the WHITE HOUSEPresident Barack Obama

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The White House
Office of the Press Secretary
For Immediate Release

Press Briefing by Press Secretary Jay Carney and Secretary of Agriculture Tom Vilsack

James S. Brady Press Briefing Room

12:43 P.M. EDT 

MR. CARNEY:  Thank you very much.  Welcome, everybody, to the White House for your daily briefing.

As I think you had advanced warning of, I have with me today the Secretary of Agriculture, Tom Vilsack.  As you know, he briefed the President today on the drought that is affecting a significant portion of the country.  The President asked for this briefing.  And I asked that Secretary Vilsack join me here today to give you an update and to take your questions on issues surrounding the drought.

If you could, as is past practice, hear Secretary Vilsack’s presentation, then ask questions that you have for him.  I will, of course, remain here ready to take your questions on other subjects.

And with that, I give you Secretary Vilsack.

SECRETARY VILSACK:  Jay, thanks very much.

I did have an opportunity to visit with the President.  He is very well informed on the circumstances surrounding a very serious drought -- the most serious situation we’ve had probably in 25 years -- across the country.  Sixty-one percent of the land mass of the United States is currently being characterized as being impacted by this drought. 

And our hearts go out to the producers, the farm families who are struggling through something that they obviously have no control over and trying to deal with a very difficult circumstance.

There’s no question that this drought is having an impact on our crops:  78 percent of the corn crop is now in an area designated as drought impacted; 77 percent of the soybeans that are being grown in this country also impacted.  It also obviously involves other commodities as well -- 38 percent of our corn crop as of today is rated poor to very poor; 30 percent of our soybeans poor to very poor. 

And this obviously will have an impact on the yields.  Right now we have indicated yields will be down about 20 bushels to the acre for corn and about 3 bushels to the acre for beans.  That may be adjusted upward or downward as weather conditions dictate.

This will result in significant increases in prices.  For corn, we’ve seen a 38 percent increase since June 1st, and the price of a bushel of corn is now at $7.88.  A bushel of beans have risen 24 percent. 

This administration has taken quick action to try to provide help and assistance.  At the instructions of the President, the first thing we did was to streamline the disaster declaration system and process, reducing the amount of time it takes to have a county designated.  That means that producers in those counties and adjoining counties are able to access low-interest loans. 

The President instructed us to reduce the interest rate on those loans from 3.75 percent to 2.25 percent.  He also instructed us to open up new opportunities for haying and grazing -- our livestock producers are in deep trouble because of the drought.  They don’t have anyplace for their cattle.  They are looking at very high feed costs.  So we are opening up areas under the Conservation Reserve Program for emergency haying and grazing. 

Normally when that happens, producers have to return a portion of the CRP payment that they receive.  We’ve reduced the portion that they have to return from 25 percent to 10 percent. 

Our tools are somewhat limited and so we’re going to need to work with Congress to provide opportunities either through the passage of the Food, Farm and Jobs bill or through additional disaster programs, or perhaps additional flexibility in the Commodity Credit Corporation to provide help and assistance to our farmers.

The question that a lot of folks are asking is what will the impact be on food prices.  Because livestock producers will begin the process of potentially reducing their herds in light of higher feed costs, we would anticipate in the short term actually food prices for beef, poultry, pork may go down a bit, but over time they will rise.  We will probably see those higher prices later this year, first part of next year.  Processed foods obviously impacted by crop yields, and we will likely see the increase of that also in 2013.

It's important to note that farmers only receive 14 cents of every food dollar that goes through the grocery store, so even though prices on commodities increase significantly, it doesn’t necessarily translate into large increases for food prices.  And if, in fact, people are beginning to see food price increases now, it is not in any way, shape, or form, related to the drought.  And we should be very careful to keep an eye on that to make sure that people do not take advantage of a very difficult and painful situation.

There is some degree of uncertainty about all of this.  Technology has allowed us to have more drought-resistant crops.  The spotty nature of drought, the spotty nature of rains can sometimes result in better yields than anticipated.  We're just going to have to see.  As of today, 1,297 counties have been designated as Secretarial Disaster Areas.  That's approximately a third of the counties in the United States.  We're adding 39 counties today in eight states -- those states are New Mexico, Tennessee, Utah, Wyoming, Arkansas, Indiana, Georgia, and Mississippi.

We have staff that is now traveling to 12 states significantly impacted by the drought in order to get a firsthand look at conditions, and we'll do everything we possibly can to help folks.  But we're obviously going to need some help, working with Congress, to create greater flexibility in programs, to revive the disaster programs that were allowed to expire last year, or to pass a Food, Farm and Jobs bill.

Jay, with that --

MR. CARNEY:  Yes.  Ben.

Q    Thank you.  Thank you, Mr. Secretary.  Two questions.  To follow up on the point you just made about your tools are limited, is there a specific amount of aid that you'll be seeking from Congress?

SECRETARY VILSACK:  It's very difficult to pinpoint that with specificity because we don't really know what the impact could be.  For example, based on our current estimates today, the corn crop would still be the third largest corn crop in the United States history.  And the reason for that is because there were more acres planted at the beginning of the year.

So we just have to wait to see what our yields are going to be.  In the meantime, though, we can create a structure and system, either through a revival of disaster programs or passage of the Food, Farm and Jobs bill that contains some relief for livestock producers, or some flexibility in CCC, so we're prepared to move as soon as we know precisely what the impact is going to be.

Crop producers have the ability to utilize crop insurance, and for the most part, crop insurance will provide historically about 72 percent coverage of yields and revenue loss.  But it's the livestock producers that are in the biggest and most troubled situation because they simply don't have any disaster program and there's no such thing as a crop insurance program for livestock producers.

Q    I just have one other question.  You gave us some specific numbers about crops and prices, but this drought is obviously happening at a very difficult time for the whole country and the economy.  Can you give us a macro sense of how this drought could affect the economy?

SECRETARY VILSACK:  Well, right now, the rural economy is one of the bright spots in the economy.  We're seeing record farm exports; we're seeing expansion of new markets; we're seeing development of a bio-based economy with record amounts of biofuel being produced; and we’re seeing outdoor recreation opportunities take off because of more acres in rural and conservation programs.

So it’s a little difficult to say what the macro impact will be.  One out of every 12 jobs in the economy is connected in some way, shape, or form, to what happens on the farm.  We’re actually seeing farm implement -- up to this point, we saw an increase in farm implement manufacturing and shipments at record levels.

Obviously, this drought will provide some degree of uncertainty, but the most important thing is for Congress to take action to provide some direction and assistance so that folks know what’s going to happen, what kind of protection they’re going to have.  That certainty is really important.  And that’s whether they want to get to work on the Food, Farm and Jobs bill, they want to develop a separate disaster program or an extension of existing programs, whatever it might be -- having that done as soon as possible will be quite helpful.

Q    Mr. Secretary, two questions.  Number one, you mentioned farm exports as being a bright spot.  Do you have any sort of estimates on the amount of reduction on exports for corn and soybeans now, given the drought situation -- even a range?  And second, will there be any EPA assessment of the mandate using corn for ethanol?

SECRETARY VILSACK:  There’s no need to go to the EPA at this point in time.  Based on the quantity of ethanol that’s currently in storage, there’s no problem in that area at this point in time.

On exports, we would anticipate and expect they would be reduced.  But again, the area and the amount of reduction depends on what the yields are, and I won’t know what those are until we, in fact, harvest the crop.

Based on what we have today, I would anticipate and expect a small decline, but that could be changed next week if the crop conditions continue to worsen, or it could be improved if we get the right rain in the right places at the right time and the right amount. 

Q    Secretary Vilsack, going back to the issue of crop insurance, I was told that crop insurance is very expensive, with the premium, maybe for some farmers, $15,000 a year.  What happens to those farmers who cannot afford the crop insurance?  Those small, minority, women farmers who just can’t afford it -- what is in place or what are you talking about putting in place to help them in the midst of this drought situation?

SECRETARY VILSACK:  That’s why the President was so insistent on taking a look at the interest rate on the emergency loan program that we have.  And that basically reduces -- it provides emergency loans to get people through a tough period of time.  And the interest rate was reduced from 3.75 percent to 2.25 percent for those producers who are located in counties that have been designated as a disaster area. 

So the emergency loan is one opportunity.  The second opportunity for those producers would be a situation where Congress would provide for a revival of the disaster programs that expired.  We had a program last year called SURE that provided supplemental protection; livestock producers had a livestock indemnity program -- they could bring those back.  So they could create opportunities within the Commodity Credit Corporation for us to provide financial assistance to those farmers.

So there’s a whole series of options.  But right now, the only option we have is to reduce the interest rate on the emergency loan and make sure that haying and grazing is available to livestock producers.

Q    So what are you doing to make sure, to ensure -- because right now you’re still dealing with a lot of minority, Indian, and women farmers who are having complaints about the subsidy programs that you offer.  What are you doing to ensure that there’s an equitable process that they are able to obtain those loans now?

SECRETARY VILSACK:  We have in place a process by which we compare the amount of loan activity in counties where there are significant percentages of socially disadvantaged farmers or minority farmers to make sure that the amount of loans that are being authorized and approved are roughly equivalent to the percentage of the population of the socially disadvantaged minority.  So that we keep engaged and if we see that there’s a significant difference, we’ll obviously pay attention to that particular county.

But I think everybody understands that now it’s all hands on deck.  The President is very concerned about making sure we do everything we possibly can to help as many producers as we can through this difficult circumstance.

Q    Based on what you know today -- and understanding it’s imperfect information -- how do you think this drought is going to compare with the '88 drought?  Do you think it could be worse than that?

SECRETARY VILSACK:  If we were comparing it today to potential yields, the '88 yield would have the corn crop being about 25 bushels less than what we have today.  The beans would be roughly five bushels less.  So we’re not at the '88 level. 

There’s probably a larger area of the country that’s impacted, but the severity is not as deep yet.  But every day that goes by without rain, depending upon the state and the condition of the soil, and what was planted and when it was planted -- part of the problem we’re facing is that weather conditions were so good at the beginning of the season that farmers got in the field early.  And as a result, this drought comes at a very difficult and painful time in terms of their ability to have their crops have good yields.

Q    Sir, could you elaborate on your concerns about short-term gouging or taking advantage of the situation?  And at what point in the food chain does that occur?

SECRETARY VILSACK:  Well, everybody knows there’s a drought and everybody knows it’s severe, and everybody knows that the corn prices and bean prices have gone up, and that impacts livestock producers in the long term.  What folks don’t know is it does take some time for those prices and that impact to be felt.  Nor do most people realize how little farmers get out of that food dollar.  So even though prices are increasing, it may not translate into significantly higher food costs. 

Right now we estimate our food inflation rate somewhere between 2.5 and 3.5 percent.  In fact, this last month it was at 2.7 percent, which was one-tenth of a percent less than the preceding month. 

So it’s complicated.  Because it’s complicated, some people could say, well, this is an opportunity to potentially raise costs now.  And we want to make sure people understand that now is not the time that they should see higher food costs.  If there are going to be higher food costs, you would likely see them later in the year and in the first part of next year.

Q    And what are you doing -- what’s the Agriculture Department doing, what can it do, to track for this kind of activity?

SECRETARY VILSACK:  Well, through a number of nutrition assistance programs, we can kind of keep an eye on what we’re spending and where we’re spending it and whether or not it is historically in the norm.  And if it’s not, we can take a look at it.

But I think the most important thing right now is for consumers to be aware and to keep an eye on it, and begin asking questions -- if they see a dramatic increase in hamburger costs or steak costs -- they should ask, what’s with this?  And if someone says it’s the drought, they should push back and say, now, wait a second, that’s not the reason.  We should actually -- given that herds are being reduced and potentially liquidated, we should actually be seeing a little lower cost right now.  And that pushback may make a difference.

Q    Thank you.

Q    Mr. Secretary, you’ve mentioned corn and beans several times.  I’m wondering why the focus on that and not other crops.  Is it because they have such a multiplier effect throughout the economy, throughout the food supply?

SECRETARY VILSACK:  Not so much that.  It’s primarily the area of where the drought is most severe is primarily where corn and beans are raised.  Wheat, somewhat impacted.  The biggest other impact is for livestock producers -- hay is obviously going to be much more expensive because there’s going to be a lot less of it. 

That’s why we’re deeply concerned about the importance of getting action with our friends in Congress to try to provide some degree of assistance and help.  And they have multiple ways they can do that.  We just want to encourage them to do it as quickly as possible.

Q    Mr. Secretary, thank you for doing the briefing.  I know that the U.S. sells some of the livestock to Russia and probably to other countries.  So do you expect an increase in the export of livestock because of this situation?

SECRETARY VILSACK:  Well, it’s conceivable in the short term -- as herds are liquidated, it could provide opportunities with lower costs for us to be even more competitive than we already are in that export market.  Frankly, we are looking at record exports, notwithstanding the difficulties we’re facing here.  We had a record year last year; we're looking at a strong year this year. 

As it relates to Russia, hopefully Congress will act and make sure that Russia enters the WTO in a way that allows us to put them in a process where they’re in a rules-based and science-based system.  That should increase and should help our export opportunities in Russia, more than just the current situation.

Q    Could you talk a little bit about the drought itself?  Is it very unusual?  Did anyone see it coming?  Is it from climate change?  Is there anything you can do to prepare?

SECRETARY VILSACK:  I’m not a scientist so I’m not going to opine as to the cause of this.  All we know is that right now there are a lot of farmers and ranchers who are struggling.  And it’s important and necessary for them to know, rather than trying to focus on what’s causing this, what can we do to help them.  And what we can do to help them is lower interest rates, expand access to grazing and haying opportunities, lower the penalties associated with that, and encourage Congress to help and work with us to provide additional assistance.  And that’s where our focus is.

Long term, we will continue to look at weather patterns, and we’ll continue to do research and to make sure that we work with our seed companies to create the kinds of seeds that will be more effective in dealing with adverse weather conditions.

It’s one of the reasons -- because they have done that, it’s one of the reasons why we’re still uncertain as to the impact of this drought in terms of its bottom line because some seeds are drought-resistant and drought-tolerant, and it may be that the yields in some cases are better than we’d expected because of the seed technology.

Q    I want to follow up on Andrei’s question -- just the other way.  Wouldn’t it first make sense to increase imports of crops to feed the herds, instead of slaughtering?  I mean, it’s unconventional for this country to think about improving imports instead of supporting more exports, but --

SECRETARY VILSACK:  Well, I think that the margins, particularly for livestock producers, are pretty tight.  And those margins don’t necessarily -- aren’t necessarily impacted or affected by importing more costly feed.  They have to make a tough decision and a difficult decision, and it’s particularly difficult in light of the fact that the disaster programs that we’re there to protect them under these circumstances -- to give you a sense of this, the disaster programs that we had under the 2008 Farm Bill, for all producers, including livestock producers, provided nearly $4 billion of assistance to 400,000 producers that suffered from floods and droughts and storms and fires and so forth.

So that was a significant help to those livestock producers. We don’t have that today.  We need something like that, and a lot of vehicles to get it.  But in the meantime, I think the producers will make the decision to reduce herds, which is how they normally react to a circumstance like this, so they can minimize what potential loss they may be facing. 

Q    Secretary, should we be expecting that you and the President will be heading to a drought-stricken area soon?  That’s normally a path that you take when you’re trying to show something is a priority.

SECRETARY VILSACK:  Well, I can’t speak obviously for the President’s schedule, but I can tell you that actually I was in Pennsylvania yesterday.  We do have the Deputy Secretary going to Georgia tomorrow.  We've got the Under Secretary of the Farm Service Association traveling to several states that are drought-impacted and affected.  We have a Deputy Under Secretary also traveling.  So we actually are fanning out across the country to get a sense of what the conditions are.

It really is also an opportunity for us to underscore what we have done and what needs to be done, and the help that we need from Congress.  So, yes, we're going to be continuing to travel throughout the country.  I'm scheduled to go to Iowa next week to talk to Farm Bureau members and I'm sure that I'm going to have an opportunity to visit with them about the conditions of the crops in Iowa.

Q    Mr. Secretary, I want to follow through on the climate change question.  Is there any long-range thinking at the Department that -- you had the wildfires and the heat wave and the rise in sea levels, and now this drought -- that there's something more going on here than just one year of a bad crop, and you need more than better seeds, maybe do something about climate change?

SECRETARY VILSACK:  Our focus, to be honest with you, in a situation like this is on the near term and the immediate, because there's a lot of pressure on these producers.  You take the dairy industry, for example.  We've lost nearly half of our dairy producers in the last 10 years.  They were just getting back to a place where there was profitability and now they're faced with some serious issues and, again, no assistance in terms of disaster assistance. 

So that's our near-term focus.  Long term, we obviously are engaged in research projects; we're obviously working with seed companies.  Don't discount the capacity of the seed companies.  These technologies do make a difference.  And it's one of the reasons why, at least based on the yields today, we're looking at potentially the third largest corn crop in our history.  Now, that may be adjusted downward, it may be adjusted upward -- depends on the rain, depends on circumstances.   But even with the difficulties we're experiencing, we're still looking at a pretty good crop as of today.  Tomorrow it could change, obviously.

MR. CARNEY:  We'll take one more for the Secretary.  Yes, sir, right here.

Q    I'm Dr. Harper, the Intermountain Christian News.  And Governor Perry last year had this national day of prayer and fasting, and he was encouraging people to pray and fast in these national disasters.  Do you have any figures on that?

SECRETARY VILSACK:  Well, I can only speak for myself.  I get on my knees every day and I'm saying an extra prayer now.  If I had a rain prayer or rain dance I could do, I would do it.  But honestly, right now the focus needs to be on working with Congress -- they have the capacity to help these producers by creating greater flexibility to programs, providing us some direction in terms of whatever disaster assistance can be provided.  Those are the kinds of things we're focused on.

MR. CARNEY:  Thank you very much, Mr. Secretary.  We appreciate it.

Q    Is the President going, Jay, to go anywhere --

MR. CARNEY:  I don't have any scheduling updates for the President to provide to you today.  If and when I do, I’ll provide them. 

We can now return to our regular programming.  Mr. Feller.

Q    Thanks, Jay.  A lot to cover on Syria, so a question on that, and then I wanted to squeeze in one on domestic politics.

First of all, on Syria, we’ve heard some initial reaction, but one thing I haven’t heard is whether the White House condemns the killing, condemns the bombing of the top officials of the Assad regime.

MR. CARNEY:  What I can say, Ben, is what we’ve said all along, which is that we do not believe that violence is the answer.  And it is precisely because of the ongoing campaign by President Assad against his own people that we are seeing a situation that is getting worse and worse.  

And that is why it is so important for the international community to come together around a plan that produces the transition -- the political transition that is essential if Syria is to have a brighter future.  I think the incident today makes clear that Assad is losing control, that violence is increasing rather than decreasing, and that all of our partners, internationally, need to come together and support a transition. 
One concern expressed by those who have resisted supporting a transition that would see Assad remove himself from power is that it would -- that that outcome would cause the situation to spiral out of control or cause chaos or more violence.  And our argument has always been that the situation, as it exists with Assad in power, is what will result in greater violence and in greater chaos.  And that is being borne out, unfortunately.

So as you know, we’re working with our partners at the United Nations in New York, trying to bring about the consensus that we believe is absolutely necessary.

Q    Can you inform us whether Assad was a target and whether the administration knows where he is now?

MR. CARNEY:  I don’t have any information on that.  We’re still gathering details about the incident.  Again, all I can tell you is it reflects the fact that the situation is getting more violent every day in Syria.  And it only proves a point that we’ve been making that the window is closing; we need to take action in a unified way to help bring about the transition that the Syrian people so deserve.

Q    I’ll squeeze in my political question here.  Speaker Boehner today, in talking about the President, said, "He doesn’t give a damn about middle-class Americans."  And I wanted to get your reaction to this in terms of whether you think that this is another day in Washington politics, or whether that kind of comment about the President’s motivations in any way crosses the line.

MR. CARNEY:  I had not heard that comment.  I would simply say that the President’s focus from day one in office has been on the middle class, has been on restoring the security that had been eroding for the middle class for a decade in this country.  All of his domestic initiatives are focused principally on the middle class.  The proposal that he has been asking Congress to act on immediately is a middle-class tax cut -- a tax cut that would go to 98 percent of American taxpayers.  It is the principal preoccupation of his presidency.  It is the reason why he ran for this office.  It is the reason why he is running for reelection.

It is, I think, astounding to hear a criticism like that when you simply bring it back to the policy debate.  In an effort to move the ball down the field, if you will, in terms of our economic challenges, the President, acknowledging that there are big disagreements on some issues, did what you do when you seek compromise, which is find common ground.  And he said, look, we all support, Republicans and Democrats alike -- at least we all say we support -- extending tax cuts for the middle class.  Let’s do it.  Let’s do it tomorrow.  Pass those tax cuts now -- the President will sign them into law.

I believe Speaker Boehner opposes that.  I hope his opposition changes.  It is a very difficult argument to make, I think, to middle-class Americans that you believe your taxes should go up unless millionaires and billionaires get a tax cut.

I’ll happily talk at length about the President’s record supporting and helping to make more secure the middle class.

Q    I wanted to return to Syria for a moment.  Do you have any information about who may have been behind the suicide bombing? 

MR. CARNEY:  I’ve seen published reports of a group taking responsibility, but I don’t have any other information besides that.

Q    And in light of the increasing violence in Syria, are you concerned -- how concerned are you about the security the country’s chemical weapons stockpile?

MR. CARNEY:  Well, we have, as you know, repeatedly made it clear that the Syrian government has a responsibility to safeguard its stockpiles of chemical weapons and that international community will hold accountable any Syrian officials who fail to meet that obligation.  We, the United States, are closely monitoring Syria’s proliferation-sensitive materials and facilities.  And we believe that Syria’s chemical weapons stockpile remains under Syrian government control.

But taking a step back, we have long said that the presence of chemical weapons in Syria undermines -- in Syria and the region -- undermines peace and security, and we continue to call on the Syrian government to give up its chemical weapons arsenal and to join the chemical weapons convention.

Q    What do you have on the Bulgaria blast that targeted some Israelis?  The Israelis are saying apparently that it has all the earmarks of something by Iran.

MR. CARNEY:  This is obviously breaking news and we are working to ascertain all the facts.  But I want to be clear that the United States condemns such attacks on innocent people, especially children, in the strongest possible terms.

The President’s thoughts and prayers are with the families of those killed and those injured.  We also stand with the people of Israel and the people of Bulgaria in this difficult time.  Going forward, the United States will support our friends and allies as they confront terrorism.  And of course, our commitment to Israel’s security remains unshakable.

Q    I mean, does this look like something that Iran would have done?

MR. CARNEY:  I don’t have information yet on anything specific to the incident itself and if, in fact, it was terrorism and who was responsible for it.  I can tell you that the President has been briefed on it, but I don’t have any more details on it.

Q    Thanks, Jay.  I have two questions.  First, on the GOP allegations that the Obama administration has "gutted" Medicaid  --- I’m sorry, welfare -- "gutted welfare reform."  And I think Romney has also weighed in, saying that President Obama "wants to strip the established work requirements from welfare."  And I was wondering what the President or the White House response to those allegations is.

MR. CARNEY:  Well, I find that interesting because a cornerstone of the Welfare Reform Act of 1996 -- which I remember well because I covered it -- was the establishment of work requirements for welfare recipients.  And those requirements are fundamental to the gains made in the past 15 years in moving people from welfare to work.  And this administration opposes any effort to undermine those requirements.

The changes proposed by the Department of Health and Human Services are designed to accelerate job placement by moving more Americans from welfare to work as quickly as possible.  There will be no waivers of the time limits in the law, and only waivers with compelling plans to move more people off of welfare and into work will be considered.  This policy will allow states to test new, more effective ways to help people get and keep a job.

And then if I could address some of the hypocritical criticism -- I have been surprised by it -- by the hypocrisy of our critics since many of them have in the past supported and even proposed such waivers.  Governor Romney, Governor Barbour, Governor Huckabee, Secretary Tommy Thompson, and Senator Grassley all supported these kinds of waivers for states in the past. 

In a 2005 letter to the Senate, Republican governors including then-Governor Romney, requested such waivers.  Under President George W. Bush, HHS Secretary Thompson put forward a proposal that would allow "super waivers" in the program.  The Senate, under Republican control at the time, passed a bill authored by Senator Grassley with broad waiver authority. 

And just last year, states led by Democrats and Republicans including Nevada and Utah, called for these waivers -- these very waivers so they could have more flexibility to get more people back to work faster.

So, given this long, documented history of bipartisan support, it is surprising, to say the least, to see this kind of flip-flopping on the part of Republicans.

Q    Are you suggesting that Mitt Romney flip-flopped on this?

MR. CARNEY:  I’m suggesting that everyone I named by name in the past supported these kinds of waivers.  And I am also making clear that this administration in no way supports any effort to undermine the work requirements that were fundamental to the Welfare Reform Act signed into law by President Bill Clinton in 1996.

Wendell.  No, I’m sorry, do you have a second question?

Q    I just had one quick one.  On the Jobs Council, obviously who haven't met formally or publicly for six months -- why exactly is that?

MR. CARNEY:  Look, the President solicits and receives input and advice from members of his Jobs Council and others about economic initiatives all the time.  And I would point you to the numerous initiatives put forward by the Jobs Council that this administration, under the President’s direction, has taken action on, including a presidential memorandum in August of last year that selected 14 job-creating, high-priority infrastructure projects for expedited review -- four of those are already under construction; in March of this year, just a few months ago, an executive order launched an interagency effort to cut red tape and improve outcomes for infrastructure projects; new federal plan that will require timelines concurrent instead of sequential reviews; early coordination among federal, state, and local agencies to reduce duplication and adoption of other best practices.  There are numerous initiatives that have been proposed by the Jobs Council that this administration has acted on, and that will continue to be the case.

Q    So there’s no reason they haven’t met publicly?

MR. CARNEY:  No, there’s no specific reason except the President has obviously got a lot on his plate.  But he continues to solicit and receive advice from numerous folks outside the administration about the economy, about the ideas that he can act on with Congress or administratively to help the economy grow and help it create jobs.

Q    With the violence intensifying in Syria, will the U.S. be prepared if the Assad regime were to collapse in a matter of days?

MR. CARNEY:  Your question goes I think to the point I was making earlier about the escalating violence, about the fact that as Assad has stayed in power and continued to perpetrate violence against his own people, that the situation has become more, and not less, chaotic, that the opportunity for a peaceful transition begins to diminish.

Now, we believe that that opportunity still exists.  That’s why we need to come together with our partners internationally, form a consensus that embraces the notion that a transition in Syria is taking place and must take place, and that it cannot include President Assad because he has forfeited long ago any credibility he has with the Syrian people. 

And we call on our friends and our partners internationally to recognize that Assad is a spent force in terms of history.  He will not be a part of Syria’s future.  And the best possible course of action for every country with an interest in the region and in the future of the Syrian people is to ally with the Syrian people and support a transition that is inclusive and allows for the establishment of a process and a democratic future for Syria.

Q    On another subject, there’s been some Democratic pushback recently on what they see as Republican attempts to basically hold the President hostage to the threat of the sequester.  Are you concerned that this might have a chilling effect on hiring by defense contractors and others who see us heading ever closer to that fiscal cliff?

MR. CARNEY:  The President’s position is and has been that Congress needs to do what -- do the work that Congress assigned itself back last summer when it passed, with bipartisan majorities in both the House and the Senate, the Budget Control Act.

The sequester, which was part of that legislation, was designed to be unpalatable to everyone.  It was designed to have cuts that no one supported in both defense spending and in non-defense spending.  And it was designed that way precisely because it required -- what was required was the kind of motivation to make some tough choices and tough votes that Congress clearly needs in order to do the right thing, which is embrace a balanced approach to long-term deficit and debt reduction. 

That is an approach the President supports.  It is embodied in the proposals he’s put before Congress.  It’s a position that is broadly supported by the American people, by bipartisan commissions like the Bowles-Simpson Commission and the Domenici-Rivlin Commission.  It is supported by the so-called Gang of Six. It is supported by all right-thinking people everywhere except, perhaps, in one portion of the Congress.

And the President believes that the simple adoption of the premise that we need to have a balanced approach so that deficit reduction and debt control is not -- the burden of that is not borne solely by seniors, solely by the middle class, but borne by everybody in a balanced way would move this process forward. 

And we’ve seen some signs of recognition that revenues need to be part of the approach on behalf of some elected Republicans, and we hope that we begin to see more of that, because that is clearly what needs to be done and it’s clearly what the American people support.

Q    I understand the reasoning for the President’s position.  I’m asking about concerns about the impact on job creators.  Does it trouble you as we move closer to this cliff that defense contractors see huge cuts if Democrats and Republicans don’t work it out.

MR. CARNEY:  And the President opposes those cuts, does not believe those cuts are wise, they’re too deep.  They are not -- they are much deeper than the President has proposed in his budget for a reason.  And that is why Congress needs to act to avert the enforcement of the sequester, and there is time for Congress to do that.

Again, we have been debating these issues and engaging at a deep, substantive level on these issues for quite some time now  -- certainly for as long as I’ve been in this job.  And the result of that is that the work has been done, we know what we need to do, we know what the options are.  We know what the Republican proposal is, we know what the President’s proposal is. We know what is broadly supported by interested communities around this issue.  We know what would help the economy, we know what would harm the economy.  And we need to simply accept that compromise requires the kinds of steps the President took to sign into law spending cuts of substantial size -- $2 trillion. 

It requires embracing the kinds of reforms in our health care entitlements that the President has embraced and put forward.  And it requires Republicans to accept the simple proposition that seniors, folks with disabled children, and the middle class should not have to bear the cost of getting our fiscal house in order by themselves; that the wealthiest Americans who have, by comparison with the middle class, done far better over the past decade, ought to do their fair share.

And on the general principle of tax cuts, I think it’s worth noting that the President simply supports -- as he long has -- the return of the tax rates for the top 2 percent of American earners to the level that was in place in the 1990s under President Clinton.  And the beauty of this is now we have an empirical example of what the impact of those tax rates had on our economy, and would have if they were implemented again in the future. 

And although some, including the aforementioned current Speaker of the House, warned about doom and gloom when those rates were put into place by President Clinton in 1993 -- economic Armageddon I think was predicted -- what we got instead was the opposite.  We got the longest peacetime expansion of our economy in history.  We got 23 million jobs created.  And the middle class saw its positioning made more secure – middle-class incomes actually went up.  And millionaires and billionaires did pretty darn well also.  So I think that’s a recent example that should help guide us into the future.

Q    Let me try one more if I can. 

MR. CARNEY:  Sure.

Q    Wheaton College, an evangelical school in Illinois, is joining Catholic groups in their lawsuit against the Affordable Care Act’s contraceptive requirement.  Any reaction to that?

MR. CARNEY:  I’m not aware of that.  I’ll have to -- I mean, our position is as it was, but I am not aware of that report.

Yes, sir.  And then Norah.

Q    Just to follow up on Wendell’s line of questioning on the sequester.  Does the President or does the administration think it would be appropriate to negotiate legislation to avoid a sequester in a lame duck session?

MR. CARNEY:  The President believes that Congress should act now to render moot the sequester by passing balanced deficit and debt reduction.  If Congress doesn't do that now, it must do that after the election.  But that is the course of action that needs to be taken.

Q    But there's an alternative --

MR. CARNEY:  They simply can't -- the alternative is to ignore a problem that is easily fixable.  And Congress promised before the nation, when bipartisan majorities in both Houses voted for the Budget Control Act, that they were not going to do that; they were going to embrace the challenge and come together and pass legislation that could garner bipartisan support.  And the only legislation that can garner bipartisan support is legislation that addresses our fiscal challenges in a balanced way.  That's what they have to do. 

Q    So the President would oppose a short-term extension?

MR. CARNEY:  I'm not going to negotiate what may or may not happen in December.  What I will tell you is the President's position is clear about what Congress needs to do. 

Q    One quick follow -- and it just came across the wires  -- the President has apparently spoken with Vladimir Putin.  Can you give us any sort of readout on that?  The topic was Syria, as we understand it.

MR. CARNEY:  Well, I don't have any additional information for you, except I can confirm that the President did speak with President Putin.  But I'll have more information for you. 

Q    On Syria?

MR. CARNEY:  I believe that was a topic of discussion, yes.

Q    (Inaudible.)

MR. CARNEY:  Not that I'm aware of.

Q    Jay, he called him?

MR. CARNEY:  President Putin. 

Q    Who called who?

MR. CARNEY:  I believe we initiated the call, but I will have to double-check. 

Q    Two questions.  The first is Mitt Romney's campaign and its allies have been trying to make hay out of the fact that a lot of companies with connections to Obama donors have received grants and loans, loan guarantees from the Energy Department.  The question is whether you think it's -- is there anything wrong with a company or an individual who has supported the President politically also receiving government support for their endeavors?

MR. CARNEY:  Well, I think these charges have been appropriately labeled by some of your colleagues as ridiculous, totally false, unfounded.

Q    Is that what you're labeling them?

MR. CARNEY:  We certainly believe that and know that.  The fact of the matter is these programs, a principal one of which was started under the Bush administration, gave out loans on a merit basis.  And that's been well established. 

Republicans in the House have been investigating this stuff for more than a year.  And you know what they got so far?  Nothing, because the program, again, was -- the loans are assigned on a merit-based basis. 

And we have long acknowledged that one of the reasons why -- and this was true under the Bush administration when one of these programs was established -- that you create these investment programs to invest in industries that might not otherwise get that seed money that they need to grow and that, inherently, there is some risk involved in that. 

But the broader principle here is that we need to build those industries in the United States, because they will be vital industries in the 21st century and if we don't build them here, they will be built in China or Europe or India or elsewhere, and jobs will be created in China or India or Europe or elsewhere.  And this President was not willing to cede these key 21st century industries to the Chinese or the Indians or the Europeans or others.
 
So that was why he made the investments through the Recovery Act that he did.  Those investments have supported hundreds of thousands of jobs.  And, even more significantly, they have helped clean energy industries here in the United States expand and place roots into the American economy in a way that will continue to pay dividends economically for years to come.

Q    My second question, following up on Donovan's question about the Jobs Council -- I'm wondering if it's at all awkward for the President to be campaigning against recommendations that the Jobs Council made, such as the territorial tax system.

MR. CARNEY:  Well, no.  I think we made clear when the Jobs Council was created, these are outside advisors who, by design, come from different areas of the economy and they bring different views, and they are not members of the administration.  And that's the whole purpose of it.  And the President wanted this outside input and he wanted to evaluate ideas.  And, obviously, he will embrace and support some of them -- and he has, as I began to speak about earlier -- and others, he won't support.

So the territorial tax system that you reference, the President doesn't support that because, as was demonstrated in a report published in Tax Notes earlier this week, it would create a situation where jobs are created overseas rather than in the United States.  I mean, it stands to reason if you give a tax incentive to companies to build factories overseas, they're going to do that, and the jobs that come along with that will be created overseas.

Q    What does that say about your Jobs Council, if they were promoting an idea that would be so harmful?

MR. CARNEY:  It says that the President has received many fine ideas from the Jobs Council that he agrees with and he supports, and that he doesn’t agree with and support every idea that everybody has put on the table.  Because he has to balance the various interests that are at stake when he looks at what's best for the American economy, what's best for the middle class, what's best for manufacturing here in the United States, and what approaches are best to encourage companies to build factories in the United States, open offices in the United States, and hire American workers.  That is his focus, and that has driven his economic proposals and it is driving his economic vision for the next four years. 

Q    Jay, so Speaker Boehner -- and I know you said you hadn't heard his comments -- but he also -- you said in response to his comment that Ben talked about that it's important to look at the policy debate.  That's also part of what the Speaker was saying.  He was saying that the President's campaign is not focused on the policy debate -- they're focused on Governor Romney's tax returns.  And he called this a distraction.  He said the President is trying to distract the American people.  If you're looking at priorities based on rhetoric, does he have a point that that's an attempt at distraction?

MR. CARNEY:  No, he doesn’t.  And I would refer campaign-specific questions to the campaign.  But the President's priorities -- and you hear him talk about it everywhere he goes, both when he is having official events and when, as yesterday, he has campaign events -- and he talks very specifically about concrete economic proposals and his vision for helping the economy grow and helping secure the middle class.

And the debate about encouraging insourcing, as opposed to encouraging outsourcing, is fundamental to economic policy and the kinds of choices we need to make going forward.  And it's one that I think illustrates a real difference between the President and, unfortunately, the Republicans. 

I mean, here is a proposal that is currently being discussed on Capitol Hill and the Senate about eliminating loopholes that exist in our tax code that encourage companies to take jobs overseas.  Now, we shouldn't be doing that.  Why would Congress want to encourage companies to send jobs overseas?  We should be taking action to encourage companies to build and invest here in the United States and create jobs here in the United States.  That's the President's position. 

That's embodied in the proposal that he has put forward that the Senate is considering.  And it makes no sense to him, or to me, that Republicans wouldn't support that.  Unfortunately, there has been opposition to that.  We hope it can be overcome.

Q    But it just sounds like the President -- you're saying the President isn't focused on this line of attack, because it's his campaign. 

MR. CARNEY:  No, I didn't say that at all.  I said one of the issues that's being debated in the campaign as it relates to the President's opponent has to do with vision and what policies he is for with regards to outsourcing versus insourcing.

Q    But also the tax returns is --

MR. CARNEY:  Well, I mean, one of the issues that I think -- again, I think you ought to take specific questions about Governor Romney and the campaign to the campaign.  But what the President believes --

Q    So there's a firewall?

MR. CARNEY:  Well, there are issues that I think are best addressed by the campaign.  But I can tell you what the President believes and what his positions are.  And I can tell you on the issue of his policy positions on outsourcing and insourcing, and the distinctions that exist between his position and Governor Romney's.  He feels very strongly about that.  That's why he is pushing them so hard, both on the campaign trail and in Congress. 
And when it comes to transparency and accountability, the President believes that that comes with the office.  I mean, he has said -- and I will quote him -- that when you're President of the United States, you are responsible and you live by the adage that Harry Truman coined, that "the buck stops here."  And the whole debate about whether -- when you're President of the United States, you can't say, well, I know I have the title but I'm not really responsible for what happens here in the White House or in the federal government, I was doing other things -- you are responsible, and the President believes that very strongly.

And if you're going to run for President, it's not necessarily comfortable, but it's become a tradition and it's an important one, you make your tax returns available because you think the American people deserve that kind of transparency. 

So, again, I'm speaking for the President.  If you have questions about how the campaign specifically is addressing these issues, you should take them to the campaign.  But the President -- his record demonstrates that and he very much supports it.
Q    And I want to follow up on a question about Wheaton College.  We've actually -- we've filed a story on this, Wheaton College joining Catholic University in a lawsuit --

MR. CARNEY:  I just got this question and I don't have -- I'm not even aware of it, so I'll have to take the question.

Q    I mean, it's pretty simple -- they're joining Catholic University.  There are many institutions that are suing over this.  I'm just wondering if there's a concern that this is sort of just a sign of just a sign of more to come.  The administration has already lost the support of its key ally, the Catholic Health Association.  Is there a concern that there is more to come?

MR. CARNEY:  The President, as you know, when this was a topic of discussion earlier this year, was committed to finding a balance between religious liberty -- which he has a strong attachment to and belief in -- and the need to ensure that women had access to important preventive services, including contraception.  And he made sure that that balance was struck in the policy that is moving forward.  And that’s the position he’s taken.

I don’t have -- in terms of the iterations of developments in court cases, again, I’m not aware of the specific case or the fact that this college is involved in it.

Q    Well, but that’s just it.  This is the premier evangelical institution in the U.S. joining a lawsuit.  Isn’t that a development?  How does it register?

MR. CARNEY:  Well, I’m not saying that it’s -- I mean, it’s clearly a development if CNN has done a story on it.  (Laughter.) But the --

Q    It broke an hour before the briefing.

MR. CARNEY:  A whole hour?

Q    Yep.

MR. CARNEY:  What I’m saying is that as a matter of principle, I just don’t have anything specific on this event since I was informed about it by one of your colleagues earlier. What I can tell you is that the President believes very strongly in finding the balance that he believes he found and the administration found in putting forward the policy that’s put forward.

And on specific legal actions, I would have to take the question -- or probably refer you to the Department of Justice.

Q    The Syrian opposition has been vocal in their criticism of the Obama administration, saying that you haven’t been doing enough and basically, all that they’re receiving is rhetoric that President Assad has to step down.  How do you respond to that?

MR. CARNEY:  Well, I would say that the United States has led the effort to organize the international community to try to unify the international community in support of both the Syrian opposition, but more broadly the Syrian people and the whole premise that there needs to be a transition in Syria without President Assad.

Our very clear position on the brutality that Assad has perpetrated, the fact that he long ago gave up any opportunity to participate in a transition to democracy in Syria, has been vocal and clear.  And it is not -- it is a simple fact that at the United Nation, efforts that we supported and led to pass resolutions that would have -- that we believe were the correct ones against Assad, were not supported by Russia and China.  And we’ve been very clear about our disappointment in that. 

And that’s why we’ve continued to work with the Russians and the Chinese to try to persuade them that history is not on the side of those who would ally themselves with President Assad; that it is in the interest of peace, it is in the interest of the Syrian people, and it is in the interest of those nations that want a continued relationship with Syria and the Syrian people to support a transition in Syria that does not include President Assad.

Q    What do you mean by when you say "transition"?  You often said that from this podium.  What do you mean by "transition"?

MR. CARNEY:  We mean, as we’ve seen elsewhere, there has to be a process that -- a transition period that allows for the interim government, if you will, that allows for the establishment of a new democratic process in that country that would eventually --

Q    -- include this current regime?

MR. CARNEY:  No.  Our point is without this regime -- I mean, that’s the point we’ve been making -- that Assad cannot participate in that process because he has lost all credibility with his people by the simple fact that he has gone around the country killing innocent Syrian civilians.

Q    Jay, you just said you are pursuing --

MR. CARNEY:  I’m sorry?

Q    You are pursuing the situation with the United Nations right now.  What is your strong leverage to use against Russian veto today?

MR. CARNEY:  We are in regular conversation with the Russians and we’ve made our positions clear.  And our point to the Russians and others is that, as I just said, if you ally with Assad, you’re going to end up on the wrong side of history, and that a continued relationship with Syria and the Syrian people I think depends upon making the right decisions now, because Syria’s future will not include Assad.  Syrians need to be able to determine their own future in a democratic way.  And it is in everyone’s interest in the region and beyond to support a process that allows for that process to take place, that responds to the legitimate democratic aspirations of the Syrian people.

Thanks very much.

END  
1:44 P.M. EDT