Aboard Air Force One
En Route Poughkeepsie, New York

11:21 A.M. EDT

MS. JEAN-PIERRE: Okay. As you all are — all are aware, we are en route to Poughkeepsie, New York, where President Biden will visit an IBM site to meet with workers, tour the site, and give remarks. During the President’s visit, the company will announce a $20 billion investment over the next decade in R&D into design and manufacturing of semiconductors, mainframe technology, artificial intelligence, and the quantum computing across the Hudson Valley. These investments will create good-paying manufacturing jobs here in the United States.

The President will be joined by — on today’s tour — by New York Governor Kathy Hochul, as well as Congressmen Sean Patrick Maloney, Paul Tonko, and Pat Ryan. He’ll be joined by the Intel CEO, Arvind Krisha [sic] — Krishna.

And today, we’ll have Brian Deese, who’s standing right next to me, Director of the National Economic Council, joining us to talk through our domestic manufacturing boom, our strong labor market, and to answer any of your questions on economic developments.

But before I turn over to Brian, I have one thing that I wanted to say and share with you, which I think is very exciting.

This Saturday and Sunday, the White House will continue its annual tradition of welcoming the public for fall garden tours. I know you guys have been waiting for this moment. This year will be the first time the White House has been able to host fall garden tours since the pandemic started. In April 2022, the White House hosted spring garden tours, marking the first opening of the White House gardens to the public during the Biden-Harris administration.

This year, the President and the First Lady would like to especially thank and honor White House grounds superintendent Dale Haney. If you ever met him, he is a wonderful human being. And — but he — we want to thank him for his continued service and 50 years of contributions to the beauty and abundance of the White House gardens and grounds. Dale Haney has seen the grounds through a half century of growth and improvement, overseeing the care of 500 trees, 5,000 shrubs, thousands of annual flowers, and a productive kitchen garden and acres of lawns.

Dale began work in 1972 as a gardener during the presidency of Richard Nixon and has now served 10 presidents, supervising the work of the National Park Service’s full-time staff of gardeners, maintenance workers, electricians, and plumbers. We thank Dale for his many years of service.

And now I will turn it over to Brian. All yours, Brian.

MR. DEESE: Great, thank you all. So, we’re going to spend the bulk of our time at IBM and — in the tour and otherwise — seeing what the company is planning with respect to expansion of its quantum computing capability and its mainframe production capability.

But I just wanted to spend a minute on connecting this back and connecting the dots to our broader economic policy. You guys have heard me talk about the President’s economic strategy in the context of an American industrial strategy. And if you think about the piece of legislation that we’ve now enacted, what you’re seeing is a historic effort to lay the foundation with public investment for a unprecedented level of private investment in areas of significant economic — where there is significant opportunity for increases in economic productivity and also where we have an acute economic and national security need. And those things all come together here at IBM.

The principal — one of the principal reasons why IBM is now making this expansion is because of the CHIPS and Science Act. They’re not producing chips, but to have a long-term investment strategy in quantum computing capabilities, you need to have a reliable supply of leading-edge chips. And that’s what we will now have in the United States as a result of this. And the IBM CEO will talk about that more today.

It’s a historic place. I believe President Eisenhower inaugurated this — this facility back in the — in the 1950s.

In addition today, there is a significant announcement of an — of a battery manufacturing facility in Michigan — which we will not be hopping over to Michigan today. But $1.6 billion from a company called Our Next Energy, or “ONE,” to produce large-capacity batteries in the United States.

I draw this connection because, in order to do that in the United States, you need a steady supply of computer chips to build these advanced batteries, and you also need the long-term incentives in the Inflation Reduction Act. All of this comes together as part of a — an industrial strategy which is really helping to drive a renaissance in American manufacturing and domestic investment in these type of capabilities that we haven’t seen in generations.

And so we have a clear focus on a set of near-term economic challenges that we’re working through, and I assume you guys will all ask me questions about in just a moment.

But we’re also focused on a long-term economic strategy to build this economy back on firmer foundations with more resilient supply chains, more domestic industrial capability.

And today’s announcements across the country and the tour we will take today I think is good evidence of that.

So with that, I will turn it back to our friends.

MS. JEAN-PIERRE: Go ahead, Aamer. Why don’t you kick us off.

Q Yeah, okay. The near term with OPEC, can you talk a little bit about what you see as being, sort of at the 30,000-foot-level, potential dangers to the U.S. and world economy because of these OPEC cuts?

And the President, as he was departing, says there’s alternatives. What are the alternatives that are being weighed right now?

MR. DEESE: Sure. So, the President’s approach, our approach, and our strategy since the — since Putin began amassing troops and then — and invaded Ukraine has been on trying to maintain sufficient supply of energy, oil, and natural gas globally to maintain — to keep prices at a stable and lower level, while also training all of the appropriate pain on Russia and on Putin that is necessary.

That has been and continues to be our strategy. As we’ve said, the OPEC decision — the reason why we were disappointed in it is we believe it’s unnecessary and unwarranted at a period where if you look at the global energy picture and the oil picture, the lack of supply continues to be a significant challenge.

We’re going to have to see the actual impact of this. And I think it’s — I wouldn’t, you know — I wouldn’t fully speculate. As you all know, the difference between the headline of what the OPEC members announced yesterday with respect to their quotas and the actual impact on production is something that we’ll have to see in the market. And certainly the impact on production will be significantly lower than that headline that they announced.

But to your question about alternatives: We identified some of these, and we’ll continue to focus on them, right? If you look at the U.S. — where we are in the U.S. right now, the wholesale price for gasoline — refined gasoline — is about, on average across the country, about $1.20 lower than the retail price that consumers are paying. Historically, that gap has been about 90 cents.

So in the very near term, what we believe needs to happen, consistent with market principles, is that the energy — energy companies need to reduce retail prices to reflect the price that they’re paying for the wholesale gas. And the reason why wholesale gas prices continue to be at that level is because of all of the progress that we’ve made.

And, you know, they were — you know, oil and gas prices are moving around, but they are significantly lower now than they were a couple of months ago. So that’s the first thing.

And the other measures are things that are on the table and we continue to look at. The Strategic Petroleum Reserve is — is one of those.

So, you know, I — we’re not announcing any steps on that front, but there are measures that we will continue to assess as we — you know, as we go forward.

Q I have a quick question. Just in terms of the decision yesterday from OPEC, does the administration think that Saudi Arabia still deserves U.S. weaponry and defense support? I mean, the question is, really: Why should U.S. taxpayers subsidize Saudi security, you know, when they’re not willing to subsidize U.S. gasoline prices?

MR. DEESE: Yeah, so I have — totally understand the question. I have no announcements about any of that today. And would say that, as we mentioned yesterday, we will be assessing and consulting closely with Congress around a range of issues on the back end of this.

And beyond that, I don’t want to get ahead of, you know, potential announcements by the administration.

Q Brian, can I ask you to just kind of talk through your guys’ thinking on some of this stuff? So, NOPEC legislation is out there. You have previously expressed concerns about it, but has the opinion changed on it?

Export controls — is that something that, you know, there are big pluses and minuses to it? Is it something under active discussion at this point? SPR, there’s not a ton left that isn’t kind of accounted for. Do you think that you can ma- — can hit and make an impact with an unan- — so far unannounced SPR?

Can you just kind of walk through where your guys’ thinking is on each of these topics and what is closer to or more likely, or what you’re leaning into? Because otherwise, it seems — I mean, you have been finger-wagging it at oil companies for a year now — about the gap between retail and wholesale — and it hasn’t seemed to make a difference. So it seems like if you really want to address this problem, one of these other things is going to have to be an order, right?

MR. DEESE: Yeah, so I’d start by pretty — by respectfully but strongly rebutting the last point, which is, we have been actually looking at a set of tools and deploying tools. And over the course of the last cou- — set of months, you’ve seen that have very clear and tangible impact.

So, you know, you don’t have to take my word for it. If you look at most serious oil market analysts, they would say, you know, one of the most significant drivers of blunting oil price increases over the last set of three or four months was the President’s decision to release a million barrels a day from the Strategic Petroleum Reserve.

Q I was just talking about the, like, attacking oil companies over the price, for — not the actual release from the SPR.

MR. DEESE: If you look at the pri- — if you look at the gap between wholesale and retail prices, it has come down. It hasn’t come down enough — right? — but it has come down.

So, compared to conversations we were having late spring or early summer, we’re in a different position on those fronts. And I think that I would think that that is, in part, a reflection of U.S. policy and U.S. policy choices.

And — and we’ve done that in the face of — you know, I mean, we’ve talked about this in others — you know, there’s lots of oil calls of, you know, prices are going to spike. When we were in — in the spring, before we deployed some of these tools, there were lots of projections that this summer we would see oil prices go to 140, 150, 180, 200. Right? And so we have used our tools to an effect, including on the issue that you’re describing, as we think about things going forward.

Look, on the congressional side, I — we were in- — you know, intentional in describing exactly how we were going to go about this, which is we’re going to consult with Congress on additional measures. There are a number of those that have been put forward, debated for some time, and we’re going to engage because we need to look at whether and what tools are — are necessary in that context.

Q Including OPEC?

MR. DEESE: You know, we’re — we’re going to — we’re going to — we’re going to consult on all of the — all of the ideas that are out there on the — on the legislative side.

And what I would say in the category of the other things you’re mentioning is that what the President has directed us, and it continues to be the case, is to take nothing off of the table and to assess the situation and bring recommendations and take recommendations. That’s what we have done. And we have acted in a number of places where we’ve made that judgment. That’s what we will continue — continue to do.

And we’ve been clear that — that for — in addition to trying to bring prices down to reflect market conditions and then to, you know — and otherwise, we need to — there is a national economic and national security rationale behind making sure we have sufficient inventory across the country to manage and deal with contingencies and downsides.

You know, we were — the President was in Florida yesterday to see the damage from the hurricane and extraordinary damage that will — will be a huge effort to rebuild.

Had that hurricane had a different trajectory, it could have had a much more significant impact on energy supply. And we need to look at the inventory situation across the country and regionally, and make sure that, you know, we’re positioned effectively. And, you know, we’re going to — we’re going to keep working with industry wherever we can to do that, but also have to, you know, consider measures if it’s in the national interest.

Q Brian, a follow-up on that. So is an export ban or limiting exports on gasoline and refined petroleum products one of the things that is still being considered and on the table?

MR. DEESE: So, we — what I would say on this — we said — I want to be — I want to be — I want to be clear on this, because we have said this before and I will say this again: The President has directed that we have all options on the table, and that will continue to be the case. And so that’s how we’re approaching this question.

Q How seriously is that being considered? Can you — any sort of update on that?

MR. DEESE: I don’t have any update on that.

Q And do you — a follow-up on that. How do you think allies in Europe or in Asia would take a ban on exports? Has there — have there been, you know, international consultations about it?

MR. DEESE: So, number one, we have and continue to be in extraordinarily close engagement with our partners and allies on the energy challenges that the world is facing, the — from the level of the President down to his senior team. We are in daily and weekly touch, particularly with our European allies. And that is part of how we have worked collaboratively, for example, to double the share of U.S. natural gas that is going to Europe from — from earlier — earlier this year. And we’ll continue — we’ll continue to do that.

You know, I think I would say — and just back to the prior question: The issue for U.S. — the U.S. and our economic security is maintaining sufficient inventory levels so that we aren’t in a situation where U.S. consumers are forced to bear the brunt of anticipated or unanticipated economic challenges.

So that’s why we focus on the retail price reflecting a reasonable, historical wholesale price is because, otherwise, American consumers are bearing the brunt. And why we focus on areas where we have historically low inventories — because that creates a potential risk where, you know, the U.S. consumer — we can’t have a position where the U.S. consumer is put in a place where they’re bearing the brunt of that.

Q But just to hone in on that: U.S. gas prices are going up now. They have been going down; they’re going up because of the oil price rise. So what in the short term is available, given that this is something that’s on consumers’ minds across the country right now?

MR. DEESE: So, number one, you know, let’s, you know, take stock of where gas prices are today. You know, today in America, the most common price for retail gasoline is $3.29.

We’re headed to New York and New Jersey where the retail price is about $3.50. It’s down 30 to 40 cents from where it was a month ago.

And so we are laser-focused on what we can do to keep bringing that price down. But we start from the prospect of: American consumers are paying significantly less for gas at the pump today than they were a month ago, two months ago. And that reflects some of the progress that we have made.

In the immediate term, those prices can and should come down more because of the dynamic that we just described.

The wholesale price, the price that the gas station companies are paying for that gas — notwithstanding the fact that oil prices have come up a bit — is still historically low compared to the retail price that they’re charging at the pump. So that’s one place where there is more opportunity.

There are highly regional issues associated with the national gas price. Some of those are, you know, a function of refinery issues that we are in close consultation with industry on. Have made very clear that if there is any federal resource necessary to help address immediate refinery issues, then we’re going to take it. And so, you know, I think that that’s — that reflects some of the things we’re focused on in the immediate term.

Q Does this — does this plan by OPEC change your plans for refilling the SPR so we’re not competing with — consumers aren’t competing against the government to replenish the reserves?

MR. DEESE: So, I think our approach to that question
has been consistent and I think will remain consistent, which is that the Department of Energy is finalizing rulemaking right no- — is in the process of finalizing rulemaking that will allow them to re- — to engage in repurchases while providing the market more clarity about how they will do that and at what price, farther into the future.

And that will be an important — that will be a tool that they will use to do that to provide the market clarity on how they’re going to do that, but also do it responsibly over a longer-term timeframe.

Q Is there a timeline? Because market clarity seems important right now.

MR. DEESE: So, there — as they finalize that rulemaking, then they will be in a position to do that.

Q When does the administration plan to make the full intelligence report on Khashoggi public, as human rights groups have asked for repeatedly? If you can, you know, maybe talk about what the delay there is.

MS. JEAN-PIERRE: Wait, what’s — I’m so sorry, what was the question?

Q The full intelligence report on Khashoggi. When is the President planning to make that public? What is the holdup? Is that being considered now?

MS. JEAN-PIERRE: I know this question has been asked many times before. I don’t have anything to preview or share at this time. And we will — we will get to you guys when we have something to share, but don’t have anything at this time.

Q On that broader economic perspective, is the White House concerned that the economic trajectory right now — given the labor market, you know, the oil crisis, interest rates — is sort of heading in the wrong direction after the summer when things seemed to be getting better?

MR. DEESE: Well, I would say the most — I think the most significant mark of the American economy right now is its resilience — the resilience of the labor market — which you have seen and you saw in the weekly unemployment insurance claims that came out this morning.

We have been saying for some time that as part of the transition that we’re — our economy is going through, we fully anticipate that the — for example, that progress in the labor market cool from the five to six hundred thousand jobs a month that the economy was creating at the end of last year and the beginning of this year to something more consistent with what we’ve seen historically when unemployment rates are in the — in the high threes. So, that — we certainly anticipate that that will happen and that that is a sign of a transition that we’re moving through.

I think, lifting out of it, to your question, even as we focus on these — the important near-term issues, like dealing with refineries to try to keep the gas — the progress in gas prices coming down sustaining, we are very focused on the long-term economic strategy that this President has had since taking office. And one of the key hallmarks of that is how do we build a more resilient economy, a stronger industrial base, an American manufacturing industry that can actually grow and sustain, and the follow-on benefits that that has for communities across the country.

And I think that is a story that is less told today but bears significant focus. That’s part of the reason for this trip, is that there are things happening in American manufacturing and domestic investment in key sectors that we haven’t seen in generations. And so, we’re keeping an eye on what we can do to sustain that over the medium term.

MS. JEAN-PIERRE: Last question, because we’re about to land.

Q (Inaudible) IBM, Micron — right? — was this week. And you mentioned the Michigan deal. Is there any — and I realize a lot of this is in the future, so people aren’t seeing the immediate effects, but is there any frustration that you guys aren’t getting credit in how the American folks see this administration building the economy?

MR. DEESE: I think that the reason, you know, you see the President doing what he’s doing today and us doing is that we try to make sure that we — that we are communicating clearly to people.

But ultimately, it’s not just, you know, in the future. You know, you go to talk to the community of Syracuse, you talk to Poughkeepsie — folks in Poughkeepsie. They are seeing that when this kind of investment comes forward, even if the investment is going to operate over a decade, the initiation of that breathes life into communities and creates economic opportunity that is more durable.

And I guess that’s part of the point about — you know, the longer-term economic strategy here is about, you know, durable and resilient economic growth —

MS. JEAN-PIERRE: Hold on, everybody.

MR. DEESE: — which is highly consistent with standing up while a plane lands. (Laughter.)

MS. JEAN-PIERRE: We got to end this. (Laughs.) We’ve just landed. Thanks, everybody. Sorry. Sorry, it was shorter. We landed earlier than expected.

11:46 A.M. EDT

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