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For Immediate Release
Office of the Press Secretary
May 2, 2008
Press Gaggle by Tony Fratto
Aboard Air Force One En route St. Louis, Missouri
10:35 A.M. EDT
MR. FRATTO: How are you doing? We're on our way to St. Louis, where the President will visit World Wide Technology. Let me just run through the schedule real quick; save the week ahead for later.
The President taped the radio address this morning. The subject was the economy. He talked about the stimulus plan that is now in place, the business tax cuts, which you'll hear the President address today at World Wide Technology; and also the stimulus payments that have started to go out in direct deposit form, and have actually just begun going out, in terms of checks. The IRS was able to -- has been able to start getting checks out this week, and they'll be out in full force next week. The President will also call on Congress to pass pieces of legislation that you've heard us talk about, especially in the area of housing -- pass FHA modernization legislation, in particular.
The President had his normal briefings. At 10:55 a.m. the President will begin the visit at World Wide Technology. He'll make remarks on the economy at 11:20 a.m. Just to add something about this trip, just to note: The President was originally scheduled to visit World Wide Technology in October of 2007, and some of you might remember that we had to postpone that visit for the President to go out to California, where they were experiencing the wildfires. So this was a commitment that the President made to return to St. Louis and to visit World Wide Technology.
With us on the airplane, by the way, is Senator Kit Bond, Congressman Todd Akin, and Congressman William Clay.
One thing to announce -- this is in regard to the Combat Veteran Call Center. Yesterday the Department of Veterans Affairs began contacting nearly 570,000 recent combat veterans to ensure they know about VA's medical services and other benefits. Today Secretary Peake will personally make calls to some of American's veterans. The Combat Veteran Call Center will telephone two distinct populations of veterans from Iraq and Afghanistan. The VA will offer to appoint a care manager to work with them if they don't have one already. And for more details about this, please contact the Department of Veterans Affairs.
And I'd be happy to take any questions you might have.
Q Tony, how does the White House interpret the latest jobs report, both the number of jobs cut and the change in the unemployment rate?
MR. FRATTO: I think -- you know, the data this week and the payroll data today are offering a fairly mixed view of the economy. The GDP report earlier this week showed a slow-growing economy, but still growing. Today it was a mixed report on payroll data -- a slight decline in job creation, but also a decline in the unemployment rate, which is good news. It means that there's still demand for jobs out there.
So that 5 percent unemployment rate still was lower than the average of the last three decades. We want to see employment growth return to the stronger numbers that we were accustomed to when we went through 52 consecutive weeks of job growth. So we'd like to see the economy return to that. We think that the stimulus that's in place, in the second half of the year, that we'll see it return to stronger job growth and stronger GDP growth, and more business activity -- just more commercial activity from companies like World Wide Technology and others who will be investing in expensive capital items.
Q Is the President cheered by these numbers?
MR. FRATTO: That's too strong a word -- couldn't be -- couldn't possibly be cheered by a report that shows a decline in job creation. So it's never -- would never call it a positive to have a decline in job creation.
Q The analysts were expecting a loss of 75,000.
MR. FRATTO: Yes, you know, we don't put a whole lot of stock in private forecasting on these numbers. The numbers are so volatile, you know, no one should pay too much attention to what the private forecasts say.
Q Let me try it a different way. If the economy is in a recession, does it suggest a mild recession?
MR. FRATTO: There's a lot of "ifs" in there. What we know is that the economy thus far has grown, and none of the -- or I should say, very little of the data that we're seeing would -- are approaching anything consistent with recessionary data; that the job creation numbers are not in recessionary territory, or data that you would see consistent with a recession. Obviously, growth is growing, so that is not consistent with the recession.
The numbers that are probably the weakest are wholesale and retail sales numbers. But all the other economic data that we're seeing are stronger than what you would see consistent with past recessions.
So you can take that for what it's worth. Again, I know that there's a great interest. I still see it reported in articles and every evening newscast trying to find some way to shoehorn the word "recession" into a headline or a story. The evidence of one isn't there so far. And what we are focused on are putting in place the policies that will return us to growth. So that's what we're interested in, and that's what the President will be discussing today.
Q Do these numbers --
MR. FRATTO: Go ahead, John.
Q Some of those numbers are going up. The stock markets are doing a little better. Even junk bonds are doing a little better. Do those numbers make you alter your forecast for the second half of the year?
MR. FRATTO: You know what, we'll come out with a new forecast this summer. We do it twice a year where we come out with public forecasts. I think the private forecasts have been fairly consistent, in terms of growth, have been fairly consistent with what we are seeing internally, and that is a return to growth in the second half of the year.
Not particularly strong in the second quarter of the year, but there's -- part of the drag on the economy has been what we're seeing not just in housing, but also how that has affected financial markets and the financial sector as a whole. And, in fact, if you look at, like, the S&P 500 -- they just completed a lot of earnings reports -- earnings were not -- they were down from previous years.
But if you strip out the financials, earnings in the rest of the economy -- the real economy -- were up in double-digit gains. So that tells you something. There is a split in the economy, and as things get healthier in the financial markets, and the financial sector can go out there and start putting money back into the economy through making loans and doing the business that they're in, which is taking risks on companies and on people -- when the financial sector can start to do that again, I think you'll see growth return in the economy.
Q Tony, at this point, how would you assess the economy?
MR. FRATTO: It's a mixed picture. It's still -- we're still in a period of slow growth; not much above or below, sort of flat indicators in a lot of things. So that's why -- it's one of the reasons that we believe that $150 billion in economic stimulus will have an impact.
Q Do you -- critics though -- do you expect to hear from critics --
MR. FRATTO: We always expect to hear from critics.
Q -- use the "R" word, the "recession" word? Do you see them as being a little premature saying that?
MR. FRATTO: Look, I mean, our critics -- the critics out there have been pretty irresponsible with their language, not only in talking about a recession. We have people like Chuck Schumer talking about the Great Depression. Well, I can tell you, my dad was around during the Great Depression and he would have loved to have seen 5 percent unemployment instead of the 20 percent or 25 percent unemployment that we saw in the Great Depression. So there's been some irresponsible chatter from people like Chuck Schumer and others.
We have tried to be very, very transparent and clear -- everyone from the President to the President's senior economic advisors, like Ed Lazear and Hank Paulson and Keith Hennessey. And from the podium, the way we talk about the economy, we want to be very transparent and clear about exactly what we're seeing. If it's doing better, we'll tell you that we think it's doing better. And if it's softening, we've told you that we see softening, and that we see numbers that are not as strong as we'd like to see. And we hope to, as the year progresses, and as we expect the economy to do better, we want to be able to tell you that.
And so the language is important from our perspective as to how we talk about it, but other people out there, they'll say what they want to say.
Q Tony, on the company that he's visiting today, what kind of the business aspects do they take -- participate in, in the stimulus package? Is it bonus --
MR. FRATTO: On the bonus depreciation, they were able to purchase capital equipment. They'll be able to tell you a little bit more about the kinds of things --
Q You don't have any details --
MR. FRATTO: I don't have details on specifically what they're purchasing.
Q Have they done it, or they plan to do it?
MR. FRATTO: I think -- you know, let's hear from them. I'm not sure of the timing.
Q I have a question, two weeks ago the administration released $2 million worth of food reserves --
MR. FRATTO: Two hundred million.
Q -- $200 million. So is there any plan to release oil reserves, if they're willing to release food reserves? Will they release any of the oil?
MR. FRATTO: No, there are no plans to release oil from the Strategic Petroleum Reserve. And in fact, as the President said earlier in his press conference, there's a strategic reason for the Strategic Petroleum Reserve, and that is to protect the nation from an emergency disruption in the flow of oil. And that's a national security concern. We know that some of the calls out there have been to try to either stop filling the SPR or to release oil from the SPR in a way to reduce the price of gasoline. And no evidence -- there's no evidence out there that doing that would actually reduce the price of gasoline in any significant way at all. And at the same time, if you're not filling the SPR, you're not making that investment in our national security.
The food reserves are there for that very purpose, to deal with America's contribution to relieving hunger and preventing famine in the world. That's the reason that the Emerson Trust exists, and that's exactly what the President is using it for. So that's $200 million that we think will help address hunger because of the rising food prices in the poorest countries. The President also talked about ways to help countries make the reforms that will prevent them in the future from facing food shortages.
Q I had one quick question about consumer confidence -- as you know, a huge part of economic health. The President gives a speech like this today, or any of these stops at factories and so forth -- does he feel he can have an impact on consumer confidence, anything that he says will affect public opinion?
MR. FRATTO: The consumer confidence and consumer activity are two different things, and there hasn't always been a very close correlation between how consumers feel about the economy and what consumers actually do, and how they feel about their own personal financial status. Most Americans actually feel like they're doing okay. They're earning enough income, they own a home, they can pay their bills, they can put a little money away. They may be concerned -- but they are concerned about the macro-economy and what else they're seeing out there. They're concerned about higher prices that they have to deal with, and that gives them a -- that's one of the things that gives them a negative view of where the economy is heading. And we realize that.
You can't -- I don't believe you can talk up the economy. There's a real economy out there that works. It is a very, very large, $14.5 trillion economy. A lot of business activity, and individual investment decisions and buying decisions people make because of their needs and the things that they want and their ambitions. That's why they do it -- not because people are telling them good things about the economy, or bad things about the economy. But we try to highlight some of the policy responses that the federal government is doing to help improve the economy. And that's what the President will be doing today.
Q Do you have any late read on the farm bill? The negotiators all but reached an agreement I guess last night.
MR. FRATTO: I heard they're talking. I don't have a good readout on exactly what they may or may not have agreed to. I do think it is incredibly ironic that we're talking about food prices, and globally, obviously, the food crisis and rising food prices here in the United States, at the same time we're talking about putting together a farm bill that supports higher prices for food and sends subsidies to some of the wealthiest Americans. So we're --
Q It sounds like the veto threat is still there, very much --
MR. FRATTO: I would say nothing has changed so far. Okay.
Q Thanks a lot.
Q Do you have a week ahead?
MR. FRATTO: I always forget the week ahead.
Tomorrow we're in Crawford, obviously. On Sunday, the President delivers the commencement address at Greensburg High School. Remember that Greensburg was the sight of tornadoes that hit. It's a remarkable story of this town raising itself from the rubble of those tornadoes and doing it in very creative ways. And the President will have an opportunity to talk about the spirit in that town and bringing it back at the high school, which in a lot of ways is the heart of the community. The President will return to Washington Sunday evening.
On Monday, May 5th, the President and Mrs. Bush host a social dinner in honor of Cinco de Mayo. It's in the Rose Garden; pool for toasts only. At 8:55 p.m. the President and Mrs. Bush attend entertainment in the Rose Garden; we'll have pool coverage for that. I did say 7:50 p.m. for the Cinco de Mayo toasts.
On Tuesday, May 6th, the President makes remarks commemorating Military Spouse Day. That's on the South Lawn; pool for cameras, open for correspondents. At 2:20 p.m. the President meets with the President of Panama in the Oval Office; pool at the bottom. Wednesday, May 7th, at 1:15 p.m. the President makes remarks to the Council of the Americas.
Q I'm sorry?
MR. FRATTO: Council of the Americas --
Q North-South America?
MR. FRATTO: Yes, a group of officials that are interested in the hemisphere. And the President will -- you can expect he'll talk about lots of hemisphere issues and security issues, but importantly you can expect him to talk about trade, the importance of trade in the hemisphere.
Q (Inaudible.)
MR. FRATTO: I'm sorry?
Q (Inaudible.)
MR. FRATTO: Exactly. That is open press over at the State Department. Thursday, May 8th through Saturday May 10th, the President will be in Crawford.
Q Why? (Laughter.)
MR. FRATTO: There's a family event taking place that weekend. On Sunday, May 11th, the President returns to Washington. That's it.
Q And it's the President of Panama on Tuesday?
MR. FRATTO: Yes.
Q Thank you. Is there any particular topic?
MR. FRATTO: I'm sure there are a lot of topics, and of course we have a pending free trade agreement with Panama. I don't know of any other specific topics, but I'm sure that will come up.
Q Thank you.
MR. FRATTO: Thanks.
END 10:57 A.M. EDT
