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For Immediate Release
Office of the Press Secretary
October 31, 2008
Press Briefing by Deputy Press Secretary Tony Fratto
James S. Brady Press Briefing Room
11:02 A.M. EDT
MR. FRATTO: Good morning, everyone. First, a couple of announcements. On the Pakistan earthquake, the United States expresses its deep sympathies and condolences to the victims of the October 29th earthquake in Pakistan, and to their families. Through the U.S. Agency for International Development, the United States will provide an initial $1 million in assistance, and stands ready to provide further assistance as may be necessary. We'll continue to work with the government and people of Pakistan to help those affected by the earthquake cope with this tragic event.
The President recorded the radio address this morning. In it, he urges all Americans to cast their vote on Tuesday and to remember the sacrifices our men and women in uniform have made for generations to preserve democracy.
One thing I'd like to talk about this morning -- actually, I think we have this podium on Dana height this morning. (Laughter.) Either that, or my eyesight is exceptionally faltering this morning.
Q Or you've grown.
MR. FRATTO: Or maybe I have gotten taller -- yes, it could be.
Some stories today -- I think one in The Washington Post this morning, and I've seen some others here and there, talking about the administration's efforts to put in place regulations, and some of the language being used -- "midnight regulations" or we're trying to rush regulations at the end of the term --
Q -- trying to remove regulations.
MR. FRATTO: To what? Or to remove regulations. We're hearing all kinds of things about it. And it's put in the context of "just like every other administration," this administration is trying to rush regulations at the end and get them in place before they leave. So I just want to take a minute to talk about exactly what we are doing with regulations and give you a little bit of background.
Back in May -- actually, let me back up even further and go back to January 21st of 2001, when then OMB Director Mitch Daniels issued an order after the President was sworn in to halt action on what was, in fact, a flood of regulations that had been put in place at the very end of the previous administration. This was done because a lot of these regulations have not received the full regulatory review in regular order as this administration coming in thought they should have. And in fact there was a rush of regulations.
I haven't had a chance to look back at administrations that preceded the end of the Clinton administration, but certainly at the end of that administration in the post-election period, November to January, there was in the end of 2000 and January 2001 a more than 50-percent increase in the number of regulations that were issued, compared to the November-to-January period in the previous years of the administration. So there was a really dramatic increase.
We're not doing that in this administration. The number of administration -- the number of regulations under review has remained fairly constant. There's no great increase in the number of regulations that we're reviewing right now over -- if you go back six months or 12 months or 18 months, the numbers stay pretty much steady.
And go back to early this year, the current Chief of Staff, Josh Bolten, issued a memorandum to the heads of departments and agencies on how to deal with regulations. In fact, what the Chief of Staff wanted to avoid was this very charge that we would be trying to, in the dark of night in the last days of the administration, be rushing regulations into place ahead of the incoming, next administration.
So what he did is he set out a timetable for the consideration of regulations, when they could be approved, when final regulations should be brought forward for regulatory review, and to do it in a way that preserves all of the integrity of the regulatory review process -- all the transparency, the public comment period, the internal agency review, the ability to listen to interested parties who have concerns over the regulation to come in and voice their concerns and express their points of view on proposed regulations, and then to issue them in a timely and orderly way. That's exactly what we're doing.
So just to hammer home the point on this, we're trying to avoid that situation where there is a rush of regulation, or the regulation is being put forward in a way that is counter to the very appropriate goals of a system that's characterized by integrity and transportation and public -- I'm sorry, transparency and public comment and agency review of the regulations.
So that's what we're trying to do. If you look at these stories or if you have interest in further looking at how we're dealing with regulations, feel free to come to us. I know there's some from -- you get a little bit from Wendell's quote about removing regulations -- some of the bias in reporting of what we plan to do with regulations -- the sense is that we would try to -- that we're trying to weaken regulations that have a business interest.
Some of the regulations that are coming through I think are not -- maybe not particularly welcomed by members of the business community. I'm not saying one way or the other whether that's a goal or not, but we're implementing regulations and we're trying to do them in the best way that protects the interest of the nation. And we're trying to do it in the appropriate way and in regular order.
So I hope you notice that, and if you have more questions feel free to come back to us on that.
Yes, Jennifer.
Q I want to talk about election night, if you guys have any more sense of the President's plans for what he'll do that night. And also, Dana talked the other day about how the fact that he's not been out there raising money or doing rallies was really sort of a conscious decision to stay focused on the economic crisis. So I'm just wondering if you can quantify that somehow by saying if he had this flood of requests, how many requests that he's turned down --
MR. FRATTO: We have always been in a situation where we've had more requests than we can fill for -- especially for fundraising.
Q But you're in a situation right now where he's doing zero, basically. He did one last week, right?
MR. FRATTO: That's true, but the truth is we're also trying to stay out of the public limelight during this period of the election season. There are two individuals out there running to be President of the United States, and we don't want to complicate that for them. We actually would have preferred to stay even more quiet over the previous weeks than we've been able to. But the President is the President and has some pretty important issues that he's had to deal with, including the financial crisis, that he's had to be a lot more visible on than we would have liked during the most intense period of the campaign.
On election night, the President will be here. He'll be here with the First Lady watching it. I don't have a whole lot of details, but they'll watch the returns come in. And maybe Dana will have a little bit more on Monday on anything more that we can share on that.
Q Can you quantify that, more requests than you can meet?
MR. FRATTO: I don't have numbers in front of me. I just know that we -- when we are thinking about political travel, we have lots of choices. And that has never, ever been a problem.
Q Follow up on that, Tony? Yesterday, the First Lady did a Republican rally in Mississippi; tomorrow Vice President Cheney will do one in Wyoming. Why is that all right, but the President feels it's not appropriate for him to be involved in the -- in a presidential election?
MR. FRATTO: Well, because the President of the United States will get a lot more attention than obviously the Vice President or the First Lady will at these kinds of events. And he does have work back here dealing with the implementation of and monitoring of what's going on in the markets, and meetings with staff on some pretty significant policy questions that we have to deal with over the rest of this administration.
Yes, Jim.
Q So let's get back to those stories about deregulation, or new regulation. What is -- you talk about the goals --
MR. FRATTO: See?
Q I'm just quoting the headline from the Post. When you talk about the goals and philosophy, what are the goals and the philosophy of what's being done right now, whether you're modifying existing regulations, proposing news ones, or trying to overturn?
MR. FRATTO: I don't think you can do -- I don't think there's sort of a broad philosophy that I could say on lots of these. I think we do believe that -- if you want to know what our general philosophy is on regulation it's that you should have the lightest touch to be effective, and effective in meeting the statutory goals that require the regulation.
So the legislation gets passed by Congress, the statute -- after it's signed by the President it becomes statute, and regulation has to be written to meet the spirit of the legislation passed by Congress. You don't want to do more than what Congress required because Congress had a specific intent that would have been debated and certainly considered by the administration and both sides of the aisle, and then the administration's job is to execute that statute and put it into place. You don't want to do more; you want to do the lightest touch that meets the law and the spirit of the regulation.
So that's a broad philosophy for all of the regulations that we're looking at right now. I couldn't tell you -- pick out one or two that way.
Q I guess the conversation -- and I assume what you're always sort of sensitive to is the idea that whatever you're proposing in terms of regulation has to do with the concept of stripping away protections. Is that what concerns you with sort of the rush of stories you're seeing?
MR. FRATTO: Well, that's just one part of the stories. One part of it is content, the other part is process. Clearly on process, we've been very up front about this, about how we're going to deal with regulations and that we're going to do it in an open and transparent way and make sure that the public is involved and that everyone can review the regulations that we put forward.
On content, we take the job very seriously. And you're right, there is a sense out there that we are always looking to simply remove regulations and let the business community or others go unfettered. But it's like, for example, one thing we're working on right now that's gone through regulatory review are putting in place CAFE standards and the regulations for how automakers will have to build more fuel-efficient vehicles going forward. It's certainly not something that's welcomed by some automakers maybe. It's going to impose challenges for them in being able to put those vehicles out into the market, but we need to do it in a way that, again, respects the integrity of the legislation that was passed by Congress -- and, by the way, just as a reminder on that subject, we, the administration, posed more aggressive CAFE standards than was actually passed by -- than were actually passed by Congress.
Q One more follow. I guess because right now with the financial crisis, the buzzword for -- in a lot of quarters -- explanation for what happened is deregulation or not having -- the touch was too light. And are you concerned about this? Because people are seeing that the administration is trying to get involved with the regulatory process when the concern is for the financial crisis that you weren't involved enough.
MR. FRATTO: A couple things on that. I hear that charge thrown around that we deregulated the markets, and the evidence of that out there is scant. And if you could name one or two regulations that the administration proposed to -- that led to the financial crisis, then maybe we'd have something to talk about.
But most of the evidence, actually, is that we were trying to strengthen regulation for the one part of the financial markets that did contribute to the crisis, and that was with respect to Fannie Mae and Freddie Mac. And we've told the story a number of times before that we tried for six years to put in place a strong, independent regulator that would have the authority to control the portfolios of Fannie Mae and Freddie Mac, and not let them do the risky kind of lending, or backing of lending, that helped to contribute to the housing crisis.
So the one big effort where we did have a great deal of involvement was actually to increase -- try to increase regulation and oversight and supervision of the two housing government-sponsored enterprises. And there isn't a whole lot of evidence out there of places where we tried to weaken regulation for the financial markets.
Now, the financial markets do have regulators and they have a job to do, and we always hope that they be as aggressive as possible in looking for things that pose systemic risk, and I think there will be a lot of history written on this, whether they did a sufficient job on that or not. But I think there's -- lacking evidence as to whether we try to strip away regulation that caused problems in the financial markets.
Q Tony, let me follow that if I can. Whenever regulatory changes are made at the end of an administration, there is an appearance at least that you're either doing things that were politically unpopular beforehand that you can now do, or that you're preempting the incoming President, as very much appeared to be the case at the end of the Clinton administration. So absent the financial crisis that we're dealing with now, why are we facing regulations that could -- it seems to be -- have been made much earlier in the administration?
MR. FRATTO: I wouldn't say that. I think we've had a fairly steady pace. In fact, that's exactly the point I'm trying to make, Wendell. The first point is this, is that the administration does run until January 20th, 12:00 p.m., of 2009. We still are the administration. We have the constitutional authority to do everything that we're supposed to do in leading the nation. So we have the right to put regulations in place.
I never faulted the Clinton administration or any previous administration for actually putting their policies in place. They have the right, and not just a right, an obligation, to do that. What we faulted on was the process. And what we have done in a very deliberate way is to have a very open, transparent process, and a timely process, so that everyone can see exactly what we're doing and that we are doing it in a responsible way.
Q Same subject?
MR. FRATTO: Okay.
Q You've said the regulations have been coming up pretty steady pace. Well, how would the number of regulations during any three-month period of this administration compare in terms of the last three months?
MR. FRATTO: I'm sorry, of this administration?
Q Yes, I mean, you're saying maybe 90 in the last three months. How does that compare to any other three-month period, when you put out 90 --
MR. FRATTO: It's been fairly steady.
Q -- 90 every three months?
MR. FRATTO: In that range. I think it's averaged at about 90 -- 93 or so. You could check in with OMB. They have the statistics for you; they'd be happy to share them.
April.
Q Tony, when the President's popularity was dropping and a lot of controversies were coming out of the White House, from that podium, to paraphrase the President, he said he would like to be loved, too. Now he's not been asked to appear with the Republican nominee, and that same nominee is attacking this President. Could you tell us how the President is handling his lack of love right now -- (laughter) -- when his time is winding down?
MR. FRATTO: We feel lots of love, actually. And so -- (laughter.) Yes, and I think the President does, too. But I'm not going to get involved with how the campaign --
Q He made that comment at that podium during a press conference.
MR. FRATTO: Look, there are always going to be -- there will always be polls out there on that kind of thing. And what the President is focused on is not what the polls say. He's focused on doing as much as he can in this period to put the government in a good place going forward, especially with respect to the transition to the next administration. He wants that to go as smoothly as possible. And we have very critical issues that we're dealing with, not least are two wars that we're still executing, and protection of the homeland, and dealing with the financial crisis. That's what the President is focused on. He's not focused on --
Q Well, let me ask you this. He's a human being, and he let his human side come through that day. Now I'm going to ask you this: Is it political -- does he look at it as something political when they're attacking him, or is he taking it personally?
MR. FRATTO: I don't believe the President takes it personally. I haven't had this kind of conversation with him, but I don't believe he takes it personally. He's been in politics his entire life, he's been around it his entire life, and he knows that it's a rough-and-tumble business. And so he's not the least surprised by it, I can tell you.
Q So he understand he has a bulls-eye on his back?
MR. FRATTO: Any President will have a bulls-eye on his back.
Q Tony, I'd like to shift to the banks and the rescue program. Barney Frank put out a statement today saying that he disagreed with the terms of the use of the money. He said that any use of the funds for the purpose other than lending, such as bonuses and severance pay, dividends for the acquisition -- or use of the money for acquisition of other institutions "is a violation of the terms of the act." You and Dana both defended the use of dividends, at least up to a certain point -- or not increase them. Can you respond to Mr. Frank's --
MR. FRATTO: Well, if the capital injections were used to pay for dividends, I think that's probably something that we would object to, too. But that's not the intent of their use, and there's no evidence that that's taking place. Now, we did talk a lot about why you wouldn't want to go in and have a blanket halt to allowing institutions to pay dividends. But it was very clear in the law they can't increase dividends.
But I think I want to make a much more important and broader point on this, is that if you remember, what we are trying to do here is not to exact vengeance on the banking industry. What we are trying to do is to have a healthy banking industry that can get back to the business of lending so that we can get out of this credit crisis we're in right now that is affecting millions of Americans and hundreds of thousands of businesses who are trying to do what they do best, which is work and produce good things and be productive, and to get this economy going back again.
But if you go in with the goal that you want to exact vengeance on this industry, then there are a whole other set of things that you want to do, and those things won't solve the problem. And what we're focused on is solving the problem. And that requires banks to step up and to be part of this program. They've got about three weeks, the regional banks around the country and other banks that can apply for the capital injection program. It's essential that we have the maximum number of banks enroll in this program, and that they get the capital base and get their balance sheets in a place where they can resume lending again, because that fixes the problem -- that contributes to fixing the problem.
But if banks decide that they can't participate in the problem* because it will -- it will wreck their businesses, then not only have we wrecked their businesses, but we haven't solved the essential problem for the U.S. economy.
Q So the administration doesn't object to continued paying of dividends, just don't increase them and don't use part of the $700 billion?
MR. FRATTO: Banks can make the decision -- right, they shouldn't use the capital injection money to increase dividends or pay dividends. And traditionally banks and other businesses set aside how much they're going to spend on dividend payments.
But I still just go back to the broader question -- we need to be focused on fixing the problem. And so that's what we're focused on. I know that's what the Treasury Department is focused on, and they're focused on trying to do it in a fair way that will have an impact, that will be efficient and that protects the taxpayer investment.
Q You don't have any quarrel with Mr. Frank's statement then?
MR. FRATTO: On which -- well, there was a lot in there. I'm not sure that -- we only talked about one of the things he mentioned. (Laughter.)
Q Okay. Well, can I ask a different question, different subject? It's on the transition. Is there some sort of building or -- the President named a transition team to help out the incoming administration. Is there some sort of building here in town that they have sort of a headquarters that they meet at or anything, or is there --
MR. FRATTO: No. I don't know if it's -- well, the incoming -- the President-elect will a have a transition -- I don't know if they already have -- if GAO has already set aside space -- actually I believe has space --
Q GSA --
MR. FRATTO: I'm sorry, GSA. I believe GSA has space for the incoming transition team, but I don't know where it is.
Q The council that the President named --
MR. FRATTO: No, those are members of the administration. They meet for meetings here.
John.
Q So it sounds like you would resist any efforts to impose new restrictions on the use of the money. Is that fair?
MR. FRATTO: Well, we have the law that has certain appropriate restrictions in it, and we do think that's enough right now. We think that if you go back in and try to impose new restrictions, then you have a bait-and-switch with the people who are already -- the firms that are already part of the program and would probably make it unworkable.
Q What would happen if you did -- if Congress did impose a blanket ban on dividend payments by companies that are participating? You sort of suggested that it would wreck their businesses, but how would that happen?
MR. FRATTO: Well, look, I can't speak for each individual business, but certainly the fact that firms pay dividends attracts investors to that firm. And remember, what we saw during the very intense period of financial crisis were investors fleeing banks and further subtracting from their capital base. And that's the problem that we're actually trying to fix.
So what we want are investors -- private investors to come into banks with capital so that they can get out of holding taxpayer dollars as capital. The best way for the taxpayer to be paid back is for private investors to come back to investing in banks, for banks to go out and raise capital, and they can pay off the taxpayers' investment, and pay it off with a 5 percent return for the three years that they'll be holding that capital. They can't do that if you make them less attractive to investors.
So what we'd like to do is get these banks healthy, get them in a position where they can do their traditional role -- the only thing that banks do to make money is to lend money. And so we need them to get back into the business of lending money because our economy depends on it.
Q Tony, real quickly on the economy, you said he's monitoring it. Consumer spending is down by the most in four years. How concerned is the President about that?
MR. FRATTO: Well, it's not unexpected, just like the GDP report yesterday wasn't unexpected. When you have a financial crisis that has -- and a credit crisis, in particular, that has shut off so much availability of liquidity to consumers and businesses, and a slowing economy, that's what you would expect to see. So of course we're concerned to see the data. But remember, the data is looking backwards, and what we're trying to do is look forward and see what impact the policies that we have put in place and just started to implement, the impact that they're going to have for the economy going forward. And we think that it will be positive.
Paula.
Q On this idea of a second economic package, some are arguing that really the main goal is to try to make the economy -- the slowdown, recession, whatever -- slow -- I mean, make it shorter and shallower. If that were the ultimate goal, would the White House support it?
MR. FRATTO: I think that's a speculative question. What we have said is, come back after the election; we'll see where Congress is and see what their thinking is on further economic policies. We're always reviewing economic policies and things that will help the economy return to economic growth and job creation, and that's what we're focused on. We'll see where Congress is afterwards.
Q And Chairman Lazear yesterday talked about a consumption burst, which, as you know, really only happened last September, like three to five months after the stimulus checks were sent out, and that the economy didn't turn around as he hoped. So, given the chance in economic conditions, wouldn't the goal actually be to just try to make this recession shorter and shallower, I mean, rather than --
MR. FRATTO: You may have your own predictions on what the business cycle is going to look like going forward. But like I said, when we get back in November, Congress gets back in November, we'll see where they are.
Q Another question about the regulations. I know you said the number is similar to past periods. But what about the content? Because it seems like environmental groups are focusing in, saying that there's more of a -- I guess a stress on easing limits on emissions from power plants allowing more pollution.
MR. FRATTO: You know, we put out a -- there was a rule that came out recently that -- the toughest regulation on lead, for example. I mean, we're in a difficult position with regulations that are under review in that we can't -- we're constrained in what we can say about regulations that are under review. Critics outside the fence here can say whatever they want about what we're doing, but we have limits on how we can talk about regulation under review.
I would be highly doubtful that there's any specific increase in environmental-related regulations. I've noticed a pretty steady stream of regulations having to do with environmental issues, at least since I've been here at the White House.
Q But have you heard more objections from environmental groups for the regulations in this period?
MR. FRATTO: No more than usual, no.
Q Tony --
MR. FRATTO: I'll get to you, Les.
Goyal.
Q Two quick questions. One, there's still bombings across India, and now Senator Obama has been calling to get al Qaeda and Osama bin Laden in the region of Afghanistan and all that. Do we have anything surprise coming up for Osama bin Laden end up here?
MR. FRATTO: I'm not aware of any surprises coming up, but certainly we're looking for anyone involved in terrorism in that region.
Jon.
Q Secondly, if I may?
MR. FRATTO: Oh, okay.
Q Thank you. As far as U.S.-India civil nuclear deal still, of course, on the presidential -- the President's desk. But because of Pakistan was not very happy with this deal, and they have now signed with China. Are we aware of the decision, aware that they have signed a more vigorous military type of deal with China?
MR. FRATTO: I'm not aware of that. I haven't heard anything on that, Goyal.
Jon.
Q Real quickly on using TARP money for helping homeowners avoid foreclosure. Treasury yesterday said that they will look at that proposal, but in the present tense. Is it being looked at? I believe you guys have said it's one of the options being considered, but is it coming up in the meetings? Are you working on this option as one among several?
MR. FRATTO: There are several proposals out there with respect to how do you address the problem of potential home foreclosure, home foreclosures in the coming years. So we're looking at a number of proposals.
Q Is it one of them?
MR. FRATTO: The FDIC has some ideas that they've brought to the table. Others have also. We're doing all the analysis that you would expect us to do, going through the deliberative process of policymaking, and that involves the analysis of what the impact would be, how fair it is, how effective it would be, is it workable, do we have the authorities to do it, where do you get the money to do it. And that's the analysis that's going on with an array of ideas that have been brought to the table.
Q When you say "table," it's a literal table, not a --
MR. FRATTO: It's a roundtable.
Q -- metaphorical table, right?
MR. FRATTO: Yes, it's a round table. People sit around and discuss these things.
Q Tony, one of the others is Glenn Hubbard's proposal. What does the President think of his mortgage --
MR. FRATTO: I didn't ask the President, but I'm familiar with Glenn's proposal. It's interesting.
Q Tony?
MR. FRATTO: I'm going to go to Mark, then Mr. Lambros, and then Les.
Q Tony, has the administration decided against funding for a GM purchase or merger with Chrysler? There are reports that idea is off the table.
MR. FRATTO: There are lots of reports and rumors out there. Some of them change by the hour, and I'm not going to get in the business of confirming or knocking down every rumor that pops up out there. What we do have is statutory language which DOE is trying to put the regulations out on, dealing with the automaker loan program to deal with energy-efficient vehicles. DOE is working as quickly as possible to try to get those regulations out.
And there is urgency in that. We do want to make sure that the automakers, as quickly as possible, get a chance to see what that regulation will look like and how that affects their future.
Mr. Lambros.
Q Thank you. Mr. Fratto, the talks between Athens and Skopje on the name issue failed again, and I wonder if President Bush is concerned for a solution, which is a precondition for FYROM to become a NATO member in December.
MR. FRATTO: I'm not aware of our views on that at this time.
Q One more?
MR. FRATTO: Okay.
Q Do you think President Bush is going to take any initiative, since the time is running out, by December?
MR. FRATTO: Any trips overseas?
Q No, no, any initiative on this issue, since time is running out by December.
MR. FRATTO: I don't know. I can't anticipate that.
Q Can you take this question?
MR. FRATTO: We'll take the question and Gordon Johndroe will get back to you.
Lester.
Q Thank you, Tony. Two questions. The Los Angeles Times reports that Defense Secretary Gates, in addressing the Carnegie Endowment for International Peace this week, warned that unless the United States modernizes its inventory of nuclear weapons and develops a replacement warhead, the atomic arsenals' long-time safety and reliability will deteriorate. And my question: Does the President agree or disagree with this?
MR. FRATTO: The President agrees with both his Secretary of Defense and National Security Advisor Steve Hadley, who discussed the same issue.
Q The Times also reported that Gates "broke" with the Bush administration by saying the U.S. probably should ratify the Comprehensive Test Ban Treaty, which "President Bush opposes." And my question: Is the Times wrong, is Gates wrong, or has the President changed his mind?
MR. FRATTO: I haven't seen the Times report. Let me just say again, the President agrees with his Secretary of Defense and his National Security Advisor on those issues.
Thank you.
END 11:36 A.M. EDT
*program
