White House Press Briefing by Ari Fleischer

Transcript of Sept. 7 White House Press Briefing by Ari
Fleischer
To: National Desk
Contact: White House Press Office, 202-456-2770

WASHINGTON, Sept. 7 /U.S. Newswire/ -- The following is a
transcript of today's White House press briefing by Ari
Fleischer:

MR. FLEISCHER: Good afternoon. I have an opening statement and
then, if you would, at the end, I want to make sure I get to the
week ahead.

The President is very concerned about the rise in
unemployment, as was announced today. As President Bush
indicated on Labor Day, for any one person who was out of a job,
their unemployment rate is 100 percent. And he is concerned
about anything that would indicate that Americans are being laid
off, and he has a plan in place to address this issue.

The plan was agreed to by congressional Republicans and
Democrats, an overwhelming bipartisan vote, particularly in the
United States Senate. And the President believes very much that
the stimulative effect of the tax cut, in combination with the
series of interest rates cuts undertaken by the Federal Reserve
will give the economy the boost it needs so that Americans can
have the jobs they need.

Q On that point, the Democrats are saying that the
budgetary projections with deficits that are projected are now
becoming their own drag on the economy, that they are prolonging
the slow down in economic growth and threatening future growth
and, in fact, these deficit projections in the budget may have
their own part in creating these higher unemployment numbers.
How do you respond to that?

MR. FLEISCHER: Well, I think it's just the contrary. Most
private sector experts have said directly that the stimulative
effect of the tax cut will add to economic growth. So I think
there is little support for what the Democrats have said.

The fact of the matter is, the existence of surplus results
from growth. And the President believes the most important thing
for the nation is to pursue growth policies that bring about
jobs for Americans and also bring about surpluses for the
government, keeping in mind that even with the economic slowdown
that is now about 14 months old, the surplus is the second
largest in American history.

Q So you disagree that these on-budget deficit
projections are having any drag on the economy?

MR. FLEISCHER: The surplus is created as a result of growth.
And growth is created as a result of the decisions the
government makes, which are reflected in the budget. And in this
case, the decision by the President, as well as the Congress and
the many Democrats who supported the tax relief package, will
help create an environment in which growth will take place as a
result of the stimulative effect of a tax cut which is only now
going into the effect in the economy.

Q But on that particular point, that they're arguing that
the projection of on-budget deficits are having a drag on the
economy, do you disagree, and why?

MR. FLEISCHER: Well, number one, there is no projection of
on-budget deficits. The administration projects that there will
be on-budget surpluses. And, frankly, if you take a look at it
from a pure economic point of view, the only surplus that
matters from an economic point of view in terms of growth is how
much money comes into the government and how much is spent. And
on that question, the federal government has the second largest
surplus in history.

MR. FLEISCHER: Each dollar that comes in is measured against
how much goes out. And when it's measured in that effect, the
government has the second largest surplus in history.

Q So you still believe, then, that this surplus --
on-budget, off-budget -- is still an imaginary red line, and
that the only true deficit is one --

Q But the only true deficit, though, is when both the
on-budget and the Social Security surplus --

MR. FLEISCHER: Well, the Democrats are saying that markets
react to on-budget, off-budget. Each dollar is economically
viewed as the same. But from President Bush's point of view,
it's a governmental priority, and he will continue to push for
it, to protect Social Security. And his budget protects it.

Q So then, again, the only true deficit projection that
would have an impact on the market were if both the on-budget
and the off-budget surpluses were exhausted?

MR. FLEISCHER: Well, again, the key to budget surpluses is
growth. And the President's plans create an environment in which
growth takes place. And the budget is the reflection of the
decisions that policy makers make. And in this case, it's the
tax cut that will help drive the economy.

Q Ari, you said that the President has a plan in place to
address this issue, and that the plan will give the economy the
boost it needs. Is the President really confident that no
additional measures will be necessary to move the economy
forward, or to help people that are going out of work in a
number nearing 5 percent now?

MR. FLEISCHER: The President is confident that the plan that
is in place will work. And let me remind you that that plan is
only now beginning to be felt in the economy. And the plan is a
three-part plan in the short term, and our nation has only
experienced, now, about one and a half parts of that three-part
plan: the rate cut across-the-board that went into effect on
July 1st provided a small boost; the rebate checks that are now
being felt throughout the economy provide a significant boost.
And there will be the additional stimulative effect of an
across-the-board tax cut for all Americans that goes into effect
on January 1st.

That, combined with the fact that the Federal Reserve Board
has cut interest rates for now a sustained period of time,
provides the nation with a unique moment for both tax policy and
Federal Reserve policy are kicking in at just at the moment the
nation needs it most.

Q Just to follow up on that, Ari, how much time should
the Congress -- will the White House, and should the public
allow to pass in the current economic distress that's being felt
before thinking that perhaps some additional measure beyond what
the President has proposed or different from what the President
has proposed should be attempted?

MR. FLEISCHER: The best advice of the economists, private
sector and public sector, even taking into account rising
unemployment has been that the economy is projected to come back
late this year and into next.

Q Well, Ari, the text plan that did pass was originally
touted as an insurance policy, itself. So what's wrong with
another insurance policy like the capital gains tax cut?

MR. FLEISCHER: Because the President is satisfied at this
time that this insurance policy will work.

Q So you're not worried that by supporting a capital
gains tax cut that it would feed charges that the tax plan of
the Bush administration is friendly to the wealthy and so forth?

MR. FLEISCHER: No, and actually, the President is
open-minded on the question of a capital gains tax cut.

Q Yet, he President appears to be closed-minded to the
idea of spending any money from the Social Security surplus. Why
would he do that if he believes in the stimulative effect of a
tax cut if there are many economists who believe that you can
stimulate the economy similarly with spending?

MR. FLEISCHER: Because that money was paid into Social
Security by workers, and it was promised by the government to be
held for Social Security, and the President thinks that promise
should be kept, and his budgets keep the promise, he's dedicated
to keeping the promise, and the promise will be kept unless
Congress overspends.

Q Does this have any impact at all on your projections --
this, and slower-than-expected economic growth in the most
recent figures? Does it change in any way the projections that
the administration had over the next year or two? And did
officials here anticipate that unemployment would reach this
level, or is this a surprise?

MR. FLEISCHER: Unemployment, as you know, is a lagging
economic indicator. In private markets there was talk for the
last several months that the unemployment rate, they were
surprised the unemployment rate did not inch up. But from
President Bush's point of view, whether the unemployment rate is
4.5 percent or 4.9 percent, any one American who loses a job has
100 percent unemployment. And that's why his focus will remain,
like a laser beam, on growth, on improving the economy. And that
way the government and the country can enjoy surpluses bigger
than the second largest, which we currently enjoy, and as well
as giving a stimulative effect to the economy.

Q I understand that he feels the pain of anyone who's
unemployed, but what I was asking really was whether or not your
economic advisors anticipated this and, if not, does it change
any of the projections you had?

MR. FLEISCHER: Actually, if you recall, I believe Mr.
Lindsey gave an interview sometime in the spring or early summer
in which he did indicate that he projected a rise in
unemployment.

MR. FLEISCHER: That is clearly included in the projections
for the mid-session review.

Q Ari, would you respond to this ruling about the
discount cards and what the administration --

MR. FLEISCHER: Do you want to stay on that topic, or do you
want me to come to that? Did you have something on that?

MR. FLEISCHER: Go ahead. And then, Paula, I think you're on
that topic and then, David, I'll be happy to take that.

Q Thank you, Ari. The President, yesterday, called
migration, linked that to an employment issue. He said it's an
employment issue. He said there are employers who can't find
people to work. I'm wondering whether the new unemployment
numbers make it more difficult to sell that line politically?

MR. FLEISCHER: It does not change the President's belief and
the principle belief that America must be a nation that welcomes
people, and that we need to welcome people, and that we need to
welcome people in a manner that is legal, safe and humane.

Q Ari, when the House Minority Leader came out after
meeting with the President, he invited the President to either
come forward with a new budget or with some new budget ideas,
because he said the current budget basically does not accurately
reflect current or future economic conditions. Would the White
House entertain doing anything at all in terms of modifying its
budget?

And, also, I just need to clarify what you said this morning
in terms of how you define a surplus, because regardless of how
you define a surplus, don't the appropriators have to base their
requests for spending on the budget resolution? And if things
like the military come outside of that budget resolution, don't
you have to abide by the pay-go rule, which means that you've
got to find a way to pay for it?

MR. FLEISCHER: Okay, on the first question, I don't think it
should surprise anybody that the people who voted against the
budget would like the President to submit a new budget. They had
their best shot, they voted, and they lost. There was a
bipartisan majority that supported the budget, that passed the
budget, and allowed the budget to be signed into law. So the
President stands with the bipartisan majority that expressed its
will and passed the budget.

On the technical question of pay-go, the rules are simple.
It's defined by the Gramm-Rudman-Hollings Emergency Deficit
Reduction Act, which dates back to the '80s, at a time when
there were deficits. Now we're in an era where there are
surpluses. We have the second largest, as I've indicated. It's
projected to be even larger next year and into the out-years as
far as the eye can see. The economic changes, the slowdown has
not changed that long-term outlook.

To answer your technical question, under that law, any time
there are two consecutive quarters of less than 1 percent
growth, it affects such issues as sequesters, it affects such
issues as the caps that are placed on spending.

Q Reaction to this ruling on the discount cards and what
the administration would do next?

MR. FLEISCHER: Well, the President is disappointed by this
stay. The President is dedicated to getting senior citizens
prescription drugs and prescription drug coverage at as low a
price as possible, and as fast as possible.

In effect, what the judge said is that this administration
tried to help seniors too directly and too quickly. The
President is proud to help seniors directly and quickly. And as
evidence of the success of the program, as it was about to be
announced and implemented, is that 28 organizations had applied
to the federal government to participate in it, which is a sign
of how strong a proposal this is.

The administration is considering its legal options for what
the next course of action to take is, but this program with this
prescription drug card, the President believes will serve our
nation's seniors very well, and he's disappointed by today's
stay.

Q If I can just follow up on that. That response from the
administration is a political response, and says nothing -- does
not speak to the merits legally of any potential challenge. Do
you have anything to say about the merits of the decision?

MR. FLEISCHER: That's why my last statement indicated that
we're considering legal options.

Q But can you give some sort of response that goes to the
merits and not just to the politics of this?

MR. FLEISCHER: Well, I'm not a White House attorney, and so
I would not presume to speak on the legalities of the case. Our
lawyers -- I talked to them this morning, and White House
lawyers are reviewing options.

Q But why should the American people listen to a
political argument based on a legal ruling if you're not
speaking to the merits of the ruling?

MR. FLEISCHER: The ruling came out last night. Our lawyers,
as should be expected, are looking at the ruling right now. It's
a stay; it's not a final ruling, and our lawyers are examining
it, reviewing their options, and I'm not going to give you a
statement that's based on a review that is underway.

I'd be more than pleased, once our lawyers have reached
conclusions, to share that and share the legal reasoning.

Q Ari, let me see if I can move this ball a little
further. The Health and Human Services Secretary this morning as
much said is we're going to have to take this to Congress where
there is no appetite for a prescription drug discount card. So
what do you do next, in terms of -- I'm not talking about legal
arguments, I'm talking about -- there are people high up in this
administration who have pretty much thrown in the towel on the
drug discount card. So what do you do next to get prescription
drugs into the hands of seniors?

MR. FLEISCHER: You've left out some other information that
the Secretary of Health and Human Services also said, which is
that we're -- HHS is reviewing legal options, and that they are
talking to the Justice Department about those options.

So I totally disagree with the characterization that any
senior person has thrown in a towel. That's not the case. The
ways to proceed next are several-fold. One, the President is
dedicated to this because it helps seniors get prescription
drugs and get them at as low a price as is possible. Proceed
through legal options -- and, again, this is a stay, this is not
a final determination by a court, and that's an important
distinction.

Two, the President also has proposed to the Congress that
Congress get moving on a Medicare reform proposal that includes
giving prescription drugs to seniors. Now, many presidents have
said that to many Congresses in the past. Sometimes if everybody
waits for Congress, it may not get done in a time to help our
seniors, which is why the President is dedicated to a two-fold
approach to helping seniors get prescription drugs.

One, through this discount card that gets them to them
quickly. And, two, through legislation.

Q I guess the very direct question then is, have you got
something else in your back pocket should you not prevail?

MR. FLEISCHER: Well, as you know, the President -- well,
legally, of course, you have to be bound by whatever the courts
decide. And this is only a stay. But the President has called on
Congress to pass a Medicare reform proposal that included
prescription drugs. And, in fact, as you recall, there is action
pending in the United States Senate which is a tri-partisan
bill. It's Senator Breaux, a Republican, it's Senator Jeffords
and the President is very pleased by the pending action that is
taking place.

Senate Finance may move on this rather quickly, which would
be a very strong sign. But let me remind you that sometimes when
the American people wait for Congress to complete action on an
item as big as a Medicare reform plan that includes prescription
drugs, history shows the American people may be waiting for a
longer period than they like. What's wrong with taking action in
the interim to get seniors prescription drugs at a discount now?

Q Well, is the President going to weigh-in on this and
really try to get it moving in Congress, Medicare reform?

MR. FLEISCHER: Absolutely, Helen. If you recall, the
President had an event at the White House in the summer on
Medicare reform; he announced his principles for reform and --

MR. FLEISCHER: Well, Senate Finance Committee, as I just
indicated, is taking a strong look and they may be moving
shortly on a Medicare reform plan.

Q Ari, you've leaned considerably this afternoon on
economists who sort of characterize how bad or how not-so-bad
these unemployment numbers are. Someone you used to work for did
so yesterday as well, Senator Pete Domenici, leaning on
economists saying, you know, really, look, if we tap into the
Social Security surplus in just a small way, it's not going to
have a practical economic effect, it's not going to affect
solvency of Social Security. It's not going to affect debt
reduction, so why don't we just do it? Because we can fund
important priorities that the President has identified --
education and defense -- and not materially affect either the
economy or Social Security or debt reduction. Why not?

MR. FLEISCHER: The same answer I indicated to Mr. Gregory
earlier. The President believes that the money that has come in
for Social Security was promised from the government to the
taxpayers; that if they pay their Social Security payroll taxes,
the government will set aside for nothing but Social Security.
And that is a promise that the President intends to keep, and
his budget keeps it.

Q If I may follow up, so at the end of this process this
year, you will, I presume, present to us and the American people
a letter, maybe from OMB, possibly also from CBO, that will
certify that this appropriations process this year, when it is
fully completed, will in no way encroach upon the Social
Security surplus?

MR. FLEISCHER: That's what the administration budget
projections indicate. And as you know, it's a very open and
transparent process for all to see and all to judge. And I know
I'll be standing at this podium and you will be the judges, and
you will have the data in front of you.

Q The GAO said today it's preparing to possibly take the
White House to court over how Cheney created the -- well, his
refusal to give documents on how he created the energy policy.
What's your reaction to that?

MR. FLEISCHER: The administration stands on principle on
this matter. And the administration believes very strongly that
it is not a matter of public purview for each and every meeting,
for each and every minute of the President and the Vice
President, each and every day, to be reported publicly. And they
stands on that as a matter of principle.

MR. FLEISCHER: Because I think the American people also
recognize that a good government is a government that is allowed
to have a certain level of deliberations in private, that
they're allowed to have a certain level of meetings that take
place so that ideas can be developed, that thoughts can be
given, ideas can be shared, and so that each and every minute of
the President's --

MR. FLEISCHER: And the President has shared those thoughts.
And in the case of the energy plan, it has all been revA8ed.
All the recommendations are known. All the recommendations are
out. The recommendations were made after meeting with a variety
of groups, some environmental, some business, some experts. And
that's the manner in which the energy policy decisions were
made.

Q Well, you know what the perception is, don't you, that
only big oil has contributed. I mean, wouldn't you want to wipe
that out?

MR. FLEISCHER: Among some people. And, again, this is a
matter of principle, and that's why the administration has
expressed its view so strongly to the GAO and will continue to
do so.

Q Ari, on that same subject, could I just follow up? I'm
trying to figure out what the contours of this principle are,
because you're also saying you're willing to assert executive
privilege to protect records at the Justice Department about
decisions that prosecutors are making there. People have
decision-making discussions, float ideas in government
departments, not just in the White House, across the entire
executive branch. Is it your view that all those conversations,
that all that policy-making should be protected from
congressional inquiry?

MR. FLEISCHER: No, you have to look at each request and
judge it on its merits. And ini&AQ,x>YPof the request for each
and every person who met with the Vice President in each and
every minute of his process on the energy package, that, the
administration believes is not, number one, authorized under the
law. The GAO must operate strictly under the law that authorizes
their investigatory powers.

Those investigatory powers undeniably give them the right to
financial information about how the administration spends
appropriated money. The administration has complied and has
cooperated and given full information about the spending of the
money, because, in the administration's judgment, that is
covered under the statute. It is a debatable point, it is a
legal matter about whether or not the GAO has additional
authority to go beyond that. And that's what's in dispute here.

Q But I was referring more to the situation at the
Justice Department. It seems if you're going to protect
conversations among prosecutors, you could protect
conversations, perhaps, at the Commerce Department or the
Agriculture Department. Are you saying it's not legitimate for
Congress to inquire into decision-making, because it could chill
that decision-making in government departments?

MR. FLEISCHER: Each decision will be made based on the
merits, and in this case, the administration is prepared to
invoke its authority to protect the confidentiality of important
communications involving Justice Department officials in matters
pertaining to the previous administration.

I have not exactly heard a number of Democrats on the Hill
supporting Congressman Burton in this case, so I think there is
some question about whether or not this is another fishing
expedition, another investigation that Congress has carried out
that's going too far.

Q Are you prepared to invoke executive privilege on the
NADCP -- or, sorry, the NEPDC documents?

MR. FLEISCHER: Oh, that's a separate issue. This is a
question of whether or not something is covered under statute.

Q But the documents that the GAO is seeking, are you
prepared to invoke executive privilege to protect --

MR. FLEISCHER: That's not a question in this case, because
it's a wholly separate matter of law. The issue here involving
the law is whether or not the GAO has the authorization to seek
it under the statute that grants the GAO investigatory powers.
And that's a legal dispute.

Q Well, here is the question on that. There are a couple
of questions about this. One, I want to make sure I understand
what the administration believes GAO is asking for. As I
understand it, they narrowed -- in the back and forth between
the administration, they narrowed their request, no longer
asking for minutes of meetings, simply asking for who attended
what meeting.

MR. FLEISCHER: It's covered under the same statute and the
administration has made its point clear and will continue to
stand on principle about the right of members -- of the Vice
President, in this case -- to not have to report each and every
minute of each and every day to any congressional investigator
who asks for the information.

Q This was pursuant to a specific policy and who met. But
you're saying, that's what you're saying that's what you object
to?

Q Now, the administration could simply certify this as
being beyond the purview of GAO, why don't you take that step?

MR. FLEISCHER: Under the Freedom of Information Act? Is that
what you're discussing?

Q No. Doesn't the administration have the right to simply
say that, we believe that to certify this is not under GAO's
authority?

MR. FLEISCHER: Well, that's exactly what the administration
has done in the case of this particular request from the GAO.

Q No, you just denied their request, you haven't actually
done the certification, have you?

MR. FLEISCHER: The administration has made it clear that we
do not believe that this is covered under the GAO statute.

Q Ari, can you speak to the dispatch of the envoy to
Northern Ireland, what the short-term objective is and what the
administration's hopes --

MR. FLEISCHER: As you know, the administration, the
President had announced quite some time ago a point person for
Ireland. And State Department I think has indicated that there
is going to be a trip next week, and I would refer you to State,
beyond that.

Q On the nursing home story, can you tell us exactly when
and how that proposal was rejected?

MR. FLEISCHER: On the nursing home story there were some
discussions at the White House about some various options that
took place some more than two weeks ago. And any options dealing
with any changes in the nursing home procedures that could lead
to less inspections were rejected out of hand.

MR. FLEISCHER: Again, I have to get the names of the people.
But it was rejected out of hand and went no further. And in
fact, the administration and the President believes very
strongly that it's a federal responsibility to protect seniors
in nursing homes and to have a stringent inspection regime of
nursing homes -- the so-called good and the bad -- to make
certain that when families put seniors in nursing homes, those
nursing homes are safe and reliable and protect our seniors.

Q Let me follow up. What was rejected out of hand? The
very proposal that was reported in The New York Times today?

MR. FLEISCHER: That's correct.

Q And can you post later on today who was in the meeting?

MR. FLEISCHER: I'll try to get the information, Ron.

Q But is it not still open for debate how to create safer
nursing homes, considering the fact that HHS has limited
resources to deal with this inspection system?

MR. FLEISCHER: Well, everybody in government believes they
have limited resources, which is an ongoing issue.

Q But is it true in this case?

MR. FLEISCHER: That they have limited resources?

Q And that you're trying to explore different ways of
making sure safety is better at the poorer nursing homes.

MR. FLEISCHER: The administration is dedicated to making
certain that -- ensure that homes are inspected and there would
be no change in that policy that would weaken nursing home
inspections.

Q What would be the bad? What would be wrong or incorrect
about shifting resources toward the ones that are routinely bad,
away from ones that are routinely good?

MR. FLEISCHER: You would have to address that to anybody who
is advocating that policy; the administration is not.

Q You said you made that clear to The New York Times,
yesterday?

MR. FLEISCHER: That's correct, Helen.

Q And they still ran the story?

MR. FLEISCHER: That's correct. There was a conversation
yesterday afternoon and into the evening.

Q But, Ari, to follow on Major's question, you also said
that you rejected a proposal that would call for just that. Was
there any discussion about whether the administration could roll
back inspection of the nursing homes that have consistently
shown --

MR. FLEISCHER: -- there was an option discussed that would
have done what The New York Times reported, and the option was
rejected by the White House out of hand.

Q Were you able to tell The New York Times who was in
that meeting and exactly what was rejected?

MR. FLEISCHER: No, I'll try to get that information for you.

Q You weren't able to provide them with that information
yesterday?

MR. FLEISCHER: I don't know if The New York Times asked that
question, Ron, but --

Q Ari, while you're getting us this list of names of
people who participated in this meeting, could you get us the
names of people that the Vice President talked to -- (laughter.)

MR. FLEISCHER: I knew that was coming.

Q Case by case.

Q On Donald Schregardus, was the administration aware, or
is it now aware, of the EPA review of what had happened in Ohio?
And does it make any difference at all to the administration
with regard to his nomination?

MR. FLEISCHER: Well, the administration is -- President Bush
and the administration believe that he is the right man for the
job, and will continue to push for his nomination. If you take
a look at that report, it indicates that Ohio -- and I'm reading
from it now -- it found that Ohio's criminal enforcement program
is among the best in the nation.

And Mr. Schregardus has a record that in Ohio reduced toxic
emissions to the environment by 50 percent, increased the number
of stream-miles fully achievable for fishing, and swimmable
goals under the Clean Air Act by 50 percent. He implemented air
pollution control programs in 88 counties in the state to
achieve national air quality standards for the first time. So
the administration stands behind its nominee.

Q Are you concerned at all about the matter involving Mr.
Jayko, and the fact that he was reinstated after a court
determined that he had been fired or removed from his job for
having tried to pursue a case, a cluster of leukemia cases?

MR. FLEISCHER: Again, the administration stands behind the
nominee.

Q Ari, on the budget?

Q Ari, the -- Paula, you may be heading in this direction
also. What we now are beginning to see is an increasingly
partisan disagreement about the economy and who's to blame. And
I know you are loath to invoke any sort of partisan quotations
from the podium. But Gephardt, outside the West Wing a few
moments ago, said this economy started going bad six months ago,
and it's the President budget that is contributing not only to
that problem, but to the ongoing problem. You have said, and the
President has said, and drawn a lot of attention to the fact the
economy began to slow down during the Clinton administration.

Are the American people due not for a rational discussion
about the economy but a partisan mud-fest about who is to blame?

MR. FLEISCHER: No, and that's why I've always indicated that
President Bush knows that on January 20th at noon, it was his
responsibility to protect the economy and to protect America's
workers. And he has done so. He, in November of 1999, announced
a tax plan, one component of which was to have an insurance
policy against any future downturns. And his words proved to be
accurate.

In spring of 2000, the American economy grew at a rate in
excess of 5 percentage points. In the summer of 2000, the
economy began to -- grew at a rate of 2 percentage points. The
slowdown, clearly by all measures, began going to the summer of
2000.

But what's most important is who has a plan to do something
about it. President Bush has an economic recovery plan that is
going into effect. I'm not aware of any Democrat proposals for
economic recovery plans. I know that many Democrats voted
against the economic recovery plan that the President offered.

A smaller group of Democrats voted for it, and the President
will continue to work with all Democrats who will work with him
on programs that can get passed into law to protect America's
workers and to grow the economy.

But there should be no misunderstanding about the timing and
the dates. They speak for themselves about the facts of the
slowdown. But what's important is what is going to be done about
it now.

Q So Mr. Gephardt is deceiving the American public when
he says the slowdown began six months ago?

MR. FLEISCHER: I'll simply let the facts speak for
themselves. In the spring of 2000, growth was in excess of 5;
summer of 2000, it was down to 2; and the fall of 2000 it shrank
even further. It diminished to the point of .2 percent in the
spring of 2001. And now there is a plan in place to help get the
economy growing again.

But, typically, also -- and I think this is a great amount
of comfort to the American people -- slowdowns typically last a
year, year-and-a-quarter, a year-and-a-half. And the President
is confident that he has a plan in place the get the economy
growing again and he's grateful to the many Democrats -- again,
particularly in the Senate -- who voted for it. But there were
28 in the House, as well.

Q Ari, as far as funding the legislative priorities, you
apparently aren't going to take up Gephardt's invitation to
re-fashion your budget. And you don't want to dip into Social
Security, you don't want to re-visit the tax cut plan. What else
is there, in terms of funding, other than an
across-the-board-spending cut?

MR. FLEISCHER: Well, the President's budget provides large
increases in funding for his priorities, and those are all taken
into account in the budget. Education, for example, grows under
the President's budget; defense spending grows. And let me just
remind you that spending does not come from the surplus -- the
surplus is what's left over after all the taxes are cut and the
spending increases are made. That's what the surplus is for.

And it's an odd argument to say that the surplus shrunk and
we can't spend the surplus, which is what the Democrats seem to
be saying, because they would seem to want to spend it down to
the point where there is nothing left to spend.

Q But as you know, the appropriators, when they work on
trying to figure out how to pay for all of this, base it on the
budget resolution. And, unless I'm mistaken, the amount that is
wanted for defense and education goes beyond that blueprint. Is
that not correct?

MR. FLEISCHER: No, the budget resolution provided for
increasing those accounts.

Q To the point of $18 billion?

MR. FLEISCHER: Again, there were increases in there and
we're going to continue to work with Congress on exactly how to
get the budget settled. But as you know, Congress is bound by
CBO numbers. But after the budget is passed, then it's the OMB
numbers that prevail. And so it's a very complicated budget
process -- it always has been -- where Congress has to use CBO
numbers as the process moves through the Congress, but after a
matter is signed into law and becomes a matter of
administration, the courts have recognized that OMB numbers
prevail.

Q I didn't think there was a set rule for that.

MR. FLEISCHER: Yes, there is. There's a court case that
settled it.

Q One other thing.

MR. FLEISCHER: You may put people to sleep with this. Maybe
not.

Q What did you mean, "may"? (Laughter.)

Q Ari, what was that court case, can you get us that
court citation?

MR. FLEISCHER: That was, there was a suit against the
Gramm-Rudman-Hollings Act in the '80s -- or the '90s, I'm sorry.
And the courts ruled that it's a matter of administration. And
when it comes to matters of administration of appropriated
accounts, only the executive agency can be authoritative. And
that's why the court held that OMB has the final role.

Q Ari, on the Minority Leader's visit this morning, he
also had some pointed comments for you on your claims that the
Democrats want to raise taxes. Mr. Gephardt said: I don't know
where he got that, unless he made it up. So, your response to
that? And where did you get it?

MR. FLEISCHER: Well, I got it from reading the press. Let me
give you a citation. August 28th, this is one of the nation's
leading networks: Opening the door to tax increases, a leading
Senate Democrat said Tuesday that a plan to "raise revenue"
could be needed to make up any budget shortfalls. They cited
Senator Kent Conrad, as I indicated this morning when I said the
Chairman of the Senate Budget Committee.

Further reading from the press, August 23rd -- this is just
two weeks ago: House Minority Leader Dick Gephardt recently said
that the Democrats don't want to repeal this year's rebate or
proposed future tax increases. He suggested, however, that some
"minor adjustments" in the size of the cuts already scheduled
for future years might be helpful.

Well, if you adjust the -- maybe he was suggesting
additional tax cuts. But other than that, any minor adjustments
would be tax increases, of course.

Q Ari, can you tell us about -- preview education week
for us?

MR. FLEISCHER: Yes, let me get you the week ahead. I promise
not to use the words "OMB" or "CBO" on the entire week ahead.

The President will launch an initiative beginning tonight
and it will continue into next week that is a reminder of the
importance of reading throughout America. He and Mrs. Bush will
give a series of remarks and will also, in the case of the
President, remind the Congress of the importance of sending the
education package to the White House so that we can improve our
public schools.

Specifically -- and now let me give you the entire events
for the week -- the President on Sunday will participate in a
coin toss to kick off the NFL season. That will take place in
the Rose Garden on Sunday afternoon.

On Monday, the President will go to the Navy Yard with the
Prime Minister of Australia for an event and he'll have a
working lunch and a meeting with the Prime Minister in the White
House. In the afternoon on Monday, the President will continue
his focus on reading and education when he travels to
Jacksonville, Florida, and then on to Sarasota, Florida.

He'll return to the White House on Tuesday afternoon, where
he will host, in the evening, the Congressional Barbecue on the
South Lawn. Also on Tuesday, Mrs. Bush will make remarks on
early child cognitive development to Senator Kennedy's
committee.

On Thursday, President and Mrs. Bush will make remarks at
the White House Assembly on Reading at the Library of Congress.
And on Friday, the President will help dedicate the Eisenhower
Executive Office Building and he'll host a reception in honor of
Diez y Seis before departing for Camp David.

Q The Sunday Rose Garden event, is that open for
coverage?

MR. FLEISCHER: Yes, it is.

Q Thank you.

END 12:55 p.m. EDT

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