Press Briefing by Press Secretary Ari Fleischer, June 19, 2001

The James S. Brady Briefing Room

1:40 P.M. EDT

MR. FLEISCHER: Good afternoon. I have several personnel announcements. President Bush today announced his intention to nominate John Danilovich to be Ambassador of the United States to the Republic of Costa Rica. The President today is announcing his intention to nominate Martin J. Silverstein to be Ambassador to Uruguay. The President today is announcing his intention to nominate Johnny Young to be Ambassador to the Republic of Slovenia.

Two judicial announcements: The President will nominate Laurie Smith Camp to be a judge on the U.S. District Court for the District of Nebraska. The President will nominate Paul G. Cassell to be a judge on the U.S. District Court for the District of Utah.

With that, I'm pleased to take any questions you may have. Mr. Plante.


 * Q   Ari, whose idea was it to write a mailing that's going out to the people who received tax refunds which suggests that they will be receiving just the first installment of a long-term tax relief provided by the new law?


 * MR. FLEISCHER: This idea originated with the agency responsible for all communications with taxpayers, the Internal Revenue Service.  They talked about it with the Department of Treasury.  It was talked about with the White House, as all issues of this nature get discussed with the White House with the agencies.


 * You know, the IRS has significant experience in dealing with taxpayers. And they understand when there are issues that are going to cause taxpayers to all start reaching out and talking to the IRS.  And I don't think it would surprise anybody that at a time when Americans are going to receive 100 million checks in the mail, if they don't have any notice and they have no reason to suspect why they're getting the checks --


 * Q   Was it done the last time?


 * MR. FLEISCHER: -- if they have no reasons to know why they're getting the checks, it's the IRS's judgment that all of a sudden, that will light up the phones of the IRS, that taxpayers are going to say, why all of a sudden am I receiving all these checks in the mail.  And, so, they have a lot of experience in working with the taxpayers, and in their judgment, a letter is the appropriate thing to send.  And we're very pleased that the taxpayers are going to receive the rebates in an explanatory note.


 * Q   If I may follow up, it's been criticized, perhaps predictably, by Democrats on the Hill as inappropriate and political and sounding more like a sweepstakes message from Ed McMahon than a communication from the government, particularly in the promise of more relief to come.


 * MR. FLEISCHER: Well, again, I think the IRS, which has a tremendous amount of experience in dealing with taxpayers and knowing what types of communications cause taxpayers to pick up their phone and call the IRS and put a burden on IRS workers, I think they are in the best position of anybody in the government to know whether or not receipt of 100 million unexplained checks is going to all of a sudden cause more problems if people do not have any type of notice that they are going to be receiving a check of this nature.  So the IRS is sending out the notice as part of their routine communications; properly so.  It's a good way to manage the reaction that the public would give if 100 million unexplained checks simply arrived.


 * Q   Ari, but what role did the White House, if any, play in the wording of the letter?  Did the White House consult with IRS or IRS consult the White House in terms of the wording of the letter?  Did the White House sign off on the final letter --


 * MR. FLEISCHER: The wording of the letter was showed to the White House.  The White House signed off.  The White House talked to the IRS about it.


 * You know, let me remind you that every year, the Department of Health and Human Services sends out to Medicare beneficiaries a notebook explaining -- a letter, and sometimes it's actually a glossy booklet, explaining all the Medicare benefits for people who have just turned 65, who are about to enter the world of Medicare. Those are millions upon millions of communications sent.  The White House always works with the Department of HHS on that communication.  One year not too recently ago, all 38 million Medicare beneficiaries received the booklet, not just those people who were new to Medicare.


 * So, frankly, it's part of good government for the agencies to keep in touch with people who are about to get something that, to answer your question, Helen, is generally unprecedented. We are not aware of any time where there was a rebate check sent out to all 100 million Americans like this.


 * Q   Wasn't there a Reagan tax cut?


 * MR. FLEISCHER: It was not retroactive.  There was no rebate check sent out in this manner.  Big difference.


 * Q Do you know who at the White House signed off?


 * MR. FLEISCHER: I'd have to check, Ron, to see what specific names are involved in it.


 * Q   Would you mind checking?


 * MR. FLEISCHER: I'll try to find out, sure.  But like I say, these are routine communications that the White House is proud to have with its agencies all the time, in terms of keeping in touch --


 * Q   Well, it's not routine if it's original.


 * MR. FLEISCHER: Routine contacts, between the administration and the agencies, in terms of the important business that the agencies carry out on behalf of the American people.


 * But the bottom line is the same. The President is very proud that the taxpayers are about to receive a first-time rebate because there has been an overpayment in taxes.


 * Now, we understand that there are many people on Capitol Hill who oppose tax relief, and they do not like the idea of taxes being cut. And that's going to happen.  They're going to say things they're going to say. But it is part of an efficient way to administer something brand new to the American people, which is an unexplained check is about to arrive on their doorsteps.  And it's a helpful communication from the IRS.  And in the IRS's judgment, it's going to cut down the number of surprised phone calls they get from taxpayers who say, why all of a sudden did I receive a check?


 * Q   But are Democrats being unfair when they say that this is political, with Bill's point, when it sort of alludes to the fact that more is coming, more is on the way?


 * MR. FLEISCHER: I think the letter explains the facts of tax law.  And under the 1997 tax act, where the IRS was given a new mission, to be much more customer friendly.  The IRS is fulfilling that mission.  If you notice, since 1997, the IRS has paid much closer attention to the communications they have with the taxpayers.  The letters that they send out now to taxpayers are much more customer-oriented, they're written in a more easily understandable English.  And I think that the bureaucracies deserve praise anytime they communicate with the taxpayers in a way that is in plain English, easily understood, particularly at a time to advise taxpayers that they are about to receive a check.  Otherwise, taxpayers would get a check in the mail, they have no idea why.  But taxpayers deserve to know they're getting a check because their taxes got cut.


 * Q   And do you think that helps the President politically, this letter from the IRS helps the President politically?


 * MR. FLEISCHER: I think it helps the taxpayers to understand why they're about to receive a check.


 * Q   But does the letter on the IRS stationary from the IRS itself help the President politically?


 * MR. FLEISCHER: I think that for everybody who voted for tax relief, the Democrats and Republicans included, for all those members of Congress and for the President, to everybody who is contributing to the economic recovery that's going to be created thanks to this tax cut, it helps substantively.  Anything that helps substantively is good government.


 * Q   How much does the letter cost, how much does it cost to send those out?


 * MR. FLEISCHER: You would have to check with the IRS or Treasury.


 * Q   Can you -- switching to California for a minute, when we were asking you about FERC yesterday, it had not actually acted yet.  Now that it has, can you tell us the President's reaction?  But more importantly, during the President's trip to California, you may remember there was a letter released from 10 or so economists about sort of a mid-range way of putting price caps on, soft price caps on, that seemed rather similar to what ultimately was done.  In the White House view, has FERC taken a kind of action that those economists and Governor Davis have endorsed when we were all out there?


 * MR. FLEISCHER: On the question of the FERC action, let me start with that.  This is a 55-page order issued by FERC, and the White House has not yet received that order.  They have not made it available yet.  The information basically stems from a three-page, four-page news release from FERC, and also from watching yesterday's action from the states made by the FERC Chairman from other members of the Federal Energy Regulatory Commission.


 * It is the assessment of the White House that in keeping with the President's desire to help the state of California, and to make certain that there are no illegal price gouging carried out by any companies, that this action, to the degree that it is market-based -- and this action does appear to be market-based -- the President believes that this is and can be a helpful step for the state of California.


 * It's important to note that FERC rejected price controls. This is not a price control; this is a market-based mitigation plan that now will extend to 11 Western states.  But to the degree that it is a market-based program, this is in keeping with what the President said, and the President is pleased to be able to help California in that manner.


 * It does not change the President's fundamental view that a separate economic matter, which will be price controls, would not be productive.


 * Q   And to the letter?


 * MR. FLEISCHER: To the letter -- you're referring to the letter -- which letter?  There were dueling letters from economists during that trip.


 * Q   One from Alfred Kahn and a group of other economists who had a long history of deregulation, who were arguing basically for a cost-plus system, which is not far from what FERC has done.


 * MR. FLEISCHER: I want to review the letter with specificity before answering that.  But this is not cost plus.  The action taken by FERC is not cost plus.  Cost plus is an arbitrary determination that utility's costs are at one level, and somebody in the government will set a price of what an acceptable profit can be above that level.  Somebody in government, a bureaucrat, would have to designate 10 percent, 15 percent, whatever a government worker deems an appropriate profit.  That's cost plus.  This is not cost plus.


 * Q   Has the White House economist, Lawrence Lindsey, signed off on this not being a price control?  Does Lawrence Lindsey believe this is not a price control, this is a market operation?


 * MR. FLEISCHER: I don't know that I've talked to Larry specifically about that, Terry, you'd have to ask him.  But the President has been briefed on this, and the President has been informed that this is a -- to use FERC's words, it's a mitigation plan that is a market-based plan. Those are the Chairman's words, Chairman of FERC.


 * Q   Reaction from the President today to the execution?


 * MR. FLEISCHER: The President's reaction was brief.  He acknowledged the information.  He thanked Judge Gonzales for monitoring the situation. And the President believes strongly that the death penalty, when it's administered fairly and effectively, and when defendants have full access to the courts, that the death penalty serves as a deterrent to crime, and that's why he believes in the death penalty.


 * It's also important to point out that the legislation that led to the federal death penalty in this case was supported by an overwhelmingly large bipartisan vote of the Congress, both the House and the Senate, in terms of the execution of drug kingpins, very, very bipartisan legislation, overwhelmingly large margins.


 * Q   Was there an indication, Ari, that the tax cut on which the President campaigned, in which he made his top legislative priority and which he traveled throughout the country both pushing through Congress and then afterward letting people know it had passed, was there an indication that a significant number of people were unaware of this, so that the IRS had to send out a notice, hey, you've got a check coming?


 * MR. FLEISCHER: Well, Wendell, I like to believe that the American people pay very careful attention to everything that is done and reported from Washington, D.C.  But these are judgments of the Internal Revenue Service.  I think you really need to ask them, what is it that in their judgment leads them to believe that sending out 100 million checks without explanation will create, all of a sudden, a terrible phone burden upon IRS workers, where taxpayers say, wait a minute, what's this check, why did I get it, and they start calling up.  It's their judgment.  They have a lot of experience in these areas, as you can imagine.


 * Q   If I could follow, presumably, the check comes with an explanation.


 * MR. FLEISCHER: No, it's a separate mailing.


 * Q   But if -- I think all of these questions get to whether or not it's the judgment of the IRS that there would be confusion or whether it's a judgment of the White House that there's political gain to be made.  Was there no consideration of political gain in sending out this letter?


 * MR. FLEISCHER: Wendell, just like when the Department of Health and Human Services on an annual basis sends to all income and Medicare beneficiaries information about Medicare, how to be eligible for Medicare, what Medicare means, this is good government.  This is a government keeping in touch with the taxpayers who pay the bills, informing them that they overpaid their bills.


 * Q   Can you answer Wendell's question?  There was no judgment that there's political gain in here?  Is that what you're saying, that there was no political consideration?


 * MR. FLEISCHER: This is about good government, and this is about a substantive decision that the taxpayers, for the first time, are going to get a rebate check.  It's a highly unusual event for taxpayers to get a rebate check.  It has not happened in modern memory.


 * Q   Accepting that that is your view of it, there was no judgment there was political gain to be had?


 * MR. FLEISCHER: No, this is about tax cuts, and tax cuts' stimulative effect on the economy and the responsibility of government to communicate with citizens.  Just like Medicare, as I indicated.  That's an annual mailing that you're all familiar with, and it's part and parcel of good government and government that's in touch.


 * Q   Ari, on Senator Schumer, who you will no doubt quickly point out voted against the tax cut, says -- was at a press conference just now saying this is going to cost somewhere between $20 million and $30 million, and questioning whether that is a good use of government money, and also questioning why there's a need for the President's name to be in this letter, why it simply doesn't neutrally say you're getting this money back. What's the answer to that?


 * MR. FLEISCHER: Well, the letter, of course, explains that Congress passed it and the President signs it.  Was there an objection to saying Congress passed it?  The fact of the matter is that this law, passed by the Congress, signed by the President, will result in about 100 million taxpayers receiving a check.  And again, I think it's pretty easy to understand if, all of a sudden, 100 million checks arrive, it is the judgment of the Internal Revenue Service, that has quite a lot of experience dealing with taxpayer complaints and taxpayer reactions, that any check that goes out without explanation will lead to an incoming burden to the IRS where their phones will light up with taxpayers saying, what is this check.  And they have determined that this is the best way to manage this process.


 * Q   But couldn't you just put a letter of explanation in with the check in the same --


 * MR. FLEISCHER: No, apparently not.  They cannot do that.  Apparently not.  They're prohibited for some reason from doing that.


 * Q   Oh, is that right?


 * MR. FLEISCHER: Yes.


 * Q   I just want to make clear, though.  You said the White House consulted.  So, did the White House make any changes to the letter, and did the White House communicate in talks anything that the White House felt should be included in this letter that's going out to 100 million people?


 * MR. FLEISCHER: Yes -- I was asked earlier a similar question about who specifically from the White House.  I'll check.


 * Q   But not necessarily who, just what.  What parts of the information -- was it just sort of signing off, and did the White House actually make changes to the letter, or actually provide information?


 * MR. FLEISCHER: It wouldn't surprise me if the White House made suggestions on the letter; that's routine in the White House's conversations with agencies about agency matters, routine.


 * Q   That's what we'd like to know -- that is, who did what when.


 * MR. FLEISCHER: Given the complexities of the tax cut as a whole, both phase-in and phase-out of the various pieces, will taxpayers be getting letters each time something phases in and phases out, or kept abreast of how this is affecting each taxpayer?  As a matter of fact, the IRS booklets that everybody gets at the beginning of the year do explain that.  There is an annual mailing the IRS does send out every year; that's how people pay their taxes.  But this is --


 * Q   -- in different years and affect different people, will people affected get letters?


 * MR. FLEISCHER: Sure, but you can -- that message from the IRS about the changes and the phase-ins, information about what the phase-in rates will be is contained in the IRS's annual mailing to taxpayers.  So, yes, there will be an IRS notification going out to all taxpayers about changes in phase-ins.  It takes place at the time that everybody gets their tax forms, because that's the time to coincide with when those changes are made.


 * The rebate check that arrives, separate and apart from those tax forms, is a wholly separate type of communication because it's such an unusual event. And that's the result of the fact that Congress decided, the President supported a retroactive tax cut.


 * Q   Back to death.  Does the President really have information or figures that show that the death penalty is a deterrent?


 * MR. FLEISCHER: There are many people, the President included, who believe it is a deterrent.  There are many people who question whether it is or not.  I'd refer you to the Department of Justice specifically for their studies --


 * Q   Well, everything I've read is that it has not been a deterrent.


 * MR. FLEISCHER: As I say, there are many people who don't believe in the death penalty.  But there are many more who do.  And the President --


 * Q   That's not the point.  I just wondered if you had any fact or --

MR. FLEISCHER: -- is, in fact, a deterrent to crime.


 * Q   Ari, if we could change to the Middle East now.  Sharon is coming here next week to meet with the President and Secretary Powell.  What does the President think about the state now, the cease-fire?  Is that in danger?  Are the parties acting in good faith to implement it?


 * MR. FLEISCHER: The cease-fire remains fragile.  There is a cease-fire in place.  The violence has been reduced.  It has not been eliminated.  And the events in the Middle East are better than they were following Director Tenet's visit to the Middle East where he was able to work out the tentative -- the cease-fire.  But the events remain fragile, and that is why this administration is going to remain actively engaged in trying to build confidence-building measures between the parties in the Middle East.


 * Prime Minister Sharon is going to be in New York for a separate event. He will come to Washington following that event to meet with the President.


 * Q   What does the President hope to accomplish in that meeting?  Does he see some turning point here?  Some window of opportunity?


 * MR. FLEISCHER: I think the President's hope is that the cease-fire will continue to take hold, that the violence will diminish, and that the Mitchell Committee report, which calls first and foremost for unconditional cease-fire from all parties, followed by confidence-building measures, can begin to be implemented.  And as part of that implementation process, Secretary Powell, at the President's direction, has been on the phone with Prime Minister Sharon, with Chairman Arafat, with others in the region. The President continues his efforts, and those efforts will continue when the Prime Minister visits next week.


 * Q   Is he inviting Arafat here also for a similar meeting?


 * MR. FLEISCHER: As always, we'll advise you if such an event takes place.


 * Q   Ari, The Washington Post reported Saturday that George Terwilliger (sp), who is a lawyer at White and Case here, worked for the President during the campaign, and is a leading candidate for the chief of FBI -- that he has a client, Credit Lyonnais, a French bank, that's under a major fraud investigation.  And he's been calling the Justice Department attorneys not to bring criminal charges against is client.  The article talks about legal ethicists who say this is unethical.  I was wondering if you think that this is unethical for him to be calling the Justice Department while he's under consideration to be head of the FBI?


 * MR. FLEISCHER: First of all, I have not indicated who was under consideration to become the next director of the FBI.  And I don't speculate about who the President is interviewing and when the President will make that decision.  So in terms of your question specifically, he is a private citizen, he is not a government employee, and so I don't think that's a question you should address to me.


 * Q   Ari, has the President made a decision, though, about the next director of the FBI?  Is the decision imminent?  Can you give us a sense of where things stand on that?


 * MR. FLEISCHER: There is nothing imminent, and when we have something to say, we will announce it.  But there is nothing imminent.


 * Q   Ari, to follow up on that, though, is it generally the President's view that a nominee for a top post can continue to lobby an agency he has had extensive dealings with if he's picked for that top post?


 * MR. FLEISCHER: I'm not going to deal in hypotheticals.  As the President makes his announcements, you will be able to judge the candidates who are selected what their actions are, and of course that will be a determination that the Senate will review.


 * Q   When he named his top executives within a day or two of being inaugurated himself, he talked quite plainly about maintaining a standard that is above reproach, above even the appearance of a conflict.


 * MR. FLEISCHER: Right.


 * Q   You know, is this the kind of thing he thinks would fall into that category?


 * MR. FLEISCHER: The President expects all the people that he names to post to be of the highest ethics.


 * Q   The AP -- I have a two-part question -- the Associated Press has reported, and this is a quote:  When former President Clinton first ran in 1992, he advocated moving the embassy from Tel Aviv.  Clinton never acted on this promise, even though Congress several times tried to force his hand.  During his campaign, Bush promised to move the embassy to Jerusalem, but citing national security interests, Bush notified Powell on Monday he was extending an administration ban on the move for another six months. And my question is, can you deliver us, Ari, from this grim comparison of President Bush to President Clinton by promising that the Bush campaign promise will be kept before he leaves office, or will President Bush also break his campaign promise like Mr. Clinton did?


 * MR. FLEISCHER: The President said during the campaign, upon election he would begin the process of moving the embassy.  That was the pledge that the President made.  Between the time that the President said that and last week when the President issued the waiver that you discussed, the events in the Middle East have certainly changed.  I think that's a point beyond dispute.  And that it was the President's considered judgment that due to national security reasons, the reasons dealing with events on the ground in the Middle East, that that process would have to await an additional six months.  It's something the President remains committed to, but that is the reality of the events on the ground.


 * Q   Since the President has been both denounced and praised for his refusal to proclaim June as Gay-Lesbian Pride Month, does he believe that public broadcasting, which is so heavily subsidized by the taxpayers, whether they watch PBS or not, would the taxpayers be paying for an anti-Boy Scout feature that allows the Boy Scouts no chance to defend themselves from a homosexual activist producer named Tom Sheppard?


 * MR. FLEISCHER: I'm not familiar with what you're referring to.


 * Q   Congress, through the GAO, is seeking the minutes and other internal documents surrounding the Vice President's energy task force.  Is the administration claiming or considering claiming executive privilege in the face of that request?


 * MR. FLEISCHER: Terry, the administration is cooperating with the GAO on all matters that the GAO has scope to look into.  Specifically, the GAO asked for information dealing with any of the costs associated with the task force -- the expenditure of revenues that is within the purview of the General Accounting Office.  And the administration is cooperating fully with that request.


 * There are other requests that the GAO has made for information that are not within their purview, according to the lawyers who represent the Vice President on the task force. According to the GAO lawyers, it is within their purview.  So this is a matter that is now being discussed, and it should say in a civil fashion between the attorneys for the GAO and the White House to determine what the scope of the GAO properly is under the law.


 * It's also not the first time that the GAO and the White House, particularly the Department of Justice, have differed about what GAO's scope is. So this is, for now, a lawyerly matter.  The administration will cooperate in -- where the scope is appropriate.


 * Q   Specifically, what questions is the GAO asking that the White House doesn't think it has scope on?


 * MR. FLEISCHER: They're asking for lists of who was met with, other information pertaining to that.  The one question they did ask that I indicated that is clearly under their scope is expenditure of funds.


 * Q   Why is a list of who he or they met with not in the GAO scope?


 * MR. FLEISCHER: It's a statutory matter -- GAO only has the authority to ask for information of that which they are statutorily responsible for.


 * Q   Are you exerting executive privilege in this?


 * MR. FLEISCHER: No, it's a matter of what the GAO scope  and purview is.  As I indicated, that's something the lawyers right now are talking to themselves about.


 * Q   Can I ask you another question?  Why is the President so one-sided on the Palestinian dispute in the sense that he only speaks directly to the Israelis?


 * MR. FLEISCHER: That's not accurate.  The President has spoken with all parties.


 * Q   He has not seen any Palestinian leader, directly.


 * MR. FLEISCHER: The President indicated he spoke with Chairman Arafat just a couple of weeks ago, and --


 * Q   He's seen Sharon, what, two or three times?


 * MR. FLEISCHER: The President will continue to meet with people and continue to keep in touch with people as he works to secure a peace process.


 * Q   Why doesn't he have any direct contact with any Palestinian leaders?


 * MR. FLEISCHER: He has.


 * Q   Direct, face to face?


 * MR. FLEISCHER: He's had several phone conversations.  As always, with any type of invitations, we will keep you informed if there is more coming.


 * Q   On moving the embassy to Jerusalem, are you saying then that the outbreak of violence is responsible for a delay in that plan, and so -- I mean, if the cease-fire holds, if the violence subsides, then you would reactivate that plan?


 * MR. FLEISCHER: I think it's beyond doubt that the situation in the Middle East is at one of its most fragile moments in years.  And that's the reason the President has taken the action that he has taken.


 * Q   Can you tell me when the NIH review of the guidelines for embryonic stem cell research will be made public?


 * MR. FLEISCHER: You may want to touch base with HHS, but my last information was sometime in July.


 * Q   President Putin talked with the Chinese President late yesterday about the meeting with President Bush and NMD.  Will the U.S. still go ahead with the plan, even if China and Russia join force against it?


 * MR. FLEISCHER: The President has been very clear on his desire to move forward with the missile defense plan, because he believes that it will help secure the peace and he believes it represents a new way of thinking in the post Cold War era.  Along that route, he will continue to consult with our allies, with the Russians.  And as you know, one of the most promising developments of the meeting that the President had with President Putin in Slovenia is that the Secretaries of Defense -- the Russian Minister of Defense, and the American Secretary of Defense will be meeting to discuss this issue.  And in some of the remarks that President Putin made yesterday, there are positive and optimistic indications from President Putin about prospects for this issue.


 * Q   Actually, Ari, on that, I mean Putin also was strongly opposed to the idea of the United States going it alone, if the Russians don't go along.  I mean, are you concerned about his reaction, at least to --


 * MR. FLEISCHER: And that's another reason why the United States' position is to consult with our allies, with Russia, and with other nations.  That's one of the reasons that a delegation of American officials went to Moscow, met with Russian officials.  And obviously, it's a topic that was discussed at great length between the President and President Putin, and will continue to be discussed now at the appropriate level, which will be the Minister of Defense and Secretary of Defense level.


 * Q   You're meeting with Secretary Rumsfeld, how much was the top-to-bottom review discussed?  And is the Secretary pretty close to nearing completion of that review?  Was that sort of a summary discussed in this meeting?


 * MR. FLEISCHER: They talked about the quadrennial defense review.  And you'd have to talk to the Pentagon to see what their timing is, for when they're going to be ready on their reports.


 * Q   Is there any kind of outline of any kind of final summary that was presented to the President today?


 * MR. FLEISCHER: It was a private meeting.  And I won't go beyond that.


 * Q   You said that were the President to implement the missile defense, he would possibly respond by abrogating the Start II treaty.  He talked about re-MIRV-ing missiles that are to be a single warhead, under the agreements of Start II.  Does the President feel that this would be a proper repose, or that Start II is worth preserving at the cost of keeping the ABM treaty in force?


 * MR. FLEISCHER: Wendell, the President is focused on the conversation he had with President Putin directly.  And in that conversation, and in the remarks that President Putin issued at a news conference following that meeting, President Putin had some encouraging thoughts.  And that, again, is why the two agreed to have their defense ministers meet to talk further, and to see what progress can be made.


 * Q   Does that mean, then, that his public statements about Start II, Mr. Bush does not consider to be either significant or operative?


 * MR. FLEISCHER: The President is always interested in all the things that President Putin says.  But his focus is on the conversation they had in their meeting.


 * Q   One more on the Middle East.  Does the President believe that both Sharon and Arafat actually represent their people anymore and have control over the different factions, Israeli and Palestinian factions?


 * MR. FLEISCHER: Well, I think the President recognizes how delicate and fragile events are in the Middle East.  And he is looking to work with all responsible parties who can help secure the peace in the Middle East.


 * Q   Did the President meet with Rumsfeld yesterday also?  I think he was spotted coming into the building.


 * MR. FLEISCHER: Secretary Rumsfeld was here yesterday for the swearing-in of the service secretaries.


 * Q   When has it not been fragile, since 1948, Ari?  Can you name one time when it has not been fragile?


 * MR. FLEISCHER: I think, Les, that the history of the Middle East has been a series of steps forward and steps backwards.


 * Q   But I trust Bush's promises more than I would trust Clinton's wouldn't you?


 * MR. FLEISCHER: Yes.  (Laughter.)


 * Q   Ari, has Kosovo been officially added to next month's Europe trip, and are other stops under consideration?


 * MR. FLEISCHER: No, it has not been officially added.  We have no further word about any additional travel for the July trip.  We announced earlier that the July trip will begin at Chequers and then the President will travel to Genoa and then the President will travel to Rome.


 * Q   Are you exploring alternate sights for the leaders of the G-7 plus one to meet?


 * MR. FLEISCHER: I have no information on that, Wendell.  I have not heard that.


 * Q   Ari --


 * MR. FLEISCHER: Wait a minute.  We have a person who hasn't got a question yet.


 * Q   This is a question that I think affects a lot of Americans.  It seems like California is going to get to prevail on their effort to get bailed out with their energy crisis.  Can the rest of America expect any relief with these terrible gas prices?


 * MR. FLEISCHER: I cannot characterize what FERC did as a bailout. What FERC did is in keeping with the President's stated desire that FERC be vigilant to make sure there is no illegal price gouging, and to make certain that no companies withhold supplies in an effort to create a spike in the price.  That's in keeping with -- that's the action that FERC took. So I think that's a very different nature for saying a bailout.

Thank you.

END

2:10 P.M. EDT