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For Immediate Release
Office of the Press Secretary
March 18, 2008
Press Gaggle by Tony Fratto
Aboard Air Force One
En Route Jacksonville, Florida
10:20 A.M. EDT
MR. FRATTO: Good morning, everyone. As you know, we're on our way to Jacksonville, Florida. The President has a number of events. I'll just run through those real quickly. First of all, the President did have his normal briefings this morning. At 12:30 p.m., the President attends a Republican National Committee luncheon. At 2:10 p.m., the President participates in a tour of Blount Island Marine Terminal. This is the Jacksonville Port Authority.
As you know, the President, after the tour, at 2:35 p.m., will make remarks on trade policy. That's the major focus for the President right now, is expanding our trade opportunities and to look for ways to open markets for America's farmers and ranchers and businesses and service providers. I think it's lost on a lot of people, when we get into a discussion about trade, the fact that the American economy is still -- remains as the world's largest exporter of goods and services. And trade is a vibrant part of our economy. It creates jobs; it gives us the opportunity to find markets for our products that continue to be produced here in America. And so that's an important message. And it goes through ports like this.
And one of the benefits we have in America, we're a two-coast -- actually, a three-coast country, if you count the Gulf and the products that go through the Gulf. The efficient operation of our ports is essential to getting our products in and out of our markets quickly and to get them to market quickly. So this is a very appropriate place to talk about trade policy. A lot of jobs in Florida created by our trade.
After the speech, at 5:50 p.m. -- we'll fly to south Florida, and at 5:50 p.m., the President attends a Republican National Committee reception. And then we return to Washington.
A couple things I want to talk about just before we get into questions. Some of the coverage on the economy -- and I'm sure we'll talk about it in the Q&A a little bit -- but I've seen some characterizations out there that are wildly different in terms of how people perceive what the federal response is to what we're going through in the economy and the challenges that we're facing. So I just want to do a little -- some of the -- even just over the weekend and yesterday, some of the descriptions I saw were -- ranged from the federal response being unprecedented and dramatic and sweeping, and at the same time, seeing characterizations as laissez-faire, which is, frankly, a term I haven't heard in a long time, maybe since I -- I have to go back to my econ history classes in college before I heard anyone use the term, "laissez-faire." I can tell you I've never heard anyone use it in policy-making and government. So that was interesting to read yesterday from some of the critics.
Let's be very clear. The federal response in dealing with the challenges to our economy has been one that has anticipated the challenges, have been swift and decisive, and we believe they are having an impact and will continue to have an impact. And I go back to the third quarter of last year, in August of 2007; you remember at the end of that month, after we had been working on certain housing and other economic policies for some time, that was a quarter in which the U.S. economy grew at nearly 5 percent. Very, very rapid growth.
And the economic policy-makers in our government were still looking forward to what they anticipated to be a sharp downturn and slower growth. And as they anticipated that, they began to develop certain policies, and had been working on housing policies that the President announced on August 31st. They'd also been working on potential economic growth packages to bring to the Congress.
On August 31st, the President announced a number of changes and actions that we would be taking at the federal level without legislation. These included the -- what came to be known as the HOPE NOW Alliance, that Secretary Paulson and Secretary Jackson have been working on, and we believe is having an impact; changes at the Federal Housing Administration that we've been able to do administratively. And at the same time, on August 31st, the President called for Congress to pass Federal Housing Administration modernization legislation.
I'll remind you again, that was August 31st of 2007; we are now in the middle of March of 2008, nearly seven months later, in the midst of this downturn in the housing market, and we are still waiting for Congress to pass Federal Housing Administration legislation, after nearly seven months. So when we see some of the critics out there like Senator Schumer demagoguing about lack of action from the administration, I think before there are stones thrown, they look a little bit at the glass house that they're living in and see what they can be doing, what Congress needs to be doing to help Americans get through this period, because we are focused on how this is helping homeowners and we want to see that accomplished.
Then the economic growth package. Again, anticipating the slowdown in the first quarter, the President's economic advisors have been working on an economic growth package that he signed only a month ago, but we were able to very swiftly move it through the Congress, with great cooperation from Speaker Pelosi and Majority Leader Boehner. So that was a good effort to get it done very quickly. And again, that was swift, decisive action on the part of the federal government to help the economy get through this transition period and this downturn.
And then you have the actions of the Fed, in cooperation with the Treasury Secretary and other economic policy officials, and the actions that they have taken, which, again, have, in fact, been very swift and decisive and creative in helping our financial markets deal with the stresses and strain that they're under today.
And so we support and appreciate the work that the Fed has done. That is the role of the Fed, is to take that kind of action. And they see it and understand it. We have great confidence in the Fed; we have great confidence in Chairman Bernanke. It's an independent institution, so they make the decisions as they're going to make a decision later today in the Federal Open Market Committee on how to -- on what their decision will be on the policy rate. We anticipate seeing that. But we have great confidence in the Fed and the actions they're taking.
And then one other thing I can -- I saw lots of questions on this -- and sorry if I'm going on a monologue here, but I will take questions. I know Secretary Paulson got this question a number of times this morning, and we've gotten the question in the past; there seems to be this question, what do you call this period that we're in, and why don't you just call it a recession? Take you back to 2001, okay. The group that determines whether an economic downturn is a recession or not is the National Bureau of Economic Research. In 2001, it wasn't until seven months after the beginning of the recession that they were able to determine that the U.S. economy was, in fact, in a recession.
Now, as Secretary Paulson said this morning, and you've heard us say, it's irrelevant what you call it. When you're in the middle of it, the question is, what are you doing about it? That is the most important thing, and that's what Americans are interested in, is what is the administration, what is the federal response to deal with a sharp slowdown in the economy? And that's what we've focused on.
The most important thing, and that's what Americans are interested in, is what is the administration, what is the federal response to deal with a sharp slowdown in the economy? And that's what we've focused on. We've focused on trying to put in place the policy options that we think will be effective, that will do good for the economy and not cause more damage to the economy going forward.
So there goes my monologue, and I'd be happy to take any questions you have on this or any other subject.
Q Who's not happy?
MR. FRATTO: Who's not happy?
Q Yes, up there.
MR. FRATTO: Oh, no, no, this was me. That was all me, trust me.
Q Is he going to talk economy specifically today in his speech?
MR. FRATTO: He will, yes. Obviously it's a trade speech, but you should look for him to have some comments on the economy and how he sees the current state of the economy; maybe a little bit on why he is confident about the economy. I think maybe he'll have an opportunity to remind people that, while there are very real stresses and strains in our economy, and there is hardship for a lot of Americans, there are anchors of strength in our economy, and it's important to recognize them. They give a foundation for confidence, as should the federal response to dealing with the downturn.
Q Tony, the President has said several times that he thinks the fundamentals of the economy are strong, as are -- as have some of the other economic leaders. Are you concerned at all, is the White House concerned that that message is simply not resonating with the American public?
MR. FRATTO: It's hard for us to know what the American public is hearing. I think they -- I would hope that they're hearing the balanced description of the economy that they have been hearing from people like Hank Paulson, Eddie Lazear, Keith Hennessey, and also from the President and other people who are speaking for the administration's views on the economy. It has been a very balanced view.
We've pointed to fundamentals that are undeniably strengths for the economy. People ask whether we're in a recession. I don't know if there's ever been a recession with the unemployment rate below 5 percent. I'm not saying that we are in one or not in one. I just don't know that -- the fact that we have low, historically low unemployment is a strength for the economy. The fact that we have -- continue to see solid productivity growth is a strength for the economy.
We've also been very clear, very transparent on the weaknesses that we see and the challenges that we're dealing with. There has been a very real and significant downturn in the housing market. We saw some more data on this today, on housing starts continue to be down -- clear evidence of that. And you see it both in the data and you see it anecdotally out in parts of the country. It's very difficult for communities to deal with and for Americans who are dealing with the threat of foreclosure. We see that and we're dealing with it.
We also talked, and have not been afraid, in fact, been very up front in talking about the drag on the economy from high energy prices. It's clearly a drag on economic growth, and we haven't been shy about talking about the fact that it's going to take a long time to change that dynamic for our economy. And we've also talked about the stresses that we're seeing in credit markets and the impact that that is having on the economy.
So it's hard for us to know exactly what the American public is hearing. As I said, we hope they're hearing a balanced message from us, because we feel it's important to be transparent with what the pros and cons are in the economy.
Q And just one quick follow. On the trade aspect of this whole picture, can you tell us where the Colombia negotiations stand with Congress? From the outside, it looks to be stalled. Is movement happening?
MR. FRATTO: I think saying something is stalled before it's begun is -- I wouldn't say it's -- I wouldn't say it's stalled. We've had lots -- over the past year we've had extensive communication discussion with Congress and congressional leaders. Everybody understands, the President understands, this is a -- trade is a sensitive, emotional issue. It's always -- it has always been a difficult proposition to pass trade deals. I heard some people, some commentators talking about that it's more difficult today than ever to pass a trade deal. And I said, do you remember going back into the mid-'90s when the Clinton administration was trying to pass a trade deal, and it required the Vice President of the United States to go on television an debate Ross Perot in order to try to build support for trade deals.
Trade deals are never easy. They're always very difficult, always emotional issues. It's always easy to point to the costs of trade; when you see a factory close down because of increased competition, that's a very acute problem that you can see and visualize, whereas the benefits to trade are broadly spread throughout the economy, where increased economic opportunity across the breadth of the economy goes up and the availability of higher-quality, lower-cost products goes up. But those aren't the kinds of things that you easily see. But it's very easy to see a factory closing down in Ohio or Michigan. And so we understand it's an emotional issue.
The President is very, very concerned that if we as a nation turn away from our traditional openness to trade and investment -- investment coming into the country is actually another pillar of strength, as the amount of foreign investment coming into the United States helps create jobs here, and opening up markets to the rest of the world helps create jobs here. We have to remember that we are only 5 percent of the world's population. That means 95 percent of our potential customers exist outside of our borders. And we have showed time and time again that when we open up borders, our exporters and our American companies and farmers and ranchers are able to compete and sell their products. And so we want to continue to push for that.
Q I'm sorry --
MR. FRATTO: And on Colombia specifically, we think it's critically important -- we think that we will be able to find accommodation with congressional leaders to get it done, and we think it's important enough to do that.
Q Follow-up on that. Nancy Pelosi said March 13th that you have to have -- they, Congress, has to have trade adjustment assistance action first before they would consider Colombia free trade. Is that what's being negotiated?
MR. FRATTO: They only think I'm going to say about that is we certainly want to have conversations with congressional leaders and Speaker Pelosi on trade adjustment assistance. We support trade adjustment assistance. We think it's important. We think it's important that it works, and that it's well funded, and that it does the job that it's intended to do, which is to help those affected by trade to be able to find other employment if they are adversely affected by trade.
Q Can it go first, second?
MR. FRATTO: I'm not going to get into the --
Q -- is that the --
MR. FRATTO: Yes, I understand, and I'm not going to get into the negotiations on the order. I just want to say that we absolutely want to have conversations and do this in a cooperative way with Speaker Pelosi and with House leaders, both on the Colombia free trade agreement and on trade adjustment assistance.
Q Will you be sending it up after the Easter recess is over?
MR. FRATTO: I think the President said after -- he intends to send it up after the Easter recess. And he hasn't given a specific date yet, I don't think we've settled on a specific date, but that's what the President said.
Okay, thank you.
END 10:36 A.M. EDT
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