Press Briefing by Press Secretary Jay Carney, 7/12/12
James S. Brady Press Briefing Room
12:04 P.M. EDT
MR. CARNEY: How is everyone today? Welcome to the White House. Thanks for being here, as ever. I have no announcements to make at the top, so I'll go straight to Ben Feller of the Associated Press.
Q Thanks, Jay. I had a question that I think carries over from the campaign to the White House, so I'll give it a try here. The campaign said today in a call that Governor Romney has either misrepresented himself on his SEC filings and committed a felony, or if not, he's not being honest with the American people about when he left Bain. And I'm wondering, just as a matter of principle and character, whether President Obama stands by that position, that he thinks Governor Romney is dishonest.
MR. CARNEY: Well, I would say a couple of things. One, the campaign I think did address this, so this is a campaign-specific question and I would direct most of your inquiries to the campaign.
The President feels very strongly that we need to take action in Washington to reward companies that insource, that bring jobs back to the United States, that build industries here in the United States, and to eliminate incentives that exist in our tax code that -- incentives to companies to outsource, to move jobs overseas. That's his position, and his record, his commitment, is demonstrated throughout his presidency to this general principle.
There's been some discussion about the Recovery Act. The entire purpose of the Recovery Act was to grow the American economy and grow American jobs here at home, and that's what it did. It's widely recognized to have broken the back of the recession, to have reversed the situation where we were losing jobs at a rate of 750,000 per month to one where we've created over 4.2 million private sector jobs. The Recovery Act alone is viewed by outside economists as having saved or created over 3 million jobs.
And it was one of the principles -- the Recovery Act had many components, but one was to provide direct relief to states to stop the hemorrhaging of jobs in areas like public schools and police and fire departments. Another was to give the middle class a tax cut to help it weather this terrible recession. And another was to make some long-term investments in industries that would help the economy grow in the future, and that includes in the clean energy industry.
And one of the successes of the Recovery Act was getting companies that had the choice of building facilities in China or India or Europe or the United States to make the choice to build in the United States. And there is example after example of that -- the advanced battery industry is a good one. It was virtually nonexistent, when this President took office, in this country, had about 3 -- U.S. companies, U.S. facilities had about 3 percent of the market, and we're well on our way to having a substantial portion of that market because of the investments in the Recovery Act.
So I can talk about the President's position on insourcing versus outsourcing, his demand that Congress act to end incentives that encourage companies to outsource. But for campaign-related specifics, I'd refer you to the campaign.
Q Okay. One quick follow on that before going on to another subject. Again, I think this goes straight to the President, so I'll try -- when Romney became the presumptive nominee, the President called him and -- I'm paraphrasing here but essentially said, congratulations, and we ought to have a big debate about the future of the country. Does the President think that what's happening right now, this debate about who's telling the truth, who's lying, is this befitting of a presidential campaign?
MR. CARNEY: The President believes that there is a great deal at stake in this election. You hear him say often that this election in many ways might be more consequential than the last one. What we have now is a situation where there are two starkly different visions about how we need to move the country forward economically. He remarks -- and I think it is remarkable, as somebody who covered it -- that the President succeeded a Republican who believed in immigration reform. He ran against a Republican who believed that climate change was real. There has been a -- the differences between the two parties and their positions and their visions have become more and more stark in a short period of time.
The matter of tax fairness, the issue of what you would do to encourage the development of economic -- the development of industries here in the United States to create jobs for American workers here in the United States, and what you would do to prevent or discourage companies from outsourcing -- those are fundamental matters of debate, because, as the President said, he could not agree more with the idea that the economy is the number-one issue in this debate. And he is very interested in having that discussion.
I mean, if you're referring to the article in the Boston Globe, that was a piece of reporting by your colleagues that -- it's not something the campaign produced. So it's an interesting read, but beyond that, I would refer you to the campaign.
Q The other topic is the Penn State report. I'm wondering if the President has been made aware of the findings or -- and if the White House has a reaction.
MR. CARNEY: I haven't spoken with him about that today, but I suspect he is aware. He addressed this not long ago and I think he made an observation that I know he feels deeply, which is that what happened at Penn State is a reminder that institutions have -- individuals and institutions have grave responsibilities to make sure that our children are taken care of and protected. And it is an indication perhaps that -- well, it is a clear indication that that responsibility was not taken with the seriousness that it needs to be taken by institutions across the country.
So as you know, he’s a devoted sports fan so followed this story. And again, I haven’t spoken with him about it yet today but I’m sure he’s aware of it.
Q Jay, can the President do more to show leadership on being transparent with regard to documents, records, his own background? That’s another sort of underlying theme here that the campaigns are clearly going at.
MR. CARNEY: Are you talking about Donald Trump? (Laughter.)
Q Not talking about Donald Trump.
MR. CARNEY: Well, you’d have to ask me a specific question. I think the President’s record of unprecedented levels of transparency in the White House is well established. His record as a candidate, both when he ran for the Senate and when he ran for President in 2008 and now as a candidate for reelection, in terms of transparency is a solid one and reflects a long tradition of being an open book, as I think he described it when he was asked this question not long ago.
That’s part of the process. It’s not always pleasant or comfortable, but it has become a well-established tradition in our country to make available information about one’s private dealings. That just comes with the territory. So he not only accepts that but practices and believes that it’s the right thing.
Q I know this has been asked for years, but one thing that people -- at least on the -- among his opponents, continue to bring up is the -- his college records.
MR. CARNEY: Right. This is a Donald Trump question, which I think --
Q That’s the Donald Trump.
MR. CARNEY: -- he’s the one who brings it up the most.
Q But what’s the answer to that particular question?
MR. CARNEY: I would refer you to the campaign. It is preposterous -- this is from the guy who insisted that he didn’t believe the President was born in the United States. And it is funny, every once in a while when I sit back in my office and remember all the things that seemed to be the most important issue of the day, and there were briefings after briefings where that was the most important issue of the day, to the point where we had to solicit the long form of the President’s birth certificate.
And again, the President’s record on transparency is extremely sound. He has provided the kind of documentation that candidates for President have now, by tradition, provided for 30 years. And he believes it’s the right thing to do.
Q All right, swapping to one -- sorry -- last non-campaign or transparency-related question. Yesterday you couldn’t confirm that this ambassador had defected.
MR. CARNEY: I can confirm that the Syrian ambassador to Iraq defected. And I think the Syrian government’s response was, "you can’t quit, you’re fired" -- which is another sign of the desperation, I think, that is enveloping the Assad regime. We are seeing daily now more and more indications that Assad is losing his grip, that those around him, both in his inner circle and more broadly in the military and governmental leadership, are beginning to assess Assad’s chances of remaining in power, and hopefully beginning to assess Assad’s legacy -- his legacy of brutality -- and making the choice that they will abandon him in favor of the Syrian people. So this is another example of that.
Q Following up on that, can you confirm the ambassador’s location? There are reports that he’s in Qatar.
MR. CARNEY: I cannot confirm that. I don’t know.
Q Okay. And going back to some of the questions yesterday about the President not speaking to the NAACP -- you referred most of those questions to the campaign, and yet President Obama delivered a videotaped message that seemed to have been taped in the White House. So why does this fall under the umbrella of the campaign?
MR. CARNEY: Well, the campaign is handling a lot of his scheduling for campaign-related events. Again, I think the President’s opponent appeared, and --
Q You think?
MR. CARNEY: I’m told. (Laughter.) The President films a lot of videos -- I haven’t seen this one -- but to events that he cannot attend or is not able to attend for scheduling reasons or whatever reason. So I’ll have to get back to you. I’m not even sure what room he filmed it in.
Q Do you know when he filmed it, and was it because there were a lot of questions about the fact that he was not going to be attending --
MR. CARNEY: Absolutely not. I can’t remember exactly when he filmed it. I’m sure it was recently. He, as you know, films his weekly address and other video messages every week, and it is absolutely routine when he does not -- or is not able to attend an event, but wants to be able to send a message, that he will videotape that message and provide it to the convention or conference or gathering in his stead.
Q So why not announce yesterday, when you got all of these questions about it, he would be delivering a videotaped address?
MR. CARNEY: I think you’re reading something into this that there isn’t. The issue was would he attend and why didn’t he attend. He provides a video as a matter of routine to events he doesn’t attend.
Q And just following up also on the discussions about the sequester -- you said yesterday that the OMB is developing an analysis in case the sequester should be put in place. Can you give us a sense of where specifically they are in that analysis? And at what point do they begin to contact other departments?
MR. CARNEY: I don’t have a date-specific for that. Obviously you know the sequester is written not to take effect until the beginning of next year, as I understand it. As we have made clear, should it get to the point where Congress has failed to do its job, as dictated by Congress, and the sequester may take effect, OMB and DOD and the various agencies will be ready.
But we do not believe that should come to pass. The whole point of the Budget Control Act was to create a trigger, a forcing mechanism that was so onerous that nobody wanted it to come to pass. The defense cuts, the President agrees, are too steep; the non-defense cuts, the President believes, are too steep. That is why Congress needs to come together and make some hard choices around the kind of balanced proposal that the President and every other person who has looked at this seriously, including bipartisan commissions, agrees must be taken in order to deal with our long-term deficit and debt challenges.
We’ve accomplished, in spite of all the rancor and disagreement, close to $2 trillion -- I think $2 trillion in non-defense discretionary cuts. There is more that needs to be done, and we need to address that through a balanced approach that Congress needs to take up. And that’s how we avoid the sequester, which was never meant to be implemented.
Q Jay, in talking yesterday about tax cuts, you mentioned that the President was always open to compromise. So I want to ask you, how locked in is the $250,000 ceiling? I mean, could it be adjusted to $500,000 or $1 million? Is there some play?
MR. CARNEY: Bill, what I’ve said -- and I appreciate the question -- the President’s position is what it has always been. He will not extend tax cuts to the wealthiest 2 percent of the American people. He is committed to extending, and believes we should make permanent, tax cuts for 98 percent of taxpaying Americans -- a middle-class tax cut for Americans who need it.
And this is because we simply can’t afford to spend another close to a trillion dollars over 10 years on tax cuts for the wealthiest 2 percent of American earners. One of the reasons why we have the fiscal situation that led to the super committee and the Budget Control Act and the negotiations last year is because those two tax cuts were promoted by the previous President, passed through Congress and signed into law, and were totally unpaid for. And what we saw, as a result in part of those policies and many other policies that were implemented, was the slowest job creation of any expansion in recent memory. We saw the middle class put under even greater stress and saw its incomes stagnate and shrink while more affluent Americans saw their wealth increase. And if all that weren’t bad enough, we had the great recession, the worst financial and economic crisis of our lifetimes.
So it’s not that hard to deduce that we shouldn’t do that again. What we should do, since we all agree it’s the right thing to do -- Republicans and Democrats alike -- is extend the tax cuts for 98 percent of the American people. Pass it now -- the President will sign it right away. And then we can continue to debate whether or not the right economic policy, the right policy to improve job creation, to improve economic growth in our country is to give more tax cuts to the wealthiest Americans.
And I understand that there are people in Washington who believe that is the right policy. There are candidates for office who believe that is the right policy, that that is the ticket -- that is the key to future economic growth. And that is a debate we should have. But we should not hold 98 percent of American taxpayers hostage. We should not say you're not going to get a tax hike unless the wealthiest 2 percent get a tax cut. We should all agree on the idea that 98 percent of American taxpayers should get a tax cut, get that security and certainty, and then debate the issue of tax cuts for the wealthy.
Q But as you know, there are supporters of the President, Democratic leaders who think they can -- who calculated they could go up to a million dollars and still have sufficient revenue to --
MR. CARNEY: The President firmly believes that we cannot afford to extend tax cuts over $250,000. He has made his position clear. I think you've seen broad support from Democrats for the President's position. And we certainly hope to see the Senate given the opportunity to vote on that proposal in the near future.
Q Thanks. Was the President serious on Monday when he said -- challenged Congress for an immediate vote on this? Because yesterday in the Senate, twice during floor action, that was proposed so long as they voted on something else as well, a different version as well. And both times it was -- did the President discuss that with the Democratic leaders? And did --
MR. CARNEY: The President was deadly serious. And as I said yesterday -- and as I think if you dig into it will recognize what was proposed in a gimmick by Senator Hatch was not the President's proposal. In fact, it left out the extension of the American Opportunity Tax Credit and other tax provisions that would have resulted, if that were passed, in a tax hike for 18 or 25 million American families.
So that was a gimmick. The Senate is in a process of considering very important tax relief for small businesses that the President has initiated and supports. And there will be a vote, we hope, on the President's proposal, which includes all the middle-class tax cuts that were part of the President's plan. And he believes that there will be strong support from the Democratic Party for that -- and that there should be 100 percent support in the Senate, because -- I don't know, go to their websites -- doesn't everybody in the Republican Party support tax cuts for the middle class? And if so, they should vote for it.
Q On the NAACP speech, the Vice President's office says that that was a political appearance of his today. And I assume that the President's video was a political one --
MR. CARNEY: I have to -- the problem is I haven't seen it as I was just asked about this.
Q It looked like a radio -- a weekend address.
MR. CARNEY: But I think we were referring to the campaign on this because this is a question.
Q My question is this. The Vice President used the official presidential seal on his podium, as the President did on Friday at Carnegie Mellon, using the presidential seal, at what was clearly announced as a campaign. Is he changing the policy now? Is he going to start using the presidential seal --
MR. CARNEY: You've covered a number of Presidents, Ann, and you will find that many Presidents running for reelection have, when they stand in front of that particular podium, used the presidential seal. It's government -- that podium is government property. We don't hang campaign signs on it. We use the presidential seal.
Q And in almost every one of President Obama's campaign appearances during this cycle, he has not.
MR. CARNEY: I think if you look at -- again, we can have this discussion in more detail, but if you pay close attention to it and you look at the podium, you'll recognize that when that podium is used that we use the presidential seal.
Q I'm going to ask another question since Bill Press took mine.
MR. CARNEY: I'll give you a little time while -- (laughter.)
Q No, that's okay. I got it. I got it. So, number one, should we expect some of the Iran sanctions to be coming today? And since we're here now and they haven't yet, can you tell us, if so, what they are? And also, can you talk to us a little bit about tomorrow's trip and any travel next week in terms of what he wants to accomplish from a policy perspective, as well as the politics of the travel?
MR. CARNEY: I have no announcements to make on sanctions. I can tell you that we have seen that the actions taken by this administration and with a great deal of unanimity around the world in isolating and pressuring Iran have had an impact, an economic impact on the regime in Tehran, which the leaders there have themselves acknowledged and spoken about. And we will continue to put pressure, working unilaterally and with our partners, on the Iranian regime until they make the right choice, which is to abide by their obligations to the United Nations, to the international community, with regards to their nuclear ambitions.
I believe that the upcoming travel that you're referring to is campaign travel. But I think the point you make is a good one, which is that the President has been and will continue to talk about -- as well as his broader message that the campaign can discuss with you in more detail -- some very specific things that have to do with what Congress can do now, what we can do now to help the American economy grow and create jobs. And that I think begins with what we've been discussing already today, which is the need to have Congress extend the middle-class tax cuts.
I think I mentioned yesterday -- people -- "oh, isn't that just a political issue, because the Republicans aren't going to go along with it? Republicans are complaining that you're trying to beat them over the head with this by supporting middle class tax cuts." And my answer to that is if that is what you fear, then take the opportunity away from him by extending the middle-class tax cuts. That's what he wants. He thinks it's right for the economy, he thinks it's right for the middle class, and would not be happier to sign that thing -- that bill right away if the opportunity presented itself.
Q And just a quick follow-up -- since it's turning into that season where so many days now he'll be on the road, and many of these days will be almost entirely campaign days for schedule purposes, how is he -- how have you guys broken out how he manages the time that he needs for policy stuff? I mean, obviously you can do all that stuff. There's communication on the plane. But if a foreign leader calls, the briefing is on actual issues and what's going on -- how do you schedule time into those days for him to do that?
MR. CARNEY: Well, that’s a good question and it's obviously one that every incumbent President must confront if he or she is running for reelection, as the President is. We, as previous Presidents have, benefi+ted from the sophistication of the operations here in the White House that provides the kinds of communication capabilities that a President requires when he or she travels and that allows for the kind of instantaneous communications needs that a President has on the road.
But he gets, as you know -- I think you and I talked about this a little either earlier this week or last week -- a President of the United States, even when he or she is running for reelection, is President of the United States 24 hours a day and seven days a week. And, therefore, the presidency travels with him or her wherever he goes. And that requires a national security staff and obviously -- Secret Service and other staff -- but other White House staff that travel with him, in addition to campaign staff who are helping him manage the events that he is engaged in.
So it's no different from President George W. Bush when he ran for reelection or President Bill Clinton when he ran, and I'm sure Ronald Reagan and George H.W. Bush before them. But I remember some stories a few months ago that talked about how we were not ramping up quick enough. And the President is committed to -- when I say "we", I mean that the campaign was not ramping up quick enough. And the President's first commitment is to his responsibilities in office. And that is just a reality that you have to accept if you're President, that there are going to be times when the campaign has to wait because he has to make important decisions, have important conversations with foreign leaders, or meetings with staff and others -- members of Congress -- to get the work done that needs to be done.
Yes, give me one second. Go ahead.
Q Did the President discuss --
MR. CARNEY: You have to tell me who you are first.
Q Yes. I'm Tamara Keith, from NPR.
MR. CARNEY: Oh, yes. Sorry, somebody emailed me about that and then I blew it -- nice to see you. Thank you for being here.
Q It's nice to see you. Did the President, when meeting with the congressional leaders yesterday, discuss any sort of a timeline for a vote on the middle-class tax cut proposal?
MR. CARNEY: Well, I think we provided a readout. I don't have a date specific for you. They discussed a number of issues, including the middle-class tax cut, other items on the congressional agenda, actions that Congress can take to help small businesses, actions that Congress can take to put construction workers and teachers back to work. But I don't have a specific date for you. I tend to leave Senate scheduling up to the Majority Leader.
Q Absolutely. The criticism is that there isn't even language yet. And I don't know --
MR. CARNEY: I don't think it's that complicated. The President wants to extend the so-called Bush tax cuts as well as the other middle-class tax cuts the President put into place for a year. And these tax cuts go to 98 percent of American taxpayers. He does not support and does not believe we can afford extending tax cuts for the top 2 percent in this country. And that is his position. There will be an opportunity for the Senate to vote on that, as Majority Leader Reid has said, but I will leave it to him to announce when that's going to happen.
Q Just following up on Margaret's line of questioning, I have no doubt that when there are urgent priorities that in his job as President he makes the time to make that happen. But when it gets to the point where he's campaigning almost every day on the road, what goes? I mean, there's only so many hours in the day and he does still have to sleep, so where -- what is it that he has been doing all along that he won't have time for when he's in intensive campaign mode?
MR. CARNEY: Well, I think as you might expect, and you have seen in previous administrations, that there is less foreign travel in a campaign reelection year. Foreign travel tends to take up a great deal of time; it's very important. This President has traveled widely in pursuit of American interests around the globe. But it is certainly the case that there will, I'm sure, be fewer days out of the country this year for the President than in previous years. I think that's a result of the reality of the campaign year.
But other than that, I think that there really is the opportunity between the days he's here and his capabilities when he's traveling, the opportunity to get the briefings he needs, have the interactions with foreign leaders that he needs, and congressional leaders that he needs. And as I mentioned before, there will be times, I'm sure, when a planned stop on a campaign -- for a campaign event has to be delayed or postponed or cancelled because of some pressing business of the presidency. And that's just how it is. But it's nothing to complain about, right? I mean, he's running for reelection and that's part of the process.
Q Jay, on the seal, can you say why there was a change of policy in using the seal on lecterns at political events? Your predecessor made it clear during the midterms that President Obama would not use the seal at purely political events.
MR. CARNEY: Mark, I would just refer you to past practice of previous Presidents. When this President is at campaign events that involve raising funds for the campaign, he uses campaign -- depending on the event, whether there's a podium or not. In this case, as has been the practice of his predecessors running for reelection, there are times when it's entirely -- it is certainly in keeping with past precedent and appropriate to have the presidential seal on the podium behind which he is standing because he is actually the President of the United States.
Q Well, I'm not saying he shouldn’t use it. I'm just saying that two years ago you said one thing and now you're saying another.
MR. CARNEY: Well, I don't know that comment specifically, but I can tell you that this is in keeping with past precedent. And I would point you to photographs of previous Presidents running for reelection --
Q Oh, yes.
MR. CARNEY: You understand that, right? You seem doubtful, but I can find photos for you.
Q It's a change for you now. This is the first -- as far as we know, the first campaign event President Obama has done all year, at Carnegie Mellon he used the seal on a podium he uses all the time.
MR. CARNEY: I think I've addressed this in detail. Let me get to Brianna.
Q Did the President watch Vice President Biden's address to the NAACP?
MR. CARNEY: I think he was in meetings. He doesn’t have a TV in the Oval.
Q And was it the CBS interview, is that why he couldn't go -- the scheduling conflict?
MR. CARNEY: It hasn’t happened yet.
Q But I mean preparation for it or something -- is that --
MR. CARNEY: That hasn’t happened either.
Q Did that -- somehow did that figure into it? So I mean, what was it? What was the scheduling --
MR. CARNEY: There are meetings all the time. I don't know who he's meeting -- he has the presidential daily briefing; he has -- as much as he would like to, he doesn’t get to watch often me at the podium or -- maybe he wouldn't like that -- or members of his administration, Cabinet members speak. So I can't guarantee you he didn’t watch it because I wasn’t in whatever meeting he was in, but I'm pretty confident he didn’t.
Q And on the tax cuts, the President has said that he would veto an across-the-board extension. Would he veto anything over the $250,000 threshold?
MR. CARNEY: This is the reincarnation of you from yesterday and Bill from today. He does not believe and it is not his position that we should extend tax cuts beyond the 98 percent who fall under the $250,000.
Q He will veto --
MR. CARNEY: He will veto, as I've said and he has said, any extension of the high-end Bush tax cuts.
Q -- across the board.
MR. CARNEY: Again, it is -- there are no proposals for that. Because then we could go, well, what about $251,000? Or $332,000? Or $723,000? His position is -- look, and there's a reason for it, right? I mean, I think that's generous in terms of the definition of middle class, right? It's certainly -- $250,000, it's only --
Q It just makes --
MR. CARNEY: -- hold on -- there's only 2 percent of American earners who make more than that, first of all. That 2 percent accounts for -- in the Bush tax cuts -- nearly a trillion dollars over 10 years, a trillion dollars that we cannot afford as we try to get our fiscal house in order. Two, it is important because sometimes when the questions are asked and this policy is explained, it is important to remember that everybody under this proposal gets a tax cut on their first $250,000 in earnings.
So maybe some TV folks here -- I don't know -- who make more than that, you'll get -- if you make $500,000, you get a tax cut -- (laughter) -- on your first $250,000 of income. It's not that if you're one of the wealthiest Americans you don't get any tax cut.
Q I'm not asking about that.
MR. CARNEY: No, I know, but I wanted to take this opportunity to explain that everyone -- every taxpaying American gets a benefit from this extension.
Q But when he laid down the gauntlet on the across-the-board, and then you won't say veto -- you just say that's his position, you're not saying veto, it's just --
MR. CARNEY: I said veto.
Q Above the $250,000 threshold.
MR. CARNEY: I'm not aware of any proposals -- I can't --
Q Anything between -- somewhere between -- it makes it seem like you're aware that you're asking for something you're not going to get.
MR. CARNEY: Where is there some bill that you were talking about before that's being written perhaps as we speak that has it at $250,000 and 50 cents -- then I said he would veto it if it's over that. He will not support legislation that extends tax cuts for the wealthiest 2 percent. The 2 percent threshold is a $250,000 threshold.
Q Jay, I want to take you to an obscure topic but it's an important one. I'm not sure it's actually been discussed in the briefing room -- Libor. So my question to you is what lessons is the President taking from the trail that the Libor manipulation is leaving us with the CFTC's investigation of this bank and other banks that may be implicated? What lesson is he taking? I know we talked about --
MR. CARNEY: I'm trying to -- London -- I was trying to pass that test this morning. I would refer you and your questions to the Federal Reserve Bank of New York. I have not had this conversation with the President, so I cannot address that. I can tell you that, as I understand it, they issued a statement the other day noting that after they received reports of problems with Libor, they shared suggestions with Libor -- this goes to the New York Fed part of this.
But in terms of the broader implications, I haven't had that conversation with him. But I think, broadly speaking, this President took up the issue of Wall Street reform and is committed to its implementation because it's important that everybody play by the same set of rules and that -- not just because that's how it should be, but because it's important for our economy and it's important for the global economy.
So that's a broad statement about his position on things. I don't want to get too involved in Libor because I know it's under investigation.
Yes, and then Mark.
Q This week you have criticized, and at times, kind of gently mocked Republicans' definition in some cases of small businesses as including some hedge fund managers and lawyers and so forth. Republicans, in turn, criticize the President's plan that his tax cut plan would benefit 97 percent of small businesses. So here's my question --
MR. CARNEY: Let me just be clear -- it's not a claim. It's been established by the Joint Tax Center; it's been well documented by outside -- in fact, we're being kind in our definition of it because I believe the JTC said it was only 2.7 percent. So it's really 97.3 percent of small businesses would fall under the -- even under the definition that the Republicans put forward do not have more than $250,000 in revenue.
So, to your question.
Q Thank you.
MR. CARNEY: It's not just our claim. I mean, we are citing -- I think Ann asked me where did that come from, and we provided that information -- we even put it on the briefing.
Q For a couple decades, under various presidential administrations, the Small Business Administration has been at times criticized by journalists for giving money to companies that are really not small businesses -- they're larger than small businesses. This is an ongoing kind of dispute. What is the President's definition of a small business? Is it based on the number of employees? Is it based on the annual revenue? What is it based -- does he have a definition?
MR. CARNEY: Well, I haven't had a -- I'm not sure that he has his own personal definition. I'm sure that he looks to the SBA and the SBA Administrator for that. But the fact of the matter is, and I think the point that we are making here when we talk about this debate with Republicans who sort of ignore the fact that -- or try to ignore the fact that included in their definition of small businesses are hedge fund managers and law partners and others -- is that 97.3 percent of small businesses benefit from the extension of the tax cut who file in this way -- S corps who file in this way benefit from the extension of the middle-class tax cuts.
It is simply not a viable claim to say that this is going after small businesses -- unless you want to argue that Warren Buffett and other folks, and hedge fund managers are small businesses.
Did you know that by the Republican definition of small business, half of the Forbes 400 wealthiest individuals are small businesses? I don't think that's what most Americans have in mind when they think about -- when they hear politicians talk about -- and politicians of both parties talk about this that small business is the economic engine of economic growth. They think of small businesses that hire a handful of employees -- or perhaps scores of employees -- but they don't think hedge funds, and they don't think of law firms. They think of the kinds of small businesses that they see when they walk through their towns, and maybe the kinds of small businesses that they themselves own.
So this is the debate we're happy to have because we're right.
Q Jay, can I follow?
MR. CARNEY: Yes. Sorry.
Q The SBA's definition of small businesses, depending upon what it's doing, from a manufacturing concern, have 1,500 workers. And the criticism of the impact of the tax cuts is they would impact while only 2-and-change percent of the small businesses, nearly half the small business income -- and that's where the jobs are being created.
MR. CARNEY: But again, that is, again, with a measure of -- do you know why there's a lot of income in that? Because there's hedge fund managers and law partners who are making millions -- right? And again, if you're a small business and you file under the personal income tax code, if you're an S corps, and you make $275,000, you get a tax cut on $250,000. And you benefit from every other tax cuts for small businesses that this President has passed and signed into law. And if you're a small business that's willing to make the investment in hiring a new worker or expanding your wage base, you'll benefit from the tax cut that the President is pushing Congress to pass this week.
Q I think the argument, though, is the tiny small businesses are not hiring. What we don't really want to think of is a small business concern with a thousand workers -- they are.
MR. CARNEY: I'm not sure what the point of your question is. Again, 97.3 percent, 97 percent of small businesses unaffected. By the Republican definition of a small business, the hedge fund managers would get a big tax cut, law partners would get a big tax cut.
Q But also a concern, a manufacturing --
MR. CARNEY: You would have to cite me real examples, instead of hypothetical ones, and perhaps there are. But those businesses would benefit not just from, if they file this way, from a tax cut for the first $250,000, but from every other tax cut that the President has passed into law -- 18 and counting -- and from a tax -- and when you talk about hiring, that's why Congress ought to pass the provision the President supports -- actually initiated -- that would reward small businesses if they hire more.
Q A company with a thousand workers, $250,000 tax cut means nothing to them.
MR. CARNEY: Wendell, you're talking about a hypothetical that I don't even know if it exists. If you want to come to me with -- or come to our economists with an example of a company with a thousand workers that files on personal income tax -- files under the personal income, is an S corps -- because we're talking -- I think you may be confused here with the corporate tax rate here and the individual tax rate.
Q I'm talking about the SBA's definition of a small business, which for --
MR. CARNEY: Wendell, the issue is how do they file their taxes. So we're talking about personal income tax rates. We're talking about extending tax cuts for 98 percent of Americans, individuals, and how they file. The issue -- the canard the Republicans put out there is that a lot of small businesses file as S corps, I believe it's called, and under the individual income tax code, 97 percent of them would not be affected by this.
Mark Landler of The New York Times.
Q Thank you, Jay. You addressed the issue of sequesters earlier, but I wanted to put it in a different context. Tomorrow the President is going to Virginia, a state that's economically dependent on military contracts. What should or will the President say to people in Hampton Roads and that area who don't understand the ins and outs and mysteries of sequesters; all they know is what they're hearing, which is that next year they could face these devastating cuts in military contracts -- what message would the President have for those people?
MR. CARNEY: Well, I think you would make clear that what he supports, what he signed into law, what bipartisan majorities of both parties passed last year, was a legislative commitment by Congress to take action to avoid the sequester. The Secretary of Defense, the President and others have made clear they do not support cuts in defense spending that would be called for in the sequester, as well as the President made clear cuts in non-defense in spending that’s called for in the sequester.
The cuts were -- the across-the-board cuts were objectionable and onerous to both sides for a reason. That’s why Congress has to act. And I think for defense industries and others, that there is -- for everybody who cares about this issue, and everybody should, it’s a reminder of why we need to -- we, the American people, need to remind Congress that it’s important to compromise and take a balanced approach here; that it is not the right policy to balance our -- or get our fiscal house in order and deal with our deficits and debt by asking only senior citizens, only the middle class, only parents with children with disabilities to bear the burden.
And that’s what the bottom line is. I mean, that has been the stoppage, the stalemate, that’s been created by the Republican insistence that there be no revenues as part of a balanced approach. And that’s unsustainable. And in the end, the President believes, we will get that balanced approach because it is what the American people support and it’s the right thing for our economy.
Q Thanks, Jay.
MR. CARNEY: All right. Yes, sorry.
Q Can I ask one --
MR. CARNEY: I thought there might be one.
Q Yes. I mean, the President’s message for the last two or three trips outside of Washington has been, let’s give the middle class some certainty, let’s give them a tax cut. So the certainty in a time of economic uneasiness is a key part of his message. Now he’s going to Virginia and saying, on the one hand, I want to give you certainty, but on the other hand, I can give you no certainty on a key component of your local economy, which is the military contracting business. Doesn’t that sort of complicate his message?
MR. CARNEY: Well, I’m not -- he can’t give -- I mean, here’s the thing. Congress passed a law. The point he’s making with extending the middle-class tax cuts is that here is something, amidst all this stalemate, that Democrats and Republicans all agree we should do, which is extend tax cuts for 98 percent of the American people -- American taxpayers. So amidst -- this is the little diamond in the sand, right, that let’s do that, we all agree on it, let’s do that. And let’s create -- and that does create an important amount of economic certainty not just for the recipients of that tax cut but for the broader economy. It addresses a portion of the so-called fiscal cliff. Let’s do it now. Let’s continue to debate the issues where we -- where there is contention and disagreement.
But it is not the answer to simply say, we didn’t mean it -- we, Congress -- when we signed this into law. We didn’t -- I mean, the point is Congress needs to make some tough choices and deal with our deficit and debt in a balanced way. And if the answer is, well, we don’t really want to do that after all, then that takes away the very purpose of the sequester, which was to force Congress to make some tough calls.
Q But he’s not saying with the same urgency, let’s deal with the sequester issue now, let’s get this settled now before we get to January, that he’s saying the tax cuts, which -- so are you at all worried that --
MR. CARNEY: Well, first of all, you’re saying "this week." I mean, the President has been talking about the urgency to deal with our deficit and debt in a balanced way all year. And last fall -- it is embodied in his several budget proposals, and embodied -- he talked about it in the State of the Union, he talked about it in his budget proposal, he talked about it all spring -- winter and spring. And you’ll continue to hear him talk about it.
It was disappointing that the super committee didn’t get its act together, that Congress didn’t do the right thing. It was disappointing that an unelected person who passes out petitions seems to have more power and authority in Congress with the Republican Party than its leaders. But we need to break that logjam so that that balanced approach is adopted to create the kind of foundation for future economic growth that the President believes we need to do.
Q Jay, week ahead?
MR. CARNEY: Sorry -- it’s Thursday, isn’t it? (Laughter.)
MR. CARNEY: So I don’t have a week ahead. Okay.
12:54 P.M. EDT
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