whitehouse A feed from The Government Says. en-gb Copyright The Government Says 2004-2005 rss@thegovernmentsays.com rss@thegovernmentsays.com Government news 1901-01-01T00:00+00:00 1 daily http://www.whitehouse.gov/news/releases/2008/11/20081126-15.html http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Good morning, everyone. The President this morning recorded his weekly radio address. It is a message of thanksgiving to our men and women in uniform for their service and sacrifice to the American people, and to the American people for their heartfelt prayers for our men and women in service. <p /> Later this morning, at 11:15 a.m., the President will mark the 61st anniversary of the National Thanksgiving Turkey Pardoning at the White House. This ceremony first took place in 1947, during the Truman administration. The Sixth Annual Contest to Name the National Thanksgiving Turkey and its alternate took place on the White House website. The President will announce the names of the turkeys during his remarks this morning in the Rose Garden. <p /> Also later this afternoon, as you know, the President will be traveling to Camp David for the Thanksgiving holiday. This afternoon he'll -- he and Mrs. Bush will participate in an interview with Charlie Gibson at Camp David. <p /> And one thing I'd like to clarify the date on -- I think Dana told you that the President and Mrs. Bush had recorded a StoryCorps interview on NPR, and I think Dana may have said that it would be broadcast tomorrow -- or I'm sorry -- Friday. It will actually be broadcast tomorrow, on Thanksgiving Day. And so we all look forward to listening to that interview. <p /> And with that, I'll go to your questions. Ben. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Tony, two step-back questions on the economy. I'm trying to make sense of everything that's happened<p> MR. FRATTO: I can understand why it would be confusing. I think stepping back is good, to just try to remind everyone what was the problem that we were trying to solve. And the problem we were trying to solve, and continue to try to solve, is of the deteriorating capital position in our banks, banks not having enough capital to support lending. And we can get into all the reasons for that, but we'll leave that aside for now. <p /> The original plan that Treasury Secretary Paulson talked about as a way to support the amount of capital that banks need to be able to make loans was the plan to purchase troubled assets from financial institutions. They're evaluating this -- this is something that had never been done before -- and at the same time, had authority in the legislation that was passed to be able to do direct equity injections, capital injections into banks, to support the amount of capital that they need. <p /> They determined that the best way to do it was to do the capital injections. And that program seems to be working, has been successful in shoring up the balance sheets of these banks. And they're far more healthy today than they were a month ago, two months ago, and three months ago. And that's good for our whole financial system. <p /> What the Fed did yesterday was to -- and I think this is why people get confused a little bit about it, because they hear that the Fed is purchasing mortgage-backed securities, and those were some of the assets that Secretary Paulson talked about purchasing in the TARP program. What the Fed's action is doing is purchasing these securities from the government housing -- government-sponsored enterprises that are -- that deal with mortgage financing and housing. So that's Fannie Mae, Freddie Mac, Ginnie Mae, and the federal home loan banks. <p /> It is a much easier process than what was originally envisioned under the TARP program. These are all loans that generally conform to Freddie Mac and Fannie Mae standards, or the standards set by the Federal Housing Administration. They haven't been intertwined and sold off as derivatives and interest rates stripped from them and turned into lots of exotic products; they're on the books of Fannie Mae and Freddie Mac. <p /> By the Fed taking those assets and giving cash to the lenders, they are able to go back out there and buy home loans in the secondary market, and that makes more money available for home loans. And as we've seen at least in the last 24 hours, and we hope there continues to be further improvement, when you make more supply available of cash for these things, interest rates on them tend to fall. And that's a good sign. And that's something that should contribute to supporting the housing sector. And that's what we all want to see. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Well, it's not a bailout. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: What this -- look, we said that we would use every tool and every authority that we have available to make sure that we don't have a collapse in our financial sector. We're doing that. We've also said that we're going to do everything we can do and use every tool and authority that we can use to make sure that banks have enough capital to lend to consumers and businesses. And we're doing that also. <p /> So if you're an American sitting at home and you see the Federal Reserve and Treasury take this kind of action, I think you should have some confidence that they are, in fact, using all of those tools to try to support the financial sector for home loans, for auto loans, student loans, credit card lending. You've seen it also in the facilities that the Fed has created to deal with commercial paper, so that our businesses can get the liquidity that they need to do their daily operations. You've seen it in the actions that the Federal Deposit Insurance Corporation is doing in shoring up banks. <p /> This is a -- these are extraordinary efforts to try to get this financial system in a healthy position to help the economy grow. And that's the goal that all of us want, and I think that's what the American people should take away from it. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q This is also in the same vein. There's more evidence today of a deepening economic downturn -- <p> MR. FRATTO: I think we've been incredibly proactive, and I think the first question of the day was -- this was another big announcement of very large amounts of money being pumped into the economy to help the economy grow, and I think that's what you're seeing. <p /> We need to focus on what are the real problems in the economy -- and that's housing and that's the credit markets and the financial system, generally. That's what will support growth in the entire economy for now. That's what we have the tools and the authority and the appropriated funds to be able to do, and we're trying to put them to use in the most creative and effective ways; ways that will have the biggest bang for the buck for this entire economy. <p /> As for durable goods orders, they -- that was looking backward to last month, there's no question that this economy is going through a very, very difficult period because of this credit crisis that we're in. You heard Hank Paulson yesterday, Secretary Paulson, talk about the fact that the credit market for credit cards, auto loans, and other kinds of consumer financing essentially came to a stop in October. When that happens, the economy essentially grinds to a halt, and that's what reflected in the data that you're seeing today. <p /> Mark. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Tony, there's a big chart in the Post today that shows, if you add up every -- all the money committed<p> MR. FRATTO: Well, look, a lot of that funding that you see -- that you saw in those charts -- it's a great chart; it's missing -- the presentation is missing some things, and it goes back as far as our first stimulus package back in February. <p /> But getting to your point, it is a big number. A lot of this is on the Fed's balance sheet. And I think what everyone would want to see is the Fed using every tool that it has to try to deal with the magnitude of the problem confronting our economy right now. You say $7 trillion: That is a huge amount of money; it's enormous. But it is not even keeping pace with some of the declines we've seen in asset values in stock and equity markets and the housing market. So it is a big problem that calls for a very, very large response from this government. <p /> I should also remind you that the overwhelming majority, if not all of that -- again, excepting the funding for stimulus and some of the tax items they had in there -- all of the investments made by the Fed and Treasury are done in a way to earn a return back for taxpayers. So those are investments in the American economy with American tax dollars, and we expect a return, and we expect that return to come within the next few years. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: That's not a number that I'm holding to. Like I said, it includes lots of different things. It's not a number that we use. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: The Fed is independent in setting monetary policy. When they do other economic policy activities we consult with them and work with them. As you know, Secretary Paulson and Chairman Bernanke and Timothy Geithner at the New York Fed work very closely together and communicate very closely on all of these issues. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Well, just to follow up, and so you can explain to the American people where their $7 trillion <p> MR. FRATTO: Some of it comes from -- we say it comes from the Fed's balance sheet, and that's the Federal Reserve's ability to use its account with the federal government to make cash available to lending institutions. That's the traditional role of the Federal Reserve. It is using that authority in untraditional ways, but it's all fully within the laws and authorities that the Fed has available to it. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Some of it is coming from the appropriated funds from Congress. Congress passed the emergency economic -- http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: That's right, yes. And the Fed uses its balance sheet to ensure a loan against assets brought to the Fed by lending institutions and financial institutions. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: That's a decision that Secretary Paulson will make. He continues to work on programs that he thinks will be effective. If he feels that he needs to go back to Congress, he wouldn't hesitate to do so. But he's still working on the development of programs, depending on what the needs are in the financial crisis right now. <p /> Yes, Roger. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: What that means is that the Fed has the authority -- if a bank brings to it collateral, it can exchange it for cash. That's the role -- that is one of the jobs that the Fed does. <p /> All of these facilities that the Fed has created to get at this problem have different features to them. I could refer you to the Fed; they can explain each of them, how they work in more detail. But broadly speaking, they're exchanging cash for collateral, or purchasing assets out there using the cash on their balance sheet. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Ultimately it's the taxpayer. That's right. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Tony, can I go back to the original line of questioning, in a sense? As Americans get set to go<p> MR. FRATTO: Look, these are complicated problems. Look, if you have a normal economy, normally functioning economy where the financial system -- where the banking system is operating in a normal way, the Fed uses its normal authority through the Federal Open Market Committee to change interest rates, all right, and they can lower interest rates or raise interest rates, and that has an impact through the rest of the economy. We're not in a normally functioning economy right now because the financial sector is, and has been, in distress. <p /> So the Fed making money available hasn't necessarily translated into the availability of funds for consumers for their, like we said, for credit cards and auto loans and those kinds of things. That's why what the Fed is doing is taking direct action, and what Treasury is doing is taking direct action, to go directly at those markets and make sure that money is becoming available to the very people who lend to consumers and small businesses. <p /> And so that's critical, and he's trying to get through this, what economists call a transmission mechanism, right -- try to essentially bypass the transmission mechanism and go directly to those people who are lending directly to consumers. <p /> If you're an American and you're seeing your credit card rates go up, or you go to buy a car loan -- go to buy a car and you have trouble getting a loan, that is very concerning for you as an individual American. It's also very damaging to our economy as a whole. So what Americans should understand is that the announcements that came yesterday were to fix that problem, to make sure there is more money available for the people who lend them to buy goods and services, to buy homes, and that if more money is available, if there's more liquidity for those kinds of loans, that the rates will come down. <p /> That's going to take time. None of this is going to happen overnight. Even what was announced yesterday is going to take a number of months to implement, because these are very complicated and complex markets and they need to be done the right way. But we're clearly trying to take very, very aggressive action to get at that problem. <p /> Yes, Goyal. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Two questions, please. One, President-Elect Obama had been already talking during his campaign<p> MR. FRATTO: That's not something I can comment on, Goyal. I'll just tell you we're very proud of our Secretary of Defense. <p /> And your second question? http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q My second is on immigration also -- recently he said that because of immigrants played a major <p> MR. FRATTO: Yes, he does. Yes. And we would love to see Congress be able to get that done. A great deal of energy and thought went into that immigration effort. It's one of the efforts that we're most proud of in this administration and we wish we had been able to be successful with Congress. And we would encourage any future administration in Congress to take more action with immigration. It's a very, very important issue and something the President cares very deeply about. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q I have a foreign policy question. Of course I understand you're not replying on a hypothetical <p> MR. FRATTO: I don't think we're going to try to give advice, certainly not publicly, to President-Elect Obama and his team. But we do communicate very closely, and especially during this time -- I think we've spoken about this at great length from here. It's very important that we're giving them as much information as they [sic] can to do their planning and their thinking about how -- what their priorities will be for President-Elect Obama's administration. And that's what we're doing. As I said before, I think we're doing it in extraordinarily effective ways, at many levels across this government. We are committed, the President is committed to having the smoothest transition in history. <p /> So that's what we're doing every day. There are lots of communications in foreign policy and security, and also with respect to the economy, as you would expect. <p /> Roger. Another bite? http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Yes, another bite. I want to follow up on Matt's question. He asked about a second stimulus. <p> MR. FRATTO: I think that's something that the next administration and Congress will be working on; they've signaled that. Every President-elect during this period is out talking about their priorities as they introduce their Cabinet and talking about the things that they want to do. What we're focused on are, as I've said, the things that we can do right now, and these are very, very large, aggressive actions and we want to make sure that they're implemented properly. <p /> Helen. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Absolutely. I think it's clear that they are working. We've also said that none of this is going to change overnight; it is going to take time. But we have seen improvement in the commercial paper market. We've seen improvement in overnight lending. The action yesterday certainly had an impact in mortgage rates. I don't know what mortgage rates are going to do today or tomorrow, or over the coming months, but we hope that it will continue to improve conditions in those credit markets. <p /> So, we are seeing that. We're seeing banks in healthier positions, and we are seeing banks looking for opportunities to lend in what is admittedly a difficult lending environment. The economy is going through a slowdown right now, and that's not the best time to be lending, but they are looking for opportunities. And they know that if they are participating in Treasury's program for the support of their capital positions, that they should be aggressively looking for opportunities to lend. And I think they've gotten that message. <p /> Mark. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Is there anything else on the economy for right now? Let's go to John, and then Kevin. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q On the automakers, the administration sent a letter to the Hill yesterday, I think, outlining some<p> MR. FRATTO: The point of that letter -- and John is referring to a letter that came from Secretaries Bodman and Gutierrez, having to do with the issue of viability -- you remember last week when we were going through this, Congress -- Democratic congressional leaders asked the automakers to bring forth plans for viability, to show how they can be viable companies going forward if they're going to make use of taxpayer funds. <p /> The letter from Secretary Gutierrez and Secretary Bodman -- and if you don't have it, we can make it available to you, or those departments can make it available -- lays out the things that we think ought to be considered if you're going to make a determination on viability. <p /> And what we want to be sure is that if Congress is going to be discussing what viability is with respect to automakers that it is a comprehensive view, that it takes into account all costs of the automakers, short term and long term, that it deals with the full scope of that industry in making that determination. <p /> So the legislation that we have always pointed to was the Department of Energy's plan for -- we call Section 136, the alternative technology vehicle loan program -- had very, very good language in there about viability, that firms need to be able to pay back the government for the funds that they accept, and that they need to be able to show a net -- a positive net present value, that they are a firm that's worth something greater than zero. And these are the kinds of things that we think Congress should consider if they're going to go forward and think about ways to use taxpayer dollars. <p /> Kevin. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: They spoke -- to my knowledge, they spoke most recently on Monday morning, where President Bush called President-Elect Obama to discuss the Citibank actions that were taken the night before. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Look, I don't want to walk away from it. It's a very, very large number, and it should be. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I think those are connecting dots that have no business being connected. The Treasury Department, when it raises money from the -- for government spending, it sells securities. And it sells them on a global market -- it sells them here in the United States, and it sells them globally. And countries purchase those securities because they provide the best risk-adjusted rate of return in the world, and that's how they sell them. There's not a sense of borrowing from any one country. They sell securities, and they'll sell them to anyone who's willing to pay the best price for those securities and provide the best return for taxpayers. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: And I promise to come back to you, Mark, don't worry. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q We've seen estimates on budget deficit for next year of $1.5 trillion, even $2 trillion. What <p> MR. FRATTO: There are theories about that. I know there are economists who have different views on it. We've seen very large borrowing as a percentage of the federal government in the past, much larger than this. I don't know what the future is going to hold, but they are very large numbers. But the market for securities is now, much more than ever before, a global market, and so far it's been able to show that it can absorb this kind of borrowing. <p /> So there are experts out there who can tell you what the impact would be of putting more Treasury securities out there; the Treasury Department can give you their best views on that. But that's something that's very, very hard to predict and people have views on different sides on it. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Yes, that's going to be put off for some time, no question about it. But this is what you want to see -- when you're in an economic downturn, you want to see the government be able to take the actions that it can take to help to support growth. And we're in a -- not just an economic downturn, but one that's accompanied by and occurring at the same time as a financial crisis. <p /> Now, there are -- there can be problems in the future of putting that kind of lending -- making that kind of lending available, and with all of the actions that are being taken by Treasury and the Fed, you have to be very, very careful about unintended consequences. But there's one thing we are absolutely certain of, and that is if we fail to take these actions we would be dealing with a much, much more dire situation today. And so we need to balance those risks. And I think everybody's thinking of those risks, certainly the Treasury and the Fed. <p /> Mark. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q Back to Iraq, if I may, the parliament's decision to once again put off a vote on the agreement<p> MR. FRATTO: Well, I don't know if I can make that judgment. They're having lots of discussions on how they can get this agreement across the goal line, and we have faith that everyone is trying to do that. Look, Iraq has been practicing democracy for a couple years. We've been practicing it for a couple hundred years, and we have sometimes delays in the things that we try to do with our Congress, also. They're going to keep working at it. We're hopeful that it will get done. We think it should get done. It's a very good agreement. It's good for both Iraq and the United States. And so we'll keep an eye on what they're doing and hopefully they'll be able to get it across the goal line. <p /> Brianna, did you have a question? http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html Q I did. It's actually about the inauguration. Americans tightening their belts; it seems like <p> MR. FRATTO: I think I'm going to have to let the Inaugural Committee speak for themselves. But everyone is making those kinds of decisions and that's what you expect to see in an economic downturn, people readjusting their thinking on these kinds of things. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Well, we still want Americans to be able to celebrate their holidays. Lots of Americans will be doing it tomorrow. Lots of Americans will be getting help from other Americans to celebrate their holidays tomorrow. And there are governments that do it, there's great philanthropy and charity work that helps Americans during the holiday season. And that's what we really like to see. <p /> Jim. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: A question you were asked -- you're disowning the question preemptively. (Laughter.) http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I was going to -- http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I think on instruction from White House Counsel I have to refer all turkey pardoning questions to the Office of the Pardon Attorney. (Laughter.) <p /> Has he ever considered not -- you want that turkey, don't you? http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Exactly. <p /> Victoria. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I don't. I saw those reports and I haven't had a chance to discuss it with anyone this morning. <p /> Yes, Les. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Competition for you. (Laughter.) http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I haven't had that conversation with the President; I don't know. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Yes. He will rule that out, yes. <p /> Wait, there's one last question. I'm sorry. http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Well, that's what we did, obviously, during the -- earlier this year. Right now -- http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: I'm sorry? http://www.whitehouse.gov/news/releases/2008/11/20081126-4.html MR. FRATTO: Well, look, I think right now we are using the tools of government to put more money available for taxpayers into places that are most needed, and that's in housing and our consumer credit markets. So that's what we're focused on. <p /> Thank you. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: We are on our way to Fort Campbell, Kentucky. The President will make remarks to thank military personnel who have recently returned from Iraq or Afghanistan, and the families who have supported them. And he will discuss the importance of the global war on terror and how these brave men and women have worked to keep Americans safe. <p /> He will then have lunch with military personnel at the Son Cafe. He'll have lunch with a group of about 150 soldiers, many of whom have recently returned from either Iraq or Afghanistan. That will be pool at the top, and the remarks are, of course, open. <p /> One note: Today, Secretary Peters of the Transportation Department, will deliver a speech scheduled this morning in Atlanta, Georgia, to outline the administration's accomplishments in creating a new transportation agenda entirely focused on reducing transportation congestion and improving urban mobility, and to announce a new congestion reduction grant for Atlanta. And she will also call for the kind of transportation reforms needed to actually deliver meaningful progress on traffic. <p /> A fun note: Today is the last day to get your vote in to name the National Thanksgiving Turkey. So band together, send in your vote to whitehouse.gov. And then also, just a note for you. You remember, I think it was about a week ago, or two, the President taped an interview for StoryCorps, which will run on NPR on Friday, as part of StoryCorps' National Day of Listening. This is the interview that Doro did of the President and Mrs. Bush. <p /> Traveling on Air Force One today, Representative Ed Whitfield of Tennessee*, and also Zach Wamp of Tennessee. <p /> And with that, I can take your questions. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: Is there a question? (Laughter.) Do you guys have any questions? http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: Well, we support the actions of the Fed today, and the Treasury Department. This effort will significantly help the housing market and increase the availability of home loans and affordable -- increase the availability of home loans at affordable rates. <p /> And then the Treasury Department is today announcing that it and the Federal Reserve will have a new program to free up lending to consumers and small businesses. The consumer lending facility that they're creating will provide liquidity to banks that will provide for small business loans, consumer loans such as autos, student loans, and credit cards. <p /> The market of this kind of credit slowed significantly in October, and it was the main reason that we said that we needed the rescue package. And so Secretary Paulson is holding a news conference, I think right now, so when you get on the ground he'll have more details for you about how the program works. But we believe it's important to free up credit and that this is another step that we can take to try to help the situation. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: You'll have to connect with the Treasury Department for sure, but as you heard both the President and President-Elect Obama say yesterday, that they're keeping each other informed and their staffs are working closely together. I can't imagine a situation -- a scenario where they would not have been informed. We are working hand-in-glove with them. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: I wasn't on the phone call. But I mean, they're talking all the time. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: I don't have anything on that. No, I would not comment. And I saw reports about that. President Bush doesn't recall anything of that sort. So that's all I'd have to say on it. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: This story has been out there for a while. It's been circulating around. I don't know why all of a sudden everybody is writing about it, because -- maybe they read it on a blog or something. I don't know. <p /> Is that it? Oh, sorry. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: I think that Tony Fratto responded to you, so you should have his response. And, look, the numbers are what they are, which is they're troubling, and this is why we are having to act and take such bold actions that we are taking. <p /> We think that one of the reasons that the data showed a decline was that consumers pulled back on spending, and we think a lot of that was because of the credit crisis, which is why we are so focused on unfreezing credit markets, and another reason why the Treasury and the Fed Reserve continue to try to find ways to fix the problem, as they're announcing right now as we speak. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: We're hopeful. They've had a lot of debate in their country. And I think that if you look at the violence that took place there yesterday that was indiscriminate and killed many people, that it reminds us that the Iraqis have come a long way, but they're not quite there yet to be able to take care of all their security needs on their own. And they need -- they continue to need our support. That's what Prime Minister Maliki has said, their Defense Ministry, amongst others. But they'll have their debate. And this is the process that we knew was going to take a while. But we remain hopeful that the council of representatives will pass it out tomorrow. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: Of course we have Ambassador Crocker, who's leading the negotiations there and talking to both members of our Congress to the extent that they get briefings and they have questions. But of course, we're talking to members of the parliament there in Iraq and making the case. But it's being all led by Ambassador Crocker. http://www.whitehouse.gov/news/releases/2008/11/20081125.html MS. PERINO: That's right. Here at Fort Campbell -- http://www.whitehouse.gov/news/releases/2008/11/20081124-2.html http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Good morning, everyone. And those of you who were traveling to South America, welcome back. <p /> The President early this afternoon will have a photo opportunity with recipients of the 2008 Nobel Awards. These are the American Nobel Laureates. The recipients who will be here are Dr. Martin Chalfie, the Chemistry Prize Laureate; Dr. Roger Tsien, Chemistry Prize Laureate also; and Dr. Paul Krugman, Economics Prize Laureate. <p /> Later this afternoon the President will meet with Prime Minister Olmert of Israel. The President looks forward to discussing with the Prime Minister the strong bilateral relationship between the United States and Israel, our continuing mutual efforts to bring peace to the Middle East, and a wide range of regional and international issues. <p /> And you just saw the President earlier, after his meeting with Treasury Secretary Paulson and some other Cabinet officials -- meeting in preparation for the U.S.-China Strategic Economic Dialogue over at the Treasury Department, and you have the President's comments. <p /> And with that, I'll take your questions. Jennifer. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: We would never foreshadow any specific actions involving private firms. But I think it's safe to say that it's a very strong message from the President and from -- the joint statement from Treasury, the Fed, and the FDIC last night, that we take threats to our financial system seriously and we stand ready to take any steps necessary to prevent systemic events in our economy. And that was one that they announced last night; I think it's been told in the letter you're reporting overnight and this morning that a lot of work went into this over the weekend, people working into the late hours. I think they did a background briefing at midnight. I don't know if that's unprecedented, but I know they're trying to be as clear as possible with what they're doing to try to deal with potential systemic events in the economy. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: I think that's a really good point -- actually, I mean, just in the context of your question -- at that time, when we dealt with Bear Stearns, we were dealing with single, individual firms in almost a one-off way to stem what was then the early stages of a financial crisis. Since we put in place the TARP program and $700 billion, I don't think it should come as any surprise to anybody that this is an ongoing effort; that we did ask for $700 billion to deal with this financial crisis and that's what we have available to deal with it. <p /> We don't want to wait until firms are in fact failing and it's impossible to rescue them. We want to prevent those events from taking place and limit -- not just limit damage to the economy, but also, remember, to support the capital positions of these banks so that they can play the very critical role they play in the economy, which is to be out there making loans and taking bets on America. <p /> Mike. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: That's okay, Bill. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Well, look, we've been trying -- we've tried to be focused on all of the efforts that we've taken to support the economy, certainly over the past year. We've done one large stimulus package already. We've taken historic actions with respect to the housing sector to prevent millions of foreclosures. We've taken historic efforts with respect to the financial crisis and the $700 billion plan and all the efforts that the Fed and the FDIC are doing to shore up our financial system. <p /> That's what we've been focused on for now. For right now that is the most important thing we can do for the economy is to put those appropriated funds to use in a way that will support credit in our system and allow the economy to function. <p /> The next administration has a lot of decisions to make. And they have policies that they are looking at, but what we're focused on right now are implementing the authorities that we have to support the economy in the best way possible. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Look, I'm not going to comment on what the next administration thinks they need to be doing. The best thing we can be doing right now and for the time that we have here to do for the economy is to shore up our financial system. That's what we have the authority to do and that's what we have the funding to do, and that's what we can get done right now. <p /> Yes, Mark. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Well, not at all. I mean, what these efforts are doing are to prevent the financial system from failing. It's never been about any one particular company. We let thousands of companies fail in this economy every year. It's a -- actually, an important part of a healthy company is to have companies competing against each other, and some of them fail, and the winners win, and that's good. <p /> But when you have systemically large companies that can bring down not just the entire U.S. financial system but the global financial system, and have a devastating effect on our broader economy, the government has to step in. And so we have an obligation to preserve that very important part of our economy, and that supports the free market system. Our firms can't get out there and do trade if they don't have trade financing. Firms can't get out there and distribute funds to their -- to companies who distribute products here and around the world if they don't have overnight credit financing. <p /> So that part of our economy is critical. We need to keep it in place; we need it to be strong; we need it to fill all of the holes in our economy that need financing in order to be able to do their business in a free and open economy. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: That they will lend? That's the business they're in, and the banks have no -- http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Well, look, I think we're pretty confident in the guidance that we've given to banks to get out there and lend. They actually have been lending. They've had to shore up their balance sheets to make sure that they're in a good position. But banks only make money one way, and that's to be out there lending and making loans. <p /> Now, it's a very difficult economy we're in right now, so there's a question of the demand side of people requesting loans from banks also and whether there are good bets out there. We want them to make good business decisions. But banks are only in the business of lending, so they can't be profitable companies going forward unless they are looking for opportunities to lend. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: We are helping the automakers -- or at least we have a plan to help the automakers. We had a bipartisan agreement on the floor of Congress -- well, actually, it never made it to the floor because the Democratic leadership decided not to bring it to the floor. But we had a bipartisan agreement that we believe would get bipartisan support. It was for $25 billion in the loan program that would have freed up that money in a way that would support the automakers in their efforts -- to help to support them as they become viable firms, because these are important parts of our manufacturing base. We want to see the automakers succeed. <p /> There seems to be some misconception out there that we don't want to help the automakers. We do want to help the automakers. We had a bipartisan agreement to do just that, and we believe that's where those funds should come from. And by the way, the news overnight where -- this was a relatively unexpected effort by Treasury and the Fed. If you had said two weeks ago that they were going to have to take this action for Citibank, I think that would have seemed unlikely. This is a very dynamic situation we're dealing with, and the financial system is still fragile. <p /> But that also speaks to the need to preserve the funds in the TARP for their intended purpose. We don't need to be taking funds out of the TARP program for other purposes -- and with respect to the automakers, especially when we have a $25 billion loan program that was specifically set up for their use. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: That's a question for Congress, Helen. The money is there; we tried to work on both sides of the aisle to design it in a way that the automakers could access it and to help them move forward and be viable. So I would put that question to the Democratic leadership of the Congress. <p /> John. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html Q Tony, on Friday the stock market rallied when Obama named Geithner as his choice for Treasury Secretary<p> MR. FRATTO: I would just say we have great respect for Tim Geithner. I've been able to watch his work for the past eight years, and when I worked at Treasury, I learned a lot about his work prior to my time there. He's obviously exceptionally talented and a very smart, and ably led the New York Fed these past number of years. <p /> I'm not aware of any request for the President to do anything special with respect to nominations from President-elect Obama's team. So it is -- I don't want to speculate on sort of hypothetical requests. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Of? http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: We would never do anything with respect to President-elect Obama's nominations without discussing it with them. <p /> Matt. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: No, he spoke to President-elect Obama this morning. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: I'm not going to read out President-elect Obama's side of the conversation; you can check in with his transition team for that. But the President wanted to make sure that President-elect Obama knew everything we were doing and that we maintain a very high level of communications between this administration and the incoming administration. It's very important that we're on the same page on all of this and -- but I'm not going to speak to the President-elect's views on any specific policy action. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: President Bush did. <p /> Wendell. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html Q You said, and the President, as well, that today's action sends a message that you stand ready <p> MR. FRATTO: I don't -- http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: I don't think I said two weeks ago it was considered one of the strongest in the country. I don't think I made that kind of judgment with respect to them. I just said that an action like this was not something that I think most people would have anticipated. <p /> Look, I think what it says is we're dealing with a financial crisis that is unprecedented and a government -- a federal government policy response that is unprecedented. And you're going to not see improvement in a smooth or straight line all the time with the various parts of it. <p /> Now, we have seen progress with respect to overnight lending, and bank lending rates have improved and the volume of bank lending has improved, and that's good. But it's not going to be a straight line. The road isn't always going to be smooth. But we are going to continue to look for creative ways to make sure that the financial sector can return and play the very important traditional role it plays. http://www.whitehouse.gov/news/releases/2008/11/20081124-1.html MR. FRATTO: Look, we're seeing an improvement in the -- on the balance sheets of a lot of these very important banks. We've seen some banks that are weak have found opportunities to merge with banks that are stronger. They're improving their balance sheets. They're improving their capital positions. And as I said earlier, that when they see opportunities and they have the balance sheet that will allow them to take risk and they see opportunity in the economy, they're going to get out there and start lending again. Like I said, that's the only business they're in, is to lend money to consumers and businesses. And so we expect them to return to that. <p /> Yes, Roger.