Washington, DC–(ENEWSPF)–July 26, 2011 – 12:48 P.M. EDT
MR. CARNEY: Good afternoon, ladies and gentlemen. Welcome to the White House. Thanks for being here. It’s time for your daily briefing.
Before I get started with questions, I think you all know by now that the President and the Vice President visited the Norwegian embassy in Washington to offer their condolences to the people of Norway after the tragic killings that occurred last week.
The President and Vice President will sign a condolence book before returning to the White House. The First Lady and Dr. Biden asked the President and Vice President to deliver their own handwritten condolences — condolence letters, rather, to the embassy.
Also I just want to mention — obviously we all watched the President last night. He spoke to the nation about the debate we’re having in Washington over the need to raise the debt ceiling to make sure that America honors its obligations, and the need to reduce our deficits in a balanced way. He believes that the American people overwhelmingly, no matter their political affiliation or whether or not they’re even affiliated with a party, believe that Washington should come together, that Washington should compromise and that a balanced approach to deficit reduction is the right approach. He called on Americans to — who feel that way to make their feelings known to Congress. And while there’s nothing scientific about it, there’s certainly anecdotal evidence that many Americans are doing just that. So we are — we welcome that, obviously.
And with that, I will take your questions.
Q Thanks, Jay. Can you be as specific as you can about whether August 2nd is in fact a drop-dead deadline for default or whether there is some wiggle room the government has to carry functions forward in the coming days?
MR. CARNEY: Ben, that’s a good question. As you know, the United States hit its debt limit in May. And since May, the Treasury Secretary, using authority that he has, and doing what previous Secretaries of the Treasury have been able to do, has exercised all the wiggle room available to him, and that runs out on August 2nd.
That’s not a guess. It’s not a political opinion. It is the judgment of career analysts at the Treasury Department. Beyond that date, we lose our capacity to borrow. We give up our borrow authority without action by Congress. And the result of that risks default for the United States for the first time in our history as we face the reality that we take in only 60 cents for every dollar we owe. And that’s not a situation that we believe will happen, and it is certainly a situation that should not happen.
Q The President said last Friday that he was already talking to Secretary Geithner in terms of the consequences if there’s default. I know you just reiterated that you don’t think it will come to that, but in a sense of prudence, is the government, in fact, already game-planning what would happen if default happens and communicating that to other leaders, to the states? Is there anything you can share with the American people?
MR. CARNEY: Well, as you have heard the Treasury Secretary say, every President, every Treasury Secretary — Republicans and Democrats — have taken a hard look at this issue and reached the same conclusion — this goes to your question about August 2nd — that there are no more measures that can be taken. Of course, the Treasury is having discussions with OMB, with the Fed, to work through how we would manage this impossible situation, this impossible position.
But it is important to state again that we do not believe we will get there. We think — we take the leaders of Congress at their word that they agree with the President, that it is unthinkable and unacceptable for the United States to, for the first time in its history, default on its obligations, and that action will be taken by Congress to ensure that does not happen.
Time is running out. So while we remain confident, we are also — we also understand some of the anxiety out there because we are pushing this to the last minute. And that should not be the case, but in the end we believe Congress will act appropriately.
Q I’ve got one more, please. There have been many times when a bill has been proposed and the White House has said that should that legislation get to the President’s desk he would veto it, even before it moves through Congress. If Speaker Boehner’s bill, the Republican bill, made it to his desk, would the President veto it?
MR. CARNEY: Well, as you know, the White House Chief of Staff addressed that explicitly on Sunday —
Q That was before the Boehner bill was unveiled, so it wasn’t directly connected —
MR. CARNEY: I’m not — that position hasn’t changed. It is, however, moot because, as the President made clear last night, we’re in a stalemate. The Speaker’s proposal cannot pass the Senate, will not pass the Senate, will not reach the President’s desk. This is the problem we have, is that we need Congress to produce something that is a compromise and that, therefore, can get support from Democrats and Republicans in both houses and reach the President’s desk and meet the President’s approval. That’s why we need compromise.
And the President spoke in detail about why compromise is essential and why there is an admirable and long history of Republicans and Democrats with strong disagreements and differences of opinion and ideological differences in the past coming together and finding compromise on tough issues.
President Reagan did it with Democratic Speaker Tip O’Neill. President Clinton did it with Republican Speaker Newt Gingrich. This President did it with Republican leaders in December. It can be done again and it must be.
I would note that the Speaker of the House in his address last night that followed the President’s never mentioned the word compromise, and yet that is the only alternative. We have a divided government. We have a two-party system. No party controls every branch of government. Compromise is the only option, and we will hopefully get there.
Q No chance it passes the Senate? No chance?
MR. CARNEY: Well, look, that’s our — we do not believe it will pass the Senate. Senator Reid I believe said today on the floor that it will not pass the Senate. He is the Majority Leader, has a pretty good feel for the place. We certainly strongly feel that it is not a bipartisan compromise measure and that it is not — it is, in many ways, a back-door way, to get cut, cap and balance or the Ryan budget, things that they couldn’t get through the front door and make law because the American people don’t support it in through the back door, and that’s just not acceptable. Now is the time to compromise. It’s for Democrats to give, for Republicans to give to reach a solution that’s not ideal for anyone except for the country. Not ideal for a political party but the right thing for the country.
The President has demonstrated his willingness to do that repeatedly in public and in private. He’s got skin in the game. He has made clear that he will make compromises. He came this close in negotiations with the Speaker of the House in great detail, making clear the kinds of decisions he would make that are tough and the kinds of decisions that he would endeavor to persuade Democrats to accept in order to reach a compromise, because he believes it’s the right thing to do.
Q Jay, some conservative Republicans are expressing skepticism that even the Boehner plan could pass the House. So if that’s going to have difficulty, how could the Reid plan pass the House and what is the path forward?
MR. CARNEY: Well, I hung up my reporter cleats. When I used to be — cover Republicans on the Hill, I had a better feel for what could or couldn’t pass the House. I leave that up to others to judge.
I think the plan put forward by the Majority Leader in the Senate, Senator Reid, is a much better option. It represents compromise. Others have pointed out that it doesn’t include revenues in it explicitly, except for tasking a committee to deal with the hard issues of health — entitlement reform and tax reform.
It has substantial, considerable, deep spending cuts. It addresses the absolute need to lift the cloud over our economy that the uncertainty about whether or not we will default has created. It is a legitimate compromise measure. We believe that it could pass the Senate and the House if folks gave it a fair shake, and we appreciate Senator Reid putting it forward.
Q There are some lawmakers, Pat Toomey and others, saying that the calm in the markets so far indicates that there isn’t a crisis in the same way that the administration has said there is. What is your answer to that?
MR. CARNEY: I would simply point to the abundance of experts, non-political experts, who have made clear that the prospect of the United States losing its borrowing authority and risking default is horrible to consider, cataclysmic potentially to our economy and the global economy. I’ve done it enough times that I won’t do it again, but I could read to you from letters written by President Reagan saying just that; by then Treasury Secretary Jim Baker saying just that; Republicans of all kinds saying just that in current — in the present day.
It is simply wrong. And to risk that is to make a terrible mistake and to play chicken with our economy. The fact that there remains confidence in the world that Washington will at the last hour get its act together and do the right thing is a good thing, because we always have and we believe we will. But it is whistling past the graveyard to suggest that this is some sort of game and that we’re not serious, and that the risks aren’t enormous, because they are.
Q The Reid bill, which the President would not consider to be a balanced approach, appears now to have enough votes to sustain a filibuster by the Republicans. And the Republican leadership says that they don’t think the Reid bill can pass.
If the Boehner bill is the only bill that passes, why would the President not at least try to embrace a way to avoid default?
MR. CARNEY: The Boehner bill can’t pass the Senate, Jake. I mean if you’re saying that the Reid bill could get a majority in the Senate but not clear the filibuster, if the — I mean —
Q That’s how the Senate works.
MR. CARNEY: All that — right. But all that says to me and to the President is that we have to find a compromise. We have to set aside — and we believe that this is important for the Republicans to do because they keep putting forward measures that don’t represent compromise, that don’t give on their issues, that, as they say, are just new versions of the same things they’ve been trying to do — that we need to stop that, and we need to work together to do something that allows us to extend our borrowing capacity and addresses our deficits and creates the opportunity or the condition to further address the hard issues of entitlement reform and tax reform.
Q Right, but —
MR. CARNEY: You’re asking me if neither of these things passes, what happens? And I think —
Q No, I’m not asking that.
MR. CARNEY: Okay.
Q I’m saying if one of them is capable of passing a body of Congress and the other one can’t even pass the Senate, the Senate bill can’t even pass the Senate, why not look at that as a way out of this? I understand you oppose it, but it’s better than nothing, right?
MR. CARNEY: But, Jake, first of all, that hypothetical hasn’t come to pass. Secondly the, like you said, it’s the way the House and the Senate work, but if you’re going to get similarly narrow majorities in both houses it does not represent a bipartisan compromise, especially if it’s purely partisan on both sides. That’s not how this needs to work. It’s not the way, in a divided government, that it can work to create the kind of balanced approach, even if it’s unsatisfying to certain members of Congress, in order to address this serious problem.
So we can go around and around, but I don’t have an answer to you because it hasn’t come to pass. I think that what all of this shows, and the reason why the President spoke last night, was to inform the America people about the fact that a stalemate exists. And the scenario you just put forward demonstrates if it were to come to pass that the stalemate exists. We need a bipartisan compromise — a word that for all the wrong reasons has become a dirty word in Washington, when in fact most Americans out there are not absolutists in their views about what Congress should or shouldn’t do. They just want Washington to work for them.
Q Is the White House working to arrive at a compromise?
MR. CARNEY: Every day. Every hour. All weekend. The fallacy that we have not put forth detailed proposals when the highest members of this administration met regularly with leaders of both parties in both houses, trading ideas, on paper. As you know, the President gave great detail on Friday about proposals he had been negotiating with the Speaker of the House. And many of you went and spoke with senior White House officials who bombarded you with numbers that demonstrated the level of detail to which we have been engaged in negotiations with the Speaker of the House. We have been — we have operated in good faith. We have made extreme compromise —
Q But I mean since Friday — since everything broke out on Friday.
MR. CARNEY: Yes. We have been in regular contact with the leaders of both houses and both parties.
Q And so what’s plan B?
MR. CARNEY: We’re working on a plan B. (Laughter.) But obviously Congress has to come together. There has to be a product that can pass the House and the Senate and be signed into law. We’re part of that process, and this President has been engaged in an intense way at a great level of detail. And that continues. And we believe that we will get to a point where we will reach the kind of compromise that is essential to ensure that America does not default on its obligations and to ensure that we begin the process of significantly paying down our deficits.
Q Thanks, Jay. The Speaker has effectively cut the President out of a significant part of the discussions going on. Does the President feel sidelined?
MR. CARNEY: Absolutely not. I think, not for any lack of trying to keep things somewhat quiet, it’s been made clear that conversations between the White House and leaders of both parties in both houses have continued through the weekend, into this week. And they have to continue because we have to find a compromise.
We believe that that’s why — that’s what we’re here for. That’s why the President and the Vice President were elected, that’s why each member of Congress was elected — to work together to produce action that benefits the country. And working together means you don’t get to just decide in a group of like-minded individuals that this is what you want and try to force it on everybody else. You can try to persuade everyone else that you’re right, but when that process fails — as it has — you need to compromise. And that’s where we are.
Q The Speaker has said publicly he doesn’t want to deal with the President, he wants to deal with the Senate. And we’re not seeing the kind of meetings that we were seeing before. How is that not very much a change in the President’s role on this side?
MR. CARNEY: Well, look, we have — it is a helpful question in that it elucidates where we’ve been here. Either the President isn’t engaged enough, or he’s too engaged. It’s always — you know, he has met regularly with the leaders of Congress. He has met individually, collectively with the leaders of Congress. He is steeped in the detail and has been engaged in the negotiations. Jack Lew, Rob Nabors, Bruce Reed, many others have been intensely engaged in this, and they continue to be. Whether that entails large, formal meetings in the Cabinet Room or telephone conversations, it continues.
And we’re not — we’re just looking for a process that produces the result that America needs to ensure that the economy stays strong, that it keeps creating jobs, that our credit rating is maintained, and that we are able to address the serious issues of reducing our deficits and getting our debt under control. The process is far less important than the result.
Q And you said — I mean, it seems significant that the President did not outright say that he would veto the Boehner plan. And you say it’s a moot point, but at the same time there was a veto threat on CCB, which wouldn’t have made it to the President’s desk. So you could argue why not on this.
MR. CARNEY: Look, I mean, the way these processes play out and SAPs are produced, I’ll leave it to the people who produce SAPs, which are Statements of Administration Policy. The White House Chief of Staff —
Q Horrible. (Laughter.) SAP?
Q SAP? Those poor SAPs.
MR. CARNEY: You haven’t heard of SAP?
Q I’ve heard of SAP.
MR. CARNEY: Okay. I’ll leave it to people who create SAPs, which are Statements of Administration Policy. You all know what they are.
So the point is we’ve addressed this. The President has made clear his position on that proposed legislation, or that now existing legislation. The White House Chief of Staff asked about this, addressed it clearly.
The point is we’re not — we don’t think it’s going to come to pass, so it is a hypothetical. But our position has been clear.
Q You could say the same thing about CCB, with the veto —
MR. CARNEY: Look, but the White House Chief of Staff said so. He said the President would veto it if it hit his desk. I mean, that’s pretty clear.
Q So why not a SAP?
MR. CARNEY: Again, I refer you to the producers of the SAPs. (Laughter.)
Q You have nothing to do with it?
MR. CARNEY: I don’t produce SAPs.
Q The President has nothing to do with it? (Laughter.)
MR. CARNEY: We’ll get back to you on that.
Q Jay, would the President sign a debt ceiling increase that includes no new tax revenues?
MR. CARNEY: I think the President made clear that the option that the Majority Leader put forward was a better option than the Speaker of the House put forward, not an ideal option but a better option. It does contain within it the mechanism by which a committee would grapple with the tough issues of entitlement reform and tax reform — in other words, revenues.
But it does not contain within it up-front revenues. And guess what? That’s a compromise. The word that wasn’t spoken by the Speaker of the House last night. That’s a compromise. We understand that we’re not going to be able to get the exact bill through Congress that we want. We accept that. We think it’s important that what does emerge can get support from Democrats and Republicans, and can be signed by this President.
And then, after that’s done, we go back to the grindstone and we keep working on those tough issues that this President has shown himself willing to address on entitlement reform and tax reform, because those remain important.
Q The President appeared in the briefing room on Friday and talked about being left at the altar twice and there was a lot of discussion about moving the goalposts. Then on Saturday, the President spoke with Speaker Boehner and offered a new proposal again where he would be willing to take out the $400 billion and leave it just at $800 billion in revenue. Why did he do that?
MR. CARNEY: Well, I think the President made clear, I made clear, and others made clear that the idea that we had moved the goalposts, that we had suddenly put forward a proposal that blew up the negotiations was simply wrong.
Negotiations engage in, okay, you need a little of this, I need of that. Here’s how this works. We’re making all these commitments for significant savings out of entitlement reform; in order to do that, I propose that we need this much more in revenue.
The last time the President and the Speaker spoke, he said, if you can’t do that, let’s talk about it. Let’s figure out a way to get to yes.
And the Speaker walked away for the second time. What — I’m not going to address the specifics of conversations that the two men had or that others had, but I think it’s absolutely the case that we believe there is room to find an agreement in the negotiations that the Speaker of the House and the President were engaged in, and that we didn’t make ultimatums or final offers. And the $400 billion of revenue that you refer to is certainly something we can discuss.
And if the answer is, well, that was my position, but it’s not my position today, so if you give me that, I no longer say yes, then that raises doubts about your commitment to actually finding a solution that’s a compromise. We are willing to compromise. We believe that there is a balanced approach that could clear both houses — probably not a single member would say that it was his or her ideal solution, but it could get a majority in the House, a filibuster-proof majority in the Senate; it would get support from Republicans and Democrats, and it could be signed by this President.
And most importantly, it would remove the cloud hanging over our economy created by the uncertainty over lifting the debt ceiling. And it would address in a significant balanced way the need to reduce our deficits going forward.
Q Congressman Jim Jordan, who heads the Republican Study Committee, has just said, “I don’t have an exact count, but I do not believe there are 218 Republicans supportive of Boehner’s new proposal.” If the White House believes that Boehner’s proposal is going to fail, and there’s already some Republican defection, and the Reid thing is not going to pass 60 votes, why not have — why not convene everybody back here to the White House and —
MR. CARNEY: As you know, we’ve had a lot meetings here, and a lot of them have been called on fairly short notice. And I’m certainly not going to preclude the possibility that more meetings will come. We are doing whatever it takes to try to reach a compromise here, as you know. And this President continues to be willing to do that — whether it’s phone calls or it’s meetings, additional proposals; or standing back, because leaders of Congress tell him that that’s the best way for him to reach a solution.
His views are well known. His proposals and commitments have been detailed in word and on paper, and he remains open to finding a way to compromise with Republicans and Democrats.
Q Thanks, Jay. To follow on that —
MR. CARNEY: Is this the first —
Q Yes, this is our first exchange from this seat.
MR. CARNEY: Actually, this is your good side.
Q Thank you. (Laughter.) I knew you had a one-liner. I thought it was — but I actually moved to the left, so —
MR. CARNEY: Yes. My right, your left. It’s very confusing.
Q Your right, my left. (Laughter.) I wanted to follow on Norah because if you basically have this Boehner plan that you say can’t get through the Senate, and you’ve got a Reid plan that the Republicans don’t think you can get through the Senate or the House, and you’re saying we want a compromise, what was the point of giving a primetime address to the nation without an Obama plan and say neither of these other plans can work? Where is — where is your plan?
MR. CARNEY: I understand that idea that there is not an Obama plan is like —
Q But there’s not. There’s not one on paper. There’s not one on paper.
MR. CARNEY: — point number one — is point number one on the talking points issued by the Republican Party. I get it.
Q No, no, that’s not a talking point.
MR. CARNEY: Okay?
Q No, no, show us the plan. It’s not a talking point. That’s unfair. Where is the plan?
MR. CARNEY: We have said from the — first of all, the President put forward in detail his principles at George Washington University —
Q Principles, right. That’s not a plan.
MR. CARNEY: — quite a lot of detail. The President stood before you — I can’t remember if you were here Friday night. Some of you weren’t because you cut out early, but a lot of you were.
And he put forward in detail with numbers what he’s willing to do. He then referred from the podium to the fact that White House officials will be briefing in detail what our plan is.
Now, the purpose of putting forward a plan on paper — our interest in this has been to get a compromise, to get a deal. It has not been to politically position ourselves, say, with things that appeal to our base, maybe pieces of legislation that we know can’t pass but it would be greeted warmly by certain constituencies. Our goal, and the reason why the negotiations have been conducted the way they have been conducted, is because we want a result. That’s the way the President has.
And it is simply not the case. The senior members of the House Republican leadership can open their desk drawer, pull out reams of paper that represents the President’s proposals and his counterproposals, and his counter-counterproposals, and his understanding that they need more of this and that he would like more of that. There is plenty of detail.
Q But even the President gave numbers on Friday night — White House aides were saying last night he was giving the speech to the nation because most Americans were not paying attention until last night. So even if he gave these numbers on Friday night, they have not — the American people were not paying attention Friday night, by your own estimation. So why didn’t he say last night, here are the nine things that I support? Here are the numbers, here’s what I want to do on taxes, and just lay it out — and say, call your congressman with this — not with this vague —
MR. CARNEY: The point — I mean, the fact is you address the nation only so often on primetime. The President has been out here with an unbelievable amount of regularity talking to you, talking to the American people throughout this process. He has put forward in great detail — I mean, if you guys haven’t talked about it on air or put it in your newspapers or online, then you should, because the detail is there.
Secondly, he needed to talk to the American people last night because — for a good reason — because they have their own lives to worry about and they count on Washington not always to take care of everything, but to take care of the big things like making sure we don’t default on our obligations. And he needed to talk to the American people, to those Americans who haven’t been paying close attention, to let them know where this stands and why it’s so important and why the risk is there that if Congress doesn’t act — and we believe it will — something that has never happened before in our history could happen and it would be very bad, indeed.
That’s why he had to address the country and why he wanted to explain to them his view that compromise is so necessary.
Q One other quick thing. I think on CBS radio this morning Dan Pfeiffer said that if Congress does not act by August 2nd this could lead to a depression. Is that your position, that we might have a depression in America?
MR. CARNEY: You know what, depression, how you — what I know, what economic experts have said, is that — and, again, Republican and Democrat, Jim Baker, Ronald Reagan, all sorts have said that a default on our obligations would produce an economic calamity. How you define that obviously depends on how long it lasts and what the ongoing implications of that would be.
We don’t believe it’s come to pass. Economic calamity is plenty scary and we should not even entertain that.
Q But over the weekend Democrats were saying there’s going to be a “Boehner drop” if there’s no action. Asian markets are going to crash on Sunday. Didn’t happen. American markets didn’t crash on Monday, and thankfully they have not crashed on —
MR. CARNEY: Ed, I want to move on, but you should go on the air and tell your viewers there’s nothing to worry about. That’s one approach.
Q Jay, why not release the last offer that Boehner made? I mean, instead of — if you don’t want to release your own plan, release that plan. If that’s the deal — if that’s the last offer he made and you guys are willing to go back with a few minor tweaks, release it. It’s the last week — release it.
MR. CARNEY: I’m not going to — look, we have shown a lot of leg on what we were proposing —
MR. CARNEY: From the podium, right here. (Laughter.) And from the Roosevelt Room. Certainly the Speaker of the House can address, or his people can address what they were — what their last offer was. They claim that they walked away from the table because of the $400 billion —
Q Why not you do it? If they throw it out there and then you’re —
MR. CARNEY: The President stood here — Chuck, again, I can’t remember if you were here — it might have been Kristen — but the President stood here on Friday night and went into great detail. You should look at the transcript. The President’s people met —
Q I understand, I’ve seen the transcript — there’s still nothing out there. Why not just release that plan?
MR. CARNEY: Is it because you — I mean, look, you need something printed for you, you can’t write it down? There is ample detail —
Q It’s not a plan. No, it’s not a plan. It was details of the plan, but it wasn’t a plan the same way that we’re getting a plan on the House side or that we’re getting a plan on the Senate side. It’s not.
Q We don’t know what the Medicare thing is. We don’t know what the Social Security part of this is. There wasn’t — I mean, there was a lot of missing detail.
MR. CARNEY: We talked in great detail about what’s in Medicare, and you know it.
Q Why not put it out there, though? You guys went before the American people last night — and I know that you’re probably getting frustrated because we’re all asking a version of the same question — but you went before the American people last night and said come — call your members of Congress and tell them we want a compromise. Well, you had a plan that you were making the case for which sounded like a version of the compromise. Release it to the public. I mean, that’s —
MR. CARNEY: $1.5 to $1.7 trillion in agreed-upon domestic discretionary non-defense savings — cuts; other savings — and on the most important stuff, the tough stuff, the stuff that makes it very hard for Democrats to do it but they’d be willing to do it — important savings on entitlement reform. You know the issues; the President talked about it, other people talked about it, in terms of the kinds of reform that would produce significant savings. Okay? Significant savings in defense — $400 billion — significant savings in defense spending. All right? Significant savings in revenue through closing loopholes and tax reform that would produce — by lowering rates and broadening the base, it would produce significant savings.
There are details — we can go through details. And what we put forward — again, this is a fluid situation. The point is, as both parties have said, they were engaged in serious negotiations; we were close to an agreement. One party said they walked away because of an insistence on an extra $400 billion in revenue. We said we could easily talk about that and resolve that issue. And that’s the kind of compromise —
Q — $800 billion in new revenue into the Treasury —
MR. CARNEY: That’s correct.
Q — coming out of tax reform.
MR. CARNEY: Correct.
Q And which parts of — and was entitlement reform going to be cuts upfront and then a condition?
MR. CARNEY: Well, you know how things that had been talked about in terms of the reforms that would obviously be in the entitlements be phased over a certain period of time — nobody has talked about upfront tax revenues. For example, the President himself said nothing before 2013 — and how these things would play out. But these were significant savings, real savings — the kinds of things in terms of entitlement reform that people have talked about for a long time, and Republicans in particular — the President was willing to do. And he was looking for a partner, and he felt he had one, and he hopes he still has one going forward.
Q If he comes back with that $800 billion, why don’t you guys just accept the deal, ask a senator to introduce it in the Senate?
MR. CARNEY: We’ll see.
Q Just quickly to follow on Chuck, I mean, the President did say to us on Friday that you guys would open the books and show us the paper. And then when we were in the Roosevelt Room, there was paper that we asked for that we weren’t actually physically handed. So was that — are you going to give that to us?
MR. CARNEY: The senior people in that room walked you through the numbers, okay? You know — I mean, we can engage in this, but you know that the reason why we’ve approached it this way is precisely to make it — to create the optimum circumstances for a compromise. It is — most of you are veteran Washington reporters. You know how this process works; that if you — that when you put forward a position, it becomes highly — on difficult issues, before a compromise is reached — it becomes charged politically and your chances of actually getting an agreement diminish significantly. That’s how it works. You know that’s how it works.
And it’s for that — if you don’t, well, you should. Others do. It is precisely because we wanted and believed and hoped that we could reach a compromise that the negotiations were conducted the way they were — by both sides, by the way.
It is one thing to say that, yes, Republicans put forward plans that everybody knows can’t become law. Republicans were also engaged in quiet, detailed, concrete negotiations to reach a compromise.
Q Are you worried about activists tearing this — activists on your side of the aisle tearing it apart?
MR. CARNEY: And theirs. And theirs.
Q But that’s why you didn’t — that’s why this hasn’t gone public?
MR. CARNEY: You know how it works.
Q I understand that, but that is the reason you —
MR. CARNEY: Because we wanted an outcome that if — as we’ve talked about, we’ve cited Bob Dole and others, you got to hold hands, get in the boat together, okay? That’s why.
Q Can I — one more. Just — you said earlier we’re working on a plan B. What do you mean by that? Is that — because there’s a real chance that what happens in the House and the Senate may actually not —
MR. CARNEY: We don’t have the luxury of waiting for —
Q Is the White House working on a specific plan B? Is that what you mean?
MR. CARNEY: The White House is working on talking to members of Congress about — as it has every day, seven days a week, for multiple weeks now — about ways that we can get to a result here that does what it needs to do, which is ensure that the debt ceiling is raised, that the cloud is removed from our economy, and that we reduce deficits — acknowledging that we won’t get everything we want, that we may not grab hold of this unique opportunity as fully as we could have and deal with issues up front like are embedded in this, like tax reform and entitlement reform.
But we have to do something significant. And we absolutely have to ensure that we remove the threat to our economy that uncertainty creates.
Q Does the lack of market reaction make it more difficult at this stage in the game to get a deal?
MR. CARNEY: No. Look, I’m not a market analyst. But I think it is a good thing that people still believe, as we believe, that Washington will eventually do the right thing and resolve this problem. And to the extent that that’s reflected in markets, that represents our view, which in spite of everything, in spite of the drama and then the back-and-forth, that in the end, because of the stakes and because of the need to do something and the reason — and the fact that we’re here to serve the American people, we will, in the end, do the right thing.
Q Jay, after all the previous talks about corporate jets and so forth, what is the message from here to people who thought that the President was going to deliver an end to those tax breaks that he backed away from last night when he endorsed the Reid plan.
MR. CARNEY: He didn’t back away. He spoke at length about the need for balance, the need for — he referenced corporations and individuals.
Q But the Reid plan does not include those items.
MR. CARNEY: Again, we said it was a much better option than the Speaker’s proposal. It is not our ideal option. We still believe balance is the way to go. At some point we have to go with the best possible option that ensures that we don’t have this threat hanging over our economy and that achieves significant deficit reduction.
Even within the proposal put forward by Senator Reid, there is a mechanism to continue to address the issue of entitlement reform and tax reform. As I just said in answer to the last question, we agree that it would be best to address that now in a grand bargain, a bipartisan compromise.
Short of that, we need to do — take all the necessary measures to ensure that this threat doesn’t loom over our economy and that we significantly reduce the deficit.
Q So is the message, then, we’ll fight —
MR. CARNEY: The message is that we’re willing to compromise.
Q — we’ll fight the tax break fight another day?
MR. CARNEY: We will deal with entitlement reform and tax reform in the future as soon as possible if that is the way that this comes out, as long as these other issues are dealt with.
Q Just to be clear, would the President veto any shorter-term extension than what he’s requested? Since we’re talking about compromise, is that something he’s willing to compromise a little on?
MR. CARNEY: I think the President has been clear. I’ve sort of addressed this a couple of times already. The President has been clear about where he stands on a short-term compromise. It is — or a short-term extension of the debt ceiling. Any kind of bill that requires that we go through this in five or six or eight months again, I mean, it is — does anybody believe that this would be easier in six months when according to the plans put forward, we would be — there would be an attempt to basically install the Ryan budget or the cut, cap and balance into law again? Does anybody think that would be easier? I don’t think so.
The President has been clear about why he opposes a short-term extension of the debt ceiling. So there was really — that’s all I can say on that.
Q And following on Carol’s question. Is there any concern that it could take a downgrade in the U.S. debt’s credit rating from these credit rating agencies to actually force a deal among some House Republicans?
MR. CARNEY: No, we believe that the leaders are fully aware of the risks and the potential consequences and why we take comfort in the fact that everyone to a person says that we have to take action.
Q The President has said his lawyers are not convinced that the constitutional option is a winning argument. Is that the same as saying that it is totally off the table?
MR. CARNEY: It doesn’t — it’s not available. The Constitution makes clear that Congress has the authority — not the President — to borrow money. And only Congress can increase the statutory debt ceiling. That’s just a reality.
You can have an esoteric discussion about constitutional law and what could not or should not be changed — but we don’t — we don’t have the luxury or the time. The law is as it is, that’s how we view it, and that’s why we have to reach a compromise.
Q I know you expect a deal and expect a compromise, but if there is none, the President will not do this, period?
MR. CARNEY: Look, we’ve been very clear, the Treasury Secretary has been very clear, is it not — there are no easy ways out here. There are no tricks. There’s no citing of the Constitution that suddenly allows us to borrow money when our borrowing authority has run out. There will be a Treasury auction on August 4th. You can suddenly claim that you have the authority to borrow on behalf of the United States of America. I don’t think the buyers of Treasury securities are going to accept that necessarily. So we don’t find that an argument that works, and we have to deal with the reality that we’re facing, which is the need for a compromise to do the right thing before August 2nd.
Q You continue to say that a default would cause economic calamity on August 2nd. There was a poll today in the Post talking about 52 percent of the public does not believe the President has done enough on jobs. The President of the NAACP was out here last week and told us that he believed the worst is here for many of his constituents, and that he used words like “Great Depression” and that you have to — the lessons learned then are applicable now.
What do you say to those folks who believe they’re already in this calamitous situation and that the President hasn’t done enough?
MR. CARNEY: Well, I would say that we absolutely agree that the economy is not where it needs to be, that we are not growing as fast as we need to be, and that we’re not creating jobs as fast as we need to be. The President has said many times that he will not rest until he knows that every American who is looking for a job has found one.
It is also the case that while we are nowhere near where we need to be, we’ve gone from a situation where the economy was hurdling towards the abyss, and people talked about bank holidays and global economic collapse, where we were losing more than 700,000 jobs a month, where the economy was contracting by more than 6 percent a quarter, to a situation where we’ve been growing steadily — not fast enough, but growing — and where we have been creating jobs steadily. Not enough, but steadily — more than 2.1 million private sector jobs.
But there is no question. That’s why in this process the President has been so insistent that we not do anything, that we not deal with our deficit in a way that harms our economic recovery; that we do it in a way that enhances our economic recovery; that we do it in a way that protects the kind of investments that are essential to ensure economic growth.
Q Do you think the message is not getting out, though, that 52 percent say he’s not done enough?
MR. CARNEY: No, I think that these continue to be hard economic times for a lot of people. And that’s why the President is focused every day on the economy, and why we need to continue to work to make sure that we’re doing everything we can to grow the economy and create jobs, and we’re not doing things that reverse that process. It’s why the President, as I think he made clear on Friday and other days, supports an extension of the payroll tax cut, which undeniably enhanced growth and helped create jobs after it was passed for this calendar year last December in a bipartisan agreement between Republicans and Democrats and the President.
He believes we should again reduce taxes for working Americans for next year, extend that payroll tax cut, precisely because we need to keep doing what we can to create jobs and grow the economy.
Q One quick one. You said earlier in the briefing, $1.7 trillion — $1.5 and $1.7 trillion in discretionary spending —
MR. CARNEY: Well, what I have said in the past, and others have said, is that there was general agreement — I think Jack Lew and others have said this — general agreement where nobody disagreed on $1.5 trillion in discretionary cuts.
An additional $200 billion that we were willing to put forward — this is at the point that the compromise negotiations stalled — an additional $200 billion that we believed that we could support in non-health care mandatory cost savings that we believed we could get Democratic support for. That’s $1.7 trillion.
Q But on the offers, the last offers of the President and Speaker Boehner was $1.2 trillion. I’m just trying to reconcile —
MR. CARNEY: Well, I can — we can get you with people who know the numbers like the back of their hand. But there are different levels of — $1.2 trillion may be non-defense discretionary. But in any case, there was a great deal of overlap in agreement on where we could cut discretionary spending.
Then there was agreement on a certain portion, $800 billion, of tax revenues through tax reform. There was agreement on some of the measures that we could do to find savings through entitlement reform, not all. And that is where some of the tension continued to exist in terms of how that balance would work. I mean, you can’t sort of say, well, this won’t work for us without adjusting over here, because each side has to — there has to be balance in the pain, if you will, that each side is going to endure in order to reach a compromise.
Q And we’ve seen House Majority Leader Cantor leave the Biden talks because of revenues and Speaker Boehner has twice left his private talks with President Obama. Is it three strikes, you’re out? I mean, has the President explicitly given — and the President has endorsed —
MR. CARNEY: I think a football metaphor is better. You have four downs to get 10 yards.
Q So you’re saying that he doesn’t think the big deal is dead?
MR. CARNEY: Look, I think that if all the scenarios or one of the scenarios that was addressed or put forward as a possibility by folks in the front row comes to pass, that the bipartisan compromise is still on the table and is out there and could be taken up. We’re ready to do that. And we would certainly like to see the Speaker and others be ready to do it as well.
We think that there is — I mean, what we’ve said for so long now is that small is not any easier than big, so let’s do big, because as we’ve seen throughout this process, none of this is a slam dunk. None of it is, oh, yeah, boy, we can all support that, because that’s easy. And the fact is why not do something significant and big that requires sacrifice, political sacrifice, by both parties, requires compromise, requires a willingness to take heat and get outside your comfort zone, and do it — and go for something significant here between $3 and $4 trillion of deficit reduction over 10 years?
Q Just real quick on the speech last night. The President embraced, or just had nice words to say about Speaker Boehner and their talks, even though those have been ended. Is that really helpful for Speaker Boehner’s conference to be getting sort of warm words from the President?
And number two, then Speaker Boehner’s comments about the President were really pretty personal and critical. What can you say about the status of their relationship right now?
MR. CARNEY: I think the two men have gotten to know each other, they’ve spent a lot of time together, and they were able to set aside their differences and attempt to work towards a bipartisan compromise. I think that possibility remains.
Like most folks in Washington, especially elected officials, I think everybody is able to endure negative things that might be said about them, and even positive things that might be said about them. I don’t think — I think the consequences of that are pretty minimal. The reality is that while it would be nice — voters didn’t send everyone here just to like each other, but they did send them to work together. And the fact that we have differences, strongly held, and principal differences among us, can continue to be true even as we reach compromise. And that’s the way we approach it.
I think the President was being honest about how he feels his relationship is with the Speaker and how the negotiations went. But really it should be irrelevant, except for the fact that he and, at the time, the Speaker were trying to do something significant that required compromise and political risk.
Q Jay, can I ask about August 3rd? You’ve spoken before about what arrives then — Sophie’s choice, I think, what you called it. Does the President have the power to make choices — you pay this bill, but you don’t pay the other bill?
MR. CARNEY: My understanding is that it is an executive branch process, but that’s why I cited the Treasury Department and OMB.
Q And I understand what the President was saying the other day is that he’s talked about that with Geithner and the options. Why not publish a list of what would get paid and what won’t?
MR. CARNEY: Well, first of all, we don’t believe it’s going to happen. That process, however, I refer you to Treasury and OMB. As I understand it, it would be irresponsible not to look at that, and I assume they’re looking at it. I don’t have anything to announce or publish for you. Again, we believe we’ll get a compromise.
Q You don’t think it would help get a compromise if the American people had in front of them a list of what wouldn’t happen on the 3rd and they would maybe even call more Capitol Hill offices?
MR. CARNEY: I think the reality is clear — the 80 million checks that have to be issued, the fact that we need to borrow in order to pay our bills. We’ll see how this process goes forward. Again, we just don’t anticipate, and certainly hope that that will not happen.
Q Jay, this morning some House and Senate Republicans proposed a bill in which they would make sure that debt service, Social Security, veterans’ checks went out. Is it too premature to begin that discussion, or does the —
MR. CARNEY: Well, I haven’t seen that legislation, but they would be dreaming or engaging in wishful thinking if they think there are no tradeoffs, that you can pay — so you decide what you’re going to pay. There are other obligations that the United States government has because of legislation and decisions passed by Congress and decisions made by Congress, including — not mentioned in your list, maybe it is — the vendors who sell the United States government ammunition to ship to our troops overseas; all the vendors who — these are private businesses that have business with the federal government.
There is no scenario here by which you do not — you can’t escape the reality that if you don’t have the authority to borrow you can’t pay all your bills in a timely manner.
Yes. Christine. I’m sorry, go ahead.
Q I was just going to ask, this morning we spoke with Dan Coats who said that he is getting a mix of calls from both sides. The phone is ringing off the hook on Capitol Hill. What’s the call volume here and how is the response running?
MR. CARNEY: I’d have to check. I don’t know. I’d have to check.
Q With seven days left and so far no deal in sight, in retrospect, do you —
MR. CARNEY: Well, there’s a deal in sight.
Q Well, you say so, but right now there’s not something that solidly will go to both houses in sight. In retrospect, in terms of strategy, do you feel like maybe you would have had more success if you had perhaps gone to the American people earlier with these details, with these numbers that have come out since Friday? Do you feel like that would have been more helpful to have the call volume come into the Capitol earlier?
MR. CARNEY: Look, I leave it to you and then historians to examine this period and talk about how it unfolded. I think that, in answer to questions that Chuck and Carol had about why we approached these negotiations the way we did, I think we have pretty — we’re on solid ground in terms of how Washington works and what the best course of action is if you want a compromise and a result as opposed to a political position.
The President did go in front of the American people in a speech at George Washington University and made very clear what his approach was, the balanced approach, which is principally the same approach he’s taking to this day — the need for, if you’re going to achieve significant revenue — I mean deficit reduction, the need for revenues to be part of that, and his absolute willingness to address the hard issues of entitlement reform, as well as the other difficult spending reductions that he was willing to engage in — or to accept.
So we can — there will be plenty of time to examine that. We think we have been operating in good faith; he’s been engaged intensely. We think we got very far down the road with the Speaker of the House, and we believe that in the end we will reach a bipartisan compromise that will not be perfect but will allow us to do the right thing by the American people.
Q Thanks, Jay. I want to go back to the issue of marriage. Last week Governor Rick Perry of Texas said he believes the issue should be left to the states, and the decision to legalize same-sex marriage in New York is fine with him, even though he personally is opposed to same-sex marriage. That’s virtually the same position as the President’s. Is there any concern that the President may be misjudging support from the LGBT community heading into the election if he’s offering the same position on marriage as a likely Republican presidential candidate?
MR. CARNEY: Look, Chris, I think you know that this President’s record on LGBT issues is exceptional. He’s very committed to it. He worked very hard for DADT repeal, and he continues to work hard on these issues. And it’s not an issue of political support; it’s what he believes is the right thing to do and he will continue to do that.
Q Any reaction to Congressman Wu saying he’s resigning — and to the fact this is the second Democratic congressman to be forced out under these circumstances in recent weeks?
MR. CARNEY: I hadn’t seen that he was resigning so I don’t have a reaction.
Q Amid the debt and deficit situation, has the President been in touch with the major creditor nations — China, Japan, et cetera? If so, what have they told him? And regardless of whether he has or not, what’s his message for them?
MR. CARNEY: Well, not that I’m aware of, although I don’t have any — I don’t have any foreign leader calls to read out, or additional ones.
Our message is that in the end, we are confident that Congress will do the right thing, and that the United States will not default on its obligations for the first time in its history.
Connie and then April, and then I’ll go.
Q Thank you.
MR. CARNEY: Yes, Connie.
Q The President has made reference to talk radio and to columnists. How much influence do you think talk radio and columnists have on this debate? Or are they reflecting American opinion?
MR. CARNEY: I don’t know how to measure it. I’m sure that everybody — everyone in this room has some influence on the debate because the American people get their information about what’s happening here largely through you, through radio, the Internet, television, print. So everybody performs a service here and has an obligation to report fully and fairly.
Q Going back to Kent’s question, how much of a concern does this administration have in this process about the other nations that we are borrowing from, particularly China? Because if they were to at this point in time — and maybe even if things weren’t worked out by August 2nd, if they would call their debts due, it would destabilize this country.
MR. CARNEY: Look, I think that there is a reason why for so long the United States has been considered the gold standard and the safest of safe havens for investment. We intend to ensure that that remains the case, and I think that’s really all I have to say about that.
We need to take the action — and we will — to ensure that that remains the case.
Thanks very much.
Q But wait a minute, Jay. The President has not called any of these nations to say —
MR. CARNEY: I don’t have any foreign leader calls to read out.
1:45 P.M. EDT