Office of the Press Secretary
For Immediate Release March 16, 2009
PRESS SECRETARY ROBERT GIBBS
James S. Brady Press Briefing Room
MR. GIBBS: Let me just make one quick announcement before we get started with questions.
Today, Mexico announced its intent to take retaliatory actions against a range of U.S. exports. This is in response to the termination of a cross-border, long-distance trucking demonstration project that allowed a small number of Mexican trucks to enter the United States beyond -- beyond the border commercial zones, and provided reciprocal access to U.S. companies in Mexico. The 2009 omnibus appropriations bill terminated the project. Congress has opposed the project in the past because of concerns about the process that led to the program's establishment and its operation.
The administration recognizes these concerns. The President has tasked the Department of Transportation to work with the U.S. Trade Representative and the Department of State, along with leaders in Congress and Mexican officials, to propose legislation creating a new trucking project that will meet the legitimate concerns of Congress and our NAFTA commitments. Senator Dorgan, the sponsor of the amendment that ended the program, has written to us to express his willingness to work with the administration in good faith to address this issue.
So with that, let me take some questions. Yes, ma'am.
Q A couple on AIG. The President said he wanted Treasury Secretary Geithner to look at a legal way to stop these bonuses, but it seems to be the conclusion of the company and the administration that there really isn't a way to stop the bonuses that are required by contracts. So do you guys have any sense of what you can do? And a broader follow-up.
MR. GIBBS: Well, obviously the President has asked the Secretary of Treasury to go back and reexamine any possible way to ensure that the bonuses that the President described as being outrageous and excessive, to see if there's a way to block those. Obviously Treasury also possesses ways in which it can make the taxpayers whole, based on its commitment in finalizing the $30 billion that was committed to the company I think within the past two weeks, in looking to add provisions to that, that address the excessive retention bonuses that Treasury finds unacceptable.
Q So you don't know of a way yet that you can --
MR. GIBBS: Well, that's what the President has tasked members of the administration with examining.
Q And all this talk yesterday on the shows and then today by the President himself, is -- should this be construed as some sort of public pressure on the company or the bonus recipients to say they wouldn't accept the bonuses, for example?
MR. GIBBS: Well, obviously I think -- I mean, I think you've heard the President now a number of times both addressing excessive compensation for CEOs, having Treasury outline rules going forward as to how to deal with some of that excessive compensation. You've seen the President address the way taxpayer money is spent, TARP money is spent on travel and extravagance related to that. I think that is -- this is certainly part of that.
Obviously, I think the President in his remarks spoke to this, that this isn't just outrageous and doesn't just sort of violate your sense of commonsense, but it offends our values. Certainly, any person that is subject to these bonuses would have -- would have to and should think long and hard about whether, given the performance of the company, this is either warranted or appropriate.
Q That sounds like a yes.
MR. GIBBS: It's a long way of saying that, yes.
Q Robert, a follow-up on AIG, would -- as you're looking at ways to claw back those bonuses, is there a legislative option that the White House might seek? And secondly, I was struck by the fact that the President called out CEO Liddy as being -- as coming after those contracts have been established. Was that a way of voicing support for him? Does the President want to see CEO Liddy stay?
MR. GIBBS: Well, I haven't talked directly to him about CEO Liddy. Obviously, I think it's important to understand that in the course of events, these are contracts that were negotiated, as I understand it, in April of 2008. Obviously, help for AIG came even outside of regulations governing TARP, because this was help that came prior to the legal existence of or creation of TARP.
So look, a lot of people are dealing with situations that they inherited. I think what the President spoke firmly and clearly about is the sense that as, you know, hundreds of millions of Americans are dealing with these tough economic times, that this is just another example of an activity that, as I said, offends our common sense, offends our sense of value, and seems completely misplaced, given what all that we're dealing with.
Q There were two questions --
MR. GIBBS: In terms of the legislation, again, I think the administration has -- the President has asked the administration to look into this. I don't know the answer to a legislative remedy, going backwards. But we can certainly look into that. Again, I -- you know, I think the important thing is the President has asked the Secretary to take steps to look into this and other options.
Q Did you guys first find out about these bonuses last week?
MR. GIBBS: I think that's true, based on what I read in the newspaper.
Q But you gave money to AIG two or three weeks ago. How could you not know that they have these millions, hundreds of millions of dollars --
MR. GIBBS: Well, again, Jake, there's -- according to news reports, there's existing contracts, some of which the President -- of which the President has asked the Secretary to examine, going forward. I think you also heard the President speak today about having a resolution authority that gives the government and taxpayers far more flexibility in dealing with the disposition of AIG in a way that gives taxpayers protection and flexibility; a disposition that we don't currently have, but steps that we would like to see taken in order to deal with AIG as a whole.
Q But why didn't you attach it to the $30 billion you gave a couple weeks ago?
MR. GIBBS: Again, Jake, the --
Q You're looking to retroactively attach it to this new $30 billion.
MR. GIBBS: Well, they're looking through contracts to see what can be done to wrest these bonuses from their recipients.
Q No, I'm sorry, I don't think -- I don't understand, so maybe I'm just not understanding. But President Obama said in early February when he gave the speech on executive compensation, "These kinds of compensation packages in the midst of this economic crisis isn't just bad taste, it's bad strategy, and I will not tolerate it as President. We're going to be demanding some restraint in exchange for federal aid." Since that time, he gave tens of billions of dollars in federal aid to AIG without demanding restraint.
MR. GIBBS: Well, again, Jake, we've got existing relationships, contracts, as I just mentioned, that were negotiated a year ago, assistance that was granted outside of the legal authority prior to the creation of the Troubled Asset Relief Program. The President has asked the administration to go back and look at what remedies are possible to block those bonuses.
Q Well, why didn't he do that before?
MR. GIBBS: Well, again, the excessive compensation rules that you noted -- and I think somebody asked this at the background briefing that we had -- obviously are prospective based on some limitations that we have in looking backwards. The President has asked Secretary Geithner and members of the administration to exhaust all legal remedies in looking backwards to see what steps could be taken to block these bonuses.
Q I know, but since -- and I'm sorry to belabor this point -- but since President Obama gave his speech, you guys gave more money to AIG. Why wasn't it attached to the new money?
MR. GIBBS: Because it's -- again, it's part of the --
Q Part of the old contract.
MR. GIBBS: Right. It's part of --
Q But you're looking now retroactively to see if you can attach something to that old money?
MR. GIBBS: That's what we're looking at.
Q Well, why didn't you do it at the time, if you're looking to retroactively do it?
MR. GIBBS: The administration is taking the steps today to go back and see what can be done, as Jeff said, to call those bonuses back.
Q But, Robert, to follow up on Jake's point, did Secretary Geithner make a mistake by not reviewing these contracts -- they're a year old -- before he cut a new check to AIG? Why didn't he do that?
MR. GIBBS: I would certainly ask the Treasury -- I'll ask the Treasury that. But again, to some degree, there are legal instruments and contracts that predate this administration, that predate the legal founding of the TARP program. The President has asked this administration to exhaust all legal avenues to see what can and should be done going backwards.
Q When the President gave that speech -- on January 29th, I think it is -- about excessive compensation, the next day you came in here and said, "I think you will see the President and his economic team outline a plan to deal with what he found irresponsible yesterday." Where's that plan? Because it's now been about six weeks and you're acknowledging in Jennifer's question there's not really that much you can do legally, it appears. So why in January did the President and you tell the American people we're going to stop --
MR. GIBBS: Okay, let's be fair, Ed. Let's be fair, because --
Q You said you were going to stop --
MR. GIBBS: Hold on, hold on, let me answer your question before you ask another one. I think if you go back and look at the background briefing that we did here -- I'll be happy to provide you the transcript -- it was specifically -- there was a specific question about moving forward on executive compensation. Look, Ed, we deal with things every day that are not of our own making, that we have, for whatever reason, fallen onto our plate and been given the amazing responsibility of dealing with. Some of that are contractual obligations and responsibilities that we found when they gave us the key to the front door.
Our job is to do all that we can to protect the taxpayers going backwards and, as I've said and as the President said and as each economic member -- team member has said, to change the rules of the road going forward. That's why we changed the rules of the road in how money could be spent in an economic recovery package. We changed the rules of the road in addressing home foreclosure crisis by for the very first time giving help to those that had played by the rules.
We will change the rules of the road going forward as it relates to financial regulation to ensure that this type of activity doesn't happen again.
We can't change everything in the past. We will do all that we can -- the President has asked the administration to look and see what possible remedies there are. But we're also focused on ensuring that the actions we take are consistent with changing the way we do business here in Washington.
Q If I could follow up, former Vice President Cheney was on "State of the Union" yesterday -- and a lot of criticism of this White House. To boil it down, on national security, he said the President's policies are making the country less safe. And on the economy, he was charging that the President is taking advantage of the financial crisis to vastly expand the government in all kinds of ways -- health, education, energy. How do you respond to those kinds of allegations from the former Vice President?
MR. GIBBS: Well, I guess Rush Limbaugh was busy -- (laughter) -- so they trotted out the next most popular member of the Republican cabal. (Laughter.)
I would say that the President has made quite clear that keeping the American people safe and secure is the job -- is the most serious job that he has each and every day. I think the President saw over the past seven-plus years the delay in bringing the very people to justice that committed terrorist acts on this soil and on foreign soil; that that delay in seeking swift and certain justice was what he decided to change through his executive order in changing the legal architecture by which these terrorists would finally be brought to justice.
I think the American people will in this administration see those actors brought to the swift and certain justice that was not brought to them in the previous administration.
Q On the economy, you're trying to take advantage of this crisis?
MR. GIBBS: I think there are -- I think not taking economic advice from Dick Cheney would be maybe the best possible outcome of yesterday's interview.
Q And has the President read the Red Cross report on terrorism, and does his ban on torture -- I mean, on torture -- does his ban on torture apply also to Bagram and Abu Ghraib and anything outside of Guantanamo?
MR. GIBBS: I will -- I should ask those guys specifically about your second question. I have not talked to him about the Red Cross report. Obviously, Helen, as you know, the President -- as I just said to Ed, the President took steps, the very earliest of his administration, to examine and change the rules regarding detainees in this administration and to ban torture. And I think he's seen what that -- the extent that that policy affected our standing in the world, and took strong action to change it.
Q Yesterday, Director Summers seemed to suggest that there wasn't much you could do about the AIG bonuses, and said we don't abrogate contracts willy-nilly, and just -- and that was it, and then moved on. And then today, you have this request from the President --
MR. GIBBS: Well, now, let's be fair to -- let's be fair to --
Q Well, it sounds like a pretty big change.
MR. GIBBS: Well, let's be fair to -- I know this was on a different network, but let's be --
Q No, it was on ours, actually.
MR. GIBBS: Well, maybe he was better on the other network. (Laughter.)
Q No, no.
MR. GIBBS: You know, but let's be -- let's be fair in -- let's be fair and let's be fair in the global sense of what Director Summers said, and that was that he said that in witnessing -- and I think this was followed up largely by what Chairman Bernanke said on a fine program on CBS last evening -- (laughter) -- that in 18 months of what had happened over the course of the last 18 months economically, that some of the most outrageous -- the most outrageous thing happened as a course of AIG, and he found that the bonuses that were reported in papers yesterday to be outrageous.
So certainly ask me your question, but I just -- let's be -- let's be fair to what Dr. Summers said in categorizing these bonuses, not simply saying something and moving on.
Q Well, he certainly -- he certainly said they were outrageous, but I think he pretty -- made pretty clear that there wasn't much that could be done about it.
MR. GIBBS: Well, that's --
Q Now things seem to have changed. What changed between then and now, with the President now coming out and saying that we really need to look --
MR. GIBBS: The President asked -- specifically asked his economic team to go back again and determine whether there was any legal avenue with which to block these bonuses, that there was anything possible that could be done to change what had happened.
Q And could I ask you, when you referred to the former Vice President, that was a really hard-hitting, kind of a sarcastic response you had. This is a former Vice President of the United States. Is that -- is that the attitude? Is that the sanctioned tone for the former Vice President of the United States, from this White House?
MR. GIBBS: Sometimes I ask for forgiveness rather than for permission, Chip. But no, I hope my sarcasm didn't mask the seriousness of the answer with which I addressed to Ed -- that for seven-plus years the very perpetrators that the Vice President says he's concerned about weren't brought to justice.
The President, on the very first week of his administration, chose to change that, to take these that had committed terrorist acts and to finally bring about the -- instituting a process to bring about swift and certain justice, not something that was done under the previous tenure, but something that this President believes will happen under his watch.
Q Robert, first thing, to just follow up on Chip's first question, which is, we're now at about 36 hours since the public found out about the -- about these AIG bonuses. You know how this town works. If nobody has an idea yet, there's not even a bill in Congress that somebody has come up, isn't it likely that you guys will probably run through all the legal --
MR. GIBBS: Well, let -- I don't --
Q -- if there's nothing to be -- that at this point, it's looking less likely you can do anything legal
MR. GIBBS: I'm not a contract lawyer. I don't know the specific answer to that question, but that's what the President has asked appropriately educated contract lawyers to do.
Q Now on a bigger picture, how do you hold -- how do you keep the public's trust on this issue? You talked about changing the rules of the road -- you said it a number of times in these questions -- when some of the people that wrote some of these rules or advocated for some of these rules changes at AIG -- for instance, Dr. Summers, who was then Secretary Summers, was on Capitol Hill in 2000, calling for this new derivatives market, which is one of the things that helped weigh down AIG; that the people involved -- that this idea that you have the CEO of Goldman Sachs being invited by Secretary Geithner to help out, trying to figure out the AIG -- but it's this perception that it's -- all of Washington and Wall Street are in this together, trying to figure this out. I mean, do you worry about this credibility problem?
MR. GIBBS: I think I would disagree largely with the premise of your question, and I don't think it would be fair to members of a previous administration, like Dr. Summers, to tell you that he permitted a hedge fund to be --
Q Not that he, personally, permitted, but he was --
MR. GIBBS: Well, but -- well, hold --
Q -- he was an advocate for the law change, which a lot of companies took advantage of, including AIG.
MR. GIBBS: Right, but I'd -- look, whether or not anybody in their wildest dreams could have imagined a hedge fund attached to the top of a giant life insurance or insurance company, making a series -- a series of completely bad decisions -- whether anybody could have imagined that, I don't know the answer to.
I do know the answer going forward is that everybody works for the President of the United States, who is committed to ensuring that those rules do change. We are moving forward on a much stronger financial regulatory reform to ensure that many of the things that you've seen over the past many months don't happen again. Obviously, that's important not just for this country but to give confidence throughout the world; that will be a big topic, going forward, in G20.
I do think the President shares the public's outrage on this. That's why he's taken steps to change the way we compensate executives. That's why he instituted -- has instituted transparency. I think part of the reason --
Q Is there going to be a change in the -- I mean, look at the campaign donation issue, where you have Goldman and AIG and -- I mean, even Senator Obama received money from AIG, and it's -- I mean, is that part of this perception you guys have to get rid of, too, is just how easily Wall Street sort of --
MR. GIBBS: No, again, I reject the criticism that -- how many times have I been asked in this room about how we were doing things that were so antithetical to Wall Street so as to see these precipitous point declines, and what were we doing about it, you know? I mean, you know, I hate to bring them back into this, but -- it wasn't you, but somebody representing your network asked me about the criticisms of Jim Cramer bringing down the market, you know, and in 10 days' time we're -- you know, we're bound inextricably together.
I mean, you know, I think there's -- I don't think anybody that either watched the campaign or has watched the first nearly eight weeks of this administration would believe that the actions that the President of the United States has taken have been one and the same in what Wall Street (inaudible). And I can assure you and the American people that the steps he'll take in regulatory reform and in the steps he will take to stabilize the banks may or may not be all of what investors like.
Just today, the head of Wells Fargo described our bank health assessment with a word that I'd rather not repeat even for cable. (Laughter.) Right? So maybe if this is broadcast on FX at some point, we can get into it. (Laughter.)
But I think it's -- I think it's more than a bit of a stretch to compare what we've done as being inextricably --
Q -- it's this whole soup of Washington and Wall Street and what Joe Smith in Kansas City sees.
MR. GIBBS: Well, I -- here's what -- let me reassure Joe that this President has taken strong steps to ensure that the way we compensate executives won't be the same as when we came in the front door; that the way we regulate our financial markets won't be the same as when we came in the front door; and that we will change, as we committed to in the campaign, the way Washington does business. That I can assure Joe and hundreds of millions of other Americans.
Q Just to -- just to be clear on what you guys are saying in terms of your approach to AIG now, are you saying that you'll hold back the $30 billion if they don't agree to give the bonuses back?
MR. GIBBS: No, I think that -- what I'm saying is, those terms are being finalized; that Treasury has instruments that can address the excessive retention bonuses, and add provisions to ensure that taxpayers are made whole.
Q But --
MR. GIBBS: And again, I don't want to get ahead of that finalization.
Q But I just want to be clear, is that you're saying that this -- this $30 billion is on the line, that if this --
MR. GIBBS: Well, I --
Q -- were you not able to reach agreement --
MR. GIBBS: I think that --
Q -- you will not give them that money?
MR. GIBBS: No, I don't want to -- I want to talk about the notion that rules governing that transaction can be finalized in a way as to protect the taxpayers.
Q But I don't understand what that means, "that rules can be finalized in a way" -- I mean, is that -- are you saying that you'll impose these rules --
MR. GIBBS: I would use terms that -- there's a $30-billion loan facility; a loan that, as I understand it, hasn't been drawn down on -- right? So since the rules to drawing down on that have been finalized, taxpayer protections in order to make people whole can be added.
Q So are you saying that the administration will add those protections and --
MR. GIBBS: I -- yes. I think I was -- I want to be as clear as I can be in what I just said.
Q Robert, are you saying that the President is worried that the number of Americans who support the bailout program will diminish further because of these bonuses that came to light over the weekend?
MR. GIBBS: Well, I think the President shares the concerns of millions of Americans that have woken up time after time to hear news like what they heard yesterday. He shared that concern -- that concern didn't start yesterday, it started a long time ago. It started when this President believed that our economy was getting off its track and that steps had not been taken to regulate the financial industry in a way that would have prevented what we see happening now from happening.
Look, I think it shakes the confidence in any institution to see what's happened. I don't -- let's not limit it to the steps that one has to take to stabilize the banks. I think there's -- I think when people wake up and see news that is -- that offends their sense of common sense -- like this does -- that it affects their confidence not only in governmental institutions, but it affects their confidence in business as well. I don't think anybody is immune to that.
Q Why shouldn't taxpayers feel like they're being taken for suckers?
MR. GIBBS: Because this President is -- has asked that we look at ways to ensure that taxpayers will be protected and has instituted tough rules to ensure that the steps we take to stabilize our economy and our financial system are done not to protect Wall Street, but to protect Main Street.
That why I think you saw the President here today talking about a small business lending program that is designed to help small businesses and community banks with an infusion of capital to be lent so that hundreds and hundreds of small businesses that are creating jobs in this country don't fall victim to a lack of credit, don't fall victim to an economic slowdown, and are able to get the financial lifeblood that they need to keep their business up and running.
The President and his team work each and every day to see what can be done to stabilize that financial system, to create jobs and to change the rules of the road going forward.
Q Robert, two quick questions. On AIG, would it be fair to assess the President's use of the bully pulpit going forward to affect public policy on something over which he may have no other recourse?
MR. GIBBS: Well, I think the simple existence of using the bully pulpit in moving and -- in moving and in shaping public opinion shows that he does have some recourse, that he does have the ability. Again, just last week we -- I got a question about why nobody was traveling to Nevada because of what the President had said. I think what the President can do is use the bully pulpit to ensure that as taxpayers are taking extraordinary steps to stabilize our financial system, that they can be reasonably assured and confident that the steps that government is taking are done not at the behest of those on Wall Street, but instead to protect those on Main Street.
Q And with the prospect of a trade war with Mexico, what is the President's sense of urgency in getting some legislation moving on this --
MR. GIBBS: Well, again --
Q -- considering what's already on everybody's plate?
MR. GIBBS: I think we understand -- and I've certainly said it, and the President said it to President Calderón when they met earlier in January -- that we see Mexico as a valuable trading partner. Obviously exports create jobs here in this country and we don't want to find ourselves, in a time of economic slowdown, creating or erecting a barrier to that valuable trading partnership.
So the President, through the Secretary of Transportation, the Trade Rep, and the Secretary of State, believes this is an important priority. And without having a specific timetable, and acknowledging that we have a lot on our plate, obviously this would be one of the most important things.
Q Robert, I want to go over something you said a few minutes ago. Roughly, you said, whether anyone in their wildest dreams could have imagined the complex transactions that AIG got involved in, you weren't sure. Is that a statement about AIG, specifically, or the larger securitization of mortgages and things that grew out of the bank reforms of 1999? And is that in some way absolving regulators --
MR. GIBBS: No, I don't -- well, I think it goes to both, and I don't think it absolves regulators at all. And if anybody took that to mean I was absolving those that are supposed to referee the transactions of this economy, that shouldn't be the case.
Q Does it speak to the complexity of the transactions themselves and how --
MR. GIBBS: Well, there's no doubt that they're complex. But I think -- I don't think complexity should give license for irresponsibility or untold greed. That's why the President believes that we have to take critical steps to re-regulate the way our financial system is viewed; that in a 21st-century global economy, we certainly don't have a 21st-century regulatory framework. That's what -- that's part of the main docket at the G20 in London in a few weeks, that's what the President has talked about since September of 2007 -- that we have to take strong steps to change the way people do business in order to ensure that we don't find ourselves having the discussions about these companies, and bailing them out as we are right now.
Q So just so I understand, the point was Dr. Summers and those involved in that legislation may not have been able to see the complexities of that transaction, but regulators should have. Is that fair?
MR. GIBBS: Well, no, no. I was pushing back a little bit of -- on what I believe Chuck was trying to do in basically attaching Dr. Summers as being the culprit in AIG.
Q That isn't what I was --
Q But many thought --
MR. GIBBS: It was sort of what you were doing. (Laughter.)
Q I can read directly from his congressional testimony.
MR. GIBBS: I bet you can. And I -- which seems to me to go back to the point that I was just trying to make that you pushed back on.
Q But the point was the fact that everybody --
Q But, Robert, many at the time, including Dr. Summers, thought that that legislation was a good idea -- to update Glass-Steagall. And what I'm saying is, if they thought it was a good idea, are you saying that's fine, but regulators should have been smarter than the lawmakers --
MR. GIBBS: No, I think the President spoke --
Q -- and the administration officials who put in motion at the time.
MR. GIBBS: I think the President spoke clearly about what he saw as a bad turn -- lessening those regulations have cost our economy. I think he spoke clearly to that in the campaign. I think even before getting into a discussion about that, again, in September of 2007 on Wall Street, the President outlined deficiencies.
I don't think the President would absolve -- would absolve anybody. It's his job, though, as we move forward, to institute that regulatory framework that allows our economy to function in a way that gives confidence not just to people on Wall Street but to people on Main Street that transactions can happen in a reasonable and responsible manner.
That's what the President will look to do, and that's the priority in heading -- one of the priorities heading into London, and certainly one of the President's priorities this year, in understanding that to address the totality of our financial challenges, we have to address not just recovery and jobs, not just home foreclosures, not just financial stability in the banking system, but also those rules of the road, going forward.
Q Back to the Vice President's interview, why do you believe he chose this moment to give such an extensive and pointed interview? And what does the White House think this says about the Republican Party, that Rush Limbaugh and the former Vice President, who seem to be taking the highest profile positions in making the counter-arguments of the Obama administration policies?
MR. GIBBS: You know, I can't speak to the motivations of why the Vice President availed himself to a Sunday morning interview. That's I think something better left for -- for him and his handlers.
I think the steps that the President has taken to keep this country safe underscore the seriousness with which he takes that job; the seriousness with which he takes protecting our values; and the seriousness with which he takes in protecting our men and women in uniform; and in also projecting an image in the world that allows us to work with other nations.
I think as we move forward both in the G20, NATO, the Summit of the Americas, obviously we see challenges throughout the world that are going to require not just the opinions of one country and one administration, but the world acting and working together to address these global problems.
Q I'd like to go back to AIG again because I'm having trouble understanding -- just figuring out how, given that the administration concluded already that these contracts are legally binding, are we now saying that that was a bad legal assessment and we actually can do something?
MR. GIBBS: I think the President has asked them to redouble any efforts that have been made to ensure that all legal avenues are examined in order to take a look at these bonuses.
Q So he thinks there's still another legal avenue that --
MR. GIBBS: I think he's asked them to come back with an assessment as to whether that's the case.
Q Robert, Christina Romer yesterday on the Sunday shows said that the fundamentals of the U.S. economy are sound. Last Friday, the President himself spoke about sound fundamentals in the economy. Yet when John McCain said that on the campaign trail last fall, he was "out of touch" and was portrayed that way by then-Senator Obama.
MR. GIBBS: Well, I think that --
Q What's the difference? Are the fundamentals so much sounder now?
MR. GIBBS: Well, if I remember -- if I remember correctly what then-candidate McCain said, he said that the fundamentals of our economy were strong. I would tell you that I think that the United States -- nobody exceeds the United States in our production capacity, in our entrepreneurial capacity, in our capacity to innovate, in our research universities, in the depth and the breadth of our capital markets.
But as the President addressed in the debates later that fall, he said that the strength of our fundamentals should be measured as to whether the middle class is getting a fair shake -- are we taking steps to create jobs; are we taking steps to prevent home foreclosures; are we taking steps to put money back in people's pockets who most deserve it, rather than to continue tax cuts that reward those that have done just fine over eight years.
Remember the backdrop of this entire debate was: action versus inaction. There was a great debate about the exact financial regulatory structure that we have discussed throughout today's briefing. The question was, were we going to move forward in a plan that would create jobs, a plan that would stem home foreclosures, a plan that would reward the middle class with tax cuts, and a plan that would re-regulate our financial industry -- or were we not?
I think that debate is largely over. I think that campaign was won by a particular side. And the President, as he said, has taken steps to ensure that each of the pillars of our economy that need to be in place in order to strengthen and turn it around, he's working on putting those in place just this year.
Q You're saying the difference is between the use of the word "sound" versus the use of the word "strong" -- is that what you're saying?
MR. GIBBS: I'd certainly think that's one of them, yes. Do I think there's a definitional difference between "sound" and "strong"? Absolutely.
Q Okay. And the fundamentals are now not strong, still, -- they're sound?
MR. GIBBS: I think the fundamentals, as Ms. Romer said, are sound; that the President is taking steps each and every day to strengthen those fundamentals, to ensure that the pillars that we need to turn our economy around to create the jobs the President talked about, to give the middle class finally a fair shake, and to put ourselves on a path towards sustained economic growth, is exactly what the President is focused on each and every day.
Q Using that phrase does not make the people now sound as out of touch as John McCain may have sounded, with a slightly different -- with a different word.
MR. GIBBS: I don't think so.
Q Back to AIG, here's what I -- I guess I would hope you could help me out with. The President -- I always like to believe by the White House that Secretary Geithner had really given it his best shot in trying to renegotiate terms with Chairman Liddy and had to -- he had won concessions --
MR. GIBBS: Right.
Q -- from him, and that they had gone through legal counsel to see what legal options were there, and they had done this already.
So what would this re-examination turn up that did not do already just a few days ago? And why (inaudible) to incorporate this thought? The thought I got back from the White House yesterday was that these are contracts, and contracts are -- can't be broken, yet you're encouraging people to renegotiate mortgages, the auto workers have to renegotiate in connection with the auto bailout.
MR. GIBBS: Right. Well, your first question -- the President has asked that -- and that he be assured again that all steps will be taken to look into what remedies on behalf of the taxpayers are available to him. That's what the President has asked the Secretary to do. I think you appropriately point out that the Secretary made progress in dialing back the full function of what AIG had planned to do. And again, that's exactly the nature with which the President has asked --
Q Do you think there were some remedies that maybe --
MR. GIBBS: Well, that's --
Q -- Geithner didn't think of or the crew didn't think of, but now they're all --
MR. GIBBS: I can assure you the President has asked him to ensure that that's the case.
Q And just a point of clarification, do you want the money back eventually, to get it just back to make the taxpayers whole from the company? Or do you in a sense want to make sure that these retention bonuses, the workers who got them, have to give it back? Or do you just want the company to give it back?
MR. GIBBS: Well, I'm not sure, based on the fungibility of money what -- what entirely would be the difference. I think what -- taxpayers have to be reasonably assured that -- that their money that's given for the use in banking and financial stabilization is done so in a way that gives them transparency and confidence.
Q Well, so you probably can't get it from the individual --
MR. GIBBS: Well, we'll -- that's exactly what the President has --
Q And I just need a comment on the equity issues dealing with give-backs from auto workers and renegotiating mortgages and this situation?
MR. GIBBS: I can certainly look into the auto thing. In terms of -- I guess with home foreclosures, do you mean --
Q The idea that people are being asked to renegotiate contracts all the time, yet in AIG the explanation was that these are contracts and they can't -- must be honored.
MR. GIBBS: Right, but what, specifically, in home foreclosure -- obviously refinancing takes place with --
Q I won't belabor the point --
MR. GIBBS: -- two agreed upon lending parties, though.
Q Oh, that's renegotiation -- that's all.
MR. GIBBS: Right, but I think it's been reasonably assumed in this case that there are -- there's not a willing -- they're not -- there's not a reciprocal willing party.
Q Can you tell us about the President's plan to visit an electric vehicle plant later on this week in California? Could you give us a little bit more detail on that?
MR. GIBBS: I don't have a ton with me, but the President, I think it is Thursday morning in California, is going to tour a facility that focuses on batteries. Obviously there's -- there are incentives in the stimulus to spur this type of research. And obviously as we imagine an auto industry for the future -- and I know the auto industry has put a lot of research and funding into the development of cars that can go 40 miles an hour on one charge of a battery.
The President hopes to focus and highlight the ability for clean energy jobs to spur economic growth and job creation as we move forward.
Q Robert, the President sent two Cabinet Secretaries down to New Orleans to survey damage about a week and a half ago. While they were there, they said they were disturbed and even angry at the amount of red tape that they saw and a lot of backlog with FEMA and other issues. How did the President receive that report, and what is his next step with the Gulf Coast?
MR. GIBBS: Let me -- let me check with our DHS Secretary and our Housing Secretary to see what they've come through with and to what degree they've come up with formulations for the President.
Q But he heard them say they were disturbed and angry that day.
MR. GIBBS: Well, I think it's safe to say that the President didn't need to send two Cabinet Secretaries down to New Orleans to be disturbed and angry at the fact that there are, years after a hurricane struck, much progress to be made, people still living in trailers. And that's even before you get to the response of how the hurricane was dealt with and the ups and downs that we've gone through just in dealing with the temporary assisted housing as it relates to Hurricane Katrina. I'll follow up specifically with those two Secretaries.
Q Thank you.
MR. GIBBS: Thank you.
3:43 P.M. EDT