En Route Chicago, Illinois–(ENEWSPF)–November 25, 2014 – 2:50 P.M. EST
MR. SCHULTZ:Good afternoon.Welcome aboard Air Force One for Roger Runningen’s last trip.Hopefully we’ll have more to say about that later.
Before we get started into what the President is going to be doing today in Chicago, let me anticipate your first question, which is, why was the President late departing the White House this afternoon?The answer to that is the President had asked the Attorney General to come over to the White House and brief him on the latest on what’s going on, on the ground in Missouri in reaction to the grand jury decision, as well as an update on the Attorney General’s more long-term project at looking at how communities can help restore the gap of trust between citizens and law enforcement.
The Attorney General is going to have more to say about this shortly, but the Attorney General will be, in the coming weeks, visiting more cities and more communities that are dealing with this issue.He’s going to both be lifting up best practices for how different cities are managing this and also identifying challenges that we still have to work through.So I’m sure if you have more questions about that we can get to it.
But let me also say a little bit about what we can expect from the President this afternoon at Copernicus Community Center. The President will hold a meeting with a diverse group of community leaders to discuss the executive actions he is taking within his legal authority to fix our broken immigration system. He’s going to be discussing this with a diverse group of leaders, and later during his remarks will also discuss how Chicago has always been a city of immigrants, made up of immigrant families who helped build diverse communities.
The President is also going to highlight the economic impact that the executive actions he announced last week will have.
With that, I’m going to turn it over to our Chairman of the Council of Economic Advisers who can go a little bit more into that.
MR. FURMAN:So you probably all saw the strong upward revision in the third quarter GDP number.It was revised up to a 3.9 percent annual rate — following the last quarter where growth was also a very strong 4.6 percent annual rate.This is consistent with a range of other indicators which show strengthening labor markets, continued improvements in energy markets, as well as continued low growth of health costs.
While the United States is leading the global economic recovery, there’s more that we can and should do to strengthen the economy.One of the steps the President has taken that would have a significant impact on the overall macro-economy is the administrative steps he’s taken on immigration.
We conservatively estimate that these would add 0.4 percent to the size of the economy after a decade.That’s $90 billion.The extra revenue associated with this growth would cut our deficit by $25 billion.And finally, the skills and talents that immigrants would bring to this country would complement the skills of the Americans that are already here and we estimate raise wages by people born in the United States by 0.3 percent after a decade — not affecting the quantity of jobs for people born in America, but improving the quality of jobs for people born in America.
This analysis was based on a range of studies, the same studies that the Congressional Budget Office in general was drawing on in their analysis of the full Senate bill, which they estimated would add 3.3 percent to the size of the economy after a decade.
I’d note that the additions to the economy are largely because of the increased productivity that would happen as a result of the administrative actions that the administration is undertaking.Half of that productivity increase is because of deferred action.Giving people — taking them out of the shadows will allow them to move into better jobs, better use their talents, reduce the uncertainty they’re facing, and contribute to our economy and pay taxes.The other half of the productivity increases are attracting more high-skilled, foreign-born entrepreneurs to our country where they can create jobs, increase innovation, and also contribute to our economic growth.
So, all told, this is about as large an administrative action you could take even if measured solely from the perspective of what it would do to the overall size of the economy.
Q Jason, do you think that third quarter pace is going to be reflected and maintained in the fourth quarter and going into the first quarter of next year?
MR. FURMAN:GDP bounces around from quarter to quarter.So try to look over a longer period.What was encouraging in the revisions was you saw upward revisions in both consumer spending and business investment.Those tend to be two parts of GDP that are a little bit more stable and tend to continue forward a little bit more.So if you look at the underlying number of private final domestic demand, that’s increased at a 3 percent annual rate in the last year, better than overall GDP.So the non-volatile components is where we saw some of the upward revisions.
Q You’re expecting a strong fourth quarter then?
MR. FURMAN:Again, it bounces around from quarter to quarter.We’ve had very strong — we had weak growth in the first — we had contraction in the first quarter, very strong growth in the second and third quarter.But it’s averaging out to a recovery where you’re seeing the pace of growth accelerate in the last — 2013 and 2014, relative to what you saw before.
Q On immigration, can you address the concern that a lot of the people who we’d be getting work permits under the executive action are competing with the lowest-wage workers?And how is it that this is going to contribute to job growth when you’re essentially allowing folks who may not be able to get jobs now or be underemployed now because of their lack of immigration status — you’re going to have 5 million more of them in the economy.How is that going to help American workers?
MR. FURMAN:So in our analysis, we find that there will be no impact in the quantity of jobs for people born in the United States, but there would be an improvement in the quality of jobs for people born in the United States, which we measure as a 0.3 percent increase in wages, which amounts to about $170 in today’s dollars.
We reached that conclusion drawing on a range of studies that have looked at immigration in the past — for example, that have looked at the increase in immigration to California in the 1990s and the 2000s and the impact that had on wages of people there.To take a very extreme example — which is not what we’re doing — this would not allow new people into the United States with the exception of the high-skilled provision, which would allow a small number of entrepreneurs and job creators.Deferred action is about people who are already in the United States; for the most part, they’re already working in the United States.But this would put them in a better position where their employers couldn’t exploit them, couldn’t use them to bargain down the wages of Americans that already are here.
And I’d note that in 1980, something far more extreme — the Mariel boatlift from Cuba, 130,000 people showed up in Miami.It was a 7 percent increase in Miami’s workforce, and the evidence was it didn’t take jobs away from Americans and it didn’t lower their wages.Here, you’re not talking about any additional people, so we’re confident in that conclusion.
Q Do you account in the wage growth figure — you’re accounting for what you think will be better wages being paid by employers because these people are now legal to work?
MR. FURMAN:There’s two pieces to this.If you look at the high-skilled piece, you’re bringing in people that start businesses, that patent at higher rates, and a number of studies have found they actually complement the skills of people who are already here.So, for example, people have looked at patenting, and an American scientist who has a foreign scientist that comes and works in their lab, both of them are going to end up patenting more than they otherwise would have.That expands the productivity of our country.That spills over to wage gains for everyone.
In terms of the deferred action piece, that also has positive spillovers and it basically improves the division of labor.And by, again, contributing to the productivity of our economy, that spills over to Americans as well.
Q — in your CA study is that it expands the tax base, adds taxpayers to the rolls.I think two-thirds of undocumented immigrants don’t pay taxes.So why is that an incentive for them to sign up to get work permits if, in fact, they’re going to have to pay more taxes?And as your own study shows, non-native workers aren’t going to be benefiting as much as native workers. So what’s the advantage?
MR. FURMAN:This gives people — first of all, we’ve already seen with DACA that there was a very substantial take-up rate.And when you give people the opportunity to come out of the shadows, to have the opportunity to work and contribute to our country, to pay taxes, we’ve seen in a number of these cases in the past with immigration actions certainly from the 1980s forward that have been studied by economists — and my guess is ones even before that that I haven’t read the evidence on — you see people who take up these types of offers.And you saw that in the case of DACA.
Q And your estimates are based on — what?100 percent participation?50 percent participation?
MR. FURMAN:For the sake of our analysis, we used the same take-up rate as DACA — that was 60 percent, was the number I had in my head.That’s what we used for the sake of our analysis.
Q — on the emerging tax extenders deal, what does the President think of what seems to be coming out of Congress where they’re going to make permanent R&D credit and several of the other of the business credits, but it’s not clear that the child tax credit or the EITC is going to be included at that same —
MR. FURMAN:I haven’t seen the details of any deals.But according to media reports, based on those, the President has consistently stated his opposition to giving hundreds of billions of dollars of tax cuts primarily geared to corporations while leaving middle-class families and those struggling to get into the middle class behind.
The tax credits for children and the Earned Income Tax Credit lifts 16 million people out of poverty every year.And to be able to find hundreds of billions of dollars for other tax cuts and not find money for these families, when almost everything else Congress has done they’ve felt the need to come up with money to pay for it, so it’s somewhat ironic — willing to just proceed here, unpaid-for, leave the middle class behind, and include a lot of things that I think wouldn’t benefit our economy.
Q — in any detail?
MR. FURMAN:We’re going to have to see what they come forward with.I don’t want to get ahead of a hypothetical.
MR. SCHULTZ:Okay, thank you.
Q Is the President going to mention Ferguson in his remarks today?
MR. SCHULTZ:I would anticipate him doing so, yes.
Q And besides the meeting with Holder, what else has he done to try to bring about some healing?
MR. SCHULTZ: As you know, the President and the White House and the administration have been deeply engaged in this for many months now.I can tell you, over the past 12 hours, we’ve done a couple of different things.One is, Valerie Jarrett has talked to Governor Nixon twice — once last night and once this morning — receiving updates on what’s happening on the ground there and also promising to stay in close touch.
Broderick Johnson, our Cabinet Secretary, convened a call with the Missouri delegation last night, I believe, to make sure we were in close coordination about the response.White House staff also had a call with mayors from across the country to talk about the responses in their own communities, making sure that we were in close touch.
And then, the Attorney General and Valerie Jarrett also had a call last night with civil rights leaders from across the country.As you know, we’ve been working closely with them for the past few months leading up to this point to make sure that responses to this moment would be appropriate and constructive.
Q Can you talk about the President’s decision to come out last night when he did?I mean, the teargas canisters were just starting to light things on fire and he was at the White House saying everyone should accept the decision and calm down.Was there any thought of that not being the right time for him to come out and say that?
MR. SCHULTZ:The President felt strongly that he wanted to be heard last night to convey a message of calm and to offer citizens a way to be constructive in their reactions to the grand jury decision.So he feels like that was an important piece.
Q — doing that?
MR. SCHULTZ:I think if you look at the vast majority of protests, both in Ferguson and also across cities in America, including where we just left — Washington, D.C. — and where we’re headed — Chicago — the vast majority of protests were indeed peaceful and thoughtful.
Q — the President to travel to Ferguson, or the Attorney General to travel to Ferguson in the near term.
MR. SCHULTZ:The Attorney General was there, I believe, a few months ago.I don’t know any additions to his schedule.In terms of the President’s schedule, I don’t have any additions to his to announce.As you heard him talk about this last night, as he said last night, he wanted to wait until things settled down a little bit and then see where things were.As you know, there’s a team from the Department of Justice on the ground right now working to make sure things are as calm as possible.
Q — do you think he would plan to go to Ferguson?
MR. SCHULTZ:No, as he said last night, that’s something still under consideration.And as soon as we have a determination on that we’ll let you know.
Q And a follow-up — has the President himself talked to Governor Nixon?And is the administration making available supplies or other help to Missouri to calm things down?
MR. SCHULTZ:Again, I don’t have any specific calls to read out to you from the President.I would restate that the President — that Valerie spoke to Governor Nixon both last night and this morning, and has been briefing the President on an ongoing basis since last night.And each of those conversations with Governor Nixon, Valerie has pledged to stay in close coordination with the Governor in making sure that he’s getting the support he needs from the federal government.
Q What was his reaction to how the police comported themselves yesterday in Ferguson?
MR. SCHULTZ:I haven’t spoken to the President about that. As you know, the President spoke last night about this very issue, urging law enforcement to show restraint, to help create a community of calm.And he continues to do so.
Q Does he feel that law enforcement has shown restraint?
MR. SCHULTZ:Again, I haven’t spoken to the President about this since last night.But obviously that’s something important to him.He expressed that in his remarks.
Q Do you know if he was disappointed at all by some of the violence that we saw in Ferguson?And also I’m wondering if he was at all disappointed by the timing of the announcement last night.There was a lot of criticism that it came out late at night.
MR. SCHULTZ:We are all deeply worried and disappointed — deeply worried and concerned about the violence, any sort of violence.And that’s why the President went out and spoke about it last night.Again, I would remind you that the vast majority of protests both in Missouri and around the country were indeed peaceful and reflective and constructive.That’s why the President went out and spoke, and that’s what he would urge moving forward as well.
Q — a little bit of media criticism last night.I’m wondering specifically what you guys’ reaction to the way that the President’s remarks were broadcast were.There was this sort of split-screen of the protests as they were going on and the President’s remarks.And so I’m just wondering what kind of reaction that had, if the President felt like the media handled things well last night?
MR. SCHULTZ:Again, the President’s not a media critic.
Q I’m not one either.
MR. SCHULTZ:And all I would say is I think the images that were captured last night were all the more reason the President felt compelled to go out and speak and urge calm.He wanted to make sure that folks knew there was a way to respond to this that was both peaceful and constructive.
Q Eric, has the President been briefed on what may happen tonight, looking ahead?
MR. SCHULTZ:I believe that was part of the conversation that the President had with the Attorney General, but I don’t have any details on that.
Q — on the militarization of police forces after the August event.What’s the status of that review and can we expect anything in the short term?
MR. SCHULTZ:Thank you Jim.That task force that was directed by the President has reviewed federal programs that support the purchase and acquisition by local law enforcement agencies and is preparing a report to present to the President.I don’t have an update for you now, but we should be hearing results of that report in the near future.
Q So, Valerie Jarrett gave an interview to the Chicago Sun Times saying that Speaker Boehner had asked the President not to make a big push for immigration during the primary season. What can you say about that?
MR. SCHULTZ:I don’t have any specific information about that specific conversation.I would note that we were fairly forthcoming when Speaker Boehner approached the President himself and said, were not going to move on immigration reform, despite the bill having pretty substantial bipartisan support in the Senate.The President went out to the Rose Garden the next day, announced that he was not going to stand by and let our broken immigration system remain broken, that he was going to look at what he could do within the bounds of the law to take action.
Q Can I ask about Hagel?There was some reporting last night that part of the, I guess, conversation that they had was a dispute over how quickly prisoners were being released from Guantanamo Bay.So I’m wondering if you could just discuss at all about how Gitmo played into their conversations about the Secretary leaving.
MR. SCHULTZ:I don’t have any specific insight into that conversation.I think there was a lot of reporting sort of trying to speculate on what happened on the relationships there. And what I can tell you is I would put the most stock in the source who we heard from yesterday, the President of the United States, who expressed a lot of gratitude towards the Secretary of Defense, who is also his friend, for his service; noting his strong record both winding down the war in Afghanistan, making strong fiscal choices, tough fiscal choices at the Department of Defense, and then also making sure that our armed forces, our military forces were prepared to succeed for the coming threats.
Q — was the White House, and the President in particular, disappointed with the speed with which the Pentagon was acting on Gitmo detainees and releasing them.
MR. SCHULTZ:To be honest with you, I don’t know that to be true.Again, I think we were fairly forthcoming in the reasons that yesterday’s announcement was made.That was based on several weeks of conversations initiated by Secretary Hagel to the President of the United States, just talking about what he had worked on the past two years, what the next two years would look like, and they, together, came to the conclusion that it would be best to start anew.
Q How advanced are you in search for a new Defense Secretary?
MR. SCHULTZ:Josh didn’t take the bait on this yesterday; I’m not going to do so today.I don’t have any personnel updates for you.
Q Have you seen what Chuck Schumer said at the Press Club about the elections?Do you have a reaction?He said you shouldn’t have acted on Obamacare first.You should have done middle-class stuff first.
MR. SCHULTZ:I saw that he talked about the need to have an emphasis on helping the middle class, and that is something that drives us and this President every single day.I think if you look at both the legislative proposals we had put forth and support, or the executive actions we take on any given day, they all have a common thread, which is helping to build America’s economy from the middle class out.
Q He also suggested that, kind of mistakes on Obamacare, on the VA had eroded trust and government and that, in turn, Democrats had suffered at the polls.So I’m wondering if that’s a concern that the White House shares and if there’s going to be anything that you guys do to sort of reprove your confidence, if that’s a complaint coming from a major Democrat?
MR. SCHULTZ:I used to work for that major Democrat.And I’d say if you want to have a conversation about the Affordable Care Act, we should, because we believe strongly the Affordable Care Act is working; that kids for the first time can stay on their parents’ plan, that women with preexisting conditions no longer have to worry about being discriminated against in terms of coverage, that 9.1 million additional Americans are now covered under Medicaid, that 10.3 million previously uninsured adults now have health insurance.
So we believe that the Affordable Care Act was a landmark, historic legislative accomplishment for both the United States Congress, the President of the United States, but more importantly, a major step forward for the American people.
Q Eric, is this the beginning of sort of a road show to sell these immigration actions?I mean, he was in Las Vegas, but Las Vegas has a huge Hispanic population.This is a place that has a large one, but also lots of other immigrants.I’m just wondering if he’ll be traveling more around the country to sort of sell this more broadly beyond the Hispanic community.
MR. SCHULTZ:Julie, it’s a good question.I don’t have any future travel to preview for you, but I would sort of take stock at what we’ve done thus far, which are, one, give a primetime address last Thursday to as broad of an audience as possible.We had a lot of online amplification, digital products that helped push the President’s message on this.Friday morning, we traveled to Las Vegas.We released a Council of Economic Advisers report on the economic impacts of this.We’re also traveling today to Chicago.I don’t think this will be the end of our conversation on this.
Q And the point, Eric, is what?That the public is not entirely sold on the executive actions, or what’s he trying to drive at?
MR. SCHULTZ:I think it’s more that this is a pressing issue facing the country — that what the President announced was an important step in addressing those challenges, but there’s more to be done, and that if Congress were to pass comprehensive bipartisan immigration reform, one like the one that passed in the United States Senate with Democrats, Republicans and independents supporting it, that he would crumple up his executive actions and sign that bill into law.
Q — there lawmakers onboard today?
MR. SCHULTZ:Congresswoman Jan Schakowski, and Congressman Brad Schneider.
Q Will he be joined by others at the event, or is that it for members?
MR. SCHULTZ:Good question.I’m happy to track that down.
Q Were there any kind of deliverables that the President asked for from Attorney General Holder or Valerie Jarrett as far as beyond just reaching out, continuing to reach out and stay in touch, and beyond the work that we already know the Justice Department is doing?Are there new things that the President kind of launched them on today?
MR. SCHULTZ:Thanks, Jennifer.I believe the Attorney General is going to sort of have more announcements to be able to make to talk about his effort at the Department of Justice in terms of how that project is undergoing and some future steps they’re going to take, so I’m going to let them do that.
Q — at Justice?
MR. SCHULTZ:I believe they’re going to find some platform to get this information out.
Okay? Thanks, guys.
3:15 P.M. EST