The White House
Office of the Press Secretary
Gaggle by Deputy Press Secretary Eric Schultz, 07/24/14
Los Angeles, California
10:33 A.M. PDT
MR. SCHULTZ: Thank you all for joining us. I'll just have a brief announcement at the top that the President later today will deliver remarks at the Los Angeles Trade Technical College, where he will again call for our nation to rally around economic patriotism that says rather than protecting wasteful tax loopholes for a few at the top we should be investing in things like education and job training that grow the economy for everybody.
Specifically, the President will highlight the need to close one of the country’s most unfair tax loopholes that allows companies to avoid paying taxes here at home and will call on Congress to close it immediately.
With that, I will take your questions.
Q Eric, can you settle the question of what the President did last night at the hotel?
MR. SCHULTZ: Sure. As I mentioned yesterday, the President had a full day of events. You were with him at each of them. In fact, you filed 17 pool reports tracking each one of his movements. (Laughter.) Last night, the President didn’t have any public events or leave the hotel. If he had you would have been with him.
Q Was he meeting with anyone for dinner?
MR. SCHULTZ: Again, he didn’t leave the hotel. And if he would, you would have been with him. And he didn’t have any public events.
Q The Speaker’s office put out a bit of prebuttal to the President’s speech today. They say that these companies aren't taking advantage of a tax loophole to move overseas. They say it's not a loophole, but they’re doing this because of the high tax rate. What’s your response?
MR. SCHULTZ: To quote Josh Earnest, I don't think that claim withstands scrutiny. Right now, a few big corporations are shifting their residence for tax purposes outside the country to get out of paying taxes even though they keep their headquarters and most of their business inside the United States. These transactions are known as inversions. And the President today will call on Congress to take action to close this specific loophole immediately.
Q Democrats are divided over whether to take action on inversions. On Capitol Hill, we have reports saying that today. What is the White House going to do to convince members of their own party to take action? How likely do you all think legislation is?
MR. SCHULTZ: Sure, I'd say a few things. One, we support congressional proposals that have been proposed recently that would make the effective date for action retroactive to early May 2014, given the significant upsurge in activity in this area to date.
As you know, Senators Wyden and Levin and Congressman Levin and Van Hollen have supported legislation to address this abuse of our tax system and make it retroactive. The President today will call on Republicans in Congress to do what they did 10 years ago when the Republican-led Congress cracked down on corporations moving to offshore tax havens like the Cayman Islands and do it again. I'll note that that happened in 2004 and signed into law by a Republican President.
Q Will the President accept campaign contributions from companies or executives, companies that practice corporate inversions or complete those kinds of mergers?
MR. SCHULTZ: Again, the President today is calling on Congress to close this tax loophole.
Q Does he believe that there’s any realistic chance of it happening, given the track record with Congress? Or is this another thing that the President proposes and doesn't actually happen?
MR. SCHULTZ: Isaac, you’re so cynical. (Laughter.) I understand the basis for the cynicism, but we do believe that this, again, is an issue that has garnered bipartisan support in the past and we don't understand why it wouldn’t again this time.
Q Eric, apropos having a basis for cynicism, the reason we were pressing you yesterday and today about the President’s plans last night is because the last time we did this, he had dinner with Jeffrey Katzenberg. Is there a reason you can't just tell us what he did in his hotel, even though it wasn’t a pool movement that we were involved in?
MR. SCHULTZ: Again, I understand the interest here. Our obligation to you is to let you know when there is a public movement or even a private meeting you are often -- you often join us for. There was no public events, and he stayed in the hotel after a long busy day last night.
Q -- economic patriotism, is he suggesting that the CEOs that do these transactions are unpatriotic?
MR. SCHULTZ: We believe that this is a loophole -- let me back up. The middle class in this country, the President believes, is the engine for economic growth. And we believe that we should be supporting businesses and working people who contribute to that cause here at home. That's why when companies are using loopholes to take advantage and reduce the tax base, we believe that should be something addressed; that should be something addressed immediately; that has garnered bipartisan support in the past from Democrats and Republicans, signed into law under a Republican President. We don't see any reason why that can't happen again.
Q Does he agree with Senator Reid’s characterization that these are corporate citizenship scams?
MR. SCHULTZ: I have not spoken with the President about Senator Reid’s statements on this. But I do think the President has made clear these companies are essentially renouncing their American citizenship by shipping their profits overseas to avoid paying taxes, even as they benefit from all the advantage of being here in America. That's precisely what we mean by economic patriotism.
Q Do you have any more on the meeting tomorrow with Central American leaders? Is there anything you can tell us about what precisely the President is going to ask of them, and any development that might come out of that?
MR. SCHULTZ: I don’t have a readout of a future meeting yet, so as soon as we have more guidance on that, I will get that to you.
Q Eric, I just wanted to know about the White House’s developing guidelines on corporate drones -- on privacy rights on drones -- can you talk a little bit about that?
MR. SCHULTZ: I have seen that story, but, unfortunately, I don’t have any comment right now for you. What we have said on this issue in the past is that the interagency continues to develop and review policies concerning the domestic use of unmanned aircraft systems, and that remains that case.
Q Just a quick sanctions question. The EU is coming out with a sanctions list. Is the U.S. going to add to that? And what’s your take on the EU sanctions? Are they sufficiently severe?
MR. SCHULTZ: Thank you, Lisa. We welcome reports that the EU is likely adding additional names to its sanctions list today, but I don’t have any details for you at this moment. We also understand they’re continuing discussions to impose further, more significant measures. I know those preparations continue for more robust measures. We anticipate some of their names will overlap with those already sanctioned -- that we have already sanctioned, and we will look closely at that list when it comes out.
Q Eric, can we go back to economic patriotism for a second? Are companies that are not doing what the President wants here and people who are not supporting that legislation not economically patriotic?
MR. SCHULTZ: I appreciate the question, Isaac. I would just again reiterate that when companies are renouncing their American citizenship by shipping their profits overseas to avoid paying taxes even as they benefit from all the advantages of being here in America that raises significant questions. And that’s something that can be addressed very quickly by Congress, as they did in 2004, again signed into law by a Republican President.
Q Can you tell us what the administration is doing to make sure that the supplemental gets passed? It sounds like some Republicans are saying the White House is not actually actively pursuing or working to get that passed. And it sounds like it’s not going to happen before the recess.
MR. SCHULTZ: I’m not going to prognosticate, but I will tell you I take issue with the characterization that the White House isn’t working aggressively on this. We sent a letter a few weeks ago outlining our request. We’ve heard a lot of concerns expressed by Republicans in Congress. We hope that those concerns are backed up by action, because we need to surge resources to the border in order to address the problem.
Q And if it doesn’t happen by the recess, will you guys transfer funds to cover the period until Congress returns to provide more resources?
MR. SCHULTZ: Again, our belief is that Congress must act.
10:42 A.M. PDT