Press Briefing by Press Secretary Ari Fleischer, March 13, 2001

The James S. Brady Press Briefing Room

12:22 P.M. EST

MR. FLEISCHER: Good afternoon. A few announcements to begin today.

The President has invited President Fernando de la Rua to meet with him at the White House on April 19th, the President of Argentina. The President welcomes a working visit with the President just in advance of the Summit of the Americas in Quebec City. The United States and Argentina share a broad agenda of common interests and values in the hemisphere and beyond, and the President looks forward to reviewing ways to strengthen cooperation in pursuit of common goals.

We have four personnel announcements to make today. The President intends to nominate Roy Bernardi to be Assistant Secretary of Housing and Urban Development for Community Planning and Development. The President intends to nominate William James Haynes to be General Counsel at the Department of Defense. The President intends to nominate Victoria Clarke to be Assistant Secretary of Defense for Public Affairs; that's Tori Clarke.

The President intends to nominate Michael Chertoff to be Assistant Attorney General for the Criminal Division at the Department of Justice. And paper will shortly follow.

I see April's hand is up first.


 * Q   Ari, there's closed press today for Ashcroft's ceremonial swearing-in.  But with this controversial swearing-in, there seems to be some question about if a procedure that he's had done before will be done at this event -- the anointing of oil, as he's sworn-in.  Is that --


 * MR. FLEISCHER: No such procedure today.


 * Q   Do you know if it happened at his last swearing-in, the official swearing-in?


 * MR. FLEISCHER: Do not know.


 * Q   Does the United States plan to offer any compensation, not just for the Americans killed, but the New Zealander killed in Kuwait, and any sort of apology to the New Zealand government?


 * MR. FLEISCHER: The Department of Defense has been in contact with the government of New Zealand on this matter, and they expressed the opinions of the government yesterday, informed them of the news, and that's all I have to report for now.


 * Q   But is it standard procedure to offer any compensation to foreigners --


 * MR. FLEISCHER: Mary Ellen, do you want to say anything?


 * MS. COUNTRYMAN: Yes.  Also, the Charge of the Embassy in New Zealand sent a letter of condolences to the New Zealand government.


 * Q   What about compensation?


 * MS. COUNTRYMAN: I don't --


 * MR. FLEISCHER: There's been no such discussion.


 * Q   Ari, does the President have confidence in the current leadership at FERC, or is he considering making a change?


 * MR. FLEISCHER: Ken, as you know, that's a matter dealing with personnel and I won't speculate about any potential personnel announcements.


 * Q   Ari, is the President or the White House concerned that it might be living up to the stereotyped image of Republicans as pro-business and anti-labor?  I ask that because of the ergonomics rollback and the position on the airlines, and now it's been reported that a group of Republicans in Congress have sent a letter to the President asking him to -- or expressing protest about the ruling on government contracting and bad executive orders --


 * MR. FLEISCHER: The President's position is the government should not tilt either toward organized labor or away.  The government should be neutral.  And the President's executive orders are aimed at creating neutrality in government contracting.  That is the purpose of the executive orders the President signed earlier this year.  That's the purpose of the actions he took.


 * As for the airline strike, particularly dealing with Northwest where the President honored his commitment which he expressed some 30 days ago that he would appoint a Presidential Emergency Board upon the recommendation of the National Mediation Board, the President's concern is that the traveling public not be disrupted and that the economy, particularly in this fragile time, not be given any additional setbacks. So the President's positions have been focused on a broader community of the traveling public, protecting the economy, and the cause of neutrality in government contracting.


 * Q   How is it staying neutral if he made Northwest Airlines employees go back to work?


 * MR. FLEISCHER: Well, under the terms of the bipartisan act which creates -- which gave the President the authority to create a presidential emergency board, upon recommendations from the national mediation board, the President has that authority, and he invoked it.  The neutrality applied to the executive orders that the President signed earlier.  What I just indicated was that the President has appointed the presidential emergency board to protect the traveling public, and to prevent harm to the economy.  Two separate issues.


 * Q   And the President made pretty clear when he announced that decision that he was going -- not that he did not want to see the traveling public disrupted by other airline strikes.


 * MR. FLEISCHER: That's correct.


 * Q   He's ready to use the same weapon on behalf of management, against labor, no matter what the circumstances of those other negotiations are in the airline sector, isn't that true?


 * MR. FLEISCHER: Number one, the national mediation board must first recommend to the President the appointment of a presidential emergency board.  Without that recommendation from the NMB, the President does not have the authority to act in the manner in which you just described.


 * But the President is indeed concerned about four major airline strikes crippling the economy and the traveling public. He expressed his concerns.  He does not think four airlines striking at the same time or any number of those airlines striking would serve the public well or the economy well.  And he's prepared to act if he has the authority to act.


 * Q   So if you work in a union that's having a dispute with an airline, you can pretty much forget strike -- striking as an aspect of your negotiating posture, because the President's going to stop you from doing it?


 * MR. FLEISCHER: No, Terry, that's a misread of the law.  The law, which again, is bipartisan, provides for a cooling off period, in the event of an impasse.  And certainly, in the case of the Northwestern strike, there was a multi-year impasse.  The parties were not able to reach any type of agreement, which is why the National Mediation Board, a group of experts set up to bring people together, recommended to the President that he take the exact action that the President took.  The parties were unable to reach an agreement, and an impasse had been reach, and to protect the public, the mediation board gave the President the recommendation it did.


 * Now, what the President is making unequivocally clear is that he is concerned about the impact of these strikes on the traveling public and on the economy, and if the National Mediation Board acts again, he will take the same steps, which means, a cooling off period. After the law -- the number of days allowed under the law for a cooling off period is fulfilled, then of course either the Congress can step in or the parties are free to act.


 * Q   Does he have any other options past the 60-day cooling off period?


 * MR. FLEISCHER: The President does not; the Congress does.


 * Q   Ari, an interesting day on the markets yesterday, and immediately reactions from sort of both sides on the tax cut debate.  Some Republicans say you need bigger tax cuts with more pro-business incentives, to spur the economy.  Democrats say turmoil in the markets show you can't base this on 10-year surplus projections, and you need a smaller, more cautious tax cut.  Interested in your thoughts on how market turmoil affects not only the math of the tax cut debate, but the politics and the psychology of it.


 * MR. FLEISCHER: In terms of the math of the debate, let me take that first.  The budget that the President submitted to the Hill is an extremely conservative budget in its projections.  It breaks with several trends, in terms of underestimating the amount of revenue coming into the government, compared to the way it's been done before.  By most estimates, the amount of money coming in will exceed what we have projected, even given the recent economic weakness.


 * The President, last Monday -- I believe it was Monday -- at the Department of the Treasury announced that revenues for this year are so far coming in at $32 billion higher than last year, even with a significant decline in economic growth. So that underscores what the President said about the conservative nature of the estimates in his budget.  And that underscores why the President is confident that the estimates that he has projected will indeed be realized.  And if there's going to be a mistake, the likelihood is a mistake will be made on the other side of the scale, that more revenue will come in.


 * The President has cited before weaknesses in the economy, the statistics about weaknesses in the economy, the effect on real people who are touched by this in terms of jobs, in terms of economic security, and that's one more reason why the President thinks it is so important for Congress to pass what he has called his economic recovery plan.


 * The President believes that the best way we can help the economy is for the Congress to pass his budget plan and his tax plan.


 * Q   On that subject, though, the President has said repeatedly he wants this plan.  It's just right, no add-ons.  I wonder what the President thinks when, yesterday, he sees someone like Dick Armey from the leader of his own party in the House, or second, right there, you know, proposing add-ons.  Does he regard that as sabotage or as unhelpful, or is he a stalking horse?


 * MR. FLEISCHER: He regards it as something he's heard before in private meetings where he has said in public what he has said in public: which is, he believes that the best proposal is the proposal he made, which is across-the-board tax relief that he has announced -- double on the child credit, elimination of death taxes, reduction of the marriage penalty. That's the proposal the President made, that's the proposal he thinks will help the economy best.


 * In several of these private meetings, the President has talked about the need for capital formation, and that's one reason why he wanted to have a reduction in marginal income tax rates. And members brought up some capital gains taxes.  The President has made clear that he thinks we should take care of the people first and enact a tax plan that he has proposed before we consider any other provisions.  And he has addressed that message to Democrats and Republicans alike.


 * Q   Does he regard that they're in defiance of what he's trying to accomplish, members of his own party?


 * MR. FLEISCHER: No.  He understands perfectly well that it is the prerogative of members of Congress to give suggestions and actually to take up the legislation.  But he's making his point of view perfectly clear, too.  He's very respectful of those who offer suggestions.  He has said that his job is to listen to the 100 various voices that we're hearing from in the Senate.  Everybody has a different suggestion.


 * In the end, he's going to continue to fight for the plan he's proposed, and he's confident it's going to come out very much his way.


 * Q   Ari, you used the term "weaknesses in the economy" in response to John King's question about the market. Are you saying that what happened yesterday in the market is a reflection of economic weakness?


 * MR. FLEISCHER: I'm describing the President's approach overall to his budget proposals and what he views and has viewed for months as signs of weakness in the economy.  I'm not going to speculate about the causes of markets going up or down; I'm not qualified to do that.  Very few people are.


 * Q   What does what happened in the market tell us about the economy?


 * MR. FLEISCHER: Again, I'm not going to judge what market fluctuations mean or don't mean.  That's not the job of a government official.


 * Q   Why did he use the term "economic weakness" in responding to that question and others this morning about the market --


 * MR. FLEISCHER: Because the President believes that the best way to address several of the signs of economic weakness that we have seen is for the Congress to pass his budget and tax plan.  The President has been very obvious and direct on that.


 * Q   Ari, are you saying you can't diagnose the state of the economy, but you can certainly say unequivocally that this tax cut particularly will provide a stimulative effect to the economy.  What kind of numbers are we talking about?  Because $1.6 trillion is really not relevant to what's happening today this year.


 * If retroactivity happens, as you support it, as the President supports it, what's the dollar figure of the impact on the economy this year in terms of how much money would go back to taxpayers this year?


 * MR. FLEISCHER: It's a combination of factors.  One, it's the immediate impetus of having more money in your pocket as a consumer, and knowing that each year, every year in the future, you will have more money. That way, families can make longer-term investment decisions, longer-term savings decisions, longer-term education decisions.


 * They can also know, comfortably, as a result of a tax cut that is permanent, that is not put in a straightjacket, for example, by any type of trigger mechanism, that they will be able to count on having more money in their paycheck each and every pay period, and that allows people to take vacations, it allows consumers to make purchases, all of which strengthens the economy.


 * So there is the immediate short-term help as a result of the retroactivity; the longer-term knowledge that a consumer has they can count on that money every paycheck.


 * Q   It's a dollar figure this year.


 * MR. FLEISCHER: We're still working with the Congress on what that figure is.  You would have to take a look at --


 * Q   What do you think of it?  You guys have already looked at it.


 * MR. FLEISCHER: You would have to take a look at what Ways and Means passed.  They have -- the House passed a retroactive provision; I don't know the number off the top of my head about what Ways and Means and the House passed, but obviously it was retroactive back to January 1st, and the President thinks that's helpful.


 * Q   The budget that you've proposed you said has conservative estimates of approximately, what, 3 percent growth annually?  Is that correct -- 2.8 percent?


 * MR. FLEISCHER: The growth estimates are conservative in --


 * Q   But they are what, about 2.83 percent?  Something like that?


 * MR. FLEISCHER: No, it's lower than that, Jay.  In 2001 or 2002, the estimates were about 2.4 percent to 2.2 percent, and that, I think, it was 3.1 percent, which is lower than blue chip for the out-years.  But the other cause -- it's not the growth that is where you're going to find the conservative estimate --


 * Q   Can I just ask you, is it not true that the average -- and even this year's or next year's projected annual growth rate -- is higher for every year annually for the next 10 years than an economist would expect growth to be this year?  So, isn't it ironic when you're talking about conservative projections that the year you want to pass this budget, you're going to have anemic economic growth, more anemic than any year your conservative estimates project for the next 10 years?


 * MR. FLEISCHER: I'm not sure I understand your question.  You're saying are they having different estimates for this year or next year?  Of course.


 * Q   Very few economists expect growth of 2.4 percent for this year, given the state of the economy now.  And yet, your budget projects average growth above 2.4 percent, closer to 3 percent.


 * MR. FLEISCHER: If you want to have additional information on the source of the conservatism in there, which is what your question was, what you want to look at is the projection of revenues that are coming in.  And the amount of revenue growth that this budget builds into it is less than economic growth.  That's a departure from the way previous budgets were done.


 * That's the source of the conservative estimate. That's more important than the estimate of economic growth because -- the question is, are you accurately estimating the size of the surplus?  Does the President's budget accurately, as best government estimators can do, estimate the size of the surplus?  What you want to look at are revenues --


 * Q   -- economic growth?


 * MR. FLEISCHER: The revenues that we've anticipated coming in lag behind economic growth.  That's the source of the conservative estimates in this budget.  That's the reason that the President feels the budget he's sent up there, if anything, will err on the conservative side.  It's deeper than just the economic growth question; it deals with revenue projection questions.


 * Q   Okay.  But then, if we have anemic growth, then even if the lagging indicated, then we'll have more anemic surplus revenues in the future.


 * MR. FLEISCHER: No.  Exactly the opposite because of what I just said about the way they've estimated revenues.  Now, we can turn this into an estimating seminar, but again, the proof is in the pudding.  For the first four months of this fiscal year, despite the fact that economic growth is less than originally thought, revenues are coming in at almost twice what they did last year, despite growth being a great slump from last year.  And that's again, if you underestimate revenue, which is what our budget likely has done, you're building in a very strong cushion of conservative economic projections.


 * Q   Ari, a question to follow up.  Do you believe that the American public fully understands the budget, tax and surplus proposals that --


 * MR. FLEISCHER: I think the American public fully understands everything that is discussed in this room.


 * Q   No, no, not discussing -- (laughter.) --


 * Q   Do you think that the American public fully understands the President's budget proposal, his tax cut and his plans for the surplus?


 * MR. FLEISCHER: Well, I don't know what your definition of fully understands is.  I can tell you that the President, when he travels across the country and hears the sounds of the voters out there, he's very encouraged by the reaction the American people have given to his budget plans and his tax plans.  He views it as a very helpful step in the direction of sending a signal to the Congress that the Congress needs to support this plan.


 * There's been a series of recent data suggesting that the American people are increasingly supportive of the President's budget and tax plans, his tax-cutting priorities, because the American people see that he's funding government priorities like Medicare and Social Security, that he's paying down all the available debt, improving education, and after those priorities are met, the President reduces the tax burden.


 * And I think that approach has been well supported by the American people. And with every passing day, there are increasing signs that the American people are rallying behind the President's position.


 * Q   Let me ask my follow-up, if I could.  What's the President's overall assessment of the economic fundamentals?  And are people right to be gloomy about the long-term prospects of this economy, or is what we're looking at now a short term downward trend, in his estimation?


 * MR. FLEISCHER: That's a question on which economists have differed.  And the President -- that's another reason why the President feels so strongly that Congress needs to pass this plan, including the retroactivity portion, to help boost the economy.


 * Q   I'm just wondering what his thinking is.


 * MR. FLEISCHER: The President is not an economist, and does not make those judgments about long-term/short-term.  The President monitors the events and he is going to continue to focus on getting the Congress to pass a plan that he believes will benefit the economy, no matter how long or short any potential down turn lasts.  But clearly, growth has declined, by every measure.


 * Q   But does he believe that the fundamentals of the economy are still strong, and productivity, unemployment, some of the other indicators, or does he believe there's real concerns in the basic fundamentals?


 * MR. FLEISCHER: He's keeping his eye on it.  Again, I think the data is -- not all the data is consistent on that point at this time.


 * Q   The votes in the House on Thursday were safe, but is the President not afraid of loosing his allies in the middle, both Republicans and Democrats, by brushing through the tax cut in the House and also by his unwillingness to compromise on key issues like the trigger?


 * MR. FLEISCHER: Particularly at this time of economic weakness, the President hopes people will join with him in moving swiftly, so we can get the economy going again.  That's another reason why the President was pleased that the House moved in the way it did, and at the speed that it did.  It's another reason the President was heartened to have the support of as many Democrats as voted for it.  So that's how the President approaches that issue.


 * Q   What are the possible areas for a compromise -- said -- just said, any trigger is dead on arrival with this President.  So the trigger is off the table?


 * MR. FLEISCHER: The President is going to continue to fight for the plan that he sent up to the Hill.  As the President has said, there are 100 voices in the Senate.  He intends to listen to them.  But the President's going to continue to fight for what he proposed.


 * Q   Ari, two weeks ago, an answer to my question about General Shinseki's ordering Army Ranger -- black berets for everybody in the Army, you said, the President had asked that this be reviewed.  But last weekend, Secretary Rumsfeld was quoted as saying, I have not asked the Army to do anything particular about that.  My question -- two part question.  Why is the Commander-in-Chief so reluctant to command on this issue, given the statements of deep concern on this from Senator Lott and Speaker Hastert, as well as Senators Miller, Helms and Chairman Warner, who yesterday asked Rumsfeld for a stand down on this Clinton administration order?  And I have a follow-up.


 * MR. FLEISCHER: Well, I'm confident that Secretary Rumsfeld is looking into this matter.  I know that DOD will be briefing  --


 * Q   He said he's not doing anything, Ari.  This is after two weeks.


 * MR. FLEISCHER: That's not what he said.  The President has asked the Secretary to look into it.  The President knows the Secretary is.


 * Q   Why doesn't he command?  He's the Commander-in-Chief.  Why can't he command?


 * MR. FLEISCHER: Because this is a decision that needs to be made in consultation with the Department of Defense, and to listen to their input.


 * Q   Was the President glad or regretful that the purchase of these $25 million worth of black berets from overseas included Mainland China, and this was not reported by The New York Times or The Washington Post, who also refused to cover the rally of Ranger veterans at the Lincoln Memorial on Saturday.  Was he happy about that, or was he sad?


 * MR. FLEISCHER: About the Times and Post coverage?


 * Q   Yes.  (Laughter.)


 * MR. FLEISCHER: Oh.  This is something that DOD is looking at, and I'll -- Secretary Rumsfeld will be addressing those questions.


 * Q   If I could, Ari, I'd like to follow that, because I actually would like to get a full and uninterrupted, Lester, answer to this.  The President did ask, specifically, Secretary Rumsfeld to look into this, yes?


 * MR. FLEISCHER: Correct.


 * Q   But Secretary Rumsfeld says he has not ordered a review of the decision.


 * MR. FLEISCHER: He said he has not asked the Army to do so.  I think you should allow the Secretary to speak for himself.  The Secretary is aware of -- certainly, he had a conversation with the President. Because he said he hasn't asked the Army to is not an indication of what Secretary Rumsfeld is or is not doing.  And as I mentioned, DOD will be briefing this afternoon and --


 * Q   What time?


 * MR. FLEISCHER: At 1:30 p.m.  And the Secretary is well aware of what the President said.


 * Q   Ari, why is the President going to meet with Prime Minister Mori of Japan who is widely expected to step down in the near future?


 * MR. FLEISCHER: It's a sign of the importance of relations between the United States and Japan, and it's always important to receive the Japanese Prime Minister when he's in this country.


 * Q   Are they going to talk about the future of the bilateral alliance?


 * MR. FLEISCHER: I'm certain they will.


 * Q   Ari, back on the tax package for a moment.  On top of what Dick Armey said yesterday, there are corporate groups, corporations or whatever that are swarming all over Capitol Hill, still looking for some kind of corporate income tax cut.  Is the President still not open to that, or what would you say to them?is?


 * MR. FLEISCHER: The President believes very strongly that this tax bill should be for the people and not for business.  And he has made that point clear.  He has told members of Congress, Democrats and Republicans alike, privately and said it publicly, that we should take care of the people first, which is why he supports a bill that would provide across-the-board income tax relief, reduce the marriage penalty, eliminate death taxes, et cetera, double the child credit.  That is what he proposed; that is what he ran on; that's what he believes should be done and that's what he's going to continue to fight for.


 * He's aware of many of the other groups who want to add provisions to it, which often those groups are able to have a good bipartisan listening-to on Capitol Hill. But he's also aware that's how bills start to grow and exceed the limits that he has set.  And he is sending a sign of fiscal discipline not to let that happen.


 * Q   When does he start threatening a veto?


 * MR. FLEISCHER: Not even near that.  The House just passed his plan.  If anything, he's getting his pen ready to sign it.


 * Q   Ari, so do the business breaks come later?


 * MR. FLEISCHER: The President has said that after this is done, in subsequent years he's more than prepared to take a look at other important tax priorities.  When he says that those should not be part of this bill, he's not saying that these ideas, some of them, are not meritorious; they very well may be.  But he is sending a sign of fiscal discipline that the bill that is before the Congress now should be limited to the amount that he has set it at, $1.6 trillion.


 * Q   Was the President notified or even consulted by the Attorney General prior to the expansion of the pardon probes?


 * MR. FLEISCHER: I'm certain that through Cabinet Secretary Affairs the White House was informed.  We're always informed on those matters.


 * Q   Does he agree with the decision to expand those --


 * MR. FLEISCHER: Again, the matters of the Department of Justice pursuing criminal investigations are not political decisions.  They should not be made because of or as a result of support or opposition to the thoughts of the President.  Those are decisions made by career professionals for their reasons, and it would not be appropriate for the White House to say, proceed or don't proceed.  And that's one of the reasons that the President chose John Ashcroft to be the Attorney General, because he has confidence that the decisions made at Justice will be non-political.


 * Q   Ari, back on the tax cut for a second --


 * Q   Is the President planning to pick up the phone or otherwise communicate with President Putin his displeasure with the Russians helping Iran's nuclear program?  And also, is there anything in the works for the two of them to meet at the EU?


 * MR. FLEISCHER: If there are any phone calls or any meetings, we'll keep you advised.


 * Q   Can I follow on that, Ari?  Does the President consider that this agreement between Russia and Iran weakens the Russian position on the national missile defense, or, conversely, strengthens the need for one?


 * MR. FLEISCHER: Well, as far as national missile defense goes, of course, Russia has indicated earlier their support for a missile defense with Europe.  You've heard them talk about that, and the President was heartened to see that.  He believes that's further indication, as you're seeing from nations around the world, that the need nations see to develop defensive weapons systems, missile defense systems.  So that's how the President interpreted the Russian statements previously about missile defense.


 * I think that's a separate matter, though, from what you were talking about -- but the President continues to believe in the need for America to develop a missile defense to protect ourselves and our allies from many rogue nations that may acquire missile technology that could be harmful to our interests.


 * Q   Would Russian technology transferred to Iran make the need for a missile defense more urgent?


 * MR. FLEISCHER: The President continues to believe that we need a missile defense because of threats throughout the world.  I'm not going to comment on any of the specifics of those arms transfers, but the President continues to believe that in the case of the proliferation around the world and the threats to our nation and our allies.


 * Q   The Kennedys have complained, as you know, about this party ad using JFK.  Is the President aware of that criticism?  Is he going to be speaking on this -- members of the family today, including Senator Kennedy. Is he amenable to telling the party to scrap the ad?


 * MR. FLEISCHER: I haven't talked with the President specifically about that one ad, but I can tell you that the President is not going to weigh in on everybody's ads that they do in this country.  There are groups who have ads on the left, groups who have ads on the right.  They don't check with the President before they run them.  The President himself has cited both Ronald Reagan and former President John Kennedy when they called for tax relief to get the economy moving again.  It's another reminder of the bipartisan nature of cutting taxes, or it's a reminder of how taxes can be bipartisan if people want to make it bipartisan.  And the President wants to make it bipartisan.


 * Q   So if today, if his friend, Senator Kennedy, asks him to weigh in, the answer will, without any question, be, no, I'm not going to weigh in?


 * MR. FLEISCHER: Well, I don't deal with hypotheticals.  If Senator Kennedy raises that, we'll try to take it up.  And if the President has anything to say, I'll let you know.


 * Q   You've said a couple times, you've mentioned economic weakness in talking about the tax cut and the need for it.  So has the President.  Earlier, you declined to say that the fundamentals of the economy were sound.  Is there any concern, given that consumer confidence is partly psychological, that the statements coming out of this administration are reenforcing the negative trends in the economy?  And do you fear the labeling of a Bush recession, if that's what we get?


 * MR. FLEISCHER: The President takes just the opposite view, Jay. The President believes it would be a failure of leadership for the White House to put a Pollyanna-ish glow on the economy if the facts indicated otherwise.


 * The President thinks it would not be appropriate to withhold information from the American public about the state of the economy. And the President also believes that presidents who are direct, who are straight and who are forthright with the public serve the public well.  And that's why he has discussed the economy in the manner that he did.


 * The American people want to know what the facts are. It's the job of government to solve the problems, and that's what the President is trying to do.


 * Q   John DiIulio's spoke before the Reform Jews this morning about the faith-based initiative.  There seems to be a growing disagreement, both on the left and the right, with the idea of discretionary grants and how they're going to be administered.


 * Do you think that as the faith-based initiative comes to Congress they're going to have to break it into pieces? Or how do you reconcile the sort of controversy -- goes between religious groups about the nature of proselytization in the awarding of government grants?


 * MR. FLEISCHER: When the President announced this initiative, he anticipated at that time there would be some elements of controversy among various groups, without regard to political affiliation, dealing with issues involving church and state.  And he's very sensitive to that.  And that's why he feels so strongly that this vital program must go forward, and do so in a way that -- for groups that also offer -- as long as there are secular services also provided, and for groups that have a separate function set up that does not proselytize, there should be no bias against them; that these groups can help solve some of society's most difficult problems.  And that's where his focus is on.


 * He wants to focus on ways to help people that work, and that's what he'll do. And very often, some of the most important changes that come in our society, particularly affecting the poor and people who are the hardest for the government to reach, come with some controversy attached. That won't stop the President from proceeding; he thinks it's that important to get help to people who are poor and needy.


 * Q   Is it a deal-breaker, as this legislation comes forward, if, as the Reform Jews seem to be suggesting this morning, that they were going to -- there is support for the idea of actually punishing or prosecuting people who proselytize when receiving a federal grant?  Is that a problem?


 * MR. FLEISCHER: Well, under the President's vision of how to deliver faith-based services to those in need, that money will not go for the purpose of proselytizing.  And, of course, that will all be worked through in the details of the legislation to make certain that that wall exists so federal money cannot go to proselytizing.


 * But that won't stop the President from pushing forward with a plan that can work with groups that have a faith-based character who also deliver vital services -- like if it's a Boys Club or a Girls Club or Alcoholics Anonymous, for example, is a faith-based organization that has done a world of good in improving and helping peoples' lives, people who are really struggling and needy.


 * And the President will not turn a blind eye to those who are in need because of important issues that are being raised. He's going to solve those problems, and that's one of the reasons he's encouraged by the reaction he's gotten on the faith-based initiative.  He always knew there would be controversy, but he's going to proceed.


 * Q   Two questions on different subjects.  A few weeks ago, Senator Pete Domenici said you probably didn't have 50 votes to pass a tax cut.  This morning, he said you probably don't have 50 votes in the Senate to pass a budget that limits spending to 4 percent.  I'd like a reaction to that comment, to begin with.


 * And my second comment is, in our recently departed administration, there was often fairly vocal criticism of Japan in terms of its economic policy. Will you maintain that tradition or break with that tradition, with the meeting with Mr. Mori, because Japan obviously has some economic problems.


 * MR. FLEISCHER: Is there a connection between your two questions?


 * Q   No, I just only get called on once.  (Laughter.)


 * MR. FLEISCHER: I'll come back.


 * As for Senator Domenici, I have not heard the Senator's statements, but I can tell you that the President has said, a funny thing about votes, you never how they're going to go until the voting actually starts. And that's another reason he feels as confident as he does, that after working with the Senate, listening to the senators and fighting for what he has proposed, the outcome is going to be very much what the President desires.


 * As for the agenda of the upcoming meeting, a little closer to the meeting we'll have more to say.


 * Q   A style** point, I mean, will the U.S. officials be as vocal as they have been in the past?


 * MR. FLEISCHER: Let's talk a little closer to the meeting.


 * Q   Smart money is that Bush is going to have to compromise on the tax cut, sooner or later -- probably closer to a Senate vote.  Does he feel like the odds are against him on getting his whole tax cut?


 * MR. FLEISCHER: The President has been very powerfully encouraged by the process as it has unfolded so far.  From his perspective, it was only six, eight months ago where people were saying to him, you really need to give up on that tax cut, no one wants it.


 * And now the debate has so powerfully shifted from an opposition proposal at that time of a $250 billion tax cut that would have left taxes too high and a lot of needs unmet, to $500 billion, to now $900 billion. And the President is going to continue to fight for the proposal that he sent to the Hill.


 * Q   But he doesn't have 51 votes right now, does he?


 * MR. FLEISCHER: Again, as the President said, a funny thing happens to votes as voting day gets closer.


 * Last question there -- he hasn't asked a question yet.


 * Q   Thanks.  A follow-up on the Japanese Prime Minister's visit. Basically, Mori is on his way out, and people are looking at him as a lame duck.  Is the White House looking at this more as a courtesy call or a goodwill visit?  If not, what are you hoping to expect?


 * MR. FLEISCHER: It's exactly as I indicated before.  It underscores the important of the United States relations with Japan, and the President is looking forward to the meeting.

Thank you, everybody.

12:56 P.M. EST