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Home > News & Policies > Press Secretary Briefings

For Immediate Release
December 11, 2008

Press Briefing by Press Secretary Dana Perino
James S. Brady Press Briefing Room

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10:02 A.M. EST

MS. PERINO: Hello. One announcement for you. As I said yesterday, the President would be meeting this morning in the Roosevelt Room with people who are in recovery and leaders in drug prevention, treatment and law enforcement, and he will highlight some of the successes that have contributed to our nation's reduction in drug use in many areas. In 2002, he set an ambitious goal of reducing youth drug use by 25 percent over five years, and to work towards that goal the administration implemented a balanced strategy that emphasized three things: prevention, treatment and enforcement.

Today the President is happy to highlight the latest Monitoring the Future study. This is an annual study that comes out, which concluded that youth drug use has decreased 25 percent from 2001 to 2008.

And with that, I'll go to questions.

Q Dana, a couple questions on the auto legislation. Who is the President calling specifically to try to win over some votes? And what is his message to these senators?

MS. PERINO: I'm going to decline to give you a list of who the President would be reaching out to, but the President and others are reaching out to senators today, listening to their concerns, listening to their questions, trying to answer their questions as best we can, making the case for why this legislation is the most effective and appropriate approach to help the auto companies become viable for the long term.

We've been talking to them about the auto czar position and the sweeping powers that that person would have for doing one of two things with these companies: forcing a major restructuring or putting them into bankruptcy. And then at the end of the day, in either scenario, the taxpayers would be paid back. So that's what we're going to spend our day today trying to do, is convincing them that this is the most effective and reasonable approach.

Q Realistically, at this point, is the White House confident the bill will pass the Senate?

MS. PERINO: I think that we think that there is a chance, sure. It could -- it's realistic.

Q What's the President's argument against those in his party on the Hill who say that this is not the most effective way, that this will simply prolong the problem, force an infusion of more cash later, that there needs to be a structured bankruptcy?

MS. PERINO: Well, there are going to be members of Congress who disagree with us, even at the end of the day, no matter how forceful and persuasive our arguments are. So what we're trying to do, for those who have an open mind about it, is to try to convince them that we think that we have the right approach.

Something else happened today that all of you are probably already covering, which is we had the unemployment claims which are the highest now in 26 years. And we believe that the economy is such -- is in such a weakened state right now that adding another million jobs -- another possible loss of 1 million jobs is just something our economy cannot sustain at the moment. We think that this approach of requiring companies to either fundamentally restructure and become viable for the long term, or to then go into an orderly bankruptcy, rather than a disorderly bankruptcy -- like they could possibly have if we don't go forward with this legislation -- that that is just something our economy can't withstand at the moment.

So one of the things that we're also talking to the members of Congress about is that if this -- if we were back in a year and a half ago, or two years ago, when our economy every quarter was posting great numbers for job growth, and the GDP numbers were constantly coming in at a higher rate for five years -- we had 52 consecutive months of job growth -- if we were in that period of time, and we were having this conversation, one -- it would be just a very different conversation; it's just not where we are in terms of reality of where the economy is right now. The economy is in a very weakened state. We have to do things at the federal government level that we wouldn't normally want to do. But if we have an obligation to act, which we think that we do, we think that you also have an obligation to come up with something that is reasonable, straightforward and filled with common sense, which we think our proposal is.

So we do think there's a chance that we can get this done today. We think that there are members of Congress who might have some ideas on how things could possibly be improved in the bill. We're willing to listen to them, and that's part of that outreach that we're doing today, as well, not only trying to convince them, but also listening to them, as well.

Q Dana, a week ago you were talking about $25 billion, then it was $15 billion, now it's $14 billion. What happened to all the money?

MS. PERINO: Well, I think that those who are working on this legislation are trying to figure out what could we do for short-term financing that would be able to help the companies while the auto czar takes a look at their plans and forces all the stakeholders to come to the table. And I think that they think that the amount of $14 billion is about the right amount that they would need right now in order to do that.

Helen.

Q Did the President -- from your reports earlier -- the President did not foresee any of this fall in the economy?

MS. PERINO: Well, no, I don't think I -- I didn't say that. What I was trying to say is that the -- in normal economic times, if a company -- an individual company or individual industry came to the United States government and asked for help when we were in the middle of job growth and GDP growth, then we probably wouldn't even be having this conversation.

What I'm just trying to say is that the state of the economy is terribly different now, and we have record numbers of unemployment, and we just do not believe that the economy would be able to sustain it. The ramifications of that type of massive job loss would ripple throughout the entire economy and through the world, as we've seen.

So we think that we have a responsible and reasonable approach to provide some short-term financing while they also have to come to the table and make really tough decisions, and that includes the creditors, the unions, and the executives. And there's, as Joel Kaplan told you yesterday, executive compensation limits throughout this bill. So those are some of the details that we're trying to get to Capitol Hill today as they contemplate the legislation. They're going to debate it today, and then hopefully there will be a vote later today.

Q What does the President think is the reason for this tremendous fall?

MS. PERINO: For the automakers or the economy as a whole?

Q For everybody.

MS. PERINO: Well, I think that we've -- look, I think there's lots of different factors. One of them had been certainly the housing crisis. The President had worked for years to try to get Congress to reform Fannie Mae and Freddie Mac; that did not happen. But we're not here to point fingers, okay. We recognize that there are things that the private industry could have done to prevent it, that the independent regulators could have done, and that the private sector could have done.

One of the things I think that some of these members are mad about is that they feel that the executives of these companies and that the unions made some really bad decisions over a period of time, and that they think that this is a once-in-a-generation opportunity to fundamentally restructure these companies. Well, we agree with that, and we actually think that we can do it in an orderly fashion through an auto czar that has sweeping powers to be able to say, this concession is not going to be good enough, come back to the table; and if you can't come back to the table, then I want the $15 billion -- or the $14 billion back into the taxpayers' bank account right now, and you're going to go into a disorderly bankruptcy.

There's really only one of two outcomes with this legislation. If we don't have this legislation and we don't help them have an orderly bankruptcy, the ramifications of such widespread job loss would ripple throughout the economy. And we're just trying to prevent that in the most responsible way possible.

Q Just one more question. Will Wall Street also repay every penny they --

MS. PERINO: Through the TARP legislation -- this is the rescue package -- every decision that's being made by the Treasury Department is intended to make the taxpayers whole, or even, hopefully, at some point, to get them a return on that investment.

Q Dana.

MS. PERINO: Sorry, I'll go to Wendell and come back over here. Go ahead.

Q Dana, one of the concerns of some Republicans is this doesn't solve the automakers' problem. Bob Corker says you're just kicking the can down the road. With $14 billion you really only get them into the Obama administration. Is that the solution to -- is this only a matter of holding off for a few months the ultimate collapse of one or more of the auto companies?

MS. PERINO: Well, I don't think that the companies think that they have a few months. That's why we are trying to act now. I will let them speak for themselves, but I think they've been very open about the difficulties that they're having right now. And that is why they've come and asked for help. It's not an easy thing or a thing to do to come and ask the federal government for help. You have to put away your pride and say, we want these -- we want our companies to be able to be successful; here's what we're going to be willing to do.

Now, the auto czar that we would put in place would have the opportunity to make them -- force them to make really tough concessions. But the other thing is, is that if we don't act and these companies go away, we could wake up and not have any domestic auto industry, which is certainly not the outcome that this President wants and I would think that most members on Capitol Hill don't want it either.

But here's the thing, Wendell -- for those members who think that, I would ask them just to look at this legislation because there's really only one of two outcomes: either fundamental restructuring that will make them viable in the long term, or an orderly bankruptcy filing. And we're just asking for a little bit of help from money already appropriated to help the automakers in order for them to be able to either make their companies profitable or to go into an orderly bankruptcy. Those are the two outcomes that we're seeking.

Q And the idea that you're kicking the can down the road?

MS. PERINO: I don't see how that -- we're trying to pass legislation today. I don't understand how that's kicking the can down the road. Plus, we have also been working with the Obama administration, as you heard -- I'm sorry, Obama team, not quite administration yet -- but we've been working with them, making sure that they understood the actions that we are wanting to take. And I think that they've been at least generally supportive -- I won't speak for them -- but generally supportive of the measures we're taking, because they recognize the ramifications of not acting.

John.

Q Is there a plan B if the legislation doesn't pass?

MS. PERINO: Our plan today is to make this one work.

Rachel.

Q Dana, what do you do to assuage concerns from congressional members who are concerned about what you characterize as the sweeping powers of that czar --

MS. PERINO: Sure.

Q -- that they say this is concentrating too much control and power --

MS. PERINO: We feel that the legislation that we have provides for this individual to make the tough decisions necessary on behalf of the taxpayers in order to protect the taxpayers and help protect the economy. It doesn't mean that they're going to be making the decisions as to what the concessions would be, but they would at least be able to rule on something being in or out of bounds. And I think that that is a reasonable way to go. They're not going to be sitting down in the boardroom making the actual decisions on behalf of the company, but they are going to be making sure that they're reviewing those decisions and then making a ruling at the end of the day about long-term viability. And if the company cannot prove long-term viability at that point, then they pay the taxpayer back for the short-term financing, and they don't get any more long-term help.

Toby.

Q Dana, just on another thing.

MS. PERINO: Does anybody have anything else on autos? Back here.

Q Thank you, Dana. These auto companies are burning through cash so quickly. How long, exactly, will $14 billion last? And second question, you talked about an orderly versus a disorderly bankruptcy. Can you explain how both of those processes would look?

MS. PERINO: Well, I think that by their very definitions you could imagine what it would look like. But I'll leave it to the auto czar to define how he would help them have a soft landing rather than a crash.

An then the first part of your question was --

Q How long will $14 billion last?

MS. PERINO: Look, I think that -- the numbers that they've come up with, they believe are enough to help for the short-term financing through I think it was March 31st, or, as Joel said, they could have an option -- the auto czar would have an option to say, we're making real progress here, we just need a little bit more time. And there's a one-time 30-day extension that would end on April 30th.

So I can only imagine that the people who are working on this day and night believe that the money that we have put on the table would be enough for that short-term financing.

Toby.

Q Has the President been shocked, or what's his reaction with the Blagojevich scandal out in Chicago? And what does he think it says about Chicago politics today?

MS. PERINO: The President believes that it's a very serious situation, that the charges are astounding, but that because it is in the middle of a investigation that the U.S. attorney is conducting, we won't have further comment.

Q And on another topic.

MS. PERINO: Okay.

Q Apparently the North Korea talks have reached an impasse. So what's the next step?

MS. PERINO: I did hear that just before I came down, and Chris Hill made some comments, and one of the things he said was that the North Koreans don't want to put into writing what they've put into words. He is now on his way back to the United States, and I'm sure he'll be briefing principals as soon as he possibly can. So it's too early for me to say what the next steps are, but what's unfortunate is that the North Koreans had an opportunity here. There was an open door, and all they had to do was walk through it, because five of the members of the six-party talks had all agreed on a verification protocol. Because they decided not to work with us and the talks have devolved, because they wouldn't put it in writing, we're going to have to rethink some of this action for action, which is what we had said we would do. So let us hear from Chris Hill as soon as he gets back, and we'll keep you updated on next steps.

Ken.

Q Dana, do you have any intel on tomorrow's commencement speech, what might be in it?

MS. PERINO: I do. I have read it.

Q The speech?

MS. PERINO: Yes. (Laughter.) I would -- yes, actually, it's a very good speech. The -- I shouldn't say "actually." (Laughter.) Okay, I'm digging myself out of the hole. The speech is about -- it's not focused a lot on policy. The President will -- it's a commencement speech, so one of the things the President will do is talk about some -- he'll give some advice as to how he thinks that they can have good and healthy and productive lives as American citizens graduating from Texas A&M University. Obviously it's near and dear to the family's heart, and to his dad's in particular.

And I think what he'll do is highlight the -- some individuals that he has met over his time as President, and hold them up as examples of what these graduates could aspire to be.

Q Do you know if there's any side trip to his father's library, or any other facilities while he's there?

MS. PERINO: As far as I know, I think we're just to the library and back -- or to the school and back, excuse me. But I'll check, I don't think there is anything planned.

Let me go back up here. Ben.

Q I just wanted to quickly follow on Toby's question. When you talked about potentially rethinking some of the action for action on the North Korea standoff, does that mean that the White House, given what's happened today, is contemplating pulling back the removal of North Korea from the terrorism list?

MS. PERINO: No, I don't think so. I think that we -- I think we need to hear from Chris Hill in terms of what we would do. Obviously one of the things people think about is energy assistance. And I'm not going to propose anything here, because I simply don't know. And that is just me talking without having talked to any principal before coming down here, because I just saw the report and heard the news that Chris Hill was on his way back. So as soon as he's back, we'll try to see what the next steps are.

I'm going to go over here. Goyal.

Q Two questions. Thank you. This may be the first time the U.N. body has voted against terrorist attacks, especially they were focusing on the Mumbai attack. Where do we go from here? And also, the U.S. is on high alert because there were some reports that they might be targeting somewhere in the U.S.?

MS. PERINO: I don't think that the Department of Homeland Security has changed the alert level, but obviously we're always on alert when it comes to helping prevent terrorist attacks in America.

The vote in the U.N. Security Council yesterday was an important one, and it shows that the international community recognizes the threat of terrorism against all civilizations -- civilized people. And I don't know what the next step is in terms of what they would do, in terms of follow-up action, but I think that was a symbolic vote, and one of importance for India and for the rest of the world.

Q And second, as far as the Mumbai attacks are concerned, where do we go and what we learned --

MS. PERINO: I don't have anything to add from yesterday, Goyal.

Go ahead.

Q Dana, one more question about the bailout. You said a couple of times you think there's a chance it will pass. You don't sound terribly confident.

MS. PERINO: Look, I don't know what's going to happen. This is Congress, after all, that we're talking about. And we know that it's going to be a tough vote, and members of Congress are going to let us know how they feel about it with their vote, or over the phone with them as we're trying to reach out to them today. And we also have members from our team who are up on Capitol Hill trying to talk to them.

I think I would just have to leave it as a chance, and I'm not going to qualify it any other way.

Q And who -- you said members of the team -- who's up there?

MS. PERINO: Well, I'll just -- for example, Dan Meyer, who heads our legislative shop.

Q Dana -- thank you, Dana, two questions. Illinois Democrat U.S. Senator Richard Durbin has called upon President-Elect Obama not to replace Chicago's U.S. Attorney, Patrick Fitzgerald. And my question: The President agrees with and is grateful to Senator Durbin for his support of Mr. Fitzgerald, isn't he?

MS. PERINO: Les, that will be a decision that the President-elect makes when he decides to make it.

Q Okay. The President surely agrees with the President-elect in that the Governor of Illinois should resign, doesn't he?

MS. PERINO: I have not spoken to the President about that in particular. I just --

Q Well, what do you think?

MS. PERINO: It doesn't matter what I think.

Bret, did you have something?

Q Yes. Governors are up on the Hill today, testimony at the Appropriations Committee, for assistance to states in another stimulus bill. Any chance the Treasury, do you think, would consider some short-term assistance for states from the TARP before President Obama takes office?

MS. PERINO: I don't know. I would think that it would be unlikely. But I think that since the governors are here, I don't know what sort of meetings they might have had with the Treasury Department. So let us check and we can get back to you.

Q Thank you.

END 10:20 A.M. EST