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For Immediate Release
Office of the Press Secretary
October 30, 2008
Press Briefing by Press Secretary Dana Perino and Council of Economic Advisers Chairman Ed Lazear
James S. Brady Press Briefing Room
11:01 A.M. EDT
MS. PERINO: A couple of announcements, and then I have a special guest speaker. The President is currently at the FBI Academy, where he gave remarks at the graduation ceremony for FBI special agents. And then he's going to go over to the Marine Helicopter Squadron One Hangar, and he will thank the Marines and sailors for their service over the last eight years.
One note for you: Mrs. Bush is in New Orleans today. This will be her 20th visit to New Orleans since Hurricane Katrina. It's likely her last trip as First Lady. She will visit an elementary school and announce the seventh round of grants of the Laura Bush Foundation for America's Libraries, Gulf Coast School Library Recovery Initiative. This is an initiative that was recovered -- I'm sorry, that was started to assist libraries to recover their books and their resources and reestablish their collections. And to date, they have received grants totaling $4.71 million for Gulf Coast school libraries.
And then Mrs. Bush will also tour a housing site and have a discussion with Catholic Charities and Operation Helping Hands leadership and volunteers.
I have with me Chairman Eddie Lazear, who is our Chairman of the Council of Economic Advisers for the President. We had the GDP number out today. So he was going to give you a few comments about that. He can talk about the overall economy. He has time to take just a few questions, and then I'll come back and answer any policy questions or foreign policy-related issues that you have.
So, Eddie.
CHAIRMAN LAZEAR: Thank you. Well, thank you. Let me just talk a little bit about the GDP numbers that came out today. As most of you know, the GDP number was a -0.3 -- slightly negative, basically a flat economy this quarter. That's significantly weaker than we saw in the previous quarter. We came off a quarter that had almost 3 percent growth. So there's no question that these numbers tell us that the economy has weakened, and weakened substantially.
We knew that. It wasn't unexpected. In fact, the numbers came out slightly above expectations. But again, I think the general picture is that the economy has slowed.
The two questions that I would ask, in that context, is, one, what are we doing about it; and then the second question, of course, is, is it going to work and where are we headed in the near future.
We believe that the actions that we've taken, particularly with the $700 billion rescue package, will be significant in moving credit markets, which we think of as the main cause of the problem right now, in the right direction. We also think that the other actions taken by the Fed, by FDIC to guarantee liabilities, and some of the actions by HUD in the FHA area have been effective, as well, and should move the economy back in the right direction.
When? We believe that we're going to see a few tough months ahead, but we are trying to take the steps that will help the next administration start off on the right foot. And we think that it is realistic to think that sometime early in the term of the next President, we can start to see solid growth again.
So let me pause there and just ask for your questions.
Q Treasury's quarterly refunding is coming out next week. I have a couple questions -- how these -- how the government bailouts will affect the deficit in the short term, and whether private forecasts for $1 trillion-plus deficit for 2009 is unreasonable to assume. And, if I may, one other question. How concerned are you that all this borrowing is going to be driving up interest rates?
CHAIRMAN LAZEAR: Okay, a lot of questions. Let me answer it in a slightly more general way. I think that the OMB numbers and CBO numbers, in terms of the deficit, are basically in the same ballpark, which is at about a half a trillion dollars. Depending on how the TARP gets spent over time, that can affect the deficit more or less. We do know that as we go forward, we're going to have a significant deficit this year. Whatever the number is, it's definitely going to be a significant deficit. We believe it's an investment that's worth making, because right now the single most important task on the economic front is getting things moving again. We've got to get lending going. We've got to get capital flowing to small businesses and to consumers so that they can start to do those things that they were doing before, and that's the essential point.
So we know there will be a short-term spike in the deficit. That should be alleviated quite rapidly as we stop spending on those programs, and eventually it could even turn into a surplus when the money comes back as a result of payout from those programs.
Q When the stimulus package came out this spring, the White House said it really needs time to work out. We're considering a second stimulus package. You're talking now -- you already have one quarter of negative growth. Is this time to do that?
CHAIRMAN LAZEAR: Well, the stimulus that we did back in the spring actually had -- was effective but effective for actually a shorter period of time, I think, than we thought, in the sense that what ended up happening was people spent it and spent it pretty quickly. So we got a consumption burst out of that, and we got some good growth in the second quarter. The question, then, is whether we can do that again. We don't believe that's the right way to go. We believe the appropriate stimulus right now is the $700 billion stimulus that comes in the form of the TARP. That's a huge amount of money, and we believe that it's targeted at exactly the right thing.
Again, the approach that we're taking is, deal with the cause, don't deal with the symptoms. What we're seeing, in terms of consumption and some of the other things that you mentioned, are actually the symptoms. The cause is the credit market difficulty, and we think that it's important to get at that directly. So we believe that the $700 billion TARP will be the right way to do it.
Q Some of the symptoms, the side effects, are mass layoffs, increased number of unemployed. You yourself have said this is going to take a while. So what do these people do in high unemployment states that don't have jobs, that are experiencing mass layoffs. They don't even have 401(k)s. So what are they supposed to do?
CHAIRMAN LAZEAR: We have seen the unemployment numbers go up, there's no denying that. And we are concerned about a weakness in the labor market. In fact, that's probably our primary concern in terms of what we're thinking of in the effects. We always worry about looking at the labor market probably first, because that's where people tend to feel it, and the labor market has been soft.
The unemployment rates that we're seeing right now are not welcome. They're well above the unemployment rates that we've had historically, and when I say historically, I mean over the past couple of years. Those rates were actually quite low. As you probably know, the 30-year average for unemployment is about where we are right now. That doesn't mean that we're complacent with this unemployment rate. We've gotten used to low unemployment rates, and we want to get back there. But the question is, how do we do that? And we think the approach that we're taking is the best way to get us back to low unemployment.
Sir.
Q Mr. Chairman, you've already said that you think that recession is underway in some selected parts of the country. With today's figure, has it now begun nationally?
CHAIRMAN LAZEAR: Well, again, that's the kind of thing that is determined by the National Bureau of Economic Research. They have meetings well after the fact and decide whether the data justify that.
This is the first negative quarter -- and it's only slightly negative -- that we've seen in a while. We had a revision to Q4 last year that turned out to be slightly negative, as well. This is kind of in the same ballpark. But, again, I'm not hung up on the word so much. What I am most concerned about is how do we interpret the data and what do we think that means for the economy. And I think there's no denying that the economy is much weaker than it was a quarter ago. And my view is, look, when you see a weak economy, what do you do about it, and will it work? And I think we're doing the right thing, and I think it will work, but it's going to take some time. As the President said, we're going to have some -- a tough few months ahead. Took us a while to get here; it's going to take us a while to get out.
Ma'am.
Q What can you tell us about discussions inside the administration about a possible plan to help homeowners facing foreclosure? Will we see an announcement soon? If so, what will this plan look like?
CHAIRMAN LAZEAR: Well, I'll say two things. One is, we haven't just started thinking about households facing foreclosure. We started thinking about this over a year ago, last summer, when we rolled out FHASecure, and then there was HOPE NOW and Hope for Homeowners and so forth.
So we continue to think about a variety of different ideas. I think as Dana mentioned to you last night, there is an ongoing policy process, and she'll be happy to speak to that when she comes back on.
Q Mr. Chairman, what about -- what do you say to critics of the TARP, the $700 billion rescue package, who are concerned about banks paying dividends with this money that they're getting from the federal government, with taxpayer money, essentially?
CHAIRMAN LAZEAR: Well, I'd say two things. First of all, the money that has gone out from the TARP just went out Tuesday, and only to a very small select number of banks. So there's not a lot of evidence of anybody doing anything with that money. So as far as I know, we don't know what banks are doing with that money.
But the second point I would make on that is that the legislation does constrain recipients of the TARP to not increase dividends, and I'm sure the Treasury will enforce the law effectively.
Q So you're saying the law as it's written does have a restriction on banks?
CHAIRMAN LAZEAR: Does have a restriction on increasing dividends.
Q With that money.
CHAIRMAN LAZEAR: For recipients of the TARP, yes.
Sir.
Q Can you talk --
CHAIRMAN LAZEAR: Oh, I'll get you in a sec. Either way. You first, then you.
Q My question is about sort of the bazooka metaphor that Secretary Paulson likes to use. You've got the Fed funds rate down to 1 percent. You've thrown hundreds of billions of dollars at this problem. Last time the Fed funds rate was below 1 percent I think was in 1958. How much more ammo do you guys have to throw at this problem?
CHAIRMAN LAZEAR: Well, you know, that's a good question. I think that what we've tried to do is use the ammunition that is appropriate for the problem, and the problem, as you know, has evolved over time. And so what we're doing at this point is trying to target things in the most effective way. But there's a tension there, and the tension is you want to make sure that you don't waste taxpayers' money on this. And so I think that's the reason that we've rolled things out slowly.
Now, your point, I think, is that at this point we've used a good bit of the things that we have available to us, and the question is, do we go anywhere from here? Our feeling is that, with the $700 billion that we just got authorized by Congress, that is a significant sum of money. We believe it will do the job, but we also believe it's going to take some time. This is not going to be turned around immediately, and we don't think that we should be reacting to every new minor problem that comes along simply because you can't deal with that effectively.
Q How much impact has there been so far on the credit markets from the actions that you've taken? And is there anything more that you can do to get the credit markets working?
CHAIRMAN LAZEAR: Well, when you say the actions that we have taken, I would interpret that in a broader way and say the actions that the administration has taken, coupled with the actions that the Fed has taken, and include FDIC's actions on guaranteeing liabilities in that. And I would say that, what we believe is that the effects have started to play out, and in some markets quite significantly. So, for example, the interbank lending, the lending from one bank to another that occurs primary through this Libor market has moved very much in the right direction. That market was a big problem a few weeks ago, and that's loosened up considerably. So that's very good news.
The other thing we know is that one of the ways firms borrow to finance themselves is through the commercial paper market. And we've seen that commercial paper issuance has gone up dramatically since the Fed rolled out its facility a couple of days ago.
So we're confident that we're actually doing things that are moving us in the right direction. There's always a question of how fast this will work and how long will it take and so forth. And obviously the faster the better. But we do think that things are moving in the right direction.
I think if you listen to the discussion on the street, others believe that, as well, so I don't think this is just the administration's view.
Ma'am.
Q Thank you. I want to get back to the issue of some of the criticism, because, as I understand it, the criticism isn't so much that dividends would be increased, as it's addressed in the law, but they would be paid, period, or that other banks would be acquired with the money or that executive -- the executive pay issue. So it's a range of things. And the criticism is increasing. It's even coming from Republicans. So how do you address that broadly, sort of defend the program? And you can't really say you don't know what banks are doing because they've already said -- many of them have said what they intend to do.
CHAIRMAN LAZEAR: Well, again, I would go back to the point that, first of all, the program has been limited, in terms of the number of banks it has even been able to address. So you have the first handful of banks, the big banks, that are getting the money.
But the more substantive answer, I think, to your question, is, what we need to do here is we need to ensure that the system as a whole gets capital out to small businesses and to individuals. That's the goal. The details may be important in terms of the way we think about, is this a fair process, and we're certainly aware of those. And we want to make sure that we adhere to those rules that will protect the taxpayers' money. But our main concern is making sure that the taxpayer gets their money worth, in terms of getting the credit markets going.
And Treasury is very much on that, and their view is, we have to make sure that banks have the appropriate flexibility to do those things that will get credit markets going. But remember, those banks have huge incentives to lend. That's the way they make money; that's the only way they make money. And at the same time, they're paying quite significant dividends to the government for that money. So if they take that money and simply pay interest on it or pay dividends on it and don't lend it out and make money themselves, that's not a very good position for them to be in.
Q So do you think the taxpayers can get their money's worth if they're paying dividends to shareholders or acquiring other banks?
CHAIRMAN LAZEAR: We believe that the investments that the taxpayer is making in these financial institutions will pay off in two ways. The most important way is it will get the economy going again, and that's by far the most significant payoff. But second, we believe that over time these investments will pay off in the traditional sense that taxpayers will not lose significantly on this and may make some money. But that's not the goal. And again, that's based on historical evidence. It's not based on our experience; it's based on looking at similar programs that were initiated by other countries, and those programs have worked and worked effectively.
Two more? Okay.
Q Sir, you mentioned that the credit markets seem to be easing up a little bit, and you mentioned the commercial paper market going up dramatically. How much of that is actually lender of last resort, though, at the Fed, and that the economy is not just sort of coasting, skimming along the top -- or the bottom, and not actually lending properly as it previously has?
CHAIRMAN LAZEAR: Yes, I think your point is correct. Right now most of the commercial paper issuance is going directly to the Fed's facility. That's expected because you just got the facility going, so in the first day or two, people are issuing commercial paper and taking advantage of that facility. It will take a while for that to generalize into the market and get people to actually buy that commercial paper and then to resell it and so forth. So that may take some time. I couldn't give you exact detail on how long, whether it would be days or a few weeks or something. But it will get going; I think we're quite confident of that.
And the fact that firms do have the ability to float this commercial paper and to borrow is probably the most important point here, because they need those funds in order to grow their businesses. And that's been the focus, I think, not only of the administration, but also of the Federal Reserve. I think they've been -- I think the Fed has been doing a good job of making those things happen.
One more.
Q May I ask you about the upcoming anti-crisis summit? As an economist, what would be the ideal outcome for you?
CHAIRMAN LAZEAR: Well, I think there are a couple of goals. The first would be to identify what the causes of the problem have been so that we understand that and we are able to then structure some effective solutions. And then the solutions, to my mind, would take the form of a list of principles that we would want countries to adhere to. And those principles would have one thing in mind as the primary focus, and that would be that countries would not do things that would undermine the policies of the other countries. That's a very big factor.
It's a very big factor within Europe in particular because those countries are so closely linked to one another, and we want to make sure that we cooperate with each other so that we don't undermine the process of others.
Q So you mean you don't know the causes?
CHAIRMAN LAZEAR: I'm sorry?
Q Do you mean you do not know the causes?
CHAIRMAN LAZEAR: We all have ideas on the causes. I think I know the causes, but I'm sure that the French think they know the causes, as well, and I'm not sure we necessarily agree. So this is a meeting to try to come to some conclusions on what we think are probably the best analyses.
Ma'am. And we'll take this last --
Q I know you've addressed this a couple of times and I'm going to ask it a different way.
CHAIRMAN LAZEAR: Please.
Q As far as the critics to the issue of dividends, the argument goes that if the banks have the money to pay out dividends, why do they need the government's money. Can you articulate clearly why not suspend the distribution of dividends? Why is it a bad idea?
CHAIRMAN LAZEAR: Well, again, the law was quite specific on what rules banks had to follow when they get the TARP. And I don't think it's the proper role of the administration to change the will of Congress. So what we're trying to do is implement the law as Congress passed the law, and I think Treasury is doing a good job of that. They are well aware of the kinds of issues that you're concerned about, and I think they are not going to allow firms to take advantage of the program and use it for purposes that are not designed to get credit markets going.
That is, without doubt, the focus of Treasury, and I think they're going to be effective in doing that. So we're going to follow the law and make sure that there are not abuses. But we want to make sure that we get the economy going; that is, without doubt, the number-one aspect of what we're trying to do right now.
So, thank you. Thank you.
MS. PERINO: All right. I don't know if you have anything more on the economy. No? Goyal. Okay. And then we'll move on to other subjects. Go ahead. Goyal, quickly.
Q Two quick ones. One is, what do you think what the President is doing, and also outcome from this summit as far as small businesses are concerned? Because they are the ones really got hurt and they're in trouble, and they have to lay out --
MS. PERINO: As Eddie -- as the Chairman just said, the whole purpose of our program is to try to help consumers, and that includes small businesses who help employ 85 percent of Americans. So that's one of our main focuses, that's what we're doing.
Q Second, if I may, quick. Now, on Tuesday Secretary Gates was speaking at Carnegie, and he laid down as far as the nuclear arsenals are concerned. But also he was concerned about that many nuclear arsenals went in the wrong hands. And he said that the rogue nations also got nuclear arsenals. But now where do we go -- the President has been briefed on that it may end up in the wrong hands like terrorists and A.Q. Khan and others?
MS. PERINO: Of course, the President has been briefed on that from the beginning. It's one of our big concerns. Steve Hadley gave a similar speech not long ago -- you're talking about the nuclear deterrence policy speech that -- the terrorism speech that Gates gave on I think Tuesday. Hadley gave a similar one. This is the President's position, so of course he's been briefed on it. And he wanted those two members, leading members of his administration to go out and talk about that so that Americans would know about it.
Sheryl.
Q Dana, if you could just answer the question I asked earlier about when might we see some kind of announcement on the mortgage assistance plan, what it might look like. And also, how much money can the administration put forth for such a plan, given that, as Chairman Lazear just said, we've already put forth $700 billion?
MS. PERINO: Right. So I think where I would -- what I would tell you is, one, Chairman Lazear got it right, that one of the things that we've been doing is trying to deal with the housing problem since we identified it well over a year ago. So there's several different programs that are already in place and we're trying to implement those.
Two of those are HOPE NOW and FHASecure. There's also Hope for Homeowners, which is something that Congress gave us the tools to use later on in the year. So we have all of those things moving forward. But what we've said is that we're willing to listen and think about other ideas and other policy options to help more homeowners.
We're doing a lot of analysis right now on several different ideas, thinking about the efficiency issues, how effective it could be; the fairness issues, how would you protect taxpayers -- and by fairness, I also include in that who would qualify and how do you -- how would you design it.
All of that analysis needs to be done. And so we're not in a position right now of announcing anything imminent. I think that -- I've seen this happen in Washington before where people float out ideas in the media. What I can tell you is that we're in the middle of analyzing several different proposals. If we find one that we think strikes the right notes and could meet all of those standards that we want to protect taxpayers, make sure that it's also fair and that it would actually have an impact, then we would move forward and we would announce it. But we're not ready to do that.
Q Is there a money frame that you're looking at?
MS. PERINO: I wouldn't comment on it.
Q Dana, can we just follow up -- one more crack at this notion of dividends, because I'm not sure anybody got -- we got sort of a straight answer about the potential positive effects to paying dividends. In other words, the Chairman was saying that Treasury might -- wants to do anything it can to get credit flowing again, and if I heard him correctly, that maybe there is some sort of parts of normal bank practices that may not strike people as making sense, but are important indirectly in getting the credit markets rolling. Is paying dividends part of that? Because I still think everyone is a little confused.
MS. PERINO: Regarding dividend payments, I think some critics believe that only rich people get dividend payments. And that is not the case. Mutual funds, retirees, teachers, pension funds are all beneficiaries of dividend payments. They get dividend payments from banks. And in fact, in this legislation, one of the things that we made sure of is that the taxpayers are going to get paid dividends on a quarterly basis at 5 percent for the first three years, and then at 9 percent after that.
So the banks have every incentive to start making money so that they can get back in the process of lending, make more money that way, and then continue about their normal course of business. One is to lend money, but also there are dividend payments.
So I want to make sure people understand that a lot of people could suffer if they don't have dividend payments. And some of those people might actually even be small business owners who rely on dividend payments to then help grow their businesses. It's a part of the normal course of business. I think that the story today was just a little bit skewed in that regard, because a lot of people receive dividend payments.
Jennifer.
Q Can you talk to us about where things are with the automakers, the administration's potential role in a GM-Chrysler merger or in trying to make this analysis of whether they should qualify for some of the TARP money?
MS. PERINO: Well, I don't have anything to add that I -- that is new from what I said yesterday or the day before. So it might be a little bit unsatisfying for you today. But we continue to try to work on the tools that Congress gave us in regards to the 136 loans.
And the Treasury Secretary and Commerce Secretary and Energy Department -- Energy Secretary are in communication with the automakers. We don't have anything new to say. We understand that they've been facing tough times for a while. They've made business decisions that unfortunately have put them in this position. But we also recognize how big the companies are, how many families rely on these companies, and what it would mean for the overall economy.
So we're keeping that in mind. But there may or may not be anything that we can do to try to help them. What we're trying to do is work with the tools that we have, and that would be the 136 loans.
Jeremy.
Q Dana, on a separate -- new subject?
MS. PERINO: Okay.
Q Yesterday the President expressed some optimism about getting the agreement with Iraq completed. Barzani, in The Washington Post today, went the other direction, suggesting that it would be hard for Iraq to pass it. What sort of reaction do you have to his comments and the divergence of opinions?
MS. PERINO: Well, I do think it will be hard for Iraq to pass it. If it was easy it would already have been done. And if you stick around, I'm sure by tomorrow you'll have a different Iraqi politician or leader with a different sentiment. So a lot of this is being played out in the public on the Iraqi side.
What the President said yesterday remains true; we remain hopeful and confident that we'll be able to get an agreement done. But there are certain underlying principles, basic principles that we're not going to compromise on. And so we've received their list of requests for changes and our negotiators in Baghdad are taking a careful look at them.
Q Just to follow up quickly on it. With the election a few days away from now, how does that dynamic change or impact the negotiations, as well as the notion that the mandate expires within eight weeks? I mean, at what point do you make the decision to just go forward with a renewal of the mandate?
MS. PERINO: Well, we're going to continue to try to get an agreement because we've gotten this far, we might as well try to -- continue to work on it. And we remain hopeful that we can help solve these last remaining issues.
From our side, in regards to the election, I don't think it plays a lot into it. I mean, we've kept both of the candidates up to speed. I think both their public and private comments have been at least supportive of the effort of moving forward. So on our side, I don't think that politics is playing a lot -- a role in it.
On the Iraqi side, I can't say the same when it comes to internal politics there. And they might even be looking at our domestic politics and trying to game that out -- some people may be. But the President had a good conversation with Prime Minister Maliki earlier this week. He was glad that President Barzani came in yesterday so that they had a chance to discuss it. And our negotiators are working together on it. I'm not going to forecast any alternatives because our sole focus is working on this.
Sheryl.
Q Dana, looking ahead to the election, you said a while back that the President was trying not to give any press conferences while the campaign was going on, to let the candidates sort of have their own spotlight. When will we hear from the President once the election is over?
MS. PERINO: You'll probably hear from me that night, and then we'll see after that.
Q In terms of, you know, a press conference, obviously many of these questions were questions we'd love to direct to him.
MS. PERINO: How long have you covered the White House, this White House? Do we ever forecast when we're going to have press conferences? No. And I really don't think that's going to change after November 4th. So you'll just have to keep dressing up everyday, and then we'll see if it -- (laughter.)
MS. PERINO: Olivier.
Q Dana, I have got a couple for you. One is that the French, as the President of the EU, are talking about sending a peacekeeping force to Congo. Is that something that the French have been in touch with the administration about?
MS. PERINO: Yes. Let me -- I checked in on this today. The President was briefed on the latest developments in the region, both yesterday and then this morning by Steve Hadley. Jendayi Frazer and the NSC Senior Director Bobby Pittman are in the region right now. Secretary Rice spoke yesterday to President Kagame of Rwanda and the Foreign Minister of Belgium. And today, she also spoke to Ban Ki-moon.
This is something we're taking very seriously. We recognize that there are people that are suffering. And Jendayi and Bobby are in Kinshasa to see Kibala -- I'm sorry, Kabila; and tomorrow they plan to travel to Rwanda. They will also see President Kagame while they're there. So we're trying to help bring some sort of political solution so that we can stop the violence and let people return to their homes.
Q So then the issue of the potential EU peacekeeping forces tied to this fact-finding --
MS. PERINO: That I don't know. That I don't know. I don't know about their individual -- her discussions with those individual leaders. I'm not exactly sure how the EU plays into it. So I'll need to refer you to State Department. But I'll also check with Sean, and I'll see if I can get something for you.
Q And I have a question about Iraq, as well. For months, when the Democrats were saying that we needed to impose a withdrawal timetable in order to pressure the Iraqi government to make certain political achievements -- I'm thinking of the oil law or the regional elections -- you and Steve Hadley and others roundly denounced that, calling it counterproductive and a lot of other things. Now, with the Iraqi government resisting the -- pushing for amendments that you may not like, SOFA, American officials are talking about ending protection of senior Iraqi officials. You're talking about stopping the training of Iraqi security forces, you're talking about U.S. forces retreating to their bases and ending security operations. What's the difference between pressuring the Iraqis with a withdrawal timetable, and pressuring the Iraqis with, say, threats to their personal safety?
MS. PERINO: I've not heard anybody make threats to their personal safety. If that has happened, I'd love for you to show me the quote from the official that said that. One of the things that we have said is that what we are searching for is a legal basis for us to be able to continue operations in Iraq. They've known that, and that's why we've continued to work on a negotiated document; that's what partners do. We've been partners with the Iraqis, and we'll continue to work with them.
Go ahead, Les.
Q Thank you, Dana. Two questions. WorldNetDaily reports that California Democrat Congresswoman Maxine Waters has accused Republicans of trying to disenfranchise black voters in Detroit by using home foreclosure lists to turn them away from the polls on election day. And my question: Since Ms. Waters has demanded that the FBI investigate this in Michigan and Ohio, does the President agree that they should or not?
MS. PERINO: The President will not make that determination; the Justice Department will have to make it themselves. And they get involved when they need to. There is a department, or a whole division of the Department of Justice under the Voting Rights Act. They work to make sure that people have -- deserve -- that people that have the right to vote get the right to vote. And so I'll refer you over to the Justice Department for more.
Q Okay. Could you tell us the White House reaction to the report of the Catholic League for Religious and Civil Rights that U.S. Senate candidate Al Franken has, "mocked the Eucharist, ridiculed the crucifixion" and called John Cardinal O'Connor an obscene name?
MS. PERINO: I wouldn't comment on it, no.
Go ahead.
Q Dana, a question about the TARP that has nothing to do with dividends, but actually executive bonuses. Some companies, for example, like Citigroup, has apparently set aside something in the neighborhood of $25 billion, I think, give or take, for bonuses for employees at the end of the year. And that, coincidentally or not, is about the same amount of money I think they're getting through the TARP program. Is that a coincidence? Or what about giving executive -- not dividends -- but what about executives getting these big, fat bonuses at the end -- is that something that should be allowed?
MS. PERINO: Every bank that accepted the taxpayer investment must first agree to the executive compensation limits that were in the law. And as far as I know, all of those banks have agreed to do that. If you're talking about other executives within the firm, it's always been our position that pay should be for performance, and that every company should base their pay based on how well somebody performs. And that is still our position.
We would also hope that people would understand that we want banks to participate in this program; we have nine so far that have. I think the Treasury Department continues to receive applications for others that want to participate. And similar to the issue in regards to dividends, our goal is to get them money so that they can start lending again, and so that they can perform well. Remember, they have to pay the taxpayers a quarterly dividend of 5 percent for the first three years, and it bumps up to 9 percent after that.
We're going to keep on them about that. But they know that, and that's almost like a gun to their head, so that they know that they have to start making money to be able to do that. I'm not here to defend Wall Street; I'm not here to defend their pay practices. But this is the law as it was set out that was passed by Congress. And as far as I know, all of the banks that have agreed to participate in the program have agreed to those compensation limits.
Q Dana, on the rescue package.
MS. PERINO: No, I'm going to go up here. Go ahead.
Q A follow-up, thanks. What are the repercussions if banks can't pay those quarterly dividends back to the government?
MS. PERINO: Well, if they can't pay back to us? Well, as Eddie said -- you know, I don't know all -- I don't know what -- I don't want to forecast or speculate that they wouldn't be able to, because we believe that they will be able to. And we're going to -- the whole reason we're doing this program is so that the banks can get recapitalized, that they can start lending again so that people will have the money to be able to both pay their salaries and pay their dividends. And the taxpayers are going to be paid back at the same time. So we'll continue to work on that. I think it would just be wrong of me to speculate on some of them failing.
Go ahead, Paula.
Q On the rescue package, Chairman Lazear also today has said it will take several months to play out before it basically would stimulate the economy. Couldn't you say the same thing, in terms of public works projects? And also, it's been argued that even the long-term new projects would take a while, the existing repairs of bridges and roads.
MS. PERINO: Tell you what. I'm going to refer you over to Brian Turmail at the Department of Transportation who has a lot of information about infrastructure projects. And take it from them -- don't just take it from me, because I've answered this question several times -- take it from them. They're the ones that have the experts, and they can tell you over the years how infrastructure projects do not stimulate the economy, because it doesn't get the money going into the economy fast enough. So let me refer you over there, and we'll see if they can get you more information.
Q Are they the only ones that do economic analysis?
MS. PERINO: I'm just going to refer you over there, because you ask me about transportation infrastructure projects all the time. I've given you the information that I have several times. I don't have any new information. But maybe they could put you in touch with somebody who has more experience and has actually worked on transportation infrastructure projects. I haven't.
Connie.
Q Two quick ones. First, on Syria, without beating you up. Any confirmation today about the alleged killing of the number-two al Qaeda --
MS. PERINO: I've never commented on those strikes, and I'm not going to.
Q Okay, Pakistan. Any update on aid the U.S. is giving to Pakistan?
MS. PERINO: For the earthquake? That's a great question. I meant to check on that earlier and I didn't get an answer. Usually our embassies have the discretion to be able to do an initial payment to try to help in emergencies like that, like we did in Haiti when the hurricane came through. I'll check that on Pakistan.
Q Thank you.
END 11:36 A.M. EDT
