distort the tax code. So employer- provided insurance is an important part of our system, and for lots of employers that's going to continue to be the right answer, and we hope it will continue to be the right answer. What the President is focused on is making sure that the people who work for those employers get the benefits of the tax code whether or not they buy the most expensive plan, or whether they buy a less expensive plan. And he wants to make sure that people who don't work for an employer who provides that insurance get the same tax benefit. He wants to make sure that the tax code doesn't distort the market in favor of higher plans or in favor of those who have employer-provided coverage, as opposed to those who don't.

Q You're not denying that your own assessment is that many employers would drop providing health insurance?

MR. KAPLAN: I don't know if "many" employers is true. I think it's true that probably some will, just as some are today. And the difference --

MR. KAPLAN: I think probably it would, but more would also pick up -- more would be able to buy insurance in the individual market in a way that they can't now. And the ones that do buy it now would get a very substantial tax benefit.

MR. KAPLAN: Yes, there will be a net increase in the number of insured under this policy. And particularly, when you combine it with the policy that Secretary Leavitt will be working on with the governors to provide incentives to states who make basic private health insurance affordable.

MR. BARTLETT: Now, isn't that crystal-clear to everyone? Any other -- Bill, I saw you had your hand up there. Anybody else? We good? Everybody's good?

Q Could you talk a little bit about what he's going to do to try to push some of these initiatives?

MR. BARTLETT: Well, the President will be traveling, as he typically does, traveling on Wednesday and Thursday on the big two new domestic initiatives -- health care and energy. But there will be a sustained push, members of the administration going out, committee hearings, and those things.

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