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Press Briefing by Tony Fratto
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For Immediate Release Office of the Press Secretary July 10, 2008

Press Briefing by Tony Fratto James S. Brady Press Briefing Room

˙ /news/releases/2008/07/20080710.wm.v.html ˙˙Press Briefings
˙˙Audio


12:15 P.M. EDT

MR. FRATTO: Good afternoon, everyone. A couple things for you. General
Petraeus and General Odierno -- we're expecting votes on the two generals
on the floor this afternoon. I think we just heard it will be at 2:00 p.m.
on the Senate. So, you know, very hopeful that the Senate will confirm both
General Petraeus and General Odierno -- General Odierno as the new
multinational force commander in Iraq, and General Petraeus as the
commander of Central Command.

While serving in Iraq, General Petraeus and General Odierno have proven to
be two of the finest military leaders in our nation's history. The
President is confident that they are the best men to serve in these
positions. They will both do an excellent job in leading our troops to
confront challenges in the war on terror and helping to keep our nation
safe. And so we look forward to a vote in the Senate floor this afternoon.

Also, I know I heard from a lot of you after you saw the Senate vote
yesterday, after the successful passage of the FISA bill, the vote on the
Medicare physician reimbursement bill. As you know, we had a senior
advisor's veto threat out on this bill, and we had a SAP that spelled out
all of our objections to this bill. And the questions I know I received
were, does the President still intend to veto this bill? And the answer is
yes. Our concerns with this bill -- actually, let me back off and just talk
about -- one of the goals of this bill was to ensure that physicians get
their reimbursements. If the President want to -- wanted to see and wants
to see physicians get their full reimbursement. That was never an issue in
this whole debate.

What became an issue was how the Senate and how the Congress chose to pay
for this bill, and the way they did it was to make very steep cuts in the
Medicare Advantage plan. Our view has always been that we trust customers
to make -- consumers to make smart choices. We want to make sure that they
have the information and that they have choices. Taking choices away from
seniors in order to pay for the reimbursement for physicians is the wrong
way to pass this bill and to extend the reimbursements that we want to see
physicians get.

So we're disappointed in that vote. The President does intend to veto it
for that reason. We're concerned about the impact of that should this bill
eventually become law. We expect that one of the impacts of this bill is it
will remove about 2 million seniors from a wildly popular Medicare
Advantage private plan. We don't want to see choices being removed from the
9.6 million seniors who are in this program, and our estimates lead us to
expect that as many as 2 million seniors will have to drop off the Medicare
Advantage program, and that's the wrong way to do it.

Questions.

Q Iran's state television says that there was more missile tests today.
Does the United States have any indication that that test did not happen or
did happen?

MR. FRATTO: I don't have any -- I don't have our own -- U.S. government
verification that there were any additional tests. I think, you know, that
-- but they did test the day before. That --

Q I'm asking -- the United States watches what happens around the world,
particularly in a place like Iran.

MR. FRATTO: No, I understand, Terry, and all I'm saying is that I can't --
it's nothing that I can confirm right now, and maybe that's something that
can happen later. But on the subject of testing missiles, you know, the --
nothing changes with respect to the way the Iraqi government is putting the
Iraqi people in a very isolated position -- I'm sorry, the Iranian people
in an isolated position because of these tests in defiance of the
international community.

This -- these are -- these tests are in violation of -- or the expanded use
of ballistic missiles are in violation of U.N. Security Council
resolutions. We are dealing with the threats in Iran in a very direct way
through the P5-plus-1 process. We have -- Mr. Solana will be in Iran next
week to continue these discussions. We want to see them stop enriching
uranium, and we'd like to see them stop these provocative tests that only
further isolate the Iranian people.

Q It seems odd that in the time between the gaggle and now you haven't been
able to confirm the tests, because we've seen purported video of the test.

MR. FRATTO: We've also seen, you know, Photoshopped pictures on the
internet of missile tests. Yes, I --

Q If I'm not mistaken, the intelligence people are talking about it to some
other reporters.

MR. FRATTO: Yes, I checked, Bill, and I wasn't able to get confirmation on
that.

Yes, Goyal.

Q Two quick questions. One, do you have any idea who is helping Iran in
their mission to get the nuclear and missile technologies?

MR. FRATTO: Not beyond -- I can't speak beyond the people named in official
sanctions. There are individuals and entities named in U.N. Security
Council sanctions. I can't go beyond that.

Q And second, as far as President meeting with Prime Minister of India and
also discussing about civil nuclear agreement between India and the United
States --

MR. FRATTO: Yes.

Q As far as the nuclear deal is concerned, it may not be in trouble because
it will go through in India because -- but the government of Prime Minister
Manmohan Singh is in trouble -- the government may fall any time. What I'm
asking you is that, if it was discussed with the President that if
President is going to help India as far as (inaudible) Nuclear Suppliers
Group is concerned to get this deal through.

MR. FRATTO: I wasn't there when -- you know, at their bilateral meeting. I
would be -- I understand that they did talk about the nuclear deal. On that
specific, that's not something I could confirm, but we do appreciate Prime
Minister Singh's willingness to move forward with this deal. It's a
historic agreement, this strategic partnership, and we think the initiative
will help strengthen global nonproliferation efforts. So it's a positive
thing and we appreciate the commitment by the Prime Minister.

Mike.

Q On Iran -- I realize you can't confirm the second test, but at the very
least it looks like Iran and Israel are kind of flexing muscles back and
forth, with the missile test, and then the Israelis come with the new
plane, and there's kind of a war of words underway already. Is the
President concerned about the tone between these countries? And is he
concerned that perhaps more needs to be done than just sending Solana next
week to Tehran?

MR. FRATTO: No, look, I think -- Secretary Gates characterized it as
sending signals yesterday. That was his take on it. I don't have any reason
to have a different view on that. The bottom line is, though, that what we
are focused on is the bigger picture of trying to encourage the Iranian
regime to join the international community and deal with these very real
concerns that we all have. Remember that the -- you know, the Security
Council resolutions dealing with Iran were unanimous votes in the U.N.
Security Council.

The world stands united on this. The President, in his bilateral meetings
and meetings at the G8 meetings over the recent days, Iran was a point of
discussion. His visit to Europe a few weeks ago Iran was an important part
of discussion. We saw the European Community move forward with sanctions.
What our goal is is to use diplomacy as best as possible to bring Iran to
the table in a way that we can resolve this peacefully.

And we know that from time to time that things like missile tests or
movements in the Persian Gulf of ships and so forth are going to take
place. We don't want to be distracted by that and try to stay focused on
the diplomatic efforts, which we think, if we stick together with our
allies on this, that we can be successful.

Q But is there a concern with hostile countries carrying out war games in
close proximity that there could be a mistake or a misinterpretation of
something that leads to something very real?

MR. FRATTO: We hope that's not the case. We hope that there's sufficient
communication from everyone involved, and that they're seeing these things
in a clear-headed way, and thinking in a clear-headed way also.

Matt.

Q With tensions increasing between Russia and Georgia, is there any plans
for the President to speak directly to Russian President Medvedev to try to
calm the situation?

MR. FRATTO: Not that I'm aware of. I know that they spoke recently in
Japan, and Secretary Rice of course is in Georgia -- I'm not sure if she's
left yet. Secretary Rice will report back to the President on her views on
that, but I don't have anything on expected talks between -- additional
talks between the President and President Medvedev.

Q Is President Bush pleased that Barack Obama voted for FISA yesterday?

MR. FRATTO: We would have like to have seen a 100-0 vote for FISA, because
it's such an outstanding bill, it's an important bill. I'm not going to
comment on any one member's vote for it; they can answer for themselves as
to why they voted for it and what the thinking was. We would have liked to
have seen every member vote for it.

Q Does he have any thoughts, perhaps, on why he was able to win over some
Democrats, such as Barack Obama, who before indicated that they wouldn't
vote for it?

MR. FRATTO: I don't have a comment on what Senator Obama's thinking was on
it. But there were a large number of Democrats who voted for the FISA bill,
and we think for very good reasons. And one of the leaders in crafting this
bill and crafting an earlier bill was Senator Jay Rockefeller, for example.
And there was great bipartisan cooperation on this to make sure that it
gave the intelligence community the tools they need, but also significantly
protected civil liberties. And that was something that was important to us
also.

So this bill was, you know, very -- thoroughly debated. It was negotiated
by very serious people from both sides of the aisle for a great deal of
time, and really going through every word in this document to make sure
that it accomplishes what we think is necessary for the country to keep it
safe, but again also to protect civil liberties. And I think that's
something that people on both sides of the aisle felt that they could
support, and we saw that in a very strong vote yesterday.

Yes, John. Okay, then I'll get you next.

Q Any look ahead to the event tomorrow on the economy and --

MR. FRATTO: Yes, I think it'll be a good opportunity to get a review of
what we're seeing in the economy today, both in the real economy -- I think
I mentioned in the gaggle this morning that we're getting down to the last
days of the stimulus checks that have gone out. So maybe we can get -- the
President will have an opportunity to get a little better reading from
Secretary Paulson and his other economic advisors.

We're going to be at the Energy Department. That's no -- that's by design.
We want to be there to talk about what's going on with energy markets and
oil and to -- and the opportunity to help bring down prices and increase
supply here domestically. So the President will have a chance to talk about
those issues, also the Outer Continental Shelf and refinery issues that you
heard him spoke about -- speak about not too long ago. So it'll be a good
review, but they'll certainly focus on energy.

Yes, Kevin.

Q Speaking of that, Tony, there's been some talk on the Hill about maybe
accessing some of the SPR -- just putting extra oil in the marketplace to
drive down -- looking at nearly $5 a gallon for most people at this point.
Has there been any consideration for that?

MR. FRATTO: Look, I think it's good that there are members who are
interested in increasing supply of oil here. I think what's disappointing
is that the only place they can seem to want to access that supply is in
this storage of oil that we set aside for dealing with national
emergencies.

Now, there are other supplies of oil out there that we'd like to access,
and that's the Outer Continental Shelf and ANWR. And these are places that,
were we able to explore and eventually bring to market oil from these
sources, that have a long-term impact on prices, rather than some, you
know, very minimal short-term impact on prices -- and at the expense of a
resource that is here for us to deal with an emergency. We did it dealing
with an emergency after Katrina, where we had a supply disruption. If there
were an attack on a major pipeline somewhere that would disrupt global
supplies of oil, that's what those -- that's what the Strategic Petroleum
Reserve is for.

It is not there to try to market-time and to try to manipulate prices in
the market. And unless you wanted to do very large withdrawals of the --
from the fund, it wouldn't have a lasting impact on oil prices. So we'd
like to see members think a little bit more long term and take advantage of
the opportunity that we have to do drilling from our domestic sources.

Q Would you do short- and long-term then?

MR. FRATTO: I'll come to you next, Ann.

Q Would you want to do sort of a concert thing -- take some from SPR and if
-- (laughter) -- in one hand watches the other, they say, okay, maybe we
can get a little bit of ANWR, let's get some oil in the market place now
because it's hurting families, it's hurting people, and they need it in the
short term.

MR. FRATTO: Yes, I haven't heard that discussed, but you do -- you are
obliquely talking about something that we have heard members who may have
previously been against opportunities for drilling, and we're getting some
signals that they may be interested in looking for ways that we can find a
way to increase exploration and drilling in some of the areas that the
President talked about. And that would be a good sign because we would like
to try to get something done on this issue.

Yes, Ann.

Q Has President Bush been told that $4 a gallon is now the new normal? Does
he expect prices to fall below --

MR. FRATTO: We heard it's not the new normal. He hasn't heard -- no one has
--

Q Start -- with a cup in your --

MR. FRATTO: Sorry, Ann --

Q We can hear you better without a cup of water. (Laughter.)

MR. FRATTO: I don't think anyone would have told the President that $4 a
gallon is the new normal, and we certainly hope it's not the new normal. It
is very, very difficult to try to predict gasoline prices as to where
they're going in the future. No one was predicting that we would continue
to see gasoline prices increase beyond where they are today.

Q So does President Bush believe that gasoline prices may fall below $4 or
go back to $3 or back to $2?

MR. FRATTO: No, no, the President isn't making those kinds of predictions.
What he's saying is that we have a situation where we have rapidly
increasing and increasing for, you know, pretty much as far as we can see,
global demand for oil. And right now as long as we keep the sources of oil
off the market, we're not going to see increases in supply. And as anyone
who has taken an Econ 101 course knows, that if you don't increase supply
and you only increase demand, prices are going to rise.

Q Does the President believe the price of gas -- there is a chance it would
drop below $4 a gallon?

MR. FRATTO: All I could say is that we would be hopeful that it could, but
the best way to ensure that it does is that we take some of these necessary
measures and send a signal to the market that we intend to bring supply on
and that we intend to continue as we've done on the conservation side
through increased fuel economy standards and through the increased use of
alternative fuels, so that we can try to lower the demand on oil as we're
increasing supply.

Q Tony --

MR. FRATTO: I'm going to go to April, Les, and I'll come back to you.

Q Okay, thank you.

Q Tony, going back to the economy and the stimulus checks, you said this is
the last week that they're getting them. Now is this for the group that
paid their taxes on time by the April 15th deadline, because I understand
that the stimulus checks -- there's still more stimulus checks for like the
elderly who filed late, what have you.

MR. FRATTO: Yes, that's a really good point. I'm actually glad you brought
that up. No, this is on the regular run of stimulus checks, the sort of
universe of people who had already filed tax returns. There are a not
insubstantial number of seniors and veterans out there who we've been
trying to encourage, and I know the IRS has been trying to reach out to
them to -- these are individuals who don't ordinarily file an income tax
return, and we've been trying to encourage them to file an income tax
return even if they don't have reportable income, so that they can take
advantage of this stimulus check and make sure that they get it.

Q As I understand it, Tony, if someone would file late but still file, they
would still get their stimulus check, too?

MR. FRATTO: Oh, yes, absolutely.

Q Okay. And now on New Orleans really fast.

MR. FRATTO: On the -- New Orleans, yes.

Q New Orleans, Census Bureau stats. What do you attribute that to, as the
population is still down, but the city is growing?

MR. FRATTO: Yes. I think we would need either New Orleans officials or
Census Bureau officials to give you an authoritative answer on that, but
remember you had a large outflow of people into New Orleans, and it could
be the flow back of people returning to New Orleans who -- that are showing
up in that rapid increase. But, you know, we know New Orleans is a
wonderful place. It's a wonderful part of the country. It's an incredibly
beautiful and historic city, and want to see it returning. We are trying to
make sure that it always has -- that it has the resources necessary to
rebuild after the hurricanes and that -- you know, for another additional
few hundred years on its history that it remains a great destination not
just for people at conventions and Super Bowls, but also people to live.
And so that was a -- that was good news to see, certainly.

Q Will this be a blemish on the President's legacy, even though it's -- I
mean, we have six months left and this was one of the worst tragedies that
happened during his presidency. Will this -- do you think that within this
time he can turn the mind-set around, where people will not look at this as
a blemish on his presidency?

MR. FRATTO: I think there's a lot of history to be written on -- with
respect to Katrina. It was a -- you know, obviously a devastating storm. It
was devastating to the people of that region. It exposed some weaknesses in
our ability to deal with a natural disaster of that size and scope. I'm not
sure that at any time that a federal government and state government and
local governments would have had the capacity to deal with that kind of
storm, but one thing that I hope is part of the legacy is what was learned
from that storm of what's needed to be able to respond to large natural
disasters.

And I think we saw that FEMA's response to the Midwest floods, where I
think all of the local communities and states were noting FEMA's terrific
response in that region -- not just FEMA, but all of the other agencies --
DHS and the Small Business Administration and HHS and Department of
Agriculture who were all working together, well coordinated, and being able
to deal with these large natural disasters.

So that was, you know, something good that comes out of it. We want to see
New Orleans rebuilt and the residents can continue to be proud of their
city.

Yes, Les.

Q Thank you very much, Tony. Two questions. First, does the President agree
or disagree with what Fox News reported of Senator McCain's questioning the
credentials of Bill Clinton to discuss the mental health of prisoners of
war?

MR. FRATTO: I'm not aware that the President knows of that issue, so I have
nothing on that.

Q Does the President believe it was right for The Washington Post, for The
New York Times, and The Washington Times to have all --

MR. FRATTO: Are any of them here to defend themselves? Doesn't look like
it. (Laughter.)

Q -- no -- to have all censored what The New York Post reported as the
threat of castration? (Laughter.)

MR. FRATTO: That's for your industry to work out.

Q Thank you.

MR. FRATTO: Thank you.

END 12:38 P.M. EDT
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