The White House
President George W. Bush
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For Immediate Release
Office of the Press Secretary
November 16, 2007

Press Briefing by Tony Fratto
James S. Brady Press Briefing Room

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12:35 P.M. EST

MR. FRATTO: Good afternoon, everyone. I'll lead with a couple things, and then we'll go to questions. I talked a little bit about this at the gaggle this morning, but I'm going to -- as we saw now, the votes in the Senate this morning, Congress has now left for a two-week vacation without appropriating the necessary funding for our troops in Iraq and Afghanistan. Once again, they tried to pass a bill that provides incremental funding, tries to micromanage the war from the halls of Congress. It includes an arbitrary withdrawal date, an aim that has absolutely no relevance to the significant successes we're seeing on the ground in Iraq.

They also know that such a bill will be vetoed, should it ever come to the President's desk. They know this because we've been through this dozens of times now with votes on withdrawal from Iraq.

This misguided bill also failed to include funding for the very priorities some of the critics on the other side of the aisle have been advocating. These are the same people who said that there's not a -- can't just be a single military solution to Iraq. We agree. We believe that there are other components that need to be part of success in Iraq, and that includes political reconciliation, includes economic reconstruction. And that's why the President asked for State Department funds to advance those goals in Iraq. So this legislation didn't include those bills. It also didn't include -- I'm sorry -- didn't include that funding. It also did not include funding for a very urgent need, and that is to meet our commitment to U.N. peacekeeping forces in Darfur.

Now, with respect to the funding for Iraq and Afghanistan, the funding for these troops, they're going to have serious consequences. Deputy Secretary Gordon England last week sent a letter to John Murtha, the Chairman of the House DOD Appropriations Committee, and as Gordon England noted, "Without this critical funding, the department will have no choice but to deplete key appropriations accounts by early next year. This situation will result in a profoundly negative impact on the defense, civilian workforce, depot maintenance, base operations and training activities."

Secretary Gates was on the Hill yesterday, and Secretary Gates said there seems to -- there's a misperception that this department can continue funding our troops in the field for an indefinite period of time through accounting maneuvers; that we can shuffle money around the department -- this is a serious misconception.

So the Defense Department will have to deal with this delayed funding. And critically, some of this funding was intended to do and meet one of the goals that, again, some of our critics say they want, which is the training of Iraqi forces to take over for coalition forces. That funding will not get there in time and it will delay progress in that area.

I saw one quote from a Senator today reporting -- in some of the reporting that "there are no more free lunches." Well, our military planners and commanders and troops aren't asking for free lunches; they're asking for the body armor they need, they're asking for MRAP vehicles, they're asking for operations and maintenance support. So this is what this funding is going to go for. It's going to go for operations and logistical support that our troops need, it's going to go for training. And we need to get it there. Our troops deserve this funding, they need it, and we call on Congress to deliver it as soon as possible.

Scheduling update. On Monday, November 26th, the President will host the 2007 U.S. recipients of Nobel Prizes, the Nobel Laureates. They'll be in the Oval Office. We'll get back to you on the coverage, but the list of those recipients -- Dr. Mario R. Capecchi for medicine, from Salt Lake City, Utah; Dr. Oliver Smithies for medicine, from Chapel Hill, North Carolina; Dr. Roger Myerson, won the Nobel Prize for economics, from Wilmette, Illinois; Dr. Eric Maskin, also for economics, from Princeton, New Jersey; and Vice President Al Gore, the Nobel Peace Prize, from Nashville, Tennessee. So we expect them here at the White House on November 26th.


Q You talked about money for Iraqi forces to take over from coalition forces. Are there, in fact, Iraqi forces that are ready to take over from coalition forces?

MR. FRATTO: Yes, as a matter of fact, Iraqi forces have taken over for coalition forces in a number of provinces in Iraq. That has not progressed as quickly as we hoped it would, but the security that we're seeing from the surge is allowing us to make that progress.

Q But are there, in fact, forces that are ready to go that would not be able to go unless they get the money? Or is this --

MR. FRATTO: It's not a question of whether they get the money, the question is whether they get the training. And for everyone who wants this to happen quickly, they need the -- our troops need the funding so that they can provide the trainers to do the training, so that those forces are ready to take over from coalition forces. As these troops become --

Q But there's not a specific transfer that's being delayed or that would be delayed?

MR. FRATTO: If the funding is not there, it would be delayed.

Q Can you give us a little more specifics on some of those other items -- the State Department funding, the Darfur funding? What is the practical effect of not getting that money?

MR. FRATTO: Well, I think the practical effect is fairly obvious. The State funding goes for the provincial reconstruction teams that are out in these provinces working with local leaders on the bottom up -- some of the bottom up progress that we've already seen has brought a critical success in certain portions of Iraq. We want to see more of that. That is what those funding goes to -- it goes for reconstruction projects at the local level. So these are -- I think everyone agrees, this is critical to the kind of progress we want to see that will allow Iraqi citizens to buy into a more hopeful future for their country.

Q So it's not just a matter of money being shifted from domestic accounts abroad; there will actually be activity that will be curtailed?

MR. FRATTO: That's what the -- well, depending on how long the funding is delayed, absolutely.


Q Essentially, you all are arguing with the Democrats about what drastic means; what kind of cuts are considered drastic or cutbacks in the interim period when the money isn't there. But it raises a larger question of whether the President believes there should be some sort of sacrifice to pay for the war, whether it's a belt-tightening at the Pentagon or broader nationally. What does the President think --

MR. FRATTO: Well, the pressure that is -- the question of our dispute with Congress is just a matter of what is drastic in terms of how it affects our troops, one way or another. We don't -- if it's a question of, should it affect our troops a little bit or a moderate amount or a lot -- none of those are good options, okay? We don't want to affect our military strategists and planners and procurement officers and, eventually, our troops in any way; not even a little bit.

So whatever the differing views might be in terms of what is significant or not, or drastic, is a question that we don't think there's a good answer to. They should get what they need, when they need it, and that should come in response to their request from the commanders in the field. So, that's what we're responding to.

In terms of the bigger picture of what our dispute is, what we see is a core constituency of the Democratic Party that is driving them towards sending the President legislation to appease the views of groups like and CodePink, the ones who want us --

Q Oh, come on, the American people also.

MR. FRATTO: -- simply to leave and to walk out of Iraq. And that is a -- that is not a view that -- that is not a small difference, that's a pretty gaping difference. We don't believe that we should have an arbitrary withdrawal date from Iraq, especially in the face of the success that we have seen over the past few months that is fairly indisputable.

Q Yes, but look, the letter-writing, the announcements from this lectern of things that might happen are all things that may happen. Nothing that you say is set in stone. "This is what might happen" -- it's a public relations operation to say to Congress, if you don't do this, then look out, this is what's going to happen.

MR. FRATTO: I don't think so, Bill.

Q Why is it credible?

MR. FRATTO: Well, it's not a question of what may happen. It may happen should they fail to deliver the funding.

Q Yes, right. And it may rain tomorrow.

MR. FRATTO: Right, so from that sense, it will happen if they do not deliver the funding in an appropriate and timely way.


Q Why do you think that the President will not listen to the goal of people to get out of Iraq and stop the killing, stop the drain? More than a trillion dollars has been spent. You want to pour more and more money into a killing field.

MR. FRATTO: Helen, no, what we want to do is to give the people of Iraq the opportunity that they deserve when they went to the polls a few years ago to --

Q You invaded them, you occupied them, you killed them --

MR. FRATTO: -- to have a democratic country. And that's what we're focused on.


Q Tony, why can't you shift the money around to different accounts? Secretary Gates did say that it would have an impact on these functions, but I'm not really --

MR. FRATTO: There will be -- there will, in fact, be a shifting around of accounts. If what happens is, as the Majority Leader said, that this is going to wait until January, there will be shifting around of accounts. But that is not a costless enterprise. That is a -- there are consequences to doing that. And he also made the point that he doesn't have the flexibility to do as much cost -- or accounting maneuvers as some people think he does; that there will be things that will have to be curtailed. And the question I have is, why do we want to curtail the work of these men who are out there fighting? Why do we want to curtail the planning of our military strategists who are out there trying to complete their mission?

Q So the President just signed this $460 billion for DOD.

MR. FRATTO: And that funding did not include war funding. That was base funding for the Department of Defense.

Q So there's not enough flexibility in that bill to fund what the needs are --

MR. FRATTO: Not according to Secretary Gates and Deputy Secretary Gordon England.


Q Change of subject?


Q I have a question on China trade, and a couple of quick follow-ups.


Q China recently decided to impose new burdensome safety inspections on medical devices, foreign-made medical devices that are sold there, like X-rays, pacemakers -- but not on Chinese-made devices. So is the administration concerned that this is another instance of Chinese economic nationalism, in protecting their industries to the detriment of U.S. companies?

MR. FRATTO: Well, I mean, that is something that we're concerned about and we're looking into. I know that Secretary Paulson, who has led the strategic economic dialogue with China -- discussions of trade disputes and intellectual property disputes are part of those discussions. These are the kinds of things that we want to -- that we do want to work out and have good communications with our Chinese counterparts on and sort them out. We don't want to see unnatural barriers to trade between these two countries. We certainly don't want anything blocking our products going into China, and we don't want to see anything blocking U.S.-made products coming out of China, unless they're for legitimate safety concerns. We have the same issues with products from other countries as well, including China.

Q Tony, interesting you mention that, because it's being reported that some Chinese leaders are hinting that this action may have been taken actually in retaliation for U.S. complaints about unsafe Chinese products. Would that raise U.S. concerns even more if this was taken to punish the U.S. for protecting its own citizens?

MR. FRATTO: I haven't heard that. I have no reason -- no reason to believe that.

Q And Paulson, will he be bringing this issue up when he goes to China in December --

MR. FRATTO: Yes, I'm certain it will be part of the discussions. And I think there will be a number of other agencies -- the executive branch will be represented there; the USTR's office will be there; Commerce Department and others who have equities in these issues will be there to discuss them.

Okay. Roger.

Q Tony, Negroponte met with I guess his equivalent National Security Advisor in Pakistan this morning. Do you have any details on who that was and what the nature of the meeting was?

MR. FRATTO: I don't have a readout on that. In fact, I don't have a complete schedule for Ambassador Negroponte in Pakistan. He's there; we hope to hear his take on his visit to Pakistan and we hope it's successful.

Q Do you anticipate anything later today?

MR. FRATTO: On Pakistan? Or with respect to Ambassador Negroponte? We'll see. I don't have --

Q Both -- Negroponte.

MR. FRATTO: Right. I have nothing on that right now. We'll see.

Q And another question. Is the President going to attend the Mideast summit in Annapolis?

MR. FRATTO: When it occurs, yes, absolutely. Both the President and Secretary Rice, of course.


Q What's the President's sense of North Korea's proliferation right now, and why is he willing to consider removing North Korea from the list of terror-sponsoring nations?

MR. FRATTO: Well, I think we're a number of steps away from that. We have these conversations with -- as part of the six-party talks. As you know -- you heard from their statements that the President and the Japanese Prime Minister today certainly discussed Korea and the six-party talks and other related issues. So we're going to continue to make progress on those areas. We have -- I think we're going to go in in full agreement with the other members of this group and try to attain our goal, which is a denuclearized Korean Peninsula.

Q In other words, you would expect to have the full agreement of the other four parties, not including North Korea, when the U.S. decides to move North Korea from the list of terror-sponsoring nations?

MR. FRATTO: I think we're going to -- I think we will work together with our partners on that, in that effort, and we're going to keep our eye on the ball, which is to make sure that North Korea has verifiably ended any nuclear activity.

Q Well, let me press you on that. Is the ball the end of nuclear activities, or is the ball the end of sponsoring terrorism?

MR. FRATTO: Well, I can't predict when and how that decision will be made. I mean, we have Ambassador Hill, who is leading those discussions for him -- for the U.S. government, and I'll let him speak to how and when and if that would occur. It's not something that I can predict.

Q And, on another subject, how long can the U.S. afford to go without Japan's help in refueling ships in the Indian Ocean?

MR. FRATTO: I'll refer you to Department of Defense on that. We certainly appreciate the assistance that the Japanese government has given us through this time. We have a very mature relationship with the Japanese. We can speak frankly to each other. I know that issue was discussed, and we understand that the Prime Minister certainly supports returning to that mission, and we hope he's successful in his ability to do that with his government. We'll see how it goes.


Q Tony, on the IAEA's latest report, with Iran having now 3,000 centrifuges in operation, a tenfold increase over last year, is there a threshold where you say, okay, enough is enough? Because I think people might look at that number and say, okay, now what? We keep talking, we keep going to agencies and going to the U.N. and asking for more sanctions, but there will come a point where they have plenty more than that.

MR. FRATTO: Well, I think the international community has already said enough is enough. We've had two chapter 7 resolutions sanctioning Iran for their nuclear activity. There was a very discrete measure for whether they are or are not making progress and meeting the requirements of -- that the international community and the U.N. Security Council has put on them, and it's a question of whether they have or have not stopped their enrichment and reprocessing activities.

So until they have attained that goal, I think you're going to continue to see this unanimous view of the international community that they need to stop or these sanctions will continue. I know Secretary Rice has spoken to this, that they're going to work towards a third Security Council resolution, and we're going to await the report from the Europe -- the EU High Minister Solana on his talks with his counterpart in Iran, and we'll see how that goes. But we do know that as -- the basic requirement of the sanctions is, have they or have they not stopped their enrichment activities, so that will be the basis.

Q Tony, there's been a lot of discussion, necessarily, on the housing crisis and the White House has taken some measures with regard to the foreclosures -- which probably will prove somewhat inadequate. But there has not been enough attention placed on the second shoe which will drop as a result of those foreclosures, and that is those banks who have given out these loans are going to be forced to close their doors as the money is not coming in. Has the President and his economic team taken consideration for the possibilities of a banking crisis coming out of this crisis in the sub-prime market?

MR. FRATTO: I'm not sure that I agree with the connect-the-dots story that you have outlined. And I think if you had been -- if we had been talking about this issue 20 or 25 years ago, that might be exactly what you might have expected. One of the complicating factors in the housing sector is that that connection between the borrower and the bank is not the same thing that you see today, and that's because loans are sold now in secondary markets and securitized and sold around the world.

Now, there are benefits to that and there are also problems associated with that. Some of the benefits are that you spread risk everywhere. Some of the problems is that the lender can't go down to their community bank and ask them, how can we find a way to keep this mortgage going so I can stay in my home?

It is an incredibly complex relationship in that sector. Secretary Paulson, the HUD Secretary, Alphonso Jackson, are working on this. They're working with lenders and borrowers to try to bring them together and to keep as many Americans in their homes as possible. That's what the President wants to see. And we also hope that some of the administrative actions that we've taken, that the President announced a couple months ago, do help more than you think they will. We also call on Congress to pass the legislation that's been sitting on their desks for some time, so that we can make more progress.

Q A follow-up with regard to the banks. Obviously they're not the major lenders to the housing market, although there still is a lot of exposure. There are people who have taken money from banks to buy their houses and now they find themselves in difficulties, which will have a direct effect on the banks. But there's a second problem to that, to the extent that the banks have often used the sub-prime market to hedge funds in order to cover other loans that they have, and so that the effects of the sub-prime market is much more extensive in terms of the entirety of the banking system than simply the relationship of a lender to a borrower. And that will have its effects, to the extent that the banks will not get the predicted funds that they have gotten -- that they have expected through going out on the sub-prime market.

MR. FRATTO: That's true, and like I said, we hope that some of the reforms that we've talked about, and some of the work that Secretary Paulson is doing with banks and with the secondary markets can help to improve that. It is a very complicated issue.

Q Thank you.

MR. FRATTO: Let me just take one more -- I'm sorry, two more. Jennifer, I'm sorry, but thank you. Sarah, and then Victoria.

Q Thank you. Tony, within two weeks Venezuela's Hugo Chavez might become President for life. How does the President plan to deal with Chavez?

MR. FRATTO: I'm not sure that -- I have not seen many opportunities where we've had to do that, and I can't anticipate the opportunities in the future, but we'll cross that bridge when we come to it.


Q Is the President going to make any recess appointments?

MR. FRATTO: I have nothing for you on that. I have nothing to expect right now.

Q Is he going to appoint James Holsinger to be Surgeon General?

MR. FRATTO: We don't talk about or speculate on personnel appointments until we're ready to announce them.

Thank you.

END 12:58 P.M. EST

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