MR. FRATTO: Good afternoon, everyone. A couple things for you. General Petraeus and General Odierno -- we're expecting votes on the two generals on the floor this afternoon. I think we just heard it will be at 2:00 p.m. on the Senate. So, you know, very hopeful that the Senate will confirm both General Petraeus and General Odierno -- General Odierno as the new multinational force commander in Iraq, and General Petraeus as the commander of Central Command.

While serving in Iraq, General Petraeus and General Odierno have proven to be two of the finest military leaders in our nation's history. The President is confident that they are the best men to serve in these positions. They will both do an excellent job in leading our troops to confront challenges in the war on terror and helping to keep our nation safe. And so we look forward to a vote in the Senate floor this afternoon.

Also, I know I heard from a lot of you after you saw the Senate vote yesterday, after the successful passage of the FISA bill, the vote on the Medicare physician reimbursement bill. As you know, we had a senior advisor's veto threat out on this bill, and we had a SAP that spelled out all of our objections to this bill. And the questions I know I received were, does the President still intend to veto this bill? And the answer is yes. Our concerns with this bill -- actually, let me back off and just talk about -- one of the goals of this bill was to ensure that physicians get their reimbursements. If the President want to -- wanted to see and wants to see physicians get their full reimbursement. That was never an issue in this whole debate.

What became an issue was how the Senate and how the Congress chose to pay for this bill, and the way they did it was to make very steep cuts in the Medicare Advantage plan. Our view has always been that we trust customers to make -- consumers to make smart choices. We want to make sure that they have the information and that they have choices. Taking choices away from seniors in order to pay for the reimbursement for physicians is the wrong way to pass this bill and to extend the reimbursements that we want to see physicians get.

So we're disappointed in that vote. The President does intend to veto it for that reason. We're concerned about the impact of that should this bill eventually become law. We expect that one of the impacts of this bill is it will remove about 2 million seniors from a wildly popular Medicare Advantage private plan. We don't want to see choices being removed from the 9.6 million seniors who are in this program, and our estimates lead us to expect that as many as 2 million seniors will have to drop off the Medicare Advantage program, and that's the wrong way to do it.

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

MR. FRATTO: I don't have any -- I don't have our own -- U.S. government verification that there were any additional tests. I think, you know, that -- but they did test the day before. That -- Read more Comment (0), Email this.

MR. FRATTO: No, I understand, Terry, and all I'm saying is that I can't -- it's nothing that I can confirm right now, and maybe that's something that can happen later. But on the subject of testing missiles, you know, the -- nothing changes with respect to the way the Iraqi government is putting the Iraqi people in a very isolated position -- I'm sorry, the Iranian people in an isolated position because of these tests in defiance of the international community.

This -- these are -- these tests are in violation of -- or the expanded use of ballistic missiles are in violation of U.N. Security Council resolutions. We are dealing with the threats in Iran in a very direct way through the P5-plus-1 process. We have -- Mr. Solana will be in Iran next week to continue these discussions. We want to see them stop enriching uranium, and we'd like to see them stop these provocative tests that only further isolate the Iranian people. Read more Comment (0), Email this.

MR. FRATTO: We've also seen, you know, Photoshopped pictures on the internet of missile tests. Yes, I -- Read more Comment (0), Email this.

MR. FRATTO: Yes, I checked, Bill, and I wasn't able to get confirmation on that.

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

MR. FRATTO: Not beyond -- I can't speak beyond the people named in official sanctions. There are individuals and entities named in U.N. Security Council sanctions. I can't go beyond that. Read more Comment (0), Email this.

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

Q As far as the nuclear deal is concerned, it may not be in trouble because it will go through in

MR. FRATTO: I wasn't there when -- you know, at their bilateral meeting. I would be -- I understand that they did talk about the nuclear deal. On that specific, that's not something I could confirm, but we do appreciate Prime Minister Singh's willingness to move forward with this deal. It's a historic agreement, this strategic partnership, and we think the initiative will help strengthen global nonproliferation efforts. So it's a positive thing and we appreciate the commitment by the Prime Minister.

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

Q On Iran -- I realize you can't confirm the second test, but at the very least it looks like Iran

MR. FRATTO: No, look, I think -- Secretary Gates characterized it as sending signals yesterday. That was his take on it. I don't have any reason to have a different view on that. The bottom line is, though, that what we are focused on is the bigger picture of trying to encourage the Iranian regime to join the international community and deal with these very real concerns that we all have. Remember that the -- you know, the Security Council resolutions dealing with Iran were unanimous votes in the U.N. Security Council.

The world stands united on this. The President, in his bilateral meetings and meetings at the G8 meetings over the recent days, Iran was a point of discussion. His visit to Europe a few weeks ago Iran was an important part of discussion. We saw the European Community move forward with sanctions. What our goal is is to use diplomacy as best as possible to bring Iran to the table in a way that we can resolve this peacefully.

And we know that from time to time that things like missile tests or movements in the Persian Gulf of ships and so forth are going to take place. We don't want to be distracted by that and try to stay focused on the diplomatic efforts, which we think, if we stick together with our allies on this, that we can be successful. Read more Comment (0), Email this.

MR. FRATTO: We hope that's not the case. We hope that there's sufficient communication from everyone involved, and that they're seeing these things in a clear-headed way, and thinking in a clear-headed way also.

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

MR. FRATTO: Not that I'm aware of. I know that they spoke recently in Japan, and Secretary Rice of course is in Georgia -- I'm not sure if she's left yet. Secretary Rice will report back to the President on her views on that, but I don't have anything on expected talks between -- additional talks between the President and President Medvedev. Read more Comment (0), Email this.

MR. FRATTO: We would have like to have seen a 100-0 vote for FISA, because it's such an outstanding bill, it's an important bill. I'm not going to comment on any one member's vote for it; they can answer for themselves as to why they voted for it and what the thinking was. We would have liked to have seen every member vote for it. Read more Comment (0), Email this.

MR. FRATTO: I don't have a comment on what Senator Obama's thinking was on it. But there were a large number of Democrats who voted for the FISA bill, and we think for very good reasons. And one of the leaders in crafting this bill and crafting an earlier bill was Senator Jay Rockefeller, for example. And there was great bipartisan cooperation on this to make sure that it gave the intelligence community the tools they need, but also significantly protected civil liberties. And that was something that was important to us also.

So this bill was, you know, very -- thoroughly debated. It was negotiated by very serious people from both sides of the aisle for a great deal of time, and really going through every word in this document to make sure that it accomplishes what we think is necessary for the country to keep it safe, but again also to protect civil liberties. And I think that's something that people on both sides of the aisle felt that they could support, and we saw that in a very strong vote yesterday.

Yes, John. Okay, then I'll get you next. Read more Comment (0), Email this.

MR. FRATTO: Yes, I think it'll be a good opportunity to get a review of what we're seeing in the economy today, both in the real economy -- I think I mentioned in the gaggle this morning that we're getting down to the last days of the stimulus checks that have gone out. So maybe we can get -- the President will have an opportunity to get a little better reading from Secretary Paulson and his other economic advisors.

We're going to be at the Energy Department. That's no -- that's by design. We want to be there to talk about what's going on with energy markets and oil and to -- and the opportunity to help bring down prices and increase supply here domestically. So the President will have a chance to talk about those issues, also the Outer Continental Shelf and refinery issues that you heard him spoke about -- speak about not too long ago. So it'll be a good review, but they'll certainly focus on energy.

Yes, Kevin. Read more Comment (0), Email this.

Q Speaking of that, Tony, there's been some talk on the Hill about maybe accessing some of the SPR

MR. FRATTO: Look, I think it's good that there are members who are interested in increasing supply of oil here. I think what's disappointing is that the only place they can seem to want to access that supply is in this storage of oil that we set aside for dealing with national emergencies.

Now, there are other supplies of oil out there that we'd like to access, and that's the Outer Continental Shelf and ANWR. And these are places that, were we able to explore and eventually bring to market oil from these sources, that have a long-term impact on prices, rather than some, you know, very minimal short-term impact on prices -- and at the expense of a resource that is here for us to deal with an emergency. We did it dealing with an emergency after Katrina, where we had a supply disruption. If there were an attack on a major pipeline somewhere that would disrupt global supplies of oil, that's what those -- that's what the Strategic Petroleum Reserve is for.

It is not there to try to market-time and to try to manipulate prices in the market. And unless you wanted to do very large withdrawals of the -- from the fund, it wouldn't have a lasting impact on oil prices. So we'd like to see members think a little bit more long term and take advantage of the opportunity that we have to do drilling from our domestic sources. Read more Comment (0), Email this.

MR. FRATTO: I'll come to you next, Ann. Read more Comment (0), Email this.

Q Would you want to do sort of a concert thing -- take some from SPR and if -- (laughter) -- in one

MR. FRATTO: Yes, I haven't heard that discussed, but you do -- you are obliquely talking about something that we have heard members who may have previously been against opportunities for drilling, and we're getting some signals that they may be interested in looking for ways that we can find a way to increase exploration and drilling in some of the areas that the President talked about. And that would be a good sign because we would like to try to get something done on this issue.

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

MR. FRATTO: We heard it's not the new normal. He hasn't heard -- no one has -- Read more Comment (0), Email this.

MR. FRATTO: Sorry, Ann -- Read more Comment (0), Email this.

MR. FRATTO: I don't think anyone would have told the President that $4 a gallon is the new normal, and we certainly hope it's not the new normal. It is very, very difficult to try to predict gasoline prices as to where they're going in the future. No one was predicting that we would continue to see gasoline prices increase beyond where they are today. Read more Comment (0), Email this.

MR. FRATTO: No, no, the President isn't making those kinds of predictions. What he's saying is that we have a situation where we have rapidly increasing and increasing for, you know, pretty much as far as we can see, global demand for oil. And right now as long as we keep the sources of oil off the market, we're not going to see increases in supply. And as anyone who has taken an Econ 101 course knows, that if you don't increase supply and you only increase demand, prices are going to rise. Read more Comment (0), Email this.

MR. FRATTO: All I could say is that we would be hopeful that it could, but the best way to ensure that it does is that we take some of these necessary measures and send a signal to the market that we intend to bring supply on and that we intend to continue as we've done on the conservation side through increased fuel economy standards and through the increased use of alternative fuels, so that we can try to lower the demand on oil as we're increasing supply. Read more Comment (0), Email this.

MR. FRATTO: I'm going to go to April, Les, and I'll come back to you. Read more Comment (0), Email this.

Q Tony, going back to the economy and the stimulus checks, you said this is the last week that they

MR. FRATTO: Yes, that's a really good point. I'm actually glad you brought that up. No, this is on the regular run of stimulus checks, the sort of universe of people who had already filed tax returns. There are a not insubstantial number of seniors and veterans out there who we've been trying to encourage, and I know the IRS has been trying to reach out to them to -- these are individuals who don't ordinarily file an income tax return, and we've been trying to encourage them to file an income tax return even if they don't have reportable income, so that they can take advantage of this stimulus check and make sure that they get it. Read more Comment (0), Email this.

MR. FRATTO: Oh, yes, absolutely. Read more Comment (0), Email this.

MR. FRATTO: On the -- New Orleans, yes. Read more Comment (0), Email this.

MR. FRATTO: Yes. I think we would need either New Orleans officials or Census Bureau officials to give you an authoritative answer on that, but remember you had a large outflow of people into New Orleans, and it could be the flow back of people returning to New Orleans who -- that are showing up in that rapid increase. But, you know, we know New Orleans is a wonderful place. It's a wonderful part of the country. It's an incredibly beautiful and historic city, and want to see it returning. We are trying to make sure that it always has -- that it has the resources necessary to rebuild after the hurricanes and that -- you know, for another additional few hundred years on its history that it remains a great destination not just for people at conventions and Super Bowls, but also people to live. And so that was a -- that was good news to see, certainly. Read more Comment (0), Email this.

Q Will this be a blemish on the President's legacy, even though it's -- I mean, we have six months

MR. FRATTO: I think there's a lot of history to be written on -- with respect to Katrina. It was a -- you know, obviously a devastating storm. It was devastating to the people of that region. It exposed some weaknesses in our ability to deal with a natural disaster of that size and scope. I'm not sure that at any time that a federal government and state government and local governments would have had the capacity to deal with that kind of storm, but one thing that I hope is part of the legacy is what was learned from that storm of what's needed to be able to respond to large natural disasters.

And I think we saw that FEMA's response to the Midwest floods, where I think all of the local communities and states were noting FEMA's terrific response in that region -- not just FEMA, but all of the other agencies -- DHS and the Small Business Administration and HHS and Department of Agriculture who were all working together, well coordinated, and being able to deal with these large natural disasters.

So that was, you know, something good that comes out of it. We want to see New Orleans rebuilt and the residents can continue to be proud of their city.

Yes, Les. Read more Comment (0), Email this.

MR. FRATTO: I'm not aware that the President knows of that issue, so I have nothing on that. Read more Comment (0), Email this.

MR. FRATTO: Are any of them here to defend themselves? Doesn't look like it. (Laughter.) Read more Comment (0), Email this.

MR. FRATTO: That's for your industry to work out. Read more Comment (0), Email this.