the WHITE HOUSEPresident Barack Obama

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The White House
Office of the Press Secretary
For Immediate Release

Press Gaggle by Press Secretary Robert Gibbs and Special Assistant to the President for Economic Policy Brian Deese en route Detroit, MI

Aboard Air Force One
En Route Detroit, Michigan

10:49 A.M. EDT

MR. GIBBS:  -- a number of the decisions that the President will highlight today at both stops in Michigan. 

First, well, as you guys know and as we’ve talked about over the past couple of days, we’re going to visit a Chrysler plant that has -- that is adding a new shift, 1,100 workers, and next go to a GM facility that is producing the new Chevy Volt.

Just to sort of recap a little bit from yesterday, this is the first time the Big Three have reported -- all three have reported an operating profit in the same quarter -- happened this year, so for the first time since 2004.

The auto industry the year before the President came into office lost more than 300,000 jobs.  Since GM reemerged from bankruptcy, the auto industry has added 55,000 jobs.  So -- and that's the first time that the auto industry has been adding jobs in -- since 1999, so more than a decade.  So the President is going to go today to highlight this story, to talk about the decisions that he made, talk about the tough sacrifices that workers and management had to make and highlight the beginnings of what we hope will be a long-term, good news story.

Q    Robert, what’s the administration’s reaction to the Commerce report, kind of disappointing about the recovery?  And do we need more stimulus?

MR. GIBBS:  Well, look, I think that the statistics today confirm what a lot of people in Michigan that we’re going to talk to today and a lot of people around the country knew, and that is the new statistics and the revisions for 2007, 2008 and 2009 demonstrate that this is the longest and deepest recession on record in our history. 

We lost more than 8 million jobs.  And we know times have been tough.  Look, we have seen over the course of this year so far steady job -- I’m sorry steady economic growth at about 3 percent, but we all know we have to do more, and we have to do better.

I’d say the first thing that needs to happen to address the statistics today is for the Republicans in the U.S. Senate to stop playing politics with what ought to be a pretty easy thing, and that is cutting capital gains taxes for small business, allowing small businesses to deduct more from their taxes when they invest in new equipment, and to provide community banks with the capital that small businesses need to get quickly.

That's the best response -- short-term response we could have to these numbers is for the Republican Party that preaches it virtually -- virtually every time somebody puts a tape recorder in their face about how much they want to help small business, now it’s time to walk the walk, not just talk the talk.

Q    Will the administration change any of its policies based on the second quarter report?

MR. GIBBS:  Look, obviously, we’ll look through the statistics.  I think they largely demonstrate what we already knew that we have -- it took us eight years to get into this economic mess, and it’s going to take us more than a year and a half to get out of it. 

And that's what Brian and the economic team will continue to focus on. 

Q    Are you worried, though, that the economy is losing steam?  The recovery that seemed to be fairly solid early in the year is losing steam and faltering?

MR. GIBBS:  Karen, there is no doubt that we have hit headwinds.  I think we’ve certainly talked about this -- I know you’ve heard the President talk about it -- that what happened in Europe, what happened in Greece in the late spring was a big part of that headwind. 

The United States made some tough decisions to stabilize our financial system and to inject some recovery into their economy.  And Europe didn't do, quite frankly, as much.  And that has no doubt stunted our growth and stunted world growth.

Q    Is there consideration of another stimulus now?  Or not at this point?

MR. GIBBS:  Look, I think if you look at the politics of what’s going on on Capitol Hill right now, I think we got everything we could.  But I will say again, Margaret, that cutting capital gains taxes on small business, I doubt many of us thought we’d live long enough to watch Republicans stop cutting capital gains taxes on small business.

I mean this shouldn’t be a partisan issue, and if it was a partisan issue yesterday, I hope that that caucus will take a look at the statistics that we’ve seen today, reacquaint themselves with the 8 million people that have lost jobs -- understand this, they like to say that -- and it’s true that small -- small business is the job creation engine of our economy -- and hopefully do some thinking over the weekend to put aside some of their partisan and ideological bents to help the American people make some progress in this economy.

Q    Robert, the President is going to spotlight the jobs -- the new hiring among some of these plants, but the fact of the matter is, is that tens of thousands of jobs that were lost over years during the downturn to the auto industry will never come back, so what’s the President’s message to those people who will never be able to be back on the assembly line?

MR. GIBBS:  Well, I think it’s important to understand the history.  The decision the President made -- and Brian was in those meetings; I was in a lot of those meetings -- was a decision to save a million jobs.  And you hear a lot of people talk about the decisions they would have made.  They would have walked away from a million people.  They would away from the communities.  They would have walked away from the livelihoods that many enjoyed.

So first and foremost, we’re glad that those million jobs have been saved.  It wasn’t an easy decision, but it was the right one.  Now, the auto industry is adding jobs.  I do think that the auto industry can continue to create jobs because clearly they're making products that have and enjoy increasing consumer demand.  And understand this, we are seeing profitability and job creation in an economy of about 11 or 11.5 million in annual sales, down from probably a high of about 17 or 17.4 million. 

So the auto industry has done well in a fragile economy.  As the recovery continues, we expect that consumer demand will increase and we can bring back some of those jobs.

Q    Can you confirm what’s going on at OMB?

MR. DEESE:  The only thing I would add to that is that -- and some of this will be on display during the President’s trip today, which is in addition to the steps that the administration took with respect to GM and Chrysler, the administration has also taken a set of -- made a set of investments and made a set of decisions to try to help build a long term, new industry in the United States that’s not just about building the cars of the future, but making sure that the technologies of the future are designed here and made here. 

And so you saw the President visit a battery manufacturer.  We’re expecting that there were two battery plants in the United States before the President took office, we’re now projected to have 30 of those in the United States.  So that’s -- that means jobs, but it also means the foundation of a new industry that’s more innovative and where we’re building things here in the United States that people just a couple of years ago never expected we would be. 

Q    Can you confirm what’s going on at OMB, that Jeffrey Zients is going to be taking over as acting director and Rob Nabors is going to be coming over before Lew is -- you can confirm both those things?

MR. GIBBS:  Obviously, the President signaled and picked Jack Lew to succeed Peter Orszag, who leaves today.  And the President appreciates Peter’s service.  Obviously, Peter was involved in helping to craft the Recovery Act, was a key player in particularly the cost-cutting measures in health care, all valuable and important contributions to this administration, work that we’re all proud of.

I think we’ve got a good team in place -- an acting team, Rob coming back after spending some time in the Chief of Staff’s Office -- as we send Jack Lew’s nomination up, and hopefully the Senate will act on it quicker than they normally do.

Q    What’s the timeline for the head of the Consumer Protection Agency?  Any update on that?

MR. GIBBS:  Nothing.  No updates and no imminent announcements.  I would add one thing on health care.  Today, the Medicare agency is releasing some new ads featuring Andy Griffith that highlight some of the impacts of the Affordable Care Act on Medicare, including reduced prescription drug prices, increases in fighting fraud against seniors, and free checkups, which are all important aspects of the Affordable Care Act.

Q    There’s a piece today in the New York Times opinion section called “GM’s Electric Lemon.”  I’m wondering whether the President has read that this morning and whether he is concerned about it?

MR. GIBBS:  I don’t know that the President -- Deese had a good point that I’ll have him make now.  They don’t do a lot of fact checking, I would say, on some of these things.

MR. DEESE:  I would just say two things.  The first is the President has been clear, and I think we were clear about this, as well, that the decisions that this company, its independent board and its management are making are their decisions.  And so I think some of the suggestions in those pieces that somehow we were involved in or even made aware of decisions around that vehicle or any of the other day-to-day business decisions are just wrong.

But I would also point out there was a sort of interesting theory in that piece that somehow the management or the administration, but even the management would want to push up the price of this vehicle to help sort of boost its revenues in advance of an IPO.  But the company has been clear.  The company is not even going to take purchases of this vehicle until after the period in which they have indicated that they’re interested in doing the IPO.

So there was some sort of logical inconsistencies in the piece that I think we looked at.  But I think more generally, this is an independent company and they’re making decisions about how to market their products.  And we have been -- we have taken a very explicit hands-off posture over the last year since they exited bankruptcy precisely because we don’t want to be involved in this.

MR. GIBBS:  Did you guys ever see “Animal House?”  Right?  Remember when they go, “Neidermeyer dead?”  I’d say his argument is largely there.

Q    What is your estimate of --

Q    Neidermeyer, dead man. 

MR. GIBBS:  Let the transcript reflect that Mr. Babington was trying to convince people that he had not seen “Animal House,” but then goes through the line rather convincingly.

Q    What is your estimate about how much the government will be able to recoup from the initial Bush administration investment?  Do you have one?

MR. GIBBS:  Look, obviously our hope is -- we think we’re going to get back the $60 billion that the Obama administration invested.  Obviously, our strong hope is to get all of that money back to ensure that the taxpayers aren’t on the hook.  And that’s why the President has put forward a crisis responsibility fee, a financial crisis responsibility fee that ensures that taxpayers are made whole.

Q    So are you saying that that initial investment is lost, the Bush administration investment is lost?

MR. GIBBS:  Look, I don’t know how much of that the companies themselves, you get back from the companies.  I think it’s important to understand that those were -- that was money that was given without the requirement to do anything.  That was one of the criticisms of that -- of those actions then, and that’s why the President demanded that the companies that -- those that work there, that everyone involved make sacrifices.  And we put both of these companies on a sure footing, business-wise.  They clearly have taken some of those actions and have changed their economic outlook.

Q    Would you say anything edgier about Charlie Rangel than you were willing to yesterday before we go?

MR. GIBBS:  No, I don’t think there’s anything to add.  I like that, though, edgier.  (Laughter.)

MR. DEESE:  The only other point on that I would say is, look, nobody can predict the future.  But if you look at the trend in the projections of the return to taxpayers from this investment, it has been consistently improving.  And so at the current moment, the Treasury Department projection is for about $60 billion to return.  But if you look at the trend, I think it has been consistently positive.

MR. GIBBS:  Thanks, guys.

11:03 A.M. EDT