Press Briefing by Press Secretary Ari Fleischer, August 22, 2001

Crawford Elementary School

Crawford, Texas

12:32 P.M. CDT

MR. FLEISCHER: Good afternoon. For those new here, welcome to Crawford. For those of you who have been here, I hope you continue to enjoy your stay.

The President this morning spoke with President Fox of Mexico. The two leaders spoke for approximately 20 minutes. They discussed the economic situation in Argentina. They both expressed their desire for sustainability in the region and particularly in Argentina. They are going to continue their efforts to work with both Argentina and the International Monetary Fund. They welcome the movement and the progress that has been made in bringing economic relief to Argentina.

They also talked about the forthcoming trip of President Fox to Washington for what will of course be President Bush's first state visit. The President is very honored that the first foreign leader who will come for an official visit -- state visit will be President Fox of our good neighbor, Mexico.

Also today, I want to just bring to everybody's attention, the President is very pleased that this morning the administration is releasing the Mid-Session Review. The Mid-Session Review, as you know, is a summary of the economic outlook for the next 10 years. It's a snapshot, as well, of the state of the economy and the state of the budget, and the President is very pleased to note how strong the state of the budget is.

Under this analysis, it's clear that the government has the second largest surplus in history. At the same time, the economy is weakening, yet the federal budget is enjoying the second largest surplus in history. That's a sign of the strength of the budget. Despite the fiscal downturn in the budget makes very clear and the President is very pleased that there will be a second largest surplus in history, even after taking into account the increases in spending for education that the President has sought, the increases in spending for defense that the President has sought, as well, of course, as the tax cut that is now the law of the land that the President believes very strongly will result in more growth, which will lead to higher surpluses down the road.

And, with that, I'm more than pleased to take anybody's questions.


 * Q Ari, can you -- about the President's consideration for the Joint Chiefs of Staff -- reports that he selected Myers?


 * MR. FLEISCHER: As you know, I will not speculate on anything involving personnel. This Friday, the President will be welcoming to the ranch in Crawford a group of defense experts for part of the ongoing discussions of the military transformation of the strategic reviews that have been under way. This is part of a series of meetings that the President has had, some at the White House, some at the Pentagon, and this Friday in Crawford. So there will be a group of distinguished military experts, experts from the National Security Council, the Secretary of Defense and others who will be joining the President in Crawford for these discussions.


 * Q Myers?


 * MR. FLEISCHER: General Myers will be one of the people attending. He has been in attendance at these meetings. He is one of the key people involved in the military transformation.


 * Q But apart from speculating on personnel matters, has the President -- do you know, has the President made a decision?


 * MR. FLEISCHER: Yes, he has.


 * Q Is it General Meyers?


 * MR. FLEISCHER: I am not going to speculate on who the President's decision is.


 * Q That's not speculation if you know.


 * MR. FLEISCHER: The President will --


 * Q You just don't want to tell us.


 * MR. FLEISCHER: At any time that the President has an announcement to make about personnel, that will be something that the President will want to share with the American people himself.


 * Q When will he do that?


 * MR. FLEISCHER: As soon as we have final word, we will advise the Press Corps when any type of presidential announcement will be.


 * Q -- during those talks.


 * MR. FLEISCHER: I'm sorry, it's hard to hear in this room.


 * Q We will be seeing the President on Friday during the defense talks?


 * MR. FLEISCHER: We'll be announcing any events as the schedule gets added onto. For tomorrow, for example, later today we will let reporters know if there is going to be any presidential movement off the ranch. We will advise you if there are any lids of any type.


 * So just stay tuned, and we will advise you if there is anything that is going to require you to leave the Crawford Filing Center or any other events in Crawford.


 * Q The deal that was announced last night by the IMF for Argentina included encouragement from the IMF for Argentina to restructure its debts. What does this tell us about the administration's approach to bailouts, vis a vis the IMF going forward?


 * MR. FLEISCHER: Well, the new agreement includes some specific measures that are designed to buttress Argentina's implementation of its zero deficit plan. And we are pursuing also -- the United States government is pursuing trade liberalization with Argentina. This package and the efforts the IMF has been working on directly with the Argentinean government are all aimed at working upon a sustainable debt profile for Argentina. I would refer you to Treasury for any additional details beyond that.


 * But the President thinks it's very important to continue work with the IMF, work with Argentina, to help Argentina to help itself.


 * Q Ari, Mitch said today, in his briefing, that about $5 billion in corporate tax revenue is going to arrive essentially ahead of schedule. He said, maybe some of the corporate heads didn't get the memorandum that corporate taxes weren't due until the next fiscal year. This obviously has an effect on your overall budget situation. I'm wondering at any time, did the President or anyone in the administration, request of any specific corporation to pay their taxes ahead of time?


 * MR. FLEISCHER: Did the administration request that they do what ahead of time?


 * Q Pay their corporate taxes ahead of time.


 * MR. FLEISCHER: Not that I'm aware of. But that's not uncommon for any time there is a deadline -- in this case, October 1st -- of when taxes are due, that some payments fall before it, some payments fall after it. It's not uncommon at all.


 * As you can imagine, any time there is any calendar-driven deadline, some actions can fall before it, some after it. The bulk of the corporate tax payments would be made in fiscal 2002. A small portion would come in, because some corporations have their programs to set up to pay it on the previous schedule. And even though they are allowed to pay it later, they choose not to. For them, it's just a short number of days, really, that's a difference.


 * Q In the conversation with President Fox, did they discuss immigration, and can you generally summarize for us the pace and specificity of what they hope to talk about, vis a vis immigration, at the state visit?


 * MR. FLEISCHER: President Bush and President Fox did discuss the topic of immigration and they both agreed that it was very important and it will be a welcome change in US-Mexico relations to have a system in place that can welcome immigrants to the United States in a safer, a more legal, and a more humane manner. President Bush is very concerned about people who have lost their lives trying to find a better life coming to the United States. President Bush recognizes that there are many employers in many parts of our society that benefit from having immigrants come to the United States and work in this country. We are a richer nation for it.


 * The President is working with the government of Mexico. There is a Cabinet-level group that is working with their counterparts in Mexico and I'm not going to get into any more specifics than that. But the President does view immigration as a major strength for the United States and as a border governor, the President has seen the wonderful strength of immigrants to the United States. The Hispanic community has thrived in Texas, has thrived in the United States.


 * Q If not about specifics, how about timing? If it's so important, what is the time frame the President would like to pursue this with Congress?


 * MR. FLEISCHER: President Fox of Mexico will be here in just a short number of weeks and it's possible that you can anticipate some further announcements when President Fox is here.


 * Q Ari, how do you square the accounting for the corporate income taxes -- they come in early this year -- with the decision on Social Security to recognize those revisions in the years for which they occurred? I mean, it seems as though, when it advantages you, you're taking it this year, and when it disadvantages, you're putting it into the past.


 * MR. FLEISCHER: They are perfectly consistent. It's a measure of exactly when did the money come into the government. And the fact of the matter is, an estimated $5 billion in corporate receipts is going to come in prior to October 1st. That's when the money is received by the government.


 * In the case of Social Security, the money came in in 1998, 1999 and 2000. It would have been artificial to change the books to say that the money came in in 2001 as some of the Democrats are suggesting. The money did not come in in 2001, in the case of the Social Security changes that were made, to make certain that the counting is done in the most accurate fashion.


 * Q But the corporate money is intended for fiscal 2002, isn't it?


 * MR. FLEISCHER: But it's always a question of receipt date. That's how it's always worked in budgeting. It's a question of did the money come in prior to or after a deadline. If it comes in before the deadline, it must be counted in the year in which it came in. If it comes in after the deadline, it's counted in the year after it comes in.


 * Q Ari, Senator Leahy today held a hearing attended only by himself I think --


 * MR. FLEISCHER: But I am sure there were no debates.


 * Q -- one of the President's judicial nominees. What does the White House feel about the pace of the Judicial Committee hearings on the President's nominees? And why did the President not request a hold-over before the August break occurred, which would have been -- made it unnecessary for Senator Leahy to hold this hearing today?


 * MR. FLEISCHER: Well, as far as the pace of the nominees go, this administration, even with a shortened transition, is way ahead of the pace of previous presidents in their first years -- President Clinton, President Bush or President Reagan -- in making nominations, including that to the federal courts. Now the administration is going to work very hard and diligently with Senator Leahy to move forward on Senate confirmation of those nominees.


 * You know, that's really not a partisan issue. That's an issue about how to serve people who have a legitimate claim and need to go to court and don't want to wait in line for courtrooms to open up because there are no judges sitting in judgment. And that's why whether you're a Democrat or you're a Republican, there really is a national interest in filling the vacancies that are in the judiciary. And the administration is hopeful that the Senate will take that interest seriously and will serve the public.


 * Q Does that mean you're comfortable with the pace then that the Senate has maintained?


 * MR. FLEISCHER: I think we will know more by the end of the year. In fairness, many of the nominations the administration made came in late July and so the Senate is just taking a look at those now, and the Senate has every right for advice and consent. They are going to exercise their prerogatives.


 * I think it will be an interesting question to take a look at come October and November when Congress is ready to recess for the year. At that point, there will be a serious burden on the Congress and on the United States Senate particularly, to take an action and pass the nominees, so that the judiciary is not clogged and so that there aren't vacancies when people expect to have their fair day in court.


 * Q Ari, has he supported -- an official or not to the Russians regarding the possible -- from the ABM Treaty?


 * MR. FLEISCHER: The question was about a possible deadline on the ABM treaty. I think you may be referring to a story that appeared in the paper today suggesting that an administration official had indicated that there is a deadline.


 * I went back and looked at the actual transcript of what Mr. Bolton, John Bolton of the State Department said. And he makes it perfectly plain in his remarks, in his own words, that there is no artificial deadline. President Putin is coming to Crawford this November. There is no deadline set that any agreement must be reached prior to President Putin's visit to Crawford.


 * It's also notable -- I think many people have lost this fact -- but President Bush and President Putin will also meet in Shanghai in October during President Bush's visit to Asia. So there will be more meetings with President Putin and then, of course, the meeting here in the ranch in November.


 * But there are no deadlines, and just looking at what Mr. Bolton said. But we don't, also, consider it an artificial deadline. We are going to try to make as much progress as we can and we'll see what happens. Those are Mr. Bolton's words.


 * Q Isn't it true that the administration has -- a decision by November, if you -- it wants to go ahead with that -- starting --


 * MR. FLEISCHER: No, that's not what Secretary Bolton indicated. Secretary Bolton said we are going to continue to work with Russia on the issues that the President and President Putin have begun their deliberations over. Secretary Rumsfeld has traveled to Russia. There will be additional visits. Secretary Powell, of course, is involved.


 * And the President is committed to making progress with President Putin and Russia on new thinking, how to go beyond the Cold War mentality that is reflected in the ABM treaty. But as Secretary Bolton indicated very directly, there are no artificial deadlines. There is no deadline this November, for example.


 * Q Ari, if I could follow, does that mean you can say categorically the U.S. will not withdraw from the ABM Treaty this year?


 * MR. FLEISCHER: No, I cannot give you any such assurance. The administration has made very clear in testimony up on the Hill that we believe that the ABM treaty will, in a matter of months, not years, prevent us from having a fair testing of plans for a missile defense system. The United States is committed to moving forward to protect itself and to protect other nations from accidental or rogue missile launches from nations that would not comply with international norms.


 * So the President is committed to protecting the country. It's unclear exactly when the tests will lead to a bumping into the ABM treaty. But the question was about whether there is an artificial deadline imposed this November. There is no such artificial deadline. There will be continued efforts to develop a missile defense system and to continue with the research to protect the United States.


 * Q Can you give us a sense of what kind of progress would have made it unnecessary for the U.S. to withdraw from the ABM treaty?


 * MR. FLEISCHER: I don't want to speculate. But that is going to come down to the matters of diplomacy involving conversations that are already well under way that started with President Bush and President Putin in Slovinia, that continued in Genoa and that will continue in Shanghai, that will continue at the ranch, and also at the Secretary level.


 * Q Ari, Senator Shelby is trying to revive on the Hill the official -- what critics have called the official secret acts, to criminalize the leaking of classified and national security information. Clinton vetoed that. Do you -- what's the President's position?


 * MR. FLEISCHER: I will have to check on that, Sandra; I don't have any information about that.


 * Q Ari on missile defense. Yesterday the President said, when he was talking about the subject in his speech, he said, let's protect Israel. Was he referring to the current violence in Israel, or was he more generally referring to the need to include Israel in a missile defense shield?


 * MR. FLEISCHER: The President was talking about, as a broad matter of United States policy, our special relationship with Israel and the American commitment to be a good friend and strong ally of Israel.


 * Q Ari -- explain to the average American why today's budget figures are important in their everyday lives?


 * MR. FLEISCHER: The budget that's released today is important to average, everyday Americans because it shows, even with the slowing economy, the budget is strong. The tax dollars are being used wisely and that the surplus has been protected.


 * American people work hard, and when they send their money to Washington, they don't want it wasted and they don't want to return to the days of deficits. The only way we are going to return to the days of deficits is if Congress busts the budget and increases spending once again.


 * So this morning's report is both a good sign and a warning signal. It's a good sign because, despite the slowdown, the budget is in strong shape. It's a warning signal because there are still people in Congress who want to spend more money and bust the budget, and that's the point of the warning that the President gave yesterday in Independence, Missouri, about the importance of discussions with Congress this fall.


 * And just as a reminder, and the budget makes this clear, Director Daniels said it this morning, the surplus for 2001 should be $34.5 billion bigger than it is, but Congress spent the money last year. And that was a decision made by Democrats and Republicans and signed into law by President Clinton and it's a sign of why it's important to keep the fiscal pressure on the Congress so that they don't bust the budget again. And that's what happens when a new president comes to town.


 * Previously, Congress was pressed to spend more money; this time, Congress will be pressed to adhere to the budget limits, so that we can have funding for the President's initiatives, which are America's initiatives -- education and defense, for example -- but don't bust the budget.


 * Q Ari, Democrats are saying that as a result of the shrinking surplus, any future tax cuts or credits, including those in the energy bill, are dead for now, unless the administration can find offsets. Has the administration put on hold any tax cuts they've promised the corporate community or anyone else?


 * MR. FLEISCHER: Well, actually, if you take a look at the budget document here, it makes clear that there are a series of expiring tax provisions and we are going to work with Congress on how those provisions could be extended. But there is no question that this is an era where choices will need to be made, because no one should bust the budget for any reason. That includes Republicans. So if there are additional tax cuts that would require diminution of money in the Treasury, people are going to have to take a look at spending reductions for those tax cuts.


 * Q Ari, Canadian newspapers report stories today about Prime Minister's Chretien's phone call yesterday with the President, in which Chretien apparently said, he warned the President that if the United States wants free trade on oil and gas, then the United States should then open up its markets without these big tariffs on Canadian soft-wood lumber. Any -- can you tell us what the President had to say to the Prime Minister, and is there any possibility that that tariff could be lowered?


 * MR. FLEISCHER: The question is about a conversation the President had with Prime Minister Chretien of Canada involving some trade matters.


 * President Bush spoke with Prime Minister Chretien on the way up to Milwaukee Monday aboard Air Force One. The two of them did discuss trade matters between our two governments and there is an ongoing, longstanding dispute involving softwood lumber that the Commerce Department has weighed in on. And the President spoke with the Prime Minister about the need to resolve this difficult issue between our two countries.


 * This is an issue that has come up many times before. On Prime Minister Chretien's first visit to Washington, when he was in the Oval Office, the very same topic came up. It has been a longstanding matter of trade dispute between the United States and Canada and the President and the Prime Minister discussed the need to resolve it and Ambassador Zoellick, the United States Trade Representative, is working on that now.


 * Q Ari, if you guys have always been so good about letting us know about every phone call to every foreign leader, why is it that we did not hear about this phone call except through the Canadian press?


 * MR. FLEISCHER: Well, there are going to be times the President makes phone calls and we don't read out each and every phone call the President makes. As you can imagine, the President makes or receives, depending on the day, scores of phone calls a day. We do our best to share as much information as possible. But there has never been a commitment that every time the President speaks with a foreign leader, we're going to announce it.


 * Q Ari, on the ABM Treaty, you said there's no artificial deadlines. There are some legal deadlines. You've got six months to withdraw from the pact. So at what point would that legal deadline force a decision upon --


 * MR. FLEISCHER: Well, the deadlines are going to be driven by what is in the best interests of protecting the peace and securing the peace of the country from an accidental or a rogue nation missile launch. That's the cause that the President is dedicated to. And that will be driven more by technical issues involving the testing and the development of a missile defense system.


 * The ABM treaty, which was enacted in the early 1970s, severely hamstrings and limits the ability of the United States to research and test the best way to protect the American people and our allies from launch of missiles that were unthinkable in the early '70s. Technology has changed the world to the point where there are nations that didn't even want to read the ABM treaty that are now in a position to launch missiles or are assuming a position to launch missiles but they are not party to the ABM treaty.


 * So a sheer sense of reality and a wise decision to protect the American people would indicate that we will test and research and make progress in a way that is not hamstrung by a treaty that could harm the American people.


 * Q You've said though that the Treaty will bump up against these limits in a matter of months. I mean, isn't there, in effect, a legal deadline around the end of the year for withdrawing from the treaty?


 * MR. FLEISCHER: No, there's not.


 * Q Why not?


 * MR. FLEISCHER: Because, as I indicated, the deadline will be driven by technical matters that either conform to the treaty or that don't. Under the treaty, there is a six-month notification period for advising someone to withdrawal if withdrawal becomes necessary.


 * Q The President's talked to Chretien and Fox within a day of each other. He has in the past identified both Canada and Mexico as potential suppliers of additional natural gas and other sources of energy. I'm curious if in the conversation this topic came up, between both of them, and what, if any, progress was made or what if anything you can tell us about that particular part of the conversation?


 * MR. FLEISCHER: Yes, Major, I was not on the line for either conversation. I've been briefed on them and nobody brought anything to my attention about any energy discussions on these two phone calls.


 * I know that in the past, when President Bush visited President Fox in Mexico, they did talk about energy, particularly natural gas in Mexico being provided to particularly California. In the conversations President Bush has had with Prime Minister Chretien, they have talked often about natural gas from Canada being brought to the United States.


 * Q Can we read into this that there is less a sense of urgency about the energy question in these two countries than there was four or five months ago?


 * MR. FLEISCHER: No. No, because it's going to be a topic when President Fox comes here in September, just two weeks away. It's an ongoing point of discussion and point of cooperation among our three nations.


 * Q One last follow up on Bill's question. So you're saying unequivocally that when the President said, let's protect Israel, yesterday, he was in no way referring to, let's protect Israel with a missile defense system?


 * MR. FLEISCHER: He was talking broadly. And whatever shape a protection for Israel the President was addressing could come in many shapes. Israel, as you know, is working already on its own system of defenses.


 * Q On ABM and Russia, do we understand correctly that the United States will not give notice of its intention to withdraw from the ABM before the President's meetings with Putin either in Shanghai or at the ranch?


 * MR. FLEISCHER: No, I am not speculating on when the time will be, but I am saying there are no artificial deadlines. The factor determining the steps that the United States will take will be driven by the very practical matter of the research necessary to protect our country. And, as I indicated earlier, the research is severely hamstrung as a result of the ABM treaty, which prevents, for example, any type of mobile testing, prevents any type of sea-based testing.


 * In accordance with the limited, layered missile defense system the President envisages, those could be options. If research indicates that those are the best means to protect the United States or our allies from missile launch, the President does not think we should be hamstrung from being able to research whether or not a mobile or a sea-based, for example, operation is the most effective way to protect the country.


 * And that's the problem the President has with the ABM treaty, that it denies Americans options for how best to be protected.


 * Q I understand that. But has the United States given Russia more of an understanding of a target date by which the United States might give notice of withdrawal from ABM?


 * MR. FLEISCHER: No. And that's what Secretary Bolton said in his own interview -- and we will pass that out -- Major asked to pass that out -- when he said there are no artificial deadlines.


 * Q Ari, a follow up on that. Have legal experts decided what might constitute a breach of the treaty? This was a question -- like building silos for missiles really constitute a breach of the treaty. The test, the next step will be considered a breach of the treaty. Have they decided on that?


 * MR. FLEISCHER: I would refer you to Secretary Wolfowitz's testimony up on the Hill about that very topic. And as you know, any time there is an international treaty, experts and lawyers will disagree over exactly what constitutes compliance, exactly what constitutes lack of compliance. But there is no question that the United States is moving in a direction where the best means to determine how to protect the United States will be limited, will be hamstrung as a result of this treaty.


 * And so it is increasingly becoming a topic that is moving beyond shades of gray to shades of black and white, where the ability to test will be hampered, if not eliminated, by this treaty.


 * Q How much is the administration prepared to push the Medicare proposal by the year's end?


 * MR. FLEISCHER: The Medicare what now?


 * Q How much is the administration prepared to push for Medicare by the year's end?


 * MR. FLEISCHER: The President believes this fall will be a good opportunity for the Congress to take up his plan to improve and strengthen Medicare by giving seniors prescription drug coverage, as well as to put the Medicare system on more permanent financial -- a stronger financial footing, as is also clear in today's report in the Mid-Session Review. Medicare spends more money than it takes in. There is no Medicare surplus, and that's a problem for any senior citizen and particularly for middle-age people who will soon become senior citizens who want to rely on Medicare program.


 * The hospital fund has a trust fund that takes in more than it spends, but the whole rest of Medicare, which is the bulk of Medicare, meaning any time somebody visits their doctors, that's not financed out of the trust fund. That's financed out of operating money of which there is not sufficient money.


 * Any time somebody wants to visit a skilled nursing facility or home health care, all of those are funded out of the non-trust fund portion of the Medicare budget. And when you combine all of Medicare, which is the way a senior citizen will look at Medicare, is how do I get my health -- they don't worry about A or B, which is the artificial government convention between hospitals and everything else -- they say, how do I get my Medicare? Medicare when it is taken in its totality does not have a trust fund surplus, it has a deficit.


 * And that's another reason the President is concerned Medicare is heading to bankruptcy. Medicare needs to be modernized and seniors need prescription drugs. So the short answer is the President thinks this falls at an appropriate time for Congress to take up the plan that he sent up there some two months ago.


 * Q Ari, on another entitlement question. On Social Security, given the shrinking surplus, where will the money come from to fund the partial privatization part of --


 * MR. FLEISCHER: Well, that all depends on the recommendations that are made by the Social Security Commission that will help determine what transition costs will be incurred. It all depends on the decisions they make. For example, if they determine that you can set aside two percentage points of payroll tax or three percentage points of payroll tax, that could be a multi-hundred billion dollar difference in transition costs.


 * So, again, it begins with the determinations made by the Social Security Commission. But the very fact of the matter is that, for this year, given the fact that this budget will produce the second largest surplus in history, virtually all of it coming in the form of Social Security, there will be a dramatic paying down of the national debt this year. That puts the nation in a stronger position for a Social Security reform program because our nation will service less debt.


 * Q Does Medicare need to get done before Social Security?


 * MR. FLEISCHER: The President has said that he believes this fall is the appropriate time to take up Medicare. The commission will not report back its recommendations until later this fall, which logically would mean Social Security would follow Medicare.


 * Q Ari, is the White House -- is the President nervous because you only have about $1 billion that will pad -- are you concerned that if tax receipts do go down -- or that could disappear? I mean, it's not much pad, and you must be a bit nervous about that.


 * MR. FLEISCHER: Let me share with you the President's mind set on that, because that is a topic that he has really talked about at length in some private Oval Office meetings. He has seen this as a businessman, he has seen it as a governor and now he has seen it as a President. But the President has told the staff that whether the surplus was $1 billion or the surplus was $50 billion or if the surplus was $100 billion on the operating side of the budget, people in Washington would want to spend it right back down to zero.


 * So from his point of view, whatever the surplus is, there are people in Washington who are going to try to spend it down to zero. So the fact of the matter is, the education increases the President has asked for are already taken into account in the budget. The defense increases the President has asked for are taken into account in the budget. The tax cut which the President believes will propel the economy back into strong growth are already taken into account in the budget.


 * When you look at what's left in the operating side of the budget, it's about $1 billion. That will prevent the politicians from busting the budget and spending more on more pork and on more wasteful funding -- more wasteful spending. And I think the President, just like I indicated last year, Congress -- after it gave its word would honor a budget resolution -- went out and busted that resolution by some $35 billion and spent more money.


 * We're already seeing some troublesome signs this year about the pork barrel spending in Congress. The number of earmarks has grown dramatically over the last several years. This is a crusade Senator McCain has been on, which is proof that the President is right. No matter what the size of the of the operating surplus, there are going to be politicians in Washington in both parties who are going to try to spend it.


 * This budget represents fiscal restraint that will be imposed on Congress because Congress knows that if it busts the budget it will spend Social Security and the President will protect Social Security for our seniors.


 * Q Ari, the President pledged that there was enough money for the tax cut and adequate funding to provide for priorities. The argument that the Democrats are making seems to be that there isn't enough money for adequate funding for national priorities, that there is simply --


 * MR. FLEISCHER: The argument the Democrats are making is, we want a bigger surplus so we can spend it down so there is no surplus. That's the argument the Democrats are making.


 * I think the President's priorities of increasing education funding, increasing defense spending and having a tax cut that 12 Democrats in the Senate voted for, that 28 Democrats in the House voted for is proof perfect that the priorities that have been established so far are the priorities the American people support. They will get the economy growing again while preventing the big spenders from getting their paws on a big surplus they would otherwise spend.


 * Q You discussed this somewhat the other time, but the budget that the President says we all agreed on was agreed on Republicans.


 * MR. FLEISCHER: That's not right.


 * Q A majority of Republicans in the House voted and a majority of Republicans in the Senate voted to pass the --


 * MR. FLEISCHER: Major, it was a majority of representatives of the people in the House and in the Senate. It's a country that majority will prevails.


 * Q The majority power in the Senate has shifted since that budget resolution passed. We now have Democrats in -- spending matters quite differently than the President. They were not party to this agreement. So when the President says, this is a budget we all agreed on, that's only partially true. He does, does he not, have to negotiate now --


 * MR. FLEISCHER: By that standard, any time there is a change in the balance of power in the House or the Senate, every law that was previously passed should be disregarded because new people have come to town. It --


 * Q -- issue, you well know, Ari, is not a law. As you well know, it is not a law.


 * MR. FLEISCHER: It has the binding effect on the Congress, as evidenced by the fact that in the Senate, for example, if anybody tried to spend in excess of what the budget said, it would have to have 60 votes. As you know, the Senate is bound by the existing agreements, including budget resolutions and laws. And just because power has transferred at the top of the Senate does not change the binding nature of all previous actions taken.


 * Perish the thought that if there's a change in the House or in the Senate, all previous laws are eliminated off the books, or resolutions. That's not the way our government works.


 * Q The President has no obligation to treat this as a new negotiation in the Senate?


 * MR. FLEISCHER: Absolutely not. The President has the obligation to protect the existing budget resolution so people don't bust it like they did last year by spending more money that would imperil Social Security. And that was one of the points the President made yesterday in his speech in Missouri. And I think that's also why you hear a lot of complaining by the Democrats in the Congress that the surplus has so-called dwindled because they want to dwindle it through more spending. They're not happy there is not a bigger surplus for them to spend.


 * Q Ari, what is the leader of the free world up to today, and what are his plans for tomorrow?


 * MR. FLEISCHER: The President today, as I indicated, he spoke with President Fox. He has met with several members of the staff. He worked out, he lifted weights this morning. And that's the update I had just before I came over here. We will have additional information later today about any potential movement by the President tomorrow. We will just put out a notice on your pagers and let everybody know later today. And then Friday, there is the meeting coming in -- Andy Card, for example, is coming in for the Friday meeting. There will be several people coming in for that meeting on Friday.


 * Q Ari, has the President made up his mind on the participation of the United States to the anti-racism conference in South Africa?


 * MR. FLEISCHER: No, that's a matter that is still being discussed with the State Department.


 * Q There were reports that the U.S. will participate but the level of participation has been --


 * MR. FLEISCHER: No, there's no -- no such agreement. There is no such decision, I should say. The matter is still being discussed between White House and State Department.


 * Q Racism conference, Ari?


 * MR. FLEISCHER: That was the question. Yes.


 * Q Ari, has the President received a telephone call from Senator Jesse Helms, who reportedly will announce he is not seeking re-election today? Any phone calls this morning --


 * MR. FLEISCHER: I don't have any information on that, nothing that has been mentioned to me. I'll try to get you an update on that, yes.


 * Q Ari, I'm sorry, could you repeat what you said at the beginning of the conference about the President's discussion with President Fox on Argentina, what they talked about?


 * MR. FLEISCHER: The President's what, now?


 * Q On the discussion about Argentina, can you just repeat for me what they talked about?


 * MR. FLEISCHER: President Bush and President Fox talked about promoting the desire for sustainability in Argentina. They talked about the importance of working with Argentina and the IMF to find a solution to Argentina's economic difficulties, and they welcome the movement by the IMF on this topic.


 * Q Ari, what's the reason the Bushes are knocking a day off their vacation, leaving next Thursday, we understand?


 * MR. FLEISCHER: Mrs. Bush has to be back in Washington that Friday, so the President is going to depart that Thursday and they will depart together.


 * Q Yesterday the President seemed unsure whether he had received his tax refund check or not. Have you checked on that?


 * MR. FLEISCHER: That's correct. Well, unfortunately, this deals with the complexity of tax returns that involve blind trusts and the limited ability of taxpayers, when they have a blind trust, to know all the facts that go into their tax returns.


 * Q So will he or will he not know when he gets it?


 * MR. FLEISCHER: He knows he is going to get it. He knows it will happen this fall. But under the terms of a blind trust, he may very well not know the exact moment the letter arrives.


 * Q He said he wants to spend it on charity?


 * MR. FLEISCHER: That's correct.


 * Q So he will get notice of some sort, right?


 * MR. FLEISCHER: Well, again, I would have to check with the lawyers who administer a blind trust. There are all kinds of legal rules that deal with blind trusts. Welcome to the tax code.


 * Q Ari, when you have a staff meeting, is that something above and beyond everyday national security briefings?


 * MR. FLEISCHER: Yes, for example, he got together with Karen this morning, was talking with Karen. He talked with Josh Bolten, talks with staff, talked to Condi.


 * Q Is this the rollout of the Joint Chiefs announcement, or --


 * MR. FLEISCHER: It's a series of reviews over action that's pending, a little bit of a look ahead to the fall agenda, anything that is coming up. He likes talking to staff.


 * Q Real quick, Ari, I wondered if the President had any comments on Minority Leader Gephardt's remarks Sunday on Meet the Press? When asked about the budget squeeze, he indicated that maybe there should be cuts in education, health care and defense spending. Has the President had any reaction?


 * MR. FLEISCHER: Well, the President would be very troubled if anybody sought to cut education increases that he thinks are vital to improve our public schools and to help our children. He does not think that's a wise approach. The President has laid out a budget that reflects the priorities that he thinks are the most important. And he is particularly worried about those in the Congress who are now talking about raising taxes. He thinks that's unnecessary and the only reason they want to raise taxes is so they can once again increase government spending.


 * As the President indicated in Missouri, he will oppose any efforts to increase taxes on the American people.

Thank you. Enjoy Crawford.