Press Briefing by Press Secretary Ari Fleischer, January 25, 2001

The James S. Brady Briefing Room

1:07 P.M. EST

MR. FLEISCHER: Thanks for spending your early afternoon with me. A few notices here.

The President has invited Canadian Prime Minister Jean Chretien to meet with him at the White House on February 5th. President Bush looks forward to a meeting and working dinner with the Prime Minister. This will be an opportunity for the two leaders to review the scope of this exceptionally close and important bilateral relationship and discuss its course in the coming years.

The second item -- and then I'll be happy to take questions -- is there was some very important testimony delivered on Capitol Hill this morning by Federal Reserve Chairman Alan Greenspan, who talked about the fact that, in his judgment, the economy can benefit from a tax cut.

As you know, President Bush, throughout the campaign when he announced this tax cut, said that this tax cut will also, in addition to other reasons, serve as an insurance policy against any future economic downturns. We're very heartened to see that Chairman Greenspan has weighed in on the importance of cutting taxes to protect the economy, and we hope that the Congress will join President Bush and Chairman Greenspan in cutting taxes, in passing the Bush tax, cut so we can protect the strength of our economy.


 * Q   Almost everyone agrees that a tax cut would help; even the Democrats are willing to go along with it if it appears somewhere in the range of $800 billion to $900 billion.  The question is, how much?  And do you read anything into Greenspan's comments about whether or not the size of your tax cut is the one he thinks would be appropriate?


 * MR. FLEISCHER: I think what is most important is to protect the economy.  There are certain tax cuts that we need to do because they are simply the right thing in terms of values.  There is no reason that people should pay a tax upon death; the death tax should be abolished.  There is no reason that married people should pay higher taxes simply because they say "I do."  We should reduce the marriage penalty.  But the most effective tax cut you can make to protect the economy, in President Bush's opinion, is a marginal, across-the-board income tax rate cut.


 * Q   Maybe I missed it, but where in his testimony did Chairman Greenspan say -- talk about the importance of cutting taxes to help the economy?  I thought he was saying there was room --


 * MR. FLEISCHER: He is talking about in the soft economy --


 * Q   He was saying there was room in the surplus for cutting taxes.


 * MR. FLEISCHER: But he also talked about an economic softness.


 * Q   But did he link the economic softness to the need for tax cuts?


 * MR. FLEISCHER: I think he referred to the fact that in a time of economic softness, tax cuts could be helpful.


 * Q   But isn't the opposite true, didn't he make the opposite --


 * MR. FLEISCHER: I saw that, actually, in an AP wire story.


 * Q   But I'm looking at his testimony, Ari.  And in fact, he makes the point that -- as the President said, the President said more, as you know, than that we need this as an insurance policy.  He says we need a tax cut now more than ever as a stimulus.  And what Greenspan is saying today, "Such tax initiatives, however, historically have proved difficult to implement in the time frame in which recessions have developed and ended."  So how does that square with what the President thinks is necessary?


 * MR. FLEISCHER: He also said -- and again, there are a series of reasons -- let me repeat the three reasons President Bush believes we should cut taxes --


 * Q   But can you skip to this issue --


 * MR. FLEISCHER: I will.  I'm getting there.  The President believes we should cut taxes because, one, it's the people's money, they paid it into the government, they deserve it back.  Two, and Chairman Greenspan would agree with this, that if you don't cut taxes, the politicians will have more money to spend.  And Chairman Greenspan did weigh in today about making certain that we don't spend the surplus.  And the President believes that we need to cut taxes to help protect the economy.


 * The Chairman, in his remarks, did talk about softness in the economy, and the Chairman in his remarks did talk about -- and this is one of the Chairman's reasons for cutting taxes, he did talk about the fact that there is room in the surplus. So the Chairman did say that, indeed.


 * Q   Wait, you didn't answer the question, though.  He's saying that -- the President has said that the tax cut is necessary now, as a stimulus to the economy.  Greenspan is saying, usually it doesn't work out when you try to provide a stimulus, because it takes too long both to phase in, according to the President's plan, and by the time Congress gets done with it, especially in this kind of economy that's gyrating the way it is, that it really won't work to provide that kind of stimulus.


 * MR. FLEISCHER: We've talked about this before.  Economists do differ about the speed of which a tax cut can impact an economy, although I do believe Chairman Greenspan also did talk about accelerating the tax cut, if I read that -- I read it quickly on my way in here.  But there are a variety of reasons to cut taxes, and I've walked you through some of the President's reasons.  And we're heartened to see --


 * Q   But, Ari, the question is, does the President disagree with Greenspan on the ability of his tax cut to stimulate the economy in the short term?


 * MR. FLEISCHER: I think there's plenty of room for agreement among economists or slight disagreement among economists about the speed at which a tax cut can help the economy.  But clearly, Chairman Greenspan came out today and advocated that there is room for tax cuts, and the Congress can cut taxes, given the budget restraints that we're all operating under, which are now an era of large surpluses.


 * There was a final very interesting note in the testimony as well, which is an intriguing new reason that taxes need to be cut, and that is, if you don't cut taxes, and if these surpluses continue to mount the way they will, the government will sit on excess accumulated cash. And in the previous administrations, they were looking to use that to buy stock, as a government ownership of stock.  Chairman Greenspan has warned against excessive buildups of this type of cash.  Either it gets spent, or it gets used to cut taxes, and clearly nobody wants to spend that money on bigger government.


 * Q   Something else the Chairman said was that he urged that a mechanism be devised to suspend the tax cut if the surplus projections do not come to pass, and also suggested that any talk of front-loading the tax cut should be put on the shelf, because he was saying that it needs to be phased in slowly.  And I know that your plan is phased in at this point, but you've been talking about whether or not to front-load it.  I'm wondering where you stand on those two ideas.


 * MR. FLEISCHER: On the question of a trigger, President Bush believes what's important is to enact the tax cut.  We need to get it enacted, we need to get it on the books, we need to make it a permanent law of the land.  And then, as of any tax cut proposal and a spending proposal, every year Congress and the President will go back and review.  And so, from the President's point of view, what's important is that Congress enact it.


 * Q   You're talking about doing something that Congress has never been able to do, which is to undo tax cuts once they're in there.  I mean, isn't that Greenspan's fear, that you're going to pass --


 * MR. FLEISCHER: Congress has nothing but a history of undoing tax cuts once they're in there.  Congress has often raised taxes.  Let me remind you that it was in 1993 that Congress raised taxes to 36 percent, and to 39.6 percent.  Those were increases from the rate which was established in 1986.


 * The issue that Congress is never able to do is undo spending increases. Spending increases, once enacted, seem to never get taken back. The problem with Washington is that once Congress and Washington spend the money, they don't stop spending it.  The other problem with Washington is they try to keep raising taxes as a solution to problems.  That's another reason we need to cut taxes.  It's just the opposite.


 * Q   Where are you on the second part of my question, though, about the idea that you would give up any talk of front-loading this tax cut?


 * MR. FLEISCHER: We're still looking at the exact speed at which it will be phased in and the exact dates at which it will be phased in, the rates, et cetera, and the question of retroactivity; we're still looking at it.


 * Q   And based upon Mr. Greenspan's comments, would you be disinclined to do that?


 * MR. FLEISCHER: No, we're still looking at that.  It remains an option.


 * Q   Ari, a question for you.  When the Federal Reserve announced the rate hike a while ago, the President commented --


 * MR. FLEISCHER: Rate cut.


 * Q   Rate cut, excuse me -- he commented after, saying that he decided he was not going to comment anymore.  I'm wondering -- you view the Federal Reserve as an independent body -- do you not feel that you should not comment even on comments that the Federal Reserve Chairman makes on tax cuts or any type of --


 * MR. FLEISCHER: No.  I think that when it comes to public testimony in a question and answer session with people on Capitol Hill, it's appropriate to mark it and to note it.  The President agrees.


 * Q   You're planning on unveiling this tax cut proposal with all its details the week after next?


 * MR. FLEISCHER: We'll keep you advised on the exact date.  But it's coming up.


 * Q   But that's been the impression that you've created, that it's going to be the week after next.


 * MR. FLEISCHER: I always like to leave a little flexibility in terms of the exact dates or weeks of an announcement, but it's coming up.


 * Q   Democrats have been laying out the cost of your plan.  On the Hill today, for instance, in the Greenspan hearing, Senator Conrad laid out his version, which is the same that Daschle laid out yesterday, which is $1.6 trillion, plus $400 billion in lost interest savings, plus $200 billion to fix the alternative minimum tax.  Do you accept all of that as being the cost of the Bush tax cut?


 * MR. FLEISCHER: Well, I can't help but notice this funny new standard that is trying to emerge from those who have historically been resistant to tax cuts, and that is for the first time they're attaching the cost of interest expenses to the proposal without analyzing it as part of interest costs as opposed to tax cuts.


 * For years people made spending proposals and never attached interest costs to it. Many of the same people today who said you have to attach interest costs to tax cuts have never attached interest costs to spending increases, for which they were generally known.


 * So it is a separate budgetary item -- it is a legitimate item. Of course, there are interest expenses that are incurred as a result of any decision, whether it's a spending increase or whether it's a tax cut. But to attach it to the cost of tax cuts is not valid, not valid at all, because what they're suggesting is that the tax cut is -- and then they give a number.  That's not the cost of the tax cut.


 * Q   Did President Bush, when he was campaigning, call for a fix in the alternative minimum tax, and is $200 billion the figure you would accept for the cost of that?


 * MR. FLEISCHER: In the President's tax plan, he addresses the complication created by the alternative minimum tax on the tax credit provisions that are part of his legislation.  Under current law, and this was something that was really exasperated in 1993 under the tax plan that was passed when the alternative minimum tax rates were increased and it was not indexed for inflation.  The result of that was it has put millions of middle-income Americans at risk of paying the alternative minimum tax.


 * As a result of that action in 1993, we have protected the child credit doubling, from $500 to $1,000, from the impact of the alternative minimum tax. So the new credits in the President's proposal are protected from the AMT.  There is an additional AMT problem that is widely recognized that affects individuals.  There is corporate AMT, as well.  And that is a worthy area to discuss with the Congress.


 * Q   Can I ask you a question about hiring practices?  This administration's policy that it is appropriate or inappropriate to ask a perspective employee his or her sexual orientation?  And if it is inappropriate, would a department head who asked such a question face any sanctions?


 * MR. FLEISCHER: That is not a question that we ask, and I'm not aware of anyone who has done such a thing.


 * Q   Do you know if it is appropriate or inappropriate to ask such a question?


 * MR. FLEISCHER: I would refer you to the law, and we do not ask that.


 * Q   But, Ari, there is an allegation in the Washington Post today from a man who was interviewed by John Aschcroft who says that he asked that very question, and this is, in fact, corroborated by a contemporaneous witness.  So there is someone who in the administration, or perspective administration --


 * MR. FLEISCHER: And Mr. Ashcroft has said that he does not recall saying that or asking that.


 * Q   Well, he doesn't rule out the possibility that it might have happened.


 * MR. FLEISCHER: I refer you to what he said.


 * Q   Ari, as we all know, the President Clinton pardons are quite controversial.  Without addressing the specifics, is President Bush committed to following the established procedures, pardon procedures, including notifying the Justice Department?


 * MR. FLEISCHER: I've not been part of any discussions on pardons after three days or four days.  I'm not aware that the President is moving to pardon anybody.  But I'm not aware of any procedures.  I think I'd refer you to Department of Justice on that, and then check back later.


 * Q   Ari, as you know, on January 4th, President Clinton renominated Roger Gregory for the 4th Circuit.  Today two Republican senators -- said that he should be confirmed.  Does the administration favor a confirmation hearing, or are you going to withdraw that nomination?


 * MR. FLEISCHER: I have not heard us weigh in on that.


 * Q   Senator Daschle says he was mis-quoted here yesterday when you indicated to us that he had told the President that all of his nominees would be confirmed.  What exactly is the truth here?


 * MR. FLEISCHER: Well, the President received -- one of the reasons the President thought he had such good meetings yesterday, among a number of reasons, was he did receive assurances that all his nominees would be confirmed.


 * Q   He says you misquoted him.


 * MR. FLEISCHER: I would differ.


 * Q   He said that what he told the President was that there wouldn't be any parliamentary moves by Democrats to block the nominees.  He said you have to be a clairvoyant to know exactly what the outcome was going to be.


 * MR. FLEISCHER: I stand by what I said.


 * Q   Do you disagree with him?


 * Q   And he also talked about energy supply.  What do you read from what he said about the need to increase energy supplies, and also the risk to the national economy from what is happening in California?


 * MR. FLEISCHER: Let me remind you that the looming energy problem that our nation faces have been long in the making, back to last fall, of course, when the previous administration thought the problems were so serious that they decided to tap the Strategic Petroleum Reserve.  There were warnings at that time from President Clinton that the energy problems could cause a recession.  So that is a very serious ongoing problem that we need to face.


 * I think there are two issues involved here -- one is the nation's need to enact a long-term, comprehensive energy plan, which President Bush has proposed. The other is helping California with its energy problem, which is of a different nature.  I think that it's safe to say even if there was no national energy problem, California would still be going through what it's going through.


 * Q   Let me just follow up on that if I could.  Did you read anything into what he was saying about drilling for more natural gas and the need to increase supplies?  Do you draw any interpretations from that with regard to your policies?


 * MR. FLEISCHER: The President does believe, as you've heard in the testimony, as well, that we need to increase America's energy supplies, that we need to address the fundamental supply and demand and balance by increasing America's supply.


 * Q   But is there any role for federal coordination --


 * Q   The Utah legislature has reversed itself with regard to the electricity deregulation.  And this measure was also given the okay by the Republican governor of Utah.  Do you think that in light of what's going on in California, there's a backlash against electricity deregulation and move towards --


 * MR. FLEISCHER: I have no information on Utah specifics, but obviously some states have moved ahead with it and are pleased with how it's worked.  Other states enacted it differently and are not pleased with how it works.


 * Q   Ari, does the administration have any specific ideas about how to help California, helping California with its problems?


 * MR. FLEISCHER: We're reviewing a number of options that may be helpful to California, and as events warrant, we have may have something to add.


 * Q   Can you be more specific about --


 * MR. FLEISCHER: Not until -- they're not announceable yet.


 * Q   I have two questions about the Andy Card memo of January 20th on regulations.  Number one, one of the provisions in there talks about postponing the 60 days regulations that have already been published. I'd like to know what the legal authority is to allow the administration to do that.  And my second question deals with Andy Card and Congress.  Do you know of any moves to go to Congress to ask Congress to pass any legislation to actually rescind regulations, which Congress is allowed to do?


 * MR. FLEISCHER: On the question of the legal authority, of course, they're all done with the concurrence of White House legal counsel; they wouldn't be done otherwise.  On the question of legislation, that is always possible, and often it does take legislation to undo a regulation. You can also undo regulations through the regulatory process, but it is time-consuming.  So, too, is, of course, the legislative process.


 * Q   Well, as a follow-up, are you saying that if a lawyer advises a client, in this case the President, that you can do something, that that's your legal authority rather than pointing to something by statute?  I'm asking you what statute -- not whether a lawyer tells his client you can do it.


 * MR. FLEISCHER: I refer you to legal counsel.  I'm not a lawyer. We check these things thoroughly with legal counsel.  Legal counsel reviewed it, and it's in full and proper keeping with legal counsel.


 * Q   Could I use your name when I call them up as a reference?


 * MR. FLEISCHER: Yes, let me know if you get your call returned.


 * Q   Is the President committed to doing the radio address every Saturday, and if so, how does he plan to use it, what does he hope to get out of it?


 * MR. FLEISCHER: The President will begin the first radio address this Saturday.  I do anticipate they will be weekly events.  The President views the radio address as another helpful way to talk to the American people.  I think what you'll find is there will be occasions where he uses them to give broad speeches or broad approaches to his policies.  There may be other times where he chooses to use those radio addresses to make very specific announcements about administration initiatives.


 * Q   Do you know the topic for this week?


 * MR. FLEISCHER: I'll deal with that tomorrow.


 * Q   Ari, on the vandalism issue, you made light of that the other day, but is this now the subject of a more serious investigation, internally?


 * MR. FLEISCHER: There is no investigation.  What we are doing is cataloging that which took place.  And that's the status.


 * Q   We know about the W's, graffiti in the bathrooms.  Can you describe what else was done?


 * MR. FLEISCHER: David, I choose not to.  I choose not to describe what acts were done that we found upon arrival because I think that's part of changing the tone in Washington.  I think it would be easy for us to reflect and to discuss these things and to be --


 * Q   It is government property.


 * MR. FLEISCHER: -- and to be critical.


 * Q   This is taxpayer funded property.


 * MR. FLEISCHER: President Bush chooses to set a different tone, and that --


 * Q   How is this a tonal issue?  This is about government property, as you said the other day, that has to be replaced at taxpayer money.  Were there telephone wires cut, was there graffiti, were there keyboards that had to be replaced because they were vandalized property?


 * MR. FLEISCHER: The President understands that transitions can be times of difficulty and strong emotion, and he's going to approach it in that vein.


 * Q   What's the purpose of cataloging it?


 * Q   Why give them -- if you're going to give them a pass, why bother to catalogue it?


 * MR. FLEISCHER: We'll just make sure we figured out what happened.


 * Q   What's the purpose of that?


 * MR. FLEISCHER: Just to figure out what took place.


 * Q   Is there a dollar figure?


 * Q   If you're not going to report it to the people who are paying for it, why --


 * MR. FLEISCHER: I'm sorry?


 * Q   Is there an estimate on how much this damage has done?


 * MR. FLEISCHER: There is no estimate.


 * Q   Is strong emotion a defense against a criminal charge?


 * MR. FLEISCHER: Well, there are no criminal charges to be made.


 * Q   I'm upset right now.  (Laughter.)


 * Q   -- in Washington it's necessary always to blame somebody?


 * MR. FLEISCHER: I think what everybody did is they took Tom Herman off their speed dial.  (Laughter.)


 * Q   You've got to blame somebody in this town, Ari.


 * MR. FLEISCHER: But you know -- the question is, do you have to blame somebody in this town?  And bear with us.  President Bush is not going to come to Washington for the point of blaming somebody in this town. And it's a different way of governing, it's a different way of leading.


 * Q   It's not about blame, Ari, it's just about what happened.


 * MR. FLEISCHER: But it attaches itself to blame, and that's a road that President Bush is choosing not to go.


 * Q   Has anyone from the Clinton administration called to apologize?


 * MR. FLEISCHER: There was a phone call made to the office of the Vice President.


 * Q   By who?


 * MR. FLEISCHER: I'll leave it as a private conversation.


 * Q   Did Vice President Gore call Vice President Cheney?


 * MR. FLEISCHER: I don't have any information on that.


 * Q   Did Mrs. Gore called Mrs. Cheney?


 * MR. FLEISCHER: I really -- I know that a phone call was made to the Vice President's office, but I don't recall who made it.


 * Q   To the Vice President himself?


 * MR. FLEISCHER: To the office.


 * Q   And was that where most of the damage was, Ari?


 * MR. FLEISCHER: I really stopped paying attention to all the different places.


 * Q   There is a report that you have someone investigating this now.


 * MR. FLEISCHER: No, that's not right.  I've noted that report, I've looked at it; that's not accurate.


 * Q   Was the nature of the call apologetic?  Was it an apology?


 * MR. FLEISCHER: I didn't get a read on the call.


 * Q   Staff to staff, or was it a principal --


 * MR. FLEISCHER: I don't know.


 * Q   On reconciliation, is there any word on President Clinton's involvement in foreign affairs?


 * MR. FLEISCHER: In which affairs?


 * Q   In foreign affairs.


 * MR. FLEISCHER: President Clinton's involvement?


 * Q   Is there any word on President Clinton's possible future role in any capacity in foreign affairs?


 * MR. FLEISCHER: No, I have no word for you on that.


 * Q   Did you find the flak jacket since Monday?


 * MR. FLEISCHER: Yes, the flak jacket has been found and duly reported here.


 * Q   Where was it?


 * Q   Does President Bush have any plans to close or alter the White House Office of National AIDS Policy?


 * MR. FLEISCHER: We're reviewing all the offices that are set to expire by previous agreement, and he will, as events warrant, have something to add to that or say on that.  There are many office that have a term to expire here.


 * Q   On that particular one, people in the health care community are saying they're hearing the plan is to close it.  Is that the case?


 * MR. FLEISCHER: No decision has been made.  We're still reviewing all those offices and finding out where the most appropriate place is to put any missions that have been underway.


 * Q   Ari, a follow-up to that.  President Bush said when he went to the NAACP that civil rights would be a cornerstone of his administration.  And there is an office under the Clinton administration called The President's One America.


 * MR. FLEISCHER: Right.


 * Q   Is he planning on keeping that or something similar to that?


 * MR. FLEISCHER: Same answer.


 * Q   Basically, it's going to go --


 * MR. FLEISCHER: Same answer.  We have made no decision on those. We're taking a look at those offices and determining whether or not there are other appropriate venues or places for them.  The missions are important missions and we're just dealing with what exactly is the best place, and we have made no decisions about any of those yet.


 * Q   On the civil rights front, has he made an appointment with Reverend Jackson as of yet to come here?


 * MR. FLEISCHER: Nothing that I'm aware of.


 * Q   But he still wants to meet with him?


 * MR. FLEISCHER: That's what he said to Reverend Jackson. Nothing's changed since then.


 * Q   Ari, on Greenspan, one of the things that Greenspan said in addition to endorsing tax cuts is that the economy is probably at a near standstill right now.  I think he said the words, probably near zero growth.  Are there additional steps that the administration wants or needs to take to address that more quickly than cutting taxes?


 * MR. FLEISCHER: Well, I think it's important to focus on a couple items, but they're long-term in nature.  One of them is education.  That is a key part of the economy -- making sure we have a work force that is able to be entered into, particularly the high-tech community, to have America's work force be job-ready.  And the second is energy policy does impact the economy.  That, too, is a vital part of keeping the economy strong.  And that's, again, why President Bush believes that the Congress will need to pass his energy policies.


 * Q   It looks like from what he's saying that we're on the cusp of going into negative growth in the next quarter.


 * MR. FLEISCHER: And we're going to continue to monitor it and see what the economy does.  I would remind you that Vice President Cheney warned about this; many other people in our administration have been warning about this, and people said to us that we were not giving accurate information.  With every passing day, it looks like President Bush's admonitions about the strength of the economy are increasingly true.


 * Q   Ari, what can you tell us about tomorrow, how the President plans to round out Education Week, what he's got planned?  And also, you sort of said this at the gaggle.  I wonder just in a sense of how you all are feeling with almost the first official week of business coming to an end?


 * MR. FLEISCHER: We'll have information out on tomorrow's meetings a little bit later today, so let me suspend on that.  But I do want to say, this is our fourth day in office, and I think it's fair to say that this administration is off to a very strong and fast start, particularly given the fact that we had a shortened transition due to the Florida recount.  So we're all very heartened by it and very encouraged.  I think it's a sign of a strong leader.  I think it's a sign of growing bipartisanship in Washington that has allowed us -- and thanks to the Senate, both to Leader Lott and to Senator Daschle -- for allowing us to be able to have this fast start.  The Senate has been very cooperative.


 * Q   So we're going to see week to week -- this week, education, and then faith-based will be sort of the week theme of next week?  Is that the plan?


 * MR. FLEISCHER: That's correct.  The prescription drug language, the prescription drug proposal the President has to help seniors get prescription drugs will also be sent to the Hill.  And we'll have more on that --


 * Q   Next week?


 * MR. FLEISCHER: -- we'll have more on that.  And there will be some weeks where you're going to see a strong focus on one issue -- not exclusive; there was no intention to have an exclusive focus on one issue. But there will be weeks where we have a strong focus on an issue.  There will be other weeks where there will be several issues discussed at any one time.


 * Q   So, as I understand, faith-based and prescription drugs, both proposals going to the Hill next week?


 * MR. FLEISCHER: Next week.


 * Q   On that subject, Ari, will the proposals that the President sends to the Hill next week track very closely with his campaign proposals in those two areas, or will there be differences?


 * MR. FLEISCHER: They will.  The President made a series of promises during the campaign and he's going to honor them.


 * Q   No substantial differences?


 * MR. FLEISCHER: That's correct.


 * Q   We should expect the helping hand proposal?


 * MR. FLEISCHER: Indeed, you should.


 * Q   -- explain the criticism it's gotten of people objecting to going through the states --


 * MR. FLEISCHER: That's correct.  The President ran on it, he believes in it, he will submit it.  We're also heartened to see the very strong support there is now for bipartisan broad Medicare reform.  That, too, is an important issue.  The Medicare system was set up in 1965 in world where we really had hospitals and you had doctors and the two didn't really commingle unless you have to go visit the hospital because your doctor sent you there.


 * We live now in a totally new era of health care delivery, and the Medicare system is a 1965 system. And in his talks with Senator Breaux, in his talks with Congressman Thomas, in his talks with a variety of people on the Hill, we're heartened to see we really may be able to make broad, comprehensive progress on reforming Medicare, too.


 * Q   But next week you're just talking about helping hand, you're not            talking about the longer-range larger prescription drug program for Medicare, are you?


 * MR. FLEISCHER: Correct.


 * Q   Just the first part?


 * MR. FLEISCHER: Correct.


 * Q   When do you anticipate doing the second part?


 * MR. FLEISCHER: We're still working through the time on all the legislative initiatives.


 * Q   Ari, any new communication with foreign leaders?


 * MR. FLEISCHER: I think we're going to have something for you on that in a little bit.  There were a couple more calls the President made -- Mary Ellen will give you a read on it.  I know he talked to the President of South Korea last night, and the President of Poland.


 * Q   What was the purpose, what was the substance of the conversation with the President of South Korea, and did North Korea and its missile program come up?


 * MR. FLEISCHER: It was an introductory courtesy call.  He talked about the importance of the alliance we have with South Korea.


 * Q   Can I just follow up on John Roberts' question from earlier? He asked you if someone asked a perspective employee about their sexual orientation would that be okay.  You said, they need to follow the law.  As I understand it, the law doesn't provide any protection, or federal law provides no protection on grounds of sexual orientation.  So does that mean it's okay for perspective employees to be asked questions like that?


 * MR. FLEISCHER: In all cases, people have to follow the law.  But it is President Bush's position that -- he hires people on the basis of their ability to do the job.  That's the sole criteria he uses.  This was discussed extensively during the campaign, and he'll hire people, regardless of their background, so long as they're qualified to do a job.


 * Q   So everyone in the government shouldn't be asking questions of that sort, regardless of what the law --


 * MR. FLEISCHER: That's the President's position.


 * Q   On first strike, is there any plan for the administration to request the fast track authority through Congress, taking the fact that the Prime Minister of Canada is one of the strongest -- solution for the free trade of the Americas, and he's going to meet President Bush soon?


 * MR. FLEISCHER: Fast track is a priority and it is something the President discussed throughout the campaign, but there's no date set.


 * Q   Can I follow on that, Ari?  On the Canadian Prime Minister visit, he's a pretty strong opponent of ANWR oil drilling up there, and skeptical -- is there any particular pitch the President is going to make to him on either one of those --


 * MR. FLEISCHER: Let's wait a little bit closer to the meeting and maybe I'll have more to share.


 * Q   Will it be on the agenda?


 * MR. FLEISCHER: The meeting was just announced today.


 * Q   Ari, after the Israeli elections do you expect to become more involved in the Israeli-Palestinian situation?


 * MR. FLEISCHER: Well, I think that the President is going to continue to work to make certain that any agreement by both parties, if both parties enter into an agreement, the position of our government will be to support it.


 * Q   After a year, though, of the White House being very directly engaged in those talks, there's a sense of you guys disengaging, pulling back, of it being left to ambassadors in the area and the State Department's responsibility.  Is that the way the Mideast peace process is going to work?


 * MR. FLEISCHER: Well, actually, the talks that are underway in Egypt right now, of course, are bilateral talks, by design and by the two parties.


 * Q   But will the White House be as directly engaged in the process, do you think, as the previous administration?


 * MR. FLEISCHER: We'll advise you.


 * Q   Ari, what about President Putin?  He said that he wants more interaction with the new administration.  Are you planning any overtures?


 * MR. FLEISCHER: Let me ask you on this, please refer those to Mary Ellen, and she'll be happy to answer them.


 * Q   Ari, is Steve Goldsmith working in the White House or for the White House now?


 * MR. FLEISCHER: As far as personnel announcements to go, we'll, of course, keep you filled in as we have them to make.


 * Q   -- as opposed to a present tense?


 * MR. FLEISCHER: That's correct.


 * Q   Let me answer this question.  It's kind of offensive, but it was made by the President of Cuba.  He said on Sunday that --


 * MR. FLEISCHER: I thought you were professing yours.  (Laughter.) I appreciated the warning.


 * Q   He hopes that President Bush has proved that he's not stupid, as many people call him.  Do you have any reaction to that kind of comment by the President of Cuba?


 * MR. FLEISCHER: No, there is no reaction to that.  (Laughter.)


 * Q   Oh, yes, there is.


 * Q   Ari, a question on taxes?


 * Q   You might want to answer that.


 * MR. FLEISCHER: Bob Davis.


 * Q   Do you want to answer about the stupid question?


 * MR. FLEISCHER: You're not allowed to comment on my noodling.


 * Q   A couple on taxes.  Am I to read you right when you are talking about what is included and what isn't, I get the sense that there is nothing -- we shouldn't expect anything about a trigger mechanism, and we shouldn't expect anything about business taxes.  It should be all individual?


 * MR. FLEISCHER: The plan that the President submits to the Congress will be the plan on which he campaigned.


 * Q   It had neither of those elements that I just mentioned.


 * MR. FLEISCHER: Except for the fact that when you lower marginal income tax rates for unincorporated businesses, which are millions of small businesses, they stand to benefit as a result of those marginal income tax rate cuts.  That is a business income tax cut.


 * Q   But not being business specific --


 * MR. FLEISCHER: Well, beyond what I just said, I'd have to review some of the more specific items on there.  Certainly the abolition of the death tax is very helpful to businesses.  Again, usually you're talking now about small businesses, you're talking about farms.  So those would be covered under business.  I'm just thinking through some of the other major provisions we had in there.  But if your question is about capital gains, if your question is about corporate AMT, depreciation, no, those were not part of it -- R&D -- I'm sorry, the R&D -- the President did propose a permanent extension of the R&D tax credit.  That will be part of his tax plan.


 * Q   You had said earlier that the effective dates would be the one big change in the proposal, from the campaign proposals.


 * MR. FLEISCHER: No, what I said was we're reviewing effective dates.  We're reviewing the question of retroactivity, and we're reviewing the question of effective dates, which are phase-in dates, as well.


 * Q   They will not necessarily change in this proposal?


 * MR. FLEISCHER: That's all under review.  We have acknowledged that we're taking a look at that, with the possibility of acceleration. But we've made no decisions.


 * Q   We're assuming today's event was one in a series of events to highlight his education package, and he'll take up different aspects of it?  And secondly, do you have an out of District trip next week?


 * MR. FLEISCHER: Out of District?  Well, I think he's leaving the District tonight, actually, for his dinner.


 * Q   Is he getting on a plane at all next week?


 * Q   Or even a long car ride?


 * MR. FLEISCHER: I haven't looked that detailed at the schedule for next week.  I don't think so.  Let me --


 * Q   Is this part of an education roll-out?


 * MR. FLEISCHER: Tomorrow we'll give a look ahead; every Friday I'm going to give a look ahead.


 * Q   And is today a part of a bigger education roll-out?


 * MR. FLEISCHER: Yes.  Today is a continuation of developing reasons for the Congress to pass the President's education plan, which was submitted to the Hill this week.


 * Q   Ari, one more question about the tax cut.  Throughout the campaign it was always discussed as this kind of monolith, this $1.3 trillion or $1.6 trillion tax cut, but there's a lot of talk on Capitol Hill about breaking that up into bite-sized chunks and even the President is potentially amenable to that.  But would he accept anything less than even the sum of those parts remaining at $1.6 trillion?


 * MR. FLEISCHER: Well, I think it's too soon to start discussing what he would accept or not accept.  He is going to fight for all of it. And he's very optimistic that he's going to get all of it or virtually all of it.  And that's why the process is just beginning.  You have to allow the House to take the first action on tax cuts.


 * And, of course, this is one of the decisions as far as the timing of what will move that will play itself out, frankly, over a considerable period of time, in most likelihood, while we can submit it in one comprehensive form. Of course, the House will make its determinations about what they choose to do with it.  So, too, the Senate.  And in the past, the House has, indeed, split it into smaller pieces; the Senate has combined it.  So the House and the Senate have different rules for consideration of tax cuts.  It's much harder to do the split approach in the Senate than it is the House, but those are House and Senate questions.


 * Q   Are you saying that his strategy on all of his programs is to introduce exactly what he campaigned for, rather than talk behind the scenes with members of Congress and figure out what is likely to pass and then propose that?


 * MR. FLEISCHER: I'm not prepared, Jim, to say that for all, that's too all encompassing.  But he's going to submit what he ran on. Now, there may be some modifications, for example, on the education plan. He heard some very good suggestions from some Democrats about moving up the funding, increasing the funding for schools that are failing, to help them to do a better job educating their children.  That was a modification from the campaign proposal.


 * But I think everyone would agree, the plan he sent up there was the campaign plan with that modification. So he's going to continue in the course of the meetings to listen to people, and when he hears good ideas, there will be some flexibility.  But for the most part, what you're going to see is what you heard.


 * Q   Ari, has the President talked to John Ashcroft at all in the last week?  And how optimistic is he about the nomination, at this point?


 * MR. FLEISCHER: I haven't asked him that question, so I don't know.


 * Q   Optimistic?


 * MR. FLEISCHER: Oh, yes.  We think we're going to get every single person the President named.  And, again, I think it's a sign of the good bipartisan spirit that has been created in the wake of this election. And we're very pleased by it.


 * Q   Ari, does the cataloging of some of what's missing or been vandalized, does that extend to Air Force One?  Because, apparently, according to Air Force officials, there are members of the Clinton party who actually made off with some glasses etched with the Air Force One symbol, hand towels and other products off of Air Force One on the final trip up to New York; estimated value not a great deal, a little over $100. Is that part of the cataloging?


 * MR. FLEISCHER: I haven't looked at the cataloging, so whatever took place, we'll know it took place and we're going to leave it at that.


 * Q   The President didn't have any reaction to that?  You told him about all this stuff and he just said, well, let's just change the tone?


 * MR. FLEISCHER: We're just not reacting to it.


 * Q   But, Ari, a couple questions.  You're telling us here, publicly, that you are creating a catalogue of what was done, but you can't tell us why you're creating that catalogue or what you're going to do with it or what the purpose is?  And then my follow-up would be, were all staffers in the entire complex asked to tell somebody what they found?


 * MR. FLEISCHER: No, it's very informal.  It's just a question of if you saw something that came to your attention, we're going to note it and that's that.  And I don't think anything will ever come of it.


 * Q   For what purpose, though?


 * MR. FLEISCHER: I just think people are just getting a sense of what happened.


 * Q   Just curious or is there some greater scheme here?


 * MR. FLEISCHER: Well, it may even fade away.  So we're just taking a look at what was done, and that's that.


 * Q   But does the President consider this conduct consistent with the high standards of high office?


 * MR. FLEISCHER: Again, we're just not going to look back.


 * Q   You are looking back.


 * MR. FLEISCHER: We're not looking back to place blame; we're not looking back to ascribe motive.  Again, transitions can be difficult times.


 * Q   Then why catalogue?


 * MR. FLEISCHER: We're just noting what took place.


 * Q   Did you ever give us an estimate on the cost to taxpayers of what took place?


 * MR. FLEISCHER: If one arises, we may decide.  I don't know yet.


 * Q   Ari, can you tell us if there have been any ways in which the White House was unable to function or staffers weren't able to do their jobs or anything along those lines as a result of --


 * MR. FLEISCHER: No.  Obviously everybody -- the whole move into the White House, of course, took some time and there are just things in terms of the carpeting that was pulled up and the wires that had to get moved around just in the normal course of business that were part of the transition that slowed everybody down on our first couple days.  But everybody's moved forward since then.  There may be some other things that relate more just to all these new people showing up.


 * Q   I mean, specific to vandalism that you believe was done, not to the general --


 * MR. FLEISCHER: I don't have any more updates on that.


 * Q   Ari, if there was all this renovation that went on, how do we know, or how do you know if phone lines were cut or if things were damaged that it couldn't be a by-product of tearing up rugs and carpets and repainting and moving furniture around?


 * MR. FLEISCHER: I don't think that the people who are professionals who make it their business to go in and prepare a White House for new arrivals would cut wires.


 * Q   So there is a Clinton carpet scandal?


 * MR. FLEISCHER: I'm sorry?


 * Q   There's a Clinton carpet scandal.

THE PRESS: Thank you.

1:45 P.M. EST