Press Briefing by Press Secretary Ari Fleischer, February 5, 2001

The James S. Brady Press Briefing Room

1:12 P.M. EST

MR. FLEISCHER: Hello, troops. Good afternoon. I have two personnel announcements to begin with. President Bush today announced his intention to nominate Mark A. Weinberger as Assistant Secretary of Treasury for Tax Policy. And President Bush today announced his intention to nominate Dr. Paul Wolfowitz as Deputy Secretary of Defense. News releases will be circulating after today's briefing.

Those are my only announcements and I'm prepared to take any questions.


 * Q   Ari, will the President actively seek to block any move despite corporate lobbyists on the Hill to add on to the tax plan that he's going to send up this week?


 * MR. FLEISCHER: The President proposed a tax plan that he believes is the best tax plan for the country, both to give people their money back that they paid in high taxes to return the tax surplus to the voters before the politicians can spend it, and also to promote economic growth.


 * There, are, of course, First Amendment speech issues that are involved in what people can do who are not elected officials, and we don't presume to tell people what to do or how to carry out their business, but the President will fight for the plan that he sends up to the Hill.


 * Q   Well, he seemed to indicate that this morning, and he phrased it in terms of this idea of add-ons to the tax bill.  I'm just wondering, how determined is he to make sure that the American taxpayers get their slice and that American corporations don't get a piece of this?


 * MR. FLEISCHER: The President's remarks were focused more on Congress than on anybody else.  The President will propose it and the Congress will consider it, of course.  And throughout that process, the President will advocate and fight for his tax relief proposal.  Congress, of course, will lend its voice to it as well.  And that's who the President was talking to.


 * Q   Following that, though, when he's saying -- talking about loading up a tax plan with their own vision of tax relief, minus the right size plan, is that a suggestion that he wants to hold the line against Republican plans to add on taxes?  Is that a message to Republicans?


 * MR. FLEISCHER: It's a message to everyone, to all sides -- Democrat, Republican alike.


 * Q   But is it a message just that I'm not going to accept anything lower than that what I proposed, or also, I don't want anything higher than what I proposed?


 * MR. FLEISCHER: I think the likelihood is, what you will see is a number of Democrats say they want to keep taxes higher, and therefore they shouldn't cut taxes -- Bush shouldn't cut taxes as much.  I think you might see some Republicans who say it's not enough tax relief.


 * The President's proposal, in his opinion, is the right amount to cut taxes.


 * Q   Is it their position that they want to keep taxes higher, or they just want to give back what we can currently afford?


 * MR. FLEISCHER: Well, certainly, if you don't cut taxes as much as President Bush has proposed, if you say the tax cut must be a different level, a smaller level, that means people will pay more taxes than they are currently paying under the Bush proposal -- than they would pay under the Bush proposal.


 * Q   It's totally a matter of semantics.


 * MR. FLEISCHER: That's what I do for a living.  (Laughter.)


 * Q   At the Wehrkunde Strategic Policy Conference in Munich over the weekend, Defense Secretary Rumsfeld said in effect that the decision to deploy a national missile defense is a done deal.  As you know, there is strong opposition on the part of many NATO members, as well as Russia and China, and there are some who believe that Russia could try to use this issue to split the Alliance.  Having said all that and realizing that, is there any wiggle room in there?  Are there any conditions under which the President would choose not to deploy, or is he still totally committed to it?


 * MR. FLEISCHER: I think if you go back to September of 1999 and examine the President's statements at the time he gave a series of defense and foreign policy speeches, it is very clear that President Bush believes very deeply that the best way to preserve the peace is through the development of a national missile defense to protect against an accidental launch or a rogue missile launch -- rogue nation launch of a missile.  And he intends to pursue that matter in consultation with our allies, and he will indeed pursue it.  He believes it's a very effective way to protect America and our allies.


 * Q   One follow-up.  If this opposition becoming a groundswell and really becomes serious, and there's danger of the Alliance falling apart, any possibility?


 * MR. FLEISCHER: I'm not going to comment on any hypotheticals like that.  We're going to continue, the President will continue to consult with our allies and friends as we proceed and move forward.


 * Q   Ari, the embassy bombing trial just got started in New York today.  I wonder what the President's expectations are for the trial's outcome, and also, since two of the suspects are charged with worldwide conspiracy associated with Osama bin Laden to kill Americans and to destroy American property; so I wonder what steps President Bush is going to take to counter terrorism?


 * MR. FLEISCHER: I'm going to, for the moment, refer that question to Mary Ellen, to the Department of Defense.


 * Q   On the tax plan, Bush indicated today he was in favor of making it retroactive to the first of January.  Lindsey said yesterday that Bush also favored accelerating it, which implies shifting more of the benefits into the first year of the plan.  Can you kind of clarify exactly what the President would accept in terms of front-loading?


 * MR. FLEISCHER: By definition, if you make it retroactive you've accelerated it.  It's one and the same.


 * Q   Okay.  But it seemed from the discussion yesterday that there were two different issues they were thinking.  I mean, it could take effect early, but it could also have -- be phased-in faster.


 * MR. FLEISCHER: There are two primary ways to address the question of when the tax bill goes into effect and at what rates it goes into effect. And let me underscore that what the President indicated today, you heard him say it, and what Mr. Lindsey said.  We're going to work with the Congress.  And the proposal that the President will make on Thursday will mirror the proposal he made during the course of the campaign.


 * Now, we are hearing from a number of people in the Congress, given the economic slowdown, the importance of making it retroactive, and you heard the President and his support of that today. Now, there are two principal ways that you can impact the effective date of the tax cut and then there's a third way that actually gets more benefit to taxpayers sooner.


 * You can make it retroactive. Obviously, we're here on February 5th; if you make the tax cut retroactive to January 1st, that, in effect, clearly speeds it up.  You can also change the phase-in rates.  The tax cut, for example, the 15 percent bracket comes down to 10 percent.  Under the plan the President announced during the campaign, it comes down in a series of stair steps, from 15 percent to 10 percent, over a period of years.  You can change the period of years.  That's another optional way to accelerate.  That will all be what we work on with the Congress.


 * The third way is by adjusting withholding tables. So as workers, for example, in this year, in 2001, where you don't pay your taxes until April of 2002, if you don't change your withholdings, taxpayers don't receive the benefit until, in most cases, 2002.  You can change the withholdings to address that question as well.


 * So those are a series of the options that the administration is looking at and will continue to work with the Congress on.


 * Q   Let me ask about the retroactivity.  Doesn't that inevitably increase the cost, pushing it forward over a 10-year period?  And isn't this kind of an example of one of the add-ons that the President himself warned against?


 * MR. FLEISCHER: This is an example of the type of add-on that the President has indicated he is taking a serious look at for the past several months.  So this is not surprising, this is something the President, given the softness in the economy, sent a lot of signals he was looking at.


 * Q   And would it increase the cost?


 * MR. FLEISCHER: Well, I think it all depends on what other steps are taken in the plan.  And, again, as we work it through with the Congress, we heard a powerful statement from the president today about what the ultimate size should be.  Mr. Lindsey has addressed the same question and we have established a pretty clearly-defined ballpark where we think this should end up.  I think that helps establish fiscal discipline because there always is a tendency in tax legislation, if you're not careful, to add too much to it.


 * Q   Does that mean if things are accelerated, he's going to want it to balance out on the other end so it's roughly the same size?


 * MR. FLEISCHER: The other area you're going to have to look at is what impact does it have on growth.  President Bush, as you know, comes from the school of thought that says cutting marginal income tax rates leads to higher rates of growth, and if you have higher rates of growth, you, of course, increase revenues.


 * Q   So he doesn't mind the new growth then?


 * MR. FLEISCHER: We're all going to see what the dollar amounts are as the proposal moves forward.  But the President and Mr. Lindsey clearly spoke today about the ultimate size that we think the tax cut should be limited to.


 * Q   If the size is clear, Ari, will you, in fact, attach a cost estimate when it goes up on Thursday?


 * MR. FLEISCHER: No, I do not anticipate that will be this Thursday. As with our previous announcements, I anticipate that will be after OMB has a chance to carefully crunch the numbers, which will be not too far from now.  Each passing day in February, we get closer to that day where I've suggested -- probably late February.


 * Q   Are you asking anyone on Capitol Hill going to take a closer look at it and actually do anything on it if they don't know what the cost is going to be?


 * MR. FLEISCHER: The traditional pattern is that the President will propose it, Congress takes a beginning look at it, the budget then comes up -- really, we're not talking very long.  If this tax proposal gets sent up to the Hill on February 8th, I think it's just a matter of a couple of weeks after that where the OMB will then have its chance to submit the actual numbers that would go along with any budget proposal the President would make, and that's really a function, frankly, of the fact that it's a new administration, and it's typical of a new administration; is not in a position to put down in writing all the specific numbers until the economic blueprint is ready.


 * And then following that, Congress will take a look at it on its own, and they will ask the Joint Committee on Taxation, which is Congress' official estimator of tax cuts, to weigh in on how much they estimate the tax cut costs.


 * Q   But I understand on a lot of these things, you've been reluctant to give out the numbers and everything.  But, surely, on the tax cuts, you know what the cost is, because it's obviously a large-ticket item and you can't really figure out the other things until you know what the cost to the taxpayer is.


 * MR. FLEISCHER: We're going to be careful and thorough, and that's why the Office of Management and Budget will be the ones who put the price tag on it.


 * Q   Ari, the press secretary of Texas Congresswoman Johnson confirmed that while non-blacks can join the Congressional Black Caucus, they're called auxiliaries, and they are not allowed to vote.  And my question is, if the President had known about this racial discrimination, would he have invited this organization to the White House, or did he know about it and believe it's all right because they're black?


 * MR. FLEISCHER: Listen, there are a number of congressional caucuses and groups that have formed over the years, and it's the prerogative of Congress --


 * Q   None are racially segregated, Ari, I've checked it.  None of them are racially segregated.  Only this.


 * MR. FLEISCHER: It's the prerogative of Congress to set those terms and I would refer any questions on that to the Congress.


 * Q   Well, doesn't he think they would want to stop this racial discrimination, Ari?  He certainly isn't in favor of racial discrimination, is he?


 * MR. FLEISCHER: The President met with the Congressional Black Caucus and I gave the report on the results of that meeting and I think he would be pleased to meet with them again, as he indicated.


 * Q   Could you give us an update on energy policy?  Has the Policy Development Group been working and should we look for something on this issue next week?


 * MR. FLEISCHER: They have been working.  They continue to meet.  I think the last meeting was on Friday of last week and they -- when we have something in the way to announce, we will, of course.  That group, I want to remind you, is focused on the national energy policy that the President ran on during the course of the campaign.  And that's where we stand.


 * Q   And I'm a little bit confused on that.  Why do you need to develop policy when you laid out the policy during the campaign?  Why do we take that approach on this issue when we haven't on the others?


 * MR. FLEISCHER: For the same reason that, during the transition, we had an Education Working Group that developed the fine print on the policies that the President sent up two weeks ago.  It is part of good government.  It began with the campaign, of course, but then you bring in all the new people into the administration from the various agencies so they can actually see what it was the President proposed during the campaign for any people who were new to the administration.  And it also just allows us to put meat on the bones for a variety of these proposals.


 * Q   Will we likely see anything different than what he proposed during the campaign?


 * MR. FLEISCHER: I think it will be substantially like what he proposed in the campaign.  We have to allow the working group to develop its product.


 * Q   Back to the numbers question on when we are going to have hard numbers on the cost, I thought you had said a while ago that the OMB would be doing just a general blueprint on the budget and that we wouldn't have real budget numbers until later.


 * MR. FLEISCHER: That's correct.


 * Q   So does that mean in February we are going to have real budget numbers on all the President's proposals?


 * MR. FLEISCHER: The economic blueprint traditionally has a series of costs of the major programs and of, all, for example, domestic discretionary spending, defense spending.  So you will have a lot of top line hard and accurate numbers.  Then the follow on in April will be down to the appropriated item levels which is the big, thick phone book worth of statistics and facts.

But you will have an awful lot of what you are looking for in that February blueprint.


 * Q   Ari, the Democrats, in addition to the size of the tax cut, many have talked about the distribution of it.


 * MR. FLEISCHER: Yes.


 * Q   Are there elements of progressivity injected into your tax cut plan that aren't apparent to us at this point?


 * MR. FLEISCHER: Well, it's a very progressive tax cut plan that President Bush has proposed.  And, frankly, it disproportionately helps people at the low and middle end of the scale.  And the reason for that is by dropping the 15 percent lowest bracket down to 10 percent and by doubling the child credit from $500 to $1,000, you deliver a lot more oomph and help to people at the low and middle ends of the scale.


 * One of the families we were joined with this morning would have their entire income tax burden erased under the President's proposal. They would have a $1,000 -- they currently pay about $1,000 in taxes and this proposal would eliminate virtually all their income taxes that they pay.


 * On the other side of the scale, when it comes to taxes paid by the top percentage groups in the country, the President believes very strongly that no one should pay more than 33 percent of their income in taxes. Under the current system, the top rate, just for income alone, is approximately 40 percent.  When you add into it the amount of taxes people pay for their Social Security and for their Medicare, and for the deductions that they're no longer entitled to take, the federal taxes alone can be in excess of 50 percent for some people.


 * Now, consider that also when you take a look at the fact that President Bush's proposal will cut taxes for all Americans. He will not punish those who are successful.  But to put it in perspective, the top one percent of taxpayers in this country pay 34.8 percent of all the income taxes in this country.  The top 10 percent pay 65 percent of all income taxes in this country, and they pay 50 percent of all taxes in this country.


 * We have a progressive tax code. And the tax cut that the President will deliver to the Congress this week will cut taxes.  The biggest percentage gainers will be low-to-moderate income people.  But he will indeed cut taxes for all income tax-paying Americans.  He thinks it's the right thing to do.


 * Q   Ari, how realistic is it to think of this as an economic stimulus plan, given the size of the non-Social Security surplus this year and next year?  In other words, if he stays within the boundaries of that number, the dollars that would be funneled back to taxpayers just simply would not seem to be enough to amount to much of a stimulus at all.


 * MR. FLEISCHER: Well, there are three reasons the President thinks we need to cut taxes.  And the first is that the surplus, the tax surplus belongs to the taxpayers.  It's their money, and they deserve it back. Two, if you don't cut taxes, the politicians of both parties will spend that money.  And three, he does believe, and he said at the time he announced his tax cut, that this can be an insurance policy against economic downturns.  And he believes all three of those are powerful and good reasons to cut taxes.


 * Q   And as an insurance policy, does that constitute, then, sort of a self-stimulus?


 * MR. FLEISCHER: Certainly it does.  It can be a stimulus of a level that I think economists will discuss, and some will agree with more wholeheartedly than others.  But it is the belief of many people, including the President, that cutting taxes can be a stimulus.  It's one of the reasons he expressed his support today for retroactivity.


 * Q   The President used the term "class warfare" again this morning.


 * MR. FLEISCHER: Right.


 * Q   Does he believe that those who don't like the mix of the different tax brackets that he is proposing are engaging in class warfare?


 * MR. FLEISCHER: Well, there is a -- there is always an endeavor in this town to deny tax relief to people, because they accuse some people of being rich or successful, and therefore they're not entitled to tax relief. And that's just not a view that President Bush holds.


 * We shouldn't split people by class. We shouldn't split people on the basis of success or not success.  All income taxpayers deserve tax relief, and that's why the President's proposal addresses it for one and all.


 * Q   Well, let's say that one of the opponents believes, okay, the size of the tax cut's about right, but I just think -- and I'm for the idea of having four brackets as opposed to five, it's fine -- but I just don't think the particular levels he's chosen for those four -- is he still engaged in class warfare?


 * MR. FLEISCHER: I think if someone were to make a rather economic, esoteric, scholarly argument like you just did, that wouldn't be class warfare.  (Laughter.)


 * But the game in this town often is to try to divide people and try to disparage and criticize others because they are successful. They call it "tax cuts for the rich."  That's not going to be the approach of this administration.  The approach of this administration, of this President, will be that all income taxpayers deserve tax relief, and no one should be denied tax relief because they worked hard and were successful.


 * Q   In the spirit of bipartisanship, does that mean he's now open to tinkering with those four brackets?


 * MR. FLEISCHER: You heard the President address that today.  He thinks his proposal's the right one and will fight for it.


 * Q   Ari, who initiated today's lunch meeting between the Chairman of the Federal Reserve and the President?  Will it be a regular thing?  And are taxes on that agenda?


 * MR. FLEISCHER: It will be a periodic meeting.  I don't know that it's going to be a regular meeting, I haven't inquired.  And the agenda will be private, their discussions will be private, as is the tradition between --


 * Q   And who initiated today's lunch?


 * MR. FLEISCHER: I'd have to find out.  Don't know.


 * Q   Ari, can we go back to Energy just for a minute?  Let me talk about energy.  As you know, the ten Western governors met with the Secretary of Energy in Oregon on Friday.  They asked that a cap be placed on wholesale sales of energy to those states, and the federal government, through the Energy Secretary, has said thanks, but no thanks.  Is there anything the federal government can do to alleviate the situation?  And is this in a way punishing California because the President California?


 * MR. FLEISCHER: Not even close.  As far as the notion of price controls, the President does not believe that price controls work, and that is why he does not see that as an option that would be helpful to anybody, in either the short run or the long run.


 * As for the question of what can the federal government do, we are reviewing whatever steps the federal government can do. We're pleased to see that California has acted and has passed legislation to begin to address the problems in California.


 * But I want to remind you that, for example, the question of the two-week extension that the President provided to have forced sales of energy and natural gas, electricity and natural gas from other Western states to California, is not a one-way street. By providing that from the other states, it creates an impact on those other states.  It affects their ability to have energy for their needs within those states.  It's not as if you can just flip on a Western switch and power California.  It has implications for the region as a whole.


 * The President was pleased to extend that order for two weeks. It expires tomorrow, and it shall expire tomorrow.


 * Q   And it will not be extended again?


 * Q   Has the President changed his thoughts about the importance of Africa, especially since Colin Powell last week said that Africa is very important to his agenda.  And also, what are the President's thoughts about the letter from Dick Gephardt and Bill Clay about renominating Ronnie White?


 * MR. FLEISCHER: On the question of Africa, the President himself brought that issue up in the meeting of the Congressional Black Caucus last week and said that Africa will be on the front burner of foreign policy for him, that it is a priority.


 * And the question of the nominations, I'm not going to discuss personnel. The President is aware of the request.


 * Q   I have a follow-up to the Africa situation.  During the second debate with Gore, he said -- basically he said that Africa wasn't as important as European countries.  So what made him change his thoughts?


 * MR. FLEISCHER: I'm not sure that's a fair characterization of what he said in the context of that debate.  But the President said what he said last week at the Congressional Black Caucus.


 * Q   On tax cuts again, you said a couple of moments ago that the President wants to make sure that everyone gets tax relief?


 * MR. FLEISCHER: Yes.


 * Q   And that was framed along the idea of making sure the people in the upper income brackets get income tax relief.  But, as people start talking about this on the Hill, they are going to have to live within a budget.  And, as you know from your time in Congress, those with the most influence get what they want.  And the people with the most influence tend to be corporations and upper income earners. What will this President do to ensure that middle and lower income Americans do get their tax relief as this process goes through on the Hill?


 * MR. FLEISCHER: Let me dispute the premise of that.  I think we have a rather balanced system, where all Americans get represented in the end rather fairly.  I can cite you a number of pieces of legislation that were enacted into law.  The Welfare Reform of 1996, for example, was very bipartisan and I think that helped lift up a lot of people in this country who were suffering and who were poor.  And I am not sure they are the best represented in this town, but that piece of legislation was, indeed, one of the noblest and most helpful legislations.


 * So on that score, what's important is that you have leaders both in the White House and the Congress who hear the voices of those who are on the bottom. And that is one of the reasons I want to remind you that President Bush sent his tax writers back to the drawing board in the fall of 1999.  That's one of the reasons President Bush then took on the Republican House of Representatives, to fight for the Earned Income Tax Credit program.


 * Those are beliefs that are fundamental to President Bush. And, as a result of that, that's why, frankly, he doubled the child credit from $500 to $1,000.  That disproportionately helps lower income people.


 * Q   So in the next 180 days, he will do what to ensure that those people, that as you say he has fought for in the past, get their slice this time?


 * MR. FLEISCHER: He will fight for his tax plan with everything he can. Because his tax plan does disproportionately help people at the low and middle income ends of the scale.


 * And the reason I say that is any time you cut taxes across the board, people who pay the most taxes will receive the dollars back generally in proportion to which they pay. And, as I explained earlier, the top 10 percent of taxpayers in this country pay 65 percent of the income taxes. The bottom 20 percent of taxpayers in this country pay less than one percent of all taxes in our society -- the bottom 20 percent pay less than one percent.


 * The President wants to still help and protect those bottom 20 percent and that's why the proposal he sends up there cuts that lower rate from 15 percent to 10 percent, which was a previously unheard of notion on Capitol Hill.


 * Q   So if it comes to a budget crunch and somebody has to go without, will he fight for the people in the lower income bracket?


 * MR. FLEISCHER: He is going to fight for his proposal, which takes care of all income tax paying Americans.


 * Q   Ari, last week you said that the defense budget the President sends up will be lean.  I am wondering by "lean," how that will stack up with the numbers that President Clinton submitted in his place-holder budget.  Is it going to be more than that, less than that, about the same?


 * MR. FLEISCHER: The President believes very much that we need to make certain that America's military is the best in the world and is able to complete its mission and is very concerned about cutbacks that have affected the military.  And he was looking forward to the Pentagon completing its review which Secretary Rumsfeld has directed the Pentagon to begin.


 * At the end of that process, we will have then a new strategic vision of what the force structure for the Department of Defense and for our nation's military will be and at that point, the President will be in a stronger position, along with Secretary Rumsfeld, to make those determinations.


 * Q   But that won't be done in time for your budget submission.


 * MR. FLEISCHER: Correct.


 * Q   What's your first year plan?  Is it going to be the Clinton placeholder or are you going to ask --


 * MR. FLEISCHER: No, it will be reflective of the President's promise during the campaign to increase defense spending by approximately $45 billion, where that extra money goes to give military men and women a pay increase and to improve housing.  The rest of it will be determined by the force structure review and the president looks forward to working with the Secretary on that.


 * But that is also part, I think, of a wise approach to budgeting. Identify first what the strategic needs are. Once you've identified the strategic needs, then work directly and closely with your Cabinet secretaries to have the exact dollar amount required to fill out those needs.


 * Q   Ari, can you clarify something on retroactivity?  The President said today he is for it.  Is he going to formally propose it on Thursday? Will that be in --


 * MR. FLEISCHER: No, the proposal he will make Thursday will mirror the proposal he made during the course of the campaign.  And as he indicated today, he will work with members of Congress on the question of retroactivity.  He supports it.


 * Q   So he's for it but he's not going to propose it?


 * MR. FLEISCHER: That's correct.  He is going to propose the plan on which he ran.  But, just like on education, we made some minor modifications to the education package because of some of the things he heard on the Hill.  He has shown a willingness to work with members of Congress on both parties on all his proposals.  And you are going to continue to see that.


 * He is going to fight for the package that he proposed in the campaign, the core principles in it, and we are going to work with the Congress.


 * Q   Ari, the President said or you said the President believes that the surplus is the taxpayers' money.


 * MR. FLEISCHER: Correct.


 * Q   But that raises the question of whose money is the debt. Presumably, any delay in paying off the debt continues the obligation of future taxpayers to pay, you know, for the borrowings made now and in the previous years.  So how does he resolve that, you know, moral question?


 * MR. FLEISCHER: And that's exactly why the President's proposal pays down debt as well.  Under the President's plan, and actually over the last three years, debt has been paid down by $600 billion.  The budget the President will send to the Congress will continue that pattern of paying down the debt and, until we are able to enact a Social Security reform, which the President is committed to, $2.5 trillion over the next 10 years of Social Security surplus will be earmarked for debt reduction.  And that also puts us in a stronger position, then, to reform Social Security, because we will be doing so from a basis of less debt.


 * In fact, by some estimations all available debt, even after our tax cut is enacted, will be paid off by 2006. Virtually the end of his first term; just after that.  And that is --


 * Q   -- what do you mean --


 * MR. FLEISCHER: All available debt.  All available debt.  And that's a reflection of the fact that there are some bonds that are two-year or three-year issues that are longer-term bonds, and it makes no economic sense to pay those off before they're due.


 * What you do is -- the Treasury Department last week announced, for example, they're no longer going to issue one-year Treasury notes. I mean, it's just a remarkable event in our economic lives for people who mark remarkable events by economic things like that.


 * Q   So this, the publicly held portion of the debt could be paid off by --


 * MR. FLEISCHER: It's all available public portion of the debt.  And again, all available meaning that it just makes no economic sense to prepay bonds, to snatch bonds out of the hands of the people who invested in them, before they're due.


 * Q   Ari, do you have a number for that publicly held debt that you're talking about?


 * MR. FLEISCHER: Check the CBO books.  Or OMB will have it, too, at the time.


 * Q   The administration has said repeatedly that it's not going to get involved or interfere in the election.  But is President Bush consulting with foreign policy advisors about different scenarios that could emerge after tomorrow's election?


 * MR. FLEISCHER: He's always talking with his foreign policy advisors. He met with Secretary Powell this morning, for example.  But I'm not going to indicate anything beyond that, obviously, the election takes place tomorrow.


 * Q   Ari, you had said two weeks ago that the administration was going to keep its promise and move the embassy to Jerusalem.  Secretary Powell yesterday suggested that's on hold.  How long is that on hold for?


 * MR. FLEISCHER: I think what the Secretary said is that the process is beginning, and the process is going to be cognizant of the realities of the situation in the Middle East.  And the President has indicated that he has asked General Powell, Secretary Powell to take a look at this matter and begin the process.


 * Q   Ari, you have repeatedly responded to our questions about the vandalism of White House offices and the looting of Air Force One discovered on January the 20th by directing us to look forward rather than backward, because, quote, "it's all over."  But on February the 2nd, there was deafening Republicans applause when the President said, just don't take any silverware.  Now that the President has justified our inquiry into the January 21st past, can you, looking to the future as you've asked, can you assure us that in 2005 or 2009 when you leave, there will be no such vandalizing or looting of Air Force One?


 * MR. FLEISCHER: You can check my pockets now if you would like.


 * Let me look into the past for a moment. When the President made that remark -- that's a remark, for those of you who covered the campaign, you've heard it many times prior in Austin, as people visited the governor's mansion.  It's one of his favorite things to say.


 * Q   But there was silverware on Air Force One, though, Larry.


 * Q   Larry?


 * Q   He must have known there was silverware on Air Force One, didn't he, that was missing?


 * MR. FLEISCHER: I would remind you that silverware existed before Air Force One existed.


 * Q   In response to the question about the defense budget, you seem to be saying it'll be Clinton plus $45 billion.  Did I hear you right?


 * MR. FLEISCHER: The President proposed increasing defense spending by $45 billion during the course of the campaign above baseline.


 * Q   Right.  And the question was, will that be on top of what Clinton proposed?  And you seem to be saying --


 * MR. FLEISCHER: Well, above baseline.  We will begin, of course, with this year's budget submission being a new submission, baseline will be the marker.


 * Q   So it would be this year plus $45 billion?


 * MR. FLEISCHER: If that's baseline, that's correct.


 * Q   Ari, there are all kinds of reports that the administration is worried from violence after the Israeli elections.  How is the administration going to deal with the situation in the Middle East immediately after the elections?


 * MR. FLEISCHER: The United States will remain engaged in the peace process and being a helpful partner to secure peace in the region, and will continue to maintain the position of any agreement that is reached by -- the parties in the Middle East, we will support.


 * Q   Given the President's efforts to change the tone of politics in Washington, was he at all disappointed with the tone of Terry McAuliffe's acceptance speech at the DNC on the weekend?


 * MR. FLEISCHER: Well, I would have to say that I thought those remarks were disappointing.  I think that it is incumbent on all people and all parties, even those who occupy the party posts, which are normally the most vociferous, to recognize that a new beginning is starting here in Washington.


 * There is an old Washington, and that old Washington is often marked by rancor and division and partisanship, which leads to gridlock. President Bush is endeavoring to create a new Washington, and that new Washington should be marked, in the President's opinion, by principled disagreements and by civility.  And that extends even to the heads of the parties.


 * Q   He thought his remarks were not principled and were uncivil?


 * MR. FLEISCHER: Well, I think that continuing to question the legitimacy of an election that I'm not certain that even the Democrats in the Congress would share that point of view is not a wise way to begin tenure.


 * Q   Is it uncivil or unprincipled?


 * MR. FLEISCHER: Well, I just think again it's disappointing.  Our nation has spoken and President Bush is the nation's President.


 * Q   Can you guarantee that the RNC Chairman will not engage in any such partisan remarks?


 * MR. FLEISCHER: Well, again, I said there is a role to be played, and each of the party leaders does occupy the position to be the most voluble in politics, which is proper.  And that's their job.


 * But again, the new Washington the President is seeking to create is going to try to tone that down, to create more civility and less rancor. It will happen. It will happen from all parties, from time to time.  We can't stop it.  What we can try to do is diminish it.  And the President addressed this question, frankly, in his National Prayer Breakfast remarks, when he talked about civility.  And he said it in those remarks last Thursday that we can't make it go away overnight.  There are many things we can't ever make it go away.  But we can try to do less of it.


 * Q   Sorry, another question on the tax cut.  In his remarks a couple of weeks ago, Chairman Greenspan made a special point of urging members of the Finance Committee to try to create some kind of mechanism for a trigger that would suspend tax cuts if these extraordinary surplus projections did not come to pass.  Will there be anything in the legislation that the President sends to Capitol Hill on Thursday on that topic?


 * MR. FLEISCHER: Let me remind you that Chairman Greenspan's remarks applied to tax cuts and spending.  That's what he said.


 * Q   But he said specifically suspend a tax cut.


 * MR. FLEISCHER: He said for both spending and tax cuts.  I think the point he was making is, this town has often spent money, and he prefers to see a trigger, as he said, on that.  He did say that applied to tax cuts as well.  But it applied both ways.


 * But the President's position is that is important to enact tax cuts, to enact tax cuts based on the best, most accurate, reliable forecasts that we have. And that's where his focus will be.


 * Q   Did the President communicate to the RNC Chairman Gilmore his desire to reduce his rancor?  I mean, did he personally express that, because the RNC did take a leading role during the Clinton administration.


 * MR. FLEISCHER: I think there's hardly anybody in this town who hasn't heard the President say that.  And I would remind you at a fundraiser last year, at the Armory here in Washington, with some of the most influential Republicans in town, the President delivered those remarks too, and told everybody we need to tone that down.  That's a message -- he's not going to shy away from saying that to Democrats or Republicans.


 * At the Republican retreat, he had similar words, frankly, that dealt with the nomination of Senator Ashcroft to Attorney General. The President said to the Republicans at the joint House-Senate retreat that we should move beyond this, that he knows that there are many Republicans who are angry with the Democrats for the manner in which they treated this nominee. And he said, we should have no incriminations.  We should move forward. And it's going to take time.  It will still happen.  Both sides -- there will be instances where people say things.


 * And that is part of Washington. And we're not going to be able to make it go away over night.  But I do think it begins with the manner in which the White House and White House officials comport themselves, and I do think you're seeing it start to spread.  Hopefully it will be contagious, and we'll see how far we can take them.


 * Q   There seems to be some confusion as to whether or not some of the gifts that the Clintons took from the White House were intended for the White House itself or for the Clintons themselves. What is the White House doing to try to resolve this confusion?  The President said he'll wait to see the facts as they come out.  Who is collecting those facts and when will they come out, and what is the White House position on that?


 * MR. FLEISCHER: The President did address that earlier today.  I would refer you to his remarks.  I know that the former President's staff has been in touch with the Curator's Office here and I know that the Curator's Office will be helpful in trying to help the former President to ascertain what it is they need.


 * Q   Is the Curator's Office empowered by you or someone at the White House to answer questions?  Because when we call and ask and they refer you to your office, who refers us back to the Curator's Office.


 * MR. FLEISCHER: We will try to fix that infinite loop.  We will try to be helpful to you on that.


 * Q   Ari, you talked about the possible missile attacks by rogue states in the context of a national missile defense.  Is North Korea one of those rogue states you have in mind?  Does this administration still call North Korea a rogue states?


 * MR. FLEISCHER: I am not going to go down and start delineating states.  The President's concern is general.


 * Q   There has been a certain amount of vagueness to some of the proposals that you guys have --


 * MR. FLEISCHER: A certain amount of what?


 * Q   Vagueness.


 * MR. FLEISCHER: Vagueness?


 * Q   There hasn't been specific legislative language attached to them, necessarily.  And I was wondering if what you are sending up on Thursday is an actual bill or it's just a series of proposals?


 * MR. FLEISCHER: Let me remind you that, seldom does the President send up to the Hill bill language.  That is traditionally the job of the Congress to take proposals and put them into legislative language with all the subsections and all the little symbols that very few people understand what they mean.


 * Presidents traditionally send up detailed specifics, which is what we did on the education proposal the President made. It was very detailed; and on the faith-based proposal the President made.  And that is the pattern we will continue; you will see that on Thursday.  And there will be a lot of specificity to it.


 * But legislative bill language? No, we're not going to do that now.


 * Q   Yesterday, Secretary Powell said that he considered AIDS to be a national security issue and concern, presumably from the foreign policy aspect.  Has the President decided to either raise or lower the AIDS budget for developing countries such as Africa, or even domestically, compared to the Clinton budget?


 * MR. FLEISCHER: That will be a line item that will get worked out much closer to submission of the actual line items in April.  That was an issue that the President had again himself brought up in the meeting with the Congressional Black Caucus and he discussed the problem of AIDS.  In that case, he brought up the problem of AIDS in regard to Africa and some of the successful AIDS programs that are under way in that continent.


 * Q   Does he plan to name an AIDS coordinator, a post that's existed in previous administrations?


 * MR. FLEISCHER: I am still trying to review the information about that office, as well as a couple other offices.  We talked about that before.  I have nothing further yet.


 * Q   How much flexibility will the White House have toward possibly increasing the size of the tax cut and at what point would the tax cut become so large that it would either be economically harmful or would be fiscally irresponsible?


 * MR. FLEISCHER: As you know, the process begins this week when the President sends his plan up to Congress and we are going to focus on fighting for that proposal that the President is going to make.  I think that might be a question to ask sometime down the road if it comes to that point.  You know, perhaps, the Congress will adhere very closely to what the President has suggested.


 * Q   Not that you have even sent the plan up to the Hill yet but you still haven't fully answered where the transition costs for privatizing Social Security is going to come from in all of this.  You said general revenue, but --


 * MR. FLEISCHER: I think you should wait until we move forward on Social Security.


 * Q   Where do you get the extra $1 trillion?


 * MR. FLEISCHER: Let's wait until we move forward on Social Security.


 * Q   Ari, the Canadians have expressed some opposition to the missile defense plan, and also to drilling in Alaska.  Are those going to be the primary topics of the President's meeting with Chretien this evening?  Or is he going to steer the conversation more towards expanding free trade?


 * MR. FLEISCHER: I think the meeting is an early opportunity for them to get to know each other, a two world leaders' get-acquainted session. You will have a readout later tonight, and so you'll have some indications about the types of things that were discussed, so I don't want to preview that.  But I think trade is very important with Canada, the upcoming Summit of the Americas, which will be in Quebec from April 20th to 22nd.  Surely I think -- I would advise you to wait and then you'll get a readout tonight, and have a better report.


 * Q   What do you say to the Canadian officials who say they felt kind of slighted that he was traveling to Mexico first?


 * MR. FLEISCHER: Well, I think the Canadian government is very pleased that Prime Minister Chretien will be here for this first visit.  And frankly, all our discussions with the Canadians have been nothing but positive, and the President looks forward to the meeting tonight.


 * Q   On the slight front, why isn't Prime Minister Chretien staying at Blair House?


 * MR. FLEISCHER: I don't have any information on that.  It's a working visit.


 * Q   What time is the readout?


 * Q   That does --


 * MR. FLEISCHER: I think for state visits they typically will stay there.  For working visits there is a lot more variety than that.


 * Q   -- extended that courtesy?


 * MR. FLEISCHER: I think you do; for working visits, it's of a different nature.


 * Q   This is a working visit?


 * MR. FLEISCHER: That's my understanding.


 * Q   What time is the readout?


 * MR. FLEISCHER: The readout will be after dinner, so it all depends on how fast they eat their food.  So I think -- my best estimate for you is somewhere between 8:30 p.m. and 9:30 p.m.


 * Q   It's not a follow-up to some of the previous questions --


 * MR. FLEISCHER: That's okay, you can have an original.


 * Q   Okay.  It's quite original, I hope.  Since last week, Senator Feingold offered an olive branch by voting for Senator Ashcroft; can we expect that negotiations on campaign finance will speed up a bit?


 * MR. FLEISCHER: Well, I think the President has made his position clear, where he stands on campaign finance reform.  And he's had a very good meeting, as you know, with Senator McCain to discuss that.  And we'll just continue to monitor events on the Hill as they warrant, and move forward to try to get campaign finance reform enacted into law.

THE PRESS: Thank you.

1:50 P.M. EST