For Immediate Release
Office of the Press Secretary
September 18, 2008
Press Briefing by Dana Perino
James S. Brady Press Briefing Room
11:14 A.M. EDT
MS. PERINO: Hello. You just heard from the President on the financial markets. Obviously that's priority number one here. But let me give you one other announcement for next week, a scheduling update, that President Bush looks forward to meeting with the new democratically elected President of Pakistan, Asif Ali Zardari, on Tuesday, September 23rd, in New York. The two leaders will discuss efforts to strengthen the bilateral relationship and build a long-term partnership based on common values. President Zardari, who carries on the legacy of former Prime Minister Benazir Bhutto, and President Bush are expected to focus on cooperation in combating terrorism, strengthening the economy, and fostering democracy in Pakistan.
And with that, I'll go to questions.
Q Thanks, Dana. The President ended his remarks this morning by saying that the government will continue to act to strengthen and stabilize our financial markets and improve investor confidence. Can you talk about what that means and talk about it in terms that might be understandable to somebody like me who's not a financial expert or somebody sitting at their kitchen table looking at their 401(k) balance? What does this mean for people?
MS. PERINO: I think what -- I'm not able to talk about any specific future actions that may or may not be rumored or not rumored to be under consideration by the Treasury Department and the Federal Reserve. But what I can tell you, what the President meant by that is that clearly there is a market correction going on. Clearly these are challenging times. And the federal government, at his direction, is focused on making sure that we look at the system as a whole, that we work to prevent any broader economic damage from the few firms that we've seen in the past recent -- in the last few days that have either been liquidated or sold, like Lehman Brothers, most of it being sold to Barclays. There's a lot of information and news that the market is trying to digest right now and that we are going to stay on top of it, and we will take any necessary steps to make sure that the broader economy is not harmed by any of these failures.
Q So when you use language like "market correction" or language the President used, like "the markets are adjusting to what we've done," that makes it sound like this is a painful but possibly temporary process that's happening right now in the markets and in the broader economy and that there may not be need for future action. But isn't there sort of a need for --
MS. PERINO: No. I think by him saying that we will take any -- that we are continuing to work on it. He talked about all the steps that have been taken over the past several days from the different agencies -- the Federal Reserve, the Treasury Department, SEC -- and that we will take any necessary steps if more are needed. And I can't tell you where this ends -- I wish that I could -- but we will take any necessary steps to deal with it in the days that follow.
So I can't say one way or the other -- I don't know if I can answer your question specifically. What I can say is that the President wants to make sure that his government is doing all that it can to prevent broader damage to the economy.
Q What kinds of actions are under consideration?
MS. PERINO: That's something I'm not at liberty to talk about.
Q Dana, when you say they're looking at actions, is that exactly what they're doing this afternoon? They're looking at what possible actions they could take? Are they trying to figure out what they're -- specifically, are they looking at actions to take or are they just looking at possible actions?
MS. PERINO: I think what I have to do is -- I can answer that broadly in that they are doing what the President has asked them to do, which is to continue to assess the situation and take any necessary steps, if there are necessary steps that need to be taken. There are a lot of rumors out there for what the agencies may or may not be thinking about doing, and I'm just not at liberty to confirm any rumors or denounce any rumors. I just am not able to comment.
Q So you can't say specifically they're trying to come up -- today or in the coming days with --
MS. PERINO: I cannot. No, I cannot. I'd refer you to them and see if they can give anything additional.
Q I know you probably want to put politics aside in the middle of all of this, but I need to give you a chance to --
MS. PERINO: But you don't. (Laughter.)
Q Well, I want to give you a chance to respond to what Speaker Pelosi is saying, because it really seems like the -- at least the sort of finger-pointing is ratcheting up, accusing Republicans, and it sounded like the White House, of mismanagement of financial-market regulation. It really seems as though there's a accusation that the White House is to blame in some way, or the Bush administration policy is to blame in some way. Your response?
MS. PERINO: Well, unfortunately -- unfortunately, I don't think that the reaction of finger-pointing from Democrats to the White House is anything new.
I would ask you to go back and look and ask Speaker Pelosi or any of the other Democrats who are pointing fingers, what specific regulation did they want that we blocked? What specific regulation did we eliminate? In fact, it was the White House that worked to try to get them to act on GSE reform as early as 2003. Unfortunately, they did not act on that until most recently when there was a crisis and we got the authorities that we needed in August of 2007. What we were looking for in that GSE reform was a strong regulator. That's what we wanted. It was more regulation, more transparency, and a stronger independent regulator who could actually look at the books of the GSEs, Fannie Mae and Freddie Mac, and tell us exactly what was going on.
In addition to that, we wanted FHA modernization so that more low-income people could have their mortgages backed by the FHA. They didn't move on that until there was a crisis at hand. We wanted rules -- they're called RESPA rules, I can't remember what it stands for, it's Real Estate Settlement Act -- but it would help people understand what they're getting into when they have a loan. Unfortunately they didn't act on that. Hank Paulson's regulatory blueprint that he laid out early last spring fell on deaf ears to the Democratic members of Congress.
So while we wish they'd have acted, that's behind us. There are times in our country when we can set politics aside and come together and work on a problem together in a bipartisan way. We would hope that that would happen. Unfortunately, this week Speaker Pelosi declined to come to a bipartisan meeting that Hank Paulson held up on Capitol Hill with several members of both the House and the Senate from both sides of the aisle, and she declined to show up.
Q But there's a -- I guess a criticism raised is sort of a philosophical question that a cornerstone of Republican philosophy has been deregulation, less government, less regulation. And so the extension of that thought is that this is what happens when you have less regulation.
MS. PERINO: But let me -- but again, I would go back and ask you, can they name one regulation that we eliminated? Can they name one regulation that they wanted to have us implement that we blocked? And I'm sure that they can't. And what we have asked for is smarter regulation across the board, and that's what we have laid out. We had a regulatory blueprint for them to follow, and they declined not to. But as I said yesterday, we're not going to be in the blame game. We're going to continue to lead, act and govern and take the necessary steps to prevent broader damage to the economy.
Q Dana, to that end, you said, you know, put politics aside and get some things done. Do you anticipate anything over the next couple of weeks, since Congress is leaving for the elections to campaign, that anything can get done to immediately address the market turmoil?
MS. PERINO: I think that will -- I don't know. I think that there's a limited time. I don't know if we will have specific actions that we would ask them to take. Some of these things they've been -- they've been up on the -- they've been up in front of Congress for a while but Congress had put them on the back burner. We'd like to see some of these things acted upon. But I think Democrats themselves, and maybe some Republicans, have questioned whether or not they will be able to get anything done in the next two weeks. And it probably isn't that smart to try to finalize a legislation in the middle of a market correction as we're trying to figure out what other possible necessary steps may or may not need to be taken as we move forward.
So, what we'd like to do, first and foremost, is to have them accept our invitations for briefings and to come together -- get everybody -- get all the policymakers and lawmakers working in the same direction.
Q To that end, if it's not smart to do it in the midst of a market correction --
MS. PERINO: I'm not saying that necessarily. I don't know. I think that we have to wait and see --
Q Right, that it may not be smart to do that in that kind of environment, challenging environment -- do you foresee, then, potentially the President calling Congress back for a lame-duck session?
MS. PERINO: I think it's -- I think that's premature to say. I think right now that the Treasury Department and the Federal Reserve have things in hand. The SEC also took action earlier this week. They're all continuing to work together and assess the situation.
Q You said you'd like Congress to accept the White House's request for briefings. But, I mean, what's the order of things here? Because Congressman Adam Putnam, a Republican, was demanding an envoy from the Bush administration.
MS. PERINO: I was talking specifically about the bipartisan meeting that Hank Paulson called for Monday evening -- I think it was Monday evening -- in which many members of the House and Senate came from both sides of the aisle, but Speaker Pelosi declined to attend. I'm always for more and better communication between the White House and the press, the White House and Congress, and the White House and the public. So we'll continue to try to reach out and do more. I don't know specifically what Treasury Department has in terms of congressional interactions today, but we could look into it for you.
Q If I could just follow up, it's obvious that a lot of Republicans on the Hill feel like they've been caught off guard by this, Roy Blunt saying -- basically complaining that they didn't get the heads up on AIG. I'm just wondering what your response is because it seems like a growing chorus of Republicans who either disagree with the move or seem -- feel completely caught off guard by it.
MS. PERINO: I think that for all of you who were covering Monday's activities, there were fast-moving developments and I believe that Treasury Department tried as hard as they could to get information up to members of Congress as quickly as possible. But, granted, more and better and earlier communication between us is always a better thing.
Q Dana, can you give us an idea of how the President is spending his day today? You said he would meet with Secretary Paulson later, but is he monitoring fluctuations in the market --
MS. PERINO: He always does.
Q -- with regularity, and is the bulk of his day devoted to this economic issue? What can you tell us about what he's doing?
MS. PERINO: The President, as you know, cancelled his travel for today. He wanted to be here to be able to deal with things firsthand. He spoke to Secretary Paulson last night and then again this morning by phone. He plans to meet with him later today -- I don't have a time for you yet, but I'll see if I can update you pretty soon.
He wanted to speak to the American people today to remind them that their federal government is working to make sure that all necessary steps are taken to limit broader damage to the economy. He does always keep an eye on the markets and he wants to keep updated on that throughout the day, every day. So certainly he's doing that today.
And then Keith Hennessey and Ed Lazear, Josh Bolten, and Joel Kaplan are nearby the President for most of the day to provide him information, but also there are times when they need to go and do their work, as well. The President also got his regular intelligence briefings and there are other items that are pressing in front of the country, so he's dealing with those, too.
Q But can you tell us specifically, related to the economy, what he's doing in between the statement that he gave this morning and his meeting with the Secretary this afternoon?
MS. PERINO: No. I just gave you a general sense of what he's doing.
Q Coverage of Paulson?
MS. PERINO: I would guess right now closed, but I don't even know what time the meeting is happening, so -- we'll update you though.
Q The Wall Street Journal calls this the worst financial crisis since the Great Depression. Do you disagree with that sentiment?
MS. PERINO: I'm not in a position to be able to assess it. I would leave it to economists and historians and analysts to be -- to do that. I think there will be time for that type of analysis. Right now, I'm just not prepared to.
Q I want to back up just a little bit. Can you say, is the administration or, specifically, I guess, Treasury, most likely -- are they working on a plan for Congress, or any kind of plan for Congress, to provoke them to deal with the long-term financial crisis? I mean, create legislation --
MS. PERINO: I think I'd have to refer you to them in terms of the specifics that they're looking at. Obviously they're dealing with the day-to-day issues at the moment. But I would point you back to what I was talking about earlier, which is that we've had several pieces of regulatory reform that we've presented to Congress that we would like to have them work on, because most of what -- most of the regulations that we have today were set up in the 1930s. We need a more modern regulatory scheme for the 21st century and that's what Secretary Paulson had laid out in his blueprint, and what we eventually got, once we got into a crisis situation on the housing front -- reforms that we've been asking for for years.
Q But is there anything beyond what he has proposed in the laundry list that you listed -- is there anything new that they're working on --
MS. PERINO: I don't know -- all I can tell you is that in general what we are looking for is increased transparency and strong independent regulators to be able to handle it, but I don't have anything specific for you right now. You'll just have to bear with us and we'll update you as we can.
Q But there is something in the works being developed, I gather?
MS. PERINO: I couldn't tell you that, either. You'll have to call Treasury Department and ask them what Treasury Department is working on.
Q Dana, the Speaker also said she wanted to know where the $85 billion for the bailout is coming from and what its impact will be on the deficit. Can you answer that?
MS. PERINO: Well, I'd refer you to the Fed -- I mean, they structured the deal, so I'd refer you over there.
Q You mentioned about regulatory reform and how you did try to get some regulations through and others not if they weren't smart. There was a law, Glass-Stiegel, which prevented the intermingling of banks and non-bank institutions from doing certain services and that was repealed. Did the administration support that?
MS. PERINO: I can barely hear you, Paula. Can you speak up a little bit?
Q Sure. The Glass-Stiegel Act prevented the intermingling of non-bank and bank institution services. They're saying part of the problem here right now is that that was allowed; that that law, Glass-Stiegel, was repealed. Did the administration support that?
MS. PERINO: I'm not familiar enough with it, but one thing I would tell you on the regulation side of things is that we actually -- after the abuses of 1990s were exposed and the Sarbanes-Oxley Act was passed, we actually implemented those regulations. So while there are some critics who say that Republicans have an ideology of non-regulation, we actually imposed those regulations and there are lots of critics who think that they're way too strict. So we'll get you on an answer on Glass-Stiegel, but I'm just not in a position to be able to answer it.
Q And the C.R. -- that's one thing that has to be done before September 30. Given the short time we have here, are you basically saying that Congress should just pass a clean C.R. and address other issues --
MS. PERINO: We would like Congress to be able to deal with their appropriations bills and I think how they work out how they're going to continue to fund the government is still -- remains to be seen. We would like them to do it in a responsible way, but I'm not going to characterize it either way yet -- it's too premature.
Q Thank you, Dana. Two questions on the subject. First, has anyone compiled what is an aggregate price tag on bailouts for Bear Stearns, AIG, and whatever comes up in -- before the year is out?
MS. PERINO: I would refer you to the Fed or the Treasury Department for that; I don't have it off -- I don't have it here at my fingertips.
Q The other thing, in talking --
MS. PERINO: And remember, these deals have been structured in a way that will help pay taxpayers back first. And we have wiped the shareholders out, we've replaced management, and we've only put taxpayer dollars at risk to the extent that we think that we'll be able to pay them back first. And Secretary of Treasury -- Secretary of the Treasury and the Fed understand that that's the President's position and those are the deals that they have arranged.
Q My other question is, in talking about new regulation, in '04, I believe, Senator Sununu introduced legislation that passed the Senate Banking Committee and would have had federal regulations for insurance companies, including AIG. Is that something that the administration might dust off at this point; you know, removing it from state authority and putting it in federal hands?
MR. FRATTO: It's in the blueprint.
MS. PERINO: It is -- it's in the blueprint, in the regulatory blueprint. Fabulous. So, yes, we want it.
Jon, go ahead.
Q Can you just -- when did the President first get informed of the Fed's plans to inject $180 billion into the global markets, at what point yesterday? I'm assuming it was yesterday.
MS. PERINO: I'm not sure at exactly what point yesterday. He spoke to Secretary Paulson several times; I know that they spoke last night about 7:00 p.m. in the evening and then that action that the central banks took happened just after midnight. So it was probably in that phone call, but we can check.
Q Was Bernanke on any of these phone calls or in meetings, or was it --
MS. PERINO: He was here for the meeting on Tuesday, but I don't know if the President has specifically spoken to him.
Go ahead, Victoria.
Q What was the decision-making process in not having the President give a prime-time address, given the seriousness of the financial situation?
MS. PERINO: He gave -- we wanted to talk to the American people as soon as possible today. Now that you all have a 24-hour news cycle, I don't know if prime time matters so much anymore.
Q Dana, on the issue of the fundraiser -- the President didn't go to Alabama and Florida today. Is he going to somewhat curtail his fundraisers right now as he's dealing with the economy, the economic situation and the economy? And will he go back to Alabama and Florida?
MS. PERINO: Well, we've had a couple of instances this week where Mrs. Bush was able to handle the President's fundraisers that he had earlier this week, when we were dealing with Hurricane Ike. And then Secretary -- I'm sorry, Vice President Cheney was gracious enough to drop his schedule for today and go and handle the fundraisers for today. And so we'll just take it as it comes, but the President has a lot of fundraising requests and we'll be out as much as we possibly can. But there are times when matters in front of the presidency require you to change your schedule, and today was one of those.
Q So -- and I'm asking because it's been put out there for all the candidates and this President, is it -- as the nation is in a bad economic time and people are talking about money, is it a good thing for this President, who is dealing with trying to infuse the market and help the economic situation in the country, to go to fundraisers --
MS. PERINO: Look, I think that the President is not going to dictate to people how they spend their money or if they want to donate to candidates or to causes. We're in the middle of an election cycle and I don't think that either of the candidates are going to stop fundraising between now and November 4th, either.
Q Thank you.
END 11:32 A.M. EDT