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SENIOR ADMINISTRATION OFFICIAL: Good morning. As all of you know at this point, the President approved yesterday afternoon revisions to Executive Order 12333. I'd like to give you a brief road map of what we'll do while we're chatting with you this morning before we turn to your questions.

I'd like to say a word about the background to this executive order. Some of you will be familiar with it; others may not. Highlight a few significant points or points that we believe are significant about the actions taken by the President, summarize the process that led to these specific revisions, because there's been some interest in that, and then I'll talk very briefly about some of the structural changes that you'll find when you have an opportunity to review the order in its Part 1.

Now, some of you will be familiar with the structure of this executive order, but it contains three parts. Part 1 is where a number of the intelligence community structures are described; the relationships and roles and responsibilities of various senior officials in the intelligence community. In Part 2, this is where you'll find the longstanding and extremely significant protections for Americans' civil liberties. And then in Part 3, you'll find a series of definitions that largely track the statute.

I would say at the outset that this is an exceptionally complex executive order. I'm not sure -- depending on how you print it, it's either 26 or 28 pages, single-spaced. It's a foundational document for the intelligence community. So it may be that some of your questions we're not able to address completely here today, but we'll take those back and get you responses after we've had a chance to look further. We may also refer you to the Office for the Director of National Intelligence or the Justice Department for more detailed explanations in areas where they're going to be expert in how the order will be implemented.

The background, I think, most of you will know by now. This is a 1981 executive order signed by President Reagan. It's been amended two times during this administration, I would say to make technical adjustments, principally. So this is the first significant adjustment in the executive order in several decades.

With the passage by the Congress and signature by the President in the fall of 2004, the Intelligence Reform and Terrorist Prevention Act -- significant provisions in this executive order became out of date. And so one of the things we'll stress, that it was absolutely necessary to revise and update -- modernize this order. And that's of course one of the reasons we undertook it.

The objectives of the order are fairly simply stated in the text itself, but as I said, it is a foundational document. It has a daily and significant impact on the activities of the intelligence community and the relationships in that important community. At the highest level, of course, the aim here is to create a more effective intelligence community, where these 16 agencies can be better integrated, work more collaboratively with one another, and also share more information freely. And these are themes you'll recognize from the reports of the 9/11 and WMD commissions, and also themes that the Director of National Intelligence Mike McConnell has stressed repeatedly in public remarks and appearances before the congressional oversight committees.

At the end of the day, though, we don't want to lose sight of the fact that the goal of all of our nation's intelligence activities is to provide the President with information that's accurate, timely, and presented to him in a useful form that allows him to make better national security decisions.

So the question that's arisen that we'll take on up front is, why do this now? There are a number of reasons -- I think all combined they make a compelling case, but we'll be happy to take your questions on it.

The first, as I mentioned, is the order was simply out of date. It needed to be updated to conform to the new intelligence structures, to the intelligence reform law passed in 2004, reflect the roles and responsibilities of the Director of National Intelligence, and also provide implementing guidelines for a number of the recommendations from the 9/11 and the WMD commissions.

Another reason why it's taking place at this point is frankly we have three years of experience under our belts with the new structures under the IRTPA, so we've had an opportunity -- with, of course, the advice of Director McConnell, to judge where we've made progress, where we've been slow in making progress, and to make adjustments and clarifications that can help push these important reforms forward.

Another not insignificant point I'd mention to you is we have a fairly unique set of advisors at senior levels of the national security establishment right now with many decades of intelligence experience. Obviously, Mike McConnell is a superbly qualified director with decades of experience, leadership experience in the intelligence community. He's worked closely throughout this process with Secretary Gates, with a distinguished -- obviously a distinguished intelligence community background. The Under Secretary of Defense Jim Clapper, who's led a number of agencies in the intelligence community, and General Mike Hayden, who's, of course, doing a superb job leading the CIA.

So these four advisors really played a key role in developing these revisions to the executive order. And their presence on the President's national security team made this all the more important to do now.

Finally, I'd remind you that the IRTPA itself in section 1018 directed the President to issue guidelines concerning how the Director of National Intelligence would implement his authorities -- in particular, to ensure that nothing he did in that regard would abrogate the authorities of other department heads. So, in our view, these guidelines satisfy that requirement and constitute those guidelines.

Maybe the most important thing I can say is that, of course, the President is anxious to institutionalize a number of important tools that he and his successors are going to need to fight and win the war on terrorism. Recently passed the new FISA legislation, which was an important milestone, and ensuring that our intelligence community is organized correctly and as effective as it can be is another significant step in that direction.

With respect to the process, I think it would be unfair to say that this process either started this summer or was rushed to completion this summer. Rather, this all started early last fall with a project within the intelligence community in the Office of Director of National Intelligence, where they consulted with their intelligence community colleagues and developed a set of recommendations that they brought forward to the National Security Council.

It's been an extensive interagency process over many months with all of the relevant agencies participating fully. We've had good discussions, as you would expect; lively discussions as well. The principals, including those individuals I named earlier in the call, have been extensively involved in all of this, solving some of the hard problems, and literally met, discussed, and played a role in resolving issues at every stage of this process.

Finally, the President, of course, authorized these revisions, authorized the process, and was involved in every stage leading up to his approval yesterday afternoon of the final revisions.

Another point I would highlight to you is that because this is such a complex area, these relationships are complicated, the work they do is important, these revisions have truly been in the hands of intelligence professionals almost from the start, right up through the principals where you had these very extremely experienced individuals providing the President advice. So, for all of those reasons, we felt it was necessary to take this opportunity to revise, update and modernize the order this summer.

The last several weeks, I would just note we've been engaged in conversations with the relevant committees on Capitol Hill, a series of calls, staff-level briefings. I believe Director McConnell is appearing today before the House and Senate intelligence oversight committees to answer some of their questions in this area.

Although there's been a -- frankly a flurry of discussion and conversation with the Congress over the last several weeks, I would highlight to you that we've literally been in a conversation with the Congress and with the American people about the functioning of the intelligence community since the fall of 2004. I would direct you to a February session that Director McConnell had with the Senate committee, specifically on his authorities, the progress being made towards implementing these intelligence reforms. The issue was also raised at Secretary Gates's confirmation.

And today we've received relatively positive, favorable reviews from our engagements with the Congress. They think we're doing the right thing, and we believe we are as well.

I want to say a couple of words about some of the pieces of Part 1 before I turn it over to a colleague who will address the provisions that you'll find in Part 2 of this order. First I would ask you not to overlook the preamble. There's some very significant activity in the preamble of this executive order; some of it consistent with the original executive order, certain parts of it new.

But most importantly I'd say the President is charging his intelligence community to use all reasonable and lawful means to gather the information that we need to protect the nation. And also we've highlighted in the preamble the fact that all of the intelligence activities authorized by this order are to be undertaken in a manner that protects the constitutional rights of Americans. That's extremely important to us.

The second piece I'd draw your attention to -- and I apologize if you don't have a copy of the order in front of you; you will shortly -- in the goals section, you'll note there's a specific reference to the intelligence needs of state, local and tribal elements. This is an example of something that's changed, an important reform and recommendation coming out of the 9/11 and WMD commission, the work of the WMD and 9/11 commissions. And so it specifically called out that the work of the intelligence community is to take account of their needs.

And next I'd direct you to section 1.3 of the executive order. That's where you'll find a delineation of the authorities for the Director of National Intelligence. There are 24, in some cases detailed, provisions under that section. In each case, the Director of National Intelligence is either told he "shall" or he "may," depending on the topic, undertake certain activities.

Now, you'll want to spend some time looking at these, because they are complicated and it's very much the core of the executive order. I'll highlight just a few to you here today before we move on to Part 1.

The first is, in 1.3(a)(1), you'll find that the Director of National Intelligence is authorized to play a role in defining the term "national intelligence," what constitutes national intelligence. This was a new term coined in the intelligence reform law in 2004, and it allows the Director to issue guidelines that will tell the rest of the government when information pertains to more than one agency, which is the statutory definition.

The Director is also authorized to issue guidelines for the intelligence community obtaining access to that information, whether it resides in an intelligence community agency or outside of the intelligence community. And with respect to intelligence community access to information that doesn't reside in the intelligence community, other agencies in government that might be useful for intelligence analysts to have, the Attorney General will be approving those guidelines because it might pertain to U.S. persons or other protected information.

Second area I'd direct your attention to is in 1.3(b)(12); the Director is given the flexibility to appoint functional and mission managers. This is an important management tool within the intelligence community. And while the Director may exercise his discretion to appoint these functional mission managers, the President acted in this order to actually name three of them.

The CIA Director is named as the functional manager for human intelligence, HUMINT. The NSA Director, of course, as he has been, is the functional manager for signals intelligence, or SIGINT. And the Director for the NGA is appointed the functional manager for geospatial intelligence.

Next, I'd turn your attention to 1.3(b), sections 20 and 21. These are important provisions regarding the coordination of intelligence activities. The first thing I'd highlight to you is that the overall responsibility for ensuring that intelligence activities, whether they are undertaken in the United States or overseas, are de-conflicted, coordinated and integrated, rests with the Director of National Intelligence; core responsibility essential for the efficient functioning of our community.

Underneath that overall responsibility, you'll find specific roles assigned to the FBI and the CIA in human and human-enabled collection of intelligence in the United States, in the case of the FBI, and a parallel responsibility for the CIA overseas. And you'll note that's consistent with the section regarding the CIA Director's responsibilities in the IRTPA.

In section 21, the Director of National Intelligence is directed to work with other department and agency heads to ensure that the activities of our intelligence community, overseas and domestically, are de-conflicted, coordinated and integrated with the activities, related activities of non-intelligence community entities. And this will be one of many areas where the DNI will be directing his attention in the coming months to develop and issue guidelines that respond to this direction.

The next section I'd turn to -- and we're almost finished with the fast sweep through Part 1 -- is in 1.3(c). That's the issue that addresses issues in the IRTPA section 1018 concerning the fact that the DNI, in exercising his authorities, is obligated to respect and not abrogate the authorities, statutory authorities, of the department heads.

And what we've done here is repeated a statutory restriction in that regard, and then created a procedure by which the Director can go forward with important guidelines that he feels it's important to issue, new procedures he needs to put in place to better integrate the intelligence community, and then allow a department head, if he feels that some action, some guideline, some procedure by the Director impairs his statutory authorities, to raise that with the Director, the National Security Council, and ultimately the President. And we think this construction will allow the Director to move out relatively expeditiously with some of the important reforms that need to take place for the community to go about its business more collaboratively in a more closely integrated manner.

Finally, an area that's gotten some attention I know in the press that we saw this morning, and that concerns the Director's authorities with respect to appointments and removals of senior intelligence community officials. You'll recall the IRTPA assigned the Director a certain role in the selection of certain intelligence community senior officials. Those are by and large replicated in this section. You'll want to read it very closely. It was an area where we spent a good bit of time and it's somewhat complicated, so work your way through it slowly, and if you have questions we'll probably refer you to the Office of the DNI for more detail.

But what you'll notice is different about this over and above what you'll find in the intelligence reform law is that the Director is also given a voice in the removal, when that proves to be necessary, of senior intelligence officials. This provision also addresses the position of the Under Secretary of Defense for Intelligence, which was not referred to in the IRTPA.

And then the last thought I'll leave you with on the appointments and removals provision, and what required a lot of the very complicated construction that you'll see in the text is that most of these appointments actually -- and the removals -- actually reside with the President. So the Director of National Intelligence is really making recommendations to department heads and toward the President with respect to who's selected to occupy these positions and whether they should remain in their posts. And so I draw your attention to that when you have a chance to look at the text.

I have a colleague with me today who would like to go through some of the key points of Part 2 of the order. SENIOR ADMINISTRATION OFFICIAL: As mentioned in the introductory part of the call, Part 2 of the order is the portion that sets forth direction for the conduct of intelligence activities, and there specifically provides direction regarding the protection of rights of U.S. persons.

When you take a look at the order and compare it to the 1981 original 12333, I think you'll find that there were very, very few changes to Part 2 of the order. The revised order, as with the original order, affirms that all U.S. intelligence activities must be conducted in a manner that protects American civil liberties and privacy rights. The longstanding protections and safeguards, in other words, that are in place or that were in place and have been in place in the original executive order remained unchanged in this revised order.

The order, you'll note, on a more specific level, requires the Attorney General to approve all procedures regarding the collection of information on U.S. persons. That's not only in Part 2 of the order, but you also see very similar provisions broadly worded up front in the executive order, section 1.3(a), as well as in the Part 3 of the order -- 3.2, I believe, in particular.

Part 2 of the executive order also maintains the existing ban on assassinations, as well as preserving existing limits on human experimentation.

Finally I'd say that Part 2 also makes clear, as did the original order, that all statutes have to be complied with when the intelligence community is undertaking activities governed by specific statutes. So, for example, if the intelligence community is undertaking activity governed by the recent amendments to the Foreign Intelligence Surveillance Act, the intelligence community is obligated to comply in full with all of those statutory requirements and the procedures contained therein.

Part 3 of the executive order is the final part, and that, like its predecessor, or the original 12333, sets forth definitions and general provisions. A lot of the definitions have simply been updated to reflect what was enacted into law in the 2004 Intelligence Reform Act, and otherwise, with respect to Part 3, there have been no significant changes over the 1981 order.

So just to step back, I think if you were to set the two orders side by side, you would note that the overwhelming majority of the work done in this executive order has been done to Part 1, as was outlined. Part 2 remains essentially as it was issued in 1981. All of the procedures and protections that were in place remain in place, regarding privacy and civil liberties. And Part 3 is a general section updated to reflect Congress's 2004 statute. MS. BERGMAN: Operator, that concludes our opening remarks. We're now ready to take questions. Read more Comment (0), Email this.

MS. BERGMAN: These two senior administration officials have gratefully agreed to speak to you on matters of intelligence, on the new executive order. If you would like to follow up with Gordon Johndroe after this call to discuss it further, he's more than willing to talk to you about that. But for the purposes of this call, we'd like to at least continue it for the rest of the reporters on this on this call, so please proceed with your question. Read more Comment (0), Email this.

Q All right. On the matter of civil liberties, I think one of the concerns that you're going to

SENIOR ADMINISTRATION OFFICIAL: I think what we would say to that is that the executive order reaffirms the nation's longstanding commitment to protecting civil liberties. It maintains all of the protections that are in place to do so. It requires that all procedures have to be approved by the Attorney General.

With respect to the terrorist surveillance program, I'm really not going to speak in any detail to that. The administration has spoken to it previously. I'd observe that -- and I'm going to leave it at that on that question. Read more Comment (0), Email this.

Q Can you speak to reports about the role the National Security Council is going to play in covert

SENIOR ADMINISTRATION OFFICIAL: Yes, I'd be happy to -- if you'll give me a second here I'm flipping through my well-thumbed copy of the executive order text. I think you're going to find on examination that there's no basis for that report. I did see it this morning and I will quote to you from section 1.2 of the revised executive order approved yesterday; it states that "the NSC shall perform such other functions related to covert action as the President may direct, but shall not undertake the conduct of covert actions." I think that's about as clearly as we can state it.

In the covert action area, you'll find it addressed in three sections. The section I referred to where the National Security Council's role and the President's role are elaborated, the conduct of covert action activities as in the law, as in the previous executive order and as in practice over many decades, is assigned to the Central Intelligence Agency; and finally, a role for the DNI in providing advice to the President regarding covert actions, and also in the oversight of the conduct of covert actions is included in section 1.3(b).

So I would encourage you to take a very close look at the text of the order. There is no change contemplated to the role of the National Security Council in regard to covert action. Read more Comment (0), Email this.

MS. PERINO: We are on our way to Kennebunkport, Maine. We are halfway through the day, so sorry we're getting this a little bit late, but I think it worked out better in the end. He had his normal briefings this morning, and you know he had his statement on Iraq. He had the event with the Scouts in Action commendation. The President then gave his speech at the West Virginia Coal Association, so you have that.

Congressman Nick Rahall did travel up with us. I don't know if you had a chance to see him, but he visited with the President in the President's office on the way up there.

And I have a couple of announcements. I'm going to make the delegation announcement for the Olympics. The President, Mrs. Bush, and Ms. Barbara Bush will attend the Opening Ceremony at the Olympic Games in Beijing, China on August 8, 2008. They will also be accompanied by an official delegation that includes the following people: The Honorable George H. W. Bush; T. Randt, Jr., United States Ambassador to the People's Republic of China, and his wife Sarah; Mr. and Mrs. Marvin and Margaret Bush; Mrs. Doro Bush Koch; and Mr. And Mrs. Roland and Lois Betts; and finally, Mr. Brad Freeman.

One thing that I've been asked about a couple of times this week and said that we were checking into was the CPSC bill -- the Consumer Product Safety Commission bill. We have had a chance to review it. I can announce to you today the President will sign that bill. We are committed to ensuring that the products that come into America are safe for consumers and that the regulating agencies have what they need in order to do their job. Fortunately, Congress made headway on some of the concerns that we had expressed and so that we are pleased that they included some of our suggestions, and especially from the action plan for import safety -- that was, I believe, from -- that Secretary Leavitt put forward.

We still have a few concerns, but not enough that would keep us from signing the bill. So the President will sign that as soon as they can get it to us.

I also was going to give you some proactive reaction, if that can be done, on -- there's a district court decision in a case today that regards a civil lawsuit regarding compelling testimony from Harriet Miers and Josh Bolten in front of Congress. The decision that came down, it ruled against us. We disagree with the district court's decision; we are reviewing it, and once we have had a chance to do that, we'll consider whether the decision should be appealed. And then I can update you from there.

A couple of things to note: The court did not rule on the executive privilege claim. It did not order anyone to testify on privileged matters, and it did not order anyone to produce privileged documents. It did not decide that senior advisors to the President are not entitled to immunity from compelled testimony under any circumstances, and specifically mentioned national security and foreign affairs matters as possible areas in which immunity might be available. The court did not order the executive branch to produce a private log describing documents withheld on executive privilege grounds in response to Congress's subpoena. In fact, the court held that he lacked authority to order production of a privileged law in response to a congressional subpoena.

So the court has merely directed the executive branch to produce a log as part of this litigation to assist the court in deciding which, if any, documents are subject to a claim of executive privilege.

I just give you all of that because, even if you're not writing it, I think your folks back at your bureaus are. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: Certainly. Read more Comment (0), Email this.

MS. PERINO: No. I don't believe so. Read more Comment (0), Email this.

Q I don't think the report says -- the report says that "covert action will be carried out by the

SENIOR ADMINISTRATION OFFICIAL: No. The National Security Council continues to play an important role in overseeing covert action activities, in reviewing new proposals for covert action activities, making necessary modifications to existing covert action activities -- all in the manner of providing advice to the President, who retains this authority ultimately. Read more Comment (0), Email this.

MS. PERINO: I think that's central in the -- to the case. Read more Comment (0), Email this.

Q I have a question about the provision saying all the undertakings have to be governed by statute

SENIOR ADMINISTRATION OFFICIAL: No, I don't think so. The point that -- I don't believe so at all. I think the point that we're trying to make there is when there is a specific statute that governs a particular activity -- for example, the collection of certain business records or financial records or the conduct of electronic surveillance -- the Congress, as many of you know, has put in place various statutes, some of them quite elaborate, to govern the conduct of those activities. And the intelligence community, when engaged in such activities, has to fully comply with those statutes. I don't believe there's any change at all on that front. Read more Comment (0), Email this.

MS. PERINO: Well, I would need to go back and check. I thought that we had. I see what you're saying. I believe that the court says -- Read more Comment (0), Email this.

Q Oh, hi. Thanks very much for doing this. I thought the CIA Director was -- I had a couple of questions

SENIOR ADMINISTRATION OFFICIAL: No, I think you're right. But I can provide, I hope, a useful clarification. Read more Comment (0), Email this.

MS. PERINO: I believe that what the court says is they ruled against us and that you have to appear. It doesn't mean that you lose your executive privilege capabilities, but you have to appear. And the question is whether you have to appear or not. I think that's what it comes down to. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: There is no question that as the agency that includes the National Clandestine Service, and within internal intelligence community directives and guidelines, the Director of the CIA plays that role with respect to human intelligence.

What we're doing here in this executive order is the President is affirming that role, that the CIA Director will be the functional manager for human intelligence. And one of the requirements going forward for the Director of National Intelligence is -- through guidelines and directives -- is to flesh out what it means to be a functional manager, what it means to be a mission manager. But these were three important intelligence disciplines where we had clear leaders identified, and the President took the action to identify them as functional managers in this order.

So you're right. In practice, perhaps not much of an immediate change, since he's played that role within the intelligence community for some time. But this is being affirmed in an executive order signed by the President. Read more Comment (0), Email this.

MS. PERINO: I think so. I believe so. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: Not at all. I'd really encourage you to take a look at Part 2 of this order, and literally, to compare it. Read more Comment (0), Email this.

MS. PERINO: Right. And I will double-check that with the lawyer, with our lawyer back home. But in the meantime, DOJ can. But I believe that's what it is. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: You will, in short -- you will in short order. Read more Comment (0), Email this.

MS. PERINO: I don't think we had because we believe that they weren't subject to testifying in front of Congress. So we don't have to invoke it unless you go up there. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: I feel confident telling you, though, when you do have that opportunity and set them side by side, that you will see that all of the protections that were in the original order remain in the order signed by the President yesterday. I also think that you'll see the importance placed on protecting privacy and civil liberties underscored up front in the order, in Part 1, and a provision that's been added to Part 3 to underscore the importance of the Attorney General approving procedures for the conduct of all the intelligence activities. That, of course -- that mechanism, of course, is one precisely designed to protect the privacy and civil liberties of U.S. persons. SENIOR ADMINISTRATION OFFICIAL: I may add one point here simply because I realize we neglected to mention it earlier in our -- when we were making opening remarks. Many people associate this executive order with the assassination ban and also the ban on human experimentation, and if we didn't mention it you should know that those provisions are unchanged, carried over from the existing executive order, and they appear prominently in Part 2 of this order. So there's no change in that area. Read more Comment (0), Email this.

MS. PERINO: Counsel's Office. And then, of course, the Justice Department, the lawyers there. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: I would say we think this executive order clarifies the authorities granted to the DNI in the 2004 intelligence reform law in areas where he thought clarifications were necessary for him to further integrate the intelligence community. I don't think there's much benefit to be had by trying to evaluate whether they were strengthened, and if so by how much; rather, this has been a tremendously constructive and collaborative process where policy agencies came together to provide the Director with a clear statement of the authorities they think he needs to lead a better integrated intelligence community, and he's fully satisfied with it. So they've certainly served his needs. Read more Comment (0), Email this.

MS. PERINO: I would assume so. Sometimes it takes a while for them to be able to review it all and make a decision. But we disagree with it, and I'm not going to prejudge a decision whether or not to appeal. Read more Comment (0), Email this.

Q Thank you. Can you say how you worked out the issue of the DNI rep in overseas missions? Will

SENIOR ADMINISTRATION OFFICIAL: I appreciate the question; I'd seen some earlier media attention to that issue. Frankly, it's not discussed in the executive order. It came up only indirectly in our interagency discussions, and specifically in the area of coordination of overseas intelligence activities.

And so, as I outlined for you, the Director of National Intelligence has the overall responsibility for ensuring that we have a network of relationships, guidelines, procedures in place that all of our intelligence activities overseas and at home get coordinated, get de-conflicted, and get integrated. And then the CIA, through its representative overseas, is assigned a specific role relating to human-source activities and collection of information through human means. And the FBI has that responsibility here in the States.

So, no, there's nothing in the order that you'll find that addresses who oversees, for example, is that the DNI's representative or who is the CIA Director's representative. And I'd refer you to either the Director of National Intelligence or the CIA, if you want to talk more about that. But it's not addressed in this order. Read more Comment (0), Email this.

MS. PERINO: Well, the President is going to continue to talk about energy, yes. And I think that Republicans and Democrats across America are going to continue to talk about it, because if you look at all of the signs that the American public opinion -- where it's moving on these drilling issues, or looking for sources here in America in environmentally friendly ways, I don't think it's going to go away. We have said that the high prices that people are paying at the pump are not something that can go away overnight, so people are going to be living with this.

And increasingly, Americans are more educated about the need to add more supply to deal with the rising demand that's happening around the world. So the President will continue to talk about it. But I think, more importantly, constituents are going to start pushing Congress to try to get them to do more.

All we've asked this week is for Congress -- the Democrat leaders in Congress to allow for a vote. And they haven't done that. It looks increasingly likely that they'll skip town and go home on vacations and campaigning, and not actually deal with this one central question, which as we've said, would not have immediate impact, necessarily, on prices -- we don't know, and our market prognosticators -- but what it would do is send a signal that we're serious about trying to find more of our own resources here. And if we had done this 10 years ago, today's outlook might look very different.

But of course, the President is going to be in Kennebunkport this weekend, and then he leaves for his Asia trip on Monday. I'm sure in his bilateral meetings he'll have with the President of South Korea and then again in Thailand and China -- the issue of high energy prices is not something just Americans are facing, it's something that the whole world is facing. And so we'll update you on the road, but I believe that he'll be talking about it there, as well. Read more Comment (0), Email this.

Q Well, it's not addressed explicitly. But do the authorities given to the DNI in that regard that

SENIOR ADMINISTRATION OFFICIAL: That's an interesting question. I will refer you again to the Director of National Intelligence for the facts. But as far as I know, the Director has in fact appointed in several instances representatives overseas to serve as his representative. In specific, people assigned to the various military commands overseas serve as the DNI's representative. In, I think -- and check my facts on this -- 100 percent of other cases the DNI's representative in a foreign capital is the same person as the Director of Central Intelligence Agency's representative, we know is the chief of station. Read more Comment (0), Email this.

MS. PERINO: Yes. As you know, he met with the leader of Abu Dhabi, and he'll meet with this leader this weekend. It's a private and I would say important meeting, but also casual. These are our hosts from when the President went to UAE in January. He had a fantastic time when we went to the dinner in the desert. But he also is very intrigued by their work to modernize their economy. So I'm sure they'll talk about that. I'm sure they'll talk about the issue of energy. Counterterrorism cooperation is always a big topic when it comes to talking with an ally like that. So it will be a range of issues like that. Read more Comment (0), Email this.

Q Hi. One housekeeping issue, I just wanted to join Pam Hess's protest that it's being done in background

SENIOR ADMINISTRATION OFFICIAL: To my understanding that's not the case. You should check this with the Director of National Intelligence. These are people that he appoints to various positions. But as I understand it, there are in fact some non-CIA personnel assigned as the DNI's representatives to military commands.

But there are no instances where the past or the current DNI has appointed as his senior representative in the field somebody other than the CIA chief of station. Read more Comment (0), Email this.

MS. PERINO: I think consumers are well aware that they're paying higher prices at the pump. But I believe that they also understand that the root causes of supply and demand is what's leading to these higher prices. So a couple of things need to happen. Here in our own country we have to start looking for more of our own sources, and in ways that don't get bogged down in litigation.

As you heard the President say today, when it comes to trying to do new energy projects your capital can get tied down for years and you won't be able to produce anything -- energy, whether it's for electricity or for your vehicles.

At the same time, we need to be looking for new technology that will give us more efficiency for using less of what we need. And the third track is finding renewables or alternatives to the traditional oil and gas and coal that we've been using. Coal we want to continue to use. We've figured out ways to do that in a clean-burning way. What we would ask the private sector to do is to reinvest to help build these new technologies and to look for these alternatives and these renewables, and to help us find the technologies that will help us be able to use less.

And I think if you look to what the private sector is doing, they are responding to the market. And one of the things that consumers have proven is that they will adjust their habits and they will drive less if prices continue to be as high as they are. So the market is working in that respect. Read more Comment (0), Email this.

Q I got you. And so when you say "the military commands," that is not -- we are not referring, for

SENIOR ADMINISTRATION OFFICIAL: Not that I'm aware of. Read more Comment (0), Email this.

MS. PERINO: I'd actually refer you to the comprehensive plans that we have. And if you -- in fact, I would go back and look at that -- just for kicks this weekend, if you have a little extra time, go back and look at that 2001 energy document that the administration put forward. It talks about almost all of these issues: more nuclear power, more clean-burning coal, more wind power, solar power, renewable energy like ethanol and cellulosic ethanol, as well as finding more of our own traditional sources like in ANWR or the oil shale or out on the Outer Continental Shelf.

So we have a comprehensive plan. It's also been reflected not just in the document in 2001, but in every sequential budget that the President has had. I think in almost every State of the Union he's talked about these issues. So we're going to just keep pushing on that. And Congress has had in front of it lots of these issues -- for example, on the oil refinery issue, one of the President's ideas was to use closed military bases to site these new refineries, since we haven't built one in America since the 1970s. There's lots of little pieces that add up to this comprehensive plan that the President was talking about.

But you're asking me if there's new policy to be announced. I think we've announced a lot of it along the way. We're just waiting for Congress to act. We've acted where we could, from the executive branch standpoint, but we need Congress to do their job, too. Read more Comment (0), Email this.

MS. BERGMAN: Please follow up -- and this goes for anyone on the call -- please follow up with Gordon Johndroe after this call on that matter. Thank you. Read more Comment (0), Email this.

MS. PERINO: In the fourth quarter of last year? Read more Comment (0), Email this.

Q Oh, yes, just following up on your earlier point about Congress's role and the public's role in

SENIOR ADMINISTRATION OFFICIAL: I've not seen Chairman Reyes's statement, so I think we'll not respond on this call. Give us chance to read it, and if you want to get back in touch with Cynthia and her folks later today, we may comment on that. But I haven't seen it, so I'm not going to speak to it. Read more Comment (0), Email this.

MS. PERINO: I don't think any of the analysts are saying that, necessarily. But I think what it does show is that -- if you look back, we were very transparent that we expected flat growth in the fourth quarter of last year. We ended up with the initial reports being at .6. Now it's revised back down. Read more Comment (0), Email this.

Q I just wanted to sort of follow up on James's question, because in speaking with some people yesterday

SENIOR ADMINISTRATION OFFICIAL: Well, only to repeat what I said earlier. We have spent specifically on the provisions in the draft executive order the better part of the last two or two and a half weeks dealing with multiple committees on the Hill -- at the staff level, at the member level, making experts available to provide briefings.

So we've dealt with, for example, the intelligence oversight committees, the armed service committees, the international relations and foreign affairs committees, the homeland security and government affairs committees. We've addressed these issues to the leadership. There have been countless, countless hours by dozens and dozens of people who've been involved with this process -- discussing, reviewing, and walking through the provisions of the order -- various staffers, rooms full of staffers. Read more Comment (0), Email this.

MS. PERINO: Well, I remember believing -- I remember believing, and I believe I said, that we were expecting growth to be pretty flat. And we were pleased -- Read more Comment (0), Email this.

Q Right, but I think that what they're saying is that they weren't consulted; it was just presented

SENIOR ADMINISTRATION OFFICIAL: Well, I won't speak to that. I know we made a concerted effort to reach out to folks on the Hill because of the fact that they have a keen interest in this, and should, and because in the fall of 2004 when we were discussing the then-drafts in conference of the Intelligence Reform and Terrorism Prevention Act, we committed to doing that, specifically with respect to the guidelines under section 1018. And we feel that we've met that obligation. MS. BERGMAN: Operator, we have time for two more questions. Read more Comment (0), Email this.

MS. PERINO: Well, we can go back and check the transcripts, but there's -- nobody was saying that we expected big growth in that quarter. And I think actually people were quite -- not surprised -- not pleasantly surprised, but pleased that we were at .6. So now it's revised back. I mean, that happens.

But since then, you've had three quarters where we see a trend going in the right direction. A couple of reasons for that is the President recognized this problem early in the fall last year and worked to address it. When it looked like we needed an even bigger emphasis on the stimulus package, the President came back from his Middle East trip and worked with the leaders in Congress on a bipartisan basis and got it passed. And now we're seeing that stimulus package actually have an impact.

Now, the housing crisis has lasted longer than any of us would like, but we hope that this housing bill will be able to help us send a signal to the market to increase stability, confidence in the market, to help pull us out of it. In addition to that, I think nearly all of the stimulus checks are out, and the retailers are showing signs of renewed vigor in their sector.

But there's no doubt that the energy prices are a drag on this. And so we are going to have to keep working at it.

Okay? Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: I think this is -- thank you for asking the question. I think this is an area where there has been some misunderstanding, and I would refer you to a careful review of the text of this executive order, as well as the law itself. In the law and in the executive order -- and I don't have that page in front of me right now -- the Director of National Intelligence is assigned responsibility to provide strategic management, oversight, direction -- you'll have to check the words -- in the conduct of U.S. government relationships with foreign intelligence and security services.

And consistent with those -- that strategic guidance and those -- that strategic framework, the Central Intelligence Agency in the law and this order is assigned the specific responsibility for the conduct of those foreign liaison relationships, and also the coordination of engagement between other intelligence community elements and those foreign security services.

So look very closely at the structure. It's the same in this executive order as it is in the law -- a role defined at the strategic level in managing such relationships for the Director of National Intelligence -- but the actual conduct of these relationships and the coordination of dealings with foreign security services is charged with the CIA. Read more Comment (0), Email this.

MS. PERINO: I will gaggle tomorrow, probably around 10:30 a.m. Read more Comment (0), Email this.

SENIOR ADMINISTRATION OFFICIAL: None. SENIOR ADMINISTRATION OFFICIAL: If you take a look -- I can add to that -- if you take a look at the 2004 reform act, you'll find it -- you'll find this particular provision that my colleague was referring to in section (k) of the section that delineates the authorities of the DNI. So it's 102(A)(k). Read more Comment (0), Email this.

MS. PERINO: Well, there's nothing public yet, so we don't have anything -- no public events on the President's schedule. But we'll keep you updated as things change, because sometimes that's the way it is up here. He's looking forward to coming up to Maine to be with his family. His mom and dad are here, his brothers -- his brother and sister I believe will be here, as well. At least one brother that I know of. And they'll spend some time getting together. They'll hopefully be outside if it doesn't rain and spend some time in his last summer that the President is President of the United States. Read more Comment (0), Email this.

Q I just wanted to double-check, is there anything in this executive order that specifically addresses

SENIOR ADMINISTRATION OFFICIAL: No, there are none that I would direct you to. I mean, of course, it's critically important in the current arrangements under the IRTPA to have the FBI playing a significant role in the collection, dissemination and analysis of intelligence, and that's outlined in the executive order as a responsibility for the Director of the FBI. And then similarly, as I mentioned earlier, a role in coordinating intelligence activities in the United States that involves human sources or human-enabled means, is also set forth in section 1.3(b).

But, no, I don't think you'll find in the executive order any specific new authority or responsibility with respect to intelligence assigned to the FBI. Read more Comment (0), Email this.

MS. PERINO: At this moment I have nothing to announce in terms of the schedule. But there is -- Read more Comment (0), Email this.

Q Okay, and I just wanted to double-check one more thing. You said -- you talked about the need

SENIOR ADMINISTRATION OFFICIAL: I think we tried to address that a little bit at the outset. Read more Comment (0), Email this.

MS. PERINO: Good to see you. Earlier today, President Bush met with his Cabinet and spoke in the Rose Garden about the importance of addressing our nation's energy needs. And as you heard the President say, Democratic leaders in Congress need to stop standing between the American people and the vast energy resources we have here at home. And we believe they should allow a vote to expand exploration.

Tomorrow, President Bush will travel to West Virginia. He will discuss not only the high impact gasoline prices are having on Americans, but also the broader energy landscape. He will talk about our efforts to harness the power of new technology to strip out pollutants like sulphur dioxide, nitrogen oxide and mercury, and to capture carbon emissions from coal in order to allow coal to continue to provide over 50 percent of the electricity like it provides today. We're also attempting to try to reduce its impact on the environment and we're having some good success in our country in that regard.

Additionally, the President will discuss administration efforts to eliminate the barriers to expanding our use not only of coal, but of nuclear power, as well, which is a clean energy source which could power our economy for years to come.

The President recognizes, as do Republicans in Congress, that we need to increase the supply of all forms of energy -- wind, solar, alternative energy, renewable energy, and at the same time we should expand our safe and environmentally friendly domestic drilling here at home, in the Outer Continental Shelf and in Alaska, and also to start developing oil shale to a greater extent.

And so that's what you'll hear from the President tomorrow. Read more Comment (0), Email this.

MS. PERINO: When a President of the United States, no matter who it is, signs a bill, that's putting your name on it. And we said last week that there was a provision of the bill that we think bailed out lenders rather than helping homeowners, and we didn't agree with it, but we recognized that the timing was such that we needed the bill sooner than later. And having a prolonged veto fight that we were convinced we would win, and we proved that we would win, was not in the best interest of the housing market and of the credit market. And so that's why the President signed the bill today. Read more Comment (0), Email this.

MS. PERINO: Sometimes there is. Sometimes we have ceremonies, and sometimes we don't. He's already having one today that's open press, and a big to-do in the East Room, celebrating America's generosity of helping people all over the world who have HIV/AIDS. This is a tremendous effort, bipartisan effort, that reauthorizes a program that has taken our international AIDS treatment from 50,000 people when he first took office to over $1.8 million people today. And this reauthorizes the bill for five years. And I would daresay that that deserves a larger signing ceremony than anything else that was passed this week in Congress. Read more Comment (0), Email this.

MS. PERINO: Well as I have read the coverage of it -- I haven't read the report, but as I read the coverage of it, there's obviously information in there that would cause concern to anybody. And we agree with Michael Mukasey that -- the Attorney General -- that there was concern. There should be concern any time anyone is improperly using politics to influence career decisions. We believe that is improper. We could absolutely not defend that. And we are pleased that the Attorney General has taken steps to change it there at the Justice Department. Read more Comment (0), Email this.

MS. PERINO: I think that if you look at the report, and it is in line with what the Attorney General said at the time, which was that he was not aware of that going on. And so I don't think there's anything -- disappointment doesn't necessarily go to the Attorney General. Read more Comment (0), Email this.

MS. PERINO: No, I don't. The whole situation -- the whole situation in terms of the politicization -- or accusations of politicization -- if you look at career hires that should not have had any sort of questions put towards them as to what sort of party they represent, or what affiliation they might belong to, or who they might vote for -- those are inappropriate for career positions. And the President is glad that the -- Attorney General Mukasey made sure that that is no longer ongoing at the Justice Department. And it's nothing that we could defend, and we never have. Read more Comment (0), Email this.

MS. PERINO: Well, I think that we are -- overall disappointment in the situation, sure. Read more Comment (0), Email this.

Q Dana, this is according to Roll Call, they say a senior GOP aide says that Senate Republicans are

MS. PERINO: Well, I don't know which amendments they are, so I -- oftentimes they have these discussions to vote on whether or not there can be a vote. So if they move forward and they get this, I guess that would be a step in the right direction, but that's only one step. And remember, on -- especially when it comes to the Outer Continental Shelf, here at the executive branch, President Bush lifted his moratorium on Outer Continental Shelf drilling. Congress has to do the same. I don't know if that's part of the amendments or not, so -- Read more Comment (0), Email this.

MR. WILDER: On Monday, August 4th, the President and Mrs. Bush will leave Washington to travel to Seoul, South Korea, to begin a seven-day trip to Asia that will also take them to Bangkok, Thailand, and Beijing, China.

To those of you who haven't been counting, this will be the President's ninth visit to Asia during his presidency, and reflects the importance of this most dynamic economic region of the world to the United States.

Crossing the International Dateline, the President and Mrs. Bush will arrive in Seoul the evening of Tuesday, August 4th [correction: August 5th], and they will hold a day of official events on August 5th [correction: August 6th] in Seoul.

The trip to Korea is at the invitation, of course, of President Lee Myung-bak, who is eager to return the hospitality that he and his wife enjoyed at Camp David in March. This year marks the 55th anniversary of U.S.-South Korean ties. The President looks forward to meeting with the South Korean President and his team on August 5th [correction: August 6th] to review the state of relations.

They will discuss the impressive progress that has been made and the transformation of the American military presence in Korea, and also discuss ways that they can begin to implement a global strategic partnership for the 21st century, so that Korea joins us, as they have begun to do, in helping to secure the peace in other regions of the world such as in Iraq and Afghanistan.

I'm sure they'll also discuss their efforts to get their respective legislatures to pass the Korea-U.S. free trade agreement that is projected -- when implemented -- to add $10 billion to $12 billion to the U.S. GDP annually.

President Bush will also have the opportunity to thank President Lee for his strong support for reopening the beef market. I would note that earlier this week, the first American bone-in beef reached Korea, this for the first time in five years.

Following the morning meeting and the joint press availability, President Lee and his wife will host a social lunch for the President and Mrs. Bush in Blue House. The President and Mrs. Bush will then travel to the United States Army Garrison at Yongsan for a combined troop event with American and Korean soldiers.

They will depart Korea in the afternoon [of August 6th], and travel to Bangkok, Thailand. This will be the President's second visit the Thailand, and it will be a very special occasion as we will be celebrating the 175th anniversary of U.S.-Thai relations. In other words, we established relations with Thailand, the first relationship we had in East Asia, under the presidency of Andrew Jackson in 1833.

President Bush will meet with Prime Minister Samak the evening of his arrival. They'll hold a joint press availability [correction: make joint statements] after their meetings and they will have a working dinner together.

As you may know, Thailand is a major non-NATO ally of the United States and one of our best relationships in East Asia. The President will congratulate the Thai people on the return to democracy in Thailand. He looks forward to his first meetings with Prime Minister Samak, and he will also be talking to Prime Minister Samak about the fact that Thailand will take over the chairmanship of ASEAN -- actually, it just took over the chairmanship of ASEAN and will be the chair of ASEAN for the next year and a half. So there are many issues that they can discuss together.

On Wednesday, August 6th [correction: Thursday, August 7th], the President will make a major set of remarks in Thailand. It will be his look at U.S. policy in East Asia, both what he believes he has accomplished in the last eight years, and also what he believes the future of America's presence in East Asia will be all about.

After that, he will visit a center in Thailand called the Mercy Center, which deals with children with HIV/AIDS. And then he will go on to have a briefing by non-governmental organizations and some American government organizations on the relief effort that occurred in Cyclone Nargis. He will have a lunch in Bangkok with Burmese activists, and hear their stories. And then he will be interviewed by the press in Thailand that broadcast into Burma, so that he can give a message directly to the Burmese people.

During the time that he is doing these events, Mrs. Bush will travel to Mae Sot, Thailand. There she will meet with refugees of the Mae La Refugee Camp. It is one of the largest refugee camps on the Thai-Burmese border. Following her visit to Mae La, she will travel to the Mae Tao Clinic. This clinic was founded, and is directed by Dr. Cynthia Maung. You may remember that Mrs. Bush had a television event with Dr. Cynthia Maung not long ago, and she is very much looking forward to getting on the ground and seeing the clinic in operation. This clinic provides free health care for refugees, migrant workers and other individuals who cross the border from Burma into Thailand.

If you have more questions on Mrs. Bush's schedule, either in Thailand or elsewhere, you can contact Sally McDonough of her office.

At the end of the day on Wednesday [correction: Thursday, August 7th], the Bushes will fly to Beijing. And I will not try at this point to talk too much about the schedule in Beijing because, frankly, the President's goal in Beijing is to attend Olympic sporting events, so that schedule is still in the works. He and his family will decide what events they'll be going to. And at this point, I actually don't have a complete list of the sporting events. I know some of them that he's interested in, but he'll be making his own decisions on exactly where he'll be going.

Let me just note that we will be in Beijing from August 7th through August 11th. Some of the highlights of the visit to Beijing will be the opening of our new embassy complex. You may know that last night the Chinese had an opening of their new embassy complex here. And we will open our new embassy complex in Beijing on August 8th. The President will be joined by his father, President Bush, 41, for that occasion, and it should be a very grand event. This is one of the largest embassies in the world, one of the largest embassy projects we have ever undertaken.

He will obviously also attend the Opening Ceremonies of the Olympic Games while he's in Beijing. And he will have meeting with President Hu Jintao, Premier Wen Jiabao, and Vice President of China, Xi Jinping. He will also be attending a church service on the Sunday he's in Beijing, and I think one other event -- he will meet with many of the sponsors of the U.S. Olympic team to thank them for their support for the U.S. Olympic team.

At this point, I'll take questions. Yes, sir. Read more Comment (0), Email this.

MS. PERINO: Okay, so then I think that -- but remember, in Congress there's also a two-step process. The House would have to move, as well, and without that type of action, I don't think we'll be satisfied, and I don't think the American people will be satisfied either, and for good reason.

Go ahead, Jeremy. Read more Comment (0), Email this.

Q Thanks, Dennis. The President has said that he does not see the Olympics as a political event,

MR. WILDER: I think the President feels very strongly that what he is doing in Beijing is, first and foremost, supporting the American Olympic team. American athletes have worked long and hard to get to these Games. He's a President who loves sports. He's a President who believes in competition and the Olympic spirit. And so, number one on his agenda is really to go to Beijing to support those athletes.

Secondly, I think he would answer this by saying that he always has human rights at the top of his agenda wherever he goes in the world. The President's freedom agenda is well known. The President's work on freedom for Chinese citizens is well known. Yesterday he met with five prominent dissidents. Some of those dissidents would not be in this country were it not for the efforts of this President. And so he has worked long and hard for the rights of the Chinese people.

So I think he would say to you that he understands that some people have a different view on this, but he believes that by going to Beijing, he respects our athletes, he respects the Chinese people who are proud of hosting these Games, and he also has yet another opportunity with the Chinese leadership to sit down and talk to them about these issues.

He doesn't shy away from these issues. I have been in almost every meeting he has had with the Chinese leadership in the last four years. He has always raised these issues. Whether it be the case of the Dalai Lama or the case of the house churches, the President is very conscious of the need for China to continue to move forward, to open up more to religious expression, to freedom of the press and other issues. Read more Comment (0), Email this.

Q The International Olympic Committee today admitted it had agreed to a deal in which some Internet

MS. PERINO: Well, I would encourage -- I haven't seen what the IOC said in context. I want to make sure that that report is accurate, so I'd refer you to the IOC for specific comments from them on what they did or did not agree to, or what they said about this situation.

But let me take a step back and tell you, President Bush has long said that China has nothing to fear from greater access to the Internet, or to the press, or for more religious freedom and human freedom and human rights. And that's one of the things that he talked about yesterday with the dissidents he met with here at the White House. We want to see more access for reporters. We want to see more access for everybody in China to be able to have access to the Internet. It has grown over time, but we think that it would be -- that China would be enhanced and continue to prosper if it allowed for more freedoms. So that's what the President will be talking about on his trip there. Read more Comment (0), Email this.

MR. WILDER: I think it has made a difference. I would not say that progress is by leaps and bounds. The Chinese system structurally does not move very quickly in these areas. But I think we have seen, if you talk to Christians, certainly, about the growth of the church in China -- some people think there are a hundred million Christians now in China. That has happened in a relatively short period of time. And that means that while these churches may not be registered and the house churches may not receive the kind of treatment by the Chinese government we would like to see them receive, it does mean that people are able to express their religious faith in China. It's just that, unfortunately, these churches are now unregistered, as opposed to registered, and we would like to see the government -- very much like to see the government register these churches so that they aren't living, as it were, on the fringe of Chinese law.

So I think, certainly in the area of religion, if you look back over the 30 years of the relationship or even the last eight years of the relationship, the room for religious expression has grown in China. Read more Comment (0), Email this.

Q Why did the President decide to meet with these dissidents yesterday? And it seems as though the

MS. PERINO: Well, there are. But I think that there are a lot of people who see it differently from the President -- and that's okay. The President says he's going there to support our athletes and all the athletes who have made it this far in their sporting careers. So he will go to cheer them on. At the same time, the President has continued to press China and given them a chance to say -- telling them that the Olympics represents the best possible chance for you to share a compassionate heart and to show what the Chinese spirit can really be all about.

And there are clearly people who have suffered human rights abuses around the world that the President has met with repeatedly since 2001, and as he says, when he has his Freedom Institute, he'll continue to do that for the rest of his life.

But when you ask me about the lead-up to the Olympics, clearly there are people who have decided that now is the appropriate time for them to raise their voices. And the President was more than happy to meet with them yesterday. He gave them a lot of time to tell them their stories, and then he reassured them that his strong commitment to human rights and religious freedom will continue throughout his presidency and beyond. Read more Comment (0), Email this.

Q In South Korea, the leadership there is very concerned and upset about the U.S. Agency for Geographic

MR. WILDER: We were contacted by the South Korean government at very high levels and asked to re-look at this question. The President directed Secretary Rice to check into this and see exactly what did happen with this change of designation. It was decided after that review that the change in designation was not warranted at this time. And so that database is now being restored to where it was prior to this change in designation, I think which occurred about seven days ago on the database.

We regret that this change in designation was perceived by South Koreans as some sort of change in our policy. Let me be very clear that our policy on this territorial dispute has been firm and consistent since 1952, and that is, we do not take a position on this territorial dispute; that we believe that South Korea and Japan need to work diplomatically to resolve this issue. But it is their issue to resolve. Read more Comment (0), Email this.

MS. PERINO: I cannot. I am not able to comment on that story. Read more Comment (0), Email this.

MR. WILDER: You know, I very much doubt that it will overshadow. First of all, I think on the beef issue, South Koreans are becoming more and more comfortable as American beef reenters the market. We understand the beef that has gone on the market is popular. And I think as more and more beef enters the South Korean market, you'll find that people -- that this issue will recede more and more.

In terms of the island issue, I think that it certainly didn't enhance the atmosphere for the visit, but on the other hand, the President has demonstrated leadership. And we have a very, very good relationship with the South Korean people. One of the things I think people forget in the midst of some of this is how firmly and strongly the South Korean people believe in the American relationship.

A million South Koreans a year come to the United States. There are many Korean Americans here. The links between our societies are strong. The relationship between President Lee and President Bush is a very warm one, even though they haven't known each other for very long. The South Korean support for the American troop presence in Korea is extremely strong. So I think that there is a very solid foundation to U.S.-South Korean relations. Read more Comment (0), Email this.

Q Well, how about this element -- if true, your comment about Pakistan not doing enough -- all countries

MS. PERINO: I'm not prepared to say that from here. You can check around to other agencies and see if they would be. I think that when it comes to Prime Minister Gillani and President Bush, they are of one mind that the -- that al Qaeda and the terrorists pose a threat not just to the United States, but to Pakistanis, as well. And they saw that firsthand when Prime Minister Bhutto was assassinated.

We are going to continue to work with them. We are trying to work with their military. We've had good relationships with Pakistan over the years. But this is a tense time for everybody, as we work to do more to combat terrorism.

Jennifer. Read more Comment (0), Email this.

MR. WILDER: The President eats a lot of American beef. And so we have suggested to the Blue House that it might be nice to have some on the menu. Read more Comment (0), Email this.

MS. PERINO: No, I don't believe they have spoken. I can check on that for you and see if he will. But I don't know of any plans to. The President has worked with Senator Stevens for many years. Obviously he is innocent under our system of justice until proven otherwise. And so we'll let the Justice Department handle the legal matter and not comment on it further.

Peter. Read more Comment (0), Email this.

MR. WILDER: Well, certainly the message of the people who came to see the President is continuing concerns about the situation in China. For example, Reviya Kadeer, who is a Uighur from Western China, talked about the fact that some of her children are still being harassed; at least one of her children is in prison; that she is worried that the Chinese authorities will use the excuse of security, from her point of view, to harass even further the Uighur people.

And I think that is a legitimate concern. I think that the Chinese, while they have legitimate security concerns for the Olympics, have got to be careful that they respect the rights of all of their citizens, including their minorities.

Bob Fu, the pastor from Midland, Texas, who is very close to the house church movement in China, expressed his concerns about the fact that, as I was saying earlier, house churches in China are not registered at this point. And one of the things that he would argue that should happen is the beginning of registration of those house churches who want to be registered. I think that's an important message to the Chinese government, as well.

I don't want to go through all of the different activists and their views. But basically, it was a message that, keep up what you are doing with the Chinese government. Keep talking to the Chinese government about these issues. Open the door to religious freedom, and other freedoms more.

Some of them, quite candidly, obviously had a different view from the President on whether he should be going to the Olympics. Read more Comment (0), Email this.

MS. PERINO: Well, it's a fairly complex agreement when it comes to the broad issues of the economy -- let's see, the economy, security matters, diplomacy issues, political matters. While we've been working on this agreement with them, it's a negotiation; things go back and forth.

And while we've been working on it, the Iraqis have increasingly gained confidence in their political system, because they've been able to work together and get some of these laws passed. I just today, just now, saw that the Iraqis have called a special session of their parliament because they're going to try to address this Kirkuk issue, which is at the heart of the problem of trying to get their provincial elections law passed.

So while we've been trying to work on the agreement, they've been improving their capabilities. We've had the Basra raid, Mosul raid, Sadr City. And so the Iraqi security forces are improving. And so we're trying to figure out how do we continue to develop a broad-based relationship, one that is based on the respect of both sovereign nations, in a way that can help foster this democracy, and not move too fast, too soon, to disrupt any efforts to cement the gains that we've made.

So it's just taking a little bit longer. But they continue to meet, the negotiators continue to meet, and Prime Minister Maliki and the President keep in touch through their negotiators and also via their secure video teleconferences that they have every other week. Read more Comment (0), Email this.

MR. WILDER: Some of them said that they had concerns that he was adding legitimacy to the Chinese government. The President simply said that while that is a concern, I also feel that by being there, by talking to the Chinese people, by honoring the Chinese people with my presence there, I can do more good. Read more Comment (0), Email this.

MS. PERINO: Well, I think we talked about this a week ago or two weeks ago, when we -- I'm not going to negotiate from the podium, but I can tell you that what we're trying to do is figure out what sort of aspirational goals we could look towards so that we could start to -- well, continue bringing more troops home based on successful implementation of our strategy. And trying to figure out what that horizon is just takes a little bit of time. Read more Comment (0), Email this.

MR. WILDER: Well, I think one of the dilemmas of this issue is that people want us to have influence on the Chinese government. They want us to take actions that move the Chinese government in certain directions. If you don't have a good working relationship with the Chinese government, how do you do that? And the President's answer would be, I need to be able to sit down with these leaders. I need to be able to look Hu Jintao directly and say, for you to progress, for China to move to that future of full attainment of the harmonious society you talk about, you must open up. You must allow people their individual rights, their individual creativity, their individual expression. If you don't, our experience, the experience of the world is, you won't get to that point.

So it's not that we're saying these are American values that you must import. That is not the message the President ever gives. Rather, it is the message of, if you want to achieve the full potential of your people, our experience is, and the experience of most of the world is that you've got to do this. Read more Comment (0), Email this.

MS. PERINO: You know, things change almost every day and they make some progress, and just like in any negotiation you get close and then there's a little bit of a step back, and then you get a little bit closer. So we'll keep you updated, but I don't have anything imminent to announce for you yet.

Roger. Read more Comment (0), Email this.

Q When we hear that the President plans to carry a message of political freedom to Beijing, that

MR. WILDER: Well, you can deliver the message of freedom without politicizing the events of the Games. The President will have diplomatic meetings with the Chinese leadership that are separate from the Games, and in those meetings with the Chinese leaders he will, of course, bring up these issues.

Similarly, when he goes to church on Sunday, he will make a statement afterwards in which he discusses his view on religious freedom in China. So that isn't politicizing the Games. He will not go to the stadiums and do anything that is particularly related to these issues, but he will while he's in Beijing, as he always has done, make clear his views on these issues. Read more Comment (0), Email this.

MS. PERINO: I just couldn't put a time frame on it. If I told you "yes" or "no," then inevitably I'd be wrong. Read more Comment (0), Email this.

MR. WILDER: I think that the schedule is still being worked through. I don't want to rule anything in, and I'm not prepared to rule everything out at this point. Read more Comment (0), Email this.

MS. PERINO: We're just -- we're working on it, Roger. I couldn't put a time frame on it. But they're nearing the end of the negotiations, and so that's why it's a quite intense period right now.

Jon. Read more Comment (0), Email this.

Q Just to follow up, some of the human rights activists in this country have noted that ahead of

MR. WILDER: I think what we are looking for in China is not gestures. We are looking for structural change. We are looking for long-term change. The freeing of an individual prisoner, while very gratifying in its own right and certainly with their families and others, is not the ultimate goal. The ultimate goal here is to get the Chinese government to see that it is in their interest to free up their society.

So individual gestures are not what I'm looking for. Now, I think we are looking for the Chinese at these Games to show that they are making progress, to demonstrate to the world -- the spotlight is on Beijing; this is an opportunity for Beijing to show that it is widening the door of freedom of press, freedom of expression.

For example, the Chinese have announced that there will be protest areas. We very much hope that those protest areas will be open not only to Chinese citizens, but to foreigners. We hope that the rules for operating within those protest areas are open enough that those who want to protest can. We hope that these protest areas are truly like those areas that have been allowed at other Olympics. That has yet to be demonstrated, I think, that the Chinese are truly moving in that direction.

Similarly, there have been questions about the access to the Internet and other issues at the Olympic centers. We think the Chinese government needs to heed those concerns; that if China is going to demonstrate it is truly moving forward as a modern society, this is part of it. Read more Comment (0), Email this.

Q Yes, on drilling, Republicans, the White House, you guys have been hitting this note pretty consistently

MS. PERINO: I don't think so. I think that it's apples and oranges. Read more Comment (0), Email this.

MR. WILDER: I am disappointed that they clamped down on the Internet. Obviously I would like to see all these political prisoners that we have on our list released. We have handed the Chinese lists of people that we think are unfairly imprisoned, and we'd like to see them released. Am I disappointed at that? Yes. But my point is, it's not just about these individuals. It's about the broader problems of China. Read more Comment (0), Email this.

MS. PERINO: When it comes to -- Read more Comment (0), Email this.

Q If I could ask sort of two parts of the question. First, you mentioned the Internet restrictions

MR. WILDER: The President will not have bilateral meetings in Beijing with other foreign leaders. I think it's fair to say that Prime Minister Putin and the President will probably spend a few minutes together socially. But the President is going for the Games and not to do a series of bilateral meetings.

On your question of whether or not we've gone into the Chinese -- frankly I've been in meetings all afternoon. I have not been in contact with either State Department or the embassy in Beijing today on this issue, so I can't answer that yet. I am sure that we will be talking to the Chinese about these kinds of issues, and we have been talking to them. So -- but I don't know what exactly has been done today on this issue. Read more Comment (0), Email this.

MS. PERINO: Well, I think when you're talking about drilling for our natural resources in the Outer Continental Shelf or in ANWR, or developing oil shale, that people would see that quite differently from somebody being indicted on totally unrelated issues. So that's why I call it apples and oranges.

But I do think that we've made progress. And the reason that we have is because there's been a concerted effort to educate Americans who recognize the issue. They understand the law of supply and demand. They recognize that we have resources here in our own country that we know best how to tap into. And I think that they're quite sick and tired of telling other countries that they should deplete their resources in order to feed our habit -- our appetite for oil and gas.

So you'll hear the President talk about that a little bit tomorrow. But in addition to that, we face a similar future in the power see issues when it comes to permitting and streamlining, the issues of nuclear power or even coal, clean coal technologies. Read more Comment (0), Email this.

MR. WILDER: North Korea -- we are obviously all aware that the President talked about the de-listing of the North Koreans from the state sponsors of terrorism if the North Koreans agree to a verification protocol that included the plutonium program, the highly enriched uranium activities, and the proliferation efforts. At this point, we don't have that agreement yet. We are still in discussion with the North Koreans on this issue. The six-party -- all the members of the six-party are in these discussions, and we are looking for the North to come back to us and agree to the kind of protocol that all of the rest of the six-party participants believe is necessary.

We have a little more than 10 days left before the first opportunity for the President to open that window and de-list the North. We hope to hear from the North in this period of time that they will agree to the kinds of measures that are absolutely essential to verify what they have done in the nuclear area. So we are waiting to hear the North's response. Read more Comment (0), Email this.

MS. PERINO: I don't know. I'd refer you over to the Senate -- as Kathleen just said, they apparently just made some very serious progress, if it's true that they are going to be allowed to vote on these measures. So I think that that answers the question. Read more Comment (0), Email this.

MR. WILDER: The President would like to hear that the North accepts, whenever they accept, whether he's in Thailand, South Korea, or Beijing. I will say that without this action, which we hope the North will take, the de-listing will not occur on that time line. Read more Comment (0), Email this.

MS. PERINO: Go ahead. Read more Comment (0), Email this.

MR. WILDER: Right. Read more Comment (0), Email this.

Q Thank you, Dana. Two questions. Senator Cornyn has said that the President "must step forward

MS. PERINO: All I would do, Les, is point you back to what we have said before, which is there is a process in which people in our country can ask a President of the United States for a commutation of their sentence, and that process can take place if those individuals want it to. And I would also point you to the U.S. Court of Appeals, who just recently ruled on that decision. I would encourage you to take a look at it. Read more Comment (0), Email this.

MR. WILDER: No. Read more Comment (0), Email this.

MS. PERINO: I would refer you to DOD. I really haven't talked about that before. Read more Comment (0), Email this.

MR. WILDER: No, the window for doing this remains open. The President has notified the Congress of his intent to de-list, but there is no sort of closure on that. Once he has given the notification, and Congress has acceded to -- then the President -- actually, it's the Secretary of State who will ultimately send this notification to Congress that we have actually de-listed, but the President will instruct the Secretary of State. But he can wait on that notification. There is no -- I'm not aware of any deadline on that. Read more Comment (0), Email this.

MS. PERINO: I don't -- no. I don't.

Laurent, please. Read more Comment (0), Email this.

MR. WILDER: The 45 days is to give Congress a chance to comment, and to react to the President's decision. Read more Comment (0), Email this.

MS. PERINO: There has not been in the last several days. And so I saw that he announced that there was going to be an announcement. I'm going to let him make it, and then we'll comment after that. Read more Comment (0), Email this.

MR. WILDER: First of all, we have offered a great deal of American assistance to the Chinese on Olympic security. We will operate with them in Beijing in this area. We are very confident, having had a very good dialogue with the Chinese on this issue, that they have made significant preparations. So we think that the security for these Games is in good order. But everybody needs to remain alert and ensure the safety of all those who participate. Read more Comment (0), Email this.

MS. PERINO: Since that's a hypothetical question, let me just let him make his announcement and then I'll come back.

Go ahead, Paula. Read more Comment (0), Email this.

Q Can you describe a little bit more the President's plans for attending church? Is it going to

MR. WILDER: What I can say is that it's a different church than the one he attended the last time he was in Beijing. And it is a church that we were interested in attending in part because it has actually a connection to many of these house churches. In other words, the church operates as a learning center for many of these house church pastors. And so the President is eager to go and hear about their efforts to work with those other pastors. And I can get you the name later; I don't have it right here right now. Read more Comment (0), Email this.

MS. PERINO: We're still taking a look at it. We do think that the consumer product safety bill moved in our direction a little bit on some of the issues that we were concerned about. That doesn't mean we don't have some concerns that remain. So that's why we're taking a look at it. They made headway addressing some of the problematic issues, such as the ones that Secretary Leavitt put out in -- I think his letter came out I think Friday or Monday, Paula. I'd refer you to that letter because it lays it out pretty clearly. And then we'll get back to you later today once we have an answer on whether or not we'll be able to sign that deal -- that bill.

Goyal. Read more Comment (0), Email this.

MR. WILDER: No, no, no, no. It's a registered church in Beijing. MR. JOHNDROE: Last one in the back. Read more Comment (0), Email this.

MS. PERINO: Well, I briefed immediately following that meeting on Monday, so I'd refer you to my briefing. Read more Comment (0), Email this.

Q There's a lot of interest in Taiwan about Admiral Keating's comments, that there's a freeze by

MR. WILDER: Well, first of all, there is no change in American policy toward Taiwan, toward arms sales to Taiwan. This term "freeze," I'm not sure where it came from, but it is not a term we have ever used in the administration. We have a commitment under the Taiwan Relations Act to help Taiwan with its own defense. We continue to live up to that commitment. There are many engagements between the United States military and Taiwan military. Those are ongoing. Nothing has been frozen in this relationship. There are many discussions that take place at various levels with the Taiwan military on their military needs. We are evaluating those needs, and we will notify Congress of our decisions on various arms sales at the appropriate times.

But I think there has been a misunderstanding in the press that somehow we have put this relationship on hold. That is not true. In fact, I would note -- I was reading a article in the Taiwan press just today about a non-commissioned officer of the Taiwan military, a woman, who has just graduated from the non-commissioned officers course at Quantico.

So we continue to have very robust relations with the Taiwan military. We continue to assist them with their self-defense needs, and that is the policy of the United States government. MR. JOHNDROE: Thank you. Read more Comment (0), Email this.

MS. PERINO: He was updated on that in his regular briefings and he expresses his condolences for all the innocent people who lost their lives or were injured. And we stand with the Prime Minister of India as they try to root out and seek out these terrorists. I know that they're looking for them very hard, and we'll help in any way that we can. Read more Comment (0), Email this.

MS. PERINO: Good morning. Okay, the President had his normal briefings, of course. At 10:30 a.m. he and Mrs. Bush will participate in the signing of two bills: The Renewal of Import Restrictions on Burma and the Tom Lantos Block Burmese JADE, which is Junta's Anti-Democratic Efforts Act. That will be in the [Oval] Office and pool coverage.

At 10:45 a.m. he will sign the Caroline Pryce Walker Conquer Childhood Cancer Act of 2008; also in the Oval, with stills. And Emily can get you specifics on that if you need it. At 3:20 p.m. he will be in Ohio. We're going to leave here at 1:25 p.m., I think. He will tour Lincoln Electric Company and then give remarks there to people from the company who will be assembled. And at 5:45 p.m. he will attend a congressional trust reception.

I have two other things. One, we wanted to note that tomorrow, after 32 years on the job, NBC cameraman Wolfie Fraser will serve his last day here at the White House. (Applause.) He's really worked tirelessly; we've gotten to know him over the years. He's traveled the world with many Presidents; he's been through all of our years. And we wish you all the best and your family all the best as you start your next chapter. MR. FRASER: Thank you. MS. PERINO: Also at the end of this week, Congress is expected to go on their August recess, and at that same time many families across America are making tough decisions about whether or not they can go on their summer vacations, due to the high gasoline prices. That's just one of many reasons why the Democratically controlled Congress shouldn't keep putting off our future energy needs by systematically and, we would say, un-democratically blocking votes on real measures to address the root causes of the problem of high energy prices.

There are proposals in Congress which include the provisions the President has called for, including opening up our energy resources in the Outer Continental Shelf, ANWR, and allowing development of oil shell resources in the west, as well as streamlining the permitting process for refineries. The Democratic leaders in Congress shouldn't delay this vote; they should listen to the cause of the American people and allow a vote before leaving on yet another month of recess and politics.

We believe that the American people send their elected leaders to Washington to represent them. They are clamoring for an answer on this, and we believe that the Republicans, and many Democrats, should be allowed to at least have a vote on this before they leave on this next recess. You will hear the President talk about this today in his remarks.

Jennifer. Read more Comment (0), Email this.

Q On the attack in Iraq, there seems to be -- at least anecdotally -- an uptick in some of these

MS. PERINO: It's too early to say whether it's a trend or not. And the trend that we have seen is that violence has gone down dramatically, especially since the surge that got underway -- well, announced in January 2007, and then full troops there I think the end of June 2007. So a year later, we have seen a trend of a lot less violence. But there is still violence nonetheless, and I think that's one of the reasons we continue to talk about the need for flexibility, and to be looking to commanders on the ground for their assessments of whether or not troop -- whether or not we should bring more troops home now based on success, whether or not we need to have more there, changing strategies. At the same time, we're building up the Iraqi security forces, and their economy is improving, as well as their political reconciliation.

So all those things are good, but at the same time you have a very determined enemy. I'm not sure exactly who claimed responsibility yesterday, and I think I'd have to refer you to MNFI right now to make sure. But these types of high-profile attacks that are using female suicide bombers are deplorable and have killed scores of innocent people. And I think that innocent civilians are tired of this type of violence, and they have risen up against it. We've seen that, but there's a long way to go. And that's why we've said that we need to take all of that into consideration as we make decisions about our future posture there.

Matt. Read more Comment (0), Email this.

MS. PERINO: It's not us that has had a problem with getting a handle on it. It's the Congress, and they send us the bill, and as soon as we get it, we'll sign it. So that question should be, I think, appropriately put to Speaker Pelosi's office as to when they're going to send it to us. Read more Comment (0), Email this.

MS. PERINO: I haven't had an update -- I don't think we -- we would assume it's soon. I mean, at some point it's going to become irresponsible that they don't send it down, because Secretary -- the Secretary of the Treasury has said in a -- I think it was almost two weeks ago now, or maybe even longer, that he needed those authorities that are in the bill in order to help stabilize the market and provide confidence to the market. And the President dropped his veto threat on the provision that he didn't like so that we could speed up this process. So as soon as they have the bill ready, they should send it to us, but that question is appropriately put to Speaker Pelosi. Read more Comment (0), Email this.

MS. PERINO: I don't have reason to believe that. I know that they're just now back in town again after their long weekend of a recess, but I don't think -- you know, sometimes it does take a while to send bills to the White House for signing, but at some point you have to wonder why are they holding it back. Read more Comment (0), Email this.

MS. PERINO: Well, the remarks today are mainly focused on energy issues. But clearly housing has been the other part of the headwinds that we have faced over the last year. And there's no question that it still is having an effect on the housing market. We can't put a timetable on when the housing market will be able to start to rebound, but we're doing everything we can, one, to help people stay in their homes in the meantime, while they go through this correction; and then to help us pull out of it sooner than later. Read more Comment (0), Email this.

MS. PERINO: I don't -- Read more Comment (0), Email this.

MS. PERINO: His remarks that he's going to give today are on energy.

Paula. Read more Comment (0), Email this.

MS. PERINO: We did -- let's see, I have a point on that. We do think that we'll get a bill -- we hope that we'll be able to get a bill that the President could sign -- I don't think I brought my notes with me, sorry. We'll get back to you, Paula, I'm sorry -- hold on, I might have it here, because I had a couple of points on it. Yes, here we go, just to remind me.

We're waiting -- we understand they made an agreement last night. We're waiting to see the final language. We do think that the bill moved in a direction that we might be able to sign it; we would like to be able to sign a bill. We want to ensure Americans that their products that they are buying and using are safe. And we want to make sure that the regulating agencies have the resources that they need in order to do their job.

So let us get a hold of that final language, take a look at it and then we'll circle back with you.

Roger. Read more Comment (0), Email this.

MS. PERINO: Energy, the most important priority facing America right now. Read more Comment (0), Email this.

MS. PERINO: Well, it's some pretty basic issues -- and I think that you'll hear him call again for the Democratically led Congress to allow the representatives of the American people to at least have a vote on this before they leave for their recess.

John. Read more Comment (0), Email this.

MS. PERINO: I know that we have over the years been supportive of efforts, and that's pretty much all I can say right now. But we're very pleased that he was finally caught. We wish it would have happened sooner.

Ann. Read more Comment (0), Email this.

Q Is the President pleased that Americans are driving less, to the tune of maybe $10 billion -- 10

MS. PERINO: I think President Bush is pleased to see that what he believes to be true is working out, which is that markets work, and that the laws of supply and demand are still reigning supreme when it comes to high prices, which means a tighter supply and higher demand. So if you reduce your demand, you have more supply. But that doesn't mean that we shouldn't aggressively look for ways to bring down prices even more. Driving less might be the solution for some families, but for others it might really put a crimp in their day-to-day lives, or the work that they try to do, especially if you're a small business who has a van or -- like a delivery van or something like that, you are going to have to be out there driving.

So we think that we should also address the root causes, as well as people taking steps to conserve. But I think the bottom line is that markets work.

Go ahead, Paula. Read more Comment (0), Email this.

MS. PERINO: I think the President thinks that consumers can make that decision on your own.

And you asked me, I'm sorry, Ann, about the Highway Trust Fund and if we're concerned. In our budget last February, we noted concern about the issue. And then -- it's not as high as some people have said, in terms of the deficit, but I think this again goes to the issue of, there's just contradictions in some people's policies -- which is, some people, I think especially those from the Democratic side, want people to drive less to help improve the environment. But when you do that, you have less taxes. So then their answer is, well, let's maybe try to raise taxes, which we don't think is a good answer either. Read more Comment (0), Email this.

MS. PERINO: We had in our budget a way for them to address it, a way for Congress to address it -- so we think that Congress actually needs to do its work on the appropriations side of the equation to address it. And we don't think that raising taxes is necessary.

Laurent. Read more Comment (0), Email this.

MS. PERINO: I haven't had an update on it in a while, but we do know that sanctions can work, which is why we work both unilaterally and multilaterally to impose them, to help squeeze the regime. Our goal is to squeeze the people who are actually repressing the people, and not hurt the people. And that's why you see we are very generous in humanitarian aid with some of these countries, but at the same time we work to address the leaders and the cronies of these regimes -- such as in Zimbabwe, with what we did with President Mugabe's sanctions last week.

Last one, Savannah. Read more Comment (0), Email this.

Read more Comment (0), Email this.

MS. PERINO: Hello, everybody. A couple of things. The President is just finishing up a lunch right now with Prime Minister Gillani of Pakistan. They had a very good meeting -- I would describe it as a serious meeting -- one in which they spent most of the time talking about counterterrorism issues. The President reaffirmed his commitment to Pakistan for the aid that we provide. In addition, you will get a joint statement from the two leaders a little bit later this afternoon -- it's not quite ready yet.

But one thing I would point out is that the President offered $115 million over two years in food aid, and $42.5 million of that will be available over the next six to nine months. Details on that will be coming soon.

And then the President decided that they -- well, I should say they agreed that they would talk about the economy and economic issues facing Pakistan over lunch, which they are in right now.

Also in about 45 minutes you'll hear from OMB Director Nussle and Chairman Lazear, from the Council of Economic Advisors. They will hold a briefing on what is called Mid-Session Review. They'll give you the full briefing and they'll be able to answer all of your questions on the specifics of the new estimate. I know there's a lot of interest in the deficit numbers; I'm not able to talk about that here. But it is no secret that the deficit will worsen this year largely because of the bipartisan economic stimulus plan that was passed in February. Both parties agree that even with a larger deficit that that plan was needed in order for it to have an impact to help pull us out of the downturn that we've been in.

We believe these deficits are temporary and manageable if we keep spending in check, the tax burden low and the economy growing, and that's why the President has been clear that discretionary spending beyond reasonable levels he proposed will be met with a veto. So that's coming up in just 45 minutes. Read more Comment (0), Email this.

MS. PERINO: I'm not able to comment on that report that you're referring to on a strike today. I will tell you that overall in the meeting they talked mainly about counterterrorism after -- and especially what we can do to help provide training for their military. Prime Minister Gillani also talked about something we've talked about here, which is how do you help change the lifestyle of people in the region so that they have a hopeful future, rather than one based on terrorism.

They have complex issues on the border there, especially when they have refugees -- about 3 million refugees from Afghanistan living in the border area. The President pledged support for that, but when it comes to that specific report I'm not able to comment. Read more Comment (0), Email this.

MS. PERINO: That's just not something I would be able to talk about from here. Read more Comment (0), Email this.

MS. PERINO: Or anything at all. I'm not going to be able -- I'm not going to talk about it at all. I would just say broadly the way I could answer the question is that they did speak -- spent most of the time talking about counterterrorism issues. And I would point back to what the Prime Minister said, which is that the Pakistanis recognize that this is their war, too, and that their people are targeted just as much as freedom-loving people here in the United States and elsewhere around the world. But when it comes to specific tactics, I would not be able to talk about it from here. Read more Comment (0), Email this.

MS. PERINO: I am not able to comment. Read more Comment (0), Email this.

MS. PERINO: I think when it comes to counterterrorism President Bush feels that all of us need to be doing more. And the Prime Minister talked about some of the efforts that they've been working on, especially in terms of coordination with our military and training that we have provided. We just announced last week that we've worked towards resolving the F16 repair and maintenance issue. And so they spent time talking about that, and I think that they agreed and reaffirmed this is a war that we need to be fighting together. So they talked about it more in broader terms, rather than operational details. Read more Comment (0), Email this.

MS. PERINO: Sure. I think that this President -- President Bush got to know President Musharraf very well over a period of many years, and they went through some pretty rough times together and established a good friendship. The President has started establishing a good relationship with this Prime Minister, as well, having first met him on May 26th in Sharm el Sheikh, Egypt, and then again today. And I'm sure that if they have a -- I shouldn't say "I'm sure" -- if they had a chance to meet again before the end of this President's term -- he thinks he will, but -- I think they would meet.

President Bush believes and reaffirmed today with this Prime Minister that the relationship between the United States and Pakistan is critically important, and it's one based on democratic values. Prime Minister Gillani did thank President Bush for their democratic elections. So they -- there's a broad base of friendship there that is a foundation for moving forward. And President Bush did say that whoever the next President is of the United States, that he believes that the good relationship will continue, if we can continue working together, especially on issues of counterterrorism.

Their economy is something that we also remain concerned about, and President Bush said that they would be talking about a little bit later today. And of course when it comes to the humanitarian condition, President Bush is concerned about people who are not able to afford food, and that's why we provide -- are going to provide the $115 million in food aid. Read more Comment (0), Email this.

Q So -- one more following -- when you -- the relationship is currently characterized between the

MS. PERINO: I wouldn't -- it's tense in that we are working together to try to fight counterterrorism, but I think that we are much more on the same page than some people would like to paint -- the picture that they would like to paint. I think that from what I witnessed today between the Prime Minister and the President, both in this meeting and the one in Sharm el Sheikh, there is a commitment on behalf of the Pakistanis that they need to be able to do more. But they have a complex situation and they're trying to do a lot of different things at once, focusing primarily on helping prevent terrorists from establishing a safe haven in that area; but also worried about their people and how they're going to be -- improve their economic conditions by improving the job situation and health care and education.

So I would say -- I would say that we have a good relationship, but it is serious times and that the President believes that we all need to do more, especially when it comes to counterterrorism. Read more Comment (0), Email this.

MS. PERINO: I don't comment on any reported missile strikes. So that's what I'm not commenting on. Read more Comment (0), Email this.

Q Okay. The question then, I guess, is the President made clear that the deal that Musharraf had

MS. PERINO: As to the first part of your question -- let me take that first -- Read more Comment (0), Email this.

DIRECTOR NUSSLE: Good afternoon. Thank you for attending. The Mid-Session Review -- or popularly called the MSR -- updates the administration's estimates of receipts, outlays, and deficits or surpluses, to reflect economic, legislative and other changes since the President's FY'09 budget was released back in February.

I'm going to give you some of the highlights of the budgetary changes, and then turn it over to Dr. Lazear for an overview of the economic assumptions. And then we'll take your questions. And as Kristen said, because Dr. Lazear has to leave at 2:00 p.m., I think probably what we'll do is try and focus questions to you first, and then I'll stay behind for a little bit more.

Relative to 2007, the budget deficit for the next two years will be higher before it begins declining, and reaches surplus in 2012. Specifically, for this budget year 2008, the budget deficit is now estimated to be $389 billion, which is $21 billion lower than estimated in February, where it stood at $410 billion.

At 2.7 percent of GDP, gross domestic product, the 2008 deficit is projected to be just slightly above the average of the last 40 years, which is about 2.4 percent of GDP. The MSR provides a snapshot of the budget when Congress left for the July 4th recess, and reflects the enactment of the farm bill and the supplemental appropriations bill.

However, more recent developments such as the Medicare "doc fix," as it's called, or the housing bill, are not fully captured in this MSR. This suggests the final deficit for 2008 will be larger than our current projection of $389 billion.

So to be clear, that means that every dollar that is spent, whether it's spent by the administration or the Democrat Congress, spends beyond the budget and drives the deficit higher. For 2009, the deficit is projected to rise to $482 billion, or 3.3 percent of GDP. This is still below the recent peak of 3.6 percent of GDP in 2004, and it's well below the record deficit of all time, which was 6.0 percent of GDP back in 1983.

The primary reasons that there will be larger deficits in 2008 and 2009 are because of the bipartisan growth package, or stimulus checks, as well as slower economic growth. Earlier this year, the President and Congress, on a bipartisan basis, correctly agreed that action was needed for our economy, and made a deliberate and conscious decision to temporarily increase the deficit in order to get money into the people's hands and spur consumption. The determination was made that getting the economy back on track was a higher priority than immediate deficit reduction.

`To give you context for how the stimulus has impacted the deficit we talk about today, if you somehow could exclude the bipartisan growth package, the deficit would be 1.9 percent of the economy, or about $272 billion, instead of the $389 billion we speak of today. The deficit is projected to fall sharply then after 2009, with deficits in 2010 and '11, only slighter higher than we projected back in February. The President's budget blueprint remains on track to achieve balance with surpluses of $58 billion in 2012, and $29 billion in 2013.

The important point to remember is that near-term deficits are both temporary and manageable if, and only if, we keep spending in check, the tax burden low, and the economy growing. Excessive spending beyond the President's budget plan will make the problem worse. And it already appears that congressional Democrats are lining up to bust through the President's budget, and for that matter, bust through their own budget. They are seeking to add billions in extra spending to the regular appropriations bills, which will drive up the deficit even further. They've already racked up $209 billion in more spending requests than the President. That's why the President has been clear that discretionary spending beyond his reasonable and responsible levels will be met with a veto.

The President has also repeatedly proposed sensible reforms to the automatic entitlement spending that now accounts for almost two-thirds of the budget. Simply raising taxes is no solution and often makes the problems worse. And congressional Democrats plan to pay for all of their big-government spending with the largest tax increase in history. This is anti-growth policy. It will hurt our economy and jobs, and it will have a negative impact on the bottom line for taxpayers, as well as government.

We can drive down the deficit and get to balance if we maintain fiscal responsibility and continue pro-growth policies. The President and congressional Republicans have a plan to do just that, by restraining spending, the passage of the Colombia and Korean trade agreements to help increase job creation, sensible adjustments to achieve savings and important entitlement programs, and the extension of the President's tax relief which will prevent 116 million Americans from facing an average tax increase of $1,800.

And most importantly, the President and congressional Republicans have a plan to reduce our dependence on foreign sources of energy, including a budget amendment the administration is sending up today that would delete two provisions from the fiscal year 2009 budget request. This amendment would lift the restriction on spending for offshore pre-leasing, leasing, and related activities in federal waters in the Outer Continental Shelf. And we call on Congress to adopt these changes.

Unfortunately, congressional Democrats have a long record of standing in the way of steps when it comes to energy security. For example, back in 1995, President Clinton vetoed legislation that would have opened ANWR to oil production, arguing at the time that it would only supply a small portion of our needs. However, if he had signed that legislation, domestic oil production could be 800,000 barrels a day higher than current levels. In one year, that would be four times the amount of oil the Democrats are now proposing to be released from the Strategic Petroleum Reserve.

Americans and our economy need an energy plan now. And the Democratically controlled Congress is blocking all attempts to increase production. This summer, the House and Senate have refused to bring an Interior appropriations bill to the floor. For that matter, they've pretty much refused to bring any appropriations bill to the floor. This would provide an opportunity to lift the moratorium for drilling on the Outer Continental Shelf. And Democratic Leader Reid has even cancelled action on what he calls a stimulus bill just in order to block any debate on energy production amendments.

I'm quite sure that there will be people who criticize this report, they'll criticize the President, or they'll probably try and just focus attention on the big size of the numbers. And I hope that if they do that you will ask them to present a realistic and detailed budget plan, or at least inform the taxpayers of this country when such a plan will be enacted into law.

The President presented such a detailed budget plan six months ago, to meet the country's needs in a fiscally responsible manner and promoting growth for our economy. Unfortunately, Congress so far has failed to pass even one bill to begin the annual budget process. And I'm informed that there are now only 19 legislative days left in the fiscal year when they can even meet and pass such a plan.

I will now turn to the Chairman of the President's Council of Economic Advisers, Dr. Ed Lazear. CHAIRMAN LAZEAR: Thank you, Jim. I'd like to talk to you today about our forecast. GDP is forecast to grow at 1.6 percent this year. We believe that this forecast is realistic and consistent with others from both private and government forecasters. It is clear that 1.6 percent growth is below the average for the United States, but the positive growth that we are forecasting for 2008 reflects the resilience of the American economy in the face of significant shocks.

The economic stimulus that the President signed in February is a contributing factor to forecasts that sustain positive growth. Headline inflation is expected to moderate over the next few months, which should bring the rate for 2008 to around 3.8 percent. The 2009 inflation rate should be considerably lower, and we are forecasting 2.3 percent. Much of this reflects expectations that increases in energy and food prices that we saw this year will not be repeated. GDP price inflation will be significantly below headline levels at 2.2 percent.

The 1.6 percent GDP growth number is revised down from 2.7 percent that we forecast last autumn. There are three primary reasons. First, the rapid rise in oil and other commodity prices has put downward pressure on the economy. Second, tightness and reorganization of credit markets has affected business investment and other forms of borrowing. The extent of the credit market problems that materialized over the first half of 2008 were not built into the autumn forecast. Finally, housing has continued to be a drag on the economy and has subtracted more from GDP than was expected. Offsetting these drags on GDP growth is the expansion of exports, which has contributed significantly to the positive growth we have seen in recent quarters.

The unemployment rate is expected to remain close to its current levels into 2009. Although these levels are elevated relative to the last couple of years, they are not high by historic levels and are currently below the average for the 1990s. Unemployment rates should decline thereafter, eventually reaching what we believe to be long-run sustainable levels of 4.8 percent.

Interest rates, which are currently low, are forecast to revert to their long-term levels over time. This employs -- I'm sorry -- implies that the forecasted rate of 4 percent for 10-year Treasury notes will eventually rise to 5.3 percent, consistent with our inflation forecast and with historic relationships.

All forecasts are subject to uncertainty, and this one is no exception. We believe it reflects the best information and statistical methods available, and we have confidence that it provides accurate estimates of the key variables.

Thank you. We'd like to take your questions now. Read more Comment (0), Email this.

MS. PERINO: The first part of your question was actually in terms of the effort by President Musharraf to try to establish some relations with the tribal leaders up there in the FATA region. Read more Comment (0), Email this.

CHAIRMAN LAZEAR: We don't actually provide an estimate of what it would have been without the stimulus. And in fact, we don't break out the estimates quarter by quarter, as you know, we just give an annual estimate. We have seen indications that the stimulus is working. We're quite confidant that we made the right move back in January, when the President proposed the stimulus package. We did it for insurance reasons. We believe that it was a wise purchase. And we have seen some reflection of the stimulus in spending patterns of consumers over the past month or two. So there is indication that it is working, and we expect it to continue to work into the next couple of quarters. Read more Comment (0), Email this.

MS. PERINO: Well, but so did they. I think the Pakistanis recognized that it wasn't successful either and so they walked it back.

Now this new government thought that they would try a variation on that theme and they are working to see if there is something that they can do to try to improve the livelihood, the conditions of the tribal leaders. One of the things that those people are going to have to have is security. They need to be able to feel that their government is going to be able to take care of them, and not the militants and the warlords that are reigning in some areas -- in that very difficult terrain up on the border region.

So the President thinks that yes we are working effectively together, but there is more to be done. Everybody can always improve on coordination, and that includes sharing of intelligence and also helping improve their military capabilities -- that is another aspect of the conversation that they had today in the Oval.

Peter. Read more Comment (0), Email this.

DIRECTOR NUSSLE: We did not leave out war costs. In fact, we build in -- and we built into the budget for this year $70 billion for 2009. We certainly understand that may not be the full cost of the war. That number is still being developed by the Department of Defense, and when it is available and when it is developed, then it will be presented to the President for a decision about whether or not that is appropriate and needs to be sent up.

But we've made it very clear that we did not want to tie the hands of the next commander, that we wanted to provide flexibility to the next Commander-In-Chief. The $70 billion we estimate will provide funding for the global war on terror through -- we believe at this point in time, through late spring, possibly early summer, depending on how the Congress develops -- or if they pass an appropriations bill for the Department of Defense this year, or whether we have to live under a CR.

So there is some, I suppose, uncertainty based on how they decide to proceed. But the President has decided that the best way to not only ensure that we have funding through the next administration is to provide that $70 billion. And Congress put that into the supplemental that they passed back in late June. Read more Comment (0), Email this.

Q The President made a point of twice emphasizing respect for Pakistan's sovereignty. Does that

MS. PERINO: I think it means that we believe that working together with the Pakistanis is the best way to go after terrorists. And we all need to do more and we need to do it more aggressively; and we need to do it with more resources and we need to do it with the cooperation of our NATO allies and the Afghan government. So there's a lot of -- there's a lot coming together there.

If you're asking me in terms of does President Bush think that no option would be off the table in the future if there was some sort of attack -- it's a hypothetical question that I wouldn't be able to answer here. Read more Comment (0), Email this.

DIRECTOR NUSSLE: No, we don't believe we are. In fact, Congress has chosen to take on the costs of the war in a piecemeal and a very delayed format. The President, in the most recent iteration of this, had a request for funding for the global war on terror that languished out there for more than a year before Congress even addressed it. Congress held hearings on it, but never even took it to the floor. So it's Congress that is choosing the path here of not addressing the cost of the war, not building it into their own budgets. In fact, they have built in the exact same amount into their budget that the President has built in. So Congress has chosen to take this on in a piecemeal approach, and as they do that, the President needs to respond in kind. Read more Comment (0), Email this.

MS. PERINO: Keep that in that same category in terms of operations of things that I would not talk about from here. Read more Comment (0), Email this.

Q Within the budget, it said that the economy can absorb high energy prices. Given where energy

CHAIRMAN LAZEAR: We know that every time oil prices go up it takes off some growth from our economy. So we estimate that every $10 or so per barrel of oil costs us anywhere between a quarter of a point to .4 percentage points of GDP. So, obviously, what that means is that it does have an effect. It has an effect -- a continuing effect on the economy.

The reason that the economy has continued to grow throughout this period is because productivity has grown enough to offset those high energy costs. And what's happened over the past few years is that increasing productivity growth has meant that we've been able to lower our costs of doing business, which in large part is responsible for the competitiveness of our export business, as well, and that has offset these energy costs.

That doesn't mean it doesn't cost us anything. Obviously when we see energy prices going up it does mean a drag on the economy. We've just been able to get through it because other things have been sufficiently positive to offset it. Read more Comment (0), Email this.

Q You also said that they discussed a policy aimed at preventing terrorists from establishing a safe

MS. PERINO: Well, we believe that they are severely hampered and that much of the leadership has been captured or killed or brought to justice in some way. And that is due to the efforts of the Pakistanis working with us on counterterrorism efforts. That's exactly what it's for.

They are hampered in their ability to move around, and that's one of the things that we've been able to do. But we still have to continue to fight and continue the search, and if we knew where he was, we would bring him to justice today. Read more Comment (0), Email this.

Q Dr. Lazear, can you talk a little bit about what you're expecting for economic growth in 2009,

CHAIRMAN LAZEAR: I'll defer to Jim on the budgetary question, but I can certainly tell you about 2009. We're predicting 2.2 percent for 2009. We believe that that is a realistic forecast, that we should be back on track -- Read more Comment (0), Email this.

MS. PERINO: Arguably I think in some parts you could say that they're -- have established safe haven, but not in the entire region, not in that entire area. And that's why the efforts to press the Pakistanis to continue to do more and offer them help to be able to do it is something that reigned supreme in the meeting today.

Go ahead. Read more Comment (0), Email this.

CHAIRMAN LAZEAR: In February -- oh, you mean our last forecast for that was 2.9 percent was our -- no, no, I'm sorry, that's not right. Fall was 3.0 -- 3.0. So we've revised it down, again for the same factors that I mentioned in my opening: energy prices, credit and housing.

Again, our hope is that we will be through most of the issues that are plaguing those markets right now and that we won't see continued increases in energy prices. We hope that those prices will stabilize or perhaps even fall. If they do, that will be a boost to the economy. The housing market bottoming out will also be a boost to the economy, as well, and we hope that that will happen sooner rather than later.

Again, we believe these forecasts are realistic. They are in line with the kinds of forecasts that you're seeing both among private forecasters and in other government agencies, as well, so we don't think this is a rosy scenario in any way, we think it's a realistic scenario. Read more Comment (0), Email this.

MS. PERINO: Well, there's been -- you know, there's a briefing in 45 minutes by your economic experts that will be on camera and on the record. I'm just going to refer you to them and let them answer all those questions. Read more Comment (0), Email this.

CHAIRMAN LAZEAR: Well, there's always new information that come in weekly. We also had some good ones last week. We had a durables number that was pretty strong, and there have been a number of other indicators that seem strong. We'll get GDP numbers on Thursday. Obviously once we know the actual number for GDP in the second quarter that would be additional information that would affect our estimates, as well.

The problem is you always have to choose some point at which to draw the line and base your forecast at that point, and that's what we did. It was the best information we had at the time. Whether new information would have had any significant impact on that, I doubt that it would be significant. But obviously all new numbers do have an impact on the forecast. Read more Comment (0), Email this.

Q Dana, as you know, Brian Williams sat down with President Ahmadinejad earlier today, and Ahmadinejad

MS. PERINO: I think we have to approach this with a big grain of salt. President Ahmadinejad said one thing to the Iranian people on Saturday and another thing to an American journalist on Monday. So I think that all of us need to consider this with a healthy dose of skepticism. There is a new approach, one that we offered, one that the international community came together on and said, we do not believe that Iran should be allowed to develop a nuclear weapon. We have put together an incentives package with the P5-plus-1, and it calls for Iran to suspend uranium enrichment. That's all they have to do is suspend and then this incentives package could move forward and so could negotiations. And then the Iranian people could move forward to not be so isolated.

And we would hope that they would respond in a positive way. And that's exactly why we went to the meeting 10 days ago, when Under Secretary Burns attended to say, we, as part of the P5-plus-1, are serious about this offer. And the Iranians said to everybody, well, we're going to come and we're going to have a response. And they came and they just continued to play games. And Secretary Rice said that that actually reinvigorated our diplomatic process.

So we'll see what he comes back with in Geneva, but I think given that he says one thing on Saturday and another thing to an American journalist on Monday, just requires a lot of skepticism. Read more Comment (0), Email this.

CHAIRMAN LAZEAR: Than in 2007? Yes, I'd have to check on that. I can't give you an answer to that off the top of my head. DIRECTOR NUSSLE: But a big part of it is as a result of the softening of the economy. I mean, that part of it is obvious. But exactly how that figures, we can check on it and get you more detailed answer. CHAIRMAN LAZEAR: I'd want to make sure before I give you any specifics that you're going to quote. We can certainly get back to you on that. Read more Comment (0), Email this.

MS. PERINO: Well, I won't speak for the diplomats. I think that the political directors would have to talk about that. But I do know that what -- that could -- what Iran could face if they don't respond favorably is additional sanctions. And it doesn't sound from reading the interview that that's what he wants, but yet again I think maybe we should think about what he -- look towards what he says tomorrow. And if it's something different from what he said today and then yet again on Saturday, I think that anybody who would be in our position or any of our allies' position would have to look at this and think that it's one that requires skepticism. Read more Comment (0), Email this.

DIRECTOR NUSSLE: Well, I mean, I acknowledge -- Read more Comment (0), Email this.

MS. PERINO: I wouldn't say that. Our determination is to solve this diplomatically, and that is why we have worked so hard to build a multilateral process, one in which we can put forward an incentives package, but also move forward on sanctions in case they're needed. So we have a multi-pronged approach and it's so far held together, and in fact was reinvigorated when the Iranians decided to thwart the international community and walk away from the table last week.

Matt. Read more Comment (0), Email this.

DIRECTOR NUSSLE: And I acknowledge in my statement that this is going to be a challenge, particularly given the atmosphere on Capitol Hill to spend more. Most of the bills, most of the proposals on the Hill have been to spend more, have been to obligate more. It's going to be a challenge, particularly given the fact that if you see more tax increases that could slow the growth and the economy. These are all challenges that need to be factored in.

So we acknowledge, both because of the small changes since the MSR was finished, as well as what we have not yet seen in the 19 days -- 19 legislative days that remain for Congress in this fiscal year, there are a number of pressures. Most of those pressures are upward pressures on the deficit, not downward pressures. And each one of those, every dollar that is added to that bottom line makes it more difficult and takes away the cushion that we have in 2012 and '13. We do have some cushion, but not enough to squander that with excessive spending programs. Read more Comment (0), Email this.

Q Dana, just to go back to the President's meeting with Prime Minister Gillani -- the Prime Minister

MS. PERINO: Certainly he didn't rule it out, in terms of adding more from the military point of view. And he did say that it was -- his singular focus was to try to deal with this counterterrorism issue. I think that when he talks about the war on terror -- when it's from his perspective -- he doesn't think that this is a war on terror just being waged against the United States. And his good friend, Prime Minister Benazir Bhutto, was killed by terrorists, so they have incentive and every reason in the world to try to go after them as well.

And he also said that average citizens in Pakistan are sick of the violence; they're tired of it, they want it to end. And he has committed his government to try to help make that happen and he asked the President for some continued assistance and the President gladly gave it. Read more Comment (0), Email this.

Q In May, the Treasury survey of the primary dealers in public debt who keep very close track of

DIRECTOR NUSSLE: Well, we're giving you the projection as we know it today. I acknowledge, as I did in my statement, that there have been some changes, albeit not too significant, since the MSR has been put to bed. I think the biggest challenge will be as we see how Congress decides to end the year, so to speak, and begin the next fiscal year. There is enormous pressure for additional spending. There's talk of all sorts of legislation in addition to the regular appropriation process that has not even begun yet. All of those -- again, dollar for dollar -- add to the pressure, to the bottom line, whether it's projecting the deficit for the end of this year, or to the '09 deficit and beyond. Read more Comment (0), Email this.

MS. PERINO: Brianna, we have talked about this before; I would point you back to all the things we have said, especially since this budget came out this year. We have worked very hard to try to keep spending in check. I don't have those specific numbers in front of me -- something like discretionary spending that's been held below inflation. President Bush has tried to hold the line across the board when it comes to this Congress trying to raise taxes on the American people, or raise spending unnecessarily. He hasn't been afraid to veto bills.

But we also headed into an economic downturn. And we recognize that it would be very important to try to help save this economy, and to do so by passing a bipartisan stimulus package. That was the right and prudent thing to do. If we hadn't done that I don't know where the economy would be right now. I couldn't say, I'm not a prognosticator, but these gentlemen will be able to tell you in about 40 minutes. Read more Comment (0), Email this.

DIRECTOR NUSSLE: Well, again, the record -- it's always interesting, you see these statements about this is a record deficit, or however it is. I mean, you can only compare these very large numbers against something. And I think it's acknowledged by most economists, as well as by most leaders both in the Congress and the administration, that the best way to compare a deficit is by your ability in the economy to manage that deficit. And so comparing it to GDP is the best way to be able to decide whether or not a number is big or not.

We are not happy about the deficit. It is slightly higher than the average of the last 40 years. We have a plan to address that deficit and bring it down, which I think is a responsible one. We call on Congress to both adopt one, as well as enact one, and to do so in a fiscally responsible way so that we can stay on track. But certainly there are a number of pressures out there that could, and will, add to the deficit bottom line if, in fact, we don't keep control over them. Read more Comment (0), Email this.

MS. PERINO: We want to get it signed as quickly as possible, but I think the person you need to ask for when we're going to get the bill is Speaker Pelosi's office. They send -- Read more Comment (0), Email this.

DIRECTOR NUSSLE: Well we patch the AMT, as you probably know, for the budget that we're currently trying to enact for 2009. The President believes that we should not patch the deficit -- or patch the AMT -- that rather we should enact AMT reform as part of a comprehensive tax reform. So while he has patched it in years past, made the determination that it should not be patched going forward, and that it should be part of a tax reform debate and, in fact, may be the, I guess you could say the energy that spurs the tax reform debate, and should, because it's a tax that needs to be reformed. And the President has a longstanding policy to do that. So that's how the President addresses it within this budget. Read more Comment (0), Email this.

MS. PERINO: Look, we're going to try to get it done as quickly as possible. The President's schedule is packed, and we don't have a signing ceremony for every bill. So we'll sign it and get it into law. Read more Comment (0), Email this.

DIRECTOR NUSSLE: No. Read more Comment (0), Email this.

MS. PERINO: I think we answered all those questions last week. We talked about our reservations for the bill. But the President lifted his veto; it passed on Saturday and he's going to sign it.

Steven -- got answered? Mark. Read more Comment (0), Email this.

DIRECTOR NUSSLE: We're assuming that Congress would not be able to withstand the pressure much longer, and will finally address tax reform.

Anything else? Yes. Read more Comment (0), Email this.

Q Dana, Israeli-Palestinian peace talks. The Prime Minister -- Israeli Prime Minister said today

MS. PERINO: No, I don't think so. I believe that Prime Minister Olmert and President Abbas have every intention of trying to work together and seize this opportunity to try to come together. But there are a lot of complications, one of them being the terrorist attacks on the Israelis coming from the Palestinians. And obviously the Palestinians having a lot of issues to deal with, including announcements of new settlements, that certainly don't help the process. It undermines confidence across the board.

I'm not exactly sure the context of what Prime Minister Olmert said. We have always thought that we would be able to only define a state by the end of the year. Part of that would be the issue of Jerusalem, that the parties are going to have to work out.

Let's let it play out a little bit longer. Secretary Rice has announced that she'll be going to the region soon, and usually when she gets there, there's a little bit of activity beforehand and more voluble pronouncements about what may or may not be able to happen. And then when she's there, they seem to be able to keep moving forward and -- not necessarily have breakthroughs, but keep the process moving along. Read more Comment (0), Email this.

Q You mentioned how you're pretty happy with the results or you're seeing some benefits from the

DIRECTOR NUSSLE: Well, I think what's peculiar about the talk of a second stimulus is that as -- Dr. Lazear spoke of and I think many have spoken of having a comprehensive energy package that deals with production. The President has laid out a four-step plan in order to accomplish a number of the challenges that -- to meet some of the challenges that we need in oil production and energy production. And rather than take that on, which would be quite stimulative to the economy, it appears that Congress is talking about -- we haven't seen anything yet that has been announced, but because we're getting closer and closer to election day, the proposals we hear about sound a lot more like election stimulus, or political stimulus, than it does economic stimulus, which is not all that surprising, as close as we are to election time.

What's also interesting is that there seems to be some rush to consider so-called stimulus, albeit possibly political stimulus, when the rest of the appropriations process has not yet been tackled, again, a peculiar situation and one that has not been seen for -- in modern time. It was before I was born the last time Congress has not adopted an appropriation bill, even taken it to the floor, by this time in the session. So it's a very strange, peculiar thing to watch why Congress is so interested in stimulating the economy so-called, and yet there is basically inaction on the floors. Read more Comment (0), Email this.

MS. PERINO: They've said that before, Mark. They've said it before and they've been able to keep things on track. But they also -- they have a lot of issues to deal with. It's not just the international community that's interested in this, but they've got domestic politics that play into this, as well, and they have constituents. And surely they get frustrated at times, and I'm sure there are many times when they just want to throw up their hands and walk away, but a tribute to these leaders is that they've been able to keep at it. Their negotiators keep meeting and the President and Secretary Rice have been able to keep pushing them along. So I think let's let the Secretary have her trip there and see what can come out of it. Read more Comment (0), Email this.

DIRECTOR NUSSLE: Well, actually, as we have projected, as we've seen the actual numbers come in with regard to the prescription drug benefit, the actual cost over the projected cost when it was first passed has come down significantly. I believe the projected cost was about $630 billion. It is now down to, I believe, based on the actual trend rate and how it's been used, we're in the $400 billion range. So it has not had the kind of projected cost that many had thought it would when it was first enacted. So actually that has been generally some very positive news and provided a good benefit for seniors who needed to have prescription drugs as part of a modern health benefit under Medicare.

So we believe that's generally been positive news within this not only MSR, but generally within the fiscal condition of the country. That is not to suggest the GAO is not sounding an appropriate alarm with regard to the unfunded liability for the entitlements. And this is true across the board when it comes to, now, two-thirds of the budget. This is probably one of the more disappointing parts of what Congress is basically not doing, and, in fact, just turned off, or is proposing to turn off the so-called trigger mechanism from Medicare.

This all I think bodes very poorly for our ability as a country to deal with some of these entitlements. The President, in his budget, begins to address this unfunded liability. He does it by thirds. He basically says, let's tackle this in bite-size chunks, if you will, taking on a third in this budget, and then proposing to do so again in the future before they become insolvent. And those are I think positive ways to address the unfunded liability that GAO speaks about. I wish Congress would listen to GAO.

So, we'll see. Yes. Read more Comment (0), Email this.

MS. PERINO: Not necessarily, but we'll have to see, because it could be subject to change. Read more Comment (0), Email this.

Q You talked about Congress not finishing its appropriations bills. Congressional leaders are saying

DIRECTOR NUSSLE: Well, it's disappointing I think to me and I believe it's going to be disappointing to the American people that they're going to continue to draw a full year's salary and basically wait until next year to do any work. That to me seems like -- as though they're not doing the job that they signed up for. We understand that the Congress is basically gambling on the election, betting that they can get a better deal from the next President.

I hope the next President takes a look at this MSR, takes a look at the fiscal condition, and realizes that increasing taxes is not an answer, spending your way into prosperity -- government spending in particular -- is not an answer, and continuing to ignore the entitlement challenges is also not an answer. From what I read from what Congress is doing, they're going to basically ignore this until the next President comes here. That I believe is something they're going to have to be accountable for, not the President. Read more Comment (0), Email this.

MS. PERINO: I'm going to go to Ann. Read more Comment (0), Email this.

DIRECTOR NUSSLE: Until we have a chance to see what a CR looks like, a continuing resolution looks like -- Congress still has 19 days in which to do some work and make some determination of how they're going to address this fiscal year. If it's true they're going all the way until next March or April, I have a feeling that the American taxpayers may have something to say about that. Read more Comment (0), Email this.

MS. PERINO: Because we have had in our country since after 9/11 a huge amount of security costs that have been brought on our country. It's not just the war in Iraq. We have a war in Afghanistan and also a new Department of Homeland Security, and various measures that we're trying to take to prevent against any type of terrorist attack, one that would be -- explosive devices or biological or chemical or nuclear. We make no -- we make no apologies for the money we have spent to protect the people of this country.

And that is why we have on this discretionary side of the ledger, want to reduce how much money we were committing taxpayers to pay for. For example, we don't think that increasing spending over inflation, over the rate of inflation every year is a good idea, so the President has brought that down.

And I think what you'll see today is there is actually some numbers that are helpful. And if we can keep -- actually, I should say numbers that are hopeful. And if we can keep Congress from increasing taxes, or increasing spending unnecessarily, then we will be able to meet the President's goal, reducing the deficit in half by 2012. Read more Comment (0), Email this.

DIRECTOR NUSSLE: What we're doing, and we'll -- I think probably the best way to do that is to give you a copy of the amendment, let you have a chance to take a look at it -- but what we are doing is we are conforming the budget proposal itself to what the President has announced as part of his energy plan. And we're calling on Congress to adopt that. Congress, as you know, has a moratorium within their appropriation bill, and we're asking them to drop that moratorium. And that's the budget amendment that we're sending forward.

So, time for -- we'll come back to two more real quick and then we'll be done. Yes. Read more Comment (0), Email this.

MS. PERINO: I am going to let Director Nussle and Chairman Lazear answer specific questions, because they'll have the breakout. But I think there is lots of different issues that go into the cost, how much -- the cost of our deficit.

And one thing that Americans should get real serious about is entitlement spending, because that's eating up more and more parts of the budget, and it's going to start creeping into that discretionary spending and we'll all have less to spend on other things, or to bring down the deficit. Read more Comment (0), Email this.

DIRECTOR NUSSLE: Again, at this point in time, it's speculating, and I think what we'd like to do is take a look at, work with the Congress to see if, in fact, they're only going to send a continuing resolution. It's been a tradition in those situations for it to be clean -- so-called clean CR, but there are many things they may want to add, may want to subtract. We would have to take a look at that before we could give any advice to the President.

Last one. Read more Comment (0), Email this.

MS. PERINO: Okay, we're on our way to Peoria, Illinois. The President taped his radio address this morning before his briefings, and in it he will thank Congress for passing PEPFAR, which is the largest international health initiative dedicated to fighting a single disease in history. He will sign the bill on Wednesday at the White House, at an event. We'll get you details on that soon.

The President also in the radio address will discuss how America is using our foreign assistance to promote democracy and good government through the Millennium Challenge Account. And he will discuss how America is leading the fight against global hunger and for human rights.

As I said, he had his briefings and then we are going to attend -- he is going to attend the Schock for Congress and Congressional Trust 2008 Luncheon, and then we'll be back at the White House at 4:50 p.m.

I've got a week ahead -- do you want me to do it now or later? Read more Comment (0), Email this.

MS. PERINO: Okay. He'll be at the White House this weekend. On Monday at 11:15 a.m. he meets with the Prime Minister of Pakistan, Prime Minister Gillani. At 3:20 p.m. he will participate in a photo opportunity with members of the Texas 4-H and Youth Development Program in the East Room. That will be open to still photographers.

Then on Tuesday the President will travel to Cleveland, Ohio, to participate in a tour of Lincoln Electric Holdings, Incorporated. He will make remarks on energy and the economy there. And then he will also participate in another one of these Congressional Trust 2008 receptions, and that will be in Gates Mills, Ohio.

Then on Wednesday there will be a Cabinet meeting -- Read more Comment (0), Email this.

MS. PERINO: Well, for the tour? To be determined; probably pool. And then for the remarks, open. I just don't know how large the space is.

Wednesday, the 30th, he will have a Cabinet meeting in the Cabinet Room -- all right, no laughing? I said the Cabinet meeting in the Cabinet Room and I got no laughs, nothing. (Laughter.) Read more Comment (0), Email this.

MS. PERINO: Then that afternoon at 3:05 p.m. he will sign the PEPFAR bill. Then on Thursday he will have a photo opportunity with the Scouts in Action -- I'm sorry, with the recipients of the Scouts in Action Commendation on the North Portico for still photographers. And then at 10:25 a.m. he will make remarks at the 2008 Annual Meeting of the West Virginia Coal Association; that's in White Sulphur Springs, West Virginia. Then he will travel to Kennebunkport, Maine, then return -- well, then go to Camp David on the Sunday. So between Friday, August 1st, and Sunday we have no planned public events.

There's your schedule. Read more Comment (0), Email this.

MS. PERINO: Yes, they will leave Monday the 4th for the Asia trip, first going to South Korea, then Thailand, and then China for the Olympics. Two week aheads for the price of one. And then probably to the ranch later that week; date to be determined. Read more Comment (0), Email this.

Q Dana, Obama cancelled a planned visit to a military hospital in Germany based on recommendations

MS. PERINO: I have no idea. I'd refer you to the Pentagon. I don't think we had anything to do it with it, no. I'd refer you to the Pentagon. Read more Comment (0), Email this.

MS. PERINO: Well, you know, look, I think that for a couple of years now, people have thought that these talks were going to collapse, and they've kept going because leaders have -- enough leaders have recognized that -- how important it is to try to help these developing and very poor nations through free trade. So I have not heard that, Matt.

Earlier this week -- it was Tuesday that we put a new offer on the table to reduce our subsidies in exchange for market access. And as you heard, the President called Prime Minister Singh yesterday to encourage the process along. And so let me find out if there's anything more I can get from the U.S. Trade Representative's office. But right now we still are plugging along, trying to get it done. Read more Comment (0), Email this.

Q Can I ask kind of a process question about that. When you guys put an offer on the table about

MS. PERINO: I'm not exactly sure how Ambassador Schwab runs that process, but I do know that they have a very robust legislative affairs shop. And so in order to make sure we bring people along to know that we would -- bring people along with our position, I'm sure they have outreached to them. I know that certainly with the groups -- like the farming industry, the manufacturing goods, all those different types of industries -- have regular contact with the U.S. Trade Representative, because if you don't have them with you, then it's even harder.

So -- and I think all of the groups have been generally supportive. And typically if they're okay, then the members of Congress will be okay. So I'll see if there's anything more they can add. Read more Comment (0), Email this.

Q Dana, there's been a lot of talk this week about closed fundraisers. We're on our way to another

MS. PERINO: Sure. I think that Scott Stanzel talked to you a lot about this story this morning, but I'll repeat it for you here. Yes, there have been a couple of closed press fundraisers. There have been many. One of the things the President has done over time is helped to build up capacity in the committees, like the RNC and the NRCC and the NRSC, the victory committees, these congressional trusts, in ways that he can maximize the use of his time raising money for several clients -- not "clients" -- candidates, excuse me -- several candidates all at once.

I remind you that for the first time in 14 years, the President is not on the ballot. He is not running for office, nor is he going to be serving with anybody that he is helping to elect. And so you will see the President out. There's more demand than supply can meet. The President could be out doing -- you know, out on the road almost every day doing fundraisers, but he also has responsibilities as Commander-in-Chief.

And so you'll see him do -- he'll be out on the road doing some, but remember he's not on the ballot. Senator John McCain aspires to be the leader of this party and we intend to make sure that the light can fully shine on him, as it should, as he heads into the last 90 days before the election. Read more Comment (0), Email this.

Q Can I ask another just kind of related question about that. In previous election years, whether

MS. PERINO: It varies. It varies. I mean, some -- Read more Comment (0), Email this.

MS. PERINO: I think it varies. I know of instances where we are planning to be at -- in an area for an official event and then somebody there, maybe the state party or the victory committee or RNC or one of the candidates, will say, while you're here would you mind also doing a fundraiser. But sometimes there's not an official event to do at the same time. So sometimes you just have days like today where you just have a fundraiser. Read more Comment (0), Email this.

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

Read more Comment (0), Email this.

MS. PERINO: A special welcome to the Frattos. A couple of announcements, so bear with me here.

In his speech on the freedom agenda earlier this morning you heard the President discuss PEPFAR, which is the President's Emergency Plan for AIDS Relief. He noted the importance of continuing our commitment to fight HIV/AIDS, malaria and other diseases in the poorest countries. He emphasized that "nations afflicted with debilitating public health crises cannot build strong and prosperous societies for their citizens." And today the House is set to vote on final passage for the legislation to reauthorize PEPFAR and other diseases, the treatment for them. The President looks forward to passage of one of his highest priorities, and commends the many members from both sides of the aisle who worked to get it done. The bill will ensure that we are able to keep our commitments to replace disease and despair with healing and hope.

Also, it's come to light that Congressional Democrats plan a maneuver today to turn off what's called the "Medicare trigger." It was passed in 2003 and created a warning system whenever Medicare spending began to take a larger percentage of federal spending. Basically it required that when Medicare spending from general revenue exceeds 45 percent in two consecutive trustees' reports, the President would be required to propose a plan to Congress to reduce spending. Congress -- the Democratic leaders in Congress have decided not to take action, and would have the responsibility for acting on the proposals under expedited procedures.

Because they haven't acted and they ignored the warning, they have not fulfilled their obligations. Well, today, apparently Speaker Pelosi intends to do away with the trigger altogether for the remainder of the Congress, not only abandoning any responsibility to deal with runaway entitlement spending now, but to even get rid of the warning system altogether. This is the legislative equivalent of pulling out the fuse lights in your car, or the fuse in your car, when the "check engine" light is flashing.

The growth in entitlement spending, as you have heard the President say, is coming decades to -- in the coming decades will pose a tremendous risk to the United States economy. He has proposed ways in his budgets to deal with it, both on Medicare and also on Social Security. And we know that the Congress is reluctant to act on that as well.

There's another troubling aspect to all of this, and that is that actions by Democratic leaders to change the rules of the game when it gets to be uncomfortable, and we saw this with the Colombia free trade agreement. So instead of playing by their own rules, they just decided to change the rules altogether. And we're quite disappointed by this, and we'll be watching for further action.

That's it. Go ahead. Read more Comment (0), Email this.

Q I wanted to ask about the housing bill. You all obviously decided to support it. I'm curious,

MS. PERINO: There's several different aspects of the bill. You've mentioned a couple of them, but one of the things that we thought was most important, and the reason that the President decided that it was too important to have a prolonged veto fight -- that we were sure we would win and we proved that we would win yesterday -- is because Secretary Paulson has said that we need to have the GSE reform for Fannie Mae and Freddie Mac in order for us to be able to help stabilize the markets and provide confidence to the markets, which would not only help homeowners, but would help the overall economy. So that was the largest part of the bill.

Certainly, there are going to be some people that we are not going to be able to help that are going to have foreclosures. But we have been able, through HOPE NOW and through FHA Secure, two programs where we worked with the private sector and with HUD, to try to make sure that people could rework their loans. That will help, and this bill will provide some more help.

One of the things that we did not like about that $4 billion that the Democrats wanted to include in the bill is that it's an incentive for lenders to foreclose. Without that money -- if they think -- if the lenders think that they're going to get bailed out by the federal government, they're more incentivized then to foreclose on a property. What we would prefer is to not have that type of a bailout and to have the lenders be incentivized to try to work with the current homeowner to rework the loan in a way that the lender -- or that the homeowner can pay. So that -- those are the broad parameters of the bill.

Kathleen. Read more Comment (0), Email this.

MS. PERINO: Well, we've had certainly a slowdown in our economy, and we want everybody in America who wants to have a job to be able to find a job -- and we've been working to do that. We've said for a while that it was going to take some time for the stimulus package that we passed in February, for it to have an effect on job numbers. We also realize that the headwinds that were caused by rising gas prices and also the housing crisis that we just talked about are all having an impact. But we do think that towards the end of the year we'll be able to see some better growth, and that means jobs, too.

I would say that our unemployment rate in this country remains low by historic standards, but that doesn't mean that for the individual who is out there who is looking for a job or is concerned that they might lose their job, that the anxiety that comes with that makes for a less happy and productive life. And so that's why we want to try to get ourselves back on a path to job growth. Read more Comment (0), Email this.

Q Dana, following on what Jennifer was asking about -- so the figures about sales for existing homes

MS. PERINO: Well, we have said for a while that the housing crisis is something that we needed to deal with. In fact, it was last August 31st when President Bush saw the -- listened to his advisors, who recognized that the housing crisis was coming, and asked Congress to act. We're 11 months now from that time frame and we think that if we could have acted sooner, we could have helped do a couple of things, such as on this GSE reform getting a strong regulator in place to make sure that Fannie Mae and Freddie Mac are focusing on their core missions, which is to help homeowners, and in particular, help low-income homeowners. We think that's what they should be focused on because that is their mandate in the statute.

But we also recognize that the GSE reforms would help stabilize the market, and that's one of the things that without this housing bill -- even though the housing bill -- even though the President said yesterday he wouldn't veto it, it still hasn't passed.

So -- I'm not a market analyst. Things go up and down in a market all the time. I think it's wrong for me from this podium to try to judge why that's happening. There's lots of financial experts and I'm sure you can talk to them. But I think let's take a look and see if we can get this bill signed and into law once the Congress passes it and up to the President, and then take it from there. But we do think it will have an impact on the overall health of the market in terms of stability and confidence in the financial markets. Read more Comment (0), Email this.

Q Dana, the provincial elections in Iraq have been seen as necessary for reconciliation between the

MS. PERINO: No, I don't think -- what Ambassador Crocker was talking about was long-term political gains and long-term democratic institutions that could solidify. I think that we've already said that we think that we'll be able to start bringing -- keep bringing troops home based on success, given that we've been able to have a lot of the surge implementation take place over the past year, and it's taking hold in many places. But as we've said, the gains aren't irreversible.

I don't think that Ambassador Crocker was suggesting in any way about troops, especially combat troops, being there for decades. I think he was just talking about the reality of when you take a country that was broken by a dictator and you try to rebuild it. Iraq is certainly going to be a lot farther along than Afghanistan, just given from -- where they started from. Read more Comment (0), Email this.

MS. PERINO: I don't know what future troop posture would be, but I certainly don't think anybody is forecasting that. Now, we do have presence in countries where we -- countries that we used to be at war with, such as Japan and Germany, Korea. But those are different configurations altogether. So I think that what we'd like to do is get them stabilized and able to take on more of their own responsibility for their security. But they've also improved a lot on the diplomatic side of things.

But there's deep-rooted tensions, and some hatred, even, inside Iraq and then outside within the region. But they've made great strides. We now have an ambassador coming to Iraq from Kuwait, which is the first time since -- for a couple of decades. You have the UAE, who has just agreed to forgive their debt. You have Turkey playing a more helpful role. You have Jordan playing a more helpful role; Saudi Arabia has suggested that they would send an ambassador.

So it is going to take some time, but it's moving in the right direction. Read more Comment (0), Email this.

MS. PERINO: We are hopeful that they are, but I think that, as Ambassador Crocker said and the Iraqis have said, that the hope for an October time frame is unrealistic at this point because the election law was vetoed by both of the -- I think the President and the Prime Minister. So it goes back to the legislature, and hopefully now that they can work out their differences.

But one of the big issues is the Kirkuk region, and it's going to be something they have to work through. But they will do that. Just remember that the Iraqis now are trying to solve their problems in the parliament; they're not trying to solve them in the streets with violence. And that's remarkable in itself, given where we were a year ago. Read more Comment (0), Email this.

Q On -- earlier today the President talked to Prime Minister Singh and they discussed the trade talks

MS. PERINO: We're working to get a deal by the end of the year. I don't know specifically what the Prime Minister and the President talked about; we'll keep that confidential. Regardless, even though I don't -- I wasn't there; I don't have the exact conversation in front of me, either -- we do think that it's important to get a deal. We've been working hard towards it. We just made concessions ourselves on Tuesday of this week, and we would like other countries to do so as well. It's going to take them moving forward as well as us. So we have to take steps together at the same time. It's one of the reasons the President has continued to work and call individuals. And let's just see how it plays out. We'll try to reach out to USTR and see if they have an update later. Read more Comment (0), Email this.

MS. PERINO: I think there's a SAP that we will have, a statement of administration position, that will be coming out soon. The House Republicans, the only thing that they're asking for, when it comes to adding -- I'm sorry, I shouldn't say just -- House and Senate Republicans, what they are both asking for when it comes to increasing supply in our country is the ability for them to vote on the issue. And so -- and that's on the overall issues.

When it comes to the SPR, we have made our points clear about this before. The SPR, when it first came into being, was set up for national emergencies. It's the nation's energy insurance policy. And we don't think it should be raided for purposes that were -- to try to manipulate price. It's been tried in the past -- it hasn't worked -- and because of action taken by Congress recently, we even stopping filling the SPR. That did not have an impact on price.

And so I think that instead of wasting time talking about the Strategic Petroleum Reserve, that they should look to what the House and Senate Republicans are asking for -- and many Democrats -- which is a chance to vote on looking for more resources here in our own country. Don't think the SPR is the right place to get it done.

I think in some cases the Democrats believe that a problem delayed is a problem half-solved, and we've seen over the decades that that is not the case, given that prices continually rise. We used to see this every spring and then they'd slightly go down in the fall. But right now when you look at the issues of supply and demand in the emerging countries like India and China, the demand doesn't seem to be tapering off at all.

So you're going to have to do something on the supply side, and tapping into 700 million barrels of the SPR, which is our national insurance policy, doesn't seem like the best idea, when in fact we could send a signal to the market that we would be willing to look for domestic resources in our own country. For example, the Outer Continental Shelf, they estimate it has 18 billion barrels of oil; up in ANWR, 10.4 billion barrels; and oil shale, 800 billion barrels. Compare that to 700 million barrels in the SPR and I think you can see why the math doesn't add up. Read more Comment (0), Email this.

MS. PERINO: I believe -- we'll have to say that senior advisors will recommend a veto, yes.

Ann. Read more Comment (0), Email this.

MS. PERINO: Again, I'm not a market analyst and I couldn't tell you why it's gone down in price -- Read more Comment (0), Email this.

MS. PERINO: And the President -- he puts himself in the same category, as not somebody who predicts the markets or can explain all the different pieces. But we have seen that Americans are starting to drive less, slightly less, which can help reduce demand. But in addition to that, possibly the markets are looking at the fact that there are more people being more serious about looking for resources in our own country, which would send a signal that we would finally start to bring on more supply. Read more Comment (0), Email this.

Q Can I ask one on Iraq as well? The Iraqi Olympic athletes have been told they have to stay home

MS. PERINO: I'm not sure if we offered any advice. I would refer you to Ambassador Crocker's office because -- obviously that's not really been their focus so much. And I'm sure that they got advice from others, and I don't know the particular details as to why Prime Minister Maliki decided to take that action. But I'm sure that the Iraqi athletes who have trained so hard and were finally going to represent a country that is free and sovereign and working to establish its democracy, they have to be terribly disappointed, and I'm disappointed for the athletes as well. Read more Comment (0), Email this.

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