MS. PERINO: Good afternoon. For all of you who have been traveling with us the past four days, we're finally on our way home, to D.C. The President gave his speech today at the American Legion. This was the first in a series of speeches he's going to be giving from now until the UNGA speech on September 19th. Again, the purpose of the speeches is to explain all that we are doing, and what the enemy is doing in the global war on terror, so that the public can clearly understand what we're fighting, how we're fighting, why we're fighting, and most importantly, why we are winning. On Tuesday -- actually, I have two scheduling announcements. Let me start with Monday. Monday is Labor Day. On September 4th, the President will participate in a tour of Paul Hall Center for Maritime Training and Education. He will make remarks about the economy on Labor Day at that event. It's in Piney Point, Maryland. And that event will take place sort of midday, leaving late morning and getting back early afternoon. Read more Comment (0), Email this.

MS. PERINO: Yes, it's just a day trip. It will be probably a chopper. But we'll give you details on that in the week ahead tomorrow. But just so that you have this for your planning purposes tonight and for your reporting purposes if you want it. And then on Tuesday, the President will be giving the second in a series of these speeches. It will be in Washington, D.C. The audience will be the Military Officers Association of America, and there will be many members of the diplomatic corps in attendance, as well. And with that, I'll take your questions. Let the record show there are no questions. Read more Comment (0), Email this.

Q Dana, I just was wondering if you could address what the President talked about today. He seemed to group together Sunni followers of al Qaeda along with Shiites in Iraq who are involved in the sectarian violence, and these groups are fighting each other. So I'm just wondering if you could elaborate on how he thinks these groups are united in one belief? ... Read more Comment (0), Email this.

MS. PERINO: I hope to be able to give you some more of those details probably by tomorrow. Read more Comment (0), Email this.

MS. PERINO: Again, that's what I hope to be able to provide a little bit more detail on tomorrow, as plans are finalized. The speech today was an overall view with a longer section on Iraq, and it will go through the UNGA speech. But for the topics, I'm just going to have to ask for your patience and I'll, hopefully, be able to give you a lot more tomorrow. Read more Comment (0), Email this.

MS. PERINO: No, we have not announced all of those details yet. The one thing I can say is that the President will visit all three sites on the anniversary. Read more Comment (0), Email this.

MS. PERINO: Yes, but there could be additional travel, and I'm just not able to tell it -- to reveal that yet. Read more Comment (0), Email this.

MS. PERINO: All right, I'll go through the schedule and then two announcements, and then take your questions. We have another short flight today, so I'll make it as quick as possible so you can get your breakfast. We left Waco this morning; we're on our way to Little Rock, Arkansas. The President will make remarks at the Asa Hutchinson for Governor and Arkansas Republican Party Luncheon. And then we travel later this afternoon to Nashville, Tennessee, and he will make remarks at Bob Corker for Senate and Tennessee Republican Party Dinner. And then he will go to Salt Lake City, where he will remain overnight. One announcement: President Bush will welcome His Highness Sheikh Sabah al-Ahmad Al-Jaber Al-Sabah of the state of Kuwait, to the White House on September 5, 2006. Kuwait is a close and valuable ally. The President looks forward to discussing with Amir Sabah a range of bilateral and regional issues, including the war on terror, assistance and reconstruction of Iraq and of Lebanon, and Kuwait's commendable progress on reform. As you know, the past two days the President has been in the Gulf Coast region on the anniversary of Hurricane Katrina. And as you saw, the rebuilding is underway, but there is still a long way to go. And that's why the President reaffirmed his commitment to the region. The anniversary was not the ending of his commitments. He reaffirmed it, and he said before that it's going to take several years, but I think you all saw there that the spirit of hope, coupled with the hard work of the people of the region and the volunteers is self-evidence, and all that coupled together will make for a stronger region. Tomorrow the President will kick off a series of several speeches on the global war on terror, that will go through his speech at the United Nations General Assembly meeting on September 19th. As you know, the President is constantly talking about the issues we face in the war on terror. It is important for people to hear from their Commander-in-Chief, especially in a time of war, to understand the choices, developments, and consequences of victory and defeat. These speeches will be a comprehensive look at the state of the war on terror, the intents and the capabilities of our enemy -- that's al Qaeda, as well as the other terrorist groups fighting against freedom in the Middle East -- and steps we've taken to make the nation safer. For that first speech tomorrow in this series, at the American Legion annual meeting, the President will put the violence that Americans are seeing on their TV screens and reading in their papers into a larger context. He will acknowledge that these are unsettling times in Iraq, in Lebanon, and also the unsettling news about the foiled terror plot out of London. The key is that all of this violence and all of the threats are part of one single ideological struggle, a struggle between the forces of freedom and moderation, and the forces of tyranny and extremism. The speech will provide some historical context, explaining the roots of the ideological struggle in the lack of freedom in the Middle East, and it lays out the practical case for the freedom agenda in some detail. The speech then focuses on the application of our strategy around the world, a bit of Afghanistan, a bit on Lebanon, and a longer section on Iraq, the challenges that we're facing and what we are doing to overcome -- defeat those challenges and overcome them. He will also provide an update on the security situation in Iraq, especially in Baghdad. As you know, the Baghdad security plan is still in its early stages, but reports from commanders on the ground is that it is showing good initial results. So that speech will take place tomorrow. As for the other speeches, there will be at least one next week, probably more. And as soon as I have final details that I can announce to you in terms of dates and locations, I will get those to you. Read more Comment (0), Email this.

MS. PERINO: Yes. Probably a mixture, Deb; some on the road, and some in D.C. Read more Comment (0), Email this.

Q Tomorrow, is he going to mention anything about troop strength? Because Casey is talking about how he believes that Iraqi security forces could take over the security with little help from the coalition, maybe within a year to 18 months. Is he going to be specific about that? ... Read more Comment (0), Email this.

Q -- from what was reported in The Wall Street Journal today and other places. What is different about this particular push than the previous three over the past year, and even before that, dating all the way back? He's always highlighted the high stakes involved. He's always highlighted the fact that there needs to be an ability to adapt to the enemy and fight in different ways. What is different about this one? ... Read more Comment (0), Email this.

MS. PERINO: I would not say that that was entirely the context for what these speeches are. It will not be speeches only about Iraq; it will be about the global war on terror, including a discussion about the institutional reforms that have been put in place and how those have helped to protect us, for example, the intelligence community reforms, the proliferation security initiative, the Patriot Act, the transformation of the FBI. And so it's a comprehensive look. I don't know if that report this morning was entirely in context. Read more Comment (0), Email this.

MS. PERINO: I saw this morning that DoD released a statement saying that comments from his speech yesterday might have been mischaracterized by reports. I'll let DoD and the reporters who covered that sort that out. But what Rumsfeld was talking about was clearly making the case that we remain vigilant in fighting the war on terror and confronting the threats to free societies. That is what the President will be talking about. Read more Comment (0), Email this.

MS. PERINO: I think the President said it best last Monday when what he said in the press conference was that there -- in any democracy, he expects healthy debate and he expects criticism. It makes the country stronger. He said, and he believes, he does not question the patriotism or the love of the country of any other American. He does believe that there are choices to be made, and it is wholly appropriate for the President to define the decisions that he's making and the choices that are before us and how he chooses to address them, and contrasts that with other ones. Those are not arguments that we shy away from, but in terms of the speeches, that's how he will try to draw those distinctions. Read more Comment (0), Email this.

MS. PERINO: I'll need to go back and check scheduling. I don't know if he's met with this individual before. He has met with members of the Mormon Church before, but I will check. Read more Comment (0), Email this.

MS. PERINO: I'm going to get more for you on that. I didn't talk to anyone about that today because I was focused on these speeches, but I'll see if I can get you some more. Read more Comment (0), Email this.

MS. PERINO: Okay. Good afternoon. We are finished with the Katrina trip; lots of events, lots of activities. I know you all have worked very hard and everyone is hot, probably tired, and hungry. So we'll do this fast before we land. It's a very short flight, so I wanted to get back here quickly. Does anyone have any questions? It was a pretty full day and you heard from the President a lot, but anything on your minds? Read more Comment (0), Email this.

MS. PERINO: On a debate? Well, I talked to your colleagues earlier today and provided them comment. The question was regarding Ahmadinejad wanting to debate the President. And I think that the -- I would refer you back to Secretary Rice and the President, who have both said that Iran knows very well what it needs to do. The P5 plus one partners are talking, and instead of debating the President, it might be interesting to see an opportunity for open debate in Iran, itself, rather than worrying about a debate with the President. Read more Comment (0), Email this.

MS. PERINO: I don't have it for you at the moment, but I'll be able to do it in the gaggle tomorrow morning. It's at the American Legion; it will be war on terror. Read more Comment (0), Email this.

MR. JONES: Okay, everyone, we're going to go ahead and get started. Obviously, with us today is Chairman Powell, who is, as you all know, the Federal Coordinator for Gulf Coast Rebuilding; and Coast Guard Commandant Admiral Thad Allen. They're here to discuss today federal recovery efforts and 2006 hurricane season preparedness. Chairman Powell is going to begin with a couple minutes of remarks. Then Admiral Allen will, and then we'll turn it over for questions for about a half an hour. And I think we're going to try to wrap things up around 2:45 p.m., because then we have some other appointments to get to today. So, with that, I'll turn it over to Chairman Powell. CHAIRMAN POWELL: Thank you. As you know, we've been traveling with the President for the last couple of days. We've spent time in Mississippi yesterday, and the President had an opportunity to visit with community leaders, elected officials, and made a couple of tours. One was a manufacturing plant in Mississippi; the other was a neighborhood in Biloxi that he had, when he first came down here, had toured, visited with some homeowners and some citizens that day. Then we came over to New Orleans and he, again, met with some elected officials -- parish presidents, the Governor, the Mayor, members of the LRA -- heard from them about some of their issues that they have concern with about rebuilding. He then toured a couple of -- had a couple of tours this morning. One was a breakfast and visited with some citizens; had another meeting with the Mayor. They went to this school site and had a roundtable with some educators, and talked about public education, about the opportunities there. Then, as you know, he made his speech, and he went to a neighborhood and toured a neighborhood on his way back. I think it's been a couple of very productive days in that he heard and saw a lot. The same thing is true for me. I'm down here -- I must spend approximately 70 percent of my time. When I come down here and I think about a year, I very quickly reflect upon the magnitude of this terrible storm, and I'm reminded that the Gulf of Mississippi was literally wiped out, and that there was more debris in the three counties in Mississippi, more debris in those three counties in Mississippi than all of Hurricane Andrew and the World Trade Center combined. And that took two years to clean up. So people often ask me about the speed of recovery, and I -- there's not a point of reference. I mean, we've never had anything as large as this that we can say, well, here is comparable data. So you say, compared to what? So those three counties in Mississippi, again, more debris than all of Hurricane Andrew and the World Trade Center, and that took two years to clean. When you think and reflect that 1 million 500 thousand people were affected -- that's the city of Philadelphia. That's the city of Phoenix. New Orleans was underwater 57 days, an area that is seven times larger than Manhattan. So when you think about the size and scope of the storm and reflect on that and the time frame, I think it's important to reflect and look back. I think there's been lots of progress. I come down here and I have points of reference I will look at. I generally come through the same way. I land at the airport, I take the route downtown. When I'm in Mississippi, I usually go along the entire Gulf, and I look for signs of progress. I look for signs of progress. And the first thing I look for, obviously, is debris. And I'm comforted by the fact that 98 percent, almost 100 percent of all the dry debris is gone in this city. I think that's remarkable. And 75 percent of the debris is gone in Louisiana. I, too, think that's very remarkable when you take into consideration the tremendous storm. Schools are open. Hospitals are open. In New Orleans, I often reflect that if it were a country, Admiral, it's gross national product would be the port, energy, tourism. The port is back Pre-K. More ship calls into port than pre-K. Tonnage is the same. And that's terribly important not only to New Orleans, but it creates, directly or indirectly, 356,000 jobs in America. It touches 33 states, affects 62 percent of all the consumers in America. Energy -- we saw how important energy was. Twenty-five percent of the oil and gas domestic production comes from this area. It's all up, producing. Tourism -- 80 percent of the hotels are open; 62 percent of all the restaurants are open. So there's been lots of progress. As the President says, there's a lot more to go, and we're going to continue down the path -- the path of recovery until the job is done. Thank you. Admiral. ADMIRAL ALLEN: Good afternoon. My slant on the trip was slightly different than the Chairman's. On the 5th of September, 2005, at about 10:00 a.m. in the morning, Secretary Chertoff called me in and asked me if I would go down and lead the response effort in New Orleans. By 7:00 p.m. that night, I was in Baton Rouge. And by about 7:00 a.m. in the morning on the 6th of September, I was in New Orleans. Later that week, on Friday, I relieved Mike Brown as the Principal Federal Official for the response. I was relieved of my Principal Federal Official duties on the 1st of February, and went back to being the Chief of Staff of the Coast Guard, and most recently, following nomination by the President, I was confirmed to be the Commandant of the Coast Guard, which is my job now. My trip back here with the President was more reflective, to see where we've gone in the last year regarding preparedness for the next hurricane, and kind of assess the situation of our operations down here regarding what the Coast Guard has been doing. We spent a lot of time with the President in the last two days. We walked the neighborhoods. He was as engaged as he's ever been, talking to individuals, trying to get a sense for, I think, more of the psyche of the people than anything else. He got a lot of feedback from the mayors, the congressional delegations, and the governors about the psychological impact of this that far exceeds maybe the scope of the physical impact that we see and how we need to work through that. And he mentioned that in his remarks today. I, like Chairman Powell, look for benchmarks when I return here, and I've been back several times since I finished my PFO duties. We flew in by helicopter from Mississippi, went down US 90. It's amazing to see, the shrubbery and the green grass has grown up where there just used to be lots and debris. It almost looks like greenspace over there now. It's almost a surreal effect in Mississippi. The debris is almost gone, as Chairman Powell said. And they're ready to go to work and they are -- and Governor Barbour has got a terrific commission set up over there and they're working very, very hard. One slight spin for the Coast Guard in all this is, for the first time in our history, we've been mission-assigned by FEMA to do marine debris removal. In this case, we're looking at the Mississippi Sound, the area off the coast, from, roughly, Biloxi down to Waveland and Bay St. Louis. A lot of debris was sucked back into the Gulf, and we are going to be working over the next year to identify obstacles, debris that's under the water, and dealing with contractors to move that out. That will take another year longer than dry debris removal. And, again, this is something that new for the Coast Guard, but we're working very closely with the state of Mississippi. I was struck in flying in on the helicopter with the President today -- we did a circle around the city before we landed -- at the large amount of construction that's been going on on the levees. Over 300 miles of levee construction has been going on. They've been working feverishly for the last year. The most notable change I saw were the new pumping stations at the mouth of the 17th Street Canal -- and so forth, where those pumping stations have been moved up, together with flood gates. They create a barrier at the mouth of these canals at Lake Pontchartrain, which is the same as they have in Jefferson Parish. And as you know, water coming back into those canals were contributory to the levee failures. The debris removal in Louisiana is not going as fast as Mississippi because it's a more difficult area to operate in. It's a densely populated city; the structures are different and we don't have, finally, demolition decisions by the city. They're moving forward on that. That will all proceed apace. I think as both the President and Chairman Powell have said, debris kind of paces everything else; you got to get the debris out of the way before you can move on. I think they're poised to release a significant amount of money in terms of reimbursements to homeowners so they can proceed. And I think the flood gates are about ready to open on that. Just a couple of comments on the response last year and our preparations for this year. I walked into a rather extraordinary circumstance last year on the 5th of September. For a week we had been flowing resources into New Orleans. There were search and rescue teams, disaster medical assist teams; Louisiana Fish and Wildlife had resources in here. One of the problems we had when Katrina came ashore -- and I've said this several times over the last year -- in my view, this was a hybrid event, it was a very devastating hurricane. But when the levees were breached and the city flooded, in what turned out the equivalent of a weapon of mass effect being used on the city of New Orleans without criminality. And it significantly complicated the operation, and basically, we had a loss of continuity of government in the city of New Orleans in terms of having the infrastructure available to receive the resources the federal government was providing and to do something with them. And when I got to New Orleans it was clear that we had resources on the ground, but they weren't being directed in a coherent manner. I assumed the role as PFO in order to have a more rational approach to that and unify the effort, especially with Lieutenant General Russ Honor 's DOD forces. That was a pretty unusual role for a Principal Federal Official to do. We may never see that again in a natural hurricane -- natural disaster response. But in the situation last year, the situation cried out for unifying the effort here in New Orleans, and I took that on as a major task that I had to do. If you remember, I said I was trying to cut through the red tape and increase the velocity of the response, and specifically referred to unwatering the city, finish up the search and rescue operations, doing it in as such a dignified manner as we could with the remains removal process, doing the block-by-block sweeps of the city, and ultimately establishing a morgue and then doing the family reconciliation that was attendant to that. I can tell you, moving into this year, our PFOs have never been more prepared. They are pre-assigned for every piece of shoreline on the East Coast that can be impacted by a hurricane. We have trained with our FEMA counterparts. We have conducted drills on evacuation plans. We have pre-deployed to the states and met with the state and local responders, and, as we speak right now, we are prepared and are reacting as necessary in Florida to Hurricane Ernesto. I think the Coast Guard is a much better agency, being in the Department of Homeland Security with FEMA; and I think FEMA is a much better agency being in the Department of Homeland Security with the United States Coast Guard. And we'd be happy to take questions. Read more Comment (0), Email this.

ADMIRAL ALLEN: Well, first of all, I would leave the technical answers on the levee performance to the Corps of Engineers. They own that responsibility. But I think the Corps has said on several occasions that the levees are being rebuilt to pre-Katrina authorized levels. The Corps of Engineers only builds levees as authorized by Congress with funds appropriated, and that is described in the legislation. So the goal for this hurricane season was to build them to pre-Katrina levels, and make sure they had the integrity of those levees to that height. Any further height than that, as I understand it, would be pursuant to a study that's underway right now, and that study is also to include what type of levee protection would be needed to raise it in two variants. One would be to the 100-year flood plane that's used for determining the National Flood Insurance Program base elevations for FEMA; and secondarily, what it might take to go to a category five storm. But those are studies that are currently underway, they're not finished. I'd let Chairman Powell offer comment, if he'd like. CHAIRMAN POWELL: I think you said it well. I think that the Corps has done extraordinary work in a very short period of time. The one thing I would add to what Admiral Allen said is that they repaired all the breaches. They worked on 230 miles of levees, and they are back to pre-Katrina level. We're on our way. We're on our way to -- in the year 2010, having better and stronger levees than we've ever had in New Orleans. But I would caution to add that, just as we've said before, that an evacuation plan is terribly important and that you cannot protect against all kinds of risk. And it's important that people heed the evacuation plans, listen to the elected officials, and act accordingly. I can't stress that more: Take personal responsibility for those evacuation plans. But the Corps has done unbelievable work. Read more Comment (0), Email this.

CHAIRMAN POWELL: If a storm the size of Katrina were to strike this area again, there would be -- that would depend upon the nature and where the storm hit. But should there be overtopping, there very well could be some flooding, but it would not be catastrophic type flooding. Read more Comment (0), Email this.

MS. PERINO: All right. We are on our way to Mississippi for the Katrina anniversary event. The President's schedule, I'll run through that quickly. This morning he had his normal briefings. He had a meeting with the Secretary of Homeland Security where he had an update on Hurricane Ernesto. Attending were the Chief of Staff, Fran Townsend, Secretary Chertoff, and Director Paulison. Director Paulison led the briefing. Basically, the briefing talked about the track of the storm, how right now it looks like it will be a Florida event. Florida is preparing and as of now, there has been no request for federal assistance or support. The President will be getting regular updates. Read more Comment (0), Email this.

MS. PERINO: Not yet, no. The President and Mrs. Bush participated in an interview with April Ryan of American Urban Radio Network. The President, upon arriving, will have lunch with community leaders -- pool at the bottom. We will release a list of the participants. Then he will have a walking tour of a Mississippi neighborhood -- pool coverage, as well -- and his remarks on Gulf Coast recovery -- expanded pool. Those three events are in Biloxi. And then he will go to Gulfport, where he will visit the United States Marine, Incorporated business. And then he will chopper to New Orleans where he will have dinner with Louisiana state and local officials. Again, we will release the names of those participants. Read more Comment (0), Email this.

MS. PERINO: Yes, ma'am. I just want to point out one thing. We don't always mention the Freedom Corps volunteer in these gaggles, but just to point out to you today, I think part of the message this week is to remember and be thankful for all the volunteers, armies of compassion that geared up after Hurricane Katrina and continued. The Freedom Corps greeter is Ken Wetzel. He was born and raised in Biloxi, Mississippi. He's 46 years old. Right after Hurricane Katrina, he delivered food and supplies to his neighbors. He helped clear the debris. And then in September of 2005, he began volunteering with the Hope Crisis Response Network, and that organization deploys volunteers and resources to impacted areas to assist with immediate disaster relief needs, as well as long-term recovery efforts. And he is a site coordinator, so he supervises and works alongside teams of volunteers who travel to the Gulf Coast to help rebuild homes. And with that, I'll take any of your questions. Read more Comment (0), Email this.

Q On Iran, I realize that the deadline hasn't been reached yet, but there appears to be a movement for the United States to go ahead with sanctions without going through the U.N. -- is that correct? And also, how soon after August 31st could there be sanctions imposed? ... Read more Comment (0), Email this.

MS. PERINO: Sanctions. I saw that report; I don't know its veracity. I saw it was unnamed officials. Read more Comment (0), Email this.

MS. PERINO: Was it Bolton? Over the weekend. I'm sorry, I didn't see that report. I saw the one this morning in The Washington Times. What I know is that the P5 plus one is meeting on August 31st. That will be three days from now. They are in communication with one another right now. And there's just nothing to report yet in terms of next steps or action. If that changes between now and Thursday, I will certainly let you know immediately. But for now, I don't have anything to add to what John Bolton said over the weekend. Read more Comment (0), Email this.

MS. PERINO: The question was whether or not the President will go to the Lower Ninth Ward. As you know, on these Gulf Coast trips, if you've been traveling with us before, we don't announce specific locations because of security and logistics. So we'll keep you updated on that. Read more Comment (0), Email this.

MS. PERINO: I'm not sure if the President has spoken to his brother, but I know that Secretary Chertoff has. I can check on that for you. Read more Comment (0), Email this.

MS. PERINO: I'm not aware of the interview you're referring to and I don't know the specific number, if he would have said that. What he has always said from the beginning, and this has been repeated by state and local officials, is that the devastation from Hurricane Katrina was so great that 365 days later we are not at the finish line. We are starting to see the rebuilding efforts take root. The debris has been largely removed, almost all in Mississippi and gone a long way in Louisiana. The schools are starting to come back. Businesses are starting to come back. The local and state officials have their housing plans now in order. Those have been approved by the federal government, and that money is available for them to draw on. So I think even Ray Nagin yesterday on Meet The Press said it is going to take at least five years in terms of the building cycle. So it is going to be a long road back to rebuilding fully, but I think it's important to remember that the expectations that were set last August and September was that a year from now was not going to be -- you weren't going to be able to see the city completely rebuilt. So it is going to take a long period of time. In terms of like, 10 years, I don't know about exact time frame, but it's certainly going to take several years. And the President has reaffirmed, and you will hear him again today reaffirm his commitment to the entire region, especially in terms of moving forward on the parallel tracks of schools, jobs and housing. And all three of those things need to be moving forward together at the same time so that they can all complement one another, because you can't bring people back unless you have schools or jobs or homes. Read more Comment (0), Email this.

MS. PERINO: As far as Annan's visit, I think I told you last Wednesday that the President spoke to Secretary General Annan and said he was very interested in his trip and asked the Secretary to give him a ring when he returns. As far as expectations, I wouldn't set any. I think that we'll see how the trip goes, and then hear from him how it goes. We obviously noted over the weekend that the UNIFIL force is being filled out and deployed, so that's an important step in the region. And your second question was about what is -- one moment please and I'll get that for you. The question was what is the United States Marine, Incorporated. It was founded in 1971. In 1988, the company started to design and build military, patrol and special warfare boats ranging in length from 21 to 90 feet. You'll probably find more on their website. After Hurricane Katrina, the company moved to Gulfport from New Orleans. And prior to the storm, it employed 118 employees in New Orleans. Today they have 154 employees in Gulfport, 44 percent of those employees worked for them prior to Katrina. And their New Orleans facility is scheduled to reopen next fall, so both locations will remain open for business. They design and build military, patrol and special warfare boats. Read more Comment (0), Email this.

MS. PERINO: They had 118; today they have 154. Read more Comment (0), Email this.

MS. PERINO: Thirteenth visit to the region, yes. Just to make sure that everyone is clear in terms of the numbers, remember right after Hurricane Katrina, not far on its heels was Hurricane Rita. And the President did make two trips to the Gulf Coast region on that -- I think two of those visits included Texas. So, by our account, this is the 13th visit to the region. I think in our fact sheet you saw last week that 82 visits had been made by the President's Cabinet. Kelly, did you have a question? Read more Comment (0), Email this.

MS. PERINO: Good morning. This morning the President spoke with Italian Prime Minister Romano Prodi, and German Chancellor Angela Merkel about Lebanon and Iran. In his call with Prime Minister Prodi, the Prime Minister noted Italian efforts to help prepare for the deployment of the enhanced United Nations interim force of Lebanon -- the UNIFIL force. The President underscored that the United States is fully committed to UNIFIL's success and welcomed Italian efforts to achieve a rapid and robust deployment to southern Lebanon. He congratulated Prime Minister Prodi on Italy's offer of substantial forces for UNIFIL. The two leaders also discussed diplomatic efforts to prevent Iran from acquiring nuclear weapon capability. In the President's call to Chancellor Merkel, the two leaders discussed the situation in Lebanon and agreed on the importance of supporting an enhanced UNIFIL and in humanitarian efforts. The President and the Chancellor also agreed to continue to work together on diplomatic efforts related to Iran and the nuclear issue. Both calls lasted several minutes. With that, I'll take your questions. Read more Comment (0), Email this.

MS. PERINO: I said that the United States and the P5 plus one believe that their response fell short, but that the Security Council deadline has outlined and U.N. Security Council Resolution 1696 has the deadline of August 31st, and so the members of P5 plus one are going to be discussing and communicating amongst themselves, reviewing the response from Iran and then meeting on August 31st, as spelled out in that resolution, as well. Read more Comment (0), Email this.

MS. PERINO: I don't haven any further detail on their conversation, just that they did speak about it. Read more Comment (0), Email this.

MS. PERINO: I don't have anything, any changes from yesterday, no. Read more Comment (0), Email this.

MS. PERINO: Outlook for today? I don't have anything else except for him arriving. If there is anything that is added to the schedule that would be a pool event, then that gets paged out and you all will know. Read more Comment (0), Email this.

MS. PERINO: The President does have a meeting today with families of the fallen, at the airport. I forgot to mention it, I'm sorry. Thanks, Josh. Read more Comment (0), Email this.

MS. PERINO: -- not have any further detail on that. So probably not today. Read more Comment (0), Email this.

MS. PERINO: I don't know -- MR. DECKARD: It's five families -- I'll double-check. MS. PERINO: It's five, plus or minus one. But at least five, I believe.* Read more Comment (0), Email this.

MS. PERINO: I'll confirm. MR. DECKARD: And the family of a sailor who died on September 11th. MS. PERINO: I can check with the mil aide up front on that. Read more Comment (0), Email this.

MS. PERINO: Hold on a second, Roz. The President is the first President to ever provide federal funding for stem cell research. Yes, he drew a line, an ethical line, in terms of taxpayer dollars to spend money on research that would use the destruction of a human embryo. He has been an aggressive supporter of other forms of stem cell research like adult stem cell and cord blood research. This study today reported in Nature Magazine has not been reviewed by scientists and bio-ethicists yet, but it is one that the President believes deserves a good look. He is encouraged that there are scientists who are continuing to look for innovative ways to do stem cell research that would not involve the destruction of embryos. And so he is going to listen to folks after they have a chance to review the study, but it does hold some promise that they would be able to do that type of research without destruction of a human embryo. Read more Comment (0), Email this.

MS. PERINO: Well, I think it would not be prudent for anyone to make a snap decision about a major policy before being able to actually read a report. So let's give it some time, but it's certainly encouraging. Read more Comment (0), Email this.

MS. PERINO: Good afternoon. I'm, frankly, surprised anybody showed up. Read more Comment (0), Email this.

MS. PERINO: The junior varsity. Only for another week. (Laughter.) One announcement, and then we'll go to questions. Read more Comment (0), Email this.

MS. PERINO: Yes. But we're traveling most of the week. The President spoke to Secretary General Kofi Annan this morning. The call lasted about 14 minutes. It was initiated by Secretary Annan. They discussed the current efforts to assemble an international force for Lebanon, as called for in United Nations Security Council Resolution 1701, and agreed that quick decisions by the main potential contributors will be an important step. Secretary Annan said progress is being made on assembling an international force. The Secretary General said he would travel to the region, and the President asked him to call when he returns to discuss his trip. They also discussed the Iranian regime's statement on its nuclear program and the terms of the U.N. Security Council resolution. And finally, they also discussed Darfur and the need for action to improve the situation there. That's my announcement. I'll take questions. Terry. Read more Comment (0), Email this.

Q -- peacekeepers, Syria says that the deployment of peacekeepers on the Syrian-Lebanese border would be a hostile act -- this is something that Israel has proposed -- and that they would close their border. Does the United States have any reaction to that? ... Read more Comment (0), Email this.

MS. PERINO: No. Read more Comment (0), Email this.

MS. PERINO: Yes, I have one. The Secretary of State's office, on the Department of State website probably has this statement up on their website now, as we were walking over. United Nations Security Council Resolution 1696 made clear, as you know, the conditions Iran must meet regarding its nuclear program. And yesterday, the Iranian government conveyed its response in the 21-page package on the incentives that we provided to them on June 6th. That was made by the United States, United Kingdom, France, Germany, Russia, and China, affectionately known as P5 plus one. We acknowledge that Iran considers its response as a serious offer, and we will review it. The response, however, falls short of the conditions set by the Security Council, which require the full and verifiable suspension of all enrichment-related and reprocessing activities. We are closely consulting with the other members of the Security Council on the next steps. Read more Comment (0), Email this.

MS. PERINO: I think "more" is the wrong word. I think this is a rotation. Read more Comment (0), Email this.

MS. PERINO: This is a rotation. The order was signed by the President several weeks ago. The military commanders at the Pentagon know best how to do those troop rotations. And just as he defers to his commanders on the ground in Iraq, he defers to his military leaders here. That's why he signed the order. As I understand it, DoD held a roundtable today to discuss the order. And they'll be taking volunteers first, and then going to involuntary action, if necessary. This does reflect the fact that we're in a long and difficult struggle. The President is grateful and thankful for every soldier's sacrifice and the sacrifice made by their families, especially. I would note, this morning, somebody asked if this was a recruiting problem. But across the military, at all branches, the military is hitting its targets for recruiting. Read more Comment (0), Email this.

MS. PERINO: No, as I understand it, it's a rotation. Read more Comment (0), Email this.

Q To go back to Iran, I just wonder, when you said, it falls short, their response yesterday -- so what's next? What's the United States want to do in consultation with the P5 plus Germany in terms of -- the U.N. deadline, obviously, is August 31st. Is there a hope that diplomacy in the next few days could do something? Are you going to push for tough sanctions? What's next from the White House? ... Read more Comment (0), Email this.

MS. PERINO: We're going to allow all of our allies to -- the P5 plus one to talk about it and try to figure that out. And when we have next steps to announce, we'll announce them. But for right now -- Read more Comment (0), Email this.

MS. PERINO: No, not at all. I think that what it means is that we're going to -- this is a serious matter, and we're going to seriously consider it. And the P5 plus one will get together and -- they're going to be talking between now and August 31st, but when they get together on August 31st -- or before then, if they have more to say as to what the actual next steps will be, we'll let you know. Yes, Mark. Read more Comment (0), Email this.

MS. PERINO: I don't have anything additional from what I had earlier. Read more Comment (0), Email this.

Q Senator McCain, in his comments yesterday, said that the American people had been led to believe by the administration that the Iraq war would be a "day at the beach." Does that concern the White House? Do you feel that you're losing support among Republicans? ... Read more Comment (0), Email this.

MS. PERINO: I think if you look at what the President said on Monday, this is tough work that we're doing in Iraq, and criticism is part of our system of government and certainly a part of when you take tough action and when you are stalwart in your action. We're aware of the polls, and the President said on Monday, of course, you want people in America to support your positions. You've seen him out talking about it. His administration is going to continue to explain to the American people the situation that we're in, the struggle that we face and how important it is that we win. Read more Comment (0), Email this.

Q Dana, on Monday the President said that Iran cannot be allowed to thumb its nose at the U.N. Security Council and there have to be consequences. Does the President believe that this response is essentially thumbing Iran's nose at the U.N.? ... Read more Comment (0), Email this.

MS. PERINO: No, I don't think you'll get another statement today. I think that we needs some time to review it and to discuss what the next steps are. All six of them are meeting, and we'll see what comes next. And then as soon as we do have something, we'll be able to give it to you, but I don't expect anything else today. Read more Comment (0), Email this.

MS. PERINO: The statement says that the Iranians' response falls short of the conditions set by the Security Council, yes. Read more Comment (0), Email this.

Q As far as Iran is concerned, they have said that they will not go with the U.N. Security Council or the global community as far as the statements on Iran is concerned. Let's say, if the U.N. fails, or the P5, so what's the next step for Iran -- ... Read more Comment (0), Email this.

Q -- what you said, would it be fair to say that what matters is the state of play on August 31st, when the U.N. Security Council meets, that that is the point at which you will decide whether to press for sanctions? Is there time between now and then for Iran to modify its response, or for other developments to occur? ... Read more Comment (0), Email this.

MS. PERINO: Well, I'll be with you for the weekend, and as there are updates available, I'll provide them. I don't anticipate anything; there's certainly nothing on the schedule yet that's public. We'll let you know if that changes. But I think right now what you'll see, if there's any comment it will probably be coming from the Secretary of State. Read more Comment (0), Email this.

MS. PERINO: We'll keep you updated on calls. Read more Comment (0), Email this.

MS. PERINO: I checked into that, and at the time of invitation, no, there was no knowledge of his political affiliation. Read more Comment (0), Email this.

MS. PERINO: No, he was not invited -- he was invited before anybody knew that. Read more Comment (0), Email this.

MS. PERINO: No. And, believe me, I think staff thinks that two are plenty. (Laughter.) I don't think it was a secret that Rockey Vaccarella had been supportive of the federal effort and he had said supportive things about the President, as well. He asked to make sure that the President doesn't forget the Katrina victims, and the President reaffirmed that he will not. Read more Comment (0), Email this.

MS. PERINO: Because I'm tired. (Laughter.) Read more Comment (0), Email this.

Q President Bush is going to be meeting with the South Korean President on September 14th. Could you talk a little bit about what President Bush's intentions are in terms of pushing for lowering of trade barriers, particularly against U.S.-made autos? ... Read more Comment (0), Email this.

MS. PERINO: I'm not aware of him expressing frustrations to Secretary Annan. What the President called for is that leadership should be forthcoming quickly for the international force, but he did not endorse a particular country leading it, no. Read more Comment (0), Email this.

MS. PERINO: No, I think, as I said before, Secretary Annan said that there had been some progress, so that's a positive step. Lester, I can't wait. Read more Comment (0), Email this.

MS. PERINO: Thank you. Read more Comment (0), Email this.

Q At the most recent Democratic National Committee's meeting, they voted by voice vote to penalize any presidential candidate who campaigns in any state that refused to follow a prescribed calendar of primaries and caucuses by stripping that candidate of his or her delegates at the Democratic National Convention. ... Read more Comment (0), Email this.

MS. PERINO: The President doesn't get involved in the Democrats' decisions. The Republican Party has decided to leave those matters to the state and local parties, so we're not going to get involved. Read more Comment (0), Email this.

Q On Monday, The New York Times reported that Tony Snow refused to say the President will support and campaign for Connecticut Republican nominee, Alan Schlesinger. My question: This is primarily because Lamont, the Democratic nominee, has accepted public support from Al Sharpton, Jesse Jackson, and Maxine Waters, and Schlesinger -- ... Read more Comment (0), Email this.

MS. PERINO: I'm going to leave it where the President left it on Monday, and I will give you that transcript so that you have it. Read more Comment (0), Email this.

MS. PERINO: He will not. Olivier. Read more Comment (0), Email this.

Q One quick one. The office of Afghan President Karzai says the President invited him to the White House and he's coming. The office of Pakistani President Musharraf put out a statement also saying that he'd been invited and he's coming. Why hasn't the White House confirmed the visits? ... Read more Comment (0), Email this.

Q Just a quick follow on Iran. The House Intelligence Committee put out a report today, talking about threats from Iran, but also specifically said the intelligence community has to do a better job of analyzing what capacity there is for Iran in terms of building and trying to obtain nuclear weapons. What steps do you think the White House has taken, the administration has taken in general, to make sure that the intelligence reports about Iran's nuclear ambitions are not off the mark like the Iraqi WMD reports were? ... Read more Comment (0), Email this.

MS. PERINO: Oh, good. Let's go to the next one. Read more Comment (0), Email this.

MS. PERINO: I'll refer you to the Department of Defense who makes all those decisions. Richard. Read more Comment (0), Email this.

MS. PERINO: Immigration is certainly one of the pieces of legislation that we would like to see pushed forward. I wouldn't say in terms of -- I wouldn't call this a start, but a continuation of our efforts. Certainly, Congress has been away, and so during that time it doesn't seem like there's too much activity going on here in the capital, but a lot is going on out in the country. And I'm sure members are hearing from their constituents that they want to have an immigration bill. We consistently see that people understand that if we're going to solve any of our immigration problems individually, that they need to be solved together in one bill, comprehensively. And the President continues to support a bill that would increase border security, improve enforcement of the interior laws in our country, for the folks who are here illegally, and dealing with that problem, and in addition, create a temporary worker program, but reject a plan of amnesty. It's complicated, it's going to be tough work, but we are confident that the American people understand and that the Congress understands that they have a responsibility to move forward and actually get a bill passed. Read more Comment (0), Email this.

MS. PERINO: I haven't heard whether or not. I know that he talks to members quite regularly. Specifically on immigration, I haven't heard. Peter. Read more Comment (0), Email this.

Q Following up on that -- since he does talk to members of Congress regularly, will he or anyone from the staff be consulting with Senator McCain to find out why the Senator believes that the administration has misled the public on the war? ... Read more Comment (0), Email this.

MS. PERINO: I think we're in regular communication with Senator McCain, but I also -- I point back that he's not shy about his views, and these are views that he's been expressing for several months now. So I'm not quite sure I understand the point about -- Read more Comment (0), Email this.

MS. PERINO: I never actually saw the word -- him use the word "misled" in quotes that I went back and looked up today. I could be wrong. But I understand the point that he is making, and -- Read more Comment (0), Email this.

MS. PERINO: Going back to what the President said, that it's going to be a long and difficult struggle. And what they do is share the goal of winning in Iraq. Goyal. Read more Comment (0), Email this.

Q A Hezbollah question, please. India Globe has carried a front-page story that it's not only Iran supporting Hezbollah, but now Bangladesh has named a new bridge to honor Hezbollah's -- do you have comments on -- Bangladesh, our ally, is naming a bridge -- ... Read more Comment (0), Email this.

Q When the President today talked about the one-year anniversary of Katrina being just that, a one-year anniversary, was he in any way trying to lower expectations for the people in the Gulf region about the measure of recovery? Oxfam today put out a study saying that housing has not come back in any measure as much as people had expected in terms of using some of the money that's been available. And many people are still suffering, as he indicated. Is the President trying to lower expectations? ... Read more Comment (0), Email this.

MR. SULLIVAN: Good afternoon, everyone. For those of you I haven't met yet, I'm Kevin Sullivan, the new Communications Director. Thanks for coming this afternoon. I think we're going to have a very interesting and helpful briefing. With us this afternoon are Chairman Don Powell, Federal Coordinator for Gulf Coast Rebuilding. Chairman Powell will begin with about 10 minutes of remarks. He'll be followed by FEMA Director David Paulison, and finally General Carl Strock, Chief of the Army Corps of Engineers. So without further ado, Chairman Powell. After remarks, obviously, we'll open it up to questions. Thank you. CHAIRMAN POWELL: Thank you. Good afternoon. I hesitated to make this announcement public, but I'm going to do it anyway, and it's a very important announcement. If you don't hear anything I'm about to say, please focus on this issue -- just remember you heard it from me here in this press room on August 22, 2006 -- the New Orleans Saints will be in the playoffs. The New Orleans Saints will be in the playoffs, not withstanding their performance last evening. I'm delighted to be here. I thought I would share with you a couple of thoughts about the scope and scale of this catastrophic event. By any measure, I think we would all agree that this event perhaps was the largest catastrophic event to ever hit America. I've heard Governor Barbour say that if you exclude Mississippi, and only include Louisiana, it's the largest catastrophic event to ever hit America. If you exclude Louisiana, and only include Mississippi it's the largest catastrophic event to ever hit America. Ninety-thousand square miles were hit by the storm, an area the size of Great Britain, and more than three times the area that was affected by the Mississippi flood of 1927. Eighty percent of New Orleans, 80 percent of the city of New Orleans was flooded, underwater. That's an area that is seven times the size of Manhattan, and it was underwater almost two months. More than 1.5 million people were directly affected, and more than 800,000 citizens were displaced, were forced outside of their homes. More than 204,000 homes were severely damaged or destroyed, and 75 percent of those homes were in Louisiana, and that's about seven times as many as were affected by Hurricane Andrew. Fifteen billion dollars has been paid out by the National Flood Insurance Program, and that's more than all of the other claims combined since the inception of the Flood Insurance Program in 1968. Eighty-one thousand businesses were directly impacted; 220,000 jobs were initially lost, and there still is 180,000 that remain lost. So you can see this really captures how large this catastrophic event was. The President -- under the leadership of the President is fulfilling his commitment to rebuild the Gulf Coast better and stronger. And this commitment is demonstrated by several areas. Stronger levees: For 98 percent of the New Orleans metropolitan area population, the levees are at pre-Katrina levels or better, and they're on their way to becoming better than ever before. Housing: Under the leadership of the President, the Congress has provided almost $17 billion to rebuild damaged housing and other critical infrastructure across the Gulf Coast. This money, up to $150,000 per household, is beginning to flow in the area. Debris removal: We've already cleared more than 100 million cubic tons of debris. I often say that in the three countries in Mississippi -- Harrison, Hancock, and Jackson counties -- there was more debris in those three areas than all of Andrew and the World Trade Center combined, and that took two years to clean up. One hundred percent of the debris -- the dry debris in Mississippi is gone. Seventy-five percent of the debris in Louisiana is gone. It's remarkable, remarkable. Economic recovery: Again, because of the leadership of the President, GO Zone legislation has passed; New Markets tax credits have passed; other business incentives have began to be developed in the area. There is an environment for the private sector to be part of this rebuilding effort. Ten-point-three billion dollars of SBA loans have been administered and given in the area to homeowners, renters, business owners along the Gulf Coast. So we're supporting existing small businesses and attracting new investments to the region. Also, again under the leadership of the President, we're attempting to transform the systems like education and health care that have failed the people in the years before Katrina. As you all know, this will not happen overnight, but I'm convinced that we are laying the groundwork for a better and stronger future in the Gulf Coast area. A couple highlights about specifics, as it relates to the recovery of the Gulf Coast area. I have often said if Louisiana was a country, its gross national product would be tourism, energy and the port. The port is up and going. They have more ship calls post-Katrina than they did pre-Katrina. The tonnage is equal to or better than pre-Katrina. And I would remind you how important that is to America. The New Orleans Port touches 33 states in America, and 62 percent of the consumers in America are affected by the New Orleans Port. It creates, directly or indirectly, 365,000 jobs. The port is back. Energy: Very, very important to America. Gas production, oil production, is back pre-Katrina levels. Cutting systems are back pre-Katrina levels. Pipelines are back pre-Katrina level. Refineries are producing -- critically important to America. Tourism: 80 percent of the hotels in New Orleans are open. Sixty-two percent of the restaurants are open. In Mississippi, sales tax revenue is in double-digit increases over last year. Economic activity in Mississippi, as it relates to employment, is very strong. Businesses are open. I was in a retail store in Ocean Springs, Mississippi, last Thursday, talked with the owner. He said he's having the best year he has ever had; he has been at that place 15 years. Lots of strong economic activity. The private sector is beginning to kick in. Jobs are being created. Revenue streams are being created. Sales tax in both states are record highs. Bank deposits are 26 percent more than they were this time last year. Lots of liquidity in the area. Credit is available. There has been in the private sector $15 billion of private insurance claims in Louisiana and $5.5 billion in Mississippi. Lots of liquidity, lots of economic activity. So the President is fulfilling his commitment. As I mentioned, it won't happen overnight, but I'm convinced that the groundwork is being laid for a vibrant Gulf Coast area. Chief Paulison, share with us some of your thoughts. DIRECTOR PAULISON: Thank you, appreciate it very much. Like the Chairman said, the largest, most devastating disaster we've had in this country -- 90,000 square miles. And as we come upon this one-year anniversary, what we're doing inside of FEMA, we're doing ourselves is focusing on a heart, so we're not going to let those who died, let those who suffered, let those who lost everything, let that stuff go in vain. We need to make sure that we are going to be ready to respond to this next storm and not waste those opportunities, not waste those lessons learned that we had in the past. When they asked me to take over FEMA shortly after Katrina, I stepped back and just fell back on what I've learned in the past, the disasters we've dealt with in Dade County -- with Mariel Boatlift, Hurricane Andrew, ValuJet Crash, the floods that we've had, the major disasters -- tornadoes and all those types of things that we deal with in a community like that, that every time we've had a disaster like that, whether it went well or not, like Andrew didn't go well, we went back and without taking it personally, being very open, what worked and what did not work, and just take that very frankly. And that's what we did with Katrina. We sat our people down and we said, okay, we're not going to point fingers, we're not going to take this personally, we're just going to very openly deal with what the issues were. The first issue that I looked at very carefully that did not work, it was obvious to me just looking in from the outside, was communications. Our communications system was broken. It was broken between the local community and the state. It was broken between the state and the federal government, and quite frankly, broken inside the federal government itself. We did not have a good system in place to share information. We didn't have a good system in place to share communication with each other, to understand what each different department was doing from one side of FEMA to the other, from inside of DHS, we didn't have a system in place. So that's the first thing we had to fix. There were some technical issues. There was some issues of the -- with the equipment. But that was not the biggest part; the biggest part was actually dealing with a process. How are we going to share that information, how are we going to make sure that regardless of where the information comes in, whether it comes in from the bottom, or comes in from the office of the President, or from just phone calls coming in from our senators or congress people, how are we going to share this? So we have put a process in place to help us do that. I'm very confident of that. In fact, we're practicing that as we speak. We're having a warm start of our joint field office tomorrow, and we're going to be testing that system to make sure that that system we've put in place is going to work. And I know it will because it's a system that we've used in the emergency management community for years of how we're going to share this information. And that's going to work very well. That gives us another issue of situational awareness, which -- we simply didn't do very well with that, either. You have to know what's going on on the ground. And if you don't share that information, you're not going to have that knowledge. So that's going to work very well for us. The second piece I looked at was the logistics -- having the right things at the right place at the right time. We didn't do that very well, either. We had a lot of equipment, a lot of supplies, but did not have them at the right place. So we've done a couple things. One, we've, in some cases, quadrupled the amount of supplies we have. To give you an example, MREs, we had 160 tractor-trailers of MREs before Hurricane Katrina, and we now have 770 tractor-trailers of MREs. A tractor-trailer load of MREs will feed 10,000 people for a day. So we have the capability of providing food, water and ice to 1,000,000 people for a week already in stock. And to back that up, we've signed an agreement with the Defense Logistics Agency, which is the logistics arm of the U.S. military. They are going to be our backup. They'll be moving supplies into our warehouses, in some cases right down to where we need them, as we move stuff out of our warehouses. So that's going to be a great business tool for us. But more important than that is, we could not track our vehicles. As our tractor-trailers left our warehouses, or wherever they were, we lost track of them. Sometimes -- most of the time they didn't show up where they were supposed to go, there was no mechanism to find them. If a governor wanted to know where are their supplies we knew were going to arrive, we couldn't tell them that. We'd give them guesses, and, more often than not, we were wrong. It's our responsibility to deliver supplies to the states when they need it, and it's their job to distribute those supplies once they get down to their distribution field, their distribution offices. If they don't know when the tractor-trailers are going to arrive, they can't prepare to distribute those. So we now have a system in place we can do that. We've put a very sophisticated GPS tracking system in place where we can track those tractor-trailers. We get pinged every 15 minutes of where they are, and we can tell right down to the very street corner where that truck is and which way it's heading and where it's going, and that's important for us. The other piece we didn't do well is our victim registration. We ended up literally with victims in every state in this country. And we didn't know who they were, we didn't know where they were, and we didn't know what their needs were. We needed to have a better system of finding those people and register them before they get scattered around. We are now going to go into the shelters ahead of time, we're going to register those people as they come into the shelters, and then also we took five of our mobile command posts and turned them into mobile registration vans where we can go out to where people are. One of the things that we saw in Katrina was that a lot of people could not to get to where our registration offices were. They were stuck out there, they didn't have transportation. So we can go out to them. We have mobile -- mobile radios, we have cell phones, and we have laptop computers that are direct access to our cell system and to our satellites where we can connect people with FEMA, either with the 1-800-621-FEMA number by giving them a cell phone, or we can sit down with a computer with them and have them register online so we know who they are, where they are, and what their needs are. And that's going to be another tremendous business tool for us. The next piece was making sure that we were able to get people into hotels and motels as quickly as possible. With our new registration system, by finding where people are, we can move them systematically out of our congregate shelters into hotels and motels, and then look for longer-term housing for them as we go down the road. These are some of the systems we've put in place to make sure we're going to do a better job of taking care of the victims out there. That's kind of where we're going with this type of system. We know we're going to do a better job. We're much better prepared than we were in the past to deal with a lot of these issues. General Strock. GENERAL STROCK: Well, thank you very much, Chairman Paulison, and thank you all for being here and allowing me to explain what we have done in the Corps of Engineers since Katrina struck, what we hope to accomplish in the near and longer-term. First of all, before I begin, I want to acknowledge that not a day goes by that I do not reflect on the tragic loss of life and property as a result of this devastating storm. And we also, in the Corps of Engineers, recognize how vital it is that we accomplish our missions, to really set the conditions for the full recovery of this area, of the Gulf Coast. Chairman Powell did a good job, I think, of reminding us of the conditions that existed once the storm had passed. Since that time, we have worked tirelessly, literally around the clock, with thousands of people from the federal, state and local level, working with industry partners, thousands of volunteers from across the country, to restore the levee system around New Orleans to pre-Katrina or better conditions. And we've been very successful at doing that. Since September of 2005, we have restored or repaired 220 miles of the 350 miles of levees in New Orleans. Our initial estimate was 169 miles, but as we began to get into assessing the actual damage, and looking for vulnerable areas that were apparently unaffected, we increased our effort to 220 miles -- a magnificent effort. We recognize that we're important not only to the physical recovery of the area, but also to the economic recovery of the area. So throughout, we have emphasized that we want to employ local contractors and local people to do this work. Fifty-nine projects were involved in the work to date. Twenty-six contractors and 90 percent of the people involved in that were from the local area. All work was done with the intent that by the 1st of June, the beginning of hurricane season, we would have the system restored to or better than pre-Katrina levels, and we were largely successful at that. In addition to repairing the levees, we have isolated the three very vulnerable outfall canals that caused so many problems during Katrina. We've installed interim gated closures there and temporary pumping capacity to operate those during a hurricane surge. The federal government has been very generous. Working with the President and the Congress, we have been allocated about $5 billion of funding to spend in the near and mid-term on enhancing the system even further. By the year 2010, we will have achieved 100 year protection across the entire system. We will have completed all the authorized projects in the New Orleans area. And we will also have completed six major enhancements to the hurricane protection system. At the same time as this effort was going on, we've had an exhausting effort to determine what occurred and why it occurred so that we could learn lessons from this that we could incorporate into the repair and restoration of the works, and also incorporate into our longer-term planning. That effort involved over 150 subject matter experts from across the world, and it resulted in a report of about 6,000 pages that I think is a watershed moment for the Corps of Engineers and for the engineering profession in how to do this kind of work. And that will be peer reviewed by the American Society of Civil Engineers and by the National Research Council, to ensure that we looked at the right things in the right ways and got the right answers. We're also looking longer-range. The Congress has requested the Corps of Engineers by December of 2007 to make a proposal on what it would take to provide category 5 protection for the coast of Louisiana. We produced an interim report in June of this year which lays out the process we intend to follow. And we are developing a process in which we will not wait until the end, if we have a highly promising component of the ultimate solution, that we'll go ahead and propose moving ahead on those solutions with appropriate funding and authorizations. That will be a very long-term process, but I think we have a good plan to get there. We also want to recognize that this is not just about the coast of Louisiana and Mississippi; this is a national issue. And we're also in the process of evaluating the flood and storm protection systems across the country to ensure that we're aware of any vulnerabilities that exist elsewhere, and propose solutions to those vulnerabilities. Katrina has also reinforced the lesson that it is impossible to totally eliminate risk where nature is concerned. So it's critically important that people understand the risks involved, and we're working very hard to make sure that the people in this area understand the residual risks that face them today. And it reminds us that people must heed the local and -- the state and local officials' advice as we see these storms encroach on our coast. Ladies and gentlemen, thank you very much for your time and I look forward to answering questions. Thank you. Read more Comment (0), Email this.

Q The President yesterday alluded to some frustrations that money wasn't being -- wasn't flowing quickly to homeowners. It sounds like the money has gone from the Feds down to the state levels. Why, then, hasn't it been distributed to the homeowners? ... Read more Comment (0), Email this.

CHAIRMAN POWELL: Well, I think it's just a fiduciary type role that these people have. Again, you know, they want to make sure that the money is out there quickly. I have a sense of frustration, I have a sense of urgency all the time. That money needs to get out because -- you'll see a lot of activity, but it doesn't serve anyone for them to be sloppy and haphazard in that administration of those monies. Read more Comment (0), Email this.

CHAIRMAN POWELL: I think it's very important that a guiding principle has been set forth from the very beginning. The President has indicated this, that the planning of the neighborhoods and the planning -- the plan to rebuild the Gulf Coast should be the plans of the local people. Thus, that principle is very important and, thus, the administration of those plans and getting the money into the homes -- getting the money into the hands of the local people is a local initiative and state initiative. Read more Comment (0), Email this.

CHAIRMAN POWELL: The $110 billion, I believe -- correct me -- there's been something like $44 billion that has been into the hands. I would hesitate to follow up on that -- I would not hesitate, I would remind you that 75 percent of the money that has been appropriated is at the direction of the state and local people. Yes, sir. Read more Comment (0), Email this.

Q Especially in Mississippi, it sounds clear that the homeowners are going to get their money. But a question has arisen as to whether apartment dwellers, as well as home renters, have money that's accessible to them. How are they going to get that -- ... Read more Comment (0), Email this.

CHAIRMAN POWELL: Well, it hasn't gotten there, just like the homeowners' money hasn't gotten there yet. But there is a provision. And both plans spend that money for that specific cause. It will get there. Read more Comment (0), Email this.

CHAIRMAN POWELL: Well, the other that has not been obligated, let me give you a couple examples about that. The CDBG money is in there. That's $17 billion that's obligated but hasn't been spent. It's up to the local initiative -- the state and the local people -- to spend that money. There are some project worksheets that is obligated for certain infrastructure issues, but that, too, has not been completed to satisfy the requirements that they must have to get that money. But it, too, will flow. Read more Comment (0), Email this.

CHAIRMAN POWELL: That's one -- the unobligated money, that's part of it also. It will meet the needs. Read more Comment (0), Email this.

CHAIRMAN POWELL: Well, I think that was -- the difference between there is in anticipation of monies that will be needed to meet specific needs. Read more Comment (0), Email this.

CHAIRMAN POWELL: Infrastructure, insurance -- I mean, the flood insurance program. Yes, sir. Read more Comment (0), Email this.

CHAIRMAN POWELL: I think that's correct, $44 billion. Read more Comment (0), Email this.

CHAIRMAN POWELL: Right. Read more Comment (0), Email this.

CHAIRMAN POWELL: Well, I would say 75 percent of that, whatever that is. Read more Comment (0), Email this.

CHAIRMAN POWELL: Yes, sir. Read more Comment (0), Email this.

DIRECTOR PAULISON: The levees aren't being built to withstand a category 5 hurricane? General, you want to take that? GENERAL STROCK: I'd say that's a true statement. We don't have the authority to do that yet, and that's one of the tasks that we have been committed to, to determine what it would take to withstand category 5 across the coast of Louisiana. What we are now challenged with is to provide 100-year protection, 100-year flood frequency protection across the metropolitan New Orleans area. Read more Comment (0), Email this.

GENERAL STROCK: It is being studied. It's -- we issued a preliminary report in June that basically laid out the framework for the study and was a check with Congress to ensure that we're looking at the right things in the right ways. By December of 2007, we're required to have a plan or a suite of options that would provide category 5 protection. We've, importantly, been told to do this exclusive of normal policy, which normally requires us to do very rigorous benefit -- cost-benefit analyses. So we're in the process of delivering that report, working very closely with state and local authorities. Read more Comment (0), Email this.

GENERAL STROCK: Yes, sir. Read more Comment (0), Email this.

GENERAL STROCK: It's very hard to say exactly what the category of storm it can protect against. The 100-year frequency talks about the frequency of an event that could occur. Katrina has actually changed that and changed the definition of the flood plain. Working with FEMA, we defined the flood plain as a result of the meteorological record. We have determined that associated with that event, there is a certain height of levee that's necessary to address that storm surge. I don't think we've actually equated it with a specific category of storm. And I think that's appropriate because the category of the storm is not really the important thing. When Katrina actually hit New Orleans, New Orleans, it's estimated was about a category 2. But the surge that came from the Gulf was a category 4 or 5 surge, so it's somewhat misleading to talk about categories of hurricanes when we talk about level of protection. Read more Comment (0), Email this.

GENERAL STROCK: It is possible to do that. We do have models that can run category 4 storms against the city. And in fact, we are doing that as part of our category 5 study. Read more Comment (0), Email this.

GENERAL STROCK: I don't know the specifics of that. It's a very complex thing. It depends on where the storm tracks in reference to the city because the storm dynamics are very different depending what the track is. So I don't have specific answers to level of inundation or impact on levees and so forth. I can tell you that the levees, no matter what level of storm we see, would perform better than they did under Katrina based on the improved construction and some of the other enhancements we put into the levees. Yes, ma'am. Read more Comment (0), Email this.

Q General, from here on out, who is going to be in charge of the levees? There's been some confusion over who's going to be responsible for the maintenance, for the upkeep, for the rebuilding, for construction. Has there been one single entity appointed to be in charge of the levees from here on out? ... Read more Comment (0), Email this.

GENERAL STROCK: Yes, I think so. The federal responsibility is to ensure that the levees meet the specifications for whatever level of protection they were designed against. Yes. Read more Comment (0), Email this.

GENERAL STROCK: Yes. Read more Comment (0), Email this.

GENERAL STROCK: Well, it actually has begun. In the repair work that we undertook on those 220 miles of levee, we didn't simply repair what was there before the storm, we took it to its full authorized design. So those areas that were repaired have been taken up to those full design levels. The September 2007 deadline relates to about five different discreet projects in the area that we have a commitment to build to full, authorized design levels. An important part of that is to recognize that there is subsidence in the area, geologic sinking of the area around New Orleans. And our plans when we do complete those projects will compensate for that level of subsidence that we experienced. Read more Comment (0), Email this.

GENERAL STROCK: Well, in fact, we're trying to have a more aggressive target date because we feel a more appropriate time to shoot for is June of '07, which is the beginning of the '07 hurricane season. But right now, realistically, we think September is achievable, and we'll certainly try to accelerate that if we can. Thank you. Read more Comment (0), Email this.

MR. POWELL: I think there's unique challenges in both states. I think there's a unique challenge in Louisiana. As you know, Louisiana has levees, they have a metropolitan city, and they have some other unique challenges versus Mississippi. I'm convinced that both states, that the money will be flowing in an orderly way and a responsible way very, very soon, and that homeowners will be the recipient of the CDBG money so they can start rebuilding their homes. Read more Comment (0), Email this.

MR. POWELL: I will just tell you both of them, Mississippi has received approval of their plan, their administrator is taking action to get it in the hands of the recipients. Louisiana's plan has been approved, and their administrator is in the process of getting it into the hands of recipients. There's going to be a lot of activity in both states in the fall. Read more Comment (0), Email this.

CHAIRMAN POWELL: There's been some money dispersal. Read more Comment (0), Email this.

CHAIRMAN POWELL: I think it will happen in Louisiana within -- I talked to the administrator about 10 days ago. I think there will be some monies flowed to recipients momentarily. I think within the next week. It may be, for all my knowledge, I haven't checked in the last two or three days, that could have already happened. Read more Comment (0), Email this.

CHAIRMAN POWELL: I'm sorry? Read more Comment (0), Email this.

CHAIRMAN POWELL: Why not so far? I think their plan was approved later. They didn't get their plan into HUD until later after Mississippi. Thus, the plan was not approved until later. So it takes a little bit of time. Read more Comment (0), Email this.

Q Chairman Powell, you said, it's important that the local and state governments implement this spending. But what do you say to critics who say that the administration really should have done more to spur this on, to make it quicker? The President said in Jackson Square soon after the storm that he wanted the work done quickly. People look now at the anniversary one year later and say, is this quickly? ... Read more Comment (0), Email this.

Q I may have missed this, but you mentioned one of the biggest problems is the communication between the city, state and federal government. And you said that you're testing a system put in place tomorrow. Exactly -- can you elaborate on that a little bit? ... Read more Comment (0), Email this.

DIRECTOR PAULISON: This is -- this is strictly Louisiana. That's where the joint field office is. But this is transportable. Regardless of where we go, we just happen to have people already there, so it was the right place to go ahead and work through that system to make sure it's going to flow like we expect it will. Read more Comment (0), Email this.

DIRECTOR PAULISON: Depression. Depression. (Laughter.) Read more Comment (0), Email this.

DIRECTOR PAULISON: We've been watching it very closely. It's not a tropical storm yet. If it is, it will be called Debbie. And it's heading west/north -- kind of northwest right now. It's still way far out there. We're just keeping an eye on it. The conditions -- I talked to the hurricane center today. The conditions are favorable to -- for it to become a tropical storm, so we're just going to watch it very closely. But it is way out there. And again, now is the peak of our season. Between now and October 15th is when we get 80 percent of our storms. So that's traditional through -- for the last 100 years. So we're going to watch it, and we're expecting them to come. And we're going to be ready for it. Read more Comment (0), Email this.

MS. PERINO: Good afternoon. We are on our way to Minnesota. I have a couple of scheduling matters and an update for next week's week-ahead, and then because we're going to be doing -- the President is going to be doing a panel on health care, (inaudible), my special guest is Secretary Leavitt, who is going to give you a bit of a rundown of what the President will be talking about, the executive order he's going to be signing and answer a few questions on that. And then I'll take the rest of your questions afterward. Just to go over the schedule quickly. The President had his regular briefings this morning. He also had a meeting with his Homeland Security Council, the topic was pandemic flu, an update on pandemic flu. As I said, we're on our way to Minnesota for this panel on health transparency. And he will attend the Bachmann for Congress and Minnesota Republican Party reception. We arrive back tonight at 9:40 p.m. One foreign leader call to mention. The President called President Karzai of Afghanistan this morning. The call lasted about 10 minutes; it was initiated by the President. He called President Karzai to congratulate him on Afghanistan's Independence Day. They discussed security, education and regional cooperation. An update to next week's schedule, for your planning purposes. Obviously, next week the nation will mark the anniversary of Hurricane Katrina. On Monday, August 28th, the President will visit Gulfport and Biloxi, Mississippi. He will remain overnight in New Orleans. On Tuesday, August 29th, the President will have events in New Orleans, and then remain overnight in Crawford. On Wednesday, August 30th, the President will have events in Little Rock, Arkansas, and Nashville, Tennessee, and remain overnight in Salt Lake City, Utah. On Thursday, August 31st, the President will have events in Salt Lake City, and then he'll remain overnight in Camp David for the weekend. I don't know if he's coming back Sunday or Monday -- I believe Sunday. We'll get that for you later. Let me turn it over to Secretary Leavitt to give you a little bit about today, and then I'll take the rest of your questions. SECRETARY LEAVITT: The subject of the executive order is health care. Let me just put this in a short context. A lot of anxiety about health care. If you're a consumer, you're feeling your paycheck erode because of health care costs. If you're an employer, you're feeling your competitiveness slip. We're paying about twice about as much as a country for health care than our economic competitors. If you're a hospital or a doctor, you're feeling the worry of how the system is going to work in the future. There are a lot of issues related to how physicians are reimbursed by health plans and Medicare. Virtually everyone calls for a transformation of the system, a big change. The question is, change to what, transformation to what. In some respects, today is a big step toward answering that question. It's a significant step toward an interoperable system of value-based competition. I want to repeat that, because it's an important phrase, a system of -- an interoperable system of value-based competition. Let me break that down. By interoperable, most of you will be familiar with the fact that many of the systems we depend on are interoperable. If you pick up a telephone, cell phone, and you call someone who bought their cell phone and their cell minutes from another carrier, it still works, because the systems are interoperable. If you have an ATM or a credit card, you can use it anywhere in the world and it works, because it's interoperable. Everybody competes but uses the same system, basically, to transact their affairs. Health care isn't like that. Roughly 85 percent of all health care records are still paper. So a part of what we'll be talking about today is the interoperability of systems that manage health records. The second phrase, value-based. Value is made up of two components. The first is quality, and the other is price. The reality is, very few people have a clue what their health treatments cost. And even fewer understand the quality that they're receiving as it relates to other alternatives. The consequence of that is that you have a system where, essentially, there are no limits, and no one has an idea of what it's costing. So value -- part of the executive order today will be dealing with developing standards of quality so that consumers will have a better idea of the quality of the care they're receiving. Part of it will deal with price, being able to organize the health care system in a way that people can have episodes of care, but they can compare one provider to another. And then, of course, competition. We know as a matter of fact that if people have information about what they're purchasing, that the quality goes up and the price goes down. So an interoperable system of value-based competition. Now the -- if you're a consumer, what this means is that at some point in the future, you'll get more information about not just the cost, but also the quality. Over time, most insurance plans now are beginning to reward those who are cost conscious, and in some ways, penalize those who are not. They will have information about whether or not various doctors or various hospitals provide high quality or low quality. If you're a doctor or a hospital, it means that you will have information about the quality of the care you're providing to your patients. In the last two months, I visited 27 cities where there are quality initiatives. Almost all of them were instigated by physicians looking for ways to know whether the care they're providing is as high a quality as the rest of the market. If you are an employer, it means that in the future you will be able to inspire your employees to be more cost conscious by rewarding those who choose high quality, low cost care. Now, back to the executive order. Health care is a challenge to change. It's a big system. It's almost 16 percent of the gross domestic product, and it's made up of literally thousands of different providers. So changing a system like that is difficult. Some people argue that political will does not exist to change health care. I would suggest that the problem may be different than that. It may be that there's too much political will, and every time a proposal comes up, everybody unholsters their political will and (inaudible) at each other, and it creates a standoff that's existed for the last many years, and it will likely exist in the future. So this executive order is about changing the system by using the purchasing power of the federal government to begin to shape the market in conjunction with other payers. Let me be more specific. The federal government pays for as much as 40 percent of all health care in America, when you combine Medicare, Medicaid, Department of Defense, Veterans Administration, and the Office of Personnel Management, which pays for the employees. If federal purchasing began to make certain requirements of those from whom we purchase, in conjunction with unions, large employers and states, it would begin to make a clear signal to the market as to how it will be shaped in the future. The executive order puts the federal government -- will change the federal government's procurement habits in four very significant ways when it comes to health care. The first is that standard health information technology will be made a very high priority in our procurement. In other words, if people in the future who sell to the federal government or are providers to the federal government desire to do business with us electronically, they'll have to use a set of standards that will be adopted uniformly across the industry. The second point is that value needs to be defined in order to provide this quality price-value competition. So we'll be adopting a series of standards for health quality that have been developed by the medical industry. The third is price. It will be a condition of doing business with the federal government if you're a health plan to make available information regarding your claims. It also indicates that the federal government will make available its Medicare claims information. Now, that's significant because it means that efforts to aggregate claims information into the episodes of care that can be compared, and quality that then can be compared will now be actuarially sound. Many people have tried to do this, many organizations, but they have lacked one critical piece, and it's the information from the federal government. We're changing that. We're going to begin to be an active partner in those efforts. And lastly, incentives. We will, as a result of this executive order, all of the agencies of the federal government that procure health care will begin to develop incentives that will provide that reward -- let me restate that, that will reward consumers and providers who provide -- who have high quality and low costs. Now, as I indicated, this is a very important step toward an interoperable system of value-based competition. Many of the things I've talked about are happening in small measure today. It will continue to grow over the course of the next several years, but there's a clear move, and we believe by the end of the year, we will have not just the federal government, but a very high number of this country's largest employers who will be adopting a similar set of practices. We're approaching the larger unions in the country, as well as the states to do the same thing. And so if 55 percent or 60 percent of the health care purchasers in the country, or at least the (inaudible), are adopting the same practices, it will clearly begin to reshape the market. So that's the reason the executive order is of such significance. Minnesota has a -- one of six pilot sites where they are experimenting with ways of defining quality and comparing it to price to compare value. And, consequently, we chose to go there. Read more Comment (0), Email this.

SECRETARY LEAVITT: That's a very good question. The science of measuring quality is still in its pioneering phase. One of the problems that will need to be refined is being able to weigh those that have more serious conditions from those who do not. Learning to categorize not just the treatments, but the type of patients they are treating is a significant part of what we're learning. We currently have -- there are collaborative groups in, I would say, more than two dozen cities that have been formed by doctors, hospitals, insurance companies and employers to try to learn how to do this. We are forming a network of both collaborative organizations and beginning to harmonize their efforts so that we can learn how to deal with problems like the one that you raise. That's one of the reasons that the measurement of quality will start off in a quite basic way. I'll give you an example. One of the quality measures is diabetes -- has to do with diabetes. The measure is, have you checked the hemoglobin A1C on a diabetic every quarter? We know that those who do have a check every quarter have fewer complications, and ultimately their cost is less. So one of the basic measures of quality is to determine whether or not a physician or a practice has followed that. Another measure, if you were doing hip operations, for example, would be how many re-admissions did you have because of complications? So you can see in the future if I need a hip operation. Today if I wanted to pick a physician, I would get a list of physicians and hospitals from my insurance company that they would pay for, but I'd know nothing about it. In the future, a patient will be able to say, here are the doctors in my area that my insurer will pay for; here's how many hip operations they did, and here's the quality of them, based against a standard; and here's how much they cost, based on the kind of patient I will be; and, also, how satisfied were the patients. But you can see that not only gives the patient more information, but it also begins to give the physician a better sense of the quality that they're providing. We've done this in nursing homes, and it works. Instantly, when this is measured and people begin to -- and it's transparent -- the nursing homes, the hospitals and the doctors begin to work hard to get better, make certain that they're among the highest quality. Read more Comment (0), Email this.

SECRETARY LEAVITT: That's a very good point. But the reality is, where we are today, it's almost impolite to ask about quality, and nobody has a reason to care about the cost, because they just give their insurance card. Over the course of time, we will see -- because of the high costs of health care, we'll see more employers' health plans rewarding those who choose high quality and low cost. For example, they may say, we're prepared to pay 100 percent of a high quality, low cost provider. But if you choose a provider that is low quality and high priced, then we're not prepared to pay 100 percent. You may have to pay part of that yourself. So it begins to give people a sense of value and a reason to care. And we know from previous experience that if people have that information, they begin to make better choices. Read more Comment (0), Email this.

SECRETARY LEAVITT: Well, this is an insightful question, and one that I want to be clear about. Some of this is happening today. But in order to collect quality data, the first step is to define what it is you're measuring; the second is to decide how you're going to measure it; and the third is how do you collect the data. Because 85 percent of the medical records are paper, quality measurement in most places today is a nurse who comes in on a Saturday, has a two-foot stack of health records, has to go through and find out if the patient's hemoglobin A1C was checked last quarter, and then they have to bundle that up and send it somewhere. That's why electronic medical records are so important, because we have to define an electronic standard that will then allow that information to be gathered automatically and continually updated. So the four major components are health IT, measuring value, being able to aggregate cost in a way that can be compared, and then providing the incentive. That is an interoperable system of value-based care. It will -- as we plan this out, see, this isn't the kind of thing you'll just flip a switch and it will work. It will happen in phases and it will develop over time. But I feel confident three years from now we'll look back and see substantially more consumer information available for decision-making and for doctors to improve their care. Read more Comment (0), Email this.

SECRETARY LEAVITT: I think it's safe to say that virtually everyone wants this to happen, but for different reasons and for different concerns. Employers have their hair on fire right now with concern. Their costs are going up so fast they're beginning to lose their economic competitiveness. They're seeing the wages that they pay their workers eroded. I was just reading about my home state. I was governor of Utah for a time, and I noted that the legislature gave teachers the biggest salary increase in decades. But their paycheck -- the paycheck of the average teacher, or many teachers, went down because of the health care cost. And that's happening to industries -- (DROP IN FEED) -- SECRETARY LEAVITT: -- that employers want this to happen real fast, and if it's imperfect, it's okay with them. Health care -- doctors and hospitals -- they want it to happen, but they want to make sure it's done perfectly (inaudible) tension between them as to how quickly this can happen. That's a healthy tension. It will keep us motivated to move forward, but it will (inaudible) us to be cautious to assure that we've done this well. Read more Comment (0), Email this.

SECRETARY LEAVITT: Thank you. MS. PERINO: Okay, special guest, Mike Leavitt. So do you have other questions? Read more Comment (0), Email this.

MS. PERINO: Well, as you know, the Security Council deadline was August 31st. I'm not going to parse the Iranian government document today here on the airplane. That is a job best left to the diplomats, the P-5 plus one, led by the United States and President Bush, for them to review it. I understand that the United States government has received a copy of it. We are aware of the rhetoric that's been coming out of the regime about a nuclear program, and the President made very clear to everyone yesterday in his press conference that he thinks that that would be a mistake, and dangerous for the region and the whole world. So let's let the diplomats take a look at this response before we parse it out too much here. Read more Comment (0), Email this.

MS. PERINO: I don't believe so, no, because it came out as we were on our way here. I don't believe he's seen it yet. Read more Comment (0), Email this.

MS. PERINO: I think the report that I saw -- I think it's the article you're referring to -- was an unnamed source who said that troops could be reduced. And so I think that we'll wait for official word from the U.K. before having any further discussions. The issue about conditions on the ground and making troop decisions about -- based on conditions on the ground stands, and you heard the President talk about that yesterday. Read more Comment (0), Email this.

MS. PERINO: Not that I'm aware of. And, again, I point you back to the unnamed source that said it could happen, not that it would. Read more Comment (0), Email this.

SECRETARY PAULSON: Good afternoon. I'm Hank Paulson, and the newest member of the economic team. This was my first session -- economic session at Camp David. And I found it particularly interesting and productive. And what we did was, by getting out of Washington, D.C. and getting into a relaxing environment, I think we were able to have quite an interesting and productive session where we dug deeper into some of the longer-term issues, some of the complex issues we're dealing with. Now as you know, all of this was against the backdrop of an economy that's been performing well for some time now. We had a good discussion -- Ed Lazear began by talking about the economy, but most of the session was spent talking about some of the longer-term challenges. The biggest section was on entitlement reform, so we talked a lot about that, and different approaches, the nature of the problem. We had a brainstorming session. We talked about the budget, we talked about tax reform, we talked about wage growth -- good discussion about that. And what struck me -- my biggest takeaway here was how engaged the President was on all of these issues, and how well the team worked together and how well the discussion went. So with that, as a backdrop, why don't I throw it open to questions? Read more Comment (0), Email this.

SECRETARY PAULSON: That's, I think, the $64,000 question. And as I've thought about it, I think a big part of it relates to the fact that many Americans aren't feeling the benefit because they are clearly better off as a result of a strong economic growth and job creation. They're much better off than they would be if the economy were growing slower or weren't growing. But many of the Americans aren't feeling it in terms of their own economic situation. Part of this is a result of energy costs, health care, and so that's -- as I said, that's part of it. I would be optimistic that if we can keep the job creation, keep making new jobs and productivity levels high, that you're going to see wage growth follow this. And we've seen some encouraging signs if you look over the last couple quarters. And that's part of it. And then there's the other question which really -- or the other part of this, which I think relates to a trend that's been going on now for 20 years at least, which really has more to do with the integration of the U.S. into the global economy and technology, and that's that, clearly, we're seeing a trend that the greatest rewards are going to those who have the skills to really adapt to the opportunities in the economy. And so that's a trend. The answer to that is clearly education and training. But I think one thing we all feel pretty strongly about, that whatever the issues are we're dealing, we're dealing with -- it's easier to deal with them with a strong growing economy that's creating new jobs. CHAIRMAN LAZEAR: May I just add a point just to Secretary Paulson -- the other thing I would say is that if we look at the behavior rather than the responses to polls, the behavior is consistent with a strong economy. We see consumption being high. In fact, the saving rate is negative right now. We see people entering the labor market at very high levels. Labor force participation was up last month primarily because jobs are available and because wages are growing; business investment is strong; investment in non-commercial real estate is strong. So all of the indicators are that the behavior does not reflect the kind of language that we're seeing in the polls. DIRECTOR PORTMAN: I would also add, not as the budget director, but as someone who has looked at some of these polls, that, in fact, people do believe their personal situation is better. In fact, if you look at the recent ABC/Washington Post poll last week -- I think it was reported this week, it shows that about 60 percent of people think that their situation is good or very good. And yet, with regard to the economy, you are correct. There is less confidence in the economy. That's a disconnect, and that disconnect can be explained partly by what I think Secretary Paulson was explaining. But partly it is we probably haven't done as good a job communicating the strength of our economy because people are doing well. They feel as though what they -- over 60 percent of people feel that the economy is doing well for them individually, but they are concerned about the macro-economy. So part of what we learned today in talking to Chairman of the Council of Economic Advisers, and Secretary of Treasury, and others, was that, in fact, we have a strong and growing economy. We still have the strongest economy, by the way, among the G7 countries, our primary trading partners. And we had 4 percent growth in the first half. And we look to continue growth, continue relatively high productivity, which, as Secretary Paulson said, will lead to higher wage growth. And we're also seeing, of course, a very positive impact, therefore, on the budget. Pro-growth economic policies have led to increases in revenues, which, in fact, have taken the budget projections down, not just for us but the Congressional Budget Office reported yesterday that they, too, concur with us that the budget will be lower this year than projected. And in fact they believe it will be even lower than we're projecting now, partly driven, again, by the increased revenues from a better economy. Read more Comment (0), Email this.

SECRETARY PAULSON: We didn't talk about that specifically, but -- and it's difficult to know what's affecting people's views, but our conversation was focused very much on the economy, what's going on in the economy, how can we keep it growing, what are the concerns, if any, we might have looking to the future. Read more Comment (0), Email this.

CHAIRMAN LAZEAR: The one thing that we do know is that the more narrowly focused our polls on the economy, the better are the responses. So if you look at polls, for example, after al Zarqawi was caught, the general view of the economy at that time jumped 13 percentage points. And of course that had almost no effect on the economy to speak of, and yet people's opinion of it went way up. So if we look at numbers that are related, say to the economy specifically, look at the Conference Board's numbers, you tend to see higher ratings there. So the polls that focus on the economy, per se, and only the economy, I think do give us better numbers, and that's probably because there is some relation between the way people see the economy and the general situation in the global war on terror. Read more Comment (0), Email this.

Q You referenced the CBO report yesterday. One of the findings of that report was that if the President's tax cuts are extended through 2016, the cost of that plus fixing the AMT would be $3.2 trillion. And that would be on top of a deficit that they're projecting out the next 10 years of $1.7 trillion. Does that estimate square with the estimates that the administration makes? And what kind of problem does that present for you in trying to get the President's tax cuts made permanent? ... Read more Comment (0), Email this.

Q Secretary Paulson, I was wondering if you could elaborate a little more on the brainstorming session that you referred to, and also tell us a little bit about -- there are concerns that tax reform is being moved back on the agenda again to make room for Social Security reform. I'm kind of wondering what the plan is there, and if you're going to push Social Security reform, what you're going to do differently from Secretary Snow's efforts last year? ... Read more Comment (0), Email this.

MR. SNOW: A number of things to start out. First, today, the President has been meeting and continues to meet with the Secretary of Defense, military commanders and senior advisors. This is a follow on to a recommendation made in July by the Secretary of Defense that the President have regular 90-minute discussions with military commanders for a comprehensive review of the security situation in Iraq, and also generally in the war on terror. So that is what is taking place right now. Later in the day the President departs to Camp David aboard Marine One. There will be meetings with the President's economic team tonight and tomorrow. The economic team will include the Vice President, the Treasury Secretary, the Commerce Secretary, the Labor Secretary, the Secretary of HHS, the OMB Director, the White House Chief and Deputy Chief of Staff, Al Hubbard, David Addington, yours truly, Candi Wolff, Eddie Lazear and Keith Hennessey, also in attendance. All right, let's see, a couple of other stories that I'd like just to touch on, because I know they're top of news, and then we'll go to questions. First, a couple of things I think that are important to -- by the way, if we can sort of keep it down in the back. That's been a distraction the last couple of days, and I'd like to try to make sure that we can all keep our concentration up. There were reports that an unnamed military expert had received briefings at the White House that we are continuing alternatives other than democracy in Iraq. It's just not true. The article does note, however, that there has been increased violence in Iraq in recent months, and that is absolutely true. I'm sorry, guys, if we can hold it down, it is distracting. This is not as big as the room used to be. Thank you. We had testimony from General Abizaid last month; ones of the things he noticed is, I think he said the sectarian violence had been worse than he'd ever seen it, and that if trends continued, it could place Iraq on a path towards civil war. And the peace in The Times I thinks reflects some of the thinking that went into that. On the other hand, there are developments also subsequent to the third of August, I think, which was the named date of a memo that had been obtained. A couple of things are probably worth noting. Number one, there is coalition presence throughout the country, but also the training up of Iraqi forces, which have become increasingly nimble and capable. I mentioned yesterday there had been outbreaks of violence that have been handled solely by Iraqi forces in three different parts of the nation, including Najaf and Basra, within the last week or so. Iraqi Arabs also, as I stressed, retain a strong sense of nationhood, and many people in Iraq still remember a time when sectarianism was not, in fact, a guiding feature or a significant feature of Iraqi life. No major political figure in Iraq has described the situation as a civil war or advocated one, and as a matter of fact, the Ayatollah Ali al-Sistani and other Shia leaders, in fact, have played a very prominent and welcomed role in trying to restrain Shia response to some of the sectarian violence. The administration continues, though, to take a very close and candid look at what's going on. The security situation in some places is uneven, and it's clear that there are huge challenges that await us. The military commanders have been trying to reshape and retool operations, especially in the Baghdad area, and they've yielded some fruit. I mentioned yesterday the previously violent Dura neighborhood. Let me just give you some of the stats I've received -- and these are about a week old now, but they give you a sense of what's going on -- more than 5,000 U.S. and Iraqi forces were involved in an operation that took violence down by more than 80 percent in Dura. Since the operations began the number of murders dropped to zero. It's the same neighborhood where there were, in some cases, 20 murders a day. They cleared more than 3,000 buildings; they arrested 22 detainees; they seized weapons. There was an AP story that came out yesterday, I think you probably saw, that talked about Amariyah and a five-day sweep that had similar results. I don't want to be claiming that violence no longer is a fact of life in Iraq because it is. But on the other hand, there are continued efforts to try to be effective throughout the region. Some other things as you look at stories ahead to think about: As coalition forces, as U.S. and Iraqi forces become more effective in neighborhoods in Baghdad, you can expect some members of al Qaeda in Iraq and also insurgent groups to filter elsewhere, and especially to test out the fitness of Iraqi forces. This will sort of parallel what we saw in Afghanistan, when you saw a transition of forces from U.S. to other forces. So that is likely to happen. We anticipate that. Second story -- and this is also important -- actually, a couple of stories about what's going on in Lebanon. I thought I'd give you a quick update there. There were reports that senior members of the Lebanese government had said that Lebanon would not disarm Hezbollah. I mentioned yesterday to you the fact that Prime Minister Siniora would be giving an address to the nation. Well, he has delivered that address, he did it last night, and I thought I'd read out some of the key points, because it's counter of the stories that the Lebanese government says it won't disarm Hezbollah. First, the Prime Minister reiterated that "a strong and democratic state is the biggest victory we as Lebanese can achieve." He also said that Lebanon will never be made into, "an arena for regional and international conflicts." He reiterated his nation's government -- his government to extending and implementing the Taif Accord, his own seven-point plan, and U.N. Security Council Resolution 1701, and also the other U.N. Security Council resolutions that well, as he put it, would extend state sovereignty, "over the entire homeland." He said that, "No areas will remain closed to the army," and that's important, because I think part of the reporting was indicating that Lebanese officials had said that they would sort of wink and nod and pay no attention to what Hezbollah had done. And he said there would be, "no armed manifestations outside state authorities." "Weapons should be held only by the state." Again, this is the Prime Minister speaking to the Lebanese populace. In terms of the U.N. Security Council resolution, 1701 does not directly call for disarmament, but it does refer back to U.N. Security Council Resolution 1559 that does. However, there may be a follow on resolution, there has been discussion, if necessary, of coming up with more specific plans, either by resolution or joint planning, to demilitarize the southern part of the nation, that is demilitarize other than duly constituted authorities. And as I said yesterday, Lebanon will have to take the lead role, and we'll get some assistance from the United Nations forces, but Lebanon will have to do it. We also understand that the Lebanese government, which has not had a significant presence in the south for 30 years, is going to have to take time to reestablish links and bonds with the Lebanese people. But again, the ultimate goal of the process is Lebanon, under the authority of a sovereign and elected government. Those are just a couple of the basic stories I wanted to make sure that I gave you sort of a readout on. I know there are others, and we'll take questions now. Terry. Read more Comment (0), Email this.

MR. SNOW: Beginning to, yes. When you're talking about taking 15,000 Lebanese armed forces, troops and moving them into the south, that is something that's called for. It has been agreed upon by the government. But again, we're not expecting overnight results. We understand that this is something that is going to take time. But it is important to realize that there has been a commitment on the part of the Lebanese government eventually to regain control over the entire countryside. And that does include disarming Hezbollah. Now, Hezbollah can do it of choice. We certainly hope that's the case. As the President said the other day, you can't be an organization and have one foot in politics and one in terror. You got to make a choice, and we hope they make the political choice. Read more Comment (0), Email this.

MR. SNOW: Yes. Read more Comment (0), Email this.

MR. SNOW: Yes, it includes General Casey and General Abizaid. Read more Comment (0), Email this.

MR. SNOW: I suspect it would come up, but I don't know. I'm not sitting in on the room. It's a highly restricted meeting for obvious reasons. But the President does take advice from them, and when you're getting a comprehensive review, one of the questions that's going to come up is, what do we need? The President has always said that that's the first question he asks his commanders, and I suspect it will arise today. Read more Comment (0), Email this.

Q There seems to be a subtle change in tone. When this conflict between Hezbollah and Israel first erupted, the President was forceful in saying, we must address the root cause. And here you're sort of saying, hopefully Lebanon will deal with disarming Hezbollah. There seems to be a backing off. ... Read more Comment (0), Email this.

MR. SNOW: You know, a lot of people do. I mean, I don't know which people on the ground. Again, it's very difficult to assess. The conventional wisdom is that Hezbollah is suddenly popular. I don't think -- you can think about people's self-interest. You have a group that you know has been going in and operating independently in a rogue fashion. It declares war on a neighbor. There is a response. This group says, we are going to continue to do it. Now, if you're a victim of that, you had no party in that, you are not likely to be very happy about it. If you understand that what is going on is that people are being held hostage for political or ideological reasons to a group that is beholden not to the people of Lebanon, but to the governments of Iran and Syria, sooner or later they're going to say to themselves, this is not a good deal for me. And so that's part of it. Also, it's important to understand that in all of this, Hezbollah does have a choice to make. I know that one of the new tactics, and we're seeing this with Hamas, we've seen it with Hezbollah, we've seen it with al Qaeda now, this is an emerging tactic, which is, commit acts of terror, try to get people to fight against each other, and set up a charitable foundation to hand out cash and crumbs to the victims. While that may be an attempt to make some sort of PR advantage, but in the long run we would hope that Hezbollah and all parties would, in fact, work toward having a sovereign government whose decisions would be respected and whose autonomy and authority would be respected by Hezbollah and all parties. So this -- you have to address the root cause, which is that Hezbollah, operating independently, decided it could declare an act of war. It did so in complete independence and defiance -- well, I don't know that the government was informed, so you can't be defiant, but completely independently of the government of Lebanon -- and as a result, has, in fact, caused great carnage and damage to the country. Let me also say that the United States not only has been deeply aware and conscious of this, today the United States helped open up a corridor not only humanitarian, but also in terms of commercial traffic between the Rafiq Hariri International Airport in Beirut and also the airport in Amman, Jordan -- that with the help of the Jordanian and the Israeli governments, we've been working to open up humanitarian corridors, and we consider it absolutely essential to ramp up humanitarian and reconstruction aid within Lebanon. I know it's a long answer, but there are a lot of facets to the question. Bill. Read more Comment (0), Email this.

Q It seems, though, that when you come out here and make a preemptive statement that there is no agreement not to disarm Hezbollah that you're flying in the face of the evidence on the ground. You know, for example, that politics in the Middle East is deliberately ambiguous much of the time. There is no indication that, in fact, the Lebanese government is going to force Hezbollah to give up its arms. Your preemptive statement this morning seems based on the belief that they should, and that the interests of the people will force it. But there's nothing on the ground and nothing in past history to suggest that that would ever be the case. ... Read more Comment (0), Email this.

MR. SNOW: Well, that's something. Now, perhaps you've been talking to people directly on the ground there, and have a better read out. But we're now talking about an agreement that is several days old. And if you're expecting, Bill, for there to be dramatic new things and people sort of running out to the village square and dropping off their Kalashnikovs, we're not quite there yet. Read more Comment (0), Email this.

MR. SNOW: Yes. However, that was Winston Churchill talking about second marriages. (Laughter.) Read more Comment (0), Email this.

MR. SNOW: Samuel Johnson speaking -- absolutely right, thank you, it was Samuel Johnson. So Dr. Johnson speaking of second marriages. It's a clever quote. (Laughter.) This is great. No, it's always good to get corrected. Look, there is going to be -- there is not only a considerable amount of hope, but determination. You're absolutely right. Hezbollah is going to play a very important role in determining what happens here, because if the situation doesn't change, you're still going to have the same root cause. You're going to still have the same possibility of unrest in the region, and that's a real concern. And so you have to figure out every possible way -- at this point, every possible and peaceable way to place enough pressure on Hezbollah and also to empower the Lebanese people so it doesn't happen again. But, yes, absolutely, we do hope that it works. Read more Comment (0), Email this.

MR. SNOW: Yes. Read more Comment (0), Email this.

Q It seems like it's whack-a-mole now on the local level because by all accounts Baghdad is -- by most accounts, Baghdad is worse than it's ever been, as far as the security situation. So how is this not whack-a-mole on the local level? ... Read more Comment (0), Email this.

Q One more briefly, I know you don't do book reviews, but more people are reading now, Fiasco, by Tom Ricks, a well-respected reporter in this town. And he says that mistakes -- civilian mistakes not only fueled the insurgency, but led -- might have even spawned it. With so many people reading it, do you have any reaction? ... Read more Comment (0), Email this.

Q After a week of soul-searching -- I mean, not soul-searching -- I mean briefings the President has had, has he done any soul searching in terms of policy towards Iraq? The highest fatalities in July and so forth, so there is an increase in violence. Are any policies changing? ... Read more Comment (0), Email this.

MR. SNOW: Well, as they continue to exhume and now put together exhibits in Iraq of the hundreds of thousands who were killed by Saddam Hussein, there is still the hope that was expressed by more than 12.5 million people who went out and voted at some risk to their lives, but they think it's worthwhile. And if we could do this in a totally bloodless way, that would be great, but terrorists, as I pointed out before, they look at human carnage as a political asset. We look at it the different way. We mourn the loss of lives. We don't look at that as a way of advancing our ideology. We look upon every human life as possessing unique and independent dignity, and we wish that none of them had to be sacrificed, and we hope that we're precisely working toward the day in which you're not going to have to worry about mass graves in Iraq, where you're not going to have to worry about sectarian violence, and that the primary concern is whether their taxes are too high and whether they're getting what they need from their government. Jennifer -- Jessica. This is a bad day. Read more Comment (0), Email this.

Q If that's the only name you call me, I'll be very happy. The U.S.'s closest ally in its Middle-East policy is Britain. The man who's filling in for Tony Blair while he's on vacation, the Deputy Prime Minister there, may have said in a meeting -- used an expletive to describe the President's work on the Middle East road map, and called him a cowboy in a Stetson hat who's not just doing the job. Any reaction to those comments? And also, more broadly, how concerned is the President that in Britain there is plummeting public support for the U.S. position and Blair's alliance with Bush on Mideast policy? ... Read more Comment (0), Email this.

Q Can I follow on Helen's question? Does the President go through any soul-searching when he hears -- yes, Tony Blair supports him, but when he hears there's such little public support overseas for his positions -- does that cause soul-searching? ... Read more Comment (0), Email this.

MR. SNOW: I'm not aware of that. I mean, I've never heard it, as far as I know -- no. Read more Comment (0), Email this.

MR. SNOW: You'll have to ask the guys who wrote it. I don't know. Read more Comment (0), Email this.

Q But beyond soul-searching, is the President contemplating changes in policy? To follow on what Helen was saying, because you have these 21 retired generals, diplomats and others today sending an open letter to the President saying they do want a dramatic shift in that policy. You said again a moment ago, stay the course. You could still achieve your objectives maybe with a different course. Is he considering a policy change? ... Read more Comment (0), Email this.

MR. SNOW: What they've already done is they've restructured Operation Together Forward. Now, if you -- we're not going to move our forces to the Philippines, halfway across the globe and use that as a "staging area." The United States is going to remain engaged, but also remain engaged in the business of trying to train up Iraqi forces. You know, you understand in a political year people are going to make political statements, including retired generals, and they're perfectly welcome to. It's an important addition to the public debate. But we're also -- the President is a guy who has got real responsibility here. Now, I've got to tell you, just given to what I said to Jessica -- not Jennifer -- in response to the sort of ongoing cost of promoting freedom around the globe, do you not think a President will do everything in his power to succeed? And the answer is, yes. He's not sitting around saying, boy, I'm stubborn, I'm going to stick with it. That's not the way the President is. Read more Comment (0), Email this.

MR. SNOW: Well, wait, an alternative to -- Read more Comment (0), Email this.

MR. SNOW: Well, but you regard a change -- you regard wholesale throwing away of the policy as a change. Read more Comment (0), Email this.

MR. SNOW: Okay, well, tell me what you have in mind for a change. Tell me what's in mind for a change. Read more Comment (0), Email this.

Q I don't know what they are, I'm not the President. I'm saying, what is he considering? What is he -- everything that's thrown up that supposedly he's contemplating -- that's mentioned in The New York Times or anywhere -- you shoot down and say he's not contemplating that. And then in the next breath you say he's always soul-searching, he's always contemplating change. ... Read more Comment (0), Email this.

Q Well, I think what everyone is reacting to is that there's been a lot of writing from war supporters that there needs to be a change, and clearly this is driven by the violence that we're seeing out of Baghdad, and some of these writings from the biggest supporters of the invasion, they've been advocating an increase in forces, a major increase in forces -- not from one place to another, but a re-upping. And in this political year, is it politically feasible to increase troops by November -- will the party -- ... Read more Comment (0), Email this.

MR. SNOW: The President has made it clear, if the generals make the recommendation and they say they need it, they're going to get it. And I don't know how many times I have to say it, but I'll keep reiterating, the political angle really matters less to him than his obligations and solemn responsibilities as Commander-in-Chief. You've got to get that right. I mean, that is his absolute objective. And so, it's simply -- if somebody says, sir, you're going to get a real political bounce if you detail another 30,000 -- if that is not what the generals have asked, that's not what's going to happen. Similarly, if somebody says, you'll get a real political bounce if you pull out 30,000, and that's not what the generals have requested, it's not going to happen. Read more Comment (0), Email this.

MR. SNOW: I understand -- Read more Comment (0), Email this.

MR. SNOW: Let me get back to -- I used the phrase yesterday which is -- I said the President has strategic patience. There is a lot of impatience right now because you have violence in Baghdad -- you have the sectarian violence, recently described by General Abizaid as the worst he'd seen. You can understand at a time like that, when you also have ongoing hostilities that recently have ended in the Middle East, when you have comments coming out of Tehran and Damascus, you understand at a time like that that there's going to be some impatience, people want things to be solved quickly; so does the President. But sometimes these things don't happen overnight. You have to look for the right use of forces, in combination with policies that not only are going to solve the immediate problem, but also address the issues that gave rise to it, so that you don't have to fight this war again, so that you don't have to fight these battles again. That is the chief challenge. That's the way he looks at it. Peter. Read more Comment (0), Email this.

MR. SNOW: You tell me. I mean, again -- as I've also said, you don't do this by a clock. The President has practiced strategic patience. The term "The Long War" has been used. If you can tell me when terrorists are suddenly going to turn their swords into plowshares, we'll settle upon that as the date. Read more Comment (0), Email this.

MR. SNOW: I mean. I really don't know. I honestly -- I don't think anybody knows. Read more Comment (0), Email this.

MR. SNOW: Same way we've always defined it, which is when you have an Iraqi government able to sustain itself, defend itself, and govern itself. That has been the clearly stated objective of the President over and over. That's how you do it. I mean those are the metrics you're going to have to use. We're seeing some -- we now have an Iraq that has begun to govern itself through a government that involves parties from all over the country. We've seen increased ability to defend itself, but we are by no means there. Sustain itself also means that you've addressed the terror and sectarian factions where people are trying to make sure that their government fails. John. Read more Comment (0), Email this.

MR. SNOW: Yes. Read more Comment (0), Email this.

MR. SNOW: Well, at this point, let's first see how -- I'm going to kick the can down the road. Let me just be frank with you because we have to see what's going to be happening right now in this -- we put together the UNIFIL forces, and they started going in through different parts of Lebanon, and I think you have to see how that works to figure out how people make adjustments, if they're necessary or not. So I added those qualifiers just in case they do become necessary, don't know that they will. Read more Comment (0), Email this.

Q The budget deficit: CBO estimate out today says, Yes, it's coming down to $260 billion this year, but then will jump to $286 billion next year. And then over the next decade, the total deficit will be $1.76 trillion, even if the tax cuts aren't made permanent. Aren't things going in the wrong direction with the President? ... Read more Comment (0), Email this.

MR. SNOW: The answer is the President is working on keeping the economy growing, and the other thing is, go back and take a look at CBO estimates from last year or the year before. Go back to the Clinton years. It's an inexact science, and I'm not going to get into that whole methodology. The President is confident that we remain on a path to cut the deficit in half by his stated deadline, if not before, and the way you do that is by promoting government growth. The deficit declined in the '90s because we had a booming economy, and as the economy continues to boom, you're going to find revenues coming in and enabling us to close the deficit. The President still believes that. Read more Comment (0), Email this.

MR. SNOW: Who knows? The problem with it, it's like asking if the weatherman is right about next Tuesday. Economic prediction is always inexact. You use this as benchmarks for guiding policy. As you know we do our own estimates, and I'll stick with the OMB estimates. And I will let our number crunching guys, our econometricians go through the methodologies with you. I'm just not competent to do so. Read more Comment (0), Email this.

Q Tony, several pro-life groups have called on the President to withdraw von Eschenbach's nomination to head the FDA. They're concerned about his position on this Plan B abortion -- birth control plan. First of all, does the President stand by the nomination? And secondly, what is the President's view on that Plan B controversy? ... Read more Comment (0), Email this.

Q North Korea. The President of the Republic of Korea visits the White House next month, in part to talk about the six-party talks. Chinese officials are upset over the stalled talks. They feel the United States should be dealing with the issue of long-range ballistic missiles versus the issue of money laundering. ... Read more Comment (0), Email this.

MR. SNOW: Look, we appreciate the help the Chinese have given us, and we look forward to more help. They have considerable leverage over what goes on in North Korea, not merely by virtue of being a neighbor, but also of having the most extensive economic and energy ties with the government of North Korea. But our position is pretty clear, you got to do both. And we have already gone after counterfeiting activities on the part of the government of North Korea. But at the same time, the whole point of the six-party talks is to find some way to create a non-nuclear Korean Peninsula. The two are not exclusive aims, and the United States has not simply been going after one goal, but in fact, we've been trying to figure out ways to reintegrate the North Koreans into -- or to integrate North Korea with the civilized world. And the way we've done that is to say, come to the six-party talks, let's figure out a way to do this. If in fact we move to the nuclear-free Korean Peninsula, then there are a lot of good things that can happen, including all of these things. The Chinese know the point, and we stand by our policy. Read more Comment (0), Email this.

MR. SNOW: I believe we're confusing issues. What's happened is the North Koreans have walked away because they're doing money laundering to finance global terror. We don't want them to have money to finance global terror. Sorry, period. We don't think it's in our interest to allow them to be selling weapons that could be used to destroy innocent human lives. But the point on the six-party talks has been precisely to deal not merely with long-range weapons, but the ability to put nukes on top of them. And that is of mutual interest to both parties. So you're really talking about two different things. The North Koreans -- at this point, the North Koreans are trying to stall everything out so they can have the ability to do counterfeiting activities to support terror. As President of the United States, the President simply cannot say, okay, we'll wave that off. Instead, it's important -- and in the six-party talks, our allies have been helpful on this -- to stand together and say to the North Koreans, you got to behave. Read more Comment (0), Email this.

MR. SNOW: Yes. Read more Comment (0), Email this.

Q You said that he gave support to the war in Iraq because they were promised the road map. And if we look at the situation in the Palestinian territories right now, it's not good. It could possibly be argued, could it not, that he has a point, that, in fact -- not so much that where we are is the word that he used, but the situation is not great? ... Read more Comment (0), Email this.

MR. SNOW: Yes. Read more Comment (0), Email this.

Q Hezbollah are rebuilding south Lebanon, and the people in south Lebanon are very grateful for that. They're receiving apparently what they need, and they seem to be receiving what they need. They also feel, apparently, that Israel and the United States are responsible for what happened to them. Now, even though we are giving money, we're not seen to be giving money. The Saudis are not seen to be giving money. What, in fact, can we do to change that perception, given that perception of us is already negative? ... Read more Comment (0), Email this.

Q Thank you, Tony. I have two questions for you. During an interview with Mike Wallace on Sunday, the President of Iran seemed to imply that he was willing to engage in direct talks with the United States. Would the President Bush -- would President Bush consider such thoughts -- ... Read more Comment (0), Email this.

MR. SNOW: The President has already made it clear that the way forward with the Iranians is very simple: Renounce the enrichment and reprocessing-related activities, and we'll talk. That hasn't changed. Read more Comment (0), Email this.

MR. SNOW: You're getting into sanctuary law, and I'm not prepared to answer it. I'm just unfamiliar with the situation. Read more Comment (0), Email this.

MR. SNOW: Again, this is an annual deal and so this is part of the annual meetings with advisors. We've seen it -- we've had Defense and State; we've had the counterterror, and we'll have the economic meeting. Again, go back and look at something that happens -- but I'll tell you, part of -- one of the reasons you'll want to meet is you've got an economic record where we've had sustained growth, sustained job growth; we're beginning to see wage growth; we're beginning to see some moderation of inflation in the face of really significant energy price increases, of which the President is deeply aware and wants to find ways of addressing. And so you look at ways to try to make sure that there is continued economic growth at a time where we're getting to a point that economists think are pretty close to full employment. You see every month employment numbers are growing, and we have good employment numbers once again. But on the other hand, it's still important to keep creating opportunities for people that want to enter the job market. What we saw last month were more people who had been on the sidelines going in and looking for jobs. We want to make sure everybody gets off the sidelines and that there are opportunities for everybody, but that's what every President wants to do. Read more Comment (0), Email this.

MR. SNOW: No, because I haven't actually looked at the agenda yet. I mean, we'll get up there. But you can take a look at the participants, and I think what you're likely to get, at least if it follows what we've had this week, are briefings on where we stand and where we need to go. And you've got the Secretaries of Commerce and Labor, you've got the Treasury Secretary, you've got the HHS Secretary. You've got a lot of people who are going to be able to talk of components that have to do with economic growth. Again, I don't want to fib and pretend that I've seen the whole thing, but you can sort of connect the dots there. Read more Comment (0), Email this.

MR. SNOW: The formulation we have used is he supports an increase in the minimum wage that won't come at the expense of jobs. Read more Comment (0), Email this.

MR. SNOW: A number of things to do here at the top. First, the President's day. Let's see, he's just concluded a policy time. He is going to be going to York, Pennsylvania, for a tour of a Harley-Davidson Vehicle Operations facility. There will be a roundtable with employees on the economy, an interview with USA Today, a statement to the press pool. He will attend a Lynn Swann for Governor reception -- that will be expanded pool -- and arrive back at the White House at about 7:20 p.m. this evening. In addition, you probably know that United Airlines Flight 923 was diverted on its way back to Washington-Dulles from London's Heathrow. It landed in Boston. Apparently, there was a determination made by senior cabin crew and pilots about an unruly passenger, but the flight landed without incident. The Department of Homeland Security will have further developments as people continue to assess the situation. The President today granted pardons to 17 individuals, none of whom are still serving time, but these are largely for people who have served their time and this helps expunge their records. Also, the President is going to welcome Roh Moo-hyun of the Republic of Korea to the White House on September 14th. The alliance between the United States and the Republic of Korea is deeply rooted in common values and common interests. Together the two countries have stood against common threats and worked for the promotion of democracy, free markets, and universal human rights. President Bush looks forward to reviewing with President Roh progress and relations since their last bilateral meeting, on issues including our free trade agreement, negotiations in the six-party talks. The two leaders also will discuss critical regional and global issues, including winning the war on terror, stopping the proliferation of weapons of mass destruction, and promoting an open international economic order. There have been a number of allegations in the last few days by Democrats -- and I'll just read you one from Senator Harry Reid yesterday. "Five years after 9/11, al Qaeda has morphed into a global franchise operation. Terror attacks have increased sharply across the world, and the President has shut down the program designed to catch Osama bin Laden." This has become a fairly common refrain, so I thought I would take a couple of minutes to knock it down. It's flatly untrue. Now, what has happened is that the CIA, in response to exactly what Senator Reid was talking about, a more diffuse al Qaeda, has, in fact, reshaped its unit dealing with al Qaeda to reflect that diffuse threat. But the notion that the President has shut down a program designed to catch Osama bin Laden is utterly without foundation. It was a reorganization, not a reduction, in effort and commitment. The CIA's efforts to locate bin Laden and other senior al Qaeda figures has not been downgraded. To the contrary, it remains fully committed to locating bin Laden and his collaborators, and is devoting more resources, not less, toward the effort. The decision to reorganize, as I said, reflected changes in al Qaeda. And it's important to note that the effort to capture bin Laden is continuing unabated, and that the CIA's most experienced personnel working this issue remain fully engaged in the fight. Some of the people making the allegations about the bin Laden unit know perfectly well what the facts are, and you do, too. One other note: A number of newspapers today had -- or a couple, The New York Times and L.A. Times -- had pieces about the President's meeting the other day with Iraq scholars. Just a couple of nits to pick with the Times piece -- and I have spoken with the notetaker in the meeting, I was in the meeting, I've talked to others in the meeting and I've talked to all four scholars today, and all, to a person, take exception to a verb or variations of that verb that appear a number of times at the top of the piece, which is that the President is "frustrated." He's "frustrated" that the new Iraqi government and the Iraqi people have not shown greater support for the American mission. All the participants said that that did not reflect the meeting they attended. "A sense of frustration on the lack of progress on the bigger picture of Iraq, generally" -- again, all of those in attendance said that that did not reflect their characterization. And a paragraph that said, "The President expressed frustration that Iraqis have not come to appreciate the sacrifices the United States has made in Iraq and was puzzled as to how a recent anti-American rally in support of Hezbollah in Baghdad could draw such a large crowd." That was unanimously rejected, as well. Now, as I've said in the past, we tend not to go into detail about what these conversations -- what the people discuss, and I will continue to do that. Obviously, they're free to discuss what they had. But there were two pieces, and one I think did more -- at least reflect in accordance with my notes -- and I tried to be careful about this and tried not to ask leading questions, but I did talk to the four scholars and four others who were involved in the meeting, and all shared the same reflections, and their notes reflected these same points of view. And with that, let's go. Jennifer. Read more Comment (0), Email this.

MR. SNOW: Well, no. I would hesitate to leap to conclusions about what the Lebanese government is and isn't doing. Prime Minister Siniora will be, in fact, delivering a speech I think tonight on the topic. And you've got to understand that right now you've got a new situation; the Lebanese armed forces are still preparing to begin to move south and it is going to be their job eventually to make sure that Hezbollah is disarmed and is no longer functioning as an independent militia. And we expect that to happen, but it's going to take some time. You've seen all the stories about people simply -- right now trying to assemble the UNIFIL force. And that will take time, not merely because nations have to make contributions, but specific kinds -- task-specific delegations of troops. For instance, some are going to be doing customs, some are going to be doing mine removal, some are going to be doing operations in support of the armed forces and so on. It requires a bit of time to get all those pieces put together. But it's important to realize that the Lebanese government will be in charge if disarming Hezbollah, and we expect that to happen. The Lebanese, with U.N. help, will be working on the border. As I said, that's a customs function. And the business of reconstruction also has to take place. And that is going to be the primary focus of what the Prime Minister has to say to the country -- at least according to our understanding. Read more Comment (0), Email this.

MR. SNOW: I don't want to get too much into conversations we've had, but the general answer is, yes, that the Lebanese government understands the importance of making sure that you don't have what amounts to a de facto competitor in the form of Hezbollah operating independently. I think one of the things to note is that for the last 30 years, there has been little or no Lebanese armed forces presence in southern Lebanon. It's been either Israelis or Hezbollah. And it's going to take time for the forces, once again, to be able to move there and to get the lay of the land and be able to operate effectively. And that's one of the reasons why also we deem it necessary and appropriate to have UNIFIL forces assisting. Bill. Read more Comment (0), Email this.