MR. JOHNDROE: Good morning, everyone. President Bush called Israeli Prime Minister Olmert this morning to discuss the ongoing situation in Israel and Gaza.

The President also called Prime Minister Singh of India, and separately, President Zardari of Pakistan. President Bush urged both countries to cooperate with each other in the Mumbai attack investigation, as well as on counterterrorism in general. All three leaders from the United States, India and Pakistan, agreed that no one wanted to take any steps that unnecessarily raised tensions. In addition to the calls, the President also received his daily intelligence briefing.

This evening the President will spend a quiet New Year's Eve on the ranch with Mrs. Bush and some longtime friends from Texas.

And with that, any questions? Toby. Read more Comment (0), Email this.

MR. JOHNDROE: Prime Minister Olmert assured President Bush that Israel is taking appropriate steps to avoid civilian casualties. That was something the President asked for an update on, and got a -- President Bush got an assurance from Prime Minister Olmert that Israel is, as they have said they are doing, only targeting Hamas and that terrorist organization, and people involved with Hamas, and that they are working to minimize any civilian casualties.

I think the purpose of the call in general was to get an update from Prime Minister Olmert on where he sees the current situation right now as it relates to Gaza, and to think about what the future steps are. Read more Comment (0), Email this.

MR. JOHNDROE: I think President Bush thinks that Hamas needs to stop firing rockets and that is what will be the first steps in a cease-fire, and that Hamas needs to agree not only to stop firing rockets now, but to not fire any rockets in the future, stop smuggling weapons in so they don't even have the ability to fire rockets, which also shows a good intent that they don't intend to continue to target Israel. So I think they're certainly on the same page on that.

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

MR. JOHNDROE: They discussed what steps could lead to a cessation of violence. I don't want to get into too many details, but no matter what the details are, it all begins with Hamas agreeing to stop firing rockets and to stop targeting Israel.

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

MR. JOHNDROE: As I said, I'm not going to get into too many details of their conversation, but I don't look at a -- a ground offensive is a very -- it's a large -- it's a term that encompasses a lot of things. It probably means different things to different people. And I think it is just part and parcel of the overall operation that Israel is undertaking to rid Hamas of its ability to fire rockets into Israel.

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

MR. JOHNDROE: You asked -- the question is, is the U.S. still asking Israel to accept a cease-fire? I don't recall any specific announcements or requests that we've made on that front, except to say that we want to see a cease-fire that is durable, that is lasting, and that, in particular, is respected by Hamas. And that's -- Read more Comment (0), Email this.

MR. JOHNDROE: Look, we all want to see an end to the violence. We absolutely all want to see an end to the violence as soon as possible. But we also don't want to see it start up again in two days, three days, two weeks, three weeks, two months, three months. There needs to be a sustainable and durable cease-fire that Hamas respects. That's what we want to see. Read more Comment (0), Email this.

MR. JOHNDROE: President Bush is disappointed that Hamas continues to fire rockets onto the innocent people of Israel.

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

MR. JOHNDROE: Asking about timing of air strikes, or the cessation of air strikes. They talked about the ongoing operation, and again, Prime Minister Olmert's assurance that they're seeking only -- or targeting only Hamas operatives, those affiliated with Hamas. But there's not a timetable that I can get into, nor did they really get into specific timetables, because what's more important is the goal.

As I said, we all want to see an end to the violence as soon as possible. President Bush wants to see an end to the violence. I know Prime Minister Olmert wants to see an end to the violence. But I think probably from the Prime Minister's perspective, an end to the violence first means that Hamas stops firing rockets into Israel. And then Israel won't need to go after the rocket launchers.

And so I think we want to see a cease-fire that's durable and lasting. And the most important thing is that Hamas respect it. They had a cease-fire up until about December 19th. Hamas sort of respected it. They fired rockets from time to time. There was about four months of calm. But then they failed to renew the cease-fire, and substantially increased the rockets to a level that forced Israelis in southern Israel to live in -- spend a lot of time in bomb shelters, to a level that was unacceptable to them. So the onus is on Hamas.

They also discussed the humanitarian shipments going into Gaza. Israel has permitted dozens of truckloads. And so we're seeing a good flow of humanitarian goods, medical supplies, food into Gaza from various ports of entry. President Bush is certainly concerned about the innocent people of Gaza, and wants to make sure that they have the supplies they need.

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

MR. JOHNDROE: Have I seen any ramped up activity from Iran towards Israel. I've seen no change in their position in their desire to wipe Israel off the face of the earth, which they have stated a couple of times before. So I haven't seen anything new on that front.

I think Hamas is pretty well-supplied by Iran, and to a certain extent, Syria. I mean, these two countries, Iran and Syria, supply Hamas and Hezbollah. I mean, they're basically their proxies in the region and in other parts of the world. And so I don't think Iran or Syria -- neither Iran nor Syria have been playing a helpful role, they are not playing a constructive role in this current crisis, which is pretty typical for their actions with regards to Hamas and Hezbollah. They continue to supply them. Read more Comment (0), Email this.

MR. JOHNDROE: Weapons. Weapons. So we'd like to see -- there are some Arab states that are stepping forward and saying, we want peace in the Middle East. You have Egypt playing a positive role; Jordan; Saudi Arabia is very concerned. And then you have countries on the other end -- Iran and Syria -- who seem to want to continue to foment violence. And we'll see.

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

MR. JOHNDROE: I'm not going to get into any specifics on supplies from Iran and Syria that we've seen over the last few days, but there is no doubt that Iran and Syria are the ones who have assisted Hamas with their weapons acquisition, and that's a problem. Read more Comment (0), Email this.

MR. JOHNDROE: I don't know what Hamas needs to study. I mean, I'm not sure -- I don't get what Hamas needs to study. Hamas needs to stop firing rockets into Israel. It's very clear.

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

MR. JOHNDROE: They discussed their mutual desire to see an end to violence, but they also discussed that there is a need for a lasting and durable cease-fire that Hamas respects. I think most countries understand the need -- that a cease-fire that Hamas doesn't agree to isn't a -- they may agree to it, but a cease-fire that they don't respect is not worth the paper that it's written on, because then we'll see violence flare up again in a couple days, a couple weeks, a couple of months.

So President Bush wants an end to the violence, but he also wants a durable and lasting peace. Read more Comment (0), Email this.

MR. JOHNDROE: I'm not going to get into the specifics. They both committed to wanting to see an end to the violence right away, and they both realize an end to the violence will come when Hamas stops firing rockets into Israel.

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

MR. JOHNDROE: The Quartet statement says an immediate cease-fire that is fully respected. I think those statements are very consistent. I've been talking about the need for Hamas to fully respect a cease-fire since Monday, or otherwise it won't be worth anything, no matter whether it's immediate or not. So we all want to see an end to the violence. It has to be a respected cease-fire. I think that we're all on the same page.

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

MR. JOHNDROE: You know, there's nothing wrong with a cessation of violence. But at the end of the day, we still need to see a cease-fire that will be an agreement that is lasting and durable. So a pause in fighting, you know, I don't have any issue or concern with that. But there can't be a pause in fighting that, you know, is that -- is a pause, and all of a sudden Hamas arms up again, fires another 150 rockets into southern Israel. So we'll just have to see. We'll have to see.

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

MR. JOHNDROE: We'll have to see. Hamas hopefully realizes that they are in a situation that is not helpful to their own people. I mean, their own people are dependent on supplies from the United States and other countries. And so hopefully the Hamas leaders will realize that that is not a -- that sort of situation doesn't lead to a viable, independent state. So we'll see.

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

MR. JOHNDROE: Changing topics? Read more Comment (0), Email this.

MR. JOHNDROE: No.

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

MR. JOHNDROE: I'm not aware of any travel by the Secretary at this point, but we'll keep you updated if that changes. I would say -- I think you've heard from the State Department -- Secretary Rice has been working the phones almost non-stop since Saturday. She's spoken to many, many leaders in the region and Europe and around the world on this issue, which is -- and the goal of her phone calls, the goal of the President's phone calls, the diplomacy the administration has engaged in, is to work with other countries to pressure Hamas, make them understand that a lasting, durable and respected cease-fire is the best thing for their own -- for the people of Gaza.

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

MR. JOHNDROE: I think because the President has worked so closely with Prime Minister Olmert, with other leaders in the region, to include President Abbas and Prime Minister Fayyad, the President is someone, President Bush is someone that these leaders listen to, they appreciate his support and his understanding. And so I think that one thing that's clear is that he's established relationships that allow him to pick up the phone, give these leaders a call, and have a very frank, honest, and open discussion.

I'll also say even in a transition, the United States is a country that is always looked to during times of crisis, and during times of peace as well. Everyone in the world is constantly interested in what does the United States think, and what does the United States want to do about this. And I think that was true before President Bush, and it will be true after President Bush.

Okay, next subject. Anne. Read more Comment (0), Email this.

Q Can we go back to India and Pakistan? I'd like a little bit more information on the President's conversation

MR. JOHNDROE: I'm not going to get into details. I don't recall that specific issue coming up, that specific element coming up. The calls he had with Prime Minister Singh, and separately with President Zardari, were encouraging the sides to cooperate not only on the Mumbai investigation, but also on counterterrorism in general. And I'll leave it at that.

Okay, all right. Well, Happy New Year's Eve. Read more Comment (0), Email this.

MR. JOHNDROE: How can I help you? (Laughter.) Read more Comment (0), Email this.

MR. JOHNDROE: President Bush's message to the people of Cuba is that we stand with you. We want to see them live in freedom. And the United States will continue to stand with the people of Cuba. The Castro brothers have not treated their people particularly well. Many political dissidents are in jail. The economy is suffering and not free. And the United States will continue to try to seek the freedom of the people of Cuba, and support them. Read more Comment (0), Email this.

MR. JOHNDROE: Is this my last briefing from here? It is probably my last briefing from here forever. Read more Comment (0), Email this.

MR. JOHNDROE: Yes. You know, I know the President, 20 days from now, will return to Texas. They'll spend a lot of time in Dallas, but I also expect they'll continue to spend time down here in Crawford on the weekends, and, you know, possibly during the holidays. I know that he and Mrs. Bush have found their time here in Crawford to be exceptionally good. This was a place they could come and relax, get out of the spotlight a little bit -- although the presidency follows you everywhere -- just look, we're all standing here just a few miles from the ranch.

So I think this has been a place where they've been able to get away from it a little bit. And I think that they look forward to coming back to Texas in just less than three weeks.

But we'll always have fond memories of everything that took place here in Crawford during the presidency -- all the various world leader meetings, and standing in an auditorium, I think, with Tony Blair one time, and Vladimir Putin one time, here, speaking to the school children at Crawford, Texas. So I think they'll always have very, very fond memories of their time as President and First Lady here in Crawford. And then they'll continue to come back here and Dallas when it's all over. Read more Comment (0), Email this.

MR. JOHNDROE: No, I don't have any specifics yet, but as we get closer, we will let you know.

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

MR. JOHNDROE: We talked about that this morning. I expect he and Mrs. Bush will get up to see the sun rise on the New Year. It's been a tradition they've had for I think for almost their entire presidency down here -- they've woken up and gone for a sunrise walk on the ranch. It's something they've always enjoyed doing and look forward to doing tomorrow. Read more Comment (0), Email this.

MR. JOHNDROE: We'll check with him in the morning, but I would -- I'm not sure. I'm not sure about that. I think he's more likely to be an early riser for the first of the New Year rather than to see the old year -- to see the old year out. Read more Comment (0), Email this.

MR. JOHNDROE: No, amidst all the phone calls and intelligence briefings and New Year's Eve plans, I forgot to see what's on his reading list. But I'll check tomorrow. Read more Comment (0), Email this.

MR. JOHNDROE: Okay, good afternoon. This morning President Bush received his daily intelligence briefing. He then met via secure video with his senior advisors to discuss the latest developments regarding the situation in the Middle East.

Also this morning President Bush called Egyptian President Hosni Mubarak to thank him for his leadership and for the positive role that Egypt is playing in the current crisis.

The President also called Palestinian Authority President Abbas and Palestinian Authority Prime Minister Fayyad. President Bush and the two Palestinian leaders discussed their efforts for a sustainable ceasefire. They agreed that for any ceasefire to be effective, it must be respected, particularly by Hamas.

President Bush reiterated his concern about the citizens of Gaza, as well as the United States' desire to help with the humanitarian situation there. Prime Minister Fayyad thanked President Bush for the recent U.S. contribution to the United Nation Relief and Works Agency to assist the Palestinian people.

With that, I will be happy to take your questions.

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

MR. JOHNDROE: No, I think a ceasefire that is sustainable and durable, what we've been calling for, is one that is exactly that -- it's lasting. We don't just want a ceasefire for the sake of a ceasefire, only for violence to start up immediately, or within the next few weeks. That serves no one's interest, as President Bush discussed with Prime Minister Fayyad, and -- Read more Comment (0), Email this.

MR. JOHNDROE: We have got to get a commitment from Hamas that they would respect any ceasefire and make it lasting and durable. And so until we can get that assurance -- not the United States, but until Israel can get that assurance from Hamas -- then we're not going to have a ceasefire that is worth the paper it's written on.

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

MR. JOHNDROE: Well, you know, Egypt brokered the last ceasefire, the one that was in place for six months that expired last week, that Hamas failed to renew -- and not only did they fail to renew the ceasefire, then they substantially increased their rocket and mortar attacks into Israel within the last few days.

These other governments in the region, such as Egypt, the officials in the Palestinian Authority, Jordanians, others who are in touch with the various Hamas factions, will make it clear that this is in no one's interests -- certainly not the Palestinian people, certainly not the people of Gaza, and definitely not the people of the entire Middle East region. This sort of violence is in no one's interest. So all those governments, as they have been in the past, are committed to assisting with the current situation.

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

MR. JOHNDROE: You know, that's 21 days from now and I'm not going to speculate about this. I think we all want to see an end to the violence. But that first starts with Hamas ceasing its rocket attacks into Israel.

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

MR. JOHNDROE: As I've said, we think, one, we want to see an end to the violence. But two, we want to see an end to the violence for the long term, not just the immediate. So again, we don't want a ceasefire agreement that isn't worth the piece of paper it's written on. We want something that's lasting, and most importantly, respected by Hamas.

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

MR. JOHNDROE: I've seen various figures about the number of people in Gaza killed. It is not for me to speak to the facts of who has been killed or wounded in this. We have urged the Israelis to avoid civilian casualties. But I would also say, you know, let's be careful in assessing these numbers, and what the police force is or isn't -- whether the police force of Hamas-controlled Gaza is or isn't working on keeping the peace.

I'm not sure that that's something that any of us can say with any certitude. Hamas had its tentacles throughout Gaza, and was recruiting and training. And we see that manifested through these various rocket and mortar attacks.

And so let's be careful. We want Israel to avoid civilian casualties. But let's be careful about some of the numbers we're seeing coming out of Gaza.

But also, what about the three people I believe I saw reported today that were killed in Israel by rockets. I'm not going to compare numbers between the two locations. I'm just saying that this is a conflict with two sides, and both of -- both these sides I think know how to end this: Hamas stops firing rockets, and Israel will not see a need to protect its people from rocket attack.

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

Q There are reports out today that the Israeli cabinet is considering a 48-hour ceasefire truce to

MR. JOHNDROE: I would say that both Secretary Rice and National Security Advisor Steve Hadley have been in touch with Prime Minister Olmert and his staff. But beyond that, I'm not going to get into those discussions. As you said, the Israeli cabinet is supposed to meet tomorrow. Let's let the cabinet meet, and then go from there. Read more Comment (0), Email this.

MR. JOHNDROE: Well, as I've said, as President Bush told Prime Minister Fayyad and President Abbas, the United States is concerned about the humanitarian situation. That's why we released $85 million today, although this money has been in the pipeline as part of our 2009 commitment -- but just a reminder of the U.S. commitment to helping the people of Gaza.

The President is concerned about the citizens of Gaza, but not the Hamas terrorist leaders who are doing this to the people of Gaza. It's my understanding that dozens of truckloads have come in into Gaza in the last 24 hours to 48 hours to bring relief supplies, medical supplies and food. But we remain concerned about it. And we're going to keep on working with the U.N. agency and the ICRC to make sure that the innocent people of Gaza are able to get food and medical supplies. Read more Comment (0), Email this.

MR. JOHNDROE: I'm not going to get into any private discussions, but our message to Israel has been the same that I've said here, our message to everyone, and that is that the only way this is going to stop is if Hamas stops firing rockets and everyone agrees to a sustainable ceasefire.

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

MR. JOHNDROE: I think that a Hamas that is unable to rain terror down on the people of Israel is probably a Hamas that is better, even for the people of Gaza. If Hamas is not able to carry out terrorist activities, hopefully they would see the light and start to serve the people of Gaza better. Instead, they have -- they bring them nothing but continued poverty.

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

MR. JOHNDROE: I'm not going to get into any more of the conversations than I've already read out. But you can know that our position, both privately -- our position in private is the same as our position in public, and that is we see that Hamas needs to stop the rocket attacks. Read more Comment (0), Email this.

MR. JOHNDROE: I don't have any indication of that at this point. But that's the purpose of the diplomacy that Secretary Rice has been engaged in. She has been the President's point person on dealing with leaders in the region and around the world. I believe she's on a call now, or had this morning, with the representatives of the Quartet. And the purpose of all these conversations is to lead to a ceasefire, but one that is lasting, and as I've said many times before, one that Hamas actually respects.

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

MR. JOHNDROE: Different topic. Is anyone still on this? All right, Elaine, go ahead. Read more Comment (0), Email this.

Q On the Vanity Fair article that's just out, does the White House have any response to some comments

MR. JOHNDROE: I won't speak specifically to these comments except to say I think we, with regards to Katrina, as the President has stated many times, the response at first was not what was needed. But that is why he made repeated visits to the region to help with Gulf Coast recovery.

And so it's not really for me to analyze their comments. I think that there have been a lot of major events and a lot of tough decisions during this administration, and different people will make their assessments on them. Read more Comment (0), Email this.

MR. JOHNDROE: No, I have no response to Wilkerson.

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

Q Tomorrow is the last day of the year. And it was a year that was good for repo men and federal

MR. JOHNDROE: Well, I think you've heard the President say -- he said in his address to the nation what he saw as the root causes of the economic crisis we're in now, the recession that we're in now. And I know he certainly wishes this is not the case, after 52 months of job creation, he would rather have seen that continue, rather than for the United States to slide into recession. But he's been focused on what can we do to work to protect the financial markets, to unfreeze credit and get the economy moving again, help people out through extended unemployment insurance, so he has been focused on what to do to resolve the crisis. But obviously he would rather see the economy to continue growing. But we're working to get it back on the right footing.

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

MR. JOHNDROE: I'm not -- did someone call it unexpected? I mean, you know, we're in a -- Read more Comment (0), Email this.

MR. JOHNDROE: Larger than expected. Look, we're in a recession. The President is committed to working with the Treasury Department and dealing with the crisis at hand to try and, as I said, unfreeze the credit market, get credit moving again, help people that are out of work, and help people find jobs. And so I don't think the numbers are surprising. And, you know, unfortunately I think these bad numbers will likely continue into the future. But the President is committed to trying to get the economy back on the right footing.

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

MR. JOHNDROE: I would check with the Treasury Department about the financing on that. I understand it's in train, but they can give you specifics on it.

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

MR. JOHNDROE: You know, the President met with his -- had his intelligence briefing and met with his advisors for -- I think it was over an hour or so, and then made his various phone calls. He's been working from the office and at home at the ranch. I expect he'll work on some trails at the ranch today. I think they've got some friends there, as well. And I will -- tomorrow morning I'll ask him what they're doing for New Year's Eve. I don't expect them to leave the ranch. I expect them to celebrate it on the ranch. And in the past, he's talked about getting up at sunrise to see the New Year that is coming in. Read more Comment (0), Email this.

MR. JOHNDROE: Clearing brush, working on trails.

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

MR. JOHNDROE: Yes. He is. He just finished the McPherson book on Lincoln. But I don't know what he's reading right now. Read more Comment (0), Email this.

MR. JOHNDROE: He certainly enjoys reading, as you know, mainly histories and biographies; histories, not current affairs, which I saw someone, columnist write on today and is concerned about the President's reading list. But the President is well read, and I'll see if I can find out what he's reading right now.

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

MR. JOHNDROE: Good morning, I'll give you an update on the President's day. President Bush spoke by phone to His Majesty King Abdullah of Jordan this morning, regarding the situation in the Middle East. Following that, the President received his daily intelligence briefing via secure video. He then joined a discussion via secure video with the Vice President, Chief of Staff Josh Bolten, and National Security Advisor Steve Hadley. They updated him on overnight developments in the Middle East and discussed U.S. actions.

For six months, a ceasefire, a state of calm, was in place between Hamas and Israel. Recently, Hamas refused to renew it. During that ceasefire, Hamas continued to fire rockets. Last week, Hamas substantially increased its rocket and mortar attacks on the people of Israel.

Hamas has once again shown its true colors as a terrorist organization that refuses to even recognize Israel's right to exist. In order for the violence to stop Hamas must stop firing rockets into Israel, and agree to respect a sustainable and durable ceasefire. That is the objective to which all parties need to be working, and that is what the United States is working towards.

We also remain concerned about the humanitarian situation for the people of Gaza. We ask that all parties involved allow food and medical supplies to reach the people there. We appreciate the efforts of a variety of countries in the region who are working to help the humanitarian needs of the people of Gaza.

With that, I'll be happy to take your questions. Deb. Read more Comment (0), Email this.

MR. JOHNDROE: Israel is responding to a barrage of rocket and mortar attacks that increased substantially last week, following Hamas's refusal to renew the ceasefire. Israel has made clear that they do not want to retake Gaza, that they simply want the people of southern Israel to be able to live in peace, free from this barrage of rocket attacks.

And that's what we expect. We also want to see, as I've said, the ceasefire restored in a sustainable and durable fashion, so that we can get back on the road map, work towards the goals of the Annapolis process, which, again, is two states living side by side in peace. Read more Comment (0), Email this.

MR. JOHNDROE: You know, it's hard for me to speak to specific casualty numbers. We have urged the Israelis to avoid civilian casualties. But they are working on decreasing the number of Israeli citizens that are vulnerable. And we know -- I believe someone died this morning, a couple of people a couple of days ago. The Israelis are working to reduce the threat against their own people.

So they're going to continue, it appears at this time, to deal with this Hamas terrorist threat. But ultimately, we want a sustainable and durable ceasefire.

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

MR. JOHNDROE: Well, the U.S. goal is for the sustainable ceasefire, as I've discussed. Secretary Rice has been on the phone throughout the weekend with various heads of state, primarily foreign ministers, to try and urge the various parties involved to get behind a sustainable ceasefire. That is what the United States is working on right now. Secretary Rice has been the primary interlocutor on that, and that's our goal. Read more Comment (0), Email this.

MR. JOHNDROE: Well, that's really, in my opinion, a hypothetical question. Israel is going after terrorists who are firing rockets and mortars into Israel, and they are taking the steps that they feel are necessary to deal with the terrorist threat. Now, no one wants to see violence. But what we're going to need to see in order to end this is Hamas needs to stop firing rockets into Israel and we all need to get to a sustainable ceasefire.

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

Q Gordon, you said that Israel has made it clear that they don't want to retake Gaza. But Deputy Prime

MR. JOHNDROE: Well, I haven't seen his comments. I'm referring to the Israeli Foreign Minister comments from yesterday that she made on a variety of television programs, that their goal is to deal with Hamas in a way that will ultimately protect the Israeli people.

Hamas has an opportunity to be a partner in the peace process. There has been a role laid out for them for quite some time. They can recognize Israel's right to exist, renounce violence, and live up to previous commitments made by the Palestinians. Hamas, instead, is choosing to fire rockets into Israel. So, as I've said before, as many people have said, Hamas has a choice to make. Right now they are choosing to be a terrorist organization that fires rockets into Israel. That is not going to lead to a sustainable ceasefire.

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

MR. JOHNDROE: The discussions that we've had with the Israelis are ones that everyone needs to recognize that the ultimate goal here is to get to a ceasefire. I can't speak to any potential ground operation. I think that any ground operation, according to the Israelis, would be part and parcel of the overall operation, given their statements saying that they don't want to retake Gaza, that they simply want to protect their people.

So we'll just have to see how this unfolds. Obviously, as I've said, we don't want them -- we want civilian casualties to be avoided. But it's is unfortunate as Hamas, as we've seen in the past, tends to base its people and some of its rockets in civilian areas. So we'll see.

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

MR. JOHNDROE: I'm not going to speculate on a ground operation. Let's just take this one day at a time, all right.

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

Q What is the message to the broader Arab world out there. In the official statement that was released

MR. JOHNDROE: The President's message to King Abdullah, his overall message, is that we want to see the violence stopped, but in a way that leads to a durable and sustainable cessation of violence. We can't have the violence stopped now only for it to start up again in the near future. That would be unacceptable to all parties involved, and certainly doesn't help the Palestinians achieve their goal of a viable independent state.

So we're obviously very familiar with the Arab position. But I think ultimately they want to see a peaceful end to this that leads to a Palestinian state. Read more Comment (0), Email this.

Q And so no comment at all about whether or not there are suggestions on the part of the U.S. to Israel

MR. JOHNDROE: I've seen various casualty figures. It's not for me to say what they are. All I can say is that we've seen innocent Israelis die, as well. We want civilian casualties to be avoided, period.

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

MR. JOHNDROE: The United States understands that Israel needs to take actions to defend itself. Read more Comment (0), Email this.

MR. JOHNDROE: You know, there is an Egyptian brokered ceasefire that was in effect until December 19th. It was a bit of a shaky ceasefire, considering Hamas continued to fire rockets during that period of time.

But last week, they refused to renew the ceasefire, and substantially increased the rocket and mortar attacks into Israel. So I don't expect them to speak right now. But I think that the rockets need to stop, and then the violence will stop, and then there will be an opportunity to renew the ceasefire. Read more Comment (0), Email this.

MR. JOHNDROE: Well, he's the President of all the Palestinian people. And I know that he wants to bring Gaza and the West Bank together. We've all said this is a two-state solution, not a three-state solution. So we'll just see where it goes.

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

MR. JOHNDROE: I don't have a whole lot of specifics on that. I know the President-elect receives daily intelligence briefings from the intelligence briefers that are there with him. I know that he's spoken with Secretary Rice to get an update on this situation, and I think some other situations around the world. And we will continue to stay in touch with his staff as events warrant it.

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

MR. JOHNDROE: No. And to clarify in case I wasn't clear, he spoke to Abdullah of Jordan this morning. He spoke to Abdallah of Saudi Arabia on Saturday.

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

Q Can I just be clear about something. When you said that Israel has been clear that they don't want

MR. JOHNDROE: I've heard it both places; both publicly in the press, as well as that's the message that they're passing along.

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

MR. JOHNDROE: No, I believe -- if you were saying the timing of the attacks, do you think Hamas started its substantial increase of rockets and mortar attacks, do you think Hamas started its substantial increase of rockets and mortar attacks because of the Israeli elections? Read more Comment (0), Email this.

MR. JOHNDROE: The Israeli response is in response to the mortar and rocket attacks on its people. Read more Comment (0), Email this.

MR. JOHNDROE: It's not for me to comment on the Israeli political -- their elections, their election season. But it appears to me that they're responding to the hundreds of rockets that have fallen on southern Israel in the last few days.

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

MR. JOHNDROE: We'll just have to see. We'll have to see. Read more Comment (0), Email this.

Q Does he not think it would be helpful at this point in time for him to actually come and make this

MR. JOHNDROE: At this point, we don't have any plans for the President to make a statement on this. We will continue to monitor the situation. I mean, he's staying in touch with the National Security Advisor, as well as the Secretary of State, and we'll see.

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

MR. JOHNDROE: No, the United States is not involved in this action in any specific way. The United States has provided millions of dollars of humanitarian assistance to the people of Gaza, and so we are certainly encouraging countries in the region to continue their efforts to bring medical and food supplies to the people of Gaza. Read more Comment (0), Email this.

MR. JOHNDROE: I'm not aware of their contacting him. I know Secretary Rice has spoken to the Prime Minister of Israel, as well as the President of the Palestinian Authority.* But I'm not aware of any contacts that have been made to President Bush on that front. If that changes I'll certainly let you know.

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

MR. JOHNDROE: That Israel planned -- Read more Comment (0), Email this.

MR. JOHNDROE: Well, their cabinet voted earlier -- sort of middle of last week on this. So it was a very public indication that they were likely to take action. Read more Comment (0), Email this.

MR. JOHNDROE: Toby, I understand your question -- at this point, we understand that they're taking efforts to defend their people in the face of just hundreds of rockets.

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

MR. JOHNDROE: I think that's the appropriate response at the moment from the United States, and I think we've heard the same thing from the European Union and others. We will talk to all the various parties involved and urge a return to the ceasefire, but a ceasefire, as I've said, that is sustainable and durable and is respected. Read more Comment (0), Email this.

MR. JOHNDROE: You know, it's difficult for me to say right now about President Abbas. I think what strengthens President Abbas's position is when he delivers for the Palestinian people. And that is what he is trying to do, and succeeding in some parts of the West Bank -- greater Palestinian security forces, greater investment we've seen in security forces in Janin, greater investment in Nabulus and other cities like that on the West Bank.

You know, the people of Gaza could have that, as well, but instead Hamas has chosen to take a different course of action, and that's to fire rockets into Israel.

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

MR. JOHNDROE: No, I haven't seen those comments, and, no, I'm not.

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

Q The President, earlier this year - well, I guess last November during the Annapolis process, had hoped

MR. JOHNDROE: You know, this is a very similar situation that the President found when he took office in early 2001, with increased violence on the ground. I know that his goal is that this violence come to a, as I've said, sustainable, durable and end with a ceasefire, but a ceasefire that's respected by Hamas, so that then all the parties could come together and work towards the goals in the road map and the goals of the Annapolis Conference. The Annapolis goals are ones that have been widely accepted. We saw a good U.N. Security Council Resolution 1850 within the last couple of weeks.

Everyone -- what I think is different from eight years ago is that everyone recognizes that the two-state solution is the right way forward. And so I think the President feels that he has laid good groundwork that will ultimately lead to a two-state solution, but clearly, with the Hamas actions in the last few days, it's not something that's going to advance in the immediate near term.

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

MR. JOHNDROE: That's why we talk with other leaders in the region who do speak with Hamas and have been the interlocutors, so to speak, with Hamas. The ceasefire was Egyptian-brokered, the one that was just -- that Hamas failed to renew last week. And so that's how we deal with Hamas. Read more Comment (0), Email this.

MR. JOHNDROE: You know, it's hard for me to get into the minds of a -- get into the mind of terrorists. I don't know why they would rather fire hundreds of rockets and mortars into Israel rather than work for the good of their own people. It's impossible for me to answer. Read more Comment (0), Email this.

MR. JOHNDROE: All I have is some of the general numbers the U.S. provided the U.N. Relief and Works Agency: $57 million in 2008 for the Palestinian people; another $12 million to $14 million through the International Committee of the Red Cross. I don't have any specifics about how that money has been used for the people of Gaza as it relates to the current situation. I know that Egypt and Jordan, as well as Israel, are working to make sure that humanitarian medical and food supplies get to the people of Gaza.

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

Q Just coming back to something I asked before, but maybe not cleverly enough. Was there no -- Olmert

MR. JOHNDROE: I'm not going to speak to all the private conversations we've had. I'm not aware of any conversations that President Bush and Prime Minister Olmert have had in the last couple of weeks. We have pretty regular contact with the Israeli government, so I don't have any specifics for you on that.

My point in my answer was that this was a very public action that they took earlier in the week in signaling that the rocket attacks were not acceptable.

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

MR. JOHNDROE: I think that's a question I'm not going to go down -- a road I'm not going to go down. I don't think anyone wants to see anyone destroyed, although Hamas has indicated sometimes they'd like to see Israel destroyed. But I think what people want is just peace on the ground and end to the violence, so that people can go about and live normal lives. And this is especially true of the people of southern Israel who end up having to spend so much of their time in bomb shelters. It's unacceptable.

Thank you all. One more. Read more Comment (0), Email this.

MR. JOHNDROE: What is the President doing today? After his phone call with Abdullah and his intelligence briefing, he went to his office to work on paperwork and a variety of things. And I expect he'll probably ride his bicycle today and spend time with Mrs. Bush. And we'll -- I expect he'll also probably receive updates on the ongoing situation in the Middle East, as well. Read more Comment (0), Email this.

MR. JOHNDROE: No, no, you heard the rest of that sentence, which was -- and, Mark, you heard what I said -- that Hamas has indicated they would actually like to see Israel destroyed. They say that from time to time.

Anyway, my point is -- Read more Comment (0), Email this.

MR. JOHNDROE: The point is I'm not going to -- it's impossible for me to answer the question about Israeli intentions, which was what I was asked. But I said that I believe everyone's ultimate goal is not for the destruction of each other -- although the terrorists have indicated sometimes that they would like to see the destruction of Israel -- their ultimate goal is for the people to be able to live in peace. And what I also said is right now the people of southern Israel are not able to live in peace; they have to live in bomb shelters a lot of the time. And that's unacceptable. Read more Comment (0), Email this.

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

MR. JOHNDROE: No.

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

MR. FRATTO: Good morning, everyone. Sorry I'm late. The President taped his weekly radio address this morning. It's a Christmas message. Read more Comment (0), Email this.

MR. FRATTO: It is. But we make -- do it special for holidays, of course, and this Christmas message is a message of the spirit and courageous service of our troops, many of them who will be spending this holiday season as they've spent a number of previous holiday seasons away from their families, out in harm's way. And so that will be the President's message in the radio address.

The President, this morning, in a short while, will be signing H.R. 7311. This is the William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008. We have stills coverage for this signing. This will be in the Oval Office. And we'll release a backgrounder, but just briefly, this has been a priority issue for the administration in preventing the trafficking of persons around the world. So this is a piece of legislation we're very proud to sign and to see that it's authorizing funding for fiscal years through -- 2008 through 2011. And this program has been very effective around the world in trying to stop trafficking in persons in Africa and Asia. So the President will sign that in a little while.

The President will also sign H.R. 7327, this is the Worker Retiree and Employee Recovery Act of 2008, generically referred to as the pension bill. The bill provides temporary short-term relief for businesses from their pension funding requirements under the Pension Protections Act. Those of you who may have followed this issue know that we did have some concerns with this bill because we think it will increase the cost of near-term claims on the Pension Benefit Guaranty Corporation -- the PBGC -- and could also result in some benefits lost to workers over the long term. Our concerns with the legislation remain, but we do believe that in this current economic environment and current economic circumstances, that the benefits of the legislation outweighed our objections.

And also, before leaving for Camp David -- I think you saw the schedule update, the President will now leave at 1:00 p.m., Carlton? -- leave at 1:00 p.m. The President will meet with, as he does from time to time, meet with a child with a life-threatening illness and this is part of the program set up by the Make A Wish Foundation.

As I said, the President will be heading to Camp David at 1:00 p.m. As you know, he has spent every Christmas at Camp David as President. He may have also spent, we think, all four Christmases at Camp David when his father, President George H.W. Bush, was President. We're not exactly sure if every day, but maybe -- this may be the 12th time that the Bush family has spent at Camp David for Christmas. So the President and his family are looking forward to that.

The President's parents, President and Mrs. Barbara Bush, will be there. The daughters, Barbara and Jenna, and Jenna's new husband, Henry, will be there. The President's siblings and their families will also be there. So we wish them well as they travel on to Camp David.

And with that, I'll be happy to take your questions. Ben. Read more Comment (0), Email this.

MR. FRATTO: Well, assuring the smooth transition is the single most critical effort that we'll have underway over the next four weeks. It's important for the nation, it's important that the next President, President-Elect Obama, come in in a smooth way and ready to -- as we've said, we don't want to drop the baton, we don't want to break stride, we want them to be able to hit the ground running and to be able to be successful.

In those areas of the transition that include some really important efforts that are underway, that include the global war on terror, so we want to continue to see progress in what we're trying to do in Afghanistan and Iraq. And then also the most immediate concern here domestically is the financial crisis and making sure that the programs that are underway will be able to continue, and that we continue to try to normalize conditions in credit markets so the banks can be out there lending to consumers and businesses, and as quickly as possible try to return the economy to normal. Read more Comment (0), Email this.

MR. FRATTO: No, I don't think we've indicated that. I mean, I think we've -- Read more Comment (0), Email this.

MR. FRATTO: You have? (Laughter.) Read more Comment (0), Email this.

MR. FRATTO: One of those unnamed sources somewhere? Read more Comment (0), Email this.

MR. FRATTO: We do expect additional clemency requests. The President has been considering them, and hopefully soon we'll have something for you on that. I can't tell you that -- when exactly the next one will come -- the next batch will come and whether there will be more after that. I think the President has maintained his authority to do that until his last day as President. So we're not going to -- I don't think we'll take that away from him. But I think we should have something soon on clemency petitions. Read more Comment (0), Email this.

MR. FRATTO: I'm not going to put a point on that. The process is run from the Office of the Pardon Attorney over at the Department of Justice. Any announcement, as they all have, will come from the Department of Justice. So I would just stay ready to look for that paper to come across.

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

MR. FRATTO: Well, of course, that's looking backwards, and it's certainly not the worst of it. That was for the months -- the late summer, early fall months were the third quarter. And that was a quarter where we definitely saw a significant slowing in the economy. The economy in the previous quarter, in the second quarter, had grown at about 3 percent, which is fairly healthy. And we saw the economy slow down that quarter. We also saw impacts from the hurricanes that hit the southern part of the United States, the impact of the Boeing strike. In effect, I think our estimates from the Council of Economic Advisers estimates that that -- those two events, the hurricanes and the Boeing strike combined probably knocked about a full percentage point off of GDP. So we may have seen positive growth in that quarter were it not for those events.

That's the third quarter. The fourth quarter we know, because of the credit crisis, the standstill in credit as markets froze up, and the financial market turmoil, will be significantly weaker. I think you have private sector forecasts out there that -- you can look up the ranges for what they're estimating. But there's absolutely no question the fourth quarter is going to be a very weak quarter. We see that already in the monthly payroll data that has been reported already.

So it's a tough quarter, there's no question about it. What we've been focused on is implementing the financial rescue package and the efforts of the Fed to restore growth, to free up credit so that the economy can return to more normal practices and get healthy again. And that's the most important thing we can do right now. Read more Comment (0), Email this.

MR. FRATTO: The truth is we get asked about this a lot, and I think I was asked about it yesterday and noted the number of interviews the President does, and he may do some additional interviews.

The secret about presidential press conferences is we never make the final decision until the day of. There's always lots of speculation, I know, on the part of all of you when you see a day on the -- without public events, and we begin getting calls wondering if there's going to be a press conference. We'll make those decisions as we get into the new year, whether we see a good reason and an opportunity to do one. But those are game day decisions and so we'll have to wait until the day. Read more Comment (0), Email this.

MR. FRATTO: Obviously we've seen some of the reports on that. Some of the reporting is a bit murky. We're working with our partners in the region and other countries in the region and the African Union to encourage the institutions in Guinea to take all steps to ensure a peaceful and democratic transition. We stand with the people of Guinea, who certainly strive for peace and a democratic transition, and an opportunity to get to a next government in the best way. It's obviously a troubled region with a history that hasn't always seen those kinds of smooth transitions of power.

And so we're keeping an eye on it. I'll refer you to the State Department; they'll have more up-to-date information as to events there. But we are working with the African Union, and the other countries in the region.

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

MR. FRATTO: Just our communications with countries in the region, and that's all I can point to right now. And like I said, I'd refer you to the State Department for more on that.

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

Q Thank you, Tony. Two questions. On Friday, Congressman Peter Roskam of Illinois, a Republican

MR. FRATTO: Sure, we're aware of them. We've heard these criticisms. I think there's no -- I think we would respectfully disagree with them, with all of the members of Congress who have had that kind of criticism, especially when you look back at our record on this issue, which has always been about trying to ensure that there is a real, meaningful restructuring of the auto industry if we were going to use taxpayer funds. That's why we wanted the legislation from Congress, to ensure that, that it had the force of statute behind it, that it came from funds that were already appropriated by Congress for the auto industry.

This loan agreement that we put together -- again, I would respectfully disagree. If you read through it, everything in this agreement is about encouraging meaningful concessions by all parties to make the reforms that they need to make so that the firms could be viable and competitive in the future, and that the taxpayer can be paid back. It's all about restructuring. And it has at the back end of it, should the stakeholders not take the steps that they need to make, the ability to call the loan and the firms go into bankruptcy court.

So, look, this isn't the preferred way of dealing with this issue. We asked Congress for the strong authority to do it in partnership with Congress. We were able to achieve majorities in both houses of Congress on the approach that we were advocating and the approach that we designed, to do it in the most appropriate way.

Congress failed to get that legislation to the President's desk, and so we were left with sub-optimal ways of dealing with the auto industry, and we've made the best of it. And we have a very strong agreement. We think that it's something that, if all the stakeholders and the next administration adhere to, will result in strong and meaningful restructuring of the auto industry and they will be able to be successful. Now, again, that wasn't our preferred or the most appropriate way to deal with it, but it's the option that we had left. Read more Comment (0), Email this.

Q My other question is this: Last year -- or two years ago, rather, the Bush White House recommended

MR. FRATTO: I don't think we are getting involved in the race for the next RNC chairman. I haven't had that conversation with the President to see what his personal views are, or our political director, Barry Jackson -- but I think I could check in with them and see if I can get back to you on that.

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

Q You talked about hoping that existing programs continue to deal with the financial crisis. Well

MR. FRATTO: I think what that report reflects is the incredible complexity of trying to help individual Americans who are facing these difficulties. I think you have lots of people out there with ideas for how to prevent foreclosures and to mitigate foreclosures and reduce the number of foreclosures out there.

At the end of the day what you're dealing with are individual American homeowners holding a mortgage who are trying to -- want to stay in their home, they may have uncertain economic futures, they're uncertain about the value of their home; you have banks who don't want to foreclose on homes --that's not a good business practice for banks. But trying to make that system work is very difficult and complicated. And we've heard lots of ideas, ideas from the FDIC, ideas from outside economists, we have our own ideas, I'm sure the next administration will have ideas. And what you find as you work through all of these foreclosure mitigation programs is that they have strengths and weaknesses, and not one of them is perfect. If there was a perfect program out there, I think we would have implemented it already.

So it's difficult; we're trying to get at that problem a variety of different ways, through programs like FHASecure over at the Federal Housing Administration. I think there's been some reporting recently about the difficulties of trying to implement Congress's designed program, the Hope for Homeowners legislation that they passed last summer. It's a difficult problem to get at, but we're trying -- and the HOPE NOW Alliance of bankers and lenders and mortgage counselors are trying, as well.

So, you're right, a lot of the people who will be helped will find themselves back in default status. That's a reality that we all have to deal with as we try to work through it. Read more Comment (0), Email this.

Q And also, this weekend, there was a new task force announced by the Obama transition that would

MR. FRATTO: I'll speak about our task forces and the efforts that we've done, and leave you all to analyze the decisions by the incoming administration. Read more Comment (0), Email this.

Q I would like to ask about possible support of Europeans for closing down Guantanamo. There was

MR. FRATTO: You know, I'm not going to speak to our specific conversations with certain countries. I think I'll just make a general statement on this. We've been -- we have had communications with countries all across the world -- allies and countries from regions where a lot of the detainees come from -- to try to resettle them and to ensure that they are treated humanely and safely.

The President has said a number of times that it's our intention to close Guantanamo. I think what many people are realizing -- as they take a closer look at it and look at the efforts to try to resettle detainees, to try to deal with and bring to justice the high-value detainees, the very dangerous, most dangerous terrorist suspects that we're holding at Guantanamo -- that it's complicated. There are legal concerns, there are cross-border concerns in any of the countries that may consider taking detainees. They have their own legal systems that need to be considered. And we have to consider the expected safety and treatment of any of the detainees that we release from our custody.

So it has taken a lot longer than any of us would have wanted to try to deal with them. We continue to move forward with the military commissions for a number of high-value detainees, and that's the way that we're going to continue to deal with it. If there are countries out there that are willing to take them and they meet those standards, in terms of the treatment of detainees, we certainly want to talk to them and we have been talking to a lot of them. Read more Comment (0), Email this.

MR. FRATTO: That's not an option that we think is good for this country. These are enemy combatants that were picked up off the battlefield and I think in almost every case they've been shown to have had training and relationships with terrorist organizations, at the very least. So there's a reason we're holding them; there's a reason we're holding them where we're holding them. And we don't think releasing them to the United States is the most appropriate solution in whatever form.

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

MR. FRATTO: I wouldn't say "regret." I mean, we're disappointed that we haven't caught Osama bin Laden, but we're certainly going to continue to do that until our very last day here, to try to catch Osama bin Laden. Read more Comment (0), Email this.

Q Many people around the globe are really asking that the war is the largest military power or sophisticated

MR. FRATTO: I'm not going to speak for the Obama administration. You can ask them what they're -- how they intend to do that. If it was easy, it would be done. I remind you that these are large and difficult parts of the world where these terrorists are hiding. I'll also remind you that we've had fugitives from the law here in our own country that have escaped justice in the United States for many years. I mean, the Unabomber was in the United States hiding for a decade before the FBI could find them. And so it's difficult. But we're going to try to hunt down every one of them. Read more Comment (0), Email this.

Q As far as the Mumbai attacks -- still on the streets of India -- Mumbai attack people are on the

MR. FRATTO: I don't know if President Bush has. I know Admiral Mullen is in the region, and he's speaking to people in the region. But I don't have anything new for you in terms of the President's conversations.

One last one in the back of the room. Read more Comment (0), Email this.

Q Thank you. Could you please speak to the U.S.'s consideration of moving troops into Basra, which

MR. FRATTO: I really have to apologize. I'm not familiar with our troop placements in Iraq right now, and what the latest is on that. Maybe you could check in with Ben Chang here and Ben can maybe give you something. Ben, who is with the National Security Council, can help.

Okay, thank you. Read more Comment (0), Email this.

MR. FRATTO: Good morning, everyone, to this holiday-shortened week. I think we all can agree, though, that you guys back there by the door -- no one opens the door during the briefing today. (Laughter.) Are we all in agreement on that? It's cold enough not letting that air in today.

As you know, the President this morning will visit -- will participate in a service project and deliver over a hundred coats collected by the Executive Office of the President for those in need this holiday season. This is the One Warm Coat holiday Service project. The President will be there at 11:10 a.m. today. The Executive Office of the President sponsored a coat drive on the White House campus from December 15th through 19th this year, and over a hundred coats have been collected. The President and Mrs. Bush will deliver these coats today.

One Warm Coat began in 1992, as a Thanksgiving Weekend coat drive in San Francisco, California. It has since grown to approximately 1,800 coat drives in 2008. Each coat drive has the same intent, to collect coats that will be given to those in need. Thousands of people participate in One Warm Coat, and there are over 450 distribution centers in all 50 states.

The location for today's One Warm Coat coat drive is Pathways to Housing, D.C., and they are one of the distribution agencies across the country. So we're happy to do that, especially during this holiday season.

And of course, as you know, the President will travel to Walter Reed Army Medical Center where he will visit with more wounded veterans, as you know he does from time to time.

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

MR. FRATTO: I don't have anything on the schedule on that right now, but we'll see, and you'll all be the first to know. Read more Comment (0), Email this.

MR. FRATTO: No, I can't rule it out. I'm not ruling anything in or out. Read more Comment (0), Email this.

MR. FRATTO: Well, I think the President -- as you know, you've seen the transcripts -- the President has spoken to many reporters on various subjects, and wide-ranging subjects. And I think a lot of the things that are on your mind at this time -- I don't say that -- Read more Comment (0), Email this.

MR. FRATTO: We'll keep that in mind and keep you right near the top of the list for that. (Laughter.) I don't have anything scheduled right now, but he's been speaking to a lot of reporters, on radio, on one-on-one interviews, on TV interviews, with Mrs. Bush, alone, and like I said, on a broad array of subjects. So we'll see what the next -- is it 29 days -- brings, and we'll let you know. Read more Comment (0), Email this.

MR. FRATTO: I think so. I have no reason to believe I can't rule it out for this week. The President goes to Camp David tomorrow afternoon.

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

MR. FRATTO: Is the President going to ask for it? Read more Comment (0), Email this.

MR. FRATTO: Oh, the administration? I've nothing for you on that right now. As Joel said -- Joel Kaplan, when he briefed on Friday regarding the auto deal, he talked about this a bit, that it's possible that this administration could ask for it; it's possible the next administration could ask for it. If we don't, it's likely the next administration will have to do that. But the President will make a decision based on what the needs of the program are and what he's hearing from Secretary Paulson on what they need going forward.

I think it's clear from the auto loan announcement on Friday that additional funds for TARP will be needed as early as February. And so it's possible that we could be the ones to ask for it, and it's possible the next administration. But no decision has been made on that. Read more Comment (0), Email this.

Q Tony, the White House seemed a little perturbed with a front-page story yesterday questioning the

MR. FRATTO: I think we are satisfied with the aggressiveness of our response, that when we saw the problems in the housing market we quickly tried to develop programs to deal with it. You're always going to have people looking back and second-guessing decisions that the administration makes or doesn't make. Given the severity of the crisis, we would all like to have acted more quickly and seen the potential impact of the housing crisis more quickly. But I think at the time, in the time that those decisions were made, I think most observers felt that they were the right decisions at the right time.

Our concern with the article yesterday was that it had a narrow focus, and that was to simply blame the housing crisis and the resulting financial crisis on this administration's push for homeownership. And that is about as myopic as you can get, and unsophisticated as you can get an understanding of the housing crisis and the financial crisis. And if you go back to the President's address to the nation at the time that we were requesting funds from Congress to deal with the financial crisis, the President went through a very detailed explanation for all of the causes of the housing and the financial crisis. And people are free to take a look at them and make a judgment as to whether they are the right ones, or whether each one of them is weighted properly, but I think most economists agree that it's no one factor that led to the downturn in housing and the financial crisis.

But we've acted very aggressively and we're proud of the work that we've done and the creativity here and at the Treasury Department and the actions that the Fed has taken to deal with an unprecedented crisis.

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

Q Joe Biden said yesterday that -- a couple things on the economy. He said the Obama administration

MR. FRATTO: I'm sorry, he said that we need a -- Read more Comment (0), Email this.

MR. FRATTO: Because of the size of the deficit? Read more Comment (0), Email this.

Q Because in the long run, it would bring the deficit down because -- it's sort of Republican thinking

MR. FRATTO: Well, I don't think there's any chance of a second stimulus package at the end of this administration in the days that we have remaining. I know that the next administration and congressional leaders are discussing what they intend to do and what their plans are, but it's not something we'll be doing. Look, the size of the budget deficit, whatever the number is, I can't predict whether it's going to be $1 trillion or something less than that. It's going to be large. And it's going to be a very significant number.

And I think it's going to reflect two things. One, is the downturn in the economy, and the slowing of receipts coming into the federal government. It's also going to reflect the large increase in spending over the short term to deal with the financial crisis. And on the front end, the $350 billion that have been committed so far, and other funds for the financial crisis are -- they show up on the books as straight expenditures, money going out the door to financial institutions.

As we've said, these funds are actually investments in these institutions. Some of them are equity positions and other ways of holding assets in some form that will return back to the taxpayer. So over time, we believe that if it works, and if the financial institutions are as successful as we hope they'll be over time, that it should be, at worst, a wash for the taxpayers and those deficit numbers will come down.

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

Q Tony, on another subject, is the White House at all concerned about reports by the brother of this

MR. FRATTO: He's in the hands of the Iraqi system. I don't have anything more on the shoe thrower. I think it's been explored extensively and I have nothing new for you.

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

MR. FRATTO: No, if the Treasury Secretary determined that he had an immediate need for it, he wouldn't hesitate to come to the White House and ask the President to request that authority from Congress. So I don't want to sort of anticipate hypothetical needs for those funds. But they at the Treasury Department are monitoring the markets every day, they're monitoring the health of the financial institutions and ways that they can make sure that our banks are capitalized so that they can do the job that they need to do, and also that our credit markets are working, and the effort to bring down the cost of credit is having an impact.

And some of the things they've announced recently haven't been implemented yet, like some of the efforts to deal with consumer credit and auto loans and home loans. Some of those funds haven't yet gone out yet. But they're moving towards that. Read more Comment (0), Email this.

MR. FRATTO: I couldn't even speculate on that. Certainly the funds for the American automakers have been committed. They haven't been released yet either. So I really hesitate to try to think of what could cause a need above the $350 billion. Read more Comment (0), Email this.

MR. FRATTO: I couldn't predict how my Steelers were going to do against the Titans yesterday; I'm going to not try to make predictions on -- (laughter.)

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

MR. FRATTO: No, I think he said that it's something he's thinking about and thinking about some ideas, but he hasn't made that decision yet. I think if he feels that he has something important to say and it's the right way to say it, he will. But he just hasn't decided yet.

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

MR. FRATTO: I'm sorry, Goyal, I missed the beginning. Read more Comment (0), Email this.

Q Yesterday the Jewish community, just beside the White House, they marked the world's largest menorah

MR. FRATTO: We do want to see those who perpetuate these attacks brought to justice, and that's something that we've tried to impress upon all the governments in that region; it's something that we try to do here also. Look, as we think about reflecting over the past seven years, certainly since the 9/11 attacks, we need to try to defeat terrorists in every way possible, whether that's through the use of armed conflict, by taking the fight to them, using our intelligence services to try to prevent attacks, and when we do find those who have committed attacks, to bring them to justice.

And we've assembled a large coalition of nations who stand with us in trying to defeat terrorism. Again, we do it on the intelligence side; we do it on the financial intelligence side, trying to track the money. And it's a global effort and we have to try to be right all the time, and bring anyone who plans or carries out a terrorist attack to justice. Read more Comment (0), Email this.

Q And second, in recent days, almost everybody, every leader, including President Bush, President

MR. FRATTO: I think I would just say we do take the period of transition very seriously. As for Pakistan, we're communicating with them very well, and I think they understand their responsibility and the important role they play in the role on terror. Read more Comment (0), Email this.

Q I would like to ask about the mood of the President and his wife, and also among the staff. This

MR. FRATTO: I honestly don't -- I would direct you to the First Lady's -- the First Lady's Press Secretary might be able to give you a little bit more on the tick-tock of moving out of the White House and back to civilian life.

Look, I've seen the President through his mood in the interviews he's done. I think what you've seen in those interviews reflects his mood right now. And he's thinking about the past. He's still very much in the present also, in terms of still dealing with some very real and urgent concerns. I don't think anyone expected us -- that any administration, and this administration, would be this busy as we've been this late into the administration. But we are, and the President is still very much occupied with those issues.

But it is an opportunity to look back and think about what we've accomplished. And of course, everyone asks the questions of how you look back on the past eight years, and so that gives them an opportunity to respond to those questions. Read more Comment (0), Email this.

MR. FRATTO: I'm sorry, the staff? Read more Comment (0), Email this.

MR. FRATTO: I wish I had a few minutes to think about it. (Laughter.) I'm dealing with auto questions every day.

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

MR. FRATTO: I saw the report. I mean, look, you know where we stand in terms of the ability of people in any society to be able to express themselves and to speak up for human rights and civil rights. So it's troubling. We believe that these individuals are incredibly courageous to stand up in a society like Iran for the rights of their fellow citizens. So it's something that we're obviously paying attention to. Read more Comment (0), Email this.

MS. PERINO: Just a couple of announcements. You just heard the President talk about the automotive industry and how we've reached a decision. And you heard the President announce it. I brought Joel Kaplan, the Deputy Chief of Staff, here for his second appearance here on this topic. He was here last week and very helpful, so we thought we'd bring him back. He doesn't have a ton of time, but he'll be able to answer lots of your questions.

Just a reminder that the President and Mrs. Bush will make remarks this morning and view the unveilings of their individual portraits that will be displayed at the National Portrait Gallery. Then the President will meet with the President of the Palestinian Authority. He looks forward to meeting with President Abbas. They have many things to talk about, including their shared efforts toward peace in the Middle East, including progress made in building capable Palestinian institutions, fostering economic development, and training and deploying Palestinian security forces in the West Bank.

And then this afternoon the President will have a photo opportunity with recipients of the 2007 Presidential Early Career Awards for Scientists and Engineers.

But first, let's hear from Joel, and then I'll come back and take the rest of your questions. MR. KAPLAN: Thanks, Dana. Good morning. As Dana said, you all have just heard from the President on his decision on how his administration is going to go forward to assist the U.S. automakers avoid a collapse in a particularly vulnerable economic time.

As the President said in his remarks, during normal economic times he would have decided to allow the free market to control the outcome for these auto companies. Unfortunately, we are not in normal economic times. The country is facing a very serious economic challenges. We're in a recession. We've got, obviously, a continuing housing problem. We've got a very, very soft labor market. And we've got continuing challenges in our financial sector.

Under those conditions, the President and his economic team were very concerned about allowing the prospect of a disorderly failure of one or more of the U.S. auto companies, and the effect that would have on our economy.

As everybody knows in the room, the President had a legislative proposal that we worked out with the leadership of Congress a week or so ago that would have provided assistance to the U.S. auto manufacturers from already appropriated funds, and would have set a number of conditions. When I discussed it with you last week or 10 days or so ago, I made clear that the purpose of that legislation was to set the auto manufacturers on a path to one of two outcomes: either fundamental restructuring, or bankruptcy if they were unable or unwilling to achieve that fundamental restructuring towards a viable business model voluntarily.

That legislation did receive a majority support, obviously, in the House, and had a majority of support in the Senate, although it never went to a formal vote. It was -- there was a procedural vote that indicated majority support. But unfortunately, it did not pass Congress, which left the executive with a decision to make about what to do with these auto companies and how to assist them.

What the President's proposal, which Secretary Paulson will implement from the Troubled Asset Relief Program, what it does is it takes the conditions, essentially, that were in the bill that passed the House and that received majority support in the Senate. The fundamental test that was embodied in that piece of legislation was the ability within the next few months, by March 31st, to demonstrate a plan for long-term viability with a very specific economic test for what constitutes long-term viability -- discussed it last week: positive net present value going forward. That's an economic definition. It was embodied in the legislation. It's now embodied in the loan terms that the Treasury will give to the auto manufacturers that it is assisting.

During the course of the congressional discussions, there were some other ideas that came up, particularly on the Senate side, about specific requirements that the auto manufacturers should need to satisfy in order to demonstrate their viability. We thought that some of those conditions were actually very sensible.

And so in addition to the House conditions that are included in the loan terms, we've added some additional conditions as targets that basically says, you got to come forward with a plan for long-term viability. And we would expect to see in this plan for long-term viability a plan to reduce the debts of your bondholders by converting them from debt to equity in the amount of two-thirds to make one-half of the VEBA payments, the payments to the labor retiree health benefits; to make one-half of those VEBA payments in the form of stock instead of cash; to eliminate the jobs bank that pays -- continues to pay workers even though they have been laid off; work rules that are competitive with the foreign manufacturers that are operating in the United States by the end of 2009; and finally, wages and benefits that are competitive with those foreign manufacturers operating in the United States also by the end of 2009.

What these loan terms say is, when you submit your plan for viability, you've got to meet those targets or you've got to come forward with an explanation for why deviating from those targets is consistent with the economic definition of long-term viability and why deviating from those targets in any way will not jeopardize your ability to achieve long-term viability.

So that's how we have incorporated some of the very good ideas about what constitutes viability that we heard in the debate on the Hill.

I just want to reiterate something the President said similar to the legislation: If these loan terms are not satisfied, if the test for viability is not satisfied by March 31st, the loan will be called and the auto manufacturers will be forced to repay the loan at that juncture. The only reasonable prospect if that happens would be to go into a Chapter 11 process.

The bottom line of what the President announced is that we are giving these companies and all their stakeholders, their unions, their creditors, their dealers, their supplies, we're giving them an opportunity to restructure, but it's not an opportunity that they can afford to waste, because it only lasts until March 31st. And we think this is the most effective and responsible way to address this challenge, protect the economy, and protect the American taxpayers in the process.

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

MR. KAPLAN: Well, the loan terms are to the manufacturers. The lender is the Treasury; the borrower is the auto manufacturer. Treasury continues to be in discussions with the auto manufacturers, but I would say those are on technical elements of the term sheet, not on the fundamental issues that I just laid out. Read more Comment (0), Email this.

MR. KAPLAN: I will leave that ultimately to the Treasury and to the automakers to say when the term sheet has been signed, but our expectation is that the terms that I laid out and that the President laid out in his speech are ones that both the auto manufacturers and the Treasury Department will be comfortable with. Read more Comment (0), Email this.

MR. KAPLAN: Sure. The President explained why, I think, very well in his remarks. In terms of the how, look, we thought the right approach was legislation for any number of reasons, starting with the fact that it has always been our very strong preference to preserve the TARP for financial institutions of the kind that you have seen it used to assist previously. That was why we fought very hard to get agreement from the Democrats in Congress to use the already appropriated 136 funds.

There were other very significant advantages to going by legislation, the most important of which is that legislation is binding -- binding on this administration, binding on the next administration. And one of the very important components of that legislation was a provision that said, if they do not achieve viability, not only is the loan called, but no further federal financing shall be available. We thought that was a really important piece of leverage in that legislation.

Legislation didn't pass, though, and the President was faced with a decision about whether, in the absence of legislation, to permit these auto companies just to fail. For the reasons he laid out in his remarks today, he did not think that was a acceptable or responsible alternative given our economic circumstances, and frankly given that there's a new President coming into office on January 20th. And the President did not believe it would be responsible for him to hand off to his successor a disorderly failure in a very important sector of the economy that could have, you know, damaging consequences. He didn't think that was the right thing to do for the economy or for the country, and he didn't think it was a responsible thing to do for his successor.

So once you've established that first decision, then the question becomes, how do you avoid a disorderly failure? And there, there were a number of options and the President took a lot of advice and asked a lot of questions of his economic advisors about what is the best way to provide government assistance in order to avoid that very damaging economic outcome.

And there was, like I said, a lot of advice. There was a lot of discussion back and forth. We got, as you might imagine, a lot of recommendations from commentators and from members of Congress who -- some of whom had been in support of the legislation and some of whom had been support -- had been supportive of other approaches. We got a lot of incoming from them and that was something that we took very seriously, and the President took very seriously, in coming up with what he believed what the most effective and responsible approach for the country.

Yes, ma'am. Read more Comment (0), Email this.

Q Speaking of Congress, in order to fulfill this agreement that was brokered, the administration

MR. KAPLAN: Let me just address the premise there in the question. It's not necessarily true that this administration in the remaining 31 days, I believe, will go back to Congress. What is clear is that the Treasury with these loans has effectively committed the first $350 billion from the TARP.

The actual disbursement of that amount is subject to approval of -- not the amount for the auto manufacturers, but for the other components of the $350 billion. Some of that has -- while it's been committed, hasn't actually been spent; it hasn't gone out the door. And there are some steps that are still going on that mean there is room within that $350 billion in the near term to address the existing commitments and the one the President made today. But in the very short term, we will need to go -- we, or the next administration -- will need to go to Congress to get the second $350 billion if they are to get the last chunk of the loan that's being discussed today. And that's about $4 billion. $13.4 billion will be made available in December and January. The remaining $4 billion is contingent on the second $350 billion. That money, based on what we know today, is not needed by the auto companies until February, which means that there will be ongoing discussions between the Secretary of the Treasury, the President-elect's transition team, and the leadership of Congress on when is the best time and the best mechanism for releasing the second $350 billion. Read more Comment (0), Email this.

MR. KAPLAN: It will not surprise you to know that there are different signals that you get from different members of Congress on this issue, as with all others. There are some, I'm sure, in Congress who are chomping at the bit to vote on the $350 billion in favor of it. There are others who will have questions. Those are the kind of things that we need to discuss going forward with members of Congress and also with the President-elect's team.

What's been made clear today is that the last $4 billion of this loan facility will require the next $350 billion, and that will have to happen if the loan is to be completed some time in the near future. That does not mean it has to be completed within the set period of time remaining in this administration. Read more Comment (0), Email this.

Q Joel, can you characterize what needs to be done in the next three and a half months in the auto

MR. KAPLAN: Well, it is an ambitious time frame, but there's a big challenge out there. And the American public and the members of Congress and the President want these manufacturers and their stakeholders to step up to that challenge. They've got to fundamentally restructure. That's been the whole essence of this debate, starting with the legislative proposal last week or two weeks ago, and with this proposal.

One of the options that was being urged on the administration from certain quarters was to have them do that restructuring right now before this administration even is out, in the next 31 days. We did not think that was a reasonable time frame to do the kind of things that you'll need to do here, which is for each of the stakeholders to make deep and meaningful concessions of the kind that I laid out of the specific targets, but others, as well.

This is a -- it's a tough thing to do, but it's an essential thing to do if these automakers are going to be successful and viable in the long term, and that's the ultimate condition of the loan. We were not interested in providing money to companies that are not willing to do the hard things needed to become viable. They've now got until March 31st. We expect that they will take that deadline seriously, they will act aggressively. There's no time to waste, and the American public expect them to get to work.

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

Q I'd like to ask two questions, one kind of a follow-up on that question. In net present value

MR. KAPLAN: You know, Treasury has spent a lot of time in the books over the last week or so making sure they understood the financial condition of the companies. So in terms of the precise -- their precise status, what their current net present value is, I'm not in a position to say. I suspect the folks at Treasury would be in a position to say. But it's clear that they do not have a positive net present value now. That's why they're headed, they were headed -- some of them -- for failure if the government didn't step in. And that's the case they've been making on Capitol Hill and to the administration for some weeks now. We do not have any reason to believe that that was not accurate.

So precise numbers, I'll have to refer you to Treasury. But bottom line is, they're not viable now. In their current business model with their current set of contracts, they need to become viable, and as with the previous answer, that's going to require some very difficult choices we think they're going to have to make. Read more Comment (0), Email this.

MR. KAPLAN: Oh, I'm sorry, yes, the financing arms. That's been a subject of ongoing discussion. You know, the -- we've said for a long time, actually, that there's a difference between the auto manufacturers and the financing companies in terms of how they've been perceived with respect to the TARP, because those are financial institutions.

Those discussions continue with the Treasury and the other regulators. I know there's been a fair amount of reporting and discussion about some of the applications that are in place, but this loan that's announced today is for the auto manufacturers' discussions with the financing companies about what assistance the government may provide are ongoing.

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

Q Joel, is there a repayment schedule in the agreement, or am I missing something? It seems a little

MR. KAPLAN: On the first question, Ed, you may recall the House -- the bill that passed the House was a seven-year loan, but one that would be called if the auto manufacturers did not come up with a plan for financial viability. The loan terms the Treasury has written I believe are for three years, but with the same -- the most important date for repayment is that March 31st date, that if they don't meet the plan for viability as the President's designee determines, then the loan is due I think within 15 days of that determination.

So there is a -- as with any loan, there are regular repayments and interest rates and all that in the loan terms. But I think the most important dates remain the overall three-year duration of the loan, and the March 31st requirement, which is the real stick here. Read more Comment (0), Email this.

MR. KAPLAN: Yes, there have been consultations ongoing between the President-elect's team and the administration. I'm not going to get into any discussions that may or may not have taken place between the President and the President-elect. Read more Comment (0), Email this.

Q Can you give us a breakdown of who's getting what out of the first $13.4 billion? And is there

MR. KAPLAN: Yes. The loans that are being announced today are for the GM auto manufacturer and Chrysler auto manufacturing company. Ford, in Treasury discussions with them, I believe does not believe that it needs a loan today.

Out of the total -- I mentioned that the total is $17.4 billion -- $13.4 billion of that is going to be made available to these two companies in December and January, and $4 billion is needed in February by GM. So if I do my math correctly, I think that means that $13.4 billion also happens to be the number, coincidentally, that is going to GM, and $4 billion is the number that is going to Chrysler. Read more Comment (0), Email this.

MR. KAPLAN: But it's a little confusing because these numbers just -- literally coincidentally happen to be the same, the total -- the total that -- Read more Comment (0), Email this.

MR. KAPLAN: Right, the February tranche of $4 billion is for GM. So $13.4 billion is being divided by GM and Chrysler in December and January. Read more Comment (0), Email this.

MR. KAPLAN: No, not evenly. Read more Comment (0), Email this.

MR. KAPLAN: I believe that it is $4 billion for Chrysler and the remainder, which would be $9.4 billion in December and January for GM, with the remaining $4 billion in February for GM. I apologize, I know those -- it's a little confusing just because of the coincidence of the numbers. Read more Comment (0), Email this.

MR. KAPLAN: Yes, the specifics of how the Treasury intends to get warrants from Chrysler, which is privately held, I'm going to have to rely on Treasury to give the details on. But these loans are to the auto manufacturing companies of GM and Chrysler. Read more Comment (0), Email this.

MR. KAPLAN: The determinant is the economic test that I spelled out at the beginning, which is that a firm will only be deemed viable if it has a positive net present value, taking into account all of its existing and future costs. So that means they got to reduce their costs and they got to come forward with reasonable assumptions of what their revenues are going to be. And the President's designee will take a look at that and say, does that satisfy the test of positive net present value? They've also got to demonstrate that they've got an ability to repay the loan that's calculated in their existing and future costs.

And then, we've set out, again, some of these specific conditions that we think are sort of indicia of whether you in fact have made the difficult decisions, or stakeholders have, to achieve long-term viability. Those are the ones I talked about with the competitiveness rules and the work rules for labor, the conversion of debt to equity. Those are the types of things you would expect to see.

But at the end of the day, what matters is an economic equation of whether or not you've got a plan that objective observers will look at -- most importantly the President's designee -- but other observers are going to look at this, as well. I think it's fair to say this is going to be pretty highly scrutinized when they come forward with their plan. And there's an economic test and people are going to look at it and say, okay, have they really brought their costs down in the way that they said they have? And are they making reasonable assumptions about what sort of sales and revenues they're going to have going forward? And those are the kinds of things that I think the next administration is going to have to look at by that March 31st date.

I'll also say there is a intermediate milestone in the loan terms in mid-February. So not exactly, but basically halfway between now and then, where the firms have to come forward and say, this is the business model, this is what we're trying to achieve, and then they have the remaining time between February -- I think it's February 17th -- and March 31st to actually deliver; that is, to get the agreements necessary to actually satisfy the business model.

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

Q Hi, yes, you said if -- you said there's room in the current first tranche of the $700 billion

MR. KAPLAN: Yes, on the first part of your question, I don't believe the Treasury Department is interested in reallocating. They've announced some very important programs that are critical to our health of our financial sector and they expect to be able to continue those programs. They have also, though, made clear that in order to access the last $4 billion in the facility, they will need to go into the final $350 billion. There's not a need to reallocate right now because they are -- that money is not needed by the auto manufacturer until February.

Secretary Paulson will have a statement at some point this morning, I suspect, and he will address more specifically the implications for the TARP and why it is that in the very short term the committed but unexpended TARP balances give him confidence that we have the necessary resources needed to address a significant market event.

So, some things to balance here, but the Secretary of the Treasury has reviewed it and has concluded that we can do these things within the amount that's been allotted so far. Read more Comment (0), Email this.

MR. KAPLAN: Yes, on President-Elect, when he becomes President, they -- his Treasury Department will become the lender and they will step in for the current Treasury Department. And I expect that they will have the same considerations that the current administration has about the need for these stakeholders to make very significant concessions. As I mentioned in my answer to the previous question, this is a mathematical judgment, an economic judgment as to whether these companies are viable. And that's in the loan term.

The comments I have seen from the President-elect and the public comments and the consultations that we've had indicate that the President-elect's team views the problem very similarly to the way the President and his team does, in that he has said, we don't want to put -- and I'm paraphrasing here -- we don't want to put good money after bad and we want the automakers, the U.S. auto industry, to succeed, but we know that for them to succeed is going to require very meaningful concessions from all the stakeholders. Read more Comment (0), Email this.

MR. KAPLAN: There's no question that one of the conditions, the targets that we have included in the loan terms, is a requirement that the work force for the U.S. auto companies that receive the loan become competitive with the -- Read more Comment (0), Email this.

MR. KAPLAN: We think that as a part of viability, it's going to be very important for all stakeholders to make concessions. One of the main stakeholders, obviously, in this discussion, is going to have to be the labor unions. And we think that being competitive with the -- with their competitors is part of what makes a firm viable. And so that's why we've set the conditions and we've set those specific targets.

Now, we have also said that when the company comes forward with its business plan and its restructuring plan for viability, they can deviate from the specific terms of those targets. But if they do so, they're going to have to explain why and they're going to have to explain how it is that deviating from what seemed like fairly sensible requirements but does not jeopardize the long-term health of their company, because we think that's what the American people want to see. Read more Comment (0), Email this.

MR. KAPLAN: We're talking about costs that these auto companies have across the board, and there's no question that in order to restructure, everybody is going to have to come to the table. And part of that equation is just going to have to be labor. And -- Read more Comment (0), Email this.

MR. KAPLAN: I believe the loan terms do include the language that was in the bill that was headed towards the Senate floor, requiring the restructuring plan to include plans to comply with applicable federal fuel-efficiency and emissions requirements. So that is a part of the plan for viability.

Just about everybody I've seen in the debate -- from the auto manufacturers to their supporters on Capitol Hill to their critics on Capitol Hill -- have recognized that part of what you need to do to be successful is to ensure that you're going to have not just reduced cost, but increased revenues and increased sales. And part of the solution for increased sales is to make sure that you're building the innovative cars that are going to be required in the years ahead. So that is part of the equation, as well. Read more Comment (0), Email this.

Q These loan terms are very tough, obviously, and I'm sure that's by design -- three-year repayment

MR. KAPLAN: No, it's -- we would like them to achieve the fundamental restructuring that they need to achieve outside of the Chapter 11 process. This gives them -- Read more Comment (0), Email this.

MR. KAPLAN: I don't know. That's going to be something that they're going to have to -- by "they," I mean all of their stakeholders -- are going to have to wrestle with and see what they can do in the next three months. This basically tells them, as the President said in his remarks, now is the time. This gives them an opportunity to achieve the type of restructuring that is often only achieved under the supervision of a bankruptcy court. This gives them an opportunity to do it. Whether they will take that opportunity or not, I certainly hope they will. We're trying to provide them the assistance that will incentivize them to do so. And if they don't, they will have to face the consequences of having the loan recalled by March 31st.

So I agree with you the conditions of the loan are tough, but I think that they have to be tough if we're to be successful in achieving the restructuring that I think most objective observers would say is necessary for these companies to be viable, and also necessary for them to warrant the taxpayers' assistance. Read more Comment (0), Email this.

Q Joel, this competitiveness that you're talking about, wage competitiveness, specifically, cutting

MR. KAPLAN: I wouldn't call it an out, I'd call it a balance, which is we did not have them in our original terms because what we've been focused on is what's the final outcome. Different companies have different models, they make different decisions, they enter into different contracts. But one thing successful companies all have in common is that they have a viable business model.

We did not believe when we negotiated the original language that we were in a position -- frankly, that anybody was in a position -- to determine exactly which concessions each party has to make. We thought that what was really important was the comprehensive plan at the end of the day that altogether resulted in a plan that was viable.

That said, in the context of the congressional debate, there were some pretty good ideas. There were some good ideas about the types of things that you would want to see, or would expect to see, in a plan for restructuring. So we said we will incorporate those good ideas, but we are not going to assume that sitting here today, writing a loan term, we have a monopoly on the wisdom of what the ultimate plan will look like.

So we have -- Read more Comment (0), Email this.

MR. KAPLAN: They have to explain why they've deviated from it and why their complete plan -- including whatever deviations -- leads to viability. So I would expect that when they do that they're going to have to say, okay, so we didn't do a two-thirds debt for equity swap, we did a 60 percent debt for equity swap, and here's why, and here's why we think that's okay, and we think that -- I'm just using an example here, illustrative example -- why we think that nonetheless this is a plan that leads to viability. And then the burden will fall still on the President's designee at that point to take a look at the plan and say, okay, I see why those deviations were made, I see your overall plan and I agree with you that you've accomplished the type of restructuring needed to warrant the continuation of this loan. Read more Comment (0), Email this.

MR. KAPLAN: What's in the plan is the President's designee. We had hoped that there would be a car czar established as a result of the legislation. The truth is we are 31 days out. In the near term, the President's designee will be the Treasury Secretary, who has leadership and responsibility for implementing the TARP. And we will remain in close contact with the President-elect's team. And if the President-elect's team believe that it will be helpful to have a person identified who could span the two administrations to work with the companies, we will certainly be open to that. But we don't -- we don't think that's something that we should impose just for 31 days, when the next administration may or may not have a different view about how they want to handle it.

So we'll remain in consultation with them, but the key is we've set the terms, we put them in the loan. Hopefully we'll have signatures sometime in the very, very near future. And then we'll just remain in contact with the Obama team and see what they'd like us to do. Read more Comment (0), Email this.

MR. KAPLAN: You know, I think in the near term -- meaning the next 30 days -- what they really need to do is knock heads together themselves. And they need to sit down and say, okay, guys, we've got until March 31st; we've got an interim deadline by February 17th; we need to get to work and we need to figure out what's a business model that adds up to success and viability.

Like I said, if the President-elect's team believes it will be helpful for us to name somebody, with their concurrence and suggestion, we would certainly be open to that. But given that the number of days is now short for this administration, we thought the most important thing was to get the loan terms and the conditions established and get those out the door.

Ed, and then I think this is the last question. Read more Comment (0), Email this.

MR. KAPLAN: Ed, I'm going to just sort of repeat something I've said already, which is what we're interested in is a viable U.S. auto manufacturing industry. We are not going to tell them exactly what it will take to be viable. There are certainly people out there who have argued that a merger would be useful. That's something that obviously the companies -- their management and their boards -- will have to consider. And they'll have to make determinations as they do in the course of their normal business -- but they're going to have to do them quickly, obviously -- about whether or not that's something that makes sense. We are not going to tell the manufacturers what the right structure is for them to be viable. We're just going to tell them that if you want taxpayer assistance, you're going to have to make those decisions and you're going to have to prove it. That's the idea.

Thanks very much, appreciate the time. MS. PERINO: Okay. Since he was up here for nearly 40 minutes, I think that was probably enough -- but if you have additional questions on this, I can answer them. I would point out that Treasury Department plans to have, I think, a technical briefing on these details at 10:30 a.m., so in about 20 minutes.

So, Steve. Read more Comment (0), Email this.

MS. PERINO: Not that I -- no, I don't believe so. I think it's just the fact that they would be paid back. But I will double check for you and make sure. Read more Comment (0), Email this.

MS. PERINO: I don't know. I'll have to check for you. Read more Comment (0), Email this.

Q Dana, the U.S. is signing a strategic partnership agreement with Ukraine this morning at the State

MS. PERINO: I'm not familiar with what exactly the agreement is. Maybe it's just that it's appropriate that it be signed at the State Department by the Secretary of State. Obviously our support for Ukraine is well known and I don't think that's going to change in 31 days when the President-elect comes onboard. I think the support for Ukraine is going to hold strong. Read more Comment (0), Email this.

MS. PERINO: I don't know if it has to be, but I don't have any reason to believe that they would not support a democratically elected government of Ukraine. Read more Comment (0), Email this.

Q And lastly, I guess in the context we have been discussing here -- last but not least -- the thing

MS. PERINO: Well, I'm sure that the IMF when they went forward to try to help the Ukrainians thought about all of the ramifications and I'm sure none of the problems are going to be solved overnight. It's probably going to take a long time to get it done. Let us check into the specifics of the needs there, but I think that the IMF has it covered. It's just going to take a while for them to shake it all out. Read more Comment (0), Email this.

Read more Comment (0), Email this.

MS. PERINO: Hey, everybody. A couple of things for you. The President just met with Rich Williamson -- he's the special envoy -- the President's special envoy to Sudan -- to receive an update from him on the situation in Darfur and the status of a comprehensive peace agreement that the North and South are trying to work out.

Also this morning, at 10:20 a.m., the President will drop by Mrs. Bush's meeting in the Yellow Oval Room in honor of the U.S.-Afghan Women's Council. The President and President Karzai launched this council to support Afghan women in the areas of political and economic participation, literacy, education, legal awareness, and then access to health care. Mrs. Bush is welcoming new members and will announce that Georgetown University will manage the council with the transition to a new administration.

Earlier this morning, Mrs. Bush participated in a secure video teleconference with Afghan women entrepreneurs in the Roosevelt Room, and afterwards, Mrs. Bush will also participate in interviews with David Jackson of USA Today and Greta Van Susteren of Fox News.

This morning, at 10:45 a.m., the President will make remarks on presidential perspectives on domestic policy-making to employees and guests of the American Enterprise Institute at the Renaissance Mayflower Hotel, just across the street here in Washington. He will also answer questions that have been collected from audience members. So you'll have that in just a minute.

The President this afternoon will participate in an interview with Steve Scully of C-SPAN; that's at 1:15 p.m.

And then I would point you to, just to highlight, yesterday the Department of Justice's Bureau of Justice Statistics announced that 2007 violent crime and property rates were at or near the lowest level since 1973. That was the first year that data was collected, in 1973. And more information can be found at the DOJ website, for Bureau of Justice Statistics.

And with that, I'll take a drink, and then take your questions.

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

Q We've heard from the podium and then also from the President himself over the weekend on Air Force

MS. PERINO: No. I would just remind you, it was just a week ago that the legislation on Capitol Hill did not pass. And so what we were left with then was to try to come up with how do we move forward.

Just to step back for a minute, if you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option. In a strong economy, we would probably come to that conclusion, as well. But we don't have a strong economy today. We're in the middle of a recession, and we have continued credit and financial market issues that we're trying to work through. And the overwhelming evidence is that the collapse of the American auto industry would have a terrible negative consequence for our national economy, resulting in massive job losses, the failure of many businesses who are dependent on the auto industry. The ripple effect would be quite strong.

And so once you've decided that the economy cannot withstand that type of a blow, then the only question is how do you deal with it. And I know that there are a lot of opinions out there about how to deal with it, or to not deal with it at all. But there's only one person who has the responsibility to make a decision and to get the answer right once Congress failed to act, and that's the President. And that's why it's just taking us a few days to get information from the companies, digest it, see how we could provide possible short-term help to them.

I will tell you this: The President is not going to allow a disorderly collapse of the companies. That is not an option. Some people have assumed that that's one of things that we would decide. That is not going to be the case. When the President says we're going to take all of this into account he means that we're going to do something. And we're nearing a conclusion, we're narrowing options. I just don't have anything for you today. Read more Comment (0), Email this.

Q Let me just ask two things quickly. Do you think the week will end without a decision? And, two

MS. PERINO: By that I mean a disorderly collapse would be something very chaotic that is a shock to the system. There's an orderly way to do bankruptcies that provides for more of a soft landing -- I think that's what we would be talking about. That would be one of the options. I'm not saying that that is necessarily what would be announced.

And you asked if it would be before the end of the week. I just -- I can't tell you right now, but I can tell you we're nearing a conclusion and we're very close. Read more Comment (0), Email this.

Q A structured bankruptcy, as opposed to a disorderly collapse, would involve the cooperation of

MS. PERINO: That is one of the considerations that we're taking into account. If you remember, the legislation that we supported going back the past several weeks was one in that we said that all the stakeholders, all the ones that you listed, were going to have to come to the table and be willing to make some really tough decisions and concessions on their part in order to become viable companies in the future and to qualify for any taxpayer assistance, if there was going to be any.

That was -- what we thought was reasonable and appropriate was to provide the auto industry an acceleration on the money that was already appropriated for the auto industry. But because Congress didn't act, then the President is left with, okay, well, even though majorities in both houses of Congress said that they supported this action, now we have to look back and say, how can we do it.

And that doesn't -- but that doesn't mean that those stakeholders aren't going to have to make tough decisions. No matter what in this -- in any scenario that comes forward after this decision-making process, all those stakeholders are going to have to make tough decisions. Read more Comment (0), Email this.

MS. PERINO: I can say we're very close, but other than that I don't want to characterize it. Read more Comment (0), Email this.

MS. PERINO: I'd say it's in the spectrum of options, and there are a lot of options.

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

MS. PERINO: Well, we certainly took that into account. There's no doubt that we're -- they're in a very fragile state right now. They usually do shut production for some bit of time at this time -- Read more Comment (0), Email this.

MS. PERINO: -- but not for a month. So we are taking that into consideration. And again, the President has the responsibility to look at the economy in the big -- from the big picture. And if the economy was as strong as it was just a couple of years ago, or a year ago right before the credit collapse -- or the credit crunch -- then we wouldn't necessarily be having this conversation. But because the economy is in such a weakened state, he feels that he needs to do something. And that's why he's tasked his advisors to work round the clock to try to come up with something that would protect the taxpayers, but not allow a collapse that would hurt everybody in America.

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

MS. PERINO: You know, as frustrating as it is for you to not get answers from me -- I mean, it's as frustrating for me. I can't provide you anything more. But as soon as we can, I will. And then we'll be able to talk to you about the process we went through.

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

MS. PERINO: Well, they all have their opinions. And as I said, there's a lot of people with opinions, but there's only one person that has the responsibility to make a decision that would be best for all Americans, and that's what he's trying to do.

There's a range of things that we could do, from providing -- one of the things we've said is that the President could provide some short-term financing through the TARP money; this is the rescue money that we had passed I think just the first week of October. That's one option. Read more Comment (0), Email this.

MS. PERINO: It's one option that they're looking at to see if that would be possible. The other one would be one of these bankruptcy -- I mean, there's a range of options. I don't want to rule anything in or out, but there's a whole list of them.

Richard, did you have one? Read more Comment (0), Email this.

MS. PERINO: I would just say that we want a robust auto industry in America, and we think that they can be competitive and viable, but they're going to have to make tough decisions to get there.

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

MS. PERINO: I don't know if we have, in terms of a formal letter of response. But we've got letters from all sorts of members of Congress and people from across the country, expressing their desires and opinions on this matter. And we always respond in due course. Read more Comment (0), Email this.

MS. PERINO: Not necessarily. I mean, I think that there's a lot of conversations that are ongoing between us and Capitol Hill. We don't -- we never close off communication. But we were left with a situation that the President had to do something when Congress failed to act last week. Read more Comment (0), Email this.

MS. PERINO: Yes. Yes, ma'am. Read more Comment (0), Email this.

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

Q Thank you. Women in Afghanistan -- I am a woman, I know the situation, women feeling out of the

MS. PERINO: Well, you'll get to hear from the President soon. He's having the event today. The President was just in Afghanistan this weekend, and I had the pleasure of being able to be there.

There's remarkable changes that have taken place since 2001. The fact that you're here today I think is a testament to that. And we have all of NATO agreeing to be a part of a effort to try to beat back the Taliban. I think that one of the things that we need to remind people of is that Afghanistan is the fourth poorest country in the world. They have a 78 percent illiteracy rate. When we go to try to train their troops, it's not like you can hold a class. You have to go out in the field and do a lot of repetition. And they're good soldiers and good fighters, but they just need a slightly different type of training than you could maybe do in someplace else like Iraq.

So there's a lot to be done, but we've come a long way, especially when it comes for little girls being able to go to school. And the President and Mrs. Bush have both said in recent days that they plan to remain involved in Afghanistan. And Mrs. Bush in particular has a soft spot in her heart for the women of Afghanistan, and she'll continue to work on their behalf.

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

MS. PERINO: I've seen the reports of it. I've not seen the President today as to whether or not he's actually been apprised of those reports, as well. But as I said, the President harbors no hard feelings about it, and the Iraqis have a process that they'll follow. But he did urge them not to overreact, because he was not bothered by the incident, although it's not appropriate for people to throw shoes at a press conference, at any leader. Read more Comment (0), Email this.

MS. PERINO: I'm not as well versed in this, in terms of the details. The Department of Health and Human Services could provide you more. But over the past three decades, Congress has enacted several laws in order to protect people who have a -- who want to practice their health care according to their conscience when it comes to reproductive rights. And this new regulation will increase awareness of those laws and compliance with them, but it doesn't change any of the laws in regards to reproductive rights. So it's just about people. Read more Comment (0), Email this.

MS. PERINO: Yes, and we think it clarifies it, because there have been laws passed over the past three decades and we think this puts it all in one place so that people can have all of their rights respected. But the Department of Health and Human Services could provide you more detail.

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

Q Sorry, let me come back to the automakers for a second. You said that you were waiting -- you'

MS. PERINO: I'm not aware of all the details, but I know that they've been talking to the head of the UAW, sure. Read more Comment (0), Email this.

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